Politics

FACT CHECK: Kamala Harris Falsely Claims That Private Prisons Make $3.3 Billion In Profits A Year

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Democratic Sen. Kamala Harris said at a confirmation hearing for attorney general nominee William Barr Tuesday that the two largest private prison companies make $3.3 billion per year in profits.

“There’s a billion dollar private prison industry that profits off of incarcerating people. And frankly, as many as possible. By one estimate, the two largest private prison companies in the United States make a total combined profit of 3.3 billion – that’s with a B – dollars a year,” she said.

Verdict: False

The two largest private prison companies made $324 million in profits in 2017, according to Securities and Exchange Commission (SEC) filings.

Fact Check:

Harris asked Barr if he would commit to ending private prison contracts as attorney general after citing the figure on profits and a 2016 Department of Justice (DOJ) report that found that private contract prisons had more security and safety incidents per capita than comparable government-run prisons.

Actual private prison profits, however, are a fraction of the $3.3 billion figure that Harris cited.

CoreCivic and the GEO Group are the two largest private prison companies. Together, they manage over half of the private prison contracts in the U.S.

Because GEO and CoreCivic are publicly traded companies, each is required to file annual reports with the SEC on the company’s financial performance. The 10-K forms for CoreCivic and GEO reveal that they made a combined $324 million in profits (listed as net income) in 2017 – less than a 10th of Harris’ claim of $3.3 billion.

Those profits include money from operations outside of U.S. correctional facilities. CoreCivic also provides prisoner and detainee transportation services, while GEO operates seven facilities outside the U.S.

Harris likely confused revenue with profit. A few reports and news stories mention that CoreCivic and GEO had $3.3 billion in annual revenue. Her office did not respond to a request for comment.

The $3.3 billion in combined revenue figure dates back to 2014. In 2017, CoreCivic and GEO had a combined $4 billion in revenue.

A 2017 report from the Prison Policy Initiative (PPI) included a third private prison company, the Management & Training Corporation (MTC), in its figure for private prison profits in 2015: $374 million. MTC is not publicly traded, so PPI estimated its profits based on records from a decade earlier.

PPI noted that money paid to government correctional staff dwarfs the profits earned by private prison companies. “The government payroll for corrections employees is over 100 times higher than the private prison industry’s profits,” it said. “The criminal justice system is overwhelmingly a public system, with private prison companies acting only as extensions of the public system.”

There were 18,196 federal inmates in privately managed prisons as of Jan. 17, making up about 10 percent of the total federal inmate population, according to the Federal Bureau of Prisons. A Bureau of Justice Statistics report found that 8.5 percent of federal and state prisoners were held in private prisons in 2016.

Barr did not commit to ending private prison contracts as attorney general but said that he would look at the DOJ report.

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