In 2016 the Barack Obama administration instructed the federal Bureau of Prisons to phase out contracts with private prison companies. But incoming Attorney General Jeff Sessions overturned the order last week.
Asserting that the previous administration’s decision “impaired the Bureau’s ability to meet the future needs of the federal correction system,” Sessions ordered the BOP to return to its previous way of managing prisons. At its peak in 2013, the federal prison system housed almost 30,000 inmates within privately-operated prisons, or 15 percent of the federal prison population.
In August 2016, former Deputy Attorney General Sally Q. Yates (who was fired by President Donald Trump last month over her refusal to defend his travel ban) announced that as each private prison contract reached its, BOP was required to either decline its renewal or significantly reduce its scope.
“They simply do not provide the same level of correctional services, programs and resources; they do not save substantially on costs,” Yates wrote of private prisons in a memorandum to the BOP. “[And] they do not maintain the same level of safety and security.”
The change in policy will be a boon to companies that contract with the federal government for prison management services. And the results are“justifying investor bets on the impact of Donald Trump’s plans on crime, immigration and deportation," wrote Chris Strohm and Bill Allison of Bloomberg. Strohm and Allison pointed out that one prison contractor, Geo Group, donated $225,000 to a pro-Trump super political action committee and another $200,000 to a Republican senate super PAC. Another company, CoreCivic, donated $250,000 to Trump’s inauguration committee in December.
Both companies’ stock prices enjoyed a boost since Sessions’ memo was publicly released on Feb. 21. CoreCivic’s stock rose from under $33 a share to $35 at Friday’s close. Shares of Geo Group also jumped from just over $46 a share last Tuesday to almost $49 a share when the markets closed Friday afternoon.
Geo Group in particular has certainly been bullish about its future projects. The company, which describes itself as a “leading global provider of essential government services,” recently announced a $360 million acquisition of Community Education Centers, “a leading national provider of rehabilitative services.”
Despite the Obama administration’s policy and Sessions’ recent reversal, the reality is that, historically, state and local prisons have long held the lion’s share of America's privately-run prison population. The results, say some critics, have not necessarily offered relief for taxpayers. And one study suggests recidivism can actually increase in inmates housed in private facilities.
NGOs including the Sentencing Project say that despite companies’ promises to provide prison management services more cost-effective than publicly-run prisons, research over the past 20 years suggests those assumptions are not necessarily the case. One problem, as the U.S. Government Accountability Office reported a decade ago, is that even if a prison management company is publicly-owned, the data it provides its own clients often lacks transparency.
Journalists and academic studies have also suggested that the drive to increase profits per-prisoner, along with privately-fun facilities’ tactics to lengthen prison times, can drive up the costs of privately-operated prisons.
But even though the most recent federal crime reports indicate a mixed bag of statistics, the overall U.S. crime rate has been on a steady downward trend since peaking in 1991. Nevertheless, the Trump administration’s determination to increase deportations indicate that privately-run prisons will again be in demand.
Critics say many voters’ fears of illegal immigration and lawlessness catapulted Trump into the White House. But the stubborn truth is that deportations spiked sharply during the Obama years to a point at which the former president’s detractors called him the “Deporter-in-Chief.” Obama’s eight years in the White House presided over the largest raw number of deportations in U.S. history – policies that were arguably harsher than those of his predecessor, George W. Bush.
Now Trump is poised to accelerate that pace, which means more space will be needed in state and local prisons, as well as the services of private prison contractors.
Image credit: U.S. Customs and Border Patrol/Flickr
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.