A core part of Donald Trump’s presidential 2024 election campaign was the proposed mass deportation of criminal and undocumented immigrants. Brett C. Burkhardt and Troy Ramsey note that following Trump’s re-election last month, the stock prices of private prison firms – which would likely be closely involved in expanded and more aggressive immigration enforcement – soared. They write that private prison companies will seek to capitalize on a second Trump term through contracts for immigrant detention, electronic monitoring, transportation, and imprisonment.

Private prison stock prices soared after Donald Trump’s second presidential election win; industry leaders GEO Group and CoreCivic saw their stock prices jump 30 to 40 percent in a single day following the election (Figure 1). Investors are hoping that Trump will follow through on a promise that was central to his campaign: to carry out “the largest deportation program of criminals in the history of America.” This is music to the ears of private prison companies.

Figure 1 – Private prison stock prices in 2024

Private prison companies are best known for operating state and federal prisons in exchange for payment. Today, they hold roughly 90,000 prisoners convicted of state or federal crimes–about seven percent of the total US prisoner population. But in recent years, immigration enforcement has become an increasingly important part of private prison companies’ business model. Contracts with ICE—US Immigration and Customs Enforcement—have grown substantially over the past 20 years (Figure 2). In 2023, these ICE contracts generated $1 billion in revenue (43 percent of total) for GEO Group and $556 million (30 percent of total) for CoreCivic.

Figure 2 – Revenues from ICE contracts

How Trump 2.0 could benefit the private prison industry

Private prisons’ “Trump bump” comes as the industry has been weathering significant headwinds. Prison populations have declined. Major banks have refused to finance new prison projects. And investigators continue to probe serious allegations of abuse and neglect at prisons and detention centers.

Now, private prison companies will seek to capitalize on a second Trump term. Four areas of potential growth stand out: immigrant detention, electronic monitoring, transportation, and imprisonment.

“EloyDetentionCntr_2018_IMG_1907-1” (CC BY-NC 2.0) by rawEarth 

Immigrant detention

Immigrant detention is the primary target for growth. Details of Trump’s mass deportation plans are sparse, but it may involve removing millions of immigrants from the country. That would be a tremendous increase relative to the roughly 140,000 removals that took place in 2023.

But deportation takes time. People facing removal must have their cases processed in the heavily backlogged immigration courts, which currently have 3.7 million pending cases. Additionally, the US will need to seek cooperation from countries that will receive deportees. In the meantime, the administration will likely detain many of these people while their cases are processed.

The private sector already holds more than 70 percent of the nearly 40,000 immigrants in detention. Private companies will seek to maintain or increase their share of this detained population, which could explode under a mass deportation scenario. They could do this by utilizing vacant beds in existing detention facilities, constructing new detention facilities, or re-purposing facilities previously used for correctional purposes, like prisons.

Electronic monitoring

Not all immigrants awaiting a hearing will be detained. Many will be placed under electronic supervision—what ICE calls “alternatives to detention.” Private prison companies are poised to expand in this domain as well, with the major players having divisions dedicated to community supervision.

BI, Inc., a subsidiary of GEO Group, currently has a contract with ICE to supervise immigrants in the Intensive Supervision Appearance Program, or ISAP. They utilize GPS ankle monitors, phone check-ins, and (most commonly) the smartphone app SmartLINK to monitor about 180,000 people with pending immigration cases. These software tools are highly scalable, and company executives believe they could expand to monitor millions of immigrants in the next administration.

CoreCivic thus far has been shut out of federal ISAP contracts, despite having electronic monitoring capacity (via its Recovery Monitoring Solutions division). But company executives hope to capture a share of this market in the next round of contracting.

Transportation

Private prisons companies could also expand their existing transportation operations. Immigrants identified for deportation proceedings may need to be relocated to immigration courts, detention centers, or both. GEO Group and CoreCivic both have existing transportation divisions (GTI and TransCor, respectively), which already provide ground and air transport for prisoners and detainees. The companies hope to expand their established partnerships with ICE, as well as the US Marshals Service and the Bureau of Prisons.

Prisons

Finally, private prison firms will also recover lost ground in imprisonment operations. The federal Bureau of Prisons, which holds people convicted of federal crimes, has a long history of contracting with private industry to operate prisons. Just ten years ago, nearly 20 percent of federal prisoners were held in private prisons.

But the relationship between BOP and private industry has been volatile in the past decade. In 2016, President Obama issued an executive order to phase out BOP’s use of private prisons. President Trump rescinded that order in 2017. Four years later, in 2021, President Biden re-instated the phase-out order. Given this pattern, it is reasonable to expect that Trump will rescind the phase-out order, as he did in his first term. While this move may end up being less consequential than Trump’s immigration-related policies, it could provide new opportunities for GEO and CoreCivic, whose federal prison contracts had all but dried up.

A caveat

Given Trump’s campaign promises, as well as his track record as President, it is no wonder that investors are bullish on private prison companies. They stand to profit handsomely from tougher immigration enforcement, which will require more detention, monitoring, and transportation.

Yet, while investors and executives see a clear upside, the industry may need to tread carefully to avoid reputational damage. In the first Trump administration, private prison operators distanced themselves from the most extreme immigration policies—especially, the “zero tolerance” policy that separated children from their families at the US-Mexico border. These actions were extremely unpopular among the public and generated widespread condemnation. Should a second Trump administration overreach in its enforcement of immigration law, we may again see images of human suffering, coupled with moral outrage and public protest, which could extend to the government’s corporate partners.

But in the meantime, companies will look to benefit from the aggressive approach to immigration enforcement that seems all but certain in a second Trump administration.

Acknowledgement/disclosure

This work received support from the Institute for Humane Studies (Grant No. IHS017556).

• Subscribe to LSE USAPP’s email newsletter to receive a weekly article roundup.
• Please read our comments policy before commenting. 
• Note: This article gives the views of the author, and not the position of USAPP – American Politics and Policy, nor the London School of Economics. 
• Shortened URL for this post: https://wp.me/p3I2YF-eD8