It’s hard to know where to look in the flurry of activity from the opening days of President Donald Trump’s second administration. There’s Elon Musk at DOGE, a potential trade war with Colombia, a sweeping pardon of Capitol riot participants, and the chaotic back-and-forth of the funding freeze. On immigration, the president is moving swiftly, cracking down on immigrants who entered the United States illegally. While all these moves have attracted copious attention, flying under the radar so far is one industry that stands to see a major windfall as Trump’s plans fall into place: private prisons.
The president signed a barrage of executive orders and actions on his first day in office. Among them: the revocation of an executive order signed by President Joe Biden directing the Department of Justice not to renew contracts with private, for-profit prison companies to house people convicted of federal crimes. By late 2022, the Bureau of Prisons had ended all its contracts with private prisons, per Biden’s order. Now, under Trump, the flip has been switched back on again. The move isn’t surprising — for a decade, private prisons have been in a bit of an on-again, off-again situation with the DOJ. The Obama administration moved to phase them out, Trump 1.0 reversed it, Biden phased them out again, and Trump has once again reversed that decision. The industry anticipated as much. George Zoley, the executive chairman of the GEO Group, a for-profit prison company, said on an earnings call in November that he expected Trump to reverse all of Biden’s orders on “day one.”
While private prison companies won’t mind getting business back from the BOP, that’s really not where the opportunity is. CoreCivic, another major US private prison operator, acknowledged in an investor call in 2021 that the bureau didn’t really have much of a need for private facilities anymore since the federal inmate population had declined — and less than 10% of those inmates were in private prisons. The opportunity is Trump’s plans for the mass detention and deportation of immigrants. Both Democratic and Republican administrations kept up work with for-profit prisons on immigration — the Biden administration, for example, deported more people than Trump’s first administration did and often detained those people in private prison facilities. But Trump says he plans to really ramp things up now, moving hundreds of thousands of migrants through the system in a way that would be a huge boon for the companies.
“This is, to us, an unprecedented opportunity to assist the federal government and the incoming Trump administration towards achieving a much more aggressive immigration policy,” Zoley said on the earnings call.
Despite going relatively unnoticed in the opening days of the administration, private prison companies are a secret weapon for the president in his war on immigrants, and they stand to reap some major profits in the process.
While the average American may not be aware of how good Trump’s immigration plans might be for private prisons, Wall Street certainly is. The stock prices of GEO and CoreCivic have soared by 105% and 50% since the 2024 election.
The thing that really has driven the stock price since the election basically is Trump’s stance that he’s going to deport millions of people.
“The thing that really has driven the stock price since the election basically is Trump’s stance that he’s going to deport millions of people,” said Joe Gomes, a managing director of equity research at Noble Capital Markets.
There are three main areas in which the private prison companies stand to make money on Trump’s deportation plans, said Bianca Tylek, the founder and executive director of Worth Rises, a group that advocates against the commercialization of the criminal legal system. One is detention, as in holding migrants in facilities until their court hearings or until they’re expelled from the country. The second is surveillance of migrants who aren’t detained, and the third is transportation around, and possibly out of, the US.
Immigration and Customs Enforcement has funding to maintain 41,500 beds for detained migrants, but the president’s border czar, Tom Homan, has suggested he needs at least 100,000 beds to carry out Trump’s deportation plans. The recently enacted Laken Riley Act that requires the detention of migrants accused of crimes such as theft could necessitate 60,000 more beds. Private prison operators will be key to helping this expansion, though they won’t be the only ones — Trump has said he also plans to use space at Guantánamo Bay to house detainees.
GEO, the largest contractor for ICE, has about 13,500 beds for migrants, but executives said it was well positioned to scale up to more than 31,000 beds in the near future. Similarly, CoreCivic told The Wall Street Journal it could get its capacity to 25,000 beds by reopening facilities it recently closed. It has also looked into sites for detaining families, and its CEO told the Journal that the company was “very willing” to discuss detaining unaccompanied children, too.
GEO also operates ICE’s Intensive Supervision Appearance Program, which monitors migrants as they go through legal proceedings as an alternative to detention. GEO says that about 182,500 people participate in that program daily, but that number could grow significantly. On the company’s earnings call, Zoley said GEO believes it has the technology and resources to scale up the ISAP contract to “several hundreds of thousands and upward to several millions of participants.”
About 11 million people are thought to be living in the US illegally. Gomes said that if the government were to monitor a certain percentage of those people, it would be a “huge positive” for GEO and could bring in others, too. “If that contract got extremely big, there would potentially be other players like CoreCivic that could potentially also benefit from that,” he said.
On the transportation end, private prison companies contract with ICE to move migrants on the ground and in the air. GEO said on its earnings call that it expects its air subcontracting services to generate $25 million in annualized revenue and that it believes it could scale if need be, too.
