California’s First ‘Private Prison’ Is Open for Business

Times Staff Writer

Tom Keohane leaned his tall, sturdy frame against the deck railing outside his office and studied a deer foraging lazily in the lush green hills nearby.

“See? See that?” he said excitedly. “That is part of what criminologists call the environmental milieu. A guy sees something like that; well, he starts relaxing right away.”

It is important to Keohane that his “guys” relax because his guys are all prison inmates. Keohane runs California’s first privately operated prison, a bucolic little campus called Hidden Valley Ranch.


The ranch, tucked in the thickly wooded Santa Cruz Mountains 45 miles south of San Francisco, is actually a minimum-security jail for short-term, low-risk parole violators.

First Prisoners Due

When its first prisoners arrive today, it will mark the start of a new era in California corrections--the first use of a private enterprise to essentially run all aspects of a prison, from the hiring of guards to the serving of cornflakes.

The use of contract private prison operators, supervised by the government, is a growing, if somewhat controversial, trend in recent years.

The practice has been most eagerly embraced by the federal Immigration and Naturalization Service, which uses contractors to run four of its 11 detention centers for suspected illegal immigrants. The four centers are in Los Angeles; Houston; Laredo, Tex., and Aurora, Colo.

But the use of so-called “private prisons” was looked upon skeptically by the state until recently, when some interested legislators and a crush of new parole violators prodded it to take its first halting steps in the field. The first stride is here at Hidden Valley Ranch; the second will be taken at the Artesian Oaks juvenile facility near Saugus, probably in October.

Both facilities are designed for men who were paroled from state prison but violated the conditions of parole--by going on vacation without permission, for example, or by shoplifting or committing some other minor crime.


All people sent to the Hidden Valley or Artesian Oaks “return-to-custody” centers will be there less than a year; many will spend less than six months, said Edward Veit of the state Department of Corrections.

The two centers are designed to hold only those men thought least likely to cause trouble and most likely to benefit from the educational and job-training programs offered, he said.

“There will be no violent offenders, no sex offenders, no gang members, no escape risks,” said Veit, a deputy director of parole and community services. “Those people would not even be considered for this program.”

Veit said the state sought private contractors for the two centers only for reasons of economy and flexibility and because the inmates are the easiest to manage. He said the state still is not interested in using private concerns to run medium- or maximum-security prisons, such as Soledad or Folsom.

But Veit said he expects the state will contract for several more privately run return-to-custody centers in the next few years. Indeed, another center at Eagle Mountain in San Bernardino County already is under consideration.

“As long as we have a need for additional confinement facilities--and we do--and as long as our prisons continue to be as overcrowded as they are, we will be considering adding more such facilities,” he said.

Both private prisons will be managed by newcomers to adult corrections, although each management company has experience operating secure detention and training facilities for teen-agers and other youthful offenders.

Former Youth-Diversion Camp

Hidden Valley is run by Eclectic Communications Inc. of Ojai, which ran the same facility as a youth-diversion camp for the federal Bureau of Prisons. The Saugus center will be operated by Management & Training Corp., an Ogden, Utah, company that manages federal Job Corps training centers for 16- to 22-year-olds, including some delinquents.

Both companies are confident that their experience with young people gives them the background needed to deal with adult repeat offenders.

“We’ve learned a great deal through 20 years (in the Job Corps program),” said Dean Dalby, director of the corrections services division of Management & Training Corp. “We see all kinds of transferability of skill between what we are doing now and the kind of minimum-security correctional program California currently wants.”

The firms were chosen for the state’s first two private corrections centers after passing a state examination of their financial stability and personnel, then locating suitable sites for the facilities.

Eclectic Communications will be paid $44.86 a day for each of the 80 parole violators it will manage. Management & Training Corp. will receive $35.83 for each of its 100 prisoners. In addition, both firms will be reimbursed for the monthly rent at their prison sites--$13,000 here and $12,000 in Saugus--and for most, if not all, of the cost of renovating the sites.

Both companies can renegotiate their three-year contracts if the number of prisoners falls below 70% of capacity, which is the estimated occupancy rate needed to turn a profit.

In addition, both sites will be supplied with state-paid and state-trained correctional peace officers--the same sworn officers patrolling at traditional state-run prisons. These state employees, one lieutenant and five sergeants at each site, will oversee the private guards who deal directly with inmates.

Savings Noted

Veit said the state will be saving money even after considering all of the costs, including the money spent administering and monitoring the contracts. Spokesmen for both companies agreed, although none of them could provide specific cost-saving figures.

With other agencies, such as the INS, operators of private prisons are paid more than what it would cost the government to house and feed the prisoners.

Savings are realized because the government agencies do not have to build a new prison and staff it with guards and administrators who receive relatively high salaries and generous pensions and are difficult to lay off when prison populations decline or shift to other areas.

