MON MAR 11, 2013 AT 07:47 PM EDT

Nevada Ways and Means Committee Weighs in on Prison Industry Battle

byBob SloanFollow

 
 
 
 

The Result of Bureaucrats’ Operating as Businessmen

In the continuing saga of Nevada’s Silver State Industries (SSI), the Legislature’s Ways and Means Committee held a hearing this past Friday, March 8th to discuss the budget of the Nevada DOC which includes state prison industry operations.

Critics of the industry program have found traction with the discovery that Alpine Steel, a private company, had access to inmate labor, subsidized facility leases and even with those subsidized benefits owed the state more than $400,000 in accrued debt.  In late 2012 when this story first broke, it was discovered that Alpine also owed inmate workers back wages to the tune of $78,000.  Because inmates are “assigned” to industry jobs by the NDOC, they were prohibited from simply quitting or asking for a reassignment due to not being paid.  They worked for an extended period without receiving any compensation for their labor – or if they were paid the wages did not come from their employer, Alpine Steel.

On Friday morning Committee members had an opportunity to question two top NDOC officials, Director Cox and his Deputy Director in charge of prison industries, Brian Connett.  Those in attendance described the meeting as tense between lawmakers and corrections officials.

Once this story broke in the media, Alpine made the necessary back wage payments to the inmate workers – but continues to owe the state for delinquent lease payments and NDOC staff salaries.  One Assemblyman asked the Deputy Director if the state had paid those salaries, and if so had Alpine repaid the outstanding wages.  The response was a half-truth, with Connett responding, “The back wages have all been paid.”  In fact those wages are part of the total $415,000 owed by Alpine.  The wages already paid are those owed to inmate workers – not NDOC staffers, which remain outstanding.

At times lawmakers displayed exasperation as they attempted to extract factual answers from Cox and Connett, who had difficulty answering direct questions related to prison industry operations; failing industry programs, financial losses and low cost leases of public facilities to private companies.

Cox and Connett were even less open about the situation involving Alpine Steel’s use of inmate labor to compete against other businesses in Southern Nevada, or the huge sum owed by Alpine to the NDOC for back lease and DOC staff payments.

Though lawmakers voiced concerns of the impact upon workers in the private sector and competing businesses, Cox and Connett did not seem to share those concerns, instead advocating that inmates need training while incarcerated to help reduce recidivism.  The irony of turning prisoner training over to a company with a history of questionable business practices - IRS tax liens ($668,000+), $415,000 in back lease and DOC staff salary obligations, unpaid state taxes (new Nevada Dept. of Taxation lien for $37,000 filed within the past month against Alpine’s owner, Randy Bulloch), lawsuits for money owed to creditors (F&M Steel and Pierce Aluminum) and is in litigation over unpaid worker’s compensation claims ($84,716 owed to Explorer Insurance Co.) – was apparently lost on Director Cox.

After all the controversy, debt owed to the state and concerns of both Nevada’s organized labor, workers and private businesses, Cox appeared openly insensitive to both issues by advising Committee members if Alpine’s business picked up, he would reopen the metal fabrication shop at High Desert State Prison to the company! This is indicative of a bureaucrat who genuinely believes he can make such decisions without consulting higher government or legislative authorities.

The general attitude of both was that inmate training was more important than the possible loss of jobs to Nevada’s unemployed steel workers, the potential for lost tax dollars or the impact upon businesses competing with Alpine Steel – or any of the half dozen other companies operating under joint venture contracts with Silver State Industries.

At one point Connett indicated that some of those complaining had been offered a chance to “partner” with the prison industry and had declined, seeming to suggest those businesses shared responsibility for any damage resulting from competition from prison industry operations…because they didn’t take him up on the offer.

Some answers provided to the Committee were enlightening, if incomplete.  Director Cox stated,”the cold hard facts are now that we have to aggressively look at what industries are not turning a profit.”

In addition to losses sustained by prison industry operations, the administrative office is operating in the red ($165,000+ over past two years), the industries’ furniture and metal, auto, upholstery and drapery shops have lost hundreds of thousands of dollars during the past few years.  Collectively Silver State Industries lost $81,597 in 2011 and $237,793 last year overall.

In 2010 the prison industries turned over more than $800,000 in accounts receivable to a collection agency and currently SSI’s past due AR account is in excess of $600,000.  In the budget discussion it was disclosed that the prison industry arm of the NDOC had a reserve fund of $1.5 million which due to continuous losses has been reduced to half a million.  If forced to absorb Alpine’s debt, the reserve fund will be exhausted.

In response to the dwindling reserve, Assemblyman David Bobzien, D-Reno voiced concern that when that reserve is exhausted, the prison industry would begin to dip into the general revenue fund, saying, “This is a clear track into the dirt, and without substantial retooling, it’ll be in the hole”

Bobzien and Assemblyman Michael Sprinkle, D-Sparks, questioned Cox about whether industry programs would be cut and what the department would do to get its industry program on a sustainable track.

