While President Trump has announced plans to potentially deport thousands of immigrants in raids across the U.S. This weekend, some Democrats have a different strategy: Go after the private, publicly-traded prison companies that may house many of the detainees.
On Thursday, shares CoreCivic and GeoGroup, slid 6% and 7% respectively, after members of the U.S. House of Representatives sent letters to both companies. Letters were also sent to DC Capital Partners, the private equity firm behind another company in the space, Caliburn International, as well as to the U.S. Immigration and Customs Enforcement and the Department of Health and Human Services.
“The Committee is investigating the Trump Administration’s rapidly increasing use of for-profit contractors to detain tens of thousands of immigrants, including a troubling series of reports of health and safety violations and the dramatically escalating and seemingly unchecked costs to U.S. Taxpayers for these contracts,” Rep. Elijah E. Cummings (D.-Md.) And Rep. Jamie Raskin (D-Md.) Wrote in a letter.
Geo Group is now valued at about $2.3 billion while CoreCivic trades at about $2.2 billion. That’s down about 46% since their post-election peak—meaning a loss to shareholder of some $3.9 since April 2017. That drop is despite that fact that both firms have received ever larger government contracts from the ICE since the election, according to the letter.
For democratic lawmakers heading into the 2020 election cycle, private prisons are an easy target. Sen. Elizabeth Warren (D.-Mass.) Said she plans to ban such detention facilities, with former U.S. Vice President Joe Biden echoing the call.
In a sign of just how poisonous the association with a private prison can be, big Wall Street banks have also made a rare move: cutting ties with the industry.
Banking giants including J.P. Morgan, Wells Fargo, Bank of America, and SunTrust have announced plans to no longer finance private prison operators.
Still, some activists question to what extent banks will honor these pledges.
“Banks do have a history of going back on their word—in 2008, banks committed to stay out of coal and then largely went back in the Trump era,” says Morgan Simon, a founding partner at Candide Group. Candide Group is among the groups pressuring banks to exclude private prison operators as clients.
And to be clear, while private prison stocks have been sliding, both CoreCivic and the Geo Group shares are still better off than before Trump was elected: Even now, CoreCivic and Geo Group are collectively $1 billion more valuable than on the day of the election.
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