Rewriting Inequity: Policy Recommendations for CA PC 1305

So far this semester, I have written about the text of California Penal Code Section 1305. Most of that time has been taken up with discussing the problems with bail forfeiture and exoneration that arise from the way the law is written and implemented. In this final installment, I will address two problems I have raised over the last two posts: (1) affordability of bail and the bail schedule; and (2) amending PC 1305 so that it does not favor bail bond companies. By way of solutions to those problems, I will offer some policy recommendations for the California bail framework as we move into a time where the state-level bail system is getting some much-needed attention from criminal justice reformers.

Bail has come to mean a lot of different things. However, at its base, bail is simply the mechanism by which we attempt to guarantee the defendant comes to his or her court dates, while, at the same time, maximizing public safety and minimizing restraints on a defendant’s liberty. Since money bail is not working toward these intended purposes, it is time we get rid of it. There are other forms of pretrial release that do a much better job of getting the defendant to come to court when he or she is supposed to, and enable real criminal justice professionals to keep track of the defendant.

In general, the best way to fix the bail system in California is to abolish money bail in favor of a combination of preventive detention and pretrial release with supervision (first paragraph of page) similar to the structures in place in Washington, D.C. and New Jersey. However, that would require a complete overhaul of judges, jails, and a thriving quasi-insurance industry (bail bond companies). Since that is both unlikely to take root quickly and outside of the topics I have addressed so far, this post will focus on possible policy solutions and recommendations for PC 1305 specifically.

No One Can Afford the Better Option: Cash Bail and the Bail Schedule

Cash bail – as compared to commercial surety bail, or bail bonds – is always reserved as an option for defendants, but it is rarely taken. Few defendants can afford to deposit the full bail amount with the court, because the scheduled bail amounts are so high. This is especially true in the case of individuals who are accused of misdemeanors, where bail is most often set according to the bail schedule, usually between $1,000 and $10,000.

If the system is meant to ensure the defendant comes to trial – which it is – then the amounts should be high enough to matter, but should still take into account (1) the defendant’s ability to pay, along with (2) potential risks to the public’s safety if that person gets out. With those as the two chief considerations in setting bail, judges can tailor bail amounts to individual defendants enough to be effective, while not inflicting prison time upon them for their lack of assets. Conversely, the rich will no longer have access to freedom while the poor do not. Today, so long as the person has not been charged with a capital offense, for which there would be no bail, rich defendants can get out of jail almost immediately by buying a bail bond, regardless of how dangerous they are to the public.

As the Santa Clara County website says, “[t]he Bail Schedule is the presumptive bail in many, but not all statutory offenses.” Judges are permitted to depart from the bail schedule but almost never do, since they really have no reason to do so. It’s already been agreed to by a majority of the judges in the county, so it comes prepared with a stamp of approval. However, judges can and should take advantage of that discretion in setting bail to alleviate foundational problems ranging from jail overcrowding to the simple fact that pretrial detention only affects people negatively (PDF page 3-4), especially low-risk defendants. That is, keeping people in jail, discerning which defendants are not a public safety risk and will most likely come back for their court dates can be, and has been, accurately done. At the very least, if money bail has to continue being part of our criminal justice system, then defendants that we can safely let out should be able to get out of jail.

Get Rid of the Bail Schedule

Getting rid of the Bail Schedule altogether is the most efficient way to discern which defendants are either flight risks or dangerous, so that judges have to make individualized determinations, and will hopefully choose to take advantage of risk assessment tools. One logical counterargument to that point is that judges just don’t have the time to consider each defendant’s unique circumstances, so the Bail Schedule is simply a creature of convenience that helps the criminal justice system run smoothly. The obvious response is that we are dealing with a person’s freedom, as well as their future. The Bail Schedule lets judges use it as a default, since it is the “presumptive bail,” but the standard amounts are too high for many defendants. Thus, adherence to the Bail Schedule results in unnecessary pretrial detention. Any jail time is bad, but unnecessary jail time is considerably worse. As an Arnold Foundation study found, “low-risk defendants who were detained pretrial for more than 24 hours were more likely to commit new crimes not only while their cases are pending, but also years later” (PDF, page 4: “The Hidden Costs of Pretrial Detention”). Clearly, we hope that criminal justice is both making society safer and better generally – part of which is lowering crime.

