Jeremy Mohler

In 2015, for the third year in a row, the number of people held in privately operated, for-profit prisons went down, according to data released last week by the federal Bureau of Justice Statistics.

The new data top off a chaotic year for companies that own and operate prisons for profit.

In August, the Justice Department announced that it would phase out its use of private prisons for some federal prisoners. Almost immediately, stocks in the country’s two largest private prison companies, Corrections Corp. of America (CCA) and GEO Group, plummeted.

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The fact that the number of people incarcerated in for-profit prisons continues to decline suggests that the future of private prisons in the U.S. is anything but certain.

But the companies, ever the salesmen, have a backup plan. As fewer people have been sent to prisons and jails in recent years, the industry has diversified beyond the business of incarceration. Since 2005, the companies have collectively spent more than $680 million acquiring companies that provide services referred to as “community corrections,” such as residential re-entry (“halfway houses”) and electronic monitoring.

New administration mean big business?

By late September, CCA's stock price had fallen more than 45% since the Justice Department's announcement, and in October the company revealed it would be rebranding under a new name, CoreCivic.

Then, Donald Trump won the presidential election. The next day, CoreCivic’s stock shot up over 43%, more than any other that day on the New York stock exchange. A Trump presidency could mean big business for private prison companies. The president-elect praised private prisons on the campaign trail and has promised to restore “law and order,” a throwback to the dog-whistle politics that ushered in the era of mass incarceration.

Yet the jury is out on whether a return to “tough on crime” policy at the federal level would trickle down to states. While Trump will control the federal prison system, presidents have little power over state prisons and local jails, where a vast majority of the incarcerated population is held.

But there is much money to be made by providing community corrections services, which are widely used across the criminal justice system as alternatives to incarceration and community supervision, such as probation, parole or home detention (“house arrest”). In 2014, an estimated 4.7 million people — more than double the prison population — were on some form of community supervision, many of them wearing GPS ankle monitors, living in a halfway house, or subject to alcohol and drug testing.

What many see as justice — fewer people incarcerated — CoreCivic and GEO Group see as a business opportunity.

A GEO Group executive recently told investors, “We believe that the emphasis on offender rehabilitation and community re-entry programs as part of criminal justice reform will create growth opportunities for our company.” One such “growth opportunity” was the company’s acquisition of B.I. Incorporated, one of the country’s largest providers of GPS ankle monitoring services.

If efforts to end mass incarceration at the state level continue and more people are released early or sentenced to alternatives, the number of people on community supervision could explode in the coming years. That could mean untold profit for two companies that together profited $361 million in 2015 alone.

At first glance, that a private company profits from supervision or helping people re-enter society seems beside the point. If the goal is to get people out of prisons and jails, then why worry about services such as electronic monitoring or re-entry?

Such thinking ignores recent history. America’s prison population is the result of countless policies and decisions, but it could not have happened without the private prison industry. As the prison population quintupled in the past four decades, companies such as CCA and GEO Group helped provide enough prisons to hold that population and used political influence to expand their control of the criminal justice system. They’ve marketed facilities to local governments and federal agencies. They’ve signed contracts with occupancy guarantees that incentivize incarceration and put taxpayers on the hook.

By diversifying into community corrections, the same multibillion dollar industry that enabled the country’s addiction to incarceration could dramatically shape how we recover from that addiction.

Profiting from the poor

What that recovery will look like is still coming into view, but there are glimpses in the ways community corrections are being used. Electronic monitoring can be especially hard on the same communities most impacted by mass incarceration, the poor and people of color. For example, the cost of a GPS ankle monitor — as high as $40 a day — can be passed along to the person ordered to wear it. When the person falls behind on his payments, the company providing the monitor can charge late fees, and anyone who can’t afford the fees can be sent back to prison or jail.

This “offender funded” model of supervision is often used with alcohol monitoring and drug testing as well, a fact not lost on GEO Group, which recently bought a portion of Soberlink Inc., a provider of “mobile-breath sobriety" monitoring.

Privately operated halfway houses pose a different, yet familiar, problem. Across the country, many are plagued with issues similar to those found in private prisons, including poorly supervised residents and criminal behavior by employees. New Jersey officials have called their halfway houses “an innovative example of privatization,” but The New York Times, following a 10-month investigation, called them a “shadow corrections network, where drugs, gang activity and violence, including sexual assaults, often go unchecked.”

Returning citizens need viable re-entry services, including job placement and housing assistance, and some require substance abuse programs. But private halfway house operators too often view such services like they do prisons and jails, as vehicles for profit, not for care or justice.

In private hands, services such as residential re-entry and electronic monitoring could be used on greater numbers of the population and for longer periods of time simply because doing so would be in the financial interest of the companies providing those services. If those hands belong to CoreCivic and GEO Group, who together spend millions of dollars each year influencing public officials, the end of the mass incarceration era could be devastating to the poor and communities of color.

When we advocate for alternatives to incarceration, we must be vocal about the potential harms of allowing those alternatives to be sources of profit for companies, especially those with strong political influence, such as CoreCivic and GEO Group. If we don’t, mass incarceration could be rebranded like a company that has merely changed its name.

Jeremy Mohler writes for In the Public Interest, a national research and policy non-profit advocating for shared prosperity in the provision of public goods and services.