GEO Group: Sally Yates’ Decision To Stop Private Prison Use Was Based On A ‘Misrepresentation’

Courtesy of Benzinga.

Shares of private prison operators The GEO Group Inc (NYSE: GEO) and Corecivic Inc (NYSE: CXW) continued their rally after Attorney General Jeff Sessions reversed the Obama-era Department of Justice efforts to reduce use of private prisons.

Private Prisons And Politics

“We believe that the decision made last August [by Deputy Attorney General Sally Yates] was based on a misrepresentation of the report issued by the Department of Justice, Office of Inspector General,” Pablo Paez, GEO Group’s vice president, corporate relations, told Benzinga.

Paez pointed to the OIG report that showed that privately prisons are at least as equally safe, secure and humane as publicly run facilities, and often more so.

Related Link: Homeland Security Reportedly Needs More Beds For Immigrant Detainees In Big Windfall For Private Prisons

The Case For Privately Operated Facilities

Furthermore, the executive said the OIG found that privately operated facilities experienced lower rates of inmate deaths, lower rates of guilty findings of inmate on inmate sexual assault, lower rates of allegations of staff against inmate sexual assault, lower rates of positive drug tests, and lower rates of inmate grievances.

The Experts Weigh In

In a note earlier this week, Deutsche Bank analysts said they believe the Trump administration’s focus on immigration would benefit the private prison industry. The brokerage prefers CoreCivic Over GEO Group is due to the higher exposure of the former (28 percent compared to 23 percent for the latter) to ICE.

Shares of CoreCivic closed Thursday’s trading at $34 and GEO at $47.37. In the pre-market hours Friday, CoreCivic shares were up 1.35 percent to $34.46 and GEO gained 1.90 percent to $48.27.

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