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Bureau of Indian Affairs
Nov 5, 2017 kpax.com
BIA targets 2018 to reopen Two Rivers Detention Facility in Hardin
HARDIN - The Bureau of Indian Affairs is
working to finalize an agreement to house prisoners in the Two Rivers
Detention Facility in Hardin, which has sat vacant for about a year. During a
recent U.S. Senate committee hearing in Washington, D.C., Sen. Steve Daines (R-MT) asked BIA Director Bryan Rice about the
lease application for the jail. Rice told Sen. Daines
the application is being "fast-tracked" and said the "target
date" is 90 days, which could be January of 2018. A spokesman said the
BIA is working to provide more documents to the General Services Agency for
review. Since the deal is not yet finalized, none of the other contract
details have been made public. The Two Rivers Detention Facility was built in
2007 and billed as a big job creator for Hardin as a private prison. Most of
those promises went unrealized, however, and it remained vacant until 2014.
Emerald Correctional Management briefly ran the jail and housed some
prisoners, but the firm stopped managing the building last year.
Butte Prerelease Center
Butte, Montana
Community, Counseling and Correctional Services
March 24, 2012 The Billings Gazette
Community, Counseling and Correctional Services is looking for two women who
walked away from Butte's pre-release center Saturday morning and didn't
return. Sunny Rae Pierce, 36, and Alta Collette Little Light, 28, both signed
out of the center at about 9:50 a.m. for approved community service and were
expected to return at 11 a.m. The two were discovered missing at 11:15 a.m.
Cascade County Regional Jail
Cascade County, Montana
Aramark
January 28, 2011 Great Falls Tribune
A former Cascade County Detention Center contract employee pleaded not guilty
Thursday to five counts of sexual intercourse without consent stemming from
accusations that she had sex with an unidentified inmate. Rebecca Rose Pfeifle, 44, was charged with the felony counts earlier
this month. An affidavit from the Cascade County Sheriff's Office states that
she admitted to at least five different incidents in which she had sex with
an inmate she supervised as an ARAMARK food service employee.
January 6, 2011 Great Falls Tribune
A food service employee at the Cascade County Detention Center was charged
Wednesday with five felonies after being accused of having a sexual
relationship with an inmate. Becky Pfeifle was
arrested by the sheriff's office deputies after an internal investigation by
ARAMARK, Pfeifle's employer. Pfeifle
is charged with five counts of sexual intercourse without consent. Under
Montana law, an inmate cannot consent to a sexual relationship. The sheriff's
office did not release the name of the inmate involved in the alleged
incidents.
October 27, 2005 Great Falls Tribune
The kitchen supervisor at the Cascade County regional jail was arrested at
the correctional facility Tuesday for allegedly smuggling illegal drugs,
tobacco and smoking paraphernalia to inmates in exchange for a small fee.
Kelly Jerad McCann, 21, appeared in District Court Tuesday on charges of
transferring of illegal articles to inmates, a felony. McCann is an employee
of ARAMARK Corp., a national company the jail contracts with to supply meals
at the facility. Detention officers became suspicious when two inmates chosen
at random tested positive for marijuana.
Crossroads
Correctional Facility
Shelby, Montana
CCA/TransCor
Jun
15, 2022 dailymontanan.com
OPI
records: Investigation underway into cheating on tests at Shelby prison
Academic
testing for inmates at the Shelby prison was shut down in April and has been
"suspended indefinitely" pending results of an investigation into
allegations a test administrator helped inmates cheat to get their high
school equivalency, according to records from the Office of Public
Instruction. A private company, CoreCivic, runs the
state prison in Shelby, the Crossroads Correctional Center. It houses 758
male inmates, according to a Department of Corrections data dashboard. The
testing program, HiSET, allows adults without a
high school diploma to earn the equivalent of a high school degree. An email
from OPI in response to a records request by the Daily Montanan notes testing
was suspended at the prison on April 13 immediately following "a very
serious accusation" of cheating. "A former inmate at Crossroads
claims he witnessed cheating and plagiarism, watched a test administrator
change tester answers to correct them, and numerous students be given essay
questions in advance so someone else could write the essays," said the
email from OPI's HiSET administrator to recipients
including CoreCivic staff. "He specifically
references score ranges obtained and an estimated number of inmates who
received the HiSET credential that should not
have." A June 7 letter from CoreCivic to the
Department of Corrections said CoreCivic would
cooperate with the investigation and would continue to deliver educational
programs to inmates so they could participate in testing once it resumes. In
the letter, CoreCivic's David Berkebile
said the private prison management company aims to continue to meet
programming needs at the prison. "We understand the Department's
concerns surrounding the recent allegation to OPI about HiSET
test administration processes at the facility, and CoreCivic
will cooperate fully with OPI throughout the course of their investigation,
report submission, and any needed corrective action period," wrote Berkebile, managing director of operations. "Please
allow this letter to reiterate CoreCivic's ongoing
commitment to provide meaningful education opportunities to those in our
care." In a separate email provided to the Daily Montanan in response to
the records request, the OPI HiSET administrator
noted the status of the prison as a designated testing site is up in the air.
But Carolynn Bright, communications director for the DOC, said Tuesday access
to HiSET is critical as former inmates return to
the workforce. "Approximately 96 percent of all posted jobs require a
high school diploma or equivalent," Bright said in an email. "For
the justice-involved, not having this level of education when they return to
the community leads to public health and safety issues, along with
recidivism. Attaining a high school diploma or HiSET
is key to this population's future success." The number of inmates
affected was not clear Tuesday. CoreCivic director
of public affairs Ryan Gustin said one inmate at
Crossroads has one subtest remaining to complete the HiSET
curriculum. "Beyond this individual, it would be difficult to determine
how many other individuals would be 'test ready' and otherwise unable to test
since April 13," Gustin said in an email. In
an email to the Daily Montanan, OPI spokesperson Brian O'Leary said HiSET is conducting an investigation
into testing integrity at the prison, but OPI is not privy to the
exact status of the investigation. Records indicate the investigation by the
Office of Test Integrity at ETS, a private educational testing and
measurement organization that offers HiSET, should
be complete in July. An April email from prison warden Pete Bludworth to OPI acknowledged the request to stop testing
and also pledged cooperation: "The staff of the Crossroads Correctional
Center are committed to the highest standards of integrity in our programs
and services, and will fully cooperate with the
investigation." In response to a question from CoreCivic,
OPI noted in an email on April 28 the status of the facility as a testing
site was in question: "Depending on the outcome of the investigation and
actions required as a result, ongoing HiSET test
center designation at this point is unknown." In a phone call, ETS
directed questions about test center designations back to the state of
Montana. In an email provided in response to the Daily Montanan's records
request, OPI's HiSET administrator told CoreCivic the state will need to "identify
appropriate actions steps after the investigation is concluded at HiSET." In a statement provided by O'Leary,
Superintendent of Public Instruction Elsie Arntzen
said the following about the suspension: "The focus is on lifelong
learners where and whoever they are. It's never about a single test, it's
about learning towards the next step."
Jul
31, 2021 nbcmontana.com
Water
shortage impacts Shelby residents, private prison
MISSOULA,
Mont. - A water shortage is affecting some parts of Montana's Hi-Line --
reportedly because of low water levels in a nearby reservoir. The town of
Shelby is working on a new wellfield project to get all of
its wells online. A notice on Shelby's Facebook page asked residents not to
do laundry. Contractors knocked down the water pressure to tap new wells, but
that meant no water in the town or at the privately owned prison. Sources
tell us inmates' toilets overflowed in cells and they didn't have drinkable
water. An email from the Department of Corrections says they're providing
bottled water and portable toilets. The following is a statement from Montana
Department of Corrections Director Brian Gootkin:
Throughout the day, the Montana Department of Corrections has been receiving
updates from the leadership team at Crossroads Correctional Center regarding
a water shortage affecting communities on Montana's Hi-Line due to low water
levels in a nearby reservoir. This shortage has affected the Crossroads
facility. Work is being performed to bring water back into the reservoir, and
while this work is taking place, facility staff are providing bottled water
to the men incarcerated at the facility. In addition, water tankers are being
brought in for non-potable uses along with portable toilets. As of 5:30 p.m.,
water was beginning to be delivered to the facility via the regular water
system. However, pressure needs to continue to build and water lines must
clear of sediment before full use is restored. The well-being of inmates in
the care of the DOC is our priority, and we will continue to remain in close
contact with our partners at CoreCivic to ensure
their needs are being addressed. In addition, please find below a statement
on this subject provided by CoreCivic to the media
earlier today: CoreCivic is committed to providing
high-quality, compassionate treatment for everyone entrusted to our care. We
take very seriously our responsibility to provide a safe and appropriate
environment for those in our care, and CoreCivic
facility staff and our government partners at the Montana Department of
Corrections (MDOC) work closely together to achieve this goal. Similar to other businesses and residences in the area,
Crossroads Correctional Center (CCC) is experiencing a water shortage due to
low levels of water at the nearby reservoir. While work is being performed to
bring water back into the reservoir, facility staff at CCC are currently
providing bottled water to those entrusted to our care and plans are underway
to bring in portable toilets. We strive to address these types of issues as
quickly as possible and hope to have the water system back operational as
soon as possible.
Jan
10, 2021 nbcmontana.com
Montana
private prison confirms several inmates are being treated for skin rash
MISSOULA,
Mont. — Officials at Crossroads Correctional Center in Shelby confirm with
NBC Montana that several inmates have experienced various forms of a skin
rash that they are currently presuming out of an abundance of caution to be
scabies. They add there has not yet been a definitive clinical diagnosis.
Thus far nine inmates have been treated for the rash. Each affected inmate is
receiving treatment and being monitored closely by physicians, in close coordination
with their state partner and senior medical leadership. The prison has also
implemented strict medical protocols to prevent any further spread. Officials
add, skin conditions such as these are a common occurrence in correctional
facilities of all types and sizes, and our staff are well-prepared and
trained to manage through such situations.
May
15, 2020 kpvi.com
Former
inmate settles with CoreCivic over brain bleed
after prison assault in Shelby
A
former inmate has settled with the company that runs Montana’s private prison
after alleging it failed to treat a head injury quickly enough, resulting in
long-term damage that’s caused a speech delay and epilepsy. Ray Carpenter
sued CoreCivic, which operates Crossroads
Correctional Center in Shelby, in 2018. The case closed on Monday. Because
the settlement was between private parties, the agreement is confidential.
Carpenter had originally named the Montana Department of Corrections and
other public entities as defendants, but they were dropped. Carpenter said
that after being attacked in his cell one night in 2016, the prison and its
contract medical providers, Correctional Medicine Associates, failed to
respond adequately. Carpenter was attacked from behind, hit his head on a
metal bunk while falling and then was kicked for minutes on end, including in
the head, according to his lawsuit. Carpenter said that as medical staff was
cleaning and stitching up his head wound early the next morning, a nurse told
her supervisor she was worried that the deep gouge in the back of Carpenter’s
head might have caused a severe concussion and a brain bleed, and that he
needed to be taken to the hospital. Carpenter says her concerns were ignored.
The prison and its medical provider admitted that five days after Carpenter
was attacked, his medical records show he was taken to Great Falls for
surgery to remove a subdural hematoma, or blood trapped on the brain’s
surface. The surgeon found an active brain bleed during the operation, the
companies admitted. But the companies denied they were at fault for what led
to the emergency craniotomy. They denied that one of their nurses raised red
flags and characterized the wound as a “small laceration.” CoreCivic and Correctional Medical Associates also denied
without explanation Carpenter’s claims that his head swelled
and he fell in and out of consciousness in the days before he was rushed to
Great Falls for surgery. Carpenter said he now suffers from post-concussive
epilepsy, memory loss, speech delays, persistent headaches
and other problems because of the assault "and/or" the delay in
medical care. Both sides declined to comment on the case, citing the
confidential settlement agreement.
Dec
5, 2019 lmtribune.com
Prison employee, two inmates charged in drug scheme
GREAT
FALLS, Mont. — A corrections officer at Crossroads Correctional Center, two
inmates and the wife of one of the inmates are charged with conspiring to
bring drugs into the private prison in Shelby. Three of the four are
scheduled to be arraigned in District Court in Great Falls next week. The
case began in July when a confidential informant told the Department of
Corrections that officer Diana Baker was involved in a relationship with
inmate Joshua Schied, the Great Falls Tribune
reported Tuesday. Court records say an investigation led to an operation in
which the informant sold fake methamphetamine to Baker in Great Falls in
September. Baker, 45, was arrested last month in Cut Bank. No arraignment
date has been set and she does not have an attorney who could speak on her
behalf, a court clerk said. Schied and fellow
inmate Jason Hoomalu are scheduled to appear at
their arraignments via video from the prison. They do not have attorneys yet.
Sep 28, 2018
greatfallstribune.com
Shelby prison inmate hospitalized after suspected assault
What may shape up to be one of the largest prison strikes in modern U.S.
history began Tuesday, with inmates across the country protesting what they
call modern day slavery. An inmate at the Crossroads Correctional Center in
Shelby has been hospitalized after being found unresponsive with injuries
that officials said Thursday are consistent with an assault. The man was
found in his cell Sept. 17, said Amanda Gilchrist, public affairs director
with CoreCivic, the operators of the private prison
that contracts with the state. She said the inmate was transported from the
prison to an outside hospital for treatment. He remains there at this time.
Montana Department of Corrections and Toole County Sheriff's Department were
immediately notified and the incident remains under investigation, Gilchrist
said. The Toole County Sheriff's Office referred questions to the state
investigator. The Montana Department of Corrections declined to comment. In
late July, Gov. Steve Bullock said the state agreed to a two-year extension
of its contract to run the Crossroads, a deal that will add another $34
million to the state treasury. The agreement with CoreCivic
will extend the prison company's contract to run at the same pay rate until
2021, when a new governor is in office. The sides had been at an impasse
after more than a year of negotiations. The deal was part of a contentious
battle in the state Legislature as some lawmakers oppose for-profit,
privately run prisons. Others saw the contract with the prison as a financial
benefit for a cash-strapped state. Crossroads has a capacity of 710 inmates
with 96 of them being held for the U.S.A. Marshals Service.
Sep 18, 2018 nbcmontana.com
DOC director worried about inmate count at private Montana prison
MISSOULA, Mont. - Negotiations are ongoing between the state and CoreCivic, the company that runs the Crossroads
Correctional Center in Shelby. oth sides are hammering out things like contract length
and pay, but the Department of Corrections director has another concern that
NBC Montana found after digging through documents. In an email dated Nov. 21,
director Reg Michael talks about a “disturbing audit issue.” He said the
Crossroads daily prison population count is a “true concern.” He urges the
budget office to take his concerns into consideration as they continue the
negotiations and wants to demand they get the count right. The count is
important because of what Michael calls “security and safety” issues. The
communications director for the DOC said it is not a problem of overcrowding
but did not provide any more details. The prison population count is also
important because Montana pays CoreCivic per
inmate. The most recent contract lists that price at $64.73 per inmate per
day. As for the ongoing negotiation, the
latest counter-proposal from CoreCivic is dated
Nov. 15. CoreCivic agrees to pay the state $32.7
million. The email explains it’s money Montana has already paid for the
facility’s use over the years. The document goes on to say CoreCivic wants to renew the lease for five years to
2024, and the daily rate would be $72.50 per inmate. NBC Montana reached out
to CoreCivic. Their director of public affairs said
they have not seen the content of the email and deferred us to their
government partner at the Montana Department of Corrections for comment.
Sep 14, 2018
greatfallstribune.com
Parolee suing private Montana
prison over brain injury
BILLINGS — A former Montana
prison inmate has filed a lawsuit after a beating he suffered while in
custody resulted in a brain injury. The Billings Gazette reports Ray
Carpenter, who is on parole after serving time at Crossroads Correctional
Center near Shelby, is suing the private prison owned by CoreCivic,
its contract medical providers and the inmate who is charged with attacking
him. He seeks an unspecified amount in damages. A spokesman for CoreCivic declined to comment. Carpenter says he was
attacked by a fellow prisoner in 2016 for five minutes with no intervention
from prison guards. His head wound was cleaned and stitched up after the
attack but he wasn't taken to a clinic until days later. The lawsuit states
that Carpenter now has post-concussive epilepsy, a speech delay, dizziness
and headaches.
Apr 21, 2018 harkoosta.com
Out-of-state prison business tries to hold Montana financially hostage
Community diversion and re-entry programs rehabilitate offenders, save
state tax dollars, and prevent mass incarceration. These programs help drug
and non-violent offenders obtain treatment and get a job, rather than emerge
from prison as hardened criminals. That much is clear. It’s also clear that
American Indians, compared to our non-native peers, are disproportionately
imprisoned in Montana’s correctional system. Indeed, Native people constitute
around 7 percent of Montana’s population but account for 21 percent of the
state’s inmates. As legislators representing the majority of Montana’s Indian
population, we work hard to find a balance in the law that keeps us safe and
holds offenders accountable, while preventing mass incarceration and human
rights abuses. In light of the widely-reported human rights violations
against Indian inmates, we were surprised during the recent special session
to hear some of our Republican colleagues boast about the supposedly great
management of the private prison in Shelby. This prison is operated by CoreCivic, previously known as Corrections Corporation of
America, and is based in Tennessee. We know prison isn’t supposed to be a
fancy vacation, but this corporation has a well-documented history of hiring
inadequate staff, abusing inmates, and not cooperating with law enforcement
during investigations. In 2009, the Department of Corrections and Governor’s
Office visited the Shelby prison seven times and conducted more than 40
interviews to investigate human rights abuses of Native American inmates.
This investigation revealed that prison staff repeatedly antagonized Native
inmates and violated their religious and human rights, including strip
searching Native inmates attending sweat lodge ceremonies for three straight
months. CoreCivic claimed that the searches were
supposed to prevent contraband smuggling, but no contraband was ever found.
In FY 2009, CoreCivic failed to address 206 of 220
formal inmate complaints. But despite all of this, many of our Republicans
colleagues continue to support the prison pipeline and praise CoreCivic’s management of the Shelby prison. Now, CoreCivic is holding $30 million of Montana taxpayer
money hostage and will only return it to Montanans if its contract for the Shelby
prison is renewed. Worst of all, Republicans are prioritizing the needs of
this corporation over the best interests of Montanans. During the special
session, they passed bills that put our state in an impossible position:
either renew the prison contract or face even deeper cuts to critical health
services that have already been implemented. For our Montana communities, the
false choice between a prison debilitating our people and further cuts to
already underfunded programs is despicable. Subsequently, the Governor’s
decision to walk away from negotiations with CoreCivic
last week is a necessary one. The prison’s final offer included an almost 15
percent increase in the daily rate for our state, costing Montana more money
while our other community providers of mental health and disability services
were cut. The idea that we would raise rates for private prisons while being
forced to cut rates for providers who deliver services to vulnerable
Montanans borders on ludicrous. We need real, long-term solutions to our
state’s budget woes. We refuse to be held hostage by private prison companies
who abuse prisoners and send our tax dollars to out-of-state corporate
shareholders. Montana’s taxpayers can no longer afford mass incarceration. We
can do better than CoreCivic. During the next
Legislative Session, we will again stand up for investing Montana’s resources
into diversion programs here in Montana, as well as assisting Montana
sheriffs and counties in addressing their unmet needs, rather than sending
those valuable resources to Tennessee.
Apr
5, 2018 kxlh.com
Bullock admin rejects private-prison contract offer; says too high
HELENA - Gov. Steve Bullock said Wednesday his administration rejected an
offer this week from CoreCivic to extend its
contract to manage Montana’s only private prison, because the company asked
for what he considers a 15 percent increase in payments. “The idea that we’re
cutting rates for human services (across the state), and then to end up
increasing by about 15 percent the rate that this private prison makes?” he
told MTN News in an interview. “It doesn’t make sense for Montanans.” Yet CoreCivic officials said late Wednesday that the net
increase under the offer would be only about 4 percent -- and that the
company also had agreed to increase correctional officer wages by 11.5
percent, provide more treatment for inmates and give the state a one-time
payment of $35.7 million. "The Montana officials rejected CoreCivic's offer and ended negotiations," said
Steven Owen, managing director of communications for the company. "We at
CoreCivic always believe there is a way to find
common ground, and after negotiations ended, we expressed our continued
commitment to work with Montana policymakers to find a path
forward." CoreCivic’s
contract to manage the 700-bed Crossroads Correctional Center in Shelby
expires next year. Late last year, Republicans lawmakers who support the
private prison attempted to force the Bullock administration to renegotiate
the contract, by creating a budget incentive. They passed a state law that
says if the contract is extended, the Bullock administration could access to
up to $30 million or more, to offset state budget cuts – the money CoreCivic apparently offered in the negotiations this
week. Bullock, however, said Wednesday that the price asked by CoreCivic is too steep, that, in reality, only $15
million of the money would help offset budget cuts elsewhere in human
services, and that widespread budget cuts would occur this year anyways.
“Where it leaves us is, we sure as hell shouldn’t be entering into a contract
that increases 15 percent for the private-prison providers at the same time
that we’re cutting services all across the state,” he said. While Bullock
said CoreCivic asked for “essentially” a 15 percent
increase, the amount over what it’s being paid now would appear to increase
only about 4 percent next year. The state currently pays CoreCivic
about $72 per prisoner, per day, to run the prison. That includes a $9.14 per
prisoner “use fee” that goes into an account that the state can use next year
if it chooses to buy the prison from CoreCivic. The
account apparently has reached more nearly $36 million -- the amount that CoreCivic says it would give to the state if the state
agrees to the new contract. CoreCivic’s offer, as
described by Bullock, would increase the per-prisoner payment to $75.48 next
year – but the amount no longer would include the use fee, which would be
canceled. Bullock said CoreCivic is asking to
increase the daily prisoner fee from about $63 to the $75.48 amount next year
– but, the state would no longer be paying the $9 use fee. Therefore, the net
increase of state payments to CoreCivic would
increase from about $72 per prisoner to $75.48, through 2021. Bullock said he
sees the deal as CoreCivic asking for a 15 percent
increase to “free up the money that Montanans actually already own.” Owen
said the offer made this week by the company would increase officer wages at
the prison, expand sex-offender and vocational-education programs for inmates,
and make the one-time payment -- if the state increased the current total
payments by 4.2 percent. Bullock said his budget director, Dan Villa, and
state corrections director, Reg Michael, traveled to CoreCivic
headquarters in Nashville, Tennessee, earlier this week and negotiated for
two days before leaving without an agreement. “We’ll have to see,” he said,
when asked when talks might resume. “We worked hard and moved a lot, from our
perspective.”
Feb 9, 2018 ktvh.com
Bullock: MT shouldn’t rush into private-prison contract extension
HELENA – Gov. Steve Bullock says he won’t rush into a new contract with
the operator of the private prison in Shelby – even though it could yield the
state as much as $30 million to offset planned budget cuts of “essential
services” for the poor and disabled. In an interview this week, Bullock told
MTN News that in the wake of 2017 reforms designed to reduce the amount of
people in prison in Montana, his administration wants to carefully evaluate
how long and whether the Crossroads Correctional Center is needed. But a key
lawmaker who supports the private prison southwest of Shelby said Thursday
that Bullock’s excuses for not yet extending the contract “is just a way to
walk through time and do nothing.” “I think it’s an absolutely ludicrous idea
that we’re suddenly going to run out of a supply of prisoners, because of
some minor changes made to the criminal-justice system in the last
legislative session,” said Rep. Rob Cook, R-Conrad. “The only opportunity the
governor has to use this money is right now, to relieve some of the pressures
on core, rural services that he was so kind to chop first,” he added. The
prison is in Cook’s House district. CoreCivic, the
Tennessee-based company that owns the prison, is nearing the end of a 20-year
contract to operate the facility, in June 2019. During the contract, the
state has been paying CoreCivic a small,
per-prisoner “use fee” that can be used by the state to buy the prison at
fair-market value. Late last year, Cook and others supporters of the prison
said if Bullock agreed to a long-term extension of CoreCivic’s
contract beyond 2019, the company would return the accumulated use fees to
the state – about $32 million — to help with the state’s budget shortfall.
Bullock essentially rejected that offer. But during a November special
session, the Republican majority at the Legislature passed a bill designed to
force the governor’s hand. It included that money in a budget-balancing
package, but only if Bullock extends the contract. The bill says if the
contract with CoreCivic is renegotiated and the
use-fee money returned to the state, the first $15 million will go into the
state’s firefighting fund and anything over that amount would fund “essential
services” for low-income children, the disabled and the elderly.
Dec 1, 2016 billingsgazette.com
Corrections pledges to increase oversight of private
prison in Shelby
HELENA — The Montana Department of Corrections has
pledged to strengthen its oversight of a private prison in Shelby after auditors
recently found weaknesses in the agency's monitoring of guard staffing
levels, health care and food services. Department officials said checks have
already been increased to ensure mandatory security staffing levels are being
met, and they will build more comprehensive checks in the other areas. The
Legislative Audit Division did not find any major violations at the
Crossroads Correctional Center when auditors conducted surprise visits,
analyzed prison data and spoke to former inmates. However, the auditors did
report that the department's on-site contractor assigned to monitor the
prison's health services does not verify that inmates receive timely access
to medical care. The department also has not defined the level of review it
expects from the contractor and conducts only limited reviews of health
services data from the prison, the November report found. The report also
recommended the department strengthen its procedures for monitoring inmate
food services, such as reviewing the nutritional content of food served. The
auditors found limitations in oversight that could lead to the department not
knowing whether mandatory staffing levels are being met. But DOC director
Mike Batista said in his written response that the department has already set
up reviews of shift rosters, payroll logs, video reviews of staff and other
checks as a result of past violations discovered in audits. Batista pledged
to increase the review of shift rosters each month. The department also
"will build a more comprehensive reporting and compliance check for
medical access and timeliness requirements" for its health care
monitoring contractor, Batista said. He added that the department's dietician
will review the prison's menu annually. DOC spokeswoman Judy Beck said Wednesday
she did not have further comment beyond Batista's response to the audit. The
Shelby prison houses about 600 state inmates and is owned by Corrections
Corporation of America. The company has a 20-year contract with the state
that is up in 2019, and lawmakers last year began studying whether to extend
the contract for another five or 10 years.
Sep
24, 2015 missoulian.com
Montana:
State to buy CCA prison?
HELENA
(AP) — Montana lawmakers will explore whether to purchase the privately run
Crossroads Correctional Center when the state's 20-year contract with
Corrections Corporation of America is up in 2019. The Legislative Finance
Committee is taking up the issue at its Thursday meeting. Montana has the
option to either purchase the Shelby prison or renew the contract for another
five years. The finance committee plans to analyze the costs and treatment
abilities of private prisons compared to state-run prisons, with a study
expected to be completed by March. The prison houses about 550 state inmates.
Former staff and prisoners, relatives and advocacy groups have complained for
years the prison is understaffed and the inmates are mistreated. A 2011 audit
found the prison was largely in compliance with its state contract, but the
complaints have continued.
Jun
10, 2015 tribtown.com
Dead inmate's wife accuses Shelby prison staff of refusing medical
treatment to sick husband
bug
HELENA,
Montana — The wife of a Montana man who died in custody says a Shelby
prison's staff refused him medical treatment because he was a temporary
inmate awaiting a transfer to a federal medical facility. Sherry Flor is
suing Crossroads Correctional Facility owner Corrections Corporation of
America. She is accusing prison staff of negligence that led to 68-year-old
Richard Flor's death in 2012. The Flors and their
son pleaded guilty to drug charges related to a medical marijuana operation
run out of their Miles City home. Richard Flor spent about four months in the
Shelby prison and died in a Las Vegas jail during a layover in his transfer.
Attorney Brad Arndorfer says Flor
had cancer that was undiagnosed and untreated. CCA spokesman Steve Owen says
Crossroads officials are committed to their inmates' health and safety.
Mar
24, 2015 mtpr.org
Complaints Bring Legislative Scrutiny For Shelby Private Prison Montana
legislators heard a resolution today to study complaints about the state’s
one privately operated prison in Shelby. The study could potentially lead to it’s closure. Former Senator
Terry Murphy was part of a group that previously studied all Montana
correctional systems, and he says major complaints at the Shelby prison
concern food quality, severe under-staffing and medical attention for
inmates. “A doctor who had been on staff there for a time who just said …
there’s no point in having a doctor there
because the administration won’t allow the doctor to do the doctor’s job
anyway.” The only opponent was the lawyer for Corrections Corporation of
America, which is a private company the state contracted to run the prison.
The lawyer, Mark Baker, says the study should look at more than just the
Shelby prison to get a clearer picture. “Without a holistic approach to these
issues, the information obtained from the study will not be nearly as
valuable as it could be.” Corrections Corporation of America is a national
company operating 61 facilities in the U.S. Recently, one such facility was
closed in Idaho because of similar complaints and evidence of criminal levels
of under-staffing, with some officers working 48 hours straight. Shelby’s
prison warden David Berkebile came to the hearing,
but did not testify as an opponent. When lawmakers asked, however, he said
his facility has enough government oversight including frequent audits and
that it runs smoothly. “Been with Crossroads Correctional Center only for a
short time, six months, but as I walk through the institution I can see that
it is a safe, clean, orderly, well-run facility.” Democratic Senator Robyn
Driscoll is carrying the resolution and says Corrections Corporation’s
contract is up in 2019, leaving three options if the allegations are true:
the state could fund a major overhaul of the facility, take over running the
facility, or simply close it altogether. If the study does happen, Terry
Murphy has some advice for those looking into the prison. “Don’t just
concentrate on what you see during the time you’re doing the study, but look
at the last four, five years.” Lawmakers are expected to vote on the
resolution Wednesday.
Jun
28, 2014 missoulian.com
HELENA
– A legislative panel Friday undid an earlier decision to ask the FBI to
investigate the privately operated prison at Shelby, but still voted to
support a study and full-scale audit of the prison that holds 550 state
inmates. Members of the Law and Justice Interim Committee voted unanimously
to support a “performance audit” by the Legislative Audit Division, to take
an in-depth look at how the Crossroads Correctional Center operates and is
complying with its state contract. They also voted to draft a bill ordering a
legislative study of whether the state should continue with the private
prison when its contract comes up for renewal in 2019. Sen. Larry Jent,
D-Bozeman, said he doesn’t think privately run, for-profit prisons are a good
idea, and that the Legislature should examine whether to continue with them.
Any final decision on the study must be made by the 2015 Legislature and the
audit must be approved by a separate legislative panel. Friday’s votes came
two months after the committee voted to draft a letter to the FBI, asking it
to investigate the prison near Shelby. Sen. Terry Murphy, R-Cardwell, said
then the FBI should examine whether Crossroads may have the same problems
encountered at an Idaho prison run by the same company, Corrections Corp. of
America. The FBI began investigating the Idaho prison this year after reports
of severe understaffing and excessive violence at the facility. CCA, based in
Nashville, Tenn., built and operates Crossroads, which opened southwest of
Shelby in 1999. The state pays the company more than $12 million a year to
operate the Shelby prison. The panel voted earlier Friday to defer a decision
on asking the FBI to investigate, but late in the day decided to forget about
the letter and instead pursue the state-based audit and study of the prison.
At Friday’s committee meeting in Helena, several people told the panel that
it should investigate the Shelby prison, alleging it is poorly run and
mistreats inmates. Patricia Swan-Smith, who worked for a year as a counselor
at the facility, said inmates with mental illness were not given proper
treatment or medication, and that inmates are mistreated by staff. “None of
the supervisors addressed valid complaints brought to them,” she said. “They
dismissed serious matters with minimal efforts to determine if the complaints
were valid.” Lita Pepion, whose son is an inmate at Shelby, said he’s been on
the waiting list for two years for certain programs, and “doesn’t get
adequate explanations of anything.” CCA and local officials said the prison
at Shelby is monitored closely by the state, meets contract requirements and
is accredited by the American Correctional Association. Lane Blair, managing director
of operations for CCA, said if an employee at the prison sees a problem and
isn’t getting a response from the local prison manager, the company allows
them to make an anonymous complaint to headquarters. “We investigate those
things and look into them,” he told the committee Friday. “I just stand here
to tell you that we’re proud of our operation, and we’re willing to answer
questions.”
May
21, 2014 greatfallstribune.com
A
state panel has asked a letter be drafted to the FBI asking the agency to investigate
Montana’s privately run prison in Shelby, with one committee member saying a
facility in Idaho run by the same company is undergoing such a probe.
However, a recent state audit of the Crossroads Correctional Center in Shelby
found the prison to have a near-perfect compliance rating. And an official
from the Corrections Corporation of America, which runs the prison, said what
is going on in Idaho is an isolated manner and no similar allegations have
been made regarding Shelby. Sen. Terry Murphy, R-Cardwell, requested at an
April 28 meeting of the state Legislature’s Law and Justice Interim Committee
that the FBI be asked to look at the Shelby prison, saying the Idaho
situation is similar to Montana. “They are exactly the same problems I’ve
heard about here for the past three years,” he said. Murphy said the facility
is “vastly understaffed, even though we are paying for a full staff as called
for in the contract.” He accused the prison of “cutting corners on expenses
with substandard food” and said the facility does not provide the medical and
dental services that its contract with the state calls for. A draft of the
letter will be brought back to the committee during its August meeting for
discussion. Judy Beck, spokeswoman for the Montana Department of Corrections,
which oversees the prisons, said she was aware of the committee’s request.
She said the state audited Crossroads in November and renewed its contract
with the CCA, which runs the Shelby facility, in December. According to the
state’s website, Crossroads houses 564 inmates. In 2013, the state paid CCA
$12.9 million to run the Shelby prison, she said. Apparently, it brings some
savings as according to the 2013 DOC biennial report, it cost about $98 a day
for an inmate at the Montana State Prison in Deer Lodge as opposed to about
$77 per day in Shelby. The Nov. 4-6 audit, according to a Nov. 13 letter from
the DOC, found Crossroads to be compliant with 73 of 74 areas and to have a
98.65 percent compliance rating. The letter did note Crossroads was notified
of all items to be reviewed two weeks prior of the team being on site. A
spokesman for CCA told the Tribune he was puzzled about the panel’s request.
“I am sort of at a loss as to why,” said Steve Owen, senior director of
public affairs for CCA. “To our knowledge, our government partners are
satisfied.” “Our government partners hold us to high standards,” he said.
Owen added that Crossroads was a “good corporate citizen” that performs many
community outreach programs. He said what happened in Idaho is “isolated and
has no correlation to the facility in Montana.” Owen said some CCA employees
in Idaho decided to “misinform” on some reports. Once the company learned of
the problem it began an investigation. That information was shared with state
officials who in turn asked the FBI to investigate, thinking the agency was
better equipped to handle rather than the state police. “We have fully
cooperated with investigators and will continue to do so until it’s
concluded,” he said. According to the AP, in 2013, CCA officials admitted
they had “understaffed the prison by thousands of hours in violation of the
state contract. CCA also said employees falsified reports to cover up the
vacancies.” An investigation by AP showed CCA sometimes listed guards as working
48 hours straight to meet minimum staffing requirements. In 2010, the ACLU
sued on behalf of inmates, saying the facility was so violent that inmates
called it “Gladiator School.” The ACLU claimed that understaffing contributed
to the high incidents of violence at the prison. According to the AP story,
CCA’s contract with Idaho was worth about $29 million a year. In February,
the company agreed to pay Idaho $1 million to settle the understaffing
claims. Murphy, the Montana state senator, said he wondered if there were
similar problems here. At the April 28 meeting, he said the Law and Justice
Interim Committee has asked for an investigation before and had made attempts
to get the Legislative Audit Committee to look at the facility. “It really
didn’t turn out to be an investigation, and some of us were pretty
disappointed in how they dealt with it,” he said. In a telephone interview
Saturday, Murphy said he had met recently with Crossroads officials. He said
he hoped an audit would ease his concerns. “If everything is fine, there is
nobody who’d be happier about it than me, but I’d just like to know” he said.
