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Company vying to build Alabama’s prisons seeks foreign funding as most U.S. firms cut ties

Eddie Burkhalter

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One of the two private prison companies vying to build Alabama’s new prisons is looking to a Japanese Bank for financing after many U.S. banks have cut ties with businesses that detain immigrants and run for-profit prisons. 

Tennessee-based CoreCivic, one of four companies that Gov. Kay Ivey’s office in November announced  will move forward in a plan to build three new prisons at an estimated cost of $900 million, is seeking a $250 million loan from the Japanese financial firm Nomura Holdings Inc., according to several news accounts. 

CoreCivic and the private prison company Geo Group, another of the four moving forward in Alabama’s process to build the new prisons, have both faced increased public pushback for providing housing for immigrants for the U.S. Immigration and Customs Enforcement (ICE), some of which held children in cages along the U.S. border, which spurred condemnation and lawsuits alleging mistreatment and abuse of those detained. 

Earlier this year CoreCivic scrapped a deal with Bank of America in which the company sought the bank’s help raising $250 million from investors to pay back revolver debt, according to Forbes

Forbes also cited an article by the financial new service Debtwire that reported that the Japanese bank Nomura around Thanksgiving began reaching out to investors to determine whether there was support for a new term loan for CoreCivic. 

The financial services company Moody’s announced on Dec. 11 that CoreCivic was seeking a $250 million loan to pay back down on $350 million in bond debt. 

According to Moody’s investors to the loan would have first priority claim on a “small, select pool of real estate assets that have active management contracts with US state government partners.” 

Wells Fargo, SunTrust, Bank of America, BNP Paribas, Barclays and Fifth Third Bankcorp have all said the banks would stop financing private prison and immigration detention companies.

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Without access to those banks, CoreCivic and Geo Group stand to lose 72 percent, or $1.9 billion, of the companys’ current available financing, according to a joint report in July by In the Public Interest and several other groups.  

Birmingham-based Regions Bank continues to provide financing to CoreCivic, however, a Spokeswoman for Regions confirmed for APR on Wednesday. 

In a statement to Forbes in September a Regions spokesperson wrote that “we recognize that people have differing views about the private sector’s involvement in prisons. This is a complex issue that government officials and policymakers are in the best position to address directly.”

APR’s questions to CoreCivic about the company’s financing plans if the company is selected to build one or more of Alabama’s three new prisons went unanswered on Wednesday. 

In addition to Regions, four other regional banks still provided financing to CoreCivic as of September, according to Forbes, which included Citizens in Rhode Island, Nashville-based Pinnacle Bank, First Tennessee Bank in Memphis and Georgia-based Synovus Bank. 

Bloomberg reported on Wednesday that CoreCivic had also previously sought the $250 million loan from Citizens Financial Group Inc., but that the deal fell through. 

“We do maintain a commitment to lending to companies that conduct their business in a socially responsible manner,” wrote Peter Lucht, a spokesman for Citizens, in an email to Bloomberg. “If that is not the case we are prepared to exit those relationships.”

An investment portfolio manager at TwentyFour Asset Management on Monday wrote about CoreCivic’s struggles finding financing due to pushback on the company’s involvement with detention centers and private prisons, and referred to such social and political pressures as Environmental, Social and Governance (ESG) factors. 

“CoreCivic’s difficulty in placing the deal is the result of the increased inclusion of ESG factors in the investment process of many fixed income investors. Despite the company’s improving fundamentals, this increased focus on ESG has eroded its access to markets and made placing even a small, BB+ rated loan a significant challenge,” wrote Pierre Beniguel, a portfolio manager at TwentyFour Asset Management in a post on Monday. 

Alabama’s violent, overcrowded and understaffed prisons face the possibility of a federal takeover. The U.S. Department of Justice detailed the those problems in a report released in April that states Alabama may be in violation of prisoners’ Constitutional rights. 

Under the current plan the companies looking to build the prisons would lease the facilities to the state but would not operate the prisons. 

The Alabama Department of Corrections expects to receive build proposals from the four contenders in the spring of 2020.

