Justice Department declines charges in Idaho prison scandal

BOISE, Idaho (AP) — The U.S. Justice Department has declined to press criminal charges in connection with an investigation into allegations of contract fraud and public corruption at a private prison in Idaho.

The FBI began investigating the Idaho Correctional Center last year. The facility had been run by Corrections Corporation of America and was known for being so violent that inmates dubbed it “Gladiator School.”

The company had been accused of knowingly understaffing the prison and falsifying records to cover up tens of thousands of hours of vacant guard posts.

The DOJ investigation looked into whether the company defrauded the state under its $29 million annual contract and whether state officials tried to delay or prevent an investigation into the matter.

U.S. Attorney Wendy Olson said Wednesday that the probe was complete, and the agency didn’t find probable cause to file charges.

Olson said the review showed that some Corrections Corporation of America employees falsified staffing reports, but they were relatively low-level workers. No one at the assistant warden position or higher was aware of the fraud at the time it was committed, the investigation found.

Additionally, she said, the employees responsible for billing didn’t know about the false reports, and since the prison company was paid based on number of inmates — not number of guards — there wasn’t direct evidence that the fraud was intended for financial gain.

There also was no evidence anyone with the Idaho State Police, the Idaho Department of Correction or the governor’s office sought to delay, hinder or corruptly influence a state investigation into the staffing allegations, Olson said.

She said a series of miscommunications and incorrect assumptions between agencies made it seem that there were improper obstacles to an internal probe and resulted in news reporters and a federal judge receiving erroneous information.

“While these miscommunications ultimately gave rise to suspicion of an effort to delay, hinder or influence a state criminal investigation, such miscommunications, unsupported by any other evidence, do not rise to the level of criminal misconduct,” Olson said.

Idaho leaders from the governor’s office, attorney general’s office, corrections department and state police department either declined comment or didn’t respond to phone or email messages Wednesday.

Corrections Corporation of America public affairs director Jonathan Burns said the company appreciates the work of the FBI and U.S. attorney and respects their decision.

“With the investigation resolved, CCA has fulfilled the commitment our company made from the beginning to make Idaho taxpayers whole,” Burns wrote in a prepared statement. “CCA’s goal is to provide every person entrusted to our care with safe, secure housing and quality rehabilitation and re-entry programming.”

The Idaho State Police Department was originally asked to investigate operations at the prison in 2013 after an investigation by The Associated Press showed the company was giving state officials falsified documents to cover up understaffing.

For the next year, Idaho Department of Correction and governor’s office officials repeatedly referenced the state police investigation, citing the criminal probe as a reason to turn down public records requests and even testifying in federal court that the review was underway. But the Idaho State Police Department hadn’t launched an inquiry and made no attempt to correct the misinformation.

The lack of an investigation only came to light after the AP filed a public records request for state police documents.

State police finally launched a probe after Gov. C.L. “Butch” Otter ordered it, more than a year after the initial request. Within a month, however, the FBI took over.

The FBI focused only on whether federal crimes were committed, Olson said. She didn’t say if investigators determined why Idaho State Police officials declined to correct the other state agencies.

“There were a number of other actions or matters that may be of concern to the state agencies or to the voters or whatever,” Olson said. “There is insufficient evidence to prove any criminal charges beyond a reasonable doubt.”

Corrections Corporation of America, one of the largest private prison companies in the world, had operated the prison south of Boise for more than a decade. After the falsified staffing documents were uncovered, the state’s correction department hired an auditing firm to determine how many hours the prison was understaffed in violation of the company’s contract.

The auditing firm determined the Nashville, Tennessee-based private prison company left more than 26,000 hours of mandatory guard posts understaffed or inadequately covered during 2012, though the Corrections Corporation of America disputed those numbers as inflated.

The governor, Otter, a longtime supporter of private prisons, announced in January 2014 that the state would be taking over the prison. The next month — long before any law enforcement investigation had been completed — he reached a settlement agreement with the company.

Under the deal, Corrections Corporation of America agreed to pay the state $1 million, and Idaho dropped any right to sue over staffing.

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