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With 2.3 Million People Incarcerated in the US, Prisons Are Big Business

Meet the corporations who are profiting off our prison system.

October 1, 2013

(Reuters/Joshua Lott)

“Global Tel* Link. You have a collect call from: ‘Tim.’ An inmate in Shelby County Correctional Facility…. If you wish to accept and pay for this call, dial zero now.”

I don’t know how many times I heard the same robotic voice speak these words since last fall. I was researching the story of Timothy McKinney, a Memphis man facing his third death-penalty trial for the killing of an off-duty police officer in 1997. Tim would call from Shelby County Jail, to answer my questions and to do what anyone facing trial would want to do: air concerns about his case, vent. Sometimes he would call multiple times a week. Because the phone calls were limited to fifteen minutes at a time, a couple of times he hung up and called right back, so we could keep talking.

The calls were expensive, more than a dollar per minute, depending on the time of day. In order to accept one, I had to set up a prepaid account with Global Tel* Link, or GTL, “The Next Generation of Correctional Technology.” If Tim called and my account was out of money, the automated voice would prompt me to replenish it via credit card, while he waited on the other line. “By accepting an inmate call, you acknowledge and agree that your conversation may be monitored and recorded,” the company advises.

I dealt with Global Tel* Link for only a few months. But for Tim’s relatives, this had been their reality for years. GTL makes more than $500 million a year exploiting families like his, who face the choice between paying exorbitant phone rates to keep in touch with incarcerated loved ones—up to $1.13 per minute—or simply giving up on regular phone calls. Like many other telecommunications companies that enjoy profitable monopolies on prison and jail contracts across the country, GTL wins its contracts by offering a kickback—or “commission”—to the prison or jail systems it serves. As an exhaustive 2011 study in Prison Legal News explained, the kickback is “based on a percentage of the gross revenue generated by prisoners’ phone calls…. [The] commissions dwarf all other considerations and are a controlling factor when awarding prison phone contracts.”

The higher a kickback, in other words, the more likely a company is to win the contract. These high kickbacks translate into higher phone rates for family members—usually the very people who can least afford it. Like the vast majority of those who pass through the massive jail and court complex known as 201 Poplar in downtown Memphis, Tim’s family was not wealthy. When it came time for his trial last spring, his mother would be in court every day, only to leave straight for her night job, cleaning office buildings.

Global Tel* Link is one of five companies profiled in a new video series called “Prison Profiteers,” a collaboration between Beyond Bars—a Brave New Films project—the ACLU, and The Nation.With 2.3 million people incarcerated in the United States, prisons are big business; the goal of the series is to expose the myriad ways people enrich themselves off crime and punishment. Defenders of for-profit prison services pitch them as superior, efficient, money-saving options for cash-strapped states and localities that can ill-afford the costs of mass incarceration. (And indeed, historically, state-run services have often proven abysmal in themselves.) But not only do such privatized services often end up more expensive in reality, they can incur huge unseen costs to inmates and their families.

Watch the first video in the Prison Profiteers series from Beyond Bars, on telecommunications company Global Tel* Link, and check back here each Tuesday for new videos.

Worse still are the implications on a larger scale: when corporations seek to profit from prisons, it creates a powerful financial incentive, not just to push for policies that fuel mass incarceration but to cut corners in the services they’ve been hired to provide. Society shows little concern for prisoners who might receive substandard food, phone service or healthcare behind bars, after all. In the prison equation, the real consumer is the state, whose own financial priorities often run counter to the needs of prisoners and their families.

The cost for families is not just financial. The Global Tel* Link video features 9-year-old Kenny Davis at his home in Nashville, Tennessee. Kenny’s father is housed in a private prison four hours from where they live. “Phone calls are a problem,” Kenny’s mother says, “because they cost too much.” So Kenny rarely talks to his father. Ideally, he says, he would talk to him once a week.

Some 2.7 million children have parents who are incarcerated. Preventing them from having regular contact with their moms and dads isn’t just bad for these kids. All the evidence shows that prisoners who maintain close family ties fare better upon release. Making it harder for prisoners to stay connected with their families is not only needlessly punitive and cruel, it is unwise from a public safety standpoint.

