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Florida Privatizing Prisons could Prove Profitable to Politically-Connected Companies

Alex Constantine - April 6, 2011

A South Florida company that operates private prisons could profit from lawmakers’ plans to outsource corrections operations.

Miami Herald/Times | April 5, 2011

money prison - FloridaTALLAHASSEE -- The Florida Legislature’s push to privatize many more prisons, its most far-reaching cost-cutting plan in years, could open a lucrative door to politically connected vendors who stand to profit.

Senate and House budgets require the state to privatize prisons in South Florida, home to one-fifth of the statewide inmate population of 101,000. The region is the home of the GEO Group, the nation’s second-largest private prison operator, which currently runs two private prisons, including the largest private lockup, the Blackwater River Correctional Facility in Milton.

GEO also operates five state psychiatric hospitals, including South Florida State Hospital in Pembroke Pines, which got its long-sought accreditation after GEO’s takeover.

The Boca Raton company, a reliable contributor to the Republican party, employs more than 2,000 people and a stable of 16 Capitol lobbyists. It donated $25,000 to Gov. Rick Scott’s inaugural celebration in January. A top transition budget adviser to Scott, Donna Arduin, is a former trustee of a GEO real estate company, Correctional Properties Trust. The company’s healthcare subsidiary, GEO Care, is led by Jorge Dominicis, a familiar figure in the Capitol from years of lobbying for the sugar industry.

In recent testimony before the Senate, Dominicis touted the advantages of privatization and said his firm achieves savings through higher staffing ratios — more inmates per staff member.

“The private sector can more easily be held accountable. Government tailors contracts to ensure outcomes,” he said. “The way we should move forward is with no preconceived notions.”

GEO’s main competitors are Corrections Corporation of America, the nation’s largest private prison operator, and Management and Training Corp.

The Senate’s more aggressive plan would outsource prisons and probation services in an 18-county region from Bradenton to Key West, while the House would privatize prisons and probation only in Miami-Dade and Broward counties.

Under both proposals, private vendors would have to run prisons for at least 7 percent less money than state-run prisons.

The powerful lawmaker championing the privatization push, Senate Budget Chairman J.D. Alexander, R-Lake Wales, says the vendors will chosen through open competition by the Department of Corrections, not by legislators.

“I don’t know who it would benefit,” Alexander said. “We hope to have multiple bidders. We would go through a full procurement process and take the best bids possible.”

Some of the early momentum for prison privatization came from a policy brief by the Reason Foundation, a conservative think tank with GEO Group among its many donors, and Florida TaxWatch, a business-backed policy group. The Department of Corrections proposed privatizing all inmate healthcare as a cost-saving venture — despite major problems in recent years with privatizing health — but it has not suggested privatization of prisons.

“It’s the Legislature’s proposal. We’d like to remain neutral on that,” said Dan Ronay, the prison system’s deputy secretary, who is still adjusting to the politics dynamics in a state where lawmakers exert much closer oversight of prisons than elsewhere.

But Ronay, a former Indiana prison executive, said he had never heard of a state hiring a private company to run probation operations.

“I don’t see a system of probation ever being privatized,” he said.

Ronay said he has had positive experience with the GEO Group, which runs two prisons for sex offenders and short-term youthful offenders in Indiana. Describing a GEO-run prison in Newcastle, Ind., Ronay said: “It was run professionally if not a little bit above our mainstream facilities. They run a pretty good ship.”

Other states have had spottier experiences with GEO-run facilities, the subject of several NPR reports last month.

In Mississippi, where the company took over the nation’s largest juvenile prison last August, a class-action lawsuit on behalf of 13 inmates alleges contraband brought in by guards, sex between guards and inmates, inadequate medical care and prisoner violence that led to brain damage, the news organization reported.

In Texas, the youth commission canceled a contract in 2007 to manage a juvenile center after auditors conducted an announced visit and found “rampant mismanagement,” NPR wrote. Less than two years ago, the company pulled out of a prison in Littlefield, Texas, after a suicide scandal.

The GEO Group did not respond to requests for comment for this story.

Sen. Mike Fasano, R-New Port Richey, a close ally of the Florida Police Benevolent Association and chairman of the Senate budget committee with oversight of prisons, tried to block the prison privatization proposal in the Senate Budget Committee.

He called it a “huge policy shift” unprecedented in the country. But his fellow Republicans sided with Alexander, who said the venture would save almost $60 million over two years.

As a half-dozen GEO lobbyists looked on, James Baiardi, president of the PBA’s correctional officers chapter, argued the privatization plan would be dangerous.

“The prisons in Miami-Dade and Broward counties handle some of the worst inmates in the state,” he said. “To take that and just turn it over to a private company is just unreal.”

Baiardi said GEO is uniquely positioned to compete for the privatization bonanza because the company runs prisons, provides healthcare in prisons and recently bought a company that specializes in electronic monitoring of ex-inmates on probation.

St. Petersburg Times researchers Shirl Kennedy and Natalie Watson contributed to this report. Steve Bousquet can be reached at bousquet@sptimes.com.


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  1. Patrick Lawhead, M.A. (813)839-0674 4705 W. Bay View Ave, Tampa, Fl. 33611

    April 29, 2011

    To Whom It May Concern:

    By way of introduction I graduated from USF with a Masters in Rehabilitation Counseling in 1978. Since then I have worked for state government, private nonprofit, private for profit, and had two companies where I was the owner. I have been tasked with quality control of case management, service delivery, and fiscal responsibility. In every position over the last 33 years I have always worked with many agencies.

    I testified when Janet Reno held hearings in Tampa, regarding social service delivery.

    I have found the privatizing of social services, (DOC is a social service) to result in increased costs to the tax payer, and reduction in the quality of services to the client. The argument that privatizing saves money fails to take a long term look at the hidden costs. The state continues to monitor/supervise the programs, the exposure to suits resulting from poor service is increased, and the hands on workers loose benefits and wage.

    The above is the minor problems with privatization. The major problem is a moral issue. The state has an obligation to look after citizen’s welfare that goes beyond cash flow issues. To reduce the value of citizens, and this is what I have observed privatization doing is morally wrong.

    Patrick Lawhead, M.A.

  2. The life-blood of Capitalism demands a never ending pursuit for profits, mostly at the expense of the good of the public.

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