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[Senate Hearing 106-1004]
[From the U.S. Government Publishing Office]

                                                       S. Hrg. 106-1004

                       OVERSIGHT OF THE FEDERAL 
                           BUREAU OF PRISONS

=======================================================================

                                HEARING

                               before the

               SUBCOMMITTEE ON CRIMINAL JUSTICE OVERSIGHT

                                 of the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 6, 2000

                               __________

                          Serial No. J-106-75

                               __________

         Printed for the use of the Committee on the Judiciary

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72-846                      WASHINGTON :  2001
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                       COMMITTEE ON THE JUDICIARY

                     ORRIN G. HATCH, Utah, Chairman
STROM THURMOND, South Carolina       PATRICK J. LEAHY, Vermont
CHARLES E. GRASSLEY, Iowa            EDWARD M. KENNEDY, Massachusetts
ARLEN SPECTER, Pennsylvania          JOSEPH R. BIDEN, Jr., Delaware
JON KYL, Arizona                     HERBERT KOHL, Wisconsin
MIKE DeWINE, Ohio                    DIANNE FEINSTEIN, California
JOHN ASHCROFT, Missouri              RUSSELL D. FEINGOLD, Wisconsin
SPENCER ABRAHAM, Michigan            ROBERT G. TORRICELLI, New Jersey
JEFF SESSIONS, Alabama               CHARLES E. SCHUMER, New York
BOB SMITH, New Hampshire
             Manus Cooney, Chief Counsel and Staff Director
                 Bruce A. Cohen, Minority Chief Counsel
                                 ------                                

               Subcommittee on Criminal Justice Oversight

                STROM THURMOND, South Carolina, Chairman
MIKE DeWINE, Ohio                    CHARLES E. SCHUMER, New York
JOHN ASHCROFT, Missouri              JOSEPH R. BIDEN, Jr., Delaware
SPENCER ABRAHAM, Michigan            ROBERT G. TORRICELLI, New Jersey
JEFF SESSIONS, Alabama               PATRICK J. LEAHY, Vermont
                     Garry Malphrus, Chief Counsel
                    Glen Shor, Legislative Assistant

                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page
Leahy, Patrick J., a U.S. Senator from the State of Vermont, 
  prepared statement.............................................    79
Thurmond, Hon. Strom, a U.S. Senator from the State of South 
  Carolina.......................................................     1

                               WITNESSES

Sawyer, Kathleen Hawk, Director, Federal Bureau of Prisons, 
  prepared statement.............................................     2
Stana, Richard M., Associate Director, Administration of Justice 
  Issues, General Government Division, U.S. General Accounting 
  Office, prepared statement and attachments.....................    14
Fine, Glenn A., Director Special Investigations and Review Unit, 
  Office of the Inspector General, U.S. Department of Justice, 
  prepared statement.............................................    62

                                APPENDIX
                         Questions and Answers

Responses of Ms. Kathleen Hawk Sawyer to Questions from Senator 
  Thurmond.......................................................    81
Responses of Ms. Kathleen Hawk Sawyer to Questions from Senator 
  Leahy..........................................................    84
Responses of Richard M. Stana to Questions from Senator Thurmond.    85
Responses of Richard M. Stana to Questions from Senator Leahy....    86
Responses of Glenn A. Fine to Questions from Senator Thurmond....    87

                 Additional Submissions for the Record

Dorgan, Hon. Byron L., a U.S. Senator from the State of North 
  Dakota, prepared statement.....................................    89
Johnson, Hon. Tim, a U.S. Senator from the State of South Dakota, 
  prepared statement.............................................    91

 
               OVERSIGHT OF THE FEDERAL BUREAU OF PRISONS

                              ----------                              

                        THURSDAY, APRIL 6, 2000

                               U.S. Senate,
        Subcommittee on Criminal Justice Oversight,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 3:04 p.m., in 
room SD-226, Dirksen Senate Office Building, Hon. Strom 
Thurmond (chairman of the subcommittee) presiding.
    Alson present: Senator Sessions.

 OPENING STATEMENT OF HON. STROM THURMOND, A U.S. SENATOR FROM 
                  THE STATE OF SOUTH CAROLINA

    Senator Thurmond. The committee will come to order.
    I am pleased to hold this oversight hearing today regarding 
the Federal Bureau of Prisons. I have always believed that we 
must be tough on crime, and maintaining dangerous criminals in 
prison is a key component in the war against crime. One of the 
primary reasons that crime is on the decline is that we are 
putting more serious offenders in prison and keeping them there 
for longer periods of time.
    One of the greatest challenges facing the Bureau of Prisons 
today is its duty to house an ever increasing inmate 
population. The number of prisoners has doubled since 1990, and 
is expected to rise by an additional 50 percent in the next 7 
years. Today, prisoners are being added at a rate of at least 
1,000 per month.
    Keeping the growing inmate population productively occupied 
is essential. Boredom and idleness, especially in our currently 
overcrowded prisons, can be dangerous. Last year, this 
subcommittee held a hearing on Federal Prison Industries that 
highlighted the central importance of this work program to the 
effective management and safe control of Federal inmates. This 
program teaches job skills to inmates, and studies continually 
show that participants are more likely to find and hold jobs 
after their release and are less likely to commit other crimes.
    I think this year we should make every effort to reform 
this program without endangering its success. We can eliminate 
the legal preference that Prison Industries has to make 
products for the Federal Government if we also allow it to 
compete in the commercial market. Also, we should encourage 
Prison Industries to produce items that are currently made in 
foreign countries and not in the United States. Reforms such as 
these should further minimize its impact on the private sector.
    With the constant rise in inmates, the Bureau is doing a 
good job in controlling the cost of medical care for prisoners. 
While national trends show health care costs rising annually, 
the Bureau's costs have actually decreased for the last 3 years 
in a row. This is based on various initiatives that the Bureau 
has implemented, including staff reorganizations, bulk 
purchasing, and telemedicine.
    Moreover, as the General Accounting Office notes, the 
Congress should permit the Bureau to charge a small co-pay for 
inmates when they receive non-emergency care, as many States 
already do. This would help discourage frivolous health care 
visits, thereby freeing medical staff for needy inmates. Also, 
the Bureau should be able to cap inmate hospital payments at 
the Medicare rate.
    A recent DOJ Inspector General report raises concerns about 
inmate use of telephone calls to continue their criminal 
activity while incarcerated, including crimes like drug 
trafficking and fraud. In 1995, the Department of Justice 
settled a prisoner lawsuit regarding phone use on terms 
generous to the prisoners.
    Currently, most inmates are allowed to make as many 
telephone calls as they are able to pay for, or as many collect 
calls as people outside will accept. The case demonstrates that 
while the current Justice Department often encourages 
settlement agreements in various areas of the law, these 
settlements are not always in the best interest of all parties 
involved.
    While inmates should be able to maintain contact with their 
families and communities, the Bureau must balance these needs 
against the public interest in preventing inmate crime. The 
Bureau is taking steps to address this issue. It must work 
diligently to prevent prisoners from committing crime from 
behind bars.
    I want to thank the witnesses who are present, especially 
the Director of the Bureau. Dr. Sawyer has one of the toughest 
jobs in the Federal Government, and I wish to commend her for 
her hard work and dedication. I look forward to discussing 
these important issues today.
    I will now introduce Dr. Kathleen Hawk Sawyer, the Director 
of the Federal Bureau of Prisons, of the Department of Justice. 
She has 24 years of management and training experience in the 
Bureau of Prisons and currently oversees the operation of 95 
Federal institutions.
    How are you doing?
    Ms. Sawyer. Just fine, sir.
    Senator Thurmond. She holds a bachelor's degree from 
Wheeling Jesuit College, in West Virginia, and both a master's 
degree and doctorate degree from West Virginia University.
    We will now turn to Director Sawyer.

STATEMENT OF KATHLEEN HAWK SAWYER, DIRECTOR, FEDERAL BUREAU OF 
                    PRISONS, WASHINGTON, DC

    Ms. Sawyer. Good afternoon. I am certainly pleased to 
appear before you today, and I want to start by thanking you, 
Mr. Chairman, for your tremendous support of the Bureau of 
Prisons, and I thank you for that throughout the years that we 
have worked with you.
    The Bureau continues to effectively meet our mission. As 
you indicated, our 31,000 outstanding and dedicated staff 
manage over 140,000 inmates in 95 of our own Federal prisons, 
as well as contract facilities around the country. During 
fiscal year 1999, the Bureau experienced its second consecutive 
year of record-breaking growth. We grew by 11,300 inmates last 
year alone, and we anticipate that by 2007 the Bureau of 
Prisons population will reach 205,000 inmates. That is a growth 
of nearly 50 percent over today's numbers.
    Crowding in our facilities is 34 percent over-capacity 
system-wide. At medium- and high-security facilities, crowding 
levels are even more dangerous, with 55-percent crowding at 
medium-security and 51-percent crowding at high-security. We 
must reduce this crowding at each facility for the safety of 
staff, inmates, and the communities surrounding us.
    With the resources Congress has already provided, we are 
making significant progress in this regard. We have 22 new 
prisons that are funded or partially funded, and in the fiscal 
year 2001 budget we are seeking funding and advanced 
appropriations for nine additional new prisons.
    In addition to absorbing our own rapidly increasing Federal 
inmate population, the Bureau has begun assuming responsibility 
for the sentenced felons from the DC. Department of 
Corrections, as required by the National Capital Revitalization 
Act. Thus far, we have absorbed 2,300 sentenced felons, and we 
will be absorbing the remainder of the inmates by the end of 
2001. Absorbing these inmates is going to be a great challenge 
for the Bureau because, as I indicated, our facilities are 
extremely crowded already and the new bed capacity to absorb 
the DC. inmates will not be constructed before the deadline 
date of December 2001.
    You may recall that in the preliminary drafts of the 
Revitalization Act, the Lorton closure date was supposed to 
have been 2003, which was consistent with the dates by which we 
would get the new institutions built. However, when enacted, 
the date for closure had been changed to 2001, which means we 
will be absorbing the remainder of the inmates by the end of 
2001 without sufficient bed capacity on line.
    The Bureau is committing to providing inmates with programs 
to help them make the most of their time in custody, as well as 
to reenter the community successfully. Our programs include 
drug treatment, education, vocational training, and work skills 
training. We operate residential treatment programs for 
substance abuse for nearly 30 percent of the Federal inmate 
population who have serious substance histories.
    An interim report researching our success in our drug 
treatment programs shows that, 6 months after release, 73 
percent of the inmates who completed our program are less 
likely to be arrested and 44 percent are less likely to test 
positive for any substance abuse. Last year, nearly 6,000 
inmates completed their General Education Degree, the GED, and 
thousands of others completed a variety of additional education 
and vocational training programs.
    As I have testified on previous occasions, and as you 
mentioned, Mr. Chairman, Federal Prison Industries is our most 
important program, and it is a cost-effective program. It is 
entirely self-sustaining and operates without any appropriated 
funds. It provides significant training for inmates that has 
been demonstrated to reduce recidivism.
    For many years now, as you indicated, some members of the 
business and organized labor communities have voiced strong 
concerns with the mandatory source preference, that it gives us 
an unfair advantage in the Federal marketplace. Should we lose 
mandatory source status, we would clearly need alternative 
authorities, as you indicated, such as being able to make 
products for the commercial market and being able to make 
products that are currently made offshore.
    Recently, the General Accounting Office conducted an audit 
of our health care, and as you indicated, Mr. Chairman, it was 
determined that our health care costs have been steadily going 
down as nationwide health care costs have been increasing. GAO 
noted several of the initiatives that contributed to this 
savings. They also highlighted the two legislative proposals 
that you mentioned in your comments, Mr. Chairman, about the 
inmate copayment and the Medicare rate caps. And it would 
certainly improve our ability to provide cost-effective health 
care in the Bureau if both of these legislative initiatives 
would be successful.
    In August 1999, the Office of the Inspector General 
completed an audit on our inmate telephone system. The report 
identified some significant problems that have occurred over 
the years with inmates abusing their phone privileges, and we 
have been working diligently to improve both the inmate 
telephone system and our monitoring to address the shortcomings 
of the program.
    Our goal is to maintain reasonable access by inmates to 
phones to support healthy family and community ties which 
assist in successful return to the community, but at the same 
time we must control for any abuses of phone privileges. The 
dramatic growth that we have experienced in the Bureau over the 
last several years and the huge numbers of new staff coming in 
have outpaced our traditional methods of preventing phone 
abuses. We must now look to new technologies that are now 
available for us to enable us to control phone abuses, and the 
new technology will be installed in all Bureau of Prisons 
facilities by November of this year.
    I am very proud of the Bureau of Prisons staff and the job 
that they do each and every day. Despite our record-setting 
population growth, the Bureau has maintained its outstanding 
level of performance.
    I would like to conclude again, Mr. Chairman, by thanking 
you and the members of the subcommittee for your wonderful 
support of the Bureau of Prisons throughout the years. This 
concludes my prepared comments and I would be happy to take any 
questions you might have.
    Senator Thurmond. Thank you very much. I want to compliment 
you on your fine record.
    Ms. Sawyer. Thank you, Mr. Chairman.
    Senator Thurmond. I have heard so many nice things about 
you. You are not only nice looking, but you are avery efficient 
woman.
    Ms. Sawyer. Thank you, Mr. Chairman.
    Senator Thurmond. Director Sawyer, your budget for the new 
fiscal year requests about $2 billion in new funding to 
construct or complete construction of 17 new prisons over the 
next 3 years. Is this new funding, including advanced 
appropriations, critical to help you control overcrowding?
    Ms. Sawyer. It is absolutely critical, Mr. Chairman. As I 
indicated, our crowding levels are really at very dangerous 
proportions, especially at our medium and high security levels, 
which are the most dangerous inmates in our system. We 
desperately need to have more prison beds coming on line. We 
are trying to build them as fast as we can to get the beds on 
line quickly. We appreciate the great support and resources we 
receive from the Congress, and we desperately need each and 
every one of those beds we are requesting.
    Senator Thurmond. Director Sawyer, the GAO review of health 
care costs in the Bureau of Prisons shows that unlike the 
national trend, your per-capita health care costs are 
declining. What do you credit as the primary reason you have 
been able to keep per-capita inmate medical costs under 
control?
    Ms. Sawyer. Well, we have been watching our costs very 
carefully, Mr. Chairman, looking for every way possible to 
bring those costs down, and we have identified a number of 
things that have had a great impact on our costs. One was 
reorganizing or changing the way we staff our health care 
operations.
    We used to be very reliant on physicians and mid-level 
practitioners, physician assistants. We find that by spreading 
the health care resources a little differently, by bringing in 
more registered nurses and licensed practical nurses and other 
staff to do the lesser skilled work, frees up, then, the 
physicians and physician assistants to do what they are trained 
to do, and that is provide medical care, but at much less cost 
to the taxpayer.
    We have entered into a number of cooperative agreements 
with the Veterans Administration and the veterans hospitals. We 
share some contracts with them. We do laboratory work together. 
We have a cooperative agreement with them, or a contract on our 
pharmaceuticals that we are able to achieve at a much lesser 
cost through the VA.
    Telemedicine has been a great boon for us, and I think we 
have only just begun to see the benefits of telemedicine 
because that not only saves us money in terms of the amount 
that we spend for the consultant medical staff, but it saves us 
the cost of transporting an inmate downtown to a local 
hospital. We are able to do it using the technology of 
teleconferencing, telemedicine. We are getting wonderful 
results there and significant cost savings. So there are a 
number of different strategies that have resulted in our cost 
savings.
    Senator Thurmond. Director Sawyer, as you are well aware, 
the inmate population continues to grow and it is aging. Also, 
more and more inmates have serious health conditions such as 
AIDS. Will problems such as these make it harder to keep health 
care costs under control in the future?
    Ms. Sawyer. Well, I think it is specifically because we 
envisioned both of these things coming our way, an aging 
population as well as the many infectious diseases that come 
into our institutions--HIV, hepatitis, tuberculosis. That is 
exactly why we took such an aggressive approach to reducing our 
costs because we need to be able to keep those costs down to a 
reasonable level and still meet the medical needs of both the 
aging population and the many infectious diseases that come our 
way.
    Senator Thurmond. Director Sawyer, do you think it is a 
problem today that too many inmates seek medical care when it 
is not needed, and would requiring prisoners to make a modest 
co-pay for non-emergency care help prevent prisoner abuse of 
health care privileges?
    Ms. Sawyer. Yes, we do, Mr. Chairman. We have done a lot of 
tracking and counting the numbers in our institutions. We 
believe that about 25 to 35 percent of those inmates who come 
to sick call really don't need to come to sick call. They are 
trying to get off a day of work or get out of a school class 
and not have to attend. They really don't need to be utilizing 
the very expensive medical resources that we have available. We 
believe the medical co-pay requirements where the inmates would 
have to pay just a nominal amount for, again, non-emergency 
situations would reduce the abuses of sick call.
    Senator Thurmond. Director Sawyer, the GAO review of health 
care costs concludes that the Bureau could save money if it 
could pay hospitals at Medicare rates, especially if 
benchmarking efforts were expanded. Do you agree that these 
appear to be promising methods to help BOP control medical 
costs in the future?
    Ms. Sawyer. Yes, we agree that both of those are promising 
initiatives. We are very much hoping to someday achieve 
approval of the legislation that would allow us to have 
Medicare rates capped by the outside hospitals. We believe it 
would save up to 50 percent of what we are currently paying now 
on health care costs out in the local hospitals.
    The benchmarking is a very promising thing, and we are 
teaching all of our staff around the system how to do 
benchmarking when they are developing new medical contracts. It 
is very promising in some locations, especially the inner city 
and some other areas around the country. We are a little wary 
of it in some of the smaller, more remote communities where we 
are located because communities that have a larger poor 
population get offsets by Medicare. There are multipliers that 
actually increase the costs somewhat. So we want to look at it 
a little carefully in terms of some of our remote institutions 
to make sure there truly will be a cost savings utilizing the 
benchmarking approach in some of those locations.
    Senator Thurmond. Director Sawyer, the August 1999 report 
of the Inspector General raises concerns about inmates using 
telephones to continue criminal activity from behind prison 
walls, such as drug trafficking. Are you concerned about this 
issue, and what steps have you taken to respond?
    Ms. Sawyer. We are very concerned about this issue, Mr. 
Chairman, and our concern for this was what led us to be 
looking to utilize the new technologies that exist today to get 
much better control over inmate access.
    We have been trying to put into place a new technology 
phone system for the last several years and we ran into some 
serious glitches both in terms of some protests to our 
contracts as well as some litigation which delayed our ability 
to put in the new system.
    During that same time period, though, as GAO noted, we were 
growing dramatically and we had a lot of brand new staff coming 
in, and our own practices and procedures and our policies fell 
short in terms of being able to be sure that we identified all 
the inmates who were going to attempt to continue illegal 
activities in the institutions.
    So we are now very clearly targeting getting that new 
technology in place by November of this year. Since the GAO 
report, we have implemented a lot of new practices and 
procedures and oversight and monitoring to make sure that we do 
control any inmate who attempts to abuse our phone systems.
    Senator Thurmond. Director Sawyer, I understand from the IG 
report that some BOP facilities limit prisoner phone calls to 
15 minutes each. Do you think that all BOP facilities should 
limit the length and total number of calls that a prisoner can 
make on a weekly or monthly basis?
    Ms. Sawyer. Yes, Mr. Chairman. We believe, as GAO does, 
that one of the ways to get better control over abuses is to 
limit access to calls. Again, we have already cut back access 
in our institutions currently, shutting down the phone systems 
during the daytime when inmates are supposed to be working, and 
shutting all the phones off later in the evening as the evening 
comes to an end.
    Our plan is with the new phone system, we have it installed 
now in 40-some institutions, and that will automatically cut 
you off after a 15-minute phone call and it will restrict how 
long you have to wait before you can make another phone call. 
Again, the new technology coming is going to give us some 
wonderful benefits.
    With the 140,000 inmates that we have in our system and 90-
some institutions, it is hard to keep controls on these things 
manually anymore because we are so big, and the new technology 
will just give us tremendous new capabilities, including 
cutting an inmate off after a 15-minute call.
    Senator Thurmond. Director Sawyer, what is the status of 
implementing ITS-II, your new telephone monitoring system, in 
all facilities, and what effect will it have on curbing inmate 
telephone abuses?
    Ms. Sawyer. Currently, 42 of our 95 institutions are 
already fully installed with the ITS-II system. The remainder 
of the institutions will be completed by November of this year, 
7 months away. It will do a number of things for us. It will 
identify every inmate using the telephone with a PIN number. We 
will know exactly which inmate is on the phone. We will know 
which numbers they are calling because it can restrict you to 
just 10 approved numbers by us.
    It cuts you off after 15 minutes. It controls how 
frequently you can use the phones, so it controls the inmate 
access. But the other thing it does is it allows us to do a lot 
of cross-referencing to really target abuses. We can tell how 
much time over the course of a week or a month you may be 
trying to utilize the phone. If you are using it excessively, 
obviously you are probably up to no good, and we can target 
your calls and monitor them even more carefully.
    We can cross-reference numbers to determine whether or not 
multiple inmates are trying to call the same numbers which may 
suggest illegal activity going on there, or at least something 
that is not appropriate. They will be able to cross-reference 
numbers with any numbers that law enforcement officials have 
that they know are known drug connections. And if our inmates 
are utilizing any of those numbers, we can pull it up quickly 
through the new technology. There is just a wealth of 
capabilities that this new system will provide for us, and 
again it will be fully operational by November of this year.
    Senator Thurmond. Director Sawyer, is Prison Industries 
better than other prison work programs to teach inmates skills 
they need when they are released and to help prevent 
recidivism?
    Ms. Sawyer. Absolutely, Mr. Chairman. We believe that the 
Prison Industries program is the best possible way to teach 
good work skills and develop good work habits, and research 
backs us up with that fact. Traditional vocational training 
programs teach the skill, but there is not sufficient live work 
then for the inmates to be able to do to develop the proper 
kinds of work habits and really make those skills reality for 
them.
    The Prison Industries program enables us to do both teach 
the skills, develop the good work habits, and also give them 
real work over an extended period of time to really hone their 
skills so that by the time they are released, they are very 
ready to go back into law-abiding society and have good 
employment.
    Senator Thurmond. Director Sawyer, assuming that Congress 
eliminated the mandatory source preference for Prison 
Industries regarding the Federal Government but did not give 
Prison Industries the authority to sell products in the private 
sector, what impact would this have on Prison Industries?
    Ms. Sawyer. We believe it would have a serious impact upon 
Prison Industries. We don't know exactly the volume that it 
will have, but we know that if we lose the mandatory source, we 
will lose some sales in some of the traditional markets that we 
have been involved in historically.
    That is exactly why, as you indicated in your opening 
comments, Mr. Chairman, should we lose mandatory source, we 
must have some new opportunities open to us, some new 
authorities that will allow us to sell to some other markets in 
order to keep an adequate number of inmates employed in Prison 
Industries.
    Senator Thurmond. Director Sawyer, if Prison Industries 
were permitted to make products for sale in the commercial 
market and paid comparable wages similar to State prison work 
programs, would Prison Industries be able over time to 
eliminate the mandatory source preference that it now has in 
the Federal market?
    Ms. Sawyer. We believe that that is one vehicle that would 
help us certainly reduce our reliance on mandatory source. 
Being able to sell in the commercial market and pay prevailing 
or minimum wage is a program that is available to State 
facilities right now, State correctional systems. It is called 
the Prison Industries Enhancement program, PIE program, and we 
believe that that would help us to achieve the kinds of sales 
levels that we need.
    The other area that would be helpful, as you referenced 
earlier, is being able to make products that are currently 
being manufactured offshore and then brought back and sold in 
this country. If we could have access to the commercial market 
for those kinds of products also, we believe the combination of 
the two would significantly reduce our need for mandatory 
source.
    Senator Thurmond. Director Sawyer, do you think itwould be 
beneficial for the Bureau of Prisons and for American companies if 
Prison Industries were allowed to make products that are currently made 
by foreign labor outside of the United States?
    Ms. Sawyer. Yes, we certainly do, Mr. Chairman. We think 
that is a wonderful opportunity for us because those jobs have 
already left this country. We wouldn't be harming the domestic 
labor market at all, but it would give good work to our inmates 
and develop good work skills.
    Senator Thurmond. Director Sawyer, on the issue of inmate 
telephone calls, it seems that one way to deter prisoner abuse 
of phones is to provide tough, consistent punishment for 
inmates who abuse their telephone privileges. What is the 
Bureau's policy for the discipline of these inmates?
    Ms. Sawyer. We agree exactly with that point, Mr. Chairman, 
and it was one of the issues raised by the Inspector General's 
office also. Our disciplinary response to inmates in the past 
had not been as tough as we could make it, so we have made some 
significant changes in that regard giving a lot more teeth to 
the disciplinary action that will occur for those inmates who 
abuse our phone systems.
    Senator Thurmond. Director Sawyer, are three-way calls a 
significant problem, and will the ITS-II telephone system help 
prohibit inmates from making three-way calls?
    Ms. Sawyer. Yes, Mr. Chairman, three-way calls are very 
difficult for us, and unfortunately the ITS system in and of 
itself will not resolve that problem for us. There is currently 
no technology out there that can clearly identify and clearly 
eradicate three-way calls. We continue to work with the 
technology experts in the field of telecommunications and as 
soon as they land on anything that is usable in terms of three-
way calls, we will include that into the ITS system. But 
currently there is nothing that is fail-safe that would 
identify for us three-way calls.
    Senator Thurmond. Director Sawyer, I believe that completes 
the questions I had in mind. Do you have anything else you want 
to say?
    Ms. Sawyer. No, sir. Again, I just thank you for your 
support of the Bureau of Prisons.
    Senator Thurmond. Thank you again for your good work.
    Ms. Sawyer. Thank you, sir.
    [The prepared statement of Ms. Sawyer follows:]

