La. to require bids on private work-release contracts

When St. Tammany Parish Sheriff Jack Strain decided to set up a private work-release program in Covington in 2008, he didn’t seek out interested bidders. Instead, he hired his campaign treasurer and a group of political supporters to run it.

He turned to another group of friends a few years later when he opted to privatize the Slidell work-release program that his office had been running for about 15 years, this time informally notifying the public of his plan by mentioning it in a story in a weekly newspaper.

That sort of casual selection process will soon be a thing of the past, says state Department of Corrections Secretary Jimmy LeBlanc. In a recent interview, LeBlanc said he plans to write new regulations that will require any Louisiana sheriff who wants to award a private contract to run a work-release program to go through a bid process first.

LeBlanc, who sets the rules for such programs, said one thing he concluded from the recent controversy involving Northshore Workforce LLC, the firm that Strain chose to run his Covington program, was that a better selection process is needed.

Two months ago, Strain shut down Northshore’s operation, which by then had become embroiled in controversy after a series of high-profile escapes and deaths of inmates. Reports by The New Orleans Advocate and WWL-TV also exposed favoritism toward certain contractors and lax supervision of inmates.

The last straw came when an inmate in Northshore’s care texted his ex-girlfriend to warn her he was coming after her. She called Northshore to report it, but the man still escaped, then kidnapped and allegedly raped her.

Shortly after the program was shut down, state Inspector General Stephen Street’s office began investigating it; the probe is continuing.

“The one thing in our SOP (standard operating procedures) that I think we need to work on is how they award contracts at the local level,” LeBlanc said. “I will rewrite (the SOP), and I will include that, if you want to be in the work-release business as a sheriff, you will have to RFP it,” using the acronym for a request for proposals.

“They will have to RFP it, and we will give them a format to use,” LeBlanc said. “There will be points for experience, points for the per-diem cost. You’ll have oral interviews. It’ll be a real formal process. We need to do that.”

For now, LeBlanc said, he’s in no hurry to start another work-release program in St. Tammany Parish. “I think we need to let things settle down and see what’s what,” he said.

In the meantime, LeBlanc said the Department of Corrections is pioneering his proposed reform by conducting its own first-ever request for proposals for a work-release program it plans to open in southwest Louisiana in the old Phelps Correctional Center in DeQuincy, which the state closed in 2012. The plan calls for a 300-bed facility that will allow inmates to learn marketable skills while taking part in the industrial boom starting to take shape in that region.

Responses to that RFP are due Tuesday. A half-dozen interested firms, as well as representatives of the Beauregard Parish Sheriff’s Office, turned up at a pre-bid conference in April, LeBlanc said. The DOC will rank their proposals based on four factors: Cost per inmate per day is weighted most, followed by “technical approach,” qualifications of vendors and use of subcontracting firms owned by military veterans.

Financial incentive

As a wave of privatization has swept over work-release programs in much of the state in the past decade, there hasn’t been a lot of emphasis on competition or transparency. While many sheriffs have turned to private companies to run work-release programs that used to be run in-house, they generally do so without any kind of open selection process, leaving their selections vulnerable to cronyism, critics say.

Private work-release programs can be quite lucrative, as state law allows operators of the programs to keep up to 62 percent of the wages earned by the inmates who report to jobs in the private sector during the day and return to sleep at the work-release facilities at night. But precisely how lucrative they are is hard to say. While the companies are required to turn in financial information to the DOC, the department has taken the position that those documents are not public records.

St. Tammany is the only parish in the New Orleans area that has outsourced its private work-release programs. The two outfits that won contracts both have ties to Strain, with Northshore being managed by Marlin Peachey, Strain’s longtime campaign manager.

The facility being run by the second firm, St. Tammany Workforce Solutions — whose principals include Strain campaign donors and friends — remains open. Many of Northshore Workforce’s inmates were transferred there in the wake of the shutdown; a spokesman for Strain could not provide a count of how many are now being housed there.

