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Detroit Pistons owner Tom Gores speaks about controversy over Securus

Detroit Free Press, Feb. 4, 2021. https://www.freep.com/story/sports/nba/pistons/...

Kelly Schaeffer worries there might come a time when she can't afford to talk to her teenage son in jail. 

The 44-year-old mother estimates she spends $100 a month for her son to call her every other day from the Muskegon County Jail, which contracts with Securus Technologies to provide telecommunication services. Schaeffer says these conversations are central to maintaining their connection as her son serves a year-long jail sentence. 

Schaeffer was laid off and out of work for most of the pandemic and managed the cost of calls on her husband's salary. But at $3.15 for a 15-minute call, plus fees to add money to her prepaid account and to accept collect calls from time to time, the charges add up fast. Schaeffer said she recently found a job, but money is still tight. 

“He's an 18-year-old kid, how do you tell him he can't talk to you?” said Schaeffer, who lives in Muskegon. 

It’s a question people across the country face each day as they try to juggle the sometimes exorbitant prices that prison telecom companies charge to talk to loved ones behind bars.  

It’s also a question criminal justice reform activists have directed to Detroit Pistons owner Tom Gores, whose private equity firm owns Securus. Gores’ firm, Platinum Equity, purchased Securus in 2017, joining a $1.2 billion prison telecom industry that makes its money from incarcerated people and their families. 

Gores’ status as a billionaire owner of an NBA team has turned him into a lightning rod for criticism in a broader battle for accountability and reform in prison telecommunications. The industry is contract-driven, incentivizing high prices and offering no alternatives to families who pay for calls. Some prisoner advocates have juxtaposed Gores' public support for the political activism of his mostly Black team with Securus’ investment in mass incarceration, often at the expense of low-income Black and brown people.  

New York-based advocacy nonprofit Worth Rises is collaborating with Michigan social justice organizations to raise awareness about the connection between Gores and Securus, and more broadly, to address the cost of calls in the state. 

This comes after Worth Rises ran a full-page ad in the New York Times promoting a petition calling on the NBA to force Gores to sell the Pistons because of his investment in Securus. “If Black Lives Matter, What Are You Doing About Detroit Pistons Owner Tom Gores?” read the message to NBA commissioner Adam Silver and the league's 30 other owners. 

The ad was one in a series of escalating steps activists have taken to draw attention to Gores and Securus. In September, a letter calling Gores a “prison profiteer” demanded his removal from the Los Angeles County Museum of Art (LACMA) board of trustees. It received support from more than 200 artists and community members. Gores stepped down from the board in October.  

After the LACMA campaign, Gores said in a resignation letter that he didn’t know Securus would become a “nexus for addressing the political, social, racial and economic issues roiling America today.” He has described himself and Platinum Equity as “change agents," saying they're looking for places to cut call rates and provide resources to formerly incarcerated people.   

In an interview with the Detroit Free Press, Gores said Platinum Equity purchased Securus because the firm viewed the company as a "sound investment." Now, he says he doesn't think private companies should run the prison telecom industry.

"Ultimately, I think this industry really should be led probably not by private folks. I think it probably should be — I'll get killed for saying this — but the nonprofit business, honestly," he said. 

Gores has said he has a responsibility to bring change to an industry that needs it. While some activists remain skeptical, Gores’ actions have garnered cautious praise from some prison reform advocates and from the National Basketball Players Association.  

In a statement provided to the Free Press, the NBPA said executive director Michele Roberts engaged in discussions with Gores, members of Securus' management team, Pistons team officials, NBA representatives and several social justice organizations working with Securus. 

"Thus far, we are encouraged by the efforts to reform by Securus and its pledge to become a leader in rectifying the gross operation of communications systems servicing our incarcerated citizens — as well as other initiatives it has launched in support of reentry by returning citizens," the NBPA said. "Continued discussions with Securus include what role both the League and the NBPA might play in further facilitating the changes necessarily made in this space."

Color of Change, a civil rights nonprofit that initially joined Worth Rises in taking an adversarial approach against Securus and Gores, started collaborating with Securus on the company’s reform strategy in December. 

