Prison-tech company bribed jails to ban in-person visits
I'm on tour with my new, nationally bestselling novel The Bezzle! Catch me in BOSTON with Randall "XKCD" Munroe (Apr 11), then PROVIDENCE (Apr 12), and beyond!
Beware of geeks bearing gifts. When prison-tech companies started offering "free" tablets to America's vast army of prisoners, it set off alarm-bells for prison reform advocates â but not for the law-enforcement agencies that manage the great American carceral enterprise.
The pitch from these prison-tech companies was that they could cut the costs of locking people up while making jails and prisons safer. Hell, they'd even make life better for prisoners. And they'd do it for free!
These prison tablets would give every prisoner their own phone and their own video-conferencing terminal. They'd supply email, of course, and all the world's books, music, movies and games. Prisoners could maintain connections with the outside world, from family to continuing education. Sounds too good to be true, huh?
Here's the catch: all of these services are blisteringly expensive. Prisoners are accustomed to being gouged on phone calls â for years, prisons have done deals with private telcos that charge a fortune for prisoners' calls and split the take with prison administrators â but even by those standards, the calls you make on a tablet are still a ripoff.
Sure, there are some prisoners for whom money is no object â wealthy people who screwed up so bad they can't get bail and are stewing in a county lockup, along with the odd rich murderer or scammer serving a long bid. But most prisoners are poor. They start poor â the cops are more likely to arrest poor people than rich people, even for the same crime, and the poorer you are, the more likely you are to get convicted or be suckered into a plea bargain with a long sentence. State legislatures are easy to whip up into a froth about minimum sentences for shoplifters who steal $7 deodorant sticks, but they are wildly indifferent to the store owner's rampant wage-theft. Wage theft is by far the most costly form of property crime in America and it is almost entirely ignored:
So America's prisons are heaving with its poorest citizens, and they're certainly not getting any richer while they're inside. While many prisoners hold jobs â prisoners produce $2b/year in goods and $9b/year in services â the average prison wage is $0.52/hour:
(In six states, prisoners get nothing; North Carolina law bans paying prisoners more than $1/day, the 13th Amendment to the US Constitution explicitly permits slavery â forced labor without pay â for prisoners.)
Likewise, prisoners' families are poor. They start poor â being poor is a strong correlate of being an American prisoner â and then one of their breadwinners is put behind bars, taking their income with them. The family savings go to paying a lawyer.
Prison-tech is a bet that these poor people, locked up and paid $1/day or less; or their families, deprived of an earner and in debt to a lawyer; will somehow come up with cash to pay $13 for a 20-minute phone call, $3 for an MP3, or double the Kindle price for an ebook.
How do you convince a prisoner earning $0.52/hour to spend $13 on a phone-call?
Well, for Securus and Viapath (AKA Global Tellink) â a pair of private equity backed prison monopolists who have swallowed nearly all their competitors â the answer was simple: they bribed prison officials to get rid of the prison phones.
Not just the phones, either: a pair of Michigan suits brought by the Civil Rights Corps accuse sheriffs and the state Department of Corrections of ending in-person visits in exchange for kickbacks from the money that prisoners' families would pay once the only way to reach their loved ones was over the "free" tablets:
These two cases are just the tip of the iceberg; Civil Rights Corps says there are hundreds of jails and prisons where Securus and Viapath have struck similar corrupt bargains:
And it's not just visits and calls. Prison-tech companies have convinced jails and prisons to eliminate mail and parcels. Letters to prisoners are scanned and delivered their tablets, at a price. Prisoners â and their loved ones â have to buy virtual "postage stamps" and pay one stamp per "page" of email. Scanned letters (say, hand-drawn birthday cards from your kids) cost several stamps:
Prisons and jails have also been convinced to eliminate their libraries and continuing education programs, and to get rid of TVs and recreational equipment. That way, prisoners will pay vastly inflated prices for streaming videos and DRM-locked music.
The icing on the cake? If the prison changes providers, all that data is wiped out â a prisoner serving decades of time will lose their music library, their kids' letters, the books they love. They can get some of that back â by working for $1/day â but the personal stuff? It's just gone.
Readers of my novels know all this. A prison-tech scam just like the one described in the Civil Rights Corps suits is at the center of my latest novel The Bezzle:
Prison-tech has haunted me for years. At first, it was just the normal horror anyone with a shred of empathy would feel for prisoners and their families, captive customers for sadistic "businesses" that have figured out how to get the poorest, most desperate people in the country to make them billions. In the novel, I call prison-tech "a machine":
a million-Âarmed robot whose every limb was tipped with a needle that sank itself into a different place on prisoners and their families and drew out a few more ccâs of blood.
