[Congressional Record (Bound Edition), Volume 149 (2003), Part 9]
[House]
[Pages 12274-12279]
[From the U.S. Government Publishing Office, www.gpo.gov]




               THE FACTS ABOUT FEDERAL PRISON INDUSTRIES

  The SPEAKER pro tempore (Mr. Cole). Under the Speaker's announced 
policy of January 7, 2003, the gentleman from Michigan (Mr. Hoekstra) 
is recognized for 60 minutes.
  Mr. HOEKSTRA. Mr. Speaker, tonight I want to spend a few minutes 
talking about one of the fastest growing companies in America today. It 
pays its workers somewhere between 23 cents an hour and $1.15 an hour. 
It has a wide array of products. It pays no Federal taxes, it pays no 
State or local taxes. As I said, it is one of the fastest growing 
companies in America today.
  There are a number of reasons why this company is growing so fast. It 
has a lock on one of the largest customers in America. That customer 
cannot buy products or services from anybody else, unless that company 
provides that customer a waiver saying, all right, we are permitting 
you to go and purchase product from a competitive source.
  It is a company that, on bid day, where companies X, Y and Z have 
submitted their bids, this company can say at the bid opening, X, Y and 
Z, please provide me with all of your bid documents, and this fourth 
company can come back and say, you know, I will get back to you in a 
week or so to see whether I can match those bids. I will submit my bid 
in a week, now that I know what these other three companies have bid, 
and I will see if I can match their price. By the way, if I can match 
their price, the bid is mine, regardless of whether the customer 
believes the quality meets the standard that the customer has set, 
whether the delivery schedule meets the standard that the customer has 
set, and now we know that they can match on price.
  So you have a couple of questions. Who is this fast growing company? 
My colleagues are probably saying, that sounds like a company I would 
like to buy stock in. The economy is slow, not as healthy as what we 
would like it to be. Who is this fast growing company, and what 
customer do they have a lock on? That is a very strange procedure by 
which to purchase a product or a service.
  Well, let me tell you that the company that is the fast growing 
company is called Federal Prison Industries. The customer is the 
American taxpayer as represented by the Federal Government. The company 
is called Federal Prison Industries. Its other name is UNICOR, and this 
is UNICOR's annual report for 2002, which was just released.
  Let me give you some of the highlights of their annual report. Like 
many annual reports, they give you a history of the company. This 
company was formed in the 1930s. The competition was described as 
``will reduce to a minimum competition with private industry or free 
labor.''
  So in the 1930s, when the Federal Government said we need to have 
prisoners working, we need to have them employed, as the Federal 
Government established Federal Prison Industries, as they established 
UNICOR, they said we need to make sure that we keep Federal prisoners, 
people who have broken the law, that we keep them busy and we keep them 
occupied in such a way that there is minimum competition with private 
industry or private labor. It is a great goal; it is a great objective. 
That is the mandate of Federal Prison Industries.
  Too bad, 70 years later this company has forgotten its roots. This 
goes through this administration, it goes through the Justice 
Department. Under this administration, Federal Prison Industries has 
become a growth industry.
  Net sales increased last year from $583 million to $678 million. 
Imagine that you had constituents in your hometown who worked in the 
office furniture industry, who worked in the textile industry, who made 
automotive components, who made a whole series or range of products. 
Many of these industries are hurting.
  I have visited cut-and-sew textile factories in the southern part of 
this country. I have visited them in Pennsylvania, I have visited them 
in New York City, I have visited them in the Northeast. Cut-and-sew 
operations in America are a tough business.
  For Federal Prison Industries it is a growth business, such a growth 
business that a little less than a year ago, Hathaway Shirts in Maine 
had to shut their doors after a major shirt order went to Federal 
Prison Industries and did not go to private competition, to the private 
sector.
  Those individuals who represent the folks of Maine, who represent the 
workers at Hathaway Shirts, now have to go back to those workers, to 
that company, to that community, and say, what? Your job is gone. Not 
only is your job gone, your business is gone, the doors are padlocked. 
But we have kept Federal prison inmates busy. We have lost your jobs, 
but we have created new jobs in our Federal Prison Industries.
  Some may say this is what it means to create high-quality, high-
paying jobs in America. But for these 21,779 workers it means being 
paid at a rate of 23 cents to $1.15 an hour. Not a bad deal. Not a bad 
deal for the Federal prisons, but a terrible deal for the workers at 
Hathaway Shirts; a terrible deal for that community in Maine that now 
has a factory whose doors have been padlocked, that has lost revenue in 
the tax base.
  There is something wrong with this picture when the administration 
decides that creating jobs in Federal prisons is more important than 
keeping employers employing people in the private sector. But like I 
said, at least the folks in this Justice Department have defined 
Federal Prison Industries as a growth industry in America and an 
industry that they have grown by 16 percent over the last year, and 
where, in some cases, they have put in place plans to grow certain 
market segments by up to 50 percent in 2003.
  Where are these factories? Are there just a few factories? No, there 
are a lot of factories around, and they may be in your community, and 
they may be in your backyard.
  There are 111 factories in 71 different locations: Alderson, West 
Virginia; Atlanta, Georgia; Beaumont, Texas; Buckner, North Carolina; 
Dublin, California; Edgefield, South Carolina; Fort Dix, New Jersey; 
Greenville, Illinois; Jessop, Georgia; Leavenworth, Kansas; Lee, 
Virginia; Manchester, Kentucky; Miami, Florida; Oakdale, Louisiana; 
Pollock, Louisiana; Raybrook, New York; Saford, Arizona.

