By Bloomberg
June 28, 2018

The biggest private prison operators, which have poured money into Republican coffers, stand to make a windfall from President Donald Trump’s “zero tolerance” policy on illegal immigration that has pushed thousands of undocumented immigrants into detention.

The Department of Homeland Security is considering adding space for 15,000 additional people in family detention centers, about five times current capacity, even as the number of border crossings declines.

GEO Group Inc. and CoreCivic Inc., which each run a facility that holds immigrant families in Texas, have made more than $2.5 million in combined political donations since 2015. GEO shares have returned 85 percent and CoreCivic’s 79 percent since the 2016 presidential election. Both have advanced this month, even as U.S. stocks markets sputtered.

The surge in detainees to about 40,000 has followed a nationwide crackdown on undocumented immigrants already in the country as well as a policy adopted in April to detain people crossing the border illegally, separating parents from their children. Trump halted the practice last week amid a public uproar. A judge has since ordered the administration to reunite families separated at the border within 30 days, making the need for family detention centers more urgent.

Earlier this month, CoreCivic Chief Executive Officer Damon Hininger raved about the company’s prospects. This is “the most robust kind of sales environment we’ve seen in probably 10 years, not only on the federal side with the dynamics with ICE and Marshals, but also with these activities on the state side,” he said June 5 at an investor conference in New York.

DHS last week published a request for information on what it would cost to detain 15,000 in family facilities, which would include recreational, medical and educational components and shouldn’t resemble a prison. Current family detention facilities in the U.S. have a capacity of about 3,200.

GEO Group, the biggest private prison operator, runs 11 immigrant processing centers around the country and one family residential center in Karnes County, Texas, under contract with ICE. CoreCivic runs eight, including a facility for families in Dilley, Texas.

Neither company holds unaccompanied children. Their family detention centers are for mothers and children, who are typically there for short periods.

“CoreCivic has partnered with the federal government to operate detention and residential facilities for more than 30 years, and we stand ready to understand and accommodate their changing needs,” CoreCivic spokesman Steven Owen said in a statement. “To that end, we will review the RFI and assess how best to respond to it. For obvious competitive reasons, we cannot elaborate beyond that.”

GEO spokesman Pablo Paez said the company wouldn’t comment on procurement.

‘Moral Panic’

In fiscal 2017, the border patrol apprehended about 350,000 people, down about 24 percent from the previous year, the Department of Homeland Security said. About 70 percent of immigrant detainees are held in facilities owned by private companies, according to the National Immigrant Justice Center.

“If we have moral panic around certain issues, like drugs, or immigration, then we have more people getting locked up,” said Bob Libal, Grassroots executive director. “Apprehensions at the southern border are at 15-year lows, but the number of people being criminally prosecuted has spiked dramatically.”

The administration has argued it was forced to separate children from their parents in part because of a legal case from the Clinton administration era known as the Flores settlement, which prohibits immigrant children being held for more than 20 days, even with their parents.

Last week, the Justice Department filed a motion to allow children to be kept in detention with their families for more than 20 days.

CoreCivic gets more than 80 percent of its earnings from owning and operating prisons, jails and detention centers, Hininger said at the conference. The two companies’ have also gained since Trump’s election as the president reversed an Obama administration decision to phase out private prisons.

GEO Group, which also operates prisons in the U.K., South Africa and Australia, got about 19 percent of its total revenue last year from ICE contracts, company filings show. In addition to operating prisons, it also runs community programs and supplies and monitors ankle bracelets for ICE as an alternative to detention.

Both companies also contract with state governments and the U.S. Marshals Service. Both are real estate investment trusts that pay most of their profits to shareholders in dividends.

Active Donors

GEO Group and CoreCivic are active political donors. Each contributed $250,000 to Trump’s inaugural committee.

GEO Group also gave $275,000 to the Trump aligned super-PAC, Rebuilding America Now, in 2016 and another $170,000 to Trump Victory, which supported his campaign and Republican party committees. Ahead of the midterms, the company has given $200,000 to the Congressional Leadership Fund, which supports the House GOP, and $100,000 to the Senate Leadership Fund.

“Political contributions to candidates at the federal level are made through GEO’s Political Action Committee, which is exclusively funded through voluntary, non-partisan employee contributions, and these contributions should not be construed as an endorsement of all policies or positions adopted by any individual candidate,” said Paez.

CoreCivic’s PAC has given $134,000 to Republican candidates and committees ahead of the midterms, and $7,000 to Democrats.

GEO spent a record $1.7 million lobbying in 2017, including $550,000 paid to Ballard Partners, a firm started by a top fundraiser for Trump, disclosures show. The company spent about $380,000 in the first quarter of 2018. CoreCivic, which spent an average of $210,000 per quarter in 2017, plans to keep spending at roughly the same rate this year, Owen said.

Seeking Alternatives

GEO’s lobbying efforts focus on promoting public-private partnerships for correctional and detention facilities, community re-entry and supervision programs, and electronic and location monitoring services, Paez said.

“We do not take a position on nor have we ever advocated for or against criminal justice or immigration policies such as whether to criminalize behavior, the length of criminal sentences, or the basis for or length of an individual’s incarceration or detention,” Paez said.

Advocacy groups including the American Civil Liberties Union have argued that rather than incarcerating immigrants while their asylum requests are examined, it would be better to release them to social workers or family members or to use other alternatives. One such alternative, using ankle bracelets, is run by a subsidiary of GEO Group called BI, under contract with ICE.

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