Tag Archives: profit

State, Florida Company Reap Profits from Prisoners’ Families

Family and friends of about 20,000 inmates in the Tennessee prison system now must pay a commission to a private for-profit Florida company when they want to send money to the inmates’ trust accounts, and the state will get a cut, too.
Further from The Tennessean:
Under a contract awarded late last year and recently expanded, JPay of Miami charges fees of up to 4.5 percent to forward money to Tennessee inmates. The state under the contract also gets its share of the payments, a 50 cent fee for every transaction.
Advocates say the arrangement amounts to a kickback for the state and places an unfair burden on relatives of inmates, who often have limited resources.
“It’s a tax on citizens with the least ability to pay,” said Alex Friedmann of Prison Legal News, who said that he has received several complaints from relatives of inmates.
He said that many of the complaints involved lengthy delays in getting the money in the inmates’ accounts.
Corrections officials, however, say that the new system is an improvement, and that thus far the state’s income from the contract has been only $15,000.
“The vast majority of families and friends who have contacted us are pleased with the service and the convenience it offers,” corrections spokeswoman Dorinda Carter wrote in an email response to questions.
…The state never formally advertised for bids on the contract, though officials say they did review a proposal from another company, which, like JPay, had been recommended by a national association of state purchasing agents.
JPay also offers an email service for inmates, with the state getting a 4 percent commission.
,,,The contract replaces a system under which deposits in prisoners’ accounts were mailed directly to the 15 correctional facilities.
…n addition to the requirement to use JPay for inmates’ deposits, the state recently expanded JPay’s role to include payments of probation fees imposed on released inmates.
In addition to the money forwarding services, JPay’s contract also provides for video visits, songs or albums on an MP3 and a JP4 player.
For those services, the state’s commission jumps to as much as $10 per purchase.

For-Profit Charter Schools Bill Fails in Senate Committee

A bill from Sen. Todd Gardenhire that would let for-profit companies run and manage public charter schools failed to make the grade in the Senate Education Committee on Wednesday, reports the Chattanooga TFP.
The bill failed, getting just two votes, including the Chattanooga Republican lawmaker’s own vote, while one colleague said no and three others abstained.
Gardenhire earlier told the panel the bill is intended to help charter schools, which are run by nonprofit groups but funded with tax dollars. Often, they are started by parents, teachers, churches or other groups.
“As you all know, when the charter school starts up, the hardest year is the first year and sometimes it’s not easy to get competent administrators or people who know how to do the mechanics of starting a school,” Gardenhire explained. “This would allow well-meaning people who set up a charter school to go outside and hire people to manage it. That’s not to say everybody’s not competent.”
While charter schools can contract out some services like cleaning or food service to for-profit vendors, they currently are not allowed to contract out management services to them.

Politically-Connected Businessmen Sell $5M Building to State for $10M

A group of politically connected businessmen earlier this year sold a long-vacant Knoxville office building in need of millions of dollars in repairs and upgrades to the state for $10 million, twice the price they paid for it five years earlier, reports The Tennessean.
The building, for Pellissippi State Community College, will cost an additional $16.6 million to make it suitable for a community college, according to a report commissioned by the college to assess the property before the purchase.
A series of emails obtained by The Tennessean under open records laws shows that the top aide to Gov. Bill Haslam stepped in late last year to try to make the purchase a priority after being contacted by an intermediary for the Knoxville developer selling the 220,000-square-foot building.
The developer, Samuel J. Furrow, has been a business partner with the governor in the past and a friend of the governor’s father, who loaned Furrow’s wife $1 million while Furrow was trying to sell the building to the state.
Furrow and his investment group bought the vacant property at 7201 Strawberry Plains Pike for $5 million on June 28, 2007, from North American Philips and sold it to the state on March 9, 2012, for $10 million, according to public records.
“We stole it (from Philips) and sold it to the state,” Furrow said in a telephone interview, attributing the gain on the investment to a low purchase price.
He said the deal did not produce a full$5 million profit because of expenses such as interest and maintenance.
“We did everything right and for the right reasons,” Furrow said, calling the sale “clean as a whistle.”
The state bought the building by tapping $87 million that it had previously budgeted for TennCare, the state’s Medicaid program for the poor. But that money was able to be shifted for other uses when the federal government boosted its share of Medicaid funding for Tennessee as part of the stimulus package. In addition to $8.5 million in state funds, $1.5 million was contributed by the Pellissippi State Foundation toward the purchase.
Tennessee officials set aside an extra $2 million for immediate repairs, including a new roof. Estimates for total repair costs ranged from $3.1 million to nearly $5 million, records show. And to make the entire building suitable for use as a community college, a report dated Nov. 28, 2011, by Community Tectonics to Pellissippi State concluded it would cost $16.6 million, or $75 a square foot. Among that report’s recommendations was replacement of the heating and air conditioning system.
…The governor’s press secretary, Alexia Poe, said the governor was aware of the Knoxville building’s purchase but noted the process began before he became governor in January 2011. She said Haslam had never discussed the sale with Furrow or any of the other investors.
…Records obtained by the Tennessean under the state public records law show that a flurry of email activity began on Nov. 3, 2011, when Raja Jubran, acting as an intermediary for Furrow, contacted the governor’s chief of staff, Mark Cate….Jubran, who has been involved in business dealings with the governor in the past, urged in his email that the deal be closed by the end of the year. Though the effort ultimately failed because promised repairs had yet to be completed by Dec. 31, 2011, Jubran’s email set off a chain of emails involving high-level Haslam administration executives that outline their efforts to make the deal a priority.

Bill Would Require Splitting Proceeds from ‘Policing for Profit’

Tennessee lawmakers are gearing up for what could be an intense debate about police tactics, reports WTVF, which has been doing stories what is labeled “policing for profit” — or how some Tennessee police agencies routinely target out-of-state drivers for traffic stops, looking for large sums of cash that their agencies can keep on the suspicion that it’s drug money.
“The intent of the bill (HB2334) is to make sure that all of those funds stay within law enforcement, just not specifically with the specific drug task force that is out seizing those funds,” said Rep. Vance Dennis, R-Savannah.
When Dennis comes to Nashville, he travels through the 50-mile stretch of I-40 highlighted in our NewsChannel 5 investigation.
At least three drug interdiction units work that area, but our investigation found nine out of 10 stops occurring in the westbound lanes — that’s what agents call “the money side.”
“If they are concentrating solely on cash going one way, then they are abandoning the search for illegal substances coming in — and those substances do a great deal of damage to the citizens and children of our state,” Dennis said.
Under legislation he filed, agents could still seize cash that they believe to be illegal drug money. But that cash would no longer go straight back to the agency that seized it. Instead, it would go into a general fund for law enforcement. The state would then hand out grants to police agencies based on their needs
.