[[Page 12275]]



                              {time}  2145

  Also in Sandstone, New Mexico; Seagoville, Texas; Terre Haute, 
Indiana; Tucson, Arizona; Yazoo City, Mississippi.
  By the way, those are the factories that just manufacture clothing 
and textiles. Who makes electronics? Beaumont, Texas; Big Spring, 
Texas; Danbury, Connecticut; Fairton, New Jersey; Lexington, Kentucky; 
Lompoc, California; Loretto, Pennsylvania; Marion, Illinois; Memphis, 
Tennessee; Otisville, New York; Oxford, Wisconsin; Petersburg, 
Virginia; Phoenix, Arizona; Rochester, Minnesota.
  Those are the communities that have Federal prisons, Federal prison 
factories that pay no taxes. They also have factories that do fleet 
management, vehicular components, graphics, industrial products, office 
furniture.
  This has impacted my district significantly, the office furniture 
industry. This is an area that the Justice Department has said, office 
furniture, that looks like a growth market to us. So last year they 
grew office furniture from a business of $74 million to $117 million, a 
24 percent growth rate.
  I know a little bit about the office furniture industry. I used to 
work in the office furniture industry. If we take a look at this, we 
would say, wow, this is an exciting industry to be in, a 24 percent 
growth rate. The problem is, that is a 24 percent growth rate for 
Federal Prison Industries.
  Is that not what is happening in the industry as a whole? Has the 
industry not grown by 24 percent? Office furniture, that used to be a 
great industry; or that is a great industry. The answer is, no, it has 
been a miserable industry over the last couple of years. The companies 
are good and the people working in the office furniture industry are 
many of my friends. That is one of the biggest employers in west 
Michigan.
  What has happened to this industry? As Federal Prison Industries, as 
this administration, as this Justice Department has grown, Federal 
Prison Industries at a rate of 24 percent, the industry has decreased 
by 40 percent. The office furniture industry in America today, whether 
it is in western Michigan, whether it is in Iowa, whether it is in 
Pennsylvania, or whether it is in factories down south, is in a 
recession. Some would say it is more close to a depression. The overall 
industry volume has declined by 40 percent.
  But this Justice Department says, we do not care about what is 
happening in the real world. We do not care that in this industry in a 
small part of west Michigan we have laid off somewhere in the 
neighborhood of 13,000 to 15,000 to maybe 17,000 workers, when we 
consider the companies themselves as well as their suppliers. We do not 
care that we have to lay off workers. This is a growth industry for us, 
and we are going to keep growing it.
  As a matter of fact, if we take a look at the documents that Federal 
Prison Industries has put out themselves, they are prepared to grow 
office furniture by another 50 percent in 2003, in a year when the 
Office Furniture Association predicts that the industry may decline by 
another 3 to 5 percent.
  So while this Justice Department continues on its growth path and 
says, in the Justice Department we believe in creating high-quality, 
high-paying jobs, we are going to create more of those 23-cent-an-hour 
jobs, we are going to create more of those 40-cent-an-hour jobs, we are 
going to build more of those factories that pay no Federal taxes, that 
pay no local taxes, and pay no State taxes. Because we think that that 
is good for America's economy. We think that is good for the State of 
Michigan, we think that is good for the State of Iowa, we think that is 
good for the State of Pennsylvania, and we think that is good for the 
State of Alabama. Let us get those folks working, and if it costs 
another 2,000 jobs in the private sector, so be it.
  Shame on this Justice Department for taking this kind of strategy and 
taking an industry that has contracted by 40 percent and saying, you 
are still our target market. We are going to get as much of this 
business as we can as quickly as we can, and we are not going to adjust 
