Monday, October 17, 2016

Homeland Security to Review Use of Private Prisons

photograph courtesy of Bob Jagendorf/wikimedia commons
On the heels of the United States Department of Justice announcing that it will end future use of private for-profit prisons based on the failure of these prisons to deliver promised efficiencies and safe conditions, the Department of Homeland Security has recently announced that it too will review its use of private prisons.  With Homeland Security using private prison facilities as immigration detention centers, the profit motive for private prisons has inspired a wave of crimmigration laws in recent years.  Once again, this review is bad news for private for-profit prison giants Corrections Corporation of America (CCA) and the the GEO Group as federal contracts for prisoner warehousing is a large part of their business and profit model.

According to the Wall Street Journal: "The Department of Homeland Security will review whether private prison operators will continue to run immigration and customs enforcement’s immigration detention centers, the latest sign that the federal government is turning away from using these private contractors.  The move comes 11 days after the Justice Department said it planned to eventually stop using private facilities and operators to house federal prisoners.  Homeland Security Secretary Jeh Johnson said Monday that he directed an internal council to determine whether the use of private immigration detention centers should be eliminated."

As federal contracts have increasingly made up a larger and larger portion of the GEO Group and CCA's revenue, a future finding by Homeland Security that it will end its reliance on private prison facilities would be a devastating blow to those companies and shareholders that seek to profit off of the incarceration business.  Again, according to the Wall Street Journal:  "Since 2001, GEO and Corrections Corp. have become increasingly reliant on federal government revenue to drive results. In 2015, just over half of Corrections’ revenue came from various federal government agencies. For GEO, that figure was 45%." 

Stock prices for both companies dropped (even further) on the news of the Homeland Security review.


  1. This is interesting. Is there a similar trend for states? It seems that if the federal government is moving away from private prisons the state governments might as well.

    Haley Hunter

  2. Most of my 30 year career in government and birds-eye view of the judicial system leads me to believe that the privatization of prison systems whether intentional or not would only further undermine those who cannot afford to hire attorneys and those who have no influence in their communities.

    When profit is the modus operandi for an industry that should be seeking to rehabilitate members of society, what would serve as the inspiration to implement an operation that would accomplish rehabilitation over profit?

    Robin Beasley

  3. I don't see that Private Prisons and Rehabilitation of recidivists are mutually exclusive provided that prison board members stop being shortsighted about it and direct their lobbying efforts towards getting the various states and the federal government to enforce laws already on the books rather than expanding the reasons for incarceration. Further the government could incentivize the private prison groups to direct efforts towards rehabilitation which as major corporations they are in a considerable position to provide opportunities to prisoners upon their release either in their own company or through deals with other companies that they interact with. Basically there is a middle ground to be found between minimizing taxpayer cost of incarcerating criminals, maximizing corporate profits, and rehabilitating citizens so that they become productive members of society if only those with the ability to affect change could look beyond the short term.

  4. Prior to the use of private prisons, the purposes of incarceration were to protect the public from dangerous offenders, as a punishment for their crimes, and in cases of lower level crimes, rehabilitation to prevent recidivism. The dependency of private prisons are closely tied to the increasing population in the 80's from the war on drugs. Managing the number of prisoners became unsustainable. This is a clear example of our government being short-sighted when Reagan began the war. Once "in the system", offenders are often kept in the cycle because of the requirement to report your felony on job applications as one example. Even if one would chose to further their education, many are disqualified from receiving financial aid for school or food stamps because of their conviction. Our focus needs to get back to rehabilitation. Unfortunately, I do not see this happening because many on the right-leaning will claim they are being rewarded for bad behavior which leads me to the conclusion that a change in perspective needs to come from a societal/cultural shift.
    There are some things that should not be permitted to become a corporation in the first place and I believe prisons should be one. This designation gives the entity many more protections that they would not otherwise have like the liability shield, corporate tax benefits and a litany of case law protecting corporations from how they conduct their business (business judgement rule).