Business Az Usual

The video opens with shots of a choir: well-groomed young men singing "Silent Night" to a group of senior citizens. Then the image cuts to cops arresting kids. Cut back to the chorus, voices raised in song. Cut back to a cop confiscating an ugly-looking gun. Baseball celebrity Joe Garagiola breaks into the scenes of good boys and gangbangers.

"These youngsters haven't always been choirboys," his rasping voice declares. "They are some of the toughest, most troubled youth, perpetrators of the most violent crimes."

This is the promotional videotape the Arizona Boys Ranch sends to juvenile courts across the country, with the aim of convincing probation officers to send troubled teens to Boys Ranch facilities. By the tape's end, the kids--who start out as thugs, drug dealers, would-be murderers--are singing the praises of the rehabilitation program for juvenile offenders.

But times have gotten tough for the get-tough facility.
In March, there were more than 500 troubled kids--about 400 of them from California--serving time for juvenile offenses at Boys Ranch. Today, only about 200 teens remain at the main campus outside Mesa.

The declining numbers at Boys Ranch have already cost the agency $17 million.

The exodus of California kids is because of one Boys Ranch resident who didn't complete the program: Nicholaus Contreraz, a Sacramento teen who died March 2 at the Boys Ranch facility in Oracle.

Arizona is home to two of the juvenile-justice industry's leaders: Arizona Boys Ranch and VisionQuest. The Arizona camps have been favorites of California juvenile authorities because they present a cheap and easy alternative to California's overcrowded jails.

Arizona law allows camp staffers to physically restrain their wards, while California laws forbid physical restraint.

Furthermore, Arizona regulators have done little to oversee the camps, and state policies don't provide the authority to take serious

action when rules are broken. Even after the Contreraz death, one key Arizona legislator still considers the state's regulations too hard on the camps.

The kids at these facilities, whom many consider to be society's throwaways, are actually worth big bucks. California spends $45 million a year to send young offenders to out-of-state facilities. About a third of them come to Boys Ranch and VisionQuest.

Now, California authorities are stepping in where Arizona politicians and bureaucrats have done little.

The California Department of Social Services (CDSS) delivered a scathing report on Contreraz's death. Ripping the program for "abuse and neglect," California stopped payment for kids sent to the facility and barred future placements.

A California congressman has also asked two federal agencies to investigate Boys Ranch, while the FBI looks into Contreraz's death. And legislators in California are calling for more regulation of all out-of-state camps, not just Boys Ranch.

The difference this time is the money. For the first time ever, California is cutting off the programs' lifeblood: tax dollars.

And that could mean real trouble for Arizona's controversial boot camps.

B.C.--Before Contreraz--Arizona Boys Ranch and VisionQuest were part of a booming industry with a seemingly unlimited future.

There are at least 57 boot-camp-style programs for lawbreaking teens operating in the U.S., and more get started every year. As two of the oldest programs in the country--Boys Ranch was founded in 1949, VisionQuest in 1973--Arizona's programs have been at the vanguard.

Both organizations have cashed in on the desire of the public and politicians to get tough on crime, especially juvenile crime. The same impulse to try kids as adults and impose curfew laws has also led politicians and bureaucrats to seek new remedies for the growing numbers of teen scofflaws.

Ironically, Arizona authorities don't use the camps much. Only about 50 kids a year from Arizona are sent to Boys Ranch, and VisionQuest only has about a dozen Arizona youth at its facility now. Most Arizona kids are sent to the Department of Youth Corrections, or are kept in home placements.

For California, though, the camps presented the perfect solution. Arizona's camps offer what California can't: hands-on intervention.

California staffers at juvenile facilities are generally not allowed to physically restrain kids, unless they are at a lock-down facility operated by the California Youth Authority. In Arizona facilities, staffers can use physical restraints--as long as they don't cross the line into physical abuse.

Staffers at Boys Ranch and VisionQuest engage in direct confrontation, military-style discipline and rigorous physical activity to try to get young lawbreakers to change.

Physical contact is considered essential to get the teens to follow commands. It's easy to see why. Any recalcitrant teen who sits down and refuses to obey instructions can expect to be manhandled.

Boys Ranch CEO Bob Thomas defends the hands-on approach. He ridicules California's rules, which prohibit most of the physical contact Boys Ranch staff uses to enforce discipline.

"California's regulations are ludicrous. If a kid gets a baseball bat and comes out swinging, you're not allowed to touch him," he says. Teen criminals today are harder and more violent, Thomas says, and Boys Ranch can't operate under "rules which were made for kids like Mickey Rooney."

