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Bribery firm bids for UK contracts

A UK subsidiary of the weapons systems manufacturer Lockheed Martin, which was found guilty of bribery in 1995, is a partner in one of three consortia chosen to participate in a three month process to bid for £150m of Prison Service work. 

Although plagued by bribery allegations since the 1970s, in 1995 Lockheed pleaded guilty in the US to paying a $1m bribe to an Egyptian official in order to secure a $79m order for three aircraft. The company was fined $21.8m, the largest penalty ever paid under the Foreign  Corrupt Practices Act established in the US in 1977. Lockheed pleaded guilty to violating the bribery provisions of the Act and also conspiring to falsify its records. 

The company also had to pay a further $3m to settle seven other charges levied against it by the US  Department of Justice. However, under the agreement  reached with  the US Attorney’s office in Atlanta, Georgia, the seven  charges were dropped.

The potential Prison Service contracts  threaten more than 2,500 public sector jobs in personnel, administration and information technology. The three consortia are: Lockheed Martin with EDS, AT Kearney and Securicor Custodial Services; Group 4 and ICL; PRISM, comprising Premier Prison Services (Wackenhut and Serco), CSL Group, Sema Group and Bull Information Systems.

Lockheed is the largest military and aeronautics contractor, famous for manufacturing the F16 fighter used by the US Air Force and 19 other forces worldwide. Its latest products include a joint strike fighter, a “new multi-role combat aircraft for the next century” and a multiple launch rocket system. A company brochure explains that “Lockheed Martin defence platforms and electronics help keep the peace and improve peoples’ lives in a dynamic post-Cold War period.”

But in a changing climate, where governments have cut back on military expenditure, firms such as Lockheed have increasingly had to diversify.

Lockheed IMS is a subsidiary of the Lockheed Martin Corporation. IMS has six lines of business, including criminal justice services, children and family services, transportation systems, municipal services and communications. In the US, it is a leading provider of data processing and systems integration services to over 140 state, municipal and federal government clients as well as the private sector.

Last year, IMS started an 18 month pilot project with the Los Angeles County Probation Department to test a range of strategies for enhancing the monitoring of probationers and increasing the collection of money owed to their victims and the county. The plan is to reduce the administrative duties of probation officers and, as the company said at the time, to “ensure that criminals are held financially accountable for their crimes - and that victims and taxpayers get the compensation they deserve.”

The project requires no capital costs for the county as Lockheed is paid on contingency fees based only on the increased revenues it collects, and from direct charges associated with electronic reporting by probationers. No fees are charged for collecting victim restitution, estimated at tens of millions of dollars a year.

Also in Los Angeles, IMS collects and distributes child support for the County District Attorney’s

Bureau of Family Support Operations and is replacing the county’s child support enforcement system with a more sophisticated, automated programme.

n EDS, the giant US electronics firm and one of Lockheed’s bidding partners for the Prison Service contracts, has been the subject of  Parliamentary  Questions   arising from its success in winning a wide range of government  information technology contracts.

Wackenhut’s growth

Wackenhut Corrections Corp. announced in February 1997 that in 1996 its revenue grew to $137.8m from $99.4 million in 1995. Net profit  increased 86 per cent to $8.26 million  from $4.44 million in 1995.

"The revenue and profit increases in 1996 reflect the continued and rapid expansion of company operations during the past twelve months, during which we brought on line three 1,000‑bed correctional facilities in different parts of the country  - Pennsylvania, Mississippi and Texas," said Dr. George C. Zoley, Chief Executive Officer of the company.

He also noted, "The company closed the year with approximately 12,000 revenue‑producing beds in operation, compared to approximately 8,000 at the end of 1995.  Facilities with 1,518 beds were recently completed with the dedication of new facilities in Florida (1,318 beds) and New York (200 beds) during the past two weeks.  Opening schedules in February and March 1997 include 500 beds in Puerto Rico, a 1,000‑bed site in Texas, and a 600-bed facility in Victoria, Australia, bringing the total number of beds anticipated to be brought on-line in the first quarter to 3,618, an increase of over 33 per cent since the end of 1996.

"Continued nationwide and global expansion is expected by the anticipated opening of four additional facilities for a total of nine facilities during 1997, totalling approximately 5,568 revenue‑producing beds," he added.

