INSOURCING - Will Florida's new Gov. Scott fall in with the crooks...or clean them out?
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by Bob Sloan

Thu Dec 23, 2010 at 05:22:44 PM PST

Here are links to the last 4 segments in the INSOURCING series:
INSOURCING - Florida Gov. Elect trashes PRIDE for prison industry operations

INSOURCING - Stimulus funds go to Prisons - their Lobbyists accompany new lawmakers to Washington

INSOURCING - Has the main enabler to job losses and slave labor in Prison Industries been caught?

INSOURCING - How your government does not protect your jobs or prosecute PIECP Violations

Yesterday I wrote about the advice given to Florida's Governor-Elect, Rick Scott by his transition team regarding the Florida Department of Corrections (FDOC) and Florida's prison industries operated by the non-profit corporation, Prison Rehabilitative Industries and Diversified Enterprises (PRIDE of Florida). Today I'd like to continue the discussion by better explaining PRIDE's activities and business practices that have resulted in such harsh language about them by the transition team - as well as others.

In simple terms it's because this corporation once served a necessary and important service for the state. They took over a state run prison industries that was floundering and costing the taxpayers hundreds of thousands of dollars a year to fund and turned those industries around within 4 short years. From 1980 through 1990 PRIDE was held out to all other state prison operations as a glowing and shining example of how private enterprise could work hand in hand with states to address recidivism through training and hard work.

In 1999 PRIDE participated before the U.S. House of Representatives' hearing: "OPTIONS TO IMPROVE AND EXPAND FEDERAL PRISON INDUSTRIES HEARING BEFORE THE SUBCOMMITTEE ON CRIME OF THE COMMITTEE ON THE JUDICIARY HOUSE OF REPRESENTATIVES". PRIDE's General Manager of New Business Development, Michael N. Harrell (Keep Michael Harrell and Pamela Davis' name in mind as you read the rest of this segment) spoke to the committee that was chaired by Bill McCollum (R) of Florida. In that Committee hearing McCollum and others were attempting to "improve and expand the Federal Prison Industries." In fact McCollum was so proud of "his" state's prison industry operator, PRIDE, that he wanted to use PRIDE's business format as a basis for "improving" the federal prison industry. But I lost track again...PRIDE was being heralded as the pioneer in using inmate labor to produce products and lower costs for private sector manufacturers during the 1990's.

Other states began to integrate PRIDE's business plan into their own state run industries. This was the corporation that was drug store magnate Jack Eckerd's brainchild. He worked throughout the late 70's and early 1980 working with Florida's Governor and Legislature to get their approval to try his innovative approach to combining prison industry with training and a reduction in recidivism. He was successful and so was PRIDE through 1990.

During those early years Eckerd saw to it that PRIDE kept on track with the mission goals of the program he'd put into place: training of inmates in prison to reduce idleness and provide released offenders with the skills necessary to allow them to gain employment and avoid a return to prison. Eckerd also made sure PRIDE maintained an employment service for released inmates that worked with local businesses and manufacturers willing to hire ex-offenders. In addition PRIDE provided reentry assistance to those released: vouchers for tools, housing assistance, resume writing assistance. In other words back then PRIDE was totally dedicated to the mission goals set by the Legislature.

In 1990 Eckerd stepped down as Chairman of PRIDE's Board. At the same time J. Floyd Glisson also resigned from his post as President of PRIDE. At the time they both voiced opinions that they were concerned with the direction new PRIDE Administrators were taking the corporation - away from training and concentrating on profits. Both Eckerd and Glisson went on to other projects, most of which had to do with public service duties on behalf of the people of Florida.

Pam Davis succeeded Glisson and eventually took over as CEO of PRIDE. SHe was PRIDE's CEO at the time of the above-mentioned House Committee hearing. This was the pre-2000 PRIDE.

From 1999 through the present both PRIDE and the FDOC have become what can only be termed corrupt. PRIDE turned it's corporate efforts to illegal acquisitions in pursuit of more and more profits while the FDOC began a period of total anarchy. Secretary's of the FDOC from 1999 through early 2006 ran the FDOC in a manner that became openly called the "Dixie Mafia". Steroid and drug sales rings operated within the institutions, run by senior officials of the FDOC. Inmate abuse frequency escalated, staff began raping female staff members and lavish orgies were held at the state owned homes of top DOC officials. Kickbacks brought down Secretary James Crosby in February 2006 - along with his number one "road dog" A.C. Clark.

While the FDOC was busy finding ways to skim as much money as they could from taxpayers and through lucrative contracts that provided kickbacks to the top officials, PRIDE was busy doing damn near the same thing. Davis formed a number of spin-off corporations to use to launder PRIDE funds through to the benefit of she and other members of the PRIDE Board and executives involved. Davis also implemented a policy of partnering with private sector corporations under PIECP to allow the FDOC inmates to be used as laborers for those corporations. Even that wasn't enough though, and Davis and PRIDE began a plan of partnering with then stealing entire companies - literally taking every piece of equipment of her "partners", products, materials and technologies they had developed. Davis was assisted in this by her favorite cohort, legal counsel, resident agent and lobbyist, Wilbur Brewton (mentioned in yesterday's segment and named prominently in the Transition Team Report of Rick Scott). The plan worked by PRIDE having the "partners" move all equipment and supplies into one of the prison industry facilities upon prison property. Once PRIDE staff learned the production process completely, PRIDE would accuse the partner of owing them money, kick them off the property and Wilbur Brewton would then file suit against the former partners and inundate them with motions, discovery demands and stall long enough until the former partners spent all the money they had to file counter suits and prosecute those and defend PRIDE's false charges. This was a good plan, as without equipment, materials or supplies to keep their operation going, these businesses quickly ran out of money to fight the takeover and theft. End result; PRIDE kept everything and continued operations on their own.

The connection between PRIDE and FDOC were not just the inmates kept by one and worked by the other...Crosby as Secretary of the prison system also sat upon the Board of PRIDE - alongside Pam Davis. In that capacity he had the authority to remove all of PRIDE's partners from the state prison property and the staff to keep them from ever gaining access again - to the prison property or their equipment, materials or supplies.

