INSOURCING IV – More Profits Through Monopolies...

So to take up where Segment III left off, our prisoner is now incarcerated safely away from society in a state prison that is privatized. Food provided to the inmate is provided by a private food service contractor such as Aramark or Trinity Food Service Group. These corporations receive large chunks of tax dollars to provide food to inmates and are often fined for non-compliance with contract terms.

On the first day of assigned work at the prison industry, the inmate is presented documents to sign. One of the documents is a “voluntary participation document” for PIECP. When asked what this program is, our inmate is informed that if they want to earn as much as minimum wage on some of the products they make, they have to volunteer for this program. That is usually all the information provided to new hires and they sign it.

During the course of employment within the prison industry the inmate works diligently at his assigned tasks, making a myriad assortment of products for a corporation partnered with the prison industry; Boeing, Microsoft, Victoria’s Secret, Starbucks or any one of the hundreds of other corporations operating under the PIECP program.

During the prison term the inmate visits the infirmary on several occasions and his/her account is debited with a $4.00 fee for each visit. Actual medical care and treatment was paid for with tax dollars due under the contract. Medication is provided to the inmate for ailments. The private prison physician orders pills in for the inmate in a dosage that are less than that manufactured by the pharmaceutical provider, so the pills are split under a separate private contract issued by the DOC to another company – such as TYA - to cut the pills in half. This contract is worth about $12 million annually, and paid for with tax dollars.

Successfully completing 85% of the imposed sentence, the inmate prepares to leave prison and return to the community. At this time he is introduced to Prison Fellowship Ministries (PFM). PFM is the largest prisoner reentry program provider in the U.S. They are the recipients of numerous state and federal tax payer grants for reentry assistance and are privately funded through donations. Our inmate is moved to a pre-release dormitory where he will meet with PFM representatives and be “counseled” through a program that is designed to indoctrinate inmates into the Evangelical Christian belief system. In addition the inmate is instructed to secure a surety bond guaranteeing the state that he/she will not violate the terms of post-release supervision he/she will be on until the 15% remainder of sentence (gain time) is finished. The bond will be issued through the American Bail Coalition (mentioned in the previous segment) or one of their agents who will receive from $2,500.00 to $5,000.00 up front from the inmate or his/her family for issuing the bond.

If our inmate is able to provide the money for the bond he/she will be released back to the community. If not, the gain time earned can be revoked and the inmate stay in prison until the sentence is completed in full – day for day.

In the foregoing scenario, our inmate has made thousands of dollars for all of the various corporations involved directly or indirectly with criminal justice. Private U.S. corporations providing food, housing, medical, banking, phone services, commissary, prison industry, bonding - pre-trial and post-release and reentry assistance have all profited from this one inmate’s term of incarceration. In addition other corporations profited; chemical spray manufacturers, construction companies building new prisons, prison staff unions made money from dues paid by the guards, taser manufacturers profited from sales.

The numbers of private corporate hands in the prison industrial complex are staggering. What is more alarming is the fact that many of those corporations and individuals involved are all affiliated with the American Legislative Exchange Council. They sit upon the board of ALEC’s nine Task Forces and “assist our lawmakers” in developing new laws and to increase the penalties for existing criminal violations. They work diligently to increase privatization of anything governmental – especially those duties involving incarceration.

One side effect of all this is the impact upon private sector jobs displaced by more and more manufacturing moving into prison industries. State correctional authorities that operate prison industries openly advertise the benefits of partnerships between private companies and prison industries by advising prospective partners that using prison labor allows them to label their products as “Made In The U.S.A.” and provides a workforce that requires no payment of benefits, are always on time and do not miss work due to family problems.

ALEC and their corporate benefactors and members receive invaluable assistance in their efforts of taking jobs from the private sector and replacing those positions with prisoners. One of the tools that assist them is the Correctional Industries Association. This Association is similar to the National Correctional Industries Association. A brief look at their Resolution on the Fair Labor Standards Act demonstrates their goal of reducing prison labor wages to benefit corporate profits and eliminate any inmate attempts of being considered employees or receiving fair wages for their work. You might wonder who is behind an Association such as this – well many of the same ones behind the NCIA:

• AMERICAN JAIL ASSOCIATION /JAIL INDUSTRIES ASSOCIATION,
• CORRECTIONAL INDUSTRIES ASSOCIATION /BUREAU OF JUSTICE ASSISTANCE PIE CLEARINGHOUSE,
• NATIONAL CRIMINAL JUSTICE REFERENCE SERVICE,
• NATIONAL INSTITUTE OF JUSTICE,
• BUREAU OF JUSTICE ASSISTANCE (BJA),
• INSTITUTE FOR LAW AND JUSTICE,
• NATIONAL INSTITUTE OF CORRECTIONS INFORMATION CENTER,
• CO OFFICE OF CORRECTIONAL JOB TRAINING AND PLACEMENT,
• BUREAU OF JUSTICE STATISTICS,
• JAIL INDUSTRIES CENTER (BJA),
• NIC NATIONAL ACADEMY OF CORRECTIONS,
• PIE COORDINATOR CORRECTIONAL INDUSTRIES ASSOCIATION.

