Politics And Piecp

Politics and PIECP Violations The Rest of the Story….

How Politics From 1999 to Present Have Corrupted The Prison Industries Enhancement Certification Program STARTING with the Governorship of two southern states by brothers a subculture was developed and put into place. The operation allowed a windfall of money to be made by supporters and political “pals” from the use of the federally run Prison Industries Enhancement Certification Program (PIE Program). Using the PIE Program in conjunction with both public and privately run prisons and Industry operations, millions of dollars were flowing freely. Companies like Wackenhut (now GEO Group) and CCA received hundreds of millions from Texas and Florida Treasuries for housing prisoners for both states – and others. Not satisfied with those profits, the principals involved put the prisoners to work and earned even larger profits from their labors. This scheme soon involved most state Departments and Agencies in Texas, Florida and in 2000 infected the U.S. Government’s Departments and Agencies from inside. In 2004 cracks began to appear in the operation and investigations soon led to indictments, convictions and prison sentences for some. Bankruptcy, business closure and disgrace to other participants. The following is that story.

Overview Relationships between large corporations, prison industries, the NCIA and others are being used to facilitate an abuse of federal PIECP. The road to such abuses began in 1995 in Texas under Governor George Bush. He supported conservative faith-based community initiative programs (FBCI) and those who pandered the program(s) to the Governor. The original concept to use PIECP in conjunction with FBCI programs was suggested to Governor Bush by Bill Robinson with Corrections Concepts, Inc.and the Born Again Corporation, Inc. Minister James T. Draper, Jr. worked with Robinson to plan and promote CCI. Draper is a theologically conservative Baptist and a prominent figure in the Southern Baptist Convention. Robinson is still working to implement the “Habilitation House” concept he first proposed to Bush in 1995. So far eight Texas Communities have fought to deny the placement of the facility in their jurisdiction. Some of the Corporations involved have ceased to exist due to indictments and court issued prison sentences. Others remain and continue to manipulate PIECP to their advantage. This presentation points to relationships between George Bush, Jeb Bush, Wackenhut Corp. (Geo Group), US Technologies, Inc., Corrections Concepts, Inc. and other corporations involved in faith-based community initiative programs and PIECP. Directors of the Corporations named herein include high profile and still well connected individuals who have served within the US Government in one capacity or another and since have become involved in the Corporations involved in manipulation of the PIE Program. A Complete lack of actual oversight of PIECP is allowing the program to be altered to decrease inmate wages, disadvantage private sector competitors and improperly sell or distribute prisoner made products within the state of manufacture without adhering to the mandatory guidelines of 18 USC 1761(C). The next slides will identify the PIECP requirements, demonstrate the violations and name the Corporations and individuals involved.

PIECP Guideline – Mandatory Requirements ♦

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Legislative Authority to involve Private Sector administrative authority to ensure that mandatory program criteria will be met through internal policies and procedures. Legislative authority to pay wages at a rate not less than that paid for similar work in the same locality's private sector Written assurances that the PIE Certification Program will not result in the displacement of workers employed before program implementation. Groups before Start-up Authority to provide worker benefits, including workers' compensation or its equivalent Written assurances that inmate participation is voluntary.

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Legislative or administrative authority to take deductions not to exceed 80 percent of gross wages for room and board; taxes (federal, state, local); allocations for support of family pursuant to state statute, court order, or agreement by offender; and contributions of not more than 20 percent, but not less than 5 percent of gross wages to any fund established by law to compensate the victims of crime. Follow EPA Std’s Written proof of consultation with related organized labor before PIE Certification Program startup. Written proof of consultation with related local private industry before PIE Certification Program startup Compliance with the National Environmental Policy Act and related federal environmental review requirements.

PIECP Violations ♦ Substitution of minimum wage for ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦

prevailing wage Drawing PIE orders from inventory. Inmates not paid for sub-assembly parts mfg. Rm. & bd. deductions being diverted to use of industry Illegal spin-off corporations. Self-dealing Money Laundering Mail and wire fraud Seizure of private sector assets of PIE partners Improper loans

♦ Interlocking managers, directors ♦ ♦ ♦ ♦

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and staff Conflict of interest of NCIA oversight authority IRS tax violations Improper use of PIECP Certificates Government manipulation of PIE program through faith-based community initiatives Embezzlements of private prison corp. funds Bribes, kickbacks and illegal schemes of privatized state contracts