Cox said he’s “very pessimistic” about future revenues and that “when resources go, of course programs will go.”  They were unable to get Cox to provide them with definitive responses or propose solutions to cure the industry’s financial woes.

“It appears that at some point the reserves are going to run out, but in the meantime, it’s a loss-loss across the state,” Assembly Speaker Marilyn Kirkpatrick, D-North Las Vegas, said, weighing in.

Kirkpatrick also had difficulty getting straight answers to some of her questions on business management issues and as to whether the prison industry program is really about training or rather a work program, putting inmates to work for privately owned companies at the expense of non-inmate workers.

In supporting the prison industry operations, Connett pointed to the “Big House Chopper” program.  An industry created by Howard Skolnik when he was in Connett’s position.  While using that program as an indicator of the work inmates were capable of and alluding that this industry was successful, he failed to advise the Committee thathe closed that program two years previously:

“Mr. Magnani said some time ago the motorcycle production was shut down, there was some motorcycles that Prison Industries was attempting to sell online. Mr. Magnani requested an update to the status of the built motorcycles. Mr. Connett informed the Committee that three motorcycles were for sale. Prison Industries was looking at reducing the price based on the current market. The motorcycle operation has been discontinued.”

Prison Industries manufactured a total of five motorcycles.  Two of those were sold in a “sweetheart deal” to one of Connett’s other prison industry companies, Thomson Equipment.  Despite vigorous advertising on eBay and other outlets, the remaining three have now sat for several years without any interest shown by potential buyers.  Another example of funds wasted to advance a prison project that has eaten away at the profits generated by other industries – both in dollars spent for materials as well as advertising.

Clearly referring to the motorcycle industry, the Deputy Director exhibited these half-truths to the Ways and Means Committee in an attempt to justify the need and usefulness of continued “training” of prisoners – whether the industry providing the training is viable or not.  In the case of Big House Choppers, it is long gone.

Examinations of the financial statement(s) for SSI for 2011-12 reflect that traditional prison industries such as farming, ranching, license plates, prison garment(s) and printing were all profitable.  It is the industries operating in partnership with private companies that are failing; metal shop (Alpine), drapery, automotive and upholstery for example.

Not only are these failing industries losing money, they are the ones negatively impacting upon private workers, potential workers and suppressing expansion of competing Nevada businesses.  These are also the industries that have been receiving substantial tax and lease benefits that are denied to competing businesses, resulting in an unfair advantage.  Companies using inmate labor do not appear to be paying Nevada’s Modified Business Tax, which further depletes the tax base while increasing potential corporate profits and disadvantaging their competitors.

Another issue of contention was the lease agreement between SSI and Alpine.  In 2011 Alpine was in arrears yet Connett authorized a lease contract that provided 19,000 square feet of manufacturing space at the unbelievable rate of $.26 cents per square foot ($5,000 per month).  The Nevada average for such space has been depressed due to the recession, but is currently at $.68 cents per square foot.  For the same square footage a private company would pay $12,990 per month in the “free world.”  This saved Alpine as much as $95,000 a year in operating expenses.  Assemblyman Bobzien called the Alpine lease an “unfair subsidy”.  There was no question as to how many of the other companies partnered with SSI were receiving similar low cost leases.

All of the losses described above, lead to more than an “appearance” of total mismanagement.  It is assumed that Greg Cox was chosen as the Director of the NDOC based upon an ongoing career in corrections.  He wasn’t chosen for his business acumen.  Putting him in charge of overseeing contracts, leasing arrangements and other commercial business decisions appears to be well outside his expertise.  Between them, Cox and Connett have made decisions that have negatively impacted taxpayers, private businesses and Nevada’s workers – yet when called before a legislative body to explain those decisions, they exhibited their lack of actual knowledge and experience in business practices.  Making matters worse they demonstrated they were willing to blunder through and by making statements claiming they would reopen the prison metal industry to Alpine Steel…and claiming Alpine Steel deserved a lower lease rate because of the difficulties of getting materials in and out of the prison and transportation logistics.

Again it needs to be said that those are matters for someone higher along the government chain to consider and make the final decision on.  It is unrealistic to allow a Deputy Director or Director to enter into binding contracts and leases that reduce the revenue streams from leasing state owned property or facilities.  It is also unrealistic to give Cox or Connett the authority to waive payments owed for leases, salaries or materials owed to the state.  By assuming these duties, these bureaucrats were gambling with taxpayer money, betting on Alpine Steel and similar companies to ultimately become viable and repay debts owed – debts they allowed to accrue and are now having difficulty justifying.  All can now see they lost that wager, with Alpine Steel and other companies owing NDOC more than $600,000 collectively.

