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State officials say private prisons need tighter regulation. A look inside the Florence Correctional Center suggests they may be right.

Turn right off the Florence highway after Big O Tires. The red warehouse on the left is where Hawaii stockpiles its most dangerous export.

Two flagpoles and triple-spiraled razor wire mark the front entrance of the Florence Correctional Center, a private prison run by the Corrections Corporation of America. Inside, more than 550 Hawaiian inmates are serving average sentences of 10 years.

Behind these walls, just about everything that could go wrong in a prison has gone wrong. In the three years since the facility opened, prisoners have taken hostages and rioted. Two prisoners died by mysterious causes. Last year, Hawaiian officials reported that a prison gang, 100 members strong, was in control of the facility, leaving inmates and staff in fear for their lives.

The prison is less than an hour's drive from both Phoenix and Tucson, but under Arizona law, no state official can do anything about it.

Arizona Corrections Director Terry Stewart is trying to change that by asking lawmakers to pass a bill that would give the state regulatory authority over the private prison industry.

"I'm not trying to get into their business except to say when you build a facility in this state, it doesn't have to meet any other requirement than building codes," Stewart said. "They don't have to follow any standards of operation except what's imposed by the company itself."


SINCE 1995, the Aloha State has said good riddance to more than 1,100 of its criminals. The banished islanders are shipped to the mainland, where CCA, the nation's largest private prison contractor, houses them at $42 per head per day, or about $17 million a year. More than half of these prisoners are in the Florence Correctional Center. According to Hawaiian reports, about 300 of these are sex offenders.

By the governor of Hawaii's own admission, these are some of his state's worst prisoners. And Arizona's prison chief doesn't understand why Arizona would want them here.

"It's such an unforgiving situation when a maximum-security prisoner escapes, I don't know why we would allow them to be imported," Stewart said.

CCA operates three prisons in Arizona, none of which falls under state scrutiny. That's because state law says that Arizona can regulate only prisons that house Arizona prisoners. CCA contracts exclusively with out-of-state jurisdictions, like Hawaii.

Hawaii also sends prisoners to facilities in Oklahoma, which doesn't accept sex offenders, first-degree murderers or inmates who require more than medium-security treatment. That's why the CCA keeps the worst of the lot in Arizona, which doesn't take such precautions.

Stewart doesn't want to crash the luau, but to him it's a matter of public safety.

"Many other states have said they're not going to accept those kind of inmates," Stewart said. "The longer we wait the more fertile we become when more states eliminate that possibility."

Via a bill sponsored by Tucson's Rep. Ed Poelstra, the prison chief is asking lawmakers to lock out other states' maximum-security prisoners. The bill also would require that all contracts with out-of state jurisdictions be approved by a state committee and the Department of Corrections. It would set construction and operational standards for private prisons.

"We have met with all the private prison entities that do business in Arizona. By and large they are in agreement," Stewart said. That is, except for CCA, which also happens to be the only company that doesn't contract with the state.

Based in Tennessee, CCA houses more than 4,000 prisoners in Arizona. In addition to its deal with Hawaii, the company has contracts with the U.S. Marshals Service, the federal Immigration and Naturalization Service and state of Alaska.

In 1996, six Alaskan inmates, including a murderer and a man who raped a 9-year-old, escaped from CCA's other Florence prison, the Central Arizona Detention Center. At the time, according to Stewart, it became evident that there wasn't much in state law holding CCA responsible.

"The legislation was changed to create penalties and require private prisons to reimburse the states for the efforts of quelling an incident," Stewart remembered.

The state Legislature passed a measure to fine private prisons $10,000 for every escapee. But to CCA, the penalty is no more than a slap on the wrist, considering that they collect more than $15,000 from Hawaii per prisoner each year.

The law also requires private prisons to file a $10 million insurance policy with the Arizona Department of Administration. But a loophole included in the law says private prisons can skip this step if they've got a net worth of more than $15 million, which CCA does.

"At that point in time Gov. (Fife) Symington wasn't comfortable with imposing any greater regulation," Stewart said.

Two years later, the Legislature passed a sweeping tax exemption for private prison industry just as CCA was finalizing its plans for a new facility.


THE FLORENCE correctional center opened for business and began accepting Hawaiian inmates in late 1999. The prison's problems began only a few months later.

The night of the primary election in 2000, state Sen. Pete Rios was in Florence waiting for election returns, when the prison exploded in violence.

"Suddenly the town was shut down because there was a hostage situation at the private prison," Rios said. "Lo and behold, the story goes, an inmate took a correction officer as a hostage and they were thinking of dialing 911 to help."