PRIDE Enterprises & Florida PIECP Violations All of those violations listed on preceding slide and more particularly: •1999-2005 Formed and operated illegal spin-off Corporations (see Fl. IG Report 2004-4). •Money Laundering-conversion of PRIDE funds to other PRIDE owned Corp.’s and receiving personal salaries and bonuses from those corporate entities through this manner (see Fl. IG Report 2004-4). •2001-2005 Takeovers of private sector businesses, Custom Converter Sales, Value Line, Man-Trans, Fresh Nectars and ATL Industries. Converted these corporation’s assets to PRIDE’s use. •Mail and Wire Fraud-by submitting false demands for money not actually owed to private sector PIECP Partners, and receiving payments upon those false invoices. •Commingling of for profit and nonprofit funds of all spin-offs with PRIDE financial accounts. •IRS violations involving commingling of funds and illegal or disallowed lobbying of Florida Legislature and Executive branches of government for enactment or amendments to Florida laws benefiting PRIDE prohibited by IRS 501 (c)(3) exempt status. •Failure to declare the Lobbying Expenditures to the IRS, instead hiding those expenses under “legal expenses” 1998-2009 •Failure to pay inmate workers the mandatory prevailing wage scale, substituting minimum wage or standard prison wages in violation of 18 USC 1761(C). •Taking deductions of 40% of inmate’s earned wages for room and board to offset costs of incarceration and diverting those funds ($3.1 million) to PRIDE operational expenses use.

Faith-Based Initiatives In PIECP ♦

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1996-Appointment of 16 member Task Force by Texas Governor George Bush on how faith-based programs could operate without Government Interference. 1996-Support of Corrections Concepts, Inc.(CCI) by George Bush. 1997-Involvement of faith-based “Habilitation House” program with PIECP program in Texas. Entry level wage set at minimum wage. 1997-Tx. Gov. Bush Sponsored Senate Concurrent Resolution #477 to all Texas agencies, sheriffs and Co. Commissions to permit faith-based correctional programs, facilities and initiatives to play significant role in rehabilitation. 1999-Governor Bush Letter to Bill Robinson, CCI supporting his efforts of faith-based programs for Texas offenders and giving personal support.

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1999-CCI Supporters: Dan Quayle, Bob Stearns, Charles Colson, Bill Glass, John Castellani, Hardy Raugh (ACA), Colby May, Dick Armey. Jan. 29, 2000-President Bush issued Executive Order establishing White House Office of Faith-based Community Initiatives in 5 US Departments. This allowed expansion of the PIECP program under state prison industries. Dec. 2004-Executive Order: Equal Protection of the Laws for Faith-Based and Community Organizations. Mar. 9, 2006-Executive Order Responsibilities of the Department of Homeland Security With Respect to Faith-Based and Community Initiatives.

Fla. Connections to Texas and Prison Industry Op.’s in PIECP ♦

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1999-Partnership between Wackenhut Inc. and US Technologies for 2 PIE operations at Moore Haven CI and South Bay CI. Inmates to be paid minimum wage under training program (FDOC held PIE Certificate at time) Wackenhut moved headquarters to Miami, Fl. 1999-Partnership between Wackenhut, Inc. and US Technologies for 1 PIE operation at private prison industry in Lockhart, Tx. Minimum wages paid instead of prevailing wages 2004-Gov. Jeb Bush opened 1st US Faith Based Prison facility at Lawtey CI. LCI has a PRIDE prison industry in operation 2000-PRIDE partnered with CCS at South Bay CI to operate private prison PIE operation

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1993-Fla.formed Corrections Privatization Commission (CPC) to oversee private prison operations in Fl. 2001-Reinstatement of South Bay Correctional Facilities Financing Corporation by Hodges 2002-CPC Commissioner, Hodges resigned after fine of $10,000.00 for ethics violations. Alan Duffee appointed as new Commissioner by Gov. Bush 2003-Duffee took over S.Bay Correctional Facilities Financing Corp. 2004-Duffee Resigned after indicted for embezzlement of $224,000. From CPC maintenance fund 2004-Duffee founded Correctional Concepts, Inc in Fl.

U.S. Technologies Board of Directors-2000 From the Corporation’s 2000-2002 SEC 10K filings. U.S. Technologies Inc. describes itself as: “U.S. Technologies Inc (the "Company"), is engaged directly and indirectly through its wholly owned subsidiaries, Labor-to-Industry Inc. (“LTI") and UST, Inc., in the operation of industrial facilities located within both private and state prisons, which are staffed principally with inmate labor. These prison-based operations are conducted under the guidelines of the 1979 Prison Industry Enhancement (PIE) program.” Gregory Earls Co-Chairman of the Board.and Co-Chief-CEO James V. Warren Co-Chairman of the Board and Co-Chief-CEO J. L. (Skip) Moore Executive Vice-President and Chief Operating Officer General Alexander M. Haig, Jr., former Secretary of State and White House Chief of Staff; The Honorable George J. Mitchell, former Senator from Maine and Senate Majority Leader; The Honorable William H. Webster, former Director of both the FBI and CIA; Rick Rickersten, partner at Thayer Capital, a leading investment management firm headquartered in Washington, D.C.; Hal Wilson and Peter Schiff, Managing Directors of Northwood Ventures LLC and Northwood Capital Partners LLC, venture capital investment firms headquartered in New York; Arthur Maxwell, President of Affordable Interior Systems, Inc., one of the 25 largest commercial furniture manufacturers in the United States;

