The High Cost of Crime

While US law-enforcement officials contend with over-crowded prisons, businesses and individuals spend billions on private security

IT'S the late-afternoon ``lock-down time'' at the Maryland Correctional Institution at Jessup. The male prisoners in the dormitory portion of this medium-maximum-security prison are all on their beds, waiting for the guards to do a scheduled count.

Built for 500 inmates in 1980, MCIJ increased its population twofold just five years later. ``Over one weekend, we double-celled the entire place,'' Warden Eugene Nuth says. That was accomplished by putting bunk beds for two in the already cramped quarters for one. ``Then, in 1989 I got a call to put some beds in our gymnasium,'' Mr. Nuth says. ``That added another 150 to the population'' and brought the total number up to 1,151.

To peer through the steel grating now surrounding an area that once served as MCIJ's indoor basketball court is to view a symptom of one of the nation's most pressing problems: a largely youthful group of criminals serving time in overcrowded conditions. Most of the men are in for murder, rape, assault, or robbery. Once released, statistics say, most of the men will be back again.

Experts put the recidivism rate at well over 50 percent. That fact, coupled with the youthful criminal population, means that the need for additional prisons is growing steadily. The national average of construction cost per prison bed is $70,000, and the average annual cost of maintaining each inmate is an additional $17,000 per year, says Leonard Sipes Jr., director of public information at the Maryland Department of Public Safety and Corrections Services. ``We have essentially told the public that we cannot build our way out of this crisis,'' he says.

No one knows that better than Ted Sexton, sheriff of Alabama's Tuscaloosa County. As overseer of the county's law enforcement, its courts, and its jails, Mr. Sexton has fallen into the wide gap between what the community demands - more police, bringing defendants to trial faster, and more space to accommodate those convicted - and what the tax base will bear. Like most jurisdictions in the United States, for years Tuscaloosa County has been under court order to expand jail space, and for years it has been unable to afford to do so.

``With the increase in violent crimes [during the four years he has been in office], we're constantly picking up people on murder, robbery, child abuse, sodomy and rape charges,'' Sheriff Sexton says. The courts cannot process defendants fast enough to keep up with the flow; one of the results is that those awaiting trial do so in jail, taking up precious space and further straining public budgets. ``The murder trial we're working on today was four years in the making. [The accused] has occupied space in my jail for four years,'' Sexton says.

Soaring costs, public and private

All these trends, decades in the making, have led to public criminal-justice costs that have soared far beyond what state and federal budgets can bear. But they are only a part of the financial picture.

For nearly two decades the private sector has outspent public sector outlays for security. Calculations of climbing crime costs to the United States economy go as high as $425 billion a year. American individuals and businesses across a broad spectrum spend upward of $300 billion annually on crime prevention, detection, and security. That figure reflects the perception that government is not capable of protecting the public.

At the southern end of Georgia Avenue, for example, a 24-mile stretch that runs from Washington, D.C., to rural Maryland, fortress-like iron bars, steel-mesh fences, and alarm systems are commonplace. Shopkeepers talk about their challenges: some are stoic; others are guarded.

Soon Duk No, owner of D&B Deli, has been selling beverages, bread, canned goods, and cleaning supplies for the past six years. She has a busy lunch counter that lines one side of the store, which is attended by an all-female staff. ``There's a lot of shoplifting,'' Mrs. No says of her small store. ``Fifty-cent cookies, bottles of beer - sometimes they take more than $10 worth.''

When she notices people packing store goods under their shirts or in their pockets, she boldly confronts them, she says. More often than not, they walk away without paying. ``You call the police - they no show up. The criminals know that. They say, `Go ahead - call the police.' It's like a joke.''

No doesn't keep a gun in the store, although she has been robbed. The most recent time was in February. The police response was relatively good, she recalls. ``I called them three times that day and finally they came. Usually I call them five or six times before they respond.''

After she was held up three times and her frustration had built up over the poor police response, No spent $800 on bars for her storefront and invested in a burglar alarm that costs $65 a month to maintain. She also closes early - before dark - in order to avoid added night-time security risks. At times like these, when business is slow, she feels the pinch of those costs.

Do-it-yourself prevention

Further up the avenue, the elderly proprietor of the Swedish Pastry Shop contends that ``nothing keeps a place safe.'' The owner, who has been in business at the same location for the past 30 years, has seen the neighborhood change from a vibrant and safe community of homes, merchants, and shoppers to a several-block radius preyed on by violent gangs. Many nearby establishments are heavily boarded up and barred; many residences are, too.

Has the Swedish Pastry Shop taken security measures? ``Doggone right,'' barks the proprietor, who says he's afraid to give his name because he doesn't want to run into any more trouble from the people who have been smashing his front windows. After replacing his storefront window three times, at a cost of $2,700, he recently installed a tough bullet-proof window. He also sells lottery tickets from a stall that is totally encased in bullet-proof glass. ``DC Lottery pays for that,'' he says. All told, security costs - including monthly maintenance of a burglar alarm - are high, he says.

Such precautions are not limited to tough areas like the southern end of Georgia Avenue. From coast to coast, ``the majority of [American] middle-class homes being built today are being wired'' for burglar alarms says Jerry Wright, a top security consultant who served for 25 years as director of the police department's Crime Prevention Unit and Fraud Unit in Ann Arbor, Mich. ``Physical security,'' he says, ``is one of the largest growth industries in the nation.''