Owen said it is not unusual for privately run prisons to be criticized. “In
the best of circumstances, inmates are not happy about their confinement,” he
said. “It’s an inherent part of corrections.” From the audit According to the
Nov. 13 letter, the prison was asked, among other things, to:
•
Hire someone to be solely responsible for grievance response and
investigation;
•
Give inmates easier and more confidential access to paper grievance requests;
•
Consider a duress button in the dental area to provide another means of
emergency communication if needed;
•
Remain aware of vacancies as two officer vacancies extended beyond the 90-day
time frame. The letter states the items will not directly impact facility
licensure and inspectors said they were aware of new employees starting Nov.
4.
The
issue of staffing has come up before. In June 2012, Crossroads Warden Martin
Frink told lawmakers that the starting wage for correctional officers at
Shelby was $12.05 an hour. At that time, officers at Montana State Prison
received $12.57 an hour. Frink was told by lawmakers that the prison should
offer a higher starting wage.
August 30, 2012 Great Falls Tribune
Richard Flor, a former Miles City medical marijuana caregiver sentenced in
April to five years in federal prison on charges that he illegally maintained
drug-related premises, died in federal custody Wednesday. Flor, who suffered
from a lengthy list of serious medical conditions, died in a Las Vegas
hospital a day after suffering two heart attacks while awaiting transport to
a federal medical facility, according to his attorney, Brad Arndorfer of Billings. At Flor’s sentencing last April,
U.S. District Judge Charles Lovell recommended that he “be designated for
incarceration at a federal medical center” where Flor’s “numerous physical
and mental diseases and conditions can be evaluated and treated.” Arndorfer said that never happened, and instead Flor was
for months housed at the Crossroads Correctional Facility in Shelby until a
week ago, when U.S. marshals began the process of transporting him to an
unknown medical facility. Arndorfer said Flor was in Las Vegas as a layover, but he did not know
where his client was being taken. “It’s incredible to me to take a man with
dementia, failing kidneys, severe diabetes and unable to care for himself and
incarcerate him,” Arndorfer said Thursday. “He
required nursing home care, and as far as I can tell he didn’t receive any
care while he was incarcerated in Shelby. It doesn’t make any sense to me.”
Crossroads spokesman Steven Owen, citing privacy concerns, declined to
comment on the specifics of Flor’s medical conditions or any treatment he
received while at the prison. “Our dedicated, professional corrections and
medical staff at Crossroads are firmly committed to the health and safety of
the inmates entrusted to our care; we meet or exceed the rigorous and
comprehensive standards of our government partners, the U.S. Marshals Service
and the Montana Department of Corrections, as well as those of the
independent American Correctional Association,” Owen said in a written
statement. Flor, along with his wife, Sherry, and their son, Justin, ran a
medical marijuana caregiver business out of their home and from a Billings
dispensary. Richard Flor was also a co-owner of Montana Cannabis, one of the
state’s largest medical marijuana operations and a target in the March 2011
raids by federal agents on marijuana providers across Montana. At the time of
the raids, Montana law allowed for the production of medical marijuana for
use by patients with approved medical conditions. The state’s medical
marijuana industry was booming after a top U.S. Justice Department official
released a memo in 2009 indicating that the Obama administration would not
prosecute people who were in “clear and unambiguous compliance” with state
medical marijuana laws. However, federal law still considers marijuana a
dangerous narcotic in the same class as heroin or methamphetamine. Last
month, Arndorfer filed a motion requesting the
court release Flor pending an appeal of his sentence due to health concerns. Arndorfer’s brief supporting the motion detailed how Flor
suffered from severe osteoporosis and on multiple occasions while in custody,
Flor had fallen out of bed breaking his ribs, his clavicle and his cervical
bones as well as injuring vertebrae in his spine. Flor also suffered from
dementia, diabetes and kidney failure among other ailments, Arndorfer said. “He is in extreme pain and still is not
being given round-the-clock care as is required for someone with his medical
and mental conditions,” Arndorfer wrote in his
brief to the court. “It is anticipated he will not long survive general
population incarceration.” In his Aug. 7 order denying the motion, Lovell
wrote that it was unfortunate the Flor had not yet been transferred to an
appropriate medical facility but that the concerns detailed in the motion
were “not factually or legally significant.” Lovell wrote that the federal
Bureau of Prisons could provide the necessary medical care and that recent
tests found kidney dialysis wasn’t needed, despite the fact that a year
earlier a VA health care provider discussed with Flor the possibility that he
might need dialysis in the future. Lovell wrote that “defendant has no such
present need.” In a statement released by his staff, Lovell said he was sorry
to learn of Flor’s death but that judicial ethics prevented him from
commenting further. Kristin Flor, 36, confirmed her 68-year-old father’s
death early Thursday. Kristin Flor said she was at her father’s bedside when
the decision was made to remove him from life support after he suffered a
serious heart attack, renal failure and kidney failure. Kristin Flor said her
father had complained to her regularly that his kidneys and back were hurting
him and that he wasn’t receiving proper medical treatment while incarcerated
in Shelby. “They didn’t give him any of the medical attention he needed, and
they never took him once to a medical doctor,” Kristin Flor said. “When he
broke his clavicle and shoulder blade it took him two days to get doctors to
look at it.” Arndorfer said he’s “more than
interested” in the possibility of filing a lawsuit against the U.S. Marshals
Service and the Bureau of Prisons for the alleged mistreatment of Flor. “He
had been complaining to his family and to me about kidney pain. They knew
that his VA doctors were considering putting him on dialysis prior to him
being placed in Shelby and they did nothing. They ran a blood test and said
he was fine,” Arndorfer said. “I don’t believe he
was giving any medical care at all at Shelby.” U.S. Marshals Service
spokesman Rod Ostermiller said Flor
was not in the custody of the U.S. Marshals Service at the time of his death
and directed calls to the agency’s Washington, D.C., headquarters. A call was
not returned as of press time. Arndorfer said his
former client believed he was following all state laws governing the
production of marijuana at the time federal agents raided his home and
business. “These are good people who were doing what they believed were good
works,” Arndorfer said. “ The
political system is out of control with the states saying it’s legal and the
federal government is deciding who they want to prosecute, when or if with no
rhyme or reason.” Kristin Flor said he father suffered what amounted to cruel
and unusual punishment at the hands of the federal justice system. “It’s a
disgrace for a government and a country to treat a man like this,” Flor said.
“He never hurt anybody. Even the crimes they claim he committed, they still
are not to me great enough to justify all the pain and suffering he went
through.”
July 2, 2012 Montana Watchdog
The warden of a private prison in Shelby told a state panel that aggressive
action was being taken to hire new correctional officers for the facility,
but one lawmaker noted prison officials might find the task easier if the
salaries were higher. Martin Frink, warden of the Crossroads Correctional
Facility, told the Law and Justice Interim Committee at its June 22 meeting
that 36 new correctional officers have been hired since January and he still
had 21 vacancies. However, he said he would hire six new officers in July who
had participated in academies. Frink told lawmakers that he was to have 97
correctional officers and that any shortages were being covered through
overtime. According to its website, there are about 654 beds at the prison
that is operated by the Corrections Corporation of America. It’s the only private
prison in the state. He said the starting wage was $12.05 an hour. It’s
similar to what officers at Montana State Prison receive when they start. Bob
Anez, spokesman for the state Department of
Corrections, said that starting salary is $12.57. Frink said recruiters have
attended 14 job fairs since Jan. 1 and posted ads on five websites, including
Craigslist. Sen. Greg Hinkle, R-Thompson Falls, asked if any job fairs were
planned north of Missoula. Frink said there was one in the Libby and
Kalispell area. “Could I suggest you go to Thompson Falls, our unemployment
is high,” Hinkle said. It was then that Hinkle and the other members of the
panel learned of the pay. “If you want more people to work, update your
wage,” he said.
March 4, 2012 Independent Record
Five Montana Department of Corrections inmates who claimed substantial
burdens were placed upon them while trying to participate in religious sweat
lodge ceremonies can continue with part of their lawsuit, but a federal court
judge in Helena dismissed other aspects of the case this week. U.S. District
Court Senior Judge Charles Lovell said the Native American plaintiffs — John
Knows His Gun, Darryl Lewis Frost, Jason Chiefstick,
William Gopher and Allen Potter — have sufficient facts to pursue claims regarding
strip searches, the prohibition of essential sacred items and an alleged
retaliatory act. However, they failed to show how the prison substantially
burdened their religious exercise, so they can’t seek monetary damages from
the state and a private corrections company under the Religious Land Use and
Institutionalized Persons Act of 2000 (RLUIPA). The ruling came after
attorneys for the Montana Department of Corrections and Crossroads
Correctional Center in Shelby asked Lovell to dismiss the case. After
listening to the parties at a motions hearing on Feb. 23, Lovell handed down
his ruling late last week. “Plaintiffs have alleged sufficient facts to
pursue their claims regarding the strip searches, the alleged prohibition of
essential sacred items, and one alleged retaliatory act,” Lovell wrote.
“Otherwise, the court agrees with defendants that the complaint fails to
state a prima facie claim the prison’s acts or omissions substantially
burdened plaintiffs’ religious exercise.” In 2008 and 2009, the five men were
incarcerated at the Crossroads Correctional Center, which is a private prison
facility operated by Corrections Corporation of America. Crossroads is
licensed by the Montana Department of Corrections. The men claim that in
2008, before and after sweat lodge ceremonies the participants were subjected
to “en masse” strip searches. On some occasions,
the strip searches were done in a gymnasium with video cameras that at least
one female guard monitored. “Plaintiffs claim the experience was ‘extremely
degrading and dehumanizing’ and caused the number of inmates attending sweat
lodge ceremonies to decline,” Lovell wrote. “Thus, plaintiffs have adequately
alleged that the strip searches forced them to choose between abandoning
their religious exercise or being subjected to an ‘extremely degrading and
dehumanizing’ experience.”
September 13, 2011 Montana Watchdog
Three state lawmakers said they will request a legislative audit of a
contract between the Department of Corrections (DOC) and the company that
operates the private prison in Shelby following allegations which included
inmates being held beyond their parole and a claim prisoners are given two
rolls of toilet paper a week and told by guards to use their hands if they
run out. The three, members of the Law and Justice Interim Committee, said
they would request the audit after hearing the claims made Friday regarding
the DOC and the Corrections Corporation of America (CCA) by Helena
businessman Rudy Stock, who said he has visited his son at the Crossroads
Correctional Center nearly 80 times since Feb. 1. Committee members asked for
the DOC and CCA to be invited to its next meeting to discuss the claims. DOC
spokesman Bob Anez said he was working on responses
to be presented to the 12-member panel at its December meeting. He said the
state contracts with CCA on a per-inmate basis, with the current daily rate
of $53.84 per inmate, which includes $9.17 for debt service. CCA officials
did not return calls for comment. Legislative Auditor Tori Hunthausen was not available for comment. Stock’s claims
also included allegations the state could be “shorted” more than $3 million
per year from a lack of corrections staff, placing inmates in a converted
gymnasium that did not meet American Correctional Association (ACA)
standards, and he said he saw boxes in the prison dining area marked “Not for
Human Consumption.” He also said there were no on-site “psychiatric” services
and that service was provided by video from Florida. Stock said no vocational
programs were offered as required, no contract attorney to assist inmates
with filing complaints and that DOC and CCA officials “ignored” the American
with Disabilities Act by denying prisoners with vision problems to purchase
larger TV sets. Stock told the panel that toilet paper was passed out twice a
week. “You are allowed one roll of toilet paper per inmate for maximum of two
rolls per cell,” he said, adding the paper, which is small and one ply, could
be purchased at the commissary. If the inmate uses his supply of toilet paper
by the end of the week, he is told by the guards to use his hands, Stock
said. Sen. Greg Hinkle, R-Columbia Falls, said if true, he considered the
toilet paper issue to be a human rights violation. “People are people and
need to be treated in a dignified manner,” said Hinkle, who said he has led
Bible studies in a county jail for 17 years. “I don’t care what they have
done.” Another person speaking to the panel, Havre resident Ruben McKinney,
said inmates who have been paroled are still being held at the facility and
added there were examples of nepotism among staff. Hinkle, Sen. Terry Murphy,
R-Cardwell and Rep. Margaret McDonald, D-Billings, said they would ask the
Legislative Audit Division to look at the contract between the CCA and DOC.
“I think he (Stock) made some important points that need to be clarified,”
Murphy told Montana Watchdog after the meeting. “With so many potential
problems alleged, the best way to get to the facts is with an audit.”
July 5, 2011 Independent Record
Mike Mahoney, Montana State Prison’s warden since 1995, is retiring from the
state next month and taking a job as assistant warden at a private prison in
Shelby. “I still feel a calling to the corrections field and working in an
institutional environment,” said Mahoney, who’s retiring after 31 years with
the state, including 28 years in corrections. “I have the time in for
retirement with the state of Montana, and an opportunity for me to have a
second career.” Mahoney, 57, announced his retirement Tuesday. He’ll leave
the state job Aug. 12 and start a month later as assistant warden at
Crossroads Correctional Center in Shelby, the state’s only operating private
prison. Crossroads, opened in 1999, has 664 beds and houses state and federal
prisoners. It’s owned by Corrections Corp. of America of Nashville, Tenn.
February 19, 2010 AP
The Montana Human Rights Commission has rejected a discrimination
complaint filed by American Indians who were subjected to group strip
searches at a privately run prison in Shelby. Guards at the Crossroads
Correctional Center in 2008 made the inmates strip before and after their
traditional sweat lodge ceremonies. Prison officials said they suspected the
ceremonies were being used to move contraband, although none was ever found.
The prison denied the inmates were discriminated against, and the state
Department of Corrections later agreed, with an investigation concluding the
guards acted appropriately. The prison is run by Nashville, Tenn.-based
Corrections Corp. of America. "It was our feeling that (strip searches)
were used appropriately," Department of Corrections spokesman Bob Anez said Friday. "We continue to work with
Crossroads officials to ensure the ongoing fair and appropriate management of
all offenders." Helena attorney Ron Waterman said he represents roughly
30 Indian who were strip searched. Following the commission's 3-2 ruling
Thursday, he said his clients were considering taking their case to state or
federal court. "This was a series of strip searches conducted as people
were going to exercise religious practices," Waterman said.
"Fundamentally, we believe there was discrimination." Suspicions
that the inmates were moving contraband were nothing more than a pretext to
discriminate against the inmates, he said. The state investigation into the
treatment of Indians at Crossroads followed an ongoing human rights complaint
from The American Civil Liberties Union. In addition to confirming the strip
searches, a May report that resulted from that investigation highlighted poor
conditions at the sweat-lodge grounds, inappropriate comments from guards
about the Indian ceremonies and a lack of attention to inmate grievances.
October 27, 2009 AP
The Montana Human Rights Bureau has dismissed a complaint that alleged the
private Crossroads Correctional Center in Shelby was discriminating against
Native Americans. Human Rights Bureau Chief Katherine Kountz
said there was no reason to believe discrimination took place, according to a
report released Tuesday by the agency. The case stems from an earlier finding
that Native American inmates were subjected to strip searches after
sweat-lodge ceremonies. Prison officials said the searches were a reaction to
concerns over contraband. The inmates complained of inadequate facilities for
their sweat lodge ceremonies, denial of items such as antlers to perform
their religious ceremonies, the strip searches, and allegations of being
mistreated for making the complaints. The American Civil Liberties Union,
which filed the complaint on behalf of the inmates, said it believes that the
Human Rights Bureau research affirmed their case. The ACLU said it plans to
appeal Kountz's decision to the full Montana Human
Rights Commission. "This is just the initial stage of the proceeding,
and it was just one investigator's report," said ACLU Montana Legal
Director Betsy Griffing. "We want to give the
commission the opportunity to evaluate both sides of the issue."
May 22, 2009 Great Falls Tribune
The last of three people charged in the beating death of a Shelby man was
sentenced Thursday to four years in pre-release in addition to 16 years of
supervised probation. Toole County Attorney Merle Raph
asked for a lenient sentence for Aaron Lee Evans, 38, because Evans helped
officers find evidence and was willing to testify against the other
defendants. Court documents state that on Dec. 30, 2007, Clyde Cosner and Evan's brother, Alden Tracy Evans, repeatedly
hit, kicked, stomped and struck James Lee Jardine, 45, with his truck door
while trying to evict him at the request of the Evans' sister-in-law. Aaron
Evans, who pleaded guilty to accountability to assault with a weapon, drove
to and from the crime scene and helped load Jardine's body into a pickup
truck, which was left in a coulee by the dump about a mile east of Shelby. Raph said the investigation indicated that Tracy Evans,
44, was the primary aggressor and was responsible for planning how to get rid
of the vehicle and the body. He committed suicide before authorities could
arrest him. District Judge Dirk Sandefur agreed to
buck typical protocol, which would send Aaron Evans to the state prison in
Deer Lodge to be processed before heading to the Billings prerelease center,
where he already was accepted. Raph and Aaron
Evans' attorney Robert Olson feared for the defendant's safety if he was
placed in prison because he once worked as a guard at the private prison in
Shelby, and because he cooperated with investigators.
May 21, 2009 AP
A new report says that Native American inmates were subjected to group
strip searches before and after sweat-lodge ceremonies at the private
Crossroads Correctional Center in Shelby; but the Department of Corrections
said the findings do not indicate a problem of discrimination. The lengthy
report stems from complaints of discrimination at the prison that have
culminated in an ongoing human rights complaint from The American Civil
Liberties Union. The Department of Corrections and the governor's office
released their own detailed report Wednesday. They said the agency first
heard of the complaints of mistreatment against Native American inmates last
August and that the ACLU of Montana got involved shortly later. Corrections
spokesman Bob Anez said the agency believes the
report found some individual issues that could be resolved, but does not find
a "systematic pattern of racial or religious discrimination" as
charged in original complaints. He said it appeared some of the issues
resulted in a breakdown in communication down the command chain. The ACLU had
a different take, saying the investigative report clearly shows inmates were
mistreated. "Their report confirms there are serious problems at
Crossroads Correctional Center," said ACLU Montana Legal Director Betsy Griffing.
April 22, 2009 AP
A spokesman for the Montana Corrections Department says they're
investigating allegations that Native American inmates were mistreated and
discriminated against at the Crossroads Correctional Center in Shelby. The
private prison operates under a contract with the state. The American Civil
Liberties Union said Wednesday that Crossroads violated the rights of Native
American inmates. The ACLU of Montana filed a complaint with the state Human
Rights Bureau alleging the inmates were subjected to en-masse
strip searches, were denied the ability to properly celebrate sweat-lodge
ceremonies and were retaliated against when they complained about the
mistreatment. The complaint says the strip searches took place between
mid-August and mid-October 2008. "While the en
masse strip searches appear to have been suspended ... there is no assurance
that they will not resume, and reports indicate that the searches could
readily continue," the complaint says. Bob Anez,
spokesman for the state Corrections Department, said the department "is
aware of these allegations against Corrections Corporation of America and
took appropriate action with CCA to resolve these claims, as indicated in the
complaint." "As with all such allegations, the Department of
Corrections takes these accusations seriously," Anez
said in an e-mail to The Associated Press. "The department is
investigating the allegations and will respond to the ACLU complaint."
Crossroads spokeswoman Christine Timmerman referred questions about the
complaint to Anez.
February 15, 2006 KXLF
A private inmate transport van hit black ice and crashed on Homestake
Pass near Butte last night. No serious injuries were reported, but the eight
prisoners were taken to St. James Healthcare for examination. Montana State
Prison Warden Mike Mahoney said the inmates were not in the custody of the state
Corrections Department. The inmates were being transported by TransCor America. Mahoney said the van was headed to Deer
Lodge, where the inmates were to spend the night -- some at the Powell County
jail and some at the state prison intake unit. Mahoney believes the inmates
were being taken to Washington or Oregon.
January 20, 2006 AP and Great
Falls Tribune
Putting the Department of Corrections in charge of transporting almost all
prisoners in the state drew mixed reaction from lawmakers Thursday. DOC Director
Bill Slaughter and other officials have been weighing the idea for some time,
but raised it again following last week's escape of accused murderer Dueston Haggard near Helena. Currently, DOC transports
about 47 percent of prison inmates, with the U.S. Marshals Service, local law
enforcement and private contractors comprising the rest, department spokesman
Bob Anez told the Law and Justice Interim
Committee. The department is considering taking over transports for the
Marshals Service and bearing more of the load for local law enforcement, he
said. DOC is already assuming control of services from private contractor TransCor America when its contract with the state expires
on June 30.
January 19, 2006 Helena Independent
Record
Escape charges won’t be resubmitted against two men who broke out of a prison
transport van in Helena in 2004 because that might constitute “double
jeopardy.” Deputy Lewis and Clark County Attorney Carolyn Clemens said on
Wednesday that given past U.S. Supreme Court rulings regarding double
jeopardy — being tried twice for the same crime — she believes any effort by
her to refile the cases against Brian Holliday and William Brown would be
barred. Clemens said she was disappointed by Helena District Court Judge
Thomas Honzel’s decision to dismiss the charges
last week on the wording of jury instructions. But she added that tacking
more time onto the escapees’ existing life sentences was never her goal.
“Trying them for escape in the first place was not to give them more time, as
they are lifers anyway, but rather to let them and others know that we
wouldn’t just turn a deaf ear on escapes in Helena,” she said. Holliday,
Brown, Russell VanKirk and Jasper Phillips were
charged with escape after they removed a screen from the back window of a
private TransCor van and jumped out as the vehicle
was parked outside Burger King on 11th Avenue while one of the guards made a
dinner run. The defense attorneys asserted that the specific wording of
instructions offered to the jury at trial — not challenged by prosecutors —
indicated, in their opinion that their clients couldn’t have escaped because
they weren’t in the custody of peace officers. A response brief filed by
Deputy County Attorney Lisa Leckie stated that the legal definition requires
the placement of a person in the legal custody of a governmental body as the
result of the constraint or in custody of the person in one of three ways —
by a peace officer pursuant to arrest, by transport, or by legal order.
January 13, 2006 Helena Independent
Record
As law enforcement officers searched for an escaped murder suspect in
Helena Wednesday, a district court judge ruled that two men who bailed out of
a transport van at Burger King on 11th two years ago should have a new trial
in that case. Judge Thomas Honzel stated in his
decision that prosecutors failed to prove that Brian Holliday and William
Brown were in the custody of peace officers when they climbed out of a back
window in the TransCor America van in which they
were riding en route to Montana State Prison in
September 2004. Lewis and Clark County Attorney Leo Gallagher said Thursday
that he was disappointed by the decision, but it didn’t come as much of a
surprise given the judge’s response to prosecutors’ arguments in the case at
a hearing on the issue held earlier this week.The
defense attorneys asserted that the specific wording of instructions offered
to the jury at trial — not challenged by prosecutors — indicated, in their
opinion, that their clients couldn’t have escaped because they weren’t in the
custody of peace officers. TransCor is a private
company that was contracted to transport the prisoners.
January 11, 2006 Great Falls Tribune
The weekend fight at the Crossroads Correctional in Shelby that injured
two correctional guards comes after repeated complaints that the state's only
for-profit private prison is too crowded. Still, both the Legislature during
its regular session last year, and the Corrections Advisory Council more
recently, rejected plans to expand the prison. Two inmates reportedly
received trivial injuries, but Patricia Keatts,
whose son, William, is in the prison, said Tuesday that he called and told
her he'd been stabbed in the neck and ribs and had six stitches. Corrections
Department spokesman Bob Anez said the agency
couldn't discuss inmates' medical conditions. Half the prison remains in
lockdown. Crossroads has 508 state and 38 federal inmates. In November, when
the Corrections Advisory Council met, it had 510 inmates, about 30 more than
its emergency limit, according to a Corrections Department assessment of
prison overcrowding. "The crowded conditions of these facilities,
coupled with a shortage of about 50 correctional officers, creates a
dangerous environment for both inmates and staff," the Corrections
Department report said. Nonetheless, the Advisory Council balked at expanding
Crossroads by nearly 300 beds. "There's a lack of work force up there.
The population isn't there," said state Sen. Trudi Schmidt, D-Great
Falls, who also sits on the Advisory Council. When Crossroads opened in 1999,
local officials hailed it as a source of jobs. But Steve Chand, of the
Washington, D.C.-based Corrections and Criminal Justice Coalition, said small
rural communities often see that benefit dwindle over the years because of
the high turnover among corrections workers. "What happens with that
turnover rate is that the next thing you know, people are coming 20 miles to
work, then 30 and 40. It's a problem," he said.
January 10, 2006 Helena Independent
Record
District Court Judge Thomas Honzel didn't make
a decision at a hearing Monday regarding a new trial for two convicts who
bailed out of a prison transport van outside a Helena Burger King in 2004,
but he certainly appeared to be looking closely at the defense's arguments. Honzel called Deputy County Attorney Lisa Leckie to a
blackboard in the courtroom to explain her belief that instructions given to
the jury in the case of Brian Holliday and William Brown would allow for the
possibility that the men could be found guilty - on a grammatical, and as a
result, a legal level. In addition, he quizzed Leckie intensely about why she
didn't specify a certain sub-section of the law naming transport personnel in
those jury instructions, thus eliminating the basis for defense tactics being
pursued by public defenders Jeremy Gersovitz and
Randi Hood that their clients weren't in legal custody at the time of their
escape. Holliday, Brown, Russell VanKirk and Jasper
Phillips were charged with escape after they removed a screen from the back
window of a transport van operated by TransCor
America as the vehicle was parked outside Burger King on 11th Avenue in
September 2004. Shortly after the men's conviction, Gersovitz
and Hood challenged that verdict on the basis that the specific wording of
jury instructions - not challenged at trial by prosecutors - indicated, in
their opinion, that the men could not have escaped because they weren't in
the custody of peace officers. A brief filed by Leckie at that time stated
that the legal definition requires the placement of a person in the legal
custody of a governmental body as the result of the constraint or custody of
the person in one of three ways - by a peace officer pursuant to arrest, by
transport or by legal order.
January 10, 2006 Great Falls Tribune
A weekend fight between rival prison gangs at the private Crossroads
Correctional Center in Shelby sent one prison guard to the hospital in Great
Falls with a broken jaw. A second corrections officer, a woman, had some
teeth knocked out, according to state Corrections Department spokesman Bob Anez. A third officer had superficial injuries, as did
two inmates, who were among the six prisoners involved in the brief Saturday
morning fight, he said. "Suffice it to say there were some homemade
weapons involved," Anez said. Crossroads
Warden James MacDonald later said a single weapon, a sort of puncturing tool,
was recovered. The fight broke out in the dayroom, during the one hour a day
that inmates in that area are allowed access to it, he said. According to the
tape from the room's video cameras, it began at 10:36 a.m., and the dayroom
was cleared by 10:42 a.m. However, the actual fight only lasted a couple of
minutes, he said. As many as 26 inmates had permission to be in the dayroom
at that time, although Anez said it hadn't been
determined exactly how many of them were there.Three of the prison's six pods remained in
lockdown Monday. About 250 of the prison's 508 state and 38 federal inmates
are housed in those pods, Anez said.The
Crossroads Correctional Center is the state's only for-profit private prison,
and is run by the Nashville-based Corrections Corp. of America. Its last
lockdown was Nov. 18, because of a similar incident, Anez
said.
January 8, 2006 Billings Gazette
The private prison here was put under lockdown after a fight Saturday morning
involving six to eight inmates, prison officials said. Three staff members
and two inmates at Crossroads Correctional Center were injured during the
altercation in a close custody housing unit. The situation was resolved
within six minutes, the prison said in a news release. Two inmates sustained
injuries that did not require outside medical attention. Three staff members
were taken to the local hospital for treatment for non-life-threatening injuries.
December 30, 2005 Billings Gazette
The last two of four prisoners who broke out of a prison transport van at a
fast-food restaurant here last year have been sentenced to more prison time
for the escape. District Court Judge Thomas Honzel
tacked 10 years onto the end of Russell R. VanKirk's
murder sentence and added 20 years to William L. Brown's earlier murder
sentence. The two others involved in the escape, Jasper Phillips and Brian
Holliday, were sentenced earlier. In September 2004, the four broke a screen
of the private prison transport van when it stopped at a Burger King. The
prisoners were en route to Montana State Prison
when the guards stopped to buy dinner for the men. Phillips was caught by one
of the guards before he could make it out of the parking lot. The other three
were caught within hours.
December 14, 2005 Independent Record
Last week, a Helena District Court judge tacked 10 years onto the 90-year
sentence already being served by a convicted murderer who escaped from a
prison transport van parked outside of a Helena Burger King in 2004. Judge
Thomas Honzel sentenced Brian Holliday to 10 years
for the escape, six months in jail for attempted theft, and another 10 years
for being a persistent offender. The sentences are to run concurrently to
each other, and consecutive to his sentence for murder. Two of Holliday's
fellow escapees - William Brown and Russell VanKirk
- are scheduled to be sentenced for their involvement later this month. The
fourth member of the group, Jasper Phillips, pleaded guilty to the escape
charge shortly after the incident and received a five-year sentence to be
served consecutively to the sentence he was already serving at Montana State
Prison. Holliday, Brown, VanKirk and Phillips were
charged with escape after they removed a screen from the back window of a
transport van operated by TransCor America as the
vehicle was parked outside Burger King on 11th Avenue in September 2004. At
trial, defense attorneys unsuccessfully argued that their defendants couldn't
legally be convicted of escape because they weren't in official detention as
defined by Montana law at the time they bailed out of the transport van.
Despite the jury's unwillingness to accept that argument, the defense
attorneys filed documents with the court last month requesting a new trial
for their clients on the basis that the TransCor
guards aren't peace officers as described in Montana code. Prosecutors
discount that argument, and the judge has not yet made a ruling in the case.
December 8, 2005 Independent Record
Lewis and Clark County prosecutors discount a recent argument by public
defenders that two men who bailed out of a prison transport van outside a
Helena Burger King last year should receive a new trial based on a legal
technicality. Deputy County Attorney Lisa Leckie argued in a brief filed in
Helena District Court Tuesday that a Powell County jury that found William
Brown and Brian Holliday guilty of escape in October did not err in its
decision, and the guilty verdict should stand. "It's a matter of
grammar," said Leckie Wednesday, explaining that she disagrees with the
interpretation outlined in a recent brief by public defenders Randi Hood and
Jeremy Gersovitz of what conditions constitute
"legal detention." Hood and Gersovitz
asserted in a document filed shortly after the completion of the trial that
Brown and Holliday could not have escaped from the transport van because they
weren't in official detention by Montana's legal definition. Holliday, Brown,
Russell VanKirk and Jasper Phillips were charged
with escape after they removed a screen from the back window of a transport
van operated by TransCor America as the vehicle was
parked outside Burger King on 11th Avenue in September 2004. In opposition to
the defense's argument that the prosecution failed to prove at trial that TransCor employees were "peace officers" as
required by the legal definition of "official detention" that was
included in the jury instructions, Leckie asserted that the criteria for
detention is actually more broad. Leckie's brief states that the definition
requires the placement of a person in the legal custody of a governmental
body as the result of the constraint or custody of the person in one of three
ways - by a peace officer pursuant to arrest, by transport or by court order.
For that reason, she denies that the defense has legal grounds to be granted
a new trial by the judge in the case.
December 2, 2005 Billings Gazette
The lawyers for two men who bailed out of a prison transport van outside a
Helena Burger King, sparking a manhunt in a neighborhood last year, are
asking the trial judge to set aside a guilty verdict recently handed down by
a jury in the case. Public defenders Randi Hood and Jeremy Gersovitz filed the motion this week, arguing that
prosecutors failed to present evidence at a trial last month that would prove
that employees for TransCor America fit the legal
definition of peace officers. The attorneys contend that their clients,
William Brown and Brian Holliday, couldn't have escaped from the transport
van, considering they weren't in official detention by Montana's legal
definition. It took jurors in Powell County 30 minutes after a two-day trial
in Deer Lodge in October to convict Holliday of escape and attempted theft
and Brown of escape. Jasper Phillips pleaded guilty to his involvement
shortly after the incident and received a five-year sentence to be served
consecutively to the sentence he was already serving in Montana State Prison.
Russell VanKirk also pleaded guilty and is awaiting
sentencing. VanKirk, Brown and Phillips were
charged with escape after they peeled a screen off a back window of a
transport van as the vehicle was parked outside Burger King on 11th Avenue in
September 2004. Holliday was charged with escape as well, but prosecutors tacked
on a charge of attempted theft because he rushed up to a couple sitting in a
pickup truck and attempted to hijack their vehicle. On the day of the escape,
one of the transport van guards immediately apprehended Phillips in the
parking lot at Burger King, and Holliday was arrested in the area soon later.
VanKirk and Brown eluded police for a longer
period. However, they were both arrested within hours of the escape. Deputy
County Attorney Carolyn Clemens said Thursday that she was in the process of
reviewing the motion and will file a written response with the court.
November 17, 2005 Independent Record
A proposal to expand a privately run prison in Shelby to relieve overcrowding
was panned Wednesday by a number of lawmakers who said they could not support
further privatization of the state's prison system. A similar idea was
floated during the 2005 Legislature as one of several options to deal with
the state's rapidly rising inmate population, but was passed over by a
corrections subcommittee. Nashville-based Corrections Corp. of America, which
runs the 512-bed Shelby prison, said it could complete the expansion in about
a year, although it would need a license from the state to fill the facility.
No cost has yet been calculated, said Tony Grande, vice president of state
customer relations. Several council members, who are appointed by the
governor, said they could not support such a proposal and advocated for
expansion in other areas, such as community corrections and minimum security
facilities, to ease overcrowding. ''I think we need to look at other options
and where we want to have more people and the fact that we have so many
prisoners who are not violent offenders,'' Rep. Gail Gutsche,
D-Missoula, said. Sen. Jim Shockley, R-Victor, said ''we need more
less-secure facilities at a cheaper price'' and suggested exploring
development of a 36,000-acre ranch used by inmates at the prison in Deer
Lodge before expanding private operations.
November 4, 2005 Independent Record
Two of four inmates who escaped from a prison transport van in Helena
last year were found guilty in connection with the incident by a Powell
County jury this week. It took jurors 30 minutes following a two-day trial in
Deer Lodge to convict Brian Holliday of escape and attempted theft, and
William Brown of escape. Jasper Phillips pleaded guilty to his involvement
shortly after the incident and received a five-year sentence to be served
consecutively to the sentence he was already serving in Montana State Prison.
Russell VanKirk - who is serving a life sentence
for the 1995 murder of Helena resident Tamara Pengra
- waited until last week to enter his guilty plea. On the day of the escape,
one of the transport van guards immediately apprehended Phillips in the
parking lot at Burger King, and Holliday was arrested in the area soon later.
VanKirk and Brown eluded police for a longer period
of time. However, they were both apprehended within hours of the escape.
Public defenders for the men argued at trial that their clients could not
possibly have escaped given that they weren't in "official
detention" at the time of the incident. Attorneys asserted that the
guards who manned the transport van owned by a private company - TransCor - didn't meet the legal definition of peace
officers as is written in the law. Following the escape, officials with the
Montana Department of Corrections reviewed the state's contract with the
company, and agreed to keep it as long as several policy changes were made.
