Allen Stanford: DEA snitch?

Did the US government tolerate fraud, money laundering and white-collar crime by Houston billionaire Allen Stanford because he was a snitch for the DEA? Reports the Press Association today:

Stanford guaranteed himself against fraud investigations by working with the US DEA, turning over details of money-laundering from Latin American clients from Colombia, Mexico and Venezuela and Ecuador, the corporation claims.

"We were convinced that Stanford's bank attracted millions of narco-dollars, but it was very difficult to get the evidence to nail him," sources apparently told Panorama.

"The word is that Stanford has been a confidential informer for the DEA since 99."

This is exactly the kind of scenario criticized by Prof. Alexandra Natapoff, arguably the nation's leading academic expert on the uses and abuses of confidential informants, who maintains that snitch agreements can actually produce and tolerate crime instead of preventing it. As she wrote in 2006 in the San Francisco Chronicle ("California reconsiders snitching," Nov. 19, 2006):

Unlike the law-abiding citizen who calls 911 to report a crime or who testifies at trial, criminal informants face prosecution for their own crimes, and thus have deep incentives to lie. If a snitch can convince the police officer or the prosecutor that his information is useful, he may avoid arrest, avoid the filing of serious charges or obtain a reduced sentence.

Snitches may also receive cash, drugs, permission to buy drugs, forgiveness for prior crimes and lenience for new crimes, even those committed in other jurisdictions. In return, law enforcement agents obtain information and convenience: They avoid having to expend time and resources prosecuting the snitch.

These secret deals between the government and criminals can last for years, and they can be very costly to the public welfare.

In the worse cases, informants continue to commit new crimes, while government handlers may turn a blind eye as long as the informant is useful.

This makes snitching a kind of "get-out-of-jail-free" card.

That's apparently what may have happened in the Stanford case. In retrospect, though, the crimes the feds tolerated arguably dwarfed any offenders who Stanford's information helped finger.

Related Grits posts:

• Natapoff: Snitching can be "crime producing and corrupting"
  
• Snitch rules protect lying DEA agent
  
• Congress should restrict criminal informant use to prevent false convictions, police corruption
• Snitch whose crimes were tolerated by feds will be extradited to Mexico
  
• DEA snitch data lost
  

Innocence Project of Texas faces Madoff-spawned budget shortfall

This one hits pretty close to home:

The Innocence Project of Texas faces potential economic oblivion later this year after a foundation whose funds made up the bulk of its income closed its doors due to an infamous Wall Street scandal. In a column in yesterday's Fort Worth Star Telegram, Cory Session, the youngest brother of the late Timothy Cole (who was exonerated posthumously this spring), writes:

The Innocence Project of Texas fights daily for its survival.

Bernie Madoff’s Ponzi scheme robbed the nonprofit of its funding. It will cease to exist after July, unless there is "manna from heaven." The project is operating on fumes and the credit card of one of its volunteers to seek justice for the incarcerated innocent.

On the floor at the Innocence Project office sit boxes of files. Most will never be investigated because there’s no money.

Luckily, [Timothy] Cole’s file was investigated — only it was eight years after he died in prison. The volunteers at the project promised Tim’s mother that they would still seek justice for her son. Their promise resulted in the first posthumous DNA exoneration in Texas.

Often, I have read about millions of dollars being donated to support the arts, which are a vital part of our culture, but I can’t help but wonder why those who "have" are not willing to do the same for the innocent.

The Innocence Project of Texas has a proven track record of numerous exonerations.

Tim Cole will never get to enjoy the arts.

I've been working since last year as the Policy Director for the Innocence Project of Texas, so obviously this unhappy possibility of the group's closure means a great deal to me personally, but so does the potential loss of an organization that's been an important change agent in Texas over the last couple of years.

If you've been following Texas' DNA exonerations on this blog or elsewhere and believe the work of the Innocence Project of Texas is important and needs to continue, I hope you'll consider making a donation to the group, as Kathy and I just did, in Timothy Cole's memory. And thanks, Cory, for your kind words and the helpful plug for the group.

What law enforcement money was included in final stimulus plan?

Well, despite my most sincere urgings, Congress included a boost to the federal Byrne grant program in its just passed stimulus package. A friend from the prosecutors' camp forwarded the list which included a surprising twist - adding "national, regional, and local non-profit organizations" to the list of eligible grantees for $225 million in competitive grants:

Below (and attached) are the summary of the final compromise bill released last night:

o $2 billion for the Byrne JAG formula grant program;

o $225 million for Byrne competitive grants (see purposes below);

o $225 million for Violence Against Women programs, of which $175 million is for the STOP grants and $50 million is for the transitional housing assistance grants program;

o $1 billion for the COPS Office for the hiring and rehiring of additional career law enforcement officers and civilian public safety personnel. The bill waives the 25% local match and the $75,000 per officer cap;

o $40 million for competitive grants to provide assistance and equipment to local law enforcement along the Southern border and in High-Intensity Drug Trafficking Areas to combat criminal narcotics activity stemming from the Southern border, of which $10 million shall be for ATF’s Project Gunrunner;

o $225 million for Indian Country grants (see text below);

o $100 million to be distributed by the Office for Victims of Crime (see text below);

o $125 million for assistance to law enforcement in rural areas (see text below); and

o $50 million for Internet Crimes Against Children initiatives.