“If you calculate them on a strict per-detainee-per-day fee, they (private detention centers) are slightly higher,” said Duke Austin, an INS spokesman in Washington. “But you don’t have the cost of building a center and staffing it through the federal (Civil Service) system, which really adds to the cost (of government-run facilities).”

Hidden Valley, which resembles a modest church camp surrounded by a 12-foot chain-link and razor-wire fence, was built more than 20 years ago by the City and County of San Francisco as a rural reform school.

There are four main buildings around a paved quadrangle used for tennis and volleyball. The north building is a dormitory. To the east is a gymnasium; to the south, classrooms and vocational training labs; to the west, a two-story administration building and cafeteria.

Keohane, a retired federal prison warden and sports fan, said he plans to expand the facility to include a baseball diamond and soccer field.

‘Keep the Guys Busy’

“My experience in federal penitentiaries showed me that you have to keep the guys busy,” he said while shooting baskets in the gym. “If you don’t keep them busy, they get bored and restless and trouble starts.”

Crafts, vocational training, a big-screen television and maintenance and repair jobs around the well-weathered facility also will be used to keep the inmates busy, he said. When they rest, he added, the scenery will help them to stay relaxed.

Managers of the Artesian Oaks camp will take a similar approach. Vocational training will not be available, but prisoners will be offered basic courses in reading, writing and arithmetic.

“We simply did not want to become involved in the correctional marketplace if we were only going to provide custodial services,” Dalby said after a tour of his company’s Job Corps vocational training center in Clearfield, Utah.

Although the Saugus center was vigorously resisted by neighboring residents worried about security questions, the two new facilities were approved virtually unnoticed in Sacramento, where vocal debates have raged over two bills allowing for the large-scale privatization of correctional facilities.

One bill, by state Sen. Joseph B. Montoya (D-Whittier), would set up a private incarceration facilities commission to encourage the privatization of prisons. The other, by Assemblyman Dominic L. Cortese (D-San Jose), would recast state law to permit counties to hire private contractors to run their jails. Both bills have been stalled in committee by public employee unions and other opponents.

Not New to Corrections Field

Private companies are not new to the corrections field, even in California. For many years, entrepreneurs have supplied individual services to prisons and jails; the services have ranged from running cafeterias to staffing hospitals. Private firms and nonprofit groups also have long histories of operating work-furlough programs and halfway houses outside prison walls.

In the last few years, however, former prison wardens and others have moved directly into the business of actually running entire prison facilities, up to and including supplying the people who hold the keys and carry the guns.

Guards at the two new California facilities will be unarmed, but they still fit into the debate over such private prisons--a debate touching on ethical and legal as well as financial questions.

While reviewing Cortese’s bill last year, staff researchers at the Assembly Committee on Public Safety posed nine broad areas of controversy in the field, such as public accountability, legal liability and the use of deadly force by someone other than a sworn peace officer.

Problems already have appeared elsewhere. In Houston, an undocumented alien suspected of trying to flee was shot and killed by guards. In Pennsylvania, a privately operated prison went bankrupt after a judge ordered it to return 55 out-of-state prisoners brought in to make a profit.

Underlying any such specific incidents--which private-prison proponents say are no worse than problems in some state-run prisons--is the fundamental issue: Should a government take its unique authority to imprison and punish and turn that power over to a private company with the primary goal of making money?

After weighing the matter, the American Bar Assn. last February advised the nation’s legislators to withhold a decision on privatizing prisons “until the complex constitutional, statutory and contractual issues are satisfactorily developed and resolved.”

Governors’ Caution

The National Governors Assn. last year endorsed privately operated prisons, but its resolution cautioned: “States should approach this option with great care and forethought. The private sector must not be viewed as an easy means for dealing with the difficult problem of prison overcrowding.”

Private operators like Dalby contend that the responsibility for prisoners is not being completely relinquished by the state.

“The security and custody responsibility isn’t being taken from the state. We do not want to take it from the state,” Dalby said. “Rather, it is being shared.

“They (state officials) will have uniformed correctional officer personnel . . . in the facility at all times, and the MTC staff will be thoroughly trained and will work directly under the guidance of the CDC (California Department of Corrections) uniformed officers that are there.”

In any case, says corrections official Veit, the state may have little choice in the matter. Even as more parole violators are being returned to custody, there are fewer jail and prison cells available to house them. The state’s decision to get tougher on parole violators by jailing parolees who break relatively minor rules coincided with a general tendency of the courts to impose longer and more frequent prison and jail sentences.

This has resulted in the often severe overcrowding of both county jails and state prisons, the two places where parole violators were sent in the past.

“County jails (in the past) had an excess of space,” said Veit, and state parole violators, who came with a healthy state subsidy, were greeted by local officials as a way of cutting costs.

“County jails are now at 175% of capacity,” Veit said, and local agencies are unable to take state prisoners at any price. “As they (county jails) grew more and more overcrowded, we had to consider other options. Privatization was one of them.”