 

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Crime

Mobile County jail inmates, officers test positive for COVID-19

Eddie Burkhalter

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The Mobile County Sheriff’s Office says six inmates at the county jail and even more correctional officers have tested positive for COVID-19, according to WKRG, which broke the story on Thursday.

Attempts to reach the sheriff’s office’s public information officer wasn’t immediately successful Thursday, but WKRG reported that the sheriff’s office confirmed that 6 inmates have tested positive for the virus and more than 6 officers also tested positive. The news station reported that the sheriff’s office was working to get an exact number of those who tested positive for the virus.

Two Alabama Department of Corrections employees have tested positive, but no inmates in state prisons had confirmed cases as of Tuesday, the last day ADOC had updated testing numbers.

This story will be updated.

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Pardons and Paroles: Restarting parole hearings “under review” amid COVID-19 crisis

Eddie Burkhalter

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The Alabama Bureau of Pardons and Paroles is reviewing the possibility of restarting parole hearings through virtual means during the COVID-19 crisis, a bureau spokesman said Thursday. 

Terry Abbott, spokesman for the Bureau of Pardons and Paroles, in a message to APR said that both a Wednesday report by the ACLU of Alabama on a decline in parole hearings and the possibility of resuming hearings via teleconferencing are under review. 

“We are in continuing discussions with the Governor’s Office in an effort to restart pardon and parole hearings as safely and efficiently as possible during this very difficult time for the people of Alabama,” said ABPP director Charlie Graddick in a statement Thursday. “The Bureau hopes to announce a plan and timetable soon.”

Graddick said that the resumption of hearings “is a complex issue given the national health emergency, stringent laws governing the Board’s hearing process, including a thirty-day notice requirement to crime victims and officials, and the legal requirements providing crime victims and other stakeholders the opportunity for meaningful in person participation.”

The ACLU of Alabama’s Campaign for Smart Justice’s report shows that almost 4,000 people were eligible for parole hearings before April 1, 2020, but since November, the bureau has scheduled an average of 173 parole hearings per month, which is “less than half the average number of monthly hearings in FY 2019, and only a third of the average number of hearings held in FY 2018.” 

In September 2019, Gov. Kay Ivey appointed former Attorney General Charlie Graddick as executive director of ABPP, and former Jefferson County prosecutor and Assistant Attorney General Leigh Gwathney as chair of the parole board. 

The report notes that Graddick suspended all hearings in September and October, and when hearings resumed in November, the number of persons receiving a hearing declined sharply. 

“Additionally, the current board has denied release in 85 percent of cases considered. Only 133 people were granted parole out of the 866 cases considered in the last five months, a grant rate of just 15 percent,” the report states. 

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During fiscal year 2019, the board’s parole grant rate was 31 percent, and in FY 2018, was 54 percent, according to the report. 

“Unless there is a dramatic increase in the number of parole hearings and parole grants, Alabama’s prison population will continue to skyrocket,” ACLU’s report states. 

Aabama’s prisons were at 170 percent capacity in January, according to an Alabama Department of Corrections (ADOC) report

As of Tuesday, the last day ADOC had updated testing figures, 30 inmates had been tested, but no inmate was positive for COVID-19. There were seven pending test results for inmates, however. 

Two ADOC employees have tested positive for the virus. An employee at Staton Correctional Facility in Elmore County and at the St. Clair Correctional Facility both tested positive for COVID-19. 

Rep. Chris England, D-Tuscaloosa, in numerous tweets this week has called on the bureau to restart parole hearings by using an order by Ivey that allows board meetings to safely take place during the COVID-19 crisis.  

Ivey’s March 18 order allows state government bodies to “establish a quorum, deliberate, and take action- by means of telephone conference, video conference or other similar communications equipment” in light of the COVID-19 pandemic. 

England on Thursday cited an Al.com article that quotes Ivey’s press secretary, Gina Maiola, as saying Ivey recognized the importance of keeping Alabama’s criminal justice system functioning and included the option of holding virtual meetings in her order. 

