Detained for Profit: Spending Surges Under U.S. Immigration Crackdown

Corporations Make Billions from Immigration and Corrections Contracts Under Trump and Obama; More Than $2.3B in Federal Contracts in 2018

Federal immigration and corrections policies in the Trump and Obama administrations have resulted in a windfall for private government contractors.

Ten large contracting firms working for five federal agencies implementing federal immigration, corrections and detention policies received $2.32 billion in federal contract revenue last year, up 17 percent from nearly $2 billion at the start of President Donald Trump’s term and more than double the $942 million those same companies received in 2013, a Public Citizen analysis has found.

These contracting firms run detention facilities and prisons, transport detained migrants by plane, provide security guards and build technological systems for U.S immigration and corrections agencies, among other activities.

Public Citizen analyzed the 10 largest recipients of federal contracts from five agencies and offices involved in corrections and immigrant detention in 2018 and compared those figures to the amount of federal contract revenue received by these same companies over the prior decade.  The five agencies analyzed are: the U.S. Immigration and Customs Enforcement (ICE), U.S. Customs and Border Protection (CBP), the Department of Health and Human Services[1], the U.S. Marshals Service, and the Federal Bureau of Prisons.

The analysis was not limited to contracts for immigration and correction functions. It found that the largest contractors for these agencies typically were involved in immigration and corrections, including operating prisons and migrant detention facilities as well as providing services to the Federal Bureau of Prisons.

The analysis also shows that this spending began rising during President Barack Obama’s second term, coinciding with a surge in migrants from Central America. Under Trump, spending has ramped up even more as federal government has pressed ahead with sweeping efforts to constrain the flow of immigration to the United States. These actions have outraged many Americans while benefiting private contracting firms especially the two largest private prison companies.

The treatment of migrants, including the deaths of at least two dozen immigrants in federal immigration detention during the Trump administration, has sparked outrage around the country,  highlighting the grim reality of a private detention industry that has expanded under Democrats and Republicans alike. Numerous reports and investigations of private prisons and detention centers over many years have documented evidence and allegations of violence, substandard medical care, deaths and suicides, sexual abuse and exploitative labor practices.

Trump’s aggressive immigration enforcement actions were exemplified by the administration’s “zero tolerance” policy for illegal entry, announced by former Attorney General Jeff Sessions in May 2018, of prosecuting all adults detained for illegal border crossings. While announcing the policy, Sessions said there would be an increase in prosecutors and immigration judges to handle the expected increase in cases but acknowledged that “children inevitably for a period of time might be in different conditions.” To comply with a longstanding requirement that children cannot be held in family immigration detention for more than 20 days, children with imprisoned parents have been placed in custody of the Department of Health and Human Services, whose Office of Refugee Resettlement operates as their legal guardian.

After the separation of thousands of children from their parents and the resulting public outcry, Trump backtracked months later, reversing the prior policy and allowing families to be detained together. Still, an inspector general’s report released in September 2019 found that the Trump policies resulted in longer stays in custody and a “rapid increase in the number of younger children” in custody, many of whom were separated from their parents. The report also found that many workers were unprepared to deal with children who had experienced extreme trauma in their country of origin and as a result of being separated from their parents. “Children who did not understand why they were separated from their parents suffered elevated levels of mental distress,” the report found.

Most recently, the Trump administration proposed new rules allowing the federal government to detain migrant families indefinitely while judges consider applications for asylum, a move that would involve withdrawing from a 1997 consent decree that has set standards for how detained migrant children should be treated. Immigration advocates condemned the move, with Holly Cooper, co-director of the immigration law clinic at University of California, Davis, telling reporters: “We’re going to have a world that looks a lot like the internment of families and children, where we have basically regularized prison as a default for families seeking political asylum in this country.”

$2.32 billion

in federal contract revenue went to ten major contractors to federal agencies that run immigration and corrections in 2018.

$942 million

went to those same companies in 2013.

$1.7 billion

has gone to private prison firm GEO Group Inc. during the Trump administration.

$1.2 billion

has gone to private prison firm CoreCivic Inc. during the Trump administration.

Additional Findings:

  • During the Trump administration, major prison contractors GEO Group and CoreCivic Inc. have each received more than $1 billion from the five agencies analyzed by Public Citizen. GEO Group has received about $1.7 billion, from the start of 2017 through June 30 of this year. CoreCivic has received $1.2 billion during that same time period.
  • Five companies have seen contract revenue increases of 25 percent or more from the last two years of the Obama administration to the first two years of the Trump administration. Contract revenue more than tripled (329%) at Deloitte Consulting, was up by 43% at GEO Group Inc. and increased 40% at MVM Inc. Others showing large increases over that same time period were Comprehensive Health Services Inc. (39%) and Unisys Corp. (25%).
  • The surge in immigration detention contracting appears to be driving up overall contracting at some federal agencies. In total, the five agencies and offices studied by Public Citizen awarded more than $10.2 billion in contracts last year, up $1.1 billion, or 12 percent, from $9.1 billion the prior year. During President Barack Obama’s administration, contracting at these same agencies rose to about $9 billion in 2016 from a low of $6.3 billion.

