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US: Juvenile Crime Pays

by Alex FriedmannPrison Legal News
February 1st, 1998

The juvenile justice system has become enormously profitable as youths are channeled from the schoolhouse to the jailhouse in ever-increasing numbers. From 1991 to 1995 the population of youthful offenders held in privately operated facilities grew 10% to an estimated 35,600, according to the Office of Juvenile Justice and Delinquency Prevention. In 1997 Equitable Securities Research released a report entitled "At-Risk Youth: A Growth Industry," which indicates there are 10,000 to 15,000 private juvenile justice service providers. Publicly traded juvenile corrections companies made $75 million in net profit in 1996 alone. An estimated $3 billion is spent each year on services for juvenile offenders at the federal, state and local levels, and up to $50 billion is spent annually on programs for at-risk youth.

Private companies that primarily provide adult corrections services are jumping on the "jails for juveniles" bandwagon: The Corrections Corporation of America (CCA) and Wackenhut operate seven juvenile facilities each, and the Corrections Services Corp. operates six. In May 1997, Cornell Corrections, another adult prison contractor, announced its interest in acquiring the privately-held Abraxis Group, a leader in juvenile supervision services that provides residential, educational and treatment programs to over 1,300 youths. Cornell already manages a Youth Development Center in Georgia and is in the process of converting a county jail in New Mexico into a juvenile detention facility.

Most privatized services for youthful offenders, however, are provided by companies that specialize in that field. One of the industry leaders is Youth Services International (YSI). As of January 1997, YSI was managing 20 juvenile facilities with over 4,000 beds in twelve states; the company has annual revenues of approximately $100 million. Youthtrack, another service provider, operates juvenile justice programs in Colorado; the company recently entered into a contract to manage a detention facility for youthful offenders in Bayamon, Puerto Rico. Other established companies in the for-profit juvenile corrections industry include Rebound, Inc. and Children's Comprehensive Services.

The privatization of corrections-related services for youthful offenders, including incarceration, has received mixed reviews. Cash-strapped state and local governments faced with burgeoning juvenile offender populations have embraced the concept. "They fill a vital role because we can't meet the needs of every kid," explains Judy Brisco with the Texas Youth Commission.

The public's reaction to private juvenile justice services has been less conciliatory. In early 1997, for example, Youth Service International's plans to build detention centers in Pennsylvania and New York were canceled after the company met with stiff resistance from the local community. Such opposition is partly a "not in my backyard" attitude, while other criticisms mirror those leveled against private companies that operate adult prisons. Critics charge that an industry that profits from crime has little incentive to rehabilitate offenders. They say that it is immoral for companies to profit from people who are incarcerated and it is ethically questionable for the government to contract its custody and control of prisoners to the private sector (in reference to juveniles this could be termed "in loco parentis for profit").

Safety and security concerns raised local communities are entirely justified in light of past incidents that have occurred at private juvenile centers. In 1994 Rebound lost a three-year, $150 million contract with Baltimore County, Maryland to manage the Charles R. Hickey School, a facility for hard-core youthful offenders, after the company allowed too many escapes. One year later a Rebound facility in Brush, Colorado was harshly criticized in an independent evaluation that found "a consistent and disturbing pattern of violence, sexual abuse, clinical malpractice and administrative incompetence at every level of the program." Colorado's juvenile corrections division admitted that it had to lower its contract performance standards for the facility because the state was dependent on Rebound to provide bed space. Further, in March 1997, Florida canceled a detention center contract with Rebound due to inadequate performance.

Other juvenile justice service providers have had similar problems. In July 1994, the same week that Youth Services International assumed Rebound's canceled contract to operate the Charles R. Hickey School, a juvenile escaped from the facility. Four months later a female employee was raped by a youth at the school's sex offender unit. And on June 5, 1995 seven juveniles overpowered a bus driver and three counselors and escaped as they were being driven across campus; several other youths were injured when the bus crashed.

Sometimes the problem is not with the juvenile offenders but instead with the company contracted to incarcerate them. The worse case scenario in this regard resulted in South Carolina's June 1997 decision not to renew a $14 million contract with CCA to operate the 400-bed Columbia Training Center. In January 1997 investigation by the governor's office found that officers used excessive force against young offenders. CCA employees were accused of hog-tying the juveniles, and several of the youths claimed they had been subjected to physical abuse and were denied food, medicine and toilet facilities. Six youths escaped in 1996 and the facility's administrator was replaced. After eight more juveniles escaped from the training center in February 1997, CCA agreed to withdraw from the contract, stating it was "inordinately distracting to both parties."

Despite these setbacks the private juvenile corrections industry continues to grow as state and local governments attempt to cope with decreasing budgets and increasing numbers of youthful offenders. But whether society will benefit from privatizing the juvenile corrections system remains in doubt - especially considering that for-profit juvenile justice companies are accountable to their stockholders and not to the tax-paying public. The true measure of the effectiveness of the private juvenile corrections industry will not be realized until the youthful offenders incarcerated in privately-managed facilities today grow up to become the law-abiding, or law-breaking, adults of tomorrow.

Addendum: Statistics released by the U.S. Department of Justice in September 1997 indicate that violent juvenile crime dropped 9.28% the previous year. This dip in the crime rate for youthful offenders, has not, however, dampened the enthusiasm of juvenile justice service providers. According to Diane McClure, CEO of Securicor New Century, speaking at the Second Annual Privatizing Corrections Conference, "Our market analysis shows that despite recent reports of decline, juvenile crime will continue to rise and demand for beds will remain solid.