- Shares of private-prison operator climb as much as 13%
- McConnell’s spokesman won’t rule out moving forward with bill
Geo Group Inc., an operator of private prisons, surged as much as 13 percent following a report that a criminal-justice overhaul bill that would have reduced federal mandatory minimum sentences was effectively dead in the U.S. Senate.
The legislation “is over,” said Senator Richard J. Durbin of Illinois, the No. 2 Democrat in the Senate, the New York Times reported Friday. The bill was hurt by division among Republicans about cutting required sentences and a surge in crime in some urban areas, which gave fuel to the arguments of opponents, the newspaper said.
Geo, a real estate investment trust with more than 100 facilities with about 87,000 beds in the U.S., Australia, South Africa and the U.K., rose 5 percent to $23.15 at 3:06 p.m. in New York. The Boca Raton, Florida-based company’s shares climbed to as high as $24.89 earlier.
Shares of both Geo and Corrections Corp. of America, the largest U.S. operator of private prisons, plunged last month following a U.S. Justice Department announcement that some federal contracts with private prisons would be phased out.
Shares of Nashville, Tennessee-based Corrections Corp. were little changed Friday.
When asked by Bloomberg about the criminal-justice reform bill on Friday, Don Stewart, a spokesman for Senate Majority Leader Mitch McConnell, declined to rule out moving forward with the legislation later this year.
“Our members are discussing that bill, but no announcements,” Stewart said.
A spokesman for Durbin, Ben Marter, said Durbin’s comments to the New York Times on the prospects for the bill were accurate, and pointed to McConnell as the person holding it up.
“We’ve got bipartisan legislation that would pass the Senate easily with Democratic and Republican support, but if you want to know why it won’t come to the Senate floor, you’ll have to ask Senator McConnell,” Marter said. “It is tied up with a bow, ready.”