Federal Contract Revenue for 10 Largest Contractors of Immigration/Detention Agencies Under Trump, 2017-2019 (First Six Months)

Contractor  2017  2018  2019 (1/1 through 6/30)  Trump Total
GEO GROUP INC./B.I. INCORPORATED  $567,015,497  $625,672,916  $506,541,762  $1,699,230,175
CORECIVIC, INC.  $521,963,583  $377,049,767  $307,318,607  $1,206,331,957
UNISYS CORP  $311,081,862  $311,652,598  $(3,324,833)  $619,409,627
COMPREHENSIVE HEALTH SERVICES INC.  $69,684,953  $205,252,758  $212,146,117  $487,083,828
DELOITTE CONSULTING LLP  $113,633,741  $217,289,949  $69,560,855  $400,484,544
PAE AVIATION AND TECHNICAL SERVICES LLC  $124,176,745  $110,956,067  $71,073,058  $306,205,870
METROPOLITAN SECURITY SERVICES, INC.  $97,807,499  $114,499,081  $78,406,534  $290,713,114
MANAGEMENT & TRAINING CORPORATION  $121,791,669  $78,249,377  $90,656,212  $290,697,258
MVM INC.  $64,425,445  $144,583,737  $80,467,900  $289,477,082
NAPHCARE INCORPORATED  $91,302,569  $104,916,307  $76,780,021  $272,998,897
Source: Public Citizen analysis of USASpending.gov data (calendar years)

Change in Federal Contract Revenue for Large Contractors of Federal Immigration/Detention Agencies in Trump Admin (2017-18) Vs. Obama (2015-2016)

Contractor Name 2015-2016 (Obama) 2017-2018 (Trump) % Change
DELOITTE CONSULTING LLP  $77,093,189  $330,923,689 329%
GEO GROUP INC/ B.I. INCORPORATED  $833,213,901  $1,192,688,413 43%
MVM INC.  $149,791,879  $209,009,182 40%
COMPREHENSIVE HEALTH SERVICES, INC.  $198,043,891  $274,937,711 39%
UNISYS CORP  $497,746,816  $622,734,460 25%
NAPHCARE INCORPORATED  $182,422,802  $196,218,876 8%
CORECIVIC, INC.  $851,605,188  $899,013,351 6%
PAE AVIATION AND TECHNICAL SERVICES  $263,024,433  $235,132,812 -11%
METROPOLITAN SECURITY SERVICES, INC.  $274,190,105  $212,306,580 -23%
INTER-CON SECURITY SYSTEMS INC  $290,903,377  $182,882,103 -37%
Source: Public Citizen analysis of USASpending.gov data (calendar years)

 

A Growing Industry Profits from Immigrant Detention

Starting about 35 years ago, the U.S. government began to delegate to private corporations the power to operate federal prisons and immigrant detention facilities. In early 1980s, under the Reagan Administration, the Immigration and Naturalization Service, the predecessor of today’s ICE, was among the first federal agencies to contract with for-profit corporations to run detention facilities. Advocates of private contractors claimed that they could save taxpayer money while relieving prison overcrowding. “Privatization is a practical and innovative solution to the problems of overcrowding and high costs facing the U.S. prison system,” enthused a 1988 Heritage Foundation report. Decades later, private prison companies have failed to achieve significant cost savings for governments, despite efforts to slash prison budgets by hiring poorly paid non-union workers. A 2009 comprehensive analysis of 12 studies examining this issue found that “cost savings from privatizing prisons are not guaranteed and appear minimal.”

The private prison industry has kept growing through both Democratic and Republican administrations and thrived as border crossings have surged over the past 15 years. In 2006, the New York Times wrote, “As the Bush administration gets tougher on illegal immigration and increases its spending on enforcement, some of the biggest beneficiaries may be the companies that have been building and running private prisons around the country.” This forecast proved accurate. The average daily population of detained immigrants held by ICE and INS has grown from about 20,000 in 2000 to nearly 40,000 by the end of President Barack Obama’s term, when a crush of new migrants prompted Obama officials to find more holding space,  That population surged to more than 50,000 by spring 2019 as the Trump administration’s immigration crackdown accelerated.

The Obama administration’s family detention policies, enacted as Central American families fled violence and poverty in their countries, foreshadowed the Trump administration’s harsh crackdown. A 2014 Obama decision  allowed family immigrant detention centers, typically run by private firms, backtracking on a prior decision to scale back this practice.  “Frankly, we want to send a message that our border is not open to illegal migration, and if you come here, you should not expect to simply be released,” Obama’s Homeland Security Secretary, Jeh Johnson, said at a CoreCivic detention center in Texas in December 2014.

The Obama administration prioritized the removal of noncitizens with criminal records as well as those making unauthorized border crossings. It received considerable criticism, with immigrant advocates suing the government over detention of immigrant mothers and children. “Locking up families and depriving them of their liberty in order to scare others from seeking refuge in the U.S. is inhumane and illegal,” Judy Rabinovitz, deputy director of the ACLU’s Immigrants’ Rights Project, said in a statement at the time.  The American Academy of Pediatrics wrote in a letter to Homeland Security Secretary Johnson that “continued detainment of any children and mothers in the existing facilities puts them at greater risk for physical and mental health problems and unnecessarily exposes children and mothers to additional psychological trauma.”  In summer 2015, a federal judge ruled that the Obama administration’s detention of children violated the terms of a 1997 settlement.  In 2016, The New York Times editorial board took the Obama administration to task over the issue, writing that “these privately run, unlicensed lockups are no place for children. Or mothers. Their existence belies President Obama’s oft-professed concern for the humane treatment of people fleeing crime and violence in Guatemala, Honduras and El Salvador.”

Privately owned detention facilities have held a growing share of ICE’s detained population. A U.S. Department of Homeland Security’s advisory council reported in 2016 that facilities owned by for-profit contractors held 65% of ICE’s detainees as of September 2016, compared with about 49 percent in 2009. Under a Congressional mandate, ICE is required to have 34,000 beds available per night for immigrant detainees, a quota that critics call unnecessary and costly.  By contrast, outside the immigration system, the number of federal inmates in private prisons has declined after hitting a peak of more than 41,000 in 2013.

