Special Investigation

Security records mixed for private prison firms

Ohio will announce next month which firm will run the state’s prisons.

By Tom Beyerlein and Laura A. Bischoff, Staff Writers Updated 7:29 PM Saturday, August 6, 2011

An escape from a privatized prison in Kingman, Ariz., last year left two people dead and raised questions among some whether the same nightmare scenario could happen in Ohio.

The company that operates the Arizona State Prison Complex at Kingman is Utah-based Management and Training Corp., one of three for-profit corrections companies seeking to buy and operate five Ohio facilities under Gov. John Kasich’s prison privatization plan.

Escapes can and do happen at publicly operated prisons too. But a stunning lack of administrative oversight before the July 30, 2010, escape at Kingman has opponents of the Ohio plan calling it a textbook example of what can go wrong when private companies operate public corrections institutions.

Alarms blared at the Arizona State Prison Complex after three convicts escaped, but an investigation found that guards ignored them: The alarm system had been malfunctioning for two and a half years, sometimes going off 200 to 300 times per shift.

Before they were captured, authorities say, two of the fugitives and an accomplice kidnapped a retired couple vacationing in New Mexico, killed them at a remote ranch, then doused their camper with liquor and set it ablaze, burning their bodies beyond recognition.

The Oklahoma couple’s survivors are suing the state and the company for $40 million.

Ohio is joining Texas, Arizona, Florida, Oklahoma and Mississippi as one of the top states using the $3 billion private prison industry to house convicts. Terms of the bids are secret, but Ohio is to announce Sept. 1 whether MTC, Corrections Corp. of America, the GEO Group or a combination of two or all three will buy and run the five prisons under contract with the state.

When the deal is completed, the Ohio Department of Rehabilitation and Correction will confine at least 5,900 of its nearly 51,000 prisoners in privately run cells. People on both sides of the debate say privatization is unlikely to stop at five prisons. “If it’s making sense and working, let’s keep going,” said Matt Mayer, executive director of the conservative Buckeye Institute for Public Policy Solutions.

Arguments for privatization

State officials hope the sale of the five prisons will generate $200 million — $75 million of which will go to shore up the $3.1 billion two-year Corrections budget — and they say the privatization of operations will save at least 5 percent, or $6.6 million per year.

The companies, according to Kasich administration officials, generally have good track records for safety, and MTC has safely operated two Ohio-owned prisons for 10 years for less money than comparable state-run prisons.

However, Ohio’s early experience with private prisons was troubled. In 1998, six inmates — five of them killers — escaped in broad daylight from a CCA prison in Youngstown that housed inmates from Washington, D.C. Like the Kingman inmates, they had cut through perimeter fences. At the time, state legislators complained that CCA officials wouldn’t answer their questions about the escape.

In a separate instance, the state didn’t renew the contract of CiviGenics Corp. as operator of an early private prison for Ohio inmates in 2001, saying the company failed to meet expectations.

Prisons spokesman Carlo LoParo said Ohio’s oversight policies, including state approval rights over the companies’ wardens, will prevent another Kingman from happening here.

“Anything can happen in a correctional facility if you don’t have the proper procedures in place,” LoParo said. “There has to be constant vigilance from the Department of Corrections to make sure safeguards are in place. That (Kingman) situation will never happen in Ohio because of our policies and procedures.”

Safety records

Like MTC, which is privately held, the publicly traded CCA and GEO also have made national headlines in recent months because of safety and security problems in some of the prisons they operate. For example:

• In November, the Associated Press published a video showing at least three guards watching as an inmate of a CCA prison in Boise, Idaho, beat another prisoner so badly he sustained brain damage. The video triggered an FBI investigation.

