Corporate leaders at the Florida-based private prison operator GEO Group are “very pleased” with its third quarter earnings report released Tuesday. On a call with investors, GEO Group’s CEO George Zoley expressed optimism for profits largely driven by current contracts with the U.S. Immigration and Customs Enforcement (ICE) agency.
“We are very pleased with our strong quarterly results and outlook for the balance of the year,” Zoley said on an investor call, explaining that the third quarter “experienced improved occupancy rates across a number of our ICE facilities.”
Out of the 96,000 beds within its private corrections and detention facilities worldwide, Zoley said the company had 5,000 vacant beds at five “idle” facilities and 2,000 “underutilized” beds across a number of active facilities at of the end of the third quarter. He did not specify whether those vacant beds were located in immigrant detention centers or in prisons.
“We continue to actively market this available bed capacity and believe there are a number of opportunities to deploy these assets,” Zoley said, explaining those extra 7,000 available beds could generate between $50 million and $60 million in revenue if they’re “fully utilized.”
As reflected by earnings call slides, the ICE agency is GEO Group’s number one customer. GEO’s 2017 year-to-date data show that ICE uses 16 percent of GEO’s bed space and comprises 18.7 percent of GEO’s revenue. In comparison, the Federal Bureau of Prisons, the company’s number two customer, uses 14.3 percent of GEO’s bed space. (ICE also contracts with other for-profit private prison companies to detain immigrants.)
The company is currently in the process of developing a 1,000-bed ICE processing center in Houston, Texas under a 10-year contract, J. David Donahue, senior vice president and president of U.S. Corrections and Detention and International Operations, said on the same call. The facility — which is set to open in late 2018 and cost $125 million to build — is expected to pull in $44 million annually in revenue.
Growth for the company could remain strong in the future if GEO Group successfully win bids for a number of other ICE agency procurement opportunities. Those bids include managing a government-owned 700-bed processing center in Florence, Arizona; handling ICE transportation services in San Antonio, Texas; and developing facilities in Detroit, Chicago, St. Paul, and Salt Lake City to handle a total of 3,000 immigrant detainees.
Additionally, the company is waiting to hear about government bids for two separate, massive, and long-term procurement opportunities with the Bureau of Prisons to detain thousands of mostly male, criminal immigrants in California and another one “anywhere within the continental United States.” According to the federal contract opportunities, the California correctional facility aims to hold a maximum of 1,770 beds. The other low-security correctional facility (or facilities) — which calls for “up to 9,540 beds” for males — would be used to hold “criminal aliens with ordinarily 90 months or less remaining to serve on their sentences.”
In response to an investor question about whether GEO Group expects a forthcoming increase in ICE detainees in its facilities due to interior enforcement — a process that includes detaining immigrants living within the interior of the United States — Zoley pointed to ICE solicitations for additional detention facilities and said he expected “a progressive combination of interior enforcement with border crossings to steadily increase.”
For-profit immigration detention facilities have long held immigrants as they await court proceedings to determine whether they can stay in the country. Proponents say facilities are necessary to ensure immigrants don’t abscond from their court cases. Yet immigrant advocates harshly criticize that argument, pointing out that less-restrictive alternatives to detention exist, work just as well, and are significantly cheaper. Daily detention costs can be anywhere between $126 and $182 per person. Meanwhile, alternatives to detention, which includes regular check-ins and ankle bracelets, can cost between $0.70 and $17 per day.
Since President Donald Trump took office and issued harsh executive orders on immigration, private prison companies like the GEO Group have seen greater opportunities to expand detention facilities and increase revenue. Those executive orders virtually targeted all undocumented immigrants for deportation and deputized local and state law enforcement officials to act as federal immigration agents.
ICE’s rampant enforcement efforts have come at great cost to immigrant communities. At least 66 percent of the 11 million undocumented population have lived in the country for more than a decade, according to the Pew Research Center. Most of these individuals have settled down, started families, and contributed to their communities in varied ways. As recent enforcement operations have shown, ICE agents have detained a number of immigrants who are caretakers, breadwinners, and parents.
Given that GEO Group held its annual leadership conference at a Trump-owned golf resort earlier this month and a GEO subsidiary donated to Trump’s PAC during his campaign, it’s likely that the company will continue to maintain a close relationship with the administration. Still, as GEO’s presence grows, it’s unclear whether conditions at its facilities will improve. Twelve detainees have died in ICE custody this year, some by suicide, some through other means of painful death.