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Out of Control Policy Blog Archives: 7.28.13–8.3.13

California Prison Hunger Strike Raises Challenging Questions

Today marks the 25th day that hundreds of California prisoners in nine facilities have refused state-issued meals in protest of the practice of long-term segregation of prisoners in Security Housing Units (SHU).  The hunger strike began on July 8th with the participation of 30,000 prisoners across the state, though the number of prisoners who have participated the entire time number 385, with 200 others known to be participating, according to the California Department of Corrections and Rehabilitation (CDCR).  One hunger strike participant is known to have committed suicide in the California State Prison, Corcoran SHU after two weeks.

The SHU is a unit designed to house prisoners for disciplinary infractions and for purported gang membership and association. The largest SHUs are at Pelican Bay State Prison, California State Prison, Corcoran, and California Correctional Institution, Tehachapi. Prisoners sent to the SHU spend 22 to 24 hours a day either in solitary confinement or with a cellmate (given overcrowding) in cells typically measuring 7 x 12 feet.  Prisoners sent to the SHU for disciplinary infractions, who currently number approximately 1,500, are given set terms for violations ranging from drug dealing to murder. The majority of those in the SHU, approximately 3,000, have until recently been given indeterminate terms in the SHU for gang membership or association, without any need for other rules violations on their record. It is this latter group that has been at the epicenter of the current hunger strike, the third hunger strike prisoners have launched since June 2011.  The three hunger strikes (a second three week hunger strike was launched in September 2011) have had a unified set of demands including an end to long-term solitary confinement and a reform to the system by which prisoners are identified as gang members or associates. The initial hunger strikes in 2011 prompted two California Assembly hearings and contributed to a June 2012 U.S. Senate hearing on solitary confinement in the United States.

An associate is defined as someone “involved periodically or regularly with the members of a criminal gang.” A member is someone who has “been accepted into membership by a gang.”

In order to be identified as a member or associate there must be at least one piece of evidence that directly links the prisoner to “a current or former validated member or associate of the gang.” Further, the CDCR has devised a point system allocating points to “source items,” or evidence of gang activity, and in order to be considered either a member or associate, at least three pieces of source items exceeding ten points must be identified. When this is done, a prisoner is considered either a “validated” associate or member of a Security Threat Group (STG). The vast majority of gang-validated prisoners are gang associates.

Source items have been a source of considerable controversy.  Possession of “training materials” counts for four of the ten necessary points. However, the definition of “training materials” has been documented to include, for example, “one photocopied pamphlet, which references ‘Revolutionary Black Nationalism, ‘The Black Internationalist Party,’ ‘Marx,’ and ‘Lenin.’” Possession of Sun Tzu’s “The Art of War” has also been counted as possession of “training materials.” Behavioral issues, such as carrying out gang orders, are a possible source item for gang validation but not a necessity.

Until 2012, validated members or associates were given indefinite terms in the SHU, of averaging 6.8 years. The only means of being released from the SHU, regardless of behavioral violations, were to max-out of one’s criminal sentence, debrief (or, provide gang intelligence to prison guards), or die. According to CDCR over 500 prisoners at Pelican Bay State Prison in Crescent City have spent over a decade in the SHU; 78 as of 2011 had spent at least 20 years in the SHU.

Prolonged periods of time in the SHU with limited social contact and minimal stimulation, according to Dr. Stuart Grassian, who has interviewed many in the Pelican Bay SHU, may cause serious psychological problems. Dr. Grassian observed notably higher rates of hypersensitivity, perceptual distortions, panic attacks, difficulties with thinking, concentration, memory, and a loss of impulse control among those in the SHU.

The conditions of segregation prompted the Commission on Safety and Abuse in America’s Prisons to conclude, “the increasing use of high-security segregation is counter-productive, often causing violence inside facilities and contributing to recidivism after release.”

These concerns prompted the CDCR to make revisions to the gang validation process in 2012.  In addition to the 10-point system previously mentioned (which replaced a previous point system criticized for over-relying on informants), CDCR also created and has been implementing a Step Down Program (SDP). The SDP would is a four step process by which prisoners in the SHU may transition to the general population in as little as four years, with increasing incentives in each step.

