PRIVATE CORRECTIONS INDUSTRY

NEWS BULLETIN
Vol. 2 - No.3

Reporting Oil Prison Privatization and Related Issues

March 1999

CCA Settles Youngstown Lawsuit
On March 1, 1999 CCA agreed
to pay $1.65 million plus $803,000
in attorney fees and expenses to settle
a class-action suit filed by Washington, D.C. prisoners at the company's
Northeast Ohio Correctional Center
in Youngstown.
The lawsuit, brought by three
inmates in Aug. 199.1, claimed unsafe
conditions because maximum-security
prisoners were being housed at the
medium-security Youngstown prison.
At least 13 stabbings, two of them
fatal, occurred at the facility within a
one-year period; CCA subsequently
was ordered to transfer hundreds of
maximum and close-security inmates
to other prisons.
The lawsuit also claimed that
CCA guards had used excessive force
during incidents in which prisoners
were tear gassed and subjected to
strip and body cavity searches. CCA
will pay an additional $100,000 for
confiscating inmates' personal property during shakedowns.
The suit further alleged inadequate medical care - at least three
prisoners have died due to medical
causes since the facility opened (see

PCINB, Nov. 1998,pg. 3). The settlement provides that health care at the
prison must meet National Commission on Correctional Health Care
standards.
The City of Youngstown joined
the prisoners' suit in 1998. Under a
separate agreement the city will receive $130,000 a year to cover the
cost of two independent monitors to
oversec the facility.
Inmates who. died at the prison
and who caused injuries to others are
excluded from the monetary portion
of the settlement; the families of two
prisoners stabbed to death at the facility are pursuing separate lawsuits
against CCA. The three inmates who
filed the class-action suit will each
receive $9,500, prisoners who were
tear gassed will get $1,000, mediumsecurity inmates will receive $500,
and maximum-security inmates will
be paid $300.
"We're pretty happy. When
you balance it out, it's a pretty fair
settlement because it ensures permanent reform to make the prison
safe and provide adequate medical
care," said Alphonse Gerhardstein, a

Cincinnati attorney who represented
the inmate plaintiffs. During the litigation CCA unsuccessfully tried to
obtain a gag order to prevent Mr.
Gerhardstein from speaking to the
media (PCINB, Sept. 1998, pg. 5).
The settlement of the Youngstown suit also resolves claims against
the District of Columbia, which was
named as a defendant
Although CCA's contract required the company to represent and!
or indemnify the District, there was
disagreement as to whether CCA was
fulfilling its contractual obligation.
CCA and D.C. officials resolved the
matter after the District filed a complaint with the D.C. Contract Appeals
Board (PCINB, Dec. 1998, pg. 4).
The Youngstown settlement
must be approved by U.S. District
Court Judge Dan A. Polster, who has
scheduled an April 20 hearing. CCA
officials noted the company did not
admit any wrongdoing in agreeing to
settle the lawsuit. 0
Sources: The Tennessean, March 2,
1999; The CommerCial Appeal (TN),
March 3, 1999.

<0 1999 - P.C.I. News Bulletin, 3193-A Parthenon Avenue, Nashville, TN 37203

P.C.I. News Bulletin

ADMINISTRIVIA
The P.C.I. News Bulletin (PCINB) is
a monthly publication that reports on
prison privatization and related issues,
primarily within the United States.

Copyright
PCINB is copyright © 1999. Non-profit
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PCINB will happily and enthusiastically
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persons who report copyright violations
that result in successful litigation or
settlements, as detennined by PCINB.

Address
P.C.I. News Bulletin, 3193-A Parthenon
Avenue, Nashville, Tennessee 37203.

Legal Stuff
The information presented in this publication is not intended to supplant the
services I advice of legal or correctionsrelated professionals. The editors of and
contributors to PCINB disclaim any liability,loss or risk, personal or otherwise,
incurred as a direct or indirect consequence of the use and application of any of
the contents of this newsletter. So there.

WANTED
Articles, clippings and news reports
regarding the private corrections industry - please include the source
and date of all materials submitted.

