CALLING THIS A DIRTY DEAL
Buyout- owned prison phone lines feel the heat
The feds are getting close to putting a lock on the profits private equity firms ring up on their phone systems in the nation’s jails.
Prisonrights advocate Paul Wright told The Post he met three weeks ago with acting Chairwoman Mignon Clyburn of the Federal Communications Commission. “It sounds like they will do something in regard to capping the rates,” he said.
In a cruel twist, buyout barons have been seen as being behind a business that gouges inmates’ family and friends with much higher phone rates for calls than those not in prison. “It’s pretty clear it is profiteering and gouging,” Wright said.
“I’ve been suggesting they should cap instate rates at 5 to 7 cents a minute,” Wright said. He expects the FCC to make a ruling by September.
Buy out owned telecoms currently charge rates ranging from 24 cents to 32 cents a minute in Connecticut ( lower if one uses a prepaid phone card) to a more reasonable 13 cents in New Jersey, according to prisonphonejustice.org.
Generally the rate depends on what cut the state takes on the phone service, Wright said.
New York, which does not contract with a private equityowned prison phone system and has made kickbacks illegal, charges only 5 cents a minute, roughly the same as the civilian rate.
The issue will get attention Thursday when advocacy group Silent Sentence is expected to tell FCC commissioners at a public meeting that almost a year has passed since it held a workshop on prison rates without action.
Prisons have their own closed phone systems that connect with outside phone networks.
Inmates make collect and the people who accept the charges pay the prison phone systems, mostly through prepaid phone cards.
Private equity firms have found no hangups with the two dominant prison phone operators.
American Securities LLC bought Global Tel Link for $ 1 billion from peers Veritas Capital and Goldman Sachs, netting the sellers better than 300 percent profit over three years.
Abry Partners in 2013 bought Securus from felcalls, low PE firm Castle Harlan for $ 640 million. Securus told lenders in April that its proforma Ebitda has grown from$ 100 million in 2013 to $ 115 million last year, according to the Huffington Post.