Among those changes was a rule that prisoner transports stop only at secure
facilities, and local authorities be notified of gas stops. Sack lunches will
be used. In addition, a chase car will follow vanloads of the most dangerous
convicts, prisoner data sheets and photos will be carried in the vans, and the
DOC will be e-mailed about such transfers.
February 3, 2005 Shelby Promoter
The proposed 500-bed prison expansion at Crossroads Correctional Center may be
in trouble. A front page article in the Feb. 1 Great Falls Tribune reports,
"State Corrections officials Monday proposed a $7 million, 152-bed
expansion at the regional jail in Great Falls." It also described the
plan as the "favorite of five proposals now under consideration by the
Legislature." Shelby Mayor Larry Bonderud
pointed out, "Expansion has been a plan for the past eight years,
adopted by several administrations and several heads of Montana Department of
Corrections." Until recently, it was generally agreed there would be an
expansion of beds at CCC. "Now, for some reason, that philosophy has
changed, and the past eight years' proof that it has been cost-effective for
Montana taxpayers suddenly appears to be thrown out the window. It's a political
philosophy of not wanting to invest in the private sector," charged Bonderud.
February 2, 2005 Montana Standard
Gov. Brian Schweitzer strongly hinted Tuesday he doesn't want to vastly
expand the state's private prison in Shelby. Schweitzer met with three
officials from Corrections Corporation of America, the Tennessee company that
owns the Crossroads Correctional Center in Shelby, Montana's first and only
private prison. But Schweitzer pointed out that Montana already houses about
13 percent of its inmates in a private prison, which is roughly twice the
national average of around 6 percent.
February 1, 2005 Great Falls Tribune
State Corrections officials Monday proposed a $7 million, 152-bed expansion
at the regional jail in Great Falls. That would scrap an earlier plan to
double the size of the private prison in Shelby as a means of managing an
ever-increasing prisoner count. If the Legislature approves, it could signal
a significant shift in the way the state handles its felons. The plan, which
is the favorite of five proposals now under consideration by the Legislature,
also calls for a 287-bed expansion of the prerelease system and cancellation
of federal contracts for about 90 prisoners in Shelby. When it originally
contracted with the Corrections Corp. of America, which operates the private
facility in Shelby, the state reserved the right to occupy all the beds in
the facility. It requires five months notice to
exercise that option. State Budget Director David Ewer, who helped craft the
new option, said it reflects the Schweitzer administration's desire to move
away from the private prison industry in Montana. It "gives a good
sense of where this admin is going philosophically," Ewer said. Sen.
Trudi Schmidt, D-Great Falls, and Rep. Tim Callahan, D-Great Falls, both of
whom serve on the committee, are wary of more private prison beds.
January 26, 2005 Shelby Promoter
The option of an expansion of the Crossroads Correctional Center (CCC) prison
is being hotly debated in the 2005 legislature. A conflict has arisen from
comments made by Senator Jim Shockley, of Victor, before a legislative budget
panel on Tuesday, Jan. 18. He believes there is no guarantee that $7 million
paid to Corrections Corporation of America (CCA) in per diem fees over the
past five years will not be lost if the state does not purchase the prison.
"Before we spent $13 million dollars we should have read the contract,
and I'm the only one who did," said Shockley. Shockley brought the
contract, obtained from the Toole County Clerk and Recorder's office, to an
attorney who works for the Montana Department of Justice for review.
"We're not sure that we could get a clear title, because it's part of a
$715 million loan package, with 32 other CCA facilities," stated
Shockley. "We got out-lawyered. The contract is slanted toward CCA.
Their lawyers wrote it in their best interest and the state's lawyers didn't
catch it. The lawyers for the state who reviewed the original contract did a
very poor job. "The people running the Department of Corrections now
were not the ones there in 1998," added Shockley. "They relied on
CCA's good faith, using an informal agreement. There is no unilateral
agreement that they have to sell the prison to us if they don't want
to." The $9.14 per diem rate is paid to CCA toward the debt retirement
of the institution. The other per diem rate of $43.60 is a daily operational
rate per inmate.
January 20, 2005 AP
A Corrections Department plan for coping with the growing number of inmates
hit a snag Thursday when skeptical lawmakers questioned whether it was the
best deal for the state. The subcommittee working on the agency's budget
balked at approving the proposal and asked corrections officials to come up
with alternatives. They want scenarios that could include expanding the state
prison near Deer Lodge, enlarging regional prisons, adding cells at Shelby
and greater use of prerelease centers. "The long and short of it is
there are so many unknowns," Rep. John Witt, a Carter Republican and
member of the subcommittee. "Before we go out and say here's $13
million, we need to understand what our options are. The panel's delay in
acting on this portion of the department's budget request did not bother
Director Bill Slaughter, who said an ultimate decision on where to spend the
money is critical. "There's a philosophical discussion going on. Do we
want to get deeper into the private prison business, get out or stay at the
level we're at?" Slaughter said. The
subcommittee also has questions about the contract the state has with Corrections
Corp. of America, which owns the Shelby prison, Witt said. Sen. Jim Shockley,
R-Victor, has raised concerns about provisions in the contract that require
the state to pay $9.14 for each inmate per day as a credit toward Montana's
possible purchase of the facility. Since the state has not expressed an
interest in buying the prison, Shockley has wondered why the state agreed to
pay the money, which so far has amounted to $7 million. In a meeting with
Gov. Brian Schweitzer on Thursday, Shockley urged consideration of
less-expensive options to erecting more pricey cellblocks at the state prison
or buying more space at Shelby. "We
could do it cheaper in the long run if we build minimum security,"
Shockley told Schweitzer. "My idea is to keep the cost down."
January 19, 2005 Great Falls Tribune
A state senator Tuesday raised questions about Montana's contract with the
company owning the 560-bed private prison in Shelby — and whether it's wise
for the state to finance another 500-bed expansion at the site. "I think
we could add (beds) at Deer Lodge and we would be better off," said Sen.
Jim Shockley, R-Victor. Shockley, a member of the Law and Justice Interim
Committee and a state corrections advisory council, said the current contract
with Corrections Corp. of America (CCA) doesn't guarantee the state gets
credit for nearly $7 million it's paid toward owning the private prison in
Shelby. "Why
compound that?" he said. "We have a contract where we don't know
what it says, at best. There's a chance that all this money we paid them will
go for naught." Under the current contract, the state
makes two payments to CCA: $43.60 per inmate per day for operating the prison
and another $9.14 toward a possible purchase of the prison. Shockley said
there's nothing in the contract that guarantees the state can use the money
accumulated from the second payment toward buying the prison. The state also
isn't earning any interest on that money. "We may have been out-lawyered
(on the contract)," he said. Corrections officials consider the $9.14
per inmate per day payment as "rent" rather than a down payment on
the building, he said.
November 22, 2004 AP
Three maximum-security inmates pleaded not guilty Monday to escaping from a
prison transport van in a restaurant parking lot in September. A fourth
inmate plans to enter the same plea next month, prosecutors said. The
inmates, several of them convicted murderers, were among six being
transported from the Crossroads Correctional Center in Shelby to the Montana
State Prison at Deer Lodge on Sept. 2 when the TransCor
America van stopped at a Helena restaurant for food. Four men broke out of
the van through a window and two were nabbed quickly. The other two were
subjects of an intense manhunt for hours before being arrested in a nearby residential
neighborhood. The state immediately suspended its $311,000 annual contract
with TransCor following the escape and demanded
tighter security measures for movement of inmates. The company complied and
has since resumed work. TransCor was also asked to
pay $23,516 to cover the state and local government costs of recapture.
Officials have refused to say how the inmates were able to unlock their
hand-cuffs and leg shackles without a key.
September 22, 2004 Billings Gazette
The company responsible for four maximum-security inmates who escaped in
Helena earlier this month will be asked to pay $23,516 to cover the state and
local government costs of recapturing them. In a letter to TransCor America this week, the state Department of
Corrections submitted a bill for $21,708. That was the expense incurred by
the Helena Police Department, Lewis and Clark County sheriff's office,
Montana Highway Patrol, the state Criminal Investigation Bureau, Lewis and
Clark County Search and Rescue, and the American Red Cross. Joe Williams,
head of the centralized services for the department, said Wednesday his
agency will send a separate bill for $1,808 to the Nashville-based company.
The four inmates, three of them convicted murderers, were among six being
transported from the Crossroads Correctional Center in Shelby to the Montana
State Prison at Deer Lodge when the TransCor van
stopped at a Helena restaurant for food. Four men broke out of the van and
two were nabbed quickly. The other two were captured within the next eight
hours after an intensive manhunt in a residential neighborhood. Officials
have refused to say how the inmates were able to unlock their handcuffs and
leg shackles without a key.
September 14, 2004 Helena Independent Record
The company in charge of a transport van overwhelmed by convicts Sept. 2
will be back hauling prisoners today. Montana Department of Corrections
Director Bill Slaughter said TransCor agreed to
make changes. The company, a subsidiary of Tennessee-based Corrections
Corporation of America, also agreed to pick up the tab for the search, which
is estimated to be at least $20,000.The convicts used some sort of tool to
free themselves of handcuffs, leg irons and waist restraints. They were being
transported from the CCA-run Crossroad Correctional Facility in Shelby to the
maximum security Montana State Prison at Deer Lodge, after their behaviour deteriorated and officers found weapons and
tools in their cells.
September 10, 2004 Helena
Independent Record
Deep vibrations in the night awakened me. For a moment, looking out the
window was like watching some cop show on TV, where the choppers pin the
inner-city bad guys in blinding pillars of light as loudspeakers tell them to
“throw down your weapons.” The massive helicopter and the searchlight sweeping
the homes of sleeping residents fit the script exactly except for one
thing—this was Helena, not L.A. As it turned out, a lot more than the
choppers and searchlights fit the script for a Hollywood cop show. Four
convicts, who were being transported between Montana prisons, had just broken
out of a van while its driver ducked into Burger King for some fast food.
One, a convicted killer, was now loose within blocks of the home of his
former victim’s family—hence the choppers and searchlights in a city where
sleep is rarely disturbed by such events. But to make a short story long, the
questions are now pouring forth about how it was possible for four men,
supposedly all chained at ankle, wrist and waist, to break out of an armored
prison van and flee into the night. But at least part of the answer started a
decade ago, when then-Gov. Marc Racicot tossed hundreds of millions of tax
dollars into an ambitious spending plan that included, for the first time in
Montana’s history, private prisons. It would also be great if such a move had
actually made Montana’s state government “more efficient and more effective,”
as Racicot promised. Neither thing happened, however, as last weekend’s
episode illustrates. The privatization was just the latest domino to tumble in
the national Republican plan to turn the lucrative business of government
over to the private sector. Prisons—yeah, give ’em
to contractors. Last weekend’s incident in Helena, without question, is a
direct outgrowth, since, as it turns out, TransCor
America, a division of Corrections Corporation of America, was recently
contracted by the state to transport prisoners. As it turns out, some of the
people who were around the Capitol when Racicot rammed through privatization
are still around. Jim Smith, for one, was and is the lobbyist for the Montana
Sheriffs’ and Peace Officers’ Association. He is also the current mayor of
Helena. According
to Smith, prisoner transportation duties had been previously undertaken by
the counties. Smith says: “We felt like we were performing a good service”
and “saving the state money.” The problem, it seems, was with legislative
approval for the funds to reimburse counties for their expenses. After
successive legislatures refused to make the appropriation, Smith says the
counties “gave notice in February that we were going to have to discontinue”
prisoner transportation. Then came a miracle
of modern politics. Although no money existed to reimburse county governments
for their expenditures, suddenly money was found to contract with a private
company. The privatization of prisons and prison services in Montana deserves
a second hard look. One early promise, that Montana would not serve as a
dumping ground for out-of-state prisoners, has already gone by the wayside.
Now, dangerous prisoners roam residential neighborhoods at night, having
walked away from a supposedly “armored” prison transport van.
September 10, 2004 Billings Gazette
On the day that four inmates escaped from a prison transport van parked at a
city Burger King, the transport service's parent company received an award as
"outstanding business of the year" from Gov. Judy Martz.
Corrections Corp. of America, the firm that runs Montana's private prison in
Shelby, owns TransCor and had received the Desiree
Taggart Memorial Award on Sept. 2, hours before four maximum security
prisoners escaped custody of TransCor workers while
en route from Shelby to Deer Lodge. "It's
unfortunate that the escape by four prisoners occurred in Helena on the same
day that CCA was being given this award," said Chuck Butler, Martz's
spokesman. "It is one of those unfortunate coincidences. Certainly, CCA
had earned the award." The award was presented to company officials
about a mile from the fast-food restaurant where the inmates made their escape.
September 9, 2004 Montana Standard
The days of Burger King dinners may soon be over for Montana prisoners and
the private agents who transport them. State corrections officials handed a
list of demands on Wednesday to leaders of TransCor,
the private prisoner transport service from which four inmates escaped last
Thursday, among them: No more eating out. The transport van was stopped at a
mid-town Helena Burger King for dinner and a trainee of the company was left
in charge of six maximum security inmates while her colleague — a
fully-trained officer — went inside the restaurant.
September 9, 2004 Helena Independent
Record
TransCor, the private prisoner transport
service from whose custody four inmates escaped here last week, offered a job
to Corrections Director Bill Slaughter several months before the state inked
a deal with the Tennessee-based company, records show. Slaughter told
legislative auditors in the spring that TransCor
approached him to take a job, a memo from the Legislative Audit Division shows.
Slaughter told the company he had no current plans to resign. Auditors, who were asked to investigate the
contract, concluded that Slaughter had broken no laws. The memo was written
on April 12, just days before TransCor's contract
to transport prisoners in Montana went into effect.
September 5, 2004 Helena Independent Record
Anyone living in Helena's Central neighborhood where two escaped murders
were hiding late Thursday night has to be thankful that local law enforcement
officers were so quick to react and so thorough in their search. A situation
with all the ingredients of a disaster was defused after an anxious night of
roadblocks and intensive neighborhood searches on the ground and from the
air. Either of the two convicts was capable of committing further hideous
crimes, including murder, taking hostages or taking on police in a standoff.
Once mobilized, law enforcement officials responded immediately and deserve
everyone's sincere thanks for an excellent job of keeping the escapees in a
controlled area. But those minutes and decisions made just before the escape
cause us to ask several questions. Most of them have to be directed to
officials at the Montana Department of Corrections, which only recently
changed its method of transferring prisoners. Earlier this summer it awarded
the job to TransCor of America, a division of
Corrections Corporation of America. The firm also runs the state's only
private prison in Shelby. The six maximum security inmates (two prisoners
never left the van) were being transported from Shelby to Deer Lodge, a
routine transfer, according to Department of Corrections Director Bill
Slaughter. If the transfer was routine, we have to wonder if it also is a
matter of routine for guards escorting prisoners to stop at a fast food restaurant in the middle of town for a quick
burger? It's a long trip from Shelby to Deer Lodge, but couldn't they pack a
lunch? At least, couldn't they have used the drive-through? We have to wonder
if two guards are enough to handle six maximum security inmates?
Especially when one of the guards leaves the van and goes into a restaurant?
We have to wonder if the van, which apparently was
peeled open with the inmates' bare hands, was sufficiently armored to
transport such deadly cargo? We have to wonder if a
transport van should even be allowed to stop in an area so familiar to a
convict, in this case VanKirk? And one especially
disturbing question came from members of the Pengra
family, who wondered why they weren't notified of the escape?
September 4, 2004 Montana Standard
Thursday's escape attempt wasn't the first for convicted murderers Russell VanKirk and William Brown. In fact, both of the men
attempted on separate occasions to break out of the private prison in Shelby
earlier this year, according to officials with the Montana Department of
Corrections. While Public Information Specialist Sally Hilander could not provide details about the efforts of
the men to obtain their freedom, she said VanKirk
was written up for an escape attempt on June 1 this year, while Brown was
written up for similar activity on May 27. Before that, VanKirk
attempted to break out of a Corrections Corporation of America facility in
Tennessee in January 1998. At that time, Montana prisoners were being held
there due to overcrowding in Deer Lodge. Brown tried to make a break from the
Anaconda-Deer Lodge Jail following his arrest for deliberate homicide in May
2001. Brown was charged and convicted of that first escape attempt, but
not the most recent effort. VanKirk was not formally
charged with either of his previous escape attempts. Hilander
said both of the men were being moved to Montana State Prison at Deer Lodge
Thursday night because they had been reclassified as maximum security
prisoners due to disruptive conduct at the private prison in Shelby. The
Shelby facility doesn't have the proper accommodations for prisoners with
that inmate status.
September 4, 2004 Billing Gazette
Two private inmate transport agents and their Tennessee employer have been
temporarily suspended from moving Montana prisoners as officials investigate
the Thursday escape of two convicted murderers from a transport van stopped
here at a Burger King. In all, four inmates escaped from the van , operated by TransCor, a
subsidiary of Corrections Corporation of America, the nation's largest
private corrections company. The breakout occurred Thursday evening as the
van was idling in a Burger King parking lot near the Capitol for a dinner
break. Two convicts were caught shortly after the escape. Two others, killers
Russell VanKirk and Leonard Brown, remained on the
lam for hours prompting a manhunt that lasted until after 1
a.m. Corrections Director Bill Slaughter said he temporarily suspended TransCor's 4-month-old contract as his agency and others
try to answer some questions including: How did the inmates slip out of their
shackles and handcuffs before the breakout? How did the prisoners rip the
wire mesh covering the back windows of the van? Where was the guard who was
supposed to be watching the van as her partner went into Burger King? Why
didn't agents use the drive through? "I don't know that I've ever
seen a more potentially dangerous situation," Slaughter said. "We
took this deadly serious." The escapees were among six inmates
being transferred to the Montana State Prison at Deer Lodge from the
Crossroads Correctional Facility in Shelby because they had recently been
reclassified as "maximum security," said Mike Mahoney, warden of
the Montana State Prison. The Shelby prison, run by CCA, the parent
corporation of TransCor, has no maximum security
wing, Mahoney said. The only such wing is the one at Montana State
Prison. Mahoney said he wasn't exactly sure why the men were
reclassified to maximum security, but said they may have been too poorly behaved
to safely stay in Shelby. The six inmates were traveling in a
12-passenger van, said Ashley Nimmo, director of marketing and communications
for TransCor. One of the agents had worked with the
company since April when TransCor inked its
contract with the state. The other was recently hired and was still receiving
on the job training after her graduation from the company's two-week training
program in July. The trainee was left in charge of the inmates as the
fully trained officer went into the Burger King restaurant, Nimmo said,
adding that such a situation does not violate TransCor
safety policies.
September 3, 2004
Two convicted murderers escaped from a prison transport van while it was
parked a fast-food restaurant, but they didn't get very far. Five hours
after breaking the windows of the van to escape while one of the guards went
into Burger King on Thursday, Russell Rex VanKirk
was arrested just blocks away, said Helena Police Chief Troy McGee. William
Leonard Brown was captured early Friday sneaking through yards nearby, he
said. VanKirk was taken to the hospital to be
treated for cuts. "He's being well guarded," McGee said. They were
among four men who escaped from the van at 6 p.m. The other two escapees were
immediately captured. (AP)
September 3, 2004
Two convicted murderers escaped from a prison transport van Thursday evening
at a fast-food restaurant here, Lewis and Clark County officials said.
Russell Rex VanKirk and William Leonard Brown were
among four men who broke a window out of the van at 6 p.m. VanKirk, Brown and two others escaped the van after one
of the two guards had gone into Burger King. One inmate was badly cut by the
glass and was treated at St. Peter's Community Hospital. Another was quickly
apprehended and two remained in the van, McGee said. Gov. Judy
Martz was trying to acquire helicopters and night vision equipment to aid the
search, Slaughter said. The men were being taken from the private
Crossroads Corrections Center in Shelby to the Montana State Prison in Deer
Lodge by TransCor, a company recently contracted by
the state to transport inmates. (AP)
June 22, 2004
The U.S. Marshals Service has agreed to pay a higher rate to hold federal
prisoners at the private prison in Shelby, gaining the state about $260,000 a
year, corrections officials said Monday. "We just sat down and
figured out what we were going to do with this issue," said state
Corrections Director Bill Slaughter. "We needed money, and (the U.S.
marshal) needed to keep the (prison) pod alive." For the past
year, the U.S. Marshals Service has been holding an average of 80 prisoners
at the Crossroads Correctional Center south of Shelby. The prison is run by
Corrections Corp. of America, but the state has final say over which
prisoners are held at the facility. A contract between the Marshals Service
and the state expired last month, but Slaughter said he was able to negotiate
a new contract at a higher price. The federal government also agreed to
pay the higher rate retroactively, he added. The federal government will pay
$51 per day per inmate, with $9 of that amount going to the state to
help pay off the construction cost of the prison. CCA built the prison
several years ago and the state is in the process of paying off the
construction costs by buying the prison from CCA. (Tribune Capitol
Bureau)
September 21, 2003
The private prison near Shelby has been gaining inmates and inching
toward profitability this summer, but so far hasn't had to accept inmates
from outside Montana, the prison's warden says. "I don't foresee
the need for out-of-state (inmates) at this point in time," said Jim
McDonald, warden of Crossroads Correctional Center just south of
Shelby. An increase in state inmates and a new contract to house
Montana prisoners in the custody of the U.S. Marshals Service have boosted
the Shelby prison's inmate population. The prison had reduced its staff 40
positions to a low of 115, but is now bringing staff back on, McDonald
said. "We're at about 125 staffers and are seeking more to
employ," he said. Crossroads is owned and operated by Corrections
Corp. of America (CCA), and money-saving moves by the state last year had
dropped the prison's population below the level CCA considered
profitable. That prompted CCA and Shelby leaders to ask the 2003
Legislature to approve a bill allowing the private prison to accept federal
prisoners and inmates from outside Montana. The Legislature approved
the measure, but CCA has yet to import inmates to its Shelby facility.
"When the bill passed, we were actively pursuing (out-of-state
inmates)," McDonald said. "Now, we've seen the needs right here in
the state continue to grow." The prison has a maximum capacity of
512 inmates. Its population late last week stood at 395, including 53 prisoners
from the Marshals Service in Montana. CCA estimates the prison needs
425 inmates to turn a profit, McDonald said. He said the prison can
accept up to 85 prisoners from the Marshals Service and is budgeted to hold
370 inmates from the state. Under state law, the two different types of
inmates must be kept separate from one another at the prison. McDonald
said there are two main reasons Shelby is seeking more inmates: more
methamphetamine-related arrests and convictions and increased law enforcement
efforts because of new homeland security measures. "I feel we're
going to reach (the state maximum) in very short order," McDonald said.
"It's just a sad fact that we see that coming. We're here to provide the
service for the state." When prison and Shelby officials pitched
the bill allowing out-of-state inmates, they also said it might be possible
to house federal inmates who had been convicted in Montana and are being held
in federal prison somewhere else in the country. Many of these federal
inmates are from Montana's Indian reservations, and moving them to Shelby
would allow them to be closer to their relatives. But McDonald said
it's unlikely these transfers could happen any time soon. The U.S.
Bureau of Prisons classifies its prisoners by "risk level" rather
than geography, and changes in federal law or policy may be required to
transfer inmates according to where they came from, he said. "The
subject hasn't even been broached with the Bureau of Prisons yet," he
said. While out-of-state inmates aren't part of immediate plans for the
Shelby facility, local officials have talked about whether the prison could
be expanded to house up to 1,000 additional prisoners. The Crossroads
building and site were constructed to be able to expand to a facility that
could house up to 1,500 inmates. Toole County Commissioner Allan Underdal said local officials have been investigating
what it would take to expand the prison and perhaps take in federal inmates
on a much larger scale. "That's a good economic-development tool,
because with the federal prisoners comes a better pay scale for those who are
working the federal end," he said. "It's hard to turn down
any sort of economic development, even if it's prisoners. People aren't
standing in line to get in Montana to provide jobs, so we have to pursue
them." However, Underdal emphasized that
any expansion would have to be approved by the state -- and any concrete
steps in that direction are in the distant future. "Our first
priority has been to fill the prison we have right now," he said.
"Timing is everything, and I'm not sure if the timing is right right now (for expansion), or in a couple of years. ...
We just like to plan ahead." Joe Williams, head of the Corrections
Department's Centralized Services Division, points out that state law forbids
any expansion of the private prison without state approval. He said
expansion at the Shelby prison is part of the department's long-range plan,
if prison bed space is needed. "The Legislature and we know as
well ... that when we do expand, we'll be expanding in Shelby," Williams
said. (Great Falls Tribune)
September 2, 2003
A convict who was waiting to be sentenced for killing another inmate was
found hanged in his cell over the holiday weekend, prison authorities
said. Jon LeBeau, 32, was found early Monday by prison guards during a
routine check. Medical personnel were unable to revive him, and the
preliminary ruling was that LeBeau committed suicide. LeBeau arrived at
the Montana State Prison in 1996, after being convicted of burglary and
forgery in Missoula County. LeBeau broke into the Christian Science Church
and stole a boom box and some checks, which he later forged for more than
$800. Earlier this year he was convicted of killing another inmate,
Thomas Rose, 20, with a 12-pound slab of marble. The death of Rose was the
first at the private Crossroads Correctional Center at Shelby. (Great
Falls Tribune)
June 4, 2003
Montana's only private prison in Shelby could be accepting out-of-state
prisoners this summer following changes the 2003 Legislature adopted.
Crossroads Correctional Center Warden Jim MacDonald said he hoped prisoners
would begin arriving in Shelby by the end of July. The 2003 Legislature
repealed a ban on accepting out-of-state prisoners in an effort to stop the
flow of red ink at Crossroads. MacDonald said the facility has been losing
money since a state budget crisis forced the Department of Corrections to
pull hundreds of inmates out of the private prison. Department
spokesman Joe Williams said the revised rules governing out-of-state inmates
will be a part of a new, two-year contract with Crossroads currently under
negotiation. Williams expects those new rules to require Crossroads, owned by
the Corrections Corp. of America, to provide the department with a list of
inmates the prison wants to bring into the state. Montana officials could
then reject inmates they find unsuitable, because of gang connections or
HIV/AIDS, for example. Crossroads would not be allowed to bring in
maximum-security inmates and all out-of-state inmates would remain separate
from Montana prisoners. Also, Montana prisoners would still be given priority
for available beds in the facility. Williams said he didn't think
out-of-state inmates would cause any problems at Crossroads, which has had
"an excellent record so far." As part of the negotiations,
Montana has agreed pay $52.74 a day for each inmate housed at Crossroads, up
from the $50.11 the state was paying after cutting the daily rate last summer
during the budget crunch. (AP)
May 7, 2003
A District Court judge from Malta is expected to rule on whether to throw out
evidence in the deliberate homicide case against a Shelby inmate, officials
said. District Judge John McKeon heard arguments in a hearing in
District Court in Shelby Tuesday on disallow evidence defense attorneys for
Jon LeBeau argue was unlawfully obtained. LeBeau, 31, pleaded innocent
to murdering 20-year-old Thomas Rose Jan. 9 with a leather anvil in the
gymnasium at the Crossroads Correctional Center. The death was the
first fatal assault at the private prison since it opened in September
1999. (Great Falls Tribune)
April 23, 2003
Shelby's private prison could begin receiving at least a few federal
prisoners within a matter of weeks, but probably won't get enough state and
federal prisoners from outside of Montana to do much rehiring for a few
months. Shelby prison officials already have been working with the U.S.
Marshal's office to bring in one type of federal prison, those who have been
convicted but are awaiting their sentencing and permanent placement.
With the bill signed into law, MacDonald aid he and
his parent company will begin seeking contracts with other state's prison
systems and the Bureau of Prisons, for federal prisoners who have been
sentenced. (Great Falls Tribune)
April 22, 2003
Bills allowing out-of-state prisoners at Shelby's private prison, outlining
development of state coal holdings and revising rules for citizen ballot
measures are among the bills Gov. Judy Martz has signed as the Legislature winds
down. The governor has signed 413 bills through April 18, including one
to protect the $25 million, 512-bed prison built in Shelby more than three
years ago by Corrections Corp. of America. Lawmakers and corrections
officials have insisted since the beginning of the session that the
Crossroads Correctional Center needs out-of-state inmates to stay in
business. (Great Falls Tribune)
April 10, 2003
A bill allowing Shelby's private prison to import out-of-state prisoners was
approved by the House in a preliminary vote Wednesday, moving it one step
closer to law. North central Montana civic leaders and legislators say
the change is needed so the prison can remain open during what's expected to
be a temporary lag in its use by state prisoners. At the urging of
sponsor Edith Clark, R-Sweet Grass, the House voted 63-37 to accept the
Senate version that stripped off two House amendments that Shelby prison
supporters disliked. One stripped amendment would have imposed a three-year
"sunset" on the importing of prisoners. The other would have banned
the importing of federal prisoners. But Rep. Kathleen Galvin-Halcro, D-Great Falls, said a sunset date would allow the
Legislature to check whether the program to import prisoners is
working. Rep. Steve Gallus, D-Butte, said private prison backers broke
their 1997 promise that Montana would not import prisoners. And Rep.
Paul Clark, D-Trout Creek, said with the expanding trend the Shelby facility
soon will be seeking "international terrorists" as inmates.
"I hope that everything that the supporters were promising is
true," said Scott Crichton, executive director of the Montana American
Civil Liberties Union. "But we still think it is a mistake to use
corrections for economic development, especially if it means expanding
private prisons.' (Tribune Capitol Bureau)
April 4, 2003
The Senate Judiciary Committee Tuesday approved a bill to let Shelby's
private prison import out-of-state prisoners, after removing House amendments
that prison supporters opposed. The committee voted 8-1 to move House
Bill 451 to the Senate floor. "This bill will allow the
Corrections Corporation of America to keep the Shelby prison viable until the
state sends more prisoners there again in the next few years," said Rep.
Edith Clark, R-Sweet Grass, the bill's sponsor. It needs to be able to
import out of state prisoners temporarily because the state Correction
Department drastically cut the number of prisoners it sent to the Shelby
prison starting last summer. Corrections released a few hundred
prisoners early because of the state's budget crunch, but Corrections
Director Bill Slaughter expects the prison system to start filling up again
within a couple of years. He supports the bill, saying if CCA closed
the Shelby prison the state would have to pay to ship 300 inmates out of
state. The Senate committee accepted two amendments offered by Clark to
reverse action taken by the House Judiciary Committee. They would end a
proposed three-year sunset on the importing of prisoners and a ban on importing
federal prisoners sentenced in other states. (Great Falls Tribune)
February 17, 2003
The private prison at Shelby would be allowed to take prisoners from other
states under legislation endorsed Saturday by the House. House Bill
451, which lawmakers approved 81-18 in a preliminary vote, would overturn a
ban on out-of-state prisoners at privately owned prisons. Some
lawmakers, however, complained that the Shelby facility was approved on the
condition that it would not import prisoners, a prohibition put into law in
1999. "Here are two sessions later, and all of the sudden they're
changing the rules," said Rep. Paul Clark, D-Trout Creek. "It kind
of undermines the integrity of the process for me." (AP)
February 13, 2003
A split House Judiciary Committee voted 12-6 Wednesday to let the
private prison in Shelby bring in out-of-state prisoners to fill empty beds.
Even some supporters had strong reservations about changes in the measure,
and the committee added several tough amendments. The committee added
amendments to exclude bringing in federal prisoners convicted in other states
and to require that out-of-state prisoners be physically separated from
Montana prisoners and be returned to their home states at least three months
before they are released. Shelby officials said the change is needed to keep
the Crossroads Correctional Center open during what's expected to be a
temporary drop in state prisoners. Toole County officials say the $25
million, 512-bed facility has been an economic boon to the area since
Corrections Corporation of America opened it in 1999. Even some committee
members who supported the measure expressed strong reservations about
changing policy that allowed private prisons, but banned them from bringing
in prisoners from other states. Rep. Scott Sales, R-Bozeman, said he dislikes
private prisons and wishes the state never had gotten into them, just as he
wishes the state never allowed game farms. But, he said the state needs to
allow prison imports to shore up the prison temporarily because it made a
commitment to Toole County and to prison operator CCA. "I think this
bill stinks, but I will hold my nose and vote for it," he said.
Committee Chairman Jim Shockley, R-Victor, said the private prison was
approved on the condition that it not import prisoners. "We got screwed,
we got lied to, we got deceived," Shockley said, who nonetheless voted
for the bill. Rep. Brad Newman, D-Butte, said Montana would get "the
worst of the worst" prisoners. Newman, a prosecutor, said Montana itself
"sent some bad actors" to private prisons in Texas and Tennessee a
few years ago. It doesn't make sense for states to ship out first time
offenders convicted of minor charges who won't be imprisoned long, he added.
Rep. Paul Clark, D-Trout Creek, said the Legislature shouldn't break its
commitment to the public to avoid out-of-state prisoners. CCA took the risk
of coming to Montana and lawmakers shouldn't bail them out, he added. Rep.
Steve Gallus, D-Butte, charged that CCA is using the state's budget crisis, which
caused the Corrections Department to release some prisoners early and reduce
the inmate population of the Shelby prison, as an excuse to expand the Shelby
by as many as 1,000 beds to handle "federal thugs." (Great Falls
Tribune)
February 5, 2003
The state's only private prison is losing money and needs to bring in
out-of-state inmates to make ends meet, Corrections Department and prison
officials told the House Judiciary Committee on Tuesday. " Crossroads
Correctional Center is a business," said Allan Underdal,
a Toole County commissioner. "It is no less important to our town than
Malmstrom is to Great Falls or the universities in Missoula and Bozeman ." Rep. Edith Clark, R-Sweetgrass, has
proposed allowing the Shelby private prison to take out-of-state convicts.
Her House Bill 451 would reverse the section of Montana's 1999 private prison
law - that Clark helped get on the books - that bars out-of-state prisoners.
"I'm unfortunately older now," said Clark .
"And I'm wiser." Clark and other state and local officials said the
private prison is a safe, important part of the Hi-Line economy and shouldn't
be jeopardized. The 512-bed private prison opened in 1999. At the time,
Warden Jim MacDonald said, the company didn't think it would need
out-of-state inmates because Montana 's prison system was growing fast. It
appeared that the Shelby prison would be full in a matter of months, he said.
But last summer, as tough economic times came to state government, the state
started withdrawing prisoners to cut expenses. Today, the prison has 324
inmates and is about 35 percent vacant, MacDonald said. The prison is losing
money and has had to lay off employees, he said. "Reducing quality of
service and reduced public safety is not an option," MacDonald said Bill
Slaughter, director of the state Department of Corrections, said the state
can't afford to lose the private prison. Eventually, he said, Montana 's
prison population will grow again, and the state will need a place to house
its offenders. Although the bill itself doesn't mention it, Slaughter said
any contract between the state and the company would have certain safeguards.
Montana would get first bids on all open prison cells. Department officials
would be able to screen incoming out-of-state inmates to make sure they
didn't have dangerous diseases or gang connections. And no out-of-state
inmates would be released into Shelby or any other community in Montana. The
prison had its first major problem earlier this month when a 20-year-old
inmate serving time for bad checks was beaten to death in the prison
gymnasium by another inmate. Although only one person spoke against the bill,
a recent poll suggests that the overwhelming majority of Montanans do not
support the idea of allowing out-of-state inmates. A Gazette State Poll
conducted in mid-December by a Washington , D.C. ,
research firm showed that 72 percent of Montanans rejected the idea. An
unofficial poll of Toole County voters in December showed that 78 percent of
county residents support accepting out-of-state inmates. Betty Whiting, a
lobbyist for the Montana Association of Churches, offered the lone voice of
dissent. "We're opposed to private prisons," she said. "We the
people should be more responsible for our prisoners." (Billings Gazette)
January 29, 2003
A man accused of killing a fellow inmate at the Shelby prison not guilty to
deliberate homicide Tuesday in Toole County District Court. Jon Beau,
31, is charged with murdering 20-year old Thomas Rose Jan. 9 in the gymnasium
at the Crossroads Correctional Center. (The Tribune)
January 24, 2003
A
legislative budget panel Thursday recommended the state Corrections
Department's 2004-05 budget stay as requested by Gov. Judy Martz, rejecting a
"rollback" to 2000 spending levels.
