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Trump’s Win Has Already Boosted Stocks of Private Prison Companies

Trump wants to deport three million immigrants, meaning the government could spend as much as $17 billion on detention—and private prison companies, which have been widely criticized for housing inmates in abusive conditions, stand to profit richly.
Women and children wait in a detention center. Photo by J.Emilio Flores, courtesy of Getty Images

Deporting one immigrant costs about $10,000. According to the United States Department of Justice, the government spends approximately $5,600 on each immigrant held in a detention center. Trump has vowed to deport two to three million immigrants when he takes office in January, which means the US could spend nearly $17 billion on detention in the coming few years. The number could even grow higher—the US would likely need to build new, massive facilities to hold the surge of deportees—so it's no wonder that private prison stocks soared by double digits as soon as Trump won the election last Tuesday. It was just math. Corporations run 73 percent of Immigration and Customs Enforcement (ICE) facilities, and if Trump manages to enact his immigration plan, the government could direct even more taxpayer money to private prison corporations, like CoreCivic (formerly known as Corrections Corporation of America) and the GEO Group.


"Federal immigrant detention is the private prison cash cow," says Cristina Parker, the director of immigration programs at Grassroots Leadership, a nonprofit that focuses on the private prison industry. "Stocks going up was a very rational response to someone saying he's going to greatly expand the police state and deportation machine."

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For the last year, private prison companies have been on the defensive. When Hillary Clinton looked like the frontrunner for the presidency in the fall, she identified closing private prisons as one of her top priorities, and GEO Group's stock subsequently fell by four percent. A month earlier, the Justice Department announced the Federal Bureau of Prisons would sever ties with private prison companies at the federal level. As the Justice Department's Deputy Attorney General Sally Yates said, "They simply do not provide the same level of correctional services, programs, and resources."

Although the Bureau of Prisons accounts for a small percentage of the overall number of prisons, jails, and detention facilities, the announcement rocked private prison companies. The move—along with Clinton's anti-private prison platform and a series of investigative articles that painted private prisons in a negative light—had many analysts thinking the private prison industry was in a death spiral.

"They were on the run, their stocks dropped, shareholders were suing them, things were looking really bad for them," Parker says. "Trump changed all that."


The president-elect has publicly advocated for private prisons, and privatization in general. At an MSNBC town hall, he once said, "I do think we can do a lot of privatizations and private prisons. It seems to work a lot better." Now that's he's won, prison stocks have rebounded. The day after Trump won, GEO Group's stock went up by nine percent, and CoreCivic's by 19.7 percent. The rise has anti-private prison advocates worried about the future of detention in the US.

A Bureau of Prisons report on 14 private prisons found that they treat prisoners poorly in comparison to public ones. Private prisons had higher rates of assault, both by inmates on other inmates and by inmates on staff. On average, they confiscated eight times as many contraband cell phones as public prisons, suggesting the prisons are less secure, and the private prisons also relied more on solitary confinement. They sometimes even used solitary cells to hold people when general populations became overcrowded.

The use of private prisons has grown tremendously over the last 40 years, but they still only account for about 11 percent of the total US inmate population, which is the world's highest per capita. Private prison companies' biggest growth area is the federal detention of immigrants, where private companies, like GEO Group and CoreCivic, account for nearly three quarters of the system's total capacity, according to the Detention Watch Network.


"Immigrant detention is where you can realistically see growth really quickly," says Jeremy Mohler, a communications analyst at In the Public Interest, a research institute that has studied private contracting of prisons and other industries. "We need space, if we're going to do all the things Trump is saying. The government doesn't have the money to build facilities to house those people that fast—that is what those companies do."

There are now over 180 immigration detention centers around the US, and almost three-quarters of detainees are held in centers that are run fully by or in conjunction with private companies. Thanks to a little-known law passed in 2009 mandating that 34,000 beds for detainees be available at all times across the country, private corporations are essentially guaranteed government contracts for immigrant detention.

Photo by Gage Skidmore, courtesy of Wikimedia Commons

"ICE doesn't have leverage with its contractors because of that clause," says Mary Small, the policy director at the Detention Watch Network. "Even if ICE did want to threaten its contractors to require them to raise the standards of detainment, it's not a credible threat. That kind of power flip between a contractor and the government is extremely dangerous."

Activists have grown concerned about the government using private detention facilities for immigrants, because they've been shown to be run without adequate shelter and medical care. In 2015, detained immigrants rioted at the privately-run Willacy County Correctional Center after being held in a "tent city" made up of kevlar tents. It was just one of the more extreme examples highlighting the ways detainees in privately-owned facilities have been treated. In one letter sent to Grassroots Leadership by 11 women at the CoreCivic-run Laredo detention center, inmates complained about inadequate medical care and access to lawyers and other representation. One woman said that they'd been kept in a cold room overnight, leading her to develop a severe cold. Another, who has diabetes, said she had to hide bread from the guards so that she could eat it in secret when her blood sugar gets low. The women also complained of black water flooding the facilities, being given food that made them ill, and being denied access to the bathroom.


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"When we go out for recreation they watch over us with shotguns in their hands as if we were criminals," one woman wrote to Grassroots Leadership. "Since because of the physical damages that I already have in my body from firearms and the psychological impact of that, they make me feel afraid."

Advocates say that ICE routinely blocks inspectors from nonprofits and law firms from accessing these facilities, making it hard for anyone to know how guards treat detainees. According to Angelica Salas, the executive director of the Coalition for Humane Immigrant Rights of Los Angeles, private detention facilities infrequently update the detainee locator system, making it harder for lawyers to find their clients and families to locate their loved ones.

Women often appear to be treated the worst in these detention facilities. The two biggest family detention centers in the US, which are located in Texas, are both privately operated. (GEO Group operates the Karnes County Residential Center, and CoreCivic runs the South Texas Family Residential Center.) In 2009, the Obama administration said they would phase out their use, but reversed course in 2014. Many times, immigrants are detained for months on end in these family facilities. At the Berks Detention Center in Pennsylvania last summer, a group of mothers went on hunger strike to protest their seemingly infinite detention. They say they stopped after ICE intimidated them.


Despite the controversies, ICE has often referred to centers that house women as "family residential centers" or "family detention centers." "The language used to describe these places tends to be softer," says Cecilia Menjívar, the co-director of the Center for Migration Research at the University of Kansas. "ICE wants to convey that they're in a home environment." Many women and children are fleeing violence when they immigrate from Central America. Their past—coupled with unreliable access to lawyers, therapists, and medical care—means their detentions are doubly traumatizing.

"They're coming from places where they may have feared for their lives, they may have been assaulted as they crossed the border," Angelica Salas says. "The psychological trauma once their detained is just horrible."

According to Human Rights Watch, trans women face a more dire situation. They're sometimes placed in solitary confinement, or in men's prisons, where they can experience increased violence.

All of these issues had begun to receive more attention in the last year, and prison rights advocates thought private prisons had their backs against the wall. But Trump's presidency, they say, has made them rethink the trajectory of private detainment and incarceration.

"There was uncertainty before Trump about the industry," Mary Small says. "And now a lot of certainty has been restored."