Alternative Youth Adventures, Montrose, County, Colorado
January 22, 2009 Rocky Mountain News
The mother of a Salt Lake City boy has filed a lawsuit against a Colorado wilderness camp where her son died of a staph infection. The mother, Dawn Boyd Woodson, alleges her son's 2007 death could have been prevented if the staff of Alternative Youth Adventures had heeded medical warning signs. A company attorney says operators of the former camp in Montrose had a stellar reputation until 15-year-old Caleb Jensen's death. Attorney Colleen Scissors says a staph infection is not something that would have been obvious. She is defending West Caldwell, N.J.-based Community Education Centers Inc., AYA's former corporate parent, against criminal charges filed by the Montrose County district attorney over Jensen's death. A trial is set for March.

July 15, 2008 Daily Planet
More than a year has passed since Caleb Jensen died in the mountains near Montrose, in a wilderness camp for troubled kids. Languishing from an untreated staph infection, the 15- year-old collapsed on his sleeping bag one day and never got up. That was May 2007. Yesterday, a Montrose County grand jury indicted the camp, its corporate parent, two camp staffers and a Utah doctor on charges stemming from the boy’s death. They’re charged with manslaughter, criminally negligent homicide and child abuse and face up to 12 years in prison. Jensen’s mother, Dawn Woodson, said she’d been waiting for this news in one form or another every since she got a phone call telling her that her son was dead. “I’m glad to hear of it, and that these people have been indicted,” she said in a telephone interview. “But I still have a huge void and nothings ever going to fill it.” The Utah boy spent the last month of his life at Alternative Youth Adventures, a now-defunct youth camp outside Montrose. He was sent there in late March 2007 after getting into trouble and landing in the Utah Division of Juvenile Justice Services. The camp sought to rehabilitate troubled kids with a menu of long hikes, tough physical exercise, counseling and education. It was an offshoot of Community Education Centers, a New Jersey company that runs programs nationwide for adult prisoners and at-risk kids. But Jensen’s experience became a doomed nightmare. He was prone to staphylococcus infections and developed one after arriving at the camp, investigators said. He complained, and other campers complained on his behalf, but Jensen’s mother said those pleas fell dead to the ground as her son’s skin went gray, his fever spiked and he started hallucinating. Jensen was even isolated for insisting that he felt sick, his mother said. “They were saying he was acting out and lying, and he was being punished the entire time he was sick,” Woodson said. “He was all by himself the whole time. He was dying and he was by himself. He couldn’t talk to anyone the whole time he was sick.” On May 2, 2007, a month after he entered the camp, Jensen died. After the state suspended its license, Community Education Centers shut down the camp permanently in July 2007, “without admission of wrongdoing of any sort,” according to a letter it wrote to the Colorado Attorney General’s office. The case went nearly silent until yesterday’s indictments were announced. Alternative Youth Adventures and Community Education Centers were charged with child abuse resulting in death and criminally negligent homicide, according to the Montrose County district attorney. James Omer, the camp’s program director, and Dr. Keith Hooker, a Utah emergency doctor and wilderness program expert, were also charged with child abuse and criminally negligent homicide. Ben Askins, another camp staffer, was charged with manslaughter and child abuse. The three men could not be reached for comment Wednesday. A spokeswoman for the Utah hospital that employs Hooker said he remains in good standing on the medical staff, but she said the hospital would investigate the charges. Community Education Centers issued this statement: “CEC stands by its position that at all times the company acted appropriately and that the circumstances that lead to Caleb Jensen’s death, while tragic, were not reasonably foreseeable.” The indictments offered a rare moment of vindication for child-safety advocates. Isabelle Zehnder, who runs the Coalition Against Institutionalized Child Abuse, said that institutions and employees rarely face criminal charges after children die or suffer abuse in custody. The public agencies and private companies that provide care for troubled kids are often the last resort for parents, social services and judges. Their methods are often meant to be tough, and when things go wrong, agencies say they were simply acting in the name of treatment, Zehnder said. “You don’t know how many cases we have where everybody walks,” she said. “And then to have this — it’s amazing.” Jensen’s mother welcomed the indictments, but said the pain of her son’s death couldn’t be balmed by the justice system. Months pass, things get better, but then she’ll chance upon a children’s book Caleb once loved, and confront a wall of memories and hurt. “I still battle,” she said. “I don’t know how to tell myself, ‘You just have to understand that you’re not going to have Caleb back.’ I want him back so much, it hurts. It’s not easier or better. Somehow we find a way to get through every day.”

July 15, 2008 Montrose Daily Press
More than one year after Caleb Jensen died while under the care of Alternative Youth Adventures, the organization, its parent company and three people have been indicted. Jensen, 15, of Utah, had been placed into the outdoor wilderness therapy program for at-risk youths. He was on an outing in rural Montrose County last May when he developed a staph infection and died. The Colorado human services department said previously the infection produced observable symptoms, which the department accused AYA staff of neglecting. AYA’s parent company, Community Education Centers Inc., said Jensen’s death was tragic and the underlying cause was undetectable. On Tuesday, a Montrose grand jury handed down indictments alleging criminally negligent homicide, child abuse resulting in death, and manslaughter. According to a press release from the district attorney’s office, the indictments name AYA, CEC; Dr. Keith Hooker, and AYA employees James Omer and Ben Askins. The indictments have been sealed for now. “The grand jury was able to reach a decision they felt comfortable with,” District Attorney Myrl Serra said. “Those indictments have been sealed until the summons can go out and those charged have notice of what they’ve been charged with.” Community Education Centers Inc.; AYA; Hooker and Omer were all charged with the felony-3 offense of child abuse resulting in death and the felony-5 offense of criminally negligent homicide. Askins was charged with felony-3 child abuse resulting in death and manslaughter as a class-4 felony. Penalties upon conviction of the charges in the indictments range from one to 12 years in prison, with fines of up to $750,000. All indicted parties are due in court at 9 a.m. Aug. 25. “Community Education Centers stands by its position that at all times, the company acted appropriately and that the circumstances that led to Caleb Jensen’s death, while tragic, were not reasonably foreseeable,” Christopher Greeder, public relations manager for Community Education Centers, said in a written statement. Jensen’s family could not be reached for comment Tuesday. AYA and New Jersey-based Community Education Centers came under investigation by the Colorado Department of Health and Human Services, Colorado Attorney General’s office and the local Seventh Judicial District soon after Jensen’s death. The company consistently denied negligence. AYA’s licenses for residential and therapeutical childcare in Colorado were suspended within a week of Jensen’s death. Initially, Community Education Centers planned to contest suspension, but voluntarily surrendered its licenses last July, as a “business decision,” without admitting wrongdoing. The company at the time also said it’d decided before Jensen’s death to sell the Montrose facility.

May 11, 2007 Denver Post
State health authorities have shut down a wilderness youth camp in Montrose County after a 15-year-old Utah boy died there last week of an untreated staph infection. The Colorado Department of Health and Human Services suspended the license of Alternative Youth Adventures on Wednesday. The 26 at-risk youths in the program were moved from the remote camp in Montrose County to corrections or human service agencies in Grand Junction and Denver on Wednesday and Thursday. "We believe we have reasonable grounds to believe the camp presents a substantial danger to public health, safety and welfare," said Liz McDonough, a spokeswoman for the Department of Health and Human Services. McDonough said she did not know how Caleb Jensen contracted a methicillin- resistant staphylococcus aureus infection. She said he reported symptoms to the adult camp leaders. "We are at a loss to see how this was preventable. ... It was something the staff just could not tell was there," said Bill Palatucci, a spokesman for Community Education Centers Inc., the Roseland, N.J., company that operates the wilderness camp and five other rehabilitation-type programs in Colorado as well as programs in six other states. "From what we know, the staff acted appropriately, in line with their track record." The type of bacterial staph infection Jen- sen died from most commonly occurs in hospitals and usually affects the elderly and very ill or others with compromised immune systems. It most commonly develops in an open wound. In minor cases, the infection causes pimples or boils. In serious cases, the infection can lead to fever, pneumonia, toxic shock syndrome and death. Jensen died the afternoon of May 2 in a camp in a remote part of Montrose County just over the Mesa County line. Counselors reportedly tried to revive the boy, who had been at the camp for a month. He was placed in the program for two months by the Utah Division of Juvenile Services. A website for Community Education Centers describes the camp as incorporating "education, conservation practices, work projects in national forests, rigorous physical activity, substance abuse treatment and detailed aftercare planning." Dan Robinson, director of the Grand Mesa Youth Services program in Grand Junction, said his facility has used the camp for years and has not had problems with it. McDonough said her department had previous issues with youths who suffered frostbite at the camp. Last year, six youths walked away from Alternative Youth Adventure camps in Montrose and San Miguel counties. All were eventually located.

May 3, 2007 Rocky Mountain News
A 15-year-old Utah boy died during a backcountry outing with a youth program on the Uncompahgre Plateau of natural causes, authorities said today. The teenager, whose name was not immediately released, was part of Alternative Youth Adventures, a Montrose care facility that treats at- risk juveniles through education, counseling and work projects in national forests. Dr. Rob Kurtzman, chief deputy coroner in Mesa County, said he'll conduct further tests to determine the precise cause of death. "It's sudden and tragic," said Bill Palatucci, senior vice president of Community Education Centers, the parent company of Alternative Youth Adventures. "It may have been a previously undetected underlying medical condition." Palatucci said the boy had been referred to the AYA program by the Utah Division of Juvenile Justice Services. He declined to release the boy's name, citing federal privacy regulations. The boy died Wednesday afternoon. Authorities received a 911 call about 3 p.m. saying he was not breathing, but the boy was dead by the time rescue personnel reached the remote site southwest of Grand Junction near the Mesa-Montrose county line.

Bo Robinson Treatment Center, Trenton, New Jersey
January 21, 2010 The Star-Ledger
State authorities are conducting a sweeping search for contraband at the Bo Robinson Treatment Center today, and one union official said they're hunting for a firearm. The private facility, run by West Caldwell-based Community Education Centers, is located on an industrial road just off Route 1. With a capacity of up to 900 people, it houses state and county inmates as well as offenders under parole supervision. Jim McGonigal, president of the New Jersey Law Enforcement Supervisors Association, which represents sergeants, said authorities found cell phones, alcohol and drugs in the facility last night. Now, acting on a tip, he said they're looking for a weapon. "The Department of Corrections is reacting proactively," he said. "They're taking it very seriously." A convoy of white Department of Corrections vehicles pulled up shortly before 10:30 a.m. A line of officers, some with search dogs, entered the facility shortly after, while another two with rifles stayed outside. Christopher Greeder, spokesman for Community Education Centers, confirmed the search but did not say whether they're looking for a gun. "Out of an abundance of caution, we're searching the whole facility," he said. "The good news is, nothing major has turned up yet." Parole Board spokesman Neal Buccino said at least one cell phone was found on a parolee. He said county and state authorities responded to the facility today after receiving a tip early this morning. McGonigal said it's the second major sweep of the facility in the last few weeks. He said centers like Bo Robinson lack the safety standards of state prisons. "We have no problem putting nonviolent offenders there," he said. "But they're putting in violent offenders. It's a breeding ground for disaster." Greeder said inmates at Bo Robinson are kept separate based on whether they're from county or state jurisdictions. He added that the facility has been recommended for accreditation from the American Correctional Association in November with a 100 percent compliance rating.

Casper Re-Entry Center, Casper, Wyoming
October 19, 2007 Rocky Mountain News
A convicted murderer who fled a work-release program and was captured in Canada two weeks later has pleaded guilty to an escape charge. Shannon Parazoo, 44, faces up to a 10-year prison sentence. On Feb. 9, Parazoo and his stepson, Alonzo Durgin, walked away from the Casper Re-Entry Center, where both inmates were in a work-release program. Along with Parazoo's wife, two of her children and several pets, they traveled to Montana and then Canada, Parazoo said. The escape prompted a search that spanned the northwestern U.S. and Canada. Canadian police arrested the fugitives in British Columbia on Feb. 23.

February 13, 2007 KGWN TV
Authorities are on the lookout for a convicted murderer who walked away from a Casper halfway house last week. His name is Shannon Parazoo, and he's serving a 20- to 30-year sentence for second-degree murder back in 1985. He's also got a conviction for an escape attempt in 1986. Authorities say he checked out of the Casper Re-entry Center on Friday, but didn't report to work that night. They realized he was missing Saturday morning. Also missing is Parazoo's son, Alonzo Durgin, who was at the center for aggravated assault and aggravated robbery. Durgin left Friday night on a pass to spend time with his mother, but never returned. Law enforcement agencies were notified Saturday, but did not notify the public until yesterday. Bill Palatucci is the spokesman for New Jersey-based Community Education Centers Incorporated, which runs the center. He says it appears the staff at the facility followed all the proper policies and procedures.

October 5, 2005 Casper Star-Tribune
A 48-year-old man who was on the run for 21 years after escaping from prison in 1978 has gone missing again, according to a Natrona County Sheriff's Office report. Thomas Lee Russell was serving a 45-day sentence at the Casper Re-Entry Center when he apparently left the facility early Monday morning, according to Melinda Brazzale, spokeswoman for the Wyoming Department of Corrections. He was due to return to parole status Oct. 10 -- a status he first enjoyed two years ago when his prison sentence on three burglary charges from the 1970s was commuted. It is not clear how Russell left CRC, which is operated by a private corrections company out of New Jersey. He was reportedly present at one head count at the facility and then later noticed missing, according to Sgt. Mark Sellers of the sheriff's office.

Cheyenne Mountain Re-Entry Center, Colorado Springs, Colorado
January 11, 2010 Westworld
Sherman Schuett followed the rules at CMRC -- and ended up in the hole for his own protection. If you're Sherman Schuett, the answer to the question posed by the headline above, at least for lawsuit-filing purposes, is in excess of $100,000. The 61-year-old state inmate and his Evergreen attorney, Ron Beeks, are suing the operators of a controversial private prison in Colorado Springs that's supposed to help prepare prisoners for the difficult journey back to society. The Cheyenne Mountain Re-Entry Center encourages its clients to take responsibility for their actions and confront misbehavior by others. That's what Schuett thought he was doing in 2008 when he reported another resident for punching holes in the wal l-- an act that might be considered snitching in a more traditional correctional facility. An employee left Schuett's report where the other prisoner could see it, and Schuett was attacked in a unit that he claims lacked any supervision. He suffered various facial injuries, including a contact smashed in one eye, and spent three months in segregation after the attack for his own protection. Schuett's saga is one of several complaints about beatings, inappropriate relationships between staff and prisoners, smuggling, and other problems at CMRC that were explored in our 2008 feature "Con School." Now working in Denver and awaiting his next parole hearing, Schuett says one of his goals in filing suit was to prod the prison's operator, Community Education Centers, into improving its management of the facility.

Columbiana County Jail, Leetonia, Ohio
November 17, 2011 Salem News
A former employee of Civigenics, the company which provides prison management at the Columbiana County Jail filed a wrongful termination suit Tuesday in Columbiana County Common Pleas Court. Stephen Crea, East Liverpool, claims age discrimination was behind the company releasing him on May 19. He was 60 years old when he was let go and the person who replaced him was under 40. Warden Gary Grimm reportedly told him "it is better that we part ways now" and let him go without further explanation, according to court documents. Besides lost wages and benefits, the court documents also allege Crea's civil rights were violated. He is seeking in excess of $25,000 in damages.

December 10, 2010 The Review
A former Columbiana County Jail inmate won $262,850 in damages from a fellow inmate he said assaulted him for refusing to bring in contraband after returning from work release. Jeffrey Woodburn, of Lisbon, formerly of Wellsville, won a default judgment against Aaron Holt of East Liverpool in October after Judge C. Ashley Pike of Common Pleas Court found Holt liable for damages. Last month a hearing was held to determine the amount of damages, with a judgment entry signed this week to outline the breakdown. According to the entry, Woodburn was awarded $12,850 for compensatory damages, $100,000 in monetary damages for pain and suffering and $150,000 in punitive damages for a total of $262,850. Court costs accrued after other defendants were dismissed were taxed to Holt . The entry also prohibited Holt from trying to discharge the judgment in a bankruptcy proceeding. Woodburn filed the complaint in July 2009 over a July 23, 2008 incident inside the jail when some fellow inmates assaulted him because he said he refused to bring them cigarettes and drugs when he returned from work release. He had been in jail for domestic violence, but had work release privileges, meaning he could leave the jail to go to work and then come back. According to the lawsuit, Woodburn had reported the threats made against him to jail personnel who placed him in protective custody in his own cell in a separate section of the lockup. The document said security measures were breached when Holt, and a few other inmates were able to enter his cell and beat him, resulting in injuries and hospitalization. An assault charge was filed against Holt but was later dismissed. Apparently he was unavailable because the jail permitted him to be transported out of the county, according to court entries. There were no charges filed against the other two known inmates, David Crow of Wellsville and Derrick Howard of Youngstown. The lawsuit had been filed against Holt, Crow and Howard, along with the company operating the jail, Community Education Centers Inc., part of CiviGenics Texas, and the Columbiana County Commissioners. The claims against everyone except for Holt had been dropped.

December 3, 2010 Vindicator
A charge of domestic violence has been dismissed against a man who was injured when he jumped from a second story Columbiana County jail-cell block Nov. 16. Ronald E. Davie, 28, of Calcutta Smith Road, East Liverpool, suffered serious head injuries. The jail is run by a private company, CiviGenics Inc. of Milford, Mass. Columbiana County Prosecutor Robert Herron said that Sheriff Ray Stone suggested that the charge should be dropped to save the county money. Davie was taken to St. Elizabeth Health Center in Youngstown. The county would have to pay a deputy to watch Davie in the hospital. Herron said the county had initially made arrangements with security officials at the hospital to monitor Davie. Herron said he did not know who would care for Davie. Davie’s father, William Davie of St. Clair Township, said, “They just threw him to the wolves. ... I don’t know what is going to happen.”

October 13, 2010 Vindicator
The Columbiana County sheriff’s office is investigating the death of Amy Fortune, 35, of Main Street, Minerva, found dead Saturday morning in her Columbiana County jail cell. Sheriff Ray Stone said she was serving three days for driving while under a license suspension. Stone said that she was then going to be transferred to the Tuscarawas County jail on a charge of assault on a corrections officer. Peter Argeropulos, the chief operating officer for CiviGenics Inc., of Milford, Mass., the private company that runs the county jail, said that Fortune was in a cell with another woman. The second woman left the cell to help prepare breakfast for the other inmates about 5:30 a.m. An officer making rounds in the jail found Fortune on the floor of the cell. CPR was administered, and she was taken to Salem Community Hospital, where she was pronounced dead. An autopsy was performed at the Cuyahoga County coroner’s office, but Columbiana County Coroner Dr. William Graham has not issued a ruling.

August 11, 2010 The Review
A lawsuit filed against the private operator of the Columbiana County Jail and the county commissioners has been dismissed, but remains against inmates who assaulted another inmate. Jeffrey Woodburn of Lisbon, formerly of Wellsville, filed the complaint in July 2009 over a July 2008 attack which occurred after he refused to bring tobacco and drugs to the other inmates when he returned to the lockup from work release. A recent judgment entry said the complaint was settled and dismissed against Community Education Centers Inc. and CiviGenics Texas, along with the county board of commissioners, only, at the defendant's costs. The entry didn't note the terms of the settlement. The case apparently remains against the inmates who were named as defendants in the lawsuit, including Aaron Holt of East Liverpool, David Crow of Wellsville and Derrick Howard of Youngstown. The claims against the jail operator and commissioners included alleged negligence and a security breach which Woodburn alleged led to the attack. The lawsuit said Woodburn reported the threats to jail personnel who placed him in protective custody in his own cell in a separate section of the jail. The document said security measures were breached on July 23, 2008 when Holt, Crow, Howard and possibly a fourth inmate were able to enter Woodburn's cell and beat him, requiring hospitalization.

July 22, 2010 The Salem News
A Lisbon woman fired from her job as a corrections officer at the Columbiana County Jail filed a lawsuit Wednesday to challenge the action as discriminatory based on her gender, her age and her religion. Janet Logan, state Route 164, named four defendants in her complaint, including the private company operating the jail, CiviGenics Texas Inc., doing business as Community Education Centers Inc. Other defendants include supervisor Peter Neiheisel, a lieutenant and chief of operations for the jail, assistant jail warden Jay Nolte and jail warden Gary Grimm. Logan started working for CiviGenics as a corrections officer on April 28, 1998. On Jan. 21 of this year, she was suspended from her job for three days for allegedly fighting with a corrections officer, then she was told on Jan. 25 that she was terminated. In the lawsuit, Logan contended that she was wrongfully suspended and terminated for alleged "unsatisfactory work performance" based on allegations that she fought with another corrections officer and discussed staff with inmates. She claimed the allegations weren't true. Her contention was that she was discriminated against because she was a woman, because she was 50 years old and because of her religious belief that she not work on Sundays. She claimed she was replaced by a male corrections officer and since 2001 was continuously passed over for promotions. In late 2009, she said she was reduced to one or two days a week while male officers continued to work their schedules without a reduction. She also claimed males were treated more favorably, females were hired in less numbers than males and a statement was made that "females do not belong in this workplace." As for her religious beliefs, she said she told the previous warden and assistant warden about her practice and was told she would be scheduled on Monday through Thursday and be put in a full-time position when a slot became available. She wasn't scheduled to work Sundays. When Nolte and Grimm came into place, she told them about her religious beliefs and did not work Sundays. When she relayed to them that she wanted to become full-time, they said she couldn't become full-time or be promoted because she wouldn't work on Sundays. She said others with similar religious beliefs have been promoted and not scheduled to work on Sundays. She also said her age played into her reduced schedule and the alleged attempt to get her to quit. Logan claimed Neiheisel, Nolte and Grimm violated her civil rights by their actions, alleging they used false information against her. She's requesting damages in excess of $25,000. A call for comment was placed to a CiviGenics official, Peter Argeropulous, but wasn't returned Wednesday afternoon.

July 23, 2009 Morning Journal News
A former jail inmate assaulted by fellow inmates at the Columbiana County jail one year ago today filed a promised lawsuit, claiming negligence and a security breach led to the attack. Jeffrey Woodburn of Wellsville named the private jail operator known as Community Education Centers Inc. and CiviGenics Texas, along with the county board of commissioners, the named inmates Aaron Holt of East Liverpool, David Crow of Wellsville and Derrick Howard of Youngstown and an unnamed inmate as defendants. The case appears to be another byproduct of inmates trying to persuade others to smuggle drugs and tobacco into the lockup, with the lawsuit alleging Woodburn was "threatened by other inmates after he refused to bring them tobacco and drugs upon his return to the jail from work release." Three jailers were charged with bringing drugs onto the grounds of the jail facility, with two imprisoned and one found innocent of the felony charge. During testimony, he said the inmates kept asking him to bring items in to them, and others testified about inmates using cell phones to place orders for drugs. According to the lawsuit, Woodburn reported the threats against him to jail personnel who placed him in protective custody in his own cell in a separate section of the jail. The document said security measures were breached on July 23, 2008, when Holt, Crow, Howard and possibly a fourth inmate were able to enter Woodburn's cell and beat him, requiring hospitalization. CiviGenics reported the incident to the Sheriff's Office at 9:58 a.m. July 25, according to a Sheriff's Office report, which noted the incident occurred at 8:55 p.m. July 23. The report said "an unknown inmate hit the emergency button on the control panel in pod 30 section of the jail," which released the doors of all the cells for evacuation. The three named inmates entered Woodburn's cell and allegedly kicked and punched him in the face and chest, the report said. The report listed no arrests for the assault. According to Columbiana County Municipal Court records, no charges were filed against Crow or Howard, but an assault charge was filed against Holt on July 29. However, it was later dismissed in September due to the unavailability of the defendant. The entry on the Clerk of Courts Web site said the jail let the defendant be transported out of the county. CiviGenics, which operates Community Education Centers Inc., is under contract with the county commissioners to operate the jail, a deal the commissioners first brokered in 1997 as a cost-saving measure. The contract expires in December. Woodburn, who was in jail for domestic violence, was released early as a result of the assault. His attorney, Lawrence Stacey II, first raised the issue of a negligence lawsuit last August when he filed motions for the release of Woodburn and two other inmates due to threats from inmates who wanted them to smuggle contraband into the facility. All three had work release privileges, which meant they could leave the jail to go to work and then come back. Woodburn requested damages in excess of $25,000, with Judge C. Ashley Pike assigned to the case. Commissioner Jim Hoppel, when questioned about the lawsuit, said they were advised of the incident when it happened last year. "The situation has been addressed," he said when asked about the alleged security breach. "With the contract we have with CiviGenics, we're held harmless with any lawsuits," he said, adding, though, they'll refer it to the prosecutor's office. Peter Argeropulos, CiviGenics senior vice president, confirmed what Hoppel said about the hold harmless clause, saying the county is insulated against anything that may occur at the jail. He said they hadn't been served with the lawsuit, but said they'll refer the case to their attorney and take appropriate steps. When asked about the situation with the drug smuggling into the jail, he said they work closely with the Sheriff's Office and the county Drug Task Force. "Overall I think we've got a pretty solid track record. We have good employees at the jail," he said.

Community Education Centers, Roseland, New Jersey
Essex County immigrant detention center a house of controversy: Chris Megerian, The Star-Ledger. Despite the barbed wire snaking across the top of its perimeter fence, Delaney Hall is not a traditional lock-up.
Texas prison boom going bust: by Mitch Mitchell, September 3, 2011, Star-Telegram. Expose on troubles facing many communities that bought into the private prison bonding scam.

December 21, 2011 The Star-Ledger
Immigrant advocates released a report Tuesday detailing what they describe as campaign contributions and hidden political ties behind the nonprofit group that subcontracts services for Delaney Hall, a private detention facility in Newark. The 19-page report comes almost a week after the Essex County freeholders awarded a lucrative immigrant-detention contract to the group, Education and Health Centers of America. Immigration advocates include in the report what they describe as "crony connections and a system of elected and un-elected political bosses in Essex County which limit transparency and oversight" surrounding the detention center. The report says Education and Health Centers and the for-profit Community Education Centers have been "skirting" pay-to-play laws and campaign-disclosure requirements through a "shell game." Education and Health Centers subcontracts private correctional services to Community Education Centers. Officials, however, criticized the report. Essex County Executive Joseph DiVincenzo issued a statement calling the county’s immigrant-detention contract a "creative revenue generator with the potential to create $250 million over five years." He added the report was an attempt to "discredit" the county’s contract with the federal Immigration and Customs Enforcement. Education and Health Centers spokesman Eric Shuffler said the report was "put out by groups with their own political agenda and it’s filled with mistakes, contradictions and unsubstantiated innuendo." He declined to go into detail about specific inaccuracies. The report lists more than $150,000 in campaign contributions to Essex County politicians by Community Education Centers and its CEO, John Clancy, a former county youth-services official who has donated to both state and county politicians. Clancy also heads Education and Health Centers but the two groups are legally separate entities, according to officials of both groups. Two groups authored the report — the New Jersey Advocates For Immigrant Detainees, and Enlace, a West Coast agency composed of community groups and unions that oppose for-profit correctional facilities. The former group is a broad-based coalition of 20 community, faith-based and advocacy agencies. According to the report, DiVincenzo received donations from Community Education Centers for years, beginning in 1999 with an $1,800 donation from Community Corrections Corp., the group’s former name. Since then, Community Education Centers and Clancy have donated to DiVincenzo, the Essex County Democratic Committee and at least three freeholders, among other elected officials, the report said. On Dec. 14, county freeholders gave Education and Health Centers a multimillion-dollar contract to house up to 450 immigrant detainees in Delaney Hall, a correctional facility on Doremus Avenue in Newark that is run by Community Education Centers. Immigrant advocate Karina Wilkinson said the contract "violates the spirit of pay-to-play." At the county level, the laws regulating pay-to-play only apply to no-bid contracts. Last week’s contract was open to bids, but only Education and Health Centers was the sole bidder. Tuesday's report cited similar concerns the state comptroller’s office raised about Education and Health Centers in June. The comptroller recommended the state Attorney General’s Office review the arrangement. The Attorney General’s Office did not return a call for comment Tuesday. Since 1994, Education and Health Centers and Community Education Centers have had an arrangement with the state that allows the nonprofit entity to subcontract nearly all its work to the for-profit one. Under state law, only nonprofit groups can be awarded contracts for private correctional services. The two companies’ arrangement with the state was in place years before the 2004 pay-to-play laws were enacted, said William Palatucci, senior vice president and general counsel for public affairs at Community Education Centers. Palatucci is also a close friend of Gov. Chris Christie’s. "Nobody could anticipate trying to skirt anything," Palatucci said.

October 11, 2011 The Star-Ledger
Essex County is preparing to rebid a contract for a deal with the federal government worth roughly a quarter-billion dollars to Essex County to house immigration detainees after it tossed out the previous sole bidder, a politically connected company. The first bidding process was ended after a letter from U.S. Sen. Frank Lautenberg (D-N.J.) questioned the fairness of the process. In July, Lautenberg wrote to Immigration and Customs Enforcement Director John Morton citing concerns the county’s bidding process "may not be entirely fair, open and transparent." The letter came after the sole applicant, Education and Health Centers of America, landed the job. In a responding letter, obtained Monday by The Star-Ledger, ICE officials said they received assurance from Essex the bidding process to find a vendor for the lucrative contract to house detainees in the county was "conducted in a fair and reasonable manner." However, the federal agency also notes "ICE does not have the authority to review or enforce procurement laws or regulations at the state and local level," states the Aug. 4 letter. The county later threw out the controversial bid to house detainees in Delaney Hall in Newark and is now expected to advertise an overhauled proposal. The contract is expected to be worth $50 million annually for five years. This second round could differ significantly because Essex will be simultaneously seeking vendors to house two different groups: ICE detainees awaiting hearings or deportation, and county inmates receiving drug and alcohol treatment. A county spokesman said the new bid is being finalized and declined to say when exactly it would be open to bidders. Essex County Executive Joseph N. DiVincenzo Jr. said during a freeholder meeting last week the county is "ready to go out to bid very shortly." Top officials at both the nonprofit EHCA and Community Education Centers, the for-profit company it contracts with, have made campaign contributions to DiVincenzo or are close allies of Gov. Chris Christie.

July 27, 2011 New York Times
Three weeks ago, Essex County, N.J., announced that it was seeking a company to run a 450-bed immigrant detention center, hoping to take advantage of a federally financed initiative to set up such facilities with better supervision and medical care. The county said the contracting process was open to any company. But behind the scenes, it appears that officials have a clear favorite: Community Education Centers, which has a checkered record in immigrant detention but counts one of Gov. Chris Christie’s closest confidants as a senior vice president. The company’s executives are also political backers of the county executive, Joseph N. DiVincenzo Jr., a prominent ally of Mr. Christie. The county’s bidding rules specified that visitors to the detention center greet detainees “in the gymnasium” — a requirement that seemed to point to an existing facility, Delaney Hall in Newark, operated by Community Education Centers. Bidders were given 23 days to submit applications, an unusually short deadline for a multimillion-dollar contract. Community Education Centers itself seemed to act as if its selection were a done deal. The deadline for bids is Thursday, but the company posted advertisements on its Web site weeks ago to fill five jobs working with immigrant detainees at the facility. And this week, federal immigration officials and Community Education staff members gave tours of Delaney Hall to advocates for immigrants, telling them that it would probably be the new facility. The advocates were not shown other sites. Questioned about the selection process, Essex officials said the bidding was fair and open to any company. A spokesman for Mr. Christie said the governor’s office had no involvement in the contract. Federal and local officials have not indicated the size of the contract for the winning bidder, but it appears the total could amount to $8 million to $10 million annually. Government at all levels has pushed to privatize prisons and detention centers in recent decades, trying to save money and improve services. The federal government, which has been apprehending a growing number of immigrants, plans to use private companies to help overhaul a detention system that includes a patchwork of facilities. But privatized prisons and detention centers have at times became ensnared in scandals over mistreatment of their charges. In fact, Community Education Centers, based in West Caldwell, N.J., was seriously penalized in 2008 under an earlier contract to house immigrants at Delaney Hall. After an immigrant escaped, officials responded by removing the remaining 120 detainees from the company’s supervision and placing them in a public jail. Immigrant detention centers typically house immigrants, both legal and illegal, who are facing deportation because of visa violations or criminal convictions. With a shortage of beds in the Northeast, the federal Immigration and Customs Enforcement agency announced plans last year to house hundreds of detainees in Essex County. Officials said the detainees would have better access to lawyers and consulates, enabling the authorities to curb the transfer of detainees to distant places like Texas. Community Education’s senior vice president is William J. Palatucci, Mr. Christie’s political mentor and former law partner, and one of the state’s well-known Republican strategists. Mr. Palatucci was a major fund-raiser for George W. Bush’s 2000 presidential campaign, and recommended to the Bush administration that it nominate Mr. Christie for United States attorney for New Jersey, a job he held from 2002 to 2009. Community Education and its executives are major supporters of Mr. DiVincenzo, one of the most powerful politicians in North Jersey. Community Education employees, including senior executives and several of their family members, have donated a total of $30,600 to Mr. DiVincenzo’s campaigns since 2006, according to disclosure records. Mr. DiVincenzo, the county executive since 2002, is also influential in Trenton. Though he is a Democrat, he has developed a close relationship with Mr. Christie, a Republican, who swore him in for his third term. Mr. DiVincenzo has said he agrees with 95 percent of what the governor is doing, and has broken ranks with his party to support Mr. Christie’s efforts to curb the pay and benefits of public employees. Mr. Christie’s press secretary, Michael Drewniak, said, “There is no basis whatsoever to bring the governor into this and doing so sounds like a total stretch.” Essex County’s counsel, James R. Paganelli, said neither Community Education nor any other company had the inside track for the contract. “We have a public bid looking for anybody who thinks they can provide these services,” Mr. Paganelli said. “I hope that this bid is as competitive as we can make it.” Mr. Paganelli said he expected as many as 30 companies to express interest, and he declined to speak about any bidder in particular. A Community Education spokesman, Christopher Greeder, said any claim that the company had “received favored status from Essex County is unfounded.” Mr. Greeder said Delaney Hall was fully accredited and had housed more than 80,000 individuals since its opening in 2000. Asked why the company had advertised for jobs at the detention center before it knew whether it had won the contract, he said: “As a private company, we often advertise for positions in advance of any contract award. We want to be prepared.” He added that there was no connection between campaign contributions given by company executives and government contracts. For their part, federal officials said they were already making plans to send immigrants to Delaney Hall because Essex specifically mentioned it in its proposal to the federal government. They were not aware that the county was considering other facilities, said Gillian M. Christensen, a spokeswoman for the immigration agency. Immigrant advocates called the contracting process severely flawed. Amy Gottlieb, director of the Immigrant Rights Program at the American Friends Service Committee, said, “The idea that a company can advertise a job before they have the contract is offensive, because the stakes are so high.” Although the details are still being made final, Immigration and Customs Enforcement plans to assign 800 immigrants to the Essex jail, which currently holds about 500, and plans to place an additional 450 detainees in Delaney Hall, which is nearby, Ms. Christensen said. To solicit bids, Essex County advertised in The Star-Ledger of Newark and posted the requirements on a county Web site, following standard procedure, according to Mr. Paganelli, the county counsel. He said county officials did not actively solicit companies to bid. By comparison, the New York State Office of General Services said that when the state issued contracts for specialized services, it advertised in multiple publications, posted the requirements online and contacted competing firms that perform similar services.

June 16, 2011 NJ 101.5
State Comptroller Matt Boxer is questioning the State Department of Corrections (DOC) about the state's largest halfway house provider, Education and Health Centers of America, Inc. (EHCA), because of its subcontracting arrangement with a for-profit company, Community Education Centers, Inc. (CEC). Under state law, only non-profits can provide halfway house services. Boxer says EHCA pays CEC the entire contracted per diem rates. Of $400 million the state has paid EHCA since 1997, EHCA has paid CEC approximately $390 million to provide "all the services" under EHCA's public contracts, including the "operation, support services management and maintenance" of the facilities. "One of the issues that we found is that there are questions about the eligibility of one of those halfway houses to be a part of this program," explains Boxer. "We sent a letter to the Department of Corrections suggesting that on this issue they seek formal legal advice from the (State) Attorney General's Office and they've agreed to do that." Bill Palatucci is one of Governor Chris Christie's closest allies. He's a senior vice president and general counsel for public affairs at CEC and the director of development at EHCA. He says CEC has had no new contracts since 1998. "We're still operating under the same agreement that was approved by Attorney General back then, so we're a bit puzzled by the report," says Palatucci. "We'll take a look and talk to the Department of Corrections about it."

August 11, 2010 The Review
A lawsuit filed against the private operator of the Columbiana County Jail and the county commissioners has been dismissed, but remains against inmates who assaulted another inmate. Jeffrey Woodburn of Lisbon, formerly of Wellsville, filed the complaint in July 2009 over a July 2008 attack which occurred after he refused to bring tobacco and drugs to the other inmates when he returned to the lockup from work release. A recent judgment entry said the complaint was settled and dismissed against Community Education Centers Inc. and CiviGenics Texas, along with the county board of commissioners, only, at the defendant's costs. The entry didn't note the terms of the settlement. The case apparently remains against the inmates who were named as defendants in the lawsuit, including Aaron Holt of East Liverpool, David Crow of Wellsville and Derrick Howard of Youngstown. The claims against the jail operator and commissioners included alleged negligence and a security breach which Woodburn alleged led to the attack. The lawsuit said Woodburn reported the threats to jail personnel who placed him in protective custody in his own cell in a separate section of the jail. The document said security measures were breached on July 23, 2008 when Holt, Crow, Howard and possibly a fourth inmate were able to enter Woodburn's cell and beat him, requiring hospitalization.

July 8, 2010 The Star-Ledger
In a move certain to only increase speculation about Gov. Chris Christie’s political future beyond New Jersey, the Republican State Committee tonight elected Bill Palatucci, a close Christie friend, advisor and former law partner, as the state’s new male representative on the Republican National Committee. Palatucci, 52, replaces David Norcross, a former Republican State Committee chairman and 1976 U.S. Senate candidate who was elected committeeman in 1992. “I think in a small way I can just be the eyes and ears, not only for (Christie) but for the state party. Secondly, it’s nice to be able to be proud for New Jersey again and help export the ideas that are proving so successful right now in New Jersey down to the national scene,” said Palatucci. Palatucci denied speculation that Norcross, whose term does not end until 2012, was pressured to resign by Christie to make way for a close ally. “I think that’s unfair to David. David has been very clear that he was in his last term and he was always looking for the right time to step aside,” he said. Twenty-three of the state’s 42 Republican committee members showed up at the meeting at the Princeton Hyatt to vote for Palatucci by affirmation. Nobody else ran for the position and Norcross did not attend the meeting. Amanda Brown/The Star-LedgerDavid Norcross, in this 2004 file photo. Palatucci is senior vice president and general counsel for Community Education Centers in West Caldwell, which operates halfway houses for the reintegration of former prison inmates.

June 21, 2010 The Daily Journal
A close friend, political contributor and adviser to Gov. Chris Christie is a top-ranking employee of Community Education Centers Inc., the largest company providing the state with treatment centers for former inmates. Christie has said the state is in dire financial straits and has made massive cuts in his proposed fiscal 2011 budget, but funding for the treatment centers -- traditionally known as halfway houses -- is set to increase $3.1 million. It's one of the rare programs to receive additional funding under Christie. The final treatment center budget under the state Department of Corrections will be $64.6 million, if the Legislature approves the budget. Deborah Howlett, executive director of New Jersey Policy Perspective and a former official in Gov. Jon S. Corzine's administration, said, "I've heard Gov. Christie say many times not to take a cup of coffee from someone. With other social services programs being cut to the bone, a program that could benefit a friend is increased. Why?" *Longtime Christie adviser William J. Palatucci, a senior vice president and general counsel for Community Education Centers in West Caldwell, told Gannett New Jersey he's "deregistered as a lobbyist" and "will not lobby in New Jersey on behalf of CEC."* *Palatucci's relationship with Christie goes back at least to the 1990s. Palatucci helped run Christie's gubernatorial campaign last year and was co-chair of the governor's inaugural committee. Palatucci personally has contributed $26,650 to the GOP since 1985.* CEC has contributed a total of$372,350 to both parties during that time, mostly to Democrats, and its chairman, John J. Clancy, has contributed $138,525, mostly to Democrats. Michael Drewniak, press secretary for the governor, said: "Bill Palatucci has been involved with Mr. Clancy's company for a very long time. Mr. Clancy's bids will be judged on their merits, and that's the only consideration that is involved. Any suggestion of outside influence is not based on the facts." According to Corrections Commissioner Gary M. Lanigan, his department currently contracts for a total of 3,029 beds in residential treatment programs. During the course of a typical year, anywhere from8,500 to8,800 inmates go through treatment facilities as a way to help them re-enter society, according to the DOC. Lanigan said Friday that legislation passed last year mandated the Department of Corrections must maintain 100 percent occupancy in the beds under contract. Previously, 95 percent occupancy was required. That change in the law accounts for the proposed $3.1 million budget increase, he said. The state is in the process of awarding new contracts for the treatment programs. The final decision, expected June 30, will be made by Lanigan, following a review both by an evaluation committee and state budget officials who examine the finances of each company submitting bids, DOC spokesman Matt Schuman said. Eight vendors currently have contracts with the DOC. CEC's relationship with the state is complex. CEC, a for-profit company, "does not hold any state contracts," company spokesman Christopher Greeder said. But CEC provides services for a nonprofit, Wall-based company called Education and Health Centers of America. "They hold the contracts," Greeder said. Palatucci was listed as a paid director of development for Education and Health Centers, while Clancy, the CEO and chairman of CEC, was listed as the paid president, according to the nonprofit's 2009 IRS tax report. Under pay-to-play laws, a for-profit business receiving $50,000 or more through agreements or contracts with New Jersey public entities is required to file annual disclosures of its contributions with the election commission, according to the Department of Treasury. Pay-to-play disclosure laws were passed in recent years to prevent undue influence, or the appearance of undue influence, by political contributors in the state's multibillion-dollar contracting process. However, because the nonprofit Education and Health Centers is awarded the contracts with the state, the for-profit CEC -- which provides the bulk of services for the Education and Health Centers contracts -- is not required to file pay-to-play disclosures with the commission. Nonprofits, and any political contributions by its officers, were made exempt from the 2005 pay-to-play reporting laws in 2008. Palatucci said he spoke with Christie after he was elected and told him he would no longer lobby on behalf of CEC in New Jersey. "The governor accepted this," he said. Lanigan said Palatucci's relationship with the governor "no way impacts the process. My job is to keep up a firewall, to make sure the process has not been tainted." In the current contract Education and Health Centers has with the Department of Corrections, CEC provides 1,687 beds -- 1,226 in assessment centers and 461 in treatment programs, Lanigan said. Most of CEC's New Jersey beds are in Newark and Trenton. The rate charged the department is $62 per inmate per day in a treatment program and between $70 and $75 in an assessment center, he added. An assessment center is a facility an offender goes to after being released from prison. That inmate then will be placed in a treatment center for substance, behavioral or other problems. The department spent $61.5 million this budget year and plans to spend $64.6 million in the next fiscal year, which starts July 1, according to the state budget. Joseph Marbach, dean of the College of Arts & Sciences at Seton Hall University, says the state owes the public more of an explanation. "Why is this portion of the budget going up when so many things are being slashed?" Marbach said. "What's the underlying reason? Anything that might benefit Mr. Christie's friend, Mr. Palatucci? Somebody's going to benefit from government, one way or another. The governor has been very vocal in criticizing these kinds of relationships. For consistency's sake, you'd think Mr. Palatucci would take a leave of absence or recuse himself while Mr. Christie is in office." Palatucci said he is "an advocate for alternatives to incarceration, and none of that requires me to lobby for CEC. ... I told the governor in January, 'I'm not going to talk to you about my company.'"

