Administrators and staff at Idaho's prison agency knew since at least 2010 that private prison contractor Corrections Corporation of America was understaffing the state's largest prison in violation of the state contract.
Idaho Department of Corrections officials and CCA eventually came to an agreement about staffing levels, according to documents obtained by The Associated Press, but inmates and advocates continued to complain about inadequate staffing and its impact on prisoners' safety.
The new details about the state's oversight of CCA come as Idaho State Police investigators are looking into allegations that the nation's largest private prison company defrauded taxpayers by filing reports that showed vacant positions were fully staffed.
That investigation is expected to be completed sometime in the next several weeks. The probe was launched after an AP public records request raised questions among officials about payroll reports and staff rosters from the CCA-run Idaho Correctional Center.
Idaho corrections officials say they are proud of the departments' efforts to oversee CCA - efforts which included adding more employees to check on the prison and lengthening CCA's contract from 30 pages to 450 in an effort to better spell out the company's responsibilities.
But the agency never fact-checked CCA's staffing reports against payroll records.
"Now, looking back on this, I think we'd all have done it differently," Idaho Department of Correction Director Brent Reinke said. "I think our staff has done an incredible job. When you start looking at the staffing fraud ... it's really complicated to get to the bottom of that."
When Reinke became director in 2007, only one part-time employee was responsible for monitoring the private prison.
Reinke began adding staffers to the job immediately and now 24 of IDOC's 1,570 employees oversee eight different contracts worth about $80 million a year. CCA, based in Nashville, Tenn., gets $29 million of that total.
CCA spokesman Steven Owen said in a prepared statement that the months of falsified reports were an isolated incident. He said the company has cooperated with the state's investigation, is working to correct the issues and is "fully committed to making taxpayers whole for any unverified hours."
CCA has said it won't bid on the next contract to run the Idaho prison when its current contract expires next summer.
Still, as the Idaho Board of Correction prepares to hand the prison over to another private company, department officials are looking back to see where they could have done a better job.
"Never in a million years did we think they were lying to us," said IDOC quality assurance manager Natalie Warner. "...You know, the thing about fraud is we just can't ever assume the worst intent, otherwise that's all we're ever looking for."
IDOC officials say that back in 2010 they thought the agency was taking all the necessary steps to make CCA compliant. Still, the warning signs were there, with lawsuits from prison inmates alleging violence and understaffing filling the court docket.
The prison had roughly three times the number of inmate-on-inmate assaults than other state prisons. And IDOC's own contract monitor, Matthew Vallard, detailed more than 500 vacant mandatory security posts between April and the end of August in memos to supervisors.
Idaho officials warned CCA leaders in 2010 and again in January 2011 that the understaffing needed to be fixed.
But in March 2011, Vallard tallied nearly 300 more vacancies. That prompted the department to issue a "Breach of Contract Notice" to CCA, advising the company it had 30 days to make things right or face a type of fine called "liquidated damages" under the contract.
CCA agreed to fix some of the understaffing but countered some posts simply weren't needed. After negotiations IDOC agreed to take those posts of the mandatory list, effectively remedying many of the vacancies.
The company was never fined, nor did IDOC push for a price cut in exchange for the staffing reductions.
By the end of 2011, CCA reached a settlement agreement in a lawsuit brought by inmates and the American Civil Liberties Union that alleged understaffing and rampant violence at the prison.
The terms of that settlement called for increased staffing levels and other changes, including stopping inmates from covering the windows in their cell doors and improving management of the prison's housing units. IDOC was tasked with helping to ensure the settlement terms were being met, prompting the contract monitors to switch their focus from total staffing numbers to settlement issues.
Meanwhile, CCA's monthly reports to the state showed the mandatory positions were nearly always fully staffed.
Inmates and some outside attorneys thought otherwise. In 2012, rumors began circulating that CCA was falsifying staffing reports given to IDOC by using "ghost workers," employees who were listed as working a post even when they weren't in the facility at all, and another group of inmates sued over the alleged scheme.
At the start of 2013, the AP requested the staffing and payroll records from the prison.
The next week, CCA's regional director Kevin Myers told an IDOC official for the first time that the company had begun its own investigation several months earlier after an employee reported allegations of staffing fraud, according to court documents.
Reinke said the new contract will eliminate enforcement loopholes and new reporting requirements will make it easier to spot potential fraud.
Stephen Pevar, the ACLU attorney who represented inmates in the 2010 lawsuit, said the state shares the blame for the problems at ICC. Pevar said he's happy the department has taken aggressive steps since the suspected fraud came to light, but the final outcome remains to be seen.
"Will Governor (C.L. "Butch") Otter and Director Reinke allow CCA to get away with this?" Pevar said.