Hardin Moves to Mothball Empty Jail

By Beacon Staff

HARDIN – Running out of money and with bills stacking up, officials in this struggling rural city are moving to mothball their empty 464-bed jail after a proposed takeover of the facility fizzled.

The jail’s would-be savior, Santa Ana, Calif.-based American Police Force, dropped its bid earlier this month when its lead figure was exposed as a California con man.

The $27 million jail already had sat empty more than two years — frustrating Hardin’s hopes for an economic revival fueled by contracts to take out-of-state inmates.

City officials said Tuesday they were still getting interest in the jail but acknowledged they face scant prospects for filling it anytime soon.

Meanwhile, the jail’s insurance policy is set to expire Nov. 1 and the quasi-public city agency that owns it, the Two Rivers Authority, may not have the cash to get a new policy.

Tack on at least $39,000 in outstanding bills, and authority members said they could soon cut off heat and electric services for the 96,000-square-foot jail.

“We’ve got to minimize our costs,” Two Rivers president Gary Arneson said. “We can’t let it deteriorate and we have to protect it.”

Most of the outstanding debts are owed to US Bank, the trustee on the bonds used to build the jail. Those bonds went into default in May 2008.

The authority has roughly $55,000 remaining to last it through the end of the fiscal year next July. Its 2009-10 budget was heavily dependent on a $109,000 payment that had been expected from CEC, a New Jersey corrections company that operated the jail until it pulled out of Hardin in January.

American Police Force entered the scene this past summer as Hardin officials were growing increasingly desperate for inmates. They had searched for prisoner contracts from Vermont to Alaska and even offered the jail as an alternative for the terrorism detainees in Guantanamo Bay, Cuba.

The California company’s lead figure, Michael Hilton, promised Two Rivers more than $2.6 million annually to lease the jail.

He said he would fill it with inmates by early next year and promised to build a $17 million military and law enforcement training center. Hilton later offered as his chief of operations a former Secret Service agent who turned out to have a criminal background.

The deal fell apart following media reports that revealed Hilton’s long history of fraud in California. That included several years in prison in California and at least $1.1 million in outstanding civil judgments.

As recently as last week Hilton said he intended to return to Montana to pursue the training center. He claimed to have a lease agreement on 1,200 acres owned by Doug Atkins, a Big Horn county rancher and prominent Hardin business man.

Atkins did not return several telephone calls from The Associated Press seeking comment. His son-in-law, Paul Green, a former economic development official in the city, helped arrange Hilton’s discussions with several southeastern Montana landowners.

Green declined comment on his in-law’s participation, but said no deal was ever completed.

“There’s been no exchange of money and there won’t be any exchange of money,” he said.

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