               Prepared Statement of Kathleen Hawk Sawyer

    Mr. Chairman and Members of the Subcommittee: I am pleased to 
appear before you today to discuss the operations of the Federal Bureau 
of Prisons (BOP). Let me begin by thanking you, Chairman Thurmond, 
Ranking Minority Member Senator Schumer, and other members of the 
Subcommittee for your strong support of the BOP. I look forward to 
continuing our work with you and the members of the Subcommittee.
    The BOP continues to meet effectively our mission to protect 
society by confining offenders in facilities that are safe, humane, 
cost-efficient, and appropriately secure, and that provide work and 
other self-improvement opportunities to assist offenders in becoming 
law-abiding citizens. Through their dedication and outstanding 
contributions, over 31,000 BOP staff manage over 140,000 inmates in 95 
institutions and contract confinement facilities throughout the 
country.
                    population growth and resources
    During fiscal year 1999, the BOP experienced its second consecutive 
year of record breaking inmate population increases. In fiscal year 
1998, the population increased by more than 10,000, and in fiscal year 
1999, the increase was over 11,300. By fiscal year 2007, we anticipate 
a Federal inmate population of approximately 205,000. That is growth of 
nearly 50 percent over the current level.
    Overcrowding in BOP facilities is 34 percent over capacity system 
wide. At medium and high security facilities overcrowding levels are at 
even more dangerous proportions, 55 percent at medium security 
facilities and 51 percent at high security facilities. We must reduce 
overcrowding at those facilities for the security of staff, inmates, 
and the surrounding communities. With the resources Congress has 
already provided, we are making substantial progress with 22 new 
prisons funded. However, we need to do more. In the fiscal year 2001 
budget request we seek funding and advanced appropriations to fund 9 
new prisons over the next three years. Advanced appropriations, coupled 
with design-build contracting, will enable the BOP to build the new 
facilities more quickly and at less cost.
                    district of columbia (dc) felons
    In addition to absorbing the rapidly increasing federal inmate 
population, the BOP has begun assuming responsibility for sentenced 
felons from the District of Columbia (DC), as required by the National 
Capital Revitalization and Self-Government Improvement Act of 1997 (the 
``DC Revitalization Act''). The BOP also continues to move forward on 
the Revitalization Act requirement to privatize confinement for at 
least 2,000 DC sentenced felons. Environmental and legal challenges 
have delayed our efforts to transfer the inmates to privately operated 
prisons, but we have accepted almost 2,300 DC sentenced felons from the 
DC Department of Corrections facilities for placement into facilities 
operated by or under contract with the BOP. Over900 of these inmates 
are currently housed in a facility operated by the Virginia Department 
of Corrections.
    During fiscal year 2000, the BOP will accept on an on-going basis 
from the DC Department of Corrections, minimum and low security male 
sentenced felons, female sentenced felons, and sentenced Youth 
Rehabilitation Act (YRA) offenders. The inmates to be accepted include 
both new Superior Court commitments and those confined in the DC 
Department of Corrections (or facilities under contract with the 
Department of Corrections). We will continue to accept, on a case-by-
case basis, special management cases, as well as inmates with chronic 
medical problems who can be housed in the general population of a BOP 
minimum or low security facility. Further, despite severe overcrowding 
at our penitentiaries and medium security facilities, we have agreed to 
take up to five maximum custody inmates per month who have shown by 
their behavior that they are incapable of functioning in an open inmate 
population. Also, contingent upon BOP capacity, transfer of additional 
mental health/medical cases will be accomplished.
    Absorbing the DC sentenced felons into the BOP presents an 
extraordinary challenge. BOP facilities are extremely overcrowded, and 
the new prison facilities being constructed to absorb DC felons will 
not be ready until after the transfer deadline of December 31, 2001. In 
the preliminary drafts of the Revitalization Act, the Lorton closure 
date was 2003, consistent with BOP estimates for construction 
completion of new facilities. However, when enacted, the date for 
closure was 2001, and thus we are not in the best position to absorb 
these inmates. We are, nevertheless, committed to meeting the 
requirement of the act and receiving all inmates by the end of 2001.
    Finally, we continue to seek a modification to the 50 percent 
privatization requirement in the DC Revitalization Act. This charge is 
necessary because nearly two-thirds of the D.C. Code sentenced felons 
are classified as medium and high security under our classification 
system. Consequently, to meet the 50 percent requirement in the 
Revitalization Act, the BOP would have to place more than 2,000 medium 
and high security offenders in contract prisons. Consistent with the 
Administration's position that the private sector has not yet 
established a sufficient track record in housing these offenders, the 
BOP believes it would present a significant risk to public safety if 
the higher security D.C. offenders were to be placed in privately 
operated prisons. Accordingly, we are seeking language to provide us 
with the same discretion that we have with other federal inmates to 
determine which D.C. felons can appropriately be placed in private 
facilities, consistent with the safety of staff and inmates and the 
surrounding community.
                            inmate programs
    The BOP takes its mission very seriously and is very committed to 
providing inmates with programs designed to help them make the most of 
their time in custody and successfully reenter the community upon 
release. We provide a variety of correctional programs that further 
these objectives, including drug treatment, education, vocational and 
work skills training.
Residential drug abuse treatment
    The BOP operates residential drug treatment programs for the nearly 
30 percent of the federal inmate population who have histories of 
substance abuse. Residential programs (where inmates live in housing 
units devoted to drug treatment activities) are the most significant 
component of the drug treatment process. Through our 44 residential 
drug abuse treatment programs we provide treatment to all eligible 
offenders with substantiated histories of moderate to serious drug 
abuse. Nearly 50,000 inmates have completed this program since 1990. An 
interim report from an ongoing evaluation of BOP residential drug abuse 
treatment programs showed that individuals who had been released to the 
community for a minimum of six months after completing residential 
treatment were 73 percent less likely to be arrested for a new offense 
and 44 percent less likely to test positive for drug use, as compared 
to similar inmates who did not complete the program.
Education and vocational programs
    Last year nearly 6,000 inmates completed their General Education 
Degree (GED) and thousands of others completed a variety of additional 
education programs, as well as vocational training programs. Through 
these programs, inmates gain knowledge and skills that help them become 
gainfully employed upon release and avoid new criminal conduct. These 
programs have been shown by BOP research to significantly reduce 
recidivism. I will address the value of work skills programs in more 
detail below in the context of Federal Prison Industries.
Life skills programs
    In recent years the BOP has developed a host of new programs 
intended to assist inmates make a better adjustment to prison life, to 
help those who had been involved with gangs adapt toindependent 
functioning as inmates in prison and as citizens after release to the 
community, and help those inmates with deficiencies in life skills 
improve their functions while being incarcerated and upon release. The 
programs are designed to bring about a significant increase in the 
quantity and quality of interactions between staff and inmates. The 
goal of these interactions is to increase the likelihood that staff 
will have a positive influence over the inmates, as well as a greater 
opportunity to prevent illicit inmate behavior. They also emphasize the 
development of positive, pro-social values and behaviors that will 
enable inmates to manage better their lives in the institution and upon 
return to the community; all are designed to teach individual 
responsibility, respect for the law and authority, and pro-social 
coping and interacting skills.
    We remain committed to self-improvement programs for inmates and 
their significance to our overall mission despite the substantial 
overcrowding and the additional strain that it puts on our staff in 
providing programs.
                       federal prison industries
    As I have testified on previous occasions, Federal Prison 
Industries (FPI) is the BOP's most important and cost-effective 
correctional program. FPI, which is entirely self-sustaining and 
operates without any appropriated funds, provides an important inmate 
program at no cost to the taxpayers. FPI's mission is to: (1) employ, 
instill good work habits in, and provide skills training to as many 
inmates as possible; (2) contribute to the safety and security of 
federal prisons by keeping inmates constructively occupied; (3) produce 
market-priced, quality good for Federal Government customers; (4) 
operate in a self-sustaining manner; and (5) minimize its impact on 
private business and labor. FPI employs nearly 21,000 inmates, 
representing approximately 25 percent of the sentenced, medically 
eligible, federal inmate population. Inmates employed by FPI learn 
marketable job skills, develop a strong work ethic, and are less likely 
to engage in prison misconduct.
    In addition, inmate employment in FPI reduces recidivism and 
thereby increases public safety. A comprehensive study conducted by the 
BOP demonstrated that FPI is an important rehabilitation tool that 
provides inmates an opportunity to develop work ethics and skills that 
can be used upon release from prison. Inmates employed by FPI were 
found to be 24 percent more likely, upon release, to become employed 
and remain crime-free for as long as 12 years after release.
    The FPI program also contributes significantly to the safety and 
security of the BOP's correctional facilities. FPI keeps inmates 
productively occupied and reduces inmate idleness and the violence and 
other misconduct associated with it. In recent years, FPI's role as a 
correctional program has become even more important as the inmate 
population and institution overcrowding have increased substantially. 
The FPI programs are essential to the security of communities in which 
they are located, the Federal Prison System, its staff, and inmates.
    For many years now, some members of the business and organized 
labor communities have voiced strong concerns that the mandatory source 
preference gives FPI an unfair competitive advantage in the federal 
market place. The debate has intensified in recent years as the number 
of inmates employed in FPI has increased with a corresponding increase 
in output of goods and services. The increases are drive by the past 
two decades bi-partisan federal criminal justice policy of putting more 
people in prison for longer periods of time. There is now an ongoing 
dialogue between interested Members of Congress, FPI, private business, 
and organized labor that we hope can achieve a solution that will 
simultaneously satisfy the legitimate concerns and competing issues of 
all interested parties.
    Should FPI now forgo its mandatory source status, as an offset for 
sales and inmate job assignments that would be lost as a result, the 
BOP clearly needs alternative opportunities in order to maintain 
current inmate employment levels in industries.
    We believe there is broad-based consensus for several principles, 
which should guide the development of these opportunities:
     Private businesses should be allowed to compete for 
federal business.
     Federal customers should have more discretion in procuring 
products.
     EPI should operate in a manner that minimizes any adverse 
impact on domestic companies and workers.
     EPI should employ inmates and provide job skills training 
to provide for secure prison management by reducing inmate idleness and 
to reduce recidivism by prisoners who are released to the community.
     EPI should operate in a self-sustaining manner.
                             medical issues
Chronic health care costs
    The number of inmates over 50 years old confined in BOP facilities 
is gradually increasing. While it is true that the aging inmate 
population has inordinate needs for health care, we have found that 
younger inmates who have a history of high risk behaviors are also 
prone to significant health concerns (e.g., HIV, hepatitis). 
Specifically, many of our elderly inmates have no significant health 
care needs, and are appropriately housed based upon their security 
levels in our general population facilities. The bulk of our health 
care costs emanate from our Medical Referral Centers (essentially 
prison hospitals), which house some elderly offenders, but also house 
large numbers of younger offenders suffering from chronic, debilitating 
diseases that result from the lifestyle as they have led.
Infectious disease
    Large urban correctional systems, like the District of Columbia 
system, have consistently reported higher rates of drug use among their 
inmates, a behavior strongly linked to blood borne pathogen infections, 
such as HIV and hepatitis B and C. For example, studies of the felon 
population at the DC Jail have shown HIV infection rates of 8-10 
percent, while the prevalence of HIV infections in the BOP inmate 
population has been steady at 1 percent over the past decade (based 
upon our random seroprevalence studies and clinical observations, we 
can estimatethat our seroconversion rate is extremely low). 
Accordingly, we expect that our health care costs will rise as a result 
of absorbing the DC Code offenders, since treating HIV-infected inmates 
is very expensive; medical care averages $20,000 per year per HIV-
infected inmate, compared to just over $3,200 per year per non-infected 
inmate.
General Accounting Office audit of BOP health care costs
    From July, 1999 to February, 2000, the General Accounting Office 
(GAO) conducted an audit of the BOP's inmate health care costs. GAO 
found that inmate health care costs rose from 1990 to 1996, but 
declined thereafter. In comparison, nationwide health care costs rose 
continuously from 1990 to 1998. They further noted that several BOP 
health care cost-containment initiatives are beginning to produce 
savings.
    GAO also highlighted the BOP's support for two legislative 
initiatives that could improve inmate health by increasing efficiency 
and potentially reducing medical costs, while maintaining the quality 
of inmate health care. First, H.R. 1349 and S. 704 are companion bills 
that provide the BOP the authority to charge non-indigent inmates a 
minimal copayment fee for health care visits. These bills seek to 
decrease health care visits scheduled by inmates who do not have 
genuine medical concerns, but sign up for ``sick call'' to avoid 
required activities (e.g., work assignments, education classes). The 
Department strongly supports these bills, and believes they would 
provide a significant tool to assist BOP medical staff to more 
appropriately spend time evaluating and treating inmates with 
legitimate medical needs. Additionally, we believe these bills would 
further our efforts to help inmates understand the importance of 
personal responsibility.
    A Medicare rate-based cap on payments to hospitals that treat 
federal inmates, similar to that already granted to the Department of 
Defense and the Department of Veterans Affairs, might produce 
substantial health care savings without decreasing the quality of 
health care inmates receive. Our analysis of a small sample of BOP 
inmate health care billings to outside hospitals revealed that the 
Medicare rate cap provision would have saved the BOP almost 50 percent 
of the total hospital bills included in the sample.
                          inmate telephone use
    From February, 1998 to August, 1999, the Office of the Inspector 
General (OIG) conducted an audit of the BOP's inmate telephone system 
(the results of the audit were published in a report entitled 
``Criminal Calls: A Review of the Bureau of Prisons' Management of 
Inmate Telephone Privileges''). The report identified some significant 
problems that have occurred over the years with inmates abusing their 
phone privileges. We have been working diligently to improve both the 
inmate telephone system and our monitoring to address the shortcomings 
in the program. The systems in place today are significantly better 
than in past years. The systems and operating procedures, and 
monitoring capabilities planned for the future are the best available 
in the field of corrections, and I believe the BOP has repeatedly 
assumed a national leadership role in the development of inmate 
telephone monitoring hardware, software, and investigative strategies.
    The BOP recognizes the importance of inmates maintaining close 
family ties, through visits, written correspondence, or telephone 
calls, in order to assist with their successful reentry to society 
following release from prison. Unlike many smaller state correctional 
systems that generally house inmates relatively close to home, the 
federal system must sometimes house inmates far from their families. As 
a result, social visits may occur less frequently, greatly increasing 
the importance of inmate telephone contact with family members. The BOP 
has provided inmates with access to collect call telephones for many 
years, and as a matter of security we have recorded all non-attorney 
calls and have randomly monitored non-attorney conversations. However, 
as our population has grown dramatically since the late-1980's, our 
traditional mechanisms to prevent inmate telephone abuses have been 
outpaced by population growth. Therefore, we have had to turn to new 
and improved technologies to prevent abuses.
    As part of our technological advancement, in the early 1990s the 
BOP began developing a new telephone system that would provide inmates 
with debit calling and would enhance our monitoring capacity. While 
implementation of these technological advances has been delayed by 
litigation and contracting difficulties, we are now making substantial 
progress installing our most recent generation debit calling telephone 
system (ITS-II), and we hoe to have it installed in all federal prisons 
by November 2000. This new system will allow the BOP tosignificantly 
increase control of every inmate's calling privileges. The system can 
provide staff with numerous reports to assist in monitoring inmates and 
determine which inmates may be attempting to abuse telephone 
privileges. Additionally, the system links together all BOP facilities 
for information sharing among staff about inmate phone usage, and makes 
this information readily available to our headquarters.
    In the OIG report, it was recommended that the BOP make changes in 
four broad areas: increased telephone monitoring, increased discipline 
of telephone abusers, proactive telephone restrictions for certain 
inmates, and detection and deterrence of inmate use of telephones for 
criminal activity involving the community. We have taken actions in all 
of these areas.
     We are revising training protocols and tracking systems to 
enhance proactive monitoring of inmate telephone calls. This will allow 
us to increase surveillance of inmates who are more likely to abuse the 
telephones and to better understand some of their often coded 
conversations. We have established a target date of June 30, 2000, for 
implementation of this initiative.
     We are developing a national contract to install state-of-
the-art recording equipment in our institutions, and we are reviewing 
the potential for use of technologies that enhance detection of three-
way calling and other prohibited practices. We are conducting a pilot 
test of new technology and anticipate completion and assessment of the 
pilot data by December 31, 2000.
     On December 1, 1999, we modified our institution 
misconduct policy to reflect new offense codes for engaging in coded 
conversations, with loss of telephone privileges as one of the 
available sanctions. However, prior to implementation of these changes, 
our union (AFGE) notified us that, in accordance with the Master 
Agreement, they intend to negotiate this policy change. We are unable 
to provide a target date at this time, but we are hopeful these changes 
can be implemented very soon.
     On January 5, 2000, the BOP implemented the recommendation 
to use the Security Threat Group (STG) ``telephone abuse'' category 
more frequently and set better standards for its use. This will allow 
BOP staff to increase and enhance overall institution monitoring of 
targeted inmates.
     We have modified our inmate classification procedures to 
permit proactive restrictions upon inmate telephone privileges.
                               conclusion
    I am very proud of the BOP staff and the job they do each and every 
day. Despite our record setting population growth, evidenced by the net 
increase of 1,800 new inmates in the BOP last month alone, we see 
indications of our effective prison management. For example, over the 
past 5 years we have had substantial decreases in both inmate suicides 
and inmate misconduct, including assaults. However, such successes 
cannot be expected to continue in the face of the dramatic population 
increases and record setting overcrowding we project will occur in the 
next several years. Without the resources we have requested to bring 
additional bed space capacity on line, our record of service may be in 
jeopardy.
    The BOP's mission involves myriad program and policy issues; today 
I have touched on just a few key topics. I'd like to thank you, Mr. 
Chairman. and Members of the Subcommittee for the opportunity to 
provide an update on the operations of the Bureau of Prisons. This 
concludes my prepared remarks, and I would be pleased to answer any 
questions you may have.
    Senator Thurmond. Our next witness is Richard Stana, Associate 
Director for Administration of Justice Issues at the General Accounting 
Office. Mr. Stana, who has been with the GAO for 24 years, has a 
master's degree from Kent State University. He will present the 
findings of GAO regarding containing health care costs for an 
increasing inmate population.
    Our final witness is Glenn Fine, Director of the Special 
Investigations and Review Unit of the Justice Department's Office of 
Inspector General. He has been with the IG's office for 5 years and 
received an undergraduate and a law degree from Harvard. He will 
discuss the IG report, Criminal Calls: A Review of the Bureau of 
Prisons' Management of Inmate Telephone Privileges.
    I would ask that you please limit your opening statements to no 
more than 5 minutes. Your written testimony will be placed in the 
record, without objection.
    We will start with Mr. Stana.