By choosing the budget requested by Martz, the panel's majority
rejected a "rollback" to 2000 spending levels that had been chosen
as a starting point by Republican leaders on the first day of the
Legislature. Going back to 2000
spending levels would mean higher caseloads for an already overburdened
parole officer staff, layoffs at the Montana State Prison, and the closure of
the private prison in Shelby, a Helena prerelease center and a new treatment
program for repeat drunken drivers, he said. (Great Falls Tribune)
January 22, 2003
Authorities
on Friday released the name of the Crossroads Correctional Center inmate who
was killed in a fight with another prisoner.
The dead inmate was identified as 20-year-old Thomas Joseph Rose II,
who was serving concurrent five-year sentences for writing bad checks and
escape, officials at the private prison said.
Rose was sentenced in Sanders County in the summer of 2001 and had
been transferred to the Shelby prison from the Montana State Prison in Deer
Lodge on Dec. 19. Crossroads Warden Jim MacDonald said the name of the second
inmate involved in the Thursday fight has not been released. An investigation
into the incident continues, and charges are pending, he said. In a written statement, prison officials
said Rose died of injuries sustained in a fight in the prison's gymnasium
Thursday afternoon. State criminal
investigators "have what they feel is the weapon" that the alleged
assailant used in the incident, said Cecily Simons, Crossroads public
information officer Friday afternoon.
"It's not a weapon that this inmate had been building or making
over a period of time," Simons noted.
Rose's mother, Penny Rose, of Big Timber told the Tribune Friday
evening that the investigating coroner indicated to her that her son was
blindsided by the other inmate with a board and died from brain damage. "There was no fight - my son was hit
in the back of the head with a board," Penny Rose said, adding that she
was told that her son didn't have any bruising on his hands. "Everything came from behind; he
didn't get a chance," she said from the home she shares with her son's
father, Thomas Rose Jr., and their younger daughter, Aleise
Rose. MacDonald said the death was the
first fatal assault at the prison since it opened in September 1999. Staff at the facility was reduced beginning
last fall when the state started releasing inmates to help make up for a $9
million Corrections Department budget deficit. The facility was designed for
512 prisoners but had only 344 inmates Thursday night, the warden said. Montana Department of Corrections
authorities were notified immediately of the incident and were on site at the
Shelby prison Friday to assist the Department of Justice Criminal
Investigation Bureau and the Toole County Sheriff's Department with the
investigation, officials said.
Investigators are expected to release more information Monday. "I imagine we'll have more stuff
pouring in on Monday," Simons said.
The prison remained in lockdown Friday, and officials said all
visitations and other activities through the weekend were canceled. "We are allowing the inmates to be out
in their day rooms to shower and kind of move about a little bit but they
will not be moving about the building," Simons said. Crossroads made more staff members available
for the inmates to talk to if they needed, Simons said. "Everyone feels terrible that it
happened but they, I guess, are processing and doing their thing," she
said. "We haven't had any major issues come of it." Described by his mother as being family-oriented
and a "real charmer", Rose enjoyed drawing, making tattoos, playing
guitar and listening to music. He
attended Thompson Falls High School for about two years and received his GED
in the 11th grade. After high school, he lived in various parts of Montana,
including Libby and Helena.
"Everybody who knew him, that really knew him, they really loved
him," Penny Rose said. "He was just a likeable guy. He'd do
anything for you." Rose, who
would have turned 21 Jan. 21, had two young children, Benjamin Webber, 3, and
Elizabeth Rose, 17 months. Whitted Funeral Chapel in Shelby is handling his
funeral arrangements. (Great Falls Tribune)
January 22, 2003
The
state's private prison is losing money every day and may close if
lawmakers don't let the facility take out-of-state inmates, Department of
Corrections officials told lawmakers Tuesday.
"They're hanging on to see what this Legislature does," said
Joe Williams, administrator of the agency's Centralized Services Division
after a hearing of the Appropriations Subcommittee on Corrections and Public
Safety. "They're nip and tuck. This has little to do with keeping (the
company) afloat. But one of the ways they've done that, Williams said, is by
pulling people out of the state's private prison, the Crossroads Correctional
Center in Shelby, run by Corrections Corp. of America. The prison must have
430 inmates to break even, Williams said. Montana has only 340 prisoners at
the prison, and state law forbids the company from bringing in inmates from
out of state. (Billings Gazette)
January 14, 2003
A
man accused of killing a fellow prison inmate was arraigned Monday in
District Court here. Jon LeBeau, 31,
is charged with murdering Thomas Rose, 20, Thursday in the gymnasium at
Crossroads Correctional Center. Rose
"was struck in the head with a wood block," said Crossroads Warden
Jim MacDonald. (Great Falls Tribune)
January 10, 2002
An
inmate at the Crossroads Correctional Center died Thursday after a fight with
another inmate, officials said. The
fight happened at 4:25 p.m. in the gymnasium at the private prison. Staff at the facility was reduced beginning
last fall when the state started releasing inmates to help make up for a $9
million Corrections Department budget deficit. The facility was designed for 500 prisoners
but had only 344 inmates as of Thursday night, the warden said. (Great
Falls Tribune)
January 2, 2003
The
companies that wanted private prisons in Montana now have exactly what they
wanted: Citizens of the state pitted against each other in a dispute over how
we can imprison even more people in Montana. That much was made clear this
week with release of a public opinion poll finding Montanans opposed, by a
margin of more than three to one, importing inmates from out of state at the
private prison in Shelby. This is directly opposite the findings in another,
albeit less scientific, survey of the Shelby-area's registered voters. In the
past couple of weeks, the 512-bed prison near Shelby housed 340 inmates, down
more than 150 from its peak just five months ago. In the face of that, the
CCC's corporate owners have threatened to shut down the facility if they
can't keep it closer to capacity. Already they've laid off 22 of the
facility's 140-odd workers and demoted 12 others. Extortion? That's a little
extreme, but we can't say it wasn't predicted. This will be an all-Montana
prison, we were told five years ago. Hints that it might be something else resulted
in a state law, passed in 1999, forbidding importation of prisoners. (Great
Falls tribune)
December 30, 2002
Montana voters overwhelmingly reject the idea of bringing out-of-state
convicts to the state's only private prison in Shelby, a new Gazette State
Poll shows. By more than a 3-to-1 margin, a poll of 625 registered Montana
voters said they oppose the notion of bringing out-of-state prisoners to the
Crossroads Correctional Center just outside the Hi-line town of Shelby, seat
of Toole County. Overall, 72 percent of those polled said they opposed the
idea, compared with 21 percent who said they supported it and 7 percent who
said they were not sure. Women rejected the idea slightly more than men, with
a full 75 percent disapproving of out-of-state inmates, compared with 69
percent of men. The telephone poll was conducted Dec. 17 through Dec. 19 by
Mason-Dixon Polling & Research Inc., a Washington, D.C., pollster. It has
a margin of error of plus or minus 4 percentage points. The statewide results
are opposite of those from an informal survey taken of only Toole County
residents earlier in December. (Billings Gazette)
December 19, 2002
Poll results show that 78 percent of registered voters in Toole county are
pulling for a change in state law that would allow Shelby's private prison to
house out-of-state inmates. The 1999 law forbidding out-of-state
inmates in Montana's private prisons was passed because residents living near
the state's first and only private prison, in Shelby, were uncomfortable with
the notion. With Crossroads Correctional Center struggling to fill its
512-bed prisons and stay afloat financially some three years later, officials
are exploring options that would require a reversal of that law.
"When we first brought the prison into Toole county, it had been stated
that we weren't going to have out-of-state prisoners, and the law was
changed, "Toole County Commissioner Allan Underdal
said Wednesday. With the residents' approval in hand, local officials
will visit with their legislators and work out the language of the proposed
bill. After hearing the results Wednesday, Rep. Edith J. Clark, R-Sweet
Grass, who sponsored the 1999 law, vowed to carry the proposed legislation in
the upcoming session. "We should step up to the plate and be a
partner with them and help them," Clark said. CCA, Crossroads'
out-of-state owner and operator, is a proven partner to the state and the
community and has received national accreditation, she said. Contracts
would require that Montana inmates have priority for bed space, he
said. "The idea is, if there's enough state prisoners and the
state needs the prison space, then the out-of-state
prisoners would be shipped back," Underdal
said. The 512-bed prison currently holds 340 inmates, compared to its
peak of 496 in late-July. The subsequent loss of revenue forced
Crossroads to lay off 22 workers, demote 12 others and cut its $4 million
payroll by $500,000. (Great Falls Tribune)
November 27, 2002
Toole
County residents are being asked if they support a proposed change to state
law that would allow out-of-state prisoners to be housed in the private
prison in Shelby. The 1999 law forbids
private prisons from doing so, mainly because Shelby's residents weren't
comfortable with the idea when it was proposed in 1998. Crossroads Correctional Center is the
state's first and only private prison. Owned and operated by Corrections
Corp. of America, at its peak there were 490 Montana inmates in the 512-bed
prison. Monday, that number was 351.
Officials are looking for other ways to keeping the prison open. In the first of two public meetings, about
15 prison, state, city and county officials met with about 80 local residents
Monday to discuss the prison. Another
public meeting will be held Tuesday, then Toole County registered voters will
receive a mail-in poll explaining the proposal and seeking their opinion. The
poll must be returned to the courthouse by Dec. 16. Rep. Edith J. Clark, R-Sweet Grass,
sponsored the 1999 law forbidding out-of-state prisoners. Monday, she told residents she will carry
the proposed legislation if the change fits the needs of the DOC, CCA and the
community. Shelby resident Ron Munson
thanked the Crossroads staff, and said they've done a good job when it comes
to safety. "Nobody's come knocking at my door at three in morning asking
for my car keys," he said. But
Munson said he opposes bringing in out-of-state prisoners because it would
send the wrong message to potential criminals. "I don't want to see
out-of-staters," Munson said. "Then we'll have no room. Montana will
be well-known for no punishment for the crime." (Great Falls
Tribune)
October
10, 2002
Officials
at the Crossroad Correctional Center laid off 22 employees and demoted 12
others Wednesday to make up for lost revenue caused by the private prison's
declining state inmate population. The cuts represent about $500,000 of the
500-bed center's $4 million payroll budget, and brings the total number of
employees to 119, Warden Jim McDonald said. A $9 million Department of Corrections
budget shortfall is prompting the release of up to 400 low-risk state inmates
across Montana, as well as the elimination or reduction of prison programs.
The Shelby prison, owned and operated by Corrections Corp. of America, is
housing 380 inmates, about 40 fewer than last month, McDonald said. Shelby
officials said they are working hard to find ways to increase the inmate
population so they can bring some of the laid-off workers back. (Great Falls
Tribune)
September
28, 2002
The
Martz administration is committed to keeping the private prison in Shelby
open, but the prison could face tough times in the coming months, including
layoffs, Corrections Director Bill Slaughter said Thursday. "That's just
the state we find ourselves in," he said, referring to the state's
withering budget. "(Shelby) is not going to be immune to that. But we do
need that prison available." The Corrections Department plans to cut
costs by releasing 400 convicts from prison within the next month, shifting
them to community-based programs, including parole. "The only way we
cannot (overspend our budget) is to control our contract beds,"
Slaughter said. Shelby's Crossroads Correctional Center, which is owned and
operated by Corrections Corp. of America, has been housing about 420 inmates.
It can hold as many as 500. Last week, state corrections officials said they
plan to draw down the population at Shelby to save money. They said a
"worst-case scenario" could leave as few as 50 inmates at the
Shelby prison. That statement prompted CCA officials to say they might shut
down the prison if the population fell below a certain level. "We know
and they know there are going to be some tough times for them the next 24 to
36 months," he said. However, Slaughter emphasized that the state considers
the private prison to be a key segment of the state's prison system. The
state will need the beds in the future, when it can afford to pay for them,
and the Shelby prison has an excellent record, he said. The state also will
be considering other options that could route more prisoners to Crossroads,
such as allowing it to have in-state inmates that normally would be held in
county jails or out-of-state inmates. (Great Falls Tribune)
September
26, 2002
The
Martz administration promised Wednesday that it would do everything in its
power to prevent Shelby's privately owned prison from closing, Shelby Mayor
Larry Bonderud said. Bonderud
and other northcentral Montana officials met for 90 minutes at the Capitol
with Gov. Judy Martz and other administration officials to discuss the future
of the 500-bed Crossroads Correctional Center, owned by Corrections Corp. of
America. State corrections officials said earlier this week that they planned
to pull state inmates from the Shelby prison, as part of plans to cut
spending. CCA's president reacted by saying Crossroads might be closed if the
state reduces the inmate population much more at Shelby. But Wednesday, state
officials agreed to consider options to keep the Shelby prison's inmate
population at a level that would make it profitable for CCA, Bonderud said. "They want to sit down with CCA and
negotiate a bed number that keeps (the prison) viable," Bonderud said. Bonderud said
corrections officials also agreed to hold public hearings in Shelby within
the next 30 days to discuss the future of the prison and the option of
importing out-of-state inmates. State officials had warned CCA that the count
could reduced to as low as 50, as the state
shuffles inmate populations and releases some prisoners to address a multimillion-dollar
budget shortfall. Bonderud said options mentioned
at Wednesday's meeting include: Transferring to Shelby state prison inmates
who are waiting in county jails for placement in the state prison system. The
number of these inmates ranges from 80 to 160 at any given time, Bonderud said. Transferring to Shelby Montana inmates now
being held in federal prisons. Allowing the CCA-owned prison to accept
prisoners from outside Montana, which would require a change in state law. Bonderud noted that privately owned prisons are the only
prison facilities in the state that cannot accept inmates from outside the
state. Also at Wednesday's meeting were state Sens. Glenn Roush of Cut Bank
and Pete Ekegren of Choteau, state Rep. Edith
Clark, R-Sweet Grass, and Toole County Commissioner Allan Underdal.
(Great Falls Tribune)
September
25, 2002
The company running the private prison at Shelby has warned it may have to
close its doors if too many inmates are removed, but state corrections
officials said Tuesday they have little choice in dealing with a money
shortage. "It's not out intent to empty
Shelby," said Joe Williams, head of centralized services for the
Department of Corrections. However, he said, the agency must take some
of the 416 inmates from the Crossroads Correctional Center as a part of its
effort to reduce the number of prisoners behind bars and save money.
Room and board at the Shelby prison is more expensive than the state can
afford and inmates will be drawn from there as the department continues with
its plan to release about 400 inmates into community programs by the end of
October, Williams said. His comments came a day after John Ferguson,
president and chief executive officer for CCA, sounded alarms with Gov. Judy
Martz over the loss of more inmates from his company's prison. The
facility night have to close if the population drops
below 380 inmates, he told the governor in a meeting at the Capitol.
Although the state has never guaranteed how many inmates would be sent to the
500-bed prison, Ferguson said, the company built it with an understanding the
state would make greater use of it than it has. "We're getting to
the point where we have to decide whether to mothball it," he
said. Leslie Hafner, company spokeswoman, said state corrections
officials have warned the company that the Shelby prison could end up with as
few as 50 inmates. The population has hovered around 420, although it
was as high as 492 at one point, she said. Martz said she shared
Ferguson's concerns about the continued operation of the prison.
"We need to figure out some way to keep you viable," she
said. "We need to keep you here." Williams agreed and
that is why the administration is considering asking the 2003 Legislature for
a law change that would allow out-of-state inmates to be housed at Shelby so
the prison can operate in the black. Williams said about $6.7 million
of the department's money shortage is caused by having more inmates than was
expected when the budget was approved last year. Mike Mahoney, warden
at the Montana State Prison, said Corrections Corp. was told a worst-case
scenario would be only 50 inmates left at Crossroads. He said the state
has guaranteed to use half the capacity at the three regional prisons and has
to live up to that promise. But, he said, the state made no such
guarantee to CCA. (Great Falls Tribune)
September
13, 2002
Private prison bait-switch a sign of things to come? With legislators
in Helena for a few hours this afternoon, we'd like to call their attention
to the kind of issues they're going to be facing in four short months.
This past week, the head of the agency responsible for the state's prisoners
announced that he wants to import inmates form out of state to the private
prison in Shelby. Never mind that the 512-bed Crossroads Correctional
Center in Toole County, was allowed to open three years ago on condition that
it not house inmates at a private prison in Montana. Corrections
officials say a bill will be proposed in the 2003 legislative session to repeal
the ban. We hope legislators - and voters - remember what was promised
at the outset of the state's adventure in private penology. Now that
the north central Montana economy is hooked on having the private facility in
operation, the time is ripe for the old bait-and-switch. It's reality
because the state's income is lagging behind its outgo. That means
turning loose about 450 inmates. We won't even get into the propriety
of privatizing basic state functions such as corrections. That argument
was lost about five years ago. The larger point today is that this is
just one problem in one department. (Great Falls Tribune)
July 10, 2002
Squeezed between a swell of new prisoners and a shrinking budget, the state
Department of Corrections estimates it will have to release more than one
prisoner a day- or not imprison new inmates- over the next year to stay
within its budget. This spring as the state faced down a multimillion
dollar budget shortfall, the department, along with other state agencies,
voluntarily cut about 3 percent of its budget. Those cuts went into
effect last week and included shaving $2.63 per prisoner, per day from the
fee the department pays to the state's private prison in Shelby.
(Billings Gazette)
June 13, 2002
The
state Corrections Department is lowering the daily reimbursement to regional
and private prisons for housing state inmates, which will mean fewer
rehabilitation and education programs for some inmates. The state also is
reducing payments to the privately owned and operated Crossroads Correctional
Center in Shelby, which houses nearly 500 inmates. Jim MacDonald,
Crossroads warden, said it will be easier for the Shelby prison to absorb the
cuts because it has 500 inmates instead of the 150 housed at a regional jail.
The Shelby prison will continue to meet its contractual obligations to
provide certain education and treatment programs for inmates, he said.
(Billings Gazette)
June 11, 2002
The Corrections Department is cutting payments to regional and private
prisons that house state inmates, and that means fewer programs for some
inmates, law and correctional officials said Monday. The state is also
reducing payments to the privately owned and operated Crossroads Correctional
Center in Shelby. It houses nearly 500 inmates. Corrections
officials said the payment cuts should save the state about $878,000 over the
next year. Jim MacDonald, Crossroads warden, said it will be easier for
his prison to absorb the cut in state payments because it has 500 inmates
instead of the 150 housed at the regional jail. The Shelby prison will
continue to meet its contractual obligations to provide certain education and
treatment programs for inmates, he said Monday. It won't offer an
education class it had been trying to fill, but otherwise won't reduce
programs for inmates, MacDonald said. (Great Fall Tribune)
March 12, 2002
Sixty-five Montana convicts have sued the state over its prison system,
charging that it's illegal to hold them in regional and private prisons and
demanding that they be returned to the main state prison in Deer Lodge to
serve their time. The inmates say that at regional prisons and a
private facility, they don't get adequate required treatment, training or
medical care - programs long established at the Deer Lodge facility.
(Gazette State Bureau)
November 30, 1999
A dispute over prison policies regarding televisions escalated into a riot
involving 49 inmates. The incident was brought under control quickly with the
use of tear gas. Damages were limited.
Montana Legislature
June 30, 2010 The New West
The Western Governor’s Association meeting in
Whitefish, Mont., ended Tuesday, with the near half-million dollar cost of
the conference mostly paid for by sponsors that include corporations –British
Petroleum among them --- as well as trade associations and other special
interests. The event included a “Sunset Train Ride” paid for by Burlington
Northern Santa Fe Railway but which was “not an official WGA sponsored
event,” the agenda notes in small type. WGA chair Montana Gov. Brian
Schweitzer and the event’s communications director, Karen Dieke,
spun the concept that taxpayers didn’t have to pay for the three-day meeting
because of the generosity of sponsors. But high levels of mistrust of
politicians – and corporations like BP - shows we are not fooled by that sort
of thing anymore. It’s a simple idea. Little League parents know that if
Murphy’s Hardware sponsors a team, the kids’ caps and shirts are going to
display the Murphy’s Hardware logo. In the big leagues, corporate sponsors
might pay for a star athlete to wear their clothes or use their products
during TV interviews. The idea, of course, is to create a good impression for
the brand by linking it to the famous athlete in the public’s mind. (Until
the famous athlete’s wife tries to beat him senseless with a golf club, that
is.) Those kinds of sponsorships are meant to make money, of course; hardly
worth a second thought. Campaign financing, not paying for confabs, is the
main issue when the discussion is about money’s influence in politics. $3.5
billion was spent by lobbyists in 2009, according to the Center for
Responsive Politics, and that’s a near-insurmountable arsenal. But there are
smaller, more incremental ways that corporate money finds its way into
political situations where where access to
politicians and influential leaders makes currying favor possible. The WGA
conference is one example. Reporter Charles Johnson of the Missoulian was
first to uncover the list of the WGA’s meeting sponsors. The 94 sponsors
include some active in business in Montana, including Burlington Northern
Santa Fe, ConocoPhillips, Corrections Corp. of America, ExxonMobil,
GlaxoSmithKline, MDU Resources Inc., NorthWestern
Energy, Qwest Communications and Arch Coal, which plans to mine Otter Creek
coal tract coal in southeastern Montana. Many are national corporations such
as BP America, Hewlett-Packard Co., Kraft Foods, Microsoft, Merck & Co.,
PepsiCo., Shell and US Airways. Other sponsors include the American Wind
Energy Association, Energy Foundation and Northwest Public Power Association.
In exchange for their sponsorships, representatives of corporations and other
groups are invited to attend a private reception with the governors Sunday
night. The WGA’s Dieke told Johnson that she wasn’t
“at liberty” to disclose which sponsors paid how much or for what, saying
their contributions are defined as “different levels” of sponsorship. In the
language of public relations, “not at liberty” means “I’ve been told not to
tell.” It’s common for both the givers and takers of money to downplay, or
even deny, that it buys influence. But with the huge financial stakes at play
for corporations that depend on the outcome of legislation, denial falls
flat. There’s no indication, yet, that anything untoward happened in
Whitefish among sponsors, speakers and governors. But there are obvious
interested parties among the sponsors. Two examples: 1. Jon Wellinghoff, chairman of the Federal Energy Regulatory
Commission, spoke about the future of energy generation in the west. WGA
sponsors included Northwest Public Power Association, a business trade group
for energy providers; the American Wind Energy Association, the same; and the
Energy Foundation, a nonprofit group which says its mission is “to advance
energy efficiency and renewable energy — new technologies that are essential
components of a clean energy future.” 2. A panel on conservation included the
president of REI, national park superintendents and a professor of geology.
The discussion was about “integrated efforts to improve the conservation of
water, wildlife and forest resources” among western states. Sponsors of the
meeting included Monsanto, a chemical company long accused of
anti-environment products and practices. The point here is that unprincipled
use of money in politics isn’t just about mammoth donors like ExxonMobile or PepsiCo, and it isn’t just about
campaigns, elections and scandals involving lobbyists. The insidious
practices that both donors and recipients have used to get voters to accept
pretense and hypocrisy until it seems normal – like the WGA’s horsemanure about taxpayers not having to pay for the
three-day meeting because of the generosity of sponsors – are also dangerous.
Millions of dollars of corporate money spent to influence public perception
fly under the radar when used in the subtle ways of “government relations”
departments. Look into how most political money is spent at FollowTheMoney, OpenSecrets,
and the Sunlight Foundation.
June 26, 2010 Missoulian
Major corporations and trade associations will pick up the lion's share of
the tab for putting on the Western Governors Association meeting in
Whitefish, which starts Sunday. Their sponsorships will cover $470,000 of the
three-day meeting's total cost of $550,000, which includes paying salaries of
some WGA staff working on the meeting. Registration fees paid by those
attending account for the remaining $80,000, said Karen Deike,
communications director for the Western Governors Association. The 94
sponsors include some active in business in Montana, including Burlington
Northern Santa Fe, ConocoPhillips, Corrections Corp. of America, ExxonMobil,
GlaxoSmithKline, MDU Resources Inc., NorthWestern
Energy, Qwest Communications and Arch Coal, which plans to mine Otter Creek
coal tract coal in southeastern Montana.
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 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.
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.
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.
October 13, 2007 Billings Gazette
Forty percent of the money raised this year by Democratic Gov. Brian
Schweitzer for his 2008 re-election campaign came from non-Montanans,
including slightly more than half of the $175,700 he raised in the past three
months, an analysis by the state Republican Party shows. Schweitzer's
sizeable chunk of cash from out-of-state donors this year - $281,000 of the
approximately $684,000 he has received from all contributors - prompted
criticism from the GOP on Friday. "The governor has spent the last three
years courting wealthy Democrat elites from all around the country,"
said Erik Iverson, chairman of the state Republican Party. "We've got a
governor who puts self-promotion and campaign fundraising ahead of doing
what's right for Montana." A spokesman for the state Democratic Party
said the GOP analysis conveniently omitted some key facts: That Schweitzer
had 1,333 in-state donors the past three months, or more than in any other
quarter this year, and that he has taken no money from political-action
committees. "These are small-dollar donors from all across the state who
recognize that Montana is on the move," said Harper Lawson. "They
want to make sure it stays that way. Their backing is a sign of enormous
grass-roots support for Governor Schweitzer." Lawson noted that 84
percent of the donors to the governor's campaign are Montanans. Schweitzer,
who's running for a second four-year term as governor next year, has no
opponent so far, from any political party. He has been raising money for his
re-election campaign since last year. Nonresidents contributing to statewide
campaigns in Montana is not unusual, particularly when it involves candidates
for Congress. Relatively large amounts of out-of-state money going to
gubernatorial candidates, however, is not as common. Schweitzer has traveled
out of state many times during his nearly three years as governor, to attend
political events, fundraisers, conferences and speaking engagements. He's
also the finance chairman of the Democratic Governors Association, a job that
has taken him out of state for fundraising and political strategizing events.
He went to the Kentucky Derby in Louisville, Ky., this spring for a
Democratic Governors Association meeting. Here's a summary of information
from the GOP analysis of Schweitzer's fundraising: • Of Schweitzer's $684,000
raised this year, about 59 percent came from Montanans, while the remainder
came from nonresidents. • Nonresident donors tended to give larger amounts,
averaging $420 per donation. The maximum allowed gift from any one donor is
$500 per election cycle. Money from Montana residents averaged $118 per
donation. • About one of every six donations, or 16 percent, came from a
nonresident. • In the past three months, Schweitzer had donors from 26 states
other than Montana. Behind Montana, the states providing the most money for
his campaign were California, Washington, Colorado, Tennessee and Texas. The
Republican Party also provided a list of the more than 200 nonresident
individuals who donated to Schweitzer in the past three months, culled from
campaign finance records. They include utility executives, health insurance
executives, radio personality Casey Kasem of Los
Angeles, college professors, executives from Qwest and Verizon telephone
companies, physicians, numerous attorneys and several executives from
Corrections Corp. of America, the Tennessee private-prison firm that owns a
facility near Shelby.
October 5, 2007 AP
Gov. Brian Schweitzer, so far unopposed for re-election, continues to sock
away campaign money in case a challenger steps forward. Schweitzer reported
raising $175,000 this quarter, for a total of more than $750,000 this
election cycle. The Democrat reported having just over $452,000 in the bank.
A Republican who stepped into the race would start in a big campaign
fundraising hole. The GOP remains undaunted, however, saying a Republican
candidate could catch up. The governor says 84% of the campaign's more than
5,000 contributions came from Montanans. The average donation was just over
$140. A number of the largest donations came from out-of-state donors in
states ranging from New York to California. Executives with companies such as
Corrections Corporation of America, which runs a private prison in Montana,
and United Healthcare were among the donors giving the maximum $500 allowed
by Montana campaign finance law. Schweitzer, a Democrat, has vowed he will
not take money from political action committees.
March 3, 2006 KPAX
Attorney General Mike McGrath says the state does not need to undergo
privatization review, before awarding a contract for a privately run
methamphetamine treatment prison. The M-E-A--M-F-T, a union representing many
state employees, argued the meth facility duplicates drug treatment programs
already administered by the state, and is subject to a review for privatizing
those services. The Department of Corrections argued the treatment prison is
a new program, was not replacing services already offered, and thus was not
subject to the review. Today's opinion by the attorney general supports that
view. Corrections spokesman Bob Anez says a
privatization review would have set back department plans to award a contract
for the private treatment prison in mid-March. He says the agency now remains
on schedule to have it open next year.
November 17, 2005 Independent Record
A proposal to expand a privately run prison in Shelby to relieve overcrowding
was panned Wednesday by a number of lawmakers who said they could not support
further privatization of the state's prison system. A similar idea was
floated during the 2005 Legislature as one of several options to deal with
the state's rapidly rising inmate population, but was passed over by a
corrections subcommittee. Nashville-based Corrections Corp. of America, which
runs the 512-bed Shelby prison, said it could complete the expansion in about
a year, although it would need a license from the state to fill the facility.
No cost has yet been calculated, said Tony Grande, vice president of state
customer relations. Several council members, who are appointed by the
governor, said they could not support such a proposal and advocated for
expansion in other areas, such as community corrections and minimum security
facilities, to ease overcrowding. ''I think we need to look at other options
and where we want to have more people and the fact that we have so many
prisoners who are not violent offenders,'' Rep. Gail Gutsche,
D-Missoula, said. Sen. Jim Shockley, R-Victor, said ''we need more
less-secure facilities at a cheaper price'' and suggested exploring
development of a 36,000-acre ranch used by inmates at the prison in Deer
Lodge before expanding private operations.
August 5, 2005 Billings Gazette
Democratic Gov. Brian Schweitzer's office ended up with about $96,000 left
over after paying bills from the winter ball celebrating his inauguration,
according to a report released Friday and promptly criticized by the Montana
Republican Party. Corporate donations provided most of the nearly $365,000
available for the Helena ball, held Feb. 12 at a cost of some $268,000. At
the next level, $10,000, donors were Fast Enterprises, which sells computer
software to revenue departments; Washington Corps, the conglomerate with Missoula
industrialist Dennis Washington at the helm; the Missoula law firm of Datsopoulous, MacDonald & Lind; energy companies NorthWestern and Pennsylvania Power & Light; BNSF
Railway; prison operator Corrections Corporation of America; Plum Creek
Marketing Inc., affiliated with Plum Creek Timber Co.; petroleum company
Encore Operating LP; Bresnan Communications; and the Westmoreland and
Kennecott coal companies.
April 17, 2003
Political
promises never are ironclad - Thursday, April 17, 2003 SUMMARY: No
out-of-state inmates? Well, they really meant it at the time. Now
sitting on the governor's desk is a bill that accomplishes two things, one of
which is useful. House Bill 451 will effectively repeal the law barring
the private prison in Shelby from filling its cells with inmates imported
from other states. That's not the useful part. Quite unintentionally,
this bill also gives Montanans a helpful way to know which promises
politicians can be trusted to keep. That part will come in handy. If you've
followed this issue, you know that out-of-state inmates were the
make-or-break issue when the Legislature approved construction of the state's
first private, for-profit prison. Montanans weren't altogether comfortable
with the idea of prison as a business, but it was offered as an economical
way to expand prison capacity. Awful experiences at private prisons elsewhere
in the country had convinced Montanans that this should not become the last,
best dumping ground for other states' riffraff. So, lawmakers approved
the prison, but made a big deal about promising it would be used exclusively
for Montana inmates - no out-of-state criminals, ever. This was fine with the
company building the prison, Corrections Corp. of America; it said it didn't
need or want to import inmates. When questions arose later about the strength
of the prohibition written into the law, the Legislature rewrote the
inmate-import ban in 1999 to make it ironclad. Well, not really. In the
end, there's no such thing as an ironclad promise from a politician. For one
thing, politics is all about expediency. Think situational ethics on a
massive scale. For another, future Legislatures and governors aren't legally
bound to honor the promises of their predecessors. Today, it's
convenient for the state officials, who also once promised to crack down on
crime, to set prison inmates free. It's cheaper than keeping them locked up.
Early release frees up cells in Deer Lodge, meaning the state farms out fewer
inmates to the private prison in Shelby, cutting the private prison's
revenues. Suddenly, the desire to keep the private prison in business
outweighs promises made to you. Never mind the fact that the reason we went
along with the private prison in the first place is that we needed more cells
in which to lock up the kind of criminals we're now setting free. Of
the very best, most honorable politicians, you can trust that they believe
what they say when they say it. But don't bank on their promises in the
long-run. HB451 is proof that you can't. (Missoulian)
September 20, 2002
About 60 convicts have left prison since July as part of a state Department
of Corrections plan to cut costs by releasing prisoners, a department
official said. The department hopes to free 150 convicts by the end of
this month and up to 400 by the end of October. (Gazette State Bureau)
September 9, 2002
Corrections officials said Monday they will ask the 2003 Legislature to allow
the state's only private prison near Shelby to take prisoners from other
states in order to remain profitable. The request would require lawmakers to
repeal the state's ban on housing out-of-state inmates at any private prison
in Montana. That restriction was a condition demanded by the previous
administration when the 1997 Legislature first authorized private prisons in
the state. "It's not something I want to see happen, but I think it's a
reality," Bill Slaughter, director of the Department of Corrections,
told the Legislature's Interim Law and Justice Committee. Corrections
officials said the legislation would be brought by either the department or
requested on behalf of Corrections Corp. of America, the company that
operates the Crossroads Correctional Center in Shelby. Some members of the
committee seemed skeptical and surprised the proposition. "I think
people in north-central Montana will have a lot to say about it," said
Senate Minority Leader Steve Doherty, D-Great Falls. "Did we tell CCA
that we were going to ensure they remain profitable?" But Slaughter
warned that if Crossroads loses a significant number of state prisoners, it
would have trouble making a profit. "Can we afford to let a private
entity like CCA go belly-up, and then need them a few months down the
road?" Slaughter said. "I'm not doing it for CCA," Slaughter
said. "I'm doing it for Montana." Slaughter acknowledged the
proposal will be controversial. In 1999, the Legislature passed a bill
closing what it said was a loophole that would have allowed Crossroads to
house federal prisoners from other states. (AP)
Montana Corrections Department
July 5, 2011 Independent Record
Mike Mahoney, Montana State Prison’s warden since 1995, is retiring from the
state next month and taking a job as assistant warden at a private prison in
Shelby. “I still feel a calling to the corrections field and working in an
institutional environment,” said Mahoney, who’s retiring after 31 years with
the state, including 28 years in corrections. “I have the time in for
retirement with the state of Montana, and an opportunity for me to have a
second career.” Mahoney, 57, announced his retirement Tuesday. He’ll leave
the state job Aug. 12 and start a month later as assistant warden at
Crossroads Correctional Center in Shelby, the state’s only operating private
prison. Crossroads, opened in 1999, has 664 beds and houses state and federal
prisoners. It’s owned by Corrections Corp. of America of Nashville, Tenn.
