Owners and Investors in the stocks of companies that operate private prisons, such as the ones where 65 per cent of America's immigration detainees are locked up, stand to receive a huge windfall under the new tax code that Trump signed into law just before Christmas. Under this law, as The Guardian reports on December 28, privately run prisons, which under a 2013 Obama-era IRS ruling can be structured as REITS, Real Estate Investment Trusts, will now be taxed at a lower rate than before (29.6 % instead of 39.6 %).


The Guardian article begins:

"Individual investors in US private prisons are poised to collect their most lucrative earnings ever thanks to changes in the tax code signed by Donald Trump, continuing what has been a banner year for the industry since the 2016 election.

'it's going to be great for the investors, banks and hedge funds that own shares in private prisons, and are dependent on increased incarceration and criminalization,' said Jamie Trinkle, campaign and research coordinator with the racial and economic justice coalition Enlace."

The article continues:

"With dividends of more than $430m paid out by the two major private prison companies in 2017, in theory, private prison investors could see an additional $50 million in earnings. The actual figure will be lower than that, however..."

The outlook was not always so rosy for the private prison industry, according to the article:

"Sixteen months ago, the outlook for private prisons seemed bleak; that was when the United States Department of Justice announced it was phasing out their use. This announcement followed the release of a scathing government report, which concluded that private facilities were less safe than government-run ones.

The announcement only applied to the 18% of federal prisoners held in private facilities, not the 8% of state prisoners or 65% of immigration detainees held in private facilities. But it still signaled serious trouble. Corevic and the Geo Group [the two largest private prison companies] saw their stock prices plummet by about half and trading remained cratered until Trump's surprise election victory."

But, fortunately for the owners of and investors in private prison companies, the new Trump administration soon made clear that the profits of these companies came first and the health and safety of their inmates, including tens of thousands of private immigration facility detainees, (with or without criminal records), came last:

"By February [2017], Trump's first full month in office, it had become clear that the new administration would discontinue Obama's efforts to shrink the size of the shrink the size of the US prison population. One of Jeff Sessions' first acts as attorney general was to undo the DoJ directive phasing out private prisons. That month the two companies each reached two-year stock highs."

The article concludes by showing that private prison industry owners and investors, including immigration jails which are likely to expand as ICE expands its arrests and incarcerations to include all immigrants who are in the country without legal status, not just "criminal" immigrants, have little to worry about concerning the industry's profits under Donald Trump's presidency:

"The tax bill gift to private prison investors mirrors the cozy relationship Trump has had with the industry overall. After years elsewhere, in 2017 the Geo Group hosted its annual conference at the Trump National Doral golf club in Miami. The company also gave nearly half a million dollars to Trump through his inauguration committee and Super Pacs. Shortly after, it secured the administration's first contract for an immigration detention center, a deal potentially worth millions."

While 2018 may not be a good year for thousands of immigrants suffering in private immigration detention centers in unsafe conditions, and without adequate medical attention, see: NY Times, April 13:

Trump Plan Would Curtail Protections for Detained Immigrants


it is likely to be a year of great celebration for the owners and investors in these facilities, who are in a position, thanks to Donald Trump, to see their profits soar as never before.
Roger Algase is a New York immigration lawyer and a graduate of Harvard College and Harvard Law School. For more than 35 years, Roger has been helping mainly skilled and professional immigrants from diverse parts of the world obtain work visas and green cards. Roger's email address is algaselex@gmail.com

To be continued.