   PANEL CONSISTING OF RICHARD M. STANA, ASSOCIATE DIRECTOR, 
ADMINISTRATION OF JUSTICE ISSUES, GENERAL GOVERNMENT DIVISION, 
 U.S. GENERAL ACCOUNTING OFFICE, WASHINGTON, DC; AND GLENN A. 
FINE, DIRECTOR, SPECIAL INVESTIGATIONS AND REVIEW UNIT, OFFICE 
     OF THE INSPECTOR GENERAL, U.S. DEPARTMENT OF JUSTICE, 
                         WASHINGTON, DC

                 STATEMENT OF RICHARD M. STANA

    Mr. Stana. Thank you, Mr. Chairman. I am pleased to be here 
today to discuss the results of our review which we did at your 
request of the Bureau of Prisons' efforts to contain rising 
inmate health care costs.
    As you know, the inmate population in the Federal prison 
system is growing at a dramatic rate. Over the last 3 years, 
roughly 1,000 inmates were added to the Federal prison 
population each month, and BOP projects it will have almost 
200,000 inmates by fiscal year-end 2006. That is about 50 
percent more than it has today. This population growth----
    Senator Thurmond. Did you say 1,000 a month?
    Mr. Stana. One thousand a month.
    Senator Thurmond. Increase?
    Mr. Stana. Yes, sir.
    This population growth, along with the effect of mandatory 
minimum sentencing for drug-related crimes and the aging of the 
inmate population, has placed unprecedented demands on BOP's 
health care system. My prepared statement discusses in detail 
the trends in BOP's health care costs, the various initiatives 
BOP has undertaken to address these trends, and some options 
for controlling rising costs.
    In my oral statement, I would like to highlight two main 
points. First, BOP's overall health care costs are on the rise 
on an overall basis. They increased by about 170 percent during 
the 1990's. Population increases aside, the three major cost 
drivers are salaries of BOP medical personnel, the cost of 
community hospital services, and salaries and relocation 
expenses of Public Health Service personnel.
    However, BOP health care costs look much differently when 
analyzed on a per-capita basis rather than an overall basis. 
Adjusted for inflation, per-capita costs rose steadily, from 
about $3,000 in 1990 to a high of about $3,700 in fiscal year 
1996, then decreased these past 3 years to about $3,250 per 
inmate in fiscal 1999. In contrast, the nation's per-capita 
health care costs rose continuously during the 1990's, to about 
$4,140 per capita in 1999.
    In part, this recent downward trend is a result of many 
cost containment initiatives that Director Sawyer mentioned in 
her statement. Among these are medical staffing restructuring, 
obtaining discounts through quantity or bulk purchases, 
leveraging resources through cooperative efforts with other 
Government entities, centrally pre-certifying inmates for 
surgery before they are sent to community hospitals, using 
telemedicine, and even privatizing services at selected 
facilities. Collectively, BOP reports that these initiatives 
are saving millions of dollars each year.
    My other point focuses on the next steps toward controlling 
BOP's health care costs. Two of these steps are embodied in 
legislative provisions. One provision would authorize the 
Director of BOP to assess and collect a fee of not less than $2 
for certain health care visits requested by an inmate. CBO 
estimates this provision would generate annual revenues of 
about $1 billion, but by law these revenues would go to the 
victims of crime and not to BOP. Rather than being a revenue 
generator, the value to BOP is to reduce the number of 
unnecessary medical visits and free up limited resources for 
the inmates who need them the most.
    The second legislative provision would allow BOP to emulate 
Medicare's prospective payment rates which vary with each 
hospital. These Medicare rates would become a cap to BOP's 
payments to community hospitals for services provided. This is 
significant because about one-fourth of BOP's total health care 
costs are for contracted services with community hospitals. CBO 
estimates that this provision would save BOP about $6 million 
annually. We believe that both legislative provisions would be 
helpful to BOP's efforts to control medical costs.
    Another step is one BOP could take without legislative 
action. Given its increasing reliance on community hospitals, 
BOP needs to negotiate more cost-effective contracts. BOP's 
South Central Region recently began using an innovative 
approach called benchmarking to identify best value among 
competing proposed contracts.
    Specifically, the region required bidders to use a common 
or standard benchmark rate--that is, the Medicare Federal 
rate--and to separately show a proposed percentage markup or 
discount to that benchmark rate. This not only makes it easier 
to compare bids, but it also allows for more accurate payment 
for services rendered.
    According to regional office contracting officials, if the 
benchmarking approach were applied to all contracts in the 
South Central Region, the estimated savings would be about $5.6 
million annually in this one region alone. We are recommending 
that BOP take steps to test the benchmarking approach in other 
regions and, if the test validates its cost-effectiveness, 
implement it BOP-wide.
    Mr. Chairman, this concludes my oral statement. I would be 
happy to answer any questions you have.
    Senator Thurmond. Mr. Stana, your report shows thatthe 
Bureau of Prisons is saving money with its private contract with the 
local medical university in Beaumont, Texas. Do you think it could be 
beneficial in the future for the Bureau to look for partnerships with 
other teaching medical centers as a way to control costs?
    Mr. Stana. Well, there is a lot of merit in this proposal. 
They are saving about $4 per inmate per day on this contract, 
but I also ought to say at the same time that it is not clear 
that this contract and the costs that are connected with it 
would necessarily be able to be duplicated in other locations, 
for a number of reasons.
    The long-term care is passed on to BOP and the contractor 
himself has said that they could no longer do it for this 
amount of money. So while the concept is a good one, I am not 
so sure that the exact features of the Beaumont contract could 
be duplicated.
    Senator Thurmond. Excuse me. I want Mr. Fine to make his 
opening statement.
    [The prepared statement of Mr. Stana follows:]
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                   STATEMENT OF GLENN A. FINE

    Mr. Fine. Mr. Chairman, Senator Sessions, thank you for 
inviting me to testify before the subcommittee about a special 
investigation conducted by the Department of Justice Office of 
the Inspector General regarding telephone abuse by Federal 
prison inmates.
    My name is Glenn Fine and I am the Director of the Special 
Investigations and Review Unit, the unit of the Office of the 
Inspector General which conducts sensitive or complex 
investigations of Department programs and personnel.
    In August 1999, we issued a special report entitled 
``Criminal Calls: A Review of the Bureau of Prisons' Management 
of Inmate Telephone Privileges.'' This special investigation 
attempted to identify the scope of the problem of telephone 
abuse by Federal prison inmates, look at the Bureau of Prisons' 
response to that problem, and offer recommendations to address 
the issue.
    The review was conceived of and conducted by a team of OIG 
employees, led by an OIG attorney, Tamara Kessler, an OIG 
inspector, Adrian Flave, and an OIG investigator, Jeff Long. 
Our 122-page report, which has been provided to the 
subcommittee and which is available on our Web site, contains a 
detailed description of our findings.
    Because my written statement has been submitted and will be 
admitted to the record, I will briefly try and describe our 
report, the structure of our review, the major findings of our 
review, and the recommendations that we made.
    At the outset of the review, we attempted to determine the 
scope of the problem. However, we quickly learned that the 
Bureau of Prisons had little information on this issue. Neither 
BOP headquarters nor Bureau of Prisons facilities throughout 
the country keep statistics on cases in which Federal prison 
inmates are accused of committing crimes from prison using 
telephones.
    We therefore attempted to independently assess this problem 
by sending out questionnaires to 94 U.S. attorneys' offices, to 
the FBI, and to the DEA asking them to identify prosecutions 
and investigations they had conducted involving Federal 
inmates' use of telephones. We also surveyed BOP facilities and 
conducted site visits of nine BOP facilities to interview the 
staff that was responsible for monitoring inmate calls and to 
ask them about the pattern of inmate calls.
    In addition, we examined some high-profile prosecutions of 
inmates who had been convicted of committing crimes using 
prison telephones. We also interviewed one inmate, Rayful 
Edmond, a notorious drug dealer who had been convicted of drug 
trafficking both outside prison and inside prison, to ask him 
about his experience using the telephones.
    What did we find? Well, our surveys, case examinations, 
document reviews and interviews painted a very troubling 
picture of the scope and seriousness of the problem of Federal 
inmates using prison telephones to engage in criminal activity 
We believed that it was a significant problem.
    For example, responses to our survey to the U.S. attorneys' 
offices revealed over 100 cases in which they had prosecuted 
Federal inmates for committing crimes behind bars using prison 
telephones, and in approximately 10 of them there were murder 
cases, there were drug trafficking cases, there were fraud 
cases. We also found additional investigations by the FBI and 
the DEA, and in few of these cases was the criminal activity 
detected by the Bureau of Prisons.
    FBI agents and Federal prosecutors whom we interviewed also 
told us that they believed that the BOP made insufficient 
effort to target telephone calls and to refer the evidence of 
criminal conduct for investigation. Many of the BOP monitors 
and employees we talked to believed that a significant 
percentage of the calls made by inmates were not for legitimate 
purposes, such as maintaining ties to their family and 
community, but were for illegitimate purposes.
    We also found that very few of the calls that were made 
were monitored. Virtually every call made by a prison inmate is 
taped, but less than 4 percent of them, only about 3.5 percent 
of them, are ever listened to by Bureau of Prisons officers or 
monitors.
    Another finding was that we found during our site visits 
that the BOP staff that was responsible for monitoring 
telephone calls was insufficiently trained, and that monitoring 
equipment often was not working. We saw that some officers who 
were assigned the duties of monitoring as collateral duties 
performed their duties in a perfunctory way and not 
sufficiently.
    In our case studies, we saw many cases in which prison 
inmates who had been convicted of using prison telephones to 
commit crimes were not targeted even after they had been 
convicted for monitoring and still enjoyed full telephone 
privileges, and that was despite some calls and requests by 
prosecutors or judges to keep track of these inmates. Rayful 
Edmond was one of them. He told us that, in his experience, he 
used the telephones virtually every day--he called on it all 
day long--to arrange drug deals outside of prison; that he on 
50 or 60 occasions used telephones to have drugs introduced in 
prisons. He participated in telephone conference calls to 
Colombia.
    And, Senator Thurmond, that is Colombia, South America, you 
will be glad to know, not Columbia, SC.
    Senator Thurmond. I hope so.
    Mr. Fine. He said he knew that most of his calls were not 
listened to and he didn't fear that any restrictions would be 
placed on him even if he were found out. He had little concern 
about that.
    Based on our review, we made recommendations to deal with 
this issue in four areas. First, we said and we recommended 
that the BOP should increase the percentage of inmate telephone 
calls it monitors if it expects to make any headway in the 
problem of inmate telephone abuse.