In 1999 Davis served upon or within PRIDE and all of the spin-offs she'd helped fund and form. She also sat on the boards of the Florida Chamber of Commerce, Florida Tax Watch and had served as a director of the NCIA and that year she was serving as the Treasurer of that organization. She was also named to the Florida Council of 100 by Governor Bush.

From 1999 through 2005 the situation in Florida was that crooks were being guarded by crooks and being worked by other crooks - Crooks Crooks and Crooks? sounds like a law firm PRIDE had at one time before switching to Greenberg Traurig, or as I prefer to say, "Do, We Cheat'em and How". How the hell does that kind of thing work!? I mean what is up with that?

In 2005 the Governor's IG issued a report critical of PRIDE about the spin-offs and no-bid contracts between both. This resulted in the resignation of CEO Davis, President Bruells, CFO Robert Smith and several other PRIDE executive staff. After the report came out Governor Bush demanded the entire Board of Directors (appointed by the Governor) resign. Guess what? They had enough pull with the Legislature and at the Executive level through lobbyist Brewton that PRIDE and the Board thumbed their nose at Bush and told him in essence, to pound salt.

In 2006 the indictments of Crosby and Clark were issued and they were arrested, later accepting reduced prison sentences in exchange for guilty pleas. Davis and the rest of PRIDE avoided any prosecution by the state and were still able to avoid public exposure about their thefts of the 5 Florida businesses under the PIECP partnerships.

James McDonough was appointed by Governor Bush to take Crosby's position as Secretary of the FDOC. The Governor also replaced 5 of the PRIDE Board in January of 06, when their terms expired. Jack Edgemon was chosen from within PRIDE as the new President. The CEO position was left open. McDonough was expected to clean up the corruption in the FDOC and Edgemon was supposed to do the same thing with PRIDE. One succeeded too well and the other chose instead to cut himself - and his family - in on the money flowing through PRIDE.

McDonough went through the FDOC like a whirlwind; 20+ senior and many more mid-level staffers were given the boot. From 2006 through early 2008 James McDonough gained many supporters and accolades from the Legislature and public for cleaning up the FDOC. He believed the corruption had been eradicated from the Department within months of taking over and he turned his eye toward PRIDE where he also held a seat upon the Board.

PRIDE's President Edgemon took the low road. He upped his salary and instead of cleaning up PRIDE's situation involving the theft of the companies they stole, he approved the funding by his son-in-law of two for profit corporations - Century Meats and Circle A Brands - to be run by another former PRIDE employee. These companies took the place as PRIDE's business partner in the food processing industry operation, replacing ATL Industries (who they stole the business from). In addition, PRIDE worked closely with former ATL customers to help Century meats and Circle A to take over the federal and private contracts held by ATL. This effectively put ATL out of business and money to continue to battle them in Court.

In 2006 McDonough ordered his Inspector General to open an investigation into allegations I had provided to him concerning PRIDE. McDonough is a non-nonsense kind of guy and in responding to my allegations he asked for documentation and input as to what I thought needed to be done to fulfill PRIDE's role in training and reentry since that was their mission goal.

I provided the documents I had along with a plan that outlined my suggestions of replacing the entire PRIDE Board or the FDOC taking over the prison industries entirely. I told him the one thing that needed to be done was taking the PIECP certificate back from PRIDE.

Twice in 06 I met with Secretary McDonough at the PRIDE Board meetings and in between we corresponded about our concerns regarding PRIDE. In September 2007 the FDOC IG completed the PRIDE investigation and submitted it to McDonough. He resigned that same month from the PRIDE Board. In October he openly called upon the Governor and Legislature to abolish PRIDE and turn the prison industries and the PIECP certificate over to the FDOC. In addition McDonough demanded several million dollars in room and board deductions from PRIDE that they had taken out of the wages of inmates under PIECP and were supposed to turn over to the FDOC. The Governor agreed with McDonough and the Legislature threw a fit. When the dust settled, Secretary McDonough retired, the PIE Certificate was ordered turned back over to the FDOC and legislation was enacted on the issue of allowing the FDOC to operate the prison industries.

From 2007 to 2009 many things occurred that reinforced the concerns demonstrated by myself and Secretary McDonough: One of the companies stolen by PRIDE received a judgment against PRIDE's spin-off, Global Outsourcing (Pam Davis was the President of that one, Brewton was the attorney and resident agent of Global) for $31 million. Named in the suit? Davis and Mr. Mike Harrell (who gave testimony about PRIDE's successes at the House Sub-Comittee hearing in 1999). PRIDE hired Greenberg Traurig as their representative in one of the stolen business cases. Secretary McNeil that replaced McDonough has defied Governor Crist's demand that the FDOC take back the PIE Certificate, citing Departmental financial restraints (lest we forget, McNeil also holds McDonough's old seat on the Board of PRIDE and following his refusal to take back the certificate, PRIDE's Board in 2009 voted him the "best Secretary the FDOC has ever had").

So the important Certificate remains with and under the control of, PRIDE. Some wonder why this Certificate is worth fighting over when PRIDE only "trains" 2% or less of the inmates in FDOC and they're a "non-profit" corporation. Why put up such a battle over less than 2% of the inmates? Well because that certificate can only be held by one entity in the state issued and whoever holds it has control over which industries fall under PIECP and also over PIE industries being operated by private prison industries. The certificate allows PRIDE to sell their products upon the open markets of Florida and the holder of that certificate controls all PIECP operations in the state. Power, money and influence is attached to that piece of paper issued by the U.S. Department of Justice.

Complaints and documents I sent to Florida's Attorney General, Bill McCollum (yeah, that's right the same McCollum who chaired the House Sub-Committee Hearing back in '99) were forwarded by him to PRIDE's General Counsel, Ron LaFace (of Greenberg Traurig fame). Named in those documents were LaFace and PRIDE's long time spokesman and legislative liaison, Foster Harbin. I accused both of illegal or improper lobbying for PRIDE to amend a Florida statute to the benefit of PRIDE. Within days of receiving my complaint and the documents from McCollum, both LaFace and Harbin resigned their positions with PRIDE. And the crème de la crème? PRIDE hired Brewton back as their General Counsel. Now he is their resident agent, general counsel, lobbyists and sits on PRIDE's Board of Directors!

