The Role of State and Local Contracts in Supporting Private Prisons

The private prison industry in the United States, particularly companies like CoreCivic and GEO Group, has experienced significant profit growth, largely attributed to the immigration detention policies of the Trump administration. During an August 7 earnings call, CoreCivic CEO Damon Hininger noted the company is "perfectly aligned with the demands of this moment," as federal detention populations have surged. CoreCivic reported an 18 percent revenue increase year-over-year for the third quarter, while GEO Group saw a 13 percent rise in earnings during the same period. This growth is not solely dependent on federal contracts; both companies also derive substantial revenue from state and local governments.

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The privatized prison system in the U.S. has been developed with support from both political parties, creating an infrastructure that facilitates the current immigration crackdown. A review by the Center for Media and Democracy (CMD) indicates that only 62 percent of GEO Group's 2024 revenue is sourced from federal agencies, with CoreCivic earning just 51 percent from similar sources. This reliance on state and local contracts has raised concerns among prison reform advocates, who argue that profit motives often overshadow rehabilitation efforts.

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Critics, including Bianca Tylek of Worth Rises, assert that the private prison industry is complicit in the rapid arrests and deportations of undocumented individuals, as well as the harassment of communities of color. Recent lawsuits against CoreCivic highlight severe conditions at its facilities, including allegations of insect infestations, sewage problems, and denial of basic needs like food and medical care. In California, despite a 2019 law banning private prisons, the state approved a new $70 million contract with CoreCivic for re-entry services, illustrating the ongoing complexities of privatization.

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CoreCivic and GEO Group are the primary players in this narrative, with both companies actively engaging in contracts with various state governments. Advocacy groups like Worth Rises and Detention Watch Network are vocal critics of the private prison system, emphasizing the need for states to sever ties with these companies. Setareh Ghandehari from Detention Watch Network noted that the expansion of the private prison system has been facilitated by both major political parties.

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In response to the ongoing issues, Tylek stated, “There’s no doubt that this industry is facilitating and enabling the rapid arrests, detention, and deportation of undocumented people.” Furthermore, the SEC filings of both companies reveal that many contracts with state and local governments include quick termination clauses, allowing for potential changes in partnerships if state leadership chooses to act against the private prison industry.

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The current landscape suggests that state and local governments have the power to impact the profitability of private prison companies significantly. As activists continue to push for reform, the ability to terminate contracts swiftly could lead to a reevaluation of the role of private prisons in the U.S. criminal justice system. The ongoing scrutiny and legal challenges faced by these companies may further influence future policies and contracts.

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