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CoreCivic’s private prison power play

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The private prison industry is nothing if not opportunistic. Corrections Corporation of America, recently rebranded as CoreCivic, first saw inmates as dollar signs in the 1980s, as the War On Drugs began pushing state prisons to their limits. By 1997, Montana’s prisons were out of room, too, and shipping hundreds of inmates out of state. The state didn’t have the cash to build another prison, so then-Gov. Mark Racicot and state legislators turned to CCA.

Crossroads Correctional Center opened in Shelby two years later, in 1999, with a charity event offering locals a chance to sit in the new solitary confinement cells for a small donation. The state and CCA signed a 20-year contract, including a provision that allowed the state to eventually buy the prison, if it wished.

Now, as that contract nears its 2019 expiration date, the state once again finds itself short on money. Naturally, CoreCivic sees an opening.

The company’s proposal emerged this month through Shelby’s state legislators, Rep. Rob Cook and Sen. Llew Jones, both Republicans. MTN News first reported the terms, which were lauded by other Republican leaders: CoreCivic would give the state $30 million to help plug its $227 million budget hole, and in exchange the state would extend the company’s contract another 10 years.

The proposal is looming large over the special session to address budget shortfalls scheduled to begin Nov. 13, even as Democrats insist they’re not interested. A spokesperson for Gov. Steve Bullock describes the proposal as an attempt by CoreCivic to use “the current budget situation to force the state into a long-term contract with less than favorable terms,” while some Republicans have said they won’t agree to Bullock’s proposed tax increases without accepting CoreCivic’s offer.

Democratic lawmakers uncomfortable with privatized prisons have previously signaled their intent to closely scrutinize CoreCivic’s contract in 2019, with an eye toward either taking over the facility or phasing it out as new policies designed to reduce incarceration take effect. Yet CoreCivic’s offer—potentially worth $150 million to the company over the ensuing decade—could ensure the company’s profits keep flowing in Shelby even beyond those ten years.

That’s because the $30 million that CoreCivic offered is actually money that taxpayers have been paying to the company in the form of a “use fee” since the day the prison opened. Under the original contract, those payments could be used as a credit against the sale price of the prison, should the state elect to purchase it. If they were instead converted into short-term cash, the state may have to pay a lot more whenever it might decide it wants out of the private prison business.

Bullock spokesperson Ronja Abel would not say if the governor is interested in buying the facility, but Sen. Cynthia Wolken, D-Missoula, says she’s “not sold” on it, since the prison has already depreciated more than $30 million, according to company reports. “I really think we need to take a wait-and-see attitude,” she says.

If the state doesn’t take the deal, and it doesn’t buy the prison, then it forfeits the use fees. At a time when the state needs $227 million, convincing Republicans to wait and see may be a hard sell.

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