Merger Put on Hold for Prisoner Transportation Company Facing Federal Scrutiny

A proposed deal between Prisoner Transportation Services and its closest rival is delayed after an objection is filed.

By ELI HAGER and ALYSIA SANTO

A proposed merger between the nation’s largest private extradition company, Prisoner Transportation Services, and its closest competitor was put on hold Tuesday after an advocacy organization filed an objection with the federal agency tasked with approving the deal.

The Human Rights Defense Center, a nonprofit prisoner advocacy group, submitted its comment to the federal Surface Transportation Board on Monday, the deadline for public input before the merger became official. Citing a recent Marshall Project investigation into a pattern of deaths, escapes, crashes and abuse in the for-profit extradition industry, the filing argued that the merger would not be in the public interest because the companies have a history of poor treatment of prisoners. The objection also argued the merger would narrow the industry’s competitive field.

“While the merger may result in economies of scale for the combined company, and result in efficiencies related to the combined company’s business model, that simply reflects benefits to the company, not necessarily to the public,” wrote Alex Friedmann, associate director of the Human Rights Defense Center.

PTS, which transports suspects and fugitives who are arrested back to the jurisdictions where they are wanted, has until Aug. 23 to respond. The board’s final decision must be made by August 2017, although it could happen much sooner.

At least four prisoners have died on PTS vans since 2012. Another two dozen people have been killed or seriously injured in crashes since 2000 aboard private extradition vans, which are operated by about a half dozen small private companies. Twenty-six states and countless local law enforcement agencies have contracts with private extradition companies.

In an emailed statement, Nashville-based PTS defended the merger with its rival, U.S. Corrections. “This proposed transaction does serve the public’s interest,” the company said. “While we look forward to reviewing the complaint in detail, make no mistake, we are committed to doing things right and working to raise the standards of service across the entire industry.”

Last month, U.S. Attorney General Loretta Lynch told lawmakers that her office would investigate apparent lapses in federal oversight of the prisoner transport industry. Last week, PTS said it was making improvements such as installing cameras and a real-time tracking system on its fleet, hiring a compliance officer and hiring an independent auditor to review its practices and the industry at large.

In its objection, the Human Rights Defense Center also cited recent Marshall Project reporting about apparent ties between U.S. Corrections and a now-defunct extradition company, USG7, which has failed to pay at least $200,000 in legal judgments to former employees and inmates injured in crashes, according to court records and attorneys.

Steven Kalishman, who represented one inmate injured when a USG7 van hit a tree, said he also filed a comment opposing the merger. The company never responded to his client’s lawsuit and has not paid the default judgement it owes in the case, he said.

“Before the merger is allowed to take place, they should be held accountable for the judgments against USG7,” Kalishman wrote. It was unclear whether the board would consider his objection because it was missing a required document.

U.S. Corrections has denied any ties to USG7, and the company did not respond to further requests for comment on Tuesday. PTS also did not respond to questions about ties between USG7 and U.S. Corrections.

In their application for the merger, the two companies named large, national companies such as TransCor America and GEO Transport as their direct competitors, arguing that the merger “would not affect the competitiveness of the industry, which is sizable and robust.”

TransCor and GEO transport prisoners between private prison facilities operated by their parent companies, Corrections Corporation of America and The GEO Group, but are not currently involved in the interstate extradition business. On its website, PTS describes itself as “one of the very few nationwide prisoner transport operators in the United States.”