Stones & Bones / volume 11 number 5, May 2009

Private Prisons in Alaska: A History of Corruption
by Frank Smith

In 1981, a group of prisoners brought suit against the Alaska Department of Corrections (AK DOC) regarding conditions of confinement and transport of some inmates Outside in order to constrain institutional overcrowding. In 1983 a partial settlement of the Cleary v. Smith action was reached and a Final Settlement Agreement was agreed to in 1990.

Prisoners were to be returned to Alaska as the AKDOC constructed facilities to hold them.

Alaska politicians’ enthusiasm for being “tough on crime,” regardless of the social and financial consequences, never diminished. They legislated increasing sentences and expanded the reach of the law. The state’s population was also increasing again.

By 1991, overcrowding forced the DOC to once again consider exporting prisoners Outside, this time to for-profit institutions far removed from inmates’ families, friends, churches, support systems, and employers. The same legislators who were force-feeding the prison population didn’t want to pay for new prisons and adequate staffing. The DOC started shipping convicts to a Corrections Corporation of America (CCA) prison in Florence, Arizona.

In 1996, Bill Weimar, owner of a halfway house chain, and Bill Allen of VECO, partnered with a Florida operator, Wackenhut, to build a for-profit prison in South Anchorage. Their efforts failed in the face of community resistance.

In 1997, Weimar proposed his own Allvest as operator and moved the scheme near Delta Junction. He wanted to take over the Ft. Greely military base and have the city bond $40 million for converting the base to a prison.

Locals, at the urging of city fathers, initially assented to the prison proposal. Their suspicions grew, especially when enthusiastic city officials showed sudden and unexpected personal financial good fortune.

The notion struggled in the legislature, despite Allen’s and Weimar’s considerable influence on many legislators. An exhaustive economic analysis of the project indicated it would be far too costly to succeed, due in part to remote Delta Junction's tiny workforce. That location would have been shortsighted correctional policy, as well: virtually no inmates would have ever gotten visits, an important factor in preventing recidivism. It would also have been near-impossible to provide professional programs so far from urban amenities. These factors didn't bother the Allvest-VECO proponents. They were only interested in how much money they could make despite the obvious detriment to the city and Alaska.

As residents became more and more disenchanted with the scam, they cashiered the mayor and a city council member.

In mid-1998, Weimar sold his Allvest chain of halfway houses. It had become very profitable when Frank Prewitt was Wally Hickel’s last DOC commissioner in 1994. By 1998 Prewitt was president of Allvest. Along with it, the big prize was the Ft. Greely pig-in-a-poke prospects, bought by another scandal-plagued corporation, Cornell Corrections of Houston, Texas. Weimar had sold Allvest with a non-compete clause. Senator Jerry Ward, chairing the transportation committee at the time, threatened the reluctant city that he would eliminate highway improvement grants if they didn't buy in. The voters and new council members held fast.

In 2000, Ted Stevens decided that Ft. Greely would get an alternative project of dubious worth, the anti-ballistic missile defense system siting. That was the final nail in the prison’s coffin.

The group of fast talkers then were said to have gone to Stevens' congressional subcommittee to get $2.5 million in "base-closing" impact monies, in compensation for the failed project. They were turned down. They sued the City of Delta Junction. Cornell claimed not to be part of the suit, then admitted, grudgingly, to having “.5 percent.” Without them, it would seem the suit could not have proceeded since no one might have had standing to sue.

Delta Junction settled the lawsuit for $1.1 million, having been given assurances by suspect legislators that the state would pay $1 million. Governor Tony Knowles turned them down, though. His DOC never wanted the project that Weimar, Allen, and Ward were attempting to force upon it. Former state Republican party director Pete Hallgren, who became City Manager in Delta, refused to comment on culpability at the time. A Delta councilman still blames the mess on Knowles, whose administration truly had nothing to do with it. Hallgren, no longer working for Delta, now agrees with that well-spun story.

Prewitt, by then lobbying for Cornell, Weimar, and Allen, moved the prison proposal to Kenai to be built on Ward-connected tribal land.

A borough-wide approval vote lost 74 to 26 percent. Though Weimar had ostensibly dropped out of the picture, criminal court proceedings later showed he had retained financial interest in the project.

