In 1990 PRIDE's CEO, founder and drugstore magnate, Jack Eckerd and President Floyd Glisson both resigned from the PRIDE Board and corporation. Eckerd reportedly voiced the opinion that PRIDE"s new accounting procedures and a realization of the direction PRIDE was taking under new administrative personnel was troubling to him, and he didn't wish to be a part of the "new" PRIDE.
After ten years of hard work and implementing groundbreaking technology in industry operations, overcoming public mistrust of the use of prison industries to "save" tax payers money, and establishing a rapport between PRIDE industries and many private sector competitors, the "Old Guard" were forced out. Those who caused this change in leadership were individuals with substantial desires to make money - and lots of it - in whatever manner possible.
In his place the "new" face of PRIDE took over and immediately made an abrupt right turn in both operations and philosophy. Pamela Jo Davis was selected as President and eventually became CEO.
In order to understand the current prison industry and privatized prison phenomena, one must revisit the 80's to completely understand who was involved in developing these privatization efforts and what their objectives were. We started with PRIDE in 1981 and will briefly cover the periods from then through today.
Prior to 1991 Pamela Jo Davis was already the darling of Florida politicians and could do nothing wrong in the eyes of legislators and those representing a new way forward for the Sunshine state. Davis previously worked for Motorola, developing one of their programs and when she was hired away from the corporation by Eckerd, she represented big changes for PRIDE and after assuming the helm of PRIDE in 1990, went right to work. At the time, many wondered just who was Pam Davis...
Davis was a member of the Correctional Industries Association and as such had influence within that group dedicated to advancing prison industries. PRIDE had shown it's ability to turn prison industry operations around: prior to PRIDE taking over the entire state industry program, those industries were outdated, rundown and costing the taxpayers millions of dollars a year to operate. Under Eckerd and Glisson all of that changed and by 1983 the Florida Prison Industries were bringing in a profit to the state. It continued to do so throughout Eckerd's involvement. This was the viable and mildly profitable corporation Eckerd had made and turned over to Davis in 1990.
Davis was affiliated with Florida Tax Watch, a watchdog group that looked after Florida's taxpayer dollars and sat on the Board of the Florida Chamber of Commerce. In 1999 she was appointed to the Florida Council of 100 by then Governor Jeb Bush. Davis was the recipient of the "Davis Award" in 2003 from Governor Bush. This award was sponsored by the Council of 100 and Florida Tax Watch (naturally)...but I've digressed by going forward in time. Let's go back to the core of it all...
A number of corporations took notice in 1983 as the facts and figures became public, demonstrating a profit being earned off of inmates by PRIDE through the privatization of Florida's prison industries. CEO's of private sector companies wondered how their corporations could get in on profiting from the use of inmate labor. In their search for answer and how they too could profit, their quest was observed and taken up by some conservative political groups and organizations.
There is a distinct connection between privatized prisons, industries and conservative political idealists that has existed for more than a quarter century now. It goes back further than the ALEC connection and is probably one reason ALEC has been so successful. This link takes you to an article published in 1988 by "The Heritage Foundation." It should come as no surprise that this "Foundation" was at the center of the push for privatized government operations across the board, but most of us had no idea of their involvement way back in the mid-80's. This article is informative about corporate involvement in prison and prison industry operation, even way back then: GE, Bechtel Corp., RCA, and the list goes on. An interesting sidebar to this article is that it was previously published by the Heritage author, Dana Joel - word for word - in a 1985 article, "A Guide to Prison Privatization."
In 1986 a study was undertaken by the American Correctional Association titled: "A Study of Prison Industry." A look at those involved in this study reveals participation by all of today's players way back in 1986 and all pushing for increased privatization and use of inmate labor.
One paragraph describes how assembly of components allows for the use of inmates in segregation to also be provided work opportunities. What they meant was it enabled prison industry to have access to even more inmate workers, even those housed in a prison within a prison.
So progress was slowly being made in the quest to privatize more and more government responsibilities by the right leaning associations, organizations and businesses from 1985 through 1990. Even though PIECP was not well known or fully understood back then, it was on the books, mentioned briefly in articles and dismissed as seekers of profits looked elsewhere. The Reagan administration promoted the privatization concepts put forth by the likes of The Heritage Foundation and ALEC. In fact ALEC's power base and influence exploded during the Reagan Presidency.
By 1989-1990 all the pieces were in place for privatization and those involved began to turn a serious eye toward PIECP and how the program's authorization of the use of prison labor could be used to full advantage.
