ALABAMA – Alabama State Auditor Jim Zeigler says the last underwriter for financing an Alabama prison lease plan has backed out. Zeigler, a vocal opponent of the plan, says it “should be pronounced dead.”
Stifel Bank of Cleveland, Ohio follows the two lead underwriters which withdrew from the project April 19 – Barclays of London and KeyBank of Cleveland.
The project was to be led by CoreCivic, a Nashville firm in the private prison business.
Stifel’s Senior Vice President of Investor Relations, Joel M. Jeffrey, said in an e-mail Monday, May 10: “…this transaction has already been withdrawn from the market. Further, you should understand that Stifel is no longer engaged with CoreCivic, any conduit, or the State of Alabama regarding the financing of the project.” Bloomberg News confirmed the contents of the email and that Stifel is out of the Alabama prison lease project.
The plan would contract with three consortiums of private businesses, two led by CoreCivic. The contractors would pay to build three super-prisons in Bibb, Elmore, and Escambia Counties of Alabama. Two of the contracts were signed Feb. 1 with the one in Bibb County pending.
“The Kay Ivey plan would force Alabama taxpayers to pay rents starting at $94 million a year and going up to $106 million. At the end of 30 years, the state would own equity in the prisons of zero. No equity. This is a bad business plan,” Zeigler said.
“The Ivey plan does not address the problems in the prison system – safety of staff and other inmates; overcrowding; mental health; suicide; recidivism; and inadequate job training. The plan merely throws over $3.6 billion of taxpayer money into rented buildings,” Zeigler said.
A bipartisan lawsuit seeking to enjoin the Ivey plan is set Friday, May 14 in Circuit Court of Montgomery County at 9 a.m. Judge Greg Griffin will hear motions to dismiss filed by the state.
Zeigler is joined in the suit by three other plaintiffs – State Rep. John Rogers (D-Birmingham); Leslie Osborne, a property owner adjacent to the proposed prison site in Elmore County; and Rev. Kenny Glasgow, a prisoner rights activist from Dothan.
The plaintiffs allege that the plan violates the state constitution by creating state debt and violates a law requiring legislative approval to lease a prison.
