The last few decades have witnessed the rising involvement and influence of the private prison industry in U.S. immigration enforcement, alongside the expansion of the immigration detention system. During fiscal year (FY) 2016, approximately 353,000 immigrants identified for detention or removal by U.S. Immigration and Customs Enforcement (ICE) passed through one of more than 200 immigration detention facilities, up from 209,000 in 2001. As of August 2016, nearly three-quarters of the average daily immigration detainee population was held in facilities operated by private prison companies—a sharp contrast from a decade ago, when the majority were held in ICE-contracted bedspace in local jails and state prisons.

The largest private prison contractors reap sizeable annual profits from detaining immigrants, including those identified for removal, asylum seekers and others awaiting a hearing in immigration court, and those in the process of being deported. CoreCivic, Inc. and GEO Group, Inc.—which collectively manage more than half of private prison contracts in the country (including immigration and nonimmigration detention)—earned combined revenue exceeding $4 billion in FY 2017. They have spent millions of dollars on lobbying and campaign contributions, seeking to sway the political process toward detention-focused policies that favor their interests—a tactic that appears to be paying off in the Trump era.

This article examines the economics of immigration detention in the United States, by focusing on the role of the private prison industry in immigration enforcement and policy. It explores the history and impact of immigration detention, the involvement of private prison companies, the effect of Obama administration immigration priorities on industry interests, and current and future opportunities for gain under the Trump administration.

History and Impact of Immigration Detention

Immigration detention is the practice of jailing noncitizens while they are in removal proceedings. The practice originated in 1882, with the creation of a federal immigration inspection system. Since immigration offenses violate civil rather than criminal law, deportation represents an administrative procedure enforcing the return of individuals who fail to comply with the conditions of their visas, according to the 1893 Supreme Court decision in Fong Yue Ting vs. United States. It is, therefore, different from the criminal justice system, which is correctional in nature.

Despite this important distinction, immigration detention grew harsher throughout the 20th century. Over the years, detention was used to ensure the thorough pre-entry inspection of European arrivals, to exclude Asian immigrants, and to imprison suspected anarchists, Bolsheviks, and labor organizers in the name of national security. Today, the standards governing detention facilities are based on those used for jails and pretrial prisons in the criminal justice system.

In the 1980s and beyond, increasingly broad detention practices culminated in the establishment of the mandatory detention statute—a series of policies requiring the incarceration of certain noncitizens without an individualized assessment. In 1988, motivated by the Reagan administration’s escalation of the “war on drugs,” Congress passed the Anti-Drug Abuse Act, which mandated the detention of any noncitizen convicted of an aggravated felony. Though this definition initially referred to serious crimes such as murder and drug trafficking, Congress soon expanded it to encompass other offenses, driving an increase in the average daily detainee population from less than 5,000 in 1985 to 7,500 in 1995.

Congress intensified its focus on mandatory detention following the 1993 World Trade Center bombing. The 1996 Antiterrorism and Effective Death Penalty Act (AEDPA) and Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA) defined additional crimes as aggravated felonies for the purposes of immigration, including some nonviolent misdemeanors, and reduced the minimum potential prison sentence to be instantly deportable from five years to one year. In addition to removing many of the legal hurdles that had reprieved noncitizens from expedited deportation, AEDPA and IIRIRA curtailed judicial review and due process in immigration cases and restricted grants of relief for immigrants with family ties in the United States. Detention rates quickly rose as a result: The average daily detainee population nearly tripled compared to 1995, reaching 20,500 in FY 2001.

The 9/11 terrorist attacks cemented the securitization of immigration enforcement and policy. In 2002, the Homeland Security Act abolished the Immigration and Naturalization Service (INS), situating its functions within a new Department of Homeland Security (DHS) formed from the merger of 22 separate federal agencies. Three DHS components were created to oversee immigration: ICE, U.S. Citizenship and Immigration Services (USCIS), and U.S. Customs and Border Protection (CBP). In addition to broadening the use of nationality-based screening and enforcement programs, Congress further widened the category of people subject to mandatory detention. By doing so, it enabled criminal prosecution of immigration offenses and propelled the dramatic expansion of and investment in immigration detention.