Toward the end of the Obama administration, the tide seemed to be shifting against private detention. In a 2016 Mother Jones expose, reporter Shane Bauer spent four months under cover as a private prison guard, detailing low wages, thin staffing, inadequate security, violence and poor medical care at a private prison in Louisiana. Weeks later, an inspector general’s report concluded that private prisons are less safe and less effective than government-run prison facilities, citing frequent problems with contraband, assaults, uses of force other discipline issues. Sally Yates, deputy attorney general at the time, announced that the federal Bureau of Prisons would scale back and then eliminate the use of private facilities, and said there would be less need for such facilities amid a declining federal prison population.

“Time has shown that they compare poorly to our own Bureau facilities,” Yates wrote. Private prisons, she wrote, “simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and … do not maintain the same level of safety and security.” After the DOJ’s policy change, then-Homeland Security Secretary Johnson directed an advisory body to “review our current policy and practices concerning the use of private immigration detention and evaluate whether this practice should be eliminated.” Shares in private prison firms plunged on that news.

However, Trump’s election was a major turning point for the private prison industry. Shares soared after Trump’s election, with shares of the two largest prison-industry companies, Core Civic and GEO Group, skyrocketing as investors expected a change in government policy toward the industry. On February 21, 2017, Wall Street was proven correct, as Attorney General Jeff Sessions rescinded the Obama DOJ’s private prisons policy, stating that it “changed long-standing policy and practice, and impaired the Bureau’s ability to meet the future needs of the federal correctional system.”

With Trump ramping up detention and deportation of immigrants, private prison firms have seen their coffers overflowing with federal contract revenue. But Wall Street has been considerably less enthusiastic about the companies of late. After riding high through much of Trump’s first year, shares in CoreCivic and GEO Group have trended downward amid mounting controversy about the Trump administration’s immigration policies as well as the decision by several major banks to stop doing business with the industry.

 

Playing the Influence Game

The for-profit prison industry has a history of political campaign spending, having spent more nearly $8.9 million since 2000 on campaign contributions, with about 60% going to Republicans, according to the Center for Responsive Politics. Since 2009, the industry has spent more than $25 million lobbying lawmakers and federal agencies, with $3.8 million in 2018 lobbying spending. During the 2018 campaign cycle, political action committees and individuals tied to the sector gave more than $1 million to Republican lawmakers at the federal level, making up 88% of industry contributions, with only 12% going to Democrats, according to the center’s data.

The industry has also been influential at the state level. From 2009-2016, private prison companies contributed more than $7 million at the state level, with the vast majority coming from GEO Group ($4.3 million) and CoreCivic ($2.4 million.), according to a report by the National Institute on Money and Politics.

Profiles of Top Contractors: GEO Group Inc.

GOVERNMENT CONTRACTS: In 2018, GEO Group received nearly $626 million from the five agencies in Public Citizen’s analysis, the most of any company. That was up from $567 million a year earlier and more than triple 2013’s level of about $200 million. The company’s federal contracting revenue in the first two years of the Trump administration was up 43% from the last two years of the Obama administration, according to Public Citizen’s analysis.

BACKGROUND: GEO Group is one of the two biggest players in private corrections, with more than 89,000 corrections and detention beds in 127 U.S. facilities, as well as 7,600 beds in six international facilities as of mid-2019. The company traces its origins to the security firm Wackenhut Corporation, founded by former FBI agent George Wackenhut, who founded a private detective agency in the Miami area, then expanded into the security business. The company launched a private corrections division, Wackenhut Corrections Corp, in 1984, which became a publicly traded corporation in 1994. After Wackenhut’s security business was sold to a Danish security firm in 2003, Wackenhut repurchased the Danish firm’s stake in the corrections business and changed its name to GEO Group Inc. Led by its founder and current CEO George Zoley, GEO Group has continued to grow. The company in 2011 paid $415 million to purchase B.I. Incorporated, which sells GPS tracking bracelets, radio frequency monitoring devices to the corrections industry, a business that has sparked protests outside B.I.’s offices in Boulder, Colo.

GEO Group, which recently opened a new $57 million headquarters in Boca Raton, Fla., faces growing scrutiny, including from Congress, over the treatment of detained migrants. A report by the Department of Homeland Security’s inspector general found major problems at an ICE detention facilities, including GEO Group properties, including poor food safety, deteriorating bathrooms and violations of standards for the treatment of detainees.

The Jewish activist group Never Again Action has been protesting ICE detentions, including staging protests at GEO Group offices.

CAMPAIGN CONTRIBUTIONS: GEO Group’s political action committee and employees have contributed nearly $4.4 million to federal candidates since 2004, including $1.27 million in the 2018 campaign cycle, $1.32 million in the 2016 campaign cycle and about $515,000 in the 2020 campaign cycle thus far. During the 2016 presidential campaign, a GEO Group lobbyist, Richard Sullivan, was a “bundler” for the Hillary Clinton campaign, collecting contributions from family and friends.

Top congressional recipients of GEO Group employee and PAC money include: Sen. Rick Scott (R-Fla), Rep. John Culberson (R-Texas), Rep. Henry Cuellar (D-Texas), Sen. Marco Rubio (R-Fla.), Sen. Mike Lee (R-Utah) and Sen. Pat Toomey (R-Pa.). Over his career, Cuellar, whose district on the Texas-Mexico border has several GEO Group facilities, received nearly $124,000 from GEO Group’s PAC and company employees, making GEO the top campaign contributor of Cuellar’s entire Congressional career. Cuellar faces a 2020 primary challenge from immigration lawyer Jessica Cisneros who has strongly criticized the lawmaker’s ties to GEO Group  company. The GEO Group PAC has given $9,700 to Cuellar’s 2020 campaign. A company executive told Bloomberg News that “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.”