our business strategy one iota because of what is happening in the real 
world.
  This Justice Department has forgotten the original mission of Federal 
Prison Industries, the one that said, we will have a minimal impact on 
the market or free labor. This Justice Department has said, we are 
going to have a major impact. We are willing to grow our business by 
$43 million and grow it by 24 percent as the industry is decreasing. 
And as a matter of fact, we are prepared to grow it another 50 percent 
this year, even as the industry continues to contract.
  So as Federal prison factories in Allenwood, Pennsylvania; in 
Ashland, Kentucky; in Beckley, West Virginia; in Coleman, Florida; in 
Dublin, California; in Florence, Colorado; in Forrest City, Arkansas; 
Lompoc, California; Marianna, Florida; McKees Rocks, Pennsylvania; 
Milan, Michigan; Morgantown, West Virginia; Schuylkill, Pennsylvania; 
Sheridan, Oregon; Taft, California; Tallahassee, Florida; Texarkana, 
Texas; as these factories continue producing office furniture, as they 
continue growing and perhaps building new factories, factories in west 
Michigan will join the same picture of Hathaway Shirts in Maine.
  What do I mean? Their doors will be shut, their workers will be laid 
off, and the workers will wonder, why is it that, as a taxpayer, my 
Federal government is taking my job from me? Why is it that I do not 
even have the opportunity to compete for that business?
  What do I mean? When Hathaway Shirts and others in the shirt 
business, the cut-and-sew business, wanted to make shirts for the 
Federal Government, primarily for the military, they could not compete 
for the business. If the Pentagon walked in and said, we need 150,000 
dress shirts for the Air Force, Federal Prison Industries could just 
say, we will take that order, which is exactly what they did.
  Even though Hathaway and other shirt companies might have been able 
to produce a better quality product at a lower price at a better 
delivery schedule, those workers never had a chance to save their jobs 
because Federal Prison Industries or Unicore has what is called 
mandatory sourcing: If we make it, you, the Federal Government, must 
buy it, even though there is a high probability that you can get a 
better quality product at a lower price quicker through the private 
sector.
  The same thing happens in the office furniture industry. The same 
thing happens in the automotive businesses. That when those workers 
say, at least give us a chance to compete so we can keep our jobs, 
Federal Prison Industries say, sorry, that is not how it works.
  As a matter of fact, it has gotten so ugly that now as Federal Prison 
Industries and their board has tried some reforms, a step toward reform 
actually has taken a back seat. Federal Prison Industries, the board 
said, hey, we are going to allow Federal customers to choose best value 
or to take an alternative product if Federal Prison Industries cannot 
meet the price.
  But I will give credit to Federal Prison Industries. They thought 
through that, so they have implemented a new rule. It says, when the 
military now wants to buy those shirts or wants to buy that office 
furniture, they will let the private sector bid. They will have the 
formal bid opening and say, Hathaway, you have won the bid. But Federal 
Prison Industries will say, whoa, wait a minute, we have not bid yet.
  In any other case, if a company has missed the bid deadline, they are 
out of the drawing. Hathaway, you got the bid, congratulations. But, 
no, this is Federal Prison Industries. This is the Federal Government. 
It works a little differently here because now when Hathaway wins the 
bid, it is kind of like, whoa, hold up. That is only the first round. 
The second round is, Hathaway, give us your bid documents. That means, 
Hathaway, give the bid documents to Federal Prison Industries.
  Or XYZ furniture company, you have won the bid. But you have not 
really won. You have won the first round. So give your bid documents, 
the winning documents, give them to Federal Prison Industries; and we 
will submit our bid in a week or two. Now that we

