CCA admits to falsifying staffing records

by Joel Millman for the Wall Street Journal

The nation's largest for-profit prison operator, Corrections Corporation of America, has agreed to pay the Idaho Department of Correction $1 million to settle a dispute over staffing hours at the state's largest prison.

CCA's admission that it had understaffed the Idaho Correctional Center by thousands of man-hours in 2012 led to a government audit and contributed to several lawsuits by prisoners and prison employees, which claimed inadequate staffing resulted in unsafe conditions.

"While the $1 million payment does not reflect a specific number of hours, due to the complexity of the issue it was determined by IDOC officials to reasonably cover the state's costs related to the staffing matter," the company and Department of Correction said in a joint statement late Tuesday. The statement added that the "agreement also fulfills CCA's commitment to make taxpayers whole on the issue."

CCA acknowledged last year that its employees falsified staffing records given to the state, making it look as though thousands of hours of guard-post duty were filled when they had been left vacant.

On Wednesday, the Idaho State Police said in a statement that "CCA's actions were a civil breach of contract and not criminal activity."

The correction department on Wednesday released results of a forensic audit of CCA's staffing records done by KPMG, which found "discrepancies" involving 26,000 man-hours "that could potentially be identified as unstaffed" during 2012—about five times the 4,800 hours the prison initially reported during part of that year.

The Department of Justice says 137,000 prisoners were in the custody of for-profit prison operators at the end of 2012, the most recent figure available. Some 97,000 of them were state prisoners, a figure that has declined from levels reached in the middle of the last decade.

"It is possible that our analysis understates the number of hours…," the auditors reported. "However, our work does demonstrate that the problems identified were occurring."

Idaho Director of Correction Brent Reinke appeared before a committee of the Idaho legislature Wednesday to present his agency's annual budget. He declined to comment on the CCA payment beyond the joint statement.

CCA's $29 million contract to manage the 2,080-bed prison expires in June. Idaho had hoped to rebid the contract to another private corrections company. But after the industry's top two firms said they wouldn't bid, Idaho moved to take over the prison operations.

"With this agreement, we fulfill the commitment CCA made from the beginning to make taxpayers whole on the staffing issue....We've also worked very hard to ensure this never happens again," said CCA spokesman Steven Owen in a statement.

A spokesman for Idaho Gov. C.L. "Butch" Otter said all comments on the CCA agreement would come from the Department of Correction.

Mr. Otter is a strong proponent of privatization of state government operations. Both he and many Idaho legislators accepted campaign contributions from CCA during recent election campaigns. In an interview with The Wall Street Journal in October Mr. Otter said he didn't think such donations influenced correction policy in the state.

"I really think campaign contributions follow philosophy and the philosophy doesn't follow campaign contributions," he said. "There may be exceptions to that but here in Idaho it's pretty straightforward."

Write to Joel Millman at joel.millman@wsj.com