The Profits of Prisons Aren’t Just Big

by G. Miranda

I.       

Before 2013, telephone calls between people in and outside of prisons across the United States could cost as much as $17 for a 15 minute call. Advocacy by those phone call-makers prompted Martha Wright, whose grandchild was incarcerated, to start a petition to litigate against the Corrections Corporation of America, now known as CoreCivic. The claim to contend for the regulation of the prison-communications industry was heard in a Washington DC civil court before ultimately being transferred to the discretion of the Federal Communications Commission (FCC). Thirteen years later, the FCC declared that companies selling telephonic services to prisons, both public and private, could not charge more than the operational costs of those services. The same 15 minute phone call now could not cost more than $3.75. In their official press release, the FCC justified their decision by citing the relationship between sustained contact with outside communities and lower recidivism rates.[1]


In response to this federal intervention, Vincent Townsend, the CEO of PayTel, a company that seeks “to provide innovative technology solutions to the confinement industry,” an industry, he openly conceded, that had “abused the public.”[2]  He went on to advise “other industries that serve a prison population [to] pay attention to what’s ethical … because if you don’t treat people fairly, ultimately it’s not a long term business plan…  some regulator is going to step in and you’re going to have to deal with it.”


While the FCC was taking over a decade to govern prison-phone companies, Ryan Schapiro founded JPay in 2002.[3] Instead of charging people for phone calls, Schapiro’s work caught wind as the Internet began to become what it is today: accessible to many and the means to unprecedented commercial ends. Inspired by the trips a friend had to take to bring his mom money in person while she was at Rikers, Schapiro’s new enterprise made it possible for people to send money to people in prison from their computer. Quickly supplanting the analog – money orders mailed to the prisons and processed without fees – JPay became profitable in 2006 by charging the money-sender up to 45% of each transfer.[4] In 2013, the year the FCC capped the price of prison-phone calls, JPay was moving over 500 million dollars between people in and out of prisons in every state.


Since JPay’s inception, some portion of the profit made off of the money transfers is also given to the correction agencies themselves as an incentive to adopt JPay at their facilities. This practice has been criticized as a form of gouging or kick-backing, but Schapiro retorts that it ultimately benefits his customers, the people who are incarcerated. Those benefits, he argues, are funding for programs and for prison maintenance. Notably, in almost every state today, paper money orders can’t be sent directly to prisons; there’s practically no way to circumvent JPay’s fees.


Over the years, JPay’s services have expanded beyond money-transfers to other products, such as MP3 players, video-chatting kiosks, and email services paid for by digital postage. A 2015 acquisition with undisclosed terms by Securus Technologies, the prison communications behemoth, made Schapiro’s goals for JPay to develop unprecedented “prison-proof”  technology (i.e. easily monitorable devices that can’t be used to conceal contraband or as a weapon) fiscally possible.[5]  Having already monopolized prison banking, after the merger with Securus, JPay also became a part of one of the profitable companies in prison-communications.


Securus, like PayTel and CoreCivic, had its pricing limited by the FCC in 2013. Four years later, to the benefit of these companies, the DC Court of Appeals reversed course and removed all price caps on telecommunications, arguing that the FCC’s discretion is only viable between states.  As such, a NYC-er trying to call a loved one with a sentence greater than one-year (i.e. someone detained in New York State DOCCS custody, further upstate) would be exposed to the same costs that Martha Wright’s initiative, started 20 years ago, tried to regulate. In support of this change is Trump’s FCC Chair appointee, Ajit Pai, the same person who pushed for the overturning of a number of net-neutrality regulations. Pai believes that the “FCC exceeded its authority when it attempted to impose rate caps on intrastate calls made by inmates.”[6]


One of Pai’s arguments for less regulation of prison communication industries cites contraband phones used by people in prison as a concern the FCC overlooked in their initial decision to enact the cost-caps. His logic is that too much regulation on communications technologies that serve people in prison prevents those industries from developing better, more desirable products. In a press release, Pai names contraband cell-phones as the means through which people in prison “run drug operations, intimidate witnesses, direct gang activity, execute kidnappings, extort money from the families and loved ones of other inmates, conduct phone scams, and harass innocent members of the public.”[7] He believes that prison phone industries have a better chance at replacing contraband communication if they’re unregulated. When those replacement technologies are heavily monitored however, it seems that the population willing to pay (at the risk of further incarceration) for unsurveilled contact with the outside hasn’t actually been addressed. The extent of his press release’s focus on the death of a corrections officer who was believed to have been targeted because of his role as a contraband locator, as well as the leveraging of fear-instilling prejudices above, relies on normative narratives of criminality and justice. And the logic is lacking; at once, people who are incarcerated deserve good tech, but at the same time, they aren’t entitled to price regulation that makes the services accessible.


