GEO Group, ICE’s largest contractor, held an earnings call on Thursday where it discussed the future of its business as President Donald Trump continues to ramp up immigration enforcement in the U.S.
The company foresees a rise in the number of people held in detention, as well as more people being monitored through phone apps and ankle bracelets. But the numbers aren’t quite as high as they envisioned before Trump came back into office for a second time in January.
GEO said it expects to “scale up immigration detention to approximately 100,000 beds or more from the approximately 60,000 beds ICE is currently utilizing,” according to a transcript of the earnings call from Seeking Alpha. The company expects even more people to be monitored in what’s called “alternative to detention,” (ATD) schemes, which can include everything from check-in via a smartphone app to ankle monitors that are required to be worn at all times.
SmartLINK, the smartphone app, is currently used by about 147,000 people, while about 30,000 have ankle monitors, according to Bloomberg. The tracking program is run by BI Inc., which started in 1978 making a tracking device for cattle, according to the Washington Post. GEO said it expects to see more reliance on ankle monitors in the future.
The Intensive Supervision Appearance Program (ISAP) is a subprogram within ATD that applies to people who are considered high risk for flight but are still allowed to live in the community rather than being locked up in a detention center. BI secured a contract worth as much as $1 billion for ISAP. GEO said Thursday a new contract allows for 465,000 participants in the ISAP program within the next two years, up from 183,000 in the old contract.
One of the bottlenecks for GEO has been the Secretary of the Department of Homeland Security Kristi Noem, who has instituted a policy that any contracts above $100,000 be reviewed and approved by Noem personally. That new policy was blamed for a slow response by FEMA to a deadly flood in Texas back in July. Noem denied it, but the New York Times reported in August that other spending requests weren’t getting through as quickly as they should.
GEO cited that bottleneck as the first of three reasons that the “pace of new detention contracts has been slower than anticipated.” The second reason was the government shutdown, which has meant that people awarding new contracts are being more cautious. The third reason cited by GEO is the lack of staff to ramp up deportation efforts. ICE wants to double its employee count from approximately 10,000 to 20,000 people but GEO notes that is “time and staff intensive.”
“There’s millions of people that are on the non-detained docket,” GEO founder and executive chairman George Zoley said on the earnings call. “And there’s going to be a desire to provide more clarity as to where they are, what stage they are in with respect to their hearing process, and making sure they get to their hearing and if they’re not qualified to be in the country to deport them.”
GEO Group donated $1 million to Trump’s re-election campaign according to OpenSecrets. The company contributed $500,000 more to Trump’s inaugural committee, according to CREW.
As Bloomberg notes, GEO has cuts its earnings forecast, which sent the company’s stock down 10%. GEO Group saw its share price soar after Election Day, going from $14.18 on Nov. 4, the day before the election, to $26.48 a couple of days after the election. The stock price closed at $15.13 on Friday.
“While the exact timing of government actions, including new contract awards is difficult to estimate, as a management team, we are focused on maintaining a level of readiness to successfully pursue and capture future growth and continuing to allocate capital to enhance value for our shareholders,” said Zoley.
