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Dallas County Jail, Dallas, Texas
October 11, 2006 The
Dallas Morning News
Dallas County commissioners voted Tuesday for the first time to award a
jail commissary contract, ending a tradition in which the sheriff decided
who gets the lucrative deal to sell snacks and other items to more than
7,000 inmates. The roughly $34 million, five-year contract awarded to Keefe
Commissary Network is expected to generate more money for the county than
the existing contract. County officials who didn't like how the former
sheriff handled the awarding of the existing commissary contract moved to
get state law changed last year to allow commissioners to decide the
commissary vendor. The new law allows the sheriff to designate
commissioners to decide the contract. Sheriff Lupe Valdez didn't want to be
involved because of past problems, her spokesman has said. Keefe, a St.
Louis company, estimated that annual revenue to the county based on sales
of snacks, pens, toiletries, playing cards and other items would be about
$2.6 million, which is almost four times what the current contractor
provides. That contractor, Mid-America Services, was given the contract in
2002 by then-Sheriff Jim Bowles, who was a longtime friend of the owner,
Jack Madera. At the time, commissioners complained that other companies
offered better financial terms. Commissioner Kenneth Mayfield cast the sole
vote against the contract award, saying Aramark
offered a better value to the county. He said Aramark
offered a slightly higher commission rate as well as $1 million in upfront
money, to be paid out each year of the contract. But Commissioner John
Wiley Price said Keefe guaranteed the county at least $2 million each year.
"The numbers speak for themselves," he said. Mr. Mayfield also
said Keefe did not disclose to the county its involvement in a federal
corruption investigation in Florida involving a prison contract until after
the Justice Department issued a news release about it in July. The county's
request for proposals required such a disclosure. The former head of the
Florida corrections department and a prison official were charged in July
with accepting more than $130,000 in kickbacks from a Keefe subcontractor
over two years in connection with a 2003 prison-store contract.
"There's a lot of smoke there," Mr. Mayfield said. "I find
it incredulous that Keefe did not know they were under investigation in
2004 and 2005." No knowledge: Keefe's chief executive wrote in a July
31 letter to purchasing supervisor Linda Boles that the company had no
knowledge of illegal activity related to the case. In a Sept. 11 letter,
U.S. Attorney Paul Perez in Florida wrote that Keefe and its employees are
considered witnesses in the investigation but that could change.
"Nothing in this letter ... shall preclude the United States from
later determining that Keefe or any of its employees are subjects or
targets of this investigation," he wrote. It isn't the only
controversy in which the company has been involved. In 2004, Keefe was
found to have charged sales tax on some items that aren't taxable in Texas
in connection with a Collin County jail commissary contract. As a result,
almost 600 inmates were overcharged more than $5,000, records showed.
Because of the error, the Collin County sheriff awarded the contract to a
different firm.
October 4, 2006 Dallas Morning News
Dallas County commissioners on Tuesday unanimously approved the first
phase of a plan to provide more clinical space inside the jail for inmate
medical and mental health needs. The county's selection committee
recommended that St. Louis-based Keefe Commissary Network be awarded the five-year
contract to sell snacks, toiletries and other items to the more than 7,000
inmates. The company's bid calls for a 40 percent commission on sales or $2
million in guaranteed annual revenue for the county, whichever is greater.
Revenue under the current vendor has averaged about $670,600 a year over
the last three years, according to the county auditor. "It shows what
can come from a very well-run procurement process," Mr. Clemson said.
Keefe disclosed to the county that it currently is under investigation by
the U.S. Department of Justice over kickbacks its subcontractor is accused
of paying to the former head of corrections in Florida in connection with a
prison contract.
DeWitt County Jail, Cuero, Texas
May
9, 2006 The Victoria Advocate
Bookkeeping problems in the DeWitt County Jail commissary should be a thing
of the past now that the supplier and office policy have changed, Sheriff Jode Zavesky told county
commissioners Monday. Zavesky said he had signed
a contract earlier this month with Keefe Supply Company to supply and
administer the jail's commissary. "Our last supplier (Aramark) kind of left us dangling," the sheriff
said. "They said we were too small an operation and they weren't
coming back." Commissioner Curtis Afflerbach
asked if the problems with the system that the county auditor reported at
the last court's meeting would be resolved with the new company. "We
hope to reconcile that the best we can prior to this new contract," Zavesky said. "We've also implemented some changes
with our staff that we hope will keep us from getting into the same
problems."
