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On the evening of November 9, a day after the election of Donald Trump as 45th president of the U.S., two major investors rejoiced with the stock increase in their respective Wall Street valuation: CoreCivic, a major company that owns and manages private prisons and detention centers in the U.S. registered a 43% increase, while GEO Group, its main competitor, saw a 21% rise.
Both companies served as donors to then-presidential candidate Donald Trump and both have increased their stock value over 100% to this day. The private detention center industry has probably been the most benefited as a result of the anti-immigrant rhetoric of Trump as a presidential candidate, as well as a sitting president signing immigration executive orders.
Without the practice of illegal immigrant detention, CoreCivic and GEO’s future would hang by a thread.
On August 18, 2016, in the twilight of the Obama administration, then-U.S. Deputy Attorney General, Sally Yeats instructed the reduction of contracts of private detention centers, via the Office of Procurement. Both CoreCivic and GEO stocks fell 40% after the announcement, two months later, during the close of the presidential campaign, CoreCivic informed of a staff reduction strategy for budgetary adjustment purposes.
Trump and his Democrat counterpart, Hillary Clinton, reached election day with opposite stances, while Clinton promised to carry on with the reduction of contracts from private detention centers, Trump kept the firm conviction that the private detention system was favorable for the U.S. During the last 15 years, the detention of illegal immigrants has largely relied on private corporations: six of every ten detained immigrants has been in a prison operated either by CoreCivic or GEO. Together both companies receive around USD$3,000m per year that are funded by U.S. taxpayers.
Attorney General Yeats decision to cut the contracts was based on a report published by the U.S. Department of Justice (DOJ), which records the drastic growth of detention practices of illegal immigrants in the U.S of up to 800% between 1980 and 2013 and how these demographics declined from 220,000 in 2013 to 195,000 in 2016. The document explains how the payment for elevated concessions to private detention companieclaimfs ceased to be a necessity. Additionally, the report noted how private prisons were less safe than public facilities. A statement which coincides with a series of claims against the way private detention facilities operate, with testimonies of at least six deaths and a claim for forced labor issued in 2014 against CCA, Corrections Corporations of America former name of CoreCivic until 10 days before the U.S. presidential election, which was ruled in favor of plaintiffs last February 27th.
The brief black episode lived by both Wall Street companies, only three months from August to November 2016, as well as their outstanding rebound, are surrounded by Trump’s rhetoric on the need to arrest immigrants, and thus keep private detention companies in the government’s payroll, and on the donations both GEO and CoreCivi made to Trump’s electoral campaign: USD$673,000 and USD$130,000 respectively.
GOLD MINE
Last February 23, Attorney General, Jeff Sessions, reversed Yate’s order and gave new life to both CoreCivic and GEO. He assured that the purpose of keeping contracts with private detention centers served “future needs” of the federal correctional systems of the U.S. His statements came three days later after U.S. Secretary of Homeland, John Kerry sent a memorandum to all border immigration and safety agencies instructing them to enhance the range of offenses considered as crimes, which raises the number of immigrants prone to be arrested and placed in a deportation center.
The deportation process is a gold mine for the private detention corporations, while the U.S. currently has reached 542,000 cases pending from resolution by a U.S. immigration court. According to the law, the detainee must stay in a detention center until his case is resolved by a judge, a challenge for the current system due to the number of judges appointed for cases of this nature: 251 until last year and 301 as from 2017, after the approval of new contracts fro private detention centers (50) under Trump administration. Three-hundred and one judges to attend to more than half a million pending cases.
Deportation processes last for years. People entering a detention center in 2013 have just received their first court hearing in 2019. More severe cases, people with criminal records or considered as potential flight risks are the main population for private detention centers, which house over 30,000 inmates. The rest of the detainees are subject to the catch and release policy which allows them to legally live in the country but without any migratory status until the day of hearing.
One of the objectives of the Trump administration is to eradicate this policy, this where private detention centers will be benefited with a considerable increase in the number of prison cells to keep all immigrant detainees arrested, unless the number of new immigration agents (15,000 according to secretary Kelly) parallels the hiring of judges to attend to the detainee population.
According to the U.S. Federal Bureau of Prisons (BOP), American taxpayers pay USD$123 each day per detainee “placed” in a general detention center and USD$342 per each immigrant in a family detention center. IBISWorld, a global company specialized in market research and procurement and purchasing research reports, estimates that keeping detainees awaiting a deportation process represents 21% of the private detention industry in U.S., an industry valuated in USD$5,300m.
MONEY AND LOBBY
President Trump executive orders are subject to the renovation and contract reallocation of detention centers approved by the U.S. Congress. However, as with many other millionaire companies participating in the political lobbying, CoreCivic and GEO have invested thousands of dollars in strengthening their relations with political players that determine the fate of their contracts. A report from the Detention Watch Network (DWN) notes that in 2013 GEO’s lobbying groups spent USD$1.2m to persuade the U.S. Congress to serve their interests. The company also invested USD$880 in external lobbying firms, while a report from Grassroots Leadership reads that between 2003 and 2016 CoreCivic, former CCA, and GEO jointly spent over USD$32m in lobbying in both chambers.
Concerned at the prospect of loosing their contracts with the arrival of Hillary Clinton to the U.S. presidency, GEO and CoreCivic propelled donations to Trump’s candidacy, to different political action groups of the Republican Party known as PAC as well as to some U.S. representatives and senators.
According to data from the Center for Responsive Politics, an organization that “tracks” the money from donations in electoral campaigns, GEO directly donated USD$280,000 to candidates in 2016, around 87% of Republican politicians, while CoreCivic donated USD$146,700, 90% of which were destined for candidates of the GOP.
From the total amount of each of their donations, USD$47,000 from GEO and USD$82,000 from CoreCivic were donated to campaigns of 24 congressmen participating in the Appropriations Committee of both the Lower Chamber and the U.S. Senate. Said committee is responsible for approving budgets for the contracts of the government with private corporations, including those of their campaign donors. Some of the beneficiaries of these donations are the former Republican nominee and senator Marco Rubio and the president of the Appropriations Committee of the Lower Chamber, Rodney P. Frelinghuysen.