As part of implementing this process, CDCR has conducted reviews of all 3,000 prisoners in the SHU for gang validation. Since October 2012, the CDCR has reviewed 382 prisoners validated under the previous system. Thus far, it has released (or, plans on releasing) 208 prisoners directly to the general population, completely bypassing the SDP and suggesting an extremely high failure rate in determining who is or is not a genuine threat to institutional security as a gang member or associate. An additional 115 were placed in various stages of the SDP, including some who were placed in the fourth stage, allowing them to be released from the SHU within a year. The remainder have been retained in the SHU for unspecified “security reasons.” This case-by-case review has thus far been stalled as a result of the hunger strike, which the CDCR is calling gang activity. It has not yet determined if prisoners currently on hunger strike will have their participation in the strike held against them as they come up for the case-by-case reviews.

The leaders of the hunger strike, said to be high-ranking members of the Mexican Mafia, Nuestra Familia, Black Guerilla Family, and Aryan Brotherhood, have issued a counterproposal in which they argue for segregation only for behavior-based violations rather than gang affiliation, and limiting the use of solitary confinement. The strike leaders, who are in the SHU at Pelican Bay State Prison, also have a pending federal lawsuit arguing that long-term solitary confinement  (defined as 10 years) is a violation of the 8th amendment and that absence of “meaningful review” of the validation process is a violation of the right to due process. CDCR motions to throw out the case have been rejected on the grounds that the SDP and revised validation system do not rule out the claims of the plaintiffs.

Reforms to the use of segregation units are not unheard of. Mississippi is one notable example. Unit 32 at the Mississippi State Penitentiary once held 1,000 prisoners in solitary confinement. Low-level gang members and inmates there for disciplinary violations made up the bulk of the group. Following a lawsuit, Mississippi reviewed its use of segregation as a disciplinary tool and readjusted its security classification process. Consequently, the population at Unit 32 dwindled to 300, and ultimately was shut down, to no evident increases in disruptions in the Mississippi prison system.

While California should be acknowledged for it’s case-by-case reviews, and consequent reductions in SHU population, the reviews have thus revealed that corrections officials have been doing an inadequate job of identifying gang members and associates for years. The possibility that an individual can still be labeled a security threat and placed in the SHU in part for possessing certain books or pamphlet’s is also a cause for concern. That there are still people in the SHU who have spent decades in environments that cause long-term psychological damage continues to raise questions about the extent to which such practices are compatible with commitments against cruel and unusual punishment.

With approximately 80,000 prisoners across the country in some form of segregation unit (as of 2005), the question of how corrections systems manage and treat prisoners rises to a topic of practical consideration. Policy makers and citizens alike must decide whether they believe it is proper to house people in cells the size of a bathroom with limited means of bettering themselves and releasing them back into society after many years in such conditions; or whether alternatives should be examined and experimented with.

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Sasha Volokh on Court Decision Striking Down Delegation of Regulatory Authority to Amtrak

Sasha Volokh has a new article on Reason.org discussing a recent decision by the D.C. Circuit Court striking down a delegation of authority to Amtrak under the Passenger Rail Investment and Improvement Act of 2008, finding that a section of the Act granted an unconstitutional delegation of regulatory power to a private party. Wait...isn't Amtrak a heavily-subsidized, government-chartered corporation—and thus public in nature? The answer, as Volokh explains, is murky.

Here's the intro:

On July 2, 2013, in Ass’n of American Railroads v. DOT, the D.C. Circuit struck down a delegation of authority to Amtrak in § 207 of the Passenger Rail Investment and Improvement Act of 2008, holding that the statute unconstitutionally delegated regulatory power to a private party. This is a significant case for several reasons.

First, it’s potentially significant in terms of constitutional doctrine. In holding that private delegations of regulatory authority are illegitimate, the case seems to go against the conventional wisdom, which is that there is no special doctrine for private delegations by Congress: the Nondelegation Doctrine applies equally to public and private recipients of delegated congressional authority by Congress. Moreover, this conventional wisdom is probably right. The D.C. Circuit’s decision may yet be correct under the Due Process Clause, but the D.C. Circuit deliberately refused to choose whether this delegation implicated the Nondelegation Doctrine or the Due Process Clause.

