The Real Cost of Prisons Weblog

The location is owned and run by Nashville-based Corrections Corporation of America, which, like other private prison operators, is bracing for an increase in business from measures to curb illegal immigration. The Hutto Center opened last week under a contract with the U.S. Immigration and Customs Enforcement agency, reversing last year's decision by CCA to shut down the then-underutilized prison.

"We do expect there'll be an increased need for detention beds," said John Ferguson, chief executive with CCA, citing the spotlight on immigration including legislation being discussed in Congress.

Opportunities being eyed by private prison operators include:

• The 2007 federal budget calls for 6,000 new detention beds for ICE, which doesn't build prisons but contracts space from county and other governments and from private operators such as CCA.

• CCA and its rival The GEO Group are among bidders vying to build and run a 2,800-bed U.S. Marshals Service detention Center in Laredo, Texas, to serve a federal court loaded with immigration cases.

• Under the second phase of ICE's secured border initiative, the agency is tracking down 600,000 undocumented immigrants who are fugitives from the immigration system. If caught, some are expected to go through the prison system before deportation.

Tougher enforcement

The broader ICE initiative includes ending a "catch-and-release" approach, under which people from countries other than Mexico who are caught trying illegally to cross the border are released and asked to return for a deportation hearing at a later date. Only 10 percent to 20 percent return. Under the new initiative, they would be detained until an expedited hearing, at which the government seeks to return them to their own countries.

CCA's 500-bed Hutto Center will house immigrant families caught within 100 miles of the border with Mexico or Canada or of a coastal border after being in the United States for 14 days or less. It addresses the lack of a facility along the Southern U.S. border to detain families that generally now are released pending a court hearing.

"Now we have a center that can hold families for removal back to their respective countries," said Ernestine Fobbs, spokeswoman for ICE, a part of the Department of Homeland Security. Berks County, Pa., has the only other such center nationwide. It is much smaller.

At Hutto, families will be housed based on age or sex of children and whether they include fathers or have mothers only, Ferguson said. Most detainees are expected to be single mothers with one to two children between the ages of 6 and 12, according to CCA officials. The center requires more Spanish-speaking staff and has technology that allows for connection with companies that offer translation services.

Office space is available for government staff such as deportation officers, ICE enforcement officers and clerical staff. ICE said families can have the dignity of staying together while getting the message that those entering the U.S. illegally will be sent home.

Judith Greene, a policy analyst at Justice Strategies in New York, sees alternatives to detention. She cited a study that showed 90% of people released to a nonprofit group returned for their hearing.

While private operators are seeing benefits from the spotlight on immigration, any significant windfall from changes passed by Congress won't necessarily be immediate because immigration policy isn't going to change overnight, said Geoffrey Segal, director of government reform with Reason Foundation, a Los Angeles think tank and free-markets organization. "There's some lag time between development of new policy and implementation of it," he said. He said, however, that with access to capital and other resources, private companies are better suited to meet a need for more beds.

"It's a tremendous opportunity for CCA because they have some empty facilities," said Richard Crane, a Nashville privatization consultant and director of Houston prison operator Cornell Cos.

Room for growth

CCA, the industry's leader, has more than 5,000 beds available, including space at a company-owned Georgia prison in contention for a deal from the federal Bureau of Prisons to house 1,200 non-U.S. citizens serving crime sentences.

The company also is trying to create more room for growth. It plans to spend $38.9 million on a 722-bed expansion of its 480-bed Webb County Detention Center in Laredo, Texas, which could be expanded again if it wins the 2,800-bed U.S. Marshals contract.

Overall, private prison companies have built or proposed to add 7,000 new beds in Texas during the past two to three years, said Bob Libal, co-director of Grassroots Leadership of Austin, a group that monitors the private prisons industry. "There has been a dramatic explosion in the number of immigrant detention beds in the last several years," Libal said, adding that district attorneys in border areas have boosted prosecution of immigrant offenders, including those caught crossing the border for the first time. "It's a tremendous waste of resources to be prosecuting people, having them serve jail time and deporting them. It doesn't make sense, but companies like CCA are set to make a lot of money off this trend."

Overall, CCA generates nearly 40% of its annual revenue from federal contracts — 16% from the Bureau of Prisons, 15% from the U.S. Marshal Service and 8% from ICE. CCA's ties with ICE date back to the company's early days in 1983, when it was hired to build and run the Houston Processing Center for the agency that was then called INS.

Last year, the company housed 1,200 ICE inmates who had to be moved out of Florida because of Hurricane Wilma.

"They're our largest single customer with needs south of the border," said Damon Hininger, vice president of federal customer relations at CCA. "With all the national emphasis on enforcement on the Southwest border and more resources available for patrol, that's going to have direct correlation with the need for detention."