Meet the Florida think tank pushing for welfare restrictions in Kentucky Friday, May 6 2022 

During a legislative committee meeting in March, members of the Kentucky House of Representatives gathered to debate a controversial welfare reform bill that, just a couple of weeks later, would be signed into law.

Republican Rep. David Meade of District 80 read off a number of statistics related to House Bill 7, emphasizing claims that Kentucky Supplemental Nutrition Assistance Program recipients are misusing benefits (SNAP) and that many Medicaid recipients are actually ineligible. The goal of the bill, he said, is to eliminate fraud in the welfare system, reduce dependency on public assistance and get people back to work. 

But when asked where the data he had been reciting came from, Meade said the majority of it was provided by a 2016 University of Kentucky study as well as a third party group — the Foundation for Government Accountability.

The Foundation for Government Accountability (FGA) is a conservative think tank based in Naples, Florida that doesn’t disclose its donors and has a history of pushing what many experts have called “junk social science.” Its four main areas of focus are election integrity and welfare, health care and workforce reforms. 

“A national group and high-priced Kentucky lobbyists aggressively shopped a national agenda around slashing public benefits,” said Terry Brooks, executive director of Kentucky Youth Advocate and a critic of House Bill 7.

Kentucky is especially fertile ground for this kind of policy, but advocates say it’s part of a national trend of states attempting to restrict safety net features using a “one size fits all” model seen in legislation developed by groups who often have no stake in the community.  

When Meade acknowledged the fingerprints of a conservative Florida-based think tank upon public policy debate in Kentucky, the moment served to underscore the success that unified conservative messaging is having in altering the delivery of social services in America, one state at a time.

 And while there were significant changes in HB7 and compromises made by the time the bill was passed in April, advocates remain concerned that groups like this will continue to push back against the systems that are meant to protect the state’s most vulnerable citizens, children and families. 

“It really seems like we’re trying to punish people for being poor,” said Democratic Rep. Mary Lou Marzian of Louisville.

Who are they?

The FGA was founded in 2011 by Tarren Bragdon, who left his seat in the state legislature in Maine to pursue policy behind the scenes. 

With the help of its lobbying arm, the Opportunity Solutions Project, the FGA is more powerful today than ever. According to its 2021 annual report, the group had a hand in influencing over 500 reforms across the country. It is currently active in 32 states and through its policy work has gotten 9.5 million people off of public assistance in the last four years.

While the FGA and Opportunity Solutions Project have been outspoken and public about their policy goals, they are less transparent when it comes to their revenue. Registered as a tax-exempt political nonprofit under section 501(c)(4) of the Internal Revenue Code, the organization doesn’t have to disclose donors and is considered a “dark money” group. 

While the FGA did not respond to requests for an interview, its latest report shows it brought in $12.9 million last year, a 21% increase from the year prior. 

The FGA is also associated with several other conservative organizations, including the American Legislative Exchange Council and the States Policy Network, both of which are known for promoting Republican policy goals at the state level.

The Florida nonprofit has ramped up its presence in Kentucky in recent years, working to advance bills involving restrictions to unemployment, food assistance, cash assistance and health care. 

“Some sanctimonious outside group like the FGA wants to waltz in here with millionaire salaries and tell you that somehow they’re going to do it right,” said Rev. Kent Gilbert, chair of the Kentucky Council of Churches, who spoke in opposition of HB 7 and the FGA last month. 

The Opportunity Solutions Project compensated its Kentucky lobbyists $33,000 in 2021. The largest amount went to McCarthy Strategic Solutions, a government relations firm in Frankfort led by former Kentucky GOP chairman and highest paid lobbyist in the state, John McCarthy.

The Kentucky Legislative Ethics Commission currently lists 10 active lobbyists for the group, including Bryan Sunderland, who was deputy chief of staff to former Kentucky Gov. Matt Bevin and is currently serving as FGA’s state government affairs director.

Flawed data

The FGA has long argued that the longer a person receives direct support from the government, the more difficult it becomes for that person to leave dependency and reenter the workforce, producing plenty of infographics, polls and studies that seemingly back that claim.

But the organization has been accused of cherry picking its data, by both Democratic and Republican economists. 

The Center on Budget and Policy Priorities slammed the FGA in 2018 for a report that claimed the rollbacks of public benefits and work requirements in Kansas were helping families thrive, saying their analysis was “fundamentally flawed” and “highly exaggerated.”

And after circulating some polling numbers that suggested almost all Americans supported stricter working requirements, conservative economist Peter Germanis spoke up.

“Work requirements should be based on credible evidence and attention to policy details — the exact opposite of what FGA produces,” Germanis said in a Tweet. “Sad that so many politicians fall for their ‘junk science.’ ”

The same concerns can be applied to the data used in the Kentucky legislative debate that was influenced by the FGA. 

When concerns about the extent of the organization’s involvement in HB7 were brought to sponsor Meade, he said that FGA did provide some data but that most of it came from a study by the University of Kentucky. 

“The talking points about this national organization coming into Kentucky and writing our language is incorrect,” he said. “Most of this data comes from our own home state.”

But according to an analysis by Kentucky Youth Advocate (KYA), even that data wasn’t completely accurate. 

The UK study from 2016 estimated that 73,000 individuals were enrolled in Medicaid who were ineligible due to income. But those figures are based on the American Community Survey, which uses different factors to determine both income and household makeup than the Medicaid eligibility process. KYA’s analysis estimates that the number of ineligible people enrolled in Medicaid was actually less than 30,000.  

The Impact

While the FGA hasn’t had as much success in Kentucky as it has in some other states, it remains persistent. A version of HB7 was shut down by the legislature for three years in a row before it was passed this year, and advocates don’t anticipate the FGA will let up anytime soon.

“I don’t think they’re getting ready to tuck tail and run back to Florida,” Brooks said. “As we speak, they may be working in Frankfort right now. So I think we’ve got to buckle up and prepare.”

In the face of criticism, HB7 was scaled back significantly from its original version.  Penalties for fraud in the original version were reduced, reporting requirements were changed and a costly requirement to reroute cash-assistance programs through EBT cards was deleted.

While the FGA might have wanted more out of HB7, advocates and other legislators say the impact of the bill is still significant. 

“This bill creates barriers, and hurdles and trip wires and red tape for our neighbors who are trying to get food and medicine,” said Rep, Josie Raymond of Louisville. “It closes doors in the faces of the most vulnerable.”

Under the new law, the state will require SNAP recipients to report changes of income every quarter, rather than every six months, and will also implement work requirements for some Medicaid recipients. Both of these measures are similar to the language that is displayed on the FGA’s website. 

HB 7 also creates a three-strike ban that could ban people from accessing assistance for up to one year for making too many mistakes or selling benefits from their EBT card.

“The only way you will lose SNAP benefits is if you are breaking the law,” Meade said. “And the only way you lose Medicaid is if you are an able-bodied person at home with no dependents who is not willing to participate in the work requirements.”

But according to the Kentucky Center for Economic Policy, SNAP fraud is not all that common — making up less than 2% of cases. But many more people, they said, are suspected of trafficking their card based on mistakes that are easy to make while using it, such as entering the wrong pin number too many times, shopping at the same store more than once in a day or having a purchase ending in a whole-dollar amount.

The Kentucky Cabinet for Health and Family Services also testified that the legislation would add costly layers of administrative work for a staff that is already overloaded. 

For some, the passage of HB7 and the increase in the FGA’s influence over Kentucky legislation signifies a harsh reality.

“This bill reveals a bias against the poor,” Raymond said. “By requiring more paperwork and making people jump through more hoops, we’re bringing suspicion to every interaction with the state that could empower them, rather than humiliate them.”

The post Meet the Florida think tank pushing for welfare restrictions in Kentucky appeared first on Kentucky Center for Investigative Reporting.

FEMA denials frustrate Kentucky tornado survivors Thursday, Feb 10 2022 

Jonathan Shelton

Jonathan Shelton’s home the day after December’s deadly tornadoes in Bowling Green, Ky.

Jonathan Shelton went room to room through an old elementary school-turned-donation center and stacked socks, washcloths, bedding into a shopping cart — the ordinary things he lost when a tornado swept through his neighborhood in early December.

Shelton, 29, doesn’t really like asking for help, but he needed some.

He applied for aid from the Federal Emergency Management Agency, hoping for a check to cover a temporary place to stay, replace some lost items or repair his car. 

“Just anything helps, you know,” he said. “Especially when you lose everything.”

