New report answers the question: to what degree do the people in prison in a given county resemble the people who live in the surrounding county?

July 15, 2015

report thumbnailOur newest report asks and answers the question for every county and state in the nation: to what degree do the people in prison in a given county resemble the people who live in the surrounding county?

In partnership with Daniel Kopf of our Young Professionals Network, we analyzed U.S. Census data on the race and ethnicity of people incarcerated in given counties with the corresponding data for the surrounding county.

The racial disparities underlying the United States’ record growth in imprisonment are well documented, as is the fact that the prison construction boom was disproportionately a rural prison construction boom. While these two characteristics have been studied separately, there has been, until now, no national effort to analyze each state’s decision to engage in mass incarceration through a racial geography lens.

This report fills a critical gap in understanding the mass incarceration phenomenon: it offers a way to quantify the degree to which, in each state, mass incarceration is about sending Blacks and Latinos to communities with very different racial/ethnic make-ups than their own.

Our findings include:

  • Entirely separate from the more commonly discussed problem of racial disparities in who goes to prison, this data addresses a distressing racial and ethnic disparity in where prisons have been built.
  • Stark racial and ethnic disparities exist between incarcerated people and the people in the county outside the prison’s walls.
  • The transfer of Black and Latino incarcerated people to communities very different than their own is a national problem not confined to select states.
  • Hundreds of counties have a 10-to-1 “ratio of over-representation” between incarcerated Blacks and Blacks in the surrounding county — meaning that the portion of the prison that is Black is at least 10 times larger than the portion of the surrounding county that is Black.

We anticipate this analysis will be most useful to address two questions:

  1. Why do some states struggle to hire sufficient Black and Latino correctional staff?
  2. To what degree does prison gerrymandering — the practice of using U.S. Census counts of incarcerated people as residents of the prison location for legislative districting purposes — have a racial character in particular states?

The reports contains:

  • Graphs and maps showing the frequency of racial/ethnic overrepresentation.
  • Interactive tables and graphics to allow further data exploration and use of the data in new ways.
  • Summaries of how the racial and geographic disparities stack up by state.

The report is available at: http://www.prisonpolicy.org/racialgeography/


The Attica prison rebellion resulted from a racial/ethnic disparity between the incarcerated and the staff. Decades later, that disparity still hasn't changed.

by Rachel Gandy, July 10, 2015

A driving force behind what New York State called “the bloodiest one-day encounter between Americans since the Civil War” was a shocking racial and ethnic disparity between the incarcerated and the staff at Attica Correctional Facility. But 44 years later, that disparity doesn’t look much different. Not only is this problem not unique to 1971–it’s not unique to Attica or to New York State. Stark racial and ethnic differences between incarcerated people and staff members continue to persist in Attica, New York State, and across the national prison landscape.

The Attica prison rebellion of 1971

On September 9, 1971, a four-day prison rebellion began at the Attica Correctional Facility in New York State. Upset with their difficult living conditions, a group of incarcerated men took control of the prison. Their demands included some common sense changes, like a healthier diet, less mail censorship, and better educational and rehabilitative opportunities. When negotiations failed, Governor Rockefeller ordered the state police to take the facility back while the media watched on. In the assault, 38 people — 29 incarcerated men and 9 hostages — were killed instantly.

In the following years, New York improved the food, mail policies, and rehabilitative programs, but one grievance proved more difficult to fix — the racial and ethnic disparities between the incarcerated and the staff at Attica.

Disparities at Attica

In 1971, 63% of the incarcerated population at Attica was either Black or Latino, but zero Blacks and only one Latino served as prison guards. The graph below shows that little changed in the years that followed:

This graph shows that racial and ethnic disparity still existed decades after the Attica rebellion. Though 77% of incarcerated people were Black or Latino in 2005, less than 3% of Attica staff members were Black or Latino.

Decades after the rebellion and massacre at Attica, the numbers of Latino and Black staff members were still very small relative to the numbers of incarcerated Latinos and Blacks. By 2005 (the latest year with complete comparable data), the number of Latinos working at Attica had increased to only 9 employees, or 1% of the facility’s workforce, despite Latinos making up almost 23% the incarcerated population. Similarly, Blacks held only 1.4% of Attica’s staff positions but represented over half (54%) of the incarcerated population.

