• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia
Leadershipprivate prisons

Shares of Private Prison Operators Slide After DHS Orders a Review

By
Reuters
Reuters
and
Michelle Toh
Michelle Toh
Down Arrow Button Icon
By
Reuters
Reuters
and
Michelle Toh
Michelle Toh
Down Arrow Button Icon
August 30, 2016, 4:52 AM ET
Corrections Corp. Shows Crime Pays As States Turn Jails Private
Signage stands outside the La Palma Correctional Center in Eloy, Arizona, U.S., on Tuesday, May 11, 2010. La Palma, which houses about 2,900 convicts from California, is one of 65 facilities operated by Corrections Corp. of America, the largest private-prison operator in the U.S. Photographer: Joshua Lott/Bloomberg via Getty ImagesJoshua Lott — Bloomberg via Getty Images

The U.S. Department of Homeland Security will study whether to discontinue using privately run detention centers, which the Justice Department recently called unsafe, for migrants and shares of private prison operators fell on Monday after the news.

Department Secretary Jeh Johnson said he directed his advisory council to evaluate whether the agency should continue to contract with private prison operators and make a recommendation by Nov. 30. Advocates for immigrants have accused the companies of withholding proper mental health and medical care from detainees to boost profits.

Immigration and Customs Enforcement (ICE), a division of DHS, currently uses detention facilities run by Corrections Corp of America and The GEO Group.

Corrections Corp of America’s stock slid 9.4% and The GEO Group’s stock fell 6% immediately after news of the review. Both stocks were rebounding later in the afternoon.

See also: How American Prisons Became a Bizarre Tourist Mecca

Corrections Corp of America earned $689 million from ICE contracts since 2008, 12% of its revenue from state and federal contracts over that time, according to the website SmartProcure which tracks government contracts. The company currently manages a facility for Central American women and children in Dilley, Texas.

The GEO Group runs a similar facility in Karnes City, Texas and has earned $1.18 billion from contracts with ICE since 2008, about 35% of its total revenue from government contracts, according SmartProcure data.

The GEO Group said in a statement, “GEO’s facilities under contract with ICE are highly rated and provide high-quality, cost-effective services in safe, secure, and humane residential environments pursuant to strict contractual requirements and the federal government’s national standards,” the statement said.

Corrections Corp of America spokesman Steve Owen said, “We’re proud of the quality and value of the services we provide and look forward to sharing that information.”

See also: Private Prison Operators Shrug Off U.S. Policy Shift

Immigration advocates and members of Congress have ramped up pressure on DHS to end its contracts with the private prison companies since the Justice Department announced on Aug. 18 it would do so.

That was prompted by an inspector general’s report that criticized the safety and effectiveness of private prisons.

“Rather than wait for a review and a report from a committee, the president should ensure that the phase-out of private prisons … is extended to DHS operations immediately,” said Greg Chen, advocacy director at the American Immigration Lawyers Association.

Senator Bernie Sanders, former Democratic presidential candidate, and Democratic Representative Raul Grijalva asked DHS in a letter last week to end the practice.

See also: Deloitte Urges the UK Not to Shut Out Skilled Migrants After Brexit

A Department of Homeland Security official told Reuters on Aug. 19 that ICE needed private prison companies because they offer flexibility to quickly build facilities and adjust detention space as migration flows fluctuate.

Both companies also contract with state and local prison systems, which make up about half of their revenue.

For more on prisons, watch Fortune’s video:

A Reuters survey of 10 states with the largest contracts with private prison companies, including California and Texas, showed none had immediate plans to drop their contracts.

About the Authors
By Reuters
See full bioRight Arrow Button Icon
By Michelle Toh
See full bioRight Arrow Button Icon

Latest in Leadership

Sheryl Sandberg points with one hand as he sits in front of a light blue background during an interview.
SuccessWomen
Sheryl Sandberg’s Lean In finds more women leaning out for the first time since the promotion survey began a decade ago: ‘Major moment of backsliding’
By Sasha RogelbergDecember 10, 2025
46 minutes ago
AIBrainstorm AI
Young people are ‘growing up fluent in AI’ and that’s helping them stand apart from their older peers, says Gen Z founder Kiara Nirghin
By Angelica AngDecember 10, 2025
1 hour ago
C-SuiteLeadership Next
Circle CEO Jeremy Allaire worked his way up from selling baseball cards as a kid to having one of the most influential IPOs of the year
By Fortune EditorsDecember 10, 2025
1 hour ago
Doug McMillon, president and chief executive officer of Wal-Mart Stores
SuccessCareers
Walmart’s retiring CEO Doug McMillon spent 40 years climbing the ranks—he reveals the one thing he’s most looking forward to is a ‘blank calendar’
By Emma BurleighDecember 10, 2025
2 hours ago
Photo of MacKenzie Scott
SuccessMacKenzie Scott
MacKenzie Scott’s $7 billion year: Philanthropist credits dentist and college roommate as inspirations for monumental giving
By Sydney LakeDecember 10, 2025
2 hours ago
David Zaslav wearing sunglasses
SuccessWealth
Netflix–Paramount bidding wars are pushing Warner Bros CEO David Zaslav toward billionaire status—he has one rule for success: ‘Never be outworked’
By Preston ForeDecember 10, 2025
2 hours ago

Most Popular

placeholder alt text
Economy
‘Fodder for a recession’: Top economist Mark Zandi warns about so many Americans ‘already living on the financial edge’ in a K-shaped economy 
By Eva RoytburgDecember 9, 2025
21 hours ago
placeholder alt text
Politics
Exclusive: U.S. businesses are getting throttled by the drop in tourism from Canada: 'I can count the number of Canadian visitors on one hand'
By Dave SmithDecember 10, 2025
6 hours ago
placeholder alt text
Banking
Jamie Dimon taps Jeff Bezos, Michael Dell, and Ford CEO Jim Farley to advise JPMorgan's $1.5 trillion national security initiative
By Nino PaoliDecember 9, 2025
22 hours ago
placeholder alt text
Uncategorized
Transforming customer support through intelligent AI operations
By Lauren ChomiukNovember 26, 2025
14 days ago
placeholder alt text
Success
When David Ellison was 13, his billionaire father Larry bought him a plane. He competed in air shows before leaving it to become a Hollywood executive
By Dave SmithDecember 9, 2025
1 day ago
placeholder alt text
Economy
The 'forever layoffs' era hits a recession trigger as corporates sack 1.1 million workers through November
By Nick Lichtenberg and Eva RoytburgDecember 9, 2025
1 day ago
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • Future 50
  • World’s Most Admired Companies
  • See All Rankings
Sections
  • Finance
  • Leadership
  • Success
  • Tech
  • Asia
  • Europe
  • Environment
  • Fortune Crypto
  • Health
  • Retail
  • Lifestyle
  • Politics
  • Newsletters
  • Magazine
  • Features
  • Commentary
  • Mpw
  • CEO Initiative
  • Conferences
  • Personal Finance
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
About Us
  • About Us
  • Editorial Calendar
  • Press Center
  • Work At Fortune
  • Diversity And Inclusion
  • Terms And Conditions
  • Site Map

© 2025 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.