SOUTH DAKOTA
 HALL OF SHAME


PCI, 1114 Brandt Drive, Tallahassee FL 32308

State Training School and Juvenile Prison
Plankinton, South Dakota
Cornell
December 7, 2006 Sioux City Journal
The old state reform school at Plankinton will reopen next month after being closed for five years, state Corrections Secretary Tim Reisch said Tuesday. Reisch told the state Corrections Commission that a firm called Clinicare will provide services at the former State Training School for troubled juveniles who need sex-offender treatment, or treatment for aggressive behavior, or have mental health issues. The facility will be called Aurora Plains Academy, and it will offer intensive residential treatment for up to 66 juveniles, Reisch said. Clinicare is hiring employees now and plans to open the doors in mid-January, Reisch said. "It's a very good thing for kids in this state," the state official said. Reisch said the Wisconsin-based firm took possession of the building on Nov. 15. Children currently under jurisdiction of the state Corrections Department but in private treatment in other states will not be moved to Plankinton if they are doing fine where they're at, he said. But Reisch said those who are struggling in other states will be returned to the Clinicare academy. State Corrections and Social Services officials have identified juveniles who will be placed at the Plankinton facility, he said. The academy has 18 beds for male sex offenders, 24 beds for males and females with aggression problems, and 24 beds for males and females needing mental health services, Reisch said. A private corrections company took over the reform school briefly in 2004, but the company's deal with the state fell apart over a rate dispute.

November 8, 2004 Argus Leader
Cornell Cos. finally has pulled the plug on its experiment with the former State Training School in Plankinton. Cornell says it won't reopen a 40-bed detention center. And it won't go ahead with plans for an 80-bed residential treatment center. The company came into South Dakota with great fanfare and support from the folks in Plankinton, as well as those in Pierre. The company has experience running detention centers and treatment facilities for youths, and it worked out a deal to reopen the former school. That meant jobs in Plankinton. It meant facilities in South Dakota, so we didn't have to ship young people out of state. It won't happen now, at least not with Cornell, which says it can't make enough money. All that means is that we start over.

October 31, 2004 KELO
A Texas company trying to get Plankinton's detention center up and running again, has officially pulled out of the state. Cornell Company won't re-open the 40-bed treatment facility that closed in August, because they found out that they'd get less money per child from the state than expected. Mayor Lawron Bohr says, "It's just been almost a blessing for them just to say, we're done, were not going to do it anymore & now we can start looking for somebody else."

October 29, 2004 Yahoo
Cornell also announced its closure of a 40-bed detention center in Plankinton, S.D., is permanent and that it will not open an 82-bed residential treatment center at the same location. The Plankinton Regional Detention Center, which opened in May and closed in August, will not be reopened. A residential treatment center, which was scheduled to open in August, will not be opened as the Company withdraws from the South Dakota market at this time. Both programs were located on the campus of the former Plankinton Training School. Mark Thompson, regional vice president for Cornell, said, "After a very careful analysis, it became obvious that the per diem expected from the state of South Dakota and in our judgment necessary to provide the appropriate level of services to the clients, was not forthcoming. We regret that we will not be able to assist in returning those juveniles, currently in treatment out of state, to South Dakota for treatment."

August 9, 2004
Here is our critical review of the past week’s triumphs, tragedies, oddities and blunders.  HISSES on the collapse of the reopening of the juvenile detention center in Plankinton. What just days ago appeared to be a rosy future for the former State Training School now has taken on a funeral pall. Sharp disagreements between the state and Cornell Companies over rate of payment caused a major rupture earlier last week, which turned out to be a roadblock that nobody wanted. There’s little to do now except start over and seek other options for this facility, which needs to be utilized.  (The Daily Republic)

August 5, 2004
Unfortunately, the picture that has emerged regarding the Cornell Companies closing at Plankinton wasn’t a major misunderstanding over reimbursement as much as an assumption by Cornell that the state would give in and pay a higher rate.  If that turns out to be the case, it will go down as one of the biggest miscalculations a company ever could make.  What remains puzzling about this whole unfortunate episode is why a company would gamble so much on the state of South Dakota coming across with a higher pay rate for juveniles at the residential treatment center. The difference between what the state had offered - $125.27 - and what Cornell said it expected to receive - $179 - is a significant amount. However, Gov. Mike Rounds and Social Services Secretary Jim Ellenbecker both stated unequivocally that the state never indicated, much less promised, that it would pay the higher rate.  Even if we give Cornell the benefit of the doubt and assume it was all a big misunderstanding, the logical question then is, what kind of business operation would move forward on a project without knowing exactly what its compensation would be?  (The Daily Republic)