Youth at the Arizona Boys Ranch can go through three different programs that all share the same basic elements: discipline enforced by physical training, very similar to the military. Long hair is shorn. Kids wake at 5:30 a.m. They either go to school or work for the U.S. Forest Service on conservation projects.

And the kids who were once a terror on the street are now feared on the field--Boys Ranch has become a powerhouse in high school sports, winning respect and several state championships. Former Arizona State University football coach Frank Kush is an administrator at Boys Ranch. He was hired by the program after losing his job at ASU for allegedly punching a player.

VisionQuest includes similar basic training but has many more programs. In addition to its own version of boot camp, VisionQuest offers a wagon train that has teens pack from state to state alongside highways; a Buffalo Soldiers program in which black youths reenact U.S. Cavalry traditions; and OceanQuest, a seagoing voyage where teens have to learn to sail and manage a boat. VisionQuest's frontier experiences are designed to teach the kids self-sufficiency and self-respect.

Currently, California has 888 kids in out-of-state placement (down from 1,012 at the end of March). Almost a third of them, 318, are at Boys Ranch and VisionQuest.

Dan McAllair, an analyst with the Center on Juvenile and Criminal Justice, says Boys Ranch and VisionQuest are so popular "because the publicly run alternatives are so dismal." California kids either end up in the California Youth Authority (CYA), the state's prison system for teen criminals, or "warehoused" in overcrowded county group homes.

"Judges are left with the least damaging alternative, and that's these programs," McAllair says.

VisionQuest and Boys Ranch claim lower recidivism rates for kids who get through their programs; though no really comprehensive industry-wide research has been done, both camps cite studies done on their own programs that seem to bear them out.

But much of what makes the Arizona camps attractive to California officials is purely financial.

Last year, CYA raised the fees it charges California counties to house young criminals. Instead of coughing up a possible $35,000 per year per kid for CYA housing, counties opted to send kids to out-of-state facilities like Boys Ranch and VisionQuest. When counties send kids out of state, the California Department of Social Services picks up two-thirds of the fee, using state and federal funds. That leaves the county's share at only about $1,000 a month. Any way you look at it, it was a bargain for the counties.

And serious money for the camps. Boys Ranch charges $3,600 a month, or $43,200 a year per kid. VisionQuest charges $3,583 a month, or $43,000 a year.

California counties also get state education funds to pay for the kids' schooling. San Joaquin County, for example, sends $2.3 million a year to Boys Ranch for schooling.

While both Arizona Boys Ranch and VisionQuest are nonprofit organizations under the law, they are still run like businesses, and they still have to make money to keep going, even if they don't call it profit.

Boys Ranch is a tax-exempt charitable organization, founded in 1949 by a group of Rotarians. Today, it's run by CEO Bob Thomas, who is appointed by a board of directors. Its operations now encompass six campuses in Arizona and three out-of-state offices.

Fueled mainly by California tax dollars, Boys Ranch has had steadily increasing revenues over the past several years, climbing from about $19.6 million in 1995 to $26.5 million at the end of its most recent fiscal year, according to financial statements filed with the state.

Almost all of that came from fees charged by Boys Ranch to the government agencies that send kids to the facility. Almost all of the kids at Boys Ranch were sent there by California probation officers. According to Boys Ranch's most recent financial statements, nearly 91 cents of every dollar it brought in came from the fees charged to California counties.

San Bernardino and San Diego counties accounted for $7.5 million of its income last year alone. When the California Department of Social Services announced it would no longer pick up the tab for Boys Ranch, it effectively lost its largest customers.

Since 1990, Boys Ranch has also received about $5.3 million in contributions and grants, according to reports filed with the IRS.

The CDSS decision turned what looked like Arizona Boys Ranch's best year into one of its worst, according to Thomas.

Before Nicholaus Contreraz's death, Boys Ranch was on track to bring in $22 million in revenue this year, according to Thomas' estimate.

That's since dropped to just $5 million, he says. If Boys Ranch were a publicly traded company, investors would be screaming.

Boys Ranch's loss has been VisionQuest's gain. Eleven kids from Boys Ranch have been transferred to VisionQuest's care, and more could be sent in the future.

That is, if VisionQuest has the room. It's done even better than Boys Ranch in the juvenile-justice business. Though the company's Cochise County camp holds only 190 teens, VisionQuest has programs for both boys and girls and deals with about 1,500 kids nationwide. That's added up to $36.6 million in revenue in 1995, growing to $42.3 million for the most recent fiscal year, according to reports filed with the state. VisionQuest's Arizona operations alone brought in $9.8 million in revenue last year, those reports state.

