California's Prison Industry Authority

-- Willie Wisely

Imagine a
half-billion dollar manufacturing company that uses slave labor, has little
overhead, ignores state and federal laws regulating workplace safety, includes
hazardous materials in the construction of its products, forces customers to buy
those products under penalty of law, yet loses money. Now, imagine that this
company is protected from bankruptcy and government interference. Protected
because the government owns and operates the company. This compnay is
California's Prison Industry Authority (PIA). Why is this company still in
business?

Some 41 other prison industry programs across the nation turned a profit in
1992-93. California's PIA lost $1.4 million on sales of $128.6 million. Florida,
Texas, and North Carolina--with the largest prison industries outside of
California--compete with private businesses in the marketplace. Florida's PRIDE
(Prison Rehabilitative Industries & Diversified Enterprises) program is a
private, nonprofit corporation created by the Legislature in 1981. Unlike the
PIA, PRIDE does not employ civil servants. PRIDE netted $4 million on gross
sales of $77.6 million in 1994, and spent $635,000 assisting paroled prisoners.
Just 18% of PRIDE alumni return to custody. PIA spends virtually nothing to help
parolees, and the recidivism rate in California is over 75%.

Although the Texas Industries Division is prohibited from making money on 30%
of its output, the program has turned a profit every year since its inception in
1963. TID employs 7,500 prisoners from a prison population of 94,000.
California's PIA uses only 6,800 prisoners out of a 133,000 total. North
Carolina's prison industry made $5.4 million on sales of $51.2 million in 1994.
But, PIA has lost money five out of the twelve years it has existed.

Of the four states, only California requires government agencies, schools,
libraries, and hospitals to buy prison made goods. From furniture to eyeglasses,
PIA manufactured wares are poorly made, overpriced, and often delivered months
late.

Don Green, purchasing agent for California State Polytechnic University,
Pomona, needed chairs for the new computer lab. He could have bought them from a
local retailer for about $58 a piece. However, California law forced him to
order the furniture from the prison manufacturing empire. He waited a year for
delivery, and paid twice the retail price.

In 1994, state entities chose 110 product lines and 2,000 items in the
slickly printed PIA catalog, spending 4135 million on prison made goods. The
only ones who seem happy with the status quo are the civil service shop foremen,
supervisors, salespeople, and administrators who make an average of $44,000 a
year--much more than they could earn for similar jobs in the real world.

"It's a joke, absolutely, positively a joke. And every body covers
everybody's ass," said Leonard Greenstone, the lone dissident on the Prison
Authority Board, in a recent Orange County Register interview. A black
vocational instructor who didn't want to be identified for fear of retaliation
admitted the program is mismanaged. "When I worked for PIA, my shop turned a
profit. Pretty soon I was warned to cut back on production. They told me it made
the other supervisors look bad."

Private business people think the law forbidding state agencies and other
divisions from purchasing commodities on the open market should be abolished.
"It's like the factory system under communist rule. The workers and supervisors
got paid whether their products sold or not. There was no reason for them to
build quality merchandise because they had no competition," said Joe Harrington,
retired Longshoremen, armchair Marxist, and local curmudgeon in Costa Mesa,
California.

The California Constitution forbids prisons from competing with private
enterprise. Yet, that's exactly what the PIA is doing. "The complaints we hear
are that (PIA) is in direct competition with California business. You can't deny
that," Lynn Wright, Governor Pete Wilson's government purchasing expert
conceded.

The competition isn't quite fair because the PIA has a protected market. PIA
administrators claim the law protecting their market is necessary because
prisons aren't permitted to sell goods to the general public. They also claim
their products are more expensive because prisoners are unskilled, illiterate,
and require constant supervision. While it is true that the PIA is barred from
selling directly to the public in California, they are aggressively developing
markets in foreign countries. They sell blue jeans and denim jackets with
"California Department of Corrections" stenciled on them in Dayglo orange to the
Japanese.

In a report of the Little Hoover Commission, prison industry managers stated
that outdated equipment, delays in processing orders for raw materials, the high
turnover of prisoners, and random lockdowns by prison administrators further
drive costs up and production down. The Commission was skeptical. "Despite these
burdens, the inability of the PIA to routinely break even or post a profit is
perplexing in the light of the ability to set prices without fear of losing
customers."

One state lawmaker has proposed a change. California Senator Richard Polanco
authored Senate Bill 617. If passed into law, the bill would free state entities
from the requirement to buy only from the PIA. They would be at liberty to find
better deals in the private sector. On May 11, 1995, the measure easily won
approval in the State Senate.

