Private Prisons and Mass Deportations: An Unconventional Profit Source
Upon Trump's projected victory in the 2024 presidential election, shares for Geo Group and CoreCivic, two leading operators of U.S. prison and immigration detention facilities, soared 74% and 55% respectively. Post-election, during CoreCivic's investors' conference call, President and COO, Damon Hininger, praised the election results, stating that, "the value proposition of the private sector for both our state and federal partners is going to be strong today and even stronger as we go into the next couple of years."
Twenty years prior, CoreCivic (then known as Corrections Corporation of America) celebrated the Intelligence Reform Bill's passage in 2004, which authorized the Department of Homeland Security (DHS) to hire additional border patrol agents and increase detention bed capacity by 40,000 within five years. In 2024 and following the election results, CoreCivic highlighted the election as a new opportunity for government contracts, especially with ICE, expressing readiness for potential capacity expansion.
For CoreCivic, ICE contracts accounted for 30% of its total revenue in 2022, amounting to $552.2 million. Furthermore, CoreCivic's 2023 Annual Report on Form 10-K showed total revenue of $1.9 billion, a 4% increase from the prior year. Private prison competitor GEO Group experienced similar success in 2022, with ICE contracts revenue increasing 40% to a record $1.05 billion and overall revenue reaching $2.41 billion.
If private prison companies, like CoreCivic and GEO Group, continue to monopolize government contracts for the development and management of ICE facilities, the potential addition of millions of detained undocumented migrants could significantly boost their profitability. According to the American Immigration Council's special report, meeting the goal of deporting 13.3 million undocumented migrants in a decade would require constructing 216 new detention facilities annually, equating to $728.3 billion in total cost. The potential financial benefits have led private prison companies to challenge efforts derailing ICE expansion, with GEO Group filing a federal lawsuit in 2024 against New Jersey's detention contract ban.
In light of the anticipated victory of Trump in the 2024 presidential election, discussions about diversity and inclusion in the leadership of these private prison companies should be prioritized, as the increased government contracts could exacerbate existing concerns about equity in their operations. Post-election, CoreCivic and other private prison companies, such as GEO Group, have emphasized their readiness for potential capacity expansion in response to new opportunities, primarily from ICE contracts.
