The Private Prison Industry's New Criminal Justice Ventures

The Department of Justice’s sudden announcement in August that it would phase out contracts with private prison companies caused stocks of the industry’s two biggest leaders, GEO Group and the Corrections Corporation of America, to nosedive. Immediately after the DOJ decision was made public, shares for both companies fell by more than 40 percent. After only a few weeks, the two companies had collectively lost more than $2.2 billion in value.

Despite the market’s volatility, the DOJ move will only affect 13 facilities, and as the shock wears off it is becoming increasingly clear that the industry is not going to simply fade away. Private prison companies still expect to score contracts from state governments and federal agencies, including Immigrations and Customs Enforcement, which uses them to detain tens of thousands of non-citizens annually.

But beyond these traditional criminal justice enterprises, private prison companies have been diversifying their holdings portfolios to capture emerging areas of the criminal justice market.