Private prison stocks collapse after Justice Department promises to phase them out

The Justice Department on Thursday announced that it will end the use of private prisons, which currently house more than 22,000 federal prisoners, or about 12 percent of the total federal prison population.

These prisons had become increasingly controversial in the past several years. A DOJ Inspector General's report recently found that these prisons were on average less safe and secure than government-run prisons. Mother Jones magazine recently published a searing, 35,000-word expose on abuses at one private prison in Louisiana.

Criminal justice reformers also raised concerns that private prisons have a profit motive to put more people behind bars. The companies that own these prisons, like the Corrections Corporation of America (CCA)and the GEO Group, stand to make more money if the prison population grows. Many private prison contracts mandate a minimum occupancy rate -- often 90 or even 100 percent. In some cases, the government must pay for 100-percent capacity regardless of how many beds are filled.

https://www.washingtonpost.com/news/wonk/wp/2016/08/18/private-prison-stocks-collapse-after-justice-department-promises-to-phase-them-out/

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