SANTA CLARA COUNTY DELAYS BAIL MACHINE

Bail Bond Firm Threatens Lawsuit Over Lack Of License

Responding to pressure from the bail bond industry, Santa Clara County
Jail officials delayed the debut Wednesday of a bail-dispensing
machine while they double-check whether it is legal.

County officials said the decision to postpone the use of the machine
came after a bail bond company in Sacramento threatened to sue the
county. The company, Allied Bail Bonds, contends the bail kiosk is
illegal because the operator is not licensed by the state.

So although the county installed and demonstrated the convenience
machine at a news conference Wednesday, the public will not be allowed
to use it until the state Department of Insurance, which regulates the
bail industry, issues a legal opinion.

``We're pretty confident that the Department of Insurance will rule in
our favor, but we want to be sure,'' Deputy County Counsel Brian Carr
said.

In general, the $10 billion national bail bond industry feels
threatened by the kiosks and regards the machines as unfair
competition.

With a swipe of a credit card, the bail kiosk would allow eligible
defendants to get out of jail within moments of being booked instead
of waiting hours -- or even days -- for a relative or bail bond agent
to arrive with the necessary cash.

The kiosk operator, Judicial Solutions Inc., argues it does not need a
bail bond license because it is not fronting money to defendants, just
enabling them to tap into their own credit lines. The company has
operated a similar kiosk in San Luis Obispo County since June and
claims the machines will be as ubiquitous as ATMs in the near future.

The issue should be clarified by mid-November, said Chief Timothy
Ryan, the county's top jail official. Until then, the machine will
remain unplugged in the lobby of the Administrative Booking Center
near the Main Jail in downtown San Jose.

``This is a totally new arrangement, and the Department of Insurance
is looking into the various issues surrounding it,'' said Scott
Edelen, a spokesman for the Department of Insurance. ``Only after
further review will the department be able to make a decision.''

Santa Clara County supervisors support the bail kiosk not only because
it would be a convenience to people who have been accused of but not
convicted of a crime, but also because they believe eliminating jail
stays will save the county money and reduce jail crowding. It costs
taxpayers $62 to keep an inmate overnight in jail.

``It's most appropriate for Silicon Valley because it uses the latest
technology,'' said Supervisor Pete McHugh, chairman of the public
safety committee.

Even if it turns out the kiosk is not legal to use for bail, it could
be used to pay court fines or by inmates who want to buy sundries at
the jail commissary, Ryan said. If the Department of Insurance
declares it legal, the county will consider a request by the local
bail bond industry to limit its use to defendants with low bails, Ryan
said.

Bail bond agents, who charge a fee of 10 percent of the bail amount,
admit they sometimes ignore the defendants most likely to use the
kiosk because the fees involved are so small. Anyone who has been
accused of a crime that carries bail may use the kiosk.

But the heaviest use is expected to be from those arrested for
relatively minor crimes with bails under $5,000 -- well within the
limit many people carry on their credit cards. Those crimes include
vandalism, assault, drunken driving and drug possession. On top of the
bail amount, the arrestee will pay a 10 percent surcharge to the
private company that operates the kiosk -- the same fee charged by
bail bond agents.

The bail industry had claimed that the kiosk carried hidden charges in
the form of cash-advance fees and interest payments by credit card
companies. However, a spokesman for the bail kiosk company said
Wednesday that the kiosk has been programmed so that those using it
will not have to pay cash-advance fees, though they will have to pay
interest on their credit cards.

Checked-by: Patrick Henry