President Trump reversed an important Biden administration criminal justice policy Monday, opening the door to more people in federal custody being sent to private prisons. The Biden executive order — one of his first — had directed the Justice Department not to renew contracts with private prison firms. In one of his first moves as president, Trump — as part of a slew of reversals of Biden-era actions — reversed Executive Order 14006, which had eliminated Justice Department contracts with “Privately Operated Criminal Detention Facilities.”
This reversal by the Trump administration is not a surprise, and it is in fact something that the two largest corporations that manage prisons and detention centers — the GEO Group and CoreCivic — expected to happen. In fact, on the GEO Group’s third quarter investor call the day after the 2024 presidential election, the company’s executive chairman and founder, George Zoley, said, “We kind of get the sense of President-elect Trump’s remarks that he will reverse all of the Biden executive orders on Day One.” Another sign of an administration friendly to the industry: Trump’s nominee for attorney general, Pam Bondi, lobbied for the GEO Group in her role with a DC-based firm.
The reversal affects contracts with the federal Bureau of Prisons, which is responsible for housing the more than 150,000 people in its custody. The bureau began to rely on private prisons in the 1980s to house incarcerated populations with specialized needs and undocumented individuals who are sentenced to federal prison. When Biden took office, about 14,000 people in the federal bureau of prisons were housed at privately managed facilities. Following Biden’s executive order, the bureau terminated all of its contracts with privately managed prisons, and it transferred people incarcerated in private prisons to other bureau facilities.
The reversal also allows for new contracts between private prison corporations and the U.S. Marshals Service, which still uses private industry to house a significant portion of the more than 60,000 people under its supervision, despite the directive from Biden to terminate this relationship. This end run around the 2021 Biden executive order is partly due to intergovernmental services agreements where these corporations’ contract with counties and the counties then in turn contract with the Marshals Service. At the time of Biden’s directive, the agency raised concerns about the order out of fears this population would be moved further from courthouses, increasing the time and money needed to transporting them to and from court.
Importantly, Trump’s reversal does not impact contracts the federal government has with for-profit firms to run immigrant detention centers. U.S. Immigration and Customs Enforcement is an agency of the U.S. Department of Homeland Security, and ICE is responsible for housing undocumented individuals they detain in a network of public and private facilities. Neither Biden nor President Barack Obama ever directed DHS to move away from such contracts. However, during the Obama administration, DHS Secretary Jeh Johnson did direct the agency to review its use of private sector firms to manage immigration detention centers and “review our current policy and practices concerning the use of private immigration detention and evaluate whether this practice should be eliminated.”
The resulting report suggested ways to improve oversight of these facilities but did not determine that DHS’s contracting relationship with private firms should end. As of July 2023, more than 90 percent of those in immigrant detention are housed in facilities owned or managed by for-profit companies. Currently, there are almost 40,000 people detained in immigrant detention centers in the United States. ICE is currently funded for 41,000 detention beds.
CoreCivic and the Geo Group’s most significant federal contracts are with ICE, which is not impacted by the reversal of Biden’s executive order. In 2023, ICE contracts accounted for 30 percent of CoreCivic’s revenue, the Marshals Service 21 percent, and the Bureau of Prisons 2 percent. For the same year, ICE accounted for 43 percent of the GEO Group’s revenues, the Marshals Service 16 percent, and the Bureau of Prisons 3 percent.
The reversal also doesn’t impact state and county contracts with these corporations, which is a significant revenue generator for the firms as well.
In the wake of Trump’s reversal of Biden’s executive order, it is possible that the Bureau of Prisons will look to transfer some of its population back to private prisons. And given how difficult it was for the Marshals Service to roll back its contracts, it will likely sign new ones with the private corporations soon as well. Nevertheless, given that President Trump has promised mass deportations, for-profit firms will likely see their revenue grow the most from ICE contracts for transportation and detention of undocumented people.
