The Baldwin County Commission approved a lucrative contract for inmate phone services with Global Tel Link Tuesday, a company recognized as the leader in the billion-dollar inmate telecommunications industry. But before it was purchased by investors and relocated to Virginia, the company had unscrupulous beginnings in Mobile when it was known as United National Telcoin and was operated by former Mobile County Commissioner Dan Wiley.
In 1999, Wiley and four business partners — including former state auditor Terry Ellis — pleaded guilty to federal charges including money laundering, mail fraud and tax evasion after the investment group that purchased the company discovered accounting irregularities. Prosecutors later revealed the company had been obscuring payments to its principals, padding inmate expenses and underpaying commissions to local governments. Wiley was sentenced to two years in federal prison while his partners received probation.
But under new ownership, Global Tel Link went on to thrive in the industry and controls more than half the market today, according to the Prison Policy Initiative. It has also faced criticism from consumer and civil rights advocates for inflating rates in state prisons and local jails.
In 2017, after the Obama administration imposed new caps on in-state rates, Global Tel Link won a lawsuit against the Federal Communications Commission (FCC) to prevent the caps. The legal victory came after Trump-appointed FCC Chairman Ajit Pai instructed department attorneys to drop their defense of the case, but it appears Pai has since reconsidered his stance on rate caps.
On July 20, Pai sent a letter to the National Association of Regulatory Utility Commissioners and Alabama Public Service Commission Chairman Twinkle Cavanaugh noting that on Aug. 6, the FCC will vote to propose lowering out-of-state rate caps from 21 cents to 14 cents per minute for debit, prepaid and collect calls from prisons and from 25 cents to 16 cents per minute for debit, prepaid and collect calls from jails.
But Pai also noted the FCC has no authority on in-state rates, where they “substantially exceed interstate rates in 45 states. Thirty-three states allow rates that are at least double the current federal cap, and 27 states allow excessive ‘first-minute’ charges up to 26 times that of the first minute of an interstate call.”
Pai argued the rates can disproportionately affect African American inmates and have been especially prohibitive during the pandemic.
“[Inmates’] need to stay connected is arguably greater than most, given the pandemic’s effect on correctional institutions, including in some cases the elimination of in-person visitation,” he wrote. “Communications services — and inmate-calling services in particular — may offer the only links the incarcerated have with the outside world. Yet high rates and charges for inmate-calling services can impede the ability of these individuals and their families to stay connected by making it prohibitively expensive for inmates and their families to stay in touch.”
Pai said unreasonable fees can have “devastating impacts” on the justice system, as “regular contact with family has been shown to reduce inmate recidivism, and children who stay in touch with an incarcerated parent exhibit fewer disruptive and anxious behaviors.”
For its part, the Alabama Service Commission did impose caps on intrastate calls from prisons and local jails in 2016, capping both prepaid and collect call rates at 16 cents per minute at jails the size of Baldwin County.
But since 2012, inmate telecommunications at the Baldwin County Corrections Center have been provided by Inmate Calling Solutions (ICS) LLC. In 2017, ICS won the previous bid with a proposed “cost recovery rate” of 84.5 percent for inmate phone calls, plus a $75,000 signing bonus and a $400,000 minimum annual guarantee to the county. ICS also provided a 50 percent cost recovery rate for inmate voicemail and remote video visitation.
As part of the contract, ICS charged inmates 25 cents per minute for collect calls and 21 cents per minute for prepaid calls. The cost recovery rate is essentially the commission paid to the county from each inmate phone call. The average daily population of the Baldwin County Corrections Center is between 570 to 620 inmates, although the population has been reduced during the pandemic.
In 2017, Sheriff Hoss Mack told the commission inmate phone services was “probably the biggest contract the sheriff’s office works,” and explained it typically draws competitive bids from several national companies. The previous contract also introduced video visitation, which Mack said could decrease the 90 to 120 visitors at the jail daily.
Records provided by the county indicate that between Feb. 1, 2019, and Jan. 31, 2020, inmates made a total of 384,219 calls from the Baldwin County Corrections Center on the ICS system, or about 1,052 calls per day.
The average call was about six minutes in length, and generated a gross revenue of $512,161. Of that, $431,310 was returned to the sheriff’s office account.
This year, Global Tel Link prevailed by bidding an 88 percent cost recovery rate, with a $150,000 signing bonus and a $550,000 minimum annual guarantee to the county. Inmates will be charged the same as the previous contract with ICS — 25 cents per minute for collect calls and 21 cents per minute for prepaid calls — although ICS submitted a bid this year to charge a flat rate of 21 cents per minute for all calls.
Under the terms of the new contract, Global Tel Link will have to generate roughly $38,000 in additional proceeds in order to meet the contractual minimum guarantee. With new restrictions on visitation due to the pandemic, Mack said this week “video and phone provide the inmates with more opportunities for contact. In addition those visits by video provide the visitor the convenience of not driving to Bay Minette and going through security.”
While he could not provide an explanation for the deviation from the Alabama Public Service Commission’s rate caps, Mack said “some sheriff’s offices bid direct” and the contract is a “tri-party agreement between us, the commission and the vendor.”
“We work through our commission,” he wrote.
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