Democratic presidential nominee Hillary Clinton's assertion that she wants to champion the closing of private prisons nationwide has had an immediate impact on the stock market.
On Sept. 27, stocks for two of the largest publicly traded jail owners, Corrections Corp. of America (CXW) and GEO Group (GEO) saw their stock take a steep plunge, CNN Money reports.
Stocks in CXW suffered an 8 percent drop in just one day while GEO’s shares dipped by 4 percent.
The steep drop was a direct result of the Sept. 26 presidential debate, when Clinton voiced her support of rooting out private prisons across the country.
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“I’m glad that we’re ending private prisons in the federal system,” Clinton said. “I want to see them ended in the state system. You shouldn’t have a profit motivation to fill prison cells with young Americans.”
On Aug. 18, Deputy Attorney General Sally Yates announced that the Department of Justice would end its relationship with private prison companies, The Washington Post reports.
In a memo to DOJ officials, Yates gave the orders to not renew contracts with private prisons after they expire.
“They simply do not provide the same level of correctional services, programs, and resources; they do not save substantially on costs; and … they do not maintain the same level of safety and security,” Yates wrote.
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The announcement resulted in Moody’s downgrading the credit ratings of CXW and GEO. Both publicly traded jail owners are expected to suffer profit losses in 2017.
Clinton had previously voiced her opposition to private prisons in October 2015, when she tweeted out, “We need to end private prisons. Protecting public safety should never be outsourced or left to unaccountable corporations.”
The Democratic nominee’s stance against private prisons during the debate was well-received by a focus group of undecided Pennsylvania voters conducted by pollster Frank Luntz, The Daily Beast reports.
The 27 participants expressed huge enthusiasm for Clinton when she was discussing the issue, citing that it hits close to home. In 2011, Pennsylvania residents were outraged when it was discovered that a state judge had been passing harsh sentences on children because he was bribed by a private prison company owner.
Pennsylvania is a key swing state that could help decide the November election.
On Sept. 27, a GEO spokesperson issued a statement stressing, “We are and have always been a partner with the government as well as the communities we serve … our profit motivation has not and will never compromise what we believe.”
CXW spokesman Steven Owen dismissed Clinton’s remarks, stating, “This is a political season, and we all recognize that rhetoric can get heated.”