"There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back." - Terry Macalister (The Guardian)An ongoing controversy in Nevada has focused attention upon the relative unknown concept of allowing private industry to use prisoner labor and state owned facilities in the manufacture of consumer goods. Due to numerous complaints that this allows certain companies a distinct advantage over competitors in the same industry, Nevada authorities within the state Legislature, Assembly and the Executive Administration have been forced to address this issue.
Legislation developed more than a decade ago and disseminated state by state is responsible for legalizing and spreading this practice. The model for this law was written by a Texas State Representative and adopted by a pro-corporate, free market conservative think tank out of Washington, DC in 1995. Since then it has been proposed and passed in one form or another in more than forty states and has led to exploitation of prisoners for their labor. An accompanying side effect is an unfair advantage against competitors who have no idea they are competing against cheap labor and subsidized manufacturing in their markets.
This is a brief history of how this all began and identifies some of the key players, organizations, companies and state officials involved in prison industries. The huge increases in incarceration that created a captive workforce are also identified as are some of the companies realizing substantial revenue streams from incarceration.
Today the state of Nevada is where a line in the sand must be drawn. If American jobs are going to stop being transferred to prisoners as a means of enriching a few corporate owners and investors, we must begin by understanding the American Legislative Exchange Council and their pursuit of capitalizing off of imprisonment. This “international” think tank is so good at what they do that only on rare occasions do we get a glimpse of the depth of their involvement in local issues. When profits can be generated from the spending of tax dollars, you will always find ALEC there, ready to exploit to the fullest. Nevada is just one example of that exploitation, providing us that “rare glimpse” of their operational tactics.
ALEC is an invasive organization that infiltrates local communities through shadowy front groups with the sole purpose of pushing laws that benefit a select few corporations. Lowering wages and eliminating collective bargaining are just two examples of how ALEC works on behalf of its corporate funders. Another is how ALEC is pursuing deregulation of government agencies overseeing important consumer protections and tax expenditures. Beyond current efforts to gut popular job creating clean energy incentives, ALEC has supported federal efforts to roll back environmental protections and strip science education on global warming in public schools.
What ALEC learned and applied over the years in pursuit of earlier initiatives such as how to profit from incarceration, helped them develop the techniques used today on these new pursuits against clean energy, suppressing the ability to vote of non-conservatives, right to work and other key initiatives.
ALEC adopted key “model legislative” bills that were disseminated nationwide and used to allow companies to profit off of all forms of imprisonment. Two of the chief legislative acts used are the Private Correctional Facilities Act, used to allow private companies to house state prisoners and the Prison Industries Act. This “Act” is used to allow private companies to partner with state run prison industries and use prisoner labor in manufacturing and to provide services. Both of these legislative efforts by ALEC are what have been used to allow huge windfalls of profits to be made off incarceration. It was more than 20 years ago when these initiatives were put in place and they have now become the “norm” to allow acceptable exploitation of prisoners.
We are a nation made up of a fast-moving techy populace with a narrowing attention span. Today’s generation concentrates upon communicating electronically with friends, relatives and even unknown “followers” on social media sites. While they have begun to pay attention to political and societal issues that affect them in one way or another, they unfortunately are lacking in knowledge of political history that many of us lived through in the 60’s, 70’s and 80’s; protests against the draft, bras, war, etc.
This generation is also lacking in the knowledge of where their I-Pods, I-Pads, 4G phones, tablets and laptops they rely upon so heavily are manufactured. Few realize that slave labor and sweat shops in China, Taiwan and other third world countries make those products they cherish so avidly.
Fewer yet know that many of the consumer products sold in retail outlets today are made by prison labor right here in America; processed foods, furnishings, modular office systems, flooring, electronics, wiring for aircraft, missile guidance components and products as mundane as cleaning and disinfectant supplies, uniforms and plastic “sporks” made for McDonald’s and Wendy’s.
