Matt Bevin signed a $41M emergency lease for a private prison on his last day in office

Joe Sonka | Louisville Courier Journal

Show Caption Hide Caption Kentucky Gov. Matt Bevin issues pardons, commutations for hundreds Using his executive powers, Kentucky Gov. Matt Bevin issued hundreds of pardons and commutations during his last days in office in 2019.

On his final day in office, now former-Gov. Matt Bevin signed a 10-year, $41 million emergency lease for a privately owned prison in Eastern Kentucky, bypassing the legislative committee that typically approves such contracts.

Members of the Capital Projects and Bond Oversight Committee — tasked with overseeing emergency repair funds for state property and acquisitions of capital assets through property leases — learned of the signed lease for the first time in an email Thursday.

On Oct. 18, Bevin held a press conference in Floyd County announcing that his administration planned to lease a vacant 656-bed facility from private prison company CoreCivic, to be operated by the Kentucky Department of Corrections.

The governor, in the final weeks of a close reelection campaign, said the lease would create 200 jobs and help reduce overcrowding in county jails.

Kentucky's inmate population has risen dramatically in recent years with the rise of the opioid crisis, with 24,000 in custody in state prisons, county jails and halfway houses.

The lease did not make its way to the committee at its November meeting a week after Bevin's election defeat. Bevin signed an emergency lease with CoreCivic on Dec. 9, along with his general counsel Steve Pitt, Finance Cabinet Secretary William Landrum III and Kathleen Kenney, the interim commissioner of state corrections.

State Sen. Chris McDaniel, R-Taylor Mill, a member of the committee, told The Courier Journal he was "floored" when he learned that the Bevin administration had bypassed the committee to sign the lease on its last day.

"Emergencies are for roofs caving in and fire damages and when you get prison riots. That’s an emergency." McDaniel said. "Overcrowding is a known issue with a number of variables and a number of solutions … but it certainly wasn’t an emergency.”

Under the terms of the contract, the Department of Corrections will lease the Southeast Correctional Complex for an annual rate of $3.75 million in the first two years, increasing 5% in two-year increments for 10 years.

The lease agreement states the facility would be used to help alleviate the overcrowding of county jails "so that inmates can receive the proper programs and treatment they require, and will provide employment and other economic benefits to the region."

The Legislative Research Committee has estimated that the state would pay $12 million for personnel to operate the facility in its first fiscal year of operation, though the state may save nearly $8 million on daily payments to house inmates at county jails.

McDaniel compared the Bevin administration's last-minute signing of the lease as it was leaving to that of former Gov. Steve Beshear's handling of the KentuckyWired contracts that Bevin inherited, giving the state "a 30-year mess on our hands."

"This is the same type of deal, and I hope the new Gov. Beshear will take a hard look at this contract to make sure we’re not making the same mistake,” McDaniel said.

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Asked about Bevin's signing of the emergency lease on his last day in office, Beshear spokeswoman Crystal Staley said the new administration "is still unearthing and unraveling the actions taken in the last several days of the prior administration.

"It may take some time to determine what actions were taken and what damage may have been caused."

Asked if Beshear and Mary Noble, the new secretary of the Justice and Public Safety Cabinet, support leasing the privately owned prison, Staley replied: "We are still assessing."

Asked if the company has been in contact with the Beshear administration and plans to uphold the emergency lease agreement, CoreCivic spokesperson Amanda Gilchrist replied: "In deference to our government partner, we encourage you to be in contact with Kentucky Department of Corrections Office of Communications for more information."

The Floyd County prison, formerly named the Otter Creek Correctional Facility, has been vacant since 2012 when former Gov. Steve Beshear decided to stop using private prisons owned and operated by CoreCivic, then known as Corrections Corp. of America.

The Otter Creek prison was infamous for multiple instances of sexual abuse by CCA guards against its female inmates, while abuse and mistreatment of inmates at the company's Lee Adjustment Center in Beattyville reportedly led to a prison riot in 2004.

Faced with prison overcrowding and exploding costs, the Bevin administration started using the Lee Adjustment Center again in 2017, to the chagrin of criminal justice reform advocates who staunchly oppose private prisons.

Previously: Kentucky will reopen private prison despite past inmate sex abuse

Among them was Holly Harris, a former Republican Party of Kentucky official who now leads the Justice Action Network, a criminal justice reform group that is prominent nationally.

When Bevin announced his plans to lease the former Otter Creek facility from CoreCivic in October, Harris said it "makes my heart break a little" and made her "deeply concerned about history repeating itself" at the prison.

Harris told The Courier Journal on Monday that Bevin's last-minute lease resembled the actions of California's governor, working around a ban on private prisons by leasing its facilities and staffing them with public employees, a scheme "to line the pockets of outside corporate interests who profit off of misery."

"Steve Beshear shut these facilities down in Kentucky years ago, and our supermajority Republican legislature forbid Matt Bevin to re-open them without express legislative consent," Harris stated. "We urge bipartisan rejection of this scheme, and we are hopeful these facilities can be repurposed in a way that heals Kentuckians, and brings better-paying jobs to struggling communities."

More transition news: Andy Beshear will cancel Bevin's last-minute Medicaid managed care contracts

Just before Beshear was sworn in, The Courier Journal asked him whether the use of private prisons would expand or retract in his administration. He answered that his team was still analyzing the management of the state's prison population, but "as a moral position, I am against private prisons."

"You can bet that I am going to move in the direction of ensuring that we don’t have prisons that are operating under the management of private corporations," Beshear said.

Harris said she hopes Beshear's administration acts quickly to cancel the contract.

McDaniel said he believes the Beshear administration can cancel the contract, but he isn't sure if the state could be forced to pay a penalty if it does not provide the proper notice of its early exit in time.

Reach reporter Joe Sonka at jsonka@courierjournal.com or 502-582-4472 and follow him on Twitter at @joesonka. Support strong local journalism by subscribing today: courierjournal.com/subscribe.