ON OTHER PAGES

The financial relationship between the corrections industry and academia is under scrutiny in Florida. This follows allegations that sponsorship of the Australian Institute of Criminology’s privatisation conference in Melbourne last July led to a biased programme being devised.

On 1 July 1997, the Florida Police Benevolent Association (FPBA) filed a complaint with the Florida Commission on Ethics alleging that Dr Charles Thomas, director of the University of Florida’s Private Prisons Project, had a conflict of interest between his involvement with private prison companies, his status as an independent academic researcher and his work for Florida’s Correctional Privatisation Commission (CPC). The Commission was set up in 1993 to contract with private prison operators.

Dr Thomas has denied the allegation and dismissed the complaint as politically motivated. He has since been exonerated by the University of Florida and the CPC. The Commission on Ethics is considering the complaint.

Two recent events led to the FPBA’s complaint, which although focused on an individual, has wider implications. Earlier this year, Corrections Corporation of America (CCA) proposed that the state of Florida should privatise eight prisons in the Miami area. The legislature rejected the idea, but not before the FPBA, which represents around half of the state’s 18,000 correctional officers, launched a campaign against it.

			$k
CCA	15	20	20	n/k	32
Pricor	3	2
US Corrections Corp	3.75	5	2.5	n/k
Wackenhut		5	5	n/k	25
Esmor		2	6.5	n/k	12
Eclectic			4	n/k
M&TC			3	n/k	4
CMA			1	n/k
Cornell					5
Totals	21.75	34	42	82.25	78

NB: No figures available for 93/4; Only a total figure available for 94/5. M&TC is Management & Training Corp. CMA is Corrections Management Affiliates. Pricor no longer exists. Esmor became Correctional Services Corp. Eclectic is Eclectic Communications Inc.

Then on 1 May 1997, it was announced that CCA Realty Inc. had appointed Dr Thomas to its board with a salary of $12,000 a year plus options to buy 5,000 shares. This new company, now trading on the stock market, was set up by Corrections Corporation of America as an investment trust specialising in prisons. It buys prisons and leases them back to the operators - so far it has only dealt in CCA prisons.

Since CCA has contracts to run prisons for the state and knowing of Dr Thomas’ $50 an hour consultancy work for the Corrections Commission since 1994, the FPBA believed there would be a conflict of interest if his consultancy continued while a CCA Realty board member.

The FPBA became even more concerned when they discovered that since at least 1990, prison companies, including CCA, had financed Dr Thomas’ Private Prisons Project. The money was - and is - channelled as unrestricted donations and gifts to the University of Florida Research Foundation. Documents supplied by the University of Florida show that the project received at least $258,000 between 1990 and 1996. But Dr Thomas has recently admitted that corporations have provided over $400,000.

The University of Florida pays Dr Thomas’ salary of $80,548. His expenses are reimbursed by the Research Foundation out of corporate donations. Dr Thomas’ summer salary ($26,845 this year) is also paid for by gifts and donations via the Foundation.

The final factor which led to the FPBA’s complaint was Dr Thomas’ stock market activities. In recent years, the leading prison companies have made record profits and the value of their stocks has soared. Industry and stock market analysts rely on Dr Thomas’ expertise for information and advice on developments and prospects. Dr Thomas has also acted as a consultant on a range of prison projects for firms such as Municipal Capital Markets Group Inc, Kidder Peabody Inc, Juran & Moody Inc and Citicorp Financial Services.

But Dr Thomas also owns shares in companies that fund his project and which he writes about as an independent academic researcher. He says that he has always avoided any conflict. On 29 May 1997 he told the CPC that his share holding is “hardly either new or secret information that is in violation of no policy, rule or procedure of the state university system or of any statute” which applies to the CPC. “However, because there is research funding provided through gifts and donations from the university and because I do own, not huge amounts but, I do own stock in some of the private corrections management companies ... I do not ever participate in the evaluation of any proposal that is submitted to any other governmental agency...”

The CPC claims that it was always aware of the corporate contributions to Dr Thomas’ project and was satisfied that hiring him would not violate any law. Meanwhile, a spokesperson for the Washington-based American Association of University Professors told the Florida Journal recently that “if you know the person has this ongoing relationship, you start to scratch your head a little bit.”

Regardless of the outcome of its complaint, the FPBA believes it is important that the public knows where the corrections industry’s money goes and how far it influences the privatisation debate.

The government has short listed five consortia to bid for 25 year contracts worth R10.5 billion to design, build and run four prisons. The consortia are Themba Le Afrika, Wackenhut, Ikhwezi, Siyakha Youth and Lungisa. As well as Wackenhut, other foreign companies teaming up with local construction firms are Group 4, Management and Training Corporation, Youth Services International and the Bunapuri Group of Malaysia. There will be a 1,500 bed maximum security prison in both Northern Province and Free State, an 800 bed youth detention centre in Mpumalanga and a 1,500 bed remand prison in Gauteng province.

Once contracts are awarded, construction is expected to take 18 months and the prisons will open early in the year 2000. If awarded contracts, these would be the first outside of North America for Youth Services International and Managament & Training Corporation.

The official opening by the Solicitor General on 28 August 1997 of Ontario’s first private prison, the Project Turnaround boot camp, was to have been a triumph for the government’s ‘get tough on young offenders’ strategy. But it turned into embarrassment when two teenagers escaped the day before - thanks to a bolt of lightning which exposed flaws in the facility’s security. Early in the evening of 27 August, two prisoners had been arrested and removed for allegedly assaulting a guard. Later, during a storm, the prison’s power supply was shut down and, as there was no back up, all the doors remained unlocked. In the chaos, two prisoners escaped but they were recaptured the next day. The Solicitor General has promised an internal review.

