04/21/1999 KRTBN Knight-Ridder Tribune Business News: The Miami Herald
University of Florida professor Charles Thomas, who helped guide
Florida's entry into prison privatization and whose national report of industry trends analysts say can "greatly influence" the stock market, has earned a reputation the top expert in the field.
But as his reputation has grown, so has his bankbook: The professor, a $84,000-per-year academic, also was on the payroll of a private corrections company, commanding a $3 million consulting fee for a January 1999 merger involving Corrections Corporation of America.
State records also show he owned an estimated $660,000 in stock in four private corrections companies and is a member of the board of directors for Prison Realty Corp., a real estate investment trust formed to provide financing for private corrections facilities.
Complaints to the state Ethics Commission followed and last week, Thomas admitted to a conflict of interest between his work as a university
researcher and his personal financial stake in the outcome of privatization efforts.
In a signed document, he offered to halt his university research, pay a $2,000 fine and resign his position as director of UF's Private Corrections Project -- a research project financed with private donations from corrections companies -- in order to settle the complaints.
"This is an appropriate settlement," said Assistant U.S. Attorney Eric Scott, who acted as prosecutor for the ethics commission in this case.'
Five of Florida's adult prisons are privately run and 87 percent of the juvenile justice system is run by private companies. The state's push toward privatization, touted as a cheaper alternative to state-run facilities, began in earnest in 1993, when the Legislature created the Correctional Privatization Commission.
Mark Hodges, the commission's executive director, said the law creating the commission was written partly by Thomas, who then played a "very big" role in the first years of the commission.
"In this state and every other state, he's been the one to record the changes in the private prison industry," Hodges said. "He answered our questions, helped us understand what was going on the industry. His reports have been a clearinghouse of information."
Thomas was employed by the commission as consultant from 1994-97. Hodges said the commission ended his employment after the first ethics complaint was filed.
The research project also was financed in part by donations from private corrections companies. Stock analysts interviewed by ethics investigators said that Thomas' industry predictions could "greatly influence" the stock market.
Not every private corrections company was in Thomas' corner. George Zoley, chief executive officer of Wackenhut Corrections, called the professor's close financial relationship with CCA and others "most disturbing."