In the year since President Joe Biden signed an executive order to stop the Justice Department from using private prisons, a multibillion-dollar private prison company has found an “opportunity” for new business in detaining and tracking immigrants because of the immigration court backlog that has only been made worse by the covid-19 pandemic, new documents reveal.
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GEO Group detailed in a previously confidential document that “Border Inflow” creates an “opportunity for GEO” to increase its federal business — with a particular focus on its “electronic monitoring business” — in the wake of the executive order, which has already cost the company contracts worth roughly $125 million.
The order, hailed by the Biden administration as part of its racial equity efforts, aimed to decrease the federal government’s use of private prisons by banning the Justice Department from renewing contracts with “privately operated criminal detention facilities.” The order followed a 2016 Justice Department Inspector General’s report that found significant safety issues at private prisons utilized by the Bureau of Prisons (BOP).
But the order had significant limits, and companies have used those limits and found workarounds — with some success — to stay in business with the feds. A recently filed financial disclosure by one such company, GEO Group, details the extensive nature of these efforts to “[continue] to win new business as it markets facilities to other federal and state agencies that are facing increased capacity constraints.”
The previously confidential document was submitted to the Securities and Exchange Commission earlier this month. In it, GEO Group was quite clear about its overarching strategy: The company plans to use those workarounds, immigration detention contracts and increased reliance on its electronic monitoring business (known as BI Incorporated) to maintain its federal business interests despite Biden’s order.
Eunice Cho, a senior attorney with the American Civil Liberties Union’s National Prison Project, said the documents “really confirm what our worst suspicions were.” Cho reviewed the documents and spoke with Grid about what they show — in her words, “a shell game with the government to counteract really hard-won efforts to reduce incarceration, repurpose facilities and think about shrinking the impact of mass incarceration in our society.”
Aspirational goals meet reality
As Cho alluded to, Biden’s order had lofty goals, declaring that “our current system of mass incarceration … does not make us safer.” To “reduce profit-based incentives” in the criminal legal system, the order is supposed to move toward ending the federal government’s use of “privately operated criminal detention facilities.” The limit built into that wording meant that not all federal detention was covered by the order, however, and even implementation as to the areas covered has proved to be less than complete.
From the start, advocates and journalists noted that Immigration and Customs Enforcement, which is part of the Department of Homeland Security, was not included in the order. This left unfulfilled Biden’s pledge as a presidential candidate to end the use of private prisons in immigration detention, as highlighted in a Detention Watch Network report published late last year. An overwhelming majority of immigrants being detained are in private prisons, as the Brennan Center for Justice’s Lauren-Brooke Eisen noted in an analysis of the executive order last year, but Biden’s pledge had suggested he would reverse or end that trend if elected.
Despite that, the fact that DHS was not included in the order meant that, when GEO Group lost its BOP contract for its Moshannon Valley Correctional Facility in Pennsylvania, the company converted the facility into an immigration detention facility this past September.
Pointing to the underlying purpose of the Biden order, Jennifer Ibañez Whitlock, policy counsel at the American Immigration Lawyers Association, told Grid, “We’re literally taking an order that says these aren’t safe for federal criminal detainees, and then saying it’s OK if it’s immigrants who are detained in these same facilities.”
As the executive order went into effect, however, it became clear that it wasn’t only the areas left out of the order where the private prison companies would press to continue their business. The two largest private prison companies, CoreCivic and GEO Group, have taken additional steps — and worked over the past year with government officials — to get around Biden’s executive order even in areas where it is supposed to apply.
In October, the Intercept reported that GEO Group was working to maintain its contract for jailing federal pretrial detainees at its Western Region Detention Facility by having the U.S. Marshals Service (USMS) contract with the city of McFarland, California, which then itself would subcontract with GEO Group to jail the detainees. As the Detention Watch Network report concluded, “By going through the city to contract with the private prison company, USMS would be violating the spirit and intent of the executive order, which clearly calls for an end to contracts with ‘privately operated’ facilities.”
Earlier last year, when CoreCivic contracted with Mahoning County, Ohio, local news described it as a “deal” that “lets federal inmates stay at Youngstown private prison.” CoreCivic’s news release about the contract was more circumspect, stating only that “Mahoning County is responsible for County inmates and federal detainees,” and that the county would be using CoreCivic’s private prison “to address its population needs.”
For its part, a CoreCivic public affairs manager, Matthew Davio, told Grid, “The federal government decides how and in what circumstances it believes our services can help solve the challenges it faces. We remain flexible to meet their needs, as we have for nearly 40 years.”