But, for all their rhetoric to the contrary, prison profiteers are not as concerned with public safety as they are with the bottom line.

“They Have No Protocol for Treating Anybody With Hepatitis C”

The human cost of prison profiteering is especially pronounced and disturbing in the video about Corizon, the largest prison healthcare company in the country. In it, we meet a Tucson woman named Eleanor Grant, who receives a phone call from her partner, Thomas, incarcerated since 1994. Thomas suffers from an enlarged prostate, among other problems, and the prison medical staff will not give him the medication he needs to cope. “I’m in constant pain,” he tells Eleanor, sounding like a frail old man. Pain registers in her eyes, too, as she listens. “I can’t even sit now,” he says. “They just ignore it.”

Medical neglect runs rampant in prisons across the country, a largely invisible problem that has few in positions of power scrambling for a meaningful solution. The problem is not unique to states that have outsourced their prison healthcare: In California, the crisis of overcrowding in state facilities, merged with catastrophically inadequate state-provided care, was the basis for a 2011 Supreme Court decision ordering the state to release tens of thousands of prisoners. In September, the state paid $585,000 to a man who lost an eye while locked up on a parole violation in 2008. He had repeatedly requested medication for his glaucoma, but was ignored. Eventually, his cornea burst.

But in those states that have turned to private companies to provide medical care to prisoners, stories of neglect and abuse also abound. In 2005, The New York Times published a shocking investigation into Prison Health Services, a company responsible for two prisoner deaths in separate jails in upstate New York within two months of one another. In both cases, the inmates had been repeatedly denied medication and accused of faking their distress. The Times also told the story of 46-year-old Diane Nelson, who died of a heart attack in a Florida jail. “Stop the theatrics,” a Prison Health nurse snapped at her as she collapsed. “That same nurse, in a deposition, also admitted that she had joked to the jail staff, ‘We save money because we skip the ambulance and bring them right to the morgue.’”

In a 2003 piece for Harper’s, Wil S. Hylton profiled Correctional Medical Services, the company that in 2011 merged with Prison Health Services to create Corizon. Hylton’s piece exposed staggering levels of malpractice at CMS, which he described as “not merely the nation’s largest provider of prison medicine,” but “also the nation’s cheapest provider, a perfect convergence of big business and low budgets.”

At the center of Hylton’s report was the company’s alarming protocol when it came to Hepatitis C, a virus that destroys the liver, and which is particuarly prevalent among prisoners. “As a matter of formal company policy, CMS discourages treatment for hepatitis,” he wrote, citing an internal memo from a medical director explicitly ordering doctors to deny treatment as a general rule. Hylton spoke to nurses who expressed shame at their own complicity in the system. “It was absolutely appalling, to the point that I can’t even tell you,” one woman told him. “You knew that as long as you worked there, you did not challenge any of it. But your disgust builds as the horrible cases build…. As far as I’m concerned, if you’re sick and you get into one of these places, you might as well be signing your death certificate.”

Ten years after Hylton’s expose, CMS is now Corizon, and the same policy exists. The Prison Profiteers video on Corizon features Frankie Barton, another Tucson woman, whose son is sick with Hepatitis C. “My son’s being told they have no protocol for treating anybody with Hepatitis C,” she says.

The result could be deadly. Last year alone, no fewer than seven sick prisoners died at Metro Corrections, a jail in Louisville, Kentucky, while on Corizon’s watch. The company made headlines when six employees quit their jobs, according to local press, “amid an investigation by the jail that found that the workers ‘may’ have contributed” to two of the deaths. This summer, it was announced that the contract between Corizon and the city would not be renewed.

In 2009, CMS CEO Rich Hallworth boasted a salary of nearly a million dollars, according toForbes. Today, his company, Corizon, makes nearly $1.5 billion a year ostensibly treating inmates in some twenty-nine states.