The only names missing from the foregoing list are ALEC and their members; Prison Fellowship Ministries and the American Bail Coalition to make the picture complete.

With the Bureau of Justice Assistance’s authority to operate and oversee PIECP and prison industry operations and their involvement with the CIA and NCIA that make every effort to avoid paying inmates prevailing wages as required by PIECP, corporations make more money. Incentive is provided for even more corporations to choose to join them and avoid paying private sector wages when they can use inmate labor and save as much as 80% of the typical private sector hourly wage. The situation is made worse by the fact the BJA outsourced all oversight and operational duties assigned to them by the DOJ, to the NCIA.

As demonstrated by this series, Insourcing, we have been made aware of the vast amount of public funding that is being paid to private corporations involved in every phase of our judicial system – state and federal. From arrest through release these corporate interests are represented and rewarded with your tax dollars. To increase profits, they also have worked out a system whereby inmate families and friends contribute to their bottom line by sending money to inmates that is used to pay for banking, phone calls, medical and dental treatments, purchase of personal items by the inmate and finally, bonding to assure state authorities that inmate will not reoffend (this has become law in two U.S. states) and is being introduced in as many as 32 others this year.

Religious groups have discovered the tax dollars available for programs related to incarceration and have found ways to profit from incarceration (Prison Fellowship Ministries) and now want to further profit by establishing Christian prisons in Texas and again in Oklahoma and again in Oklahoma, staffed by Christians only and with inmates who “volunteer” to be housed there and ministered to daily in Evangelical theories and matters. These Christian facilities will also have prison industries upon the grounds where the Christian inmates will work for federal minimum wage. Of course these Christian prisons will be funded with our tax dollars and because the facilities will be operated by a Church organization, their income will be tax exempt – as are existing operations like those operated by Prison Fellowship. If/when these Evangelical Christian groups manage to establish and build these prison facilities, the first side effect will be an immediate drop in private sector jobs that will then be given to the inmates for minimum wage scale.

If you think this kind of Christian involvement in prison operation is not possible, you have only to look back to 2001 when one of the first Presidential Executive Orders issued by President Bush in January, 2001 was the establishment of the “White House Offices Of Faith-Based Community Initiatives” (WHOFBCI) in U.S. Government agencies and departments with instructions that staffers of each agency were to assist faith-based groups to cut through red tape and get access to federal tax dollars for community projects – especially ones related to prison incarceration and reentry. There are sites out there now providing instructions to faith-based groups on how to get the most federal tax money for their projects.

All of the acts committed and issues presented by this series have been initiated and helped along by our lawmakers. Without them corporate interests and manipulations of our state and federal laws would not be possible. We would still have many of our private sector jobs, our mortgage “industry” would not have been able to manipulate markets that would eventually collapse from those manipulations. Safeguards and regulations would not have been eliminated or watered down to allow for more profits and less government “interference” in many corporate interests such as banking, investments and insurance rates. All of these contributed to the economic picture we face today and were accomplished by our representatives succumbing to the large contributions provided by the corporations who now own most of them.

The way forward to stop the loss of jobs and more corporate influence in our life and government is to de-elect corporate enablers now in office. Those who vote against the will of their constituents to side with corporate interests have to be voted out of office. In selecting those who would replace the enablers, we must start asking important questions and firmly inform candidates that we are willing to risk one term of office on them and if they also fall under the spell of powerful corporations and special interest organizations such as ALEC, one term is all they’ll get. We all have to ignore the disinformation and mudslinging that accompanies every election cycle now. We must push for truth in campaign runs on the issues important to us and not fall into the trap of arguing about inconsequential issues devised to distract us from genuine positions of the candidates. Nothing will change unless we initiate the changes ourselves.

