Trump reverses Obama ban on private prisons

President Donald Trump's administration on Thursday reinstated the use of private prisons for federal inmates, saying commercial prison operators are needed for the correctional system's "future needs."

Trump's new attorney general, Jeff Sessions, officially rescinded the Barack Obama administration's move last August to phase out the management of prisons by private companies, which Obama's justice department had said proved to be inadequate, more dangerous and not cheaper than government-run prisons.

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Sessions said in an order that the move last year had reversed a longstanding policy at the Federal Bureau of Prisons to have private companies involved, "and impaired the bureau's ability to meet the future needs of the federal correctional system."

The Obama move had only affected a small portion of the US prison system: 13 privately run prisons housing just over 22,000 people, or about 11 per cent of the federal prison population. Most are foreign nationals, mainly Mexicans incarcerated for immigration violations.

The Trump government has promised a crackdown on crime and illegal immigration, suggesting the prisons bureau could require greater holding capacity in a short time.

The 13 prisons are run by three companies: CoreCivic (known until recently as Corrections Corporation of America), GEO Group and Management and Training Corporation.

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The announcement gave a strong after-hours boost to the stock of the two listed firms. Core Civic jumped 3.2 per cent, while GEO Group added 1.0 per cent.

The move was expected and both companies' stocks had already risen sharply after Trump's election victory on November 8.