[Senate Hearing 109-1019] [From the U.S. Government Publishing Office] S. Hrg. 109-1019 THE COST OF CRIME: UNDERSTANDING THE FINANCIAL AND HUMAN IMPACT OF CRIMINAL ACTIVITY ======================================================================= HEARING before the COMMITTEE ON THE JUDICIARY UNITED STATES SENATE ONE HUNDRED NINTH CONGRESS SECOND SESSION __________ SEPTEMBER 19, 2006 __________ Serial No. J-109-110 __________ Printed for the use of the Committee on the Judiciary U.S. GOVERNMENT PRINTING OFFICE 42-938 PDF WASHINGTON DC: 2008 --------------------------------------------------------------------- For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800 Fax: (202) 512�092104 Mail: Stop IDCC, Washington, DC 20402�090001 COMMITTEE ON THE JUDICIARY ARLEN SPECTER, Pennsylvania, Chairman ORRIN G. HATCH, Utah PATRICK J. LEAHY, Vermont CHARLES E. GRASSLEY, Iowa EDWARD M. KENNEDY, Massachusetts JON KYL, Arizona JOSEPH R. BIDEN, Jr., Delaware MIKE DeWINE, Ohio HERB KOHL, Wisconsin JEFF SESSIONS, Alabama DIANNE FEINSTEIN, California LINDSEY O. GRAHAM, South Carolina RUSSELL D. FEINGOLD, Wisconsin JOHN CORNYN, Texas CHARLES E. SCHUMER, New York SAM BROWNBACK, Kansas RICHARD J. DURBIN, Illinois TOM COBURN, Oklahoma Michael O'Neill, Chief Counsel and Staff Director Bruce A. Cohen, Democratic Chief Counsel and Staff Director C O N T E N T S ---------- STATEMENTS OF COMMITTEE MEMBERS Page Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama.... 2 Specter, Hon. Arlen, a U.S. Senator from the State of Pennsylvania................................................... 1 WITNESSES Lappin, Harley G., Director, Federal Bureau of Prisons, Washington, D.C................................................ 3 Leary, Mary Lou, Executive Director, National Center for Victims of Crime, Washington, D.C...................................... 8 Ludwig, Jens, Professor, Georgetown Public Policy Institute, Georgetown University, Washington, D.C......................... 7 Sedgwick, Jeffrey, Director, Bureau of Justice Statistics, Washington, D.C................................................ 4 QUESTIONS AND ANSWERS Responses of Harley Lappin to questions submitted by Senator Kennedy........................................................ 19 Responses of Jens Ludwig to questions submitted by Senator Kennedy........................................................ 26 Responses of Jeffrey Sedgwick to questions submitted by Senator Kennedy........................................................ 29 SUBMISSIONS FOR THE RECORD Dorgan, Hon. Byron, a U.S. Senator from the State of North Dakota, statement.............................................. 33 Lappin, Harley G., Director, Federal Bureau of Prisons, Washington, D.C., statement.................................... 36 Leary, Mary Lou, Executive Director, National Center for Victims of Crime, Washington, D.C., statement.......................... 58 Ludwig, Jens, Professor, Georgetown Public Policy Institute, Georgetown University, Washington, D.C., statement............. 64 Sedgwick, Jeffrey, Director, Bureau of Justice Statistics, Washington, D.C., statement.................................... 71 THE COST OF CRIME: UNDERSTANDING THE FINANCIAL AND HUMAN IMPACT OF CRIMINAL ACTIVITY ---------- TUESDAY, SEPTEMBER 19, 2006 U.S. Senate, Committee on the Judiciary, Washington, DC. The Committee met, pursuant to notice, at 10:33 a.m., in room SD-226, Dirksen Senate Office Building, Hon. Arlen Specter, Chairman of the Committee, presiding. Present: Senators Specter and Sessions. OPENING STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR FROM THE STATE OF PENNSYLVANIA Chairman Specter. Good morning, ladies and gentlemen. The Judiciary Committee will now proceed with our hearing on the cost of crime. This has been a subject of keen interest to me since my days as District Attorney of Philadelphia. My experience there suggested to me that the criminal problems in America could be dealt with by taking two positions: One on career criminals to have life sentences, to separate them from society on a permanent basis. Career criminals commit about 70 percent of our violent crimes. And, second, to provide for realistic rehabilitation for first offenders, second offenders, and especially juveniles, because they would return to society, and that we would be well advised to have realistic rehabilitation, notwithstanding the very extensive cost, from a point of view of protecting society from recidivists and from the dual point of view of giving individuals an opportunity to beat the drug habit, beat the alcohol habit, have literacy training, have job training to re-enter society. Toward that end, I introduced legislation shortly after I was elected in 1980. My views on career criminals were accepted by the Congress and signed by the President on the armed career criminal bill in 1984--robbery, burglary, rape, major offenses, amended in 1986 to include drug sales. It had been characterized by Attorney General Barr as one of the most effective weapons in the arsenal of the prosecutor for law enforcement. In 1985, I introduced the National Violent Crime Program Authorization Act, where I was seeking to reduce violent crime with realistic rehabilitation. At that time I estimated the cost of violent crime at $100 billion and up to $500 billion of pain and suffering was included. When I chaired the District of Columbia Appropriations Subcommittee, I structured a program which cost some $22 million for literacy training and job training in the D.C. prisons. And the OMB Director, David Stockman, made a recommendation to President Reagan that he veto the bill. Pretty unusual to have a document appropriations bill vetoed, and it was, in fact, not vetoed. For many reasons, that program did not succeed and was later abandoned because of cost. We are now considering, among other legislative initiatives, the so-called Second Chance Act, which is designed to give recidivists a second chance--or violators a second chance to try to avoid their becoming recidivists. Interestingly, the Washington Post--interestingly, the--it would not have been so interesting if the Washington Post had commented. It was the Wall Street Journal that said people are finally interested in rehabilitation because it will save money. And saving money has more tangible benefits and seems to attract more supporters than other reasons to rehabilitate and avoid recidivism. So that is a brief statement of a lot of years of focus on this issue, and it is nice to be Chairman of this Committee to put it on the agenda. And it is nice to have an experienced Federal prosecutor, Senator Sessions, who knows these issues and is very much on top of them, so I now yield to my distinguished colleague from Alabama. STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM THE STATE OF ALABAMA Senator Sessions. Mr. Chairman, thank you for having this