New York City’s pension system has become the first in the nation to fully divest from private prisons, Controller Scott Stringer will announce Thursday.
The city has sold off about $48 million in stocks and bonds of three private prison companies, according to the controller’s office, after a unanimous vote from the funds’ trustees.
The move comes after a scathing federal audit of private prison facilities last year, and after eight immigrant detainees have died in the last fiscal year while in private immigration detention centers — which house 65% of Immigration and Customs Enforcement detainees, according to Stringer’s office.
“Morally, the industry wants (to) turn back the clock on years of progress on criminal justice, and we can’t sit idly by and watch that happen,” Stringer said. “Divesting is simply the right thing to do — financially and morally.”
The trustees of the city’s pension funds voted in favor of divesting in a mid-May meeting. The stocks and bonds in three companies, GEO Group, CoreCivic, and G4S, have since been sold, Stringer’s office said.
In a statement, a rep for the GEO Group said, “We strongly reject the baseless claims that led to this misguided decision. We’re proud of our longstanding record providing high quality services, while treating the men and women in our care with the respect and dignity they deserve.”
The trustees first voted to study divesting in September. The trustees can only divest after an analysis determines doing so would add minimal or no risk to the pension funds. An outside consultants also found that maintaining investments in the industry brought about “inherent investment risks” given ongoing investigations into the industry that can damage the value of the stocks and bonds, Stringer’s office said.
The city liquidated all investments in companies that derive at least 20% of revenue from private prisons, and will analyze the portfolios annually to determine if new ones have been added.
The city’s pension funds are made up of the New York City Employees’ Retirement System, Teachers’ Retirement System, New York City Police Pension Fund, New York City Fire Department Pension Fund and the Board of Education Retirement System.
“It is time we put our money where our morals are,” Public Advocate Letitia James, a NYCERS trustee, said. “For years, I have called on our city to protect the pensions of hardworking New Yorkers by investing in areas that are both financially and ethically sound.”
John Adler, chief pension investment advisor to the mayor, said, “Private prison companies prioritize profits over humane treatment of immigrants and inmates, and their stocks’ wild price swings over the past year show the risks inherent in their business model. The Mayor supports divestment from private prisons after thorough analysis from our outside investment consultants, the City Law Department, and the Bureau of Asset Management showed that it was a prudent step for our pension funds to take.”