    Second, we believe that the BOP should more consistently 
discipline telephone abusers. Third, the BOP should restrict 
and target telephone privileges proactively for those inmates 
who have a history of telephone abuse or a likelihood of 
telephone abuse. And, fourth, the BOP should emphasize the 
responsibility of its officers to detect and deter crimes by 
inmates using telephones.
    In response to our report, the BOP has acknowledged its 
shortcomings and has stated that it is working diligently to 
improve its monitoring program. The Director told you that, and 
we have seen a response by them. However, to determine whether 
the changes in the BOP procedures have been effective to 
adequately address these issues, we plan to conduct a 1-year-
after review, approximately 1 year after we completed our 
initial report, to review the Bureau of Prisons procedures and 
the changes that it made to determine whether they are 
effective in protecting the public and to correcting inmate 
telephone abuse.
    In conclusion, Mr. Chairman and Senator Sessions, 
permitting inmates access to prison telephones and protecting 
the public against crimes facilitated through the use of prison 
telephones present a complex balancing of interests. The BOP 
has told us that its main mission of its monitoring program was 
to detect internal activity that could undermine the security 
of its institutions. It has also told us that it wants to allow 
prison telephone calls to promote ties to the family and 
community of the inmates. Those are both critical and 
legitimate objectives.
    We also believe, however, that it is critical that the BOP 
focus on preventing inmates from using prison telephones to 
commit crimes outside of prison that affect those outside the 
institution as well. We believe that the BOP should 
aggressively implement changes such as the ones we recommended 
to address the serious problem of inmate telephone abuse.
    That concludes my oral testimony and I would be glad to 
answer any questions that you have.
    [The prepared statement of Mr. Fine follows:]

