Private employers say they were pushed out of state prisons

Mark Milk, left, and Terry Van Zanten stand outside a Metal Craft Industries building and talk about changes at the state Department of Corrections. (John Hult/South Dakota Searchlight)

Early this year, Terry Van Zanten and his family began to empty out their work space inside the Jameson Annex of the South Dakota State Penitentiary in Sioux Falls.

It took months to move Metal Craft Industries out of the shop where maximum security inmates had worked for more than two decades, earning market-rate wages building parts for lawn mowers and other equipment.

To hear Van Zanten tell it, the Department of Corrections (DOC) bullied his company out the door.

There were unclear and unreasonable demands for change, he said, made with little guidance and a tighter timeline than he could manage without putting his business and clients in jeopardy.

Van Zanten saw Metal Craft’s DOC partnership as a benefit for prisoners , the prison system and taxpayers.

Former inmates lament loss of prison employer and its ‘family’ atmosphere

Inmates able to pay room and board are expected to, but most can’t. Van Zanten’s employees could. Between 2020 and 2024 alone, Metal Craft Industries paid $3.6 million in wages to its inmate employees, according to figures released to South Dakota Searchlight by the DOC. In that timeframe, those employees paid $219,000 into the state crime victim’s fund, more than $1.3 million for room and board and $219,000 in child and family support.

“They just threw all that away when they pushed us out,” Van Zanten said.

In DOC Secretary Kellie Wasko’s version of the story, the company chose to leave. Metal Craft didn’t want to comply with DOC mandates and left with “zero notice” in January.

“We did not get rid of the metal shop,” Wasko said during a recent Corrections Commission meeting. “We were partnering with the metal shop. The metal shop chose to leave.”

Wasko also repeated a line she used in the past: Metal Craft had a captive labor force, and most would never leave prison and use their skills on the outside.

She walked back previous DOC comments about how the shop “only” employed inmates with life sentences, but said “literally 95% of the people that were working in that shop were never going to get out of prison.”

“I saw that as cheap inmate labor that was going to put money in the pockets of the people running the organization, and not a benefit to our population,” she told the commission.

Unique place in prison

Metal Craft had a unique place in the state’s inmate employment framework.

The company’s ugly exit underscores how the DOC has quietly upended years of prison industry procedure since Wasko’s arrival in the spring of 2022. According to testimony in public meetings, that’s come in the form of a heightened focus on security protocols, budgets and job training for shorter-term offenders.

Around 1,300 inmates have jobs “within DOC facilities,” the DOC says, although that number fluctuates based on inmate population. Inmates do not work during lockdowns, one of which was ongoing at the time of this story’s publication.

Many jobs involve tasks like laundry, cooking or cleaning up.

There are around 170 inmates who work for state-run Pheasantland Industries , the umbrella term for shops where inmates translate books into braille for the South Dakota State Library; make road signs or press license plates; make beds, chairs and pillows for the DOC; and build cabinets for the Governor’s House program.

The DOC declined to say how many employees work in each Pheasantland shop “for security purposes.”

About 150 of the state’s working inmates at Mike Durfee State Prison in Springfield build the Governor’s Houses , which are sold to low-income South Dakotans, municipalities and nonprofits through the South Dakota Housing Development Authority, which itself is a nonprofit organization. Those jobs pay $1.50 an hour, triple the wage of a typical Pheasantland Job.

By state policy and federal law, the customers of Pheasantland Industries must be state or local governments or nonprofit organizations.

The former Metal Craft employees worked outside those restrictions and under an altogether different inmate employment framework than most of their fellow inmates.

The guards I’ve talked to say those inmates were some of the most well-behaved out there.

– Rep. Kevin Jensen, R-Canton

At the urging of former Gov. Bill Janklow, the business came to the prison through the federal Prison Industry Enhancement Certification Program . That program allows prisons to partner with private businesses and bypass federal laws against the sale of inmate-produced goods in interstate commerce, provided that the businesses pay a prevailing wage and meet other requirements.

Not everyone loves that.

A Corrections Commission member, labor representative Mark Anderson, agrees with Wasko. He’s never liked the partnership, and thinks the Metal Craft shop should’ve been training inmates more likely to leave.

Most prison industry work could be done in the private sector, he said. But in practice, he said, there’s value beyond cheap labor in putting inmates to work.

“You have to balance that with ‘does it give these guys a trade, so that when they get out, we don’t see them again?’” Anderson said.

A former Corrections Commission member, Canton Republican state Rep. Kevin Jensen, said Van Zanten’s shop was valuable to the DOC even if most of its inmate employees never walked free.

“The guards I’ve talked to say those inmates were some of the most well-behaved out there,” Jensen said during the most recent commission meeting.

Jensen argues that Wasko’s public version of the story doesn’t add up.

