ALEC Experimental Privatization Agenda: Public Policy Failure, Corporate Success

While ALEC legislators still insist on implementing ALEC experimental policies and legislation claiming they are cost effective.  But, at the same time, the public is being inundated with more and more research that privatization of governmental agencies does not benefit anyone – except the ALEC corporate profit sector member who gets the state contract or buys state assets.

Two of the on-going experimental legislative projects that ALEC has pushed for several decades include:

  •     Privatization of governmental goods and services
      “government cannot provide goods or services as cheaply as the private sector can.”


  •     Turn Capital Assets into Financial Assets: Sell or Lease Government Assets and Enterprises
    states own over $226 billion in infrastructure assets that could be sold to the private sector.”

A current case in point is the on-going privatization issue:

  • Michigan could send inmates to a troubled private prison or privatize other prisons as part of an effort to trim costs in the state’s $1.9 billion corrections system.

    The legislation is a potential boon for the GEO Group, the nation’s second-largest for-profit prison operator, which owns a now-vacant youth prison in rural Baldwin, Mich. Ever since the state canceled its contract with GEO in 2005, company executives have unsuccessfully tried to find inmates to fill the 1,725 empty prison beds. The company boosted its spending on political lobbying in Michigan more than fivefold last year.

    But the Baldwin prison has a checkered past. The state closed the facility, its only private prison, in 2005, following a series of audits and investigations that found high levels of assault, frequent staff vacancies and operating costs that exceeded those in comparable state prisons.

Privatization – A Waste of Tax Payer $$$

Multiple reports have documented that privatization of our prison system – which has been financially beneficial for ALEC corporate members CCA, Wackenhut and GEO Group  –  is wasting taxpayer money.

It’s more expensive in Arizona:

It’s more expensive in Colorado:


It’s more expensive in Ohio:

It’s more expensive in Mississippi:


Very little savings in Florida:


I could go on and on and on – but why?  It should be evident to all Americans – that the experimental privatization policies of the American Legislative Exchange Council are a public policy failure.

But today – I want to look at more than just money.  Today I want to look at the determination and historical progression that underlie a disastrous example of an ALEC promulgated privatization scheme.

ACLU Wants State Help for Privatized Ohio Prison
JULIE CARR SMYTH – AP Statehouse Correspondent (AP)
Posted January 11, 2013
COLUMBUS,Ohio (AP) — A spike in criminal activity near a recently privatized Ohio prison prompted calls for state help Friday from the American Civil Liberties Union and local officials.

The ACLU said policing the perimeter of the Lake Erie Correctional Institution in Conneaut along Lake Erie is overburdening local authorities and creating unsafe conditions. Eight people have been arrested allegedly attempting to get contraband into the facility in the past three days.

ACLU spokesman Mike Brickner said the group has documented a similar pattern of increased criminal activity around other U.S. prisons taken over by private operators.

This is What Life Inside a Private Prison Looks Like 
From September 18-20, Ohio’s Bureau of Internal Audits and Standards Compliance conducted a full internal management audit of the Lake Erie institution. The team “evaluated compliance levels with audit standards by reviewing both prepared accreditation files and observing institution operations throughout the facility.”

The privately owned and operated facility was found in compliance with 94.7 percent of the American Correctional Association’s (ACA) relatively accommodating standards. This isn’t exactly laudable, however, because in 2011 all of Ohio’s public facilities achieved an ACA compliance level of 100 percent. Worse is that CCA’s institution only achieved a compliance level of 66.7 percent on more stringent state-based corrections guidelines. According to the report, “A total of twenty (20) of the Ohio standards were found in non-compliance, and an additional eighteen (18) of the Ohio standards was judged to be non-applicable. A total of 68 Ohio standards were reviewed during the internal audit.”

In scholastic terms a 66.7 translates to a “D.” And a “D” indicates deficiency.
Conditions Continue to Worsen at Privately Owned Lake Erie Correctional Institution – Inmate Death and State Audits Illustrate Flaws in Private Prisons
CONNEAUT, OHThe American Civil Liberties Union of Ohio is calling on the Ohio Department of Rehabilitation and Correction (ODRC) and the Ohio State Highway Patrol (OSHP) to fully investigate a series of troubling reports emanating from Correction Corporation of America’s (CCA) privately owned Lake Erie Correctional Institution, including today’s report of an inmate death, possibly from a drug overdose.

The September audit at Lake Erie Correctional discovered unsafe conditions not only for inmates, but for prison staff as well. Highlights from the list of nearly 50 violations included inadequate medical care, dirty living conditions, and lack of staff training.

ALEC Experimental Privatization Agenda

Public Policy Failure

Corporate Success


Timeline (easier to follow than doing this in sentence/paragraph formT
The players in this little tale are:

John Kasich
Don Thibaut
Gary Mohr
CCA – Corrections Corporation of America

ALEC Begins

Among those who were involved with ALEC in its formative years were: Robert  Kasten and Tommy Thompson of Wisconsin; John Engler of Michigan; Terry Branstad of Iowa, and John Kasich of Ohio, all of whom moved on to become governors or members of Congress.

