December 2005 – Issue #2
"Looking Forward & Grateful for Good Health and Caring Support"
I have now served over 5 months of my sentence and, as should be evident from this newsletter, I have settled into the Lompoc Federal Prison Camp routine. I am looking forward to being home in Idaho with my beloved and supportive wife, Mary Ann, hopefully in September, 2006. This is the second newsletter for your review, based upon my life and impressions of conditions at the Lompoc Federal Prison Camp (“FPC”), and also this and other newsletters will include tax and estate planning comments.
With sincere thanks to my former law firm, now Ramsbacher Prokey LLP, I have received and reviewed articles, conference outlines, tax cases and planning memos respecting Family Wealth Planning, dealing with (i) IRS audit and litigation strategies on gift and estate tax matters, and (ii) practical family wealth preservation issues of interest to families. In fact, the necessary stepping back from active involvement in specific case matters caused by my incarceration has given me, I believe, a new, broader and perhaps more sensitive perspective on tax and estate planning. This will prove useful to consulting clients beginning in 2006.
The thoughts, impressions and comments contained in this newsletter are my own, based upon personal experience at camp, interaction with other inmates and camp staff, as well as extensive reading not only of tax and estate planning materials but also of many books on a variety of subjects. For example, Paton’s “Cry, The Beloved Country” is a classic novel with great meaning on the value of, and necessity to fight for, freedom. Another interesting book is titled “Guns, Germs and Steel - The Fates of Human Societies”, by Professor Jared Diamond. He stated, under the heading “Why Is World History Like An Onion?”, that his book “... attempts to provide a short history of everybody for the last 13,000 years.” Reading about that effort certainly places this tax lawyer’s life in perspective, as does studying the Bible and participating in classes analyzing and applying the Bible’s teachings.
Before continuing, I should state, by way of disclaimer, that my comments on tax and estate planning issues and their application to Family Wealth Planning are those now of a non-lawyer merely presenting information, not recommendations for any particular person or family. No tax or other legal advice is intended or can be given by me (although I can apply for reinstatement as a lawyer in California in 4 more years). The reader is referred to his or her own legal advisors for all tax and other legal opinions. Nevertheless, I base my comments in part on over 40 years of hands-on experience in working with families as clients interested in preserving and managing wealth. Such experience has involved much more than taxation.
My Present Status
The sentence of the federal district court which began with my July 1st self-surrender at Lompoc was specified to run through the end of 2006 (18 months). However, under the policies of the Bureau of Prisons (“BOP”), first, my actual release date, net of presumed “good time”, is October 22, 2006. In addition, under federal statute, I am also entitled to “pre-release custody” of 47 days, meaning a transfer on or about September 6, 2006 to a “halfway house” in Idaho or possible directly to Home Confinement at our home in Syringa, Idaho. Thus, my hope is that I will be back with Mary Ann in Idaho in early September, just 8 months from now!
Given that some of my fellow inmates are serving federal prison terms of as long as 20 years or more, having less than a year to go turns my thinking daily to the future in a positive manner. I have faith in God, in my own abilities and in the support of family and so many clients, professional associates and other friends. Having faithfully participated in a yoga class three times per week, plus regular spurts of walking, I also feel good and pray for continued good health.
On this past July 1st, after being “processed” into the camp over at the penitentiary and receiving uniforms and bedding, I fell into a fitful sleep in my assigned lower bunk in Alpha dorm. During the night, after a couple of hours asleep, I woke with a start, disoriented and initially believing I was camping somewhere by a glowing fire. But the noises I heard were men coughing or snoring, the dorm ceiling heaters kicking on and off (5 of 7 heater unit bearings were later discovered to be worn out, and eventually were fixed), and the red lights were Exit signs. Yes, there were bars on the windows – but the doors were open (it just is the rule that after 11:00 p.m. inmates are not to leave until after the 5:00 a.m. bedcheck). I am happy to say that, after these few months, I can sleep well whether the lights are on or off and regardless of the noises from the other 170-plus inmates in this one level dorm.
