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America's Outsourced Immigration Prisons a Booming Business

Hundreds of thousands of immigrants, both legal and illegal, are at the center of a huge prisoner outsourcing business.

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Reeves County functions as a kind of front man for the private prison industry. Being a government, it can issue revenue bonds that attract investors because the bond income (from a portion of the per-diem payments from the federal government) is not subject to income tax. Because the prison is a public facility, all capital and operating expenditures are also exempt from sales and property taxes.

The federal, state, and local governments lose all these tax revenues. But being tax-exempt keeps costs low, and makes the Reeves County Detention Center an attractive proposition for both the federal government and the private prison industry.

Although Reeves County initially ran the prison itself, it now contracts with GEO Group, the world's second largest prison corporation, to manage and operate the prison. For three years, the Corrections Corporation of America (CCA) also ran the prison for the county.

GEO Group has no investment in the prison, portions of which were destroyed by fire during the recent riots. It receives a large annual management fee—$4.75 million in 2008—from the county as well an annual administrative fee—$1.25 million in 2008—to cover the payroll costs of its 12-member management team, including the warden with his $125,000 salary.

The immigrant inmates, who are technically under federal government custody and held in a government-owned prison, see only the private face of America's prison industry. That's GEO Group, which runs the prison and hires and supervises the hundreds of prison guards who are paid by the county. The premier spot in the prison's parking lot is reserved for "GEO Executive," and the warden and all the other top management are GEO officials that answer to corporate headquarters in Boca Raton, Florida.

GEO Group, which represents the "20-year evolution of Wackenhut Corrections," says it is a "global leader in the delivery of diversified government outsourced services." Founded with the slogan, "Global Expertise in Outsourcing," GEO Group is a transnational corporation that specializes in providing security and prison "services" to governments around the world.

Working closely with GEO at the Reeves County Detention Center is Physicians Network Association (PNA), which is a private firm that says it specializes in "correctional healthcare." PNA is responsible for the healthcare at the Reeves immigrant prison and at nine other prisons run by GEO, including five others in Texas. PNA was contracted by the county before the GEO operations and management contract. In GEO's contract with the county, healthcare services are explicitly left as county responsibilities. But the county has subcontracted out medical services to PNA, which receives a $5.85 per-diem fee from the county.

Private-Public Complex

The BOP and other federal agencies could, of course, build and operate their own prisons. However, since the early 1980s the federal government has increasingly outsourced its inmates, especially immigrants.

The launching of the "drug war" that resulted in mass imprisonment of drug users and low-level street distributors set the stage for this new era of prisoner outsourcing. Faced with the rising number of convicted prisoners and the rise of illegal immigration, public prisons and detention centers became overcrowded. But there was little political will either at the federal or local level to use tax money to build new prisons.

Conveniently, the rise of the political right in the late 1970s and especially during the Reagan administration brought with it a new widely shared ideological conviction that favored government downsizing and privatization. In 1983, faced with increasing numbers of detained immigrants, the Immigration & Naturalization Service (INS), with the blessing of President Reagan, began outsourcing immigrants.

While INS took the first step toward outsourcing federal detainees to private prisons, the U.S. Marshals Service and the Bureau of Prisons eventually followed. At first, most of this outsourcing went directly to private firms. CCA and Wackenhut got their start in the prison business as outsourcers of detained immigrants for the INS in 1983-85.

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