But over time, that furious empathy gave way to dread. Prisoners are at the bottom of the shitty technology adoption curve. They endure the technological torments that haven't yet been sanded down on their bodies, normalized enough to impose them on people with a little more privilege and agency. I'm a long way up the curve from prisoners, but while the shitty technology curve may grind slow, it grinds fine:
The future isn't here, it's just not evenly distributed. Prisoners are the ultimate early adopters of the technology that the richest, most powerful, most sadistic people in the country's corporate board-rooms would like to force us all to use.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
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How to shatter the class solidarity of the ruling class
I'm touring my new, nationally bestselling novel The Bezzle! Catch me WEDNESDAY (Apr 11) at UCLA, then Chicago (Apr 17), Torino (Apr 21) Marin County (Apr 27), Winnipeg (May 2), Calgary (May 3), Vancouver (May 4), and beyond!
Audre Lorde counsels us that "The Master's Tools Will Never Dismantle the Master's House," while MLK said "the law cannot make a man love me, but it can restrain him from lynching me." Somewhere between replacing the system and using the system lies a pragmatic â if easily derailed â course.
Lorde is telling us that a rotten system can't be redeemed by using its own chosen reform mechanisms. King's telling us that unless we live, we can't fight â so anything within the system that makes it easier for your comrades to fight on can hasten the end of the system.
Take the problems of journalism. One old model of journalism funding involved wealthy newspaper families profiting handsomely by selling local appliance store owners the right to reach the townspeople who wanted to read sports-scores. These families expressed their patrician love of their town by peeling off some of those profits to pay reporters to sit through municipal council meetings or even travel overseas and get shot at.
In retrospect, this wasn't ever going to be a stable arrangement. It relied on both the inconstant generosity of newspaper barons and the absence of a superior way to show washing-machine ads to people who might want to buy washing machines. Neither of these were good long-term bets. Not only were newspaper barons easily distracted from their sense of patrician duty (especially when their own power was called into question), but there were lots of better ways to connect buyers and sellers lurking in potentia.
All of this was grossly exacerbated by tech monopolies. Tech barons aren't smarter or more evil than newspaper barons, but they have better tools, and so now they take 51 cents out of every ad dollar and 30 cents out of ever subscriber dollar and they refuse to deliver the news to users who explicitly requested it, unless the news company pays them a bribe to "boost" their posts:
The news is important, and people sign up to make, digest, and discuss the news for many non-economic reasons, which means that the news continues to struggle along, despite all the economic impediments and the vulture capitalists and tech monopolists who fight one another for which one will get to take the biggest bite out of the press. We've got outstanding nonprofit news outlets like Propublica, journalist-owned outlets like 404 Media, and crowdfunded reporters like Molly White (and winner-take-all outlets like the New York Times).
But as Hamilton Nolan points out, "that pot of moneyâŠis only large enough to produce a small fraction of the journalism that was being produced in past generations":
For Nolan, "public funding of journalism is the only way to fix thisâŠIf we accept that journalism is not just a business or a form of entertainment but a public good, then funding it with public money makes perfect sense":
Having grown up in Canada â under the CBC â and then lived for a quarter of my life in the UK â under the BBC â I am very enthusiastic about Nolan's solution. There are obvious problems with publicly funded journalism, like the politicization of news coverage:
But the worst version of those problems is still better than the best version of the private-equity-funded model of news production.
But Nolan notes the emergence of a new form of hedge fund news, one that is awfully promising, and also terribly fraught: Hunterbrook Media, an investigative news outlet owned by short-sellers who pay journalists to research and publish damning reports on companies they hold a short position on:
https://hntrbrk.com/
For those of you who are blissfully distant from the machinations of the financial markets, "short selling" is a wager that a company's stock price will go down. A gambler who takes a short position on a company's stock can make a lot of money if the company stumbles or fails altogether (but if the company does well, the short can suffer literally unlimited losses).
Shorts have historically paid analysts to dig into companies and uncover the sins hidden on their balance-sheets, but as Matt Levine points out, journalists work for a fraction of the price of analysts and are at least as good at uncovering dirt as MBAs are:
What's more, shorts who discover dirt on a company still need to convince journalists to publicize their findings and trigger the sell-off that makes their short position pay off. Shorts who own a muckraking journalistic operation can skip this step: they are the journalists.
There's a way in which this is sheer genius. Well-funded shorts who don't care about the news per se can still be motivated into funding freely available, high-quality investigative journalism about corporate malfeasance (notoriously, one of the least attractive forms of journalism for advertisers). They can pay journalists top dollar â even bid against each other for the most talented journalists â and supply them with all the tools they need to ply their trade. A short won't ever try the kind of bullshit the owners of Vice pulled, paying themselves millions while their journalists lose access to Lexisnexis or the PACER database:
The shorts whose journalists are best equipped stand to make the most money. What's not to like?
