The scent of roasting coffee wafts through the industrial building. In one large room, dozens of tough-looking, tattooed men in blue shirts hunch over sewing machines to fashion jeans and underwear. In another, scores of white-coated butchers wield hooks and knives to carve mountains of meat.
The bustling workshops are part of a sprawling $153-million-a-year conglomerate that is a semiautonomous California state agency. The California Prison Industry Authority holds a virtual monopoly on supplies to state offices, ranging from furniture to bumper stickers.
But the hum of men and machinery at work here at Mule Creek State Prison southeast of Sacramento masks serious management problems that for nearly 10 months have rocked the agency.
At least one inmate worker allegedly cribbed Social Security numbers of poor people getting eye wear from the state; other prisoners cooked up $50,000 in phony dairy invoices, and one prisoner used a state computer to trade stocks and collect X-rated photos.
The problems go beyond such crimes. The broader issue is whether the state ought to run a vast industrial operation that markets a line of 1,800 products. Critics also wonder why prison labor in other nations is a violation of human rights, but is allowed in California.
In recent years, the Department of Corrections has been the focus of intense scrutiny by lawmakers as well as state and federal law enforcement investigators. Eight Corcoran State Prison officers are scheduled to go on trial later this month in Fresno on federal charges of civil rights violations. Lawsuits over poor medical treatment and sexual harassment of employees have forced the department to pay out millions of dollars.
Now the management of the work program designed to save the state money while rehabilitating inmates is being called into question. In January, Cal Terhune, director of the Corrections Department, quietly transferred the prison authority's longtime director, David King. Terhune, who heads a board that oversees the authority, said he "felt there was really a need for a change."
King's exit after eight years has renewed a policy debate in the Capitol about the inmate labor program.
Does it give the 6,300 employee-prisoners, who are paid an average of 55 cents an hour, real-world job skills? Or is it a make-work project that overcharges public agencies for second-rate goods?
Organized labor has long argued that prison work programs do not provide inmates safe working conditions. "Do they have an advocate who they can turn to if they have a problem on the job?" asked Sharon Cornu, a spokeswoman for the California Labor Federation.
She said labor is troubled by the treatment of prison workers in other nations, especially China. "So we think it's important for every politician who decries the use of prison labor in other countries to look at what's happening here."
Corrections officials dismiss such complaints, saying that, unlike prisoners in many other nations, California inmates work voluntarily.
Officials say the jobs program prevents idleness and teaches inmates skills useful outside prison walls. Many convicts in the program are low- or medium-security prisoners who will one day be back on the streets of California cities.
"We've had some serious problems at the Prison Industry Authority, and we've moved promptly to correct them," said Stephen Green, a spokesman for the Davis administration's corrections agency. He added that there is a waiting list of inmates who want to sign up for programs and "after losing money for much of the 1980s, [the authority] is now profitable."
As the corrections system grew in the late 1980s and early 1990s, more inmates volunteered for work assignments, the number rising from 2,300 about 20 years ago to about 7,000 today.
Two decades ago, the Legislature felt the state had failed to provide prisoners jobs that would cut the cost of running prisons or reduce the number of inmates with too much time on their hands.
So the authority was created as a semiautonomous agency. Its budget appropriations are not subject to annual legislative approval. Control of the budget is given to an 11-member board headed by Terhune.
State law bars the direct sale of its products and services to the private sector in California. As a consequence, about half its sales of inmate clothing, laundry and other services are to the Department of Corrections.
All states employ some of their prisoners in labor programs. Some, however, allow such goods as bluejeans manufactured in prison to be sold on the open market.
The Prison Industry Authority has been the target of criticism almost from its inception in the early 1980s.
In 1996, the state auditor found that buyers were not satisfied with the authority's performance and were especially upset with long delivery times and noncompetitive prices. Seventy-one percent of those who responded to the auditor's questionnaire felt that the authority was inferior to other suppliers.
Officials acknowledge that the increasing number of lock-downs of inmates in their cells continues to jeopardize timely deliveries. (Lock-downs typically follow violence in the state's 33 prisons--the nation's largest corrections system.)
Also, about four years ago, the independent legislative analyst's office suggested that the program be put under private management. The report said that although the California prison industry was supposed to be self-supporting, it actually survives on hidden state subsidies.
Today, the agency remains tax-supported, though prison officials voice an interest in moving toward a privatization plan similar to that of Florida, where a nonprofit corporation manages the prison industries.
The Prison Industry Authority's programs at Mule Creek and elsewhere are not California's only work details in the lockups.
In 1990, voters overwhelmingly approved Proposition 139, which eliminated a state ban on the leasing of prison labor to private industry. It cleared the way for creation of the Joint Venture Program, which allows businesses to use prison labor to manufacture products for the open market.
At the Prison Industry Authority, administrators maintain that the problems that have cropped up in the past year do not reflect a crisis in management.
But internal investigators are asking whether breakdowns at the authority are rooted in a lack of supervision of inmates. Investigators say the problems may have more to do with the intelligence of computer savvy prison workers compared with the general prison population. The inmate workers are more likely to have committed computer-related scams.
One incident under investigation came to light last June after the Internal Revenue Service contacted the agency about the misuse of Social Security numbers supplied by poor people buying eye wear through a state program, according to state investigators. About 15,000 pairs of glasses are made monthly at the Richard J. Donovan Correctional Facility in San Diego.
As described in a state document, an inmate allegedly obtained confidential information about Medi-Cal beneficiaries and shared it with individuals outside prison as part of a tax-fraud scheme. The information supposedly was sold to get fake identification.
State investigators say the IRS has been looking into the matter, but IRS officials in Laguna Niguel declined to comment.
Authority administrators acknowledge that there was "an unacceptable breach of security" at the optical plant and say that security has been tightened.
Another case occurred at the California Institution for Men in Chino, after a supervisor found a fraudulent invoice. The incident involved inmates' allegedly forging documents, including staff signatures, and diverting payments to a post office box. Six people, including two inmates, were arrested last week on charges of fraud, theft and misuse of a state computer.
At the California Men's Colony in San Luis Obispo, an inmate handling computer maintenance allegedly managed to construct a dial-up modem for the personal computer assigned to him and to tap into a state fax line in the ceiling of the authority's administrative offices, according to a letter King wrote in January just before he was transferred.
Richard Ehle, who heads up the prison system's internal affairs unit, said his office is continuing to lookinto allegations involving all three incidents. Ehle said such incidents reflect a dilemma unique to prison labor.
"You are dealing with inmates in a businesslike setting. . . . But at the same time security issues are paramount, and sometimes that's forgotten," Ehle said.
At Mule Creek, nestled in the rolling foothills about an hour from Sacramento, prison laborers busy themselves under the watchful eyes of corrections officers and authority managers.
Inmates roast a special Mule Creek State Prison blend of coffee that is sold to public agencies. Prisoners also sew a variety of clothes and prepare sausage and other meat products for distribution throughout the prison system.
One inmate serving 20 years to life for second-degree murder said the meat cutting is like any other job. "You put in eight hours and you go home.
"If I could get out and get a similar situation, it would be great," said the 53-year-old inmate, who has been incarcerated for 17 years.