Not So Securus - Massive Hack of 70 Million Prisoner Phone Calls | Hacker News Reader

Not So Securus - Massive Hack of 70 Million Prisoner Phone Calls

theintercept.com

145 pointsuptown31 comments

"Prison and jail communications is a $1.2 billion a year business, whose handsome profits come from serving a captive and inelastic market."

Securus is used by more than 1.2 million inmates and make $404 million in revenue, equating to an average of $336 per inmate per year, or $28 per month. This for a service that's far more limited than equivalent cheap prepaid mobile plans you'd be able to get.

Other than just being amazed at the potential violations of attorney-client privilege, I'm stunned that they're allowed to price gouge a literally captive market, and then offer kickbacks to those helping them keep their monopoly.

Given telecommunications can be lifelines to normality and returning to society a well adjusted and prepared individual, it's tragic. Remember, many people in prison in the US are there for non-violent offenses.

On the upside...

>(The Federal Communications Commission in October voted to cap calling rates and fees, a move that Securus and other industry leaders had fought, claiming the change would have a “devastating effect” on their businesses.)

>Given telecommunications can be lifelines to normality and returning to society a well adjusted and prepared individual...

Sadly, those seem to rarely be goals of our current prison systems.

They are of the same caliber as the private prison system companies, which actively lobby against de-escallating the War On Drugs as it will directly affect their bottom line.

Societies that privatize their correction system leading to inmates being raw material for generating profits, are in my eyes not allowed to carry the name 'society' (coming from latin socius = companion or fellow)[0] anymore.

They are not fellows who correct and punish, they are slavers, outsourcing slavery for generating tax revenue and private revenue alike.

I totally cannot understand any rationale behind a privatization of prisons, as it totally runs contrary to what society should want to get out of a prison system (rehabilitation, correcting wrong behavior, punishment).

I know, I might sound harsh, but I really have no idea how a society can want a system like this, that extorts prisoners for privatized gains.

[0]: https://translate.google.com/?ie=UTF-8&hl=de&client=tw-ob#la...

normality and returning to society a well adjusted and prepared individual

I think it's been abundantly clear for quite some time that the goal of the US criminal justice and incarceration system is anything but rehabilitation.

Non-violent crime is not necessarily soft crime. Ask someone who has been conned out of their life savings, or just plain had it stolen via some sort of fraud and now face an uncertain future with no financial security how seriously they view non violent crime...

For more information about Securus, I'm going to have to rep PPI:

http://www.prisonpolicy.org/blog/2015/06/19/securus-profits/

http://www.prisonpolicy.org/visitation/report.html

http://www.prisonpolicy.org/phones/pleasedeposit.html

My favorite bit:

> Securus’ gross profit margin... was a whopping 51 percent.

A gross margin of 50% is not that impressive.

Also, a "gross margin" number is not very insightful without additional information.

What? Gross margin of 50% is humongous. Google's gross margin is in the same ballpark, and Apple's is less than that.

IBM's 2014 revenue was $93Bn. IBM's 2014 costs was $46Bn. Therefore their gross profit was $46Bn (after rounding).

This results in a gross margin of 46/93 = 51%.

If I looked through the NYSE I'd find no shortage of companies with a gross margin around 50%.

A gross margin figure of 50% alone is really nothing to be mind-blown about.

(To be clear, I'm most certainly not defending this company. Just saying that it would be wrong to be horrified with a 50% gross margin.)

Gross profit margin is the gross profit divided by revenue[1]. Gross profit is revenue minus the cost of the goods to the company[2].

Securis keeping 51% of the money generated by its business, after you figure in what that service first cost the company, is indeed impressive.

What is also impressive though is if, as Securis' CEO suggests near the end of this[3] article, after all that their net income is only 1.4%. Is he really saying, there, that direct operating costs eat 99% of their gross margins, or is he not telling the FCC that a big chunk of change is being "spent" as operational costs on M&A and other re-directional consumables? My expertise is quickly exhausted in the subject, but... it can't all be going to kickbacks to the prisons.

1: http://www.investopedia.com/ask/answers/101314/what-are-diff...

2: http://www.investopedia.com/terms/g/grossprofit.asp

3: http://www.prisonpolicy.org/blog/2015/06/19/securus-profits/

A net of 1.4% on a gross of 50% spells 'creative accounting'.

I read it as "lots of salary and bonus".

I'm sorry to repost the exact same reply, but...

