School busted 

When a guy who was making $12,000 a month has his phone disconnected, you know something's doing.

'Thanks for tracking down this number," says David Deming, president of Griff Mills Schools, Inc., from his home in Tampa, after his office phone was disconnected on Monday. "That phone was a Glenn Mills phone," he explains. "I no longer work for Glenn Mills."

Glenn Mills. Griff Mills. Never heard of 'em, right?

That's too bad, because two years ago, the Florida Legislature gave David Deming $30 million to build a high-security reform school for juvenile delinquents. Deming was to replicate a nationally-renowned school in Concordsville, Pa., called Glenn Mills which takes serious juvenile criminals and, with harsh discipline and vocational training, advances them two grades every nine months, turning many of them into law-abiding citizens. So impressed were the state's Democratic legislators by the non-profit school that they immediately created a program to ship 100 Florida boys there each year while a new, for-profit school, called Adam Paine Academy, was built in Hilllsborough County. They also invited Deming, who was chief of admissions at Glenn Mills for 20 years, to found the Florida school and a company -- Griff Mills -- to build it.

It was all quite cozy -- the kind of "privatization' initiative that is much in favor in today's legislative climate. Except that, today's legislature is dominated by Republicans, who tend to frown on cozy deals arranged by Democrats. "Sounds like a lot of money," muses Charles Thomas, a University of Florida professor who heads up the state's correctional privatization commission.

Thomas notes that two comparable facilities housing 350 kids each have just been built by Correctional Services Corporation (CSC) for about the same money as this one school for 500 boys. The CSC youth prisons also will cost 25 percent less to run on a per-inmate basis than the proposed reform facility. "This is unfortunate on a policy level," Thomas says. "We know how to do this without sweetheart deals."

Says State Sen. Charles Crist (R-St. Petersburg), a hard-nosed member of the criminal justice committee, "I am not one of the proponents of this initiative."

So as the political winds have shifted, the fortunes of Deming and the Adam Paine Academy have fallen. Meanwhile, infighting and possible conflicts of interest on the state board that was set up to oversee Griff Mills and the Adam Paine project have thrown it into turmoil.

While the fate of Adam Paine Academy is far from sealed, the controversy illustrates some of the pitfalls of introducing private "competition" into government functions.

The $30 million for Adam Paine comes from an account known as PECO, the state's Public Education Capital Outlay fund, which gets its money from a 2.5 percent gross receipts tax on electric and phone bills. It's supposed to fund school construction, but it funds a lot more than that -- perhaps including, if Orlando Mayor Glenda Hood gets her way, part of her imagined downtown performing arts center. PECO funds at one time pumped $200 million a year into the state's nine public universities. That amount had dropped to $79 million last year -- about half the amount spent in 1992.

Funding a private, for-profit juvenile prison with PECO raised a red flag with Burke Kibler III, a principal with the powerful law firm Holland & Knight and a member of the Alternative Education Institute (AEI), the 16-person state-appointed board overseeing the Adam Paine project. AEI subsequently brought in outside auditors to look at Griff Mills' spending on the project so far. An "interim report" -- obtained and reported two weeks ago by The Wall Street Journal -- questioned about $500,000 of that spending. Among the concerns:

Deming and a former Griff Mills board member both were paid more than $200,000 in salary and consulting fees -- well over the $60,000 salary limit AEI officials asked Griff Mills to adopt.

Deming's wife was paid $35,000 by Griff Mills for administrative services.

More than $20,000 in apparent stock dividends were paid to some directors of the Griff Mills corporation. This before the school is built, and when Griff Mills' only income is state construction money.

There was also a ski trip to Steamboat Springs, Colo.

The auditor's concerns blew up at a January meeting of AEI. At that time, some members called for the state to seize control of the project.

Deming says bad things began to happen after he fired an employee in December for taking a job with a competitor. That employee, Samuel Streit, was also the former board member found by auditors to have received the excessive salary. Deming says Streit was let go after accepting a high-level second job with a Texas-based rival, the Brown Schools, which also is pursuing state money in Florida to aid juvenile delinquents.

Deming says that AEI board Chairman Elaine Gordon ordered him to rehire Streit, and contends that she moved to sink Griff Mills when Deming refused. Gordon owed Streit a favor, Deming says, because Streit and already hired Gordon to work for the Brown Schools; indeed Gordon subsequently helped Brown make a pitch for a $1.8 million state grant, which Brown won.

An expert on mental health and retardation, Gordon is also a former state representative who rose to vice chairman of the committee that controlled the budget of the state Department of Health and Rehabilitative Services. She later went on to lead that department.

It's debatable whether Brown is in direct competition with Griff Mills. But Gordon's involvement "appears to me `as` a conflict of interest," says Israel Tribble, an AEI board member and Deming supporter.

Streit has declined to comment. Gordon did not return a phone call at time.

But still, $200,000?

But still, $200,000?

Several of AEI's own contract experts say the money was "spent in accordance with the contract." Deming adds that Griff Mills' construction management costs are one-third less than the industry-standard 10 percent, and construction of the Adam Paine Academy is on schedule. He boldly claims that the external audit has given his company's finances a "clean bill of health," and says the controversy was trumped up.

"We earned the money," he says. It's not 'public money' once we earn it. All this stuff about ski trips, and these meals, that's all inflammatory, it's -- what you say? -- libel."

These "libels," however, have gotten Deming fired from one job -- his former position in Pennsylvania with Glenn Mills, which he continued to hold even as he immersed himself in the Florida project. "There was always going to be a parting of the ways," he says. "It was determined to speed up that timetable."

The criticism also has caused Deming's Griff Mills contract to be renegotiated, he says, down to from about $12,000 per month to "about $4,000 or $5,000," he says. But the spirit of the entrepreneur has infected him. "You have to remember," Deming explains, "that `$12,000 monthly` pay doesn't include benefits. No health care; as a consultant have to pay FICA . . . ."

Meanwhile, one former AEI board member has allegedly made an ethics complaint against Gordon. The state Ethics Commission could not confirm that complaint; it takes them at least a couple of months to make such complaints public. Tribble says he hasn't asked Gordon privately about her business dealings -- "you can't under the sunshine laws" -- but he plans to do so at the next AEI board meeting, about a month from now.

The full audit report is still pending.

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More by Ericson, Edward Jr.


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