August 5, 2004
Cornell Companies announced Thursday that it would temporarily close its juvenile detention center at Plankinton while working to secure a higher rate of payment for its residential treatment center.  The 40-bed detention center opened only three months ago. It will close as soon as the four remaining children are placed in other facilities.  Cornell had expected to open the treatment center later this month with daily payment of $179 per child from the state. But last week, the state approved a rate of $125.27.  “The structure that’s in place was dependent upon the economies of scale of running both programs side by side,” said Paul Doucette, Cornell’s vice president of business development and public affairs. “It was not a good investment on the part of our shareholders or us to retain the smaller operation pending the opening of the larger operation. It’s a better arrangement to suspend both operations.” Aurora County Commission Chairman Oscar Thompson said Thursday that he was disappointed with Cornell, but he was still hopeful about the company’s future in Plankinton. “I’d say there was a little problem in prior planning as far as Cornell is concerned,” Thompson said. “I’m very disappointed that they did not have everything positively in place. We as a county would like to see a stronger commitment on behalf of Cornell - we evidently were misled a little, too.”  On Wednesday, as rumors of a closure surfaced, Gov. Mike Rounds and other state officials said they never led Cornell to believe that the $179 rate for the residential treatment center would be granted. Rounds said he thought Cornell was trying to “threaten to take jobs away at Plankinton to put pressure on the state.”  Social Services Secretary Jim Ellenbecker and Child Protection Services Administrator Virgena Wieseler also denied Cornell’s claim of being assured a special $179 rate. They said the state could not make an exception to its rate structure, especially when the average rate of payment to the other 13 residential treatment programs in the state is only $113.68. Furthermore, state officials said Cornell had not shown any evidence that its programs would be more advanced than the other in-state programs. And without a higher level of care, the state could not justify a higher payment.  Doucette said Cornell was assured the $179 rate by a “very senior state official.” He declined to identify the official.  (The Daily Republic)

August 5, 2004
Republican State Sen. Ed Olson said Thursday that an effort is under way to bring all the players in the Cornell situation to a meeting, even though some legislators are angered and bewildered by Cornell’s business practices.  Cornell officials said they were led to believe that the state would pay $179 daily for each child housed at the company’s residential treatment center in Plankinton. State officials emphatically deny that claim, saying that Cornell knew it could only qualify for the rate of $125.27 that was granted last week.  If company officials had done any research at all before starting operations at Plankinton, Olson said, they would have known that the highest rate possible under the state’s current system is only $125.27. So when company officials said they were assured a higher rate by somebody in state government, Olson was skeptical.  Olson said one of the Cornell officials admitted privately that the company may have been too arrogant in its dealings with the state. The official also regretted, Olson said, that Cornell had not insisted on a written guarantee of a higher rate.  “My next question,” Olson said, “was whether any state official or anybody in a position with the state ever said to you that you would get a rate of $179 - whether any state official ever said to you that there was any possibility at the current time that you would get any other rate, at the level of licensure that you’re looking for, other than $125.27. And he said no.”  Olson, therefore, blames Cornell executives for the current state of affairs. But not every lawmaker feels that way.  (Mitchell Republic)

August 5, 2004
Three months after the State Training School at Plankinton reopened as a privately run detention and treatment center, the company operating the facility says it might close the doors.  Officials with Houston-based Cornell Cos. told the Aurora County Commission this week that they're not sure they can afford to treat juveniles at the daily residential-treatment rate offered by the state.  Cornell said it needs $179 a day for each child the South Dakota Department of Social Services sends it. The state said its rate structure allows it to pay only $125.27. Rep. Lou Sebert, R-Mitchell, said he was puzzled that Cornell would spend money on refurbishing the old training school and not have some idea of the rate that the state was willing to pay.  But Virgena Wieseler, administrator for Child Protection Services in the Department of Social Services, said Cornell knew how high the state was willing to go.  She said Cornell officials met with the departments of Social Services and Corrections last October and were told how those rates were formulated, taking into account such factors as administrative, operational and capital costs. They also were told the highest rates the state paid to other facilities in South Dakota providing similar services.  "The highest rate then for a residential treatment facility was around $121 a day per child," Wieseler said. "No other facility in residential treatment in our state was getting anything above that. And Cornell knew that."  The company was told the same thing in January, Wieseler said, and again in March.  "At no time did anyone in our department guarantee Cornell that they would receive $179 a day or a rate higher than any of the other residential providers," she said. "And I believe that was communicated to them."  (Argus Leader)