@ALBPP seems that @GovernorKayIvey expected the Board to use the March 18th order to figure out a way to hold hearings and not cancel them. It has become clear that the Bureau’s mission is basically not to parole anyone, crisis or not.” England said in a Thursday mornring tweet. 

England in one tweet also noted that the Georgia Board of Pardons and Paroles is considering releasing some inmates serving for non-violent crimes to community corrections programs to serve the remainder of their sentences outside of prison, as reported by WTVM

England told APR by phone Thursday that it doesn’t make sense that when all aspects of the state government are scrambling to address the crisis, a major component isn’t acting to help. 

“It would seem that the default position of the bureau has become, in times of challenge or controversy, just to stop holding hearings,” England said. 

England also said the bureau should be reviewing and releasing inmates who have serious medical problems, who are much more likely to suffer serious complications or death from COVID-19.  

“If COVID-19 ever invaded our prison system we would basically be giving them a death sentence,” England said.

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Crime

Deadline extended for Alabama prison bids due to coronavirus

Eddie Burkhalter

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Gov. Kay Ivey on Tuesday announced that because of the COVID-19, she’s giving a two-week deadline extension for submission of proposals to build then lease three new prisons to the state.

Those proposals had been due by April 30 but the two developer teams – Alabama Prison Transformation Partners and CoreCivic – will have until May 14 to file their proposals, according to a press release from Ivey’s office Tuesday.

The decision to extend the proposal submission deadline came after discussions with two groups about the impacts each are experiencing because of COVID-19 social distancing guidelines, according to Ivey’s office.

“I am steadfastly committed to the strategic effort to build three new men’s correctional facilities – this ‘Alabama solution’ is a direct result of our dedication to implement actionable solutions that address long-standing challenges facing our prison system,” Ivey said in a statement. “Given the unforeseen circumstances associated with COVID-19, it is in the best interest of the state of Alabama to grant this extension so that the developer teams have adequate time to perform required due diligence and to prepare thorough and thoughtful proposals.”

Ivey’s plan to build three new prisons is part of her solution for fixing the state’s overcrowded, deadly prisons, which remain under threat of a federal lawsuit if state officials don’t address what the U.S. Department of Justice has said are violations of inmates’ Constitutional rights to protection from violence and sexual assault.

Alabama Department of Corrections Commissioner Jeff Dunn said in a statement that the spread of COVID-19 “has only further demonstrated the critical need for new correctional facilities in Alabama.”

“As we have stated before, overcrowded conditions within the Department’s dilapidated facilities create increasingly challenging circumstances to ensure inmate and staff health and safety,” Dunn said. “The developer teams expressed the need for an extension – due to work and travel restrictions implemented in the wake of this national health crisis – and we fully supported the extension.  Improved prison infrastructure, increased staffing, and stronger rehabilitation programs will allow for transformational results.”

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Public defender working to free some inmates in Birmingham jail amid COVID-19 crisis

Eddie Burkhalter

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At least five people in the Jefferson County Jail had their paroles revoked after serving time in state prisons for non-violent crimes, and as the threat of COVID-19 inside jails and prisons increases, some are working to get them out before it’s too late.

The Alabama Bureau of Pardons and Paroles told APR on Tuesday, however, that the bureau doesn’t have the authority to release those inmates.

Adam Danneman, lead attorney at the Jefferson County Public Defender’s Office, is concerned with the bureau’s assertion.

“They’re only in because of the violations filed by the Parole Board,” Danneman said of those state inmates in the Birmingham jail. “And they’ve already revoked these people.”

ADOC on March 20 announced a 30-day moratorium on taking prison transfers from county jails in an attempt to stave off a COVID-19 outbreak in state facilities.

Danneman told APR on Tuesday that his office is working to get released those who have already served time for non-violent offenses, were out on parole and who were picked back up on mostly technical violations.

“We’re lucky in Jefferson County that our judges and our DA and our sheriff’s department have all collaborated and used some common sense, proactive measures in this crisis to keep as many of our at-risk, non-violent citizens out of harm’s way as much as possible,” Danneman said.

