Prison Industry

More Controversies at Nevada DOC – Director Cox Resigns

More Controversies at Nevada DOC – Director Cox Resigns

In mid-September Nevada Governor, Brian Sandoval asked for the resignation of Gregg Cox, Director of the state Department of Corrections. The action was taken by the Governor because a report about prisoner shootings and abuses by staff in the state’s prisons was late.

The report completed by the Association of State Correctional Administrators was to be presented by Cox at a Tuesday meeting of the Board of Prison Commissioners, which the Governor is a part of.

The governor felt that it was time to move the department in a new direction,” according to a statement from Gov. Brian Sandoval’s office on the departure of Greg Cox. The corrections department is facing several lawsuits due to prison shootings in the past few years.

One incident at High Desert State Prison left inmate Carlos Manuel Perez Jr. dead. Sources say Perez was handcuffed when he was shot and killed, and accuse prison guards of creating a “gladiator-like scenario” by allowing inmate fights to go on before firing into the fray. It wasn’t revealed until four months afterward that Perez died from gunfire.

Earlier in 2013 Cox’s department came under fire for allowing the DOC’s prison industry program to be used by a private company, Alpine Steel and company owner, Randy Bulloch to use inmate labor – without paying them wages.

Alpine Steel owner, Randy Bulloch

Alpine had been able to avoid paying rent, utilities, inmate or staff labor wages for more than a year, running up a tab of nearly $500,000 – while Deputy Director Brian Connett of the NDOC Prison Industry, (Silver State Industries) – turned a blind eye upon the climbing debt, allowing Bulloch’s steel fabrication operation to continue virtually free of overhead, at taxpayer expense. Connett went so far as to approve Alpines new contract with the NDOC, failing to report the back debt owed while reporting Alpine had fulfilled all requirements under the expiring contract.

The facts surrounding the Alpine case began to emerge in late 2012 when steel companies started protesting to NDOC and legislative authorities arguing they were being unfairly forced to compete against a local company using inmate labor. Business owners asserted they had lost bids on projects and thus were unable to expand their businesses or hire more workers due to interference from Nevada’s prison industry operations.

Governor Sandoval eventually stepped in and ordered the closure of the Alpine operation following those complaints. The challenges centered upon unfair competition by a private company using inmate labor to reduce labor costs and thus underbid complainants for lucrative state and private contracts involving fabricated steel materials.

Alpine quickly paid over $78,000 in back wages owed to inmate workers. The NDOC entered into an agreement with Alpine to repay the state the remaining money owed for staff wages, utilities and lease of prison facilities. Surprisingly the agreement had no provision for Mr. Bulloch to be personally responsible for any of the accrued debt owed.

Within months Bulloch defaulted on the terms of the agreement and the state secured a judgment against Alpine for more than $400,000. Alpine also incurred state and federal tax liens for non-payment of income taxes. These totaled more than an additional $680,000.

The taxpayers have been left holding the bag…. As a result of this I think there is going to be a lot more oversight,” Nevada Assemblyman James Ohrenschall said in an interview on Vegas Inc. September 21, 2013. Mr. Ohrenschall is the former chairman of the Legislature’s Interim Finance Committee on Industrial Programs. At the time of that interview, the IFC Committee was meeting to investigate facts related to Alpine Steel that prompted his concerns.

Unfortunately Mr. Ohrenschall was too optimistic in his assessment of oversight, but his claim of “taxpayers have been left holding the bag” is still accurate. To date the state has been unable or unwilling to pursue collection of the nearly half million dollar debt owed to taxpayers by Bulloch and his company.

Though Bulloch voluntarily surrendered his contracting license to the Nevada Contractors Board in October 2013, saying he was closing down his business…Alpine Steel’a website remains open for business while the company owner continues to avoid paying the state any of the money owed taxpayers under the court ordered judgment. Additionally, along with the Alpine website still showing it is an active business, Mr. Bulloch is now selling structural steel and fabricated components as Hunt Steel, also in Las Vegas. Links to fabrication, etc. on the Alpine site, takes visitors to Bulloch’s Hunt Steel site.

Director Cox managed to retain his position after the Legislature enacted new revisions to existing Nevada law to prevent potential or new industry operators from starting up without posting a surety bond to guarantee payment of leases and utilities owed to the state. Known as Senate bill 478, this law also provides that the public be notified of any potential new prison industry proposals, to date there has been no such notice given to the public or possible competitors though there have been new industries proposed to the Interim Finance Committee on Industrial Programs.

Just prior to Cox taking over as Director in 2011 he was a Deputy Director when the prison industries “wrote off” more than $800,000 in outstanding noncollectable debt owed to the Prison Industry Program. With Alpine’s additional $428,000, Nevada taxpayers have lost more than $1.2 million dollars. The now pending lawsuits against the NDOC, it’s staff and officers, could result in another $1 million or more needed to settle inmate abuse and shooting claims and/or court judgments.

It appears Director Cox avoided one serious controversy involving a lack of transparency only to succumb to another controversy involving transparency before the same Board of Prison Commissioners that again, included Governor Sandoval.

Why ALEC is Ultra-Important & Irreplaceable to the Koch Cabal

Why ALEC is Ultra-Important & Irreplaceable to the Koch Cabal

by Bob Sloan

Pursuing Charles and David Koch and their funding of the far right and an ultra-conservative agenda is important. Identifying the “charitable” organizations they launder money through – which is then passed onto other organizations (along with credits), is also important. Exposing the various billionaire families (DeVos, Coors, Bradley, etc.) that contribute to the goals of the Kochs’ and their cabal, is likewise important.

However, what those actively pursuing and exposing the Koch Cabal must understand is that once an integral part of the cabal is exposed, the duties that particular organization was responsible for, is transferred to one or more of the Koch’s vast network – and the agenda continues to move along smoothly without any real interruption. The cabal can afford to “lose” one or more of the network’s controlled “charities” and continue to function without missing a beat.

The one “tool” available to the Kochs’ and their vast network that they simply cannot function without…cannot shift the duties of or advance an agenda without…is the American Legislative Exchange Council (ALEC). ALEC is the “enabler” for the entire cabal’s vast network. Through ALEC legislation is developed that directly benefits that network in one form or another (lower corporate taxes, deregulation of government oversight(s), voter restrictions, tort “reforms” that limit compensation available to consumers, limiting the authority of government agencies such as the DOJ and EPA).

ALEC is what allows corporate interests to be written into laws the general public are made to live by. An example of such laws are seen everywhere today: criminal justice privatization…private prisons, privatized prisoner healthcare, phone services, banking and industries where prisoner labor manufactures goods for private companies; pursuit of privatizing the U.S. Post Office (FedEx and UPS are long time members of ALEC); Stand Your Ground; relaxation of renewable energy mandates and deregulation involving emission standards; privatizing our public school systems, authorization of Charter Schools…and the list goes on with hundreds of laws written to benefit business and corporations adopted by ALEC and sent out nationwide via nearly 2,000 state lawmakers holding ALEC membership and loyalty.

Without ALEC the overall Koch cabal/network would be unable to advance their conservative agenda through “model legislation” presented in all 50 states by ALEC controlled state lawmakers. Without the ability to craft legislation and get it introduced in our states, the entire network would cease to function as a viable political entity – as it has since 1973.

The entire landscape of our laws over the past 40 years has been affected by ALEC. Drug laws, mandatory minimum sentences, truth in sentencing, abolishing parole…all of the hundreds of laws used to incarcerate millions of Americans for victim-less crimes and hold them for years as a vast labor force available to private manufacturers, were written and disseminated by ALEC. Private prison contractors, Geo Group and Corrections Corporation of America (CCA) were members of ALEC when the laws authorizing prison privatization were written and passed state by state.

Some of the companies that have capitalized from these laws and this slave-styled work force include; Boeing, Microsoft, McDonalds, Victoria’s Secret, JC Penney, WalMart, Starbucks, Lockheed Martin, Berkshire Hathaway, Honeywell, Revlon, IBM, Lucent Technologies, AT&T Wireless. Intel, Siemens, etc. Good jobs were taken from American labor markets and turned over to low wage prisoners due to ALEC’s “Prison Industries” legislation.

Conservative politicians have fought against jobs bills and legislation because they’ve spent decades working to lower wages through the insourcing of labor; taking jobs from the public sector and placing them in the hands of a captive workforce.

Today as the GOP struggles to remain a viable political party, American voters have begun to wake up and vote against their extreme agenda. This has resulted in the pursuit of gerrymandering precincts and districts by Republicans as well as introduction and passage of legislation to reduce voter participation through “voter ID” and “voter suppression” laws. These are designed specifically to impact upon minority voters who predominately vote democratic.

The current attack upon voters is not coincidental. ALEC co-founder Paul Weyrich famously stated in 1980 that he did not want everyone to vote because “our leverage in elections goes up as the voting populace goes down“. In 1999 after the election of George W. Bush, a disciple of Weyrich, Eric Heubeck published a “treatise” based upon the teachings of Weyrich, titled “The Integration of Theory and Practice: A Program for the New Traditionalist Movement“.

In this manifesto styled treatise Heubeck put forth the guidelines for conservatives to follow that would allow entirely changing the political landscape, advancing a conservative and evangelical agenda to assume domination over progressive and liberal ideologies. The instructions quite candidly have worked. A reading of this document and comparison to the instructions provided against actual activities, actions and events that have taken place over the past 14 years reveals conservatives (and ALEC) have followed the guidelines religiously.

The Koch agenda is funded by Charles, David and a handful of select rich business owners and corporate executives, many of which sit upon ALEC’s Private Enterprise Advisory Council or are represented by CEO’s, CFO’s or other executives. This “advisory” council has direct access to all of ALEC’s 2,000 legislative members and alumni (many of which are now members of Congress, 82 Representatives and 10 Senators). Of the alumni, several names are associated with today’s gridlock in Congress; Manchin, Inhofe, Graham, Rubio, Shelby, Enzi, Bachus, Blackburn, Boehner, Cantor, Gingrey, Price and King. Again, these alumni and the pursuit of the cabal’s agenda through them is not coincidental. These elected officials have a loyalty to the cabal members, ALEC and campaign donors such as the Kochs and many of the corporations holding membership in ALEC.

Laws must be designed, written and crafted based upon constituent needs and desires – not based upon what fattens the bottom line of some corporation or powerful business owners. Doing it that way has led us to where we are today with a handful of people holding the majority of assets and the middle class existing off the crumbs of the rich.

When you hear philosophy, economics or corporate rights issues discussed by the likes of Steven Moore, Art Laffer or Victor Schwartz upon the airwaves or in the newspapers, keep in mind they are all members of ALEC’s “Board of Scholars”. They along with Congressmen such as Graham, Boehner and Cantor speak on behalf of ALEC, Charles and David Koch and the other cabal members.

As clearly demonstrated by the foregoing, without ALEC and that organization’s ability to advance laws sought by their corporate members and donors, the cabal would be unable to function as a powerful and direct influence upon state and federal legislation. Which leads to the conclusion that ALEC must be abolished – at all costs. They and their considerable influence must be removed from all legislative involvement. The cabal must be denied the ability to draft model legislation favored by them and pass it along to state legislatures through ALEC’s legislative membership.

Once ALEC loses the ability to put legislators and corporations at the same table and write legislation such as they have done for years – the cabal will collapse upon itself. Without the ability to advance legislation the cabal is without the means necessary to control our legislatures and laws. Alec truly is the entity that enables the agenda…and must be eliminated. Until then, the beneficial corporate crafted legislation will continue to flow to every state, year after year until they succeed in passing them into law. Attempts at voter suppression will continue, government oversight will be weakened as the planet’s resources are consumed by hungry corporations without regard for future generations or the impact upon the globe.

All paths to and from the Cabal go through ALEC…
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ALEC the enabler must be forced into extinction…

Cheap Prison Labor, Unemployment #’s and Related ALEC News

Cheap Prison Labor, Unemployment #’s and Related ALEC News

standuptoalec

Keystone Pipeline…Voter ID and Suppression laws…Right to Work (for less)…Stand Your Ground…Tort “Reform”…Limiting liability in Asbestos lawsuits…Reducing Energy and EPA Regulations…Trans Pacific Partnership…Repealing Healthcare…Reducing Wages…Abolishing Minimum Wage laws…Eliminating Organized Labor…Defunding Education and Replacing Public Schools with Charters…and Replacing American Workers with American Prison Labor…

All of the foregoing issues can be found in today’s headlines across America. Behind each and every one of these critical issues and hundreds more is the agenda of the conservative controlled and Koch funded American Legislative Exchange Council (ALEC).  In fact most of the onerous legislation rambling through the statehouses of each state – and in many cases our Congress – are “Bills” that began life as model legislation developed by ALEC.

