Jim Zeigler v. Kay Ivey suit on prison lease plan dismissed
A circuit judge has dismissed the lawsuit filed by four plaintiffs seeking to block Gov. Kay Ivey’s prison lease plan. After a hearing Friday, Judge Greg Griffin ruled today that the suit cannot go forward and dismissed it. The suit alleged that the $3.6 billion prison lease plan is illegal because it was not approved by the legislature. State Auditor Jim Zeigler, the lead plaintiff, made this statement: “We are studying the Judge’s order. We will make a decision this week on whether to appeal. We will continue our fight to block the prison plan by raising issues that would cause potential investors to withdraw. We believe that investors see the fatal flaws in this plan and will not touch it with a 10-foot pole.” The three underwriters for the plan have withdrawn — Barclays, KeyBank and Stifel. The plan would contract with three consortiums of private businesses, two led by CoreCivic of Nashville. The contractors would pay to build three super-prisons in Bibb, Elmore and Escambia Counties of Alabama. Two of the contracts were signed Feb. 1 with the one in Bibb County pending. “The Ivey plan would force Alabama taxpayers to pay rents starting at $94 million a year and going up to $106 million. At the end of 30 years, the state would own equity in the prisons of zero. No equity. This is a bad business plan,” Zeigler said. “The Ivey plan does not address the problems in the prison system – safety of staff and other inmates; overcrowding; mental health; suicide; recidivism; and inadequate job training. The plan merely throws over $3.6 billion of taxpayer money into rented buildings,” Zeigler said. Zeigler (R-Mobile) is joined in the suit by three other plaintiffs – State Rep. John Rogers (D-Birmingham); Leslie Osborne, a property owner adjacent to the proposed prison site in Elmore County; and Rev. Kenny Glasgow, a prisoner rights activist from Dothan.
Email Insights: Bloomberg confirms last underwriter out of Kay Ivey prison lease deal
Alabama State Auditor Jim Zeigler says the last underwriter for financing an Alabama prison lease plan has backed out. Zeigler, a vocal opponent of the plan, says it “should be pronounced dead.” Stifel Bank of Cleveland, Ohio follows the two lead underwriters which withdrew from the project April 19 – Barclays of London and KeyBank of Cleveland. The project was to be led by CoreCivic, a Nashville firm in the private prison business. Stifel’s Senior Vice President of Investor Relations, Joel M. Jeffrey, said in an e-mail Monday, May 10: “…this transaction has already been withdrawn from the market. Further, you should understand that Stifel is no longer engaged with CoreCivic, any conduit, or the State of Alabama regarding the financing of the project.” Bloomberg News confirmed the contents of the email and that Stifel is out of the Alabama prison lease project. The plan would contract with three consortiums of private businesses, two led by CoreCivic. The contractors would pay to build three super-prisons in Bibb, Elmore, and Escambia Counties of Alabama. Two of the contracts were signed Feb. 1 with the one in Bibb County pending. “The Kay Ivey plan would force Alabama taxpayers to pay rents starting at $94 million a year and going up to $106 million. At the end of 30 years, the state would own equity in the prisons of zero. No equity. This is a bad business plan,” Zeigler said. “The Ivey plan does not address the problems in the prison system – safety of staff and other inmates; overcrowding; mental health; suicide; recidivism; and inadequate job training. The plan merely throws over $3.6 billion of taxpayer money into rented buildings,” Zeigler said. A bipartisan lawsuit seeking to enjoin the Ivey plan is set Friday, May 14 in Circuit Court of Montgomery County at 9 a.m. Judge Greg Griffin will hear motions to dismiss filed by the state. Zeigler is joined in the suit by three other plaintiffs – State Rep. John Rogers (D-Birmingham); Leslie Osborne, a property owner adjacent to the proposed prison site in Elmore County; and Rev. Kenny Glasgow, a prisoner rights activist from Dothan. The plaintiffs allege that the plan violates the state constitution by creating state debt and violates a law requiring legislative approval to lease a prison. (Please see E-mail below to opponent of the Ivey prison lease plan) As we have communicated, we are interested in your perspective generally and specifically regarding the correctional system in the state of Alabama. With respect to your request that Stifel withdraw from the former transaction led by Barclays, we note that this transaction has already been withdrawn from the market. Further, you should understand that Stifel is no longer engaged with CoreCivic, any conduit or the State of Alabama regarding the financing of this project. As a matter of professional conduct, we endeavor not to discuss prospective or hypothetical transactions, and, to avoid misunderstanding, we will not do so on Tuesday. If you want further information on this specific project, you should reach out to the appropriate person in the government of the State of Alabama. That aside, we look forward to our call. Sincerely, Joel M. Jeffrey Senior Vice President STIFEL | INVESTOR RELATIONS