In the public discussion period following the questioning of Cox and Connett, Danny Thompson, executive secretary treasurer of the Nevada AFL-CIO discussed the impact upon non-inmate workers on the outside from contracts such as that between SSI and Alpine.  He brought up the issue of safety to Nevada citizens that travel over or under a bridge spanning Interstate 15 that was constructed using prisoners in a “training program”. He said Alpine Steel produced steel girders for the construction project at the North Fifth Street Bridge in North Las Vegas and he questioned whether strict certification requirements for such projects were complied with in the training of inmate workers.

Thompson also called into question whether the materials used in the project met strict industry, state and federal specifications as to stress, weight and other factors involving materials used in the project – and wanted to know if inspections were conducted properly.  He also expressed concerns over the Wet ‘N’ Wild theme park project where Alpine was the structural steel contractor, saying he worried about the safety of children and families who would be visiting the park where inmates in training made many of the steel components.

A member of the Iron Workers Union, Local 433, Robert Conway also spoke, stating he had three hundred and fifty qualified iron workers without jobs, while the state was helping provide inmate welders for Alpine at wages far below the prevailing wage.  He also voiced concerns over the safety issues raised by allowing inmate steel workers to fabricate steel components used in public projects.

In response to criticism from Committee members and the public, Alpine owner, Randy Bulloch appeared via teleconference from Las Vegas and issued a statement in response to Thompson’s concerns, claiming that inmate workers were in fact certified as required.  He denied the use of structural steel components manufactured by Alpine in the bridge project and added that he had copies of material inspections and specs.  Bulloch spoke about his company in general terms but made no effort to defend the use of prison labor in the manufacture of structural steel used in his business.  It should be noted that Alpine Steel makes no mention on their website of the use of prison labor in manufacturing steel components, or that the company is involved in helping train prisoners.  That factoid is noticeably absent – as it is with TJ Wholesale and Jacob’s Trading, two other companies partnered with SSI and leasing facilities from the NDOC.

What wasn’t posed to Connett and Cox in the questioning by the Assembly Committee was the issue of a potential conflict of interest involving Nevada’s prison industry and compliance oversight.

The trade group,National Correctional Industries Association (NCIA) provides oversight over all prison industries in the U.S. and of late, internationally.  The NCIA does this under a grant from the Bureau of Justice Assistance.

This trade group advocates and lobbies on behalf of companies, corporations and organizations involved in prison industry operations, supplying those operations or benefiting from the labor of inmates.  Connett is currently serving as the Chairman of the NCIA and thus able to make determinations as to whether his actions and thus SSI are in compliance with prevailing laws.

This trade group advocates and lobbies on behalf of companies, corporations and organizations involved in prison industry operations, supplying those operations or benefiting from the labor of inmates.  Connett is currently serving as the  and thus able to make determinations as to whether his actions and thus SSI are in compliance with prevailing laws.

Many of the questions posed to Cox and Connett by the Committee members arose due to a comprehensive study I conducted for the non-profit Voters Legislative Transparency Project(VLTP) organization. As Executive Director with an interest in prison industries, I have been involved in researching and investigating prison industry programs for more than a decade.  In January VLTP submitted the studyof Nevada’s prison industries to members of the Nevada legislature, Governor Sandoval, AG Masto and Secretary of State, Ross Miller.

In that report many of the deficiencies and issues discussed Friday were presented along with documentation supporting the conclusions and recommendations made.  The questions posed by Committee members indicates they had all read the study and wanted answers to the questions raised by the research.

One observation made during the research phase of compiling the study, is that it appears that Cox, Connett and the NDOC are attempting to run the state department of corrections as a “business” rather than a state agency.  Partnering with businessmen and women who deal daily in matters of profit/loss and market share, the NDOC is woefully unprepared, as the accounts receivable and low-cost lease to Alpine demonstrate.  Director Cox, Connett and the NDOC seem not to understand that any losses arising from these partnerships between SSI and private companies are ultimately borne by Nevada’s taxpayers.  This already happened in 2010 when Cox’s predecessor, Howard Skolnik applied for a Supplemental appropriation from the Legislature due to losses incurred from recession and reductions in prison industry income.

With more than a million in uncollected debt since 2010 and lost streams of revenue due to sub-par leases, industries losing hundreds of thousands of dollars annually, the NDOC is being critically mismanaged.  As a state agency, it is the taxpayer who will be left making up the lost revenue from this lack of management.

One recommendation made directly to the Governor was that Nevada adopts the in-place mandatory guidelines of the Prison Industries Enhancement Certification Program (Pie Program).  This program allows joint ventures between private companies and state prison industries.  It provides a way for private enterprise to have access to inmate labor and to distribute products across state lines, sell to the U.S. government in amounts exceeding $10,000 and to sell those goods in consumer markets.