With thousands of state lawmakers alongside more than 350 multi-national corporations holding active membership in ALEC it is no coincidence that each law that benefits business originates and is promoted by ALEC.  Big oil (Exxon, Mobil, Shell, BP America, Chevron. ConocoPhillips), energy conglomerates (American Electric Power, Duke Energy, Energy Future Holdings, Peabody Energy), pharmaceutical companies (Bayer, Pfizer, Johnson and Johnson, Merck, PhRMA), banking, investments, insurance are all represented upon ALEC’s board and general membership.  Each has the opportunity to write, propose and lobby for legislation friendly to their particular field…and if any proposal is successful, they have an equal vote on adoption by the entire ALEC membership and dissemination to every state via ALEC’s elected lawmaker members.

Below are some of today’s headlines related to the foregoing issues and ALEC’s pursuits on behalf of their corporate controllers…

Hundreds Of American Companies Pay Employees As Little As 23 Cents An Hour

At the heart of this issue of prison labor used by private businesses to undercut competitors and eliminate jobs and living wages, we again find the American Legislative Exchange Council (ALEC)…

When you think of prison labor, what comes to mind? You might envision inmates making license plates and highway signs or cleaning up road debris. For decades, this perception would have been roughly accurate. Using prison labor in the private sector was illegal, so inmates worked on public projects.

But this dynamic changed dramatically in 1979 with the passing of the Prison Industry Enhancement Certification Program (PIE). PIE made it legal for private sector companies to contract prison labor to produce goods…

…The dynamic is a corporation’s dream – inmates make as little as 23 cents an hour, never show up late for work, and don’t demand benefits or time off. These inmates don’t account for some small percent of manufacturing production, either.

According to a report done by the Centre for Research on Globalization, prison labor produces 100% of American military helmets, ammunition belts, bullet proof vests, ID tags, and uniforms. These products are made for UNICOR, a for-profit company owned by the United States government…

…But here is the real problem with privatized prison labor: it puts a financial incentive on incarceration. When companies can push their profit margins through the roof with prison labor, they suddenly have a huge self-interest in maintaining high incarceration rates. This isn’t speculation, either. Since private sector prison labor was made legal, America’s biggest economic powers have actively lobbied for legislation designed to both imprison more people and lengthen their sentences.

Perhaps no organization shows this to be true more clearly than the American Legislative Exchange Council (ALEC). ALEC is an enormous lobbyist organization involved in many issues. They write model legislation used to construct policies in economics, international relations, education, agriculture, and a number of other areas…

Keystone PipeLIES Exposed: The Facts on Petroleum Politicians, Crude Money and Media Spin

“TransCanada set out to build this pipeline five years ago, and they still haven’t. That’s saying something about the efforts of activists throughout the country, in spite of all of the money invested in seeing it happen,” Natural Resources Defense Council analyst Anthony Swift says.

“In the southern portion of the pipeline, we saw ranchers, we saw longtime Texas farmers joining with the climate justice activists from Tar Sands Blockade, working to block the tar sands,” says Kevin Zeese, co-director of It’s Our Economy. “And they did a good job. They slowed it down and made it more difficult and more expensive. And they’re effective; a big French investor pulled out because it was getting too expensive.”

The effort that goes into street-level organizing is as much a matter of necessity as it is anything else. Facing one of the most profitable industries in the world, KXL opponents know they can’t compete in the Washington arena using the traditional weapons of choice: campaign contributions and lobbying budgets.

“Our opposition is quite formidable,” says Jason Kowalski of 350.org “The fossil fuel industry has made more money in the history of money in recent years. If we win, it’s because of our bodies and our spirits and our courage and our numbers. We know we have the moral high ground, and that’s how we are going win this thing.”

Of Course ALEC Is Involved in the Keystone Cash

Not willing to leave anything to chance, the oil industry is taking action to make sure state legislators see things their way. As the Center for Media and Democracy (which publishes PRWatch) reported, the American Legislative Exchange Council (ALEC) sent nine state legislators on an industry-paid field trip to the Alberta tar sands in 2012.

ALEC, which receives funding from TransCanada, the Koch brothers (whose Canadian subsidiary has tar sands investments), and other fossil fuel corporations, set up the event to put legislators in the same room as the industry lobbyists who paid for the lavish private-jet travel and fine dining. ALEC also prompted each of the nine legislators to send their corporate sponsors a thank you note, with a reminder of what the lobbyists had paid for the tour.

CMD also uncovered emails between TransCanada’s lobbyist and Ohio state Rep. John Adams in which the lobbyist provided Adams with a model bill in support of KXL, with Adams swiftly introduced in the legislature. The bill was co-sponsored by another participant in ALEC’s Alberta field trip.

Ash Spill Shows How Watchdog Was Defanged

RALEIGH, N.C. — Last June, state employees in charge of stopping water pollution were given updated marching orders on behalf of North Carolina’s new Republican governor and conservative lawmakers.

“The General Assembly doesn’t like you,” an official in the Department of Environment and Natural Resources told supervisors called to a drab meeting room here. “They cut your budget, but you didn’t get the message. And they cut your budget again, and you still didn’t get the message.”

From now on, regulators were told, they must focus on customer service, meaning issuing environmental permits for businesses as quickly as possible. Big changes are coming, the official said, according to three people in the meeting, two of whom took notes. “If you don’t like change, you’ll be gone.”

But when the nation’s largest utility, Duke Energy, spilled 39,000 tons of coal ash into the Dan River in early February, those big changes were suddenly playing out in a different light. Federal prosecutors have begun a criminal investigation into the spill and the relations between Duke and regulators at the environmental agency.

How ALEC helped Duke Energy block stricter coal ash rules

Duke Energy is not only the nation’s largest electric utility but one of its political powerhouses. Besides the millions of dollars the North Carolina-based company spends on federal and statecampaign contributions and lobbying, another tool it has used to get its way in the public policy arena is the American Legislative Exchange Council…

…Contacted about its ALEC membership status this week, Duke Energy spokesperson Chad Eaton said “we do not release each and every group Duke Energy is a member of or involved with since those memberships and sponsorships are evaluated on an annual basis and often frequently change.” He also noted that the company is “active in many groups that have a variety of viewpoints but that does not mean that we support all of the various positions those organizations take.”

Nevertheless, it’s an established fact that Duke Energy was a member of ALEC during the height of the group’s efforts to block strict federal regulation of coal ash and held a seat on ALEC’s Energy, Environment and Agriculture Task Force. In addition, Duke Energy’s position on coal ash is in line with ALEC’s, as the company itself has lobbied to block strict coal ash rules and submitted numerous comments to federal regulators opposing strict oversight…

…ALEC was one of the drivers of the political backlash that slowed EPA from taking action in the wake of the Kingston disaster. Among the actions ALEC took as part of its efforts to block strict federal oversight of coal ash:

* Passed a “Resolution to Retain State Authority Over Coal Ash as Non-Hazardous Waste.” ALEC’s board of directors approved this resolution, which “concludes that states are best positioned to serve as the principal regulatory authority for [coal ash] as non-hazardous waste.” (2010)

* Published “EPA’s Regulatory Train Wreck: Strategies for State Legislators.” This reporttook broad aim at the EPA for various efforts to curb energy-related pollution, including the proposal to treat coal ash as hazardous waste. It urges state lawmakers to “get the state on record as calling on Congress to stop this regulatory train wreck.” On coal ash specifically, it promoted the “Resolution to Retain State Authority Over Coal Ash as Non-Hazardous Waste” passed by its board the previous year. (February 2011)…

American City County Exchange (ACCE) – A new ALEC Program

The American City County Exchange works with local elected offcials to promote effciency and minimize waste by implementing limited government, free market solutions. The American City County Exchange is an affliate of the American Legislative Exchange Council.

WI ALEC Leader in Hot Water over Allegations of Sexual Harassment

Assembly Majority Leader Bill Kramer, a stalwart of the American Legislative Exchange Council, has been accused of sexually harassing two women while in Washington, D.C. last week for a Wisconsin GOP fundraiser. The Milwaukee Journal Sentinel reported that the 49-year-old Republican lawmaker physically and verbally harassed a 33-year-old female lobbyist at the fundraising event and another woman on the plane back to Wisconsin.

Statements from the GOP leadership signal that the incidents were serious: “The alleged behavior is reprehensible and won’t be tolerated,” said Assembly Speaker Robin Vos. Conservative pundit, Charlie Sykes reported: “According to news reports and my own sources, Kramer’s conduct last week went beyond tasteless jokes, and included physical contact that could be construed as sexual assault.” One source told Sykes it was “the least surprising headline ever.”

Kramer’s office staff released a statement indicating that the boss was checking into rehab, but a little counseling may not be enough. This is not the first time that this type of allegation has been made about Kramer. Republican State Representative Chris Kapenga warned his caucus that Kramer was a loose cannon after he engaged in similar conduct at an ALEC meeting in Chicago last August…

America’s corporate revolt against clean energy

The US’s fossil fuel industry is scared at the growth of solar power, and its ever-declining market cost. So it’s fighting back, reports Trip Van Noppen, doing its best to quash solar growth by imposing new costs and restrictions.

From California to Colorado to North Carolina and other states, many generators of centralized fossil fuel energy are trying to prevent individual Americans from producing clean, renewable solar energy on their own roof tops.

They would deny us the opportunity to participate in the greater goal of shifting away from polluting, climate-altering fossil fuels.

There is a simple reason for the utilities’ action: They fear losing their monopoly hold on revenue from power production.

Rooftop solar is a game changer that lets consumers generate their own power, reducing the need for a centralized power system and cutting to the heart of the utilities’ comfortable position of a guaranteed return.

For more than 100 years, power companies have profited from a centralized energy model that distributes power from a fossil-fuel burning power plant out to users through a grid of power lines…

…Legislation is proposed in 25 states to limit, tax or fine rooftop solar and net metering, the billing arrangement that allows rooftop solar customers to get credit for providing energy to the grid.

Further, in their portfolio planning, utilities are deliberately undervaluing the benefits and overvaluing the costs of rooftop solar.

Much of this is an orchestrated campaign by corporate lobby group American Legislative Exchange Council (ALEC) to promote legislation that encourages continued fossil fuel use and discourages competition from renewable energy sources. The Guardian reported that ALEC sponsored at least 77 anti-clean energy bills in 34 states in 2012.

Symbolic Book-Burning Is Alive And Well In South Carolina

If South Carolina is not the most backward state in the nation, it’s tied for first with some of its red state brethren, like say, Arkansas. The latest insult to the intelligence of any civil human being is the punitive symbolic book burning of a publication titled “Out Loud: The Best of Rainbow Radio.” The local newspaper describes it as a publication comprised of a collection of essays and poems from Southern gay residents.

The book was chosen by a panel of educators on the Upstate campus of the University of South Carolina. It is required reading for all incoming university freshmen. Wait for it! Wait for it! KERBOOM!!! The homophobic right-wing went predictably nuts. And in their corner, eager to please even the most radical of his constituents, stood state Representative Garry (yes, 2 r’s) Smith. Riding to the rescue of Neanderthal parents, whose kids were trapped in a literary web of Queerville.

Smith, just turning 57, is an active and enthusiastic member of the American Legislative Exchange Council (ALEC) and serves on its Communications and Technology Task Force. In his homophobic wisdom he decided to emulate symbolically, the actual historical book-burnings that have been all the rage since antiquity right up to the present day.

 Via a line item in the upcoming budget, Smith is proposing to cut $17,142 in funding to the University, the exact cost of the books…

Nevada Prison Industry Administrative Rules Now in Place

Nevada Prison Industry Administrative Rules Now in Place

by Bob Sloan

silver state industries

Following a full year of investigating complaints and revising Nevada’s prison industry program statute(s), a new Administrative Rule (AR 854) regulating the operation of that state’s prison industry operation has been submitted to the Board of Prison Commissioners (BPC) by NDOC Director, Greg Cox.  In December this regulation was adopted and became effective.

Sen. Richard Bryan

Sen. Richard Bryan

In October the NDOC submitted a long list of new or amended AR’s to the BPC for approval and implementation.  At that time Cox withheld the proposed AR 854 addressing the operation of the agency’s prison industry operations.  Cox held back on this single AR by advising the Board he wanted to work with former Senator Richard Bryan on the language of that particular regulation.

