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How the coronavirus could kill the $2 billion US bail bond business

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Key Points
  • More than 20,000 U.S. prisoners so far have tested positive for Covid-19, according to data from journalism nonprofit The Marshall Project.
  • To reduce the density of inmates and curb the spread of the coronavirus, correctional facilities nationwide released more than 16,000 people from incarceration.
  • The pandemic is now forcing local criminal justice systems to take stock of who is in their jails and why.
  • With no bonds to post, many bail bond companies have had to lay off their entire staff.
A decades-long debate about bail bonds as one of the biggest causes of jail density, has been given new intensity by Covid-19. A need to reduce crowded prison populations could threaten the $2 billion industry.
George Rose | Getty Images

Prisons and jails are at a significant risk of a coronavirus outbreak, with inmates living, eating and bathing in shared spaces. The situation has added intensity to a decades-long debate on one of the biggest causes of jail density — a system that accounts for a $2 billion industry in the U.S. That system is money bail.

Over 20,000 U.S. prisoners so far have tested positive for Covid-19, as of May 6, according to data from journalism nonprofit The Marshall Project. To reduce the density of inmates and curb the spread of the coronavirus, correctional facilities nationwide released more than 16,000 people from incarceration throughout the pandemic.

Of the 631,000 people held by local authorities in U.S. jails, 74% have not been convicted of a crime, according to the Prison Policy Institute. Instead, many are incarcerated before their trial because they cannot afford to pay money bail, whether out of their own pocket or through a commercial bail bondsman.

The United States is one of two countries in the world, along with the Philippines, that has a commercialized bail industry.

Jeff Clayton, the executive director of the American Bail Coalition, said many bail bond companies have had to lay off their entire staff because "there are no bonds to post."

"Business is way down; let's put it that way," Clayton said. "Most of the criminal justice system is shut down right now, and that includes bail agents. Some agents have posted less than 10% of the bonds they normally would have posted."

There are approximately 14,000 bail agents in the U.S., according to trade group Professional Bail Agents of the United States. California has around 3,200 licensed bail agents and organizations, and Clayton said that California, Texas and Florida are home to the largest bail bond markets. The size of each state's bail bond industry closely correlates to its population, excluding Wisconsin, Oregon, Kentucky, Illinois and Massachusetts, where commercial bail bondsmen have been outlawed or eradicated by legislation.

Michelle Esquenazi, the CEO of Empire Bonds and founder and senior vice president of the New York State Bail Bondsman Association, said an environment with fewer arrests and new reform legislation will cause bail bond business to suffer.

"As it pertains to Covid-19, businesses have to pivot and be able to ebb and flow, period," Esquenazi said. "Of course, bail companies must be able to ebb and flow. Does that mean that some won't do as well? I'm certain that's the case scenario."

Esquenazi, the former senior vice president of Professional Bail Agents of the United States and the self-dubbed Bail Bond Queen, said the industry believes that those incarcerated for "crimes without human victims" should be considered for release without bail.

Covid-19 impact on existing prison political battles 

In the state's April 2 budget bill, New York rolled back last year's bail reforms, which eliminated money bail for most misdemeanors and nonviolent felonies and allowed 90% of new defendants to stay out of jail while awaiting trial. The reversal came after receiving severe backlash from law-enforcement authorities and politicians, who argued that the reforms threatened public safety.

Sandra Mayson, an assistant professor at University of Georgia School of Law who has researched bail reform, said the pandemic is forcing local criminal justice systems to take stock of who is in their jails and why, which is "not something they had been doing with regularity."

A Sheriff's deputy and on-site nurse give medications to an inmate at Las Colinas Women's Detention Facility in Santee, California, on April 22, 2020.
Sandy Huffaker | AFP via Getty Images

"The bail reform conversation has lately been centered on who's dangerous enough to need to be detained, when it's really about public safety," Mayson said. "Too often in my view, people assume that the calculus is a tradeoff between public safety on one hand and the liberty of the accused on the other. There are public safety concerns on each side of the equation."

According to a 2015 study, people detained before trial were four times as likely to be sentenced to incarceration than those released before trial. People held for 8-14 days before trial were more likely to recidivate, or commit more crime, after completing their sentence.

We're all being forced to confront the extreme threat in jails and the threat of having too many people in jails.
Sandra Mayson
University of Georgia School of Law

Mayson said people usually forget that throwing someone in jail is a dangerous situation in the first place.

"Now the danger in jails is very real," Mayson said. "We're all being forced to confront the extreme threat in jails and the threat of having too many people in jails."

About 2.3 million are incarcerated in the U.S. — the world's largest prison population in any country by far — with nearly 83% in state prisons or local jails. People not found guilty of a crime accounted for 95% of jail population growth from 2000 to 2014, according to data from the Bureau of Justice Statistics.

Incarcerating people before trial costs U.S. taxpayers $38 million a day, according to a 2017 report from Prison Policy Initiative, a nonprofit research organization. That adds up to nearly $14 billion annually.

In contrast to New York, California passed an April 6 emergency bill setting bail at zero for misdemeanors and low-level felonies and postponing trials that could result in evictions or foreclosures.

Eliminating money bail just a 'first step'

Some reform advocates argue that these issues span much further than money bail.

The Pretrial Justice Institute says on its website that eliminating money bail, while a necessary first step, does not fully "address bias and unequal outcomes." It suggests various additional methods of improving pretrial justice, including reducing arrests, restricting detention and increasing the equity of marginalized communities in decision-making.

Esquenazi said most people ignore that bail bond companies ensure that the accused will appear in court and "the crime victim could always have his/her day in court."

"Our industry is not the demonic spawn of Satan," Esquenazi said. "We have been attacked, and it really is unwarranted, especially here in New York."

Mayson said that while she has sympathy for the individuals running bail bond businesses, the industry as a whole poses a significant problem to mass incarceration.

"In the aggregate, unfortunately, I think it's an industry that has been built on the backs of the poor," she said. "And it does dramatically more harm than good."

2.3 million are incarcerated in the U.S., the world's largest prison population in any country, with nearly 83% in state prisons or local jails.
Gary Friedman | Los Angeles Times via Getty Images

Both crimes and arrests are down nationwide during the pandemic as people obey stay-at-home orders and police departments reduce operations.

"It's not that we're not enforcing [the law]," Jorge Campos, chief inspector of the Gainesville Police Department in Florida, told USA Today. "It's that we're finding alternative ways of dealing with the issue rather than make physical arrests."

Many police departments are making efforts to issue citations instead of making arrests in order to avoid physical contact. As of April 1, more than 1,400 NYPD officers had tested positive for COVID-19, and one out of six NYC officers were out sick or in quarantine.

The number of inmates in New York City jails fell more than 1,100 — roughly 20% of the city's jail population — between March 16 and April 6, according to Mayor Bill de Blasio's office.

Clayton said he does not think the circumstances of the pandemic warranted releasing prisoners.

"We've got an emergency, and the last thing police and fire departments need to be doing is handling additional crimes," he said.

Mayson said releasing inmates, along with reducing arrests in the first place, is a "logical approach" to improving the criminal justice system. "It is so patently within the realm of the possible — and not even that hard — to reduce the number of people in the jails that we have," she said.

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This story has been updated to reflect that the number of U.S. prisoners who have tested positive for Covid-19 reached more than 20,000, as of the latest data available through May 6.