TIME justice

High Court Denies Gay-Marriage Appeals

Supreme Court Gay Marriage
Visitors stand in line to watch arguments on the first day of the new term of the U.S. Supreme Court in Washington, Oct. 6, 2014. Jonathan Ernst—Reuters

(WASHINGTON) — The Supreme Court turned away appeals Monday from five states seeking to prohibit same-sex marriages, paving the way for an immediate expansion of gay and lesbian unions.

The justices on Monday did not comment in rejecting appeals from Indiana, Oklahoma, Utah, Virginia and Wisconsin. No other state cases were currently pending with the high court, but the justices stopped short of resolving for now the question of same-sex marriage nationwide.

The court’s order immediately ends delays on marriage in those states. Couples in six other states — Colorado, Kansas, North Carolina, South Carolina, West Virginia and Wyoming — should be able to get married in short order. Those states would be bound by the same appellate rulings that were put on hold pending the Supreme Court’s review.

That would make same-sex marriage legal in 30 states and the District of Columbia.

Experts and advocates on both sides of the issue believed the justices would step in and decide gay marriage cases this term.

The justices have an obligation to settle an issue of such national importance, not abdicate that responsibility to lower court judges, the advocates said. Opting out of hearing the cases leaves those lower court rulings in place.

Two other appeals courts, in Cincinnati and San Francisco, could issue decisions any time in same-sex marriage cases. Judges in the Cincinnati-based 6th Circuit who are weighing pro-gay marriage rulings in Kentucky, Michigan, Ohio and Tennessee, appeared more likely to rule in favor of state bans than did the 9th Circuit judges in San Francisco, who are considering Idaho and Nevada restrictions on marriage.

It takes just four of the nine justices to vote to hear a case, but it takes a majority of at least five for an eventual ruling. Monday’s opaque order did not indicate how the justices voted on whether to hear the appeals.

TIME justice

North Carolina Asks Supreme Court to Intervene in Voting Rights Fight

Holder Announces DOJ Plan To Sue North Carolina Over Voter ID Law
U.S. Attorney General Eric Holder speaks during a press conference announcing Department of Justice plans to sue North Carolina over Voter ID regulations at the Department of Justice on September 30, 2013 in Washington, D.C. Kris Connor—Getty Images

North Carolina's voting law is one of several tied up in the courts as Election Day draws near.

Attorneys for North Carolina and voting rights groups battling it out over the state’s 2013 voting law will have yet another hurdle to clear before it becomes clear if that law will or will not be in effect come early November’s elections.

Just days after the civil rights organizations challenging the law celebrated an appellate court decision to lessen its impact by allowing same-day registration and out-of-precinct voting during upcoming midterm elections, they now have until 5 p.m. ET Sunday to respond to the state’s request that the U.S. Supreme Court enjoin the Fourth Circuit Court of Appeals’ decision to block parts of the law.

In a petition filed late Thursday, North Carolina attorneys say the lower court’s decision, set to be in effect during a statewide general election for the first time this November, “represents a massive and unprecedented last-minute change” before the state’s early voting period starts Oct. 23. “North Carolina is not prepared for the changes and will not have enough time to implement them in an orderly manner,” the petition reads.

The Supreme Court filing is the latest legal barrage over North Carolina’s law, which voting rights advocates have called the most egregious to pass since the High Court struck down a key portion of the Voting Rights Act last year. Those advocates argue the law violates Section 2 of the act, which prohibits racially discriminatory voting practices. In a 2-1 ruling issued Oct.1, the Appellate court found there was merit in the Section 2 claims, noting there was enough potential that some minority voters would be impacted by the law to require that parts of the law be enjoined. During and after the election, the majority opinion reads, “there can be no do-over and no redress. The injury to these voters is real and completely irreparable if nothing is done to enjoin this law.”

The state says the decision was based on a “deeply flawed” interpretation of the Voting Rights Act, recalling a recent Supreme Court ruling to block a reversal of changes to Ohio’s early voting period. Given that Ohio precedent, there’s a likelihood that a Supreme Court ruling on the North Carolina case could be in the state’s favor — if the case makes it that high, which it potentially could.

North Carolina also says that candidates, organizations and political parties have been passing out voting information that reflected the changes brought on by the 2013 law. A decision to change the rules so close to the election, they say, “will result in even more confusion.”

The Advancement Project, which is the lead litigator in the case against the state, stands by the lower court’s interpretation of Section 2, saying in a statement “there are no grounds for the Supreme Court” to overturn the appellate court decision. “These measures are part of a calculated effort by politicians to manipulate the voting rules for partisan gain,” said Advancement Project Co-Director Penda Hair.

