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Texas Billionaire John Arnold Gives $39 Million To Reform America’s Broken Bail System

John Arnold at the Forbes Healthcare Summit in New York City. VICTORIA ENGBLOM PHOTOGRAPHY


Each year, almost half a million Americans accused of crimes are jailed before they are put on trial. Many land in jail not because they are a flight risk or at risk of committing a crime, but because they simply can’t afford bail. Billionaire John Arnold and his wife Laura Arnold want to change this. Their Arnold Ventures, which bills itself as a philanthropic foundation but is actually a limited-liability corporation, announced Tuesday that it’s awarding $39 million for bail reform, among other justice initiatives.

“Right now, in most places, if you are arrested, the amount of money you have determines whether or not you get to go free [on bail],” says James Cadogan, Arnold Ventures vice president of criminal justice. “That is fundamentally unjust. The impact of that falls disproportionately on the poor and people of color.”

About $14 billion is spent every year to jail Americans who haven’t been convicted, according to Arnold Ventures. Cadogan says the country’s bail system penalizes the poor and minorities because when on bail is an option, the fees charged to these groups are out of whack. African-American men typically pay 35% more in bail fees compared to white men charged with the same crime, according to the foundation.

The $39 million in grants from Arnold Ventures was announced Tuesday as part of a larger initiative to tackle several criminal justice issues, including mental health services as a replacement for prosecution and public defender caseloads, among other “pretrial justice reform” issues.

Former hedge fund manager Arnold founded Arnold Ventures with his wife Laura as the Laura & John Arnold Foundation in 2010 to “solve persistent problems in society.” In January the foundation, which says it has given out more than $1 billion in grants to date, announced that it was turning itself into a limited-liability corporation, which enables it to invest in for-profit companies and do advocacy as well as continue to make charitable grants. (Other billionaires who’ve chosen to do their philanthropy through an LLC include Mark Zuckerberg and his wife Priscilla Chan, Laurene Powell Jobsand Pierre Omidyar.) John Arnold, worth $3.3 billion on Forbes’ 2019 Billionaires list, made his fortune as an energy trader at Enron before building his own hedge fund, Centaurus Advisors, and then retiring at age 38.

The grants will go toward members of Arnold Ventures’ National Partnership for Pretrial Justice, a group of 26 research, policy and advocacy organizations such as the American Bar Association, Stanford University’s Computational Policy Lab and the nonprofit Center for Court Innovation. This brings the total funding to $48 million between the new and existing Arnold Ventures grants.

Bail reform has been top of mind recently for legislators in California. In August 2018, the state passed a law that would have eliminated cash bail and replaced it with a risk assessment-based system. In January, the law was put on hold, because a referendum challenging it will appear on the November 2020 ballot.

In 2017, New Jersey enacted a sweeping Criminal Justice Reform Act, which also eliminated cash bail. In its first year, the state’s pretrial jail population fell 20%, according to a state judiciary report. New York Governor Andrew Cuomo has also introduced a plan to end cash bail, among other criminal justice reform initiatives.

At Stanford University, researchers plan to use the grant from Arnold Ventures to conduct research on and evaluate the Public Safety Assessment (or PSA), a pretrial risk assessment used by judges to set bail based on factors like a person’s age or criminal history.

“The worst thing about pretrial is that this is all preconviction. This is done under a presumption of innocence and yet people are often stuck [in jail] for an inability to pay,” says Sharad Goel, executive director at the Stanford Computational Policy Lab, which is receiving funding from Arnold Ventures. “The goal is to revamp this and make sure that we are really not making decisions based on finances, but based on risk.”

In addition to bail reform, the grants are intended to look at alternate ways to treat a subset of those accused of crimes. Instead of prosecuting people with mental health or substance abuse issues, many prosecutors can choose to divert these individuals to services that will help them, Cadogan says. Other partner organizations, such as the Pretrial Justice Institute, plan to use the grant money to researchso-called “diversion programs” like these.

“Diversion programs are embedded in a lot of prosecutors offices throughout the country, and the question is, ‘Are we using them enough?’” Cadogan says.

Further grant-funded initiatives include a study by The Public Safety Lab at New York University on the impacts of bail, pretrial detention and counsel practices on defendant-level outcomes across 1,028 counties.

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