GEO Group CEO Zoley, and his wife Donna have made more than $540,000 in political contributions since 2010, including $10,000 to Cuellar, according to a Public Citizen analysis of data from the Federal Election Commission. That tally includes a June 2019 $100,000 donation to Trump Victory – the joint fundraising committee between the Trump reelection campaign, the Republican National Committee and several state Republican parties.

Top 10 Recipients of Federal Political Giving by George and Donna Zoley, 2010-Present

Recipient Total
TRUMP VICTORY  $100,000
TAKE BACK THE HOUSE 2020  $100,000
NATIONAL REPUBLICAN CONGRESSIONAL COMMITTEE  $89,400
REPUBLICAN NATIONAL COMMITTEE  $58,900
MCCONNELL VICTORY COMMITTEE  $50,000
NATIONAL REPUBLICAN SENATORIAL COMMITTEE  $39,400
CAPITO FOR WEST VIRGINIA  $11,000
TEXANS FOR SENATOR JOHN CORNYN INC.  $10,000
TEXANS FOR HENRY CUELLAR CONGRESSIONAL CAMPAIGN  $10,000
KEVIN MCCARTHY FOR CONGRESS  $5,600
Grand Total  $540,854
Source: Public Citizen analysis of campaign contribution records from Federal Election Commission

Federal elections records also show that two GEO Group subsidiaries, GEO Corrections Holdings Inc. and Geo Acquisition II, have made nearly $1.4 million in political contributions since 2015, including $300,000 each to major Republican Congressional super PACs. Records also show $225,000 in donations to the super PAC Rebuilding America Now, backed by Trump friend Tom Barrack, which spent nearly $23 million to help elect Trump.

This contribution sparked a formal complaint by the Campaign Legal Center, which argued that the donation violated the prohibition on contributions by government contractors. In response, the company denied any legal violation. “All of our political contributions to federal super PACs comply with all applicable federal laws and regulations and have been made by GEO Corrections Holdings, a legal entity which does not hold any federal contracts,” GEO Group told the International Business Times. Additionally Maplight first reported that GEO Acquisition II made a $125,000 contribution to a superPAC supporting former Florida Gov. Rick Scott’s successful Senate campaign, raising similar questions about contributions by government contractors. In Florida business records, Zoley is listed as president or CEO of GEO Corrections Holdings and GEO Acquisition II. Public Citizen, along with many other civic organizations and public officials, have long criticized the Federal Election Commission for failing to enforce the federal ban on such contributions by allowing companies to create artificial firewalls between divisions that solicit and receive federal contracts and those that make campaign contributions. Public Citizen has also called on the FEC to create rules that would close this loophole.

Top 20 Recipients of GEO Group Political Action Committee Contributions, 2010-Present

Recipient Total
TRUMP VICTORY  $190,000
MCCARTHY VICTORY FUND (Rep. Kevin McCarthy, R-Calif.)  $55,000
TEXANS FOR GREG ABBOTT  $52,500
REPUBLICAN LEGISLATIVE CAMPAIGN CMTE  $50,000
ROMNEY VICTORY INC.  $50,000
WIN IN 2016  $50,000
REBUILDING AMERICA NOW  $50,000
NRSC TARGETED STATE VICTORY COMMITTEE  $50,000
FLORIDA FIRST PROJECT (Sen. Marco Rubio, R-Fla.)  $50,000
NRCC HEADQUARTERS/BUILDING FUND  $47,200
NATIONAL REPUBLICAN CONGRESSIONAL COMMITTEE  $45,000
NATIONAL REPUBLICAN SENATORIAL COMMITTEE  $45,000
BOEHNER FOR SPEAKER  $45,000
TEXANS FOR HENRY CUELLAR CONGRESSIONAL CAMPAIGN  $44,390
RUBIO VICTORY COMMITTEE  $40,000
NRSC TARGETED STATE VICTORY FUND  $35,000
NRC HEADQUARTERS/BUILDING FUND  $35,000
NRSC HEADQUARTERS/BUILDING FUND  $35,000
DEMOCRATIC CONGRESSIONAL CAMPAIGN  $30,000
NRSC LEGAL FUND  $25,000
GRAND TOTAL $3,272,714

 

Source: Public Citizen analysis of Federal Election Commission data

 Recipients of GEO Subsidiary Political Giving

Recipient  GEO ACQUISITION II  GEO CORRECTIONS HOLDINGS INC  Total
CONGRESSIONAL LEADERSHIP FUND (GOP House super PAC)  $100,000  $200,000  $300,000
 SENATE LEADERSHIP FUND (GOP Senate super PAC)  $300,000  $300,000
 NEW REPUBLICAN PAC (Sen. Rick Scott, R-Fla.)  $225,000  $225,000
 REBUILDING AMERICA NOW  $225,000  $225,000
 CONSERVATIVE SOLUTIONS PAC  (Sen. Marco Rubio R-Fla.)  $110,000  $110,000
 AMERICA’S FUTURE  $100,000  $100,000
 FLORIDA FIRST PROJECT  $100,000  $100,000
 FLORIDA CONSERVATIVE FUND  $10,000  $10,000
 VALOR FUND  $10,000  $10,000
 Grand Total  $435,000  $945,000  $1,380,000
Source: Public Citizen analysis of Federal Election Commission data

LOBBYING AND INFLUENCE GEO Group has spent more than $9.5 million on federal lobbying since 2004. In 2018, GEO Group spent more than $1.5 million on lobbying, with lobbyists including former Rep. Connie Mack (R.-Fla.). and Brian Ballard, a longtime Florida lobbyist and Trump supporter whose firm has become the go-to lobbying shop for those seeking to influence the Trump administration. The company’s lobbyists have also included a former aide to Trump’s first attorney general, Jeff Sessions, as well as Lanier Avant, a former Democratic staff director for the House Homeland Security Committee, who served a prison term after pleading guilty to tax evasion charges. “We believe strongly in providing people with the tools and skills necessary to have a second chance at life after serving a prison sentence; therefore Lanier’s past never factored into our consideration,” a GEO Group spokesman told The Daily Beast

In 2017, GEO Group held its annual conference at Trump’s golf resort, the Trump National Doral near Miami. GEO Group and competitor CoreCivic each contributed $250,000 toward Trump’s inauguration. GEO Group is also a major player at the state level, spending $9.7 million on lobbying in states since 2010, according to the National Institute on Money in Politics.

