Prison Profit Pipeline

There is the adage that Nero fiddled while Rome burned, and I fear it is the adage that may define the ways too many observers have filtered the 45 administration through a skewed lens. There has been much commentary about 45’s twisted tweets, his threats to fire special counsel and former FBI chief Robert Mueller, and his general shenanigans. There has been much less focus on the way his appointees have quietly changed the rules of engagement for too many citizens.

Just last week, according to the Washington Post, the US Court of Appeals in the District of Columbia said that the Federal Communications Commission exceeded its authority when it capped the cost of phone calls made by prison inmates. FCC Commissioner Mignon Clyburn, who championed this cause, described the court decision “as the greatest form of regulatory injustice I have seen in my 18 years as a regulator in the communications space”. Clyburn is the only Democratic commissioner on the FCC, which has two vacant seats that 45 can appoint. She says the cost of prison phone calls is a civil rights issue. More than 2.7 million children have an incarcerated parent, and the high cost of prison phone calls prevents them from having regular contact with them.

The FCC was prepared to defend its caps on prison phone calls, which can cost as much as $10 a minute, until our nation’s political leadership changed. Ajit Pai, a Republican member of the FCC (appointed by President Obama, who was required to appoint members of both parties), was elevated to chair the FCC. Because of the free-market, Pai said FCC lawyers who were prepared to defend rate caps in courts, no longer had authorization to do so. Pai did not have to make that call, but he did, apparently at the behest of 45. Now, private companies, many with monopoly arrangements with prisons, can set rates as high as they like.

By the way, the caps, which were as high as 25 cents a minute, much higher than the market costs of phone calls, allowed lots of room for profit, since the real cost of a phone call is less than two cents a minute. But too many of the phone companies with monopoly arrangements with prisons were funding prison operations with contracts that looked very much like kickbacks. In other words, prison administrations were profiting from inmate misery.

Most research says that regular family contact is one of the ways that recidivism is prevented. Those incarcerated who have family ties return to the general population eager to continue to develop those connections, while those who have been isolated from their families may feel they have less to lose and are more easily arrested. It is in the public interest that those incarcerated maintain and nourish family contacts, but too many prison administrators have another idea. They want to make money from the desperate situation of the incarcerated.

The current administration’s attempt to roll back Obama-era prison reforms is not restricted to the matter of prison phone calls. While President Obama said he would cease to use private prisons to house federal inmates, Attorney General Jeff Sessions says that the Justice Department will use private prisons for federal inmates. This makes incarceration a profit center for companies that run faulty facilities that are likely to be unsafe and ineffective. Some of the companies that run these private prisons are publicly traded, cementing the notion that incarceration for some Americans is a profit center for others. Nearly 22,000 federal inmates are held in privately run prisons, managed by private-prison operators: Management and Training Corporation, the GEO Group and CoreCivic, which used to be known as Corrections Corporation of America.

Incarceration is an enterprise and an economic development engine in some communities. Prisons are not only centers of incarceration, but also centers of employment. Those who invest in CoreCivic stock, for example, are investing in the possibility of increasing the rate of incarceration in the future. The Obama Administration, belatedly, put these companies on warning that prison reform would slow the flow of new inmates. Now, 45 and Sessions are signaling that there are more profits to be gained through mass incarceration.

Phone calls are simply the tip of the iceberg. Who manages prison commissaries, and how much more do their products cost than those that are commercially available? How do people send money to their loved ones for commissary items, and how much must they pay to transmit monies? How many states require inmates to pay for health services? How many pay prisoners 18 or 25 cents an hour for prison labor, but charge them exorbitant amounts for services? Who regulates this and how likely are incarcerated people to be worse off thanks to 45 and his free-market minions?

FCC Commissioner Mignon Clyburn deserves our thanks for her commitment to the rights of those incarcerated. The rest of us should be repelled by the prison profit pipeline.

Julianne Malveaux is an economist, author, and Founder of Economic Education. Her podcast, “It’s Personal with Dr. J” is available on iTunes. Her latest book “Are We Better Off: Race, Obama and public policy is available via