OnShore Resources, Inc. OnShore Resources is a private for-profit Corporation. They are partnered with the TDJC Industries in a PIECP operation. This company is listed as employing 28 PIECP inmates in the First quarter of 2009. The NCIA Assessment Reviews list them as manufacturers of Electronic Circuit Boards and wiring harnesses. The Company’s website is located at: http://www.onshore-resources.com/services.html. There they describe their services thus: “OnShore Resources is a woman-owned, HUBZone-certified business specializing in contract manufacturing. We are UL Certified and our services include PCB assembly, cable and wiring harness assembly, mechanical subassemblies, kitting, box build, and other labor-intensive assembly projects. ”There's no doubt about it: going offshore can reduce your cost of manufacturing. But here is an equally true fact: OnShore Resources' unique status as a PIECP participant often allows us to offer our customers comparable cost savings for their manufacturing projects. In the past some companies have found that when they examined the real costs of assembly overseas - including quality issues, transportation expense and additional logistical considerations - the prices and capabilities offered by OnShore Resources came out on top. ”Smaller companies that don't have the high volumes and stable schedules required for offshore manufacturing are often left with few options for reducing their costs. So you'll be glad to know that OnShore Resources specializes in low to mid-volume contracts. We offer cost savings to companies of any size, whether small or large. Have production schedules that start and stop? Need materials management? You'll find OnShore Resources has all the flexibility and capability you need. “Our diverse client list includes companies that manufacture medical training devices, home networking systems, commercial lighting, security systems, fast food menu displays, remote monitoring units, and PCs. Chances are we can help you, too”. Corporate address given as: 1402 Industrial Boulevard Lockhart, Texas 78644.

Lockhart Technologies, Inc. (LTI) A wholly owned subsidiary of US Technologies, Inc. Corporate address given as: 1402 Industrial Boulevard Lockhart, Texas 78644. In 1993 LTI closed its operation in Austin, Texas, laid off private sector workers (150) and moved its operations into a private prison industrial complex owned and operated by Wackenhut. As a wholly owned subsidiary of US Technologies, LTI had interlocking managers, Directors and administrators. Primary products manufactured by LTI are wiring harnesses, electronics and associated products. Occupies the same building and address as US Technologies, OnShore Resources and UST. LTI operated industrial facilities located within both private and state prisons. LTI staffed these facilities principally with inmate labor under the guidelines of the PIE program. In this outsourcing capacity, U.S. Technologies solicits manufacturing, assembly, repair, kitting, and fulfillment services and other businesses. Through LTI, U.S. Technologies selects inmates in a competitive process and trains them in the job skills needed for the contracted work as well as the general job skills required to secure and hold long-term employment. Up to 80% of the inmates' wages are withheld in order to pay fines, restitution to victims, alimony, child support and taxes, and to reimburse the government for the costs of their incarceration. LTI operated an electronics plant at Wackenhut's Lockhart, Texas corrections facility which manufactured and repaired circuit boards for Dell, Motorola, HDC and Texas Digital, among others. The Texas facility also performed various mechanical assembly operations on customer products which were formerly assembled in Mexico. LTI ha a furniture manufacturing plant in a state correctional facility located in Blythe, California which presently manufactures office panel blanks for Unisource, Inc. LTI had completed construction of a motorcycle parts manufacturing operation in a Wackenhut owned facility in South Bay, Florida.

Wackenhut (GEO Group) 3. Political Profile Politicos have traditionally filled the Wackenhut Corrections Corporation Board of Directors, including: • Benjamin R. Civiletti, served from 1979 - 1980 as the Attorney General of the United States • G. Fred Dibona jr., co-recipient of the National Patriot’s Award from the Congressional Medal of Honor Society in 1995 with former President George Bush • Anne Forman, former Under Secretary of the United States Air Force, former General Counsel of the Department of Air Force and member of the Department of Intelligence Oversight Board • Richard Glanton, served from 1979 – 1983 as Deputy Counsel to Richard L. Thornburgh former Governor of Pennsylvania. A number of former government employees are now highly paid executives with Wackenhut Corrections Corporation, including: •John M. Hurley, Senior Vice President Of North American Operations was employed for 26 years by the Department of Justice, Federal Bureau of Prisons. • John G. O’Rourke, Chief Financial Officer, Senior Vice President and Treasurer, most recent position was in the Office of the Secretary of the Air Force. Prior to joining WCC O’Rourke was a career officer in the United States Airforce. http://www.wcc-corrections.com/wcc-corrections/management.asp?id=1 •Manny Aragon, the New Mexico State Legislatures Democratic Leader, is a paid lobbyist for Wackenhut and once used an Aragon company to supply concrete for Wackenhut prison construction. This is illegal activity, as acknowledged by State Senator Cisco McSorley http://www.corpwatch.org/issues/PID.jsp?articleid=868

Wackenhut (GEO Group) Cont’d

•Michael Olguin, former New Mexico state House majority leader, quit his role as vice-chair of the Democratic party in Mexico to become a paid lobbyist for Wackenhut Corrections. He had previously been very critical of Wackenhut’s activities, including the incidents at the prison in August 1999 (see below) http://www.psiru.org/justice/ppriarchive/ppri33-01-00.htm .

