A number of bad ideas and virulent trends in American life converge, it seems to me, in the unfolding scandal in Wilkes-Barre, Pa., known as “kids for cash.”

The blurring of the line that separates profit from state, especially since the Reagan era, has had a far more devastating effect on American values — indeed, on the very notion that anything besides a good financial buzz even has value — than the blurring of that more famously wobbly line that separates church from state. What’s been going on in the Luzerne County judicial system over the last five or six years illustrates this with a raw jolt.

Two juvenile court judges there, Mark Ciavarella and Michael Conahan, were recently arrested for setting a new standard in entrepreneurial corruption: taking payoffs — $2.6 million since 2003 — in return for sending youngsters accused of petty offenses (fighting, shoplifting, lampooning an assistant principal on MySpace) to private prison facilities, sometimes for preposterously extended stays.

The war on crime (the long-running domestic version of the war on terror) meets the predatory logic of the free market. Whack! Thwack! You get it yet, America? Nothing is sacred except the Almighty Buck. All hail the free market and I-get-mine.

The bad idea here is privatizing prisons. A former co-owner of the two facilities where the kids got sent, PA Child Care LLC and a sister company, Western PA Child Care LLC, insists on his own victimization in the judicial fraud — he had no choice but to cough up the bribe money, his lawyer says — and he has not been charged, though investigation continues. But the lucrative contracts these facilities secured with the county were, according to the Associated Press, “at least (partially) dependent on how many juveniles were locked up.”

Wow, is that cynical or what? Such contracts are crimes of opportunity waiting to happen, especially in an atmosphere of government-is-the-problem that the political right has been promoting with lavishly funded PR campaigns since the ’80s. As government is stripped of moral legitimacy, it degrades into a cash cow. And when that happens, this fragile agreement called democracy, which we have been slowly constructing over the last 232 years, begins falling apart.

In the juvenile court system that Ciavarella and Conahan presided over, according to news accounts, justice had a Guantanamo Bay feel to it. Young people accused of one thing or another were herded before the magistrate, often having unknowingly (“Here, sign this”) waived their right to counsel, given a hearing that may have lasted no more than 90 seconds and, as the gavel fell, sent off to the junior slammer. “Next!”

Many of these kids had never been in trouble before and many of the offenses that netted jail time were trivial in the extreme. Sixteen-year-old Hillary Transue, for instance, who lampooned her assistant principal on MySpace, was given a three-month sentence. (With a lawyer’s help, she got out after one.) Kurt Kruger was in the company of someone who was caught shoplifting at Wal-Mart; accused of being a “lookout,” he wound up doing almost a year of jail time. Jamie Quinn exchanged slaps with a friend during an argument; she also was sent away for almost a year. She was 14.

Multiply these judicial disasters by, oh, 5,000. That’s the number of cases the Pennsylvania Supreme court will have to reopen, according to Bob Schwartz, executive director of the Philadelphia-based Juvenile Law Center, which advocated for some of the convicted teens and helped expose the fraud. Several hundred families have filed a class-action lawsuit against the two ex-judges, the AP reported.

There is, of course, an obvious and shocking immorality on display in this scandal. Beyond the corruption and illegality, however, some fundamental questions loom that have immeasurable bearing on who we are as a nation.

When justice is partially privatized, the profit motive enters the debate about effective crime control and the long-term value of punishment. Crime profiteers are as socially detrimental as war profiteers: Their primary interest, as exemplified so audaciously in Wilkes-Barre, isn’t fairness, justice, rehabilitation or the good of the community, but, sheerly, the processing of detainees. The more the merrier. Recidivism is a good thing.

And their influence shows in public policy. For instance, controversial “three strikes” laws that call for mandatory sentencing have the fingerprints of lobbyists for the private corrections industry all over them. Our prison population has been skyrocketing because of such laws since the ’80s; more than 2 million Americans are now behind bars, making our prison population by far the largest in the world. There’s a lot of money in crime.

But while the crime profiteers get rich, state and local governments go bankrupt pouring money into the dead end of punishment. The Washington Post has pointed out that, in the last two decades, state spending on corrections increased by 127 percent, while spending on higher education rose only 21 percent. This is what happens when we sell our values — and our children — to the highest bidder.

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Robert Koehler, an award-winning, Chicago-based journalist, is an editor at Tribune Media Services and nationally syndicated writer. You can respond to this column at bkoehler@tribune.com or visit his Web site at commonwonders.com. © 2009 Tribune Media Services, Inc.