The world's 2nd largest private prison company and largest "community corrections" and electronic monitoring business. Owns and operates prisons and immigrant detention centers in the US and abroad. Provides the government with other services as part of the criminal punishment system.
The GEO Group (GEO) is the second largest private prison corporation in the United States, and the largest provider of "community corrections" and electronic monitoring services in the world. As of July 2018, GEO manages or owns 96,000 beds within 141 prisons and detention facilities in the United States, Australia, South Africa, Canada, and the United Kingdom.
In 2017, GEO reported $2.26 billion in revenue, an increase from $2.18 billion in 2016. The majority of GEO’s revenue is derived from federal contracts with the Bureau of Prisons (BOP), Immigration and Customs Enforcement (ICE), and the U.S. Marshals and continues to increase. In 2014, federal contracts accounted for 42 percent of total revenue, and, in 2017, it accounted for 47.3 percent. The increase has come primarily from ICE, which accounts for 23.9 percent of total revenue in 2017, an increase from 18 percent in 2015.
One of GEO’s growth strategies is to acquire existing, smaller prison companies and absorb their contracts. In 2016, GEO stated in its annual report that it had spent over $1.7 billion in acquiring businesses, including LCS Facilities from LCS Correction Services, Inc., including its eight prisons and detention facilities, totaling more than 6,500 beds.
Private Prisons in the US
In 2017, 63.5 percent, or $1.44 billion, of GEO’s revenue was derived from U.S. prisons and detention facilities. As of June 2018, GEO contracts with 33 states and the federal government to operate and/or manage 71 prisons with over 75,000 beds, and it is continuing to expand its portfolio of private prisons and immigrant detention centers.
While private prisons companies claim to lower the national recidivism rate through "correctional" services, these companies’ profit model creates a perverse incentive to keep as many people in custody for as long as possible in order to maximize revenues. The profit model of private facilities works further against the social goals of rehabilitation because it is driven by the incentive to cut costs, which leads to inadequate staff training, high turnaround for guards, and poor services.
Many GEO contracts include occupancy clauses that require the contracting agency to keep the occupation of the facility at a certain level or face penalization. These occupancy clauses incentivize “tough-on-crime” legislation because government agencies are required to incarcerate a certain number of people. Additionally, GEO has been accused of understaffing and overcrowding prisons to cut costs. These measures have led to increased rates of assaults, riots, escapes, and deaths.
Immigrant Detention Centers
A congressional quota requires that Immigration and Customs Enforcement (ICE) maintains 34,000 detention beds on a daily basis - a number that has been steadily increasing since 2008 along with the increase in contracts with private prison companies, which manage about 90% of these beds. From 2013 to 2017, GEO’s revenues from contracts with ICE have steadily increased, from 16 percent to 23.9 percent of the company’s total revenue.
As of July 2018, GEO operates 10 ICE “processing centers” in seven different states with a total capacity of 12,902. In addition to these detention centers, ICE contracts with GEO-operated residential and transition centers to detain immigrants. These include the Karnes County Residential Center in Texas and the Broward Transitional Center in Florida, with a total capacity of 1,858.
President Trump’s 2018 “zero-tolerance” immigration policy has contributed to increased immigrant detention rates, prompting plans for expanding detention centers and building new ones. Increased immigrant detention rates place more demand on detention facilities which offers further business opportunities for private prison companies, including GEO. A 2018 report by Make the Road New York and the Center for Popular Democracy shows that the number of immigrants in private detention facilities will grow by 290 to 580 percent in two years if the “zero-tolerance” policy is fully implemented.
GEO operates the Karnes Family Residential Center in Texas, one of the three family detention centers involved in the Trump administration’s order to separate undocumented children from their families in June 2018. The detention center in Karnes has the capacity of 1,158 beds and earns GEO $55 million annually. In May 2018, GEO proposed building a new, 800-bed immigration detention center in Indiana in response to ICE’s increasing rates of arrest.
