Business is booming for private prison giants

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Over the past decade, the number of immigrants held in U.S. Immigration and Customs Enforcement detention facilities has skyrocketed. And if you're in the immigrant detention game, times have never been better.

This week, private prison giant the GEO Group posted a 40 percent boost in second quarter earnings with profits of $21.6 million, up from $17 million at the same point last year.

As the flow of immigrant detainees steadily rose in recent years with increased enforcement efforts, private prisons have come to define the immigrant detention system. Between 2005 and 2010, the number of immigrants detained by ICE swelled from 240,000 to nearly 400,000, and according to recently released data by advocacy group Detention Watch Network, nearly half of all those detainees now land in the hands of private prison corporations. GEO controls over 7,000 immigrant detention beds across the country - nearly 2,000 in Texas alone.

This week's earnings statements highlight just how much private prison fortunes have grown in tandem with the uptick in immigration detention. As James Kilgore, a research scholar with the University of Illinois writes this week, private prison companies like the Corrections Corporation of America over a decade ago were struggling to meet their bottom lines, and by 1999, CCA was forced to lay off some 40 percent of its workforce after reporting a yearly loss of over $53 million.

Times have certainly changed. This week CCA, which controls nearly 15,000 immigrant detention beds across the country, posted a 15.7 percent boost in quarterly earnings, with profits of $82.7 million for the three months ending in July. In a conference call with investors this week, CCA President and CEO Damon Hininger declared, "As for the business going forward, we think this is the most favorable new development environment the industry has ever seen."

For its part, GEO credited its growth on the expanding federal detention market in its conference call with shareholders this week, and John Hurley, head of GEO's detention and corrections operations, said "continued growth in the criminal alien population" should continue to boost GEO's fortunes in the coming years.

Part of GEO's growth has come from strategically placed investments over the past year, the company said, like GEO's new contract with ICE to build and run Karnes County's new immigrant detention center. The new 600-bed detention center should generate at least $15 million a year for the company once it's up and running, Hurley said. Similarly, a newly-signed contract between ICE and GEO to run a massive immigrant detention facility Adelanto, California, he said, is expected to make the company an additional $42 million a year.

Immigrant rights groups like Detention Watch Network have decried ICE's heavy reliance on for-profit private prison contractors in the immigrant detention system, given long-standing claims of abuse, lax oversight and shoddy medical care that have plagued many private-run immigrant detention centers (see “Prisons for profit: Deaths, lawsuits don’t stop expansion of GEO immigration prisons”).

GEO, in the past year, has even begun to branch outside of detention, diving into other aspects of the immigration enforcement system. Last December, the same month GEO secured the Karnes County detention center contract (and was sued by the family of a detainee who died at GEO's Reeves County detention center in Pecos), the company bought BI Incorporated, one of the largest providers of surveillance electronics in the country. In doing so, GEO inherited BI's nearly $400 million contract to be the sole supplier of electronic monitoring systems for ICE's Intensive Supervision Appearance Program (ISAP), which puts ankle monitors on immigrants awaiting court dates who are outside of detention.

"I think we're seeing a very disturbing trend," said Bob Libal of Grassroots Leadership, an immigrant rights group out of Austin that's long protested GEO's federal and local contracts in the state. GEO's acquisition of BI shows how private prison companies are now starting to go after softer forms of incarceration, like civil detention and increased monitoring systems, Libal said.

"ISAP has been roundly criticized by immigrant rights organizations as far too restrictive and is often used on people who were never in detention in the first place. ... So it's not reducing the detained population, but actually just expanding the umbrella of people who are under the arm of ICE," Libal said.

- Michael Barajas, mbarajas@sacurrent.com

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