New prisons = big bucks

By Paul Tharp,
New York Post,
October 4, 2001

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 Australia by converting military bases," said MacDonald.

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.

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.

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.

Billion$ for "war on terror"

Globe & Mail, Oct. 27, 2001
The Canadian government expects to spend $1 billion on the "war on terrorism" this year alone. Of this amount $750 million will go to spending on the military and $250 million on other 'security' measures. In following years, it is expected that the cost will be $3 billion a year.

Record military deal

Globe and Mail, Oct. 27, 2001
In the biggest whopper of all: Lockheed Martin Corporation has been granted a $200 billion plus contract to build more than 3,000 supersonic, stealth warplanes.