As at 10 February 1997, the company had awards/contracts to manage 34 facilities in North America, the UK and Australia with a total of 24,371 beds, and additional contracts for the design, construction and maintenance of facilities, and for prisoner transportation.

 

Partners in Sante Fe

The Santa Fe County Board of Commissioners has selected Houston-based Cornell Corrections Inc. to negotiate a four phase public‑private partnership to provide correctional services in the county. In phase one, Cornell and its team will design and build a new 504 bed adult facility. Phase two will begin on 1 July 1997, when the company  will assume operation of  the county's existing jail. In phase three, Cornell  will operate the newly constructed jail facility. Afterprisoners are moved to the new building, phase four will commence with the renovation of the current county jail to convert it to a detention facility for juveniles. Ultimately, the company will operate both institutions.

The average daily population for the existing Santa Fe County Jail in 1996 was approximately 280 adults and juveniles. With a total projected bed capacity in the two facilities of 660, the county and Cornell will cooperate to generate extra revenues by housing prisoners from other jurisdictions.

The proposed programme is unique as it not only  involves cooperation of the government and private sectors in the provision of  detention services, but also because it brings in a third  partner, the community. Local service providers and individuals will be an integral part of the planned endeavour.

n Cornell Corrections now has a national network of  26 facilities, with 31 federal, state and municipal contracts. The company’s contracted design capacity is 5,303 beds under management.

 

 

AUSTRALIA

Contracting out in NSW

The NSW Department of Corrective Services has so far contracted out its payroll system, legal services, catering, the supply of officers' uniforms, information technology support services, maintenance of correctional centres, the management of motor vehicles and fleet maintenance. However, the new Metropolitan Remand and Reception Centre to be commissioned this year will be operated by the public sector.

 

Women’s prison row continues

The war of words over whether Deer Park, Victoria’s new women’s prison,  is gripped by chaos or not continues to be waged in the media. Some prisoners and former prison officers have alleged that  Corrections Corporation of Australia’s facility is awash with drugs, assaults are common and two women convicted of murder have management and other prisoners running scared. Some other  prisoners however, have signed a petition saying that reporting of these allegations has affected morale.

On 31 January 1997, the Opposition spokeswoman on women’s affairs sent a letter to the Corrections Minister outlining ten issues of concern, including the alleged shredding of incident reports by jail staff and failure to record incidents such as assaults, self mutilation and attempted suicides by prisoners.

CCA’s management has admitted that there is a drugs problem but denies falsifying records.  “To the uninitiated, some of the figures are quite alarming, but they prove we have reported them,” said the prison’s general manager Mr Gary Emmerson.

The Herald Sun has confirmed that on one occasion  prisoners were so affected by drugs at a Melbourne magistrates’ court  that the hearing was adjourned and the prisoners returned to Deer Park. Ten of the 52 staff hired since the prison opened five months ago had resigned or been advised to seek other  employment. On 2 February 1997, emergency units rushed to the prison to deal with a stand-off  between prisoners and staff.

On-site monitoring was full time for the first six to eight weeks but this has been cut to part-time. The opposition has called for the government to take over the prison and hold a public inquiry.  The state premier has rejected this proposal saying that the allegations will be investigated and that, while the prison is not without problems, it is operating calmly and professionally.

A Herald Sun editorial on 3 February 1997 said: “The question arises whether Deer Park’s problems have emerged because of teething troubles confronting new management, or as a result of prisoners taking advantage of otherwise lax discipline ... the whistleblowers who voiced their allegations ... have established a case for the monitoring team to have a permanent on-site role within the  jail.”

n Mr Terry Lawson, managing director of Corrections Corporation of Australia, told the Australian that while south east Asia is a potential market, CCA will not manage any corrective services unless United Nations minimum standards apply  there. “It comes back to this being squeaky clean.  We just couldn’t afford the bad publicity. We know that in some Asian prisons it’s just warehousing, locking them up in rooms or cages and feeding them three time a day. We couldn’t afford ... it would be front page headlines. I have honestly to say that we have taken that policy decision ... because it is the right thing to do.”