Freedom Is More Than A Concept
I have lost much of my freedom and have read a lot in recent months about the subject of freedom. I realize that freedom is much more than a concept, or a political or military crusade. I for now am not free to be with Mary Ann or my family and friends - except during the limited visiting times each weekend. Also, I am not free to travel within or outside the United States of America. I cannot choose what to wear beyond work clothes and workout clothes. I have limited access to the telephone (and no calls in are allowed) and I have no computer access. Other than some commissary items available for purchase (most of which are unhealthy), I eat what is provided all inmates - sometimes even, for example, in one meal having available bean and “meat” burritos and a selection of three other types of beans!
But only a portion of my freedom has been lost, and even that will be returned to me this coming year. I still have the freedom to think, to recall knowledge and experience, to love my wife and family, to write more letters than I have written my entire life, to pray and to worship (Mass is celebrated for inmates and their visitors each Sunday), to receive and enjoy mail, to read, to think of how to improve myself and to be a better husband, father, grandfather and friend, and finally, to see - really see - the beauty of life and our world. All of these freedoms are significant and now are more appreciated by me than ever before during my life. I hope the reader will appreciate the positive side of my being forced to step out of all the trappings of success and relatively unbridled freedom. I truly do appreciate it, and I’m committed to continue to serve my sentence with honor and dignity in a positive and productive way.
Life At The Lompoc Camp
The next few paragraphs will summarize life and activities at the camp. While I am doing well, in my view, certainly this is not a voluntary exercise or a retreat situation. A dorm neighbor of mine read me the following Mark Twain quotation, which sums up my own feeling about this Federal Prison Camp in a fashion: “The Cat, having sat upon a hot stove lid, will not sit upon a hot stove lid again. Nor upon a cold stove lid.”
The Federal Correctional Complex (“FCC”) at Lompoc, California is adjacent to Vandenberg AFB (we witnessed the last Titan rocket launch recently!) and is comprised of three separate institutions, with over 3,000 total inmate population, including a medium security Federal Penitentiary, a low security Federal Correctional Institution and the Federal Prison Camp (“FPC”) where I am assigned. The camp is the lowest level of federal incarceration. Here the FPC has approximately 350 inmates, only one armed guard on duty 24 hours every day, and some non-custody personnel, such as case managers, supervisors, etc. Of course, there are armed guards available nearby, and even those having “on call” “SWAT team” capability. Occasionally, we hear the BOP personnel shooting on a nearby practice range. But, thus far, no signs of firearms here in camp.
President George W. Bush on more than one occasion has proposed a “second chance” (early release) program for first time non-violent, non-drug offenders, suggesting that if the guard (unarmed) to inmate ratio is 200-400 inmates to 1 guard, why have the camp at all? Currently, H.R. 3072 and H.R. 256 are working their way through the U.S. Congress, including reinstitution of federal parole (abolished going forward in 1987), early release of inmates over 45 under certain conditions and other changes to reduce the inmate population. The prospects for those and other prison reform bills apparently are rather dim in spite of there being no new prisons under construction, typical overcrowding, budget shortages and the like.
The FPC-Lompoc is a “work camp”, complete with a farm operation for row crops and corn silage, a dairy, a meat processing plant, Unicore - manufacturing cables and other products with inmate-cheap labor, building maintenance and remodeling/repair, grounds maintenance, food service, laundry and clothes exchange operation, and on and on. My present job is as the visiting center orderly - floor mopping and buffing, cleaning windows, dusting, cleaning 3 bathrooms (His, Hers and us (inmates)), grounds maintenance, including the garden where visitors sit with their loved ones and friends who are inmates (weekends, Federal holidays), and the kiddies’ play area. Generally, on weekends, we also have evening movies, requiring set-up and clean-up. With one helper, this job keeps me busy. Oh, yes, I am paid (credited to my commissary account each month) at the rate of 12¢ per hour! As many readers will know, I very much enjoy gardening, and so my visitor center job in that regard also is enjoyable - especially as the gardening, weeding and watering seems appreciated by the visitors.