TIME justice

Ferguson Protesters Arrested in First Confrontation With Police in Weeks

A police officer observes the crowd gathered in protest the police shooting of teenager Mike Brown, Ferguson, Missouri, Sept. 29, 2014.
A police officer observes the crowd gathered in protest the police shooting of teenager Mike Brown, Ferguson, Missouri, Sept. 29, 2014. James Cooper—Demotix/Corbis

A new round of clashes after nightly taunts by demonstrators

Police in Ferguson, Missouri arrested about half a dozen protesters Thursday night after days of late-night demonstrations and repeated acts of civil disobedience, marking an end to a period of relative calm after weeks of violent clashes between demonstrators and law enforcement after the August shooting of unarmed teenager Michael Brown by police officer Darren Wilson.

Those arrested included members of an activist group known as the Millennials as well as a freelance journalist for CNN, The Washington Post reports. It’s not clear on what charges the protesters were arrested, but according to the Post, the demonstrators had been staging confrontations with the police for days, linking arms to block the street or loudly chanting in the streets well past an 11 p.m. noise ordinance.

On Thursday, police reportedly asked the group to quiet down, which sparked only louder chants and an eventual clash between law enforcement and demonstrators, reports the Post.

[The Washington Post]

TIME Politicians

Tom DeLay Celebrates ‘New Life’ Following Court Win

Tom Delay
Former Rep. Tom Delay, R-Texas, talks with reporters after a lunch meeting of the Texas Republicans in the capitol on the day his conviction for corruption was overturned by a Texas appeals court. Tom Williams—CQ-Roll Call,Inc.

He started by picking up a burger and fries

After former House Majority Leader Tom DeLay beat back money-laundering charges in Texas’ highest criminal court Wednesday, he drove with his family and friends to Willie’s Grill & Ice House in Sugar Land for a burger, fries and onion rings.

“Are you kidding me,” asked DeLay, laughing, when asked how he’s doing. “I feel great.”

DeLay has waited a long time to be removed from the yoke of legal troubles. In 2005, DeLay stepped down from his Majority Leader post after a Texas grand jury indicted him on charges that he improperly funneled donations to Texas House candidates. On Wednesday, the Texas Court of Criminal Appeals upheld an earlier ruling throwing out his conviction in 2010. DeLay has also weathered various ethics charges raised against him by Democrats in 1996 and 1998 as well as and a federal lawsuit accusing the then-Majority Whip of racketeering in 2000.

DeLay told TIME that his legal fees for “all of that” is “well over $12 million.”

Unsurprisingly, DeLay blames the Democrats for his downfall, arguing that they exploited a “stupid” Republican Party law that requires members to give up leadership posts if they are indicted.

“This is part of the criminalization of politics that the left is very much involved in,” he says. “It’s not just me—They did it to [Texas] Gov. Rick Perry, I contend they did it to [Virginia] Gov. Bob McDonnell, they’re trying to do it [Wisconsin] Gov. Scott Walker and many others.”

The legal battles haven’t sapped his enthusiasm for politics, however. When asked if he would consider running for office, DeLay left the door open.

“I don’t know what the Lord has for me,” he said. “I’m just excited about my new life. And I can get on with it.”

TIME justice

D.A.: Body-Cam Video Justifies Utah Officer Shooting of Unarmed Man

A Los Angeles Police officer wears an on-body camera during a demonstration for media in Los Angeles on Jan. 15, 2014.
A Los Angeles Police officer wears an on-body camera during a demonstration for media in Los Angeles on Jan. 15, 2014. Damian Dovargane—AP

A police officer was legally justified in shooting an unarmed man, a Salt Lake City district attorney said Tuesday, in a decision based on video from the officer’s body camera. The case is the first time the district attorney there has relied on body-cam evidence to determine whether an officer-involved shooting could be justified.

Dillon Taylor, 20, was shot to death by Salt Lake City officer Bron Cruz on Aug. 11 after police received a report about three men who were seen near a 7-Eleven, possibly flashing a gun, reported NBC affiliate KSL…

Read the rest of the story from our partners at NBC News

TIME Crime

Florida Man Guilty of Murdering Teen in Fight Over Loud Music

Defendant Michael Dunn walks back into the courtroom after a short afternoon break during his trial in the Duval County Courthouse in Jacksonville, Fla. on Sept. 27, 2014.
Defendant Michael Dunn walks back into the courtroom after a short afternoon break during his trial in the Duval County Courthouse in Jacksonville, Fla. on Sept. 27, 2014. Bob Mack—AP

Dunn was already likely to spend the rest of his life in prison after being convicted of attempted murder, but could now be sentenced to life without parole

A Florida man was convicted of first-degree murder Wednesday in the 2012 death of 17-year-old Jordan Davis, who the man shot and killed following an argument over loud music.