[[Page 12276]]

know what you have bid, we will decide whether we are going to match 
your price. By the way, if we match your price, we win the bid. No one 
else can say, well, it is not a comparable product, the delivery is not 
as good, the quality is not as good. If we match the price, we win.
  What a deal. What a deal for Federal Prison Industries. They just 
pulled this new practice out of the hat in the last couple of weeks and 
have now started implementing it.
  We have talked about issuing reform. As we are talking about this, 
this is not just the gentleman from Michigan (Mr. Hoekstra) that 
believes that reform means needs to take place. We have been working at 
this reform for the last 5 years saying this process, and actually I 
think it is appropriate to describe it as criminal, this process that 
is going on is criminal, and that is a good word to relate to Federal 
Prison Industries.
  But my lead cosponsor on the Democratic side of the aisle is the 
gentleman from Massachusetts (Mr. Frank). The gentleman from Georgia 
(Mr. Collins), my colleague on the Republican side of the aisle, is 
another cosponsor. The gentlewoman from New York (Mrs. Maloney), from 
the Democratic side of the aisle, is another cosponsor to reform this 
process.
  All we are saying is, let those workers in the apparel industry, in 
the automotive industry, in the furniture industry, just let those 
workers have the opportunity to compete for the business and compete to 
be able to keep their jobs. That is all we are asking. We are not 
saying take the products out, we are just asking to be able to provide 
our workers with a fair chance.
  We are asking because this Justice Department is not adhering to the 
original mandate of Federal Prison Industries. They are having a 
maximum impact on the private sector in free labor. They are going 
after industries that are down and they are kicking them again and 
again and again and not giving them a single break. It needs to change.
  I have talked about Federal Prison Industries. I have talked about 
the 111 factories that they currently have in place. In Maine, as they 
are closing cut-and-sew operations, textile operations around the 
country, as they are laying off office furniture workers, as they are 
shutting some plants and as some plants are going up for sale, what is 
happening with Federal Prison Industries? They are projecting that they 
are going to build another 17 new facilities.
  How many Members tonight would not be excited if a new company was 
going to open up in their community and employ maybe another 500, maybe 
another 1,000 workers in one of our communities? It may happen. The 
only problem is, it is going to be a Federal Prison Industries plant 
that our workers will not be able to compete for. As a matter of fact, 
it may put our workers out of jobs. That new factory may cause us to 
shutter another factory, a factory that had 500 to 1,000 workers, paid 
local property taxes, paid people a living wage, provided people with 
health care, donated to charities in the community, was a good public 
citizen. That factory may now be shuttered. The jobs are gone. The 
workers are standing in the unemployment line.
  Now we will have this brand new factory there called Federal Prison 
Industries. That will be paying workers 23 cents to $1.15 an hour.