In April 2017, GEO was awarded a $110 million, ten-year contract with ICE to build a 1,000-bed detention facility in Conroe, Texas. The facility was the first new immigrant detention facility to be built under the Trump administration. It is scheduled to be completed in the fourth quarter of 2018 and is expected to generate $44 million in annualized revenues. The GEO-ICE contract in Conroe follows a fully privatized finance model whereby the private company, GEO, designs, builds, finances, and manages the facility. Once completed, GEO will own the facility, and in exchange for its own capital used, the government will pay GEO according to a pre-decided number of prisoners for a specific time period. This model, when applied to immigrant detention centers, sets a quota that incentivizes the detention of immigrants in order to gain profit.
In August 2018, immigrant detainees protested what they described as animal-like treatment at a GEO-managed detention facility in Karnes County, Texas. Beginning in August 2018, The GEO Group has also been a target of protest by the Dream Defenders, which called for a day action to “make GEO’s cages and profits visible to all” as part of its “GEO Cages” campaign. GEO responded to the Dream Defenders’ criticism by threatening to sue the human rights organization.
Many of GEO’s detention centers have been the source of public scrutiny. Between April and June 2017, three detainees have died in GEO’s Adelanto Detention Facility due to lack of proper medical access. In 2015, 400 detainees launched a hunger strike to demand better medical access in the Adelanto facility, and members of Congress sent a letter to ICE demanding an investigation of the facility. Despite these protests, the contract was renewed with GEO in 2016 and extended until 2021. In 2017, detainees launched another hunger strike to bring attention to the lack of medical access, poor food, and high bail.
In March 2017, a class action lawsuit was filed against GEO for forcing detainees to work at its center in Aurora, Colorado, violating federal trafficking laws. As of April 2018, GEO faces three lawsuits for alleged forced labor and other abuses in its immigration detention facilities. These cases, filed on behalf of several former detainees, allege that GEO forced them to work for a dollar a day by threatening to place them in solitary confinement or charge them for food and water.
In January 2019, poor sanitation conditions in the same Aurora, Colorado ICE Detention facility ran by GEO led to a chicken pox outbreak for the second time in three months. The resulting crackdown and 21 day quarantining of detained refugees and migrants prevented detainees from attending immigration hearings, consulting with lawyers or having recreation time. GEO refused to allow quarantined detainees to have access to a doctor or exchange potentially contaminated blankets during the quarantine according to detainees.
Operating Facilities Outside the US
GEO owns and/or manages prisons and detention facilities in Australia, South Africa, and the United Kingdom. In 2017, GEO’s international operations accounted for 8.7% percent of the total revenue. GEO operates five out of ten private prison facilities in Australia, where critics have claimed that private prison operators lack transparency and make it impossible to gauge whether or not these companies actually reduce recidivism. In the United Kingdom, GEO manages the Dungavel House Immigration Removal Centre, a 249-bed immigration detention center.
GEO’s immigrant detention centers have faced public scrutiny over the deaths of detainees. In South Africa, GEO manages a prison with a capacity of 3,000. In 2014, a riot broke out at the facility after prisoners claimed to be underfed and abused. In Canada, GEO had built and managed two privately-managed prison facilities, the Miramichi Youth Detention Facility and the Central North Correctional Centre, until they were reverted back to government management due to public pressure. More information on private facilities management abroad is available in the “International Facility Management” section.
Facility Financing, Construction, and Ownership
In January of 2013, GEO converted to a Real Estate Investment Trust (REIT). Although GEO operates prisons as its primary form of business, the prisons themselves constitute real estate. By creating an entity called a taxable REIT subsidiary (TRS), the company can separate the operational side of its private prison management from the real estate side of owning and generating income from its facilities. There are special tax advantages for REITs, which generally pay no income tax. GEO also must distribute at least 90 percent of its income to shareholders in the form of dividends.
According to a 2018 report published by In the Public Interest, GEO has been actively pushing governments to consider private financing of new facilities. REITS mark a shift into an ownership and maintenance model designed to increase the real estate business side of the company, which is more profitable than managed-only contracts. One example of the fully privatized finance model is with ICE contract in Conroe whereby GEO designs, builds, finances, and manages the facility. Once completed, GEO will own the facility and in exchange for its own capital used, the government will pay GEO according to a previously decided number of prisoners for a specified amount of time. This model sets a quota that incentivizes the government to keep up incarceration and detention levels. Such private prison construction contracts perpetuate mass incarceration, result in higher financing costs for the public, and often neglect standards for facility maintenance.
