Where the Money is Going
Now that California corrections has gone from a multi-million dollar
industry to a multi-billion dollar industry, it isn't difficult to see many
people climbing on board for a piece of the pie. Unfortunately, conflicts of
interest abound. Who wins the construction contracts, land deals, bond sales,
attorney fees, labor negotiations, etc.? Why do the winners win and the losers
lose?
Presented here is the "money" that has been made public--it is
scary enough. What isn't shown are all the hidden and undercover moneys that
are changing hands and influencing decision-makers. It appears that many people
are getting rich at the expense of the taxpayer and a public that has been
duped into supporting unjust laws.
This is the page the politicians, businessmen and prison guards don't want
you to see! Just who are the real criminals?
The following are some statistics and comments from books and articles on
where the money is going to support the growing prison industrial complex.
PLEASE SEND US NEW DATA AND ARTICLES IF YOU HAVE THEM.
Prison guard union major force in growth of prisons
One of the most troubling aspects of how crime policy is set in California
is how the prison guard union, the California Correctional Peace Officers
Association, funnels money back to politicians and organizations that encourage
"lock 'em up" attitudes. Are California's crime policies based on
"reason" or "greed?"
As the prison system has expanded, the guards union has grown by roughly
10% a year. In 1980 it only had a couple thousand members, but by 1996 it had
over 25,000 (all who can vote and have family members and friends that can also
vote).
In 1980, there were just 12 prisons and the average guard's salary was
$21,000--today they average about twice that much, and the union has a
$3,000,000 headquarters.
In 1996, the union collected about $15 million in union dues--much of which
has gone to campaign coffers and "tough on crime" organizations.
It gave more than $900,000 to Wilson in his run for governor in 1990. In
total, the guards gave $1.5 million to Gov. Wilson's two campaigns, helping the
governor amass a war chest that Don Novey, head of the CCPOA, boasted put
Wilson over the top.
Novey's union provided 84% of the funding for the Crime Victims United
Political Action Committee, which in turn gave $80,000 to Wilson's 1992
campaign.
After Assemblyman John Vasconcellos (D-Santa Clara) signed a ballot
argument against new prison construction and questioned pay for prison
officers, the union spent $90,000 in 1992 attempting to unseat him.
In 1994, the union was the second-largest donor to the 3-Strikes
initiative, giving $101,000. In addition, in one six-month period in 1994 (the
year the 3-Strikes law was passed) the union contributed $60,000 to Crime
Victims United, a political action committee in Sacramento.
The union also provides the Doris Tate Crime Victims Bureau, the major
force behind California's 3-Strikes law, 78 percent of its funding, as well as
free office space and a lobbying staff.
Between 1995 and October of 1996, CCPOA gave $887,122 to scores of
politicians and political organizations, according to campaign records.
Attorney General Dan Lungren and former Assembly Speaker Curt Pringle, both
Republicans, got more than $80,000 from the union in that period. And in one
eight-week span during the summer of 1996, the union gave the Republican party
$100,000.
Union President Don Novey said his organization donates money "to
change the system" so career criminals are locked up for life, not to
increase the number of guards. "There are scumbags out there," Novey
said.
In his Sacramento office, Novey, a former Folsom prison guard, laughs at
those who accuse his union of wielding too much power and influencing
legislation that results in longer, tougher sentences. "When the
California trial attorneys and the oil companies lobby, it's within the
parameters of the game," he says. "But when the blue-collar
people--and we are definitely the blue collar of law enforcement--step up to
the plate, it's suddenly OK to slam us.
In 1996, his organization issued a study called "Affordable
Prisons" that proposes California build "mega-prisons," holding
up to 20,000 prisoners, and that legislators pass a law that would forever
bypass voter approval for prison bonds.
LATimes, 10/18/94 and
Riverside Press-Enterprise, 5-part series "A State Behind Bars, Fall of
1996.
Although FACTS does not support privatization of prisons, Senate Bill 818
shows how Republicans are influenced by the prison guard union. Normally
Republicans are all for the privatization of government programs. However,
Senate Bill 818, which promoted privatization, only received 7 Republican
votes, the 30 other Republicans either voted no or did not vote. Is it a
coincidence that the 30 Republican members who voted no or did not vote
received a total of $266,245 in contributions from the prison guard union in
1996? Curt Pringle of Anaheim, who got $40,000 from the prison guard union and
voted against the bill, said the contribution did not influence his thinking on
the bill. Yea, sure--And Curt probably still believes in the Easter Bunny.OCRegister, 9/21/97.
And, as a voting block, prison guards and their families also have great
influence.
"If you have everybody voting for a politician, multiply that by three
for each family. You have a powerful organization there."