                  Prepared Statement of Glenn A. Fine

    Mr. Chairman, Senator Schumer, and Members of the Subcommittee on 
Criminal Justice Oversight:
                            i. introduction
    I appreciate the opportunity to appear before the Subcommittee to 
discuss the work of the Office of the Inspector General (OIG) with 
respect to our oversight of the Federal Bureau of Prisons (BOP). 
Specifically, I appear before this panel today to discuss a special 
investigation conducted by the OIG and issued in August 1999 entitled, 
``Criminal Calls: A Review of The Bureau of Prisons' Management of 
Inmate Telephone Privileges.'' This special review sought to identify 
the scope of the problem of telephone abuse by BOP inmates, assess the 
BOP's response to the problem, and offer recommendations to address 
this serious issue.
    Telephone privileges for BOP inmates have increased dramatically 
since the 1970s when inmates were permitted one telephone call every 
three months and that call was placed by BOP staff. Now, most BOP 
inmates are allowed to make as many telephone calls as they are able to 
pay for or as many collect calls as people outside prison will accept. 
The BOP provides inmates access to telephones on the grounds that it 
furthers important correctional objectives, such as maintaining 
inmates' ties to their families. However, BOP's responsibilities extend 
beyond those objectives. Permitting inmates virtually unlimited access 
to telephones comes at the cost of allowing inmates the ability to 
commit serious criminal activity using prison telephones. Often those 
crimes extend beyond the prison. Even though the BOP records all inmate 
calls, except prearranged calls between inmates and their attorneys, we 
found that the BOP listens to few such calls--approximately 3.5 percent 
of the tens of thousands of calls made daily by federal inmates.
    Our review found that federal inmates using prison telephones to 
commit serious crimes while incarcerated--including murder, drug 
trafficking, and fraud--is a significant problem. Although the BOP has 
been aware of the problem for many years, we concluded that it had 
taken insufficient steps to address the abuse of prison telephones by 
inmates. The BOP failed to respond adequately, partly because of the 
fear of litigation if it made changes to inmate telephone privileges, 
partly because of its misplaced reliance that new technology will 
provide solutions, and partly because of its apparent belief that 
inmates primarily use the telephone to maintain family relationships 
and community ties.
    We concluded that the BOP needs to squarely address what appears to 
be significant inmate abuse of prison telephones and take immediate and 
meaningful actions to correct the problem. Technology alone will not 
solve the problem of inmate telephone abuse without aggressive 
intervention by BOP officials. We believe that unless the BOP places 
some meaningful restrictions on inmate telephone privileges, steps up 
its monitoring of inmate calls, disciplines telephone abuses more 
consistently, and devotes more effort to detecting and deterring prison 
telephone abuse, the significant problem of inmates using prison 
telephones to commit crimes will persist.
                           ii. the oig review
    At the outset of our review, we attempted to determine the scope of 
the problem of inmates' abuse of prison telephones. However, we learned 
that the BOP had a paucity of information on this issue. Neither BOP 
headquarters in Washington, D.C., nor BOP facilities across the country 
keep statistics of cases in which inmates are accused of committing 
crimes from prison using the telephone. Although the BOP maintains 
statistics on violations of prison regulations, this data is not 
sufficiently specific to identify which cases involve the use of 
telephones. Several BOP officials acknowledged to us that their limited 
statistics do not represent the overall number of telephone violations 
because many violations are resolved informally or not pursued 
administratively when criminal charges are brought.
    Given the limited information available from the BOP, we attempted 
to independently identify the scope of inmate telephone abuse through a 
questionnaire we sent to all 94 United States Attorneys' Offices 
(USAOs). In the questionnaire, we asked the USAOs to identify any cases 
they prosecuted involving crimes committed by inmates using telephones 
in BOP facilities. We sent a similar questionnaire to the Federal 
Bureau of Investigation (FBI) and Drug Enforcement Administration (DEA) 
headquarters, for distribution to all FBI and DEA field offices, asking 
them to identify investigations they conducted involving federal 
inmates' use of prison telephones to commit crimes. In response to our 
requests, we received information from 72 USAOs, 16 FBI field offices, 
and 11 DEA field offices. Because these organizations do not index 
cases according to whether they took place in prison or involved the 
use of telephones, their responses to our questionnaires were based on 
the recollection of the people who filled them out rather than on any 
comprehensive statistical review, and they undoubtedly do not represent 
the total universe of such cases.
    We also sent a questionnaire to the 66 BOP facilities that use the 
Inmate Telephone System (ITS), a telephone system employed by the BOP 
that can store and analyze data about inmate telephone calls better 
than the older telephone system used in 27 other BOP facilities. In 
this survey, we sought information about the volume of inmate calls and 
each institution's monitoring practices, staffing, equipment, and other 
policies related to the detection of telephone abuse by inmates.
    We also visited nine BOP facilities to interview staff responsible 
for the institution's security and inmate telephone monitoring 
operations. These nine facilities represent institutions with different 
security levels and different physical layouts, two factors that affect 
the methods of monitoring the use of prison telephones. We visited four 
penitentiaries, three medium-security facilities, and two low-security 
institutions.
    In addition, we examined prosecutions of several high-profile 
inmates who were convicted of committing crimes from inside a BOP 
facility. We looked at these cases to determine what steps, if any, the 
BOP had taken to prevent these inmates from using the telephones to 
continue their criminal activities while they were incarcerated. We 
also interviewed one of these inmates, Rayful Edmond III, about his 
experience using prison telephones to commit crimes.
    In total, we interviewed more than 70 BOP employees and 
approximately 20 other persons in the Department of Justice. We 
examined numerous documents, including BOP program statements on inmate 
telephone usage, the case law on inmate rights to telephone access, and 
the litigation and settlement agreement in a large class action lawsuit 
brought by inmates against BOP regarding the telephone system.
                             iii. findings
    Our interviews, case examinations, data collection, and document 
review paint a troubling picture of the scope and seriousness of inmate 
use of prison telephones to engage in criminal activity. Our 122-page 
report, which has been provided to the Subcommittee and which is also 
available on the OIG's website at ``www.usdoj.gov/oig,'' contains a 
detailed description of our findings. For purpose of this statement, I 
will summarize our major findings.
    We determined that inmate abuse of prison telephones appears to be 
significant. For example, responses to our survey to the USAOs revealed 
more than 100 cases recently prosecuted by those offices involving 
inmates' use of prison telephones to commit criminal acts. Eleven of 
these cases involved prosecutions for murder or attempted murder 
arranged by inmates over prison telephones. In one case, an inmate used 
prison telephones to attempt to arrange the murder of two witnesses and 
a judge and to pay for the execution with illegal firearms. One inmate 
directed a fraudulent employment matching service scheme using prison 
telephones that involved approximately $1.6 million. Another inmate 
used prison telephones to swindle trucking companies out of more than 
$100,000.
    The FBI field offices that responded to our questionnaire reported 
that they conducted 44 investigations between 1996 and 1998 involving 
prison inmates using telephones to commit crimes. The DEA reported 
investigating 12 cases at BOP facilities in the recent past in which 
federal inmates had used prison telephones to commit crimes. In none of 
the DEA cases was the criminal activity detected by the BOP.
    FBI agents who handled many cases of prison crimes told us that 
they believed that the BOP makes little effort to target inmate 
telephone calls and to refer evidence of criminal conduct to the FBI 
for investigation. Similarly, a federal prosecutor from the Los Angeles 
USAO, who works mostly on prosecutions involving crime in prisons, said 
that the prison telephones to commit crimes is rarely detected by the 
BOP.
    Rayful Edmond, a notorious Washington D.C. drug dealer who used 
prison telephones at USP Lewisburg to run an international drug 
organization, told the OIG that he talked on the telephone ``all day 
long'' and made arrangements for drug deals on the telephone almost 
every day, including participating in conference calls to Columbia. He 
estimated that he arranged to have drugs brought into prison 50 or 60 
times. He claimed that almost half of Lewisburg inmates were involved 
in bringing drugs into the institution and that most of these drug 
deals were arranged over prison telephones. Edmond said that he has 
little concern about conducting drug deals using prison telephones 
because he knew that most calls were not being monitored. He said he 
also believed that even if he were caught abusing his telephones 
privileges, at worst he would receive a light punishment or a 
restriction of his privileges for a short period of time.
    Our survey determined that most inmate calls from prison are never 
listened to by BOP employees. Only 3.5 percent of the tens of thousands 
of calls made every day from BOP facilities were monitored. Our survey 
also found that even though inmate telephones wereavailable an average 
of 18 hours per day, the institutions had staff assigned to listen to 
telephone calls an average of only 14 hours on weekdays and 12 hours on 
weekends. Our survey also indicated that 16 of the 66 BOP institutions 
using ITS assign staff to listen to inmate telephone calls less than 50 
percent of the time that the telephones are operational. While all 
calls are recorded and can be listened to later, we found that this 
occurred rarely.
    Some inmates use prison telephones excessively. Fifteen inmates at 
the nine institutions we visited spent more than 66 hours each on the 
telephone during a one-month period. This equates to more than two 
hours per day, on average, that these inmates spent talking on the 
telephone. However, none of the institutions had done anything about 
this excessive telephone use or was even aware of it.
    During our visits to the nine institutions, we also found that the 
BOP staff responsible for monitoring inmate telephone calls were not 
sufficiently trained on the telephone monitoring equipment or 
monitoring procedures. For example, we did not talk to any telephone 
monitor who had received anything other than on-the-job training. We 
found no BOP telephone monitors who had received formal instruction on 
the best way to monitor inmate telephone calls; how to recognize 
suspicious activities or coded inmate language; which inmates should be 
monitored; or how to detect three-way calls, which are prohibited under 
BOP regulations. We also found that many BOP facilities make little or 
no effort to monitor telephone use by high-risk inmates. In addition, 
we saw that some correctional officers who are assigned collateral 
duties of monitoring inmate calls do so in a perfunctory way, often 
monitoring fewer calls than they are required by their post orders. 
During our site visits, we also saw that some of the equipment used to 
monitor calls was broken and no one had placed an order for it to be 
repaired.
    In addition to our surveys and site visits, we examined several 
high-profile prosecutions of inmates who were convicted of conducting 
their crimes from inside a BOP facility. We looked at their cases to 
determine the response of the BOP in each case and what, if anything, 
it could have done differently to detect the criminal activity. These 
cases provided stark examples of the BOP's failure to adequately 
monitor inmate telephone use. In addition to the case of Rayful Edmond, 
we reviewed the following cases:
     Anthony Jones, a drug dealer in Baltimore, MD, was 
convicted of being a felon in possession of a firearm and was 
incarcerated at a BOP facility in Allenwood, PA. While incarcerated, 
Jones became aware of an ongoing grand jury investigation into his drug 
activities and used prison telephones to order his associates outside 
prison to murder two witnesses he suspected had testified against him. 
One of the witnesses was killed and the other was shot several times. 
As a result, in May 1998 Jones was convicted of murder and attempted 
murder, and he received a sentence of life imprisonment without parole. 
Yet, even after these convictions, Jones retained full telephone 
privileges and the BOP failed to take any measures to monitor his 
telephone calls. Only after the OIG questioned the BOP about Jones' 
telephone access in connection with this review did the BOP move to 
restrict his telephone privileges in July 1998.
     Jose Naranjo was convicted of conspiracy to distribute 
cocaine in 1979. While serving a 12-year sentence in Otisville, NY, he 
used the prison telephones to participate in a conspiracy to import 
cocaine from Colombia, South America to North Carolina. Even after his 
conviction for that crime, he continued to enjoy full telephone 
privileges. After being transferred to Petersburg, VA, he engaged in 
other conspiracies to distribute cocaine, and in 1995 was again 
convicted of drug distribution offenses that he had committed using 
prison telephones. After Naranjo's sentencing, the federal prosecutor 
wrote to the BOP to urge it to prohibit Naranjo from using prison 
telephones. However, during our review in 1998, we were surprised to 
learn that Naranjo's telephone privileges had been restored and that 
the BOP was making no special effort to monitor his calls.
     Oreste Abbamonte was convicted of using prison telephones 
at Lewisburg, PA, to orchestrate the distribution of multiple kilograms 
of heroin. After this conviction, federal prosecutors wrote a letter to 
the BOP stating that Abbamonte's access to prison telephones had 
enabled him to commit drug crimes while incarcerated. When Abbamonte 
was sentenced, the court specifically recommended that he be confined 
to the BOP's highest security facility with limited telephone 
privileges.
    Despite these recommendations, the BOP placed no restrictions on 
Abbamonte's telephone use, and his drug trafficking using prison 
telephones continued. While in a BOP facility in Leavenworth, KS, 
Abbamonte again used prison telephones to conspire to purchase cocaine, 
and he was convicted in 1992 for this offense. When we reviewed 
Abbamonte's BOP files in 1998, we were again surprised to find that his 
telephone privileges were not limited in any waydespite the 
prosecutor's letter, the court's specific request, and his repeated use 
of the prison telephones to commit crimes.
    Several BOP officials told us they believed that a new generation 
of telephone equipment planned for installation in all BOP institutions 
during the next two years will detect many cases of inmate telephone 
abuse. However, no new technology--including ITS II, the BOP's new 
inmate telephone system--will solve the problem of inmate telephone 
abuse without aggressive intervention by BOP officials. Implementation 
of a new inmate telephone system is not the ``cure all'' that some BOP 
officials apparently are counting on. In fact, given the lack of 
understanding and failure to use some of the security features that 
already exist in the BOP telephone system, the new system could have 
little impact on BOP's efforts to detect telephone abuse by inmates 
unless the BOP makes a more sustained effort to use the new technology 
aggressively to detect and deter telephone abuse.
                          iv. recommendations
    Based on our review, we recommended that the BOP take steps to curb 
prison telephone abuse in four ways. First, the BOP must increase the 
percentage of inmate telephone calls it monitors if it expects to make 
any headway on the problem of inmate telephone abuse. While additional 
resources will be helpful in this regard, because of the high volume of 
inmate calls the only realistic solution is to reduce the number of 
calls so that BOP staff assigned to this task can monitor a greater 
percentage of calls. Towards this end, we made various recommendations, 
including that the BOP impose limits on all inmates' telephone 
privileges, set a significantly higher goal for monitoring inmate calls 
and then calculate the resources needed to meet this goal, have 
telephone monitors on duty at all times that prison telephones are 
available to inmates, do a better job identifying inmates with a high 
probability of abusing their telephone privileges, and institute a plan 
to monitor these inmates' calls proactively.
    Second, the BOP must increase and more consistently discipline 
telephone abusers. During our review, we found various cases in which 
inmates retained full telephone privileges even after they were 
convicted of a crime involving use of prison telephones. We recommend 
that the BOP develop and enforce policies to ensure that administrative 
action is quickly taken against inmates who abuse their telephone 
privileges, particularly those inmates convicted of crimes stemming 
from their use of prison telephones. The BOP also should develop and 
implement policies that mandate restriction of telephone privileges as 
the preferred sanction for inmate telephone abuse. Subsequent 
violations of BOP telephone policies should result in increased 
sanctions that include loss of all telephone privileges. Inmates who 
commit crimes using prison telephones also should have their privileges 
revoked.
    Third, the BOP should restrict telephone privileges proactively for 
inmates who have a history of telephone abuse or a likelihood of abuse. 
This would mean that some inmates simply would not have telephone 
privileges because of their previous behavior using the telephones in 
prison. As an additional safeguard to deter potential criminal conduct, 
the Department of Justice should educate prosecutors about the 
availability of court orders restricting an inmate's telephone 
privileges in racketeering and drug cases. The Department also should 
consider seeking legislation to permit similar court orders in all 
cases in which the government can make a showing that the defendant 
should not be entitled to telephone privileges because of a prior 
history of telephone abuse.
    Moreover, the Department should emphasize to USAOs the need to 
inform BOP of inmates who pose special risks of committing serious 
crimes while incarcerated, as outlined in a letter from the Attorney 
General on May 7, 1998. As of the fall of 1998, the BOP had received 
only two such notifications. These notifications are critical because 
they fill gaps in BOPs' knowledge about the inmates' history and put 
the BOP on notice of the risk posed by certain inmates. In light of the 
BOP's failure to properly monitor high-risk inmates after either court 
order or notice from prosecutors, we recommend that a reporting system 
be established to assure USAOs that the BOP has taken proper measures 
after such a notification.
    Fourth, the BOP should emphasize the responsibility of its officers 
to detect and deter crimes by inmates using BOP phones. Our review 
found that Special Investigator Supervisor (SIS) officers at BOP 
institutions spend far too little time detecting and deterring criminal 
conduct committed by inmates using prison telephones. The SIS's mission 
should be expanded to include a more substantial focus on the detection 
of crimes by inmates in BOP custody. This could be accomplished through 
additional training for SIS staff, greater communication between the 
SIS and other law enforcement agencies, and better intelligence-
gathering on inmates. In addition, the BOP should revise its procedures 
to require SIS staff to ensure that the numbers listed on an inmate's 
telephone calling list are investigated prior to approval of those 
lists, especially with high-risk inmates.
                        v. oig follow-up review
    In response to our report, the BOP acknowledged the shortcomings of 
its telephone monitoring efforts and stated that it has been working 
diligently to improve its monitoring program. However, the BOP 
contested whether there was widespread abuse of prison telephones by 
inmates, arguing that the 100-plus cases of inmates recently prosecuted 
for telephone abuse cited in the OIG report were only a small 
percentage of the total number of inmates in BOP custody. We found this 
argument unconvincing. Our surveys identified serious cases of criminal 
activities. In addition, our interviews of BOP correctional officers, 
law enforcement officers, prosecutors, and Rayful Edmond, as well as 
our case studies of how the BOP failed to monitor the telephone calls 
of inmates who had been convicted of committing serious crimes with 
prison telephones, indicate that the problem is significant. Moreover, 
we believe that the absence of reported cases is attributable, in large 
measure, to the fact that the BOP does not monitor prison calls 
adequately and does not even compile statistics on prison telephone 
abuse. As a result, the reported cases we collected in our survey 
appear to be, as one FBI agent who investigated such cases phrased it, 
``the tip of the iceberg.''
    In its response the BOP concurred with many of the reform 
recommendations we made, including imposing limits on telephone 
privileges. It disagreed with several of the recommendations, however, 
such as whether the BOP should monitor a higher percentage of inmate 
calls, whether there should be a telephone monitor on duty at all times 
prison telephones are available to inmates, or whether SIS officers 
should focus more of their attention on the detection of crimes by 
inmates in BOP custody.
    To determine whether the BOP's procedures and proposed changes in 
response to our report adequately address these issues, the OIG plans 
to conduct a ``year-later'' follow-up review of the BOP's management of 
inmate telephone privileges. We intend to use a variety of techniques, 
including surveys, interviews, site visits, data analysis, and document 
review, to assess whether BOP has made improvements in its efforts to 
curb inmates' abuse of telephone privileges.
    In conclusion, permitting inmates access to prison telephones and 
protecting the public against crimes facilitated through use of prison 
telephones present a complex balancing of interests. Our review 
highlighted the serious nature of inmate abuse of prison telephones, 
including murders and drug deals arranged using BOP telephones. Our 
review also led us to conclude that the current inmate call monitoring 
system is ineffective. Our interviews of telephone monitors left us 
with the impression that they are overwhelmed and not adequately 
trained. The low number of crimes or administrative violations detected 
and the high number of crimes likely being committed should indicate to 
the BOP that major changes are needed. We believe that, in light of our 
report, the BOP should aggressively implement changes to address the 
serious problem of inmate telephone abuse.
    Senator Thurmond. Senator Sessions.
    Senator Sessions. Thank you, Mr. Chairman.
    Well, on the telephones, do the Federal prisons themselves 
make a profit by selling the phone to a private contractor, and 
do they have an incentive to allow more calls to be made? That 
was true in Alabama prisons, I know, and actually they were 
paying for it because the prisoners had to call collect to 
their mama or their wife, who didn't have the money to pay for 
the calls. But they couldn't turn them down when they called 
collect and ended up with big fees, higher than normal 
telephone fees, and the contractors and the prison both were 
making money off of the deal.
    Mr. Fine. Senator Sessions, in this case the contractor and 
the Bureau of Prisons do get a share of the profits that are 
made from inmate telephone calls. I think the problems in the 
State institutions that I have read about are significantly 
different in that there are exorbitant rates charged to inmates 
using the telephones.
    In the Bureau of Prisons, the rates that are charged are 
approximately 15 to 31 cents for debit calls. For local calls, 
it is 50 cents, a flat fee, and for collect calls it is the 
standard collect charge, whatever that may be. A portion of the 
profits go to the contractor and a significant portion of the 
profits do go to the Bureau of Prisons.
    Senator Sessions. So the more calls that are made, the more 
they make. What do they use that for the coffee fund or----
    Mr. Fine. Well, they use that for the inmate trust fund. 
There is currently an issue whether they can use that money to 
monitor telephone calls. The money that is used has to go in 
the inmate trust fund for the benefit of the inmates, and there 
is an open question whether that could be applied to monitoring 
efforts. We believe that it should be, and there may be sort of 
a need for clarifying legislation to make it clear to the 
Bureau of Prisons that they can use that money to more 
proactively and aggressively monitor the inmates' calls.
    Senator Sessions. Well, several of the former public 
officials or public officials who were involved in this are now 
themselves in the bastille in Alabama for these manipulations 
of telephone toll calls. And I thought it was really bad. Some 
of that investigation began when I was attorney general.
    Do you think that the fact that the prison makes some money 
out of it could cause them to be less aggressive in containing 
the calls?
    Mr. Fine. Well, that is a possibility.
    Senator Sessions. Well, you know, I guess that is the 
answer. My next question is did you have any occasion to 
examine the nature of these contracts to make an opinion about 
the wisdom of those contracts? I thought they were rather 
bizarre because there was big money being made. Once they set 
the system up, the owners sit back in their homes and the money 
just comes in. Every time some prisoner calls their mother 
collect, the chink goes into that cash register of the 
businessman, and I wonder why the Federal prison system 
couldn't run that itself, or get the major phone companies to 
do it.
    Mr. Fine. We did not examine the contracts and the 
arrangements that had been made between the Bureau of Prisons 
and the telephone companies. What we were mostly focusing on in 
this was their efforts to monitor and prevent criminal calls 
from behind bars. We found a significant problem there. But you 
raise a serious issue; there is not question about that.
    Senator Sessions. And is it basically done on a collect 
call basis?
    Mr. Fine. No. It is on a debit basis in most institutions, 
with the option of having collect calls. They can make debit 
calls. They get a phone access code and if they have money in 
their commissary account, they can use that phone access code 
to make a direct debit call. If they don't have sufficient 
money in their commissary account, they can use the phones to 
make collect calls to their families.
    Senator Sessions. One hundred seventeen prosecutions is 
significant of people in prison abusing the phones. One of the 
great prosecutors I have ever known, Broward Segrist, in 
Montgomery, years ago prosecuted some 30 prisoners who were 
using the prison phones to conduct fraud, and I remember him 
telling me, they said, well, you know, it is just worthless; a 
lot of these guys got 20 years in jail. We have got a trial, it 
will be a holiday for them. They get another year and there is 
nothing you can do to them. But he said he felt so strongly 
about it that it was wrong that he was not going to turn away 
and listen to the prison people and the experts who said they 
shouldn't be prosecuted.
    I would assume, based on my personal experience, that a lot 
of cases of significance have not been prosecuted for that very 
reason, and actually gone to trial and been convicted because 
the U.S. attorney's office has a lot of demands on it. It is 
going to prosecute a $1,000 fraud when the guy has already got 
10 more years to serve in jail, and he might escape during the 
prosecution. So it is a burdensome thing to prosecute. So, that 
indicates to me that you have a bigger problem than a lot of 
people would suggest.
    Have you seen any computer fraud? Has there been any access 
by prisoners to computers in a way that has led to fraudulent 
activity?
    Mr. Fine. No, not in this survey. What we did was we 
surveyed the U.S. attorneys' offices, and they did not have--
everyone did not have indexes of these cases and records of 
these cases. What it really was was whoever got our survey from 
memory remembering the cases that involved prison telephones.
    So I agree with you. We believe that those numbers were the 
tip of the iceberg, and the fact that there were that many 
prosecutions indicates that there is much, much more 
criminality going on behind bars and only some of them get 
prosecuted. Of the cases that we were referred, I don't believe 
there were any computer frauds that were noted in response to 
our survey.
    Senator Sessions. I had a neighbor in Mobile, AL, that 
talked to me about receiving--two people I knew in town 
received a call saying their child had been either in an 
accident or arrested, and that this person had been asked to 
call on their behalf and they needed to fax so much money to 
this address. And these people were terrified. They didn't know 
whether their child had been injured or had been arrested. 
Eventually, it turned out to be a prison call scam.
    Is that the kind of thing we are talking about?
    Mr. Fine. That is the kind of thing we are talking about. 
We are talking about those kinds of frauds where prisoners have 
virtually unlimited access to the phone and can commit these 
fraudulent schemes. We saw one case, for example, where there 
was a prisoner behind bars in Federal custody who committed a 
fraud by claiming he was a headhunter, claiming there was an 
employment matching service. Send me some money and I will get 
you a job. The person who sent the money had no idea that they 
were sending money to a prisoner behind bars. That is the kind 
of thing that can happen, and the thing that you just described 
as well.
    Senator Sessions. Well, many of these are quite devious and 
sociopathic, and it is why we have controls on the use of their 
phones.
    Do you uncover any need for legislation, or did you think 
for the most part the problems could be solved by regulations 
within the prison?
    Mr. Fine. We believe for the most part the problem can be 
solved by the Bureau of Prisons by aggressively intervening, by 
aggressively using the technology that they have and monitoring 
inmate calls more aggressively, by restricting the number of 
calls to a reasonable level. We saw some cases where there was 
an absolutely incredible amount of telephone calls being made 
by single prisoners that the Bureau of Prisons was not aware of 
or was not evendoing anything about. So the tools are in place.
    There is a little bit of legislation that we suggested 
around the edges; one, for example, making it clear that the 
Bureau of Prisons can use the profits from the telephone system 
to monitor telephone calls, that that is part of the overall 
system, and that that would be used for the benefit of the 
inmates; that is, providing a secure system could use that 
money.
    In addition, judges can restrict privileges for inmates if 
it is a drug offense or a racketeering offense, and we looked 
into and recommended that there be some consideration of 
expanding the types of crimes where judges can actively 
restrict the privileges of inmates. But in response to your 
question, by and large the tools are there and we have 
recommended that the Bureau of Prisons aggressively use those 
tools.
    Senator Sessions. I would think they ought to look at the 
whole idea of this contracting out this phone business. I am 
not sure that is healthy. Maybe in the early days, only a few 
people knew how to put a system in like that that could work to 
do the collect calls or however they managed it. But I think we 
are probably beyond that now. Mainstream companies probably 
could do it, and it provides an opportunity to create a cash 
cow for a contractor who really is not doing any work. Once he 
gets the system set up, it just basically runs itself and the 
money clinks in every week.
    Mr. Chairman, I did want to ask a little later some 
questions about health care issues, but I have taken too much 
time. I apologize.
    Senator Thurmond. Mr. Stana, do you believe that the 
benchmark contracting initiative and a cap on hospital charges 
at Medicare rates has the potential to significantly help 
contain costs?
    Mr. Stana. Yes, I do, Mr. Chairman. The initiatives that 
are currently being implemented by the Bureau of Prisons have 
been very helpful, but they can only go so far. They have 
gotten the Bureau down to the levels they are from 3 years ago, 
but there is going to be a sort of a diminishing return to how 
much more you can expect from those initiatives.
    Now, what you get with a Medicare cap is you have the 
hospitals using a system that they fully understand. It is the 
Federal system. There are predetermined rates that are set by 
HCFA, with a little bit of room that would be made in the 
legislative proposal for any other special needs brought about 
by taking care of inmates. And you would know exactly what you 
had. You would have more of a basis for confidence that you are 
getting one of the best values for the money.
    With the benchmark, you have something completely 
different. What you have with the benchmark rate is not using 
the Medicare care, per se. You are using the Federal Medicare 
rate, which is the base rate before each individual hospital 
gets to add their own circumstances and cost features into that 
rate, and this is significant.
    Of the five hospitals in the El Paso area, for example, 
there was a 40-percent difference in the Medicare rate among 
the hospitals for the same procedure. So by using the benchmark 
rate, what you are telling the hospitals is this is the rate I 
want you to benchmark your bid at; let me know the percentage 
above that rate or below that rate you are going to bid at. 
Now, both of these rates could be complementary, with the 
Medicare cap being at the upper end and the benchmark rate 
being something perhaps below that, so that they could work in 
tandem.
    Senator Thurmond. Mr. Stana, what do you predict will be 
the primary health care cost issues that the BOP will face in 
the future?
    Mr. Stana. Well, I think there are many issues that they 
face in the future, but I would boil it down to three. The 
first one is contracts. Right now, about a third of their costs 
are made through contracting, and they need to have the 
confidence that they are getting the best possible contracts. 
And we think the Medicare cap and the benchmarking procedure 
would go a long way to making sure that they are getting the 
smart contracting procedures.
    The second thing is caring for special-needs populations. 
Director Sawyer mentioned the problem of the aging inmate 
population. In fact, I just last week visited two Federal 
medical centers in Fort Worth, TX, Carswell for women and Fort 
Worth for men, and what I saw is a number of elderly inmates 
who are not really appropriately placed in the general 
population, but being that there is no intermediary care, were 
placed in the Federal medical center, taking up a hospital bed, 
which is very expensive care.
    Right now, I believe the Bureau estimates that they have 
virtually enough inmates, or will very soon, to open a separate 
facility that would, in essence, be nursing care. And this is a 
challenge that is going to exacerbate as the aging of the 
population proceeds.
    The third thing is pharmaceuticals. They spend a lot of 
money on psychotropic drugs for mentally ill inmates, cocktails 
for HIV inmates. For example, the normal prisoner's health care 
cost is about $3,250. For an AIDS patient, it is about $20,000, 
and the hepatitis drugs the same thing.
    Senator Sessions. Twenty thousand for whom?
    Mr. Stana. Twenty thousand for an AIDS patient.
    Senator Sessions. And $3,500 for----
    Mr. Stana. And $3,250 for the average BOP inmate health 
care cost.
    For hepatitis C, it is $14,000 for medications there, and 
care, for an average hepatitis patient. Again, the average for 
BOP-wide is $3,250.
    Senator Sessions. A year?
    Mr. Stana. A year.
    As times goes on, as you get more and more AIDS patients 
and hepatitis C, which they are just beginning to test for, and 
mentally ill inmates in the system, health care costs are going 
to go up, and we need to be sure that we can get on top of 
these issues.
    Senator Thurmond. Mr. Stana, the Bureau of Prisons is faced 
with a sharply rising prison population which increases 
Government expenses in all areas, including health care costs. 
In this time of growth, is it important for the BOP to make 
cost containment measures a top priority not only in the 
medical care area but other areas as well?
    Mr. Stana. It is critical that they have cost containment 
strategies for all areas of their operations. In the early 
1990's, we did a number of reports dealing with the 
construction program and the population management programs 
that the Bureau had at that time, and that is when we were 
dealing with a population base of about 50 to 60,000 inmates. 
As you know, we are more than double that today.
    I would think that they would focus their cost containment 
areas in a handful of areas where there may be some payback. 
One is reexamining the design capacities, how they are 
designing their prisons to enable the use of double-bunking 
where appropriate instead of having each inmate have a separate 
cell. Of course, you can't do that at the more advanced 
security levels, but at the mediums and below, you may be able 
to take advantage of that in a greater way.
    The second thing is construction costs. When we compared 
construction costs of the Federal prisons to State and local 
prisons a number of years ago, we found that the Federal 
prisons were far more expensive. In part, that is because they 
build a more substantial building, but in part they didn't take 
advantage of common use areas and they gave each inmate, on 
average, more square footage.
    Another area that we would like to reexamine sometime is 
their use of halfway houses. We found a lot of excess capacity 
going unused in the halfway house system, when there were 
inmates that could be appropriately placed there and they could 
be housed there at much less expense.
    Finally, privatization. Of course, we have the Taft 
experiment going now and we don't know how that is faring yet. 
There is not enough experience there, but I think we ought to 
look to the private sector to do more and more just as they are 
doing in the health care system.
    Senator Thurmond. Mr. Fine, what steps has the Bureau taken 
in response to your IG report to make inmate abuses of phone 
privileges more of a priority?
    Mr. Fine. We have been generally pleased with their 
response. They have acknowledged the shortcomings and have 
stated they have diligently attempted to address the issue. 
They are implementing the new inmate telephone system, the new 
technology, at many different institutions. They have told us 
that they have entered many more inmates in categories of 
inmate telephone abuse, and that they will look at them more 
targeted and more proactively.
    They have sent out a monitoring guide to the officers and 
the investigators in the field. They have made the use of coded 
language in telephone calls a more severe disciplinary offense. 
They are attempting to increase the discipline levels for some 
of the offenses. So they have told us they have taken 
significant steps to address the problem of inmate telephone 
abuse.
    What we intend to do, however, is, as I stated before, go 
back in a year after our report to see whether those policy 
changes and procedural changes have had an effect. In the past, 
we have seen a disconnect to some extent from the policies that 
are at the headquarters level to what we saw in the field, and 
we think it is important that those policies are implemented 
throughout the Bureau of Prisons so that they will have the 
intended effect.
    Senator Thurmond. Mr. Fine, at the time of your report 
inmates were provided almost unlimited telephone privileges. 
What restrictions on inmate telephone calls do you think are 
appropriate?
    Mr. Fine. Well, we know that the Bureau of Prisons had a 
wardens' working group a few years ago that looked at this 
issue and suggested that 300 minutes a month would be an 
appropriate restriction. That seems to us to be reasonable. We 
didn't state the exact number of minutes that should be the 
maximum, but we do think that there should be a restriction on 
the number of minutes. Otherwise, the Bureau of Prisons won't 
be able to get a handle on the problem of inmates using the 
telephones excessively and using them excessively to conduct 
criminal activities. So we have recommended to the Bureau of 
Prisons that they look at this issue and put in a reasonable 
restriction such as that.
    Senator Thurmond. Mr. Fine, do you think that the 
settlement that the Department of Justice recently made in the 
Washington v. Reno litigation was more generous for prisoners 
than the law required, and has the settlement deterred efforts 
within BOP to restrict telephone privileges?
    Mr. Fine. It has restricted efforts to some extent. The 
main problem with that settlement agreement, in our view, was 
that the litigation and the settlement agreement delayed the 
implementation of needed changes. It delayed to some extent the 
new technology, the new inmate telephone system, and it also 
has created a mind set within the Bureau of Prisons that they 
are hesitant to make changes in the inmate telephone privileges 
and hesitant to make changes in the current system, when the 
actual settlement agreement, in our belief, wouldn't prevent 
that from happening.
    For example, the settlement agreement states that inmates 
should be allowed 120 minutes of collect calling per month and 
60 minutes of debit calling per month. That, in our view, is 
not an onerous restriction because the wardens' working group 
and sort of in our view, any restriction would be a higher 
level. But that settlement agreement has prevented the BOP from 
looking at this issue and making changes while the settlement 
agreement is in effect, and we think that the fear of 
litigation and the fear of the settlement agreement shouldn't 
hold up the needed changes.
    Senator Thurmond. Mr. Fine, should the Department of 
Justice try to get the court to amend the consent decree on 
terms more favorable to BOP if the decree impedes efforts to 
restrict telephone abuse?
    Mr. Fine. I would say yes. If it does restrict the efforts 
to restrict telephone use, then the Department of Justice 
should clearly look at that settlement agreement. However, in 
our talking to the Federal programs attorneys and the Bureau of 
Prisons attorneys, their view is that the settlement agreement 
would not restrict efforts as long as the Bureau of Prisons 
could make the case, and we believe that they can, that 
restrictions are necessary for the security and good order of 
the institution and to protect the public.
    That is a provision in the settlement agreement, and as 
long as the case can be made and the Bureau of Prisons makes 
that case, the settlement agreement should not restrict their 
efforts to impose significant controls on inmate telephone use.
    Senator Thurmond. Mr. Fine, your report notes that in 1998 
the Attorney General sent a memorandum to U.S. attorneys 
encouraging them to inform the Bureau of Prisons of incoming 
inmates who posed a special risk of committing crimes while in 
prison. Do you think the Department of Justice needs to do more 
to encourage U.S. attorneys to warn BOP about these new 
inmates?
    Mr. Fine. Yes, we do think they should. We think that memo 
was a good step. When that memo was issued in May 1998, we 
looked at it, and in the fall of 1998 there had only been two 
referrals to the Bureau of Prisons to look at inmates who 
exhibited a likelihood of continuing theircriminal activities. 
In August 1999, there were six. We are told currently there has only 
been about 17 referrals. We believe that there should be more 
referrals, and the Department of Justice and both the U.S. attorneys' 
offices as well as the law enforcement agencies should make an effort 
to notify the Bureau of Prisons about inmates of greatest concern.
    Senator Thurmond. Mr. Fine, is it important to limit 
prisoner use of telephones to hours when telephone monitors are 
on duty?
    Mr. Fine. We think that is an important restriction that 
should be made. I know the Bureau of Prisons disagrees with 
that. They believe that monitors should only be on duty at the 
times of the highest usage. The problem we found is that 
although almost all inmate telephone calls are taped, if they 
are not listened to live, they are rarely listened to. And we 
believe that the live monitoring is the most effective 
monitoring that occurs; that the alerts can be noted and 
listened to. And we believe that there should be monitors on 
duty at the time of telephone usage.
    Senator Thurmond. I want to thank you gentlemen for being 
here and for your testimony. I have got another engagement and 
I have got to go.
    Senator, can you take over now?
    Senator Sessions. Yes, I can. Thank you, Mr. Chairman. I 
just have a few questions I would pursue.
    It is difficult to overestimate the problems that come from 
these consent settlements. Every warden, when asked to do 
something about phones, is going to say, well, there is a 
lawsuit and they have got a consent settlement and the judge 
will put me in jail if I do anything. So it is just an excuse 
for doing nothing.
    I really believe that the Bureau of Prisons needs to assert 
the fact that they represent the United States of America with 
regard to housing prisoners, and not lawyers and a judge in a 
back room in a courthouse somewhere trying to monitor the 
telephone system. I really think we have gone too far on that, 
and I hope that out of this will come a determination to 
conduct reform across the board.
    Mr. Stana, with regard to the aging population, I assume 
that was not part of your analysis precisely, but anecdotally 
or otherwise did you form any opinions or develop any concerns 
about increasing health care costs coming from an aging prison 
population?
    Mr. Stana. Well, aside from the obvious cost of maintaining 
an elderly patient, what we found is that the Bureau's system 
of health care really isn't flexible enough right now to 
provide a gradation of care as inmates move along in their care 
needs.
    In the private sector--you and I have parents and uncles or 
whatever--if you need a little more help, you can go into 
assisted living. If you need a little more than that, you can 
go into a nursing home. If you need a lot of care, there is a 
hospital. You know, there is a gradation of care.
    Well, with the Federal prison system, if you can't maintain 
yourself or be maintained in the general population, given your 
security level, your option is to go to the Federal medical 
centers. That is very costly. I just came back from the Federal 
medical centers last week and one impression I came away with 
is there are an awful lot of elderly inmates who are using up 
bed space.
    Senator Sessions [presiding]. Hospital-style bed space?
    Mr. Stana. Hospital-style. It is questionable whether they 
needed that intensity of care, but there is nowhere else to put 
them. So I think what the Bureau needs to do, and I think they 
are thinking along these lines, is to create an option, almost 
a nursing home, if you will, to care for these elderly inmates.
    Senator Sessions. And you believe that would be not only 
more appropriate, but less expensive in the long run?
    Mr. Stana. Well, like I say, it frees up hospital beds for 
inmates who need hospital-style care. That is what the private 
sector does and that is what the Bureau of Prisons is 
eventually going to have to do.
    Senator Sessions. To your knowledge, are there any 
proposals now about how to deal with elderly prisoners who 
maybe have reached a point in their life when they cease to be 
dangerous? I don't think we can say that about every prisoner, 
but there are some probably that that could be said about, 
people who have contracted a terminal illness or something like 
that. Is there sufficient ability for the prison system to 
transfer them to some sort of work camp or outside facility, or 
even on a home detention basis?
    Mr. Stana. I met an inmate last week who was terminally ill 
with cancer. She had maybe 2 months to live, and the Bureau was 
working with her on a compassionate release so she could go 
home and essentially die with her family. The problem is not 
many inmates who serve long sentences have a support network 
once they leave the prison. Their relatives disown them or they 
just aren't there.
    So by releasing the inmate to get care other than in a 
prison, the question is where do you release them to, and would 
the private sector care, either nursing homes or other types of 
assisted living, be willing to take on inmates who are there 
under those circumstances.
    Senator Sessions. Not an easy question to deal with.
    Mr. Stana. No.
    Senator Sessions. What trends did you see in pharmaceutical 
drugs? Has that been going up steadily?
    Mr. Stana. Well, they have, but through bulk purchasing and 
cooperative agreements with other governmental agencies, they 
have really got a bit of a handle on that. The issue here is 
what are they going to do with the inmate population as they 
see it coming. You know, they are testing more for hepatitis, 
hepatitis B and C, and so they are finding more cases of that, 
and that is a very expensive treatment. It is a form of blood 
poisoning.
    The same with AIDS patients. There is only 1 percent of the 
BOP inmate population that has HIV or AIDS, but about 8 to 10 
percent of the District of Columbia inmates that are being 
transferred into the Federal system have the AIDS virus. So it 
is very expensive care. Psychotropic drugs, as I mentioned 
before, are very expensive, you know, the anti-depressants, 
schizophrenia drugs, and so on. And you have to provide this 
level of care.
    Now, what the Bureau does attempt to do in discerning what 
type of care to give to which inmates is try to discern who 
needs life-saving care, who needs the kind of care that would 
essentially leave them with a lifelong condition, like a bad 
hip and they just can't get along without it. They may provide 
that.
    Then there is a sort of a gray area on a case-by-case basis 
of if a person has a hernia, well, can they live withit? Well, 
if they can, they won't do it. If they can't live with it, then they 
will; they will provide the care. And then there is a fourth category 
that is dental caps and removing tattoos, things like that that are 
most of the time dismissed out of hand. But I have got to say my own 
observation would be if they are going to err, they are going to err on 
the side of providing the care rather than withholding care from an 
inmate in need.
    I have one thing I wanted to mention. You were having an 
exchange with Mr. Fine a second ago and you asked about 
computer security in prisons. We did a report and issued it 
last summer on the controls on inmates who do prison work 
programs that gives them access to personal information. It is 
mostly in the State systems where the State department of 
corrections may be under contract with the health bureaus or 
the driver's license bureaus to transfer files on computers.
    The real key we found there is good supervisory controls 
over the inmates, making sure that they are controlled when 
they go in, they are working in a controlled environment while 
they are working, and there are some controls to see what they 
are taking out of the facility with them.
    We found a relative handful of cases where an inmate read a 
medical file and discovered that it was a relative and they 
called the relative and it resulted in an embarrassing 
situation. Or they got a credit card number somehow or a 
driver's license and they proceeded to get a credit card and it 
was Eddie Bauer for the cell block, you know. But it was rather 
rare. In fact, we expected to find more of it, and we owe it to 
the kinds of controls that they have in prison work programs. 
The programs that did not have the controls really were at 
risk.
    Senator Sessions. Well, everything is risk. You hire 
somebody off the street and they can violate privacy or steal. 
I am generally of the view and would be supportive of more 
effort to make prisoners work, to have them work. The prisoners 
benefit from it, the prison benefits from it, the taxpayers 
benefit from it. Violence in the prison goes down when 
prisoners are working. There is just a more pleasant 
circumstance. So I think we can't be intimidated just because 
somebody might escape. Well, they are about to be released in 9 
months anyway, free and clear, you know. I think we have got to 
pursue the effort of work and employment.
    The numbers on health care costs look fairly good to me 
over the decade. I mean, they have more than doubled, tripled, 
probably, but we also have almost twice as many.
    Mr. Stana. Well, that is it. The biggest cost driver is the 
population increase. We mentioned earlier that the net increase 
is about 1,000 inmates a month. Well, what that does is that 
commits the Bureau of Prisons to about $3 million more in 
health care costs each year just by the fact that they are 
coming in the door with the average health care costs. You do 
the math and it is $3 million more a year just by simple 
population growth. But they have taken steps and they are 
bringing it down on a per-capita basis.
    Senator Sessions. Well, Federal prison does not segregate 
AIDS patients, is that correct?
    Mr. Stana. I am not clear on that. I think if they present 
a danger, they would, but I don't know if they would do that on 
a routine basis.
    Senator Sessions. The State of Alabama has segregated AIDS 
patients, won that at the supreme court level, and believes 
that even if it is just one, two, three, four, five cases that 
are eliminated in transmissions of disease, that is a benefit 
to the prisoner as well as to the taxpayer.
    Mr. Stana. Yes. My understanding is they do not segregate 
them.
    Senator Sessions. I don't think they do.
    What about hepatitis C? That is easily transmitted.
    Mr. Stana. My understanding is they do not, but I think one 
thing that they are trying to do, or at least it is a proposal 
they are thinking about is trying to bring patients with like 
needs together in the same situation so they can treat everyone 
and maybe come up with a cost saving that way.
    For example, the medical center at Fort Worth has a 
specialty in wounds treatment. The medical center in 
Springfield has kidney dialysis. By doing that, you bring 
people with like illnesses together and maybe get some savings 
that way.
    Senator Sessions. And they have always had mental 
hospitals.
    Mr. Stana. They have always had those things, yes.
    Senator Sessions. Thank you very much for your testimony. I 
believe that the prison system is a necessary evil, if you want 
to say it that way. I don't believe anyone can deny that our 
tendency in recent years to lock up for longer periods of time 
repeat, habitual, dangerous offenders has saved people from 
being murdered and has reduced crime in America. It is a big 
factor in it. We are doing a better job. We are not where we 
need to be, but we are doing a better job of identifying those 
who need longer periods in prison and seeing that they get it.
    That does mean that we have got costs that occur from that, 
and we need to keep them as low as possible. The taxpayers do 
not need to be paying more than they have to take care of a 
person's health care, or they shouldn't be subjected to crime 
because they want to give a prisoner the right to use a phone 
whenever they reasonably can allow them to use that phone.
    Before we dismiss, I will put Senator Leahy's statement 
into the record. He is the ranking member of this committee.
    [The prepared statement of Senator Leahy follows:]

