Revenue over Refuge: Private Equity in Immigrant Detention

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Key Points

• Hundreds of millions of dollars are flowing from city and federal governments to private equity firms for goods and services used to detain immigrants.
• 63 percent of federally-designated ICE facilities contract with private equity-owned companies for a range of services.
• Private equity-owned companies are winning emergency contracts for managing migrant shelters in cities across the country. 
• Companies like Wellpath and G4S have faced investigations and lawsuits and paid out settlements for mistreating immigrants in their care.
• Private equity firms and other alternative asset managers stand to profit from increased taxpayer-funded immigration detention, although alternatives to detention cost less.

Introduction

Since the founding of the Department of Homeland Security in 2003, government surveillance and detention of immigrants and asylum seekers has skyrocketed. Under the Trump administration, communities organized to shut down child detention centers, block ICE deportations, and stop the expansion of the southern border wall. Perhaps due to such immense backlash, the Trump administration removed fewer than 2 million people in four years, while the Biden administration removed 2.8 million in its first two years, continuing the legacy of Trump’s Title 42 policy which allowed the president to forcibly expel migrants outside of a court process. From May 2023 to May 2024, after Title 42 ended, the Biden administration deported 775,000 people, the highest number since 2010. 

From April 2022 to August 2024, Texas Governor Gregg Abbott spent more than $200 million to send immigrants to sanctuary cities across the country: Chicago, Denver, Los Angeles, New York, Philadelphia, and Washington D.C., with the New York Times reporting Boston, Albuquerque, and Detroit as potential additional destinations. Making a political point by exerting power over immigrants’ lives, promising them free transportation and housing, Governor Abbott went as far as sending two buses directly to Vice President Kamala Harris’ residence in D.C. on Christmas Eve. As of July 2024, Abbott had relocated nearly 120,000 people, many of whom crossed the border to seek asylum. Governors Katie Hobbs of Arizona and Ron DeSantis of Florida followed Abbott’s lead, dedicating millions of dollars to transporting people to Democrat-led cities.

In these sanctuary cities, elected officials promise to protect and support migrant communities through the provision of temporary housing in migrant shelters and social support services. With a great influx of people sent by Republican governors, other states suddenly needed to increase shelter capacity.

Before people are deported, they are detained. U.S. Immigration and Customs Enforcement (ICE) manages or contracts with 91 detention facilities across the United States, Guam, and Saipan, where immigrants await proceedings. In investigating these facilities in 2019, the Guardian wrote:

“The people held in prison-like facilities across the country are not serving time for a crime. They’re waiting for a hearing to determine whether they can legally remain in the country while being kept in what is considered ‘civil detention,’ intended to ensure that people show up for those hearings. Detention, once reserved only for those who threatened public safety or posed a flight risk, is now ubiquitous.”

Life in detention facilities is entirely controlled by the state and corporations that service them — beyond various physical space constraints, detained people have little choice in what they consume, how they communicate with loved ones, and the structure of their day. 

Private equity firms and the companies they own profit from detained immigrants, who are often seeking asylum, as a captive audience through contracts with local and federal governments to provide various services.

A handful of private equity firms, drawing on capital from pension funds, foundations, endowments, insurance companies, and other institutional investors have invested heavily in companies providing services to immigrant detention facilities and migrant shelters around the United States. Due to their high risk investment strategies that prioritize high returns, private equity firms are notorious for practices that harm workers, patients, and tenants. As shown in the PESP ‘zine “From Dawn ‘Til Dusk: Private Equity’s Impact on Incarceration,” people in detention facilities are particularly vulnerable to private equity’s profit-driven schemes as they cannot participate in a free market. Furthermore, private equity firms and the companies they own face little oversight from regulators and are not required to disclose the same level of information to the public as nonprofits or publicly-traded companies. 

In September 2024, the American Immigration Lawyers Association (AILA) petitioned Congress to end immigrant detention, arguing that “Detention is costly, leads to inefficiencies in processing cases, and has a long track record of human rights abuses. Community-based case management services and legal representation is more humane.” The AILA found that detaining an adult cost $164.65 per day, while one of ICE’s Alternative to Detention (ATD) programs cost just $8, and providing case management cost $14.05. While alternatives to detention have their own issues related to surveillance and faulty technology, the financial case for transitioning away from detention facilities to ATDs and case management is strong. This, of course, would be bad for the corrections industry and its private equity backers. Firms benefit from increased detention – the more people using food or healthcare services, the more money they make. 

While public and investor debate around the privatization of detention facilities has focused on publicly-traded companies such as CoreCivic and GEO Group, the private equity-owned firms that provide facility management, telecommunications, and medical services may be more widespread. As immigrant detention has ramped up under both the Trump and Biden administrations, many of these same companies and their private equity owners see business swell. This report gives an overview of private equity investment in the following segments of the immigrant detention industry in the US:

• Facility Management
• Telecommunications
• Food Service
• Healthcare
• Biometrics
• Transportation
• Border Militarization

Read the full report here >