The terrorist attacks of Sept. 11 drastically altered the traditional political economy of immigration. The millions of undocumented immigrants—those who crossed the border illegally or overstayed their visas—who were living and working in the United States were no longer simply regarded as a shadow population or as surplus cheap labor. In the public and policy debates, immigrants were increasingly defined as threats to the nation’s security. Categorizing immigrants as national security threats gave the government’s flailing immigration law enforcement and border control operations a new unifying logic that has propelled the immigrant crackdown forward.

Responsibility for immigration law enforcement and border control passed from the Justice Department (DOJ) to the new Department of Homeland Security (DHS). In Congress Democrats and Republicans alike readily supported a vast expansion of the country’s immigration control apparatus—doubling the number of Border Patrol agents and authorizing a tripling of immigrant prison beds.

Today, after the shift in the immigration debate, the $15 billion-plus DHS budget for immigration affairs has fueled an immigrant-crackdown economy that has greatly boosted the already-bloated prison industry. Even now, with the economy imploding, immigrants are currently behind one of the country’s most profitable industries: they are the nation’s fastest growing sector of the U.S. prison population.

Across the country new prisons are hurriedly being constructed to house the hundreds of thousands of immigrants caught each year. State and local governments are vying with each other to attract new immigrant prisons as the foundation of their rural "economic development" plans.

While DHS is driving immigrants from their jobs and homes, U.S. firms in the business of providing prison beds are raking in record profits from the immigrant crackdown. Although only one piece of the broader story of immigration, it’s all a part of the new political economy of immigration.

Dangerous People

In the new national security context, undocumented immigrants are not just outlaws: They are "dangerous people" who threaten the homeland.

The two DHS agencies involved in immigration enforcement—Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP)—have seen their funds increased disproportionately over the last several years, doubling in size while total DHS funding has increased by just a third. The funding for these two agencies is set to rise 19.1% in 2009 while the overall DHS budget will increase by only 6.8%. Hunting down immigrants has become a top DHS priority. DHS says its mission is "to prevent terrorist attacks against the nation and to protect our nation from dangerous people."

Immigrants caught up in DHS dragnets, worksite enforcement raids, and border patrols were the "metrics of success" that DHS Secretary Michael Chertoff pointed to in his July 18, 2008 congressional testimony. He used the dramatically increased number of immigrant apprehensions and "removals" as metrics to show that DHS is succeeding in its goal to "secure the homeland and protect the American people."

While the increased numbers of immigrants being arrested, imprisoned, and deported certainly demonstrate that DHS is busy, they don’t demonstrate that DHS is stopping terrorism. Never in its congressional testimonies or media releases does DHS present evidence that shows how the number of immigrants captured improves national security.

A 2007 study by the Transnational Records Access Clearinghouse (TRAC) at Syracuse University found that there has been no increase in terrorism or national security charges against immigrants since 2001. In fact, despite the increased enforcement operations by Homeland Security, more immigrants were charged annually in immigration courts with national security or terrorism-related offenses in a three-year period in the mid-1990s (1994-96) than in a comparable period (2004-2006) since Sept. 11. According to the TRAC study, "A decade later, national security charges were brought against 114 individuals, down about a third. Meanwhile for the same period, terrorism charges are down more than three-fourths, to just 12."

Enforcing the "Rule of Law"

Rather than addressing immigration as the complex socioeconomic issue that it is, Homeland Security has reduced immigration policy to a system of crime and punishment. Applying the simplistic law-and-order logic propagated by restrictionists, DHS regards undocumented immigrants not as workers, community members, and parents, but as criminals.

Following the lead of the anti-immigration institutes and right-wing think tanks, Chertoff came to Homeland Security with a new interpretation of the department’s immigration law enforcement and border control operations: Commitment to a strict enforcement regime to protect the country against foreign terrorists, and to reassert the "rule of law."

In the aftermath of Sept. 11, the restrictionist camp found that their messaging about the "illegality" and "criminality" of undocumented immigrants took on a new resonance. They proceeded to upscale their "what don’t you understand about illegal?" message, to a more conceptual framing of undocumented immigration. Undocumented immigrants now represented a threat to the "rule of law" inside a nation that had just come under foreign attack by foreign outlaws.