Worse yet, none actually realize that all those manufacturing jobs now in the hands of prisoners working for little or no wages were at one time the backbone of our middle class workers and U.S manufacturing. Through “partnerships” with prison industries, private companies have transitioned thousands of jobs away from middle class workers to prisoners in an effort of realizing higher profits. All of this assisted by pro-corporate legislation written by ALEC and lobbied for by ALEC’s corporate members and proposed by ALEC’s 2,000 known state legislative members.
Issues of decades before that remain lingering within our society – such as criminal justice laws, tort “reforms” and early pursuits of privatization – have been forgotten by one generation and remain unknown to subsequent ones. Because of this attention to today and lost thoughts of what came before, many of us fail to remember the history of the American Legislative Exchange Council. ALEC’s tentacles now reach into every state, each federal court in the nation, and ultimately influence within the U.S. Supreme Court.
Through this complex but ideologically aligned network ALEC’s activities in the 1980’s concentrated upon criminal justice legislation. They developed both the legislation and incentives for states to begin to implement harsh criminal laws accompanied by even harsher sentences. They helped abolish parole for offenders, eliminate mental health hospitals and facilities used to divert offenders from prison…and the purpose behind much of their “model legislation” was a way for companies to profit. They wrote legislation to allow states to privatize prisons, create and privatize prison industries and make those factories available to manufacturing by private enterprise.
As stated above, most have either forgotten all these early efforts of ALEC and their cabal, or never knew about them in the first place. The lack of knowledge and attention paid to ALEC over the decades helped the cabal thrive, prosper and grow while hidden from sight.
Today all the efforts put forth by this cabal over the years continues to bring them “royalties” or residual income off the legislation installed as much as four decades ago.
None of those efforts are as profitable to them as incarceration. ALEC cut their teeth on criminal laws and profiting off of imprisonment. They were there at the core of the early Reagan administration, helping formulate new laws to increase imprisonment for profit. The impact of this legislation disseminated by ALEC was not lost upon the authors of “The High Budgetary Cost of Incarceration” study cited below:
“Stricter sentencing policies, particularly for drug-related offenses, rather than rising crime, are the main culprit behind skyrocketing incarceration rates. The last three decades have seen the implementation of new “tough on crime” policies such as three-strikes laws, truth in sentencing laws, and mandatory minimums. 1 These laws have led to a significant increase in the number people who are incarcerated for non-violent offenses”.ALEC wrote model legislation corresponding to each of these factors as shown at the ALEC Exposed 2 site created by PRWatch that lists all of ALEC’s model bills including criminal justice 3.
ALEC’s corporate members such as Corrections Corporation of America (CCA) and Wackenhut (now Geo Group) were in on the planning of these new laws and realized the potential for profit once state prisons reached capacity and began to overflow. By 1984 CCA signed their first of hundreds of contracts (Tennessee) to house state prisoners at a profit. In 2009 CCA was instrumental in developing, funding and getting passage of the SB 1070 immigration legislation in Arizona…because they have huge contracts with the federal government to house alien immigrant detainees. Each of these detainees cost taxpayers as much as $60,000 per year per bed that is quickly transformed into profits for CCA.
In 1980 there were a total of just over 500,000 prisoners nationwide. There were fewer than 100 prison factories from coast to coast where less than 5,000 inmates worked making products used by the prisons, state schools, agencies and departments. A total cost for incarceration in 1980 was approximately $18 billion compared to today’s cost (in 2008 dollars) of over $75 billion:
As the charts above and below from “The High Budgetary Cost of Incarceration”, John Schmitt, Kris Warner, and Sarika Gupta, 2010 shows, while crime rates have remained relatively static since 1980, implementation of ALEC-styled legislation has caused incarceration to soar – along with the costs of paying for it.
Sales of prison made goods in 2010 reached $2.4 billion dollars with products manufactured in more than 1,000 factories employing between 600,000 and 1 million prisoners. Many of these prisoners are working for private companies “partnered” with state prison industries under contracts allowing slave-like labor for manufacturing.