Disparities in New York

The pattern at Attica is echoed at facilities across New York State and illustrated in the graph below:

This graph shows that, just like in Attica, Black and Latino inmates across New York State are more likely to be overseen by white staff members. In 2005, about 77% of incarcerated people were Black or Latino, but less than 12% of New York State correctional staff members were Black or Latino.

In 2005, Latinos held 3% of staff positions but represented about 24% of New York State’s incarcerated population. The difference was even more pronounced for Blacks, who held less than 9% of staff positions but represented almost 52% of the incarcerated population. Together, Latinos and Blacks held less than 12% of staff positions but made up over 76% of the incarcerated population.

Disparities across the U.S.

New York is not unique in having large racial and ethnic disparities between its incarcerated population and its prison staff members. The graph below shows that this is a national problem:

This graph shows that the patterns of racial and ethnic disparity seen in Attica and New York State exist across the United States. In 2005, over half of the nation's incarcerated people were Black or Latino, but only a quarter of correctional staff members were Black or Latino.

In 2005, Latinos and Blacks made up over half of the total incarcerated population, but they only held about a quarter of the correctional staff positions. Nationwide, incarcerated Blacks and Latinos are disproportionately overseen by white correctional employees.

Attica is an extreme case in what is clearly a national problem. Some facilities, however, do have racial or ethnic parity between incarcerated people and correctional staff, and there is a distinct pattern in where such facilities are located. We mapped the facilities that do and do not have racial or ethnic parity (ignoring any facilities that had less than 100 incarcerated Blacks or Latinos):

Two of the four maps provided show the large numbers of facilities dispersed widely across the nation that lacked racial or ethnic parity between incarcerated people and correctional staff in 2005. The final two maps show far fewer facilities that have achieved racial or ethnic parity. Facilities with parity are concentrated primarily in states or parts of states with large Black and Latino populations. The maps show that most correctional facilities with more than 100 incarcerated Blacks or Latinos are located in places where hiring Black and Latino staff in proportional numbers to the incarcerated population is extremely difficult. The small number of facilities that have such parity are, unsurprisingly, located in parts of the country with large populations of Black or Latino residents.
 
(Not shown are 670 facilities that incarcerated less than 100 Blacks and 1,089 facilities that incarcerated less than 100 Latinos. Also excluded from our analysis were 141 facilities that did not report how many Blacks were incarcerated and 324 facilities that did not report how many Latinos were incarcerated.)

Why hasn’t this problem been fixed already?

The lack of progress at Attica since the 1971 rebellion isn’t hard to understand. Incarcerated men there wanted the racial and ethnic makeup of prison staff to change, but the location of the prison could not. Attica remained in a rural, overwhelmingly white part of New York State, while the Latinos and Blacks whom administrators needed to recruit lived in other parts of the state.

Researchers and government officials have known about this problem for more than 40 years. In 1971, the Department of Justice formed a Task Force on Corrections to outline the government’s national criminal justice standards and goals for the first time. After two years of researching and visiting correctional facilities, task force members found that:

“Location has a strong influence on an institution’s total operation. Most locations are chosen for reasons bearing no relationship to rationality or planning. Results of poor site selection include inaccessibility, staffing difficulty, and lack of community orientation.”

In its report, the task force went on to explicitly describe the disadvantages of building new prisons in rural areas. The authors found that rural facilities lead to

“…the consignment of corrections to the status of a divided house dominated by rural white guards and administrators unable to understand or communicate with black, Chicano, Puerto Rican, and other urban minority inmates.”

One member of the task force, leading scholar William Nagel, wrote his own book about the discoveries he made while working on the Department of Justice report. He noted that, by the late 1960s, government leaders were aware that isolating incarcerated people from the rest of society failed to prepare them for life after prison. For example, in 1967, President Lyndon B. Johnson tasked the Commission on Law Enforcement and the Administration of Justice with developing practices that would better reintegrate incarcerated people into their communities.

