Private juvenile center conceals abuse inquiries and pressures county to keep its business deal

Last spring, Caroline Mattson informed her superiors at Minnesota's largest private correctional facility for boys that three boys had told her they'd been sexually abused by an employee. They began an internal investigation, prompted either by that report or another.

But the leaders there — at Mesabi Academy in Buhl, Minn. — did not tell St. Louis County authorities about the allegations, a decision that avoided outside scrutiny and may have evaded state law. Six months later, in October 2015, county officials learned of the alleged incidents, which both triggered their own investigation and contributed to a decision to end a contract critical to Mesabi's ability to operate in Minnesota.

As county officials proceeded down those paths, however, Mesabi Academy and an influential politician muscled up.

After Mesabi Academy objected to a certain investigator being on the case, St. Louis County removed him. When the county alerted two other counties it had "health and safety" concerns about the facility, Mesabi threatened to sue. And shortly after a St. Louis County official announced the contract was ending, a powerful politician intervened on Mesabi's behalf and expressed concern about potential job losses at the Iron Range facility. The contract was renewed.

On Friday, county officials said they had closed their six-month investigation into Mattson's allegations without determining any maltreatment had taken place. They said they had insufficient evidence.

But St. Louis County also confirmed Mesabi Academy didn't report several allegations of sex abuse to authorities. State law required the academy to report such allegations to St. Louis County Child Protection or law enforcement within 24 hours of being told.

In all, the county said Friday it had closed its investigation into 20 allegations of maltreatment over the past 14 months, saying in each case that maltreatment could not be determined.

In at least three of those cases, it was clear that Mesabi Academy knew of allegations but did not report them to the county. It's not clear how many others it kept secret.

In one case, St. Louis County Child Protection reported Mesabi Academy conducted an internal investigation on March 30 and 31, 2015, into an allegation that a staff member had sexual intercourse with a 15-year-old. The staffer and the boy denied the incident occurred.

Documentation also showed that in two interviews with the child, Mesabi officials explained to him it was in his best interest if the investigation went nowhere.

The child was told "he was under investigation and if nothing came of the investigation that he would receive all of his points and it would not affect him in terms of privileges or phases. It was explained to him that as long as he behaved, this would not affect him in a negative manner," according to the summary data supplied by the county to APM Reports.

Mattson said Friday that she was shocked the county didn't substantiate any of the allegations. "I want this crap over there to stop because the only ones suffering at their hands is these kids and it's going to continue," she said.

Mesabi Academy can be a harsh and violent place. Workers say they sometimes fear for their safety and frequently break up fights among residents.

Since 2009, it has generated far more complaints about conditions and treatment than any of the other 60-plus juvenile facilities overseen by the Department of Corrections, an examination of records by APM Reports shows. Before the sex-abuse allegations emerged last spring, employees had been criminally charged with sexually abusing residents three times since 2000.

The seven largest juvenile residential treatment centers licensed by the Minnesota Department of Corrections

FACILITY	BEDS	COMPLAINTS	OPERATOR
MN Correctional Facility, Red Wing	189	2	State
Hennepin Co. Home School, Minnetonka	184	0	County
Mesabi Academy, Buhl	123	64	Private non-profit
Woodland Hills Residential Treatment Center, Duluth	84	3	Private non-profit
Northwestern MN Juvenile Facility, Bemidji	65	3	County
Boys Totem Town, St. Paul	56	1	County
Anoka County Juvenile Center, Lino Lakes	50	0	County

Mesabi Academy's nonprofit parent in Pennsylvania, KidsPeace, wouldn't make officials available to respond to questions Friday evening, saying it wanted to talk with county officials after reviewing the information.

In a written statement, it said: "We do note that in the material released by St. Louis County today, there were no instances cited where maltreatment was determined by their investigators. We are confident that we have followed all applicable laws, and have acted appropriately in all our interactions with St. Louis County."

Mesabi Academy operates in a century-old former high school at the edge of a northern Minnesota town of 1,000, not far from the ore pits of the Iron Range. It is licensed by the Minnesota Department of Corrections to house and treat up to 123 boys sent from all over Minnesota and other states and from a variety of sources — juvenile courts, social service agencies and parents seeking help for their children. Hennepin and Ramsey counties send the most residents.

Only about a dozen residential treatment facilities for youth in the nation are like Mesabi Academy — large places with secure areas to lock residents up, run by private companies licensed by the state and willing to take a mix of kids from a range of situations. It's an industry under pressure, partly because the nation is moving away from large, institutional settings for troubled youth and treating them closer to home. Some experts consider the model both outdated and ineffective.