VisionQuest's corporate structure is different from Boys Ranch's. Founded by Bob Burton and Steve Rogers in 1973, it's a nonprofit corporation that also has a for-profit side and several for-profit subsidiaries. In addition to Arizona, the company has operations in Texas, Pennsylvania, New Jersey, Oklahoma and Florida.

VisionQuest does pay taxes, mainly because the corporation didn't want to deal with the hassles of tax-exempt status, according to VisionQuest's executive vice president, Peter J. Ranalli.

VisionQuest's expenses were $8.4 million last year, including $3.1 million for personnel costs and more than a million for contractual services. For VisionQuest, those expenses also include what it chooses to pay itself. The company's nonprofit side pays its for-profit side an administrative fee (it was 15 percent of gross revenue in 1996) to run the company's programs.

At Boys Ranch, program services--food, shelter, clothing, etc.--took 70 cents of every dollar it took in. The rest was spent on education, support services for out-of-state parents and development.

VisionQuest had $954,129 left after expenses last year, while Boys Ranch had $1.4 million left.

The official reaction to the death of Nicholaus Contreraz was shock and outrage. Abuse at Arizona's boot camps is nothing new, however. It is, in fact, an occupational hazard.

Contreraz, a 16-year-old from Sacramento sentenced to Boys Ranch for joy-riding in a stolen car, died two months after he arrived at the Oracle campus. An infection had filled his chest with two and a half quarts of pus, collapsing his left lung and stopping his heart. According to Pinal County sheriff's reports, Boys Ranch staff ignored the boy's pleas for help, and instead mocked him, forced him to do pushups and made him carry a bucket filled with the clothes he'd soiled with his own vomit and excrement.

The state Department of Economic Security (DES) promises to have wrapped up "the most extensive, most intensive" investigation into Boys Ranch ever by the end of August.

Unfortunately, DES' track record in this area isn't that impressive.
This was far from the first death at a boot camp. Three other teens have died in boot camps in Arizona alone, and the number goes up to 19 nationwide.

Fifteen youths have died while in VisionQuest's care--two in Arizona--in the program's 26-year history. Most died in accidents, which are more common under VisionQuest's rigorous outdoor programs like the wagon train and Ocean Quest.

But one VisionQuest ward, Mario Cano, died in 1984 in New Mexico, under circumstances strikingly similar to those of Contreraz. Until he died of a blood clot that moved into his lungs, Cano was accused of faking his illness by camp staff.

Arizona Boys Ranch has had only one other death before this, a teen who drowned in 1994 while trying to escape.

Arizona Boys Ranch has had 21 complaints of abuse substantiated by DES in the past five years, though Boys Ranch is contesting those findings in court. Other charges are still under investigation.

CEO Bob Thomas maintains the death of Contreraz was an isolated incident. Although Boys Ranch initially said there was no wrongdoing, Thomas later admitted that Boys Ranch policies were violated. He disciplined some staffers and fired two others. He closed the Oracle campus and ordered an internal review of Boys Ranch's medical and disciplinary policies.

Thomas, who calls the California report a "travesty," says Boys Ranch has dealt with its problems. "Our reaction is, you make a mistake, you own up and go forward," he says.

VisionQuest has had 11 charges of abuse substantiated since 1995. While the allegations at the Boys Ranch have gotten prominent play in the media, little notice has been given to VisionQuest's problems.

For example, in 1995, a female VisionQuest employee helped two residents escape, then lived with one in Texas for several months before she was finally arrested by authorities there. In 1996, a twice-convicted child rapist was hired by VisionQuest. He was fired when a background check revealed his record, but by that time he had already molested a female ward. In 1997, a supervisor was charged with assault for knocking a girl to the ground and holding her down by the throat.

And as recently as January, the camp was investigated by both DES and the state Supreme Court for the sexual assault of a Pima County 12-year-old boy by three older boys at the camp. The boys were placed together despite their differences in ages and backgrounds--one of the assailants was at the camp because of an arrest for sexual assault. Although the assault took place on January 12, the police weren't contacted until four days later. DES and the court both found VisionQuest did nothing wrong in this case and resumed sending Pima County's kids to the program.

VisionQuest's Ranalli says such problems are part of the learning curve in his business.

"We're a human-relations program--we are dealing with human beings that are kids, and human beings that are adults. And human beings make mistakes," he says. "How you monitor and deal with those mistakes is key."

Ranalli thinks that if a camp takes corrective action when a "mistake" happens, then the camp should continue operating.

Arizona's regulators agree.
"Generally speaking, you can go through any of our files and find that there have been abuse issues," Wayne Wallace, head of DES' licensing unit says. "It depends on the action that the agency takes to overcome or eliminate the situation."