Privatizing Incarceration

No phenomenon is more emblematic of prison profiteering than the rise of private prisons. By now it is perhaps the most familiar and troubling trend for many progressives, and with good reason: the financial incentives involved are obvious and egregious. “It’s like the hotel industry,” says Alex Friedmann, an editor at Prison Legal News, who himself was once incarcerated at a private prison. “The hotel industry wants to keep their beds full as much as possible, because it means more revenue. Same thing for the private prison companies.” Two separate videos look at the two major private prison companies, Corrections Corporation of America (CCA), the country’s largest operator of private prisons, and GEO Group. Both companies made headlines in September upon the release of a report by In the Public Interest that scrutinized the “occupancy requirements” commonly found in private prison contracts. Last year, CCA sent letters to forty-eight governors, offering to take their prison systems off state hands in exchange for a guarantee that their states would keep their facilities up to ninety percent full—regardless of crime rates.

In addition to its lobbying for harsh sentencing—in particular when it comes to immigration enforcement, which funnels a growing number of people into its facilities—CCA and Geo Group have become notorious for providing substandard and sometimes harrowing living conditions to their prisoners.

“It was disgusting,” says former ACLU attorney Will Harrell, about one GEO Group facility he inspected in Coke County, Texas. “There was an infestation of insects everywhere you looked, including the kitchen. Insects in the food. It was horrible.” Another interview subject, Donald Weeks, who spent ten months locked up at GEO-run East Mississippi Correctional Facility, described intolerable sewage problems. “The stench was so bad in there, I couldn’t eat anymore.”

At the heart of the problem is an utter lack of transparency. Facilities run by private prison corporations are not subjected to the same oversight as state and federal prisons. As Alex Friedmann has pointed out, “the private prison industry operates in secrecy while being funded almost entirely with public taxpayer money.” In September Bloomberg reported that “the federal government provided almost 43 percent of [CCA’s] $1.76 billion of revenue in 2012, according to its annual report.”

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Private prisons have inspired activism across the country. In May, activists descended upon Nashville to protest CCA’s shareholder’s meeting and thirtieth anniversary celebration. To coincide with the demonstration, Friedman released a list he compiled of deaths in CCA custody, “the most vivid testament to the fact that thirty years of imprisoning people for money is nothing to celebrate.” In addition to a long list of prisoners, it included prison staff—as well as three babies who were born to mothers in CCA custody.

The protests came months after a coalition of thirty-five organizations called on Texas Representative Sheila Jackson Lee to reintroduce the Private Prison Information Act, legislation first introduced in 2005, which would require CCA and Geo Group—indeed, anyone with a federal prison contract—to “make the same information available to the public that Federal prisons and correctional facilities are required to make available.”

Fight the Prison Profiteers

Years of activism against prison profiteering has paid off. In August the FCC took a major step in the right direction by announcing a rate cap on long-distance calls made by inmates. It was a hard-fought victory, albeit a limited one. For Kenny Davis who lives in the same state where his father is incarcerated, high phone rates remain a barrier to keeping in touch.

Want to learn more about the wide range of exploitative practices that come from mass incarceration? Start by visiting the Prison Profiteers action page. From the companies mentioned above to relatively recent innovations such as privatized bail bonds, to such age-old practices as civil asset forfeiture, the videos covering some of the worst ways people and politicians have found to prey upon the misery of others. As Brave New Foundation’s Jesse Lava explains, “The Prison Profiteers series illustrates how greed has become a major driver of mass incarceration—and how the system is more vast than most citizens imagine.”

More valuable still, it is a public education campaign that invites us to do something about it. “For-profit companies are making billions by exploiting our mass incarceration crisis,” said Vanita Gupta, director of the ACLU’s Center for Justice. “Over the next six weeks, we’ll be attacking their bottom lines. These companies need to know we’re watching.”

Watch the Videos
Global Tel*Link: $17 for a 15 Minute Phone Call?
Corizon: Meet the Medical Company Making $1.4 Billion a Year Off Sick Prisoners
The Bail Bond Industry: Should it Cost Less to Get Out of Jail if You’re Rich?


Illegal Globally, Bail for Profit Remains in U.S.

Thanks to the New York Times


FORT LAUDERDALE, Fla. — Wayne Spath is a bail bondsman, which means he is an insurance salesman, a social worker, a lightly regulated law enforcement agent, a real estate appraiser — and a for-profit wing of the American justice system.

