The ACLU has a deeply disturbing report about deteriorating conditions in Ohio prisons after Corrections Corporation of America took over.

This is what privatization looks like:

CCA took control of Lake Erie Correctional Facility on January 1, 2012, and the problems started almost immediately. Officials in Conneaut, Ohio – where the prison is located – were surprised to learn they may be on the hook for policing the facility because state law prohibited the highway patrol from so investigating crimes in this no-longer-state-owned building. Conneaut taxpayers were not keen on CCA and the state passing the financial burden onto them, and despite the community successfully lobbying the state to change this law last year, Conneaut is still saddled with increased responsibility for policing Lake Erie.

Unfortunately, this is not where the problems end.

In September 2012, the Ohio Department of Rehabilitation and Corrections (ODRC) released its first internal audit report. If this was CCA's first report card, let's just say they would need to repeat the semester. The compliance rating plummeted from the 97.3% compliance rating the prison achieved when publicly-owned to 66.7%. Auditors found outrageous violations like prisoners being forced to use plastic bags for defecation and cups for urination because they had no running water for toilets. Basic conditions were heinous, with black mold, standing water, and spoiled food found throughout the prison. Perhaps even more troubling were reports that the medical department is grossly understaffed and many prisoners go untreated.

CCA is a very, very large contributor to Republicans, particularly the Republican Governors' Association. In 2012, it contributed $225,000 to the RGA, because Republican governors like to give them business. In 2010, the year Kasich was elected, their own report shows that corporate contributions were $722,200. Of course, they were able to bury these in the state-by-state breakdown they published following the totals, because the RGA is a national committee and doesn't break down by state.

This is what happens when public duties are handed off to for-profit corporations. According to CCA's most recent quarterly report, their contract for the Ohio facility is an initial twenty-year term with unlimited options to renew.

As the ACLU report warns, if the CCA wants to manage prisons in your state, just shout NO, over and over and over. Also, it might be good not to elect Republican governors.

Gawker released over 950 pages of documents relating to Bain Capital and Mitt Romney's investments, mostly for the years 2008-2010. While I haven't gone through even a fraction of them yet, one entity leaped out at me -- Brookside Capital Partners Fund.

Mitt Romney's Relationship to Brookside Capital Partners Fund, LP (BCPF)

We've heard a lot about Bain Capital and Sankaty Investors, but not too much about BCPF. However, it was listed as an asset on Romney's 2006 disclosures filed while governor of Massachusetts with ownership set at 3 percent.

BCPF goes back much farther than 2006, however. In 1997 and 1998, when Romney was still an active partner in Bain Capital, the structure of Brookside and related entities looked like this, according to the first SEC filing I could find for it:

Brookside Capital Investors, L.P., a Delaware limited partnership ("Brookside Investors"), is the sole general partner of the Brookside Fund. Brookside Capital Investors, Inc., a Delaware corporation ("Brookside Inc."), is the sole general partner of Brookside Investors. The executive officers of Brookside Inc. are set forth on Schedule A hereto. Mr. W. Mitt Romney is the sole shareholder, sole director, President and Chief Executive Officer of Brookside Inc. and thus is the controlling person of Brookside Inc.

To translate that labyrinth a bit, Mitt Romney was the sole shareholder of an entity that was the sole general partner of the investment partnership, BCPF. As general partner, Romney could expect the following:

Pursuant to the terms of a partnership agreement, Brookside Investors as general partner of the Brookside Fund receives a percentage of profits generated by the Brookside Fund. Brookside Inc., as general partner of Brookside Investors, receives a percentage of profits from Brookside Investors. Mr. W. Mitt Romney receives a percentage of profits from Brookside Investors.

This was the structure of Brookside in 1998, at a time where CCA Realty Investors found itself in need of a restructuring.

CCA Realty Investors, CCA, and the Private Prison Industry

Originally, Corrections Corporation of America (CCA) was two separate, publicly traded entities. There was the prison management side of the business (CCA), and the real estate piece (CCA Realty Investors). Both were publicly traded but after a period of fairly steady growth, trouble was brewing.

PrisonPolicy.org has a good recap of the history (PDF):

CCA sought a way to extract even more investment capital from the stock market to pay for its ambitious expansion plans. The solution it hit on was the real estate investment trust. REITs are publicly-traded entities that own and manage real estate but do not pay corporate income taxes. However, these tax avoidance entities must distribute 95 percent of their operating income as dividends to shareholders. These characteristics are intended to boost the price of REIT shares and thereby help raise even more capital.

In July 1997, CCA Prison Realty Trust, a REIT registered in Maryland, made an initial public offering of 21.3 million shares, priced at $21, raising more than $400 million. Most of the proceeds of the offering were used to purchase nine facilities from CCA, which leased them back and continued operating them under government contracts. This process improved the look of CCA’s finances but amounted to the kind of off-balance-sheet transactions that would later become notorious in connection with the fall of Enron. Back in 1998 an investment banker told the financial magazine Investment Dealers’ Digest that REITs such as Prison Realty were “an off-balance-sheet financing vehicle if you want to pursue more acquisitions.” The fact that Prison Realty owned only properties connected to CCA made it a captive REIT.