Their new language about immigration policy started popping up everywhere, from the pronouncements of immigrant-rights groups to the Democratic Party platform. Instead of promising an "earned path to citizenship," as it has in the past, the party stated that undocumented immigrants will be required to "get right with the law."

Looking ahead, Janet Napolitano, President Obama’s nominee to replace Chertoff, while no anti-immigration hardliner, still seems poised to adopt the same law-and-order logic. As a lawyer, former federal prosecutor, and a governor who has insisted on more border control and stood behind a tough employer-sanctions law, Napolitano can be expected to follow the lead of Chertoff and the Democratic Party in insisting that current immigration laws be strictly enforced "to reassert the rule of law."

Immigrant Detention in the United States By the Numbers

  • Immigrants caught by DHS in 2007: 960,756
  • ICE detentions that year: 311,169
  • Rise in detentions since 2006: 21%
  • DHS 2009 budget for Border Security and Immigration Enforcement: $12.14 billion
  • Change from 2008: up 19%
  • Change since Bush took office: up more than 150%
  • Money for ICE "custody operations": $1.8 billion
  • Number of new "beds" this will provide: 1,000
  • Total number of 2009 ICE beds: 33,400
  • Average per diem for immigrant detention to private prison firms in 2007: $87.99

Sources: "Immigration Enforcement Actions: 2007," Annual Report, Department of the Homeland Security Office of Immigration Statistics, December 2008; "DHS Announces $12.14 Billion for Border Security and Immigration Efforts," Department of Homeland Security, January 2008; Leslie Berestein "Detention Dollars," The San Diego Union Tribune, May 2008; "Summary: 2009 Homeland Security Appropriations," Committee on Appropriations, September 2008.

Immigrants Mean Business

Political imperatives—protecting the homeland and enforcing the "rule of law"—have over the past eight years countervailed against the economic forces that have historically led in setting immigration policy. Although the immigrant labor market persists, the increased risks for both employer and worker, along with the recessionary economy, appear to be exercising downward pressure on both supply and demand.

But even in the flagging economy, the immigrant crackdown has invigorated other market forces. Eager to cash in on immigrant detention, private prison firms and local governments are rushing to supply Homeland Security and the Justice Department with the prisons needed to house the hundreds of thousands of immigrants captured by ICE and Border Patrol agents.

In the prison industry, bed is a euphemism for a place behind bars. Even President Bush talked the prison-bed language when discussing immigration policy. When visiting the Rio Grande Valley in South Texas in 2006 to promote the immigrant crackdown, the president said: "Beds are our number one priority."

The number of beds for detained immigrants in DHS centers has increased by more than a third since 2002. There are now 32,000 beds available for the revolving population of immigrants on the path to deportation, and another 1,000 are scheduled to come on line in 2009. This doesn’t include beds for immigrants in Homeland Security custody that are provided by county, state, and the Federal Bureau of Prisons.

At the insistence of such immigration restrictionists as Rep. Tom Tancredo (R-CO), the Intelligence Reform and Terrorism Prevention Act of 2004 contained an authorization for an additional 40,000 beds to accommodate immigrants under U.S. Government custody.

At the onset of the immigration crackdown two years ago, ICE dubbed its promise to find a detention center or prison bed for all arrested immigrants "Operation Reservation Guaranteed." The Justice Department has a similar initiative to ensure that the U.S. Marshals Service (USMS) has beds available for detainees—about 180,000 a year, of whom more than 30% are held on immigration charges.

Most of the prison beds contracted by ICE and DOJ’s Office of Federal Detention Trustee are with local governments; ICE has more than 300 intergovernmental agreements with county and city governments to hold immigrants, while DOJ has some 1,200 such agreements. In many cases, particularly with contracts for hundreds of prison beds, the local government then subcontracts with a private prison company to operate the facility.

Prison beds translate into per diem payments from the federal government that are well above the hotel room rates in the remote rural communities where most of these immigrant prisons are located. With these per diems running from $70 to $95 for each immigrant imprisoned, local governments and private firms are hurrying to expand existing facilities or to create new ones.

