COUNTY NEEDS PRISON, BUT DOES KENTUCKY?

Privatization For Long-Awaited Elliott Complex Debated

SANDY HOOK - The unlovely state prison being finished in Elliott County has
the odd look of a suburban high school surrounded by double rows of razor wire.

The Corrections Department spent most of a decade planning it. Taxpayers
gave $92 million to build it. Local residents, grappling with some of the
state's worst unemployment, look forward to working in it. Now, belatedly,
comes the debate over whether Kentucky needs it.

Gov. Ernie Fletcher's administration says the 961-bed prison -- with space
for an 800-bed addition -- won't be necessary for years. The current
14-prison system is sufficient, as more state inmates are steered into
county jails, or left in their communities in drug courts or halfway
houses, which are cheaper.

"The day will come, unfortunately, when we will need all of the beds in
Elliott County. But I don't think that day is today," Corrections
Commissioner John Rees said.

Rees has recommended the Fletcher administration privatize the prison. A
company could lease it from Kentucky and rent out its beds to other states.
Or it could accept a management contract and house a mix of inmates from
Kentucky and other states, trying to run the place for less money than the
Corrections Department.

Either way, Kentucky taxpayers win, he said. Yet, appealing as that sounds,
not everyone buys the logic.

Handing the keys to the state's newest and best prison to an outsider would
be a huge mistake, according to critics, including law-enforcement
officials and Democratic legislators.

State prisons ended the month of June with 11,955 inmates and 309 empty beds.

But that's only because nearly 6,000 state inmates were parked in
lower-cost county jails, 54 percent more than just 18 months ago. The shift
to jails has put the squeeze on counties, some of which warn they can't
handle additional bodies.

And the numbers are rising: The state's total inmate population, about
18,000 at present, is expected to hit 22,000 by decade's end, due largely
to arrests in the illegal drug trade.

Fletcher must show where he will reroute the rising river of felons if not
to Elliott County, critics say.

Spots desired for every felon

Crime-fighters, including Cynthia Gale Cook, president of the Kentucky
Association of Commonwealth's Attorneys, say prisons continue to be
necessary to hold the repeat offenders who cause most of the trouble.

They say they understand the fiscal pressure in Frankfort to find cheaper
penal alternatives. But even some of Fletcher's more progressive
initiatives, such as expanding drug courts to help addicted felons, won't
eliminate the need for bed space. Many drug-court participants flunk out
and have to serve their original prison sentences.

"When we have everyone in prison who needs to be there, then we can talk
about privatization and leasing out beds for revenue," said Cook, a felony
prosecutor in Calloway County.

For Democratic legislators, particularly those in this impoverished region
of northeast Kentucky, an even bigger concern is local job creation.

If the state operates the Elliott County prison, it's expected to hire 280
people to work in the guard tower, kitchen, cell blocks and offices,
starting at $20,000 to $22,000 a year, nearly twice the local per capita
income. The health insurance and state pensions would be icing on the cake.

However, a private operator, to earn a profit, is going to spend less than
the government. That means fewer employees, lower pay and stingier
benefits, all inside a brand-new facility generously provided by taxpayers,
said House Majority Floor Leader Rocky Adkins, who lives in Sandy Hook.

"The Department of Corrections said we needed this prison. Elliott County
overwhelmingly accepted it," Adkins said recently while he toured the prison.

"Now I think the state has something of a commitment to the people here to
open this place and to run it."

Residents Waiting For Their Jobs

People in Sandy Hook admit a prison isn't the cheeriest place to work.

But it might be all they get anytime soon.

Unemployment in Elliott County topped 14 percent in May, the second-highest
rate in the state, according to the Kentucky Department for Employment
Services. True unemployment is probably worse; the agency counts only
people who looked for work in the past month.

"This prison could be a good deal for us," said Ron Stamper, 26, an
occasional carpet installer, as he smoked a cigarette outside the
courthouse on Main Street.

"It'd be better if it had been a factory. But you know, there's really no
jobs here other than the schools and family businesses," Stamper said. "You
look for a place to put an application in, you're wasting your time."

So the town waits for January, when the medium-security Little Sandy
Correctional Complex is scheduled to finally open its gates -- or, more
accurately, to finally shut them.

Rural Kentucky has counted on incarceration for jobs for generations.

Poor counties battled to claim new state prisons. Elliott County started
its lobbying campaign for this prison nearly 20 years ago, under Gov.
Wallace Wilkinson, ultimately beating out Knott County in 1998.

U.S. Rep. Hal Rogers, a Republican, helped bring several federal prisons to
southeast Kentucky, which he represents.

The Economic Development Cabinet -- led, then and now, by Secretary Gene
Strong -- has cheered prison construction. It held a workshop in 2000 to
teach companies how to "cash in on a portion of the $100 million business
opportunity that will soon be up for grabs" as a federal prison was built
in McCreary County.

But Fletcher, at the Capitol, said this has become an outmoded way of thinking.

Kentuckians can do better, he said.

"That's not the type of economic development we need to be looking at for
the future of Kentucky," the governor said. "I just don't want this state
to have the reputation of being a state that builds its economy on building
prisons and incarcerating its citizens."

Warden Wants His Chance

Perhaps no one is more curious about the new prison's fate than Gary Beckstrom.

On Nov. 1, Beckstrom arrived in Sandy Hook as then-Gov. Paul Patton's
choice for warden.

Days later, voters elected Fletcher to replace Patton.

On Dec. 1, Beckstrom said, he took a phone call from Fletcher's team. Had
he ordered furniture and supplies for the prison, at that point set to open
in June?

Yes, he replied.

Put that on hold for now, the caller said, because there might be some
changes in the works.

Seven months later, Beckstrom describes himself as "the only warden in
Kentucky without a staff, or any inmates for that matter." He wanders
through empty cellblocks, watching as construction crews put finishing
touches to the interior.

If the prison is privatized, he'll be reassigned.

Privatization isn't guaranteed, however, said Rees, the corrections
commissioner.

The Corrections Department is finalizing a request for proposals for the
Elliott County prison -- as well as a request for privatization proposals
for the prison system's food-service program -- and a lot of details need
to be resolved, he said.

But the Elliott County deal could work one of two ways, said Rees, a former
vice president for business development at Corrections Corporation of
America, the nation's largest private prison operator.

The state could lease the new prison to a company like CCA, which already
runs three prisons in Kentucky. The state would collect rent while the
company, in turn, leased out the beds to hold other states' inmates.

Or the state could offer a management contract, paying a company to run the
prison and hold Kentucky inmates in some of its beds more cheaply than the
Corrections Department could. Remaining beds still could be leased out.

If Kentucky chooses to have a company manage its prison and hold some state
inmates, the target price would be $35 daily for each inmate, Rees said.
Right now, the Corrections Department pays an average of $46 daily for each
inmate in state prisons.

Beckstrom said if the Fletcher administration gave him the chance, he, too,
could run the new Elliott County prison at $35 an inmate each day because
of the facility's modern technology and design.

People forget that the state's $46 average is inflated by two costly
maximum-security prisons, including a Death Row, and some prisons that date
back to the 19th century, he said.

Opposing privatization is an awkward stand for Beckstrom. He serves at
Fletcher's pleasure. He worries that accidentally locking Lt. Gov. Steve
Pence in a room last month, during a tour of the prison, probably didn't
help his standing in Frankfort. The state's No. 2 ultimately escaped by
crawling out a window.

But Beckstrom also is a 27-year veteran of the Corrections Department, and
he said the state should be in the business of running its own penal system.

"I don't aim to be second-best in anything," he said. "The state can do
this if it gives itself the chance."