Florida Department of Corrections
April 24, 2007 St Petersburg Times
The former head of the state Department of Corrections, who admitted
that he accepted tens of thousands of dollars in kickbacks from a prison
contractor, was sentenced to eight years in prison Tuesday. James Crosby
was given 30 days to report to federal prison to begin serving his
sentence. Prosecutors had agreed to a sentence of no more than 57 months,
but U.S. District Judge Virginia Hernandez Covington said Crosby deserved a
longer sentence because he violated a position of trust. At sentencing,
Crosby apologized to the people of Florida, to Department
of Corrections employees and to the current DOC chief, James
McDonough, who was appointed to replace Crosby after he resigned in
February 2006. McDonough was the only witness the government called to
testify at the sentencing Tuesday. He told the judge how corrupt the
department he inherited had become, with undisciplined employees who took
the law into their own hands. "Corruption had become a cancer on the
department," McDonough told the judge. "My office was a crime
scene taped off, an indication we had serious problems." Crosby, 54,
and Allen Clark, 40, a former regional director for prisons in North
Florida, were charged together last year with accepting more than $130,000
in kickbacks between October 2003 and February 2006. Clark is scheduled to
be sentenced Wednesday. Crosby started as a guard in the prison system in 1975
and worked his way to the top, using his considerable political skills to
curry favor with state officials and the Police Benevolent Association, the
union that represents corrections officers. As he worked his way to the
top, he became close friends with lobbyists and the prison vendors who hire
them. The government said Clark accepted kickbacks from American
Institutional Services, a Gainesville company that supplied the prison
commissary, and that Clark would share the kickbacks with Crosby. The kickbacks
totaled up to $12,000 a month.
July 11, 2006 AP
Former Corrections Department Secretary James Crosby Jr. pleaded guilty
Tuesday to taking thousands of dollars in kickbacks from a prison
contractor, blaming some of his actions on alcohol abuse. After entering
his guilty plea, Crosby told reporters he was ashamed of his actions. It
was another step in the downfall of a man whose prison system was recently
the target of several scandals and investigations. "I apologize to
everyone. What I did was wrong," Crosby said. "I wish I could
take it back." Crosby told U.S. Magistrate Marcia Morales Howard that
he was being treated for alcohol abuse and high blood pressure. "I am
getting treatment," Crosby said, when asked by reporters if he was an
alcoholic. He would not give details into the kickback case. "I made a
choice. I pleaded guilty," he said. "I take responsibility for
what I did." Crosby apologized to Gov. Jeb Bush, his family and the
citizens of Florida. "I misled Gov. Bush," Crosby said. He added
that "shame" had kept him from contacting Bush after he was
fired. Crosby, 53, and his protege, Allen Wayne
Clark, formerly one of the department's regional directors, were charged
last week with accepting kickbacks from American Institutional Services, a
company which sold snacks and drinks to prison visitors on weekends.
American Institutional Services, based in Gainesville, was a subcontractor
of Keefe Commissary Network in St. Louis, which had the contract to supply
commissary services to inmates. At Clark's and Crosby's urging AIS was
hired by Keefe to handle the cash weekend sales to prison visitors.
July 5, 2006 AP
Former Florida prison chief James Crosby will plead guilty to a federal
charge of accepting kickbacks from a subcontractor, according to court documents
filed Wednesday. Crosby and former corrections department regional director
Allen Clark are accused of accepting $130,000 from the contractor over a 2
1/2-year period ending this past February, according to the documents filed
in U.S. District Court. Clark, who was viewed as Crosby's protege, will be charged with the same crime. Like
Crosby, he has entered into a plea agreement with federal officials;
Clark's arraignment is scheduled for Thursday. Gov. Jeb Bush forced Crosby
to resign as state corrections secretary in February after Crosby became
part of a wide-ranging investigation into possible criminal activity among
prison system employees. Crosby's attorney, Steven R. Andrews of
Tallahassee, said his client will be in Jacksonville on Tuesday for
arraignment. Crosby agreed to the terms of the agreement June 27, the
documents show. U.S. Attorney Paul Perez said both Crosby and Clark can
expect up to eight years in prison as part of the agreement. Additionally,
law enforcement officials said seven other current and former prison
employees are facing state charges of grand theft and one other person a
charge of accepting unauthorized compensation as part of a lengthy,
wide-ranging investigation into the embattled corrections department.
