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DOJ Reverses Obama-Era Decision To Phase Out Private Prisons

Another day, another reversal of a legacy Obama policy.

Moments ago, US Attorney General Jeff Sessions reversed an Obama-era memo to phase out the use of private prisons, signalling his support for federal use of such facilities and advising that the Bureau of Prisons will “return to its previous approach to the use of private prisons.”

Sessions issued a new memo Thursday replacing one issued last August by Sally Yates, the deputy attorney general at the time, in which he said the Obama decision “impaired” the ability to meet the needs of the correctional system.

That Yates memo told the Bureau of Prisons to begin reducing and ultimately end its use of privately run prisons. She said the facilities were less well run than those managed by the Bureau of Prisons, and were less necessary given declines in the overall prison population.

But Sessions says in his memo Thursday that Yates’ directive contradicted longstanding Justice Department policy and “impaired the Bureau’s ability to meet the future needs of the federal correctional system.”

In light of Trump’s aggressive push to round up as many as 11 million illegal aliens currently residing in the US, we can venture the reason behind this expansion of US incarceration facilities.

Meanwhile, the market reaction was quick, with the private prison REITs jumping following the DOJ announcement. Among individual stocks, CoreCivic rose 2.9% post-market while GEO Group was up 0.7%.

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