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CoreCivic Bilked Rural Oklahoma Town, Forced to Pay Back Money in Lawsuit

by Steve Horn

Located in heartland America in an area historically dominated by the oil and gas industry, the small town of Sayre, Oklahoma recently found itself in the middle of a lawsuit against private prison operator CoreCivic, formerly known as Corrections Corporation of America. And the township prevailed, obtaining a $975,000 settlement from the company in September 2018. 

With 4,500 residents, since 1998 Sayre has relied on its private prison for revenue. After opening over two decades ago, the 2,440-bed North Fork Correctional Facility has seen multiple revenue-related disputes involving CoreCivic, the latest centering around a user fee agreement.

The dispute resulted in a lawsuit filed in state court in January 2018. Sayre claimed that CoreCivic owed the town $904,000 in unpaid “user fees,” which were in lieu of prison phone commission payments. 

The creation of the user fees originated in an earlier legal dispute between CoreCivic and Sayre, according to the complaint. Previously, all of the revenue generated from phone calls at the facility went straight to the town’s coffers. The prior arrangement resulted in the temporary closure of North Fork in 2003 when the phone revenue arrangement conflicted with CoreCivic’s contract to house Wisconsin prisoners at the facility. [See: PLN, Mar. 2004, p.14].

Under the new user fee arrangement agreed to by the company and Sayre, a set amount of money is paid to the town each month depending on how many prisoners are held at North Fork. But beginning in November 2016, CoreCivic stopped paying its bills, the town alleged, and it failed to pay for many successive months thereafter.

The September 2018 settlement entails CoreCivic making $34,000 monthly payments to Sayre for 39 months, through June 2021.

“Recession-Proof”

The lawsuit was a sharp contrast from where things started when CoreCivic first began operating the North Fork prison.

“This means everything to the people of Sayre,” city manager Jack McKennon said in December 1996. “We’re hurting, and we’re desperately looking for industry in western Oklahoma. It’s tough right now. Every town is trying to attract industries. And our budget is limited.”

In 2001, McKennon called prisons “recession-proof” in an article in the New York Times, and said the North Fork facility would uplift the community. 

Ironically, just seven years after the CoreCivic-run prison opened for business, McKennon faced a criminal misdemeanor charge for malicious intimidation or harassment.

“Beckham County District Attorney Dennis Smith filed the charge after Mc­Kennon was investigated for allegedly using his pickup truck to chase a boy from the Sayre city swimming pool in June,” Tulsa, Oklahoma TV station KOTV reported at the time. “McKennon is also accused of shouting racial slurs at the boy.”

Prior to Sayre’s lawsuit against CoreCivic over the unpaid user fees, North Fork was better known as the site of a major riot in 2011, in which 46 prisoners were injured. [See: PLN, Oct. 2012, p.32]. In June 2017, Fadjo Odell Johnson, 49, died at the facility in what prison officials said was an accident. Johnson, found in his cell, died of fractured vertebra due to a possible fall according to the medical examiner. He had asked to be placed in protective custody several months earlier.

CoreCivic denied a request for comment for this article, pointing Prison Legal News to the settlement agreement between the parties. Sayre’s attorneys did not respond to a request for comment. See: Sayre Industrial Authority v. CoreCivic, Beckham County District Court (OK), Case No. CJ-2018-00023. 

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Sources: newsok.com, sandiegouniontribune.com, doc.ok.gov, kecofm.com, nytimes.com, newson6.com

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Sayre Industrial Authority v. CoreCivic


 

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