As I quoted from the Transition Team report yesterday, none of that legislation has made it out of committee, through "obstruction" provided by PRIDE's lobbyists in Tallahassee.

McDonough was able to clean up a huge state department rife with all classes of corruption, 28,000 employees and 100,000 inmates...but when he tried to clean up PRIDE - he ran into a brick wall and ultimately became another victim to their influence and power in the state capitol.

Now several years later, the F.B.I. and the Bureau of Justice Assistance are both investigating PRIDE and I certainly hope their findings result in mandatory prosecutions and a disbanding of the entire corporation.

So in the end all the important and influential players have taken up their positions within PRIDE and the FDOC. The incoming Governor's transition team is calling for reform of the FDOC and PRIDE and that the FDOC or state take back the PIECP certificate. This looks like it could become a nasty fight in the upcoming Florida Assembly - or will it? Scott is already known as purportedly being corrupt for defrauding Medicare through his business, so will he clean up both the department and PRIDE...or will he fall in with them?

Why should any of this matter to you? Because if you live in Florida thousands of your jobs have already been lost to or because of prison labor. If you live in any of the other 41 states operating under PIECP...you may have already lost one of the other thousands of jobs that have gone to prisoners...

Answer the poll and let me know

Poll
Will Rick Scott abolish PRIDE and clean up the FDOC? Or will he join them in further scamming Florida taxpayers?

Scott will clean up FDOC and PRIDE.
Scott will try, but fail because of PRIDE's influence with the legislature
Scott will ignore the advise of his transition team and leave both FDOC and PRIDE alone
Scott will cut himself into the corruption and money made from it.
Scott will resurrect and become the new head of the "Dixie Mafia".
I don't know
None of the above
| 29 votes | Results
COMMENTS to DK diary below

Tip Jar (15+ / 0-)
"Inmates should be reformed...not recycled"

by Bob Sloan on Thu Dec 23, 2010 at 05:22:42 PM PST
[ Reply to This ]
What an amazing diary. (8+ / 0-)
I am left wondering if one of the companies PRIDE 'installed' was yours?

I call insourcing OnShoring Labor.

The issue of private prisons and prison labor for profit and being the country with the highest percentage of incarcerated is really, really chilling.

You might enjoy this diary with a list of states and what their prisoners make:

Onshore Manufacturing - Cheap Prison Labor

by War on Error [Unsubscribe] [Edit Diary]

Sun Dec 21, 2008 at 08:53:06 AM PST

It's difficult to be happy knowing so many suffer. We must unite.

by War on Error on Thu Dec 23, 2010 at 06:03:55 PM PST
[ Reply to This | RecommendHide ]
Thanks and I read your diary linked above (5+ / 0-)
I read it and have to ask some of the same questions myself over and over again. Still haven't gotten a realistic answer to most.

This is why I didn't go near Onshoring when I began the series. These folks are busily trying to hook up small private sector companies with prison industries closest to their operation, so prison labor can replace their labor need.

They're prison labor brokers! Hard to believe anyone would choose that for an occupation, huh?

"Inmates should be reformed...not recycled"

by Bob Sloan on Thu Dec 23, 2010 at 06:20:50 PM PST
[ Parent | Reply to This | ]
Absolutely sick. (2+ / 0-)
Wonder what they're business card say on it...probably something stupid like

John Smith
Labor Infrastructure Analyst
US Prisons

You know what would be cool Bob....setting journalism students all across America on this story. Have them go to local area prisons and confront wardens regarding stories of prison labor. Then post the videos on facebook and youtube and political blogs, or maybe even send it in to their local television stations.

Hmmm...wonder if Mike Stark is still around. That dude is pretty aggressive with the confronting.

Sigh. Just thinking outside the box.

Hope you're doing well tonight Bob.

Bob Sloan: INSOURCING Slavery in the land of the free

by cosbo on Thu Dec 23, 2010 at 09:13:17 PM PST
[ Parent | Reply to This | RecommendHide ]
Thanks for stopping by and dropping (1+ / 0-)
such a neat suggestion. I wish I were able to coordinate something like that - journalism students.

However, it takes the mainstream media outlets with the most viewers to help get the work out, and they're mostly held by a few and won't say anything to upset owners - who may just have money invested in the likes of CCA.

Trying to get Christmas stuff done so Sunday I can put that behind - one more time, sigh...

"Inmates should be reformed...not recycled"

by Bob Sloan on Fri Dec 24, 2010 at 08:35:44 AM PST
[ Parent | Reply to This | ]
I wonder if the goal (0+ / 0-)
is to create a 'kinetic' system.

If prisons continue, and then succeed in bringing all the services needed to run/maintain the prison inside the prisons, they become a sort of "independent nation' operating within the communities they reside.

What is clear and impossible to defend is the reality, which your diary clearly points out, is that the US has created a huge Prison Industry.

Think about this. Robber Barons created/amassed great wealth with 'resources' that are freely provided by the earth, less the cost of extracting the resources.

Prisoners are a 'freely provided resource' for those morally bankrupt enough to profit from them.

Via poverty and neglect, the US 'manufactures' a 'cradle to prison' resource.

When will we the people be willing to push back against all that enables this travesty?

It's difficult to be happy knowing so many suffer. We must unite.

by War on Error on Fri Dec 24, 2010 at 08:31:47 AM PST
[ Parent | Reply to This | RecommendHide ]
We're pushing War on Error...we're pushing (1+ / 0-)
hard but it's all uphill right now. Many states have come to the conclusion that putting more and more in prison and using them for slave labor is not as cost efficient as previously. Some states have come to understand the real cost of prison labor is still borne by the taxpayers. I know they claim "prison industries are self sufficient, we take no tax dollars to fun our operations", etc. But...we taxpayers pay for the housing, clothing, feeding, medical and every other need inmates have. Once they walk out the cell door and go to work in the prison, the money they earn goes right back into the industry as profits...with their meager checks going into accounts so they can go to the stores and buy commissary that is sold by another corporation.