Second, it's potentially significant in terms of its real-world effect on delegations to private parties, though much depends on precisely why the delegation is unconstitutional, which the court didn't explain well. If the decision rests on the Nondelegation Doctrine, it only affects federal delegations; but if it rests on the Due Process Clause, it also affects the much broader set of state delegations.

Third, in holding, based on a multi-factor analysis, that Amtrak is a private actor, it provides yet another example of how the public-private distinction is fuzzy, and an entity that is public for one reason might be private for another.

Read the rest of the article here. And for more, all of Volokh's recent legal analyses written for Reason Foundation on an array of privatization-related topics are archived here.

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Richmond's Bad Idea to Use Eminent Domain Against Underwater Mortgages

The San Francisco Chronicle reports that the Bay Area city of Richmond is implementing a new idea for helping homeowners struggling to pay their mortgages. Not only is this an unnecessary project that appears to be ignoring the true source of Richmond's economic trouble, but it is crony capitalism pure and simple.

Under the plan, promoted by financial industry startup Mortgage Resolution Partners, the city is threatening to use its power of eminent domain to take over underwater properties. Richmond would pay the mortgage lenders -- typically participants in Mortgage Backed Securities -- 80% of the current market value of the home, using the rest to cover costs and pay Mortgage Resolution Partners its fee of $4500 per condemned property. Homeowners will receive a new taxpayer-subsidized FHA mortgage based on the new valuation.

Given the rebound in home prices, one wonders if this isn't a policy idea whose time has come and gone. The most recent Case Schiller index shows San Francisco metropolitan area home prices up 24% over the last year and 43% above their trough in 2009, so clearly the problem of underwater mortgages is solving itself.

According to one Richmond homeowner who stands to benefit from the city’s land grab, the rebound has yet to benefit him. But, according to Zillow, price in Richmond have risen almost 23% in the past year - not far below the metropolitan area average. It is worth noting, however, that Richmond is underperforming neighboring communities like Albany (up 29%) and El Cerrito (up 26%). Further, average home prices in Richmond ($205.7k) are far lower than those in El Cerrito ($604.1k), despite the fact that both cities belong to the same school district.

Although a lot of factors drive home price levels and movements, we are left to wonder whether Richmond's relatively high crime rate is a contributing factor. Perhaps if city officials focused more attention on catching thieves than on stealing houses, mortgagees would be in better shape. Ironically, this eminent domain idea might make things worse. A second order problem with the initiative is that, by creating uncertainty on the part of mortgage lenders, it will further depress home prices, thereby reducing Richmond's property tax collections and its ability to pay for police.

This is not the first time a California municipality has considered using eminent domain to sieze property under dubious pretense. Last year, Reason's Anthony Randazzo wrote for RealClearMarkets that San Bernardino County's pursuit of the idea "would create a highly complex, legal nightmare worse than the foreclosure mess, and take years, if not decades, to process through the court system."

And, the same company -- Mortgage Resolution Partners -- was behind trying to get San Bernardino to pursue eminent domain. They have presented this idea to municipalities as a means of solving an economic problem, and then conviniently been the only firm available for the municipality to hire. They are colluding to drum up business for which they will gain a benefit in the marketplace unavailable to any others in the mortgage and legal industires. That is crony capitalism 101.

would create a highly complex, legal nightmare worse than the foreclosure mess, and take years, if not decades, to process through the court system. - See more at: http://reason.org/news/show/taking-mortgages-eminent-domain-bad#sthash.BYcbcTFM.dpuf

While eminent domain advocates present this idea as a way for Main Street to get back at Wall Street, the truth is more complicated. Investment banks profited from these mortgages years ago, racking up hefty fees when the securities were packaged and sold. The real losers from Richmond's cramdown will be whoever currently owns securities backed by these mortgages. Many MBS are in the hands of hedge funds speculating on the housing market bounce back, but public employee pension funds are also major holders. For example, CalPERS held over $12 billion in MBS as of last June - probably including positions in a number of deals that would be affected by Richmond's action.

Richmond, California is a city with many challenges.  Local leaders and most of their constituents would be best served by passing on Mortgage Resolution Partners's eminent domain scheme.


