Scrap metal thefts rise despite steep penalties for theft: Best deterrent is business regulation

For years, Grits has blasted the legislative impulse to increase criminal penalties as the solution to every purported problem, and one of the best examples of how that strategy often fails to achieve its goals may be found in the case of scrap metal thefts. In 2007, the Texas Legislature made theft of any quantity of copper, aluminum or bronze a state jail felony. Counterintuitively, though, soon thereafter metal thefts skyrocketed with the rise of copper and other commodity prices. Many such thieves are homeless people who may risk their lives to steal a few pounds of copper, and as soon as one is arrested, someone else sprouts up to take their place.

By contrast, Grits has maintained that crime prevention efforts would get much more bang for the buck by going after scrap metal vendors instead of boosting penalties only on those who sell to them. In Austin last week, KVUE reports that police finally sought to address that portion of the equation, which is a far more manageable task. There are hundreds of potential copper thieves in the city (it's often a crime of opportunity), but only nine vendors in Austin who buy wholesale copper, reports the TV station. And when APD brought them scrap metal that should have raised red flags, none of them passed the test:

For the first time, APD officers began going undercover this spring, trying to resell copper to local metal recycling businesses.

It wasn’t just any copper officers showed up with. Officers presented busses, heavy copper plates used solely on cell phone towers.  The busses along with telephone cable wiring were featured in photographs in fliers sent out to every local metal recycling business almost a month before the special sting operation.

When undercover officers went out, they were surprised when seven out of the nine metal recycling businesses they visited in Austin actually bought the same type of copper that police warned them could be stolen.

“My goal is not to cause problems for the metal shops or pawn shops to cost them more money to do the things that we need, but when these guys see everyday how many victims we have, I've got no choice,” added Sgt. Socha.

Seven of the businesses were fined for non-compliance. Two other businesses received tickets for not informing police about the potentially stolen copper, which is now a requirement under a new city ordinance.

So of the nine businesses, seven were fined and two were given Class C tickets under a new city ordinance. But consider: Any average person bringing in a penny's worth of stolen scrap copper for recycling would be guilty of a state jail felony. So one party in the transaction is a felon, under Texas law, while their partner in the exchange faces virtually no liability at all. That inequity assures scrap thefts will continue.

Boosting penalties for the poorest among us - and most copper thieves are a pretty sad and marginal lot - won't solve this problem because market forces are more powerful than criminal laws when it comes to influencing human behavior. As long as buyers exist for stolen scrap metal and copper prices are high, state-jail felony prosecutions of sellers won't be a great deterrent. By contrast, there are only a handful of scap metal purchasers in any given city, and these type of undercover stings are the best way to reduce the practice.

That said, it's remarkable that nobody in Austin was charged with anything higher than a Class C misdemeanor, since theoretically anyone fencing stolen goods should be subject to more serious criminal penalties. On the prosecutors' user forum a few years back, prosecutor Ted Wilson described an undercover sting in Houston that secured more serious charges against the wholesalers:

Undercover police officers would go to scrap metal dealers posing as employees of an air conditioning company. They told the operators of several scrap metal places that they wanted to sell the coils from air conditioning units. But, they would ask if the dealer ever did business with the company that hey "purportedly" worked for. They didn't want someone from their company or thier boss to show up while they were trying to sell the coils. They made it clear that they were stealing the coils from their employer and wanted cash for the copper in the coils. All of this was recorded. They wouldn''t arrest anyone at that time but just sell them the coils. After they visited several places on more than one occasion each selling "stolen" coils to them the officers then met with me and I drafted search warrants of each location for documentation of the purchase of the items. Texas law requires that they document the purchases. In every purchase, the owners of the scrap metal dealership would fill out a receipt, as required by Texas law, but they put in phony names and dates, which we could substantiate from the taped recordings of the purchase.

On the day that they wanted to run the search warrants, we got a large spool with several thousands of dollars worth of copper. The officers would go to the first place, tell the people the spool was stolen, the owners would buy it anyway, and the officers would arrest them for felony theft based on the value of the large spool that they just "bought". Then they ran the search warrant at the location for the records and other documents that I put in the warrant.

Scrap dealers caught in the Houston sting would be eligible for much more serious criminal penalties for fencing stolen goods, while in Austin police openly declare their "goal is not to cause problems for the metal shops or pawn shops." What an unusual declaration: What other criminal actors can you imagine police saying they don't want to cause problems? And meanwhile, the dealers' partners in the transactions are routinely prosecuted to the fullest extent of the law. Enforcement fails in this case because law enforcement only targets one party in the transaction - the thieves themselves - but ignores malfeasance by a more privileged class of monied criminals for whom police don't want to cause trouble.

Scrap dealers are the key to stopping metal theft because they're easier to target and subject to regulation. If they refused to purchase stolen goods, thieves wouldn't have a market for their wares and thefts would soon stop. But then, why solve problems with the law when making it dysfunctional serves as a virtual full-employment act for police and prosecutors? There are a near infinite number of potential metal thieves compared to just a handful of dealers, so focusing enforcement exclusively on small-time street-level thefts - while giving their dealer-partners a wink and a slap on the wrist - ensures the problem will persist.

As is often the case with such specialized enhancements, business regulation, not criminal penalties, would be the most sensible way to reduce this problem. Dealers must keep logs of scrap metal sales and if regulators focused on vetting their customers in a more systematic fashion, those buying stolen goods could be easily detected. By contrast, this sting by Austin police is the first time the city has pursued the demand side of the equation after years of arresting their suppliers. It's so obviously the smarter approach, it amazes me that it's taken this long for Austin PD to pursue it.

See related Grits posts:

• Felony rap for stealing copper wire hasn't stopped thefts
• Copper theft: Case study in failed criminal penalty enhancements
• Penalty increases for scrap metal thieves a bust; better police tactics needed more than harsher penalties
• Messages promoting sentence enhancements may increase crime