So we are paying for the total upkeep of the prison labor force with our funding. We keep their workers fed and ready to work.

"Inmates should be reformed...not recycled"

by Bob Sloan on Fri Dec 24, 2010 at 08:41:02 AM PST
[ Parent | Reply to This | ]
Why do images of... (3+ / 0-)
"Brubaker" and "Shawshank Redemption" spring to mind after reading this?!

In an insane society, the sane man would appear insane

by TampaCPA on Thu Dec 23, 2010 at 06:15:22 PM PST
[ Reply to This | RecommendHide ]
Hmmmm maybe because all of the players (3+ / 0-)
named in the diary watched both and that's where they got their ideas from? ;)

"Inmates should be reformed...not recycled"

by Bob Sloan on Thu Dec 23, 2010 at 06:22:05 PM PST
[ Parent | Reply to This | ]
Shouldn't this be done by the state? (2+ / 0-)
Why can't the states be in charge of their own prison systems? The whole community has a stake in this so it should administered by the state with auditors to make sure the goals of humane incarceration w/ rehabilitation takes place.
I find it hard to believe that the state could be as corrupt as these for profit scum suckers.

What do we want? Universal health care! When do we want it? Now!

by cagernant on Thu Dec 23, 2010 at 09:41:23 PM PST
[ Reply to This | RecommendHide ]
As I said in a response to GUGA below (0+ / 0-)
Scott just chose someone from the most corrupt of legal firms involved in assisting PRIDE - Greenberg Traurig - as his "Special Counsel" to oversee the Governor's Legislative agenda.

So the arguments put forth by his transition team appears to have gone up his nose rather than into his ear...the GT firm represents the very prison industry corporation that is causing all the problems (PRIDE) and he picks from that group? PRIDE is on safe ground, me thinks. So cleaning up the FDOC is nothing compared to what needs to be done with PRIDE and if he doesn't clean up both one will just feed off of the other.

"Inmates should be reformed...not recycled"

by Bob Sloan on Fri Dec 24, 2010 at 08:50:40 AM PST
[ Parent | Reply to This | ]
He was fined for fraud (1+ / 0-)
he stole money from Medicare. Instead of being in jail he is the governor.

Who do you think he will side with? The taxpayers of the crooks?

by GUGA on Fri Dec 24, 2010 at 05:15:01 AM PST
[ Reply to This | RecommendHide ]
Well I was holding out hope for his cleaning (0+ / 0-)
up the corruption...but sadly a news article was just released saying he has chosen a lobbyist from Greenberg Traurig as Special counsel :(.

"Scott appointed Hayden Dempsey, the former Bush aide, as special counsel to the governor who will also oversee Scott's legislative agenda. Dempsey is a lawyer and lobbyist at Greenberg Traurig and represented 13 clients before the legislature last year, including many health care concerns."So it looks to me that he wants to cut himself in on the free flow of tax money in Florida.

Such a shame, I really was hoping he would be different. Should have know by his brand (R)...

"Inmates should be reformed...not recycled"

INSOURCING - Fighting for reform - can cost you your job.

Bob Sloan (C)2010

Fri Dec 3, 2010

For those visitors who may have missed my Corporatocracy series involving corporations, private prisons and prison labor, below are links to the series.

Corporatocracy
Corporatocracy-II
Corporatocracy-III
Corporatocracy-IV
Corporatocracy-V
Corporatocracy-Conclusion

Bob Sloan's diary :: ::
From 2003 through 2006 the Florida Department of Corrections (FDOC) was suffering from a severe case of corruption. James Crosby, former Warden at Florida State Prison (FSP-Death Row) had been chosen by Governor Jeb Bush in January 2003 to serve as the new Secretary of the FDOC (a Cabinet poistion). He replaced Michael Moore (no relation) who was leaving under a cloud of controversy and allegations of corruption. The Secretary's position included a permanent seat upon the Prison Rehabilitative Industries and Diversified Enterprises (PRIDE) Board.

There were many other choices for the Governor to pick from, but he knew Crosby. During both elections where Bush prevailed, Crosby had been a loyal supporter. He held or sponsored many meetings, dinners, parties and fund raisers for his friend Jeb. In addition to Crosby's support, Bush also had the support of another FDOC employee - A.C. Clark. Later Crosby and Clark were often referred to within the FDOC as heads of the "Good Ol' Boy's Club" or collectively, "The Big Boys".

Together Clark and Crosby twisted arms, threatened loss of prime shifts or overtime in efforts to "get out the vote" for Jeb and suggest others within the FDOC make "contributions" to Bush's campaign. In both instances a lot of support and money was garnered from among FDOC staff (22,000+) in support of Jeb Bush. Later many of those FDOC employees voiced complaints that their attendance at fund raisers, contributions and votes were coerced by Clark and Crosby through fear of losing jobs, having their shifts changed or being transferred from one institution to another, if they did not do as "suggested" by the Good Ol' Boys.

So Crosby's selection to head the state's entire Department of Corrections appears to have been based - at least in part - as a reward to Crosby for his political activities related to both Bush campaigns in Florida. Of course Crosby was only too happy to carry A.C. Clark along with him - from within the ranks of FDOC to the very top rung of the department's ladder.

As Governor, Bush later appointed A.C. Clark to the 8th Circuit Judicial Nominations Committee (JNC Appointment). Later, Bush would be unable to recall why he appointed Clark to a four year term on the Committee in response to questions as to why he would appoint a high school drop-out to such a position.

Clark had been with FDOC for years - as had Crosby - and worked at several institutions. During his tenure with DOC he made rank, only to lose it on more than one occasion. Once Crosby took office as Secretary, Clark quickly rose from Sergeant...to Major...then Colonel...to Assistant Warden...to FDOC Regional I Director (NW Florida). He rose through all those ranks from 2003 to 2006. Other "pals" of Crosby and Clark were also promoted over others with more time and rank. Clark was provided a huge home (described as a "Mansion") located on prison property and owned by the State of Florida.