This brings us to Nevada and the current controversy surrounding the use of inmate labor and low cost subsidized leases. Multiple steel companies’ complaints of unfair competition by Alpine Steel company for fewer and fewer available projects/contracts have been presented to the legislature and Governor Sandoval.
The prison industry discussion in Nevada is important to the future of not only Nevadans; businesses, consumers and workers, but to the country as a whole. The use of prison labor to take jobs away from private citizens and cause the closure or loss of business to private sector companies has been occurring across America for years. Nevada is not the first state to face this problem, simply the latest – and the first to really attempt to address the problem.
Another first is the entry of organized labor into the discussion. Historically they have been critical of these industries causing job displacements on the outside – but those criticisms were voiced after the fact. In Nevada the AFLCIO and other union leaders have waded in on this controversy as it has developed, and both legislators and Administrators are listening.
In the mid-1990s, Lockhart Technologies, Inc. partnered with Wackenhut Corrections (now known as GEO Group) to operate an industry program at a Wackenhut prison in Lockhart, Texas, assembling computer and electronic components. Wackenhut built an industrial workspace at the facility and agreed to lease the 25,000 sq. ft. space to Lockhart for $1.00 a year. Once the program was up and running, Lockhart closed its business operation located in nearby Austin, Texas, resulting in the termination of 150 employees 5.
Lockhart owner Leonard Hill was candid about his use of prison labor;
“Normally when you work in the free world, you have people call in sick, they have car problems, they have family problems. We don’t have that [in prison].”Edward Sills, a spokesman for the Texas chapter of the AFL-CIO discussing the loss of jobs in Austin, stated:
“The incentive for companies to go into the prisons is pretty clear in some cases. They don’t have to pay all the benefits, in some cases they pay very few of the benefits, that an outside company has to pay in the regular marketplace.”In 2006, Texas Correctional Industries partnered with a private company in a prison industry program that manufactured flatbed trailers at the Michael Unit in Tennessee Colony. The private sector PIECP partner was Direct Trailer and Equipment Company (DTEC), owned by a former Texas prison employee. The Texas Private Sector Prison Industries Oversight Authority had failed to contact local union and labor groups prior to authorizing the operation. They also failed to contact Lufkin Industries or Bright Coop – Texas-based companies that manufactured the same type of trailers as DTEC.
Due to those failures, Lufkin and Bright were unaware that they faced a new competitor that was using cut-rate prison labor. With sales falling, Lufkin attributed the loss in business to the bad economy. The company decided to close its trailer division in January 2008; 90 employees were transferred and 60 were let go.
An investigation by Lufkin officials exposed the competition from DTEC’s prison industry program. It was further revealed that the trailers manufactured using prison labor were similar to Lufkin’s trailers but were being sold for as much as $2,000 less, due to DTEC’s reduced operating costs through the PIE program 6.
Texas lawmakers, concerned over the loss of jobs in Lufkin’s trailer division, quickly got involved. They discovered that failures by the state’s Private Sector Prison Industries Oversight Authority had led to unfair competition – including prisoners being paid minimum wage with no employee benefits, and DTEC being allowed to lease the industry facility at the Michael Unit for $1.00 a year.
Following the Lufkin debacle, Texas legislators passed a bill to correct problems in the state’s PIECP programs (HB1914 / SB1169). Under the new law, the Private Sector Prison Industries Oversight Authority was disbanded and oversight was transferred to the Texas Department of Criminal Justice. The law, which was enacted in 2009, prohibits any PIECP program that would result in the loss of free-world jobs to prisoners. The PIE program with DTEC was discontinued after the company’s contract expired on March 1, 2009 and was not renewed. Texas still operates four PIECP programs, including the manufacture of aluminum windows and AC parts and heating valves.
Another PIECP program that resulted in the loss of free-world jobs involved Omega Pacific, a company located in Washington State that produced carabineers and other climbing equipment. In December 1995, Omega Pacific fired 30 employees and moved its operations to the Airway Heights Corrections Center near Spokane.
