Posted at 9:59 a.m., Friday, December 7, 2001

Prison contract dispute delays payment

By Kevin Dayton
Advertiser Capitol Bureau Chief

A contract disagreement has delayed about $4.5 million in payments to a private prison operator that is holding about 600 Hawai'i inmates in prisons in Arizona.

The state has not paid Corrections Corporation of America since before July 1 because the state didn't have a signed contract, said Ted Sakai, director of the state Department of Public Safety.

Money has been set aside so payment can be processed. The problem did not affect the inmates, Sakai said.

"Frankly, it kind of mystified us that they didn't push it harder," Sakai said. "To be honest, we asked CCA several times about what the holdup was, because we wanted to take care of business."

Technically the state contracts with Pinal County, Ariz., which subcontracts with CCA to provide housing, food, health care, programs and other services to the Hawai'i inmates, Sakai said.

Sakai said Pinal County wanted the contract to make clear that Hawai'i officials know CCA is the subcontractor, and that CCA is liable for any damages if there is a breach of contract.

"It's a pure technicality," Sakai said. "Our inmates are still there, we sent new inmates up, they accept them, so except for this thing between the CCA and the county, there's absolutely no hint that there's any problem at all, except for the fact that we've haven't been able to pay them when we wanted to."

CCA spokesman Steve Owen said this week that a contract had been finalized and signed. "It was not so much a dispute per se, it's just I think they had some concerns over some language and what it meant in terms of responsibility on their end," he said.

Under the three-year contract, the state will pay CCA $50 per day per inmate to house the prisoners in Arizona. In all, the state keeps about 1,200 prisoners on the Mainland because there isn't enough prison space for them in Hawai'i facilities.

Prison officials also say it is far cheaper to house inmates at privately run prisons on the Mainland than at publicly operated prison in Hawai'i.