Shelton was surprised when the agency denied his request. He paid rent to a roommate, but his name wasn’t on the lease. To FEMA, that’s not a primary residence.

The federal agency’s mission is to aid people after disaster strikes by helping pay for temporary housing, repair damaged homes, or other critical needs like food, clothes or medicine.

Jacob Ryan

Donations are piled in a donation center at the old Cumberland Trace Elementary School in Bowling Green, Ky.

But fewer than 14% of the 11,800 Kentuckians who asked for FEMA’s help within six weeks of the storm were approved for aid, according to a KyCIR review of federal data.

More than 4,300 applicants were considered ineligible for housing assistance because they missed or couldn’t be contacted for an inspection, according to the agency’s data.

Nearly 200 were turned down because FEMA officials could not verify their identity, address or that they owned the damaged property.

FEMA denied nearly 2,000 applicants after their application was withdrawn or duplicated, the data show. They are not included in KyCIR’s analysis. 

Applicants have 60 days after a denial to appeal the decision. 

In an emailed statement, a FEMA spokesperson said the agency could not explain the assistance approval rate because every applicant has a unique case, with unique circumstances.

“Survivors have every right to appeal FEMA’s decision, in writing, if they disagree,” said Alberto A. Pillot, FEMA assistant external affairs officer.

Rejections common

The historic tornado tore 160 miles across Kentucky, killing 77 people and causing billions of dollars in damages.

Since then, FEMA has provided more than $12 million in aid through the Individuals and Households Program, which includes housing assistance and other critical needs.

But in Facebook support groups, donation centers, and firehouses in western Kentucky, the stories of FEMA are often about getting turned down.

It’s a common issue nationwide. FEMA’s assistance approval rates have dropped in recent years into the teens, down from more than 60% a decade ago, according to a report last year from The Washington Post.

A 2020 report from the U.S. Government Accountability Office highlighted several challenges to seeking FEMA aid, such as requiring some people to first apply for a loan with the Small Business Administration — a requirement FEMA didn’t fully explain. 

FEMA also has struggled to manage expectations, and needs to improve how it communicates with people seeking assistance, according to the report.

FEMA strives to help after a disaster, but they’re not the cavalry, said Simone Domingue, research fellow at the University of Oklahoma’s Southern Climate Impacts Planning Program.

“The unfortunate result is there are often some pretty critical gaps,” she said.

There are many reasons a person can be denied assistance, according to FEMA. Having insurance is a leading reason; the agency won’t pay for any damage covered by insurance. 

The application process is the byproduct of a government system under pressure to respond to more and more disasters, said David McEntire, professor in the emergency services department at Utah Valley University.

“There are often people who are frustrated with FEMA and the amount they get or the time it takes to get it,” he said. “But FEMA is in a precarious position because they need to verify everything, with speed, and those things clash.”

A quick denial can be enough to make someone throw up their hands and give up.

That’s what Shelton was prepared to do after seeing FEMA denied his request for assistance.

Jacob Ryan

Mari Taschner-Whitlow and her son, Jonathan Shelton, walk through a donation center in Bowling Green, Ky.

“It was, like, they’re not going to do anything, you know?” he said.

His mother, Mari Taschner-Whitlow, however, worked for years in insurance and she’d dealt with FEMA in the past. She figured she’d meet face-to-face with a FEMA representative, explain her son’s situation and resolve the issue.

She went to the local disaster recovery center in Bowling Green — a hollowed-out Sears at the nearby shopping mall — and tried to set the record straight.

She also got her son’s roommate to submit a statement that the damaged home was Shelton’s primary residence, Whitlow said, an option no one told her son about. She’s hopeful the denial will be reversed and he’ll be eligible for some type of assistance. 

But, three weeks later, they’ve yet to hear anything.

“FEMA came in and made it sound as though we’re saved. No, no,” she said. “I think most people have come to realize we’ve got to just rely on each other.”

‘FEMA cannot make you whole’

It didn’t take long for Patti Sawyer to see that the support from her community would outweigh the federal government’s.

She was hopeful after President Joe Biden came to Kentucky to tour the wreckage beside Gov. Andy Beshear.

“I thought it would be pretty obvious that someone would walk through the neighborhood and kind of be like, ‘You poor people, let us help you,’” she said.

And that’s largely what she heard, when Biden promised from amid the rubble in hard hit Dawson Springs that the federal government would be there to help.

“We’re going to get every single thing you need,” he said on December 15.

Sawyer’s home on a dead-end street in Bowling Green’s Whispering Hills subdivision sustained more than $60,000 in damage.

Jacob Ryan

Patti Sawyer stands in her living room next to windows that were broken when a tornado tore through her Bowling Green, Ky. neighborhood.

A few days after the storm, while staying at a friend’s house, she applied for FEMA aid and was rejected because she had insurance.

FEMA denied nearly 3,000 Kentuckians’ requests for aid because they had insurance coverage, according to KyCIR’s review of the agency’s data. 

Having insurance is not a guarantee a person will be denied FEMA aid, but Pillot, the FEMA spokesperson, said it’s only intended to meet “basic needs.”

“FEMA cannot make you whole,” he said.

Sawyer’s home is still standing, and for that she considers herself lucky. After she was denied, FEMA directed her to apply for a Small Business Administration loan, but she’s not looking to take on debt.

“I’m not expecting …to come out ahead in this,” she said. “But I’d like to come out where I left off, before this disaster hit.”

Now, she’s not too hopeful that will happen, and she’s learning to accept it.

“This is Kentucky,” she said. “We’re gonna dig in and we’re gonna rebuild. We’re gonna do what we need to to clean up. We’re going to help each other.” 

Contact reporter Jacob Ryan at jryan@kycir.org.

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No-bid tornado cleanup contract in Graves County sparks squabble Friday, Jan 7 2022 

The U.S. Army Corps of Engineers awarded a no-bid contract last month for debris cleanup in Graves County, prompting a battle in federal court.

A pair of disaster response firms have challenged the $23.7 million contract awarded to Texas-based DRC Emergency Services, claiming the U.S. Army Corps of Engineers violated federal purchasing rules and stifled competition by failing to solicit quotes from other companies.

The storm left extensive damage throughout western Kentucky and killed 77 people. The damage was especially severe in Graves County, where 23 people died and Mayfield, the county seat, suffered major infrastructure damage from a direct hit.

The facade of a tornado-gutted building stands against a deep blue sky

Stephanie Wolf

A building in downtown Mayfield, Kentucky that was damaged by a tornado.

Graves County is the only affected county where disaster recovery is being led by the U.S. Army Corps of Engineers; the other counties are leading their own cleanup efforts.

President Joe Biden approved a federal emergency declaration following the storm, which directs additional resources for response and can alleviate costs for state and local governments. FEMA has assigned $120 million for Graves County cleanup, where the storms left an estimated 2 million cubic yards of storm debris. 

The protests could bring the clean-up in Graves County to a temporary stop, if a federal judge grants requests for an injunction from Ceres Environmental Services and D&J Enterprises, which are protesting the award and asking that the contract be competitively bid. D&J Enterprises also asked the U.S. Government Accountability Office to recommend the corps rescind the contract and award the work to D&J — or at least review the Alabama-based company’s offer.

Both companies claim that the DRC contract followed an illegal, improper and unfair process that excluded capable contenders from the work, and ultimately will lead to higher prices, according to federal court filings.

Top executives with DRC Emergency Services and D&J Enterprises did not respond to requests for comment. Executives with Ceres Environmental Services declined to comment, citing the pending litigation before the U.S. Court of Federal Claims. 

Katelyn C. Newton, public affairs chief for the U.S. Army Corps of Engineers Louisville District, which issued the contract, said in an email that the no-bid contract was necessary “to address the urgent and compelling needs of the Graves County citizens.”

But attorneys for the opposing companies claim the corps of engineers had ample opportunity to solicit bids for the work, which is routine in the aftermath of disaster. 

A federal judge in Washington D.C. will hear the case via video conference next week.

In the meantime, the work continues. But John Sullivan, the president of DRC Emergency Services, warned in a statement filed with the court that any order for injunction or to bid the contract would lead to lengthy delays.

Graves County Judge Executive Jesse Perry and Mayfield Mayor Kathy Stewart O’Nan didn’t respond to requests for comment.

As of January 6, the corps reported just more than 2% of the some 2 million cubic yards of debris had been cleared from Graves County.

