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Prison Corporation Hurting U.S. Workers, Congressmen Say

The outfit's exclusive contracts with federal agencies shut out small firms, lawmakers say.

November 22, 2002|From Associated Press

WASHINGTON — Lawmakers on Thursday assailed a government-run corporation that uses prisoners to make products, saying it puts other Americans out of work.

Federal Prison Industries Inc. makes 150 products, including office furniture, electronics and textiles, and its entire product line is sold exclusively to federal agencies. The agencies must buy their products from FPI, under the trade name Unicor, unless the corporation does not manufacture the item or it grants a waiver allowing the agency to shop elsewhere.

Rep. Peter Hoekstra (R-Mich.) said FPI is selling products that are not made by prisoners, but by other private companies that contract with FPI to get their exclusive access to government contracts.

He said he would ask Atty. Gen. John Ashcroft to reassign Steve Schwalb, FPI's chief operating officer, who was in the audience at the hearing.

Kenneth Rocks, the new chairman of FPI's board of directors, promised to make sure prisoners do not put law-abiding Americans out of work.

"I would not want to be a plant manager in Vineland, N.J., and tell my workers, 'If you want to continue making shirts for the military, then rob a bank because your job just went to the federal prison,' " he said.

Schwalb also was targeted by Rep. Donald A. Manzullo, chairman of the House Small Business Committee, who demanded that he remove a statement from the corporation's Web site which said that FPI was working with the committee to strengthen its relationship with small businesses.

"I don't want my name as chairman of this committee associated with the forced labor of FPI," said Manzullo, an Illinois Republican.

The corporation, an arm of the Justice Department's Federal Bureau of Prisons, employs nearly 22,560 prisoners, or 18% of federal inmates. In 2001, it had sales of $583.5 million. The program is promoted as providing job training that inmates can use once they are released.

Several small-business owners said that they could offer better quality, lower prices and quicker delivery than FPI, but that they are kept out of the market for U.S. contracts.

Manzullo called Schwalb out of the audience later to ask whether the Internet reference had been taken down.

Schwalb left and returned shortly after with a printout of the Web site showing that the reference had been removed.

After the hearing, Schwalb would not comment on any criticism except to say, "I think it's to be expected in a hearing where C-SPAN is operating."

Angela Styles, administrator for federal procurement policy at the Office of Management and Budget, said the White House is committed to reforming FPI to promote competition. But she said that the program has been successful in keeping prisoners from returning to a life of crime and that there is concern that changes to the exclusive contracts will increase unrest in the prisons.

She acknowledged that some FPI contracts are going to products built outside the prisons, but she said OMB is not sure how widespread the practice is and is considering how to respond.

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