Dan Jacobson

Minneapolis/St.Paul City Business: The Business Journal

July 9-13,1993

MINNEAPOLIS, MINN- It‘s 9 a.m. in Hennepin County Judge June Lange’s courtroom, and today’s parade of felony arraignments is just beginning.

As the fifth of about 20 recent arrestees comes into the dock, bail bondsman Bud Goldberg takes notice. The prisoner, fresh from the county lock-up, is here to make the first court appearance on his latest drug charges. Lange sets bail at $5,000.

Goldberg, owner of Goldberg Bail Bonds in Minneapolis, knows the young man and his family well. The soft-spoken, gentlemanly 65-year-old comes to arraignment court every day to be there when families such as No. 5’s want to get their relatives out of jail.

“It‘s the same cast of characters year after year,” Goldberg said. “I know him, his mother and his sister. The sister will cosign for the bond. She’s as good as gold.”

Goldberg, who is estimated to handle 90 percent of the Twin Cities‘ criminal court bail bonding work, knows everybody involved in the criminal justice system- the guilty and the innocent, the judges, the prosecutors, the police, the defense attorneys, the prosecutors, the police, the defense attorneys, the public defenders, the court workers – an the names of their wives and husbands. After 40 years in the much-maligned business of bail bonding, the avuncular Goldberg is s much a fixture in the courthouse as the ground floor newsstand.

“It‘s all personal,” he said. “You go down the halls, and people say, ‘Hi, Bud!‘ The reasons they like me is that I tell the truth, I‘m honest, and I‘ve never been in trouble. The only thing you have is your word.”

After spending a morning with Goldberg in felony arraignment court where he picks up most of his business after bail hearings, it‘s readily apparent that he‘s well liked – in stark contrast to the stereo type of bail bondsman as cynical manipulator of the legal system and profiteer from the misfortunes of others. Goldberg‘s warm, low-key style and willingness to treat family members with respect have earned him the praise of the famous and infamous alike.

But like most private bail bondsmen – whom some say and hope are a dying breed – Goldberg is very discreet and shies from publicity. He declined to be photographed for this article, for instance. After 30 years of bad publicity stemming from corruption probes and changing values, bail bondsmen are on the defensive. In some states, including Wisconsin, they are now even banned by law. But Goldberg‘s popularity in the Twin Cities belies that common perception.

“People are people, it doesn‘t matter if they’re a big shot or a streetwalker,” he said. “They just want to be acknowledged as people. They know I‘ll take care of them, so I get a lot of referrals.”

Although he declined to discuss his income, it‘s obvious that Goldberg is successful. He dresses nicely and drives an expensive car. But just exactly how much can be made from bail bonding in the Twin Cities is unclear.

The private bail bondsman makes money by collecting a 10 percent fee from the accused or a cosigner for each surety bond posted. In most cases, Goldberg said, a mother or cleric will post a person‘s bail and collateralize the full amount with property of some sort.

If the accused disappears or “jumps bail” before a scheduled court appearance, the collateral is forfeited to the bondsman, and then to the court. Although insured for such occurrences, the bondsman sometimes will attempt to track down the fugitive with the help of a private investigator to avoid the forfeiture, and in some states is allowed up to 10 years to do so.

Goldberg for instance, has a full time private investigator and three people working on collections.

The majority of the bails set in arraignment court are small potatoes, $500 or less. But bails of $5,000 to $10,000 are not uncommon for more serious offenses, such as drug dealing, large property crimes or assault. Murder suspects fetch bails ranging from $50,000 to $1 million, in effect ensuring they don‘t leave jail.

During one recent day in Hennepin County felony court, the cumulative bails for new suspects reached $50,000, which, if all posted by a private company would mean $5,000 in fees.

A lot of Goldberg‘s business comes from criminal defense attorneys who tell him in advance of arraignment hearings that their clients are going to need his help.

Two well-known Minneapolis defense lawyers, Peter Wold of Wold Jacobs & Johnson and Jack Nordby of Meshbesher & Spence Ltd., say they always go to Bud Goldberg on behalf of their clients.

“The way Bud runs bail bonding is an art,” Wold said. “My relationship with him goes back a long way, to when I was a young attorney. He was able to tell me how to approach things, what each particular judge was likely to do. He does things to make you comfortable and goes out of his way to maintain his relationships.

“There are other firms that will do some criminal work. But Goldberg‘s is an institution.”

Nordby said that word-of-mouth is essential in the chummy, discreet business of bail bonding. And Goldberg is the bondsman of choice among the top criminal defense lawyers. There are about a dozen bail bonding firms listed in the Twin Cities Yellow Pages.

“He has personalized service and is available 24 hours a day,” Nordby said. “The courts respect him, and he‘s a good guy. There‘s been a move for years to eliminate the bondsmen, but I think they perform an important function in getting people to show up for court. Too many people are held in jail because their bail is purposely set too high; people have a constitutional right to bail, but the burden has shifted to the defendants having to prove that won‘t run.”

