A privately owned work-release program in Covington run by close allies of St. Tammany Parish Sheriff Jack Strain has been closed since March, when an inmate escaped and allegedly kidnapped his ex-girlfriend.

In the wake of that episode, state Department of Corrections Secretary James LeBlanc said he would no longer allow local sheriffs to outsource work-release programs without first going through a competitive selection process — a step Strain had skipped when he hired Northshore Workforce.

A month later, LeBlanc said he hoped to provide a model for good governance in setting up a large new work-release program the state envisioned in southwest Louisiana at the old Phelps Correction Center, amid an industrial boom in the region.

The DOC wrote up an elaborate solicitation, and representatives of six private outfits plus the Beauregard Parish Sheriff’s Office attended a pre-bid conference.

But the hoped-for competition never materialized: The state got only one bid.

It came from a joint venture of the Beauregard Sheriff’s Office and a politically connected company called Louisiana Workforce LLC, which is owned by Paul Perkins, a former longtime DOC employee and ex-business partner of LeBlanc and Angola warden Burl Cain.

Over the past five years, Louisiana Workforce has quietly come to dominate the state’s lucrative and obscure world of privately run work-release programs, which allow private owners to profit handsomely from the labor of captives. Perkins, the company’s owner, says the company’s success is a function of quality. But he also has assiduously courted the favor of sheriffs around the state by donating to their political campaigns, and he also boasts unmatched relationships with DOC’s top brass.

Under the joint venture’s proposal to operate the program at the old Phelps prison, the sheriff would contract with the state, while Louisiana Workforce would run virtually every aspect of the program and keep most of the money that inmates earn.

Why the other interested bidders all bailed is anyone’s guess. But one of them, Lee Mallet, owner of the Academy of Training Skills, which runs a similar program in Lacassine near Phelps, noted in an interview that Louisiana Workforce always seems to have an inside track.

“The Department of Corrections has a longstanding relationship between some people in the business, and sometimes, you know, it’s just better not to go,” Mallet said of his decision to fold. “That’s about the best way I can say it’s just better not to get in the middle of something that you don’t feel real comfortable with.”

Cornering a new market

There’s broad consensus that work-release programs are a good thing: They allow inmates to acquire job skills, save a bit of money and prepare for life on the outside. At any moment, almost 10 percent of Louisiana’s nearly 40,000 state prisoners are in such programs.

Most are overseen by parish sheriffs, some of whom run the programs in-house and use the profits from inmate wages to finance other operations. But increasingly, sheriffs have begun to contract with private firms like Louisiana Workforce, which, with the Phelps contract, will soon oversee about 1,200 inmate laborers.

Under state rules, work-release operators can keep up to 62 percent of an inmate’s gross wages; they also sell prisoners commissary items and telephone service. On top of that, they keep a portion of the $15.39 fee that DOC pays each day to feed and house each work-release inmate.

Proponents say such privately run programs are superior because their operators have a stronger incentive to get inmates the highest-paying jobs they can, because the profits accrue to the operator.

State prisoners become eligible for work release when they have less than three years left in their incarceration. It’s up to DOC to determine when an inmate is ready, and work-release programs thus operate at the mercy of the department.

The fortunes of work-release programs rise and fall not only on how many inmates the state sends them but on their skill sets. Because most of a program’s income comes from inmate wages, a prisoner who is, say, a welder is much more valuable than one whose most marketable skill is washing dishes.

Luckily for Louisiana Workforce, it has enviable connections to the state department that provides its lifeblood.

The firm’s owner, Perkins, has known LeBlanc, the department’s secretary, for decades, though they worked together only briefly, according to Perkins. LeBlanc was warden of Dixon Correctional Institute, and Perkins was his deputy.

Before that, Perkins had risen to the No. 2 position at the Louisiana State Penitentiary at Angola under longtime warden Burl Cain, whom he portrays as a near-god.

“I was so fortunate to work for him all those years,” Perkins said. “He gave me so much direction in life.”