                              {time}  2200

  The factory will not pay any property taxes to support your local 
schools, to support your local business infrastructure. It will not pay 
any State taxes. The workers will not pay any Social Security. The 
workers are not even covered by OSHA.
  It is really interesting, as we in this Chamber sometimes debate 
prison labor, we have not had the debate on this floor about prison 
labor in the United States. We will condemn the Chinese and the unfair 
competition that the Chinese wage against American workers; but as we 
have had that debate, perhaps little did we know about the unfair 
competition of prisoners in American prisons and the competition that 
they are providing and the real impact that they are having on American 
workers today.
  The legacy of this Justice Department is putting more Americans out 
of work, building new prison factories, shuttering private factories 
around the country, weakening the tax base of communities around the 
country and building its own business. The office furniture industry, 
the textile industry, automotive components. We have all of these 
industries. They are competing in a tough global market. They are 
competing against imports from China, from Japan, from Korea each and 
every day; and now we are finding out that when it comes to selling to 
the American Government, to the Federal Government, they cannot even 
compete for the business. We have guaranteed the business to plants 
that pay their workers 23 cents an hour, that do not have to abide by 
OSHA, and do not have to pay any taxes. That is the legacy of this 
Justice Department.
  It is unfair and it is inappropriate. We have talked about the 
bipartisan coalition of House Members that support reform. Bipartisan, 
I guess, is the appropriate word, because when we take a look at who 
else supports reform, you might say, well, of course, it would be the 
Chamber of Commerce; of course it will be the National Federation of 
Independent Businesses; but of course it is also the AFL-CIO; of course 
it is the Teamsters; of course it is organized labor around America 
because we are putting small businesses out of business. We are 
unemploying organized and unorganized workers. We are all in this 
together and we are going to change it, but we are going to change it 
in spite of this Justice Department, not because of it.
  This Justice Department is providing no assistance at all. Matter of 
fact, every time we come up with a reform that we try to move 
administratively, and this Justice Department could fix it overnight by 
just saying we are going to provide a blanket waiver and we are going 
to allow American workers to compete, it could be done 
administratively, but every time we take one small step in that 
direction, this Justice Department comes back and pushes back to make 
sure that they preserve their monopoly and they continue their 
progression of growth.
  What do I mean by growth? I have talked about it a little bit 
tonight. Last year, clothing and textiles did not have a very good 
year. They only grew by 1 percent. Electronics. Federal Prison 
Industries' electronics. They make electronic stuff for our military. 
That grew by 14 percent.
  Now, I think this Justice Department, for some reason, really has it 
in for Michigan. We are a great tourism State, we are a great 
agricultural State, we are a great office furniture State, and we are a 
great automotive component State. But take a look at this: fleet 
management and vehicular components. In 2001, it was $31 million. Last 
year, they grew it to $99 million. Automotive components grew by 216 
percent. How many American workers do you believe are now unemployed 
because of the actions of Federal Prison Industries in the automotive 
components sector?
  They had a bad year in graphics; they had a bad year in industrial 
products. They both declined. Office furniture, another good year. 
Increase of 24 percent. Recycling. Now, there is something you might 
think would be really worthwhile, but they declined in recycling. In 
services, here now they are getting into the services business. This is 
the first entry that this Justice Department is saying, through some 
very loose interpretation, not only are we going to be able to go and 
sell and mandate to government; but we are now going into the private 
sector, and we are going to compete with private industry in the 
commercial market. Forty-one percent. This Justice Department is going 
to grow their Federal Government business, and they are going to grow 
and compete in the private sector. It is absolutely unbelievable the 
growth plan that Federal Prison Industries is under today. The overall 
net result is that last year Federal Prison Industries grew by 16 
percent.
  What else do we know about Federal Prison Industries as we go through

[[Page 12277]]

