On April 6, 2018, the administration announced a "zero tolerance" immigration policy that requires every undocumented adult immigrant and asylum seeker in the U.S. to be criminally prosecuted under federal law. As a result, over 2,000 children were forcibly separated from their families, labeled "unaccompanied," and transported to remote shelters around the country. After intense political backlash, on June 20, 2018, an executive order ended family separation by requiring that children be detained with their parents in family detention centers instead. The reunification plan for families already separated remains unclear.


41,134

Immigrants in Custody with Immigration and Customs Enforcement

 

11,200

Immigrant Children in Custody with the Office of Refugee resettlement


The "zero tolerance" immigration policy and the executive order ending family separation have created windfalls for some. Let us help you understand exactly how, for whom, and how much.

 

How do for-profit companies get involved?

For-profit companies contract with the various government agencies that manage the apprehension, detention, and deportation of undocumented immigrants. It is important to understand the system within which they function to understand just how they generate profits. 

Immigration detention flowchart.png
 

Customs and Border Protection

Customs and Border Protection (CBP), which is charged with safeguarding U.S. borders and entry points, detained over 300,000 people crossing the southwest border, including 40,000 unaccompanied children, in 2017. While CBP appears to operate all their border stations directly, it relies heavily on for-profit contractors to perform other vital tasks.

For instance, for years, CBP has had a contract, valued at $234 million, with G4S Secure Solutions to provide intra-agency transportation of detainees, medical escort services, and supplemental security staff. The agency also contracts with a variety of technology companies to operate its case management and air traffic control systems. In late 2017, the administration announced plans to expand CBP by 7,500 staff, including 5,000 border agents, prompting the agency to sign a $297 million contract with Accenture Federal Services for recruitment and hiring.

 

Immigration and Customs Enforcement

According to the most recent Immigration and Customs Enforcement (ICE) data, the average daily population of immigrant detainees in the agency's custody is 41,134, up 8% since 2017 due largely to the increased detention of asylum seekers, who had previously been released while their cases were pending. The administration is looking to increase that figure to 52,000 in the next year, which it claims will call for a budget increase of almost $1 billion across the agency, bringing the budget for detention alone to $3.3 billion in fiscal year 2019. 
 

ICE Average daily Population & Custody Operations Budget

  Source:   National Immigration Forum ; Department of Homeland Security 

Source: National Immigration Forum; Department of Homeland Security 

 
 

$3.3 Bn

Projected 2019 Detention Budget

While the recent data did not provide additional information about the distribution of detained immigrants between privately and publicly-operated facilities, data provided by the agency in November 2017 in response to a Freedom of Information Act request by Immigrant Legal Resource Center sheds some light. Immigrant detainees in ICE custody are typically held in one of three types of facilities: ICE-dedicated immigration detention facilities, contracted facilities (including federal prisons, local jails, and hotels), and family detention centers. 
 

Immigration Detention Facilities

24

 immigration detention Facilities

24

for-profit immigration detention Facilities

20,334 (100%)

Immigrants in for-profit immigration detention Facilities

 

 

Contracted Facilities

1,446

Contracted Facilities

94

for-profit Contracted Facilities

5,571 (71%)

Immigrants in for-profit Contracted Facilities

 

 

Family Detention Centers

5

Family Detention Centers

4

for-profit Family Detention Centers

2,595 (98%)

Immigrants in for-profit Family Detention Centers

 

 

Immigrants in Privatized Detention Beds: 72%


Note: At the time of the data release, the average daily population in ICE custody was 39,320 across its three facility types: ICE-dedicated immigration detention facility (20,334; 52%), ICE-contracted facilities (16,332; 41%), and family detention centers (2,654; 7%). These figures have all likely increased since.


Office of Refugee Resettlement

  Source:   The New York Times

Source: The New York Times

The Office of Refugee Resettlement (ORR) within the Department of Health and Human Services takes custody of immigrant children labeled "unaccompanied" who cannot be safely returned to their home countries. 

ORR contracts largely with non-profit organizations to shelter the more than 11,200 immigrant children currently in its custody, though MVM, a for-profit company, has also operated emergency shelters. While recent estimates have determined that the agency is using roughly 100 shelters across 17 states, November 2017 figures suggest that there may be more than 145 shelters. ORR has also begun building "tent cities" at the border to house the overflow of immigrant children being placed in its custody. 

Information regarding the location of these shelters is rarely shared, though some have become quite notorious in recent weeks. For example, Casa Padre in Brownsville, Texas holds nearly 1,500 children and is run by the non-profit Southwest Key, which is slated to receive $458 million of the nearly billion dollars ORR expects to spend on these shelters in 2018 despite past violations. In fact, between 2014 and 2018, ORR awarded $1.5 billion to contractors with serious allegations of child abuse and neglect. Southwest Key has also come under fire in recent weeks for dramatically increasing its CEO's compensation from roughly $786,000 in 2015 to $1.5 million in 2016 as it brings in revenue from the government in the current climate.  