Wackenhut Corrections Corp (now GEO Group)Political Contributions 1995-2000 Election Cycles •From 1995 to 2000, the three companies made a total of more than $528,000 in federal campaign contributions -- much of it in "soft money" given to the political parties, according to the Center for Responsive Politics, a nonpartisan, nonprofit research group in Washington, D.C.

•In 2005 Wackenhut received a contract potentially valued at $500 million to provide guards to the Bureau of Customs and Border Protection. Its lobbying firm is Van Scoyoc Associates, whose vice president, Ray Cole, was a Bush Ranger last year. DHS continues to contract with Wackenhut, despite evidence that the company has failed to protect power plants and military bases. In 2003, the Department of Energy’s inspector general found that Wackenhut, responsible for guarding half of the nation’s nuclear power plants, had not provided adequate security at the Oak Ridge nuclear weapons plant in Tennessee. At the same time, under an unprecedented plan passed by Congress in 2002, the company became one of the first private contractors hired by the Pentagon to guard military bases. http://knowmore.org/wiki/index.php?title=The_Department_of_Homeland_Security_has_a_section_o . •In 2003-2004 George Wackenhut contributed $4,235 to Bush Cheney campaigns and RNC ( http://www.campaignmoney.com/political/contributions/george-wackenhut.asp?cycle=04) .

Wackenhut Corrections Corp (now GEO Group)Political Contributions 2000 Election Cycle •Wackenhut gave $20,000 towards the cost of President Bush’s inauguration (St. Petersburg Times, 17 Jan 2001) as well as $5,000 for his 2000 campaign (www.opensecrets.org) • 2000 election – gave $25,850 in Political Action Committee (PAC) donations and $55,650 in soft money contributions. (relatively evenly distributed between Democrats and Republicans – which is telling given Wackenhut's hardline right wing history). Beyond Bush’s $5,000, the top receivers of money were Florida legislators: House member Mark Foley-R ($2,850) and Senator Bill Nelson-D ($3,500). Nelson has since been named as vice-chair of the Democratic Senatorial Campaign Committee (DSCC) • Wackenhut gave $33,325 to candidates in the 1998 election. • Made political donations in New Mexico of $9000 to the Republican Governor and $5000 to the state Republican Party. [Above available at www.opensecrets.org] • Florida – In Florida, lawmakers considered two bills to abolish the state Correctional Privatization Commission and transfer its duties. Both measures arose from concerns over conflict-of-interest allegations involving the staff of this oversight body and the consultants with whom they worked. Both bills died. Executives and lobbyists for private prisons were active campaign contributors in 2000, giving 122 candidates more than $158,400. And more than half of the House and Senate candidates, or a voting majority, received at least $1,000 in contributions from industry sources. Wackenhut Corrections gave $12,500 of its $65,200 on Nov. 1 and Nov. 2, just hours before the midnight Nov. 2 deadline for contributions. (Taken directly from the report "PRISON COMPANIES GIVE $1.1 MILLION TO CAMPAIGNS IN SOUTHERN STATES" Campaign Donations Targeted Incumbents, Winners in 2000 – The National Institute for Money in State Politics http://www.followthemoney.org/press/prisons.phtml)

Wackenhut Corrections Corp (now GEO Group)Political Contributions 2000-2004 Election Cycle Added note on Florida: Florida created the Correctional Privatization Committee in 1993, which was to act as a source of information and to provide backing on state prison privatization. One of the strongest supporters was Charles Thomas, who was a consultant for the commission and ran the Private Corrections Project at the University of Florida. At the same time he was pushing for the state to privatize, Thomas had financial interests in prison related companies, including $660,000 in stock which included stock in Wackenhut. Ultimately Thomas was fined $20,000 and forced to resign from the commission. ("Take Privatizing Public", Palm Beach Post, March 26th, 2001). In 2003 Wackenhut donated $58,000 to Ca. Governor Arnold Schwarzenegger when one of Wackenhut’s California prisons was to be shut down ( https://caclean.org/problem/latimes_2003-11-26.php) . In the 2000 and 2004 presidential elections, Bush received $10,000 from Wackenhuts PAC (the maximum possible contribution), while the two Democratic candidates, Al Gore and John Kerry did not receive any contributions. In the 2002 and 2004 elections 79% and 70% respectively of Wackenhut's PAC campaign contributions went to Republicans ( http://www.southernstudies.org/2005/09/be-afraid.html) .

