Full opinion text
MEMORANDUM OPINION AND ORDER FOLLOWING TRIAL PRATT, Chief Judge. I. INTRODUCTION The issue to be resolved in this case is whether the contractual relationship between the state of Iowa Department of Corrections (“Dept, of Corrections”) and InnerChange Freedom Initiative (“Inner-Change” or “IFI”) impermissibly advances religion in violation of the Establishment Clause of the First Amendment. The Court conducted a bench trial on the matter over a fourteen-day period from October 24, 2005, to November 4, 2005, and then from November 28, 2005, to December 1, 2005. The trial included a site visit to the Newton Correctional Facility (“Newton Facility”) where the Inner-Change inmate rehabilitation program is located. Post-trial, the parties filed their Proposed Findings of Fact and Conclusions of Law (Clerk’s Nos. 354 and 361), and subsequent Responses (Clerk’s Nos. 362 and 363). This Memorandum and Order constitutes the Court’s findings of fact and conclusions of law as required under Federal Rule of Civil Procedure 52(a). A separate document entry of the judgment ■will also be filed. Fed.R.Civ.P. 58(a)(1). To the extent any motions made under Rule 52(c) were deferred by the Court and remain outstanding, they are resolved by this Memorandum and Order. The matter is fully submitted. The Plaintiffs seek declaratory and injunctive relief as authorized under 42 U.S.C. § 1983. At the outset of this case, the Plaintiffs sought a judicial declaration that the state Defendants violated the United States and Iowa Constitutions by authorizing the operation of InnerChange in the Newton Facility and that Inner-Change and Prison Fellowship Ministries (“Prison Fellowship”) violated the United States and Iowa Constitutions, acting under the color of law, by discriminating against inmates based on their religious beliefs in the offering and providing of a values-based pre-release program and by discriminating in employment based on religion with respect to positions partly financed by government funds. As mentioned, supra note 1, the employment claim is now moot. The injunctive relief sought by the Plaintiffs is a complete prohibition on In-nerChange operating within the Iowa correctional system. Short of that, the Plaintiffs seek a prohibition on any state funding — direct or in-kind — to support the InnerChange program in any manner. In the alternative, the Plaintiffs urge that should InnerChange be allowed to continue in Iowa, then a similar type of values-based program should be made available to non-InnerChange inmates from a secular standpoint and from the standpoint of other faith traditions. The Plaintiffs also seek the reinstatement of Plaintiffs Chandler and McKeag to Unit E of the Newton Facility where they were housed before the implementation of the Dept, of Corrections — InnerChange contract. The Plaintiffs seek the return of state funds used to pay InnerChange and the return of monies taken from the Inmate Telephone Rebate Fund (“Telephone Fund”), by way of a pro rata refund to each inmate account in an amount equal to that taken to fund the InnerChange program at the Newton Facility. The Plaintiffs dropped their request for nominal damages against the named individual state Defendants. See Stipulation of Dismissal of Req. for Nominal Damages (Clerk’s No. 235). A decision about whether the Establishment Clause is violated by the Defendants’ actions does not entail a decision about the ultimate truthfulness of religion, nor the truthfulness of the theological underpinnings of the religious denominations and faith groups represented in this case. See Lemon v. Kurtzman, 403 U.S. 602, 625, 91 S.Ct. 2105, 29 L.Ed.2d 745 (1971) (Lemon I) (“The merit and benefits of these [programs], however, are not the issue before us in these cases. The sole question is whether state aid ... can be squared with the dictates of the Religion Clauses.”). In what appears now to be a bit of theological irony, given that the doctrine of separation between church and state is often viewed as a secular product, Thomas Jefferson rooted his ideas about that doctrine in the religious belief “that Almighty God has created the mind free ... [and, therefore] the Holy Author ... chose not to propagate [religion] by coercion ... as was in his Almighty power to do____” See Virginia Religious Freedom Act, 1786, in The Complete Bill of Rights: The Drafts, Debates, Sources, & Origins 51 (Neil H. Co-gan ed., 1997). This Court makes no such assertions about the ultimate source of the law it must interpret. Just as the Court asserts no theological expertise in this matter, the Court is also not an expert in the field of prisoner rehabilitation. The central issue presented before this Court, therefore, is not whether Iowa inmates can be helped in their rehabilitation by religion, but whether the State of Iowa’s contract with InnerChange shackles the Plaintiff taxpayers and inmates in a way that violates their rights under the United States and Iowa Constitutions. II. JURISDICTION A review of the Court’s subject matter jurisdiction is always warranted, regardless of the stage of litigation. See Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583, 119 S.Ct.. 1563, 143 L.Ed.2d 760 (1999) (“[Sjubject-matter delineations must be policed by the courts on their own initiative even at the highest level.”). The Court has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1343(a)(3), as well as supplemental jurisdiction over the state claims under 28 U.S.C. § 1367(a). Its authority to grant declaratory relief and further remedy is contained in 28 U.S.C. §§ 2201 and 2202. Venue is proper under 28 U.S.C. § 1391(b). Despite a previous ruling by this Court on the issue, the Defendants raised the matter of Plaintiffs’ standing at trial. At the close of the Plaintiffs’ case-in-chief, though conceding that the inmate Plaintiffs had standing, Defendants argued that the Iowa taxpayer Plaintiffs and Americans United for Separation of Church and State (“Americans United”) failed to offer sufficient evidence to meet the required constitutional standing elements. Trial Tr. at 2038^40. “Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of subject matter, the court shall dismiss the action.” Fed. R.Civ.P. 12(h)(3). Counsel for the Defendants stated: “[TJhough Plaintiffs had declarations to get over the issue of standing for taxpayers [at the summary judgment stage], they have not put in a single instance of a person coming into court in any way, shape or form and stating that they are a taxpayer and that they pay funds to the State of Iowa.” Trial Tr. at 2038-40. In an Order (Clerk’s No. 327) dated November 17, 2005, the Court denied the Defendants’ motion, made at trial, to dismiss the claims of the taxpayer Plaintiffs based on standing. In doing so, the Court relied on its Order, filed on April 29, 2005, granting Plaintiffs’ motion for summary judgment on the issue of standing. See Mem. and Order on Cross Mot. for Summ. J. at 4-14 (Clerk’s No. 212). The Court, rather than relying on its April 2005 Order to decide the Defendants’ renewed motion regarding standing, should have reconsidered the Defendants’ Rule 12 motion, considering all the evidence received up to the time of the renewed motion. See Delorme v. United States, 354 F.3d 810, 815 (8th Cir.2004) (“The burden to show standing is not a mere pleading requirement, ‘but rather an indispensable part of the plaintiffs case.’ ”) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). “Each and every element of the standing requirements ‘must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation.’ ” See Delorme, 354 F.3d at 815 (quoting Lujan, 504 U.S. at 561, 112 S.Ct. 2130). “Strict compliance with this jurisdictional standing requirement is mandated.” See Delorme, 354 F.3d at 815 (quoting John son v. Missouri, 142 F.3d 1087, 1088 (8th Cir.1998) (internal citation omitted)). Notwithstanding the rule to consider standing in the context of each stage of the litigation, the Court, in its April 2005 Order, did not simply rely on the “declarations” of the taxpayer Plaintiffs themselves regarding standing, but also relied on the Defendants’ own Statement of Undisputed Material Facts (Clerk’s No. 94). Pis.’ Ex. 479. As their second undisputed fact in this case, the Defendants claimed that “Plaintiffs Carol Delp, Ardene McKeag, Dorothy Redd, and Sandra Sobotka (collectively “Taxpayer Plaintiffs”) are residents of Iowa who pay taxes to the State of Iowa.” Defs.’ Statement of Undisputed Material Facts in Supp. of Defs.’ Mot. for Summ. J. Based Upon Lack of Subject Matter Jurisdiction (Clerk’s No. 94) ¶ 2 (Pis.’ Ex. 479). Defendants’ third undisputed fact is that “Plaintiff Americans United for Separation of Church and State (“AU”) is a non-profit advocacy organization whose self-described purpose is to preserve the constitutional principle of church-state separation. AU has members who reside in and pay taxes to the State of Iowa.” Id. ¶ 3. The Plaintiffs’ response to the Defendants’ statement of facts clarified that Plaintiffs Ardene McKeag, Dorothy Redd, and Sandra So-botka did not assert they were Iowa taxpayers' — a fact that was then admitted by the Defendants — thereby leaving Carol Delp as the named Iowa taxpayer Plaintiff. Defs.’ Reply to Pis.’ Resp. to Defs.’ Statement of Undisputed Material Facts in Supp. of Defs.’ Mot. for Summ. J. Based Upon Subject Matter Jurisdiction (Clerk’s No. 131) ¶ 2 (Pis.’ Ex. 481). As for Americans United, the Plaintiffs made no further clarifications to the Defendants’ undisputed claim that Americans United is an organization that advocates for the principle of church-state separation with members who reside in and pay taxes to the State of Iowa. Id. ¶ 3. The Defendants cannot argue, as they did when objecting to the inclusion of pretrial admissions as evidence, that these statements were simply made for the sake of summary judgment. Rather, by making a statement of undisputed fact, the Defendants were telling the Court that it need not concern itself with these jurisdictional or otherwise material facts as they were admitted by the adverse party. “By presenting to the court ... a pleading, written motion, or other paper, an attorney '... is certifying that to the best of the person’s knowledge, information, and belief, formed after inquiry reasonable under the circumstances ... ’ the factual contentions have evidentiary support....” Fed.R.Civ.P. 11(b)(3). The Court takes the Defendants at their word. Nothing changed regarding these facts at trial. The Defendants did not withdraw their previous statements or notify the Court they wished to do so when making their Rule 12 motion. The Defendants also did not argue that the taxpayer and organizational Plaintiffs failed to meet the other elements of constitutional and prudential standing. Even if they had so argued, the evidence offered at trial shows that the taxpayer and organizational Plaintiffs suffered a concrete, imminent, and particularized injury in fact, that the injury is traceable to the Defendants, and that the injury can be redressed through a remedy ordered by this Court. Lujan, 504 U.S. at 560-61, 112 S.Ct. 2130; see also Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984) (affirming that a court should also assure prudential elements are met — that one litigant is not raising another’s legal rights, that the grievance is particularized, and that the complaint falls within the zone of interests protected by the law invoked). Accordingly, after reviewing all the evidence entered at the close of the Plaintiffs’ case-in-chief, the Court finds that it retains subject matter jurisdiction over the claims of the taxpayer and organizational Plaintiffs. As stated above, the Plaintiffs clarified in their responses that Ardene McKeag, Dorothy Redd, and Sandra Sobotka are not Iowa taxpayers, or at least are not asserting that fact. Of course, given the reasons for, and the nature of, the remedy requested, the exclusion of these three Plaintiffs would not change the remedial outcome. Nevertheless, they have a right to bring their claims alongside the other Plaintiffs because they retain standing as contributors to the Telephone Fund. See Amended Compl. (Clerk’s No. 44) ¶¶ 14, 15a, 15b (setting forth their claims, describing in great detail their relationship with Dept, of Corrections inmates, and stating these plaintiffs contributed and continue to contribute to the Telephone Fund). The Defendants argued that any standing based on contributions to the Telephone Fund is without merit because “[n]o one came forward and said they were putting money into the telephone fund and using the telephone fund.” Trial Tr. at 2039. Again, based on the Defendants’ own statement of undisputed material facts, the Court relies on their assertion that “[all] the Plaintiffs have deposited money into the telephone accounts of the Inmate Plaintiffs, and this money was spent by the Inmate Plaintiffs to make telephone calls, thus resulting in profits that funded the Inmate Telephone Rebate Fund.” Statement of Undisputed Material Facts in Supp. of Defs.’ Mot. for Summ. J. Based Upon Lack of Subject Matter Jurisdiction ¶ 7 (Pis.’ Ex. 479); see also Defs.’ Reply to Pis.’ Resp. to Defs.’ Statement of Undisputed Material Facts in Supp. of Defs.’ Mot. for Summ. J. Based Upon Subject Matter Jurisdiction (Clerk’s No. 131) ¶ 7 (Pis.’ Ex. 481) (repeating the undisputed fact). Accordingly, no further evidence was necessary at trial to convince the Court that the Plaintiffs all contributed to the Telephone Fund. Contribution, however, is not enough. To be conferred standing, the Telephone Fund Plaintiffs must also show a concrete injury caused by the Defendants for which there is a remedy. The Defendants argue that the Plaintiffs can show no actual injury — and, therefore, have no standing to challenge the Dept, of Corrections’ decision to allocate funds to InnerChange from the Telephone Fund— because Iowa statutory and regulatory law gives the Dept, of Corrections discretion to use the Telephone Fund “for the benefit of inmates.” See Iowa Code § 904.508A; Iowa Admin. Code r. 201-20.20. The Defendants argue that this case is analogous to Arney v. Simmons, where the court held that inmates lacked a protected property interest in the use of inmate telephone funds because the authorizing state statute did not mandate that all expenditures from an inmate benefit fund had to benefit inmates directly. See 923 F.Supp. 173, 177-78 (D.Kan.1996). Because the plaintiffs in Amey were alleging a § 1983 claim, the court specifically noted that for the claim to be valid, “[the plaintiffs’] allegation of error in defendant’s management of the DOC-IBF [Department of Corrections Inmate Benefit Fund] ... must be of constitutional dimension.” Arney, 923 F.Supp. at 177. Since the court found that the state statute did not “substantively restrict the discretion of state officials,” no constitutionally protected property interest arose in the management of the DOC-IBF. Id. The language of the state statute and regulations in this case — providing that the Telephone Fund be used for the benefit of prisoners — creates the legitimate expectation that the Telephone Fund cannot be taken pursuant to an illegal state policy. The Plaintiffs have presented sufficient evidence, at each respective stage in the litigation, that the state Defendants erred in administering the Telephone Fund by using its proceeds to pay InnerChange and Prison Fellowship in violation of the Establishment Clause, which specifically limits how state or federal government funds can be spent. See, e.g., Flast v. Cohen, 392 U.S. 83, 103, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968) (“Our history vividly illustrates that one of the specific evils feared by those who drafted the Establishment Clause and fought for its adoption was that the taxing and spending power would be used to favor one religion over another or to support religion in general.”). Regardless of the amount of discretion available to the Dept, of Corrections under Iowa law to administer the Telephone Fund, that discretion does not extend to the violation of the establishment of religion clauses contained in the state and federal constitutions. Accordingly, because the Telephone Fund contributors have a protected interest in the funds being used legally for the benefit of prisoners, the Court retains jurisdiction over the former taxpayer Plaintiffs Ardene McKeag, Dorothy Redd, and Sandra So-botka as the Telephone Fund Plaintiffs. III. STATEMENT OF FACTS A. The Transformational Model The facts presented here encompass the entire history of the InnerChange program in Iowa. The Defendants have, throughout the litigation, taken the position that the Court should only consider evidence of current InnerChange policies and practices in its analysis, arguing that a focus on former contracts and circumstances is fruitless. The Defendants cite City of College Station v. City of Bryan, 932 F.Supp. 877, 885 (S.D.Tex.1996) for their proposition that a “[c]ourt must look to the facts in existence at the time an injunction issues .... ” City of College Station was an anti-trust and tort preliminary injunction case involving a dispute over electricity transmission fees. This case, however, involves the Establishment Clause, which necessitates a review of the entire history of the challenged public funding. See Zelman v. Simmons-Harris, 536 U.S. 639, 655, 122 S.Ct. 2460, 153 L.Ed.2d 604 (2002) (reminding courts that an Establishment Clause analysis takes place from the perspective of the “the reasonable observer” who must be “familiar with the full history and context” of the challenged program). The historical practices in this case, even those that have been discontinued, shed considerable light on the state’s purpose in implementing the InnerChange program, the actual effect of the state’s funding, and whether the funding results in an improper entanglement with religion. Lemon I, 403 U.S. at 612-13, 91 S.Ct. 2105. The InnerChange program was developed and is operated by Prison Fellowship, a 501(c)(3) Christian non-profit corporation incorporated in the District of Columbia, “whose mission is to exhort, equip and assist the Church in its ministry to prisoners, ex-prisoners, victims, and their families, and in its promotion of biblical standards of justice in the criminal justice system.” Pis.’ Ex. 73 (Field Guide at 2). In addition to Iowa, InnerChange operates treatment programs in Texas, Minnesota, Kansas, Tennessee, Arkansas, and Missouri. Though InnerChange is treated as a subsidiary of Prison Fellowship, InnerChange is also a separate 501(c)(3) non-profit corporation incorporated in Virginia. Prison Fellowship works on a variety of fronts and collaborates with groups and individuals across the political spectrum on issues related to prison reform and criminal justice. Prison Fellowship’s own religious commitments can best be characterized as Evangelical Christian in nature. This commitment is most evident in the very specific Prison Fellowship Statement of Faith that all Prison Fellowship and InnerChange employees are required to sign: We believe in one God, Creator and Lord of the Universe; the co-eternal Trinity: Father, Son, and Holy Spirit. We believe that Jesus Christ, God’s Son, was conceived by the Holy Spirit, born of the Virgin Mary, lived a sinless life, died a substitutionary atoning death on the cross, rose bodily from the dead, and ascended to heaven where, as truly God and truly man, He is the only mediator between God and man. We believe that the Bible is God’s authoritative and inspired Word. It is without error in all its teachings, including creation, history, and its own origins, and salvation. Christians must submit to its divine authority both individually and corporately, in all matters of belief and conduct, which is demonstrated by true righteous living. We believe that all people are lost sinners and cannot see the Kingdom of Heaven except through the new birth. Justification is by grace through faith in Christ alone. We believe in one holy, universal, and apostolic Church. Its calling is to worship God and witness concerning its Head, Jesus Christ, preaching the Gospel among all nations and demonstrating its commitment by compassionate service to the needs of human beings and promoting righteousness and justice. We believe in the necessity of the work of the Holy Spirit for the individual’s new birth and growth to maturity and for the Church’s constant renewal in truth, wisdom, faith, holiness, love, power, and mission. We believe that Jesus Christ will personally and visibly return in glory to raise the dead and bring salvation and judgment to completion. God will fully manifest His Kingdom when He establishes a new heaven and new earth, in which He will be glorified forever and exclude all evil, suffering, and death. Pis.’ Ex. 79. While Prison Fellowship’s Statement of Faith contains beliefs common to many types of Christian groups, it is also significantly different in many respects. As Dr. Winnifred Fallers Sullivan (“Dr. Sullivan”) explained at trial, Prison Fellowship is not an organized church, but a para-church organization focused on being in ministry to prisoners and their families. Over the past two centuries, para-church mission-minded agencies have been common; examples include the American Bible Society, the American Sunday School Society and various missionary agencies. Contemporary Evangelical Christians do not form a religious denomination, but rather comprise a group characterized by a set of beliefs and a culture that extends across Protestant Christian denominational boundaries. Accordingly, members of different, formally-structured Christian denominations could consider themselves also to be Evangelical Christians. As an Evangelical Christian organization, Prison Fellowship shares the predominate characteristics common to Evangelical Christianity As Dr. Sullivan explained, though no formal membership requirements exist to identify an Evangelical Christian, historians and sociologists have identified several strong, associated characteristics. Foremost, Evangelical Christians place great emphasis on the Bible as the inerrant, sole source of authority for Christian teaching and