On December 17th Director Cox submitted the final negotiated regulation to BPC members, Governor Sandoval, AG Masto and Secretary of State, Ross Miller for consideration.  Following approval by the Board, the new prison industry regulations are now in effect.

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NDOC Dir. Cox

Critics and opponents of the prison industry program have now adopted a position of “monitoring” the state’s prison industry program. They’re doing so in an effort of ensuring there are no further infringements upon Nevada’s workers and businesses that compete against prison industries.  Last year it was discovered that the NDOC regulations were not being fully enforced and state statutes controlling prison industry operations were insufficient to protect both Nevada’s private sector workers and competing non-prison partnered businesses.

Alpine SteelAll of this came about after lawmakers, the media and general public learned that the prison industry program was more or less operating without any real oversight.  This allowed the NDOC to “partner” with a local Las Vegas business – Alpine Steel, LLC –  in a manner that provided that business with an unfair advantage over competitors and reduced the number of available private sector jobs.  Not only did this single business enjoy prison labor far below standard wage rates, but it also received low cost taxpayer subsidized utility costs and lease terms for state owned property that was far below the state averages. Additionally the NDOC failed to enforce most of the terms of the contract it had with Alpine, allowing the company to default on paying the salaries of NDOC staffers, prison workers and monthly lease payments or utility costs and making no effort to cure the defaults.

When this partnership was finally terminated by Governor Sandoval and the smoke cleared, the state was left with an owed debt of nearly half a million dollars.  Alpine’s owner entered into a negotiated agreement to repay the state but almost immediately defaulted, leaving taxpayers on the hook for hundreds of thousands of dollars in unpaid leases, staff salaries, utility costs and owed taxes.  This failed partnership resulted in the revamping of the state’s statutes controlling Nevada’s existing prison industries and all proposed new industries.

During the lengthy legislative activities related to the failed Alpine partnership, other issues were discovered that prison labor activists are continuing to pursue at both state and federal levels.  These include the hourly wages paid to inmate workers in the program, deductions taken from prisoner paychecks and working conditions.

Nevada is a participant in a federally run program (Prison Industries Enhancement Certification Program or PIECP) that encourages prison industry/private business partnerships such as the one involving Alpine.   However in order to establish and operate under such partnerships both the state and the private business must agree to abide by stringent mandatory conditions required by the federal government.  Two of the imposed mandatory requirements are that inmates be paid prevailing wages and that the state can only take approved deductions from those wages.  In the case of Alpine, the contract with the state required that inmate workers receive “prevailing wages” (section 8.6) or the same wage paid to private sector workers performing the same duties on the outside.  Instead, the NDOC and Alpine set the inmate wage rate at or below the state minimum wage scale, exploiting the labor of inmate workers and further enriching Alpine.

Subsequently it now appears Nevada is underpaying inmates working in the federal program and taking an unapproved deduction of 5% to fund new prison industry operations.  In effect Nevada’s inmate workforce are being made to fund operating expenses of the prison industry out of their already meager wages.

DD ConnettPrison labor advocates are attempting to work with the NDOC, Nevada authorities and the responsible federal agency to cure any purported violations regarding the PIECP program to ensure Nevada is in full compliance with current state and federal provisions regarding the use of inmate labor.

Currently the Deputy Director of the NDOC’s Prison Industry, Brian Connett has indicated there are no proposed new industries being considered by the agency. However prior to the furor caused by the Alpine situation, Connett was advocating for a new industry in Nevada operated by a California company. The operation would have used inmate labor at minimum wages to sort through collected trash and remove recyclables. The collection of trash and refuse across the state would have been accomplished by the same California company.  This project was moving forward over objections voiced by the labor representative of the Senate’s Interim Finance Committee on Industrial Programs, Mr. Mike Magnani.  This recycling “industry” was tabled once the Legislature began looking into the prison industry operations.

CONWAY ROBERT PDBusinesses and a second labor representative, Rob Conway now sitting upon the legislative Interim Finance Committee will continue to monitor activities of the prison industry to eliminate the possibility of another situation arising that could jeopardize business owners or private workers.  Additionally the amended statute requires the Board of Prison Commissioners to review and approve any new industries or expansion of existing ones.  Hopefully vigilance by the labor representatives will keep the prison industries and expanded partnerships in check and allow more of Nevada’s unemployed to find employment due to the reduction in new prison labor programs that eliminated positions in the past.

Only time will tell if the new regulations prevent another Alpine-styled incident from reoccurring.

Nevada Continues to Struggle With Prison Industry Law

Nevada Continues to Struggle With Prison Industry Law

By Bob Sloan

The Nevada Board of Prison Commissioners (BPC) made up of Governor Brian Sandoval, Attorney General Catherine Masto and Secretary of State Ross Miller, met early on the morning of October 15th to discuss key issues involving the state’s Department of Corrections.  On the agenda was a “hot topic” involving the prison industrial program’s perceived unfair competition with private businesses.  Since last year controversy has surrounded the use of prisoners to compete with Nevada’s unemployed and against companies producing the same products in the private sector.

The NDOC Director presented proposed new administrative regulations for approval.  These “AR’s” covered a gamut of issues from installing trailer/RV spots at remote facilities to use of restraints on pregnant prisoners during labor, housing new hires who cannot find housing locally, and compliance with federal standards on prison rape elimination.  Not much new was learned from attending this Board meeting with one exception – withholding proposed AR 854, “Prison Industrial Program.”  Director Cox advised the Board that he was not presenting this one AR until he could confer with former Senator, Richard Bryan on language contained in the proposed regulation.

This proposed AR was in response to an ongoing controversy involving a partnership contract between Alpine Steel, LLC and the NDOC’s prison industries division.  Nearly a year ago steel companies discovered a competing business, Alpine Steel, LLC had partnered with the NDOC prison industries since 2006 to use inmate labor to manufacture or fabricate structural steel components.  This partnership included low cost facility leases, low paid inmate workers and utilities provided at reduced state rates.  In effect the NDOC was knowingly subsidizing the operations of one private company with tax dollars which provided a distinct advantage for Alpine over competing businesses.

During the investigations that followed, it was learned Alpine had been in serious default for years.  It had not been paying wages to inmates or NDOC staffers, lease and utility payments were in arrears and the state was owed nearly $500,000.  Alpine eventually agreed to a forbearance agreement to repay the money owed to the state and purportedly paid the back wages due to inmate workers.

In June of this year Alpine defaulted on that agreement and the state was awarded a summary judgment of $428,208 plus 1 ½% interest on the debt.  Alpine also surrendered its contractor’s license and is no longer bidding on projects (though their website is still advertising and offering services).  These developments came after new legislation (SB 478) was proposed to strengthen current laws on prison industry operations, providing more oversight and transparency involving prison industry operations.  Additionally wording was inserted to protect competing businesses from being disadvantaged from the use of prisoners as a cheap labor force.

Senator Bryan became involved early on, suggesting changes to the state’s law(s) pertaining to oversight, control and operation of the prison industry program that would eliminate any unfair competition with private manufacturers from the use of prison labor and protect private sector workers.  At last month’s BPC meeting Director Cox stated Senator Bryan had reservations or concerns about one section of the AR, feeling it would not provide the proper protection(s) to private sector companies if/when new prison industry projects were implemented.  Director Cox advised the Board he planned on conferring with Senator Bryan to rewrite AR 854 and present a modified version of it to the Board at the next BPC meeting on December 10th.

Cox advised the objection voiced by Senator Bryan and others was the ability of the Deputy Director to both enact and vet new programs by determining the impact – if any – upon businesses and labor.  Cox indicated Senator Bryan wanted that provision modified.

Senator Bryan is correct in objecting to or having reservations about that proviso.  These precise duties were the Deputy Director’s responsibility previously and as demonstrated by the Alpine situation, he handled them poorly.

 

TRANSPARENCY

Prior to the scheduled meeting a copy of the actual NDOC/Alpine Steel contract was received and researched.  In reviewing the contract and form submitted to the Nevada Board of Examiners several critical issues were immediately noticed.

Deputy Director Connett renewed Alpine Steel’s prison industry contract in 2011.  On the prepared form provided to the Board of Examiners, Connett informed Alpine was chosen because it had been contracting with the NDOC since 2006 with “satisfactory performance.”

There was no mention the company was in default on the old contract as the new one was submitted for official approval.  The form and contract itself were prepared and submitted by Connett – who obviously knew Alpine was in default and went forward without disclosing that fact to the Board of Examiners, the Legislature or the BPC:

 

satisfactory performance

Board of Examiners Contract Form on Alpine Contract 5/11

 

Additionally, Connett certified that the “contracting agency” (the NDOC) would not be providing worker space to Alpine, no Nevada State employees would be assisting Alpine under the contract and the state would not incur an “employment liability” if Alpine’s contract was terminated for failure to “perform.  Each provision initialed by Bulloch:”

Alpine NDOC Contract excerpt

from 2011 Alpine/NDOC Contract

In December 2012 the BPC requested the NDOC to stop all Alpine Steel operations at the High Desert State Prison and take steps to recover the outstanding money owed to the state.  On December 22nd, 2012 Director Cox officially closed the Alpine Steel fabrication operation.

Following the closure and during negotiations to recover the debt owed by Alpine it was learned that more than $438,000 was owed.  This sum included; $143,224 for past due wages to NDOC officers and another $115,270 in “rent” on agency space for workers:

forbearance excerpt 1

From Alpine Forbearance Agreement

Another important provision contained in the contract was the wage scale to be paid to the inmate workers.  The contract provided inmates were to be paid “the prevailing wage rate for the type of work performed”:

Alpine - prevailing wage requirement

2011 Alpine Contract Section 8.6

As I reported in February, Nevada’s Occupational Employment Statistics set the prevailing (median) wage for structural steel fabricators at $16.91 per hour worked:

NV OES struct steel fab

2012 NV OES Website

Yet the NDOC allowed Alpine to pay prisoners the minimum hourly wage for their labor.  From 2006 through 2012 when the operation was closed down, inmates were paid as little as $5.25 per hour to a high of $8.25 per hour regardless of knowledge, time on the job or experience.  Paying inmates less than ½ the scale paid to workers in the private sector allowed Alpine to underbid competing private sector companies for labor projections on projects.  Obviously this important contract provision was ignored by Alpine and the NDOC.

Just as obviously state employees were “assisting” Alpine in the performance of its duties by supervising the inmate workers in a facility space rented to Alpine by the NDOC – and Alpine was delinquent in paying wages to those officers.

Whether considered an “employment liability” or not, the fact that Alpine defaulted on paying officers more than $100,000 in wages meant the state had to pay those wages with tax dollars – and that is a liability.

Realizing how deeply indebted Alpine was, Legislators, Assemblymen, Interim Finance Committee on Industrial Programs members and a BPC member all voiced concerns at the amount owed by Alpine and worried about collecting the huge debt.  Official requests were made to Connett and Director Cox to secure a personal guarantee on the debt from Alpine’s owner, Randall Bulloch.

In September and October 2012 IFC members: AllenPuliz (manufacturing representative), Assemblyman John Ellison, Mike Magnani (labor representative) and Mr. Aguilera (business representative) all requested Alpine Steel’s owner provide a personal guarantee on payment of the debt owed by his company.  This request was made directly to Mr. Bulloch at the October 2012 meeting:

“Mr. Puliz asked if the pay back proposal had a personal guarantee or a guarantee from Alpine Steel. Mr. Bulloch said it was strictly a guarantee from Alpine Steel. Mr. Puliz stated he was a businessman and constantly provided personal guarantees. He asked if Mr. Bulloch was willing to do a personal guarantee on the debt owed to the state.”

Bulloch’s response was:

“…(He) was not prepared to provide a personal guarantee, but he would have further conversations with Mr. Connett to discuss other options.”

At the October meeting, Mr. Nicolas C. Anthony, Senior Principal Deputy Legislative Counsel, Legal Division, summarized the statutory authority and duties of the Committee on Industrial Programs.  In his summary the Deputy Legislative Counsel informed the Committee that their duties were “advisory” only:

”The Committee contains both members of the Legislative Branch and the Executive Branch due to separation of powers. Since the Committee only functions as advisory in nature, any recommendations made by the Committee have no official capacity…

“…Final programs and contracts, including leases of space, were established and entered into by the director of the Nevada Department of Corrections (NDOC) pursuant to statute, which was a function of the Executive Branch and not a function of this Committee…

“…Mr. Anthony indicated the recommendations of the Committee were purely advisory in nature. Mr. Anthony said its advisory recommendations can be submitted to the IFC, full legislature, or director of NDOC. If a recommendation was provided to the director of NDOC, it must pertain to new programs or the review of existing programs’ profitability within the first three years.”