Well, the issue here is whether the ruling class's sense of solidarity is stronger than its greed. The wealthy have historically oscillated between real solidarity (think of the ultrawealthy lobbying to support bipartisan votes for tax cuts and bailouts) and "war of all against all" (as when wealthy colonizers dragged their countries into WWI after the supply of countries to steal ran out).
After all, the reason companies engage in the scams that shorts reveal is that they are profitable. "Behind every great fortune is a great crime," and that's just great. You don't win the game when you get into heaven, you win it when you get into the Forbes Rich List.
Take monopolies: investors like the upside of backing an upstart company that gobbles up some staid industry's margins â Amazon vs publishing, say, or Uber vs taxis. But while there's a lot of upside in that move, there's also a lot of risk: most companies that set out to "disrupt" an industry sink, taking their investors' capital down with them.
Contrast that with monopolies: backing a company that merges with its rivals and buys every small company that might someday grow large is a sure thing. Shriven of "wasteful competition," a company can lower quality, raise prices, capture its regulators, screw its workers and suppliers and laugh all the way to Davos. A big enough company can ignore the complaints of those workers, customers and regulators. They're not just too big to fail. They're not just too big to jail. They're too big to care:
Would-be monopolists are stuck in a high-stakes Prisoner's Dilemma. If they cooperate, they can screw over everyone else and get unimaginably rich. But if one party defects, they can raid the monopolist's margins, short its stock, and snitch to its regulators.
It's true that there's a clear incentive for hedge-fund managers to fund investigative journalism into other hedge-fund managers' portfolio companies. But it would be even more profitable for both of those hedgies to join forces and collude to screw the rest of us over. So long as they mistrust each other, we might see some benefit from that adversarial relationship. But the point of the 0.1% is that there aren't very many of them. The Aspen Institute can rent a hall that will hold an appreciable fraction of that crowd. They buy their private jets and bespoke suits and powdered rhino horn from the same exclusive sellers. Their kids go to the same elite schools. They know each other, and they have every opportunity to get drunk together at a charity ball or a society wedding and cook up a plan to join forces.
This is the problem at the core of "mechanism design" grounded in "rational self-interest." If you try to create a system where people do the right thing because they're selfish assholes, you normalize being a selfish asshole. Eventually, the selfish assholes form a cozy little League of Selfish Assholes and turn on the rest of us.
Appeals to morality don't work on unethical people, but appeals to immorality crowds out ethics. Take the ancient split between "free software" (software that is designed to maximize the freedom of the people who use it) and "open source software" (identical to free software, but promoted as a better way to make robust code through transparency and peer review).
Over the years, open source â an appeal to your own selfish need for better code â triumphed over free software, and its appeal to the ethics of a world of "software freedom." But it turns out that while the difference between "open" and "free" was once mere semantics, it's fully possible to decouple the two. Today, we have lots of "open source": you can see the code that Google, Microsoft, Apple and Facebook uses, and even contribute your labor to it for free. But you can't actually decide how the software you write works, because it all takes a loop through Google, Microsoft, Apple or Facebook's servers, and only those trillion-dollar tech monopolists have the software freedom to determine how those servers work:
That's ruling class solidarity. The Big Tech firms have hidden a myriad of sins beneath their bafflegab and balance-sheets. These (as yet) undiscovered scams constitute a "bezzle," which JK Galbraith defined as "the magic interval when a confidence trickster knows he has the money he has appropriated but the victim does not yet understand that he has lost it."
The purpose of Hunterbrook is to discover and destroy bezzles, hastening the moment of realization that the wealth we all feel in a world of seemingly orderly technology is really an illusion. Hunterbrook certainly has its pick of bezzles to choose from, because we are living in a Golden Age of the Bezzle.
Which is why I titled my new novel The Bezzle. It's a tale of high-tech finance scams, starring my two-fisted forensic accountant Marty Hench, and in this volume, Hench is called upon to unwind a predatory prison-tech scam that victimizes the most vulnerable people in America â our army of prisoners â and their families:
The scheme I fictionalize in The Bezzle is very real. Prison-tech monopolists like Securus and Viapath bribe prison officials to abolish calls, in-person visits, mail and parcels, then they supply prisoners with "free" tablets where they pay hugely inflated rates to receive mail, speak to their families, and access ebooks, distance education and other electronic media:
But a group of activists have cornered these high-tech predators, run them to ground and driven them to the brink of extinction, and they've done it using "the master's tools" â with appeals to regulators and the finance sector itself.