“It’s not a lie, but it’s an untruth,” Jensen said after the meeting. “Wasko said he backed away. Well, yeah, he backed away, but that was because he wasn’t going to be able to staff it properly with the inmates they were willing to share with him.”

Even Anderson, who was never a fan of Metal Craft, said that from what he’s learned about DOC’s actions, “it would appear to me that it was intentional on their part, to get rid of it.”

Dispute illustrates impact of policy changes

As of this week, three private companies – two of which were tied to the federal jobs program – remain listed as partners on a DOC webpage: Metal Craft, Badlands Quilting, and Hope Haven Ministries.

Just one of those partners still employs inmates.

Inmates at the South Dakota Women’s Prison no longer produce star quilts for Martin-based Badlands Quilting, which sells quilts across the country to Native American families to honor graduates, mark major life events or serve as gifts of sympathy to mourning families.

That private industry partnership began in 2018 and employed a largely Native American inmate workforce of around 20 women.

Badlands left the women’s prison in April.

Hope Haven still employs five inmates to build wheelchairs, DOC Finance Director Brittni Skipper said during the September Corrections Commission meeting.

The ministry used to have more inmate help. A story on Hope Haven, published last October in nwiowa.com, notes that members of Trinity Reformed Church had to step in and assist the nonprofit.

“For many years, most of the seating systems for the ministry’s pediatric wheelchairs were produced by inmates at the South Dakota State Penitentiary in Sioux Falls,” the story reads . “A shortage of prison guards led to a decline in production at the facility, however, and volunteers from Trinity stepped in to pick up the slack.”

A Hope Haven representative was unable to respond to inquiries from South Dakota Searchlight by the time of publication.

Details of change scant, scattered throughout public testimony

Wasko has never agreed to an interview with South Dakota Searchlight. The DOC has ignored most Searchlight questions on prison industries.

Details of the agency’s policy changes and their impacts have trickled out during public meetings of government boards and commissions and legislative committees.

When I walk through an institution and I see a hammer not accounted for, I go cross-eyed.

– South Dakota Department of Corrections Secretary Kellie Wasko

Pheasantland Industries was placed under the purview of the DOC’s finance office early in Wasko’s tenure. State law requires prison industries to be self-sustaining, and some of the shops were not .

Some areas were targeted for corrective action soon after the change. The prison’s metal shop, which operated separately from Metal Craft, has since been closed for failure to maintain profitability.

The state’s cabinetry shops moved to Springfield to be closer to the Governor’s House operation. The state Housing Development Authority handles sales for that program, which worked through its own hiccups recently.

Wasko said work slowdowns were necessary to tighten tool tracking protocols. It took time, she said, to align the construction zone’s long-term approach to its work sites with her newly strict prison security standards.

“It was, ‘this is a building site, and so we’re gonna leave hammers laying around,’” Wasko said during a summer appropriations committee meeting. “Well, when I walk through an institution and I see a hammer not accounted for, I go cross-eyed.”

What Wasko didn’t say was that the Housing Development Authority spent about $18,000 – of its own funds, not state general fund dollars – to get through what she called “pre-marital struggles” and set up an efficient work flow under the new security framework.

The authority designated one employee as a tool control supervisor, which was a new position. It paid $13,000 for cafeteria equipment to keep inmates on site longer. It also repurposed 2,000 square feet of an existing warehouse for a $5,000 upgrade to its inventory system.

That trimmed the time needed for the now-required tool check-ins from 45 minutes to about 15, Governor’s House Program Manager Mike Harsma told lawmakers during the summer appropriations meeting.

“It’s really a neat program where each individual tool now has an individual number assigned to it,” Harsma said.

Authority Director Chas Olson would later send the dollar amounts for the upgrades via email. He wrote that the inventory investments were worthwhile, with or without DOC mandates.

“Given the extensive range of tools needed for the program, we have long required a more efficient inventory system to enhance the safety of all Governor’s House staff,” Olson wrote.

Different story for private partners

Tool tracking was more contention than kumbaya at Metal Craft.

“We never knew what was going on,” Van Zanten said.

It wasn’t the tracking that Van Zanten objected to. It was the DOC’s rigidity on the transition, he said, which closed the shop for weeks at a time last fall and left his customers in the lurch.

He and the former inmates who now work for his new shop near Baltic insist that company tools were never found in a cell or used as weapons.

“They said they wanted us to mark every drill bit, every tool holder, and log it, which was what we were working on,” Van Zanten said. “But they wouldn’t let us open until we had it all logged.”

The DOC also wanted Van Zanten to transition to using Unit C inmates in his shop, rather than those classified as maximum security. Unit C is a work release center on the penitentiary campus.

But the new employees would need training from at least a few of the 40-odd maximum security veteran workers he already had, he said.

