Banks Pulling Out of For-Profit Immigration Detention Companies

Posted by Alexander Carl | Jul 18, 2019 | 0 Comments


by: Molly Kleinman, Summer Intern

Bolour Immigration Group

On Monday, July 8, SunTrust Bank, an American bank holding company, announced they would stop funding private prisons and immigrant detention facilities. It is only the latest in a series of corporations to do so, others include Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. In a statement put out by the Atlanta-based bank claims the "decision was made after extensive consideration of the views of [their] stakeholders on this deeply complex issue."Despite this, SunTrust's financial motivations should also be considered.

Since mid-June, shares in the two biggest for-profit prison companies, GEO Group Inc. and CoreCivic Inc., have fallen more than 13%. SunTrust, Bank of America, and JPMorgan are the only three banks "who were part of the revolving line of credit and term loan facilities for both major private prison companies."The overlap between the banks that have decided to stop funding private prisons and the ones who had the most money invested is unlikely to be coincidental. 

June 21, shortly after the revelation of the mistreatment of children in detention facilities at the southern border, both GEO Group and CoreCivic stocks took a massive hit, only five days later on June 26, Bank of America announced their withdrawal from the companies.JPMorgan ended their financial relationship before the June drop, but their early March decision was also preceded by a late February drop in stock value.

It is not just banks that have been facing backlash over their work with immigrant detention centers. Recently, online home goods retailer Wayfair was faced with employee walkouts over the sale of mattresses to BCFS Health and Human Services (formerly Baptist Child and Family Services). BCFS had placed a $200,000 order of "bedroom fixtures" for a facility intended to hold 1,600 unaccompanied minors. Despite the actions on the part of the banks, Wayfair intends to keep doing business with BCFS. In response to walkout, the company released a statement, that they "believe it is [their] business to sell to any customer who is acting within the laws of the countries within which [they] operate."

While it is silly to fault banks for valuing financial stability, it becomes a problem when the companies claim their motivations are humanitarian rather than economic. Although it is arguable that SunTrust and Bank of America pulled out of the relationships in response to the news coming from the border, rather than in response to the drop in the value of the for-profit prison companies, issues surrounding immigration and for-profit imprisonment have been around far longer than mid-June.


Even a perfunctory glance at the term "for-profit prison" should raise ethical concerns. Because the owners of these prisons benefit from more people being imprisoned, it follows that these prisons would make efforts to imprison more people for longer and at lower costs.

            Essentially, private prisons make two ways, first by charging the government a stipend in excess of minimum costs and second by going public.

To understand private prisons, it is essential to understand that they exist on the premise that they will save the government money by charging less than it would take to run a public (i.e. government-owned) prison. Private prisons operate by charging the government for a stipend usually, the stipend is based on how many prisoners the facility is holding (investopedia). In essence, the prison gets more money, the more prisoners it holds. If it takes the private prison $100 per prisoner per day to run, they will usually request a slight amount more, say $150. So long as it costs less than housing prisoners publicly, the government will usually agree to the number. In this example, the prison would make $50 per prisoner per day. Thus, more prisoners, more money and more days spent in prison, more money.

This becomes a problem in cases like the 2009 "Kids for Cash" scandal where it was revealed two Pennsylvania judges had been sentencing juveniles to time in for-profit juvenile detention centers in return for money."Proceedings on average took less than two minutes." claims one New York Times article, "Detention center workers were told in advance how many juveniles to expect at the end of each day-even before hearings to determine their innocence or guilt. Lawyers told families not to bother hiring them."This is a blatant miscarriage of justice, and a perfect example of why the justice system cannot be trusted to keep private prisons in check.

There is an additional flaw because the prisons can make even more money off the stipend if they cut costs further. If $100 can comfortably house one prisoner per day, and the prison instead allocates $80 per prisoner per day, the prison makes an extra $20 from the $150 stipend per day. An article from the Justice Policy Institute suggests this is already happening. "Private prison employees earn an average of over $5,000 less than their government-employed counterparts and receive 58 fewer hours of training. This leads to higher employee turnover and decreased security in the prisons."

