Legislator's audits of 9 contracts find all 'had numbers fudged'
"All 9 contracts that I had audited had the numbers fudged,'' declared Rep. David Richardson, D-Miami Beach, on Wednesday as he wrapped up a 10-minute speech moments before the House voted 89-26 for its draft of the budget.
The retired forensic auditor urged his House colleagues to require more accountability over the private prison contracts as he detailed the abuses he found, offering a level of scrutiny not often seen on the floor of a legislative chamber.
For the last two years, Richardson has been on a one-man crusade to inspect the state's trouble prison system. He described how the state's seven private prison contracts get an audit when they come to an end but "they never have an end" because they have been routinely renewed without going out for bid. He spoke about how he has audited several contracts, made 90 prison visits, met 300 inmates and devoted 700 hours to his probe.
"My audits have shown that the money is not being spent the way we we think we're spending it,'' he said.
His review of the massive prison agency comes in the same year House Speaker Richard Corcoran, R-Land O'Lakes, and his deputies have made a point of calling out "corporate welfare" and questionable contracts at two much smaller state agencies, Enterprise Florida and Visit Florida.
But on Wednesday Richardson was greeted by polite stares from Republican leaders -- and no reaction.
"What I would like to see is some provisional language in this budget that would allow more safeguards and more oversight because what I have found is that we have a lot of spending going on but we have very little oversight,'' the Democrat said. "Many of you may not know this, but in the entirety of the life of private prisons there has never been one financial audit of a private prison operator. Not one."
He said he just completed an audit of six contracts with two private non-profit vendors hired to provide prison work release programming. He said that in 2012, Gov. Rick Scott recommended privatizing the facilities and suggested that it would save the state $460,000 over nine months.
By 2014, the Florida Department of Corrections did privatize the contracts and, documents show, they promised $550,000 a year in savings. But a review of all contracts led Richardson to a different conclusion:
"We are not saving a dime,'' he said. Instead, the agency engaged in a "shell game that perpetrated this little trick."
When an inmate goes out to work in a job outside of prison, the work release facility keeps 55 percent of the net earnings to recover the cost of room and board, and the inmate keeps the rest, Richardson explained. But, during the recession, the Florida Legislature swept the revenue from the Department of Corrections' work release programs and used it to fund other agencies and projects in general revenue.
Florida's general revenue grew, but the state's deficit-ridden Department of Corrections fell further into the red. Then the equation changed when the governor and Legislature decided to privatize the six work release facilities.
"They gave away the general revenue,'' Richardson said. "The six facilities were bringing in $2.1 million into the state coffers every year -- our share of the 55 percent of net income,'' he explained, but the contracts the vendors signed with the state allowed them to keep the money.
"How could so many people knowledgeable about these contracts not see that?" he asked. "So rather than saving $550,000...we are losing over $1 million to the State of Florida. And it's a nice little shell game that got played because people didn't talk about that little bucket of money."
"Friends,'' Richardson pleaded. "We have got to take a serious look into these contracts. I have now audited 9 contracts...and all 9 contracts that I had audited had the numbers fudged to justify privatization. And it's time for this body and this Legislature to take a serious look at how we are spending the taxpayers' money."
In a oblique reference to the powerful special interests that hire lobbyists, he added: "The taxpayers back home don't have a lobbyist here.
"But wait! They do,'' he said facetiously. "It's you and it's me. You see we got sent here to be the lobbyist for the taxpayer, to make sure that their dollars were spent wisely and so we need to do our job as legislators and hold everybody accountable so that every dollar is accounted for."
He concluded by asking for more language in the budget that "will hold these facilities more accountable and for us to be responsible for our taxpayers back home."