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Expert Brief

Breaking Down Biden’s Order to Eliminate DOJ Private Prison Contracts

The executive order is limited and creates some unintended consequences.

Published: August 27, 2021

On the campaign trail, Joe Biden vowed to end the federal govern­ment’s use of private pris­ons, declar­ing that “the federal govern­ment should not use private facil­it­ies for any deten­tion, includ­ing deten­tion of undoc­u­mented immig­rants.” His policy plat­form also stated that his admin­is­tra­tion would tie fund­ing decisions for a new grant program to the elim­in­a­tion of private pris­ons and all forms of for-profit incar­cer­a­tion.

Given these prom­ises, it wasn’t surpris­ing when Biden issued an exec­ut­ive order in Janu­ary direct­ing the attor­ney general not to renew Justice Depart­ment contracts with privately oper­ated crim­inal deten­tion facil­it­ies.

In substance, the order mostly replic­ated a similar Obama-era policy that allowed private prison contracts between firms and the federal Bureau of Pris­ons to expire without renewal, although Biden’s order goes slightly further by also apply­ing to U.S. Marshals Service (USMS) contracts.

The exec­ut­ive order is an initial step for cutting ties with for-profit firms that earn revenue from prison contracts, and there are addi­tional things that the admin­is­tra­tion could do to further disen­tangle profit from deten­tion. For example, this order does not affect facil­it­ies these firms manage on behalf of U.S. Immig­ra­tion and Customs Enforce­ment. Also, firms have star­ted to circum­vent the order by enga­ging in inter­gov­ern­mental service agree­ments with counties that then contract directly with the federal govern­ment for immig­ra­tion or marshals’ deten­tion services.

The oppos­i­tion to private pris­ons

Firms that own and manage jails, pris­ons, and immig­rant deten­tion facil­it­ies have long come under scru­tiny since the industry emerged in the mid-1990s. As I’ve writ­ten before, it has been criti­cized since it has exis­ted.

Some argue the profit motive creates perverse incent­ives that drive over­crowding by cutting costs and redu­cing the qual­ity of life for those who are incar­cer­ated or detained. Or that the corpor­a­tions that manage these facil­it­ies earn addi­tional revenue when indi­vidu­als in their custody stay incar­cer­ated for longer peri­ods of time, encour­aging staff to hand out extra infrac­tions that result in longer stays. Others take issue with the concept of a corpor­a­tion profit­ing off the nation’s penchant for incar­cer­a­tion. And for decades, some legal schol­ars and poli­cy­makers conten­ded that there are certain state func­tions that simply cannot be deleg­ated — and that one of those is punish­ment.

Despite years of growth for this industry, in 2019, Wall Street banks began to distance them­selves from finan­cing them, espe­cially as these firms that manage and own pris­ons and immig­ra­tion deten­tion centers received negat­ive atten­tion amidst an outcry over the Trump admin­is­tra­tion’s deten­tion policies.

Will contracts to manage ICE facil­it­ies be renewed?

As noted above, the exec­ut­ive order does not affect ICE contracts because ICE is part of the Depart­ment of Home­land Secur­ity, not DOJ. While undoc­u­mented indi­vidu­als housed in ICE deten­tion peaked at more than 55,000 people under Pres­id­ent Trump and signi­fic­antly dropped during the pandemic, that number is creep­ing back up. More than 25,000 people are currently held in ICE deten­tion as of early August, and about 80 percent of ICE deten­tion beds are still owned or managed by for-profit firms.  

ICE contracts made up 28 percent of 2020 revenue for both GEO Group and Core­Civic, two of the biggest private prison compan­ies. So far, the Biden admin­is­tra­tion has not made a move to elim­in­ate ICE contracts with for-profit firms. Under the Obama admin­is­tra­tion, then-DHS Secret­ary Jeh John­son formed a DHS Advis­ory Coun­cil to review the depart­ment’s policies and prac­tices related to private immig­ra­tion deten­tion and “eval­u­ate whether this prac­tice should be elim­in­ated.”

The coun­cil ulti­mately recom­men­ded that ICE expand meas­ures to provide more robust over­sight of private facil­it­ies, but by the time the coun­cil issued its recom­mend­a­tions, Trump had been elec­ted and Pres­id­ent Obama had little time left to imple­ment these changes.

It’s possible that the admin­is­tra­tion will also seek to reduce ICE’s reli­ance on private deten­tion and improve over­sight of those facil­it­ies, but there’s been little hint from the admin­is­tra­tion as to whether they will focus on ICE contracts with for-profit firms.

Initial effects

Biden’s exec­ut­ive order has star­ted to have an impact on GEO Group and Core­Civic, which both have a consid­er­able number of federal contracts to manage pris­ons and immig­ra­tion deten­tion centers. Yet the exec­ut­ive order applies to contracts as they come up for renewal, making it diffi­cult to calcu­late the full impact on this industry a mere seven months later.

But here’s what we know so far: In May, GEO Group’s contract with BOP to manage the Great Plains Correc­tional Facil­ity located in Hinton, Oklahoma, expired. The prison — which housed more than 1,500 people — was the largest employer in the area, and Oklaho­ma’s two senat­ors urged Biden to reverse his order due to the poten­tial negat­ive economic impact of the clos­ure. A GEO Group repres­ent­at­ive told offi­cials in Hinton that it would look for new contracts with other govern­ment agen­cies in an attempt to hold pris­on­ers there in the future.