In other words, the IFC Committee can only make “recommendations” to the Director or Deputy Director on new programs or review existing ones – and their recommendations carry absolutely no weight.  Neither Cox nor Connett would be bound to implement the recommendations of the Committee tasked with direct oversight of prison industry operations.

Legislative and private sector members charged with review of prison industry programs were prohibited from forcing the NDOC to seek a personal guarantee on the debt owed the state or formally request Bulloch post a personal guarantee.  The hands of the Committee were effectively tied.

With the NDOC circumventing the requirement that all industry projects be submitted to and approved by the BPC and ignoring the recommendations of the IFC, the agency was operating independently without any genuine oversight.  It appears the 2011 contract with Alpine, though provided to the Board of Examiners for approval, was never submitted to the BPC as required and the Board had no knowledge of the contract or actual operations of Alpine.

In January Connett ignored all calls for a personal guarantee from Bulloch.  Instead, he negotiated a forbearance agreement that allowed Bulloch to shirk personal responsibility for Alpine’s debt to the state.  The agreement also did not include; interest on that debt, a fine or penalty for defaulting on the contract and allowed Alpine to repay the past due money in small monthly payments over several years – and let Alpine’s owner off the hook for any debt owed.

On January 11th, 2013 Attorney General Masto’s office agreed to this proposed deal and Bulloch’s personal property and wealth were thus “officially” protected in case of any default in the future.

At the BPC meeting nine months later, the Governor and other members learned Alpine Steel had very quietly run up a tab of more than $450,000 with the NDOC’s apparent acquiescence and then defaulted on the negotiated and personally lenient repayment plan.  The Board questioned NDOC Director Greg Cox and Connett about the Alpine debt and both were forced to admit Alpine was indeed in full default.  When the Governor asked point blank the total amount owed, Connett stammered and said that though he did not have the “exact figure” he thought the amount was in the “neighborhood of $468,000.”

To anyone following this story it was readily apparent that default was more than likely in the case of Alpine Steel.  Already facing substantial IRS tax liens, litigation from creditors and outstanding state tax liens, Alpine was in dire financial straits when Connett negotiated the forbearance agreement and the Attorney General approved it.

When I forwarded questions to the NDOC and the AG’s office as to who/which agency negotiated the forbearance agreement without pursuing a personal guarantee from Bulloch, both responded the information was “attorney client privileged” refusing to answer.

On the important question as to actual ownership of the Alpine equipment seized and being held by the NDOC as collateral, both NDOC and the AG’s office again cited attorney client privilege and refused to provide any information on value or legal ownership (a third party now claims ownership of some of that property).  On the question of sale or disposal of that equipment to pay down the judgment amount, both again cited attorney client privileged information, refusing to answer.

In June of 2012 the prison industry financial records showed Alpine was $347,778.11 in arrears on payments to the NDOC.  Yet with at least this amount owing, Connett still did not call the contract in default or cease operations.  Instead he kept the operation open – over the recommendations of the IFC – and over the next six months Alpine ran up another $67,131.78 in bad debt.

In the end the taxpayers are out hundreds of thousands of dollars and any effort by lawmakers exercising oversight to attempt to fully inform and protect the taxpayers by guaranteeing the debt would be paid, were ignored by state actors at the highest levels of the NDOC – and ultimately, the Attorney General’s office.

Even when all the owed money and failures to enforce contract terms were made public, both of those agencies cite attorney client privilege in an effort to deny taxpayers any information on which agency or individual bears responsibility for negotiating away their rights or interest in recovering the money lost by the prison/Alpine operation.

Connett bears responsibility for forcing Alpine’s inmate workers to perform duties for Alpine without receiving wages – slave labor?  Bulloch and Connett admitted to the IFC that Alpine owed prisoners $78,000 in unpaid wages and only after the story became public did Bulloch finally pay those wages in September and October 2012.

If the NDOC paid the owed inmate wages out of department funds, they did so without legal authorization and in direct violation of the terms of the Alpine contract.  In either case though the inmates finally got paid, the balance of nearly half a million dollars is now the responsibility of taxpayers to reimburse.

This is why the legislature proposed, passed – and Governor Sandoval signed – SB 478 to strengthen oversight, require posting of security, bond or personal guarantees on proposed new prison industry projects; to protect inmate workers, local businesses, workers and taxpayers equally.  It is also why Senator Bryan had reservations concerning the wording of proposed AR 854.

CONFLICT OF INTEREST?

After the last BPC meeting concluded, several questions remained unanswered.  One is why Deputy Director Connett continued to allow Alpine steel to default from 2009 through 2012 without taking any steps to cure the default or stop the operation as allowed under the agreenent?  The contract has specific actions to be taken within 30 days of any default yet Connett failed to initiate any of the provisions called for in the contract when a default was triggered.  This lack of action led to more and more debt piling up that ultimately has cost the state.

Some have conjectured that possibly there was some form of corruption involved in the relationship between Bulloch and Connett, suggesting a possible “quid pro quo” situation.  There is no evidence to support this theory, no document or verifiable statements made by third parties have surfaced to sustain such a speculation so it remains just that – an unfounded speculation.

However, what isn’t speculation is the fact that Nevada’s prison industry program has been operating like an uncontrolled private venture with company executives avoiding any accountability or responsibility to shareholders for their actions.  Only in this case the “venture” had access to unlimited funding with tax dollars and the “shareholders” are Nevada taxpayers.

One of the worst elements of this default was the forcing of prisoners to work for a private company without wages – especially at a scale below that required under the contract.  Cox and Connett not only have a duty to the taxpayers to not waste the department’s appropriations, it also has a duty to not exploit prisoners in their care, custody and control.  Inmates have no choice in their work assignments and cannot simply walk off the job when not paid.  These NDOC officials made a conscious decision to force prisoners to work for this private manufacturer without pay which financially benefited Alpine substantially

None of the concerns voiced by the legislature, administration and media address the fact that prisoners in state custody were made to work for a private company without pay.  This wasn’t working in the laundry; kitchen or cleaning up the prison…this work was for a private company that profited from that forced labor.

Since Connett’s appointment as Deputy Director, several key and important changes began to take effect.  One was an immediate increase in debt owed to the NDOC.  Contractors such as Alpine began falling behind on lease and other payments indicating a failure by the NDOC to enforce contract provisions and cure such defaults.  The industry’s accounts receivable (outstanding or uncollected accounts due) rose sharply to nearly $1 million dollars in uncollected income and in 2010 Connett turned over $800,000 of that outstanding debt to a collection agency to attempt to recover.

When Connett assumed control of the prison industry it had a “contingency fund” of $1.5 million dollars to work with.  Since 2008 this fund has been used to the extent it now contains only $500,000.

With the Nevada prison industry oversight authority limited to nothing more than an “advisory” body, the NDOC continuously ignored the Committee’s recommendations and operated as it wished.  The agency began to successfully bypass the legislative requirement that the BPC review all new or proposed industries, further hiding industry operations.  This led to the NDOC operating the prison industry program without oversight, legislative controls or interference.

Contributing to this portrayal of the state’s faltering prison industry program is the real possibility that Deputy Director Connett’s duties to the people of Nevada and the NDOC have been compromised due to a concurrent position he holds with the National Correctional Industries Association (NCIA).

The NCIA is a trade association that actively lobbies at the federal, state, and local levels for continued funding for the expansion and effective administration of prison industry programs and conversely, opposes legislation that would adversely impact correctional industries programs.[i]

Collectively this group represents the largest and most active advocacy in support of continued use (and expansion) of prisoner labor and maintaining inmate wages below the fair minimum wage – as shown in the below “Resolution” adopted by the NCIA in 2010:

NCIA Minimum Wage Resolution

From NCIA Library – Last Accessed 3/10

Compliance with this resolution is demonstrated by Connett’s establishing actual wages paid to Alpine’s inmate workers at or below the minimum wage, in direct violation to the terms of the NDOC contract’s prevailing wage provision.

Individual citizens, companies and others in opposition to prison labor used by private companies find themselves face to face with this large and influential group operating as a trade/lobby organization with more than forty state prison industry administrators sitting upon the NCIA Board.

Connett NCIA position

From NCIA website: http://www.nationalcia.org/

Connett is the current Chairman of the NCIA Board while also serving as Deputy Director of Silver State Industries and as such he has one foot in each camp.  As Chairman of the NCIA Connett has a duty to expand prison industry operations, keep companies partnered with each state prison industry operation and limit the wages paid to inmate workers.  It would be detrimental to the NCIA to have to disclose that in his own state Connett had to pay inmates a prevailing wage or had to close a prison industry.  This could be one reason Connett failed to act responsibly, refusing to take any curative actions when Alpine first began to default.

There may be other theories as to why Connett failed to enforce the terms of the Alpine contract and spent time and energy attending Committee meetings and legislative hearings in an attempt to keep the Alpine operation open – in spite of numerous calls to close it down and the growing debt to the state.  Unfortunately to date, no one has been able to secure any response on the “why” from Connett or Director Cox, who continue to cite attorney client privilege on all questions posed on this topic.  Though the media has posed those questions, the BPC, IFC and legislature has not.

Several requests for documents and information have been made to the NDOC and Director Cox in an attempt to gather information necessary to establish precisely the reason for Connett’s actions.  As this article goes to publication, there has been no response from the NDOC – other than citing attorney client privilege – from Director Cox or Deputy Director Connett (who is also the NDOC Public Information Officer).

NDOC public relations officer

As the Deputy Director, Public Information Officer and the Chairman of the NCIA, Connett has a vast amount of power and influence.  He is able to choose new industry programs, decide the material released to the public about proposed or existing programs…and he holds a key position in the private agency overseeing, determining and enforcing policies and standards involving all prison labor and industries in the U.S.

As the DD, Connett failed to enforce compliance to protect the agency and taxpayers when Alpine began to default and in the end he attempted to withhold public information about Alpine’s failures while publicly applauding  the use of prison labor to manufacture steel components for the SkyVue Observation Wheel.

Responses to questions sent to Director Cox come from Connett as the PIO.  Each official response to queries for this article has come via email without Connett’s name or signature affixed.

The BPC, IFC Committee, Board of Examiners and lawmakers rely upon data, compliance certifications and other information provided to them by the NDOC Deputy Director.  The DD has a duty to advise these Committees, Boards and lawmakers with full, factual information for those bodies to use when making critical decisions regarding prison industries; new projects, status of existing operations and contract compliance.  Connett has demonstrated he is willing to withhold critical information and facts from these official bodies when it benefits his operations.  Under his authority there has been little transparency in prison industry operations.

As shown, Connett simply has “too many dogs” in the hunt to remain the sole authority selecting new programs, or determining the impact upon private sector workers and businesses from his industry operations.  Those important determinations should be made by others with no personal involvement riding on the outcome.

Failing to provide full facts to Boards and Committees, or withholding important information that is significant when considering prison industry expansions is negligent and as demonstrated can result in a huge loss to the state and taxpayers.  It also can result in underpaid inmate workers being used to lower operating expenses by one company to the detriment of his/her competitors – even working them without pay for extended periods.

NCIA Bylaws require any company partnered with a prison industry using inmate labor to become a member of their organization.  This may explain DD Connett’s continued support of an NCIA member company by his attending numerous meetings and hearings where he urged administrators and lawmakers to continue to allow Alpine to operate once the company’s defaults became public.

Hopefully the language of AR 854 will contain sections allowing for a committee or board to make determinations as to the impact upon competing businesses and labor when new industries are proposed or considered.  Having those important tasks in the hands of the one individual – or agency – seeking to implement any new contract or anticipated new industry truly is a case of the “fox guarding the hen-house…”

To avoid any appearance of impropriety the NDOC should operate under joint authority of the BPC, IFC and legislature.  The prison industry has to operate within the parameters set by those state bodies without deviation and under tight oversight provisions.  Continuing to allow the NDOC and prison industries to operate without requiring adherence to recommendations made by responsible legislative and control authorities, makes another Alpine-styled situation a real possibility.

It is now generally known and accepted that the SkyVue wheel is a stalled project that may never be completed.  Bulloch’s claim that he had this contract sewn up and would pay back his outstanding debt to the state once the project started in earnest was a promise he would not have been able to fulfill.  It is likely that if the BPC allowed Alpine’s prison industry operation to remain open as Connett suggested, the state could now be on the hook for millions more in unpaid debt from Alpine as prisoners manufactured components for the SkyVue project.

