Last Thursday, private prison stocks dropped like a rock when the Department of Justice announced that it would be phasing out its use of for-profit detention facilities. If you were an investor who had no ethical qualms about profiting from an industry that’s been accused of perpetrating a number of human rights abuses, it would have been a good time to buy. It turns out that reports of the industry’s imminent death have been greatly exaggerated.
Experts who track the business tell The Nation that as mass-incarceration reform has become a bipartisan issue, private prison companies large and small have seen the writing on the wall, and are aggressively moving into alternatives to imprisonment. In fact, they say, the very same companies that have traditionally lobbied hard for tough-on-crime policies that would assure their facilities a steady flow of warm bodies are now embracing the language of criminal-justice reform as they reach out into what they see as more lucrative markets.
“These companies know what they’re doing,” says Christopher Petrella, a lecturer at Bates College who studies the industry. “They’re agile, they follow market trends, and they know where the growth is.” According to Petrella, two of the biggest companies—GEO Group and Corrections Corporation of America (CCA)—“have really pivoted to diversify their services away from traditional incarceration. They’ve both invested heavily in the past five or six years in prisoner rehabilitation services, mental health centers, residential reentry programs and monitoring technologies for supervised release.” These are all areas that are expected to grow as efforts to reduce the prison population gain traction. Until eight or nine years ago, these companies could have relied on partisan gridlock to maintain the status quo, but as conservatives have come to embrace the issue, their future as jailers has started to look less bright.
“It’s really clear looking at mergers and acquisitions that this is where the big companies like CCA and GEO are headed,” says Caroline Isaacs, program director of the American Friends Service Committee’s Tucson office, and the author of several reports on the industry. “And then there are a whole host of other companies that are sort of popping up to fill in the field.”
In its latest presentation to investors, CCA says, “residential reentry facilities provide offenders with the tools and skills necessary to successfully return to the communities without recidivating,” and brags that “in less than three years, CCA has established the second-largest residential-reentry platform in the United States and has a robust acquisition pipeline of additional [residential reentry] operators.” The company now “owns or controls 24 residential reentry properties, representing 4,970 beds.”