Other provisions:

o $2 million for DOJ’s Inspector General’s office (to track the use of the dollars);

o $10 million for management and administration and oversight of programs within the Office on Violence Against Women, the Office of Justice Programs, and the COPS office. No administrative overhead costs shall be deducted by DOJ from these programs;

o DOJ will be required to submit a spend plan to the Hill within 60 days of enactment;

o The conference report text on the Byrne Competitive Grants is as follows: “for competitive, peer-reviewed grants to units of State, local, and tribal government, and to national, regional, and local non-profit organizations to prevent crime, improve the administration of justice, provide services to victims of crime, support critical nurturing and mentoring of at-risk children and youth, and for other similar activities;”

o The report text on the rural law enforcement section reads as follows: “to combat the persistent problems of drug-related crime in rural America. Funds will be available on a competitive basis for drug enforcement and other law enforcement activities in rural states and rural areas, including for the hiring of police officers and for community drug prevention and treatment programs;”

o The report text on the victims’ compensation section reads as follows: “to support State compensation and assistance programs for victims and survivors of domestic violence, sexual assault, child abuse, drunk driving, homicide, and other Federal and state crimes;” and,

o The report text on the tribal assistance reads as follows: “to assist American Indian and Alaska Native tribes, to be distributed under the guidelines set forth by the Correctional Facilities on Tribal Lands program. The Department is directed to coordinate with the Bureau of Indian Affairs, and to consider the following in the grant approval process: (1) the detention bed space needs of an applicant tribe; and (2) the violent crime statistics of the tribe.”

The bill and report text (explanatory statement) are up on the House Rules website: http://www.rules.house.gov/bills_details.aspx?NewsID=4149.

All of these funds are to be available until September 30, 2010. What, exactly, that means and how, exactly, that provision will be interpreted by the Hill and DOJ will become clearer in the next days and weeks.

So, sometime this year, Governor Perry will get a larger pot of Byrne grant money than in years past and he'll need to dispense it in a relatively short period of time. Even though the section on rural law enforcement specifically authorizes regional drug task forces, I hope Gov. Perry instead spends the money on new drug treatment and prevention programs simultaneously made eligible under the bill, which are needed in rural areas a lot more than some bastard reincarnation of the old, Tulia-style drug task forces.

States reducing inmate numbers to save money: Should Texas?

AP reports that states are beginning to look at sacred budget cows because of the fiscal crisis and may actually reduce inmate populations to stave off rising costs. ("States look to prisons to save money, including letting some inmates go," Jan. 10):

"Prior to this fiscal crisis, legislators could tinker around the edges — but we're now well past the tinkering stage," said Marc Mauer, executive director of the Sentencing Project, which advocates alternatives to incarceration.

"Many political leaders who weren't comfortable enough, politically, to do it before can now — under the guise of fiscal responsibility — implement programs and policies that would be win/win situations, saving money and improving corrections," Mauer said

In California, faced with a projected $42 billion deficit and prison overcrowding that has triggered a federal lawsuit, Gov. Arnold Schwarzenegger wants to eliminate parole for all offenders not convicted of violent or sex-related crimes, reducing the parole population by about 70,000. He also wants to divert more petty criminals to county jails and grant early release to more inmates — steps that could trim the prison population by 15,000 over the next 18 months.

In Kentucky, where the inmate population had been soaring, even some murderers and other violent offenders are benefiting from a temporary cost-saving program that has granted early release to nearly 2,000 inmates.

Virginia Gov. Tim Kaine is proposing early release of about 1,000 inmates. New York Gov. David Paterson wants early release for 1,600 inmates as well as an overhaul of the so-called Rockefeller Drug Laws that impose lengthy mandatory sentences on many nonviolent drug offenders.

"These laws have neither curbed drug use nor enhanced public safety," said Donna Lieberman of the New York Civil Liberties Union. "Instead, they have ruined thousands of lives and annually wasted millions of tax dollars in prison costs."

Policy-makers in Michigan, one of four states that spend more money on prisons than higher education, are awaiting a report later this month from the Council of State Governments' Justice Center on ways to trim fast-rising corrections costs, likely including sentencing and parole modifications.

"There's a new openness to taking a look," said state Sen. Alan Cropsey, a Republican who in the past has questioned some prison-reform proposals. "What we'll see are changes being made that will have a positive impact four, five, six years down the road."

Even before the recent financial meltdown, policy-makers in most states were wrestling with ways to contain corrections costs. The Pew Center's Public Safety Performance Project has projected that state and federal prison populations — under current policies — will grow by more than 190,000 by 2011, to about 1.7 million, at a cost to the states of $27.5 billion.

"Prisons are becoming less and less of a sacred cow," said Adam Gelb, the Pew project's director. "The budget crisis is giving leaders on both sides of the aisle political cover they need to tackle issues that would be too tough to tackle when budgets are flush."

This development is long overdue. I think most people are unaware of how rapidly prison spending has grown in the last few years. (See good data on the subject from the Council on State Government's Justice Center.) Texas finds itself in a relatively unique position among states, both because our economic base has been hit less hard by the national financial crisis and because the state had already begun significant reforms to stem overcrowding.

Not long ago, Texas' Legislative Budget Board estimated Texas would need 17,000 adult prison beds and at least three new medium security prisons by 2012. But probation revocations declined in most large counties (Bexar is the notable exception, but their probation director has other worries) thanks in part to $237 million in new probation grants aimed at implementing intermediate sanctions regimens and reducing probation officer caseloads.

So in many ways, thanks to truly visionary work by Sen. John Whitmire and Rep. Jerry Madden, Texas is a lot better off than other states struggling with high prison costs. Even so, the Department of Criminal Justice will ask the Legislature for a more than $1 billion increase in its biennial budget, including for pay hikes designed to stem high turnover and deter corruption among prison staff. That's $1 billion extra just to manage the same number of prisoners. This in part is because Texas' prison costs historically have been artificially low and we've reached the point where it's time for our politicians to pay the piper, having already relished the dance.

One suggestion I've not heard publicly would be to follow the lead of these other states and at least debate whether to reduce TDCJ inmate populations instead of spending $1 billion more to house the same number. After all, roughly two-thirds of TDCJ inmates are already parole eligible.

