Wednesday, April 2, 2014

Kids for Cash (2003-2014)

Poster for the Kids for Cash documentary, released February 2014
In 2008 it was discovered that real estate developer Robert Mericle and the owners of two private, for-profit prisons, Pennsylvania Child Care and Western Pennsylvania Child Care, Robert J. Powell and Gregory Zappala, paid $2.6 million in kickbacks to a pair of judges, Michael Conahan and Mark Ciavarella, in exchange for the closure of the a publicly owned detention center and imposing harsh sentences on juveniles to be served in the private facilities. When it all came crashing down, Powell, Conahan, and Ciavarella were sentenced to prison. Mericle, having testified in another corruption case, is facing sentencing in the Kids for Cash scandal on April 25, 2014. Zappala escaped prosecution in this case. It isn't known if this is because Zappala truly did nothing wrong or because his connections.

Mark Ciavarella, one of the judges
involved in the Kids for Cash Scandal

Stakeholders in this controversy range from the builder, Robert Mericle, to the co-owners of the private prisons, Robert J. Powell and Gregory Zappala, to the facilities, to the former Judges, Michael Conahan and Mark Ciavarella, to the affected juveniles, and the general public's loss of faith in the judicial system.
Mid Atlantic Youth Services is the parent company of Pennsylvania Child Care and Western Pennsylvania Child Care, a pair of private, for-profit juvenile corrections facilities co-owned by Robert J. Powell and Gregory Zappala. Both facilities were constructed by Robert Mericle's construction company. Pennsylvania Child Care operated the Pittston Township Detention Center in Luzerne County, PA. Western Pennsylvania Child Care operated a similar facility in Allegheny County, PA. In the three years between 2006 and 2009, Western Pennsylvania Child Care "won" $3.7 million in public contracts.
Robert Mericle, builder and real estate developer is the principal of Mericle Construction. Mericle delivered the bulk of the kickbacks to the judges, nearly $2 million. By paying kickbacks to the judges to keep the detention centers built by his company filled to capacity, it increased the likelihood that his company would win a lucrative contract to build more juvenile detention centers.
Robert J. Powell is an ethical study unto himself. A successful trial lawyer by trade, Powell eventually broke into lucrative government work amid rumors of quid pro quos and campaign contributions. From 1995 until 2002, Powell earned $150,000 providing legal work for the county. During this same period he made $12,400 in campaign contributions to Democratic Majority County Commissioner candidates. In 2001, an ethics complaint was filed against Powell claiming he was hired for county bond work without a public vote. Powell was also at the center of a controversy surrounding the leasing of a building to Pennsylvania Child Care while serving as County Planning Commission Solicitor, a clear conflict of interest. Powell kept his involvement in Pennsylvania Child Care hidden until an investigator discovered the connection on mortgage documents in 2002. Powell repeatedly ignored both written and verbal notices to file the requisite financial disclosure forms as required by the rules promulgated by the State Ethics Commission.
Michael Conahan, the other judge
involved in the Kids for Cash scandal

