(Bloomberg) -- Indianapolis is getting out of business with the U.S.’s second-biggest for-profit prison company. And it’s taking a new 3,000-bed jail with it.
When the city heads to Wall Street Thursday to borrow $610 million to build a jail and criminal justice complex on the site of an old coking factory, it’s betting it can better house criminals and rehabilitate them on its own. That means CoreCivic Inc., which has run a Marion County jail for two decades, will lose the contract when the new one opens.
The decision to sever ties with CoreCivic is part of a shift in policy-making that seeks to address a cycle of recidivism that keeps sending repeat offenders back to jail. It joins other governments nationwide, including California, that are reconsidering a reliance on the private companies that stepped in as the war on drugs and mandatory minimum sentencing laws caused inmate populations to soar, leaving more than half of the states paying businesses to incarcerate their residents.
"The idea that there would be profit to be made through the imprisonment of our neighbors is something that’s abhorrent to a number of people -- many of our constituents cannot process that," said Zach Adamson, vice president of the council that oversees the consolidated government of Indianapolis and Marion County. "Criminal justice is not getting better as long as our primary concern is looking to cut corners and save costs."
Opponents of private prisons gained a victory earlier this month when JPMorgan Chase & Co. said it would stop extending new financing to the industry after the bank came under fire for lending to companies that have imprisoned immigrant families. JPMorgan will, however, help underwrite the Indianapolis bond sale that will pay for a complex with a jail, courthouse and treatment center.
Related: JPMorgan Ends Financing of Private Prisons After Criticism
The project is a signature policy of Mayor Joe Hogsett, a former federal prosecutor who in 2016 convened a task force to examine ways Indianapolis could cut crime and address overcrowding in its jails. The group came up with a set of recommendations that emphasized tackling "underlying causes." Doing so could help chip away at the $440 million spent on the criminal justice system in the city-county each year, the biggest expense for taxpayers, the task force found.
The complex is intended to provide smarter care for what the task force described as "super utilizers," or people struggling with addiction and mental illness who bounce between jail and community groups. Up to 40 percent of people detained in Marion County’s jails are mentally ill and 85 percent suffer from substance abuse, according to the group’s report.
The complex will consolidate the courthouse, its jails and rehabilitation operations in one modern site. The city-county council voted in April 2018 not to privatize the new lockup, dealing a blow to CoreCivic, which has managed a facility there since 1997.
"The goal of the jail system shouldn’t be to fill the beds," said Andy Mallon, corporation counsel for the government. "We’re trying to reduce crime and reduce the number of people who are involved in crime."
The movement away from the private prison industry is happening in other states, as well. California Governor Gavin Newsom, a Democrat, in a January address said the most-populous U.S. state would "end the outrage of private prisons once and for all."
In Minnesota, state representative Ryan Winkler, a Democrat and the House majority leader, has proposed banning private prison companies from jailing inmates, a move that would squelch efforts to revive a shuttered jail in the state that was operated by CoreCivic. It could face opposition in the state’s Republican-controlled Senate. In Nevada, a recently introduced bill would prohibit private companies from providing "core" correctional services such as housing prisoners.
Amanda Gilchrist, spokeswoman for CoreCivic, said the company has a history of helping alleviate prison overcrowding, which she said is still a problem in states like Minnesota and Nevada.
"It’s clear that efforts to sideline our industry are both purely political and short-sighted," she said. "Taking away an important tool that helps governments flexibly manage their corrections needs will only return us to the overcrowded, dangerous systems – devoid of meaningful programming -- that led to our creation in the first place."
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