"I am disappointed by this violation of the publics
trust and by the abuses committed by those in leadership positions,"
Bush said in a statement. "Our work requires the highest level of
integrity. Anything less is unacceptable and undermines the good work done
by many capable and committed state employees." As part of the
agreement, Crosby waived indictment and will not face any other federal
charges in return for his cooperation in the ongoing investigation of the
prison system. Through his attorney, Crosby - who face
maximums 10 years in federal prison, a $250,000 fine, or both on the
kickback charge - had no immediate comment. "He'll issue a statement
sometime later. ... He hopes to get on with his life," Andrews said.
According to the plea agreement, Crosby agreed to accept the kickbacks with
Clark - who resigned under fire last August - from a person who eventually
became a subcontractor between the department and the Keefe Commissary
Network, a firm that sold snacks to state prison visitors on weekends. It
could not be immediately determined if Clark has an attorney. The person
arranging the kickbacks is described as being from the Gainesville area and
an acquaintance of Clark and Crosby, but not otherwise named. Clark would
accept the kickbacks from that unnamed conspirator, according to the
documents, and deliver part of those payments to Crosby. They totaled up to
$12,000 monthly. Crosby, according to the documents, stopped receiving his
portion of the kickbacks after Clark resigned, but Clark continued taking money
from the conspirator until earlier this year. Crosby, who started in the
prison system in 1975, was a former warden at Florida State Prison and
headed the nation's third largest corrections system. Over the final months
of his tenure as corrections secretary, the department faced intense
scrutiny over arrests related to alleged steroid abuse by guards,
accusations of sexual assault and the arrest of a former minor league
baseball player who was allegedly hired only to help a Florida prison
employee softball team. In April 2005, a new series of problems cropped up
at the department, including a brawl that broke out at a softball banquet
in Tallahassee. Three DOC officials faced charges related to the fight,
although some charges have since been dropped. Clark was one of those
charged for the brawl, spurring his resignation. Following Crosby's
departure in February, Bush appointed former state drug control director
James McDonough as the new corrections secretary. "I am confident he
will continue implementing corrective measures to ensure all personnel at
the agency are held to the highest standards," Bush said. Associated
Press writers Brendan Farrington and Brent Kallestad
in Tallahassee contributed to this report.
June 8, 2006 Florida Times-Union
State and federal agents raided a Gainesville business Wednesday that sells
snacks and drinks to people who visit Florida prisons on the weekends.
Agents took paperwork and business documents from American Institutional
Services, said Jeff Westcott, an FBI spokesman in Jacksonville. No arrests
were made and the warrant has been sealed, Westcott said. A wide-ranging
investigation into the Department of Corrections has been continuing for
more than two years and helped lead to the February ousting of DOC
Secretary James Crosby. At the time, Gov. Jeb Bush said it would become
clear that letting go of Crosby, who has not been charged, was the right
thing to do. Interim DOC Secretary James McDonough has said he's looking at
several contracts, including the canteen deal. Prominent Gainesville
insurance agent Edward L. Dugger started American
Institutional Services (AIS) in June 2004, state records show. About two
weeks later, AIS had a deal with Keefe Commissary Network to run the
canteens on the weekends. According to the deal, AIS gets a cut of the
weekend sales for running the canteens. Dugger
was out of the office Wednesday afternoon and did not return a message left
there; nor did he return a message left at his home.
June 6, 2006 Palm Beach Post
A political committee using what critics call a loophole in campaign
finance laws is targeting likely Democratic voters by mail and telephone to
promote gubernatorial hopeful Rod Smith. The group, funded largely by
developers and a prison contractor who donated $30,000, is trying to
acquaint voters with the state senator, little known outside his North
Florida district, before the Sept. 5 primary. Floridians for Responsible
Government Inc., headed by an Orlando developer and close family friend of
Smith's, raised $90,000 in March and paid for the mailings and automated
phone calls, called "electioneering communications" under state
elections laws. As reported by The Palm Beach Post last week, the group
advocating for Smith was created in February by Orlando developer Smith
family friend Michael Spellman. The group raised $90,000 from eight
contributors by March 31, according to Internal Revenue Service documents.
The Boca Raton-based Sam W. Klein Trust gave $17,500, the documents show.