How many fewer inmates would TDCJ need, one wonders, to give officers raises, spend what they need to in order to keep prisons secure, and still operate under its current budget?

TDCJ operates about 112 units statewide, but some are much more expensive to operate than others. Though I've not seen it, at a committee hearing last year the legislature was given a list of the 20 most expensive TDCJ units in terms of per-inmate cost, and the differences were quite staggering. How many inmates would we be talking about to close the most expensive ones? It's worth asking the question.

In Dallas and Sugar Land, local development interests want the agency to close existing units. Talk so far has been about finding another spot for those units, but what if we just closed them (along with the most expensive facilities) and managed more low-level offenders in the community?

How could that be done? Shortening probation and parole lengths is part of it, since that reduces revocations and focuses more supervision resources on the most likely offenders. Schwarzenegger's proposal to eliminate parole is too radical, but reducing its length and making it easier for offenders to earn their way off supervision makes lots of sense from both fiscal and safety perspectives. On the front end, Texas' ten-year probation terms are among the longest in the nation, while most people who re-offend do so in the first 2-3 years (if not the first six months).

Another idea comes from State Rep. Harold Dutton, who filed a bill that would significantly depopulate state jails (like the one in the way of Dallas' Trinity development) within a two year stretch: HB 287 would reduce the penalty for possession of less than a gram of illegal drugs from a state jail felony to a Class A misdemeanor.

There are lots of other ways to skin that cat.

In other states these decisions are being forced down officials' throats because reduced tax revenues are pitting prison expenses directly against schools, health care, and other societal priorities. It looks like Texas may be buttressed temporarily from the harshest of those economic winds, however with oil prices declining, it's likely the gale will be blowing full force by the time the 82nd Legislature meets in 2011.

I'd rather see legislators pick and choose their policies thoughtfully based on economic and public safety priorities than get backed into a corner as has happened in California and now many other states. Perhaps the debate should start now about what it would take for TDCJ to live within its budget instead of only debating how much more to spend every time the Legislature is in town?

Tight budgets and corrections priorities

Federal budget numbers are always flabbergasting to me and I can only react with awe to the news that the 2009 federal deficit totaled $1.2 TRILLION, with a big, fat, capital "T."

Most state budgets including Texas, OTOH, must balance themselves or else request specific debt approval from voters in bond elections, so state budgets by far are hit harder when tax revenues level off or decline in tough times. The Houston Chronicle's April Castro had a good piece yesterday what Texas' state budget picture might look like ("Lawmakers await comptrollers revenue announcement," Jan.6), predicting a modest $2 billion surplus over the last biennium:

Texas will likely have to pay up to $2 billion for its share of costs from Hurricane Ike, rapid growth in Medicaid costs and enrollment, lower oil prices that might mean less income in the state's Rainy Day Fund, slowed consumer spending and lower-than-projected revenues from the state's new business tax in the fund intended to pay for public schools.

The Ike and Medicaid enrollment growth could cost together as much as $3.2 billion in the 2008-2009 budget before lawmakers even get started on the 2010-2011 budget, Lt. Gov. David Dewhurst and current House Speaker Tom Craddick have estimated.

The so-called surplus is made up of three parts:

_ $5.7 billion in the Rainy Day Fund from taxes that companies pay for producing oil and gas. That fund can only be tapped with the approval of a super-majority of the Legislature.

_ $3 billion set aside two years ago to give to schools to make up for property tax cuts.

_ $2 billion left over for lawmakers' discretionary spending.

Further exacerbating budget uncertainties, health care costs are rapidly rising and enrollment in entitlement programs is expected to grow with the economic slowdown.

Even with $3 billion stashed away for schools, a fund used to replace some school property tax money will fall at least $5 billion short of the $14 billion hole lawmakers created two years ago when they lowered school property tax rates by a third. That's mostly because revenues from the new business tax — revamped to replace some school property taxes in education funding — aren't as much as expected.

This year, it appears that money will be available without having to cut from other state spending. But it will take a bite out the state's economic growth that would have otherwise padded the surplus.

That's better than most states who're in the red, but a lot less to work with than had been suggested in previous official estimates. If these data are accurate they'll pit other areas of government against the criminal justice system, which faces some big ticket items on its plate, some of which are necessary to prevent even greater costs:

Increased pay for prison guards: Approximately $460 million to raise pay at TDCJ by 20%. The agency is currently around 3,000 guards short with high turnover rates and major problems at some units with guards making extra money on the side smuggling contraband. TDCJ shut down wings at two units (in Dalhart and Fort Stockton) last year in response to critical understaffing. For all exceptional items including the proposed pay hikes, TDCJ's legislative appropriations request (pdf) projects more than $1 billion in increased costs for the biennium just to keep inmate numbers at current levels.

Outpatient competency restoration: The Department of State Health Services last year funded five pilot programs aimed at providing outpatient competency restoration using "emergency" money given it by the Legislature in 2007. These pilots have been highly successful in reducing needless, costly state hospital commitments which often took up beds needed by regular, non-offender taxpayers with mental health needs.

While the Department of State Health Services' LAR (see page 53 of the pdf) contemplates keeping funding near current levels for these programs (actually cutting it slightly now that initial startup costs are complete), truly it's penny wise and pound foolish if these pilots aren't fully funded and expanded to every urban center. Such a move which would reduce pressure to build even more expensive state hospital beds - a likely outcome of pending litigation before DSHS rolled out this new initiative - and relieve pressure on county jails who must house the inmates until a state hospital bed comes open. This really is a pay me now or pay (more) later kind of deal.

Expanding Governor Perry's Border Initiative: At Gov. Perry's insistence, in 2007 the Legislature spent $140 million over the biennium on "border security" in the 16 Texas counties along the Rio Grande - mostly for overtime and equipment at those 16 county sheriff's departments. This year he wants to continue that funding and expand the grants to include grants to urban areas, an idea that seems to me similar to Bill Clinton's federal COPS program.

