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June 27, 2018 Repository 214: The Business of Beds and Banks | Slow Thinking on the Immigration Investment Posted In: community, culture, kindness, perspective, philosophy

View of a temporary detention centre for illegal underage immigrants in Tornillo, Texas. Image courtesy Reuters

On the top of my to do list every day I write “kind, honest, necessary, urgent” – if it’s not any of those things, it’s not on my list and I’m not doing it. I’ve been writing a lot privately about art (more to come publicly), and I have been slow to the draw on my blog. Some urgent matters are occurring in the media, so much so that I’m finally feeling pushed to dissect. For me it’s urgent because kids are involved, and being manipulated by media and the government. 

Yes, the picture of the girl crying, the video of the mom meeting her son in the airport, and all of the stories of immigrants have me upset daily. It only prompts me to find the root though, as things are far more nuanced than sensational, deeply sad images. If you follow Noam Chomsky’s philosophy from “Manufacturing Consent”, you know that when something rubberneck worthy is going on in the media, there may be something else more sinister happening, with a much longer consequence than temporary displacement, someplace else. That someplace else is the reason these displacements are happening, and they are too esoteric, and outwardly confusing for people to consider in tandem with the traumatic images. This is why it fell in my urgent bucket, and why I need to explain what I believe is the root cause of these insane, and completely unnecessary family separations and detentions.

So the someplace else is the business of beds: of privately owned, and publicly-traded companies that own and manage correctional facilities, detention facilities, residential facilities, community corrections and leased facilities. These are large companies whose clients are state, federal and international governments. They assess the quality and profitability of their business based on how many beds are filled in their facilities. And many, many people profit from these metrics.

These companies have recently qualified themselves as a Real Estate Investment Trust (REIT). An REIT is an asset class, meaning when you invest in something it can be an equity like Apple (AAPL: $184.43 per stock) or Caterpillar (CAT: $135.54 per stock), a commodity (e.g. gold, coal, oil), cash, bonds, or an REIT, which may be a stock in say MGM Growth Properties (MGP: $31.25 per stock) who might own your favorite casino or hotel, or American Asset Trusts (AAT: $38.60 per stock) where you can invest in your favorite mall or multi-family residence complexes. For around $28 per stock you can also invest in your favorite prison, or REIT in charge of detention facilities, residential facilities, or community corrections facilities and whose clients are the governments of US and countries abroad. 

Just as an organization becomes a non-profit because they are hopefully doing business for the people or the environment and not for profit, the REIT class was invented so that all people can benefit from the profits of large real estate. Not everyone has millions/billions to play in that market, so the REIT was created ostensibly to let smaller players in on the investment. Profit for the people so to speak.

The REIT class also allows the company to pay substantially lower federal taxes. The companies are required to pay out dividends to the people who invest in it every year. Conveniently Trump passed some tax laws this January where as an investor in REIT’s you received a discount on the taxes you usually pay out from dividends. This without a doubt benefited the landlord in chief and his family and business associates. And while the market cap of some of these companies are around $3.5 billion, they are still in debt around $2 billion thanks to the complex mix of developing properties, paying out dividends and making risks in real estate. Most CEO’s of these companies make around $9 million a year in salaries. Most of the “beds” in the prisons which are a metric to their healthy business propositions create income of around $22,000 per year. For a comparison, Medicare (that cares for VETS often) doles out only $9,500 on average per patient per year, and the federal government spent $11,222 per student in 2017 (half the cost for a bed in prison and detention facilities). 

So for example, in 2017 GEO Group (an REIT) announced a MAJOR government contract for detention centers in Texas in March and April. The contract was specifically addressing residential and detention centers. This capitalist system is the bucket for these poor souls trying to cross the borders during “zero tolerance”. One year later it makes perfect sense from this model that there would be more government “crack downs”, checking IDs and detaining people whether you are near the Mexico border or in Vermont.