personal morality. Evangelical Christians also believe that true conversion is an adult religious experience, most commonly referred to as being “born again.” Not only is this experience paramount, so is the duty of every Evangelical Christian to evangelize — that is, to spread the good news of their faith and invite others to share the same adult conversion experience. Evangelical Christianity tends to be anti-sacramental, which means it downplays the traditional sacramental Christian events — baptism, holy communion or Eucharist, marriage, ordination, etc. — as appropriate ways to interact or meet with God. Along with initial adult conversion, contemporary Evangelical Christianity emphasizes religious experience — the actual experience of God in the believer’s life. Evangelical Christians, therefore, are receptive to overt, actual displays of this experience much, like those manifested in Pentecostal Christianity. Additionally, for Evangelical Christians, everything that happens in the world is understood through and interpreted by religious language. For many Evangelical Christians, the belief in creationism and suspicion of evolutionary theory is also present. Finally, the Evangelical Christian stance toward religious institutions is one of suspicion. This is most obviously seen in the worship style. Whereas traditional, organized religious groups, such as Roman Catholics, the Greek Orthodox, and Lutherans, employ a structured, highly liturgical style of worship, Evangelical Christian worship is free form with individual pastors given authority to determine’'how services are planned. For instance, Evangelical Christians have embraced contemporary music forms ánd multi-media presentations. These characteristics, along with the theological commitments in the Prison Fellowship and InnerChange Statement of Faith, place the Evangelical Christianity’of Prison Fellowship and InnerChange at odds with members of'Christian groups who would not consider themselves to be part of the- Evangelical Christian camp. For instance, the anti-sacramental beliefs contained in the Prison Fellowship and InnerChange religious views run counter to the core doctrinal beliefs of several Christian groups in which the celebration of the Mass or Eucharist is a central, necessary part of the Christian life. The Prison Fellowship and InnerChange theological position would be suspicious, if not contemptuous, of Roman Catholic reliance on papal authority, Marian devotion, and the veneration of saints. The Prison Fellowship and InnerChange belief in the sub-stitutionary and atoning death of Jesus, which reflects a legalistic understanding of the sacrifice of Jesus, likewise, is not shared by many Christians. The Prison Fellowship. and InnerChange belief in the literal, bodily resurrection of Jesus is also not shared by many other, non-Evangelical Christians. Similarly, belief in an imminent, personal, and visible second coming of Jésus Christ, as held by Prison Fellowship and InnerChange, does not comport with the belief held by other non-Evangelical Christians that, if a second coming of Christ occurs, its nature is unknown, or is more spiritualized. InnerChange was created to meet the needs of state or federal prisons for a private provider who could deliver a values-based prisoner rehabilitation program. InnerChange’s religious commitments mirror those of Prison Fellowship— the parties stipulated, in fact, that what is taught in the InnerChange inmate program does not contradict the Prison Fellowship Statement of Faith. The Inner-Change program is a faith-based program designed to transform prisoners into good citizens, to reduce the recidivism rate of current inmates, and to prepare inmates for their return to society by providing educational, ethical, and religious instruction. In its own words: This mission of InnerChange is to create and maintain a prison environment that fosters respect for God’s law and rights of others, and to encourage the spiritual and moral regeneration of prisoners. Therefore, they may develop responsible and productive relationships with their Creator, families and communities. Pis.’ Ex. 35 (InnerChange website, Sept. 9, 2005). The InnerChange program meshes the Evangelical Christian religious message of its parent organization, Prison Fellowship, with a pre-release correctional model. This produces a unique approach to pre-release prison programming specific to InnerChange, which InnerChange refers to as a transformational, rather than a therapeutic, model. Rather than ' exclusively relying on and utilizing scientific and medical theories to address criminal behavior, InnerChange incorporates a supernatural approach to an inmate’s recidivist behavior by locating that inmate’s problems in disobedience to God, or sin. The only remedy to the problem of sin, Inner-Change maintains, is through a miraculous delivery by God — specifically, God in Christ. InnerChange’s own explanation, contained in a document entitled “Inner-Change Freedom Initiative White Paper” (“White Paper”), published on the Inner-Change website, sums up well the testimony and evidence — including curriculum materials — offered at trial regarding In-nerChange’s unique approach as it is practiced at the Newton Facility: On the surface, IFI may look like a type of therapeutic community. Both therapeutic, and transformational prison programs operate through small groups and seek to' equip members for life after prison. A therapeutic model is dependent on the interpretation of life through man’s eyes and is based, upon understandings of the social sciences. Therapeutic communities seek to equip prisoners for life after prison by learning to manage behavior. Support groups and classes connect prisoners with a loving community of like-minded people who can encourage them and give affirmation. Healing one’s relationship with others is the primary focus. ■The IFI model seeks to “cure” prisoners 1 by identifying sin as the root of their problems. Inmates learn how God can heal them permanently, if they turn from their sinful past, are willing to see the world through God’s eyes, and surrender themselves to God’s will. IFI relies and directs members to God as the source of love and inner healing. Members then build on this new relationship to recast human relationships based on Biblical insights. In summary, IFI and therapeutic models have some similar methodologies, but very different goals, and are rooted in entirely different philosophies. The therapeutic model seeks first to reconcile the relationship of a prisoner to other human beings. The IFI model, in contrast, seeks to reconcile people through changing their relationship to God. A key concept in Chuck Colson’s writings is that you must be born again. As inmates are transformed by the power of God, they learn to turn from a sinful past, recognizing that “sin is not simply the wrong we do our neighbor when we cheat him, or the wrong we do ourselves when we abuse our bodies. Sin, all sin, is a root rebellion and offense against God [”] (Colson 166 — All references are ' to Chuck Colson’s Loving God). Admitting our sinfulness and asking God’s forgiveness is the first step. “We have the capacity to change anything about our lives ... but we cannot change our own sinful nature.” (144). Repentance is a change of mind and heart away from sin and toward God.... Repentance and reconciliation are an ongoing state of mind and do not simply exist in one moment in time. IFI emphasizes this realization, and fosters humility and a teachable attitude, that in turn, creates opportunities for prisoners to break free from old habits. They learn new life skills, rooted in Biblical principles and God turns their lives around. “Repentance is an inescapable consequence of regeneration, an indispensible part of the conversion process that takes place under the convicting power of the Holy Spirit. But repentance is also a continuing state of mind. We are warned, for example, to repent before partaking of communion. Also, believers prove their repentance by their deeds. Without a continuing repentant attitude — a persistent desire to turn from our own nature and seek God’s nature Christian growth is impossible. Loving God is impossible.” (Colson 109). Pis.’ Ex. 35 at 5-6 (emphasis in original). InnerChange is considered a unit-based residential treatment program by the Dept, .of Corrections. Unit-based residential treatment programs are also referred to as “therapeutic communities” or “quasi-therapeutic communities.” The InnerChange Field Guide is the foundational document distributed to Dept, of Corrections inmates who are interested in the program and attend Introductory and Orientation sessions. Upon acceptance into the program, each InnerChange inmate at the Newton Facility is given a copy of the Field Guide. The opening paragraph is entitled “An Overview of IFI” and states: The InnerChange Freedom Initiative (IFI) is an intensive, voluntary, faith-based program of work and study within a loving community that promotes transformation from the inside out through the miraculous power of God’s love. IFI is committed to Christ and the Bible. We try to base everything we do on biblical truth. In other words, IFI is Christ-centered and Bible-based. Pis.’ Ex. 73 at 2. The Field Guide goes on to define InnerChange’s purpose: The purpose of IFI is to ■ Reduce the rate of re-offense and the resulting social costs H Provide a positive influence in prison Our ultimate goal is to see ex-prisoners become contributing members of society, by becoming responsible leaders in their family, church and community. Id. (emphasis in original). The contrast between what InnerChange would consider a traditional, therapeutic prisoner rehabilitation model based in current, secular approaches and InnerChange’s own self-described transformational model runs throughout InnerChange’s curriculum and practice at the Newton Facility. This is especially true, as will be seen below, in InnerChange’s application of the transformational model to drug abuse rehabilitation and treatment. Contained within the InnerChange White Paper and InnerChange curriculum materials is a chart that sets out eleven major distinctions between the therapeutic model and InnerChange’s transformational model, as understood by InnerChange and Prison Fellowship: Transformation Model: • Transformed persons seek to appropriate God’s ways as revealed through Biblical truth. • Criminal Behavior is a manifestation of an alienation between the self and God. • Transformation enables prisoners to see the world and others as God sees them. • Acceptance of God and Biblical principles results in cure through the power of the Holy Spirit. • Transformation emphasizes the change in behavior as a result of encountering Jesus Christ. • Insight into one’s problems is gained from reading, understanding, and applying Biblical principles. • All problems in life arise from a condition of sin. • Focuses on honesty with self and God first; honesty with others will follow. • Focuses on the power of the Creator. It holds up Christ as the source of that power and work of the Holy Spirit as the way to true change. • The quality of our relationships to each other is conditioned by the quality of our relationship to Jesus Christ and his love as reflected in others. • Transformation happens through an instantaneous miracle; it then builds the prisoner up with familiarity of the Bible. Therapeutic Model: • Therapy seeks to manage symptoms according to human understanding. • Criminal behavior is a result of an alienation of self from society. • Therapy seeks to help prisoners see how the world can meet their needs. • Relief of symptoms is dependent on the power of human love and commitment through support groups and community. • Therapy emphasizes the management of behavior as it impacts on others. • Insight into one’s problems is gained through group and individual interaction. • Problems in life arise may arise from past inability to have one’s needs met. • Focuses on honesty with self and others. • Focuses on the power of Creation. Therapy may or may not point to some higher power. • Mental health and healthy relationships are dependent on the expression and affirmation of our needs. • Therapy seeks gradual change of self as one interacts with one’s environment. Pis.’ Ex. 35 at 5-6. InnerChange posits that an inmate’s anti-social attitude and self-destructive behavior can only be overcome through an intensive religion-based program that is able to “rewire” that inmate’s most basic emotional and mental structures. In the InnerChange model, an authentic religious experience is the means by which society’s civic, or secular, goal — a rehabilitated, pro-social, and productive ex-inmate — is met. A suitable analogy is that InnerChange’s intensive religious indoctrination of inmates is like an emotional or volitional chemical therapy treatment. The Inner-Change experience roots out the cancerous, harmful attitudes and disorders that keep an inmate from knowing and experiencing his authentic self. All analogies fall short, of course. InnerChange does not consider its treatment only a means — like chemical treatments — that fade away leaving the healthy organism, but also an end in itself. At the conclusion of the Field Guide’s orientation materials, Inner-Change includes a blessing: “May God bless you for the time you have spent with us reading this material.... Remember God loves you wherever you are. We pray that you will be aware of God’s presence and power at all times.” Pis.’ Ex. 73 at 10. This blessing is consistent with the hope contained just a few lines before: “Above else, we pray that you will discover the transforming love of Jesus Christ.” Id. B. Choosing a Pre-release Rehabilitation Program Walter “Kip” Kautzky (“Kautzky”) directed the Dept, of Corrections from July 1997 until December 31, 2002, the period in which the Dept, of Corrections chose to contract with InnerChange. Kautzky has known Charles Colson for over twenty years and maintained a close working relationship with Prison Fellowship over the course of his career directing correctional state agencies, including making personal donations to Prison Fellowship. When he worked for the state of North Carolina in the early 1980s, Kautzky facilitated Col-son’s mission to set up a state-wide prison outreach team of volunteers. Kautzky testified in positive terms about the important role Prison Fellowship played in developing post-release transitional services for North Carolina inmates. Kautzky also worked with Colson in the state of Washington, where Kautzky was subsequently employed. Amos Reed, director of the Washington agency that oversaw correctional institutions, invited Colson to Washington state to help during a transition within the state correctional institutions. Kautzky and Colson consulted