DES Deputy Director James A. Hart says that when it comes to abuse, they don't hold the employer accountable for the actions of its employees.

"When we investigate abuse, that investigation is against the individual, not the facility," Hart says.

In other words, if a staffer at a camp hits a kid, and the camp fires him, then the problem is considered solved.

DES didn't even investigate seven of the 31 complaints of abuse at VisionQuest over the past three years. While all abuse complaints are required by law to be reported to the agency, there's no requirement that DES actually determine whether the complaint is valid.

Short of revoking a license, DES also lacks the authority to make substantive changes in how a facility operates. Revocation is an action the department hasn't taken in years; in fact, regulators are hard-pressed to remember the last time it happened. The closest recent example Hart can give is a facility that voluntarily surrendered its license a couple of years back.

DES licensers can put a facility on notice with a "corrective action plan." Or they can issue a provisional license, which also means the facility has to make corrections. Or DES can recommend a staffer who is found to have abused a child have no further contact with kids at the facility.

Aside from shutting the program down, there's nothing DES can do to make sure its rules are followed. The agency doesn't have the power to impose fines or remove kids or keep more kids from coming to the facility. So, between a slap on the wrist and the A-bomb, there's not much it can do in response to problems.

This is part of the reason Arizona is such an agreeable business climate for the camps. Another is that Arizona's standards for the camps are significantly weaker than those of California, and state regulators aren't always vigilant about enforcing them.

In its report, CDSS noted that Arizona officials usually don't do unannounced inspections of programs and facilities, don't have the power to impose fines, don't have to put deadlines on fixing problems, and don't always inform placement agencies of allegations of abuse involving teens from out of state.

Arizona officials dropped the ball, CDSS Deputy Director Sidonie Squires says. "We relied on Arizona to have oversight over the camps in their state," she says. "They are the responsibility for those children when they get there."

Not our job, Hart says, pointing a finger right back at California.
"Our responsibility is to license. They cannot abdicate their responsibility for case management of the children they send here," Hart says. "If I send someone to a nursing home, do I expect the state to check up on them and visit them just because the nursing home is licensed? Of course not."

Hart, who contends the California report is "filled with inaccuracies," says that DES is doing its job when it comes to licensing the facilities.

To be fair, DES hasn't made any friends at Boys Ranch while investigating allegations of abuse there. Disputes between the two have led to an ongoing lawsuit by Boys Ranch against the state.

But when Boys Ranch has had problems with DES, Arizona's lawmakers have come to its aid. DES workers have complained about political pressure interfering with their investigations of Boys Ranch. The organization's political ties are well-known: Former Governor Rose Mofford sits on the ranch's advisory board, as does Kent Komadina, the state attorney general's top criminal prosecutor. In the past, Arizona legislators, including Representative Bob Burns and former House Speaker Mark Killian, have criticized DES efforts to cite Boys Ranch for abuse and neglect.

Burns remains a supporter of Boys Ranch. In his view, Boys Ranch still gets too much flack from state bureaucrats.

"I would disagree that Arizona is camp-friendly, and I think that's part of the problem," Burns says. "There is this institutional attitude coming out of DES that did not favor this reality-based model that Boys Ranch uses to basically rehabilitate these boys."

Even after the Contreraz death, Burns still cautions against overreacting against Boys Ranch. "It was a very unfortunate situation that occurred, but do we take the whole system down because of possibly one or other people's misdeeds?"

Carol Kamin, however, head of the Children's Action Alliance, believes the system is overdue for an overhaul.

"The problems with Boys Ranch didn't just come up overnight," she says. "The licensing and monitoring of Boys Ranch wasn't done the way they needed it to be done, because of all kinds of political pressure."

Kamin says that licensing standards have to change to ensure the safety of the kids at the camps. So far, she says, she hasn't heard of anyone in the legislature who's willing to take on the task.

While Arizona officials see no need to act, California does.
U.S. Representative George Miller of California is calling for a federal probe into how camps like Boys Ranch spend federal dollars. Boys Ranch and other facilities receive federal foster-care dollars, and Miller has asked the U.S. Department of Health and Human Services to see if Boys Ranch is legally entitled to that money. Last week, Miller also requested the General Accounting Office to audit how those federal funds are spent at all boot-camp facilities. The FBI has announced its own inquiry into the death for possible civil-rights violations.

Thomas says there is no irregularity in how Boys Ranch uses federal funds.
Now the dispute over Boys Ranch threatens to spill over into the operations of other camps, including VisionQuest.