Mesabi Academy was launched in 1998 with the help of subsidies from the state, St. Louis County and the Iron Range Resources and Rehabilitation Board.

This week judges, social workers and others from Hennepin County plan to visit the facility to learn more about its programs and discuss with staff members concerns they have about it.

But it was the allegation of sexual abuse reported early last year that raised worries among investigators about the conditions in the facility and whether Mesabi Academy is following the proper legal channels when it comes to reporting alleged maltreatment.

Following company protocol

Mattson, who worked for Mesabi Academy from September 2014 through October 2015, said the boys told her that a female employee took them into the locker room and performed oral sex on them. Mattson said that after each discussion, she tried to calm the boys.

"I told them that I would make sure the right people were told," Mattson said. "I told them I would watch to make sure nothing would make them uncomfortable; if something made them uncomfortable all they needed to do was tell me."

Mattson, 54, said she also documented the incidents in her daily shift reports. She said she thought she was following protocol, citing the KidsPeace training website, (1) which directs employees to tell managers, who will decide "if the police are called."

Three employees who worked there at the time said they knew Mesabi Academy was conducting an internal investigation. "Everybody got talked to by the supervisors" and "asked ... if they knew anything about it," said Bob Powers, who worked at Mesabi from March until October of last year. "I didn't. I was still fairly new, so I didn't know anybody's names, let alone allegations of anything."

One of the former employees interviewed by Mesabi Academy officials said the accused woman told him in May that she was being investigated but didn't sexually abuse the boys. During the internal investigation, the woman transferred to another unit.

APM Reports is not naming the woman because the investigation closed without charges. She didn't respond to efforts to reach her.

"They wanted to make sure you kept your mouth shut." Todd Willman, former KidsPeace employee

Current and former staffers at Mesabi Academy said in dozens of interviews that the facility routinely conducts internal investigations and discourages employees from reporting problems to outside law enforcement.

Todd Wilman, who worked at Mesabi Academy for 13 years, said there was a code of silence when it came to anything that would reflect badly on the company.

"They wanted to make sure you kept your mouth shut," Wilman said. "You didn't say nothing. And if it was reported outside the building, your so-called career could be ruined at that point, because you'd be fired. And it was also stated that they could make it tough enough where you couldn't find another job."

County starts its investigation

Mattson said she was never contacted by authorities after she made her report to her superiors. Six months after telling her supervisors about the abuse allegations, though, Mattson said a former colleague told her about another allegation of physical abuse. That prompted her to pick up the phone. On Oct. 30 last year, she called St. Louis County Child Protection.

Hours after her call, investigators Dennis Frazier and James Jago arrived at Mattson's home in Hibbing, Minn. Mattson had a pot of coffee and cookies waiting.

Over the next few hours, Mattson and her daughter, Nicole Morgan, who also used to work at Mesabi Academy, recounted the physical abuse of children they said they witnessed; sexual abuse by staff alleged by boys as young as 12, and their own fear that young, violent predators sent to Mesabi by the courts would attack them and each other.

"It's not a safe situation for those kids," she said.

Those allegations resulted in the investigation the county closed last week.

Investigator pulled off case

On Nov. 5, Frazier drove to Buhl to begin to investigate, according to his expense reports. Typical for any such investigation, Frazier requested a list of all of the residents at Mesabi Academy and a list of employees.

But Mesabi Academy leaders objected to Frazier's involvement in the case, according to a St. Louis County official with knowledge of the situation who agreed to speak only without being identified.

Frazier is the president of Local 66 of the American Federation of State, County and Municipal Employees. Another branch of the union, AFSCME Council 65, failed in its attempts to organize Mesabi Academy employees in May. The union lost the effort by 13 votes but filed an unfair labor practices complaint against Mesabi Academy.

On Oct. 30, the company and the union agreed to set aside the election and have another vote, which has not been held yet.

Despite calling Frazier a "great" child protection investigator, Ann Busche, the director of Public Health and Human Services for St. Louis County, took him off the case. "We didn't want any negative perceptions to hamper the investigation," she said.

Frazier declined comment when asked whether he was removed from the case because of his union involvement.

It took Mesabi Academy three weeks to deliver the lists of residents and employees to investigators. Busche, who retired last month, called the three-week response time to supply basic information "concerning."