GEO Group noted it expects two addi­tional BOP correc­tional facil­it­ies to close before the end of the year (Big Spring and Flight Line facil­it­ies in Texas) as a result of the exec­ut­ive order. Core­Civic indic­ated it has four contracts with USMS set to expire in 2021, likely without renewal, in addi­tion to only one contract with the BOP.

Increased use of inter­gov­ern­mental service agree­ments

Addi­tion­ally, the exec­ut­ive order may unin­ten­tion­ally create a scen­ario where for-profit firms sign more contracts with counties that then directly contract with the federal govern­ment, allow­ing the firms to essen­tially circum­vent the order. In fact, GEO Group seems to inter­pret the exec­ut­ive order as one that “appears to be focused on direct contracts with private sector service providers.”

And as GEO Group recently noted during an investor call, when it comes to its contracts with USMS, it oper­ates three facil­it­ies under direct contracts and nine facil­it­ies that are part of inter-govern­mental agree­ments, mean­ing Geo Group’s contract could tech­nic­ally be with a county or state govern­ment, not DOJ. In fact, three months after the exec­ut­ive order, Core­Civic signed a new 3-year contract with Mahon­ing County, Ohio for 990 beds at their North­east Ohio Correc­tional Center. Accord­ing to Core­Civic, the contract “served as a replace­ment to the previ­ous direct contract with the United States Marshals Service for up to 992 beds to house federal detain­ees.”

Need to shrink over­all carceral foot­print

While the DOJ order appears narrowly tailored to remov­ing the private finan­cial stakes in federal incar­cer­a­tion, it’s import­ant to note that the order may not result in shrink­ing the over­all carceral foot­print. For example, the popu­la­tion in some impacted facil­it­ies is simply being shif­ted to govern­ment-managed facil­it­ies.

There is already at least one convo­luted situ­ation where a state signed a contract to house its own custodial popu­la­tion in a newly vacant private facil­ity that was forced to empty out due to the exec­ut­ive order. In Montana, the DOJ order set in motion a complic­ated swap of custodial popu­la­tions between county, state, and federal agen­cies in addi­tion to Core­Civic. Detain­ees housed by USMS at the Core­Civic-owned and oper­ated Cross­roads Correc­tional Center were moved to the Great Falls Regional Prison (GFRP), where some Montana Depart­ment of Correc­tions (MDOC) pris­on­ers were recently housed. MDOC nego­ti­ated a contract with Core­Civic to trans­fer some of those in their state prison popu­la­tion, who had been housed at the GFRP under a contract with Cascade County for 152 beds, to Core­Civic’s Cross­roads Correc­tional Center (which previ­ously held the federal detain­ees). This reshuff­ling produced a game of musical chairs between facil­it­ies and who manages certain custodial popu­la­tions.

There are other situ­ations that don’t include such complic­ated swaps, where DOJ has succeeded in elim­in­at­ing contracts with for-profit firms. However, the indi­vidu­als housed in some of these private pris­ons were merely trans­ferred to other facil­it­ies (yet govern­ment-managed), so custodial popu­la­tions were not actu­ally reduced. For example, the approx­im­ately 1,640 people who were housed at the Geo Group managed Moshan­non Valley Correc­tional Center in Pennsylvania were sent to govern­ment-run BOP facil­it­ies for the rest of their sentences. Addi­tion­ally, USMS did not renew its contract for GEO Group’s 222 bed Deten­tion Facil­ity in New York City that ended in March. These mostly pretrial defend­ants, many of whom are cooper­at­ing witnesses, were trans­ferred to other govern­ment-managed facil­it­ies.

The federal prison popu­la­tion

As of August 26, the BOP repor­ted 155,730 people in its custody, with 9 percent of them in privately managed facil­it­ies. If you compare this number to year-end federal prison popu­la­tions, this is the lowest federal prison popu­la­tion since 2000. However, as law professor Doug Berman poin­ted out, the day after Biden’s inaug­ur­a­tion, the BOP popu­la­tion clocked in at 151,646, and that number has been rising ever since.

During an investor call in May, Core­Civic’s CEO acknow­ledged, “BOP has exper­i­enced a signi­fic­ant decline in inmate popu­la­tion since 2013 and simply does not have as much of a need for prison capa­city for the private sector.” Although the federal prison popu­la­tion dropped during the pandemic, the privately managed prison firms are surely keep­ing a close eye on the increas­ing numbers.

One major strategy to reduce the private prison foot­print is a matter of supply and demand. Redu­cing federal custodial popu­la­tions needs to be part of the solu­tion. It would be more impact­ful if the Biden admin­is­tra­tion focused on how to reduce the number of people in our federal and state pris­ons, local jails, and ICE deten­tion facil­it­ies.

This requires a multi-faceted approach of better util­iz­ing federal grant money to incentiv­ize states to reduce their carceral foot­print, work­ing with Congress to change senten­cing laws, commut­ing the sentences of the more than 4,000 people who have been success­fully placed on home confine­ment under the expan­ded CARES Act author­ity, and reima­gin­ing our immig­ra­tion deten­tion policies. This is neces­sary work to shrink the size and scope of our immig­ra­tion and crim­inal legal systems.