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AUSTIN HOLIDAY County Attorney David Williams, concerned with the legality of such contracts, asked for the attorney general’s opinion on the matter on May 31, but retracted his request 20 days later because a Drexel Burnham representative told San Saba officials that the deal was off as long as the letter was on file, according to the San Saba News. Williams wrote in a July 19 letter to the San Saba County Commissioners Court: “I am informed by numerous people associated with this project that the project is in jeopardy because of the pending request. A number of interested citizens and several public officials have requested me to withdraw my opinion request. Others have encouraged me to stay the course. The attitudes of this community have presented me with the greatest moral dilemma of my career to date.” While it seems that seeking out-of-state prisoners was at least considered, N-Group President Pat Graham denied that he ever intended to do so. Glenn Smith, an N-Group partner, said the company wants to be incorporated into the state system; in fact, they recently made a proposal to house state prisoners in their facilities to the state of Texas, in addition to the Federal Bureau of Prisons. However, members of the prison board say they haven’t been impressed with the performance of the four facilities they contracted out to companies; more than a few, including Chairman Selden Hale, have openly opposed incorporating the N-Group jails. Armbrister told the Observer that former Texas House Speaker Billy Clayton, an N-Group lobbyist, asked him to slip in an amendment to automatically make all private facilities built under a contract with a county a part of the state Board on Pardons and Paroles. Armbrister said he refused the amendment because he has heard “floor talk” among members that didn’t reflect too well on N-Group. “I was not going to jeopardize the bill for that,” said Armbrister. Although N-Group told county officials they would only bring in minimumor me dium-risk prisoners, they built all six facilities to maximum-security standards. In its attempts to win contracts, N-Group could resort to using high-risk inmates to maintain their quotas it wouldn’t be the first time such a tactic has been employed by the private prison industry. Early last year, New Mexico officials discovered that out of a group of “low-risk” inmates sent by the state of Oregon to a minimum-security facility in Santa Fe managed by Corrections Corporation of America, eleven were murderers, seventeen were rapists, seven were found guilty of armed robbery, and seven had escape records. According to the Albuquerque Journal, CCA claimed they had relied on Oregon’s classifications. Steve Martin, a prison reform advocate and co-author of Texas Prisons: The Walls Came Tumbling Down, said if HB 841becomes law, Texas should prepare for the importation of high-risk criminals. “There are no limitations on the quality, kind, and number of prisoners..It reduces the confined person into an economic commodity,” said Martin. “Other states will send their worst criminals, and you’ll get a tough, sophisticated population in Swisher County, which now gets an occasional bank robber. That’s a prescription for some problems.” FTER COUNTY and city officials pressured him to withdraw his request for an attorney general’s opinion, Williams wrote a letter to other county attorneys expressing his frustrations. “What I see here is what naturally happens when otherwise limited small county governments try to take on something they were never elected to do,” he wrote. Williams predicted a “major scandal.” Before the primary elections, N-Group gave the Mark White Campaign for Governor a total of $225,000, according to Secretary of State records. Pricor CEO Hubert McCullough and H.A. Lott, the construction company that was awarded $8 million to build the N-Group facilities, each gave $25,000 to the pot. This year, the Dallas Morning News reported that N-Group PACs gave $10,000 to Ann Richards, $25,000 to Bob Bullock, and $10,000 to Dan Morales in post-election contributions. Besides White and Clayton, N-Group hired Glenn Smith, Ann Richards’ gubernatorial campaign manager, as a lobbyist. Charles Terrell, insurance executive and former chair of the Texas Department of Criminal Justice board, introduced Smith to key legislators. Terrell told the Dallas Morning News he wasn’t involved with N-Group, but admitted he was interested in their $6 million insurance contract for the six prison units. N-Group Securities’ motto is “We have the jail problem under wraps.” Since the attorney general’s office now says it’s investigating the company for possible contract bidding violations and antitrust activities, time will tell whether N-Group has anything else covered up. Ron Dusek, spokesperson for the attorney general, declined to give details except to say that the inquiry started about a month ago. In addition, Richard Barrajas, Pecos County District Attorney, instigated a grand jury investigation recently to see whether N-Group broke the law by awarding contracts without the competitive bidding process required of public entities to Pricor and Lott, which were listed as N-Group’s designated jail operator and builder as early as August 1989. It’s unclear whether the Jail Facilities Financing Corporations, created by as public or private entities. Besides possible antitrust problems, NGroup has been criticized for actions that are legal, but appear highly suspicious. According to the Dallas Morning News, it offered to pay county attorneys to review bond contracts made with their own non-profit corporation. It also offered each county sheriff up to $20,000 in a consulting contract to evaluate another county’s N-Group jail facility. Finally, Pricor’s professed interest in hiring Jerry Falwell’s Liberty University to run its Bob Cunningham Detention Facility of Falls County 6 MAY 3, 1991