Reporting about these moves has generally focused on instances where specific contracts were at issue because they were set to expire. The document Grid reviewed goes further, laying out GEO Group’s broad approach to offsetting any losses from the executive order with new business. As Cho put it, “What GEO is doing is that they’re simply filling these beds with new people to continue building their astronomical profits.”
The January filing with the SEC was an 8-K filing aimed at updating shareholders of any “significant events” that could affect GEO Group’s shareholders. As part of an ongoing possible business deal relating to outstanding debt, the filing included a “Company Overview” marked “CONFIDENTIAL” and dated Nov. 29, 2021. That document, which runs over 40 pages, presented the overall status of the company and its domestic and international operations.
As it confirms, the private prison industry is still big business. As of Sept. 30, 2021, per the document, GEO Group owns, leases or manages more than 100 properties worldwide, representing roughly 86,000 beds. Its revenue from the prior 12 months was roughly $2.3 billion. And, as the document states, “despite the challenges brought on by the COVID-19 pandemic, the Company has shown strong performance, with FY’21 financials expected to be significantly better than what was communicated in Q4′20.”
Beginning on page 16, however, the document keys in on one specific area: “Updates Post-Issuance of Executive Order.” Over the next six pages, GEO Group lays out the problems that the executive order has caused for its business — as well as its plans to offset that lost business.
The company acknowledges that the order “will likely result in the eventual phase-out of BOP facilities and direct USMS contracts” but is nonetheless optimistic about its ability to find new governmental agencies that would want to hire it to incarcerate people. “GEO has continued to win new business,” it declares, “as it markets facilities to other federal and state agencies that are facing increased capacity constraints.”
The company acknowledged that “contracts representing ~$125 million of FY’20 revenue have been terminated as a result of the Executive Order.” Nonetheless, GEO Group states that it is “actively marketing and repurposing” the shuttered jails and prisons for new possible customers — other federal agencies or state entities. The company points to its “long-term customer relationships” — including with federal government agencies — as reason for financial optimism. The memo states that GEO Group is able to use those relationships to engage in “expansionary projects” — new business. This runs directly counter to the stated purpose of the federal executive order, but the Biden administration has, at least tacitly, gone along with the plans thus far.
A “corporate profit-making scheme” laid bare
On a federal level, GEO Group’s overview document makes clear, two primary sources of income remain: contracts with ICE to jail or electronically monitor immigrants, and indirect contracting schemes with the U.S. Marshals Service to jail people, primarily before trial, as detailed by the Intercept. (On a state level, meanwhile, GEO Group highlights the age of state public prisons as an “opportunity” for the “private sector.”)
Discussing how the plans contained in the documents confirmed her “worst suspicions,” Cho said, “To see them written out so clearly as part of the corporate profit-making scheme, I think should really give everyone who has tried to design and implement these policies in a way to reduce incarceration pause.”
In a section detailing contracts “impacted” by the executive order, GEO Group states that five contracts, four with the Bureau of Prisons and one with the Marshals Service, were “already terminated.” The contracts represented nearly 7,500 beds, including the nearly 2,000-bed Great Plains Correctional Facility in Oklahoma. The section also highlights four additional contracts “at risk” because of the executive order, representing nearly 5,250 additional beds. Three of these contracts, one of which was granted a six-month extension, are with the Marshals Service, and one is with BOP.
This, of course, was the purpose of the executive order. Ending those contracts would mean that more than 12,000 people who previously could have been jailed or imprisoned in for-profit facilities run by GEO Group could no longer be sent by the federal government to those locations.
The lost contracts do not, however, mean the facilities will be closed for good. As GEO Group’s documents go on to explain: “GEO is Marketing Available Beds in Inventory to Other Agencies.” The company is “currently marketing these facilities to various government agencies,” and though it doesn’t say what agencies specifically, other documents make clear that GEO Group thinks ICE is a prime target for new business at the federal level. (GEO Group does acknowledge that “asset sales” — in other words, sales of the properties — are potentially being “explor[ed]” as well.)
Nowhere is GEO Group more optimistic than in its discussions of its immigration-related business. “Border Inflow Increase is a Tailwind for GEO Facilities and BI,” the company states as the heading to a particularly jarring page.
There, the memo describes how aspects of the immigration system that have led to criticism and constitutional litigation — like “record backlogs and average wait times” in immigration courts — are an “opportunity” for the company, one of a handful of “sector trends” that will propel “continued demand” for its business.