Feds say no-bid justified

The tornado front that swept through western Kentucky on Dec. 10 stretched from one side of Graves County to another — leaving behind some of the most intense destruction in the path of the 160-mile storm.

Debris clean-up crews were on the ground fast. By December 14, a Ceres Environmental employee surveyed the damage in western Kentucky and sent estimates via email to Bo Ansley, the chief of the corps’s emergency management branch.

In court filings, attorneys for Ceres Environmental Services say this is proof that the firm was ready to lead the cleanup effort. 

But the corps never asked the company to bid before awarding the contract to DRC on Dec. 20, the attorneys allege.

Attorneys for D&J Enterprises claim in a separate protest to the U.S. Government Accountability Office that the corps failed to provide notice of the job opportunity and “handed it to DRC.” This, they claim, is a violation of federal procurement codes.

But Borislav Kushnir, a US Department of Justice attorney representing the corps, said in response that the agency violated no rules, and was well within its right to award the no-bid contract to “avoid an even larger humanitarian disaster.” 

The agency considered competitive bidding, he said in the court documents, but ultimately decided it was “unworkable,” claiming the process could take up to six months to complete.

Newton, the corps’s spokesperson, said timelines can vary from project to project, but competitively bid contracts “generally take a significant amount of time to allow for the development of the requirement and solicitation, and the submission and evaluation of proposals.”

The corps had also already vetted DRC Emergency Services, Kushnir argued. It selected the firm last year for a regional debris management contract, which would designate DRC Emergency Services as the go-to firm for cleanup after disasters in a region that includes Kentucky. 

But that contract has been on hold, due to bid protests.

“While the general need for debris removal after natural disasters may be predictable, the Government did not foresee – nor could it foresee – that a devastating tornado would hit western Kentucky … while a larger procurement for debris removal was in the midst of litigation,” Kushnir said.

And Kyle Jefcoat, an attorney for DRC Emergency Services, argues there would be little question that the firm would be “performing this exact work” under the regional contract, if not for the protests.

Other firms are handling the clean-up work in neighboring counties. 

In Marshall County, officials approved a contract with Mississippi -based Looks Great Services of MS LLC on December 17 for debris removal. 

Jason F. Darnall, the Marshall County attorney, said the contract was competitively bid, and five firms submitted a proposal for the work.

In Marshall County, a robust network of first-responders and capable volunteers helped local officials triage the immediate needs after the storm and take the time to bid the project competitively, Darnall said. 

He wouldn’t speculate why the contract in Graves County wasn’t put up for bidding, but stressed that the extent of the damage between the two counties was vastly different. Marshall County’s damage was largely residential, while Graves County suffered a direct hit to downtown Mayfield. 

“They are in a completely different situation than we are,” Darnall said.

DRC’s history of allegations

Spats between the nation’s largest disaster response firms are a common occurrence after storms strike.

The Graves County contractor, DRC Emergency Services, has faced nearly a dozen different federal lawsuits  accusing it of underpaying workers or not paying subcontractors. 

The company was briefly suspended in 2014 from bidding on federal contracts after allegedly failing to ensure local subcontractors got their share of the clean-up work after the 2011 tornado disaster in Joplin, Missouri. They were reinstated after adopting additional oversight and transparency measures.

After hurricanes Irma and Maria devastated Puerto Rico in 2017, a subcontractor accused both DRC Emergency Services and Ceres Environmental Services of directing subcontractors to cut down healthy trees to boost payloads.

That suit was dismissed in April 2021.

Newton, the spokesperson for the U.S. Army Corps of Engineers, declined an interview for this story, citing the pending litigation. But she said DRC Emergency Services is not actively suspended or debarred, and the company is qualified for the contract work in western Kentucky.

Contact Jacob Ryan at jryan@kycir.org.

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A handful of companies dominate road work in Kentucky. The state looks the other way. Tuesday, Dec 21 2021 

 

Andrew McNeill went to the Kentucky legislature last month with a straightforward ask: scrutinize the state’s habit of awarding costly road construction contracts to the only firm that bid for the job.

McNeill, a deputy budget director under former Republican Gov. Matt Bevin, told the legislature’s interim joint committee on transportation that he analyzed the state’s data and found single-bid contracts, specifically, were driving up the cost of construction projects in Kentucky.

If the legislators ordered an audit they could get to the bottom of why, said McNeill, a fellow at the Bluegrass Institute for Public Policy Solutions. But the lawmakers didn’t bite.

They instead jumped to defend the contractors, criticize McNeill’s analysis of the state’s data and ultimately showed little interest in boosting oversight of a lucrative industry with a history of corruption allegations and shrinking competition.

State officials awarded nearly 2,300 road work contracts between 2018 and October 2021, according to a Kentucky Center for Investigative Reporting review of state data. A third of those were single-bid contracts, in which the company awarded the contract was the only bidder. (One month of 2019’s bidding data was missing from records provided by the state.)

Nearly 60% of single-bid contracts were awarded at costs above engineer estimates, totaling $9.6 million more than state projections, according to KyCIR’s review. 

In contrast, the projects in which multiple companies submitted a bid were awarded at, collectively, nearly $248 million below state estimates — a 7% savings.

The same day McNeill spoke to Kentucky lawmakers, President Joe Biden signed a historic infrastructure spending law, setting the stage for a significant boost in federal funds going towards Kentucky projects.

Some of that money will likely flow through the state’s transportation cabinet, which already manages a massive segment of the Kentucky economy. More than 1,300 active contracts across the state are worth $7.5 billion.

The transportation cabinet is exempt by law from following the state’s procurement code, instead following a bidding system experts say allows a handful of large companies to avoid serious competition for jobs.

As a result, more than $2 billion in current work is controlled by a dozen companies — who often are the sole bidder on the contracts they’re awarded. 

A spokesperson for the Kentucky Transportation Cabinet declined to make officials available for an interview. The cabinet has not yet responded to questions emailed by KyCIR.

Fewer bidders, higher costs

When it comes to road construction and maintenance, the Kentucky Transportation Cabinet has few safeguards to discourage awarding single-bid contracts. 

Most winning bids come in under the state’s engineers estimate, and competitive bids drive costs down further. But Kentucky’s rules don’t prevent the state from accepting a lone bid, regardless of the project’s size. 

That has led to higher costs for taxpayers: The KyCIR analysis found that more than half of the 782 single-bid contracts were awarded for a price above the state estimate, whereas 85% of multiple-bid contracts were below state estimates.

And a 2015 survey by the American Association of State Highway and Transportation Officials found that Kentucky had the third-highest percentage of single-bid contracts for asphalt work in the country. The survey also found that while construction costs were steady or dropping in a majority of states, prices were increasing in Kentucky by an average of 4% year over year.

Certain counties in central and eastern Kentucky are more likely to see single-bid contracts awarded to a handful of companies. Jefferson county and portions of Northern Kentucky, on the other hand, average three or more bidders.

In eight Eastern Kentucky counties stretching from Harrison County down to McCreary County on the state’s southern border, the Hinkle Contracting Company is the only contractor to be awarded a state contract this year.


Hinkle Contracting is owned by Summit Materials, a Denver construction conglomerate. Company executives did not respond to an interview request.

Hinkle obtained more single-bid contracts than any other road construction entity in the nearly three years of state data reviewed. The company was the sole bidder on 154 projects totaling more than $87 million — and nearly 60% of those contracts were awarded at a higher cost than state estimates. 

In recent years, labor shortages and consolidation in the industry has reduced the number of large contractors vying for government jobs, according to Roy Sturgill, an assistant professor of construction management at Iowa State University. 

“Contractors are smart, if they know their most recent competitor got bought by someone else, or they bought them, then they've reduced the pool of people that they're competing against,” said Sturgill, who worked as a transportation engineer for the Kentucky Transportation Cabinet for six years.

With fewer contractors in the market to compete, single bids will at times be inevitable, said Chad LaRue, executive director of the Kentucky Association of Highway Contractors.

And with the steep costs associated with entering the road paving market, any new competition is unlikely — unless it comes via consolidation or an out-of-state entity, he said.

“It’s very capital intensive,” LaRue said. “There is money to be made, but there is also risk.”

‘We don’t have bad contractors’

Asphalt contractors in Kentucky have been under scrutiny for decades.

Leonard Lawson, founder of Kentucky-based Mountain Enterprises, was indicted on antitrust charges in 2008 when federal prosecutors accused him of working with the Kentucky Transportation Cabinet to rig bids in favor of Mountain. A jury acquitted Lawson and his co-defendants — two state transportation cabinet officials, including the then-cabinet secretary, Bill Nighbert.