October 9, 2009 The Billings Gazette
The Montana Supreme Court has ruled a trial is needed in the case of a
former Park County man who sued the state and county after he was hurt in the
crash of an inmate transport van. The decision overturned a November 2007
District Court ruling granting summary judgment to the state and county,
which would have barred Jaydon Paull from further pursuing his lawsuit. The
accident occurred near Dillon in March 2003 as Paull was being transported
back to Montana from Florida for a probation revocation hearing. The
governments had argued they could not be held liable for the actions of the
inmate transport company and its employees. The company, American
Extraditions, did not have insurance and folded after the crash, which killed
one of the company's drivers. In its ruling issued Sept. 29 but not publicly
posted until this week, the Montana Supreme Court ruled 5-2 that prisoner
transportation was "inherently dangerous," making it an exception
to the general rule that contractors are not liable for actions of their
independent contractors. "Here, while the injury to the plaintiff did
not occur as a result of the typical unreasonable or unique risks inherent in
prisoner transport - such as attempted escape or assault by prisoners - it
arguably occurred in this case as a result of the failure of the state or the
county to take any precaution whatsoever to provide for the safe and humane transport
of prisoners," Chief Justice Mike McGrath wrote for the court. "I
look forward to going ahead with this case," said Courtney Lawellen of Livingston, Paull's attorney. "I'm very
pleased with the court's ruling in that it found that prisoners being transported
interstate have some unique rights." Kevin O'Brien, a spokesman with the
attorney general's office, said Friday that state attorneys would not comment
on an ongoing case. Steven Milch of Billings, the attorney for Park County,
did not immediately return a phone call seeking comment. Paull filed a
lawsuit over the way he was treated on the nine-day trip to Montana. His
complaint alleges that when the van reached southwestern Montana on March 5,
2003, the prisoners had not been allowed a bathroom break for several hours
and that the drivers told them to urinate into plastic cups or water bottles.
The lawsuit alleges that as they did so, the American Extraditions driver was
watching them and laughing while swerving and trying to cause them to spill urine
on themselves. His lawsuit claims that the driver lost control of the van and
it rolled several times, killing the other driver and injuring Paull. The
high court also ruled the state had a duty to exercise ordinary care in
returning Paull from Florida to answer a probation revocation proceeding and
that American Extraditions was acting as the state's agent in transporting
Paull. "Whether there were acts or omissions of (American Extraditions)
that caused injury to Paull for which the state or county may be held liable
will have to be determined by further proceedings in the District
Court," McGrath wrote. Justice Jim Rice issued a strongly worded
dissent, in which he argued that the Supreme Court declared that the
transportation of prisoners was an inherently dangerous activity
"without citing any precedential authority." He also argued that
the "inherently dangerous" exception applies only when the work
itself is dangerous, even when skillfully employed. "The court's
decision to the contrary - that work can be considered 'dangerous' by
assuming it will be negligently performed - is contrary to the purpose of the
exception and the reasons underlying the rule." Rice added "...the
court's conclusion that the risk of driver misconduct is an inherent danger arising
from the enterprise of prisoner transportation for which the employer should
have known and taken precautions is simply untenable."
February 5, 2003
The state's only private prison is losing money and needs to bring in
out-of-state inmates to make ends meet, Corrections Department and prison
officials told the House Judiciary Committee on Tuesday. " Crossroads
Correctional Center is a business," said Allan Underdal,
a Toole County commissioner. Rep. Edith Clark, R-Sweetgrass, has proposed
allowing the Shelby private prison to take out-of-state convicts. Her House
Bill 451 would reverse the section of Montana's 1999 private prison law -
that Clark helped get on the books - that bars out-of-state prisoners. The
512-bed private prison opened in 1999. At the time, Warden Jim MacDonald
said, the company didn't think it would need out-of-state inmates because
Montana 's prison system was growing fast. It appeared that the Shelby prison
would be full in a matter of months, he said. The prison had its first major
problem earlier this month when a 20-year-old inmate serving time for bad
checks was beaten to death in the prison gymnasium by another inmate.
Although only one person spoke against the bill, a recent poll suggests that
the overwhelming majority of Montanans do not support the idea of allowing
out-of-state inmates. Betty Whiting, a lobbyist for the Montana Association
of Churches, offered the lone voice of dissent. "We're opposed to
private prisons," she said. "We the people should be more
responsible for our prisoners." (Billings Gazette)
October 18, 2002
Montana's Corrections Department will ask legislators next session for
permission to accept out-of-state inmates in private prisons, Director Bill
Slaughter said Thursday. "They didn't want us to draw the numbers
down so much we'd lose the facilities," Slaughter said. Last
month, the company running the private prison in Shelby warned state
officials that it might have to close down if too many state inmates were
pulled out. Slaughter said legislation could be drafted by Corrections
Corp. of America, which runs Shelby's Crossroads Correctional Center.
(Great Falls Tribune)
Nexus Correctional Program
Lewiston, Montana
Community Counseling and Correctional Services
August 27, 2010 Great Falls Tribune
A state inmate who escaped Wednesday in Great Falls was captured at about 8
p.m. Thursday east of Sunburst and south of the Sweet Grass Hills, according
to an official for U.S. Customs and Border Protection. Supervisor Mike Emge said Havaii
"Kai" Akane was walking along a road
about 17 miles east of Sunburst toward the Montana-Canadian border when a
passer-by called him in as a suspicious person. "Even though he was 5
miles south, he would have had a real long climb," Emge
said. Border Patrol agents from the Sweetgrass station responded to the
report and questioned the man, who they determined was Akane.
He was taken into custody without incident, Emge
said. Akane, 32, was turned over to the Toole
County Sheriff's Office Thursday night, and will be transferred to Department
of Corrections custody, Emge said. He added that Akane likely won't face federal charges because he did
not attempt to cross the border. Akane escaped
Wednesday from the custody of the Nexus treatment center during a routine
change of transport at the Great Falls Prerelease Center on 15th Street
North. Akane fled unshackled as two of a group of
five inmates from the Lewistown drug rehabilitation facility were being
transferred to another bus bound for Montana State Prison in Deer Lodge.
August 26, 2010 Great Falls Tribune
The Great Falls Police Department is pursuing a registered violent offender
who escaped mid-transport Wednesday from the custody of the Nexus
Methamphetamine Treatment Center in Lewistown. Havaii
Kyana "Kai" Akane, 32, escaped from a
Nexus transport bus in Great Falls while en route
to the Montana State Prison in Deer Lodge. Akane
escaped near the Great Falls Prerelease Center at 1019 15th St. N. at about
12:15 p.m. when he was left unattended and without restraints during an
exchange of shackles, police said. According to representatives from
Community, Counseling and Correctional Services, Inc. of Butte, which owns
the Nexus facility, Akane was with a group of
inmates who were supposed to be transferred to another bus owned by CCCS. Akane was one of five inmates from Lewistown. Three were
to be dropped off at the prerelease center and two others, including Akane, were to go to Deer Lodge. Police confirmed that Akane's last known address was 622 27th St. N. as of July
15. On Wednesday, police found an idling car, which had been reported stolen
after Akane's escape, near that residence, which he
shared with his fiancee. K-9 units searched the
apartment and a nearby storage unit, where the dogs seemed to pick up a scent
but were unable to find Akane.
July 15, 2007 Billings Gazette
A man with Billings ties escaped from the Nexus meth treatment center in
Lewistown Friday. Christopher Andrew Markham, 22, was last seen around 10
a.m. Friday and is believed to have escaped shortly after that. He is
described as Caucasian, 5'6" tall and 140 pounds. He has brown hair
which has been shaved. An announcement from Lewistown Police Department
states that Markham is wanted by Montana State Prison. People who see Markham
are encouraged not to approach him, but should contact local law enforcement.
According to Department of Correction records, Markham was convicted of
felony theft and probation violation in Yellowstone County last December.
Judge Todd Baugh gave Markham a deferred sentence on the theft and a 36-month
prison sentence on the probation violation. The Nexus Correctional Program
opened in early June and is a nine-month treatment program for male meth
addicts convicted of crimes. The $10 million methamphetamine treatment center
was built and is operated by Community Counseling and Correctional Services
of Butte under a contract with the state. It was expected to be at
full-capacity by late July.
Swan
Valley Youth Academy
Swan Valley, Montana
Cornerstone Programs Corporation
July 29, 2007 Dallas Morning News
Executives of the Colorado-based Cornerstone Programs Corp., which
manages the Garza County Regional Juvenile Center in West Texas, have a
history of involvement in troubled juvenile facilities in other states.
Cornerstone closed its Swan Valley Youth Academy in 2006 after a Montana
State Department of Public Health and Human Services investigation found 19
violations, including neglect and failure to report child abuse and an
attempted suicide. "Intake process was particularly harmful to youth,
and many have been made to vomit due to excessive exercise and drinking large
amounts of water," Montana officials wrote in their findings. According
to Montana officials, the state and Cornerstone had developed a corrective
plan to keep the facility open. "There was a number of charges of abuse
filed against the director of the program and the second in charge,"
said Cornerstone chief executive Joseph Newman. The bad press hurt business
and so it closed, he said. Mr. Newman said state officials later cleared them
of all the abuse charges, but Montana officials said they had no record of
that. In Texas, Cornerstone's Garza facility has been put under corrective
action plans to improve staff training, documenting grievances and group
therapy sessions. But the company has hired a new director and added new
staff to Garza, which it began managing in 2003. In 2005, a 17-year-old
inmate at the facility became paralyzed after falling on his head in an
attempt to do a back flip off a table. A lawsuit by his family against the
facility, settled in 2006, alleged that a guard not only failed to prevent
the stunt, but challenged the youth to attempt it. The officer was fired
after the incident. The Garza County facility consistently has received
positive reviews by the Texas Youth Commission. "The Garza County
Regional Juvenile Center is an exemplary program," a TYC monitor wrote
in the facility's 2006 contract renewal evaluation – the same year Swan Valley
closed. Cornerstone was founded in October 1998 by Mr. Newman and board
chairman Jane O'Shaughnessy, about six months after another company they
operated ran into trouble in Colorado. That other company, called Rebound,
operated the High Plains Youth Center in Brush, Colo., which housed juvenile
offenders from around the country. In December 1995, a University of Illinois
at Chicago psychologist hired by the state's Department of Children and
Family Services issued a damning report on High Plains, and the agency later
began removing its youth from the juvenile prison. "Unit staffing
practices appear to be a numbers game where management attempts to balance
the competing pressures of safety and profit," wrote Dr. Ronald
Davidson, a faculty member in the university's psychiatry department. The
facility also had a "consistent and disturbing pattern of violence,
sexual abuse, clinical malpractice and administrative incompetence at every
level of the program." A Human Rights Watch report later found that High
Plains "fell short of reasonable, even minimal, performance."
Colorado officials closed High Plains in 1998 after a 13-year-old inmate from
Utah committed suicide and a state investigation found widespread problems
with physical and sexual abuse. State officials also had uncovered problems
at other Rebound facilities in Colorado. Rebound's nonprofit Adventures in
Change program did not meet requirements to be licensed for drug and alcohol
treatment nor meet "acceptable standards for habitation," according
to a 1996 state audit. Auditors said the services, such as education, family
counseling, vocational training and employment, "are not routinely
provided." In his resignation letter as the facility's clinical
coordinator, Paul Schmitz wrote: "This is no longer a professional
treatment environment ... and is not supported by the company as such."
In 1997, Florida officials severed the state's contract with Rebound to
operate the Cypress Creek juvenile detention facility after repeated
problems, including reports of disturbances that led to the arrests of
several inmates for inciting a riot. Rebound also had operated in Maryland,
where it ran the Charles H. Hickey Jr. School briefly in the early 1990s. Mr.
Newman was the deputy secretary of Maryland's Department of Juvenile Services
from 1992 to 1994, according to the state. He joined Rebound in 1995. The
Hickey contract ended in 1993 after dozens of escapes, cases of alleged abuse
and other policy violations. Dr. Davidson, the Illinois psychologist, said
the past performance of Cornerstone and Rebound should raise concerns.
"Anyone who had bothered to check the record of this corporation in
Colorado and Florida and Maryland ..... would have easily discovered a
troubling history of incompetence and fecklessness," he said.
April 22, 2002
The Denver company that operates the Swan Valley Youth Academy wants to be
able to draw clients from any state to stay on solid financial footing.
Cornerstone Programs Corp. was originally
authorized to recruit youths just from Montana. But just over a year
ago, the company's lease with the Department of Natural Resources and
Conservation was amended to allow recruitment of troubled youths from a
five-state area around Montana. Now, declining enrollment at the
campus-like facility north of Condon has Cornerstone requesting the ability
to recruit youths from any state. (Billings Gazette)
Two Rivers Detention Center
Hardin, Montana
American Police Force, CEC (bought out CiviGenics),
Municipal Capital Markets
The Rainmakers Banking on private prisons in the fleecing of small-town
America. By Beau Hodai (Click here)
The Strange Fruit of Desperation: How con men and paranoiacs learned to love
the Hardin huskow.
By Beau Hodai (Click here)
PCI and Prison Legal News help uncover the background of APF (Click here)
Prison Legal News expose (Click here)
Oct 12, 2018 billingsgazette.com
Owners of Hardin prison push
back on Big Horn County's jail bid campaign
Representatives for the empty Two Rivers Detention Facility in Hardin say
that county officials have unfairly maligned the prison during a bid to build
its own separate jail. Jeffrey McDowell, director of the Two Rivers
Authority, submitted a guest column to The Gazette saying that Big Horn
County officials have used "empty rhetoric" to justify expanding
its own jail and not using the Two Rivers facility. Jon Matovich,
who chairs the Two Rivers advisory board, said the rebuttal was more about
rebutting statements made by the county and not to court the county to move
in. "All we're doing is putting out information that is correct and not
false about the facility," he said. "We're not pushing
anything." Big Horn County is campaigning to get voters to approve a
$12.3 million jail expansion at the courthouse building. Built to handle
about 35 inmates, Undersheriff Mike Fuss has said they hold as many as 60 at
times. He suggested that if they had to take inmates to another facility, it
would likely be out of state. "I can't even think of a place we can take
them right now in Montana," Fuss said during a Sept. 5 tour of the
current county jail. One of the top questions the county gets is about using
the vacant Two Rivers building. Through interviews and a website set up for
the campaign, Big Horn County officials say that Two Rivers is too big and
too expensive to operate. Two Rivers, which was built in 2007, has a capacity
of 464 beds. They've been empty for all but about one year, as the private
regional jail has suffered one setback after another. In his letter, McDowell
said that if the county would use Two Rivers and "sublet" the
additional beds to others, that "would pay for the whole
operation." The county has claimed that it would need $580,000 more per
year to run Two Rivers than it would cost to run its own expanded jail.
McDowell disputed this. "Further, as has been noted above, the county
could fund the entire operation with revenue from leasing surplus beds,"
McDowell wrote. He also dismissed claims by the county that the Two Rivers
facility doesn't meet the proper jail standards. McDowell said that the
facility was build to American Correctional
Association standards. Ken Keller, the former warden, said in 2015 that they
applied for ACA accreditation, but it's unclear if that was achieved. The
complaint about Two Rivers' standards has been echoed by multiple county
sheriffs who have examined but declined to use Two Rivers to alleviate
overcrowding. For its part, Big Horn County is relying on its 2014 report
that examined jail options. Mark Goldman, consulting for the National
Institute of Corrections, authored the report and said that Two Rivers would
be staff intensive and inefficient for the needs of Big Horn County. One
standard often pointed to is the amount of daylight available to inmates.
"There's a rec room that has natural lighting in it," Matovich said. "There are standards that are
required, but none of them are saying they're mandatory." According to
Goldman's report for Big Horn County, the daylight issue extends to the
inmates' cells, which have no windows. The report cites a state standard that
requires this. "The 'history' of the facility has less to do with its
intended use and more to do with a lot of obstructionist politics,"
McDowell wrote in his letter. The Two Rivers Authority issued $27 million in
bonds to build the prison. Almost immediately, state and county officials
declined to use it for their inmates. And because repayment for the bond debt
relied solely on revenue from housing inmates, the bonds went into default
and the prison collected a massive debt. In one attempt to fill the prison,
Hardin once voted to try and get Guantanamo Bay detainees housed there. Two
Rivers courted a secretive California security contractor who made big
promises but eventually ended up in court with significant debts. A private
prison company, Emerald Correctional Management, ran Two Rivers for a year by
housing inmates mostly from the Bureau of Indian Affairs. The company pulled
out in September 2016. Most recently, the BIA has said it's working to lease
Two Rivers directly. The BIA repeatedly pushed back deadlines for completion
during the past two years. Muskovich, the Two
Rivers board chairman, said that the BIA deal is still in the works. But the
facility's history, as well as the media coverage it has attracted, weighs on
the board. “We’re tired of being beat up by the media," he said.
"They all go base their information off of 'according to blah blah blah,
(and) here’s the information that was said on why we can’t use that.’”
Dec 21, 2016 bighorncountynews.com
Emerald awaits BIA contract for Two Rivers Detention Facility
While a contract between the Bureau of Indian Affairs and Emerald
Correctional Management has yet to be signed – leaving the Emerald-managed
Two Rivers Detention Facility with zero prisoners as of January – both
parties agree that it will be finalized. In an interview last Wednesday,
Emerald Corrections Senior Warden Michael Porter said company officials are
in contact with the BIA on a daily basis. The 464-bed, $27 million facility,
which has the capacity to employ 150 people, is currently down to six
corrections officers. To break even from an economic standpoint, the facility
requires 250 detainees – a number they acquired from 10 tribes and seven
states during the building’s peak in July 2015. “There are people waiting to
be brought to this facility,” Porter said. “We want to be here for the
community.” In November, Jason Thompson, assistant director for the BIA’s
Office of Justice Services, said the contract between his organization and
Two Rivers should be renewed quickly, though he admitted to not having
control over the timeline. He said the BIA “ran up against the end of the
year” in approving a new contract and he expressed a desire not to repeat the
delay in the future. “The new contract is at the contracting office now,” he
said. “I don’t really know how long it will take, but it shouldn’t be too
much longer.” Like Porter, Thompson said tribal officials nationwide were
“pretty eager” to use the Two Rivers facility. Emerald’s individually-paced
Turning Point Program – targeted towards their Native demographic – is
designed to help detainees recover from problems including substance abuse
over the course of 6-9 months, while giving them opportunities to learn life
skills and express their culture. “The programs are designed to evaluate the
needs for the individual detainee,” Porter said, “and then they are placed in
a program that fits their needs.” One problem plaguing the facility is the
allegation that it doesn’t meet state or federal standards. In a June 2015
interview with Assistant Warden Ted Lewis, he said, “The facility meets American
Correctional Association (ACA) standards and is operated following the
standards they set. The facility also meets or exceeds all Montana
Association of Counties (MACo) standards for the
state.” The ACA not only certifies the facility, but also sets standards on
how inmates and employees are treated to ensure their safety. James Parkey of Corplan Corrections,
who has been involved with Two Rivers Detention Facility since its inception
in 2004, said, “ACA inspectors have recently looked at the facility and have
no problem with it.” The inspection, Porter added, was “very thorough.” While
a long process, he said, “The facility will be certified by the ACA this
year.” According to Two Rivers Warden Ken Keller, once the ACA accreditation
goes through, the facility will be the only such accredited facility in
Montana. “It will be pretty hard to argue that we don’t meet any standards,”
Keller said. An April-May 2014 report by 26-year veteran Contractor Mark
Goldman of the National Institute of Corrections entitled “Consideration of
Options for Incarcerating Big Horn County’s Inmates” identified various
“building-related problems” with the facility. The report was drafted with
the intention of helping the county decide whether to keep their current jail
– built in 1979, construct a new jail at an estimated cost of $10 million or
transport inmates to the Two Rivers facility at a cost of $68 per inmate per
day (the charge includes transportation and medical services). Using the
report figures, if the county were to house its daily average of 42 inmates
at Two Rivers, it would cost an estimated $1,042,440 per year. If an inmate
were to be injured in the facility, Two Rivers would be liable, not the
county. Concerns cited by Goldman – among others – include the absence of
natural light in housing units or program rooms, the belief that the
facility’s 24-bed dormitories were “too large and inappropriate” for local
inmates, and an alleged lack of regular supervision (according to facility
officials, detainees are observed every 30 minutes). The document also states
that, “reportedly”, the American Civil Liberties Union was advocating against
incarcerating inmates in the facility. In reality, ACLU has not studied the
Two Rivers facility, but the findings of their study of the Big Horn County
jail were released in a February 2015 report. At the time, the jail was
ranked by its inmates last among the 24-30 county jails surveyed in access to
natural light, satisfaction with food variety, plumbing and mold management.
Following the study report, former Undersheriff Bart Elliott said the county
was working with the organization to improve the jail’s living conditions.
County Commissioner George Real Bird III said the prevailing opinion among
county officials was that they should build a new jail. Within a decade, he
said, the cost of renting from Two Rivers would exceed the cost of
constructing a new building. The estimated cost for the facility’s
construction does not account for day-to- day operations. Thsi
cost was unavailable at press time. This year, he said,
the question of whether to build a new jail might be placed on the primary or
general election ballot. “I know that if something came down hard on us, like
the ACLU, I think we’d have to get the ball rolling,” he said, “but, as a
whole, I think we’re trying to hold it off as far as we can.” A second
report, entitled “Inspection and Familiarization” filed in December 2013 by
Correctional Consultant Patrick W. Keohane, showed a more positive picture of
the facility. In the report, following his inspection, Keohane stated the
building had been well-maintained despite being vacant since its 2007
construction (it opened in August 2014). As someone who served as chairperson
of “about 80 prison and jail audits through the United States and Mexico”, he
believed the area to be well-secure with effective medical facilities
(including an X-ray equipment room, dental treatment room and pharmacy). The
lack of natural light addressed in the other report, he stated, would be
provided by overhead lighting and probably wouldn’t “lessen the quality of
life” for detainees. “Since I have seen many jails and prisons throughout the
United States, my thoughts are that some other states, counties and cities
would jump to have a facility like this one,” he stated. “It appears to me
that this is such a waste to let such a fine facility stay empty.” At press
time, the Two Rivers facility has been operating without a BIA contract since
Nov. 1, 2015.
Apr 30, 2016 helenair.com
Lacking prisoners, Hardin jail closes again
BILLINGS -- The Two Rivers Regional Detention Center,
Hardin's troubled private prison, has suspended operations due to the lack of
inmates. Warden Ken Keller said that on April 13, they officially stopped
holding prisoners. Employees were sent home, and only Keller and his program
manager, Hope Keller, remain in the building. "There's two of us
here," Ken Keller said. "We're keeping the lights on and chugging
away." It's the latest setback in the facility's grim history. For
years, the 464-bed facility sat empty. Last fall, the Bureau of Indian
Affairs cut its contract with the prison, leaving Two Rivers without its main
source of inmates. By January, the prison had furloughed many of its
employees but continued to limp along with a couple dozen inmates. They came
from small contracts with individual American Indian tribes and with Williams
County, N.D. The prison gets paid on a per inmate, per day basis through
contracts. In the absence of full beds, debt has piled up on the facility,
reaching as much as $40 million in December. The outstanding debt threatens
to double the $27 million in bonds originally spent to build the facility.
Emerald Correction Management of Louisiana operates the jail, which is called
the Two Rivers Regional Detention Facility. The Two Rivers Authority, the
economic development arm of the city of Hardin, owns the building as a
separate entity. Without its main economic engine, the Two Rivers Authority
has operated at a substantial loss. In 2014, the authority had $97 in revenue
against $388,000 in expenses, according to city documents. “I really have
nothing of any value to add to this conversation,” said Jeff McDowell,
executive director of the Two Rivers Authority, before hanging up on a
reporter. While McDowell declined to comment, the Two Rivers Authority
website has a statement announcing the shutdown, which it deems temporary.
The statement also said that Emerald advised Two Rivers that it has responded
to negotiation moves by the BIA. It could take up to 90 days for a contract
to be awarded, according to the Two Rivers Authority's statement. McDowell
gives periodic updates to the Hardin Common Council regarding the prison. The
city has kept Two Rivers Authority afloat and paid out $582,595 from 2004 to
December 2015. About 45 percent of that money was paid before the jail opened
in mid-2007. Hardin finance officer Michelle Dyckman
said that because the building is owned by Two Rivers, it is tax exempt.
Officials from the prison have made appeals to county officials in Montana,
hoping that they will use the Two Rivers Detention Facility to ease county
jail overcrowding. So far, there has been no movement toward the private
facility. Additionally, Keller said that he's been working on other small
contracts. They recently finalized a deal with the Lummi Nation, which
brought small numbers of inmates to Hardin before the facility ceased
operation. As for the BIA contract, Keller said that it's still a waiting
game. "Nobody seems to be clear," he said. "We're working on things."
Officials from Emerald did not immediately respond to calls. Since Nov. 30,
the BIA has not responded to periodic questions from The Gazette about
contract negotiations.
Feb 4, 2016 billingsgazette.com
Officials from Two Rivers jail in Hardin make pitch to Yellowstone County
A guard employed by Emerald Correctional Management enters the Two Rivers
Regional Detention Center in Hardin in October 2014. Emerald recently took
over operations of the 464-bed jail that had sat empty since its 2007
construction. With about 500 inmates packed in Yellowstone County’s jail — a
space designed to house 286 — officials from the Two Rivers Regional
Detention Facility in Hardin came calling on Wednesday. For $68 a day per
inmate, Yellowstone County could send its prisoners to the Hardin jail, said
Mike Porter, a senior warden with Emerald Correctional Management, a
Louisiana-based company that contracted in 2014 with Two Rivers Authority in
Hardin to operate the jail. The Hardin jail, Porter said, would transport inmates
for court appearances, provide direct supervision of prisoners, offer video
conferencing and indemnify the county against liability. The 464-bed facility
also meets jail standards, he said. Porter, along with officials from Two
Rivers Authority, the economic development arm of Hardin, met with county
officials for about 45 minutes Wednesday morning to encourage Yellowstone
County to use the Two Rivers Regional Detention Facility. Yellowstone County
Commission Chairman Bill Kennedy, along with Kevan Bryan, finance director,
and Dan Schwarz, chief deputy attorney of the civil division, peppered Porter
and Authority officials with questions but made no commitments. Commissioners
John Ostlund and Jim Reno were in Great Falls
attending a Montana Association of Counties meeting. Sheriff Mike Linder, who
has opposed sending inmates to Hardin, was attending a coroner’s inquest on
Wednesday. Linder, who has toured the Hardin jail, has expressed concerns
about the building’s lack of natural lighting and its indirect supervision of
inmates. In addition, the sheriff has said that to house 100 inmates in
Hardin, it would cost the county at least $2.2 million a year, at $60 per day
per inmate, or $11 million over five years. Linder has said he believes it is
better to invest the money into building locally instead of spending it on
rent in a private jail in another county. Kennedy urged Hardin officials to
prepare a fact sheet and provide documents that address all of the issues
surrounding their jail, including incarceration standards and insurance. Big
Horn County Commissioner Sidney Fitzpatrick also attended the meeting. He
said his county has concerns similar to Yellowstone County’s about
contracting for inmate space. Yellowstone County, Kennedy said, keeps hearing
that the Hardin jail doesn’t meet standards and that MACo
will not insure the county if it sends its inmates to Hardin. Porter
responded that the jail complies with American Correctional Association
standards and also meets MACo standards, which he
said refer to Montana’s administrative rules. Requests from Emerald and the
Authority to meet with MACo officials, Porter said,
have received no response. Porter also said the company has insurance and
would indemnify the county against any liability. Bryan asked Porter to
provide a copy of the company’s insurance policy. Another knock against the
jail, Kennedy said, has been that it doesn’t provide enough natural light.
Porter said the standards regarding daylight apply to new construction, not
existing construction. If daylight was what it took to get a contract, the
jail would put in skylights, he said. Another issue involves inmates
Yellowstone County holds for the state Department of Corrections. The state
inmates include those who have been sentenced and are awaiting transportation
to prison and those on probation and parole violations. The jail recently had
about 100 state inmates. The county’s rate with the state was $76.94 per
inmate, but the 2015 Legislature cut the rate it pays to $69 per inmate.
Revenue the jail receives from the state and other jurisdictions to hold
inmates helps pay for operational costs. Yellowstone County officials
questioned why the Hardin jail didn’t contract directly with the state to
hold DOC inmates and whether it made sense for Yellowstone County to be the
middleman if it sent its state prisoners to Hardin. The Hardin jail, which
opened in 2007 and was built for $27 million by the Authority, the economic
development arm of Hardin, has sat mostly empty for various reasons including
insurance coverage, jail standards and jurisdictional issues over whether it
could house out-of-state inmates. The jail also has accrued a debt of about
$40 million. Under Emerald’s management, the Hardin jail had almost 250
inmates at one point, mostly through a contract with the federal Bureau of
Indian Affairs to house tribal inmates, and a contract with Williams County,
N.D., to house some of its prisoners. But the BIA contract ended last fall
when federal funding ceased and and the inmates
were removed. As of Sunday, the Hardin jail had 21 inmates, mostly from North
Dakota, said Jeff McDowell, the Authority’s executive director. Meanwhile,
Yellowstone County commissioners are considering a proposal from the sheriff
and finance director to build a new, 148-bed women’s unit using borrowed
funds and county reserves for an estimated $9.95 million. Last year, voters
rejected a six-mill levy request that would have raised $1.8 million a year
in taxes to help pay for a $7 million expansion to add a 100-bed women’s unit
and make other improvements.Montana: Please send
your inmates to us
May
19, 2014 billingsgazette Montana
A
private corrections company from Louisiana is starting to train guards - but
still doesn't have any inmates - for a jail in Hardin that has sat vacant
since it was built in 2007, company and town officials said Monday. Steve Afeman with Emerald Correctional Management said a warden
and other personnel have been hired and about 30 guards will be training
through the week at the 464-bed Two Rivers Detention Facility. The company
intends to solicit inmates from American Indian tribes, counties and the U.S.
Marshals Service, Afeman said. No agreements have
been reached, and Chief Deputy Rod Ostermiller with
the Marshals Service in Billings said he is not aware of any discussions
between his agency and the Lafayette, Louisiana-based company. The $27
million jail rose to notoriety in recent years after its backers failed to
get any contracts for inmates, prompting desperate Hardin officials at one to
point to offer to take in suspected terrorists held in Guantanamo Bay, Cuba.
A California man later duped officials with a grandiose plan to turn the jail
into a military training camp. The jail is owned by Hardin's economic
development agency, Two Rivers Authority. Emerald signed an operating
contract with the authority on May 6 to run the jail, Two Rivers Chairman Jon
Matovich said. Two Rivers would receive 50 cents
per day for every inmate under the terms of the deal, Matovich
said. "Everything is signed, the ball's in (Emerald's) court and they're
doing a great job," Matovich said.
"Anything that goes on at the facility from now on is Emerald's stuff.
As soon as they get their staff trained and get things rolling, I'm sure they
will have some inmates." Afeman said
representatives of Emerald planned to meet with leaders of tribes from
Wyoming, Montana and the Dakotas beginning Wednesday to gauge their interest.
Afeman said in April that the company had reached a
memorandum of understanding with the U.S. Bureau of Indian Affairs in which
the agency endorsed the company's plans. But on Monday, Afeman
said there was no agreement with the federal agency and that Emerald was
working directly with the tribes. A former employee of the Wyoming Department
of Corrections was hired as warden, Afeman said.
Kenneth Keller spent three decades with the state agency and in 2008 was
appointed warden of the Wyoming Honor Farm, a minimum security facility in
Riverton for inmates preparing to re-enter society.
pril 18, 2012 KTVQ
It took about five minutes for the Two Rivers Authority Board of
Commissioners to essentially decide the fate of a Hardin detention facility
which has been completed, and empty, since 2007. The board voted unanimously
Tuesday night to begin negotiations to hand the $26,000,000 Two Rivers
Detention Facility over to the bond holders who paid for the project. Board
chairman Bill Joseph told Q2 that following negotiations and the creation of
a document outlining the details of the transfer, the board will again vote
to hand over the facility. However, Joseph said he did not foresee anyone
raising an issue with releasing the detention facility. Joseph also noted the
board had done everything in their power to open the 464-bed facility since
it's construction. Currently, Joseph said the board was unaware of what plans
the bond holders have for the facility, but said they hope it results in
employment opportunities for the Hardin community, as initial estimates for
job production showed the facility would support 130 to 150 new jobs when
running at capacity.
April 6, 2012 AP
Hardin officials said Friday they are considering relinquishing control of a
$27 million jail that was built with the promise of spurring economic
development but instead became a source of frustration and embarrassment for
the southeastern Montana city. The 464-bed jail has sat vacant since it was
built five years ago under the direction of Hardin's Two Rivers Authority.
With no short-term prospects for finding inmates, Two Rivers Executive Director
Jeffrey McDowell said the title to the jail could be turned over to the
bondholders who financed the project. McDowell said bondholders "ran out
of patience" with the city's efforts to put the jail to use and want to
assume control over the 92,000-square-foot jail on 40 acres. A decision by
the authority's board could come next week, McDowell said. "They would
like to get the debt off their books, and rather than go through the
foreclosure process, they're asking us to simplify it by turning the title
back to them," McDowell said. The bondholders include four large money
managers and at least two individuals, according to McDowell. They are
represented by Mike Harling of Municipal Capital Markets Group Inc., a Texas
company that raises construction money for jails and other facilities.
Harling did not immediately return a call from The Associated Press seeking
comment. After looking for prisoners from Vermont to Alaska, local officials
became so desperate to put the jail to use they nearly turned it over to a
convicted con artist who promised to turn it into a military training camp.
They also sought unsuccessfully to house terrorism suspects being held by the
military at Guantanamo Bay. The jail was built at a time when state and local
governments didn't need additional jail space. Further hindering Hardin's
efforts were strained relations between city leaders and Gov. Brian
Schweitzer, whose administration said it had no use for the jail. The
privately operated facility defaulted on its bond in 2008, forcing
authorities to dip into the jail's construction loan to meet its debt
payments. The last of those payments was made in late 2008, McDowell said.
March 28, 2011 NPR
Private Prison Promises Leave Texas Towns In Trouble by John Burnett The
country with the highest incarceration rate in the world — the United States
— is supporting a $3 billion private prison industry. In Texas, where free
enterprise meets law and order, there are more for-profit prisons than any
other state. But because of a growing inmate shortage, some private jails
cannot fill empty cells, leaving some towns wishing they'd never gotten in
the prison business. It seemed like a good idea at the time when the west
Texas farming town of Littlefield borrowed $10 million and built the Bill
Clayton Detention Center in a cotton field south of town in 2000. The
charmless steel-and-cement-block buildings ringed with razor wire would
provide jobs to keep young people from moving to Lubbock or Dallas. For eight
years, the prison was a good employer. Idaho and Wyoming paid for prisoners
to serve time there. But two years ago, Idaho pulled out all of its contract
inmates because of a budget crunch at home. There was also a scandal
surrounding the suicide of an inmate. Shortly afterward, the for-profit
operator, GEO Group, gave notice that it was leaving, too. One hundred prison
jobs disappeared. The facility has been empty ever since. A Hard Sell
"Maybe ... he'll help us to find somebody," says Littlefield City
Manager Danny Davis good-naturedly when a reporter shows up for a tour. For
sale or contract: a 372-bed, medium-security prison with double security
fences, state-of-the-art control room, gymnasium, law library, classrooms and
five living pods. Davis opens the gray steel door to a barren cell with bunk
beds and stainless-steel furniture. "You can see the facility here.
