The secretive industry turning Trump’s immigration crackdown into a global cash cow
Private equity investors are buying up companies that provide services in immigration detention centers, like food and health care.
It sounds like a conspiracy theory — but there really is a small handful of global investors cashing in on Trump’s immigration crackdown.
They join together in “private equity” firms, which buy up all kinds of companies to add to their “portfolio” of investments.
Does Bain Capital ring a bell? That was Mitt Romney’s private equity firm, which made a name for itself acquiring struggling companies like Kmart and Dunkin Donuts.
In such “leveraged buyouts,” private equity firms like Bain borrow gobs of money and layoff workers, while pocketing steep advisory and management fees. Sometimes, the deals go bust — like Toys ‘R’ Us, which folded last year, causing 33,000 workers to lose their jobs.
Sure, there’s money to be made in toys and donuts, but caging undocumented immigrants is a booming business in the Trump era — and private equity investors are making their moves.
The federal government spends over $8 million every day on immigrant detention, much of which goes to private prison corporations to operate detention centers. That money also goes to paying for services, like food and health care — which is where private equity firms come in.
An increasingly complex web of firms and investors now own companies providing these services. American Securities owns Global Tel Link, which provides phones for detention centers in California and New Mexico. H.I.G. Capital owns Wellpath, which provides health care in three detention centers.
Wellpath is a telling example of the dangers of private equity. It’s owner, H.I.G. Capital, also owns companies producing everything from dog food to gin. It’s the product of a recent merger between two companies, one of them formerly owned by the private prison corporation GEO Group and sued a staggering 1,395 times in the last decade for things like medical malpractice and wrongful death.
What makes companies like Wellpath so dangerous is that private equity ramps up the pressure to put profit over people. Investors only invest to make a healthy return, and unlike the executives of private prison corporations, they can hide behind multiple company names to dodge public outrage. They’re also are required to disclose far less public information than publicly traded corporations.
And private equity investors aren’t just salivating over immigration. As the New York Times documented in a striking 2016 series, they’ve slowly been gobbling up government functions, from libraries to emergency services.
Wellpath just inked a no-bid contract with Alaska to manage the state’s only psychiatric facility. Instead of fixing the real problems — underfunding and understaffing — Gov. Mike Dunleavy is handing the keys over to global investors.
As I wrote in an opinion piece for the Anchorage Daily News, Alaskans suffering from mental illness need care and public investment, not more cruelty at the hands of someone else thousands of miles away.
The good news? Groups like the LittleSis and the American Federation of Teachers (AFT) are starting to peel back the layers of the private equity industry. But there’s still much more work to do.