Nagel therefore expected that he would find evidence that the government was already addressing these problems by building new prisons in populous cities, not isolated rural towns. But he quickly realized that this was not the case. Nagel and his research team found that all new correctional facilities, except for jails in county seats and small special purpose facilities, were being built in rural areas.

And, sadly, things were about to get much worse. After Nagel and his task force published their findings, the prison boom — which was largely a rural prison boom — began in earnest. As researcher Tracy Huling and U.S. Department of Agriculture demographer Calvin Beale noted, a prison opened in a rural town every 15 days throughout the 1990s.

Decades after the Attica rebellion, this country is beginning to grapple with the questions of how, what kind — and how many — prisons it should have. Underlying this discussion should be one basic fact: location matters.

 

Methodology note:

By “white” this article relies on the Bureau of Justice Statistics numbers for “White, not of Hispanic origin”, and for Blacks, the figure for “Black or African-American, not of Hispanic origin”.

Footnotes

1. United States Department of Justice. Office of Justice Programs. Bureau of Justice Statistics. Census of State and Federal Adult Correctional Facilities, 2005. ICPSR24642-v2.

2. For this article, we define “employees” as full-time and part-time correctional employees.

3. U.S. Department of Justice, Task Force on Corrections of the National Advisory Commission on Criminal Justice Standards and Goals of the Law Enforcement Assistance Administration, Report on Corrections (Washington, D.C.: United States Government Printing Office, 1973), 354.

4. Ibid.

5. William Nagel, The New Red Barn: A Critical Look at the Modern American Prison (New York: The American Foundation, Inc., 1973), 46.

6. Tracy Huling, “Building a Prison Economy in Rural America,” in Invisible Punishment: The Collateral Consequences of Mass Imprisonment, ed. Marc Mauer and Meda Chesney-Lind (New York: The New Press, 2002).


Incarcerated people are disproportionately shut out of the economy even before they are locked up

July 9, 2015

FOR IMMEDIATE RELEASE: July 9, 2015

Contact:
Bernadette Rabuy
(413) 527-0845

report thumbnailEasthampton, MA — Incarcerated people are disproportionately shut out of the economy even before they are locked up, demonstrates a new report by the non-profit Prison Policy Initiative.

“I was shocked to discover late last year that the most commonly cited source for the fact that incarcerated people are poor was decades old,” said Bernadette Rabuy, who recently published a report about the exploitative video visitation industry that works to supplant traditional in-person family visits in jails with expensive $1/minute video chats.

“All too often in criminal justice, the data we need doesn’t exist, but here the data was hiding in plain sight. The federal government collects the pre-incarceration incomes of incarcerated people in a periodic survey, but this data wasn’t being used,” said Rabuy who partnered with data scientist Daniel Kopf to decode the data and put it into context.

The report includes the pre-incarceration incomes of incarcerated people by race, ethnicity, and gender and provides comparisons to the incomes of similarly aged non-incarcerated people. The report updates the most commonly used numbers for the incomes of incarcerated people and for the first time provides national data on the pre-incarceration incomes of incarcerated women.

The report, Prisons of Poverty: Uncovering the pre-incarceration incomes of the imprisoned, is available at http://www.prisonpolicy.org/reports/income.html.

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83% of the U.S. population lives in places where the death penalty is unusual either by law or by practice.

by Rachel Gandy, July 2, 2015

On Monday, the U.S. Supreme Court narrowly upheld the constitutionality of a drug used to carry out executions, but one of the dissenting judges raised a more fundamental question: Is the death penalty itself constitutional? In his dissent to the Glossip v. Gross decision, Justice Stephen Breyer fiercely argued that, by today’s societal standards, capital punishment is both cruel and unusual.

To prove the cruelty of capital punishment, Justice Breyer reviewed three key points. First, death sentences lack reliability because they are frequently (and erroneously) given to two types of people: those who are innocent and those whose convictions must be thrown out due to constitutional errors in their trials. Shockingly, courts and state governors are 130 times more likely to exonerate a defendant when a death sentence is imposed than when one is not. Second, capital punishments are arbitrary. Judge Breyer summarized the evidence showing that race, gender, and geography are often more influential than the severity of a crime in determining if people will be sentenced to death. Third, the long delays necessitated by due process both harm defendants and undermine any deterrent or retributive effects of the death sentence.

