SHADOW PRISONS

A private and profitable corner of the federal prison system thrives after a long-ignored offense is prosecuted.

The U.S. government has quietly created a second-class federal prison system specifically for immigrants. For years the Department of Homeland Security has been known as the agency that houses immigrants awaiting deportation. However, tens of thousands of additional immigrants, most serving sentences for immigration crimes, are held by the Bureau of Prisons each night before being sent back.

And it’s all part of a lucrative business model which has funneled billions of taxpayer dollars into the private prison industry.

A Fusion investigation found that without a single vote in Congress, officials across three administrations: created a new classification of federal prisons only for immigrants; decided that private companies would run the facilities; and filled them by changing immigration enforcement practices.

"You build a prison, and then you've got to find someone to put in them,” said Texas state Sen. John Whitmire, who has seen five of the 13 Criminal Alien Requirement (CAR) prisons built in his state. “So they widen the net and find additional undocumented folks to fill them up"

Most of the roughly 23,000 immigrants held each night in CAR prisons have committed immigration infractions -- crimes that a decade ago would have resulted in little more than a bus trip back home. And now, some of the very same officials who oversaw agencies that created and fueled the system have gone on to work for the private prison companies that benefited most.

The low-security facilities are often squalid, rife with abuse, and use solitary confinement excessively, according to advocates.

Built in remote towns across the country, these prisons hold nearly twice the number of inmates in solitary confinement as other federal facilities, an American Civil Liberties Union report found. Inmates are allegedly placed in solitary confinement for complaining about food, medical care or filing grievances.

At one prison in Texas, officials placed a 32-year-old-man with epilepsy in solitary confinement to allegedly provide him with extra medical attention. However, the man died weeks later in solitary without enough medication in his system and without medical supervision, according to the man’s family who later sued the government and the company that ran the prison.

Immigration-related offenses make up the majority of convictions for immigrants in the federal system

Roughly two-thirds of immigrants who serve time in the federal prison system are locked up for “illegal reentry” -- an offense that was once rarely prosecuted. In 2005, that changed. The federal government decided to ramp up prosecutions under an internal program called Operation Streamline and the number of cases has risen over 183 percent since its implementation, with an average sentence of 18 months behind bars.

Prosecutions for "Illegal Reentry" have risen over 183% since 2004

Federal criminal prosecutions for illegal re-entry

The ramp-up in enforcement prompted a spike in immigration beds across three federal agencies. Today, the Bureau of Prisons’ contracts provide more taxpayer dollars to private prison companies than facilities run by Immigration and Customs Enforcement. In the last five years, the two largest prison companies have made nearly $2 billion in revenue from their CAR prison agreements.

In the years leading up to the crackdown, private prison companies spent more money than ever lobbying the federal government. The two largest companies -- Corrections Corporation of America (CCA) and The GEO Group -- have also long supported elected officials whose legislative efforts result in more business for them. Both companies insist their lobbying dollars focus on promoting their services and not shaping laws.

“To be clear, neither CCA nor its federally registered lobbyists have ever lobbied specifically or directly for or against Operation Streamline,” a CCA spokesperson wrote in an email.

Judith Greene, the director of a Brooklyn-based criminal justice think tank Justice Strategies that has tracked the growth of the prisons, disagrees.

“It’s an oversimplification to say private prisons single-handedly created the system we have now,” said Greene. “But they are enablers and more than just that because once they enable they are clearly pushing for more -- despite what they'll tell you."

An analysis of contracts obtained by Fusion found that private prisons charge roughly between $50 and $75 a day for each immigrant they hold. The companies make between 20 percent and 30 percent in profit on each bed, according to market research estimates by CRT Capital Group.

These profits are passed on to company leadership. Executive positions at the prison companies pay much better than those in government. Three out of the last four Bureau of Prisons directors now sit on the boards of the biggest prison companies.

Many other government officials at the Department of Justice and Department of Homeland Security who were in charge when Operation Streamline was implemented and immigrant prisons were built now work in the private prison industry. They joined other former officials who had already made the move.

Harley G. Lappin

Government

Director of Bureau of Prisons, 2004-2011

SALARY

$180,000

BUSINESS

Executive VP & Chief Corrections Officer, Corrections Corporation of America (CCA), 2011 to present

SALARY

$1,514,706

THE REVOLVING DOOR

(Scroll horizontally to see more)

Philip Perry

Government

Associate Attorney General at the Department of Justice,2001 General Counsel Office of Management and Budget, 2002-2005

BUSINESS

Lobbyist for CCA, Partner at Latham and Watkins, 2004-2005

Government

General Counsel Dept. of Homeland Security, 2005-2007

J. Michael Quinlan

Government

Director of Bureau of Prisons, 1987-1992

BUSINESS

CCA, 1993 to present, Titles include Former Senior Vice President and CEO

Norman A. Carlson

Government

Director of Bureau of Prisons, 1970-1987

BUSINESS

Director of The GEO Group, formerly Wackenhut, 1994 to 2014

Benjamin Civiletti

Government

Attorney General 1979-1980, oversaw Bureau of Prisons

BUSINESS

The GEO Group, formerly Wackenhut Corrections, 1987-2004; Titles include Board of Directors, Managing Partner

