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New Mexico Corrections Secretary Lets Private Prison Firms Skate on Understaffing, Forgoes $18.6 Million in Fines

by Matt Clarke

Former New Mexico Corrections Secretary Joe R. Williams did not pursue contractual penalties against Corrections Corporation of America (CCA) or GEO Group despite chronic understaffing by the two private prison companies, which operate four facilities in New Mexico.

GEO and CCA manage prisons for the New Mexico Corrections Department (NMCD) in Hobbs, Grants, Clayton and Santa Rosa. The original decision to allow private firms to operate state prisons was controversial, and recent revelations that the privately-run facilities are chronically understaffed have reignited the debate over privatization.

The NMCD’s contracts call for penalties when staffing vacancies reach 10% for 30 consecutive days. In 2007, the Legislative Finance Committee (LFC), the budget arm of the state legislature, reported 37% understaffing at the Lea County Correctional Facility in Hobbs, angering lawmakers. The staff vacancy rate for July 2010 was 22% at Hobbs and 17%, 14% and 13% at the other privately-operated facilities.

However, Williams declined to seek fines for such contractual noncompliance, instead making excuses for GEO and CCA.

Williams said the private prisons were located in rural areas or small towns where recruiting and retaining staff is difficult. He also claimed the companies were offsetting the vacancies by having their employees work overtime, which was also prevalent in the state prison system. However, whereas the $7.2 million overtime budget for state prison employees from July 2009 through June 2010 was made public, the private prison companies refused to release their overtime figures.

Williams also said CCA and GEO were doing an “outstanding” job. “There have been no escapes. There are no substantial problems,” he stated. “If there were a problem, I would be down there penalizing them.”

Williams further said he didn’t want the companies to rush into hiring more staff. “I would rather run a prison with ten quality correctional officers than a bunch of bad apples introducing contraband,” he remarked. “I would rather they be in a penalty phase [of the contract] than they have to meet a contractual obligation” by hiring unqualified staff.

Lawmakers, however, citing the fact that the state was foregoing millions of dollars worth of fines for understaffing at the private prisons, disagreed. State Senator Cisco McSorley wondered “how much penalty money New Mexico taxpayers had lost.”

“I think we need to see the magnitude of the payments that haven’t been made,” added State Senator Peter Wirth. “If we are talking about millions of dollars, then absolutely I am concerned about it fiscally and policy-wise. I can assure you that the private operators wouldn’t stand idly by if the state wasn’t meeting its contractual obligations.”

Williams disagreed. He criticized the idea of trying “to balance the corrections budget through penalties.” The state’s corrections budget has been cut by $10 million over the past two years.

In a memorandum released in September 2010, the LFC estimated the state had forgone $18.6 million in penalties for understaffing over a four-year period; that is, had Williams enforced penalties against CCA and GEO for failing to meet their contractual obligations, the state may not have had to cut its corrections budget. The $18.6 million estimate was based on salaries the companies did not have to pay due to chronic understaffing.

The LFC also found that the NMCD “does not regularly compile vacancy rates, contractor staff pay rates, contractor vacancy savings or review potential penalty amount in its central office, but should do so immediately.” State prison officials “should have been performing this compilation to assist in decision making about whether the Secretary should enforce contractually required staffing patterns and associated penalties, or rationale for why not to enforce agreed upon contractual provisions.”

Had fines been imposed on CCA and GEO, that would have served as an incentive for the companies to properly staff their facilities per their contractual obligations. Understaffed prisons are dangerous for both prisoners and employees; excessive overtime can’t cure the problem, as it leaves prison staff stressed, tired and inefficient. Further, what is the point of having contractual penalties for noncompliance if they are not enforced?

Williams was replaced as Secretary of Corrections by Lupe Martinez in December 2010 following an administration change. Given his lax oversight of the state’s contracts with CCA and GEO, one must wonder if he now plans to again work in the private prison industry. Prior to serving as New Mexico’s Secretary of Corrections, Williams was employed as a warden by GEO Group.

Sources: New Mexico Independent,, New Mexico Legislative Finance Committee Memorandum (Sept. 7, 2010)

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