Chris Dornin - NH Prison Privatization Consultant Brings a Potential Problem to the Task
Monday, July 16, 2012 at 06:48AM State picks prison outsourcing consultant
By Chris Dornin, founder, CCJR
Supporters of prison privatization won a big victory July 11. The Executive Council voted 5-0 to approve a $171,000 contract with a consulting firm to review the bids from four profit-making vendors hoping to incarcerate up to 1,700 New Hampshire inmates. MGT of America, a Texas-based company, has until Oct. 5 to issue its in-depth report on the pros and cons of each proposal to take over most of the work of corrections.
The possible vendors include the GEO Group, Management & Training Corp., Corrections Corp. of America and NH Hunt Justice Group. They have offered to build and run a men’s prison or a co-ed prison.
Linda Hodgdon, commissioner of administrative services, said MGT was the only bidder on the consultancy project, and it will help officials to ascertain the facts in 60 boxes of complicated bidding paperwork.
“The consultant doesn’t decide anything,” Hodgdon said. “They will help us evaluate the facts. We told them to be very objective and not to come in with any kind of bias.”
Bill Wrenn, the New Hampshire corrections commissioner, said George Vose, the project leader for MGT, has run private prisons as well as the corrections departments in Massachusetts and Rhode Island.
“His opinion is really neutral,” Wrenn said. “We need their help to make sure the financial data supports the operations plans. The numbers have to be legitimate and make sense.”
Councilor Dan St. Hilaire asked officials a series of tough questions before backing the contract.
“I’m going to vote for it, reluctantly,” he told Gov. John Lynch. “If you’re sure they’re looking just at the numbers and not policy. And as long as they are impartial.”
“I agree,” said Lynch.
Executive Councilor Ray Wieczorek asked if the state could possibly do the $171,000 project in-house. Hodgdon said officials have put in thousands of extra hours already, and they lack the expertise needed.
“I’m comforted to have another set of eyes coming in,” she added. “You’ll get better information.”
Vose may have neglected to tell state officials he brings at least the appearance of a conflict of interest to the task. In a phone interview July 12, he told me he still serves on the board of Community Education Centers, a large profit-making halfway house company based in New Jersey.
He won that appointment in 2009, according to a Community Education Services press release still available on line. CEC had just acquired CiviGenics, the private prison contractor Vose had served as vice president for operations since 2002.
The New York Times published a recent investigative series describing Community Education Services halfway houses as crowded, violent, sexually abusive, porous, gang-ridden and drug-infested. The employees are underpaid, undertrained, scared and demoralized, the Times also reported, and those factors have caused high turnover and understaffing.
The newspaper said 452 inmates escaped from these facilities in 2011. 73 percent of inmates tested positive for recent drug use after a surprise urine sample collection in August, 2009.
Asked if he could be objective about the choices for New Hampshire, Vose said he could. He added that he is not an employee of Community Education Centers and that his task here is limited.
“We’re not being asked to evaluate if prison privatization would be good policy for New Hampshire,” he said. “We’re not a political advocacy group for anybody. Our role is to evaluate proposals based on specific criteria. And I’m only one member of a team with five people on this project.”
MGT was the sole firm that answered a request for bids from would-be consultants. Executive Councilor Chris Sununu asked why.
“We talked to others,” said Hodgdon. “Two needed a lot more time to look at our RFP. One was unhappy with a low-bid process.”
According to the contract signed June 28 by Rosemary Wiant of MGT and Joseph Bouchard, assistant commissioner of administrative services, the other firms were Northpointe, Pulitzer Bogard & Associates, Voohris Robertson Justice Services, Garrison Consulting, CJIS Group, and AECOM.
Sununu asked for a time line on the next phase.
“This is really critical to the state,” he said. “It keeps getting stretched and stretched. I’m afraid we’ll still be pushing this in the spring.”
Councilor Ray Burton asked about the impact on the 500-bed Berlin prison in his district. It was built so its shops, dining hall, kitchen, infirmary, library, offices, visiting room and classrooms could support a second already-designed, 500-bed wing in the future.
“Berlin is not a factor in any of this,” Wrenn said.
Burton said he is in no rush to privatize prisons. He has seen first hand the impact of privatization on the families of Vermont prisoners outsourced to Kentucky.
“I want to be fully informed every step of the way if this goes forward,” he said. “Will the consultant’s report be public?"
Officials said it would.
“Would Maine and Vermont be involved?” Burton asked.
Lynch said Gov. Paul LePage and former Gov. John Baldacci of Maine have both supported the concept of a northern New England facility.
