FBI issues subpoenas apparently linked to Florida Geo Group investigation

By Beau Hodai June 16, 2011 DBA Press

(DBA Press has obtained all subpoenas issued, as well as all materials sought from the Florida House and TEAM Santa Rosa by the FBI for the grand jury investigation. This material will be released in coming days.)

As previously reported by DBA Press (“Legacy of Corruption,” February, 2011), the Federal Bureau of Investigation has been quietly investigating the circumstances which led to the appropriation and construction of Florida’s largest private prison, Blackwater River Correctional Facility (Blackwater CF), operated by Florida-based private prison operator, Geo Group. Subpoenas issued by federal investigators in recent weeks indicate that a grand jury empaneled in U.S. District Court, Northern District of Florida is moving forward with the investigation.

On June 6, FBI Special Agent James Van Pelt issued two subpoenas to the Florida Legislature.

One subpoena, submitted to the Florida Office of Legislative Services, calls for submission to the grand jury of all travel vouchers submitted by former Representative Ray Sansom (R-Destin, Florida House District 4) and his former aides, Melanie Phister, Eric Edwards, Dort Baltes and Samantha Sullivan.

A second subpoena, again submitted by Special Agent Van Pelt, was issued to former Sansom district legislative assistant Samantha Sullivan (January, 2003 through March, 2009), currently serving as legislative assistant to Florida House District 4 Representative Matthew Gaetz (R-Fort Walton Beach).

The subpoena calls for Sullivan to appear before the grand jury and submit any and all records pertaining to her role as legislative aide to Sansom– particularly Florida Secretary of State Division of Elections forms DS-DE 48 and DS-DE 48A. The forms detail expenditures made from legislative expense accounts which draw from excess campaign finances.

In February, 2010, Sansom, while serving as speaker of the Florida House, resigned amid state criminal and ethics investigations– chief of which is the allegation that he falsified the 2007-2008 budget by inserting a $6 million appropriation into the state spending bill for the construction of an aircraft hangar for Destin businessman and prominent Florida Republican Party contributor, Jay Odom.

The apparent source of federal investigators’ current interest in Sansom lies outside of the Odom case in what may possibly be a much larger legislatively-mandated giveaway to yet another major Florida Republican Party contributor, Geo Group.

While Sansom and other Florida Republicans, as well as party donors, have been the subject of federal inquiries into the use of party funds (with federal authorities subpoenaing the party’s financial records on November 2, 2010), a third subpoena submitted by Special Agent Van Pelt suggests the grand jury investigation is aimed squarely at Sansom’s possible involvement with Geo Group in the development of Blackwater CF.

On May 11, TEAM Santa Rosa, the economic development arm of Santa Rosa County– which was instrumental in bringing Blackwater CF to Santa Rosa County– received a subpoena demanding all records (from January, 2002 to present) pertaining to “Project Justice,” i.e. any documents pertaining to the “planning, design, funding, appropriation, construction, and/or operation of any privately-owned correctional facility located in Santa Rosa County.”

According to TEAM Santa Rosa Executive Director Cindy Anderson, Van Pelt expressed specific interest in any and all documents pertaining to meetings with Sansom and copies of all records/communications pertaining to Geo Group.

According to documents released by TEAM Santa Rosa, Sansom and Senator Don Gaetz (R-Destin) had been discussing the idea of a new prison as a means of economic development (code name “Project Justice”) with TEAM members as early as February of 2008. At that time Sansom was serving as House budget chief under then-Speaker Marco Rubio (elected to the U.S. Senate in 2010).

Critics of these early meetings say they were conducted outside of state open meetings law and emails obtained from the office of Sen. Gaetz do show that TEAM had requested advice from the senator on how to deal with open meetings requirements.

While neither the FBI, nor the Department of Justice will comment on any aspect of the investigation, it is evident that investigators may be seeking to determine– through travel records subpoenaed from the House– what the purpose was for a trip Sansom took to Boca Raton (home to Geo Group’s corporate headquarters) on March 27, 2008.

According to travel vouchers filed by Sansom at the time, the trip was conducted for “personal business after session.”

Nevertheless, the juxtaposition of the trip in relation to events at that time is interesting.

On February 19, 2008, Geo Group Vice Chairman, President and Chief Operating Officer Wayne Calabrese, along with Geo Senior Vice President of North American Operations John Hurley, Geo Vice President of Business Development Cloid Shuler, and Geo lobbyist Damon Smith, delivered a presentation before the Florida Senate Committee on Criminal and Civil Justice Appropriations.

The presentation was straightforward, with two primary objectives: 1.) Geo would take on more prisoners and would discount per diem rates of incarceration of state prisoners in exchange for longer contracts with the state, and 2.) Geo sought appropriations for two expansions to one of their existing private facilities, Graceville CF, in the form of one 384-bed expansion, coupled with the development of a 1,500-bed “special needs annex” (for the “chronically mentally ill”) to the facility.

To illustrate the scope of this proposal, the Geo executives were essentially seeking to sell the Florida Legislature on an expansion of the existing Graceville CF (which contained 1,884 “beds” at that time) by up to an additional 1,884 additional beds. In exchange for this concession– as well as increased contract lengths at other existing facilities– Geo would offer the state a “discounted rate.”

On March 27, Sansom took his trip to Boca Raton, 400 miles south of his district– the only one of its kind from 2007 through 2010– on “personal business.”

While it is unclear what business Sansom had in Boca Raton, it is clear that he returned to Tallahassee and inserted a proviso in the initial draft of the 2008-2009 House General Appropriations Bill (filed with Policy and Budget Committee on April 4, 2008) which called for “$110,000,000 in non-recurring general revenue… for the planning, design, permitting, equipping and construction of a state-owned, privately operated 2,000 bed correctional institution… for the housing of 2,000 medium and close custody inmates as a stand-alone annex to the Graceville Correctional Facility in Graceville, Florida.”

On April 7, following the insertion of this proviso– which was never run by any committee for approval– Representative Curtis Richardson (D-Tallahassee) amended the budget to strike the proviso, as it was obviously a legislatively-mandated giveaway to Geo Group, operators of Graceville CF and owners of much of the land surrounding the facility.

Sansom responded on April 8, 2008 with a revised proviso stripped of all Graceville-specific language. In other respects the new proviso was identical: $110 million for a new 2,000-bed private prison to be constructed somewhere in the state.

This appropriation led the construction of Blackwater, which eventually cost the state somewhere in excess of $140 million, paid to Geo and Geo subcontractors– and which, according to the Florida Department of Corrections, at the time of its opening in late 2010, was unneeded due to slowed prison population growth in the state.

It is also worth noting that Sansom, while drafting appropriations provisions for what was to become Blackwater, was working closely with top Rubio economic advisor, Donna Arduin. Arduin had, until early 2007, served as a director of Correctional Properties Trust, a real estate investment trust with deep ties to Geo Group.

In a statement issued to DBA Press, Arduin denied that she has been subpoenaed or otherwise approached by investigators in relation to the ongoing Sansom/Geo grand jury investigation.

Geo Group spokesman Pablo Paez did not respond to requests for comment.

The office of Sen. Rubio did not respond requests for comment.

DBA Press will provide expanded coverage of this investigation as it progresses.