their annual report? Take a look at what they produce. Fleet 
management. Vehicular components. The business group. Rebuild and 
refurbish vehicle components. New vehicle retrofit services. Fleet 
management. Customized services and programs. Turn-key solutions. 
Clothing and textiles. Law enforcement, medical, military and 
institutional apparel. Mattresses, bedding, linens and towels. 
Embroidery, screen printing, custom-made draperies and curtains. 
Industrial products. Dorm and quarters furnishings. Industrial racking. 
Catwalks. Warehouse office shelving. Custom fabricated industrial 
products. Lockers and storage cabinets. Optical eye wear. Security 
fencing. Replacement filters.
  I wonder if we go back and take a look at each one of these how many 
of these industries were actually growth industries last year and then 
compare them to what happened at Federal Prison Industries. My guess is 
they probably grew at Federal Prison Industries and declined in the 
rest of the world.
  Graphics business group. Custom engraving and printing on awards, 
promotional gifts and license plates. Interior and exterior 
architectural safety and recreational signs. Printing and creative 
design services. Remanufacturing of toner cartridges. Office furniture 
group. Office furnishings and accessories. Seating products. Case 
goods. Training and table products. Office systems products. Filing and 
storage products. Packaged office solutions. A turnkey solution. 
Electronics business group. Exterior and interior task lighting 
systems. Wire harness assemblies and circuit boards. Electrical 
components and connectors. Electrical cables, both braided and cord 
assemblies.
  The one with office furniture is really kind of an interesting one. 
Not only are they growing that industry, but last year, if you go to 
their Web page, you will find that they signed a contract to assemble 
and to mandate that the U.S. Federal Government buy office furniture 
from a company where the components were built in Canada. Hey, now 
there is a goal for American workers. One of the major competitors to 
the office furniture industry in America have been companies from 
Canada because of the exchange rate. So what does the U.S. Federal 
Government do? What does this Justice Department do? It goes to a 
Canadian furniture company and says, hey, we are going to partner with 
you. You ship some of the components in, we will assemble it, and if we 
cannot fill the order, you just fill the order with finished products 
and we will mandate that the Federal Government, the U.S. Federal 
Government, buy Canadian office furniture.
  Wow, what a deal for the American taxpayer. What a deal for American 
workers. Think about it. As some of our furniture workers are laid off, 
some of them may have been called up for reserve duty or some of them 
may have had sons and daughters who went to the Middle East and fought 
in Iraq, and the thanks that they get from this Justice Department is 
that we are going to sign a contract with a company that did not even 
stand by America and we are going to ship your job to them.
  Shame on this Justice Department. Shame on this Justice Department 
for putting American workers in a position where they cannot even 
compete for their own jobs. Shame on this Justice Department for going 
out and signing contracts with Canadian companies that put American 
workers out of jobs. Shame on this Justice Department for forcing the 
American Federal Government to buy Canadian products. Think about it.
  I have talked about who supports our bill for reform. Who else is 
outraged? Democrats and Republicans. The chairman and the ranking 
member of the Committee on the Judiciary all support our reform 
efforts. The administration and the Justice Department are nowhere to 
be found. I am not sure where they are. We are waiting for an answer. I 
know where the Justice Department is. The Justice Department is bent on 
growing Federal Prison Industries, and they do not care about putting 
more American workers out of work.
  A bipartisan coalition, Republicans and Democrats, a bipartisan 
coalition of interest groups, business groups and labor groups, all of 
whom are outraged by what this Justice Department is doing. And you 
say, well, what about the folks who have to buy this stuff? What about 
the procurement managers? What about the people in the Federal 
Government agencies who see this process where they get a competitive 
bid and they say, you have won, and then Federal Prison Industries 
says, well, wait a minute, let us bid and we will get our bid back to 
you in a week.
  Well, does this procurement manager says, oh man, I have done 
business with you before; or is it like, yes, all right, UNICOR, 
Federal Prison Industries, I cannot wait to get your bid? What is it? 
Federal procurement managers and the Federal Procurement Managers 
Association, they support reform because they are looking at it and 
they are saying, oh no, here comes Federal Prison Industries. We have 
dealt with them before. When you have mandatory sourcing, when you 
mandate that you will buy it from us, we know exactly what we get. 
Because if they deliver a poor quality product at a high price and it 
takes us forever to get it, the next time we have to buy that product 
or service, guess what, we have to go back to them again and we cannot 
do anything about it.
  So the Federal Procurement Managers Association support our reform 
efforts. They come back to us and say you are asking us to do more with 
less; and then you tie our hands behind our back and say, by the way, 
you have to use Federal Prison Industries.

                              {time}  2215

  Not a bad deal for Federal Prison Industries. But it is a terrible 
deal for taxpayers and a terrible deal for those government workers who 
are trying to do the best they can, but we have limited their ability 
to make the kinds of decisions that they would like to make.
  What else do we know about Federal Prison Industries? I have 
mentioned this before. It is on page 24 of their annual report, taxes. 
As a wholly-owned corporation of the Federal Government, FPI, Federal 
Prison Industries, is exempt from Federal and State income taxes, gross 
receipt taxes and property taxes.
  The bottom line is, as we do tax reform, we would all like to get the 
kind of tax deal that Federal Prison Industries has which says we pay 
nothing. By the way, as we close factories in your community and those 
tax dollars are lost to the community, sorry, we are not going to add 
back into your tax coffers with our 111 factories or the 17 new ones we 
are going to build. That is just a loss for the community, and we are 
sure you will get over it.
  Some of you may have heard me talk about Federal Prison Industries 
before. You are saying why are you bringing it up now again? There are 
a couple of reasons, the first of which is we are hoping that very soon 
the House will consider H.R. 1829, a reform bill. What this reform bill 
says, as a procurement manager, you will have the opportunity to select 
the best price, the best value, the best-delivered product; and, 
UNICOR, you will have to compete for the business. You will have to 
compete against XYZ company if you expect to win.
  We have got a great coalition, over 100 cosponsors. I have outlined 
the different business and labor groups that support our efforts and 
the different Federal workers who support our efforts, and we are 
excited about the possibility and the probability of moving this bill.
  But the other reason that I am here tonight is just to one more time 
highlight the latest outrage by Federal Prison Industries. Federal 
Prison Industries, their board of directors on March 10 adopted a 
resolution that says FPI grants and waivers in all cases where the 
private sector provides a lower price for a comparable product that 
Federal Prison Industries does not meet. So it says, if XYZ company, if 
Hathaway Shirts, Herman Miller or any of the other companies provides a 
product at a price that Federal Prison

