Las Vegas: Prison Labor Used to Beat the Odds

This research article comes from the weblog: Voters Legislative Transparency Project. We are glad that they have investigated this:

Jan. 11th 2013, by Bob Sloan

Thousands of tourists, businessmen, CEO’s and executives from all over the world mix with citizens of Nevada in the luxury and splendor of Las Vegas’ many hotels and casinos. Most come to this beautiful city for the gambling and incredible shows found everywhere one turns. Inside the cool confines of casinos visitors can trust that every slot machine, roulette table and blackjack shoe is checked and monitored to guarantee fair play - no magnets under the roulette table, no dealer manipulating the cards or slots rigged to never pay out. Those trying to shave the odds are not welcome and at the first hint of cheating, find themselves on the sidewalk, banned or worse.

Each casino has a multitude of surveillance cameras to guarantee play is fair and the odds are understood by all who play the quarter slots or sit down at the high roller poker table. To ensure such fairness, the Nevada Gaming Commission regulates every aspect of gambling in the entire state. Strict penalties for violation of gaming regulations by casino operators keep each in line and playing by the rules.

Outside the casinos, locals find the guarantees of fair play and manipulation of odds are not so well regulated. State agencies responsible for overseeing and enforcing specific state laws and regulations have lost their vigilance. In at least one case a state regulation involving the Nevada Department of Corrections is providing one company an unfair advantage over competitors. The prize sought isn’t a hundred dollar hit on quarter slots, its millions in profits. An important aspect of this advantage provided to a single company, is an increase in Nevada’s already high 10.8% unemployment rate.

The issue is an ongoing battle being waged over the use of inmate labor by a private company, Alpine Steel operating out of Las Vegas, NV. Alpine is competing directly against other Nevada companies in the field of structural steel fabrication. Alpine’s competitors pay fair wages, benefits, provide unemployment insurance and vacation pay, while Alpine avoids all those costs.

It is not illegal for companies to be allowed to use prison labor under current laws but there are strict state and federal regulations involved that must be met before allowing direct competition with prison made products:

Mandatory Criteria for Program Participation Corrections departments that apply to participate in PIECP must meet all nine of the following criteria:

1. Eligibility. Authority to involve the private sector in the production and sale of inmate-made goods on the open market.
2. Wages. Authority to pay wages at a rate not less than that paid for work of a similar nature in the locality in which the work is performed.
3. Non-inmate worker displacement. Written assurances that PIECP will not result in the displacement of employed workers; be applied in skills, crafts, or trades in which there is a surplus of available gainful labor in the locality; or significantly impair existing contracts.
4. Benefits. Authority to provide inmate workers with benefits comparable to those made available by the federal or state government to similarly situated private-sector employees, including workers’ compensation and, in some circumstances, Social Security.
5. Deductions. Corrections departments may opt to take deductions from inmate worker wages. Permissible deductions are limited to taxes, room and board, family support, and victims’ compensation. If victims’ compensation deductions are taken, written assurances that the deductions will be not less than 5 percent and not more than 20 percent of gross wages and that all deductions will not total more than 80 percent of gross wages.
6. Voluntary participation. Written assurances that inmate participation is voluntary.
7. Consultation with organized labor. Written proof of consultation with organized labor prior to program startup.
8. Consultation with local private industry. Written proof of consultation with local private industry prior to program startup.
9. National Environmental Policy Act (NEPA). Written proof of compliance with NEPA requirements prior to program startup. (emphasis mine, source BJA PIECP program overview) In the instant case, most of the above mandatory regulations are being ignored - entirely. Prevailing wages paid by most in the steel fabrication industry in Las Vegas are in excess of $17.00 per hour. The inmates manufacturing components for Alpine are paid less than half that scale at minimum wage or less.

By having access to and using inmate labor provided by Nevada’s Silver State Industries (SSI), Alpine Steel, is able to underbid competitors for structural steel construction projects. This company is just one of several businesses in Nevada (and 150 others nationwide) enjoying increased benefits and profits derived from inmate labor. Other Nevada companies enjoying similar access to inmate labor include; Vinyl Products, Inc., (vinyl waterbeds), Thomson Equipment Company (Silver Line Industries trailer manufacture and remanufacturing) and Jacobs Trading Company (repackaging).

Alpine Steel is currently manufacturing and installing prison made structural steel components at three locations in Las Vegas; the SkyVue (Ferris Wheel developed by Howard Bulloch), Staluppi Automotive Group’s Planet Mazda and Wet ‘n’ Wild Las Vegas (financed by Andre Agassi; his wife, Steffi Graf; Dr. Steven and Karen Thomas, members of the Thomas family of Thomas & Mack Center fame; and Roger and Scott Bulloch, of SPB Capital Partners). Companies competing with Alpine Steel for these contracts, were totally unaware they were competing against a company with such a distinct and hidden advantage.

While the Staluppi and water park projects are actively being constructed, the Sky Vue job appears to be abandoned, though developer Howard Bulloch assures the absence of activity is due to plan revisions - and not a lack of funding.

Unfortunately the original post was removed, so part 2 and 3 are also not found. Until we find these...