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Justice Department Says 'No' To Private Prisons, Bad Thing For Florida Company

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The Justice Department has already started to phase out its use of private prisons.

Private prisons are out for federal inmates, which is bad news for the Boca Raton-based GEO Group.

A memo released Thursday from the U.S. Justice Department said it will be phasing out the use of privately operated prisons, including ones operated by the GEO Group, as soon as possible. Since the announcement, the publicly traded private prison company has seen it’s stocks plummet almost 40 percent by the closing bell.

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Credit Wilson Sayre

GEO Group is one of the largest private prison companies in the country and has the largest number of federal offenders in its facilities—approximately 11,540 people. The company has about 87,000 beds around the country.

Deputy Attorney General Sally Yates wrote in the Justice Department’s memo that private facilities fall short of federal facilities in their services, programs, resources as well as safety and security.

Of the seven facilities GEO Group operates for the Federal Bureau of Prisons, none are located in Florida. However, the company does operate three facilities in Florida: two for the state and one for U.S. Immigration and Customs Enforcement (ICE).

ICE is not bound by the Justice Department’s memos and it’s unclear if it will continue its relationship with private prisons. See part of ICE’s statement released Thursday afternoon, below.

"ICE detainees are housed in a variety of facilities across the United States, including but not limited to ICE-owned-and-operated facilities; local, county or state facilities contracted through Intergovernmental Service Agreements, and contractor-owned-and-operated facilities. ICE uses these various models to meet the agency’s detention needs while protecting taxpayer resources ... ICE provides several levels of oversight in order to ensure that detainees in ICE custody reside in safe, secure and humane environments and under appropriate conditions of confinement. Oversight is provided by on-site Detention Service Managers employed by ICE, ICE Enforcement and Removal Operations’ Detention Standards Compliance Unit, ICE Office of Detention Oversight, and the DHS Office of Civil Rights and Civil Liberties, all of whom have open access to ICE detention facilities."

According to an ICE official, The Office of Detention Oversight is responsible for making sure detention facilities are up to standards. You can find their reporting online.

Late Thursday afternoon, GEO Group released this statement about its relationship with the U.S. Bureau of Prisons (BOP).

"We've had a long standing private-public partnership with the BOP that dates back to the 1990s.  At the federal level, our facilities have a proven track record of providing cost-effective, high quality services for those entrusted to our care. While our company was disappointed by today’s DOJ announcement, the impact of this decision on GEO is not imminent. As acknowledged in the announcement, the BOP will continue, on a case-by-case basis, to determine whether to extend contracts at the end of their contract period. Notwithstanding today’s announcement, we will continue to work with the BOP, as well as all of our government partners, in order to ensure safe and secure operations at all of our facilities. Additionally, we will continue its efforts to provide industry-leading offender rehabilitation programs and reentry services with the objective of reducing recidivism and ensuring individuals successfully transition back into local communities. Our company provides high-quality, diversified services across all segments of the correctional and community reentry services spectrum in the United States as well as internationally."  

At the close of the Stock Exchange Thursday, GEO Group shares lost nearly half of their value during the day, over 40 percent at one point. At the end of its first quarter in 2016, about three quarters of GEO Group’s profit came from its prison business.

See locations of all federal prisons operated by private companies below. 

This post has been updated the statement from GEO Group.