PIECP

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.

Cox-listens-to-testimony-crop

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.


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.

Las Vegas: Prison Labor Used to Beat the Odds

Part one of a three part Expose on Prison Labor in Nevada and Beyond

(Reposted from January 11th)

By Bob Sloan – Prison Industry Consultant

lv strip 2Thousands of tourists, businessmen, CEO’s and executives from all over the world mix with citizens of Nevada in the luxury and splendor of Las Vegas’ many hotels and casinos.  Most come to this beautiful city for the gambling and incredible shows found everywhere one turns.  Inside the cool confines of casinos visitors can trust that every slot machine, roulette table and blackjack shoe is checked and monitored to guarantee fair play – no magnets under the roulette table, no dealer manipulating the cards or slots rigged to never pay out. Those trying to shave the odds are not welcome and at the first hint of cheating, find themselves on the sidewalk, banned or worse.

Each casino has a multitude of surveillance cameras to guarantee play is fair and the odds are understood by all who play the quarter slots or sit down at the high roller poker table.  To ensure such fairness, the Nevada Gaming Commission regulates every aspect of gambling in the entire state.  Strict penalties for violation of gaming regulations by casino operators keep each in line and playing by the rules.

Outside the casinos, locals find the guarantees of fair play and manipulation of odds are not so well regulated. State agencies responsible for overseeing and enforcing specific state laws and regulations have lost their vigilance.  In at least one case a state regulation involving the Nevada Department of Corrections is providing one company an unfair advantage over competitors. The prize sought isn’t a hundred dollar hit on quarter slots, its millions in profits. This is will be a big success with the prison labour as now playing poker online is legalised in NJ, New Jersey as stated in this NJ poker sites. An important aspect of this advantage provided to a single company, is an increase in Nevada’s already high 10.8% unemployment rate.

Pl Mazda insert 1The issue is an ongoing battle being waged over the use of inmate labor by a private company, Alpine Steel operating out of Las Vegas, NV.  Alpine is competing directly against other Nevada companies in the field of structural steel fabrication.  Alpine’s competitors pay fair wages, benefits, provide unemployment insurance and vacation pay, while Alpine avoids all those costs.

It is not illegal for companies to be allowed to use prison labor under current laws but there are strict state and federal regulations involved that must be met before allowing direct competition with prison made products:

Mandatory Criteria for Program Participation

Corrections departments that apply to participate in PIECP must meet all nine of the following criteria:

1. Eligibility. Authority to involve the private sector in the production and sale of inmate-made goods on the open market.

2. Wages. Authority to pay wages at a rate not less than that paid for work of a similar nature in the locality in which the work is performed.

3. Non-inmate worker displacementWritten assurances that PIECP will not result in the displacement of employed workers; be applied in skills, crafts, or trades in which there is a surplus of available gainful labor in the locality; or significantly impair existing contracts.

4. Benefits. Authority to provide inmate workers with benefits comparable to those made available by the federal or state government to similarly situated private-sector employees, including workers’ compensation and, in some circumstances, Social Security.

5. Deductions. Corrections departments may opt to take deductions from inmate worker wages. Permissible deductions are limited to taxes, room and board, family support, and victims’ compensation. If victims’ compensation deductions are taken, written assurances that the deductions will be not less than 5 percent and not more than 20 percent of gross wages and that all deductions will not total more than 80 percent of gross wages.

6. Voluntary participation. Written assurances that inmate participation is voluntary.

7. Consultation with organized labor. Written proof of consultation with organized labor prior to program startup. 8. Consultation with local private industry. Written proof of consultation with local private industry prior to program startup. 9. National Environmental Policy Act (NEPA). Written proof of compliance with NEPA requirements prior to program startup. (emphasis mine, source BJA PIECP program overview).