Further, in 2004, Congress enacted the Intelligence Reform and Terrorism Prevention Act, which required DHS to expand detention capacity by 8,000 beds per year from FY 2006 through FY 2010, paving the way for greater numbers of people to be held. And in FY 2010, Congress tied DHS funding to satisfying the immigration bed quota, which was initially set at 33,400 beds per day; this rose to 34,000 in FY 2012, where it remained until quota language was omitted from the FY 2017 appropriations bill. Nearly 2.5 million immigrants have passed through immigration detention since 2003.

Emergence and Role of Private Prisons

It has become increasingly evident that the implementation of the mandatory detention statute has depended on the private prison industry. In response to the broader prison overcrowding that accompanied the rise of mass incarceration during the 1980s and 1990s, several states entered arrangements with private companies for their ability to build prisons quickly—and without the need for voter approval. Over time, privatization, combined with the political appeal of locking up large numbers of criminals, produced the “prison industrial complex”—a set of bureaucratic, political, and economic interests that encourage increased spending on imprisonment.

The private prison industry has long considered immigration detention an opportunity for gain. In 1984, CoreCivic established its first privately owned detention facility in Houston to hold immigration detainees. While the INS, and then DHS, at first had sufficient bed space in their own facilities to accommodate detainees, they later entered into several types of contracting arrangements to house the growing detainee population. These ranged from Intergovernmental Service Agreements (IGSAs) with state prisons and local jails, to contracts with alternative-detention facilities. DHS has relied heavily on IGSAs, through which 350 state prisons and local jails held 68 percent of detainees in January 2009.

In 2015, the private prison industry operated 62 percent of immigration detention beds and ran nine of the ten largest detention centers housing ICE detainees. Although the model of prison privatization varies, a private prison typically charges a daily rate per person incarcerated to cover investment and operating costs, and to turn a profit. In FY 2017, DHS spent approximately $126 per day for each detained noncitizen. As immigration detention costs steadily increased to around $2 billion annually, industry profits soared. Between 2007 and 2014, CoreCivic’s overall annual profits grew from about $133 million to $195 million, and GEO Group’s profits grew from about $42 million to $144 million yearly.

Proponents of private detention argue that competition improves quality while lowering costs; so far no substantial evidence has corroborated these claims. In fact, cost-saving measures often involve reduction of staffing, training, and programming, which results in poorer facility conditions. In 2016, in a move later rescinded by the Trump administration, the Justice Department announced the federal Bureau of Prisons (BOP) would not renew its contracts with private prison contractors, arguing that private facilities “compare poorly” to federal ones. The BOP identified serious or systemic safety and security deficiencies at private prisons, and these facilities have experienced more incidents per capita than BOP institutions. Further, the extent of competition is minimal: The three largest companies (CoreCivic, GEO Group, and Management and Training Corporation) account for more than 96 percent of the total number of private prison beds.

Over the past two decades, human-rights abuses within the immigration detention system have disproportionately occurred in private prisons. Among the 179 detainees in ICE custody who died between October 1, 2003 and February 19, 2018, 15 were housed in the CoreCivic-operated Eloy Federal Contract Facility in Arizona. A 2014 investigation of five of the nation’s 13 Criminal Alien Requirement prisons, which are privately managed, found that the companies not only placed excessive numbers of prisoners in isolation, but also overcrowded the prisons, reduced medical staff, and withheld medical treatment. The same year, a lawsuit was filed on behalf of nine detainees at Aurora Detention Facility in Colorado against GEO Group, accusing the company of forcing detainees to work without pay and threatening them with solitary confinement if they refused. Further, a March 2018 report on abuses against African detainees at the West Texas Detention Facility, operated by LaSalle Corrections, documents excessive use of force as punishment, unsafe and unsanitary conditions, and denial of religious accommodation, among other concerns.