The group, with Allen's VECO now gone, tried to move their hustle to a number of different sites, including Wrangell, Sitka, Ketchikan, Whittier, Nome, and Mat-Su. Voters in Wrangell, where Senator Robin Taylor was heavily involved, turned them down, 72 to 28 percent.

In Ketchikan, the proposal was tied to the feds coming up with $150 million for a bridge to the site on Gravina Island, with another $75 million sought for an electric intertie. That boondoggle was scotched by Knowles’ DOC and the Ketchikan Borough Assembly.

The Nome City Council, though pressured by Cornell lobbyists, and including Wendy Mulder, wife of state House Finance Chair Eldon Mulder, turned them down.

Whittier, though, bought in. This most unlikely place, with 182 residents who mostly live in just one building, is susceptible to avalanches and tsunamis. It is over an hour's drive and a $15 one-way tunnel toll from the nearest workforce. Potential employees were unlikely to be attracted by Cornell's low wages: $8.50 an hour in Fairbanks and Anchorage at the time, compared to $9.25 in a New Mexico prison.

However, the mayor, Ben Butler, and his city manager were extremely enthusiastic. Suddenly flush with cash, Butler was able to start making campaign contributions and travel to Juneau to lobby. His harbormaster was DOC retiree Leonard Jones, who had been promoted by Prewitt as a DOC employee overseeing Weimar's budget modification requests. Prewitt and Weimar had long tied up their yachts in Whittier, as had Senator Jack Cowdery who minimized the project’s drawbacks in committee.

The Whittier proposal ran into stiff opposition from Knowles, then Murkowski, and legislators including Rick Halford, Lyda Green, Andy Halcro, and Bud Fate. In 2004, Representative Eric Croft prophetically said, during debate, "Someone's going to jail for this." Ethan Berkowitz offered similar opposition.

By 2005, the prospects of an adult prison in Whittier were over. With the help of representatives Tom Anderson and Vic Kohring, Cornell tried to get a certificate of need to turn Marc Marlowe's derelict McKay building in downtown Anchorage into a juvenile facility. Pete Kott told Allen he wanted to be warden in a new VECO prison in Barbados—a now-infamous statement.

Allen and VECO’s Rick Smith rolled on their crime partners and await sentencing. Weimar and ex-represenatives Kott, Kohring, and Anderson and are doing federal time. Cornell lobbyist Bill Bobrick is finished with his. Cowdery is under house arrest. Ex-Representative Bruce Weyrauch’s trial awaits resolution of an appellate issue before proceeding. Ex-Rep. Bev Masek and former Murkowski Chief of Staff Jim Clark also await sentencing. Former Senator Ted Stevens was fortunate to have his corruption conviction vacated.

During the FBI’s “Polar Pen” investigation, Prewitt wore a wire. He later testified to laundering campaign contributions for Cornell and taking a $30,000 “loan” from Weimar during the time when Prewitt headed the AK DOC.

A decade after Cornell lobbied to keep the state from building its own competing prison, construction is finally in the preliminary stages in the Mat-Su Borough. Ironically, Fairbanks Rep. Mike Kelly, who survived one of the closest reelection campaigns in Alaska history, would like to privatize it when it’s completed.

Allen Cooper, the former DOC Deputy Director, made numerous trips to CCA’s Arizona prison in the months before retiring. He is now the warden of a CCA New Mexico prison. According to the Anchorage Daily News (5/3/09) the state is shopping around for a cheaper for-profit alternative for its exported inmates, currently at CCA’s Eloy, Arizona, Red Rock facility.

Frank Smith's career has included public education and legislative lobbying, case management and outreach to the homeless mentally ill, research in criminal justice and drug abuse. He directed an ex-offender reentry service center, and was the director of the third-largest outpatient substance abuse treatment and education program in Alaska. He was an Alaska state social worker in child protection, retiring in 1997. He has lived in Anchorage, Barrow, Tok, and Wasilla, moving in 1999 to Kansas. He has been a freelance reporter for decades and regularly writes opinion pieces on prison reform and other topics. He has been published in numerous journals, and contributed a chapter on Native Americans in for-profit prisons, in the book Capitalist Punishment, published in 2003.

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