Corporatism, Privatization, Rick Snyder — April 9, 2015 at 12:14 pm

Despite Aramark privatized prison food scandal, Snyder administration doubles down on privatizing prison services


The privatization of prison food services to the for-profit group Aramark has generated a seemingly endless litany of scandals and more are likely to come as Progress Michigan plows through the results of their exhaustive FOIA request. The scandals so far have been thoroughly documented here at Eclectablog.

Although this collosal failure at privatization would lead most good leaders to abandon the effort, that is decidedly NOT the case with the administration of Rick Snyder. This week, they announced that they will be privatizing state-run prison stores and firing 30 existing employees that do that work now:

About 30 state prison workers have been told they will lose their jobs as the state eliminates regional prison stores in Ionia, Jackson and the Upper Peninsula.

The state is expanding a system under which prisoners purchase toiletries and other items through electronic kiosks and a vendor sends the goods to the prisoners through secure packages, Corrections Department spokeswoman Holly Kramer said Tuesday.

The vendor, the Missouri-based Keefe Group, now sends requested items to regional stores/warehouses at Parnall Correctional Facility near Jackson, the former Riverside Correctional Facility in Ionia, and the Kinross Correctional Facility in the Upper Peninsula, Kramer said.

There, the orders are sorted, packaged and distributed to prisons around the state.

Under a new three-year contract with Keefe, the regional stores, which are staffed by state workers, will be closed, she said. Keefe will package the store items and send them directly to where the prisoners are housed. […]

The cost of both the former contract and the new one is covered by surcharges assessed on prisoner purchases, so there is no estimated cost savings for the state, she said.

Not only is there no savings for the state to do this, the current system is operating in the black. In other words, there is simply no reason for the Snyder administration to be making this move.

The Keefe Group has a bit of a sordid history in their work in the prison commissary industry. In 2012, Edward Lee Dugger and Joseph Arthur Deese pleaded guilty to a kick-back scheme involving Keefe Commissary, a division of the Keefe Group:

Edward Lee Dugger, 64, of Gainesville, and Joseph Arthur Deese, 38, of Fort White, pleaded guilty last year to conspiracy to pay kickbacks to former Corrections Secretary James Crosby and Allen Wayne Clark, another high-ranking prison official. After a six-hour sentencing hearing at the federal courthouse in Jacksonville on Friday, Dugger was sentenced to 26 months in prison, and Deese was sentenced to 14 months.

Federal prosecutors said that for nearly two years in the mid-2000s, Deese and Dugger paid Crosby and Clark to establish a business relationship between the state and with Keefe Commissary Network of St. Louis. Dugger and Deese admitted to federal officials that they created a company in 2004 to provide canteen services for visitors at all Florida prisons. In return for the agreement to operate the canteens, Dugger and Deese agreed to pay Crosby and Clark between $1,000 and $14,000 a month. They also agreed to pay former Keefe Commissary President Jack Donnelly and another Keefe executive about $260,000 of the $1.5 million a year they expected to make from sales, prosecutors said.

Keefe Group has also been found to be making huge profits by charging inmates and their families simply to use their services.

So, to sum it up, the Snyder administration is privatizing a prison service to a for-profit corporation with a shady history and is doing it despite the fact that the current system is profitable and the move won’t save the state a single penny. In other words, just another day in the Rick Snyder-run corporatocracy of Michigan.

Progress Michigan Executive Director Lonnie Scott put it best:

You’d think the Aramark debacle would’ve taught lawmakers a lesson about doing business with out-of-state corporations that are only driven by profit. The fact that there are allegedly no cost savings to this move leaves me wondering what other motivation officials must have for continuing this failed privatization experiment.

It’s a perfectly legitimate question to be asking.

[CC image credit: Alex43223 | Wikimedia Commons]