July 12 (Bloomberg) -- In the four privately run prisons holding Mississippi inmates last year, the assault rate was three times higher on average than in state-run lockups. None was as violent as the Walnut Grove Youth Correctional Facility.
The for-profit detention center, surrounded by razor wire and near the forests and farms of central Mississippi, had 27 assaults per 100 offenders last year, more than any other prison in the state, according to an April court filing. Staff shortages, mismanagement and lax oversight had long turned it into a cauldron of violence, where female employees had sex with inmates, pitted them against each other, gave them weapons and joined their gangs, according to court records, interviews and a U.S. Justice Department report.
“It was like a jungle,” said Craig Kincaid, 24, a former inmate. “It was an awful place to go when you’re trying to get your life together.”
More than 130,000 state and federal convicts throughout the U.S. -- 8 percent of the total -- now live in private prisons such as Walnut Grove, as public officials buy into claims that the institutions can deliver profits while preparing inmates for life after release, saving tax dollars and creating jobs.
No national data tracks whether the facilities are run as well as public ones, and private-prison lobbyists for years have successfully fought efforts to bring them under federal open-records law. Yet regulatory, court and state records show that the industry has repeatedly experienced the kind of staffing shortages and worker turnover that helped produce years of chaos at Walnut Grove.
“There is a systematic failure to provide the level and competency of staffing necessary to run facilities that are safe not only for the people on the inside, but the public,” said Elaine Rizzo, a criminal-justice professor at St. Anselm College in Manchester, New Hampshire, who studied prison privatization for a state advisory board. “It comes back to saving money.”
In Texas and Florida, which hold about a third of all privately detained state inmates, employee turnover rates were 50 percent to more than 100 percent higher in private prisons than in public ones, according to data from the Texas Criminal Justice Department and the Florida Law Enforcement Department. In Mississippi, Tennessee and Idaho, company-run prisons have had higher assault rates than public ones, state data show.
Boca Raton, Florida-based Geo Group Inc., the second-largest U.S. prison company, ran the Walnut Grove prison for about two years, from August 2010 until July 2012.
Pablo Paez, a spokesman for Geo, said focusing on troubled institutions such as Walnut Grove “yields an unfair, unbalanced, and inaccurate portrayal of the totality of our industry’s and our company’s long standing record of quality operations and services which have delivered significant savings for taxpayers.”
The Mississippi prison “faced significant operational challenges for several years” before Geo took over, and the company invested “significant resources, time, and effort” to improve conditions at the facility, Paez said by e-mail.
The for-profit prison industry has encountered staffing issues in other states. Idaho Corrections Department officials voted last month not to renew a contract with Nashville, Tennessee-based Corrections Corporation of America, the largest U.S. prison company, after it admitted billing for hours that weren’t worked.
State and federal officials have reported dangerous conditions at understaffed privately run prisons in Ohio, Colorado and in Mississippi. New Mexico fined Geo $2.4 million in 2012 for excessive staff vacancies at three prisons in 2011 and 2012, according to Jim Brewster, general counsel for the state corrections department.
The U.S. Occupational Safety and Health Administration last year sought $104,000 in penalties against Geo, including $70,000 for worker shortages, faulty cells and inadequate training at a prison in Meridian, Mississippi, that the agency said put workers at risk of being attacked. Geo is contesting the matter.
In May, inmates at the prison, backed by the American Civil Liberties Union, sued the state in U.S. District Court in Jackson alleging “barbaric and horrific conditions” at the facility, now run by a different company.
A 2004 report by the Colorado Corrections Department blamed a riot at a Corrections Corp. prison on chronic understaffing and high employee turnover: The attrition rate was double that of state-run facilities. Inexperience and lack of staff cohesion isn’t lost on rioting inmates, according to the report.
In Colorado’s public prisons, “offenders know that attempts to defeat security” will be met by “a confident and experienced staff,” according to the report.
“No corrections system -- public or private -- is immune to incidents,” Steven Owen, a Corrections Corp. spokesman, said by e-mail. “In Colorado, our dedicated, professional employees are required to meet or exceed the same training requirements as their public counterparts.”
The private corrections industry has delivered for investors. The number of inmates in for-profit prisons throughout the U.S. rose 44 percent in the past decade. BlackRock Inc. and Renaissance Technologies LLC are among dozens of money-management firms that have invested in the business.
