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Lawsuits filed against Treasury Department over Alabama prison construction plan

One challenges the “gross and illegal misuse of Federal funds” in allocating American Rescue Plan funds for prison construction.


Two lawsuits were filed against the U.S. Treasury Department on behalf of dozens of incarcerated men in Alabama prisons on Monday, challenging the plan to construct two new correctional facilities in Elmore and Escambia counties.

Both were filed on Monday in the Middle District of Alabama Northern Division, with the first dealing specifically with the failure to provide an analysis of the environmental impact of the new prisons and the second challenging the “gross and illegal misuse of Federal funds” in allocating American Rescue Plan funds for prison construction.

The lawsuits suggest that the appropriation of $400 million in American Rescue Plan funds by the Legislature last year to construct the new facilities “defies the purpose of ARP” and alleges that the construction of the facilities violates the National Environmental Policy Act of 1969, a federal act which mandates that federal agencies must prepare environmental impact analysis for proposed major federal projects, among other provisions.

With approximately 31 percent of the total cost of the prison construction package coming from federal funds, according to the first lawsuit filed Monday, the prison construction constitutes a major federal action due to the federal funds being “essential to its completion” and thus requires an environmental impact analysis on the proposed site, the plaintiffs argue.

“Alabama does not have sufficient state funds to cover the cost of these facilities on its own,” the plaintiffs wrote in the first lawsuit filed Monday. “Indeed, the State of Alabama is more than $200 million short of its projected budgetary needs to finance this prison project because its bond fundraising fell dramatically and unprecedentedly short of the target. Therefore, the impact of this federal assistance is more than minimal and constitutes a major Federal action requiring NEPA review.”

The bond sale, which was completed in late June, generated approximately $509 million for funding the prison construction package, $200 million short of the $725 million in state bonds offered initially.

A $623 million contract with Montgomery-based Caddell Construction to build one of the two new facilities, a 4,000-bed men’s prison in Elmore County, was signed April 15 by state officials. The contract stipulates that the new facility will provide enhanced medical and mental health care services to incarcerated men, the Governor’s Office confirmed in late April.

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In January of this year, the U.S. Treasury Department issued a final ruling on how states may use federal COVID-19 aid, with the department finding that new prison construction would not be a proper use of the federal funds but said it would not “generally take action to enforce” a violation of this rule.

“The Treasury itself has interpreted the ARP to mean that prison construction, even when undertaken for the purpose of reducing COVID-19 spread, is a “generally ineligible” use of funds,” said Richard A. Rice, an attorney with The Rice Firm in Birmingham, one of the two law firms representing the incarcerated men, in a statement released Monday. “The plaintiffs argue that this allocation to the Alabama Department of Corrections could be used to provide healthcare services that would reduce the impact of the pandemic, which has been extreme in prisons throughout the country, as well as to address current unconstitutional prison conditions over which the Department of Justice has sued the state.”

Alabama prisons are critically overpopulated and understaffed at such a level that systemic violence, skyrocketing amounts of drug overdoses, psychological and physical health deterioration, and inhumane conditions have become ordinary for most incarcerated individuals in the state.

John is a reporter at the Alabama Political Reporter. You can contact him at [email protected] or via Twitter.

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