Now he’s hoping the state’s Pardons and Paroles Board does the same, by releasing those who can safely be released before the deadly virus spreads behind the fences.

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It’s a matter of when, not if, Danneman said of the likelihood of COVID-19 cases in the Jefferson County Jail.

“I hope I’m wrong. I hope it never comes into the jail, but if it does it’s going to be bad,” Danneman said.

There’s been no positive COVID-19 case among state inmates as of Monday, according to the Alabama Department of Corrections (ADOC), but an administrative employee at one prison has tested positive for the virus.

As of Monday, 30 state inmates had been tested for the virus, but there were still seven test results pending, according to ADOC.

Criminal justice reform advocates and legal experts have been sounding the alarm for weeks over the threat of an outbreak of the virus in jails and prisons.

Older inmates and those with medical conditions are at much greater risk from serious complications and death from the novel coronavirus, health experts warn.

“The Alabama Bureau of Pardons and Paroles does not have the authority to release these offenders,” wrote Alabama Bureau of Pardons and Paroles spokesman Terry Abbott, in a response to APR on Tuesday.

Abbott said that the Parole Board has revoked parole on six of seven inmates APR inquired about, who are awaiting transport back to the Alabama Department of Corrections to serve their sentences. The seventh inmate’s case is to come before the parole board this week, Abbott said.

It was unclear Tuesday how many state inmates were serving in county jails after having their paroles revoked for technical violations. Abbott said that number would change daily and would also involve people who have already had parole revoked and are awaiting transfer to a state prison.

Nancy Aichele, 53, is among those state prisoners serving in the Birmingham jail, where she’s been since January 24. Aichele had already served more than 18 years of a life sentence for an escape charge when she was picked up on a parole violation.

Aichele was charged with escape for walking out of an ADOC facility, without injuring anyone, after being convicted and sentenced to 3 years in 1990 for forging an $80 check, according to court records. The escape charge resulted in a life sentence with the possibility of parole.

After she was released on parole, Aichele was charged with obstruction, which triggered her parole violation and returned her to serve the remainder of her life sentence.

The obstruction charge was later dropped, according to court records, but the Bureau of Pardons and Paroles Board revoked her parole regardless.

Willie Toyer, 55, is also in the Jefferson County Jail and was sentenced to life on a 1996 marijuana trafficking charge.

Toyer was paroled after serving 22 years and six months, but his parole was revoked for two subsequent drug charges in March; a possession charge and a misdemeanor charge of possessing prescription pills.

Toyer’s case is to go before the Pardons and Paroles Board this week, according to the Bureau of Pardons and Paroles.

Leo Cain, 64,  was sentenced to life in 1994 on a first-degree robbery charge from 1992. He served almost 22 years before being paroled, which was revoked after he was charged with misdemeanor obstruction for giving false information to law enforcement.

Danneman said a parole officer had told Cain that his parole wouldn’t be revoked if he pleaded to the misdemeanor obstruction charge, but after he agreed to do so he was arrested and returned to serve the rest of his time regardless.

Danneman said he’s concerned about Cain because of his age, which puts him at greater risk of death from COVID-19.

“He’s not somebody who needs to be incarcerated right now, if at all,” Danneman said.

Shannon Blackman, 54, received a life sentence for a 1996 burglary and had served 23 years before being paroled. She’s had no new criminal charges, but her parole was revoked on a technical violation for not reporting to a parole officer.

Had she been charged with burglary today under the state’s new sentencing guidelines she would likely serve no more than 18 months, Danneman said.

“She’s done 23 years on it, hasn’t committed a new offense and is still getting revoked,” Danneman said.

On Sunday a man serving in jail in New York died from COVID-19, becoming the first jail inmate in that state to die from the virus.

Michael Tyson, 53, was serving for a technical parole violation when he died from COVID-19. He had failed to report to his parole officer, according to The City.

There were more than 500 COVID-19 cases in New York city jails as of Sunday, according to the news agency. 

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