In Florida Davis was in the unique position of heading up the private corporation operating the state's prison industries, while sitting on several influential Boards; Chamber of Commerce, Florida Tax Watch, Correctional Industries Association and belonged to the National Correctional Industries Association. She was able to use her position in each to begin to laud the successes PRIDE had made in the use of prison labor and suggested that further efforts involving PIECP could allow for huge profits while serving the public need for incarceration.
There were two substantial hurdles that stood between Davis, PRIDE and the huge profits Davis sought: PRIDE was a non-profit corporation and as such there were restrictions that limited salaries and disbursement of non-profit funds - at both the state and federal levels. Additionally the way the PIECP was set up provided that the state department of corrections of each state were the holders of the PIECP "Certificate" authorizing participation in the program. PRIDE needed a way around both stumbling blocks.
PRIDE's General Counsel, Resident Agent and registered Lobbyist, Wilbur Brewton was consulted on how to circumvent the obstacles. PRIDE held a strategic planning workshop in 1997 to find a way forward.In 1998 A Business Development Consultant was employed. The goal was expansion of government contracts, and developing markets for their inmate labor.
The conclusion was to form a "holding company" and several separate corporations under that entity. This holding company would umbrella and shield PRIDE and the other corporations. In addition PRIDE would have to lobby for the enactment of a state law that allowed for the transfer of the PIECP certificate from FDOC to PRIDE. At least two other laws would have to be enacted to allow PRIDE to participate in PIECP - as required under 18 USC 1761(c) and give them control over the funds deducted from inmate wages. Additionally operating capital was needed to offset the funds they would have to spend lobbying for the laws they wanted.
In 1998 the campaign began and within a year everything was in place. Lobbyists had been successful in garnering the necessary support to propose, pass and enact a new Florida statute, Chapter 946 that addressed inmate work programs under PIECP.
In 1999 legislation was enacted that transferred operation of the PIE Program from FDOC to PRIDE (Chapter 99-260). This session also appropriated $3.65 million from the Correctional Trust Fund to the FDOC for the construction or maintenance of PIE work program buildings. With the transfer of certificate came the $3.65 million to PRIDE, who had now successfully transferred all PIECP authority from the DOC to the corporation.
Immediately PRIDE and Davis went to work on PIECP. They established nine for-profit and non-profit Florida corporations. At the top of the list was Industries Training Corporation (ITC). This was to be the "holding company" under which PRIDE and all others would operate. The other spin-offs were: Global Outsourcing, Global Outreach, Labor Line Services, Labor Line, Inc., Florida Citrus Producers, Florida Citrus Partners, Inc., Diversified Supply Management and Northern Outfitters, Inc. (this corporation bought by PRIDE uses Utah inmates to manufacture cold weather gear - is still in business headquartered in Jacksonville, Florida).
It did not matter to PRIDE, Davis and her cohorts, chief among them attorney Brewton, that the formation of these nine corporations that were to be involved in state prison industry operations were illegal under F.S.946-502(2) that limited the number of corporations involved in operating the prison industries to one (1).
Among many PRIDE personnel and Board members involved in this scheme only two were involved with every one of the spin-offs - Brewton and Davis. Davis was upon every Board, President of many and incorporator of each. Brewton filed the corporate paperwork establishing all of the corporations and served as Resident Agent for each. If anyone on the PRIDE team was aware of the illegality of the scheme under Florida law, it should have been Brewton, but he was going to make to much money off of it to let something like legality stand in his way.
PRIDE's Mission Goals of training and placement of released offenders fell by the wayside as Davis pushed PRIDE further to the right to exploit PIECP for all she was worth. She and Brewton worked diligently to garner PIECP partnerships with private manufacturers, promising them larger profits through an opportunity to join their "innovative" PIECP prison labor program.
PRIDE's Board approved resolutions to loan these nine spin-offs operating capital to "get started". These loans have been determined to amount to at least $19 million and many estimate that overall as much as $37 million in PRIDE non-profit funds found it's way into the hands of these spin-offs. These "loans" had no repayment clauses, interest or terms. After removing their PRIDE Board member hats, the Board, Davis, PRIDE CFO and others then walked across the hall to the new spin-off offices, sat down and accepted the generous loans. Once received they paid themselves handsome salaries (in addition to those they were receiving from PRIDE) and approved bonuses for their "efforts". Then, switching back from their alter ego personae, they all went back to the PRIDE Boardroom and began forgiving the loans, as the spin-offs were not performing as intended - yet - so they loaned more money while writing down the original amount of each debt. In addition the PRIDE Board also passed resolutions assigning no-bid contracts to the spin-offs (themselves, really) and began issuing payments under the contracts - and of course receiving those payments and turning them into more bonuses and higher salaries at the spin-offs.
