Heroin and Cornflakes

“A budget is more than simply numbers on a page.  It is a measure of how well we are living up to our obligations to ourselves and one another,” says President Barack Obama on the home page of the Office of Management and Budget.

Elegant words.

But is there any credence in his statement?

Let’s take a closer look at where part of the budget is allocated, namely the US correctional system, and see if  he is living up to his obligations.

More than 7.3 million Americans are confined in U.S. correctional facilities or supervised in the community, at a cost of more than $68 billion annually.

Since December 31, 1995, the U.S. prison population has grown by an average of 43,266 inmates per year.

There were an estimated 509 sentenced prisoners per 100,000 U.S. residents last year.(1)

At midyear 2008, there were 4,777 black male inmates per 100,000 black males held in state and federal prisons and local jails, compared to 1,760 hispanic male inmates per 100,000 hispanic males and 727 white male inmates per 100,000 white males.   On any given day more than 126,000 youths are serving time in jails and prisons based on rates from the year 2007.

What types of crimes are committed and are there any underlying reasons?

In 1994 there were approximately 234,000 offenders convicted of rape or sexual assault under the care, custody, or control of corrections agencies.

Alcohol use at the time of the offense was commonly found among those convicted of public-order crimes, a type of offense most highly represented among those on probation and in jail.

Among violent offenders, 41% of probationers, 41% of those in local jails, 38% of those in State prisons, and 20% of those in Federal prisons were estimated to have been drinking when they committed the crime.

Of the 272,111 persons released from prisons in 15 States in 1994, an estimated 67.5% were rearrested for a felony or serious misdemeanor within 3 years, 46.9% were re-convicted, and 25.4% re-sentenced to prison for a new crime.

This recidivism would suggest incarceration is far from unpleasant.  However, a 2007 Bureau of Justice Statistics (BJS) survey would suggest otherwise.  The survey, based on self-reporting, estimated that 60,500 federal and state prisoners had been sexually abused by staff and other inmates in a twelve-month period.

The National Prison Rape Elimination Commission.

This is also collaborated by The National Prison Rape Elimination Commission – a panel of 9 people hand picked by President G W Bush and the senate in 2003.

The Commission presented its final report, three years later than first anticipated, and proposed standards on June 23, 2009 to the President, Congress, the Attorney General, the Secretary of Health and Human Services, and other federal and state officials.

Jamie Fellner, senior counsel for the US program stated:

“The history of prison rape is a history of officials who denied the problem existed, tolerated it, or thought nothing could be done to stop it. The Commission’s work makes clear that such attitudes should have no place in the American prison system.”

In all, the commission made 9 key recommendations, 2 of which stated:

a)   Protecting prisoners from sexual abuse remains a challenge in correctional facilities across the country.  Too often, in what should be secure environments, men, women, and children are raped or abused by other incarcerated individuals and corrections staff.

b)   Juveniles in confinement are much more likely than incarcerated adults to be sexually abused, and they are particularly at risk when confined with adults.  To be effective, sexual abuse prevention, investigation, and treatment must be tailored to the developmental capacities and needs of youth.

While the integrity of the Commission is not doubted, does it really take 6 years to come to these conclusions?

It took this writer 5 minutes to find this video clip.

and this 3 year undertaken report, No Escape, Male rape in US prisons by Human Rights Watch in 2001.

Both gave immediate impressions of life in in correctional facilities.  Surely a few ideas for prison reform can be gathered in a much quicker time frame.

How much did the Commission cost the tax payer?

The total cost has yet to be finalized.  However, it was known from the onset that:

‘The members of the Commission shall be allowed travel expenses, including per diem in lieu of subsistence, at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5 while away from their homes or regular places of business in the performance of service for the Commission.’

OK, that’s only small change compared to the $ billions that are allocated to correctional expenditure.  Where does the rest of the budget go?  How are the costs broken down?

Take a typical drugs arrest.  According to the Schaffer Library of Drug Policy, it costs approximately $450,000 to put a single drug dealer in jail.  This includes the cost of arrest, conviction, room, and board.

What about costs incurred after sentence?

A major expense concerns health.  As the prison population increases, it suffers from chronic illnesses such as AIDS and hepatitis. Considering the high incarceration rates amongst African-Americans it may come as no surprise.

Recent Studies reveal African-American adolescents have some of the highest rates of HIV infection in the United States.  Despite comprising only 15 percent of the population, young African-Americans make up 61 percent of the new HIV cases among people under age 25.

In the region of North Carolina where the new study took place, 85 percent of HIV/AIDS cases occur among African-Americans.  The escalation of this incurable virus illness amongst a long term captive population is almost inevitable given the sexual abuse figures and that the virus is transmitted person to person.

It’s just as well inmates are the only Americans with a constitutional right to health care.  However the cost to deliver it is on the rise.  States are spending 10 percent of their corrections budget on average to cover the cost of inmate health care.  The annual bill is a total of over $3 billion.  Tax payers foot the bill.

Who gets the money?

