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FBI finds faulty communication, no crime in prison probe

U.S. Attorney Wendy Olson, center, speaks to reporters on Wednesday, May 20, 2015, in Boise, Idaho. Olson announced the U.S. Justice Department would not press criminal charges in connection with a contract fraud investigation at a private Idaho prison. (AP Photo/Kimberlee Kruesi)

BOISE, Idaho (AP) — An FBI investigation into a scandal surrounding a private prison in Idaho turned up no evidence of crime, but it did show plenty of miscommunication and faulty assumptions between state agencies, federal prosecutors say.

The U.S. Justice Department declined to press criminal charges after a 15-month probe into allegations of contract fraud and public corruption at the Idaho Correctional Center.

The state’s largest prison was run by Corrections Corporation of America under a $29 million annual contract until last year, and was known for being so violent that inmates dubbed it “Gladiator School.”

Specifically, the FBI was investigating two things: whether the company defrauded the state by understaffing the prison and faking records for financial gain, and whether state officials tried obstruct an investigation into the matter.

U.S. Attorney Wendy Olson said Wednesday that the agency didn’t find cause to file charges in part because relatively low-level employees were responsible for false staffing reports, and there was no evidence the deception sought to enrich the company.

Corrections Corporation of America was paid based on the number of inmates, not the number of staffers, so the falsification didn’t change the amount of money Idaho owed. The contract did require a minimum staffing level, but outlined only civil penalties for violations.

Ultimately, there was no evidence of criminal fraud intended for financial gain, Olson said.

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, she said.

Olson, however, said a series of miscommunications and incorrect assumptions between agencies made it seem that there were improper obstacles to a state 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.

State officials have been silent since the investigation results were released.

Corrections Corporation of America public affairs director Jonathan Burns said the company appreciates the work of the FBI and the 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 statement.

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 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.”

A private auditing firm hired by the state corrections department to look into understaffing found that the 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.

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 announced 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 the staffing shortages.

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