Daaaih Loong writes: "On November 6 the Wall Street Journal (subscription only) posted an article by Joseph Hallinan on the bail-out of failing private prisons by the Federal Government.
Federal Government Saves Private Prisons As State Convict Population Levels Off
CALIFORNIA CITY, Calif. -- Like pioneers from an earlier time,
Corrections
Corp. of America nearly met its demise here in the Mojave Desert.
The private-prison operator spent $106 million in 1998 to build a giant
prison in the sand, confident it would land a contract to house
California
prisoners. What CCA officials didn't anticipate, however, was a sudden
stall
in the growth of California's prison population and fierce opposition
from
unionized state prison guards worried about their jobs. The prison
remained
empty and helped push CCA, then struggling with management problems and
mounting debt, to the brink of financial disaster.
The company's desperation should have presented an opportunity to Uncle
Sam.
While state prison populations appeared to be leveling off, the head
counts
in federal prisons were growing more rapidly than ever, fueled by
tougher
drug and immigration laws. The U.S. Bureau of Prisons needed more beds,
and
the empty prison here offered immediately available capacity.
Presumably,
the bureau could negotiate a fire-sale price.