 Prepared Statement of Hon. Patrick J. Leahy, a U.S. Senator From the 
                            State of Vermont

    As we renew are discussion of the issues facing our prisons, I 
would like to address an aspect of the prison privatization that poses 
a serious threat to public safety and deserves immediate congressional 
action--the interstate transportation of prisoners.
    Last year, the escape of convicted child murderer Kyle Bell from a 
private prison transport bus should have served as a wake-up call, to 
the Congress and to the country. Kyle Bell slipped off a TransCorp. 
America bus on October 13, while the bus was stopped in New Mexico for 
gas. Apparently, he picked the locks on his handcuffs and leg irons, 
pushed his way out of a rooftop vent, hid out of sight of the guards 
who traveled with the bus, and then slipped to the ground as it pulled 
away. He was wearing his own street clothes and shoes. The TransCorp 
guards did not notice that Bell was missing until nine hours later, and 
then delayed notifying New Mexico authorities. Bell was a fugitive for 
three months before his capture in January of this year.
    Kyle Bell's escape is not an isolated case. In recent years, there 
have been several escapes by violent criminals when vans broke down or 
guards fell asleep on duty. Just last week, James Prestridge, a 
convicted murderer, escaped in Chula Vista, California, while he was 
being transported from Nevada to North Dakota by a private company 
called Extradition International. According to the Los Angeles Times, 
the van was stopped at a rest area when Prestridge overpowered two 
guards, took one officer's gun, and escaped with another violent 
offender who was being transported by the same van. They remain at 
large today.
    In addition to these disturbing incidents, there have also been an 
alarming number of traffic accidents in which prisoners were seriously 
injured or killed because drivers were tired, inattentive or poorly 
trained. Privatization of prisons and prisoner transportation services 
may seem cost efficient, but public safety must come first.
    This is why I joined Senator Dorgan in introducing S. 1898, The 
Interstate Transportation of Dangerous Criminals Act. This bill 
requires the Attorney General to set minimum standards for private 
prison transport companies, including standards on employee training 
and restrictions on the number of hours that employees can be on duty 
during a given time period. A violation is punishable by a $10,000 
fine, plus restitution for the cost of re-capturing any violent 
prisoner who escapes as the result of such violation. This should 
create a healthy incentive for companies to abide by the regulations 
and operate responsibly.
    I would also like to take this opportunity to urge House action on 
S. 704, the Federal Health Care Copayment Act, which was introduced by 
Senators Kyl, Abraham, Ashcroft, Cleland, Dorgan, Grassley, Hatch, 
Inouye, Johnson, Lincoln, Sessions and Thurmond. Senator Johnson 
brought this issue of medical copayments for prisoners' health care to 
my attention last year. My own state of Vermont does not have a 
copayment requirement for prisoners' health care so I appreciated the 
Senator from South Dakota sharing with me the problems he has seen in 
his State.
    After some initial reservations, I was glad to help move this bill 
out of Committee after it was improved during markup. It passed the 
Senate by unanimous consent on May 27, 1999, more than 11 months ago, 
but has still not been acted upon in the House. This is legislation 
that has the support of the Bureau of Prisons and of the U.S. Marshals 
Service.
    In my view, a critical part of this bill is its protection against 
prisoners being refused treatment based on an inability to pay. In 
particular, I am glad the Senate accepted my amendment to make clear 
that copayment requirements should not apply to prisoner health care 
visits initiated and approved by custodial staff, including staff 
referrals and staff-approved follow-up treatment for a chronic illness. 
The goal of the bill is to deter prisoners from seeking unnecessary 
health care, not to prevent them from seeking health care when they 
need it.
    In addition, the version passed by the Senate excluded visits for 
emergency services, prenatal care, diagnosis or treatment of contagious 
diseases, mental health care and substance abuse treatment from the 
copayment requirement. Copayment requirements should not prevent 
prisoners from receiving emergency and critical health care.
    I would like to thank the witnesses for being here today and 
welcome their comments. We will hear today whether the Federal Health 
Care Copayment Act is still needed, or whether the Bureau of Prisons 
has been able to make administrative adjustments despite the lack of 
authority that measure would have provided.

    Senator Sessions. Is there anything else either one of you 
would like to add at this time?
    Mr. Stana. No.
    Mr. Fine. No. Thank you for inviting us to testify on this 
subject.
    Senator Sessions. Thank you for your reports and your work. 
I think it will be helpful to the Bureau and to all of us as we 
attempt to operate a better and less expensive system.
    So we will leave the record open now for a week for 
additional materials anyone may want to submit, and the hearing 
is adjourned at this time.
    [Whereupon, at 4:21 p.m., the subcommittee was adjourned.]
                            A P P E N D I X

                              ----------                              

                         Questions and Answers

                              ----------                              

    Responses of Ms. Kathleen Hawk Sawyer to Questions From Senator 
                                Thurmond

    Question 1. Director Sawyer, what steps are you taking to 
proactively limit some inmates' telephone use based on their 
classification when they enter a facility rather than waiting until 
crimes are committed?
    Answer. The BOP has developed a Public Safety Factor (PSF) for 
Serious Telephone Abuse and is incorporating it into the classification 
policy. PSFs, which can be applied during an inmate's initial 
classification or during their incarceration, are entered for inmates 
who require increased security measures to ensure the protection of 
society. Inmates with a PSF for Serious Telephone Abuse will have 
restrictions placed on their telephone use, and any telephone calls 
they are permitted to make will be live monitored. The Warden must 
permit inmates who have had their telephone privileges limited to place 
at least one telephone call per month. The PSF will be entered if any 
one of the following criteria applies:

 The PSI reveals the inmate was involved in criminal activity 
        facilitated by the telephone;
 Federal law enforcement officials or a U.S. Attorney's Office 
        notifies the BOP of a significant concern and need to monitor 
        an inmate's telephone calls;
 The inmate is convicted of a criminal act directly related to 
        telephone usage;
 The inmate has been found guilty of a 100 or 200 level 
        incident report code for telephone abuse; such as using the 
        inmate telephones to further criminal activity, or attempting 
        to circumvent telephone monitoring procedures by placing a 
        third party call or talking in code or;
 The Special Investigative Supervisor's (SIS) Office has 
        reasonable suspicion and/or documented intelligence supporting 
        telephone abuse.

    Question 2. Director Sawyer, many of the changes that the Inspector 
General has recommended to curb phone abuse were derived from a 1997 
Warden's Working Group on telephone abuse. Are you reviewing the 
Working Group's findings further subsequent to the Inspector General 
Report?
    Answer. Yes. In November 1997, the BOP's Executive Staff reviewed 
the Wardens' Inmate Telephone Work Group Report and approved 9 of the 
14 recommendations. In December 1999, we adopted four more 
recommendations of the Work Group (see below).

 After the Inmate Telephone System II (ITS-II) is installed in 
        all of our facilities, we will have the technology in place to 
        individually limit each inmate's calls to a prescribed number 
        of calls or a total of minutes per day, week, or month, 
        Although we continue to consider this and other means of 
        limiting access as warranted, any significant changes to 
        inmates' access to the telephones risks action by the Court who 
        presided over the Washington v. Reno case. In January, 2000, 
        the BOP requested of the Federal Programs Branch, Civil 
        Division, Department of Justice, (the branch that represented 
        the BOP in the Washington v. Reno case), an assessment of the 
        litigation risks associated with further restrictions to limit 
        inmate telephone access. The Civil Division opined that there 
        would be a risk of reopening litigation if inmate telephone 
        privileges were further restricted.
 Inmate telephone access has been restricted during normal 
        inmate working hours (Monday through Friday, 7:30 a.m. until 
        10:30 a.m. and 12:30 p.m. until after the 4:00 p.m. inmate 
        count). Institutions with ITS have the capability of allowing 
        limited telephone access during restricted hours to accommodate 
        inmates who do not work standard institution shifts (e.g., 
        evening or weekend Food Service workers).
 We have established the following guidelines to assist 
        Disciplinary Hearing Officers (DHO) in imposing meaningful 
        sanctions for inmates found guilty of abusing telephone 
        privileges: 1st offense: 6 to 18 months loss of telephone 
        privileges; 2nd offense: 18 to 36 months loss of telephone 
        privileges; and 3rd offense: 5 years to duration of sentence 
        loss of telephone privileges. When the sanction falls below the 
        suggested range due to mitigating factors, the DHOs document in 
        writing the reason for the departure.
 As discussed in question one above, we have developed a Public 
        Safety Factor for limiting an inmate's social telephone calls 
        as a matter of classification.

