The private prison industry has said it manages facilities efficiently, but studies are showing they are costly and negatively impact public policy.
Several states have made contracts with private prison operators that require a minimum number of prisoners, according to an analysis by the advocacy group In the Public Interest. If the states don't put enough prisoners behind private prison bars, they are contractually obligated to pay for empty beds.
The In the Public Interest report says more than two-thirds of the 60 contracts it reviewed between private prison companies and state and local governments included quotas. The quotas ranged from 70-100% occupancy. The report argued states should only pay for the number of inmates on a given day.
"If there are these incentives to keep the private prisons full, then it is reducing the likelihood that states will adopt strategies to reduce prison costs by keeping more people out. When the beds are there, you don't want to leave them empty."
Experts say quotas prevent policies that could reduce prison populations while diverting taxpayer dollars to private companies. A spokesman for the Arizona Dept. of Corrections said private companies would charge higher rates without quotas.
Under federal law, 34,000 undocumented immigrants must be housed in private detention centers. In June, a proposal to remove the quota from the coming year's appropriations bill was voted down 232 to 190.
The U.S. Immigration and Customs Enforcement (ICE) agency spends about $2 billion annually on detention. Corrections Corporation of America received $206 million from ICE, and a total of $752 million from federal contracts, in 2012.
"The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by our criminal laws."
In a 2010 annual filing to the Securities and Exchange Commission, CCA wrote that policy changes to drugs and immigration sentencing, as well as reductions in crime rates, could lower "demand for correctional facilities to house" prisoners.
Gov. Jerry Brown has committed $1.14 billion over three years to lease thousands of prison cells. On Sept. 24, Geo Group said it signed a $30 million deal with Calif. to receive 1,400 inmates. The deal comes after federal judges ordered the state to move 9,600 prisoners from overcrowded facilities.
"Private detention facilities are heavily invested in Congress appropriating money for this phenomena. There is a huge private interest involved in all this."
Two of the largest private prison companies, Corrections Corp. and Geo Group, spent more than $13 million and $2.8 million respectively on lobbying since 2005, according to Bloomberg. An AP report puts the figure at $45 million combined with a third company, Community Education Centers.
Ohio's prison system has noticed serious problems with private food vendor Aramark Correctional Services, such as maggots discovered in meals, high turnover rates and inappropriate relationships between staffers and inmates, said a top prison inspection official July 30.