Despite its financial interests in an expanding prison system, GEO Group says that it does not lobby for longer prison sentences. In its federal lobbying disclosures, GEO Group lobbyists say that the company promotes “the use of public-private partnerships in the delivery of correctional services including evidence-based rehabilitation programs, both in-custody and post-release, aimed at reducing recidivism and helping the men and women in our care successfully reintegrate into their communities” and that the company “does not take a position on or advocate for or against criminal justice policy related to criminalizing certain behaviors or determining the length of criminal sentences.”

REVOLVING DOOR: GEO Group has numerous connections to top government officials. A former head of ICE, Julie Myers Wood, serves on the company’s board as does Scott Kerman, formerly California’s top state corrections official. GEO Group hired the former second-ranking ICE official, Daniel Ragsdale as executive vice president for contract compliance. GEO also hired a top Federal Bureau of Prisons official, Frank Lara, as director of operations. While at the BOP, Lara sent a memo  directing officials to transfer inmates to private contract facilities as a way to “alleviate the overcrowding at Bureau of Prisons’ institutions and maximize the effectiveness of private contracts,” according to Government Executive. In 2012, GEO Group hired David Venturella, formerly director for enforcement and removal at ICE as senior vice president for client relations. The company’s general counsel, Joe Negron, is the former president of Florida’s state senate.

ACTIVITY UNDER TRUMP: In April 2017, GEO Group won a $110 million contract to build a 1,000-bed immigrant detention facility north of Houston. The company also announced a $25 million annual contract to reactivate an ICE processing center in Basile, Louisiana, a $37 million annual contract to reactivate a Federal Bureau of Prisons facility in Michigan as well as a $10 million per year contract to expand the capacity of an ICE processing center near Houston.

Profiles of Top Contractors: CoreCivic Inc.

GOVERNMENT CONTRACTS: In 2018, CoreCivic received nearly $377 million from the five agencies in Public Citizen’s analysis, the second-most of any company but down from $522 million a year earlier. The company’s federal contracting revenue in the first two years of the Trump administration was up 6% from the last two years of the Obama administration, according to Public Citizen’s analysis.

BACKGROUND: Nashville, Tenn. based CoreCivic was founded in 1983 as Corrections Corporation of America and was the first firm in the industry. One of the company’s three founders, Tom Beasley, was a lawyer former head of the Tennessee Republican Party. Another founder, Beasley’s friend and West Point roommate Doc Crants, was a real estate and cable television executive who liked the idea of a business without significant competition.

A third founder, T. Don Hutto, had been head of the Arkansas and Virginia corrections departments and was president of the American Correctional Association. According to research by Mother Jones’ Shane Bauer, Hutto got his start as warden of a prison plantation in Texas, where 1,500 inmates worked its cotton fields in an arrangement that “had grown directly out of slavery.” In a promotional video, Beasley and Hutto chuckle about their first contract, which involved leasing a motel in Houston to detain undocumented immigrants, a setup that raised civil liberties concerns at the outset.

According to an official company history. CCA started managing a 63-bed juvenile facility in Tennessee in 1984 and later that spring opened the Houston Processing Center, the first detention center designed and built by a private company. In 1985 CCA tried to take over the entire state prison system in Tennessee with the backing of then-Gov. Lamar Alexander, but failed. Today, CoreCivic bills itself as the “largest private owner of real estate utilized by government agencies” with more than 70,000 correction and detention beds. CoreCivic, which is structured as a real estate investment trust, currently owns and manages 51 correctional and detention facilities with a capacity of 73,000 people.

Many CoreCivic facilities have had highly public problems, documented in audits and lawsuits. A Tennessee audit found insufficient staffing despite large numbers of gang members as well as excessive force  problems at the state’s largest prison, which opened in 2016 and is run by CoreCivic. In another CoreCivic prison in Tennessee, a guard was  stabbed and sexually assaulted. An analysis found that CoreCivic’s four prisons in Tennessee have had 10 homicides in the past five years, twice as many as in state-run prisons. In Texas, employees of the CoreCivic detention facility named after Hutto, the T. Don Hutto Detention Center, have faced allegations of sexual abuse and poor conditions. The Guatemalan mother of a one-year-old girl who died weeks after her release from a CoreCivic immigrant detention center in Dilley, Texas has sued the company for $40 million, alleging the company did not properly treat a severe respiratory infection. The widow of a man beaten to death in a Tennessee county facility run by CoreCivic alleges that understaffing at the facility led to his death.

In a blog post, CoreCivic blamed a “politically-charged environment” for the controversy around its operations. “We don’t provide housing for any children who aren’t under the supervision of a parent. We also don’t operate shelters for unaccompanied minors, nor do we operate border patrol facilities.” The company noted that its Texas family detention center was established by the Obama administration and said that children there receive education and medical care.