Prison guard quote from Organizational and Racial Conflict in
Maximum-Security Prisons, by James G. Fox, 1982, Lexington, Massachusetts:
Lexington Books.
NEW TURN OF EVENTS:
Now, apparently worried about the fact that assaults on prison guards have
nearly doubled since judges began handing down stiffer prison sentences in
response to the 3-Strikes law, Don Novey, head of the CCPOA, seems to have
changed his mind. Currently Novey says the law "has to have fairness to
it," and has called for earlier parole for nonviolent offenders, while
restricting third strike offenses to serious or violent crimes. California
Lawyer, October 1996, by John Roemer.
Unfortunately, his voice is now only a little squeak, and we haven't seen
any money being contributed to politicians and groups that support amending the
law to do just what he says.
In August of 1998, the Wilson administration agreed to grant a raise of up
to 12% to the prison guard union--one day after the governor used his line item
authority to delete $400 million from the new state budget in pay raises for
most other state workers. This means veteran members of the 24,314 full-time
guards and other prison employees could be making more than $51,000 a year, not
counting overtime. LATimes,
8/25/98.
Wall Street making big profits off of the growing prison
industrial complex.
In 1984, legislators changed the law enabling themselves to directly
authorize lease revenue bonds to build prisons.
California has two types of bonds for prison construction--traditional
voter-approved general obligation bonds and more complex lease revenue bonds.
Between 1982 and 1990, voters approved of $2.4 billion in bonds (with
interest they will be paid back at a total of $4.1 billion). Since 1984, the
legislators approved of $2.9 billion in bonds (with interest they will be paid
back at a total of $5.6 billion).
A legislative analyst contends that lease revenue bonds cost taxpayers 20%
more than voter-approved bonds in higher interest rates and administrative
costs.
San Francisco investment banker Thomas Dumphy of L.F. Rothschild helped
devise the concept of the lease revenue bonds. The first four bond deals (of
about $1 billion) were awarded to Rothschild. The firm, like many involved in
such deals, was a major campaign donor to Unruh--Treasurer of the State of
California at the time the new bonds were adopted. Rothschild's profit is
estimated to be $19.5 million.
Rothschild hired the law firm of Finley, Kumble of New York (which hired
many former governors and senators). In March, 1987, Rodney Blonien left his
position as undersecretary of the Youth and Adult Correctional Agency, where he
was in charge of prison construction, and went to work for Finley, Kumble in
Sacramento. Later Finley, Kumble broke up.
In 1990, an investment house that employed former California Assemblyman
Richard Robinson, won the contract to be lead underwriter.
LATimes, 10/18/94
Rural areas see economic salvation in construction of
prisons.
The city of Cameron, Missouri was celebrating the completion of a new
industrial plant--a prison. It will bring in 250 jobs and increase Cameron's
population by 1,000. It opened in February, 1997.
The United States is building prisons at a rate never before seen--123
state and federal prisons opened or were under construction in 1996--small
towns from California to Florida are battling to get a penitentiary in their
backyard.
In jobs and job security, prisons are doing for Main Street, USA what
military bases did during the Cold War. In Washington state, 19 communities are
campaigning for a juvenile-rehabilitation center now on the drawing board. In
Florida, 15 towns have offered free land for a new state prison. In other
states, the battle for prisons are just as strong.
Until recently, most small towns fought tooth-and-nail to keep prisons away
from their towns, however, now that crime-fighting has become a $100
billion-a-year growth industry, prisons are considered a prime catch.
"A lot of the construction boom has to do with changes in our criminal
statutes--minimum mandatory sentences, three strikes and you're out, the end of
parole," said Robert Verdeyen, director of standards at the American
Correctional Assn. in Lanham, Md. "Any time you start changing the laws
and making penalties stiffer, you're going to drive your population up."
LA-Times, 10/9/96.
The increase in a city's population can also bring extra revenues.
The city of Tehachapi annexed a nearby prison because the inmates will be
included in the city's population
count, making it eligible for more money from the state. The prison houses
approximately 5,900 inmates.
According to City Manager Darrell Daugherty, ``The amount of additional
revenue from the state could be around $250,000, plus or minus.'' The
Bakersfield Californian, "City seeks to annex prison," by Debby
Badillo, 3/24/98.
4 private companies operate 5 low-security prisons in
California
Some entrepreneurs are hoping that California will turn increasingly to
privately owned and operated prisons as a way to shave costs. Four private
companies now (1994) run five prisons for 1,300 low-security inmates in
California, and the state is considering a proposal to open a sixth private
prison for 550 medium-security inmates.
22 states allow private prisons.
