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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Two Bow Out Of Bid Decision Officials Own Stock In Firms Competing To Build Private Prison

Associated Press

Two Idaho Department of Correction officials own stock in companies vying to build and operate a private prison for the state, so they have stepped down from evaluating the bids.

Don Drum, the agency’s management services administrator, and Steve Stedtfeld, health services chief, both disclosed their interests before bids were received last month.

“We’ve been very aboveboard about this,” Drum said. “I didn’t want to risk my career for the minimal investment I have in this stock.”

The contract to build and operate the 1,250-bed prison is expected to be awarded by the end of the year.

Nine companies submitted bids, including the one in which Drum owns shares: Wackenhut Corrections, based in Florida. Stedtfeld also has said he owns shares in one of the bidders, department spokesman Mark Carnopis said.

Stedtfeld was out of the office Friday and could not be reached to name the company.

Drum said he and two partners, who are not Correction employees, bought Wackenhut stock about two years ago. At the time, state officials had been discussing a privately operated prison but had made no decisions, he said.

Drum said he and his partners own 150 shares valued at about $4,200 based on Thursday’s closing price. According to Idaho law, Drum could legally take part in evaluating the bids because his interest in the bidder is small. Only holders of 1 percent or more of a company’s shares must step down; Drum holds less than 1 percent.

Nevertheless, Drum said he and Correction Director James Spalding decided it was best for him to bow out for the sake of appearances.

Carnopis said evaluation of the prison bids will be handled by a dozen officials from the departments of Correction and Health and Welfare and the State Insurance Fund. A smaller team then will select finalists based on the evaluations.

Correction officials have said the new prison, which would open in the summer of 1999, would provide space for the 750 Idaho inmates now housed in Texas, Louisiana and Minnesota.