CEC Investigation: Our Legislators Take Action – Part VII

After years of groups and individuals raising warning signs about problems in halfway houses, the issue was placed in stark relief in a N Y Times devastating series of articles Unlocked by Sam Dolnick. On Thursday the Senate Legislative Oversight Committee chaired by Bob Gordon (D-37) and vice-chaired by Barbara Buono (D-18) will hold a hearing. On Monday the Assembly Law and Public Safety Committee chaired by Charles Mainor (D-31) and vice chaired by Gilbert Wilson (D-5) will hold another hearing. The goals are to understand the problems and bring about solutions.

The Problems: Past articles in the Blue Jersey CEC Investigation series have highlighted serious improprieties regarding halfway houses – particularly those of Community Education Centers (CEC), which last year received $71 million out of $105 million in government expenses. It is a story of CEC’s Founder John Clancy who used a dubious agreement from a prior Attorney General to set up a shell non-profit company and then through large political contributions, lobbying, PR, a well connected legal VP, and friendship with a U.S. attorney and later governor to create a large corrections corporation. With insufficient monitoring from the Department of Corrections (DOC), this company ran facilities that bred an atmosphere of inmate drugs, escapes, violence, gangs, rapes, and deaths. With unqualified staff, security was compromised, the public at large was placed in danger with unnecessary escapes, and the goal of helping to reduce recidivism was given short shrift.

Christie confidante and CEC Senior Vice President, William Palatucci aided, abetted and defended CEC. Governor Christie as a lawyer at Dughi and Hewitt, as U.S. Attorney, and later as governor at a minimum praised and enabled the activities of CEC. He failed to implement remedies that other more responsible parties were calling for over the years, and he may have done so willfully and improperly. Now we are at the point where the valid role of halfway houses is being discredited, and the largest company in New Jersey is facing such severe financial problems that the DOC might need to take over at a moment’s notice thousands of inmates lodged annually in CEC facilities. CEC failings are not confined to NJ DOC contracts, but extend to those held by NJ local governments and such states as Texas, Alabama, and Colorado.

There are numerous solutions. The agreement that allowed CEC to use a non-profit organization as a front, in contravention to established regulations, should be ended for any future contracts and possibly existing contracts. CEC was able to build a monopolistic position, and it is now time to enable legitimate non profits to compete fairly for DOC contracts small and large. The Boxer audit laid out key recommendations for remedies, and it is essential to establish what progress DOC has achieved so far and to assure the recommendations are met. Dangerous inmates should not be lodged in halfway houses. The security and living conditions of inmates need to be improved. Process measures must be established to assure that the goals of reducing recidivism through drug treatment, job readiness, and other skills preparatory to re-entering the general population are being well administered. More qualified staffing is important. Pay-to-play regulations urgently need strengthening. People like Governor Christie should be disabused of the notion that privatization brings huge savings, as previous studies have shown that such savings are scant. Goals should include integrity, safety, and reducing recidivism not an elusive search for savings.

Below the fold are suggestions for some of the individuals who should testify and what questions legislators might ask the individuals.


Comptroller Matthew Boxer – He can outline his findings and recommendations from his report of June 2011 and address any correspondence and outcomes following the report. Was access to data that  would have revealed CEC’s financial distress withheld?

DOC Commissioner Gary Lanigan – As a basis to understand DOC’s management of halfway house contracts, it is important to obtain DOC contracts, monitoring report, correspondence, and actions taken before and after the Boxer audit to determine the responsiveness of DOC and CEC to the audit recommendations. Were genuinely unannounced visits carried out? When did fines for misperformance start? Have escapes, violence, drugs, and gangs been reduced? Is there a better policy to assure dangerous criminals are not lodged in halfway houses? What are the performance measures being used to determine the success rate of programs designed to reduce recidivism? What has been done to recruit and train better staff?  What plan does DOC have to manage residents in CEC custody if CEC’s financial distress results in poorer performance or bankruptcy? What programs/policies does DOC have to encourage and assist other groups in applying for halfway house contracts in view of the monopolistic, well-connected, lobbying, and patronage capabilities of CEC?

Attorney General Jeffrey Chiesa – Legislators should ask for the AG’s agreement or ruling in the mid 1990’s and correspondence between the offices of the AG, Dughi and Hewitt law firm and  and CEC, which allowed CEC’s creation of Education and Health Centers of America as a “non-profit” to contract with DOC and pass revenue on to CEC. The Boxer audit questioned whether such an an agreement was proper and asked for an updated ruling on the matter. As Chris Christie was a law firm member, he may have been involved in drafting the agreement but he was not governor at the time and correspondence from him would not fall under Executive Privilege.

CEC Founder John Clancy, Vice President Willam Palatucci, former Treasurer, Frank English, and curent Chief Financial Officer Michael Hellriegel – These individuals should be questioned about CEC’s current financial position and whether it withheld pertinent data. More important as a State contractee, CEC must be required to turn over financial records for the entire company. The same questions suggested for Commissioner Lanigan regarding CEC’s actions over the past few years apply, including data and statistics on escapes, violence, deaths, staff training, security, and inmate counseling.

Getting to the bottom of the problems may well necessitate the use of OPRA.

Other individuals who could be asked to attend could include the Executive Director of other Halfway houses, such as the Association on Corrections, individuals from law and academia, such as John  Jacobi.

Previous articles in Blue Jersey’s Series CEC Investigation are available here.

Comments (2)

  1. sayitaintso

    don’t you read Blue jersey? whadda you, the Star-Ledger editorial page?  


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