With Donald Trump reversing Obama’s ban on the use of private prisons for federal prisoners and vowing to deport 11 million people; and Attorney General Jeff Sessions instructing prosecutors to seek long prison sentences for minor offenses, the investor community could not be more bullish on the private prison sector.
Deutsche Bank analyst Kevin McVeigh has issued strong “buy” recommendations for incarceration profiteers CoreCivic (the latest incarnation of the murdering Corrections Corporation of America) and GEO Group. In a similar report, JPMorgan Chase acknowledges that both companies are likely to attract significant liability due to suicides, murders, sexual assaults, torture, escapes and riots in their overcrowded, under-resourced gulags, but assures investors that this will be covered by the companies’ insurance policies.
The companies seemed to be aware of the windfall that Trump’s election might bring them. During the election campaign, CoreCivic donated $254,000 to the Republicans and also provided an additional $250,000 for Trump’s inaugural celebrations. The GEO Group spent even more, donating $1.1 million to the Republicans.Two former staff members of Sessions, who spent years in the Senate before becoming attorney general, took jobs in October at a lobbying firm that now represents the GEO Group.
The bets these private prison operators made on the law-and-order duo Trump and Sessions are already paying off. Under their leadership, the U.S. prison population is likely to rise again — especially in the deportation detention centers along the border to Mexico.
The Golden Age of Private Prisons
[Marc Pitzke/Der Spiegel]
(via Naked Capitalism)