The affection is mutual. Cain described Perkins in a recent interview as a “really good friend” who is “like a son to me, because I raised him.”

The careers of Cain and LeBlanc, meanwhile, have intertwined over the years, and Cain calls LeBlanc “one of my very best friends.” At a Sept. 22 ribbon-cutting for Perkins’ latest venture, a major expansion of Louisiana Workforce’s work-release operation in Livingston Parish, Cain attended in LeBlanc’s stead.

Business ties

The friendship among the three men has spilled over into business at times.

The trio formed a corporation together called Security Workforce shortly after Hurricane Katrina in 2005, according to state records. They all say the goal was to provide private security to companies after the storm but that the firm never amounted to anything. In the company’s 2008 report to the state, Cain and LeBlanc were removed from the company masthead.

In 2010, Security Workforce also was the purchaser of a building that houses the work-release program in Iberia Parish. Perkins signed the closing documents, records show.

A few months before the three men formed Security Workforce, Cain and LeBlanc started another corporation, Audubon One Stop, that both have described as a convenience-store business.

A partner in that venture, Ronald Jett, also was a deputy warden at Angola; in 2008, Jett sought an opinion from the Ethics Board on whether he could employ inmates in work-release programs at his stores. The board said he could.

LeBlanc and Cain both reported selling their shares in Audubon One Stop that same year.

More recently, Cain sought and received an opinion from the Ethics Board allowing him to do consulting work for Louisiana Workforce for a fee or an ownership stake.

In order to get a favorable opinion, Cain had to persuade the board that he had a very limited role in feeding the inmate pipeline that provides Louisiana Workforce’s labor force. His packet to the board included a letter from a DOC official that said he, like all Louisiana prison wardens, could recommend particular inmates for work release but that final approval is made at DOC headquarters by the head of the Office of Adult Services.

In November 2012, the board tentatively OK’d Cain’s outside work. But it also warned Cain that ethics laws would bar him “from participating in the recommendation, even though you do not make the final decision, to transfer an inmate to any … program with whom you are providing part-time consulting services, including Louisiana Workforce LLC.”

Cain said in a recent interview that he’s never had to navigate that terrain, because despite getting the Ethics Board’s blessing, he’s never done work for the firm.

“I don’t have any connections to Louisiana Workforce other than Paul Perkins is a really good friend and used to work for me as a deputy warden at Angola,” he said.

In 2006, years before Cain sought that opinion, LeBlanc also got the Ethics Board’s permission to either consult for or acquire an interest in an unspecified work-release program. But he says he’s never taken advantage of it either and said he simply was looking into his options in retirement before he became DOC secretary.

As a high-ranking state official, LeBlanc must fill out an annual disclosure of his sources of income; on it, he lists only the DOC and a state employee’s retirement fund as sources of his income, which he put at $214,808 last year.

Cain’s most recent financial disclosure was filed in the calendar year 2010. As a warden, he is not required to fill out a detailed disclosure.

Perkins said Louisiana Workforce always has stayed within the lines of propriety.

“You will never, ever, ever find that I have done something wrong with my company,” he said.

He added: “Y’all are looking in a hollow hole. I don’t even let an inmate wash my vehicle. I’m as straight as straight can be.”

Perkins said Cain had explored working for Louisiana Workforce because he was considering retiring from DOC, adding that he would love to have Cain as an employee because “he’s so creative, so damn good at what he does.”

The ethics opinion Cain sought contemplated him working for Louisiana Workforce while keeping his job at DOC. But Perkins said he thought doing both jobs at the same time would be a big mistake, even if the Ethics Board approved it.

“That would be like a suicide mission,” he said.

Connections and cash

Perkins’ connections go beyond the DOC. Since leaving the public sector in 2005, Perkins has made it a point to cultivate political relationships outside the department, especially with sheriffs.

He is one of the state’s most active campaign donors, giving roughly $140,000 in the past five years, records show. Local sheriffs were the biggest recipients, in particular those who have hired Perkins to run their work-release programs, who have received $34,790.