Writing for The Appeal, Dana Floberg and Morgan Duckett describe the campaign they waged with Worth Rises to bankrupt the prison-tech sector:
Here's the headline figure: Securus is $1.8 billion in debt, and it has eight months to find a financier or it will go bust. What's more, all the creditors it might reasonably approach have rejected its overtures, and its bonds have been downrated to junk status. It's a dead duck.
Even better is how this happened. Securus's debt problems started with its acquisition, a leveraged buyout by Platinum Equity, who borrowed heavily against the firm and then looted it with bogus "management fees" that meant that the debt continued to grow, despite Securus's $700m in annual revenue from America's prisoners. Platinum was just the last in a long line of PE companies that loaded up Securus with debt and merged it with its competitors, who were also mortgaged to make profits for other private equity funds.
For years, Securus and Platinum were able to service their debt and roll it over when it came due. But after Worth Rises got NYC to pass a law making jail calls free, creditors started to back away from Securus. It's one thing for Securus to charge $18 for a local call from a prison when it's splitting the money with the city jail system. But when that $18 needs to be paid by the city, they're going to demand much lower prices. To make things worse for Securus, prison reformers got similar laws passed in San Francisco and in Connecticut.
Securus tried to outrun its problems by gobbling up one of its major rivals, Icsolutions, but Worth Rises and its coalition convinced regulators at the FCC to block the merger. Securus abandoned the deal:
https://worthrises.org/blogpost/securusmerger
Then, Worth Rises targeted Platinum Equity, going after the pension funds and other investors whose capital Platinum used to keep Securus going. The massive negative press campaign led to eight-figure disinvestments:
Now, Securus's debt became "distressed," trading at $0.47 on the dollar. A brief, covid-fueled reprieve gave Securus a temporary lifeline, as prisoners' families were barred from in-person visits and had to pay Securus's rates to talk to their incarcerated loved ones. But after lockdown, Securus's troubles picked up right where they left off.
They targeted Platinum's founder, Tom Gores, who papered over his bloody fortune by styling himself as a philanthropist and sports-team owner. After a campaign by Worth Rises and Color of Change, Gores was kicked off the Los Angeles County Museum of Art board. When Gores tried to flip Securus to a SPAC â the same scam Trump pulled with Truth Social â the negative publicity about Securus's unsound morals and financials killed the deal:
Congress passed the Martha Wright-Reed Just and Reasonable Communications Act, giving the FCC the power to regulate the price of federal prisoners' communications. Securus's debt prices tumbled further:
https://www.govtrack.us/congress/bills/117/s1541
Securus's debts were coming due: it owes $1.3b in 2024, and hundreds of millions more in 2025. Platinum has promised a $400m cash infusion, but that didn't sway S&P Global, a bond-rating agency that re-rated Securus's bonds as "CCC" (compare with "AAA"). Moody's concurred. Now, Securus is stuck selling junk-bonds:
https://www.govtrack.us/congress/bills/117/s1541
The company's creditors have given Securus an eight-month runway to find a new lender before they force it into bankruptcy. The company's debt is trading at $0.08 on the dollar.
Securus's major competitor is Viapath (prison tech is a duopoly). Viapath is also debt-burdened and desperate, thanks to a parallel campaign by Worth Rises, and has tried all of Securus's tricks, and failed:
Viapath's debts are due next year, and if Securus tanks, no one in their right mind will give Viapath a dime. They're the walking dead.
Worth Rise's brilliant guerrilla warfare against prison-tech and its private equity backers are a master class in using the master's tools to dismantle the master's house. The finance sector isn't a friend of justice or working people, but sometimes it can be used tactically against financialization itself. To paraphrase MLK, "finance can't make a corporation love you, but it can stop a corporation from destroying you."
Yes, the ruling class finds solidarity at the most unexpected moments, and yes, it's easy for appeals to greed to institutionalize greediness. But whether it's funding unbezzling journalism through short selling, or freeing prisons by brandishing their cooked balance-sheets in the faces of bond-rating agencies, there's a lot of good we can do on the way to dismantling the system.
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
Prison-tech is a scam - and a harbinger of your future
If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
Here's how the shitty technology adoption curve works: when you want to roll out a new, abusive technology, look for a group of vulnerable people whose complaints are roundly ignored and subject them to your bad idea. Sand the rough edges off on their bodies and lives. Normalize the technological abuse you seek to inflict.
Next: work your way up the privilege gradient. Maybe you start with prisoners, then work your way up to asylum seekers, parolees and mental patients. Then try it on kids and gig workers. Now, college students and blue collar workers. Climb that curve, bit by bit, until you've reached its apex and everyone is living with your shitty technology:
Prisoners, asylum seekers, drug addicts and other marginalized people are the involuntary early adopters of every form of disciplinary technology. They are the leading indicators of the ways that technology will be ruining your life in the future. They are the harbingers of all our technological doom.
