- America's new wall of homeland security is creating a
big demand for cells to hold suspects and illegal aliens who might be
rounded
up.
-
- Stocks of private companies that build and operate
prisons
for governments have zoomed as high as 300 percent in anticipation of
internment
camps and new prisons.
-
- "Unfortunately, these are becoming good
investments,"
said James MacDonald, a prisons-security analyst at First Analysts
Securities.
-
- One company, Wackenhut Corp., may be able to put its
expertise to work here.
-
- "Wackenhut has had some success running the
immigrant
camps in Austraila by converting military bases," said
MacDonald.
-
- "It could be done here, too, but turning our old
military bases into internment camps would be a highly charged issue for
us," said MacDonald. "It would be too drastic."
-
- He said the half-dozen publicly traded prison companies
are in a buzz about expanding prison projects being issued by the Federal
Bureau of Prisons.
-
- The Bureau has just let out requests for bids for two
prisons to hold criminal aliens in Georgia.
-
- "It's going to be the biggest award made this year
by the Bureau, and it's generated a lot of excitement," said
MacDonald.
-
- He said the Bureau is also seeking bids early next year
for three more prisons in the Southwest deserts that can hold more than
1,500 detainees.
-
- Governments pay private prisons about $31,000 a year
to handle each jailbird - about half what a government agency spends to
run a prison on its own.
-
- Private prison investors are also jubilant about an
expected
U.S. Supreme Court ruling that would bar any inmate from suing a privately
run prison for civil rights violations.
-
- "The Bureau is expanding rapidly to free up extra
space in its system," said MacDonald.
-
- In line to get a big piece of that business is the
nation's
largest private prison company, Corrections Corp. of America. Its stock
has soared 308 percent this year, and closed yesterday at $13.98, up 30
cents in active trading.
-
- The company was on the brink of bankruptcy just months
ago, but a new management team and the sudden new business in the aftermath
of the Sept. 11 terror attacks has changed its prospects.
-
- "There's clearly a better outlook for the company
than it had a few months ago," said MacDonald.
-
- The company runs about 65 prisons around the U.S. and
Puerto Rico and handles about 61,000 prisoners, including 500 in
Leavenworth.
-
- Analysts say many security companies got a huge and
immediate
profits boost from supplying guards and new security in the aftermath of
the terror attack.
-
- "They got immediate returns, but it's going to take
a while for any new prisons to make their way into the market," said
MacDonald.
-
- Also helping the profits outlook for private prisons
is an expected rise in the crime rate due to the recession.
-
- "Crime always goes up in a bad economy," said
MacDonald. "Where's there are good times and jobs are plentiful,
people
who get out of prison can usually find work and don't have to go back to
their old ways. When the economy fails, so do the former
inmates."
-
- Federal prisons are the fastest growing in the U.S.,
rising as much as 10 percent a year. State prison populations have been
in a decline for a few years and barely will make a 1 percent rise this
year, most of it expected in the fourth quarter, said MacDonald.
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