Development Scheme

Hardin, Mont., population 3,500, is just 15 miles northwest of the Little Bighorn Battlefield, a national monument honoring the hundreds of U.S. soldiers and Cheyenne and Lakota Indians who died in 1876 fighting over this now largely forgotten land. With unemployment above 10 percent and the county's poverty rate at twice the national average, Hardin's town leaders have long been desperate to create jobs and fuel economic development. As with many hard-luck towns in the dusty Northern Plains, these days, the only thing anyone passes through Hardin for is a glimpse of the distant past.

So when a group of private investors, represented by out-of-state brokerage firms, agreed to finance a private prison in Hardin in 2006, it seemed like a no-brainer to the town's economic-development arm, the Two Rivers Authority. A private prison developer had approached state officials in 2004, seeking work in the state, and was later referred to Hardin by the state's Commerce Department, according to Paul Green, who headed the Two Rivers Authority at the time. Around the time Hardin began talks with the prison developer, the state was projecting dramatic growth in its prison population, a fact Hardin economic-development officials say they weighed when they decided to move forward with the deal. Bob Anez, a spokesman for the state's Department of Corrections, acknowledged that in 2005, gripped by the methamphetamine epidemic, the state projected as much as an 8 percent growth in male prisoners and a 27 percent growth in female prisoners. But Anez said that such projections, a budgeting tool, are not reliable, since the state aims to keep costs as low as possible and is always looking for cheaper alternatives to incarceration. Anez said the state, which also elected a new governor in 2005, never promised Hardin prisoners.

 

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A few years later, deep into a recession that is causing states to dramatically cut prison budgets—including Montana, where the new administration has made reducing the prison population and prison-related costs a top goal—the 464-bed Hardin jail sits empty, and the town is worried that its creditors will soon foreclose on the property because they have not been paid back. The underwriters representing investors in the deal declined to comment for this story, but four Two Rivers officials separately told NEWSWEEK that Hardin will not likely have to pay anything back if the property is foreclosed on, though the town's municipal-bond rating will be destroyed and it will lose control over what becomes of the facility. Last spring, Hardin, desperate to fill its prison and bring in jobs, was one of four towns across the country to volunteer to house Guantánamo detainees. The town made worldwide headlines (including on Al Jazeera English, which described Hardin's streets of "empty storefronts, shabby houses, [and] intoxicated men") after essentially begging to house the alleged terrorists. The townspeople, eager for work, were sanguine about the idea, but the state's congressional delegation wouldn't have it.

Shortly after becoming famous for offering to host accused terrorists, Hardin thought it had finally found salvation when the economic-development board was approached by a mysterious security company that billed itself as "America's Private Police Force (APPF)." A Two Rivers board member recently told the Associated Press that under the recently signed contract with Hardin, APPF promised to pay off the cost of the prison and give the town an additional $5 a day per inmate, money that would go back to economic development in town. However, after a series of revelations about APPF's public face, Michael Hilton, and his allegedly fraudulent past, the deal between Hardin and the company fell through late last week. APPF did not ask beleaguered Hardin officials for any money. The contract APPF signed with Hardin was never approved by the investors who paid to build the prison, but that hadn't stopped APPF from moving into the empty jail and promising town officials millions in sweeteners, including an APPF-run police force (the town is too poor to pay for its own), a new military and law-enforcement training center, an animal shelter, a homeless shelter, and a free health-care clinic.

The fact that the Two Rivers Authority and its board—made up of town leaders, including the superintendent of schools, the owner of the local State Farm insurance office, and a town dentist, among others—went for APPF's pitch is a testament to their anguish in the face of Hardin's struggles. APPF first caused a stir in Hardin when company officials arrived last month, including a man wearing a black military-style uniform who introduced himself only as "Captain Michael." The public face of APPF, Hilton (a.k.a. Captain Michael) had long told Hardin officials he was backed by a highly regarded private-security company. The name of that company has not yet been publicly revealed. Upon arriving, APPF immediately outfitted the city with a fleet of Mercedes SUVs decorated with City of Hardin Police emblems.