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Detroit Seeking to Privatize Trash Collection

In a new commentary today, I discuss Detroit's new initiative to cut the costs of residential solid waste and recycling collection and disposal through privatization. Here's an excerpt:

In the wake of Detroit’s bankruptcy filing, it’s become well known that Detroit’s emergency manager Kevin Orr is proposing an aggressive package of reforms to help get the beleaguered city back on its fiscal feet, including such controversial proposals as stopping payments on debt service, asking its creditors to accept pennies on the dollar, transferring its water and wastewater system to an independent authority, reducing pension and healthcare benefits for city workers and retirees, and even selling off art from the Detroit Institute of Art. However, one concept being explored to cut operating costs in the short-term—privatizing residential solid waste and recycling collection—has been implemented by so many other cities that it’s almost surprising it hasn’t already been done in Detroit.

On Monday, Detroit issued a request for proposals seeking potential bidders for a five-year contract (or set of contracts) for the collection and disposal of residential trash, recycling, bulk waste and yard waste. The RFP breaks the city into four collection zones, and bidders are allowed to submit proposals on one or more zones. If a vendor’s performance is satisfactory, the city has the option to extend any contract by one year, up to a total of five additional years beyond the initial five-year term. Bidders are “strongly encouraged”—but not required—to give hiring preference to current city public works staff, and the city is also offering up its current portfolio of collection vehicles for potential purchase, which could create a significant one-time revenue influx. Vendors would take over responsibility for customer service (e.g., tracking and addressing complaints and the like), but the city would retain responsibility for handling customer billing. Any eventual contract would also include penalties for failing to meet specified performance standards, such as a minimum of $1,000 in financial penalties per incident if the vendor fails to collect a household’s waste, for instance.

This RFP has been in the works for some time, and the reason is fairly obvious—the city is seeking to dramatically reduce the costs of its current in-house waste collection as it struggles to maintain its mix of public services. On June 13th, Waste & Recycling News reported that city officials had met with two large, national solid waste management companies—Waste Management Inc. and Republic Services—to discuss the potential privatization of residential solid waste, and the firms reportedly told officials that they believed that they could cut costs by approximately 30 percent ($15 million in savings on the $50 million annual cost of collection currently). Though these are preliminary numbers, and the true cost savings potential will be discovered through the current competitive bidding process, savings of that potential magnitude would be nothing to sneeze at given Detroit’s precarious fiscal position.

Read the full article here. The piece goes on to note Fresno, California's recent election that saw the narrow defeat of a waste privatization initiative in that city and discusses the lessons that Detroit and others might take away from that situation.

For more of Reason Foundation's work on local government privatization and solid waste, see here and here.

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Innovators in Action: Innovation and the Future of Public-Private Partnerships in Centennial, Colorado

The latest interview in Reason Foundation's Innovators in Action 2013 series is the second of a two-part series focusing on the contract city of Centennial, Colorado, a Denver-area suburb of more than 100,000 residents that incorporated in 2001 and has gained increasing recognition in public administration circles as a leader in innovative government efficiency and privatization initiatives.

Since incorporation, the city has pursued a "contract city" policy of contracting with outside providers for most public services, and in 2008, Centennial launched what has become its most recognized achievement: a large-scale, full-scope public-private partnership (PPP) with national engineering firm CH2M HILL to provide all of the city's public works services. In Part 1 of our Centennial feature last month, we interviewed Centennial Mayor Cathy Noon and City Manager John Danielson on the city's approach to maintaining a lean government through smart contracting and using public-private partnerships to help drive performance across the entire city government.

In Part 2 of our Centennial feature, we turn to the topic of the city's forward-thinking approach to driving innovation in government. Centennial is one of a growing number of cities that have created a formal senior administrative position—the chief innovation officer—within the city government with the primary responsibility of driving public sector innovation. This role typically sits apart from the traditional departments and divisions so that it can have an enterprise-wide scope and think outside the traditional organizational silos. The deployment of cutting-edge technologies and partnerships with external service providers and community organizations are often key focus areas.

