GEO Cancels Contract at Pennsylvania Jail, Looks Elsewhere for Business

by David M. Reutter

GEO Group, Inc. (formerly known as Wackenhut Corrections), the second-largest private prison company in the nation, has operated the jail in Delaware County, Pennsylvania since 1995. GEO reportedly saved the county $30 million when it built the 1,883-bed George W. Hill Correctional Facility (GHCF); in December 2007, GEO and the county agreed on an $80 million two-year contract renewal.

From all appearances it seemed the privatization of GHCF, which is the only privately-operated county jail in Pennsylvania, would result in a permanent relationship between GEO and Delaware County. However, citing “underperformance and frequent litigation,” GEO gave notice that it planned to terminate the contract on December 31, 2008. Today the jail is under another company’s management.

While GEO’s premature pullout was unexpected, it was hardly surprising. PLN’s December 2007 cover story detailed numerous problems at GHCF, which have resulted in several six-figure settlements brought by families of prisoners who died at the facility. Many of those cases involved deficient medical care, mental health care or supervision by jail staff.

GEO’s cancellation of its contract to operate the Delaware County facility came only four months after another death. That incident involved a high-profile prisoner, and an autopsy indicated he died from complications related to cystic fibrosis, which his family claimed GHCF had failed to treat.

Those who regularly listen to Howard Stern’s radio show are familiar with Kenneth Keith Kallenbach, who was a member of the “Wack Pack.” Kallenbach, 39, had been housed at GHCF since March 27, 2008 on a probation violation. The violation stemmed from an arrest for allegedly trying to lure a teenage girl into his car; he had previously been placed on probation after pleading guilty to a DUI-related offense.

Cystic fibrosis is a chronic condition in which abnormally thick mucous builds up in the lungs and digestive system. Prior to entering GHCF, Kallenbach managed his condition by taking enzymes to help digest his meals and by using a salt-water breathing machine at home.

When the police officer who arrested Kallenbach saw him at an April 15, 2008 preliminary hearing, he was shocked by Kallenbach’s gaunt appearance. “He looked bad,” said Officer Mark Smalarz. “I said, ‘Kenny, man, you’re really losing weight.’” Actually, he was dying.

On April 24, Kallenbach succumbed to pneumonia; a subsequent autopsy found his death resulted from “complications of cystic fibrosis, with bronchiectasis, acute and organizing pneumonitis and sepsis.” After the medical examiner’s July 19, 2008 report was released, Kallenbach’s family indicated they might sue. “They definitely killed my son,” stated Fay Kallenback, Kenneth’s mother. A little more than a month later, GEO announced its contract termination and pullout.

According to GHCF’s Acting Superintendent, John A. Reilly, Jr., GEO cited “higher than average workers’ compensation” claims as one reason for abandoning its contract. Beyond inadequate medical care, retaining quality employees has been another ongoing problem for GEO. In 2008, Delaware County imposed $700,000 in fines against the company for understaffing at GHCF. Further, some of GEO’s employees have had a hard time staying out of jail themselves.

In July 2008, former GHCF guard Michael Waters, 37, pled guilty to a charge of institutional sexual assault for having sex with a female work release prisoner – which, although consensual, was illegal. He was sentenced to three to 23 months in jail. Earlier that same month, guard Nytara Hall, 30, pleaded guilty to forgery. She reportedly forged a letter to the parole board so her boyfriend, who had a murder conviction, could live with her.

Other GEO guards at GHCF have pleaded guilty to sexual assault and conspiracy to commit bank robbery, while two former jail guards were convicted of assaulting a restrained prisoner with a basketball. In August 2007, GHCF guard Samuel Willis was arrested for attempting to lure two underage girls into his car while he was off-duty.

It is the financial bottom line, however, that is the driving force behind GEO’s abrupt pullout from Delaware County. The company has long had a history of providing substandard services and medical treatment while settling any lawsuits that survive the preliminary stages. As most prisoner suits are filed pro se, few advance past that point. The lawsuits at GHCF, however, have involved such egregious facts that the settlements were not for nominal amounts as attorneys were willing to take the cases.

GEO paid settlements of $300,000 and $125,000 in 2000 and 2005, respectively, to the families of jail prisoners who committed suicide. In 2006, the company paid $100,000 to the family of Rosalyn Atkinson, who died following a fatal dose of blood pressure medication. A lawsuit filed by the family of Brian Sullivan, a prisoner who died in April 2005 of a heroin overdose – his second overdose at the jail in five months – was settled confidentially in 2006. Most recently, on October 22, 2008, GEO agreed to pay an undisclosed amount to settle a wrongful death suit involving Cassandra Morgan, who died at GHCF due to an untreated thyroid condition. [See: PLN, Dec. 2007, p.1].

Angus Love, Director of the Pennsylvania Institutional Law Project, has handled several lawsuits against GHCF, including one case in which a prisoner with HIV received “virtually no treatment” and another where prison staff removed a cast from a prisoner who had a broken bone. Even Reilly, the Acting Superintendent at the facility, admitted that the medical department at GHCF had “underperformed.”

While GEO can withstand large settlements, which are often paid by its insurance carrier, the number of expensive lawsuits involving GHCF proved too much for its profit margin. Reilly estimated that claims at the Delaware County jail constituted about 70 percent of GEO’s litigation expenses company-wide. “I just think they’re losing money here,” he said.

With eight prisoner deaths at GHCF since 2005, GEO faces several potentially large settlements or verdicts in pending lawsuits, including an anticipated suit resulting from Kallenbach’s death. With a few rare exceptions, the company has been unable to expand its business operations above the Mason-Dixon Line; consequently, GEO appears to be retreating to areas where it can flourish, particularly in the South.

The company has also been greasing the political wheels of politicians who have already hopped on the privatization bandwagon. It is very generous with such political contributions.

New Mexico Gov. Bill Richardson has been one of the largest recipients of GEO graft. The company and its corporate officers and employees have given Richardson over $67,750 for his re-election campaign and presidential campaign. When Richardson was chairman of the Democratic Governor’s Association, GEO gave that organization $30,000. In 2006, the firm contributed $66,450 to New Mexico state candidates.

GEO, however, is not the only private prison contractor that plays this game. Corrections Corporation of America (CCA) donated $18,700 to New Mexico politicians in 2006.
Prison food vendor Aramark contributed $60,000 to Richardson and his running mate in their re-election campaign. And Wexford Health Services gave Richardson $20,000 in 2005 and 2006 combined.

GEO has its sights set on Florida, too, where the company is headquartered. GEO gave Florida politicians a total of $395,925 in 2006.

Why all of this money going to lawmakers in New Mexico and Florida? Both states have proven willing to contract with private prisons companies, and thus are good candidates for future expansion. GEO currently operates 4 facilities in Florida and 3 in New Mexico.
But while the location may change, GEO’s business model of providing cut-rate prison services and inadequate medical care is unlikely to be any different.

On January 1, 2009, another private prison company, Community Education Centers (CEC), took over GEO’s contract to operate GHCF in Delaware County. While the new contractor might provide better services and adequate health care, that appears unlikely. Notably, CEC is presently facing a class-action suit over deficient medical treatment at the company’s Coleman Hall re-entry facility in Philadelphia.

Sources: Delco Times, Philadelphia Daily News, Associated Press, The New Mexican, Philadelphia Inquirer, www.philly.com, www.kyw1060.com, www.tradingmarkets.com