Corporate Influence and Lobbying
Through the for-profit model of private prisons, GEO and other private prison companies are incentivized to expand the carceral system by lobbying for more beds, harsher sentencing, and longer periods of “community” supervision. Private prison companies spend millions of dollars on lobbying and campaign contributions in order to encourage policy that favors higher rates of incarceration that benefits their profit-making, Since 1989, GEO and CoreCivic, Inc. have spent over $10 million on political candidates and nearly $25 million on lobbying efforts to ensure that their prison beds are filled. In 2017, alone, GEO spent $1.71 million on government lobbying. GEO donated $250,000 to President Trump’s inaugural fund.
GEO has also been a longtime member and financial supporter of the American Legislative Exchange Council (ALEC), a business-backed group that authors pro-incarceration state legislation for Congress. ALEC is known for its role in the rapid growth of mass incarceration in the 1980s and 1990s, and more recently, its role in expanding prison labor. For this reason, a company’s ALEC affiliation is often enough reason for activists to target the company with demands for divestment from the prison industrial complex.
In May 2017, GEO allegedly lobbied Republican representatives to submit a law to allow immigration detention centers to obtain child care licenses. This would enable private companies, like GEO, to circumvent a 2015 federal ruling that limits the detention of immigrant children to 20 days. GEO is driven by profit to fill more beds and for longer periods of times. However, GEO argued that this was necessary in order to avoid separating immigrant children from their families at the border. Opposition to detaining children indefinitely claims that detaining children for long periods of time in private prison facilities could negatively affect their mental and physical health due to deteriorating facility conditions.
In June 2018, senators demanded that Texas not grant licenses for new immigrant detention centers until the Trump administration ends its family separation policy. On June 20, 2018, President Trump signed an executive order ending family separations at the border but at the cost of a ruling that limits immigrant child detention to 20 days. Critics of the “compromise” immigration bill claim that it gets rid of extra legal protections for immigrant family detainees and makes it legal for them to be detained indefinitely until their cases are jointly resolved.
GEO is the largest "community corrections," youth services, and electronic monitoring business in the United States. In 2017, almost 23 percent of GEO’s revenue came from its GEO Care division, a near five percent increase from 2016. The division manages the company's "community corrections" services, including reentry facilities, day reporting centers, youth service facilities, and electronic monitoring . As of July 2018, GEO manages 51 residential reentry facilities, 63 day-reporting centers, and 12 youth residential facilities. B.I. Incorporated (BI), a wholly-owned subsidiary of GEO, tracks approximately 70,000 people and is the leading provider of electronic monitoring in the country.
In April 2017, GEO expanded into the community corrections sector, acquiring Community Education Centers, a company that manages reentry and treatment facilities with a capacity of 12,000 beds, for $353.6 million. The diversification of GEO’s businesses has been a central strategy of growth for GEO. GEO launched the “GEO continuum of care” program to combine GEO’s in-house prison services to its post-release services. The program has resulted in increases of $42.4 million at certain facilities in 2016. In 2017, GEO planned to increase its annual investment in GEO continuum of care from $5 million to $10 million.
GEO Transport, Inc. (GTI) is GEO’s in-house transportation division. Since 2007, GTI has transported over two million incarcerated people over 33 million miles. GTI contracts with the Bureau of Prisons, Immigration and Customs Enforcement, the US Marshals, and 27 states. Dream Defenders’ “GEO Cages” campaign has called attention to GEO’s buses for transporting child detainees, which have been widely criticized as “prison buses for babies.”
- On December 31, 2018 in Wells Fargo's Annual Business Standards Report they described to shareholders how as part of its environmental and social due diligence, its "credit exposure to private prison companies has significantly decreased and is expected to continue to decline." On March 12 2019, Wells Fargo CEO Timothy Sloan declared that the bank decided two years ago to end its business relationships with Geo Group. A bank's spokesperson later confirmed that Wells Fargo will "cut ties" with Geo Group when its current obligations expire.
