The Real Cost of Prisons Weblog

Little more than a crossroads of highways 14 and 85, Ault is unique among Northern Colorado communities in that it has yet to try capitalizing on the growth and development boom shaping once-sleepy rural towns into economic powerhouses. Whereas places like Windsor, Timnath and even Severance have responded to projected regional population growth and blooming housing markets with ambitious—and sometimes controversial—economic development plans, Ault has lived up to its self-styled reputation as a bedroom community for Greeley and Fort Collins—by and large, it’s been asleep at the wheel.

“Unfortunately, during the big growth spurt that’s been happening around the Front Range, Ault hasn’t taken advantage of that,” says Ault Mayor Brad Bayne. “We have a few new subdivisions, but we really didn’t have the land to attract the good industrial growth or business. … It’s the Eatons, the Severances and the Windsors that have really been booming. One of our big initiatives (as a Town Board) was to update the comprehensive plan, annex areas for industrial growth. As a town, we probably haven’t taken real good advantage of that in the past.”

But Bayne and others on the Town Board see a remedy on the horizon, one with razor-wire fences and steel bars. Like many rural towns across the country that have found themselves without the clout or resources to attract more desirable employers, Ault has turned to the private prison industry for its salvation. Last year, the Colorado Department of Corrections filed a notice of intent to award a contract to Baton Rouge, Fla.-based GEO Group Inc., formerly a division of the Wackenhut Corp., to build a 1,500-bed medium security prison for male inmates on 46 acres just southeast of the town. The prisoners alone would double the town’s population and the presence of the facility, Bayne hopes, would provide Ault with the same type of economic benefits that have been enjoyed by its neighbors for the past several years: an influx of new businesses, new jobs that pay better than any other employer in town, an annual payment in lieu of taxes to boost the general fund and prison-funded upgrades to infrastructure like the sewer system and the wastewater treatment plant. Additionally, thanks to the higher population—the U.S. Census doesn’t differentiate between inmates and other residents—the town’s Highland School District will likely qualify for more funding from the state.

This sunny vision of Ault’s future, however, is marred by more than a few dark clouds. For one thing, the status of the contract is in question—GEO Group is under investigation by the state legislature for allegations of conflict of interest. An audit performed by the Legislative Audit Committee—at the behest of Rep. Buffie McFayden, whose district near Pueblo has 12 prisons—found that the Ault contract was negotiated with the help of private prison consultant Nolin Renfrow. At the time he was working on behalf of GEO, Renfrow was a top official with the state corrections department and stands to earn a $1 million commission on the contract. GEO itself is creating hurdles by refusing to sign the contract unless the state agrees to a guaranteed minimum number of prisoners to be housed there, something the state has never done for any of the other private prisons in Colorado. Just last week, DOC director Ari Zavaras told the Joint Budget Committee that guaranteeing beds “would be bad for Colorado,” according to department spokeswoman Allison Morgan; the issue will be decided by Gov. Bill Ritter. Adding to GEO’s troubles, the company recently saw another private prison contract for a location in Pueblo cancelled by the DOC. The contract was signed in 2003, but the company never even broke ground on the facility, again citing the need for a guaranteed number of inmates. Since Colorado pays private prison companies on a per-inmate basis, it’s essentially seeking a guarantee on its revenue stream.

Those issues have yet to be settled, but even if they are, some researchers say Ault won’t be better for it. In fact, although conventional wisdom almost universally says that small rural towns benefit from hosting private prisons, some prison industry experts say the opposite is true.

If a prison is built in Ault, in other words, the town may be condemned to a life sentence of economic stagnation.

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In July, a flyer was mailed to Ault residents titled “The Prison Facts.” It was circulated by the GEO Group and endorsed by many of the town’s leadership, who were listed at the end of the flyer with their contact information. It lists the many economic benefits a prison would bring to Ault, including jobs for 300-350 people. The flyer admits that some administrators and senior staff will come from elsewhere in the country, but tries hard to imply that other jobs would come from Ault, noting “Ault is rural, but has over 400,000 people in a 40 mile radius. This is where GEO hopes to hire most of their employees.” That’s true of course, but that radius includes Fort Collins, Loveland and Greeley; Ault’s growth management area extends only about a half mile from the center of town.

GEO representatives did not return phone calls seeking comment for this article.

Bayne says he doesn’t expect employment perks to come solely from the prison, but also from the peripheral jobs that would be generated—an additional 300-350 workers in Ault would spur sales at gas stations, restaurants, dry cleaners and other retailers, he says.

“We’re not naive enough to think that 350 people in Ault would work in the prison,” he says. “It would be bringing traffic through the town of Ault that would lead to business at the retail sources.”