2

March 1999

Prison Guards Stage Protest at
Wackenhut Headquarters
Public corrections employees
staged a vocal demonstration outside
the corporate office of Wackenhut
Corrections in Palm Beach Gardens,
Florida on Feb. 5, 1999. Approximately 125 prison guards from as far
away as Alaska formed a picket line
in front of the company's headquarters, displaying signs that read
"Wackenhut protects its profits not
the public."
The anti-privatization protest
took place on the second day of a
three-day meeting sponsored by Corrections USA (CUSA), a nonprofit
organization for public prison workers. The Florida Police Benevolent
Association, which represents 15,000
corrections officers throughout the
state, helped organize the rally.
Prison guards who took part in
the protest argued that private prison
companies do not conduct adequate
criminal background checks on their
employees and do not provide sufficient staff training. They also said
privately-operated prisons are able to
conceal information about assaults,
escape attempts and other securityrelated incidents because they aren't
subject to public scrutiny.
"Wackenhut hides behind [a]
corporate wall," stated Jim Baiardi,
president of the corrections officers
division of the Florida Police Benevolent Association.
"Corrections should be something the public is aware of," added
Mike Halley, of the Worcester, Mass.
Sheriff's Department. "The safety of
the inmates and the officers is a concern when dollars come into play."
CUSA spokesman Brian Dawe
called for public disclosure by private

prison operators. "We want them to
disclose all their practices," he said
''What it will show is that their claims
are false. Their costs aren't lower.
They aren't any more efficient"
Wackenhut spokesperson Pat
Cannan said the company trains its
officers according to the same standards as public prison employees,
submits regular reports of incidents
such as fights and disturbances to
the Dept. of Corrections, and offers
comparable pay and benefits - although he acknowledged that they
may be lower than the state average
in some areas.
He also said the company does
not choose which inmates are housed
at its facilities, refuting claims that
private prison operators "cherry pick"
prisoners who are less expensive to
incarcerate.
Cannan defended Wackenhut's
safety record, calling it "exemplary at
all our locations." He did not comment about on-going problems at the
company's Lea County Corr. Facility
in Hobbs, New Mexico, where two
inmates have been stabbed to death
in recent months (see pg. 6).
CUSA is pressing for more
stringent regulation of the private
prison industry and hopes to gain
public support through its high-profile demonstrations. In October '98
CUSA staged a protest in front of
CCA's corporate office in Nashville,
Tenn. (PCINB, Oct. 1998, pg. 6). 0
Sources: The Herald Tribune (FL),
Feb. 6, 1999; The Palm Beach Post,
Feb. 6, 1999; The Sun Herald (FL),
Feb. 6, 1999; The Miami Herald,
Feb. 5, 1999.

P.C.I. News·Bulletin

3

March 1999

Florida Forgoes Prison Privatization
Other Private Corrections
Industry Resources
Corrections and Criminal Justice
Coalition (CCJC), Route 2, Box
1144, Harpcrs Feny, WV 25425
(888) 315-8784; www.ecjc.com.
A consortium of anti-privatization
corrections employees' unions.
Corrections USA (CUSA), P.o.
Box 394, Newton, NH 03858
(603) 382-9707; www.cusa.org.
A professional association of public corrections employees opposed
to prison privatization.
Prison Reform Trust, 15 Northburgh Street, 2nd Floor, London,
ECIV OJR England; phone: 01144-171-251-5070; e-mail: prt@
prisonrefonn.dcmon.co.uk. Publishes
the Prison Privalisalion Report Int'I
(PPRl), which covers news about
the private corrections industry in
the U.S. and abroad.
Private Corrections Project, Center
for Studies in Criminology and
Law, Univ. of Florida, Gainesville,
FL 32611 (352) 392-1025; web
site: web.crim.ufl.edlpcp. Conducts
research into prison privatization.
Note that the Project receives f\U1ding from the private corrections indusby; Prof. Charles W. Thomas,
director of the Project, is also a director of Prison Realty Corp.
Reason Foundation, 3415 S. Sepulveda Blvd. #400, Los Angeles,
CA 90034 (310) 391-2245; www.
reason.org. A libertarian-oriented
think-tank that favors prison privatization. Note that the Foundation
receives funding from Wackenhut,
Securicor and U.S. Corrections.

Although Florida is home to
two private prison companies, Correctional Services Corp. and Wackenhut, the Sunshine State is forgoing
further prison privatization, at least
for now.
There are five privately-run
prisons in Florida and the legislature
has authorized two more. But according to Mark Hodges, director of the
Correctional Privatization Commission, the facilities won't be built anytime soon. "We kind of took off the
table the two we were given last year;'
he said.
A surplus of bed space following a prison-building boom in the
1980s has doubled the size of the
state's corrections system, and additional prisons aren't needed.
Another contributing factor to
the cutback in prison privatization
is lackluster cost savings. Florida
lawmakers initially set a goal of 7%
savings by private prison operators.
But according to a 1997 report by the
Office of Program Policy Analysis
and Gov't Accountability, "The private prisons did not provide the state