Which brings me to Minnesota.
Minnesota is one of the first states make prison phone-calls free. This is a big deal, because prison phone-calls are a big business. Prisoners are literally a captive audience, and the telecommunications sector is populated by sociopaths, bred and trained to spot and exploit abusive monopoly opportunities. As states across America locked up more and more people for longer and longer terms, the cost of operating prisons skyrocketed, even as states slashed taxes on the rich and turned a blind eye to tax evasion.
This presented telco predators with an unbeatable opportunity: they approached state prison operators and offered them a bargain: "Let us take over the telephone service to your carceral facility and we will levy eye-watering per-minute charges on the most desperate people in the world. Their families â struggling with one breadwinner behind bars â will find the money to pay this ransom, and we'll split the profits with you, the cash-strapped, incarceration-happy state government."
This was the opening salvo, and it turned into a fantastic little money-spinner. Prison telco companies and state prison operators were the public-private partnership from hell. Prison-tech companies openly funneled money to state coffers in the form of kickbacks, even as they secretly bribed prison officials to let them gouge their inmates and inmates' families:
As digital technology got cheaper and prison-tech companies got greedier, the low end of the shitty tech adoption curve got a lot more crowded. Prison-tech companies started handing out "free" cheap Android tablets to prisoners, laying the groundwork for the next phase of the scam. Once prisoners had tablets, prisons could get rid of phones altogether and charge prisoners â and their families â even higher rates to place calls right to the prisoner's cell.
Then, prisons could end in-person visits and replace them with sub-skype, postage-stamp-sized videoconferencing, at rates even higher than the voice-call rates. Combine that with a ban on mailing letters to and from prisoners â replaced with a service that charged even higher rates to scan mail sent to prisoners, and then charged prisoners to download the scans â and prison-tech companies could claim to be at the vanguard of prison safety, ending the smuggling of dope-impregnated letters and other contraband into the prison system.
Prison-tech invented some wild shit, like the "digital stamp," a mainstay of industry giant Jpay, which requires prisoners to pay for "stamps" to send or receive a "page" of email. If you're keeping score, you've realized that this is a system where prisoners and their families have to pay for calls, "in-person" visits, handwritten letters, and email.
It goes on: prisons shuttered their libraries and replaced them with ebook stores that charged 2-4 times the prices you'd pay for books on the outside. Prisoners were sold digital music at 200-300% markups relative to, say, iTunes.
Remember, these are prisoners: locked up for years or decades, decades during which their families scraped by with a breadwinner behind bars. Prisoners can earn money, sure â as much as $0.89/hour, doing forced labor for companies that contract with prisons for their workforce:
So those $3 digital music tracks are being bought by people earning as little as $0.10/hour. Which makes it especially galling when prisons change prison-tech suppliers, whereupon all that digital music is deleted, wiping prisoners' media collection out â forever (literally, for prisoners serving life terms):
Let's recap: America goes on a prison rampage, locking up ever-larger numbers of people for ever-longer sentences. Once inside, prisoners had their access to friends and family rationed, along with access to books, music, education and communities outside. This is very bad for prisoners â strong ties to people outside is closely tied to successful reentry â but it's great for state budgets, and for wardens, thanks to kickbacks:
Back to Minnesota: when Minnesota became the fourth state in the USA where the state, not prisoners, would pay for prison calls, it seemed like they were finally breaking the vicious cycle in which every dollar ripped off of prisoners' family paid 40 cents to the state treasury:
But â as Katya Schwenk writes for The Lever â what happened next is "a case study in how prison communication companies and their private equity owners have managed to preserve their symbiotic relationship with state corrections agencies despite reforms â at the major expense of incarcerated people and their families":
Immediately after the state ended the ransoming of prisoners' phone calls, the private-equity backed prison-tech companies that had dug their mouth-parts into the state's prison jacked up the price of all their other digital services. For example, the price of a digital song in a Minnesota prison just jumped from $1.99 to $2.36 (for prisoners earning as little as $0.25/hour).
As Paul Wright from the Human Rights Defense Center told Schwenk, "The ideal world for the private equity owners of these companies is every prisoner has one of their tablets, and every one of those tablets is hooked up to the bank account of someone outside of prison that they can just drain."
The state's new prison-tech supplier promises to double the amount of kickbacks it pays the state each year, thanks to an aggressive expansion into games, money transfers, and other "services." The perverse incentive isn't hard to spot: the more these prison-tech companies charge, the more kickbacks they pay to the prisons.
The primary prison-tech company for Minnesota's prisons is Viapath (nee Global Tel Link), which pioneered price-gouging on in-prison phone calls. Viapath has spent the past two decades being bought and sold by different private equity firms: Goldman Sachs, Veritas Capital, and now the $46b/year American Securities.