In this case it was half a million lost through the NDOC Deputy Director’s failure to apply available cures to a single contract’s defaults.  It could easily have been millions more if local business had not raised the alarm last year and organized labor had not joined forces with them.

As the Alpine story has shown us all, a lack of adequate oversight will result in Nevada’s workers, businesses and prisoners to suffer.  Taxpayers bear the burden of making up losses that accrue in the absence of true oversight and firm controls.  Without proper oversight the NDOC and its programs can operate in a fiscally irresponsible manner without fear of consequences.

Next month Director Cox will present the BPC with new finalized Administrative Regulations pertaining to operating the state’s prison industry program(s).  It is hoped that those regulations will provide genuine safeguards to protect everyone (staff, inmate workers, private businesses, unemployed workers and taxpayers) from exploitation such as that which occurred with Alpine Steel.


Slavery in Nevada?  Yes, According to Assemblyman Jim Wheeler – and NDOC

Slavery in Nevada? Yes, According to Assemblyman Jim Wheeler – and NDOC

by Bob Sloan

Over the past year I made several trips to Nevada, wrote numerous articles and interviewed dozens on the topic of Nevada’s prison industry working inmates without pay.

Under a contract between Alpine Steel, LLC and the Nevada Department of Corrections’ (NDOC) Silver State Industries (prison industry program) inmates were made to work for as much as four years without receiving any wages from Alpine.  During that time frame, many of Nevada’s unemployed steel workers were denied jobs due to the use of inmates to perform Alpine’s steel fabrication production.  Other businesses were harmed by this contract as they could not compete against a competitor with little or no labor costs when bidding on projects.

Late last year the Board of Prison Commissioners ordered the closure of the prison industry operation run by the NDOC and Alpine Steel.  At the time of the closure, Alpine’s owner, Randall Bulloch, acknowledged he had failed to pay the prisoner’s wages and agreed to pay $78,000 in back wages owed to prisoners by November 2012 .  Alpine still owes the state nearly a half million dollars in unpaid leases, utilities and wages for NDOC Supervisory personnel after agreeing to repay the state and defaulting on that agreement as well last June.  Alpine eventually agreed to voluntarily surrender its contractor’s license to the state and steps are being taken to attempt to recover the huge debt still owed to Nevada taxpayers.

Throughout I believe I accurately described the act of forcing state prisoners to work for a for-profit company without pay as “Slave Labor.”  Though this story has blossomed into one reported nationally and internationally, most have concentrated upon the issue of a lack of proper state oversight, the NDOC using tax dollars to subsidize a private business and misuse of state tax dollars by the prison industry division.

Most of the media totally ignored the fact that the employees actually performing hours of work under the contract between the state and Alpine, were not compensated for their labor by the company.  Though this and other important clauses were in the actual contract, Alpine was allowed to default without enforcement by the NDOC Director or Deputy Director.  Without the complaints and objections voiced by organized labor and business owners, this arrangement would be continuing with state prisoners being deliberately exploited for their labor.

Though NDOC officials have a duty to provide “Care, Custody and Control” of those incarcerated within Nevada’s prison system, administrators failed to protect Alpine’s inmate workers from exploitation of their labor.  Agency officials in fact condoned such acts by their refusal to enforce the contract provisions requiring  inmates to be paid “prevailing wages” by Alpine.  In effect the NDOC was acting as a labor contractor for private companies, providing a captive labor force for a handful of select businesses.  A captive workforce without an ability to voice complaints, quit or refuse to work when not paid.  Prisoners also have no say in the wage scale, work conditions or safety requirements in their workplace.

Many thought this to be simply a case involving a lack of oversight or enforcement by a state agency and its administration.  However when this story broke and the dust settled, the legislature passed new laws strengthening the state’s statutes involving prison industries and the use of inmate labor. Governor Sandoval signed the legislation into law, effective July 1, 2012.

While this new law protects other businesses and organized labor in Nevada, it does nothing to ensure prisoners are compensated for their labor when employed by private companies.  With the Alpine contract that company was required to pay prevailing wages to the inmate workers.  Instead they were paid minimum wage or less – and for years received no wages at all – and used in place of Nevada’s unemployed private sector workers.

wheelerWhen the actual vote was taken on this new law by the Nevada Assembly, there were only three dissenting votes against it.  One of those voting in opposition to SB 478 was Nevada Assemblyman, Jim Wheeler (R-Gardnerville).  It appeared Wheeler was content with the status quo of allowing the NDOC to work prisoners under contract to private companies without paying them required wages.  In essence he would sanction continuing such slave labor…

More recently Assemblyman Wheeler has come under fire for voicing similar sentiments on common slavery in Nevada, saying, “I’d Bring Back Slavery If Constituents Wanted…”  Since a YouTube video of Wheeler speaking at a Republican gathering and making that statement surfaced, Nevada Democrats, Governor Sandoval and others have denounced Wheeler, with some properly calling for his resignation.

Wheeler’s “constituents” however are backing him.  The Douglas County, Nevada Republican Central Committee issued a “Resolution Supporting Nevada Assemblyman Jim Wheeler“, in which they proclaim:

WHEREAS, Assemblyman Jim Wheeler has come under attack by forces employing unethical pressure in an attempt to manipulate Nevada’s Legislature, diluting the voice of The People; and

WHEREAS, Assemblyman Jim Wheeler has honored the trust placed in him by his constituents by keeping faith with The Nevada Republican Party Platform and honoring his oath of office; and

WHEREAS, The People of Douglas County, under the Nevada Constitution, firmly assert our exclusive rights to select our representatives to be our voice and advocate for our rights and interests; and

WHEREAS, The continued intentional misrepresentation of statements and positions of our elected representatives, as well as exertion of unwarranted pressure to resign, violate the constitutional rights of The People of Douglas County to choose our representatives, and must end now, therefore, be it

RESOLVED, That the Douglas County Republican Central Committee offers its strongest, unqualified support to Assemblyman Jim Wheeler for the leadership example he displays in representing The People of the Great State of Nevada; and

BE IT FURTHER RESOLVED, That the Douglas County Republican Central Committee gives notice to all that The People of Douglas County choose their representatives, and that no longer will we ignore the corporate, media, and other interests that seek to undermine the will of The People by unethically twisting the message of our elected officials; and

BE IT FURTHER RESOLVED, That the Chairman of the Douglas County Republican Central Committee will ensure that this resolution is transmitted to Nevada Assembly Republican Caucus.

Adopted this 1st day of November, 2013 by the Douglas County Republican Central Committee Executive Board.

Obviously this Republican “Committee” supports Wheeler – and apparently takes no umbrage that he would agree to introduce legislation allowing out-and-out slavery if that is what Republican’s of Douglas County determined was appropriate.

As with other politicians over the years who have uttered reprehensible statements, Wheeler has tried hard to put a spin on the facts of his utterance and his District 39 Committee is attempting to assist in that by accusing the “corporate media” of undermining the “will of The People” and twisting Wheeler’s words.

What Wheeler and the Douglas County Republican’s don’t get is that the Assemblyman’s excuse that he was just trying to exhibit that he would do whatever his constituents wanted, demonstrates he would be amenable to mob rule.  That is precisely what would happen if a lawmaker’s constituents insisted he/she introduce legislation wanted by them over objections or concerns of others.  An elected lawmakers must weigh all the facts, look at issues logically and make legislative decisions based upon all factors – not simply the will or whim of his constituents.  Voters in one small area may support one issue completely, while the remainder of the state opposes it.  Attempting to apply the will of a small minority upon the majority would be attempting to legislate by mob rule.

So Nevada – one of the last states to join the Union and a state that never involved itself in slavery – finds itself in the headlight of the “racist” topic that has been on our national radar since 2008.  While political factions and groups in other states have argued over whether voter ID laws sought by predominantly GOP controlled states is racist, denying votes to minorities, Nevada remained absent in that conversation.  Maybe Nevada Republicans now seek to join their voice to those of others on an issue such as slavery, weighing in on that topic – right or wrong.

In 21st century America, the concept of and very term “slavery” should be extinct, not being raised for the first time in Nevada.  Hopefully the NDOC will stop using prisoners as a private slave labor workforce for select businesses and companies – and legislators such as Jim Wheeler will stop making such inflammatory statements in the future.

In today’s political arena a lawmaker sitting with fellow legislators of all races who utters a statement such as Wheeler did, must make fellow Assemblymen/women uncomfortable – especially African-Americans and Hispanics.  Perhaps he should resign his post and let Douglas County select someone else to represent them in the Assembly…someone less inclined to inflame other members of the Assembly and voters from outside Douglas County.

Case Study on Alpine Steel: Prison Industry Subsidized by Taxpayers to Compete with Local Businesses Fails Spectacularly

Case Study on Alpine Steel: Prison Industry Subsidized by Taxpayers to Compete with Local Businesses Fails Spectacularly

by Bob Sloan – Cross-Posted from PRWatch

“The taxpayers have been left holding the bag…. As a result of this I think there is going to be a lot more oversight.”

Private prison profitsThose were statements made by Nevada Assemblyman James Ohrenschall in an interview on Vegas Inc. September 21. Mr. Ohrenschall is the former chairman of the Legislature’s Interim Finance Committee on Industrial Programs. At the time of that interview, the IFC Committee was meeting to investigate facts that prompted his concerns.

Ohrenschall was speaking of prison labor and Nevada prison industry’s partnership with Alpine Steel, LLC, that has resulted in nearly half a million dollars of debt owed to the state and a legislative reform of the state’s prison industry program.

When Vegas Inc. anchor Dana Gentry asked the Assemblyman if Nevada’s Department of Corrections (NDOC) or prison industry officials were being held accountable in any way, he responded, “I believe that they will be held accountable…” The oversight authority for prison industries is the Legislature’s Interim Finance Committee on Industrial Programs (IFC-IP). Critics had accused the committee of not providing sufficient oversight or vetting of NDOC contracts with private companies and not enforcing compliance with key statutory duties of the committee. The Committee served, more or less, to “rubber stamp” proposals brought before it by the NDOC without fully determining the impact a new proposed industry would have on Nevada workers and competing businesses.

The Nevada labor force is now represented by two members on the IFC: Robbie Conway of Ironworkers Local 433 and Mike Magnani of Teamsters Local 986. With their dedication to protecting the rights and jobs of Nevada’s workers, it is likely that situations similar to the one involving Alpine will not reoccur.

After the investigation of Alpine Steel, members of the IFC appear to realize that prison labor competing for jobs needed by Nevada’s unemployed is a serious issue that needs constant vigilance. Doubling the number of labor representatives on the committee overseeing prison industries is expected to improve oversight.

With the addition of Conway to the Committee and a new Chairman, the current IFC appears to be a genuine “oversight” body now. They asked key questions, probed for responsive answers and asked IFC member Cox and Deputy Director Connett to provide materials to them supporting answers they provided to the Committee at the initial meeting on the 20th.

Despite Huge Subsidies (and Prison Labor) Alpine Steel Incurs Big Debt

The sad saga of prisoners being used for their labor by private contractors in Nevada continues to amaze the citizens of this state.

Randy Bulloch, CEO of Alpine Steel

Alpine Steel, LLC owner, Randy Bulloch

The story began late last year when steel companies began protesting to NDOC and legislative authorities saying they were being unfairly forced to compete against a local company using inmate labor. Business owners asserted they had lost bids on projects and thus were unable to expand their businesses or hire more workers due to interference from Nevada’s prison industry operations.

Claims were made that dozens of Las Vegas steel workers were being denied jobs and others possibly displaced due to the use of prisoners as a slave-labor force by Alpine Steel, LLC. The NDOC had given Alpine’s owner, Randy Bulloch, a “sweetheart deal” consisting of inmate wage scale set at or below minimum wage (less than 1/2 of the current prevailing wage for Nevada’s steel workers), manufacturing facility leases (set at 66% below the going rate for such space outside prison), and utility costs at NDOC’s reduced rates.

Such state subsidies provided Alpine with a definite advantage over competitors when bids were sought for new projects in and around Las Vegas. Bids won by Alpine due to reduced overhead costs provided by the NDOC included: the “SkyVue Observation Wheel“, the Wet ‘n’ Wild water theme park, bridge work on an overpass over I-15, and the expansion of a mental hospital, among dozens more since 2006.