Powell's co-owner in the private prison venture, Gregory Zappala escaped prosecution in this case. This outcome is less likely due to Zappala's lack of criminal wrongdoing and likely attributable to Zappala's own political and judicial connections. Zappala's father, Stephen Zappala, Sr. is a former Chief Justice of the Pennsylvania Supreme Court who has been accused of receiving bribes from pro-gambling groups. Zappala's brother, Allegheny County District Attorney Stephen Zappala, Jr. tried juveniles in Allegheny County where, if convicted, they would be sentenced to Western Pennsylvania Child Care, co-owned by his brother. Gregory Zappala's consulting firm was the recipient of $500,000 in consulting fees paid by Western Pennsylvania Child Care. Additionally, Western Pennsylvania Child Care sent Greg Zappala on a $4,500 fishing trip in Florida. In 2008, amid growing rumors of a federal investigation, Robert J. Powell sold his interest in Pennsylvania Child Care to Greg Zappala. Senior Judge Michael Conahan is described as the behind the scenes power broker in this scandal. It was on Conahan's authority in 2002 that a county owned facility, the aging North River Street Detention Center, was defunded. Beginning in 2003, convicted juveniles were sent to Pennsylvania Child Care's Pittston Township Detention Center. Conahan also agreed to provide the facility public funding to the tune of $1.3 million per year. When caught, Conahan was undeniably contrite. After undergoing therapy, Conahan claims his father shaped his casual ethical outlook. The senior Conahan, while serving as the Mayor of Hazleton found himself embroiled in an ethical quandary when he attempted to steer a city contract towards a friend. President Judge Mark Ciavarella did most of the legal dirty work in this scandal. That is to say, this disgraced judge presided over the bulk of cases in question. In 2003, Ciavarella began receiving kickbacks from Mericle. Ciavarella was known for failing to inform juveniles of their right to legal representation, rendering verdicts in less than three minutes, and sentencing juveniles to serve time in the private facilities for offenses as trivial as mocking a school principal on Myspace. To this day, Ciavarella contends he did not accept illegal kickbacks, but rather finder’s fees. During this scheme's life, from 2003 to 2008, some 2500 juveniles were affected by the kickbacks paid by Mericle and Powell to Conahan and Ciavarella. Public faith in the judicial system was shaken by this controversy and serves as an excellent example as to why privatization is not the answer to strained public budgets. The United States of America is a nation of laws where justice is allegedly blind. For this to remain the case, private corporations must not be able to influence the judiciary to compromise themselves for the sake of a buck. In this case, Conahan and Ciavarella were already earning salaries of nearly $160,000.00 but that didn't stop them from letting Mericle and Powell pay for justice to be anything but objective. The Juvenile Law Center uncovered much of this scandal. It was prompted by a frantic call from a distraught mother in 2007. In conducting an investigation they quickly learned that Ciavarella sentenced juveniles to confinement at twice the state average. Of juveniles appearing before Ciavarella, 50% lacked legal representation. Of those, 60% were sent to facilities owned by Powell and Zappala. In 2008, the Juvenile Law Center's petition to vacate the adjudications of delinquency and expunge the records of juveniles appearing in Ciavarella's courtroom was initially denied by the Pennsylvania Supreme Court. The following year saw the petition granted as the actions of Conahan, Ciavarella, Powell, and Mericle came to light. All cases in which Ciavarella presided over a juvenile between 2003 and 2008 were dismissed with prejudice, all of the convicted juveniles' records were expunged. In partnership with the law firm of Hangley Aronchick Segal Pulin & Schiller, the Juvenile Law Center has filed a federal class action lawsuit on behalf of the victims and their families.

Milton Friedman's philosophy of Individualism contends that maximizing profits while acting within the confines of the law is the only ethical course of action for a business. Had kickbacks been legal, Friedman would take no issue with the conduct of Mericle and Powell, they were simply trying to optimize the profitability of their private prison. However, in offering kickbacks to Conahan and Ciavarella, Mericle and Powell failed Friedman's test of ethical conduct. This failure is not a consequence of their desire to make money, rather a consequence of their willingness to break the law in pursuit of money.

Luzerne County Courthouse in Wilkes-Barre, PA
John Stuart Mill first advanced the concept of Utilitarianism in 1861. Simply put, Utilitarianism is an ethical philosophy that concerns itself with considering which actions would contribute to the best overall outcome for all parties involved. In the circumstance of the Kids for Cash scandal, Mericle and Powell maximized their happiness and the happiness of the Conahan and Ciavarella at the expense of the happiness of the wrongly adjudicated juveniles. While the 20th century American rock vocalist Meat Loaf would proclaim, "Two Out of Three Ain't Bad," the 19th century philosopher, Mill would reject this claim faster than a bat out of hell and condemn the actions of Mericle and Powell.