Private prisons also have a motivation not to rehabilitate inmates. High recidivism rates again bring in more prisoners. If the true goal of prisons was to rehabilitate former criminals, prisons would work themselves out of business. As Investopedia put it, "If the goal is to earn money, then a high prison population is the end goal."

Despite claims, private prisons are unlikely to save the taxpayers money. In fact, they might cost them money, first by charging the government more that it would cost to run public prisons and second by refusing to accept prisoners with severe illnesses or a history of violence therefore cutting a private prison's medical expenses and increasing public prison medical expenses.

            The other way private prisons make money is by public trading of stocks. By increasing the amount of money keeping each prisoner is (say from $100 to $150 as in the examples above), the more money the company is worth and the greater the incentive to purchase stocks. With that money companies can build more prisons and the cycle continues, more prisoners more money, more money more prisoners.

            In addition to more buildings, the companies can also put their money towards lobbying. By contributing to the campaigns or otherwise investing in friendly politicians, these companies can ensure not only that they stay legal and operational, but also that laws are more strictly enforced to guarantee a "constant stream of inmates coming in to replace those that have served their sentences."

The first private prison was established in response to Ronald Reagan's War on Drugs.It is impossible, then, to extricate private prisons from the systemic racism that incarcerates black and brown people at disproportionate rates. The system is a vicious cycle. Many states will not allow convicted criminals, whether or not they have finished their prison sentence, to vote, thus the people most affected by the private prison system are unable to elect officials who stand up to private prisons and their political allies.


One of these political allies, to circle back to the issue of immigration detention facilities, is John Kelly, former White House Chief of Staff and current member of the board of directors for Caliburn International. According to Business Insider, while working for the Trump administration, "Kelly was central in the administration separating migrant children from their families, sending them to government-contracted shelters" including ones run by Comprehensive Health Services, a for-profit medical management services provider and subsidiary of Caliburn International.Although it is technically legal, it is suspect that the same person pushing for the detention of migrant children is now profiting financially from that move.

The ties between the Trump administration and for-profit prison groups run even deeper. In 2017, GEOGroup, the same for-profit prison company mentioned in the beginning of this article, moved their annual leadership conference from venues near its Boca Raton headquarters to a Miami golf resort owned by President Trump. Furthermore, according to the Washington Post, in 2016 "a company subsidiary gave $225,000 to a pro-Trump super PAC. GEO gave an additional $250,000 to the president's inaugural committee... The company secured the administration's first contract for an immigration detention center, a deal worth tens of millions a year. And its stock price has tripled since hitting a low [in 2016] when the Obama administration sought to phase out the use of private prisons."Although the White House claimed it had no knowledge of the GEO Group event, the only other time GEO held a conference at that resort in recent years was, "a shareholder meeting in 2007, about five years before Trump purchased the property."

According to the Center for Responsive Politics, GEO Group has been in the top five highest contributors to federal candidates, parties, and outside groups among for-profit prisons since 2004. Between 2004 and 2010, GEO Group's support for Republican candidates dropped steadily from 80% to 30%. In 2010, the first year GEO Group rose to be the year's top contributor, they spent more money on Democratic candidates than Republican ones. There are a few important things to note about the 2010 spending cycle. First, Democrats regained control of Congress in 2008, so the spike in contributions could be attributable simply to the fact that GEO Group had more candidates to fund. Second, based on the numbers given on the  Center for Responsive Politics website, 31.1% of contributions in 2010 remain unaccounted for.

In 2012, however, GEO Group's support of Republican candidates nearly doubled from 2010 and has been rising steadily since then.In 2016, then President Obama announced that the Justice Department would be phasing out their partnerships with private prisons.That year, GEO Group shifted their support further to Republicans, Democrats receiving only 12.5% of total contributions. By 2018, GEO Group's support leaned 90.7% Republican to 9.3% Democrat.In addition to Republicans retaking control of both houses of Congress in 2016, Bernie Sanders' influence could also account for this drop. His no-PAC pledge during the last presidential elections inspired other candidates, including Rep. Alexandria Ocasio-Cortez, to do the same thus leaving GEO Group with even fewer candidates to support.