hearing. I think it is very important. Our witnesses have some very interesting testimony, I believe, and I look forward to hearing that. The dream and hope and belief that we could find a cure for recidivism is still worth great intensive effort and consideration. But history tells us it is not so easy. I believe it was Norm Carson who used to head the prison system, and he said there is nobody, there is no area of the Government in which more people do not think--more people think they know the answer and how to fix it than in prisons. You know, everybody says if you just do this, the prisoners will be straight. But it has proven to be a grim thing, really, and so I will not say any more. I look forward to hearing from the panel. Chairman Specter. Well, thank you very much, Senator Sessions. With Senator Sessions' comments about the prisons, so- called correctional facilities, I made it a point when I was D.A. of Philadelphia to visit all of Pennsylvania's correctional facilities. I saw a lot of familiar faces there, people that my office had convicted and sent to jail. And it is a long neglected subject. Well, I want to turn now to our distinguished panel. We begin with Mr. Harley Lappin, Director of the Federal Bureau of Prisons, an expert in corrections, two decades in prison management prior to being appointed to his current position; recipient of the Attorney General's Award for Excellence in Management; bachelor's degree from Indiana University, and a master's degree in criminal justice and corrections administration from Kent State University. Thank you for joining us, Mr. Lappin, and we look forward to your testimony. STATEMENT OF HARLEY G. LAPPIN, DIRECTOR, FEDERAL BUREAU OF PRISONS, WASHINGTON, D.C. Mr. Lappin. Chairman Specter, Senator Sessions, it is a pleasure to be here and have the opportunity to appear before you today to discuss a variety of issues regarding the cost of crime as it pertains to the Bureau of Prisons. The Federal prison system today encompasses 113 institutions with approximately 192,000 inmates and a staff of 35,000. When I began my career 21 years ago, we had about 45 institutions and just over 32,000 inmates. At the time, when Norm Carlson was the Director, as you mentioned, this was after many, many years of a pretty stable population up until that point. Beginning in the early 1980s and continuing to the present, the Federal Government has played a much more substantial role in the criminal justice system. And with increases in Federal sentences and law enforcement efforts, the increase in the Federal inmate population has been staggering. Our increasing costs are being driven primarily by the increasing number of inmates and the substantial amount of time these individuals will be incarcerated. The Federal inmate population increased by over 10,000 inmates per year between 1997 and 2001 and has been increasing by over 7,000 inmates per year since then. We project the population to increase to over 220,000 inmates in the Federal prison system by 2011. The current average sentence length for inmates in our custody is about 9.6 years. We realize that considerable taxpayer resources are devoted to funding our agency, and we make every effort to use those resources wisely. All of our operations, activities, and initiatives are driven by our mission: protecting public safety through the secure and safe confinement of inmates, as well as returning productive and crime-free ex-offenders to their communities. We have undertaken a number of specific cost containment initiatives over the past few years. Like many other Federal agencies, we are under fiscal constraints and have been making adjustments to our operations to allow us to continue to operate safe and secure prisons at substantially reduced costs. We undertook these initiatives to be able to continue to expand capacity. We will continue to build and manage new Federal prisons at the medium- and high-security level, where we are experiencing the greatest level of crowding and where we expect the greatest number of new admissions. And we will contract with the private sector for the confinement of criminal aliens in low-security facilities. While we have 35 institutions that are more than 50 years old, the majority are relatively new. However, even these facilities have been taxed as a result of crowding, which has increased from 26 percent above capacity in 1996 to 36 percent above capacity today. To counter the deleterious effects of crowding, we have improved the architectural design of our newer facilities, taken advantage of new and improved technologies and security measures, and enhanced population management and inmate supervision strategies. Through research we conducted over several years and encompassing many institutions, we have determined that there is a direct relationship between crowding and violence in our institutions. It is imperative that we get resources to increase bed space capacity and staffing in order to reduce crowding to a more manageable level. Full staffing of all institution positions is very important for our agency. All of our employees in our institutions are law enforcement officers, and we operate under a ``correctional worker first'' philosophy. Both custody and non-custody staff are responsible for inmate supervision and institution security. This allows us to maintain a substantial number of staff who provide inmate programs, giving offenders the opportunity to gain the skills they need for successful re- entry into society. Virtually all Federal inmates will be released back into our communities at some point in time. The vast majority of our inmate programs and services are geared toward helping inmates prepare for their eventual release. We provide many self- improvement programs, including work in prison industries and other institution jobs, vocational training, education, substance abuse treatment, and other programs that impart essential life skills. Federal Prison Industries serves as a prime example of a cost-savings program. Inmates who participate in the Federal Industries Prison program are 24 percent less likely to recidivate, thereby reducing costs to society, notably the cost to the criminal justice system for rearrest, prosecution, and incarceration, as well as the cost of victimization. They are also more likely to maintain employment after release as a result of FPI training. Without a program like FPI, our prisons would be more costly to operate. Due to some recent changes in law and policy, however, we see somewhat of a decline in the opportunity for inmates to participate in this type of program. Chairman Specter, Senator Sessions, this concludes my opening statement. I would be more than happy to answer questions that you have an interest in during this Committee hearing. Thank you. [The prepared statement of Mr. Lappin appears as a submission for