November 2008

The controversial new CEC jail in Waco has been delayed due to trouble issuing revenue bonds to finance the project. According to an article in the Waco Tribune ("Rough financial markets delaying construction of new McLennan jail," November 19),

McLennan County commissioners Tuesday postponed for the third straight week issuing project revenue bonds to finance the new jail because of high bond interest rates. Community Education Centers, the New Jersey-based company that is to oversee the new jail’s construction and operation, would be responsible for paying the interest on bonds the county sells to third-party financial houses.

County Judge Jim Lewis said officials had hoped to break ground for the new jail this month. However, the county is waiting to see whether the financial markets stabilize, allowing for reasonable bond interest rates. In the meantime, Lewis said, the project cannot go forward. He did not know how long the county would hold out on issuing the bonds.

“We could sell these bonds today if we wanted to, but we’d be selling them for 10 percent interest or more,” Lewis said, citing the stock market’s large fluctuations in the last week. “If we tell (CEC) that we’re selling for that high of interest, they’d say there is no way they can make this work. So it would be a prudent business decision to wait and see how the market does.”

The new jail would be privately run by CEC, which currently operates the downtown jail. The 816-bed jail would be built next to the present county-run jail on State Highway 6 and would help alleviate some jail overcrowding issues plaguing McLennan County. The new facility will cost about $37.4 million and will take 12 to 14 months to complete, according to Hale Mills Construction Ltd., the jail’s builder.

Last month, a Willacy County grand jury indicted The GEO Group, a Florida private prison company, on a murder charge in the death of a prisoner days before his release. The three-count indictment alleged The GEO Group allowed other inmates to beat Gregorio de la Rosa Jr to death with padlocks. The murder took place at the Raymondville prison in 2001.

In 2006, a jury ordered GEO to pay de la Rosa's family a civil judgment of $47.5 million. Earlier this week, District Attorney Juan Angel Guerra also indicted Vice President Richard Cheney, former Attorney General Alberto Gonzalez, and state Senator Eddie Lucio, Jr.

The Associated Press reports:

Cheney is charged with engaging in an organized criminal activity related to the vice president's investment in the Vanguard Group, which holds financial interests in the private prison companies running the federal detention centers. It accuses Cheney of a conflict of interest and "at least misdemeanor assaults" on detainees because of his link to the prison companies. ...

The indictment accuses Gonzales of using his position while in office to stop an investigation in 2006 into abuses at one of the privately-run prisons. ...

Another indictment released Tuesday accuses Lucio of profiting from his public office by accepting honoraria from prison management companies. Guerra announced his intention to investigate Lucio's prison consulting early last year.

The Corrections Corporation of America (CCA) held an investor conference call earlier this month. During the call, CCA officials celebrated that the company's income continues to increase while expanding private prison capacity across the country. Yet, digging deeper tells a different story.

According to Forbes.com, the private prison profiteer reduced its 2008 earnings outlook the second time in three months. According to Forbes, "The company now expects 2008 earnings of $1.18 per share to $1.20 per share, down from its earlier outlook of $1.21 to $1.24 a share."

Reports indicate that part of the company's failings deal with California and end of transfering state prisoners to a CCA managed facility. The company had increased staffing in anticipation of intaking California prisoners, and when that did not happen it impacted CCA's bottom line.

However, CCA Officials mentioned the following highlights compare that third quarter of 2008 to the third quarter of 2007:

• Net income increased 13.8% to $37.9 million from $33.3 million;
• Adjusted Free Cash Flow increased 12.5% to %62.0 million from $55.1 million;
• Total average daily compensated population increased 5.4% to 77,695 during the third quarter of 2008 from 73,740 during the third quarter of 2007; and
• 1,680 new beds placed into service during the third quarter of 2008.

According to CCA's records, the company's prison population increased by 6,534 beds placed in service since the end of the second quarter of 2007. CCA added capacity in Texas at the Eden Detention Center, where 129 new beds were added for a total of 1,558 beds.

The Associated Press is reporting ("Idaho Ends Contract with GEO-run Texas Prison," Houston Chronicle, November 13), that the Idaho Department of Corrections has canceled its contract with the GEO-run Bill Clayton Detention Center in Littlefield, Texas.  According to the article,

BOISE, Idaho — The Idaho Department of Correction has terminated its contract with private prison company The GEO Group and will move the roughly 305 Idaho inmates currently housed at a GEO-run facility in Texas to a private prison in Oklahoma.

Idaho Department of Correction Director Brent Reinke notified GEO officials Thursday in a letter.

Reinke said the company's chronic understaffing at the Bill Clayton Detention Center in Littlefield, Texas, put Idaho offenders' safety at risk.

An Idaho Department of Correction audit at the facility found that guards routinely falsified reports to show they were checking on offenders regularly — even though they were sometimes away from their posts for hours at a time.

The Bill Clayton facility was also the facility where Idaho prisoner Randall McCullough committed suicide after being held in solitary confinement for more than a year on an administrative penalty after being involved in a fight.