CalPERS Comes Under Fire for Prison Investments

CalPERS is one of many pension funds invested in CoreCivic and GEO Group, according toEducators for Migrant Justice.

Daniel Acker/Bloomberg

Daniel Acker/Bloomberg

Pension funds have fallen under scrutiny for investments in two prison companies, GEO Group and CoreCivic, amid growing concern over how detention facilities are being used in the immigration crisis at the U.S border with Mexico.

Educators for Migrant Justice, a nonprofit group that says on its website that it seeks to end family separation and “migrant abuse profiteering,” is stepping up pressure on California Public Employees’ Retirement Systems and State of Oregon Public Employees Retirement System to sell the two prison companies. The effort follows a successful campaign pushing California State Teachers’ Retirement System to do so, with CalSTRS saying in November that it would remove GEO and CoreCivic from its holdings.

Most pension funds and institutional investors prefer to engage with companies they’re concerned about rather than divest from them, according to Emily Claire Goldman, founder of the group. “In their minds, divestment is losing a seat at the table,” she said in a phone interview. “But there are also times when there is no amount of corporate engagement that shareholders can exert to change practices that are inherent in how a company works.”

CalPERS, CalSTRS and Oregon’s pension plan invested in GEO Group and CoreCivic through customized index funds, according to Goldman. The two companies were recently thrust into the spotlight by U.S. Congresswoman Alexandria Ocasio-Cortez, who used Twitter to point to them as profiting from the crisis at the border.

“Reminder: Caging kids is a for-profit enterprise, & the people who profit off camps finance the political campaigns of those who legislate more caging,” Ocasio-Cortez tweeted earlier this week. “If you want to follow the money: GEO Group & CoreCivic are big ones. Look at the lenders & private equity grps [sic] they deal with.”

Spokespeople for CalPERS, CalSTRS, and Oregon’s pension fund did not respond to emails seeking comment.

“To be clear, none of our facilities provides housing for children who aren’t under the supervision of a parent,” a spokesperson for CoreCivic said via email. “CoreCivic plays a valued but limited role in America’s immigration system, which we have done for every administration – Democrat and Republican – for more than 30 years.”

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Educators for Migrant Justice is attending meetings at CalPERS, the largest pension fund in the U.S., and working behind the scenes to encourage change, according to Goldman. CalPERS is engaging with CoreCivic and GEO Group, she said.

While the Educators for Migrant Justice tracks other pension funds invested with CoreCivic and GEO Group, the nonprofit is not yet doing work with them in person to push for divestment, according to Goldman. A spokesperson for GEO did not respond to an email seeking comment.

Bank of America Corp. will stop lending to companies that provide private prison and immigration-detention services, according to a June 26 Bloomberg report. In March, JPMorgan Chase & Co. decided to end its relationship with the corrections and detention industry, while Wells Fargo & Co. has also stopped loans to the sector, according to Bloomberg.

“For over thirty years, we have provided high-quality services to the federal government under both Democrat and Republican administrations,” GEO Group’s chairman George Zoley said in a company statement on June 26. “To be clear, The GEO Group has never managed any facilities that house unaccompanied minors, nor have we ever managed border patrol holding facilities.”

Meanwhile, Educators for Migrant Justice is increasingly concerned about the conditions of facilities housing migrant children separated from their families.

“These human rights impacts are very widespread and there’s a pattern of abuses we’re looking at,” Goldman said.