1979 – 2000
Don Thibault  – State senate aide and then congressional chief of staff to John Kasich

Congressional records show that Thibaut earned $99,000 as Kasich’s chief of staff and more than $29,000 as an aide for the House Budget Committee — which Kasich headed at the time — in 2000, Kasich’s last year in Congress.

1992 – 2011

1992, first available documentation of Corrections Corporation of America (CCA) being a member of ALEC

In 2011, both ALEC and CCA denied CCA participation in ALEC – even though documentation of CCA’s participation exists.

ALEC FYI Newsletter February 23, 1995
November 2, 1994
ALEC released its long-awaited Report Card on Crime and Punishment

…  ALEC legislators used the findings to emphasize the need to take a    tougher stand against criminals by increasing prison terms through “truth-in-sentencing” and “three strikes, you’re out” laws.

ALEC FYI Newsletter  July 1995

Within the Criminal Justice Task Force, the legislation that had the most enactments was the Truth in Sentencing Act, which became law in 25 states. It was introduced 34 times; no other ALEC bill recorded nearly as many enactments, Other ALEC bills that were enacted in double figures include: the Habitual Offender/Three Strikes Act (11 enactments)

Coincidentally this was the exact same article that included this quote:

“This was a landmark legislative year in ALECs history,” said ALEC    Executive Director Samuel A. Brunelli. “With our success rate at more than 20 percent, I would say that ALEC is a good investment.  Nowhere else can you get a return that high.”

ALEC Annual Meeting Program
ALEC Task Force
Chairs and Private Sector Chairs
Criminal Justice
Representative Michael Nye, Michigan
John Rees, Corrections Corporation of America

ALEC Annual Report (my emphasis)

ALEC developed model criminal justice policies that kept criminals off of our streets for longer periods of time and allowed private industry to use its expertise to help states meet their growing incarceration needs. Model bills like the Truth in Sentencing Act, which requires inmates to serve at least 85 percent of their sentence; and the Habitual Violent Offender Incarceration Act, or “three strikes” legislation ensured that violent criminals served more time behind bars. ALEC’s Private Correctional Facilities Act allowed states to contract with private industry to house their growing criminal populations. ALEC has been supporting common-sense solutions like these since the early 90’s. A majority of states now have some type of “truth in sentencing” or “three strikes” laws on their books. Also, as of January 2000, 28 states have authorized the use of private prisons to house inmates

After serving 18 years in the U.S. House of Representatives John Kasich retired in 2000 and took a managing director position in Ohio with Lehman Brothers

In 2000, a Lehman-backed deal helped CCA avoid bankruptcy; since then, Lehman Brothers has played an essential role in CCA’s survival and expansion.

 2000 – 2007

Policy and political organizations associated with Kasich’s New Century Project have paid Thibaut more than $700,000 over the past decade, according to filings.

He [Thibaut] later worked part-time for U.S. Rep. Pat Tiberi, according to the documents.

2000 – 2008

2000 – John Kasich joins Lehman Brothers

April 9, 2002 (12:18 PM) Hours after a press conference calling on Lehman to withdraw from plans to help industry leader Corrections Corporation of America refinance $800 million in debt, activists got an answer: Drop dead!

The answer came in the form of a CCA press release announcing that the prison company had secured a commitment from Lehman Brothers “to provide CCA with a new $695.0 million senior secured credit facility,” to be combined with a $150 million notes offering.

In 2003 Lehman Brothers, at a substantial profit, arranged a $785 million refinancing package for CCA.

Prior to 2005
Gary Mohr served as a deputy director for the [Ohio] corrections department for two different administrations. He’s also been warden at three Ohio prisons.

2007 – 2009
Gary Mohr works for Corrections Corporation of America (CCA)

Lehman goes bankrupt

May 1, 2009, Kasich filed papers to run for Governor of Ohio


On March 24, 2010 this headline ran in The Dispatch: “Governor’s race: Kasich leads Strickland 42-37% in new poll”.

On March 24, 2010 Credo Company Llc was registered in Ohio – Donald Thibaut, Founding partner

Sometime in 2010 (reported in January 2011)
CCA spokesman Steve Owen said the company hired Thibaut’s firm, The Credo Company, to share the benefits of private prison operations with the new governor and state lawmakers.

November 2010
Kasich elected governor of Ohio

January 2011
Kasich hires Gary Mohr as director of Ohio Department of Rehabilitation and Correction

February 2011
CCA lobbyist Robert Kovey brings Corrections Corporation of America to meet with Gary Mohr

March 2011
Kasich announces privatization of additional prisons in Ohio

September 2011
Department of Rehabilitation and Corrections (DRC) announced today that they would be selling the Lake Erie Correctional Institution, goes to CCA

First prison ever in the US sold to a private company.

January 2012
Corrections Corporation of America, the nation’s largest operator of for-profit prisons, has sent letters recently to 48 states offering to buy up their prisons.

All the parties involved purport that there is nothing nefarious involved with the turn of events in Ohio.

If you want to believe that   ….