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.

Community Education Centers, Roseland, New Jersey
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
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.

Falls County Jail, Marlin, Texas
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
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.

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
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.

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
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.

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.

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