COLUMBUS, Ohio — An 11-year-old lock-up along the shores of Lake Erie in Ohio has become the first state prison in the nation to be sold to a private company.
Lake Erie Correctional Institution in northeastern Ohio's Ashtabula County is the only one of five state prisons up for sale that will be sold, state officials said Thursday. It's going to Corrections Corporation of America for $72.7 million.Story: Attack on prison guard renews phone-jam debate
The four other prisons for sale didn't generate advantageous offers.
Utah-based Management Training Corporation won rights to operate two facilities in Marion, Ohio, as a single prison camp; and a privately run state prison in Lorain County will be returned to state control.
Ohio will save an estimated $13 million annually with the moves, part of Republican Gov. John Kasich's budget-cutting efforts.
Policy group challenges sale
Selected firms will take over Jan. 1, pending the outcome of a lawsuit challenging the constitutionality of the state's move.
A liberal policy group that previously sued over Kasich's privatization of Ohio's economic development functions has filed a similar lawsuit challenging the privatization of state prisons.
ProgressOhio and several prison employees filed the action last week in Franklin County.
The lawsuit alleges selling state-owned prisons to private contractors is unconstitutional. It seeks to prevent the state from proceeding with the sales or to block layoffs. It also wants workers at privatized prisons declared public employees.
ProgressOhio Executive Director Brian Rothenberg says the suit is intended to preserve jobs and protect prison safety.
The Ohio Supreme Court dismissed a similar challenge to JobsOhio, Kasich's jobs board.
Private prisons have spotty history
Corrections Corporation of America (CCA), which purchased the Ohio prison, is the largest private prison contractor in the country, Mother Jones reported. While CCA is the first to buy a prison outright, it already operates 66 prison facilities in 20 different states. Its executive VP and chief corrections officer, Harley G. Lappin, is the former director of the Federal Bureau of Prisons (BOP), according to Mother Jones.
Around 40 percent of CCA's business comes from the federal government. Before Lappin left the BOP for CCA, he would have helped oversee contracts between the BOP and CCA worth millions of dollars, the Mother Jones report said.
In recent years, CCA has been blamed for injuries and even deaths in the prisons it operates.
At the Idaho Correctional Center, run by CCA in Kuna, Idaho, surveillance video showed an inmate suffer an attack at the hands of a fellow prisoner, as correctional officers looked on.
The video from the overhead cameras shows Hanni Elabed being beaten by a fellow inmate, managing to bang on a prison guard station window, pleading for help. Behind the glass, correctional officers look on, but no one intervenes as Elabed is knocked unconscious.
Hours after the video was published, the FBI launched an investigation into whether guards violated the civil rights of inmates at the prison.
CCA Spokesman Steve Owen said at the time that the company is cooperating with federal agents, as it has with other law enforcement agencies overseeing the prisons.
Lawsuits from inmates contend CCA denies prisoners medical treatment as a way of covering up the assaults. They have dubbed the Idaho facility "gladiator school" because it is so violent.
Problems with other companies
Meanwhile, Management and Training Corp., which is set to take over operations at two of the Ohio prisons, has been criticized over an escape from one of its other facilities, the Dayton Daily News reports.
Three convicts escaped from Arizona State Prison Complex in Kingman, Ariz., operated by Management and Training Corp., in July 2010. An investigation found that the escape set off alarms, but guards ignored them because of previous malfunctions, according to the Dayton Daily News.
Two of the convicts killed an elderly Oklahoma couple before they were captured.
"Anything can happen in a correctional facility if you don't have the proper procedures in place," Ohio prisons spokesman Carlo LoParo said in an interview with the Dayton Daily News. "There has to be constant vigilance from the Department of Corrections to make sure safeguards are in place. That situation will never happen in Ohio because of our policies and procedures."
The Associated Press and msnbc.com staff contributed to this report.