KidsPeace threatens to sue county

As the investigation proceeded, Busche considered a serious change. (2)

In December, she told other counties that St. Louis County intended to pull out of its lead county contract with Mesabi Academy in part because of "health and safety concerns" at the facility. The contract outlines the age, IQ and other criteria for boys to be housed at Mesabi Academy, and the daily price for counties to send them there.

Having a lead contract with one county is a critical part of doing business for Mesabi Academy. It stands as an agreement with all participating Minnesota counties, allowing them to easily send kids there without negotiating separate agreements.

On Dec. 10, Busche sent an email (3) to 20 Minnesota counties and one Native American tribe that placed boys in Mesabi Academy. She said St. Louis County's contract with Mesabi Academy would be ending.

Officials with four counties — Ramsey, Wright, Itasca and Isanti — quickly responded, asking Busche whether there were problems with Mesabi. She told them that St. Louis County was ending its contract because the county used other facilities when it needed to find places for boys in trouble.

In fact, the county has renewed its contract annually for years, even though judges and social services workers in St. Louis County have sent only a few boys there in recent years.

In messages to officials in Wright and Ramsey counties, Busche added a critical detail. "We do have an open investigation that is raising health and safety concerns," Busche wrote in an email to Ramsey County Contract Manager Sue Illg. "No determination has been made and the investigation is ongoing. The facility is cooperating with us."

The state law governing lead county contracts requires county officials to disclose such concerns to other counties. But in follow-up messages to Itasca and Isanti counties a few days later, Busche didn't disclose the concerns over health and safety. The only reason she cited in those emails was that St. Louis County didn't send many kids to Mesabi and saw no benefit from holding the contract.

There was another reason for her failure to include that information: KidsPeace had threatened St. Louis County with a lawsuit claiming defamation and a violation of state data practices law, said the St. Louis County official who agreed to speak only without being named. Busche declined comment on the litigation threat.

But she still wanted out and hoped that another county, like Hennepin or Ramsey, would be willing to take over the contract. In fact, Paul Jacobson, Mesabi's executive director, contacted Hennepin County to see if it would be willing to take over as lead county. (4) Hennepin is the only Minnesota county with its own contract with Mesabi Academy.

On Jan. 5, Busche was so certain St. Louis County was ending the contract that she sent an email to APM Reports confirming the decision.

Rukavina intervenes

An influential county commissioner had other ideas, though.

Tom Rukavina, a former state legislator, was one of the architects of the deal to bring Mesabi Academy to Minnesota 18 years ago. He wanted Busche's decision reversed.

In a public commissioners' meeting in Duluth the day of Busche's email to APM Reports, Rukavina expressed concerns about her decision. He was worried about jobs, he said, after getting a phone call from an unnamed Mesabi Academy administrator.

"We don't need the Iron Range to lose another 126 jobs," he said, referring to the number of jobs at Mesabi Academy and the economic risk to the Iron Range. "If St. Louis County doesn't continue as the host county ... it might screw everything up."

Commissioner Steve Raukar seemed to know about the investigation, noting that there were a "number of sensitive or personnel issues" at Mesabi and that he believed the state was involved. Rukavina asked that Busche and other commissioners from the Iron Range, including Raukar, meet privately to resolve the issue. They met that day.

The next day, Jan. 6, Busche abruptly changed her mind. She would continue the contract (5), the result of political "pushback" from Rukavina, according to the St. Louis County official, and because no other county wanted the contract.

In an interview, Busche said she felt no pressure to reverse her decision. "It's clear that this had gotten more complicated and more political, but it was ultimately my decision to renew the host county contract," she said.

Busche said she no longer has health and safety concerns with Mesabi Academy. And she said she didn't have those worries when she decided to continue the lead county contract in January despite the open investigation into the 20 maltreatment allegations. She said in April the facility has been fully cooperative with St. Louis County investigators.

Mesabi Academy has recently increased the number of incidents it is reporting to Busche's office, a tally of documents received by the county shows. Since the beginning of the year, county Child Protection has already received at least seven such reports. Most were deemed too minor to warrant a formal investigation. One investigation remains active.

Rukavina did not return calls for comment on his involvement in the contract dispute. When asked about Mesabi Academy in January, he said he knew there was an issue involving the county being a fiscal agent but denied knowing much about the issue.

"Don't know 'em from Adam," Rukavina said.

Rukavina has been a backer of Mesabi Academy since its inception. In 1998, he and other IRRRB board members voted to authorize $1 million in loans to fund it.

