CalPERS Engages Private Prison Companies

The review could lead to divestment of CoreCivic and The GEO Group.

The chairman of the investment committee of the California Public Employees’ Retirement System (CalPERS) says investment officials are engaging management of two private prison companies, CoreCivic and The GEO Group, as well as defense contractor General Dynamics.

Henry Jones’ comments come as a California state legislator, Democratic Assemblyman Rob Bonta, has introduced legislation that would force CalPERS to divest from the two prison companies.

The companies have been the subject of controversy because of their housing of children and their families caught up in the Trump administration immigration crackdown. Other major pension systems, including the California State Teachers’ Retirement System (CalSTRS), The New York State Common Fund, and The New York City pension systems, have divested from CoreCivic and The GEO Group.

General Dynamics, whose holdings have not been sold off by the other pension systems, does not house prisoners but does provide case management services for youth detained under the Trump administration policies. Advocates want CalPERS to pressure General Dynamics to stop its contracts with the federal government, but generally have not called for outright divestment.

Jones made his comments about engaging CoreCivic and The GEO Group at CalPERS’s Dec. 17 investment committee meeting, following speeches by individuals and representatives of several groups supporting divestment.

“We appreciate your concerns,” Jones said, noting that CalPERS staff was engaging the companies on issues raised by the speakers and is continuing to follow up on developments in accordance with fund policy.

Under the rules of the largest US pension plan, CalPERS must engage companies over its policies before the investment committee can take a formal vote on divestment.

One of those speaking on Dec. 17, Emily Claire Goldman, the founder and director of Educators for Migrant Justice, said she understood that CalPERS has historically resisted shareholder demands for divestment, arguing that a voice at the table is the best way to change corporate conduct.

“This argument doesn’t hold for companies like CoreCivic and The GEO Group, whose for-profit prison model, where the companies have a financial incentive to incarcerate as many people as possible, is inherently incompatible with the concept of corporate social responsibility,” she said. “No amount of pressure from investors can persuade a company to abandon its business model.”

Goldman presented the investment committee a petition singed by 240 CalPERS members calling for divestment of the two companies.

“This level of divestment makes it more difficult for these migrant abuse companies to underwrite debt, access capital, and lobby for contracts and pro-incarceration anti-immigrant policies,” she said.

Another speaker, Mya Dosch, an assistant professor at Sacramento State University and a CalPERS member, expressed concern about Cibola County Correction Center in New Mexico run by CoreCivic, which has a unit housing transgender women.

Dosch cited the case of a transgender woman, Roxana Hernandez, who died from complications of HIV, pneumonia, and dehydration at a hospital in May after being detained at the correctional facility. Hernandez was at the CoreCivic facility for 12 hours before being transferred to a hospital after her medical condition became known.

 “We take the health and well-being of those entrusted to our care very seriously,” he said.  “Whenever there is a death in custody, CoreCivic immediately notifies our government partners and all appropriate authorities with oversight responsibility. We cooperate fully with those investigations.”

He also said CoreCivic was committed to providing a safe environment for transgender detainees. “Our ICE-contracted facilities are contractually required and held accountable to federal Performance-Based National Detention Standards (PBNDS), which include guidelines for the safe and appropriate accommodation of transgender detainees,” he said.

Hernandez was part of a caravan of migrants from Central America seeking asylum in the US in May. She was detained by US Immigration and Customs Enforcement officials at the San Ysidro Port of Entry between San Diego and Tijuana, Mexico.

New Mexico Sens. Tom Udall and Martin Heinrich, and Sen. Kamala Harris of California, have sent a letter to border and immigration officials asking for an investigation into the circumstances leading to Hernandez’s death. Immigration officials say Hernandez wasn’t abused while in custody.

“I do not want to invest in this,” said Dosch of the two private prison companies. 
 “I do not want my retirement tied to those corporations whose profit from the suffering of women of color and the most vulnerable among us. It is not a sound investment, either.”

Both private prison companies insist they do not make policies regarding the housing of immigrant detainees but provide services under their contracts with the federal government. The private prison companies also contract with state and local authorities, including the state of California, to hold prisoners because of overcapacity issues in state and local prisons.

If CalPERS chooses not to divest from the two private prison companies, officials of the pension system would likely have to make their case in the state legislature at a public hearing.

Bonta’s bill to divest from CoreCivic and The GEO Group will begin to be considered by state lawmakers after the state legislature reconvenes on Jan. 7. The bill came after the Trump administration’s immigration detention policies earlier this year shined the spotlight on CoreCivic and The GEO Group. Each company runs a facility housing adults and children detained in the immigration crackdown, as well as facilities housing adult detainees.

CalPERS has around $12 million in holdings in the two companies, not major for such a large pension plan, but divesture by the biggest US pension system would shine more attention on issues surrounding the private prison corporations and their for-profit model.

Bonta’s bill also calls for CalSTRS to divest from the two private prison companies, but the CalSTRS investment committee already approved divestment in an emotional 6-5 vote last month.