To me, the most intriguing part of Justice Breyer’s dissent was his argument that capital punishment is unusual. He presented data to show that the death penalty has fallen out of favor nationwide. For example, the number of death sentences imposed and the number executions conducted have sharply declined in the last 15 years. (See Appendices A and B in the dissent for the graphs that correspond with these facts). Justice Breyer then makes a powerful point about how rare the death penalty has become by calculating the percent of U.S. residents who live in states that have recently conducted an execution. His findings are striking, so we used the data he provided to illustrate his argument with this graph:

Graph showing that most U.S. residents live in places that have not used the death penalty recently.The death penalty is on its way out. The portion of the country that lives in a state where the death penalty was recently used has been in consistent decline for 15 years. In 1999, 70% of the U.S. population lived in a state that used the death penalty within the last three years, but by 2014, only 33% of the U.S. population lived in such a state.

To be sure, public opinion polls show consistent theoretical support for the death penalty, but the reality is that capital punishment is rarely used. Today, 19 states (and the District of Columbia) have formally abolished the death penalty, but the map below shows that a death sentence can hardly be considered “usual” punishment in the remaining 31 states:

Map showing which states are using the death penalty and which states are not.

In the 31 states that do not legally forbid the death penalty, more than a third have not actually conducted an execution since 2007. (Therefore, in total, 30 states have eliminated the death penalty either through legislative action or by common practice.) Another nine states have conducted fewer than five executions since 2007. That leaves only 11 states where the death penalty cannot be deemed “unusual.”

Even in the 11 states where the death penalty isn’t “unusual,” three states conduct an overwhelming majority of the total executions. In 2014, 80% of all U.S. executions took place in Texas, Missouri, and Florida, where less than 17% of the U.S. population lived. That leaves 83% of the U.S. population living in places where the death penalty is unusual either by law or by practice.

The Supreme Court’s decision shines a spotlight on a decades-old debate that tends to focus primarily on the cruelty of capital punishment. Justice Breyer, however, used his dissent to shift the conversation. He unequivocally showed that the Eighth Amendment’s other requirement is being violated—the death penalty is increasingly unusual, and it’s time to rethink its constitutionality.

Correction: The map originally published with this post incorrectly switched the colors for Vermont and Utah. This was corrected at noon on July 3, 2015.


Year after year, Blacks consistently report having less confidence in the police than Whites.

by Rachel Gandy, July 2, 2015

Last week, Gallup released an annual survey that revealed an alarming fact: American confidence in police has reached a 22-year low. In 2015, only 52% of Americans expressed “a great deal” or “quite a lot” of confidence in the police, tying with confidence levels reported in 1993 shortly after LA police officers brutally beat Rodney King. The most troubling part of the national average, however, isn’t evident until that statistic is broken down by race. Not only are Americans in general losing confidence in the police, but Black and White Americans have shown starkly different confidence levels for decades.

The differences between Black and White Americans in police confidence can be seen in the graph below:

Graph showing the percent of Whites and Blacks that report having confidence in the police each year from 1994 to 2015. Blacks consistently report having less confidence in the police than Whites. Each year, Gallup asks a random sample of U.S. adults the following question: “I am going to read you a list of institutions in American society. Please tell me how much confidence you, yourself, have in each one–a great deal, quite a lot, some, or very little: the police?” This graph shows the percentage of people by race who answered that they had “a great deal” or “quite a lot” of confidence in the police. Whites consistently report higher levels of confidence in the police than the average American, while Blacks report markedly lower confidence levels than the average American.

White Americans have consistently expressed more positive attitudes about police than the average resident since Gallup began this particular poll. But while Whites consistently exceed the average police confidence level, Blacks consistently fall below it. In 2015, 57% of Whites reported “a great deal” or “quite a lot” of confidence in police, but only 30% of Blacks felt the same way. The difference between the two racial groups was greatest in 2007, when 60% of Whites and only 22% of Blacks expressed high levels of confidence in police.