Viapath competes with another private equity-backed prison-tech giant: Aventiv (Securus, Jpay), owned by Platinum Equity. Together, Viapath and Aventiv control 90% of the prison-tech market. These companies have a rap-sheet as long as your arm: bribing wardens, stealing from prisoners and their families, and recording prisoner-attorney calls. But these are the kinds of crimes the state punishes with fines and settlements â not by terminating its contracts with these predators.
These companies continue to flout the law. Minnesota's new free-calls system bans prison-tech companies from paying kickbacks to prisons and prison-officials for telcoms services, so the prison-tech companies have rebranded ebooks, music, and money-transfers as non-communications products, and the kickbacks are bigger than ever.
This is the bottom end of the shitty technology adoption curve. Long before Ubisoft started deleting games that you'd bought a "perpetual license" for, prisoners were having their media ganked by an uncaring corporation that knew it was untouchable:
https://www.youtube.com/watch?v=VIqyvquTEVU
Revoking your media, charging by the byte for messaging, confiscating things in the name of security and then selling them back to you â these are all tactics that were developed in the prison system, refined, normalized, and then worked up the privilege gradient. Prisoners are living in your technology future. It's just not evenly distributed â yet.
As it happens, prison-tech is at the heart of my next novel, The Bezzle, which comes out on Feb 20. This is a followup to last year's bestselling Red Team Blues, which introduced the world to Marty Hench, a two-fisted, hard-bitten, high-tech forensic accountant who's spent 40 years busting Silicon Valley finance scams:
In The Bezzle, we travel with Marty back to the mid 2000s (Hench is a kind of tech-scam Zelig and every book is a standalone tale of high-tech ripoffs from a different time and place). Marty's trying to help his old pal Scott Warms, a once-high-flying founder who's fallen prey to California's three-strikes law and is now facing decades in a state pen. As bad as things are, they get worse when the prison starts handing out "free" tablet and closing down the visitation room, the library, and the payphones.
This is an entry to the thing I love most about the Hench novels: the opportunity to turn all this dry, financial skullduggery into high-intensity, high-stakes technothriller plot. For me, Marty Hench is a tool for flensing the scam economy of all its layers of respectability bullshit and exposing the rot at the core.
It's not a coincidence that I've got a book coming out in a week that's about something that's in the news right now. I didn't "predict" this current turn â I observed it. The world comes at you fast and technology news flutters past before you can register it. Luckily, I have a method for capturing this stuff as it happens:
Writing about tech issues that are long-simmering but still in the periphery is a technique I call "predicting the present." It's the technique I used when I wrote Little Brother, about out-of-control state surveillance of the internet. When Snowden revealed the extent of NSA spying in 2013, people acted as though I'd "predicted" the Snowden revelations:
But Little Brother and Snowden's own heroic decision have a common origin: the brave whistleblower Mark Klein, who walked into EFF's offices in 2006 and revealed that he'd been ordered by his boss at AT&T to install a beam-splitter into the main fiber trunk so that the NSA could illegally wiretap the entire internet:
Mark Klein inspired me to write Little Brother â but despite national press attention, the Klein revelations didn't put a stop to NSA spying. The NSA was still conducting its lawless surveillance campaign in 2013, when Snowden, disgusted with NSA leadership for lying to Congress under oath, decided to blow the whistle again:
The assumption that let the NSA get away with mass surveillance was that it would only be weaponized against the people at the bottom of the shitty technology adoption curve: brown people, mostly in other countries. The Snowden revelations made it clear that these were just the beginning, and sure enough, more than a decade later, we have data-brokers sucking up billions in cop kickbacks to enable warrantless surveillance, while virtually following people to abortion clinics, churches, and protests. Mass surveillance is chugging its way up the shitty tech adoption curve with no sign of stopping.
Like Little Brother, The Bezzle is intended as a kind of virtual flythrough of what life is like further down on that curve â a way for readers who have too much agency to be in the crosshairs of a company like Viapath or Avently right now to wake up before that kind of technology comes for them, and to inspire them to take up the cause of the people further down the curve who are mired in it.
The Bezzle is an intense book, but it's also a very fun story â just like Little Brother. It's a book that lays bare the internal technical workings of so many scams, from multi-level marketing to real-estate investment trusts, from music royalty theft to prison-tech, in the course of an ice-cold revenge plot that keeps twisting to the very last page.
It'll drop in six days. I hope you'll check it out:
On Weds (May 10), Iâm in Vancouver for a keynote at the Open Source Summit and a book event for Red Team Blues at Heritage Hall and Thu (May 11), Iâm in Calgary for Wordfest.
