TRUST FUND TROUBLES

INMATES IN ARIZONA'S PRISONS CLAIM THEY HAVE $11 MILLION AT THEIR DISPOSAL. THE STATE DOESN'T LIKE THAT.

Twenty-three years ago, Arizona lawmakers set up a trust fund for the state's prisoners. The lawmakers' idea was simple enough--profits generated from prison convenience stores, hobby shops and the prisoners' telephone system would go into a Special Services Fund that would be held in trust by the Arizona Department of Corrections. Trust money is to be used by the DOC only for the "benefit, education and welfare" of prisoners, the 1972 law says.

Now Arizona lawmakers want to amend the law and get rid of the trust fund, which is worth about $11 million.

So does the Arizona Department of Corrections.
And if you carefully read House Bill 2367, which deals with prison medical issues, you'll see that tacked to the end of that bill are a couple of paragraphs that completely do away with the trust fund. The bill has passed through the state Senate and is now awaiting final approval in the House.

On one level, the reason behind the politicking is clear. Inmates say they should control the money, since their dollars feed the trust fund. The state, on the other hand, says the DOC should control the fund.

But another reason the DOC and legislators are so interested in getting rid of the trust fund, defense lawyers say, is that prisoners threaten to use the trust fund as fodder for lawsuits against the DOC.

Prisoner advocates point out that prisoners are beneficiaries of an "implied trust" set up by the legislature in 1972, and as beneficiaries of the trust, prisoners have a right to say how the money is spent. They can sue the state for breach of fiduciary duty if they think the state mishandles the money.

And so far, at least one prisoner who didn't like how the DOC spent the trust-fund money has sued DOC director Sam Lewis in U.S. District Court in Phoenix.

Max Dunlap, who is serving a life sentence for the murder of Arizona newsman Don Bolles, claimed in his 1994 lawsuit that the DOC's efforts to remove weightlifting equipment from the prisons amounted to a violation of trust. Dunlap reasoned that the weights had been purchased with trust-fund money generated by the prisoners themselves. Therefore, Lewis could not legally remove the weights from the prisons, since the prisoners themselves paid for them with their trust-fund money, Dunlap told the court. "In my opinion, this legislation is designed to preclude prisoners from litigating as beneficiaries of the trust," says William Foreman, Dunlap's lawyer. The case is ongoing.

So far, inmates have not filed a lot of trust-related lawsuits, says Ron Mayes, legislative liaison for the DOC. But lawsuits are "certainly possible if the word 'trust'" remains in the 1972 statute, he says.

Jeff Hood, the DOC's operations officer for adult institutions, refused to comment when asked whether the DOC's attempt to change the statute stems from a fear of prisoner lawsuits.

In changing the law and getting rid of the trust fund, the DOC just wants to make it clear that "the state controls that fund, inmates do not," Hood says. "The intent of changing the statute language is to clarify who has control of the fund." Hood says the DOC does not want to spirit away the money for other uses. The law would still require the state to spend money generated by the prisoners themselves on the "benefit, education and welfare" of inmates.

Today, the trust fund is worth about $11 million. Each year, the DOC spends about $10 million of the fund on law libraries, prisoner store supplies, recreational activities, educational supplies, medical expenses for prisoners who assault other prisoners and the prison cable-TV system, Hood says. The remainder of the money is invested by each prison in interest-bearing accounts, he says.

Each prison has its own Special Services Fund, says Hood. A committee, which includes inmates, decides how the money is spent, he says.

Prisoner advocates say the system works as it is now. They worry that if the trust fund is killed, prisoners would no longer have any say at all about how the money is spent. DOC officials say the prisoners would remain on fund committees even after the law is changed.

"If it ain't broke, don't fix it. This fund has been very efficient since 1972, and there is no reason to change it except for Mr. Sam Lewis and his power-tripping ego," says Donna Hamm of Middle Ground, a prisoner advocacy group. "As long as the DOC is in its empire-building mode, it reaches its tentacles into every area," she says. "This is not empire-building," counters Mike Arra, spokesman for the DOC. "That's just wrong. Because nothing's going to change. The money is still going to be spent in the same way. The intent is not to change the way we use the funds.

"We want to clarify the issue of defining this as a trust. In a practical sense, the department controls that money. The way the law reads now, it could be interpreted that inmates have some say in how the money is to be spent," he says.

"We think it makes sense that the gatekeepers should control the money," says Arra.

 
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