In and around Baton Rouge, the private work-release field is dominated by Paul Perkins, a former DOC official whose firm, Louisiana Workforce, runs the work-release programs in five parishes: East Baton Rouge, Livingston, West Feliciana, Iberia and Terrebonne.

Perkins is no stranger to the political world, either. Over the past five years, he has donated more than $30,000 to the campaigns of those five parishes’ sheriffs, with East Baton Rouge Parish Sheriff Sid Gautreaux receiving the largest share: $10,000.

Perkins also gave $25,000 in 2010 to the Committee for the Friends of Law Enforcement, a political action committee.

Less recidivism

While LeBlanc says he was concerned with some of what he saw at the now-shuttered Northshore Workforce facility, the experience hasn’t diminished his faith in work-release programs generally.

DOC statistics show that inmates who participate in Louisiana’s work-release programs are slightly less apt than their counterparts to commit new crimes. An average of 43 percent of work-release graduates commit crimes within five years, according to DOC. That compares to 48 percent of offenders released from local facilities and 45 percent of offenders released from state facilities.

DOC does not track recidivism rates for specific programs.

The negative experience with Northshore also has not dissuaded LeBlanc from the notion that privatizing such programs makes sense both for government and for the inmates themselves.

When work-release programs are run by the government, such as a sheriff’s office, there is little or no incentive to find the inmates the highest-paying jobs possible.

Private operators, LeBlanc said, are “motivated to go out and get the jobs, the better jobs, because very simply, they can do better. They can make more money, if you will, in the better jobs. … Whereas in government, you’re gonna get the same pay no matter what. Why do I need to find jobs if I’m gonna get paid the same amount of money? So I think privatization, given the right operator, is not a bad thing.”

LeBlanc conceded that he hadn’t really thought through the implications of a revenue “ceiling” in the program, which caps at $63.50 per day the amount an operator can take from an inmate’s wages.

While that is meant to reward high-earning inmates by letting them keep more of their money, it also removes any incentive for the program operator to find jobs that pay above $12.81 an hour, the rate at which an operator will reach his maximum profit of $63.50 per day.

“I guess at the time we wrote that, everyone was making minimum wage, and we were just hoping we could get them to $12 an hour,” LeBlanc said. “Maybe we need to relook at that.”

How inmates fare

LeBlanc concedes that Louisiana’s current system is not perfect, and he admits he has not compared Louisiana’s arrangements with those of other states.

Research by The New Orleans Advocate suggests that the 62 percent cut of wages that goes to program operators is very high. Few states have privatized work-release programs that resemble those in Louisiana; Florida’s program appears to be the closest parallel. There, the operator is allowed to keep 55 percent of inmates’ net wages — well below the 62 percent of gross wages that Louisiana grants operators.

That math has led many work-release participants to complain that Louisiana’s program is akin to working on a plantation — that by the time their taxes and other fees are taken out, and they spend a few bucks at the commissary, there’s not much left.

But LeBlanc cites DOC statistics showing that the average inmate walks out of work-release having been there eight months and saved around $2,100 — not a king’s ransom, to be sure, but better, he notes, than a lot of civilians do.

He called the revelations about Northshore “an embarrassment to us all” but said he doesn’t believe anyone acted with bad intent, and he noted that no red flags appeared when Northshore’s facilities were inspected in 2011 and 2012.

LeBlanc said he thinks the program may have gotten too big, too fast, with too many inmate employers to track.

“This is just my opinion, but Northshore, the way they grew into the business was maybe a little too quickly,” he said. “And maybe they had too many employers to try to keep track of. … I think they have 65 or 70 employers. That’s a lot of employers to keep up with. That ... could have caused some of these problems.”

But Northshore “is one incident of a much bigger picture that we have to learn from. And we are learning from that experience, and we’re still learning — we’re still investigating,” he said.

WWL-TV’s Katie Moore contributed to this report. Follow Gordon Russell on Twitter at @gordonrussell1.