Company owner Bert Atwater lauded the rent-free workspace at the facility and the use of low-cost prison labor, where:
“The workers are delighted with the pay; [there are] no workers who don’t come in because of rush hour traffic or sick children at home; [and] workers ... don’t take vacations. Where would these guys go on vacation anyway?” 7Also in Washington State, Talon Industries, a company that used water jet technology, was forced out of business in 1999 and had to lay off 23 workers due to competition from MicroJet, a company that participated in a PIECP program at the Monroe Corrections Center. MicroJet was a contractor for Boeing that produced airplane parts.
In Missoula, Montana in 2011 the owners and operators of Missoula's J&R Planing say their competitor's prison connection has created an unfair advantage that it couldn’t compete against, causing a loss in contracts resulting in the potential displacement of workers at J & R. 8 State Rep. Ed Greef, R-Florence, introduced a House Bill (519) before the House Judiciary Committee to terminate a contract that Rocky Mountain Timber Products had with Montana Correctional. The legislation was defeated.
As shown this competition between prison industries “training” programs are being used to provide unfair advantages to specific companies. In Nevada it is Alpine Steel and has previously involved Shelby American (Shelby Mustang), Thomson Equipment (water trucks and other heavy equipment) and several other companies and products.
These are just a handful of the documented cases that have been reported nationwide over the past three decades.
The similarities are striking:
1. Lost jobs in the private sectorThe foregoing examples reveal at first blush that the individual number of jobs lost in specific industries lack significance. However when you begin to add the numbers state by state, industry by industry those numbers are significant. In Nevada several owners of steel companies I interviewed stated that because of the low labor costs to Alpine Steel, they lost numerous bids for jobs. Many times each company lost at least 5-6 potential jobs per year which hampered their ability to expand and employ more qualified steel workers.
2. Low cost leases provided to these prison-based companies
3. Wages paid at minimum wage or less regardless of skill set or experience
4. Loss of income to competing companies in the private sector due to inability to compete
5. Reduced operating costs to prison companies by no requirement to provide insurance, healthcare, vacation or sick time to inmate workers, lower wages and no unemployment premiums paid
6. Occurring repeatedly in individual states without notice by authorities in neighboring states or areas of the country
At the core of this problem is the fact that oversight of all prison industries in the U.S. is conducted by one private, non-profit trade group operating under a grant from the U.S. Department of Justice’s Bureau of Justice Assistance. This trade “association” is the National Correctional Industries Association (NCIA) headquartered in Washington, DC. The chairman of the NCIA is Nevada’s Deputy Director of Prison Industries, Brian Connett. In the Montana case provided above, the head of Montana’s Correctional Enterprise is Gayle Lambert. Ms. Lambert is also a member of the Board of the NCIA.
This is important because the NCIA represents state prison industry administrators, corporations, businesses, vendors and suppliers of products to prison industries. It also represents the companies partnering with those industries and using inmate labor in manufacturing. They lobby on behalf of their members for more access to prison labor, more factories built to increase such access.
Most importantly of all – is the fact that in 1995 the lobbyist for the NCIA (TX. Rep. Ray Allen [R]) was able to secure oversight over state prison industry operations for the NCIA, while also an ALEC member who later became the chairman of ALEC’s Criminal Justice Task Force. In 1994 Allen introduced legislation in Texas to expand prison industries under the federal PIECP program. In 1995 he took that legislation to ALEC who then adopted and disseminated that same legislation under the title “Prison Industries Act.” This is the legislation that has been enacted in one form or another in more than forty states.
In Nevada, the prison industries has been failing to submit proposed new industries, products or contracts with private companies to the Board of Prison Commissioners (BPC) as required by Nevada statutes. Instead the Deputy Director has submitted such proposals to the Legislature’s Interim Finance Committee on Industrial Programs. With approvals from that Committee, the NDOC simply signed the contracts and began manufacturing products without notice by the BPC.
