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Crackdown on inmate asset loophole draws pushback from Dems

In their hurry to reform prison accounts so that wealthy debtors cannot exploit them, authorities may also punish a poorer class of inmates.

WASHINGTON (CN) — A group of Senate Democrats sounded the alarm Tuesday about proposed changes to a law governing the financial obligations of federal prison inmates, telling the Department of Justice that lower-income individuals may bear the consequences disproportionately.

The proposed changes are aimed at updating the provisions of a debt repayment program offered to federal inmates, known as the Inmate Financial Responsibility Program. The agency first set out to adjust its regulations for the scheme in 2021, aiming to prevent wealthy inmates from using prison financial accounts to stockpile large sums of money that could otherwise be used to pay off debt.

In their January proposal, the Department of Justice suggested removing a provision that requires inmate accounts to always have a balance of at least $75. The idea for this was so that inmates could pay for phone calls with family members, but the Justice Department questions the need for such a requirement when the Financial Responsibility Program now contains safeguards to ensure inmates can make regular phone calls.

Members of the Senate Judiciary Committee questioned that reasoning Tuesday in a letter to Attorney General Merrick Garland.

“We have serious concerns that the proposed rule would further marginalize the vast majority of incarcerated individuals who are indigent and would create additional barriers to successful reentry,” Senator Dick Durbin, a Democrat who chairs the panel, wrote in the letter co-signed by Senators Sheldon Whitehouse, Cory Booker and Chris Coons.

The Justice Department’s justification for axing the account minimum provision — that inmates are allowed one collect call per month and that the government may pay for additional phone use under certain circumstances — are not enough to ensure that incarcerated people can communicate with their families, the senators contend.

Allowing inmates to speak regularly with their family members improves the likelihood that they will successfully reenter the community, the lawmakers said. “Given this important interest, the elimination of a minimum reserve in an inmate account is unwise.”

Durbin’s coalition also took issue with the Justice Department’s proposal that inmates participating in the debt repayment program must put up to half of the funds they earn working in prison toward settling outstanding expenses. The proposed rule would mandate as well that 75% of outside funds added to an inmate’s account be used for such a purpose.

“Effectively reducing prison pay by an automatic 25 percent will disincentivize participation in prison work programs designed to assist incarcerated people in acquiring marketable job skills,” the letter states. They lawmakers say a 75% tax on outside funds additionally puts an unfair burden on the families and loved ones of prison inmates, who often send what they can afford.

Neither of these proposed regulations address the issue of wealthy inmates squirreling cash away in their prison accounts, the lawmakers argued.

Instead, the Justice Department should consider other approaches, such introducing a system similar to progressive taxation in which inmate accounts that contain larger sums of money are subject to greater scrutiny.

“Such approaches are promising alternatives to the proposed rule, as they would allow for substantial contributions toward victim restitution and court-ordered financial obligations while protecting the poorest people in prison,” the letter states.

A spokesperson for the Justice Department did not immediately return a request for comment, but the agency has argued that such a strategy involves technological and administrative barriers.

Established in 1987 and overseen by DOJ’s Bureau of Prisons, the Inmate Financial Responsibility Program is aimed at encouraging federal inmates to pay off their debts and helping them create a financial plan for doing so. Participation in the program is only recommended but is not mandatory.

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