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Trump’s First Year Has Been the Private Prison Industry’s Best

The Trump administration has been a godsend for the private prison industry.

January 15, 2018

Cross-posted from Salon 

Exactly 17 months ago, in August of 2016 – back when most elec­tion polls had Hillary Clin­ton clinch­ing the 2016 pres­id­en­tial elec­tion – the Obama admin­is­tra­tion announced that it would end the Justice Depart­ment’s (DOJ) reli­ance on private pris­ons. The announce­ment came seven days after the DOJ’s inspector general (IG) called on the federal Bureau of Pris­ons (BOP) to more rigor­ously over­see its contracts with private prison compan­ies. The IG’s report found that private pris­ons at the federal level consist­ently fail to meas­ure up to federal stand­ards in prevent­ing danger­ous condi­tions, inter­cept­ing contra­band, and ensur­ing internal account­ab­il­ity for staff miscon­duct.

Shares of the private prison titans tanked.

Core­Civic and GEO Group’s stocks both ended the day down more than 35 percent and 39 percent, respect­ively – an indic­a­tion that the nation’s largest for-profit prison corpor­a­tions’ prof­it­ab­il­ity might be on the wane. The day after the announce­ment, GEO Group CEO George Zoley stated in a confer­ence call, “There’s been an over­re­ac­tion to the news about the contracts. We think, in time, this will correct itself.” Even George Zoley could­n’t have predicted today’s turn­around.

With the elec­tion of Donald Trump to the White House a few months later, Zoley’s pres­ci­ent state­ment of an “over­re­ac­tion” made him look like a fortune teller.

On Nov. 7, 2016, when the clos­ing bell of the Amer­ican Stock Exchange rang and before any sense of who the 45th pres­id­ent of the United States would be, Core­Civic traded at 14.36 and GEO Group stood at 15.93. Follow­ing Trump’s elect­oral victory, private prison company stocks skyrock­eted. Today, Core­Civic is trad­ing at  23.19 (a 61 percent increase) and GEO Group is trad­ing at 23.03 (a 45 percent increase). And for good reason. The Trump admin­is­tra­tion is a godsend for the private prison industry.

First, there is the danger­ous and misguided rhet­oric that Pres­id­ent Trump and Attor­ney General Jeff Sessions constantly spew—des­pite evid­ence to the contrary—­about how the nation’s viol­ent crime rate is rising and Amer­ica’s streets are filled with carnage. Second, along with this bombastic language are their calls for harsher senten­cing and draconian enforce­ment of drug and immig­ra­tion offenses. Third, federal spend­ing on private pris­ons has remained steady, despite Repub­lican support for across-the-board budget cuts to other federal programs. Trump’s proposed fiscal year 2018 budget calls for $1.2 billion in new spend­ing on deten­tion, trans­port­a­tion and deport­a­tion of undoc­u­mented immig­rants to expand deten­tion capa­city to more than 48,000 beds a day. Finally, in Febru­ary of 2017, Attor­ney General Jeff Sessions revoked the Obama-era initi­at­ive to phase out the use of private contract­ors to run federal pris­ons, deliv­er­ing the industry its biggest victory yet.

Private prison corpor­a­tions have publicly expressed enthu­si­asm for the current admin­is­tra­tion’s aggress­ive stance on crime and immig­ra­tion. In a 2017 third-quarter earn­ings call, a GEO offi­cial noted that the govern­ment’s need for addi­tional deten­tion space should bene­fit company reven­ues.

Here is how the private prison industry fared during Trump’s first year. Today, 65 percent of detain­ees held by the Depart­ment of Home­land Secur­ity are housed in privately run facil­it­ies. With the admin­is­tra­tion’s plans to increase the capa­city to hold undoc­u­mented immig­rants behind bars, the private prison industry’s reven­ues will surely follow suit. And in an unpre­ced­en­ted move, in late 2017, Immig­ra­tion and Customs Enforce­ment (ICE) asked for inform­a­tion from contract­ors who can provide addi­tional immig­ra­tion deten­tion space in the interior of the nation, in major cities such as Salt Lake City, Chicago, Detroit and St. Paul, along with an expec­ted request for inform­a­tion on contract­ors who can provide addi­tional capa­city along the south­ern U.S. border in Texas.