[It's] pretty austere, but from what I understand from a prison standpoint,
it's better than most," he says, still trying to close the sale. For the
past two years, Littlefield has had to come up with $65,000 a month to pay
the note on the prison. That's $10 per resident of this little city. A
Resident Burden Is the empty prison a big white elephant for the city of
Littlefield? "Is it something we have that we'd rather not have? Well,
today that would probably be the case," Davis says. To avoid defaulting
on the loan, Littlefield has raised property taxes, increased water and sewer
fees, laid off city employees and held off buying a new police car. Still,
the city's bond rating has tanked. The village elders drinking coffee at the
White Kitchen cafe are not happy about the way things have turned out.
"It was never voted on by the citizens of Littlefield; [it] is stuck in
their craw," says Carl Enloe, retired from Atmos Energy. "They have
to pay for it. And the people who's got it going are all up and gone and they
left us... " "...Holdin' the bag!"
says Tommy Kelton, another Atmos retiree, completing the sentence. The
Declining Prison Population The same thing has happened to communities across
Texas. Once upon a time, it seems every small town wanted to be a prison
town. But the 20-year private prison building boom is over. Some prisons are
struggling outside Texas, too. Hardin, Mont., defaulted on its bond payments
after trying, so far unsuccessfully, to fill its 464-bed minimum security
prison. And a prison in Huerfano County, Colo., closed after Arizona pulled
out its 700 inmates. According to the Bureau of Justice Statistics, the total
correctional population in the United States is declining for the first time
in three decades. Among the reasons: The crime rate is falling, sentencing
alternatives mean fewer felons doing hard time and states everywhere are
slashing budgets. The Texas legislature, looking for budget cuts, is contemplating
shedding 2,000 contract prison beds. Statewide, more than half of all
privately operated county jail beds are empty, according to figures from the
Texas Commission on Jail Standards. "Too many times we've seen jails
that have got into it and tried to make it a profitable business to make
money off of it and they end up fallin' on their
face," says Shannon Herklotz, assistant
director of the commission. The packages look sweet. A town gets a new
detention center without costing the taxpayers anything. The private operator
finances, constructs and operates an oversized facility. The contract inmates
pay off the debt and generate extra revenue. The economic model works fine
until they can't find inmates. In Waco, McLennan County borrowed $49 million
to build an 816-bed jail and charge day rates for bunk space. But today
because of the convict shortage, the fortress east of town remains more than
half empty. The sheriff and county judge, once champions of the new jail, now
decline to comment on it. Former McLennan County Deputy Rick White, who
opposed the jail, had this to say about the prison developers who put the
deal together: "They get the corporations formed, they get the bonds
sold, they get the facility built, their money is front-loaded, they take their
money out. And then there's no reason for them to support the success of the
facility." Two of Texas' busiest private prison consultants — James Parkey and Herb Bristow — declined repeated requests for
interviews. The Inmate Market Private prison companies insist their future is
sunny. A spokesman for the GEO Group declined to speak about the Littlefield
prison, but he sent along a slew of press releases highlighting the company's
new inmate contracts and prison expansions across the country. Corrections
Corporation of America, the nation's largest private prison operator, says
the demand for its facilities remains strong, particularly for federal
immigration detainees. New Jersey-based Community Education Centers, which
has been pulling out of unprofitable jails across Texas, issued a statement
that "the current (jail) population fluctuation" is cyclical. One
of the places where CEC is cancelling its contract is Falls County, in
central Texas, where a for-profit jail addition is losing money. Now it's up
to Falls County Judge Steve Sharp to hustle up jailbirds: "If somebody
is out there charging $30 a day for an inmate, we need to charge $28. We
really don't have a choice of not filling those beds," he said. Another
place where they're desperate for inmates is Anson, the little town north of
Abilene, Texas, once famous for its no-dancing law. Today, Jones County owns
a brand-new $34 million prison and an $8 million county jail, both of which
sit empty. The prison developers made their money and left. Then the Texas
Department of Criminal Justice reneged on a contract to fill the new prison
with parole violators. The county's Public Facility Corporation that borrowed
the money to build the lockups owes $314,000 a month — with no paying
inmates. They've got a year's worth of bond service payments set aside before
county officials start to sweat. "The market has changed nationwide in
the last 18 months or two years. It's certainly a different picture than when
we started this project. And so we're continuing to work the problem,"
Jones County Judge Dale Spurgin says. Grayson
County, north of Dallas, said no to privatizing its jail. Two years ago, the
county was all set to build a $30 million, 750-bed behemoth twice as big as
was needed. But the public got queasy and county officials ultimately
scuttled the deal. "When you put the profit motive into a private jail,
by design, in order to increase your dollars, your revenues, your profits,
you need more folks in there and they need to stay longer," says Bill Magers, mayor of the county seat of Sherman, a leading
opponent. When the supply of prison beds exceeds the demand for prison beds,
there are beneficiaries. The overcrowded Harris County Jail in Houston, the
nation's third largest, farms out about 1,000 prisoners to private jails.
Littlefield and most other under-occupied facilities in Texas have all been
in touch with Houston. "It really is a buyer's market right now,
especially a county our size," says Capt. Robin Kinetsky,
who is in charge of inmate processing for the Harris County Sheriffs Department. "They're really wanting to get
our business. So, we're getting good deals." Nearby, disheveled and
unsmiling men are brought from a holding cell to stand before a booking
officer for their intake interviews. The detainees are wholly unaware that
they may soon become the newest commodities of the volatile inmate market.
Aarti Shahani contributed to this NPR News investigation and report.
June 23, 2010 Billings Gazette
Hardin’s economic development authority is patching broken pipes in the
city’s never-used Two Rivers Detention Center in hopes of finally landing a
contract for the 464-bed jail, the agency’s executive director said
Wednesday. Two Rivers Authority’s Jeff McDowell said pipes froze and burst in
about a dozen places when the heat was turned off temporarily last winter.
“Who wants to lease a facility that you can’t flush the toilets?” McDowell
said. “We’re trying to make it so if someone does want to move in there, it’s
essentially operational.” McDowell said the first leaking pipes in the jail —
discovered in December — were connected to the fire sprinklers. Those were
repaired for about $5,000 in January, he said. More leaks were discovered in
late spring. Several have yet to be fixed, and McDowell said the combined
price tag for all the repairs would be about $8,000. The burst pipes were
confined to administrative areas of the jail and caused no major damage to
the 92,000-square foot structure, said Two Rivers Authority acting president
Albert Peterson. The plumbing problems are the latest in a long sting of setbacks for the $27 million jail, which was
completed in 2007 and promoted as a means of jump-starting rural Hardin’s
struggling economy.
June 23, 2010 Independent
Record
When Gov. Brian Schweitzer met recently with leaders of Hardin and the city’s
mothballed, 464-bed jail, he got an unexpected surprise: an apology. “They
said, ‘You didn’t create our problem and you didn’t add to our problem,’” he
said this week. ‘We are here to apologize.’ ” Hardin Mayor Kim Hammond and
Jeff McDowell, executive director of Hardin’s Two Rivers Authority, which
owns the jail, offered their olive branch at a face-to-face meeting on June
12 in Billings. The Hardin leaders requested the sit-down. A little more than
two years ago, Hardin officials hosted a rally in the Montana Capitol with a
busload of school children accusing Schweitzer of trying to quash their plans
to fill the jail with out-of-jurisdiction inmates. Some students carried
signs reading “We’ve Been Schweitzerized. Was It As
Good For You Governor As It Was For Us?” Hardin’s economic development arm
built the jail as a way of drumming up jobs for the economically hard-pressed
area. Hardin has no need of a jail. The city has no police force and anyone
picked up in the city limits is housed in the Big Horn County Jail. Town
officials built the jail with no contracts in place to fill its 464 beds. Two
Rivers has since defaulted on the $27 million in revenue bonds sold to build
it. The jail has never opened. The jail’s recent history has been a curious
one. Last March, town officials voted to offer the empty jail as a place to
house terrorism detainees from Guantanamo Bay, Cuba. Federal officials nixed
that idea. Last September, an ex-con and Serbian immigrant going by the title
“Captain” Mike Hilton cut a deal with city leaders saying he would run the
jail, build a paramilitary training facility next door and even deliver food
to Hardin’s hungry. Hilton and his company, American Private Police Force,
were later exposed as phonies. Since then, Hardin has elected a new mayor and
the Two Rivers Authority has a new leader. Neither would return calls to Lee
Newspapers seeking comment about their apology to the governor. Schweitzer
had earlier looked into a plan to use the building to house Bureau of Indian
Affairs inmates. He said in a recent interview that he wasn’t sure he could
re-start those negotiations. But he did offer to help. “I said I would help
them brainstorm,” he said.
March 15, 2010 AP
The leader of the Crow Tribe said Monday the southeastern Montana tribe is
considering buying or leasing a long-vacant jail just outside the
reservation. The proposal to take over Hardin's Two Rivers Detention Center
remains in the planning stages, but Crow Chairman Cedric Black said talks are
under way between the tribe and city representatives. One potential use for
the dormant, 464-bed facility would be to remake it into a drug and alcohol
treatment center. Black Eagle said that was just one of several options on
the table. In recent years, the jail has been at the heart of a running feud
between Hardin and state corrections officials who say the facility is not
needed. With no inmate contracts despite years of aggressive marketing of the
jail, the $27 million economic development project has turned into an
embarrassment for rural Hardin - and a potential financial liability. City
officials two years ago rejected an earlier takeover proposal offered by the
Crow. The city saw that plan as a stealth attempt to annex part of Hardin,
which is about 45 miles east of Billings. In 2008, the jail went into default
on its bond payments. And last year, it was targeted by a California con
artist, Michael Hilton, who convinced the city he was backed by investors
eager to build a military training facility on the site. Hilton's scam fell
apart amid revelations about his criminal history, and since then the city
has been increasingly desperate to find inmates.
January 11, 2010 KULR 8
A Texas appraiser spent the day at the Hardin Jail in an attempt to
determine what the facility is worth. Board members with Two Rivers Authority
said the appraisal is required to get insurance on the facility. Ben Boothe,
an independent inspector from Texas traveled to Montana to do the appraisal.
Boothe has previously worked with Corplan
Corrections, the group that brought the jail to Hardin. He was suggested to
the TRA board because of his experience with facilities like the Hardin Jail.
He will be reimbursed for his travel expenses and paid $5,000 dollars. TRA
officials expect the results by the end of February. The $27 million dollar
jail was built in 2006 and paid for with private revenue bonds.
November 17, 2009 KULR 8
An apparent disconnect between state and local government could be a
leading factor in the ongoing struggle to fill the Hardin Detention Center,
along with a misleading feasibility study. The $27-million dollar Two Rivers
Detention Center in Hardin was completed in September 2007 to the surprise of
many state officials. Two Rivers Authority's website says in June 2004,
then-Governor Judy Martz held the first meeting in regard to the Hardin jail
at a Las Vegas airport with several people including the jail's architect
James Parkey with Corplan
Corrections. However, Martz said she barely remembers the meeting and that it
was a non-specific business pitch that she was not interested in. "My
administration had not one thing to do with this prison," said Martz.
"We never okayed anything, that would've been something that would've
had to go through the legislature. So, we had nothing to do with it
period." Martz's Corrections Director Bill Slaughter said he was
surprised to see Hardin moving forward with the detention center without
contracts from any federal, state or local agency. "They really started
construction without a population identified to go in there," said
Slaughter. Montana law gives communities some flexibility for building a
detention center. TRA board members chose a route that does not include the
state's involvement. It consists of using local government statutes to build
a jail. A consortium of out-of-state companies designed and built the jail
and provided a private funding plan. The architect, Corplan
Corrections, used a design approved by the American Correctional Association.
"ACA has their own design requirements and it (the Hardin jail) meets
those design requirements," said Paul Green, former executive director
of TRA. "so, where's the hiccup?" The attorney for the Montana
Department of Corrections said the state has its own requirements that the
Hardin jail does not meet. "The department of corrections doesn't house,
if any inmates, in a jail. We house our prisoners in prisons and this is not
a prison and that's one of the reasons we're reluctant to put our prisoners
in there," said Diana Koch, chief legal counsel for the Department of
Corrections. When asked if she believed that the jail could rectify that,
Koch said, "No there's not because of the way it was built." State
Senator Steve Gallus, who co-chairs the state Corrections Advisory Council,
said it would have turned out much differently if the people who built the
Hardin jail followed the Private Prison Citing Act. "Their facility would
be, in my opinion, open and have inmates and employees and it would be a
benefit to the people of Hardin," said Gallus. The consortium of
companies who built the jail provided a feasibility study for the project. It
was paid for by the bond underwriter for the project, Municipal Capital
Markets Group. The 40-page document states several times that the Montana
Department of Corrections is the primary focus as a potential user for the
jail. "There were some things promised to Hardin I think, but those
people who promised them are no longer on the scene. So, now what,"
questioned Bill Joseph, TRA board member. You keep moving forward said Joseph
and keep looking to land a contract to fill the jail. "You know when
Noah started building the ark, somebody said it isn't going to rain and he
said well I'm committed now, and we're committed. We've got the ark, and now
we just got to wait for rain," said Joseph. TRA board members said they
are currently pursuing several leads to bring prisoners to the jail. The
Hardin jail was paid for with $27 million dollars of private investments.
October 30, 2009 Montana Standard
The California con man who failed in his bid to take over an empty
Montana jail testified Friday that he is out of money, does not have the
corporate backing he once claimed and even struggles to pay rent on his
apartment. Michael Hilton appeared in Los Angeles Superior Court for a
hearing in a 2000 civil judgment against him now estimated at $700,000.
Previously, he insisted in multiple interviews that his bid to take over a
464-bed jail in rural Hardin had backing from deep-pocketed security industry
investors who wanted to remain anonymous. But Hilton testified Friday that he
raised just $100,000 from four investors — and that money has since run dry. With
no other job, Hilton said he has dismissed his few employees and is now four
months behind on his rent. "I'm out of the game. I'm done," he said
in a telephone interview with The Associated Press following his court
appearance. "All the expenses — the payroll, the rent, traveling — I
paid all these," he added, explaining why he has no money to pay off the
2000 California judgment. Rick Earnhart, the
plaintiff in the civil suit that was the subject of Friday's hearing, said he
lost $175,000 in two schemes perpetrated by Hilton in the 1990s. "He's
just playing poor me, poor me," Earnhart said
Friday. "Don't buy into it. He's a total con man." Hilton, a
55-year-old native of Montenegro, spent several years in prison in California
on grand theft charges and has at least three civil judgments against him for
fraudulent investment schemes. Hardin economic development officials signed a
contract with Hilton in early September calling for his company, American
Police Force, to operate the city's never-used jail and fill it with inmates.
But the deal was never ratified by a bank overseeing the jail, and it
collapsed after media revelations about Hilton's criminal background. Board
members for Hardin's economic development agency, the Two Rivers Authority,
have said they never investigated Hilton's background and didn't know of his
criminal history until after they signed a deal with him. But Hilton said
Friday that he confessed his past as early as July to the authority's
executive director, Greg Smith, and was told it would not be a problem.
Smith, who has since resigned, could not be reached immediately for comment.
Before the end of the jail deal came, as the expenses mounted and Hilton's
operating cash dwindled, he said he borrowed money at one point from his girlfriend,
Becky Nguyen. His own bank account is now empty, he said, while that of
American Police Force is overdrawn by $2,000. Hilton also acknowledged never
having the corporate backing he claimed. Instead, he said he had only four
investors — including Nguyen — who put money toward the jail project and a
proposed law enforcement and military training center.
October 29, 2009 Montana Standard
An arrest warrant was issued Thursday in California for a convicted felon who
recently tried to take over a Montana jail, as jilted investors and a former
employee scramble for money they've lost to the long time con artist. Michael
Hilton is the lead figure of American Police Force, a California company that
tried unsuccessfully to take over a 464-bed jail in Hardin. The warrant for
his arrest was issued after he failed to appear in Los Angeles Superior Court
on a $700,000 civil judgment he owes in a 2000 civil fraud lawsuit. Hilton —
who eluded the plaintiffs in the case for years before surfacing in Hardin
last month — owes an additional $760,000 in two other California fraud
lawsuits. His foray into Montana left yet another trail of bad checks and
unhappy investors who now want their money back. Hilton did not return calls
seeking comment Thursday, but was reported to be in southern California.
October 20, 2009 AP
Running out of money and with bills stacking up, officials in Hardin are
moving to mothball their empty 464-bed jail after a proposed take over of the facility fizzled. The jail's would-be
savior, Santa Ana, Calif.-based American Police Force, dropped its take over bid earlier this month when the company's lead
figure was exposed as a California con man. The $27 million jail already had
sat empty for more than two years—frustrating Hardin's hopes for an economic
revival fueled by contracts with out-of-state inmates. The jail's insurance
policy is set to expire Nov. 1 and the city agency that owns it may not have
the cash to renew it. The agency also is considering cutting off heat and
electric services to save money.
October 20, 2009 KULR 8
American Police Force's bid to run the Hardin Jail is over, but APF leader
Michael Hilton recently told a reporter he still plans to open a police
training center in Big Horn County, but an investor in a former alleged scam
by Hilton says anyone looking to do business with the self-proclaimed captain
to beware. Hilton came to Hardin with the promise of filling the vacant
detention center and stimulating the Hardin economy. The deal fell through,
but Hilton is still looking at building a police training center on a ranch
in the county; however one of Hilton's former investors says he can't be
trusted. "Total thief, conman, one of the best there is," said Rick
Earnhart. Earnhart was
introduced to Hilton in the late 90's. "I met him about 10 years ago. He
was dating a family member of mine and he came to me asking if I was
interested in an investment into a homecare facility," said Earnhart. The California contractor agreed and handed
over tens of thousands of dollars. He says at first everything seemed on the
up and up. "I trusted him. We had Christmas dinners together," said
Earnhart. But months later, after Hilton convinced Earnhart to invest in a second facility, the money
vanished along with the alleged conman. "I want to do whatever I can to
stop this guy and that's why I came up here," said Earnhart.
Earnhart doesn't believe Hilton had any intentions
of finding prisoners for the Two River Detention Facility. “He's the type of
guy that will stay up all night thinking about who he can scam the next
day," said Earnhart. He also has doubts APF is
really looking at building a tactical police training center. Earnhart filed a judgment against Hilton for thousands of
dollars in losses from his prior business deals in the Los Angeles Superior
Court and won. He claims to have never been paid a cent. Hilton has been
ordered to appear in a California courtroom at the end of the month and hand
over documents detailing all assets pertaining to himself and APF.
October 18, 2009 Billings Gazette
When American Police Force pulled the plug on a deal that could have given it
control over Hardin's empty jail, Gov. Brian Schweitzer said Hardin city
officials "have been duped by con artists over and over and over and
over again." He's not the only person who believes that. The story of
Michael Hilton - the shadowy founder of APF whose documented propensity for
fraud fed the impression that he was trying to pull a scam on the city of
Hardin - has been told by newspapers and other media all over the country in
recent weeks. Less talked about is the possibility the governor was referring
to - that the original scam may have been perpetrated by the consortium of
companies that talked Hardin into building the detention center in the first
place. "Hardin was a cookie cutter deal," municipal bond expert
Christopher "Kit" Taylor said - the same basic proposal pitched by
the same group of companies to dozens of communities, mostly in Texas but in
other parts of the country as well, that were looking for economic
development. But at least most of the other prisons built on speculation
eventually had some inmates and were making money, if not as much as promised
by the groups who developed them, Taylor said. "The problems aren't as
extensive as they are in Hardin because in Hardin they have no
prisoners," he said. Though the Texas consortium behind the Hardin
prison still has defenders, there were warning signs that it was promising
more than it could deliver. Flaws seen in study -- In November 2007, two months
after the jail was completed, a report from the state's Legislative Audit
Division called into question the feasibility study that helped convince
Hardin officials that there would be a need for the 464-bed facility.
"There are a number of assumptions made related to financial viability
that appear to be unfounded," the report said, and flaws in the data and
methodology made it impossible for local officials to "validate the
analysis with any confidence." The feasibility study was conducted by
GSA Ltd. of Durham, N.C., a company that had performed similar studies for
similar prison projects involving the same group of developers. "When I
saw it was the same set of players, I said, 'They're all in bed together.'
GSA doesn't get paid unless another prison's built," Taylor said. Taylor
was executive director of the Municipal Securities Rulemaking Board from 1978
to 2007. The board was created by Congress in 1975 to write rules regulating
the behavior of dealers in the municipal securities market. In Hardin and
elsewhere, Taylor said, private-prison consortiums pitch their deals as
risk-free economic development projects. They are touted as being risk-free
because they are funded by tax-exempt revenue bonds that can be repaid only
by money earned on the projects, not by taxing local residents. Project
revenue bonds, as they are known, were traditionally used by local
governments to fund the construction of things like sewer and water systems,
projects for which there was an obvious public need. And the bonds could be paid
back by a virtually guaranteed revenue stream - the fees paid by property
owners who had to have the services. Kevin Pranis,
an analyst for New York-based Justice Strategies, wrote about the use of such
bonds to finance correctional facilities in "Prison Profiteers," an
anthology of criminal-justice pieces published by Prison Legal News. Pranis said bond investors have to rely on the opinion of
bond issuers "who have a stake in making prison bonds looks as safe as
possible." While bond documents like the one issued for the Hardin
project are full of information about how quickly prison populations have
grown in recent years, they "contain little or no information about
sentencing and correctional policy reforms, shifts in public opinion or other
trends that would weaken the case for new prisons," Pranis
wrote. The bonds are sold -- To build the Hardin jail, the Two Rivers Port
Authority, an economic development agency created in 2004 by the Hardin City
Council, issued $27 million worth of revenue bonds. That was in 2006, several
months after the Texas-based consortium that originally pitched the deal
submitted the only design and construction bid advertised for by the city of
Hardin. The deal was brokered by James Parkey,
owner of Corplan Corrections in Argyle, Texas, who
specializes in the design and development of prisons as economic development
tools. The bonds were sold by Herbert J. Sims and Co. and Municipal Capital
Markets Group. For their services, Sims and Municipal Capital collected $1.6
million in underwriters' fees. Dealing in prison-related bonds has been a
lucrative business for Municipal Capital. Texas Monthly magazine reported in
2006 that the company had earned $5.4 million by financing $92 million in
project revenue bonds to build three jails in a single Texas county, Willacy
County. The Hardin construction contract went to Hale-Mills Construction of
Houston, which was paid $19.8 million. The facility was to be run by CiviGenics-Texas. Corplan has
put together similar deals, many involving Municipal Capital Markets and
Hale-Mills Construction, but sometimes with different operators. When Parkey first pitched the idea to Hardin, Emerald Cos.,
another big player in the corrections industry, was named as the prospective
operator. Schweitzer said the common denominator in all the projects is that
"rainmakers" go into small towns and counties with high
unemployment rates and present complete packages, offering to take care of
design work, bond sales, construction and operation. In theory, all the governmental
entity has to do is issue the bonds in its name and then sit back and collect
the revenues. Taylor said problems arise because the companies make their
money regardless of whether the prison ever gets enough inmates or is opened
at all. "That's true of the bond lawyers, it's true of the underwriters,
it's true of the feasibility study," he said. Taylor said the municipal
bond market is even more lightly regulated than the general bond market.
Virtually the only rule is that bond issues have to be accompanied by an
official statement, and the statement "can't be knowingly false and
misleading. Those are the only requirements today," he said. "That
is nowhere near what is required in the corporate area." Schweitzer also
said Hardin officials should have known that Parkey
and his company, Corplan Corrections, "had a
shaky reputation." In 2006, a consultant doing work for Corplan was convicted of funneling bribes to two county
commissioners in Texas in connection with development of a detention facility
there. The two commissioners were also convicted on bribery charges. Parkey, who did not return phone calls seeking comment,
has previously said he had nothing to do with the criminal activities. Parkey defended -- One of Parkey's
defenders is Paul Green, who was the economic development director for the
city of Hardin in 2004, when Parkey first pitched
the prison idea. Green said he visited three or four towns in Texas and
Arizona that had prisons developed by Parkey and
his associates, and in each case local authorities had nothing but praise for
Parkey and the prisons he helped build. Parkey was also known for staying involved in projects
for years, something he wouldn't have done if short-term gain were his only
goal, Green said. As late as last month, two years after the Hardin prison
was built, Parkey was still involved in that
project. After Greg Smith was suspended as director of Two Rivers Authority, Parkey personally asked Green if he would meet with APF frontman Michael Hilton, which Green did. Green said he
came away from the encounter convinced that Hilton didn't have the
wherewithal to make good on his grandiose promises to Hardin, but he was
still impressed by Parkey's evident concern for
Hardin. "That's why I have a high regard for James," he said.
Willacy County, Texas, Sheriff Larry Spence has also been generally happy
with the way things turned out in his county. He said he was on the
"public facility corporation" - similar to Two Rivers Authority,
established as the bond-issuing entity - when Corplan
helped develop a county jail and detention facility for the U.S. Marshals
Service in the county. Both of those facilities are doing well and are paying
the revenue bonds off on schedule, he said. Spence said the latest project -
a 1,000-bed detention center built with the idea of temporarily detaining
illegal immigrants caught along the nearby Mexican border - has been doing
less well. It filled up initially and was quickly expanded to 3,000 beds,
Spence said, but lately its inmate population has been hovering at around
1,000 and may be in trouble. He said he wasn't involved in that project
directly. In Hudspeth County, Texas, County Judge Becky Dean-Walker also
expressed satisfaction with the $23.5 million West Texas Detention Facility,
built by the same consortium. There was trouble finding enough prisoners at
first, she said, but the facility added 500 beds last year. "To me
that's just a business," she said. "They've been very good for
Hudspeth County." Taylor, the bond expert, said the problem in some
areas has not been a lack of prisoners but unanticipated costs associated
with the facilities. Some of the Texas prisons have been built in sparsely
populated counties with little infrastructure in place, and building a prison
requires them to install expensive water and sewer lines, on the taxpayer's
dime. In other cases, cities and counties have had to hire more police or
sheriff's deputies to handle big increases in traffic, and in counties nearly
all the prison workers end up being commuters coming from many miles way.
"The upshot was, they barely got any money from the operation of the
prisons," he said. It started in Billings -- One thing often overlooked
in all the attention focused on Hardin is that the Texas consortium originally
had its eye on Billings. On the Two Rivers Authority Web site, a timeline
said the project's origins go back to June 2004, when Parkey
and one of his associates met with then-Gov. Judy Martz at the airport in Las
Vegas, as she was on her way to the Western Governors' Association annual
meeting in New Mexico. It isn't clear who arranged that meeting, but Parkey came to Billings the following month at the
invitation of the Montana Department of Commerce. Among those present at a
gathering hosted by the Big Sky Economic Development Authority were people
from Hale-Mills Construction and Emerald Cos., the proposed operator, and
Mike Harling, an executive vice president of Municipal Capital Markets Group.
The list of other attendees makes it clear how important the proposal was and
how seriously it was being taken. All three Yellowstone County commissioners
were there, along with the chief of police, the sheriff, the mayor, city
officials, three representatives of the Department of Corrections and staff
people representing all three members of Montana's congressional delegation.
In a packet of information addressed to Martz, Corplan
laid out its proposal for a 500-bed adult detention center to be built in
Billings. It was described as a "turnkey" operation that would be
completed in 12 months and turned over to local officials. Corplan told of having designed and built 33 correctional
facilities in five states. Green, the economic developer from Hardin and a
former employee of the Big Sky EDA, was also invited to the meeting. He said
Billings officials clearly had no interest in a prison. But in Hardin, people
were still kicking themselves for having failed to make a bid for the private
prison that ended up being built in Shelby. Green and Parkey
started talking that day about the possibility of taking the Billings prison
concept and moving it 50 miles southeast, to the struggling town of Hardin Parkey and his associates found a much warmer welcome
there.
October 18, 2009 Billings Gazette
In the aftermath of what some saw as the last, best hope to fill Hardin's
vacant jail, the immediate fate of the project remains uncertain, with few
good options for a swift resolution. One industry insider says that project
leaders must work to mend fences with state government officials, wait for
demand in prison beds to pick up and perhaps even expand the facility to make
it more attractive to potential private partners. Another public policy
advocate says that, no matter what happens, the decision to link the town's
economic development to a private prison will have lingering consequences,
including potential difficulty in finding funds for future projects. The $27
million in unrated, uninsured municipal bonds issued by the Two Rivers
Authority, Hardin's economic development arm, are backed only by the jail's
mortgage and its operating income, which so far has been zero. Hardin, Big
Horn County and state taxpayers are not on the hook to cover losses from the
project, which is in default and has drawn from a $2.6 million reserve fund
to make scheduled payments to bondholders. Bondholders stand to lose their
investment, as the empty jail generates no revenue to service the debt. But
many investors may be unaware they even have a stake in the jail, due to the
sometimes-complex financial structures of municipal bond financing. A
combination of wealthy individuals, insurance companies and large investment
management firms have traditionally bought municipal bonds, said Philip Mattera, research director for Good Jobs First, a public
advocacy group in Washington, D.C., focused on accountability in economic
development subsidies. Financial disclosure records from the U.S. Securities
and Exchange Commission show that at least three publicly traded bond funds
bought substantial positions in the Two Rivers offering. According to SEC
filings made last month, the largest of those is a $4.1 million stake in a
long-term municipal bond fund managed by BlackRock, one of the world's
largest publicly traded investment management funds. The Two Rivers bonds,
which promise a tax-free return of slightly more than 7 percent, are included
in a $237 million BlackRock fund that also helped finance dozens of other
projects, including public universities in Pennsylvania, a hospital in
Delaware and a municipal water project in New York. A BlackRock spokeswoman
declined to comment on what plan, if any, the company had for handling the
Two Rivers bond default. Michael Harling, an executive at Municipal Capital
Markets Group, one of two underwriters for the Two Rivers bond issue, did not
respond to a message seeking additional information. Little recourse -- Under
the offering's prospectus, bondholders have little recourse in the event of
default, other than to foreclose on the prison. That can be done only after
investors holding at least two-thirds of the $27 million total issue request
such a move in writing. Foreclosure is unlikely, at least in the near term,
said Charles R. Jones, president of Inland Public Properties Development, a
Texas-based company that finds municipal bond funding and other revenue
sources for government buildings, including jails. "Bondholders would be
in the same position of trying to do exactly what everyone has done, which is
get a population in there," said Jones, who said he had considered
funding a private prison in Montana before the Hardin deal was announced.
Because they would have to hire someone to manage a search for prisoners,
bondholders are likely to simply allow Two Rivers, Harling and other players
in the deal to continue the search, he said. While Hardin is an extreme
example of what can go wrong with a private prison venture, its vacancy and
bond default are not unique, said Judith Greene, a criminal justice policy
analyst with New York-based Justice Strategies. In a scenario that parallels
some of the circumstances in Hardin, a number of speculative, for-profit
jails were built in Texas in the early 1990s to house growing inmate
populations. They were left empty or unfilled after incoming Gov. Ann
Richards instituted sweeping prison reforms, Greene said. Six jails across
Texas, including some built by counties as revenue-generating operations,
were eventually bought by the state for about 50 cents on the dollar and used
for various treatment and detention programs, Greene said, adding that
bondholders there sued developers after suffering steep losses. Jones said
that a counter-intuitive strategy of expansion might be the answer in Hardin,
where the prison has more barracks-style beds geared for immigration
detainees and fewer smaller cells favored for housing other kinds of
offenders. "It's a tough pill to swallow, but the solution might be to
expand the facility so that it can hold a larger population" and offer a
different configuration of cells, Jones said. A briefing document prepared for
the Montana State Legislature notes that the Two Rivers jail "is
designed with the infrastructure to accommodate a future expansion of an
additional 440 beds." Doubling the number of beds would "lower the
average cost per bed and lower the operations costs because of economies of
scale," Jones said, adding that other struggling facilities have
improved their fortunes by expanding. Critics of private prisons caution that
building more and larger jails creates greater political pressure to fill them
in order to protect the jobs and revenue they generate. Improved relations --
Jones said that project leaders in Hardin should work to improve relations
with state government leaders and administrators at the Montana Department of
Corrections. "There was a sense that the developers on that facility
moved forward without the full support of the elected officials, and they've
never really gotten the political support they need," he said. Despite a
surplus of beds that may have contributed to the halt in construction this
year of a 2,000-bed private prison in Tennessee, Jones said that jails are
filling, and national trends indicate that demand will eventually outpace
supply. Any solution for Hardin is likely to come in partnership with a major
industry player that operates other facilities around the country, he said.
But those interested in Hardin's jail may be waiting for a bondholder lawsuit
or foreclosure to trigger an opportunity to buy or lease the facility at a
steep discount, as the bond default puts Two Rivers in a poor bargaining
position. "You always have vulture investors willing to buy things for
pennies on the dollar if they think there's some remote chance they can
recoup their investment," said Mattera, the
economic development analyst. "But in the minds of Wall Street and bond
investors, that locality is associated with a default, and it can have
negative consequences," he said, adding that future Hardin bond issues
for unrelated projects could be hindered. Jones said that he was optimistic
that the Hardin jail would eventually fill. "I think it's just a matter
of staying power, and then market demands will play out, as they usually do.
The facility will be needed and put into service," he said. "It's
just a matter of staying alive in the meantime."
October 17, 2009 AP
A convicted con artist from California who roiled a southeastern Montana
community with his unlikely bid to take over its empty jail said he intends
to return to the state and pursue a military training center. Michael Hilton,
55, is the lead figure of Santa Ana, Calif.-based American Police Force. The
company struck a deal last month with unwitting officials in rural Hardin to
take over its never-used, 464-bed jail. In his first interviews since the
jail deal's collapse, an unapologetic Hilton told The Associated Press that
his intentions were honest but his "tainted" name and a business
partner who turned against him helped sink the deal. "What happened in
my past, I admit it. I'm not proud nor ashamed," he said, adding that
"there was nothing malicious" in his jail proposal. Hilton's
run-ins with authorities stretch back more than two decades, to a 1988 arrest
for credit card fraud. He spent three years in prison in California in the
1990s and has outstanding civil judgments against him totaling more than $1.1
million. But he said his intentions in Hardin had been sincere and that he
"stood my ground" when his background caught up to him. The Montana
jail plans unraveled after media revelations about Hilton's criminal past
sparked an investigation by Montana Attorney General Steve Bullock. Hardin
had been desperate to fill its jail after it sat empty for two years.
Officials with the city's economic development agency signed a deal with
Hilton without a thorough background check. The deal was never ratified by US
Bank, the trustee on $27 million in bonds used to build the jail. Hilton now
claims to have an agreement to lease 1,200 acres in Big Horn County for a
tactical military training ground. He says he will be a
"consultant" on the project because his investors no longer want
him at the forefront. "We're going to build that. It's not an empty
promise," he said. The lease agreement for the supposed training center
was said to be with a prominent Hardin businessman and rancher. Details offered
by Hilton could not be immediately confirmed, but there were strongly
expressed doubts. "(Hilton) just goes onto the next plan, then the next
plan, then the next," said Maziar Mafi, a
Santa Ana, Calif. trial attorney. "He never stops because the minute he
stops, nobody's going to believe." Mafi invested $35,000 in the jail
plan and helped craft the contract between Hardin and American Police Force
before cutting his ties to the project. Hilton says Mafi undermined the jail
deal by failing to file the necessary paperwork to incorporate American
Police Force in Montana. Mafi said he didn't do so because Hilton had asked
that his name be left off the documents, raising suspicion for the attorney.