April 23, 2010 Waco Tribune-Herald
The new jail on State Highway 6 has an impressively low detention population: zero. The 816-bed Jack Harwell Detention Center officially was completed in February. But Community Education Centers, the New Jersey-based detention company under contract to manage and operate the jail, has been unable to secure agreements with state and federal agencies to house inmates. Meanwhile, CEC must begin repaying the $49 million in project revenue bonds that financed the construction of the jail. The $313,000 monthly debt service is to be paid using revenue from housing inmates, placing the company under a crunch to fill beds. While funds already have been set aside for the first payment of $1.9 million due in June, CEC must begin making revenue soon or risk defaulting on the bonds. Doing so would mean the county loses the new jail. CEC wants some relief from the county to cover the financial obligation, but some commissioners say getting involved could end up costing taxpayers. County Judge Jim Lewis, Commissioner Ray Meadows and former Commissioner Wendall Crunk voted for the construction of the new jail. Commissioners Lester Gibson and Joe Mashek voted against it. Fewer inmates -- Feasibility studies conducted in 2008 showed the county would need 1,296 beds by the end of this year, slightly above the combined 1,260 capacity between the McLennan County Jail and the downtown jail. While the county faced severe overcrowding in 2008, there were only 860 inmates in the county jail Thursday afternoon, with 20 inmates at the CEC-run downtown jail. Peter Argeropulos, CEC senior vice president, reported the dilemma to the McLennan County Commissioners Court on Thursday. CEC began reaching out to agencies in the fall only to find that few prison facilities were housing inmates outside their facilities. Immigration and Customs Enforcement, for example, scrapped plans for a new fugitive apprehension unit in Waco. The Texas Department of Criminal Justice began pulling its inmates from private detention centers in August. “What we expected and what the studies had indicated have not materialized at this point,” Argeropulos said. Solutions debated -- One option Argeropulos suggested was to close down the 329-bed downtown jail and transfer the staff and inmates to the Jack Harwell Detention Center. The move would help CEC pay debt service but also cause the county to lose as much as $400,000 from the operation of the downtown jail. “Your plan’s not working, and it’s not working because you can’t get the prisoners, so you’re coming to the court wanting concessions that are going to cost the taxpayers money,” Commissioner Kelly Snell said. “That’s where I have a problem.” CEC Warden Mike Wilson, who oversees the downtown jail and would head the new jail, said moving the inmates would help address safety concerns at the facility. “All of a sudden, once you get a new car, that old car you got isn’t worth driving anymore, that’s the bottom line,” Snell said. Argeropulos also asked the court to temporarily waive an administrative fee of $2 per inmate per day CEC is to pay to the county until revenue exceeds operation costs. “I don’t see why the county has to be asked to bend over and do all the compromise,” Gibson said. “I think that some of the burden should be upon your side to do what you can to ease the burden.” Another option Argeropulos raised is to sign an interlocal agreement with Harris County, which is battling serious overcrowding issues. Harris County has transferred about 650 inmates to Newton County, with another 450 housed in Bowie County and 200 in Louisiana. CEC had a six-month agreement to house 320 Harris County inmates that expired in February. But CEC did not get any inmates during that period. Argeropulos said Harris County was willing to pay only $45 per person per day to house inmates at the Jack Harwell Detention Center, lower than the $54.50 rate CEC originally expected. “Right now, it’s a buyers’ market,” Argeropulos said. “As beds become vacant, people can become a little more picky in terms of who they want to negotiate with and what’s the best rate they can get.” Argeropulos said CEC intends to apply for a bid to house federal inmates. The Federal Bureau of Prisons is expecting to need up to 3,000 beds later this year, a proposal that may likely net higher housing revenue, he said. “It’s not a new revelation, it’s been in newspapers nationwide that facilities are lacking prisoners,” Lewis said. “It’s not an ideal situation, but anybody who’s been in this business knows that there’s ups and downs on it. . . . The population will go up not only here but nationwide. The industry just keeps on growing.” Long-term outlook -- Still, Argeropulos said CEC would not open the jail until it had secured enough inmates to sufficiently cover the debt service and operational costs. The bond package includes a $4 million reserve fund that will cover about a year of payments. However, that fund can only be accessed if there are no inmates in the facility, Argeropulos said. CEC exercised an escape clause last month to pull out of managing Johnson County jails with one more year to go on a three-year contract. Argeropulos said Johnson County’s jail population had dropped by 25 percent, causing CEC to lose money. Herbert Bristow, attorney for the county, said if CEC defaulted on repaying the bonds, the county would not be liable to make payments. The McLennan County Public Facility Corp., a seven-member board including the commissioners court, issued the bonds in 2009. “It was done by design to insulate the county,” Bristow said. “But the end result is if it’s a doomsday deal, and we can’t find any prisoners to put in it . . . the bondholders have the right to take the property back and get whatever value there is in it.” Argeropulos said he would bring the court a formal proposal for action later this month. Mashek said the discussion reinforced the concerns he expressed in 2008 when he voted against the new jail. “It looks like they’re trying to cover up problems they’re having and wanting the county to bail them out, and I’m not in a position to bail anybody out, especially CEC,” Mashek said.

February 19, 2010 Waco Tribune-Herald
A Texas attorney general’s opinion that a county sheriff is not authorized to accept an “administrative fee” from a private organization has no bearing on McLennan County Sheriff Larry Lynch, who receives a $12,000 annual salary supplement for monitoring the county’s privately run jails, county officials say. The opinion issued by Attorney General Greg Abbott’s office Wednesday was prompted by a question from state Rep. Yvonne Davis, D-Dallas, chairwoman of the House Committee on Urban Affairs. While the request, submitted in September 2008, did not specifically mention contracts between any county or sheriff, the letter was prompted by a high-profile state law enforcement union’s dispute with McLennan County. The union, the Combined Law Enforcement Associations of Texas, had battled the county as officials deliberated whether to renew its contract with Community Education Centers (formerly CiviGenics) to operate the county’s downtown jail and to contract with CEC to operate a new jail on State Highway 6. McLennan County Judge Jim Lewis and McLennan County District Attorney John Segrest said the opinion will not affect operations here because the salary supplement Lynch is paid comes from the county, not CEC. Segrest said “this opinion has no bearing whatsoever on the situation in McLennan County,” based on his knowledge of the CEC contract and from his discussions with county officials, including county auditor Steve Moore and county attorney Mike Dixon. “The private contractor does not pay the county anything,” Segrest said. “The county pays them. So clearly, there is no administrative fee paid by the private contractor who runs the jail. “It appears to me that the broad opinion was based on a question designed to get a certain answer and it comes from the same people who put up the billboards that said Waco is the murder capital of the world.” Group’s protests -- Segrest was referring to officials from CLEAT. The group asked for the opinion while organizing protests to McLennan County privatizing its jail system. CLEAT also had been involved in putting up billboards on Interstate 35 highlighting Waco’s crime rate. The move came amid local police association officials’ frustration with the city about pay, staffing and other issues. CEC contracts with the county to operate jails here, and the county contracts with the federal government and other counties to house their prisoners. The $12,000 supplement the county pays Lynch is for additional administrative and monitoring duties associated with the private jails, Lewis and Segrest said. A private jail company cannot operate in a county without the authorization of the county sheriff. That $12,000 annual fee is on top of Lynch’s annual salary of $92,881. The supplement has been in place since the late Jack Harwell was sheriff and the county first leased the downtown jail on Columbus Avenue to CiviGenics in 1999. Charley Wilkison, political and legislative director for CLEAT, challenged Lynch, based on the AG’s opinion, to write a check today and give the money back to the private contractor. That would prove he is an “honorable man and a man of integrity,” Wilkison said. Lynch did not return phone messages left at his office or on his cell phone Wednesday or Thursday. Dixon, the county’s attorney, said CLEAT continues to play fast and loose with the facts. “I fail to see why the sheriff would need to send a check to CEC when he has never received any money from or on behalf of CEC,” Dixon said. Wilkison said the supplement, which is common in all counties with private jails operating in them, “just never passed the smell test.” ‘Fish bait’ -- “This opinion is a great victory for the regular people of Texas, and the reason is that this goes to the cornerstone, to the fish bait, that private jail companies use to get into a community and get their hooks into the taxpayers and get their hands into their pockets,” Wilkison said. Wilkison said the opinion makes it clear that the salary supplement is not proper and should stop. Lewis said he doesn’t think the AG’s opinion applies to McLennan County because it involves a question about an “administrative fee” that is paid based on the number of prisoners in jail. “The sheriff is paid a salary supplement,” Lewis said. “There is a difference. He is paid the same salary supplement every year. “It is not a fee based on jail population. This is no secret. We post our salaries once a year and it is very clear that it is a supplement approved by the commissioners court,” Lewis said. Dixon agreed. He said the AG’s opinion request was based on erroneous information. “Instead of requesting an opinion pertaining to actual facts of which this group was well aware,” Dixon said, “the request was based on fictitious assertions that have been repeatedly alleged by the group, the goal being to use the resulting opinion to further assail the sheriff, even though the facts underlying the opinion would bear no relationship to the situation in McLennan County.” Ken Witt, president of the McLennan County Sheriff’s Office Association and a CLEAT member, said whatever the county calls the sheriff’s pay bump, it is wrong. “Whether you call it a fee or a supplement, it amounts to word games by Judge Jim Lewis,” Witt said. “It is clear that the sheriff is funneled money from CEC. “If not directly, indirectly through the commissioners court. It doesn’t matter how the sheriff receives his piece of the private pie.”

February 18, 2010 KXXV
A ruling by State Attorney General Greg Abbott Wednesday could revive the controversy over extra money Sheriff Larry Lynch receives from McLennan County Commissioners for overseeing county jails. A private company, Civigenics, runs the downtown jail by contract from the county, as well as a new jail on Highway 6 that should start housing inmates in the next thirty days. Sheriff Lynch is paid $12,000 a year to oversee those facilities, in addition to his regular salary. Other counties in Texas have similar arrangements, and their Sheriff receives extra money – sometimes significantly more -- from the private jailer. Abbott's ruling was a response to a request from Yvonne Davis, the Chair of the State House Committee on Urban Affairs. The Attorney General said "The commissioner's court may not contract with a private organization in which a member of the court or an elected or appointed peace officer who serves in the county has a financial interest … A contract made in violation of this section is void". It also said "regardless of county population, county sheriffs must be compensated on a salary basis. A sheriff, paid on a salary basis, ‘receives the salary instead of all fees, commissions, and other compensation the officer would otherwise be authorized to keep." "While article XVI, section 61 requires that a fee of office earned by a county officer ‘shall be paid into the county treasury,' it is not a grant of authority for the acceptance of a fee," the ruling continues. In summary, Abbott concluded such payments are illegal, "Neither the Texas Constitution nor Texas statutes authorize the person holding the office of county sheriff to be paid an administrative fee by a private organization." McLennan County Judge Jim Lewis told News Channel 25 the ruling was based on a "fee" opinion and not a "supplement" opinion, and a fee is based on the number of inmates being housed in the jail. "The supplement doesn't matter whether you have one or one thousand inmates, so that's the difference is what our attorneys tell us," Lewis explained. When asked if the attorneys said that after today's ruling, Lewis answered "No, that's what they told us all along". Lewis also said Sheriff Lynch isn't paid by Civigenics, "the fee is not paid to him by the company, the fee is paid to the County and the Commissioners Court selects to supplement the Sheriff's salary. It's important to understand that," Lewis said. "He's not receiving a fee by any stretch of the imagination." The County Judge said applying Wednesday's ruling out of Austin to McLennan County's situation is like "comparing apples to oranges". "We're doing everything the attorneys are telling us to do," Lewis added. The annual supplement, as Lewis called it, has been a source of controversy for years from critics of Lynch and candidates for the Sheriff position in election years.

September 26, 2009 Waco Tribune-Herald
When the new Jack Harwell Detention Center is ready for prisoners, McLennan County Sheriff Larry Lynch will be responsible for up to 800 additional inmates, but the stipend he is paid in the contract with the private detention company that will operate it will not increase. The extra $1,000 a month that Lynch is paid by the county in its contract with Community Education Centers has been a source of contention since before CEC acquired the former CiviGenics and before Lynch became sheriff. By statute, a private detention company cannot set up shop in a county without the authorization of the sheriff. And in some of those counties, the company pays a stipend to the county, which is passed on to the sheriff as part of his salary. The practice was questioned again last year during spirited debates among county officials about whether to build the privately run facility on State Highway 6 and whether to allow CEC or another company to take all of the county’s jail operations private. Lynch and his predecessors, Bob Mitchell and Jack Harwell, have all collected the extra pay through the private jail contract. All have said that it gave them extra responsibilities to see that all detention facilities in this county that hold county prisoners are in compliance with state standards and run properly. Critics of jail privatization in general, and the sheriff stipend in particular, include the largest law enforcement union in the state, Combined Law Enforcement Associations of Texas (CLEAT). A bill to ban such stipends did not pass in the last legislative session. “What we have done is legalize something that is ethically and morally wrong,” CLEAT spokesman Charley Wilkison said of the stipend. “It constitutes a clear financial interest between the sheriff and the for-profit companies. Can he take money from the people who provide vests to the deputies? Can he take money from the fleet dealer who sells cars to the county? Can he take money from any of the food vendors? If that had happened, a grand jury would be visiting on this issue right now.” Despite taking on more responsibilities with the opening later this year or early next year of the new 816-bed private jail adjacent to the county jail, Lynch said the county’s contract covering the new facility does not include more funds for him filtering down from CEC. Lynch’s regular salary is $92,881, and the county pays him $12,000 a year in the CEC contract and $140 a month in longevity pay. Lynch declined to discuss the stipend, saying it is old news. He was more eager to talk about the breathing room his department will have when the new facility opens, finally putting an end to the constant juggling act county officials perform because of jail overcrowding. The county jail population was 1,009 on Friday. Capacity at the State Highway 6 jail is 930, while capacity at the CEC-run McLennan County Detention Center downtown, which the county has used to hold prisoner overflow, is about 300. The new facility will hold federal detainees, primarily, said Lynch and County Judge Jim Lewis. However, the county also will house overflow prisoners there and at the downtown facility, they said. CEC also plans to contract with other agencies to house prisoners. A bill that would have made it a state jail felony for a sheriff to accept a stipend in a contract with a private detention company made it out of the House County Affairs Committee during the past legislative session but died on the House floor without a vote, Wilkison said. CEC operates a 1,000-bed facility in Limestone County. Sheriff Dennis Wilson, whose county annual salary is $49,457, is paid a $24,000 stipend yearly by the county in its contract with CEC, Wilson said. CEC spokesman Bob Prince, a retired Texas Ranger captain, said not all CEC contracts with Texas counties include stipends for sheriffs. “That is entirely up to the commissioners court to decide,” Prince said. “That is not a road we go down. The original contract we had in Waco, that was put in and that was what was agreed to.” Recently, Adan Munoz Jr., executive director of the Texas Commission on Jail Standards, sent out a memo warning counties to pay strict attention to contracts with food vendors, noting that sheriffs in Potter and Bexar counties hit legal snares recently in their dealings with food vendors. He said a state representative asked him to send the memo about food vendors. However, it could have included warnings in many other areas, including dealings with private detention companies, Munoz said. “We suggest that they consult with local attorneys about any potential conflicts,” Munoz said. “It is based on appearance and suspicion. Unfortunately, many people react on mere appearance without knowing the full story.”

June 21, 2009 The Star-Ledger
John Lynch, a former New Jersey state Senate president, was recently released to a halfway house after serving a jail term. Republican gubernatorial candidate Chris Christie is constantly boasting of his success in locking up crooked pols when he was U.S. attorney. And for him, Exhibit A is former Senate president John Lynch. The Middlesex County Democratic boss pleaded guilty to corruption charges and went to federal prison under Christie's watch. Lynch was released last week and transferred to a Newark halfway house to begin his return to society. But in his new housing assignment, The Auditor noticed something fascinating: The disgraced former senator is being housed at Logan Hall, a facility owned and operated by Community Education Centers, where Bill Palatucci, Christie's top fund-raiser and political consigliere, is a key executive. "It is kind of ironic, I guess," said Palatucci, CEC's senior vice president and general counsel. "There is one and only federal halfway house in New Jersey. And the U.S. Attorney's Office has no role in deciding where an inmate goes. But there are not a lot of options. It was unavoidable, I guess." Palatucci said CEC is pulling down $68 a day from the feds to cover Lynch's housing costs.

May 21, 2007 New York Times
A company based in New Jersey that provides training and treatment programs to prison inmates is announcing today that it has bought a similar Massachusetts company, creating one of the largest correctional services companies in the country. The two companies — Community Education Centers of Roseland, N.J., and CiviGenics of Marlborough, Mass. — are trying to capitalize on the growing number of inmates and tight financing for new prisons that have led federal, state and local governments to contract out more of their operations to private businesses. States have also addressed the shortage of prison space by trying to reduce recidivism with more training and treatment programs for inmates. About 70 percent of those released from prison return within three years, according to some studies. “There’s a tremendous focus on the re-entry of inmates,” said John J. Clancy, chief executive of Community Education Centers. “If people are going to continue to get out of prison, the question is how they get out.” The two privately held companies, which together are expected to employ about 3,500 people in 22 states and have close to $240 million in revenue next year, did not disclose the financial terms of the agreement. However, people with knowledge of the transaction said Community Education Centers paid more than $100 million for CiviGenics.

Delaney Hall, Essex County, New Jersey
Essex County immigrant detention center a house of controversy: Chris Megerian, The Star-Ledger. Despite the barbed wire snaking across the top of its perimeter fence, Delaney Hall is not a traditional lock-up.

December 21, 2011 The Star-Ledger
Immigrant advocates released a report Tuesday detailing what they describe as campaign contributions and hidden political ties behind the nonprofit group that subcontracts services for Delaney Hall, a private detention facility in Newark. The 19-page report comes almost a week after the Essex County freeholders awarded a lucrative immigrant-detention contract to the group, Education and Health Centers of America. Immigration advocates include in the report what they describe as "crony connections and a system of elected and un-elected political bosses in Essex County which limit transparency and oversight" surrounding the detention center. The report says Education and Health Centers and the for-profit Community Education Centers have been "skirting" pay-to-play laws and campaign-disclosure requirements through a "shell game." Education and Health Centers subcontracts private correctional services to Community Education Centers. Officials, however, criticized the report. Essex County Executive Joseph DiVincenzo issued a statement calling the county’s immigrant-detention contract a "creative revenue generator with the potential to create $250 million over five years." He added the report was an attempt to "discredit" the county’s contract with the federal Immigration and Customs Enforcement. Education and Health Centers spokesman Eric Shuffler said the report was "put out by groups with their own political agenda and it’s filled with mistakes, contradictions and unsubstantiated innuendo." He declined to go into detail about specific inaccuracies. The report lists more than $150,000 in campaign contributions to Essex County politicians by Community Education Centers and its CEO, John Clancy, a former county youth-services official who has donated to both state and county politicians. Clancy also heads Education and Health Centers but the two groups are legally separate entities, according to officials of both groups. Two groups authored the report — the New Jersey Advocates For Immigrant Detainees, and Enlace, a West Coast agency composed of community groups and unions that oppose for-profit correctional facilities. The former group is a broad-based coalition of 20 community, faith-based and advocacy agencies. According to the report, DiVincenzo received donations from Community Education Centers for years, beginning in 1999 with an $1,800 donation from Community Corrections Corp., the group’s former name. Since then, Community Education Centers and Clancy have donated to DiVincenzo, the Essex County Democratic Committee and at least three freeholders, among other elected officials, the report said. On Dec. 14, county freeholders gave Education and Health Centers a multimillion-dollar contract to house up to 450 immigrant detainees in Delaney Hall, a correctional facility on Doremus Avenue in Newark that is run by Community Education Centers. Immigrant advocate Karina Wilkinson said the contract "violates the spirit of pay-to-play." At the county level, the laws regulating pay-to-play only apply to no-bid contracts. Last week’s contract was open to bids, but only Education and Health Centers was the sole bidder. Tuesday's report cited similar concerns the state comptroller’s office raised about Education and Health Centers in June. The comptroller recommended the state Attorney General’s Office review the arrangement. The Attorney General’s Office did not return a call for comment Tuesday. Since 1994, Education and Health Centers and Community Education Centers have had an arrangement with the state that allows the nonprofit entity to subcontract nearly all its work to the for-profit one. Under state law, only nonprofit groups can be awarded contracts for private correctional services. The two companies’ arrangement with the state was in place years before the 2004 pay-to-play laws were enacted, said William Palatucci, senior vice president and general counsel for public affairs at Community Education Centers. Palatucci is also a close friend of Gov. Chris Christie’s. "Nobody could anticipate trying to skirt anything," Palatucci said.

October 11, 2011 The Star-Ledger
Essex County is preparing to rebid a contract for a deal with the federal government worth roughly a quarter-billion dollars to Essex County to house immigration detainees after it tossed out the previous sole bidder, a politically connected company. The first bidding process was ended after a letter from U.S. Sen. Frank Lautenberg (D-N.J.) questioned the fairness of the process. In July, Lautenberg wrote to Immigration and Customs Enforcement Director John Morton citing concerns the county’s bidding process "may not be entirely fair, open and transparent." The letter came after the sole applicant, Education and Health Centers of America, landed the job. In a responding letter, obtained Monday by The Star-Ledger, ICE officials said they received assurance from Essex the bidding process to find a vendor for the lucrative contract to house detainees in the county was "conducted in a fair and reasonable manner." However, the federal agency also notes "ICE does not have the authority to review or enforce procurement laws or regulations at the state and local level," states the Aug. 4 letter. The county later threw out the controversial bid to house detainees in Delaney Hall in Newark and is now expected to advertise an overhauled proposal. The contract is expected to be worth $50 million annually for five years. This second round could differ significantly because Essex will be simultaneously seeking vendors to house two different groups: ICE detainees awaiting hearings or deportation, and county inmates receiving drug and alcohol treatment. A county spokesman said the new bid is being finalized and declined to say when exactly it would be open to bidders. Essex County Executive Joseph N. DiVincenzo Jr. said during a freeholder meeting last week the county is "ready to go out to bid very shortly." Top officials at both the nonprofit EHCA and Community Education Centers, the for-profit company it contracts with, have made campaign contributions to DiVincenzo or are close allies of Gov. Chris Christie.

September 22, 2011
August 16, 2011 The Star-Ledger
The federal Immigration and Customs Enforcement agency is re-examining its deal with Essex County to house 1,250 immigrant detainees after the county announced it would throw out a controversial bid to hold them in a private facility run by a politically-connected firm. Days after signing a five-year contract with ICE, county officials said today they will seek another round of bids from vendors after only receiving one application for the project from Education and Health Centers of America, a nonprofit with ties to both Essex County Executive Joseph DiVincenzo Jr. and Gov. Chris Christie. Essex County officials said they now hope to secure a vendor by January. In the wake of the county’s announcement this afternoon, the immigration agency said it had not been informed of the change and released a terse statement. "ICE may need to renegotiate or modify the terms of our current (agreement) with the county," said spokeswoman Gillian Christensen. But county officials tried to downplay the change. "The public bid we issued for a vendor to house immigration detainees in a private facility was canceled, because Essex can save $600,000 by using an existing contract," DiVincenzo said in a written statement. In response to ICE’s plan to re-evaluate the deal, DiVincenzo said there must be some confusion, and he would contact the agency in the morning. "We already have a contract (with ICE). … I don’t know where they’re coming from," he said last night. For about five years, the county has had a contract with Delaney Hall, a private correctional facility on Doremus Avenue in Newark run by the for-profit Community Education Centers. Now the county will house immigrant detainees there under the existing contract, which ends Dec. 31. CEC contracts with the nonprofit Education and Health Centers of America, which in July put in a bid to house 450 ICE detainees at the facility. County officials said the move would also save about $17 a day for each detainee under the old contract. After the contract expires, detainees there could be relocated if another bidder is selected. The rest of the detainees will be housed at the county jail. "This does seem really odd. Really odd," said Amy Gottlieb, director of the Immigrant Rights Program with the Newark chapter of the American Friends Service Committee. "It does make me think that the exposure of the unorthodox bidding process, the non-transparency of the bidding process, has maybe raised some questions." Gottlieb and others, including Sen. Frank Lautenberg, criticized the bid process calling for more transparency. The county came under fire after the Education and Health Centers of America was the only bidder for the contract. John Clancy, a former county youth services official, heads both the Education and Health Centers of America and the Community Education Centers and has contributed tens of thousands of dollars to the campaigns of county and state officials. In addition to Clancy, a close friend and former law-firm colleague of the governor, William Palatucci, serves as a senior vice president for Community Education Centers. Today, Palatucci referred most questions to the county. "We currently have a contractual relationship with Essex County through the end of the year. We’ll have to wait and see to see what happens," he said. Palatucci emphasized the company’s long relationship with county government. "We have a good, strong track record for 11 years. We’d expect that to continue in one shape or form going forward," he said. Ralph Caputo, vice president of the county freeholder board and chairman of the public safety committee, said the freeholders will review the contract with ICE at their Wednesday meeting. He said the bid from Education and Health Centers of America may not have been the best fit because of the timing. The ICE contract is for five years, while the bid from Education and Health Centers of America was for two years with an option to extend it. Caputo said although the bid process has been controversial, he thinks the county is trying to do it right. "I don’t think any of it was wrong," he said. "I think they just went a little too fast." DiVincenzo also said that Philip Alagia will serve in a new position as county director of ICE programs, adding $30,000 to his $108,645 salary as DiVincenzo’s chief of staff.

August 16, 2011 The Star-Ledger
The federal Immigration and Customs Enforcement agency is re-examining its deal with Essex County to house 1,250 immigrant detainees after the county announced it would throw out a controversial bid to hold them in a private facility run by a politically-connected firm. Days after signing a five-year contract with ICE, county officials said today they will seek another round of bids from vendors after only receiving one application for the project from Education and Health Centers of America, a nonprofit with ties to both Essex County Executive Joseph DiVincenzo Jr. and Gov. Chris Christie. Essex County officials said they now hope to secure a vendor by January. In the wake of the county’s announcement this afternoon, the immigration agency said it had not been informed of the change and released a terse statement. "ICE may need to renegotiate or modify the terms of our current (agreement) with the county," said spokeswoman Gillian Christensen. But county officials tried to downplay the change. "The public bid we issued for a vendor to house immigration detainees in a private facility was canceled, because Essex can save $600,000 by using an existing contract," DiVincenzo said in a written statement. In response to ICE’s plan to re-evaluate the deal, DiVincenzo said there must be some confusion, and he would contact the agency in the morning. "We already have a contract (with ICE). … I don’t know where they’re coming from," he said last night. For about five years, the county has had a contract with Delaney Hall, a private correctional facility on Doremus Avenue in Newark run by the for-profit Community Education Centers. Now the county will house immigrant detainees there under the existing contract, which ends Dec. 31. CEC contracts with the nonprofit Education and Health Centers of America, which in July put in a bid to house 450 ICE detainees at the facility. County officials said the move would also save about $17 a day for each detainee under the old contract. After the contract expires, detainees there could be relocated if another bidder is selected. The rest of the detainees will be housed at the county jail. "This does seem really odd. Really odd," said Amy Gottlieb, director of the Immigrant Rights Program with the Newark chapter of the American Friends Service Committee. "It does make me think that the exposure of the unorthodox bidding process, the non-transparency of the bidding process, has maybe raised some questions." Gottlieb and others, including Sen. Frank Lautenberg, criticized the bid process calling for more transparency. The county came under fire after the Education and Health Centers of America was the only bidder for the contract. John Clancy, a former county youth services official, heads both the Education and Health Centers of America and the Community Education Centers and has contributed tens of thousands of dollars to the campaigns of county and state officials. In addition to Clancy, a close friend and former law-firm colleague of the governor, William Palatucci, serves as a senior vice president for Community Education Centers. Today, Palatucci referred most questions to the county. "We currently have a contractual relationship with Essex County through the end of the year. We’ll have to wait and see to see what happens," he said. Palatucci emphasized the company’s long relationship with county government. "We have a good, strong track record for 11 years. We’d expect that to continue in one shape or form going forward," he said. Ralph Caputo, vice president of the county freeholder board and chairman of the public safety committee, said the freeholders will review the contract with ICE at their Wednesday meeting. He said the bid from Education and Health Centers of America may not have been the best fit because of the timing. The ICE contract is for five years, while the bid from Education and Health Centers of America was for two years with an option to extend it. Caputo said although the bid process has been controversial, he thinks the county is trying to do it right. "I don’t think any of it was wrong," he said. "I think they just went a little too fast." DiVincenzo also said that Philip Alagia will serve in a new position as county director of ICE programs, adding $30,000 to his $108,645 salary as DiVincenzo’s chief of staff.

August 12, 2011 The Star-Ledger
Essex County and the federal Immigration and Customs Enforcement agency have signed a new, five-year agreement that could nearly triple the number of federal immigration detainees being held in Newark and generate as much as $50 million a year for the county, ICE officials said today. Under the contract, up to 1,250 detainees would be held at the Essex County Jail and the privately-run Delaney Hall. About 465 detainees are now held at the jail on an average day. Gillian Christensen, a spokeswoman for ICE, said the deal was signed Thursday. Anthony Puglisi, a spokesman for Essex County, said yesterday the county would have no comment until it officially announces the deal. The county freeholders still need to sign off on the agreement. Christensen said the contract calls for Essex County to receive $108 per detainee per day over the life of the contract. A similar arrangement, drawn up in 2008 at the rate of $105 per detainee per day, generated about $22 million for the county last year and is expected to bring in nearly $28 million this year, officials have said. The financial arrangement has come under fire from opponents to federal immigration policy, who say that the county is profiting from misguided mandates. "Essex County has shown that profits come before human rights," said Karina Wilkinson, a co-founder of the Middlesex County Coalition for Immigrant Rights and a frequent critic of Essex County’s detention policies. "We are disappointed that the Obama administration is continuing to expand detention and deportation to record levels, tearing communities apart." The new contract gives ICE access to 800 beds at the county jail and up to 450 beds at the adjacent Delaney Hall, Christensen said. In recent weeks, detractors have argued the specifications in the county’s bid request seeking housing for an additional 450 detainees was tailor-made for a politically connected company. Education and Health Centers of America, based in Wall Township, submitted the only bid. The non-profit firm has contracted with the county to provide rehabilitation and other services for more than a decade. In January, the county freeholders renewed a $20 million jail-services contract with EHCA. The bulk of those services are run out of Delaney Hall, a residential facility for criminal offenders that prepares them for re-entry into society. Although EHCA is a nonprofit, it subcontracted its service contracts to Community Education Centers, a for-profit company with which it is affiliated, according to state officials. Both companies are headed by John Clancy, a former county youth services official who has contributed tens of thousands of dollars to the campaign of county and state officials, according to state elections records. Freeholder Ralph Caputo said the board would meet with county administrators as soon as Monday to discuss both the contract and EHCA’s bid. "The basic objective is we want to be able to benefit the county with a tremendous amount of revenue, but we want to do it appropriately," Caputo said today. "There are a lot of specifics that have to addressed."

July 27, 2011 New York Times
Three weeks ago, Essex County, N.J., announced that it was seeking a company to run a 450-bed immigrant detention center, hoping to take advantage of a federally financed initiative to set up such facilities with better supervision and medical care. The county said the contracting process was open to any company. But behind the scenes, it appears that officials have a clear favorite: Community Education Centers, which has a checkered record in immigrant detention but counts one of Gov. Chris Christie’s closest confidants as a senior vice president. The company’s executives are also political backers of the county executive, Joseph N. DiVincenzo Jr., a prominent ally of Mr. Christie. The county’s bidding rules specified that visitors to the detention center greet detainees “in the gymnasium” — a requirement that seemed to point to an existing facility, Delaney Hall in Newark, operated by Community Education Centers. Bidders were given 23 days to submit applications, an unusually short deadline for a multimillion-dollar contract. Community Education Centers itself seemed to act as if its selection were a done deal. The deadline for bids is Thursday, but the company posted advertisements on its Web site weeks ago to fill five jobs working with immigrant detainees at the facility. And this week, federal immigration officials and Community Education staff members gave tours of Delaney Hall to advocates for immigrants, telling them that it would probably be the new facility. The advocates were not shown other sites. Questioned about the selection process, Essex officials said the bidding was fair and open to any company. A spokesman for Mr. Christie said the governor’s office had no involvement in the contract. Federal and local officials have not indicated the size of the contract for the winning bidder, but it appears the total could amount to $8 million to $10 million annually. Government at all levels has pushed to privatize prisons and detention centers in recent decades, trying to save money and improve services. The federal government, which has been apprehending a growing number of immigrants, plans to use private companies to help overhaul a detention system that includes a patchwork of facilities. But privatized prisons and detention centers have at times became ensnared in scandals over mistreatment of their charges. In fact, Community Education Centers, based in West Caldwell, N.J., was seriously penalized in 2008 under an earlier contract to house immigrants at Delaney Hall. After an immigrant escaped, officials responded by removing the remaining 120 detainees from the company’s supervision and placing them in a public jail. Immigrant detention centers typically house immigrants, both legal and illegal, who are facing deportation because of visa violations or criminal convictions. With a shortage of beds in the Northeast, the federal Immigration and Customs Enforcement agency announced plans last year to house hundreds of detainees in Essex County. Officials said the detainees would have better access to lawyers and consulates, enabling the authorities to curb the transfer of detainees to distant places like Texas. Community Education’s senior vice president is William J. Palatucci, Mr. Christie’s political mentor and former law partner, and one of the state’s well-known Republican strategists. Mr. Palatucci was a major fund-raiser for George W. Bush’s 2000 presidential campaign, and recommended to the Bush administration that it nominate Mr. Christie for United States attorney for New Jersey, a job he held from 2002 to 2009. Community Education and its executives are major supporters of Mr. DiVincenzo, one of the most powerful politicians in North Jersey. Community Education employees, including senior executives and several of their family members, have donated a total of $30,600 to Mr. DiVincenzo’s campaigns since 2006, according to disclosure records. Mr. DiVincenzo, the county executive since 2002, is also influential in Trenton. Though he is a Democrat, he has developed a close relationship with Mr. Christie, a Republican, who swore him in for his third term. Mr. DiVincenzo has said he agrees with 95 percent of what the governor is doing, and has broken ranks with his party to support Mr. Christie’s efforts to curb the pay and benefits of public employees. Mr. Christie’s press secretary, Michael Drewniak, said, “There is no basis whatsoever to bring the governor into this and doing so sounds like a total stretch.” Essex County’s counsel, James R. Paganelli, said neither Community Education nor any other company had the inside track for the contract. “We have a public bid looking for anybody who thinks they can provide these services,” Mr. Paganelli said. “I hope that this bid is as competitive as we can make it.” Mr. Paganelli said he expected as many as 30 companies to express interest, and he declined to speak about any bidder in particular. A Community Education spokesman, Christopher Greeder, said any claim that the company had “received favored status from Essex County is unfounded.” Mr. Greeder said Delaney Hall was fully accredited and had housed more than 80,000 individuals since its opening in 2000. Asked why the company had advertised for jobs at the detention center before it knew whether it had won the contract, he said: “As a private company, we often advertise for positions in advance of any contract award. We want to be prepared.” He added that there was no connection between campaign contributions given by company executives and government contracts. For their part, federal officials said they were already making plans to send immigrants to Delaney Hall because Essex specifically mentioned it in its proposal to the federal government. They were not aware that the county was considering other facilities, said Gillian M. Christensen, a spokeswoman for the immigration agency. Immigrant advocates called the contracting process severely flawed. Amy Gottlieb, director of the Immigrant Rights Program at the American Friends Service Committee, said, “The idea that a company can advertise a job before they have the contract is offensive, because the stakes are so high.” Although the details are still being made final, Immigration and Customs Enforcement plans to assign 800 immigrants to the Essex jail, which currently holds about 500, and plans to place an additional 450 detainees in Delaney Hall, which is nearby, Ms. Christensen said. To solicit bids, Essex County advertised in The Star-Ledger of Newark and posted the requirements on a county Web site, following standard procedure, according to Mr. Paganelli, the county counsel. He said county officials did not actively solicit companies to bid. By comparison, the New York State Office of General Services said that when the state issued contracts for specialized services, it advertised in multiple publications, posted the requirements online and contacted competing firms that perform similar services.

March 25, 2011 The Star-Ledger
A Superior Court judge this morning sentenced a 31-year-old man to life in prison for strangling a fellow inmate at a private correctional facility in Newark, two days after the victim had been sent there on unpaid traffic tickets. A jury had convicted the man, Giancarlo Bonilla, of felony murder for the May 18, 2009, killing of Derek West Harris, a Newark barber who had been arrested for failing to pay $722 in traffic tickets. Instead of Essex County Jail, Harris was sent to Delaney Hall, considered a jail alternative for nonviolent offenders. Bonilla and two other men were charged in the killing, which happened while they were trying to rob Harris, who was 51 years old. They confronted Harris, who resisted. Bonilla kept the man in a minutes-long chokehold, killing him. The two other defendants pleaded guilty to robbery charges. "Defendant Bonilla preyed upon Derek West for a few cigarettes and fewer dollars," Superior Court Judge Peter Ryan said before imposing the sentence. "For this, a horrendous murder was perpetrated."

January 27, 2011 Star-Ledger
Someone, somewhere thought Derek West Harris would be safer in Delaney Hall — a private correctional facility for nonviolent offenders — rather than at a traditional jail, Essex County Assistant Prosecutor Peter Guarino said Wednesday. Arrested for $722 in overdue traffic fines, the 51-year-old barber was sent to Delaney Hall in Newark, where he was attacked and strangled two days later on May 18, 2009. Three inmates were soon charged with his murder. "This could have happened to anybody," Guarino said after a Superior Court jury in Newark convicted Giancarlo Bonilla of the killing, which followed a botched attempt to steal $20 from Harris. "That’s the great tragedy of this case." Bonilla, 31, was found guilty of felony murder, robbery and conspiracy to commit robbery, and faces up to life in prison when he is sentenced March 18. He was acquitted of first-degree murder, essentially meaning the jury determined Bonilla did not intend to kill Harris, but caused his death in the act of committing a robbery.

