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.