The Pie Program has nine mandatory requirements and four of those developed by Congress for this program include:

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.

Non-inmate worker displacement. Written 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.

Consultation with organized labor. Written proof of consultation with organized labor prior to program startup.

Consultation with local private industry. Written proof of consultation with local private industry prior to program startup.

Nevada is already participating in this program and has Pie Program operations running in the prison industry.  Those businesses appear to be operating without financial losses to the state or SSI, in compliance with the mandatory requirements and thus, not exhibiting any of the problems the non-Pie Program involving Alpine is.

Adopting these regulations would ensure consultation with competing businesses, labor groups, and unions ensuring inmates are paid the required prevailing wage.  Since the NDOC deducts 24.5% of the gross wages paid to inmate workers, the amount taken through this deduction would increase and those funds would be used to offset the costs of incarceration. Combine adopting these guidelines with genuine oversight provided by the Nevada Board of Prison Commissioners, chaired by Governor Sandoval and I believe this is a solution to the existing problems experienced by the NDOC.

Continuing to allow a private non-profit trade association to oversee the state’s prison industries in the face of the controversy that has erupted while they had such oversight duties, is asking for more trouble.  As the head of the NCIA Connett has demonstrated he lacks the desire to enforce compliance and he is willing to put the interests of that organization above his responsibilities to the state.

News Service of Florida: 5 Questions for Jim McDonough

by Margie Menzel, The News Service of Florida 

The below article containing the responses of former Florida Department of Corrections Secretary, Jim McDonough was published today.

Secretary McDonough answered tough questions about Governor Rick Scott's continuing pursuit of privatization of everything "Prison" in Florida...

__________________________________

James R. McDonough was the secretary of the Florida Department of Corrections from 2006 to 2008. He was tapped by Gov. Jeb Bush, for whom he'd worked as Florida's drug czar since 1999. McDonough moved to DOC after Bush fired Secretary James Crosby, who later went to prison for taking kickbacks.

His no-nonsense style proved the antidote to scandal at DOC. He fired or demoted dozens of prison officials and instituted random drug tests and mandatory fitness programs for employees. He angered many, but is widely credited for cleaning up the place.

Since leaving DOC, McDonough has stayed active in corrections. He's involved with the "smart justice" movement to cut recidivism via substance abuse and mental health treatment and basic education for prisoners. He also favors diversion programs and other reforms, and is comfortable sailing against the political winds.

"Politics in Florida has been such that public officials are afraid to appear, quote, weak on crime," he said. "And the way that's defined is, 'Don't lighten up on the sentencing in any way whatsoever.'"

A retired Army colonel, McDonough has won three Bronze Stars and a Purple Heart. He's written three books: "Platoon Leader;" "The Defense of Hill 781;" and "The Limits of Glory."

The News Service of Florida has five questions for Jim McDonough:

Q: Privatization is a big part of Gov. Rick Scott's approach to cutting prison costs. Agree or disagree?

McDONOUGH: I don't agree. There are some things government has to do. If you're going to be incarcerating its citizens, that's a state function, not a for-profit function. Right away, you have problems when you take that approach.

I think Florida became a very lucrative state to market private prison systems and the services that came with it. The medical issue, I think, is tied in with all of that. If the state is going to arrest people and put them behind bars, it picks up the obligation to look after their health – and not market that out to the most attractive bidder, which usually means the lowest bidder.

I'm not surprised Florida became such a target for the private companies. It's a huge market, and became, on the surface, an attractive way to go.

Now, in my opinion, it's the obligation of the state. I think if it becomes the obligation of the state, it'll be justly met. But if you turn it into an enterprise, with commercial profits involved, it's a risky business.

Q: The backers of private prisons argue they're more efficient than state prisons. True?

McDONOUGH: In my time as head of the corrections system of Florida, I considered it my obligation to look into the housing of all of the inmates, whether they were cared for by the state or the private prisons.

Clearly there was an effort to send to the privates the easier inmates to handle. That meant that you don’t have the more misbehaving inmates or the more dangerous inmates or the more medically ill inmates going to the privates. So for the privates, that becomes an advantage. If you're not working overtime to take care of all of that, and spending the money, then the overall outcome appears to be less expensive.

But it's not. When [private prisons] grow and take increasing percentages of the inmates, they get the ill as well as the well. They get the violent as well as the non-violent. They get the dangerous as well as the stable, and so on. So I always thought that the selling point that it could be done at a percent less than it cost the state to care for an inmate was absolutely skewed data.

One of their prime conceptions was to hire employees at the lowest possible wage level. I thought that meant there was not as careful a pick of who was going to work in the system. And my observation, going into the prisons, was that was political. And that meant, therefore, that the discipline, the behavior, the control within the privates were not up to the standards they should have been.

