Updated at 10:44 a.m. Monday to include a statement from the GEO Group.
The Vermont Department of Corrections is poised to abandon its controversial relationship with Corrections Corporation of America, which currently houses about 340 Vermont inmates in a Kentucky prison, in favor of an agreement with a different company, sources tell Seven Days.
The DOC is finalizing a new contract with The GEO Group, which would house Vermont's overflow inmates in a prison it owns in Baldwin, Mich., sources say.
Citing ongoing negotiations, DOC Commissioner Andy Pallito declined to discuss whether he had selected CCA or The GEO Group, the two announced finalists for the inmate contract. CCA has been Vermont's provider since 2005. Their most recent two-year contract, worth $34 million, expires in July.
"I am waiting for the contract to clear a few internal reviews and then will do an official announcement," Pallito, who has the final authority over the contract, told Seven Days.
The Michigan prison is slightly closer to most of Vermont than CCA's Lee Adjustment Center, in Beattyville, Ky., where most of the company's Vermont inmates are currently held. While the DOC has been criticized for relying on CCA, industry experts say there is little difference between the two for-profit companies, which both house prisoners in dozens of facilities across the country.
Vermont inmates housed in Kentucky and a much smaller group held in Arizona would be transported to Michigan this summer, sources say.
GEO representatives told shareholders during a recent conference call that the company was finalizing a contract with Vermont, according to Grassroots Leadership, a national watchdog that opposes the private prison industry. "We are very concerned that the people who are currently housed out-of-state in Kentucky will be transferred to Baldwin," Kymberlie Quong Charles, Grassroots Leadership's criminal justice programs director, said in an interview.
Pallito initially said he would make an announcement in late March, and later told Seven Days it was pushed back to mid-April.
In late April, GEO announced it was "mobilizing," the 1,740-bed North Lake Correctional Facility in Baldwin, Mich., which has been shuttered for several years. GEO said it was preparing to open the facility by July. "GEO does not currently have a contract to house inmates at the facility, but GEO believes that it may secure one or more contracts in the near future and expects it may need to activate the facility in the next 60 to 90 days," the company announced.
GEO, a Florida-based corporation, recently posted several job ads for prison work in Baldwin, which lies in an economically depressed area four hours northwest of Detroit. The company has also asked the Michigan legislature for permission to house maximum-security inmates inside North Lake. Current law allows them only to house lower-risk inmates at the prison.
Such a move would be necessary to house Vermont's out-of-state prison population. In addition to the inmates in Kentucky, about two dozen high-risk Vermont inmates — many of whom caused disturbances in Lee Adjustment Center — are housed at a CCA facility in Florence, Ariz.
Vermont had roughly 1,000 inmates — about half its current prison population — in 1995. The population climbed steadily until 2004 and has remained fairly steady ever since. Meanwhile, crimes committed in the state dropped by more than 30 percent in the same period, according to federal statistics.
DOC has only 1,600 prison beds in Vermont, forcing it to rely on out-of-state providers. Most inmates sentenced to more than a year in prison are sent out of state.
As of March, DOC had 1,900 inmates, including around 350 housed out of state. The DOC, however, says it is making progress in reducing the inmate population: The out-of-state population hovered around 500 for much of 2014.
The GEO Group is CCA's primary domestic rival in the private prison industry. And watchdog groups say little distinguishes the two companies.
Detractors further say sending inmates out of state makes it difficult for them to remain in contact with loved ones, whose help they will need once released. The grassroots group Vermonters for Criminal Justice reform last year launched a campaign to persuade lawmakers to end the out-of-state program by reducing the state's inmate population.
A shift from CCA to GEO would do nothing to allay those concerns.
"It's more of the same. It's basically a clone of CCA," said Alex Friedmann, managing editor of Prison Legal News. "They have all the same problems, the same profit motive, the same business model of cutting costs. The only thing that's going to change is the name and location."
GEO declined to discuss the contract with Vermont, but touted their deep experience in partnering with governments.
"The GEO Group has established long-standing public-private partnerships with correctional agencies throughout the United States for approximately three decades," GEO vice president for corporate relations Pablo Paez said. "GEO provides high-quality correctional management services in safe and secure facilities which operate under direct oversight from our government partners and pursuant to strict contractual requirements and industry-leading standards including those set by the American Correctional Association."
GEO owns or manages 106 facilities worldwide, with roughly 73,000 beds in the United States and another 12,000 beds in Australia, South Africa and the United Kingdom. It reported $424 million in revenue in the most recent fiscal quarter, and its stock currently trades around $37.02 a share.