5th St. bridge over I-15, Las Vegas

5th St. bridge over I-15, Las Vegas

As this story unfolded earlier this year, it was discovered that in spite of receiving the huge financial benefits mentioned above, Alpine was in arrears on payments for inmate wages, staff salaries, utility costs, leases, and workers compensation premiums. In essence, the evidence suggested that the bulk of Alpine’s Las Vegas operation was being quietly financed by the NDOC with state tax dollars.

In addition, prison industry critics learned the IRS had recorded a lien of more than $600,000 dollars against the company; a tax lien had also been filed by the state DOR and several steel suppliers had placed liens against Alpine for failing to pay for materials. (These liens continue to pile up: last month, the IRS recorded a second tax lien upon the company for more than $30,000.)

The story became public through the media and in December 2012 — under pressure from the Board of Prison Commissioners (BPC) and an order from Governor Sandoval — NDOC Director Greg Cox closed down Alpine’s steel fabrication operation at the High Desert State Prison complex. Members of the BPC and the IFC-IP called for some form of personal guarantee from Bulloch to ensure the taxpayers were not left on the hook for nearly half a million dollars owed by Alpine.

Estate of Alpine Steel CEO Randy Bulloch

Randall Bulloch’s estate in Summerlin

In January, Connett and Bulloch reached an agreement on repaying the money Alpine owed to the state. Connett negotiated through Deputy Attorney General Carrie Parker on AG Catherine Cortez Masto’s staff and got her to approve a proposed forbearance agreement setting the Alpine debt at $438,000+ with no interest, penalties or additional fines.

Incredibly, the terms of the agreement failed to include any personal guarantee from Alpine’s owner Bulloch — who resides in a multi-million dollar, 9,400 square foot, guarded and gated estate — while owing millions in state, federal and personal liens — much of that owed to taxpayers.

Though many including the Interim Finance Committee and Secretary of State had demanded such a provision, the final document left any personal guarantee out of the agreement. If a default occurred, Randy Bulloch’s personal property and other assets would be untouchable — and the debt likely uncollectable. The substantial IRS lien precedes and takes precedence over the newly filed NDOC summary judgment, making it less likely the state will be able to recover any of the outstanding debt until the IRS lien is satisfied.

It is incomprehensible to most that in the face of more than a million dollars owed to the IRS, creditors and the state of Nevada, the NDOC would negotiate an agreement on additional debt owed by Alpine without seeking any form of personal guarantee from the company’s owner. Similarly it defied belief that a member of the AG’s staff failed to demand such a personal guarantee for the debt, knowing the repayment plan was being sought for a company that was already in deep financial trouble.

The Alpine contract is at the core of this problematic situation involving the use of state owned facilities and prisoner labor. The NDOC failed to take appropriate action to cure Alpine’s continued default for more than three years. Incredibly, Connett issued a new contract to Alpine in 2011 while the company was in serious default — without requiring the company to come current on its debt — and the IFC-IP approved the contract without knowing of the default(s).

Allowing a contractor to operate for more than four years without making required payments and taking no steps to stop the bleeding of tax dollars before renewing a contract, demonstrates a total lack of responsibility to the state administration and the taxpayers.

Only after the story broke in the media was the Governor, the IFC members and the BPC made aware of the full amount owed due to nonpayment(s). With Attorney General Cortez-Masto sitting on the BPC, the absence of any personal guarantee from Bulloch in the forbearance agreement signed off on by her agency is puzzling.

The NDOC Defends Alpine and Dodges Questions about the Money Due

NDOC Director James "Greg" Cox

NDOC Director James “Greg” Cox

The NDOC’s Director Cox was contacted about details of this debt and any related negotiations. His office forwarded the query to NDOC Deputy Director Brian Connett, who is also the NDOC Public Information Officer. Connett is also the current chairman of the board of the “National Correctional Industries Association” (NCIA), which oversees the Prison Industry Enhancement Certification Program (PIECP).

As of press time, both the Director and Deputy Director have declined to respond. In the discussion at the IFC meeting on the 20th, Connett and Cox specifically directed the members and public to address questions to the AG’s office for a response.

Due to the costly default by Alpine, the state Senate proposed legislation — SB 478 — to amend the rules governing the IFC (NRS 209.461). In addition to adding a second labor representative to the IFC, the bill created a new provision requiring any company wishing to contract with the prison industry program to post a personal guarantee, surety or bond of not less than 100% of the pro-rated annual amount of the contract.

The measure passed and became effective July1, 2013. The NDOC was told to propose new administrative regulations to comply with the changes at the upcoming October 15 meeting of the Board of Prison Commissioners (BPC).

The NDOC’s prison industries (PI) accounts receivable increased rapidly in 2009 to nearly $900,000.

In 2010, the prison industry turned over more than $800,000 in accounts receivable to a collection agency and, for fiscal year 2012, it claimed an additional outstanding accounts receivable balance of $614,200 for a combined potential loss of $1.4 million in revenue in just two years of operations.

On September 20th, the new IFC-IP held its first meeting following the end of the biennial session. One of the main items on that agenda was the discussion of Alpine Steel and the debt owed to the state and state taxpayers.

NDOC Deputy Director Brian Connett

NDOC Deputy Director of Prison Industries, Brian Connett

NDOC Deputy Director Brian Connett read a prepared statement regarding Alpine Steel to the Committee:

“I will read the statement that we have in regards to addressing Alpine Steel…”

“The prison industry has been working very closely with our deputy attorney general and the attorney general’s office on the Alpine Steel situation through our counsel. PI entered into a forbearance agreement with Alpine Steel in January. Basically the terms were that Alpine would make $5,000 monthly payments with balloon payments of a minimum of $20,000 due at the end of June and at the end of December. Alpine made their monthly payments for February through June. Those payments totaled $25,000. Alpine could not make their balloon payment due at the end of June.”

“Again, working with our DAG [Deputy Attorney General], an amendment to the forbearance agreement was created. It amended the balloon payment due to a minimum payment of $10,000 that was due no later than August 30th and an additional minimum payment of $10,000 that was due no later than October 15th.”

“Alpine defaulted on their $5,000 payment due July 15th [and] our DAG and the prison industries quickly filed a summary judgment against Alpine Steel as a result of the breach. The state has been awarded a summary judgment against the Alpine Steel for $428,208 plus post judgment interest growing at the rate of 1/2 percent per month. So being a state agency, this judgment creates a lean on the Alpine’s real and personal property. The collection of these has been turned over to the state controller’s office for the collection process. Thank you.”

Under questioning from Committee members, NDOC’s Deputy Director Connett and NDOC’s Director Cox at times gave somewhat evasive answers.

For example, when asked point blank if any of Nevada’s prisoner-made products were “exported” out of state, Connett responded that state services were the prison industry’s largest customer.

On another matter, they admitted that Alpine’s equipment was still in place at the “High Desert State Prison” (HDSP), saying Alpine had been “locked out” of the facility since December and the NDOC was actively attempting to rent the space to another contractor. Apparently these officials are comfortable with losing a potential $5,000 per month in lease income by keeping the space filled with Alpine’s equipment.

Connett’s new demeanor concerning Alpine has done an about-face of late. Previously, Deputy Director Connett had appeared at several hearings and meetings in support of Alpine, advocating that the company and its prison labor program be kept open, even in the face of the increasing debt. Connett was the sole defender of Alpine in the media and before the BPC and IFC hearings. He now no longer speaks favorably of Alpine in public.

The newest IFC member, Robbie Conway, asked how long it had been since Alpine had been at the prison shop. Director Cox indicated he’d shut the operation down on December 23, 2012, but he did not confirm that Alpine had not been there after that date. Conway went on to ask, “Are we certain that Alpine’s equipment is wholly owned by them or is there is a chance that it is in debt also?”

Connett answered: “There may be some questions on the ownership of some of that property out there.”

Director Cox quickly added: “It is clear and it’s my understanding there is property out there that does not belong to Alpine. So before anything is released, it will go though the attorney general’s office and go through the process.”

Connett added he had inventoried Alpine’s equipment but had failed to secure an appraisal of it.

In a situation such as this where a substantial debt has been incurred, with an ongoing default on a contract and equipment has been seized and being held as collateral against that debt, an evaluation of the “collateral” should be secured quickly to determine the actual financial risk at stake if a judgment results.

Alpine had been in arrears for several years when the NDOC closed down the prison project last December due to the outstanding debt. It is more than odd under those circumstances that since December the NDOC failed to determine the value of the collateral they hold against a $428,000 debt. Now finding that some of the equipment seized and held is not even owned by Bulloch or Alpine puts the state in an even more untenable position to recover the debt.

Key Questions about the Debt Owed Taxpayers Remain Unanswered

Unfinished Alpine Steel SkyVue Observation Wheel

View of stalled SkyVue Observation Wheel project

In response, the Deputy Attorney General — with whom the NDOC has been working on the Alpine case, as noted by Connett’s statement — was asked the following questions that NDOC had failed to answer:

  1. Did the Deputy Director of the NDOC, Mr. Connett and Alpine owner, Mr. Bulloch, negotiate the terms and conditions of the forbearance agreement and then seek approval from the AG’s office?
  2. If the answer is no, that the AG’s office negotiated the terms, did your office seek a personal guarantee from Mr. Bulloch on the debt owed?
  3. In the face of multiple ongoing liens, defaults and creditor/vendor litigation(s) against Alpine Steel, did you suggest a condition that a personal guarantee from Mr. Bulloch be included to ensure repayment should a default occur?
  4. Has anyone come forth and filed a claim of ownership on any of the equipment held by the NDOC at HDSP? [S]ome of the equipment seized by the NDOC as collateral on the debt owed by Alpine has been determined to be the property of a third party. If this is factual, will your office release any Alpine equipment that is claimed by another individual or company?
  5. With IRS and other liens pre-dating the summary judgment awarded to the state last month, will any assets owned by Alpine and held as collateral by the NDOC first go to satisfy those preexisting liens? If so how does the state intend to recover the loss of the $428,000+ debt of Alpine?

The official response from the AG’s office came from its Public Information Officer, Jennifer Lopez:

“My colleague Carrie L. Parker, Deputy Attorney General, Bureau of Government Affairs, mentioned you had questions about Alpine Steel, LLC, Randall Bulloch and the Nevada Dept. of Corrections. We have discussed your question and think because you are seeking attorney-client privileged information, it is best for you to direct this inquiry to Silver State Industries,” which is part of NDOC.

So the “official” response redirects inquiries back to the NDOC which has already directed questions to the AG’s office. Between the two agencies, it appears that in the Alpine matter transparency is non-existent and deliberately so.

During the meeting Connett stated that the PI’s accounts receivable is now $119,567.66 — which would represent a serious decrease from 2012. However, the debt owed by Alpine has been not been collected.

Although the past due account shows a marked recovery, that may be an illusion. Alpine’s $428,208 has merely been transferred from one state department to another state department creating the appearance that PI is recovering financially. The loss of nearly half a million tax dollars still exists but is no longer on PI’s books. Adding Alpine’s default amount to the AR figure provided by Connett shows that without transferring Alpine’s debt, PI’s accounts receivable would be $547,775.66, not significantly different from 2012’s levels.

Earlier this year, Alpine’s license with the Nevada State Contractors Board (NSCB) was reduced to $500,000, but the NSCB allowed Alpine to remain in business.

Despite multiple defaults to the IRS, Nevada’s Department of Taxation, the NDOC contract, vendor invoices and payments on worker’s compensation payments, Alpine has continued to operate, putting out bids on new projects even as Bulloch lays off Alpine employees. Some of those let go have stated that they worked for the company at reduced wages and without receiving overtime due them.

Will Alpine Steel’s License Be Revoked on October 9?

NSCB was asked if that agency is considering revocation of Alpine’s license. NSCB’s Public Information Officer, Jennifer Turner  responded:

“Alpine Steel is scheduled to come before the Board October 9, at which time it is requested they voluntarily surrender their license.”

The NCSB appears to be the sole state agency/department that has decided enough is enough and has taken less than eight months to “cure” Alpine’s non-compliance with state law and hold the company and its owner personally responsible for their actions in some way.

Had the NDOC and the Attorney General’s office adopted the same position months ago, perhaps the amount of the debt owed by Alpine would be guaranteed by Bulloch, providing some hope to taxpayers that the more than half a million dollars owed would be recovered.

It remains to be seen if members of the BPC will ask tough questions — similar to those previously posed to the NDOC and AG’s office — at the upcoming meeting on the 15th. Perhaps they will get complete answers to important questions regarding how and when the state can recover the Alpine debt.