Q: You backed a bill last session to allow non-violent, drug-addicted inmates to move from prison to treatment programs after serving half their time. Why did it fail?

McDONOUGH: I continue to see some well-respected law enforcement officials arguing that any questioning of [current sentencing guidelines] proves there's a lack of understanding of the seriousness of crime. I think that's nonsense.

The Legislature, which is largely Republican, passed it. Not only did they pass it, it passed with overwhelming numbers. So there you had a good idea, a good bill, tremendous political support. And then you had shrill voices saying, "Oh, no, no, no...We shouldn't do this, because it'll be weak on crime."

And lo and behold, the governor vetoed it. It was an unbelievable instance of a lost opportunity, of playing to this over-inflated, get-tough-on-crime mystique.

Q: But hasn't the crime rate been going down? Doesn't that suggest getting tougher works?

McDONOUGH: Yes, when you get tougher on crime and you get a very violent criminal who's on a crime spree and can't change his behavior, incarcerating that guy and keeping him a long time does have an effect on public safety. I'm all for that.

But it's like a pendulum swinging. If you go too far, it's going to crash back of its own weight. The crash-back we have seen, by incorporating everybody into these policies and laws that lead to more time in prison.

It's just too expensive. You have caught up in this pendulum swing a lot of people who would not be doing damage on the outside, and who – with a little bit of money invested in their rehabilitation – would probably do quite well.

Q: Florida was just cited for a 166 percent increase in the average sentence between 1990 and 2009 – the most of any state. Other states have dialed back their sentences. Why not Florida?

McDONOUGH: Other states that are conservative in their political structure, like Texas, actually have gone the other way. They've really flattened out their prison growth. They've saved hundreds of millions of dollars on prison construction, and they have seen crime decrease.

So the examples are out there. Florida is sort of a holdout, on an idea that has seen its day, served a purpose for a bit, but now has gone too far. I'd like to see Florida come into the modern age a bit, and come up with smart justice approaches. 

DK's Exposing ALEC & Protest ALEC efforts pay off big time this week!

As most Progressives are now aware there has been a huge development this week concerning the American Legislative Exchange Council (ALEC). On Monday In These Times (ITT) published an in-depth and well written article by Beau Hodai on ALEC - "Publicopoly Exposed". There were links provided by Hodai to some of the Model Legislation ALEC had developed over the years.

While readers were still devouring this expose, The Nation announced a full court media blitz upon ALEC on Wednesday with a series of articles by their top political journalists such as John Nichols, their Washington Correspondent. A simultaneous announcement from the Center for Media and Democracy (CMD) that they had launched an "ALEC Exposed" site consisting of research, facts, articles and links to The Nation's ALEC articles, various other sites and materials all about ALEC. The announcement provided that the site was dedicated for the use by professional journalists, progressive writers, bloggers and every citizen interested in democracy. CMD sponsored a webinar for journalists and those who were already involved in the articles and document dump as their ALEC Exposed site when active. On Thursday's show, Ed Schultz had Lisa Graves from CMD and John Nichols of The Nation on and talked at length about ALEC and their Model legislation (no video file available yet). Yesterday DBA Press released: “Legislative Laundry:” Investigative report on the mechanics of the ALEC scholarship fund" and hundreds of articles were similarly spun off into the WebSphere from all of the above.

At the core of the "ALEC Exposed" site is a section filled entirely with more than 800 of ALEC's Model Legislation, mostly with innocuous sounding titles, described as "Acts" and "Resolutions" and bearing "copyright by ALEC" somewhere within each document. What most are unaware of is that members of "Exposing ALEC" - formed right here on Daily Kos - were responsible for acquisition of the complete ALEC Model Legislation library.

For reasons of security and concerns about push-back from ALEC and their members, the name of the two groups involved - Exposing ALEC and Protest Alec.org - were not released or mentioned prominently in the articles. The Nation and CMD referred to their acquisition of the documents as having come from a whistleblower through "an Activist Group." In this situation - as in most instances involving the release of high profile and damaging materials showing corruption - the name(s) of whistleblowers need to be kept secret when the information they provided becomes public. Because of this necessary protective need, the names of everyone involved in acquisition of the ALEC materials has been kept low profile in the news.

What I can say, without identifying any one person, is that great courage was shown by the whistleblower that contacted one of our protesters (A Kossack) in Cincy with a willingness to turn over everything to those of us marching and trying to bring ALEC into the light of day. The whistleblower saw the speeches, a march and "Teach-Ins" where anyone could stop by and learn about ALEC and their impact upon our democracy and specifically manipulation of the laws implemented there in Ohio and elsewhere. I'm told by a source that once others were seen to be speaking out and trying to stop this madness of boilerplate legislation to advance ideology, the decision was made to step up and help us save democracy...and the wealth of documents were the outcome.