Obama Administration: Attempts at Reform, Followed by Expansion

A movement to reform the immigration detention system occurred early on during the Obama administration. In August 2009, ICE announced its decision to overhaul the system in order to create a “truly civil detention system.” Beyond establishing the Office of Detention Policy and Planning, ICE created an online detainee locator system, reduced the number of contracts with private prisons, and deployed new field medical coordinators to all ICE field offices. New standards released in 2012 strengthened the process for filing complaints and stated that in deciding where to accommodate new detainees, ICE officers should give “special consideration” to factors that could make individuals vulnerable to abuse. Moreover, the agency deepened its investment in alternatives to detention (ATD), such as monitoring technology and home visits, increasing its funding request for this program from $72 million in FY 2012 to $111.6 million in FY 2013. Despite these changes, standards continued to be based on those used for individuals awaiting criminal trial, and ATD resources such as ankle bracelets represented a fraction of overall DHS custody operations funding; as a result, most detainees were still accommodated in jails or jail-like facilities.

Meanwhile, immigration enforcement reached a peak during the first few years of the Obama administration, with record numbers of arrests and removals. The Secure Communities information-sharing program in state prisons and local jails permitted fingerprint checks against DHS databases and interviews regarding immigration status, bringing ICE referrals for detention and removal to all-time highs. FY 2012 marked a peak of more than 464,000 immigrants cycling through detention facilities.

In its final years, the Obama administration narrowed its immigration enforcement focus, tightly prioritizing criminals, recent unauthorized border crossers, and those with recent removal orders. Following this refinement of priorities, arrests and removals fell and immigration detention dropped to roughly 307,000 admissions in FY 2015.

This occurred against the backdrop of the decline of the federal criminal justice system’s prison population, the result of new sentencing guidelines and reformed drug policies. The system contracted from 219,300 federal inmates at its peak in 2013 to 184,000 by the end of 2017, meaning reduced opportunities for private prison companies. Although the Justice Department’s refusal to renew BOP contracts did not impact immigration detention, since ICE is housed within DHS, it further threatened the industry. On the day in August 2016 that the Justice Department announced it would not extend further contracts, GEO Group and CoreCivic stock values fell by 39 percent and more than 35 percent, respectively.

Growing Political Involvement

Confronted with these challenges, private prison companies have significantly increased their political engagement. In order to influence immigration and criminal justice policy, the private prison industry primarily uses three strategies: contributing to political campaigns (via donations from individual employees or affiliated groups), lobbying, and building relationships, networks, and associations.

The growth of the first strategy is particularly noteworthy. Over the course of five election cycles between 2002 and 2010, state-level political giving by the three largest private prison firms increased from about $850,000 to more than $2 million. CoreCivic contributions by PACs and employees to federal candidates and outside groups increased from just $6,000 in the 1990 election cycle to roughly $249,000 in 2016, according to numbers from the Center for Responsive Politics. GEO Group has emerged as an even bigger contributor at the federal level, donating more than $1.2 million in the 2016 cycle, up from about $139,000 in 2004. The company has also spent growing amounts to lobby Congress—from $120,000 in 2004 to $1 million in 2016. CoreCivic spent $10.6 million on immigration-related lobbying between 2008 and 2014, according to a tally by Grassroots Leadership; of this total, $9,760,000 went toward directly lobbying members of the House Appropriations Committee Homeland Security Subcommittee, which is responsible for funding immigration detention.

The 2016 presidential election was critical to the private prison industry’s interests. While Democratic presidential nominee Hillary Clinton expressed her intention to shut down federal contracts for all private prisons, Republican nominee Donald Trump praised the industry on the campaign trail. In addition, Clinton favored more lenient policies toward unauthorized immigrants, compared to the more hardline approach espoused by her opponent.

Private prison companies increased their political engagement during the election. One day after the Justice Department announcement about scaling back the use of private prisons, GEO Group donated $100,000 through a subsidiary to Rebuilding America Now, a pro-Trump super PAC. It gave another $125,000 to the same super PAC one week before the election. According to a spokesperson, CoreCivic did not contribute directly to any presidential candidates or campaigns during the election cycle, but it and GEO Group both donated $250,000 to the Trump inaugural committee.