on the problems facing the Walla Walla State Penitentiary with Prison Fellowship strategies in mind. Together, Kautzky and Colson visited prisoners on death row and in other parts of the Walla Walla, Washington, prison for several days, going from cell to cell to talk and sometimes pray with inmates. Colson was interested in establishing a volunteer network of church communities to connect with Washington inmates. Kautzky admits that, during his career, “I’ve tried to help Prison Fellowship along the way.” Trial Tr. at 939. Again, when employed in the Colorado correctional system, Kautzky offered continuing support to the already established Prison Fellowship program by consulting with the Prison Fellowship regional director. Coming to Iowa, Kautzky testified he was not interested in establishing a connection between Prison Fellowship and the Dept, of Corrections institutions. Nonetheless, Prison Fellowship - and Inner-Change clearly identified Kautzky as an ally. Thomas Pratt, President of Prison Fellowship, sent Kautzky a letter, dated December 7, 1999, in which Pratt attached his “Monday Morning Message” created for Prison Fellowship-wide dissemination. Pis.’ Ex. 186. In that attachment, which extolls the way the “Lord’s hand” brought InnerChange to Iowa, Pratt characterizes Kautzky as: [T]he very same man who had facilitated Chuck’s [Colson] visits to Walla Walla, Washington, in the early '80s. He is the man who enabled our work in Colorado. The same man who had appeared,- unbeknownst to us in a very crucial meeting early in the North Carolina experience and stood in our corner against a very hostile state chaplain when things looked their darkest for the project. - Id. at 2. In addition to his prior knowledge about Prison Fellowship’s volunteer-based programs focusing on post-release services and prisoner visitation, Kautzky was also aware of the current InnerChange in-prison treatment program operating in Texas. Kautzky learned about the program from his Texan counterpart, Wayne Scott, who Kautzky met frequently through the American Association of State Correctional Administrators. Other persons within the state of Iowa also contacted Kautzky about InnerChange and, in particular, about bringing the program to the state. A key Iowa proponent of InnerChange was ex-state legislator and, at the time, Iowa Parole Board Member Chuck Hurley. In his 1999 letter to Kautzky, Pratt described Hurley as: [T]he same person who after reading a brochure on IFI Houston and Humaita Prison, Brazil, contacted Jerry Wil-ger and inquired about bringing IFI to Iowa. He is the same man who asked Jerry to pray with him about an IFI in Iowa and proceeded to carry on a time of prayer and discussion over the phone for a month and a half every Tuesday morning. He is the same man who went to the Governor about IFI and within a week obtained his agreement. Next he went to the- Secretary [sic] of Corrections who also agreed in short order. And who was the that Secretary [sic]? None other than Mr. Kip Kautzky. Id. Kautzky testified that Hurley’s promotion of InnerChange arose from Hurley’s interest in a faith-based, Christian rehabilitation program, which Kautzky described in contrast to his own interest in a merely “values-based” inmate rehabilitation program. Trial Tr. at 957. Kautzky’s arrival in Iowa coincided with the completion of the Iowa Dept, of Correction’s newest facility, the medium-security campus just ■ outside of Newton, Iowa — the Newton Facility. The Newton Facility started receiving inmates around August 1997. By all accounts, when Kautzky took over the Dept, of Corrections, prison overcrowding was 'the primary state-wide institutional concern. The Newton Facility provided an important safety valve function, primarily because it relieved the enormous overcrowding pressure at the Anamosa State Penitentiary. The pressure was so acute that low-risk security inmates were moved to the Newton Facility even before construction was complete. The need to move inmates quickly under tight budgetary constraints affected construction at the Newton Facility. The structure of Living Unit E, originally designed to mirror Units C and D at the Newton Facility, was changed to reduce costs. Unit E’s wooden doors and “dry cells,” discussed in more detail below, were not originally constructed to provide an honor unit setting to reward good behavior, but rather as a result of budgetary constraints. As is regular practice, the new Newton Facility inmates helped construct fencing and sidewalks to save costs and keep them busy. The accelerated inmate transfer to the Newton Facility from other institutions, especially Anamosa, meant that a full menu of treatment programs and classes were not yet in place for the arriving inmates. Prison administrators rank effective programming a close second to overcrowding when addressing prisoner security and safety concerns. Besides in-prison jobs, treatment programming and classes serve the invaluable purpose of providing activities and stimulation for inmates. This is in addition to the Iowa Dept, of Corrections’ responsibility to ensure that inmates have access to classes necessary for early release determinations by the Iowa Parole Board. Inmate programming can be a chronic problem. On July 12, 2002, after the implementation of InnerChange, Kautzky reported to the Iowa Board of Corrections that 400 offenders, department-wide, were still serving sentences longer than necessary because of the lack of substance abuse programming. There is no question that in the period the Newton Facility came on line, the Iowa Dept, of Corrections faced a severe budget crisis, which meant limited funding for prisoner space and all-important programming. Facing difficult budgetary constraints, prison overcrowding, and lack of appropriate programming, Kautzky and his leadership team set about searching for innovative ways to meet the programming challenges at the Newton Facility. As part of that process, Kautzky directed Kenneth Burger (“Burger”), the Coordinator for Offender Services at the time, to gather information about the Inner-Change program in Texas and to determine whether a similar program could work in Iowa. Kautzky ordered the inquiry into InnerChange despite being aware of significant constitutional issues that could arise from a joint venture with Prison Fellowship and InnerChange. Additionally, Kautzky ordered a search for any other organization that could deliver the same type of services. Burger and others stated they either could not or did not locate any genuine competitors for the InnerChange program in 1998 and 1999. This is in spite of the testimony offered by Norman Cox, a vice-president of Prison Fellowship and the National Director of InnerChange, who stated that, by the late nineties, there were eight different service providers — at least two providing values-based programming — in operation. Trial Tr. 2205-07. Several years later, one of those providers, Emerald Correctional Management (“Emerald”), emerged several years later and submitted a response to the Request for Proposal (“RFP”) sent out by the Dept, of Corrections on June 8, 2005. The only organization corrections officials found in 1998 that offered a long-term, values-based, residential program with excellent post-release aftercare services was Inner-Change. Identifying InnerChange as a possible vendor, however, did not mean that every Iowa corrections official