Perkins hasn’t neglected the top of the food chain, either. Perkins also has given $15,000 to Gov. Bobby Jindal — who is LeBlanc’s boss — and $20,000 to Lt. Gov. Jay Dardenne, who hopes to replace Jindal as governor in next year’s election. Scott Angelle, who recently announced his entry into the 2016 governor’s race, also got $500 from Perkins in 2012.

The Jindal administration has brought a wave of privatization to state government, in areas ranging from education to health care to corrections.

Jindal didn’t introduce private prisons or work-release programs to Louisiana, but when he sought to sell some state jails, Louisiana Workforce was among the interested bidders. And under Jindal’s watch, private work-release programs, which were rare a decade ago, have proliferated.

Louisiana Workforce has quietly established itself as the dominant player. The company now runs programs in five Louisiana parishes; the facility at Phelps, when it opens, around the first of the year, will be its sixth, and largest, operation, with up to 350 beds. Around that time, the DOC will end its relationship with a nearby work-release facility called CINC that it has contracted with for many years on the grounds that the region may not be able to support so many transitional work programs.

After Phelps, Louisiana Workforce’s next-largest facility is in East Baton Rouge Parish; it has 222 beds, according to the DOC.

Once the Phelps program is up and running, on a typical day, the company will have perhaps 1,200 inmates toiling on its behalf, about 3 percent of the state’s entire prison population.

It’s hard to say how much money that generates for Perkins. Each work-release program must report to the DOC how much its inmates earn during the month and how much the program retains. But they are not required to report how much of that is profit.

?If Louisiana Workforce’s laborers are making an average of about $12 an hour, and the company keeps $5 per day for each inmate it houses, its receipts over the course of a year would total more than $20 million once the Phelps facility is up.

Perkins says profits in the work-release business are marginal at best. He had to close programs he once ran in Pointe Coupee and St. Martin parishes because they were losing money.

“I’m not greedy,” Perkins says, adding that he’s never charged an inmate for a visit to the nurse, though he’s allowed to assess a $3 fee. “I have to work really hard to make ends meet.”

Still, Perkins clearly sees enough profit in the business that he’s willing to spend heavily on political contributions.

It would be a mistake, however, to assume that he gets all of his work through such largesse, Perkins said, noting that he got the Phelps contract without giving Beauregard Parish Sheriff Ricky Moses “a dime” in contributions.

“He called me,” Perkins says of Moses. Moses, in a phone interview, confirmed that, saying other sheriffs had recommended Perkins’ company to him.

To sheriffs, Perkins is more than a reliable campaign donor. In most parishes where Perkins operates, he allows the sheriff to keep roughly $10 of the per-diem payment the DOC sends for each prisoner. That adds up: A typical facility has 200 beds; if they’re full every day, that works out to $730,000 a year for the sheriff, who typically doesn’t have to do anything for the money.

In most cases, Perkins also pays the sheriff’s office rent of several thousand dollars per month. It’s hard for sheriffs to pass up.

In Livingston Parish, Sheriff Jason Ard is using his office’s money to pay for a new building to house the work-release program run by Louisiana Workforce, which will double in size. With the program generating close to $1 million a year for the Sheriff’s Office in rent and per-diem payments, the building will be paid off in four years, Ard said.

After that, Louisiana Workforce’s payments will simply help shore up the sheriff’s budget, which totals about $26 million per year.

In Terrebonne Parish, Perkins contributes about $1 million to Sheriff Jerry Larpenter’s budget each year. The program — one of Louisiana Workforce’s largest, with many inmates working offshore — operates out of a building that was given to the Sheriff’s Office.

“To have a free building that was donated to me by a friend and to collect $1 million a year, you can’t beat that,” Larpenter said.

Red flags

Most sheriffs who contract with Louisiana Workforce say they’ve been pleased. At a minimum, the payments from the company have helped keep their budgets in the black, and most report relatively few other headaches.