The use of off-balance-sheet financing was also at the center of numerous deals in which construction of CCA’s prisons was financed through the issuance of tax-exempt lease-revenue bonds (or certificates of participation). These financing vehicles involve the creation of a non-profit entity that issues the bonds and acts as the titular owner of the facility. The bonds are backed by lease payments made by the correctional agency, which also pays CCA an operating fee. More than a dozen CCA facilities were built using this arrangement, which amounts to a form of taxpayer-subsidized low-cost financing for what is essentially a private facility. This financing is only one of the ways in which CCA (and other private prison operators) have received state and local economic development subsidies. It has also received tax abatements (in Youngstown, Ohio, for example), infrastructure assistance and other incentives.

[Side note: This is a perfect example of "You didn't build that."]

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Even though crime rates in American have either stabilized or gone down, the incarceration rate (especially for people who are in this country illegally) has gone up - way up. (As this video points out, more people are being incarcerated on civil charges, not criminal.)

Naturally, as with most changes in this country, this has more to do with profit than anything else - and now we find that Wells Fargo is a major shareholder in for-profit prisons. Hmm. So this is what's taken the place of mortgages as the banking cash cow? From Salon:

As Wells Fargo has grown over the years, using its bailout funds to gobble up rival Wachovia and expand to the East Coast, so has the U.S. prison population. By 2008, one in 100 American adults were either in jail or in prison – and one in nine black men between the ages of 20 and 34, many simply for non-violent offenses, justice not so much blind as bigoted. Overall, more than 2.3 million people are currently behind bars, up 50 percent in the last 15 years, the land of the free now accounting for a full quarter of the world’s prisoners.

These developments are not unrelated.

A driving force behind the push for ever-tougher sentences is the for-profit prison industry, in which Wells Fargo is a major investor. Flush with billions in bailout money and an economic system designed to siphon wealth from the working class to the idle rich, Wells Fargo has been busy expanding its stake in the GEO Group, the second largest private jailer in America.

• At the end of 2011, Wells Fargo was the company’s second-largest investor, holding 4.3 million shares valued at more than $72 million. By March 2012, its stake had grown to more than4.4 million shares worth $86.7 million.

Unfortunately, it’s a safe investment. While a 50 percent growth in the number of human beings our society cages in rape factories may sound impressive – or perhaps the word is “revolting” – a study released last year by the Justice Policy Institute found that the private prison industry grew by more than 350 percent over the last decade and a half. While other industries of course benefit from state-granted privileges, companies like GEO profit by the state literally kidnapping and handing them clientèle, particularly as of late about-to-be-deported immigrants, of which President Barack Obama has ensured there is a steady, record-breaking supply.

“All prisons are awful,” says Melanie Pinkert, an activist based in Washington, DC, who along with other members of Occupy DC’s “Criminal Injustice Committee” is helping lead a boycott of Wells Fargo, which just expanded to the nation’s capital. “But private prisons take it to the next level.” Indeed, a recent report from the U.S. Justice Department found that at one GEO-run juvenile facility in Mississippi, sexual abuse was endemic, “among the worst that we have seen in any facility anywhere in the nation.” According to the report, GEO staff demonstrated:

• Deliberate indifference to staff sexual misconduct and inappropriate behavior with youth;
• Use of excessive use of force by [prison] staff on youth;
• Inadequate protection of youth from youth-on-youth violence;
• Deliberate indifference to youth at risk of self-injurious and suicidal behaviors; and
• Deliberate indifference to the medical needs of youth.

These findings, shocking though they may seem, are not surprising. With an eye on maximizing quarterly profits, privately run facilities are even less inclined than state-run prisons to treat their involuntary customers humanely, skimping on health care and anything else that could hurt their bottom line, particularly programs aimed at reducing recidivism. As the ACLU noted in a report released late last year, “Not only is there little incentive to spend money on rehabilitation, but crime, at least in one sense, is good for private prisons: the more crimes that are committed, and the more individuals who are sent to prison, the more money private prisons stand to make.”

If you haven't closed your Wells Fargo account yet, this would be a good time to do so. But let's not pretend that closing our bank accounts is going to hold back the tide. There's very, very big money involved in sending people to jail for minor infractions (so much so that our political "leaders" won't even entertain the notion of legalizing marijuana) and it's only getting worse. Why, now we even lock up the mentally ill instead of treating them!

From Unholy Alliance: How the Private Prison Industry is Corrupting Our Democracy and Promoting Mass Incarceration, a recent report from Public Campaign and PICO National Network, here are some pertinent points:

• Through involvement in the leadership of ALEC (American Legislative Exchange Council), private prison companies have played a key role in lobbying for and passing harsher sentencing for non-violent offenses including three-strike laws, mandatory sentencing, and truth-in-sentencing. They are also behind the recent spate of anti-immigrant state laws that are putting more and more immigrants behind bars -- the new profit center for the prison industrial complex.

• Private prison companies employ legions of lobbyists to push for policies that support their bottom line. Since 2001, three major prison companies, CCA, GEO Group and Cornell, have spent over $22 million lobbying Congress. Recent lobbying by CCA and GEO Group includes efforts to increase funding to Immigration Customs and Enforcement (ICE).  Since 2003, CCA has employed 204 of lobbyists in 32 states, and GEO Group has employed by 79 lobbyists in 17 states.

• Private prison companies also influence policymaking by strategically supporting political campaigns. At the federal level, the political action committees and executives of private prison companies have given at least $3.3 million to political parties, candidates, and their political action committees since 2001. The private prison industry has given more than $7.3 million to state candidates and political parties since 2001, including $1.9 million in 2010, the highest amount in the past decade.