the record.] Chairman Specter. Well, thank you, Director Lappin. Thank you for adhering to our time limits, and thank you for your more comprehensive written testimony, all of which will be included in the record, as will all the prepared statements. We now turn to Dr. Jeffrey Sedgwick, Director of the Bureau of Justice Statistics; had been Deputy Director in the Reagan administration; has a bachelor's degree from Kenyon, a Ph.D. from the University of Virginia; had been on the faculty of the University of Massachusetts, Political Science Department, where he is currently on leave. Thank you for being with us today, Dr. Sedgwick, and the floor is yours. STATEMENT OF JEFFREY SEDGWICK, DIRECTOR, BUREAU OF JUSTICE STATISTICS, WASHINGTON, D.C. Mr. Sedgwick. Thank you, Mr. Chairman, Senator Sessions. As you know, I currently serve as Director of the Bureau of Justice Statistics, and BJS is the official statistical agency of the United States Department of Justice and a component of the Office of Justice Programs. Our primary mission is to collect, analyze, publish, and disseminate information on crime, criminal offenders, victims of crime, and the operation of justice systems at all levels of Government. I am pleased to be here this morning to discuss the financial impact of crime on victims and the criminal justice system. I would like to divide my comments into three parts: first, an overview of the National Crime Victimization Survey--one of the Nation's two leading measures of crime; second, the costs of crime to victims estimated by this source; and, finally, the cost of crime in terms of the level of justice system expenditures. What we know of the financial impact of crime on victims is largely based on the NCVS that was initiated in 1972 as the National Crime Survey. Its purposes were to measure the ``dark figure of unreported crime,'' obtain information on characteristics of crime victims and crime events, and provide estimates of year-to-year change. The NCVS Sample is a nationally representative, stratified, multistage sample drawn from the Decennial Census. It is a household- or address-based survey and one of the largest ongoing Government surveys. The sample is interviewed every 6 months and contains 76,050 people and 42,000 households. The NCVS measures crimes both reported and not reported to police. It is considered an omnibus crime survey that measures crimes of violence and theft for household members age 12 and older, provides national estimates with each household interviewed seven times at 6-month intervals over a period of 3 years. The survey has a 92-percent response rate measured by households. The crimes measured by NCVS include rape, sexual assault, robbery, aggravated assault, simple assault, pocket picking or purse snatching, burglary, motor vehicle theft, and theft. The NCVS does not measure homicide. In estimating the financial cost of crime to victims, the NCVS largely relies on four measures: In terms of injury, we ask the question: What was the total amount of your medical expenses resulting from this incident, including anything paid by insurance? For theft, we ask the question: What was the value of the property that was taken? For damage, we ask the question: How much would it cost to repair or replace the damaged items? And for lost work, we ask the question: About how much pay did you or other family members lose as a result of your victimization? Using these categories, we can derive estimates of the financial cost of crime to victims over time by looking at NCVS data from the past decade. If we look at that data, for example, in 1994, we find that there were 10.86 million violent crimes in the United States that resulted in a gross loss to victims of $2.26 billion and 31.01 million property crimes that resulted in a gross loss to victims of $22.59 billion, or a combined total of $24.85 billion measured in constant 2004 dollars. By 2000, the number of violent crimes had fallen to 6.32 million with a resulting gross loss of $1.67 billion while the number of property crimes had fallen to 19.3 million, resulting in a gross loss of $12.96 billion, or a combined total of $14.63 billion measured in 2004 constant dollars. In 2004, the number of violent crimes was 5.18 million with a resulting gross loss of $1.14 billion, while property crimes totaled 18.65 million with a resulting gross loss of $14.71 billion, or a combined total of $15.85 billion. Now, it is important to remember that these NCVS data accurately track trends but yield significant underestimates of the costs of crime. For example, intangible, or non-monetary, costs include fear, pain, suffering, and lost quality of life. These are currently not estimated by the NCVS. Even on tangible costs that involve monetary payments, such as medical costs, stolen or damaged property, wage losses, et cetera, NCVS cost estimates are limited. Costs unreported by victims are assumed to equal zero. Medical costs are limited to short-term costs. And other costs not measured in the NCVS include mental health care costs and the costs of economic or white-collar crimes. On this latter issue, in the second half of 2004, the NCVS included a special supplement designed to estimate the incidence and prevalence of identity theft, a form of victimization not routinely estimated in the NCVS. Findings from that supplement indicated the estimated loss as a result of identity theft in the 6 months from July to December 2004 was about $3.2 billion. Equally important are the tangible and intangible costs of crime to non-victims including the costs of security devices or services for the home, fear, behavior changes to avoid anticipated victimization, and so on. None of these costs are currently estimated by the NCVS. In addition to the costs of crime to victims, there is the expenditure of the criminal justice system, including policing, prosecution and adjudication, and correction. Based on the most recent figures from 2003, the United States spent an estimated $185 billion. Expenditures for operating the Nation's criminal justice system increased from almost $69 billion (in 2003 dollars) in 1982 to $185.5 billion in 2003. Of this amount, local governments funded nearly half, with State governments funding another third. Chairman Specter. Dr. Sedgwick, how much more time will you require? Mr. Sedgwick. About 10 seconds. Chairman Specter. OK. Mr. Sedgwick. Thank you, sir. One way to put these figures in context is to consider the per capita expenditure on administration of justice. That figure for 2003 was $638 for every person in the United States population. This $638 purchased police protection, prosecution and adjudication of criminal offenders, and incarceration of all those found guilty. I can stop there. [The prepared statement of Mr. Sedgwick appears as a submission for the record.] Chairman Specter. Thank you very much, Dr. Sedgwick. We