Political party or affiliations doesn’t matter; if your elected representative demonstrates support for corporate interests over the community’s with his/her voting, replace them until you elect one who votes for your community. Only in this way are we going to bring about reform to replace corporate control with public interests and put our country back in order.
Another action we can take is to force a change in existing prison industry legislation at the state and federal levels that will bring jobs back to our communities and neighbors. PIECP is the current controlling federal law but is being so mismanaged by the Department of Justice that all regulation has disappeared, transferred to the private sector through the NCIA. Letters have to be written to the DOJ demanding that PIECP Guidelines be enforced. Legislative intent of creating a level playing field for private sector and prison industry competition has been circumvented through deregulation and outsourcing of the program to corporate interests. The majority of citizens have been totally unaware of PIECP until recently. They had no idea the program existed and was contributing to their job losses over the past several years. We all have to make others aware of the program and how it is contributing to our lost jobs and income. In this way more pressure can be exerted by the public to reform this program so it no longer represents a cash cow to corporations and ALEC members and lawmakers who profit from it.

If PIECP is run as intended, the advantages now available to corporations would cease. They would have to pay prevailing wages to inmate workers; pay workers comp insurance premiums and would be unable to sell their products on the open markets in the state of manufacture without paying inmate workers even minimum wages. Additionally state prison facilities are funded with your dollars – even if privately operated. The prison industries operated from those prisons are offering their corporate partners cheap leases of as little as a dollar a year for entire manufacturing facilities. These are your facilities, bought and paid for with tax dollars. Every dollar saved by a corporation on these leases are a dollar paid for in subsidy by you and I.

If these modifications to the program are removed, there will be much less incentive for corporations to partner with prison industries and private sector job losses will diminish and some that have been taken will return.

This won’t affect outsourcing, but stopping insourcing is a good first step.

INSOURCING- A new concept about private sector job losses

As I wrote earlier in my Corporatocracy series, Webster is continually having to update their dictionary to keep up with trends and vocabulary indigenous to our new millennium.

Corporatocracy can best be described as: "A type of government in which huge corporations, through bribes, gifts, and the funding of ad campaigns that oppose candidates they don't like, become the driving force behind the executive, judicial and legislative branches".

Alongside this descriptive word and concept, another has come along - Insourcing . There is no current definition for this word in our Urban Dictionary or Websters. I plan to change that by defining in detail the concept of insourcing and who is responsible for the practice of it. First we must compare the word to it's cousin, Outsourcing.

Outsourcing has come to mean the transfer of jobs from one country to another country. The jobs are "outsourced" by corporate interests seeking higher profits through cheaper wages and other factors such as no EPA regulations in the country chosen by the corporation to replace the U.S. jobs.

Insourcing describes the process used by corporations to remove jobs from private sector labor markets and "Insource" them to prison industry operations here in the U.S. This allows for profits more in line with outsourcing, but eliminates the necessity for expensive transportation costs to return the finished goods to the U.S. for sale to consumers. It also allows manufacturers to attach lables to their goods marked "Made In The U.S.A." This is an important matter in today's markets. Americans want to buy American made products. This desire for patriotic purchasing has been around for a few decades now and was introduced by American manufacturers objecting to our purchasing of imported goods made in Japan, China, Taiwan, etc.

Insourcing of jobs is the "quiet" elimination of private sector jobs. Corporations wishing to participate in using prison labor, partner with prison industry operations under the federal Prison Industries Enhancement Certification Program (PIECP). 18 USC 1761(c) is the controlling federal statute of PIECP. Though private sector corporations are prohibited from closing private sector operations in favor of prison operations, they do so without consequence. There are other mandatory requirements that must be followed in order to participate in PIECP, but those also are rarely enforced.

The way these prison partnerships typically work is that a manufacturer wanting to increase profits moves their equipment, technology, materials and unfinished goods to a factory setting within a prison industry facility. Once up and running, the same products come off the assembly lines and are shipped as before. The difference is this, private sector employees of the company have been terminated or laid off. A handful of employees are usually kept on long enough to train inmates and prison supervisors in the manufacturing used to make the products. Once that is accomplished, they are also eliminated and their positions taken over by a prison industry supervisor.

This insourcing of labor creates quite a number of unemployed citizens. Burdens are placed on state and community social help programs, unemployment compensation, etc. So while the corporation saves lots of money in labor costs - no more unemployment insurance premiums, less expenses in lease of facilities (usually leased by the prison operators at $1.00 per year), and no more employee benefits such as medical insurance, vacations or paid time off - the communities they vacated are left to fund the unemployed left in their wake. In addition the local government loses taxes that were paid by the corporation, previous landlords of the facilities once leased to the corporations are left with vacant property and local shops and other businesses suffer a drop in sales due to the newly unemployed workers left behind.