If jail time is causing an increase in crime, then the criminal justice system – legislators, judges, and prosecutors – should concentrate on alternatives to jail time. As an added benefit, jails will become less crowded and, hopefully, get back on track by inflicting pretrial detention only on the people who cannot be freed safely. Additionally, the county will save money. It costs the county, and therefore taxpayers, $204 per day for a single inmate (PDF, page 22) to stay in Santa Clara’s Main Jail pretrial. The cost of pretrial supervision – for those defendants who require supervision – is estimated at $15 per day (PDF, page 22). Some defendants don’t even need to be supervised.

If the argument for the Bail Schedule is convenience, and replacing that convenience for a different kind of convenience could bring about all of the positive effects above, then it seems like a worthwhile trade. Now I’ll turn to a discussion of how to remedy some of the problems with PC 1305 from the legislative side.

Rewriting PC 1305

Throughout my posts in the last couple of months, and most of the other posts on this blog, there are a few common threads, one of which is: bail bond companies are getting off too easy. One of the many reasons that is true is that PC 1305 is written in a way that favors bail bond companies, so the entire process – from getting a defendant out of jail to when they go to trial, or don’t – is written to give bail bond companies as many chances as possible to make money and dodge liability.

Stop Construing PC 1305 “in Favor of the Surety”

One of the most glaring problems with the way PC 1305 functions is that courts are actually required to construe the law in bail bond companies’ favor. As far back as 1975, in a case called People v. Wilshire Insurance Company, and as recently as 2015, in People v. United States Fire Insurance Company, courts have insisted on statements such as “[t]he Penal Code sections governing forfeiture of bail bonds must be strictly construed in favor of the surety to avoid the harsh results of forfeiture.” In People v. US Fire Insurance Company, the court explained further that, “strict construction of bail forfeiture statutes compels the court to protect the surety.” Even if the law were not written in favor of bail bond companies, it would still be treated as if it was. Why?

One explanation is that “the law traditionally disfavors forfeitures and this disfavor extends to forfeiture of bail.” People v. American Contractors Indemnity Co. However, bail bond companies are not traditional companies – they are little insurance companies who are guarded by huge insurance companies, which end up playing a critical role in the criminal justice system, in pursuit of profit. Because judges often – if not always – rely on the Bail Schedule, bail agents end up making the determination of which defendants get out of jail and which defendants stay in custody without regard for public safety. Their motivation is profit, so the defendants who get out are the ones who can pay for it, and who have high enough bail set to be profitable.

Bail bond companies and their agents should have higher risk of forfeiting their potential monetary gain, because they are responsible for both keeping the public safe by not letting out dangerous criminals, and getting those out who should be out, and then ensuring they go to trial. The stakes are much higher than for, say, car insurance, where the risk and reward are purely financial. In the bail context, the bond companies’ risks are financial, but the same risk for an individual is his or her liberty, which should hold a much higher price.

185 Days is Too Long

When a defendant fails to appear, the bond company has 185 days to find them and bring them back before the bond company loses any money. They can also attempt to extend that period by 180 days if they file a motion with the court pursuant to 1305.4. Bail bond companies exist to get people out of jail pretrial, with the promise to bring them back for trial. If any other person (or entity) in any other kind of job failed to do the single thing they were supposed to, it would be crazy to give them either 6 months or a year to finish the task they were supposed to have done in the first place, and then pay them for it.

Bail bond companies need to keep better track of defendants so that they don’t fail to appear. If a bonded defendant does fail to appear, the bail bond company should not still make money. Thus, the bond should be actually forfeited when the defendant fails to appear. Or, at least, whatever the bond company got from the defendant should go to the court. To bring it full circle, allowing defendants to give a deposit to the court in cash, the same way they would pay a bail bondsman, would solve this whole problem. Then the defendant has a reason to come to court, and no one makes money for being terrible at his or her job.

Rearrest Should Not Equal Exoneration

When a defendant is out on bond and is rearrested, the bond is exonerated and the surety is freed of all obligations. Bail bond companies purport to protect public safety. However, almost 30% of people in Santa Clara County that bail bondsmen bail out of jail are rearrested. When a bail bond company bails out a defendant who is likely to commit another crime, it endangers the public. Thus, when a defendant commits a crime while out on bond, as more than a quarter of Santa Clara defendants post bond do, the bail bond company should forfeit either the entire bond or at least the portion they charged the defendant.