[[Page 12278]]

Industries cannot meet, the Federal procurement manager can go to one 
of these companies.
  Now we figured that Federal Prison Industries would try to subvert 
our activities in this reform. Never in our wildest dreams did we think 
that this Justice Department would let Federal Prison Industries go 
down the direction that they have gone. It is absolutely outrageous. 
What we saw, the first thing was this Justice Department said, well, we 
are going to let Federal Prison Industries make the determination as to 
whether the bids were of comparable quality, comparable price and 
comparable delivery. That is what we expected them to do, and we 
believed at that time that Federal Prison Industries would have 
subverted this attempt at reform by saying that may have been a lower 
bid, but it is not of comparable quality, and so we win. That is how it 
works today. That is what the ombudsman does today. If Federal Prison 
Industries needs the volume, they just make the determination and say, 
yes, it might have been an interesting bid, but, sorry, Federal Prison 
Industries wins the bid.
  Federal Prison Industries even got more creative. They said, we are 
going to wait for everybody else to bid, and when all of the other bids 
are in and the bids are opened and exposed to the public, we will then 
take those bids and we will prepare our own bid. Guess what? Federal 
Prison Industries never loses. They have come up with this in the last 
couple of weeks.
  Like I said, I have got to give them marks for their creativity, but 
the sad truth is it is one more case where this Justice Department is 
not interested in American workers. They are interested in one thing, 
to make sure that Federal Prison Industries never loses a bid, that it 
grows by 24 percent in office furniture, that it puts our textile 
business in the private sector out of business, that it grows 
automotive components by 216 percent. And that growth rate is going to 
continue in the future, and if we lay off another 25,000 people in the 
private sector, no big deal because we need to put prisoners to work. 
We are not going to put them to work in activities that do not compete 
with the private sector, we are going to put them and give them jobs in 
an area where there is a direct impact on American workers.
  Mr. Speaker, I have a company in my district recently that won a bid 
for $6 million. They were excited. The industry is down, the company is 
down, and the end result was, yes, we have won the bid. We are going to 
put some people back to work. Federal Prison Industries came back and 
said, you won the first round. We are now going to bid. They bid, and 
it looks like they are going to take the business.
  It is a big order, $6 million. They submitted the bid. The other 
companies submitted their bids. They had the bid openings. This company 
thought they won. It was like, yes, we needed that. We needed that shot 
in the arm to kind of give some encouragement to our workers and either 
keep some workers working and maybe call some back. Out of the blue 
comes Federal Prison Industries. They say, thanks, we would like copies 
of your bids. We demand access to the entire offer of the winning 
private firm, and the bid probably has substantial development and 
design work in it, so FPI now gets all of the benefit of getting this 
whole bid package and seeing how somebody else has laid it out, and so 
they steal the creative work, and I think that is an appropriate theme. 
They steal the creative work, they put together their own bid, and 
guess who is going to win the bid?
  I just wonder how many people who have worked in the private sector 
and have worked in the bidding process would like to compete in that 
type of process where you get to submit your bid, and a week or 2 weeks 
after everybody else has submitted theirs and every other bid has been 
opened and you have access not only to the bid number but to all of the 
documents used to prepare the bid, and we give that all to you and say, 
okay, now you prepare your bid. Who do you think is going to win? I 
know who is going to win. It is Federal Prison Industries.
  This is an insult to American taxpayers. It is an insult to American 
workers. Really, it is an insult to this Justice Department. They are 
better than that, or they should be. But to date they have not shown 
that to be the case.
  It is a growth industry. It is a growth industry that is directly 
impacting American workers each and every day. Ask the workers at the 
Hathaway Shirt Company. Excuse me, there are no workers at the Hathaway 
Shirt Company any more because their business is closed.
  There is still a textile business in the U.S. It so happens that the 
majority of the textile business is Federal Prison Industries. There 
are workers in Pennsylvania, there are workers in Maine, other parts of 
the Northeast, and workers in the South who would love to have the 
opportunity to compete for $159 million worth of business. There are 
workers in the automotive business who would love to compete for $99 
million worth of business. There are people in the electronics industry 
who would love to compete for $132 million worth of business. There are 
people in the office furniture industry who would love to compete for 
$217 million worth of business, but they cannot. As a result, American 
workers will continue losing their jobs through this administration, as 
Federal Prison Industries, through this Justice Department, continues 
an aggressive role of expansion.
  It is a sad day. American manufacturing is under assault from all 
corners of the globe, from Europe, Eastern Europe, the Caribbean when 
it comes to textiles, from Africa, manufacturing from Mexico, from 
Canada, from Japan, Korea, China. So manufacturing is under assault. 
Our services are under assault. But what happens? Not only are our 
workers competing against foreign competition, they are also competing 
against their own government. Their own government is consciously 
putting them out of work each and every day.
  This Justice Department is consciously, think about it, this Justice 
Department is consciously making the decision each and every day that 
says if we need to choose between a job in the private sector or a job 
in a prison, we are going with the worker in prison. We are going to 
create that 23-cent-an-hour position in a Federal prison even if it 
means eliminating a $10-15-an-hour job with full benefits in the 
private sector.
  That is the decision that this Justice Department is making each and 
every day. That is the decision that Ken Rocks, who is chairman of the 
UNICOR board of directors, is making every day, saying I am willing to 
put American workers out of work to create more jobs in Federal 
prisons.