with the 7% level of overall cost savings anticipated."
The FL Dept. of Corrections
estimates the state paid, on average,
$50.5 I per inmate per diem at publicly-operated facilities in 1997-98,
and $49.29 per inmate per diem at
private prisons - a savings of less
than 2.5%.
The slowdown in prison privatization comes amid intense lobbying by private prison companies:
Wackcnhut has contributed at least
$88,500 to the Republican Party of
Florida and $44,500 to the Florida
Democratic Party since 1996.
Private prison contractors are
now seeking specialty markets for
correctional services, such as drug
treatment facilities and medical prisons. "My approach is going to be
talking to people about a longer-term
strategy, like some niche markets that
private industry will be able to fiU,"
said long-time WackeDhut lobbyist
Damon Smith. 0
Source: The Miami Herald, February
5, 1999.

County Considers Buying CCA Facility
Polk County, Florida Sheriff
Lawrence Crow has proposed purchasing a I,008-bed jail being built
by CCA as a way to save money
and reduce overcrowding in the local
lockup.
In 1997 the county commissioners approved a contract for a $35
million facility to be constructed and
operated by CCA, which would lease
bed space to the county. The contract
provided the county could buy the
facility for thc price of construction

plus 3% in administrative costs.
Crow said the $36 million price
tag - excluding operating expenses
- would be offset by closing the old
jail, transferring prisoners presently
housed in other counties, and using
money that would have been paid to
CCA under the lease arrangement.
The CCA facility, being built
ncar Frostproof, will open July I. 0
Source: The Tampa Tribune, Feb. 9,
1999.

p.e.I. News Bulletin

4

March 1999

Private Prison Conference Held in MN
In tbe News
Wackenhut Corrections has withdrawn a proposal to build a private
prison in Prairie du Chien, Wisconsin after facing opposition from
a local community group and the
Wisconsin Assoc. of Correctional
Officers. Source:PPRl, Feb. 1999.
Correctional Properties Trust, a real
estate investment trust {REIn spun
off by Wackenhut Corrections last
year, has purchased Wackenhut's
1,500-bed Lawton Corr. Facility in
Lawton, OK for $45 million and
~ 600-bed expansion at the company's Lea County Corr. Facility in
Hobbs, NM for $22.5 million. The
REIT will lease the prisons back
to Wackenhut. Source: The Palm
Beach Post, Jan. 20, 1999.
A privately-operated I,OOO-bed facility being built in Tallahatchie
County, Mississippi is expected to
bring 240 jobs and an annual payroll of up to $4 million. Source:
USA Today, Feb. 16, 1999.
Hawaii Governor Ben Cayetano has
aMounced he will seek a private
company to build a state prison if
he CaMot win legislative support
for a bond issue to fmance construction of the facility. Source: USA
Today, March 4,1999.
Nevada corrections director Bob
Bayer has announced plans to privatize prison health care services;
medical care for state inmates costs
about $30 million a year. Source:
USA Today, March 8, 1999.

Over 100 researchers, union
representatives, and public and private-sector corrections officials attended a prison privatization conference in Minneapolis on January
29-30, 1999. The conference was organized by the Minnesota School of
Law, Institute on Criminal Justice.
The tone of the conference was
decidedly anti-privatization. Chuck
Davis, an economist, presented the
keynote address in which he outlined
the history of the contemporary private prison industry and observed
that "privatization is neither a necessary nor sufficient condition for
improving economic perfonnance in
the field of corrections."
Jamie Fellner of Human Rights
Watch, a New York-based nonprofit
agency, said privatized prison management does not guarantee safe or

humane conditions of confmement.
Ohio state Sen. Mark Mallory
described problems at the CCA-operated Northeast Ohio Corr. Center in
Youngstown, including difficulties in
obtaining state and local oversight of
the privately-run prison.
Frank Hall, a fonner senior
public corrections official who is now
employed by CCA, presented the
private sector's side.
The fmal workshop panel of
the conference included representatives from organized labor groups,
who discussed strategies to oppose
prison privatization.
In March 1999 the Minnesota
legislature will consider a proposal to
privatize a state prison being built at
Rush City. 0

CCA DonationS

Expansion in AZ

CCA C.E.O. Doctor R. Crants
donated $4,000 to Wisconsin politicians between Sept. and Dec. of last
year. Crants contributed $2,500 to
Gov. Tommy Thompson's election
campaign and lesser amounts to the
Assembly Speaker, Senate Majority
Leader, chairman of the Assembly
Corrections Committee, and three
Republican members of the Joint
Finance Committce.
Crants began making the donations soon after Wisconsin inmates
were abused at a CCA-mn facility in
Tenn. (peINB, Dec. 1998, pg. 1).
The three finance committee
members voted in December to approve the transfer of an additional
357 state prisoners to a CCA facility
in Oklahoma. Source: The Milwaukee
Journal Sentinel, Feb. 18, 1999.