“I think I understand, having spoken to him and his team, that he's learned a lot in this process and wants to come out of it as someone who is contributing in a more positive way,” said Scott Roberts, senior director of criminal justice campaigns at Color of Change. “So I think he has an opportunity ... to show what change looks like, not just for this sector or for criminal justice, but also for himself. And as a business leader, he can talk about what he's learned in this process and share.” 

The Free Press talked to Gores, Securus executives, activists, people who have been incarcerated and families about Gores’ role in the prison telecom industry, and the adjustments needed to sustainably change a company that critics say has long been a "bad actor."

At its core, Platinum Equity’s business model, like all private equity investment firms, revolves around purchasing underperforming companies and eventually flipping them for profit.  

Platinum Equity, which owns about 40 companies, finalized its $1.6 billion acquisition of Dallas-based Securus Technologies in November 2017. Securus serves about 1.2 million people in more than 3,400 jails, prisons and police lockups across the country. Combined, Virginia-based Global Tel Link and Securus made up at least 73.5% of the market based on the number of incarcerated people subject to the companies’ contracts as of 2017, according to an analysis by the Prison Policy Initiative. 

Securus contracts with 39 county jails in Michigan. Call rates vary per contract, but families say they shell out as much as several hundred dollars a month to stay in touch with their loved ones behind bars.

Families are held captive, advocates say, to contracts struck between jails and Securus. Paul Wright, founder and executive director of the Human Rights Defense Center, said that if he's having issues with Verizon, he has the freedom to switch to a different service, such as AT&T or Sprint. Families who deal with prison telecom companies can't change providers, Wright said, and the lack of competition in the space encourages higher rates 

“I call it the ‘love tax,’ because, basically, if you don’t have anyone who loves you or likes you enough to want to stay in touch or communicate with you, it doesn’t affect you,” Wright told the Free Press. 

Chabbu Owens, 49, estimates he spent $3,000 on calls in five months in late 2019 and early 2020 when he was held in Jackson County Jail, which contracts with Securus. He made calls daily to take care of his obligations as a father and owner of a rental property business.

"Life didn’t stop because I was in jail," said Owens, who lives in Jerome.

These costs can force families to choose between supporting an incarcerated relative and meeting their own basic needs, researchers say. 

One in three families surveyed for a 2015 report by the Ella Baker Center for Human Rights said paying for phone calls and travel expenses for visits with an incarcerated loved one drove them into debt. This financial burden overwhelmingly falls on women. When family members were responsible for phone and visitation costs, 87% were women, the report said. 

About half the people in Michigan’s 80 jails are awaiting trial. Amanda Alexander, founder and executive director of the nonprofit law firm the Detroit Justice Center, said people are often making calls from jail to coordinate care for their kids, connect with their attorneys and arrange bail money.

“The fact that we make this harder for people instead of easier is just so cruel and counterintuitive,” said Alexander, who surveyed local families for the Ella Baker Center for Human Rights report.

Detroit resident Lorindas Noel said he limited his calls home from the Jackson County Jail to the most pressing circumstances — such as updates about his legal case — because he didn’t want to divert money away from his family’s needs like bills and child care. He said he went several months at a time without talking to his kids, who were 4 and 5.  

“So when it came to recitals and school events, if they was doing good in school or sports, if they was having trouble without me being there, I missed out on all of that. I wasn’t able to really call,” said Noel, 35, who was jailed in 2016 and 2017, before Gores’ firm purchased Securus.  

Securus says it has reduced the average cost of calls by 30% and plans to further reduce the average cost by an additional 15% over the next three years. 

In Michigan, some of the most exorbitant in-state call rates have fallen in recent years. The highest rate for a 15-minute call with Securus was $22.56 in 2018, according to the Prison Policy Initiative. 

Now, the highest cost of a 15-minute call using Securus in Michigan is $14.77, plus any applicable taxes and fees, according to calculations using the company's rate calculator. The lowest rate is $3.15.

The nationwide average cost of a 15-minute Securus phone call is $2.25, according to Joanna Acocella, vice president of corporate affairs for Securus. 