Capt. Ryan Turner, of the Iberia Parish Sheriff’s Office, called Louisiana Workforce, which employs many former DOC employees, “an extremely professional organization.”

Its program “definitely benefits the offenders and helps with recidivism,” he added. “These guys are learning how to re-enter society. And some of them have a substantial amount of money when they get out of the program.”

LeBlanc said the DOC, which inspects all work-release programs, has had “good success with Louisiana Workforce, I believe the name of it is. They’ve been good partners with the sheriffs.”

Not every operator of a private program has gotten such good reviews from the DOC, which inspects the programs and can order them shuttered. A Lafayette work-release program was shut down in 2008 amid questions about whether it had failed to pay inmates for their work.

In 2010, a program in New Iberia closed after complaints about escapes and other issues; Iberia Parish Sheriff Louis Ackal quickly turned the program over to Louisiana Workforce.

More recently, Northshore Workforce’s facility in Covington was shuttered by Strain and the DOC after a series of escapes and questions about management. It remains closed and is under investigation by the state inspector general. There are no immediate plans to reopen it, according to a Strain spokesman.

Louisiana Workforce has attracted some unflattering attention at times as well, although none of its programs has ever been closed as a result.

The state’s inspector general issued a report in November 2010 that said Louisiana Workforce employees forged or otherwise altered dozens of employer work-release forms as well as inmate authorization forms when they learned the DOC was about to make a site visit to its facility in East Baton Rouge Parish.

One employee, assistant warden James Felker, admitted forging at least 26 forms, and the IG’s report made clear that other high-ranking Louisiana Workforce officials knew about the subterfuge.

In a written response to the report, Perkins said the employees in question “have been disciplined accordingly,” though he didn’t specify the punishment. And he said the firm in the future would “have independent auditors conduct random inspections” of company records.

LeBlanc also filed a response to the report, in which he indicated that the IG’s recommendations, for the most part, had been implemented. He noted that the DOC “has no jurisdiction to discipline the staff of Louisiana Workforce” but added that “it is our understanding that disciplinary action has been taken.”

Last year, the state’s legislative auditor issued a report questioning the use of inmate labor by Vernon Bourgeois, then the sheriff of Terrebonne Parish, to fix up a building used by Louisiana Workforce’s work-release program. The labor was worth about $350,000, the audit found.

Though the building was owned by the Sheriff’s Office, the audit noted that, under the terms of its contract, Louisiana Workforce was required to pay all of the costs of equipping and maintaining the building. The donation of inmate labor by the Sheriff’s Office may have violated the state constitution, the audit said.

In a response to the audit, Larpenter, the current sheriff, wrote that because the Sheriff’s Office owns the building, it benefits from the improvements and will continue to do so after the contract expires. He agreed, however, that the work appeared to be outside the scope of the contract and added that “all future contracts between the Sheriff’s Office and individuals will be closely followed.”

In a recent interview, Larpenter added that he believes Louisiana Workforce is “a very legitimate company.”

“That may be the only game in town,” he said. “I don’t know of anyone else. I know some sheriffs are operating their work release and I’m hearing horror stories from some of them. I haven’t heard any horror stories from Mr. Perkins.”

Staff writer Steve Hardy contributed to this story. Follow Gordon Russell on Twitter, http://www.theneworleansadvocate.com/home/8624887-172/st-tammany-sheriff-shuts-downhttp://www.theneworleansadvocate.com/home/9112867-172/la-to-require-bids-onhttp://www.theneworleansadvocate.com/home/7343364-172/work-release-contractors-have-links-tohttp://www.louisianaworkforcellc.com/http://www.aattss.com/http://ethics.la.gov/PFDisclosure/PFD14003047/EthicsDisclosureDownload.pdfhttp://oig.louisiana.gov/assets/docs/reports/CID-11-009.pdfhttp://app.lla.state.la.us/PublicReports.nsf/0/0741C3ED8A27102B86257BB000693AFC/$FILE/0003418B.pdf">@gordonrussell1.