Itâs a double-whammy that defines 21st century American life: a corporation gets caught doing something terrible, exploitative or even murderous, and a government agency steps inâââonly to discover that thereâs nothing it can do, because Reagan/Trump/Clinton/Bush I/Bush II deregulated that industry and stripped the agency of enforcement powers.
If youâd like an essay-formatted version of this post to read or share, hereâs a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
Man, that feels awful. The idea that extremists gutted our democratically accountable institutions so that thereâs nothing they can do, no matter how egregious a corporationâs conduct is so demoralizing. Makes me feel like giving up.
But the law is a complex and mysterious thing. Regulators arenât actually helpless. There are authorities, powers and systems that the corporate wreckers passed over, failed to notice, or failed to neuter. Take Section 5 of the FTC Act, which gives the Commission broad powers to prevent âunfair and deceptiveâ practices. Since the 1970s, the FTC just acted like this didnât exist, even though it was right there all along, between Section 4 and Section 6.
Then, under the directorship of FTC chair Lina Khan, Section 5 was rediscovered and mobilized, first to end the practice of noncompete âagreementsâ for workers nationwide:
A new breed of supremely competent, progressive regulators are dusting off those old lawbooks and figuring out what powers they have, and theyâre using those powers to Get Stuff Done. Itâs like that old joke:
Office manager: $75 to kick the photocopier?
Repair person: No, itâs $5 to kick the photocopier, $70 to know where to kick it.
Thereâs a whole generation of expert photocopier-kickers in public life, and theyâve got their boots on:
This is the upside of technocracyâââwhere you have people who are appointed to do good things, and who want to do good things, and who figure out how to do good things. There are dormant powers everywhere in law. Remember when Southwest Air stranded a million passengers over Christmas week and Transport Secretary Pete Buttigieg responded by talking sternly about doing better, but without opening any enforcement actions against SWA?
At the time, Buttigiegâs defenders said that was all he could do: âPete isnât the boss of Southwestâs IT department, you know!â Heâs notâââbut he is in possession of identical powers to the FTC to regulate âunfair and deceptiveâ practices, thanks to USC40 Section 41712(a), which copy-pastes the language from Article 5 of the FTC Act into the DOTâs legislative basis:
The failures of SWA were a long time coming, and were driven by the companyâs shifting of costs from shareholders to employees and fliers. SWA schedules many flights for which they have no aircraft or crew, and when the time to fly those jets comes, the company simply cancels the emptiest flights. This is great for SWAâs shareholders, who donât have to pay for fuel and crew for half-empty planesâââbut itâs terrible for crew and fliers.
Whatâs more, selling tickets for planes that donât exist is plainly unfair and deceptive. A good photocopier-kicker in charge of the DOT would have arrived with a âfirst 100 daysâ plan that included opening hearings into this practice, as a prelude to directly regulating this conduct out of existence, averting the worst aviation scheduling crisis in US history. Thatâs what Buttigiegâs critics wanted from him: a competent assessment of his powers, followed by the vigorous use of those powers to protect the American people.
One domain thatâs been in sore need of a photocopier-kicker for years is prison tech. America (âthe land of the freeâ) incarcerates more people than any nation in the history of the worldâââmore than the USSR, more than China, more than Apartheid-era South Africa.
For corporate prison profiteers, those prisoners are a literal captive audience, easy pickings for gouging on telephone calls, books, music, and food. For years, companies like Securus have been behind an incredibly imaginative array of sadistic tactics that strip prisoners of the contact, education and nutrition that governments normally provide to incarcerated people, and then sells those prisoners and their families poor substitutes for those necessities at markups that cost many multiples of the equivalent services in the free world.
Think of prisons that reduce the amount of food served to sub-starvation levels, then sell food at high markups in the prison commissary. For prisoners whose families can afford commissary fees, this is merely extortion. But for prisoners who donât have anyone to top up their commissary accounts, itâs literal starvation.
This is the shape of every prison profiteerâs grift: take something vital away and then sell it back at a massive markup, dooming the prisoners who canât afford it. The most obvious way to gouge prisoners is by charging huge markups for phone calls. Prisoners who can afford to pay many dollars per minute can stay in touch with their families, while the rest rot in isolation.