Paying for TYC Improvements: While the Sunset Advisory Commission suggested it might be possible to save money by merging the Texas Youth Commission and the Juvenile Probation Commission, there are many problems at both agencies that can only be addressed by expanding services - particularly special ed and mental health services, along with moving to smaller, rehab-oriented facilities and improving reentry programming.

In addition, if counties must pay private vendors to house commitments TYC previously took, the cost of those grants - including adequate state oversight - will not be significantly less than if a state agency does the job. Breaking even would be getting off cheap at TYC. In fact, given the agency's current, barely out of crisis status, reducing spending risks underinvesting in critical educational and anti-recidivism components that, from a public safety perspective, deserve more attention in Appropriations, not less.

Will UTMB move their prison hospital in the wake of Hurricane Ike? If so the state must pay to reconstruct a new facility elsewhere while suffering serious medium-term dislocations in what was already a poorly functioning care-delivery system. Relatedly, no word on how the hurricane and massive layoffs affected UTMB's telemedicine program, which provides much inmate of the specialty and psychiatric care both at TYC and TDCJ. How much new investment will be required to get everything back up to speed?

Funding "Innocence" Work: The Fort Worth Star Telegram said on Sunday that post-conviction work Texas law shool innocence clinics should receive a modest budget boost to help finish vetting outstanding DNA claims - in part to offset the effects of the Madoff scandal on my employers at the Innocence Project of Texas. The Startlegram emphasized out that boosting funding for innocence work by $1 million would cost just more than 1/500 of the proposed pay hike for guards.

These costs overall seem ominously high if the numbers reported by the Chronicle are accurate. That's perhaps $1.5 billion or more in "exceptional" criminal justice related budget items on the table right off the bat, when predictions call for perhaps $2 billion in total discretionary spending across the entire state budget- a figure which could be swallowed up in a heartbeat by a $5 billion hole in school finance.

More on this when we get official numbers from the Comptroller next week.

RELATED: From Talk Left, "Will the Recession Mean More Traffic Tickets?"

Texas Innocence Project seeks funds after Madoff debacle

My employers at the Innocence Project of Texas (IPOT), a group dedicated to freeing innocent people from prison, took a major hit recently after the closure of the New-York based JEHT Foundation, which was a victim of the infamous Bernard Madoff ponzi scheme scandal. This unforeseen financial blow caused the Austin Statesman's editorial page to wonder, "What's the penalty for stealing hope?" A JEHT Foundation grant made up more than half of IPOT's annual funding.

Today IPOT Executive Director Natalie Roetzel sent out an email soliciting donations. Here's the text:

The Innocence Project of Texas Needs Your Help
DONATE TODAY!!!

The Innocence Project of Texas dedicates its time and money to assist those who have become voiceless in the criminal justice system, to those who have been wrongfully convicted of crimes in the State of Texas. In order to fund our Project, we actively seek out the support of foundations and donors, but we have learned over the past few weeks that we are not immune from Wall Street scandal. Most recently, our organization was informed that the JEHT Foundation, a major funder of IPOT's work in Dallas County, is closing its doors after being hit hard by Bernard Madoff's alleged ponzi scheme. In the wake of this tragedy that is affecting numerous non-profit organizations around the country, we are reaching out to you for contributions to our cause.

The JEHT Foundation has a legacy of funding organizations and government entities committed to achieving justice and preserving equality and human rights. In June of this year, the Foundation pledged more than $450,000 to fund DNA tests and IPOT expenses related to our work on Dallas County cases. Today, that funding is in jeopardy as the JEHT Foundation was forced to close its doors and inform grant recipients that no additional payments will be made on previously awarded grants. Although the loss of a portion of the IPOT designated JEHT funds will not constitute an end to our organization, it is a definite hurdle that we are committed to overcoming.

If you would like to assist the Innocence Project of Texas in our struggle to raise much needed funds for case investigations, DNA testing, and operational expenses, please consider making a donation today. By donating to the Innocence Project of Texas, you can play a part in making sure that Texas's wrongfully convicted men and women receive the justice they deserve.

Donate online today or mail your donation to the address below. We look forward to hearing from you soon.

Innocence Project of Texas

1511 Texas Avenue

Lubbock, Texas 79401

Please help if you're able, and the more zeroes you can tack onto the end of the contribution, the better.

MORE: See IPOT's specific wish list and a discussion of legislative funding for innocence work from the Fort Worth Star Telegram.

Shoplifting up as economy tanks

Having undertaken to identify criminal justice implications for the current economic downturn, I was interested to see this item from the New York Times about a surge in shoplifting ("As economy dips, arrests for shoplifting soar," Dec. 22):

Police departments across the country say that shoplifting arrests are 10 percent to 20 percent higher this year than last. The problem is probably even greater than arrest recordsindicate since shoplifters are often banned from stores rather than arrested.

Much of the increase has come from first-time offenders like Mr. Johnson making rash decisions in a pinch, the authorities say. But the ease with which stolen goods can be sold on the Internet has meant a bigger role for organized crime rings, which also engage in receipt fraud, fake price tagging and gift card schemes, the police and security experts say.

And as temptation has grown for potential thieves, so too has stores’ vulnerability.

“More people are desperate economically, retailers are operating with leaner staffs and police forces are cutting back or being told to deprioritize shoplifting calls,” said Paul Jones, the vice president of asset protection for the Retail Industry Leaders Association.

The problem, he said, could be particularly acute this December, “the month of the year when shoplifting always goes way up.”

Two of the largest retail associations say that more than 80 percent of their members are reporting sharp increases in shoplifting, according to surveys conducted in the last two months.

