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Grand jury investigates private Panhandle prison deal

TALLAHASSEE — As legislative leaders continue the push to privatize 19 South Florida prisons, the state's most ambitious private prison project in Northwest Florida is enmeshed in a grand jury investigation.

The federal inquiry into the Blackwater River Correctional Facility has a broad sweep, touching former House Speaker Ray Sansom, R-Destin, the economic development arm of Santa Rosa County, and incoming Senate President Don Gaetz, R-Niceville.

Since March, the Pensacola-based grand jury has issued more than six subpoenas seeking documents and testimony into the $121 million state contract that cleared the way for the Boca Raton-based Geo Group to build a prison near the Panhandle city of Milton.

Neither the U.S. attorney nor the FBI will go on the record about the investigation. But subpoenas filed in court indicate they are seeking information about "Project Justice," the 2008 name given to the private prison project by TEAM Santa Rosa, the county's economic development agency. The subpoenas also show that investigators are interested in TEAM Santa Rosa's relationship with Sansom and the deal the county made to secure the land.

The events surrounding the grand jury investigation began as early as February 2008 when TEAM Santa Rosa met privately with Gaetz, Sansom and several board members. Gaetz was a freshman state senator at the time and Sansom was incoming House budget chairman. Among the items discussed was "prison funding support," according to documents released by TEAM Santa Rosa.

In March 2008, midway through the legislative session, Sansom traveled to Boca Raton, headquarters of the Geo Group, on what the lawmaker described in a travel voucher as "personal business." A week later, Sansom inserted the prison language into the budget. The Geo Group won the bid.

In May 2008, with the legislative session over, Allen Bell, of the Shopping Center Group and a facilitator on the Blackwater project, wrote an e-mail to TEAM Santa Rosa officials. "Project Justice and everything and everybody involved with Project Justice needs to remain confidential," it read.

Two years later, when Florida prisons were under capacity and new prison beds were not needed, the Legislature inserted language into the budget again — this time closing prisons and transferring the $22 million to opening and operating Blackwater.

The state's largest private prison opened in November 2010 to house 2,200 high-security male inmates. But the decision to open and build the razor-wire enclosed fortress was never given a standalone vote.

There was no cost-benefit analysis, no testimony from opponents, and little or no discussion.

It was authorized through budget "proviso" language, a long-standing practice used by legislators to direct the spending of a specific appropriation and, in the process, sidestep intense debate.

More recently, legislators used proviso language again to convert 19 state-run prisons in South Florida to privately operated facilities.

This time, they drew a lawsuit and lost. A Leon County Circuit Court judge ruled Sept. 30 that legislators violated the state Constitution by trying to use the budget proviso to change state law.

Gov. Rick Scott has not decided whether to appeal the ruling, but Senate President Mike Haridopolos told reporters last week that legislators will continue to use proviso language and pursue prison privatization because "we'll save more money doing it this way.''

Gaetz, the incoming Senate president, says that a policy change "as material as privatizing prisons … ought be done in the open" and promises to have all future private prison plans at least come to a committee vote.

That's not what happened with Blackwater in 2008. On April 4 that year, Sansom quietly inserted language into the state's 2008-09 budget for $110 million to build a 2,000-bed private prison in his district.

In July 2008, the Department of Management Services received two bids — one from the Corrections Corporation of America for a $126 million prison in Marion County and another from the Geo Group for a $121 million prison in Santa Rosa County. DMS awarded the Geo Group a $115 million contract on March 18, 2009.

The contract drew the attention of Jerry Couey, a Milton resident who runs a community website,, and has his own cable television program. He used the state's open records law to bring to light what he believes were "agreements done in secret to give subsidies to a private, profit-making company," with tax dollars from the state and Santa Rosa County.

In 2009, he filed a complaint with the state's attorney, which resulted in an investigative report and a finding that TEAM Santa Rosa had been violating state open meeting laws.

Beginning last March, the federal grand jury in Pensacola began issuing subpoenas seeking correspondence and contracts related to the prison project from the county, TEAM Santa Rosa, Sansom and his staff, among others.

The grand jury also asked for Sansom's travel records and any documents relating to Ray Sansom Inc., the consulting company he had formed in 2005 but which had been dormant until January 2009.

Sansom could not be reached for comment, but he told the Panama City News Herald in August that he formed his company to work as a consultant and "never billed Santa Rosa County for a penny." He denied knowing that Blackwater was to be built in Milton.

"I did not even know it was being constructed in Northwest Florida until a disgruntled employee filed a complaint thinking they would lose their job," he told the newspaper. "I got a copy of the complaint and had to use that to figure out where the company was."

As for his trip to Boca Raton prior to drafting the proviso language, Sansom told the newspaper: "I was meeting with state legislators. … I never talked to anyone at any prison corporation. That trip was totally unrelated to any pending legislation."

Gaetz, who has not received a subpoena, said he does not recall knowing much about the prison project despite the February 2008 meeting with TEAM Santa Rosa. "I remember it being a very general meeting and I don't remember the Geo Group being mentioned,'' he told the Times/Herald last week. "If they were, it just didn't stick in my mind."

Mary Ellen Klas can be reached at

Grand jury investigates private Panhandle prison deal 10/09/11 [Last modified: Sunday, October 9, 2011 11:32pm]
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