Prison Realty Corp. announced
on March 8, 1999 that it will design
and build a $60 million, 1,600-bed
addition to an existing private prison
in Florence, Arizona.
The facility will be leased by
Correctional Management Services,
which operates with two other companies under the CCA name.
The project is expected to generate $31 million in additional annual
revenue; construction was scheduled
to start in February '99. The facility
will hold state and federal inmates.
The existing prison in Florence,
the Central Arizona Detention Center, is owned by Prison Realty Corp.
and operated by Correctional Management Services/CCA. Source: The
Tennessean, March 9,1999.

Source: PPRI, Feb. 1999.

P.C.I. News Bulletin

In the News
On Jan. 27, 1999 Stephanie Stitt,
fonnerly incarcerated at the Washington Corr. Institution in Georgia,
was awarded $600,000 in her lawsuit against Correctional Medical
Services, Inc. A jwy found that the
eompany negligently failed to provide timely and adequate care for
Stitt's back problem while she was
in prison, which resulted in pennanent disability after she was released. Source: The Atlanta JournalConstitution, Jan. 29, 1999.
New Hampshire officials arc considering privatizing prison medical
and mental health care services annual health care costs in the state
corrections system are around $5
million. Public corrections employees oppose the idea. Source: USA
Today, March 2, 1999.
Wisconsin State Senate President
Fred Risser has called for an end to
the practice of sending prisoners to
facilities in other states. Wisconsin
houses about 2,600 inmates in outof-state prisons, including CCA facilities in TN and OK. Source: USA
Today, March 11, 1999.
Utah officials are reviewing bids for
a privately-operated SOO-bed prison, the state's first contract with a
private prison company. The facility
will house minimwn- and mediwnsecurity inmates and is scheduled
to open in April 2000. Source: USA
Today, March 22, 1999.

. 5

March 1999

WA Inmates Involved
in Uprising

Missouri DOC Refutes
Newspaper Article

On March 3, 1999 around 260
Washington prisoners were flown to
the CCA-operated Crowley County
Corr. Facility in Olney Springs, CO.
Washington Governor Gary Locke
approved the transfer as an emergency solution to relieve overcrowding
in the state's prison system.
Two days later Washington inmates were involved in a six-hour
disturbance at the Colorado facility.
The disturbance reportedly started
after a prisoner was denied a nonmeat substitute at the afternoon meal
and hit a staff member with a tray.
The incident escalated when
other inmates returned to their cell
blocks. According to The Denver Post
they kicked doors, broke windows
and flooded their cells. State prison
SWAT teams were called to the facility to restore order, and the prison
was put on lockdown. A guard and an
inmate received minor injuries.
Richard Marr, a deputy warden
at the Crowley Co. facility, said the
prisoners were under a lot of tension
because they were far from home. He
also noted they were displeased with
the prison's no-smoking policy. "If
you're a smoker and go to a nonsmoking facility, it probably bothers
you," he said.
Washington is paying $51 per
prisoner per diem to house its excess
inmates at the privately-operated facility, and has sent state corrections
employees to the prison to monitor
the contract Washington officials say
they intend to move several hundred
more inmates to Colorado. 0

On Sept. 27,1998 the St. Louis
Post-Dispatch published a 12-page
report that highlighted deficiencies in
privatized prison health care, including 20 cases nationwide in which inmates died due to alleged negligence,
understaffing, insufficient training or
cost-cutting by medical companies.
Many of these cases involved
St. Louis-based Correctional Medical
Services, Inc. (CMS), the country's
largest correctional health care provider. CMS provides medical services
for the Missouri prison system.
In early Feb. 1999 the Missouri
Dept. of Corrections reJeased a report
criticizing the Post-Dispatch article.
The 300-page DOC report accused
the newspaper of sensationalism and
making misleading statements.
In many areas the DOC report
explained statements made in the
Post-Dispatch article without CODtradicting them. The department also
tried to discredit Dr. Kevin Martin, a
former CMS medical director who
had said in the newspaper article that
he quit because the company emphasized reducing costs over provid~
ing treatment.
Despite its criticisms the DOC
report also proposed changes to help
the department monitor its contract
with CMS, and to review deaths of
prisoners in state facilities.
"Regarding the criticisms leveled at the paper, we have investigated all of the allegations contained
in the department's report and stand·
by our original stories," said Richard
K. Weil, executive editor of the PostDispatch. 0

Sources: The RocJ..y Mountain News,
March 7, 1999; The Denver Post,
March 6, 1999; Prison Legal News.

