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Making Money From Prisons and Prisoners

2015-03-30

The United States has the largest proportion of its population in prison, of any country in the world, including China and Russia.  A majority of these prisoners are of minority origin, either black(African-American) or brown (Mexican), and blacks in particular face a much greater risk of being arrested, incarcerated, and sentenced to longer prison terms, followed by long periods on parole.

While some uninformed persons may claim that blacks are in prison more because they commit more crimes, there is good evidence that blacks are the victims of prejudice rather than the perpetrators of crimes.  Blacks are suspected more, convicted more readily on less evidence, and sentenced to longer terms for the same crimes.  Considering that 95% of criminal cases are settled by plea bargains and blacks do not have the funds for high powered lawyers, most blacks are intimidated into pleading guilty by the specter of a longer prison term if they resist a plea bargain and are convicted at trial.

The most disturbing factor in this insane policy of locking up everyone is the rise of for-profit prisons.  States have sold out their prisons to private companies, which make a profit on incarcerating people.  There is no incentive to reduce prison populations when private companies show healthy profits for doing this work.

A particularly egregious form of profit-making is the practice of charging inmates ridiculously large fees for making telephone calls.  Here is a quote from a New York Times (NYT) article that shows clearly, in a nut shell, how excessive this practice is:

“Until the 1990s, inmates could place and receive calls to lawyers and family members at rates similar to those outside prison walls. But the prison phone system is now a $1.2 billion-a-year industry dominated by a few private companies that manage phones in prisons and jails in all 50 states, setting rates and fees far in excess of those established by regular commercial providers. The business is so considerable — some 500 million prison and jail phone calls totaling more than six billion minutes in 2014 — that it has caught the eye of private equity firms.”

The article can be found at: http://www.nytimes.com/2015/03/31/us/steep-costs-of-inmate-phone-calls-are-under-scrutiny.html

It seems that there are only a few companies dominating this business: one company, Global Tel-Link, takes 50 percent of all revenue.  These companies are being taken over by private equity firms because of their tremendous profit potential.  The states are using these companies as a source of revenue, and the companies are obliging by paying enormous commission fees to the prisons for the privilege of controlling their phone service.  Then the companies turn around and charge the inmates through the nose for making phone calls.  Some charge as much as $1.22 a minute for in-state phone calls.

The Federal Communications Commission (FCC) has limited out of state phone charges to 20 cents a minute, but the companies have responded by jacking up the charges on in-state calls, which the FCC does not control, and which make up 90 percent of the calls.  In addition, there are multiple charges for various aspects of the telephone service, such as paying your bill or maintaining a prepaid account.

The states are using the commissions that these companies pay (a total of $460 million last year) to subsidize many other aspects of incarceration, even unrelated expenses like the states’ general revenue funds.  These charges result in another aspect of the retrogressive charges that poor people pay to support their government.  These charges are similar to a retrogressive income tax, which places the greatest burden of taxation on those least able to pay.

The practice of incarcerating so many people is an unconscionable expense paid by taxpayers, and the way the incarceration is implemented places the greatest burden on those least able to afford it.  This is just one more unjust practice that diminishes our faith in government and damages the social contract that is supposed to bind all people together in a fair and equitable society.  We must fight to make all expenses of government progressive– paid for by those most able to pay and not those least able to resist.

Those who benefit most from government– wealthy people who obtain protection for their wealth from government services– must be made to pay the most for the administration of government: a progressive scale that charges the most to those most able to afford it.

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