In a December 2016 CNBC appearance before Trump’s inauguration, the company’s current CEO, Damon Hininger, said that Trump administration would likely be more friendly to his industry than Obama. “If there is a need for more detention capacity on the border, we could provide that solution,” he said. “If there is an increased need in a new administration, of course we’ll be there to help.”

By mid-2018, Hininger was even more enthusiastic. While speaking at an investor conference in New York, he called the current business climate “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.”

CAMPAIGN CONTRIBUTIONS: CoreCivic’s political action committee and employees have contributed $3.3 million to federal candidates since 1990, including nearly $370,000 in the 2018 cycle and about $350,000 in the 2016 cycle, according to the Center for Responsive Politics. These contributions overwhelmingly (85%) went to Republicans. Top congressional recipients of employee and PAC money include Sen. Marsha Blackburn (R-Tenn,), Rep. John Rose (R-Tenn) Sen. Martha McSally (R-Ariz.), Rep. John Culberson (R-Texas) and Rep. Mark Green (R-Tenn.). The company’s political action committee has contributed $1.3 million to candidates since 2010, with a focus on top Republican leaders, according to a Public Citizen analysis.

Top 20 Recipients of CoreCivic PAC Contributions Since 2010

Recipient Total
NATIONAL REPUBLICAN SENATORIAL COMMITTEE (NRSC)  $150,000
NATIONAL REPUBLICAN CONGRESSIONAL COMMITTEE (NRCC)  $150,000
ROCK CITY PAC

(Sen. Bob Corker R.-Tenn.)

 $32,500
HELP AMERICAS LEADERS PAC (HALPAC) (Rep. Hal Rogers, R-Ky)  $32,500
NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS PAC (NAREITPAC)  $30,000
CULBERSON FOR CONGRESS (Rep. John Culberson, R-Texas)  $27,500
CHUCK FLEISCHMANN FOR CONGRESS COMMITTEE, INC. (Rep. Chuck Fleischmann, R-Tenn.)  $21,700
THE FREEDOM PROJECT/FRIENDS OF JOHN BOEHNER  $20,000
REPUBLICAN PARTY OF KENTUCKY  $19,000
BOEHNER FOR SPEAKER  $17,000
CONSERVATIVE & REPUBLICAN TOGETHER EQUALS RESULTS PAC  $16,000
FRIENDS OF JOHN BOEHNER  $15,000
HOEVEN FOR SENATE  $15,000
KEVIN MCCARTHY FOR CONGRESS  $15,000
STEVE DAINES FOR MONTANA  $14,500
CORY GARDNER FOR SENATE  $14,000
DIANE BLACK FOR CONGRESS  $14,000
21ST CENTURY MAJORITY FUND  $12,500
MARSHA BLACKBURN FOR CONGRESS  $11,500
JOHN CARTER FOR CONGRESS COMMITTEE  $11,500
GRAND TOTAL $1,322,037
Source: Public Citizen analysis of Federal Election Commission data

LOBBYING AND INFLUENCE: CoreCivic has spent more than $26 million on federal lobbying since 1998. In 2018, the company spent more than $1.2 million, with 12 lobbyists including former Rep. Al Wynn (D-Maryland) and Jeff Miller, the former 2016 campaign manager for Energy Secretary Rick Perry as well as Tom O’Donnell, former chief of staff to House Majority Leader Dick Gephardt (D-Mo.) Like GEO Group, CoreCivic donated $250,000 to Trump’s inaugural committee. CoreCivic says its lobbying efforts “don’t engage in any public policy issues that drive incarceration or detention rates” and says the company does not cut corners on care, staff or training, which meets, and in many cases exceeds, our government counterpart’s standards.” The company is also a major player at the state level, spending $8.4 million on lobbying in states since 2010, according to the National Institute on Money in Politics.

REVOLVING DOOR: CoreCivic has hired numerous government officials, including several from the Federal Bureau of Prisons. Board member Stacia Hylton was director of the U.S. Marshals Service under President Barack Obama. Another CoreCivic board member, Harley Lappin, was director of the Federal Bureau of Prisons and formerly worked as a top CoreCivic executive. Board member Thurgood Marshall Jr., was a Clinton administration official and is son of the former Supreme Court Justice Thurgood Marshall. The company’s board chairman, Mark Emkes, was a top Tennessee state official under former Republican Gov. Bill Haslam. Many executives at the company also had long careers within the federal corrections system, including Bill Dalius, a CoreCivic vice president, who was a chief financial officer at the prisons bureau and a warden at several federal facilities. Don Murray, the company’s vice president for quality assurance worked at the prison bureau for more than 22 years.

ACTIVITY UNDER TRUMP: In May 2019, CoreCivic won a $35 million to $40 million per year contract with the U.S. Marshals Service and a local municipality to reopen a 1,400-bed detention center in Eden, Texas that had been closed for two years. The company also reached a new contract with a county government in New Mexico and ICE to reactivate a 910-bed ICE detention facility in New Mexico in a contract worth $25 million to $30 million per year. The company is also finishing a 512-bed expansion of a detention center in the San Diego area, to be used by the U.S. Marshals Service and ICE, which is expected to open in October 2019. CoreCivic also reached an agreement to house ICE detainees at a 3,060-bed facility in Arizona, which is no longer being used by California after the state stopped using private prisons. The company also has said it is in talks with ICE to convert a Bureau of Prisons facility in Mississippi to an ICE facility, after the Bureau of Prisons terminated the facility’s contract with CoreCivic.

Other Contractors

UNISYS CORP: A major information technology contractor based outside Philadelphia, Unisys received nearly $312 million in 2018 from the agencies in Public Citizen’s analysis, level with the prior year and more than double what the company received in 2013. The company’s federal contracting revenue in the first two years of the Trump administration was up more than 25% from the last two years of the Obama administration, according to Public Citizen’s analysis. 

