Jobs Bill Stalls – Legislation Allowing More Corporate Access To Prison Labor Passed

A VLTP Special Report by Bob Sloan, Executive Director


Over the past two weeks VLTP published the first, second and final segments of an expose reporting on the use of prison labor in Nevada to deny jobs to local unemployed workers in Las Vegas. In researching for these articles, a very disturbing development came to light involving a lack of transparency concerning legislative action(s) taken that impact upon America’s workers – employed and unemployed alike – that must be widely reported.

VLTP would encourage readers to take a few minutes and read the full expose that links ALEC and prison industry advocates together in advancing legislation to expand prison industries nationwide.  It is filled with the legislation, individual names, corporations and links to videos of meetings where this expansion began and how Nevada is simply the latest example of sending American jobs to prison.

That being said, I am very disturbed and need to get breaking news out to DK readers about a development that will impact ALL labor in the U.S. – and in the worst way possible.  Congress has loudly argued over President Obama’s “Jobs Bill” for a couple of years now, stalling any discussion of it in the House.  At the same time Congress very, very quietly passed legislation giving Federal Prison Industries authorities the go ahead to expand their operations with two critical measures.  This was done under the Consolidated and Further Continuing Appropriations Act, 2012.


In the April 2012 NCIA Board meeting minutes, I found this hidden away near the end of the document:

PIE Authority Approved for Federal Prison IndustriesMr. Grieser opened his report by stating that Congress granted FPI two new authorities in December of 2011. The first was PIE authority for FPI, which was accomplished by modifying the statute to allow FPI to participate in PIE. The second was a repatriation authority.

On the subject of the PIECP authority, Mr. Grieser explained that FPI (UNICOR) had an initial meeting with BJA to discuss their plans and from there, they established work group to begin preparing the application. Mr. Grieser detailed that FPI had a technical support meeting with Ms. Honeycutt and Mr. Heslop from NCIA as well as Ms. Auerbach as NCIA’s PIE Technical Coordinator to brief FPI on the application process. Mr. Grieser explained to the Board that FPI does not expect to have the application completed overnight and he stressed that FPI will not compete with states with the PIECP program. FPI will first contact the state CI Director before doing any work that may compete with that state.

In the “FEDERAL PRISON INDUSTRIES, INC. ANNUAL FINANCIAL STATEMENTS FISCAL YEAR 2012” audit presented by the office of the U.S. Department of Justice’s Inspector General I confirmed this was in fact true:

“During fiscal year 2012, FPI received legislative authority to participate in the Prison Industries Enhancement Certification Program (PIECP) and to manufacture products…”The realignment resulted in the reduction of six business segments to five while creating a new group whose primary purpose is to pursue new business opportunities in all product and service areas including repatriation and PIECP.”

The FPI already has “mandatory sourcing” requirements that all government agencies purchase products from UNICOR if of comparable in cost and quality.  With the entrance of UNICOR into PIECP, they now have the authority to partner with private companies to use federal prisoners as a labor force to manufacture products or deliver services to/for these corporations or companies.  Take a quick look at their products offered:

These partnerships at the state level have been used to displace tens of thousands of American workers.  With the program now being made available to UNICOR, the number of U.S. jobs still available to private sector labor, will dwindle.  This is what has happened over the past two decades with the PIECP (Prison Industries Enhancement Certification Program) draining jobs from our communities.

The second piece of legislation accompanying authority to participate in PIECP, is even worse and shows precisely how politicians are working with CEOs and company owners to “launder” American jobs already lost to offshoring,  Congress passed legislation enabling a “Repatriation” program to allow companies to return those jobs and skills to the U.S.  Instead of bringing them back to America’s unemployed, this new regulation allows the corporations to return the jobs and put them all in the hands of UNICOR’s inmate work force – earning a maximum of $1.15 per hour.  Repatriation would allow prisoners:

to manufacture products that would otherwise be produced outside of the United States, as approved by FPI’s Board of Directors. with the passage of these authorities, FPI’s Board has approved 14 pilot programs for repatriated products. FPI anticipates these pilot projects will assist in further reducing its losses.