In addition to his security consulting work for enterprises - from the small mom-and-pop stores to Fortune 100 multinational corporations - Mr. Wright also tracks trends as chairman of the National Committee on Crime and Loss Prevention for the American Society for Industrial Security - an organization of private security leaders, vendors, and law enforcement officials.

He cites some staggering costs that typify what is found throughout the country's security landscape. Automated-teller machines (ATM), for example, provide consumers with banking convenience, but they also provide criminals with plenty of stickup opportunities.

Intent on arresting escalating ATM crimes, New York City mandated in the early 1990s that banks retrofit their machines with consumer-access controls, mirrors, and other devices to monitor and help make transactions safe. The industry's cost of compliance with these security measures in New York City alone was $50 million, a price that was ultimately passed on to consumers. Some facilities opted to close down rather than meet untenable financial obligations.

Passing the burden to business

Fed up with the expense of responding to thefts from convenience stores, like No's D&B Deli in Washington, the Gainesville, Fla., city government did a cost-benefit analysis from 1985 to 1987. It found that while convenience-store losses totaled $100,000 during that period, the city government spent more than $1 million in time and personnel to investigate these incidents. City officials then passed the burden back to business by enacting ordinances that required stores to increase training for employees, boost their staff levels, and limit the amount of cash on site.

Police and other public law-enforcement agencies are simply not equipped to deal with economic crimes against business, security analysts say. Their limited resources are spent meeting the public's demand for controlling violent crimes. This leaves the business community to fend for itself, for the most part, preventing and investigating criminal activity. The result is that crime - from stealing inventory to embezzlement - is largely unreported and criminals go unapprehended.

Experts outline the scope of the problem: Private security employees outnumber law enforcement by more than 2 to 1 in the US. The US Commerce Department estimates that shoplifting by customers coupled with pilferage by employees adds as much as 15 percent to the price of consumer goods. Commercial managers assert that roughly half of customer and employee thefts are drug-related.

Francis D'Addario, director of loss prevention at Hardees Food Systems Inc., the owner-franchiser of 4,000 Hardees-Roy Rogers fast-food restaurants, is widely recognized as the beacon of preventative security in the commercial sector. He has just finished distributing a robbery prevention film to his establishments and regularly screens new hires to ensure a good selection of employees.

He has also moved restaurant safes into visible locations so that criminal activity can be easily spotted by diners. Focused on the importance of data, D'Addario designed a software package to track serial offenders who prey on Hardee's establishments.

``We are very prosecutorial,'' D'Addario says, ``we pursue crimes against our employees or assets very vigorously. If you harm one of our employees, we do composites [sketches of the suspect] and rewards [for information leading to conviction]. All of this is pretty costly - a lot higher than our reported crime on a dollar value. But a lot of the prevention has ancillary effects on promoting sales - the customers feel more comfortable.''

One way that Safeway grocery stores says it makes customers feel more comfortable is by putting uniformed security guards at the front door.

Its Georgia Avenue store has a guard, as do 125 out of its 150 East Coast locations. But the best method of crime intervention, according to John Deckard, Safeway's eastern division spokesman, is ``to provide good customer service,'' he says. ``Greeting people in the aisles, paying attention to them, offering help as they search for things - that's one of the best deterrents,'' he says, because would-be criminals know they are being watched. ``It's virtually cost-free,'' he says.Toward cooperation

D'Addario says that American society can't employ many such ``freebies'' in an effort to prevent crime. But he insists that there is a lot that can be done to reduce the cost of crime.

The first and most basic way, he says, is to fully fund government programs such as Head Start, which are designed to instill ``at risk'' youth with strong values. Making certain that those convicted of crime are punished - ``with uncertainty in sentencing,'' he says - will send a strong message to a few one-time criminals and the many repeat offenders who believe that their chances of going to prison are remote.

D'Addario envisions, perhaps within the next decade, that government and business will have to share information, data, and technologies in order to do battle against criminal activity. Unless resources are more wisely spent, and cooperation increases, the crime surge will continue and problems such as overcrowded jails will compromise security.

Back at the Jessup prison, over-crowding exacts a high cost, says Warden Nuth. ``You'll notice a thinness of the blue line; there are just not that many officers.'' Indeed, the small size of the prison-patrol staff of 62 is striking. As the 1,151 inmates walk to and from their meals, the distance is covered by officers at strategic points. At any point, it seems, the prisoners could easily overwhelm them. The guards are unarmed, Nuth explains, because ``if you put weapons into the hands of officers, they could become overpowered very quickly and fall into the hands of prisoners.'' Housing twice as many prisoners as originally planned for has compromised security, he says, both inside the prison system and in society at-large.

As state and municipal governments are pressed to push prisoners through the system at a faster rate to make room for an incoming lot, convicts are often released into more loosely run programs or simply dumped back into the same environment in which they committed crimes. ``It's really hard to tell a rape victim or parents of a [molested child] that the perpetrator was put on probation because of a logjam in the court system or because prisons are overcrowded,'' D'Addario says. ``It robs everyone of the confidence that the criminal justice system works.''

With greater demands on a shrinking pool of funds, stress among the MCIJ staff is high, Nuth says. ``We require a lot more them today than we have.'' That will likely continue in the future, he says. ``In my years in the business, the public has changed from very sympathetic to the prisoner to a much more hard-core approach. They support tougher, longer sentences, so incarceration costs will inevitably increase.'' He sits back and exhales deeply. ``From our perspective, business is booming.''

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