Incarcerated in the U.S: A Profitable Industry for Private and Foreign Corporations
By: Kasey Hill
Over recent decades the management infrastructure of the United States prison system has evolved to the point where correctional institutions have become staples in an increasingly profitable industry as inmates are marketed to private corporations. According to The Bureau of Justice, the detention and prison institution in the United States has become available to the highest bidder since the mid-'80's without regard to corporate national origins or conflicts of interest. The current revenue for privatization is estimated at $1 billion.
This all began with WWII veteran, George Wackenhut. His company, The Wackenhut Corporation (TWC), paved the way for the use of private security in government institutions through their strategic gains in federally funded endeavors. His prodigy, Greek immigrant George C. Zoley, took Wackenhut’s dreams to new heights by pushing for the privatization of federal institutions. He reached success in 1987 when the subsidiary of TWC, Wackenhut Corrections Corporation (WCC), was awarded the first government contract to “build and appropriate” a detention center, The Aurora Processing Center, by the precursor to ICE, INS Immigration and Naturalization Service).
The Aurora Processing Center in Colorado, novated in 2018 and 2019 to triple capacity, currently houses over 300 detainees at less than half its total capacity (numbers have declined during COVID-19). Throughout the 90’s the company acquired Atlantic Shores Healthcare Inc, established the first privately owned prison, the Taft Correctional Institution, and the first privately owned and operated psychiatric hospital, the South Florida State Hospital. Zoley went public on NASDAQ with 2.2 million public sharesThough the Denmark-originating company G4S acquired TWC and WCC in 2002, Zoley repurchased the majority of WCC's stock a year later, renaming the company GEO, as it is known today.
Over the past 20 years, GEO has acquired numerous businesses and facilities in the fields of health, mental health, rehabilitation, incarceration and immigrant detention with contracts from federal and state agencies, gradually becoming the world's 2nd largest private company to control government institutions. To survive the Obama-era attempt to stifle private-owned prisons in 2016, GEO founder and CEO Zoley donated $225,000 to Trump's campaign ($125,000 more than his donation to President Bush) in a controversial exchange of interests that left GEO to benefit when Trump rescinded Obama’s phase-out in 2017.
The Plaintiff Campaign Legal Center (CLC) alleged a violation of the Federal Election Campaign Act which, “prohibits a federal contractor from making any “contribution to any political party, committee, or candidate for public office” at any time between the commencement of negotiations for a federal contract and the completion of performance or termination of negotiations for the contract.”
The CLC filed a complaint to no avail in November 2016 against Trump and GEO.
President Biden reinitiated the Obama era phase-out with an executive order for the Justice Department not to renew contracts with private prisons.
Though the order does not include detention centers, director of ACLU’s National Prison Project, David Fathi said, this is a, “very important step” that will, “curb an industry that has a financial interest in perpetuating mass incarceration”.