June 3, 2009 Star-Ledger
On a Tuesday evening in Irvington, Derek West Harris saw the colored lights in the rearview mirror of his late-model Mazda Millennium and pulled over. Harris, a 51-year-old Newark barber, had bought the car two weeks earlier and didn't register or insure it before he put it on the road. He also owed $722 in back tickets, according to family members and corrections documents. Harris was arrested and later taken to Delaney Hall, a unique, private facility in Newark that opened nine years ago as an alternative to jail for Essex County's low-level offenders. Two days after he was shown his bed May 16 in Delaney Hall, Harris was dead. Three inmates -- Ibn Goodman, 18, Giancarlo Bonilla, 29, and Luis Gonzalez, 19 -- have been accused of beating and strangling Harris in the middle of the night, then robbing him of $20. His death is the first homicide committed at the facility since it opened, said Scott Faunce, director of the Essex County Department of Corrections. In comparison, there have only been two homicides in the state's 14 prisons since 2006, said Matt Schuman, a spokesman with the state Department of Corrections. The incident has sparked three investigations -- one by the private company that runs the 1,120-bed facility, one by Essex County, which paid the firm to operate the facility, and another by the state Department of Corrections, which inspected the facility for the first time in February, county officials said. They will look at who is placed in the facility and how inmates are grouped together, county and state officials said. As for Harris' family, they want to know why none of Delaney Hall's staff saw the fight and stopped it. "I still can't grasp what happened," said Terence Moore, 39, one of Harris' younger brothers. "Somebody goes in on a traffic ticket and doesn't make it out?" Inmate advocates also say they are concerned that Essex County has contracted a private corrections company that is allowed to operate and staff its facility with no accountability to state corrections authorities. "Anyone can end up there," said Penny Venetis, a Rutgers Law School professor who won a groundbreaking U.S. Supreme Court ruling on behalf of detainees abused at a private facility in Elizabeth. "It should not have happened at all. They are getting our tax dollars to run these facilities." There are several other private corrections facilities in the state funded with public funds. Delaney Hall is one of the only ones that take jail inmates, said a state Department of Corrections spokeswoman. Freeholder Ralph Caputo, who chairs the freeholder board's public safety committee, said Camden County officials consider Delaney Hall a model facility and are studying it as they consider privatizing their jail. "It's been a very good program. Delaney Hall has worked in every way for Essex County," Caputo said. Delaney Hall's mission is to end recidivism through counseling and education, according to executives who manage the facility on Doremus Street. At the time of Harris' death, about 650 men and 70 women lived there, according to Essex County officials. "It's an alternative to prison in a therapeutic setting," said William Palatucci, senior vice president of Community Education Centers Inc. of West Caldwell. In Delaney Hall, inmates can receive job training and treatment for drug and alcohol abuse, said Palatucci. Inmates are not locked in their rooms at night, and they are offered incentives for good behavior, such as being able to order take-out one night a month. Unlike a jail, the facility is staffed only with counselors. Some are former inmates, which, a company spokesman said, is in keeping with the facility's mission to rehabilitate offenders. Laura Cohen, a Rutgers Law School professor who runs the school's Urban Legal Clinic, said what has attracted government entities to contracting private corrections companies is that many of them are not unionized. "State, counties and other jurisdictions have looked to these companies as cost-savings measures," Cohen said. The county is paying Education and Health Centers of America Inc. in Roseland, which contracts with Community Education Centers, up to $20 million a year to operate the facility, according to county records and company officials. Joe Amato, president of the Essex County corrections officers' union and a regular critic of Delaney Hall, said the facility's differences are what make it dangerous for its inmates. He contends that the staff monitoring inmates should be trained in law enforcement, just like other corrections officers who are required to spend 14 weeks at a training academy before working in a jail. The lack of training for staff is only exacerbated at Delaney Hall, Amato said, because people charged with serious crimes are housed with people charged with minor offenses. One of the main criteria used to determine if an inmate may be housed in Delaney Hall is the inmate's bail amount. Anyone with a bail of $75,000 or less is eligible, said Faunce. Harris had a previous drug conviction in 2007 for manufacturing and distributing less than half an ounce of cocaine, but was jailed for traffic violations, according to corrections records. Owing $722 in fines, Harris' bail was his outstanding ticket amounts. The suspects in Harris' death also met the bail criteria. Bonilla, arrested on drug and several weapons charges, had bail set at $75,000. He was released from South Woods State Prison in Cumberland County in September 2005 after serving a year and a half for a drug dealing conviction, according to state prison records. Goodman's bail was set at $70,000 after he was arrested on charges of distributing narcotics near a school, and Gonzalez was starting a four-year state sentence for a parole violation and had no bail set prior to being accused of Harris' murder, according to correction records. Amato said the county put as many inmates as possible in Delaney Hall to make room in the county jail for federal prisoners and detainees because the county makes money by housing these inmates. Essex County officials denied the allegation. "It is categorically untrue that as a result of a relationship with the federal programs that we were somehow pushing people into Delaney Hall in order to make room for revenue," Essex County Administrator Joyce Harley said. Faunce said the county would take a serious look at the result of the investigations, but that little could have been done to prevent Harris' death. "It could not be predicted, no matter what kind of screening process you have in place," he said.

Dickens County Jail, Dickens County, Texas
February 3, 2011 KCBD
While the Lubbock County Detention Center is filling up with inmates, other counties are struggling to find an inmate. Taxpayers of those counties are now being held prisoners by their own prisons as they're forced to pay the price of empty facilities. About an hour from Lubbock, the Bill Clayton Detention Center in Littlefield hasn't had a single inmate in the last two years. "This was not built to house local inmates; it was built to house inmates from other parts of the state or other parts of U.S. It was built to bring economic development to the city of Littlefield," said Danny Davis, Littlefield city manager. For a while it did bring money into Littlefield, until the State of Idaho decided to remove its inmates from the center when the economy tanked back in 2009. "Everybody was cutting back it seemed, and it was very difficult to find other inmates from out of state to come in and fill the facility," said Davis. Nearly 100 people lost their job in the area, and with $9 million left to pay for the now empty building, residents are stuck paying the price through increased taxes and fees." Jokingly I've told people when I took this job I weighed a lot more and had a lot more hair, so that's how I guess you can say how the frustration level is. It has been a frustrating situation for the whole community," said Davis. About two hours away Dickens County faces a similar fate. Their contractor CEC didn't renew their contract with the Dickens County Correctional Center. In mid-December the remaining inmates were moved to Lubbock County's new facility, and nearly 120 jobs were lost - huge hit to the small communities of Dickens County. "It cost money to put people in jail. The state of the economy, the governments don't have as much money. Our own state is cutting the budget, and there's one way to save money…that's not to incarcerate them, and so that's why I believe our inmate population is down," said Lesa Arnold, Dickens County Judge. So far Dickens County hasn't had to increase taxes to foot the prison's one million dollar bill each year, but that option might soon surface. "We need to get this thing going within a year, and hopefully a whole lot sooner than that before that issue comes up as to who's going to make those bond payments," said Arnold. So how can Lubbock County fill its newly built facility while these two and others around the U.S. are failing? It comes down to why these facilities were built in the first place. Littlefield and Dickens County didn't have an inmate population for the large prisons they built; instead they were built to make a profit for the towns by contracting out the prison cells to other parts of the state and U.S. Lubbock on the other hand, needed the bigger facility. All 1,063 inmates currently in the Lubbock County Detention Center are from Lubbock County, which means their cells will constantly be filled with a local inmate population. The other facilities are staying hopeful a new inmate population will come their way. "I can't worry about why we have it because that's in the past. I can only worry about what can we do with it now that we have it, and that's what we work on every day," said Davis.

December 11, 2010 Texas Prison Bidness
On Friday, Community Education Centers (CEC) decided to let their contract with the Dickens County Jail expire. All the inmates from that facility were transferred to the Lubbock County Detention Center. The US Marshals will pay the city of Lubbock a $40 per diem rate, and $10 per hour for guards, but the jail's Chief Deputy said they would negotiate for a higher rate in order to recover the cost of Lubbock's sending to Dickens in the first place. Now that Lubbock has a new and larger jail, they want their inmates back: As of Friday the Lubbock County Detention Center hold [sic] 105 inmates with more on the way. Chief Deputy Downes said all the federal inmates should be transferred by the end of next week. "The Lubbock County taxpayers are seeing some return on what they spent on this facility," said Chief Deputy Downes. But for Dickens County, a community of 2,700, having the federal inmates transferred has led to all 489 beds empty and more than120 jobs lost. This comes after the privately owned company that operated the Dickens County Jail did not renew their three year contract and is in the process of transitioning the operation of the jail back to Dickens[.] "We've been working diligently for the last 8 months to ensure this day would never come. Unfortunately it has," said Lesa Arnold, Dickens County Judge. The Dickens County Judge said possible loss of the jail is not an effect of less inmates. It's also due to the economy and location. "I think a lot of it had to do with geography. It was just closer for the U.S. Marshals to the court system in Lubbock," said Judge Arnold.

Ector County Correctional Center, Odessa, Texas
June 17, 2010 Odessa American
A Midland man who claims he was beaten into submission while jailed in the Odessa Detention Center has not given up a years-long effort to be compensated for what he said was the use of excessive force after he ran out of his cell. Larry Wesley Brown, a federal prisoner serving more than four years on a conviction of possession of a firearm by a convicted felon, sought $8 million in damages from Civigenics — a private company also known as Community Education Centers — that operates the detention center — for injuries he said occurred while he was awaiting trial in July 2007. The lawsuit was dismissed with prejudice in March, but this month, Brown appealed the district court’s decision to the Fifth Circuit Court of Appeals. Brown, 55, writes in court filings that he is a former Army medic with a “well-documented history of psychological problems.” Among other disorders, Brown said he suffers from paranoid schizophrenia. Brown’s claim against the detention center stems from a scuffle with several prison guards after — in what he called a “delusional episode” — he repeatedly shouted for help from his cell and then bolted into the hallway once the door was opened. “At the time I believed that I was a member of the British royal family and was mistakenly being held in the bowels of a military ship,” Brown said in a sworn affidavit. “From within the cell, I continued to scream for help, and I yelled for the guard to contact the Queen.” Brown said he suffered a number of injuries when he was detained, including several broken teeth. “Community Education Centers is satisfied with the judge’s ruling and confident it will survive on appeal,” said Christopher Greeder, a spokesman for the detention center. In a separate case, Civigenics was sued by another former inmate who blames the detention center for the loss of his eyesight. Colby E. Miller of Odessa claims in a federal lawsuit that Civigenics guards negligently allowed a fellow inmate to obtain a broom. Miller’s attorney, Robert Swafford of Austin, said in the lawsuit that the inmate struck Miller in the eye with the broomstick, causing him to permanently lose his sight. Greeder declined to comment on the Miller case, citing the pending litigation. No trial date has been set in the Miller case.

April 6, 2010 Odessa American
An Odessa woman fearing a life sentence in federal prison hanged herself in an isolation cell Monday morning, her family said. Vickie Faye Purcell, 51, was found dead in the Ector County Correctional Center, authorities said. The Texas Rangers said Purcell’s death appeared to be a suicide, but they were still awaiting the results of an autopsy Tuesday. “We’re just devastated,” Purcell’s sister, Teresa Johnson, said by phone Tuesday. “She was a good, sweet, wonderful person. We’re just going to miss her terribly.” Family members said Purcell had been placed in isolation the night before after getting into a fight with a cellmate. The suicide is at least the second by an inmate in the past two years at the Ector County Correctional Center, which is operated by Civigenics, a private company also known as Community Education Centers. Christopher Greeder, a company spokesman, confirmed the suicide on Tuesday but declined to comment further, citing an ongoing investigation. Greeder also declined to discuss the jail’s general policies on suicide prevention.

Essex County Jail, Essex County, New Jersey
August 16, 2011 The Star-Ledger
The federal Immigration and Customs Enforcement agency is re-examining its deal with Essex County to house 1,250 immigrant detainees after the county announced it would throw out a controversial bid to hold them in a private facility run by a politically-connected firm. Days after signing a five-year contract with ICE, county officials said today they will seek another round of bids from vendors after only receiving one application for the project from Education and Health Centers of America, a nonprofit with ties to both Essex County Executive Joseph DiVincenzo Jr. and Gov. Chris Christie. Essex County officials said they now hope to secure a vendor by January. In the wake of the county’s announcement this afternoon, the immigration agency said it had not been informed of the change and released a terse statement. "ICE may need to renegotiate or modify the terms of our current (agreement) with the county," said spokeswoman Gillian Christensen. But county officials tried to downplay the change. "The public bid we issued for a vendor to house immigration detainees in a private facility was canceled, because Essex can save $600,000 by using an existing contract," DiVincenzo said in a written statement. In response to ICE’s plan to re-evaluate the deal, DiVincenzo said there must be some confusion, and he would contact the agency in the morning. "We already have a contract (with ICE). … I don’t know where they’re coming from," he said last night. For about five years, the county has had a contract with Delaney Hall, a private correctional facility on Doremus Avenue in Newark run by the for-profit Community Education Centers. Now the county will house immigrant detainees there under the existing contract, which ends Dec. 31. CEC contracts with the nonprofit Education and Health Centers of America, which in July put in a bid to house 450 ICE detainees at the facility. County officials said the move would also save about $17 a day for each detainee under the old contract. After the contract expires, detainees there could be relocated if another bidder is selected. The rest of the detainees will be housed at the county jail. "This does seem really odd. Really odd," said Amy Gottlieb, director of the Immigrant Rights Program with the Newark chapter of the American Friends Service Committee. "It does make me think that the exposure of the unorthodox bidding process, the non-transparency of the bidding process, has maybe raised some questions." Gottlieb and others, including Sen. Frank Lautenberg, criticized the bid process calling for more transparency. The county came under fire after the Education and Health Centers of America was the only bidder for the contract. John Clancy, a former county youth services official, heads both the Education and Health Centers of America and the Community Education Centers and has contributed tens of thousands of dollars to the campaigns of county and state officials. In addition to Clancy, a close friend and former law-firm colleague of the governor, William Palatucci, serves as a senior vice president for Community Education Centers. Today, Palatucci referred most questions to the county. "We currently have a contractual relationship with Essex County through the end of the year. We’ll have to wait and see to see what happens," he said. Palatucci emphasized the company’s long relationship with county government. "We have a good, strong track record for 11 years. We’d expect that to continue in one shape or form going forward," he said. Ralph Caputo, vice president of the county freeholder board and chairman of the public safety committee, said the freeholders will review the contract with ICE at their Wednesday meeting. He said the bid from Education and Health Centers of America may not have been the best fit because of the timing. The ICE contract is for five years, while the bid from Education and Health Centers of America was for two years with an option to extend it. Caputo said although the bid process has been controversial, he thinks the county is trying to do it right. "I don’t think any of it was wrong," he said. "I think they just went a little too fast." DiVincenzo also said that Philip Alagia will serve in a new position as county director of ICE programs, adding $30,000 to his $108,645 salary as DiVincenzo’s chief of staff.

August 12, 2011 The Star-Ledger
Essex County and the federal Immigration and Customs Enforcement agency have signed a new, five-year agreement that could nearly triple the number of federal immigration detainees being held in Newark and generate as much as $50 million a year for the county, ICE officials said today. Under the contract, up to 1,250 detainees would be held at the Essex County Jail and the privately-run Delaney Hall. About 465 detainees are now held at the jail on an average day. Gillian Christensen, a spokeswoman for ICE, said the deal was signed Thursday. Anthony Puglisi, a spokesman for Essex County, said yesterday the county would have no comment until it officially announces the deal. The county freeholders still need to sign off on the agreement. Christensen said the contract calls for Essex County to receive $108 per detainee per day over the life of the contract. A similar arrangement, drawn up in 2008 at the rate of $105 per detainee per day, generated about $22 million for the county last year and is expected to bring in nearly $28 million this year, officials have said. The financial arrangement has come under fire from opponents to federal immigration policy, who say that the county is profiting from misguided mandates. "Essex County has shown that profits come before human rights," said Karina Wilkinson, a co-founder of the Middlesex County Coalition for Immigrant Rights and a frequent critic of Essex County’s detention policies. "We are disappointed that the Obama administration is continuing to expand detention and deportation to record levels, tearing communities apart." The new contract gives ICE access to 800 beds at the county jail and up to 450 beds at the adjacent Delaney Hall, Christensen said. In recent weeks, detractors have argued the specifications in the county’s bid request seeking housing for an additional 450 detainees was tailor-made for a politically connected company. Education and Health Centers of America, based in Wall Township, submitted the only bid. The non-profit firm has contracted with the county to provide rehabilitation and other services for more than a decade. In January, the county freeholders renewed a $20 million jail-services contract with EHCA. The bulk of those services are run out of Delaney Hall, a residential facility for criminal offenders that prepares them for re-entry into society. Although EHCA is a nonprofit, it subcontracted its service contracts to Community Education Centers, a for-profit company with which it is affiliated, according to state officials. Both companies are headed by John Clancy, a former county youth services official who has contributed tens of thousands of dollars to the campaign of county and state officials, according to state elections records. Freeholder Ralph Caputo said the board would meet with county administrators as soon as Monday to discuss both the contract and EHCA’s bid. "The basic objective is we want to be able to benefit the county with a tremendous amount of revenue, but we want to do it appropriately," Caputo said today. "There are a lot of specifics that have to addressed."

July 30, 2011 The Star-Ledger
Essex County officials are coming under heavy criticism over how they handled the bidding process for a facility to house federal immigration detainees, a contract potentially worth tens of millions of dollars. U.S. Sen. Frank Lautenberg (D-N.J.) and immigration advocates are questioning whether the request’s specifications were tailor-made for Education and Health Centers of America, a politically connected firm that submitted the sole bid by Thursday’s deadline. Specifications for the contract, which call for housing at least 450 detainees, include that the facility be located within a two-hour drive of Newark, New York and Philadelphia and within a 10-mile radius of the Essex County Jail on Doremus Avenue in Newark; that the successful bidder have a facility already being used for correctional purposes; and that it be within 20 miles of a major airport. EHCA has contracted with the county to provide rehabilitation and other services for more than a decade. "This smacks of some kind of a backdoor deal," said Amy Gottlieb, director of the Immigrant Rights Program with the Newark chapter of the American Friends Service Committee, a Quaker faith-based organization. "It really seems to show the process was not open." Gottlieb said the bid process raised "serious questions," particularly since the contract involves incarceration. "The stakes are high. This isn’t a game," she said. "You’re talking about depriving people’s liberty." In a letter to John Morton, director of U.S. Immigration and Customs Enforcement, Lautenberg, the vice chairman of a Senate subcommittee that oversees federal funding to ICE, questioned whether the county’s bidding process was "entirely fair, open and transparent." Before any agreement is finalized, Lautenberg wrote, "I am requesting that ICE carefully examine the terms and conditions of such an agreement, as well as the manner in which Essex County intends to satisfy its obligations under the agreement in order to ensure that it fully complies with all applicable law." County officials did not make the bid available, saying it can only be inspected after a formal public-information request is submitted and processed. An attorney for the company, William Harla, said the company’s bid would be judged solely on its merits. "EHCA did not ask for any special position in the process," Harla said in an e-mail. EHCA has reaped about $500 million in county and state Department of Corrections contracts since 1997, according to a state comptroller’s report last month. In January, the county freeholders renewed a $20 million jail-services contract with the company. The bulk of those services are run out of Delaney Hall, a residential center on Doremus Avenue for criminal offenders that prepares them for re-entry into society. Although EHCA is a nonprofit, it sub-contracted its service contracts to a for-profit affiliate, Community Education Centers, according to state officials. Both companies are headed by John Clancy, a former county youth services official who has contributed tens of thousands of dollars to the campaign of county and state officials, according to state elections records. Besides Clancy, who also served as president of the New Jersey Association for Youth Services and the chairman of the county’s Family Court Commission, William Palatucci, a close friend and former law firm colleague of Gov. Chris Christie, works for Community Education Centers. Clancy and Community Education Centers have made hundreds of thousands of dollars in political contributions to county and state candidates over the years, including the most recent re-election campaign for Essex County Executive Joseph N. DiVincenzo Jr. Those contributions have come under scrutiny from critics of the county’s ICE contracts. Clancy, though, has said that "a battery of attorneys" have determined his contributions are clearly within legal bounds. In a statement, DiVincenzo said Lautenberg’s suspicions were misplaced. "While most senators would fight for additional revenue to lower taxes and create jobs for their constituents, Senator Frank Lautenberg has channeled his energy into preventing Essex County’s taxpayers from receiving $50 million in revenue," DiVincenzo said. The statement said the county fosters open and competitive pricing "so that we can obtain the most professionally delivered and cost efficient services for our residents."

July 27, 2011 New York Times
Three weeks ago, Essex County, N.J., announced that it was seeking a company to run a 450-bed immigrant detention center, hoping to take advantage of a federally financed initiative to set up such facilities with better supervision and medical care. The county said the contracting process was open to any company. But behind the scenes, it appears that officials have a clear favorite: Community Education Centers, which has a checkered record in immigrant detention but counts one of Gov. Chris Christie’s closest confidants as a senior vice president. The company’s executives are also political backers of the county executive, Joseph N. DiVincenzo Jr., a prominent ally of Mr. Christie. The county’s bidding rules specified that visitors to the detention center greet detainees “in the gymnasium” — a requirement that seemed to point to an existing facility, Delaney Hall in Newark, operated by Community Education Centers. Bidders were given 23 days to submit applications, an unusually short deadline for a multimillion-dollar contract. Community Education Centers itself seemed to act as if its selection were a done deal. The deadline for bids is Thursday, but the company posted advertisements on its Web site weeks ago to fill five jobs working with immigrant detainees at the facility. And this week, federal immigration officials and Community Education staff members gave tours of Delaney Hall to advocates for immigrants, telling them that it would probably be the new facility. The advocates were not shown other sites. Questioned about the selection process, Essex officials said the bidding was fair and open to any company. A spokesman for Mr. Christie said the governor’s office had no involvement in the contract. Federal and local officials have not indicated the size of the contract for the winning bidder, but it appears the total could amount to $8 million to $10 million annually. Government at all levels has pushed to privatize prisons and detention centers in recent decades, trying to save money and improve services. The federal government, which has been apprehending a growing number of immigrants, plans to use private companies to help overhaul a detention system that includes a patchwork of facilities. But privatized prisons and detention centers have at times became ensnared in scandals over mistreatment of their charges. In fact, Community Education Centers, based in West Caldwell, N.J., was seriously penalized in 2008 under an earlier contract to house immigrants at Delaney Hall. After an immigrant escaped, officials responded by removing the remaining 120 detainees from the company’s supervision and placing them in a public jail. Immigrant detention centers typically house immigrants, both legal and illegal, who are facing deportation because of visa violations or criminal convictions. With a shortage of beds in the Northeast, the federal Immigration and Customs Enforcement agency announced plans last year to house hundreds of detainees in Essex County. Officials said the detainees would have better access to lawyers and consulates, enabling the authorities to curb the transfer of detainees to distant places like Texas. Community Education’s senior vice president is William J. Palatucci, Mr. Christie’s political mentor and former law partner, and one of the state’s well-known Republican strategists. Mr. Palatucci was a major fund-raiser for George W. Bush’s 2000 presidential campaign, and recommended to the Bush administration that it nominate Mr. Christie for United States attorney for New Jersey, a job he held from 2002 to 2009. Community Education and its executives are major supporters of Mr. DiVincenzo, one of the most powerful politicians in North Jersey. Community Education employees, including senior executives and several of their family members, have donated a total of $30,600 to Mr. DiVincenzo’s campaigns since 2006, according to disclosure records. Mr. DiVincenzo, the county executive since 2002, is also influential in Trenton. Though he is a Democrat, he has developed a close relationship with Mr. Christie, a Republican, who swore him in for his third term. Mr. DiVincenzo has said he agrees with 95 percent of what the governor is doing, and has broken ranks with his party to support Mr. Christie’s efforts to curb the pay and benefits of public employees. Mr. Christie’s press secretary, Michael Drewniak, said, “There is no basis whatsoever to bring the governor into this and doing so sounds like a total stretch.” Essex County’s counsel, James R. Paganelli, said neither Community Education nor any other company had the inside track for the contract. “We have a public bid looking for anybody who thinks they can provide these services,” Mr. Paganelli said. “I hope that this bid is as competitive as we can make it.” Mr. Paganelli said he expected as many as 30 companies to express interest, and he declined to speak about any bidder in particular. A Community Education spokesman, Christopher Greeder, said any claim that the company had “received favored status from Essex County is unfounded.” Mr. Greeder said Delaney Hall was fully accredited and had housed more than 80,000 individuals since its opening in 2000. Asked why the company had advertised for jobs at the detention center before it knew whether it had won the contract, he said: “As a private company, we often advertise for positions in advance of any contract award. We want to be prepared.” He added that there was no connection between campaign contributions given by company executives and government contracts. For their part, federal officials said they were already making plans to send immigrants to Delaney Hall because Essex specifically mentioned it in its proposal to the federal government. They were not aware that the county was considering other facilities, said Gillian M. Christensen, a spokeswoman for the immigration agency. Immigrant advocates called the contracting process severely flawed. Amy Gottlieb, director of the Immigrant Rights Program at the American Friends Service Committee, said, “The idea that a company can advertise a job before they have the contract is offensive, because the stakes are so high.” Although the details are still being made final, Immigration and Customs Enforcement plans to assign 800 immigrants to the Essex jail, which currently holds about 500, and plans to place an additional 450 detainees in Delaney Hall, which is nearby, Ms. Christensen said. To solicit bids, Essex County advertised in The Star-Ledger of Newark and posted the requirements on a county Web site, following standard procedure, according to Mr. Paganelli, the county counsel. He said county officials did not actively solicit companies to bid. By comparison, the New York State Office of General Services said that when the state issued contracts for specialized services, it advertised in multiple publications, posted the requirements online and contacted competing firms that perform similar services.

Falls County Jail, Marlin, Texas
March 28, 2011 NPR
Private Prison Promises Leave Texas Towns In Trouble by John Burnett The country with the highest incarceration rate in the world — the United States — is supporting a $3 billion private prison industry. In Texas, where free enterprise meets law and order, there are more for-profit prisons than any other state. But because of a growing inmate shortage, some private jails cannot fill empty cells, leaving some towns wishing they'd never gotten in the prison business. It seemed like a good idea at the time when the west Texas farming town of Littlefield borrowed $10 million and built the Bill Clayton Detention Center in a cotton field south of town in 2000. The charmless steel-and-cement-block buildings ringed with razor wire would provide jobs to keep young people from moving to Lubbock or Dallas. For eight years, the prison was a good employer. Idaho and Wyoming paid for prisoners to serve time there. But two years ago, Idaho pulled out all of its contract inmates because of a budget crunch at home. There was also a scandal surrounding the suicide of an inmate. Shortly afterward, the for-profit operator, GEO Group, gave notice that it was leaving, too. One hundred prison jobs disappeared. The facility has been empty ever since. A Hard Sell "Maybe ... he'll help us to find somebody," says Littlefield City Manager Danny Davis good-naturedly when a reporter shows up for a tour. For sale or contract: a 372-bed, medium-security prison with double security fences, state-of-the-art control room, gymnasium, law library, classrooms and five living pods. Davis opens the gray steel door to a barren cell with bunk beds and stainless-steel furniture. "You can see the facility here. [It's] pretty austere, but from what I understand from a prison standpoint, it's better than most," he says, still trying to close the sale. For the past two years, Littlefield has had to come up with $65,000 a month to pay the note on the prison. That's $10 per resident of this little city. A Resident Burden Is the empty prison a big white elephant for the city of Littlefield? "Is it something we have that we'd rather not have? Well, today that would probably be the case," Davis says. To avoid defaulting on the loan, Littlefield has raised property taxes, increased water and sewer fees, laid off city employees and held off buying a new police car. Still, the city's bond rating has tanked. The village elders drinking coffee at the White Kitchen cafe are not happy about the way things have turned out. "It was never voted on by the citizens of Littlefield; [it] is stuck in their craw," says Carl Enloe, retired from Atmos Energy. "They have to pay for it. And the people who's got it going are all up and gone and they left us... " "...Holdin' the bag!" says Tommy Kelton, another Atmos retiree, completing the sentence. The Declining Prison Population The same thing has happened to communities across Texas. Once upon a time, it seems every small town wanted to be a prison town. But the 20-year private prison building boom is over. Some prisons are struggling outside Texas, too. Hardin, Mont., defaulted on its bond payments after trying, so far unsuccessfully, to fill its 464-bed minimum security prison. And a prison in Huerfano County, Colo., closed after Arizona pulled out its 700 inmates. According to the Bureau of Justice Statistics, the total correctional population in the United States is declining for the first time in three decades. Among the reasons: The crime rate is falling, sentencing alternatives mean fewer felons doing hard time and states everywhere are slashing budgets. The Texas legislature, looking for budget cuts, is contemplating shedding 2,000 contract prison beds. Statewide, more than half of all privately operated county jail beds are empty, according to figures from the Texas Commission on Jail Standards. "Too many times we've seen jails that have got into it and tried to make it a profitable business to make money off of it and they end up fallin' on their face," says Shannon Herklotz, assistant director of the commission. The packages look sweet. A town gets a new detention center without costing the taxpayers anything. The private operator finances, constructs and operates an oversized facility. The contract inmates pay off the debt and generate extra revenue. The economic model works fine until they can't find inmates. In Waco, McLennan County borrowed $49 million to build an 816-bed jail and charge day rates for bunk space. But today because of the convict shortage, the fortress east of town remains more than half empty. The sheriff and county judge, once champions of the new jail, now decline to comment on it. Former McLennan County Deputy Rick White, who opposed the jail, had this to say about the prison developers who put the deal together: "They get the corporations formed, they get the bonds sold, they get the facility built, their money is front-loaded, they take their money out. And then there's no reason for them to support the success of the facility." Two of Texas' busiest private prison consultants — James Parkey and Herb Bristow — declined repeated requests for interviews. The Inmate Market Private prison companies insist their future is sunny. A spokesman for the GEO Group declined to speak about the Littlefield prison, but he sent along a slew of press releases highlighting the company's new inmate contracts and prison expansions across the country. Corrections Corporation of America, the nation's largest private prison operator, says the demand for its facilities remains strong, particularly for federal immigration detainees. New Jersey-based Community Education Centers, which has been pulling out of unprofitable jails across Texas, issued a statement that "the current (jail) population fluctuation" is cyclical. One of the places where CEC is cancelling its contract is Falls County, in central Texas, where a for-profit jail addition is losing money. Now it's up to Falls County Judge Steve Sharp to hustle up jailbirds: "If somebody is out there charging $30 a day for an inmate, we need to charge $28. We really don't have a choice of not filling those beds," he said. Another place where they're desperate for inmates is Anson, the little town north of Abilene, Texas, once famous for its no-dancing law. Today, Jones County owns a brand-new $34 million prison and an $8 million county jail, both of which sit empty. The prison developers made their money and left. Then the Texas Department of Criminal Justice reneged on a contract to fill the new prison with parole violators. The county's Public Facility Corporation that borrowed the money to build the lockups owes $314,000 a month — with no paying inmates. They've got a year's worth of bond service payments set aside before county officials start to sweat. "The market has changed nationwide in the last 18 months or two years. It's certainly a different picture than when we started this project. And so we're continuing to work the problem," Jones County Judge Dale Spurgin says. Grayson County, north of Dallas, said no to privatizing its jail. Two years ago, the county was all set to build a $30 million, 750-bed behemoth twice as big as was needed. But the public got queasy and county officials ultimately scuttled the deal. "When you put the profit motive into a private jail, by design, in order to increase your dollars, your revenues, your profits, you need more folks in there and they need to stay longer," says Bill Magers, mayor of the county seat of Sherman, a leading opponent. When the supply of prison beds exceeds the demand for prison beds, there are beneficiaries. The overcrowded Harris County Jail in Houston, the nation's third largest, farms out about 1,000 prisoners to private jails. Littlefield and most other under-occupied facilities in Texas have all been in touch with Houston. "It really is a buyer's market right now, especially a county our size," says Capt. Robin Kinetsky, who is in charge of inmate processing for the Harris County Sheriffs Department. "They're really wanting to get our business. So, we're getting good deals." Nearby, disheveled and unsmiling men are brought from a holding cell to stand before a booking officer for their intake interviews. The detainees are wholly unaware that they may soon become the newest commodities of the volatile inmate market. Aarti Shahani contributed to this NPR News investigation and report.

January 18, 2011 Marlin Democrat
Falls County Commissioners met in regular session last Monday with a multitude of agenda items to ponder including the non-renewal by CEC to run the Falls County Detention Center. Following the opening of the Falls County Detention Center in 2000, CiviGenics was awarded a contract to provide personnel to run the jail and has done so until Community Education Centers (CEC) acquired CiviGenics in 2007. CEC has chosen not to renew the contract with Falls County and the detention center will come under the direction of Falls County, sometime in April. CEC, which has personnel in many jail facilities in many towns, has moved inmates to other facilities at a lower cost and couldn’t afford to pay the inmate cost at the Falls County facility. “With new facilities being built in the CEC service area, detainees are being housed at a lesser cost than here, so our prisoner count has been declining for several months. CEC.” Said County Judge Steven Sharp. Sharp said that at the last meeting of the Commissioner’s Court, “We are working on creating a budget so we can provide all services at the jail as well as amending the Sheriff’s budget to cover such expenses. “We won’t loose all the outside inmates and will still be able to provide services for the local ones. One good thing to come out of this is that we keep all the profits and not have to pay private contractors.” Jail capacity is 94 – 95 inmates.” Originally, the plan projected that it would take 20 years to pay for the construction of the $3.5 million structure with funds from housing prisoners to defray that cost, but the county was paying thousands of dollars each month to CEC, therefore making no profit. The county has eight more years to repay the cost of building.

September 29, 2009 KWTX
A female guard employed by a private firm that provides security at the Falls County Jail was fired this week after officials discovered she had married a male inmate by proxy. Community Education Centers Warden, Mike Wilson said Chastity Withers, who worked for CEC as an overnight guard at the Falls County Jail, was married by proxy on Aug. 23 in McLennan County to Timothy Hargrove, 31, an inmate who was jailed at the time and who was sentenced this month to 30 years in prison after his conviction on charges of manufacturing of a controlled substance. Wilson said confidential sources led to an investigation and to the discovery of the relationship. Withers was later arrested and charged with prohibited items and substances in a correctional facility. The charge involves a cell phone, but Wilson declined to release more details.

George W. Hill Correctional Facility, Thornton, Pennsylvania
April 15, 2011 Delco Times
Delaware County Deputy District Attorney James Mattera could soon be moving to the county owned George W. Hill Correctional Facility in Thornton, where he would oversee the records department as a first assistant superintendent. The prison saw a string of embarrassing accidental releases last year, resulting in public admonishments from elected officials and the hiring of a prison specialist to help shore up deficiencies. Delaware County Board of Prison Inspectors Solicitor Bob DiOrio said Mattera would be an employee of the privately owned management company that oversees the prison, Community Education Centers Inc. County council Chairman Jack Whelan said there had been some technological improvements made at the prison, but having Mattera as the human element overseeing the operation would also be a benefit. He added that the move could result in a net savings to the county, as Mattera’s replacement at the district attorney’s office would likely earn less than his current $83,000 salary.

February 14, 2011 Delco Times
Three Rastafarians who sued the county-owned prison and its management company in August for gender, racial and religious discrimination recently filed an amended and more narrow complaint in federal court. “The new complaint drops some claims and focuses the case where I think the problem really lies,” said Brian Appel, of the firm Choi and Associates P.C. “I’ve taken out any kind of sex discrimination or gender discrimination, taken out any issues of race.” Appel represents Nigel LeBlanc, Eugene Briggs and Zayid Bolds, three professed followers of the Rastafari movement and former prison guards at the George W. Hill Correctional Facility in Thornbury. The trio originally alleged in a filing in Eastern Pennsylvania District Court that religious, sexual and racial discrimination led to their terminations in early 2009. According to the suit against the prison and its private, for-profit management company, Community Education Centers, Rastafarians are prohibited from cutting the hair on their head, including facial hair. That prohibition conflicted with the male grooming policy for CEC, which fired all three men shortly after taking over operations at the prison in January 2009. Christopher Greeder, spokesman for CEC, said he was unable to comment on ongoing litigation. Community Education Centers’ grooming policy states male guards must be clean shaven, have neatly combed hair and that hair length “shall not extend beyond the collar,” though the suit noted the policy does not specifically say hair must be cut to that length. Female guards with long hair are instructed to pull it up into a bun. According to the suit, each of the former guards did put their dreadlocks into buns pulled tight against the top of their heads, “professionally tied into styles that were neat and clean.” But the former guards said they were constantly harassed for their hairstyles and that working conditions quickly eroded after each began following the Rastafari movement.

December 15, 2010 Philadelphia Inquirer
Two Delaware County jail employees have been suspended after a prisoner was prematurely released last week when they failed to finish reading the bail conditions for the inmate, officials said. At least seven inmates at the George Hill Correctional Facility in Thornbury Township have been mistakenly released this year through paperwork errors or confusion over identities. Officials have acknowledged problems with procedures and paperwork. Christianus Felten, 42, of Upper Darby, is again behind bars after spending a night out. Felten, in jail awaiting trial in an alleged burglary, was approved for electronic home-monitoring after his bail was reduced at a preliminary hearing Dec. 7, according to Robert DiOrio, solicitor for the Delaware County Prison Board. Felten was freed when two jail employees - an intake clerk and a sergeant - did not confirm his eligibility for release with the bail office and released Felten before final approval for home-monitoring, according to officials. "That portion of the paperwork was not read by the officials on duty," said DiOrio.

December 14, 2010 Delco Times
For the seventh time this year, a prisoner at Delaware County prison was released prematurely. Alleged burglar Christianus E. Felten 42, of Upper Darby, was back behind bars within 15 hours after his untimely release Dec. 7, according to officials. But the slipup has prison board officials once again looking into intake and release procedures at the county jail. “I’m certain the prison board will review this matter, as far as the procedures that were not followed, in an effort to avoid similar circumstances in the future,” said Prison Board Solicitor Robert DiOrio. Felten was arrested Nov. 13 after allegedly breaking into a home on Millbank Road in Upper Darby. He was arrested again a day later after briefly escaping from a constable as he was being loaded into a prison van. At his preliminary hearing Dec. 6, Felten’s bail, originally set at 10 percent of $50,000, was reduced to unsecured bail with the condition the he be approved for electronic home monitoring before being released. That’s where officials said the mix-up occurred. The record’s clerk received the paperwork on Felten’s bail reduction, but missed the part about the electronic home monitoring. Felten was released at 9 p.m. Tuesday. The following day, the person with whom Felten was staying called to report that the electronic home monitoring had not been set up and prison officials realized what had occurred and Felten was back in jail by 12:30 p.m., according to officials. Six other prisoners, including a murder suspect, were accidentally released in recent months. All have been recaptured.

October 7, 2010 Delco Times
Confusion over a prisoner’s status led to another early release at the George W. Hill Correctional Facility in Thornbury over the weekend, though it was of a different kind than plagued the prison over the summer. Cyril Devine, 49, of Downingtown, a former oil company executive sentenced to prison in August for child pornography, was set free after serving a weekend at the prison this month. But Devine, who earlier this year pleaded guilty to six counts of possession of child pornography and one count of criminal use of a communication facility, was supposed to serve at least two months. Delaware County Court of Common Pleas Judge James Bradley sentenced Devine to two to six months imprisonment beginning Oct. 1, plus seven years probation. But prison Solicitor Robert DiOrio said Devine showed up at the prison Friday, Sept. 10, with a probation and parole form indicating he was supposed to begin serving weekend sentences. DiOrio said Devine was admitted as a weekender, despite a lack of any sentencing paperwork at the prison, and released the following Sunday. He showed up again on Oct. 1 and was again released the following Sunday. The prison — now in receipt of his actual paperwork from the courts — discovered the discrepancy and recaptured him Tuesday, said DiOrio. The sentencing sheet indicated Devine was to be granted “immediate nonstationary work release,” but no rules or regulations indicated he was to serve weekend sentences.

September 15, 2010 Delco News
Delaware County Council recently called for a complete investigation into the unauthorized release of three prisoners from the county prison since June 14. Two of the inmates are back in custody and federal marshals are looking for the third. Significant changes in prison release procedures are in place at the George W. Hill Correctional Facility in Concord Township, and additional safeguards are being formulated as part of an investigation. “Public safety is county council's top priority and we won't tolerate mistakes when it comes to our criminal justice system and the safety of our residents,” said County Council Chair Jack Whelan. “We have asked for a full investigation of the inmate release procedure. A stricter, more fail-safe policy is already in place with more changes to come as the investigation continues.” Whelan said several county employees were involved in the prison incidents. One was fired and the others disciplined. The George Hill facility, which is the fifth largest county prison in the state, is operated by Community Education Centers Inc., a New Jersey-based company that has run the prison since January 2009. John Reilly, Jr. oversees CEC's operations for the county. He detailed three procedural changes that have been instituted since June 15 and said he has also launched a review of the clerical records process to streamline and strengthen paperwork procedures.

September 3, 2010 Philadelphia Daily News
It's happened again at the Delaware County prison. Yet another inmate was accidentally released this week from the George W. Hill Correctional Facility, county officials confirmed yesterday, making for the sixth such incident there in recent months. Gary Tagland, 21, was discharged Tuesday from the prison - even though he was supposed to be transported back to a New Jersey state prison, where he was doing five years for a robbery in Pennsauken. "I don't know what happened. The prison is going to have to answer that question," said Deputy District Attorney Daniel McDevitt. He said a fax sent to the prison last month should have prevented "this very thing from happening." Tagland, of Cherry Hill, was released the same day that county officials announced they were tightening procedures at the privately run prison in Thornton following the accidental release of five inmates - including an alleged killer from Germantown - in recent months. "We have asked for a full investigation of the inmate-release procedure," County Council Chairman Jack Whelan said in a statement Monday. "A stricter, more fail-safe policy is already in place with more changes to come as the investigation continues." The prison, operated for about $43 million a year by New Jersey-based Community Education Centers, disclosed last week that David Wilson, who was convicted of a firearms offense, and Ateia Polk, who is facing robbery and assault charges, had walked out of the prison due to clerical errors. In June, murder suspect Taaqi Brown, 22, was released by mistake. He surrendered the next day. Wilson hasn't been apprehended. The circumstances of the other two recent mistaken releases were unclear but Prison Superintendent John Reilly Jr., the county official who monitors CEC's performance, said they are back in custody. McDevitt said Tagland was brought to Delaware County from a New Jersey state prison last month to face drug-paraphernalia and motor-vehicle charges from a Springfield arrest last year. He pleaded guilty to the drug charge. "At that point, our case is closed and he should have been returned to New Jersey," he said. Tagland was apparently re-arrested Wednesday by New Jersey authorities after he failed to turn himself in, McDevitt said. It was unclear yesterday what led to the latest error. Reilly said last week that the company has had problems handling and interpreting incoming documents. But in Tagland's case, there should have been no doubt about his status, because the D.A.'s office had faxed a notice to the prison before his arrival, McDevitt said: "It was supposed to be a fail-safe to let the prison know that the guy shouldn't be let go." State Rep. Stephen Barrar, who represents portions of Delaware and Chester counties, said last week he plans to introduce legislation requiring public notification of escapes and accidental discharges. CEC said yesterday that it is "reviewing and rapidly implementing major changes."

