MELISSA BLOCK, host:

This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

The U.S. has the highest incarceration rate in the world, and that has helped make privately-run prisons a $3 billion industry. You'll find the nation's largest juvenile prison in a tiny Mississippi town, and it's become a golden goose for the community and for its private operator. But a scandal there is raising serious questions about whether profits have distorted the mission of rehabilitation.

A civil rights lawsuit alleges juvenile inmates are being held in barbaric and unconstitutional conditions and the Justice Department is looking into it.

Here's NPR's John Burnett with the first of a two-part investigation.

JOHN BURNETT: The state of Mississippi pays a private corrections company to run the nation's largest juvenile prison. Walnut Grove Youth Correctional Facility houses 1,200 boys and young men in a sprawling one-story complex, ringed by security fences, about an hour's drive east of Jackson.

Prisons are places filled with stress and violence. Without proper supervision, they can revert to primitive places. Our investigation indicates that's what has happened at Walnut Grove.

Mr. CLAYBORNE HENDERSON (Former Inmate): Walnut Grove is like - it started out and it was formed to be something good for youth, but somewhere down the line it took a turn for the worst.

BURNETT: Clayborne Henderson is 27. He's working at a carwash and taking community college courses, trying to straighten his life out. He spent two years for kidnapping in the Grove, as they call it, between his 19th and 21st birthdays.

He and other former inmates, who were interviewed in a lawyer's office, describe an environment of violence inside the youth prison that was so pervasive, it became entertainment.

Mr. HENDERSON: It'd be like setting up a fight there like you would with two dogs. And sometimes that I did witness twice while I was at Walnut Grove they actually betted on it. It was payday for the guards and they actually betted on two fights.

BURNETT: The Southern Poverty Law Center and the ACLU National Prison Project have filed a class-action lawsuit on behalf of 13 inmates against the prison operator, GEO Group, and state officials. The complaint describes rampant contraband brought in by guards, sex between female guards and male inmates, inadequate medical care, prisoners held inhumanely in isolation, and guards brutalizing inmates.

Sheila Bedi is the lead attorney on the case.

Ms. SHEILA BEDI (Attorney, Southern Poverty Law Center): And when we began investigating conditions inside of this facility and seeing how these kids were living with the beat-downs and the sexual abuse and the violence and the corruption, it became a no-brainer. It became something that we had to do.

BURNETT: Earlier this year, the Justice Department Civil Rights Division launched its own investigation into some of the charges. A spokesperson in Washington said the probe is ongoing and she declined to comment.

Several former inmates who spoke to NPR say the guards are a big part of the problem. Justin Bowling spent 17 months in the Grove in 2007 and 2008 for marijuana possession. He says the prison is overrun with gangs, whose members include correctional officers.

Mr. JUSTIN BOWLING: A lot of times, the guards are in the same gang. If inmates wanted something done, they got it. If they wanted a cell popped open to handle some business about fighting or something like that, it just pretty much happened.

BURNETT: There's also a problem of too few guards. A state audit in 2005 and another one last year, noted that staffing at Walnut Grove decreased even as the prisoner population increased. In prison, less supervision leads to more assaults.

The Council of Juvenile Correctional Administrators, which represents youth facilities in all 50 states, reports that a ratio of one guard to 10 or 12 inmates is common. The audit of Walnut Grove found the guard-to-inmate ratio was 1-to-60. Salaries are the largest expense of a correctional budget, and reducing staffing is often a way to keep costs down.

GEO Group, based in Boca Raton, Florida, declined repeated requests by NPR to give its side of the story; they cited the pending lawsuit. GEO is the nation's second largest prison corporation, with more than a billion dollars in revenue last year.

Mississippi Corrections Commissioner Chris Epps also declined repeated requests for an interview, citing the litigation. In a short email, he said the facility is improving under GEO's management and he has no knowledge of staff abusing inmates. Two months later, his spokesperson confirmed they've hired an independent consultant to review operations at the Grove.

Ms. ETHEL HEARD: We know that our children have made mistakes. You know, we know that. We're not asking that they open the cell doors and let our kids out. We're asking for them to have better treatment.

BURNETT: Ethel Heard is one of a hundred parents who've banded together to pressure the state to make reforms at the Walnut Grove. Her 21-year-old son, Tyrone, is serving time there for armed robbery.

When Walnut Grove opened 10 years ago it was a model youth facility. The idea was to get teenaged felons out of the notorious Parchman Penitentiary and away from hardened criminals. As one young inmate said, an old fool has lived his life, but a young fool can change.

But that's not how it's turned out, says State Representative John Mayo. He's a member of the corrections committee that oversees Walnut Grove.

State Representative JOHN MAYO (Mississippi): To me, in my mind, it's just a prison. It's just another adult prison.

