The Obama administration bypassed public bidding laws to seal a $1 billion deal with the largest prison company in the US, all to handle a surge of immigrants from Central America, a new report reveals. Critics say the measure has been ineffective.
Corrections Corporation of America (CCA) inked a lucrative four-year contract to build a detention facility at the South Texas Family Residential Center, which would accommodate women and children seeking asylum in the US.
However, according to the Washington Post, it was a “unique” deal between the government and a private prison company, because, in the words of US Immigration and Customs Enforcement (ICE), “a fixed monthly fee for use of the entire facility regardless of the number of residents.”
Unlike hundreds of other detention contracts, which normally depend on occupancy, CCA received a fixed 100 percent monthly pay of $20 million, despite its 2,400-bed facility in Dilley, Texas, being “half full.”
Such sparseness only had a positive influence on CCA’s revenue. Flat for five years straight, according to the Post, in 2015, CCA’s income added 14 percent just from its Dilley detention center, one of the company’s 74 running facilities.
At the same time, under the same circumstances, the government lost out. According to a Post calculation, when 2,400 people are detained at this CCA’s facility, the government spends $285 per day, per person, but when the center stays half-full, this amount doubles. To compare, daily expenditures at 200 non-family immigration detention sites stand between $60 and $85 per detainee, according to ICE.
“If you need an air conditioner today, you’re going to pay what the AC guy tells you,” Phil Miller, an ICE deputy executive associate director, told the Post, justifying his agency’s decision. “If it’s December and you want a new AC unit in place by June, you have more time to research.”
However, such a sweet arrangement for CCA is not the only “unique” thing about this government deal.
Facing an increased flow of Central American immigrants, the Obama administration grabbed a pitch by CCA. With decades of experience, CCA was seen by ICE as a trusted company with “means” to build a new facility quickly.
There was a just public bidding process, a requirement that would delay the deal and, thus, postpone the construction, something that the Obama administration struggling to tackle the immigrant crisis could not afford. Then, CCA came to rescue with its workaround.
In September 2014, a CCA executive came to Arizona’s town of Eloy, where CCA has been operating a detention center for undocumented men since 2006, and pitched a new opportunity to its officials. The company offered Eloy to modify its contract with the town, making it look like an agreement expansion with a new order to build another facility, some 1,000 miles away. In turn, the town would receive a small percentage.
In that case, the federal government would be freed from the bidding process.
Harvey Krauss, the Eloy city manager, told the Post that at the time, he told everybody: “We’re not taking a position; we’re just a fiscal agent. The federal government was in a hurry and this was an expedited way for them to get it done.”
The plan was worked out in two separate contracts – between ICE and Eloy and between Eloy and CCA, both of which were signed on the same day and referred to the family detention center in Dilley.
The dual agreement essentially offered each side its benefits: ICE provides the money to Eloy and got to work with CCA, while Eloy received a small “administrative fee” for being party to the deal.
“This is the arrangement of a no-bid contract by twisting and distorting the procurement process past recognition,” said Charles Tiefer, a University of Baltimore law school professor and former solicitor and deputy general counsel of the House of Representatives, told the Washington Post.
The South Texas Family Residential Center opened in December 2014, but failed to operate the way the government expected it would, in part because the detention rules for women and children have changed.
Critics now say that the government could have chosen much more cost-effective alternatives.
“For the most part, what I see is a very expensive incarceration scheme,” said Rep. Zoe Lofgren (CA), the top Democrat on the House’s Immigration and Border Security subcommittee. “It’s costly to the taxpayers and achieves almost nothing, other than trauma to already traumatized individuals.”
According to the Post, CCA’s chief executive, Damon Hininger, informed investors that ICE recently began pushing for a more “cost-effective solution.”
CCA declined Post’s requests for a comment.
According to US Customs and Border Protection data, 27,754 unaccompanied children were taken into custody by officials between October 2015 and March 2016, representing a 78 percent increase from 2015 figures.
Since the beginning of 2016, the Obama administration has conducted nationwide raids of immigrant communities, particularly immigrants who entered the US after January 1, 2014, and have received orders of deportation since then. The raids have been widely condemned as punitive and inhumane.
A recent lawsuit shed light on the government’s deportation tactics, accusing the feds of using unconstitutional and deceptive schemes to detain more than 120 women and children in one of the raids.
But the Obama administration defended its recent raids, saying that it is following guidelines the US Department of Homeland Security adopted in November of 2014. In seven years of his presidency, President Barack Obama has overseen the removal of more than 2.4 million immigrants, earning him the “deporter-in-chief” label.