Klein is the owner of Palm Beach Aggregates, a mining company, and a former
executive of gambling equipment maker Bally Technologies Inc. American
Institutional Services Inc. made the largest contribution — $30,000. State
corrections officials said Monday that the company subcontracts with Department of Corrections contractor Keefe Commissary
Network to run the prison's canteen services. Former Department of
Corrections Secretary James Crosby, who was forced to resign this year,
approved the no-bid Keefe contract, under which the company pays the state
to sell items such as candy and coffee to inmates. Crosby's replacement,
James McDonough, has said that he plans to look into the contract, which
has been amended several times without justification, according to an
auditor general report.
April 5, 2005 Palm Beach Post
Corrections officials Monday defended a contract for canteen services that
they say pays the state $7.2 million a year more than when the state
handled the service, despite criticism from lawmakers about how the
contract was awarded and why the state's earnings remained static while the
vendor's profit increased. In October 2003, the Department of Corrections
entered into a three-year, no-bid contract to have Keefe Commissary
Services take over the 240 canteens previously operated by DOC staff and
inmates. Keefe, which services 65 percent of the nation's inmates in jails
and prisons, agreed to pay the state 82 cents per inmate per day to run the
canteens, which sell items such as candy, coffee and combs. In return,
Keefe would be allowed to keep its profits from the canteens, where each
inmate's spending was limited to $65 a week. But four months after signing
the contract, DOC staff increased the amount of money inmates can spend to
$90 a week, an increase of 38 percent. The amount of money paid to the
state did not increase. "Obviously, it looked like a pretty sweetheart
deal to me," said Rep. Susan Bucher, D-Royal Palm Beach, a member of
the Joint Legislative Auditing Committee now looking into the contract
after an auditor general investigation completed last fall. Sen. Victor Crist,
R-Tampa, speculated, "They underestimated their cost of doing business
and they needed to have some adjustments in order to continue providing
services." The Keefe contract was amended three times in ways that "may
increase DOC costs related to canteen operations" without preparing a
cost analysis or "other written justification" before executing
them, the auditor general report found. The other changes gave Keefe
proprietary ownership of the hardware and software used in the canteens,
reduced the supplies the vendor was supposed to provide, and allowed Keefe
to garnish inmate employees' wages for inventory shortages incurred while
the employee was working in the canteen. In July 2004, the contract was
changed to raise the amount of money paid to the state to 82.7 cents per
inmate.
Maryland Department
of Corrections
Nov 28, 2015 baltimoresun.com
State auditors say prison agency curbed contract competition
State auditors say the agency that oversees Maryland's prisons
structured a multimillion-dollar 2012 contract for commissary services in a
way that stifled competition and limited the bidding to a single company.
The actions described in a recent report by the Office of Legislative
Audits occurred under Gov. Martin O'Malley and Gary Maynard, his secretary
of public safety and correctional services. The O'Malley-led Board of
Public Works approved the contract for Keefe Commissary Network of Edison,
N.J., in 2012. The deal was structured in a complex way that made it
difficult to put a value on the overall deal, auditors said. But they said
it was estimated that it would bring in almost $16 million in revenue for
the state over a five-year period. When officials in Maynard's office put
together a request for proposals from potential contract bidders, auditors
said, they lumped the job of running the
commissaries, at which inmates buy goods, together with the task of setting
up an information technology system for a bank for inmates. Auditors found
the Department of Public Safety and Correctional Services also added in a
procurement contract for "inmate welfare kits" with toiletries
and other necessities. When prospective bidders asked department officials
whether they could bid on the various items individually, they were told
no, auditors said. The result was that the state received one bid — from
Keefe. Auditors also faulted the department for failing to consult with the
Department of Information Technology, which generally has oversight over
such procurements. Auditors did not find fault with Keefe Commissary
Network. The company did not respond to a request for comment. The
department recommended the contract with Keefe to the board, saying its bid
was "fair and reasonable." When the contract came before the
board, it faced opposition from Patrick Moran, president of AFSCME Council
3. But most of the discussion by O'Malley, Comptroller Peter Franchot and Treasurer Nancy K. Kopp centered on
whether the contract would displace union-represented state workers — not
the question of competition. After the audit was released, Moran said the
deal "reeks of cronyism and doling out favors to the private prison industry."