Since the election, the industry has further accelerated its political activity. GEO Group spent $1.7 million on lobbying in 2017, a more than 70 percent increase from 2016, to promote issues including the deportation of federal prisoners and alternatives to detention within ICE. Both GEO Group and CoreCivic have contributed to House and Senate candidates in the 2018 cycle.

And in addition to the donations to President Trump’s inaugural committee, GEO Group moved its annual conference to the Trump National Doral Golf Club in Miami.

Business Booms under the Trump Administration

Placing their bet on the Trump administration appears to be paying off for private prison companies. A day after the election, GEO Group stock prices rose 21 percent and CoreCivic stocks soared by 43 percent. Shortly after his inauguration, President Trump signed two executive orders that benefit private prison interests. Executive Order 13767 included plans to tighten enforcement along the U.S.-Mexico border, increase the use of detention in order to end “catch and release” of migrants pending their removal hearings, and expand detention capacity. The desired scale of this expansion was revealed in a leaked White House memo calling for a doubling of people in immigration detention to 80,000 per day. Further, Executive Order 13768 reversed Obama-era policies by prioritizing all unauthorized immigrants for enforcement, in addition to reviving Secure Communities and pushing for new agreements allowing state and local law enforcement to enter into partnerships to assist ICE in immigration enforcement.

The private prison industry predicts greater profits due to an increase in ICE arrests within the country’s interior as compared to the level during the latter Obama years. Since removals in the U.S. interior take longer to process, immigrants could spend longer periods of time in detention—a fact cited by CoreCivic and GEO Group officials as a source of optimism during separate earnings calls in August 2017.

In February 2017, Attorney General Jeff Sessions signaled renewed opportunities for private prison contractors by rescinding the Obama-era Justice Department memo intended to wind down the use of private prisons by BOP. By the end of the month, CoreCivic and GEO Group stocks had increased by 137 percent and 98 percent, respectively. In April, GEO Group won a $110 million contract to build the first detention center under the new administration, and ICE extended its contract with CoreCivic for a 1,000-bed immigrant processing center in Texas. In October, ICE issued a request for information about potential locations for up to 3,000 new detention beds within 180 miles of Chicago, Detroit, Salt Lake City, and St. Paul, Minnesota. Immigrant-rights advocates are bracing for widespread contracting activity beyond these developments, and efforts to push back on expanded detention have seen some success: California Governor Jerry Brown signed a bill in October 2017 blocking local authorities in the state from renewing or entering into contracts with for-profit companies to detain immigrants.

On February 27, 2018, the U.S. Supreme Court ruled in Jennings v. Rodriguez that noncitizens, including asylum seekers and legal permanent residents identified for removal, do not have the right to periodic bond hearings. Although advocates contend that many of these noncitizens have a right to be released on bail until their case is heard, Justice Samuel A. Alito Jr., writing for the majority, argued that their detention was necessary to give officials time “to determine an alien’s status without running the risk of the alien’s either absconding or engaging in criminal activity.” The decision reversed a Ninth U.S. Circuit Court of Appeals ruling, but the case could return to the Supreme Court; for now, long-term detention will continue, at the same time as Trump administration policy assures detention will take place in more cases.

A Shared Goal

Private prison companies have already seen opportunities for expansion under the Trump administration and are projected to see more, so long as the administration pursues its goal of arresting, detaining, and deporting more immigrants. However, the ability of ICE to expand detention capacity remains limited by what Congress is willing to fund. Despite the administration’s request for 9,000 additional detention beds in the FY 2019 budget, Congress appropriated enough money for about 1,200 more beds.

As the industry continues to prioritize political influence as part of its long-term growth strategy, it contributes to the growing privatization of the immigration detention system and solidifies the punitive nature of U.S. immigration enforcement and policymaking. The administration’s stiff enforcement policies and other moves signify rising profits and, at least for now, guarantee continuity.

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