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Alabama’s prison plan has more trouble

The project was $200 million short on the bond market, and mounting public pressure could result in another underwriter backing out.

Dramatic clouds behind barbed wire fence on a prison wall STOCK

Alabama’s plan to build new prisons hit several snags this week: a lawsuit, protests and weaker-than-expected interest from buyers on the bond market. 

In reality, the first two likely had some hand in the third. But it’s the third that’s most troubling to the deal. 

According to Bloomberg, as of Tuesday, the project was $200 million short on bond orders. The lack of interest in the bonds appears to be two-fold: investors have shied away from the bond market due to rising rates and activists have made purchasing bonds tied to prison projects extremely unpleasant. 

Regardless, Alabama officials moved ahead with the bond sale on Thursday. The Alabama Corrections Institution Financial Authority approved a $725 million bond sale, which will be added to $135 million in state funds and $400 million in COVID relief dollars, to finance the construction of two, 4,000-bed mens prisons. 

The deal remains extremely unpopular, however, as the problems lining up buyers shows.

Public pressure – a good portion of it from people who simply don’t want the state using COVID relief funds to build more prisons (Alabama has authorized up to $400 million in COVID money to pay for its two new prisons) – has been a nearly constant snag for the plan. The state, in turn, has done very little to assure citizens that the money is being spent in a necessary and wise manner. 

That is the basis of a lawsuit from an Alabama prison inmate, Troy Connell, who said Alabama officials, by moving forward with the bond issue instead of addressing current problems within the prisons, are neglecting their duties that were ordered by a federal court. 

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Alabama has been the defendant in a federal lawsuit, filed by the Trump Department of Justice, alleging the state’s prisons are woefully understaffed and dangerous. District Court Judge Myron Thompson, in the Middle District of Alabama, has largely agreed with the DOJ’s assessment and set out a number of benchmarks for the state to hit for improving the conditions within its prisons.

Judging by daily news stories and the periodic reports to the court, Alabama has failed to live up to its promises. The prisons are still understaffed, extremely violent and overcrowded. It had the nation’s second-highest prison death rate in 2019 and medical care – both mental and physical care – has been basically nonexistent. A DOJ filing in the case earlier this year contained a list of horror stories that have taken place inside the walls of Alabama’s prisons — and many of those horrors, despite the threat of federal takeover and public scrutiny, continue today. 

Connell’s lawsuit maintains that the state has a requirement to correct those issues, and until it does so, it should not spend money on the new prison project. 

Connell claims in his lawsuit that the overcrowding and lack of guards has left him living in isolation and afraid for his life. His lawsuit, which is seeking to intervene in the DOJ’s lawsuit against the state,  seeks to have a judge order the DOJ to first correct the issues in Alabama’s current prisons before spending money on bonds . 

The Alabama Legislature, in its most recent session last fall, approved a massive $1.3 billion spending plan to build the prisons, including spending $400 million worth of COVID money to get the project off the ground. 

But investors and underwriters on the deal have been wary. In April 2021, Barclays decided to pull out of an underwriting deal for the project after mounting public pressure. Other potential underwriters also declined to get involved with the project.

Josh Moon is an investigative reporter and featured columnist at the Alabama Political Reporter with years of political reporting experience in Alabama. You can email him at [email protected] or follow him on Twitter.

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