The stocks for major prison companies like Correctional Corp. of America and GEO plunged a whopping 40 percent Thursday afternoon.
Advertisement
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. The decision follows a recent report from the U.S. Inspector General that found private prisons were less safe, for both staff and people housed in the for-profit facilities. The companies that run these facilities have long term contracts that will be upheld, but from the language in the memo, will not likely be renewed.
“This is the first step in the process of reducing-and ultimately ending-our use of privately operated prisons”.
But Yates observations were consistent with the Inspector General’s report. All of those contracts should come up for renewal over the next five years, she said.
The Bureau of Prisons (BOP) system now contracts with private companies to operate 13 facilities.
The report noted several high-profile safety incidents at privately run prisons, such as an inmate riot over alleged inadequate services that essentially destroyed a $60 million privately run federal prison in Texas.
“We have to be realistic about the time it will take”, Yates said, “but that really depends on the continuing decline of the federal prison population, and that’s really hard to accurately predict”. In its peak, the bureau housed some 15 percent of its population, or about 30,000 inmates, in privately operated prisons.
Yates is unsure as to when federal use of private prisons will be completely eliminated.
Yates also cited a recent report by the department’s internal watchdog, the Office of the Inspector General, which found that private prisons were more risky than those in public hands. The memo instructs officials to either decline to renew contracts with private prisons or “substantially reduce” the contract. They also said they disagreed with the conclusions of an inspector general’s audit that preceded the Justice Department’s decision.
Ninety percent of the 1.6 million U.S. prison inmates are held in state-run prisons.
Advertisement
Today, the Bureau is amending an existing contract solicitation to reduce and upcoming contract award from a maximum of 10,080 to a maximum of 3,600. The Bureau of Prisons tends to use contract facilities to confine inmates who require only low security and who tend to be in the country illegally.