Insourcing was never a very important topic to most - until 2008 when our economy began to collapse and unemployment grew by leaps and bounds. Only then did people begin to turn an eye toward the use of prison labor instead of private sector employees. Some of us questioned what could be done to stop the practice of losing jobs to prisoners. What we discovered was depressing; lawmakers had been hard at work enlarging this program and eliminating most regulatory measures and transferring actual oversight of the program to the very corporations and prison industries to be overseen. Corporations had just as actively been contributing campaign donations to lawmakers to ensure PIECP continued as modified without interference or regulation. Why is this such a big deal?

Most people are not aware that today prison industries are a booming business with gross sales in excess of $3 billion annually. Less than two decades ago their gross sales were less than $400 million. Prior to the early 1990's most prison industries limited sales to state agencies, departments or non-profit institutions like colleges and public schools, etc. Once corporate interests discovered PIECP that came to a screeching halt. Today prison made good are found on shelves in most major grocery stores, appliance outlets, designer clothing stores, wal-mart, kmart and many others. Prisoner made goods are now found in most homes in the U.S. Due to loop holes in the PIECP legislation, state prison industries are now able to manufacture and sell their products upon open markets in the state of manufacture without paying inmates much more than pennies on the hour for their labor. This has eliminated many small businesses, competitive private sector manufacturers and thousands of jobs nationwide. Today anyone can buy products made in prison with cheap prison labor.

To fully understand the subject of insourcing you need to also understand the basis for PIECP. A reading of the PIECP Final Guidelines at http://www.nationalcia.org/wp-content/uploads/2008/09/pie-final-guideline.pdf will inform that it was the intent of the lawmakers to implement this program with the basic goal of training inmates in job skills and technologies that would allow them to exit prison with the ability of becoming employed upon release and thus avoid a return to prison. That's the concept and reason for PIECP.

The program was never intended to serve as a cheap labor source for corporations but that is what it has become. This was accomplished through manipulations and lobbying by the corporations involved to change PIECP into what it is today. In order to succeed in this transformation it was necessary to reduce or eliminate altogether all oversight of the program. That is exactly what happened in the mid '90's.

The U.S. Department of Justice's, Office of Justice Programs (OJP) and Bureau of Justice Assistance (BJA) was given authority to oversee PIECP and enforce compliance with the mandated requirements put in place by Congress. In '95 this oversight and authority over the program was "outsourced" by the BJA to a private non-profit group - the National Correctional Industries Association (NCIA). The DOJ provided a nice healthy taxpayer grant to the NCIA for performing these oversight "duties" on behalf of the U.S. government.

Since 1995 the program has been so abused lawmakers back in 1979 would no longer recognize PIECP as the legislation they enacted that year. This abuse has come about because the NCIA is an organization made up entirely of prison industry administrators, employees of prison industries and their vendors and suppliers. All are actively involved in PIECP within their industries. Thus from 1995 through today, the entire program is being run and overseen by the same group of individuals and corporations. They have become the foxes guarding the hen-house. Through these manipulations more and more corporations have been attracted to the use of prisoners as their "labor pool".

Private prison operators such as Corrections Corporation of America (CCA) and Geo Group - yes, the same ones involved in the SB 1070 corruption fiasco in Arizona - own and operate dozens of prisons across the U.S. Many of those facilities have complete manufacturing facilities attached and are operated as prison industries. CCA had a contract through 2003 with U.S. Technologies, Inc. that allowed UST to operate any prison industry under CCA's control at privately run prisons. (UST's stock was delisted by the SEC and they quietly ceased to operate after the CEO of UST was charged with corruption and bilking investors out of $13 million in 2004). Prior to their closure, UST was actively involved in attempting to corner the prison labor market. They intended to use inmate labor in every manner imaginable for profit.

Efforts to involve Union officials, management and labor leaders in rectifying this issue have been unsuccessful for some reason. Politicians and Union leaders are too busy arguing about outsourcing of our jobs overseas and seem to not have any interest in eliminating or addressing insourcing. The next time you or your neighbor loses your/their job; before looking toward China or India to see if you can see your job making it's way there, look the other way and see if perhaps some criminal that stole your car has just as easily stolen your job and income as well.

Through "Insourcing" of your jobs to inmates, those jobs have been lost permanently. Sadly, the reason for PIECP in the first place - inmate training - has been replaced with corporate profits as the goal. Lifers are being used nationwide in PIECP - men and women who will never be able to use their learned skills in the free markets. In addition the jobs and skills being taught to prisoners today no longer exist in the free markets...they've already been insourced to prison. To land such a job, the released prisoner has to return to his old cell, bunk and assigned prison industry job, exactly as planned and anticipated by prison industries and their corporate partners who are the only "winners" in this scheme.