As of March 31, BlackRock reported holding stakes worth more than $254 million in Geo and $236 million in Corrections Corp., while Renaissance disclosed owning about $39 million of Geo shares and about $36 million in Corrections Corp. stock, according to data compiled by Bloomberg. Geo has more than doubled since December 2011, while Corrections Corp. has risen 87 percent, both outpacing a 33 percent gain for the Standard & Poor’s 500 Index. Representatives of BlackRock and Renaissance declined to comment.
Pay and staffing ratios are lower in private prisons than in public ones, state and federal data show. The median annual pay in company-run facilities was $30,460 in 2010, according to the U.S. Labor Department, 21 percent less than for correctional officers employed by states.
In Texas, wages and benefits are “generally lower” in private prisons than in public ones, according to a 2008 legislative report. Nationally, private prisons had one corrections officer for every 6.9 inmates in 2005, compared with one for every five in public lockups, according to the Justice Department’s most recent statistics.
Geo took over Walnut Grove after it acquired Houston-based Cornell Cos. Under its new management company, the prison now holds only inmates 18 and older, and Youth is out of its name.
In 2012, Geo had revenue of $1.48 billion, up from $569 million 10 years earlier, with net income of $135 million. George Zoley, its chairman and chief executive officer, received almost $6 million last year, including a $2.2 million bonus for profit surpassing targets, according to company filings.
The company has drawn repeated scrutiny and criticism from regulators and lawyers for inmates, faulting it for dangerous or derelict care.
Geo lost civil wrongful-death lawsuits in Texas and Oklahoma, including a $47.5 million jury award in Texas state court in 2006 to the family of an inmate beaten to death with padlock-stuffed socks four days before his release, according to court documents. The company appealed that verdict before settling. The company said it would appeal the Oklahoma ruling. Geo’s contracts to house Idaho and Texas inmates at two prisons in Texas were canceled after state reports of unsafe conditions.
In November 2010, inmates at Walnut Grove sued Mississippi and Geo in federal court in Jackson over conditions there. In an order last year, U.S. District Court Judge Carlton Reeves, who oversaw that lawsuit, said what happened at Walnut Grove “paints a picture of such horror as should be unrealized anywhere in the civilized world.”
Geo’s Paez said the judge based his order partly on the Justice Department report about Walnut Grove, which related to events that largely took place either before Geo took over or in the first few months after it assumed management of the prison.
As few as two corrections officers worked units with 240 inmates during the day, or one for 120 prisoners, according to a 2011 report to the state by MGT of America Inc., a Tallahassee, Florida-based consulting firm. That ratio is more than 10 times what’s typical at youth facilities, said Ned Loughran, executive director of the Council of Juvenile Correctional Administrators.
“I’ve never seen ratios that risky in terms of supervising kids,” he said.
The Walnut Grove prison sits on the edge of a town of about 500, where the downtown has a gas station, two diners, a city hall and a bank. It had lost one of its biggest employers, a glove factory, when community leaders decided to pursue a private prison in a quest for jobs and revenue.
“The town was dying,” Mayor J. Brian Gomillion said. “We struggled even after we opened. But it re-invigorated the community.”
State Representative Bennett Malone, a Democrat whose district included the area and who led the corrections committee in the Mississippi House, championed the prison. It was originally authorized to hold 500 inmates as old as 19.
The prison would be the biggest economic boon the area had ever seen and give troubled boys a second chance, with teachers, counselors, spiritual advisers, psychologists and training, Malone and other backers told the Jackson Clarion Ledger newspaper at the time.
The prison opened in 2001. Cornell took over about a decade ago, predicting annual revenue of $11 million. By 2007, through legislation pushed by Malone, Mississippi had expanded Walnut Grove’s permitted capacity to 1,500 inmates as old as 22.
“It never pleases me to see young people locked up, but it does please me to know the custody and care will be provided by the dedicated people of my district,” Malone said at a groundbreaking for the expansion.
Malone got campaign contributions of $2,000 from Cornell and $1,000 from Geo in 2006, accounting for 30 percent of what he raised that year, state campaign-finance reports show. Malone didn’t respond to e-mails and telephone calls seeking comment.
When Geo bought Cornell in August 2010 for $730 million in cash, stock and debt, the prison was showing signs of strain. A riot had hospitalized six young inmates. A 2010 legislative audit showed that staff levels had failed to keep pace with the expanding population.
By then, the town depended on the prison, which now pays it $180,000 a year, or a quarter of its budget.
Merchants saw little of the economic boom once promised, said Carl Sistrunk, owner of the gas station where the prison fuels transport vehicles.
“It has helped and it has hurt, if you ask me,” Sistrunk said. “You hear about some of the things going on in there and that hurts us all.”
