NERMEEN SHAIKH: We turn now to a major new investigation into how a private prison company that runs juvenile detention centers is rapidly expanding despite a record of abuse and neglect over the past 25 years. Part two of the series will be published today by The Huffington Post, and the company in question is Youth Services International.

This is how reporter Chris Kirkham begins the series: quote, “From a glance at his background, one might assume that James F. Slattery would have a difficult time convincing any state in America to entrust him with the supervision of its lawbreaking youth.

“Over the past quarter century, Slattery’s for-profit prison enterprises have run afoul of the Justice Department and authorities in New York, Florida, Maryland, Nevada and Texas for alleged offenses ranging from condoning abuse of inmates to plying politicians with undisclosed gifts while seeking to secure state contracts.”

Kirkham goes on to write, quote, “In 2001, an 18-year-old committed to a Texas boot camp operated by one of Slattery’s previous companies, Correctional Services Corp., came down with pneumonia and pleaded to see a doctor as he struggled to breathe. Guards accused the teen of faking it and forced him to do pushups in his own vomit, according to Texas law enforcement reports. After nine days of medical neglect, he died.

“That same year, auditors in Maryland found that staff at one of Slattery’s juvenile facilities coaxed inmates to fight on Saturday mornings as a way to settle disputes from earlier in the week. In recent years, the company has failed to report riots, assaults and claims of sexual abuse at its juvenile prisons in Florida, according to a review of state records and accounts from former employees and inmates.”

AMY GOODMAN: Those are the opening lines of a new investigation by reporter Chris Kirkham. Despite that history, The Huffington Post reports, Slattery’s company, Youth Services International, has expanded its contracts to operate juvenile prisons in several states. More than 40,000 boys and girls in 16 states have gone through his facilities in the past two decades. This comes as nearly 40 percent of all detained juveniles are now committed to private facilities, and in Florida, it’s 100 percent.

For more, we’re joined by Chris Kirkham, business reporter at The Huffington Post, where he’s just published his new two-part investigative series, “Prisoners of Profit: Private Prison Empire Rises Despite Startling Record of Juvenile Abuse.”

Welcome to Democracy Now! Talk about what you found.

CHRIS KIRKHAM: So, I mean, I think the point you made about Florida sort of having this 100 percent privatized system, this was kind of the first thing that got me interested, was sort of the idea of this state essentially handing over this pretty crucial function, I think, of sort of the goal of rehabilitating youth, I think, preventing them from becoming criminals, to private companies—in a lot of cases, for-profit companies. And so, I was kind of curious who the major players were out there and started looking around.

Then I realized that this company, Youth Services International, has sort of existed in various—under various different names for the last 25 years, but basically the pattern of behavior has been pretty consistent, that it’s sort of a lot of contract violations, a lot of allegations of abuse. And typically, whenever there have been problems through the years, the company will sort of—in some cases, it’s pulled out of contracts as the state was sort of starting to amass evidence that there were some really serious problems, or, you know, the contracts will end, and the state will say, “Oh, we’re not going to renew this anymore.”

So, it’s been interesting that there really hasn’t been a lot of—there haven’t been a lot of cases where the state has actually terminated their contract, and then that kind of goes on your record, you know, and when you’re applying for new contracts, then that comes up in sort of your history. So it’s been interesting to see sort of how a company like this, despite the problems that, you know, I brought up and that you just noted now, a lot of these things don’t often come up in the contract review process or when they’re applying to get new contracts. And so, this was kind of really what interested me about the story.

AMY GOODMAN: Can you talk about James Slattery’s role in running Youth Services International? How did he start?

CHRIS KIRKHAM: So, yeah, he has a pretty interesting history. He initially was actually in the hotel business in New York City, and he was a—you know, ran—worked in the Sheraton Hotel corporation, ran some hotels around New York City. And at the time, he got involved with a few other business partners, and they were sort of—they had owned and managed a few hotels around the city. And at this time, this was kind of in the ’80s in New York City. Crime was extremely high. Property values were going down. And a lot of property owners realized that they could get a lot more money from sort of housing essentially homeless people, welfare. They could get a lot of—a lot more welfare money from the government than they could actual market rates.

AMY GOODMAN: At these places called “welfare hotels.”

CHRIS KIRKHAM: Welfare hotels, exactly. And so, what ended up happening was this really kind of destroyed a lot of neighborhoods, because a lot of sort of investors came in, they sort of flooded—they flooded these buildings with people who probably should have been in treatments, but instead they were just kind of warehoused in these facilities. So, this was kind of the first way in in terms of kind of building a business off of government money. And from—the city started shutting these down, because they realized that, you know, there were tons of code violations. In one of these hotels, some children died in a fire after they were just sort of left alone. So, pretty bad conditions in these hotels.