"It is a bad deal for taxpayers and for employees when multiple
functions are rolled into one contract and there are not competitive
bids," Moran said in a statement. He said AFSCME anticipates that the
Hogan administration will "clean this mess up." Hogan's public
safety secretary promised to do just that. In a terse response to the
audit, Secretary Stephen T. Moyer said he agreed with the auditors'
findings. He said future bid requests will be "structured to promote
maximum competition." He also promised that his agency would consult
with the information technology department on future computer-related
contracts.
Texas Legislature
July 28, 2006 Texas Observer
During 12 years in the Texas House, the legislative duties of Rep. Ray
Allen, a Grand Prairie Republican, have periodically cross-pollinated his
private business enterprises. So when this one-time chair of the House
Corrections Committee recently left the Legislature to lobby, he seemed
predestined to hustle for prison interests. Yet destiny has its twists.
This conservative, who amassed a dismal House environmental record, is
working closely with Austin environmental activist Jeff Heckler. While
Allen has yet to report any clients with obvious prison ties, Heckler and
Allen’s former chief of staff do lobby for corrections-industry clients. Asked
about his odd-fellow relationship with Allen, Heckler says, “We’re not
working on any environmental stuff. We’re mostly working on corrections
stuff.” Welcome to the lobby, where nothing is as it seems. When Allen
resigned in January, he expressed frustration over trying to support
himself while working as a poorly paid lawmaker during yet another special
session. “I simply cannot afford to serve on a $600-a-month salary with no
other source of income,” he told the Fort Worth Star-Telegram. While candid
about his competing personal and legislative obligations, Allen—who now
reports lobby income of up to $485,000—has been sensitive to suggestions
that this juggling act created occasional conflicts. The Houston Chronicle
previously reported on Allen’s fortuitous timing in founding Grand
Prairie’s Academy for Firearms Training in 1995. This occurred soon after
two House panels that Allen chaired discharged legislation to let Texans
carry concealed guns—if they first obtained handgun-safety training. Three
years ago, the Observer and Texans for Public Justice reported that Allen,
who then chaired the House Corrections Committee, was promoting a
prison-privatization bill while he and his top aide lobbied outside Texas
for private prison interests. Allen responded that his client, the National
Correctional Industries Association (which counted two major private prison
companies among its many members), promotes prison labor—not prison
privatization. With this in mind, we turn to the delicate matter of Allen’s
latest ties to the prison lobby. So far Allen has reported in public
filings that eight clients are paying him a total of between $230,000 and
$485,000 this year (Texas lobby incomes are reported in ranges). While none
of Allen’s reported clients boast obvious prison ties, at least one of them
has a keen interest in prison contracts. Allen also works closely with two
lobbyists who represent prison companies. One is Scott Gilmore, who
previously served as Allen’s legislative chief of staff and was also the lawmaker’s
lobby partner. The other is Heckler, the Austin activist. Four of Heckler’s
six lobby clients double as clients of Allen or Gilmore. Meanwhile, Gilmore
is under contract to the Solutions Group—Heckler’s lobby firm. Gilmore left
Allen’s office to form his SEG Strategic Alliances lobbying firm in late
2004. Last year Gilmore reported lobby income of up to $220,000 from six
clients. Leading them were clients from the industry that he and Allen
recently oversaw. Gilmore and Heckler both lobbied last year for AT&T
Inmate Calling Services and Atlantic Shores Healthcare—the mental-health
subsidiary of private prison giant GEO Group Inc., formerly known as
Wackenhut Corrections. Gilmore also has been representing the Keefe
Group—the nation’s leading supplier of prison commissaries. This year
Gilmore signed CentraCore Properties Trust, a
for-profit investor in prisons. Consider California-based Bottom Line
Utility Solutions, which advises clients on how to lower utility bills.
Last year Bottom Line hired Heckler and Gilmore as it promoted legislation
to require Texas prisons to install water-conservation devices (HB 2905).
Approved by Allen and the six other members of the Corrections Committee,
the bill passed the House too late in the session for Senate action. This
year Bottom Line hired a third Texas lobbyist: Ray Allen. Such
revolving-door abuses undermine public faith in elected officials and
government—a cost that is offset for Allen and Gilmore by the up to
$100,000 that they will receive from Bottom Line this year. While Allen’s
old legislative colleagues could crack down on revolving-door abuses, too
many of them already are looking ahead to lucrative future lobbying careers
of their own.
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