Even As DOJ Phases Them Out, Business Is Booming for Private Prisons Thanks to Immigrant Detention

Even As DOJ Phases Them Out, Business Is Booming for Private Prisons Thanks to Immigrant Detention
The Department of Justice announced that it no longer wants to do business with for-profit prison corporations that jail federal prisoners.

DOJ Deputy Attorney General Sally Q. Yates sent a memo Thursday morning to the Bureau of Prisons directing the agency to decline renewal of private prison contracts when they expire or to renew the contract in a way that substantially reduces the scope of services provided by private prison corporations like Corrections Corporation of America and the GEO Group, which are also in the business of jailing undocumented women and children seeking asylum in the United States. 

When the news broke, stock for the Corrections Corporation of America and the GEO Group plummeted by around 50 percent, CNBC reported. However, both Corrections Corporation of America and GEO Group incarcerate more than just federal inmates. The Corrections Corporation of America runs the South Texas Family Residential Center in Dilley and the GEO Group runs the Karnes County Residential Facility. Both of those jails house undocumented immigrants and those companies have contracts with Immigration and Customs Enforcement, which is not under the authority of the DOJ. The Department of Homeland Security is in charge of ICE.

And it doesn't really look like DHS plans on following the DOJ's example. Earlier this week, ICE bypassed the traditional bidding process for contracts and awarded the Corrections Corporation of America a four-year, billion-dollar contract to detain women and children seeking asylum in the United States. ICE will pay the for-profit prison operator a flat $20 million a month, regardless of if the facility is full. Additionally, Corrections Corporation of America reported nearly half a billion dollars in revenue from its second quarter. The GEO Group earned even more than Corrections Corporation of America did during the same timeframe, bringing in more than $500 million in revenue.

The GEO Group hasn't responded to the DOJ's decision, but Corrections Corporation of America has and the company doesn't seem worried at all because DOJ contracts only make up 7 percent of its business. 

Besides, as both companies said during recent conference calls to investors to discuss second quarter revenues, they are making plenty of cash off detaining women and children seeking asylum. Since last November, GEO Group has made $57 million from operating the Karnes facility. And Corrections Corporation of America, as previously mentioned, just secured that $20-million-a-month contract with ICE. 


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