Source: St. Louis Post-Dispatch, Feb.
10, 1999.

P.C.I. News Bulletin

6

TN Lawmaker Introduces Private Prison Legislation
Tennessee state Senator Pete
Springer has introduced 15 bills to
regulate the private prison industIy,
including several designed to end the
practice of incarcerating out-of-state
inmates in privately-operated facilities. "I don't think the majority of
people from Tennessee realized we
were housing prisoners from other
states," he said.
Senator Springer presented his
bills to the legislative Select Oversight Committee on Corrections on
March 11. Gov. Don Sundquist, who
has business and financial ties to
CCA, indicated he strongly opposes
the proposed legislation based on
philosophical grounds.
Senator Springer's bills would
accomplish the following if passed:
...
Prohibit inmates not sentenced
to the Tenn. Dept. of Correction from
being housed in privatized prisons.
Several Select Oversight Committee
members questioned whether this
would interfere with the Interstate
Commerce Clause. But according to a
recent opinion by the Tenn. Attorney
General, "a statute which strictly prohibits the incarceration of out-of-state
inmates in Tennessee may not be necessarily construed as interfering with
the Interstate Commerce Act because
the incarceration of out-of-state inmates by a private company may not
be legal without a lending authority
of the sovereign powers of the receiving state."
Do
Impose a privilege tax of $10
million on each private prison operating in Tennessee; a separate bill
would impose a tax of $33.33 per
inmate per diem on privately-run facilities that house out-of-state pris-

oners. The Select Oversight Committee noted that such taxes would
make private prisons inherently unprofitable, which may illegally interfere with interstate commerce.

March 1999

Wackenhut's Woes

Sen. Springer's proposed legislation will next move to the Senate
State and Local Government Committee. A separate regulatory bill for
privately-operated prisons housing
out-of-state inmates has been introduced by members of the Select
Oversight Committee (see PClNB,
Feb. 1999,pg. 5). 0

Wackenhut has experienced a
series of problems at the company's
Lea County Corr. Facility in Hobbs,
New Mexico.
Three inmates at the privatelyoperated prison have been implicated
in the murder of fellow prisoner Jose
Montoya, who was stabbed to death
on Dec. 10, 1998.
Just a month later, on January II, another inmate was stabbed
to death. There have been at least
7 other stabbings at the 1,200-bed
facility since it opened in May '98,
and New Mexico officials have had
to send in state corrections officers
to conduct security training.
Last November three Wackenhut employees at the prison lost their
jobs and four were reprimanded following an incident involving misuse
of force (PClNB, Nov. 1998, pg. 6).
"It's pretty clear that this is not
a well-run prison and that taxpayers
aren't getting their money's worth,"
said state Sen. Cisco McSorley.
. Hobbs Mayor Joe Calderon
expressed dismay about the level of
violence at the facility. "I'm getting
concerned about what's happening
in there. Is it going to spill out in the
community?" he questioned.
Inmates have filed 45 lawsuits
against fonner Lea Co. warden Al
Parke. State District Judge Ralph
GaIlini said it sometimes takes all
day to process the complaints being
filed at the Wackenhut facility; he is
considering hiring another law clerk.
Warden Parke transferred to a prison
in Colorado six months after the Lea
County facility opened. 0

Sources: The Tennessean, March 12,
1999; The Jackson Sun (TN), March
12, 1999; SOCC comments.

Sources: The New MeXican, Jan. 15,
1999; The Albuquerque Journal, Jan.
14, 1999; Nov. 19, 1998.

...
Require private prison contractors to reimburse the state for the
cost of capturing escapees. Another
bill would require private prison contractors to post a $10 million bond
for the capture of escaped inmates.
Do
Require private prison companies to reimburse state and local
authorities for costs incurred due to
crimes committed by inmates housed
in privately-run facilities.

Prohibit any contract with a
private prison operator if any individual owning more than 5% of
the company has been convicted of a
felony or fraud within the past ten
years. A separate bill would require
background checks of private prison
employees.
Do

...
Terminate the state's contract
with CCA to operate the South Central Corr. Center in Wayne County,
and return the prison to state control
within three months.