    Question 3. Director Sawyer, if the 1995 settlement of the 
Washington v. Reno lawsuit causes problems for your efforts to control 
inmate phone use, should the Department of Justice consider reopening 
the settlement agreement pursuant to the Prison Litigation Reform Act?
    Answer. The terms of the settlement agreement are set to expire in 
2002. Under the Prison Litigation Reform Act, it is possible to seek 
modification of a consent decree by returning to the original judge. 
Given Judge Wilhoit's very strong feelings regarding this case, the BOP 
has concerns that further review of the case could precipitate 
additional, more onerous burdens rather than amelioration of the 
current, restrictive terms. The DOJ has similarly opined that there 
would be a risk of reopening litigation if inmate telephone privileges 
were further restricted (see Question 2). Accordingly, we have no plans 
to seek modifications.

    Question 4. Director Sawyer, the Inspector General has recommended 
that the Bureau institute certain minimum administrative punishment, 
including loss of phone privileges, for certain types of phone abuse. 
Are you considering this suggestion?
    Answer. Rather than developing mandatory sanctions for inmate 
misconduct, the BOP prefers to develop suggested ranges of sanctions 
that provide the Disciplinary Hearing Officers (DHO) with discretion in 
sanctioning inmate case. We have recently implemented a suggested 
sanction range for abuse of telephones (see Question (2). This strategy 
of providing DHOs some discretion in sanctions was successfully 
implemented several years ago by providing suggested ranges to DHOs for 
sanctioning inmates found to have introduced drugs into the institution 
through social visiting. The result was that DHOs imposed greater 
sanctions, and the introduction of drugs through the visiting room was 
reduced.

    Question 5. Director Sawyer, is the Bureau increasing the 
involvement of Intelligence Section (SIS) officers in reviewing 
telephone crime?
    Answer. Yes. We have taken action to improve our telephone system 
and monitoring efforts as follows:

 FBI staff are included in all SIS training sessions in an 
        effort to improve the quality and effectiveness of our 
        investigative operations as they relate to telephone 
        monitoring.
 We created 24 additional intelligence positions at facilities 
        located in metropolitan areas to work with inter-city crime 
        task forces in identifying criminal acts and trends. Staff in 
        these positions work as liaisons with law enforcement agencies 
        to gain information about outside illegal activities, including 
        targeting activities taking place through telephone 
        communications. Two of the positions are assigned to FBI 
        Headquarters and help ensure the BOP is aware of inmates coming 
        into our custody who may pose unique security concerns.
 We prepared and distributed an Inmate Monitoring field Guide 
        for Wardens and SIS staff. This guide gives very detailed 
        instructions for staff regarding proper procedures to detect 
        and deter telephone abuse. Moreover, we are developing a 
        computerized tutorial training program for telephone monitoring 
        which will be available to all BOP staff.

Additionally, the BOP is taking the following steps to support the 
agency-wide goal of enhanced telephone monitoring:

 We added a category for inmate telephone abusers in our 
        computerized inmate database, thereby assisting staff in the 
        identification and monitoring of those inmates who have or are 
        likely to abuse their telephone privileges.
 Many of our facilities have recently instituted additional 
        telephone monitoring stations that allow a higher percentage of 
        telephone calls to be monitored.
 We have almost completed installation throughout the BOP of 
        ITS-II, an enhanced telephone system that allows the BOP to 
        significantly restrict every inmate's calling privileges. The 
        system can be programmed to alert staff every time a high risk 
        inmate makes a telephone call. ITS-II can provide staff with 
        numerous reports to monitor and determine which inmates may be 
        attempting to abuse telephone privileges. It also ``links'' all 
        BOP facilities and our headquarters together for information 
        sharing of inmate telephone use information. The system allows 
        the BOP to tag and target specific inmates who display a 
        propensity to commit fraudulent or criminal activity over the 
        telephone. In addition, the ITS-II system allows the BOP to 
        restrict an inmate's calling capabilities to specific time 
        periods, specific telephones, specified number of calls per 
        day, specified number of minutes per day, period of time prior 
        to placing another call, or no calls.
 We have added two new offense codes to the inmate discipline 
        policy; a 100-level offense code for utilizing the telephone to 
        continue criminal enterprises and a 200-level offense code for 
        noncriminal use of the telephone. Additionally, we have made 
        the use of coded language by inmates over the telephone a 
        disciplinary violation in all circumstances.

    Question 6. Director Sawyer, are you working to make telephone 
monitors in each facility a permanent position?
    Answer. We expect to have permanent telephone monitor posts in 
place in all facilities by December, 2000. The posts will be rotated 
among qualified staff. This allows each monitor to become familiar with 
the process, yet avoids the ``staleness'' that can occur with a 
permanent assignment.

    Question 7. Director Sawyer, the Bureau must always be alert to 
criminal activity within prison, and telephone abuse by inmates is one 
aspect of this issue. What is the status of implementing National 
Strategic Planning Objective 5.11?
    Answer. National Strategic Planning Objective 5.11 was most 
recently revised with a greater emphasis on telephone initiatives. 
Action plans include some of the Office of Inspector General 
recommendations and approved BOP Executive Staff decisions. The current 
action plans, approved by the Executive Staff in March 2000, will be 
completed by early 2001. At that time, new actions plans will be 
developed and submitted to the Executive Staff for their approval.

    Question 8. Director Sawyer, guard escort services for inmates who 
need transportation to medical facilities is one cost that has 
decreased considerably in recent years, down by an average of almost 
$100 per inmate. Have your efforts to expand telemedicine been an 
important reason for this decline?
    Answer. As of June 9, 2000, twenty institutions will have 
telehealth equipment installed, and the equipment will be fully 
operational at ten institutions. The program appears very promising as 
a health care cost reduction initiative that, importantly, allows us to 
maintain the community standard of care for inmates. However, because 
of the relative newness of the program, further study is required 
before we can comfortably ascertain definitive cost benefits. A large 
part of the cost savings the BOP has realized results from the 
increased use of ``in-house'' medical visits by community specialists. 
By coming to the institution, physicians are able to examine multiple 
inmates in one visit, and the BOP does not incur transportation or 
escort guard costs. The BOP continues to seek innovative, cost-
effective strategies for providing the community standard of medical 
care to our inmate population.

    Question 9. Director Sawyer, in your statement you said that one of 
the major concerns facing the BOP is the number of inmates who have 
AIDS and hepatitis C and require additional care, along with an inmate 
population which is aging. Do you feel that the BOP should have an 
intermediate care medical facility that can offer assistance for those 
inmates who do not require full hospital services but need more medical 
assistance than the general inmate population?
    Answer. The BOP is planning to develop enhanced care facilities 
that would house many of the chronic care inmates that are currently 
housed at Medical Referral Centers. These inmates do not require the 
intensive level of health care services available at the Medical 
Referral Centers, but do require more health care than most inmates in 
our general population facilities (e.g., uncontrolled diabetes, HIV 
infection requiring multiple medications, hepatitis C). By developing a 
multi-tiered health care delivery system, to include Medical Referral 
Centers, enhanced care facilities, and general population institutions, 
the BOP can match the appropriate level of health care resources to the 
appropriate inmate population.

    Question 10. Director Sawyer, are inmates with infectious diseases 
such as HIV segregated from other inmates? Please explain.
    Answer. All BOP staff and inmates are educated regarding 
appropriate precautions to prevent transmission of infectious diseases. 
These precautions include ``universal precautions'' (i.e. assuming all 
blood and body fluids are infected) and educating staff and inmates 
about how infectious diseases are spread and how they are best 
prevented. As such, inmates with infectious diseases such as HIV or 
hepatitis are housed in general population with other inmates, as these 
diseases are not spread by casual contact. We segregate sick inmates as 
necessary to provide appropriate medical treatment and prevent 
transmission of diseases that spread through casual contact (i.e., 
tuberculosis).

    Question 11. Director Sawyer, is it a problem that inmates will use 
the fact that they have or may have an infectious disease as a weapon 
against staff or inmates, and if so, what type of punishment does this 
type of conduct receive?
    Answer. The BOP views any assault as a serious incident, regardless 
of the means used to carry it out. Over the past five years the assault 
rate in the BOP has decreased by almost 30 percent, due in part to the 
efforts of our staff to effectively communicate with the inmate 
population. Ordinarily, inmates who engage in assaultive behavior 
toward staff are charged with a Greatest Severity Prohibited Act 
offense code, regardless of whether or not the inmate committed the 
assault with the intent to infect staff with an infectious disease. If 
the charge is sustained following the inmate's administrative hearing, 
any of the following sanctions may be imposed: loss of good conduct 
time, disciplinary transfer, disciplinary segregation up to 60 days, 
and loss of privileges (i.e., visiting, telephone, commissary).

    Question 12. Director Sawyer, the Federal inmate population has 
more than doubled since 1990, and about 1,000 offenders are being added 
to your custody each month. Is managing the rising number of inmates 
the primary challenge that your agency faces today.
    Answer. Managing the increasing number of inmates in a safe and 
secure manner and adding sufficient prison capacity are the two largest 
challenges we face. During FY 1999, the BOP experienced its second 
consecutive year of record breaking population increases when the total 
inmate population increased by more than 11,300. The BOP projects that 
inmate population growth this year will set another record, with 
projected growth of approximately 12,500inmates. By Fiscal Year (FY) 
2008, we anticipate a federal inmate population of approximately 
209,000, nearly 50 percent above the current population level. To meet 
this growth, we currently have 32 prison facilities in some stage of 
planning, design or construction, though some are contingent on the 
advanced appropriations requested in our FY 2001 budget. These requests 
are currently under consideration by Congress.
                                 ______
                                 

 Responses of Ms. Kathleen Hawk Sawyer to Questions From Senator Leahy

    Question 1. You testified about a number of successful 
administrative initiatives that the Bureau of Prisons has put into 
place over the last several years to contain inmate health care costs 
and increase efficiency of services. Indeed, BOP's per capita inmate 
health care costs have decreased steadily since 1997. In light of this 
trend, is the Federal Health Care Copayment Act still necessary, in 
your opinion? If yes, please provide a detailed explanation of your 
response.
    Answer. The BOP views inmate health care copayments as a valuable 
tool in our overall strategy to encourage inmates to use available 
services in an appropriate manner and to teach them personal 
responsibility. While this will undoubtably reduce medical costs 
somewhat as some inmates decide not to seek unnecessary medical 
treatment, this is not the primary purpose of the bill. Inmates will 
not be charged copayments for prenatal visits, chronic care clinics, 
food handler's examinations, psychiatric assessments, or intake 
physicals. They will only be charged for appointments they initiate. 
None of the revenue generated by this bill will be made available to 
the BOP.

    Question 2. The Inspector General's report on the management of 
inmate telephone privileges recommends legislation explicitly to 
authorize the Bureau of Prisons to use proceeds from the inmate 
telephone system to pay for monitoring inmate calls. Mr. Glenn Fine, 
Director of the Special Investigation and Review Unit of the Office of 
the Inspector General, indicated in his testimony that all such 
proceeds are required to go to the Inmate Trust Fund. When was the 
Inmate Trust Fund established and for what specific purpose? What are 
the current requirements for using funds from the Inmate Trust Fund? 
What specific operations, programs or other expenditures are currently 
funded by the Inmate Trust Fund?
    Answer. The inmate Deposit Fund was established in 1930 by the 
Department of Justice (Circular No. 2126, ``Rules Governing the Control 
of Prisoners Funds, at the Several Penal Institutions'') to maintain 
inmates' monies while they were incarcerated and to authorize the 
establishment of an inmate commissary at each federal correctional 
institution. The existence and operations of prison Commissaries was 
recognized and approved by Congress in 1932 with the passage of the 
Department of Justice's 1933 appropriation bill. In 1934, Congress 
designated the ``funds of Federal prisoners'' and ``Commissary funds'' 
as ``Trust Funds''. All monies accruing to these funds were to be 
appropriated and dispersed in compliance with the Trust.
    By the terms of the Trust Fund, profits may be used to provide 
programs that benefit all inmates, and may not be used for the personal 
benefit of individual inmates. Profits may not be used to purchase 
items ordinarily procured from funds appropriated by Congress for care 
of prisoners. Additionally, a September 26, 1994, Sixth Circuit Court 
of Appeals ruling in Washington v. Reno upheld a prohibition against 
the BOP using inmate commissary trust funds to pay for inmate telephone 
system components with a primary purpose of institution security.
    Some examples of items purchased with trust Fund profits are:

 Recreation/arts and crafts operating costs, activities, and 
        supplies including contracts, supplies, and equipment related 
        to fulfilling the mission of the BOP's Recreation program 
        (Staff salaries, benefits, travel and training are not funded 
        through the Trust Fund, but are funded only through Salaries 
        and Expenses (S&E) appropriations)
 Advanced Occupational Education (AOE) programs that may lead 
        to an associate degree. All inmates, with appropriate academic 
        prerequisites, are eligible to participate in AOE programs.
 Other Inmate Programs, including Artists in Residence; Inmate 
        Placement; and Beckley Responsibilities and Values Enhancement 
        Programming (Staff salaries, benefits, travel and training are 
        not funded only through S&E appropriations)
 Educational items such as self-help videos, library books
 Commissary merchandise for inmate purchase
 Inmate Performance Pay (pay for satisfactory completion of 
        inmate work assignment tasks)
 Commissary and ITS computer systems, property, and operating 
        supplies (freezers, safes, shelving, etc.)
 Salaries and benefits for Trust Fund employees
                               __________

    Responses of Richard M. Stana to Questions From Senator Thurmond

    Question 1. Do you think that prisoner abuse of health care, such 
as inmates using medical visits to get out of work or other duties, is 
a significant problem, and would you expect a copay requirement to help 
reduce any such abuse?
    Answer. In our testimony, we reported that the Congressional Budget 
Office (CBO) had looked at this question and reported that, where 
similar prisoner copayment programs were adopted in 36 states or local 
jurisdictions, prison medical facilities experienced average reductions 
in sick call visits of 16 percent to 50 percent. Although we are not 
aware of any formal study by BOP or others, we received anecdotal 
information from BOP health care officials that frivolous visits to 
medical units do occur in BOP and that some reduction in this kind of 
abuse could be anticipated if some additional charge were levied. 
However, we were not provided with an estimate of the magnitude of the 
anticipated reduction.

    Question 2. Does it appear that states have benefited from a copay 
requirement?
    Answer. As noted in response to the previous question, CBO has 
reported that after adopting copayment requirements, 36 states or local 
jurisdictions experienced reductions in the number of sick call visits. 
These reductions ranged from a low of 16 percent to a high of 50 
percent.

    Question 3. It appears that personnel salaries are the primary 
category for health care costs. Have recent BOP initiatives, such as 
restructuring staff to depend less on highly paid physicians for 
routine duties, helped reduce staff costs in recent years?
    Answer. One BOP official told us that, as a result of our 1994 
report, BOP began examining the utilization of its health care staff to 
allow for more efficient operations. One result the BOP official cited 
was a restructuring initiative that focused on using qualified, lower-
salaried medical personnel instead of more highly paid physicians and 
physicians' assistants for certain routine duties. BOP attributed 
annual savings of about $5.5 million to this initiative. We also 
testified that BOP medical personnel salaries--on a macro level--have 
decreased steadily from a peak of $1,399 per inmate in fiscal year 1996 
to $1,225 in fiscal year 1999. We testified that Public Health Service 
(PHS) associated costs, largely composed of PHS salaries, have dropped 
from $378 per inmate in fiscal year 1997 to $367 in fiscal year 1999. A 
BOP Health Services Division official was quite confident that the 
downward slope in per inmate medical personnel salaries and PHS 
associated costs was due to the staff restructuring initiative and 
other related cost-cutting initiatives. However, BOP officials were 
concerned that the savings from these economy and efficiency measures 
will eventually bottom out.
    BOP officials said they expect overall medical costs to continue to 
rise in future years for several reasons:

 Projections of the number of inmates incarcerated in federal 
        facilities show continued increases.
 Felony inmates transferred to BOP from the District of 
        Columbia Department of Corrections generally have 
        disproportionately more medical needs than other BOP inmates.
 BOP is receiving increasing numbers of long-term, 
        nonreturnable detainees from the Immigration and Naturalization 
        Service (INS).
 BOP's expenditures for pharmaceuticals likely will rise due to 
        the increasing prevalence of illnesses such as HIV and 
        hepatitis.

