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Critics frown at ICE jail contracts

By Jason Buch
October 11, 2014 | Updated: October 11, 2014 11:44pm

When the immigration detention center in Dilley fills up next year, the city of Eloy,

Arizona, population 16,600, stands to make $436,000.

Eloy will benefit because U.S. Immigration and Customs Enforcement tapped the town as a pass-through to funnel $290 million to a private jail company to operate the center in Dilley, two states and 930 miles away.

Under the deal, Eloy will amend an existing contract it has with Corrections Corporation of America, which already runs a facility in Eloy. Eloy gets a small cut of the contract.

ICE frequently uses the tactic, called an intergovernmental service agreement, to avoid a public bidding process and expedite new jails. But critics say the agreements deter competition and circumvent federal procurement rules.

Dilley Mayor Pro Tem Ray Aranda said taxpayers will incur millions of dollars in costs for infrastructure improvements to accommodate the 2,400-bed detention center to be built on what's now a camp for oilfield workers.

Aranda said he supports the detention center and the 600 to 700 jobs it's expected to bring Dilley, population 4,000, but wants to know why a city in Arizona will benefit financially.

Residents “should not have to endure the costs coming to the city of Dilley, and yet have the city of Eloy, Arizona, compensated for this facility,” he said. “We're a small community and $400,000 for the city of Dilley can do wonders. That's not small change for the city.”

Congressman Lamar Smith, R-San Antonio, said he questions “whether a facility run by a city in Arizona is really in the best interest of South Texas.”

“I am concerned about the lack of transparency in the process of placing the facility in Dilley,” Smith said in a statement. “The facility is being built without a competitive bidding process, which calls into question if this is the best use of taxpayer dollars.”

Congressman Pete Gallego, D-Alpine, also weighed in, asking Homeland Security Secretary Jeh Johnson in a letter last week for information about the Eloy agreement.

“I would like to know whether the use of an inter- governmental service agreement is the most appropriate and cost-effective mechanism to create this facility,” he wrote.

Responding to crisis

ICE has rushed to find bed space to detain families since President Barack Obama declared the influx of Central American children and families in the Rio Grande Valley this spring an “urgent humanitarian crisis.” The agency was ordered to create bed space to hold families, spokesman Bryan Cox said, and going through the full procurement process could have taken more than a year.

“We had a crisis, and we wanted to respond quickly,” he said. “By modifying an existing (intergovernmental service agreement), we were able to almost immediately begin this process.”

In general, federal agencies are authorized to sign IGSA's under “unusual or compelling circumstances,” said Ira Hoffman, a government contracting expert with 30 years of experience and a principle at Offit Kurman Attorneys at Law in Maryland.

The situation in the Valley, he said, seems to fit the bill for “unusual and compelling circumstances.”

Hoffman said he couldn't speak authoritatively about detention centers, but in general it would be unusual for a $290 million contract to pass through the coffers of a city in Arizona, then be paid to a private prison operator to run a detention center in Texas.

Eloy's annual budget will balloon from $78 million a year — $40 million of which already comes from pass-through funds to operate a detention center there — to $368 million.

“I've never heard of anything like that,” Hoffman said.

ICE doesn't dole out inter- governmental service agreements without some competition, even if there's not a competitive bidding process, said Cox, the agency spokesman.

“There's still a negotiation process between the entities in terms of cost, and there's still competition,” he said. “ICE can approach an entity and negotiate between multiple facilities.”

But without public disclosure that ICE is planning a detention center, there's no way for qualified companies to compete, said Jack Pryor, a retired Army colonel who's consulting for the nonprofit WestCare Foundation.

WestCare would have bid for the Dilley facility if it had known about the opportunity, Pryor said.

Relying on intergovernmental service agreements “closes the whole system ... and doesn't give anybody else an opportunity,” he said.

Expect another influx

The detention facilities are necessary, said Congressman Henry Cuellar, D-Laredo. When he asked ICE officials about the Dilley detention center, he was told they're expecting to see in 2015 another influx of Central American children and families.

The agency has scrambled to create bed space and started a controversial policy of holding women and children caught at the border without bond until their court cases are complete.

Since last October, more than 66,000 immigrants traveling as families, most from El Salvador, Guatemala and Honduras, have been detained at the Southwest border.

Immigration officials initially had a policy of releasing them at local bus stations with notices to appear in immigration court.

Critics said that just encouraged more illegal immigration as rumors spread in Central America that women traveling with children were being given permits to enter the country.

In response, ICE opened a new detention center in New Mexico and repurposed an existing facility in Karnes County to hold families.

The Dilley detention center is scheduled to open in December with 480 beds. When construction is completed sometime next year, it will more than double ICE's holding capacity for families.

“We do need to have detention space,” Cuellar said. “We need to make sure we don't have a catch and release with family units, because that's what they were doing. In McAllen and Laredo they were leaving hundreds of people a weeks in the bus station.”

Still, Cuellar said he's not “100 percent satisfied” that ICE's use of intergovernmental service agreements is the best thing for taxpayers.

Passing the buck?

ICE is required by law to have at least 34,000 detention beds available. Since 2005, the number of people ICE detains in a year has nearly doubled from 230,000 to 440,600, according to a report by the Government Accountability Office. In that same time frame, the amount of money budgeted for detention has gone from $700 million a year to $2 billion this fiscal year.

Using intergovernmental service agreements to create new detention space avoids the costs of capital investment, said Cox, the agency spokesman.

Rather than build a new center, ICE can enter into an agreement with a city or county that has open beds. If those government entities want to turn around and contract with a private prison contractor, the burden is on them to bid out the contract, he said.

Local government officials interviewed by the San Antonio Express-News said it's not their responsibility to make sure ICE is spending its money wisely.

Eloy City Manager Harvey Krauss said ICE made the decision to contract with Corrections Corporation of America, which already operated a detention center there.

“ICE would be the one choosing the operator, we wouldn't,” Kruass said. “If it was a city project, we would be the ones going through the (request for proposal) and awarding the operator. But it's not a city project. It's ICE.”

Similarly, the 537-bed family detention center in Karnes County was built in 2010 using a modified intergovernmental service agreement for an ICE facility that already was there.

Former Karnes County Judge Alger Kendall said the GEO Group, which operates the Karnes centers, approached him after working out a deal with ICE.

He said GEO asked the county to modify the agreement to include the second facility. It was his understanding that ICE had conducted its own bidding process, Kendall said.

“Once they reached an agreement, we accepted the agreement, basically,” he said. “The Commissioners Court ... we just agreed to participate, again without any out-of-pocket or obligation on the county as far as any funds.”

GEO didn't respond to a request for comment and CCA directed questions to ICE.

Alger and Krauss said the contracts protect local governments from lawsuits over the conduct of ICE and the prison operator.

Bob Libal, the executive director of Grassroots Leadership, an advocacy group that has been critical of ICE's detention policies and outsourcing to the private prison industry, said the reliance on signing deals with local entities rather than with the companies themselves lacks transparency.

“I think the reason they don't put out (requests for proposals), they do these (intergovernmental service agreements) is to avoid scrutiny, to rush through these decisions without the public or the media to scrutinize what they're doing,” Libal said.