Michael Dunn, 47, had previously been found guilty on four counts in Davis’ murder, including attempted second-degree murder, during his trial this past February. His original jury, however, was unable to come to a decision on the first-degree-murder charge. The Florida jury finally reached a verdict of guilty after several hours of deliberations Wednesday following a retrial.

Dunn, who could now face life in prison, showed no emotion when his verdict was read, according to local news reports.

During his trials, Dunn argued he shot Davis out of self-defense, claiming he saw the teen flash a weapon before opening fire. CNN reports detectives did not find a weapon matching Dunn’s description on Davis’ body or in his car.

[CNN]

TIME justice

Oklahoma Changes Lethal Injection Protocol, But Keeps Controversial Drug

After an execution widely regarded as botched

The United States’ three executions this year widely considered botched all have at least one thing in common: they’ve all included the use of midazolam, a sedative previously unused in lethal injections.

In January, Ohio executed Dennis McGuire in a 25-minute lethal injection using a two-drug combination of midazolam and hydromorphone. In April, Oklahoma executed Clayton Lockett using midazolam as the first of three drugs in a process that took almost 45 minutes. And in July, Arizona used the same protocol as Ohio to execute Joseph Wood, another lethal injection that took close to two hours.

Late Tuesday, Oklahoma announced new lethal injection procedures requiring more training for executioners and contingency plans if any problems arise. The new protocol also reduces the number of media witnesses from 12 to five. On top of that, it provides the state with four different lethal injection drug combination options, two of which still involve midazolam in a dosage that is five times larger than what was used in Lockett’s execution.

The Oklahoma Department of Corrections released the new guidelines this week without comment. But the move appears to be a way for the state to continue executions while opening the door for more desirable and, possibly, effective drugs that have become difficult to obtain.

“I think this represents a tension between the drugs they would prefer to use and what’s available,” says Richard Dieter, executive director of the Death Penalty Information Center, an anti-capital punishment organization.

In April, Gov. Mary Fallin ordered an investigation into Lockett’s execution, which led to a report released in September by the Department of Public Safety that found that an IV line into Lockett’s groin had become dislodged and wasn’t immediately discovered. The agency made several recommendations for future executions, and the state’s department of corrections pledged to carry out most of them.

“This is in keeping with their position that the botched execution of Lockett was not due to the drugs used, but to the misplacement of the IV,” Dieter says. “To abandon midazolam might contradict this, and possibly leave them with no drugs to carry out the execution.”

Since pharmaceutical companies began denying states drugs like pentobarbital, a sedative that was widely used up until just a few years ago, midazolam has been easier for prison systems to get. And some states may fear that without it, they may not be able to carry out executions at all.

“I think states like Oklahoma are continuing to use midazolam because so far they can and they don’t know what else to do,” says Deborah Denno, a Fordham University professor who studies lethal injection.

TIME 2014 Election

Court Blocks Parts of North Carolina Voting Law

North Carolina's law has been fiercely criticized by voting rights advocates

Updated at 10:05 a.m., Oct. 2

A federal appeals court on Wednesday blocked parts of a sweeping North Carolina voting law from taking hold ahead of this year’s midterm elections.

The Fourth Circuit Court of Appeals reversed a lower court’s decision to allow provisions of the law that eliminate same-day-registration and the casting of out-of-precinct ballots. The appeals court on Wednesday still allowed other portions of the law to stand, including the cut of seven early voting days. But in a 69-page opinion Wednesday, the appeals court said an August decision by the lower district court to allow the full law was flawed.

The decision comes just weeks before the early voting period is set to begin in the Tar Heel State on Oct. 23. “The right to vote is fundamental,” Judge James Wynn wrote in the majority opinion. “And a tight timeframe before an election does not diminish that right.”

North Carolina Governor Pat McCrory issued a statement Wednesday saying though he was pleased most of the law will apply in November, the state plans to appeal to the U.S. Supreme Court. North Carolina’s law has been one of the most criticized by voting rights advocates since the Supreme Court ruled that parts of the landmark Voting Rights Act are unconstitutional, which opened the door for states to enact more voting restrictions.

TIME Tracy Morgan

Tracy Morgan Hits Back at Walmart

Tired Truck Drivers
In this image from video the limousine bus carrying Tracy Morgan and six other people lies on it's side early Saturday morning, June 7, 2014, on the New Jersey Turnpike. Will Vaultz—AP

"I can't believe Walmart is blaming me for an accident that they caused"

Comedian Tracy Morgan fired back at Walmart Tuesday after the retail giant suggested the 30 Rock star was responsible for injuries sustained in a serious accident with one of its trucks, because he hadn’t worn a seatbelt.