IBM's 2014 revenue was $93Bn. IBM's 2014 costs was $46Bn. Therefore their gross profit was $46Bn (after rounding). This results in a gross margin of 46/93 = 51%.

If I looked through the NYSE I'd find no shortage of companies with a gross margin around 50%.

A gross margin figure of 50% alone is really nothing to be mind-blown about.

(To be clear, I'm most certainly not defending this company. Just saying that it would be wrong to be horrified with a 50% gross margin.)

I'd sign for it. Just imagine: millions of people that can't switch providers that you can charge whatever you want. Coupled with a legal system that provides a steady inflow of new consumers. It's a super business model (albeit totally un-ethical). Most businesses are happy with 30% gross, that seems to be the number that normal and healthy businesses strive for. Plenty are happy with 20%. 50% is on the very high side of gross margins. Sure there are a few outliers but it definitely isn't normal.

> Coupled with a legal system that provides a steady inflow of new consumers.

To be fair, the legal system also removes consumers from the pool, so it's not a matter of "newness" but just that the system maintains some basic population.

I think that part of the problem is that the legal system is not just maintaining some basic population.

And even if it was maintaining some basic population, the incentives become misaligned when you start introducing a for-profit prison industry.

> I'd sign for it. Just imagine: millions of people that can't switch providers that you can charge whatever you want.

So would I!

My only point is that, in general, a gross margin of 50% is not that impressive for a company. It's pretty common.

The article described it as a "a whopping 51 percent" but I would've described it as "a pretty boring 51 percent."

Of course, that doesn't mean that I'm for their business model. I'm totally against it.

> In addition to metadata, each phone call record includes a “recording URL” where the audio recordings of the calls can be downloaded.

If the intercept has retrieved the recordings this way, it means that the recordings are available for the public to download, only protected by the URL being secret.

The article doesn't confirm that explicitly, but could be read that way.

The recording URL might well point to an VPN / private network address (at least it should).

>“We will provide the most technologically advanced audio and video communications platform to allow calls with a high level of security,” reads the company’s Integrity Pledge.

I see the problem. It's really a case of simple miscommunication. They specifically state that they "will", i.e. in the future "will" provides this platform with a (note: the singular) high level of security. They do not state that they "are" currently providing these amazingly secure services.

Could we include the other part of the subtitle - it seems that without the context of the second-part it will diverge this discussion strictly to the "Hack" - where as it really should read:

> Massive Hack of 70 Million Prisoner Phone Calls Indicates Violations of Attorney-Client Privilege

good point--a Constitutional violation no less. I wonder if t's more than a violation of the 4th Amendment, perhaps 6th as well ("effective assistance of counsel" or something like that) In any event, an ACLU directory quoted in the article says that this hack "[m]ay be the most massive breach of the attorney-client privilege in modern U.S. history"

> The company’s contract specifically provides that calls “to telephone numbers known to belong [to] attorneys are NOT recorded” and that “if any call to an attorney is inadvertently recorded, the recording is destroyed as soon as it is discovered.”

This sounds like they can cover their ass easily by claiming not to know those numbers were attorneys.

Unless at attorneys can show that they registered their phone number with Securus and that recording wasn't destroyed...

that does indeed seem like the broadest CYA clause their lawyers could come up with, but perhaps it's not broad enough, because consider how the The Intercept was able to determine which of the calls were between prisoner and attorney: The Intercept just checked (for a sample of the 77 MM records) for membership of the phone number called, in a directory of lawyers and law firms (obviously under-inclusive because this directory usually lists office lines not individual lawyer's cell phones, as the article states). In other words, those phone numbers were indeed "known" to belong to attorneys--in fact, publicly known.

I suppose that comes down to whether there is a contractual obligation on the part of Securus to scrub recording archives for attorney numbers, or whether they are merely obligated to delete recordings upon allegation that they are improperly archived, or something else. That's not spelled out.

[IANAL] Given that that's there for legal compliance, they're screwed either way:

If they knew, and didn't do it, they're criminally negligent, and have willfully endangered the lives of numerous prisoners.

If they didn't know, then they're incompetent, and have endangered the lives of numerous prisoners through inaction, which could still be considered criminal negligence.

If the average person doesn't seem to care if their calls are being recorded, phones tracked and tagged to their contacts, they sure aren't going to be motivated by the news that prisoners are being recorded.

A great piece of reporting, made worse by all the distracting and jiggly animations.

Depends on which sunglasses are used to view the animated messages.

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