will come back on the Q&A for amplification. We now turn to Dr. Jens Ludwig, Associate Professor of Public Policy at Georgetown University, faculty research fellow of the National Bureau of Economic Research, and a member of the Steering Committee of the National Consortium on Violence Research at Carnegie Mellon; B.A. from Rutgers and a Ph.D. in economics from Duke. Thank you for being with us today, Professor Ludwig, and we turn the floor over to you. STATEMENT OF JENS LUDWIG, PROFESSOR, GEORGETOWN PUBLIC POLICY INSTITUTE, GEORGETOWN UNIVERSITY, WASHINGTON, D.C. Mr. Ludwig. Chairman Specter, Senator Sessions, thank you very much for inviting me to testify this morning. It is an honor to appear before this Committee to discuss what is known about the cost of crime to American society. I believe the costs of crime to America are plausibly on the order of $2 trillion per year. That is trillion with a T. Around two-thirds of these costs are due to what are common called ``street crimes,'' while the remaining one-third is due to white-collar or economic crimes. There are, unavoidably, some uncertainties associated with generating an estimate of this sort. The costs of crime in the United States could be somewhat higher or somewhat lower than my figure suggests, but I believe the $2 trillion is a defensible best estimate for what the costs of crime to American society might be each year. My calculations suggest that the cost of crime are enormous by any standard. By way of comparison, total gross domestic product in the United States in 2004 was equal to $11.7 trillion. Put differently, the reduction in the quality of life that Americans experienced due to crime, what one might call a ``crime tax,'' is the equivalent of around 17 percent of U.S. GDP. While gun violence accounts for just a small share of the total number of crimes that occur that in the United States each year, these are disproportionately costly crimes to society that together account for at least $100 billion of costs. Street crime in the United States, particularly violent crimes, are disproportionately concentrated among our Nation's poorest residents, yet the costs of crime are much more evenly distributed across society than these victimization statistics would suggest. Given the enormous toll that crime imposes on American society, even costly new initiatives to reduce crime can generate benefits to American taxpayers and citizens that justify the increased Government expenditures. For example, one of the most famous early childhood model programs in the United States for poor 3- and 4-year-old children is called Perry Preschool, which was implemented in Ypsilanti, Michigan, in the 1960s. Perry participants have now been followed up to their 40th birthdays, and the program is estimated to generate around $6 in benefits to society for each $1 spent on the program. The costs of reduced crime alone account for more than half of the benefits from the Perry Preschool program, which implies that the value of crime reduction alone from this targeted preschool intervention exceeds the overall costs of the entire program. More generally, the cost-effectiveness of anti-crime policies and programs can often be enhanced by targeting resources at the highest-risk people, such as ex-offenders, career criminals or gang members, or at particularly costly aspects of the crime problem, such as crimes that involve guns. Finally, if crime really is a $2 trillion per year problem in the United States, then in my view we would benefit by spending much more than we currently do on research and development efforts to identify new and more effective ways to prevent crime. It is my understanding that the National Institute of Justice's current research budget annually is substantially smaller than that of the National Institutes of Health. I believe there would be great social returns to increased R&D spending for NIJ and other activities of this sort. This concludes my opening statement. I would be pleased to answer any questions that you might have. [The prepared statement of Mr. Ludwig appears as a submission for the record.] Chairman Specter. Thank you very much, Professor Ludwig. Our final witness is Ms. Mary Lou Leary, Executive Director of the National Center for Victims of Crime. She served as Deputy Associate Attorney General and Chief of Staff for the Office of Associate Attorney General, an Assistant U.S. Attorney, and Acting Director of the Office of Community Planning in the Department of Justice. She has a bachelor's degree from Syracuse, a master's degree from Ohio State, and a law degree from Northeastern. Thank you very much for being with us, Ms. Leary, and we look forward to your testimony. STATEMENT OF MARY LOU LEARY, EXECUTIVE DIRECTOR, NATIONAL CENTER FOR VICTIMS OF CRIME, WASHINGTON, D.C. Ms. Leary. Thank you, sir. Good morning, Chairman Specter and Senator Sessions. I want to thank the Committee for holding this hearing to examine the costs of crime. Through our testimony about the costs of crime, we hope to help you look beyond the dollars that are associated with medical costs, funeral costs, lost wages, and the like to see the intangible but lasting impact on individual victims of crime and communities. On an individual level, victims and those who serve them can tell you more about the true cost of crime, and it goes far beyond dollars. At the National Center, we hear stories every day from victims who call our National Crime Victim Helpline. We see how victimization leads to increased substance abuse, higher rates of depression and posttraumatic stress disorder, increased risk of suicide, homelessness, higher rates of unemployment and underemployment, and negative long-term consequences. The impact can be physical, emotional, financial, and social, and it reaches way beyond the individual victim to encompass friends, family, communities, coworkers, and schoolmates. Victims of violent crime are at particularly high risk. Almost 50 percent of rape victims, 37 percent of stalking victims, and 32 percent of physical assault victims will develop PTSD, posttraumatic stress disorder. PTSD has a profound effect on a victim's quality of life and just the ability to function from day to day. People with PTSD often suffer from very disturbing flashbacks. They can be jumpy, irritable, very easily startled, constantly on guard. And they may have difficulty concentrating or sleeping. If they do not get treatment, many PTSD sufferers will suffer this way for 10 years or more after the event. Moreover, we are just beginning to understand the cost of crime to our Nation's youth. Victimization at this crucial point in human development has far-reaching impact. Teenage victims report more truancy, negative contact with teachers, hostile conflict with other students. This disrupts their academic performance and really impedes their