Depending on Immigrants

The uptick in immigrant detention that saved the industry in 2000 (see sidebar) turned into a mighty upswing in demand for immigrant prison beds after Sept. 11 and the ensuing immigrant crackdown. The Corrections Corporation of America (CCA) has reported record profits for the last few years, largely on the strength of increasing demand from its ICE and USMS "customers."

Forty percent of total CCA revenue comes from three federal contractors: Bureau of Prisons, U.S. Marshals Service, and ICE. In its 2007 Security and Exchange Commission filing, CCA stated: "We are dependent on government appropriations." CCA Chairman William Andrews warned investors that the company’s high returns could be threatened by a change in the policy environment: "The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts … or through the decriminalization of certain activities that are currently proscribed by our criminal laws."

But to understand just how well the prison business is faring and how immigrants are key to prison profits, you can listen in on the prison firms’ quarterly conference call with major Wall Street investment firms of November 2008. Corrections Corporation of America boasted that it enjoyed a $33.6 million increase in the third quarter over last year, while earnings rose 15% during the same period. Formerly known as Wackenhut, GEO Group, the nation’s second largest prison company, saw its earnings jump 29% over 2007. Cornell Companies, another private prison firm that imprisons immigrants, reported a 9% increase in net revenues in the third quarter.

Private prison companies aren’t worried that the Democratic Party sweep will mean fewer beds. GEO Group’s Chairman George Zoley on Nov. 3 assured investors: "These federal initiatives to target, detain, and deport criminal aliens throughout the country will continue to drive the need for immigration detention beds over the next several years and these initiatives have been fully funded by Congress on a bipartisan basis."

Addressing investor fears that recent decreases in undocumented immigration inflows might dampen company returns, CCA CEO and Board Chairman John Ferguson said, "So even though we have seen the border crossings and apprehensions decline in the last couple of years, we are really talking about dealing with a population well north of 12 million illegal immigrants residing in the United States."

The CCA chief assured investors that the company’s dependence on detained immigrants is not a factor of policy but rather of law enforcement. "The Federal Bureau of Prisons, U.S. Marshals Service, Immigration and Customs Enforcement are carrying out statutory obligations for their responsibility … We should continue to see their utilization of the private sector to meet their statutory obligations and requirements."

The prison executives even intimate that the economic crisis will fatten their business. When asked by an investment company representative about a possible downturn in detained immigrants, James Hyman, president of Cornell Companies, said, "We do not believe we will see a decline in the need for detention beds particularly in an economy with rising unemployment among American workers."

Detention Profiteers

There may be a new boom in immigrant detention, but captive immigrants as good business is a concept that dates back two decades. Immigrants were the industry’s first prisoners. It all began in 1983 when a klatch of wealthy Tennessee Republicans decided private prisons were just what the country needed to solve the problems of prison riots, overcrowding, and increasing costs. They formed the Corrections Corporation of America (CCA), with the mission to "provide in partnership with government meaningful public service," and succeeded in persuading the Reagan administration to help launch prison privatization by having the Immigration and Naturalization Service (ICE’s legacy agency) issue CCA a contract to keep immigrants locked up in Houston.

Wackenhut Corrections (recently renamed GEO Group), a private security services firm, branched into the private prison industry when it entered a contract in 1987 to operate an INS immigrant detention center in Colorado.

Using their experience in immigrant detention, CCA and Wackenhut soon began successfully soliciting states and counties to enter into private prison pacts, while winning dozens of new contracts with the federal government. However, the initial enthusiasm of governments at all levels faded with increasing abuse scandals at CCA and Wackenhut prisons, leading some states to cancel contracts and pull prisoners out.

But immigrant detention once again saved the day for CCA, Wackenhut, and other teetering private prison firms. The 1996 immigration law that broadened the guidelines for deporting undocumented and legal immigrants started to kick in, resulting in a rising federal demand for more immigrant detention beds that the private prison industry was happy to supply.

Immigrant Prisons as Economic Development

Hundreds of local governments are also attempting to take advantage of this rising demand for immigrant prison beds by opening their jails to immigrants under ICE and DOJ custody and by building new jails to meet the anticipated increased demand.

Financial considerations weigh heavily for cash-strapped county commissions and sheriff departments. As Sheriff Roger Mulch told Jefferson County (Illinois) commissioners in late February 2008, "ICE, during the last three months, has been hot to do business with us." Each locality negotiates independently with ICE and USMS to set the per diem rates, and as the demand from the feds for local jail beds increases, county sheriff departments are negotiating ever-higher rates.