In 2017, West Virginia’s attorney general accused Mountain Enterprises, now under new ownership, of colluding to raise paving costs with other contractors.

The contractors had consolidated under the ownership of Oldcastle Inc., an Ireland-based corporation, and the contractors stopped bidding against each other. 

The attorney general said that constituted an illegal monopoly that drove up costs.

The case ended with the largest antitrust settlement in state history. The settlement did not require the companies to admit to any wrongdoing.

Companies tied to the Lawson family came under scrutiny once again in 2017 when federal investigators raided the offices of ATS Construction and subsidiaries, all owned by Leonard Lawson’s son, Steve Lawson. The Transportation Cabinet confirmed at the time that it was cooperating with a federal antitrust investigation related to road contracts. It is unclear what became of the investigation and the cabinet didn’t respond to a question about it.

At the legislative hearing last month, the legislators rallied to the industry’s defense.

“We don’t have bad contractors,” said Rep. Sal Santoro, a Republican from Union. “I think we have outstanding contractors.”

Santoro filed a bill last year that proposed, in part, to reject any single bid submitted that’s above the state’s official estimates, but the legislation failed to pass out of committee.

He said single-bid contracts are inevitable. But he believes the state is getting its money's worth in work.

That same year Santoro proposed the change, the state’s largest road contractors spent at least $102,000 employing some of the state’s most influential lobbyists. For example, Hinkle hired McCarthy Strategic Solutions, led by former Republican Party of Kentucky chair John McCarthy, for lobbying the legislative and executive branches.

Sen. Jimmy Higdon, a Republican from Lebanon and chair of the interim transportation committee, said outside pressure is ever present in politics, and he hears from lobbyists everyday.

“To say they control our decisions is not true,” he said. “But do they play a role? Sure.”

State campaign data show that road contractors also play a role in funding political campaigns.

In the past two decades, employees at a dozen of the state’s largest road construction companies contributed more than $1.1 million — the vast majority to gubernatorial and legislative elections, according to Kentucky Registry of Election Finance data.

No candidate received more from road contractor employees than former Republican Gov. Matt Bevin, who reported more than $105,000 in statewide elections.

Democratic Gov. Andy Beshear took more than $30,000 in campaign contributions from the state’s largest road contractors during his bids for state attorney general and governor.

A spokesperson for state auditor Mike Harmon — a Republican candidate for governor who has no record of donations from road construction employees— said he has no plans to pursue an audit of construction contracts without a directive from the legislature.

The legislators who shot down McNeill’s request for an audit last month have taken, collectively, more than $112,000 from road construction firms over their careers.

McNeill, himself a registered lobbyist representing the Bluegrass Institute for Public Policy Solutions, thinks politics have helped insulate the industry from scrutiny. 

“I've seen it done time and time again in Frankfort,” he said.

In an interview a few weeks after the meeting, Higdon, the chair of the committee, said “there’s not enough smoke here” to call for an audit of the state’s process for awarding single-bid contracts.

State transportation cabinet officials provided Higdon prior to the November meeting with data and a sheet of talking points  that aimed to defend the state’s bidding process. Higdon said some “give and take” is expected in road construction costs. 

“And it’s not particularly a problem,” he said.

Contact Jacob Ryan at jryan@kycir.org. Contact Jared Bennett at jbennett@kycir.org.

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Ky. Unemployment Office Is Waiving Overpayment Debts, But It’s Invite-Only Wednesday, Aug 25 2021 

Kentucky’s new unemployment insurance overpayment waiver is supposed to offer some relief to people who were mistakenly overpaid benefits, but many who owe money are excluded from even asking.

The state legislature first created the waiver program in March, after the Kentucky Center for Investigative Reporting detailed how people who applied for benefits in line with Gov. Andy Beshear’s public statements about eligibility later got debt collection notices.

Nearly a year after Beshear told people to save money from unemployment insurance benefits in case the state made a mistake and asked for that money back, the waiver offers debt forgiveness for people who were overpaid through no fault of their own — and for whom collection would be “unconscionable, unjust or unfair.”

In June, the unemployment office began mailing overpayment waiver applications to those who might be eligible for an overpayment waiver based on their records. Kentucky Labor Cabinet spokesperson Kevin Kinnaird said in an email the agency sent out just over 14,600 applications so far, allowing the chance of forgiveness for over $19.6 million in total overpayment debt.

But the office has limited who can ask for debt forgiveness to people the state has predetermined might be eligible — and those people have to request the waiver within 30 days of notification.

The unemployment office has so far approved debt relief to just over a third of those individuals who received letters. Kentucky-based attorneys and national advocates say this restrictive approach to overpayment waivers may leave people saddled with debt they shouldn’t have to pay.

No one from the Kentucky Office of Unemployment Insurance was available for an interview on the subject, according to Kinnaird. He said by email that the waivers amount to nearly $7.5 million in debt forgiven so far. People who were overpaid but didn’t get a waiver application have the right to file an appeal, Kinnaird said, but according to the unemployment office’s website, appeals must be filed within 15 days of the initial decision.

Few Options To Fight Overpayment Debt

Leonard Sanderson, a substitute teacher for Jefferson County Public Schools, hoped the new waiver would relieve him of nearly $1,000 in debt.

Sanderson received unemployment benefits from April through June last year when the coronavirus pandemic closed schools to in-person education, and ended the substitute teaching assignments Sanderson relied on.

The Kentucky unemployment office paid him, then determined retroactively he was ineligible for benefits once the regular school year ended. The unemployment office said substitute teachers weren’t supposed to file unemployment claims during summer break. Sanderson didn’t know that. 

Just a few months earlier, in March of 2020, Kentucky expanded unemployment insurance to cover independent contractors and substitute teachers. Sanderson normally picked up school assignments those months, and plus, the state already paid him. So when Sanderson heard about the new debt forgiveness waiver, he thought it would certainly apply to substitute teachers like himself.

Sanderson remembers watching a press briefing on TV as a representative from the state saying people would be receiving a form to fill out and apply for forgiveness.

“Well, I haven’t received that,” Sanderson said. “The only thing I’ve ever received was two collection letters.”

Sanderson filed suit against the unemployment office last December seeking a judge to reverse the unemployment insurance office’s decision that he was ineligible for unemployment benefits. A JCPS spokesperson told KyCIR last year that more than 2,200 unemployment claims were filed by JCPS employees and substitute teachers at the time.

He hasn’t received a waiver application, and hasn’t been able to reach the unemployment office to ask for one. He is so far unable to ask for basic forgiveness, and stuck in “limbo.”

“With no prize on the other side,” Sanderson said.

‘Good faith’ but no shot at waiver

The unemployment insurance hasn’t even given many substitute teachers, and potentially other workers, a chance to apply for debt forgiveness, according to Louisville attorney Robyn Smith.

The state needs to fill out portions of the waiver application first, including how much money the applicant was overpaid, and there’s no blank forms online or elsewhere for people to submit their own application. People seeking forgiveness through the waiver then need to explain why their overpayment wasn’t their fault and that the debt causes a financial hardship for the applicant and their family or they spent the money on necessary expenses.

When Smith reached out to the unemployment office to ask for a waiver on behalf of a client, she said the unemployment office told her substitute teachers couldn’t request a waiver application for summer payments because they were not a “no-fault” overpayment.

Smith disagrees. 

“I don’t see anything that implicates fault,” Smith said. “They in good faith did what your people told them to do. There wasn’t a law that told them not to claim that they were ignoring. They did not falsify anything. They did not misrepresent anything and they relied on your agency granting that sum.”

And, she said, they’re unemployed and have long since spent that money.

“If you make them pay it back, that’s a hardship, that’s exactly what the waiver is supposed to address,” Smith said.”

The application process laid out in the statute puts the onus on the claimant to request a waiver and prove that they meet the criteria for debt forgiveness, a process Smith said many people may find confusing.

“You get this bill in the mail and you only have 30 days from the date that mailed to you to try and build a case, using words that lawyers use, about why you shouldn’t have to pay all of that back,” Smith said. “That is to me the epitome of unconscionable unjust and unfair, putting that burden on people who are still struggling to get back on their feet.”

Republican State Sen. David Givens from Greensburg, who sponsored the law creating the waiver process, did not respond to a request for comment.