“After I heard what Walmart said in court I felt I had to speak out,” Morgan said in a statement Tuesday bthrough his spokesperson Lewis Ka. “I can’t believe Walmart is blaming me for an accident that they caused. My friends and I were doing nothing wrong. I want to thank my fans for sticking with me during this difficult time. I love you all. I’m fighting hard every day to get back.”

In a court filing Monday, Walmart claimed that the injuries sustained by Morgan and other survivors of the wreck were “caused, in whole or in part, by plaintiffs’ failure to properly wear an appropriate available seat belt restraint device.”

Morgan sued Walmart after a truck driver for the big box retailer struck the back of his limo in June. Morgan was badly injured in the collision, as were three other survivors. Comedian James “Jimmy Mack” McNair was killed.

TIME justice

Meet the Prison Bankers Who Profit From the Inmates

Pat Taylor
Pat Taylor holding a picture of her son, Eddie, who is serving 20-year prison sentence at Bland Correctional Center in Virginia. Eleanor Bell—Center for Public Integrity

With the ultimate captive markets, prison bankers and state jailers make money off high fees for financial services.

This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.

Pat Taylor doesn’t believe in going into debt. She keeps her bills in a freezer bag under her bed, next to old photo albums, and believes in paying them on time religiously. For Taylor, living within your means is part of being a good Christian.

Lately, Taylor, 64, has felt torn between that commitment and her desire to be a loving, supportive mother for her son Eddie.

Eddie, 38, is serving 20-year prison sentence at Bland Correctional Center for armed robbery. He’s doing his time at a medium-security Virginia state prison located 137 miles northwest of Johnson City, across the dips and valleys of the Blue Ridge Mountains here in the heart of Appalachia. The cost of supporting and visiting Eddie keeps going up, so Pat makes trade-offs.

“I would send him money even if it broke me, because I do go without paying some bills sometimes to go see him,” Pat says.

Between gas to make the trip and overpriced sandwiches from the prison vending machine, visiting Bland costs about $50, a strain on her housekeeper’s wages. So she alternates, visiting Eddie one week and sending him money the next.

To get cash to her son, Pat used to purchase a money order at the post office for $1.25 and mail it to the prison, for a total cost of less than $2. But in March of last year, the Virginia Department of Corrections informed her that JPay Inc., a private company in Florida, would begin handling all deposits into inmates’ accounts.

Sending a money order through JPay takes too long, so Taylor started using her debit card to get him funds instead. To send Eddie $50, Taylor must pay $6.95 to JPay. Depending on how much she can afford to send, the fee can be as high as 35 percent. In other states, JPay’s fees approach 45 percent.

After the fee, the state takes out another 15 percent of her money for court fees and a mandatory savings account, which Eddie will receive upon his release in 2021, minus the interest, which goes to the Department of Corrections.

Eddie needs money to pay for basic needs like toothpaste, visits to the doctor and winter clothes. In some states families of inmates pay for toilet paper, electricity, even room and board, as governments increasingly shift the costs of imprisonment from taxpayers to the families of inmates.

“To give him $50, I have to send $70 off my card,” says Taylor, who moved to a smaller apartment on the outskirts of Johnson City in part because of the rising cost of supporting Eddie.

“They’re punishing the families, not the inmates.”

Price of prison

JPay and other prison bankers collect tens of millions of dollars every year from inmates’ families in fees for basic financial services. To make payments, some forego medical care, skip utility bills and limit contact with their imprisoned relatives, the Center for Public Integrity found in a six-month investigation.

Inmates earn as little as 12 cents per hour in many places, wages that have not increased for decades. The prices they pay for goods to meet their basic needs continue to increase.

By erecting a virtual tollbooth at the prison gate, JPay has become a critical financial conduit for an opaque constellation of vendors that profit from millions of poor families with incarcerated loved ones.

JPay streamlines the flow of cash into prisons, making it easier for corrections agencies to take a cut. Prisons do so directly, by deducting fees and charges before the money hits an inmate’s account. They also allow phone and commissary vendors to charge marked-up prices, then collect a share of the profits generated by these contractors.

Taken together, the costs imposed by JPay, phone companies, prison store operators and corrections agencies make it far more difficult for poor families to escape poverty so long as they have a loved one in the system.

Shifting costs to families

“It’s not just the money transfer that’s the problem, it’s the system it enables to shift costs onto families,” says Lee Petro, an attorney who helped litigate for a national cap on some prison phone rates. Without companies like JPay, he says, “it would be much harder to take money from families and make families of inmates pay their own keep.”