Rumors abounded since the Cincy rally about these important documents from ALEC and whether they existed or not. We now know they did but were kept under wraps while stories were written, the documents studied one by one by media and political experts, looking and comparing these legislative documents from ALEC against current and past state proposed legislation and actual laws that have been passed in states such as Wisconsin, Ohio, Florida, Michigan and Indiana.

The comparisons revealed that much of the anti-union and voter disenfranchisement legislation ongoing now in many states tracks back to ALEC and their corporate members. In addition research found many corporate funded or linked outfits like Heritage Foundation, CATO Institute, Heartland Institute and their founders or funders of those entities like Charles and David Koch are also members of ALEC and their representatives hold seats upon ALEC's Private Enterprise Board.

As most know, I have been working on issues involving prison industries, exploitation of prison labor, privatization and immigration legislation for more than 8 years now and counting. Once I discovered the money trail on exploitation of prisoner's labor led to and then through ALEC, I began to crunch my research, expanding it from the limited scope of prison related issues and looking at the wide assortment of other issues ALEC was also involved in. When I had a firm grasp of what was going on and how insidious this "organization" is, I began trying to expose them to the public through my website, a blog on Blogger and couldn't generate the interest I wanted on these important issues. I contacted Maddow, Olbermann AG Holder, President Obama and wrote and sent in an article to The Nation. None of these efforts paid off, no one it seemed knew about ALEC, their involvement in increasing prison populations, or issuing their Model legislation state by state to allow corporate members and affiliated companies access to those prisoners as a slave labor workforce.

So I brought the issues here to DK back in November of last year in the first segment of my Corporatocracy series. I immediately began to receive questions from other Kossacks about these corporations and ALEC. Since that day I posted no less than 83 subsequent diaries on these issues and most of them referred to ALEC and their activities involving prison issues. I was not the first to raise the flag of warning about ALEC, there have been others. The first ALEC "tag" was in 2006, though they weren't mentioned in the diary. In the 4 years between that original use of the ALEC tag here at DK and my first use of it in Corporatocracy, there were a total of 9 other uses of the tag. Today I checked and the count for ALEC tags on DK now stands at 483! This is not my trying to be egotistical, rather pointing out - as you'll see below - the power of Daily Kos when Progressives pay attention to important issues and begin to spread the word across the vast internet. I had been writing and blowing whistles, horns, throwing rocks at my Representative and others every chance I got from 2003 through my first posting to DK in 2010 mentioned above. Seven years passed as ALEC continued to eat away at our democracy from the inside, unnoticed and without challenge or question as state by state enacted their corporate friendly legislation.

Once the word - and call for attention to and help on exposing ALEC - came to DK last year Kossacks reacted! You came together and analyzed the issues and problems. We looked for ways to spread the word about their existence, their agenda, their ideology, their members, their Model bills and in general every aspect of ALEC was put under a microscope by one Kossack or another. All the time this analysis was going on more and more came together and began lending their insight and assistance, helping dissect ALEC and how to stop them, while we looked we kept writing and waving to others to come and take a look at what we'd found...urging them to take part and write about them also and help spread the word. MNDem999 put hours into compiling a list of corporations, legislative members - past and present - alumni and other information about ALEC and posted it here for others to use as a reference.

In my diaries in March I began asking others in the comment section if they thought a protest against ALEC at their Spring Summit in Cincy was a good idea. Many Kossacks responded with responses of "Hell yes!" and "I'll be there!" and before I knew it others joined their voices to ours and by the end of March students and others in Ohio put their time and effort into organizing and the thought grew into reality as more and more joined us and agreed to come to Cincy from other states and take part in "Exposing ALEC". One of the Organizers (and possibly more) ManfromMiddletown put together a group here on DK with that title and on April 29th all of us involved here at DK and union members, students from Ohio, Indiana, Louisiana and possibly more showed up. A Huff Post documentary producer sent a cameraman down to interview activists, film the march, teach-ins and Rally on the Square. Many from all walks of life, social and work classes attended and helped us make the rally a success.

April 29th, 2011 is going to have to be a date that will be remembered as an historic event - not only for it being the first public acknowledgment of ALEC's existence and open protest against them - but because though it was the first protest...it also produced the environment that allowed the whistleblower to come forward, hand extended - with all of ALEC's secret materials handed over! So it was not simply the first protest - historic enough - it was the beginning of the end for ALEC.

This week another truly historic event in the history of American politics, that will be remembered as a part of American history occurred with the release of the full "menu" of right wing ideology and agenda to the public. This historic release providing us a look into the dark recesses of a corrupt right wing organization with an agenda of despoiling legislation as we know it, will probably be written and heretofore referred to as "ALEC-gate" in future conversations and publications.

