Supermaxing prisons protected by minimum security
GEO•Political and legal risks remain
The activity links to a president fixated on detaining and expelling immigrants. Because it's hurting the economy, his successors are likely to curb the extraordinary aggression. Prison operators are also attracting more unwanted attention. Immigrant fatalities in GEO’s Newark lockup prompted New Jersey to open a civil rights investigation and to sue the company for blocking state health inspectors. After Kansas lawmakers fought to impose restrictions on one location, CoreCivic sold it to the U.S. government.
Alleged mistreatment of incarcerated immigrants has revived widespread that amplify the risks for GEO and CoreCivic. Both say they prioritize prisoner well-being. Under President Barack Obama, the Justice Department its use of privately operated facilities. One 2016 found that outsourcing detention costs less, but the administration argued it is neither safer nor cheaper than federally managed facilities. With both enterprises already trading at premiums to their 10-year average forward EBITDA multiples, shareholders are already sitting in minimum-security positions.
