Scandal-Plagued Private Prison Companies Rake In Huge Profits From Privatization Of Immigration Detention Centers

As countries around the world attempt to crack down on immigration, they are no longer turning to government workers held accountable by taxpayers and government officials. Instead, they are outsourcing the operations and staffing of immigration detention centers to scandal-plagued private companies that are raking in exorbitant profits from government contracts even as they face terrible inspection reports, lawsuits, and claims of abuse and neglect from detainees.

The practice has become most prevalent in Australia, Great Britain, and the United States as political leaders attempt to prove to voters that they are tough on illegal immigration by detaining and deporting undocumented immigrants. In the United States, private companies control more than half of the nation’s detention beds, while the number of detainees has increased by more than 40 percent since 2005. In Australia and Britain, where privatization has advanced the fastest, companies like G4S continually bring in profitable government contracts even as their costs and human rights abuses have soared, the New York Times reports:

In Britain last fall, the company came under criminal investigation in the asphyxiation of an Angolan man who died as three G4S escorts held him down on a British Airways flight. Soon afterward, British immigration authorities announced that the company had lost its bid to renew a $48 million deportation escort contract because it was underbid by a competitor.

Even so, G4S has more than $1.1 billion in government contracts in Britain, a spokesman said, only about $126 million from the immigration authority. It quickly replaced the lost revenue with contracts to build, lease and run more police jails and prisons.

There was a public outcry when an Aboriginal man died in another G4S van in similar circumstances the next year. A coroner ruled in 2009 that G4S, the drivers and the government shared the blame. The company was later awarded a $70 million, five-year prisoner transport contract in another state, Victoria, without competition.

Serco, another prominent private prison company, reported a 35 percent profit increase in 2010 and a 13 percent rise in the spring of 2011, and the cost of their contracts often ends up higher than expected. The cost of a five-year, $370 million contract awarded by the British government in 2009, for instance, has already skyrocketed to $756 million.


This type of profiteering and corruption, unfortunately, has been a predictable side effect of efforts to privatize domestic American prisons. Private prison companies have spent millions lobbying for longer, harsher prison sentences to maximize their own profitability, and lawmakers at the front of the privatization push — most notably Govs. Rick Perry (R-TX) and Rick Scott (R-FL) — led the fight after receiving thousands of dollars in campaign contributions from the industry. And as their lobbying efforts have grown, so too has the number of prisoners incarcerated at private facilities. And just last week, a former Pennsylvania judge was sentenced to 210 months in prison for his role in a “cash for kids” scandal, in which he ordered a state-run facility closed and directed juvenile offenders to private facilities.

While private prisons continue to be a good investment for the companies that run them, evidence is mounting that they are a terrible investment for taxpayers and governments. A recent study of Arizona’s private prisons, for instance, revealed that even though they steer clear of the state’s costliest inmates, they cost the government more than state-run facilities.