Conclusion:

There are many problems with PC 1305, but there are also many open avenues for solutions. Reform can come from judges by using discretion in setting bail, so that defendants get individualized assessments, even if it means that they see fewer defendants per day. The legislature should carefully consider the effects of PC 1305 according to the above critiques, to make sure the statute is bringing about its intention; not just benefitting huge companies making a safe investment in someone’s freedom, or incarceration. Finally, prosecutors can mitigate some of the damage 1305 does by not asking for higher bail or defaulting to the bail schedule in cases where ability to pay is a factor, and by giving more credence to tools-based risk assessments used by Pretrial Services.

Bail Exoneration: the Rest of PC 1305

My last post explained how the complicated process called bail forfeiture works in California. In California, that process is governed by the first few subsections of Penal Code Section 1305 (PC 1305). The rest of the law deals with the situations where, once bail is forfeited, bail is then exonerated.

After a defendant’s bail is set and he or she misses a court date, the bail is forfeited. If the court declares that bail is forfeited, the defendant’s money goes to the county after a long period during which it might still be exonerated (more on this below). If bail is exonerated, then the “surety or depositor shall be released of all obligations under bond,” i.e., the bondsman or defendant does not have to pay.

There are a lot of ways that, once bail has been forfeited, it will then be exonerated. In fact, most of the law is written detailing those scenarios. That is especially important because few defendants deposit their own money with the court, i.e., pay cash bond, so defendants rarely reap the benefit that so much of PC 1305 tries meticulously to preserve. In this post, I explain bail exoneration via PC 1305 and illustrate the ways that the law is written to favor exoneration, which almost by definition favors bail bond companies. Continue reading “Bail Exoneration: the Rest of PC 1305”

A Monopoly On Information: How Advertising In Jails Is Problematic For Defendants

Imagine being arrested and finding yourself in a jail cell. You have no access to a phone or the outside world. You know you have to show up for work the next morning but you have no idea what’s about to happen to you. You’re confused, afraid, and you would do anything to get out.

A few hours later you’re placed into “the tank” where an officer begins to ask you question. The tank is a holding cell filled with other recent arrestees all awaiting their fate. There’s not much to look at in “the tank” but you do notice a poster on the wall. The poster gives the names and numbers of many different bail bond agencies. You have no idea what a bail bond is and you’re still confused about what’s about to happen to you, but the advertisement tells you these agencies can help you get out.

product-2

The questioning stops and you ask if you can call one of the agencies. The officer allows this phone call without hesitation. Your call goes right through at no cost to you (not yet, anyway). This is because bail bond agencies generally contract with the jail phone service providers to ensure that defendants inside the jail have immediate access to them.

 

You speak to an agent named Bad Boy who promises he can bail you out in forty-five minutes. Unlike the officers and other law enforcement personnel you’ve come in contract with since your arrest, Bad Boy treats you like you’re human. At this point, you agree to pay him $5,000.00, 10% of the total cost of bail, to come bail you out. He tells you he can contact your wife for you and let her know you’re coming home. But most importantly, he tells you “everything is going to be okay” now that you’ve contacted him.

A few hours after you hang up the phone, Bad Boy comes and picks you up from jail. However, instead of taking you home, he takes you into his office to sign a lengthy contract that you don’t understand. At this point, you’re so exhausted that you sign without reading it (and because Bad Boy was so nice and polite). You are now facing a multitude of inconveniences: criminal charges from your arrest, expensive court fines, missed work, and now a contract with a bail bond agency where you have agreed to pay thousands of dollars.

This scene is all too familiar for those who have spent enough time researching the bail system in the United States. Many issues arise out of this particular scenario. First, some defendants can be released on their own recognizance (OR) at no cost and may benefit from waiting to obtain a pretrial services assessment. Second, these types of contracts place defendants and their families in a very vulnerable position.