This past week and the eruption of material being released, the viral spread of that information across the country by progressives and others of different political affiliations, has kept myself and most of the Exposing ALEC Group busier than a one legged man in an ass kicking contest (and you know who that ass belongs to) so this is the first opportunity I've had to report about the events since Cincy and upon the ALEC Exposed site set up by CMD and The Nation. There is so much more news, but much of it still is being kept under wraps for the time being. This is not going to be a one-time flash upon the political landscape that draws attention which wanes as the brightness dissipates...this is going to stay in the headlines possibly through the 2012 election. It has to when we realize that two of the Republican candidates in that election for President of the United States are affiliated with ALEC. Newt Gingrich is an ALEC Alumni and Herman Caine a bobble-headed lackey who has spoken on behalf of ALEC and at some of their event activities - and proudly uploaded by ALEC to YouTube (if you have the stomach to watch them, they're available there). So not only is ALEC deeply involved in thoroughly corrupting the General Assemblies of each and every state in the country, they have two of their most powerful Alumni sitting at the head of the U.S. House of Representatives. Republican Majority Leader, Eric Cantor (you know, the one who stands to make tens of millions of dollars if the American economy collapses by his investment in betting that will happen) and House Speaker, John Boehner who continues to refuse to budge on repealing any tax loopholes for the rich.

I have to put that into proper context so everyone understands how important it is to abolish this cabal now that it has been exposed: 2,000 plus Legislators - fully one third of all U.S. state lawmakers - are members of ALEC. The top Republicans in our U.S. Congress are Alumni of ALEC and two of the Presidential Republican Candidates are either ALEC Alum or are closely affiliated with ALEC. To me this demonstrates that ALEC and the corporate elite see themselves on the cusp of realizing total control of the White House, U.S. Congress and control of a majority of state General Assemblies and state Governorship. This is simply too damn important to downplay or ignore and pass of as not possible, as Gingrich and Caine don't have a chance of winning. My answer to those with that attitude is that in every national election cycle the front runners going into the primaries are usually not those who come out as a clear winner. If Gingrich or Caine manage to prevail at that level...ALEC will be only one step away from realizing their dream. Just think about that for a moment as you read through the vast documents at ALEC Exposed.

We at Exposing ALEC and other Kossacks have done our part and will continue to work overtime to put an end to ALEC and their aspirations to control us and our country. Now we need you to step-up and lend us your voice and and assistance. Spread the word and keep doing so, until the MSM is forced to pick this up and report on it, join us in New Orleans or donate to the Protest Alec event we're holding on August 5th in New Orleans. Many of us are traveling down there and will need housing, travel and other assistance with organizing, permits, posters, protest signs, handouts and much more. We are going up against the most powerful and influential in this country and we're doing it on a shoestring against those with Koch money and influence behind them. Help us make our voices and message as loud as theirs. There is a "Donate" button right there on the right at the Protest webpage...please click on it and help us stop this vile feces in their tracks - once and for all.

Stay tuned for further updates and again accept my apologies for keeping a couple of hundred followers hanging without a diary for so long. As this diary indicates, we have all been very, very busy on making this happen and working toward the August Protest. There is more news available, but simply no time or security issues prevent it from being put out here. Just stay with us as this moves along and I promise, the prison issues on imprisonment, prison labor and privatization that led me to ALEC and the exposure of ALEC this week is in the works and you'll be able to read about it soon in a national forum.

4:27 PM PT: Here is a link to the Ed Schultz segment on ALEC, provided by shantysue. Kudos:

Visit msnbc.com for breaking news, world news, and news about the economy

8:17 PM PT: You know since this has become public ALEC continues to say they take no part in state or national legislation.  You have to see this video about ALEC's proposed Healthcare initiative legislation in CO:

Exposing ALEC - ALEC Exposed Democracy Now Video Exposes Koch Influence upon AMERICA!

This is a short diary but of utmost importance as Lisa Graves, Executive Director for Center for Media and Democracy diagrams the involvement of the Koch brother's impact upon all facets of American industry, education, health, jobs, unions and resources - through the American Legislative Exchange Council (ALEC).

There is little I can add to what you'll learn from Lisa in this video interview. It is also important that this interview by Democracy Now was an interview given by Lisa from Madison Wisconsin, where this exposure of ALEC exploded through the manipulations of ALEC Alum, Governor Scott Walker earlier this year when he pushed the Koch agenda through Model Legislation introduced and passed by other ALEC members within the Wisconsin General Assembly. Now all of us can understand the impact of the walkout by the Wisconsin Democrats - and why it was so important for them to do so in an attempt to stifle this stranglehold upon us by ALEC and their Koch corporate masters.

