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Jail consultants convicted of ethics breaches
Fined for moonlighting

Tom Blackwell
National Post
Monday, February 10, 2003

Penetanguishene, Ont., is home to a new "super jail."

Two U.S. experts hired by Ontario and Nova Scotia to give supposedly independent advice on controversial jail privatization plans were later convicted of moonlighting for private prison firms and of other ethics violations, the National Post has learned.

Critics say the revelations raise new questions about the basis for Canada's tentative foray into for-profit corrections. But company and government officials say the pair had a minimal role here and deny there was even a hint of impropriety.

Charles Thomas, a retired University of Florida professor, and Mark Hodges, former head of the state's private prisons commission, both had links to Management and Training Corp. (MTC), the Utah-based business that eventually won the right to run Ontario's so-called super jail.

MTC was also a key part of the consortium chosen in 1996 by the Nova Scotia government to build and operate a jail there, although that project was later abandoned.

The Florida Commission on Ethics took both men to task for a variety of conflict of interest breaches and fined them thousands of dollars each.

"This angers me to think these two characters have links to our provincial government and with MTC, the operator of the super jail," said Sharon Dion, a community activist who is opposed to the private operation of the super jail in her hometown of Penetanguishene, Ont.

"How can we have an open and honest comparison of private versus public if some researchers and consultants have their hands so deep into privateers' pockets?"

Ms. Dion questioned whether MTC had an inside track on the Ontario tender because of its relationship with the two consultants.

But Carl Stuart, a spokesman for MTC, said Mr. Hodges and Mr. Thomas played no part in its getting contracts in Canada. MTC did pay for them to attend and speak to a conference of the firm's prison wardens in 1997, but that was the extent of the link, he said.

"They are each considered experts in privatized corrections," Mr. Stuart said. "MTC constantly strives to improve its corrections division by exposing wardens and other personnel to the most current industry information.

"It is in this spirit that Thomas and Hodges were invited to speak. Thomas and Hodges have never been employed or independently contracted by MTC."

He said the company was not even aware the two men had gotten into hot water in Florida.

The Ontario Public Safety Ministry said it also did not know about the ethics cases. In fact, the government did not deal directly with the two men, said Cieran Ganley, a ministry spokesman. It contracted with an Ottawa company, Partnering and Procurement Inc., which in turn sub-contracted the 1997 work to Mr. Thomas and Mr. Hodges.

Partnering and Procurement (PPI) hired Mr. Hodges and Mr. Thomas because they were two of North America's leading experts on private corrections, said Howard Grant, the Ottawa firm's president.

Like the pair's other public-sector clients and employers, PPI had no idea they also did work for private companies, Mr. Grant said.

"We were horrified when we first got the call [about their Florida troubles]," he said. "They were the experts and they were speaking everywhere.... Our assumption was that they had no conflict issues."

Mr. Thomas ran a respected research project on prison privatization and did work for the commission that also regulated Florida's private jails.

He and Mr. Hodges, who was executive director of the private prisons commission, sold their expertise to several states and provinces.

At the same time, though, Mr. Thomas was receiving millions of dollars from the corrections companies in consulting fees and donations to his research project. The ethics commission fined him US$20,000.

It fined Mr. Hodges US$10,000. Among other transgressions, he was chastised for the way he reported a trip he and his wife took to an MTC board meeting in Hawaii in May, 1997.

Just a month before that Hawaiian voyage, he and Mr. Thomas had completed their contract with the Ontario government.

They worked on the drafting of a type of tender -- called a request for qualifications -- for the private sector to build two new super jails, add to an existing facility and possibly operate one of them, Mr. Ganley said.

"This was the early stages of looking at privatized jails," Mr. Ganley said.

In Hawaii, weeks later, Mr. Hodges would talk about strategies MTC could follow in bidding on such contracts.

But Ontario changed direction, deciding to build the institutions itself, have one super jail run by the private sector and the other operated by the government to study the differences.

A new request for qualifications was issued in 2000, eventually leading to MTC's successful bid.

In Nova Scotia, Mr. Hodges helped the province consider bids for a similar tender to build and run a jail, according to documents entered before the Florida ethics commission. Mr. Thomas had advised on the drafting of the tender, documents indicate.

MTC was part of the Atlantic Corrections Group consortium that won the contract, but the plan never got off the ground.

Ken Kopczynski of the Florida Police Benevolent Society, the union that uncovered the freelance work, said jurisdictions that hired the men at that time cannot be blamed for not knowing about their sideline work for the industry itself.

But Mr. Kopcynski, whose union represents public-sector guards and fiercely opposes privatization, questioned the appropriateness of their playing both sides of the fence in the industry.

It was not until he began looking into the sources of funding for Mr. Thomas's university research project that the story came to the surface. The project to independently monitor the prison industry received nearly US$300,000 from the industry itself.

Mr. Thomas also received US$3- million in consulting fees from Corrections Corporation of America, the largest private prison company, in 1999, and owned stocks in the firm that at one time were worth US$900,000.

As well as paying the fine, he agreed to stop running the research project, once considered an unassailable source of intelligence on the industry.

The Florida ethics body found Mr. Hodges had used his position at the prison privatization commission to benefit his outside consulting business, using state employees, telephones and fax machines to aid his business.

The agency also concluded his private consulting frequently conflicted with his public duties.

According to an investigation report, Mr. Hodges told the ethics commission he attended the week-long MTC meeting in Maui to educate the company about mistakes it had made in bidding for Florida contracts. Mr. Hodges told the ethics watchdog he believed larger companies were dominating the market and if he could help MTC become more successful, that would drive down costs for the state.

He produced letters from the chairman of the private corrections commission apparently authorizing his outside consulting work. But the ethics agency questioned the validity of the notes, pointing out the letterhead bore a telephone area code that was not in effect at the time, suggesting they might have been prepared after the fact.

Copyright 2003 National Post

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