In the instant case, most of the above mandatory regulations are being ignored – entirely. Prevailing wages paid by most in the steel fabrication industry in Las Vegas are in excess of $17.00 per hour.  The inmates manufacturing components for Alpine are paid less than half that scale at minimum wage or less. By having access to and using inmate labor provided by Nevada’s Silver State Industries (SSI), Alpine Steel, is able to underbid competitors for structural steel construction projects.  This company is just one of several businesses in Nevada (and 150 others nationwide) enjoying increased benefits and profits derived from inmate labor.  Other Nevada companies enjoying similar access to inmate labor include; Vinyl Products, Inc., (vinyl waterbeds), Thomson Equipment Company (Silver Line Industries trailer manufacture and remanufacturing) and Jacobs Trading Company (repackaging). Alpine Steel is currently manufacturing and installing prison made structural steel components at three locations in Las Vegas; the SkyVue (Ferris Wheel developed by Howard Bulloch), Staluppi Automotive Group’s Planet Mazda and Wet ‘n’ Wild Las Vegas (financed by Andre Agassi; his wife, Steffi Graf; Dr. Steven and Karen Thomas, members of the Thomas family of Thomas & Mack Center fame; and Roger and Scott Bulloch, of SPB Capital Partners).  Companies competing with Alpine Steel for these contracts, were totally unaware they were competing against a company with such a distinct and hidden advantage. While the Staluppi and water park projects are actively being constructed, the Sky Vue job appears to be abandoned, though developer Howard Bulloch assures the absence of activity is due to plan revisions – and not a lack of funding.

 SkyVue pic   wet n wild   Planet Mazda pic

Typically owners, investors and general contractors of projects such as the Mazda dealership and Wet ‘n’ Wild are not informed of manufacturers of materials used by sub-contractors working on such large jobs.  It is thus highly unlikely that Agassi, Graf, the Thomas’, John R.Staluppi, Jr. or GC’s such as Johnson Carlier are aware that through Alpine Steel, their facilities are being built using products made by state prisoners earning minimum wage or less – and much of that taken back to pay for the cost of their incarceration. This cannot be said of the family Bulloch.  Apparently none of the Bulloch brothers have any objections to making or saving huge sums of money by using construction materials manufactured by prisoners.  No it appears jobs involving structural steel components involving the Bulloch’s as investors or developers are steered to brother Randy and his company (which has been using inmate labor since 2005). Some might think there was some manipulation of bids going on when the brother of project developers seemed to be awarded bids on each of those projects. However, no need to rig bids when: your labor costs are 30-50% below the costs of your competitors and the state advances you a credit line exceeding $400,000; you are allowed to default on even the meager wages owed to the inmates ($78,000); you fail to pay $668,000+ owed in payroll taxes to the IRS, and; you refuse to pay your workers compensation insurance premiums to Explorer Insurance ($84,000+) or your suppliers (F&M Steel, Utah – $15,000 and Pierce Aluminum Co, $12,500) for raw materials used in construction projects. The end result is more work for inmates, fewer jobs for workers in Nevada with similar skills, reduced sales to competing private companies and depressed wages for the industry as a whole – with increased profits for Alpine Steel’s owner.  Mr. Cox, Director of NDOC and the Deputy Director of Silver State Industries are of the belief that if 20 or so Nevada workers are denied employment due to inmate labor, that’s an “insignificant” impact upon local employment.  Maybe they and members of the Nevada Legislature’s Interim Finance Committee on Industrial Programs should ask potential workers if losing a job to prison labor is insignificant. Unfortunately this is not an isolated incident. The transfer of jobs to prisoners is something that has been happening all across the country for more than a decade: private companies folding operations due to competition from prison industry operations that are making the same or similar products or services. Union and non-union workers laid off or terminated due to lost sales or unfavorable market swings caused by prison industry operations: Lufkin Industries, Trailer Division: http://lufkindailynews.com/news/article_e0f43731-71c0-5933-803d-9da6f9ae351e.html Cañon City, Co.: http://www.minyanville.com/mvpremium/2011/05/25/is-whole-foods-prison-tilapia/: Pensacola Naval Air Station in Pensacola, FL: http://www.goiam.org/index.php/imail/latest/10489-workers-pay-the-price-for-prison-labor American Apparel and Tennier Industries in AL. and MS.: http://www.businessinsider.com/corporate-prison-labor-is-forcing-small-businesses-to-close-factories-2012-9 South Carolina: http://www.fitsnews.com/2012/06/28/inmate-labor-scandal-could-spread/

