Why Private Prison Stocks Are Soaring
Among the big winners buoyed by Donald Trump’s victory? The private prison industry. Shares of CoreCivic (formerly known as Corrections Corporation of America) and GEO Group, the two biggest players in the business, jumped 43 and 21 percent, respectively, the day after the election.
Over the last week, their fortunes have continued to rise as Trump’s recent public statements affirm his aggressive deportation plans. In an interview broadcast on CBS’ “60 Minutes” Sunday, Trump insisted he would remove two to three million immigrants upon taking office, incarcerating many in the process. “What we are going to do is get the people that are criminal and have criminal records,” Trump told correspondent Lesley Stahl. “We are getting them out of our country or we are going to incarcerate.”
Trump’s win comes at a crucial time for the prison business. Last October, Hillary Clinton announced she would stop accepting donations from the industry, later declaring, “We should end private prisons and private detention centers.” Then, in August, industry stocks plunged after the Department of Justice's August decision to phase out its use of private prisons. The day after the DOJ announcement, the private prison company GEO Group gave a $100,000 to Trump’s SuperPAC.
To understand what private prison companies expect to see under the Trump administration and how this could affect cities nationwide, CityLab spoke with Carl Takei, a staff attorney for the ACLU’s National Prison Project.
What signal does this send about Trump's plans for the private prison industry, as he begins to put his own people into the Department of Justice and Department of Homeland Security?
The anti-immigrant proposals President-elect Donald Trump has touted on the campaign trail promise to enrich private prison companies and their investors. He has called for a massive increase in roundups, detention, and deportation by ICE, as well as imposing a 5-year mandatory minimum federal prison sentence for people who reenter the country after being deported. If implemented, these proposals would likely increase the ICE detention population by hundreds of thousands of people and also require at least nine new federal prisons. This is true even if he does not deport all 11 million undocumented people at once. Deporting 2 to 3 million people in the first year of his presidency, as he proposed on “60 Minutes,” would require the construction of more than 100,000 new immigration detention beds.
The president-elect has two options for handling the millions of immigrants who would be detained under his proposed policies: He could turn federal prison construction into an enormous, WPA-style public employment program. Or he could put hundreds of thousands more people into the custody of private prison companies.
So either way he goes on making this happen, that means a lot of potential jobs for municipalities from construction to detention. How do you anticipate cities and towns will respond to this move?