ability to get a career later on. The link between teen victimization and substance abuse, teen pregnancy, and eating disorders is also well established. But one of the most alarming impacts of teen victimization is the relationship between that victimization and their becoming a perpetrator. Being a victim of crime has been identified by researchers as the single most significant factor that contributes to teens later becoming perpetrators of crime. What about the impact of homicide? Nobody can really fully understand what a homicide survivor goes through. Everybody in this room can certainly understand a family's shock and grief upon learning of a loved one's death by violent ways. But there are other dramatic impacts that we have not even considered. Time and time again, we hear about entire families who are devastated when they lose a family member to homicide. Marriages break up. Families no longer celebrate holidays because they think it is just not right to do that after one of the members has been the victim of murder. Survivors of homicide struggle with maintaining careers. Many of them cannot return to work on time to save their job. And in communities where there has been a homicide, oftentimes the family members and the rest of that community, if it is a homicide committed on the street, have to walk by those blood-stained sidewalks every single day, and oftentimes for years to come. The impact of other violent crime is also far-reaching. We know about the immediate aftermath when you have hospitalization and treatment of an assault victim or battered spouse. But after discharge, what about the scars, those invisible scars, or even the visible ones for victims who are unable to afford reconstructive surgeries so they can go out in public or get a job? People call our helpline every single day and tell us that they are traumatized, unable to leave home; their marriages have broken up; they have gained 100 pounds; they are terrified to sleep in the room where they were attacked. We hear about these intangible costs day in and day out, and not enough is being done to address those intangible costs. Finally, we know that the impact of identify theft goes way beyond just dollars. People can spend the rest of their lives after that kind of victimization trying basically just to restore their own identity and financial solid footing, or the elderly who are stripped of their life savings and suddenly face their old age living in poverty, and oftentimes betrayed by their very caregivers. The emotional impact of that betrayal is devastating in and of itself. Even minor crimes can have a far-reaching impact. Victims whose car is stolen, how then are they to get their kids to daycare or to school? How are they to get to work to support their families? Even these minor crimes can destroy a family's life. So it is very important when we talk about the cost of crime to use dollar figures just as a starting point. The real cost of crime includes the costs of the quality of an individual life and of society's life at large, from substance abuse, depression, PTSD, homelessness, loss of employment, school dropouts, and other consequences to our social system at large. Chairman Specter. Ms. Leary, how much more time do you require? Ms. Leary. I am done. I thank you for this opportunity. The National Center looks forward to working with this Committee to address the costs of crime. [The prepared statement of Ms. Leary appears as a submission for the record.] Chairman Specter. Well, thank you very much, Ms. Leary, and thank you all. The testimony and the prepared statements are very profound. I am just sorry there are not more people here to listen to them. The press table has all empty chairs, and the television is internal only. It is true that our colleagues have a great many matters, especially in the last 2 weeks of a session before we adjourn at the end of next week. But when you talk about rehabilitation, you do not strike a very sexy note, regrettably. And the testimony that is being given here today is really very significant. Professor Ludwig, how come you have such a low figure for the cost of crime at $2 billion? Where did you get that figure? Mr. Ludwig. The figure is $2 trillion per year. Chairman Specter. I cannot hear you. Speak up. Mr. Ludwig. The figure is $2 trillion per year. Chairman Specter. I meant trillion. We get mixed up on zeros around here. [Laughter.] Mr. Ludwig. It is easy to do, Senator. Chairman Specter. Where did you get the figure? Come on. Mr. Ludwig. The figure is so large because it is intended to try and put a dollar value, as difficult as that might be, on the profound intangible costs that Ms. Leary was describing to the victims of crime. Chairman Specter. Profound intangible costs. Mr. Ludwig. Profound intangible costs. Chairman Specter. OK. Now, where did you get the figure? Mr. Ludwig. Sir, the figures come from--basically the figures come from trying to find out how members of the public are willing to pay to reduce the risk of crime victimization to themselves and their loved ones. Chairman Specter. How much the members of the public are willing to pay to reduce-- Mr. Ludwig. Are willing to pay out of their own pocket in order to reduce the costs of crime, the risks of crime. Chairman Specter. How much are they willing to pay? Mr. Ludwig. Well, I estimate that those costs alone account for about $700 billion of my $2 trillion figure. Chairman Specter. $700 billion they are prepared to pay? Mr. Ludwig. $700 billion for the elimination--the figures that we have imply that all together the public-- Chairman Specter. Where do you get that figure when cities are not putting up any more money for their police forces? They are looking for the Federal Government and the States to solve their local crime problems. They are not taxing to put more police on the street. Mr. Ludwig. Well, I think that the evidence that we have suggests that the value to citizens from increased spending on things like additional law enforcement efforts would, in fact, generate value to society that exceeds the costs. Chairman Specter. Let me interrupt you. You are up to $700 billion. Now, you have got $1.3 trillion to account for on your way to $2 trillion. Proceed. Mr. Ludwig. Sir, we have got $700 billion in costs to victims. We have $700 billion from white-collar economic crimes. So I am up to one-point-- Chairman Specter. Where do you get that figure? Mr. Ludwig. Sir, that comes from a variety of surveys of small and large businesses across different industries in the United States. Chairman Specter. Who made the surveys? Mr. Ludwig. There are a variety of different surveys of firms in the insurance industry, one of the national-- Chairman Specter. Are those in your prepared text? Mr. Ludwig. They are in my prepared text, Senator, yes, sir. So that brings it up to $1.4 trillion, and then