PRIDE Print Shop Calhoun CI

In mid 2004 while involved on a prison reform project, I received letters from inmates working in the PRIDE industry where I had briefly been years before. They were posing questions about PRIDE’s PIE program. Prisoners were manufacturing goods for the private sector under this program and wanted to know what the rules were. They also wanted to know if their work was legal and if it affected jobs on the outside. These were good questions and I began to research this PIE program and an entire story of unseen and until then, unknown exploitation was exposed.  It all began with the discovery of 18 USC 1761(c), the Prison Industries Enhancement Certification Program (PIECP). I documented how: PIECP was being used to allow prison industries to partner with private companies, providing access to inmate labor; how private sector companies were urged to close operations and re-open them behind prison fences, using inmates in place of American workers; the huge sums of money being made off prison labor; laws written by corporations and passed by lawmakers they contribute to allowing the exploitation of prisoners; government regulations ignored in the pursuit of profits; entire companies partnered with prison industries under PIECP were “seized” by prison operators along with their proprietary technologies and all equipment taken and used to increase profits to state prison operations and; how taxpayers were paying for much of this without even knowing it. Huge complex corporations had been formed to take advantage of cheap prison labor. One – and possibly more – of these corporations, U.S. Technologies, Inc., bought up other companies through their wholly owned subsidiary, Labor-to-Industry, Inc., closing private sector operations and moving production operations into prison industries nationwide. Below are excerpts from the SEC filings of UST:

“U.S. Technologies Inc. (the “Company”), is engaged directly and indirectly through its wholly owned subsidiary, Labor-to-Industry Inc. (“LTI”), in the operation of industrial facilities located within both private and state prisons, which are staffed principally with inmate labor. These prison-based operations are conducted under the guidelines of the 1979 Prison Industry Enhancement (PIE) program. “The Company is an “outsourcing company” soliciting manufacturing, assembly, repair, kitting and fulfillment services from Fortune 1000 and other select businesses. The Company performs its services utilizing prison labor under the Prison Industry Enhancement Program (“PIE”). Congress created the PIE program in 1979 to encourage states and local units of government to establish employment opportunities for prisoners that approximate private sector work opportunities. The program is designed to place inmates in a realistic working environment, pay them the local prevailing wage for similar work, and enable them to acquire marketable skills to increase their potential for successful rehabilitation and meaningful employment upon release…”

Today more than a dozen years after UST began to exploit prison labor for corporate profit, Nevada finds itself in the grip of a controversy involving the use of prisoners as a cheap labor force made available to “select businesses.” As shown above, Nevada’s private manufacturers are simply the latest victims in this ongoing – and relatively hidden – program taking jobs from neighborhoods and putting them behind bars. This private organization representing all prison industries and the vendors, suppliers and corporate partners using inmate labor, now has responsibility for ensuring compliance with all applicable laws pertaining to prison industry programs. In effect this is the proverbial “fox guarding the henhouse” scenario where program operators are allowed to determine if they are in compliance with government regulations – and their assurances of compliance are accepted without further review by the BJA. This oversight organization has an influential “inside man” in Silver State Industries in a position of power, influence and the ability to allow Randy Bulloch’s company to operate freely.  He is also personally responsible for the unauthorized half-million dollar “line of credit” advanced by the state to Bulloch – and for falsely assuring the federal government that Silver State Industries is in full compliance with federal regulations.  At the core of the current prison labor issues in Nevada this same individual, previously involved in a PRIDE prison industry corruption scandal is once more embroiled in the controversy involving the use of inmate labor. In the following segment we’ll introduce this individual, the organization he belongs to and explain the prison industry PIE Program and how it is being used to remove jobs from American workers.

 

NDOC & Silver State Industries – Meet the Exploiters – Expose on Prison Labor in Nevada Pt. II

Second in a Three Part Expose on Prison Labor in Nevada Displacing Workers

By Bob Sloan – Prison Industry Consultant

SSI GarmentWorking on the “Chain-Gang” was how prisoners were punished for their crimes in days gone by – and people who had been victims of crime were happy.

Then we became “civilized” as a society and changed laws, regulations and opinions that eliminated these hard forms of punishment and degradation.  Instead of harsh working conditions we made sentences longer, believing that to be more humane.  Parole was abolished; possession of a “joint” was enough for a mandatory five years in prison.

Problem was, all this incarceration was costing taxpayers ever more in corrections costs.  Lawmakers sought ways to reduce the ever-increasing expense of incarceration.

An idea was born: create prison industries where prisoners could be put to work to “earn their keep” and reduce the incarceration costs borne by taxpayers.  Soon another idea was floated, let private manufacturers gain access to the prison run factories and further reduce the expense of housing, feeding and providing medical care to prisoners.  Inmates can be taught work ethics, products made by them will cost us less and recidivism will be reduced…and once again the people were happy.