An example of extreme pricing can be found in Texas.  

Krishnaveni Gundu, co-founder and executive director of the Texas Jail Project, a nonprofit that advocates for incarcerated people, provided the Free Press with screenshots of a receipt from November showing Securus charged $9.15 for a 20-second voice message and $9.59 for an 88-second voice message from jail in Brazoria County, south of Houston. 

“The whole environment is coercive, exploitative, predatory,” Gundu said. 

Securus said the charges topping $9 for the voice messaging product Gundu referenced are atypical. The average cost was about $3.68 in November, Acocella said.

Acocella said a commission to the corrections agency and a higher-than-average first-minute rate, as well as a transaction free to Securus, were included in Gundu’s example, per the company’s contract in Brazoria County. In response to questions from the Free Press, she said the company was assessing whether it can lower the transaction fee.

The FCC caps the rate of calls from jails and prisons to another state at 21 cents a minute for prepaid calls and 25 cents a minute for collect calls. The FCC does not regulate the price of calls within a state. There doesn't appear to be oversight of intrastate calls in Michigan jails. They're not regulated by the Michigan Public Service Commission or the state Department of Corrections. 

Using online calculators and rates provided by five companies, the Free Press totaled the cost of 15-minute calls to Detroit from 63 county jails. Prices ranged from $2.70 from the Kalamazoo County Jail, which contracts with Telmate, to $16.50 from Berrien County Jail, which uses GTL. Rates can differ depending on the time of day, the location of the number called and payment method. Costs can be subject to fees and taxes that companies typically don't disclose on online calculators. 

Fifteen-minute calls from the Michigan Department of Corrections, which contracts with GTL, cost $2.40.

Securus executives say they have eliminated what they describe as “outlier” rates — calls that cost more than $15 for 15 minutes — through negotiations with correctional institutions. That figure doesn't include fees for loading money onto an account or fees applied to single calls when the user doesn't have an account to pay for multiple calls. Single-call transactions make up roughly 7% of all calls, Acocella said.

Securus President and CEO Dave Abel told the Free Press that lowering rates that exceeded $15 for 15 minutes is “a starting point” and that the next step in lowering costs will be evaluating calls with high rates for the first minute. 

“As soon as you eradicate an outlier rate, you start looking for the next outlier rate,” he said.

Still, some advocates question Platinum Equity's commitment to reform after the company attempted to acquire San Antonio-based ICSolutions — the third-largest prison telecom company, according to the Prison Policy Initiative — not long after purchasing Securus. The merger fell apart in April 2019, after the FCC and the Department of Justice’s Antitrust Division signaled that they would block it because of competition concerns.  

The failed acquisition helped to spark a broader dialogue between Gores, Securus and activist groups, said Bianca Tylek, executive director of Worth Rises. 

“It was at that point that Tom’s shop really started to take this more seriously,” said Tylek.

In a letter penned to Platinum Equity in March 2019, Worth Rises urged the company to divest from Securus by the end of 2020. The letter also included a list of "operational reforms" intended to reduce the cost of Securus' services across the board. 

Talks between Worth Rises and Platinum Equity eventually broke down, leading the nonprofit to organize the LACMA campaign and the ad in the New York Times.

Tylek said Securus' efforts to lower costs aren't aggressive enough and that she remains skeptical about Platinum Equity's intentions because, ultimately, as a private equity firm, it would want to sell Securus at a profit. 

Some signs of support 

Even before activists brought the battle against Securus to the NBA's doorstep, Platinum Equity's ownership of the company garnered negative attention. 

One notable example was in August 2019, when the Pennsylvania State Employees’ Retirement System (SERS), one of Pennsylvania's two major pension funds, declined a $150 million investment in a Platinum Equity fund because of Securus. 

During the meeting with Platinum, SERS board chair David Fillman questioned whether the equity firm had properly evaluated the "political risk" that came with purchasing the company, given that Securus had long been a target for activists. Tylek and Worth Rises led a campaign to inform SERS about Securus ahead of the meeting. 

"I’ve been on this board for about 20 years, and I have never seen the amount of negative press on a firm that I’ve got sitting before me today," Fillman said during the meeting, referring to Securus. 

