The Expanding World of Poverty Capitalism
AUG. 26, 2014
In Orange County, Calif., the probation department’s “supervised electronic confinement program,” which monitors the movements of low-risk offenders, has been outsourced to a private company, Sentinel Offender Services. The company, by its own account, oversees case management, including breath alcohol and drug-testing services, “all at no cost to county taxpayers.”
Sentinel makes its money by getting the offenders on probation to pay for the company’s services. Charges can range from $35 to $100 a month.
The company boasts of having contracts with more than 200 government agencies, and it takes pride in the “development of offender funded programs where any of our services can be provided at no cost to the agency.”
Sentinel is a part of the expanding universe of poverty capitalism. In this unique sector of the economy, costs of essential government services are shifted to the poor.
In terms of food, housing and other essentials, the cost of being poor has always been exorbitant. Landlords, grocery stores and other commercial enterprises have all found ways to profit from those at the bottom of the ladder.
The recent drive toward privatization of government functions has turned traditional public services into profit-making enterprises as well.
In addition to probation, municipal court systems are also turning collections over to a national network of companies like Sentinel that profit from service charges imposed on the men and women who are under court order to pay fees and fines, including traffic tickets (with the fees being sums tacked on by the court to fund administrative services).
When they cannot pay these assessed fees and fines – plus collection charges imposed by the private companies — offenders can be sent to jail. There are many documented cases in which courts have imprisoned those who failed to keep up with their combined fines, fees and service charges.
“These companies are bill collectors, but they are given the authority to say to someone that if he doesn’t pay, he is going to jail,” John B. Long, a lawyer in Augusta, Ga. active in defending the poor, told Ethan Bronner of The Times.
A February 2014 report by Human Rights Watch on private offender services found that “more than 1,000 courts in several US states delegate tremendous coercive power to companies that are often subject to little meaningful oversight or regulation. In many cases, the only reason people are put on probation is because they need time to pay off fines and court costs linked to minor crimes. In some of these cases, probation companies act more like abusive debt collectors than probation officers, charging the debtors for their services.”
Human Rights Watch also found that in Georgia in 2012, in “a state of less than 10 million people, 648 courts assigned more than 250,000 cases to private probation companies.” The report notes that “there is virtually no transparency about the revenues of private probation companies” since “practically all of the industry’s firms are privately held and not subject to the disclosure requirements that bind publicly traded companies. No state requires probation companies to report their revenues, or by logical extension the amount of money they collect for themselves from probationers.”
Human Rights Watch goes on to provide an account given by a private probation officer in Georgia: “I always try and negotiate with the families. Once they know you are serious they come up with some money. That’s how you have to be. They have to see that this person is not getting out unless they pay something. I’m just looking for some good faith money, really. I got one guy I let out of jail today and I got three or four more sitting there right now.”
Collection companies and the services they offer appeal to politicians and public officials for a number of reasons: they cut government costs, reducing the need to raise taxes; they shift the burden onto offenders, who have little political influence, in part because many of them have lost the right to vote; and it pleases taxpayers who believe that the enforcement of punishment — however obtained — is a crucial dimension to the administration of justice.
As N.P.R. reported in May, services that “were once free, including those that are constitutionally required,” are now frequently billed to offenders: the cost of a public defender, room and board when jailed, probation and parole supervision, electronic monitoring devices, arrest warrants, drug and alcohol testing, and D.N.A. sampling. This can go to extraordinary lengths: in Washington state, N.P.R. found, offenders even “get charged a fee for a jury trial — with a 12-person jury costing $250, twice the fee for a six-person jury.”
This new system of offender-funded law enforcement creates a vicious circle: The poorer the defendants are, the longer it will take them to pay off the fines, fees and charges; the more debt they accumulate, the longer they will remain on probation or in jail; and the more likely they are to be unemployable and to become recidivists.
And that’s not all. The more commercialized fee collection and probation services get, the more the costs of these services are inflicted on the poor, and the more resentful of the police specifically and of law enforcement generally the poor become. At the same time, judicial systems are themselves in a vise. Judges, who in many locales must run for re-election, are under intense pressure from taxpayers to cut administrative costs while maintaining the efficacy of the judiciary.
The National Center for State Courts recently issued a guide noting that while the collection of fines and costs is “important for reasons of revenue,” even more important is the maintenance of “the integrity of the courts.”
In dealing with more serious crimes involving substantial sentences, the rising costs of maintaining and building new prison facilities has prompted many state governments, and even the federal government, to turn to the private prison industry.
This industry, which began to grow in the early 1980s, now faces significant problems. As incarceration rates drop, and as some states adopt more lenient sentencing practices, the industry is struggling to find new ways to fill vacant cells.
Take the Corrections Corporation of America, which is listed on the New York Stock Exchange and reported revenues of $1.69 billion in 2013. The firm describes itself as “the nation’s largest owner of privatized correctional and detention facilities and one of the largest prison operators in the United States behind only the federal government and three states.”
In its 2013 annual report, C.C.A. was clear about the problems facing the company: “under a per diem rate structure, a decrease in our occupancy rates could cause a decrease in revenue and profitability. For the past three years, occupancy rates have been steadily declining in C.C.A. facilities, from 90 percent in 2011, to 88 percent in 2012 and 85 percent in 2013.”
These numbers reflect the brutal math underlying profit margins in private prisons. The “revenue per compensated man-day” for each inmate rose by 35 cents from $60.22 in 2012 to $60.57 in 2013. But expenses “per compensated man-day” rose by 70 cents from $42.04 to $42.74, for a net decline in operating income for each inmate from $18.18 a day to $17.83.
The founders of C.C.A. include Tom Beasley, a former chairman of the Tennessee Republican Party. One of its early investors was Honey Alexander, who is married to Senator Lamar Alexander, Republican of Tennessee. Alexander, according to the Sunlight Foundation, has received in excess of $63,000 from C.C.A. employees and the company PAC since his election to the Senate in 2002.
Poverty capitalism and government policy are now working on their own and in tandem to shift costs to those least equipped to pay and in particular to the least politically influential segment of the poor: criminal defendants and those delinquent in paying fines.
Last year, Ferguson, Mo., the site of recent protests over the shooting of Michael Brown, used escalating municipal court fines to pay 20.2 percent of the city’s $12.75 million budget. Just two years earlier, municipal court fines had accounted for only 12.3 percent of the city’s revenues.
What should be done to interrupt the dangerous feedback loop between low-level crime and extortionate punishment? First, local governments should bring private sector collection charges, court-imposed administrative fees and the dollar amount of traffic fines (which often double and triple when they go unpaid) into line with the economic resources of poor offenders. But larger reforms are needed and those will not come about unless the poor begin to exercise their latent political power. In many ways, everything is working against them. But the public outpouring spurred by the shooting of Michael Brown provides an indication of a possible path to the future. It was, after all, just 50 years ago — not too distant in historical terms — that collective action and social solidarity produced tangible results.