What he does, which is posting bail for people accused of crimes in exchange for a fee, is all but unknown in the rest of the world. In England, Canada and other countries, agreeing to pay a defendant’s bond in exchange for money is a crime akin to witness tampering or bribing a juror — a form of obstruction of justice.

Mr. Spath, who is burly, gregarious and intense, owns Brandy Bail Bonds, and he sees his clients in a pleasant and sterile office building just down the street from the courthouse here. But for the handcuffs on the sign out front, it could be a dentist’s office.

“I’ve got to run, but I’ll never leave you in jail,” Mr. Spath said, greeting a frequent customer in his reception area one morning a couple of weeks ago. He turned to a second man and said, “Now, don’t you miss court on me.”

Other countries almost universally reject and condemn Mr. Spath’s trade, in which defendants who are presumed innocent but cannot make bail on their own pay an outsider a nonrefundable fee for their freedom.

“It’s a very American invention,” John Goldkamp, a professor of criminal justice at Temple University, said of the commercial bail bond system. “It’s really the only place in the criminal justice system where a liberty decision is governed by a profit-making businessman who will or will not take your business.”

Although the system is remarkably effective at what it does, four states — Illinois, Kentucky, Oregon and Wisconsin — have abolished commercial bail bonds, relying instead on systems that require deposits to courts instead of payments to private businesses, or that simply trust defendants to return for trial.

Most of the legal establishment, including the American Bar Association and the National District Attorneys Association, hates the bail bond business, saying it discriminates against poor and middle-class defendants, does nothing for public safety, and usurps decisions that ought to be made by the justice system.

Here as in many other areas of the law, the United States goes it alone. American law is, by international standards, a series of innovations and exceptions. From the central role played by juries in civil cases to the election of judges to punitive damages to the disproportionate number of people in prison, the United States has charted a distinctive and idiosyncratic legal path.

Bail is meant to make sure defendants show up for trial. It has ancient roots in English common law, which relied on sworn promises and on pledges of land or property from the defendants or their relatives to make sure they did not flee.

America’s open frontier and entrepreneurial spirit injected an innovation into the process: by the early 1800s, private businesses were allowed to post bail in exchange for payments from the defendants and the promise that they would hunt down the defendants and return them if they failed to appear.

Commercial bail bond companies dominate the pretrial release systems of only two nations, the United States and the Philippines.

The flaw in the system most often cited by critics is that defendants who have not been convicted of a crime and who turn up for every court appearance are nonetheless required to pay a nonrefundable fee to a private business, assuming they do not want to remain in jail.

“Life is not fair, and I probably would feel the same way if I were a defendant,” said Bill Kreins, a spokesman for the Professional Bail Agents of the United States, a trade group. “But the system is the best in world.”

The system costs taxpayers nothing, Mr. Kreins said, and it is exceptionally effective at ensuring that defendants appear for court.

Mr. Spath’s experience confirms that.

If Mr. Spath considers a potential client a good risk, he will post bail in exchange for a nonrefundable 10 percent fee. In a 35-month period ending in November, his records show, Mr. Spath posted about $37 million in bonds — 7,934 of them. That would suggest revenues of about $1.3 million a year, given his fee.

Mr. Spath, who is 62, has seven bail agents working for him, including his daughters Tia and Mia. “It probably costs me 50 grand a month to run this business,” he said.

Mr. Spath hounds his clients relentlessly to make sure they appear for court. If they do not, he must pay the court the full amount unless he can find them and bring them back in short order.

Only 434 of his clients failed to appear for a court date over that period, and Mr. Spath straightened out 338 of those cases within the 60 days allowed by Florida law. In the end, he had to pay up only 76 times.

That is a failure rate of less than 1 percent.

But he had just taken a $100,000 hit. “Everything I worked for this year, I lost because of that one guy,” he said. “If I write a bad bond, it takes me 17 to make it right.”

Mr. Spath had thought the defendant, accused of drug trafficking, was a good bet because he had been cooperating with the government. The defendant is in Brazil now, but Mr. Spath is very good at finding people, and he is not giving up. He is working travel records, phone companies and a former girlfriend, and he is getting closer.