After the Board of Prison Commissioners meeting on the 15th of October, a follow-on article will be published. With the introduction of the new regulations and the removal of Alpine from the prison industry program, perhaps the Alpine saga will finally be put to rest.

Labor and Business Win Prison Industry Battle

Labor and Business Win Prison Industry Battle

By Bob Sloan

Today prison industries are booming with hundreds of thousands of prisoners employed in factories manufacturing a myriad assortment of products and providing services such as call centers, customer service, marketing, reservations and manual labor for municipalities.  Thousands of American workers have been displaced by companies choosing low paid prisoners as a labor force.  Many of these companies realize additional profits from subsidized leases for state manufacturing facilities within prison compounds.  This has been the trend since 1999 but today, as a Burl Ives lyric proclaims, “times, they are a changin’…”

Nevada represents the latest resistance to prison programs taking jobs out of the private sector and allowing unfair competition between private businesses where one company has access to low paid prisoners for their private workforce.

On May 29th legislation reining in control of Nevada’s prison industry program, passed the state Senate and was sent to the desk of Governor Brian Sandoval.  On June 1 the Governor signed the new legislation and it becomes law in Nevada on July1, 2013.  The introduction, passage and signing into law of this necessary legislation is a huge victory for opponents of prison industry programs in the U.S. – and signals to other states the need for similar vigilance of prison industrial programs.

Sen Smith 4-29

Senator Debbie Smith

Known as Senate Bill (SB) 478, the Nevada legislation was introduced and sponsored by the Senate’s Interim Finance Committee as a means of tightening controls over Nevada’s prison industry partnerships. Author of the bill was Senator Debbie Smith, Chair of the Senate Finance and Interim Finance Committees.

Private companies (union and non-union) joined ranks with union leaders in support of changing state laws regarding prison industry operations in Nevada.  

Sen. Richard Bryan

Sen. Richard Bryan

Former Nevada Governor and U.S. Senator, Richard Bryan, met several times with the state Board of Prison Commissioners and appeared before both Senate and Assembly committee meetings where he argued that necessary changes must be made to the existing prison industry regulations.

Senator Bryan was not involved in the actual writing or introduction of this measure (Senate Bill 478), but in interviews he stated he supported the proposed original legislation as it would open the program to needed transparency that would limit unfair competition complained of by workers and businesses in Nevada.  The Senator has not spoken publicly since the legislation was amended and passed, so it is unknown if he continues to fully support the amended language of SB 478.

Danny Thompson

AFLCIO Exec. Sec. Treasurer, Danny Thompson

sb 478 hearing conway

Ironworkers Local 433 Bus. Agent, Robbie Conway

Support also came from the AFLCIO, the local Ironworkers union and several law enforcement unions.  The AFLCIO’s Executive Secretary Treasurer, Danny Thompson and Ironworkers Local 433 Business Agent, Robbie Conway were the most vocal and outspoken union representatives on the prison industry issue.  Both made appearances before the Board of Prison Commissioners, the Nevada Senate and Assembly at hearings and meetings to object to the use of inmate labor to openly compete for the jobs of unemployed Nevada workers.

While both Thompson and Conway objected to prisoners being used by private companies to compete against other private businesses and workers, they were very concerned about the safety of Nevadans from projects built using prisoners in a “training program”.  One such project was the bridge over Interstate 15 in North Las Vegas.  Another is the Wet ‘N Wild water park project being built in Summerlin.  A third is the SkyVue Wheel on the Las Vegas strip.

wet n wild

SkyVue pic

All of these projects were scheduled to be built with structural steel components manufactured by prisoners working in a prison industry training program located at High Desert State Prison.  That was the intent until the public became informed about the use of prisoners manufacturing key structural components for such projects and in response the Governor ordered the closure of the prison industry where the steel was made.

This state action in Nevada follows similar legislative amending in Texas in 2009-2010 after businesses complained of unfair competition from prison industry operations there.  The Texas circumstances are nearly identical with a situation that consequently evolved in Nevada just three years later.

Lufkin Industry’s trailer division was shut down due to an undisclosed operation by a prison company making the same products and selling them competitively in Lufkin’s market.  Following this discovery, the Texas legislature enacted laws to protect workers and competitors from prison operated industries using inmate labor.

This legislative session, Nevada was forced to take similar steps to protect workers and business owners from suffering the same fate as workers in Texas.

Silver State Industries (SSI), operated by the Nevada Department of Corrections (NDOC) enters into contracts with private companies to allow the use of inmates as a labor force for manufacturing goods.  Previously these partnerships were developed quietly with a total lack of transparency or notice to competing companies regarding any possible impact upon private business or Nevada’s unemployed workers competing for business or jobs.

Cox-listens-to-testimony-cropDirector Cox of the Nevada Department of Corrections candidly admitted earlier this year that he and his department had not been following requirements and protocols called for by state law and department regulations.  Besides the undisclosed competition using inmate labor, there is an issue of lost money from possible mismanagement of the NDOC.

One of more of these “industry” operations using prisoners as a labor force for select private companies resulted in substantial dollars lost to the state due to non-payment of leases, wages, utility costs and other expenses advanced to companies in an effort of keeping them operating and prisoners employed.  SSI’s current account receivables are in excess of $600,000 and previously in 2010 $800,000 was sent to collectors to try and recover.

As a result of poor business practices, SSI has lost hundreds of thousands of dollars and nearly exhausted a $1.5 million dollar contingency fund.  The industry closed by order of the Governor was a metal/steel fabrication plant at the High Desert State Prison.  This single operation is at the center of the controversy surrounding prison labor and unfair competition that formed the basis for the new legislation.

Silver State Industries had a long standing contract with Alpine Steel, LLC that allowed inmates to manufacture structural steel used in public and private projects secured through standard industry bid procedures.  Alpine used the cheap labor they paid to inmate workers as a means to secure numerous competitive contracts utilizing low labor projections/costs.  Other companies protested they were losing work and thus unable to hire more unemployed steel workers due to unfair competition from Alpine using state prisoners as the company’s “private workforce”.

When it was discovered Alpine was not paying the lower wages owed to the inmate workers or salaries of NDOC supervisory staffers, the story elicited strong reactions from taxpayers and lawmakers alike.  In addition to these payroll defaults, Alpine was behind on agreed lease and utility payments and had failed to reimburse the state for worker comp premiums on the inmate workers – for a period of approximately four years.  The state paid the wages of staffers, the work comp premiums and utility costs which mean the “taxpayers” were subsidizing a substantial amount of Alpine’s operation.

Under media and public pressure, the Governor became involved in December of last year.  Almost immediatelyAlpine’s prison industry operation was ordered closed.  Following the closure Alpine and the NDOC negotiated a repayment agreement with the Attorney General’s office that was very favorable to Alpine’s owner.  The agreement allows Randy Bulloch to make monthly payments to the state over a period of another four years until the debt is paid.  Surprisingly, this agreement does not provide for any interest, fine or penalty for the huge debt from the default(s).  Ultimately the state wound up on the hook for $438,000+ owed by Bulloch.

DD Connett

NDOC Deputy Director, Brian Connett

These default(s) were known to NDOC Director Cox and Deputy Director Brian Connett (Deputy Director of the Prison Industry) but neither took any positive steps to recover the money owed and bring Alpine current.

As originally proposed, SB 478, subsection 7 required notices and an opportunity to be consulted about proposed new prison industry projects be provided to private companies and labor organizations.  It further required the NDOC Director and Deputy Director of Prison Industries to provide the Senate Interim Finance Committee (IFC) on Industrial Programs with information on possible impacts upon labor or sales from proposed new prison industries.

Instead of requiring the NDOC to consult directly with businesses that may be affected by new or proposed industries, the amended legislation (subsections #7 in the amended text) calls for other state agencies or departments to conduct studies and submit reports of possible conflicts involving labor or market sales.

Though the legislation as passed does not contain all the provisions hoped for by supporters, necessary key provisions calls for more transparency and oversight over prison industries – and their competition against private companies having to compete against low prison wages.

Two key provisions of SB 478 are the provision that the NDOC must provide documentation to the IFC for approval of new programs and then if approved there, any proposed program must be considered by the Board of Prison Commissioners (composed of the Governor, AG and Secretary of State) for final approval.  Though this provision was already in place, these were circumvented previously.  The second change is the addition of a second union representative added to the IFC Industrial Program Committee.  This will help ensure Nevada workers are protected from unfair prison labor displacing them or taking jobs from a constantly dwindling job market.

Provisions that the NDOC seek approval for new industry projects from the Bureau of Prison Commissioners, provide notice to the private sector, consultation with businesses and labor on proposed new industries and that any industry have an “insignificant” impact upon displacement of workers; were requirements that were not followed.  These actions – or lack of action – were behind the need for this new legislation in the first place.  Ironically this failure to inform or consult directly with competing companies and unions necessitated SB 478…yet as passed, that critical component has been removed from the final language of the bill.

Cox originally took the position of “neutral” on the proposed legislation…then changed that to “opposed” to the bill.  Finally after negotiating out the requirement to provide direct notice to labor or competing companies, Cox and the NDOC came out in “support” of the measure.  This manipulation gives the appearance that the NDOC wants to avoid any direct notice or contact with the very businesses the prison industry program will be competing against.

The default by one company resulted in complaints against the NDOC for using inmate labor to compete unfairly against private companies.  Everyone involved realized the potential for lost jobs in the private sector along with lost sales to competing companies and led to hearings and meetings before the Board of Prison Commissioners and several Senate and Assembly Committee meetings in 2012 and early this year.

Ultimately information that came out in those hearings and through the media revealed that the NDOC’s prison industry program was “off the chain” (to use the vernacular) and being operated without any true oversight – by the NDOC or other government authorities.  In the end Alpine Steel did Nevadans a favor by their defaulting across the board.  The action of this one company is what angered the public and led to a quick response from lawmakers and the Executive branch.

Unexpectedly, the NDOC continued to use Randy Bulloch as a spokesman for continuing prison industry operations as they were.  Bulloch appeared at nearly every Committee hearing; before the Interim Finance Committee on Industrial Programs, the Board of Prison Commissioners, the Senate Judiciary Committee and before the General Assembly – side by side with SSI Deputy Director, Connett – speaking in support of continuing the prisoner “training program” and arguing that using such labor was really not unfair competition.  At one point he argued if he and other companies using inmate labor had to pay prisoners fair or comparable wages, it would result in closing prison industries altogether.  In advancing that argument he failed to realize that while the low wages and cheap lease of state owned industry facilities to his company provided increased profits, such came at the expense of workers displaced by the prisoners and businesses that lost contracts to Alpine due to the use of prison labor.

This was the “unfair competition” businesses, the public and organized labor protested against and the legislature agreed with them on.  That’s why it was unexpected to see Bulloch, Cox and Connett continue to confer and present arguments against reform of the prison industry in the face of widespread calls demanding reform by everyone else.

SB 478 surprised everyone – lawmakers and public alike – by how quickly it advanced through the Senate and then Assembly once introduced.  Historically proposed legislation takes a substantial amount of time being discussed, amended and again discussed before ever getting to the point of a vote.  This bill introduced on March 25th passed in just over 60 days and will become law approximately 90 days after submission.

The NDOC and the department’s head of SSI will remain in charge of the state’s prison industry program.  Even after demonstrating the agency and top administrators violated the state laws and administrative regulations, the NDOC has been able to successfully maintain overall control.

I weighed in on this issue in Nevada as soon as the issue became public.  As the Executive Director of the Voters Legislative Transparency Project (VLTP), I provided research, a “white paper” report with documentation to Governor Sandoval, AG Cortez-Masto, Secretary of State Miller, members of the state Assembly, the IFC on Industrial Programs, the Senate and personally to Director Cox.

VLTP Directors and staff traveled to Nevada to be in attendance at some of those meetings and spoke directly with Mr. Bulloch and others on the issues.  Many of the tough questions posed to Cox and Bulloch in subsequent hearings or meetings originated from the VLTP analysis and report.

VLTP has publicly supported the legislative efforts to bring the prison industry program in Nevada under control and force it to operate in a transparent manner.  I’m gladdened that all the effort put into solving this issue has been successful and will benefit workers and businesses moving forward.

The final version of SB 478 came as a result of compromise between lawmakers, businesses, union leaders, workers and the NDOC.  None of those involved got everything they wanted but that’s how “compromise” works.  It’s a needed step in the right direction and now new SSI industry programs or projects will come under intense scrutiny and vetting prior to implementation.  Such scrutiny was absent previously.