In 12 years, JPay says it has grown to provide money transfers to more than 1.7 million offenders in 32 states, or nearly 70 percent of the inmates in U.S. prisons.

For the families of nearly 40 percent of those prisoners, JPay is the only way to send money to a loved one. Others can choose between JPay and a handful of smaller companies, most of them created by phone and commissary vendors to compete with the industry leader. Western Union also serves some prisons.

JPay handled nearly 7 million transactions in 2013, generating well over $50 million in revenue. It expects to transfer more than $1 billion this year. (The company declined to provide any financial details; those included in this article are culled from public records and interviews with current and former employees.)

Ryan Shapiro
JPay CEO Ryan Shapiro in his office north of Miami, Florida. Eleanor Bell—Center for Public Integrity

“We invented this business,” said Ryan Shapiro, 37, the company’s founder and CEO, in a phone interview in June. “Everyone else tries to imitate what we did, and they don’t do it as well.”

Shapiro says working with corrections includes extra costs for security and software integration. He says he charges only as much as he must to maintain a razor-thin profit margin.

But others provide similar services for less.

NIC Inc., a competitor that helps states set up their websites, charges a flat fee of $2.40 in Maine to send money to inmates. Until recently, Arkansas charged 5 percent to send money through the state’s own Web portal. Floridians pay a fee of 3.5 percent to handle traffic tickets online.

Despite its kudzu-like growth, JPay so far has avoided scrutiny by consumer regulators.

In response to questions for this story, however, the New York Department of Financial Services’ consumer division is reviewing the company’s practices, according to a person familiar with the matter. The person spoke on condition of anonymity because he is not allowed to discuss active investigations.

JPay’s rapid rise stems in part from the generous deal it offers many prison systems. They pay nothing to have JPay take over handling financial transfers. And for every payment it accepts in these states — prisoners typically receive about one per month — the company sends between 50 cents and $2.50 back to the prison operator. These profit-sharing arrangements, which vendors offer as deal-sweeteners in contract negotiations, are known in the industry as “commissions.”

JPay’s payments to Illinois last year came to about $4,000 a month, according to documents obtained under the state’s open records law.

Jails often deduct intake fees, medical co-pays or the cost of basic toiletries first, leaving the account with a negative balance. This prevents inmates from buying “optional” supplies like stationery or sturdier shoes until they have paid down the debt.

Such charges levied by jails for common items are not new. The practice began prior to the rise of JPay, mainly with phone companies and operators of prison stores. But by automating the process, prison bankers make it a lot easier.

$100 underwear

Negative account balances discourage cash-strapped people from helping relatives, says Linda Dolan, 58, a manager for a defense contractor in California. Last year, when her son was sentenced to 20 days in jail in St. Lucie County, Florida, for reckless driving, Linda wanted to buy him a second pair of underwear and socks. But the county’s intake fee and daily “rent” already had put the account about $70 in the red. Linda and her husband both were out of work and couldn’t afford to pay $100 for a pair of underwear.

“If relatives are putting money on somebody’s books while they’re an inmate, it’s to help them buy necessities,” Linda says. “I didn’t think it was right that the county was stealing the money.”

Capt. William Lawhorn of the St. Lucie County sheriff’s office said that inmates are charged a $25 initial booking fee, $3 a day for “subsistence” and medical co-pays, all of which can result in a negative balance. He said nobody is denied any type of needed service or care, and when inmates do have money, it’s used for candy and other junk food. Inmates in the county receive payments through Touchpay, a JPay competitor that often partners with foodservice giant Aramark.

Funding prisons out of the pockets of families and inmates has non-financial costs too, says Brian Nelson, who spent 28 years in an Illinois state prison for murder. Nelson says he has “become an asset to society” since he was released four years ago because he stayed in touch with family and priests even when he was in solitary confinement. When inmates can’t afford to maintain contact with the outside world, he says, they are less equipped to transition smoothly to civilian life.

The effect on poor families is especially harsh, Nelson says: “It’s a wife that has three children at home, and her husband is in jail, so now she has a choice: Do I send money to him so he can afford to stay in touch with the kids, or do I feed the kids?”

Inmates’ need for money is inescapable, Nelson says. Those in northern Illinois are not issued cold-weather clothes, he says, leaving them vulnerable to frostbite unless they can get money to pay for prison-approved long underwear and boots.

Razor thin margins

JPay founder Shapiro is eager to tell his company’s story and how he believes it helps families. It’s not just about faster payments. Once an inmate gains access to the money, JPay offers several ways to spend it, including pay-per-page e-messaging, music downloads and MP3 players. When inmates in some states are released, they receive their remaining money on JPay-branded payment cards that carry higher fees than those on most consumer payment cards.