While all of this was going onbetween 1999 and 2004, PRIDE was suffering losses (imagine that). Their sales had decreased, the number of inmate workers had declined as had their job positions. Government agencies and the public began to scrutinize the state's prison industry and PRIDE, wondering if the privatization was beginning to fail.
Though PRIDE held the PIECP certificate and was the only corporation authorized to utilize inmate labor and transport prisoner made goods across state lines under PIECP, Davis and Brewton ignored these provisions. They marketed the program to unwary manufacturers as a PRIDE program and when it came time to sign the contractual partnerships, they advised potential partners that in order to avoid having to pay inmates the prevailing wages required, it was necessary for them to partner with one of PRIDE's subsidiaries - usually ITC or Global Outsourcing.
Brewton issued letters with his legal judgment and opinions that the manufacturing processes in the partner PIECP operations were "service" industries, i.e. transmission refurbishing, where the product that comes in one door is the same product that goes out the other. He did this even in cases such as the food processing industry partnered with ATL Industries. In a letter to PRIDE, Brewton outlined his "understandings" of the operation performed for ATL: that raw bulk meats were to be ground up without the addition of other ingredients, or processing, that the products would be boxed up and shipped directly back to ATL. He knew - as did PRIDE - that the contract called for the mixing of many ingredients, and processing to add breading, flavoring and to process the meat for human consumption and taste. He also knew that the products were not shipped back to ATL, rather they were shipped nationwide from PRIDE's docks at U.C.I. Designating these partnership operations as "service industries" also allowed the work to be done without paying the required prevailing wages to the inmate workers. Both the addition of ingredients and failure to pay the required wages on shipments of prison made products across state lines were/are federal felonies when these acts are committed by a prison industry that is not considered a "service industry". But Brewton and PRIDE ignored these laws. They believed membership in the NCIA and their influence within the NCIA would allow them to claim they were in compliance on reports to the BJA and shield them from prosecution.
These partnerships were further illegal in that to use inmate labor, the prison facilities owned by the FDOC and state would have to be used. These industry buildings were all situated upon state owned land and by statute the only corporation or company authorized access to or use of the property and facilities was PRIDE. Period. The inmate workforce was provided by FDOC and by law the only corporation allowed to use that workforce was PRIDE. But Global, ITC and the others were granted access to the facilities and use of the inmates by FDOC without question or objection.
(It should be noted that the FDOC Secretary holds a permanent seat upon PRIDE's Board of Directors. This may explain how PRIDE and Brewton were able to accomplish these violations with no questions asked. In addition, the FDOC Secretary, James Crosby was indicted by the U.S. Attorney General in 2006 for kickbacks and corruption involving drug sales and embezzlement of funds from the DOC Recycling Program. He an another top DOC official pled guilty and were sent to federal prison).
After the 5 separate takeovers of the private businesses owned by partners of PRIDE and their subsidiaries, complaints were lodged with the Governor's office and other agencies there in Florida. The Governor ordered an audit of PRIDE's books and they refused to comply. This resulted in a lengthy battle between PRIDE and the Attorney General's office. Finally in 2004 the AG rendered his opinion that PRIDE had to submit to the audit. From that point on everything began to fall apart for Davis and the others - except for good ol' Wilbur Brewton. While Davis and PRIDE were scrambling trying to cover up what they could and stall for time in which to do so, Brewton was busy resigning as Resident Agent for all of the corporate spin-offs and according to multiple sources was busily transferring as much as $50 million in assets to family members as the Florida IG's report was due to be released and he feared his position in the scheme could result in possible criminal prosecution.
By 2006 Davis and the others involved - including 5 board members were asked to resign their positions. PRIDE was ordered to sever all connections with the spin-offs and attempt to recover the money loaned to them. Brewton was no longer PRIDE's general counsel and Jack Edgemon had taken Davis' place as head of the corporation as President, the CEO position being eliminated.
2006 is also the year I began making trips to Florida and giving presentations to the "new" PRIDE Board and the year FDOC Secretary Crosby was arrested and replaced by James McDonough as interim Secretary.
In the next segment we'll discuss the dissemination of PRIDE philosophy to other prison industries and identify just what the NCIA really is and who sits on their Board and directs the activities involving PIECP, I'll also discuss with you the efforts of Secretary McDonough to abolish PRIDE altogether - and why.