Nordby was referring to a struggle that has been going on since the early 1960s, in which groups such as the American Bar Association (ABA) have been lining up behind the development of “pretrial services,” government-run programs designed to replace private bail bonding with public-sector alternatives.

For instance, some states have developed systems in which defendants can win their release by posting 10 percent of their bail with the court – a fee that is refunded after their next court appearance. The states‘ motivation is to end the influence of private individuals – specifically bail bondsmen – in determining the very public business of who stays in jail and who goes free. The ABA and other advocates of pretrial services say that one reason jails are so overcrowded now is because poor defendants who are unlikely to run can‘t afford private bondsmen, so they take up expensive jail bed space.

One such alternative pretrial service is Hennepin County’s Operation DeNovo, in which nonviolent offenders who are OK‘d by prosecutors undergo counseling and drug testing and pay restitution instead of having to come up with bail. The Professional Bondsmen of the United States, which represents about 5,000 bail bondsmen, denounces such programs, saying they do nothing more than release dangerous criminals onto the streets.

The Pretrial Services Resource Center of Washington, D.C., however, counters by saying that the percentages of people who jump bail using private bondsmen and public alternatives are essentially the same. The group says that when courts consider such things as the person’s ties to community and family, they can make just as good a call as a private bondsman can.

But such debates are largely irrelevant to Goldberg, who has the faith of the legal community here. To him and his daughter, Patti (the firm‘s heir), the key to continued success is clear.

“I‘ve got the biggest database,” Goldberg said. “You‘re not allowed to solicit business, so that‘s all you have.”

Adam Liptak – New York Times

January 29, 2008

FORT LAUDERDALE, Fla. – Wayne Spath is a bail bondsman, which means he is an insurance salesman, a social worker, a lightly regulated law enforcement agent, a real estate appraiser – and a for-profit wing of the American justice system.

What he does, which is posting bail for people accused of crimes in exchange for a fee, is all but unknown in the rest of the world. In England, Canada and other countries, agreeing to pay a defendant’s bond in exchange for money is a crime akin to witness tampering or bribing a juror – a form of obstruction of justice.

Mr. Spath, who is burly, gregarious and intense, owns Brandy Bail Bonds, and he sees his clients in a pleasant and sterile office building just down the street from the courthouse here. But for the handcuffs on the sign out front, it could be a dentist’s office.

“I’ve got to run, but I’ll never leave you in jail,” Mr. Spath said, greeting a frequent customer in his reception area one morning a couple of weeks ago. He turned to a second man and said, “Now, don’t you miss court on me.”

Other countries almost universally reject and condemn Mr. Spath’s trade, in which defendants who are presumed innocent but cannot make bail on their own pay an outsider a nonrefundable fee for their freedom.

“It’s a very American invention,” John Goldkamp, a professor of criminal justice at Temple University, said of the commercial bail bond system. “It’s really the only place in the criminal justice system where a liberty decision is governed by a profit-making businessman who will or will not take your business.”

Although the system is remarkably effective at what it does, four states — Illinois, Kentucky, Oregon and Wisconsin — have abolished commercial bail bonds, relying instead on systems that require deposits to courts instead of payments to private businesses, or that simply trust defendants to return for trial.

Most of the legal establishment, including the American Bar Association and the National District Attorneys Association, hates the bail bond business, saying it discriminates against poor and middle-class defendants, does nothing for public safety, and usurps decisions that ought to be made by the justice system.

Here as in many other areas of the law, the United States goes it alone. American law is, by international standards, a series of innovations and exceptions. From the central role played by juries in civil cases to the election of judges to punitive damages to the disproportionate number of people in prison, the United States has charted a distinctive and idiosyncratic legal path.

Bail is meant to make sure defendants show up for trial. It has ancient roots in English common law, which relied on sworn promises and on pledges of land or property from the defendants or their relatives to make sure they did not flee.

Americas open frontier and entrepreneurial spirit injected an innovation into the process: by the early 1800s, private businesses were allowed to post bail in exchange for payments from the defendants and the promise that they would hunt down the defendants and return them if they failed to appear.

Commercial bail bond companies dominate the pretrial release systems of only two nations, the United States and the Philippines.

The flaw in the system most often cited by critics is that defendants who have not been convicted of a crime and who turn up for every court appearance are nonetheless required to pay a nonrefundable fee to a private business, assuming they do not want to remain in jail.

“Life is not fair, and I probably would feel the same way if I were a defendant,” said Bill Kreins, a spokesman for the Professional Bail Agents of the United States, a trade group. “But the system is the best in world.”

The system costs taxpayers nothing, Mr. Kreins said, and it is exceptionally effective at ensuring that defendants appear for court.

Mr. Spath’s experience confirms that.

If Mr. Spath considers a potential client a good risk, he will post bail in exchange for a nonrefundable 10 percent fee. In a 35-month period ending in November, his records show, Mr. Spath posted about $37 million in bonds – 7,934 of them. That would suggest revenues of about $1.3 million a year, given his fee.

