The demand, which covers invoices submitted to the state Department of Corrections between January 2017 and May 2020, is the second major financial reckoning MTC has faced in Mississippi. In 2021, the company paid back over $5 million to the state after White launched an investigation into staffing shortages at its Mississippi facilities.
Mississippi State Auditor Shad White on Monday demanded that Management & Training Corporation pay $7.4 million to the state for failing to maintain required staffing levels at two Mississippi correctional facilities, in what White called among the largest civil demands in the history of his office.
MTC, a Utah-based private prison company, manages the East Mississippi Correctional Facility in Meridian and the Wilkinson County Correctional Facility in Woodville, as well as numerous other prisons across the country. White said he has referred the matter to the attorney general’s office for enforcement after MTC failed to pay within the 30-day deadline required by Mississippi law.
The demand
The demand covers invoices submitted to the Mississippi Department of Corrections for the period of January 2017 through May 2020, according to letters sent to the company and obtained by Mississippi Today. The lion’s share of the requested funds stems from fines White levied against the company.
The demand letter for Wilkinson County Correctional Facility alone includes $3.1 million from the original fine and nearly $2.8 million in interest. Additional fines cover other facilities MTC runs or once ran in Mississippi, including the Marshall County Correctional Facility, which the state took over in 2021 due to staffing issues.
“I don’t care how big of an out-of-state company you are or how many campaign donations you make to the other politicians, if you owe taxpayers money because you failed to live up to a contract with government, we will demand you pay it back,” White said in a news release. “No free rides on the backs of taxpayers.”
A competing account
About an hour after White’s announcement, MTC said in its own press release that it had offered to pay $4.5 million on the preceding Friday — an amount the company described as representing fines “allegedly owed plus reasonable interest and costs.” MTC said White’s office chose to issue a press release rather than accept the offer.
Jacob Walters, a spokesperson for the auditor’s office, told Mississippi Today the offer was never received and would not have halted litigation regardless.
“To be clear, their offer was never sent to us, but if they want to cut a check today, by all means, we’ll deposit it in the taxpayers’ bank account immediately. Then we’ll ask the AG to sue them for the rest,” Walters said.
MTC disputed the auditor’s account. Michael Bell, vice president of MTC, said the company had acted in good faith throughout and attributed the interest charges primarily to delays and recalculations by the auditor’s office.
“We conducted our own review and voluntarily paid over $5.9 million. That’s what an honest partner does. It is deeply disappointing and fundamentally unfair to ignore our efforts to work with the Mississippi Department of Corrections to address the staffing challenges we both face in operating correctional facilities,” Bell said. MTC also cited difficulties brought about by the COVID-19 pandemic as a factor in its staffing shortfalls.
A long-running probe
White began investigating MTC more than five years ago after allegations arose that the company was not providing the prison staff required by its contract with the state. In 2021, MTC paid back over $5 million to Mississippi following that initial probe.
A 2020 investigation published in partnership with The Clarion-Ledger, Mississippi Today and The Mississippi Center for Investigative Reporting found that MTC had collected millions of dollars from the state by routinely charging the corrections department for vacant security positions the company was required to fill.
White, a Republican, did not single out any specific politician in his news release. MTC has donated to both Republican and Democratic elected officials in Mississippi, according to Mississippi Today.
Attorney general now involved
MaryAsa Lee, a spokesperson for Mississippi Attorney General Lynn Fitch, said the AG’s office first received the March demand letters on Monday and is in the process of reviewing them.
“We’re now turning this case over to the AG’s Office for enforcement to ensure accountability for taxpayers, and I hope they will litigate the case immediately,” White said.
MTC said that, with its settlement offer rejected, it “has no choice but to let this matter proceed to litigation.”