The steady drop in police confidence since 2012 isn’t due to an increase in criminal behavior around the country. In fact, crime has been decreasing since its peak rate in 1991, so that today, crime rates are at historic lows. The decline in confidence in police isn’t a result of feeling unsafe around potential criminals; it’s a result of feeling unsafe around the police. Many communities today are protesting against police officers’ treatment of people of color, just like residents did after the 1991 Rodney King beating. Now, new names like Eric Garner, Michael Brown, Tamir Rice, and Freddie Gray are giving rise to national debates about what constitutes best police practices.

Police departments, however, are capable of changing these attitudes. For example, the Oakland Police Department, once called “the worst department in the country,” received 40% fewer complaints against officers in 2014 than it did the year prior. The reason for this decrease may be that, upon accepting his post in 2014, OPD’s chief Sean Whent decided to prioritize building trust in the community. Chief Whent told Politico, “In a democratic society, people have a say in how they are policed, and people are saying that they are not satisfied with how things are going.” Under Chief Whent’s leadership, the officers are experimenting with body cameras and new fieldwork practices in the hope that they will build the community’s confidence in the police department.

The lesson for other police departments is clear–you can change attitudes, but it will require a major shift in both priorities and practices first.

Note: One challenge with making the graph in this article was that, starting in 2013, Gallup began reporting their annual results as two-year averages (e.g., 2012-2013 and 2014-2015). We were able to calculate the 2013 single-year data point from the known 2012 single-year data and the reported 2012-2013 average. However, because as the 2013-2014 figure could not be located, we could not duplicate this technique for later years or show that particular two-year average. Therefore, our graph jumps from 2013 to the 2014-2015 average that we placed on the midpoint between 2014 and 2015.


by Aleks Kajstura, June 30, 2015

Starting tomorrow Alabama begins implementing their prison and jail phone regulations which cap rates and fees for in-state calls.

The Alabama Public Service Commission promulgated the regulations in a Final Order last December, but had stayed implementation while two of the companies, Securus and Global Tel*Link, challenged the new rates in court. But as the companies pursued protracted litigation, the Commission reasoned that it could no longer hold off on ensuring reasonable phone rates for residents who needed to talk to their incarcerated loved ones:

“The Commission has a duty to ensure that rates and charges are reasonable and just to both the ICS providers and the customers. During the course of these proceedings, the Commission has found that customers are paying too much for ICS. A continued postponement in implementation of the Final Order’s prescribed rates and ancillary fees would further delay the rate relief to ICS customers in Alabama.”


A failure to adopt sensible parole policies is driving New York State's elderly prison boom.

by Rachel Gandy, June 29, 2015

Over the last 15 years, New York managed to do what almost all other states couldn’t: it dramatically reduced its prison population. The reforms were wide-ranging, but they left one group behind—the elderly.

The rapid decline of all age groups under 50 years old and the rapid increase in people over 50 can be seen most clearly in this graph of the New York State prison population by age:

Graph showing the number of people in New York state prisons per year between 1992 and 2014 by ageWhile the number of people behind bars has fallen for most age groups, the number of people over the age of 50 incarcerated in New York State prisons is climbing. (While we do not have an explanation for the bump up or down for each age group in 1999, we do not consider it to be significant given the clarity of the larger trend.)

While the number of people in prison under the age of 30 has been in almost constant decline since the mid 1990s, the number of incarcerated people in their 30s or 40s has been declining for about a decade. Throughout this period the number of people in prison aged 50 and older has been on a consistent and troubling rise.

There are only two possible explanations for this pattern:

  1. The elderly could be on a crime wave, driving the increase in older people behind bars. (Not true, as we explain below.) Or,
  2. Older people aren’t being released from prison.

The first theory of an elderly crime wave is easily disproved by the graph below showing the age of people sent to New York State prisons each year:

Graph showing the number of people sent to New York state prisons per year between 1992 and 2013 by age.The number of people sent to prison each year has been trending downward for all ages under 50 since at least 2007, and the number of people under age 40 sent to prison each year has been declining since the beginning of our data. To be sure, the number of people sent to prison in their 50s and 60s has been increasing, but the rate of growth is miniscule compared to the rapid growth seen in the incarcerated populations of these age groups in the previous graph.