Perhaps seeking to take matters into local hands in response to the overturning of prison-communication caps, New York City became the first major US city to instate free calls for all in custody within the municipality in 2019.[8] At this point Securus Technologies was making over $20,000 every day off of calls to and from city jails such as Rikers. After the 2019 ruling, however, the City’s Department of Corrections foots the bill. Critiques of this change have concerns similar to the one Pai employs, fearing that access to communication will bolster organized crime in the jails. Proponents, expectedly, are the loved ones of those in custody and their advocates, who now can communicate for free. Unsurprisingly, those conversations are subpoenable, and DAs as well as facility officers are entitled to recordings of personal conversations. Be it a cheaper phone call, or a higher-price, fancier communication method, both are equipped to surveil and further criminalize the user and their outside relations.


And JPay’s profits trend steadily upward, riding the criminal punishment industry’s reliability with gusto. That reliability is, of course, the extent to which the police state fills prisons with criminalized, predominantly black and brown people. Funded so bountifully, in 2019, when NYC municipal government decided to subsidize free phone calls, further upstate, JPay gave nearly every incarcerated person a tablet called the JP4. It’s a sturdy little media player with email and video correspondence capacities that JPay started developing years ago, and that normally costs $59.99. In states where the tablets aren’t free, an incarcerated person can either have it bought by someone on the outside, or buy it themselves using the money deposited into their commissary through fee-heavy JPay money transfers.


II.        

The first time I heard about the JPay tablets was from a client of mine, BP, who is incarcerated upstate. BP informed me that they had been handed out to everyone, and explained how they worked. People line up to use the kiosks in the common spaces from which they can download media, games, and digital postage (for video calls and emails), that they pay for. Those without external funding, like BP, only have access to pre-loaded, free media and games on the tablet. BP described one of these games, a tilt-maze of sorts, in which, to advance to the next level, he has to move the tablet to manipulate a pixelated ball out of a maze. On top of his frustration at the cost of tablet add-ons, as well as the interpersonal drama between other incarcerated people at his facility caused by the limited availability of kiosks, BP exasperatedly told me his tablet was broken: “I can’t get the ball out of the box. I can’t get to the next level.” Pointing out the obvious metaphor, BP emphasized the parasitic nature of JPay. Our conversation inspired this article.


III.        

It’s no coincidence that the people who pay for phone calls to and from prisons and for JPay money-transfers into commissaries are on the outside — only half of the US prison population is employed while serving their sentence, and those who are employed are of course paid wages that are a fraction of the legal minimum for the non-incarcerated. And it’s no coincidence that, according to Schapiro, JPay’s top-selling demographic are black women between the ages of 25 and 36.[9] Prison populations in the US have more than doubled since 1990. Scholar and activist Mike Davis introduced the “prison-industrial complex” (PIC) in the 1990s as a term that captured how the industry of prisons, and their product, prison labor, had begun to rival agriculture and land development.[10] Angela Davis, in her book Are Prisons Obsolete?, summarizes Mike Davis and others’ reasoning for mass incarceration: “[P]rison construction and the attendant drive to fill these new struc­tures with human bodies have been driven by ideologies of racism and the pursuit of profit.”[11] Arguing for the aptness of the phrasing of the PIC, Angela Davis compares the structures of the prison industry to that of the military-industrial complex:

[B]oth systems generate huge profits from processes of social destruction. Precisely that which is advantageous to those corporations, elected officials, and government agents who have obvious stakes in the expansion of these systems begets grief and devastation for poor and racially dominated communities in the United States and throughout the world. The transformation of imprisoned bodies—and they are in their majority bodies of color—into sources of profit who consume and also often produce all kinds of commodities, [and devour] public funds.[12]


If there’s anything to learn from the narratives of conflict between regulation efforts on behalf of federal and municipal governments alike and the booming imprisonment-serving industry, it’s that the preeminence of prisons isn’t simply about profit, as Davis introduces above. In his essay “How Prisons Serve Capitalism,” Dan Berger echoes scholar-activists such as Jackie Wang and Ruth Wilson Gilmore to argue something larger:

Capitalism is a central character in the story of American punishment—but not because the criminal justice system is an elaborate pyramid scheme. A summary review of the half-century expansion of police and prison power shows that debt, violence, and prison have served primarily political purposes in the context of deepening economic inequality. More than profit, capitalism generates misery from its poorest subjects.[13]


As prison abolitionists, we need to explode our understanding of the PIC beyond the notion of super cheap (slave) labor, and instead view mass incarceration for what it is: a bolstering of capitalism that deftly addresses the financial problem of surplus consumers. That surplus threatens the stability of capitalist logics in which people are rewarded for their capital, and that reward, at its most basic level, is the protection of civil liberties. When fewer people have the most money, the population with the least money grows and is systemically violated, and inequality, the bread and butter of capitalism, is deepened, as Berger contends. Mass incarceration serves a capitalist state by keeping poor people poor by systemically isolating those deemed undesirable by the kyriarchy.


