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NYC's Pension Fund Becomes First In Country To Divest From Private Prisons
By
Emma Whitford
Published Jun 8, 2017
Modified Jun 8, 2017
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By
Emma Whitford
Published Jun 8, 2017
Modified Jun 8, 2017
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New York City's pension fund is the first in the nation to fully divest from private prisons, according to Comptroller Scott Stringer. Trustees of the city's pension fund voted unanimously to divest in mid-May, and have since pulled $48 million of stocks and bonds from three companies: GEO Group, CoreCivic, and G4S.
"With Donald Trump in the White House, we're seeing more and more industries try to profit from backwards policies at the expense of immigrants and communities of color," Stringer stated Thursday. "But because of this major new step, we are demonstrating that we will not be complicit."
A 2016 federal audit of private prisons found that these facilities are less safe for inmates than their public equivalents, due to overcrowding and inadequate medical care. Private prisons, including GEO Group and CoreCivic, also operate the majority of the country's immigrant detention centers.
Pension fund trustees voted to study the possibility of divestment last September—a mandatory step in considering any adjustment to the fund. Stringer's office worked with outside consultants to determine how divesting from prisons might impact the health of the fund (which covers city employees including teachers, fire fighters and police officers) and concluded that negative impacts would be negligible. They also decided that investing in human rights abuses was risky. From Stringer's release:
Reports have exposed a pattern of human rights issues in private prisons, including the physical and sexual abuse of inmates, wrongful deaths, and increased violence due to improper staffing. These failings can lead to reputational, legal, and regulatory risks—which could seriously harm investors.
Yet investment has soared recently in the very companies New York has divested from. The day after President Trump was elected, the New York Times reports, CoreCivic saw its stock price jump 43 percent. GEO Group, the second-largest private prison company in the US, saw a 21 percent leap. The industry also donated hundreds of thousands of dollars to Trump's campaign. On the trail, the presidential hopeful described the private model as working "a lot better." In office, Trump has expanded Immigration and Customs Enforcement's mandate.
In New York, pension investment managers liquidated investments in any company that receives at least 20 percent of its profit from private prisons, in addition to direct investments. Stringer pledged to reassess the city's portfolio annually to make sure no more companies have been added that surpass the 20 percent threshold.
"It is time we put our money where our morals are," said Public Advocate Letitia James, praising the announcement.
"This sends a strong message that New York won't support corporations that are locking up members of our communities," added Jesus Gonzalez, an organizer with Churches United for Fair Housing, in a statement Thursday. Gonzalez's group is part of a recently-launched campaign to single out companies that stand to profit under the Trump Administration, including banks that finance private prisons like JPMorgan Chase and Wells Fargo.
Doug Turetsky of the Independent Budget Office said Thursday that while New York City's divestment is a small piece of the $175 billion pension fund, it could set a positive precedent. "It could trigger others to disinvest," he said.
"We strongly reject the baseless claims that led to this misguided decision," a spokesperson for GEO Group told the Daily News.
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private prisons
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Emma Whitford
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