In this post, I will discuss advertising in Santa Clara County Main Jail. Specifically, I will look at the way in which bail bond agencies have been given a monopoly on the information available to the accused. A monopoly is complete control of the entire supply of a service in a certain area or market. For the purposes of this discussion the service provided is information about release available to the accused and the area or market is the jail. Those in control are the bail bond agencies. Readers must note that private defense attorneys are also allowed to advertise in county jails. While this also raises several concerns, I only discuss bail bond agency advertising because of the specific impacts associated with that advertising: how these agencies control the information available to a defendant and in some instances are a defendant’s only method of contact with the outside world.

I use the term defendant and accused interchangeably because it is often the case that someone may be arrested and never actually charged with a crime. My post begins by discussing how advertising has made its way into the county jails. I will then proceed to identify the steps involved in determining the ins and outs of this advertising. I will conclude by posing many unanswered questions pertaining to the negative effects of this form of advertising.

The Unexamined Consequences of Allowing Advertisements in County Jails:

In a letter dated March 1, 2016, John Hirokawa, the Santa Clara County Chief of Correction, recommended that the Board of Supervisors of the County of Santa Clara (the County) approve an agreement with the Jail Advertising Network (formerly known as Partners for a Safer America.) I will proceed in this post by referring to the Jail Advertising Network as Partners for a Safer America (PSA) because that is the name used in many of the Santa Clara County records. The agreement was approved. It allows PSA to sell advertising space in the Santa Clara County jails, bringing in over a hundred thousand dollars in revenue for the department of corrections(DOC). The only people/entities eligible to purchase advertising space are bail bond agencies and private defense attorneys.

In his recommendation, Hirokawa discusses the history of similar agreements made by the County and provides minimal information on the potential impacts of approving the agreement. Hirokawa writes, “the recommended action will have no/neutral” impacts on children, seniors, and sustainability. In one of his concluding statements, he indicates that the “DOC … would lose over 100K in revenues” if this agreement is not approved. Hirokawa’s letter fails to so much as even mention some of the potential negative consequences of this approval. For example, allowing for such advertisements without informing defendants of the potential for OR release may result in a defendant unnecessarily paying thousands of dollars to a bail agent. This lack of awareness or willful blindness on the part of the County is troubling primarily because it shows a complete disregard for the financial welfare of the accused, many of whom are their constituents.

Partners for a Safer America (Jail Advertising Network)

Let me digress for a moment to provide some background information on PSA and what it is they actually do. Simply stated, they are a company that contracts with counties all over California to sell advertisement to bail bond agencies. They keep anywhere from 20-30% of the profits and the County gets the rest (usually 70%-80%). The advertisement or product they produce is a poster board (as shown above). While this may sound simple, their home page provides a much more expansive interpretation of their work. The home page begins by describing the financial troubles faced by law enforcement agencies all over the United States. Their sales pitch concludes with a thought-provoking sentence, “As we grow in the number of institutions we support, we hope to realize the vision of safer, more secure communities from coast to coast.”

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At a first glance, it appears as though PSA is an agent of the counties they “support.” PSA’s website further encourages this mistaken belief by declaring their purpose is to provide “financial support and resources to those who keep our communities safe” and by using photos like the one above. To a naive outsider, it appears as though the PSA mission is much broader than simply providing advertising for bail bond agencies and private defense attorneys. 

 

Continue reading “A Monopoly On Information: How Advertising In Jails Is Problematic For Defendants”

Bail Forfeiture 101

When a defendant fails to appear for a court date, the judge is required under California Penal Code Section 1305 (PC 1305) to declare their bail forfeited. Bail forfeiture is an extremely complicated process that works differently for individuals than it does for commercial bail bond companies. This post is going to focus on how the process works (1) for individuals, and (2) for commercial surety bail companies, also known as bail bond companies. I want to highlight how oppressive the system is on defendants and how few opportunities counties have to collect any money from bail bond companies as a result of the way the law is written.

How it Works for Individuals

When a person is arrested and brought to jail, he or she can make bail, which means they have an opportunity to pay money either to the court or to a bail bond company in exchange for freedom.

Judges set bail according to the County Bail Schedule (link is a PDF of Santa Clara County’s Bail Schedule), usually in a defendant’s first court appearance. For example, if a defendant is arrested for battery, a violation of CA Penal Code Section 242, they are guilty of a misdemeanor and minimum bail is to be set at $5,000.

