Future Forum: Guilt, Innocence, and the Death Penalty 
The Great Texas Prison Mess
During the gargantuan buildup of the Texas Prison System, everyone wanted in on the action—even Andy Collins, the boss himself. Here’s how greed, fear, and VitaPro produced the state’s costliest scandal.
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But Collins himself wasn’t exactly having a gay time of it. “I was the first guy in the office, the last to leave,” he says. “I worked seven days a week, twenty-four hours a day on call. Thousands of hours I lost, not compensated for.” Prison life had become suffocating for the TDCJ lifer, and the Huntsville mansion offered no solace. The sound of the Walls Unit inmates pounding their basketballs was like a hammer in his head. The phone rang all night long, with each caller conveying some new minicrisis for Collins to lose sleep over. One of the inmate house servants had swiped some of Collins’ money and a couple of pairs of his jeans. The claustrophobic lifestyle in Huntsville had taken its toll on his personal life, especially when several female prison employees scurrilously charged in a lawsuit that Collins had allowed a prison captain to sexually harass them because the captain knew something about Collins’ alleged sexual dalliances.
Who needed this kind of grief? All around him, prison entrepreneurs with one tenth of his experience were effortlessly raking it in. Private prison companies like Wackenhut and the Corrections Corporation of America counted Texas as their number one client. The firms were paying hundreds of thousands of dollars to veteran Capitol lobbyists like former Speaker Billy Clayton and Ed Wendler to represent them, and the lobbyists in turn were enriching the campaign coffers of politicians across the state. Topped-out TDCJ wardens and bureaucrats were crossing over to become well-paid private-prison employees. Among those were a number of tough old wardens from the pre-Ruiz days. If those dinosaurs could make it in the new world, why couldn’t Andy Collins?
Even a prominent former critic of private prisons, Collins’ old friend Charles Terrell, the chairman of the prison board from 1987 to 1990, had gone over to the other side. Fully six months before he resigned from the board, Terrell had quietly formed his own company, Corrections Solutions. By 1994 the former prison overseer was hitting up the TDCJ for business. But Terrell—who has made millions selling insurance in Dallas—would fare poorly as a prison profiteer. Three times he was thwarted in bids to build and operate a private prison, and in one case he was outright outpoliticked by State Senator Bill Ratliff and State Representative Paul Sadler, who arm-twisted the board to award a contract to a group operating out of Henderson.
But Charlie Terrell would keep turning up, a former public servant dancing in and out of a world gone ethically ablur. He would do business with director Andy Collins before all was said and done. Their fates, in fact, would be bound by a man who would come to epitomize the dark, degenerative side of the great prison boom: Patrick Harold Graham.
CREATURE OF DESTINY THAT HE WAS, Pat Graham slithered into the weed-choked garden of the prison business with the greatest of ease. Graham started out straight, selling Johnny Carson-style blazers at his father’s clothing store in Houston. Later he established his own haberdashery in Humble, but beyond the racks of polyester lay treasures for the taking, and Graham was nothing if not a taker at heart.
Truth be told, he was a likable devil and had “the greatest bullshit of anyone I’ve ever heard,” according to one of his future prosecutors. The early ventures of Graham and his brother and business partner, Mike, involved a forklift business, a natural-gas-pipeline operation, and an alcohol-free teen discotheque. Later would come the attempts to clone cattle, build offices out of recycled garbage, and bring pro basketball to New Orleans. But along the way, Pat Graham made a brief pit stop in the early eighties as an employee for a modest private detention company out of Victoria—and there he saw gold.
The smell of money must have made his nostrils flare like hoop skirts in a hurricane. Texas was dying for prison beds. In 1987 Graham pronounced himself a jail builder, formed N-Group Securities with Mike, and spent the next three years trying to persuade counties to let him build their jails on spec financed with revenue bonds. The revenues that would pay off the bonds would come from contracts with TDCJ and other entities to house overflow prisoners. And Graham gathered an impressive collection of business associates: ex-governor Mark White, former state senator Ray Hutchison (the spouse of eventual U.S. senator Kay Bailey Hutchison), the highbrow private prison company Wackenhut, and a host of county officials who were assured by Graham that a Texas jail would never want for inmates—that if you built one, TDCJ would come.
