Advocates of privatizing public services promise that the magic of the free market will result in better services for fewer tax dollars, but time and again those ideological claims run headlong into reality. Private companies have to turn a profit, and that means cutting corners, paying lower wages and often failing to provide quality goods and services.

Case in point: Officials in Michigan are already regretting a recent move to privatize food services for inmates in the state’s prison system. Early results have proven disastrous.

Paul Egan reports for the Detroit Free-Press:

Maggots in the kitchen and on the chow line. Workers caught smuggling contraband or engaging in sex acts with inmates. Food shortages and angry prisoners. Those are among the problems that have plagued Michigan prisons since December when the state — in a move aimed at saving more than $12 million a year — switched from using state workers to feed prisoners to a private contractor, Aramark Correctional Services of Philadelphia. Ongoing turmoil with the 7-month-old contract — including many instances never previously disclosed — is detailed in more than 3,000 pages of state records obtained by the Free Press under Michigan’s Freedom of Information Act: One Aramark food service director showed up drunk and failed a Breathalyzer. Another worker was caught trying to smuggle marijuana. Others have failed drug tests, kissed prisoners, threatened to assault inmates, or announced intentions to “go postal” inside a facility, records show. “I’m at my wit’s end,” Kevin Weissenborn, the Michigan Department of Corrections manager in charge of policing the Aramark contract, e-mailed one Michigan warden in March, records show.

The move cost 370 public employees their jobs. According to Egan, most Aramark workers are “paid about $11 an hour in a high-stress environment with high turnover.” And the Free-Press investigation found that of the 300 workers hired by Aramark to work in Michigan prisons, 74 — nearly a quarter — “had been banned from prison property for various infractions as of the end of June.”

Earlier this month, Egan reported that 150 prisoners at the Parnall Correctional Facility in Jackson, Michigan, had fallen ill with “flu-like symptoms,” and the prison was partially quarantined. It was unclear whether tainted food served by Aramark was responsible, but the illnesses began shortly after “maggots were discovered… along a prison meal line — inches from the serving trays.”

Experts say that food shortages and similar problems pose a unique security threat within prison walls. Alan Pyke reported for ThinkProgress that Aramark’s “poor handling of a food contract was blamed for causing riots in a Kentucky prison in 2009, and issues similar to the ones Michigan officials report have cropped up in Aramark-run prison kitchens in Florida, Ohio, and Indiana.

In March, just four months into the contract, the state hit the company with a $98,000 fine for repeated contract violations. Now officials are considering canceling the three-year contract.

Aramark Correctional Services is a division of the Aramark Corporation, a major supplier of food for sports facilities, hospitals, educational institutions and other businesses. According to Alan Pyke, “prisons operations are a bright spot on the [corporation’s] accounting sheet. Its most recent quarterly report praised corrections contracts as a primary growth area in the multinational company’s portfolio.” According to the Michigan Secretary of State’s Office, Aramark spent close to $600,000 lobbying state officials over the past seven years.

False Promises and a Shady Study

As Michigan’s legislature debated prison privatization, the Free Press ran an op-ed by Simon Hakim and Erwin Blackstone, two economists at Temple University’s Fox School of Business. The scholars called for “a debate rooted in data and facts,” and touted their research ostensibly showing that privatization saved states money without compromising the quality of correctional services.

What Free Press readers weren’t told is that the scholars’ paper, which hasn’t been peer-reviewed or published in an academic journal, was funded by the private prison industry. Nor were readers made aware of other “op-eds they published in newspapers around the country, most with no mention of their funding source,” according to the Philadelphia Inquirer. Their lack of disclosure of the apparent conflict of interest is the subject of an ethics complaint now being investigated by the university.

When contacted by a reporter for the Inquirer, the scholars got in touch with the Corrections Corporation of America – “the nation’s largest private corrections company and one of their funders” — and asked it to release a statement. CCA’s spokesman, Steve Owen, told the paper, “It’s very telling that not one person has yet to say one thing critical about the validity of the research and the findings.” But Christopher Petrella, a researcher at the University of California, Berkeley, tells BillMoyers.com that Owen’s claim is completely false:

“Over the past year or so, many organizations have rightly underscored the conflict of interest inherent in the industry paying for a study that it then cites. But I wanted to take a closer look at the study’s actual content — what are its starting assumptions? What methodology did they use? And what I found was striking. If you actually dig into this study, you find that it fails to account for dramatic demographic differences between the adult population housed in public prisons and CCA’s privately operated facilities.”

Petrella found that CCA had negotiated a contract with the state of California — his focus, and home to 12 percent of the nation’s privately held prison inmates — that allowed them to exclude prisoners with any of a long list of illnesses and behavioral problems. “It’s an exercise that inoculates the company from having to house these high-cost prisoners,” he said, “which artificially deflates the cost [per prisoner] in CCA’s private prisons, and inflates the costs of those that remain in the public system, which can’t cherry-pick which prisoners it houses.”

Petrella found that per-prisoner health care costs for the healthiest prisoners in California — like the ones in CCA’s facilities — are about one-tenth of what it costs to house prisoners in a public facility with a high share of sicker, older inmates.

Petrella wrote an open letter to CCA and the Temple University scholars, posted at the ACLU’s website, asking them to address these glaring methodological errors. So far, no response.

A Troubling Industry

In the late 1990s, the for-profit prison industry was in deep trouble, and risked disappearing entirely. But when some of the leading for-profit prison companies began lobbying for new laws requiring immigrants awaiting deportation hearings be detained in ever greater numbers, the industry bounced back.

In 2012, Aviva Shen reported that over the previous decade the for-profit prison industry spent $45 million lobbying federal officials, and raked in more than $5 billion on immigration detainees alone. A 2011 study by the Justice Policy Institute similarly found that “as revenues of private prison companies have grown over the past decade, the companies have had more resources with which to build political power, and they have used this power to promote policies that lead to higher rates of incarceration.” The report concluded that the “pro-incarceration policies that private prison companies promote do nothing to improve communities or cut costs, and may actually have the opposite effect.”

Those lobbying dollars continue to spur the industry’s growth. As Aaron Cantu reported for AlterNet, “While the total prison population in the country grew 16% between 2000 and 2011, the state private prison population grew 106%. Yet despite this astronomical growth, not a single independent study has ever corroborated the incarceration industry’s claim that its services save taxpayers’ money.”

And, as a recent report by Citizens for Responsibility and Ethics in Washington pointed out, “Privatizing entities once under exclusive governmental control has eliminated a key component of public accountability — access to information that explains how the prisons are being run, at what cost, and the extent to which they are engaging in abuses that deprive prisoners of their basic civil liberties.”