Centennial's Chief Innovation Officer David Zelenok has a unique perspective on both innovation and partnerships, and the intersections between them. As the city's former public works director, he served as the city's lead player in developing its award-winning public works contract—so successfully that he eliminated the need for his own position, which was abolished—before ultimately transitioning into his current role as the city's innovation change agent. I interviewed Zelenok earlier this month on the role of the chief innovation officer in government, the importance of sharing both risks and rewards in PPPs, emerging future opportunities in PPPs that mid-size cities can explore, and much, much more.

Here's an excerpt:

Leonard Gilroy, Reason Foundation: The position of chief innovation officer is a relatively new position in the world of public administration. Can you describe your role, both in terms of its position in the enterprise and how you approach it in terms of the scope and breadth of responsibilities?

David Zelenok, Chief Innovation Officer, City of Centennial, Colorado: In terms of the organization, I report to the city government’s chief executive, which here is our City Manager John Danielson. That was done deliberately, in part because my role is intentionally not a part of any of the city’s other departments, so I’m not a part of planning, public works, the court system or the clerk’s office, for example.

My role is really the chief advocate for innovation within the organization, but beyond that it’s instilling a culture of “thinking outside the box” in the organization, as well as seeking new opportunities not just for cost savings or cost avoidance, but also revenues, and that often leads us into partnerships and unique ways of structuring or restructuring the basic functions of our government.

And very often we find that the conventional approaches that have been used both here and in other cities might be outdated technologically or may have been surpassed by legislation at a variety of levels.

Gilroy: Some public administration experts have lauded the development of the chief innovation officer role, but have questioned whether cities have empowered it with sufficient authority, both in terms of direct budget controls and decision-making authority. How would you respond to this concern? How can cities maximize the value of their chief innovation officers?

Zelenok: Looking across the country, many cities that think of themselves as “leaning forward” have appointed these chief innovation officers. A lot of major cities are now doing this, and media outlets like CNNMoney and Government Technology are starting to cover it.

First and foremost, the emphasis of the job is to advocate for new, innovative and creative ways to avoid costs and to enhance revenues. At the most basic level—just in terms of covering my own costs as an employee—our city manager has given me a challenge to come back with what some places call a “benefit-cost” or “value-for-money” ratio of 20 to one, meaning benefits at least twenty times the cost. So he’s asking that I at least recapture the expenses of the job many times over. And I was pleased to report back by the end of the first month that I had already positioned the city to bring in a combination of revenues and infrastructure improvements exceeding 20 times my salary for the year.

Part of maximizing the value of the CIO role really hinges on the level of the position. If the position is buried deep within the organization, then their influence will only go as far as their peers or counterparts inside that department. So I think that organizational placement is a major part of it, having a single point of contact for innovation, both in terms of moving projects forward and then instilling that culture of innovation in the organization. These creative, innovative ideas really need an advocate in the government at a high level that can push them forward and restructure or look outside of the conventional ways of delivering services.

It's also important to focus on efforts where the benefits outweigh the costs. In some cases, there may be an opportunity to create a partnership with another government or quasi-governmental authorities. Right now we’re in the process of structuring a partnership with a metropolitan district—a quasi-governmental authority—to have them perform $8 million of improvements on our city streets with their money. Ultimately the money will benefit the district, but for us, if they’re committing $8 million into widening our streets and adding in new roundabouts to improve traffic flow, reduce congestion, and improve safety, then we win, the district wins, and the businesses that support that district with their own funding win because they see improvements in congestion.

The bottom line is that we think that everything that government does in this arena needs to have a quantifiable objective or subjective benefit that outweighs the cost of doing it. That’s the first rule of business that we look at—it has to be worth doing financially and economically, and it has to benefit the community.

Definitely check out the full interview here. Zelenok goes on to discuss a range of topics that include the city's successful PPP for public works (and the story of its initial procurement), lessons other cities can learn from Centennial, and more. Of particular interest for current public administrators will be Zelenok's discussion of some of the emerging PPP opportunities that Centennial is exploring in areas like street lighting, traffic signal operations, and fiber optics/telecom. Zelenok offers cutting-edge thinking in each of these areas that blends partnerships with technological modernization and could serve as a model for many other cities, large and small.

Other articles featured in the Innovators in Action 2013 series are available here.

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