September 1, 2010 Delco Times
Delaware County Council Tuesday called for a complete investigation into the unauthorized release of three prisoners from the county prison since June 14. Two of the inmates are back in custody and federal marshals are looking for the third. Significant changes in prison-release procedures are in place at the George W. Hill Correctional Facility in Thornbury, and additional safeguards are being formulated as part of an investigation into the inmate-release process. “Public safety is county council’s top priority and we won’t tolerate mistakes when it comes to our criminal justice system and the safety of our residents,” said council Chairman Jack Whelan. “We have asked for a full investigation of the inmate-release procedure. A stricter, more fail-safe policy is already in place with more changes to come as the investigation continues.” Whelan said several county employees were involved in the incidents. One was fired and the others were disciplined. “And quite frankly, they should have been,” Whelan said. “I can expect that you are not going to see anything like this in the future.” The prison, which is the fifth-largest county prison in the state, is operated by Community Education Centers Inc., a New Jersey-based company that has run the facility since January 2009. Prison Superintendent John A. Reilly Jr. detailed three procedural changes that have been instituted since June 15 and said he has also launched a review of the clerical-records process to streamline and strengthen the paperwork procedures at all levels.

August 31, 2010 Philadelphia Inquirer
Kelly DeLuca was talking on the cell-block pay phone after 8 p.m. at the Delaware County prison when she got unexpected news: She could go home. "I'm not supposed to go home," DeLuca said she told the guard. It was May 6, and she had nine days of an 18-day sentence left to serve for violating probation on a criminal-trespass charge. "Not my . . . problem," came the response, said the 43-year-old Havertown mother, who says she was told to hang up, pack up, and get ready to be discharged in time to catch the 9:40 p.m. SEPTA bus to Chester. She said she was not allowed to make any calls and was given two bus tokens. An hour later, DeLuca, a well-educated woman whose life spiraled downward because of alcohol, found herself standing on a Chester street corner, dressed in sweatpants and blue fuzzy slippers, with no cash and one token left. DeLuca is at least the fourth prisoner in recent months to be mistakenly released from the state's only privately run county prison - the George W. Hill Correctional Facility. "It is obviously very embarrassing and completely unacceptable," County Councilman Andy Lewis said Monday. Until hearing from a reporter about the DeLuca case, he had been aware only of three others, including a murder suspect who turned himself in. Two are still at large, one convicted of firearms violations, the other charged with robbery. "We have to make sure it does not happen again," Lewis said. Community Education Centers Inc. of West Caldwell, N.J., which has operated the county prison since January 2009, has attributed the three previous mistaken releases, all since June, to paperwork errors. "The company is working very closely with the county to review its policies and procedures," Christopher Greeder, a spokesman for CEC, said Monday. He said he was not aware of DeLuca's mistaken release. County Executive Marianne Grace said Friday that the County Council would conduct an investigation and review all policies and procedures surrounding prison releases. The Thornbury Township facility has a budget of $44 million from the county and houses about 1,800 inmates. The District Attorney's Office said Friday that its criminal investigation division also would investigate mistaken releases. DeLuca's attorney, Robert C. Keller of Havertown, confirmed his client was mistakenly released early.

August 28, 2010 Philadelphia Inquirer
The Delaware County executive vowed Friday to have a "serious discussion" of ways to improve security at the county prison, from which three inmates were mistakenly released this summer. Marianne Grace said the county was calling for a complete investigation and review of all policies and procedures surrounding prison releases. "Public safety is our number-one priority," Grace said. She said that on Monday, she would set up a meeting between prison and county officials to address the issue, but added that no written report was likely to be made public. Grace called inmate-release procedures a "multilayer process that is complex" and involves a number of departments, including the county's Office of Judicial Support and the company that operates the prison. "The human errors which are occurring are unacceptable," Grace said. Grace said she knew of three prisoners' being mistakenly released this year and added that she was surprised to learn that media reports had documented as many as five. Grace also said she did not know that, according to a report on the state Department of Corrections website, two prisoners walked away last year. The District Attorney's Office said Thursday bench warrants had been issued for Ateia Polk, 32, of the 4500 block of North 11th Street, and David Jeffrey Wilson, 19, of West 22d Street in Chester. Both were freed because of paperwork errors. On June 14, murder suspect Taaqi "Fame" Brown of Germantown was released after he was confused with another inmate with a similar name. He turned himself in a day later. Community Education Centers Inc. (CEC) of West Caldwell, N.J., has operated the country prison since January 2009. Officially known as the George W. Hill Correctional Facility, the Thornbury Township prison operates on a budget of $44 million from the county and houses about 1,800 inmates. It is the only privately run county prison in the state. Calls Friday to John J. Clancy, chief executive officer of CEC, for comment were not returned. Prison Superintendent John A. Reilly and Warden Frank Green also did not return calls; nor did John Hosier, chairman of the board of the Delaware County Board of Prison Inspectors, and County Solicitor Robert DiOrio. The District Attorney's Office said Friday that its criminal investigation division would also investigate the mistaken releases. Susan Bensinger, a spokeswoman for the Department of Corrections, said county prisons "set and follow their own policies and procedures." The state inspects prisons regularly. Delaware County passed its most recent inspection, in 2008. It is scheduled for another by the end of the year.

August 27, 2010 Philadelphia Daily News
The privately run George W. Hill Correctional Facility has been struggling this summer with what you might call a prisoner-retention problem. Delaware County authorities discovered this month that two inmates had been mistakenly released from the prison due to clerical errors. Neither has been heard from since. It's the fifth time that this has happened in recent months, according to a county official. The prison, operated by New Jersey-based Community Education Centers for $43 million a year, made headlines in June when accused killer Taaqi Brown walked out because of a records snafu. Brown, 22, of Germantown, turned himself in the next day, and the CEC clerk who let him out was fired. Now, the U.S. Marshals Service Fugitive Task Force is searching for David Wilson, 19, of Chester, who was convicted in July of a firearms offense, but was released from the prison Aug. 4, two weeks before he was to be sentenced. Federal authorities also are looking for Ateia Polk, 32, of Philadelphia, who is on the lam after the prison released her last month prior to her trial on robbery, assault and related offenses. Polk is accused of stealing jewelry from an Upper Darby beauty parlor and threatening to stab the owner with a hairpin. "We're not pointing the finger at anybody," said prison Superintendent John Reilly Jr., who oversees CEC's performance on the county's behalf. "This is an in-house problem that needs to be resolved here." Reilly said that Polk was released because a prison employee misinterpreted a judge's order. The clerk apparently thought that "no bail" meant that Polk could leave without posting bail. "She just made a colossal mistake," Reilly said. In Wilson's case, the prison never received a fax from the county's Office of Judicial Support stating that his bail had been revoked. But Reilly said that a prison employee should have double-checked that he was cleared for discharge. "You need to do a more thorough search," he said. "The bottom line is, you are responsible when you open the back door." Reilly said that the prison's records department has been having trouble handling the thousands of documents it receives every week. He described it as a systemic problem that CEC is working to correct. "They don't have a process in place to accurately accept all these documents," Reilly said. "They just come flying in. There's a real breakdown in their process at that point." In some cases, such as Polk's, overwhelmed employees are simply misreading the paperwork. "It's a longstanding problem with the records department being able to process the volume," Reilly said. CEC took over the operation of the county prison last year after the GEO Group abandoned its contract due to "financial underperformance and frequent litigation." Located in Thornton, it is the only privately run county prison in the state. CEC spokesman Christopher Greeder declined to elaborate on the discharged inmates, other than to say that "the matter is under review and the company is working closely with the county." "This is the first crisis of the CEC era, and we're going to see how good they are," Reilly said. "They'll have to get through it."

July 31, 2010 Philadelphia Inquirer
Three former prison guards have sued the Delaware County prison, alleging religious, sexual, and racial discrimination after they were fired for not cutting their hair, which they say their religion forbids. Nigel LeBlanc, Eugene Briggs and Zayid Bolds, all of Philadelphia, are followers of the Rastafarian movement, which prohibits cutting hair on the head, including facial hair, according to their lawsuit. They were asked to choose between their jobs and their religion, said Jennifer L. Zegel, attorney for the men. The prison is run by the New Jersey-based Community Education Centers (CEC), which took over from GEO Group on Jan. 1, 2009. The men were fired seven days later for failure to comply with the company's grooming policy.

June 17, 2010 Delco Times
Taaqi Brown’s taste of freedom lasted a little more than 12 hours. It likely will take a lot longer than that for Delaware County prison officials to get the bad taste out of their mouth from Brown’s sojourn. The county was jolted early Tuesday morning with news of an “escape” from the George W. Hill Correctional Facility. Uh, not exactly. As we learned a few hours later, Brown did not escape. He walked out the front door. After he was given his walking papers by prison employees. That’s how a man who police believe is responsible for opening fire on a crowded playground, in the process killing an unintended victim, was returned to society. Make no mistake, Taaqi Brown was not incarcerated for a minor offense. He is an accused killer. He was confined to 22-hour-a-day lockup in the Delco jail. He wore the distinctive red jumpsuit that identifies him as a high-risk inmate. And yet he was still given his walking papers and allowed to stroll – or perhaps walk as quickly as his legs would carry him – to his girlfriend’s black SUV, which was waiting for him outside. That’s because Brown had learned earlier in the day that he was going to be cut loose. He contacted family members, who made sure Brown had a ride when he became a free man. Prison officials are now referring to the mistaken release as a paperwork snafu. A simple human error. You can say that again. For his part, District Attorney G. Michael Green didn’t sound as if he was totally convinced. While announcing that Brown’s brief respite had earned him a felony escape charge, Green insisted, “I want to know everything that happened here.” He’s not the only one. Here’s what apparently went down. An inmate named Brown was in fact supposed to be released. But it appears that it was Tarriq Smith-Brown, Taaqi’s brother, who had done time on a minor drug charges, who was supposed to be cut loose. If that sounds a little hard to believe, you’re not the only one who feels that way. Neither Green nor Prison Superintendent John Reilly, while indicating that it appeared to be a simple clerical error, were willing to rule out something else. Something more sinister. And they vowed to get to the bottom of it, including any possibility that Brown got an assist from inside the prison. Reilly indicated that the records clerk involved in Brown’s release apparently failed to double-check the name while preparing the paperwork that was supposed to free Tarriq Brown but instead opened the door for Taaqi. It strains credulity that no one at the prison realized that a suspected killer who was isolated in the prison as a high-risk inmate was simply going to be allowed to walk out the front door. At worst it points to a serious security breach at the facility. But even if it was a simple clerical error, it fuels public distrust in the operation of the prison, which continues to be run by a private firm, Community Education Centers. The county has had mixed results at the prison since privatizing the operation when it built the new jail several years ago. The prison was first run by Wackenhut, which then was transformed into GEO, and for the past few years by CEC. Lawsuits, staffing and other problems have been persistent issues. Reilly, who noted the facility has had more than 3,000 discharges this year without incident and 9,500 last year, knows all too well that when the prison does things right, it doesn’t get attention. The mistaken release of a suspected killer does. It does things like spark a countywide manhunt. It puts citizens on edge. It fosters distrust in the county’s ability to keep its citizens safe from criminals. “We need to solve the problem,” Reilly said. He’ll get no argument here. This can’t happen again. County and prison officials need to make sure it doesn’t.

June 16, 2010 Philadelphia Daily News
It wasn't "Prison Break" but, rather, prison breakdown in Delaware County Monday night, when a murder suspect was accidentally set free from the George W. Hill Correctional Facility. In an equally astonishing move, the prisoner, Taaqi Brown, who could face life in jail if convicted of first-degree murder, turned himself in yesterday and willfully went back to prison less than 24 hours after he was released. Now detectives are investigating if Brown's release was the result of human error or, perhaps, the result of careful, human calculation. Upper Darby Police Superintendent Michael Chitwood, whose department arrested Brown, 21, last year in the murder of 19-year-old Aaron Kearney, said he got the call about Brown's release about 10 Monday night. "My first reaction was 'What the f---!' It's not like he's in for DUI," Chitwood said. "My second was to ask 'How did this happen?' " Chitwood said he was later informed that Brown's brother, Taariq Brown, 23, who also was at the prison, was supposed to be the inmate released yesterday. When he was released instead, Taaqi Brown, of Germantown, called his girlfriend, who picked him up, Chitwood said. Brown's taste of freedom sent officers from numerous agencies on an all-out manhunt yesterday. But about 11 a.m., Brown's father contacted an inspector he knew in Philadelphia's Northwest Detectives and said his son wanted to surrender, according to police. Chitwood said Brown and his father were worried that he'd be shot to death by cops. "It was the best thing for me to do," Brown told NBC 10, which rode with him as he surrendered. "I would hate for police to run up on me and feel as though I'm armed or I got a weapon on me." Brown maintains his innocence in the video and in a surreal, media-saturated moment, was recorded listening to a KYW Newsradio broadcast about his "escape." Brown is charged with shooting Kearney to death in broad daylight on a crowded Upper Darby playground on May 2, 2009. Delaware County District Attorney G. Michael Green said Brown would face an additional charge of escape because he knew that he should not have been released and did not speak up. He acknowledged that someone should have noticed that Taaqi Brown was in jail without bail, that he was in 22-hour lockup and that he wore a different-colored jumpsuit - red - to denote his alleged violent crime. "There were an obvious number of indicators that should have set off bells and whistles," Green said. Prison Superintendent John Reilly Jr. said it was too early to determine whether Brown's release had been an accident or perhaps an inside job. "We can't rule out that these two didn't try to orchestrate it," Reilly said. "I can't rule out that they didn't get the records girl to submit Taaqi Brown's data as a discharge." County detectives were planning to interview the 23-year-old records clerk who was hired three months ago, as well as corrections officers and "anyone in the prison that could have facilitated the discharge process," Reilly said. Even though the brothers' names are similar, the records clerk should have noticed that they had a different inmate number, birth date and court-identification number, he said. "This could have been a colossal mis-hire," Reilly said. "If that's what it is, we'll address it." The George W. Hill Correctional Facility is the only privately run county prison in the state. Last year, New Jersey-based Community Education Centers (CEC) replaced the GEO Group as prison operator. The records clerk is an employee of CEC. From 2002 through 2004, three inmates were mistakenly released from the county prison. In one instance, a 6-foot-4, 250-pound black man named Markish Thomas was released instead of a Mike Thomas, a 5-foot-10, 165-pound white man with blond hair and blue eyes.

March 6, 2010 Philadelphia Enquirer
Saying it is owed $7.3 million, Aramark Corp., the Philadelphia food-services provider, has sued a New Jersey operator of correctional facilities. In the suit, Aramark contends Community Education Centers Inc., of West Caldwell, N.J., has been in default on bills since at least June 2008. Locally, Aramark services Community Education Centers facilities in Philadelphia, Delaware County, Reading, and Trenton. Aramark's lawsuit, filed Feb. 18 in U.S. District Court in Philadelphia, said Community Education Centers was overdue on $5.2 million of the total, and it requested that a judgment, including interest, costs, and attorney's fees, be entered in its favor. In an e-mailed statement yesterday, Community Education Centers said it "does not comment on pending litigation except to say that the two companies are in negotiations regarding the matter." Community Education Centers is one of a number of companies considered likely to bid on a prison privatization contract in Camden County. Last year, a unit of the company bought options on land in Camden as a potential site for a new prison, but the site has been ruled out by county freeholders because of neighborhood protests. The privately held company, which operates in 19 states, employs 4,500 and services nearly 30,000 individuals, did not comment specifically on the proposed privatization of Camden County's prison system. Among Community Education Centers' investors is Philadelphia private-equity firm LLR Partners. The firm's investment fund, LLR Equity Partners II L.P., in 2007 bought $53 million worth of preferred stock, according to a regulatory filing. LLR cofounder Seth Lehr, who is on Community Education Centers' board of directors, said the firm does not comment on companies in its portfolio.

November 19, 2009 Delco Times
A union representing approximately 300 employees at the county-owned George W. Hill Correctional Facility in Concord recently reached a three-year contract agreement with the private company the county has hired to run day-to-day operations at the prison. Members of the Delaware County Prison Employees Independent Union voted 155-14 Monday to accept the contract, which offers a 12 percent wage increase over three years, retroactive to June 1. The contract expires June 2012. Union President Michael Pelleriti said his members were not happy with the fact that they now have to pay $36 per month for single-coverage health care, but the contract does allow members to opt out of hospitalization insurance. Overtime and vacation time will now count as hours worked under the contract, said Pelleriti, and there is now a disciplinary arbitration procedure in place. “This gives the members protection against unjust terminations,” he said. “The negotiations were very difficult and tedious, but we did come away with something we feel we can live with for the next three years.”

July 18, 2009 Philadelphia Inquirer
Back on the street after a record-setting 14-year jail sentence for contempt, H. Beatty Chadwick is learning that he needs a quick update on the 21st century. Like, what's with those cell phones everyone has plugged to their ears? What's with the Internet? And does he get a PC or a Mac? As Chadwick, 73, rejoins the "land of the living," he's discovering all the things that must be done in what has become a "complicated society." In an interview, he also launched into an unprompted critique of the 1,800-inmate Delaware County jail. The former Main Line corporate lawyer was jailed by a Delaware County Court judge in April 1995 for failing to turn over $2.5 million in alimony to his ex-wife, Barbara "Bobbie" Applegate. The couple were married for 15 years. Chadwick contended that he lost the money in a bad overseas investment. The judge believed Chadwick had hidden the money from his ex-wife and ordered him jailed until he produced the millions. Court-ordered investigations conducted since he went to jail have turned up no money. Petitions for release over the years were denied by numerous judges, who believed he had the money. Last week, President Judge Joseph P. Cronin Jr. ruled that keeping Chadwick in jail had lost "coercive effect," even though he thought Chadwick "had the ability to comply." Standing outside a Lancaster Avenue cafe in Wayne this week, Chadwick looked at a street he no longer recognized. The traffic, he said, is worse. He wondered what had happened to a small grocer he once frequented. Chadwick has e-mail and Internet service to set up - neither was in wide use when he went to jail - and is busy with mundane tasks: retrieving belongings from storage, getting the electricity turned on in his Wilmington apartment . . . and changing all his subscriptions to a new address. Chadwick was an avid reader in jail, devouring the Wall Street Journal and the Economist, among others. He was one of about 150 inmates who held a job at the prison. His first position, assigned a few years after he arrived, was as the assistant to the official who classified prisoners upon entry as minimum, medium, or maximum security. For the last six years, Chadwick worked in the prison library, where he helped inmates with letter-writing and tutored for GED exams. He also volunteered legal advice. Chadwick said he was "shocked" how poorly educated some inmates were. "Writing was one of the hardest things," said Chadwick. "The idea of writing really flummoxes a lot of people." Some inmates he encountered dropped out of school in the sixth grade and could only read on a second-grade level. Others did not know their multiplication tables. "One thing I missed in jail was not being able to cook," said Chadwick, who read Bon Appetit while imprisoned. His first meal on the outside was a veggie taco from Ruby Tuesday. Next up was a roasted chicken at home. Cable TV? "I haven't tried [getting] that yet," said Chadwick, who in jail got by with rabbit ears and a handful of channels. Back in 1995, a good system had about 50 channels. Pay-per-view was not commonly used. Chadwick says he was lucky that his son, William, who lives in King of Prussia, is helping with the transition and providing transportation. "If I didn't have him, I'd be in great difficulty," he said. The two grew closer while he was in prison. Chadwick says he has seen other inmates who have had a difficult transition to post-prison life. When first released, prisoners without support from family or friends are dumped on a Chester street corner with "nary a penny" and must fend for themselves, inmates told him. "They do nothing about trying to get people jobs, housing, or even their next meal," Chadwick said. At one point, Chadwick said, the prison dropped former inmates at a mall, but this was halted after mall managers complained that the former inmates were stealing from stores, he said. For most of Chadwick's tenure, the county's George W. Hill Correctional Facility was run by the GEO Group. Community Education Centers of New Jersey took over the contract in January. Bill Palatucci, a spokesman for Community Education Centers, said policies, including release procedures and the maximum jail population, are set by the county. "We are simply acting as their agent," Palatucci said. Superintendent John A. Reilly Jr. did not return a call for comment. Linda Cartisano, County Council chair, did not return calls. Over the years, Chadwick had a number of cellmates. He said one man, unable to raise $500 bail, spent six months waiting to plead guilty to drug possession. He said the prison was often overcrowded, with three prisoners sometimes housed in cells meant for two. He never had more than one cellmate, he said.

May 14, 2009 Delco Times
Two corrections officers at the county-owned George W. Hill Correctional Facility in Concord have been suspended pending an investigation into a fracas May 3, prison officials have confirmed. Details were still vague Wednesday with an in-house investigation ongoing, but facility Superintendent John Reilly said there was an allegation that Sgt. Matthew Talley had beaten an inmate. The district attorney’s Criminal Investigation Division is also investigating, said spokesman Michael Mattson. A letter to the Daily Times from another inmate who claimed to have witnessed the event described Talley savagely beating a handcuffed man until he could no longer stand on his own. Talley’s attorney, Joe McIntosh, said the man had attacked another officer and his client’s actions “were defensive as a result of a combative inmate.” “We cooperated and did an interview with CID and it is our position that any actions on the part of Mr. Talley were justified by the inmate’s actions,” said McIntosh. No charges had been filed as of Wednesday. Talley and Corrections Officer Mark Lombardo have been suspended without pay pending the investigation. There was no telephone number listed for Lombardo. Bill Palatucci, spokesman for New Jersey-based Community Education Centers Inc., the for-profit company that took over prison operations in January, said the company is aware of the investigation and will “actively pursue it,” but could not comment further.

December 22, 2008 Philadelphia Enquirer
AT ONE END of Delaware County's rekindled debate over prison privatization, you'll find Wally Nunn, a tough-talking fiscal hawk and former county councilman. At the other, Fay Kallenbach, a bereaved mother. The George W. Hill Correctional Facility is ground zero. Nunn led the 1995 effort to privatize the county jail, outsourcing its operation to the GEO Group, a multinational corrections corporation. He stands by his decision today, saying the move cut government waste and saved taxpayers millions of dollars – including the more than $30 million the county saved by hiring GEO, then called Wackenhut Corrections Corp., to build the current prison in 1998. "It's a success right there, by definition," Nunn said. Fay Kallenbach has a different perspective. She says privatizing the prison has put inmates in the care of a money-hungry "machine" that cuts corners anywhere it can. Her son, comedian Kenneth Keith Kallenbach, died in April of complications from cystic fibrosis while in prison custody. She says he didn't receive the crucial treatment that had kept him alive for 39 years. "They definitely killed my son," she said of Florida-based GEO. The deep philosophical divide between Kallenbach and Nunn is typical when it comes to prison privatization, a love-it-or-hate-it concept that pits labor unions against politicians and corporate leaders against inmate-advocacy groups. Regardless, if Nunn is considered Delaware County's "father of privatization," his first born remains an only child in Pennsylvania – and there have been some growing pains lately. In the 12 years since the county handed the jailhouse keys to GEO, no other county in the state has followed its lead. Now, the company is terminating its $40-million-a-year contract there, ridden out of town by an onslaught of lawsuits and inadequate profits. A new firm takes over on New Year's Day. All about the $$$ -- Prison Superintendent John Reilly Jr. oversees GEO's performance at the 1,883-bed lockup in Thornton, and he doesn't shy away from discussing the good, the bad and the ugly. There has been plenty of each, from huge cost savings and indemnification from civil-rights lawsuits, to filthy showers and dead inmates. The cost of operating the prison - nearly $45 million when you factor in the superintendent and his staff – is the single largest expenditure of county tax dollars in the budget. It is expected to eat up 15 percent of the $303 million budget next year. But GEO has run the prison cheaper than the county ever could, Reilly said. And outsourcing still saves the government an estimated $3.2 million a year, according to Delaware County Executive Director Marianne Grace. By having Reilly and his staff on the premises, the county's version of privatization is ideal because the government is able to keep an eye on GEO and implement hefty fines - more than $700,000 this year - when the jail is understaffed. "Our security, maintenance and food service is similar to, and in some instances maybe better, than when the county ran it," Reilly said. Proponents of privatization say profit-driven companies can eliminate patronage jobs, play hardball with the labor unions and find new efficiencies without a substantial drop-off in services. Government officials "tend to hire people that have worked on their campaigns or political-patronage people," Nunn said. "Corporations tend to hire people that are competent and capable. They can manage more effectively than a public entity can." Critics say the profit incentive is a double-edged sword, and that the industry makes its money on the backs of inmates and guards by reducing personnel costs and cutting back on inmate care. "I don't trust them as far as I can throw them," said Ken Kopczynski, executive director of the Private Corrections Institute and a lobbyist for the Florida Police Benevolent Association, a union that represents police and correctional officers. "All those millions of dollars they are making that are going into corporate executives' pockets should have been put into inmates services," he said. Delaware County officials say they are generally satisfied with GEO's performance here since 1996, with one large caveat: The medical services in the prison have, at times, fallen woefully short. Employee turnover in that department has been extremely high in recent years, Reilly said, and the company has gone through eight health-services administrators since 2004. As a result, the daily "pill call" for inmates, for example, is sometimes run by nurses who are incompetent or overworked, he said, and the backlog of prisoners waiting for medical attention can exceed 400 cases. "The medical department has underperformed here," Reilly concedes. GEO has spent an inordinate amount of time and money fending off federal lawsuits, including wrongful-death cases. The frequent litigation is one of the main reasons the company is bailing out on its contract next week. In 2006, the company agreed to pay $100,000 to the family of Rosalyn Atkinson, a 25-year-old mother of two who died from a toxic dose of a blood-pressure drug while in prison custody. In October, GEO agreed to an undisclosed settlement in the case of Cassandra Morgan, 38, who died in 2006 of complications from an untreated thyroid condition while jailed on a shoplifting charge. GEO also paid $125,000 in 2005 to the family of a prisoner who hung himself with his bootlaces and agreed to a $300,000 settlement in 2000 involving another suicide. Fay Kallenbach and her attorney are awaiting more medical information before deciding whether to move forward with a lawsuit on behalf of her son, a longtime member of Howard Stern's "Wack Pack." Prison officials say they are not at fault in his death. While the Delaware County prison was far from a utopia when it was run by the county - seven guards were convicted of federal charges stemming from inmate beatings in 1994 - GEO's correctional officers have compiled a lengthy rap sheet since the jail was privatized. This year a K-9 officer pleaded guilty to having sex with an inmate in his pickup truck, and a guard admitted to sending a forged letter to the state parole board so her boyfriend - a convicted murderer - could move in with her. In 2006 the jail's former work-release supervisor, who is now registered under Megan's Law as a sex offender, pleaded guilty to sexually assaulting an inmate, and a guard pleaded guilty in federal court last year to conspiracy to commit bank robbery. Two other guards were convicted of participating in a 2002 attack on an inmate who claimed that he was handcuffed and pummeled with a basketball and that his pants were pulled down. That inmate's attorney, Jon Auritt, has said the incident reminded him of "Abu Ghraib, except without the dogs." GEO later paid an undisclosed settlement in that case, though. Prison staff incorrectly released three inmates between 2002 and 2004, and in 2006, GEO agreed to pay a settlement to an innocent man who sued the company because he was imprisoned for more than 40 days. It was a case of mistaken identity. GEO officials declined to be interviewed for this story, as did state Rep. John Perzel, R-Phila., a paid member of its board of directors. The company did not admit any wrongdoing in the lawsuits it settled. Pa. counties unreceptive -- In 1998, the state Supreme Court approved the privatization of the Delaware County prison, ruling against the prison guards' union, which had filed suit to block the outsourcing. At the time, labor leaders fretted that the ruling would pave the way for other counties to hire firms to run their own jails. That never happened. While privatization has taken off in other states, particularly Texas, the George W. Hill Correctional Facility remains the only privately-run county prison in Pennsylvania, largely due to strong union resistance, according to Richard Culp, a prison privatization expert and professor at the John Jay College of Criminal Justice in New York City. "It's a matter of labor costs, pure and simple," said Culp, who has worked as a consultant for the Delaware County Board of Prison Inspectors. Beaver County tried to privatize its prison in 2006, but was bombarded by union opposition. The county lost a ruling by an arbitrator, which was upheld in Common Pleas Court, according to county Commissioner Charles Camp. Beaver County officials decided not to appeal the case because the legal bills were getting so high, he said. "We had everyone coming at us," Camp said of the unions that fought the privatization proposal. "It would have saved us a million bucks a year," he said, adding that the county is now facing a $2 million budget deficit and is planning layoffs. Large corrections companies increasingly are looking to the federal government for their profits, and U.S. Immigrations and Customs Enforcement and other federal agencies have been expanding their use of private companies in recent years, Culp said. While Culp recommended that counties and other government agencies keep a short leash on those firms – as Delaware County does – he said the industry has become more "professional" since the mid-1990s. "I think the market has shaken out a lot of the underperformers and poor performers and people that got into it to make a fast buck," Culp said. The future is CEC -- Community Education Centers (CEC), a smaller, privately-held company that specializes in inmate re-entry services, will replace the GEO Group on Jan. 1 at the Delaware County prison. Based in West Caldwell, N.J., CEC operates county prisons in Texas, Arizona and Ohio, as well as treatment centers within publicly-run prisons. In Philadelphia, it runs Hoffman Hall, a residential re-entry center for city inmates that opened in July, and Coleman Hall, which runs a work-release program for state inmates. William Palatucci, a CEC senior vice president, said the Delaware County prison will become the largest county jail in the company's network. Most of the existing GEO guards will keep their jobs, and county officials say that guards that once worked for GEO are interested in coming back now that the company is leaving. CEC made headlines in 2004 when a Coleman Hall resident was shot to death in his room, and the company is being sued by the Pennsylvania Institutional Law Project on behalf of several inmates who said they were denied adequate medical care there. Palatucci declined to comment on the litigation, but said the company planned to bring to the Delaware County prison a "renewed commitment to quality operations." "I think competition is good for everybody. It keeps the public sector and private sector on their toes," he said. "At the end of the day, that's good for the taxpayer." Robert Eskind, spokesman for the Philadelphia Prison System, said the city is "pleased so far" with CEC's performance at Hoffman Hall. County officials say CEC could be a better fit than GEO at their jail, particularly because the company has experience in reducing recidivism. Overcrowding has long been a problem there. John Hosier, chairman of the county Board of Prison Inspectors, is optimistic about the changing of the guard, but warned against unrealistic expectations. "We can hope for the best," Hosier said, "but it is a jail."

October 24, 2008 Philadelphia Daily News
The Delaware County Board of Prison Inspectors didn't have much of a choice yesterday in deciding which company would run the George W. Hill Correctional Facility next year. Only one firm in the country was willing to assume the $40 million annual contract left behind by the Florida-based GEO Group, which is skipping town amid a flurry of costly lawsuits and an inability to turn a substantial profit at the 1,883-bed county lockup. The five-member board awarded the contract to Community Education Centers (CEC), a smaller company that specializes in inmate re-entry programs and, according to its Web site, "believes in the opportunity for redemption" and providing "second chances" to ex-offenders. John Reilly, the jail's acting superintendent, who oversees GEO's performance on the county's behalf, said that CEC will begin managing the prison on Jan. 5 and is expected to retain most of the 500 GEO employees. The prison, located in Thornbury, has been operated by GEO, formerly Wackenhut Corrections Corp., since 1996 and is the state's only privatized county jail. The cost of running the prison - about $43.8 million this year - is the single largest expenditure of county tax dollars in Delaware County's $316 million annual budget. But officials say that the public-private partnership has saved taxpayers millions. After getting word in August that GEO was bailing out on its contract, which ran through 2009, the prison board asked 11 companies if they wanted to give it a shot.

Jack Harwell Detention Center, McLennan County, Texas
June 14, 2010 Waco Tribune
After four months of sitting idle, the county’s new jail is finally beginning to take in inmates. Community Education Centers, the New Jersey-based company managing the jail, will begin moving about 300 inmates from the downtown jail to the 816-bed Jack Harwell Detention Center today. About 100 Harris County inmates also will be transferred to the new jail this week. CEC Warden Mike Wilson said it will take three to four days to transfer all the inmates. Up to 50 inmates will be moved at a time — about 100 per day — using three vans and two buses. “You have to get them all booked in and classified correctly so that they are placed in the right wing, and that takes some time,” Wilson said. “You can only process so many in a day.” In the weeks leading up to the official opening, CEC staff focused on small details to make sure everything runs smoothly today. The staff prepared hundreds of “bedrolls” — a pillowcase, sheet, face towel and washcloth rolled into one — that will be given to the inmates at booking. Jailers also hand-numbered each rubber pillow and mattress for the beds to track them. One of the eight-bed cells was laid out as a model setup, from the bed essentials to an unopened box of checkers, dominoes and deck of cards stacked neatly on the dining table. Yellow logbooks are stacked on a monitoring desk in the central hallway for jailers to record interaction with inmates and the operation of the jail. Maintenance workers also were busy getting the building in shape, from routine cleaning to installing napkin dispensers in the medical exam rooms. “There’s a lot of little things that we have to think about and take care of before we open,” Wilson said. Organization has been the key. Everything from office and cleaning supplies to jailer radios and cell keys is arranged in neat rows for easy access and use, a system Wilson plans to keep in place after the jail begins operations. “That’s the best way to keep up with everything and make sure we have what we need,” Wilson said. The jail also received some extra protection for a smooth opening. Wilson said a group of local pastors toured the jail and visited the chapel where church services will be held, then blessed the facility. Opening delays -- The Jack Harwell Detention Center jail was finished in February. The jail originally was planned to help solve overcrowding issues and an expanding female inmate population at the neighboring McLennan County Jail, plus earn additional revenue from housing state and federal prisoners. But the county’s jail population is now below its maximum capacity of 931, and federal agencies are pulling back plans to house inmates in local facilities. The facility was counting on that revenue to repay $49 million in bonds that financed the jail’s construction, potentially putting the county’s bond rating at risk if the payments could not be made. The county voted last month to temporarily shut down the downtown jail and transfer the inmates to the Harwell center. The move allows CEC to use the money taken in for housing inmates at the downtown jail — $3.5 million in the 2009 fiscal year — and apply it to the debt on the new jail. The county made roughly $700,000 on the housing contracts in fiscal 2009. It also means the county would miss as much as $71,000 in net monthly earnings from its share in the housing agreements for the downtown facility. CEC also agreed to pay the county $40,000 for each month the downtown jail is closed. The move is in effect only through Dec. 31 or until the Harwell center reaches 90 percent capacity, whichever comes first. After that, CEC is expected to move inmates back to the downtown facility.

May 14, 2010 KXXV
McLennan County's new Jack Harwell detention facility was completed in February of this year, but now its 816 beds remain empty. The solution is to transfer the entire population of the downtown jail to the brand new facilities on Highway 6. The move is aimed to attract more outside contracts to send inmates to the Harwell facility, and at the same time begin generating revenue from the new jail in order to begin paying back the $49 million in bonds it cost to build. But it also means losing revenue generated by the downtown jail; revenue which goes to the county's general fund, and belongs to the taxpayers. Ken Witt, president of the McLennan County Sheriff's Office Association, says the action doesn't do anything to create new revenue. "It's not going to matter whether you transfer the downtown out there or just pay it straight. It's going to be the money that was originally already generated and it's not going to be new money," Witt said. Community Education Centers, the company charged with managing the jail, has agreed to pay the county $40,000 a month to mitigate the nearly $60,000 in revenue the downtown jail was earning. But some, like TEA Party member Marie McClellan, are afraid the agreement is too complex for taxpayers to understand. "This is our money. I'm not certain who authorized this and where this is going. Is this a business venture? Are the taxpayers on the hook for this? If they can't find the population who pays for this, eventually?," McClellan said. The Harwell unit will have until December to reach 90 percent occupancy, about 734 inmates, before the downtown jail can be reopened and begin generating revenue once more. But what happens if the beds still aren't filled? Precinct One commissioner Kelly Snell, who voted against the action, says it's time for a Plan B. "Not only have we spent $49 million, but now we're getting less money than we projected to get to start with. Now we really need to get an exit plan, because like I said today, what happens if this don't work?," Snell said. McLennan County Judge Jim Lewis told News Channel 25 by phone that Harris county and a dozen other entities have already pledged to send inmates to the new jail, and he hopes to have both jails full and making money within a few months.

May 6, 2010 Waco Tribune-Herald
The county’s treasurer is concerned taxpayers could be forced to repay construction bonds on the new jail if the company hired to run it cannot. While the company that evaluates the credit risks of proposed bonds agrees with this view, confusion remains among county officials over whether the county will have to pay for a facility that was to be built at no cost to taxpayers. The Jack Harwell Detention Center was built using $49 million in project revenue bonds issued by the McLennan County Public Facility Corp., a seven-member board that includes the county commissioners court. Community Education Centers of New Jersey, the private detention company contracted to manage the jail, agreed to repay the bonds using revenue from housing state and federal inmates. CEC has not lined up any housing agreements, and the jail remains empty. Bill Helton, county treasurer and member of the public facility corporation, said the situation raises the question of whether the county is responsible for the debt if housing revenue cannot cover the bond payments. The jail belongs to the county and is operated by CEC. “If you borrow money, you’re expected to pay it back,” Helton said. “The PFC has indeed borrowed money here by selling the bonds, and I anticipate that the bondholders are going to want to be repaid.” A matter of obligation -- The responsibility of repaying the bonds hinges on what party is legally obligated to pay the debt. The bond document was prepared by investment banking firm Municipal Capital Markets and outlines the construction project, projected revenues from the jail and bond repayment schedule for potential investors. Helton said some language in the bond documents implies that the county has promised to assist with the debt. In the “risk factors” section of the bond documents, it states that “the county presently intends to appropriate other available money of the county, if necessary,” to make the bond payments. County attorney Herbert Bristow said the county is not legally obligated to repay the bonds. He points to language in the bond documents that states the county is not required “to appropriate any money for payment of its obligations under the lease.” The county only has to budget funds each year to pay for any county inmates that are housed at the new jail, Bristow said. He added that the commissioners court could choose yearly to budget money to help repay the bonds. “It is so crystal clear to me, and it is crystal clear to the bondholders, that the obligation to appropriate (county) funds is a discretionary call for the commissioners to make, period,” Bristow said. But James Breeding, director of Standard & Poors Rating Services in Dallas, said the bond documents imply that the county would cover bond payments if housing revenues fell short. “The way the documents were structured and the way we rated it was that the county would step in with other funds, if necessary,” he said. Public finance cushion -- By design, the PFC was created to add some level of protection to the county from the debt. Governmental entities may form public facility corporations to issue debt for a project without having to gain voters’ approval in a bond election, according to Kent Gilbreath, Baylor University economics professor. The arrangement also helps shield the county from officially carrying the debt on its books. “It is not an indebtedness of the county, and thus the amount of indebtedness of the county is not increased,” said Gilbreath, a former board member of the Federal Reserve Bank of Dallas. “The higher the indebtedness of the county or the city, generally the lower their bond ratings would be.” Risk ratings -- The rating attached to new bonds signals how risky the investment would be to potential bond purchasers. Standard & Poors Rating Services gave the McLennan County Public Facility Corp. a AA- rating for the jail project. The company cited McLennan County’s tax base, previous financial performance, and low debt load as evidence of the project’s “general trustworthiness” and “rating stability.” Gilbreath said the county’s rating was used to show investors that the bonds were secure investments. “If I’m going to buy one of those bonds, I’m not just going to look at the entity that’s issuing it,” Gilbreath said. “I’m going to look at the deep pockets behind it, and thereby make a more informed decision about the credit worthiness of the bonds I’m buying.” Breeding said if the project goes into default, the county’s bond rating in future projects would be affected. CEC is still working to find inmates to fill the beds. The company is negotiating a contract to house Harris County prisoners. CEC also intends to apply for a housing contract with the Federal Bureau of Prisons that will be awarded later this summer. CEC Senior Vice President Peter Argeropulos wrote in a letter Monday to the county that it needs at least 525 inmates in the jail to produce enough revenue for operating and debt costs. Argeropulos told commissioners previously that CEC would not open the jail until it was guaranteed enough inmates to cover its expenses. While CEC has money on hand to make its debt payment in June, revenue is needed for the next $1.9 million payment due in December. U.S. Bank National Association is trustee of the bonds. The bank collects interest payments made from the public facility corporation and distributes them to bondholders. The bank will also be responsible for pursuing payment if the bonds go into default. Bristow said the bonds would only go into default in a “doomsday scenario” in which no prisoners are ever placed in the jail. The reserve fund provides at least one year of cushion for CEC to secure housing agreements, Bristow said. County Judge Jim Lewis said if payments were not covered by housing revenues, the bondholders would simply have lost their investment. “It’s like if you were to buy stock in General Motors for $10, and then the price of the stock drops to $1, then that’s your loss,” Lewis said. “Once it’s gone, it’s gone. Bonds work similar to that.” Helton said while he hopes the county will not have to pay the bonds, it is difficult to believe that all the parties can walk away from the debt if revenues aren’t generated. “If somebody walks up to you and says ‘Here, you can borrow this money, but if things don’t work out you don’t have to pay it back,’ it just doesn’t sound right,” Helton said. “I believe our legal counsel is a skilled attorney, and I hear what he’s saying, and I look on the other side, and I understand it, too, but the two — I can’t reconcile that in my own mind.” Court opinion split -- Members of the commissioners court have different views on how much protection the county has from the debt. Commissioner Kelly Snell, who was not on the court at the time that the jail project was approved, said Bristow repeatedly assured him the county would not be responsible for the debt. “He is the attorney that represents the county. You gotta kind of go with your legal representation,” Snell said. “If they tell you ‘this is what it is’ then that should be it.” However, Commissioner Joe Mashek said despite Bristow’s assertions, he has wondered how the county would be able to evade liability for the debt if CEC defaulted on repayment. “If we do not do it, we lose the jail, we lose the property, and our bond rating goes down so bad that we won’t be able to get any loans anymore,” Mashek said. “I feel, and I think Bill (Helton) does, too, that even though we may not to be responsible for these bonds, it would probably be in the best interest of the county to go ahead and pay the debt.”