Compounding the problem, stores are more reluctant to stop suspicious customers because they fear scaring away much-needed business. And retailers are increasingly trying to save money by hiring seasonal workers who, security experts say, are themselves more likely to commit fraud or theft and are less practiced at catching shoplifters than full-time employees are.

That last paragraph in particular strikes me as an interesting twist; I hadn't thought about the use of temp workers increasing the risk of theft, which adds another layer of cost and complications to businesses forced to downsize. That cheaper, seasonal employee may not seem so cheap once they clear out the cash register on their way out.

These data are from retailers associations, not official crime statistics, so we'll have to wait at least a year to see if the increases bear out in the official numbers. Certainly, though, it makes sense that low-level crimes of opportunity might increase when so many more people are feeling the economic pinch.

Hat tip to CrimProf Blog.

RELATED: The Washington Post says that whether or not property crime is statistically increasing, anxiety about property crime is going up.

MORE: Jack Shafer at Slate calls this story the "Bogus Trend of the Week." It'll be interesting down the line to compare this period's official theft statistics with media hype about the economic crisis boosting property crime.

JEHT Foundation closure a blow to criminal justice reform

News came on Monday that the JEHT Foundation, a philanthropic charity out of New York that has funded a great deal of criminal justice reform work in Texas and around the country, will cease giving grants and close its doors in January because their money was invested with alleged Wall Street crook Michael Madoff who apparently lost all their money in a $50 billion "ponzi scheme." You can read the announcement from their President Robert Crane here.

Along with George Soros, the JEHT Foundation was one of the largest funders of progressive criminal justice reform work nationwide. According to the New York Times:

When Jeanne Levy-Church created the JEHT Foundation in 2002 to promote justice, equality, human dignity and tolerance, she tapped into investments run by Bernard L. Madoff.

Those investments were initially made more than three decades ago by her father, Norman Levy, who entrusted his real estate fortune to Mr. Madoff. Financed solely by regular contributions from Ms. Levy-Church, the foundation gave away more than $75 million over the next few years.

But on Monday, the young foundation announced that it would cease operations by the end of January — a victim of the same investments that made it a star in liberal philanthropic circles. “The returns had been steady and strong for all these years,” said Robert Crane, the foundation’s chief executive. “It was shocking.”

Mr. Madoff’s investment firm, Bernard L Madoff Investment Securities, collapsed last Thursday when federal regulators arrested him on charges that he had masterminded a scheme defrauding investors of $50 billion by his own estimate. ...

Ms. Levy-Church and her husband, Ken Levy-Church, supported JEHT each year with a contribution from their Madoff funds. There will be no more.

“Our programming is totally dependent on the ongoing funding, so for all intents and purposes it has ceased,” said Mr. Crane, JEHT’s chief executive. “People with grants currently in hand will keep that money, of course, but we can’t make good on pledges and grants that are for multiple years.”

The foundation’s 24 employees are losing their jobs, and organizations like Human Rights First, the Center for Investigative Reporting and the Juvenile Law Center are losing revenue.

Another foundation sustained by the Levy-Church fortune focused on sustainable food policies must also shut its doors because of the Madoff debacle.

The JEHT Foundation was particularly important because it had undertaken to finance grants in areas like civil liberties advocacy and criminal justice reform that more traditional liberal foundations had considered too edgy to support.

In Texas, JEHT in the past has supported criminal justice advocacy work at the ACLU of Texas, the Texas Criminal Justice Coalition, and the Innocence Project of Texas - all organizations I've worked for during periods when they received JEHT support - as well as the Texas Defender Service and probably other reform groups I'm not aware of. One of JEHT's larger, recent campaigns in Texas supported voter registration work among ex-felons.

It's hard to know what impact JEHT's closure will have - they're not rescinding grants that were already let, but multi-year grants won't be honored and JEHT will not be issuing new funds for these types of projects.

This is a major blow to the criminal justice reform movement nationally, but at the same time JEHT's prior work has already helped build up a new cadre of skilled activists on these topics who didn't exist just a few years ago because nobody was providing them professional-level support and development. So even if JEHT never gives another dime, the foundation will have spawned a legacy that will outlive its formal, legal structure.

While the foundation's denouement was a disappointment, the contributions by Crane and Co. have been significant and much appreciated. They've financed much important work that will continue to impact criminal justice policy in the coming years even now that their money has dried up.

BLOGVERSATION: See more from Daily Kos, Thinking Outside the Cage, ForPeace, and MoneyLaw. See also this video from foundation E.D. Robert Crane.

MORE: See the New York Times' extensive coverage of Madoff's fraud, which they describe as the first international ponzi scheme.

AND MORE: From the Dallas News, "JEHT funding for Dallas DNA tests already granted."

High interest rates delay McLennan jail construction

In Waco, McLennan County Commissioners are temporarily postponing jail construction because of high interest rates resulting from Wall Street's credit crunch, the Waco Tribune Herald reports ("Rough financial markets delaying construction of McLennan County jail," Nov. 19):

McLennan County commissioners Tuesday postponed for the third straight week issuing project revenue bonds to finance the new jail because of high bond interest rates. Community Education Centers, the New Jersey-based company that is to oversee the new jail’s construction and operation, would be responsible for paying the interest on bonds the county sells to third-party financial houses.

County Judge Jim Lewis said officials had hoped to break ground for the new jail this month. However, the county is waiting to see whether the financial markets stabilize, allowing for reasonable bond interest rates. In the meantime, Lewis said, the project cannot go forward. He did not know how long the county would hold out on issuing the bonds.

“We could sell these bonds today if we wanted to, but we’d be selling them for 10 percent interest or more,” Lewis said, citing the stock market’s large fluctuations in the last week. “If we tell (CEC) that we’re selling for that high of interest, they’d say there is no way they can make this work. So it would be a prudent business decision to wait and see how the market does.”

