Editorial: Cheaper isn't always better

When Bill Ackman speaks, people listen. So, the Pershing Square hedge fund manager got a lot of people's attention last week when he said he was locking up his money.

More specifically, Ackman has acquired about a 10 percent stake in Corrections Corporation of America, the nation's largest private operator of prisons and jails.

"The biggest risk to Corrections Corp. is that people stop committing crimes, and I think that's a low-probability event," said Ackman. He's looking at the trend of more and more state and local governments deciding that it's more economical to let a business run their lockups.

In a presentation at the Value Investing Congress in New York, Ackman noted that private prisons had gained 49 percent of the incremental growth in America's prison population in 2007. Every inmate probably represents a dollar sign to him.

Camden County is thinking of joining the private-jail crowd. But it must be concerned about more than dollars and cents. Privatized jails have yielded mixed results. In some cases, disastrous outcomes overshadowed savings.

For example, at Pennsylvania's only privately run jail, in Delaware County, seven inmates died in 2005 under the watch of its former operator, Geo Group. After paying hundreds of thousands of dollars to settle wrongful-death lawsuits, the company eventually terminated its contract. A new firm currently runs that jail.

Earlier this month, a long-awaited study of the Camden County jail by a consultant recommended replacing the facility with a privately built and operated jail.

Corrections officers are threatening legal action to block the move. The officers fear that their salaries will be drastically cut if they are hired by a private firm, or they will lose their jobs to ill-trained replacements, which raises valid security concerns.

Before county freeholders consider turning the jail over to a for-profit company, they must take a close look at other jails that have gone that route.

Regardless of its operator, closing the current facility appears to be the best course. The Camden County jail has been plagued with problems since it opened in 1988.

Built to house 1,200 prisoners, the jail has been dangerously packed with as many as 2,000 inmates. Given its disrepair and inhumane, unhealthy, and unsafe conditions inside the jail, replacing it should be an easy choice.

Other options in the $100,000 consultant report include building a new jail operated by the county outside the city of Camden, or partnering with another county to develop a new regional jail.

Before anything happens, there should be extensive discussion. County officials say they plan to take as long as a year to weigh their options. That's fine. Privatization may seem attractive, but the freeholders need to hear from critics who believe badly run private facilities too often bypass the scrutiny that they need.