In 3-way deal, ICE is paying Arizona town to hold detainees in Texas

ICE’s own lawyers warned against the shortcut, but the agency went ahead anyway

By Patrick Michels
March 5, 2018 2:00AM (UTC)
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A wall along the border between the United States and Mexico (Getty/Omar Martinez)

This article originally appeared on Reveal from The Center for Investigative Reporting

reveal-logo-black-on-whiteIn the middle of 2014, a year in which nearly 70,000 young people arrived at the U.S. border fleeing violence in Central America, immigration officials realized they had nowhere near enough room to detain so many children and their mothers.

U.S. Immigration and Customs Enforcement needed a quick fix, and the agency found it in an unconventional three-way deal among the South Texas town of Dilley, the private prison company Corrections Corporation of America (since renamed CoreCivic) and the Arizona town of Eloy.


From the beginning, the hurried deal drew critics, not only because it let the government detain so many more migrant children, but also because of its lack of transparency and its huge cost – $1 billion over four years.

The deal also was crafted improperly under ICE’s own guidelines, according to a new internal report. The audit, from the Department of Homeland Security’s Office of Inspector General, said the unconventional arrangement shielded the private prison company from accountability.

Auditors said the Dilley contract points to broader problems with ICE’s detention contracting, too.


“ICE has no assurance that it executed detention center contracts in the best interest of the Federal Government, taxpayers, or detainees,” the report says.

The deal was a massive win for CCA, which made a record profit in 2015, according to The Washington Post. The Dilley contract accounted for 14 percent of its profit that year.

The 2,400-bed Texas facility is ICE’s largest family detention center. One reason the contract was so lucrative is that ICE paid the company as though the center were at capacity, even when half the beds were empty.


Homeland security auditors pointed first to a more basic flaw in the deal. Believing it would take too long to negotiate a new deal with city officials in Dilley, ICE thought it would be quicker to stitch the deal onto a contract it already had worked out with the city of Eloy, 900 miles away.

ICE’s own lawyers warned against the shortcut, auditors found, but the agency went ahead anyway.


“Eloy’s sole function under the modification is to act as the middleman between ICE and CCA,” according to the audit. “Eloy collects about $438,000 in annual fees for this service.”

In response to the audit, ICE said it already had developed new safeguards for negotiating its detention contracts but said it believed the Dilley contract was “reasonable.”

ICE did not respond to auditors’ recommendation that ICE end its arrangement with Eloy and work directly with officials in Dilley. In 2016, the agency extended its contract with Eloy and CCA for another five years.


Patrick Michels can be reached at Follow him on Twitter: @patrickmichels.

This story was originally published by Reveal from The Center for Investigative Reporting, a nonprofit news organization based in the San Francisco Bay Area. Learn more at and subscribe to the Reveal podcast, produced with PRX, at

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