One could be forgiven for thinking that skipping the BPC’s approval is not really that important, with a legislative committee there to review and thoroughly consider new prison industry contracts or programs and thus protect Nevadans. They would be wrong, though.
This Committee has one individual that represents labor (Teamsters) and members from the business committee that is supposed to represent business interests (Casino’s and moving and storage representatives). Unbeknownst to most is that an active member and Former National Director of ALEC also sit upon that committee - Senator Dean A. Rhoads. 9
In recent minutes of the “Committee” meetings they discussed a new proposed industry: recycling. 10 Deputy Director Connett brought this proposal before the committee, urging support for this new industry. In the meeting the Committee approved continued negotiations with a California company to initiate the program.
While the NDOC’s Prison Industries has been pursuing this recycling industry, State Senator Barbara Cegavske (R-8) has been lobbying and advocating on behalf of the company wishing to start this recycling industry. She has spoken with lobbyists in Las Vegas, asking at least one to support this “green” industry and has discussed it with business owners in Southern Nevada about supporting the project. Senator Cegavske does not appear to have a legislative position 11 that would necessitate her involvement in promoting anything involving Nevada’s prison industries or recycling, for that matter.
However, Senator Cegavske is ALEC’s Nevada State Chair and member of ALEC’s Education Task Force. 12 A review of her sponsored and co-sponsored bills reflects many of ALEC’s initiatives introduced or supported by the Senator. 13
So in Nevada more than 18 years after ALEC adopted and began disseminating their Prison Industries Act, two of ALEC’s members are actively involved in promoting prison industry partnerships between the state’s prison industries and private companies. In the absence of any further review or approval from the Board of Prison Commissioners, it is easy to see how such contracts between private companies and the NDOC have advanced quietly and hidden from public view.
Prison Industries are a key element in ALEC’s toolbox of lowering wages, attacking collective bargaining and providing cheap slave-like labor to select companies and corporations. Their early and continuing ties to the NCIA help facilitate increased corporate profits through participation in prison industry programs at the expense of taxpayers, local workers and competing industries that remain unaware of the competition from prison labor and industries.
The involvement of two state lawmakers with an allegiance to ALEC in Nevada helping to advance prison industries is typical of the manner in which the organization continues to exert control over such lucrative legislation once installed. Nevada became a PIE Program participant in 1985 and has had several industries involved in the program since. 14
In 1986 a Nevada legislative committee made recommendations to install a nine member “prison advisory board” concerning prison industry operations, fees for license plate manufacturing and encouraging private companies to become involved in partnerships with Nevada’s prison industries. 15
Findings of the legislative committee were enlightening and revealed how an early relationship with the National Institute of Corrections and “the Superintendent of Illinois Correctional Industries” to assess the then current Nevada industry program produced funding for the committee’s study: 16
Almost immediately Skolnik left Illinois’ Prison Industries and assumed the position of heading Nevada’s prison industry programs, while remaining a member of the NCIA Board and affiliated with the NIC. In essence he was used by the Nevada legislative committee to design the state’s prison industry operation and then assumed overall control of that which he helped create. From 1986 to 1989 Skolnik was the expert in the field of prison industries used to advance partnerships between private manufacturers and prison industries.
Mr. Skolnik was a long time member of the NCIA as was the current NDOC Deputy Director, Brian Connett. Connett was handpicked for his current position by Skolnik and assumed those duties in 2007 – without being vetted by the NDOC, the Board of Prison Commissioners or the Interim Finance Committee, as required by Nevada Statute – and the recommendations provided by this very committee.
Under Skolnik Alpine Steel would enter into the initial contract with the NDOC’s Silver State Industries in 2006. Several other companies would also take advantage of the cheap wages and low cost facility leases. Some, like Alpine Steel still remained in partnership with Silver State Industries.