August 5, 2004
A decision could come by week's end on whether the company that reopened the state training school at Plankinton will need to close the center at least temporarily.  Chas Fedorco, regional director for Cornell Companies, said the center is still providing treatment but is struggling financially.  ''We're looking at our options, and we hope to make a decision by the end of the week,'' Fedorco said.  However, Fedorco said Cornell officials had been asking for $179 per child per day.  Paul Doucette, vice president for business development and public affairs for Cornell, said the rate proposed by the state makes it tough to provide proper care.  (AP)

December 15, 2003
The mission of a juvenile correction facility is a complex issue. But a few assumptions are held as true by all: facilities need well-trained employees who will not abuse the juveniles. They must be secure, sanitary and truthful to the public about their operations.   The task of a business is simpler: minimize costs and maximize revenues. Companies pay employees the minimum, find suppliers with minimum cost and charge the most they can.  What happens when those objectives come into conflict? For the former State Training School in Plankinton, that question is being ignored. The school was shut down in 2001 after the death of Gina Score. Now, the state has agreed to lease the facility to Cornell Corrections, a company managing 70 correctional facilities in 14 states.  Well, not really. The state is leasing it to a task force in Plankinton, who is subleasing to Aurora county, who is then subleasing to Cornell. This is being done to avoid a legal requirement that governmentally leased facilities need a license from the Department of Social Services, which would only be granted if various repairs were performed on the facility. Oh, by the way. The lease is for $1 per year.  Cornell must be a fairly reputable company - or not. Cornell has an outrageous rap sheet. The Associated Press in April 2000 quoted a New Mexico police official, saying approximately 30 percent of Cornell's monthly bills to Santa Fe were erroneous. The Arkansas Board of Nursing found in 2002 that Cornell knowingly hired a psychologist with false credentials. State inspections of the Cornell-operated facility in Charlton County, Ga., indicated "lax security, inadequate medical facilities, poor sanitary conditions and sloppy record keeping."  And yet, Cornell managed to report a $31 million profit in 2002. Combined with that sloppy record-keeping and erroneous billing, the Wall Street Journal accused them of Enronitude: a "charity" called Provident provides off-the-books financing for Cornell through complicated loopholes in financial law relating to Provident's non-profit status.  In 1998, the private corrections industry donated over $500,000 to state campaigns. In state elections, where campaign costs are much lower than federal elections, this money goes quite far. Beyond that, Lehman Brothers, a major financier of Cornell, is a multi-billion dollar company involved in strip-mining in northern Arizona and other highly political activities. With billions of dollars floating around, Lehman gains lobbying influence.  Given the necessity of correctional facilities, they must be government-operated. A 1997 survey by criminologist James Austin found that violence rates are 50 percent lower in government-operated facilities. The 2000 Corrections Yearbook reports that training and pay of employees in government facilities are 40 percent higher.  I leave you with a frightening quotation from Steve Logan, the CEO of Cornell: "Since Sept. 11, there's a heightened focus on detention - more people are gonna get caught. So I would say that's positive. The other thing is with the focus on people that are illegal and also from Middle Eastern descent in the United States. There are over 900,000 undocumented individuals from Middle Eastern descent. That's a huge number, and that is a population, for lots of reasons, that is being targeted. The federal business is the best business for us. It's the most consistent business for us, and the events of Sept. 11 are increasing that level of business."  As citizens of South Dakota, we have a responsibility to stop the reopening of the Cornell Regional Detention Center, scheduled for January. Do something. And if you're looking for a partner in crime, my e-mail address is right here.  (University of South Dakota paper)

