While the “Trump Bump”—the notable growth of the stock market since the election—has impacted numerous sectors of the economy, one industry stands out as enjoying some of the most shocking gains: private prisons. Within 24 hours of the election, the stock price of GEO Group and CoreCivic, who make up 85% of the U.S. private prison market, rose 21% and 43% respectively. Since then stock price of GEO Group has increased nearly 100%, and CoreCivic has increased 150%. This is a significant turnaround from the nearly 40% plunge these stock prices took after the Obama Administration announced in August that the federal government would be phasing out its contracts with private prison companies. The Trump Administration has, of course, reversed this order, but that is not the only reason behind the private prison industry’s recent boom. Donald Trump’s plans for mass incarceration and deportation of undocumented immigrants would not only sustain current facilities but would beget the need for expanded capacity. As one market analyst put it, Donald Trump’s policies present “material external growth opportunity not seen in years.” All of which makes the $225,000 investment these companies made in Donald Trump’s presidential campaign and the $500,000 donation to his inauguration well worthwhile. In fact,these companies stand to make an additional 1.1 billion dollars in revenue per year, solely from President Trump’s current plan to increase detention of undocumented immigrants.[1]

Unlike President Trump, who, in an MSNBC town hall last March, described private prisons as “work[ing] a lot better,” the US Inspector General reported in August that private prisons have “more safety and security incidents per capita than comparable … institutions” run by the US Bureau of Prisons. This is not surprising considering these for-profit corporations have a clear ultimate goal: make a profit. The correctional officers who run these prisons are paid minimum wage, have little training and usually have no prior experience. The institutions offer fewer rehabilitation services than government run facilities, decreasing the likelihood that prisoners will be able to integrate successfully back into society upon release. Additionally, these companies often fail to provide adequate medical treatment. Their facilitates miss diagnoses, utilize medical professionals who are not sufficiently trained to legally fill roles they are placed in, and refuse to fulfill inmates’ repeated requests for care. While this may not make for safe or even secure prisons, it does create a substantial profit opportunity for these companies.

Potentially more frightening than all of this, however, are the claims being made in an ongoing lawsuit against GEO Group. In the suit, initially filed in 2014, nine named plaintiffs allege the company violated federal anti-slavery laws by threatening detained immigrants with solitary confinement  in order to force them to work for a dollar a day at one of the company’s Colorado facilities. The suit is being brought under a portion of the Trafficking Victims Protection Act that makes it illegal to obtain service by “threat of physical restraint.”[2] The complaint also alleges that GEO Group selected six detainees at random everyday to provide a cleaning service for no compensation whatsoever. As the plaintiffs’ complaint points out, GEO Group’s policy of forcing detainees to work for $1 a day to clean and maintain their facility has significantly decreased their operational costs.[3] At the end of February, the suit received class-action status, which could expand the suit to include over 60,000 individuals who have been detained at the GEO Group facility in Colorado.

In stark contrast to the grim nature of these accusations, the CEO of GEO Group was quite cheery when speaking to investors at the end of February, stating, “[w]e’re very pleased with our fourth quarter and year-end results and our outlook for 2017.”[4]




[1] This number has been calculated by taking the approximate cost of housing an immigrant per day ($118.88 in 2013) times the difference between the current number of individuals detained per day (approximately 40000) and the planned rate of detention (80,000) times the percent of immigrants typically held in private facilities (approximately 6265%).

[2] Menocal v. GEO Group, Inc., 113 F. Supp. 3d 1125, 1128 (D. Co. 2015); 18 U.S.C. § 1584 (2008).

[3] Menocal v. GEO Group, Inc., 113 F. Supp. 3d 1125, 1128 (D. Co. 2015).

[4] The full transcript can be accessed at seekingalpha.com.