The Department of Justice announced yesterday that it was going to stop renewing contracts with privately operated prisons.
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The decision announced by the Justice Department comes after an audit this month found that private facilities have more safety and security problems than the government-run prisons.
In the hours after the announcement, share prices for Corrections Corporation of America (CCA) – which claims to be the “nation’s largest owner of privatized correctional and detention facilities and one of the largest prison operators in the United States” – on the New York Stock Exchange dropped to $13.04, down from a 52-week high of $35.05 in late June (a decline of nearly 63 percent). There’s also no impact on private immigration detention facilities, since those fall under the Department of Homeland Security, not the DOJ.
According to the Washington Post, Deputy Attorney General Sally Yates made the announcement in a memo Thursday telling officials to cease the renewal of contracts with privatized prisons.
The contract for the prison in Big Spring, which has more than 3,100 inmates, is set to expire in March but is in the middle of a rebidding process.
Corrections Corporation of America (CCA), one of the largest private prison companies in the USA, said in an e-mailed statement the report had “significant flaws” and that their facilities are equal to or better than the those run by DOJ.
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.
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.
The Justice Department does not have jurisdiction over state prisons.
The use of privately operated correctional institutes for federal prisoners began about a decade ago, as the inmate population boomed.
Yates said private prisons, long seen as a growth industry in a country where the prison population has quadrupled since 1980, had also failed to provide any substantial cost savings.
Corrections Corporation of America (CXW) lost 40% of its value Thursday.
“Private prisons are one of most important civil rights issues of our time”, Rashad Robinson, the organization’s executive director, said in a statement.
However, the directive only involved the 13 privately run facilities used by the federal Bureau of Prisons. Numerous inmates were being held on immigration offenses, the audit said.
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By May 2017, the total private prison population will be reduced to less than 14,200 inmates, wrote Yates, down from about 30,000 in 2013.