Cash Bond:

Most people don’t carry $5,000 on hand, or even have it waiting in a checking account. If they do, they can deposit that money (or property equivalent) with the court and promise to come back to court for their hearing. If they don’t show up for their hearing, they lose the money immediately – it is “forfeited.” This is called “cash bond” or sometimes “cash bail.” According to officials in Santa Clara, it happens rarely because so few people have the money to take this option.

Bail Bonds:

The other option that an individual has is to pay a bail bond company a percentage of their total bail amount, usually 10%. In return, the bail bond company promises to pay the remainder of the bond if the individual does not appear in court.

He or she can give the bail bond company either cash or rights to property. This is not always the defendant’s property; it can also be a family member’s. In fact, bail bond companies and their representatives go through a lot of trouble to get co-signers on the bond, in case the defendant “skips bail,” i.e., doesn’t come to court.

Whether the defendant appears in court or not, he or she loses the money paid to a bail bondsman because the individual’s initial payment for the bond is non-refundable. Thus, the defendant has both lost the money he or she paid to the bond company, and has no incentive to show up to court, precisely because the money is already gone. (For a more detailed discussion of the differences between cash bail and bail bonds, see the Johnny Cash / James Bond hypo in “Bail and Public Safety in Santa Clara County.”)

How it Works for Bail Bond Companies

When all of the steps above occur, and the defendant misses a court date, meaning bail is forfeited, it works differently for the bail bond companies. The company that sold the bond is responsible for the other 90% of the bail amount, which means they either pay out or they sell someone’s house (or other assets) in order to make up the cost. Bail bond companies are not required under CP 1305 to initially give the court anything of their own as collateral as a condition of the defendant’s release, just the “undertaking of bail” which is just a promissory note – i.e., a promise.

Meanwhile, the bail bond company’s agents may be out looking for the defendant, or may not be. Santa Clara officials have said that people most often miss court dates because they were asleep or drunk, and those people often turn themselves in. Other times, the bail bond company waits for the person to be rearrested, which happens strikingly often: 29.4% of cases – more than one out of four.

In either of those cases, the bail bond company is released of all obligations and the bond is exonerated under PC 1305(c)(1), meaning that the bail bond companies owe no money to anyone. (Exoneration is the topic of my next post.) Further, the bail bond company will be notified of the order exonerating bond and will be able to get first crack at selling the defendant a new, more expensive bond in order for the defendant to be re-released (the charges stack up, which means higher bail). The new bond is for the second crime, and the defendant is now free again to go out and commit a third crime. The process is made even easier for bail companies because under PC 1305(c)(1), the companies have 180 days to track down the defendant or wait for him or her to be rearrested, in this county or another (PC 1305(i)).

If this seems confusing, that is because it is. The law is written that way. Simply put, bail bond companies are highly incentivized to go after their clients who fail to appear, but rarely need to. On top of that, the money that the defendant paid for his or her freedom evaporated as soon as he or she walked out of jail. That is, as long as that price was paid in actual money, not a house or part of one. Unfortunately, this is just one way that bail bond companies hurt low-income families while offering a negligible criminal justice benefit. The way that bail is forfeited is largely procedural, which adds to the confusion. The beginning of PC 1305, the part that includes forfeiture, is below with slight changes and explanations.

When and How Bail is Forfeited:

There are only a few specific instances where bail has to be surrendered.

Bail is forfeited if a defendant misses:

(1) Arraignment, when the defendant is formally charged;

(2) Trial;

(3) Judgment, where the judge reads the punishment(s) for a crime if the defendant is found guilty;

(4) “Any other occasion prior to the pronouncement of judgment if the defendant’s presence in court is lawfully required,” which is essentially, if the judge says that the accused has to be there for something; and, finally,

(5) “Surrender[ing] himself or herself in execution of the judgment after appeal,” i.e., when the defendant is sentenced and fined, taken back to jail, or taken to prison. That is also when any conditions the judge imposes are announced.

Those eight lines of text, subsections (a)(1)-(5), are the only provisions in a law that runs about two pages in 10-point font, that explain when a forfeiture can happen and the bail bond company might be exposed to liability as a result. The rest of Section 1305 details the impressively extensive scenarios where a bail bond company can escape liability, which will be the subject of my next, no-doubt much longer post.

Forfeited Bail: How Much is Forfeited Per Year?