Joined by Senator Dan Boatwright, Polanco demanded a probe of PIA's finances
and operations by the state Bureau of Audits. That investigation is expected to
begin soon. At most, insiders anticipate the ouster of David King, General
Manager of the PIA and the executive staff loyal to him. But mismanagement isn't
the only problem with PIA.

Materials used in the manufacturing of furniture the prison industry sells to
schools and hospitals are dangerous, flammable, and destructive to the
environment. For example, urethane foam is purchased by the PIA Furniture
Factory at Tehachapi prison's maximum security IV-B Facility. The large sheets
of foam must be cut to size for use in chairs and couches. Cutting urethane foam
in the unventilated shop poses a serious, potentially lethal, health threat to
prisoners and civilian employees alike.

When the foam is cut with power saws, tiny particles are dispersed into the
air. Trapped inside human lungs, these particles can be deadly. "Urethane foam
particles are carcinogenic. And after accumulating in the lungs, they can cause
a condition similar to asbestositis," says John Diffenbaugh, a Captain with the
Kern County Fire Department. The foam also bears a warning to customers that it
was manufactured with 1,1,1-trichlorothane, a substance known to destroy ozone
in the upper atmosphere. Urethane foam is also extremely flammable, and once
ignited produces a toxic gas which can quickly overcome and kill anyone nearby.
The California Furniture Association does not approve of the use of this foam in
furniture. The PIA ignores the danger, causing some employees to seek other
jobs.

"I'm transferring out of here," said a former PIA supervisor. "My father died
of emphysema, and I've seen too many people with suspicious coughs in the shop.
That damn dust will kill you." Foam dust fills the air at Tehachapi's Furniture
Factory, and many prisoners working there develop a chronic cough. After Captain
Diffenbaugh warned that the dust could cause serious illness, prisoners demanded
exhaust fans to remove particles from the shop air. Instead, they were given
disposable paper face masks with labels that read, "This is not a filter.
Prolonged use may be dangerous to your health." Meanwhile, it's politics as
usual.

Governor Wilson is officially neutral on Polanco's bill, but strongly
committed to PIA. "Prison Industry needs to expand, not contract, these positive
efforts toward providing job skills and lessening the financial burden of state
prison costs," he said in a 1992 video message. But, because the PIA uses
obsolete equipment and outmoded techniques, prisoners don't learn practical
skills needed in the workplace outside.

PIA executives claim they save taxpayers millions of dollars by allowing
prisoners to earn time off their sentences for working. According to the
legislative analysis of SB617, however, that is just not true. The conclusion
that prison industry saves tax dollars by allowing prisoners to earn time off is
based on the false assumption those prisoners wouldn't find other jobs and earn
time off anyway. The saving guesstimate also supposes the Department of
Corrections would have to create other activities for prisoners.

The Little Hoover Commission found that the PIA really did not save taxpayers
any money at all. "Through the mechanism of forcing these departments to
purchase from the PIA, the costs of dealing with inmates are shifted throughout
the state government but are still paid by the same public-provided dollar that
would cover costs if they were contained in the Department of Corrections
budget." So what's the bottom line?

The bottom line is, the PIA, like the Department of Corrections itself, has
become a welfare system for its employees. The sole purpose of the PIA, it
seems, is to furnish employees with big salaries for little work. It's not
concerned with helping ensure prisoners stand a chance of success on parole.
It's not concerned with producing well made goods or turning a profit, either.
One lifer at Tehachapi said, "Give me a year, and I'd have this place making
millions. Take that Furniture Factory out, and manufacture computer memory
chips. Prisoners would gain job skills that are actually needed outside, and
customers would get memory chips at prices comparable to Japanese chips." What a
great idea!

But the PIA does not appreciate great ideas. And Governor Wilson--counting on
his base of faithful civil servants at election time--will likely veto Polanco's
bill, just as he did other bills in 1991-92 aimed at reforming the PIA. So
schools, already strapped for cash thanks to budget cuts, must continue to pay
$3.56 for plastic binders they could buy at a stationery store for $1.55, and
$695 for conference tables that run $279 at a furniture outlet. State hospitals
will have chairs and couches in their waiting rooms made with highly flammable,
toxic materials. In a way, California's Prison Industry Authority is like the
goose that laid the golden egg. As long as no one kills the goose, PIA
employees, and the myriad vendors who make a living supplying the prison
industry, continue getting the gold. The trouble is, though, the goose is
crapping all over everyone else.

Willie Wisely is a California state prisoner.