FBI Concludes Lengthy Investigation of Corrections Corporation of America
Idaho U.S. Attorney’s Office Declines Prosecution
BOISE – After a fifteen-month investigation by the Federal Bureau of Investigation, the U.S. Attorney’s Office for the District of Idaho announced today that it is declining prosecution under federal public corruption statutes and federal criminal fraud statutes of any actors in connection with the Corrections Corporation of America (CCA) falsifying staffing rosters and understaffing at the Idaho Correctional Center. CCA operated the Idaho Correctional Center under a contract with the State of Idaho until the end of June 2014.
The FBI initiated an investigation in March 2014 to determine whether CCA or its employees defrauded the State of Idaho by falsifying staffing rosters and understaffing shifts. The investigation included the years from 2008 to early 2014. The FBI also investigated whether any state actors sought to delay, hinder or corruptly influence a state criminal investigation into CCA’s staffing practices and subsequent billings to the State of Idaho under the ICC contract. The Idaho State Police, which initiated an investigation in February 2014 when directed to do so by Governor C.L. “Butch” Otter, discontinued their investigation after meeting with the FBI in March 2014.
“The FBI’s detailed and thorough investigation did not produce evidence of a federal criminal violation,” announced U.S. Attorney Wendy J. Olson. “Rather, the evidence showed that the false entries and understaffing could be attributed only to relatively low-level CCA employees. No evidence obtained during the investigation showed that any CCA employee at the assistant warden level or above participated in creating the falsified rosters, or affirmatively knew that rosters were falsified at the time they were falsified. Likewise, no evidence showed that the false entries were made by the low-level employees with the intent to defraud the state of Idaho of money or property, as is required under the federal criminal fraud statutes.”
Olson continued, “In addition, no evidence obtained during the FBI investigation showed that state employees at the Idaho State Police, the Idaho Department of Correction or the Governor’s Office sought to delay, hinder or corruptly influence a state criminal investigation, as is required under the federal public corruption statutes. Rather, the evidence shows a series of miscommunications and uncorrected assumptions that lead to incorrect reports in the media and incorrect statements in related civil federal court proceedings that the Idaho State Police were conducting a criminal investigation, when in fact they were not.”
The media reports and court statements were made prior to February 2014 when Governor Otter ordered the Idaho State Police to conduct an investigation. “My office and the FBI met early on with the Idaho State Police detectives assigned in 2014 to conduct a criminal investigation,” said Olson. “Following that meeting, to ensure an investigation in which the public could have great confidence and to avoid any appearance of a conflict of interest in investigating activities of the Idaho State Police and other state agencies, we all agreed that it would be best for the FBI to initiate an investigation and for the Idaho State Police to discontinue their investigation. I commend the Idaho State Police and the Idaho Department of Correction for recognizing that a neutral, independent federal investigation was the best course of action in this matter. We have conducted that investigation, reviewed its results, and concluded that there is insufficient evidence to prove any federal criminal charges beyond a reasonable doubt. In such situations, we are obligated to decline prosecution.”
The FBI’s investigation included review of voluminous documents obtained from the Idaho State Police, the Idaho Department of Correction, the Governor’s Office and other state agencies. It also included review of documents obtained from CCA, depositions and pleadings in the related civil proceedings, and interviews of numerous witnesses.
“In assessing whether CCA, or anyone at CCA, violated federal fraud statutes by falsifying staffing rosters, the FBI and assigned prosecutors in this office looked closely at the contract between the state and CCA,” said Olson. “Under the contract’s terms, the state did not directly reimburse CCA for guard or staff hours worked. Rather, all evidence showed that the reimbursement was based on the number of inmates. Where contract terms, such as adequate staffing, were violated, the state had the option of obtaining liquidated damages for the contract violations. Evidence showed that CCA and ICC employees responsible for billing were unaware of the staffing issues or the falsified rosters. This evidence supports the finding that neither CCA nor its employees acted with the intent to defraud.”
The state of Idaho entered into a $1 million civil settlement with CCA in February 2014, prior to Governor Otter directing the Idaho State Police to conduct a criminal investigation. Prior to February 2014, media outlets reported that the Idaho State Police were conducting a criminal investigation. Those reports were based in part on an Idaho Department of Correction employee testifying in federal court in August of 2013 that the Idaho State Police were conducting such an investigation. Throughout 2013, Idaho Department of Correction and Idaho State Police representatives met regularly to address the inaccurate rosters and understaffing at ICC. In addition, the state of Idaho had retained independent auditing firm KPMG to conduct an audit of the staffing entries for 2012. “The evidence obtained during the investigation showed that although Idaho State Police representatives in the meetings never affirmatively represented that they were conducting a criminal investigation and consistently referred to the matter as civil, some Idaho Department of Correction employees believed that a criminal investigation was ongoing based on other statements and actions of Idaho State Police representatives,” said Olson. “Representatives from neither agency made further inquiry or attempted to publicly correct this incorrect assumption. While these miscommunications ultimately gave rise to suspicion of an effort to delay, hinder or influence a state criminal investigation, such miscommunications, unsupported by any other evidence, do not rise to the level of criminal conduct.”
Olson noted that the FBI investigation did not focus on whether understaffing resulted in additional violence within CCA, as alleged in various civil lawsuits brought against CCA and ICC. “The investigating FBI agents were certainly familiar with the allegations in the civil lawsuits but did not identify any evidence that would support a criminal civil rights charge,” said Olson. Olson noted that the FBI had previously conducted an investigation into inmate-on-inmate assaults at the Idaho Correctional Center and that her office had declined prosecution in October 2013 of any criminal civil rights charges based on evidence gathered in that separate investigation.