Variations on a Theme by Ferguson

As I think I’ve mentioned on this humble blog before, the most interesting part of the U.S. Department of Justice report on the Ferguson, Missouri riots was not the racial aspect of what the Ferguson police department were or weren’t doing (and certainly not the conclusion that the officer was perfectly justified in shooting dead a violent felon who’d already made one attempt to seize the officer’s weapon and use it again him).  It was the degree to which Ferguson monetized its city court system and by extension its criminal law powers.

We are now seeing a variation on that theme, except that now we’ve got two rent-seekers fighting over the spoils.  “Rent-seeking” is what economists call the practice, as phrases it, of “seeking to increase one’s share of existing wealth without creating new wealth.”  Among the most egregious rent-seekers are (i) government at all levels, and (ii) lawyers.  I still recall hearing a fellow lawyer gloating over some peculiarly ill-advised statute which our state legislative assembly had passed, with specific emphasis on what a boon it was going to be for lawyers such as himself.  It made for depressing listening, the more so when I considered that he was correct.  That statute was going to generate untold extra business for lawyers in situations where the world just doesn’t need lawyers to be mixed up in them.

There is a company in Utah, Corrective Education Company, which markets its services to retailers.  For retailers, Gentle Reader should understand, shoplifting is a non-insurable risk.  That means that when someone steals from them, they either get it back themselves or they eat the loss.  It is part of the reason that, as the (true) saying has it, “The poor pay more.”  They do.  They do that because in poor neighborhoods losses to shoplifting are greater, the margins are thinner, and the money to cover the losses has to come from somewhere.  So it comes from everyone paying more for the same product.

What Corrective Education Company (CEC) does is a species of what is known in civil litigation as “alternative dispute resolution,” or ADR.  The point of ADR is resolution of civil disputes is that it is faster that a full trial and the results are less subject to judicial screwing-up.  It is phenomenally popular among economic actors whose business existence is exposed to repeated risk of litigation.  CEC has taken that same concept and is applying it to criminal offenses, specifically shoplifting.

What happens is that when a perp gets caught shoplifting from a CEC client, he is offered a choice:  He can have them turn him into the police for criminal prosecution, or alternatively he can sign an admission of what he did, then go through what CEC promotes as a “life skills” course the point of which is to impress upon the perp why it’s not a good idea to be a criminal and some degree of how to avoid staying a criminal.  And the perp pays CEC, roughly $500 or so.  Some portion of that money goes to the victim, but most of course stays with CEC.  Oh, and by the way, the perp doesn’t end up with a criminal record.

This idea has sparked outrage from entirely predictable quarters.  Remember Ferguson?  Well, there is an entire host of players who feed off the criminal justice system.  Police, prosecutors, court staff, judges, and then the whole tail-end process — the probation services companies (many if not most cities contract that out, either to private operators or to larger government entities, like the state itself), drug testing companies, counselors, and other busy-bodies.  The perps pay for them too, by the way, through the assessment of court costs, fines, and fees for all those private probation service companies, drug testing companies, counselors, and other busy-bodies.  Those outfits sure as hell don’t work for free, and the taxpayers have no interest in funding them.

What made the Ferguson system so pernicious, and I can vouch that their offense was distinct only in degree, not in kind, is that when the perp who’s copped a plea so that the prosecutor and police can tick that box off as being a closed case can’t find a job because of a criminal record, or can’t hold a job because its attendance requirements are inconsistent with having to run down to his probation officer every week or however often, and so can’t pay his court costs, fines, and fees, or he’s just not making enough money to pay them, he gets cycled back through the process, spending time in jail on the way (so he loses what job he had, and now can’t pay those court costs, fines, and fees), and on and on.  Plus, he’s now got a criminal record.

By the way, the court costs, fines, and fees for even a misdemeanor offense are uniformly a helluva lot higher than $500.

At any rate, in California (Gentle Reader knew that was coming, right?), the San Francisco city attorney has sued CEC, alleging that what it’s doing is extortion, false imprisonment, and so forth.  The case was filed back in November, 2015; I just saw a television news report of it yesterday on my way through a room where a television was on.  So I decided to see what I could find out about it.  Here’s the Los Angeles Times write-up, complete with link to the complaint filed.  And here Reuters, and SFGate, with their respective write-ups.

