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How Wall Street Profits from the Criminalization of Immigrants and Lobbies for More To Be Locked Up

Two Wall Street-backed powerhouses are making fat profits off of the private immigration detention system, and they're flexing their muscles in Congress.

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On May 1, 2006, while millions of people marched in favor of immigrant rights in 102 cities across the country, GEO and CCA were lobbying the federal government for more business. The marchers, despite their historic turnout and broad citizen base, could not block the growing wave of government support of GEO’s and CCA’s business plans.

The December 2006 raid, in which over a thousand men and women employed at Swift meat-packing plants in several states were detained, marked a change in the federal government’s enforcement of the 1995 immigration law. For the first time, many of those picked up were charged with crimes such as falsifying identity documents or identity theft that carry long prison sentences, rather than misuse of a social security number, a misdemeanor.

This single change in enforcement of existing law created a potential “market” of over 10 million new felons almost overnight, multiplying the lucrative incarceration market for the private prison industry and sending a shock wave through immigrant-related communities across the country. At the time of the Swift raid, USA Today quoted the Reverend Clarence Sandoval of St. Thomas Aquinas Catholic Church in Logan, Utah, as saying, “They are taking mothers and fathers and we’re really concerned about the children. I’m getting calls from mothers saying they don’t know where their husband was taken.”

Through this change in how federal law is enforced, CCA and GEO suddenly had a huge pool of captive clients, and began to rake in millions of dollars in public funds to house, transport, feed and control immigrants.

Predictably, costs to taxpayers skyrocketed. From 2006 to the present, the Immigration and Customs Enforcement Agency (ICE) budget for the identification, custody, transportation, detention and removal of immigrants has increased 51%. The U.S. Marshall budget for the custody and transportation of immigrants over the same period has increased 15%, and the Bureau of Prisons budget for detention of immigrants over the same period has gone up 9%. The billions of dollars in increased expenditures have provided the primary source for the billions in increased revenue for CCA and GEO.

In addition, currently 625 state, county and municipality law enforcement agencies are providing identification, custody, transportation and detention of immigrants through agreements with the U.S. Department of Homeland Security.

According to a federal Government Accounting Office study conducted last year the cost of this program to local taxpayers is unknown because 60% of state and local governments do not keep data on their personnel, equipment, supplies and other costs related to these agreements, and therefore are not reimbursed for those costs. Whatever the exact cost, local taxpayers will feel the pinch as this program is expected to expand to all 3,100 state, county and municipal detention jurisdictions in the nation by the end of 2011. Consequently CCA and GEO can expect to increase their revenues as states and counties increasingly subcontract incarceration responsibilities to these companies.

Last year Seeking Alpha, a website of actionable stock market opinion and analysis popular on Wall Street, reported that GEO’s income from prison health care services ending in March of 2009 topped $1.0 billion, a 5.8% profit. Seeking Alpha also stated that CCA’s profit for the same period in 19 states was over $1.6 billion, with a profit margin of 9.4%. In an article entitled “Where Delinquencies Make for Good Business” the  same publication noted, “Crime, unfortunately, is a growth industry and GEO Group has proven to be a successful player in the outsourcing trend for governments at many levels.” Pushing criminalization of immigrants to cast a wider net in society has been a key part of that “success.”

 
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