Positioning themselves for the future, GEO and CoreCivic recently agreed to long-term contracts with the Trump administration for several immigration detention centers in Texas and California. Those agreements would be difficult to unwind if Biden wins.
They are also spending heavily to help Republicans win.
George Zoley, GEO Group's founder and CEO, has given US$514,800 to Republicans and just US$10,000 to Democrats during the current election cycle, campaign finance records show. According to the nonprofit Center for Responsive Politics, people and groups linked to GEO have given more than US$1.7 million, mostly to Republicans.
CoreCivic CEO Damon Hininger has donated US$26,300 during this election to Republicans. People and groups linked to CoreCivic have given US$228,000 so far, primarily to the GOP.
"Any questions or inferences about whether or not CoreCivic prefers the Republican Party, because it is better for our business, are misleading and portrays our company in a false light," said Ryan Gustin, a spokesman for the company.
GEO Group spokesman Pablo Paez said any political contributions "should not be construed as an endorsement of all policies or positions adopted by any individual candidate".
"The services we provide today are in no way different from the high-quality, professional services we provided for eight years under President Obama's administration," Paez said.
Speaking to investors last week, Zoley predicted that GEO's stock - which has plummeted this year after surging at the start of Trump's term - would bounce back following the November election. GEO Group says Zoley was not predicting a specific winner, but rather that the election would give the company and investors much-valued certainty as to the government's future direction.
CoreCivic and GEO told shareholders last week that they have renewed 10-year contracts for three detention centres in Texas, one in Houston and the others outside Austin and San Antonio. Both companies previously reached agreements in December to keep open detention centers in California and for GEO Group to open three new immigration jails.
In both states, ICE and the companies side-stepped local opposition, including a California law banning new private prisons. The California agreements were reached days before the effective date of the law, which GEO and the Trump administration are now challenging in court.
In discussing CoreCivic's contracts, Hininger told investors that ICE and the US Marshals Service were preparing for the future "with not only the pandemic but also going into 2021 and maybe some outcomes in Congress and the White House".
"So they're preparing, and with that, working with us to prepare," he said.
ICE did not respond to requests for comment.
Most of the US government's 200 immigration detention centres are run by private contractors holding asylum seekers and other immigrants accused of administrative violations or awaiting deportation. According to the American Civil Liberties Union and Human Rights Watch, private prison companies operate about 80 per cent of beds in the immigration system. GEO Group and CoreCivic are the two biggest contractors.
The private immigration system has grown under presidents of both parties over the past four decades. But as Democrats have largely moved away from supporting private prisons, the industry has aligned itself more with Republicans.
GEO Group officials gave six-figure donations to Trump's election campaign and inaugural committee, have spent millions on lobbying the administration, and held one company retreat at the Trump resort in Doral, Florida.
CoreCivic and GEO stocks surged around Trump's inauguration based on expectations that his administration would ramp up immigrant detention - which it did. ICE was detaining a record 50,000 immigrants for much of last year. Trump also rescinded an Obama-era plan to phase out the use of private prisons.
But the stocks of both companies have lost two-thirds of their value since 2017, Trump's first year in office. The companies have been accused of mistreating detainees and employees - particularly during the coronavirus pandemic - and relying on low-paid or unpaid detainee labour to reduce costs, allegations they have denied.
A divestment campaign led by activists pushed six major banks last year to stop lending to the companies. And after hitting record highs, ICE's detainee population has fallen to just over 20,000 now because the Trump administration is quickly expelling most immigrants under an emergency coronavirus declaration.
Experts say the divestment campaign has restricted the private prison companies' ability to borrow and invest money. Both companies announced last week they would reduce the dividends paid to shareholders to pay down debt, one through a corporate restructuring.
But Joe Gomes, an analyst at Noble Capital Markets, said both companies were still critical to federal and state governments that don't have the capacity to run detention centres themselves. The companies' contracts with the federal government also generally pay minimum amounts even if they are used well below capacity.
"The actual history is different than what people's perceptions would be," Gomes said. "Under the Obama administration, both CoreCivic and GEO did fine
- AP