Core­Civic’s CEO Damon Hininger publicly touted the admin­is­tra­tion’s move as a source of poten­tial revenue to his company, noting in an August’s earn­ings call with investors, “ICE expects the aver­age length of stay for detain­ees to increase as a result of increased interior enforce­ment. While immig­rants arres­ted at the border typic­ally are detained for 27 days, those arres­ted in the interior of the coun­try are detained for roughly 52 days.” More days behind bars in their deten­tion centers trans­lates into more profits for the company.

he current admin­is­tra­tion and the private prison industry are also doing more than just merely talk­ing. In April, ICE awar­ded GEO Group with a $110 million contract to build a new immig­ra­tion deten­tion center in Conroe, Texas, 40 miles north of Hous­ton. At the time, the Asso­ci­ated Press repor­ted that this contract award took many by surprise because GEO had “a surplus of 3,000 beds across its nation­wide network of pris­ons.” And in Decem­ber, Core­Civic filed plans with govern­ment offi­cials in Elkhart County, Indi­ana, to construct an approx­im­ately $100 million deten­tion facil­ity. The move sparked candle­light vigils from area resid­ents distraught by the devel­op­ment. Core­Civic has not yet received final approval from the Elkhart County Commis­sion­ers or ICE.

In April, the admin­is­tra­tion – stick­ing to the message from Attor­ney General Sessions’ one-para­graph memo to the BOP revers­ing the Obama admin­is­tra­tion’s intent to reduce reli­ance on private pris­ons – posted a notice request­ing propos­als from private prison compan­ies to house pris­on­ers in Crim­inal Alien Require­ment (CAR) facil­it­ies. CAR pris­ons are privately managed pris­ons. There are 11 CAR pris­ons across the coun­try run by three compan­ies: GEO Group, Core­Civic and Manage­ment & Train­ing Corp. The soli­cit­a­tion signaled a planned increase of 1,607 beds over BOP’s then-current popu­la­tion of privately imprisoned people: 21,287 in total, as of May 2017. And on May 26, GEO Group announced that it had been awar­ded renewed contracts with the BOP for CAR facil­it­ies at the company’s prison complex in Big Spring, Texas. The 10-year agree­ment for 3,532 beds is worth up to $664 million.

My new book, “Inside Private Pris­ons: An Amer­ican Dilemma in the Age of Mass Incar­cer­a­tion,” notes that given today’s polit­ical real­it­ies, the private prison industry is not disap­pear­ing any time soon. Given the current admin­is­tra­tion’s penchant for privat­iz­ing govern­ment services – includ­ing increas­ing its reli­ance on private pris­ons – we owe the thou­sands of people who cycle into and out of private pris­ons and immig­ra­tion deten­tion centers a duty to constantly monitor their condi­tions and ensure that private entit­ies that perform public func­tions should be subject to the same trans­par­ency, account­ab­il­ity and over­sight as public entit­ies. And for those worried about the private prison industry’s lack of trans­par­ency and account­ab­il­ity (in just one example, private pris­ons at the federal level are not subject to Free­dom of Inform­a­tion Act Requests), if the first year of the Trump admin­is­tra­tion reflects the next three years, we need to act quickly to ensure that the ever-grow­ing number of people behind bars in private pris­ons and immig­ra­tion deten­tion centers are the bene­fi­ciar­ies of improved condi­tions of confine­ment and better trans­par­ency. How? We need to ensure that state and federal laws are changed to require these corpor­a­tions to comply with open records requests. And state and federal govern­ments need to rewrite contracts with the private prison industry to require better program­ming, trans­par­ency, account­ab­il­ity and condi­tions of confine­ment.

While most of the cover­age on private pris­ons has focused on the federal contracts, the admin­is­tra­tion’s rhet­oric on reviv­ing the war on drugs is start­ing to have a domino effect at the state level. Most recently, in Kentucky, the state signed a contract with Core­Civic to reopen a shuttered prison (the Lee Adjust­ment Center in Beattyville) and move about 800 inmates there. The opioid crisis in Kentucky pushed state poli­cy­makers to draft more draconian drug penal­ties that played a role in increas­ing its prison popu­la­tion to a record high of more than 24,000 inmates. With full pris­ons and jails, Kentucky felt it had no choice but to contract with Core­Civic to house almost 1,000 men it does­n’t have room to keep behind bars.

With less than a full 365 days of Trump in office, the private prison industry has managed to emerge from the near wreck­age of the summer of 2016 facing a lucrat­ive future. It’s imper­at­ive that we push the envel­ope as far as we can to ensure that these pris­ons and immig­ra­tion deten­tion centers are held more account­able than they currently are.

(Photo: AP)