Last week, as Donald Trump captured a stunning win, so did one major US industry: private prison companies. Buoyed by the president-elect's promises to lock up more immigrants and criminals, these businesses saw their stocks soar overnight.
The past few years have not been kind to private prisons. The federal government acknowledged this summer that private prisons posed serious safety and human rights concerns, and a report by the Office of the Inspector General showed that private prisons had a higher rate of assaults, security incidents, solitary confinement, and gaps in medical care than government-run facilities. The Department of Justice then announced it would close its private prisons, and the Department of Homeland Security—which uses private prisons for immigration detention facilities—suggested it would follow suit.
But a Trump presidency could change things. Already, the largest company in the field, Corrections Corporation of America, saw its stock skyrocket by 60 percent right after the election; the second-largest company, GEO, saw gains of nearly 20 percent.
Just how much could Trump do for the private prison business? We asked a few experts.
First, the Trump administration could easily—and instantly—reverse the Department of Justice's order to close federal private prisons. The decision would be mandated by the DOJ Attorney General, who is appointed by the President, and could happen on day one of Trump's presidency.
"It's safe to speculate that this is one of the first things the administration would do because it would be relatively easy to do," said Jeremy Mohler, a communications specialist for In the Public Interest, a research and policy center on privatization and contracting. Mohler told me that the reversal would be easy because none of the 13 private federal prisons have closed yet under the DOJ's new order.
"There aren't a lot of things difficult to roll back so it could be done with a stroke of a pen and progress would be halted," Mohler said, noting that the phase-out was designed to take five years to complete.
Trump hasn't officially claimed he would reverse the DOJ order, but it's been implied. In a Town Hall with MSNBC in June, he praised private prisons.
"I do think we can do a lot of privatizations and private prisons," he told host Chris Matthews. "It seems to work a lot better."
Trump also accepted private prison funds on the campaign trail: The private prison company GEO Group contributed $150,000 to the pro-Trump Super PAC Rebuild America Now.
But prison privatization expert Michele Deitch hesitated to predict such a reversal of the DOJ order.
"I would hope that whoever the president appoints would be someone who looks at what many decades of experience have shown us about private prisons," Deitch, a professor at the University of Texas in Austin's Lyndon B. Johnson School of Public Affairs, told me. "Their performance has been much worse than public facilities and they have not generated the cost savings that policy makers were promised so there seems to be very little reason to reverse what the Justice Department has decided on this front."
Deitch explained that the demand for private companies in the federal criminal justice system had also decreased, since the prison population has decreased slightly in recent years.
The demand for prison beds could increase if the US Sentencing Commission—whose members are appointed by the President—returned to harsher penalties for federal crimes.
"The president's power is in the power of appointments. Obviously people are watching this very closely, but it's premature to assume something is going to happen," Deitch said. "It's also the case that many very conservative leaders in this country have signed onto statements like Right on Crime," an initiative for conservative criminal justice reform.
The private prison industry is, however, near certain to make gains in its immigrant detention system, according to Deitch.
"If the president-elect is serious about deporting the number of people he's said, there's not currently an infrastructure to hold that many people," Deitch told me. "That's where you see the private sector stepping up and trying to fill the void."
The growth builds on the recent expansion of the system under Obama—already, the US is detaining a record number of immigrants, with an estimated 41,000 currently detained as of last week. The majority of facilities are run by private prison companies, according to a recent report by the Center for American Progress, and immigrant detention is a greater source of profit than federal prisons. In the Public Interest estimated that in 2015, immigrant detention made up 24 percent of CCA's profits and 18 percent of GEO's profits, while the Bureau of Prisons provided 11 percent of CCA's and 16 percent of GEO's.
If Trump keeps his promise to deport at least 2 million undocumented immigrants immediately, it would require the construction of more than 100,000 additional immigrant detention beds, according to Carl Takei, staff attorney for the ACLU's National Prison Project.
"The average time immigrants face in detention is about 30 days, and if you assume that 30-day detention average then if 2 million people are apprehended and detained over course of year that would require 164,000 detention beds," Takei told me. "This is so much larger than the existing ICE detention system."
Typically, when ICE has expanded its capacity rapidly, it has turned to private prison companies.
"Private prison companies offer ICE the ability to activate large detention facilities very quickly and they lobbied very hard to get those contracts," said Takei. CCA, GEO, and MTC have spent spent a combined $32 million in lobbying since 2000.
Trump pledged to push Congress to pass Kate's Law, which would increase the mandatory minimum for illegal reentry into the country to five years. This could also require the construction of nine more facilities, the ACLU estimated this summer. Currently the average penalty for reentry is 18 months, Takei said.
Still, to expand the immigrant detention system drastically or to pass Kate's Law would require Congressional approval, which experts like Deitch don't think is guaranteed.
"I think it's going to be much more challenging than the president-elect thinks it will be. It's expensive and there's going to be a very strong backlash among the public and Congress will be very split on this," Deitch told me. "Are there high hopes among the private prison industry? Absolutely. But is it a slam dunk? No, I don't think it is."
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