“On April 13, 2017, we announced that we had been awarded a contract by U.S. Immigration and Customs Enforcement (“ICE”) for the development and operation of a new company-owned 1,000-bed detention facility to be located in Conroe, Texas. GEO expects to design, finance, build and operate the facility under a ten-year contract with ICE, inclusive of renewal options. The facility is scheduled for completion during the fourth quarter of 2018.” –  from the 2017 10-K of GEO Group (NYSE: GEO)

When we resist, it’s important to note we are resisting a capitalist system – while it smells of fascism, it’s actually capitalism. So by promoting these horrible images, we are distracted into sending money to non-profits who are to protect and litigate for the people being caught in the crossfires. While this is a fine idea, and they need the help, the long term and the long thinking is really about how we deflate the capitalist system with respect to its interest in politics. While I am the grandchild of an investment banker, have family still in the business, have worked at an investment bank, and have benefitted to a degree from this, I think it’s important to unlock and dive deep into the aspects of the system. It is through understanding the facets that we can attempt to cripple environmentally irresponsible and/or inhumane corporate practices, and support those facets of the capitalist system that are doing positive work. Another specific way to resist and challenge these companies is to prove that in fact their REIT status is not valid – this will crumble their entire reason of being in the marketplace, and will be deemed as a bad investment for all investors regardless of their moral or ethical stance. 

It’s our responsibility to know what’s going on, choose where our monies go, and support only those organizations that are doing good. So the opposite of what seems to be going on here, is a certification for businesses (within the equity asset class) called a B-Corp: while it still must be held to a microscope because there are many wolves in sheep’s clothing, these are businesses that have fair trade or organic certifications, that are making efforts to do business ethically. So if you have a portfolio, clear it of these REITs in the business of detention, and when listening to the news make sure you do the wide and long thinking as to what’s going on. It’s real news, not fake – it’s just nuanced. And yes, families belong together – that needs to stay loud, and louder and longer needs to be the stop profiting over vulnerable people – on so many fronts – pharmaceuticals, agricultural engineering, oil and gas, etc. Lastly, this is not a Republican or a Democratic specific issue: don’t be surprised if a Democrat suggests a smaller sized “bed” facility to be more humane…it’s still a capitalist invention and a business issue.

Yours in wide thinking and peace – c

Above statistics illustrating root problems were taken from various 10-K’s from companies such as GEO Corp. Below is a list of their clients whom they boast about to their investors. While there is serious and necessary facilitation of corrections centers governments must do, learning the business and politics of them are fascinating.

CLIENT LIST

Abbreviation

  

Customer

AZ DOC

  

Arizona Department of Corrections

AK DOC

  

Alaska Department of Corrections

BOP

  

Federal Bureau of Prisons

CDCR

  

California Department of Corrections & Rehabilitation

CO DOC

  

Colorado Department of Corrections

FL DOC

  

Florida Department of Corrections

FL DMS

  

Florida Department of Management Services

GA DOC

  

Georgia Department of Corrections

ICE

  

U.S. Immigration & Customs Enforcement

IN DOC

  

Indiana Department of Correction

IGA

  

Inter-governmental Agreement

IL DASA

  

Illinois Department of Alcoholism and Substance Abuse

LA DOC

  

Louisiana Department of Corrections

NJ DOC

  

New Jersey Department of Corrections

NMCD

  

New Mexico Corrections Department

NSW

  

Commissioner of Corrective Services for New South Wales, Australia

OK DOC

  

Oklahoma Department of Corrections

PA DOC

  

Pennsylvania Department of Corrections

PNB

  

Province of New Brunswick

QLD DCS

  

Department of Corrective Services of the State of Queensland, Australia

RSA DCS

  

Republic of South Africa Department of Correctional Services

SD DOC

  

South Dakota Department of Corrections

TDCJ

  

Texas Department of Criminal Justice

TYC

  

Texas Youth Commission

UKBA

  

United Kingdom Border Agency

USMS

  

United States Marshals Service

VA DOC

  

Virginia Department of Corrections

VIC DOJ

  

Department of Justice of the State of Victoria, Australia

VT DOC

  

Vermont Department of Corrections

WA DOC

  

Washington Department of Correction

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4 Comments

  1. Louise Sheils • June 27, 2018

    Your writing and the logic of your reasoning are being appreciated throughout the world without borders (so far) of thinking people. You've already done the hard work: you connected the dots. Now, your message must be heard by a broader audience. Reply


    • Catherine Haley Epstein • June 27, 2018

      Thank Louise! I agree, and I'm trying hard to figure that out. Please wish me luck as I navigate the sea of media. Thank you always for generously reading, critically thinking and commenting! Reply


    • Catherine Haley Epstein • June 27, 2018

      PS. If you have any Canadian outlets willing to run such a piece, or pieces with wide thinking let me know! Reply


  2. Marina • June 27, 2018

    This is excellent investigative and critical work that needs to be released to a wider public are you on Medium? Reply


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