Cornell Cox, a corrections firm in Houston bought the state's biggest
private prison firm, Eclectic Communications Inc. Cornell Cox is backed by Wall
Street investment houses Charterhouse and Dillon, Reed & Co.
Dillion, Reed's venture capital arm homed in on corrections as an
investment opportunity because government spends billions a year on prisons
annually and the market grows 12% a year, said Peter A. Leidel, a senior vice
president of Dillion, Reed.
Contrary to statistics, Leidel said, "Crime is becoming a more
significant problem . . . . more dollars will flow into it."
State records show that Eclectic has received contracts worth more than $50
million since 1988. Arthur McDonald, the company's former owner, said he sold
the company for more than $10 million.
Cornell Cos is privately held, but hopes to go public with a stock offering
soon, Leidel said.
This summer (1994), Wackenhut Corp., a Florida-based security firm that
runs a 200-bed prison in McFarland, spun off its prison subsidiary, Wackenhut
Corrections Corp., and began offering its stock publicly. The state will pay
Wackenhut $4.5 million this year to operate the prison.
Criminal justice professor Dale Sechrest, of Cal State San Bernadino, is
studying private prisons and expects that the business will expand as prison
costs increase. "What worries me," said Sechrest, "is that all
these promises of doing the job better for less money are not true."
Private firms operate prisons for less than the state, but he said the
difference is "marginal," a few thousand dollars per inmate a year.
The private firms generally save money by paying guards $11 to $12.50 an
hour, half of what the state pays correctional officers. Unlike the Department
of Corrections, private firms cut costs by not paying high prevailing union
wages for construction. OC-LATimes,
10/19/94.
Company buys land for $374 an acre and sells it to
state for $3,500 an acre for prison site.
Triple D Farms bought land at Pleasant Valley as part of a 5,000-acre
purchase from the Bank of America at a price of $1.875 million, or $374 per
acre. "When we bought the land, we had no idea [that a prison would go
in]," Don Devine, a partner of Triple D said. To help consummate the deal,
Triple D hired Rodney Blonien, the former undersecretary of the Youth and Adult
Correctional Agency.
On April 24, 1990, two weeks after Triple D's purchase was recorded, the
Corrections Department convened a hearing in Coalinga, one focus of which was
where the prison would be built.
In August, 1990, the state Department of Real Estate appraised the
property, concluding that Triple D got an exceptional deal when it bought the
5,000 acres. It placed the worth of the 623-acre portion at $2,000 an acre.
Meanwhile that state also estimated it would cost $2 million to clean up toxics
on the land.
Based on a report, the state considered looking elsewhere, but the search
ended after a 1991 meeting attended by prison officials, Blonien and
Assemblyman Jim Costa (D-Fresno), notes of the meeting show.
Costa, one of two co-authors of the 3-Strikes legislation, has 6 prisons in
his district, including Pleasant Valley. the meeting notes show that Costa
brought up several problems with moving, and that he pointed to a second
consultant's estimate that the client of Triple D's land would cost only about
a third as much as projected.
Triple D's partners have contributed to Costa's campaigns, giving him
$3,000 in 1993. LATimes,
10/18/94
When the NRA and the prison guard union talk, Wilson
listens
On September 25th and 26th 1997 Governor Wilson proved once again his love
for "punishment." On September 25th he signed a bill that would
increase the prison sentence by 10 years for wielding a gun in the commission
of serious crimes, 20 years for firing it and 25-to-life for injuring or
killing a victim. On the 26th, he turned around and vetoed landmark legislation
to ban the manufacture and sale of cheap handguns. Is it possible the Governor
was thinking about the big donations he gets from the prison guard union and
the NRA? LATimes, 9/26/97 and
LATimes, 9/27/97.
Flooding in 11-month old jail?
Just who is getting all the contracts to build our prisons and jails? Are
they doing a good job at construction or circulating money back to politicians?
Just 11-months after the $107 million "glammer slammer" jail in
Santa Ana was opened, it was flooded by only a 3.6 inch rain fall. According to
an internal Police Department memo, the rain caused "major flooding"
in the four story polished-granite-and-glass administration and jail facility,
which opened in February of 1997. The tunnel connecting the jail with the
county jail was closed by flooding.
City workers put sandbags around the building to try to stem the tide, and
the city Fire Department--which already was up to its elbows in rain-related
problems--had to be called in to suck out the 2-inch-deep water.
OCRegister, 12/9/97.
Please send questions or comments to
factsla@sbcglobal.net.
Everything on this web site can be distributed to the general public,
reprinted, or reposted without permission of Families to Amend California's
3-Strikes.
Date last modified: 11/28/98.
