Recent Events

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.

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.

Past History