Who Profits from Immigration Law Enforcement? The Immigration Industrial Complex

The immigration industrial complex refers to the public and private sector interests in the criminalization of undocumented migration, immigration law enforcement and the promotion of “anti-illegal” rhetoric. This concept is based on the idea that there exists a convergence of interests that drives the United States government to pass and then avidly enforce a set of immigration policies that have consistently failed to achieve their stated goals, and have violated the human rights of migrants and their families in the process. The profit potential is at the root of this human rights crisis, yet political power plays a significant role.
The media profits from sensationalizing illegal immigration. Politicians use undocumented migrants as scapegoats. What is perhaps more shocking is that a wide range of government contractors directly benefit from immigration enforcement tactics through the profit potential. One sector that has profited from increased immigration enforcement has been the business of privately run immigrant detention centers.
The detention of immigrants has increased dramatically in recent years. In FY 2008, ICE detained an average of 30,000 non-citizens each day, compared to about 5,000 in 1994, and 20,000 in 2001. The Corrections Corporation of America (CCA) is one of the main beneficiaries of the increase in immigrant detainees. CCA has a long history of profiting off of incarceration. They won their first government contract in 1984, to run an immigrant detention center in Houston. The company was inching along for the next decade, when it finally began to see substantial profits in the late 1990s. Its annual revenue shot up from $50 million in the early 1990s to $462 million in 1997. By 1998, its stock prices hit $44.00. CCA was doing so well that, at the end of the 20th century, the company began to build speculative prisons – “excess prison space for inmates who did not yet exist” (Wood 2007: 232). These prisons were built with the expectation that the prison population would continue to grow. When rates of incarceration leveled off at thebeginning of the 21st century, CCA faced serious problems. CCA’s stock values fell from $44 dollars in 1998 to a mere 18 cents in December 2000. By 2001, CCA had 8,500 empty beds, and was over a billion dollars in debt (Wood 2007). Their rival, Wackenhut, also saw its stock lose a third of its value between 1998 and 2001 (Berestein 2008).
At the end of the twentieth century, the two leading private prison companies – Corrections Corporation of America (CCA) and Wackenhut – faced serious financial troubles. They had re-invested their immense profits in new prisons that were now sitting empty. The increased need for prison beds for immigrant detainees, however, was to be their saving grace. On the verge of bankruptcy in 2000, CCA was awarded two contracts that allowed it to fill two empty prisons it had built speculatively – one in California City and another in Cibola County, New Mexico (Mattera, Khan, and Nathan 2003). It filled those prisons with immigrant detainees, and CCA was able to regain its financial footing.
Much of the success of CCA is due to its lobbying efforts and political connections, combined with increased rates of detention for immigrants. Its federal lobbying expenses increased from $410,000 to $3 million between 2000 and 2004, and these efforts appear to have paid off both in terms of CCA filling its beds and gaining contracts to build new prisons (Berestein 2008). In 2007, CCA spent almost $2.5 million to lobby on legislations and regulations related to the private prison industry (Associated Press 2008). At the beginning of 2000, CCA was awarded a contract to house 1,000 detainees at the CCA-owned San Diego Correctional Facility. CCA was to be paid $89.50 per day for each detainee it held. This was the beginning of a comeback for CCA. In July 2007, CCA announced that it was building a new 1,688 bed correctional facility in Adams County Mississippi, at a cost of $105 million. CCA built this facility without a management contract, as the company did not foresee any difficulties finding people to fill those prison beds. In fact, CCA had plans for 4,500 additional beds in 2007. With the constantly expanding detention of immigrants, CCA could fully expect to fill those beds.
As it turns out, in 2009, CCA was awarded a Federal Bureau of Prisons contract for the facility. By that time, they had expanded the capacity to 2,232 beds. In addition, CCA was constructing a 3,060-bed facility in Eloy, Arizona that would house immigrant detainees, and a 2,040-bed facility in Trousdale County, Tennesse. And, in 2008, CCA was awarded a contract from the Office of Federal Detention Trustees to build and manage a new correctional facility in Pahrump, Nevada that will house detainees as well as inmates. Business has been booming for CCA.
CCA has been able to obtain favorable government contracts in part because of its ties to current and former elected officials. The former head of the Federal Bureau of Prisons, J. Michael Quinlan, is one of CCA’s top executives. Both the CCA and the Geo Group have dominated the private prison sector because of their political influence. “Both benefit from extensive and intimate connections with state and local politics and the public corrections sector as well as from the usual interlocking directorships with other corporations in prison services, construction, the media and finance” (Wood 2007: 231).
The private prison industry is just one example of how private companies benefit from the increased surveillance and punishment of immigrants. Telephone companies such as MCI and Evercom have significant contracts inside immigrant detention centers, where they charge exponentially more for phone calls than they do at phones not in prisons (Fernandes 2007: 198). Overall, DHS awards billions of dollars of contracts each year. Many of the names are familiar: Lockheed Martin, Northrop Grumman, Boeing, IBM, Unisys and, not surprisingly, Halliburton. In January 2006, the DHS awarded a $385 million contingency contract to Halliburton subsidiary, KBR, to build facilities to temporarily house immigrant detainees (Scott 2006). In many ways, the increased surveillance of the foreign born in the United States has turned out handsome profits for well-connected corporations. This is in large part because “DHS was conceived and created in a way that made it possible for private industry to become the driving force behind much of its operations. DHS was born with a massive budget, and those who were present at its creation undoubtedly saw the huge revenue potential for big business.” (Fernandes 2007: 172-3).