Steve Gray, senior counsel at the National Employment Law Project, a nonprofit advocating for economic security and opportunity for workers, said anyone who was given benefits from the state should be eligible to request a debt waiver

In Michigan, where Gray led the state unemployment insurance office through the first eight months of the pandemic, the office granted waivers automatically for many people who were overpaid due to an agency error.

“If you look for the purpose of the unemployment statutes across the country, it’s to relieve the crushing force that unemployment has on people and their families and their communities,” Gray said. 

But, Gray said, many states shifted the focus of unemployment insurance in recent years from providing relief to as many out of work people as possible towards limiting access to prevent relatively rare instances of fraud or mistaken overpayments.

As a result, unemployment insurance often fails to reach the people who need it most: At the dawn of the coronavirus era, 20% of unemployed people in Kentucky received benefits, which is lower than the national average of 28%.

Gray said the mindset that keeps recipiency rates low may impact how states implement their waiver programs.

“Lots of states that have waivers in place don’t give very many of them, even though there are lots of people that are eligible for them because of this sort of same mentality,” Gray said. “It’s entrenched in our system. We just need a complete overhaul.”

The post Ky. Unemployment Office Is Waiving Overpayment Debts, But It’s Invite-Only appeared first on Kentucky Center for Investigative Reporting.

Phone Calls Still Won’t Be Free When Louisville Jail Gives Up Profit Tuesday, Aug 10 2021 

 

Jacob Ryan

Metro Corrections in 2017

Calls from the Louisville jail are unlikely to be free even after the city gives up its revenue from the calls.

That’s because phone vendor Securus Technologies still has to get paid.

The budget passed by Louisville Metro Council on June 24 requires the jail to stop taking commissions from phone calls in January, and council members cited the high cost for families of incarcerated people in support of the proposal. But it does not make phone calls free.

The new cost of phone calls for people with loved ones inside the jail will depend on negotiations with Securus, according to Louisville Metro Department of Corrections Assistant Director and spokesperson Steve Durham.

“We will be renegotiating the rates to exclude commissions; however, all calls will not be free,” Durham said in an email.

Jade Trombetta, manager of communications at Securus, said the company offers commission-free and taxpayer-funded options in their contracts “as part of our ongoing effort to make our products more affordable and accessible.”

Monthly call volume records obtained by the Kentucky Center for Investigative Reporting show Securus collected $1.6 million in revenue from phone calls in the Louisville jail during 2020.

Securus is one of the largest corrections telecom companies in North America, and holds the contract for all 14 of Kentucky’s prisons and 22 local jails. A recent KyCIR investigation found Securus saw its profits skyrocket last year, with nationwide revenue of $767 million in 2020, amid business shutdowns and rampant unemployment accompanying the coronavirus pandemic.

In Louisville’s jail, calls to a local landline cost $1.85 and calls to cell phones cost $9.99, according to the jail’s website. All calls are limited to 15 minutes.

The company’s contract currently entitles the city to about 60% of the revenue in commissions, a common deal between telecom providers and their correctional facility customers. Records show Securus paid the Louisville jail nearly $945,000 from January through December 2020.

Durham said the money from commissions goes to Louisville Metro’s general fund. Metro Government spokesperson Jean Porter said the money is then used to offset the jail’s operating costs.

Chanelle Helm, a Strategic Core Co-Organizer of Black Lives Matter, Louisville is not surprised the phone services have been so lucrative for Securus and the jail. Helm estimates her organization spent around $35,000 on Securus phone calls in the past year arranging bail for people inside the Louisville jail.

“That’s what the system is designed to do,” Helm said. “There isn’t one part of the system that is taking any of the funds from people and producing anything other than more positions and more funding for the criminal justice system.”

Last summer, the jail population decreased to around 1,200 as city officials sought to relieve overcrowding and slow the spread of coronavirus, but that number has been rising again. Last month, the jail was nearing its capacity with 1,601 people and 20 active coronavirus cases.

As the new, more infectious coronavirus Delta variant threatens to take hold in correctional facilities, Helm said the city should work to lower the jail population or at least make calls free.

“In this moment, in the middle of a pandemic, if we cared about folks’ rehabilitation… we would allow them to speak to family members and loved ones without cost,” Helm said.

The push to lower jail phone costs

Louisville’s current contract with Securus to provide phone services was first signed back in 2011 and has been amended ten times since then.

It wasn’t until the pandemic closed the jail to visitors that a push to make calls free caught steam. Securus did provide one free phone call a week per person, but Judi Jennings said that wasn’t enough.

Jennings is the director of the Special Project, an initiative to provide art supplies for children waiting to visit their family members at the jail as part of the Louisville Family Justice Advocates. The advocacy group circulated a petition and began lobbying Metro Council in December.

In June, Metro Council passed a budget which instructs the Director of Corrections to “discontinue generating revenue from inmate phone calls after December 31, 2021.”

But that doesn’t usurp the city’s contractual obligations with Securus.

Councilman Bill Hollander, chair of the budget committee, said the cost of calls to incarcerated people and their families will depend on Metro Department of Corrections’ negotiations with Securus.

“I would hope, personally, that we could move to free phone calls,” Hollander said. “But that would likely require another appropriation to cover whatever costs are negotiated.”

The contract extends through January 31, 2022 and includes a stipulation that it can be renegotiated to include an “appropriate reduction to the applicable call rates” if Metro stopped taking a cut of the profits.

The contract also says the city can start paying the cost of phone calls itself, instead of passing the cost on to the families of incarcerated people.

“I think everyone would concede that we need to have a provider to provide those services. The question is what is that provider going to charge and who is going to pay those charges,” Hollander said.

Will Jail Visits ‘Slip Away’?

Metro Corrections relies on Securus tools to accomplish much of its daily operations.

Securus’ contract allows Louisville access to its biometric surveillance and call monitoring services as well as connections to databases of warrants and other information from the National Crime Information Center.

Securus also owns Archonix, the company that runs mugshots.louisvilleky.gov and provides the inmate management service used by the jail.

Louisville’s jail recently partnered with Securus to introduce two new services that advocates and lawmakers worry will further isolate incarcerated people and lead to higher costs to stay connected.

The first is the “Securus Digital Mail Center,” a free service which scans physical mail and delivers it to incarcerated people electronically instead of physically. Wanda Bertram, a communications specialist at the advocacy group Prison Policy Initiative, says the practice will incentivize people to sign up for expensive email and messaging systems — “which happens to be the very same services that these companies are selling, making money off of and using to give kickback revenue to the jail itself.”

“You can’t hug your loved one, you can’t see them except through a screen, and in that context to go a step further and take people’s letters away, really just it’s completely cutting them off from their families,” Bertram said.

Trombetta, the Securus spokesperson, said the digital mail center has not been installed yet in Louisville.

Securus also began offering video calling, which started as a pilot program in 2018, and will soon deploy throughout the facility. Remote video calls cost $5 for 20 minutes, according to Securus’ website.

Securus’ contract entitles Louisville’s jail to a 20% share of the revenue from video calling if they hit certain traffic milestones, but Durham said the jail won’t accept commissions from video calling.

Last September, Kentucky state lawmakers bemoaned the fear of video calling replacing visitation at jails in a hearing before the Jail and Corrections Reform Task Force.

Securus representative Russell Roberts said that video calling was “an augmentation” and not meant to replace in-person visitation, but that’s exactly what some lawmakers feared is already happening.

“If we’re talking about rehabilitation, we’re talking about families, we need to make sure that we preserve family in-person visitation,” said State Senator John Schickel, a Republican from Union. “It breaks my heart when I see it has to be through the glass and over the phone… if we’re not vigilant about that, we’re going to see [in person visitation] is going to slip away.”

Even before Securus video calling — and before the pandemic — Louisville’s in-person visitation was essentially gone. The jail replaced traditional in-person visits with a closed circuit video that visitors often had to wait hours for their turn to access. Jail officials said it was an effort to improve safety and reduce contraband making its way inside the jail.

Now Securus runs the video calls at the facility, free, for someone who comes into the jail. Once the system is fully deployed throughout the jail, it will be the only “in-person” visitation option. But the calls are only available for two days a week, on Mondays and Saturdays.

Screengrab, Securustech.net

Prices and availability of video calling from the Louisville jail.

“The way they make money — and they wouldn’t be doing this if they couldn’t make money — is by creating this more convenient option and simultaneously making the possibility of the onsite options extremely unattractive,” Bertram said.

Contact Jared Bennett at 502-814-6543 or jbennett@kycir.org.

The post Phone Calls Still Won’t Be Free When Louisville Jail Gives Up Profit appeared first on Kentucky Center for Investigative Reporting.

