Coming out of hiding to link to three articles on Billings Municipal Court and its supervised probation and pre-trial supervision practices. The first attempts to give a big picture overview. The second focuses on one person who was subjected to the injustice of pretrial supervision for a misdemeanor DUI charge. And the third examines who is making money from the court’s regular practice of requiring citizens to pay for “supervision” for a multitude of misdemeanor offenses.
When you make money from court-ordered supervision and punishment, is there such a thing as a “fair” profit? If so, how much is too much before your profits become unconscionable?
In Mountain Peaks Inc. v. Greg Pohle and Adam Flores, decided Sept. 29, 2006 in Billings, MT, a jury awarded Mountain Peaks (MPI) $154,596 in compensatory damages and $30,000 in punitive damages after MPI claimed that “Phole and Flores wrongfully conspired to commit fraud and business interference and breached their duties of good faith and loyalty.” MPI contracts with the city and county to provide probation services, drug testing, electronic monitoring, and anger management classes for people charged and/or convicted of misdemeanors in Yellowstone County Justice Court or Billings Municipal Court. Apparently, Phole and Flores were employees of MPI up until the end of September, 2005, at which point they quit their jobs and immediately started up a competing probation services provider called Community Solutions, Inc. (CSI). On Phole’s and Flores’ last day of work at MPI, Municipal Court Judge Knisely transferred 110 probationers from MPI to CSI, claiming the move was “in the interest of justice and community safety.”
A third company, Alternatives, also competes with MPI for probationers from the city and justice courts in Billings. Unlike MPI and CSI, Alternatives is a non-profit organization.
MPI had requested up to $453,825 in compensatory damages, an amount it claimed was equivalent to 7 years of lost net profits. That comes out to just under $65,000/year in profit for MPI, and presumably, that’s only the profit it would have made from the clients that CSI took. MPI claimed that prior to the formation of CSI, MPI had 150-160 clients, 90% of them from Municipal Court. That means that CSI took about 2/3 of MPI’s business, meaning that MPI’s annual net profit prior to the formation of CSI must have been closer to $100,000. Perhaps that explains why CSI is claiming it can satisfy the $180,000 judgment and still stay in business. Apparently there’s a lot of money to be made in probation, drug testing, electronic monitoring, and anger management classes.
What’s most disturbing about these numbers is that probably 99% of that profit is coming from indigent defendants, many of whom can’t even afford rent, let alone supervision and drug testing fees. It seems to me that those probationers should never have to pay more than the actual cost of their court-ordered “services.” And if they are going to pay anything above cost, it should go back to the taxpayers rather than into the pockets of private individuals.
This is especially true with regard to those who are awaiting trial. Yes, a healthy portion of the business CSI and MPI are getting from Billings Municipal Court is coming from court-ordered pre-trial supervision. That means that people who have not been convicted of anything and who have only been accused of a misdemeanor are paying hundreds of dollars a month for the privilege of being out of jail while they await their trial.
In the comments on the Billings newspaper’s coverage of the trial, several people noted the large amounts of money involved. Commenter “CSI: Billings” wrote:
What is interesting is what is happening behind the scenes in open court before the good Judge Knisely. Virtually no one charged with a misdemeanor escapes pre-trial supervision or misdemeanor probation with one of these companies. Judge Knisely is not a part of the conspiracy! What about the kick backs from these companies to the City Court for “administrative fees”? What about City Court bringing in a million + $$$$ to the city coffers last year in fines? What about Mountain Peaks and CSI Billings making profit off of people who are in trouble and revoking them from probation when they cannot pay their supervision fees? What about the fact that Mountain Peaks (a for profit company) charges $150 a month for pre trial supervision and Alternatives (a non-profit company) charges $50 per month but the Defendant is not given a choice which company to go to by the good judge? Yeah, your right Judge Knisely you are not part of the conspiracy. . . you run it.
I have no idea who “CSI: Billings” is or whether his/her facts and figures are precise (except for the $100 difference in pretrial charges, which I can verify is accurate), but he/she certainly raises issues that beg more attention from the defense bar and the public, as well.