No criminal charges have been filed over the scuttled jail deal, although
state and federal authorities are investigating. The executive director of
the city agency that owns the jail, Greg Smith with the Two Rivers Authority,
resigned last week for undisclosed reasons. "I never asked for any
bribes, nor did I bribe anybody," Hilton said. A native of Montenegro
with at least 17 aliases, Hilton adopted the title "captain" when
he formed American Police Force. He has pegged the cost of the proposed
training ground and a related dormitory for more than 200 trainees at $17
million. Yet he's struggled to keep up with far smaller financial
obligations, such as $1,000 debt to a Hardin bed and breakfast where he and
several associates stayed for several days in September. Hilton said he was
"transferring money from one account to another account" to pay off
the debt. Such promises appear to be stacking up too quickly for Hilton's
Montana spokeswoman, Becky Shay, who is now seeking Smith's former post at
the Two Rivers Authority after failing to receive a paycheck from Hilton after
three weeks on the job. Shay quit her job as a reporter covering Hardin for
the Billings Gazette Sept. 25, when Hilton offered her $60,000 a year and a
company car. After the Mercedes SUV she was using courtesy of Hilton was
reclaimed this week by Mafi, Hilton's former business partner, Shay was back
in her old car — a 1999 Dodge Intrepid with balding tires.
October 15, 2009 KULR 8
Billings could have been the site of a private detention facility just
like the one in Hardin. A KULR-8 News investigation found that the city of
Billings was the first place where the facility was pitched. In the summer of
2004 Corplan Corrections out of Texas proposed a
500-bed, secure, adult detention facility to Yellowstone County and the city
of Billings. In the Statement of Qualifications, or a several-page proposal
presented to then-Governor Judy Martz on June 28, 2004, the pre-packaged
group of companies laid out its plan. The team behind the project consisted
of Corplan Corrections for management, design and
engineering, Hale-Mills for construction, Eversole-Williams Architecture,
Municipal Capital Markets Group for financing, and Emerald Correctional
Management to operate the facility. In another document obtained from the Big
Sky Economic Development Authority, the team said the $25-million facility
would be financed by revenue bonds purchased by private investors, and that
after 22 years the sponsor would own the facility. Yellowstone County
Commissioner Jim Reno said they and the city immediately passed on the proposal.
"It just didn't make financial sense," said Reno. "It sounded
too good to be true, but it just never penciled out for us." Yellowstone
County Sheriff Jay Bell, then undersheriff, said he and former Sheriff Chuck
Maxwell stated that they would not use such a facility. "We wouldn't
have a real interest in it because of the expense that it would cost the tax
payer of Yellowstone County," said Bell. "Our theory is that it's
always cheaper to stay at home rather than in a motel." The proposal
from Corplan Corrections was referred to the city
of Hardin. The founder of the city's economic development branch, Two Rivers
Authority, remembers being put into contact with James Parkey
that same year. "When I talked to them they talked about how people that
were working in the facility would get insurance, that they would get an
education and they would work around the farmer's and rancher's schedules and
I was like that's beautiful, that's fantastic because that's the hardest
thing for new, young ag people to do is to find a way to insure their
families," said Paul Green. In June of 2006 Two Rivers Authority broke
ground on the detention facility paid for through revenue bonds. It promised
to create jobs and heavy revenue for the city. However, it has sat empty
since completion two years ago. Commissioner Reno said they also passed on
the project because of a lack of commitment to use such a facility from the
Montana Department of Corrections. Commissioner Reno said it is not unusual
for Yellowstone County to receive a couple calls a year from groups wanting
to build a private prison in the region. He said they prefer to keep
correction institutions county-owned and operated.
October 14, 2009 Billings Gazette
In announcing the suspension of a state investigation into American
Police Force on Tuesday, state Attorney General Steve Bullock said he was
"unaware of any Montanans who have been harmed financially by this
company." Meet Marcianna Smith. She is the
owner of the Kendrick House Inn at 206 N. Custer Ave. in Hardin, a
bed-and-breakfast where Michael Hilton and several other people associated
with American Police Force stayed in late September. Smith said a check
Hilton wrote to her for "about $1,000" has bounced. It came back
with "account frozen" stamped on it, she said Tuesday. In addition
to staying at the B&B, Hilton invited a lot of people to breakfast and
put the bill on his tab. Even so, Smith finds it hard to be angry with
Hilton. "He was very charming," she said. "I just find it hard
to read what I've read and believe it was the same person."
October 14, 2009 AP
Montana Attorney General Steve Bullock dropped his investigation into a
California company following its attempted takeover of an empty Montana jail.
The company, American Police Force, had missed a Monday deadline to provide
documents sought by Bullock's office after revelations that company founder
Michael Hilton had a lengthy criminal background. But because American Police
Force has pulled out of its bid to take over the 464-bed jail in rural Hardin,
Bullock said Tuesday he was ending the investigation. "Because I'm
unaware of any Montanans who have been harmed financially by this company,
our goal has been achieved and we have suspended our inquiry," he said.
Bullock added that Hilton's failure to answer questions about the project
"speaks volumes about his company's legitimacy." Assistant Attorney
General James Molloy issued a demand Oct. 1 for American Police Force to turn
over its tax records; lists of customers; names of company employees, owners
and officers; and other information. The information was sought under a
Montana law barring unfair or deceptive business practices. Hilton, who spent
time in prison in California in the 1990s, has a history of fraudulent
dealings and at least $1.1 million in outstanding civil judgments against
him. In response, Hilton sent a one-page fax to the Montana attorney
general's office late Monday. The fax said the company was no longer pursuing
the project and would not be answering the information requested by Molloy,
said Becky Shay, spokeswoman for Hilton's Santa Ana, Calif.-company. "It
outlines that APF (American Police Force) was only in contract negotiations,
did not do business in Hardin and has pulled out of contract
negotiations," said Shay. Hilton has never disclosed who backed his
Hardin proposal, offering only verbal assurances that he had the financial
support needed to operate the jail. Without checking into his background,
Hardin officials initially embraced his proposal and signed onto a contract with
Hilton. That agreement was never approved by a bank acting as trustee for the
construction bonds used to build the $27 million jail. After Hilton's
background became known, the city's economic development authority backed
away from the deal, and its executive director resigned.
October 12, 2009 TPM Muckraker
With the unraveling of the deal for the shadowy American Private Police Force
to take over and populate an empty jail in Hardin, Montana, it's pretty clear
that the small city got played by an ex-con and his (supposed) private
security firm. But an investigation by TPMmuckraker
into how Hardin ended up with the 92,000 square foot facility in the first
place suggests that, long before "low-level card shark" Michael
Hilton ever came to town, Hardin officials had already been taken for a ride
by a far more powerful set of players: a well-organized consortium of private
companies headquartered around the country, which specializes in pitching
speculative and risky prison projects to local governments desperate for
jobs. The projects have generated multi-million dollar profits for the
companies involved, but often haven't created the anticipated payoff for the
communities, and have left a string of failed or failing prisons in their
wake. "They look for an impoverished town that's desperate," says
Frank Smith of the Private Corrections Institute, a Florida-based group that
opposes prison privatization. "They come in looking very impressive,
saying, 'We'll make money rain from the skies.' In fact, they don't care
whether it works or not." The Pitch -- In June 2004, James Parkey, a Texas-based prison developer and architect, met
at the Las Vegas airport with Judy Martz, who at the time was the Republican
governor of Montana. Described by the Texas Observer as a "polished
salesman" for the booming private prison industry, Parkey
presents himself on his Web site as a beneficent savior for local communities
hit hard by the decline of the manufacturing sector. Parkey,
who runs a company called Corplan Corrections, was
seeking to sell Martz on a prison project for her state. His method is to
promise a full-service team to handle the entire project from soup to nuts --
what one source described as a "turn-key system." That team
includes a construction firm to build the prison, a prison operator to work
with local officials to find prisoners, then run the facility, underwriters
to sell the bonds, and even a consultant to do an economic feasibility study.
"They walk into a municipality and say, you don't have to do a thing,
we'll take care of everything," Christopher "Kit" Taylor, a
municipal bond expert who has followed Parkey's
operation, told TPMmuckraker. State officials
eventually referred Parkey to the city of Billlings. From there, he was directed 50 miles east, to rural
Hardin -- where he found a receptive audience. Parkey
promised the town's brass that his team would take care of everything. The
project would generate 150 solid jobs. The prison operator in Parkey's team pledged to pay the town a business license
fee and at least $100,000 in annual per-prisoner fees. To officials in a
county whose poverty rate is double the national average, that seemed like
too good an opportunity to turn down. Big Pay Day -- For Parkey
and his crew, the deal soon paid off. The prison's designer and builder,
Hale-Mills Construction of Houston, was guaranteed a maximum price of $19.88
million, according to the official bond statement obtained by TPMmuckraker. The exact amount the firm ultimately
received isn't known. And Hardin's $27 million municipal bond sale, conducted
in 2006, netted the underwriters -- a pair of companies called Herbert J.
Sims, of Connecticut, and Municipal Capital Markets Group (MCM), of Dallas --
a total of $1.62 million. Other players recruited by Parkey
-- lawyers, surveyors, and the North Carolina-based consultant who conducted
the feasibility study -- reaped $169,750. It's not known how big a cut Parkey took, and he didn't respond to calls for comment.
Hardin itself didn't make out nearly so well. Not a single inmate has ever
slept in the jail, and the town hasn't seen a cent of revenue from the
project. The bonds, which were to be paid back through the anticipated -- but
non-existent -- revenue, have gone into default. The prison "was built
on spec," says Taylor, the muni bond expert, who has looked at the
Hardin deal. "[The consortium's] whole premise was hell,
we don't care what happens to the bonds." That's left Hardin with an
empty jail that it so desperately wanted to fill that it begged first for sex
offenders from the state, then for Gitmo inmates from the Feds, and, finally,
for some kind of salvation from the American Private Police Force. A
Compromised Consultant? -- Central to Hardin official's expectations for the
deal was the feasibility study that Parkey's team
conducted, which concluded that the project was all but certain to pay off.
But that study appears to have been not only deeply flawed, but essentially
rigged from the start. A Montana state auditor found in a 2007 memo that the
study -- carried out by Howard Geisler, a North Carolina feasibility
consultant specializing in prisons -- was racked with problems. It provides
"little methodology" regarding its estimates of potential prisoners
for the jail. It lacks "historical data to support anticipated prisoner
counts." And it makes "a number of assumptions made related to
financial viability that appear to be unfounded," including
"potential improvements to local aviation facilities." In addition,
Geisler's study failed to mention that bringing in out-of-state prisoners is
potentially illegal under Montana law -- even though that idea was held up as
a key method for recruiting prisoners. The state's attorney general
challenged Hardin over the provision, and though a judge ultimately sided
with the town, it was only after a year of legal wrangling. Perhaps those
flaws aren't surprising. The study was paid for by one of the underwriters,
MCM, which had worked frequently with Geisler in the past. A truly
independent feasibility study, says Taylor, the muni bond expert, would
involve multiple firms making bids to do the job for the city. Geisler was
clearly aware while writing the study of the conflict of interest inherent in
the set-up. On one page, he notes in bolded text that, "to assure independence,"
his fee "is not contingent upon the sale of the Bonds." But Taylor
calls that "a smokescreen." "[The passage] is trying to give a
sense of legitimacy to the deal, when that's not the case at all," he
told TPMmuckraker. Indeed, the study was in fact the
third such report produced on the subject -- and the second by Geisler --
over a two-year period, according to a Montana source close to the process.
The first two studies -- the other of which was done internally by Hardin --
came to ambiguous conclusions as to whether the project would succeed. After
the first two reports, says the source, "the MCM people had [Geisler]
come back and do another. That's when they decided it made sense to go
forward." To this day, some local officials defend the study, arguing
that it's easy to criticize with the benefit of hindsight. Dan Kern, Hardin's
economic development director in late 2005 and early 2006, told TPMmuckraker he's not sure why support for the project
evaporated after the jail was built. "Everybody told me that this was a
great project and there was a need for it," he said. But Taylor says if
the official bond statement, which includes the feasibility study, was false
or misleading, the bond players have legal liability. Beyond Hardin -- It
looks like Hardin isn't the only place where the the
lavish promises of Parkey's consortium failed to
pan out. The Montana state auditor's memo notes that, in three separate jail
deals with Texas counties, pushed through by Parkey's
team, "current revenues are insufficient to cover operating and debt
expenses." And in 2005, three Texas county commissioners were convicted
on bribery charges in connection to one of those Parkey-led
projects. As in Hardin, MCM acted as the underwriter, and Hale-Mills handled
construction. All of the companies in the consortium either declined to
comment for this story or did not return calls and e-mails.
October 9, 2009 KULR
In June of 2006 Two Rivers Authority began constructing the 464-bed detention
facility in Hardin. James Parkey, who is the
president of Corplan Corrections in Argyle, Texas
is the jail's architect. KULR-8 spoke with Juan Guerra who is the former
district attorney for Willacy County, Texas. Guerra said he investigated Corplan in 2001 and 2002 on possible corruption in connection
with a private prison being constructed in that county. Guerra said his
investigation resulted in the convictions of four people; the county auditor,
two commissioners, and a man Guerra said was a consultant for Corplan who Guerra said plead guilty to giving the
commissioners money so that they would award the contract to build the jail
to Corplan. Parkey was
not charged with any wrongdoing in the case, but Guerra has a strong opinion
about his business. "He puts packages together and goes around to different
areas across the country. He used to only be in Texas, now they are all over
the country, using the same routine. What they do is promise all sorts of
things. There are millions of dollars in bonds, revenue bonds and then they
go into default. They make their money upfront and within a month they are
out of there. They're not there to make sure this thing runs," said
Guerra. Parkey was seen touring the Hardin facility
last month when Two Rivers Authority was in contract talks to lease the jail
to the California-based firm American Private Police Force, or APF. Al
Peterson, TRA vice president, said Parkey was in
Hardin strictly because of his intimate knowledge of the facility. Parkey was said to be present at a meeting between TRA
and APF in early September in California. When KULR-8 called Parkey at his home/business office in Argyle,Texas
to find out what if any his current involvement is with the Hardin Jail and
to discuss Guerra's claims we were told that he was on a trip for two weeks.
Officials with a Corplan constructed jail in Bailey
County Texas said it took them a year to get prisoners, but they are happy
with the facility. Juan Guerra is now in private practice in Texas with a
focus on private prisons. He said it is a multi-billion dollar industry
riddled with problems. Two Rivers and CiviGenics
contracted to operate the jail in the beginning. Community Education Centers,
Inc. aquired CiviGenics
in June of 2007. Peter Argeropulos, senior vice
president for business development could not be reached for comment on the
issue involving the Hardin Jail. KULR-8 was told he was on vacation. However,
a spokesperson for CEC said the company currently has no involvement with the
facility.
October 9, 2009 TMP Muckraker
The end has come... Controversial private security contractor American
Private Police Fore has officially backed out of a deal with Hardin, Montana,
to run a local prison, APPF spokeswoman Beck Shay announced this afternoon.
(Watch Shay's press conference here.) Shay said that Hardin's economic
development agency, which signed the deal with APPF, "deserves a less
controversial partner." She added that the jail needed upgrading, and
"we just cannot make infrastructure investments at this time." The
announcement comes after revelations that APPF's Michael Hilton, who led the
negotiations with Hardin, has a history of criminal fraud. And numerous
claims made by Hilton about the company's background and experience have been
called into question. Shay addressed those concerns, in a manner of speaking,
telling the media: We have not given you an opportunity to separate Michael
Hilton from APF. For those people who feel there may be fraud, I would say to
them: there was finally a contractor who was willing to come in and open that
detention facility. She added: "There was never any fraudulent intent in
Hardin." Still, Shay showed a hint of the strain that the controversy
has taken. "It's been a pretty arduous process," she noted.
October 9, 2009 Billings Gazette
A memorandum of understanding between Hardin's economic development agency
and American Police Force, released by the agency on Thursday, laid out a
proposal under which APF would provide a police force for the city of Hardin.
The memorandum was signed Aug. 18, nearly three weeks before it was announced
that a contract had been signed between APF and Two Rivers Authority, the
tax-funded economic development group. The memorandum was signed by Greg
Smith, the former director of the TRA, and Michael Hilton, the man who
founded APF last March. TRA had previously refused to release the memorandum
and had released only the first 11 pages of the 13-page contract. Billings
attorney Martha Sheehy, representing The Billings Gazette, filed a motion in
Big Horn County District Court last Friday, asking Judge W. Blair Jones to
order TRA to release the full contract and memorandum of understanding. Gary
Arneson, manager of the Hardin Generating Station and president of the Two
Rivers board of directors, told Sheehy he decided to release the documents
without waiting to hear from the judge. He hand-delivered the documents to
The Gazette on Thursday afternoon. APF, which had proposed leasing the empty
Hardin jail for 10 years, caused an uproar in mid-September when Hilton and
several associates showed up in Hardin in three Mercedes SUVs that bore
detachable decals identifying them as belonging the Hardin Police Department.
Hardin has not had its own police force since 1976, when a consolidation
agreement with Big Horn County resulted in the sheriff's department providing
all law enforcement in the city and county. The two governments have just
begun the process of deconsolidating, calling for Hardin to have its own
police department again by July 1, 2011. It was with those plans in mind that
the memorandum of understanding addressed the issue of local police services.
The key paragraph read: "American (Police Force) will submit to Two
Rivers a written proposal for American to provide a police force and all
necessary equipment for the operation of the police force in accordance with
Montana Statutes for the City of Hardin. The proposal will be provided to Two
Rivers within ten days of the date of this agreement. The parties acknowledge
that the City of Hardin will have to agree to any proposal before it can
become effective. However, American agrees that it will be ready and able to
perform in accordance with any proposal within sixty days of notification of
approval by the City of Hardin. The City of Hardin will pay the sum of
$250,000 to American for the police force." Becky Convery, Hardin's
former city attorney, said last week that it was Smith who first suggested
the possibility of APF providing local law enforcement. She said the TRA had
"no authority to enter into those discussions," and on Tuesday she
and Hardin Mayor Ron Adams assured the Big Horn County Commission that the
city had no intention of involving APF in local policing. By the time a
formal contract was signed on Sept. 4, during a trip to California by Smith,
Convery and TRA Vice President Al Peterson, there was no specific mention of
APF providing law enforcement services in Hardin. The contract said only that
APF "shall have the option" to "provide additional law
enforcement services to the TRA and/or the City of Hardin." That contract
was signed by Hilton, Smith and Peterson. The last page of the contract
includes a blank space for the signature of Lawrence J. Bell, identified as
the trustee for holders of the bonds that were sold to finance construction
of the prison. The city issued $27 million in revenue bonds to build the
jail, which has sat empty since it was completed in 2007. The bonds went into
default last year. Bell is identified in the contract as vice president of
U.S. National Bank Association's Corporate Trust Services in Portland, Ore.
He could not be reached for comment Thursday. The TRA board was working on a
new contract when it decided on Monday to suspend further negotiations until
it had hired a new attorney. Convery, who had been working on a contract
basis for the agency, resigned last week. Smith resigned as director of the
agency on Monday.
October 8, 2009 TMP Muckraker
Just when we thought the American Private Police Force saga might be over, a
putative APPF "investor" has come forward -- anonymously. KULR in
Montana reports on a "California man" who claims, under condition
that his name not be used, that he is one of several
private individuals who gave APPF money for the Hardin jail project. There's
no mention by the investor of that "major security firm" parent
company APPF long claimed to have. Apparently operating under the assumption
that APPF is made up of more than just 'Captain' Michael Hilton, the man told
KULR that several private individuals (yes, that's plural) who gave APPF
money are now looking into opening the Hardin jail without Hilton. And they
are trying to verify "the source of prisoners Hilton claims to
have." Which also strikes us as an odd claim, given that Hilton himself
claimed last month -- to KULR, no less -- that the deal was primarily about a
security training center: "We don't really want to get into the prison
business." Meanwhile, APPF is spreading a little oppo research on the
man Hilton falsely claimed would be the director of operations at the Hardin
jail. Michael Cohen, of Ohio-based International Security Associates, served
over a year in prison after a 2004 felony conviction for stealing from his
then-employer, the Secret Service, the AP reports. Which raises the question:
if you're going to all the trouble of fabricating a director of operations
and sending his resume to town leaders, why pick the guy who just got out of
prison for theft?
October 7, 2009 AP
A former Secret Service agent named as the would-be operator of a Montana
jail and law enforcement training center served 14 months in prison for
stealing money from the government. Michael Cohen was a supervisor with the
Secret Service before his 2004 conviction on charges of stealing $2,800 from
the agency. Now a private security industry contractor in Ohio, Cohen was
named by Santa Ana, Calif.-based American Police Force as the future overseer
of a jail the company hopes to take over in rural Hardin, Mont. Cohen says he
spoke with the company's lead figure, Michael Hilton, about the position but
was never offered the job. The jail takeover was put on hold by Hardin
officials this week following revelations that Hilton has an extensive
history of fraud in southern California. That includes convictions in two
grand theft cases.
October 6, 2009 Billings Gazette
Michael Hilton, seen as the potential savior of Hardin just two weeks ago, is
quickly running out of supporters in the struggling town of 3,500. Hilton is
the Serbian-born Californian who has been representing American Police Force
as a company interested in leasing Hardin's empty jail and investing millions
in a prison and military training operation. On Monday, when Two Rivers
Authority, the city's economic development arm that built the jail, met to
discuss possible changes in its proposed contract with APF, board president
Gary Arneson said APF needs to replace Hilton as a representative to Hardin.
"I agree," said Mayor Ron Adams, standing in the audience. "He
has no credibility in this community at all." For a while Monday, it
looked as though there would be no mention of the controversy churning around
Hilton, who was identified last week as an ex-convict with multiple aliases
and a long criminal history. He returned to California last week. After a
short discussion of the contract, the board was about to move on to another
subject when board member Robert Crane asked to speak. He said there were so
many unanswered questions about Hilton and APF that he didn't see how the
board could consider a contract with the company. "It just seems like
it's one thing after another, and there's too many red flags coming up,"
Crane said. Crane said Hilton has been lying to him and other board members,
most notably about the identity of the man Hilton said he had hired to be
director of operations at the Hardin jail and training center. The board had
not previously released the man's name, and TRA Vice President Al Peterson
said last week that "people will be shocked" when they learn what a
high-caliber person Hilton was bringing to town. Crane identified the
so-called director on Monday as Mike Cohen, vice president of International
Security Associates in Dublin, Ohio. Crane said he spoke with Cohen last week
and was told he had no association with Hilton or APF. Reached by phone later
Monday, Cohen said he does have extensive experience in overseas security
training and had recently returned from Iraq when he came across the APF Web
site early in September. Interested in various opportunities listed there, he
sent in his resume and an application. He said Hilton called him soon after
that and talked about various jobs, but refused to divulge any details unless
they met in person in California or Montana. "I just didn't feel right
about the conversation," Cohen said, so he e-mailed Hilton the next day
and said he needed answers to specific questions before pursuing the job any
further. Hilton didn't write or call back until about two weeks later, when
he told Cohen that he still was interested in hiring him. Cohen said Hilton
still refused to answer any questions, however, so Cohen stopped talking to
him. That was the last Cohen heard of APF until last Friday, when Crane
called Cohen and told him that Hilton had identified him as his new director
of operations in Hardin. Crane also told him that Hilton presented the TRA
board with Cohen's resume, touting his new director. "Friday afternoon
was the first I heard about it," Cohen said. "I told him (Crane) flat
out, I have no idea who this joker is." TRA board members faced other
tough questions at their meeting on Monday. Rich Solberg, host of a show on
KHDN radio in Hardin, asked board members if they had drawn up a contract
with APF based solely on the representations of Hilton. Arneson responded
that he didn't personally know the names of anyone else connected with APF,
but would try to make those names available at some future date. Solberg also
asked the board about the parent company that supposedly was working with APF
behind the scenes to lease the Hardin jail. At an earlier TRA meeting,
Solberg said, Peterson "was speaking in praise and glory of that unnamed
company." Asked by Solberg on Monday if he knew the identity of the
parent company, Peterson referred him to Becky Shay, the APF spokeswoman.
Pressed again by Solberg to say whether he knew the name of the company,
Peterson turned away and said, "I'm not going to answer that question at
this point." Arneson said after the meeting that he will have to speak
with the Hardin people who met with Hilton in California last month to find
out who else they spoke with there. The four people who flew to California
were Peterson; TRA attorney Becky Convery; Greg Smith, the former director of
the TRA; and Smith's wife, Hardin mayoral candidate Kerri Smith. Peterson
said after the meeting Monday that one gathering in California involved at
least 15 people, several of whom worked for APF, "as far as I
know." Convery, who wasn't at the meeting Monday, said afterward that
she remembers meeting Hilton, one other person who may have been associated
with APF but seems to have specialized in wind power, and a man named David
Gilberts, whose business card identified him as APF's communications
director. A call to the California number on Gilberts' business card was
answered by a man who identified himself only as Sgt. Martin, who said he was
with APF. At first he said no one named David Gilberts worked there, but,
when told about Gilberts' purported position with the company, Sgt. Martin said,
"He's not here," and then referred all further questions to Shay.
Convery, who used to be the Hardin city attorney, had been working for the
TRA before resigning last week over a conflict of interest. She has also been
working under contract with the city on deconsolidating law enforcement in
Big Horn County, which is now provided solely by the sheriff's department.
APF had talked briefly of helping establish a police department in Hardin,
and Hilton and several associates showed up 10 days ago in three Mercedes
SUVs bearing decals that read "City of Hardin Police Department."
Convery said the commotion caused by APF's involvement in law enforcement
issues forced her to resign as the TRA's attorney. Board members said Monday
they would have to find a new attorney before considering changes to the
contract with APF. They had said before that the contract was approved by the
APF and Two Rivers but still needed the signatures of people with U.S. Bank,
representing bondholders. The city of Hardin backed the sale of $27 million
in bonds to finance construction of the jail, known as Two Rivers Detention
Facility. Cohen, the man wrongly identified as the director of operations for
APF's planned enterprise in Hardin, said he was still shaking his head
Monday. "I feel sorry for everyone up there in Montana," he said.
"He's (Hilton) scamming everyone up there."
October 5, 2009 Billings Gazette
The director of Two Rivers Authority, who was placed on paid leave last month
two days after announcing that the agency had signed a contract to fill the
empty Hardin jail, formally resigned Monday. Greg Smith presented a letter of
resignation to the TRA Board of Directors in a public meeting, after the
board met for nearly an hour in a closed session to discussion Smith's suspension.
Neither the board nor Smith has ever said why Smith was placed on leave, and
board President Gary Arneson said Monday that he still couldn't give any
details. Smith was placed on paid administrative leave two days after
announcing on Sept. 10 that the TRA, a tax-funded economic development
agency, had signed a 10-year contract with American Police Force, also known
as American Private Police Force Organization. The company said it hoped to
start filling the jail with prisoners early in 2010 and then invest millions
to create a training center for military and law enforcement personnel. At an
earlier meeting of the TRA board, before the closed session, a member of the
audience asked if Smith had been suspended because his wife, Hardin mayoral
candidate Kerri Smith, used TRA funds to fly with her husband to California
to meet with an APF representative in September. Arneson said that Kerri
Smith did join the group of TRA representatives on the trip, but that her
ticket was paid for by her husband. He said that had nothing to do with
Smith's suspension.
October 5, 2009 AP
Plans for a California company to take over the city's empty jail were put on
hold Monday, following last week's revelations that the company's lead figure
has a criminal history. The decision came as Hardin's leaders announced the
resignation of Becky Convery, an attorney who helped craft the jail deal for
the small city. Hardin officials had tried in vain for two years to fill the
464-bed jail before striking an agreement last month with convicted felon
Mike Hilton and his Santa Ana, Calif.-company, American Police Force. But
following last week's news that Hilton has a history of fraud — including
several years in jail and three civil judgments against him for more than
$1.1 million — Hardin's economic development authority said it was stepping
back from the deal. "We won't move forward. I don't think any of us want
to be on the chopping block," said Gary Arneson, president of Hardin's
Two Rivers Authority, which owns the jail. Meanwhile, the man whose name was
offered up as the jail's future director said Monday he was never offered the
job — and would not have taken it regardless. Hilton had told Hardin
officials that he was hiring Mike Cohen, an executive with International
Security Associates in Dublin, Ohio, for the post. "Excuse my French,
but he's talking with forked tongue there," Cohen said Monday, adding
that he had only cursory discussions with Hilton and was led to believe the
post involved military and law enforcement training. "He kept saying,
come to Montana, come to California and meet me. He wouldn't give me any
information" about the job, Cohen said. Hilton's office referred
questions Monday to Becky Shay, the company spokeswoman. Shay said she
continues to operate under the assumption that the jail project is moving
forward.
October 5, 2009 AP
A California judge has ordered American Police Force figure Michael Hilton —
a felon with a history of fraud seeking to operate an empty Montana jail — to
appear in court on Oct. 27 over an outstanding judgment in a fraud lawsuit.
The Oct. 2 order follows a proposal by American Police Force, Hilton's newly
minted California company, to take over and run a 464-bed jail in Hardin,
Mont. The judgment in the case is among several against Hilton totaling more
than $1.1 million. In that case, Hilton lured investors to sink money into an
assisted living complex in Southern California that was never built. Hilton
also spent several years in state prison in California in the 1990s. Hardin
built its jail in 2007 as an economic development project, but has been
unable to fill it.
October 5, 2009 KULR 8
On Sunday morning, there were some visible changes to California-based
security company American Police Force's website. What previously read
"American Police Force" now uses the company's formal name
"American Private Police Force." Another notable change is the
company's crest. The previous crest was a near copy of the Serbian Coat of
Arms. On Friday, KULR-8 news first reported the Serbian government was
looking into possible legal action against APF for using the crest. The
group's leader, Capt. Michael Hilton said the crest was a family emblem and
he used it to honor his grandfather. APF Spokeswoman Becky Shay said she is
not aware of any lawsuit from the consulate and Hilton made the change as,
"the quickest thing he could to diffuse tension" with the old logo.
She would not elaborate on exactly what those tensions were. Along with
changes to the company's image come changes to the potential contract with
Hardin's economic development group Two Rivers Authority. Spokesman Al
Peterson said board members will meet Monday afternoon to discuss the
contract, which was recently looked over by an independent tax expert.
Peterson said some of the language has been changed to ensure the bond, held
by U.S. Bank, remains tax exempt. If TRA board members approve the contract,
it will still need to be approved by APF and U.S. Bank. Peterson added that
the bond is a revenue bond; meaning residents of Hardin will never be
responsible for paying it back. It can only be paid for by income from the
Hardin Jail itself.
October 2, 2009 AP
A California company’s bid to take over an empty jail in rural Montana
appears to be unraveling, with an attorney involved in the project cutting
ties Friday and a second company, once named as a subcontractor, denying any
involvement. Those moves followed revelations earlier in the week that
Michael Hilton — the lead figure of the company, American Police Force — is a
convicted felon with a history of fraud and failed business dealings in
California. “We met with him and he asked us if we can support him,” said
Edward Angelino with Allied Defense Systems, an Irvine, Calif.-based defense
contractor. “We checked his background, we checked his company. He’s not an
adequate person to do business with.” Hilton had said he had a contract with
Allied Defense Systems to provide uniforms. Santa Ana attorney Maziar Mafi had served as the legal affairs director for
American Police Force. Mafi said he wanted to see the project begin to move
forward before he could continue his involvement. “For the time I’m pulling
out,” Mafi said Friday. “I need to see more concrete action before I can be
involved.” American Police Force reached a deal last month with officials in
Hardin, Mont., to operate the city’s jail, which never has held an inmate
since its 2007 completion. Hilton has said he would bring more than 200 new
jobs to the struggling community, through the jail and a military and
law-enforcement training center he pledged to build. A spokeswoman for the
company, Becky Shay, indicated the project remained on track. She said a job
fair for prospective jail employees still will be held during the week of
Oct. 12. Shay said she was unaware of the move by Allied Defense Systems. As
for Mafi, she said she hadn’t spoken with him directly but was told he felt
there was a conflict of interest. Shay, who quit her job with the Billings
Gazette to work for Hilton, said she remained confident in American Police Force.
She said Hilton told her when she was hired about his criminal record and
several civil judgments against him totaling more than $1.1 million. Those
judgments remain outstanding. “A lot of people that know me, know about me
have asked me if I’ve been duped,” she said. “No.” Hilton, who returned to
California after spending several days in Hardin, intends to return for the
job fair, Shay said. The contract on the jail agreed to by some city
officials and the company, but never ratified by US Bank, which has a stake
as trustee for $27 million in construction bonds used to pay for the 464-bed
facility. No money has changed hands between Hardin and American Police
Force. Hardin Mayor Ron Adams said Friday that despite his reservations about
the project, he would still like to see it go forward so the city can fill
its jail. Mafi’s involvement began last month, when Hilton brought him on
about the same time he reached an agreement with Hardin’s Two Rivers
Authority, which owns the jail. Alex Friedmann with the Private Corrections
Institute — a group that long has been critical of Hardin for building a jail
that would be privately run — suggested Mafi’s departure was a sign the
project is doomed to failure. “He sees the ship is going down and he wants to
not be on that ship when it sinks,” Friedmann said. Hilton, who claims an
extensive military background and calls himself “captain,” initially
described Mafi as a “major” in American Police Force. He later said Mafi was
the company’s president — although Mafi denied the role and said he had no
military or security background.
October 2, 2009 AP
A California attorney who worked with a fledgeling
security company to take over an empty jail in rural Montana has cut his ties
to the project. Santa Ana attorney Maziar Mafi had
served as the legal affairs director for American Police Force. His departure
follows revelations that the company's lead figure—Michael Hilton—is a
convicted felon with a history of fraud and failed business dealings.
Hilton's company reached a deal last month with officials in Hardin, Mont. to
operate the city's jail, which has never been used. The contract has yet to
be ratified by a bank involved in the project and no money has changed hands.
Mafi said he wanted to see more concrete action on the project before he
could continue his involvement.
October 2, 2009 KULR 8
Now that Hilton's criminal past is revealed, concerned Montana citizens show
up at the Hardin jail demanding answers. Both APF and Two Rivers Authority
officials tell us they were aware of Hilton's checkered past but still
believe in his promise to bring prisoners to Hardin. Toni Myers drove from
Columbus, Montana, in search of answers in the ongoing story between the
Hardin Jail and American Police Force. "I want to know who they are,
where they're coming from, and who they're bringing with them," said
Myers. "My job is not to give you the answers you want my job is to give
the information I've been employed to release or not release," said APF
spokesperson Shay. Shay spent all day answering questions from media members
and the public after an AP story linked the security firm's leader Michael
Hilton to multiple bankruptcies and convictions for more than a dozen
felonies. "Michael disclosed this information to me before I agreed to come
work for him," said Shay. Along with Shay, TRA Vice President Al
Peterson said he knew about the convictions long before the report came out
but is still confident in APF. "I firmly believe APF is legitimate and a
solid corporation," said Shay. Peterson declined an on camera interview
but released this statement saying quote "I believe that the TRA has a
better chance of getting the detention facility open with APF than with any
Montana officials. What do we have to lose if it doesn't work out," said
Peterson. APF also continues to stand firm on its stance to not releasing the
parent company. "That information won't be disclosed," said Shay.
But Myers and others like her pledge to continue their research and to try to
get to the bottom of the mystery behind the Hardin Jail. Calls to Michael
Hilton were not returned. Becky Shay says Hilton is currently in California
on business and is expected back in Hardin in the next couple weeks.
