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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.” 

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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.

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. 

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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.

 

Eddie Burkhalter is a reporter at the Alabama Political Reporter. You can email him at [email protected] or reach him via Twitter.

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Crime

Alabama Department of Corrections investigating inmate death

Robert Earl Adams, 40, died on Aug. 5 and although no foul play is suspected, a department spokeswoman in a message to APR said the exact cause of death is pending an autopsy.

Eddie Burkhalter

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(STOCK PHOTO)

The Alabama Department of Corrections is investigating the death of an inmate at the Donaldson Correctional Facility.

Robert Earl Adams, 40, died on Aug. 5 and although no foul play is suspected, a department spokeswoman in a message to APR said the exact cause of death is pending an autopsy.

“While Adams’ exact cause of death is pending the results of a full autopsy, at the time of his passing inmate Adams was not exhibiting symptoms of COVID-19, was not under quarantine following direct exposure to an inmate or staff member who previously had tested positive, and was not in medical isolation as a result of a positive COVID-19 test,” said ADOC spokeswoman Samantha Rose in the message.

Because Adams was not exhibiting symptoms of COVID-19, he had not been tested, Rose said.

An ADOC worker who contacted APR Friday morning about the death, who asked not to be identified for fear of repercussions from ADOC administrators, said it’s suspected that Adams may have overdosed after being given a cigarette laced with a drug.

Adams is at least the sixteenth state inmate to die this year from either homicide, suspected drug overdose or suicide. Additionally, fifteen inmates and two prison workers have died after testing positive for COVID-19.

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Alabama House speaker addresses arrest of Rep. Will Dismukes on theft charge

Eddie Burkhalter

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Rep. Will Dismukes, R-Prattville, turned himself in at the Montgomery County Detention Center Thursday.

Speaker of the Alabama House Mac McCutcheon, R-Monrovia, on Friday said a state representative arrested and charged with theft on Thursday is alleged to have committed the theft before he was elected and is due a presumption of innocence. 

Rep. Will Dismukes, R-Prattville, turned himself in at the Montgomery County Detention Center Thursday after a warrant for his arrest was issued for felony theft from a flooring business where he worked. The theft occurred at his place of employment between the years 2016 to 2018, Montgomery County District Attorney Daryl Bailey said Thursday.

“Like all Americans, Rep. Dismukes is due the presumption of innocence, and it is important to note that the crime of which he is accused was said to have occurred well before he announced his candidacy for the Alabama House,” McCutcheon said in a statement Friday. “As a former law enforcement officer, I have faith in the criminal justice process and trust that he will receive a full and fair hearing.” 

“Both Democrats and Republicans have been accused of similar crimes in the past, and we cannot tolerate such behavior whether the lawmaker involved has a D or an R beside their name,” McCutcheon continued. 

Dismukes in recent weeks has faced a torrent of calls for his resignation in recent weeks after posting to Facebook an image of himself attending a birthday celebration for the first grand wizard of the Ku Klux Klan, Nathan Bedford Forrest.

Dismukes has said he has no plans to resign, but if convicted of felony theft, Dismukes would be removed from office.

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Arrest warrant issued for Rep. Will Dismukes for felony theft

Dismukes is charged with first-degree theft of property in connection with a theft that occurred at his place of employment between the years 2016 to 2018.

Eddie Burkhalter

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Alabama State Rep. Will Dismukes, R-Prattville, has been accused of theft of property, a Class B felony. (WSFA)

An arrest warrant has been issued for Alabama State Rep. Will Dismukes, R-Prattville, for felony theft from a business where he worked, Montgomery County District Attorney Daryl Bailey said Thursday.

Dismukes is charged with first-degree theft of property in connection with a theft that occurred at his place of employment between the years 2016 to 2018, Bailey said during a press conference.

Bailey said the charge is a Class B felony and levied when a person steals in excess of $2,500 and that “I will tell you that the alleged amount is a lot more than that.” 

“The warrant has just been signed, his attorney has been notified and we are giving him until late this afternoon to turn himself in,” Bailey said.

Bailey said the employer contacted the district attorney’s office with a complaint about the theft on May 20, and after reviewing bank records and interviewing witnesses, the decision was made to charge Dismukes with the theft. 

WSFA reported Thursday that the theft occurred at Dismukes’ former employer, Weiss Commercial Flooring Inc. in East Montgomery. Bailey did not provide any more specifics on the charge but said the employer signed the arrest warrant after countless hours of investigation on the part of the DA’s office.

While the charge stems from a complaint filed months ago, Dismukes been in the headlines recently and faced a torrent of calls for his resignation in recent weeks after posting to Facebook an image of himself attending a birthday celebration for the first grand wizard of the Ku Klux Klan, Nathan Bedford Forrest.

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The event was hosted by an individual with close ties to the League of the South, a hate group, according to the Southern Poverty Law Center.

In response, Dismukes stepped down from his post as a pastor at an Autauga County Baptist church but defiantly refused to step down from the Legislature.

If convicted of the felony, Dismukes would be immediately removed from his seat in the Alabama House, to which he was elected in 2018.

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In June, the Alabama Democratic Party called for his resignation over previous social media posts glorifying the Confederacy.

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Crime

Alabama Department of Corrections investigating death of 28-year-old inmate

Eddie Burkhalter

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(STOCK PHOTO)

The Alabama Department of Corrections is investigating the death of a 28-year-old inmate at the St. Clair Correctional Facility as a possible suicide. 

Charles Labarron Braggs was found unresponsive by prison officials in his cell on Monday, and life-saving attempts were unsuccessful, the department said in a message to APR on Thursday.

Braggs was not on suicide watch at the time of his death, and the department said in the statement that there’s “no evidence of a use-of-force incident” and that the investigation into his death is ongoing. 

“Use-of-force” refers to instances when correctional officers use physical force with an inmate. 

Braggs’ death is at least the sixth suspected suicide among those serving in Alabama prisons so far this year, according to the ACLU of Alabama’s Campaign for Smart Justice.

The U.S. Justice Department in April 2019, released a report detailing what federal investigators found were systemic problems of violence, sexual assaults, drugs, high levels of homicides and suicides and corruption in Alabama prisons.

ADOC continues to defend the department in a lawsuit filed by the Southern Poverty Law Center over mental health care and treatment of inmates in state prisons, arguing in the complaint that the department was indifferent to the health of those inmates, who were dying by suicide in greater and greater numbers.

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The U.S. Department of Justice last week released a scathing report detailing systemic excessive use-of-force by Alabama correctional officers against inmates in the state’s prisons for men. The federal government believes the acts of violence against inmates violates the Eighth Amendment protection from cruel and unusual punishment.

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