• The Southern Poverty Law Center and the American Civil Liberties Union are suing the GEO Group, formerly known as Wackenhut Corrections Corp., alleging it allowed widespread brutality and sexual abuse against juveniles by staff and other inmates at a private youth prison in Mississippi. And in 2009, an appeals court upheld a $42.5 million civil verdict against GEO in the death of a Texas inmate who was days away from release on a minor drug conviction when he was beaten to death with padlocks that inmates had purchased from the prison and stuffed into socks. The case led to a murder indictment against GEO by a Texas grand jury.

• In June, Florida Corrections inspectors conducted a surprise drug sweep at a GEO prison in Palm Beach County and found no guard at the front gate. No one answered a door bell, and no one responded when inspectors shined a flashlight into a security camera to attract attention. State officials are auditing the prison.

LoParo said expanded privatization is necessary to make up for cuts that were needed to balance the state budget and the end of federal stimulus funding that had been used to pay state salaries. Without it, he said, Ohio would have had to close prisons.

“Privatization is a way to save Ohio jobs, operate safe and secure facilities and prevent the state from further overcrowding our inmates,” he said.

Two privately run prisons have operated in Ohio for more than a decade. Kasich’s plan will not only expand that number to five, but also sell the publicly financed prison buildings to private companies. The state also plans to sell a closed juvenile detention center in Scioto County, perhaps to house federal prisoners or immigration detainees.

Administration officials say privatization is a good deal for taxpayers. Critics say it’s a bonanza for an industry with close ties to Republican governors.

“In Arizona, Florida and Ohio, industry lobbyists have very close connections with the governors,” said Ken Kopczynski, executive director of the anti-privatization Private Corrections Working Group of Tallahassee, Fla. “What you’re seeing is basically a political payback for them. Governors like Kasich, they should be required to wear like a NASCAR jacket. You know, ‘This governor is brought to you by....’

“This is sort of a new phenomenon: Let’s sell the state assets. It’s basically a feeding frenzy. (The corporations) got a bunch of people elected and now they’ve got to make the best of it.”

Debate over costs

Research results vary on whether private prisons are as safe as state-operated prisons or truly save money in the long run. But critics say the profit motive causes corporations to scrimp on safety and security spending to boost their bottom lines. They say when problems do occur, corporations aren’t as accountable to the public as government. And they worry that the injection of corporate cash into the system will lead to more scandals such as the “kids for cash” conspiracy in Luzerne County, Pa., in which two juvenile judges pleaded guilty in 2009 to taking $2.6 million in kickbacks for sentencing juveniles with minor offenses to detention centers operated by Mid Atlantic Youth Services Corp.

“I simply can’t believe private corporations running a prison for a profit won’t cut corners,” said U.S. District Judge Walter H. Rice of Dayton. “A private owner is far less likely to respond (to public concerns) than a political entity.”

Additionally, at a time when many governments are seeking ways to reduce burgeoning prison populations to save taxpayer money, critics accuse the major corrections companies of supporting political candidates who favor locking up more criminal and immigration offenders.

Activists have called on investors to divest themselves of corporate corrections stock because of corporate efforts to influence incarceration policies.

MTC and GEO Group officials declined to be interviewed for this story, but CCA spokesman Steve Owen said such concerns are “unfounded. We’re not in the business of public policy. We don’t grow our business by impacting crime and sentencing laws. We grow our business by providing safe, secure facilities.”

CCA, the largest corrections company with record revenues of $1.7 billion in 2010, was also the first modern industry player. Cofounded in 1983 by then-Tennessee Republican Party Chairman Tom Beasley, the company now confines more than 75,000 male, female and juvenile inmates in 66 prisons serving 19 states, the District of Columbia, the Federal Bureau of Prisons, the U.S. Marshal’s Service and Immigration and Customs Enforcement.

Owen said CCA helps governments save money by using economies of scale in the purchasing of goods and services, and in negotiating with providers for employee benefits. He said the company offers competitive pay, based on the standards of the prisons’ host communities. That translates to lower pay for guards than that offered to unionized state employees.