October 1, 2009 Montana Standard
Montana Attorney General Steve Bullock launched an investigation Thursday
into American Police Force, the California company founded by a Serbian
immigrant with a lengthy criminal history that is seeking to run an empty,
464-bed jail in Hardin. Bullock sent a nine-page demand letter late Thursday
afternoon to Becky Shay, the spokeswoman for APF and the company's only
Montana employee. Shay did not immediately respond to phone calls Thursday.
According to the document, Bullock is launching the civil investigation into
APF over concerns that the company might be violating the Montana Unfair
Trade Practices and Consumer Protection Act. Among other things, Bullock
demanded that the company provide proof for many statements about the company
included on APF's Web site. The site says that the company frequently has
contracts with the U.S. government and has operations in all 50 states.
Research into the company has turned up no record of APF contracting with the
federal government. Bullock has requested that the company provide proof of
its federal contracts and operations in other states. Bullock also requested
a copy of the contract between APF and Two Rivers Authority, the economic
development arm of the city of Hardin, which built the jail two years ago.
The contract is reportedly a 10-year, multimillion-dollar deal with APF to
run the jail. Although Michael Hilton, the man behind APF, and local
officials say the deal is as good as done, US Bank, the trustee for the bonds
sold to build the jail, has never signed off on it. Bullock further requested
that the company disclose any lawsuits filed against the com-pany or Hilton and provide the state with any
correspondence between APF and any government agency that has accused the
company of being deceptive. Bullock also sent a letter Thursday to Gary Arneson
and Al Peterson, leaders of Two Riv-ers Authority.
Peterson could not be reached for comment Thursday. Both letters were sent
the day after The Billings Gazette and Associated Press reported that Hilton
has an extensive criminal past with $1.1 million in outstanding civil
judgments against him. Hilton, who has a long list of aliases, left his
native Serbia in the 1970s and has served time in U.S. prisons. Hilton uses
the military title "captain," but said this week it does not refer
to an actual military rank. Hilton has claimed he has military experience,
but no record of such experience has been found. Also on Thursday, Montana's
three-man congressional delegation all said they have questions about APF,
even as they support Hardin's efforts to drum up jobs for its people.
"Like many Montanans, Max is keeping an eye on the situation in
Hardin," said Ty Matsdorf, a spokesman for
Sen. Max Baucus, D-Mont. Aaron Murphy, a spokesman for Sen. Jon Tester, also
a Democrat, said Tester has "a lot of questions" about APF.
"Hardin and all of Montana need to benefit from whatever's in store for
the Two Rivers jail." A spokesman for Rep. Denny Rehberg,
a Republican, said "important questions need to be answered," and
added "any deal that creates jobs and economic prosperity without
putting Montanans at risk is something Denny would support in any way he
can." Rehberg in May wrote a letter to state
officials urging Montana to consider placing its own inmates at the jail if
the state needed more prison cells.
October 1, 2009 Billings Gazette
Plans to deconsolidate law enforcement in Hardin and Big Horn County have
been seriously jeopardized by the uproar over the company hoping to lease
Hardin's vacant jail, the former city attorney said Thursday. Becky Convery
said she and Hardin Mayor Ron Adams were still hoping to keep deconsolidation
efforts on track despite the "huge amount of controversy"
surrounding American Police Force, the shadowy company that has been
negotiating to lease the 464-bed jail. After years of discussion and
negotiation, the city and county were close to working out an agreement that
would allow Hardin to create its own police department, ending a decades-long
arrangement under which the Big Horn County sheriff provided all law
enforcement in Hardin and the county. Fears that APF was going to establish a
private police agency in Hardin have stirred up "severe opposition"
to the proposal, Convery said. On Sept. 23, a week after the city's economic
development arm, Two Rivers Authority, announced that it had signed a 10-year
contract with APF to run the jail, APF representatives showed up in Hardin
driving three Mercedes Benz SUVs bearing magnetic decals that said "City
of Hardin Police Department." That was alarming enough to some people,
and it helped spawn rumors - soon spread across the country on the Internet -
that Hardin was being occupied by a private police force. Then, on Thursday,
The Billings Gazette and Associated Press identified APF representative
Michael Hilton as an ex-convict with a long history of criminal activity.
"Residents of Hardin and Bighorn County have come unglued," Convery
said, and they were flooding the county commission's office with phone calls
expressing opposition to deconsolidation. Convery also said she resigned
Thursday as a contract attorney for Two Rivers Authority. She said she was
hired several weeks ago to help TRA negotiate its contract with APF but
resigned because those duties now conflict with the work she was doing for
the city on deconsolidation. Convery said she worked on the deconsolidation
issue when she was city attorney, a job from which she resigned last
February. In June, she said, she contracted with the city to continue working
on deconsolidation through a Billings law firm. TRA, also known as Two Rivers
Port Authority, and specifically its now-suspended director, Greg Smith,
exceeded its authority by suggesting to Hilton that American Police Force
might want to take over policing for the city of Hardin, Convery said.
"Unfortunately, the port authority, quite frankly, had no authority to
enter into those discussions," she said. She said Smith, who was placed
on paid leave two days after announcing the deal with APF, told her
previously "that he initiated that conversation" with APF. "I
personally was furious because I spent three years of my life working for the
city of Hardin on deconsolidation," she said. Smith, who has not spoken
publicly since being suspended, could not be reached for comment Thursday. In
addition to working on contract language for the TRA, Convery accompanied
Smith and board vice president Al Peterson to California early last month,
where they met with Hilton and APF attorney Mazair
Mafi to complete contract negotiations. Convery said the arrival of the
Mercedes SUVs decked out as Hardin police vehicles was especially ill-timed
because it happened the night before the County Commission held a public
hearing on the proposal. The Hardin City Council has already voted in favor
of consolidation and the commission was to have voted on the issue by Oct. 1.
That deadline has been extended to next week. County Commissioner John Doyle
said the commission expects to vote on the question next Tuesday, but the
date isn't certain yet. Doyle said a stipulation worked out between the city
and county is being reviewed by attorneys and will be made public before the
commission takes it vote. Meanwhile, a member of the TRA board said Thursday
that revelations about Hilton's criminal history had no bearing on efforts to
lease the jail to American Police Force. "It's really irrelevant,"
said Tim Murphy, a Hardin dentist. "I feel like you guys want to slam
this whole deal any way you can. I'm sure there's somebody with a criminal
history working for The Billings Gazette." Murphy was the only member of
the seven-person TRA board to return phone calls Thursday. Murphy said the
only important question was whether APF makes its first lease payment in
February, as planned. Its contract with TRA calls for the company to make
annual payments of $2.6 million beginning Feb. 1. The contract, however, has
not yet been signed by the bondholders who bought $27 million in city-issued
bonds that were used to build the jail. Murphy said he was not concerned
about Hilton's past because Hilton is only an employee of APF. He said he
hadn't personally met anyone else involved in the company, but that other
members of the TRA had. Repeating complaints that TRA board members and
others in Hardin have been making for years, Murphy said Gov. Brian
Schweitzer bears most of the blame for the troubles surrounding the vacant
jail. He accused Schweitzer of snubbing the city by refusing to house state
prisoners in Hardin, and then vetoing plans to open a sex-offender treatment
center in the jail. "If the governor was doing everything in his power
to stop you, what would you do?" Murphy asked. He added later,
"There are a lot of people that would prefer Hardin remain
stagnant." Becky Shay, APF's spokeswoman in Hardin, did not return phone
calls Thursday, but she said Wednesday that Hilton had returned to California
earlier in the week. She said he and his associates drove to California in
two of the three Mercedes SUVs. She is still driving the third.
October 1, 2009 AP
Montana's attorney general has launched an investigation into a
California company's plan to take over the city of Hardin's $27 million jail,
following revelations that the company's lead figure is a convicted felon
with a history of fraud. Michael Hilton, who formed Santa Ana, Calif.-based
American Police Force in March, came to Hardin last month promising to fill
the city's never-used jail and build an adjacent military and law enforcement
training center. Hilton has a decades-long track record of fraudulent
activities and spent several years in a California prison on grand theft charges.
The native of Montenegro uses at least 17 aliases. Attorney General Steve
Bullock said Thursday he is asking Hardin officials for all documents related
to their dealings with Hilton and American Police Force.
September 30, 2009 AP
Michael Hilton pitched himself to officials in Hardin, Mont. as a
military veteran turned private sector entrepreneur, a California defense
contractor with extensive government contracts who promised to turn the rural
city's empty jail into a cash cow. Hardin's leaders were desperate to fill
the $27 million jail, which has sat empty since its 2007 completion. So when
Hilton came to town last week — wearing a military-style uniform and offering
three Mercedes SUVs for use by local law enforcement — he was greeted with
hugs by some grateful residents. The promise of more than 200 new jobs for a
community struggling long before the recession hit had won them over. But
public documents and interviews with Hilton's associates and legal
adversaries offer a different picture, that of a convicted felon with a number of aliases, a string of legal judgments against
him, two bankruptcies and a decades-long reputation for deals gone bad.
American Police Force is the company Hilton formed in March to take over the
Hardin jail. "Such schemes you cannot believe," said Joseph Carella, an Orange County, Calif. doctor and co-defendant
with Hilton in a real estate fraud case that resulted in a civil judgment
against Hilton and several others. "The guy's brilliant. If he had been
able to do honest work, he probably would have been a gazillionaire," Carella said. Court documents show Hilton has outstanding
judgments against him in three civil cases totaling more than $1.1 million.
As for Hilton's military expertise, including his claim to have advised
forces in Iraq and Afghanistan, those interviewed knew of no such feats.
Instead, Hilton was described alternately by those who know him as an arts
dealer, cook, restaurant owner, land developer, loan broker and car salesman
— always with a moneymaking scheme in the works. Hilton did not return
several calls seeking comment. American Police Force attorney Maziar Mafi referred questions to company spokeswoman
Becky Shay. When asked about court records detailing Hilton's past, Shay
replied, "The documents speak for themselves. If anyone has found public
documents, the documents are what they are." Shay declined comment on
Hilton's military experience. Al Peterson, vice president of Hardin's Two
Rivers Authority, which built the jail, declined to comment on Hilton's legal
troubles. He refused to say if he knew about Hilton's past when the authority
reached a 10-year agreement with American Police Force last month. The deal
is worth more than $2.6 million a year, according to city leaders. Hilton has
also pledged to build a $17 million military and law enforcement training
center. And he's promised to dispatch security to patrol Hardin's streets,
build an animal shelter and a homeless shelter and offer free health care to
city resident's out of the jail's clinic. Those additional promises were not
included in the jail agreement, which remains in limbo because US Bank has so
far declined to sign off on the contract. The bank is the trustee for the
bonds used to fund the jail. A US Bank spokeswoman declined to comment, but
Peterson was adamant the deal would be approved. "It's a solid deal.
That's all I'll say," he said. But a representative of a corrections
advocacy group that has been critical of Hardin's jail and has investigated
Hilton's past said city leaders dropped the ball. "I'm amazed that city
officials didn't do basic research that would have raised significant
questions about American Private Police Force and Mr. Hilton's
background," said Alex Friedmann, vice president of the Private Corrections
Institute. Hilton, 55, uses the title "captain" when introducing
himself and on his business cards. But he acknowledged it was not a military
rank. He said he is naturalized U.S. citizen and native of Montenegro.
Aliases for Hilton that appear in court documents include Miodrag
Dokovich, Michael Hamilton, Hristian
Djokich and Michael Djokovich.
One attorney who dealt with Hilton in a fraud lawsuit referred to him as a
"chameleon" and he has a reputation for winning people over with
his charm. His criminal record goes back to at least 1988, when Hilton was
arrested in Santa Ana, Calif. for writing bad checks. Beginning in 1993,
Hilton spent six years in prison in California on a dozen counts of grand
theft and other charges including illegal diversion of construction funds.
The charges included stealing $20,000 in a real estate swindle in which
Hilton convinced an associate to give him a deed on property in Long Beach,
Calif., ostensibly as collateral on a loan. Hilton turned around and sold the
property to another party but was caught when the buyer contacted the
original owner. After his release, he got entangled in at least three civil
lawsuits alleging fraud or misrepresentation. Those included luring investors
to sink money into gold and silver collectible coins; posing as a fine arts
dealer in Utah in order to convince a couple to give him a $100,000 silver
statue; and, in the case involving co-defendant Carella,
seeking investors for an assisted living complex in Southern California that
was never built. Carella said he was duped into
becoming a partner in the development project and that Hilton used Carella's status as a physician to lure others into the
scheme. He was described in court testimony as a "pawn" used by
Hilton to lure investors. Those involved with Hilton say he is an
accomplished cook with a flair for the extravagant — wining and dining
potential partners, showing up at the Utah couple's house to negotiate for
the silver statue in a chauffeur-driven Mercedes. "This is the way we
got taken," said Carolyn Call of Provo, Utah, who said she gave Hilton
her family's silver statue to sell on the open market. According to court
documents, Hilton turned around and gave the statue to an attorney to pay for
his services. Two California attorneys said Wednesday that after learning of
Hilton's latest activities they planned to follow him to Montana to seek
payment on the outstanding judgments against him. "Once I know that
there is an asset or some sort of funds to go after, we'll go after it,"
said Call's attorney, Roger Naghash.
September 28, 2009 KULR 8
Confusion and secrecy about American Police Force has grown during the
last few weeks. "APF has been here for 10 months but it has never been
stealth," said APF spokesperson Becky Shay at a press conference on
Saturday morning. The group announced its plans to fill the $27 million
dollar detention facility and build a police training center next to the
jail. While they gave details for the site, other questions went unanswered.
Where will the prisoners come from? What experience does APF have in
prisoners and training police officers? Why was Two Rivers Authority
Executive Director Greg Smith placed on administrative leave? During the
press conference APF also refused to release any information on its funding
or organization "The decision is the name of the parent company will not
be released," said Shay. When questioned about the decision to show up
in Hardin last week in vehicles with "Hardin Police" templates,
members were brief in their explanation. "They are to show are
intentions are good," said APF leader Captain Michael Hilton. "Why
not put an APF logo on it," said Shay. "You know we're getting
there." All of the decals were removed from the vehicles two days later.
APF has consistently stated the community has nothing to fear and says its
plans will help stimulate the Hardin economy. "This corporation's
intention is to buy local and stay local and do local business as much as we
can," said Shay. Residents appear split in their feelings over the
company. Some want more information, but others believe it will be a
tremendous boost to the area. The company plans to hold a job fair in Hardin
the third week of October. Another development this weekend was the naming of
Shay as APF's new public relations director. Shay was a reporter with the
Billings Gazette who had covered the detention facility story for last few
years. She announced on Friday she was leaving the paper and hosted the APF
press conference Saturday morning. American Police Force spokesperson, Becky
Shay, said the private police group would not house terror suspects from
Guantanamo Bay, Cuba.
September 26, 2009 AP
After arriving in this rural city with three Mercedes SUVs marked with the
logo of a nonexistent police department, representatives of an obscure
California security company said preparations were under way to take over
Hardin's never-used, $27 million jail. Significant obstacles remain—including
a lack of any prisoner contracts on the part of the company that wants to run
the jail, American Police Force. And on Friday came the revelation the
company's operating agreement for the facility has yet to be validated—two
weeks after city leaders first unveiled what they said was a signed agreement.
Still, some Hardin leaders said the deal to turn over the 464-bed jail
remained on track. The agreement with American Police Force has been heavily
promoted by members of the city's economic development branch, the Two Rivers
Authority. Authority Vice President Albert Peterson on Friday repeated his
claim to be "100 percent" confident in the company. The lead public
figure for American Police Force, Michael Hilton, said more than 200
employees would be sought for the jail and a proposed military and law
enforcement training center. That would be a significant boost to Hardin, a
struggling town of 3,500 located about 45 miles east of Billings. An earlier
announcement that a job fair would be held during the last week never came to
fruition. The bonds used to pay for the jail have been in default since May,
2008. Hilton also said he planned a helicopter tour of the region in coming
days to look at real estate for a planned tactical military training ground.
He said 5,000 to 10,000 acres were needed to complement the training center,
a $17 million project. But the company's flashy arrival this week stirred new
questions. The logo on the black Mercedes SUVs said "City of Hardin
Police Department." Yet the city has not had a police force of its own
for 30 years. "Pretty looking police car, ain't it?" Hardin
resident Leroy Frickle, 67, said as he eyed one of
the vehicles parked in front of a bed and breakfast where Hilton and other
company representatives were staying. "The things you hear about this
American Police, I don't know what to think." Hilton said the vehicles
would be handed over to the city if it forms a police force of its own. The
city is now under the jurisdiction of the Big Horn County Sheriff's Office.
After meeting briefly with Hilton on Friday, Mayor Ron Adams said he wanted
the police logos removed. "This helps, but it doesn't answer everything
until the contract is signed," Adams said. "Talk is cheap."
Hilton said the company's arrival in Hardin would help allay such concerns.
And he promised that on Feb. 1, 2010, Hardin would receive its first check
under a deal said to be worth more than $2.6 million annually. Little has
been revealed to date about American Police Force. The company was
incorporated in California in March, soon after Hardin's empty jail gained
notoriety after city leaders suggested it could be used for the Guantanamo
Bay terrorism detainees. Members of Montana's congressional delegation say
they have been closely monitoring the events in Hardin, but the city has
largely been going it alone. In the two years since the jail was built, city
leaders have clashed repeatedly with the administration of Gov. Brian
Schweitzer, who opposed efforts to bring in out-of-state prisoners. After
then-Attorney General Mike McGrath issued a 2007 opinion saying prisoners
from other states were prohibited, Hardin successfully sued the state.
Despite the city's contention that the state has continued to foil its
efforts to find prisoners, Montana Department of Corrections spokesman Bob Anez said his agency is no longer involved. "That's
water under the bridge," Anez said. On Friday,
American Police Force announced its first local hire: a reporter for the
Billings Gazette, Becky Shay, who has covered events surrounding the jail
since its construction. She will be the company's spokeswoman for $60,000 a
year. Shay said she intended to bring new transparency to the process, but
declined to directly answer the first question posed to her: Where is
American Police Force getting the money to operate the jail and build the
training center? "I know enough about where the money is coming from to
be confident signing on with them," she said. Gazette Editor Steve Prosinski said he was first informed about Shay's
decision to leave the paper on Friday. "We weren't aware that she was
talking with them about employment," he said. Hilton said he also had a
job discussion with Kerri Smith, wife of Two Rivers Authority Executive
Director Greg Smith, who helped craft the deal to bring American Police Force
to Hardin. Greg Smith was placed on unpaid leave two weeks ago for reasons
that have not been explained. Kerri Smith is one of two finalists in the
city's mayoral race. Hilton said he asked her to call him about possible
employment if she did not win the race. Kerri Smith could not be reached
immediately for comment. A message was left by The Associated Press at a
theater owned by the Smith family. Her home number is unlisted.
September 25, 2009 Billings Gazette
American Police Force, the company contracting with Two Rivers Authority to
run its new-but-empty jail in Hardin, announced Friday its new public
relations person. Becky Shay, a former Billings Gazette reporter whose beat
included the Hardin facility, accepted the position Friday. Shay was
announced as APF's spokesperson by Michael Hilton, leader of the company.
Gazette Editor Steve Prosinski said he found out
about Shay's new job on Friday when she resigned from the newspaper. "We
weren't aware that she was talking with them about this position until she
resigned," he said.
September 24, 2009 KULR 8
American Police Force officials showed up in Mercedes SUV's that had
"Hardin Police" stenciled on the vehicles. The twist, the city of
Hardin doesn't have a police department. Two Rivers Authority officials say
having APF patrol the streets was never part of their agenda. "I have no
idea. I really don't because that's not been a part of any of the discussions
we've had with any of them," said Two Rivers Authority's Al Peterson. As
it stands now the Big Horn County Sheriff's Department is contracted to
patrol the city and APF has no jurisdiction. If that was changed Peterson
says it would have to go through the city council. As for the jail contract
with APF, both sides are yet to agree to a deal as bondholders rejected it
again on Thursday morning. "It's a complicated issue there are a lot of
tax laws to work through we were hoping to get it by Tuesday night now we're
hoping to get it by Friday night," said Peterson. Officials say the
contract only deals with the detention facility and a police training center.
There's no mention of a homeless shelter, animal shelter, or any services for
the area. "That was never in the contract to begin with. I think it was
on a wish list of what Captain Michael wanted to do here," said
Peterson. American Police Force officials plan to stay in the area for the
next month.
September 22, 2009 KULR 8
Less than two weeks after Hardin officials announced an agreement with
American Police Force to house prisoners and stimulate the Hardin economy the
questions and controversy continue. APF officials want to build an animal
shelter and police training center, but private prison expert Frank Smith,
who's spent the last 13 years researching private jails, says the plan
doesn't seem legitimate. "It doesn't make any sense at all. They come on
like Mother Theresa in camo," said Smith about the APF. The jail expert
claims the first problem American Police Force will have in trying to meet
its end of the bargain is filling the jail. "APF doesn't have any juice
in this fight. It's a fight for contracts where they'd be up against mammoth
corporations," said Smith who claims there are thousands of beds already
available in the private jail sector. The Hardin facility only adds to that
problem. "They're talking about closing a prison in Oklahoma because
there's no prison they've closed one in Michigan," said Smith. The
private jail experts also fear that the 10 year agreement will force the city
of Hardin into a financial meltdown, something he's seen happen first hand at
private jails in Coke County, Texas and Tallulah, Louisiana. "They go
bad often," said Smith. "They don't virtually ever
produce the economic benefits they are touted to produce." A lot of
mystery still surrounds the facility and Hardin officials hope to clear that
up when they release the contract to the public. Officials claim to have done
their homework and believe APF is a justifiable group that has every
intention to fill the jail and help the residents of Hardin for the next
decade.
September 16, 2009 Billings Gazette
The executive director of Two Rivers Authority has been placed on paid leave
just days after the economic development agency announced a new contract that
could fill its empty jail. Greg Smith was placed on leave last Friday,
according to TRA board member Al Peterson. Smith has been executive director
of Two Rivers since late 2007, shortly after the authority opened the
detention center it built as a potential employer and economic boost for the
community. Peterson declined to comment about the removal, calling it a
personnel issue. Peterson, vice president of the Two Rivers board, is serving
as spokesman for the authority. Two Rivers board president Gary Arneson
delivered the letter informing Smith he was on leave, Peterson said. It
wasn't clear this week if Two Rivers and Smith would try to come to terms or
if his employment will end. As recently as last Thursday, Smith was giving
news media interviews and joined a conference call with jail bond holders as
they haggled over details in a contract with a California company to operate
the jail. Smith, who does not have a listed home telephone number, has not
returned messages left at the Centre Cinema, which his family has owned for
about 25 years. Smith's wife, Kerri, advanced in a primary race Tuesday for
Hardin mayor. Smith was hired to replace James Klessens,
who was director for about a year but left to take a job in Cody, Wyo. Smith
has a degree in business management and experience in marketing and sales. He
retired from the Air National Guard in 2008. Smith has been the public face
of Two Rivers as the board tried to find contractors for the empty $27
million jail. This spring, the agency and the Hardin city council tried to
obtain a contract to hold detainees from the closing Guantanamo Bay prison.
Smith was thrown into a swirl of media that included nationally known radio
and television personalities and international print media that wanted to
know why Hardin would consider taking the terrorism suspects. Two Rivers has
signed a 10-year contract with a California company called American Private
Police Force Organization, or APF. Michael Hilton from APF said Smith was
pivotal in contract negotiations to obtain from the company a $5-per-day fee
for each inmate in the jail. Negotiations on the daily fee began at $2, he
said. "Without Mr. Smith that would not have happened," Hilton
said. "He did his best and he succeeded." Hilton also said that
Smith, Peterson and city attorney Becky Convery were the reason his company
decided to contract with Hardin to operate the jail. The company's larger
goal is to build a training center on the land adjacent to the facility.
Little is known about the company, which says it specializes in international
security. However, Peterson said board members individually and as a group
have seen enough documentation - although he wouldn't elaborate on what type
of documents - and have met personally with representatives of the company
and believe it is both solvent and trustworthy. Two Rivers board members
include: Arneson, plant manager at the Hardin Generating Station; Peterson,
Hardin's superintendent of schools; Larry Vandersloot,
superintendent of the city of Hardin's public-works department; Bill Joseph,
owner of Joseph Construction; Dr. Tim Murphy, owner of Hardin Dental Clinic,
the board secretary; and Robert Crane, owner/agent of the State Farm
Insurance agency in Hardin, treasurer.
September 13, 2009 AP
The Two Rivers Detention Center was promoted as the largest economic
development project in decades in the small town of Hardin when the jail was
built two years ago. But it has been vacant ever since. City officials have
searched from Vermont to Alaska for inmate contracts to fill the jail, only
to be turned down at every turn and see the bonds that financed its
construction fall into default. They even floated the idea of housing
prisoners from Guantanamo Bay at the jail. So when Hardin officials announced
last week that they had signed a deal with a California company to fill the
empty jail, it was naturally a cause for celebration. Town officials talked
about throwing a party to mark the occasion, their dreams of economic
salvation a step closer to being realized. But questions are emerging over
the legitimacy of the company, American Police Force. Government contract
databases show no record of the company. Security industry representatives
and federal officials said they had never heard of it. On its Web site, the
company lists as its headquarters a building in Washington near the White
House that holds "virtual offices." A spokeswoman for the building
said American Police Force never completed its application to use the
address. And it's unclear where the company will get the inmates for the
jail. Montana says it's not sending inmates to the jail, and neither are
federal officials in the state. An attorney for American Police Force, Maziar Mafi, describes the Santa Ana, Calif., company as
a fledgling spin-off of a major security firm founded in 1984. But Mafi
declined to name the parent firm or provide details on how the company will
finance its jail operations. "It will gradually be more
clear as things go along," said Mafi, a personal injury and
medical malpractice lawyer in Santa Ana who was hired by American Police
Force only a month ago. "The nature of this entity is private security
and for security purposes, as well as for the interest of their clientele,
that's why they prefer not to be upfront." On its elaborate Web site and
in interviews with company representatives, American Police Force claims to
sell assault rifles and other weapons in Afghanistan on behalf of the U.S.
military while providing security, investigative work and other services to
clients "in all 50 states and most countries." The company also
boasts to have "rapid response units awaiting our orders worldwide"
and that it can field a battalion-sized team of special forces soldiers
"within 72 hours." Representatives of American Police Force said
the company presently employs at least 16 and as many as 28 people in the
United States and 1,600 contractors worldwide. "APF plays a critical
role in helping the U.S. government meet vital homeland security and national
defense needs," the company says on its Web site. "Within the last
five years the United States has been far and away our" No. 1 client.
However, an Associated Press search of two comprehensive federal government
contractor databases turned up no record of American Police Force.
Representatives of security trade groups said they had never heard of
American Police Force, although they added that secrecy was prevalent in the
industry and it was possible the company had avoided the public limelight.
"They're really invisible," said Alan Chvotkin,
executive vice president and counsel for the Professional Services Council.
The group's members include major security contractors Triple Canopy, DynCorp
and Xe Services, formerly known as Blackwater Worldwide. "Even a single
unclassified contract in the last couple of years should show up" in the
federal database, Chvotkin said. Spokesmen for the
State Department and Defense Department said they could not immediately find
any records of contracts with the company. The city has not released a copy
of its agreement with American Police Force. But the deal as announced would
be a sweet one for Hardin, a depressed rural town of 3,500 about 45 miles
east of Billings. The company is pledging to fill the 464-bed facility by
early next year. Hardin officials say the first payment on the contract is
due Feb. 1 - regardless of whether any prisoners are in place. The city's
economic development authority would get enough money to pay off the
bondholders and receive $5 per prisoner a day. American Police Force also is
promising to invest $30 million in new projects for the city, including a military
and law enforcement training center with a 250-bed dormitory and an expansion
of the jail to 2,000 beds. The company says it will build a homeless shelter,
offer free health care for city residents and even deliver meals to the
needy. Where the prisoners would come from is unclear. City officials said
California was the most likely possibility, but a spokesman for that state's
corrections system said there was no truth to the claim. Federal prisoners
also were mentioned by both American Police Force and the city. U.S. Marshal
Dwight MacKay in Billings said he would have been notified if such a plan was
pending. "There's skepticism over whether this is a real thing,"
MacKay said. Hardin officials said they were approached by American Police Force
about six months ago, soon after the city made international news in its
quest to become "America's Gitmo." American Police Force
incorporated around the same time. Albert Peterson, the city's school
superintendent and vice president of the authority that built the jail, said
the city was "guaranteed" the contract would be upheld.
"There's never a question in my mind after I've done my homework. It's
legit," Peterson said of American Police Force. "We believe in each
other." The contract was still being reviewed by the city attorney, he
said. Peterson refused to answer when asked if he knew the name of American
Police Force's parent firm. He said news coverage of the city's political
tussles with the administration of Gov. Brian Schweitzer had left him
suspicious of the press. The administration brought a court challenge over
whether Hardin could take out-of-state inmates at the jail. "If you're
looking for the source of the money, you're not going to find it from
me," Peterson said. A member of the Texas consortium that developed the
jail, Mike Harling, said he had "every reason to believe they'll be
successful." Mafi, the American Police Force attorney, said his company
intends to reverse Hardin's recent problems with the jail and give the town
an economic boost. In Santa Ana, American Police Force occupies a single
suite on the second floor of a two-story office building. During a visit to
the location Thursday, a reporter for The Associated Press encountered a
uniformed man behind a desk who would identify himself only as "Captain
Michael." The man declined to discuss basic details about the company
and referred the reporter to the company's Web site. In a subsequent phone
interview, he provided his surname but insisted it not be used because of
security concerns. The man said he was a naturalized U.S. citizen born in
Montenegro with decades of experience in military and law enforcement
operations. The man said his boss is a retired U.S. Army colonel named
Richard Culver who is currently overseas. Culver's role with the company
could not be immediately verified. The company claim of a headquarters
address is just up the street from the White House. The K Street building
houses "virtual offices," where clients pay to use the prestigious
Pennsylvania Avenue address and gain access to onsite conference rooms but
have no permanent presence. "It lets small businesses get started up and
have a professional front and not have a lot of a cash to do it," said
Ashley Korner with Preferred Offices, which leases the location. She said
American Police Force's application to use the address was pending but
incomplete.
September 11, 2009 AP
An empty jail where promoters tried unsuccessfully to bring Guantanamo
Bay terrorism detainees has landed a 10-year operating contract with a private
security firm that says it wants to sharply expand the lockup. The deal to
house hundreds of low- and medium-security inmates in the Hardin jail
involves American Police Force, a Santa Ana, Calif., company that was
incorporated six months ago. City leaders trumpeted the agreement as a
potential savior for a $27 million economic development project that has
become a civic embarrassment after sitting idle for more than two years. But
outside Hardin, skepticism lingered. A California corrections system spokesman,
Gordon Hinkle, said there was "no truth" to assertions by city
officials that prisoners from California would likely be housed in the jail.
And U.S. Marshal Dwight MacKay in Billings rebutted claims that federal
prisoners could be involved. "I don't know where in the heck they're
getting them from," MacKay said. The firm's spokesman, Maziar Mafi, said American Police was spending
"serious money" to get the jail running and expected to fill it to
capacity by March. He said there were no inmate contracts in place, but that
negotiations were ongoing with federal and state corrections agencies.
"What we'd like to do is have that information revealed once contracts
are entered into and they are done deals," Mafi said. "It's very
real." Mafi said the firm has extensive law enforcement and military
security contracts and runs detention centers in other countries. But he said
he could not go into details, citing confidentiality issues. He also declined
to say who was in charge of the firm, saying it had "multiple
layers" and had been founded more than a century ago in Washington, D.C.
Mafi is a Santa Ana trial attorney specializing in personal injury, medical
malpractice and criminal law. He said he was hired a month ago as American
Police Force's legal director. The firm occupies a suite in a Santa Ana
office building. Full terms of the Hardin contract were not provided. But
Albert Peterson, vice president of Hardin's Two Rivers Authority, the city's
quasi-public economic development agency, said the agency would receive $5
per prisoner a day and enough additional money to pay off the $27 million in
bonds still owed on the jail. Those bonds went into default last year.
Peterson is also superintendent of Hardin's public schools. Under the plan
offered by American Police Force, the existing 464-bed jail would be expanded
to include a 102,000 square-foot military and law enforcement training
center, a homeless shelter, animal shelter and possibly enough beds for as
many as 2,000 prisoners. Mafi said the firm planned to invest $30 million in
new construction at the jail site at the edge of Hardin, a town of 3,500
located about 45 miles east of Billings. That includes at least $17 million
for the training center, which is envisioned to offer everything from sniper
training to DNA analysis for domestic and international law enforcement and
military personnel. But the operating contract, signed Sept. 4, is limited to
the existing jail, said Two Rivers' Executive Director Greg Smith. "All
this stuff kind of takes time," he said. "The focus here to me is
on the detention center — get the thing open and run it." Smith said he
had been told by American Police Force representatives that the firm had been
in the detention business years ago, but said did not have any details. He
added that "all sorts of vetting is going on" to make sure American
Police Force can deliver on its end of the contract. American Police Force
claims to have 28 employees in the United States and 1,600 contractors
worldwide. On its Web site, it lists services ranging from convoy security in
war zones such as Iraq to assault weapons sales and investigations into
cheating spouses. Members of the authority and Hardin officials have spent
much of the last two years searching for inmate contracts to no avail. Asked
about the likelihood of American Police Force succeeding, Smith said he was
confident the first batch of 150 to 200 prisoners would be in place by
mid-January.
September 10, 2009 AP
An empty jail where promoters tried unsuccessfully to bring Guantanamo
Bay terrorism detainees has landed a 10-year contract with a private security
firm that wants to sharply expand the lockup. The deal to house hundreds of
low- and medium-security inmates in the Hardin jail involves American Police
Force, a company with international security operations that has offices in
Washington, D.C., and Santa Ana, Calif. Full terms of the contract were not
provided. Albert Peterson, vice president of Hardin's Two Rivers Authority,
the city's quasi-public economic development agency, said the agency would
receive $5 per prisoner a day and enough additional money to pay off $27
million in bonds still owed on the jail. Those bonds went into default last
year. The first batch of prisoners most likely would come from California's
state prison system, said Peterson, who also serves as superintendent of
Hardin's public schools. He said federal prisoners also were a possibility. A
captain with American Police Force who asked to remain anonymous because of
security concerns said the existing 464-bed jail would be expanded to include
a 102,000 square-foot military and law enforcement training center, homeless
shelter, animal shelter and possibly enough beds for as many as 2,000
prisoners. He said the firm did not yet have contracts for inmates but
expected to get at least 1,000 now that it has a place to house prisoners. He
said the firm plans to invest $30 million in new construction at the jail
site at the edge of Hardin, a town of about 3,500 located about 45 miles
southeast of Billings. The prison was built by the authority as an economic
development project in cooperation a consortium of Texas developers. Its
backers had hoped to land contracts to house state and federal inmates. But
it has remained empty after the administration of Gov. Brian Schweitzer said
it had no need for the facility and other contracts never materialized.
"Thank you, governor, for turning Hardin down, because now we've got
something that's 10 times better," Peterson said. U.S. Marshal Dwight
MacKay in Billings said he had no further details on the contract. "I
read they're going to get federal prisoners. I don't know where in the heck
they're getting them from," MacKay said. Montana Department of
Corrections spokesman Bob Anez said his agency was
not involved in the deal between Two Rivers and American Police Force.
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.
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