preferred a values-based program built on a religious model. The Court finds credible the testimony of Burger, who was part of the team that visited the Texas InnerChange program. Initially, Burger hoped to design a program in Iowa based on the Inner-Change model without the overtly religious instruction included in InnerChange’s transformational approach. Burger was especially intrigued by the idea of placing under one program umbrella, in the same shared physical setting, all the required inmate treatment classes and counseling experiences that could be completed over a period of several months. What the In-nerChange model also contained was a superb post-release aftercare program that, according to Burger and the other correctional officials, is essential to reducing recidivism. After adding up the cost of initiating a similar program in Iowa, however, Burger quickly came to the conclusion that the cost for the state of Iowa would preclude setting up a similar, but independent program. With its donor-supported cost structure, the InnerChange program could offer the same in-prison and post-release components for much less money. Given the state’s budgetary constraints, Burger and others concluded that the Inner-Change program was really the only way to provide a complete menu of programming at the Newton Facility. The correctional officials looking for a values-based program genuinely believed that universal, secular values could be instilled in offenders, regardless of any religious context in which they might be offered. Warden Terry Mapes (“Warden Mapes”), eventually the Warden at the Newton Facility, stated that the religious elements of InnerChange did not bother him. Mapes testified that the “Christ-centered biblical teaching ... is a mechanism to the values-based instruction, just as if they done the Dr. Seuss education program. That is another method of reaching and achieving the same goals.” Trial Tr. at 1457. Dept, of Corrections officials credibly testified that they would be delighted to offer a broad spectrum of values-based programming utilizing various religious and secular contexts if the budget allowed them to do so. The pragmatic concerns of on-site correctional administrators at the Newton Facility and the Dept, of Corrections director’s office, who needed to provide inmate programming at a cost within their budget, combined with Kautzky’s own positive view of Prison Fellowship’s role in rehabilitating prisoners through spiritual transformation, meant that the selection of InnerChange as a pre-release service provider was a foregone conclusion by the time an official RFP from the Dept, of Corrections went out in August 1998. In February of 1999, Burger presented a report to the Iowa Dept, of Corrections Board (“Corrections Board”), explaining that InnerChange’s religious nature and bible-based curriculum were components of the program. The Corrections Board approved the concept and encouraged the Dept, of Corrections to move forward with the program. Burger did not consider the InnerChange venture a major department initiative, but an experimental program consistent with the Iowa Dept, of Corrections continuing search for innovative solutions to inmate rehabilitation. Supporting Burger’s assessment is that the annual expenditure under the InnerChange contract is a small fraction of the $292 million Dept, of Corrections annual budget from general state funds, and an additional $35 million coming in the form of non-general funds. Trial Tr. at 1866. Before the RFP release on April 9, 1998, the Area Director of Prison Fellowship, Terri Hout, sent a packet to John Mathes, the Newton Facility Warden from 1978 to December 2000 (‘Warden Mathes”), at Kautzky’s request. The packet contained information about the Texas InnerChange program. Pis.’ Ex. 187. The cover letter’s last sentence wishes Warden Mathes a “blessed Easter holiday” and is signed, “In Christ’s Service, Terri Hout.” Id. In a letter dated April 27, 1998, some local Newton Area ministers received an invitation from Terri Hout to attend an informational event at two local churches — First United Methodist Church and First Assembly of God — where InnerChange staff from Houston, Texas, “will share the vision, outline the program, and discuss the role of the local church and volunteers in Iowa’s Inner-Change prison unit.” Pis.’ Ex. 188. The letter celebrates the pre-RFP negotiations already taking place: During the past few weeks there have been serious discussions between Prison Fellowship’s Inner-Change staff and Governor Branstad’s office, members of the Iowa legislature, the head of the Iowa Corrections, and representatives of the Iowa Parole Board about bringing Inner-Change to a prison in Iowa. As a result of these discussions, we are pleased to announce that Inner-Change staff will be coming to Iowa the week of May 11 to make a determination about Iowa being the new Inner-Change site. Id. In a memo dated the same day, Kautz-ky described the same event to Dept, of Corrections Deputy Directors, Wardens, and Superintendents, requesting they attend a May 14, 1998, luncheon in order to learn more about the InnerChange program and ask questions about its mission and organization. Pis.’ Ex. 189. On May 15, 1998, Wilger sent Kautzky a thank you letter regarding the InnerChange trip and enclosed a copy of the Texas RFP for Kautzky’s review. Pis.’ Ex. 190. Kautzky also received from Wayne Scott the Texas version of an RPF from InnerChange to use as template for Iowa’s own RFP form. Kautzky, and the Defendants generally, characterized the exchange of letters, memos, telephone calls, and meetings between the Dept, of Corrections, Inner-Change, Prison Fellowship, state legislators, and parole board members as reasonable discussions attendant to any RFP process. These discussions, the Defendants maintain, are necessary to discover more about the provider being considered, to clarify the state’s own correctional rehabilitation needs, and to identify possible sources of funding. Not all the correctional officials were completely on board with the Inner-Change program. Warden Mathes was interested in a values-based, rather than a purely cognitive, rehabilitation program, but worried about what he viewed as the inherent conflict in the different missions of the Dept, of Corrections and Prison Fellowship. Evidence shows that InnerChange teams visited Iowa at other times and did much more than simply discuss the program with Dept, of Corrections and other state officials. Before the August 1998 RFP went out, as well as before a contractual agreement was reached, the Dept, of Corrections allowed InnerChange direct access to Iowa inmates at several Dept, of Corrections institutions to conduct Inner-Change orientation classes that included, among other things, bible studies and Christian worship services. Straining credibility, Kautzky described the pre-RFP orientation classes by InnerChange as mere volunteer religious exercises similar to those provided by any other volunteer religious group that inmates were free to attend. The distinction between a local church led by a minister and lay volunteers providing a worship service in a prison, and a potential private vendor who is in the midst of pre-negotiating contractual terms with the state for a contract valued in the hundreds of thousands of dollars is, of course, substantial. Presenting the In-nerChange program for inmates to consider supports the Plaintiffs’ claim that the RFP process was merely a formality and that the Dept, of Corrections intended In-nerChange to be the pre-release rehabilitation services provider from the time In-nerChange was initially contacted. More evidence that, even before the RFP release, the InnerChange program was the only real competitor in the search for a values-based provider is-a-letter, dated July 4, 1998, from Kautzky to Rick Nelson, President of Blueprint for Life, Inc., requesting Nelson’s help to secure volunteers for the program. The subject heading reads: “Prison Fellowship — Inner Change Program.” Pis.’ Ex. 196.. Kautzky makes clear that, though the RFP process must be completed “to meet state procurement requirements,”., the Inner Change program was .coming to Iowa and informs1 Nelson that “when the program is implemented there will be a significant need for volunteers.” Id. According to Warden Mathes, he had no doubt that by the date of the letter to Nelson, Kautzky had decided to go ahead with the Inner-Change program. Trial Tr. 1695-96. Finally, in August 1998, the Dept, of Corrections issued a “Request for Proposal for Non-compensated Services, Values Based Pre-Release Program.” Pis.’ Ex. 197. The RFP was made available to the general public and expressed the state of Iowa’s intent to establish a “values based” pre-release program at the Newton Facility in Iowa. As stated in the title of the RFP, the initial idea was that a values-based program would be established within the Newton Facility, but be “non-compensated.” Prison Fellowship and InnerChange submitted a proposal to Iowa on September 16, 1998, and an amended proposal on December 28, 1998. The .proposal sent by Prison Fellowship and InnerChange was the only response to the August 1998 RFP. Prison Fellowship and InnerChange made it clear to in those proposals that they had no intention of providing programming without cost. The record is unclear about why the Dept, of Corrections initially called for a “non-compensated” program, except possibly to avoid state funding of a religious program. Whatever the reason, the Dept, of Corrections quickly abandoned the “non-compensated” term of the RFP once it received the proposals from In-nerChange and Prison Fellowship. On March 24, 1999, Prison Fellowship— InnerChange and the Dept, of Corrections entered into a contract providing for the operation of InnerChange at the Newton Facility. From the first year of the contract, beginning in September 1999, until the end of the contract term in June 2002, the Dept, of Corrections contracted with both Prison Fellowship and InnerChange. The contract was renewable annually. Beginning in July 2002 until the present, the contract parties have been limited to just the Dept, of Corrections and InnerChange. In the first year of the program — September 1, 1999 through August 31, 2000 — the Dept, of Corrections paid Prison Fellowship — InnerChange up to $229,950 “for non-sectarian costs and expenses of the InnerChange” program. The money came from the Telephone Fund. C. Subsequent Funding of InnerChange 1. Contractual funding. In the first year of InnerChange’s operation at the Newton Facility, instead of Telephone Fund money going to pay for items such as library books or recreational equipment, for example, it was used to pay InnerChange expenses. Telephone Fund commissions amounting to $294,017 at the Newton Facility were also used to pay for the cost of installing, leasing, and then purchasing Newton Facility Building M— $56,944 for installation, $175,000 to lease the building for about twenty-one months (at a rate of $8,357 per month), and $61,576 to purchase Building M at the conclusion of the lease period in or about February 2002. The next contract — from September 1, 2000 through June 30, 2001 — required the Dept, of Corrections to pay Prison Fellowship and InnerChange up to $191,625, to be paid from the Telephone Fund “for approved non-sectarian costs” of the In-nerChange program. The total direct operating costs for the Iowa InnerChange program were $506,181. This operating amount does not include the cost incurred for the Iowa program in the InnerChange national program budget center, nor the costs incurred for the Iowa program within the Prison Fellowship national office. The next RFP came three years after the first, in May 2002. The Dept, of Corrections publically issued an RFP for a “Values Based Pre-Release Program” to be continued at the Newton Facility. In-nerChange made the only response, which it made in the same month — May 2002. In September 2002, the Dept, of Corrections and InnerChange signed a contract providing for continued operation of the Inner-Change program for the period from July 1, 2002, through June 30, 2003, renewable for two one-year terms. That year, the Dept, of Corrections paid InnerChange up to $191,625.for the “non sectarian portion of [InnerChange’s] program costs,” again to be taken from the Telephone Fund. That year, in addition to the Telephone Fund funds, the Iowa legislature also appropriated $172,591 from the Healthy Iowans Tobacco Trust (“Tobacco Trust”) to the Dept, of Corrections “for a values-based treatment program at the Newton correctional facility.” This extra amount was paid to InnerChange on or about February 18, 2003, for the expansion of the InnerChange program to the Newton Release Center at the Newton Facility. The contract provided that the funds were to be spent for “the non-religious aspects” of the program. In that year, total local InnerChange operating expenses were $603,063, with $495,033 for the in-prison program and $108,030 for the Inner-Change aftercare program. Again, these costs do not reflect InnerChange and Prison Fellowship national expenses related to the Iowa program. The July 1, 2001, through June 30, 2002, contract also called for up to $191,625 to be spent from the Telephone Fund “for approved non-sectarian costs” of the InnerChange program. That year the total operating cost for the Iowa In-nerChange program Was $578,995. $577,350 of this amount was spent on the in-prison program and $1,645 was spent on the InnerChange aftercare program. Again, the local operating costs do not reflect the national office expenditures of InnerChange and Prison Fellowship related to the Iowa program. . The next year, funding for InnerChange came only from the Tobacco Trust. For the fiscal year from July 1, 2003 through June 30, 2004, the Iowa legislature appropriated $310,000 from the Tobacco Trust to the Newton .Facility for “a values-based treatment program.” Using that appropriated amount, ■ the Dept, of Corrections contracted to pay InnerChange up to $310,000 “for the non-sectarian portion of [InnerChange’s] costs” for the same year. Out of the $310,000, the Dept, of Corrections actually paid $276,909.15 to Inner-Change for the program year. The actual local InnerChange operating expenses during this year were $670,382, with $512,089 for the in-prison program and $158,293 for the InnerChange aftercare program. Again, national InnerChange and Prison Fellowship costs are not included in these amounts. In the contract for the next year — July 1, 2004 through June 30, 2005 — the financial arrangement changed from a lump sum payment, conditioned on the actual “non-sectarian” expenses incurred, to a per diem arrangement. The amount appropriated by the Iowa legislature from the Tobacco Trust for a values-bas