Report: Justice Department Reverses Obama Order To Phase Out Private Prisons

Attorney General Jeff Sessions reversed an Obama-era memo that put in place guidelines meant to reduce, and eventually phase out, the use of private prisons, The New York Times reports.

In a memo to the acting head of the Bureau of Prisons, Sessions wrote that the Obama administration memo, written by former Deputy Attorney General Sally Yates, “changed long-standing policy and practice, and impaired the Bureau’s ability to meet the future needs of the federal correctional system.”

"Therefore, I direct the Bureau to return to its previous approach," Sessions wrote.

According to The Huffington Post, the Department of Justice currently has 12 standing contracts with private prison contracts, accounting for some 21,000 inmates around the country. In her August 2016 memo, Yates wrote that private prisons "compare poorly to our own Bureau facilities," citing findings from a 2016 report on private prisons by the Justice Department’s inspector general.

As Betsy Woodruff, a reporter for The Daily Beast, noted on Twitter, stocks in private prison companies rose following Sessions's memo. CoreCivic Inc., the largest private prison company in America, saw its stock rise 3.7% and The GEO Group gained 1.5% in late trading after the announcement, MarketWatch reports. Since President Trump's election, stock in CoreCivic is up 136.8% and The GEO Group stock has gained 98.2%.