Mississippi Prison Industries loses $3.2M, fires CEO

Mississippi Prison Industries has lost $3.2 million over the past two years, and a legislative watchdog found a lack of receipts and financial controls.

The nonprofit’s board on Wednesday fired Brad Curtis as CEO, marking the second termination of its leader over the past several years. Jeff Solari is now serving in his place.

Bob Baughn, who serves on the 13-member board, said the only reason the board fired Curtis was that they “just lost confidence in his leadership.”

A review by, the state's legislative watchdog, the Performance Evaluation and Expenditure Review Committee, found that “many invoices from vendors … were not located in the office.”

And in a sample of travel expenses, the agency “discovered instances where receipts were not attached to the expense reports to substantiate the travel expenditure or the business purpose.”

Baughn knew nothing about any of this, he said. “We’re totally in the dark.”

He said an audit of the nonprofit just took place. “They said we’re fine,” he said. “They’ve given us a clean bill of health.”

More: Watchdog group finds errors with work on Mississippi prison food service

Rep. Jerry Turner, who chairs the House Committee on Accountability, Efficiency and Transparency, said despite Mississippi Prison Industries qualifying as a nonprofit, there is no question it enjoys support from taxpayers.

The nonprofit benefits from the almost free labor from the state inmates, he said.

In addition, the nonprofit receives a state grant of more than $250,000, sometimes exceeding $400,000.

Turner wonders where the taxpayer money ends and nonprofit funding begins. “It’s hard to follow the money,” he said.

In fiscal 2017, the nonprofit did see a bump in sales, rising from $6.2 million to more than $10.6 million, largely from a contract with Vero Blue, which builds fish tanks.

Baughn said this business was “keeping us afloat," but is no longer in place. “Hopefully we’ll get the fish back, but we have a couple of other big things lined up that have not been finalized yet,” he said. “That will help a whole lot.”

If those businesses pan out, "we'll be back on good footing financially," he said. "That's one reason we changed leadership — to go a different direction."

In 1990, the state Legislature created the nonprofit, aimed at helping inmates transition from prison to the outside world.

Inmates may be able to learn skills involved in sewing, printing, metal fabrication and recycling. There is also a Johnson & Johnson pharmaceutical "clean room."

But unlike the Louisiana State Penitentiary in Angola, inmates don’t receive certification, Turner said.

The Republican from Baldwyn said he has been unhappy with the nonprofit because, despite repeated urgings from lawmakers, it has failed to collaborate with community colleges.

When he toured the nonprofit’s facilities, several inmates shared what sounded like rehearsed lines, he said.

As far as he has seen, he said, “it seems to me they’ve just been more interested in being a money machine than in rehabilitating prisoners.”

Prison Industries officials have long touted the nonprofit as a way to reduce recidivism among inmates, but they have puzzlingly failed to track these numbers on a consistent basis.

In their latest presentation to lawmakers, they cited a statistic from several years ago — a 20-percent recidivism rate (well below the state's rate then of 38 percent).

Meanwhile, critics are challenging benefits.

“As a small business owner who has lost business to Mississippi Prison Industries Corp., I do not believe they should exist,” said Rankin County businessman David Stephens. “History has shown that paying prisoners 25 cents per hour to produce a product, which allows the ‘boss’ to make $100,000 a year, is not the answer. Using prison labor to compete with private industry is unfair to Mississippi businesses, Mississippi taxpayers and even to the inmate.”

The nonprofit trains about 600 inmates at a time.

Tax returns for the nonprofit raise questions about its handling of money.

In its 2015 return, the nonprofit listed travel expenses of $242,742 — nearly twice as much as any other year.

That same year, the nonprofit, which had come under attack from some lawmakers and others, spent more than $537,000 on lobbying the state Legislature.

“Why are they spending high dollars for a lobbying firm like Butler Snow?” Turner asked. “It’s just ridiculous.”

At one point, officials from the nonprofit planned to buy property in Tupelo for a second place for inmates to work, he said. “They had not carried this before the board. The governor knew nothing about it.”

He said he attended a public meeting where the plans were discussed, asking nonprofit officials if any inmates were in line for certification in their areas of training.

“No, not at this point,” he quoted the officials as replying.

He asked if the nonprofit was bringing in merchandise and simply repackaging it.

The response he said he received: “We don’t really know.”

Baughn told the Clarion Ledger that certification in training would be something that the state Department of Corrections would handle. "We give (inmates) the skills," he said. "We're a quasi-state agency."

A new PEER report on the nonprofit is expected this spring.

“It’s not finished yet,” said Executive Director James Barber. “It will be presented in April to the PEER Committee.”

For years, the nonprofit has provided uniforms and socks to inmates, and the state has paid the nonprofit for that service.

Continued losses led the nonprofit to see its cash shrink from nearly $2.8 million in fiscal 2016 to less than $600,000 a year later. The net position has shrunk from more than $5 million to less than $3.3 million.

The PEER review raises questions about the nonprofit’s survival, saying it must rely on continued growth and diversification “to sustain growth in a fragile economy, faced with state government spending cuts.”