WASHINGTON (Reuters) — Department of Homeland Security Secretary Jeh Johnson announced on Monday that he directed his advisory council to evaluate whether the agency should continue to contract with private prisons, news that hit shares of private prison operators.
Immigration and Customs Enforcement (ICE), a division of DHS, currently uses private prison groups like Corrections Corp of America and The GEO Group to run some detention facilities for migrants, including the Northwest Detention Center in Tacoma.
Corrections Corp of America’s stock slid 9.4 percent and The GEO Group’s stock fell 6 percent immediately after news of the review broke.
The announcement followed the U.S. Justice Department’s decision to phase out the Bureau of Prison’s contracts with private prisons on Aug. 18.
Johnson said he directed DHS’s Homeland Security Advisory Council on Friday “to evaluate whether the immigration detention operations conducted by Immigration and Customs Enforcement should move in the same direction” as the Bureau of Prisons.
Corrections Corp of America gained $689 million from ICE contracts since, 23 percent of its total revenue from federal contracts, according to the website SmartProcure that tracks government contracts. The company currently manages a facility for Central American women and children in Dilley, Texas.
The GEO Group has earned $1.18 billion from contracts with ICE since 2008. About 60 percent of GEO Group’s total revenue come from federal contracts, according SmartProcure data.
Both companies also contract with state and local prison systems.
The GEO Group said in a statement that it welcomed the review by DHS.
“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 could not immediately be reached for comment.
(Reporting by Julia Edwards, additional reporting by Mica Rosenberg; Editing by Cynthia Osterman and David Gregorio; Additional editing by The Seattle Globalist)