the residual that gets us up to $2 trillion comes from things like explicit Government expenditures, as Dr. Sedgwick was mentioning, as well as costly private measures that individuals and businesses undertake to protect themselves against the risk of crime. Chairman Specter. I am pressing you on the details because if we can prove a $2 trillion figure, you would attract a lot of attention. Mr. Ludwig. My written testimony, Mr. Chairman, includes a technical appendix that tries to spell out the methodology in perhaps painfully gruesome detail. Chairman Specter. I am not neglecting the other three witnesses. I plan to come back for a second round here. Director Lappin, you say that educational programs have a benefit of nearly $6 for every $1 spent. How much does your Bureau, the Federal Bureau of Prisons, spend on education? Mr. Lappin. Well, let me just say for the record that the numbers you are referencing are actually out of a piece of research from the Washington State Institute of Public Policy in 2001, where they compared the investment of dollars spent in education and vocational training and their supposed impact on reducing crime, that is, reducing prosecutions, incarcerations, and so on. And as you indicate, a benefit of education is for every dollar invested, about a $6 savings. Chairman Specter. Well, how do they come to that conclusion, if you know? Mr. Lappin. I think through--again, I am not an expert specifically on how this research was done. Your staff, in fact, asked for that research earlier today, and we have provided a copy of that to them. Annually, we invest about-- just a moment and I will give you the exact number. We spent about $102 million providing education, which includes GED, English as a second language, parenting, and other associated classes, as well as vocational training, to the 192,000 inmates in this past year in the Bureau of Prisons, so about $102.9 million a year goes toward education and vocational training, about $53 million toward drug treatment, and about $33 million or so toward religious programs. So that is kind of an example of the investment we make in programs to hopefully increase or enhance the skills of inmates. And let me just say in general, we are thrilled, to be honest with you--by ``we,'' I mean me as the Director of the Bureau of Prisons and other directors of corrections around the country--thrilled that the President, the Senators, Congressmen, and State and local Congressional staff are talking about re-entry and the impact of these programs on inmates, because, one, we want to invest that money wisely, and we want to make sure that that money we invest is being--the impact is reducing recidivism, because at the end of the day, that is what it is all about, is returning to the community offenders who are more likely to be successful, less likely to reoffend, less likely to victimize. Chairman Specter. The red light went on in the middle of your answer, and I am going to come back to you, Director Lappin, to ask you in the next round how effective your correctional programs are. You comment about people--you are delighted to hear people talking about it. I do not hear nearly enough talk. In fact, I do not hear much talk at all. But I am glad to yield to Senator Sessions because he will talk about it. Senator Sessions. I have been observing this crime situation for quite a number of years, from the time I was--in the mid-1970s, I was a young prosecutor, and I tried to think about it and ask myself what is happening. Mr. Sedgwick, our murder rate today, the rate of murder, as I recall, compared to the murder rate in the late 1970s or early 1980s is about half of what it was. Mr. Sedgwick. Substantially lower, that is correct. Senator Sessions. I want to hear that. The murder rate in America is one-half of what it was 25 years ago. When Ronald Reagan got elected, a lot of people think he got elected to fight the cold war. He really got elected because people were shocked by the doubling of the crime rate in the mere 10 years, surging 12-, 15-percent rate increases of crime, and there was an article that came out--I do not know if you remember it, Professor Ludwig or Dr. Sedgwick, by a study that rebutted and debunked the idea that was afoot at the time that prisons are of no value, that social programs and education would end crime, and that this was the mantra of the 1980s--the 1970s. And it said basically, after great intensive survey and study, that these programs had little, if any, impact on crime, on recidivism in prisons. In fact, I would note, Mr. Lappin--and I am just looking at your numbers here. Your drug treatment program--and you have some good drug treatment program. We spend a lot of money on that. You said that the recidivism rate was--16 percent less likely to recidivate and 15 percent less likely to relapse in drug use within just 3 years, in a 3-year period. So I am not saying that is insignificant. And the numbers we are dealing with, 15 percent is significant. But anybody that has this idea that we can just have a drug treatment program in prisons and they are all going to go out and not use drugs again are living in a dream world. We have been trying this for 30 years. You also suggest that those who participate in educational or vocational training, in your numbers, Mr. Lappin, are 33 percent less likely to recidivate. But wouldn't you admit that people who are sort of self-select--there are several prisoners in a prison. Those who tend to take advantage of the education programs already--and this is what the study that I referred to in the late 1980s said. It was a moral, personal, intellectual decision by a person who is incarcerated whether or not they are going to continue a life of crime. They have to decide: Do I want to be in and out of jail the rest of my life? Or do I want to make something of my life? And how that occurs to them comes from various different ways. But, at any rate, wouldn't you admit that that is not to say that if every prisoner in American Federal prisons undertook an education program that all would reduce recidivism by 33 percent? Mr. Lappin. You are correct in that when you look at the inmates in our custody, we have willing participants and we have unwilling participants. I am confident to say that the majority, 60 to 70 percent, of the inmates at least in our custody are typically willing participants, and willing to get involved in these programs. But you are right, even for those willing participants, only a portion of them are successful in the end. You are absolutely correct in that just because you happen to participate in a vocational training or an education program you are going to be cured. We are certainly not seeing that. We certainly see enhanced chances of success. Senator Sessions. Yes, even at the margin, 10 percent, 15 percent. Mr. Lappin. That is right. Senator