Caleb Williams was 12 when Malone introduced the legislation creating Walnut Grove -- and already headed there.
One of 11 children of a single mother on welfare in Starkville and in foster care since age three, Williams was about to be kicked out of school, was stealing and dealing drugs and could barely read or write, he recalled.
“I wasn’t a bad child,” he said. “I was just misguided. I had my heart set on having things that weren’t there.”
Williams landed in Walnut Grove after he was arrested at age 16 for stealing a car’s compact-disc player, then stabbing an officer with a pen while trying to flee. Williams admits all except the stabbing.
Ross Walton was on a different path. An honors student, he played the piano, volunteered with Habitat for Humanity and had a third-degree Karate black belt, activities he said were pushed by a mother determined to keep him from becoming another locked-up black man from the Mississippi Delta.
Walton entered Walnut Grove at 18, convicted of aggravated assault after a fight in a bowling alley, his first brush with the law.
The prison was nothing like its backers once promised, former inmates said.
Gangs ruled the 60-inmate, 30-cell housing units, Williams and Walton said. There were at least 13 present in the facility, according to the 2010 audit. Corrections officers sometimes slept while prisoners fought, the inmates said. Assaults were common. Officers often did nothing. Some provoked fights and then used pepper spray and other deterrents, said Williams.
“You saw blood on the floor, everywhere,” he said.
Their accounts are echoed in the 2012 Justice Department report and the ACLU-backed lawsuit, which was settled last year. The federal report found “numerous inappropriate relationships between staff and youth,” with corrections officers giving inmates personal mobile phone numbers, wiring money to their commissary accounts and providing them with banned items, including weapons.
State oversight was minimal. The 2011 MGT report found no evidence the state ever surveyed inmates, reviewed their records, or did annual checks of prison operations, as required under the contract. A state monitor received no training and relied on the company running the facility for data, which the state never attempted to verify, it said.
Staff shortages were chronic, according to inmates and Cleveland McAfee, a former corrections officer. The prison struggled to retain workers, with many quitting within weeks of starting work, McAfee said. After he was promoted to lieutenant, he frequently had to fill in on the front line.
“I just got burned out because they just didn’t have the staff,” McAfee said.
The shortages led to lockdowns, according to Walton and the inmate lawsuit that was also backed by the Southern Poverty Law Center. That meant they couldn’t go to school, slowing the release of those who had to complete high-school equivalency degrees to get out, Walton said.
“The longer the stay, the more money the prison makes,” he said.
Corrections officers were eager to make more money and smuggling was rampant, said Williams.
“If they’ll bring in a pack of gum, they’ll bring in a pack of T-shirts,” he said. “If they bring in a pack of T-shirts, they’ll bring in a knife.”
In fiscal 2010, officials confiscated 137 weapons at the prison, according to the audit by the Mississippi legislature. There were 80 assaults with weapons on staff and inmates, a rate of one every five days.
Seventy percent of Walnut Grove’s security staff was female, according to the 2011 consultant’s report. Sexual tension ran high. In one incident, a female corrections officer stripped off her shirt in a housing-unit control center and danced “provocatively” over four hours in front of inmates, touching one “inappropriately,” the Justice Department said.
Inmates flirted with the female officers and fought over them. They got propositioned by them and punished if they rebuffed them, with written reprimands that added months to sentences, Walton said.
“Because you would not perform a sexual act with them, they make you stay longer,” he said. “We would have brand new guards come through, doing a walk-through right out of training. They would come through telling us they were looking for boyfriends, looking for a man, before they even started their jobs.”
“They were just hiring anybody to fill those spots and that made it worse, because they didn’t know what they were doing,” he said. “I had one guard -- I was older than her.”
Safety depended on staying out of the common areas in each 60-inmate cell unit.
Williams spent his first two years confined to his zone, unable to attend school or go outside. He stayed in his cell 23 hours a day, teaching himself to read and writing in journals. He learned to lip read to anticipate fights and avoid violence that corrections officers were too few or too scared to prevent.
He didn’t have to worry about food or shelter, Williams said. “All I had to worry about was being around these sharks, these lions and tigers and bears, in this poisonous world, where people are waking up with madness on their minds,” he said.
Berl Goff, a former captain at Walnut Grove, was hired to improve security in November 2009 by then-warden Brick Tripp. Goff, an experienced corrections officer, said the prison was having three or four bloodshed-causing fights every week.
“It goes back to the fact that these folks were not trained right,” he said of the staff. “They had never worked in a real prison.”