He sometimes requires collateral in addition to his fee, and has accepted rugs, an airplane and a winning Rhode Island lottery ticket. But mostly he is interested in houses.

“In this business, you have to understand real estate,” Mr. Spath said. When the real estate market goes south, he said, bail bondsmen get hurt.

According to the Justice Department and academic studies, the clients of commercial bail bond agencies are more likely to appear for court in the first place and more likely to be captured if they flee than those released under other forms of supervision.

That may be because bail bond companies have financial incentives and choose their clients carefully. They also have more power. In many states, bond enforcement agents, sometimes called bounty hunters, may break into homes of defendants without a warrant, temporarily imprison them and move them across state lines without entering into the extradition process.

Still, critics say, efficiency and business considerations should not trump the evenhanded application of justice.

The experiences in states that have abolished commercial bail bonds, prosecutors say, have been mixed.

“The bail bond system is rife with corruption,” said Joshua Marquis, the district attorney in Clatsop County, Ore. Since bond companies do not compete on price, they have every incentive to collude with lawyers, the police, jail officials and even judges to make sure that bail is high and that attractive clients are funneled to them.

Mr. Kreins, the industry spokesman, acknowledged scandals in Illinois, where “basically all the agents were in collusion with the judges,” and in Louisiana, where sheriffs were also in the mix.

“We have acted responsibly every time an incident has occurred to seek stronger legislation,” Mr. Kreins said. Mr. Marquis, the Oregon prosecutor, said doing away with commercial bonds had affected the justice system in a negative way as well. “The fact of the matter is,” he said, “that in states like Oregon the failure-to-appear rate has skyrocketed.” Oregon uses a combination of court deposits, promises to appear and restrictions on where defendants can live and work.

The rest of the world considers the American system a warning of how not to set up a pretrial release system, F. E. Devine wrote in “Commercial Bail Bonding,” a 1991 book that remains the only comprehensive international survey of the subject.

He said that courts in Australia, India and South Africa had disciplined lawyers for professional misconduct for setting up commercial bail arrangements.

Other countries use a mix of methods to ensure that defendants appear for trial.

Some simply keep defendants in jail until trial. Others ask defendants to promise to turn up for trial. Some make failure to appear a separate crime. Some impose strict conditions on release, like reporting to the police frequently. Some make defendants liable for a given sum should they fail to appear but do not collect it up front. Others require a deposit in cash from the defendant, family members or friends, which is returned when the defendant appears.

But injecting money into the equation, even without the bond company’s fee, is the exception. “Even purged of commercialism, most countries avoid a bail system based chiefly on financial security deposits,” Mr. Devine wrote.

In the United States, the use of commercial bail bonds is rising, and they became the most popular form of pretrial release in 1998. More than 40 percent of felony defendants released before trial paid a bail bond company in 2004, up from 24 percent a decade earlier, according to the Justice Department.

Forty percent of people released on bail are eventually acquitted or have the charges against them dropped. Quite a few of them paid a substantial and nonrefundable fee to remain free in the meantime.

Kate Santana, a 20-year-old waitress, had spent eight days in jail when she found her way to Mr. Spath.

“Me and my husband got into a fight,” Ms. Santana explained, “and the cops were called and I was arrested because there was a bite mark on his shoulder.”

Mr. Spath took her $200 and posted her $2,000 bail. “I checked her criminal history out,” he said. “I found out she was a mother and really she shouldn’t be in jail.”

But when a friend of a man accused of identity theft and perjury turned up seeking a $16,000 bond, Mr. Spath took a different attitude. “You bet your fanny I’m going to take collateral,” he said. “I’ll take his firstborn.”

Mr. Spath is not much concerned with how the rest of the world views commercial bail bonds, but he was worked up about recent talk of a greater government role in pretrial release here in Broward County.

“Here’s what everybody forgets,” he said. “The taxpayers have to pay for these programs. Why should they pay for them? Why should they? When we can provide the same service for free. I’d rather see the money spent in parks, mental health issues, the homeless. Let the private sector do it. We do it better.”

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