The reason for this pattern unfortunately lies in the history of New York State’s sentencing laws and their current flawed parole practices. Many of the older people in prison have very long — but very old — sentences for violent offenses. And sadly, despite all of the other reforms, the parole board gives too much weight to the severity of the original offense, and too little weight to two key issues: people’s accomplishments while incarcerated and the low risks that elderly and infirm people pose to public safety.

Putting common sense back into parole decisions would be an excellent way to reduce the growing number of elderly people behind bars in New York State.

 

 

For further reading, see:


Securus exemplifies the industry's obscene penchant for squeezing profits by fleecing their customers and shorting their business partners.

by Peter Wagner, June 19, 2015

In general, Securus — a prison phone industry giant — is in a pretty profitable business. The company and its competitors vie for monopoly contracts to provide phone service in prisons and jails. Because the facilities demand a share of the proceeds, the incentive is to charge as much as the consumer — or regulators — can bear. But Securus exemplifies the industry’s obscene penchant for squeezing profits by fleecing their customers and shorting their business partners. As The Huffington Post wrote last week:

A presentation that the privately-held prison telecom company Securus made to investors that The Huffington Post obtained shows just how much money there is to be made as the state-sanctioned middleman between prisoners and the outside world: $404.6 million last year alone.

Securus, which provides phone services to 2,600 prisons and jails in 47 states, made $114.6 million in profit on that revenue in 2014. Securus’ gross profit margin — a measure of the difference between the cost to provide its services, and what it charges for them — was a whopping 51 percent.(*)

That’s not only unprecedented(**), it’s significantly higher than companies typically known for having high profit margins like Apple. And it’s certainly enough profit to buy up their rivals like JPay.

And these margins continue to grow. Our analysis of Securus’ profits from the investor slides reprinted by The Huffington Post shows the company’s profits took a huge leap upwards in 2014:

graph showing annual growth in Earnings Before Interest, Taxes, Depreciation and Amortization from 2009 to 2014 showing a 32% increase in 2014

But what is driving these profits? Three shifts are likely behind Securus’ unprecedented profit growth:

  1. Securus stopped paying commissions on interstate calls. The FCC issued an order capping the cost of these calls and prohibiting companies from treating the commissions as a legitimate cost of the call. Securus has, apparently, chosen not to share any portion of their profits with the facilities, keeping the profits all to themselves.
  2. Securus is steering a greater portion of their call volume from regular calls to abusive “single call” programs that charge $9.99 via premium text message or $14.99 charged to a credit card for each call. As we explained in our January 2015 briefing, these calls are responsible for a disproportionate share of Securus’ profits:

    These charts show four views of three types of calls in Genesee County, Michigan: by volume, by the cost to families, by where Securus makes its money and where the County earned its commission. (And as we explain in a footnote to yesterday’s article, just the credit card calls earn Securus $24-76 million a year.)

  3. Securus has increased their typical(***) credit card deposit fee from $7.95 at the time of our report in May 2013 to $9.95 shortly thereafter. Since Securus disclosed that they charged credit card fees 4.8 million times in 2013, at $9.95 each in 2014, Securus revenue could be as much as $47 million from just credit card fees in their record profitable year.

As we explain in an article released yesterday, Securus’ business model is less about providing phone service than it is about harvesting fees. What this data shows is just how profitable that fee harvesting can be.

Notes:

(*) Securus challenges some of the numbers in the quoted Huffington Post paragraphs but Securus does not challenge the legitimacy of the investor slides published by Huffington Post.

(**) Because Securus is privately owned even seeing this data is unprecedented. The data on these slides shared with investors is also quite different from the story that CEO Rick Smith told the FCC last July (video at 208:45 seconds or transcript):

Page 198:

1 At some point in the presentation and
2 these discussions, I always get around to
3 discussing where I think we stand in terms of a
4 competitive company with competitive returns. And
5 I've heard three words during the session so far.
6 One is that rates are egregious. One is that
7 rates are abusive, and the other one is that rates
8 are predatory. I can look at our bottom line and
9 compare that to other companies' bottom lines.
10 Most of these companies you've heard of. And so a
11 few statistics before we can use any of those
12 words.
13 I looked at net income, kind of what you
14 can get from public statements, as a percentage of
15 profit. And here's the listing. Verizon was at
16 14.3 percent; not bad. Time Warner was at 11.4
17 percent, and I'm going in descending order now.
18 AT&T, we've all heard of AT&T and what they do,
19 they're at 10 percent. Century Link, think of that
20 as U.S. West Embark, Century, pretty big company.
21 I think the fourth largest local exchange carrier
22 in the United States; they're at 5 percent. And