 

From private to public

In an unusual career move - the route is usually public to private - Mr James Ryan, former managing director of Australasian Correctional Management (Wackenhut) has been appointed head of the Australian Capital Territories’ (ACT) Corrections Service. The government has denied that his appointment increases the likelihood of ACT’s proposed new prison being privately run. There will be a community debate over the issue.Delays in South Australia

Plans for a privately designed, built and managed prison in Adelaide have been put on hold following concerns raised by residents living near the proposed site. The state is facing a crisis of overcrowding in its existing prisons which has led to the Ombudsman carrying out an inquiry into conditions.

 

 

LATIN AMERICA

Wishful thinking?

According to a recent issue of the American  Journal of Commerce, some privatisation experts expect the private prison industry to penetrate Latin America by the turn of the century. They regard Panama, Argentina, Chile, Mexico, Venezuela or Colombia as likely candidates to host a model facility.

 

 

UNITED KINGDOM

Wolds evaluation still timely

Britain’s first privately run prison, Wolds, opened in April 1992 and is run by Group 4. An independent academic evaluation was carried out between November 1992 and October 1993 with follow up visits in March 1994. In April 1996 a summary of the evaluation was quietly released by the Home Office. By then, the study had cost taxpayers £120,772. The full report is to be published in March 1997.

Although the report deals with the first two years of Wolds' operation, the findings are still relevant not only because some of the myths surrounding privatisation are dispelled but also because some of the concerns raised about private prisons still need addressing.

The study evaluated key aspects of the design and operation of the regime and compared these with concurrent developments in new public sector prisons.  It found the quality of regime for prisoners "was generally of a high standard" and "nearly 80 per cent of prisoners ... regarded it as better than other prisons which they had experienced."

Group 4 staff and management were "dedicated and hard working" and "highly motivated and keen to set high standards." But staff had to work long shifts, there was a high level of isolation and the impact of prisoners' previous prison experience was "probably underestimated" leading to the adoption of "more traditional practices and perspectives with Wolds moving away from certain elements of its original ethos ...”

The use of the American model of direct supervision had mixed results. The hiring of largely inexperienced staff had some advantages but also led to "management and communication problems" and the lack of experience at middle management level was "particularly significant given the amount of initial support and guidance needed by lower ranks of staff."

The adequacy of staffing levels "was a predominant concern for management and staff ... and one which adversely  affected staff attitudes to management. Although staffing levels did not lead to any serious compromises in the security of the prison, there were situations where higher staffing levels might have had a significant effect on the maintenance of order and helped to reduce staff concerns about their potential vulnerability."

Comparing Wolds with other prisons was a "complex exercise" with "few simple conclusions about the relative merits of the private sector compared with the public sector". The research concluded that "there were comparable achievements in some of the new public sector local prisons. There was, therefore, no evidence that Wolds' achievements were necessarily related to its contracted-out status."

"It is possible that the innovations and more efficient management of resources which took place in the public sector during this period may have occurred in any event. But it seems likely that the threats of market-testing and privatisation made a significant contribution to this process."

Private sector involvement in prison management "inevitably raises many commercial-in-confidence issues. The formal accountability via the mechanisms of the contract and the Home Office Controller, is of a high degree but this needs to be matched by a greater openness and public accountability. It is essential that details of contracts and the costs of operation of the private sector prisons should be available to the same degree as in the public sector." Private sector prisons should remain "under close professional and public scrutiny."

Wolds Remand Prison - An Evaluation. Available from Information and Publications Group, Room 1308, Home Office, Apollo House, 36 Wellesley Way, Croydon, CR9 3RR, England. Tel:++44 181 760 8340.

 

CANADA

 

New Brunswick, new conflict

Government claims for savings of $555,000 over 25 years through privately designing,  financing and building the Miramichi Youth Facility are once again under fire after internal documents showing comparative costs were released recently. The government awarded the contract to Wackenhut in June 1996.

Questions have been raised about hidden government costs, such as contract monitoring, which appear to be missing from the comparison. Other concerns include how and why  the original plan for 120 beds, a dining area for 100, mental health unit and pool got reduced to 112 beds,  no mental health unit or pool and a small dining room.  Food will be served to prisoners in their housing units from delivery carts. 

It has also emerged that the construction company Maxim - under contract to Wackenhut - has failed to meet target dates or inform its partners about work carried out  contrary to specifications.       

As yet, no decision has  been taken about the future management of the jail  but the existing agreement with Wackenhut does not preclude contracting out.