In 2008 Election Cycle the Committees donated to and individual contributions by Wackenhut employees/Managers can be found at: http://www.campaignmoney.com/political/committees/wackenhut-corporation-political-action-comm .

Convergence of Principals in Florida in 2000-2005 ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦

South Bay Correctional Facilities Financing Corporation (Fl. Nonprofit Corp) owned SBCI. Clayton M. Hodges Dir. of So. Bay Correctional Facilities Financing Corp. thru 2003. Clayton M. Hodges Dir. of Glades County Correctional Facilities Financing Corporation Clayton Hodges also Commissioner of Fla. Corrections Privatization Commission. Alan Duffee replaced Hodges as Dir. of So. Bay Correctional Facilities Financing Corp. in 2003. Duffee Replaced Hodges as Commissioner of Fla. CPC in 2003. Wackenhut Corp. Operates SBCI and Moore Haven CI. US Technologies partnered with Wackenhut in Tex. and Fla. in 2000 for prison industries operations. SBCI used by PRIDE to partner with Custom Converter Sales and Value Line under PIE program partnership in 2000. Duffee Indicted, convicted and serving prison sentence for embezzling $224,000.00 from CPC Maintenance Accounts. Duffee, Hodges and Samuel A. Block partnered under several Corporations in Florida.

Bush - Cheney

C H A R T P R E S ID E N T B U S H

C C I

VP Cheney V a n g u a rd

TD JC

D O D

H a llib u r t o n

P IE C P

G o n z a le s

S ec. A g

IN S

D O J

U S D A

KB R

F S IS

F e d D e t C t r 's

FBI

B JA

W a cke nh ut

G EO

U ST

LTI

O n S h o re

P r . P r i s o n I n d 's

P r . P r i s o n I n d 's

P v t. S e c to r C o rp s

C C A

P IE C P N C IA

G lo b a l

P R ID E

LTI

IT C

D iv M g m n t

U ST

O n S h o re

P r. In d

President Bush and VP Cheney both had relationships with Wackenhut and various private prison and industries. This chart highlights those relationships.

PIECP

P I E C P R e la t i o n s h i p C h a r t 1999 - 2005 B l a c k - C o n t in u i n g O p e r a t i o n

P r e s id e n t B u s h

R e d -P v t /S e c to r B u s in e s s e s S e iz e d G o v e r n m e n t A g e n c ie s

A tto rn e y G e n e r a l

P in k - O v e r s ig h t A g e n c y D e p t . O f J u s t ic e

B lu e - P R I D E S p in - o f fs

O f f ic e J u s t ic e P r o g ra m s P IE C P P ro g ra m

B u r e a u o f J u s tic e A s s t. N C IA

N C IA B o a rd P r i s o n I n d 's M g m n t IT C G lo b a l O u ts r c in g

A l l o t h e r A ff i l i a t e s

A l l o t h e r D O C 's

F re s h N e c ta rs

C u s t o m C o n v . S a le s

V a lu e L i n e

M a n T ra n s

C o n s u m e rs

C o n s u m e rs

C o n s u m e rs

P R ID E ATL C o n s u m e rs

P r is o n I n d u s tr ie s C ir c le A B r a n d s

F e d P r is o n s

C o n s u m e rs

C e n tu ry M e a ts C o n s u m e rs

This chart displays the chain from the White House through PIECP to US consumers.

National Correctional Industries Association

N C IA

F e d e ra l a u t h o r ity N C IA

B u r e a u o f J u s tic e A s s t.

P r is o n In d u s tr ie s

P IE C P P ro g ra m N a t io n a l C o r r e c t io n a l I n d u s t r i e s A s s o c . N C I A B o a rd P r e s E le c t J o h n M ille r - C E O

V P P r. D e v D e n n y F ra c a s s i - D IR

P r e s id e n t D o n G u i ll o r y

V P M kt B r i a n C o n n e t t - D . D ir

T re a s u re r K a r e n B r o w n - D ir

M i s s . P r is o n I n d . C o r p

R o u g h R id e r I n d . U ta h

V a C o rr E n t.s

N evada D O C S i lv e r S t a t e I n d 's

N . C . C o r r . E n te r p r is e s

S u s a n C u n n in g h a m - D ir T R IC O R W /F D e v

R o b e r t G rie s e r - C A O F e d P r i s o n I n d 's

G a y le L a m b e r t , A d m i n . M o n ta n a C o rr In d

J e r r y C a m p b e l l - A d m in A r k . C o r r . I n d 's

C a r y A d r a g n a - M g r. M i c h S t . I n d 's

D e a n M a s o n , E x . D ir. W a . S t. J a il In d B d .

A n n e M u r r a y , S a le s & M k t . D ir . G a . C o r r . I n d 's

R ic k T h a y le r - D i r Y D JC

A C A R e p M a rk S a u n d e rs W a rd e n S .E . C o rr . In s t.