In a statement to Business Insider, a GEO spokesperson said the company was investing $70 million toward “increased housing, transportation, and monitoring capabilities and services to meet the anticipated requirements of the federal government’s immigration law enforcement priorities.” A CoreCivic spokesperson said the company “stays in regular contact with ICE and all our government partners to understand their changing needs, and we work within their established procurement processes.”
It’s not an accident that the private prison companies wound up in this situation. For years they’ve been hard at work buttering up public officials, lobbying, and making campaign donations, especially to Trump and other Republicans. While many corporate executives have come around to the idea of wooing Trump in his second term, the private prisons were there all along.
In the 2016 election, GEO donated $225,000 to the pro-Trump super PAC Rebuilding America Now through a subsidiary. (The advocacy group the Campaign Legal Center filed a complaint with the Federal Election Commission, saying the money violated a ban on political contributions by federal contractors, but that was dismissed because of a deadlock on the FEC.) GEO and CoreCivic each gave $250,000 to Trump’s 2016 inauguration. GEO held its annual conference in 2017 at the Trump National Doral Golf Club in Miami, and one GEO executive who lobbied the Trump administration stayed at Trump’s hotel in Washington, DC. Pam Bondi, Trump’s new attorney general, lobbied for GEO as recently as 2019.
Early in 2024, GEO maxed out its donation to Trump’s campaign and gave hundreds of thousands of dollars to the Trump-affiliated super PAC Make America Great Again Inc. Individual executives at GEO and CoreCivic have made large donations to Trump and affiliated PACs as well. An ABC News analysis found that private prison companies donated more than $1 million to Trump’s reelection, and now they’re hoping all their efforts pay off.
“We can assume, given their exuberance after the election, that they are really excited about the possibilities for making money and expanding the ‘demand’ that will be going up for them and their services right now,” said Setareh Ghandehari, the advocacy director at the Detention Watch Network, an advocacy group that opposes immigration detention. She added, however, that expanding detention capacity isn’t something the administration can achieve overnight. “It’s going to take time to build the infrastructure,” she said.
Trump’s plans won’t just take time — they’ll also take a whole lot of money. Companies such as GEO and CoreCivic are hoping to get a cut of that cash, but it’s unclear where exactly it would come from. Even before the president took office, ICE was facing a $230 million budget shortfall, NBC News reported, citing two US officials. To execute Trump’s immigration plans, the administration could move money around within the Department of Homeland Security from places such as the Cybersecurity and Infrastructure Security Agency, the Coast Guard, and the Federal Emergency Management Agency. It may also pull in other agencies for assistance. But ultimately it would need Congress to appropriate more money toward its project.
They’re going to need a lot more money and find places to put these people.
“That’s also a huge tax on taxpayers,” Tylek said. “Their entire business is reliant on the government paying for more people to be incarcerated.”
PJ Lechleitner, who served as the ICE director under Biden and spent 20 years at DHS, said that adding 10,000 to 15,000 beds in a few months was feasible, “perhaps twice that many.” But the numbers the Trump administration is floating, he said, would require “years of infrastructure for the high-end estimate.”
“If they’re going to aggressively continue to pursue this, which I have every indication that they are, they’re going to need a lot more money and find places to put these people,” Lechleitner told me.
Even if every dollar is approved, building new facilities takes time. That may force the Trump administration to employ the practice known as “catch and release,” Rick Su, a law professor at the University of North Carolina, told me. While it may not be exactly what Trump had in mind, it’s a good deal for private prison companies, which will be eager and able to help with migrant monitoring.
Whatever your position on immigration, the idea of criminal detention being a commercial enterprise is uncomfortable. “What’s best for my shareholders” does not always align with what’s best for the community or country or public safety. Also uncomfortable is the way the stocks of private prison companies seem to ping-pong based on which party is in the White House. Back in 2016, private prison stocks crashed when Hillary Clinton had a good debate performance. Though, for what it’s worth, these companies have fared quite well under administrations of both political stripes — both Democrats and Republicans have employed them for various immigration-related reasons.
“Both the Obama administration’s and the Biden administration’s relationships to private prisons set some guardrails,” said Matt Nelson, the executive director of Presente, a national civil and human rights organization, but neither addressed the federal government’s biggest use of private operators, which was immigration and ICE. “If you look at even what Trump did, he didn’t have to roll back very much,” he said.
Now companies such as GEO and CoreCivic find themselves at the center of what’s likely to be a very lucrative storm for them. Their executives may not have been seated behind Trump at the inauguration, but they didn’t need to be — they might prefer to fly under the radar anyway, and they’re already on track to get what they’ve wanted. They need Trump, but Trump also needs them, and everyone knows it.
Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.