May 2, 2010 Waco Tribune-Herald
McLennan County commissioners are split on whether to help a private detention company locate inmates to fill the vacant new jail. Community Education Centers of New Jersey has been unable to secure any contracts to house inmates at the new 816-bed Jack Harwell Detention Center. Commissioner Ray Meadows said he plans to tap into his contacts in other counties to see if officials across the state would be willing to send inmates to the center. “I’m going to continue to work on that,” Meadows said. “I’ve been saying to folks, ‘We’ve got jail space, boys, if you need it.’ It’s a good situation for both (CEC and the county) to get that thing open — the quicker the better.” Meadows said he spoke with other county commissioners during a state conference Friday to gauge their need for detention beds. Meadows and County Judge Jim Lewis accompanied CEC officials to a meeting in Houston last week to discuss housing Harris County inmates at the facility. But Commissioner Lester Gibson said it is CEC’s responsibility to hunt for inmates, and the county should not be involved in any housing negotiations. “Why should we be involved? CEC is under the contractual obligation to provide (inmates),” Gibson said. “We’ve built the facility, so we’ve done all that was expected of us in the contract.” Funding for facility -- The $49 million in revenue bonds that fund the project were issued by the McLennan County Public Facility Corporation, a seven-member board that includes the commissioners court. The board was formed to shield McLennan County from the responsibility of repaying the debt, county attorney Herbert Bristow said. Lewis said although the court cannot speak on behalf of CEC in housing talks, members do have the ability to encourage prospective clients to consider using CEC’s jails. The court approves all CEC contracts after the company completes negotiations, Lewis said. “The county can’t speak for CEC, just like the CEC can’t speak for the county,” Lewis said. “But all these years that we have (worked with) CEC, whenever I’m at a state meeting or I run into somebody from another county, I always say, ‘If you ever have an overflow, you can send your inmates to our facility.’ ” Commissioner Joe Mashek, who voted against the jail with Gibson, said he would not court contracts for CEC. “I was told this thing was all set, and now things are turning in another direction,” Mashek said. “I don’t know what’s going on, so I’m not going to get involved with it. I hope it is successful, even though I was against it, for the county’s sake.” Gibson said if the court were to become involved in CEC’s housing negotiations, the contract with CEC would have to be amended to give the county that authority. That change would have to be approved by the court, he said. The commissioners have all expressed concern about what will happen with the new jail if CEC cannot fill the beds. CEC has $1.9 million on hand to make the first payment on the bonds, due in June. However, future payments will require revenue from housing inmates. CEC Senior Vice President Peter Argeropulos said the company would likely not open the jail until it had 600 inmates. That population would produce enough revenue to cover CEC’s operating expenses and meet debt payments, which are due every six months. A reserve fund of $4 million would cover payments for about a year, but it can only be accessed if the jail remains empty for an extended period. Commissioner Kelly Snell, who was not on the court when the project was approved, said there should have been provisions built into the contract with CEC in case its housing projections were not met. “Getting in on the end of the deal, after everything has pretty much been set on, I just couldn’t believe there’s not an exit plan in place, or contingencies for if this does happen, what would we do,” Snell said. “That’s something we should have had to start with.”

April 23, 2010 Waco Tribune-Herald
The new jail on State Highway 6 has an impressively low detention population: zero. The 816-bed Jack Harwell Detention Center officially was completed in February. But Community Education Centers, the New Jersey-based detention company under contract to manage and operate the jail, has been unable to secure agreements with state and federal agencies to house inmates. Meanwhile, CEC must begin repaying the $49 million in project revenue bonds that financed the construction of the jail. The $313,000 monthly debt service is to be paid using revenue from housing inmates, placing the company under a crunch to fill beds. While funds already have been set aside for the first payment of $1.9 million due in June, CEC must begin making revenue soon or risk defaulting on the bonds. Doing so would mean the county loses the new jail. CEC wants some relief from the county to cover the financial obligation, but some commissioners say getting involved could end up costing taxpayers. County Judge Jim Lewis, Commissioner Ray Meadows and former Commissioner Wendall Crunk voted for the construction of the new jail. Commissioners Lester Gibson and Joe Mashek voted against it. Fewer inmates -- Feasibility studies conducted in 2008 showed the county would need 1,296 beds by the end of this year, slightly above the combined 1,260 capacity between the McLennan County Jail and the downtown jail. While the county faced severe overcrowding in 2008, there were only 860 inmates in the county jail Thursday afternoon, with 20 inmates at the CEC-run downtown jail. Peter Argeropulos, CEC senior vice president, reported the dilemma to the McLennan County Commissioners Court on Thursday. CEC began reaching out to agencies in the fall only to find that few prison facilities were housing inmates outside their facilities. Immigration and Customs Enforcement, for example, scrapped plans for a new fugitive apprehension unit in Waco. The Texas Department of Criminal Justice began pulling its inmates from private detention centers in August. “What we expected and what the studies had indicated have not materialized at this point,” Argeropulos said. Solutions debated -- One option Argeropulos suggested was to close down the 329-bed downtown jail and transfer the staff and inmates to the Jack Harwell Detention Center. The move would help CEC pay debt service but also cause the county to lose as much as $400,000 from the operation of the downtown jail. “Your plan’s not working, and it’s not working because you can’t get the prisoners, so you’re coming to the court wanting concessions that are going to cost the taxpayers money,” Commissioner Kelly Snell said. “That’s where I have a problem.” CEC Warden Mike Wilson, who oversees the downtown jail and would head the new jail, said moving the inmates would help address safety concerns at the facility. “All of a sudden, once you get a new car, that old car you got isn’t worth driving anymore, that’s the bottom line,” Snell said. Argeropulos also asked the court to temporarily waive an administrative fee of $2 per inmate per day CEC is to pay to the county until revenue exceeds operation costs. “I don’t see why the county has to be asked to bend over and do all the compromise,” Gibson said. “I think that some of the burden should be upon your side to do what you can to ease the burden.” Another option Argeropulos raised is to sign an interlocal agreement with Harris County, which is battling serious overcrowding issues. Harris County has transferred about 650 inmates to Newton County, with another 450 housed in Bowie County and 200 in Louisiana. CEC had a six-month agreement to house 320 Harris County inmates that expired in February. But CEC did not get any inmates during that period. Argeropulos said Harris County was willing to pay only $45 per person per day to house inmates at the Jack Harwell Detention Center, lower than the $54.50 rate CEC originally expected. “Right now, it’s a buyers’ market,” Argeropulos said. “As beds become vacant, people can become a little more picky in terms of who they want to negotiate with and what’s the best rate they can get.” Argeropulos said CEC intends to apply for a bid to house federal inmates. The Federal Bureau of Prisons is expecting to need up to 3,000 beds later this year, a proposal that may likely net higher housing revenue, he said. “It’s not a new revelation, it’s been in newspapers nationwide that facilities are lacking prisoners,” Lewis said. “It’s not an ideal situation, but anybody who’s been in this business knows that there’s ups and downs on it. . . . The population will go up not only here but nationwide. The industry just keeps on growing.” Long-term outlook -- Still, Argeropulos said CEC would not open the jail until it had secured enough inmates to sufficiently cover the debt service and operational costs. The bond package includes a $4 million reserve fund that will cover about a year of payments. However, that fund can only be accessed if there are no inmates in the facility, Argeropulos said. CEC exercised an escape clause last month to pull out of managing Johnson County jails with one more year to go on a three-year contract. Argeropulos said Johnson County’s jail population had dropped by 25 percent, causing CEC to lose money. Herbert Bristow, attorney for the county, said if CEC defaulted on repaying the bonds, the county would not be liable to make payments. The McLennan County Public Facility Corp., a seven-member board including the commissioners court, issued the bonds in 2009. “It was done by design to insulate the county,” Bristow said. “But the end result is if it’s a doomsday deal, and we can’t find any prisoners to put in it . . . the bondholders have the right to take the property back and get whatever value there is in it.” Argeropulos said he would bring the court a formal proposal for action later this month. Mashek said the discussion reinforced the concerns he expressed in 2008 when he voted against the new jail. “It looks like they’re trying to cover up problems they’re having and wanting the county to bail them out, and I’m not in a position to bail anybody out, especially CEC,” Mashek said.

Johnson County Law Enforcement Center, Johnson County, Texas
Texas prison boom going bust: by Mitch Mitchell, September 3, 2011, Star-Telegram. Expose on troubles facing many communities that bought into the private prison bonding scam.

March 25, 2010 Grits For Breakfast
As the Webb County Sheriff pushes construction of a massive new jail for the purpose of housing federal immigration prisoners, their commissioners court should look to Johnson County to understand how that might not pan out like they hope. According to a story in the Cleburne Times-Review ("CEC bailing out," March 24): Johnson County Law Enforcement Center should have a new private subcontractor no later than Sept. 15 after the recent decision of Community Education Centers to end its agreement with the county to run the jail. CEC signed a three-year contract with the county in September 2008. CEC used an escape clause, County Judge Roger Harmon said Tuesday, extending the county six months notice of contract termination. CEC warden James Duke could not be reached for comment, but CEC officials told Johnson County commissioners that the corporation was losing money in its operation of the jail. Johnson County entered the contract with CEC on the assumption that a near-endless wave of immigration detainees would fill up as many jail beds as they could build. As it turned out, that wasn't the case: CEC expected to make the bulk of its money by filling unoccupied beds with immigration detainees. “The average population is 450 to 500,” Duke said last year. “There are empty beds. That’s attractive to us. We take those empty beds and help the county get contracts with other entities such as Immigration Customs Enforcement. Corrections 2 [block] has 176 beds. We put ICE detainees in those beds. ICE pays Johnson County, and the county reimburses us. “The county makes $5 off every detainee. The county makes money, and we make money.” That wasn’t the way it worked out, Harmon said. ... “When CEC contracted with us, we were running about 600 inmates per day,” Harmon said. “Nobody knows why, but the numbers recently have been running around 400 per day. Incarceration numbers are down statewide and nationwide, from what I understand. You wouldn’t think it would be that way with high unemployment, but it is.” As of March 1, according to the Texas Commission on Jail Standards, Johnson County had just 338 inmates in the jail, so the supposed profitmaker has now become a money suck. By contrast, Cameron County entered into a similar scheme and encountered the opposite problem: Their jail has so many federal prisoners they now must send pretrial detainees three hours away to be housed by other counties at higher costs. So Texas counties have been burned by these deals coming and going. It's never as simple or cheap as it sounds up front when it's pitched. Never.

Jones County Prison, Jones County, Texas
Texas prison boom going bust: by Mitch Mitchell, September 3, 2011, Star-Telegram. Expose on troubles facing many communities that bought into the private prison bonding scam.

July 28, 2011 Abilene Reporter-News
The Bill Clayton Detention Facility in Littlefield went on the auction block Thursday, but Jones County officials are still optimistic that their prison, which has never been used, won't meet the same fate. "It's been a timing thing," said Jones County Judge Dale Spurgin. "It's going to eventually be used and bring about 200 jobs to the area." The Littlefield prison, run by the GEO Group, closed in 2008 after Idaho removed prisoners sent there. GEO, which also operates a prison in Big Spring, withdrew from the facility, taking with it 100 jobs. The facility has been vacant since. In the past couple of years, the country has seen a decline in prison population, but the numbers are beginning to tick back up, Spurgin said. The $35-million Jones County prison, which was completed in May 2010, lacks only a population, said Spurgin. The 1,112-bed prison has a two-year contract with the state with three one-year options and an operating agreement with Community Education Centers that will be activated as soon as the prison receives inmates. Community Education Centers, based in New Jersey, operates 20 facilities in Texas, including the Therapeutic Community Walker Sayle Substance Abuse Felony Punishment Facility in Breckenridge. One possibility for the prison is to receive inmates from the Central Unit in Sugar Land, which is scheduled to quit receiving state funds at the end of August. State legislators had considered moving the 800-plus prisoners to privately run prisons in the state. Spurgin had earlier said the medium-security prison could be used for that transfer. Another possibility, said Spurgin, could be to take prisoners from California. A California Supreme Court decision this summer ruled that the California prisoners were overcrowded and the system had to alleviate the problem by either releasing or transferring 46,000 inmates. "I know the governor's office has contacted California to see if they're interested in transferring prisoners here," said Spurgin. The Jones County prison near Anson was built without taxpayers' money, being financed with privately invested revenue bonds.

Joseph E. Coleman Center, Philadelphia, Pennsylvania
July 12, 2005 Philadelphia Daily News
An inmate at a halfway house in Juniata Park was found shot to death in his room yesterday morning, police said. Geary Turner, 56, was shot once in the chest and pronounced dead at the scene at about 8 a.m., said Sgt. John Taylor of the homicide division. Security is tight at the Joseph E. Coleman Center, named after the late City Council president. The 300-bed community corrections center is occupied by ex-state prisoners. Though it is called a halfway house, it looks like a medium security prison. The facility is surrounded by high chain-link fences and barbed wire. Inmates may leave the facility on work passes, but must return by night. The facility, which opened in November 2001, is operated by a Roseland, N.J., company called Community Education Centers. Last September, one of CEC's youth facilities - the Wynona M. Lipman Education and Training Center in Newark - came under fire when a prison worker severely beat a 17-year-old inmate. Though CEC either fired or suspended 8 staff members, the facility had admissions suspended by state officials due to the violence. Last month, the Lipman center was permanently closed because of financial problems, just three years after it had opened.

Kinney County Detention Center, Brackettville, Texas
October 26, 2009 Norfolk Crime Examiner
On Friday, a member of the notoriously violent Mexican Mafia escaped from the Kinney County Detention Center in Brackettville, TX. Kinney County Sheriff’s deputies, along with the Texas Rangers and U.S. Border Patrol are still searching for Manuel Guardiola, 33. However, the search may be rather futile considering the fact that the jail is only 30 miles from the Mexican border. The Kinney County Sheriff’s office told reporters that they do not know how Guardiola escaped. The escaped fugitive is 5-foot-4 and weighs about 180 lbs. He has black hair, but could have shaved his head and his upper body is covered in tattoos. He may be wearing glasses. Anyone with information on the whereabouts of Manuel Guardiola is asked to call the Texas Department of Public Safety at (512) 424-2000. In December 2008, the privately-run Kinney County Detention Center experienced a riot when 30 prisoners refused to return to their cells from, and set fire to mattresses and clothing. The Mexican Mafia is a very powerful prison gang which began in 1950 in California. Today, the gang controls large drug distribution, extortion and murder-for-hire operations, both in and outside of prison. They are closely aligned with the Aryan Brotherhood.

Liberty County Jail/Juvenile Center, Liberty, Texas
October 18, 2011 Houston Community Newspapers
A 25-year-old Daisetta, Texas, man has pleaded guilty to federal charges in the Eastern District of Texas, according to U.S. Attorney John M. Bales. James Allen Roach pleaded guilty before U.S. District Judge Thad Heartfield on Tuesday, Oct. 18, to attempting to provide a federal inmate with a prohibited object. According to information presented in court, on Feb. 24, 2011, Roach, a correctional officer for the Liberty County Community Education Center (CEC), was arrested for arranging to deliver marijuana and tobacco into the Liberty County CEC to a federal inmate in exchange for money. Roach was indicted by a federal grand jury on March 2, 2011 and charged with federal violations. Roach faces up to five years in federal prison at sentencing. A sentencing date has not been set. This case is being investigated by the U.S. Marshals Service, the Jefferson County Sheriff's Office and the Texas Department of Public Safety and is being prosecuted by Assistant U.S. Attorney Randall L. Fluke.

May 6, 2010 The Vindicator
Liberty County Sheriff’s Department Public Information Officer Steve Greene recently reported ongoing investigations regarding contraband found in the Liberty County Jail. The jail is managed by a contractor, Civigenics, a subsidiary of Community Education Centers, Inc. Greene said “Basically, we have been getting information that there was a lot of contraband in the jail, and some of it was being brought in by corrections officers. Thursday, (April 29) we searched the evening shift as they were coming in and we had a drug dog pass by their cars. For those cars that the dog alerted on, we asked for consent to search. We searched the vehicles. We have ongoing investigations regarding a couple of guards. Two or three were terminated.” Back on approximately April 8, one guard was arrested by US Marshals for taking contraband into the jail. He is being held at a detention facility in Beaumont, on charges equivalent to “prohibitive substances in a correctional facility”.

February 22, 2010 Eastex Advocate
A jailer at the Liberty County Jail was arrested for shoplifting on Friday, February 19, at the Cleveland Wal-Mart. Ashley Trasha Ligons, 26, of Cleveland has been charged with Class B misdemeanor theft. It is alleged that she shoplifted CDs and a DVD. Ligons was taken into custody by Cleveland Police Department and transported to the city jail, where she was booked in. She was later transported to the Liberty County Jail, where she had been employed as a jailer. The jail is operated by Civigenics and is under the management of the Liberty County Sheriff’s Office.

January 14, 2009 Cleveland Advocate
It was business as usual for the Liberty County Commissioners Court. After paying the month’s bills they approved payroll changes resulting from the inauguration of the new sheriff and county attorney. The largest change is that former candidate for county attorney Tommy Chambers transferred from First Assistant to Second Assistant. Chambers’ transfer came about because newly inaugurated County Attorney Wes Hinch brought in Karen McNair to be his First Assistant. Additionally the commissioners addressed a complicated item regarding payments for repairs to the County Jail. At issue were repairs that had to be performed to the Liberty County Jail after the change in management that occurred in 2007. “The company that ran the jail until 2006 hadn’t made some repairs so we held onto the payment in exchange for the repairs,” said County Judge Phil Fitzgerald. Fitzgerald stated that the county was releasing the funds to Community Education Centers (CEC), the company that used to run the jail, because they paid Civigenics, the company that now runs the jail, to make the repairs. The release of the funds came after a court case involving Civigenics, CEC and Liberty County.

Liberty Hall, Indianapolis, Indiana
March 7, 2011 Indianapolis Star
Sheriff John Layton is shaking up Marion County's privately run jails after staff at Liberty Hall two weeks ago let hours slip away before they called an ambulance for an inmate who later died from pregnancy complications. "The bottom line is it can't happen again, and we're going to make sure that it doesn't," Layton said. Layton pulled all pregnant inmates into the Marion County Jail; increased county supervision and control over Liberty Hall and the privately run Marion County Jail II; and ordered external evaluations of the facilities to be conducted by former sheriffs Frank Anderson and Jack Cottey. These steps are a reaction to the Feb. 20 death of Amber Redden, 27, who collapsed at Liberty Hall after suffering internal bleeding from a ruptured ectopic pregnancy. Meanwhile, officials at Liberty Hall fired an officer who was on duty that night and conducted their own investigation into Redden's death, said Murray Clark, an attorney for the facility. Liberty Hall's investigation determined that no policies or procedures were violated, and officials said they think Redden received the "legally acceptable standard of care," said Clark, who expressed sympathy to Redden's family. Clark did not give the name of the staff member who was fired or a specific reason for the firing. Sheriff's officials did not release details of an internal investigation into the death, but they confirmed that Redden began complaining of symptoms sometime before lunch was served. Chief Deputy Eva Talley-Sanders, who supervised the investigation, confirmed that staff took Redden to lunch in a wheelchair after she had complained of what the staff described as severe flu-like symptoms. "The employees who were there were not trained in the medical field," Layton said. "They thought she was having a terrible episode of the flu." It was a Sunday, and medical staff was not at the facility, but a nurse and doctor are always on call. Sheriff's officials said Liberty Hall officers phoned the nurse and gave Redden an over-the-counter painkiller. Redden sought the help of another inmate to get word of her pain to her mother. Lisa Nipper told The Indianapolis Star that she received a phone call about 5 p.m. Feb. 20 from a relative of an inmate who had been helping her daughter. Redden was overheated and having seizures, the caller told Nipper. Facility staff moved Redden to a cooler area. About 9 p.m., the same person called back and said Redden was not getting better and that staff had given her Tylenol. By about 10 p.m., the person called again to say Redden had collapsed in the bathroom and was foaming from the mouth. Officials could not say Friday exactly when the ambulance had been called, but Deputy Chief Michael Turner said Redden had been loaded into one and medics were working on her when he arrived at Liberty Hall about 11 p.m.

March 2, 2011 Fox59
The death of a pregnant inmate is spurring changes at the Marion County Jail before the results of the death investigation are complete. "I am concerned of course," said Marion County Sheriff John Layton. "We will act accordingly that's for sure." Sheriff John Layton's concern with the death of 27-year-old Amber Redden and her unborn child is magnified by the fact that she died in a contracted facility which is privately owned and operated. That's also why Layton didn't wait to transfer all 18 pregnant inmates to the main Marion County Jail. "I don't look at it as 18 women in a jail cell, I look at it as 36 human beings," Layton said. The death of Redden last week at Liberty Hall is what prompted Layton to move the pregnant inmates to the third floor of the main jail, which is staffed by the sheriff's department. The unit is just down the hall from the medical ward. Layton also said he's increasing the frequency of medical rounds for those inmates from once an hour to once every half hour. "Ultimately with the inmates in Marion County it comes back to my desk," Layton said. "The buck stops there. We'll take care of business as it comes up. If we see something that needs to be addressed we're going to address it." "I want to know why my daughter died," said Amber Redden's mother Lisa Nipper, the day following her daughter's death. "Why her and my baby is dead." The coroner determined that Amber suffered a ruptured ectopic pregnancy. Doctors told Fox59 a rupture like that can be considered a surgical emergency, but Lisa said her daughter was never taken to a hospital despite several seizures. "Something is not right," Nipper said. "Something has got to be done." Though the family is now considering a lawsuit, lawyer Adam Dulik said, for now, they are encouraged by the changes at the jail. "In this time of grieving, the family takes comfort knowing that other expecting mothers will not face a similar fate," Dulik said in a written statement. "At this time, they would like to express their heart-felt thanks for the outpouring of prayers and well wishes they have received from the community since the loss of Amber and her child, but make no further comment." Fox59 contacted Community Education Centers, which operates Liberty Hall, in order to ask about their reaction to the sheriff's decision to remove pregnant inmates. Company spokesperson Christopher Greeder released the following statement: "CEC and Liberty Hall are incredibly saddened by the tragic death of Ms. Redden and we extend our condolences to her family. The facility was at all times in compliance with all the provisions of its professional services contract with Marion County as well as all mandatory and non-mandatory standards of the American Correctional Association. The company continues to conduct its own internal review of the events."

February 22, 2011 Indianapolis Star
A pregnant Marion County jail inmate died from internal bleeding caused by an abnormal pregnancy, police said today. Amber Redden, 27, collapsed in a bathroom at Liberty Hall, at 675 E. Washington St., at 10 p.m. Sunday. Indianapolis Metropolitan Police Department officials said Redden’s death was “natural” and caused by a ruptured ectopic pregnancy that led to hemorrhaging. According to the National Institutes of Health website, medlineplus, an ectopic pregnancy is one that occurs outside the womb and is always fatal to the fetus. The website said ectopic pregnancies occur in at least one in 100 pregnancies. Liberty Hall is a 250-bed private facility operated by Roseland, N.J.-based Community Education Centers across from Marion County Jail II. It is intended for incarcerating mothers and pregnant women. Redden was two months pregnant and was serving a 22-month sentence for theft. Her mother, Lisa Nipper, said Monday night that the death shocked her. “I don’t understand how they can take my daughter to jail and let her die,” Nipper had said. “It’s not right. I’ve got to have answers.” She said no law enforcement authorities had called her to inform her of her daughter’s death, though a chaplain did. Nipper could not be reached for comment Tuesday but IMPD spokeswoman Linda Jackson said police had contacted her. “It’s terrible,” Nipper said. “You're supposed to die before your children, and I’m still living and she’s dead.”

Limestone County Detention Center, Limestone County, Texas
September 26, 2009 Waco Tribune-Herald
When the new Jack Harwell Detention Center is ready for prisoners, McLennan County Sheriff Larry Lynch will be responsible for up to 800 additional inmates, but the stipend he is paid in the contract with the private detention company that will operate it will not increase. The extra $1,000 a month that Lynch is paid by the county in its contract with Community Education Centers has been a source of contention since before CEC acquired the former CiviGenics and before Lynch became sheriff. By statute, a private detention company cannot set up shop in a county without the authorization of the sheriff. And in some of those counties, the company pays a stipend to the county, which is passed on to the sheriff as part of his salary. The practice was questioned again last year during spirited debates among county officials about whether to build the privately run facility on State Highway 6 and whether to allow CEC or another company to take all of the county’s jail operations private. Lynch and his predecessors, Bob Mitchell and Jack Harwell, have all collected the extra pay through the private jail contract. All have said that it gave them extra responsibilities to see that all detention facilities in this county that hold county prisoners are in compliance with state standards and run properly. Critics of jail privatization in general, and the sheriff stipend in particular, include the largest law enforcement union in the state, Combined Law Enforcement Associations of Texas (CLEAT). A bill to ban such stipends did not pass in the last legislative session. “What we have done is legalize something that is ethically and morally wrong,” CLEAT spokesman Charley Wilkison said of the stipend. “It constitutes a clear financial interest between the sheriff and the for-profit companies. Can he take money from the people who provide vests to the deputies? Can he take money from the fleet dealer who sells cars to the county? Can he take money from any of the food vendors? If that had happened, a grand jury would be visiting on this issue right now.” Despite taking on more responsibilities with the opening later this year or early next year of the new 816-bed private jail adjacent to the county jail, Lynch said the county’s contract covering the new facility does not include more funds for him filtering down from CEC. Lynch’s regular salary is $92,881, and the county pays him $12,000 a year in the CEC contract and $140 a month in longevity pay. Lynch declined to discuss the stipend, saying it is old news. He was more eager to talk about the breathing room his department will have when the new facility opens, finally putting an end to the constant juggling act county officials perform because of jail overcrowding. The county jail population was 1,009 on Friday. Capacity at the State Highway 6 jail is 930, while capacity at the CEC-run McLennan County Detention Center downtown, which the county has used to hold prisoner overflow, is about 300. The new facility will hold federal detainees, primarily, said Lynch and County Judge Jim Lewis. However, the county also will house overflow prisoners there and at the downtown facility, they said. CEC also plans to contract with other agencies to house prisoners. A bill that would have made it a state jail felony for a sheriff to accept a stipend in a contract with a private detention company made it out of the House County Affairs Committee during the past legislative session but died on the House floor without a vote, Wilkison said. CEC operates a 1,000-bed facility in Limestone County. Sheriff Dennis Wilson, whose county annual salary is $49,457, is paid a $24,000 stipend yearly by the county in its contract with CEC, Wilson said. CEC spokesman Bob Prince, a retired Texas Ranger captain, said not all CEC contracts with Texas counties include stipends for sheriffs. “That is entirely up to the commissioners court to decide,” Prince said. “That is not a road we go down. The original contract we had in Waco, that was put in and that was what was agreed to.” Recently, Adan Munoz Jr., executive director of the Texas Commission on Jail Standards, sent out a memo warning counties to pay strict attention to contracts with food vendors, noting that sheriffs in Potter and Bexar counties hit legal snares recently in their dealings with food vendors. He said a state representative asked him to send the memo about food vendors. However, it could have included warnings in many other areas, including dealings with private detention companies, Munoz said. “We suggest that they consult with local attorneys about any potential conflicts,” Munoz said. “It is based on appearance and suspicion. Unfortunately, many people react on mere appearance without knowing the full story.”

McLennan County Detention Center, Waco, Texas
March 28, 2011 NPR
Private Prison Promises Leave Texas Towns In Trouble by John Burnett The country with the highest incarceration rate in the world — the United States — is supporting a $3 billion private prison industry. In Texas, where free enterprise meets law and order, there are more for-profit prisons than any other state. But because of a growing inmate shortage, some private jails cannot fill empty cells, leaving some towns wishing they'd never gotten in the prison business. It seemed like a good idea at the time when the west Texas farming town of Littlefield borrowed $10 million and built the Bill Clayton Detention Center in a cotton field south of town in 2000. The charmless steel-and-cement-block buildings ringed with razor wire would provide jobs to keep young people from moving to Lubbock or Dallas. For eight years, the prison was a good employer. Idaho and Wyoming paid for prisoners to serve time there. But two years ago, Idaho pulled out all of its contract inmates because of a budget crunch at home. There was also a scandal surrounding the suicide of an inmate. Shortly afterward, the for-profit operator, GEO Group, gave notice that it was leaving, too. One hundred prison jobs disappeared. The facility has been empty ever since. A Hard Sell "Maybe ... he'll help us to find somebody," says Littlefield City Manager Danny Davis good-naturedly when a reporter shows up for a tour. For sale or contract: a 372-bed, medium-security prison with double security fences, state-of-the-art control room, gymnasium, law library, classrooms and five living pods. Davis opens the gray steel door to a barren cell with bunk beds and stainless-steel furniture. "You can see the facility here. [It's] pretty austere, but from what I understand from a prison standpoint, it's better than most," he says, still trying to close the sale. For the past two years, Littlefield has had to come up with $65,000 a month to pay the note on the prison. That's $10 per resident of this little city. A Resident Burden Is the empty prison a big white elephant for the city of Littlefield? "Is it something we have that we'd rather not have? Well, today that would probably be the case," Davis says. To avoid defaulting on the loan, Littlefield has raised property taxes, increased water and sewer fees, laid off city employees and held off buying a new police car. Still, the city's bond rating has tanked. The village elders drinking coffee at the White Kitchen cafe are not happy about the way things have turned out. "It was never voted on by the citizens of Littlefield; [it] is stuck in their craw," says Carl Enloe, retired from Atmos Energy. "They have to pay for it. And the people who's got it going are all up and gone and they left us... " "...Holdin' the bag!" says Tommy Kelton, another Atmos retiree, completing the sentence. The Declining Prison Population The same thing has happened to communities across Texas. Once upon a time, it seems every small town wanted to be a prison town. But the 20-year private prison building boom is over. Some prisons are struggling outside Texas, too. Hardin, Mont., defaulted on its bond payments after trying, so far unsuccessfully, to fill its 464-bed minimum security prison. And a prison in Huerfano County, Colo., closed after Arizona pulled out its 700 inmates. According to the Bureau of Justice Statistics, the total correctional population in the United States is declining for the first time in three decades. Among the reasons: The crime rate is falling, sentencing alternatives mean fewer felons doing hard time and states everywhere are slashing budgets. The Texas legislature, looking for budget cuts, is contemplating shedding 2,000 contract prison beds. Statewide, more than half of all privately operated county jail beds are empty, according to figures from the Texas Commission on Jail Standards. "Too many times we've seen jails that have got into it and tried to make it a profitable business to make money off of it and they end up fallin' on their face," says Shannon Herklotz, assistant director of the commission. The packages look sweet. A town gets a new detention center without costing the taxpayers anything. The private operator finances, constructs and operates an oversized facility. The contract inmates pay off the debt and generate extra revenue. The economic model works fine until they can't find inmates. In Waco, McLennan County borrowed $49 million to build an 816-bed jail and charge day rates for bunk space. But today because of the convict shortage, the fortress east of town remains more than half empty. The sheriff and county judge, once champions of the new jail, now decline to comment on it. Former McLennan County Deputy Rick White, who opposed the jail, had this to say about the prison developers who put the deal together: "They get the corporations formed, they get the bonds sold, they get the facility built, their money is front-loaded, they take their money out. And then there's no reason for them to support the success of the facility." Two of Texas' busiest private prison consultants — James Parkey and Herb Bristow — declined repeated requests for interviews. The Inmate Market Private prison companies insist their future is sunny. A spokesman for the GEO Group declined to speak about the Littlefield prison, but he sent along a slew of press releases highlighting the company's new inmate contracts and prison expansions across the country. Corrections Corporation of America, the nation's largest private prison operator, says the demand for its facilities remains strong, particularly for federal immigration detainees. New Jersey-based Community Education Centers, which has been pulling out of unprofitable jails across Texas, issued a statement that "the current (jail) population fluctuation" is cyclical. One of the places where CEC is cancelling its contract is Falls County, in central Texas, where a for-profit jail addition is losing money. Now it's up to Falls County Judge Steve Sharp to hustle up jailbirds: "If somebody is out there charging $30 a day for an inmate, we need to charge $28. We really don't have a choice of not filling those beds," he said. Another place where they're desperate for inmates is Anson, the little town north of Abilene, Texas, once famous for its no-dancing law. Today, Jones County owns a brand-new $34 million prison and an $8 million county jail, both of which sit empty. The prison developers made their money and left. Then the Texas Department of Criminal Justice reneged on a contract to fill the new prison with parole violators. The county's Public Facility Corporation that borrowed the money to build the lockups owes $314,000 a month — with no paying inmates. They've got a year's worth of bond service payments set aside before county officials start to sweat. "The market has changed nationwide in the last 18 months or two years. It's certainly a different picture than when we started this project. And so we're continuing to work the problem," Jones County Judge Dale Spurgin says. Grayson County, north of Dallas, said no to privatizing its jail. Two years ago, the county was all set to build a $30 million, 750-bed behemoth twice as big as was needed. But the public got queasy and county officials ultimately scuttled the deal. "When you put the profit motive into a private jail, by design, in order to increase your dollars, your revenues, your profits, you need more folks in there and they need to stay longer," says Bill Magers, mayor of the county seat of Sherman, a leading opponent. When the supply of prison beds exceeds the demand for prison beds, there are beneficiaries. The overcrowded Harris County Jail in Houston, the nation's third largest, farms out about 1,000 prisoners to private jails. Littlefield and most other under-occupied facilities in Texas have all been in touch with Houston. "It really is a buyer's market right now, especially a county our size," says Capt. Robin Kinetsky, who is in charge of inmate processing for the Harris County Sheriffs Department. "They're really wanting to get our business. So, we're getting good deals." Nearby, disheveled and unsmiling men are brought from a holding cell to stand before a booking officer for their intake interviews. The detainees are wholly unaware that they may soon become the newest commodities of the volatile inmate market. Aarti Shahani contributed to this NPR News investigation and report.

December 22, 2010 KXXV
It's been open just under a year, and McLennan County's new jail hasn't come close to breaking even. Less than half full and hemorrhaging cash, jail administrators are searching far and wide for inmates to fill its beds. Since the jail's completion in February of 2010, Community Education Centers has struggled to fill less than half of the Jack Harwell detention center's 816 beds. Deals with other Texas counties like Harris and Dallas have yielded handfuls of inmates, but not enough to come close to begin repaying the $49.9 million price tag for construction. But California's jails are bursting at the seams. The U.S. Supreme Court is currently weighing a ruling by a panel of federal judges ordering California to cut the state's prison population down from 200 percent to 137.5 percent capacity. It would mean a reduction of around 40,000 inmates. With Jack Harwell facing imminent crisis, on Tuesday CEC Senior Vice President Peter Argeropulos suggested a new plan offering to soak up the surplus from the Golden State.

February 19, 2010 Waco Tribune-Herald
A Texas attorney general’s opinion that a county sheriff is not authorized to accept an “administrative fee” from a private organization has no bearing on McLennan County Sheriff Larry Lynch, who receives a $12,000 annual salary supplement for monitoring the county’s privately run jails, county officials say. The opinion issued by Attorney General Greg Abbott’s office Wednesday was prompted by a question from state Rep. Yvonne Davis, D-Dallas, chairwoman of the House Committee on Urban Affairs. While the request, submitted in September 2008, did not specifically mention contracts between any county or sheriff, the letter was prompted by a high-profile state law enforcement union’s dispute with McLennan County. The union, the Combined Law Enforcement Associations of Texas, had battled the county as officials deliberated whether to renew its contract with Community Education Centers (formerly CiviGenics) to operate the county’s downtown jail and to contract with CEC to operate a new jail on State Highway 6. McLennan County Judge Jim Lewis and McLennan County District Attorney John Segrest said the opinion will not affect operations here because the salary supplement Lynch is paid comes from the county, not CEC. Segrest said “this opinion has no bearing whatsoever on the situation in McLennan County,” based on his knowledge of the CEC contract and from his discussions with county officials, including county auditor Steve Moore and county attorney Mike Dixon. “The private contractor does not pay the county anything,” Segrest said. “The county pays them. So clearly, there is no administrative fee paid by the private contractor who runs the jail. “It appears to me that the broad opinion was based on a question designed to get a certain answer and it comes from the same people who put up the billboards that said Waco is the murder capital of the world.” Group’s protests -- Segrest was referring to officials from CLEAT. The group asked for the opinion while organizing protests to McLennan County privatizing its jail system. CLEAT also had been involved in putting up billboards on Interstate 35 highlighting Waco’s crime rate. The move came amid local police association officials’ frustration with the city about pay, staffing and other issues. CEC contracts with the county to operate jails here, and the county contracts with the federal government and other counties to house their prisoners. The $12,000 supplement the county pays Lynch is for additional administrative and monitoring duties associated with the private jails, Lewis and Segrest said. A private jail company cannot operate in a county without the authorization of the county sheriff. That $12,000 annual fee is on top of Lynch’s annual salary of $92,881. The supplement has been in place since the late Jack Harwell was sheriff and the county first leased the downtown jail on Columbus Avenue to CiviGenics in 1999. Charley Wilkison, political and legislative director for CLEAT, challenged Lynch, based on the AG’s opinion, to write a check today and give the money back to the private contractor. That would prove he is an “honorable man and a man of integrity,” Wilkison said. Lynch did not return phone messages left at his office or on his cell phone Wednesday or Thursday. Dixon, the county’s attorney, said CLEAT continues to play fast and loose with the facts. “I fail to see why the sheriff would need to send a check to CEC when he has never received any money from or on behalf of CEC,” Dixon said. Wilkison said the supplement, which is common in all counties with private jails operating in them, “just never passed the smell test.” ‘Fish bait’ -- “This opinion is a great victory for the regular people of Texas, and the reason is that this goes to the cornerstone, to the fish bait, that private jail companies use to get into a community and get their hooks into the taxpayers and get their hands into their pockets,” Wilkison said. Wilkison said the opinion makes it clear that the salary supplement is not proper and should stop. Lewis said he doesn’t think the AG’s opinion applies to McLennan County because it involves a question about an “administrative fee” that is paid based on the number of prisoners in jail. “The sheriff is paid a salary supplement,” Lewis said. “There is a difference. He is paid the same salary supplement every year. “It is not a fee based on jail population. This is no secret. We post our salaries once a year and it is very clear that it is a supplement approved by the commissioners court,” Lewis said. Dixon agreed. He said the AG’s opinion request was based on erroneous information. “Instead of requesting an opinion pertaining to actual facts of which this group was well aware,” Dixon said, “the request was based on fictitious assertions that have been repeatedly alleged by the group, the goal being to use the resulting opinion to further assail the sheriff, even though the facts underlying the opinion would bear no relationship to the situation in McLennan County.” Ken Witt, president of the McLennan County Sheriff’s Office Association and a CLEAT member, said whatever the county calls the sheriff’s pay bump, it is wrong. “Whether you call it a fee or a supplement, it amounts to word games by Judge Jim Lewis,” Witt said. “It is clear that the sheriff is funneled money from CEC. “If not directly, indirectly through the commissioners court. It doesn’t matter how the sheriff receives his piece of the private pie.”

February 18, 2010 KXXV
A ruling by State Attorney General Greg Abbott Wednesday could revive the controversy over extra money Sheriff Larry Lynch receives from McLennan County Commissioners for overseeing county jails. A private company, Civigenics, runs the downtown jail by contract from the county, as well as a new jail on Highway 6 that should start housing inmates in the next thirty days. Sheriff Lynch is paid $12,000 a year to oversee those facilities, in addition to his regular salary. Other counties in Texas have similar arrangements, and their Sheriff receives extra money – sometimes significantly more -- from the private jailer. Abbott's ruling was a response to a request from Yvonne Davis, the Chair of the State House Committee on Urban Affairs. The Attorney General said "The commissioner's court may not contract with a private organization in which a member of the court or an elected or appointed peace officer who serves in the county has a financial interest … A contract made in violation of this section is void". It also said "regardless of county population, county sheriffs must be compensated on a salary basis. A sheriff, paid on a salary basis, ‘receives the salary instead of all fees, commissions, and other compensation the officer would otherwise be authorized to keep." "While article XVI, section 61 requires that a fee of office earned by a county officer ‘shall be paid into the county treasury,' it is not a grant of authority for the acceptance of a fee," the ruling continues. In summary, Abbott concluded such payments are illegal, "Neither the Texas Constitution nor Texas statutes authorize the person holding the office of county sheriff to be paid an administrative fee by a private organization." McLennan County Judge Jim Lewis told News Channel 25 the ruling was based on a "fee" opinion and not a "supplement" opinion, and a fee is based on the number of inmates being housed in the jail. "The supplement doesn't matter whether you have one or one thousand inmates, so that's the difference is what our attorneys tell us," Lewis explained. When asked if the attorneys said that after today's ruling, Lewis answered "No, that's what they told us all along". Lewis also said Sheriff Lynch isn't paid by Civigenics, "the fee is not paid to him by the company, the fee is paid to the County and the Commissioners Court selects to supplement the Sheriff's salary. It's important to understand that," Lewis said. "He's not receiving a fee by any stretch of the imagination." The County Judge said applying Wednesday's ruling out of Austin to McLennan County's situation is like "comparing apples to oranges". "We're doing everything the attorneys are telling us to do," Lewis added. The annual supplement, as Lewis called it, has been a source of controversy for years from critics of Lynch and candidates for the Sheriff position in election years.

