What happened Shares of prison operator CoreCivic (NYSE: CXW) fell as much as 13% on Feb. 26. The primary cause appears to be a business update provided by the real estate investment trust (REIT) after the market closed on Feb. 25. It wasn't good news, but there are bigger implications to consider here. So what The specific news that caused investors to push CoreCivic's stock lower was that it entered into a 90-day extension with the U.S. Marshals Service for its over 2,000-bed Northeast Ohio Correctional Center. After the 90-day extension is up, however, the REIT does not expect further renewals of the contract. In other words, it is going to have an empty facility. Image source: Getty Images. That is, obviously, bad news. However there's a bigger issue here. The new administration in Washington D.C. has specifically told the Department of Justice to stop working with privately operated criminal detention facilities. CoreCivic's role in the prison space has always been subject to politics, and now the political winds are blowing against its basic business model. One property isn't going to make or break the REIT, but assuming this is a sign of things to come, it makes sense that investors were spooked by the news. Now what Working for/with the U.S. government is often viewed as a good thing, given the inherent reliability of the customer when it comes to payment. However, dealing with Uncle Sam also comes with risks, since politics can turn a tailwind into a headwind very quickly. Notably, peer The GEO Group (NYSE: GEO) has also lost government contracts in recent months. This isn't to suggest that CoreCivic and The GEO Group are bad companies, only that they are currently facing a shift in the way they are viewed by one of their largest customers. Investors need to take that into consideration given that it is already having an impact on their businesses. 10 stocks we like better than CoreCivic, Inc.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and CoreCivic, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of February 24, 2021 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source