Spending on $ 17 billion federal loan fund comes under scrutiny, including Arkansas spending on prison labor
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The Washington Post dug into The Trump administration is using a $ 17 billion federal loan fund for businesses critical to national security.
The Post said the money had gone to help “a mishmash of little-known businesses whose importance to national defense is unclear, and the fund remains mostly unspent nearly eight months after that. Congress approved it as part of a $ 2 trillion stimulus bill. “
A recipient of a $ 2 million loan was SemahTronix, an Arkansas company which uses low-wage Arkansas prison labor to make wire harnesses for military and commercial customers. He also secured an SBA loan of between $ 350,000 and $ 1 million under the coronavirus relief legislation. The Post reported:
As of June, the company employed 97 inmates as part of a business with the Arkansas Department of Corrections, according to a report of the National Correctional Industries Association (NCIA), which reviews prison employment programs. The company website says its “innovative partnership” with the state prison system dates back to 2006.
SemahTronix chairman Travis Atkinson declined to comment. Arkansas Corrections spokesperson Cindy Murphy said 66 inmates and 39 inmates currently work for SemahTronix, earning between $ 10 and $ 10.21 an hour, which is roughly the minimum wage for the Arkansas.
NCIA data shows that for the three-month period ending in June, the Arkansas Correctional Service deducted, in total, approximately 63% of the wages of SemahTronix inmates to cover expenses such as “room and board”, taxes, family support and victim programs.
Thus, inmates earn less than $ 5 an hour after paying for “room and board”.
According to its website, SemahTronix started in 1977 in Flippin and, then known as Actronix, started a manufacturing business at Newport Prison in 2006. Actronix was purchased and renamed in 2017.
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