Together Crosby and Clark raised hell in and around Tallahassee, within the FDOC and community. They threw lavish parties and orgies for FDOC officials and politicians on DOC property. Some turned into brawls, with attendees throwing punches at one another. When the media would try to follow up on the rumors they heard, most kept quiet, referring all to interview Crosby. He tried to keep it out of the media but was unsuccessful and several FDOC staff were arrested for the bar fights.

Crosby recruited semi-pro ball players to play for the FDOC softball team. They were hired to work as prison staff, worked no shifts but received paychecks like the rest, for playing ball.

A steroid ring was begun among staff working in the DOC. The tendrils of the drug ring ran from North Florida across the state to many institutions and originated in Egypt.

Clark was at the center of many rumors: that he used money out of an FDOC recycling fund to open a limousine service, that he was strong-arming other staff members to cover his shifts with threats of termination, covering-up

In mid-November, 2005 Crosby had to address the poor behavior of his men and women staff:

"Effective in mid November, Crosby told his top staff to begin spreading the word that employees arrested for an "act of aggression" would automatically be placed on leave while the department investigates the arrest. Crosby also told reporters in mid-November that additional policy changes will be issued soon that will cover other areas of employee misconduct on and off the job."

Crosby should have taken his own words to heart. He didn't know it then, but he and the others were already under intense FDLE and F.B.I. joint investigations for corruption, taking kickbacks and embezzling funds from the recycling program and misuse of inmate labor. It was later learned that the investigations were begun in 2003.

It is inconceivable that anyone committing such rampant corruption and abuses of power was without knowledge of the corruption ongoing within PRIDE, when he held a seat on the Board. He ignored all of the information I and others provided him with about PRIDE's state and federal violations, complaints of the formation of the spin-offs used for money laundering, wages and reduced wages of inmates, that also reduced the money taken in by the FDOC for room and board deductions from those wages. He ignored all of our requests and complaints...yet in 2005 when the IG's Audit on PRIDE was released, Crosby publicly stated that from the time he became Secretary and became a member of PRIDE's Board, he had reservations about the business practices, formation of the spin-offs and accounting procedures employed by PRIDE. He further alleged that he brought all of that to the attention of the Governor and Legislators. He knew how to "spin" the facts, for sure.

Throughout the scandals, investigations and a multitude of calls for Governor Bush to fire Crosby, he refused and instead had Crosby's back right up until February 2006. The formal investigations involving all of the corruption in FDOC were completed after the first of the year and A.C. Clark was arrested and Bush could no longer keep the lid on and ordered Crosby to Resign.

On February 10, 2006 Governor Bush appointed James R. McDonough as interim Secretary to replace Crosby. McDonough had been with Bush's Administration for the full length of his Governorship, serving as director of the Governor's Office of Drug Control. McDonough is a West Point Graduate, Author of "Platoon Leader" - later made into a popular film - and served proudly in the military, serving last in the European theater where he wrote the manuals on strategy and tactics that are still in use today.

McDonough took over with Bush's instructions to weed out the corruption and reform the prison system. He accepted his orders and went to work as always. Within weeks of taking over, McDonough fired many top officials, demoted those who had been promoted due to crony-ism and promoted those who had the skills to perform the duties assigned and had been passed over under Crosby and Moore. He charged department staff to remember their oaths and abide by them in dealing with other staff and inmates.

McDonough made a lot of enemies in his reform efforts. Most of those were the remainder of the "Good Ol' Boys" who had survived but were keeping their heads down.

I contacted Secretary McDonough shortly after he became Interim-Secretary, providing him with documents and information alleging corruption and violations of the PIECP program within PRIDE. I advised that I had provided the information previously to Secretary Crosby, to no avail. He refused to look into or investigate the allegations - even as a Board Member. Secretary McDonough replied immediately, asking if I was sure of my allegations, did I have documentation in support and did I have any suggestions on how the prison industries should be run by PRIDE, knowing what their Mission Goals were: training and job placement of inmates?

In response I forwarded several confidential documents outlining the corruption and efforts that had been made by myself and a prison advocacy group I belong to: (Little Ol' Ladies In Tennis Shoes - Florida LOLITS) and Kay Lee of Making The Walls Transparent (MTWT) to bring corruption in FDOC and PRIDE to the attention of Governor Bush and the media. I also included an independent plan for the revamping of PRIDE that would return the corporation to the Mission Goals. I advised that the Board had to be replaced with members appointed from both the commercial corporate and public activist arena's.

McDonough responded that he appreciated the input and documents and that he had ordered an investigation to be conducted by the department's IG and as soon as the report was completed he would provide a copy. As I awaited the report, I asked the Secretary if he planned on being at the upcoming (April 2006) PRIDE Board meeting and would I be allowed to attend? He promptly replied that yes, he intended to be there and as a member of the public I could attend.

I made the meeting, flying down from Indiana. Secretary McDonough could not make it to the meeting as he was in the midst of several near crises within the FDOC, but his General Counsel did attend. She spoke on his behalf and asked if I was present. Finding me there, she advised the Board that Secretary McDonough asked that the Board allow me to make a presentation to the Board as I had several grave concerns as to the PIECP program and PRIDE's business operations an practices in that program and those same concerns were mirrored by Secretary McDonough.

At the conclusion, I was given the courtesy of giving a presentation. I raised the issues of underpaid wages, use of inventoried products to fill PIECP orders, the contaminated foods coming out of their food processing plant, ethics violations by PRIDE President Edgemon and his son-in-law also working for PRIDE at the food processing plant involving the theft of ATL's equipment and materials and the formation of two for-profit corporations by his son-in-law that took the place of ATL's contracts and profits.

In addition I spoke to the use of inmates in the training program who were serving life or other sentences in excess of 20 years - voicing concerns of safety to both staff and inmates (allowing those inmates access to dangerous tools) and issues of avoiding overtime by adjusting inmate hours by removing some hours from one pay period and putting them on subsequent periods and the sale of prison made goods upon open markets without paying any PIE wages at all.

