The Virginia Department of Corrections has built numerous new prisons in the 1990's. More prison beds were required by court decisions forcing better treatment of prisoners, and the state anticipated a need to house more prisoners resulting from "get tough" policies on crime. Most significantly, the General Assembly abolished parole under then-Governor George Allen, and funded new prisons to house inmates longer until their full sentences were completed. Virginia even keeps prisoners at a private correctional institution, Lawrenceville Correctional Center.

The surge of prison capacity created more jail cells faster than Virginia judges created prisoners. The excess capacity in modern prisons was created in part by a lower-than-expected crime rate. Project Exile and other deterrents my have been effective, or perhaps the aging population was less inclined to commit crimes (or smarter about not getting caught...). The good economy in the "dot com" boom may have made it easier to earn money than to steal it, or perhaps Virginia failed to catch the first crooks that shifted to e-crime.
Other states, which had the opposite situation, contracted with Virginia to house their inmates. New Mexico, Connecticut, and the District of Columbia were the most visible in this rent-a-cell program. This generated revenue for Virginia, and met the needs of the states that had exceeded population capacity of their jails.
The "supermax" prisons are located in Southwest Virginia, where the local demographics are substantially different from urban areas. As a result, the diversity of the guard force does not match the racial petterns of the criminal population in the facility. Out-of-state legislators have nothing to lose by blaming Virginia's correctional officers whenever an inmate from their region is injured or dies in a Virginia jail, and even suggesting racial bias. (Connecticut had its prisoners moved to the Greensville Correctional Center in 2001, before returning them all to Connecticut in 2004.)
The warden at Wallens Ridge State Prison filed suit against New Haven, Connecticut newspapers after they portrayed him unfavorably in articles about treatment of the Connecticut prisoners. As described in a 2002 appeals court decision1
A District Court had ruled that "the defendants' Connecticut-based Internet activities constituted an act leading to an injury to the plaintiff in Virginia" because "the newspapers understood that their defamatory articles, which were available to Virginia residents on the Internet, would expose Young to public hatred, contempt, and ridicule in Virginia, where he lived and worked.... The defendants were all well aware of the fact that the plaintiff was employed as a warden within the Virginia correctional system and resided in Virginia," and "...any harm suffered by Young from the circulation of these articles on the Internet would primarily occur in Virginia."
However, the appeals court dismissed the suit, ruling that "newspapers do not have sufficient Internet contacts with Virginia to permit the district court to exercise specific jurisdiction over them."
In the Balanced Budget Act of 1997, Congress decided to close the D.C. Correctional Facility at Lorton, and the land was transferred to Fairfax County in 2002. The only two Federal prisons remaining in Virginia are in Lee County (Jonesville) and Petersburg.