California Prisons Looking to Get Into Business

The California Department of Corrections began planning its own prison labor program, called Joint Venture, immediately after approval of Proposition 139 in November, 1991.

Many of the procedures of Redwood Outdoors--an independent Washington contractor that hires inmates behind prison walls--will eventually be used in California as well.

But Department of Corrections officials say the California Youth Authority’s Free Venture program, which teaches such job skills as telemarketing and electronic assembly to 14- to 25-year-olds, will ultimately serve as the model.

Frederick Mills, administrator of Free Venture since its inception in 1985, says the CYA has always been exempt from legislation banning the use of prison labor in the public sector because youth offenders are “wards of the state and not considered prisoners.”

Mills, among the first to be named to a governor’s task force formed to plan and implement Joint Venture, has been a vocal supporter of expanding Free Venture into the adult prison system.

Compared to similar youth programs around the country, Free Venture ranks third in gross wages paid to its workers.

Like those working through Redwood, however, participants cannot keep all their wages.

According to Mills, of the $2.5 million earned in 1990:

* $200,000 was earmarked to pay state and federal taxes.

* $412,000 was used for reimbursement of room and board.

* $337,000 went toward victim restitution.

* Forty percent of earnings went into interest-bearing savings accounts to be available to inmates upon release.

According to Noreen Blonien, assistant director of Joint Venture, a recent open house at San Quentin enticed nearly 50 business owners; many of those executives expressed interest in hiring adult inmates rather than young offenders.

“We already have an answering-service business in operation at Norco prison and are hoping to have at least 10 more companies set up by the end of the year,” Blonien says, adding that her goal is to eventually have 9,000 of the state’s 102,000 prisoners in the program.

She expects 250 inmates in four prisons--California Rehabilitation Center at Norco, California Institution for Men at Chino, San Quentin and the Richard J. Donovan Correctional Facility in San Diego--to be in place by July. (“Heavy gang members, Death Row inmates and those with a history of mental problems” will not be accepted, she says.)

The Department of Corrections cannot release the names of private businesses, but companies that have explored the Joint Venture program include a beeper manufacturer and a maker of plumbing valves.

Tip Kendal, communications officer for the Department of Corrections, says the garment industry “could be considered.”

He points out that Los Angeles is second only to New York in apparel production and that many companies make apparel outside the United States. “It would be a cost-effective way to bring their businesses back home.”

The rules for manufacturing in prisons are relatively simple. If a company meets the Joint Venture criterion of not affecting existing jobs, only an application from the state Department of Employment Development and a Dunn & Bradstreet financial check are required, Blonien says.

Companies then set up their businesses as they would elsewhere--leasing space, paying for materials and utilities and providing worker compensation and unemployment insurance.

“The initiative says we are able to lease space at less than market cost. That’s one of the many advantages to working with the prison system,” says Ido Nienhuis, community resources manager at San Quentin.

“That cost is negotiable between each business. Another advantage is companies don’t have to pay hospitalization insurance.”

Disadvantages? There is a “no hostage” policy, Blonien says. “If someone is taken hostage, we don’t negotiate.”

She says supervisors are given a 40-hour course on prison regulations as a precaution.

Still, Blonien says, “I see this as an opportunity for inmates to take a different path, to get job skills and get out of the system entirely. If we can give them the tools to be taxpaying citizens, we’ll eventually save money because they won’t be back in prison.”

She says it will take at least five years and a great deal of patience to determine Joint Venture’s effectiveness.

“The key for Californians,” she says “will be not to criticize it before it’s had a chance to work.”