Kudos to those brave legislators in Wisconsin and Indiana who fled their states to prevent the implementation of the Koch agenda upon their constituents. If not for their courageous actions back then, it could be far worse and possibly the whistleblower who turned over the ALEC documents to members of Exposing ALEC in April might not have come forward. As I said in my last diary, the Anti-ALEC Protest in Cincinnati on April 29th, 2011 will forever be a moment in our country's history that will be remembered as the day Americans began to wrest their country and government away from the likes of Charles and David Koch and their huge insidious empire. The real power behind ALEC...

Watch, save and spread this video across the nation and the world, Kossacks. This is what you helped expose and bring to the light of day. Make this the mark of what Progressives can do when they put their mind to it and come together to say, "Hell no, you can't!"



If that doesn't describe a clear picture of a democracy on the edge, I'll kiss Ol' Chucky and Davy Boy's asses! What is described in this interview by Lisa Graves has been seen in world history before in countries such as Italy, Spain, Germany just to name those not associated with S. America. None of those events of the past turned out well, and now we're faced with it here at home - eating away at America and democracy from within, like some unstoppable terminal disease.

Many have asked how you can help or become involved in assisting us to clean the political landscape of this vermin and their ilk. We at Exposing ALEC have a couple of suggestions: 1) send an email to or pick up the phone and call your state Representatives. Ask them point blank, "Are you a member of the American Legislative Exchange Council? If they are not, ask them to please help us call out those who are. Keep in mind that there are some Dem's who are also members of ALEC, such as Rep. Peggy Welch here in my home state of Indiana. Just because your Rep is a Dem does not mean they are not an ALEC member.

If the Rep responds with a "Yes" answer - regardless if it's followed by disclaimers like, "I'm an affiliate"...or "I'm a member but not active," tell them they should be ashamed for introducing ALEC's pro-corporate model legislation. Call them out and then pass along the information to us here at Exposing ALEC so we can add them to our list.

2) Write or call your local paper about ALEC and their secretive agenda. Ask them to look closely at any legislation proposed by ALEC Representatives in your state to see if oppressive laws proposed by those members are possibly cut and paste Model Legislation supplied to lawmakers by ALEC. Ask your local media to examine the use of public and private funding used to pay for membership of ALEC members, their travel and expenses to and from ALEC events.

3) When you go shopping, avoid buying products made by Coca-Cola, Kraft Foods or Georgia Pacific (Koch). Each of these companies have seats on ALEC's Private Enterprise Board and are responsible for voting "Yea" on Voter ID, privatization, healthcare, ending collective bargaining and other initiatives harmful to our society and the communities where we live and work. Send them the same message: "Hell no, You CAN'T!"

4) Help make the Protest against ALEC in New Orleans on August 5th a huge success and trap ALEC's members inside a self-imposed jail at the Marriott! Continue to donate to the event, add your moral support to those making huge time and personal contributions to this effort. You can help! Visit Protestalec.org and see what you can do to assist us.

It really is that simple and from your home or office you can assist in bringing this horrid chapter in American democracy to an end. Knowledge is what we continue to seek to stop this cabal in it's tracks. For you readers who wonder why I continuously refer to ALEC and their members, corporate benefactors and major contributors as a "Cabal", please read this definition of a Cabal from Wikipedia - that pretty much says it all after watching the Lisa Graves video above:

"A cabal is a group of people united in some close design together, usually to promote their private views and/or interests in a church, state, or other community, often by intrigue. Cabals are sometimes secret societies composed of a few designing persons, and at other times are manifestations of emergent behavior in society or governance on the part of a community of persons who have well established public affiliation or kinship. The term can also be used to refer to the designs of such persons or to the practical consequences of their emergent behavior, and also holds a general meaning of intrigue and conspiracy. The use of this term usually carries strong connotations of shadowy corners, back rooms and insidious influence; a cabal is more evil and selective than, say, a faction, which is simply selfish; because of this negative connotation, few organizations use the term to refer to themselves or their internal subdivisions. Amongst the exceptions is Discordianism, in which the term is used to refer to an identifiable group within the Discordian religion."

Stay tuned as this story continues to evolve and ALEC begins to crumble. They are already scrubbing their site of any reference to the Koch name...legislative members are beginning to deny membership and more and more stories about ALEC's nefarious legislation being passed off as citizen beneficial laws are being discovered. Here is but one story from Tennessee: "Lawmaker used lobbyist template Bill clearing way for online school based on model"

In closing remember what was revealed about Koch and ALEC in the video above and take another look at these charts - depicting merely 1/10th of the "relationships" involving this cabal - (click on the chart to see it at Flikr full size)



This is a chart showing David H. Koch's relationships to conservative organizations, think tanks, individuals and groups:



This last chart is composed of simply one of David H. Koch's "Foundations" (Heritage) and the relationships it has to others...a truly insidious and cancerous blight on America and Democracy itself.



More later as this story continues to wind it's way throughout our society and the political arena...

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