Mr. Spath, who is 62, has seven bail agents working for him, including his daughters Tia and Mia. “It probably costs me 50 grand a month to run this business,” he said.

Mr. Spath hounds his clients relentlessly to make sure they appear for court. If they do not, he must pay the court the full amount unless he can find them and bring them back in short order.

Only 434 of his clients failed to appear for a court date over that period, and Mr. Spath straightened out 338 of those cases within the 60 days allowed by Florida law. In the end, he had to pay up only 76 times.

That is a failure rate of less than 1 percent.

But he had just taken a $100,000 hit. “Everything I worked for this year, I lost because of that one guy,” he said. “If I write a bad bond, it takes me 17 to make it right.”

Mr. Spath had thought the defendant, accused of drug trafficking, was a good bet because he had been cooperating with the government. The defendant is in Brazil now, but Mr. Spath is very good at finding people, and he is not giving up. He is working travel records, phone companies and a former girlfriend, and he is getting closer.

He sometimes requires collateral in addition to his fee, and has accepted rugs, an airplane and a winning Rhode Island lottery ticket. But mostly he is interested in houses.

“In this business, you have to understand real estate,” Mr. Spath said. When the real estate market goes south, he said, bail bondsmen get hurt.

According to the Justice Department and academic studies, the clients of commercial bail bond agencies are more likely to appear for court in the first place and more likely to be captured if they flee than those released under other forms of supervision.

That may be because bail bond companies have financial incentives and choose their clients carefully. They also have more power. In many states, bond enforcement agents, sometimes called bounty hunters, may break into homes of defendants without a warrant, temporarily imprison them and move them across state lines without entering into the extradition process.

Still, critics say, efficiency and business considerations should not trump the evenhanded application of justice.

The experiences in states that have abolished commercial bail bonds, prosecutors say, have been mixed.

“The bail bond system is rife with corruption,” said Joshua Marquis, the district attorney in Clatsop County, Ore. Since bond companies do not compete on price, they have every incentive to collude with lawyers, the police, jail officials and even judges to make sure that bail is high and that attractive clients are funneled to them.

Mr. Kreins, the industry spokesman, acknowledged scandals in Illinois, where “basically all the agents were in collusion with the judges,” and in Louisiana, where sheriffs were also in the mix.

“We have acted responsibly every time an incident has occurred to seek stronger legislation,” Mr. Kreins said. Mr. Marquis, the Oregon prosecutor, said doing away with commercial bonds had affected the justice system in a negative way as well. “The fact of the matter is,” he said, “that in states like Oregon the failure-to-appear rate has skyrocketed.” Oregon uses a combination of court deposits, promises to appear and restrictions on where defendants can live and work.

The rest of the world considers the American system a warning of how not to set up a pretrial release system, F. E. Devine wrote in “Commercial Bail Bonding,” a 1991 book that remains the only comprehensive international survey of the subject.

He said that courts in Australia, India and South Africa had disciplined lawyers for professional misconduct for setting up commercial bail arrangements.

Other countries use a mix of methods to ensure that defendants appear for trial.

Some simply keep defendants in jail until trial. Others ask defendants to promise to turn up for trial. Some make failure to appear a separate crime. Some impose strict conditions on release, like reporting to the police frequently. Some make defendants liable for a given sum should they fail to appear but do not collect it up front. Others require a deposit in cash from the defendant, family members or friends, which is returned when the defendant appears.

But injecting money into the equation, even without the bond company’s fee, is the exception. “Even purged of commercialism, most countries avoid a bail system based chiefly on financial security deposits,” Mr. Devine wrote.

In the United States, the use of commercial bail bonds is rising, and they became the most popular form of pretrial release in 1998. More than 40 percent of felony defendants released before trial paid a bail bond company in 2004, up from 24 percent a decade earlier, according to the Justice Department.

Forty percent of people released on bail are eventually acquitted or have the charges against them dropped. Quite a few of them paid a substantial and nonrefundable fee to remain free in the meantime.

Kate Santana, a 20-year-old waitress, had spent eight days in jail when she found her way to Mr. Spath.

“Me and my husband got into a fight,” Ms. Santana explained, “and the cops were called and I was arrested because there was a bite mark on his shoulder.”

Mr. Spath took her $200 and posted her $2,000 bail. “I checked her criminal history out,” he said. “I found out she was a mother and really she shouldn’t be in jail.”

But when a friend of a man accused of identity theft and perjury turned up seeking a $16,000 bond, Mr. Spath took a different attitude. “You bet your fanny I’m going to take collateral,” he said. “I’ll take his firstborn.”

Mr. Spath is not much concerned with how the rest of the world views commercial bail bonds, but he was worked up about recent talk of a greater government role in pretrial release here in Broward County.

“Here’s what everybody forgets,” he said. “The taxpayers have to pay for these programs. Why should they pay for them? Why should they? When we can provide the same service for free. I’d rather see the money spent in parks, mental health issues, the homeless. Let the private sector do it. We do it better.”

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