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Eye On Boise

Fact Check: CCA and the governor’s debate

Idaho Gov. C.L.
Idaho Gov. C.L. "Butch" Otter, right, responds to a comment by Libertarian candidate John Bujak, left, during a debate at the studios of Idaho Public Television in Boise, Idaho, on Thursday, Oct. 30, 2014. (AP / Otto Kitsinger)

In last night’s heated debate between the three leading candidates for governor of Idaho, there was much back-and-forth over the Corrections Corporation of America and the state’s $1 million settlement with the firm for understaffing the state’s largest prison and over-billing the state. Here’s a fact-check on some of the disputed points the candidates raised:

SETTLEMENT AMOUNT: Gov. Butch Otter said the settlement was for $1.3 million, not $1 million. You can see the settlement here. On Page 1 of the nine-page settlement, under “Release and Discharge,” it says, “In consideration of the sum of ONE MILLION DOLLARS AND 00/100 ($1,000,000), paid by CCA, the receipt and sufficiency of which Releasor acknowledges … Releasor does hereby fully, forever, irrevocably, and unconditionally release, acquit, and forever discharge Releasee from any and all claims … of any kind, whether known or unknown, suspected or unsuspected … arising out of the staffing of the ICC and existing on or before the date of this Settlement Agreement.”

Asked about the $1 million settlement during the debate, Otter said, “No, that was not the amount. … It was well in excess of a million dollars. … In fact, there was a bill outstanding for over $300,000 that was also part of the final negotiations.”

On Feb. 4, 2014, the Idaho State Department of Correction and CCA issued a joint statement announcing the $1 million settlement. “CCA will pay $1 million in compensation to the State of Idaho,” the joint statement said. “Additionally, the State of Idaho has denied CCA an annual inflationary increase in the amount of approximately $350,000.”

BOTTOM LINE: That denial of the inflationary increase isn’t mentioned in the signed settlement, though it may have been a part of the negotiations.

 “OFF THE HOOK”: A.J. Balukoff, the Democratic candidate for the governor, said during the debate, “The governor just admitted he doesn’t know if $1.3 million was a fair settlement or not. It seems like it’s prudent to do the investigation and understand what went on before you let a company off the hook.”

Otter responded, “A.J. knows different. A.J. knows if he’s done his homework, he knows that that contract is not final. That negotiation is not final. … If the FBI comes up with something, then all bets are off.”

“No, they’re not,” Balukoff responded. Otter said, “The criminal can go forward for anything else that’s found out.” Balukoff said, “That agreement and forgiveness of civil penalties does not go away.” Otter snapped back, “That’s not true.”

Balukoff said, “They can go after the people that have committed crimes, they can go after them for criminal, but the settlement for civil damages exonerated them for whatever other damages may be discovered.”

BOTTOM LINE: The exact wording from the settlement is, “The Parties desire to finally and fully resolve all disputed claims arising out of the staffing discrepancies.”

As I reported on Oct. 17, the settlement agreement itself says all civil claims are settled over the staffing issues, and doesn’t discuss criminal liability. In response to a public records request, the governor’s office provided a Feb. 17, 2014 email exchange between Mark Warbis, a top aide to Otter, and Mark Kubinski, lead deputy attorney general for the Idaho Department of Correction, on that question.

Warbis writes, “Does this release and discharge apply only to civil claims, or could this potentially block the pursuit of criminal claims should they emerge?” Kubinski responds, “The release section only applies to civil claims. The signatories are Division of Purchasing, IDOC and the Board, none of whom have any authority to waive any potential criminal charges. I’m comfortable with the language as drafted.”

 “CONTRACT IS OPENED UP”: During the debate, Libertarian candidate John Bujak said, “I have a little more information as a lawyer, I’ve seen some of the litigation that’s gone through the federal courts related to what was going on there due to the lack of supervision. The state has been exposed to the liability through the lack of supervision to a greater degree. I think the settlement was premature. I don’t think that number was a good number, and I would have liked to see more investigation before any kind of settlement was struck regarding the private prison.”

Otter responded, “A good lawyer would have read the entire contract on the negotiation, and would have found out that at the end, new information on a new subject, the whole contract is opened up. That’s in the contract, John.”

Bujak responded,"As a civil lawyer, whenever you settle a civil case you don't leave open-ended liability. The whole notion is it's risk management. Now, maybe they can be opened up to some additional liability in the criminal context, but there’s no additional civil liability that can be imposed under that contract. That civil liability was simply put to bed for a million bucks.”

Otter retorted, “Not true.”

BOTTOM LINE: There is no provision at the end of the nine-page settlement that matches Otter’s description. Prior to its signatures, it ends with this clause on Page 5: “Effectiveness. This Settlement Agreement shall become effective upon the date of execution by the last Party to execute the Settlement Agreement.”

Betsy Z. Russell
Betsy Z. Russell joined The Spokesman-Review in 1991. She currently is a reporter in the Boise Bureau covering Idaho state government and politics, and other news from Idaho's state capital.

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