In West End, Sewer Odors Are A Long-Standing Problem Tuesday, Aug 10 2021 

 

Lily Burris

James Krebs, a utility worker with MSD, cleans a catch basin on 42nd Street.

Every time Teri Carr has company at her home in Park DuValle, she worries about the potential smells from the street.

The odors are offensive and embarrassing — like sewage or feces, a chemical smell or rotten eggs. Sometimes they’re so strong they wake her up in the middle of the night.

Each time, she dutifully registers a complaint with the city, hoping something will change.

“I have to deal with my quality of life,” Carr said. “It’s a shame I may have to move from this neighborhood – not necessarily for crime, but for quality of air.”

Lily Burris

Teri Carr

The Louisville and Jefferson County Metropolitan Sewer District concedes the sewers in Park DuValle and many neighborhoods in the West End of Louisville have odor issues. Six years of data show MSD has received the most odor complaints — more than 400 — from the 40211 zip code, which includes the Park DuValle and Chickasaw neighborhoods, and a portion of Russell.

Nearly all of the rest of the high-complaint zip codes are in the West End, which is predominantly Black, historically underserved by city services and closest to the state’s oldest and biggest wastewater treatment plant.

Congressman John Yarmuth recently announced preliminary approval from Congress for a federal appropriation package of more than $5 million for Louisville projects, $480,000 of which are designated to address odors in the sewers of the Park DuValle neighborhood.

But the money isn’t guaranteed, and the demand isn’t new. The MSD has until the end of next year to comply with an order from the Louisville Metro Air Pollution Control District to mitigate the problems with West End sewers.

MSD officials said they’ll find a way to complete the work eventually, even without federal money. They say the sewer odor, while inconvenient, isn’t hazardous. That’s little comfort to Carr.

“Even if it is just offensive, I don’t want it in my backyard,” Carr said.

Age, Location and the System

Sewers in the Park DuValle area range from 100 years old to 20, but regardless of when they were built, they feed into the combined sewer system that once dumped into the Ohio River.
The combined sewer system is mostly within I-264 toward the Ohio River. This includes all of the West End and other neighborhoods like Cherokee Triangle, the Highlands and Clifton. Now, this system takes wastewater and stormwater in the same pipe to the water treatment plant.

About two-thirds of the county’s waste is gravity-fed into the Morris Forman Water Quality Treatment Center on the Algonquin Parkway — two miles east of Carr’s house in Park DuValle.

“[The waste] gets larger and slower as you get closer to the plant,” said Rachael Hamilton, interim director of the Metro Air Pollution Control District, which monitors air quality standards and residents’ complaints.

Hamilton called the odors in the West End an environmental justice issue.

“That’s really a vestige of redlining in this community,” Hamilton said.

When stagnant waste combines with dry weather, Hamilton said, the odor can be really strong. An event like that in 2019 prompted the board to issue a legally binding, agreed order with MSD to correct the problem.

When MSD investigated the issue in Park DuValle, they inspected 198 catch basins. More than half were missing necessary equipment to seal off odor.

Brian Bingham, MSD’s chief operations officer, said the work in Park DuValle to repair these catch basins is their first major initiative to complete the terms of the order.

The cost for repairing a catch basin can vary from $1,500 to $20,000 depending on what needs to be done, Bingham said. While this current project is focused on the West End, he said it’s not the only place with these issues according to MSD.

“Not all this problem is in West Louisville,” Bingham said. “This problem exists to some level throughout the entire combined sewer system as it does with every combined sewer system and every combined sewer city in the country.”

Of nearly 3,000 odor complaints from 2015 through 2020, more than a third came from zip codes in the West End.

The Cause of Odors

Catch basin traps are similar to the j-shaped pipes seen under sinks in homes, which holds water to reduce smells. It’s this equipment that’s faulty across much of Park DuValle. “On days when we have lots of heat, no rain, the water gets stagnant,” said James Krebs, a utility worker with MSD who cleans catch basins. “All the organic materials and people cutting their grass, leaves start breaking down in there and it creates a smell. We get a lot of odor complaints with that.”

Last month, Krebs operated a small crane arm on 42nd Street to clean a catch basin with an odor complaint. Workers access the sewer system via brown, rusted metal sewer drains. Underneath those drains are catch basins — along with waste and trash. Trash gets shoved down into sewer drains and piled up on top of the grates. The under-the-street sludge can make whole neighborhoods smell.

Lily Burris

Trash accumulating in a sewer on 42nd Street

Krebs’ crane arm reaches down into the catch basin and, scoop by scoop, pulls out the organic matter and trash and drops it into a small dump truck.

And Krebs sprinkles deodorizing pellets into the drain.

The whole endeavor took Krebs about 15 minutes.

The dump truck takes the goop, for lack of a better word, to one of MSD’s facilities where a bigger truck takes it to the garbage dump.

This process will repeat itself thousands of times as MSD’s $6 million project to address sewer odor issues in the West End gets underway. MSD identified five priority neighborhoods: Park DuValle, Shawnee, California, Chickasaw and Taylor Berry.

Bingham, the MSD chief operations officer, said their plans for Park DuValle are on a bigger scale than previous projects. Odor mitigation is already embedded in a lot of other projects they do, Bingham said, so it’s hard to calculate the investment comparatively, but he estimates they already spend about $2 million across the county on odor mitigation each year.

MSD estimates the Park DuValle work alone will cost nearly $1 million, including master planning and communication efforts.

Residents say there’s a lot of catching up to do. Jimmy Henderson, Sr. grew up in Park DuValle.

“As far as I can remember, you know, I can remember my parents talking about it,” he said of the smell.

It’s not just the sewers — he said there are sewage smells as well as chemical smells from the Rubbertown factories just southwest. Overall, he said there’s a lack of respect for this part of town — so he appreciates that MSD is prioritizing the West End.

“I know, for a fact, they have spent money, a lot of money, trying to rectify some of those problems,” Henderson said.

Carr said she and her neighbors in Park DuValle hope that whatever work they do results in improved air quality. She’s bought air filters, essential oils and anything she thinks will help.

“I don’t want them to get this money and then they do all of these things and we still smell what we smell, and don’t understand how what they did benefited us,” she said.

Lily Burris was a summer fellow at WFPL and KyCIR. She’s a senior at Western Kentucky University. 

The post In West End, Sewer Odors Are A Long-Standing Problem appeared first on Kentucky Center for Investigative Reporting.

Kentucky Jails Made $9.6 Million Off Jail Communication In FY2020 Thursday, Jul 15 2021 

Kentucky jails and county governments made $9.6 million off payments for phone calls and other services in their jails and nearly $900,000 in telecom contract “signing bonuses” during the 2020 fiscal year, according to a survey conducted by Kentucky Auditor of Public Accounts Mike Harmon.

Harmon’s “data bulletin” about telecoms contracts with local jails cited concerns that the industry norm of selecting the vendor who offers governments the biggest cut of their proceeds — called commissions — also incentivizes companies to charge as much money as possible for their services.

Harmon said these potentially competing interests highlight the need for additional legislative guidance for correctional facilities in Kentucky.

“Is the goal of these contracts to bring the most revenue to jails, so that they can offset cost to the taxpayers?” Harmon asked. “Is the role to provide the best services at the lowest cost to the inmates? Or is it a combination of the two?”

Harmon’s survey focused on local and regional jails, and did not include state prisons run by the Kentucky Department of Corrections. A Kentucky Center for Investigative Reporting story published this week found the DOC received $3.2 million last year in phone commissions from contractor Securus Technologies, and negotiated a contract with a $4.1 million, one-time supplemental payment last summer.

Securus and two other Kentucky-based entities — Combined Public Communications and CyberPath Services —  hold the majority of the locally-run jail contracts.

Harmon said the survey his office conducted consisted of records requests filed with local jails and was intended to “serve as a tool” for jailers, the General Assembly and public officials “as we work to try to bring clarity to these new types of revenues.”

Harmon, who announced Monday that he’s running for governor, suggested that lawmakers should pass legislation to improve oversight of these contracts.

Executive Director of the Kentucky Jailers Association Renee McDaniel could not be reached for comment.  The jailers association president and Campbell County jailer, James Daley, has not yet responded to an emailed request for comment.

What’s In The Data Bulletin

Harmon’s release says that the contracts “have become a newly developed source of revenue” for Kentucky’s county jails, which have increasingly engaged in contracts to provide other services besides phone calls, such as video calling, emails and texting. 