Gores, who has pledged to reinvest all of his eventual profits from Securus into the company’s reform efforts and other anti-recidivism causes, told the Free Press that he initially didn't realize the depth of change that would be required when Platinum Equity purchased the company.

The FCC caps the rate of calls from jails and prisons to another state at 21 cents a minute for prepaid calls and 25 cents a minute for collect calls. The FCC does not regulate the price of calls within a state. There doesn't appear to be oversight of intrastate calls in Michigan jails. They're not regulated by the Michigan Public Service Commission or the state Department of Corrections. 

Using online calculators and rates provided by five companies, the Free Press totaled the cost of 15-minute calls to Detroit from 63 county jails. Prices ranged from $2.70 from the Kalamazoo County Jail, which contracts with Telmate, to $16.50 from Berrien County Jail, which uses GTL. Rates can differ depending on the time of day, the location of the number called and payment method. Costs can be subject to fees and taxes that companies typically don't disclose on online calculators. 

Fifteen-minute calls from the Michigan Department of Corrections, which contracts with GTL, cost $2.40.

Securus executives say they have eliminated what they describe as “outlier” rates — calls that cost more than $15 for 15 minutes — through negotiations with correctional institutions. That figure doesn't include fees for loading money onto an account or fees applied to single calls when the user doesn't have an account to pay for multiple calls. Single-call transactions make up roughly 7% of all calls, Acocella said.

Securus President and CEO Dave Abel told the Free Press that lowering rates that exceeded $15 for 15 minutes is “a starting point” and that the next step in lowering costs will be evaluating calls with high rates for the first minute. 

“As soon as you eradicate an outlier rate, you start looking for the next outlier rate,” he said.

Still, some advocates question Platinum Equity's commitment to reform after the company attempted to acquire San Antonio-based ICSolutions — the third-largest prison telecom company, according to the Prison Policy Initiative — not long after purchasing Securus. The merger fell apart in April 2019, after the FCC and the Department of Justice’s Antitrust Division signaled that they would block it because of competition concerns.  

The failed acquisition helped to spark a broader dialogue between Gores, Securus and activist groups, said Bianca Tylek, executive director of Worth Rises. 

“It was at that point that Tom’s shop really started to take this more seriously,” said Tylek.

In a letter penned to Platinum Equity in March 2019, Worth Rises urged the company to divest from Securus by the end of 2020. The letter also included a list of "operational reforms" intended to reduce the cost of Securus' services across the board. 

Talks between Worth Rises and Platinum Equity eventually broke down, leading the nonprofit to organize the LACMA campaign and the ad in the New York Times.

Tylek said Securus' efforts to lower costs aren't aggressive enough and that she remains skeptical about Platinum Equity's intentions because, ultimately, as a private equity firm, it would want to sell Securus at a profit. 

Some signs of support 

Even before activists brought the battle against Securus to the NBA's doorstep, Platinum Equity's ownership of the company garnered negative attention. 

One notable example was in August 2019, when the Pennsylvania State Employees’ Retirement System (SERS), one of Pennsylvania's two major pension funds, declined a $150 million investment in a Platinum Equity fund because of Securus. 

During the meeting with Platinum, SERS board chair David Fillman questioned whether the equity firm had properly evaluated the "political risk" that came with purchasing the company, given that Securus had long been a target for activists. Tylek and Worth Rises led a campaign to inform SERS about Securus ahead of the meeting. 

"I’ve been on this board for about 20 years, and I have never seen the amount of negative press on a firm that I’ve got sitting before me today," Fillman said during the meeting, referring to Securus. 

Gores, who has pledged to reinvest all of his eventual profits from Securus into the company’s reform efforts and other anti-recidivism causes, told the Free Press that he initially didn't realize the depth of change that would be required when Platinum Equity purchased the company.

Michigan Sheriffs' Association Executive Director Matt Saxton, former sheriff of Calhoun County, said commissions on phone contracts typically flow back into the jail to fund upkeep, improvements and programming.  

“You don’t just open a jail and it supports itself,” he said, adding: “The phone companies make a majority of that money.”

