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Arnold Foundation Reels from Series of Setbacks

John Arnold

In case you didn’t know the driving force behind the recent spate of anti-bail efforts nationwide has been an entity called the Arnold Foundation. The non-profit foundation was started by John Arnold, a former executive of the disgraced Enron Corporation, and took up bail reform as its reason for being.

Since picking up the standard of bail reform the foundation has been telling anyone who would listen that bail bonds in America was a corrupt enterprise that victimized the poor. And that they had the answer to this corrupt system in the form of a computer program designed in secret that would negate the need for cash bail. That program alone would determine if a person should be either released or held. With the presumption being they should be released.

The foundation’s minions then spread out nationwide and tried to sell their program to gullible state legislators. To no one’s surprise they found plenty in places like New Jersey and California. But now, in a truly ironic twist, it’s the Arnold Foundation itself that’s reeling from charges of corruption. On October 4, lawyers for the foundation filed an 18 page criminal complaint against foundation director Denis Calabrese alleging that he stole millions of dollars from the organization and received huge kickbacks from various contractors.

Shady Dealings at the Arnold Foundation

According to the suit Calabrese is alleged to have exploited the foundation’s trust as part of a plan to steal millions. Lawyers for the foundation state that they only became aware Calabrese might have been up to no good when the government subpoenaed the foundation in connection with a tax fraud case they were pursuing against Calabrese. (He would eventually plead guilty to tax evasion and hiding vast amounts of income from the government in May 2019.)

The notion that those behind the foundation didn’t know their director was a wheeler dealer strains credulity when you consider the lengths most charitable organizations go to to vet their managerial team. But Arnold’s lawyers insist Calabrese pulled the wool over everyone’s eyes and in the process managed to steal over $2 million which he funneled into various offshore accounts.

Calabrese also allegedly had undisclosed financial connections with two contractors hired by the foundation: Raconteur Media Company and Pathfinder Communications. Over the course of several years the Arnold Foundation paid Pathfinder more than $5.6 million and Raconteur more than $750,000 for various services rendered to the organization with Calabrese allegedly pocketing a handsome percentage of that income.

The Failure of Risk Assessment

That a foundation started by a former Enron executive would have allegations of corruption leveled against it probably shouldn’t surprise anyone. But these allegations against the foundation’s director are just one piece in a developing puzzle regarding Arnold, its anti-bail crusade and its direction going forward.

The Arnold Foundation risk assessment algorithm was supposed to represent a fundamental shift in the way the criminal justice system worked. The bondsman - that convenient whipping boy for manufactured outrage - would be sent packing and countless of his “victims” would no longer be unjustly held while awaiting trial.

The problem is, the risk assessment algorithm has been an abject failure no matter how you measure it. As predicted, many of those “victims” who were allowed to walk free after being arrested were quickly re-arrested for committing other crimes. In addition, pre-trial detentions have actually increased in some states. At the same time the number of defendants failing to show up in court has skyrocketed. Since those people no longer have any financial incentive to appear.

About Face on Bail Bonds Reform

As evidence of the failure of the Arnold risk assessment algorithm has piled up more and more states and counties have begun thinking twice about abandoning the centuries old bail bonding system. Right here in Jefferson County, Arapahoe County and Denver County legislators saw fit to reject the slow motion train wreck that is bail reform, much to the relief of Colorado civil society groups and taxpayers alike. And states like Missouri, Delaware and New Hampshire that had flirted with bail reform and the Arnold algorithm are now debating whether to change course.

This groundswell of opposition has not gone unnoticed in the corrupt halls of the Arnold Foundation. And in an abrupt move that took many by surprise it was announced recently that the non-profit will soon change its name to Arnold Ventures and become a for-profit company. It will alleged continue to “fight” for bail reform although it acknowledged that its own risk assessment algorithm hasn’t worked after all.

These are important developments in the battle against the self-serving, short-sighted, anti-bail movement. They signal there is yet hope on the horizon that common sense may ultimately win the day. But the struggle to reimpose some kind of order on the judicial system is far from over. And the effects of the Arnold Foundation’s assault on civility and justice are likely to be felt for years to come.

After Effects

In California the much derided Senate Bill 10 which eliminated cash bail and gave unprecedented powers of detention to state judges only went into effect a few weeks ago. And New Jersey is only now coming to grips with the financial disaster caused by abandoning bail. With the judiciary there forced to appeal for tax hikes to cover the cost of the new no-bail system.

So even if the bail reform movement is stopped in its tracks today the after effects of the Arnold Foundation’s decade long war on the American justice system are bound to linger. Even as their director uses money allegedly stolen from contributors to defend himself against charges of corruption.

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