The Board thanked me and advised they would address my concerns and answer the questions at the next meeting in July. However, the Board was not aware of the situation involving ATL and the food processing facility and wanted Edgemon to explain the circumstances. Edgemon declined, stating that they were currently in litigation with ATL and he was unable to speak to the issues until the litigation was completed.

I attended the July meeting also and the Board had their internal auditor present to give a report on PIECP and how it was operated by PRIDE. In that presentation she stated that PRIDE had been reviewed numerous times by the NCIA and had been found in compliance. In answer to the wages paid to inmates, she answered that currently "all inmates working on PIECP orders/projects are paid the Florida minimum wage of $6.40 per hour." Again, she reiterated that under PIECP law, that was sufficient to meet the wage requirements of 18 USC 1761(c)(2).

I was allowed to respond to her presentation and again, pointed out that upon their website they claim to pay inmates "prevailing wages" as required by the law:

"The PIE Certification Program was created by Congress in 1979 to encourage states and units of local 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."

The Board said they would further investigate my argument and address the issues in the next meeting in November. I attended that one also and PRIDE's "PIE Coordinator, Brian Connet was brought in and gave a presentation on PIECP. He gave a glowing number of statistics alleging that their training program through PIECP was turning recidivism rates around and reported many individual success rates. He again, mentioned that the inmate workers were paid minimum wage and that was in compliance with the requirements of the "1999 Final PIECP Guidelines". Mr. Connett was unable to stay and answer any questions posed by myself or the Board members. He was followed by a presentation given by Ms. Carol Tortarelli, then serving as PRIDE's Program Director for Mission Programs. She added more glowing reports to those provided by Connett about successful reentries by former offenders, but did not futher address PIECP.

At the conclusion I again gave a presentation that challenged the legality of the minimum wages paid by PRIDE when they were supposed to be paying prevailing wages - a substantial difference. The Chairman of the Board and two othr members turned to President Edgemon and asked," Jack are we in compliance on PIECP requirements by paying minimum wages?" His reply was a nod yes. When I again advised they were not only in non-compliance, but the failure to pay the proper wage rendered each product shipped across state lines a federal felony, Edgemon was asked again; "Jack are we or are we not in compliance by paying minimum wages to the workers?" His response that time was a verbal, "Yes."

(I traveled several more times to Florida to attend the meetings but was unable to convince the Board that the inmates were being cheated by paying them less than required...and by doing that, they were reducing their tax requirement of matching deductions for S.S. as employers and it also reduced the amount of room and board taken from inmate wages and turned over to the FDOC. I was talking and my words fell upon 12 sets of deaf ears).

In July 2006 Crosby and Clark both plead guilty to receiving kickbacks under an FDOC canteen contract involving Keefe Commissary Network and American Institutional Services (Earlier this year the owners of AIS were indicted, arrested and are awaiting trial for their parts in the kickback scheme. Keefe has not been mentioned after the original stories broke, and there has been no indication they will also face prosecution for their involvement in furthering the bribery scandal).

When Governor Crist took over from Bush, he kept McDonough on, citing his great work at reforming the huge FDOC.

From my initial contact with Secretary McDonough we exchanged many emails and had lunch at one of the 06 Board meetings in Orlando, discussing the issues surrounding PRIDE and their business practices. I told him I had learned that ATL was not the first private business "stolen" by PRIDE through PIECP and provided him with the names of the companies and facts as I knew them. In September 2007 the investigation he had ordered into PRIDE's operations was completed and turned over to him and McDonough resigned his position on the PRIDE Board (I didn't get a copy of that report until late 2009). In October 2009 McDonough called for Governor Crist to abolish PRIDE and return the operations of the prison industries back to the FDOC and in November he cited the fact that PRIDE 'had lost their way" in pursuing their mission goals and statement. In addition he demanded that PRIDE turn over more than $1 million deducted from inmate wages for room and board deductions, but PRIDE refused, saying state law allowed them use of those funds and McDonough countered that federal law says it rightfully belonged to his department and superseded state law.

A Senate Appropriations hearing was scheduled for January 8, 2008 to hear the proposals presented by McDonough and the FDOC on PRIDE. On January 7, 2008 James McDonough submitted an unexpected announcement that he was "retiring" from the FDOC as Secretary. I had traveled to Floria to be present at the hearing in support of the FDOC and heard the news sitting in my hotel room. I immediately emailed the Secretary and questioned if his retirement was a result of his battle over PRIDE. He stated it was his decision and the PRIDE fight had no effect upon his decision. However, since that time McDonough has been involved in several efforts to change the laws surrounding incarceration, to reduce incarceration and remove some inmates from prison and place them in facilities to address their addictions or mental problems. He has also called for sentencing alternatives to prison. So McDonough remains active in trying to change Florida's dependence upon mass incarceration and the costs in tax dollars that results in.

Throughout my conversations and communications with James McDonough he was always truthful - regardless of any personal costs to him for voicing those truths - and demonstrated a huge amount of integrity and concern. While Secretary he eliminated wasteful contracts, reduced the cost of canteen items for the inmates - state wide - and re-negotiated the inmate phone access contracts, reducing the cost of collect calls to family and friends from within the FDOC. He made many changes to professionalize the FDOC and return it to a department that was again respected - a hard task after all the corruption in the nation's third largest correctional system.

His ability to understand and realize the actions of PRIDE were violative and hampering rather than assisting a reduction in prison recidivism made him respond as he had always done, by correcting the situation and addressing the corruption that lurked within PRIDE.

Unfortunately the Governor and Legislators were willing to support McDonough's efforts of ridding the FDOC of corruption and crony-ism - but not PRIDE. When his attention turned to PRIDE (Legislator's cash cow) he had to be stopped. Inmates and most corrupt officers do not contribute to campaign funds - PRIDE and their lobbyists do - so reforming the FDOC was okay. He had been so effective at rooting out all forms of corruption within FDOC that he simply could not be allowed to pursue the same attack upon the source of most Florida politician's lobby funding through PRIDE...and in his absence corruption and huge sums of money made off of inmate labor, continues as before; growing more insidious and being exported to other states every day.

