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Few profited more immediately from Donald Trump’s election than the private-prison industry. On Nov. 9, the day after Mr. Trump won, the Corrections Corporation of America (now CoreCivic), the nation’s biggest operator of private prisons, saw its stock price jump 43 percent; its leading competitor, the GEO Group, rose 21 percent. Stocks in those companies are up more than 100 percent since Election Day.
There was good reason for the optimism. During the campaign, Mr. Trump spun tales of crime-wracked cities and uncontrolled violence that, even though mostly divorced from reality, appealed to public fears. He also called the nation’s prison system “a disaster” and said: “I do think we can do a lot of privatizations and private prisons. It seems to work a lot better.” The industry responded by giving hundreds of thousands of dollars in support of Mr. Trump’s candidacy.
The Trump administration's plan to reconsider privately run prisons faces a web of complications amid litigation and allegations the industry cuts corners at the expense of security.
Last month, Attorney General Jeff Sessions rescinded an Obama-era memo directing the Bureau of Prisons to start phasing out the use of private prisons.
At present, no company running a prison would want to see it gradually empty, because its ability to make money would be drastically reduced, not having quite so many prisoners to use as cash cows.
An analysis of private prison contracts from across the United States reveals that state and local governments commonly enter into agreements that require them to keep prisons filled or pay for unused, empty beds.