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Nothing's 'Nonprofit' About Groups Running N.J.'s Broken Halfway Houses

After years of high rates of escapes, poor supervision and rumors of sweetheart deals between politicians and private companies, the curtain is finally being pulled back on New Jersey's halfway houses.

A New York Times investigation last year concluded that nepotism and poor regulation have allowed Education and Health Centers of America (ECHA) and the Kintock Group–the two purportedly nonprofit groups that run most of New Jersey's halfway houses–to rake in millions of dollars and further their own money-making schemes and political agendas at the expense of taxpayers, victims of violent crimes, and offenders trying to successfully transition back into society.

In December 2012, the Times reported that Kintock had paid its founder, David D. Fawkner–a former probation and parole officer who started the company in 1985–about $7 million in salary and benefits over the past decade, while his daughter, brother-in-law and son-in-law were paid more than $2.5 million altogether during the same period.

Kintock, which is based in Pennsylvania but has most of its operations–including five halfway houses–in New Jersey, had $39 million in revenues in 2010, according to the company's most recent disclosure forms to the Internal Revenue Service.

In recent years, Fawkner's annual salary has been as high as $805,000. His brother-in--law, Raymond P. Guzicki, was paid $130,000 in 2010 to work as a "consultant," based in northern California, doing surveys, property assessments and training for Kintock. Gretchen Wiseman, Fawkner's daughter, was paid $180,000 in 2010 as Kintock's chief administrator. Her husband, Robert Wiseman, ran a Kintock subsidiary, Media Concepts, duplicating DVDs and other media, and earned $93,500 annually, for several years.

ECHA, according to government records, is simply a shell organization operating out of a low-rise office complex in Wall Township, N.J., and used to funnel millions to Community Education Centers (CEO), a "politically connected company that dominates the halfway-house system," the Times reported.

New Jersey Democrats say that Gov. Chris Christie, a potential Republican presidential candidate in 2016, is protecting his former law partner and close political adviser, William J. Palatucci, who is a senior vice president at CEC. Christie also has close ties to CEC's chief executive, John J. Clancy.

Because of those relationships, Christie has allegedly turned a blind eye to ECHA's practice of obtaining halfway-house contracts with New Jersey's Department of Corrections (NJDOC) and then paying CEC to actually run the halfway houses.

In a 2011 audit, New Jersey comptroller Matthew Boxer said he believed the relationship between ECHA and CEC was problematic because it prevented the state from evaluating the vendor actually providing the services.

"The IRS should revoke (ECHA's nonprofit) status," said Professor Frances R. Hill, a tax specialist at the University of Miami's School of Law. "It appears to run afoul of IRS rules, because it essentially does no work and funnels the contract to the for-profit entity."

While state lawmakers have attempted to enact more stringent measures to regulate Kintock, ECHA and other companies like them, Christie has reportedly stalled legislation and only increased profits for CEC and Kintock.

Last August, Christie slapped CEC and smaller companies on the wrist with $45,000 in fines for allowing nine transitioning offenders to escape from six halfway houses in prior months. But Christie has mostly blocked attempts at increased oversight, first by issuing a line-item veto in June 2012 to reduce new disclosure agreements between the state and the halfway houses, and in August–a week before announcing the fines–he weakened measure that would have required special audits of halfway house contracts.

And in December, Christie increased capacity at halfway houses–also referred to as "residential treatment" facilities in New Jersey–to allow them to house between 2,200 and 2,500 transitioning offenders. The increase was approved under the guise of saving taxpayers about $20,000 per year for each offender moved out of state prisons and into halfway houses, and in spite of hundreds of escapes–or "walkaways"–from New Jersey halfway houses every year.

In 2011, 5,164 transitioning offenders were sent to the 25 state-contracted halfway houses in New Jersey, which cost the state's corrections department about $65 million each year. According to NJDOC, 304 of those offenders walked away before finishing their sentences.

The Bergen Record reported that one of the most notorious walkaways happened in April 2005, when Carnell Davis, then 28, fled from a Hoboken halfway house near the end of a 10-year sentence for armed robbery. Five months later, he shot and killed two men before his re-arrest.

Another walkaway was David Goodell, who did a year and a half in prison for assaulting a cop and threatening a woman he was dating. He then was transferred to the Logan Hill halfway house in Newark, suffered a seizure and was admitted into a local hospital, from where he eventually fled.

Hours later, he met up with his ex-girlfriend, 21-year-old Viviana Tulli, and strangled her to death. In November 2012, he was indicted by a Hackensack grand jury on first-degree murder charges.

"Nobody would deny there's a public safety challenge around halfway houses," said Jason Zeidenberg, executive director of the Justice Policy Institute in Washington, D.C. "Some (walkaways) may re-offend, but unfortunately that's part of the game of rehabilitation."

Incidentally, Kintock Group is responsible for more walkaways than any other halfway house operator, according to the Times. Kintock officials told the Times that most walkaways can be attributed to offenders who failed to return to the halfway house from work-release programs.

Sources: The New York Times,,

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