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Absolutely key to understanding this is that "government" in (1) is a state-level government which has been bribed by the private phone company.

This sort of thing happens at every level, but it's more often than not the Federal government preventing abuses by the states.

Edit: https://www.prisonpolicy.org/blog/2019/02/11/kickbacks-and-c... - it's even more blatant, they're paying a large share of this revenue directly to local governments.



And more generally, this is one of the bad outcomes when pushing decisions back to state and local governments. They are typically easier to bribe and/or control with fewer extreme idea (prison is about maximum punishment at every turn) people.




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