--- 
Page 199:

1 now Securus brings up the rear at 1.4 percent. So
2 Verizon makes roughly 10 times what I make on a
3 comparable basis. Time Warner makes eight times
4 what I make. AT&T makes seven times what I make.
5 Century Link makes four times what I make. I'm
6 not saying that any of those are bad. I'm just
7 putting these things in the proper perspective in
8 terms of what we make bottom line after all of our
9 costs, and commissions does represent a
10 significant portion of our costs is a relatively
11 small number.
12 So we don't earn excessive profits. We
13 don't earn excessive profits. We don't earn
14 excessive profits. I said that three times for
15 the egregious and abusive and predatory kinds of
16 comments that come at us most of the time. 

(***) The redacted data does not disclose Securus’ costs to process credit card transactions, but they must be below $9.95, both for the common sense reason that their competitors are able to charge less, and because some states like Alabama require Securus to charge less with no apparent ill effects. Securus reported 4,059,157 credit card transactions ranging from $5.00 to $6.95 in 2012. We calculate the average fee collected to be $6.82 and the median to be $6.95. For 2013, Securus reported 4,769,570 credit card transactions ranging from $3.00 to $9.95. We calculate the average fee collected to be $7.20 and the median to be $6.95.


Some of these companies call themselves phone companies, but the phone service is little more than a gimmick to charge expensive fees.

by Peter Wagner, June 18, 2015

Fee Harvesting illustration

Our analysis of the FCC’s Second Further Notice of Proposed Rule Making is that the agency is clearly onto the industry’s dirtiest trick: charging consumers hidden fees. Some of these companies call themselves phone companies, but the phone service is little more than a gimmick to charge fees.

We’re thrilled at the FCC’s attention to fees, but we haven’t yet gotten the media and lay audiences to understand that the distinction between rates and fees is far more important and far less semantic than it appears at first blush. Let me explain:

Rates: This is what you pay per minute, including any higher charge for the first minute of the call.

Fees: This is everything else you pay for “services” related to the call, including fees to open an account, have an account, fund an account, close an account, get a refund, receive a paper bill, or other charges that are made on a per-call basis, such as charges for “regulatory compliance” or “validation”.

If the FCC were to ignore the fees, that mistake would undermine any reforms that are made to the rates for the three reasons we discuss in our report Please Deposit All of Your Money: Kickbacks, Rates and Hidden Fees in the Jail Phone Industry:

  1. The hidden fees can easily equal or surpass the base cost of a call. We estimate that families pay at least $386 million a year in charges like $9.50 for a credit card payment or $5 to receive a refund. On top of that, Securus and its competitors quietly pocket tens of millions of dollars tacking on an abusive $13.19 “single call” fee1 to 20 cent calls.
  2. The fees are the direct result of the commission system (explained below) because they are a hidden revenue source that enables the phone companies to promise the facilities an otherwise unsustainable percentage of the call income.
  3. Fees have become the new business model that the companies use to circumvent the FCC’s caps on the rates charged.

In sum, the fees allow the companies to both circumvent the FCC’s rate caps and make possible the entire shell game of winning contracts by promising to pay what are actually impossible commissions.

It’s easy enough to understand why high fees are bad for the families paying for the calls, but they are bad for the facilities too. As one of the more ethical phone companies recently explained in a colorful video, the companies are asked to compete on the basis of who will promise the facilities the largest share of the rate pie; but they are never asked to disclose the existence of an entirely separate pie of income extracted from the fees charged to the families. The companies playing the fee game look generous because they are promising to share up to 99% of the rate revenue with facilities, but that “generosity” is only possible because the company is hiding the revenue it collects from fees.