In the next segment we'll discuss the NCIA and their impact upon the violations within PIECP.

Some have asked that I provide links to the other segments in this series. Below you will find them.

INSOURCING - A new concept about private sector job losses
INSOURCING-II-The Wheel of Money and Sorrow...
INSOURCING-III - Corporate Wheel of Profit Rolls On...
INSOURCING-IV - More Profits Through Monopolies...-
INSOURCING - The Real Reason your jobs MUST go to prison and what they do with the money saved...
INSOURCING - Why this Investigative series began...
INSOURCING - Florida Corruption Exposed
INSOURCING- Violations-under-PIECP

Insourcing - Why this Investigative series began...

by Bob Sloan

Sun Nov 21, 2010 at 04:13:31 PM PST

I have been exposed to both prison and prison industry over my lifetime. I personally experienced what it's like to be falsely arrested and behind those fences and working in prison industries. Because of that I was open to questions posed by inmates working where I had once been. What I discovered is not only unbelievable, it is shocking and hard to stomach.

In 2002 I was unfortunate enough to have to return to Florida in response to an old probation case I had there in 1981. My attorney said no problem we'll go down and straighten this out and get you right back to Indiana. Well that fiasco lasted nearly two years and I was finally able to resolve the case and return to my home. I won't go into large detail on this, as it isn't important to the issues involved in this series.

What is important is that during my stay in the Florida correctional system waiting on the court to rule, I was assigned to work in the PRIDE prison industry at Union Correctional Institution. Thankfully I was only there for a brief few months before coming home, but that was enough time to be dumbfounded as to the products made, the private sector customers purchasing the products and other disquieting observances.

Bob Sloan's diary :: ::
Due to numerous requests here are links to the previous segments of Insourcing:

INSOURCING - A new concept about private sector job losses
INSOURCING-II-The Wheel of Money and Sorrow...
INSOURCING-III - Corporate Wheel of Profit Rolls On...
INSOURCING-IV - More Profits Through Monopolies...-
INSOURCING - The Real Reason your jobs MUST go to prison and what they do with the money saved...
INSOURCING - Why this Investigative series began...
INSOURCING - Florida Corruption Exposed
INSOURCING- Violations-under-PIECP

While there I began to ask questions about the industry and how they could sell prisoner made products to the public? My questions were not well received and the answers provided did nothing to dispel an uneasiness about the legality of what was going on.

The court finally ruled, the case ended and I was released and sent home. I immediately filed a civil case in Indiana's federal court for my false arrest (outdated and expired warrant) in '02 here in Indy on the Florida case. Due to the legal mix-up I had lost two businesses and we were out more than $35,000.00 in attorney fees - not to mention two years of my life wasted on a "mistake".

In mid 2004 while I was in the midst of litigating the false arrest case, I received letters from some of the inmates working in the PRIDE industry where I had briefly been. They were posing questions about the prison industry's PIE program. They were still being worked to manufacture goods for the private sector under the program and asked what the program was, knowing I had asked these same questions when I was among them. They also wanted to know if their work was legal and if it affected work on the outside.

These were good questions and as a prison rights activist (yes, I was that before and after my trip back to Florida), I began to research this PIE program and found it is actually the Prison Industries Enhancement Certification Program (PIECP) run by the federal government. That was easy enough to find out.

I discovered the program was run by the Bureau of Justice Assistance from within the U.S. Department of Justice's Office of Justice Programs. I copied down the contact information for the Bureau of Justice Assistance and sent off a cursory email, asking about the particulars of the program and information on products manufactured and possible impact upon private sector jobs. In response I got a brief email answer advising me that I would have to contact the National Correctional Industries Association (NCIA) for information on the program.

The foregoing response left me scratching my head, wondering why I needed to contact a non-profit corporation for information on a government run program. Once I'd become nearly bald - from the scratching - I sent off a similar request to the NCIA. At the same time I visited the website operated by the NCIA and tracked down the actual PIECP program Overview and read it. That left me with more questions so I read the entire 1999 Final PIECP Guidelines and finally downloaded it to try and understand it. The formatting was all screwed up and it was difficult to determine where one topic ended and another began.

More confused by my reading and lack of comprehension about this PIECP I made copies of the guidelines and sent them to the prisoners who had contacted me. I explained what I knew about the program and that the information they had related to me in their letters was not exactly the way the program read. I asked them to provide more information and I'd find the time to look into it.

The next letter I got from these inmates in Floria advised that they had been "caught" in possession of the PIECP Guidelines by industry supervisors. Two of them were terminated for possession of contraband and a third had been suspended without pay for a week. The guidelines I'd sent were confiscated and destroyed.

Then I was really confused trying to understand how a federal program guideline used to work inmates could be considered "contraband" by prison authorities when found in possession of the workers. I contacted Florida authorities and was informed contraband was just about any item not issued by the state or on an approved list of items inmates were allowed to have in their possession.

I contacted PRIDE headquarters in Clearwater, Florida and asked them about the program. Again I was referred to the NCIA for answers to my questions. Okay, I was starting to get really uneasy as well as peeved at the difficulty I was having just getting reasonable questions answered.

Before contacting the NCIA a second time, I sat down and read the PIECP guidelines through and through - three times. From what I could determine there were nine mandatory criteria that had to be met prior to the start-up of any prison industry program. The state department of Corrections had to apply for "certification" in the program to participate and one factor that jumped off the page was the requirement that any inmate working for a prison industry under PIECP must be paid the prevailing wage for his/her labor! Okay...that was just not happening in PRIDE's industries. So I had a valid question of non-compliance. My wife and I both contacted the NCIA and explained that our reading of the document provided at their site informed that inmates in the program were to be paid the prevailing wage for their work. We explained that this was not happening in Florida and asked them to initiate a review of the program's operation in that state.

