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Shares in private prisons drop after DHS announces review

The Department of Homeland Security (DHS) will evaluate whether the agency should continue contracting with private corporations to run their immigrant detention facilities. According to Fortune, shares in both Corrections Corporations of America (CCA) and GEO Group both dropped after the announcement.

The evaluation of privately-run prisons comes following the Department of Justice's decision to phase out their use of private prisons. Former presidential candidate Bernie Sanders and Sen. Raul Grijalva asked DHS in a letter earlier this week to end the practice of contracting with private-prison companies.

Texas communities brace for private prison elimination

The Dept. of Justic's (DOJ) announcement to phase out private prisons has left communities in Texas, including Eden and Big Spring, worried about how it will impact their communities, reported the Standard-Times

Though the closure of the detention center would affect Eden the most, many employees at the detention center commute from surrounding areas. According to the Big Spring Economic Development page, the Big Spring Correctional Center employs about 550 people, thought it is not clear if they are commuters or live in Big Spring. 

The DOJ announcement said that privately run prisons "compare poorly" to government-run institutions. 

The Eden Detention Center has had several riots during its time of operation, including a protest over treatment of inmates in July. The Big Spring facility had a riot during 2008, which caused around $1 million in damagaes, and also unrest in 2011, when inmates attacked staff. 

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Stocks in Private Prisons Drop After DOJ announcement

After a statement released by the Dept. of Justice (DOJ) about phasing out the use of private prisons, stocks plummeted for both Corrections Corporations of America (CCA) and GEO Group, the two largest private prison corporations, reported Bloomberg

CCA dropped 35% on the day, the highest since their initial public offering in 1997. Shares in GEO Group dropped 40%, which is the largest drop in the company's history. However, both companies stock did see a slight rebound as it was found out that facilities under contract with the Bureau of Prisons only account for about 7% of the company's business. 

This decision has no affect over contracts with Immigration and Customs Enforcement (ICE), which falls under the jurisdiction of the Department of Homeland Security. Contracts with ICE accounted for 24% of revenue in 2015 for CCA.

In regards to the DOJ announcement, Issaac Boltansky, an analyst at Compass Point Reseach & Trading LLC wrote, "This policy shift is clearly a negative for the publicly traded for-profit prison companies, but it is far from a death sentence". 

 

 

Five Private Prisons in Texas to Lose Contracts

Department of Justice Seal

Five private prisons in Texas will lose their contracts following the Department of Justice (DOJ) announcement to phase out the use of private prisons, according to The Texas Tribune.

 

The announcement came after the inspector general of the DOJ recently concluded in a report that federal prisons operated by private companies have greater issues with contraband and inmate discipline than those run by the Federal Bureau of Prisons. The office noted that "In recent years, disturbances in several federal contract prisons resulted in extensive property damage, bodily injury, and the death of a correctional officer."

Multiple incidents in Texas were among those driving the DOJ decision.

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Private prison companies are paid for family detention centers whether beds are filled or not

Corrections Corporations of America (CCA) will receive payment from the federal government from their 2,400-bed family detention center regardless of how many beds are filled, according to The Washington Post.

Due to the high number of migrants crossing the border from Central American countries, the Obama administration agreed to a deal with CCA in a four-year, $1 billion contract to run the South Texas Residential Facility in Dilley, Texas. Typically,  contracts between Immigration and Customs Enforcement (ICE) and private corporations have the payout based on the percentage of beds filled.

ICE spokesperson Jennifer Elzea said that the contract is “unique” in its payment because they pay "a fixed monthly fee for use of the entire facility regardless of the number of residents."

Rep. Zoe Lofgren (Calif.), the top Democrat on the House of Representatives' Immigration and Border Subcommittee, said "for the most part, what I see is a very expensive incarceration scheme. It's costly to the taxpayers and achieves almost nothing, other than trauma to already traumatized individuals."

Elzea also told The Washington Post that the Karnes County Residential Center, operated by GEO Group, is under a contract with a similar pay structure, where it will receive full payment regardless of the number of beds filled.

