Money Bail is a Problem, Even When it Benefits People like Sam Bankman-Fried
Money bail, whether $2,500 or $250 million, is one of the most insidious features of the U.S. criminal justice system.
There has been plenty of uproar online about the terms of disgraced FTX founder Sam Bankman-Fried’s $250 million bond, which he posted last week after being extradited from the Bahamas to the U.S.
Critics are upset that Bankman-Fried, known as SBF, paid essentially nothing on what has been described as one of the “largest ever” pre-trial bonds for a federal case:
In the typical federal case, a bail bondsman would charge between 10%-15% of the amount in cash to issue a surety bond or “bail bond.” In the case of Bankman-Fried’s astronomical bond, 15% of $250 million would be $37.5 million. But Bankman-Fried did not pay $37.5 million for his bond. No, Bankman-Fried actually paid no cash at all for his “$250 million bond.” Nothing. Zero.
There is a second way to acquire a bail bond. A defendant, or someone on their behalf, may pledge collateral in the full amount of the bond. Then, if the defendant fails to appear in court, the pledged collateral is forfeit to the court. So, in Bankman-Fried’s case, that would mean he would need a benefactor to step up and pledge property worth $250 million to get the bond. But that did not happen either.
Instead, Bankman-Fried’s parents promised to pledge as collateral their Palo Alto, California, home, where he'll also be staying under house arrest. The Palo Alto home is rumored to be worth $4 million. And that is the full extent of the collateral pledged to guarantee the $250 million bond. No other collateral was posted or promised.
SBF is not a sympathetic figure. He stands accused of perpetrating one of the largest-ever financial crimes. And yet, those who are hoping for him to await trial behind bars or be forced to cough up millions more in cash or collateral are misguided.
Money bail, whether $2,500 or $250 million, is one of the most insidious features of the U.S. criminal justice system.
Money bail undermines the presumption of innocence, criminalizes poverty, and has no effect on public safety. Roughly two-thirds of America’s jail population — more than 400,000 people — are behind bars awaiting trial. More than 60% of them are in jail because they cannot afford bail.
Experts on this issue have written, “money bail allows poor people who are charged with minor crimes to face indefinite incarceration, while rich people who are accused of the same offenses, or worse, are released simply because they have the funds to buy their freedom.”
People like Sam Bankman-Fried are able to buy freedom while awaiting trial, while those with lesser means are not.
Perhaps the most famous and tragic example is of Kalief Browder:
Mr. Browder, who was 16 years old when he was arrested in 2010 and accused of stealing a backpack, was detained on Rikers Island for three years — about two of which were spent in solitary confinement — without being tried or convicted of a crime. In 2015, at age 22, he hanged himself at his parents’ home in the Bronx.
But our criminal justice system should presume innocence for those with or without money.
Money bail is flawed, in part, because people like SBF are able to take advantage of it in ways that people like Kaleif Browder are not.
The way to fix this problem is not to treat the Sam Bankman Friedmans of the world like we treat the Kalief Browders, it is to treat the Kalief Browders the way that we currently treat the Sam Bankman-Frieds.
Rather than imposing that harshness on people with access to money, we should instead look for alternatives, such as supervised release, that allow everyone the constitutionally-afforded presumption of innocence.
