SACRAMENTO, Calif. _ A California prison agency that relies on inmate labor is selling hundreds of thousands of dollars worth of masks and sanitizer to state government agencies, charging prices that give it a profit of about 80 cents a mask.
The California Prison Industry Authority is selling cloth barrier masks for up to $3.10 each to at least 14 state departments in the last three weeks, according to procurement records.
By contrast, Gov. Gavin Newsom's administration is buying surgical masks, which can be disposable after one use, from Chinese manufacturer BYD for 55 cents each, according to contracts his administration recently released.
Driven by demand across state government, the prison agency has jumped into what Newsom has called the "wild, wild west" of the market for emergency supplies.
The prison agency says its prices are well below market averages. The Governor's Office says the prices demonstrate how good a deal the state got with the highly scrutinized BYD contract, which Newsom announced during an appearance on MSNBC April 7 and then for weeks refused to disclose to news outlets and lawmakers.
"It seems excessive," Jon Coupal, president of the Howard Jarvis Taxpayers' Association, said of the prices. "But there's so much about this virus response that seems excessive to us. We just hope that there's transparency, which has been a big problem for Gavin Newsom, and that people are doing the best they can given the exigent circumstances."
The prison agency, which was established to help prepare inmates for careers after prison, sells two primary types of masks. It charges $3.10 for those with ties and $2.45 for those with elastic loops.
Its total manufacturing costs _ including labor, materials, transportation and administrative costs _ average $2.31 for each tie-back mask and $1.66 for each elastic mask, according to the agency.
The agency pays inmates 40 cents to $1 per hour to make the masks. It has been authorized to pay overtime of up to $1.50 an hour for the assignment.
A market survey by the agency found an average price of $11.85 for the tie masks and $9.36 for the elastic masks, Prison Industry Authority spokeswoman Michele Kane said in an email. Prices range wildly among online sellers, from below $3 to around $15.
Brian Ferguson, a Governor's Office spokesman, said the administration has seen far higher prices as it has navigated fluctuating prices in recent months.
Under state law, departments normally must buy products from the Prison Industry Authority if the agency makes them. Ferguson said Newsom's coronavirus emergency orders give departments flexibility to pursue better deals if they want to.
But the prison agency offers a "steady, reliable source of PPE at a time when the supply is hard to come by," he said.
Newsom's mask deal with Chinese manufacturer BYD was part of a massive $990 million order for N95 and surgical masks. The contract included $110 million worth of surgical masks for 55 cents each.
The prison agency sold at least $86,430 worth of its cloth masks to 14 departments from April 16 through May 6, according to procurement records. The total is not necessarily comprehensive due to differences in departments' schedules for uploading purchase records.
The Franchise Tax Board placed the largest order, on May 1, for 7,000 elastic loop masks totaling $17,150, according to the records.
The Department of Veterans Affairs, which manages eight veterans homes, bought the first shipment on April 16 and has paid about $16,660 for masks and patient gowns, the records show.
The California Highway Patrol and the departments of Consumer Affairs, General Services, Developmental Services, Employment Development, State Hospitals, Fish and Wildlife, Parks and Recreation and other departments have purchased masks from the agency.
The Prison Industry Authority is also selling hand sanitizer. The agency sells sanitizer in cases of a dozen quart-sized bottles. A bottle comes to $14.
The agency sold about $202,000 worth of hand sanitizer to seven agencies from March 27 through May 7, according to the records.
About $139,000 of sanitizer sales was for the corrections department. The Employment Development Department, which processes unemployment claims, bought 320 cases on Thursday for about $54,000, according to the records.
The Prison Industry Authority is a quasi-independent government agency within the California Department of Corrections and Rehabilitation. It supports itself selling goods to the corrections department and other state agencies, and does not receive money from the state's general fund.
Kane said fluctuating prices for raw materials have contributed to the agency's prices and made the production more difficult.
The agency's fabrics program at Mule Creek State Prison started making masks for inmates and prison staff on March 23. The operation expanded to the California Institution for Women, California Men's Colony, Sierra Conservation Center, Correctional Training Facility, California Correctional Institution and Centinela State Prison, according to an April news release.
Eleven inmates have tested positive for COVID-19 at California Men's Colony, in San Luis Obispo, according to corrections department data. Three inmates have tested positive at the Institute for Women in Corona, and two have tested positive at Centinela, in Imperial.
The virus presents a "serious challenge" for the corrections department due to the close quarters of the prisons and the mixing of prison workers and inmates, the Legislative Analyst's Office said in a Friday report.
Statewide, four inmates have died from COVID-19 and 384 have contracted it while 173 California prison employees have contracted the virus, according to the department.
In-person visits and rehabilitation programs have been canceled and many inmates are sleeping in gymnasiums, visiting rooms and tents outside to increase distancing among them, the report said.
Kane said inmates in the fabrics program are all wearing masks and practicing social distancing.
Ken Oliver, policy manager for nonprofit group Legal Services for Prisoners with Children, said the profits from the masks should be used to improve pay or services for prisoners.
"To turn and make a profit with that money, with no requirement of investing that in prison resources ... we believe it's exploitative and we believe it amounts to slave wages," Oliver said.
The sanitizer is made at California State Prison, Los Angeles county, Kane said. Ninety inmates there have tested positive for COVID-19, according to the corrections department.
The agency has a range of programs from farming and agricultural operations to coffee production, trades programs and diving training. Program participants return to prison 26% to 38% less often than inmates who don't participate, according to its latest annual report.
The agency reported a loss of about $700,000 for the fiscal year that ended last June in its latest annual report. It was projecting a gain of $2.9 million for the present fiscal year before the coronavirus arrived.