May 26, 2003
The juvenile prison and girls’ boot camp located at Plankinton that closed following the death of Gina Score and reported abuses of other residents, remains vacant. Earlier this year South Dakota Governor Mike Rounds urged the community to find a use for the facility and as an incentive offered to lease it to them for $1 if they found a viable use for the facility.  According to an article in the Rapid City Journal on May 8, Aurora County is looking at entering into a contract with a private, for-profit corrections company known as Cornell Companies (formerly Cornell Corrections), based in Houston, Texas.  An official with Aurora County who asked that he not be identified stated that the County has zeroed in on one possibility – Cornell. He said the project would not be advertised for competitive bids.  When Deb Phillips, West River Coordinator of the Parents Who Care Coalition, heard of the potential of the facility being run by Cornell, she looked into the company to find out their record in other states.  Several persons responded with a great deal of information about Cornell.  Members of that organization informed Schindler and Phillips “Cornell has an abysmal record. They did particularly badly in their treatment of juveniles for which they were receiving something like $265-$270 dollars per head, per day….”  Reports were forwarded to Phillips about Cornell. It had been forced to close a facility for juveniles called New Morgan Academy near Bethlehem Pennsylvania following 31 reported cases of physical and sexual assault on juveniles by staff.   In addition to the Morgan Academy case, Cornell contracted to operate the adult facility known as the Santa Fe County Detention Center in New Mexico beginning in 1999. “Cornell’s tenure at the jail was a fiasco: from sexual misconduct to inadequate medical care to over billing, Santa Fe became a textbook case for the failure of prison privatization, “ according to County officials quoted in the local paper.  The officials said that they had paid employees wages less than that required under the New Mexico minimum wage act.   In Alaska grassroots groups have prevented Cornell from obtaining two contracts but the company has not given up on finding a way to turn substantial political capital into a prison contract.  In 1998 a criminal conviction of former Richmond, Virginia Mayor Leonidas Young occurred in the case of USA v. Leonidas Young. The conviction was based partly on bribes of $44,500 from Cornell to Young, ostensibly for a campaign meant to influence public opinion in favor of a Cornell jail and prison.  The whole issue of prisons for profit has been a major concern for at least 15 years. Studies have shown that private prisons do not actually save the government money. Joshua Miller of the American Federation of State, County and Municipal Employees said that a study showed that compared with public facilities, 65 percent more inmate-on-inmate assaults and 49 percent more inmate–on-staff assaults were reported in privately run prisons. The job turnover rate for private prison workers is 41.2 percent compared with 14.9 percent for public prisons, according to Corrections Yearbook.  (Hazel Bonner)

May 26, 2003
A Texas corrections company has expressed interest in reopening the former State Training School near here.  However, an official with Cornell Companies, of Houston, said company officials still are crunching numbers and negotiating for the use of the facility.  “(Community members) are trying to put it together as an economic development project. There seems to be a need for the facility,” said Paul Doucette, vice president of business development for Cornell, which is privately owned.  Gov. Mike Rounds announced in January he would be willing to lease the Plankinton correction facilities to the community for $1 if residents could find a viable use for the buildings. The State Training School and juvenile prison was closed in 2001 by then-Gov. Bill Janklow.  (The Daily Republic)

South Dakota Department of Corrections
Corplan
June 16, 2003
A proposal to build a 500-bed corrections facility in the Huron area has been shelved for now because of a lack of commitment for inmates from state and federal officials.  "We're disappointed that it doesn't appear the project will proceed, however we stated from the initial announcement that we would perform due diligence and make certain that such a facility would be utilized before any construction was started," Shawn Lyons, executive director of the Greater Huron Development Corporation, said.  Corplan Corrections of North Carolina has suspended its feasibility study.  Study findings showed that a successful corrections facility project would most logically depend on a significant commitment of beds from the state. In the 2003 session, lawmakers approved a Department of Corrections plan to spend $13 million in federal funds to expand state facilities.  Department projections indicate it will be some years before a reasonable level of occupancy is possible.  Other government agencies, including the U.S. Marshal's Service, were considered for the project, he said. Currently, that agency contracts with counties throughout the state for inmate space. Some of those counties are considering expansion projects of their own, which may result in an opt-out of the property tax freeze, Lyons said.  Lyons said the study also took into consideration the possibility of contracting with surrounding states for bed space.  However, the study concluded that relying on out-of-state inmates could be a problem because of economic and political issues as well as the potential those states might pursue plans of their own.  (The Plainsman)