Richard P. Seiter

Government

Bureau of Prisons, 1989-1993, Titles include Assistant Director for Industries, Education and Training

BUSINESS

CCA, 2005 to present, Titles include Executive Vice President and Chief Corrections Officer

Stuart M. Gerson

Government

Assistant Attorney General, oversaw Bureau of Prisons, 1989-1993 Attorney General, oversaw Bureau of Prisons, 1993

BUSINESS

Director and Chairman of company purchased by The GEO Group for $62.1 million, 1994-2005

John M. Hurley

Government

Director of Staff Training Center & Warden, Bureau of Prisons, 1972-1998

BUSINESS

The GEO Group, 1998 to present, Titles include Senior V.P. and President

Thurgood Marshall Jr.

Government

Clinton administration, 1992-2000,Titles include Cabinet Secretary to President Clinton, Director of Legislative Affairs, Deputy Counsel to Vice President Al Gore

BUSINESS

Director of CCA, 2002 to present

Julie Myers Wood

Government

Assistant Secretary of Homeland Security, Head of Immigration and Customs Enforcement, 2006-2008

BUSINESS

Director of The GEO Group, 2014-present

David J. Venturella

Government

Immigration and Customs Enforcement, 1986-2012, Titles include Director for the Office of Enforcement and Removal Operations, Director for the Secure Communities Program

BUSINESS

The GEO Group 2012 to present, Titles include Senior Vice President Business Development and Executive Vice President

Stacia A. Hylton

Government

Attorney General's Federal Detention Trustee, 2004-2010

BUSINESS

Consultant, The GEO Group, 2010

Government

Director of U.S. Marshals Service, 2010 to present

Bart VerHulst

Government

U.S. Senate Majority Leader Bill Frist Office, 1995-2007, Titles include Chief of Staff

BUSINESS

CCA, 2007 to present, Titles include Vice President, Federal Partnership Relation overseeing government contracts

Harley Lappin oversaw the Bureau of Prisons (BOP) when it awarded five immigrant prison contracts to GEO, three to CCA, and one to another private prison company. In early 2011, shortly after being arrested for drunk driving, Lappin resigned from his role as director. Two months later, he joined CCA as the company’s executive vice president and chief corrections officer.

Lappin was paid $1,514,706 in his new position at CCA in 2013, according to a statement to shareholders. As the director of Bureau of Prisons he made roughly $180,000 a year.

In Washington, moving from the public sector to the private sector is not uncommon for government officials. But in the prison industry "the revolving door" is worse than in other sectors, according to Sen. Whitmire of Texas.

“It poses a conflict of interest if they don’t have an arm’s-length relationship when they’re doing their official duties,” said Whitmire, who believes the issue needs more oversight.

“You certainly wouldn’t want people lining up their next job doing favors for the people they want to go work for,” he said.

CCA did not respond to a request for comment regarding Lappin’s current or former role in negotiating contracts. The company said in statement it is “committed to accountability and transparency in [their] government affairs practices.”

Cost Savings

We Can’t Measure

In the summer of 1993, the Clinton administration proposed a hot new idea that was meant to deliver on two campaign promises: putting more criminals behind bars and slashing the number of employees on the federal payroll to save money. The proposal -- that the federal government explore private prison options -- was initially met with internal resistance.

"I had the impression then and I have the impression now that [private federal prisons] are a mistake,"

Former Deputy Attorney General Philip B. Heymann told Fusion.

As the second in command of the agency that oversees the Bureau of Prisons, Heymann said his colleagues at the time were sold on the idea that private prisons were cheaper and better than government facilities. He still does not believe either to be true.

“The companies make it very challenging to make determinations of what is most cost effective," he said.

Proponents of privatization won out and by 1996 Congress voted to set aside money for low-security privately operated federal prisons, mirroring a move toward private prisons that was already occurring at the state level. The BOP decided in an internal decision that immigrants would fill them, but very little is known about why. The Bureau of Prisons, after repeated requests, did not provide comment about how or why the decision was made.

There’s little evidence that CAR prisons are saving any taxpayer money. When the Government Accountability Office (GAO) found that there was not enough cost comparison data to know either way, Lappin, while he was still the head of BOP, wrote back in a public letter that his agency did not “see the value” in making companies provide more data because it could “increase current contract costs.”

He defended the contracts by saying that federal facilities were overcrowded and that companies were better able to “anticipate the growing inmate populations” and are “continually prepared to expand their operations.”

In 2007, former U.S. Rep. Tim Holden, a Democrat from Pennsylvania, introduced a bill called the Private Prison Information Act that would have required private companies to disclose more financial information. Keith Pemrick, Holden’s former legislative director, said private prison lobbying was a large part of the reason the bill died.