But a new prison may not result in the employment boom Ault’s leaders hope it will, according to Clay Mosher, an associate professor of sociology at Washington State University-Vancouver. Mosher and his colleague Greg Hooks are experts on how prisons impact rural towns and he says the verdict isn’t good.

“What we’ve shown is that in rural towns, prisons in fact do not create jobs,” he says.

Except for the prisoners, that is. According to Morgan, the spokeswoman for the DOC, state law requires prisoners to work in order to offset the cost of their incarceration. The jobs may be menial in-house jobs or they could be beyond the prison walls out in the community. Mosher says it’s not uncommon for crews of inmates to be employed by private companies—at bargain basement prices, no less—to do everything from logging to street cleaning, jobs that otherwise would be done by others in the community.

“In recent years, inmates have engaged in jobs ranging from telemarketing to the manufacturing of computer circuit boards and furniture,” Mosher is quoted saying in a 2004 news article about his research. “Prisoners in California have served as booking agents for Trans World Airlines, while Microsoft uses convicts to assist in the shipping of Windows software. Honda pays $2 an hour to prisoners in Ohio to do the same jobs that members of the United Auto Workers Union were once paid $20 an hour to do.”

As for the other financial boosts, such as construction employment to build the new prison and the still-to-be determined annual payment in lieu of taxes, Mosher says they’re usually short lived and overblown.

“Collectively, (rural towns that host prisons) are not benefiting,” he says.

Mosher is in a position to know—he and Hooks conducted one of the most far-reaching analyses of prisons’ economic impacts on host communities, examining trends in 3,100 counties in 48 states. The goal was to test the long-held belief that private prisons were gold mines for communities with limited alternative source of economic development. Those presumptions, according to their research, were based primarily on the perceptions of business leaders, which were no doubt fueled by those in the prison industry eager to land new contracts.

It’s not hard to see why: Between 1980 and 1998—boom time for new prison construction in the United States—the number of Americans behind bars soared by 400 percent to about 1.3 million people. The inmate population has continued to grow, although not as explosively and today, there are about 2.1 million Americans doing time in prison. As states run out of room—and money—they have increasingly turned to private prisons to meet the need. It’s estimated that about 200,000 inmates across the country are housed in private prisons, and GEO is one of the largest private prison companies in North America. According to its Web site, at the end of 2005, the company managed 61 correction/detention facilities around the world for a total of 49,000 “offender beds.” Year-end revenue in 2005 was $612.9 million with a net income of $7 million. It commands 27 percent of the global market share and it’s the second largest provider of correctional services to the U.S. government; it even runs the Immigration and Customs Enforcement Processing Center in Aurora where illegal immigrants were taken during last month’s identity theft raid in Greeley.

In short, it’s big business. And like all businesses, private prisons maintain their profit by reducing expenses where they can. Mosher says that often means cutting corners training guards and not being as discriminating in the hiring process. He also says there have been many instances of private prisons filling beds in medium security prisons with high-security out-of-state inmates; after all, private prisons don’t make money on empty beds.

For those reasons, among others, private prisons also have a worse record than publicly operated prisons when it comes to escapes.

“The literature tells us that there is a higher probability of escapes at private prisons,” Mosher says. “There are some potential issues there.”

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It’s those “potential issues” that have many Ault residents up in arms about the idea of the prison coming to town. A group called Citizens Against the Ault Prison mobilized with the skill of a guerilla army, motivated primarily by safety and later by suspicions that GEO and the Town Board were working behind the scenes to grease the rails for the prison’s approval.

Phillip Tidwell, one of the group’s founders, cites everything from the chance of a prison break to devalued homes in his opposition to the prison. He believes the wave of high-value subdivisions cresting over nearby towns will eventually wash into Ault as well. He says a prison would do nothing but saddle the community with a reputation like that of Cañon City or Folsom, Calif., doing no favors for the housing market.

“Economically, this town is just on the threshold,” he says. “It’s ready to break open, just like Severance, just like Timnath. … If you want low-rent and low-cost housing, the prison may not affect you, but that’s what we don’t want to become. A prison is not going to help this town.”

Mayor Bayne has heard the arguments about a prison creating a bad reputation for Ault. But he says he’s called the mayors of Brush and Sterling, small rural communities that each host prisons, and was reassured that they’ve been nothing but beneficial to their towns.

“I recently spoke to the mayor of Brush,” Bayne says. “He said they went through all the same things we went through. For the town of Brush—and Ault could be different—ultimately it didn’t hurt and somewhat helped the housing market, because the people moving in there needed a place to live. The first (company) running that prison they had some issues, but now they’re a great partner for the town of Brush. In fact, he told me that if the opportunity ever came up to expand the prison, they wouldn’t hesitate.”

