Skip navigation

PLN quoted re privately-run immigration detention centers

CNBC, June 22, 2018.

ICE overspends tax dollars on a detention policy many Americans find abhorrent


The Trump administration's recent immigration crackdown has clearly been a boon for the private companies that own, manage and supply federal detention centers.

But less clear is whether taxpayers are getting their money's worth to support a detention policy that many Americans find abhorrent.

A recent report from the Government Accountability Office found that the Immigration and Customs Enforcement division of the Department of Homeland Security had ended up spending more than originally budgeted to house detainees.

"ICE consistently underestimated the actual bed rate due to inaccuracies in [its] model," the report said. "ICE's methods for estimating detention costs do not [result in] a reliable cost estimate."

In response to the GAO report in April, ICE officials said they had recently improved the process of estimating costs for the 2020 budget cycle, and they promised to "work to more effectively" to document the agency's cost reviews. ICE also agreed to make several changes in its reporting and methodology recommended by the GAO.

When asked for comment, ICE in an emailed statement noted that the GAO acknowledged that "predicting detainee population is a complex challenge." ICE said it is "developing corrective action plans to document and implement review processes" and "will leverage GAO cost estimating best practices to ensure comprehensive, accurate and credible estimates."

The report from the GAO followed a separate report in February by the DHS Office of Inspector General that took issue with the procedure ICE officials used in 2014 to set up a 2,400-bed family detention center in Dilley, Texas. Instead of negotiating directly with CCA, the contractor operating the new facility, ICE modified an existing agreement to house detainees with Eloy, Arizona, which "created an unnecessary 'middleman'" that "added $438,000 in annual fees for the service," according to the DHS inspector general report.


In response, ICE officials agreed to make changes in their procedures in the future. But the agency was "unresponsive" and "non-concurred" with a second recommendation that it discontinue using the Eloy agreement to establish detention space in Dilley, more than 900 miles from Eloy, the OIG's report said.

Cost overruns for detention facilities have plagued the government for years. More than a decade ago, the Justice Department's inspector general found that state and local governments had been overpaid by tens of millions of dollars for the cost of housing federal detainees. The finding was based on a series of 31 audits dating back as far as 1995.

As a result, the private detention industry can expect further growth thanks to increased government spending, according to Denise Gilman, a professor at the University of Texas law school.

"Since the beginning, this administration has had harsh immigration policies," she said. "That pattern has only reaffirmed itself so that the private prison industry is making even greater profits as the Trump administration makes harsher calls."

After years of privatization, the detention industry is well-positioned to capture a large portion of the estimated $2.8 billion spent to detain immigrants in the current fiscal year.

That money is spent on a wide variety of goods and services provided by hundreds of individual vendors, from computer and security equipment to health care, staffing and transportation services.

The biggest contracts go to the for-profit prison companies that own and operate about two-thirds of ICE's detention capacity, including The Geo Group (GEO), CoreCivic, formerly known as Corrections Corp. of America (CCA). (The other third of the system is made up of a collection of county and city jails that have entered into agreements with ICE to house immigrant detainees.)

A spokeswoman for CoreCivic referred questions about the GAO report to ICE officials. The GEO Group did not respond to a request for comment.

On any given day, the system houses roughly 40,000 people. The administration has asked Congress to increase funding to expand that capacity to 52,000.

Most of those beds are in a relatively small number of large detentions centers located along the southern border. But there are dozens of smaller facilities spread throughout the country, most of them owned and operated by municipal government agencies that cooperate with ICE.

"These audits often concluded that the (federal government) had paid state and local governments significantly more than the actual and allowable costs for this space," the report said. 

The cost of detaining immigrants is likely to continue to increase. Despite the administration's apparent reversal this week of its practice of separating immigrant children from their parents, there's been no easing of President Donald Trump's "zero tolerance" policy toward those who enter the country without authorization.

With the number of detentions likely to expand under the Trump administration's policies, investors have also taken notice. Shares of CoreCivic and Geo Group rose this week on speculation that Trump's order apparently ending the policy of family separation could boost demand for detention services.

Those profits have risen as the Immigration and Customs Enforcement service, known as ICE, has increased both the overall budget and the number of beds set up to house immigrant detainees.

Proponents of privatization of detention services argue that the private companies can house detainees at a lower cost and do so more efficiently than the government. But as the number of beds in the system has increases, so has the overall cost of housing each detainee, according to the National Immigration Forum, a watchdog group.

Critics of the for-profit detention system contend that, with so little government-run detention capacity left, the expansion of private control has left the government in a weak bargaining position when it comes time to negotiate new contracts for detention facilities.

"We have create a system where the government is now beholden to its contractors instead of the other way around," said Alex Friedmann, associate director of the Human Rights Defense Center, which monitors the private prison industry.