California State Senator Mike Thompson has sponsored a bill to force out-of-state facilities to follow California regulations--which are much more demanding than Arizona's--if they house California's kids.

VisionQuest has its own political ties. Founder and CEO Bob Burton and his wife have given $400 to current House Speaker Jeff Groscost. VisionQuest, however, has a cordial, even pleasant relationship with regulators--both the company and the state praise the easy communication with the other.

VisionQuest and Boys Ranch both say they play by the rules. They generally fire any staffer who hurts a kid. And accordingly, the regulators let them stay open.

But when a kid dies, there are new rules, and the blame game begins.
California and Arizona authorities are quick to pass the buck back and forth about who's responsible for the teens sent to the camps.

While California has been content for years to send its problem youth away, when Contreraz died, CDSS blasted Arizona for not doing enough to protect them.

However, Hart says, there is a simple solution if California doesn't think Arizona can keep its kids safe.

"If California really has a problem with Boys Ranch, then they don't have to send anyone to them. We're not the ones sending kids here," the DES deputy says.

California won't solve its problems by pulling its kids from Boys Ranch.
That's because there's no room back in California. Juvenile facilities are full, and California's group homes usually can't handle the violent offenders who come to Arizona.

Boys Ranch is also taking the fight to California. Two weeks ago, parents and supporters of Boys Ranch gathered in Sacramento and held a march on the state Capitol to protest the CDSS action. They also met with state Senate Majority Leader Richard Polanco, a Boys Ranch supporter who is questioning the authority of CDSS to make decisions about where California kids can be placed.

Counties that rely on out-of-state placements are also questioning CDSS' right to decide where their probationees should go.

Ray Wingerd, the chief probation officer for Boys Ranch's biggest client, San Bernardino County, says his office is doing legal research on the question. And, as head of the Chief Probation Officers of California, he says his colleagues are also worried about Thompson's legislation to force out-of-state facilities to comply with California's regulations.

"The state Social Services Department has already clearly made it known that Arizona's regulations don't meet California standards," he says. "So we're a little concerned about our options."

With the spotlight on its competitor in Arizona, VisionQuest is calling for more regulation of its industry. Ranalli says VisionQuest supports the California legislation because he believes VisionQuest can meet those standards.

"We have no problem with regulations," he says. "Regulations protect us and the kids."

The death of Nicholaus Contreraz, Ranalli says, is an argument for opening camps in California--something VisionQuest and Boys Ranch have both wanted to do for years.

"We totally believe that you should work with kids in their own state," he says. "And from their point of view, I can see them asking, 'Why the hell should we spend all this money in Arizona for our kids?'"

No matter what happens, the controversy has already taken a heavy toll on Boys Ranch.

On a recent afternoon, the main campus of the Arizona Boys Ranch was silent. The neatly manicured lawns and playing fields were empty. As CEO Bob Thomas toured the grounds, the place appeared deserted.

Thomas recently took a drastic step to keep Boys Ranch's biggest clients: He's offering California counties a discount on Boys Ranch's services for about $2,400 per kid (down from $3,600), the amount that the State of California no longer pays.

"We can't afford it," he says. "We did it out of our hearts, not our brains."

Thomas thinks Boys Ranch will weather this storm.
"I believe this is a short-term political exercise," he says. "These counties need Boys Ranch. . . . Without Boys Ranch, they [the teens] end up in the California Youth Authority."

Thomas believes the CDSS decision won't last much past the California governor's race, when a new administration will come into office.

And even if it does, he adds, there are other states that want to contract with Boys Ranch, though he declines to name them.

"We're not going to turn our back on the kids," he says. "We might be going through a rough time for a while, but we'll be around."

Thomas concedes things are going to get worse. Some key personnel--Thomas calls them his "real blue-chip people"--will be let go; some out-of-state offices will be closed; and some unspecified Boys Ranch programs will be shut down. And some donors have told him they will no longer contribute because of what they've seen in the news.

Wrapping up the tour of the campus, Thomas visited one of the dorms where the remaining boys are housed. One kid sat playing Nintendo, blowing away his enemies with a giant, black revolver that filled the screen.

Chris Burkhart, a forward on the Boys Ranch basketball team, says he's not too worried about getting sent back home. He thinks he's at Boys Ranch until he graduates. With fewer kids coming, he's concerned about the number of kids who'll be on the basketball team. "I'm a little worried about next year's bench," he says.

Thomas laughed when he heard the comment. "Yeah," he said. "The CEO is a little worried about the depth of next year's bench, too."

Contact Chris Farnsworth at his online address: [email protected]

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Chris Farnsworth