He also added that the mayor of Brush wasn’t around during the “issues” the previous private prison companies experienced, which may explain his enthusiasm. Indeed, as recently as two years ago, the facility in Brush was making national headlines for sex and abuse allegations, and it is almost always used as an example of much that it wrong with the private prison industry. At the least, it seems an odd choice for Bayne to reference when advocating for a prison in his own town.

In 1998, the High Plains Youth Facility in Brush was owned by Rebound, Inc. and was home to serious youth offenders from 21 states. That year, a 13-year-old boy from Utah committed suicide while being held at the facility. The investigation into his death revealed an institution out of control.

The DOC found that the facility was understaffed, that the staff was under-trained and that the medical personnel required by the company’s contract with the state were nearly nonexistent. A substantial number of the private prison’s young inmates were being prescribed strong psychotropic drugs even though the investigation found that a psychiatrist contracted by Rebound only spent about six hours at the facility each month. On the day that the 13-year-old killed himself, he had told staff of his intentions, but nobody relayed the threat to the night shift. On the night he died, only half of the staff required by law was on duty at the facility. But the boy’s death also revealed serious deficiencies in the DOC’s policies toward private prisons as well.

Because private prisons in Colorado often house an inmate population comprised largely of out-of-state prisoners, inspections by DOC tend to be few and far between. Due to the increased travel expense that would be required from the prisoners’ home states to do inspections at Colorado private facilities, they too are rarely done. In other words, private prisons like the one in Brush that hold out-of-state inmates fly largely under government’s oversight radar.

In the case of High Plains, the few inspections that were conducted by DOC between the years of 1993 when the facility opened and 1998 when the teenager died, found the same problems time after time: inadequate guard staffing, lack of medical personnel and overuse of physical restraints. But most shocking of all was the state’s lack of attention paid to allegations of abuse at High Plains.

Between 1993 and 1998 there were 70 allegations of abuse at the facility. Social services reported 23 substantiated abuse allegations in 1997-1998 alone. But for some reason, only one of the 23 cases turned over to local and state authorities for investigation was ever investigated prior to the teen’s death. Many of the High Plains allegations concerned guards having sex with their charges.

Even though guards having sex with inmates in Colorado is a felony—even if the sex is found to be consensual—the DOC did virtually nothing in the case of the High Plains facility. Many critics at the time presumed that this lack of action stemmed from the state’s desire to avoid the bad press that would have no doubt accompanied a sex scandal at a juvenile facility under its jurisdiction. The two guards accused of having sex with inmates were quietly dismissed by the company and the state chose not to prosecute them.

Just as the proposed facility in Ault is already under a cloud of fiscal impropriety, so too was the Rebound prison in Brush. Following an investigation of the contract with Rebound, Colorado officials found that the state had been paying $3 million a year in rent to Rebound. This turned out to be quite a windfall for the company; Rebound had only spent $9 million to build the entire facility. By the time state auditors discovered the excessive rent payment, Colorado had already paid Rebound over $20 million in rent in less than a decade. How could such a massive oversight occur? According to then Youth Services spokesman Dwight Eisnach, corrections simply wasn’t prepared to handle a contract like the one with High Plains. Eisnach told the Rocky Mountain News at the time, “We didn’t have anyone on our staff who could even analyze these things.”

If current allegations stick regarding the bidding process for the Ault facility, it would appear that the state is still less than equipped to “analyze these things.”

Finally in 1998, reporter Ann Imse of the News wrote a series of articles on the disarray at the High Plains prison which many observers credit with the facility’s eventual closing.

Following the High Plains debacle, the prison sat vacant for several years until its current owner, Tennessee-based GRW Corp., reopened it as the Brush Correctional Facility for Women (BCFW) in October 2003.

Like many private prisons, BCFW houses mostly out of state prisoners. In the case of the new Brush facility it started with women from Hawaii, Colorado and Wyoming. It was a rough start as the new facility found itself embroiled in controversy by late 2004. Like the earlier Rebound operation, sex was at the heart of the matter. A total of seven women inmates at the facility—two from Hawaii, four from Colorado and one from Wyoming—claimed that they were raped or had sex with at least three correctional officers. In addition to the sex scandal, two other guards were accused of smuggling contraband into the prison and another five guards on the staff were felons who had made it through GRW’s inadequate screening process. An examination of the facility’s DOC inspection reports by FC Weekly found that the prison was often understaffed during inspections and the promised programs designed to rehabilitate the inmates were often taught by other inmates instead of by trained personnel. The inmates’ medical treatment was also found to be dangerously inadequate.