In the waning years of the 18th century, German philosopher Immanuel Kant developed his namesake school of ethical thought, Kantianism. Kantian Ethics can be best distilled as doing the right thing for no other reason than because it is the right thing to do. Kantianism emphasizes the importance of rational thought, universality, respect for humanity, and acting from a place of respect. It comes as no surprise then, that the conduct of Mericle and Powell in paying kickbacks to Conahan and Ciavarella falls well short of the Kantian standard. What would the world be like if every private corporation paid kickbacks to the judiciary? It would reduce the judiciary to nothing more than a joke as judges wouldn't be dispensing justice but protecting profits. Legal cases would be reduced to folly. If everyone paid judges to ensure their profitability, then we'd find ourselves living in a country where people are arrested, tried, and convicted in less time than it takes to order a pizza. Simply put, the legal system and in turn the country would devolve into absolute chaos. It's quite clear that Mericle and Powell considered juveniles as a means to an end. Juveniles are tried and convicted, their facilities are filled, and they get richer in the process. Mericle, Powell, Conahan, and Ciavarella never looked at these kids and thought of them as people. More likely, they looked at these kids and saw dollar signs.

Virtue TheoryBased on the teachings of Aristotle, Virtue Theory examines what exactly makes something good. Virtue Theory is comprised of four elements: Courage, Honesty, Temperance, and Justice. In this context, courage is not only a proclivity for risk-taking but also the readiness to take a stand and fight for that which is right. Ever self explanatory, honesty pertains to being upright in all business dealings. Temperance calls for moderation in both expectations and wants of the businessperson. Justice demands that every aspect of one's business affairs be fair. Mericle and Powell certainly demonstrated their willingness to take risks in engaging in the Kids for Cash kickback scheme but it was done at the expense of what was right. Not interfering with legal proceedings would've been the right thing to do. They chose not to. Of course, this scandal was blatantly dishonest. If there were such a demand for private detention centers, it should have been revealed by the demands of the market, not by the millions of dollars given to the judges to create the demand. The actions of Mericle and Powell lacked temperance in the sense that their expectations of success lacked moderation. They did not manage their desires, they went out of their to ensure that their unchecked desires were satiated, regardless of the cost or consequence. Mericle and Powell had no concern for justice in their dealings. The kickbacks they paid to Judge Conahan in particular was the antithesis of fairness. Remember, Conahan was the judge whom closed the public facility and steered millions of dollars worth of contracts to Powell's businesses. As demonstrated, Mericle and Powell completely failed to satisfy the requirements of Virtue Theory.

In December 2008, Michael Conahan retired from public service and began collecting his public pension. That is, until February 2009 when he agreed to a plea deal admitting his guilt in the kickback scandal. In August of 2011, Conahan was sentenced to serve 17.5 years in federal prison. Mark Ciavarella also attempted to retire and collect his pension however the state pension system denied is claim. He also forfeited $234,000 in his own retirement contributions. Ciavarella was sentenced to serve 28 years in federal prison. Both Conahan and Ciavarella were also ordered to pay more than $874,000 in restitution. Robert J. Powell served as a witness for the prosecution in the case against Conahan and Ciavarella. He was sentenced to 18 months in federal prison for failing to report a felony. He served his sentence and has been released. Robert Mericle is expected to be sentenced for his role in the Kids for Cash scandal on April 25, 2014. Having served as a witness for the prosecution in another corruption case, he is expected to be sentenced to no more than 12 months in federal custody. At some point, prosecutors decided it was more important to sentence the judges to hard time while seemingly ignoring the misdeeds of Mericle and Powell. The light sentences received by Mericle and Powell serve absolutely no purpose. The prosecution took appropriate action in sentencing Conahan and Ciavarella yet failed to recognize the judges never would've reached that level of corruption without the money paid by Mericle and Powell. Ultimately, this serves as little deterrent to motivate businesspeople to conduct themselves ethically while also painting a foreboding picture of a future in which public services are provided by private, for-profit businesses.





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