I'd predicted precisely this outcome soon after the credit markets crashed, declaring:

it's worth mentioning the most immediate criminal justice dilemma created by the crisis - rising cost of commercial paper (debt) used to finance government construction. Some jurisdictions are already canceling debt issues approved by voters. In Houston, "the City Council [decided to] draw $100 million out of cash reserves to fund construction projects, rather than use commercial paper on which interest rates had spiked." According to a Harris County source, "the commercial paper rate was 1.74 percent a week on Sept. 11 and jumped to 5.25 percent a week later. The county also uses commerical paper."

This news makes new jail construction projects ... a lot more expensive than voters were previously told

So a month ago Harris County was balking at 5.25% interest rates, and today, McLennan County would have to pay up to 10% interest to build a jail. Every jail project in the state faces the same dilemma, which tells me to expect a serious slowdown in the rate of new jail construction as long as the credit crunch continues. With luck, that dynamic may spur county officials to more diligently seek solutions via alternatives to incarceration and jail diversion instead of just building more lockups.

Economy may doom Smith County's jail building aspirations

An AP story published in the Houston Chronicle says the economy may doom Smith County's jail bond proposal on Tuesday's ballot:

The most contentious local bond election Tuesday in Texas might be in Smith County, where voters in the ultraconservative heart of East Texas could reject a jail expansion proposal for the fourth time in three years. Each have been sound defeats that came in better times for taxpayers.

The latest pitch is a $59.6 million, 694-bed addition offered in a widening national financial crisis. Like other local ballot measures Texas, the plan could be sunk by economic fears.

"They're whole-package conservatives here," said state District Judge Cynthia Kent, who leads the opposition to a new Smith County jail. "They're law and order, but they're also conservative about giving us more of their money."

Financially squeezed taxpayers elsewhere may feel the same. More than 50 school districts in Texas are asking voters to approve tax hikes Tuesday, hoping to fare better than at least two dozen districts that have already been rejected by voters in tax rollback elections.

In Dallas County, a $747 million package to build a new Parkland Memorial Hospital is among the largest bond proposals in the state. Without any organized opposition, the crumbling economic climate may be the biggest hurdle.

"There's so much bad economic news nationally," said Bernard Weinstein, director of the Center for Economic Development and Research at the University of North Texas. "Consumer confidence is falling off a cliff. That could affect voter outcomes."

It's a possibility even jail supporters in Smith County concede.

Burglarize a home in Tyler and jurors will "sock it to you here," longtime Smith County Sheriff J.B. Smith reminded. But when it comes to more jail space to house suspects, three proposals since 2006 have failed with 63, 86 and 68 percent of the vote.

Five nights a week, jail vans leave Tyler to deliver inmates to neighboring counties or haul them back for court appearances. Smith said $12 million has been spent since 2004 leasing outside beds; 151 inmates from Smith County were locked up elsewhere in East Texas as of Monday.

Sheriff Smith goes on to claim that "Even when all the beds aren't full, ... 10 to 15 percent are needed to ensure, say, DWI offenders aren't locked up with suspected murderers." That sounds a little high to me; I've heard it said 5-7% of beds needed to stay empty for that purpose, not 10-15%. It sounds to me like he's overstating the number of empty beds he must maintain just like he overstated the threat of federal litigation forcing the county to construct a new jail: Because Judge Cynthia Kent's jail diversion program has worked so well that currently the county has space in the jail but still chooses to pay for outside beds.

Crunch the numbers for yourself. As of October 1, Smith County's jail had a capacity of 755 but only housed 675 people. Of those, 47 weren't actually county inmates but were being held on contract for some other entity (probably the feds) for a fee. So on October 1, there were 628 county inmates in the jail, and another 107 housed in other counties. That means Smith County's current "demand" is 735 total county inmates and it has a jail designed for 755.

Just a few more tweaks and funding for new diversion programs would easily reduce that number to something more manageable. El Paso, for example, reduced the time defendants wait in jail pretrial by 18 days by introducing a direct filing system. Tyler's police department and the Sheriff have refused to let officers use new authority given by the Legislature to give summons instead of arresting petty misdemeanants. And Judge Kent has proposed a litany of jail diversion proposals, of which the commissioners court only chose to back one.

That program's success is what's lowered Smith County's numbers to where they are, and if they'd enact the veteran judge's other ideas, I've little doubt the overcrowding problems would be completely alleviated for the time being. If a new jail were to pass, I think that'd be the last we'd hear about alternatives from the commissioners court, so I welcome the prediction that economic bad times might spook voters into rejecting the jail, again.

Perhaps after voters reject the Smith County Commissioners fourth jail proposal in three years, they'll finally get serious about incarceration alternatives instead of merely dabbling with the idea while they plot to double their jail capacity.

RELATED: See recent coverage from the Tyler Morning Telegraph:

• Public to decide fate of $59.6 million jail proposal
• Bond endorsed by Master Plan Resource Committee
• Judge Cynthia Kent: No New Jail
• Letter from proponents: Bonds worthy of support
• Jail bond opposition group reports higher contributions than pro-jail group
• Tyler Chamber of Commerce endorses $59.6 million jail bond plan
• Commissioners, judges, discuss courthouse plans, possible bond
• New Jail the Answer?
  

Economic downturn could boost suicides, domestic violence

Discussing ways in which the much-ballyhooed economic downturn will affect the criminal justice system, I'd earlier suggested that "there's little reason to think this economic downturn must automatically boost crime rates. I'd expect a handful of specific offenses to increase - particularly stuff like theft of copper and other metals or siphoning gasoline." That initial assessment deserves some caveats, however, and we find one of them in this item from USA Today ("Financial crisis can lead to violence," Oct. 14) informing us of another category of crimes that are increasing: Suicides and domestic violence. Reported USA Today:

Across the country, authorities are becoming concerned that the nation's financial woes could turn increasingly violent, and they are urging people to get help. In some places, mental-health hot lines are jammed, counseling services are in high demand and domestic-violence shelters are full.

