Prison privatization “lab” in Florida implodes

July 19, 2006 - Why do we fight against privatization and contracting out in Ohio?

One has to look no further than Florida for a reason. Newspapers there have recently been filled with stories about the corruption that usually accompanies privatization.

In particular, Florida was rocked last week by the resignation of director of the Dept. of Corrections and his pleading guilty to accepting kickbacks from prison snack vendors.

Some specific company names in the story, like Aramark, may be familiar to some Ohioans because of the sweetheart contracts the company once weaseled in a couple of Ohio prisons. OCSEA fought back and got Aramark booted.

But the general outline of the story – unbid contracts, exaggerated claims about the benefits of privatization, no accountability, kickbacks to corrupt officials – are unfortunately too familiar now in the Buckeye state.

A recent editorial in the July 15 edition the St. Petersburg Times recounts the situation and helps remind us why we need to keep fighting privatization.

In his editorial titled, Lesson for next governor in Crosby's fall, Steve Bousquet, wrote:

The tawdry tale of James Crosby, the prison boss who took kickbacks from a snack vendor, sullies Gov. Jeb Bush's record in more ways than one.

[...]

But the larger story of the Clark-Crosby scandal is what it says about the Bush administration's zeal for outsourcing, preferably without competitive bids.

Under Crosby and Bush, the Florida prison system became a privatization laboratory - long on projected cost savings, short on accountability.

First, Aramark secured control of prison food operations. Then came the outsourcing of pharmaceuticals and pill splitting for inmates' prescriptions, a venture begun on Lawton Chiles' watch as governor but expanded greatly under Crosby.

Then, Crosby sowed the seeds of his downfall by outsourcing prison canteen operations to Keefe Commissary Network, which hired lobbyist Don Yaeger in 2004.

As a state audit showed, the Keefe contract generated millions in revenue to the state, but it was another sweetheart deal. Rather than seek competitive bids, Crosby and company sought proposals from three firms.

"As a matter of good practice, the department should competitively procure these services," the auditor general wrote in a 2004 report on the Keefe contract.

The rest is familiar: Keefe subcontracted with Eddie Dugger's American Institutional Services, the company identified in court documents only as a co-conspirator. The feds say Clark and Crosby shared $130,000 in illegal cash from prison snack sales over a two- year period.

That's a lot of pork rinds.

When Keefe spun off part of its contract to Dugger, nobody was looking, and Clark and Crosby knew it.

Crosby's successor - the button-down, by-the-book retired Army Col. Jim McDonough - has received a stack of complaints about the quality and cost of Keefe's products. To his credit, McDonough refuses to drink the no-bid Kool-Aid.

[...]

[Crosby] had political juice, too, as a Republican convention delegate in 2000 and rally organizer during Bush's 2002 re-election campaign.

[...]

See Related

Complete July 15, 2006, Editorial from the St. Petersburg Times

OCSEA Privatization Tools