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PLN editor quoted re Obama appointment of Stacia Hylton to US Marshals Service

Washington Times, Jan. 1, 2010.
PLN editor quoted re Obama appointment of Stacia Hylton to US Marshals Service - Washington Times 2010

Marshals Service nominee may have a client conflict

By Jim McElhatton

The Washington Times

8:36 p.m., Monday, October 25, 2010

Between leaving her post as federal detention trustee and her recent nomination as the next U.S. marshal, Justice Department veteran Stacia Hylton got a consulting contract with one of the largest private correctional companies in the country, records show.

The arrangement with the Florida-based GEO Group Inc., which has carried out tens of millions of dollars in contracts for the U.S. Marshals Service, was disclosed in a recent financial report obtained by The Washington Times through the U.S. Office of Government Ethics.

One prominent prison industry observer said the ties raise concerns about conflicts of interest.

"The massive conflicts of interest with Ms. Hylton having been employed by GEO Group typify the revolving door of corporate lobbyists and government employees that President Obama promised to end if elected," said Paul Wright, editor and co-founder of Prison Legal News, which covers the prison industry.

Mr. Wright said he was concerned that Ms. Hylton would "be in a position to further reward the GEO Group with taxpayer money and little accountability or oversight."

"The real and apparent conflict of interest is as massive as it is obvious," he said.

While Ms. Hylton is not a registered lobbyist, the publicly traded GEO Group, which did not respond to messages seeking comment, has spent hundreds of thousands of dollars lobbying Congress and the Justice Department on prison and budget issues in recent years.

Under Mr. Obama's ethics rules, appointees are prohibited for two years from working on specific matters involving recent clients unless they obtain special waivers. So far, more than two dozen high-level appointees have been given full or partial waivers from the ethics rules.

Ms. Hylton could not be reached for comment, and the U.S. Marshals Service and the Justice Department did not respond to messages about her nomination. A White House official reached on the matter Monday said Ms. Hylton would not require a waiver.

"After review, it was determined that Ms. Hylton did not need a waiver for her consulting client, the GEO Group, as she could easily be recused from participating in particular matters in which that client was a party," said the official.

"This recusal, along with the Obama administration's ethics pledge and other ethics restrictions, will ensure that she can serve ably and effectively as director of the U.S. Marshals Service."

Ms. Hylton wasn't working as an employee of the company, but provided services to GEO Group through her consulting company, Virginia-based Hylton Kirk & Associates. The GEO Group is listed as the only client on Ms. Hylton's financial disclosure form, though government ethics rules require nominees to report only clients who pay at least $5,000.

She listed $112,500 in income from her company through "consulting services for detention matters, federal relations and acquisitions and mergers" from March through July of this year.

But Ms. Hylton also noted that pursuant to a contract, she will receive funds from the GEO Group for services sometime prior to joining the government.

Contracts with the Marshals Service generate an important source of revenue for the GEO Group. During an earnings conference call earlier this year, GEO Chairman and Chief Executive Officer George Zoley noted that among federal contracts, "the primary driver for growth continues to be the incarceration of criminal aliens" with the U.S. marshals and federal Bureau of Prisons housing aliens facing criminal charges or those serving time as a result of a conviction.

In a regulatory filing with the Securities and Exchange Commission (SEC), the company noted that about 13 percent of its consolidated revenues for the fiscal year that ended Jan. 3 came from U.S. marshals. The company reported consolidated revenues for the year of $1.1 billion.

While not referring to the GEO Group by name, Ms. Hylton told the Senate Judiciary Committee in a questionnaire that any potential conflicts of interest will be resolved under the terms of an ethics agreement with the government.

"In connection with the nomination process, I have consulted with the Office of Government Ethics and the Department of Justice's designated agency ethics official to identify any potential conflicts of interest," she wrote.

In addition, Ms. Hylton said upon her confirmation, her consulting company would remain dormant except to comply with any legal and tax requirements while it's inactive. She also said her $105,000 annual federal retirement pay would cease upon her appointment.

Ms. Hylton has held numerous high-ranking positions at the Justice Department over the years, including acting deputy director and assistant director at the U.S. Marshals Service. She worked as chief of judicial security during the first World Trade Center bombing trials. From 1990 to 1993, she was a witness security inspector.

More recently, as federal detention trustee from 2004 to earlier this year, she oversaw a $1.5 billion budget.

"If confirmed as the next director of the United States Marshals Service, I would be able to utilize fully my talents, energy and expertise to ensure the agency's mission is carried out with good judgment and sound decision-making skills," Ms. Hylton wrote to the Senate Judiciary Committee.