GEO Group's PAC contributions reflect a similar story. In 2016, roughly 90% of the companies PAC donations went to Republican groups, including $170,000 to pro-Trump commite Trump Victory and another $50,000 the Republican "Win in 2016" PAC.SunTrust Banks was also a contributor to Win in 2016, giving $65,000.The PAC split this money largely between states, transferring $2,445,500 to state and local parties and only $60,000 to national parties.

Corecivic did not make it into the top five for-profit prison company contributors until 2016, but its numbers are no less interesting. In 2016, 11.5% of their money went to Democrats and 87.5% went to Republicans (leaving one percent unaccounted for).In 2018, those percentages had moved to 5.4% and 94.6% respectively.

One more interesting note, is the dollar amount spent in the last two elections. In 2016, GEO Group and Corecivic spent a combined $804,552 on candidates and parties, in 2018, despite the fact that it was a midterm election, they spent a combined $1,081,536.

Another interesting place to look is the Bob Barker company (no not the television host). Bob Barker is a jail supplier. They sell all sorts of items from disposable clothing to color-coded restraints. Between 2013 and 2017, there are at least 10 instances of CBP contracting Bob Barker.Vice reported that Bob Barker, "has made at least $13 millioncontracting with federal prisons since 1995... it has also struck at least $100,000 worth of deals to provide goods to Immigration and Customs Enforcement (ICE) since 2016."Not only is Bob Barker a major beneficiary of increased migrant detention, they are also major contributors to the Republican Party. In 2016, they gave Trump $3,860 and in 2018, they gave Republican congressional candidates a combined total of over $20,000.

Although both for-profit prison companies have spent their money mostly on Republican candidates in the past few years, Democrats have still received tens of thousands of dollars from these groups. Thus, this is not simply a partisan issue.


Revelations from the U.S.-Mexican border shook Americans to their core. Many of the problems that face private prisons-overcrowding, poor treatment-are also seen in these immigration detention facilities. New reports obtained by MSNBC on July 9, found around 30 "significant incident reports" out of a facility in Arizona.These reports corroborate what lawyers and politicians saw in other detention centers. Several reports from Arizona claim the migrant children were kept in rooms so crowded that they couldn't lay down to sleep, they had mattresses taken away when they complained about the poor quality of water and food, and one young girl who claimed to have been sexually assaulted by a CBP agent. As of the airing of the story the claim had neither been investigated nor resolved.

Much like private prisons, these facilities also have a problem with holding migrants longer than they should. 

Works Cited

1.    Alvarez, Priscilla, and Caroline Kelly. "John Kelly Joins Board of Company That Operates Shelters for Migrant Children." CNN. May 03, 2019.

2.    "Bob Barker Co: Recipients."

3.     "Bob Barker Co: Recipients."

4.    Brittain, Amy, and Drew Harwell. "Private-prison Giant, Resurgent in Trump Era, Gathers at President's Resort." The Washington Post. October 25, 2017.

5.    Bryant, Sean. "The Business Model Of Private Prisons." Investopedia. June 25, 2019.

6.    Cranley, Ellen. "John Kelly's New Role on a Detention Center Board Set off Ethics Concerns That He May Be Profiting from the Child Separation Policy He Pushed." Business Insider. May 04, 2019.

7.    Davis, Michelle. "JPMorgan Ends Financing of Private Prisons After Criticism." March 05, 2019.

8.    "For-profit Prisons: Top Contributors to Federal Candidates, Parties, and Outside Groups."

9.    "For-profit Prisons: Top Contributors to Federal Candidates, Parties, and Outside Groups."

10.  "For-profit Prisons: Top Contributors to Federal Candidates, Parties, and Outside Groups."

11.  "GEO Group to PACs/Parties."

12.  Helmore, Edward. "Wayfair Employees Walk out in Protest over Sales to Migrant Detention Camps." The Guardian. June 26, 2019.