September 26, 2009 Waco Tribune-Herald
When the new Jack Harwell Detention Center is ready for prisoners, McLennan County Sheriff Larry Lynch will be responsible for up to 800 additional inmates, but the stipend he is paid in the contract with the private detention company that will operate it will not increase. The extra $1,000 a month that Lynch is paid by the county in its contract with Community Education Centers has been a source of contention since before CEC acquired the former CiviGenics and before Lynch became sheriff. By statute, a private detention company cannot set up shop in a county without the authorization of the sheriff. And in some of those counties, the company pays a stipend to the county, which is passed on to the sheriff as part of his salary. The practice was questioned again last year during spirited debates among county officials about whether to build the privately run facility on State Highway 6 and whether to allow CEC or another company to take all of the county’s jail operations private. Lynch and his predecessors, Bob Mitchell and Jack Harwell, have all collected the extra pay through the private jail contract. All have said that it gave them extra responsibilities to see that all detention facilities in this county that hold county prisoners are in compliance with state standards and run properly. Critics of jail privatization in general, and the sheriff stipend in particular, include the largest law enforcement union in the state, Combined Law Enforcement Associations of Texas (CLEAT). A bill to ban such stipends did not pass in the last legislative session. “What we have done is legalize something that is ethically and morally wrong,” CLEAT spokesman Charley Wilkison said of the stipend. “It constitutes a clear financial interest between the sheriff and the for-profit companies. Can he take money from the people who provide vests to the deputies? Can he take money from the fleet dealer who sells cars to the county? Can he take money from any of the food vendors? If that had happened, a grand jury would be visiting on this issue right now.” Despite taking on more responsibilities with the opening later this year or early next year of the new 816-bed private jail adjacent to the county jail, Lynch said the county’s contract covering the new facility does not include more funds for him filtering down from CEC. Lynch’s regular salary is $92,881, and the county pays him $12,000 a year in the CEC contract and $140 a month in longevity pay. Lynch declined to discuss the stipend, saying it is old news. He was more eager to talk about the breathing room his department will have when the new facility opens, finally putting an end to the constant juggling act county officials perform because of jail overcrowding. The county jail population was 1,009 on Friday. Capacity at the State Highway 6 jail is 930, while capacity at the CEC-run McLennan County Detention Center downtown, which the county has used to hold prisoner overflow, is about 300. The new facility will hold federal detainees, primarily, said Lynch and County Judge Jim Lewis. However, the county also will house overflow prisoners there and at the downtown facility, they said. CEC also plans to contract with other agencies to house prisoners. A bill that would have made it a state jail felony for a sheriff to accept a stipend in a contract with a private detention company made it out of the House County Affairs Committee during the past legislative session but died on the House floor without a vote, Wilkison said. CEC operates a 1,000-bed facility in Limestone County. Sheriff Dennis Wilson, whose county annual salary is $49,457, is paid a $24,000 stipend yearly by the county in its contract with CEC, Wilson said. CEC spokesman Bob Prince, a retired Texas Ranger captain, said not all CEC contracts with Texas counties include stipends for sheriffs. “That is entirely up to the commissioners court to decide,” Prince said. “That is not a road we go down. The original contract we had in Waco, that was put in and that was what was agreed to.” Recently, Adan Munoz Jr., executive director of the Texas Commission on Jail Standards, sent out a memo warning counties to pay strict attention to contracts with food vendors, noting that sheriffs in Potter and Bexar counties hit legal snares recently in their dealings with food vendors. He said a state representative asked him to send the memo about food vendors. However, it could have included warnings in many other areas, including dealings with private detention companies, Munoz said. “We suggest that they consult with local attorneys about any potential conflicts,” Munoz said. “It is based on appearance and suspicion. Unfortunately, many people react on mere appearance without knowing the full story.”

February 7, 2009 Tribune-Herald
The warden of a privately operated jail in Waco says his staff had corrected all but one deficiency noted in a December inspection before he met this week with the Texas Commission on Jail Standards. Despite the improvements, the commission still placed the downtown McLennan County Detention Center under a remedial order until officials from Community Education Centers, which leases the jail from McLennan County, take further corrective measures and another inspection is conducted. Warden Mike Wilson said the only issue remaining that needs to be addressed is replacing an intercom system. He said CEC will pay $9,950 for the new system, adding that he will not ask McLennan County officials to foot the bill. “Everything that they cited us for, with one exception, was corrected before we ever went down to Austin on Thursday,” Wilson said. “Everything else has been corrected and we are in good shape.” The county has leased the Columbus Avenue jail to a private company since 1998. In the past year, the county also has been using the jail as an overflow facility when the county jail on State Highway 6 becomes filled beyond capacity. The most serious issue cited in the remedial order was that CEC officials failed to properly maintain a 1-to-48 staff-to-inmate ratio. The order limited the number of inmates the facility could house before it hired more guards, thus cutting profits from CEC’s contracts with federal agencies to house prisoners. Wilson said the order stemmed from several weekends on the night shift in October and November when the jail was short-staffed. Additional officers were hired immediately to fill the void, putting the jail back into compliance, the warden said. Last month, an 18-year-old former CEC guard was indicted for providing contraband to inmates for reportedly allowing two of his former high school buddies who landed in jail to use his cell phone. Other citations that have been corrected, Wilson said, was a determination that inmates were placed in cells before they were properly classified to assess their threat levels and that water pressure and water temperature were insufficient in certain areas of the jail.

January 29, 2009 Herald-Tribune
The state prison system apparently is not alone when it comes to prisoners getting access to cell phones. A McLennan County grand jury Wednesday indicted a former guard at the privately operated McLennan County Detention Center on Columbus Avenue on a charge of giving contraband to inmates at a secure facility, a third-degree felony punishable by up to 10 years in prison. Michael Ray Hamilton III, an 18-year-old former jail guard known as “Big Mike” to inmates, was indicted for allowing two prisoners, Morgan Dyer and Chris McWilliams, to use his cell phone to make calls in October, authorities said. The use of cell phones by inmates is prohibited in detention centers, according to records filed in the case. Hamilton and both inmates gave written statements to McLennan County Sheriff’s Office investigators about use of the phone, an affidavit to support Hamilton’s arrest said. A man who identified himself as a warden at the downtown jail, which is operated by Community Education Centers in a lease agreement with McLennan County, referred questions about Hamilton to the sheriff’s office. He declined to give his name.

November 18, 2008 Waco Tribune
Construction of the new jail on State Highway 6 has already been delayed as the volatile U.S. financial market threatens financing for the project. The commissioner’s court on Tuesday delayed issuing project revenue bonds to finance the new jail for the third consecutive week because of currently high bond interest rates. New Jersey-based Community Education Centers, which will build and operate the new jail, would be responsible for paying the interest on the bonds that the county sells to third party financial houses. County Judge Jim Lewis said the county had hoped to break ground for the new jail in November. However, the county is waiting to see whether the financial markets stabilize, allowing for reasonable bond interest rates. In the meantime, Lewis said, the project cannot go forward.

October 20, 2008 Tribune-Herald
McLennan County Sheriff Larry Lynch is facing off once again with Charles Hutyra, a West resident who has long voiced criticism of how the sheriff’s department operates. Hutyra previously ran for sheriff as a write-in candidate in 2000 and again as the Democratic nominee in 2004, winning about one-third of the vote. One issue the candidates disagree on is jail privatization. After weeks of outcry by jailers concerned about the impact of privatization on their jobs and retirement benefits, the McLennan County Commissioners Court voted for the sheriff’s office to continue to run the jail on State Highway 6, while New Jersey-based Community Education Centers would continue to lease and operate the downtown jail. “We were in need of more space to meet our growing inmate population, especially our rising female (inmate) population,” Lynch said. “I don’t think they can get the jail built fast enough.” Hutyra said he is opposed to jail privatization and said he would work to reverse the CEC contract on the downtown jail. He said he would also try to stop the construction of the new jail on State Highway 6. “If the taxpayers have already paid for the jail downtown, why not utilize something you already own instead of leasing it out to someone else?” Hutyra said. “Then in three years we could look at it and see if we need a new jail and then start the process to look for bids, because with this thing, only one bid (was) submitted out of 14 companies (contacted for bids), it’s so obvious what’s going on.” Hale Mills Construction Ltd., the builder of the new jail, has already submitted a preliminary building schematic to the jail commission. Lynch drew criticism from jailers for his absence at the commissioners court meetings and for not speaking out against the privatization. However, he said it was not his decision to make. “It was out of my hands,” Lynch said. “It was up to the courts to decide what to do with the jails, and I could only wait and see what would happen.” Rick White, vice president of the McLennan County Sheriff Officer’s Association, said jail management is still a critical issue in the sheriff’s department. Many jail workers are concerned that the county plans to privatize all of its jails in the future, he said. “The detention service is a big part of the sheriff’s responsibility,” White said. “I think that folks working in the jail need some reassurance that their jobs are not in jeopardy and that they can continue to go on the career path that they’ve chosen in providing services to the county.” Hutyra said he also takes issue with the sheriff receiving an extra $12,000 each year from CEC through the privatization deal on the downtown jail. The contract bonus was negotiated when the late Jack Harwell was the sheriff. “If you can’t live off the $87,585 that the taxpayers are giving you, you need to get another job,” Hutyra said. “I would tell the county to take the extra $12,000 and donate it to Caritas.”

October 1, 2008 Waco Tribune
Curious: A county pays a contractor to run a jail. Then the contractor pays the county for oversight of it. Curiouser: The sheriff, who must authorize such a contract, gets the money. This is the case with McLennan County’s agreement with Community Education Centers (formerly CiviGenics) to operate its downtown jail and build a Highway 6 jail right alongside the 22-year-old county-run jail. Thanks to a pass-through payment from CEC, the county pays Sheriff Larry Lynch $12,000 extra, above his $87,558 annual salary, because of the administrative and monitoring duties associated with the private jail. McLennan County isn’t alone in doing this. Many counties do. Lynch’s predecessor, Jack Harwell, got an increment under comparable terms. State Rep. Kevin Bailey, D-Houston, who chairs the Texas House of Representatives committee on urban affairs, has asked the Texas attorney general to rule on the legality of such payments. If upheld by the A.G., lawmakers need to stop the practice when they convene in January. No sweeteners should be in play when contractors seek to perform a public function. Yes, supervising the work of a contractor takes time for a sheriff. Whatever the demands, the cost should be factored into whatever savings the county projects it will realize from contracting. Such payments don’t necessarily cloud a sheriff’s judgment on privatizing. But the appearance of conflicts of interest alone should be sufficient reason for the Legislature to act. Lynch told the Trib editorial board Monday that privatization “is a fact that’s here.” Not necessarily. Indeed, the county should always keep its options open, as it did when considering contracting out its entire jail operations. It got only one bidder — CEC. With jailers in an open revolt, commissioners voted not to proceed. However, CEC will be building the new Highway 6 jail while it continues to operate the downtown jail, where it houses federal prisoners and overflow occupants of the county jail. Privatization presents any number of problems that should make it a less-than-automatic call for governing boards. One is the potential that the contractor will cut corners to increase profit and undermine the quality of its services. One is public information withheld when a contractor can blunt inquiries because they pertain to proprietary matters. And there’s the possibility that contractors can buy into public officials’ good graces with under-the-table or over-the-table inducements. Privatizing should hinge on its merits alone, not on other considerations.

September 21, 2008 Waco Tribune-Herald
The chairman of the Texas House of Representatives committee on urban affairs has asked the state attorney general to determine whether it is legal for a sheriff to accept a fee for work with a private detention company that contracts with his county to operate a county jail. While the request from Kevin Bailey, D-Houston, does not mention any sheriff or county by name, the letter was generated after recent deliberations by McLennan County over whether to renew its contract with Community Education Centers (formerly CiviGenics) to operate its downtown jail and to contract with CEC to build a new jail on State Highway 6. Such contracts cannot be executed without the authorization of the county sheriff. About 50 members from the McLennan County Sheriff’s Association asked Sheriff Larry Lynch in July to say no to the contracts. Lynch did not return phone messages seeking comment for this story. McLennan County commissioners voted to extend the contract with CEC to operate the downtown jail and are negotiating a contract with CEC to build a new jail. “We think there is a legitimate question about it,” said Charley Wilkison, political and legislative director for Combined Law Enforcement Associations of Texas. “Since the sheriff is the only person who can decide if a privatization issue is moving forward, then can take money that has simply been cleaned up in the process of budgeting but is identical and numerically the same, can you in a straightforward manner determine privatization in that county?” Wilkison said CLEAT officials asked Bailey to seek the attorney general’s ruling. The county pays Lynch $12,000 extra, above his $87,558 annual salary, because of the additional administrative and monitoring duties associated with the private jail. That salary supplement has been in place since the late Jack Harwell was sheriff and the county first leased the downtown jail to CiviGenics in 1999. Mike Dixon, a Waco attorney who represents the county, said the salary supplement has never been a secret and is noted in annual newspaper advertisements the county is required to run to list the annual salaries of elected officials. “It would be nice if they actually put the right facts in the request instead of their one-sided facts,” Dixon said. “The real facts are that any payments are meant to be a recoupment by the county of administrative expenses, and those are paid to the county, not to the sheriff. The county determines in the budget whether or not to give the sheriff those additional monies as part of his salary. They are trying to say the sheriff gets paid directly from the operators. That does not occur. “They obviously have their stingers out for him over all the jail deals, and they haven’t bothered to inconvenience themselves with the truth. They have asked for an opinion based on a skewed set of facts,” Dixon said. Wilkison said at the heart of the matter is whether the sheriff has a financial interest in the private contract because of the salary supplement. The Texas Government Code says “the commissioners court may not contract with a private organization in which a member of the court or an elected or appointed peace officer who serves in the county has a financial interest.” Bailey’s letter asks for clarification. “Although the sheriff may not actually be a shareholder of the private organization and hold a shareholder’s interest in the private organization, there can be no doubt that the sheriff would have a ‘financial interest’ in the private organization’s contract with the county if the sheriff receives a sizable administrative fee after approving of the contract if the contract includes such an administrative fee to the sheriff,” Bailey wrote in his letter. “Thus, such an arrangement would violate the spirit and intent, if not the language of the law.” Regardless of the ruling, Wilkison says, he thinks the debate will spawn new legislation, if only to clear up any questions. “Somebody down in Austin is going to fix this,” he said. “This is almost like a bad Western movie. A big-money stakeholder is deciding indirectly what is going to happen.” The attorney general’s office has asked interested parties, including CLEAT and the Texas Sheriffs Association, to file briefs on the matter, Wilkison said.

August 11, 2008 Waco Tribune
A spokesman for the state’s largest law enforcement association is calling for state and federal investigations into dealings between McLennan County officials and a private detention corporation as the county continues to negotiate jail contracts. “First of all, we don’t believe anything that officials in McLennan County say anymore,” said Charley Wilkison, political and legislative director for the 16,500-member Combined Law Enforcement Agencies of Texas. “The credibility gap in this county is incredible.” McLennan County Judge Jim Lewis, county commissioners and Sheriff Larry Lynch have been wrestling for years with the county’s jail overcrowding problem. County officials say they sought proposals from 14 companies nationwide on a variety of options, including privatizing the entire county jail system and building a new, 1,000- bed jail. The county received proposals from just one company, CEC, which has had a contract to operate the downtown county jail since 1999. CEC contracts with several agencies, primarily federal, to keep prisoners at the downtown jail. The company’s McLennan County contract, which pays Lynch $12,000 above his county salary of $88,000 to oversee the downtown jail, expires Oct. 1. Commissioners voted last week for the sheriff to maintain control and operation of the county jail on State Highway 6, on a recommendation from Lynch and after weekly protests from about 50 jailers. Precinct 3 Commissioner Joe Mashek has called for the county to take back operation of the downtown jail to help alleviate overcrowding and give the county more time to study the situation. Wilkison said he will ask Texas Attorney General Greg Abbott to investigate whether Lynch violated the Texas Public Information Act by failing to respond to CLEAT’s open records requests for all correspondence between Lynch and CEC officials. He said he also is seeking state and federal investigations about whether Lynch lawfully and ethically can accept money from the private vendor or whether it is a conflict of interest when he helps decide the fate of the jail system. “The sheriff has taken $91,000 of personal money that goes into his bank account, and then he says, ‘I am still able to decide. I am still OK deciding whether it is in our best interest to privatize.’ That old dog won’t hunt. Nobody here believes that.” The contract between the county and CEC, then called CiviGenics, originated when the late Jack Harwell was sheriff. The part of the contract which calls for payments to the sheriff, Lewis says, has not changed, although it has been renewed since Lynch took office. Lynch did not return phone calls to his office or cell phone today. Wilkison also charges that county officials should come up with more efficient ways to clear out the jail, especially of non-violent, first-offenders. He claims the CEC contract pays Lynch more for more prisoners. “We think inmates are being kept in jail to create an artificial public safety crisis so the hue and cry for a new jail can come and the new jail can be privatized and built by CEC,” Wilkison said. Lewis scoffed at that notion and said that Wilkison’s claims are off- target. He said Lynch is paid the same in the contract with CEC whether there are 300 prisoners or none. “It is still his responsibility to oversee that jail,” Lewis said. “By statute, it is the sheriff’s responsibility, whether it was Jack or Larry. That contract has not changed, and up until 20 months ago, we didn’t have a prisoner in that jail. So does that logic make any sense?” Wilkison also charged that Lewis’ office is using “stalling tactics” by asking for an attorney general’s opinion about whether his office has to release 170 pages from CLEAT’s open records request that Lewis claims are attorney-client privilege. Wilkison said Lewis’s office has released 1,300 pages to CLEAT pursuant to the request. “We believe somewhere in that 170 pages will be some of the information that will tell the tale about how you get only one bid on a private prison,” Wilkison said. “If they have nothing to hide, then they have nothing to worry about. If they have done nothing wrong, then they should release it anyway.” Lewis said attorney-client communication is privileged and exempt from open records requests. “That is just as standard as everything,” Lewis said. Commissioners will continue to discuss jail proposals at their weekly meeting Tuesday morning.

July 30, 2008 Waco Tribune-Herald
The McLennan County Sheriff’s Office is investigating complaints from two former female downtown jail inmates that guards at the privately operated McLennan County Detention Center are selling drugs and having sex with female inmates. The investigation was launched earlier this month after a 29-year-old inmate at the downtown jail facility reportedly was caught with a marijuana cigarette in her bra. While investigators were trying to find out how she got the drugs into the jail, the woman, who has at least two felony convictions for drug possession, reported that guards are having sex with female inmates and selling drugs to inmates, four sources familiar with the investigation told the Tribune-Herald. The 329-inmate facility is operated by Community Education Centers, formerly CiviGenics, in a contract with the county that expires Oct. 1. The investigation is being conducted as the county negotiates solely with CEC to build and operate a new, 1,000-bed facility next to the county jail on State Highway 6, retain operation of the MCDC on Columbus Avenue or several other options being considered by the county to help ease its burgeoning jail population. Since the woman reported her allegations, another female inmate also has given a statement with similar claims to sheriff’s investigators, the sources said. After speaking to investigators, that woman, who was being housed at the downtown detention center while waiting to begin a five-year state prison term for delivery of drugs, was shipped off to prison this week, the sources said. George Vose, senior vice president for operations at the New Jersey-based CEC, said Tuesday that he could not comment on any pending investigation, saying it would be improper to interfere with the work of the sheriff’s office. “Certainly, it is our intent and history to cooperate with any kind of law enforcement investigation, as we often do,” Vose said. Sheriff’s office Chief Deputy Randy Plemons would neither confirm nor deny reports that his detectives are investigating the two women’s claims of improper sex and drug dealing among MCDC guards. “I am not going to comment on an ongoing investigation. We have to substantiate if this is even going on,” Plemons said, adding that felons often do not tell the truth. Plemons would not speculate about how often such accusations surface but said the Highway 6 jail has two full-time detectives to investigate crimes committed in jail and grievances filed by inmates. Sheriff’s investigator Joe Scaramucci wrote in a sworn complaint charging one of the women with possession of a prohibited substance in a correctional facility, a third-degree felony, that the woman said she found the marijuana cigarette July 12 under her bed. The woman since has been transferred to the Highway 6 county jail. “She stated that she believed the substance was left by another inmate as payment for assisting the other inmate with moving,” according to the affidavit. “She stated that she placed the substance in her bra so that, at visitation, she could trade it for commissary or obtain a lighter.” The affidavit did not specify with whom the woman wanted to trade the drugs. No other charges have been filed, but the investigation continues, sources said. Three guards at a CEC-operated facility in Liberty County recently were arrested on charges of having sex with inmates, and two others were arrested on allegations that they sold drugs to inmates, according to published reports. In November 2001, Sherman Lamont Fields escaped from the MCDC, then operated by CiviGenics, and killed Suncerey Coleman, a young mother of three children, after bribing a guard to help him escape. Fields, a federal prisoner at the time of his escape, was captured and given a federal death sentence. Fields escaped from the downtown jail when Benny Garrett, a jail guard, slipped him a key to the fifth-floor fire escape door after Fields promised to give Garrett $5,000 after his escape. Garrett, 26, formerly of Marlin, pleaded guilty to aiding Fields’ escape, testified against Fields and was sentenced to four years in federal prison.

New Jersey Department of Corrections
June 16, 2011 NJ 101.5
State Comptroller Matt Boxer is questioning the State Department of Corrections (DOC) about the state's largest halfway house provider, Education and Health Centers of America, Inc. (EHCA), because of its subcontracting arrangement with a for-profit company, Community Education Centers, Inc. (CEC). Under state law, only non-profits can provide halfway house services. Boxer says EHCA pays CEC the entire contracted per diem rates. Of $400 million the state has paid EHCA since 1997, EHCA has paid CEC approximately $390 million to provide "all the services" under EHCA's public contracts, including the "operation, support services management and maintenance" of the facilities. "One of the issues that we found is that there are questions about the eligibility of one of those halfway houses to be a part of this program," explains Boxer. "We sent a letter to the Department of Corrections suggesting that on this issue they seek formal legal advice from the (State) Attorney General's Office and they've agreed to do that." Bill Palatucci is one of Governor Chris Christie's closest allies. He's a senior vice president and general counsel for public affairs at CEC and the director of development at EHCA. He says CEC has had no new contracts since 1998. "We're still operating under the same agreement that was approved by Attorney General back then, so we're a bit puzzled by the report," says Palatucci. "We'll take a look and talk to the Department of Corrections about it."

New Jersey Legislature
July 27, 2011 New York Times
Three weeks ago, Essex County, N.J., announced that it was seeking a company to run a 450-bed immigrant detention center, hoping to take advantage of a federally financed initiative to set up such facilities with better supervision and medical care. The county said the contracting process was open to any company. But behind the scenes, it appears that officials have a clear favorite: Community Education Centers, which has a checkered record in immigrant detention but counts one of Gov. Chris Christie’s closest confidants as a senior vice president. The company’s executives are also political backers of the county executive, Joseph N. DiVincenzo Jr., a prominent ally of Mr. Christie. The county’s bidding rules specified that visitors to the detention center greet detainees “in the gymnasium” — a requirement that seemed to point to an existing facility, Delaney Hall in Newark, operated by Community Education Centers. Bidders were given 23 days to submit applications, an unusually short deadline for a multimillion-dollar contract. Community Education Centers itself seemed to act as if its selection were a done deal. The deadline for bids is Thursday, but the company posted advertisements on its Web site weeks ago to fill five jobs working with immigrant detainees at the facility. And this week, federal immigration officials and Community Education staff members gave tours of Delaney Hall to advocates for immigrants, telling them that it would probably be the new facility. The advocates were not shown other sites. Questioned about the selection process, Essex officials said the bidding was fair and open to any company. A spokesman for Mr. Christie said the governor’s office had no involvement in the contract. Federal and local officials have not indicated the size of the contract for the winning bidder, but it appears the total could amount to $8 million to $10 million annually. Government at all levels has pushed to privatize prisons and detention centers in recent decades, trying to save money and improve services. The federal government, which has been apprehending a growing number of immigrants, plans to use private companies to help overhaul a detention system that includes a patchwork of facilities. But privatized prisons and detention centers have at times became ensnared in scandals over mistreatment of their charges. In fact, Community Education Centers, based in West Caldwell, N.J., was seriously penalized in 2008 under an earlier contract to house immigrants at Delaney Hall. After an immigrant escaped, officials responded by removing the remaining 120 detainees from the company’s supervision and placing them in a public jail. Immigrant detention centers typically house immigrants, both legal and illegal, who are facing deportation because of visa violations or criminal convictions. With a shortage of beds in the Northeast, the federal Immigration and Customs Enforcement agency announced plans last year to house hundreds of detainees in Essex County. Officials said the detainees would have better access to lawyers and consulates, enabling the authorities to curb the transfer of detainees to distant places like Texas. Community Education’s senior vice president is William J. Palatucci, Mr. Christie’s political mentor and former law partner, and one of the state’s well-known Republican strategists. Mr. Palatucci was a major fund-raiser for George W. Bush’s 2000 presidential campaign, and recommended to the Bush administration that it nominate Mr. Christie for United States attorney for New Jersey, a job he held from 2002 to 2009. Community Education and its executives are major supporters of Mr. DiVincenzo, one of the most powerful politicians in North Jersey. Community Education employees, including senior executives and several of their family members, have donated a total of $30,600 to Mr. DiVincenzo’s campaigns since 2006, according to disclosure records. Mr. DiVincenzo, the county executive since 2002, is also influential in Trenton. Though he is a Democrat, he has developed a close relationship with Mr. Christie, a Republican, who swore him in for his third term. Mr. DiVincenzo has said he agrees with 95 percent of what the governor is doing, and has broken ranks with his party to support Mr. Christie’s efforts to curb the pay and benefits of public employees. Mr. Christie’s press secretary, Michael Drewniak, said, “There is no basis whatsoever to bring the governor into this and doing so sounds like a total stretch.” Essex County’s counsel, James R. Paganelli, said neither Community Education nor any other company had the inside track for the contract. “We have a public bid looking for anybody who thinks they can provide these services,” Mr. Paganelli said. “I hope that this bid is as competitive as we can make it.” Mr. Paganelli said he expected as many as 30 companies to express interest, and he declined to speak about any bidder in particular. A Community Education spokesman, Christopher Greeder, said any claim that the company had “received favored status from Essex County is unfounded.” Mr. Greeder said Delaney Hall was fully accredited and had housed more than 80,000 individuals since its opening in 2000. Asked why the company had advertised for jobs at the detention center before it knew whether it had won the contract, he said: “As a private company, we often advertise for positions in advance of any contract award. We want to be prepared.” He added that there was no connection between campaign contributions given by company executives and government contracts. For their part, federal officials said they were already making plans to send immigrants to Delaney Hall because Essex specifically mentioned it in its proposal to the federal government. They were not aware that the county was considering other facilities, said Gillian M. Christensen, a spokeswoman for the immigration agency. Immigrant advocates called the contracting process severely flawed. Amy Gottlieb, director of the Immigrant Rights Program at the American Friends Service Committee, said, “The idea that a company can advertise a job before they have the contract is offensive, because the stakes are so high.” Although the details are still being made final, Immigration and Customs Enforcement plans to assign 800 immigrants to the Essex jail, which currently holds about 500, and plans to place an additional 450 detainees in Delaney Hall, which is nearby, Ms. Christensen said. To solicit bids, Essex County advertised in The Star-Ledger of Newark and posted the requirements on a county Web site, following standard procedure, according to Mr. Paganelli, the county counsel. He said county officials did not actively solicit companies to bid. By comparison, the New York State Office of General Services said that when the state issued contracts for specialized services, it advertised in multiple publications, posted the requirements online and contacted competing firms that perform similar services.

June 16, 2011 NJ 101.5
State Comptroller Matt Boxer is questioning the State Department of Corrections (DOC) about the state's largest halfway house provider, Education and Health Centers of America, Inc. (EHCA), because of its subcontracting arrangement with a for-profit company, Community Education Centers, Inc. (CEC). Under state law, only non-profits can provide halfway house services. Boxer says EHCA pays CEC the entire contracted per diem rates. Of $400 million the state has paid EHCA since 1997, EHCA has paid CEC approximately $390 million to provide "all the services" under EHCA's public contracts, including the "operation, support services management and maintenance" of the facilities. "One of the issues that we found is that there are questions about the eligibility of one of those halfway houses to be a part of this program," explains Boxer. "We sent a letter to the Department of Corrections suggesting that on this issue they seek formal legal advice from the (State) Attorney General's Office and they've agreed to do that." Bill Palatucci is one of Governor Chris Christie's closest allies. He's a senior vice president and general counsel for public affairs at CEC and the director of development at EHCA. He says CEC has had no new contracts since 1998. "We're still operating under the same agreement that was approved by Attorney General back then, so we're a bit puzzled by the report," says Palatucci. "We'll take a look and talk to the Department of Corrections about it."

July 8, 2010 The Star-Ledger
In a move certain to only increase speculation about Gov. Chris Christie’s political future beyond New Jersey, the Republican State Committee tonight elected Bill Palatucci, a close Christie friend, advisor and former law partner, as the state’s new male representative on the Republican National Committee. Palatucci, 52, replaces David Norcross, a former Republican State Committee chairman and 1976 U.S. Senate candidate who was elected committeeman in 1992. “I think in a small way I can just be the eyes and ears, not only for (Christie) but for the state party. Secondly, it’s nice to be able to be proud for New Jersey again and help export the ideas that are proving so successful right now in New Jersey down to the national scene,” said Palatucci. Palatucci denied speculation that Norcross, whose term does not end until 2012, was pressured to resign by Christie to make way for a close ally. “I think that’s unfair to David. David has been very clear that he was in his last term and he was always looking for the right time to step aside,” he said. Twenty-three of the state’s 42 Republican committee members showed up at the meeting at the Princeton Hyatt to vote for Palatucci by affirmation. Nobody else ran for the position and Norcross did not attend the meeting. Amanda Brown/The Star-LedgerDavid Norcross, in this 2004 file photo. Palatucci is senior vice president and general counsel for Community Education Centers in West Caldwell, which operates halfway houses for the reintegration of former prison inmates.

June 21, 2010 The Daily Journal
A close friend, political contributor and adviser to Gov. Chris Christie is a top-ranking employee of Community Education Centers Inc., the largest company providing the state with treatment centers for former inmates. Christie has said the state is in dire financial straits and has made massive cuts in his proposed fiscal 2011 budget, but funding for the treatment centers -- traditionally known as halfway houses -- is set to increase $3.1 million. It's one of the rare programs to receive additional funding under Christie. The final treatment center budget under the state Department of Corrections will be $64.6 million, if the Legislature approves the budget. Deborah Howlett, executive director of New Jersey Policy Perspective and a former official in Gov. Jon S. Corzine's administration, said, "I've heard Gov. Christie say many times not to take a cup of coffee from someone. With other social services programs being cut to the bone, a program that could benefit a friend is increased. Why?" *Longtime Christie adviser William J. Palatucci, a senior vice president and general counsel for Community Education Centers in West Caldwell, told Gannett New Jersey he's "deregistered as a lobbyist" and "will not lobby in New Jersey on behalf of CEC."* *Palatucci's relationship with Christie goes back at least to the 1990s. Palatucci helped run Christie's gubernatorial campaign last year and was co-chair of the governor's inaugural committee. Palatucci personally has contributed $26,650 to the GOP since 1985.* CEC has contributed a total of$372,350 to both parties during that time, mostly to Democrats, and its chairman, John J. Clancy, has contributed $138,525, mostly to Democrats. Michael Drewniak, press secretary for the governor, said: "Bill Palatucci has been involved with Mr. Clancy's company for a very long time. Mr. Clancy's bids will be judged on their merits, and that's the only consideration that is involved. Any suggestion of outside influence is not based on the facts." According to Corrections Commissioner Gary M. Lanigan, his department currently contracts for a total of 3,029 beds in residential treatment programs. During the course of a typical year, anywhere from8,500 to8,800 inmates go through treatment facilities as a way to help them re-enter society, according to the DOC. Lanigan said Friday that legislation passed last year mandated the Department of Corrections must maintain 100 percent occupancy in the beds under contract. Previously, 95 percent occupancy was required. That change in the law accounts for the proposed $3.1 million budget increase, he said. The state is in the process of awarding new contracts for the treatment programs. The final decision, expected June 30, will be made by Lanigan, following a review both by an evaluation committee and state budget officials who examine the finances of each company submitting bids, DOC spokesman Matt Schuman said. Eight vendors currently have contracts with the DOC. CEC's relationship with the state is complex. CEC, a for-profit company, "does not hold any state contracts," company spokesman Christopher Greeder said. But CEC provides services for a nonprofit, Wall-based company called Education and Health Centers of America. "They hold the contracts," Greeder said. Palatucci was listed as a paid director of development for Education and Health Centers, while Clancy, the CEO and chairman of CEC, was listed as the paid president, according to the nonprofit's 2009 IRS tax report. Under pay-to-play laws, a for-profit business receiving $50,000 or more through agreements or contracts with New Jersey public entities is required to file annual disclosures of its contributions with the election commission, according to the Department of Treasury. Pay-to-play disclosure laws were passed in recent years to prevent undue influence, or the appearance of undue influence, by political contributors in the state's multibillion-dollar contracting process. However, because the nonprofit Education and Health Centers is awarded the contracts with the state, the for-profit CEC -- which provides the bulk of services for the Education and Health Centers contracts -- is not required to file pay-to-play disclosures with the commission. Nonprofits, and any political contributions by its officers, were made exempt from the 2005 pay-to-play reporting laws in 2008. Palatucci said he spoke with Christie after he was elected and told him he would no longer lobby on behalf of CEC in New Jersey. "The governor accepted this," he said. Lanigan said Palatucci's relationship with the governor "no way impacts the process. My job is to keep up a firewall, to make sure the process has not been tainted." In the current contract Education and Health Centers has with the Department of Corrections, CEC provides 1,687 beds -- 1,226 in assessment centers and 461 in treatment programs, Lanigan said. Most of CEC's New Jersey beds are in Newark and Trenton. The rate charged the department is $62 per inmate per day in a treatment program and between $70 and $75 in an assessment center, he added. An assessment center is a facility an offender goes to after being released from prison. That inmate then will be placed in a treatment center for substance, behavioral or other problems. The department spent $61.5 million this budget year and plans to spend $64.6 million in the next fiscal year, which starts July 1, according to the state budget. Joseph Marbach, dean of the College of Arts & Sciences at Seton Hall University, says the state owes the public more of an explanation. "Why is this portion of the budget going up when so many things are being slashed?" Marbach said. "What's the underlying reason? Anything that might benefit Mr. Christie's friend, Mr. Palatucci? Somebody's going to benefit from government, one way or another. The governor has been very vocal in criticizing these kinds of relationships. For consistency's sake, you'd think Mr. Palatucci would take a leave of absence or recuse himself while Mr. Christie is in office." Palatucci said he is "an advocate for alternatives to incarceration, and none of that requires me to lobby for CEC. ... I told the governor in January, 'I'm not going to talk to you about my company.'"

Parker County Jail, Parker County, Texas
February 23, 2010 Mineral Wells Index
The second arson suspect was released Saturday from the Parker County jail after posting $50,000 bond on a charge of arson. Like former Mineral Wells patrolman John Gore, official records for alleged arson accomplice Jeff Gulley show no issues during his time working as a patrol officer for Ranger in late 2006 and 2007. Current Ranger Police Chief Elton McCoy, who was not with the department at the time, said Gulley's personnel records indicate Gulley resigned in good standing to pursue another job in June 2007 and show no record of write-ups during his several months on the Ranger police force. Gulley – along with Gore, who faces four counts of arson – held a valid peace officer license in the state when he was arrested Thursday on a charge of arson. Gulley also holds a temporary jailer license from the state. Warden Ron King of Community Education Centers, the contracting company managing the Parker County jail, confirmed Monday that Gulley worked as a jailer in Parker County between June and September and was not rehireable when he left. Before receiving a temporary jailers license from the state, Gulley would have had to pass a college entrance exam, a psychological exam and a physical exam, according to King. Gulley also worked as a correctional officer with Corrections Corporation of America at the Mineral Wells pre-parole facility between November 2008 and December 2009, CCA spokesperson Maria White confirmed Monday. Fellow officers who worked with Gore expressed surprise last week at his arrest. Police Chief Mike McAllester said Gore had never been disciplined and was a model officer. McAllester said they are investigating fires as far back as 2001. Gore and Gulley are reported to be close friends and have known each other since they attended school together. Gore was charged with three counts of arson Tuesday after he was stopped by a Mineral Wells patrol officer near three suspicious fires in the Wolters Industrial Park area and questioned. During the initial interview, Gore reportedly provided information about seven fires, including the three fires Tuesday, and provided information about a second suspect, according to police. Parker County officials reported Gore confessed to starting a fire Feb. 3 which destroyed a two-story storage building and implicated Gulley. During two interviews with the Parker County Fire Marshal's office last week, Gulley allegedly “exposed his involvement in the Feb. 3 arson” and confessed to being involved with two other fires, a grass fire and a structure fire that did not fully ignite.

San Luis Federal Detention Facility, San Luis, Arizona
May 1, 2010 Yuma Sun
A legal battle is shaping up between San Luis and the company contracted to manage the city-owned prison for federal inmates. Hundreds of thousands of dollars could be at stake. City officials declined to discuss the amount or any other details about the money they say Civigenics owes. The city council last week voted to authorize the city to proceed with a lawsuit against Civigenics and Community Education Centers (CEC) to recover money San Luis says the firm owes the city from the two-year period that they operated the San Luis Regional Detention Center. Asked to comment in response to the council's action, CEC said in an e-mailed statement to Bajo El Sol that it "reserves comment as to the specifics set forth by the city, as CEC is currently pursuing litigation against the city for nearly one million dollars in due and unpaid monies for services CEC rendered under its contract." Now based in New Jersey, the firm was contracted by San Luis in 2006 to build the prison, at a cost of $27 million funded by municipal bonds, then take over its operation. The city anticipated receiving between $200,000 and $400,000 annually in payments from the federal government for housing federal prisoners in the 500-bed prison. The bonds were to be paid off with money from the payments. The prison opened in February 2007 with a 450-bed capacity, and Civigenics committed to expand it to house 500 within a year, according to city officials. But as of April 2008, it was holding only 330, and Civigenics asked the city for more time to bring up the inmate population. The design of the prison, located on Avenue D on the east side of the city, allows for an expansion to accommodate up to 1,000 prisoners held by the federal government pending determination of their immigration status. In August, the city switched to a new contractor to manage the prison, Emerald Companies, after Civigenics failed to reach occupancy goals. Louisiana-based Emerald continues to operate the prison. "I can't say anything about the lawsuit. We don't know what it's going to be until its prepared," Vice Mayor Marco Antonio Reyes Jr. said after the council's vote Wednesday. "What we did today was approve the process starting." City Attorney Glenn Gimbut said lawsuit would be filed next week.