Shapiro says that if his fees were any lower, his company would lose money. He declined to make the company’s financial details available and would not say how much he is paid.

Shapiro serves on the board of a foundation that advocates for inmates and carries full-page ads for JPay in its newsletters. The foundation received an $85,400 gift directly from JPay’s corporate treasury in 2009.

He lives on a tiny harbor island near the northern tip of Miami Beach in a home he bought for about a million dollars. Last year, through a company he controls called El Caballero LLC., Shapiro bought a custom powerboat, dubbed Sea Block, that retails for a half-million dollars.

Heading to the company’s headquarters one July morning, he stopped first for CrossFit, a military-style training regime that he enjoys because it brings out his competitive side, then for daily prayer.

Families who use JPay love the company, he says. He boasts of its well-trafficked Web forum and of the 174,000 “likes” on its Facebook page, where its marketers post cheery articles about incarceration. “The Jail Cats program at Gwinnett County Detention Center in Georgia is rescuing kittens and helping to rehabilitate incarcerated women,”one recent post read.

“We go out of our way to make sure that they feel comfortable — that, you know, you’re spending money with a company that cares about you,” Shapiro says.

If people don’t want to pay his fees, Shapiro says, they can always mail a money order, except in the “couple of states” that now charge fees for them.

Nearly 400,000 people are imprisoned in states where there is no free deposit option, a fact Shapiro was unaware of during a series of interviews this summer.

“When it’s up to us, it’s absolutely free,” he says.

Slow-moving money orders

For the first 14 years of Eddie’s sentence, Pat Taylor mailed money orders directly to the prison at no charge beyond the cost of the money order and a stamp. Then last year, she was instructed to make the money order out to JPay and send it to a Florida post office box. The company would credit it to Eddie’s account.

Under the new system, she says, it would take weeks for Eddie to see funds sent via money order. So Pat, like nearly everyone else she knows, gave in and began paying $6.95 to send the money from her debit card.

Across the country, delays and other obstacles make the “free option” inaccessible to many families, the Center found. More than a dozen families in five different states said that money orders have been credited much more slowly since JPay took over.

Shapiro says he is “absolutely shocked” by the complaints that money orders are delayed because he had never heard of such problems before. Most money orders are processed within two to three days, he said, unless the person sending money fails to fill out the form properly. He said Virginia is especially efficient and processes money orders within 24 to 48 hours.

“We are not slowing it down, there is no conspiracy,” he said.

He said JPay does “want people to convert from a money order customer to a digital customer, absolutely,” but only because electronic payments are more efficient. “We’re not trying to make an extra dollar everywhere we can,” Shapiro said.

Before JPay, Virginia prisons credited money orders to inmates’ accounts in roughly three days, families say. Today, money orders can take more than a month to reach an inmate’s account, Marvin Rodriguez-Barrera, an inmate at Virginia’s high-security Red Onion State Prison, wrote in a letter to prisoners’ rights advocates in February.

Faster to Guatemala

“I am from Central America, and it is cheaper for my family, and easier, to send money to Guatemala than for my family to send me money from this very state!” Rodriguez-Barrera wrote. “The old way of using money orders was cheaper, easier and in many instances faster.”

Those seeking to avoid the fees by sending a money order must print and fill out a JPay-provided form whose instructions are dwarfed by large print barking at them to “Put down your pen! Put away your car keys!” because “There’s a faster way to send money, go to JPay.com and sign up now!”

The aggressive marketing has worked. One former marketing director for the company lists as a key accomplishment on his LinkedIn profile that he “Converted 78 percent” of money order users to online users, boosting the company’s annual revenue by $985,000.

Shapiro said the information in the profile, including the former employee’s title, was inaccurate. He said he didn’t have data on how many money order users convert to electronic payments or how much revenue the company gains when they make the switch.

Inside JPay’s secure, fishbowl-like money order processing room, reams of envelopes sit in postal bins on the shelves. Signs around the room remind the handful of workers employed there which states allow them to deduct a fee and which offer the service for free.

In Pennsylvania, the first state where JPay accepted money orders by mail, executives were surprised to see the number of money orders plunge by two-thirds in the first two months, Chief Financial Officer Mark Silverman explained in a brief interview.

Shapiro said that Missouri used to process 30,000 money orders a month before JPay came in.

“With JPay, we drove that down to only 1,000 people sending money,” he says. “And that’s by choice.”

JPay’s marketing materials urge customers to choose the higher-cost option. During her twice-monthly visits to Bland, an isolated work camp nestled between rolling, green hills, Pat Taylor now sees JPay-branded fliers warning of the misery awaiting anyone who tries to use the “free option.”

