“I will declare a national emergency on Day One to carry out the largest domestic deportation operation in American history.”…
“There is no price tag.” – President-Elect Donald Trump
When Donald Trump was declared the projected winner of the 2024 presidential election, the stock market price of Geo Group and CoreCivic, two of the largest for-profit operators of prisons and immigration detention centers in the US, shot up 74% and 55% respectively. Shortly after the election, during CoreCivic’s quarterly earnings conference call with its investors, its President and Chief Operating Officer, Damon Hininger, commented on the election results.
“First, I want to just give a few observations on the state side and then talk a little bit about the federal side. But let me just first say I’ve had the good fortune to be with the company well over 32 years. We have seen during that period of time significant events during that history where elections have kind of changed the course on policy and sentiment on certain issues. And it feels like with the election this year, we’re heading into an era that we really haven’t seen, maybe only once or twice in the company’s history, where the value proposition of the private sector for both our state partners and our federal partners are going to be not only strong today but even stronger as we go into the next couple of years. So, I want to start with that.”
Exactly twenty years prior, in their 2004 Annual Report, CoreCivic, then formerly known as Corrections Corporation of America (CCA) lauded the then-recent passage of the Intelligence Reform Bill — which authorized the Department of Homeland Security (DHS) to hire more border patrol agents and increase the available detention beds by 40,000 in the coming five years:
“Federal agencies are collectively our largest customer and accounted for 37% of our total revenues (when aggregating all of our federal contracts) for the year ended December 31, 2004. In December 2004, Congress passed the Intelligence Reform Bill […]. We believe these initiatives could lead to meaningful growth to the private corrections industry in general, and to our company in particular. We also believe growth will come from the growing demographic of the 18 to 24-year-old at-risk population. Males between 18 and 24 years of age have demonstrated the highest propensity for criminal behavior and the highest rates of arrest, conviction, and incarceration.”
Similar to their response to the passage of the Intelligence Reform Bill in 2004, CoreCivic leadership highlighted to their investors at their post-election quarterly earnings conference call that the election results would create new opportunities for government contracts, particularly ICE, “we think that the outcome of this election is probably going to be notable for ICE for a couple of different reasons. One is that we do think that there’s going to be increased need for detention capacity.”
CoreCivic leadership assured their investors that they are ready to meet the needs of an expansion of ICE facilities, they also noted that, “we are taking steps, not only just making sure that we’re prepared for activation of additional capacity for ICE, but also the CapEx need for those facilities.” CoreCivic additionally stated that the company has been preparing for two years to meet ICE’s potential future capacity demands.
“For the last two years, we’ve been taking steps to making sure that we’ve got the scale and ability to staff capacity, especially for ICE, making sure that we’ve got people in the pipeline that we can get them through the background screening process and ultimately through the academy. So, we’ve been working on that for about 24 months.”
During the conference call, CoreCivic also highlighted further opportunities to expand its services to the United States government by providing added air transportation services to ICE.
“And two final things on ICE. One thing we think that we’re probably going to need too, is additional transportation resources. And with our wholly owned subsidiary Trans Corps, who has decades of experience working with our federal partners, both the Marshall Service and ICE, we’ve got the capability and the leadership in place to scale up and provide additional capacity if there’s transportation needed, primarily on ground transportation. But also, we’ve got the competency to also do air transportation too as needed.”
According to CoreCivic leadership, ICE issued an “RFI” (Request for Information) a day after the election in advance of the procurement for the rebid of the alternative detention contract. CoreCivic leadership expressed that they believe the timing of the RFI was “probably not a coincidence” and a sign that ICE wants to provide added opportunities for government contracts with the private sector.
The United States government contracts with CoreCivic to develop and manage several prisons and immigration detention facilities across the United States. CoreCivic’s contracts with ICE often span multiple years and can be extended. In 2022, CoreCivic earned $552.2 million from ICE detention contracts, accounting for 30% of its total revenue. In CoreCivic’s 2023 Annual Report on Form 10-K, the company reported a total revenue of $1.9 billion, a 4% increase from the previous year. Higher occupancy rates in correctional and detention facilities primarily drove this growth.
The other major private prison company the United States government contracts with is GEO Group, Inc., a publicly traded corporation that operates government-owned facilities under management contracts. GEO Group’s long-term contracts with ICE typically span multiple years with options for renewal. GEO Group’s primary revenue comes from government contracts, with ICE being a significant contributor. In 2022, GEO Group’s revenue from ICE contracts increased by nearly 40% to a record $1.05 billion. GEO Group’s 2023 Annual Report on Form 10-K reported a total revenue of $2.41 billion and a net income of $113.8 million.
If CoreCivic and GEO Group continue their current track of monopolizing government contracts for the development and management of ICE facilities, the potential addition of millions of detained undocumented migrants could increase their profitability.
Undocumented migrants are estimated to account for approximately 3.3% of the US population. According to a special report from the American Immigration Council, deporting this population in mass is estimated to cost at least $967.9 billion if executed over ten years at a rate of 1 million undocumented migrants per year. However, Congress only allotted ICE sufficient funding to detain 41,500 people at any given time in its fiscal year 2024 budget. To cut the capacity gap between the current bed availability in ICE detention centers and the minimum capacity necessary to detain 13.3 million undocumented migrants, it is estimated that ICE will need to construct an additional 216 new facilities per year for a decade, with each facility having the capacity for 500 beds.
According to the American Immigration Council’s special report, it is estimated to cost $35,910,000 to build one facility, plus an additional annual cost of $47,950,000 to maintain that facility. To meet the aspirations of deporting 13.3 million undocumented migrants in approximately 10 years at the removal rate of 1 million undocumented migrants a year, creating the infrastructure for mass detainment is expected to cost the United States government $728.3 billion, or an average of $66.2 billion per year
The potential profitability due to the increase of ICE’s detention population has resulted in private prison companies challenging legal and political efforts that derail the expansion of ICE.
In April 2024, GEO Group filed a federal lawsuit in the U.S. District Court for the District of New Jersey challenging New Jersey’s ban on immigration detention contracts. GEO Group’s lawsuit against New Jersey officials argues that the state’s law prohibiting new or renewed immigration detention contracts is unconstitutional. The case is being heard by U.S. District Judge Robert Kirsch, who previously ruled in favor of CoreCivic in a similar lawsuit, declaring the state’s ban unconstitutional. The outcome of GEO Groups’s lawsuit is pending.
If the anticipated mass deportations are, in the words of the former ICE director, Tom Homan, “a historic deportation operation,” the detainment of millions of undocumented migrants may be what makes private prison companies like CoreCivic and GEO Group the major moneymakers of mass deportation.
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