Two Rivers Detention Center, Hardin, Montana
The Rainmakers Banking on private prisons in the fleecing of small-town America. By Beau Hodai (Click here)

March 28, 2011 NPR
Private Prison Promises Leave Texas Towns In Trouble by John Burnett The country with the highest incarceration rate in the world — the United States — is supporting a $3 billion private prison industry. In Texas, where free enterprise meets law and order, there are more for-profit prisons than any other state. But because of a growing inmate shortage, some private jails cannot fill empty cells, leaving some towns wishing they'd never gotten in the prison business. It seemed like a good idea at the time when the west Texas farming town of Littlefield borrowed $10 million and built the Bill Clayton Detention Center in a cotton field south of town in 2000. The charmless steel-and-cement-block buildings ringed with razor wire would provide jobs to keep young people from moving to Lubbock or Dallas. For eight years, the prison was a good employer. Idaho and Wyoming paid for prisoners to serve time there. But two years ago, Idaho pulled out all of its contract inmates because of a budget crunch at home. There was also a scandal surrounding the suicide of an inmate. Shortly afterward, the for-profit operator, GEO Group, gave notice that it was leaving, too. One hundred prison jobs disappeared. The facility has been empty ever since. A Hard Sell "Maybe ... he'll help us to find somebody," says Littlefield City Manager Danny Davis good-naturedly when a reporter shows up for a tour. For sale or contract: a 372-bed, medium-security prison with double security fences, state-of-the-art control room, gymnasium, law library, classrooms and five living pods. Davis opens the gray steel door to a barren cell with bunk beds and stainless-steel furniture. "You can see the facility here. [It's] pretty austere, but from what I understand from a prison standpoint, it's better than most," he says, still trying to close the sale. For the past two years, Littlefield has had to come up with $65,000 a month to pay the note on the prison. That's $10 per resident of this little city. A Resident Burden Is the empty prison a big white elephant for the city of Littlefield? "Is it something we have that we'd rather not have? Well, today that would probably be the case," Davis says. To avoid defaulting on the loan, Littlefield has raised property taxes, increased water and sewer fees, laid off city employees and held off buying a new police car. Still, the city's bond rating has tanked. The village elders drinking coffee at the White Kitchen cafe are not happy about the way things have turned out. "It was never voted on by the citizens of Littlefield; [it] is stuck in their craw," says Carl Enloe, retired from Atmos Energy. "They have to pay for it. And the people who's got it going are all up and gone and they left us... " "...Holdin' the bag!" says Tommy Kelton, another Atmos retiree, completing the sentence. The Declining Prison Population The same thing has happened to communities across Texas. Once upon a time, it seems every small town wanted to be a prison town. But the 20-year private prison building boom is over. Some prisons are struggling outside Texas, too. Hardin, Mont., defaulted on its bond payments after trying, so far unsuccessfully, to fill its 464-bed minimum security prison. And a prison in Huerfano County, Colo., closed after Arizona pulled out its 700 inmates. According to the Bureau of Justice Statistics, the total correctional population in the United States is declining for the first time in three decades. Among the reasons: The crime rate is falling, sentencing alternatives mean fewer felons doing hard time and states everywhere are slashing budgets. The Texas legislature, looking for budget cuts, is contemplating shedding 2,000 contract prison beds. Statewide, more than half of all privately operated county jail beds are empty, according to figures from the Texas Commission on Jail Standards. "Too many times we've seen jails that have got into it and tried to make it a profitable business to make money off of it and they end up fallin' on their face," says Shannon Herklotz, assistant director of the commission. The packages look sweet. A town gets a new detention center without costing the taxpayers anything. The private operator finances, constructs and operates an oversized facility. The contract inmates pay off the debt and generate extra revenue. The economic model works fine until they can't find inmates. In Waco, McLennan County borrowed $49 million to build an 816-bed jail and charge day rates for bunk space. But today because of the convict shortage, the fortress east of town remains more than half empty. The sheriff and county judge, once champions of the new jail, now decline to comment on it. Former McLennan County Deputy Rick White, who opposed the jail, had this to say about the prison developers who put the deal together: "They get the corporations formed, they get the bonds sold, they get the facility built, their money is front-loaded, they take their money out. And then there's no reason for them to support the success of the facility." Two of Texas' busiest private prison consultants — James Parkey and Herb Bristow — declined repeated requests for interviews. The Inmate Market Private prison companies insist their future is sunny. A spokesman for the GEO Group declined to speak about the Littlefield prison, but he sent along a slew of press releases highlighting the company's new inmate contracts and prison expansions across the country. Corrections Corporation of America, the nation's largest private prison operator, says the demand for its facilities remains strong, particularly for federal immigration detainees. New Jersey-based Community Education Centers, which has been pulling out of unprofitable jails across Texas, issued a statement that "the current (jail) population fluctuation" is cyclical. One of the places where CEC is cancelling its contract is Falls County, in central Texas, where a for-profit jail addition is losing money. Now it's up to Falls County Judge Steve Sharp to hustle up jailbirds: "If somebody is out there charging $30 a day for an inmate, we need to charge $28. We really don't have a choice of not filling those beds," he said. Another place where they're desperate for inmates is Anson, the little town north of Abilene, Texas, once famous for its no-dancing law. Today, Jones County owns a brand-new $34 million prison and an $8 million county jail, both of which sit empty. The prison developers made their money and left. Then the Texas Department of Criminal Justice reneged on a contract to fill the new prison with parole violators. The county's Public Facility Corporation that borrowed the money to build the lockups owes $314,000 a month — with no paying inmates. They've got a year's worth of bond service payments set aside before county officials start to sweat. "The market has changed nationwide in the last 18 months or two years. It's certainly a different picture than when we started this project. And so we're continuing to work the problem," Jones County Judge Dale Spurgin says. Grayson County, north of Dallas, said no to privatizing its jail. Two years ago, the county was all set to build a $30 million, 750-bed behemoth twice as big as was needed. But the public got queasy and county officials ultimately scuttled the deal. "When you put the profit motive into a private jail, by design, in order to increase your dollars, your revenues, your profits, you need more folks in there and they need to stay longer," says Bill Magers, mayor of the county seat of Sherman, a leading opponent. When the supply of prison beds exceeds the demand for prison beds, there are beneficiaries. The overcrowded Harris County Jail in Houston, the nation's third largest, farms out about 1,000 prisoners to private jails. Littlefield and most other under-occupied facilities in Texas have all been in touch with Houston. "It really is a buyer's market right now, especially a county our size," says Capt. Robin Kinetsky, who is in charge of inmate processing for the Harris County Sheriffs Department. "They're really wanting to get our business. So, we're getting good deals." Nearby, disheveled and unsmiling men are brought from a holding cell to stand before a booking officer for their intake interviews. The detainees are wholly unaware that they may soon become the newest commodities of the volatile inmate market. Aarti Shahani contributed to this NPR News investigation and report.

March 15, 2010 AP
The leader of the Crow Tribe said Monday the southeastern Montana tribe is considering buying or leasing a long-vacant jail just outside the reservation. The proposal to take over Hardin's Two Rivers Detention Center remains in the planning stages, but Crow Chairman Cedric Black said talks are under way between the tribe and city representatives. One potential use for the dormant, 464-bed facility would be to remake it into a drug and alcohol treatment center. Black Eagle said that was just one of several options on the table. In recent years, the jail has been at the heart of a running feud between Hardin and state corrections officials who say the facility is not needed. With no inmate contracts despite years of aggressive marketing of the jail, the $27 million economic development project has turned into an embarrassment for rural Hardin - and a potential financial liability. City officials two years ago rejected an earlier takeover proposal offered by the Crow. The city saw that plan as a stealth attempt to annex part of Hardin, which is about 45 miles east of Billings. In 2008, the jail went into default on its bond payments. And last year, it was targeted by a California con artist, Michael Hilton, who convinced the city he was backed by investors eager to build a military training facility on the site. Hilton's scam fell apart amid revelations about his criminal history, and since then the city has been increasingly desperate to find inmates.

May 26, 2009 CNN
The tiny town of Hardin, Montana, is offering an answer to a very thorny question: Where should the nation put terror detainees if the prison at Guantanamo Bay, Cuba, is shut down by the end of the year as President Obama has pledged? Hardin, population 3,400, sits in the southeast corner of Montana, in the state's poorest county. Its small downtown is almost deserted at midday. The Dollar Store is going out of business. The Hardin Mini Mall is already shut. The town needs jobs -- and fast. Hardin borrowed $27 million through bonds to build the Two Rivers Regional Correctional Facility in hopes of creating new employment opportunities. The jail was ready for prisoners two years ago, but has yet to house a single prisoner. People here say politics in the capital of Helena has kept it empty. But the city council last month voted 5-0 to back a proposal to bring Gitmo detainees -- some of the most hardened terrorists in the world -- to the facility. "It would bring jobs. Believe it or not, it would even bring hope and opportunity," Greg Smith, Hardin's economic development director, told CNN. But a decision on whether it becomes a reality is a long way off. The state's congressional leaders have lined up against the plan. "Housing potential terrorists in Montana is not good for our state," Max Baucus, the state's senior Democratic senator, wrote to Smith. "These people stop at nothing. Their primary goal in life, and death, is to destroy America." Adds Sen. Jon Tester, "I just don't think it's appropriate, that's all. I don't think they know what they're asking for." On North Central Avenue in downtown Hardin, opinion is mixed. Darlene McMillen says if the detainees move in, she is moving out. A part-time waitress at a Hardin restaurant, McMillen says her opinion is based on her son's experiences serving in the military in Afghanistan. "He said the people have no respect for any human life, even their own." Manicurist Donovan Lindsay says bringing the detainees to Hardin would bring more law enforcement, and that would make the town safer. She also believes it would generate jobs . "We are the poorest county in the state of Montana and we need all the help we can get," she says. The 464-bed facility is state of the the art. Yet scores of surveillance cameras aren't powered up. A magnetometer near the front door isn't even plugged in. It's simply waiting for its intended use. Bright orange prison jump suits emblazoned with the words "Two Rivers" are stacked in a storage room along with shoes, towels, blankets, even razors and underwear, for prisoners. Another room contains riot helmets, gas masks, batons, shields, and guns for guards. Greg Smith says, "We got rooms full of this stuff. It just sits there ready to go." The prison has single, double, and dorm-style cells, but Smith says it could be modified to keep detainees separated from one another. He says because only terror detainees would be housed here, it would eliminate any risk that they would radicalize others. He also says the facility could accommodate special dietary and religious needs. Inside the facility, he motions around a large dormitory-style room filled with empty bunk beds. "It's big enough you probably could build a mosque in one of these," Smith says. Although the facility was intended to be used as a medium-security prison, Smith says it meets maximum-security criteria. Smith, a military veteran, doesn't have corrections experience, but challenges anyone who doubts the security at Two Rivers. He says he'd be glad to lock the doubters up to test it. "We will give them three days and I'll buy the coffee in the coffee shop if they can get out. I'd be happy." Glyn Perkins agrees on that score. He worked for eight years in maximum security prisons in Texas and says Two Rivers is the most secure facility he has ever been in. Perkins and his wife, Rae, moved to Hardin to take jobs at Two Rivers, but they got laid off earlier this year because there still were no prisoners. Although holding Gitmo detainees here might mean they would get their jobs back, they don't want to see it happen. Despite their confidence in the security of the prison, they worry about the community and their three children. "I don't agree with it because it is five blocks from city hall," says Glyn Perkins. His wife chimes in, "Yeah, and 11 blocks from the school, and to me that is just a little scary." "Bottom line," she said, "I really don't want Gitmo in my backyard." If the federal government were to move detainees here, it would decide who would run the prison and how it would be staffed. The Perkinses are skeptical that the federal government would offer many jobs to the people of Hardin. Rae Perkins doesn't think very many of the city's unemployed would be qualified. "I haven't met anyone in Hardin that speaks Arabic," she said. But Greg Smith thinks the prison would generate business for gas stations, restaurants, and other local enterprises, giving the entire region an economic boost. And, he says, it would benefit the country.

May 3, 2009 Anchorage Daily News
To some shoppers, the recession means cheap cars, undervalued homes and discount vacations. But bargain prisons? The Alaska Department of Corrections thinks so. The department currently sends 868, or 20 percent, of its inmates to a private prison in Arizona because it doesn't have enough prison beds here. The contract with that rented prison is almost up, so Corrections is shopping around for a better deal. "This is driven by our own want, our own need, to be responsible with public money," said Corrections Commissioner Joe Schmidt. He said he's looking for "what the market might offer us right now." The opportunity to grab the $20 million-a-year deal from the current contractor, Corrections Corp. of America, is attracting both private and state-run prisons. Alaska officials have already visited potential sites in Colorado and Minnesota and expect to visit more as the bids come in, Schmidt said. States like Nevada, in fiscal trouble and considering releasing some of their own prisoners, are taking an interest. Administrators of a new 464-bed prison in Hardin, Mont., say they plan to bid for some of Alaska's business. Hardin made the national news recently when it offered to house detainees from Guantanamo Bay. Greg Smith, head of an economic development agency in Hardin, thinks the Alaska contract could create jobs in his small town. He said he's been calling Alaska prison officials "as often as I can without bugging them." "We would love to be able to take care of your inmates," Smith said. Schmidt, whose department so far hasn't had to make painful recession cuts, said the contract will go to whoever offers the best deal for good security and treatment programs. "You see, we want to do more, but we don't want to pay more," the commissioner said. Schmidt has been pushing the department in a new direction since he was appointed by Gov. Sarah Palin in 2006, advocating for more inmate education, treatment programs and vocational training. His goal, he says, is to reduce the state's high recidivism rate -- three out of five prisoners are re-arrested for a new offense after leaving prison. The number of inmates in the United States boomed in the 1980s and 1990s, in part because of high crime rates and stiffened sentencing laws, particularly for drug offenders, according to the Pew Center on the States. Alaska's prison population also swelled during that time. In the mid-1990s, Alaska started sending prisoners out of state to one of the many private prisons that cropped up in response to the growth industry. The Red Rock prison in Eloy, Ariz., currently holds medium-security inmates from Alaska sentenced to at least two years, said corrections spokesman Richard Schmitz. The state pays Corrections Corp. of America $61.63 per day, per prisoner. Additional costs, such as travel and medical expenses make the real price higher, he said. It's still cheaper than what the state pays for the maximum-security Spring Creek Correctional Center in Seward. That works out to about $140 per day, per prisoner, Schmitz said. The state doesn't like housing its prisoners Outside. Families can't afford to visit, so prisoners don't get the support and rehabilitative benefits of family connection, according to rehab experts. Guards tend to be low-paid, and the state can't keep a good eye on how inmates are treated day to day. Plus, the prisons are subject to the policies and laws of the other state. Frank Smith, a vocal opponent of private prisons, thinks there's more to Alaska's decision to switch contracts. The Arizona prison "is a mess. It's always been a mess. Alaska has never been good at monitoring it," said Smith, a former Alaskan who works for Private Corrections Institute, an anti-private prison group based in Florida. The people in the prison-for-profit business "don't provide anything they don't have to absolutely provide," he said. Commissioner Schmidt denies that, as do the people who run Red Rock. They've had a good relationship with Alaska since 1995, they say. The company expects to rebid for the contract.

April 24, 2009 Earth Times
A remote town in Montana has come up with a new proposal for its empty jail - turning it into a replacement for the US government's notorious facility in Guantanamo, Cuba. But the proposal has met skepticism at the federal level. According to the Billings Gazette Friday, officials in Hardin, Montana proposed the site as a Guantanamo replacement since they have been unable to secure contracts for inmates since the 27-million- dollar facility was completed in July 2007. The 460-bed private jail was constructed by the town's development authority, which hoped to make money by contracting it out to overcrowded prison systems in other states. So far it has sent details of the facility to all 50 states, but has not received any offers in return. US President Barak Obama has ordered the Guantanamo facility to be closed, but officials have still not located any suitable alternative site for housing the approximately 240 Guantanamo inmates. Initial reactions to the Montana plan do not appear encouraging. Montana Senator Max Baucus came out quickly against the plan, saying "bringing terrorists into our state is a clear and present dangers to everyone who lives here." US Marshal Dwight MacKay is also opposed to the plan saying that the local law enforcement and justice system is not designed to deal with such dangerous inmates. "These are not the normal Joe Six-Pack meth users," MacKay told the paper. "This is a different league of people that can be considered a national threat. We have to take the proper steps to ensure the safety of our community, the safety of our courts."

November 19, 2008 Billings Gazette
A public meeting is set for today in Hardin to discuss a proposal to provide sex-offender treatment at the empty Two Rivers Regional Detention Center. Two Rivers Authority will host the 7 p.m. meeting at the Hardin Middle School. Two Rivers has submitted a proposal to provide the program for the Montana Department of Corrections. The 2007 Montana Legislature created a residential sexual-offender treatment program. Offenders in the program are secure in the facility and are taken back to the jurisdiction where they were convicted before release. "We want to explain what this program is and what it isn't," Two Rivers Executive Director Greg Smith said. The Department of Justice's online database lists 74 violent and sex offenders in Big Horn County, 35 of whom are registered as sexual offenders. Two Rivers has contracted with a national company to operate the jail. The operator was called CiviGenics before it was purchased by the Community Education Center, which operates a variety of programs in jails and prisons. The CEC plans to contract with Sharper Future, a branch of Pacific Forensic Psychology Associates Inc., to provide the sex-offender treatment programs. Both organizations will have representatives at the meeting to make presentations and answer questions, Smith said. The state will score Two Rivers' proposal soon. Two Rivers is the only applicant, said Montana Department of Corrections Spokesman Bob Anez. Following scoring, the state may ask Two Rivers to provide more information, and then negotiations for the contract would start, he said. It is likely a decision on the contract would not occur until after the new year, he said. The 450-bed Hardin jail was completed last year but has remained empty pending a lawsuit over its ability to hold prisoners from out of state. A judge determined the facility could take those prisoners, but Two Rivers has yet to secure a contract with another state.

November 11, 2008 Billings Gazette
A much-questioned Hardin jail is no longer in the running for a $2.7 million state correctional contract, a committee decided Monday. The empty 450-bed lockdown has never opened for business since it was completed late last year and has since defaulted on the revenue bonds sold to finance its construction. Members of the Department of Corrections committee that evaluated the jail said at a meeting that Two Rivers Authority, the economic development arm of the city of Hardin that built the jail, failed to answer several key questions about the facility, despite being given a second chance to do so. "Right now, we'd be contracting with a company in default," said Gary Willems, chief of Corrections' Contracts and Facility Management Bureau. "I think that might be a first, for the Department of Corrections, anyway." The panel concluded that Two Rivers failed to show how it would staff the jail with qualified workers, how it arrived at the per-day costs previously quoted to the state and failed to show that the jail is financially sound. The panel was particularly concerned that Two Rivers reported it would still be in default, even if it won the contract. The agency said it would need two state contracts to make its revenue bond payments. The decision means that the Butte-based Community, Counseling and Correctional Services Inc., or CCCS, will be awarded the contract for the 88-bed facility.

September 26, 2008 Billings Gazette
A much-debated Hardin jail narrowly prevailed Thursday in the first step toward placing inmates in the lockdown. The facility has sat empty since it opened late last year and has since landed in default on revenue bonds that were sold to finance its construction. However, members of the Department of Corrections committee that evaluated the jail as a site for a new correctional program cautioned that many questions hang over the facility and that their score is hardly a guarantee that the jail will end up with a state contract. Hardin's Two Rivers Detention Center put in for an 88-bed contract to run Montana's unique Sanction, Treatment, Assessment and Revocation Transition program, or START. The jail competed against Butte-based Community, Counseling and Correctional Services Inc., or CCCS, which runs a host of correctional programs in Montana, including the 3-year-old START pilot project in Warm Springs. A four-member panel evaluated proposals from both facilities, giving each a numerical score. Those numbers will then go Department of Corrections Director Mike Ferriter and other managers, who are expected to make a final decision in mid-October, said Gary Willems, chief of the agency's Contracts and Facilities Management Bureau. The START program is for probationers who violate the terms of their release. It is intended to be a second chance, prisonlike setting to give felons a taste of prison life while offering various therapies to help them succeed in society. The panel generally gave CCCS higher marks and complained that the Two Rivers proposal was incomplete and confusing. Specifically, several members were uncertain about who was ultimately responsible for Two Rivers: the economic development arm of the city of Hardin, which built the 450-bed jail as a way to bring jobs to the town, or Community Education Centers (CEC), the New Jersey-based, for-profit company the town hired to run the facility. Some of the criteria the panel looked at dealt with the financial stability of the would-be contractor. CEC clearly has a firm financial footing, members said, but Two Rivers is already in default. "Its scary territory," said Kerry Pribnow, a panel member. The decision came down to the cost each said it would charge the state to run the facility. CCCS reported that it would charge the state $117 per inmate, per day, although the committee later increased that amount because it disagreed with the way CCCS explained that cost in its proposal. Two Rivers came in at $75 a day, although its proposal contained little of the required information explaining that figure. The panel gave Two Rivers a score of 1,837; CCCS earned 1,743. Mike Thatcher, president of CCCS, said the panel was wrong to give Two Rivers maximum points for its bid cost when Two Rivers offered no justification for it. "I could have put $42 in there," Thatcher told the panel. He said he was appealing the entire process. Several panel members expressed similar concerns. The group decided to award Two Rivers the maximum points but made note that Two Rivers representatives gave no explanation for their figure. Willems said the numeric score is only the first step in the awarding of a state contract. The 450-bed Two Rivers detention center has sat empty since it was built at the end of last year. Owned by the economic development arm of the city of Hardin, a city that has no police force, the jail has been mired in controversy for months. City and economic leaders say they were led to believe by the past Corrections director that if they built the jail, the state would occupy it, although no contracts were ever in place and no written agreements have been produced. The state has no use for the space, agency officials say. In an effort to open the jail's doors, its backers looked to other states for inmates but first had to prove to a Helena judge that it could legally accept out-of-state inmates. Although the judge ruled in Two Rivers' favor earlier this year, the facility has yet to attract any inmates.

June 28, 2008 Billings Gazette
State officials will not appeal a recent District Court ruling that paves the way for a disputed Hardin jail to house out-of-state inmates. Bob Anez, a spokesman for the Montana Department of Corrections, said officials decided not to appeal Helena District Judge Jeffrey Sherlock's June 6 decision allowing the never-opened Two Rivers Detention Center to take out-of-state felons. "The state does not intend to impede the efforts by (Two Rivers) to find offenders," he said. Greg Smith, the executive director of the Two Rivers Development Authority, the economic development arm of the city of Hardin, said the decision was welcome news. "We're extremely pleased," he said.

June 18, 2008 Billings Gazette
The Gallatin County sheriff, who is renting space in other jails because his is overcrowded, said he would not put inmates in Hardin's Two Rivers Detention Center because it is "basically a warehouse." Greg Smith, the executive director of the Hardin economic authority, which built the unopened jail, called the sheriff's assessment "unprofessional and unfair." The comments came in a June 9 letter from Sheriff Jim Cashell to Gov. Brian Schweitzer. Schweitzer invited Cashell and other Montana law enforcement officials to consider contracting with Two Rivers, which has never opened due to a legal battle and last month defaulted on the $27 million in bonds sold to build it. Cashell, who had earlier toured the jail, said he found several things about the lock-down objectionable. First, he wrote, most of the jail consists of large, 24-inmate rooms. The rooms are guarded from the hallways, not from inside. Cashell said he asked the Two Rivers warden how the center would deal with problems in the unguarded rooms and the warden responded: "We'll gas 'em." "Each one of those rooms is like a classroom without a teacher in it," Cashell said in an interview Monday. But he said his most pressing concern was confusion about who is responsible for the jail. The facility was built by the Two Rivers Development Authority, the economic development arm of the city of Hardin. It was to be run by an out-of-state, for-profit corporation. Cashell said he was earlier provided with a Two Rivers contract. That document referred to involvement by the "chief of police." But Hardin has no police force, Cashell wrote in his letter. Cashell said Monday that he had problems both with the fact that the contract referenced a nonexistent police chief and with the idea that no law enforcement agency was ultimately responsible for Two Rivers. "That concerns me a lot," he said. But Two Rivers officials and representatives of the private company that will run the jail said this week that Cashell's concerns are unfounded. Peter Argeropulos, a senior vice president of CEC, the company now contracted to run the jail, said large inmate rooms like the kind at Two Rivers are used safely in jails and prisons around the country. He said the rooms are designed to be easily monitored from hallways and the guards assigned to those rooms walk past them every 10 minutes or more, so inmates wouldn't have much unsupervised time to cause problems. Guards can also go inside the rooms, he said. "This model is very prevalent across the country. This isn't something that is unusual in Montana," he said. Larry Johns, the jail's would-be warden who has not yet moved to Montana but will when the jail opens, said that he "didn't remember saying" exactly: "We'll gas 'em." But he did say that sometimes tear gas or pepper spray can quell a riot and is used as a last resort in the correctional industry. "You use those to save staff or to prevent serious property damage to your facility," said Johns, who worked as a warden in Texas state prisons before taking jobs in the private correctional industry. In Texas, Johns said, "We didn't gas them every day. Only during riot situations." Smith said the contract Cashell had was a "boilerplate" document that had obviously not been adapted to the realities of Hardin, where there is no police force. As for Cashell's concerns that the entity responsible for Two Rivers has no law enforcement agency behind it, Smith said he intended to talk with Yellowstone County and Sheridan, Wyo., officials to see if they would agree to come to Two Rivers' aid if there were a riot. "I'm not even worried about it," Smith said, adding that the economic development authority might also put together a reserve force of local men and women to come to the jail in an emergency. Smith said Cashell should have called him to talk about his concerns, not written them in a letter to the governor. Cashell said he wrote the letter to the governor because it was Schweitzer, not Smith, who asked him to consider housing inmates at Two Rivers. The 464-bed was built with no contracts in place, but Smith and other jail backers have said they believed the state and federal agencies would contract with them once the jail was completed. That never happened, and Two Rivers began looking to out-of-state inmates to fill the lockdown. Attorney General Mike McGrath determined that was illegal, which prompted a lawsuit. A Helena judge ruled earlier this month that Two Rivers can take out-of-state inmates. The state of Wyoming has already said it would not house inmates in Two Rivers because of the design of the building. Wyoming has inmates housed in out-of-state prisons as it builds its own new prison. Gallatin County sends up to 32 inmates a day to other Montana jails because its own 45-person lockdown can't manage the more than 80 inmates the county is typically responsible for, Cashell said.

June 7, 2008 Billings Gazette
Lawmakers and officials intentionally outlawed out-of-state prisoners when they wrote the state's private-prison law 11 years ago, but they never imagined that a city would build a lockdown intended to house hundreds of such criminals, sources said Friday. Mary Jo Fox, former Gov. Marc Racicot's corrections adviser, and former Rep. Ernest Bergsagel, who sponsored the 1997 bill allowing the state's private prison, both recalled Friday that Racicot was adamantly against out-of-state inmates and that state law purposefully banned the practice. Their recollections came the day after Helena District Judge Jeff Sherlock ruled that Hardin's city-owned Two Rivers Detention Center may accept out-of-state prisoners. "I can't imagine a scenario in which the administration or the Legislature would have deferred to (a city) something of that magnitude," Fox said. "There was real concern for receiving the worst of the worst from other states." Hardin's 464-bed facility was completed last year as a way of bringing as many as 100 new jobs to the economically depressed southeast Montana town. The lockdown was built with no contracts in place and no involvement from the state. The jail has never opened, and last month it defaulted on the bonds sold to build it. State and federal officials said they had no use for the cells, forcing Two Rivers to look to out-of-state inmates as a source of revenue. Responding to an inquiry from Hardin City Attorney Becky Convery, Attorney General Mike McGrath determined late last year that Two Rivers, which is legally a county jail, could not house out-of-staters. Hardin appealed that decision to Sherlock, who overturned McGrath's opinion, paving the way for Two Rivers to accept out-of-state inmates. When Montana was debating out-of-state inmates, the state had some of its own felons housed in prisons beyond its borders, Fox said. One was killed; gangs and violence were constant concerns. It was against that backdrop that the discussion on out-of-state inmates in Montana began, she said. "Racicot did not want out-of-state inmates," Bergsagel said. The former governor could not be reached for comment. Montana law contains a couple of chapters on inmates and penal institutions. One section deals with county jails, known legally as "detention centers." Another, Title 53, deals with state correctional institutions, including state-owned prisons, boot camps, halfway houses and the state's only private prison, located in Shelby. Bergsagel's bill, which became part of Title 53, called for extensive state involvement in the building of a private prison; it called for licensing and inspection and requires a heavy state role in the prison to guarantee safety. It also specifically outlawed out-of-state inmates. Later, that part of the law was relaxed as Montana began to draw down the number of inmates housed in Shelby. But the overwhelming sentiment at the time was a strict prohibition against developing a private-prison industry in Montana, Fox said. "In the conversations I was party to, they were very carefully trying to make sure (out-of-state) inmates would not happen," Fox said. "There wasn't supposed to be any legal room for that to happen." Back then, she said, Title 53 was imagined as the "final word' on out-of-state inmates. Two Rivers, however, isn't built under the laws that govern private prisons. The center will be run by an out-of-state, for-profit corporation, like the state's private prison in Shelby, and it has room for 464 inmates, just 200 fewer than the Shelby lock-up. But Two Rivers is owned by the economic development arm of the city of Hardin and, consequently, is not a private prison but a government-owned detention center, like a county jail. Sherlock didn't consider any of the Title 53 laws in his decision this week. Bergsagel said he didn't have a problem with the concept of Hardin accepting out-of-state inmates, but he said he was concerned that the facility was built outside the web of laws intending to guarantee public safety. He said someone at the state should inspect the institution to make sure it complies with the federally set prison standards set out in Montana's private prison law. But it's not just Two Rivers that wants to house out-of-staters. Sanders County already houses a small number of Idaho inmates in its jail across the border, according to evidence submitted at the Two Rivers court case. That never should have been allowed, Fox said. It appears that created a loophole for Hardin demand the same treatment.

June 6, 2008 Billings Gazette
A Hardin detention facility can take federal and out-of-state inmates, a Helena District Court judge has ruled. Judge Jeffrey Sherlock's ruling overturns an opinion issued in December by Montana Attorney General Mike McGrath. The decision barred Two Rivers Detention Facility from taking inmates from the federal system or other states. Greg Smith, the executive director of Two Rivers Authority, savored the judge's ruling. "It's very simple: We were right," Smith said. The $27 million detention center was built by Two Rivers Authority, Hardin's economic-development arm, as a way to bring more than 100 jobs to Hardin. The city of Lodge Grass entered an inter-local agreement with Hardin to run the facility. The jail was completed last summer, and Two Rivers expected to open the 646-bed center in the fall. Instead, Montana Department of Corrections and Hardin officials disagreed on whether the facility could accept inmates from other states. That prompted Hardin City Attorney Becky Convery to seek the attorney general's opinion. The opinion was released Dec. 3. Hardin sued the Department of Corrections and McGrath on Dec. 10. Robert Sterup, one of the Billings attorneys who argued the case for Hardin, said the state agreed earlier not to stand in the way of the detention center's operation if McGrath's opinion were overturned. "With the court's ruling in hand, Two Rivers is free to begin accepting inmates," Sterup said. Smith said the ruling allows Two Rivers officials to do more marketing, and they plan to work hard to secure contracts. "Now we can go about our business, we can get to work and do what we need to do," Smith said. Gov. Brian Schweitzer's spokeswoman, Sarah Elliott, said the state is still reviewing the ruling. However, Schweitzer's office has already started to help in the search for contracts. "In anticipation of the possibility of this decision we have taken the initiative and have been contacting governors of neighboring states, including Wyoming, Washington, Oregon and Colorado that may have a need to house prisoners," Elliott said. "Wyoming has already toured the facility and determined that it does not fit their needs. We will continue our efforts." The main point of the lawsuit was whether the multijurisdictional detention facility could contract to confine adult felony and misdemeanor offenders committed by other states and the federal government. "The use of the word 'multi-jurisdictional detention facility' is certainly a mouthful," Sherlock wrote in the seven-page order. "However, it should be noted that such facilities are known to history and the general public as 'county jails.' " Sherlock's order outlined "what this case in not about," which included the state prison in Deer Lodge, regional correction facilities like those in Great Falls and Glendive or private facilities like the one in Shelby. The state argued that three pertinent sections of Montana law define who can be confined in a detention center and limits who can be placed to defendants being held on misdemeanor charges. Hardin argued that general language in one section of the law had to give way to more specific parts of the other sections. "This court agrees," Sherlock wrote. One section of law "clearly provides" that a detention center may contract with a government unit of another state, Sherlock wrote. "This section expresses the legislature's clear and unambiguous determination that detention centers can house out-of-state and misdemeanor inmates," he wrote. Another section of Montana law allows for federal adult prisoners, Sherlock wrote. In the December 2007 attorney general's opinion, McGrath wrote several times about "legislative intent" while building up to his judgment that only the Montana Corrections Department could house out-of-state or adult federal offenders, which "evidences a legislative intent not to allow routine interstate exchange of inmates in and out of Montana." Sherlock disagreed. "The court has before it a clear statute passed by the Legislature," Sherlock wrote. "The court must presume that the Legislature would not pass a meaningless statute. Since this statute is clear, the court need not resort to other means of interpretation to determine the intent of the Legislature." Sherlock wrote that the interpretation is played out in other parts of Montana and referred to an affidavit by Sanders County Sheriff Gene Arnold that the jail he oversees takes people convicted of lower-level felonies in Idaho. Before the legal tussle, Two Rivers officials thought they would be able to contract with Wyoming, but corrections officials in that state wouldn't do so without the Montana Corrections Department's blessing. Wyoming has inmates being held in Oklahoma and West Virginia. In May, Wyoming Corrections officials wrote Two Rivers' operations contractor, CiviGenics, that the agency does not like the dorm-style housing for its medium-security inmates and "it doesn't look like the physical structure of the Hardin facility will meet our needs." Two Rivers officials have worked toward securing contracts but have been stymied for about 10 months as the legal complications were ironed out. Meanwhile, the need for revenue from the project has mounted. Construction of the facility was funded with revenue bonds. As the name implies, those bonds were to be repaid by revenue generated by housing inmates. Without that money, the funding went into default last month. Although payments are being covered by a contingency fund, the project is technically in default, which mars its financial standing. The Corrections Department has said it does not need additional space and doesn't have inmates to send to Hardin. Corrections officials have said that Two Rivers would be welcome to compete for a contract to house sexual offenders and provide them with treatment. The request for proposals for that program is supposed to be out later this year. However, Two Rivers leaders have said that contract would be less than half of the about 250 inmates needed to make opening the jail economically feasible.

May 29, 2008 Casper Star-Journal
A disputed, privately run jail near Hardin, Mont., was dealt another blow this month: Wyoming officials have decided not to house felons at the facility, saying parts of the lockdown aren't set up to safely hold their inmates. The decision came in a May 20 letter from Steve Lindly, deputy director of the Wyoming Department of Corrections, to Peter Argeropulos, vice president of marketing for Community Education Centers, the for-profit New Jersey company contracted to run Hardin's Two Rivers Detention Center. Lindly wrote that Wyoming prefers "non-dorm cell housing" for its medium-security inmates. Dorm housing is where many inmates are housed in a single room with multiple beds. Most of the 464 beds at the Two Rivers jail are "dorm style." The jail, which was built between 2006 and 2007 by the economic development arm of the city of Hardin, envisions some 288 inmates housed in 12 large cells, each containing 24 beds, according to information from Two Rivers. Lindly wrote that he had other concerns about whether inmates could use electronics like television sets in the Two Rivers cells. Plus, he said, "we found recreation opportunities to be limited." "It doesn't look like the physical structure of the Hardin facility will meet our needs," he wrote. The decision is the latest setback for the jail, which was built with no state or local contracts in place as a way of bringing up to 100 guard and other prison-type jobs to Hardin. Hardin issued $27 million in revenue bonds to build the jail. The city missed its May 1 bond payment, and the facility is now in default. The center was completed last year, but has never opened for want of inmates. Montana's Department of Corrections, along with the U.S. Marshals Service, said last fall they didn't need the jail space. Hardin has no police force of its own, and anyone arrested in the town is housed in the Big Horn (Mont.) County Jail, which has expressed no interest in Two Rivers. Jail backers then turned to out-of-state inmates, potentially a few hundred from Wyoming. Responding to an inquiry from the Hardin city attorney, Montana's attorney general concluded late last year that jails like Two Rivers cannot take out-of-state inmates. The city appealed that decision, which is now in the hands of a Helena judge. Greg Smith, executive director of the Two Rivers Authority, Hardin's economic development agency that built the jail, said he wasn't too concerned with Wyoming's decision. So far, Smith said, that's just one state out of 48 that has found problem with the jail's design. "We've been on a long road, and this is just a little pebble in it," he said. Melinda Brazzale, a Wyoming Department of Corrections spokeswoman, said the legal dispute surrounding Two Rivers played only a bit part in the state's decision not to pursue a contract with the jail. Wyoming has kept some inmates out of state since 1997, she said. The state is now housing inmates in Oklahoma and Virginia while crews build a new 700-bed prison in Torrington intended to eliminate the need for out-of-state prisons. That prison is expected to open in 2010, she said. Last fall, Brazzale said, several people from Two Rivers contacted the state about housing some Wyoming felons at Hardin. Wyoming officials contacted Montana's correctional leaders, who told them about the jail's legal problems. At that point, Brazzale said, Wyoming quit pursuing Two Rivers. Wyoming never sent a team of inspectors to view the jail, she said, which is a necessary first step before the state would consider sending inmates to any facility. About a month ago, Gov. Brian Schweitzer contacted Wyoming's Gov. Dave Freudenthal, and invited him to view the Hardin jail, Brazzale said. Only then did Wyoming correctional officials see the facility and conclude it wouldn't work to house their felons. Schweitzer said he has contacted the governors of all Montana's neighboring states to tell them about Two Rivers. "I do my level best to help everybody in Montana," he said. Schweitzer said the jail is in a difficult spot. Regardless of the legal issues surrounding it, the facility is built more like a jail than a prison. Agencies needing prison space, which is designed to safely house felons for longer periods, might not want the big, open dorms Two Rivers has to offer, he said. "The people who designed this thing in Texas, they sold this concept to people who are no longer even in Hardin," Schweitzer said, referring to the questions about why officials decided to build a jail of this type. Bob Anez, a spokesman for the Montana Department of Corrections, said no one from his agency has inspected Two Rivers to see if the issues Wyoming cited might pose similar problems for Montana -- should the state ever consider housing inmates at Hardin. "We're aware of what Wyoming's conclusions are," he said, adding that Montana correctional officials are not yet ready to draw any conclusions of their own.

May 10, 2008 Helena Independent Record
The debate over a 464-bed lockdown sitting empty outside Hardin boiled down to a legal dissection here Friday over who ends up in county jails, why and for how long. Lawyers on both sides of the months-long dispute made their arguments in a hearing before Helena District Judge Jeffrey Sherlock, who promised to make his decision in the next month. At issue is the Two Rivers Detention Center, a privately run, for-profit jail built by the economic development arm of the city of Hardin as a way of bringing in up to 100 jobs to the economically depressed town. Hardin has no police force of its own and all criminals arrested in the city are housed in the Big Horn County Jail, which has expressed no interest in the jail. The city tried to house Wyoming felons at the clink, leading to a formal attorney general’s opinion concluding that such a thing is illegal. The city appealed that decision to Sherlock. Hardin officials argue that they built the facility under the laws governing county jails known in legalese as “detention centers” not the laws that govern the state’s only private prison in Shelby. They maintain that county jails can, and do, house all kinds of inmates, including federal and out-of-state inmates. At least one Montana jail, the one in Sanders County, is housing a handful of out-of-state felons right now, said Robert Sterup at Friday’s hearing. Sterup is a lawyer with the Holland and Hart law firm in Billings hired by Hardin for the case. County jails have historically housed out-of-state or federal inmates, said Kyle Gray, another Holland and Hart attorney working on the case, who cited a lawsuit from the 1920s dealing with how Lewis and Clark County got paid to hold an average of 11 federal inmates over two years. If those jails can house such inmates, why can’t Two Rivers, asked Becky Convery, the Hardin city attorney in an interview after the hearing. The attorney general’s opinion concluded that Two Rivers couldn’t house any out-of-state inmates, whether their crimes are misdemeanors or felonies. Convery said later the fact that the opinion ruled out even misdemeanors prompted the lawsuit. At the hearing, Jennifer Anders, an assistant attorney general, said Montana law envisions two kinds of inmates. Folks convicted of misdemeanors serve their sentences in county jails, she said. Those inmates are the responsibility of the county. But people convicted of felonies are the state’s responsibility and they go to the state prison. Such inmates don’t now and have never served their sentences in jails. The Hardin jail is seeking felons and that is against the law, Anders said. Hardin is free to contract for out-of-state inmates who committed misdemeanors, she said, but there is no money in misdemeanors and Two Rivers needs money. Anders agreed that there are felons and federal prisoners housed in Montana’s county jails. But most of those are either people awaiting trial or people sentenced and staying in the jail only for a short time while a cell in federal penitentiary opens up. “The bottom line is, the plaintiffs built a jail, and they want to operate it like a prison,” she said at the hearing. She also hinted that at least part of the problem with Two Rivers is its size and the precedent it would set if the facility was allowed to open as backer want. The Sanders County jail has room for just 29 people, and some of those are county inmates, she said. The Two Rivers jail, in contrast, has room for 464. Additionally, Anders said, Sanders County has a contract with another county a use for county jails already allowed under the law. Two Rivers, in contrast, seeks to sign contracts with other states. In Montana, Anders said, only the state can make those kinds of contracts. Allowing the jail to take that many out-of-state felons would be re-writing Montana law, she argued, and opening up an industry lawmakers have never addressed.

