The for-profit private prison industry is breaking new ground, and not just in Dilley, Texas where the largest family immigrant detention center is currently being built. Aside from the tortured history of family detention centers in Texas (see list below), what makes this plan ground-breaking in the worst kind of way, is the fact that it is being contracted by a prison town over 900 miles away.

That’s right. Corrections Corporation of America (CCA) will run this new facility, but the money will first be funneled through the City of Eloy, Arizona (which will get a hefty cut, of course). This is unprecedented, shady, and mind-boggling, but also possibly completely legal thanks to an Intergovernmental Services Agreement which allows for no-bid contracts.

John Burnett, who covered the story for NPR, quotes an unnamed ICE source as saying it is “a creative response to a difficult situation.” Certainly—just like off-shore bank accounts are a creative response to taxes. It turns out that Eloy is literally only acting as the financial go-between for the money from ICE to CCA. It claims no responsibility for what happens in the facility. This is how Burnett described it in his piece for NPR,

Here’s how it will work with the new South Texas facility: ICE sends Eloy $290 million for the first year’s expenses. The city passes through that payment to CCA to run the facility. And CCA pays Eloy $438,000 a year to essentially act as its accountant — nothing more.

Talk about easy money for the City of Eloy. But it raises important questions about the no-bid process that CCA is clearly benefiting from, and the political ties between CCA and Eloy city leadership. And this isn’t the first time that the payouts by CCA to Eloy have been exposed.

Eloy gives a new meaning to the term, “company town.” The tiny former mining center is awash in CCA cashola. CCA runs six different prison and detention facilities in Pinal County and is the largest employer.

Back in 2013, Chris Kirkham at the Huffington Post investigated the extra financial bonuses between CCA and Eloy. Not only are the City and the County making money off the expected economic incentives such as jobs, taxes, and contracts, CCA is actually paying the county a per diem for each prisoner.

CCA pays the county government based on the number of inmates in one of its prisons in Pinal, as part of an agreement to operate in the county. Last year that amounted to roughly $1.4 million, according to county budget documents. The payments increase as more beds are filled — under the agreement, the county receives two dollars per day for each inmate held in the facility. The money in part funds the county sheriff’s office, whose enforcement actions have influence over the size of the prisoner population: Under an agreement with the federal government, the office acts as an enforcement agent on immigration law, arresting violators and referring them to federal authorities, who make the ultimate decision on detention.

Sadly, this largely has not benefited the people of Eloy or the surrounding county of Pinal. According to the 2010 Census, neighboring Florence (which also hosts several prisons) has the highest proportion (36%) of vacant housing of any city or town in Maricopa, Pinal, or Pima Counties. Total employment per capita was 40 to 46 percent less than the national and state averages. The average wage is 10 percent lower than the Arizona average.

This new arrangement between ICE, CCA, and Eloy as the financial go-between raises serious questions about transparency and ethical government contracting.

Are there other ancillary benefits that the public doesn’t know about? At what point are City and County leaders so beholden to CCA detention facilities and the associated guaranteed income that they are no longer able to do what is in the best interest of the people they represent? And what happens when scandals erupt at this new family detention facility as history proves will happen? Who will be accountable, and how many new layers of bureaucracy will have to be waded through in order to get answers?

While the crony capitalism, greed, and ethical issues inherent in this episode are deeply troubling, the real tragedy is that the richest country in the world is reacting to yet another global social problem with its de-facto response: criminalization and incarceration.

This entire enterprise is being portrayed as a response to last summer’s “humanitarian crisis” of large numbers of Central American women and children seeking asylum at the border. Where is the discussion of the root cause of this surge in migration – a very real crisis of violence and poverty in countries like El Salvador, Honduras, and Guatemala? What about their legitimate claims to asylum? How on earth is putting mothers and small children in prisons – for a profit, no less – a “humanitarian” act?

Corrections Corporation of America and other for-profit incarceration companies are not in the business of being ‘humanitarian’. They have been responsible for some incredibly egregious violations of human rights:

• CCA’s Eloy Detention Center had the most deaths (at least 12) of immigrants in any US detention center
• CCA’s Hutto “family detention center,” like the one proposed in Dilly, TX was sued by the ACLU on behalf of 26 children detained there, citing massive compliance failures including inadequate education, medical care, and nutrition as well as dangerous living quarters for toddlers and infants. In 2009, the Obama administration ended family detention there, but did not close the facility. The facility has been the subject of two federal sexual abuse investigations and a class action lawsuit filed on behalf of immigrant women.
• CCA’s Idaho Correctional Center earned the title, “Gladiator School” when it was revealed that the guards there were watching and even organizing fights among prisoners. It has been deemed one of the most violent correctional facilities in the nation. It was the subject of multiple lawsuits over brutal treatment of prisoners and denial of medical care. In 2010, escalating levels of violence led the ACLU to sue over 24 incidents of preventable assault over the previous four years.
• At CCA’s Dawson State Jail in Texas was shuttered by the state of Texas last week following multiple ostensibly preventable deaths of women in its custody. Autumn Miller, a prisoner who was pregnant at Dawson, gave birth to a severely premature baby, Gracie, after she was claimed she was denied a pregnancy test and placed in solitary confinement. Gracie was born into a toilet and died after only four days.

These companies are making millions off a humanitarian crisis by building and running prisons, in a process that was excluded from competitive bidding and public scrutiny. In a country where seemingly every situation is answered with prison construction and incarceration, the winners will always be private prison companies and the losers will inevitably be people of color, immigrants, and the poor. It’s time to change this equation. A good first step is ending for-profit family detention once and for all.

Authored by Caroline Isaacs, AFSC Arizona Program Director; Bob Libal, Grassroots Leadership Executive Director; and Matthew Lowen, AFSC Arizona Associate Program Director.