BURNETT: Mayo says the legislature kept raising the age of inmates sent there from 18, now all the way up to 22. He voted against the age increases. Today, Walnut Grove is the only juvenile facility in the nation that locks up 22-year-olds with 13-year-olds.

Rep. MAYO: Initially, it was to be 13- to 18-year-olds. And then, quite frankly, that did not populate Walnut Grove to what I'm going to call a profitable operation.

BURNETT: Two years ago, Walnut Grove added 500 beds to accommodate all new prisoners. According to the 2008 and 2009 annual reports of Cornell Companies, the prison operator at the time, the expansion created an extra $3.4 million in revenue. GEO acquired Cornell last year.

George Cole, a career educator, served as principal of the prison school for four years. Here's his testimony at a legislative hearing called in January to look at alleged abuses at the prison.

Mr. GEORGE COLE (Educator): I thought when I went to Walnut Grove, I was going to go to a place that really was interested in the rehabilitation of our children but I found out quite the opposite. And I guess as a private facility, they had to make money.

BURNETT: NPR examined hundreds of pages of public records associated with federal grants paid to Walnut Grove. Records show that warden Brick Tripp(ph) and his deputy wardens, already paid by GEO, have been receiving checks for 2,500 to $5,000 as supplemental salaries for administering federal education funds. Yet, former principal George Cole, contacted at his home, said this.

Mr. COLE: The warden and deputy warden had no dealings whatsoever with educating students.

BURNETT: The warden declined an interview request. A lawyer representing the Walnut Grove Correctional Authority, which writes the checks, says overseeing the grants is part of the warden's job, though he did not say why deputy wardens receive paycheck bonuses.

NPR forwarded the paycheck supplements to the U.S. Department of Education and asked for an explanation. Chief of communications Justin Hamilton said they're concerned.

Mr. JUSTIN HAMILTON (Department of Education): And we've referred this matter to the Department of Education's inspector general for investigation.

BURNETT: Despite all the controversy, the youth prison has staunch defenders. Denise Jones Putnam, the municipal clerk at the town of Walnut Grove, says her nephew is in the prison boot camp program.

Ms. DENISE JONES PUTNAM (Municipal Clerk, Walnut Grove): And he will be one of the first ones to tell you that's the best thing that's ever happened to him. It's turned his life totally around. What I think about the facility is, is it offers a place for these kids to be rehabilitated and put back into society.

BURNETT: As to why the kids are frequently placed on lockdown and fight with staff, Reverend Justin Chaney(ph) was chaplain at Walnut Grove from 2007 to 2010.

Reverend JUSTIN CHANEY: Walnut Grove is not a day care. I'm afraid that's what a lot of people kind of think it might be, is just a little detention center. It's maximum security. So, yeah, you do have those that can be rough.

BURNETT: The town of Walnut Grove is so small there's no stoplight or supermarket. Inmates outnumber citizens two to one. The youth prison has just about saved this town from extinction. The 200 prison jobs helped fill the void when a shirt manufacturer and a glove-maker closed and moved overseas several years ago.

Mayor GRADY SIMS (Walnut Grove): My name is Grady Sims, mayor of Walnut Grove. Been the mayor for about 30 years.

BURNETT: The mayor's own vending company has 18 snack machines inside the prison.

Mayor SIMS: It's been a sweet deal for Walnut Grove.

BURNETT: Every month, the prison pays the town $15,000 in lieu of taxes, which comprises nearly 15 percent of its annual budget.

Mayor SIMS: For a small town, that's a lot of money, you know. And it helps us maintain a fulltime police department that we wouldn't be able to afford without that income.

BURNETT: There's more - GEO pays the Walnut Grove Correctional Authority, which sends the prison all of its grant money, $4,500 a month. The Authority's lawyer says the money is kept in escrow and rarely spent. Finally, there's a fulltime state corrections employee whose job is to monitor how the prison is run. His salary is reimbursed by GEO.

All of this raises the question, is oversight of the Walnut Grove youth correctional facility negligent because it's a golden goose? Here's what Representative Earle Banks, chairman of the state juvenile justice committee, had to say. He's the one who called the recent hearing to investigate Walnut Grove, he's also a plaintiffs' lawyer who's suing the prison for wrongful death of an inmate.

State Representative EARLE BANKS (Mississippi): All this community is just making so much money on Walnut Grove that no one wants to upset the apple cart. Then that means they're not going to make their money anymore.

BURNETT: That may be about to change. Again, Representative John Mayo.

Rep. MAYO: If there's mistreatment going on at Walnut Grove, and the Justice Department finds that it is, they ought to sue the hell out of somebody. I can't understand why we have to be sued to do what's right.

BURNETT: John Burnett, NPR News.

SIEGEL: And on Monday's MORNING EDITION, you can hear the second half of John's investigation into the private prison industry.

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