March 2, 2008 Helena Independent Record
A new, empty jail built to bring jobs and prisoners to Hardin might not be able to open and pay its bills on time, even if it wins the only state corrections contract now under consideration. Backers for the jail, however, said this week they’re still very interested in the contract and plan to pursue it, along with other prisoner pools, to get the jail up and running. The Two Rivers Detention Center, a 464-bed jail built by the economic development arm of the city of Hardin and a consortium of private out-of-state companies, needs about 250 inmates to make enough money to open its doors and begin to repay the $27 million in bonds sold to build it. The first payment on the debt is due on May 10, said Michael Harling, the Texas investment banker behind the project. If the jail, which was completed late last summer but has never opened and has no contracts to house inmates, misses that payment, it will be in default on its bonds. The jail’s financing package includes a fund to cover bills while investors deal with default, he said. That money is expected to run out in May 2009. But representatives of the state Department of Corrections said last week that the only state corrections contract currently considered is for 116 sex offenders not 250 inmates. What’s more, they said, the agency hopes to have the contract filled by April 1, 2009, but it could be as late as July 1 — two months after the Hardin jail would need to be generating revenue to stave off financial crisis. July, Harling said, “is too late.” The jail must have some revenue stream before then in order to remain a going concern. The fact that the sex offender contract is for 134 fewer inmates than the center anticipated it needed to open doesn’t mean the facility can’t make ends meet with the contract, should it win the bid, said Greg Smith, executive director of the Two Rivers Authority. “It would probably be feasible to do it with less,” he said, because the sex offender contract would likely include treatment and other more expensive services than the mostly custodial care of ordinary inmates. “We’re extremely interested,” Smith said. However, he said the authority is cautious because the contract has not yet been issued and has been pushed back several times. Additionally, Smith said he worries the contract might be written to favor the three nonprofit correctional contracting companies in the state that typically win state correctional contracts. Backers for the jail say the lockdown was built on the expectation that the state would house inmates there. But state officials say they never had such an understanding and don’t need the jail space. The jail was built with no state contract in place. Bob Anez, a spokesman for the Department of Corrections, said that Two Rivers has never invited Corrections officials to the facility and no one from the agency has ever been inside. The Hardin jail then turned to out-of-state inmates as a source of money, but Attorney General Mike McGrath ruled last year that such a thing is against Montana law. The jail, which is now at the center of a lawsuit, occupies a unique place in Montana correctional law. Legally, the facility is like a county jail, not a private prison, although its 464-bed capacity puts it more in line with the 512-bed private prison in Shelby than with even Montana’s largest county jails. The jail was built by the Two Rivers Port Authority, the economic development arm of the city of Hardin, along with a group of mainly Texas companies that have helped build private prisons in other states. As a city-owned jail, the facility is one-of-a-kind, said Diana Koch, the Department of Corrections’ top lawyer. No other Montana city has its own jail. It doesn’t make sense for Montana cities to build their own jails, said Dan Schwarz, Yellowstone County’s chief deputy attorney, because Montana law requires counties to incarcerate all city inmates for free. Even more curious: The city of Hardin doesn’t have a police force. All suspects arrested in Hardin are done so by Big Horn County authorities and housed in the 36-bed Big Horn County jail. The city of Hardin doesn’t have any of its own inmates and has no use for the jail. Big Horn County is not part of the jail project and is not interested in housing inmates there, said Greg Smith, executive director of the Two Rivers Authority. That the facility is a “jail,” not a “prison,” is an important distinction, Koch said. By law, only certain kinds of inmates can be held in jails, including people awaiting trial and witnesses in a trial confined to be certain they testify. Generally speaking, convicted felons remanded to the Department of Corrections to serve out their sentences are not held in county jails. The law does not forbid such a thing, Koch said, but it has only happened once in the last 12 years and involved a single inmate. That lone case was before a new section of law was passed in the 1990s that created regional prisons and the state’s only private prison. Regional prisons are joint projects of counties and the Department of Corrections in which the county jail shares space with space dedicated for state inmates. The state section of the lockdown is designed to state specifications and the state is a partner in the project from the very beginning, Koch said. Montana has regional prisons in Great Falls and Glendive. Montana also has one privately owned prison in Shelby built after lawmakers in 1997 wrote a new section of law allowing such a prison. That law spells out an exhaustive process entities must follow to become a private prison, including obtaining a license from the Department of Corrections. Such a license cannot be issued unless the department deems the prison necessary to house state inmates and has money from the Legislature to house inmates there. The Hardin prison didn’t follow those laws and is not a licensed private prison. Under certain circumstances, out-of-state inmates like the kind Two Rivers is courting can be housed in Montana’s private prison. The state’s regional and private prisons didn’t solidly replace the rare possibility of housing state inmates in jails like the Hardin lockdown, Koch said. “We just don’t foresee that there would be a reason to do that since we have the regionals and the private prison,” she said. “Now that we have that option, I really doubt we would (house state inmates in a jail) again.” Smith said the jail never wanted to house state inmates long-term. Instead, he said, the authority hoped to house only a select subset of state inmates: recently sentenced prisoners waiting in county jails until a cell comes open at Deer Lodge or another state correctional facility. “Those are the ones we’ve always wanted,” he said. Those inmates can be housed in jails and, in fact, state contracts with every county jail in Montana to house those prisoners. Such inmates might stay in the jail from only a few days to a few months. Last year, such inmates waited in county jails for an average of 33 days before moving into a Corrections’ facility, Anez said. The department has never identified a special contracted jail to house such inmates as a need and has never appealed to the Legislature for money for such a project. No one from Two Rivers has ever contacted the department about using the Hardin jail for that purpose, Anez said, adding that consolidating such temporary inmates in one location would create a transportation problem. Say a convict was sentenced in Butte, Anez said. Why move the man to Hardin for a few weeks only to drive him to Deer Lodge when a cell becomes available? Additionally, the state doesn’t have enough of those inmates to begin to fill a 464-bed jail. Currently, the state had 59 men and 14 women felons waiting in county jails.

February 13, 2008 Billings Gazette
As told by state and Hardin officials Tuesday, the history behind Hardin's empty, 464-bed prison hinges on one enormous - and expensive - misunderstanding. Officials from the south-central Montana town and its economic development arm, Two Rivers Authority, told the state Corrections Advisory Council that they had a gentlemen's agreement with Montana to house state inmates at the privately run prison. But Bill Slaughter, former state corrections director, current agency officials and lawmakers on the council said they never had such an agreement and never envisioned the prison as part of the state's correctional system. "We didn't sign any contracts with this group; there are no e-mails or promises," Slaughter said. "I don't know what to tell you. I was actually surprised they were under construction." The council, headed by Lt. Gov. John Bohlinger and composed of lawmakers and others with interests in Montana's criminal justice system, acts only as an advisory group to the Department of Corrections. The committee does not have the authority to change state law or approve prison contracts with Two Rivers. Hardin city officials worked with a Texas consortium to build and finance the $27 million prison. It was completed this summer and promoted as a way to bring 100 new jobs to the economically depressed town at the edge of the Crow Indian Reservation. The prison needs about 250 inmates to make enough money to open its doors and begin to repay the millions needed to build it, Hardin officials said. Michael Harling, one of the Texas financers of the project, said in an interview after the meeting that the financing package includes enough money for the prison to sit empty until May 2009. After that, the prison would be nearing a financial crisis. But by not repaying its bonds until then, the prison would technically be in default on its debt. State and federal officials have said they don't need any of the prison's 464 beds, and state law forbids the prison from housing out-of-state prisoners, according to a recent opinion by Attorney General Mike McGrath. The Two Rivers Authority and the city of Hardin have since sued the state, asking a Helena judge to throw out McGrath's opinion. The city-owned prison was built without a single contract, Hardin City Attorney Rebecca Convery told the committee, because they were told the state wouldn't enter into contracts with a prison that wasn't yet built. Paul Green, a Hardin businessman who worked at the city's economic development branch several years ago when the prison was in the planning stage, said he met with Slaughter then and walked away feeling that the state would fill the prison if the city built it. "While there is a need, (Slaughter) said they can't sign a contract with a facility that isn't built yet," Green said. But Slaughter and Diane Koch, a Corrections Department lawyer, said the only way the state ever contemplated using the prison was to temporarily house local felons after they'd been convicted and were on their way to other state facilities. The state has contracts with every county jail in Montana to hold felons until the state has room for them elsewhere. "It would be maybe five or 10 inmates," Koch said, "not enough to fill a 464-bed facility." Sen. Trudi Schmidt, D-Great Falls, a member of the advisory council, sits on the eight-member panel that helps draft the Department of Corrections budget. She asked Two Rivers and Hardin officials why they didn't come to the panel's meetings in 2005 when lawmakers were crafting the agency's two-year budget. "I guess I'm wondering why the city of Hardin never knew what was going on in the Legislature," she said. Schmidt and others also questioned just what kind of detention center the Hardin prison is. Montana has one private prison in Shelby that houses mostly state inmates, under a contract with the state. The state also has contracts to house inmates at regional prisons in Glendive and Great Falls. Those prisons were built and owned by the counties and function as county jails. The Hardin prison is not a purely private prison like the Shelby facility, nor is it the Big Horn County jail, said Greg Smith, executive director of the Two Rivers Authority. The county does not support the prison, he said in an interview after the meeting. Convery told the panel that the prison is city-owned but will be privately run by a for-profit company for at least the next two years. That would make it the only entity of its kind in the state. The authority sought out-of-state inmates after state and federal officials said they didn't need the space.

February 7, 2008 Billings Gazette
A state lawmaker from Butte has asked corrections officials and representatives of Hardin to explain why a $27 million jail was built in the southern Montana city but now sits empty. Sen. Steve Gallus, a Democrat, wants the officials to appear Tuesday in Helena before the state Corrections Advisory Council, which he co-chairs. Inmates sought -- Hardin officials working with a Texas prison-building consortium last year sought to house out-of-state inmates at the newly built Two Rivers Detention Center. They were blocked by state Attorney General Mike McGrath, who said state law prohibits county jails from signing contracts for out-of-state prisoners. Hardin and Two Rivers Authority, the city's economic development agency, have since filed a lawsuit seeking to overturn McGrath's opinion. When it was proposed, the jail was touted as Hardin's largest economic development project since a sugar factory was built there in the 1930s. The city of 3,500 sits on the edge of the Crow Indian reservation in Big Horn County, a community where nearly 1 in 3 people lives in poverty - one of the highest rates in the state. "I feel bad for the people of Hardin and understand that they want jobs," Gallus said. "But I don't feel that this was handled appropriately, nor do I think we should base economic development on prison beds." Alternative uses -- Gallus said he also wants to look into other possible uses for the jail. For example, he wants to know if it would be feasible to convert it into a special facility for in-state sex offenders. "It might require some kind of retrofit, or more capital put into the facility to change it," he said. A failure to bring in revenues from the 464-bed jail could leave private investors on the hook for the project if the bonds used to build it can't be paid off. The jail needs at least 250 inmates to make its opening economically feasible. The state Department of Corrections has said it does not need any more beds for Montana inmates.

January 23, 2008 The Gazette
The Two Rivers Detention Center was built as an investment in Hardin. But a legal tangle with the state has left the jail unused and the security of the investment threatened - for the people offered jobs at the jail, for Hardin's economy and for investors who bought mutual funds that financed the $27 million project. That means no income and no cash flow to make a $960,000 interest payment that is due May 1. Two Rivers Authority holds $27 million in tax-exempt revenue bonds for the detention center, some $20 million of which went into building the facility. The bonds are not general-obligation bonds, so the landowners of Hardin and Big Horn County won't be held responsible for repayment. In December, the developers said that if the detention facility had about 250 inmates by March it might be able to get money flowing and avoid default. Lacking a court order allowing it to take out-of-state inmates and without contracts for any inmates, it's unlikely that the facility will open in time to stay out of financial trouble. Two Rivers Authority leaders maintain that the Department of Corrections and a former director, Bill Slaughter, supported the idea of the facility. However, they say, state policy has changed, threatening the detention center's future because the state won't contract to send Montana prisoners there. Two Rivers Authority Executive Director Greg Smith said the state must remain consistent in its policies to maintain a good investment culture. He said he also is concerned about the effects on out-of- state investors - whether they are individuals whose savings is threatened by a financial loss on bonds or a large corporate investor. "It is important that the state really care about people who are investing in this state," he said. "We're not the wealthiest state in this union, and we need people who want to invest in us. "To me, somebody who is investing in Hardin is investing in the state of Montana." Smith said the $27 million is not a huge amount of money when spread across investors around the United States, but on the individual level the investment could be important to those people who put their retirement or savings into a mutual fund. "Who knows, there could be people in Montana," Smith said. Michael Harling, executive vice president of Municipal Capital Markets Group, an underwriter of the bonds, said the $27 million in bonds was purchased within a few weeks of becoming available in late April 2006. If bonds go bad, the mutual fund that is holding them is going to lose some market value, Harling said. The effect of the loss is that every participant in the pool of investors also loses a little. That scenario plays out only in relation to Two Rivers Detention Center if a person is invested in a mutual fund that holds some of the Hardin bonds, Harling said. "It's a small ripple, but it is fair to say that people in Montana who have their savings invested in tax-exempt mutual funds stand a chance to lose part of their asset value," he said.

January 23, 2008 Billings Gazette
The state has asked a Helena District Court judge to dismiss a lawsuit filed in December by the city of Hardin and its economic development arm, Two Rivers Authority. The lawsuit asked that the judge throw out Attorney General Mike McGrath's Dec. 3 opinion that state law doesn't allow a new detention facility in Hardin to hold inmates convicted out of state. Two Rivers needs to house inmates to repay the $27 million in revenue bonds that funded the jail. The state's response was released Tuesday. "Not only is the proposed use of the facility unauthorized, but it conflicts with Montana's overall correctional scheme to provide for Montana offenders - not to benefit economically from the interstate exchange of inmates," Assistant Attorney General Jennifer Anders wrote in the state's motion. Hardin's attorney Rob Sterup of Holland and Hart in Billings declined to comment on the state's response. The state claims that the District Court has no authority to withdraw McGrath's opinion - one of the main requests in the Hardin suit. A court may overrule an attorney general's opinion but it can't order him to retract a lawfully issued opinion, according to the state. Hardin has asked the judge to stop the state and the Department of Corrections, which is also named in the suit, from barring Two Rivers Authority from contracting for inmates. Two Rivers and CiviGenics, which contracted to operate the facility, have tried to get contracts with the state of Wyoming and the Bureau of Indian Affairs detention division. Wyoming won't sign an agreement without approval from the Department of Corrections, and the BIA can't contract for enough inmates to open the facility, TRA officials have said. In its response, the state acknowledges that the BIA could house adults in Hardin who have been arrested and are awaiting trial because those would probably be short-term and thus "consistent with the nature and function of a county jail or local detention facility," Anders wrote. "However, plaintiffs are not entitled to contract with the BIA or other states for felony offenders who are serving sentences and/or awaiting release from custody, or offenders convicted of tribal violations ... because these uses are not allowed" by state law, she wrote. Much of the 13-page motion focuses on interpretation of state law and the legislative intent that went into crafting Montana code. In a separate document, the state asked the court for a protective order so it doesn't have to produce information Hardin requested through the discovery process of the lawsuit. The case "involves purely a question of law," and not disputed facts that could lead to evidence for the court to consider, Anders wrote. The information the Hardin attorneys have requested is from the attorney general, the Corrections Department and the governor's office. It includes "all documents that refer, relate, or pertain to placement of inmates by the Department of Corrections with any detention center within the state of Montana." It also asks for the state to list, by month, the number of Montana prisoners held out of state and the number of out-of-state prisoners held in Montana back to Jan. 1, 2000. There is also a request for any records from the governor's office that relate to McGrath's opinion and any records of meetings attended by staff from the attorney general's office. The state has provided Two Rivers with the attorney general's file on the opinion request, according to the document. At a minimum, Anders argued, the court should first consider the state's request to dismiss the suit, which could make sharing documents in preparation for a hearing moot. The state's documents were mailed on Friday, according to attorney general's spokeswoman Lynn Solomon. On Tuesday afternoon, Lewis and Clark District Court records did not show that the documents had been filed. According to the clerk in Judge Jeffrey Sherlock's court, once the paperwork is filed, Hardin will have about two weeks to respond to the motions and the state is then given about two weeks to reply.

December 12, 2007 Billings Gazette
The city of Hardin has sued the state, hoping to overturn an attorney general's opinion and allow a new prison here to open with out-of-state inmates. Hardin and Two Rivers Authority, the city's economic development arm, filed suit Monday in District Court in Helena. The lawsuit asks Judge Jeffrey Sherlock to overturn Attorney General Mike McGrath's recent opinion on state law applicable to the Two Rivers Detention Center. The prison is under the gun to begin repaying $27 million in revenue bonds sold, including $20 million to build the 464-bed facility and to cover payments during a few months before opening. That transitional money runs out this month. An official with the bond underwriter said the facility needs inmates to get a revenue stream flowing by the time the next payment is due, May 1. Failure to do so would start the default process. The attorney general's Dec. 3 opinion states that the authority to take out-of-state prisoners is limited by state law to the Montana Department of Corrections. Two Rivers officials originally hoped to have contracts with the state and Montana counties to hold prisoners. When the state announced last year that it would not have prisoners to send to Hardin, Two Rivers began to focus on contracts to take out-of-state and federal prisoners. But the agencies involved, including the state of Wyoming, wouldn't complete those contracts without the state of Montana signing off, so Hardin asked for the formal opinion. The city has hired Billings attorneys Robert Sterup, Kyle Gray and Jason Ritchie, of Holland and Hart, to work with Hardin City Attorney Rebecca Convery on the lawsuit. "We believe our clients' claims have substantial merit, and we are confident in our position," Sterup said. "We look forward to the opportunity to present our claims in District Court." McGrath stood by his office's opinion. "We believe the opinion is a sound interpretation of Montana law and legislative policy," McGrath said Tuesday. An attorney general's opinion carries the weight of law unless it is overturned by a court or the Legislature changes the law. Department of Corrections spokesman Bob Anez said Tuesday that the agency does not comment on pending litigation. He previously had stated that Corrections supports the legal opinion. Two Rivers officials said in a prepared statement that a favorable court ruling would "directly benefit the public by alleviating prison overcrowding and providing employment opportunities in Big Horn County." "While it remains open to negotiate an agreement with the state, absent such agreement, Two Rivers Authority is confident of its position on the disputed issues and is committed to seeking judicial relief," the statement said. The suit asks Sherlock to determine if state law allows the facility to hold prisoners who are committed by an out-of-state jurisdictions or the federal government. The state and Hardin have "genuine and opposing positions on this issue," the complaint states. "Based on the state of Montana's representations, agencies of the federal government and other states have refused to contract with (Two Rivers)," it states. Two Rivers is working with the Bureau of Indian Affairs to contract for about 70 prisoners, far short of the 250 officials say are required to make opening the prison economically feasible. According to the complaint, those 70 prisoners would come from the Crow, Northern Cheyenne and Blackfeet reservations in Montana, the Spokane Reservation in Washington and the Wind River Reservation in Wyoming. The suit also asks Sherlock to grant an injunction allowing Two Rivers to form contracts and take offenders immediately. There are a number of losses because the facility, although ready, can't open, including losing the work force that Two Rivers and its contractor, CiviGenics, has lined up, it states. There is also a financial risk, according to the complaint. "Deprived of its essential function by state action, the detention center will face potentially catastrophic loss, including possible default on financing commitments," the court document states. "These threatened injuries and others outweigh whatever damage the proposed injunction may cause to the defendants."

December 4, 2007 Billings Gazette
The attorney general's opinion issued Monday may leave Hardin prison investors empty-handed, but a loss won't happen overnight, the lead investment banker on the project said. The $27 million that paid for the construction and startup costs of the facility was issued in revenue bonds. The bond holders, or owners, are some of the largest institutional bond funds in the U.S. that manage billions of dollars, said Michael Harling, executive vice president of Municipal Capital Markets group Inc., the Texas firm that underwrote the project. The investment firm set up the transaction to secure the private activity bonds. The bonds are tax-free because the issuer is a governmental entity - Two Rivers Authority, the economic development arm of the city of Hardin. And because they are repaid through revenue generated by the project, the bond holders are the ones on the hook if no money comes in. Regardless of whether the prison ever opens, the next interest payment, of $960,012, is due May 1. The first principal payment of $615,000 and an interest payment of $960,012 are due Nov. 1, 2008. Nearly $2 million in interest has already been paid on the bonds. A debt service reserve fund - about $2.6 million - was set aside from the original funding. That money can be used if the facility doesn't have revenue to makes payments. However, using the fund causes difficulties. "The problem is, once that reserve fund is tapped, it becomes an event of default," Harling said. "(A default) casts a sort of pallor over it in the financial world. That isn't great, and we don't want that." The funding includes about $19 million for construction that has been paid to the designer and builder, Hale-Mills Construction of Houston. Harling figures the facility would have to open with about 250 prisoners by around March to have revenue flowing in time for the May 1 payment. Two Rivers Authority has one contract in the works with the Bureau of Indian Affairs, but it is still being completed. The contract isn't for enough prisoners to make opening the facility feasible. In the bond project's official statement, potential owners were warned of the risk of funding the Hardin project without contracts that secured revenue. According to the feasibility study commissioned by the underwriters and released in January 2006, Two Rivers had no assurance that it would get enough contracts, or a guaranteed number of inmates, to make its payments on the bonds. Also, the "primary market focus" was the Montana Department of Corrections and was based on the assumption that Two Rivers would be awarded at least one publicly bid contract, according to the study. Harling said it was a reasonable risk because studies showed that state and federal agencies needed prison space and the Corrections Department "indicated but didn't guarantee it would utilize the facility," he said. That indication apparently changed between 2005 development meetings, which Harling said Corrections officials attended, the April 2006 issuance of bonds, groundbreaking that June and construction completion this summer. He blames the problem on the state of Montana and the Corrections Department. The state's refusal to allow Two Rivers to contract with other states, specifically Wyoming, to take prisoners led to Hardin's asking for an attorney general's opinion. That opinion was issued Monday and affirmed that the facility can't take out-of-state inmates. "We bought into the risk of there's sufficient inmates, because they are out here," Harling said. "But for somebody to, as far as I'm concerned, change the rules once we get open, is just wrong. "Or, somebody should have said in 2005, 'By the way, it's not legal to do what you want to do,' " he said. "You can't just stick your head in the sand after you said, 'We really like the idea and it's a good project,' and then two years later say, 'We say it's not legal any more.' " The two attorneys listed in the bond project's official statement were not available for comment. Investment was a risk, study reported -- Bond holders took a risk by funding the Hardin prison project without contracts that secured revenue, according to a feasibility study commissioned by the underwriters. The study by Howard Geisler, of GSA, Ltd. based in North Carolina was completed in January 2006. Here are some of the project's "potential obstacles to project success," from the study: • No assurances that Two Rivers Authority would enter contracts or that any contract would yield enough money to meet financial obligations; • TRA had no contractual guarantee that any specific number of detainees would be held for any defined period; • TRA had no contractual guarantee that Montana Department of Corrections would not build more space or that other detention facilities would not be built to "service the target market," and that the state of Montana was the primary market focus, based on the assumption that TRA would be awarded one more publicly bid contracts. It further states that future economic conditions, legislative change and government policy could change the numbers of persons for which the state is responsible or has the fiscal resources to house," the study states. "Several federal agencies are viewed as potential users and their use level will be dictated by government policy and budget allocations." "The factors listed above define potentially significant risks to potential purchasers of the bonds, and the vast majority of them are linked to influences over which the Authority (TRA) has no meaningful degree of control," the study states. Here are the "factors mitigating the potential obstacles" listed in the study: • The U.S. Marshals Service uses local detention facilities across the country to house prisoners and the Montana District needed beds. • The DOC had publicly stated that it might need to send prisoners out-of-state because of the space crunch and was looking for non- profit groups to build and operate specialized treatment facilities. The total contracted bed capacity at the time was 376. • The center is located near Billings, where the Marshals Service holds people who are appearing in federal court. "In addition, the population concentration in the Billings area produces a significant impact on the (DOC) with a large number of individuals in its custody being from the area," the study states. Also, the DOC was soliciting offers to build a methamphetamine treatment center. "The Billings area, and particularly the nearby reservations represent a significant source of individuals charged with offenses related to possession of this drug," it states. • There are seven Indian reservations in Montana "Nationally, tribal jails are in general in deplorable conditions and are typically overcrowded," the study states. "Native Americans also represent a significant percentage of the (DOC) population while many Native Americans convicted of federal crimes are housed in Federal facilities throughout the United States. To that end the proposed center offers a resource to relieve pressures on the tribes and (DOC) as well as to return incarcerated individuals nearing completion of their sentences to a location nearer their home where visitations by family are possible."

December 3, 2007 AP
The Montana attorney general issued an opinion Monday saying county jails can’t sign contracts to house out-of-state prisoners, dealing a heavy blow to a new $20 million detention facility in Hardin. In an opinion issued Monday, Mike McGrath said the Legislature never envisioned that county detention centers would be used for the long-term confinement of out-of-state or federal felons. McGrath said such a move would transform county jails, feasibly filling them with out-of-state inmates so they are no longer available for placement of Montana offenders, McGrath’s opinion said. The opinion was requested by the city of Hardin, which is operating the 464-bed Two Rivers Detention Center with the city of Lodge Grass. The new detention center, completed this summer, has been unable to open because it does not have contracts for the 250 inmates needed to make opening the jail economically feasible. Studies as late as November 2005 showed that such a detention facility could easily be filled with state and federal prisoners, said James Klessens, director of Two Rivers Authority, which is Hardin’s economic development arm. But since then, state prison overcrowding has subsided because some inmates are being diverted to prerelease centers and addiction treatment and the U.S. Marshal’s Service has contracted with Crossroads Correctional Facility in Shelby to add beds there. It had sought to contract with the Office of Federal Detention Trustee in Washington, D.C., which oversees contracts and funding for all federal prisoners, and the Wyoming Marshal’s Service, Klessens said. McGrath’s opinion has the force of law unless a court overturns it or the Legislature modifies the laws involved. CiviGenics, a private company based in Massachusetts has contracted to operate the jail for two years. Payments on $27 million in revenue bonds sold for the project are to begin next year.

November 16, 2007 Helena Independent Record
Backers of a brand new but empty $20 million detention center in Hardin tried Thursday to convince two lawyers on Attorney General Mike McGrath’s staff to change a draft opinion so the jail can house out-of-state inmates. Chris Tweeten, McGrath’s chief civil counsel, and Jennifer Anders, an assistant attorney general who wrote the draft opinion, were noncommittal after lawyers and an investment banker for the Hardin jail made pitches to alter the conclusion. Attorneys for the city of Hardin and Municipal Capital Markets Group Inc., a Dallas, Texas, investment banking firm that issued the $27 million in revenue bonds to finance the Two Rivers Regional Detention Facility in Hardin, will respond in writing to the draft legal opinion next week. Tweeten said the opinion is only a draft at this point, and the attorneys haven’t made any final recommendation to McGrath, who reviews and often makes revisions in the final version. But, Tweeten said, “There have been relatively rare instances where we have changed the opinion 180 degrees from where the draft is.” At issue was a draft attorney general’s opinion requested by Rebecca A. Convery, city attorney for Hardin. She asked whether the state Corrections Department has the authority to decide whether convicts from out-of-state law-enforcement and correctional agencies may be housed in a multi-jurisdictional jail like the one in Hardin. She also inquired whether a multi-jurisdictional detention center may contract for the confinement of prisoners committed to an out-of-state correctional facility. The draft opinion concluded that a multi-jurisdictional jail may not contract to house out-of-state inmates because that authority has been reserved for the state Corrections Department under “very narrow circumstances.” There is evidence of “a legislative intent not to allow the interstate exchange of inmates to and from Montana,” the draft said. Convery said the Hardin facility is not seeking permission to house convicted felons from out-of-state prisons or the federal correctional system for the long term. Instead, she said, the Hardin jail would be used to house post-conviction felons on a short-term basis of no more than two years. Tom McKerlick of the Two Rivers Authority, Hardin’s economic development arm that owns the facility, said officials believed the project had the support of former state Corrections Director Bill Slaughter, But he said it lacks the support of Director Mike Ferriter, who took over the state agency in July 2006. In addition, U.S. Marshal Dwight Mackay of Montana had told them the U.S. Marshals Service was interested in space at the Hardin facility, but, as it turned out, the private prison in Shelby got the contract instead. “Quite honestly, we were told by the Marshals Service and the state, you build it and we will come,” Convery said. She said the jail has lined up some short-term contracts from out of state, but the Montana Corrections Department won’t allow them. Michael W. Harling of Dallas, executive vice president of Municipal Capital Markets Group Inc., said the facility has $27 million at risk. That was the amount of the revenue bond issue, including $20 million for the construction, and to cover payments during a few months of transition before opening. Every day the jail isn’t occupied it owes $7,000, he said. The jail, designed to hold 464 prisoners, would employ 105 people with an annual payroll of $2.5 million if filled to capacity. Tweeten asked if the jail supporters had tried to make any changes to state law at the Legislature that might allow the facility to hold out-of-state prisoners. The jail backers said they had no indication that they lacked the support of the Corrections Department. D. Hull Youngblood, an Austin, Texas, attorney representing Municipal Capital Markets Group, took issue with the draft opinion suggesting that one section of the law involving state prison facilities “trumps” another involving community corrections programs. “Statutes can co-exist without overturning each other,” he said. The draft opinion said: “The Legislature clearly intended to limit the authority of any correctional facility or governmental agency, other than the state through the Department of Corrections, to contract for the placement of Montana inmates out-of-state or to receive offenders from other jurisdictions.” It adds: “While the interstate exchange of convicted felons may be an acceptable practice in other states or facilities, it is not one that our Legislature has freely sanctioned.” Youngblood said the Hardin prison “was not developed, planned and built in a vacuum.” He said much discussion took place. Tweeten suggested the Hardin jail backers could seek clarification from the Legislature when it meets again in January 2009.

November 10, 2007 Billings Gazette
If a draft opinion from the state Attorney General's office stands, it may mean disaster for the Two Rivers Regional Detention Facility in Hardin. The state has no need for additional prison beds and contends that Two Rivers is not allowed to house out-of-state inmates. Without contracts for inmates, the jail can't open and may not be able to begin repaying loans taken out to build the facility. The state Department of Corrections last week sent a letter to the attorney general's office officially agreeing with the draft opinion, said its chief legal counsel, Diana Koch. But James Klessens, director of Two Rivers Authority, Hardin's economic development arm and the owner of the facility, is hoping for a solution. A meeting with an assistant attorney general is set for Monday to discuss the draft opinion. The draft addresses long-term contracts, and Two Rivers Authority is interested in short-term contracts, Klessens said. "We don't believe the question they answered was really relative," Klessens said. The deadline to comment on the draft was last week, and those comments must be considered before a formal opinion is issued on whether Two Rivers can contract with Wyoming to bring prisoners to Hardin and open the jail. "The Legislature clearly intended to limit the authority of any correctional facility or governmental entity, other than the State through the Department of Corrections, to contract for the placement of Montana inmates out-of-state, or to receive offenders from other jurisdictions," according to the draft opinion. At capacity, the jail could employ about 105 people with a $2.5 million annual payroll. Would-be employees wait -- Heather Edwards, a 24-year-old Hardin native, is among those on a waiting list for a job at Two Rivers Regional Detention Facility. "I've got everything done, I'm just waiting on a job," Edwards said. "They can't say for sure you have a job because it's not open yet." Edwards graduated from Dickinson State University in North Dakota with a major in political science and a minor in psychology. While going to DSU, she worked as a detention officer at the jail in Dickinson. She returned to her hometown thinking Two Rivers would provide a great career opportunity. She is commuting to Billings to work at the New Day Ranch but hoping for a job at Two Rivers. "I still believe in their administration, so I'm kind of holding on," Edwards said. Obligations coming due -- The facility is under the gun to begin repaying $27 million in revenue bonds sold for its design, $20 million to build the 464-bed facility and to cover payments during a few months of transitional time before opening. That transitional money will run out at the end of the year. CiviGenics, a private company, has contracted to operate the jail for two years. The facility was completed this summer, and leaders hoped it would be housing inmates by September. The company, based in Massachusetts, operates 19 jails, jail management and corrections programs and more than 100 treatment programs in 14 states. When CiviGenics did feasibility studies as late as November 2005, it appeared that such a detention facility could easily be filled with state and federal prisoners, Klessens said. However, in-state inmates are not available now because prison crowding has abated. The state has developed programs that divert some prisoners, and the U.S. Marshal's Service has contracted with Cross Roads Correctional Facility in Shelby to add beds there. Getting inmates in the door --  Two Rivers Authority has a small contract with the Bureau of Indian Affairs, but it won't fill the 250 beds needed to make the jail economically feasible to open, which includes hiring 60 to 70 people to get started. The development group is working on an agreement to take prisoners through the Office of Federal Detention Trustee in Washington, D.C., which oversees contracts and funding for all federal prisoners, and with the Wyoming Marshal's Service, Klessens said. Both would be predicated on an AG's opinion that Two Rivers is eligible for out-of- state prisoners. The draft opinion contradicts that. "While the interstate exchange of convicted felons may be an acceptable practice in other states or facilities, it is not one that our Legislature has freely sanctioned," the draft opinion states. "For this reason, your proposal to bring out-of-state felons into Montana without restriction or oversight is inconsistent with the Legislature's prerogative to keep Montana inmates in this state unless overcrowding is the issue, and to limit the use of Montana facilities for housing out-of-state convicts." Two sections of Montana law address correctional facilities and detention facilities. Two Rivers leaders have maintained that they fall under the latter, while the Corrections Department - and the draft attorney general's opinion - maintains that it fits into the former. The draft opinion says that under the correctional facilities law, Corrections "retains ultimate control over the interstate movement of inmates." Further, it says that Corrections is the only entity that state law allows to send prisoners out of state or bring them into the state. The draft maintains that while state law authorizes a local government entity, Two Rivers Authority, to contract to hold inmates, the more detailed statutes that address paying for those services don't mention long-term confinement. Two Rivers leaders believe the facility can hold other state's prisoners, but only for the short-term, Klessens said. The draft opinion considers long-term contracts, he said, while the facility was designed and intended for short-term contracts not exceeding two years. Part of the problem is language, Klessens said. The draft opinion refers to a 1989 change in state law that replaced the term "county jail" with "detention center." The confusion arises, Klessens said, because Two Rivers is the largest and first facility in the state that would operate like a county jail without fitting neatly into the law that guides those centers. DOC puts state prisoners, either awaiting trial or transport to the state system, in local facilities all the time, he said.

October 20, 2007 Billings Gazette
Construction of Hardin's new $20 million, 464-bed detention facility is complete, but no inmates are housed there. The jail will sit empty at least until December, as Hardin waits for an attorney general's opinion on whether it can take out-of-state prisoners. The wait may be longer, as Two Rivers Authority, Hardin's economic development arm, struggles to obtain contracts for inmates. TRA, which developed the detention facility because it would bring more than 100 jobs to the economically depressed area, took control of the building in July. Staff said then that the facility could be opened by September. But the clock is already ticking on $27 million in revenue bonds that need to be repaid. So far, a reserve fund from the sale of the bonds has covered debt service, but that money will run out at the end of the year. "About January we need to be operational," TRA Director James Klessens said. "Our concern is we have a big empty facility right now and we need to fill beds. We're tremendously disappointed we don't have 300 to 400 people in this facility." TRA's only arrangement to house prisoners is a small contract with the Bureau of Indian Affairs that won't begin to fill the 250 beds that TRA needs to make opening the doors economically viable, Klessens said. Two Rivers plans to charge $59.60 a day to house a detainee. TRA hopes that by early November, the Attorney General's Office will release an opinion that will allow it to take prisoners from Wyoming. If the decision allows TRA to contract with Wyoming, Klessens said, the jail could open as early as mid-December or January. It will take at least a month to train employees, he said. Some employees were hired this summer, and more than 50 others had been offered commitments for employment. At capacity, the detention facility will have a staff of 105 and a $2.5 million payroll, TRA has said. During the wait for opening, some of the people offered jobs have taken other employment. It would require 60 to 70 employees to operate the facility with 250 inmates, Klessens said. "It's hard to take on that kind of payroll load without definitively knowing you have (income)," he said. Klessens wouldn't speculate on an opening date if the attorney general's decision goes against TRA. TRA contracted with a private company, CiviGenics, to operate the jail for two years. Since construction was substantially completed in July, CiviGenics has paid the expenses for the jail, which is part of its contract, including paying the six people now working in the facility. Of the $27 million bond sale, $19.6 million went to build the facility. The rest paid for the bond sale and engineering work, as well as a reserve to pay bond service to Municipal Capital Markets Group, a group of Texas investors that bought the bonds. Room in jails -- The facility is designed to hold detainees - those convicted of misdemeanors or felons waiting for sentencing or placement in a prison - for up to two years, Klessens said. The problem is that prisoners aren't available. "We don't need the space right now," said Bob Anez, spokesman for the state Department of Corrections. This week 40 men and seven women were being held in county jails statewide before they are sent to state prisons or Crossroads Correctional Facility in Shelby. A year and a half ago, 150 such state prisoners were being held in county jails, Anez said. The number has been reduced, in part, because of state programs that send eligible prisoners to treatment programs, Anez said. "The Department of Corrections has nothing against these folks down there and their effort to develop an economic development project," Anez said. "We recognize they see this as an asset to that part of the state. The DOC wishes them all the luck in the world in that regard. In terms of our participation in the facility, it's going to be minimal." Diana Koch, the DOC's chief legal counsel, said the state would probably be willing to contract with the Hardin facility to hold prisoners before they are moved into the state system, as it does with counties around Montana. "It's not a significant number," Koch said. "We don't have a significant number in Yellowstone County or Missoula County, and we wouldn't have a significant number in Hardin. It would be a handful at most." Space for 52 prisoners opened up in Shelby this summer when federal prisoners there were moved into an expansion that operator Correctional Corp. of America opened under contract with the U.S. Marshals Service. People from CiviGenics met with Montana U.S. Marshal Dwight MacKay while studying feasibility of the Hardin project, MacKay said. At the time, the Marshals Service was shipping prisoners out of state. "Two years ago we were hurting for beds," MacKay said. "We put out the call if somebody built beds that would pass the Marshal's muster, we were interested in talking with them about a contract." But CCA stepped up to the plate first, MacKay said. The company worked with the state to develop a waiver to build a 92-bed expansion to its facility and also with officials in Washington, D.C., to write a contract for the project. The government is bound by that contract, MacKay said. "I know the people in Hardin want us to use their facility, but we'd have to break the contract we already have," MacKay said. "That would not be beneficial for the taxpayers. We'd be paying for beds we're not using." MacKay said that even if there were a need for more jail space in the Billings area, he would prefer to expand the contract with Yellowstone County so the inmates would be held closer to the federal courthouse in Billings. MacKay acknowledged that the jail could be a problem for Hardin. "I don't want to be a part of any political firestorms down there," MacKay said. "All I want to do is make sure my prisoners are safe in a secure area and we fulfill a contract we're obligated to." AG's opinion -- Hardin City Attorney Rebecca Convery asked for the attorney general's opinion in late August, after Montana corrections officials said the state had no need for space at Two Rivers, Klessens said. The attorney general's office has 90 days to reply. TRA has looked farther afield for contracts, including Wyoming corrections and the U.S. Marshals Service there. Wyoming authorities won't contract with Two Rivers without approval from the Montana Department of Corrections, Klessens said. Koch and Klessens said the state and TRA disagree about what state laws govern the Hardin facility. At issue is whether the facility can hold people charged with or convicted of felonies in other states. Klessens believes that short-term holds are allowable. Koch does not. "The department did not discuss this, approve it in any way, shape or form before they decided to build it," Koch said. "We have no vested interest in seeing this fail. We would really like to see them be successful, but what we're doing is seeing what we can do, legitimately, with the statutes that are in place right now. We don't want to violate any statutes." TRA is an autonomous arm of the city of Hardin and the facility is local-government-owned, just like any other county-owned jail in Montana, Klessens said. It is guided by statutes that allow taking short-term holds from other government agencies, he said. TRA has a private operator, but it is not a private facility, which falls under a different set of laws, he said. The facility can bring in Montana felons who are waiting to be sentenced or to be placed in a prison, Klessens said. "Our question is, if Wyoming has needs for the same, why can't we do that? We think it's a simple question," Klessens said. Seeking contracts -- TRA also is working with the Office of Detention Trustee in Washington, D.C., which oversees contracts and funding for all federal prisoners, to talk about taking U.S. Marshal's prisoners out of Wyoming. The Montana U.S. Marshal's office contracts with a private jail in Shelby. TRA has been working with Montana counties to set up intergovernmental agreements so if those governments have an inmate housing need they could send people to Hardin, Klessens said. Why did Two Rivers Authority build a regional detention facility before it had contracts for inmates? That's how the industry works, Klessens said. Agencies want to see a facility before they sign up to send inmates there. Two feasibility studies before groundbreaking showed the jail would be viable, including a November 2005 study that said the state wanted to contract for about 365 beds. "Nobody built this thing on a wish and a prayer," Klessens said. Klessens said that during those studies, indications from the U.S. Marshals Service were that the agency planned to use the Hardin facility when it was built. He pointed to a January 2006 news article that quoted MacKay saying, "Build something, we'll probably use it." "What that tells me, is he was saying, 'Hey, this is a good thing, this is going to solve big issues going on in the world of how do we deal with jail overcrowding,' " Klessens said. He said the Montana Board of Crime Control commissioned a study in 2006 of jail overcrowding that never mentioned the Hardin facility, which broke ground that June.

The Villas (AKA: The Restitution Center), Greeley, Colorado)
June 25, 2008 Greeley Tribune
Residents of Greeley's halfway house, The Villa, will move to the jail Monday with Intervention Inc. taking control of the community corrections services. Kevin Strobel, chairman of the Weld County Board of Community Corrections, said Intervention Inc. was awarded the request for proposal on June 4 in light of a reports detailing several problems in the operation of The Villa including sexual liaisons in what became known as the "Boom-Boom Room," and a tunnel that held weapons and drug paraphernalia. Community Education Centers, Inc. of New Jersey entered an agreement in May with The Villa's owners Avalon Correctional Services Inc. of Oklahoma to provide services until the end of the fiscal year on July 1. Strobel said Intervention Inc. does not have a facility in Greeley, and will rent three new pods from the Weld County Sheriff's Office temporarily to operate. Clients under CEC's supervision are to be transferred Monday to Intervention Inc.'s supervision at the jail. While the facility will be housed at the jail, 1950 O St., Strobel said it will not be locked and will operate as a community corrections facility separate from the jail. In the coming year, it is expected that either Interventions or Weld County will build a facility for the program. The Villa -- also known as The Restitution Center at 1750 6th Ave. -- is still owned by Avalon. The CEC is suing Weld County for awarding the contract to Intervention Inc. Strobel said the Weld County Board of Community Corrections deems Interventions an appropriate management company, and he expects the transition to be safe. The changes come based on Weld corrections officials' March request for new operators to bid on running the program. A Colorado Public Safety Report on The Villa cited several violations such as: Unqualified staff members, staff members having sexual relations with inmates, falsified drug tests and a lack of sufficient security.