Prison officials weren't sure they could handle it, so the alarm went out to local law enforcement. The Florence PD wasn't sure it could handle it either, and alerted Stewart's office.

"Local law enforcement called us and said we may need your help," Stewart said. "That was never straightened out. We were never called and it caused a lot of concern."

The CCA still hasn't told the state what happened; under state law, the corporation doesn't have to.

The prison's troubles only escalated. In the first half of April 2001, there were two deaths and six inmate assaults at the prison. One inmate spent a week in the hospital, another suffered a broken jaw. Inmates sliced up a staff member. Finally, Hawaii's Department of Public Safety sent a team to Arizona to investigate.

From the beginning of the inspection, auditors said, it was clear that prison wasn't complying with the contract. A "hostile environment" kept the audit team from inspecting most of the facility.

The team called the center "a prison in turmoil," describing an administration so weak that it paved the way for prisoners to establish their own regime.

In no uncertain words, the audit found that Hawaii's "first bona fide prison gang," the United Samoan Organization, was unofficially running the facility.

"The group has grown quickly and to great numbers," Hawaiian gang intelligence officer Sgt. Patrick Kawai said in the resulting report. "Their power and control is getting bigger and bigger. We need to actively take our role to dissipate this group now. The state may be held liable in the future by actions done by this group."

The gang, or in prison lingo, "Security Threat Group," numbered more than 100 members in April. The gang was trafficking drugs, brewing their own booze and running a prostitution ring with the INS female detainees also housed at the prison. The gang also manipulated violent attacks on inmates and staff.

"It is known that every recent major assault that happened was related to the USO family," Kawai said.

While there, the team discovered a five-gallon bucket of homemade alcohol in the prison's kitchen. One officer admitted to the team "he was afraid of the Hawaii inmates and traded drugs for protection." Kawai said he never once observed CCA officers frisk or strip-search an inmate or toss an inmate's bunk.

"The lack of these simple security measures allow for more passing of contraband," he said in his report. "Furthermore, it would appear that the inmates have no fear to transport anything on their person."

Prison officials weren't cooperative with the audit team and could not produce proof of their accreditation specified by the contract, he said.

"During our meetings I felt as though our counterparts at the facility were being careful of what they were disclosing and generally had the feeling that they were withholding information from us," Kawai said. "The packet that I had requested for a week prior was not completed when we arrived and was done very poorly. In my opinion the packet was just a pacifier, to have something to give to us but of little use to us. The inmates had more information than we did."

After the visit, the state of Hawaii demanded changes and the CCA responded immediately with an eight-day lockdown. Together Hawaii and CCA broke up the United Samoan Organization, transferring over 48 gang members to New Mexico.

The prisoners have since returned to Arizona and are now housed in CCA's Central Arizona Detention Center.

In the months following the investigation, the company replaced the prison's entire management team, including the warden, and began implementing some of Hawaii's recommendations.

The new warden, Frank Luna, hired a chaplain for religious programs and created a hobby shop for inmates. He increased inmates' recreation time and laid the foundation for a drug rehabilitation program.

While Hawaii officials said they saw a large improvement in the prison's operation in a follow-up report in July, they also noted that the prison had yet to meet all its contract agreements.

BETWEEN JULY AND December 2001, there was no such contract between Hawaii and the Florence Correctional Center.

Pinal County acts as the middleman between Hawaii and the Florence Correctional Center, taking a $2 per head per day cut, amounting to more than $1.7 million a year.

Pinal County Manager Stan Griffis' office stalled the three-year contract renewal for more than six months. Griffis says that the hold up was due to a legal technicality.

But in Hawaiian media, it's a different story. The Honolulu Advertiser reported in December that the contract was delayed because Griffis wanted to make it clear CCA and not Pinal County would be liable for any damages in the case of contract breach.

In other words, if something goes wrong Griffis doesn't want to be held accountable.

The temporary contract signed in December is expected to get a three-year renewal in May, but if House Bill 2432 passes first, that may never happen.

"The company is opposed to any regulation that impedes our ability to meet our customers' needs," CCA spokesman Steve Owen said.

CCA and Wackenhut Corp are the two big kahunas in the corrections industry, controlling about 75 percent of the market, says Joshua Miller, corrections researcher for the American Federation of State, County and Municipal Employees, an opponent of prison privatization.

Miller's job is to track private prisons, compile facts and media stories from around the nation. He says the situation in Arizona is more or less typical.