On one side, a multi-ethnic lineup of models bury their faces in their hands and complain of what a “nightmare” it was to complete the money order, how it got lost or delayed.

“There’s a better way,” the flier promises on the reverse side, which depicts an attractive young woman seated with her laptop computer. For “Faster, Easier, Next-Day Delivery,” families can choose from a menu of high-fee options.

Tequila, cigars and lobbying

To impress state corrections officials and gain their business, JPay spends heavily on industry conventions attended by agency heads with contracting authority. During a 2012 convention of the American Correctional Association, the company threw what it called an “END OF THE WORLD PARTY” at a Denver wine bar that bills itself as “about you, and your inalienable right to the unbridled enjoyment of food and wine.”

The invitation, printed on a disposable beer coaster, promised “a bash, JPay-style: *fuerte* tequila, hand-rolled cigars, a live mariachi band.” Conventioneers could catch a JPay shuttle leaving from the hotel “ALL NIGHT LONG,” it said.

For years, JPay has sponsored an award for former state corrections directors presented by the Association of State Correctional Administrators, paying for the recipient’s trip and a Wexford crystal bowl inscribed with the honoree’s name.

JPay’s outreach extends to state legislatures as well, even though many of the company’s contracts forbid it from using fee revenue to lobby. The company has hired registered lobbyists in at least seven states. Shapiro says JPay’s lawyers approved the use of company funds for that purpose.

In Ohio, it tapped Thomas Needles, a former aide to President George H. W. Bush. Needles gives generously to Republican candidates and also lobbies for for-profit universities. In Maryland, JPay hired Bruce Bereano, one of the state’s best-paid lobbyists, who was disbarred after a 1994 conviction for overbilling his clients and using the money for campaign donations.

The company also sought to lobby Washington for access to the federal Bureau of Prisons’ 216,000 inmates — what Shapiro has called “the mother ship of all contracts,” which is now held by Bank of America.

It spent $20,000 in 2012 to hire Park Strategies, run by former U.S. Sen. Alfonse D’Amato of New York, in an effort to obtain the contract. That effort was not successful.

More inmates, smaller budgets

JPay was founded in 2002, just as the U.S. prison population neared the apex of a three-decade climb that more than quadrupled the number of inmates in state prisons. Shortly thereafter, as the economy went into recession, state budgets were squeezed and officials looked more aggressively for ways to cut spending on prisons.

Already, private vendors had stepped in with a solution: They would charge prisoners sky-high prices for phone services, snack foods, hygiene products and clothing, then return a large cut back to the prisons — often 40 percent or more.

Shapiro was the first entrepreneur to see how financial services might provide another stream of revenue. For a fee, he offered to deliver cash in ways that saved time and effort for corrections agencies, and often to give them a portion of the proceeds, just as the phone and commissary companies were doing.

“When we started, the states were very much saying to us, ‘There’s no need for procurement here because there’s no one else doing what you do,’ ” Shapiro said in a 2012 interview. Ten years later, he said, all of them were asking companies to submit bids for the work.

That doesn’t mean the door is open to competitors. Most states, including Virginia, now contract with JPay or its main competitor under a master agreement negotiated by Nevada in 2011 on behalf of a multi-state consortium. Participating states can simply sign on to the deal with one or both of the companies without the hassle of separately determining the best company for the job.

JPay is protected from other market forces, as well. When states offer its music players and tablet computers for sale to inmates, they often confiscate radios that people already own, according to inmates in Ohio. This leaves inmates dependent on JPay’s music downloads, which can cost 30 to 50 percent more than the same songs on iTunes, inmates say.

The profit-sharing arrangements are at the core of JPay’s origin story, Shapiro said in 2012. A couple of years out of college, he spent months driving around upstate New York, pitching JPay to “every sheriff, whether they had five inmates or 100 inmates” — without success.

Then someone in Passaic County, New Jersey, suggested that they offer the county 10 percent of their revenue, “so the jail would be less of a tax burden on the community.” The warden signed up on the spot.

Critics including Alex Friedmann, associate director of the Human Rights Defense Center, an inmates’ advocacy group, says the profit-sharing amounts to a legal kickback. “They charge exhorbitant fees then kick back a percentage of their revenue. … The company doesn’t need that for profit,” Friedmann said.

Shapiro says he prefers the term “commission” because “the word kickback has a negative connotation, and it seems like some person is making that money and pocketing it and buying a Chevrolet or something, when in fact it’s going to use for the benefit of inmates — basketball hoops, volleyball, whatever.”

