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Profit Over Kids: Part II

This is the second of a 3-part series.

We ended part one of this series with James F. Slattery changing the name of his company from Esmor to Correctional Services Corp. and taking his business to Florida.

The first facility Slattery opened in Florida was the Pahokee Youth Development Center in Sarasota. This facility ran into problems almost immediately. Juvenile Court judges started to hear complaints about “abusive staff, prison-like conditions and food full of maggots.” According to a story in the Chicago Tribune “Pahokee workers staged gladiator-style matches in which 13- and 14-year-old inmates beat each other bloody while their peers watched, internal facility records and interviews show.” An investigation revealed that Correctional Services “held juveniles beyond their scheduled release dates to increase the company's income from the State of Florida and billed the government for schooling the company didn't provide.”

After the facility failed an audit, Florida stopped admitting new youth to the facility.

Once again nothing succeeds like failure, for despite repeated reports of horrible conditions and treatment within Pahokee, the state did not cancel his contract.

The Florida Department of Juvenile Justice merely allowed him to withdraw from the contract. Kirkham writes that “the company said it was closing Pahokee and three other facilities across the country that were ‘unprofitable’ in the most recent quarter. There was no mention of the state’s findings. Slattery said the company would continue to review facilities for profitability to ensure the ‘highest quality services for our contracting agencies and a fair return for our shareholders’.”

By 1999 his annual revenues had reached $223 million, more than double what it was three years before. Like any other business, Slattery this was not enough and so he began searching for new markets for his “product.” He bought a company called Youth Services International, which was started by W. James Hindman, the founder and former chairman of Jiffy Lube. With this deal, Slattery got five facilities in Florida, plus access to “new markets” in the mid-Atlantic and the Midwest.

As the profits rolled in and facilities were acquired, the problems continued, such as:

  • In a facility called Charles H. Hickey, Jr. School, a 2004 Justice Department investigation revealed that the staff at this facility “repeatedly tried to conceal evidence of physical assaults, disclosing only about two-thirds of all incidents. The facility was so inadequately staffed that boys were entering other boys’ rooms and assaulting them. The investigation found that the conditions at the school violated “the constitutional and federal statutory rights of the youth residents.” But the report was released shortly after the company’s contract ended and the state took over the facility. Flattery’s company received no penalties. The state had promised reforms, but never did and eventually closed the facility in 2005.
  • In 2001, another riot occurred in Las Vegas when the inmates took over the “Summit View Youth Correctional Facility” which had recently opened amid much fanfare. I was keenly aware of this facility and wrote several reports in Las Vegas newspapers criticizing what I called a “prison.” (See my web site for an example.) The state eventually took over after numerous scandals (e.g., two female staff members admitting having sex with inmates) and Slattery moved away because he could not fill enough beds to make a profit.
  • Then there was the death of 18-year-old Bryan Alexander who died of pneumonia while at a Slattery-owned Mansfield boot camp near Fort Worth, Texas. A law-suit filed by the boy’s family resulted in a settlement worth $38.3 million. Not surprisingly, part of the settlement involved Slattery selling YSI to the GEO group (another private prison corporation, formerly called Wackenhut) for $3.75 million. At the trial testimony it was revealed that the youth was “treated for a cold and flu even though he had coughed up blood for five days before his death.” Slattery walked away with more than $6.7 million in severance and stock proceeds but was never indicted.
  • Meanwhile, In New York a Democratic state assemblywoman, Gloria Davis of the Bronx, was indicted for accepting gifts from Correctional Services Corp. in return for awarding Slattery’s company state contracts. It was reported that the company had “supplied its vans to transport her to and from the state capitol in Albany free of charge. In exchange, she helped the company secure contracts to operate halfway houses in New York City.”

During the past decade, in Florida alone, Slattery was awarded 13 contracts worth more than $175 million. Again, nothing succeeds like failure.

But wait, there’s more! To be continued in Part III of this series.

 

 

 

 

Keywords: Juvenile justice, privatization, Randall Shelden

Posted in Blog, Correctional Institutions

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