However, there are some definite reminders that the camp is a prison environment, even with there being only split-rail wooden fencing in and around camp and the relative freedom to walk around on the inmate’s free time. First, inmates are housed in two dormitories, Alpha and Beta, each with about 175 inmates - rows of double (upper/lower) bunks, lights on and off at fixed hours, evening bedchecks at 10 p.m., midnight, 3 a.m. and 5 a.m. Then there are stand-up counts (unless during the week inmates are away at work) at 10 a.m. and 4 p.m. If a count doesn’t match the inmate population, then there progressively is a recount, a “book count” (picture, register number, name matching) and “lock-down” until the error is discovered and eliminated. Of course, although rarely, the missing inmate could have walked off - easy to do, but not often done due to the “long arm of the law”. The fact is that persons who are inmates at camp either are “short-timers” (i.e. from 6 months to a couple of years’ sentence) or those with longer sentences, up to over 20 years, that have worked their way “down” the system to camp before their pre-release to halfway house and/or release, subject to probation. Walking away from camp as an escapee makes no sense.
I have had a couple of “pat-down” searches at random and also one breathalyzer test - the latter at near midnight. When my dorm was tested, several inmates went to the “hole” due to alcohol being on their breath. The “hole” (solitary confinement of sorts) is over at the pen, and, without going into a detailed description (heresay, as fortunately I haven’t been sent there), it is what most readers would imagine from the movies or reading about prisons.
The BOP self-insures its inmates for medical and dental needs, but it appears that, if possible, one should not suffer a serious illness or accident here. One inmate fainted in my dorm awhile back, was taken to the medical clinic building in camp and given an EKG. Whereupon the PA (physician’s assistant) stated the inmate was suffering from acid reflux disease. After a second EKG showed something else was going on, the fortunate inmate was taken to the hospital where the next day a stent was placed in a nearly clogged artery! Inmates have been forced to wait for months on end for serious hernia operations, knee and shoulder surgery, and on and on. So being healthy is a blessing and staying healthy is wise.
For athletics and recreation, the camp (which no longer has a 9-hole golf course, due to a CBS 60 Minutes expose’ years ago) has a track of sorts, soccer field/football field, baseball diamond and field, volleyball and basketball courts and the “weight pile” (weights and exercise machines, bars and the like of about every type imaginable, but without electricity). I have been in a yoga exercise class since late July and walk regularly. The weather at Lompoc, on the California Central Coast, is pleasant and generally cool, although fog and wind often are weather factors.
In exchange for a nice thick mattress provided by an inmate, I agreed awhile back to become an “owner” (sponsor) of a flag football team, and promptly named the team the “Lompoc Packers”. However, the young quarterback, a Mexican-American with a good arm, was “Bulldog” so the team goes by the “Bulldogs”. I report with great pleasure that we just won our third straight game, having lost a few earlier. So we are better than the SF 49ers! In celebration of the victory, the evening of my writing this newsletter piece, we had a homemade feast (the best meal I have had since arrival at camp) – beans, rice, and a stew-like combo of “steak”, onions, etc. Excellent with chili peppers, tortillas, and Pepsi! Now back to the details of camp life.
There is a “law library” building which houses many, many hardbound and soft back fiction and non-fiction books, legal materials and treatises, court forms and the like. There are no computers (or cell phones) permitted. For all interested inmates, there are 6 very old, but working IBM Selectric or Wheelwriter typewriters (we must buy our own ribbons). Generally, outgoing mail, properly addressed, is not opened by BOP, but all incoming mail is opened and checked for “contraband” (i.e. any item not provided the inmate by BOP or purchased by the inmate at the commissary).
