The private company that runs Delaware County's prison has been through this before - prisoner deaths, legal complaints, threats of replacement.
In the past, in 2006, for example, when the county sought rival bids, officials ended up renewing the contract with the
Geo Group Inc.
, adding a few hundred thousand dollars to Geo's monthly fee to keep up with rising costs.
Private-enterprise advocates said taxpayers were getting a break, compared with what Pennsylvania's 66 other counties pay to run their own lockups.
But this time, Geo says it's walking away.
Last week, the Boca Raton, Fla., company formerly known as
Wackenhut Corrections Corp.
(for its founder,
, who grew up in Upper Darby) said it would stop running the 1,900-bed Delaware County prison it built in 1996 at the end of this year - halfway through a two-year, $38-million-a-year contract extension.
That left the county scrambling to find someone else to manage the inmates, many with costly health and mental-health problems.
, chief executive officer of Geo, blamed "financial underperformance and frequent litigation" at Delco's
George W. Hill Correctional Facility
in his statement.
But Geo also said the walkaway would have no "material impact" on his company. And Geo's recent public filings don't mention legal or fiscal problems at the prison, which accounted for roughly 4 percent of Geo's sales last year.
Zoley did acknowledge, in a May 1 conference call with investors, that the Commonwealth of Pennsylvania had canceled Geo's proposal to manage two 100-bed state facilities. That contract could have brought in $40 million a year, according to another company document.
Why did Pennsylvania ask for a Geo proposal, then rip it up? "We believe this decision may have been influenced by the increased political focus on Pennsylvania due to the Democratic presidential primary election," Zoley said in the May 1 call. At that time, he was still hoping for other Pennsylvania contracts.
State Rep. John Perzel
(R., Phila.) joined publicly traded Geo's board in 2005, when he was the influential speaker of the state House of Representatives. He's now speaker emeritus, a less powerful position.
Perzel collected $154,000 in director fees, stock and other compensation from Geo last year, according to Geo documents. That's more than double his state salary of $76,000.
Given his unique dual insider status, we expected Perzel might have some insights about why the state turned Geo down, and why Geo is leaving Delco.
said Perzel had no comment. Geo spokesman
also declined comment, beyond what's in the filings.
LLR in buyout
Hard-pressed banks are selling assets to raise cash, and yesterday
LLR Partners Inc.
, Philadelphia, grabbed an arcane opportunity.
LLR has joined
, of San Francisco, and managers at
SunTrust Banks Inc.
in a buyout of SunTrust's
L.L.C. unit and its holding company,
Corp., which specializes in charge cards for truck fleets.
called it "a strategic sale of a noncore business." Like other big banks, SunTrust has lost half its share value since last year. The bank's capital reserves are under pressure, said
in a report to clients yesterday.
Neither side will say what LLR and its partners are paying. LLR, a $1.4 billion affiliate of Ira
Lubert's Independence Capital Partners
, typically makes investments valued between $10 million and $75 million.
said Fleet One fit with his firm's earlier investments in card-related companies - an asset this region has in abundance, thanks to Wilmington's status as the world's credit card capital.
He hopes to repeat earlier investments in firms such as
Heartland Payment Systems Inc.
, of Princeton, whose stock rose eightfold between LLR's 2001 investment and its 2007 share sale.
Hollin said he would keep Fleet One
CEO Andy Roberts
and his colleagues in place. The group employs 200, mostly in Nashville.
It's a small world for LLR's kind of investments: Hollin knew Roberts at his earlier employer,
Harmonic Systems Inc.
, which Hollin backed financially while he was at
in 1996 to 1999.