“$171,000 is a small amount compared with the scope of a (privatization) contract over 20 years,” Lynch added.
Councilor Dan St. Hillaire said he also wants the state to look at building and bonding its own prison.
“It is,” Lynch said.
Reader Comments (1)
There is other purported "research" that claims savings. It has been largely discredited, the product of academics and think tanks that have extensive and sometimes overwhelming ties to the industry, primarily recipients of industry money to fund those "studies." The most notorious was Dr. Charles Thomas, fined $20,000 by the Florida ethics commission and forced to resign from his tenured department chairmanship at the university, but other organizations, such as the Reason Institute, are equally conflicted.
A prison escape by MTC from Kingman, Arizona, on July 30th, 2010, for instance, probably has cost federal and state taxpayers many millions, but the operator was just responsible for pocket change. I am intimately familiar with the details of that escape.
MTC of course, is one of the four bidders to provide New Hampshire with services.
Virtually every corporation that has ever been associated with the industry has been found to have overcharged by millions of dollars, including not only MTC but GEO and CCA as well. All three have been found by the courts to have underpaid their line staff by millions. In my opinion inmates are not as prodigiously larcenous as are the operators of these for-profits.
George Vose is now heading the team for MGT that is to determine whether or not to privatize its prisons. Vose has long been associated with corporations that have engaged in these practices. I'm including a story below that would seem to require some explanation of his role. Overcharging by over $10 million is certainly not some simple accounting error.
He has been associated with Community Education Centers for some time after Civigenics was sold to that corporation. That corporation as well has been involved in large scale instances of improper influence. Indeed, Sam Dolnick of the New York Times has authored at least four articles in the last few months about CEC that have exposed the connections between New Jersey governor Chris Christie and his former business partners, John Clancy and Frank Palatucci.
CEC and Civigenics were notorious for failures to pay their bills and were sued in state after state for many millions. CEC's former chief fiscal officer and senior V.P., David N.T. Watson, sued the company in a filing alleging widespread misrepresentation of its financial status.
Vose has an indisputable favorable bias toward the industry which is being considered to take charge of NH corrections. The most he could be expected to do is to pick the best of a bad lot.
http://www.dailynewstranscript.com/news/x1823206094#axzz20JfycFih
Waltham —
BOSTON -- Spectrum Health Systems, one of MetroWest's largest providers of drug-treatment and health-care services, misused $17.4 million in state money by making "unallowable and highly questionable" payments to a related company and to its former president, according to an audit released yesterday.
A two-year probe by state Auditor Joseph DeNucci's office found that Spectrum funneled $10.2 million in "excessive management fees" to CiviGenics, a for-profit corporation that former Spectrum president Roy Ross founded in 1995.
DeNucci's audit also questioned why Spectrum, a Worcester-based provider with programs and facilities in Framingham, Milford and Westborough, paid nearly $1 million to its former chairman, Robert Galea, for "undocumented" consulting services while he was living in Alaska and Florida.
In the 48-page audit, DeNucci recommends the state try to recover all of the $17.4 million Spectrum allegedly misused between 1992 and 2002.
"This is certainly one of the biggest abuses of a human services provider contract that we've ever seen," said Glenn Briere, a spokesman for the auditor's office.
Charles Faris, who succeeded Ross as Spectrum's president and CEO, claimed the scope of the problem was "significantly less" than the $17.4 million cited by the audit.
"We respectfully disagree with the amount of money the audit came up with," he said.
DeNucci credited Spectrum for taking steps to correct the problems identified by the audit.
"This is a different company than it was two years ago," Faris said. "Spectrum has been around for 36 years now. We've always had a stellar record and nothing here (in the audit) has impaired anything in terms of the quality of care we provide."
Spectrum's financial ties to CiviGenics are at the center of the audit's findings.
Between 1996 and 2002, Spectrum paid $10.2 million in "unallowable charges" to CiviGenics through a series of no-bid contracts it awarded to the company, according to the audit.
The contracts were purportedly intended to reduce Spectrum's management costs, but Spectrum's board allowed the fees to soar from $1.4 million to $3.7 million over a six-year period -- well beyond the limits established by the state, the audit claims.
"It is unfortunate that Spectrum's former president created and used CiviGenics to derive excessive profits from the commonwealth," DeNucci said in a prepared statement.
After Faris took over for Ross, who had founded CiviGenics, he severed Spectrum's relationship with the for-profit company in 2002.
The audit also criticizes Spectrum for:
Read more: Audit: Spectrum abused $17M - Dedham, Massachusetts - The Dedham Transcript http://www.dailynewstranscript.com/news/x1823206094#ixzz20JgA5Vge