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2015 The Al Neuharth Innovation in Investigative Journalism Award, Small Newsroom winner

Profiting from Prisoners

 

About the Project

In “Profiting from Prisoners,” reporters Daniel Wagner, Eleanor Bell and Amirah Al Idrus revealed how financial companies have become central players in a multi-billion dollar economy that shifts the costs of mass incarceration onto the families of prison inmates and helps private companies profit from these captive customers.

The series showed how prison systems, eager to reduce costs, have cut back on basic services such as providing winter clothes and toilet paper for inmates, leaving inmate families to meet those needs. That demand drives a hidden, billion-dollar pipeline of cash, facilitated by financial companies, flowing directly from relatives’ pockets to the coffers of prisons and the contractors they employ.

The reporters take the audience from the glitz of Miami Beach to the mountains of rural Tennessee, inside prisons, corporate operations and families’ homes, to reveal a deep, systemic problem: Prisons rely increasingly on exclusive deals with private companies that take money from inmates’ families, subsidizing essential corrections functions like substance abuse counseling and facility maintenance.

“Profiting from Prisoners” combines traditional investigative reportage with a sophisticated digital presentation, delivering intimate portraits of diverse subjects, including the executives and institutions involved in prison banking, as well as the inmates and families affected by it. The resulting feature combines text, photos, an infographic, curated artifacts and a 22-minute documentary. An animated sequence shows viewers how money is siphoned from families’ pockets, losing its buying power as vendors charge fees of up to 45 percent for transferring money and prisons mark up prices paid by inmates for toiletries and other necessities.

The first story details how one company, Miami-based JPay Inc., has created an efficient system for accepting payments and transmitting money into prisoners’ accounts that allows prison systems and private contractors to take a cut at every step of the way. This creates a strong incentive to charge high prices and fees to inmates’ families. The invisible tax strains already tenuous relationships with incarcerated relatives, a key issue in addressing recidivism.

The series’ second major story, based on previously undisclosed government documents, details multi-year, no-bid contracts granted to Bank of America and JP Morgan to provide financial and other services in federal prisons.

A third story found released inmates are burdened by heavy fees because their account balances are loaded onto prepaid debit cards that charge them to access their own money.

The series reached a vast audience and prompted swift, official action. CNBC produced a broadcast segment and online stories based on the reporting.

Other highlights include:
  • • The day after the story on federal prisons appeared, Treasury’s Inspector General launched an official audit of the no-bid deals.
  • JPay created a free way to transfer money for the families of 110,000 inmates in the four states that did not have such an option by eliminating fees for mailing a money order.
  • The New York State Department of Financial Services launched an inquiry of JPay’s consumer practices.
  • Sen. Charles Grassley, D-Iowa, wrote an open letter to the Treasury Department demanding details about its no-bid deals. His objections and the original findings were picked up by publications including The Hill and the Washington Examiner.
  • The San Francisco Chronicle and Des Moines Register published editorials decrying the abuses detailed in the series. Several other Gannett-owned papers republished the Register’s staff editorial.
  • Stories in the series climbed to the No. 1 most-read story on TIME.com and led that site for much of an afternoon, garnering a quarter-million hits in the first 48 hours after publication. One was voted to near the top the front page of Reddit for much of the day; another received 25,000 pageviews on The Daily Beast and received 12,000 on The Huffington Post. The project also received more than 72,000 pageviews on the Center’s own site.
  • The documentary was featured at the top of Upworthy and received more than 20,000 views on YouTube.
  • The series was included on must-read lists and roundups published by The New York Times, ProPublica, BuzzFeed, Bloomberg, Marketplace and POLITICO, among others.

The reporting team overcame substantial obstacles to tell the story. Wagner cultivated over two years a close relationship with Ryan Shapiro, CEO and founder of JPay, who invented the system that monetizes the flow of cash into prisons. Shapiro thus became a key source of information and insight and provided exclusive access to the company’s internal operations.

The team located families across the country, who were affected by these burdens, and persuaded them to speak publicly and on camera, despite the dual stigmas of incarceration and poverty. And, they gained access to a prison to interview an inmate candidly about the impact of practices that shift costs onto families.

Wagner also obtained Treasury documents outlining how millions of taxpayer dollars are spent on undisclosed, prison-related programs. Officials at first denied him access to much of the information, forcing him to rely on formal appeals and informal sourcing in a process that spanned more than three years.