I believe you are right, even though there are laws forbidding such behavior in facilities such as Straight, somehow, people seem to find a back door.. and if you've been around long enough, you will find a back door to nearly everything in normal everyday life.. even a job.
I think someone may have been paid a high price to keep their mouth shut of what they saw or heard about, either that or was "forced" into signing a confidentiality form which would empower the facilities like Straight Inc. to go over and beyond what laws were written.
Of course this is ENTIRELY speculation on my behalf. I don't know how they got around to not knowing about most of this.. the world has always been about money and power. I'm sure Straight had more than enough to even buy off the high officials and than some!