"I've had a number of people say that this is the thing most reminiscent of 9/11 that's happened here since then," said the Rev. Canon Ann Malonee, vicar at Trinity Church in the heart of New York's financial district. "It's that sense of having the rug pulled out from under them."

With nowhere else to turn, many people are calling suicide-prevention hot lines. The Samaritans of New York have seen calls rise more than 16% in the past year, many of them money-related. The Switchboard of Miami has recorded more than 500 foreclosure-related calls this year.

"A lot of people are telling us they are losing everything. They're losing their homes, they're going into foreclosure, they've lost their jobs," said Virginia Cervasio, executive director of a suicide resource enter in southwest Florida's Lee County.

These are crimes of a pitiful variety and the examples offered are heartwrenching:

An out-of-work money manager in California loses a fortune and wipes out his family in a murder-suicide. A 90-year-old Ohio widow shoots herself in the chest as authorities arrive to evict her from the modest house she called home for 38 years.

In Massachusetts, a housewife who had hidden her family's mounting financial crisis from her husband sends a note to the mortgage company warning: "By the time you foreclose on my house, I'll be dead."

Then Carlene Balderrama shot herself to death, leaving an insurance policy and a suicide note on a table.

My purpose here is to identify which particular offenses we should expect to increase during an economic decline instead of feeding into the common theme that a tanking economy will automatically lead to an unstoppable crime spree. Some have already resorted to blatant scare tactics: A Canadian paper, the Edmonton Sun, for example, told readers that "if the economy goes into a tailspin, Edmontonians should brace for a boom in street violence, drug addiction and homicides, according to a University of Alberta criminologist." That's virtually unadulterated scaremongering with little research-based support.

Equally important is to figure out the proper response in each case, and with prisons utterly full, that can't just be jacking up penalties. Theft of copper and other industrial metals soared, for example, after legislation approved in 2007 increased the penalty in Texas to a felony for stealing metal to sell for scrap. That's precisely one of those crimes which appears governed by economic circumstances rather than fear of punishment, and reducing it requires more creative solutions like undercover operations targeting scrap metal dealers.

Similarly, family violence and suicide aren't the types of offenses that respond well to boosted punishments. Instead, in both instances, prevention, rapid response during a crisis and access to mental health services are keys to identifying and reducing unstable behaviors. Being "smart on crime" isn't just a luxury for the good times, it may be even more important when economic times are bad.

Has the 3rd Court of Appeals found a solution to the liquidity crisis?

Speaking of Judge Diane Henson and the Third Texas Court of Appeals, she spoke up recently to criticize her colleagues' decision in the Tom DeLay money laundering case - a ruling that's an almost caricatured, extremist example of appellate judges identifying the outcome they want, then crafting a contorted opinion to get that result.

In order to exonerate defendants in the Tom DeLay money laundering case, a three-judge panel (all Republicans, Henson is a Democrat) came to the conclusion that "money laundering" under Texas' law does not include transactions involving checks! I can't imagine that standard applied to any other type of money laundering, can you?

Now that I think of it, though, perhaps the judges hoped to solve the nation's raging liquidity crisis with this decision? It might work! Given the current credit crunch, perhaps if Texas excludes checks from its money laundering statutes it would encourage billions in new deposits from drug dealers around the planet into Texas banks and miraculously save the economy. I'm sure that was their intention, don't you think? ;)

How will economic meltdown affect the justice system?

As the nation watched, aghast, first at Wall Street's economic meltdown and then Washington's ill conceived bailout, I've wondered what effects the financial mess might have on the criminal justice system. Here are some initial thoughts:

Possible prosecutions?
Clearly there may have been flat-out fraud involved in some of these financial institution failures. (I sat up and took notice when Wachovia went down since a subsidiary was accused last year of laundering money for a Mexican drug cartel.) A few angry folks have called for prosecutions of investment bank CEOs and their minions, but it seems to me the main problem is that de-regulation eliminated most of the laws they might be accused of violating, which is why we're in this mess in the first place.

Pressure to delay new jail construction
Since I've been tracking local votes on jail bond initiatives in Texas, including an important upcoming vote in Tyler on a new jail, it's worth mentioning the most immediate criminal justice dilemma created by the crisis - rising cost of commercial paper (debt) used to finance government construction. Some jurisdictions are already canceling debt issues approved by voters. In Houston, "the City Council [decided to] draw $100 million out of cash reserves to fund construction projects, rather than use commercial paper on which interest rates had spiked." According to a Harris County source, "the commercial paper rate was 1.74 percent a week on Sept. 11 and jumped to 5.25 percent a week later. The county also uses commerical paper."

This news makes new jail construction projects like Tyler's a lot more expensive than voters were previously told, and thus a lot less likely to pass, if I had to bet. What's more, past projects without fixed interest rates are likely to cost a lot more than officials or voters expected and could even be canceled as a result.

Rising crime? Maybe not
While the relationship between crime and economics is indistinct, to the extent economic distress worsens crime, crime might worsen, particularly property and addiction-related offenses. The US Conference of Mayors portrays this as a certainty (pdf), but for my part I'd not label that assessment a prediction so much as identifying a possibility. Some argue there's a strong relationship between the economy and property crimes, in particular, but that's not set in stone. Regular readers know that crime has declined in recent years despite a slowing economy. According to the Heritage Foundation:

there's little evidence to suggest that good economic times have much effect on crime. Crime rates rose every year between 1955 and 1972, even as the U.S. economy surged, with only a brief, mild recession in the early 1960s. By the time criminals took a breather in the early 1970s, crime rates had increased over 140 percent. Murder rates had risen about 70 percent, rapes more than doubled, and auto theft nearly tripled.