“We’ve been able to deliver on the value proposition,” Owen said. “Marry that with the oversight and accountability of government, (and you get) the best of both worlds.

“At the end of the day, from a business standpoint, if we’re not operating safe and secure facilities, there’s no reason for government to partner with us.”

Political connections

Privatization foes say there are other reasons that politicians engage corrections companies: Campaign contributions, lobbying and other personal connections.

Soon after Ohio dipped its toe into the private prison waters, money started flowing into campaign coffers, campaign finance records show. Since 2001, when it began running Ohio’s two private prisons, MTC has contributed a total of $103,000 to legislative and state candidate and political parties. In just the last two years, MTC donated $42,000.

In December, CCA and GEO — the other two dominant players in the industry — each contributed $10,000, the maximum allowed by law, to Kasich’s transition fund that pays for inaugural parties and other expenses.

Each of the three vendors hired well-connected Columbus lobbyists to advance their interests. In CCA’s corner is Donald Thibaut, who served as Kasich’s chief of staff in Congress for nearly 20 years. GEO contracted with Doug Preisse and Bob Klaffky, who both served as political advisors to the Kasich campaign. MTC hired Dan Jones, who went on a Florida fishing trip with then House Speaker Jon Husted in the midst of the 2006 budget negotiations.

After being elected governor last year, Kasich hired former CCA employee Gary Mohr as his corrections director and announced plans to privatize the five prisons. Mohr handed oversight of the deal to his chief of staff to avoid a conflict of interest.

MTC also hired former Ohio Corrections Director Terry Collins as a paid consultant. CCA announced in June it hired newly retired Federal Bureau of Prisons director Harley G. Lappin as its chief corrections officer and executive vice president.

According to OpenSecrets.org, which tracks campaign giving and lobbying influence, CCA and GEO have contributed a combined $20.9 million to federal candidates in the last decade. The two companies also spent a combined $19.6 million to lobby federal officials since 2000. Since 2002, GEO and CCA contributed $1 million to the Democratic Governors Association and $1.8 million to the Republican Governors Association, according to OpenSecrets.

State Rep. Mike Foley, D-Cleveland, said Ohio’s privatizations are “giveaways to corporate America,” and said they raise questions about “pay to play and basically buying influence to obtain state resources.”

Ohio Corrections officials deny political motivations, saying the privatization plan is one means of solving the state’s budget crisis. LoParo said the selection process is being done by an adminstration team in “a very transparent, very professional manner, far removed from the political process.”

Next steps

MTC currently runs the minimum-security North Coast Correctional Treatment Facility in Grafton and the medium-security Lake Erie Correctional Institution in Conneaut in the northeastern tip of Ohio near Pennsylvania.

LoParo said the MTC-run prisons have had fewer incidents of inmate-on-staff and inmate-on-inmate violence than comparable state-run prisons. And Corrections budget chief Kevin Stockdale said MTC’s prisons have come in six to 16 percent cheaper than comparable state-run prisons.

The five private prisons will house only minimum- and medium-security inmates, LoParo said. Higher-security inmates will be held only in state-run prisons and “that will not change.” He acknowledged that murderers and other violent criminals can achieve medium-security status with good behavior.

Critics worry that in practice the state would be slow to punish troubled vendors or hold the line on per-diem charges, especially when the vendors own the prison buildings. Some studies have shown that initial savings evaporate because vendors renegotiate for higher fees.

“Once the assets are sold ... the camel’s nose is under the tent,” Kopczynski said. “The vendors have (state officials) over a barrel.”

But Kopczynski said Ohio also risks sacrificing basic human rights in the name of financial savings.

“It goes to the heart of the American system of jurisprudence,” he said. “The next question is, if you can save money privatizing the prisons, can you save money privatizing the cops? The courts? What is the basic function of government?”

Contact this reporter at (937) 225-2264 or tbeyerlein@DaytonDailyNews.com.