Justice Dept. to end use of privately run prisons

"They simply do not provide the same level of correctional services, programmes and resources; they do not save substantially on costs", Yates wrote.

Yates also noted that there is no substantial cost savings for taxpayers and argues education and rehabilitation programs are better served by the Federal Bureau of Prisons.

The change in federal policy comes at a time when there are 12 percent fewer federal prisoners - a total of 197,000 at the end of 2015.

WASHINGTON (AP) — The Obama administration announced Thursday it will 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.

Schwarz said the Justice Department isn't the only government agency to employ private prisons.

The federal prison population increased by nearly 800 percent between 1980 and 2013, often at a far faster rate than the Bureau of Prisons could accommodate in their own facilities.

She wrote that the bureau should refuse to renew or should "substantially reduce" the scope of contracts with private prison companies as they expire.

The office's recommendations include an enhancement of the BOP's oversight checklist and increased assurance that the inmates housed in these private facilities receive proper health and correctional services.

The private prison system has faced substantial scrutiny as of late.

Thirteen private prison contracts will not be renewed over the coming five years.

A 2015 report from the Center for American Progress found that a year ago, 62 percent of all beds in DHS facilities are under the control of private companies.

Geo Group Inc shares fell about 28 percent while Corrections Corp of America shares sank about 20 percent. Both get about half their revenue from the federal government.

GEO said in an e-mail to USA TODAY that although the company was disappointed by the Department of Justice's memo, "the impact of this decision is not imminent".

The federal government came to rely on private prisons in the 1990s as state institutions became overcrowded. Many are Mexicans incarcerated for immigration violations.

Though it's unclear how long it will take the government to cut off private prisons entirely, investors evidently weren't waiting around to find out. Amnesty International and the ACLU of Texas, on Thursday, urged states to follow suit. Some states, such as Kentucky, already have.

"The individuals held at Crossroads are federal prisoners who are pending trial, or those who are post-sentencing and pending assignment by the Bureau of Prisons to a federal facility", Cotter says. Our focus should be on keeping people out of jail and making sure they stay out when they are released.