In 2015, the FCC tried to halt this practice, passing an order capping the price of calls, but in 2017, the DC District Court struck down the order, ruling that the FCC couldnât regulate in-state call tariffs, which are the majority of prison calls:
This was a bonanza for prison profiteers. Companies like Jpay (now a division of Securus) cranked up the price of prisonersâ calls. At the same time, dark-money lobbying campaigns urged prisons to get rid of their in-person visitation programs in the name of âsafetyâ:
Not just visitation: prisons shuttered their libraries and banned shipments of letters, cards and booksâââagain, in the same of âsafety.â Jpay an its competitors stepped in with âfree tabletsââââcheap, badly made Chinese tablets. Instead of checking out books from the prison library or having them mailed to you by a friend or family member, prisoners had to buy DRM-locked ebooks at many multiples of the outside world price (these same prices were slapped on public domain books ganked from Project Gutenberg):
Instead of getting letters and cards from your family members and friends, you had to pay to look at scans of them, buying âvirtual stampsâ that had to accompany every page (they even charged by the âpageâ for text messages):
Enshittification is my name for service-decay, where companies that have some kind of lock-in make things worse and worse for their customers, secure in the knowledge that theyâll keep paying because the lock-in keeps them from leaving. When your customers are literally locked in (that is, behind bars), the enshittification comes fast and furious.
Securus/Jpay and its competitors found all kinds of ways to make their services worse, like harvesting recordings of their calls to produce biometric voice-prints that could be used to track prisoners after they were released:
Of course, once the prison phone-carriers started harvesting prisonersâ phone calls, it was inevitable that they would leak those calls, including intimate calls with family members and privileged calls with lawyers:
Prison-tech companies know they can extract huge fortunes from their captive audience, so they are shameless about offering bribes (ahem, âprofit-sharingâ) to prison authorities and sheriffsâ offices to switch vendors. When that happens, prisoners inevitably suffer, as happened in 2018, when Florida state prisons changed tech providers and wiped out $11.8m worth of prisoners purchased mediaâââevery song prisoners had paid for:
As bad as these deals are for prisoners, theyâre great for jailers, who are personally and institutionally enriched by prison-tech giants. This is textbook corruption, in which small groups of individuals are enriched while vast, diffuse costs are extracted from large groups of people. Naturally, the deals themselves are swathed in secrecy, and public records requests for their details are met with blank, illegal refusals:
The âshitty technology adoption curveâ predicts that technological harms that are first visited upon prisoners and other low-privilege people will gradually work its way up the privilege gradient:
Securus powered up the Shitty Tech Adoption Curve. They donât just spy on and exploit prisonersâââthey leveraged that surveillance empire into a line of product lines that touch us all. Securus transformed their prisoner telephone tracking business into an off-the-books, warrantless tracking tool that cops everywhere use to illegally track people:
In other words, our jails and prisons are incubators that breed digital pathogens that infect all of us eventually. Itâs past time we got in the exterminators and flushed out those nests.
Thatâs where Californiaâs new photocopier-kickers come in. Like many states, California has a Public Utility Commission (PUC), which regulates private companies that provide utilities, like telecoms. That means that the state of California can reach into every jail and prison in the state and grab the prison profiteers by the throats and toss âem out the window.
Writing in The American Prospect, Kalena Thomhave does an excellent job on the technical ins-and-outs of calling on PUCs to regulate prison-tech, both in California and in other states where PUCs havenât yet been neutered or eliminated by deregulation-crazed Republicans:
Thomhave describes how Californiaâs county sheriffs have waxed fat on kickbacks from the prison-tech sector: âfor example, the Yuba County Sheriffâs Office receives 25 percent of GTL/ViaPathâs gross revenue on video calls made from tablets.â Small wonder that sheriffs offices lobby against free calls from jail, claiming that prisonersâ phone tariffs are needed to fund their operations.
Itâs true that the majority of this kickback money (51%) goes into âinmate welfare funds,â but these funds donât have to go to inmatesâââthey can and are diverted to âmaintenance, salaries, travel, and equipment like security cameras.â
But limiting contact between prisoners and their families in order to pay for operating expenses is a foolish bargain. Isolation from friends and family is closely linked to recidivism. If we want prisoners to live productive lives after their serve their time, we should maximize their contact with the outside, not link it to their familiesâ ability to spend 50 times more per minute than anyone making a normal call.
The covid lockdowns were a boon to prison-tech profiteers, whose video-calling products were used to replace in-person visits. But when pandemic restrictions lifted, the in-person visits didnât come back. Instead, jails continued to ban in-person visits and replace them with expensive video calls.
Even with new power, the FCC canât directly regulate this activity, especially not in county jails. But PUCs can. Not every state has a PUC: ALEC, the right-wing legislation factory, has pushed laws that gut or eliminate PUCs across the country:
But California has a PUC, and it is gathering information now in advance of an order that could rein in these extractive businesses and halt the shitty tech adoption curve in its tracks:
Thatâs some top-notch photocopier-kicking, right there.
Catch me on tour with Red Team Blues in Vancouver, Calgary, Toronto, DC, Gaithersburg, Oxford, Hay, Manchester, Nottingham, London, and Berlin!
[Image ID: A prison cell. Behind the bars is the bear from the California state flag. There is an old-fashioned telephone headset near his ear, such that he appears to be making a call.]