Sessions. That is worth considering. Mr. Lappin. That is correct. Senator Sessions. And it ought to be a factor in our processes. I noticed that you said that--I noticed also that the crime rate was up a little bit this past year, which was 2 percent. Is that what it was overall or something? That is not a good--we have been having some good numbers. But let me just say one more thing. You had a 10-percent decline in the recidivism rate over 1983 to 1994, but it was really from 44 percent to 40 percent. All I would say, first of all, one of the most important things for us to understand about crime, there is not a magic bullet. There is not one program that--we have tried every kind of program in prison, and we have invested all kinds of experimental programs, and the numbers are not where we would like them to be. I would contend that there still remains in this country a limited number of people who will rob, rape, shoot, and kill you. There are not that many. And if you identify those and they serve longer periods of time, you will have a reduction in crime in America. And that is what happened. The Federal Government adopted a tough mandatory sentencing policy, without parole. States have followed with repeat offender laws, and we have surged the number of people in prison, and we have had a significant drop in the crime rate when the American people in the 1980s would not have thought it was possible that we were going to be reducing by half the murder rate in America. My time is up, and maybe we will get into some of these solutions as we go forward, but I think we should not underestimate the fact that if you look up a group of violent criminals, 100,000 of them, and keep them in jail, that 100,000 will not commit violent crimes. And if they are released, you are going to have a high recidivist rate among a lot of those, and if we are smarter about who we release, smarter about who stays in jail, we can reduce the pressure on our prisons without increasing the threat to the public. And I do not know how to do that. Thank you, Mr. Chairman. Chairman Specter. Thank you, Senator Sessions. Director Lappin, do you track the people you release to see the percentage of recidivism? Mr. Lappin. Yes, we do. We do research to assess our programs, and in doing so we do tracking of offenders. Chairman Specter. Do you track them all? Mr. Lappin. We do a sampling. We do a representative sample of those who are released. We do not track all of them. We release about 41,000 offenders a year back into this country, and about 20,000 get released to other countries. Chairman Specter. Would you provide in writing for the Committee how many you track and what your findings are by way of recidivism? Mr. Lappin. Yes. We actually have-- Chairman Specter. And would you give me your best estimate as to how many of these 192,000 inmates you have you think are susceptible to rehabilitation? And would you give us the figures as to what it would cost on education, literacy training, detoxification, job training, and re-entry so that we can make quantification as to what appropriations we would have to deal with those issues? Dr. Sedgwick, does your role in crime statistics give you insights into the list of questions I just posed to Director Lappin? Mr. Lappin. We have a very strong interest in recidivism and re-entry studies. We find them enormously difficult to conduct. They are very expensive. Chairman Specter. We do not have a whole lot of time, and we are going to have just a second round. Would you respond to the same question as to what it would cost to trace them? You find out from Director Lappin how many he traces and find out what it would cost to trace them. Mr. Sedgwick. Sure. Chairman Specter. And what statistical program you would recommend to make a determination as to how many recidivists there are and see if you can shed some light on what should be done to avoid recidivism. Mr. Sedgwick. Right. Chairman Specter. You are sitting on a gigantic statistical cumulation of information. Mr. Sedgwick. Yes, we are. Chairman Specter. When you have the techniques and procedures to response to those questions, we would like to know that. Mr. Sedgwick. OK. Chairman Specter. Ms. Leary, your statement is really fascinating when you talk about the impact on the victims, and particularly at risk of developing post stress disorder, symptoms up to 10 years, a negative impact on truancy for those 12 to 19, your conclusion that the victims of crime are likely to commit further criminal offenses, marriages broken up in the aftermath of homicide involving the loss of a child. I would be interested, the Committee would be interested in how you might list all of these factors and how you would go about quantifying the cost. That is a pretty hard thing to do, but jurors are asked to do that all the time on pain and suffering. That is the category. How would you approach that, Ms. Leary? Ms. Leary. Well, it is a really difficult research question, and, you know, one of the problems that we have in really quantifying these things is that there is not enough research being done on the intangible costs of crime. Chairman Specter. Would you give us your ideas as to how the research ought to be conducted? Take your statement to the next steps so we can try to quantify it. Professor Ludwig, we are going to be contacting you for more specification on the $2 trillion. Mr. Ludwig. Certainly. That would be terrific. Chairman Specter. OK. My light is on. Ms. Leary. Yes, I am not a researcher, but I could say that one idea that comes to mind is an addendum to the National Crime Victimization Survey that BJS does, which is a pretty good tool for finding out about crime that actually doesn't even get reported to the FBI. Because, you know, when the FBI says rape is down this year and, you know, where there are only so many reported rapes during 2005 or 2006, people assume, Oh, gee, that is terrific, there are not as many rapes as there used to be. Well, all that means is not as many rapes were reported, but it does not mean that not as many rapes are actually being committed. So I would say that probably a survey that goes to that crime which is not reported necessarily to authorities would be the way to start, and I can talk with Mr. Sedgwick about that. I would be happy to do that and to respond to this Committee. Chairman Specter. Well, that is--my red light went on, and if you would also deal with the question about unreported crime and try to quantify the costs of unreported crime, that is pretty tricky. We have a vote coming up at noon that we have to get ready for, so we are not able to go into as much detail as we would like to at the hearing. But the issues which I have posed will be very helpful as a followup. Senator Sessions? Senator Sessions. Thank you. Ms. Leary, it is good to see you again, and thank you for your leadership and