Finally to flesh out the picture of corporate profiting off imprisonment in Nevada: an ALEC member, Jerry Watson representing the American Bail Coalition met with Skolnik in March 2009. Through Skolnik Mr. Watson was provided inroads to the Nevada Senate to provide that body with a proposed model ALEC bill. 19 This was the “Early Conditional Bond” 20 just adopted by the ALEC membership in January of that year. This legislation proposes a state offer early release (privatized parole) to state prisoners in exchange for posting a surety bond through one of the ALEC/ABC member surety companies. The prisoner would pay a non-refundable 10 to 15 percent fee for this bond, his family would post collateral to insure he/she would not reoffend and the released offender would be required to abide by conditions established by the private bond company and in the case of a “perceived violation”, could be returned to prison and the bond forfeited.
This demonstrates how prison industry operations were just one of several initiatives promoted by ALEC to realize profits off of imprisonment. Oversight of these industries, once the responsibility of federal agencies were co-opted by ALEC and transferred from the federal government to a private trade association – now chaired by the NDOC Deputy Director. It explains how this program has swept the nation across a decade and a half and in its wake has left tens of thousands of Americans without jobs. It has also limited expansion of businesses competing against companies with access to prison labor, removed job opportunities from the public and private sectors and helped to keep unemployment rates in Nevada and elsewhere at record levels.
Howard Skolnik was an enabling tool used by prison industry advocates to advance private partnerships between companies and state operated prison facilities. He was in the perfect position of power and influences to help advance the industry’s pursuits of profits and continue to expand operations due to his positioning within the NIC, NCIA and NDOC. Further he was supportive of ALEC’s subsequent legislative agendas to pursue more profiteering off of incarceration, by allowing ALEC an inside track on lobbying lawmakers for their model legislation through his office. Didn’t hurt where Skolnik was understood to be a supporter of ALEC proposed legislation.
Skolnik’s tenure with the NDOC was fraught with allegations of corruption, including physical threats made to staff members. 21 Under Skolnik inmates were used on voter registration drives that were later investigated for submitting phony voter registration cards. 22 In 2010 under intense scrutiny for alleged corruption, Skolnik “retired” from the Corrections field, saying he wanted to spend more time with his family 23…without advising that he had already applied for the position of Director of New Mexico’s DOC two months prior to announcing his retirement as head of the NDOC. 24
Today, Skolnik’s handpicked protégé Brian Connett holds the same position of influence within the NDOC’s prison industry program, continuing to keep the conduit between the NIC and NCIA open to both organizations. Though more than 50% of Connett’s prison industries are now operating under the federal Pie Program he and Director Cox have attempted to deflect any mention of the program or Nevada’s participation in it. They have declined to identify the mandatory requirements of the program in hopes that the Board of Prison Commissioners and legislators alike will not notice that those regulations are not being complied with.
Former Senator, Richard Bryan has proposed that Nevada adopt the full federal PIECP’s mandatory program requirements as Nevada Administrative Regulations or amend the statutes to adopt them fully as a means of protecting Nevada’s workers and businesses. In response, Deputy Director Connett stated that if he had to pay wages comparable to those paid on the outside to the inmate workers; it would result in the closure of the state’s prison industry program. He should be reminded that comparable wages is in fact what the federal guideline requires – and his program continues to be in violation.
Nevada is the latest and possibly last opportunity to put a stop to this madness and become the starting point for returning jobs to Americans who have not committed criminal acts. The Nevada legislature authorized all this in 1986 and now in 2013 they can be at the forefront of bringing it to an end.
1. See, for example, Public Safety Performance Project (2007, 2008a), Abramsky (2007), Western (2006), Stemen,
Rengifo, and Wilson (2006), and Benson (2009).
5. See: Prison Legal News (PLN), April 1996, p.1; June 1997, p.1
6. See: PLN, Nov. 2008, p.12; April 2009, p.25
7. See: PLN, Feb. 2000, p.12; March 1997, p.1
8. Missoula firm says prison contract gives Anaconda competitor advantage, http://mtstandard.com/...
9. http://www.leg.state.nv.us/... and http://www.biodiversitypartners.org/...