The boot camp is run by Encourage-Youth Corporation Inc. But since the breakout, eight state-employed corrections officers have been drafted in to guard the facility. Opposition politicians have renamed the facility ‘Camp Getaway’. Ontario’s Child Advocate has complained about the inappropriate transfer of young offenders away from their schooling and programming at their regular facilities and being brought to the boot camp in order to try and fill the 32 beds.

Nova Scotia on hold

There is now a consensus amongst the political parties in Nova Scotia that prisons should not be privatised. In 1996, the government contracted with consultants and the Atlantic Corrections Group Inc (ACG) to draw up plans for reconfiguring its corrections system. ACG reported in June 1997 and trade unions hope to be consulted in October. But in the light of a provincial election next spring, the unions, who have been campaigning against privatisation, do not regard the issue as resolved. Finance could be the key. ACG includes Management & Training Corporation Inc.

AUSTRALIA

Gorrie contract renewed

Queensland Corrective Services Commission has renewed a contract with Wackenhut to manage the Arthur Gorrie Correctional Centre for a further five years instead of the two years stipulated under the original agreement. Wackenhut has run the 578 bed facility since 1992. The new contract expires in June 2002 and is worth US$67.5m. Wackenhut’s subsidiary, Australian Correctional Management, also runs two other prisons in Australia.

Lost wages

According to the Community and Public Sector Union, prison officers have lost up to Au$7,000 a year in wages due to privatisation. The union claims that private prison officers at Fulham Correctional Centre start on a training wage of Au$17,000 which eventually increases to Au$31,000. An equivalent public sector employee would earn around Au$38,000. Giving evidence to Victoria’s Public Accounts and Estimates Committee on 28 July 1997, the union’s Peter Bertolus alleged that employees who transferred from (the now closed but formerly publicly run) Fairlea women’s prison to CCA’s Deer Park facility suffered an immediate reduction in pay. So much so that the union was “almost on the point where we are going to prosecute the company”. He also claimed that training was eight weeks in the public sector but just two weeks at Deer Park with inadequate ongoing training thereafter.

In the union’s view, a crucial factor in the companies’ pay scales is local economic conditions. For example, Mr Bertolus said that due to high unemployment in the Latrobe Valley area, Wackenhut was able to offer low wages as “they basically knew they had the capacity to monopolise the marketplace in terms of buying labour.”

n September 1997 sees the first anniversary of the opening of the Metropolitan Women’s Correctional Centre at Deer Park. In August, the Victorian government was assessing how much of the performance-linked fee would be payable to Corrections Corporation of Australia. The company has been paid fees for accommodation and correctional services.

IT contract problems

In South Australia, EDS, the American information technology company, was awarded a nine year contract in 1995 to run the whole government’s computer systems. But there have been so many problems, including cost increases rather than supposed savings, that a Select Committee of the South Australian Parliament had to hold an inquiry. The corrections department told the Committee that since the contract started “there has been a significant increase in the bureaucracy involved in getting things done.” The Opposition has called for the contract to be published but the government has refused on the grounds of commercial confidentiality.

n A major independent five year study of information technology ‘out sourcing’ has recently been published. The authors are sceptical about out sourcing, especially the claim that it is inherently more efficient. Beyond the Information Systems Out Sourcing Bandwagon, by Lacity and Hirscheim, published by John Wiley & Sons, Chichester, New York and Brisbane,1997.

NSW no need to privatise

The New South Wales Council on the Cost of Government is to recommend a set of guidelines on contracting out which could effectively end public and private sector competition in the state. The theory is that public sector reform should improve the way services are provided without having to privatise.

Victoria’s third private prison

The official opening took place on 18 August 1997 of the Port Phillip Prison, a private 600 bed maximum security facility for men at Laverton North in Victoria. Built by Fletcher Construction and run by Group 4, this is Victoria’s third privately financed, designed, built and run prison. The intake of prisoners begins in September. Eventually, there will be 200 staff. The minister for corrections said that the prison will “set new standards in correctional facilities”. At the end of July, the Department of Justice was still advertising for three people to become official prison visitors. Their role is to provide independent advice to the minister regarding the prison’s operation and to facilitate links between the prison and the community.

n A plan to employ Port Phillip prisoners as telemarketers from a prison call centre has run into controversy. Group 4 argues that similar schemes in the US are successful while opponents are concerned about hard-core criminals gaining access to consumers’ personal details and prison labour undercutting and replacing workers elsewhere. Approval for the scheme rests with the government.

n On 2 July 1997, a computer believed to contain security codes and files for the prison was stolen from the house of a Fletcher Construction employee. Despite this, Group 4 had no plans to alter prison security.

Victoria’s health

Victoria is privatising primary health care services to over 1,300 prisoners in nine prisons. Contracts are expected to start on 1 January 1998.

CORE agenda

As well as opening three private prisons, reforms to Victoria’s correctional services include: separating policy and service delivery roles; separating purchase and service provider roles; the transition of CORE (the Public Correctional Enterprise) into a service agency within the Department of Justice; creating a Commissioner’s office to oversee and monitor new arrangements; out sourcing selected services including prisoner transport, psychological services and perimeter security at Coburg prison. CORE’s agenda for 1997/98 is to be more competitive, cost effective, customer focused and people oriented. The diagram below shows how CORE identifies its stakeholders. From:Securing the Future, Setting Targets and Measuring Performance, a paper by John Griffin, CORE’s chief executive, to a conference on Service Agencies, Melbourne 11-12 August 1997.

IRELAND

Still considering

Prison Privatisation Report International