Sadly, some facilities learn about this and then look away. They don’t see a reason to stick up for their taxpayers, nor do they see any self-interest in enforcing ethical behavior with their business partners. This story illustrates what the facilities are missing:

Bonnie and Clyde rob banks and they agree to split the loot 50-50.

It turns out that Bonnie sometimes robs banks on her own without telling Clyde. He’s not going to care, right? As long as she doesn’t do something that gets them both caught, what impact does it have on him?

Well, one day, Clyde notices that they are making less money than they used to. The typical haul is down, but hey, it’s still easy money. But the strange thing is that Bonnie keeps on buying new cars and new clothes as if the hauls were huge like in the old days. Maybe Bonnie buys things on sale?

Clyde is getting suspicious, and nothing is adding up. It’s easy to trust Bonnie, and she is certainly being more helpful than ever. She’s always on time; heck, she volunteers to case the banks first and doesn’t ask for an extra share of the loot for her extra work.

Then one day, Clyde decides to get to the next bank even earlier to watch Bonnie case the joint. What does he see?

Bonnie isn’t casing the bank – she’s robbing it first.

What the sheriffs are missing is that by allowing their partners to fleece families out of half a billion dollars a year in fees, they are ensuring that the poorest families in their counties won’t have very much money left to pay for the actual, commission-producing, calls.

Cartoon showing a bank teller apologizing to a bank robber that the till is empty because the bank was robbed earlier that same day.

And phones aren’t the only industry in which fee harvesting is the new business model. Take our work on release cards. Private companies reach out to jails with offers to take over all of their money management woes – at no cost to the county.. Previously, jails had to keep track of the money people were arrested with or were sent by family members and then, upon release, issue a check or give cash. Now, private companies take the cash and give people pre-paid Mastercards instead. The jails ask: What could be more convenient than that?

The better question is this: How is it even possible to provide a valuable service for free? It’s not. These companies exist by charging the people who are forced to use their cards exploitative fees like $3.50 a week for the account, $0.95 for purchases, $3.95 for checking their balance, and $30 for closing their account.

Most people who run correctional facilities see it as their job to make our communities safer and stronger. One of the simplest ways they can meet that goal would be to start working much harder to ensure that the facilities aren’t complicit in making the poorest among us any poorer.

Focusing on fees is one of the most important ways to ensure that both families and facilities are protected from the companies that have the interests of neither at heart.

   

Illustrations by Prison Policy Initiative Research Associate Elydah Joyce. To help other organizations explain fee harvesting in their own work, she has made these illustrations available under a Creative Commons license on Flickr.

Footnotes

  1. Single call programs are ostensibly designed for people who don’t want to set up accounts, but as we explain in a letter to the FCC, these programs are simultaneously the most expensive way possible for a family member to pay for a call and the least lucrative way for the facility to make any income. These programs go by a lot of names, but they typically charge families $14.99 for a single call if prepaid via credit card and $9.99 if paid via premium text message. In our letter to the FCC, we explain that in the case of Securus’ PayNow credit card program, it is possible to disaggregate the charges: a $1.80 call charge (with $1.60 going to the facility and $0.20 for the actual call) and a fee of $13.19. To be clear: Securus is charging a $13.19 fee for a phone call whose real cost is apparently only 20 cents. Based on the size of Securus’ business and data on how often PayNow is used in jails, we estimate that Securus makes between $24 million and $76 million a year in fees for their PayNow credit card product in jails. That calculation does not include their contracts in state prisons, their $9.99 Text2Collect product, nor the similar products of any of their competitors.  ↩


New animation illustrates that at huge distances such as 1,500 feet, sentencing enhancement zones can't work.

by Bernadette Rabuy, June 18, 2015

One of the worst ideas to come out of the War on Drugs is sentencing enhancement zones. These laws mandate a higher penalty for crimes committed within a certain distance of schools. The intent is noble, but at huge distances like 1,500 feet, the laws are actually harmful.

Alternative Spring Break participant Arielle Sharma, research associate Elydah Joyce, and programmer Jacob Mitchell put together the illustration below to show just how far 1,500 feet really is. Just click on the image to understand why school zones fail to keep children safe. And check out our zones page for updates on the pending Connecticut bill that would roll back these zones, our reports on zones in Connecticut and Massachusetts, and our zones video.

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