Texas's reliance on private prisons was borne out of a landmark prisoners' rights case that completely restructured the state's corrections department.
A 2003 report by Abt Associates Inc., for the National Institute of Justice offers a history of the industry's presence in Texas.
In 1978, Judge William Wayne Justice of the Eastern District of Texas presided over a class action lawsuit filed on behalf of all Texas prisoners against the Texas Department of Corrections (as it was then known). Two years later, Justice ruled that TDC violated prisoners' constitutional rights in six areas. The department and the prisoners entered a consent decree regarding the necessary improvements.
The changes were slow to come, a problem exacerbated by the rapidly increasing number of inmates. "By the mid-1980s, Judge Justice had become so impatient with the pace at which the state was changing its prison system that he demanded that the state pay a daily fine in excess of $800,000 if it did not improve its efforts to comply with the mandates of the decision," according to the Abt report.
Freaked out by the potential financial hemorrhage, lawmakers in 1987 passed the first bit of legislation that would allow the TDC — rechristened the Texas Department of Criminal Justice in 1989 — the ability to contract with private vendors for the housing of prisoners, parolees and juvenile offenders.
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"The impetus for the program was the need to acquire additional prison capacity quickly and to satisfy the federal court's demands for constitutionally compliant imprisonment," according to the Abt report. "The goal of providing more cost-effective services than the TDCJ was providing was also added, but this was not the dominant objective."