Oklahoma prisons in jeopardy after company to terminate contract

The GEO Group — the company that owns two correctional facilities in Oklahoma — said this week it was terminating its contract with the Oklahoma Department of Corrections for the Lawton Correctional and Rehabilitation Facility and that state corrections officials would need to find new housing for close to 4,000 high-security inmates.

The company made its announcement in an email from GEO Group lobbyist Tonya Lee and in letters from George Zoley, GEO Group’s executive chairman. The documents, obtained by The Oklahoman from sources outside the Capitol, were sent to a handful of state lawmakers and state Corrections Department officials.

The GEO Group owns both the Lawton Correctional and Rehabilitation Center in Comanche County and the Great Plains Correctional Center in Hinton. In Hinton, GEO Group leases the facility to the Corrections Department, which operates it.

The announcement appears to put the state's contract with the Lawton facility in jeopardy — unless new funding and contract terms can be quickly arranged and approved — and, at the same time, gives the department only a tiny window of time to provide additional funding to repair damaged equipment and infrastructure at the Great Plains facility in Hinton.

“I wanted to make you aware of the termination letter GEO has submitted to DOC regarding the Lawton Correctional Facility, as well as a breach of contract letter for the Hinton Great Plains Facility,” the GEO Group lobbyist wrote in a terse email to several state lawmakers and corrections officials. “These two facilities, combined, house close to 4,000 high security inmates that the state will need to find alternative housing for," Lee's email said.

More: Officials lower number of people injured in 'group disturbance' at Lawton prison to 3, down from 30

Zoley wrote that the company was discontinuing the lease of the Lawton Correctional and Rehabilitation Facility because it “could not continue to provide the facility and the associated correctional services without adequate funding and relief from facility overcrowding.”

In a separate letter, Zoley said the state was in default of its lease of the Great Plains Correctional Facility in Hinton.

Christopher Ferreira, corporate relations director for the GEO Group, told The Oklahoman on Thursday that his company was proud of the long-standing public-private partnership with the state Corrections Department, which, he said, dates to 1998. Ferreira said wage inflation and staffing shortages following the COVID pandemic have negatively impacted staff recruitment and retention at all state correctional facilities.

He said Gov. Kevin Stitt's recent veto of legislation to increase inmate per diem payments would only exacerbate the company's significant challenges. "Over the last 26 years, we have made significant capital investments to provide needed correctional bedspace to help reduce Oklahoma prison overcrowding," Ferreira said in an email.

Under Senate Bill 1167, the per diem payment for inmates housed in private prisons would have increased. On June 14, Stitt vetoed the bill, saying it would entrench a current government program and "create an unfunded mandate to increase per diem rates paid to private correctional facilities for guarding inmates."

In her email, Lee wrote that Zoley, the company's executive chairman, traveled to Oklahoma this year to meet with Stitt about the need for a per diem increase. "(The) GEO group's chairman of the board flew in to meet with Governor Stitt ahead of the veto to explain the plans for the increase," she wrote. "Governor Stitt refused to acknowledge any of Dr. Zoley's concerns for the need of an increase."

The company, Lee said, has been housing some of the state's most dangerous inmates and all of the Corrections Department's protected custody inmates at a per diem rate lower than any provider, including the state, itself.

"For Stitt to treat a long term, cooperative state partner, providing a critical service at the lowest cost in the state, with such disregard is completely irresponsible to public safety," Lee wrote.

Meyer Siegfried, a spokesman for Stitt, said the governor's office and Corrections Department leadership have been in discussions to ensure that Oklahomans, including those incarcerated in state prisons, are safe.

"After those discussions, it became clear that the private prison run by GEO was not keeping prisoners safe, which put all Oklahomans at risk," Siegfried said in an email. "The state is quickly working on a plan to safely transfer prisoners, as needed, and discuss other arrangements."

More: Inmates locked inside shower stalls for days file lawsuit against Oklahoma Department of Corrections

Ferreira said after extensive consideration of the current funding levels and resources relative to the present service requirements, company officials determined "that we are no longer willing to manage the 2,600-bed Lawton Correctional and Rehabilitation Facility without changes to financial and operational terms. We have proposed a new three-month transition agreement starting July 1, 2024, allowing for an orderly relocation of inmates if new funding and contract terms cannot be mutually agreed upon.”

