(Photo by Wagner T. Cassimiro via Flickr)
With $175 billion in investments, NYC’s pension funds are collectively the fifth-largest retirement plan in the entire United States. Of that, $58 billion is invested in the stock market. As of last week, those stock market investments no longer included shares in private prison companies. With the sell-off, NYC’s public pension system became the first in the country to divest from private prison companies, selling off $48 million in shares.
“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. But because of this major new step, we are demonstrating that we will not be complicit. We are standing up for what’s right,” New York City Comptroller Scott M. Stringer said in a statement announcing the successful sell-off.
The move comes practically on the heels of the announcement that NYC has begun the process of cutting ties with Wells Fargo as its primary banker. While city officials said that decision had only to do with Wells Fargo failing its most recent Community Reinvestment Act examination, the bank is also known to be one of the most active financiers of private prisons, as reported in a story from Take Part last fall.
The city’s pension fund trustees, which include Stringer, voted to divest from private prisons in May, after studying the financial implications of doing so. “As fiduciaries of NYCERS (NYC Employees’ Retirement System), we have a responsibility to protect the hard-earned money of thousands of New Yorkers,” said Public Advocate Letitia James in a statement after the vote. “It is apparent that investments in private prisons are not only an unstable and risky investment, but a deeply troubling one.
In the final divestment announcement last week, the comptroller’s office cited reputational risks (poor conditions, high rates of violence, improper staffing levels, inmate abuse and other human rights concerns), legal risks (lawsuits stemming from human rights abuses can lead to high payouts, making private prison companies less profitable), and regulatory risks (such as a future presidential administration reinstating the Obama administration’s plan to phase out the use of private prison companies in the federal prison system).
Both civil rights and immigrant rights activists cheered the decision. Private prison companies also happen to own and operate many of the nation’s immigrant detention centers. The National Network for Immigrant and Refugee Rights is a member of a national prison divestment campaign.
The comptroller’s office found that privately owned detention centers hold as many as 65 percent of Immigration and Customs Enforcement (ICE) detainees, and at least eight immigrant detainees have died while in those private facilities.
“Our investments need to reflect our values. To that end, divesting our city’s pension funds from private prison companies reflects our belief that the abuses of this industry do not advance safety or justice in our society. As a NYCERS trustee, I was proud to cast my vote in favor of full divestment,” Brooklyn Borough President Eric L. Adams said in a statement.