The Financial Collapse Of The Private Immigrant Detention Industry

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Privately run correctional facilities are losing money as immigrant apprehensions have slowed down and the federal government has begun releasing some immigrants from detention facilities.

At least nine out of 21 Texas counties that “created agencies to issue about $1.3 billion in municipal bonds to build privately run correctional facilities largely for migrants have defaulted on their debt,” Bloomberg Business News recently reported. An additional dozen or so facilities in Florida, Louisiana, and Arizona have also defaulted on their bonds.

Among detention centers built using bonds near the southern U.S. border, La Salle County Regional Detention Facility, which holds 566 beds, is nearly empty. Another one on the Rio Grande River will close next month because it doesn’t have enough inmates. And in February, a riot forced the closure of a 3,000-bed “big money maker” facility in Willacy County, Texas, which put the already-poor town on hook for $2.7 million.

One way that local governments make money from private jails is by taking in immigrants for the federal immigration agency U.S. Citizenship and Immigration Service or the U.S. Marshals Service, which typically pays more for inmates than state and local governments.

An April 2015 Immigration Justice report found that the federal government pays private prison companies about $160 per day per detainee, for a total of $2 billion a year. Local governments receive a portion of those funds.

For small communities, immigrant detention seemed like it could pay for itself. But Joel Rodriguez Jr., judge of La Salle County, Texas, lamented to Bloomberg News, “My fear’s always been that this would happen. When this facility was sold to the county, they sold it as a money-making facility that was going to be a great economic boon.”

“A private prison company promises this very attractive deal and then towns take on financial risks they don’t fully understand,” Carl Takei explained to Fusion, when another town defaulted on its bond when its detention center went up in literal flames after a riot broke out. “[They] only figure out what they’ve signed when something goes very wrong and the town is left holding the bag.”

Construction on private prison-operated facilities has grown nationwide, especially in Texas. At 39 percent, Texas has the highest concentration of privately run detention beds in the country, according to the immigrant advocacy group Grassroots Leadership.

The two largest private prison companies, Corrections Corporation of America and the GEO Group, operate 72 percent of the private immigrant detention industry. Both companies reported surging profits in their quarterly earnings. That’s in part because many contracts include occupancy requirements mandating that state or local governments must keep facilities anywhere between 80 and 100 percent full. On top of that, Congress has a so-called bed mandate, requiring that the Department of Homeland Security make available at least 34,000 beds every night for immigrant detention. That figure has been adjusted to around 31,000 for the 2015 fiscal year.

However, many of those facilities are now struggling because the number of undocumented immigrant apprehensions has dropped.

Coupled with an improving economy in Mexico, immigrant apprehensions dipped so low that in 2010, net migration into the United States was at zero. The Obama administration has stated that it would go after the most serious criminal immigrants, leaving alone individuals without criminal records. And most recently, a federal judge rebuked the Obama administration for violating a 1997 court settlement, stating that it had to release Central American migrant mothers and children who qualify for asylum in this country.

The nine Texas counties are just the latest in a slew of towns that have defaulted on their privately run correctional facilities. Some facilities aren’t even along the U.S.-Mexico border.

In 2007, local government officials backed $55 million in bonds to double a jail’s capacity in Irwin County, Georgia. Additional prisoners never materialized, rendering the county unable to pay its bills, Prison Legal News reported last year. Littlefield, Texas borrowed $10 million to build the Bill Clayton Detention Center in 2000. After a budget crunch, GEO Group pulled its contract, leaving the town to pay $65,000 a month to pay the note on the prison, NPR News reported in 2011. And the city of Central Falls, Rhode Island filed for bankruptcy in 2011 when the Immigration and Customs Enforcement agency pulled out detainees from a facility shortly after the death of a Chinese national.

Still, private prisons haven’t faded away altogether. Some immigrants who have served out decades-old criminal convictions are finding themselves picked up by local law enforcement officials and placed in these privately operated detention facilities. An Immigration Policy Council report found last year that ICE mostly deported immigrants who posed “a threat to no one.” And private prison companies are still profiting through the use of GPS ankle bracelets, an alternative to detention, that costs the government significantly less money, but still helps bankroll private prison companies.