So, next, they sort of had these properties, and at this time it was kind of—Reagan was pushing a lot in terms of privatization of a lot of government services, and so federal prisons became kind of the next concept for privatization. And so, a lot of these hotels, there was a possibility of using them for halfway houses, so basically federal prisoners getting out, that this would be sort of transitional housing for them. And so, that was—that was kind of how he first got into the federal contracting game.

And from there, you know, what’s been interesting is that, I sort of discovered, once you get into this business, it’s really hard to get out. There’s not a lot of—there’s not a lot of barriers to entry, seemingly, but a lot of companies don’t want to get into this business, so it’s kind of the same few actors that sort of handle a lot of these private prison contracts. And so, in this case, they were able to get the federal halfway house contracts. There were a lot of problems with those early on, some really, really poor conditions that were found in these buildings. I think one of the inspection reports I saw claimed that there was only enough food for, you know, maybe half of the inmates, so whoever got there first got fed, and then the rest were sort of left—left to their own devices.

So, despite this, you know, the INS, the Immigration and Naturalization Service, at that time, they were starting to look to privatize some of their facilities for detainees. So, really he just started getting contract after contract. And kind of the rest is history. Since then, he sort of moved into the juvenile business. He started doing a lot of adult prisons around the country. And then, in 2005, he sold off a lot of his assets to another big private prison company called the GEO Group, which is still in existence today. But he—

AMY GOODMAN: Formerly Wackenhut.

CHRIS KIRKHAM: Exactly, formerly Wackenhut. And then he bought back the youth division for his own company. So now he’s been sort of mostly in the juvenile private corrections business.

NERMEEN SHAIKH: One of the arguments in favor of privatization, which you also mention in your report, is that private prisons or detention facilities are able to provide better services at lower cost. What is it that you found? And how do these conditions, for example, what you just said, that there was food often only for half the inmates—so how do these private facilities compare with public facilities of a comparable kind?

CHRIS KIRKHAM: Well, I think that’s really the difficult question. I mean, I think the claim, of course, by the industry is that they can offer these services at a much, much lower cost. But really, there have been no studies that have not been financed by the industry that have proven that. So, it’s a difficult claim, because it—you’re sort of having to say, you know, what is the exact same service that’s being provided by the public—you know, the public corrections department or the public juvenile justice department and this private operator? Are they the exact same kind of inmates? Do they have the exact same sort of needs in terms of services for health or for therapy? And so, it’s difficult to make those comparisons. And then, in these cases, I think—I think when there’s—when oversight is not as strong as it can be, I think, you know, companies—companies are only going to be incentivized to do what the government that’s paying them makes them do. And so, you know, in these cases, if the oversight is lacking, if there’s not constant monitoring, I think there is an incentive to sort of cut costs and services.

AMY GOODMAN: So tell us what you found in Florida: 100 percent of the juvenile facilities are for-profit.

CHRIS KIRKHAM: Yeah, 100 percent are privatized. There’s a mix of nonprofit and for-profit providers in Florida.

AMY GOODMAN: And so, what did you find in these facilities? What was happening to the kids?

CHRIS KIRKHAM: Right. So, basically, I mean, there was sort of consistent accounts of physical abuse from guards. So this was basically—I mean, you had a lot of guards who were getting paid very little.

NERMEEN SHAIKH: What’s the age range of the children in these facilities?

CHRIS KIRKHAM: It’s about—it’s like 13 to 18 or so. So we’re talking about teenagers, essentially, boys and girls in these facilities—not mixed. I mean, there’s different facilities for each. So, you know, the guards often resorted to violence as sort of the first means of just dealing with a situation. And these are—these are obviously troubled kids. There’s no—that’s the reason they’re in these facilities in the first place. But a lot of times you sort of discover that the guards were often the same—knew the kids from the neighborhood, perhaps had gotten in trouble with the kids before. They already had relationships with the kids. The guards—this is not the highest caliber of staff. So, a lot of times you had sort of gang affiliations, rivalries between guards and youth within the facilities, which caused a lot of problems. You know, in one case in a facility in Broward County, Florida, which is just north of Miami, there was a boy who claimed that he had been forced to perform oral sex on one of the guards. He told the authorities this three times, and only the third time, 10 months later, did they finally report it to the police. So, the other thing was that a lot of—a lot of incidents that were documented, there was evidence and a lot of former employees told me that there was—that was only a fraction of what was actually happening.