13.  Joy, Tara. "The Problem with Private Prisons." Justice Policy Institute. February 02, 2018.

14.  Nguyen, Lananh. "SunTrust Is Latest Bank to Halt Financing of Private Prisons." July 08, 2019.

15.  Nguyen, Lananh. "Bank of America Will Stop Lending to Private-Prison Firms." June 26, 2019.

16.  Pearl, Mike. "This Is Who Sells Those Crappy Shampoo Packets AOC Found in Migrant Detention." Vice. July 02, 2019.

17.  Plante, Stephie Grob. "What We Know about the Sanitary Conditions for Migrants in Detention Centers." Vox. July 03, 2019.

18.  Simon, Morgan. "SunTrust Joins Wave Of Banks Exiting The Private Prison Industry." Forbes. July 08, 2019.

19.  Sullivan, Eileen. "Obama Administration to End Use of Private Prisons." PBS. August 18, 2016.

20.  "The Wall Street Banks Still Financing Private Prisons." Popular Democracy. April 2019. 2019 Data Brief The Wall Street Banks Still Financing Private Prisons FINAL EMBARGOED UNTIL 4-8-19 1030am.pdf.

21.  Urbina, Ian. "Despite Red Flags About Judges, a Kickback Scheme Flourished." The New York Times. March 27, 2009.

22.  "Win in 2016 Expenditures."

23. "Win in 2016 to PACs/Parties."

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Lananh Nguyen, "SunTrust Is Latest Bank to Halt Financing of Private Prisons,", July 08, 2019,

Morgan Simon, "SunTrust Joins Wave Of Banks Exiting The Private Prison Industry," Forbes, July 08, 2019,

Lananh Nguyen, "Bank of America Will Stop Lending to Private-Prison Firms,", June 26, 2019,

Michelle Davis, "JPMorgan Ends Financing of Private Prisons After Criticism,", March 05, 2019,

Edward Helmore, "Wayfair Employees Walk out in Protest over Sales to Migrant Detention Camps," The Guardian, June 26, 2019,

Tara Joy, "The Problem with Private Prisons," Justice Policy Institute, February 02, 2018, ,

Ian Urbina, "Despite Red Flags About Judges, a Kickback Scheme Flourished," The New York Times, March 27, 2009,

Joy, "The Problem with Private Prisons"

Sean Bryant, "The Business Model Of Private Prisons," Investopedia, June 25, 2019,

Joy, "The Problem with Private Prisons"

Bryant, "The Business Model Of Private Prisons"

Joy, "The Problem with Private Prisons"

Ellen Cranley, "John Kelly's New Role on a Detention Center Board Set off Ethics Concerns That He May Be Profiting from the Child Separation Policy He Pushed," Business Insider, May 04, 2019, ,

Amy Brittain and Drew Harwell, "Private-prison Giant, Resurgent in Trump Era, Gathers at President's Resort," The Washington Post, October 25, 2017,

Brittain and Harwell, "Private-prison Giant, Resurgent in Trump Era, Gathers at President's Resort"

"For-profit Prisons: Top Contributors to Federal Candidates, Parties, and Outside Groups,",


Eileen Sullivan, "Obama Administration to End Use of Private Prisons," PBS, August 18, 2016, ,

"For-profit Prisons: Top Contributors to Federal Candidates, Parties, and Outside Groups"

"GEO Group to PACs/Parties,",

"Win in 2016 to PACs/Parties,",

"Win in 2016 Expenditures,",

"For-profit Prisons: Top Contributors to Federal Candidates, Parties, and Outside Groups,",

"For-profit Prisons: Top Contributors to Federal Candidates, Parties, and Outside Groups,",


Stephie Grob Plante, "What We Know about the Sanitary Conditions for Migrants in Detention Centers," Vox, July 03, 2019,

Mike Pearl, "This Is Who Sells Those Crappy Shampoo Packets AOC Found in Migrant Detention," Vice, July 02, 2019,

"Bob Barker Co: Recipients,", ,,


About the Author

Alexander Carl

Partner - Bolour / Carl Immigration Group, APC. 323-218-0465 Email: Email Me Areas of Practice Business Immigration Family Immigration athletes, entertainers and artists Naturalization Education Loyola Law School, Los Angeles, California Juris...


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