Though several of the women claimed they were raped by the guards, a DOC investigation came to the conclusion that all of the sex was apparently consensual. Several of the women claimed that they had sex with the guards and/or a prison counselor in exchange for the promise that they would be transferred back to their home states where they would be closer to family.

In 2005, Hawaii’s Lt. Gov. James “Duke” Aiona told reporters at the Honolulu Advertiser that he was “appalled at the report from Colorado. This is the worst kind of crime that could happen, and we’re hoping it’s prosecuted to the fullest extent of the law. You can’t tolerate that kind of activity.”

The state of Wyoming eventually removed its prisoners from the facility due to the scandal. On Feb. 18, 2005, then BCFW Warden Rick Soares stepped down from his post although he was never directly implicated in the sex scandal that ultimately resulted in five of his correctional officers being charged.

To say the least, the past 14 years since the private prison industry came to Brush, Colo. has been anything but smooth sailing.

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If it’s built, the prison in Ault will avoid some of the troubles unique to those in Brush; for one thing, it will house only male adult inmates and Morgan, the DOC spokeswoman, says the intention is for only Colorado inmates to be held there. Bayne has also stressed that the prison is “not a done deal,” with many hurdles to clear before ground is broken on the facility.

The most daunting hurdle may come from the residents of Ault themselves. When researching the prison, Tidwell, one of the opponents who formed Citizens Against the Ault Prison, discovered a Town Board resolution passed and signed in May by former Mayor James Fladung stating the town would proceed with a contract with GEO, which was attached as an exhibit. The 13-page contract was complete except for signatures and an agreement on the amount of the payment in lieu of taxes. Convinced the prison was being negotiated without any public input, Tidwell and others successfully petitioned for an ordinance that requires a vote of the residents before a prison is built.

The petition was signed by nearly 300 people, but Bayne insists that not everyone is against the prison. In fact, some residents invited GEO representatives to discuss their plans at a town meeting and show them examples of what the prison would look like.

“People are concerned about what it’s going to look like,” says Realtor Ann White. “But they were quite nice looking. They had berms and of course they had fences to keep prisoners in but you could not see those.”

White is listing the land for the prison, but she says her support for the project goes beyond the real estate commission she will earn. She also says she’s called Realtors in other prison towns and found that housing markets have improved, not suffered. She has lived in Ault for 40 years and has seen neighboring communities reaping the benefits of an economic boom while Ault languishes.

“Before, we used to have a lot more people coming here from Fort Collins,” she says. “It’s just a short drive and they wanted to be in a small town. Then we saw Severance and Wellington come on with their new construction and that has really hurt the market here in Ault.

“I look around and I’m not sure we have many industrial opportunities, to really see companies come in to our little town,” she continues. “We’ve seen a lot of industries go to other towns.”

She’s not alone in her opinion.

“I look at it this way,” says longtime resident Georgi Diehl. “We have a town board that I’m very confident in. If they feel we need it, we need it.”

Others are more ambiguous.

“The business owners who are here seem to be for the prison and I have a lot of respect for a lot of them,” says Ault resident Barbara Emmert. “I just don’t feel like we need to be afraid of a prison. I don’t mind the people who are asking questions because I think that’s always good. But you’ve got to have prisons if you’re going to have laws. I just don’t see where it’s a big deal.”

As mentioned, there is a long way to go before GEO’s prison is built. Even if the award survives the investigation into Renfrow’s actions and the matter of bed guarantees is resolved, it still faces a special election. Bayne says that if the prison is rejected at the polls, the town won’t “actively go out and pursue any prison.”

But prisons have been actively pursuing Ault for years. GEO’s attempt is only the latest in a string of courtships by private prison companies dating back to 1984. And the ordinance requiring a vote on prisons can be repealed by the Town Board as long as it’s on the books for a certain amount of time.

Therefore, Tidwell and his group, with the help of a Fort Collins attorney, are currently attempting to craft a stronger ordinance, one that would prevent such a repeal unless at least half the town votes for it.

“We did what we set out to do,” he says, speaking of the petition to require a vote.

“But we’re not done yet.”

Unique, but for how long? Ault leaders want a prison in town to help its economy, but experts say prisoners are bad for business.

A prison would double Ault’s population and its leaders are banking on the hope that its 300-350 employees would spur home sales, retail sales and job growth. But experts say rural towns almost never benefit from prisons. “In rural towns, prisons in fact do not create jobs,” says researcher Clay Mosher.

Before a prison is built, it must overcome a conflict of interest investigation, a demand for a guaranteed number of prisoners that the state isn’t inclined to provide and a vote of the citizens of Ault.