Most states put their share of the cash in an “Inmate Welfare Fund” that is supposed to be used for inmate benefits beyond what is guaranteed to them by law. As incarceration rates climbed, however, the definition of “inmate benefit” drifted, says Justin Jones, who was director of the Oklahoma Department of Corrections until last year.

“The Legislature allowed us to broaden the definition of inmate welfare and it got to the point, almost anything they would fund through appropriations could now be paid for as inmate welfare,” he says. “It ended up where we started using that money if an inmate went out to medical on an emergency and medical was end-of-year short,” he says. “We bought air conditioners, ice machines, X-ray machines.”

Jones was not a fan of the system. If legislatures want to impose longer prison sentences or “if they create new crimes, then the legislature should appropriate dollars for that,” he says. “I should not have to go in and redefine and stretch the definition of inmate welfare accounts.”

Double dipping

Taken together, JPay and other prison vendors create a system in which families are paying to send the money, and inmates are paying again to spend it, says Keith Miller, who is serving 21 ½ years at Bland for a series of drug-related, violent crimes committed in his early 20s. The earliest he may be released is 2021, when his mother will be 87 years old.

“The fact that [my mother] has to pay the fees to send the money and then the fact that [prison agencies] make a certain cut off it seems to me that [the prisons are] double-dipping into the money they’re sending,” he said in an interview at the prison. “It really doesn’t make sense to me that this should be allowed.”

Shapiro is skeptical that JPay’s fees make much of a difference for inmates’ families. He says companies that provide other services to inmates, such as phones and commissary, are the real problem.

“Compared to the commissary or phone revenue, we’re just a drop in the bucket,” he says.

That may be changing.

Last year, the Federal Communications Commission dusted off a 12-year-old petition filed by inmates’ families who argued that prison phone rates were unfairly high, preventing them from maintaining contact with loved ones. The commission capped rates for many calls under its authority to ensure that pay-phone rates are just, fair and reasonable.

Mignon Clyburn, who was acting chairwoman of the FCC when it passed the rate cap and now serves as one of three commissioners, says the action was necessary because people are “making unspeakable sacrifices to stay in touch with their loved ones.”

Vincent Townsend, president of Pay-Tel Communications, a major provider of phones for inmates, said his industry “abused the public.”

‘Ethical, right, moral’

Other prison vendors “better pay attention to what’s ethical, right, moral,” he said. “Because if you don’t then some regulator’s going to step in, and you’re going to have to deal with it.”

There is a crucial difference: The telephone industry is closely regulated by the FCC, which has explicit authority to set rates for pay-phone calls. Financial and consumer protection regulators have less power over pricing.

The Consumer Financial Protection Bureau can sue companies for offering unfair, deceptive or abusive financial services. The bureau declined more than a dozen requests to discuss specific issues related to prison financial services.

The Federal Trade Commission, which has consumer-protection authority and the power to ensure that markets are competitive, declined to comment “on specific companies or conduct.”

Regulators in seven states have levied fines totaling $408,500 against JPay for operating without a license. The actions were not designed to disrupt its business, according to the Conference of State Bank Supervisors, a trade group that represents these regulators in Washington.

“State banking regulators are concerned with ensuring that businesses operating in their states are properly licensed and with enforcing applicable laws (including consumer protection laws),” the group’s spokeswoman said in an emailed statement.

‘Invent a better way’

Shapiro says he understands the challenges faced by poor families of inmates since JPay’s startup days, when he would spend “hours on the phone with a grandmother, talking about her day at Wal-Mart.”

He says he feels trapped by the structure of the industry he has come to dominate. He wishes the fees were lower, that states didn’t force him to charge more and give them a share and that he could “invent a better way” than asking people’s families to help pay for their imprisonment.

Yet Shapiro says he is satisfied to compete within what he admits is a broken system, even if the system may be punishing some innocent family members.

For many families, JPay has become that system. When Jewel Miller, 80, phoned JPay’s call center last month to ask why her payments are delayed, and why she must submit the same form every time she sends a money order to Keith, the operator hung up on her.

In a series of interviews it became clear that Shapiro was unaware of some of the fees related to his business. He said he did not know, for example, that Florida now charges its own fee for money order deposits after JPay processes the payments.

These fees are spelled out in JPay’s contracts with states, which Shapiro signed. Florida’s says it will charge a 50 cent “Money Order by Mail” fee.

As of July, Shapiro was unaware of JPay’s own $1.95 fee to deposit money orders in Indiana, declaring, “If someone sends $100 with a money order to an Indiana inmate, that inmate gets $100. … I am positive.”

Two days later, he called back to say, “We’re working with the states right now to get some of those fees taken off.”

So far, the fees remain in place.

Eleanor Bell contributed to this story.

Watch the accompanying web documentary “Time is Money” here

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