Trump Reverses Obama Ban On Private Prisons

Oladapo Okeowo with agency report

President Donald Trump’s administration on Thursday reinstated the use of private prisons for federal inmates, saying commercial prison operators are needed for the correctional system’s “future needs.”

The move was rescinded by the Jeff Sessions, the new attorney-general of the US.

The Obama administration, in August last year, had phased out private management of prisons after reports from the justice department showed that they were inadequate, and not cost-effective.

According to the order given by Sessions, the reversal was because Obama’s order itself reversed a longstanding policy of the Federal Bureau of Prisons to involve private firms and adversely affected the bureau’s “ability to meet the future needs of the federal correctional system.”

The future needs is probably a reference to the new government’s promise to crackdown on immigrants and foreign nationals, who form the bulk of people incarcerated in the privately-owned prisons.

This suggests the government might be in need of the extra space the privately-owned prisons afford it.

According to the AFP, the Obama move had only affected a small portion of the US prison system: 13 privately-run prisons housing just over 22,000 people, or about 11 percent of the federal prison population. Most are foreign nationals, mainly Mexicans incarcerated for immigration violations.

Firms’ Stock Appreciate

The 13 prisons are run by three companies: CoreCivic (known until recently as Corrections Corporation of America), GEO Group and Management and Training Corporation.

The announcement gave a strong after-hours boost to the stock of the two listed firms. Core Civic jumped 3.2 percent, while GEO Group added 1.0 percent.

The move was expected and both companies’ stocks had already risen sharply after Trump’s election victory on November 8.

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