“I know at the time they moved hard against the bill,” Pemrick, who now is a lobbyist himself, told Fusion. “ I know they were in offices lobbying and talking to people about it.”

CCA and GEO group spent the most money lobbying in the year operation streamline was implemented

Private prison lobbying by year

Getting detailed information about the private prison industry is incredibly difficult because company records are often exempt from the Freedom of Information Act under a provision intended to protect trade secrets.

CCA and GEO declined to comment specifically on Holden’s bill or if they played any role in stopping its passage. A GEO spokesperson noted that the company “does not take a position on or advocate for any specific criminal justice.” CCA wrote in an email to Fusion that “they comply with all applicable open-records laws and share information freely with our government partners” but the government is the “final determinant of what is ultimately available to the public. ”

Lappin argued in his letter to the GAO that even without the data they requested, he was confident that contract prices were fair because they are bid on in “full and open competitions.”

One company at least is “known for negotiating beds directly with the government rather than going through a traditional competitive process,” Brian Ruttenbur, a market analyst at CRT Capital Group, wrote in a report regarding CCA.

“They have their marketing people out there, and those people go, ‘Hey I just talked to my buddy who is within the Federal Bureau of Prisons, they have this wave of [inmates] coming, why don’t we go get them a proposal before they put one out and let’s suggest something to them?’” Ruttenbur, who rated both companies favorably for investors, told Fusion.

“You go in there with a proposal and you say, ‘How about we just build this facility right next to this one? This will alleviate all your stresses,’“’ he said, noting the companies often build on speculation before contracts are even put out by the government.

“You know, it’s that kind of situation,” Ruttenbur said.

Neither the BOP nor the CCA commented on Ruttenbur’s assessment.

The Human Cost

The prisons are run with “pervasive patterns of neglect and abuse of the prisoners,” according to a four-year investigation by the American Civil Liberties Union that included more than 250 interviews with people incarcerated in CAR facilities.

Prisoners the ACLU interviewed recounted cases where inmates were reportedly sent to isolation cells because they complained about food, medical care or helped others draft grievances and file lawsuits. The report also claims that due to overcrowding spillover prisoners are sometimes sent to the solitary confinement unit arbitrarily.

The ACLU found "pervasive patterns of neglect and abuse of prisoners" in Criminal Alien Requirement facilities.

Both GEO and CCA denied the allegations. GEO wrote their “facilities provide high quality services in safe, secure, and humane residential environments, and our company strongly refutes allegations to the contrary.”

The contracts reviewed by Fusion stipulate that 10 percent of the bed space must be in the solitary confinement wing. That’s nearly twice the percent of inmates held in solitary across all Bureau of Prison facilities. Neither company or the BOP commented on this allegation.

“That is an extremely high rate of inmates in solitary conditions,” said Lance Lowry, a correctional officer in Huntsville, Texas who is the president of the state’s correctional officer union. “That ought to raise a red flag. Especially when you're dealing with [low] custody inmates who are not in there for a traditional felony criminal violation. These are people who stepped across our border unauthorized.”

At one facility reviewed by the ACLU, four inmates died over the course of one year in 2008, including a 32-year-old man named Jesus Manuel Galindo who was placed in solitary confinement to keep him under closer medical watch. Galindo’s death came just months after another man committed suicide in solitary confinement.

In December of 2007, Galindo was convicted of “illegal reentry” and sent to Reeves. The company that operated it, The GEO Group, boasted that it was the “largest detention/correctional facility under private management in the world” with almost 4,000 beds for immigrants.

What was supposed to be a 30-month prison sentence in a low-security facility turned into a death sentence for Galindo.

Galindo’s parents told Fusion their son passed away in a solitary unit where he lacked proper medical care.Their lawsuit also alleged that medical staff failed to give Galindo the correct medication after he alerted them on more than 25 occasions and suffered multiple seizures behind bars. It also claims that Galindo’s cell had a broken intercom system and lacked any video surveillance mechanism. The BOP and GEO did not comment on Galindo’s case after repeated requests.

When inmates heard that Galindo had died, the prison erupted in a riot, an FBI investigation found.

"These guys died for negligence. [The prison warden] got people in here dying in here and he doesn't do anything so that’s why we have this demonstration.”

Reeves inmate in phone call to local news affiliate

The first riot at Reeves lasted 24-hours and reportedly caused $1 million in damages, according to the Texas Observer. The second riot the following month lasted five days and reportedly caused some $20 million in damages. This, all at a low-security prison.

The lawsuit settled out of court for an undisclosed amount in 2013. The medical contractor, PNA, has since been purchased by a larger medical provider Correct Care Solutions. When reached for comment, the former president of PNA, Don Houston, said that he could not comment on the case.

A month into his solitary confinement, Galindo wrote his mother a note that read, “I get sick here by being locked up all by myself. The medical care in here is no good and I’m scared.”

The next morning he was found dead in his cell. The autopsy revealed Galindo died of epilepsy with “below therapeutic” levels of medicine in his body. Neither the Bureau of Prisons nor GEO Group have ever admitted fault for the death.