Ferreira said the significant damage caused by inmates to the physical plant and equipment at the 1,940-bed Great Plains Correctional Facility, forced the company to issue a default notice to the state of Oklahoma under its lease agreement.

"The default notice provides for a cure period of 30 days for the State of Oklahoma to carry out all necessary physical plant and equipment repairs at an estimated cost of $3 million," he said.

Corrections Department responds to GEO Group's complaints

State corrections officials initially said little but later pushed back against the GEO Group's complaints. "We are currently working through multiple options and will release the information once plans are finalized," Kay Thompson, the agency's spokeswoman, wrote in an emailed response to The Oklahoman early Thursday.

Several hours later, Thompson issued a follow-up statement:

"The Oklahoma Department of Corrections has been engaged in ongoing contract negotiations with The GEO Group, which operates the Lawton Correctional Facility. Last Friday, GEO sent us and Oklahoma Senate leadership a letter of discontinuation for LCF. It is unclear why they felt our internal negotiations needed to be elevated to a state level," Thompson's email said. "Governor Kevin Stitt recently vetoed legislation that would have required ODOC to pay an additional $3 million per year to GEO. This financial burden is excessive, considering the subpar results. We thank the governor and our legislative partners, particularly Speaker Charles McCall, for standing with the people of Oklahoma."

Over the last four years, GEO has received a $6.8 million increase in funding, Thompson said.

"Yet, their operations have not improved — being the most violent prison in Oklahoma — and continues to lack the standard of care expected by ODOC. Our dissatisfaction with the current state of LCF and GEO’s facility operations has reached a critical point," Thompson's statement said. "It is our mission to protect the public and the inmate. Therefore, we have cultivated several options to secure a safer location to house our incarcerated population, and we are meeting with the Board of Corrections next week to finalize the plans. We look forward to these new opportunities to care for our inmates and change their lives for the better. Further details will be shared with the public as they become available."

The GEO Group's Lawton Correctional and Rehabilitation Center is the last privately operated prison in Oklahoma. The state also leases the Great Plains Correctional Center in Hinton from the company. The Hinton agreement was signed in April 2023, and lasts for five and a half years, with “subsequent unlimited one-year options,” according to SEC filings. Between the two facilities, the total number of beds is more than 4,000.

Headquartered in Boca Raton, Florida, the GEO Group's website notes the company offers "complementary, turnkey solutions for numerous government partners worldwide across a spectrum of diversified correctional and community reentry services." The GEO Group has owned and operated facilities in Oklahoma for several years. The GEO Group operates 66 facilities and approximately 73,400 beds in the U.S. It is the second-largest for-profit prison operator in the United States, behind Corrections Corp. of America, with total revenue of $1.69 billion and net profit of $143.84 million in 2014.

The publicly traded company reported revenues of $605.7 million in its most recent earnings report.

The latest contract between the Corrections Department and the company was for a single year, with an ending date of June 30, 2024, for Lawton Correctional and Rehabilitation Facility. The maximum amount paid for the contract year was not to exceed $49,250,000, excluding additional contracted services and the state will not pay for unused beds.

According to the contract listed in the Board of Corrections June 2023 materials, either party can terminate the contract for specified reasons. An example would be neglect or a failure to perform any obligations outlined by the contract.

The letters and the email follow a series of high-profile violent incidents and killings at both facilities.

GEO Group tells state to find alternative housing for inmates

Lee, the company's lobbyist in Oklahoma, said GEO Group officials “have been meeting with DOC for a year expressing the critical need to increase security and the need for additional funding for LCF (Lawton) and the destruction of the infrastructure by inmates at the Hinton facility.”

“GEO officials told DOC they would be terminating the Lawton contract if funding levels were not brought up to a reasonable level due to the increased public safety risk," Lee wrote in her email. She said the Lawton facility was originally built for medium security inmates. “However, DOC continues to send high-risk maximum-security inmates to the facility with classification overrides.”