The DOC didn’t want that.

“They wouldn’t allow the guys that were working for us, the maximum security guys, to be in the building at the same time as trustees,” he said. “So we had nobody to train these guys.”

Around Christmas last year, he said, months after the DOC began to ask for changes at Metal Craft, the agency informed him they’d have to start using Unit C inmates exclusively on Jan. 3.

“It was a disaster,” Van Zanten said.

Lack of communication, curiosity about programs

Wasko has talked to lawmakers about “truckloads of contraband” at Metal Craft. She also talked about Metal Craft employees allowing inmates to use cell phones.

But Van Zanten said he’s never met her. The alleged problems with his operation came to him largely secondhand, he said, and sometimes defied logic.

Wealth of controversies, outbreaks of violence spark questions on prison oversight

The “contraband” Wasko referred to were tools used by employees, he said, as well as extra pairs of work jeans – safer to work in than thin, DOC-issued khaki pants – and personal protective gear.

Jon Dalen, a former correctional officer who quit last fall, recalls Penitentiary Warden Teresa Bittinger’s assessment of the area. She became warden in April 2023, years after Dalen began supervising Metal Craft for the DOC.

He was surprised to hear Bittinger refer to a welder as a weapon that could be used to start fires, and to hear concerns about the work wear. It was as though the new administration was unaware of the basics of an operation that had been around for decades, he said.

“They were saying, ‘Why do they have these gloves? Why do they have these pants?’” Dalen recalls. “We were like, ‘What do you mean, why do they have these pants? That’s approved, that’s all been approved by you guys.’”

The new penitentiary warden, Dalen said, “manipulated things to make it sound like there were a lot of bad things going on out there, and there were not.”

“I was out there for the last 10 years, and there were a lot of good things happening,” Dalen said. “This company was actually helping these inmates, helping families on the outside.”

The DOC ignored a request for evidence of contraband from South Dakota Searchlight, but reportedly showed pictures to lawmakers during a September tour of the penitentiary.

At this point, the DOC is in discussions on the future of the area that once housed the business.

The DOC submitted a letter of interest to Southeast Technical College earlier this year in hopes of adding a diesel mechanics training program to the area formerly occupied by Metal Craft. Nick Wendell, head of the state Board of Technical Education, said the board is supportive of the idea. Inmates already have access to a welding program through the school.

The Pheasantland metal shop, which was shuttered for failure to return a profit, is now used as an inventory station for commissary, the inmate store. About 20 inmates work there for wages that start at $1 an hour, Skipper told the Corrections Commission this month.

Quilting operation became unworkable

Vickie VanderMay, the owner of Badlands Quilting, also said she never met Wasko.

For her, the DOC’s changes felt like death by a thousand cuts.

The DOC did not respond to questions about the quilting shop.

As with Metal Craft, Badlands Quilting’s inmate employees earned a market wage through the federal private industries program, and were able to pay for room and board, fines and child support as a result.

Badlands employees paid $191,580 to the DOC for room and board between 2019 and 2024, according to figures provided through a records request.

There was no one to ask any questions. I had no one on my side.

– Vickie VanderMay, Badlands Quilting

The DOC no longer wanted VanderMay to have access to the shop after hours, she said, which she’d had for years. That allowed her to pick up inventory late in the evening after long days shuttling between her storefront in Martin, delivering to customers and collecting quilting supplies.

Phones were an issue, as well. The DOC didn’t want her supervisor using a cell phone in the shop, something VanderMay said was helpful for exchanging photos of quilts in progress or when employees had questions.

“I understand why they shouldn’t be in there, but we had to communicate back and forth,” VanderMay said.

The DOC installed a landline, but that meant VanderMay started getting a phone bill, and she lost the ability to share photos. There were also newly implemented rules about required searches for inventory coming or going, which often left delivery drivers with tight schedules waiting because the women’s prison wouldn’t always have a staff member available to perform the searches.

And then there were the inventories. Like Van Zanten, she said orders for change in tool control came with little instruction.

“At one point in time, they shut me down for a month because they wanted me to be compliant,” VanderMay said. “Well, then tell me what I need to do to be compliant.”

By April, she said, she’d also started to see utility bills, even though the DOC had always paid under the terms of her contract.

“There was no one to ask any questions,” VanderMay said. “I had no one on my side.”

The end of the relationship with the DOC was unfortunate, she said. Some of the women who started at the prison now work for her on the outside, and they continue to pay their bills and hold on to their sobriety.

That’s why VanderMay is especially sad for the supervisor who’d worked for her at the prison. Like nearly all her employees, the supervisor is Native American, and she took the cultural significance of the quilts seriously.

“She felt like she was doing ministry, doing good, teaching all these Native American girls to do star quilts,” VanderMay said.

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