We received immediate and short responses. We were informed that a completed review of PRIDE's industries by the NCIA was performed in 2004 and they were in full compliance and paying the inmates the proper wage.

Before I could study on this disparity between the "official" finding and what I knew was going on - having been there for a brief period of time and seeing it first hand, I received a phone call from a businessman in Atlanta, Georgia. He had read some of the articles my wife had published about PRIDE on one of the activist sites and wanted to talk to her about a situation he was involved in with PRIDE. She turned the phone over to me and from that moment on, my life was completely changed - as well as all my preconceived knowledge about corporations and the U.S. prison situation in Toto.

The man who called me was the owner of a food processing business in Atlanta (ATL Industries). He had been approached by PRIDE marketing personnel in 2001 and informed he could double or triple his profits by partnering with PRIDE under the PIECP program and using inmate labor and PRIDE's facilities to process his bulk meat products. As a business owner, the prospect of increasing profits so substantially attracted ATL to further discuss the use of inmates in food processing. ATL was told that using inmates was legal under the PIECP laws and to participate they needed to transfer all of ATL's equipment to the Florida Food Industry location in Raiford, Florida. They would be required to provide the raw bulk meats, recipes, procedures and provide personnel to train the inmates and prison industry staff on the proper preparation and disclose company proprietary technology to PRIDE so the finished products would remain the same as those previously made in the private sector. In addition PRIDE needed a complete list of ATL's customers for purposes of shipping the finished goods.

PRIDE negotiated and in 2002 ATL moved all of their equipment to Florida and began operations under a contract with PRIDE. There were minor problems from the beginning, but that's to be expected when new partnerships were getting off the ground. ATL provided a supervisor to oversee the operations in Florida and for a while business progressed smoothly. ATL's gross sales of goods was approximately $20 million annually during this period.

After two years of the three year contract, ATL discovered several bookkeeping discrepancies and when they approached PRIDE about the matter, asking for an independent audit, ATL was thrown off the industry and prison property. PRIDE filed suit against ATLand claimed theyowed them money.

PRIDE seized all ATL equipment to offset their claim of money owed, they hired ATL's onsite supervisor away from ATL and continued to manufacture their products under ATL label and sold them to ATL's customer and client list as if the business was operating normally.

Trying to keep ATL open and liquid, the owner paid what amounted to extortion to get some of ATL's products released. At the same time he offered to post a non-refundable surety bond to guarantee PRIDE that if they were correct and ATL owed them money, they would get it. In the meantime he wanted his products to continue being made and shipped. PRIDE took the money he sent, refused to allow an audit or to accept the surety bond and instead went after the owner personally.

PRIDE's President, Jack Edgemon's son-in-law was involved with the food processing facility and once ATL was refused entry to the plant, he financed the formation of two for-profit corporations in Florida and picked the former ATL supervisor to head them both as President. The companies took the place of ATL and continued to operate and realize the profits that should have gone to ATL under the existing contract. They used the materials, raw bulk meats, packing and dry ingredients as well as the equipment belonging to ATL and kept the profits made.

I became aware of this in 2004 and went to work researching the situation, reading some of the court files available (PRIDE had secured a "gag order" in the civil case, so much of the information was unavailable.

In 2005 my research revealed that ATL was not the first private sector company to be taken over by PRIDE in the same manner. There was Fresh Nectar (a company partnered with PRIDE to process and ship citrus and fruit juices and citrus products), Man-Trans, llc (a company that refurbished transmissions and engines), Custom Converter Sales, Inc. (CCA refurbished transmission torque converters) and a second company that was also owned by the CCS, Valueline Converter, Inc. In each case PRIDE had done the same thing; partnered with the companies, requiring them to provide all of their equipment, stock, materials and unfinished products and technology to PRIDE and relocate behind prison fences. Once this was accomplished, within months PRIDE would throw the company owners off the property and instruct FDOC to not allow them back onto prison property, keeping the equipment, materials unfinished and finished products. PRIDE then continued the operations, selling the products to the customers of the private partners. PRIDE's attorney then filed suit alleging money owed and tied the companies up in court until the owners ran out of money to fight the legal battle (they all had no way of generating income as PRIDE had all of their equipment and stock).

I advised ATL and their attorney of the other companies and sent them documents demonstrating that this appeared to be a normal business practice of PRIDE.

During this same period 2004-2005, PRIDE came under investigation by the Florida Governor's IG office. The state wanted to audit PRIDE's books and PRIDE refused, arguing that as a private corporation they had no duty to open their books. After a long battle PRIDE was forced to allow the audit and in 2005 the IG issued a report that was scathing (Audit #2004-4). PRIDE had created nine illegal spin-off companies that was owned and operated by PRIDE Board members and/or PRIDE's CEO, Pam Davis, CFO Robert Smith or family members of the Board members. Money from these spin-offs was being dumped into a single account mixed in with the non-profit income of PRIDE. PRIDE's Board met and passed resolutions to loan these spin-offs as much as $37 million dollars (to themselves, really) with no loan repayment schedule or clauses. They then went to their spin-offs and received the money and paid themselves huge salaries, bonuses and in general used the money as they saw fit.

PRIDE then handed out no bid contracts to the spin-offs to do PRIDE's work and issued huge checks to the corporations for the "work". In the end, the CEO, President and several other PRIDE personnel were forced to resign their positions. The state of Florida did not pursue criminal action or inform the IRS of the manipulations by a registered 501 (C)(3) exempt corporation. PRIDE was forced to sever all ties to the spin-offs and reclaim the money paid out to those spin-offs. Of course, the money was gone, spent or otherwise dispersed prior to the report being issued. In the end PRIDE was able to recover less than $500K of the multi-millions it had loaned out.

In the next segment Friday, I will include links to the previous series and segments that preceded this one and will conclude the PRIDE saga and turn to the multiple violations occurring under PIECP and how the program participants are so easily able to take our jobs - and get away with it.

Happy Thanksgiving to all Americans. Enjoy your Holiday and I would ask that you add a little something in your saying of grace this year to include those who are away from friends and family overseas in our military - and sitting behind bars making the equipment the military uses. Thanks