The administration of US President Barack Obama on Thursday announced it would phase out its use of some private prisons, affecting thousands of federal inmates and immediately sending shares of the two publicly traded prison operators plunging.
In a memorandum to the US Federal Bureau of Prisons, US Deputy Attorney General Sally Yates told it to start reducing “and ultimately ending” the US Department of Justice’s use of private prisons.
The announcement follows a recent department audit that found that the private facilities have more safety and security problems than government-run ones.
The Obama administration says the declining federal prison population justifies the decision to eventually close privately run prisons.
The federal prison population — at 193,299 inmates — has been dropping due to changes in federal sentencing policies over the past three years.
Private prisons hold about 22,100 of the inmates, or 12 percent of the total population, the justice department said.
The policy change does not cover private prisons used by US Immigration and Customs Enforcement, which hold up to 34,000 immigrants awaiting deportation.
“Private prisons served an important role during a difficult period, but time has shown that they compare poorly to our own bureau facilities,” Yates wrote in a memorandum to the acting director of the bureau.
As private prison contracts come to an end, the bureau is not to renew contracts or it should at least “substantially” reduce its scope, Yates wrote.
She did not specify a timeline for when all federal inmates would be in government-owned facilities.
US Democratic presidential candidate Hillary Rodham Clinton has said the US should move away from using private facilities to house inmates.
“Glad to see that the Justice Department is ending the use of private prisons. This is the right step forward,” she said on Twitter.
The Clinton campaign has said it no longer accepts contributions from private prison interests, and if it receives such a contribution, it will donate that money to charity.
The private prison industry is a major contributor to US Republican political campaigns, particularly in recent years.
Republican presidential candidate Donald Trump has said he supports the use of private prisons.
The private prisons on the chopping block are operated by three private companies — Corrections Corp of America, GEO Group and Management and Training Corp.
Management and Training Corp and Corrections Corp of America issued statements saying they were disappointed with the decision.
They also said they disagreed with the conclusions of an inspector general’s audit that preceded the department’s decision.
The US federal government started to rely on private prisons in the late 1990s due to overcrowding. Many of the federal prison inmates held in private facilities are foreign nationals who are being held on immigration offenses, the audit said.
Immigration and human rights advocates have long complained about the conditions in privately run prisons.
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