Virginia is in the final stages of reviewing proposals that would privatize a mental health treatment facility for sex offenders who can be held indefinitely under state law, according to state officials and a private prison company seeking a contract to operate the institution.

The GEO Group, the nation's second-largest private prison operator, and Liberty Healthcare Corp., which manages mental health institutions, are vying to manage the 300-bed state facility, known as the Virginia Center for Behavioral Rehabilitation. Both companies bring checkered histories in their experiences managing a similar facility in Florida, according to reports in that state.

The proposed contract in Virginia would give a private company authority over convicted sex offenders enrolled in a controversial program known as "civil commitment," through which the state designates some inmates sexually violent predators. That label gives the state the right to hold those inmates indefinitely while administering mental health treatment.

Twenty states and the District of Columbia employ the process, which the U.S. Supreme Court has upheld as constitutional in three separate cases. But critics contend that ceding control of the process to a profit-making corporation poses an enormous conflict of interest: The company would have a financial incentive to hold onto sex offenders for as long as possible while skimping on required mental health services.

"These people could be held forever," said Tracy Velazquez, executive director of the Justice Policy Institute, a non-profit group that is critical of the rise of private involvement in the nation's penal system. "There's a disincentive for the companies to provide treatment, because the inmates continue to be customers. There is no end of sentence."

A spokesman for the GEO Group said the company would administer the facility in the public interest.

"Under public-private partnerships, private operators provide high-quality management services of correctional, detention, and residential treatment facilities under strict and constant oversight and monitoring from state officials," said Pablo Paez, a GEO spokesman, in an emailed statement. "These services have absolutely no bearing on sentencing policies or decisions which are exclusively made by policymakers."

In a recent conference call with investors, a GEO Group executive, Jorge Dominicis, said he expects Virginia to decide on his company's contract proposal by July.

Liberty Healthcare, a privately owned company based in suburban Philadelphia, did not respond to requests for comment.

The Virginia Department of Behavioral Health and Developmental Services, which oversees the sex offender facility, declined to comment on the deliberations, but confirmed that a formal review of the privatization proposal is in the later stages.

For the private prison industry, the prospect of overseeing the sex offender facility beckons as a lucrative opportunity. Virginia spent more than $24 million running its civil commitment program last year. The number of inmates landing in the program is projected to more than double over the next four years, as the state continues its intensified scrutiny of sex offenders.

Virginia began its civil commitment program nine years ago in what it portrayed as an effort to protect the public. Since then, about 300 sex offenders have been sent to the special facility, located in the town of Burkeville, about 60 miles southwest of Richmond. Only 35 people have been released, according to state officials.

As costs for the program have risen dramatically, the private prison industry has stepped forward with proposals to assume control, promising savings. Under a novel law, Virginia must review any proposal submitted by a private company seeking to take over many state functions. In Feb. 2011, the GEO Group bid to assume management of the facility. Liberty soon put in a competing proposal.

Should officials at the Department of Behavioral Health opt to accept one of the proposals, they would be required to forward them to a commission comprised of state legislators and cabinet members for additional review. The commission may comment, but is not empowered to alter the decision, which would remain with the department, according to state law.

Virginia's deliberations have advanced without official public input or legislative hearings. When The Huffington Post this week contacted Virginia Del. David Albo -- a Republican who chairs the state legislative committee that oversees criminal justice issues -- he said he was unaware of a proposal to privatize the Burkeville facility.

"Why would we allow this decision to be made without any legislative input whatsoever?" said Mary Devoy, executive director of Reform Sex Offender Laws of Virginia, an advocacy group that opposes the privatization proposal.

The GEO Group has in recent years injected significant contributions into Virginia political campaigns. In the state's gubernatorial campaign three years ago, the GEO Group was one of the largest single contributors to the Republican who won, Bob McDonnell, giving him a total of $28,000, according to state records. A spokesman for McDonnell declined to respond to questions about the GEO Group's donations and any influence on its privatization proposal, saying only that the governor was "playing no direct role in this process."

The GEO Group has made smaller contributions to Virginia legislative leaders. A GEO Group mental health subsidiary, GEO Care, has spent more than $13,000 on lobbying related to the sex offender facility during the past two years, according to state records.

Those who follow on the intersection of public policy and campaign finance say the process underway in Virginia appears to be a classic case of contributors gaining access to tilt policy in their favor.