America Service Group Inc. is one recipient.  It recently announced that the Company’s operating subsidiary, Prison Health Services (PHS) and the State of Michigan Department of Corrections have agreed an initial three-year contract under which PHS will provide prisoner health care services to the approximate 49,000 prisoners under the care of the department.  The initial state wide contract commenced on April 1, 2009  and generates revenues of approximately $325.6m.

Incorporated in 1990, PHS has contracts to provide and administer managed health care services to over 120 correctional facilities throughout the United States.   Prior to May 1, 2007 the Company, through its subsidiary Secure Pharmacy Plus, LLC (SPP), was also a distributor of pharmaceuticals and medical supplies.  America Service Group Inc. announced that for fiscal 2009, it expects total revenues of $600.0 million to $610.0 million, pre-tax income of $13.5 million, and net income per common share of $0.91.

Chief Executive Officer of America Service Group Inc.  Richard Hallworth received an annual salary of $709,391.  Its new non- executive chairman effective January 1, 2009 is Richard Wright who donated $90,315 in Political Contributions for 2008.

OK, that’s health. What about other costs?  Where does the rest of the money go?

Of course, prisons need food, beds and security operatives.  Many are supplied by private corporations.  There are around twenty-six private prison corporations.  However, the figures are likely to decrease due to the consolidation of these companies.

The largest of these prison companies is Corrections Corporation of America (CCA), which was founded in 1983 and now constitutes the sixth-largest prison system in the nation, trailing only the federal system and the state of Texas, California, Florida, and New York.

CCA recently posted this message to its shareholders:

‘Letter to Shareholders – CCA celebrated its 25^th year in business by reporting record revenues and net income in 2008, highlighting the strong fundamentals of our business even during a year marked by economic turmoil and recession. Total revenues increased 9.8% to nearly $1.6 billion and net income per diluted share increased 13.2% to $1.20 compared with the prior year.

We believe our excellent results underscore our sound operation model, strong financial condition and the continued demand for new prison beds from federal, state and local customers.’

The largest shareholder in CCA is Sodexho, a multinational corporation with headquarters in Paris, France.  In 2008 Sodexho’s revenue was 13.6 billion EUR…. profit 347 million EUR.

The second largest private prison company is Wackenhut, a corporation that also specializes in private security. Wackenhut has annual revenues of over $1 billion derived from its prison and security ventures. Wackenhut is a subsidiary of Group 4 Securicor which forms the largest global network of security operations worldwide, with 430,000 full and part-time employees.

They merged in 2002 when Group 4 Falck acquired all of Wackenhut’s common stock for $573 million – company founder George Wackenhut receiving a parting compensation package worth roughly $124 million.

The management for CCA and Wackenhut is largely composed of former high-ranking corrections and law-enforcement officials including; a former head of the FBI, a former CIA director, a former CIA deputy director, a previous head of the Secret Service, a former attorney general, a former head of the Federal Bureau of Prisons, the former chairman of the Tennessee Republican Party, and the former director of the Virginia Department of Corrections.

So it would appear incarceration of prisoners is a bedrock for good business enterprise in the hands of influential governmental figures.

What about the prisoners?  Do they contribute to this enterprise via prison labor?

Prison labor is under the authority of Federal Prison Industries, Inc. (FPI), also referred to as UNICOR, a self-supporting, wholly owned Government corporation.  It was established during the administration of Franklin D. Roosevelt in 1934.

In 1997 Federal Prison Industries adopts the trade name UNICOR.  In 1983 UNICOR reported revenues of $161 million and net income of about $7 million.  The following year sales increased 23 percent to reach $210.8 million, and net income grew nearly 163 percent, to $18 million.

In 1996 UNICOR launched its product catalog online, with merchandise that covered : clothing and textiles; furniture, which accounted for about 40 percent of UNICOR’s sales; electronics, plastics, and re-manufacturing; metals; and graphics and services, such as printing, data entry, laundry, recycling, and equipment repair.

In 1997 the Senate authorized a study designed to discover ways to make UNICOR more competitive.

Two years later  UNICOR operated 99 factories in 64 prisons in 30 states and employed more than 20,000 worker inmates, or 25 percent of eligible prisoners.  The corporation had sales of $566.2 million in 1999 and net income of $16.6 million.

In fiscal year 2008, UNICOR employed 21,836 inmates: 17% of eligible inmates held in federal prisons.  The company generated US$854.3 million in sales (Wiki) of which around $150.5m goes to government personnel.

Another sound business enterprise.  But are funds channeled back into the correctional system?

Federal rules prevent FPI income offsetting the costs of incarceration at all.  The taxpayer-funded Bureau of Prisons (BOP) pays for food, housing, recreation, education, health care, and security.  Federal rules also prohibit the use of FPI revenues for the construction or acquisition of prisons.

What about the inmates?  How much do they earn?  What are their working conditions like?

A recent study by (Davis and smith2006) gives us a clear indication.

The case study compared  two very different models for recycling obsolete computers and electronics hardware that have been created by the two largest computer makers in the U.S. — Hewlett Packard’s partnership with Micro Metallics of Roseville, California, and Dell Computers’ (recently renamed Dell, Inc.) partnership with UNICOR, the Federal Prison Industry at Atwater.