Suppose a criminal defendant posts a surety bond with the help of a bail bond agency. Typically in this case a defendant pays 10 percent of the bail amount to the agency, and the agency promises the court – via surety bond – that the defendant will show up to his required court appearances or else the agency will be on the hook for the entire bail amount. If the defendant fails to appear and cannot be located by authorities or a bail company within a year, that defendant becomes a long-term fugitive.

If all goes according to plan – at least the plan set out in California’s bail forfeiture statute – then the bail agency must forfeit the entire amount of bail to the county where the defendant in question was supposed to appear. How often does this occur? Do bail agencies pay the full amount when their client’s skip an appearance and can’t be located? How much of this money has gone unpaid?

Over a decade ago, a lawyer and self-proclaimed bail expert stated for an LA Times article that the amount of unpaid bail in California is between $100 – $150 million. The article gives no indication of how the lawyer got this figure. The reason why this figure is particularly interesting is because it has reared its head in other stories regarding bail forfeiture over the years, each of which takes the number at face value. For instance, a 2007 article on PrisonLegalNews.org states that LA County missed out on $9.1 million in bail forfeitures from 2001 to 2003, the majority of which one company, Capital Bonding Corp., was responsible. The same article also states the $100 – $150 million figure again, without explaining where it got that figure. Further digging to find out where the writer got these numbers has been fruitless.

More recently, an in depth NPR article on the efficacy of money bail published in 2010 also asserts the amount, writing without explaining that “[i]n California, bondsmen owe counties $150 million that they should have had to pay when their clients failed to show up for court.”

Is this number even close to accurate? There are two sources likely to have the best information to answer this question: bond companies themselves and individual counties. While my next line of research will involve posing questions to both of those entities, for now it is worth coming up with a broad estimate of how much money is owed to California as a whole in forfeited bail per year. This requires data on the rates of failure to appear, the rates of long term fugitive status and the median and average bail amount in California. I am using the long term fugitive rate for my math because it is the closest figure we have that roughly represents the number of cases where a bail agency has to pony up. Although bail can be forfeited for a number of reasons and at almost any time during the procedure, a long term fugitive case will be the most likely case where bail companies will have to pay. I am also assuming that the average figure will be more accurate than the median for purposes of estimating how much forfeited bail is owed.

According to the Public Policy Institute of California, the median bail amount in California is $50,000 – five times larger than the rest of the country. However, also according to the PPIC, average bail in California hovers around $33,000, with the most recently confirmed average being $32,000, calculated in 2012. For my estimate I will use the 2012 average bail amount with the assumption that it has not changed significantly in the last 4 years. According to the same PPIC study, California’s failure to appear rate is 6.6 percent across the board for all offenses.

A trickier figure to nail down is the rate of long-term fugitive status in CA.  The closest data point I found came from a study by Eric Helland and Alexander Tabarrok which states that at the national level – not California alone – 30 percent of failures to appear remain at large for over a year, thus becoming long-term fugitives. For lack of data particular to California, I will use this figure to help with my rough estimate. PPIC has calculated the rate of release on surety bond to be 21.1 percent. With these figures, we are finally ready to crunch an ugly number.

In 2014 there were 1,212,845 arrests in California. I will start with that number and assume 21.1 percent of those arrests result in financial release, getting us down to around 255,910 defendants released on commercial surety bond per year. Let us now assume that of this number, 6.6 percent of them fail to appear – giving us 16,890 failures to appear. Using the nationwide figure, for lack of data, let us further assume that 30 percent of those failures to appear remain at large for over a year, making them long-term fugitives. That gives us around 5,067 long-term fugitives per year whom we can assume had their bail completely forfeited – which means now the bond company is on the hook for that amount. With an average bail amount of $34,000, we can roughly estimate that bail companies should forfeit around $172,278,810 per year to California counties.

Compared to the oft-repeated figure of $150 million – a number that represents the accrued owed money over an unknown period of time – this is a staggering number. And although, as I have admitted, this estimate is very rough, at least one consideration should be discussed, and that is the long-term fugitive rate. Helland and Tabarrok stated that the 30 percent long-term rate is alarmingly high, and there is reason to think that California’s is much, much lower, especially considering the success of bail companies in California and their success at securing and returning defendants who fail to appear.