Unisys is a major provider of information technology services to U.S. Customs and Border Protection. The company in 2018 won a five year contract to “develop, operate and manage systems used for risk assessments of people and cargo entering the U.S.” as well as a contract to ‘modernize the agency’s technology for identifying people and vehicles entering and exiting the U.S,” including license plate reader technology. A Unisys subcontractor, Perceptics, which makes license plate scanners, was the victim of a cyberattack and data breach disclosed in summer 2019.

DELOITTE CONSULTING LLP: The consulting arm of the global accounting firm, Deloitte received more than $217 million in 2018 from the five agencies in Public Citizen’s analysis, up from nearly $114 million in the prior year and more than six times the $32 million the company received in 2013. The company’s federal contracting revenue in the first two years of the Trump administration was up nearly 330% from the last two years of the Obama administration, according to Public Citizen’s analysis.  The gain was driven by a large increase in contract revenue from U.S. Customs and Border Protection, and also an increase in health-related consulting. Federal contracting records provide limited information about Deloitte’s contracts, which appear mainly connected to financial management and information technology functions. Some contracts appear to directly support immigration enforcement, such as an $8.2 million telecommunications contract with U.S. Customs and Border Protection. Another $64 million contract with U.S. Immigration and Customs Enforcement focuses on technology for student visa programs. Other Deloitte contracts in Public Citizen’s tally appear connected to health programs and seem unrelated to immigration or corrections.

Deloitte’s federal work has proven controversial within the company. Employees created a petition  calling on the company to stop working for ICE and CBP, writing that that Deloitte “must question how its services and offerings to these agencies contribute to ongoing injustice.” A Deloitte employee’s LinkedIn profile uncovered by the website Popular Information listed work on “ICE facilities management group, and the fleet management programs specifically on “detention bed space utilization and optimization processes.” A spokesman told Popular Information that the profile “does not accurately reflect his responsibilities since joining Deloitte.,” and an internal e-mail said Deloitte “deploys hundreds of practitioners who proudly serve or have served to help facilitate trade, support immigration benefits, assist our clients in preventing and responding swiftly to terrorist incidents, thwart drug smuggling, human trafficking, and transnational organized crime, and launch travel programs that serve the public.”

COMPREHENSIVE HEALTH SERVICES INC: A healthcare, medical and emergency relief services contractor, Comprehensive Health Services Inc. received more than $205 million in 2018 from the five agencies in Public Citizen’s analysis, up from nearly $70 million the prior year and more than 170 times as high as in 2013, when it received $1.2 million from the government. The company’s federal contracting revenue in the first two years of the Trump administration was up nearly 40% from the last two years of the Obama administration, according to Public Citizen’s analysis. The vast majority of spending was through the U.S. Department of Health and Human Services, which provides migrant refugee shelter services. The company recorded nearly $208 million in revenue from HHS in the first six months of 2019, more than the entire year of 2018.

Comprehensive Health Services Inc. received a contract from the Department of Health and Human Services to run a notorious shelter migrant for children in Homestead, Fla., the largest such facility in the country. This migrant shelter was subject to extensive criticism, and visits from members of congress and presidential candidates after reports of long confinements and strict, impersonal conditions. “There weren’t children playing. There weren’t children laughing the way children usually do when they’re moving from one place to another. These were children who were being marched like little soldiers, like little prisoners, from one place to another,” said Sen. Elizabeth Warren (D., Mass.).

A spokeswoman for the company’s parent, Reston, Va.-based military contractor Caliburn International told the Hill that Homestead shelter is not “‘prison-like,’ “We operate temporary emergency shelters, not private prisons or detention centers,” she said in a statement. “Those who suggest otherwise are intentionally creating a false and deceptive description to mislead the public and score political points.”

According to the Miami Herald, all children have been removed from the Homestead detention center, but it may start accepting children again. Caliburn earlier this year brought in former Homeland Security Secretary John Kelly as a board member, sparking outrage from Congress.  Caliburn International says it provides “consulting, engineering, medical, and environmental services” to defense, healthcare, international diplomacy and homeland security clients” Caliburn, which combined several government contracting firms with backing from Virginia private equity firm DC Capital Partners, where Kelly previously was on the board, withdrew its initial public offering amid the detention controversy and questions about bribery allegations in Iraq involving another Caliburn subsidiary.

MVM INC.: This private security contractor, based in Ashburn, Va., in 2018 received nearly $145 million from the agencies in Public Citizen’s analysis, primarily the ICE and the U.S. Marshals Service. That tally was up from more than $64 million the prior year and $15 million in 2013, driven by a surge in ICE contracting.  MVM was founded in the 1970s by a former U.S. secret service agent, Dario Marquez,. The company, a major overseas contractor for U.S. intelligence agencies, is now led by Dario Marquez’s son, Kevin Marquez. A company official told a D.C.-area public radio station that the contracting firm transports minors but does not operate shelters and “has tremendous empathy for the families and children arriving at the U.S. border.” Yet reporting by Reveal from the Center for Investigative Reporting disclosed, and the company acknowledged, that dozens of immigrant children were held overnight in a vacant office building in Phoenix. A company spokesman called the incident “a regrettable exception.” Dario Marquez and his wife Wendy have been significant donors to Virginia Democrats, prompting calls by activists for elected officials to no longer accept political donations from the Marquez family. Dario Marquez told a Virginia public radio station that his political views “are closely aligned with the same groups that are now opposing us.” Quoted in the same story, a MVM spokeswoman said that “while in MVM’s care, every individual is treated with compassion and respect by bilingual escorts who provide them with clean clothes, new hygiene products, bottled water, and commercially prepared meals and snacks.”