Who are the largest for-profit contractors?

The largest financial winners at the border are, as many expect, the private prison companies that operate immigration detention centers, the most prominent of which are The GEO Group and CoreCivic. With more than 40% of their respective revenues stemming from federal contracts, these companies invested heavily in the outspoken federal, state, and local candidates interested in advancing harsh immigration policies like "zero tolerance" during the 2016 election cycle. 
 

The GEO Group Inc_c.jpg

$3.1 million

political Contributions

$3.3 million

Lobbying spending

 
core_civic_logo.png

$1.0 million

political Contributions

$1.8 million

lobbying Spending

In June 2017, executives of The GEO Group revealed expected changes in immigration policy to investors, specifically the implementation of a "zero tolerance" policy and allocation of funding for additional detention facilities. While they would wait nine months for these critical changes to be announced, they benefitted from the growing and hardened enforcement of immigration laws throughout the year. 

  Source:  The GEO Group,  Investor Presentation - June 2017

Source: The GEO Group, Investor Presentation - June 2017

Ultimately, The GEO Group generated $541 million, or 24% of its total revenue, from ICE contracts in 2017, representing 105% growth over three years. Remarkably similar, over the same period, CoreCivic enjoyed 107% growth in its ICE-related revenues, earning $444 million, or 25% of its total revenue, from these contracts in 2017. 
 

CoreCivic and The GEO Group ICE Revenues

 
  Source:  CoreCivic Annual Reports 2014-2017, The GEO Group Annual Reports 2014-2017

Source: CoreCivic Annual Reports 2014-2017, The GEO Group Annual Reports 2014-2017

 

Reviewing the history of their ICE-related revenues reveals just how effective political contributions and lobbying are in not only generally expanding private outsourcing, but also in establishing a competitive advantage. The GEO Group, which trailed CoreCivic in the past two years in ICE-related revenues but outspent them at a two to one ratio in both political contributions and lobbying in 2016, came out significantly ahead by the end of 2017. Still, in the end, both raked in millions on the thousands of immigrant adults and children imprisoned in their facilities. 
 

 
The GEO Group Inc_c.jpg


11,193

Immigrants in detention
 

$541 million

2017 ICE-Related Revenue

 
 HEllo 


7,105

Immigrants in detention
 

$444 million

2017 ICE-Related Revenue

 


With a 19% increase in the detained immigrant population since the 2016 election and the administration projecting a another increase of more than a quarter over the next year, the financial forecasts for The GEO Group and CoreCivic appear positive. The market is responding accordingly. Not only did The GEO Group and CoreCivic enjoy some of the largest single-day gains in the market on November 9, 2016, the day after the presidential election, but after a brief decline due to the delay in promised immigration policy change, their stock prices are back on the rise. 
 

Their most significant recent stock growth came right after the "zero tolerance" immigration policy was announced on April 6, 2018. It was the news that private prison operators and their investors had been waiting on for nearly a year. In the time since its announcement, The GEO Group's and CoreCivic's stock prices have both dramatically outperformed the market.
 

Stock Price Growth Since "Zero Tolerance" Policy Announced 

The GEO Group Inc_c.jpg

+23.6%

 
core_civic_logo.png

+15.5%

Source: NYSE, as of June 25, 2018


The growth is likely to continue as the new executive order aimed at ending family separation reroutes children previously destined for ORR shelters to family detention centers operated by The GEO Group and CoreCivic. And all that is likely to be bolstered by the buy ratings being released by financial research analysts at JP Morgan Chase and SunTrust. 
 

 


Providing research coverage is not the only way that Wall Street firms are contributing to the growth of these for-profit immigration detention companies. These banks also provide credit financing, or loans, to The GEO Group and CoreCivic for the construction of new facilities and expansion of existing facilities, also known as capital expenditures, without which they could not pursue such projects.  

The inability to obtain capital could prevent us from pursuing attractive business development opportunities, including new facility constructions or expansions of existing facilities, and business or asset acquisitions.
— The GEO Group, 2017 Annual Report (10-K)

Finally, as publicly-traded companies, The GEO Group and CoreCivic are also dependent on their institutional investors, which make up over 90% and 80%, respectively, of their investor base.
 

   Source:  Morningstar, as of June 25, 2018

 Source: Morningstar, as of June 25, 2018


Other For-Profit Detention Operators

While The GEO Group and CoreCivic hold the overwhelming majority of immigrants detained in private facilities, there are more than a dozen other for-profit companies that also operate immigration detention facilities. Based on November 2017 ICE data, together these other companies hold over 10,200 immigrants. 

 

Locating Facilities

 
 

Who else is profiting off of immigration detention?

For-profit immigration detention operators are far from the only profiteers in the business of apprehending, detaining, and deporting immigrants looking for a better and safer future for themselves and their loved ones. There is a deep network of companies that contract with CBP, ICE, and ORR to provide ancillary facility services and daily infrastructure support.

