April 17, 2017
Few companies have seen as dramatic a reversal in fortune after President Trump’s election as the private prison contractor GEO Group. The company, which backed President Trump’s campaign, just won the contract for the first new immigration detention center to be built in the Trump era.
On August 18th, the Justice Department announced its plan to phase out the use of private prisons. The GEO Group, the country’s second largest private prison contractor, saw its stock price take a nosedive. It fell even further after September 26th, when Democratic presidential candidate Hillary Clinton made her opinions known on the private prison industry: “I’m glad that we’re ending private prisons in the federal system,” she said. “I want to see them ended in the state system. You shouldn’t have a profit motivation to fill prison cells with young Americans.” When markets closed the next day, the GEO Group’s stock had dropped 4 percent. The group was also facing lawsuits from jilted stockholders.
But the prison company made a political bet that already looks like it is paying off: Donald Trump’s candidacy.
The day after the Justice Department made its announcement, the GEO Group donated $100,000 to Rebuild America Now, a pro-Trump super PAC formed by influential Trump friend Tom Barrack. The company’s contribution total soared to $225,000 by December, at which point the Campaign Legal Center filed a complaint with the Federal Election Commission, alleging that the GEO Group was breaking the law by donating to a political committee as a federal contractor. The GEO Group’s PAC also donated $50,000 to Rebuild America Now on August 11th.
When President Trump celebrated his electoral victory on November 9th, Floridian Brian Ballard was in New York with him. Mr. Ballard, who was “Trump’s chief Florida fundraiser and shaped his campaign operation in his biggest must-win state,” also lobbied for the GEO Group in Florida, where the company is headquartered. When Mr. Ballard expanded his lobbying company to the federal level after President Trump’s victory, he brought along the GEO Group as a client.
When President Trump celebrated his inauguration, the GEO Group was there with another check. The private prison company donated $250,000 to the festivities. As the Trump administration settles in, it looks like the political investment is paying off.
On February 23, about a month after President Trump was sworn in, Attorney General Jeff Sessions rolled back the Obama administration’s decision to not renew the Justice Department’s private prison contracts. The reversal was a major win for the GEO Group, whose federal contracts with the Justice Department’s Bureau of Prisons account for 16 percent of its revenue.
The policy change followed moves by the Trump administration to increase the use of immigration detention centers. On January 25, President Trump signed an executive order calling for “resources to immediately construct, operate, control … facilities to detain aliens at or near the land border with Mexico.” Then, on February 21, two days before Attorney General Sessions changed the private prisons policy, the Department of Homeland Security released new instructions which, according to USA Today, require “all federal agents — including Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE) — to identify, capture and quickly deport undocumented immigrants.” The policy calls for increased allocation of resources “to the southern border for detention of aliens” in order to “expand detention capabilities and capacities,” another win for the GEO Group. As of 2014, ICE contracts accounted for 15.6 percent of the GEO Group’s revenue.
It looks like that percentage is about to increase. On April 13, the GEO Group announced it had won the Trump administration’s first federal contract for a new immigration detention center.
“We are very appreciative of the continued confidence placed in our company by U.S. Immigration and Customs Enforcement,” said the GEO Group’s chairman and CEO George C. Zoley in a triumphant press release. The ten-year contract is for a $110 million, 1,000-bed immigration detention center in Conroe, Texas. The GEO Group already has an immigration detention center in Conroe: the Joe Corley Detention Facility. The new center will be literally right next door and the two centers will even share a parking lot.
The contract to build an entirely new center is “unprecedented,” according to immigrant rights advocates. “Even the most recent expansion we’ve seen has been county jails and repurposing facilities that have been shuttered,” Silky Shaw, Co-Director of Detention Watch Network, a non-profit opposed to immigration detention, told the Associated Press. Advocates also question how an expansion of immigration detention centers will be funded, but President Trump has made clear it will be a priority for him. Though his proposed budget advocated for drastic cuts across the federal government, it included $1.5 billion in new spending “for expanded detention, transportation and removal of illegal immigrants.”
If the increased budget for detaining immigrants comes to fruition, the GEO Group can probably expect to win even more contracts. Not a bad return for $525,000 in super PAC and inauguration contributions.
Update: On April 17, the Campaign Legal Center, which had filed an FEC complaint over the GEO Group’s super PAC contributions, released a statement about the GEO Group’s contract asking, “Are taxpayer dollars being spent based on what is best for the public, or based on what is best for big donors?”