                              {time}  2230

  I am willing to put enough workers in the private sector out of jobs 
so that I can fill 111 factories and so that I can create enough jobs 
so that I can build 17 new factories over the next few years.
  Shame on this Justice Department. And I am disappointed in Ken Rocks. 
He came in with so much hope, with a passion that says, we need to keep 
people working, because when we shutter a plant and the windows get 
broken, it takes hope out of the community. And the end result is that 
is exactly the process that Federal Prison Industries is going under 
under his watch, shuttering more doors, killing more jobs in the 
private sector.
  Ken, I am disappointed. I am disappointed in this Justice Department. 
I am disappointed in this FBI board. They have done absolutely nothing 
to help American workers when they need it most, when this economy is 
in recession, when our workers are under attack from all corners of the 
world, rather than this Justice Department backing off, rather than 
this UNICOR board under Ken Rocks backing off and giving some relief to 
American manufacturers, to American workers, this Justice Department is 
kicking American workers when they are down, kicking American workers 
when they are down, kicking their families when they are down. It is 
disappointing when American workers have to look over their shoulders 
to see whether the Justice Department has painted an X on

[[Page 12279]]

their job. Not because they have done anything wrong but because 
Federal Prison Industries and this Justice Department have decided that 
your job right there is the next job that is going to be eliminated. 
Actually it is not going to be eliminated. Your job right there is 
going to move from the private sector; it is going to move from an 
employer that has a plant that pays taxes, and you are going to move 
from being a taxpayer to being unemployed and we are going to take that 
job and we are going to move it into a prison. And there is nothing you 
can do about it. You cannot compete for that job, you cannot provide a 
better quality product at a better price at a better delivery. That job 
is gone. And there is nothing you can do about it.
  Mr. Speaker, this annual report from Federal Prison Industries says 
it all. It talks about the wages. It talks about the taxes. It talks 
about the growth. It talks about anticipated growth. It lays out the 
path that Federal Prison Industries under Ken Rocks that this Justice 
Department under John Ashcroft has set out, a growth industry in 
America. The sad story in America, in the American economy today, is 
that one of the fastest growing businesses in America, one of the 
fastest growing manufacturing and service industries in America today, 
you will not find traded on the NASDAQ, you will not find it traded on 
the New York Stock Exchange, you will not find it listed in NFIB as one 
of the fastest growing entrepreneurial companies in America or one of 
the fastest growing small businesses in America. The sad point is one 
of the fastest growing companies in America today is a company that 
pays 23 cents an hour, provides no benefits and pays no taxes and is 
run by the Federal Government and attacks American workers and their 
families each and every day.

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