PAE AVIATION AND TECHNICAL SERVICES: Based in Virginia., PAE is a major contractor for the U.S. intelligence, diplomatic and homeland security apparatus. Its contract revenue from the agencies studied by Public has been relatively stable in recent years and mainly consists of contracts with U.S. Customs and Border Protection. Contract revenue from those agencies in 2018 fell to nearly $111 million last year, down from $124 million the prior year but up from $106 million in 2013. The company is owned by private equity firm Platinum Equity. The company calls itself a “critical part of U.S. border security” that provides “provide administrative services to process the work of the U.S. Department of Homeland Security, Department of State and Department of Justice.” The company touts its work validating immigrants’ criteria for federal benefits and says that employees “perform biometric data collection, identify verification and criminal checks” against a federal database. The company says on its website that “ensuring the proper processing of applications for immigration is a complex, demanding effort requiring a team adept at managing multiple streams of information and security protocols.” The company also provides aircraft maintenance for U.S. Customs and Border Protection.

Several other recipients of the largest contracts from federal prison and detention agencies appear to have little connection to Trump’s immigration crackdown. Those include: Tennessee.-based Metropolitan Security Services which does business as Walden Security, which provides security services to government agencies, including at federal courts, Pasadena, Calif.-based Inter-Con Security Systems Inc., another security contractor, and Birmingham, Ala.-based Naphcare Inc., a health care contractor for the Federal Bureau of Prisons.

Another contractor with significant government connections is, CSI Aviation Services Inc., an Albuquerque N.M., air charter company has been a major federal air charter contractor transporting deported migrants for ICE and the U.S. Marshals Service. The company is led by Allen Weh, a former Republican candidate for the U.S. Senate and former chairman of the New Mexico Republican Party.  Weh and his wife are major Trump and Republican party donors.

CSI hired a lobbying firm run by David Urban, a former Trump campaign adviser. CSI Aviation spent $80,000 with Urban’s firm, American Continental Group, in 2018 to lobby on issues related to excise tax policy and the Federal Aviation Administration, according to lobbying disclosures. Weh once told a business podcast that “We move people out of the country, and often we will move people in the country, and, frequently, they will be in handcuffs,” according to a recording aired by NPR News. ICE deports about 100,000 people per year via air charter – an operation known as “ICE Air.”

ICE has relied on air charter companies to deport immigrants back to Central America. Since 2013, the company has received nearly $590 million in contract revenue from the five agencies in Public Citizen’s study. In October 2017, however competitor, Classic Air Charters, won a $646 million ICE deportation flight contact, and CSI unsuccessfully tried to protest that decision.

 

Backlash and Pressure

Major U.S. companies have been under mounting pressure to stop doing business with the private detention and corrections industry. Wells Fargo & Co. said in an annual report in January that its lending to the industry “has significantly decreased and is expected to continue to decline, and we are not actively marketing to that sector.” After a two-year campaign from activist groups, that included protests at CEO Jamie Dimon’s home, JPMorgan Chase & Co said in March 2019 that it would no longer provide banking services to the private prison industry.

Bank of America announced in June 2019 that it would no longer provide credit to the detention industry, one day after company executives toured a privately run detention center in Homestead Fla., according to the Miami Herald, which dug up public documents indicating the bank had provided a $380 million loan and a $75 million line of credit for the detention center, run by Comprehensive Health Services. Wall Street analysts have also stopped producing research on GEO Group and CoreCivic, both of which are publicly traded firms. In New York, State Senator Brian Benjamin has advanced legislation barring banks chartered in New York from entering into relationships with private prison firms. “The goal is to starve private prisons of capital,” Benjamin said in a statement. Weeks later, Barclays and PNC Bank said they would both halt future business with the private prison industry.

With criticism and pressure on the industry mounting, Sen. John Cornyn (R-Texas), proclaimed outrage about the boycotts, tweeting that he “may have to change banks.” Cornyn’s 2020 campaign has received more than $36,000 in contributions from GEO Group’s employees and the company political action committee during the current campaign cycle.

In a June 30 conference call with investors, GEO Group CEO George Zoley acknowledged the impact of activists’ pressure. “Recent media stories regarding overcrowded border patrol facilities and financial institutions discontinuing future financial support for private operators of ICE Processing Centers have created volatility in our equity and debt markets. These headlines have unfortunately been driven by a false narrative and deliberate mischaracterization of our long-standing role as a quality service provider to ICE,” he said. One analyst, however, cast doubt on whether the industry will be hurt in the long run, saying that eliminating private prisons is a “worst case scenario that people seem to be pricing into the stocks, and I just don’t think that’s focused on the reality of the situation.”

Nevertheless, pressure on the industry continues. The Denver City Council voted in August 2019 not to renew $10 million in contracts with GEO Group and CoreCivic, which have run halfway houses in the city. California lawmakers have voted to phase out the state’s four private prisons, which hold 2,400 state inmates. Numerous other companies, from Microsoft to Amazon to Deloitte to Prudential Financial to public relations giant Edelman and online furniture company Wayfair have faced public pressure over business relationships with the prison industry and government detention agencies. Amazon employees and activist groups have targeted the company because it provides internet technology to Palantir Technologies, which been under fire for providing software to power Trump’s border enforcement policies. Palantir, a major federal technology contractor, was founded by billionaire Peter Thiel, a member of Trump’s transition team and a Silicon Valley billionaire.

[1]As used in this report, Health and Human Services refers to contracting by the HHS Assistant Secretary for Administration, which handles numerous contracting functions for the department, including some likely unrelated to immigrant detention.

Photo: U.S. Customs and Border Protection, via Flickr