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$229 Billion California Teacher Retirement Program Cites Human Rights Violations When Divesting From Private Prisons

Evie Fordham | Politics and Health Care Reporter

  • One of the countrys biggest public pension funds succumbed to pressure from activists to divest from private prison companies CoreCivic and GEO Group.
  • The California State Teachers Retirement System began rethinking its investments in the companies in July, when the migrant detention debate was at its peak.
  • CoreCivic and GEO Group, which have ICE contracts, call the divestment politically motivated and bad for pension-holders.

A nearly $230 billion California teacher retirement program voted Wednesday to get rid of its investments in private prison companies CoreCivic and GEO Group in the latest push from teachers and activists who want the program to pull out of a variety of industries.

The California State Teachers Retirement System, or CalSTRS, decided in July to tour some of the companies facilities to determine whether they violate human rights, in which case the board could divest.

Ruben Hayslette and other protesters gather in front of the GEO Group headquarters to speak out against the company that manages private prisons across the United States on May 4, 2015 in Boca Raton, Florida. Joe Raedle/Getty Images

Although CalSTRS was “not able to obtain evidence that [CoreCivic and GEO Group] violate the respect for human rights, private prisons do add capacity, and help facilitate a system, that may be viewed as violating the risk factor,” chief investment officer Christopher Ailman wrote in a memo, according to Pensions & Investments.

About 200 teachers signed a public letter to CalSTRS in July asking the fund to divest because they questioned conditions at the companies facilities, which have contracts with Immigration and Customs Enforcement (ICE) and house migrant detainees in some of their facilities, reported The Sacramento Bee.

CalSTRS “serves 933,000 members and their beneficiaries,” spokeswoman Michelle Mussuto told The Daily Caller News Foundation on Thursday.

Neither GEO Group nor CoreCivic run facilities that house unaccompanied illegal migrant children. (RELATED: REPORT: Trump Will Sign Order To Change Asylum Rules Ahead Of Caravan Arrival)

CalSTRS visited two facilities outside of San Antonio and found them satisfactory, but still chose to divest.

Immigrant detainees talk while in a general population block at the Adelanto Detention Facility on November 15, 2013 in Adelanto, California. John Moore/Getty Images

Immigrant detainees talk while in a general population block at the Adelanto Detention Facility on November 15, 2013 in Adelanto, California. John Moore/Getty Images

“Staff confirmed that in both facilities detainees are open to roam the grounds, the living units were not locked, and there was no razor wire or weapons carried by staff (ICE and other law enforcement agents at the facility could carry their firearms on parts of the grounds),” Ailman continued in the memo according to Pensions & Investments. “These detention facilities would not violate the CalSTRS respect for human rights; however staff has not nor is able to trace every family affected by these firms.”

CalSTRS investments in the two companies hovered around $12 million as of Nov. 6.

Purely Political Decision

“We believe this decision was based on a deliberate and politically motivated mischaracterization of our role as a long-standing service provider to the government,” GEO Group spokesperson Pablo Paez said in a statement to TheDCNF Thursday. “Our company has never played a role in policies related to the separation of families, and we have never provided any services for that purpose. We are disappointed that misguided, partisan politics were able to jeopardize the retirement security of Californias educators.”

“With this disappointing and purely political decision, a group representing educators has voted against a company that passionately believes in educating those who need it most,” CoreCivic spokesperson Amanda Gilchrist told TheDCNF in a statement Thursday. “Hundreds of CalSTRS members fellow educators work in our correctional facilities every day to help prepare inmates for success after prison, and weve made several significant commitments to reentry programming – unmatched in the public or private sector — with education being a key component. One of our main goals is to graduate more than 8,000 inmates with a high school equivalency certificate and 25,000 inmates with an industry-recognized certificate for vocational skills by the end of 2019.”

Who Wanted Divestment In The First Place?

Teachers have been lobbying CalSTRS to divest from industries including firearms and the Trump Organization dating back to February or earlier. The private prisons rose to attention during controversy over migrant family separation at the border that was partially quelled when President Donald Trump signed a June 20 executive order ending the practice that had also existed under the Obama administration.

The text of the public letter signed by more than 200 teachers was composed by “left-leaning organization” Together We Will-San Jose, reported The Sacramento Bee. Together We Will bills itself as an “intersectional, feminist, inclusive, anti-racist community dedicated to progressive activism” that concerns itself with issues from immigration to vehicle emission standards.

Protestors chained together at the wrist block traffic from passing on the road to the Otay Mesa Detention Center during a demonstration against US immigration policy that separates children from parents, in San Diego, California June 23, 2018. ROBYN BECK/AFP/Getty Images

Protestors chained together at the wrist block traffic from passing on the road to the Otay Mesa Detention Center during a demonstration against US immigration policy that separates children from parents, in San Diego, California June 23, 2018. ROBYN BECK/AFP/Getty Images

Teachers successfully petitioned CalSTRS to divest of an indirect stake in firearms company Remington Outdoor because the 2012 Sandy Hook shooter allegedly used one of its assault weapons in the shooting, reported The Sacramento Bee.

CoreCivic and GEO Group have a combined yearly revenue of roughly $4 billion with roughly 120 facilities each nationwide.

Only 70 Percent Funded

CalSTRS may be the second-biggest public-pension fund in the U.S., but its situation is less than ideal as it is only 70 percent funded, wrote former Department of State chief financial officer Christopher Burnham in a Tuesday San Francisco Chronicle op-ed.

“Activists pressing for divestment from private prison companies are upset by the Trump administrations immigration agenda and think that divesting from these contractors will impact the immigration debate,” Burnham wrote. “These activists are wrong — and CalSTRS and California retirees stand to lose if this divestment occurs (as a category, private prison companies have significantly outperformed the S&P 500 for the past 15 years).”

ICE houses detained migrants in privately run facilities as well as Federal Bureau of Prisons (BOP) facilities.

Nine percent of the U.S. state and federal prison population were housed in private prisons in 2016, according to the Bureau of Justice Statistics.

Follow Evie on Twitter @eviefordham.

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