Graham’s associates became his victims. He charged six counties a total of $73 million, financed with bond issues, for six jails that were worth about $50 million. He demanded, and received, at least $6 million in kickbacks from secret arrangements with underwriters and construction associates, according to court documents. When in 1988 then-director Jim Lynaugh saw the N-Group facility plans for what they were—minimum-security prison dorms that did not comply with Ruiz standards—he informed Graham that the TDCJ would not be doing business with N-Group. But Graham wasn’t going to let a little federal court order spoil the deal. The jails were completed in 1991, and thereafter Graham unleashed a political blitzkrieg urging the TDCJ to contract with counties to house prisoners there: speeches by Mark White (to whom N-Group contributed $225,000 for his failed 1990 bid for governor), angry letters by county judges and local legislators, and indignant newspaper editorials. Lynaugh didn’t budge. As he would later testify dryly, “I did not wish to incur the wrath of a federal judge.”
When it dawned on the bondholders that they had been sold a bill of goods, they glumly sold the six N-Group facilities to the TDCJ for 50 cents on the dollar and sued Pat and Mike Graham. The N-Group civil lawsuit took place in the fall of 1994, five months after Andy Collins had become the TDCJ’s executive director. Collins and Lynaugh both testified at the trial, by which time it was common knowledge that, as Allen Hightower puts it, “You were putting your reputation at one hell of a risk by having any association with Pat Graham.” Everyone knew that Graham had been indicted in Pecos County for various jail-building malfeasances. Everyone knew he had snookered the bondholders and pocketed unheard-of sums of kickbacks. And as the trial transcript shows, Graham changed his Fifth Amendment plea and agreed to testify following a payment of $50,000 by co-defendant Lott Construction.
Yet Collins turned a deaf ear to the denunciations. Though he had toured the N-Group jails with then—prison board chairman Selden Hale and, according to Hale, “didn’t have anything particularly nice to say about the facilities,” from the witness stand he sounded like N-Group’s biggest fan. Rebutting the testimony of his former boss Jim Lynaugh, Collins testified not only that the six jails were suitable for maximum-security purposes but that in fact he saw no reason why the facilities couldn’t be used for death row inmates. Long after the jury had declared a $37 million judgment against N-Group, observers remained stunned by Collins’ Graham-friendly testimony. Perhaps, they speculated, the executive director was simply trying to brownnose the new prison board chairman, Carol Vance, whose law firm represented one of the several defendants in the N-Group case.
That would have been characteristic of the ingratiating Collins. But such a theory does not preclude a more disturbing possibility—namely, that as the prison boom festered into an avaricious free-for-all, Andy Collins had lost the ability to differentiate between the merely audacious and the downright sleazy. Even the classiest of the private prison companies seemed hopelessly greed-stricken: They variously hired teachers who weren’t certified, paid them salaries with Pell Grants until the feds got wind that the required matching funds were never provided, and in the meantime padded company profits by short-staffing the facilities and overcharging inmates on long-distance phone calls. A few legislators brazenly applied their lips to the correctional teat—notably Mark Stiles, of Beaumont, who was riding the prison-building wave as a concrete subcontractor, and Senate Criminal Justice Committee chairman John Whitmire, who took a $4,000-per-month gig with the Harris County probation department while the county was vying for a new Mode II prison to be run by the probation department. Even the self-proclaimed do-gooders, Collins must have figured, had a little bit of Pat Graham in them.
Overseeing Collins was a prison board that at times seemed entranced, if not thoroughly compromised, by the prison boom. Board member Ellen Halbert had gone positively giddy when the mayor of Burnet, hoping to land a proposed substance-abuse facility, offered to name it after her. Halbert’s feisty new ally on the board, John David Franz, of Hidalgo, immediately began to lobby other members to bring one of those lucrative prisons to South Texas. John Ward, the former mayor of the prison town of Gatesville and the husband of a teacher in the Windham prison school system, was an outright booster. Josh Allen, a Beaumont construction executive, had been seen huddling with Brown and Root executives just before voting on construction issues (though a TDCJ investigation did not reveal any improprieties). Rufus Duncan, of Lufkin, who had openly bragged to Texas construction companies that he had “been one of the instigators” of the TDCJ’s new prison-building scheme, intervened on at least two prison projects and pushed general contractors to hire his friend Hoople Jordan as the dirt-paving subcontractor, even though Jordan’s paving material was less durable and would have to be hauled to the sites from a considerable distance although nearer material was available.
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