After four months on the job, Goff said he’d made progress. Then he intercepted a ballot inmates were passing between cells. A gang called the Vice Lords was voting on whether to attack a rival group’s leader. Goff’s bosses rebuffed his request for more help: “They told me to handle it,” he said.
Eighteen corrections officers were at the prison the day of the assault, he said -- one for every 60 prisoners. One, a gang member herself, walked through the cellblock freeing Vice Lords, then left. When the beatings and stabbings stopped, six inmates were rushed to the hospital, one with permanent brain damage.
“You got 60 inmates there and it’s just me,” said McAfee, the former guard and one of those who responded to the melee. “You just had to sit there and wait while people are fighting. It was a horrible experience.”
The worst hurt was Michael McIntosh, then 20. Six weeks after the incident, his father found him in a hospital three hours away in Greenville. The younger McIntosh’s eyes were red and blinded by blood. He had a baseball-sized lump on his head, multiple stab wounds and brain damage. He made noises like a small child.
“He couldn’t see me,” said his father, Michael McIntosh Sr. “He was just reaching, saying ‘Daaa.’”
Geo bought Cornell in August 2010, adding Walnut Grove to the two other prisons it ran in Mississippi. The three delivered $44.9 million in revenue the next year, according to Geo’s 2012 annual report.
Paez, the Geo spokesman, said the company inherited the prison’s troubles.
“Any reasonable party would agree that significant resources, time and effort would be required to turn around a facility that had faced significant operational problems for several years,” Paez said in a the e-mail. “That is in fact what Geo did.”
Walnut Grove received an accreditation score of 100 percent in an audit conducted in early 2012 by the American Correctional Association, an Alexandria, Virginia-based organization that represents public and private prisons, Paez said.
The 2012 Justice Department report said key personnel, policies and training at the prison “did not change substantially, despite Geo’s claim that it made corrective reforms.”
Goff, the former prison captain, said staffing got worse under Geo, which kept 5 percent of positions vacant. For weeks at a time, he said he had 13 to 15 officers on the night shift, instead of the 23 he needed.
“There were nights when I was captain when I walked all night long, all night by myself,” Goff said. “There was no one in the control centers. They kept saying we had to economize.”
At a March 2012 hearing at the federal courthouse in Jackson, where the settlement of the civil lawsuit against the prison and the state was reviewed, Walnut Grove inmates described continuing violence behind the facility’s walls.
One 15-year-old said the advice of a judge, who wanted him to have special protection, was ignored. “He didn’t want me in the cell with nobody smarter than me and nobody older than me,” the inmate said. Prison administrators gave him a 19-year-old cellmate who had raped him days earlier. Bloomberg News doesn’t identify victims of sexual assault.
“I just have not heard anything that says to me that any of these perpetrators, any of these people, have paid the price for what they have done to some of these children,” said Reeves, the federal judge presiding over the hearing.
There are five privately run prisons in Mississippi, though one houses only inmates from California, according to the state Corrections Department. Three other prisons are run by the state. In fiscal 2012, Walnut Grove had 284 assaults, the April court filing shows, more than in any of the three other private prisons with Mississippi inmates. It also exceeded the most violent state facility, which had three times the population.
Mississippi replaced Geo as Walnut Grove’s operator a year ago. “We moved them out, because that’s just totally unacceptable,” said Governor Phil Bryant, a Republican elected in 2011, referring to the troubles at Walnut Grove. “We just won’t tolerate that type of behavior, and we’re working with the Justice Department to be sure it doesn’t happen again.”
“Private prisons have worked well,” he said. “For years, we’ve had a lot of success with them. This was one bad incident, we got rid of the player involved, and we got another company in that we think will do a better job.”
Geo’s Paez said it has a long-standing record of “adhering to industry-leading standards set by independent accreditation entities” and rehabilitating prisoners with programs to help them re-enter society.
“Our company is proud of the incredible dedication and effort of our more than 18,000 employees worldwide, who strive every day to make a difference in the lives of the more than 60,000 men and women who are entrusted daily to our care,” he said.
Walnut Grove is now run by Management & Training Corp., a closely held company based in Centerville, Utah.
Brick Tripp, Walnut Grove’s former warden, runs another Geo prison in North Carolina. Through Paez, he declined to comment.
Goff, the former captain, now works for another private prison company he says is better run.
McIntosh will be released in September and only sometimes remembers life before his injury, his father said.
Walton is a 28-year-old accounting student at Mississippi State University in Starkville. He says Walnut Grove “scarred me; I will never be the same.”
Williams owns a barber shop in Greenville, where he sleeps at night on a cot in a storage room. It’s the same dimensions as his cell in Walnut Grove.