Trump Administration Reinstates Private Prison Contracts
In a significant policy reversal, President Trump has undone a key move from the Biden administration concerning federal incarceration. The reversal allows the federal government to renew its use of private prisons, a practice previously halted by an executive order from President Biden. Biden’s executive order had instructed the Department of Justice to cease renewing contracts with private prison operators, aiming to phase out their use in federal incarceration.
The decision to revert back to private prison contracts aligns with expectations from industry giants like the GEO Group and CoreCivic. Following the 2024 presidential election, George Zoley, executive chairman of the GEO Group, expressed confidence in Trump’s intentions, saying, “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.” Furthermore, Trump’s attorney general nominee, Pam Bondi, has a history of lobbying for the GEO Group, indicating a potential industry-friendly climate.
This policy change primarily impacts the federal Bureau of Prisons, which manages over 150,000 individuals in its facilities. Previously, the Bureau had used private prisons since the 1980s to accommodate inmates with specific needs and undocumented individuals. During Biden’s term, approximately 14,000 inmates were transferred from private to government facilities following the executive order.
In addition to the Bureau of Prisons, the policy reversal reinstates the potential for new contracts between private prison companies and the U.S. Marshals Service. Despite Biden’s directive to end such collaborations, the Marshals Service had flagged concerns about logistical challenges, such as increased transportation costs and extended travel times for detainees to and from court. Currently, the Marshals Service supervises more than 60,000 people, with a significant portion housed in private facilities.
The change does not affect contracts with private organizations for immigrant detention centers. U.S. Immigration and Customs Enforcement (ICE) remains heavily reliant on private facilities, with over 90% of detained immigrants housed in such centers. As of July 2023, ICE’s network includes nearly 40,000 detainees, with for-profit companies holding substantial contracts for their detention.
CoreCivic and the GEO Group, the two largest private prison operators, are significantly invested in ICE contracts, which accounted for substantial portions of their revenues in 2023. CoreCivic derived 30% of its revenue from ICE, while the GEO Group’s ICE contracts made up 43% of their earnings. Both companies also maintain contracts with the Marshals Service and the Bureau of Prisons, though these represent smaller revenue segments.
The reintroduction of private prison contracts could prompt the Bureau of Prisons to revert some individuals back to these facilities. Similarly, the Marshals Service may expedite new agreements with private operators. Notably, with Trump advocating for increased deportations, for-profit firms may see further revenue growth through ICE contracts for the detention and transport of undocumented immigrants.
