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Problematic California Private Prison Sold to San Bernardino County

by John E. Dannenberg

In the continuing saga of a troubled private prison in Adelanto, California, the facility was sold to the County of San Bernardino for $31.2 million in February 2006. However, controversies haunted the county for another year. The facility's owner, Maranatha Corrections (in turn owned by Moreland Family, LLC), was slow to make needed and agreed-upon repairs, causing late occupancy by the county. In addition, uncertainty remained as to whether the sale was tainted by conflicts of interest between the private prison company and local officials.

The Adelanto facility was originally built on spec by Maranatha and leased to the California Department of Corrections and Rehabilitation (CDCR). The lease was terminated when CDCR tried in vain to reduce its population, and the building fell into disrepair. The terms of the prison's sale to the county included fixing the fire and smoke alarms, refurbishing heating/air-conditioning/ventilation equipment, replacing broken glass, and adding security panels and dorm dividing walls. When Maranatha fell behind in this work, the county withheld $500,000 in payment as a "hammer" to force compliance. The work was completed two months behind schedule, resulting in a $260,000 penalty assessed by the county for late occupancy of the 706 prisoners who were quickly moved in. [See: PLN, Jan. 2006, p.20].

In August 2006, the County's Board of Supervisors released a previously confidential report implicating local officials in conflicts of interest regarding the prison sale and related land sales. It was revealed that former state Assemblyman Brett Granlund, now a lobbyist for the county in the state Capitol, had violated his lobbying contract by not informing the county in writing that he also represented the jail's owner, Maranatha Corrections. It was alleged in the $160,000 county-funded report that Granlund had influenced the county's decision to buy the prison despite an extensive mold problem and the lack of an "as is" appraisal. Granlund retorted that the taxpayers got a "steal" on the facility.

Another conflict involving Granlund concerned the sale of surplus county land to Jim Foster, county supervisor Dennis Hensberger's chief of staff. The land was bought advantageously by Granlund in 2001 for $20,000 and sold to Foster in 2002. Foster then "flipped" the property in 2003 for $100,000. Granlund tried to insulate his complicity by claiming that his original purchase involved Foster as a "silent partner," a claim denied by Foster. Foster resigned one month after a report of his involvement in the land sale was made public.

In September 2006, county supervisors dismissed the allegations in the reports as "overblown." It remains to be seen, however, if the jail and land purchase controversies will indeed "blow over." In February 2007 it was reported that a former Maranatha official had told District Attorney investigators that Granlund received a "substantial commission" on the sale of the prison, an allegation that previously had been denied by both Granlund and the facility's then-owner. The D.A.'s office, however, noted that it had closed its investigation. "If the bottom line is that he received a commission and lied to us about it, while disappointing, that would not be a criminal offense," stated Assistant D.A. Jim Hackleman.

Sources: San Bernardino Press-Enterprise, San Bernardino County Sun, Inland Valley Daily Bulletin

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