Harmon says that’s good: It keeps people connected to friends and family on the outside in new ways.

But there’s a catch: The new products are expensive, and families spend a lot of money on keeping in touch. That was especially true during the coronavirus pandemic, when people called more than ever or turned to new forms of communication with visitation suspended. 

There are also few laws governing how the contracts ought to be structured.

His survey found some jailers using “verbal” contracts, expired contracts or contracts signed without a formal bid process. The terms often included “technology grants” that were left open to interpretation, a one-time “signing bonus,” lines of credit for capital improvements and other incentive payments.

Among the expenditures jails reported using the technology grants for, according the Harmon’s report:

  • “Mats and clothing for inmates” and other “miscellaneous expenses” at the Adair County Regional Jail
  • $100,000 for “Reimbursement of Assistant County Attorney salary and benefits” as well equipment in Henderson County Detention Center
  • “Various operating expenditures, including K-9, jail vehicle, weapons, mats for inmates,” as well as showers for people serving state sentences, in Muhlenberg County.

Jasmine Heiss, the director of a Vera Institute project about mass incarceration in rural areas of the country, said that these types of payments can shift the cost of running governments to people who can least afford such a burden.

“If there is a legitimate service that the criminal justice system is providing to uphold the dignity of incarcerated people, then that should be a fully funded function of government and of the criminal legal system, not something that they try to fund on the backs of the poorest people in their counties,” Heiss said.

Contact Jared Bennett at 502-814-6543 or jbennett@kycir.org.

The post Kentucky Jails Made $9.6 Million Off Jail Communication In FY2020 appeared first on Kentucky Center for Investigative Reporting.

The Pandemic Isolated Incarcerated People. Kentucky And Securus Cashed In Wednesday, Jul 14 2021 

For over 460 days, as the pandemic shut down visitation across the state, incarcerated people and their loved ones relied on the prison system’s costly phone calls and emails. 

The Kentucky Department of Corrections and Securus Technologies reaped big rewards.

Records show the Department of Corrections made at least $3.2 million last year off phone calls that cost the loved ones of incarcerated people up to 25 cents per minute.

That’s the state’s share of the revenue brought in by Securus, which is one of the largest prison telecom firms in North America and holds the contract for all 14 of Kentucky’s prisons. A Securus spokesperson refused to provide its total revenue for that state contract, but a KyCIR analysis found they took in anywhere from $2.9 million to $6.4 million on phone calls alone.

And the company’s profits nationwide indicate the pandemic was a windfall: Financial records obtained by KyCIR show Securus’ revenue increased by almost 10% to $767 million in 2020, amid business shutdowns and rampant unemployment accompanying the coronavirus pandemic.

Kentucky took advantage of this windfall last summer while negotiating a new contract with Securus. They already received $3 million a year from the proceeds of prison phone calls. But the new contract raised their guaranteed minimum to $3.5 million, plus a 40 to 50% share of revenue on new tablets and video calls.

Securus’ services were more necessary than ever, yet the company still hasn’t delivered on long-promised video calls, leaving prison staff to set up Zoom calls when the pandemic struck. And users regularly encounter tech issues with phone calls, interviews with 10 family members and incarcerated people show.

The Department of Corrections didn’t respond to a request for an interview. Securus’ manager of communications Jade Trombetta responded to an interview request with a brief emailed statement. “Securus is proud to provide communications services to the Kentucky Department of Corrections. Our products keep incarcerated Kentuckians connected with their loved ones, help reduce recidivism, and promote public safety,” the statement said. 

But advocates and family members say the DOC and Securus’ products extracted more money from vulnerable people at a time when they needed it most.

“This is people’s lifeline to their loved ones, and they could just charge anything, because people will pay what they have to pay to communicate with their loved ones,” says Diana Elswick, who has spent $900 since March communicating with a friend at the Kentucky State Reformatory. “It’s like they’ve got an IV into the bank account of anybody who has got someone incarcerated in the state.”

The Cost of Staying In Touch

Gov. Andy Beshear suspended visitation at Kentucky prisons on March 11, 2020 in an effort to prevent COVID-19’s spread in the overcrowded facilities. It would eventually spread in every state prison, leading to over 9,000 cases and 53 deaths of workers or incarcerated people.

Before the pandemic, Mekayla Breland would drive over three hours from Newport to the Green River Correctional Complex to visit her fiancé, who asked not be named to avoid retribution in the prison. She says she didn’t hear from him for the first two weeks of the pandemic. 

“There was no notification,” Breland said. “Everything went through my head. I didn’t know if he was alive.” 

Mekayla Breland speaks to her fiancé in the Green River Correctional Complex.

After that, phone calls became more important — and, without in-person visits to look forward to, more frequent. Data provided by the DOC shows that people spent over 633,000 more minutes on Securus phones in 2020 than in 2019, an increase of almost 2% even as the prison population dropped by 16%.

Some of those calls were free, as Securus and the Department of Corrections quickly announced one free 15-minute call per week.

Even with the free calls, Securus still collected anywhere between $2.9 and $6.2 million from Kentucky users in 2020, according to a KyCIR analysis based on call volume and Securus’ lowest prepaid call rates to most expensive. The analysis assumed widespread use of the free calls, but it’s still likely an understatement, since it’s based on per-minute call rates, and does not include other costs associated with Securus’ products.

Though the pricing is set in Securus’ contract, call prices can be unpredictable. KyCIR reviewed bills from calls to the Lee Adjustment Center that show the price of a 15-minute call to an out-of-state number increased by 48 cents between May 2020 and April 2021

DOC and Securus representatives both said the price hasn’t changed. But Securus noted tax rates “can fluctuate.”

The company passes regulatory fees and taxes on to consumers. Even though the Federal Communications Commission caps most calls at 21 cents per minute, that doesn’t include these passed-through fees, and Securus calls regularly cost nearly 40% more than that cap.

There are also flat fees: speaking to a live customer service representative, for example, costs $5.95. Adding money to a prepaid account costs $3 per transaction, and users can only load $50 at a time.

Securus acknowledged at the start of the pandemic that staying in touch with incarcerated people was an especially heavy financial burden. Last March, Securus petitioned the FCC to waive its regulatory fees so that they could lower the cost of phone calls for its customers. 

“While in-person visitation is limited or prohibited, many inmates and their friends and families many of whom are low-income and/or may be experiencing increased financial pressures due to lost income caused by COVID-19 will increasingly rely on [phone calls] as a means of communications,” Securus said in its petition.

When the FCC denied Securus’ request, it argued that Securus could lower its rates any time, and had no obligation to pass regulatory fees onto its customers. They didn’t lower rates in Kentucky.

Breland uses a third-party app and has to change phone numbers often to keep down the cost of staying in touch with her fiancé. She lost her job as a mental health case manager in February. She found a lower-paying job at a factory, and took a second job waiting tables.

Breland says the money from her second job — about $150 to $200 a week — goes right to her Securus account.

“Dating somebody who’s incarcerated is a financial burden, but you love who you love and you have to make sacrifices,” Breland said.

Research by advocacy groups has found that 1 in 3 people with an incarcerated family member go into debt to pay for phone calls or visits. 

About 22% of incarcerated people in Kentucky are Black, though they make up less than 9% of the state’s population.

“The impact of COVID-19 on the outside community was disproportionate on Black, brown and cash-poor communities,” said Bianca Tylek, the founder and executive director of Worth Rises, an advocacy group that has challenged the prison phone industry. “And so when you think about those who are most dependent on prison telecom, disproportionately cash-poor communities, disproportionately Black and brown communities, also being those that are most negatively financially impacted by the pandemic? You can only imagine that that 1 in 3 number is now much higher.

“The pandemic was the biggest blessing that [Securus] could have asked for,” Tylek said.

A Pandemic Turnaround

Securus entered the pandemic promising reform after years of pressure from advocates and families of incarcerated people to reduce or eliminate prison telecom costs.

The Dallas-based company holds individual contracts in 22 local jails in Kentucky in addition to the state prison system. It’s owned by private equity firm Platinum Equity, placing it under the leadership of chairman Tom Gores, owner of the Detroit Pistons NBA team.

Documents obtained from the Alabama Public Service Commission, which regulates utilities such as Securus in that state, show the pandemic benefited nearly every business venture of Securus’ parent company, Aventiv Technology — including electronic monitoring services called Satellite Tracking of People, or STOP, used in Kentucky.