Gores and Barnhill say 60% of the costs of jail telecom services go to site commissions. Individual agreements between jails and telecom providers determine who benefits more. 

The Bay County Sheriff's Office said its Securus contract generated $66,579 in revenue from phone usage, tablets, video and eMessaging in 2020. The Sheriff's Office takes an 85% commission on gross revenue from calls, according to a contract provided under a Freedom of Information Act request. The jail's administrator said the most revenue comes from tablets and helps to cover things like mattresses, hygiene items, clothing and utilities at the jail.  

Washtenaw County in recent years lowered its commission percentage from 57% of gross revenue from calls to 35%, according to contracts. Sheriff Jerry Clayton said the majority of money generated from phone calls funds telecom operations at the jail. 

All calls from the Washtenaw County Jail cost 21 cents a minute, or $3.15 for 15 minutes. In its latest contract negotiation, the sheriff's office eliminated a $4.25 connection fee that was applied to calls without a prepaid account, Clayton said.

"Part of how people successfully navigate the impact of being in jail is family support, and to disconnect them from their family even on a phone call, I think it's harmful. So we try to be cognizant of that," he said.  

In two jurisdictions, New York City and San Francisco County, local governments have picked up the tab for calls from jail. 

Advocates and community organizations led the push for free calls in New York City, a jail system that contracts with Securus. The city council in 2018 passed a bill to make all domestic calls free to incarcerated people and their families, eliminating $5 million in annual revenue. San Francisco County, which contracts with GTL, followed in 2020.

Free calls in Michigan would require a lot of political will, said Alexander of the Detroit Justice Center, who added that she hopes a greater level of awareness about the industry’s practices will lead to public pressure and, ultimately, policy change.  

“And in the meantime, we have to absolutely shame those who are profiteering off of this,” said Alexander, whose nonprofit law firm law last year turned down a potential partnership with the Pistons over Gores’ ownership of Securus.

Plan to divest

Officials with Gores’ firm told the Free Press that Platinum Equity’s plan has always been to do what activists are calling for — sell Securus.  

As part of their reform strategy, the goal is to sell to a company or individual that will continue the work that’s been done. The path to exit “runs through reform,” Barnhill said, though it isn’t yet clear when Platinum Equity will sell the business. He also said that Platinum Equity will not make additional investments in the prison industry, an agreement that both Worth Rises and Color of Change have pushed for.  

When asked about activists who say that his role with Securus makes him unfit to be an NBA owner, Gores said that owning both the Pistons and Securus aren't competing agendas. He believes they're complementary. 

Gores said he hopes to have a positive impact on the industry and that his role in changing Securusis in line with his approach with the Pistons and with his philanthropic and social justice efforts in Michigan. Gores, who grew up in the Flint area, has donated and raised millions of dollars to help residents and small businesses in the wake of the city's water crisis. Last summer, before the Pistons marched with activists in Detroit to raise awareness of the killings of Breonna Taylor, George Floyd and Ahmaud Arbery, Gores released a statement pledging to facilitate healing and change. The Pistons also turned their practice facility into a satellite center for the Nov. 3 election. 

"It's maybe one of those things that doesn't look great, but we all know that it doesn't matter how it looks," Gores said. "We actually can make more change." 

Activists told the Free Press that as long as there's a profit motive in the prison industry, there will always be incentives that encourage mass incarceration. Alexander said that she won't partner with the Pistons until Securus is sold.  

Roberts, the Color of Change campaign director, said it could be a challenge to ensure Securus’ future owner doesn’t reverse reforms. But he said it’s best that Platinum Equity exits the industry. While Gores has positioned himself as a positive force, there’s concern about the implications of a billionaire embracing the role of a prison reformer. 

"We feel that it's important that Platinum Equity exit because they are such a high-profile investment company,” Roberts said. “And we think it’s important that we don't create a situation where people think that there’s a business model of getting into the business of incarceration and trying to present yourself as a reformer. I think Platinum Equity got themselves into the situation unintentionally. And I think that's why they should exit the industry. They should exit intentionally, given how they got into it.” 

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