Along the U.S.-Mexico border, particularly in Texas, prisons are a booming industry. Near the border town of Del Rio, the county’s Val Verde Correctional Facility, which is owned and run by GEO Group, had only 180 beds eight years ago. Today, after undergoing its second 600-bed expansion, the maximum-security jail can fit 1,425 prisoners.

In Texas’ Willacy County, the county government opened the country’s largest immigrant detention center in 2006, and is currently pursuing a federal contract to host one of three new family detention centers for immigrants.

County Commissioner Ernie Chapa, explaining how the county government financially depends on jailing immigrants, said: "We would love to have 2,500 [illegal immigrants] but we know that’s not going to be … If we get 2,200 to 2,300, we’d be very happy."

Joining in the celebration of the opening of the new jail for immigrants, Willacy County Judge Simone Salinas said, "We are proud to have been able to bring on these new detention beds in record time, which will result in improved border security not only for county residents but also our nation."

"You talk about economic development, this is it," Salinas told a reporter, noting the county’s initial cut is $2.25 a day per occupied bed.

A year later, a new agreement with ICE for another thousand beds was greeted enthusiastically by some officials in what is one of the poorest counties in the nation. The new County Judge Eliseo Barnhart said the expansion of the immigrant detention center run by CCA will "bring jobs that are needed in Willacy County and it means income, which we desperately need."

"It’s almost like a futures market. You have private prison companies gambling on expansion of the immigrant detention system, and basically prison speculators who are convincing communities to do this," Bob Libal, director of Grassroots Leadership in Austin and an organizer with South Texans Opposing Private Prisons, told the Denver Post. "It’s a sick market, but a market nonetheless," Libal said.

New Political Economy of Immigration

What started off as a war against terrorism has devolved into a war against immigrants. The current "enforcement-only" approach to immigration policy has created a morass of new problems, including a host of human rights and financial issues associated with the annual detention and removal of immigrants. The immigrant crackdown has given rise to an unregulated complex of jails, detention centers, and prisons that create profit from the immigrant crackdown.

At the outset of a new administration and new era, the political economy of immigration is decidedly anti-immigrant. Political and economic factors have combined to create a harsh environment for undocumented immigrants, present and future. Immigration reform may not be a top priority, but the Obama administration and new Congress would do well to begin to address the challenge of reshaping the political economy of immigration.

First steps could include a more careful articulation of the intersection of immigration, rule of law, and national security. Napolitano should explain that the real threat to the rule of law is not having an immigration policy that provides a legal pathway to integration for the 11 million immigrants already within the United States. What’s more, she would do well to disarticulate the links established by the Bush administration between immigrants and terrorists. At the same time, closer links must be made between immigration policy and economic policy, guarding against labor exploitation while considering domestic economic need.

Instead of a policy based on a calm assessment of the costs and benefits of immigrant labor to the U.S. economy, current immigration policy has been hijacked by the politics of fear, resentment, scapegoating, and nativism. The "enforcement only" immigration policy has fostered a national immigrant prison complex that feeds on ever-increasing numbers of arrested immigrants. As County Commissioner Ernie Chapa said, "Any time the numbers are high, it’s good for the county because it brings more income."

SOURCES: "Immigration Enforcement: The Rhetoric, The Reality," TRAC Immigration, 2007; "Corrections Corp. of America Q3 2008 Earnings Call Transcript," Seeking Alpha, November 2008; "The GEO Group, Inc. Q3 2008 (Qtr End 9/28/08) Earnings Call Transcript," Seeking Alpha, November 2008; "Cornell Companies, Inc. Q3 2008 Earnings Call Transcript," Seeking Alpha, November 2008; "Mulch: Jail May Soon House Immigrants," Register News, February 2008; "Willacy County Goes $50 Million More in Debt to Expand MTC’s Tent City," Texas Prison Bid’ness Blog, August 2007; "Federal Detention Center in Willacy to Expand," The Monitor, July 2007; "Inmate Count Continues to Climb at Detention Center," Brownsville Herald, April 2008.