service in the Department of Justice. I have a staff person that still--just now, after, I think, 5 years getting through, you know, an identity theft problem. I know a young lady that was assaulted, knocked down, her backpack stolen, had to have knee surgery because she was twisted so badly when she was knocked down by a criminal. So you are right that things are significant. Mr. Sedgwick, you remember the Rand Study on California prisons that showed quite number of prisoners committed hundreds of crimes, and, in fact, a certain percentage, a significant percentage, said they committed as many as 200-plus crimes a year. Mr. Sedgwick. Right. I remember that study very well. Senator Sessions. They would knock in your car window and do two or three a night, break in your house, break in your business, and those kinds of things, and leave a trail of debris and broken people who had to put in burglar alarms, and all of these things that occur. It is a big deal. Let me ask you, Mr. Lappin, I understand we have a substantial number, maybe 27 percent of our Federal prison system involved non-citizens. Mr. Lappin. That is correct. About 26, 27 percent are non- U.S. citizens. That is about 48,000 inmates in our custody are non-U.S. citizens. Senator Sessions. Now, does that include the people that are detained at the border until they are released through ICE agents? Mr. Lappin. It does not. That is-- Senator Sessions. It does not include the people that they are detaining for release and deportation? Mr. Lappin. That is a portion of those who are detained at the border. Those who are convicted and sentenced to Federal prison. So there is another group who are in detention status, either pending return or pending trial, that is typically the responsibility of ICE, Bureau of Immigration and Customs Enforcement, or the Marshals or some other temporary holding group until a decision is made about their return or-- Senator Sessions. Let me say, I think overwhelmingly people who come to our country are not criminals, even if they come illegally to work here, but I do believe there is a trend out there that I sense that people who are in trouble in their own countries for criminal activities might find that the best thing to do is skip town and come into the United States, because everybody knows them back in their home country. So I think we need to do a better job of managing that, and that would have a substantial effect. Mr. Sedgwick, your Crime Victimization Study is designed to go beyond police reports. Mr. Sedgwick. Correct. Senator Sessions. They do have some potentials for manipulation. If a police chief wants to say he is making progress in fighting crime, he will report that crime rates are down. If the police department got cut in its budget for 2 or 3 years, he will report that police crime is up. Now, that is the cynical view, but police do have some ability to make the numbers up here higher by reporting more arrests or lower if they choose. Mr. Sedgwick. Correct, and that is-- Senator Sessions. The Crime Victimization Study, briefly, some believe it is more accurate than the police reports. Mr. Sedgwick. Certainly, it is better measure of the victim's experience with crime. Ultimately, the UCR numbers are a good measure of a police department's experience with crime. Senator Sessions. Right. Mr. Sedgwick. But if you want to get beyond that and say what is an American citizen's experience with crime and victimization, the NCVS is a better measure of that. It was designed to do that and complement-- Senator Sessions. Because that surveys people to see if they have been affected by crime. Mr. Sedgwick. Correct. Senator Sessions. Mr. Lappin, 9 years you say is the average sentence served in the Federal prison? Mr. Lappin. 9.6 years. Senator Sessions. And that is without parole. Mr. Lappin. That is correct. Senator Sessions. It used to be in the old days you would get 15 years, you would probably serve about 3. Now in the Federal system, you get 15 years, you probably serve 13 of those. Mr. Lappin. Pretty close. Senator Sessions. Something like that. In your view--and I will ask each of you this briefly, because my time is up--could we reach a higher level of sophistication in identifying those who deserve the longer periods of time and those who we could take a chance on to allow shorter periods of sentencing? Mr. Lappin? Mr. Lappin. I believe we could. In fact, there are some systems in place today that identify some individuals who we think are going to be more successful in the community and as a result can have some time off of their sentence. These are typically nonviolent offenders, and I will use the drug legislation that was passed a few years ago as an example. Senator Sessions. The crack dealer who has got 9 years or 15 years, you are not going to be able to let him out in 7 if you think there is going to be a good chance-- Mr. Lappin. Not if they have violence in their background. Again, this is primarily for nonviolent offenders. This is the only program that we have that really gives the inmate an opportunity to serve less time given their performance in prison and their background. Senator Sessions. All right. Mr. Lappin. So I think we could do a better job of that. Senator Sessions. And at the front end and at the back end. Mr. Lappin. Yes, we could. Senator Sessions. Mr. Sedgwick? Mr. Sedgwick. I think the Bureau of Justice Statistics can improve on our ability to provide benchmarks on re-entry success and recidivism avoidance. Senator Sessions. And I would agree. I believe it was Ms. Leary that said--or somebody. Research is important. We need the best information we can get. Mr. Ludwig, briefly? My time is over. Mr. Ludwig. I agree with my fellow panelists. Senator Sessions. Thank you. Ms. Leary? Ms. Leary. I do as well, and when I was at OJP, I saw the benefit of the research and the studies that were done. And if we want to base what we do on what we know, we have to fund research and development. Senator Sessions. Thank you, Mr. Chairman. Thank you for having this hearing. I think it is very valuable. Chairman Specter. Thank you, Senator Sessions and thank you all. The topic is an extraordinarily complex one, and we have started the process of trying to analyze how to cope with it. And if we had some handle as to the specifics on recidivism to measure what education, job training, and literacy training, et cetera, would prevent recidivism, we would be able to move ahead. And we ought to see if we cannot get a handle on the unreported crimes, which is hard. We ought to try to get a handle on the intangible costs. And if you can document your $2 trillion figure, Professor Ludwig, we might have a lot of support from casualty insurance companies and businesses which lose hard dollars. Thank you all, and that concludes our hearing. 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