Study of CXW and GEO
- 04/11/2021 – the US Department of Justice – via the Federal Bureau of Prisons (BOP) and the US Marshalls Service (USMS)- accounted for approximately 25% of the total revenue for GEO and CXW. Still states can still choose “who to write contracts with,”. The order does not appear to apply to similar contracts with other agencies like U.S. Immigration and Customs Enforcement (ICE). Biden might put forth a more substantive effort in the coming months. – I need to study the history how did GEO perform under Obama era
Biden’s order terminates federal private prison contracts. Here’s what that means.
President Joe Biden vowed to ultimately put an end to private prisons, but activists says the move isn’t enough to fully address mass incarcerations.
Jan. 27, 2021, 12:59 PM PST
President Joe Biden on Tuesday signed an executive order that will phase out the Department of Justice’s use of private prisons.
The action is part of the administration’s effort to address racial inequity in the country and make good on Biden’s campaign promises to Black Americans — who were integral to securing his presidential win.
The order directs the Justice Department to decline to renew contracts with privately-operated, for-profit prisons.
Still states can still choose “who to write contracts with,” Pfaff said. “In practice, this will end up being more symbolic and will have little impact on any issue of racial justice and the system. The symbolism carries the very real risk of making us blind to the nearly identical incentives of the public prison sector, and the public side is so much vaster in scope.”
Few details have been released about the order scaling back private prison use, but the initial Obama-era policy focused on about a dozen privately-run facilities. The federal Bureau of Prisons said then that approximately 195,000 people were incarcerated in the bureau’s or private-contract facilities. Today, there are nearly 152,000 people incarcerated federally, with 14,000 housed at privately-managed facilities, according to The Associated Press.
Prisons were being privatized as early as the 1800s and accelerated after the Civil War. Today, privatized prisons are a billion-dollar industry with facilities known for brutal living conditions. CoreCivic — formerly and commonly the Corrections Corporation of America — and GEO Group are two of the biggest private prison companies in the United States. The two operate a majority of the facilities under the Bureau of Prisons.
In 2019, 8.1 percent of people incarcerated in the U.S. were held in private prisons, according to the most recent data from the Bureau of Justice Statistics. The order does not appear to apply to similar contracts with other agencies like U.S. Immigration and Customs Enforcement (ICE).
With Biden in the early days of his presidency, Vitale said, he hopes Biden puts forth a more substantive effort in the coming months.
“I hope this is the beginning of the conversation and not the end of the conversation,” he said. “I don’t think this will have any impact on people who are already incarcerated, they’ll just be moved to a different facility. I’d like to see him end all federal drug crimes, commute any sentence over 20 years, and replace funding for policing with funding for community-based initiatives.”
- 04/11/2021 – Details of Biden’s EO on private prisons. “The Attorney General shall not renew Department of Justice contracts with privately operated criminal detention facilities, as consistent with applicable law.“
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
Section 1. Policy. More than two million people are currently incarcerated in the United States, including a disproportionate number of people of color. There is broad consensus that our current system of mass incarceration imposes significant costs and hardships on our society and communities and does not make us safer. To decrease incarceration levels, we must reduce profit-based incentives to incarcerate by phasing out the Federal Government’s reliance on privately operated criminal detention facilities.
We must ensure that our Nation’s incarceration and correctional systems are prioritizing rehabilitation and redemption. Incarcerated individuals should be given a fair chance to fully reintegrate into their communities, including by participating in programming tailored to earning a good living, securing affordable housing, and participating in our democracy as our fellow citizens. However, privately operated criminal detention facilities consistently underperform Federal facilities with respect to correctional services, programs, and resources. We should ensure that time in prison prepares individuals for the next chapter of their lives.
The Federal Government also has a responsibility to ensure the safe and humane treatment of those in the Federal criminal justice system. However, as the Department of Justice’s Office of Inspector General found in 2016, privately operated criminal detention facilities do not maintain the same levels of safety and security for people in the Federal criminal justice system or for correctional staff. We have a duty to provide these individuals with safe working and living conditions.
Sec. 2. Contracts with Privately Operated Criminal Detention Facilities. The Attorney General shall not renew Department of Justice contracts with privately operated criminal detention facilities, as consistent with applicable law.
Sec. 3. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
JOSEPH R. BIDEN JR.
THE WHITE HOUSE,
January 26, 2021.
- 04/07/2021 – cash crunch for CXW and GEO
Under Fire From Biden, Prison Operators Address Cash Crunch
Private prison operators are rushing to shore up their finances after increasing political pressure regarding their treatment of inmates and immigrants cast doubts over the long-term prospects of their businesses.