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CCA Could Lose Family Detention Contract

Corrections Corporation of America (CCA), the largest private prison corporation in the U.S., saw its stock prices dip as it announced to investors it may lose a contract to detain migrant families for Immigration and Customs Enforcement (ICE), reports the Huffington Post.

After revealing to investors the potential loss, the company said they "can provide no assurance that we will be awarded a new contract for family unit detention, will successfully renegotiate our existing contract with ICE, or will be able to maintain the margins we currently generate from the contract."

The contract in question is  for the South Texas Family Residential Center, more commonly known as the Dilley family detention camp. If CCA were to lose the contract, it would put a major dent in their revenues. According to their most recent annual filing, the Dilley facility generated $244.7 million for the company last year.

CCA official says Eden Prison Protest Has Ended

A CCA spokesperson said that the standoff between inmates and prison guards has been resolved, reports San Angelo Live!.  

As reported earlier, a protest at the Eden Detention Center started late in the evening of July 29th. A caller to San Angelo Live!, who identified herself only as a sister of an inmate, revealed that her brother said "that the inmates are being treated inhumanely." She went on to state that he said "they wanted to be treated with dignity and like human beings."

CCA spokesperson Steven Owen did not reveal if any of the grievances of the inmates were addressed to resolve the protest that was characterized as "passive."

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Officials Confirm Prisoner Protest at Eden Detention Center

A report of a protest at Eden Detention Center has been confirmed by Corrections Corporation of America (CCA) officials, reports San Angelo Live!

 

A CCA spokesperson said in a statement, "A group of inmates at the Eden Detention Center is refusing to leave the recreation yard and return to their housing units." This statement confirms previous reports San Angelo Live! received from various outlets, including a woman who called to say she is a sister of an inmate in the Eden Correctional Facility. She said that her brother told her that "pretty much the whole facility was protesting."

 

Personnel were seen entering the facility in full riot gear that evening around 10:10 p.m. An ambulance was also seen leaving Eden at approximately the same time. We will share

developments as they are released.

 

The Eden prison is one of the federal government’s segregated prisons for immigrants, or “Criminal Alien Requirement” (CAR) facilities. We’ve covered it since 2010, when a prisoner uprising caused a lockdown there.

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Judge extends temporary restraining order in family detention licensing lawsuit

Satsuki Ina speaks to the press before testifying at a DFPS hearing against the licensing.
In a May 13 court hearing, District Judge Karin Crump heard arguments on whether the state has authority to issue childcare licenses to the South Texas Family Residential Center in Dilley, Texas, according to a report from the Austin-American Statesman. 

Plaintiffs in the lawsuit — two detained mothers and advocacy organization Grassroots Leadership — asserted that the prison-like conditions of these family detention centers make them no place for children. Moreover, they argued that the Department of Family and Protective Services (DFPS) cannot rewrite the rules to give itself power to regulate the facilities.

Four detained mothers testified Friday that after fleeing violence in their countries, instead of finding help they now feel incarcerated. They mentioned trouble sleeping because of guards entering their rooms every half hour, being served the same meals repeatedly, and children getting sick from water that tastes like chlorine.

One mother, identified as E.G.S., fleeing sexual violence in El Salvador, told the judge that her daughter had been sexually assaulted by another detained women while at the Karnes family detention camp.

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Corrections Corporation of America just got bigger in Texas

On October 29, 2015, Corrections Corporation of America (CCA) sealed a $157.5 million deal on a major expansion with its acquistion of Avalon Correctional Services, Inc., a private community corrections company.

Now the nation's oldest and largest for-profit prison corporation will own or operate seven community correctional facilities in Texas: Austin Residential Reentry, Austin Transitional Center, Corpus Christi Transitional Center, Dallas Transitional Center, El Paso Multi-Use Facility, El Paso Transitional Center, and Fort Worth Transitional Center.

The acquistion adds 3,157 re-entry beds in Texas and is expected to boost revenue by $35-$45 million.  We'll be updating our map to note that the former Avalon facilities are now operated by CCA. 

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