In addition to this promotion of inequality, the criminal punishment system allows the state to offer private industries a malleable, “rights”[14]-stripped consumer base with nominal purchasing power that is directly tied to the purchasing power of the non-incarcerated people on the outside. And that relationship is a source of profit itself. Comparable to a weird sort of money-laundering, when capital goes from the hands of the “rights”-bearing non-incarcerated person to someone who is detained, it enters a capitalist-utopia where the consumer is no longer human, but instead, is reduced to being an economic (non)agent, and thus a non-threat to capitalism. The profits of those forced economies, as evidenced by JPay and other companies, are not negligible. But it is also worth noting that these forced economies deplete the resources of those not in prison, simply because of their connection to the convicted. The poor are kept poor, and criminalized for it. In the free market that profits off of the un-free, ethical considerations only matter if, as Vincent Townsend said, “some regulator steps in.”


But history shows that we can’t count on those regulators to step in on time, and even if they do at some point, as was the case with the FCC, policies are subject to fluctuations of political interests. There’s no simple way for local, state, or federal regulations to keep up with prison tech markets, because technology can be deployed for profit at no cost (upstate tablets provided for free with costs associated with using the tablets), at extraneous cost (phone call services, commissary), and because prisons are monetarily rewarded for using providers like JPay. Case in point, New York City will still pay Securus $20,000 daily while offering people in city jails free phone calls. In the “no man’s land” of prisons (where the human consumer is dehumanized), companies can do whatever they want, and, ultimately, it’s in the state’s interest. Berger continues, “carceral expansion is a form of political as well as economic repression aimed at managing worklessness among the Black and Brown (and increasingly white) working class for whom global capitalism has limited need.”


This perfectly summarizes the neoliberal situation in which the US has embroiled itself as an economic and political leader, where excess surplus is soaked up by assets such as higher education, land, data, fine art, and off-shore investments, and excess consumers, those criminalized for their non-whiteness and their poverty, are nullified by imprisonment. These dehumanized consumers, drained of their former purchasing power, aren’t needed in a capitalist project where only the ultra-rich can spend and therefore, matter. And if constitutional rights - any rights - in America, are cut of the same cloth as purchasing power, in this sense, prisons are dead zones. Paramount to prison abolition is the claiming and uplifting of the lives within those dead zones. And the inalienable “whatevers” of those lives, as rights have proven an inept word, have nothing to do with purchasing power — and everything to do with solidarity and liberation.


In turn, economic freedom is perhaps not the freedom to buy, but instead the freedom from the reaches of an economic system that criminalizes and literally kills people for their lack. Abolitionist imaginaries hold space for this seeming improbability because they allow for a vision of the world in which people can live well and with their loved ones not because they’ve earned it, but because of something else, something worth leaving open-ended. To color it a little, though, that something else is what gives meaning to the logos of mutual aid. It’s the constitutional difference between policy decisions and reforms substantiated by claims of reduced crime and recidivism, and community commitments to shared abundance. It’s part of what makes prison abolition a generative mentality and practice that extends far beyond the notion of the elimination of prisons.

[1] FCC’s 2013 press release: “FCC Reduces High Long-Distance Calling Rates Paid by Inmates

[2] The Center for Public Integrity’s 2014 investigation, “Prison bankers Cash in on Captive Customers

[3] NBC’s 2014 article, “The big business of selling apps to prison inmates

[4] “Prison bankers Cash in on Captive Customers

[5] 2015 South Florida Business Journal article, “JPay in Miramar acquired by Securus Technologies - South Florida Business Journal

[6] “Statement from Chairman Ajit Pai

[7] ibid.

[8] 2019 New York Times article, “Phone Calls From New York City Jails Will Soon Be Free

[9] From the Center for Public Integrity’s documentary, “Time is Money

[10] Chapter 5, “The Prison Industrial Complex,” in Are Prisons Obsolete? by Angela Davis

[11] ibid.

[12] ibid.

[13] Dan Berger’s 2018 piece, “How Prisons Serve Capitalism

[14] If we can agree that one of the key features of detainment is the removal of the most basic rights from the citizen by the state, among those rights, the ability to control one's use of time and where in space one can go (two key, if rudimentary, abilities that preclude the ability to earn a wage).

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