The discussion by the NCIA board reveals that these “pilot projects” involve products manufactured in the garment and electronic’s industries:

“He (Mr. Grieser) then explained the repatriation authority that FPI also received through Congress. Discussion ensued with concerns relative to how FPI determines a repatriation job vs. a PIE job. Mr. Grieser explained that the repatriation allows FPI to perform work under a pilot program approved by FPI’s Board. He added that FPI has already moved forward on four pilot repatriation programs, electronics and garments, and that wages would be traditional (meaning non-PIECP) wages.

To show the greed of the NCIA, here is a discussion about UNICOR being able to pay inmates non-PIE wages where the state prison industries had to pay PIE wages:

“A Board member asked if a state CI can perform repatriation work via traditional wages and stated that it wasn’t fair that FPI could not do so in their states. Mr. Grieser responded that this authority was given to them by Congress and, at this time as far as he knew, there was no exemption for states to perform this type of repatriation work. Another Board member asked Mr. Grieser to clarify if this was non-Federal government customers. Mr. Grieser confirmedThe Board member then confirmed then that states have to pay prevailing wages for the same work that FPI will be paying traditional wages on. Mr. Grieser confirmed that was the case; he stated that the legislation was limited to FPI and FPI is taking advantage of this authority. Another Board member asked if forty percent of a product is made overseas, can FPI get involved in that forty percent via this repatriation authority. Mr. Grieser responded that FPI will not pursue that. Another Board member asked if FPI will discuss with states any repatriation work that will be occurring in their state, just as Mr. Grieser indicated that FPI would do for PIE work coming into the states. Mr. Grieser responded that FPI management hadn’t discussed that but reminded the Board member that the work that is being repatriated would not be currently performed in the US. Another Board member asked if there was a limit to the number of years FPI can repatriate and Mr. Grieser indicated there was not. Another Board member asked if FPI can partner with states on repatriation and Mr. Grieser indicated probably not on repatriation but confirmed that it could on PIECP work.”

“Non-PIE wages” means UNICOR will use the standard wage scale currently paid to federal prisoners of between $.23 and $1.15 per hour, per inmate.  I would remind readers that currently many of Apple’s electronic products are no longer made in the US, so these products would qualify for repatriation under the description given by Mr. Grieser of the FPI.

From the 1980’s through today, corporations have gotten tax breaks and allowable credits for moving jobs offshore, by allowing IRS deductions for offshore operations.  Now those overseas jobs are costing them more due to awakening labor with increased wages in foreign countries, increases in shipping costs due to increases in fuel, oil and increased utility costs.  These tax benefits came about through Congressional action and were in response to lobbying for those benefits.

Now faced with rising costs overseas and facing the prospect of having to pay American workers a fair wage if they bring manufacturing jobs back to the U.S., these corporate raiders have sought a means to return the jobs and avoid the requirement to pay workers appropriately.

They have been busy lobbying for legislation to ban collective bargaining and to reduce the voice and influences of unionized representation of workers in both the public and private sectors.  Through legislation written by them and disseminated by ALEC and other conservative think tanks and groups, they have brought labor to its knees over the past several years.  Now, a huge and cheap labor force – with no voice, representation or civil rights – has been identified: federal prisoners.  They have again lobbied Congressional members for access to this cheap workforce, promising to bring jobs back to “American workers”  as long as those workers are prisoners.

Recently there was an announcement by Apple that they were bringing jobs back to America.  In this article other electronic manufacturers were identified as bringing jobs back to America…and with UNICOR announcing they have already initiated 14 pilot “repatriation” projects involving the manufacture of electronics and apparel or “garments”, chances are some of these jobs will go to prisoners. Apple is getting kudos for bringing home jobs – but has not specifically identified either the jobs or where the production facilities will be located.

Perhaps this memo sent out by Attorney General Holder in October 2010 gives us some valuable insight about where these jobs will be going…

And it isn’t just our current AG who is pushing and supporting the expansion of prison industries.  Former AG, Janet Reno took part in advancing this agenda way back in 1999 when these prison programs were first made available to corporations.