Let’s get an idea of the scope of the problem, from the LAT:  “Last year alone, retailers lost $44 billion to theft by shoplifters, employees and vendors, according to a national retail security survey. The CEC founders have said their ‘vision is to reinvent the way crimes are handled, starting with retail theft.’”  Forty-four billion dollars literally walking out the door.  Mind you, that’s not breaking-and-entering, or hijacking the trucks carrying product.  That’s broad-daylight theft.

Now let’s hear from the city attorney who’s filed the suit:  “But the civil lawsuit, filed in San Francisco County Superior Court, calls the tactics ‘coercive’ and ‘deceptive’ and says the program ‘has not been approved by any California court or prosecutor.’”  Well, of course it’s not been “approved”; this is a competitor to the other side of the criminal law industry.  They’re offering first-time perp a roadway out of his pickle for $500 and six hours pissed away in a seminar.  Versus dozens of hours spent with police, prosecutors, waiting around at cattle-call court dockets, then many hundreds of dollars in court costs and fines, followed by several thousand dollars to some private probation supervisor and drug-screening company (along with the hundreds of hours pissed away dancing attendance upon them).  Whom, exactly, does Gentle Reader think the owners, management, and employees of these third-party providers support come election time?

Even more to capture the motivation behind this lawsuit, here’s a longer extract from the LAT article:

“But legal experts said that particularly in California — where Proposition 47 has made petty theft a misdemeanor — it is unlikely that police and prosecutors would have pursued it.

That makes the threat of referral for prosecution problematic, said Stanford Law School professor Joan Petersilia, who with her students is surveying the increase in diversion programs — some of which partner with for-profit companies — that have resulted from shifts in California criminal justice policy.

Petersilia called CEC’s tactics ‘just so obviously wrong’ and said they do not fit the philosophy of restorative justice, which is based on empathy for the injured party and a solution that repairs the harm.

Most of the money under this model goes to CEC, not to the retailer or injured party, she said, adding that for those with money, it is not punitive enough, and for those without, it is unduly harsh.”

“Just so obviously wrong”; that is a characterization for use by someone who doesn’t really have an argument that will stand up against being pushed against.  What is the “tell” (to use a poker expression) for what is really going on here?  It’s in the bland phrase “increase in diversion programs — some of which have partnered with for-profit companies — that have resulted from shifts in California criminal justice policy.”

This is nothing more than a fight over the money that can be extracted from petty criminals.  Remember that, for starts, such crimes are at the bottom of just about every prosecutor’s priority list.  That’s just a fact of life, both for economic and political reasons.  No district attorney has a budget that will permit him to go hammer-and-tongs after every petty thief.  No district attorney won or kept office on a campaign platform of cracking down on the gal grabbing a lip-stick on her way out the door.

Most important to remember, in deciding how vigorously to wring one’s hands at the horrors of these perps getting nabbed not by the constituted authorities but by their own victims, is that even when they are prosecuted,  all that money in court costs, fines, and fees to those “diversion programs — some of which have partnered with for-profit companies” also does not go to “the retailer or injured party” either.  It sticks with the court officials, with the penal system, with those “partners” of the criminal legal system.  So Ms. Petersilia’s crocodile tears don’t move me much.

I long ago abandoned using the expression “justice system.”  No, what we have is a legal system.  In fact, it is more properly characterized as an industry.  It feeds multiple actors, some governmental, others private.  But what they all have in common is that they all pay their home mortgages, put tires on the car and shirts on their kids’ backs off the proceeds — we may call them the back-end proceeds — of crime.  They have livelihoods for so long, and only for so long, as an endless stream of perps is dragged through a legal system which is tailor-made to extract the maximum amount of cash from them for the minimum input in time.  Take away that cash and they’ll have to go get jobs and convince others to do business with them.

CEC is neither more nor less than threatening the rice bowl of an entrenched cadre of rent-seekers.  And so I have zero sympathy for their plight.