Lee wrote the prison had operated at a critical level for several years. “Over the years GEO has made infrastructure improvements to safely house a segment of the population,” Lee wrote. “However, the past few years the security levels and the amount of these classification types have increased to the point it has become a safety risk.”

The GEO Group, she said, cannot sustain the risk any longer.

GEO Group: State owes millions for damage caused by inmates in Hinton

In its Notice of Event of Default, Wayne Calabrese, the GEO Group's chief operating officer, wrote that recent inspections of the Great Plains Correctional Center in Hinton paint an ugly picture of the prison's condition due to damage caused by inmates.

"The condition of the facility has been severely compromised by the Department's (DOC) failure to adequately supervise and prevent state offenders housed at the facility from damaging the facility and/or to perform tenant's required day-to-day maintenance obligations," Calabrese wrote. "The failures constitute 'tenate's failure to keep, observe, perform, meet or comply with any covenant, agreement, term or provision of this leader required to be kept, observed, met, performed, or complied with by tenant."

The cost to repair the facility, Calabrese wrote, would be expensive.

"We estimate the current cost of repairing damange caused by ODOC offenders to be approximately $3 million," Calabrese wrote. He said the contract also entitles the GEO Group to a payment of $6 million in liquidated damages that are based upon prior extensive leasehold improvements made to the facility.

"Substantial damage has been caused throughout the Great Plains Facility by the department's failure to provide adequate security staff to properly supervise and manage the offenders housed at the facility and by the department's failure to provide adequate staffing to perform its daily routine maintenance and repairs and required under the terms of the lease," he wrote.

Lawmaker said he's shocked by GEO Group announcement

State Rep. J.J. Humphrey said he was shocked by the GEO Group's announcement. Humphrey, the chairman of the House Criminal Justice and Corrections committee, has raised numerous questions about the safety of both the Hinton and Lawton facilities for more than a year.

Humphrey, a Republican from Lane, has also been harshly criticized by state Corrections Department officials for his questions and comments. Thursday, he said the state has no place available to relocate thousands of high-security inmates.

"Should the contracts be terminated it will result in the Lawton Correctional Facility and the Hinton Correctional Facility being closed. This means Oklahoma will have approximately 4,000 higher security inmates without a facility to house them in," he said.

Humphrey said the current (Corrections Department) director refuses to report all the stabbings, assaults, murders, wrongful, deaths and rapes that have been occurring under his leadership. "I have reported serious human rights violations like locking inmates in 2 by 2 cells without proper food, water, and with no restroom. I have reports of outdated food and facilities in very poor conditions and from information I have received a massive shortage of correctional officers," he said.

Humphrey said he received an unofficial report the Corrections Department "is considering housing inmates with another private company out of state."

"This will mean an even greater cost for the people of Oklahoma," he said. "I have verified the numerous violations reported during this director’s tenure. Yet I have been completely ignored. The staff, the inmates, and the inmates’ families continue to suffer because of the total failure of this director. I hope this latest debacle might awaken the Oklahoma legislators and that they may finally follow my request for an independent audit of the Department of Corrections."

Concern about the Lawton facility has increased over the past few years. In May, two inmates were killed and many others were injured during a group fight at the facility. Corrections officials said at least two of the inmates sustained serious injuries and were transported to the hospital ― one via medi-flight and one via ground vehicle.

"We had a group disturbance at LCRF which resulted in multiple inmates injured and two deaths," Thompson, the Corrections Department spokeswoman, said in an email. "It’s unknown at this time how many had minor injuries that were treated at the facility."

Last October, Raymond Bailey, an inmate at the facility, was found dead in a garbage bin, covered by a plastic bag with four small milk cartons tossed on top.

At the Great Plains Correctional Center in Hinton, 17 inmates were kept in shower stalls for days at a time without water, bathroom breaks and mattress pads, according to incident reports from August 2023. Corrections Department officials said the inmates were placed in the shower stalls due to overwhelmed or refused housing.

This article originally appeared on Oklahoman: GEO Group looks to end 2 contracts in Oklahoma for high-security jails