The new Trump administration has been met with a wave of business optimism. But few are quite as enthusiastic as the private prison industry.
Two of the biggest players in the business, GEO Group and CoreCivic — the latter formerly known as Corrections Corporation of America (CCA) — saw their stock jump right after Trump's election. As of late February, GEO's stock was up 98 percent and CoreCivic's was up 137 percent. The industry is even opening at least two new for-profit centers in Georgia and Texas.
The reasons for the champagne popping are pretty straightforward.
Across the country, over 2.2 million people are held in federal, state, and local prison facilities. Six percent of state prisoners and 16 percent of federal prisoners are held in private prisons run by companies like GEO and CoreCivic. The federal government's share of the private prison population amounts to 21,000 inmates, spread across 12 contracts. And back in August of 2016, President Obama's Justice Department sent out a memorandum instructing its officials not to renew any of those contracts.
Given that the state and local prison population is far larger, this certainly wasn't a death blow to the industry. But it hurt their bottom line.
Then in late February, the Trump administration scrapped that decision. Trump's recently-installed attorney general, Jeff Sessions, sent the Bureau of Prisons his own memo stating the Obama-era order "impaired the bureau’s ability to meet the future needs of the federal correctional system."
"Therefore, I direct the bureau to return to its previous approach," he concluded.
The Trump administration may want to slash the budgets of the State Department and the EPA, but it also wants to ramp up spending on things like the military and law and order. So the private prison industry is breathing a sigh of relief that the federal money hose will stay on.
The thing is, the profit motive introduces all sorts of perverse incentives into the job of running prisons: The less a company spends per inmate on things like health care, guards, upkeep, etc., the more it can pocket as profit from the contract fees the government pays the industry. As a result, private prisons are generally more dangerous than public ones, and the industry abounds with accusations of wrongful deaths and mistreatment of prisoners. The industry even uses its inmate population as a source of ultra-cheap labor from which it can further profit.
This is precisely why Obama's Justice Department made the decision it did. A review it conducted last year concluded that private prisons "simply do not provide the same level of correctional services, programs, and resources" and "do not maintain the same level of safety and security" as the federal government's own facilities.
This isn't all.
The federal government relies on the private prison industry to detain immigrants as well. For all the talk from Republicans about how Democrats are too nice to undocumented immigrants, the Obama administration actually oversaw a record-breaking 2.5 million deportations from 2009 to 2015. By November 2016, the number of immigrants held in some sort of detention facility rose was an eye-popping 41,000. And fully 65 percent of those held by U.S. Immigration and Customs Enforcement (ICE) were in private prisons.
These facilities raise the same humanitarian concerns. In 2014, for example, GEO Group was sued by nine former immigrant detainees, alleging they were forced to work for $1 a day. Just last week, that suit was granted class-action status, meaning as many as 60,000 immigrants could now be represented by it.
The private prisons used by ICE fall under the Department of Homeland Security (DHS) and thus weren't subject to the memo from Obama's Justice Department. But DHS ran its own inquiry into its use of private prisons and came to a fatalistic conclusion: Between fiscal constraints and the number of people moving through the system, immigration enforcement would have to keep relying on private prisons.
Now, the memos and executive orders from the Trump administration suggest it wants to double ICE's detention capacity to 80,000 per day, in keeping with its renewed crackdown. As DHS's previous investigation suggests, much of that capacity will have to come from expanding private contracts. "Historically, ICE has relied heavily on the private prison industry every time the detention system has expanded," Carl Takei, staff attorney for the American Civil Liberties Union's National Prison Project, told Mother Jones.
What makes this business arrangement especially perverse is that the private prison industry has a profit incentive to encourage the federal government to take a particular approach to law and immigration enforcement. The more brutal and draconian the federal government is about detaining undocumented immigrants, the larger the prison population becomes and the more prison companies profit. The same is true for the harshness of our sentencing laws, the scale of the drug war, and other policies. Conversely, CoreCivic observed in a 2005 report that when the government is more lenient and more willing to decriminalize activities "demand for our facilities and services could be adversely affected."
Not surprisingly, GEO and CoreCivic are both enthusiastic donors to the GOP. And now the Trump White House is resuscitating federal contracts with private prisons, aiming to massively ramp up immigration detentions, and even taking an unfriendly stance towards marijuana decriminalization.
"When coupled with the above average rate of crossings along the southwest border, these executive orders appear likely to significantly increase the need for safe, humane, and appropriate detention bed capacity that we have available," Damon Hininger, the president and CEO of CoreCivic, recently said.
Of course, the "safe, humane and appropriate" part is subject to interpretation.