On Friday the 13th, two Pennsylvania juvenile court judges pled guilty to charges of jailing kids for cash. Judges Mark A. Ciavarella Jr. and Michael T. Conahan of the Luzerne County Court of Common Pleas entered guilty pleas to accepting $2.6 million in kickbacks from PA Child Care and Western PA Child Care in exchange for “referrals” dating back to 2003. During that time the judges adjudicated roughly 5,000 youths.
Many of the youths sentenced by the court were given jail time for minor offenses. One such case was that of Wilkes-Barre high school student Hillary Transue, who was sentenced to three months detention for a fake MySpace page poking fun at one of her principals. At minimum, hundreds of others, like Transue, had no priors, no records, and no serious history of criminal behavior—yet were sentenced to do time. In addition, the judges systematically impeded access to legal counsel and interfered “with the juvenile probation department’s ability to recommend probation over detention.”
Their actions appear to set a new low in the annals of American jurisprudence. According to the New York Times, Senior Judge Arthur E. Grim, appointed to help clean up the mess, said, “In my entire career, I’ve never hear of anything remotely resembling this.”
Build It and They Will Come
It seems to be a story of corrupt judges falling prey to the temptations of a for-profit jail system—more unregulated capitalism gone awry. But a review of the text of a civil suit filed on Saturday, the day after the guilty pleas were announced, reveals that the judges were actually…entrepreneurs. It turns out that Ciavarella and Conahan more or less initiated a conspiracy with PA Child Care co-owner Robert J. Powell and contractor Robert K. Mericle to:
- Close the county-run juvenile detention center
- Build a new privately run prison
- Fill the jail with kids
- Guarantee high-level occupancy of the new facilities
- Split the profits in perpetuity.
One agreement with PACC and WPACC, concluded in 2004, was worth $58 million worth of conviction referrals. It was later annulled as an unreasonable contractual obligation of government funds.
PACC and WPACC were co-owned for much of the decade by Powell and attorney Gregory Zappala, who worked for J.P. Morgan Securities as of 2008. Zappala bought out Powell’s interest in the two firms in June 2008. According to the Pittston Dispatch, the firms were under investigation by the FBI at the time of the sale.
Apparently, according to the civil suit filed by Michael J. Cefalo and Associates, of West Pittson, PA, it all began with conversations in June 2000 between the Ciavarella and Mericle to see who might be “interested in constructing a juvenile detention facility in Lucerne County.” Mericle was to locate the land, which Powell and Zappala subsequently purchased.
So let’s think about this. If you were a contractor and/or businessman who wanted to get into the private prison business, would you approach a judge with an offer of kickbacks for the scheme unless you knew in advance that the judge would be receptive to the proposal? I don’t think so. So Ciavarella seems to have had a strong entrepreneurial streak going for him.
Shell Game, Anybody?
The money spigot was turned on as of January 21, 2003, when Mericle wired $610,000 to an as yet unnamed attorney, who routed the money to Beverage Marketing of PA, Inc., owned by Conahan. And the spigot was never shut off until the U.S. Attorney’s office charged the judges with wire fraud and income tax evasion on January 26, 2009.
The co-conspirators set up an elaborate network of shell companies to transfer funds through a variety of conduits, all outlined in the suit, from Powell to Mericle and vice versa, then to the two judges in a scheme that dated back to 2002. In January of that year, Judge Conahan secretly signed a “Placement Guarantee Agreement” and a rental agreement with PA Child Care guaranteeing an annual rent in the amount of $1.3 million to be paid to the jailers. The agreement stipulated that the obligation of payment would be “complete and unconditional.” Then, in December 2002, Conanhan, then president of the court, withdrew funding for the county juvenile detention facility.
According to the civil suit filed on Saturday, the judges’ wives, Cindy Ciavarella and Barbara Conahan, were in on the deal as principals of a company called the Pinnacle Group, which received a good portion of the funds received by the two disgraced judges. On July 15, 2005 alone, Pinnacle received $1,000,000 transferred by wire from contractor Mericle Construction, Inc., the company that built the private detention centers.
Pinnacle booked ongoing payments as marine rental fees, slip rental fees and rent and lease charges.
Act Out on MySpace, Go to Jail
The Cefalo lawsuit was filed as a class action on behalf of plaintiff Florence Wallace. Her daughter, “B.W.,” who has been publicly named in news accounts of the case, was convicted at the age of 14 for making “terroristic threats” on MySpace. Her behavior was probably not nice, but certainly not out of a normal range of teenage infractions—the type that usually merit a slap on the wrist and a referral to counseling, diversion, or at most, probation. And B.W. had no prior criminal history.
B.W. was told prior to her hearing that she was facing a maximum of six months' probation but that if she tried to lawyer up she would be looking at four years—in jail. Her mother attempted to speak up during the proceedings and was told to “shut up or be held in contempt.” Upon conviction, B.W. was removed from the court in shackles. The child, who had o a pre-existing heart condition, was hauled off to Camp Adams for incarceration prior to psychological evaluation.
The suit demands $150,000 in compensatory and punitive damages in addition to legal and attorneys’ fees.
What Is Wrong with this Picture?
According to the February 13 Times article, the judges are “to be sentenced in the next several months.” The lawsuit indicates they may be facing terms of “more than seven years in federal prison.” Let’s say it’s seven. That means they could get out in four—exactly the same amount of time B.W. was threatened with for her MySpace chat infraction.
But here is the curious thing: the civil suit alleges racketeering and conspiracy. No charges have been filed against Powell, Mericle, or the wives. We have a comprehensive record of payments made from the for-profit jailers to the judges and their wives. And a February 11 audit report filed by the Pennsylvania Department of Welfare that I reviewed for this article highlighted a number of financial abuses by PACC and WPACC. The abuses include, “$533,125 in unsupported administrative fees paid to the principals of WPACC,” (Powell and Zappala) as well as $202,746 in questionable payments to them for a variety of other “services.”
Powell’s attorney, Mark Sheppard, contends Powell is the victim of an extortion scheme. Sheppard is quoted by the Times as saying, “ Bob Powell never solicited a nickel from these judges.” Indeed. It appears that what he solicited was their business.
Where are the other charges? Why the quick plea bargain? Who from the state court-system of Pennsylvania was providing oversight? Why didn’t anyone listen to the Juvenile Law Center of Philadelphia, which had raised questions for years? Who heard the protests of parents? Why no restitution? Where are the checks and balances against judicial conflict of interest? What about the local D.A.? The head of probation? The practice of sending first-time, minor-league youthful offenders to the pokey went on for over five years, but no one in a position of power thought to investigate until the Feds intervened in 2008.
It sounds like it was a good deal for all of the interested parties that Ciavarella and Conahan went quickly and quietly into that good night. No trial. No embarrassing testimony. No uncomfortable questions. Get disbarred, lose your pension, go to jail. Just quiet justice; the system at work behind the scenes. Don’t these kids and their families deserve a more complete accounting of what went wrong?
UPDATE -- April 2013
"Kids for Cash: Two Judges, Thousands of Children, and a $2.8 Million Kickback Scheme," by investigative reporter William Ecenbarger, was just published by The New Press. Good to know that four years after this blog post first appeared the case has not been entirely forgotten.