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CoreCivic (formerly CCA)

New identity doesn't address core of Corrections Corporations challenges

Private prison company Corrections Corporation of America (CCA) has decided to rebrand itself in hope of moving away from the perception of for-profit prison company, as reported by The Street. The company would now like to be called CoreCivic.

Stock in CCA has been under pressure ever since the Department of Justice decided to phase out the use of private prisons in August. The company is hoping that the new name and diversifying their interests into real estate and treatment facilities will help the company move away from it’s negative image as a private prison company and help the company bounce back from decades of bad press.

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ICE Renews Private Contract to Run Largest Family Detention Center

According to Huffington Post, Immigration and Customs Enforcement (ICE) revised and renewed its' contract with a private company to keep operating the country's largest family detention center. 

ICE renewed the contract with Corrections Corporations of America (CCA) to run the South Texas Family Residential Center for another five years. The contract renewal comes after the Department of Justice (DOJ) announced they would phase out their use of private prisons. While this announcement did not affect immigrant detention centers, such as the South Texas Family Residential Center, it did cause the Department of Homeland Security to review whether ICE should follow through with the DOJ decision to phase out using private prison companies. 

Under the renewed contract CCA will receive less money to run the facility. However, CCA will receive payment regardless of how many beds are filled at their facility. The contract is scheduled to last until September of 2021, but ICE does have the option to cancel it with 60 days' notice.  

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CCA to cut costs amid criticisms

Corrections Corporation of America (CCA) is set to lay off staff and cut costs as criticism of private prisons continue, reported MarketWatch

On Tuesday, CCA announced a plan to cut costs at their headquarters, while Chief Executive Damon Hininger said he would forfeit $2 million worth of restricted stock that he received in February. He then went on to request the company not reward him any equity-based compensation in 2017. 

CCA shares were falling steadily in after-hours trading and shares have fallen more than 45% since the Dept. of Justice announced they would no longer be using private prisons.

CCA to cut costs amid criticisms

Corrections Corporation of America (CCA) is set to lay off staff and cut costs as criticism of private prisons continue, according to MarketWatch.

On Tuesday, CCA announced a plan to cut costs at their headquarters in Tennessee, while Chief Executive Damon Hininger said he would forfeit $2 million worth of restricted stock that he received in February. He told the company not reward him any equity-based compensation in 2017.

CCA shares were falling steadily in after-hours trading and shares have fallen more than 45% since the Dept. of Justice announced they would no longer be using private prisons in August.

The Brownsville Herald supports DHS review of private prisons

A Texas newspaper has come out in support of the Dept. of Homeland Security's (DHS) review of private prison contracts. The Brownsville Herald came out to say that they had called on Secretary Johnson and the DHS to review their private prison contracts, much like the Dept. of Justice did. The newspaper continued by saying: 

"We applaud Secretary Johnson for recognizing that failures in for-profit run prison facilities could also extend to for-profit immigration detention facilities, such as the large holding facilities in South Texas in Dilley and Karnes City.

We encourage the Homeland Security Advisory Council to investigate thoroughly all for-profit facilities operated under Immigration and Customs Enforcement to ensure they meet humanitarian standards and U.S. detention facility protocol. Charges by former immigrant detainees and numerous immigration advocacy groups that immigrant mothers in these for-profit facilities are denied access to their children, put in isolation, denied medical care or psychological help are disturbing and should not be condoned."

The paper then went on to invite the members Homeland Security Advisory Board, who will review private prison facilities and their contracts, to come to Texas to visit in person the South Texas Family Residential Center in Dilley, which is run by Corrections Corporation of America, and the Karnes County Residential Center in Karnes City run by the GEO Group.

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The McAllen Monitor supports DHS review of private prisons

A Texas newspaper’s editorial board has come out in support of the Department of Homeland Security's (DHS) review of private prison contracts. The McAllen Monitor Editorial Board has previously called on DHS Secretary Johnson and the DHS to review their private prison contracts.

The editorial board also asked DHS to do more, saying:

We applaud Secretary Johnson for recognizing that failures in for-profit run prison facilities could also extend to for-profit immigration detention facilities, such as the large holding facilities in South Texas in Dilley and Karnes City.

We encourage the Homeland Security Advisory Council to investigate thoroughly all for-profit facilities operated under Immigration and Customs Enforcement to ensure they meet humanitarian standards and U.S.. detention facility protocol. Charges by former immigrant detainees and numerous immigration advocacy groups that immigrant mothers in these for-profit facilities are denied access to their children, put in isolation, denied medical care or psychological help are disturbing and should not be condoned.


The paper urged members Homeland Security Advisory Board, who will conduct the review, to come to Texas to visit in person the South Texas Family Residential Center in Dilley, which is run by Corrections Corporation of America, and the Karnes County Residential Center in Karnes City run by the GEO Group.

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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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