COMMUNICATION SHAKEDOWN

MCI WorldCom and the state are raking in windfall profits from the captive customers in Missouri's prisons

Unlike the claims of savings aired on those 1-800-COLLECT television commercials, Janet Logan hasn't saved a buck or two. Instead, she's stuck. Every time she accepts a collect call from her husband, Marvin, she has no choice as to which phone company she uses or the rate charged. It costs her more than $3 — even if she talks for less than a minute.

On Christmas Day, for instance, Logan conversed with Marvin for nearly two hours. The collect call from Jefferson City cost $49.80. Her total MCI charges for the same month added up to $724.24.

Logan is one of thousands of Missourians who since 1995 have been forced to pay exorbitant rates to speak to family members incarcerated in state prisons. As a result of the five-year contract signed in 1995 between Missouri and MCI WorldCom, the two parties are projected to split nearly $82 million in revenues by next year, at the expense of some of the poorest families in the state. Under the provisions of its exclusive contract, MCI, the long-distance carrier, forks over more than half of its jailhouse tolls to the state of Missouri.

Late on a Saturday afternoon, sitting on the front steps of Immanuel Lutheran Church on the North Side, Logan contemplates the price she pays for staying in contact with her husband. She has to raise her voice to be heard over the drone of the diesel engine as her fellow riders file off a bus. They've just returned from a visit to the Algoa Correctional Center. All of the passengers are women. The 250-mile round trip takes 11 hours and costs her $25. The church offers regular transportation to Missouri prisons, including a charter to Algoa twice a month. The only other way in which Logan can communicate with her husband is by telephone — and only when he calls collect from one of the 69 pay phones at Algoa.

"How does it affect our family?" asks Logan. "For the last two weeks of the month, we don't call."

Logan is concerned that if she challenges the telephone companies or the Missouri Department of Corrections (DOC), there may be repercussions for her husband. "We have no control. We have no power," she says. "If you fight the system, stand up and say something, then the prisoners are the ones who get hurt.

"The Missouri Department of Corrections and MCI make a good team," says Logan, who works at Kmart. "Both of them are getting their backs scratched for providing the service. Nobody sees what goes on behind the door of people in prison."

In this case, however, the real cost extends beyond the prison walls to the families of inmates. Each time a prisoner dials up from one of Missouri's 19 correctional facilities, the party on the other end of the line must pay a $3 surcharge, if he or she chooses to accept the charges. The receiver of the collect call then pays a rate of up to 30 cents a minute.

For allowing MCI to lock up this market, the state takes a 55 percent commission on gross revenues generated by inmates using the 1,100 pay phones in state prisons. Last year, that percentage dumped an estimated $10.4 million into the state's coffers, according to the Missouri Office of Administration. In addition, the five-year contract stipulates that MCI give the state a $2 million bonus for renewing the agreement in each of its first two years and $1 million annually thereafter. By the time the five-year contract expires next summer, the state will have hauled in $45 million in commissions (from the $82 million in gross revenues), plus $7 million in bonus payments.

The projected revenue from the contract, which ends in mid-June next year, is based on the steady growth of Missouri's prison population, proving at least that crime does pay for Missouri and MCI. Moreover, unlike many other states, Missouri doesn't use this bounty to pay for prison programs but funnels those dollars to its general-revenue fund.

Since the 1996 deregulation of the pay-phone industry, MCI is no longer required to submit rate changes to the Missouri Public Service Commission. This lack of oversight appears to have also benefited the state. From fiscal year 1995 to fiscal year 1996, Missouri's prison-pay-phone commissions jumped from less than $1 million to more than $7.5 million. MCI records filed with the Office of Administration show that the state received a 25 percent commission in 1994. The state now receives more than double that amount.

The Missouri Office of Administration, which negotiated the pact with MCI, followed the lead of other states when it cut the deal to increase the commissions. "It was kind of a nationwide movement," says Richard A. Hanson, commissioner of the state agency. "It was money that otherwise went to the phone company." MCI may not be so likely to sign a similar contract the next time, says Hanson. "Our indications from looking at other states is that those kinds of commissions aren't being bid anymore. The phone companies probably decided they weren't making the money that they thought they would on those contracts."

As rates and revenues have increased, so has criticism. In 1997, the state of Florida found that MCI had overcharged for collect calls placed from prisons. The discovery prompted the Sunshine State to order the company to refund more than $277,000 to customers. In April, a dozen prisoners filed a federal class-action suit in Chicago against MCI and other telephone companies that provide prison-pay-phone service in Illinois. A similar case filed in Kentucky last fall is pending. Included among the defendants in that suit are MCI and the Missouri DOC. The Illinois and Kentucky suits both allege that prisoners' families are being unfairly overcharged for telephone service.

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