For-profit private prison business is getting boost in the US

A Journal of People report

Immigration prosecutions now outnumber those for drug offenses in the US. Illegal immigration and deport millions has given the private-prison industry its biggest boost in years.
A January 10, 2017 datelined Bloomberg report said:
“In the hardscrabble desert hamlet of Milan, New Mexico, incarceration is the biggest game in town.
“Not far from Interstate 40, among fragrant sage and creosote bushes, stands a sprawling outpost of CoreCivic Inc., one of America’s biggest for-profit prison companies. The 1,200-bed facility, formerly a lockup for car thieves and drug dealers, is being transformed into a detention center for immigrants fleeing Mexico and Central America. It will be opening just as Donald Trump becomes president.
“Immigrants are a growth business for Milan and the U.S. prison-industrial complex. Trump’s pledge to clamp down on illegal immigration and deport millions has given the private-prison industry its biggest boost in years. Since the Republican was elected, CoreCivic stock has jumped 78 percent. Rival private-prison company Geo Group Inc., is up 53 percent.

“The reasons are clear. A crackdown like the one Trump has proposed would cost the federal government from $400 billion to $600 billion. Prison contractors would get a slice of the pie.
“‘You can anticipate a massive enhancement of the use of the criminal-justice system to combat immigration,’ said John Sandweg, former acting director of U.S. Immigration and Customs Enforcement. He and others drew comparisons to the nation’s decades-long war on illegal drugs that led to mass incarceration.”
It should be mentioned that CoreCivic provides detention and corrections services to governmental agencies throughout the US. The company designs, constructs, owns, manages, and renovates jails, prisons. Geo Group Inc. operates private correctional facilities located mostly in the US, but also in Australia, Canada, New Zealand, and South Africa.
“Review of the Federal Bureau of Prisons’ Monitoring of Contract Prisons”, a report, dated August 2016, by the Office of the Inspector General, US Department of Justice said:

“Since the early 1980s, there has been an unprecedented increase in the federal inmate population — from approximately 25,000 in fiscal year (FY) 1980 to nearly 219,000 in FY 2012. According to a 2013 congressional report, since 1980 the federal inmate population has increased, on average, by 6,100 inmates each year. However, since FY 2013, when the BOP inmate population reached its peak of 219,298, the population has been declining — to 197,645 in December 2015, a decrease of 21 ,653 inmates (or approximately 10 percent) over that 2- year period. In spite of this downward trend, the BOP currently operates at about 20 percent over its rated capacity, and costs spent on the federal prison system are predicted to continue to rise.”

The Bloomberg report headlined “America’s Private Prisons Are Back in Business” said:
“Stricter laws, tougher enforcement, more incarceration, longer sentences: for private prisons, that’s a path to profit. In Trump …, the prison industry now has important boosters in Washington.
“Just a few months ago, the outlook wasn’t so bright. An August report from the U.S. Department of Justice recommended phasing out prison contractors because of poor performance, insufficient cost savings and falling inmate population. The agency found that private prisons were more dangerous and less hygienic than government facilities, citing higher instances of assault, inappropriate use of solitary confinement and inadequate medical treatment.
“With marijuana legalization and Congress’s easing of drug sentencing causing the first prison-population decline in three decades, it looked as if the government’s experiment of outsourcing the incarceration business was drawing to an end.
“Nashville-based CoreCivic, formerly known as Corrections Corp. of America, announced it would idle the Milan facility, putting 300 jobs on the line. So important was the prison to the community of fewer than 13,000 that New Mexico’s Democratic U.S. Senator Tom Udall wrote a letter urging the Obama administration to reconsider.
“A few weeks later, CoreCivic signed a new contract with the Department of Homeland Security, which has said it’ll continue to use private contractors to house immigrants despite the Justice Department findings.”
The report by Lauren Etter said:

“In two contributions this year, Boca Raton, Florida-based Geo gave a total of $225,000 to Rebuilding America Now, a pro-Trump super political action committee. The company also donated $200,000 to the Senate Leadership Fund, a Republican super PAC. Geo hired as lobbyists two former Sessions aides, David Stewart and Ryan Robichaux.
“‘Geo’s political activities focus entirely on promoting the use of public-private partnerships,’ spokesman Pablo Paez said in an e-mail statement.
“Jonathan Burns, a CoreCivic spokesman, said the company has provided “flexible, innovative solutions” to the challenges facing government. ‘CoreCivic does not draft, lobby for, promote or in any way take a position on proposals, policies or legislation that determine the basis or duration of an individual’s incarceration or detention,’ he said.”
The report said:
“The private-prison industry sprang from the early days of President Ronald Reagan’s drug war. The 1986 Anti-Drug Abuse Act prescribed mandatory minimum sentences for small amounts of crack cocaine. Between 1980 and 2013, the federal prison population increased by almost 800 percent, according to the Justice Department, and the government turned to private contractors to alleviate overcrowding.
“Today, the U.S. houses nearly 23,000 federal inmates in private prisons, or about 12 percent of the total. The agency predicted in August it could shrink to fewer than 14,200 by next year under the new policy.”
It added:
“As the drug war fades, private-prison companies have shifted to the immigrant-detention business, a trend that accelerated after the terrorist attacks of Sept. 11, 2001. Laws on the books requiring mandatory detention of immigrants facing deportation have been interpreted more broadly. The government prosecuted more immigrants criminally for what used to be civil offenses.
“Overshadowed by Trump’s sometimes incendiary rhetoric, President Barack Obama is leaving behind a legacy of the biggest law-enforcement immigration crackdown in modern American history. The U.S. keeps a daily average of 41,000 undocumented immigrants in detention, almost double a decade ago. Half the country’s criminal prosecutions now stem from immigration violations, outnumbering drug offenses, according to Syracuse University’s Transactional Records Access Clearinghouse.”
The report added:
“The value of contracts awarded to Geo and CoreCivic by the Homeland Security Department, which oversees facilities for immigrants, increased 20 percent since 2009. At the same time, the companies’ contracts from the Justice Department, which handles federal crimes, declined 40 percent, according to data compiled by Bloomberg. Geo is the biggest ICE vendor, with $900 million in contracts since 2013; CoreCivic, with $330 million, is third.
“At least three private prisons that lost their contracts with the Justice Department during the summer, including Milan’s Cibola County Correctional Center, have won new contracts to house immigrants.
“‘The immigration law-enforcement regime is as strong and heavy-handed as it has ever been,’ said César Cuauhtémoc García Hernández, assistant professor at University of Denver Sturm College of Law who studies immigration and criminal justice. ‘President-elect Trump has promised to throw that into overdrive.’
“As part of his ‘100-Day Plan To Make America Great Again,’ Trump said he would work with Congress to build a southern border wall and establish two- and five-year mandatory minimum prison sentences for illegal re-entry into the U.S.
“A five-year minimum for the offense would expand the federal prison population by 65,000 prisoners, which would require the government to build more than 20 prisons, according to a 2015 American Bar Association letter to Congress.”
The report said:
“Trump’s immigration proposals may provide opportunities for corrections companies to profit twice. After immigrants serve a prison sentence for the criminal offense of illegal re-entry, they’re often transferred to immigration officials who lock them up again, sometimes in facilities run by the same company, until they’re deported.
“In recent months, border crossings have skyrocketed – in October, 46,000 people, 40 percent more than the previous October – partly because of worsening conditions in Central America. Also, Trump’s election has given human traffickers in the gang-weary region a new sales pitch: Go north before a more hard-line U.S. president takes office.
“Saulo Padilla, an immigration advocate based in Goshen, Indiana, said he recently phoned his niece in Guatemala. She told him she was thinking of coming to the U.S. before Trump’s term begins. Padilla said he replied that even if she completed the 1,200-mile (1,930-kilometer) trek before Inauguration Day on Jan. 20, she’d have a good chance of ending up detained under Obama just long enough to be handed over to Trump.
“Padilla told her to stay home.”
A November 10, 2016 datelined report by Investopedia said:

“While shares of Corrections Corp of America (NYSE: CXW) and GEO Group (NYSE: GEO) were beaten down following the Justice Department’s recent decision to limit the role private prison operators play in managing federal prison populations, the election of Republican Donald Trump as president has caused their stocks to soar.”

The “Prison Stocks Soar Following Trump Election” headlined report said:

“Trump didn’t campaign as a law-and-order candidate, per se, but the markets apparently view his election as an indication that a tougher stance will be taken in Washington, and that the DOJ’s new position against using private prisons would be reversed.
“In August, Justice issued a memo directing officials to either allow their contracts with private prison operators to expire when they come up for renewal, or ‘substantially reduce’ their scope. The goal, in both instances, was for ‘ultimately ending … [the] use of privately operated prisons.’
“While the memo only covered 13 facilities housing 22,000 prisoners, the three private prison contractors in the U.S. – Corrections Corp, GEO Group, and privately held Management & Training Corp. – were all worried their revenues would be decimated by the edict because it could lead to other agencies similarly reviewing their contracts. GEO has already had a contract award reversed since the memo came out.
“But the election has apparently changed that outlook, foremost undoubtedly, because the Department of Homeland Security’s Immigration and Customs Enforcement houses a far larger percentage of U.S. inmates. More than 70% of ICE’s detainees are housed in private prisons, but mostly through state and local governments, and Trump did pledge to crack down on illegal immigration. Rather than a reduction or elimination of the private prison system during a Trump administration, we are likely to see an expansion.”
The report said:
“Shares of Correction Corp soared 43% Wednesday while GEO Group was more than 20% higher. While those moves didn’t completely erase the declines the followed the release of the DOJ memo, when their shares were cut in half, they did regain a lot of their previous value.
“Those companies still have to confront the problems outlined in an inspector general’s report that took private prisons to task for being less safe and secure than government-run facilities. While the prison operators have said the report was flawed, and a report by Bloomberg noted it failed to take into account the types of prisoners being housed in private facilities and whether they had more strict rules, meaning such inmates might be more prone to violence and more contraband would likely be found, they need to further overcome the growing, visceral objection people have to private companies incarcerating people for profit.
“However, as gloomy as the outlook for the private prison system was before, it appears to have brightened up considerably.”


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