AMY GOODMAN: In the piece that came out today in The Huffington Post, you go back to an example in 2004, when Youth Services International was confronted with a potentially expensive situation. They were three months into a $10 million contract to run Thompson Academy, a juvenile prison in the state of Florida, and already the facility had become a scene of documented violence and neglect. What happened next?

CHRIS KIRKHAM: So, in this case—this is the story that will publish today—there was a contract monitor from the state. So, generally the way these private businesses work is that you—you know, you run the facility, but someone’s coming in to inspect you every once in a while. So this was the inspector coming in and basically documenting a lot of problems: a complete breakdown in organization; a lot of staff were getting fired for essentially breaking youths’ arms, for slamming them to the floor; there were escapes. So, in this case, the monitor was really coming down hard on the company and, you know, was saying, “We need to do a lot more reviews. We need to”—basically threatening them to reduce the number of kids that could come to the facility, potentially reducing the amount of money in their contract.

And at one point the monitor actually sent an email—this guy’s name was Jerry Blanton—he sent an email to his bosses saying, “I recommend that this facility be closed.” And at that same time, the company went back to the state and basically went around the monitor and said, “This guy is out of control. He’s out of line. He’s coming in here doing unannounced inspections. You know, we have some serious—we have some serious issues with this guy.” And then, two months later, the state fired that monitor.

And despite this guy getting fired and sort of blowing the whistle, the state came back a few months later and in its annual audit of the facility essentially confirmed—confirmed all of the findings that this monitor had. But from then—from then on, you know, I mean, there were a number of—the facility had a number of problems in future audits, but they managed to continue to retain this contract until just last year, when the state—state didn’t actually cancel it, they just said, “We’re reducing the size of our facilities, and so we’re not going to renew this one.” But then they handed them three new contracts this year.

NERMEEN SHAIKH: Well, I want to turn to a statement from Youth Services International. This is Senior Vice President Jesse Williams, who said, quote, “We are the best operators in the state of Florida, and that is why we continue to have contracts awarded to us. … While there have been occasional issues, we are inspected regularly and overwhelmingly receive positive reports.” He also said the company has introduced, quote, “independent, third-party reviews” of some of its programs. Chris, your response to that?

CHRIS KIRKHAM: Sure. I mean, in this case, he is saying—he is saying the truth in that they are inspected. I think the question in all of these cases is: What is the point of the inspection, and what kind of questions are being asked in the inspection? And what I noticed as I sort of dug into the state’s kind of review process for these private juvenile prisons was that, really, there’s a lot more focus on kind of technical contract compliance as opposed to really getting inside the facility and talking to the staff and talking to the kids and just kind of understanding: “How are you doing? You know, are you being treated well? Are you eating?” This wasn’t really the focus. A lot more of it was kind of: “Is the right paperwork in the right drawers? You know, do the nurses have the proper credentials? Is the medication properly secured?” It was a lot more of this kind of technical stuff than actually kind of really trying to understand what’s going on.

AMY GOODMAN: About a decade ago, a Florida judge criticized Correctional Services Corporation, the former company of James Slattery, during a hearing about widespread complaints of violence at one of its facilities near Miami. Juvenile Judge Ron Alvarez was so horrified at the Pahokee Youth Development Center that he compared it to, quote, “a Third World country that is controlled by … some type of evil power,” unquote. In a more recent interview, the same judge expressed amazement that Slattery still runs facilities. He said, quote, “I don’t know how the hell they still have business with the state.” Can you, finally, in this last response, talk about what is happening? Is there any kind of investigation besides yours? Is this company continuing to get contracts?

CHRIS KIRKHAM: It is, yeah. I mean, this year it just won three new contracts. So, you know, I think what that judge—I think what he’s expressing there is, I think, the feeling of a lot of advocates and sort of people who have been following juvenile justice in Florida for a long time, which is that, you know, I think there’s kind of this inertia that when the—the state, you know, really about 20 years ago kind of decided that it was getting out of the business of handling these juvenile inmates, this tough population. But I think what still needs to happen and what really hasn’t happened yet and what this history shows is that, really, you know, there is a need—there is a need to really hold your private providers of this service accountable. And I think when you outsource something like this and essentially throw away the key, I think that’s what frustrates a lot of people.

AMY GOODMAN: Well, Chris Kirkham, I want to thank you for being with us, business reporter at The Huffington Post, where he has just published this new two-part investigative series, “Prisoners of Profit: Private Prison Empire Rises Despite Startling Record of Juvenile Abuse.” We will link to both stories at democracynow.org.

When we come back, “kids for cash.” We’re going to look back in Pennsylvania at the remarkable scandal that has unfolded over the last few years of judges being bribed to put thousands of kids in local for-profit prisons—and what happened now, a settlement. Stay with us.