Shadow Budgets: How mass incarceration steals from the poor to give to the prison

Prisons and jails generate billions of dollars each year by charging incarcerated people and their communities steep prices for phone calls, video calls, e-messaging, money transfers, and commissary purchases. A lot of that money goes back to corrections agencies in the form of kickbacks. But what happens to it from there? As it turns out, much of this money flows into special accounts called “Inmate Welfare Funds.” These welfare funds are supposed to be used for non-essential purchases that collectively benefit the incarcerated population. In reality, poorly written policies and lax oversight make welfare funds an irresistible target for corruption in jails and prisons: in many cases, corrections officials have wide discretion to use welfare funds as shadow budgets for subsidizing essential facility operations, staff salaries, vehicles, weapons, and more, instead of paying for such things out of their department’s more transparent and accountable general budget. We analyzed laws and policies governing welfare funds in all 50 state prison systems and the federal Bureau of Prisons to find out how welfare funds are used. Our analysis reveals that most policies are so vague that prison officials enjoy wide discretion to spend incarcerated peoples’ money as they please—sometimes spending it on luxury perks for staff.