Trump is reversing Biden’s order that eliminated Justice Department contracts with private prisons

President Trump reversed a key Biden administration criminal justice policy on Monday, opening the possibility that more people in federal custody could be sent to private prisons. Biden’s executive order – one of his first – had directed the Justice Department not to renew contracts with private prison companies. In one of his first moves as president, Trump — as part of a series of rollbacks from Biden-era policies — repealed Executive Order 14006, which had eliminated Justice Department contracts with “privately operated prisons.”

This about-face from the Trump administration is no surprise, and in fact the two largest companies that manage prisons and detention centers – GEO Group and CoreCivic – expected it. In fact, the company’s CEO and founder, George Zoley, said at GEO Group’s third-quarter investor call the day after the 2024 presidential election, “We kind of get the feeling from President-elect Trump’s comments that he’s going to undo everything.” Biden executive orders on day one.” Another sign of an industry-friendly administration: Trump’s nominee for attorney general, Pam Bondi, championed GEO Group in her role at a Washington-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 relying on private prisons in the 1980s to house incarcerated people with special needs and undocumented people sentenced to federal prisons. When Biden took office, the Federal Bureau of Prisons housed about 14,000 people in privately managed facilities. Under Biden’s order, the office terminated all of its contracts with privately managed prisons and moved people incarcerated in private prisons to other office facilities.

The reversal also allows for new contracts between private prison companies and the US Marshals Service, which, despite Biden’s order to end that relationship, still uses private industry to house a significant portion of the more than 60,000 people under its supervision. This end to the 2021 Biden executive order is due in part to intergovernmental service agreements, where these companies contract with counties and they in turn contract with the Marshals Service. At the time of Biden’s order, the agency expressed concerns about the order, fearing it would move this population further from courthouses, increasing the time and money spent on transportation to and from court.

Importantly, Trump’s about-face will not affect contracts the federal government has with for-profit companies to operate 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 detained undocumented individuals in a network of public and private facilities. Neither Biden nor President Barack Obama has ever directed DHS to deviate from such contracts. However, during the Obama administration, DHS Secretary Jeh Johnson directed the agency to review the use of private companies to manage immigration detention centers and to “review our current policies and practices regarding the use of private immigration detention centers and to evaluate whether this practice is being applied.” “should be eliminated.”

The resulting report suggested ways to improve oversight of these facilities, but did not specify that DHS’s contractual relationship with private companies should end. As of July 2023, more than 90 percent of detained immigrants are housed in facilities owned or managed by for-profit companies. There are currently nearly 40,000 people detained in immigration detention centers in the United States. ICE currently funds 41,000 detention beds.

CoreCivic and Geo Group’s most significant federal contracts are with ICE, which is not affected by the repeal of Biden’s executive order. In 2023, ICE contracts accounted for 30 percent of CoreCivic’s revenue, the Marshals Service accounted for 21 percent, and the Bureau of Prisons accounted for 2 percent. That same year, ICE accounted for 43 percent of GEO Group’s revenue, the Marshals Service accounted for 16 percent, and the Bureau of Prisons accounted for 3 percent.

The reversal also will not affect state and county contracts with these companies, which also represent a significant source of revenue for the companies.

In the wake of Trump’s reversal of Biden’s order, it is possible that the Bureau of Prisons will seek to transfer some of its population back to private prisons. And given how difficult it has been for the Marshals Service to unwind its contracts, it will likely soon sign new contracts with the private companies as well. Given that President Trump has promised mass deportations, for-profit companies are likely to increase their revenue the most through ICE contracts to transport and detain undocumented people.