California Teachers Lead Private Prison Divestment Campaign

In the wake of CalSTRS, the California teachers’ pension fund, voting this fall to divest $12-million from private for-profit prisons, Assembly member Rob Bonta (D-Oakland)—the son of farm labor organizers who grew up in a trailer yards from Cesar Chavez’s home—has introduced AB 33 to bar the state’s largest retirement funds CalSTRS and CalPERS from investing in for-profit prisons.

Two corporations that dominate the $4-billion for-profit prison industry are GEO and Core Civic, which operate immigrant detention centers, such as Adelanto and Mesa Verde, throughout California, where they have been the subject of law suits and a hunger strike over miserable living conditions—horrible food, lack of clean water—and a dearth of medical services.

While Bonta’s bill sits in the hopper, members of Educators for Migrant Justice, buoyed by their victory before the CalSTRS Board, will take their case to CalPERS, California’s public employee pension fund valued at $326-billion with an estimated $22 million invested in private for-profit prisons. On facebook, activists are inviting divestment supporters to join them Monday, December 17th, from 9am-3 pm, when they testify before the CalPERS board in Sacramento.

With enough activist pressure and support, Governor-Elect Gavin Newsom—who rose to the national spotlight when as San Francisco Mayor he boldly instructed the county clerk to issue marriage licenses to gay couples—may side with Bonta and California’s public school teachers – signing legislation and cheering divestment activists—when he takes office in 2019. Then again, Newsom has disappointed immigrant rights activists before. In March, 2009, the San Francisco Democratic Party passed a resolution criticizing Newsom for ignoring the city’s sanctuary city’s law by turning over undocumented youth charged but not convicted of felonies to  U.S. Immigration and Customs Enforcement (ICE).

How did California’s teachers convince CalSTRS, the second largest US pension fund with a $229-billion portfolio, to follow the  example of other retirement funds—Illinois, New Jersey, New York and Pennsylvania—and divest from the for-profit prison industry?  It’s a story that unfolds as a relatively small group of committed activists connect on line.

Teachers, primarily from Berkeley, organized with Educators for Migrant Justice, after the organization’s leader Emily Claire Goldman tweeted about pension fund connections with migrant abuse companies. Goldman’s tweet was picked up by Angela Coppola, a Berkeley High School teacher, who began sharing the information widely with her colleagues, including fellow Berkeley High teachers Josh Austin, and Masha Albrecht. Thus began a grassroots effort to circulate a petition from fellow educators and testify before the CalSTRS Board. On November 7, 2018, after being presented with the petition signed by 300 CalSTRS members and after an emotional debate that shed tears, the 11-member Board voted 6-5 in favor of divestment.

GEO and CoreCivic claim they are being unfairly targeted because they do not detain children separated from their immigrant parents—but Goldman, a business and human rights consultant and the founder and director of Educators for Migrant Justice, argues that companies like GEO and CoreCivic are providing some of the very resources the Trump administration depends on to incarcerate an estimated 40,000 undocumented immigrants and to carry out “egregious human rights abuses that arguably qualify as crimes against humanity under international law.”

Goldman charges the continued crackdown on legal immigration—those seeking asylum or awaiting citizenship – has left thousands of migrants detained in for-profit prison facilities notorious for their use of forced labormedical neglect, and even fatal physical and psychological abuse documented in class action lawsuits, as well as reports from human rights organizations and the Office of the Inspector General (OIG) which referenced inmate deaths at Adelanto Detention Center in the high desert of San Bernardino County.

Goldman, along with Nancy Mancias of Code Pink and dozens of teachers, appeared before the CalSTRS Board, to support the divestment campaign.

In opposing divestment, some argue the teacher pension fund could exercise greater influence over conditions in private prisons if it remained an investor.  State Controller Betty Yee, whose CalSTRS Board proxy cast a no vote,  told the press, “In order to ensure the pension funds can continue to hold up their responsibilities to pay retiree benefits and improve CalSTRS’ 64 percent funded status, I believe engagement is much more effective than divestment. If we divest, we walk away from the opportunity to bring about change and make these companies more efficient and profitable, which should be the goal of every long-term investor and fiduciary.”

In response, supporters of divestment argue that for-profit prisons are driven by a financial incentive to incarcerate as many people as possible as cheaply as possible in order to maximize profit. No amount of investor leverage or CalSTRS oversight of private for-profit prisons can change such a business model, they say CalSTRS has been engaging with for-profit prison companies CoreCivic and GEO group for years, with little to no evidence of results,” says Goldman. “No amount of corporate engagement can force a company to change its business model and since CalSTRS started this engagement process, the Office of the Inspector General has released two scathing reports on both companies’ facilities and at least four lawsuits have been filed against CoreCivic and four against GEO Group, one of which was filed by the State Attorney General for Washington.”

>Ultimately, the CalSTRS debate, as well as the upcoming debate before CalPERS and Bonta’s prison divestment bill, begs the questions: Should retirees profit from incarcerating undocumented immigrants, many of whom are fleeing Central American countries destabilized by years of US-supported military coups and right-wing death squads?  Is it right to make money off the imprisonment of poor families seeking a better life—one not marred by persecution or poverty?

In Bonta’s words, “This is inhumane and not in line with California’s values.

In California, we put our money where our values are and I applaud CalSTRS for its recent decision to divest from for-profit, private prisons.”

Emily GoldmanLA Progressive