    Question 4. You noted during your oral testimony that many inmates 
are staying in medical referral centers for long periods due to serious 
medical conditions. Do you think it may be more cost effective for BOP 
to have an intermediate care medical facility for inmates needing long-
term care?
    Answer. Most evidence indicates that an intermediate care facility 
could have advantages for BOP, although a thorough cost-benefit study 
might still need to be conducted to consider the various forms that 
such a facility could take. Medical costs at BOP's medical referral 
centers are higher on a per inmate basis than medical costs at standard 
prisons. Based on BOP data, the estimated medical costs on a per inmate 
basis at a medical referral center are about $16,000 per year, whereas 
medical costs at a standard prison are less than $2,500 per year.
    In terms of inmate access to medical care, BOP officials told us 
that it is important that there be a regular turnover of patients in 
medical referral center hospital beds--based on the medical needs of 
the patients. They told us that increasing numbers of chronically ill 
inmates with long sentences are being sent to medical referral centers 
because the inmates' medical conditions cannot be treated approximately 
at a standard prison. For these inmates, the medical referral center is 
the end of the line. This means that fewer and fewer hospital beds are 
turning over. It also means that new patients from standard prisons may 
have to wait for the next available medical referral center hospital 
bed to be freed up. For example, at one medical referral center we 
toured, we learned that the waiting list of new patients for the next 
available bed is gradually getting longer.
    Anecdotally, we were told that BOP already has enough chronically 
ill inmates to fill an intermediate care medical facility of 400 beds. 
The type of facility would have the added benefit of freeing up more 
expensive medical referral center beds presently occupied by inmates 
who have little chance of returning to their home prison. Nonetheless, 
a cost-benefit study could determine, for instance, whether the per 
inmate cost of constructing an intermediate care medical facility would 
be more or less than competing alternatives, such as contracting for a 
privatized nursing home environment, or renovating an existing building 
at a medical referral center just for the chronically ill.
                                 ______
                                 

     Responses of Richard M. Stana to Questions From Senator Leahy

    Question 1.--In your written statement, you indicated that CBO has 
estimated that the Federal Prisoner Health Care Copayment Act of 1999 
would generate annual revenues of $1 million and ``would be helpful to 
BOP's efforts to control medical costs.'' Under section 4048(g) of this 
legislation, fees collected from inmates subject to an order of 
restitution shall be paid to victims in accordance with the order. 
Seventy-five percent of all other fees collected would be deposited 
into the Federal Crime Victim's Fund and all the remainder would be 
used to cover the administrative expenses incurred in carrying out this 
Act. With legislative mandates on the use of copayment fees, how would 
the Federal Prisoner Health Care Copayment Act of 1999 significantly 
contribute to reducing health care costs?
    Answer. We testified that a May 1999 CBO analysis of the proposed 
$2 health care system fee estimated that BOP might generate additional 
revenue of about $1 million in fiscal year 2000. However, BOP enforces 
the proposed fee primarily as a means to reduce unnecessary or 
frivolous medical visits--that is, BOP does not view the proposed fee 
primarily as a revenue generator.
    BOP has suggested that the proposed legislation be modified to 
mandate that 100 percent of collected fees go to the Crime Victims 
Fund. According to one official, BOP might send a check each quarter to 
the fund--a procedure that would help to minimize administrative 
expenses. BOP suggested this alternative because an administrative 
process is already in place that could be modified at little or no cost 
to include tracking collected fees. However, the cost of distributing 
restitution checks to victims is another matter since no administrative 
process or supporting staff structure currently exists. One BOP 
official told us that the number of checks could be enormous, the 
amount of each check would be small, and the administrative cost of 
establishing and maintaining a process (to make sure victims received 
the appropriate checks) would be an additional expense. This official 
also opined that victims might react negatively to receiving checks of 
such small amounts repeatedly over the years.
    CBO has looked at this question of unnecessary or frivolous medical 
visits. CBO reported that where similar prisoner copayment programs 
were adopted in 36 states or local jurisdictions, prison medical 
facilities experienced average reductions in sick call visits of 16 
percent to 50 percent. We received anecdotal information from BOP 
health care officials that frivolous visits to medical units do occur 
in BOP and that some reduction in this kind of abuse can be anticipated 
if additional charges are levied. However, we have not independently 
verified the magnitude of such a reduction.
    Neither BOP nor we believe that the primary benefit of the 
copayment proposal to generate revenue. Rather, its primary benefit 
would be to reduce unnecessary or frivolous medical visits and the 
burden population through 2006, it appears the demands on BOP's health 
care system will increase.

    Question 2. Have the administrative initiatives that BOP put into 
place over the last several years to contain inmate health care costs 
and increase efficiency of services been taken into account by your 
estimate? Have the facts or assumptions on which you based your 
estimate of $1 million changed?
    Answer. The estimates of increased efficiency of services by virtue 
of administrative initiatives BOP has undertaken over the last several 
years are BOP estimates. The $1 million estimate of anticipated revenue 
generated by a prison copayment provisions is CBO's estimate. We 
referred to the CBO estimate in our testimony because we did not want 
to duplicate that work. Also, given the short time in which we 
conducted our review, we did not attempt to independently verify the 
estimates and do not know whether the facts and assumptions used by CBO 
have changed.
    BOP officials believe that savings or benefits from the economy and 
efficiency initiatives BOP has implemented will eventually bottom out 
and they expect that inmate health care costs will rise given

  the pressures from a growing prison population;
  transfers of inmates to BOP from the District of Columbia 
        Department of Corrections--inmates who generally have 
        disproportionately more medical needs than other BOP inmates;
  the increase in numbers of long-term, nonreturnable detainees 
        from INS; and
  the growth in expenditures for pharmaceuticals because of the 
        increasing prevalence of illnesses such as HIV and hepatitis.

    We believe it is time to consider additional measures for 
containing BOP medical costs. The copayment provision is one 
alternative to consider--not because it is a revenue generator, but 
rather because such a provision can be expected to reduce the demand on 
medical services by reducing the number of unnecessary or frivolous 
medical visits by inmates.
                               __________

     Responses of Glenn A. Fine to Questions From Senator Thurmond

    Question 1. Mr. Fine, do you think that prisoner use of coded 
language on the telephone to disguise criminals activity is a problem, 
and is it important for the BOP telephone monitors to be trained in 
detecting coded language?
    Answer. Yes. Use of coded language by federal inmates is a serious 
problem and BOP telephone monitors need better training to identify 
such language that may disguise serious criminal activity. We believe 
it is very important for BOP telephone monitors to receive additional 
training regarding detecting criminal conversations on the telephone, 
including the use of coded language. In addition, as we suggest in 
recommendation number 12 in our report:

          The BOP should examine the possibility of making use of coded 
        language by inmates over the telephone a disciplinary violation 
        in certain circumstances. Such a rule would allow the BOP to 
        restrict or suspend an inmate's telephone privileges when an 
        SIS officer finds an inmate engaging in suspicious coded 
        conversations. As a model, the BOP should look to its existing 
        correspondence regulations that contain a provision allowing 
        wardens to reject correspondence that contains a code.

    Question 2. Mr. Fine, I understand that inmates are limited to 
twenty telephone numbers that they can have on their list to call at 
any one time. Does the Bureau need to do more to review the listed 
numbers that high-risk inmates may call to verify whether these numbers 
have connections to criminal activity?
    Answer. Yes. Our investigation revealed that the BOP does an 
inadequate job reviewing the telephone numbers submitted by inmates for 
inclusion on their personal calling lists--especially inmates that 
should be considered high-risk for telephone abuse. As we point out in 
our report, inmates at most BOP institutions with the ITS system have 
unlimited calling privileges to contact up to a maximum of 30 
individuals on an approved telephone list. Inmates prepare their 
proposed telephone lists during their admission and orientation process 
at a new BOP facility.
    Inmates may submit on their list telephone numbers for any person 
they choose, with the understanding that all calls are subject to 
monitoring. Inmates are required to pledge that any calls made from the 
institution will be made for a purpose allowable under BOP policy or 
institution guidelines.
    Normally, telephone numbers requested by the inmates are approved 
without review. When inmates request persons other than immediate 
family members or persons already on their visiting list, BOP staff are 
required to notify those persons in writing to afford them an 
opportunity to object to being placed on an inmate's telephone list. 
Other than this notification, however, the BOP conducts no screening of 
these individuals placed on an inmate's telephone list.

                 Additional Submissions for the Record

                              ----------                              

  Prepared Statement of Hon. Byron L. Dorgan, a U.S. Senator From the 
                         State of North Dakota

    Mr. Chairman and members of the Subcommittee, thank you for holding 
this oversight hearing today, and for the opportunity to submit this 
statement.
    One of the duties that the Federal Bureau of Prisons (FBOP) is 
charged with is transporting federal inmates. It is a duty that the 
FBOP has carried out with the utmost care and responsibility.
    At the state and local level, law enforcement agencies are 
responsible for the movement of their own prisoners. Although they can 
contract with he United States Marshals Service to move prisoners, 
states are increasingly turning to private companies to perform this 
service.
    These companies transfer prisoners from state to state, often 
taking long, circuitous routes all over the country. Prisoners are 
dropped off and picked up at numerous stops along the way. These trips 
can last for weeks, requiring the guards to take constant breaks to 
eat, sleep, refuel, etc.
    Mr. Chairman, the simple fact is that many of the companies have 
proven themselves inept when it comes to keeping prisoners in custody. 
Since 1996, at least 26 prisoners have escaped while being transported 
by a private company. Many of these escapees were violent offenders--
murderers, rapists, sexual molester, armed robbers, and so forth. In 
this same time frame, FBOP has not lost a single prisoner. In fact, its 
been almost 10 years since someone escaped while being transported by 
FBOP.
    It leads me to wonder what has caused these companies to fail where 
FBOP has been so successful. In my judgement, the answer is simple: 
FBOP has to live up to certain established standards, ranging from the 
hiring and training of personnel to the types of restraints used when 
transporting prisoners. Amazingly, there are currently no such 
standards that apply to private companies that haul violent prisoners 
around the country.
    There are standards that govern how we transport toxic waste, 
because we want to make sure it's handled properly to prevent a risk to 
the public. But there are no standards governing how violent criminals 
should be handled when they are transported--and believe me, the public 
is very much at risk.
    As I said earlier, there have been many escapes from private 
prisoner transport companies. Just last month, a convicted murderer 
serving a life sentence without parole escaped during a rest stop in 
Chula Vista, California. A convicted armed robber escaped with him, and 
they are still on the loose today. I want to share with you the details 
of this escape and some others that have taken place in the past few 
years. I think they will shock you, as they did me.
     March 25, 2000--Convicted murderer James Prestridge and 
convicted robber John Doran escaped while being transported form Nevada 
to out-of-state facilities. During a restroom break, the two convicts 
overpowered a guard, taking his gun, his keys, and his clothes. They 
then returned to the van transporting them and overpowered the other 
guard, who was taking a nap. After locking the two guards in the back 
of the van with the other prisoners, the inmates sped off, abandoning 
the van just north of the Mexican border. Prestridge was serving a life 
sentence without parole for first degree murder. Both inmates are still 
at large.
     January 22, 2000--three prisoners escaped while the van 
transporting them stopped at a convenience store for a restroom break. 
While the two guards weren't looking, two inmates jumped into the front 
seat, where the keys had been left in the ignition. The inmates sped 
off down the highway, leaving the two guards helpless on the side of 
the road. Luckily, shortly after the escape the van spun out of control 
and slammed into a dirt embankment, preventing the prisoners from 
completing their escape.
     October 13, 1999--Convicted child molester and murderer 
Kyle Bell was being transported to a prison in Oregon. The transport 
van traveled from North Dakota to Nashville, Tennessee and across the 
south central plains, until reaching Santa Rosa, New Mexico, where it 
stopped to refuel. While tow of the four guards refueled the bus and 
shopped at the truck stop, the two guards left behind to supervise the 
prisoners slept in the front seat. Using a key hidden in his shoe, Kyle 
Bell undid his handcuffs and shackles, and escaped through the roof 
ventilation hatch. After resuming its journey, the van traveled for 
nine hours before the guards discovered Bell was missing. And then it 
was another two hours before they notified law enforcement officials 
that here was a convicted killer loose in the area.
     July 24, 1999--Two men convicted of murder escaped from a 
van while being transported from Tennessee to Virginia. The two guards 
went into a fast food restaurant to get breakfast for the convicts, but 
then they returned did not notice that the convicts had freed 
themselves from their leg irons, possible with a smuggled key. While 
one guard went back into the restaurant, the other stood watch outside 
the van. But he forgot to lock the van door. The inmates kicked it open 
and fled. One was caught after 45 minutes. The other stole a car, but 
was apprehended eight hours later.
     July 30, 1997--Convicted rapist and kidnapper Dennis Glick 
escaped from a van while being transported from Salt Lake City to Pine 
Bluffs, Arkansas. While still in the van, Glick grabbed a gun from a 
guard who has fallen asleep. He took seven prisoners, a guard and a 
local rancher hostage and led 60 law enforcement officials on an all-
night chase across Colorado. He was recaptured the next morning.
     November 30, 1997--Whatley Rolene, being transported from 
New Mexico to Massachusetts, was able to remove his cuffs and grab a 
shotgun while one guard was inside a gas station and other slept in the 
front seat. He later surrendered after a showdown with the Colorado 
State Patrol and a local Sheriff's Department.
     December 4, 1997--11 inmates escaped after overpowering a 
guard in the van transporting them. Among the escapees were convicted 
child molester Charles E. Dugger and convicted felon (and former jail 
escapee) Homer Land. Apparently, the escapees shed their shackles 
either by picking the locks or using a key. The one guard in the van 
had opened the van doors to ventilate it while the other guard was 
inside a fast food restaurant. The guard in the van had been on the job 
less than a month.
    Dugger and the others were apprehended shortly after, but Homer 
Land forced his way into the home of a couple in Owatonna, MN, and held 
them hostage for 15 hours. He later forced them to drive him to 
Minneapolis, where they escaped while Land went into a store to buy 
cigarettes. Land was later apprehended in Chicago on a bus headed to 
Alabama.
     August 28, 1996--A husband-and-wife team of guards showed 
up at an Iowa State prison to transport six inmates, five of them 
convicted murderers, from Iowa to New Mexico. When the Iowa prison 
warden saw that there were only two guards to transport six dangerous 
inmates, he reportedly responded ``You've got to be kidding me.'' 
Despite his concerns, the warden released the prisoners to the custody 
of the guards when told the transport company had a contract.
    Despite explicit instructions not to stop anywhere but county jails 
or state prisons until reaching their destination, the husband and wife 
decided to stop at a rest stop in Texas. During the stop, the inmates 
slipped out of their handcuffs and leg irons and overpowered the 
couple. The six inmates stole the van and led police on a high-speed 
chase before being captured. The escape was reported to local 
authorities not by the husband and wife, but by a tourist that 
witnessed the incident.
    These escapes all have one thing in common--they are fraught with 
errors and missteps by employees who are either inadequately trained or 
lack good supervision. Clearly, something needs to be done before more 
harm is wreaked upon an unsuspecting public; before more murderers, 
rapists, and child molesters escape while being transported by people 
who have to meet no standards and follow no common procedures.
    That is why I have introduced, along with Senators Ashcroft and 
Leahy, the Interstate Transportation of Dangerous Criminals Act. I call 
the bill Jeanna's Bill, after the 11-year old girl who was brutally 
murdered in North Dakota by Kyle Bell.
    This legislation requires the Attorney General to develop a set of 
minimum standards that private prisoner transport companies must follow 
if they want to continue hauling murderers and rapists across the 
country. The standards must include some basic common-sense provisions, 
such as employee background checks, minimum training standards, minimum 
standards for restraints, and a requirement that if a violent prisoner 
escapes while in transport, the company must immediately notify law 
enforcement.
    These standards are not onerous--in fact, they can be no stricter 
than those the federal government uses when transporting federal 
prisoners. Rather, they provide a minimum level of safety and common 
sense to an industry that so far has lacked both.
    Finally, the bill would also establish civil penalties for 
companies that violate these standards. And if a company's failure to 
follow the requirements results in an escape, then the company can be 
held liable for the costs incurred by state and local law enforcement 
agencies involved in the search. State and local governments do not 
spend millions of dollars to apprehend, try, and incarcerate violent 
criminals just so a private company can lose them again. If private 
prisoner transport companies are made liable for these costs, perhaps 
fewer violent convicts will escape.
    No American should ever have to pull the family station wagon up to 
a gas pump only to find that the van next to them is full of convicted 
murderers whose only supervision is someone with one-week's training 
who may well be asleep. Nothing in this bill requires a degree in 
criminology. It is just common sense, and we need to make absolutely 
sure that private transport companies start to show some.
    Senator Leahy and I have asked Chairman Hatch for a full committee 
hearing on our bill, and I am hopeful that one will be scheduled soon. 
In the meantime, I encourage you to support this bill. The Federal 
Bureau of Prisons is accountable for its actions, as evidence by this 
hearing today. But there is no oversight when it comes to these private 
companies. I hope you'll help me change that by supporting this 
important legislation.

 Prepared Statement of Hon. Tim Johnson, a U.S. Senator From the State 
                            of South Dakota

    I want to thank Subcommittee Chairman Thurmond and Ranking Member 
Schumer for allowing me to share some thoughts on Federal prisoner 
health care costs and the Bureau of Prisons. As you know, Senator Kyl 
and I introduced last year a bill to require federal prisoners to pay a 
nominal fee when they initiate certain visits for medical attention. 
Fees collected from prisoners will either be paid as restitution to 
victims or be deposited into the Federal Crime Victims' Fund. My state 
of South Dakota is one of 34 states that have implemented state-wide 
prisoner health care copayment programs. The Department of Justice 
supports extending this prisoner health care copayment program to 
federal prisoners in an attempt to reduce unnecessary medical 
procedures and ensure that adequate health care services are available 
for prisoners who need them.
    My interest in the prisoner health care copayment issue came from 
discussions I had in South Dakota with a number of law enforcement 
officials and US Marshal Lyle Swenson about the equitable treatment 
between pre-sentencing federal prisoners housed in county jails and the 
county prisoners residing in those same facilities. Currently, country 
prisoners in South Dakota are subject to state and local laws allowing 
the collection of a health care copayment, while Marshals Service 
prisoners are not, thereby allowing federal prisoners to abuse health 
care resources at great cost to state and local law enforcement.
    As our legislation moved through the Judiciary Committee and Senate 
last year, we had the opportunity to work on specific concerns raised 
by South Dakota law enforcement officials and the US Marshalls service. 
I sincerely appreciate Senator Kyl's willingness to incorporate my 
language into the Federal Prisoner Health Care Copayment Act that 
allows state and local facilities to collect health care copayment fees 
when housing pre-sentencing federal prisoners.
    I also worked with Senator Kyl and members of the Judiciary 
Committee to include sufficient flexibility in the Kyl-Johnson bill for 
the Bureau of Prisons and local facilities contracting with the 
Marshals Service to maintain preventive-health priorities. The Kyl-
Johnson bill prohibits the refusal of treatment for financial reasons 
for appropriate preventive care. I am pleased this provision was 
included to pre-empt long term, and subsequently more costly, health 
problems among prisoners.
    The goal of the Kyl-Johnson Federal Prisoner Health Care Copayment 
Act is not about generating revenue for the federal, state, and local 
prison systems. Instead, current prisoner health care copayment 
programs in 34 states illustrate the success in reducing the number of 
frivolous health visits and strain on valuable health care resources. 
The Kyl-Johnson bill will ensure that adequate health care is available 
to those prisoners who need it, with out/straining budgets of 
taxpayers.
    I am pleased the Senate passed the Kyl-Johnson Federal Prisoner 
Health Care Copayment Act last year, and I am hopeful that the House 
will act on this legislation before the end of this session. A 
companion bill, sponsored by Representative Salmon, has bipartisan 
support and is now waiting action by the House Judiciary Committee. I 
look forward to working with members of the House on this important 
piece of legislation, and I once again thank Chairman Thurmond, Ranking 
Member Schumer, and Members of the Subcommittee for giving me the 
opportunity to discuss this issue with you today.
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