Nearly one-fourth (24 percent) of GEO Group’s global revenues from the third quarter of 2020 to the third quarter of 2021 already came from ICE. But with “record increases in migrant flows,” the company anticipates that those backlogs will increase — as will its ability to get federal money to keep immigrants in detention or electronically monitored, via ankle bracelet or phone tracking, as part of its related BI Incorporated operation. (BI Incorporated, the documents note, is big business for the company. It is the “market leader” for domestic electronic monitoring — “more than double the next largest competitor” — with more than 2,000 contracts.) It also notes that the “lifting of Title 42 public health restrictions,” which have allowed the U.S. to quickly remove would-be immigrants due to the pandemic, will “sustain this trend” of immigration court backlogs, leading to more detentions and monitoring going forward.
Cho, the ACLU lawyer, called this “a clear example of how private corporations view regressive immigration policies as an opportunity for profit,” explaining, “they are … calculating that inefficient courts and a regressive court system will actually help their profit margin.” She said the plans should raise concerns about “how violation of those [constitutional] rights is leading to profit margins for these corporations.”
Whitlock also pointed toward the Biden administration’s inaction on the immigration side of the issue, saying, “If the administration doesn’t stop this, we’re going to see more examples of BOP facilities or facilities used by the U.S. Marshals Service literally shutting down and then a couple weeks, couple months later reopening to detain immigrants in the exact same space.”
In response to a request for comment about the detention policies and GEO Group’s statements, a Department of Homeland Security spokesperson told Grid, “In May, Secretary [Alejandro] Mayorkas issued a memo directing U.S. Immigration and Customs Enforcement to close two detention facilities, and ICE has been actively working with the DHS Office for Civil Rights and Civil Liberties, the DHS Office of the Inspector General, and the DHS Office of the Immigration Detention Ombudsman to ensure that detention facilities are held to the appropriate health and safety standards. Secretary Mayorkas continues to evaluate DHS detention policies and will be issuing additional immigration-related policy memos, including memos addressing immigration detention.”
In discussing its other primary path for continued federal money, GEO Group acknowledges its workaround efforts to get local governments to contract with the Marshals Service and have GEO Group then continue to jail people facing federal charges as a subcontractor to those governments. When the company discusses its future federal contracts, it explicitly says it expects an ending only to its “direct USMS contracts.” Elsewhere, it says it has used this “intergovernmental contracting strategy” to avoid the executive order’s restrictions. It states that this strategy has “somewhat mitigated” its risk for losing Marshals Service contracts thus far.
Cho explained: “Basically, what GEO has done was to play a shell game and shift to county agreements.”
Showing how important this effort is to GEO Group’s business plans, it now lists “USMS - Direct” and “USMS - Indirect” as two different revenue groups. As of the third quarter of 2021, the prior year’s revenues from USMS already were coming more from those indirect sources (9 percent) than from direct sources (6 percent). Looking forward, in a section addressing contracts up for renewal, the current contract for the Kinney County Detention Center in Texas expires in March. A 384-bed facility in which GEO Group lists the “Client” simply as “USMS” — meaning a contract renewal that should be barred by the executive order — there is a note about the status: “Intergovernmental agreement; expect to be renewed.”
Eighteen members of the House — led by Rep. Steve Cohen, a Democrat from Tennessee — sent a letter to Biden in November 2021 questioning these sorts of arrangements as “new tactics used by private prison companies to retain federal prison contracts in an effort to continue to reap profits off of the incarceration and dehumanization of those within their custody.” The House members asked Biden to take action to stop these efforts to “undermine” the executive order by enforcing it more robustly to prevent such workaround moves.
Asked via email whether the Justice Department and Attorney General Merrick Garland approve of this use of “intergovernmental agreements,” a Justice Department spokesperson told Grid, “The Department of Justice is committed to implementing the President’s Executive Order on privately-operated criminal detention facilities. When appropriate, U.S. Marshals (USMS) detainees are transferred to the nearest Federal Bureau of Prisons (BOP) facility or to state and local jails with which they have Intergovernmental Agreements. The Department of Justice is mindful that any plans should avoid unnecessarily disrupting court appearances, access to counsel and family support.”
Whitlock told Grid that advocates have raised similar concerns to Biden administration officials regarding the use of the facilities for immigration detention, noting, “It’s an opportunity for them not to just funnel people into immigration detention facilities, private immigration detention facilities. After all, GEO Group and CoreCivic, while they may have the facilities, they don’t have a say in who goes into them.”
When Biden signed the executive order one year ago, he said it was “a first step to stop corporations from profiting off of incarceration.” After a year of those corporations successfully finding ways to continue doing so, the Biden administration has not taken any other steps that would help achieve that goal.