Parents not told

Not only did Mesabi Academy not report the three sex abuse allegations to the county, at least two guardians for three boys allegedly involved said they were not told by the county about any investigation, a step required by law. Busche said she couldn't comment on specific cases but said there are times when the county, not a parent, is the official guardian. That would mean it, not a parent, must be informed of such an inquiry.

One boy's mother, who shares custody of the boy, learned about the investigation when she saw on the visitor's log at a juvenile detention center in another county that a sheriff's deputy and a social worker were visiting her son. (The boy had been sent there on a probation violation.) APM Reports is not identifying the boy or his mother because of the sex abuse allegation.

In a letter (6) on Feb. 22, Busche told the boy's grandmother, who shares custody, that investigators had recently received a report that her grandson "may have been sexually abused by having sexually contact [sic] with Mesabi Academy KidsPeace staff." The letter said the county ended the investigation because the alleged offender "denied any sexual contact" with the boy and the boy denied having any sexual contact with the staffer.

"I did stuff with that staff but I'm not telling no cop." 15-year-old Mesabi Academy resident to his mother

Furious, the boy's mother appealed the decision and later was told the case had been reopened. She told investigators that her son had told her he had been abused but didn't tell investigators initially because he was afraid.

On March 18, the mother gave APM Reports a recording of a phone call with her son. On the recording, the 15-year-old boy says that he "did stuff with that staff but I'm not telling no cop." In another phone call earlier that week, he urged her not to pursue an appeal, and told her he didn't see what allegedly happened to him at Mesabi as a big deal. "I did a year and a month in there," he told her. "There's no problem with having sex with a staff."

APM Reports requested an interview with the boy. The request was denied by the head of the juvenile facility where the boy was living because he didn't have approval from the boy's county probation officer.

The boy's mother said the probation officer and the St. Louis County worker investigating the case discouraged her from talking to the media because it could compromise the investigation.

Another boy who allegedly told Caroline Mattson about sex abuse denied to APM Reports any inappropriate sexual contact with the staffer at Mesabi. APM Reports has been unable to interview the third boy, who now lives in another state.

Mattson wouldn't divulge the names of the boys, but APM Reports traced them through court documents, social media and interviews with former residents.

The chief licensor of Mesabi Academy, the Minnesota Department of Corrections, issued a statement late Friday saying it had been informed by St. Louis County of the investigation being closed.

"We will review their report and recommendations and take any licensing action as appropriate," the department said.

In January, Deputy Commissioner Ron Solheid of the Minnesota Department of Corrections told APM Reports that juvenile facilities should report allegations of abuse to authorities.

"We would have grave concerns with [not reporting] because that does need to get to child protection," Solheid said. "That's not for them to determine."

Busche said she'd like to see the process for investigating child maltreatment changed. She said it would be better for the state Department of Corrections, not counties, to take the lead on investigations.

More complaints than other facilities

A review of data showed the Minnesota Department of Corrections received 64 complaints about Mesabi Academy between Jan. 1, 2009, and March 14, 2016. The complaints include allegations of staffers assaulting clients, children having sex and boys exposing themselves to other children and staff. The information does not make clear how every individual complaint was resolved. The number of complaints at Mesabi Academy is substantially more than at any other juvenile facility licensed by the Minnesota Department of Corrections, even those with greater capacity.

Two employees and a volunteer at Mesabi Academy have been charged in the past with criminal sexual conduct with a minor.

The most recent case came in 2012. An employee named Mary Loumanen pleaded guilty to third-degree criminal sexual conduct after being accused of performing oral sex on a 16-year-old.

Mattson has been on medical leave from KidsPeace since October. She says she injured her hand after being attacked by a boy in the facility.

"We are confident that we have followed all applicable laws, and have acted appropriately." KidsPeace statement

KidsPeace notified her last month that she would no longer be considered an employee after April 21 because her benefits had run out. She said a worker's compensation judge ruled April 22 that KidsPeace is required to pay benefits to her as a result of lost work and her injuries.

Despite the tumult, Mattson said she's disappointed she can't return to work at Mesabi Academy. She said she'll miss the boys she was hired to help.

The mother whose son told her he'd had sex with the staff member was disappointed with the county's decision to close the investigation.

"I think it's bogus," the mother said. "Now this lady is going to get away with everything. Now she gets to work with kids again if she wants, because it'll be taken off her record ... Who's the next kid she hurts?"

Deena Winter, Will Craft and Emily Haavik contributed to this report.