M ik e M a s tr ia n i, - D ir Y o r k S t r e e t I n d u s t r ie s

R e g . A p p t. M ik e H e r r o n P E N P r o d u c ts

N . E . A p p t . J o e S o m m e r v i l le M d . C o r r . E n t 's

S . E . A p p t . A n d y F a r q u h a r, D ir . A l a . C o r r I n d 's

S . C . A p p t . J . D . C o l b e r t , A d m in O k . C o r r . I n d 's

W A p p t . M a r tin T h o m a s , G e n M g r I d C o r r . I n d 's

E x D ir & C o r p S e c . G in a H o n e y c u tt

This chart demonstrates the relationships between the BJA, NCIA and participating PIECP industries. As shown, 19 of the 38 participating prison industries are represented upon the NCIA Board. The industries operated by these Directors are also members of the Association.

PIE Operations W/O Certificate N o n -A u t h o r iz e d P I E C P O p e r a t io n s 2000 - 2005 B JA

N a t io n a l C IA

P r i v a t e P r i s o n I n d 's P R ID E A T L I n d u s t r ie s

I n d u s t r i e s T r a i n in g I n c

S t a t e P r is o n I n d u s t r ie s

F lo r id a C it r u s P r o d u c e rs

F lo r id a F r u it P a r t n e rs

M a n -T ra n s

N o r t h e r n O u t f it t e rs

C ir c le A B r a n d s

G lo b a l O u t s o u r c in g

F re s h N e c ta rs

C e n tu ry M e a ts

C u s to m C o n v e rte r

L a b o r L in e I N C

V a lu e L i n e

L a b o r L in e S v c s

G lo b a l R e m a n

D iv e r s if ie d S u p p ly M anagem ent

P I E O p e r a t i o n s w it h o u t C e r t if ic a te G re e n -G o v e rn m e n t A g e n c y

P r iv a t e N o n p r o f it O v e r s ig h t A g e n c y

G o ld - P IE C P C e r t if ic a t e H o ld e rs

G r e y - P r iv a t e S e c t o r P I E P a r t n e rs R e d - Ille g a l P v t . S e c t o r P I E O p e ra t io n s - W / O C e r t if ic a te

This chart displays the chain from the BJA through to ITC (PRIDE Holding Co.). It further identifies illegal operations by entities w/o legal authority to operate PIE industries in Florida. Those corporations in red were the private sector companies taken over by PRIDE.

Resignations, Indictments, Arrests, Convictions of Participants in Private Prison and Prison Industry Operations ♦ Dick Cheney – Texas inmate abuses in private run prison. ♦ Alberto Gonzales – Accused of suppressing investigation and prosecution of ♦

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the inmate abuses in private run prison in Texas. UST Chairman, C. Gregory Earls – Indicted and convicted of swindling $20 million from investors in U.S. Technologies, Inc. Sentenced to 10 years in federal prison. Alan Duffee – Florida CPC Commissioner indicted for embezzlement of CPC funds in Fl. Sentenced to prison. Pamela Jo Davis – Resigned as CEO from PRIDE and ITC after charges of corruption, money laundering and illegal spin-off corporations. James Crosby – FDOC Secretary and PRIDE Director, resigned both posts due to corruption and bribery schemes. Indicted and sentenced to 9 years in federal prison. A.C. Clark – Regional Director FDOC. Indicted for bribery, corruption and kickback scheme. Sentenced to 3 years in federal prison. Cornell Corrections – Class Action for violations of the SEC Act. Off the books transactions that violated SEC rules (similar to Enron). William Webster – Resigned from SEC due to involvement with UST as Dir.

Financial Data on PIECP in $’s All data is collected from the NCIA Quarterly Statistical Cumulative Data Chart(s) for 1979 through 1st. Qtr. 2009. Included are all prison industry PIECP operations to date. •Gross Wages Paid to Inmates: •Victim Restitution: •Room and Board Deductions:

$494,477,846 48,301,073 143,866,374

•Family Support

31,968,186

•Total State and Federal Taxes:

65,070,079

•Net Wages Paid to Inmates:

205,272,134

The foregoing figures do not include wages paid to inmates for non-PIECP work, wages for PIECP work manufactured and sold in the state of manufacture. Labor to manufacture subassembly parts at one plant and shipped to another plant to fill PIE orders are not included as inmates are not paid for this sub-assembly labor. Florida alone has generated over $1billion in gross sales from 1981 to present. During the 5 year period from 2003 through 2008 alone, PRIDE’s gross sales totaled: $434,652,538.00. As stated elsewhere, PRIDE deducts Room and Board payments from the inmate wages. To date that amount totals $3 million plus. PIECP requires that if a prison industry chooses to take these deductions the money must go toward offsetting the costs of incarceration. PRIDE R&B deductions are not used for that purpose. Instead they put the money into the Prison Industry Trust Fund. Once deposited PRIDE is allowed to take it out and use it for operational expenses associated with the PIECP operations. The Taxpayers in Florida are denied these funds.

