MONTGOMERY, Ala (WALA) -- An Alabama plan to build at least two private prisons in the state seeing a major setback on Monday.
At least two financial backers who were helping Alabama build some new prisons in the state pulled out.
This puts Governor Kay Ivey’s prison plan in jeopardy and could kill it, but those behind it are not giving up yet.
Investment bank Barclays announced Monday they are no longer playing a part in building two prisons in the state. It comes after they came under fire from several groups concerned about the need for more prisons.
“A bank has decided to do the right thing,” said David Zell, Co-founder of Alabama Students against Prisons. “They decided to pull out of this deal because it’s morally and fiscally irresponsible and bankrupt.”
Zell has been a vocal critic of the plan and has worked with other groups to derail it.
“This morning the bankers associated with the deal came into work with about 16,000 unread emails from concerned Alabamians and concerned Americans about the plan,” he said.
It is unclear what the final straw was for Barclays leading them to pull out.
They released this statement:
“While our objective was to enable the state to improve its facilities, we recognize that this is a complex and important issue. In light of the feedback that we have heard, we will continue to review our policies.”
Another firm involved, KeyBanc Capital Markets told FOX10 News via email that they “resigned” from the deal as well.
The prison plan has also gotten harsh criticism from State Auditor Jim Zeigler.
“I’m very relieved that the investors listened, they listened to all of the many faults of the Ivey prison plan,” he said.
Governor Kay Ivey signed the lease agreements in February for two prisons. Once built, the facilities would be in Escambia and Elmore counties. They would be owned by CoreCivic, a private prison company, but would be operated by the Alabama Department of Corrections. Rent payments would total about $100 million a year for 30 years.
“We can build our own prisons at the low cost of bonds for about 1/3 of the cost of this plan,” Zeigler said.
Despite the setback, Governor Ivey is doubling down and says the project will move forward.
She released this statement:
“The state of Alabama is disappointed that Barclays Plc has elected to no longer participate as an underwriting entity in the Alabama Prison Program. These new facilities, which will be leased, staffed, and operated by the state, are critical to the state’s public infrastructure needs and will be transformative in addressing the Alabama Department of Corrections’ longstanding challenges. As such, we are moving forward with this project. Our current correctional facilities are dilapidated, structurally failing, and in need of significant upgrades. It is not a matter of if our current facilities will fail, but when. Given the exorbitant deferred maintenance costs associated with renovating our existing facilities, replacing this infrastructure, which has far outlived its useful life, is the best path forward and the only fiscally responsible decision for the state. The new facilities have been specifically designed for the State to address our urgent needs and are a key part of a comprehensive solution to concerns identified in current and pending litigation. These new, state-of-the-art facilities will provide safer, more secure correctional environments that better accommodate inmate rehabilitation, enhance medical and mental health services, and improve the quality of life for all those who live and work in them. Replacing our current infrastructure, which was never designed to accommodate inmate rehabilitation, will empower the state and the ADOC to make the important shift from warehousing individuals to rehabilitating returning citizens. This is a bed replacement program as up to 11 of our existing, failing facilities will be closed, which, along with associated staff savings, underpins affordability on the project. Pursuant to the lease agreements, the Alabama Department of Corrections will be the only tenant of the new facilities and will be solely responsible for prison operations. To be abundantly clear, these are not private prisons – they will be run by the State. As the sole operator and tenant, the ADOC will be contractually obligated to make lease payments that cover all facility maintenance, lifecycle replacement, and financing costs for the full term of the bonds. The state is fully committed to this project and has put in place new options to advance this vital transaction in a timely and efficient manner.”
CoreCivic is also not holding back, in a statement the company wrote:
“The State of Alabama is facing a humanitarian crisis, and we’re proceeding with efforts to help deliver desperately needed, modern corrections infrastructure to replace dilapidated, aging facilities that originally were designed with one purpose in mind – to warehouse individuals, not rehabilitate returning citizens. Our partners in Alabama appreciate the solutions we’re providing to help improve conditions for the incarcerated people in their care, and they appreciate those in the investor community who continue to support these critical infrastructure projects. The reckless and irresponsible activists who claim to represent the interests of incarcerated people are in effect advocating for outdated facilities, less rehabilitation space and potentially dangerous conditions for correctional staff and inmates alike. This type of extremism does nothing but put politics over people, and exacerbates rather than solves the challenges facing our criminal justice system. If modernizing antiquated corrections infrastructure and providing space for more reentry programing are not aligned with these activists worldview, so be it. We’ll continue to be part of the solution and work with those who share those priorities and ideals.
We want to be clear on several points:
This initiative will replace correctional beds that have far outlived their useful life. It will not increase available space to incarcerate.
The Alabama facilities will be managed and operated by the state – not CoreCivic. These are not privately run prisons.
These new facilities will greatly improve the quality of life for both inmates and the dedicated state employees who will be operating them.
Our government partners continue to work with us because they understand the difference we help them make. We provide government the flexibility to manage the ups and downs of prison populations and provide better, safer care to inmates. And, under our longstanding, zero-tolerance policy, we don’t draft, lobby for or promote legislation that determines the basis or duration of an individual’s incarceration. Anyone serious about this issue knows that we aren’t the driver of mass incarceration – only 8 percent of inmates are cared for in facilities run by private contractors – but we are working hard to be part of the solution.
The U.S. Department of Justice filed a lawsuit last year claiming Alabama’s prisons are incantational with widespread excessive use of force against male prisoners.
The goal of Governor Ivey’s prison plan is to fix issues in the system, but Zell says building new prisons will not solve the issues the Department of Justice laid out in their lawsuit.