Problem is, this program has created more opportunity for crime and exploitation – of the prisoners themselves. Instead of prison populations shrinking, they grew.  This growth was due to more laws, stiffer sentences, the war on drugs and increasing penalties.  Alongside that population the prison industries grew even faster with more inmates came more job positions. More →

Las Vegas: Prison Labor Used to Beat the Odds

Part one of a three part Expose on Prison Labor in Nevada and Beyond

By Bob Sloan – Prison Industry Consultant

lv strip 2Thousands of tourists, businessmen, CEO’s and executives from all over the world mix with citizens of Nevada in the luxury and splendor of Las Vegas’ many hotels and casinos.  Most come to this beautiful city for the gambling and incredible shows found everywhere one turns.  Inside the cool confines of casinos visitors can trust that every slot machine, roulette table and blackjack shoe is checked and monitored to guarantee fair play – no magnets under the roulette table, no dealer manipulating the cards or slots rigged to never pay out. Those trying to shave the odds are not welcome and at the first hint of cheating, find themselves on the sidewalk, banned or worse.

Each casino has a multitude of surveillance cameras to guarantee play is fair and the odds are understood by all who play the quarter slots or sit down at the high roller poker table.  To ensure such fairness, the Nevada Gaming Commission regulates every aspect of gambling in the entire state.  Strict penalties for violation of gaming regulations by casino operators keep each in line and playing by the rules.

Outside the casinos, locals find the guarantees of fair play and manipulation of odds are not so well regulated. State agencies responsible for overseeing and enforcing specific state laws and regulations have lost their vigilance.  In at least one case a state regulation involving the Nevada Department of Corrections is providing one company an unfair advantage over competitors. If you want to try this games online have a look at this US casino sites where you can play the games for free. The prize sought isn’t a hundred dollar hit on quarter slots, its millions in profits.  An important aspect of this advantage provided to a single company, is an increase in Nevada’s already high 10.8% unemployment rate.

Pl Mazda insert 1The issue is an ongoing battle being waged over the use of inmate labor by a private company, Alpine Steel operating out of Las Vegas, NV.  Alpine is competing directly against other Nevada companies in the field of structural steel fabrication.  Alpine’s competitors pay fair wages, benefits, provide unemployment insurance and vacation pay, while Alpine avoids all those costs.
More →

Mr. President – You Can Stop the Transfer of Jobs From Private Sector to Prison Slave Labor

by Ex. Dir., Bob Sloan

Today I read an article entitled:

Fayette apparel plant to close; 119 to lose jobs

Though the article opened with the foregoing headline, it didn’t immediately attract a lot of attention.  More and more we read about the loss of jobs due to the closure of small businesses all across the U.S. and such reports about the disappearance of jobs have been commonplace of late.  This one is different in that it clearly identifies one of the issues at the very core of private sector job losses – prison or “slave” labor.

The Federal Prison Industries better known by its trade name, UNICOR (a corporation wholly owned by the U.S. Dept. of Justice) has become the primary manufacturer of thousands of products made for use by government programs, agencies and our armed forces. More and more products are “approved” for manufacture by UNICOR and in each case American jobs are lost as companies employing them are closed, no longer able to sustain operations after losing government contracts.

The wages paid to prisoners falls between $.35 and $1.35 per hour worked.  There are no requirements for UNICOR’s payment of benefits, unemployment or worker’s compensation insurance premiums, no vacations or to provide health insurance.  UNICOR employs more than 16,000 prisoners in more than 100 factories nationwide.  In October 2010 Attorney General Eric Holder issued a “memo” to the heads of all federal agencies and departments, instructing procurement officers: More →

How US prison labour pads corporate profits at taxpayers’ expense

Thanks to right-wing lobbying, companies can use a loophole to exploit a scheme designed to give offenders work experience

In 1979, Congress created the Prison Industry Enhancement Certification Program (known as PIE; pdf) to establish employment opportunities for inmates “that approximate private sector work opportunities”. On the surface, the program is a great idea. It gives prisoners something to do, allows them to contribute to their own upkeep and, hopefully, gives them a better shot of getting an actual living wage job upon release. Such was the intention, anyway.