CoreCivic Inc. sold $450 million of bonds to refinance near-term debt, according to a person with knowledge of the matter, while Geo Group Inc. said it would suspend its quarterly dividend to prioritize debt repayment and begin a review of its corporate structure, according to a statement Wednesday.
Private prison operators are rushing to shore up their finances after increasing political pressure regarding their treatment of inmates and immigrants cast doubts over the long-term prospects of their businesses.
CoreCivic Inc. sold $450 million of bonds to refinance near-term debt, according to a person with knowledge of the matter, while Geo Group Inc. said it would suspend its quarterly dividend to prioritize debt repayment and begin a review of its corporate structure, according to a statement Wednesday.
- 04/07/2021 – need to read them
GEO Group suspends dividend to pay down debt; will evaluate corporate structure
CoreCivic: Compelling Deep Value Play With 100% Upside
- 04/07/2021 – watch out the debt issue of CXW and GEO. GEO suspend dividend to pay out debt, CXW to issue note to pay out debt. Will both of them sell assets? Should I buy more LEAPs?
Why CoreCivic Stock Fell 10% at the Open Today
The company announced plans to raise some capital, but investors were likely looking at something else today.
Both CoreCivic and The GEO Group own and operate prisons. The current administration in the White House has taken a dim view of for-profit companies running these facilities and has ordered the Department of Justice to stop using them. While that’s only a portion of the customer base for both names, the decline has already started to show in contracts with the Federal Bureau of Prisons and U.S. Marshals Service being canceled or expiring without renewal. And The GEO Group announced today that it is suspending its dividend so it can pay down debt — there’s probably a link. There is a dark cloud lingering over the for-profit prison space, and this announcement made investors just a little more worried than they were before.
So the drop in CoreCivic is most likely a spillover from the trading action in The GEO Group, which was down as much as 19% in early trading. However, CoreCivic did announce today that it will be issuing $400 million worth of bonds. The proceeds will be used to pay off some near-term maturities, effectively extending the company’s debt maturity profile. That’s a good thing, in general, though it remains to be seen what interest rate CoreCivic is going to pay to the buyers. The new debt is replacing bonds with interest rates of 5% and 4.625%. Although interest rates are still hovering near historic lows, the company’s business position is likely less desirable today than it was when it issued the debt it is replacing. Investors should pay close attention to the announcement on that front.
Now what
CoreCivic is in the middle of a transition, looking to shift from being a REIT to being a regular corporation. On top of that, it is dealing with the federal government’s changed view of for-profit prison operators. Most investors would probably be better off on the sidelines until at least one of these issues is resolved, if not both. There’s likely to be a lot of uncertainty here for a little while.
- 03/07/2021 – boarder crisis will increase the need of more prisons: “Reuters reported that Border Patrol agents arrested roughly 4,500 migrants on Wednesday alone, a number that rivals peak apprehension numbers in 2019 when former President Trump threatened to close down the border.”
Border crisis creates new risks for Biden
border agents are apprehending thousands of migrants a day, and even some Democrats have warned that the situation could develop into a full-blown crisis in the coming weeks.
Texas State Sen. Juan “Chuy” Hinojosa, a Democrat who lives in the border town of McAllen, told The Hill the influx of migrants is fast becoming a crisis and that officials there do not have the resources they need to process the migrants or to test them all for COVID-19.
He said the Biden administration’s move to allow people to remain in the country while they await their immigration proceedings — a so-called “catch and release” practice that was banned under Trump — is encouraging migrants to make the dangerous trip, despite pleas from the White House that people stay home.
“It’s gotten worse,” Hinojosa said. “I don’t think, quite frankly, the Biden administration was aware of what’s happening on the ground here, which you can understand because they’re just coming in and trying to get people up to speed with what’s happening, but I don’t think they were aware there were that many coming across. The border patrol is overwhelmed, they’re throwing their hands up because they don’t know what to do.”
The Border Patrol reported averaging about 3,000 arrests per day in January. Officials have not disclosed the total number of apprehensions in recent weeks, but Reuters reported that Border Patrol agents arrested roughly 4,500 migrants on Wednesday alone, a number that rivals peak apprehension numbers in 2019 when former President Trump threatened to close down the border.
- 02/25/2021 – crime rate will increase. One year lost of education. “one of the worst blows to the education of disadvantaged Americans in history. The result: more dropouts, less literacy and numeracy, widening race gaps, and long-term harm to some of our most marginalized youth”
School Closures Have Failed America’s Children
As many as three million children have gotten no education for nearly a year.
