April 21, 2017

Private: The Cost of Freedom

2017 ACS National Convention, Arpit Gupta, Ethan Frenchman

*This piece is part of the ACSblog Symposium: 2017 ACS National Convention. The symposium will consider topics featured at the three day convention, scheduled for June 8-10, 2017. 

by Ethan Frenchman, Appellate Attorney, Maryland Office of the Public Defender and Arpit Gupta, Professor of Finance, NYU Stern School of Business

The evidence is in, and America’s money bail system is not worth the cost.

America and the Philippines are the only two nations that employ a wealth-based pretrial detention system. In this system, criminal defendants are arrested and then assessed an amount of money. If the money is not paid or guaranteed by some other person, the accused remains in jail. The end result of this system is easily understood: rich defendants buy their freedom, and the poor sit behind bars.

Richard Stanford, for example, is a poor defendant. A Vietnam veteran, Mr. Stanford had exactly 31 cents to his name when he was arrested for trespassing in Baltimore County, Maryland. But the judge set his bail at $2,600 and Mr. Stanford was consequently jailed for weeks because he could not buy his freedom for even 10 percent: $260.

This wealth-based system has been called the “front door” of mass incarceration, and for good reason. With more than 400,000 people detained in America awaiting trial, the jails are overflowing with non-violent, presumptively innocent people like Mr. Stanford. This is no surprise in light of the fact that freedom costs money, and the majority of Americans, as the Federal Reserve announced, do not have $400 available for an emergency.

To fill the gap, a powerful and predatory industry has emerged: corporate bail bondsmen. Acting as agents for nation-wide insurance companies, bail bondsmen charge defendants and their loved ones a non-refundable fee to satisfy the bond. This fee is often paid in installments for years.

For example, Baltimore’s City Paper reported how, in 2008, Demorrea Tarver of was arrested and assessed a $275,000 bond. A bail bondsmen charged Mr. Tarver and his mother a non-refundable 10 percent fee of $27,500. The Tarvers agreed to pay $5,000 up-front and $300/month for the next six years. Mr. Tarver’s case was dismissed for lack of evidence, but the bondsmen still had to be paid. Unable to cover even the interest, by 2016 Mr. Tarver owed nearly $30,000.

Perhaps the enormous price of freedom would be worth it if the cost ensured that defendants return to court and obey the law. However, the opposite is true. In a large study of Philadelphia recently published in the Journal of Legal Studies, we determined that money bail causes convictions, causes new crime and has no measurable impact on a defendants’ return to court.

Thankfully, the tide is turning in favor of a more rational system. Reformers have won major victories through courts, legislatures and rules committees. But there is plenty to do, even short of outright change. Like doctors, court administrators can adopt automated text message reminders to improve court appearance rates. State and federal insurance regulators must scrutinize the opaque lending practices of bail bondsmen. And most importantly, prosecutors and judges must end their reliance on unaffordable for demonstrably indigent arrestees. Such common sense reforms will ensure that dangerous defendants remain in jail, and poor defendants can be released with minimal risk of failing to return to court.