Bloomberg News

Ohio Proceeds With Prison Sale as Judge Denies Delay Request

August 31, 2011

(Updates with comments from plaintiff in 10th paragraph.)

Aug. 31 (Bloomberg) -- Ohio will proceed with its plan to sell five prisons after a county judge denied a request today for a temporary restraining order to stop the sale.

The Rehabilitation and Correction Department scheduled a news conference for tomorrow in Columbus to announce the contract awards, the department said in a release.

“We believe our process is sound,” Carlo LoParo, a spokesman for the department, said by telephone from Columbus.

ProgressOhio, a Columbus nonprofit group that describes itself as a “progressive voice for Ohio citizens,” filed a lawsuit to block the sale on grounds it violated the state constitution.

Judge Patrick E. Sheeran of Franklin County Common Pleas Court declined to issue a restraining order and set a hearing for Sept. 13 in Columbus to consider legal arguments.

“Neither the selection of bidders nor the awarding of a contract will constitute irreparable harm for purposes of this motion,” Sheeran wrote in his 16-page opinion.

Ohio wants to sell five prisons, including one that’s closed and two that are privately operated, to raise an estimated $200 million to help balance its budget.

Three companies submitted bids in June to buy and operate the facilities, according to the correction department. They are: Nashville-based Corrections Corp. of America Inc., Geo Group Inc. of Boca Raton, Florida, and Management and Training Corp. of Centerville, Utah.

Argument Has ‘Merit’

Selling state prisons to private companies is “unconstitutional and unenforceable,” ProgressOhio said in its lawsuit, partly because the authorization was included in the budget and the right to seek a referendum on it was denied. Sheeran’s ruling said the argument “appears to have merit” and gave both sides time to present additional statements.

“If anything, it should be a red flag to the state that they should proceed cautiously and slowly,” Brian Rothenberg, ProgressOhio executive director, said in a telephone interview from Columbus.

The state offered three combinations of prisons for sale and might award packages to different bidders, the agency has said. The department plans to sign contracts by Sept. 1 for companies to assume operation of the prisons by Jan. 1.

ProgressOhio and other opponents of the sale say the state won’t get a fair value or realize the projected savings of $6.6 million annually. Ohio’s alternative is closing prisons and sending thousands of inmates out of state, Gary C. Mohr, director of the Department of Rehabilitation and Correction, has said.

--Editor: Jerry Hart, Mark Schoifet

To contact the reporter on this story: Mark Niquette in Columbus, Ohio at mniquette@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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