Unfortunately, and perhaps unsurprisingly, this is not how the PIE program has worked out. Instead, it has become little more than a tidy profit-making scheme for corporations and other entities willing to exploit the captive labor force – often at the expense of private sector jobs.

Not exactly what you would call an “employment opportunity that approximates private sector work opportunities”. And the prisoners assigned these jobs do not count themselves as lucky.

To read this article, on which Bob Sloan collaborated with the author, please click here

 

To those who ask “Where Have Our Jobs Gone?” This Video Provides the Answer – Prisoners

For years I have worked to answer the question of how private companies gained access to a labor force comprised of state and federal prisoners.  I found the answer and it leads directly to the US Department of Justice.  Under their authority a federal program known as the Prison Industries Enhancement Certification Program (commonly called PIECP or the PIE Program) is being operated and purportedly overseen by the Bureau of Justice Assistance (BJA).  The PIE Program operates under and is authorized by 18 USC 1761subsection (c), et seq.  First a little history on the PIE program and ALEC.

In 1994 Texas Rep. Ray Allen (R) introduced this program to the Texas Legislature and pushed for implementing state law to allow expanding the TX. prison industries.  Allen was a member of the American Legislative Exchange Council (ALEC), and by 2003 Chaired ALEC’s Criminal Justice Task Force, Chaired the Texas House Committee on Corrections and also lobbied for the prison industry trade association, the National Correctional Industries Association (NCIA).  In 2005 Allen was caught using his office and staff to lobby for the NCIA and he resigned.  After being forced to resign, Allen became a lobbyist for the private prison company Geo Group.

Back in 1995 Allen successfully helped lobby the DoJ to transfer oversight over the PIE Program from the BJA to the NCIA – and provide the organization a substantial financial grant to oversee themselves.  He also took the TX. legislation to ALEC for adoption as “Model Legislation”, and they did so creating the Prison Industries Act.  Once the trade group and ALEC got their hands on this program, they developed policies that would allow for the highest profits to companies involved in prison industry, reduce wages to the inmate workers, ignore the requirements of contacting labor groups and competing manufacturers and getting them to sign off on prison industry operations and to reduce actual oversight of the program.  This reduction in oversight changed the annual review requirements to every two years and allowed for a review of documents filed, rather than actual on-site operations of prison industry facilities.

Eventually, the NCIA expanded the PIE Program from just a few states participating to more than 40.  They built a “marketplace” upon their site to sell prisoner made goods to the public and developed a Director’s Board consisting of top officials operating their state prison industry programs.  Their influence has been so great, that they got the DoJ and BJA to take part in a “Recruiting” video to disseminate to private companies to urge them to relocate from the private sector to prison industries.  Many companies did just that as shown by the list of companies, products and inmates employed in documents provided by the NCIA.

partnershipvideo

The video is uploaded at the VLTP YouTube Channel and can be viewed by clicking on the picture above.  I urge all readers to take a few moments and watch this video.  If you do, you will have an understanding of the products made, the companies involved and begin to understand the PIE Program is not about training of inmates – it is about driving up the profits of companies partnered with the prison industries.

Today between 600,000 and 1 million prisoners are working in more than 300 state and federal prison factories nationwide.  They manufacture tens of thousands of products you and I purchase daily at the grocer or retail outlets; from guidance components for military missile systems, wiring for Boeing aircraft, to processed foods sold to schools, Kroger, Piggly Wiggly, institutions and hospitals…they’ve made clothing for Victoria’s Secret, JC Penney and Third Generation, take reservations for American Airlines and operate tourist information centers.   Companies taking advantage of this slave labor force include: IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom’s, Revlon, Macy’s, Pierre Cardin, Target Stores, and many of these are or have been members of ALEC.

In addition inmates are now being used to replace public sector workers in several states and for replacing immigrant workers who have left states such as WA., Alabama and Georgia.  Female inmates in Arizona have been working in farm fields in that state for two decades harvesting produce for Martori Farms – the primary produce supplier for Wal-Mart stores (a former ALEC member).

So the next time you wonder why it’s so difficult to find a job, why the wages today are so low…take a drive out to the nearest prison and look for the industries being operated there.  That’s where you’ll find your job – whether it was a technical job you had or a labor job – inmates now do that work for pennies per hour so the corporations can profit by keeping wages and benefits down to near zero.