Inside the secret industry of inmate-staffed call centers

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The U.S. government, through a 75-year-old program called Federal Prison Industries, makes about $750 million a year providing prison labor, federal records show. The great majority of those contracts are with other federal agencies for services as diverse as laundry, construction, data conversion and manufacture of emergency equipment.

But the program also markets itself to businesses under a different name, Unicor, providing commercial market and product-related services. Unicor made about $10 million from "other agencies and customers" in the first six months of fiscal year 2011 (the most recent period for which official figures are available), according to an msnbc.com analysis of its sales records.

The Justice Department and the U.S. Bureau of Prisons don't break down which companies they do business with. But Unicor said inmates provide private call center service, including data review and sales lead generation, for "some of the top companies in America" under a federal mandate to help companies repatriate jobs they have outsourced overseas.In a fact sheet, Unicor asserts that prisoners in the program are less likely to re-offend and are better trained for full-time work upon release. All revenue goes back into the program, which "operates at no cost to the taxpayer," it says.

The idea has filtered down to some of the states, among them Georgia, Arizona and New York.

When New York residents call the Department of Motor Vehicles, for example, they might get an inmate at Greene Correctional Institution in Coxsackie, near Albany, or at Bedford Hills Correctional Facility for Women near White Plains, on the border with Connecticut.

"Obviously, it saves taxpayer dollars," Brian Fischer, commissioner of the state Corrections and Community Supervision Department, told NBC station WNYT of Albany. "Number two, it provides what we call a transferable skill."

Besides saving the state money, said Elizabeth Glazer, the state's deputy secretary for public safety, the program is "an investment in our state's overall safety."

"When we help offenders build the workforce skills necessary to find viable employment after incarceration, we lessen the chances they will reoffend and end up back in the state's prison system," she said.

The corrections department acknowledged that callers aren't told they're talking to a state prisoner. But they stressed that callers are protected — no personal information is displayed to the prisoners, who don't have access to computers, officials said.

In the private sector, states usually partner with business-to-business firms to run the services — the companies provide the equipment and facilities, and the state provides the labor. One such firm is Televerde, a Phoenix company that partners with the Arizona prison system to provide marketing services for major companies that have included Hitachi and Microsoft.

In a marketing paper, Microsoft says companies like Televerde "can reduce the burden on corporate marketing and local marketing teams can have more meaningful interactions with their customers." (Msnbc.com is a joint venture of Microsoft and NBC News.)

For inmates, the appeal isn't the pay, which can be as low as 50 cents an hour. It's the training and the opportunity: "A lot of times, we need to feel like we are appreciated, and it builds self-esteem," John Howard of Brooklyn, N.Y., an inmate at Greene, told WNYT."It allows me the opportunity to speak to different people of different nationalities, regardless of what ethnicity, and it makes me feel like 'Wow, I can do better,'" he said.But Danny Donohue president of the New York Civil Service Employees Association, criticized the program for prioritizing marketable skills for prisoners over providing jobs to "law-abiding citizens."It's "a bad idea generally and even worse considering the current economy," Donohue said.