Are campaign contributions the new “commission”? Analysis of Securus’s contributions in Sacramento
by Peter Wagner, August 12, 2015
Sacramento County, California’s jail confines 4,100 people on a typical day, so the selection of the sheriff should be a big deal for Sacramento residents, yet the leading campaign contributor is a company from Texas.
Dallas-based Securus apparently has a strong interest in who gets to be the Sacramento County Sheriff, so much so that the prison and jail telecommunications giant has been giving $10,000 a year to the Sheriff’s reelection fund for at least the last 3 years, as we describe in a letter sent this morning to the Federal Communications Commission.
Now what’s especially interesting about this is that Securus doesn’t currently have a relationship with Sacramento County; in fact, the county’s current phone contract is with competitor ICSolutions. We wouldn’t be surprised to see the contractor change soon, though, as new bids for the contract were due in July.
As the Federal Communications Commission prepares for a new ruling on regulating the industry, our letter addresses one of the more controversial issues: What should the FCC do about the commissions currently demanded by the facilities in exchange for awarding monopoly contracts to the prison and jail telephone companies? The demand for commissions is at the root of the dysfunction in the prison and jail telecommunications market, but we believe banning the commissions is not necessarily the solution.
We argue that the FCC can simply ensure that the rates and fees charged are reasonable and leave the companies and the facilities to fight over whether and how to share the reasonable profits that remain. (Relatedly, one also has to wonder if things like campaign contributions could possibly explain part of the discrepancy between the tiny profits that Securus tells the FCC it makes and the huge profits that Securus claims before its investors. )
In fact, ensuring that the rates are reasonable is the approach the FCC already took when they regulated inter-state calls, capping the charges for the calls and declaring that commissions were not a legitimate cost that could be used to justify higher rates.
Put simply, the FCC should ensure fair rates for families; that’s best achieved through direct regulation of rates and fees, not by trying to iron out every misaligned incentive in the market.