No cash is permitted in the camp, so the medium of exchange among inmates for commissary bought products or otherwise, is the 37¢ (soon to be 39¢) postage stamp or out-and-out barter. We can only buy 3 stamp packets (20 each) per week at the commissary. There are 10 telephones set up in two kiosks outside the dorms, and the inmate’s telephone account is credited by transfers from his commissary account. Our telephone calls, no matter where to within the USA, are about 23¢ per minute, 15 minute maximum per call with a 15 or so minute delay between calls required. 300 maximum minutes per month for each inmate (400 minutes per month for the holiday months of November and December) are allowed. Telephone calls apparently all are recorded, and at any time may be listened to by a BOP person with authority to cut off the call for any reason (or, perhaps for no reason).
The demographics of the inmate population include substantial numbers of blacks, browns and caucasians, as well as a few orientals. The offenses represented include drug and immigration offenses, tax crimes, securities law violations, mail fraud and that wonderful “catch-all” for the Department of Justice - conspiracy to do anything prohibited by law. One Colorado rancher is here for violating the Federal Clean Air Act - 5 months at FPC and 5 months Home Confinement for allowing (unreported) a spill of gas well brine water outside on the ground (a spill) before being pumped down a deep “disposal well”. Of course, the reader probably by now will be thinking that all of us inmates put ourselves here, and that certainly is true in most cases.
An Inmate Author
I have made a number of friends here at camp, but one is rather unique. Shortly after I arrived at camp, Michael Santos also became a “camper”, transferring here from another federal correctional institution. He is serving, net of “good time” credit, a 26 year sentence, and is a drug offender incarcerated since he was 23 years of age. Michael already has served over 17 years of his net sentence. He has become a prolific, well-recognized author in the areas of prison life, inmate challenges and the impact on families of inmates. Michael’s website is www.michaelsantos.net and there one can find numerous articles and several books on prisons and prison life authored by him. One of his articles sets out a day in the Lompoc camp, and readers of this newsletter may find it quite interesting. I have been most impressed by this friend’s enthusiasm and positive thinking. He looks forward to life on the outside as an author and lecturer on how inmates and their families can cope with prison life and its aftermath.
Turning to Family Wealth Planning
As many readers of this newsletter are already aware, Family Wealth Planning (traditionally called “estate planning”) is a broad concept encompassing people and their goals, property in all its aspects, and the issues of advance planning and concentration on both preservation (as well as building) of capital and its management. With the future of the Federal estate tax in balance over the next couple of years and the tax bites of states on the rise, existing plans clearly should be reviewed and new plans instituted to take into account everything from succession control techniques to modern principles of trust management and investment principles.
So suggested as a worthy goal for the estate owner and his or her family is that early 2006 should be a year of complete review of existing plans and exploration of new alternatives. That first requires consideration of the composition of advisors comprising the estate planning team, with the estate owner as the team leader and decision maker in the ultimate sense.
From the tax standpoint, i.e. the Federal transfer taxes (gift, estate and generation-skipping transfer or “GST” tax), updated planning uses of life insurance, charitable giving and asset or business valuation techniques must be weaved into the plan, once family, business and investment goals are determined and tested.
Based on my personal experiences in this area over the past 40-plus years, this is a significant and time-consuming job for any family. However, the stakes are high, and in future issues of this newsletter I will outline certain specific tax, management and administration techniques worthy of consideration. This process logically will lead to my Fall, 2006 reestablishment of a wealth and valuation planning consulting practice.
Thank You and Happy Holidays
I of course look forward to the year 2006, when in September I will leave the FPC and return to Idaho. I thank you for reading this second newsletter and hope you will watch for future issues on various topics.
During this holiday season, Mary Ann and I have much to be thankful for, including our love, health and family. I extend to every person reading this newsletter very best wishes for the Christmas and New Year’s holidays. I hope that the year 2006 will be happy, healthy and prosperous for every one of you, and also hope that many of you will write or email me. As you know, our son Mark will mail me a hardcopy of each email.
Sincerely and best wishes,
Owen Fiore