Expecting the same government bodies; the Legislature’s IFC and the Board of Examiners to protect the interests of workers and competing business owners is difficult.  Oversight and transparency will be the key ingredients to keeping the prison industry program from once again getting out of control.  This new legislation appears to provide both.

Question from the UK: Why is the American right closing prisons?

Question from the UK: Why is the American right closing prisons?

In response to an article by RICK MUIR PUBLISHED 18 APRIL 2013 11:58 in the “New Statesman”

As conservative parties in nations across the pond attempt to emulate America’s Right Wing policies and initiatives, Rick Muir questions if replicating the “NEW” U.S. stance on imprisonment and criminal justice is warranted.

Mr. Muir accurately depicts many of the changes U.S. states are making to reduce the number of Americans imprisoned.  He reports on efforts of diverting drug offenders from prison through community rehab and court programs, stopping new construction of prisons and understanding that locking up non-violent offenders is costly and does nothing more than create a revolving door for first offenders to return time and again throughout their lives.

However in reporting that it is the GOP or Right Wing pursuing proposals that have long been advocated by liberals and progressives, he failed to fully connect the dots on where and how this mass incarceration began – and who stands to profit from these proposed changes to America’s criminal justice system.

It began with the ultra right think tank, American Legislative Exchange Council (ALEC) in the late 1970’s. They got together with corporate interests and wrote legislation that began a trend that turned 1970’s 338,000 incarcerated into today’s 2.3 million. They crafted minimum mandatory sentencing laws, truth in sentencing, three strike and habitual offender laws.  They helped abolish parole and wrote more legislation to require convicted offenders serve 85% of imposed sentences.

Once the laws were written by ALEC and wholeheartedly backed by President Reagan in pursuing his “war on drugs”, ALEC wrote more legislation to allow private companies to begin to profit off imprisonment.  They wrote the Private Correctional Facilities ActPrison Industries Act and the Uniform Bail Act.  

The first was to authorize states to allow ALEC’s corporate members, Corrections Corporation of America, and Wackenhut (now Geo Group) to begin operating private prisons to house the huge numbers of new prisoners that arose due to the harsh laws written to imprison.  

The second written to create a low wage workforce accessible by private companies for manufacturing – and to allow these companies to lease publicly owned prison industrial facilities for as little as a dollar a year.

The third was written to require all bonding of those charged with criminal acts to be accomplished by commercial bonding companies at substantial fees.  This was to enrich ALEC’s long time member, the American Bail Coalition.

What all this did was to industrialize imprisonment and create a large conglomerate of companies realizing huge profits off imprisoning, working, feeding, providing healthcare, canteens and phone services to America’s incarcerated.  This defines and represents ALEC’s form of “Free-market”, “federalism” and “limited government” principles.  By turning humans into commodities with pre-determined shelf lives, ALEC was able to create a criminal justice industrial complex where private companies could capitalize and reap billions in profits off incarcerating the most individuals possible.

This new prison industrial revolution begun by ALEC and the ultra right drove up the costs of criminal justice from mere millions in 1970 to nearly $75 billion in 2011 (Geo and CCA raked in $2.9 billion of this in corporate income).  These billions in dollars are taken directly out of taxes paid by Americans.  Over the years state by state had to begin cutting education, healthcare programs, social welfare and similar programs to continue to increase spending on imprisonment.  In 2000 many states finding nothing left to cut to continue paying for housing and caring for more and more prisoners, began to look for ways to reduce the costs of incarceration itself.  They turned away from rehabilitation and began cutting education programs for prisoners.  Then vocational training went, then counseling and drug and alcohol programs and finally, recreation.  None of these reductions sufficed, prison continued to overflow and for every dollar saved through cutting important programs, that dollar and one more were needed to pay for more privatization.

Finally in 2010 many state authorities – even those considered solidly and forever conservative Republican – realized changes in criminal justice systems had to be made.  States verged on bankruptcy due to the continued increase in prison population and the costs associated with imprisonment.  Only then did the Right Wing fully understand that their “tough on crime” agenda advanced over the past 30 years was responsible for the dire financial position of state governments.  ALEC members and alumni such as Newt Gingrich formed a new “Right On Crime” organization (a joint project with the Texas Public Policy Foundation and prison fellowship). now stating that they had been wrong for years and that it is time to “right the ship” and begin thinking smart about crime.  Of course the Texas Public Policy Foundation and Prison Fellowship are ALEC members or supporters.

The first thought went to creating a new “product line.”  They turned to immigrants as a means of continuing to capitalize off prison beds that were beginning to sit vacant.  Americans out – “illegal immigrants” in…and at a higher per diem cost per inmate.  Because the federal government paid higher daily per diems for holding immigrants than paid for incarcerating prisoners the profits would increase.  So ALEC with the help of CCA crafted SB 1070 and introduced it in Arizona.  Once it became law, it has been redirected to dozens of other U.S. states and CCA and Geo Group (though no longer members of ALEC) secured more and more contracts to house immigrants and increase their profits exponentially.

In essence those who created mass imprisonment to enrich investors and company owners through corporatism were now going to step forward and provide a “solution” to the problems they created.  This has always been the ALEC and ultra-right meme; create a faux problem and then provide the perfect solution.  Once again ALEC member companies would profit off the new “Right on Crime” initiative…ALEC member, Prison Fellowship Ministry would reap huge grants and donations to offer reentry programs for offenders released from prison…the American Bail Coalition who had profited for years off bonding of criminals would also begin to see increased profits through a new ALEC initiative: the Conditional Early Release Bond   This legislation would allow prisoners to seek parole through posting a bond to the state to ensure they would not reoffend.  Of course this bond is provided to the state by a surety company represented by the ABC and for a commercial fee.

So in essence the new “Right on Crime” project represents another ALEC initiative. Being right on crime does not mean being “Smart on Crime.”  We need to get ALEC and their members completely out of our criminal justice system.  They have incarcerated enough and profited way too much off incarceration.  Today the UK is where America was in the 1990’s, pushing for longer sentences, more incarceration and to use inmate labor for manufacturing and labor for private companies.  America has already begun to realize those concepts are taking American worker’s jobs and the cost of incarcerating someone for 5 years for possessing a joint of marijuana is completely insane and too costly.

Hopefully those non-conservatives in the UK can convince politicians over there that following in America’s path is not always the best course to chart.

Read Rick Muir’s article <- HERE ->

Prison Industry Bill Clears Nevada’s Senate Judiciary Committee

Prison Industry Bill Clears Nevada’s Senate Judiciary Committee

Senators move quickly to rein in runaway prison program

By Bob Sloan

On Wednesday a proposed bill amending Nevada’s Prison Industries was debated before the state Senate Judiciary Committee.  The bill, SB 478 was sponsored by the Senate Finance Committee, which is chaired by former Assemblywoman and now Senator Debbie Smith (D-13).  Senator Smith explained the bill to the Committee and why a revision to NRS 209.461 is needed to protect workers, private businesses and taxpayers from being unfairly compromised by prison industry operations.

Attending the hearing in support of the legislation, former U.S. Senator (and Nevada Governor) Richard Bryan outlined a proposal he’d submitted to the Board of Prison Commissioners last month that would help protect Nevada’s businesses and workers.  Proposed revisions to NRS 209 within SB 478 language would serve that purpose.

Sen BryanSuggested language includes requirements that the NDOC provide adequate notice and consult with private businesses and unions prior to entering into new contracts or developing new prison industries.  This would help protect Nevada’s workers from displacement and private businesses from unfair competition arising from the use of prison labor by private companies or state sponsored industry programs.

These requirements are already mandatory and annunciated under federal guidelines controlling prison-made products introduced into interstate commerce.  This is to protect workers and businesses in states receiving such goods.

Senator Bryan explained the reason such policy changes were necessary to first protect Nevada’s business and workers.  He stated that these protections were at the core of the proposal made to the BPC in March.

SB 478 includes a requirement that any private company applying to participate in prison industrial programs be required to provide a guarantee that operational expenses will be paid to the NDOC.  This provision requires the posting of a surety bond or personal guarantee:

“7. Before entering into any contract with a private employer for the employment of offenders pursuant to subsection
1, the Director shall obtain from the private employer:
   (a) A personal guarantee, surety bond in the sum of $1,000,000 made payable to the State of Nevada or security
agreement to secure any debt, obligation or other liability of the private employer under the contract including, without limitation, lease payments, wages earned by offenders and compensation earned by personnel of the Department.”

This clause seemed to draw the most concern and discussion from the Committee as they attempted to ascertain whether such a high bond was necessary.

Danny Thompsonsb 478 hearing conway

Other revisions require the NDOC Director to secure documentation pertaining to the impact upon private industry and labor in Nevada.  Before submitting such projects or new industries to the Interim Finance Committee’s Committee on Industrial Programs for recommendations or Board of Prison Commissioners for approval, these studies must be completed.

Also speaking in support of SB 478’s changes to policy requiring notice and consultation with labor, was Nevada’s AFLCIO Executive Secretary Treasurer, Danny Thompson and Robbie Conway of Ironworkers Local 433.

The Union Representatives spoke on behalf of unemployed union workers being displaced or unable to find employment because of prisoners used by Alpine Steel, LLC.  Alpine has been accused of using cheap prison labor to reduce labor costs and secure bids on projects, reducing the ability of other companies to compete fairly for the same jobs. One of those projects is the high profile construction of the Sky Vue Ferris Wheel on the Las Vegas strip.

SkyVue pic

Thompson raised issues of public safety due to using inmate labor to fabricate steel components used in building a public bridge over I-15 and the Wet ‘N’ Wild theme park in Summerlin. Thompson mentioned he’d made repeated requests for proof of required certification of the prison shop and inmate welders but Alpine and NDOC continues to withhold those documents.

Time for discussion opposing SB 478 was consumed by Alpine Steel owner, Randy Bulloch.  He vehemently opposed any requirement of posting a surety bond or consulting with unions, labor or competing businesses before starting up new prison industries.  He advised his company had been using inmates as a workforce for seven years before the operation was stopped early this year.

His argument was that requiring a bond would be cost prohibitive and “catastrophic” to prison industry operations.  Bulloch also claimed that noticing and consulting with unions and competing businesses and requiring approval of both would be impossible, “they’ll never agree to such projects.”  Presumably Bulloch’s persistent advocacy on behalf of prison industries demonstrates a desire to reopen the prison industry’s metal shop to Alpine Steel and regain access to that less costly workforce.

The proposed revisions do not include a requirement of “approval” by unions or competing businesses.  It only requires notice and an opportunity to participate in any discussion prior to submission of proposed new industries for approval. In addition until Bulloch repays nearly half a million dollars owed to the state it is unlikely authorities will consider allowing his company back onto prison property.

It’s interesting that Mr. Bulloch’s company was at the root of a controversy that ultimately resulted in the necessity of this legislative review of prison industries.  Actions of Bulloch and Alpine Steel placed the entire program in jeopardy by his refusing to pay incurred operational expenses owed to the NDOC.

Rather than open discussions of new industry operations to transparency, Bulloch seems intent upon keeping any new or proposed contracts shrouded in secrecy, and decisions regarding use of inmate labor made outside the view of obviously interested parties.

Alpine ran up a huge bill with the prison industries by failing to pay inmate and NDOC staff wages, utility costs, workers compensation or lease payments for nearly four years, accumulating a debt of $438,000 to the state.  After the story broke in the media is when officials closed Alpine’s operation at High Desert State Prison and forced Bulloch to agree to repay the state over the next four years.  Though Bulloch no longer has any inmates working for him in the prison shop and the facilities are closed to him, he continues to be the lone voice advocating for operating Nevada’s prison industries without any policy changes to ensure other companies are not able to operate with taxpayers footing the bill.

Competing steel companies protested lost business through unfair practices exercised by Alpine to secure contracts due to low-paid prison wages.  They also voiced concern that the state was unfairly subsidizing Alpine’s operations through a sweetheart lease agreement for prison facilities and a failure to collect the debts owed.  Both gave Alpine Steel a substantial advantage over all competitors in the steel industry there in Nevada.

NDOC Director Cox and Deputy Director Connett were present and stated they and the department was “neutral” on the legislation and will be submitting written statements to that effect.  Several former inmates attempted to speak in opposition, but time was short due to Bulloch’s lengthy statements in opposition and their discussion limited.

The following day, the Judiciary Committee voted unanimously to move the bill to the full Senate for discussion and vote.  It is unknown at this time how much support this legislation will get from the Nevada Assembly and full Senate.