CHARLES Fenton, a former federal prison warden, and his brother, Joseph, a real estate entrepreneur, are about to turn a 68-acre site north of Pittsburgh into the latest venture in a new and growing industry: private, for-profit prisons.
With little public notice, close to a dozen such institutions have opened in the last 18 months, or will open soon. In Pennsylvania, the RCA Service Company runs a juvenile training school for the state. A California-based company, Behavioral Systems Southwest, has converted four motels in three Western states into jails for illegal aliens. This spring, two ex-sheriffs will open a converted military base near Mineral Wells, Texas, as a 575-bed prison for the US Bureau of Prisons.
Most corrections officials were skeptical about the idea until recently, but spiraling inmate populations and the rising cost of incarceration have forced them to reconsider. The new corporate wardens assert that they can imprison people more cheaply by eliminating government bureaucracy and using more efficient financing and management practices. The companies take prisoners at rates ranging from $24 a day for the sparse accommodations that illegal aliens receive to about $110, which RCA charges for running a full educational and therapy program for hard-core delinquents.
The Fenton brothers are building the largest private prison yet, a $15 million, 720-bed institution, complete with workshops, a library, and tall double fences behind an earthworks barricade. They plan to specialize in protective-custody prisoners, taken from overcrowded state institutions all over the United States. Correctional officials in New Jersey, Indiana, and Maryland are negotiating with the Fentons, and about 10 other states, including Connecticut and New York, have expressed interest.
Federal, state, and local governments in the United States may spend as much as $10 billion this year on imprisonment, a figure that has led a number of business conglomerates to take notice of the potential for profits. Control Data Corporation opened a ''corrections services division'' in January and is looking for prisons to run. The Corrections Corporation of America, a newly formed company based in Nashville, has been financed by the Massey Burch Investment Group, the same investors who started the now-booming Hospital Corporation of America.
The Corrections Corporation's founder, Thomas Beasley, a real estate and insurance businessman, plans to run the company's prisons much like the Hospital Corporation runs its nearly 150 hospitals. He will use large purchase orders and centralized accounting and management, and he will hire experienced wardens from the public agencies. The company's first venture is a $4 million, 300-bed detention facility for illegal aliens in Houston. The center opened this month under a contract with the US Immigration and Naturalization Service.
RCA's juvenile training school, situated in the countryside near Allentown, Pa., is housed inside a two-story brick building that belongs to the state. It is buttressed with high fences, mesh-covered windows, and locked steel doors on the outside, but inside, the atmosphere is relaxed. The inmates, who have keys to their own rooms, spend their days attending remedial education and vocational training classes and taking part in daily group therapy. The state dictates most aspects of the institution's program under a $900,000 yearly contract, about 5 percent of which is RCA's profit. The school has a reputation among juvenile-justice experts for being humane and well run, and RCA executives hope this will help them expand into adult prisons.
Like others in the prison business, they are sending out marketing representatives to sell corrections officials on the idea. In a number of states where private prisons are forbidden by law, entrepreneurs have lobbied for changes. In March, the New Mexico Legislature passed a law allowing counties to contract for private jails, following a lobbying campaign by a Colorado oil and cattle magnate, O. Wesley Box, and officials in seven rural counties who want Mr. Box to build jails for them.
''I tell people wherever I go: 'You can afford to build a jail,' '' said Box in a recent telephone interview, delivering his sales pitch in rhetorical tones. ''Let me tell you why. . . . Because if you don't lock up the people who are committing the crimes, they'll kick in your door and steal your $400 color TV.''
Some observers feel queasy about the prospect of entrepreneurs like Mr. Box making money from imprisoning people. ''Should this be an industry that's manufacturing a consumer product?'' asks Mark Cunniff, director of the National Association of Criminal Justice Planners. ''We're talking about taking away people's liberty. I have questions about anyone but the state doing that.''
The Houston branch of the American Civil Liberties Union has filed a lawsuit in federal district court seeking to halt the practice. The suit claims that contractors, in their pursuit of profits, are apt to make prison life even worse than it already is by cutting back on services and hiring unqualified staff.
The federal government has tried to ensure quality by requiring contracts specifying standards for all aspects of prison life, and by stationing full-time observers in its private institutions. Some critics, however, are afraid that contract prisons will generate the same kinds of scandals as contract nursing homes, which despite numerous inspectors and standards have still frequently become substandard facilities.
That is not to say that government agencies are necessarily better; publicly run prisons in at least 32 states are now under federal court orders to remedy what judges have deemed unconstitutionally cruel conditions.
''These companies are not going into business to make the world a better place,'' observed Peter Greenwood, a Rand Corporation research fellow who proposed the idea of private prisons several years ago. ''But this may be a chance to bring in innovative thinking. The corrections world could certainly use some of that.''