Auditor demands private prison company pay $7.4M to Mississippi, calls for AG to enforce

A private prison company must pay $7.4 million to Mississippi for failing to maintain enough staff to ensure the safety of prisoners and prison employees, State Auditor Shad White said on Monday.

The demand, which White said is among the largest civil demands in the history of his office, targets Management & Training Corporation, a Utah-based private prison operator that manages two prisons in Mississippi — East Mississippi Correctional Facility in Meridian and Wilkinson County Correctional Facility in Woodville — and numerous other prisons across the United States.

About an hour after White’s announcement, MTC said in a press release that on Friday, it offered to pay White’s office $4.5 million, which represents fines “allegedly owed plus reasonable interest and costs.” Instead of taking the money, White’s office has “decided to issue a press release,” MTC’s own press release said.

In a statement, Jacob Walters, White’s spokesperson, told Mississippi Today the Auditor’s Office never received the offer, which he said would have come after the company missed its initial deadline. He also said the offer wouldn’t stave off litigation.

“To be clear, their offer was never sent to us, but if they want to cut a check today, by all means, we’ll deposit it in the taxpayers’ bank account immediately. Then we’ll ask the AG to sue them for the rest,” Walters said.

White began investigating the company over five years ago after he said allegations arose that it wasn’t providing the prison staff required by its contract with the state Department of Corrections. In 2021, the company paid back over $5 million to Mississippi after White launched a probe into staffing shortages at the Mississippi private prisons managed by the company. The auditor is now seeking an even greater sum from the company and said he has referred the demand to the attorney general’s office for enforcement in court.

“I don’t care how big of an out-of-state company you are or how many campaign donations you make to the other politicians, if you owe taxpayers money because you failed to live up to a contract with government, we will demand you pay it back,” White said in a news release. “No free rides on the backs of taxpayers.”

Emily Lawhead, a spokesperson for MTC, directed Mississippi Today to the press release the company issued in response to White’s Monday announcement, in which the company said it offered to settle its “dispute” with White, but his office instead issued “unjustifiable civil demands.”

“When questions were raised regarding staffing deficiencies and vacancy deductions, MTC acted in good faith,” said Michael Bell, vice president of MTC. “We conducted our own review and voluntarily paid over $5.9 million. That’s what an honest partner does. It is deeply disappointing and fundamentally unfair to ignore our efforts to work with the Mississippi Department of Corrections to address the staffing challenges we both face in operating correctional facilities.”

White, a Republican, did not single out any specific politician in his news release, but the company has donated to both Republican and Democratic elected officials in Mississippi.

A 2020 investigation published in partnership with The Clarion-Ledger, Mississippi Today and The Mississippi Center for Investigative Reporting also found that MTC collected millions of dollars in Mississippi by routinely charging the corrections department for vacant security positions the company was required to fill.

The lion’s share of the requested funds in White’s latest demand stems from fines White has levied against the company, according to letters sent to the company and obtained by Mississippi Today. The invoices cited by White were submitted to the state Department of Corrections for the time period of January 2017 through May 2020. The demand letter regarding the Wilkinson County Correctional Facility includes $3.1 million from the original fine, and nearly $2.8 million in interest.

Other fines were issued for other prisons MTC runs or used to run in Mississippi, including the Marshall County Correctional Facility, which the state took over in 2021 due to staffing issues.

In its Monday press release, MTC said the interest fees are primarily the result of the auditor’s office’s “delays and re-calculations.” It also attributed its staffing and hiring woes to challenges brought about by the COVID-19 pandemic.

White said Mississippi law requires him to refer the demand for enforcement to the AG because MTC failed to pay within 30 days.

“We’re now turning this case over to the AG’s Office for enforcement to ensure accountability for taxpayers, and I hope they will litigate the case immediately,” White said.

Since White rejected MTC’s $4.5 million offer on Friday, MTC “has no choice but to let this matter proceed to litigation,” it said on Monday.

MaryAsa Lee, a spokesperson for Mississippi Attorney General Lynn Fitch, said the AG’s office first received the March demand letters on Monday and is in the process of reviewing them.

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This story was originally published by Mississippi Today and distributed through a partnership with The Associated Press.