- On March 5th, 2019 JPMorgan announced it would no longer finance private operators of prisons and detention centers citing the bank's ongoing evaluations of the costs and benefits of serving different industries. However a GEO Group representative said that, “These divestment efforts are politically motivated.”
- On July 17, 2018, the Metro Nashville City Council voted to pass a resolution to not invest or contribute to any private company going forward. The resolution specifically named CoreCivic, a publicly traded company that operates private prisons in Tennessee and profits from the detention of immigrant detainees, but it also applies to other large private prison companies such as G4S and Geo Group.
- On July 13, 2018, New York State announced that it will fully divest from private prisons and private immigrant detention center corporations, becoming the first in the country to eliminate private prison stock holdings in CoreCivic and GEO Group. The campaign was lead by Make the Road New York with the support of Enlace.
- On October 26, 2017, the Philadelphia Board of Pensions and Retirement divested $1.2 million from private prison companies, including The GEO Group, Inc.
- On June 8, 2017, New York City's pension funds divested $48 million from private prison companies, including GEO.
- In March 2017, a class-action lawsuit is filed against GEO for forced labor in its immigration detention center. The class-action lawsuit, originally filed in 2014, marks the first time a class-action suit against a private prison in the United States has moved foward.
- On July 22, 2016, the Berkeley City Council passed a resolution to divest from "major human rights violators," including GEO.
- On February 25, 2016, University of California Davis ASUCD passed prison divestment resolution that urges “both the Board of Regents of the University of California (UC Regents) and the ASUCD to undertake practices of corporate social responsibility by divesting in corporations which are directly and indirectly involved in the private prison industry,” including CoreCivic, Inc., Geo Group, and Wells Fargo.
- On February 22, 2016, Portland’s Social Responsible Investments Committee unanimously voted to recommend to the city to divest from Wells Fargo & Company for its ties to private-prison companies, such as Geo Group.
- On February 10, 2016, California State University, Los Angeles administrators have agreed to divest from private prison companies after pressure from CSULA Black Student Union.
- In December 2015, University of California Chief Investment Officer announced that the UC endowment, covering 10 campuses across the state, divested from private prisons, including GEO.
- In December 2015, the California Endowment divested its holdings from "companies that derive significant annual revenue from private prison services," including GEO Group.
- In July 2014, Columbia University divested its shares in GEO Group after a student-led campaign. The decision also prohibits any future investment in the prison industry.
- In April 2014, three investors, Scopia Capital, DSM, and Amica Mutual Insurance pledged to remove their collective investments of about $60 Million from the CoreCivic, Inc. and the GEO Group. DSM President Hugh Welsh explained, “In accordance with the principles of the UN Global Compact, with respect to the protection of internationally proclaimed human rights, the pension fund has divested from the for-profit prison industry.” This marks full divestment for DSM and Amica and a 27% decrease in shares for Scopia, which has decreased its private prison stock by 59% since December 2012.
- In December of 2013, Systematic Financial Management divested 74,550 shares of GEO stock, thereby exiting from the private prison industry completely. Systematic Financial Management is an investment company that manages over $13 billion in investments for local governments, retirement funds, corporations, wealthy individuals, and unions.
- In April 2013, Florida Atlantic University ultimately rejected a 6 million dollar donation from GEO Group in exchange for naming rights on the university's football stadium, after severe pressure from students, faculty, and community activists protesting the company's human rights record and links to the prison industry.
- In 2012, Wells Fargo divested nearly 33 percent of their holdings in GEO Group.
- In 2012, the United Methodist Church voted to permanently divest its shares in GEO Group, and simultaneously moved to institute a screen against future investment in any prison-related industry.
- In 2011, Enlace International launched the Prison Industry Divestment Campaign “to address the root causes of harm to communities of color caused by the Criminal and Immigration System” and to call on all public and private institutions to divest from GEO Group.