"We're talking about multinational corporations negotiating with small townships who have no corrections experience whatsoever," Miller said. "These corporations draft the most favorable legislation and get away with the most they can get away with."

Private prison companies had their gold rush in the '80s and '90s, he said, when the nationwide trend was to toughen the justice system with three-strikes and mandatory minimum sentencing laws, creating a prison overpopulation crisis for the states and a boom for the private-prison industry. In 2001, there were more than 140,000 beds in private prisons.

"Privatizing corrections is not like privatizing tree-trimming or waste management," Miller said. "With corrections we're talking about the administration of justice, something that should not be contracted out to the lowest bidder."

Other states have horror stories that rival those told by the Florence audit, Miller said. Hundreds of new clippings in AFSCME's database document everything from CCA releasing the wrong prisoners to riots to contract disputes over guard training. The most memorable, Miller said, was when six prisoners escaped a CCA facility in Ohio in broad daylight.

"The primary different between the government and a company is access to information," Miller said. "With the government you can file a public information request, but the corporations will tell you everything is proprietary. You don't hear anything until there's a major lawsuit or it turns up in the media."

Griffis said he hadn't seen the Hawaiian audit when he negotiated the six-month contract. Stewart said he hasn't seen it either; he read about the audit in an e-mailed news clipping.

But Rep. Poelstra read the audit on a Florida police organization's Web site. It's one of the reasons he's sponsoring the bill to strengthen regulation of private prisons. But last year CCA defeated a similar regulation measure by Sen. Rios.

"We have weathered our share of difficulties in the recent past," CCA says on the investor portion of its Web site. CCA's stock is traded on the New York Stock Exchange. Stockholders saw the company take $744.3 million hit in 2000, and report only $5 million net income in 2001.

"However, our new management team, along with the consistent quality of our operations, has set us on a path to a future greater than anyone can predict," the Web site boasts.

Poelstra's bill could throw the corporation off that track. Under the proposal, the Joint Committee on Capital Review and Department of Corrections would have to sign off on the contract when it comes up for renewal.

But if the bill passes, there may not be a reason to renew the contract.

The facility could be rendered obsolete, because the bill would also limit many of the types of prisoners that the Center houses. While the Florence Correctional Center claims it houses only medium-security prisoners, Stewart points out that's by CCA's definition, not Arizona standards.

Hawaii may have to bring the prisoners home. According to State Net Capitol Journal, officials are already weighing the costs of building a new prison on their own turf.

"We're not the dumping grounds for the rest of the country," said Poelstra, who is making this reform a central issue. "This bill will not die."


THESE DAYS, THE Florence Correctional Center is quiet bastion on the edge of farmland. Children's bicycles hide in the weeds in the neighboring patch of run-down homes. It's just one prison in a town full of prisons.

Inside, the silence of the prison is punctuated with the yells of "Lock it down" rising from the inmate designated "Sergeant-At-Arms" in Warden Luna's new drug rehabilitation program.

"Warden Luna has turned this place around 200 percent," says counselor Reggie Herbon. But he's only been there since July and doesn't know what it used to be like.

After the report came out, the staff of the prison changed dramatically. Only a handful remember the time when inmates brewed hooch and robbed the kitchen blind.

The inmates still have a lot of freedom--freedom to make phone calls, freedom to give each other haircuts, freedom to fill laundry bags with ramen noodles bought from the commissary.

The prisoners salute Warden Luna when he walks the corridors. He shows off a box of pineapples sent to him from Hawaii.

CCA also owns the Eloy Detention Center, a 20-minute drive away. It also make local news headlines regularly, donating bikes and hosting fundraisers. The detention center softball team took first place in a tournament that benefited the family of a slain Pinal County deputy.

CCA's Central Arizona Detention Center in Florence has a good reputation, despite the prison breaks in 1996. Arts and craft made by Alaskan inmates are often donated to help poor families.

But good local news is not be enough to convince those who work in corrections that these prisons are safe.

"[Arizona Department of Corrections officers] get frustrated with state pay and go over there, but a lot of times, they come back," said one state corrections officer whose nephews work for CCA. "I've worked on both of the state's Super Max facilities, and I still feel safer here."

The state has two "super-maximum security" prisons in Florence, SMU I and SMU II, each reserved for death-row inmates, violent prisoners and gang members.

The state's gang specialists at SMU II know about the United Samoan Organization, and they know its members are still in CCA facilities in Arizona. "We need put them through our evaluation process." one specialist says, looking at wall-to-wall Polaroids of tattooed inmates arranged by the intelligence office of the permanently locked-down facility. "They need to be here, in a facility like this."

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