Firefighters respond to a fire at the UNICOR Facility at Atwater Prison in Atwater, California in November of 2003. The fire released the toxic chemicals found in electronic waste into the surrounding communities. It was the second fire at the facility in 5 years.

The problem of electronic waste (e-waste) is growing at an unsustainable rate.  E-waste is now the fastest growing, and most toxic, component of municipal garbage.  Companies are facing huge costs to handle e-waste. Recycling is both a means of preventing the land disposal of toxic metals in e-waste and recovering some value.

The study found that the two facilities differed dramatically in their transparency to the public.

The Atwater facility exhibited a “fortress UNICOR” mentality, allowing only restricted access to investigators.  UNICOR failed to respond to repeated requests to allow an industrial hygienist trained in occupational health and safety to inspect its facility, approving the visit too late for its findings to be included in the study.  During a visit by other inspectors for this study, both investigators and inmates were forbidden from speaking with each other.

However, the investigators were able to supplement their observations with testimonials from inmates, which are presented anonymously in the report to protect prisoners from reprisal.  The Atwater facility refused to provide air quality test results, claiming that this information would have to be sought through a Freedom of Information Act request addressed to the federal Bureau of Prisons.

In contrast, the Micro Metallics – Hewlett-Packard facility allowed an industrial hygienist to inspect freely, permitted investigators to speak informally with employees, and provided air monitoring and employee blood–lead test results. At Micro Metallics – HP, hazardous tools such as hammers were eliminated in favor of mechanized systems, such as crushers, that reduce worker exposure to toxic materials.

The Study found UNICOR used practices disturbingly similar to those found in developing nations, which were exposed in the 2002 report, Exporting Harm http://www.svtc.org/cleancc/pubs/technotrash.htm. Inspectors found harsh conditions, very few worker rights and protections that are guaranteed to hazardous waste recycling workers in the US, and lack of disclosure of its practices to the public.

The labor force at Atwater were paid .20 to $1.26 per hour.  In addition, the prison workers have few rights and little ability to improve health and safety conditions.

Prison laborers are not considered employees and are not protected against retaliatory acts by their employer (UNICOR) under the Fair Labor Standard Act.  Inmates are not allowed to unionize or to serve on the prison health and safety committees.

What about Dell Inc., one of many companies who benefit from these practices?  How do they fare?

As of 2009, Forbes estimates the founder Michael Dell’s net worth at $12.3 billion.  In 2005, Susan and Michael Dell were among 53 entities that each contributed $250,000 (the maximum legal donation) to the second inauguration of President G. W. Bush.

There you have it.

It would appear the President is correct in his assertion that ‘the budget is more than a set of numbers’.  In part it’s a story of how money is apportioned to corporate entities and certain individuals, at the expense of the taxpayer and prisoner, through the correctional system.

It’s the story of how these prisoners suffer through forced sexual practices and exploitation that rivals latter day slavery so high profit margins can be achieved.

It is clear to most that reform is desperately needed but it has to be questioned “is there a reluctance to implement these reforms for fear of lower profit margins?”

Many people are dependent on the whole criminal system.  From arresting officer to bed provider.  Many reap huge benefits, including shareholders from far afield as France, at the expense of the US convict.  It is a growth industry.

And it does not stretch the imagination to see that there are very influential figures that want to keep it that way, making it very difficult for reform to be pushed through.  But pushed through it must because there is a disproportionate amount of people being incarcerated in a supposedly democratic society.  These figures need to be lowered, especially amongst African-Americans.

Issues that need to be addressed include;

Why do so many people re-offend?   Are these people the perpetrator or the victims of sexual abuse in correctional institutions?  Is there some psychological force that drives them to re-enter prison?  Could it be the combination of no future prospects and the influence of alcohol disturbing rational thought.

We need to look at the contrasting situation of the legality of alcohol and banned drugs.  Alcohol (a legal drug) is an underlying influence in many criminal activities while fraternization with banned drugs result in a felony.  Would another attempt at alcohol prohibition be appropriate or would the legalization of all drugs have a greater impact on lowering correctional input?

Education, particularly of the young, is needed to lower prisoner numbers.  Give students an insight on how they become a cash cow once they commit a felonious act.  How they become a slave with no rights, no protection from sexual predators and have a high chance of contracting HIV.  In effect, ending up on death row.

Will change be forthcoming?

It’s taken 2 studies and 9 years to conclude changes need to be brought about regarding sexual abuse of the prisoner. Further time is still needed to implement these changes.  In this time many prisoners were, and continue to be, sexually abused.

These changes may or may not work.  The main issue here is that the whole system needs radical change.  We must look at reasons why our society turns so many of the community into habitual criminals.  Reduction of numbers entering the correctional system must be paramount even if it means no profit to be made.

Something must be done now rather than later.

It would be a major obstacle if the President is tied to the side of the profiteer.

If that is the case, the President of the USA is not “living up to his obligations” to all the people of his country.

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Ann Margrain

Founder, ‘Heroin and Cornflakes’ blog.

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More Prison statistics can be found at this site www.ojp.usdoj.gov

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