However, even if we assume the rate of long-term fugitive status is much lower, or halved, and even if we assume that most of those 21.1 percent who secure financial release are released via cash bail and not surety bond, we can still conservatively assume that bail companies are expected to pay California counties tens of millions of dollars per year in forfeited bail.

Do they? I will have to speak to bail companies and the county counsel of various counties to find out. My next post will examine whether either bail companies or individual counties are even keeping track of whether or not this money is being paid.

The Santa Clara County Bail Market

The Santa Clara Valley was once known as the Valley of Heart’s Delight because of its abundance of orchards, flowering trees and plants. While the valley is no longer known for its natural abundance, it does have an abundance of money and industry for those lucky enough to harvest. One such industry is the Bail Bond Industry. Their clientele: individuals desperate to get out of jail. Their attitude: focused on service, yet fiercely competitive. Their environment: open 24/7, day and night, ready to respond to your call.

Bail agencies are fruitful in Santa Clara County. Based upon analysis of monthly data posted online, Santa Clara County bail agencies posted 7,599 bail bonds to gain inmates their freedom in 2015. To “post bond,” the bail agency does not actually give the court any money. Instead, a bail agency hands to the court a bond (a promise) that they will pay the full amount of bail if their client skips town and does not show up to court. The 7,599 promises made last year amounted to a grand total of $198,068,815. Given that most bail agencies charge their clients non-refundable premiums anywhere from 8-10%, bail agencies made an estimated $15,845,505 to $19,806,881 from premiums in 2015. Sweet, sweet freedom.

Take a look at how the amount of bail bonds changed each month in 2015:

Monthly Bond Amounts for Bail Agencies2

The highest total number of bail bonds was posted in December. Apparently, Mama does want you home for Christmas. Interestingly enough, in my chat with one bail agent, she pointed out that November and December were some of the most difficult months for bail agencies, because Santa Clara County has a policy of releasing those with non-violent charges during “Amnesty month” as a courtesy during the holidays. This widespread release of inmates reduces the need for bail agencies to get people out of jail. However, looking at the numbers above, bail agencies look like they make their best numbers in December.

Analysis of the data also tells us that the mean bail amount posted was $26,065. The median bail amount was $15,000. This amount represents that the most common story is as follows: An inmate has their bail set at $15,000. They cannot come up with that amount of money, and so they pay a $1,500 premium to a bail agency in order to be released from jail. This story only makes sense if one considers the high cost of living in the Bay Area. To put this $15,000 amount in perspective, the median household income in Santa Clara County is $93,854. The median gross apartment rent is $1,637, totaling an amount of $19,644 per year. Imagine your household having to come up with $15,000 to bail someone out of jail. It’s almost like renting a whole other apartment for your family, for an entire year. $15,000 is a lot for the average person in Santa Clara County. It is no wonder why someone would turn in desperation to a bail agency for help.

One critique of the bail industry is that it hurts low-income clients. It is theorized that one way in which this happens is that bail agencies do not bother posting bail for inmates with low bail amounts. It may be more profitable for them to work only with those with higher bail amounts. This theory seems consistent with the numbers. Of the 7,599 bonds posted in 2015, only 289 of them were for less than $2,000 (3.8%).  The largest bail amount posted by a bail agency was $1,500,000, and the smallest was $100. Of the bail agents I’ve interviewed thus far, many also said that they would either 1) not bother with those with extremely low bail amounts, or 2) take them on but charge a minimum fee. This is because bail agents must pay their surety insurer a fee for every bail bond issued, and it is just not profitable to take on those with low bail amounts.

But back to that lovely $19,806,881 in premiums that bail agencies made last year. Sure, you say, that sounds like a lot of money, but what about the money that bail agencies lose to forfeitures? Bail bond forfeitures happen when clients fail to appear to court and the bail agency recovery agents are subsequently unable to find the person within 180 days. Forfeiture of a bail bond means that the surety insurance company that a bail agency works under must pay the court the full bail amount. Most bail agents that I have interviewed have said that bail forfeitures are rare, since their bail recovery agents are usually able track down those clients who failed to appear in court. Recovery agents are so effective, in fact, that one independent bail agent told me a story where he had been trying to find a client who had failed to appear to court for 6 months. Feeling frustrated, he finally hired a bail recovery agent to help him out. That agent found his client within half a day. The numbers confirm that forfeitures are relatively rare. In 2015, there were only 189 forfeitures of bail bonds that amounted to $3,395,000.

