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A statute in May 1930 provided for the employment of prisoners. The creation of a corporation for the purpose was authorized by statute in June 1934. The Federal Prison Industries (UNICOR) was created by executive order in December 1934.
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CCA offered to take over the entire state prison system of Tennessee for $200 million, but was shot down due to opposition from public employees and a skeptical state legislature.
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Correction Corporation of American (CCA) took over the first prison in Hamilton County, Tennessee.
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Some U.S. states began to impose bans, population limits and strict operational guidelines on private prisons. Illinois enacted the Private Correctional Facility Moratorium Act. New York and Louisiana enacted laws to ban prison privatization.
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Some U.S. states began to impose bans, population limits and strict operational guidelines on private prisons. Illinois enacted the Private Correctional Facility Moratorium Act. New York and Louisiana enacted laws to ban prison privatization.
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UNICOR is economically self-sustaining and receives no government funding. In fiscal year 1996, UNICOR had net sales of $459 million. In fiscal year 2008, UNICOR employed 21,836 inmate, 17% of eligible inmates held in federal prisons. The company generated $854.3 million in sales.
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For-profit prison companies begin to build new prisons before they were even awarded any privatization contracts. They did so in order to obtain state contract approval. CCA builds a 2,000-bed prison facility in California, spending upwards of $80 million dollars. They did this without even having any contracts from the State of California. A CCA official was reportedly quoted as saying, “If we build it, they will come”.
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There were 153 private correctional facilities (prisons, jails and detention centers) in the U.S.
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Wisconsin began to work on laws to ban all future speculative prison construction in the state. Oregon and North Dakota passed a bill in 2001 that banned the export of Class A and AA felons outside of the state in an effort to retain control over the quality and security of correctional facilities. Nebraska legislation that requires private prisons to meet public prison standards. This was overwhelmingly approved the legislation, but pocket-vetoed by the governor.
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Congress and the Bush Administration made several efforts to mitigate the competitive advantage held by UNICOR over the private sector. In 2003, UNICOR's board of directors eliminated the mandatory source clause for federal purchases under $2,500, and mandated itself to approve waivers in all cases where the private sector provides a lower cost.
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There are 264 private correctional facilities in the U.S. The major players are the Corrections Corporation of America (CCA), the GEO Group, Inc. (formerly Wackenhut Securities), Cornell Corrections and Community Education Centers.
