The U.S. Justice Department announced Wednesday that it would be phasing out its use of private prisons in favor of using facilities provided by the Federal Bureau of Prisons, citing that government correctional centers are more safe and effective than contracted ones have been in recent years.
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It’s been about a decade since the Department of Justice began contracting with private prisons (in an effort to mitigate overpopulation in federally run prisons), and the abrupt end to that relationship was met with an abrupt drop in shares on the New York Stock Exchange.
According to the OIG report, privately-run prisons had more safety and security incidents than those managed by the Federal Bureau of Prisons (BOP), including higher rates of assaults and contraband.
Targeting company share prices, the department said it planned to gradually reduce the use of private prisons by letting contracts expire or by scaling them back to a level consistent with the declining prison population, a move that would reverse a practice begun nearly 20 years ago.
In a memo to department officials, Deputy Attorney General Sally Yates told them to let government contracts with private prisons expire.
Yates said that ultimately, the goal is “reducing-and ultimately ending-our use of privately operated prisons”.
The contract prisons are operated by three private corporations, according to the Inspector General’s report: Corrections Corporation of America, GEO Group and Management and Training Corporation.
In a public announcement of the decision, Yates noted that the US prison population has declined since 2013, when the number of federal inmates in private prisons peaked.
Private prisons were initially utilized by the Bureau of Prisons to ease overcrowding issues, but as inmate population has declined the United States Department of Justice has deemed the privatized prisons as no longer necessary. Numerous inmates are foreign nationals who are being held on immigration offences, the audit said.
Stock prices of the country’s two biggest private prison companies – Corrections Corporation of America and GEO Group – nosedived by almost 25 percent Thursday morning.
In the United States, the federal government detains a relatively small share of the overall prison population, which is now about 1.6 million, according to the Prison Population Initiative.
And that allows the DOJ to reduce its reliance on private prisons, especially because “time has shown that they compare poorly to our own Bureau facilities”.
President Obama and his administration plans to reduce the use of private for profit prisons after a conclusion was reached by The Justice Department, claiming private prisons are not as safe as governmental prisons.
The Justice Department began contracting out to private prisons about a decade ago, according to the memo, and now work with 13 prisons. However, Schwarz said, Congress has funded a minimum of 34,000 beds a day for immigration detention, and 62 percent are in facilities run by private contractors.
Stock prices of the three private prison companies plunged with the announcement.
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Yates is unsure as to when federal use of private prisons will be completely eliminated.
