It's been a rough couple weeks for the private prison industry. On Monday, 11 days after the Department of Justice said it would end the use of for-profit prison contractors, the Department of Homeland Security (DHS) announced a plan to evaluate whether to "move in the same direction" with facilities where undocumented immigrants are detained.
Almost immediately after DHS Secretary Jeh Johnson said the agency will "review our current policy and practices concerning the use of private immigration detention," share prices for Corrections Corporation of America (CCA) and the GEO Group, the two largest private prison companies, plummeted. CCA's stock fell more than nine percent, while GEO's value tumbled by six percent.
But while investors are wary, private prison industry watchers are skeptical about whether DHS is actually is serious about cutting ties with CCA and GEO. The companies currently operate 46 immigration detention centers that house roughly 24,000 people, 70 percent of the detainees held by Immigrations and Customs Enforcement (ICE), which is part of DHS.
Carl Takei, a staff attorney at the National Prison Project of the American Civil Liberties Union, said ICE and DHS remain "heavily reliant on private prison contractors."
"To admit that they endorse the DOJ findings and can no longer rely on these contractors," Takei said, "ICE would have to seriously restructure how it handles immigration."
CCA recently sealed a four-year, $1 billion deal with DHS to house Central American asylum seekers at two detention centers in Texas. CCA has earned $689 million from DHS contracts since 2008, and GEO received $1.18 billion from the agency over the same period, according to figures cited by Reuters,
DHS has continued to award the contracts despite multiple reports alleging overcrowding, unsanitary conditions, medical neglect, civil rights violations, and problems with sexual assault at private prisons. The DOJ documented similar issues during its review of the industry.
Asked about the DHS announcement, CCA spokesperson Jonathan Burns noted that the company is already subject to "thousands" of audits per year, and said "we welcome this review of our long-standing relationship." GEO spokesperson Pablo Paez said recent audits found all of the company's facilities to be "in compliance" with government standards. He also "strongly disputed" the findings of the DOJ's report, calling it "severely flawed."
Alex Friedmann, associate director of the Human Rights Defense Center (HRDC) and managing editor of Prison Legal News, said DHS "has their hands tied" when it comes to private prisons. He noted that GEO and CCA have spent millions lobbying Congress, which could influence whether lawmakers vote to repeal the so-called "bed mandate," a policy that has benefited the private prison industry by requiring ICE to to hold an average of 34,000 undocumented immigrants in detention on a daily basis.
Even if DHS ultimately decides to stop using private prisons for detention, the companies have started investing in other ways to profit from the US immigration system. GEO provides and monitors ankle bracelets with GPS tracking devices that approximately 50,000 undocumented immigrants are made to wear as an alternative to detention while they await court hearings.
Still, Bob Libal, executive director of Grassroots Leadership, a group that works to abolish for-profit private prisons, praised the DHS announcement on Monday as "one of a number of significant moves that could really impact the private prison industry." He noted that California legislators passed a law last week that would ban the use of private immigration detention centers. The bill is currently headed to the governor's desk.
While the ultimate fate of private prisons in the US is still unclear, Libal said for-profit detention is increasingly becoming a "mainstream issue," and the upcoming DHS review could lead to even greater scrutiny of the industry.
"One of things we've learned," he said, "is that private prison corporations thrive when no one is paying attention."
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