Then, in the late 1990s, private prison companies began taking some serious knocks. Whereas industry-funded studies had asserted that private prisons gave more bang for the buck than their public counterparts, studies by independent researchers called this assertion into question; a number of high-profile abuse and escape cases dented law enforcement confidence in their facilities and eroded the value of their stock; and a series of lawsuits by disgruntled investors further ate away at credibility and profits. Perhaps most devastating of all, CCA and other companies found that they had built too many prisons entirely on spec, and when the country's prison population stopped growing so dramatically, they had a bunch of expensive prisons with no prisoners to fill them [see Eric Bates, "Private Prisons," January 5, 1998, and "CCA, the Sequel," June 7, 1999].

Back at Gibby's Bar, one guard, who used to work at a private facility in Florence, claims that the prison's staff were ordered to arbitrarily tear-gas inmates; that prisoners were locked up in isolation units without the correct administrative procedures being followed; that senior officers were hired who had been fired from state prisons for having sex with inmates and smuggling contraband. Inside other prisons, such as the CCA facility in Youngstown, Ohio, staff abuse of inmates was so manifest that state and federal agencies ultimately yanked their contracts and left the facility empty (the CCA facility reopened as a private prison for federal detainees in April).

In the past few years, however, CCA has received a face-lift; Wackenhut's prison holdings successfully spun off into the GEO Group; and cash-strapped state and federal agencies have once again turned to them as a way to maintain their prison complexes without having to raise taxes or seek voter approval for the issuing of billions of dollars of general-revenue prison bonds. Referring specifically to federal agencies responsible for detaining illegal immigrants and those charged with federal crimes, Geoffrey Segal says, "It'll be very hard for any of these agencies to build a new facility without strongly considering it being private, simply because they don't have the money."

Many small states have chosen to export large numbers of their prisoners to out-of-state private facilities rather than bear the cost of building their own new prisons (a handful of Western legislators have even proposed building private prisons in Mexico to house noncitizen state prisoners). In December 2003, in New Hampshire, the Governor's Efficiency in Government Commission recommended privatizing the entire Department of Corrections. Software entrepreneur John Babiarz, who had never previously worked in corrections, and one other commission member were responsible for this recommendation. "New Hampshire needs the money elsewhere," Babiarz explains. "States have to have prisons and people need to be incarcerated. The question is, How do we do it cheaper? We can't do it alone as a government agency. Maybe just the idea of privatization has some people thinking they need to operate more efficiently."

At the same time, many impoverished counties have in recent years essentially converted themselves into for-profit prison speculators, often in conjunction with private companies, their lobbyists and middlemen. These small counties have issued bonds to build prisons and immigrant detention centers and have then approached federal agencies, trying to woo prisoner contracts by offering rock-bottom prices.

Close to 600 miles southeast of Florence, the dying oil town of Pecos, in the remote West Texas county of Reeves, is praying that the GEO Group can bring 800 state prisoners from Arizona to town. And fast.

Pecos--bona fide cowboy territory, where in 1883 the world's first ever rodeo wowed locals--boomed in the 1950s, its farmers' pockets flush with cotton dollars. It crashed somewhat in the 1960s. Then in the 1970s it boomed again, this time floating on the West Texas oil rush. In the 1980s, when the local oil industry bottomed out, the city once more lost its bearings. Its population of 9,000 started dwindling, then collapsing, its young people began leaving, cinder-block and wood houses were left to decay, and the dry, dusty desert began reclaiming abandoned lots. Ugly and aimless, Pecos began casting around for a third boom. With prisons, Reeves County officials thought they had found the answer.

In the late 1980s, the county issued revenue bonds to build a 1,000-bed prison, which they then leased out to the Federal Bureau of Prisons. In the mid-1990s a newly elected judge, Jimmy Galindo, and the four county commissioners arranged for another bond issue to construct a second 1,000-bed prison. Again, the Feds stepped in with a nice contract, lured by the low fees requested by Reeves County.

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