"For them to come in and make an unsolicited offer after they gave a campaign donation does not really pass the smell test," said Edwin Bender, executive director of the National Institute on Money in State Politics, a nonpartisan group that tracks political influence at the state level. "That just stinks, because it's very obvious that there's a profit motive here. It's not doing something in the public interest."

A GEO Group spokesman did not directly respond to assertions that political contributions were part of an attempt to curry favor in Virginia, but argued that any decision by the state would be on the merits of the company's proposal.

"That contract is part of a competitive procurement in which GEO and other companies can participate," the company spokesman said. "The award of a contract to GEO or any other company who bids on it would be based solely on the proposals submitted under said competitive procurement process."

He added that GEO is not unique in contributing to political campaigns.

"We have participated in the political process in states across the country and nationally -- as do a variety of organizations, including private corporations and organized labor organizations –- through contributions to political candidates and parties who support different public policy viewpoints," the GEO Group spokesman said.

Both companies competing to take over Virginia's center for sex offenders tout their experience running a similar institution in Florida, which has the only fully privatized civil commitment system in the nation. The GEO Group currently holds the contract to operate the Florida Civil Commitment Center, located south of Tampa. Liberty held the contract before GEO, but the state opted not to renew the agreement in 2006, following a series of state inspector general's reports that detailed widespread mismanagement.

Residents at the facility regularly made and drank homemade alcohol, according to a 2005 inspector general's report from the Florida Department of Children and Families, which oversaw the contract with Liberty. Several inmates admitted to being intoxicated during the investigative interview with the department.

The report described an interview with a drunken inmate who said he had been in a "brutal" fight after drinking earlier in the day: "His eyes were bloodshot, he smelled of alcohol, and he admitted he was still drunk and could not talk at that time. He was badly beaten and sustained a broken nose."

State probes found that a top manager in the facility had been altering and falsifying reports of security incidents, withholding troubling details of inmate injuries that resulted from staff neglect.

The GEO Group took over the facility in 2006. Two years later, a convicted rapist escaped, eluding local police for more than a day, according to news reports. In 2010, a mental health counselor who worked for GEO at the facility was arrested by the local sheriff's office and accused of having a sexual relationship with an inmate.

The GEO Group spokesman said the company was proud of its "long-standing record of quality operations," including at the Florida center, which he said has provided "significantly improved outcomes, all while delivering significant savings for Florida taxpayers."

"While no correctional, detention, or residential treatment facility -– be it public or private -– is immune from operational challenges, our company has always strived to achieve the highest standards in the industry," he said.

Both GEO and Liberty have promised they can save Virginia substantial amounts of money -- a central concern for state lawmakers, who have seen the costs of the civil commitment program multiply nearly tenfold in less than a decade. The soaring costs are the result of a surge of new entrants to the sex offender program following the Virginia General Assembly's 2006 passage of laws that greatly expanded the pool of potential inmates.

One new law prescribed specific questions the state must use in assessing the likelihood that a given sex offender will commit a similar crime following release. Among them: "Have you ever lived with a lover for at least two years?" "Any male victims?" and "Any stranger victims?"

The state uses the answers to compute a score intended to serve as a snapshot of risk. The state is required to administer the test on all inmates convicted of any one of 28 different sexual-related crimes, including rape and aggravated sexual battery. Scores above a certain threshold trigger a mandatory state review that can result in referral to the Attorney General's Office and, eventually, civil commitment.

Since the General Assembly passed the law, the number of inmates referred to the sex offender facility has increased dramatically -- from about 10 per year from 2003 to 2006 to about 57 annually from 2007 to 2010, according to a state legislative audit report.

A report by the research arm of the Virginia legislature warns that any savings that result from corporate management of the facility could come at the expense of required mental health treatment.

"The incentive to make a profit tends to encourage efficiency and quick decision-making that often results in lower costs," the report asserts. "However, the same profit motive could supersede treatment and safety considerations."

The Florida facility that GEO operates has only one-third of the staff devoted to each patient than is standard in Virginia, according to the report.

The same report notes that staff at Virginia's treatment facility have concerns about inadequate security amid overcrowded conditions, quoting one employee: "I was in some situations where it was downright dangerous and it could have gotten out of hand very quickly."

Critics assert that Virginia is effectively compromising the well-being of one slice of its incarcerated population in order to hand a profit opportunity to an influential private interest.

"The idea here is, 'This is a problem. We can't afford this system, but politically we don't have the will to change the system, so let's just give it to a private company and wash our hands of it,'" said Velazquez, the Justice Policy Institute executive director. "Let's take the people who we care about the least in society, lock them up forever and let people make money off of it."