The use of these services also increased during the pandemic, as jurisdictions released more people on parole to reduce the population of crowded correctional facilities, and their electronic monitoring revenue increased company-wide by almost $4 million in 2020.

That overall revenue increased to $767 million in 2020, and net cash flow from its business operations increased five-fold, to $133.4 million. Securus’ spokesperson said revenue increases “reflect new installations, expanded offerings, and improved product performance.”

‘You’d think they would try’ to keep prices low

Other jurisdictions are rethinking the practice of charging for phone calls from prison. The Louisville Metro Council passed a budget last month that weans Metro Corrections off its portion of the revenue from phone calls. Connecticut recently became the first state in the country to ban fees for phone calls from prison.

Legislation has been introduced in Congress several years in a row to curb the costs of phone calls for incarcerated people. Rep. Bobby Rush, a Democrat from Illinois, has sought unsuccessfully to pass a federal law prohibiting correctional facilities from taking a cut of phone call revenue.

The prison phone contract has brought some scrutiny in Kentucky recently. Securus and its competitors testified before an interim committee on jail and criminal justice reform last fall. Sen. Whitney Westerfield, a Republican from Crofton who chaired the committee, said he has a problem with the state profiting off this industry — but the short legislative session and likely pushback from local jailers and county governments prevented him from proposing a new law.

“To charge enough to pay a 50% commission and still be profitable as a vendor and still compete nationally for business, that probably means the margins are higher than it ought to be,” Westerfield said.

But the Kentucky Department of Corrections has not publicly expressed any similar concerns. In fact, the agency committed to a new, six-year contract with Securus last July, even as the company has failed to meet its contract terms in past years. 

The new contract includes a promise from Securus to offer video calls. The service would have been popular last year, and lucrative: a 25-minute video call in Kentucky will cost $5, according to the company’s new contract, and the state will keep half. 

But a review of previous contracts shows Securus has been promising video calling since 2013. Two years later, the DOC enacted financial penalties if Securus didn’t set up video calls. But they didn’t act on it. 

A DOC spokesperson said the agency was “in the process” of enforcing that policy in 2016, but “departmental administration changes” and contract issues delayed the implementation of video calls further.

The prisons did offer some free video calls during the pandemic, but the calls were held over Zoom, usually in a prison staffer’s office, according to multiple people who have participated in such calls over the past year.

“It’s really awkward because there’s one or two people just sitting in there, and you can’t really talk about anything or put your information out there,” said Kyle Thompson, who made two video calls over the course of the pandemic from the Kentucky State Reformatory in Oldham County.

The new contract also brings a big benefit for the Department of Corrections: the new, $4.1 million up-front payment in addition to a larger guaranteed revenue of $3.5 million a year.

The DOC said at a recent legislative hearing that the money goes into a restricted fund for repairs and maintenance at DOC facilities.

That was a surprise to Thompson, who makes phone calls from a crowded hallway, sandwiched between the washing and dryer machines and bathrooms.

“I’m in a building that was built in the 1930s,” said Thompson, who is serving a sentence of life without parole. “You’d think if they were paying for repairs they would try to repair the leaks. They’d try to get rid of the mold, at least.”

Thompson said there’s no air conditioning in that room, and he had to quickly end a call in June when he began to suffer symptoms of heat exhaustion. 

The calls end automatically at 30 minutes.

“It’s very dehumanizing when it comes to someone like your mother or your father when you can’t talk about the things that you need to talk about and you’re constantly pressured to have a certain amount of time,” Thompson said. “We don’t always have the money to call back so a lot of times you’ll forget things or they will be delayed because of that.”

His mother, Valerie Prater, says she spends about $1,200 a year staying in contact with him. That includes emails that cost 44 cents a piece, plus another 44 cents to share a family photo.

Prater is unemployed, and her husband is retired. 

“At times I’ve charged my credit cards to be able to talk to him,” Prater said. “I’ve not bought something just so I can load money on the phone to be able to communicate with him because I can’t imagine what would happen if Kyle couldn’t talk to me.”

Neither Thompson nor his mother knew that the Kentucky Department of Corrections takes a cut of the money they spend.

“With the Department of Corrections, I mean they already make really massive amounts of money,” Thompson said. “You’d think that they would try and keep everyone peaceful and keep the prison calm, and that they would try to charge as small an amount of money as they can.”

Contact Jared Bennett at 502.814.6543 or jbennett@kycir.org.

Correction: Figures reflecting the value of Securus’ debt were incorrect in a previous version of this story and have been deleted.

The post The Pandemic Isolated Incarcerated People. Kentucky And Securus Cashed In appeared first on Kentucky Center for Investigative Reporting.

LMPD Detective Resigns Amid Sexual Abuse Probe Friday, Jun 18 2021 

Facing accusations of sexual misconduct that date as far back as 2016, Det. Brian Bailey has resigned from the Louisville Metro Police Department.

Bailey was a prolific narcotics detective who obtained more residential search warrants than any other officer between January 2019 and June 2020, according to a joint investigation by KyCIR and WDRB News. The warrants virtually always were based on evidence from confidential informants — and he’s been accused of sexually abusing and harassing women he had coerced into becoming informants.

In all, four women working as confidential informants have publicly accused Bailey of sending explicit photos and forcing them to engage in sexual acts under the threat of criminal charges, and he’s been investigated internally at least twice.

LMPD Chief Erika Shields said on Thursday that LMPD has turned over its most recent Public Integrity Unit investigation into Bailey to the Jefferson County Commonwealth’s Attorney, and that the former detective could potentially face criminal charges. She did not specify what he could be charged for.

Shields said the accusations against Bailey, if found to be true, are “disgusting.”

“It’s appalling that any cop would even consider engaging in this behavior,” she said.

Jefferson Commonwealth’s Attorney Thomas B. Wine said his office has received the investigation and will review it to determine if criminal charges are warranted. 

Attorney Vince Johnson, who represents two women who have filed lawsuits against Bailey, police and the city, said the detective “should have been fired by LMPD many years ago. 

“That would have saved my clients and others from his pattern of sexual abuse.”

Bailey is the second LMPD officer this week to resign from the agency while under investigation and one of several to be accused of sexual misconduct in recent years. The U.S. Department of Justice is currently investigating the LMPD to determine if the department has a pattern or practice of violating citizens’ civil rights.

Bailey was put on paid administrative leave in May 2020, according to a department spokesperson. Before that, he was a detective in the Criminal Interdiction Division’s Major Case Unit making $61,900, but city records show he routinely earned more than his listed salary thanks to overtime — topping out at $96,700 in 2018. 

In October 2020, Bailey was put on administrative duty, where he was assigned to the department’s fleet management detail and assisted in answering phone calls and washing cars and other duties, according to a department spokesperson.

His last day was Wednesday, according to his resignation letter. 

Before he was taken off the streets, Bailey was notorious for search warrants based on information provided by confidential informants. Bailey obtained more residential search warrants than any other LMPD officer between January 2019 and June 2020, according to an analysis by KyCIR and WDRB News of all 472 publicly available warrants from that period. He obtained more search warrants than the next two officers combined.

All but one of Bailey’s warrants reviewed by KyCIR and WDRB was based, at least in part, on the word of confidential informants. 

Attorneys have raised flags about Bailey’s use of confidential informants, accusing him in court of relying on “boilerplate” affidavits and, in some cases, making up information.

In lawsuits, Bailey is accused of coercing women to work as confidential informants. One woman claims he pressured and threatened her to work as a confidential informant after arresting her boyfriend on drug charges in July 2018. The woman — who is not named in the lawsuit — claimed Bailey sexually assaulted her for two years while she worked as an informant.

In February, Wine said prosecutors were working to resolve active cases in which Bailey was the arresting officer due to the nature of the allegations against him.

On Thursday of this week, a case involving two people — a man and a woman — came up in Jefferson Circuit Court. The pair was arrested in January 2020 after police executed an early morning search warrant at a home in Chickasaw. The warrant, obtained by Bailey, was based on information provided by a confidential informant.

In court, the investigation into Bailey wasn’t addressed, but the charges against the woman were dismissed. Her attorney, Casey McCall, said she should have never been charged to begin with. The man charged in the case will be back in court next month.

Hearing Bailey resigned, McCall said the city is better off with him gone.

“There are a lot of good police that he makes look bad,” he said.  

Travis Ragsdale contributed to this report.

The post LMPD Detective Resigns Amid Sexual Abuse Probe appeared first on Kentucky Center for Investigative Reporting.

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