Involvement, Wages and Industry Secrecies PRIDE and other prison industries are fond of stating they attempt to downplay or hide the fact that inmate labor is used in the manufacture of certain products or that the Corporation or Industry it is partnered with operates under PIECP. They cite avoiding public knowledge as they have a propensity for not buying products made by inmates. Private Sector “partners” under PIECP are often times not listed upon sites or documents pertaining to particular industries for the foregoing reason. This makes it difficult to track such partnerships without timely research. In addition, the products, wages paid to inmates and gross sales of PIECP products or services are unavailable. From Annual Reports of PRIDE you are able to ascertain the number of total hours worked by their inmate work-force. You are provided with the gross sales of their products, but both include PIECP work and standard non-pie work and product sales are not broken down into PIE and non-PIE. A visit to the NCIA’s quarterly statistics files reveals the gross wages and deductions paid to inmates by quarter and annual totals, but does not break down the number of hours worked under the program. Because of the lack of data and information as to PIECP by the work force, product sales and the actual number of hours worked on PIE products, establishing the pay scale for the inmate work force is not possible. It’s also not possible to chart the number of actual PIE products produced, shipped or sold. There should be more transparency in both wages paid to the inmates as well as a breakdown of the sales of PIE products or services in quarterly statistics and annual reports on industry performance. The mixing together of PIE and non-PIE products or services under a single heading of “gross sales” assists PRIDE and other prison industries from hiding these figures and necessary statistics from the public and government oversight. An example of the need for such transparency is demonstrated by the following slide.

Example of PIE Wages Breakdown In the first quarter of 2009, the NCIA reports that PRIDE paid out $315,141.00 in gross wages to inmates in their PIE Industries. The net wages received by the inmates was $100,913.00. There were 387 inmates identified as workers in the program ( http://www.nationalcia.org/wp-content/uploads/2008/05/qtr0109stats.pdf and http://www.nationalcia.org/wp-content/uploads/2008/05/qtr0109certlist.pdf). For that quarter the figures provided by the NCIA reflect that each inmate earned an average of $814.32 for the quarter. This translates to $67.86 per week per inmate in gross pay. The standard work week in PRIDE’s industries is 6 hours per day, 5 days a week, or on average 30 hours per week. $67.86 divided by the 30 hour average provides an hourly gross wage of $2.26 per hour per inmate. Average net wages paid to each inmate after deductions works out to $260.75 for the quarter and $21.73 per week. For a typical 30 hour work week this results in an hourly net wage of $.72 per hour worked. Obviously the number of hours worked by each individual inmate varies. Also one or more industries have more orders and therefore more hours worked on PIE projects while others have less. Mathematically, the averages are representative of total hours worked by a given number of inmates employed in PIECP in a given window of time. Where 387 total inmates earned $315,141 in gross wages over a 12 week period, the mathematics work out to the figures presented above. What is missing is the number of PIE products manufactured and sold during that period. The gross and net sales receipts for those products. For reasons obvious to most, prison industries deliberately attempt to hide certain facts and figures from oversight where those figures would show the actual wages paid to inmates in the program and the sales of products under the PIECP umbrella. Transparency is not only needed, it should be mandatory. Encompassing PIE sales within overall annual sales serves to effectively hide that aspect of the prison industries and disallows a factual determination as to the success of the program, percentage of gross sales from PIECP and actual wages paid to the inmate worker.

Summary PIECP was developed and implemented in 1979. From enactment through 1995 not much was done under this program. Some states participated, but the majority of prison industries avoided participation. In 1995 George Bush as Governor of Texas became involved in faith-based community initiatives (FBCI) that utilized faith-based re-entry programs with prison industries under PIECP. Prior to that time, all inmate workers in PIECP were paid prevailing wages. The FBCI program suggested paying minimum wage instead of prevailing. This is the first documented substitution of minimum wages in lieu of prevailing wages. Huge corporations such as Wackenhut, US Technologies and CCA recognized the potential for profits through this program and began funding the political campaigns of those politicians that could influence PIECP legislation and operations. In Texas the Governor accepted many contributions due to his open support of faith-based initiatives as well as privatization of prisons in that state. Wackenhut sought and received authorization from Governor Bush to open and run private prisons with prison industries in Texas. Within a short period of time Wackenhut and US Technologies moved operations into Florida, where they were welcomed by Bush’s younger brother and Governor, Jeb Bush. Bush allowed Wackenhut and CCA to open and run private prisons in Florida. Wackenhut’s operations included prison industries that were intended to be partnered with US Technologies at Moore Haven and South Bay prison complexes. The FDOC became PIECP Certified in 1995. In Florida inmates in the PIECP operations received prevailing wages for their labor until 1999. In that year, the Florida Legislature – under pressure and lobbying by PRIDE – enacted several state laws that allowed for inmates in PIECP to receive “minimum wages” or “prevailing wages”. The Legislature also enacted other legislation transferring the important PIECP Certificate to PRIDE and removed most oversight from the FDOC. On the National level, the BJA chose the NCIA as the oversight and enforcement agency to oversee PIECP. When the PIE Program converged with faith-based community initiative programs in Texas, manipulations such as the wage decrease from prevailing to minimum began and quickly spread to Florida and recently to other states participating in the program. In the 2000 election cycle, Wackenhut and other corporations involved in the private prison industrial complex made substantial contributions to George Bush’s Presidential campaign. Once elected Wackenhut contributed heavily to Bush’s inauguration. In Florida Jeb Bush was also receiving contributions from corporations such as Wackenhut. Jeb Bush rewarded political fund raisers such as James Crosby with Government appointments. His choices for important positions within Florida Government were later subject to second guessing as many of those appointed committed ethical, civil or criminal acts, were indicted and several went to prison for their actions.