The determination of who will have access to UNICOR’s prison workforce and factory facilities, products made and what “repatriated” pilot projects will be chosen falls under authorityof the Federal Prison Industries Board of Directors:

“A board of six Directors, appointed by the President, reviews and approves the policies of the Corporation, long-range Corporate plans, establishment of new industries, and bylaws and capital investments in excess of $500,000. The Board also makes annual reports to Congress on the conduct of the business of the Corporation and the condition of its funds. General management of the Corporation is vested in an Assistant Director of the FPS, who serves as Chief Operating Officer, and is carried out by a staff of 11 Corporate Management employees located in Washington, DC. Expenses for this administrative function are subject to congressional limitation.”The following chart shown below illustrates FPI’s Sales, Earnings, and Net Income for the period of FY 2007 through FY 2010:

The description of the FPI Board is best described as:

FPI is “administered by a board of directors, appointed by the President to serve at the will of the President without compensation.” 18 U.S.C. § 4121. The statute creating the board states that the directors “shall be representatives of (1) industry, (2) labor, (3) agriculture, (4) retailers and consumers, (5) the Secretary of Defense, and (6) the Attorney General, respectively.” Id.

As this reveals, the DOJ and DOD are directly represented upon this controlling board – and again, serve at the pleasure of the President.

These actions taken to expand FPI’s ability to partner with private companies to provide labor in manufacturing or services, combined with the “repatriation” of our lost jobs to those same inmates, seriously conflicts with the stated goals of President Obama and his proposed Jobs Act to create jobs for “American workers.”  Unbelievably – or perhaps not so unbelievable, given the behavior of Congress since 2010 – is the fact that when this was presented to the Congress in September 2011, Congress stalled it while passing the CONSOLIDATED AND FURTHER CONTINUING APPROPRIATIONS ACT, of 2012 putting more American jobs within reach of prison industries and prisoners.

These Congressional actions bring the outsourcing of our jobs overseas full circle…take our jobs overseas, reducing our workforce by huge numbers, then repatriate them and bring them back to a labor force that is just as “foreign” and detrimental to U.S. workers as those now used in China or Taiwan.  The effect is the same: corporations continue to be provided a cheap labor force by Congressional acts; continue to profit through deductions of their foreign operations and; at the expense of American taxpayers and workers.

I have documented my research and written about this for several years now, and can’t seem to attract the attention of labor leaders or activists.  With the national rate of union workers now hovering at just above 11%, (down by .5% from 2011) one would think the AFLCIO, SEIU, Teamsters, UAW, EWU and dozens of other organized labor unions and groups would already have an active voice in opposition to prison industries and labor – but they do not.  The information is available, the statistics and numbers available to them, yet they remain non-committal on this topic, even as labor memberships dwindle and ALEC’s repressive anti-union, anti-labor legislation becomes law state by state.

My opinion is that these new initiatives approved by Congress is the next-to-last-nail in the coffin of organized labor in America.  The final nail will be state or federal Constitutional Amendments abolishing and/or making organized labor forbidden.

Union leaders, you can stand by idly, wringing your hands and let this happen – or you can wake the hell up and join those of us out here fighting your battles in this labor war.  We need help organizing, funding and boots on the ground to resist the new and existing pursuits of taking our jobs from us and putting them in prison.  Corporate interests are outspending you and our grassroots activist groups…while funding all opposition to publicizing these labor practices.

Regardless of whether you are a union or non-union worker, this affects you – personally.  Available jobs for those without one, are disappearing by the day.  Those with jobs are seeing more and more of their co-workers disappearing as well, as employers say they are “downsizing” – when what they really mean is they’re moving operations to prison industries.  Corporate employers have discovered there is no need to hire private sector workers and pay them prevailing wages, benefits, unemployment insurance, worker’s compensation, paid vacations or paid leaves…when they can employ prisoners for pennies on the dollar, who have no voice, representation and are forbidden by law from organizing or striking.

Look forward, and it’s just possible that in the future decades the unemployed will have to be sent to prison to find employment as that is where our American jobs will be, with positions available to attach “Made In The U.S.A.” labels to millions of prison made products.