 

Telephone

In each facility where immigrants are detained there is a for-profit company that enjoys a monopoly over the provision of telephone services for that site. The largest telephone provider in immigration detention is Talton, which offers its full range of services at immigration detention centers and limited pro bono services at some contracted facilities that hold immigrant detainees. Talton provides legal calls at no cost to immigrant detainees or the government in exchange for the opportunity to charge detainees to make calls to loved ones using collect calling or pre-paid debit cards. However, time and time again, there have been reports about the inadequacy of the Talton's pro bono legal call service, which has forced many to pay hundreds, even thousands, to connect with counsel. Furthermore, in contracted prisons or jails, immigrant detainees are often subjected to the same exploitative telephone companies that operate in the U.S. prison system, whose abuses have been long documented.  

 
 
 

 

Transportation

Various ground and air transportation companies contract with CBP and ICE to transport immigrants, including children, to the hundreds of detention facilities and shelters used by the agencies to detain them. Over the past weeks, there have been sightings of immigrant children accompanied by ICE traveling on major airlines like American Airlines, many of which, including American Airlines, have since released statements asking the government to stop using their flights to transport separated children. With the signing of the June 20th executive order, which ends family separation practices at the border, a question still remains about the ongoing willingness of American Airlines and other airlines to transport other immigrant detainees. 
 

 
 
 

 

Community Corrections

With bail reform emerging as a critical criminal justice issue across the country, bail practices within the immigration system have also recently received attention. Articles have revealed the incredibly high cost of immigration bonds and the extensive surveillance conditions release immigrants are often subject to. 

 

Financial Services

Detained immigrants need financial resources to pay for various needs while in detention. In order to provide timely financial support, their loved ones are often required to use the for-profit money transfer companies that contract with immigration detention and correctional facilities.
 

 

 

Medical

Immigration detention facilities must provide medical services. In some cases, the facility operator, whether it be public or private, provides the medical services, but in many cases, this service is outsourced to specialized for-profit medical and mental health providers that serve incarcerated and detained populations. Like others in the space, these companies cut corners, but their effort to pad their bottom lines come at a deadly cost for immigrants in detention.
 

 
 
 

 

Others

And still there are more companies that have found ways to profit off of immigration detention by supporting the physical or IT infrastructure required to run any of the agencies that apprehend, detain, or deport immigrants. Thanks to their significant consumer exposure, the large retail technology companies that support ICE have recently come under fire
 

Technology Support

Food & Commissary

Construction & Maintenance

Equipment


Who else matters?

It is also important to note that several of the largest privately-held detention service providers are owned by private equity firms that are complicit in their exploitative business models and have facilitated their growth. While neither the companies nor their private equity owners are publicly-traded, and thus not generally vulnerable to individual investors, they are exposed to institutional investors like endowments and pensions, which invest substantially in private equity funds.

Now that you know, what are you going to do?

The problem is daunting, perhaps overwhelming, but there are steps that each of us can take to do our part in addressing the immigration crisis in our nation. 

 
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Contact Elected Officials

We urge you to engage all your elected officials around this issue, particularly if you are in a border state or do not live in a sanctuary city. Use ResistBot to send a message  in under 2 mins, or do it yourself.

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Join a Rally

Millions of people around our country are outraged by our immigration crisis. Build community while sending the message that you will not accept it.

Before attending a rally, make sure you know your rights as a protester. 


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Divest from Detention Profiteers

Do you know what your assets or the assets of an institution close to you are invested in? Might they be indirectly invested in CoreCivic and The GEO Group through a money manager like Vanguard? Divest. 

Personal divestment

  • Step 1: Find out what your money is invested in, remember to check your retirement accounts (if you do not have a financial advisor, click here for help finding your investments)
  • Step 2: Screen your investments for companies profiting from immigrant apprehension, detention, and deportation 
  • Step 3: Move your money out of problematic investments into new clean investments
    • Consider using a socially responsible money manager or platform like OpenInvest, but do your research

Institutional divestment

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Reinvest in Those Fighting Them

There are incredible organizations at the border and throughout the country that are representing detained immigrants in court, providing immigrant children with services, challenging ICE raids, and fighting the dozens of profiteers involved. For these organizations, like us, your financial support is critical

Consider supporting 

Remember to do your homework before donating. 


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Boycott Bad Actors

Do you bank with Bank of America or use CenturyLink for your phone service? If so, take your business elsewhere. As a consumer, you can send a strong message to companies that are exploiting the immigration crisis by boycotting their services and products. 

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Challenge Your Employer

Is your employer one of the many mentioned above? If so, show your disapproval and outrage by writing to management to demand that they stop doing business with CBP and ICE. Get a group of coworkers to sign on. This has worked! 

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Magnify the Issue

We can fight the administration's actions by harnessing the power of our community. Share the information and tools here with your social media networks on Twitter, Instagram, and Facebook. Make sure to follow and tag us in your posts at @correctionsproj.