Under PIECP in Florida PRIDE exploited the program terribly. The Corporation had been granted sovereign immunity as a quasi-state agency and exploited that immunity to the fullest extent possible. They formed 9 spin-off corporations owned and operated by PRIDE management, Current Directors, past Directors and family members of current and past Directors. The Corporation used the spin-offs to launder millions of dollars from their nonprofit operations, transferring the profits to the spin-offs and into the pockets of managers and administrators alike through salaries and bonuses. The NCIA created a situation whereby prison industries in the PIE Program were required to join the Association. This merger of those overseen with those with oversight allowed and greatly contributed to the abuses delivered to PIECP by the NCIA failing to fulfill the oversight duties required under the DOJ taxpayer grant. PIECP was operating so well with substantial profits being earned by prison industries and their “partners, that as the WHOFBCI offices were being established, Congressional members began attempting to get the federal BOP’s Prison Industries (UNICOR) to adopt the PRIDE business plan and participate in PIECP in a similar fashion. BOP Directors refused and Committee proposals for such a move met with stiff resistance. Supporters were unable to present Legislation to force the transition by UNICOR to the PIE Program. By 2005 many players and principals in involved with PIECP began to fall under state and federal investigations. This resulted in the demise of US Technologies and imprisonment of its Chairman. In Florida PRIDE came under scrutiny because of violations of state laws pertaining to the operations of the prison industries. Its CEO, CFO, President and others were forced to resign. Spin-offs founded and funded by PRIDE were dissolved and all ties to them ordered severed. Florida’s Corrections Privatization Commission was abolished after both Commissioners appointed to run the agency came under suspicion of ethics violation due to ties to the private prison corporations they oversaw. In the case of Duffee, he was convicted of embezzlement and sent to prison. The prison corporations tied to both Hodges and Duffee are still operating in Florida. The Keefe Commissary Network handed the prison canteen contract are still contracted with FDOC to provide commissary services to inmates, staff and visitors following the indictment, convictions and prison sentences given to Crosby and Clark due to kickbacks and bribes they received through Keefe from AIS, a Keefe sub-contractor..

The thread that connects all of the individuals, Corporations, PIECP and Agencies and Departments, mentioned herein is tied to prison industries and the use of inmate labor and housing of those inmates. PIECP is the catalyst used to bring all principals together for a common cause – profits. PIECP was seen as the door through which private corporations could funnel huge profits into their coffers. In this PRIDE was perceived by most as the “Pioneer” in profitable prison industry operations. PRIDE exploited this label by forming their spin-offs – authorized and unquestioned by either Florida authorities, the BJA or NCIA – to demonstrate to other prison industries how such expansion could result in larger and larger profits. Enactments of laws allowing the sales of prisoner made products under PIECP within the state of manufacture without paying the inmate workers prevailing wages, has been devastating to the private sector manufacturers who compete in the same markets. They are unable to compete with labor costs of under $1.00 per hour, leasing of facilities set at $1.00 per year and no benefits provided to the inmate workers. PRIDE and other prison industries, the NCIA and corporate partners are well aware of this and use it to their full advantage. In closing it should be noted that the PIECP concept was intended to provide training and job placement assistance to offenders and ex-offenders once released. Mandatory requirements were put in place to ensure the program was not advantageous to the prison industries. The Final Guidelines specifically point to and state the desire for a “level playing field” as the basis for the mandatory requirements and an easing of the interstate provisions under the federal Ashurst-Sumners and Walsh-Healey Acts to allow sales and shipments of prison made goods through interstate commerce. This author argues that there should be Congressional hearings held concerning PIECP and the manner in which it is being exploited and used by manipulators to seek and receive huge windfalls of profits. The federal laws already in place are not being enforced due to the actual lack of oversight and reporting to the U.S. Department of Justice and the BJA. An enforcement of those laws would discourage the abuses that are complained of herein and return the program to the desired and legislatively stated “level playing field” between prison industries and private sector competitors.