By the same token, a bad economy doesn't always bring more crime. Crime rates fell about one third between 1934 and 1938 while the nation was struggling to emerge from the Great Depression and weathering another severe economic downturn in 1937 and 1938. Surely, if the economic theory held, crime should have been soaring.

If crime declined during the Great Depression, there's little reason to think this economic downturn must automatically boost crime rates. I'd expect a handful of specific offenses to increase - particularly stuff like theft of copper and other metals or siphoning gasoline. But there's no inherent relationship between being poor and being a criminal.

Trouble paying the bills
Corrections and public safety spending makes up a much more substantial portion of local and state-level budgets than they do for the feds, which means declining revenues from property taxes and new housing starts will dramatically reduce the revenue to pay for prisons, jails and cops. Municipalities and counties will immediately feel the pinch, though Texas' state budget will be somewhat protected in the short-term from the fallout because of $100 per barrel oil. Even oil revenues will decline, though, if we enter a full-scale global recession. Plus, reduced consumer demand will reduce sales tax revenues, doing further damage to state and local budgets.

Nationally, states haven't been building many new prison units with private prisons accounting for most of the new growth recently. But those companies, too, rely on commercial paper to build new facilities, so expect either A) a reduced expansion rate for private prison capacity or B) increased costs for their customers.

Gas prices fuel budget woes
Though not directly related to the credit crunch, rising fuel costs remain a core dilemma for criminal justice agencies of all stripes: Police and Sheriffs must pay more for patrols while jails and prisons must pay more to transport prisoners and supplies. High fuel prices can also alter policing tactics. Lewisville PD told the Conference of Mayors that:

When the current fiscal year concludes, the police department budget for fuel is expected to be double the amount budgeted. The police department has implemented measures to conserve fuel such as limiting idling, doubling up officers at times, and requiring each officer during each shift to spend 15 minutes without the vehicle running each day.

I've been hoping the dilemma over gas prices might spur more Texas law enforcement agencies to utilize new authority to issue citations instead of arresting for low-level misdemeanors, saving departments gas money transporting penny ante offenders to and from jail and keeping officers out on the streets for greater periods. I'd expect more departments to revisit that option the longer gasoline prices remain at current levels.

What else can you think of? How else might a faltering economy and the credit market collapse affect the criminal justice system?

BLOGVERSATION: Anne Reed wonders if the economic downturn will make juries less diverse, while Scott Greenfield considers how economic distress might influence jurors decisionmaking, advising "If there is any possible way to avoid going to a trial now, do it."

Wall Street thinks economic downturn will boost private prison fortunes

Sometimes it may seem like I'm picking on this or that county when they pursue jail overcrowding solutions that aren't in the taxpayers interests, but the truth is these issues aren't really local or even statewide, but are national in scope. After he left a note in the comments, I put in a call to Grayson County Judge Drue Bynum's office, though I haven't heard back yet. He's the fellow proposing the privatization plan that he says will let Grayson County build a new jail with no taxpayer investment

In the meantime, though, I noticed this item over at Think Outside the Cage pointing to a Reuters story that tells us Wall Street types are hoping more local officials like Judge Bynum decide it's cheaper to subsidize a private company to do the government's business than to do it themselves. Reports Reuters:

Government belt-tightening could be a boon for a range of mid- and small-cap names whose share prices have in many cases fallen as far as more cyclical companies that really do suffer in a downturn. And, analysts say, that could present some stock market opportunities.

The housing slump has hurt public budgets, as depressed property values and lowered homeowners' equity cut proceeds from real estate and sales taxes.

In 2009, 25 states are facing shortfalls, according to the Center on Budget and Policy Priorities. That pain trickles down to local governments, which increasingly look to privatize services they traditionally have performed.

By outsourcing a prison, states can save as much as a quarter of its cost, Avondale Partners analyst Kevin Campbell said, which is why private prison companies boosted their market share to 7.2 percent in 2006 from 6.5 percent in 2001-2003.

States might begin a new wave of prison privatization sooner than in the 2001 recession because the United States is still suffering from prison overcrowding as a result of that last downturn, Campbell said.

So at a national level, private prison companies and Wall Street investment analysts view the housing market downturn and pressure on state and local government as a marketing opportunity. Great! If that's true we'll see even more local officials who want to subsidize private companies instead of just pay for basic taxpayer services.

I don't believe for a second that private prisons can operate at 25% less cost than government and turn a profit, particularly for county jails where they must still meet requirements by the Texas Commission on Jail Standards like everybody else. That's a marketing pitch, not an assessment of actual contract costs (or else a reflection of cherrypicking the least dangerous, least costly inmates). I'm not opposed to private contracting as a crisis management option, but it makes no sense to put your county in a position where a constitutionally required service - the local county jail - is owned and controlled by a private business.

The private prison industry spent more than a million dollars lobbying Texas officials in 2007, reports Bob Libal over at Texas Prison Bidness. Expect that number to increase if the economy tanks, if it's true that nationally these companies view such indicators as a marketing opportunity.

Counties cannot contract away liability for the jail nor its expenses, the can only contract away control. Private prisons low-ball up-front bids and underpay employees to cut costs, but that only goes so far. After the initial investments are made, when the contract comes up for renewal, the contracting agency is pretty much stuck with the decision, having put all its eggs in the private company's basket. And if anybody sues, the taxpayers are still the ultimate deep pockets who are accountable.

When counties have enough money to function properly, the economics of private jails make little sense. It's when times are hard, apparently, that the idea of getting a new jail for free starts to sound attractive, but if there's no such thing as a free lunch, there's damn sure no such thing as a free jail.