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Private Prison Industry Looks on Gleefully As Trump’s Mass Deportation Strategy Tears Apart Families & Hurts Economy

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Donald Trump’s mass deportation of immigrants are tearing apart families and damaging the economy — but one group that’s benefiting is the private prison industry (and their investors).

At the Daily Beast, Betsy Woodruff covered a shareholder call this week conducted by the GEO group, a private prison company that is being sued for human trafficking and whose stock price has tripled since the election of Donald Trump. GEO is the largest provider of detention services to ICE, CBP, and the Marshals Service, and expects to handle at least a quarter of Trump’s planned immigrant detentions. Executives on the shareholder call were nearly gleeful that Trump’s deportation policies will mean more arrests, more detention, and more demand for their services — coming together to create what CEO George Zoley called “culturally responsive environments” for GEO.

GEO’s plans for profit

As Woodruff wrote, GEO is carefully monitoring announcements and executive actions from Trump and his Administration, translating them into a need for its services, and planning on profiting bigly. GEO is also noting an increase in immigration enforcement in the interior of the US, far away from border regions:

Zoley said a new ICE contract for a 1,000-bed detention center in Conroe, Texas, will cost $117 million to build and will generate $44 million in revenue per year once it’s opened in late 2018. The CEO said the company expects “increased demand for detention capacity at the federal level,” and that it bought the Maverick County Detention Center in Texas for $15 million to meet that demand.

On top of that, the CEO noted the company has enough space to detain 7000 more people than it is right now, which could mean another $60 million per year in revenue.

GEO Group investors who asked questions on the call were closely following the impact of Trump’s changes on the business, peppering the executives with questions about how policy changes could make the company more lucrative. Michael Kodesch, an analyst with Cannacord Genuity, asked what the company saw as “the new opportunity set” given Congressional budgeting.

“What we see is ICE beginning to implement their interior enforcement strategy,” said David Venturella, the company’s senior vice president of business development. “For the past 8 to 10 years, the focus has been on the border. I think everybody has seen the number of apprehensions and crossings going down, so Phase 2 of that strategy is to focus in the interior.

“We’ll start to see the benefits of that through increased apprehensions and increased detention in the interior part of the United States, not necessarily along the southern border,” he added….

“I think any enforcement by federal law enforcement agencies could generate more prosecution convictions and then eventual detention in the federal system,” Venturella said. “I think the attorney general’s recent announcement regarding the prosecution of criminal aliens would apply to all the federal agencies, so we will monitor the impact of that new policy directive. But certainly, any increase in law enforcement activity could generate additional apprehensions and then eventually detentions.”

GEO and its relationship to Trump

Woodruff’s piece also describes how GEO is part of Trump’s favor-based economy, its financial ties to Trump, and its ugly human rights record when it comes to those it detains:

The company, GEO Group, contracts with governments around the world to incarcerate 100,000 people, and its top executives expressed optimism on a public shareholder call on Tuesday about how Trump’s immigration crackdown will impact their business. It’s indicative of a cultural overhaul taking place under the Trump administration—where well-connected multi-national corporations are poised to see significant financial gains because of tougher immigration law enforcement.

GEO Group has close ties to Trump’s political circles. The company gave $250,000 to Trump’s inauguration, according to USA Today. A subsidiary of the company gave $225,000 to a super PAC helmed by the Mercer family. And Rebekah Mercer, hedge fund manager Robert Mercer’s daughter, is widely reported to be one of the most influential donors in Trump’s circle. And last October, the company retained two former aides to now-Attorney General Jeff Sessions to lobby the federal government on prison contracts, as Politico reported.

Beyond being politically connected, GEO Group is controversial. Immigrants’ rights groups have long criticized it and its biggest American counterpart, CoreCivic, for the way they treat detainees. And in February, a federal judge ruled that former detainees at one GEO immigrant detention center could direct a class-action lawsuit at the company for forcing them to work for little or no wages—which they allege violates the Trafficking Victims Protection Act. GEO strongly denies those allegations.

Sessions and the private prison industry

It should be noted that President Obama, in the final months of his Administration, had announced that he would stop signing new contracts with private prison companies — a decision that Jeff Sessions reversed. Since then, private prison stock prices have been at times directly tied to Sessions’ political fortunes. As the New York Times wrote recently:

Private prison stocks have been hurt by some political developments. They dropped for a few days after Mr. Sessions, who is viewed as a bullish influence on the stocks, came under pressure for failing to disclose to the Senate that he had met twice with the Russian ambassador, amid a furor over possible Russian meddling in the presidential election. But Mr. Trump has stoutly backed Mr. Sessions, and “the stocks responded positively,” [Michael Kodesch, a financial analyst] said.