So can we say that bail agencies had a “loss” of $3,395,000 in 2015? Well, not exactly. A forfeiture must be paid to the court right away, but then a surety company can reimburse itself by collecting money from those who co-signed for the bond in the first place. Many bail agents I interviewed emphasized the importance of co-signors in their business. Some agencies require co-signors for almost every bail bond. Depending on the reliability of the co-signors, there may be a need for multiple co-signors. And for high bond amounts, there may even need to be collateral. Once bail has been forfeited, and the surety company has paid the court the full amount of the bond, you can be sure that they will then turn to the co-signors to pay up.

But pay up how much? Most co-signors think that if they helped pay a premium of $1,000 on a $10,000 bond, then when forfeiture happens, they will have to pay only $9,000. Not so. But according to the bail agents I’ve talked to, when a forfeiture happens, the surety company comes after the co-signor for the full amount of the bond: the $10,000. Something to keep in mind if your family member calls you from jail to help bail him out.

So it looks like it’s pretty sweet to be a bail agency. They get people out of jail, they make money on premiums, and they never really have to pay for forfeitures.

Let’s turn to the bail bond agencies themselves. Who are they? 100 different bail agencies posted bail in Santa Clara County in 2015. Of these, only 5 bail agencies made up 76% of the entire market: Aladdin Bail Bonds, All Pro Bail Bonds, Bad Boys Bail Bonds, Bail Hotline Bail Bonds, and LE Bail Bonds. These agencies dominated not only in the total monetary amount of bonds posted, but also by the number of bail bonds posted. Aladdin Bail Bonds in particular is dominating, with 32% of the market. As you can see below, the percentages of bond amounts and number of bonds posted for the most part mirrored each other.

Number of Bonds by numbersNumber of Bonds by money amount

Looking at this landscape of bail agencies leads us to one street in particular: North 1st Street in San Jose. The top four bail agencies are located here—as are many other bail agencies. LE Bail Bonds is located only 2 miles away. North First Street is prime real estate for bail agencies because of its proximity to the Santa Clara County Jail, located on Hedding Street. See the map below:

map

Bewildered family members of the incarcerated can leave the jail and stumble upon an abundant valley of bail agencies. These agencies are ready for your business.  In future posts, I will look at how exactly defendants and family members find bail agencies to work with, the competition between these agencies, and how they advertise.

 

Forfeiture in California: a $150 Million Dollar Question

Numerous articles over the years have thrown around a particular number– $150 million – the supposed amount of unpaid bail money owed to the state of California by various bail bonds companies. NPR reported, without attribution, that California bondsmen “owe counties $150 million that they should have had to pay when their clients failed to show up for court.” As it turns out, this number possibly represents the estimated amount of unpaid bail owed to Los Angeles County over a period of about 4 to 5 years according to one lawyer from an LA Times story published over a decade ago. The true amount of money owed to California counties is unknown, difficult to discover, and is possibly much more than $150 million. A lack of a concrete source or data for this figure reveals that it is speculative and unsubstantiated at best, and totally inaccurate at worst. A search for the figure on WestLaw in the context of California bail forfeitures yielded nothing. Preliminary research has also shown that the forfeiture processes used by counties to get the money owed to them are complicated and time consuming, which gives bonds companies an incentive to stall with litigation until the county essentially gives up. The LA Times article mentions this is as well as an eventually failed senate bill that sought to require the bond agency to place the bail money in escrow prior to a defendant’s release. What began as a simple search to fact-check a number has revealed a long-running controversy around the efficacy of counties securing bail money that is statutorily owed to them by bail companies when their client’s skip a hearing or proceeding.

I plan to contact and study particular counties – at least the most populous 10 – to find out how each county goes after the money it’s owed and whether or not each county knows how much it’s owed. This research will provide information and data that can inform policy decisions regarding the efficacy of money bail in California at the county level.

My name is Sean Reichhold and I am a 2L at Santa Clara Law. I’m a Bay Area native whose legal interests include criminal advocacy, policy, individual liberties. I’m also a trained journalist who loves research and debate.