A correspondent from Carbondale called our attention to the Colorado Public Employees Retirement Association’s investment in the GEO Group, which operates private prisons (“Teachers: PERA owns prison shares,” letters, July 17). Then the Colorado Independent took a closer look (“Colorado PERA members helping support private prisons, immigration detention centers,” July 19). The upshot: Colorado teachers and other public employees own 21,000 shares, valued at $408,000, of one of the major operators of detention centers for Immigration and Customs Enforcement, including one in Aurora, that have been the focus of allegations of mistreatment of detainees as well as raucous protests.
Willamette Week, the alt-weekly in Portland, Oregon, examined more or less the same situation there (“Oregon’s Public Pension Fund Invests in the Immigration Detention Centers That Residents and Politicians Say They Hate,” July 17). The Oregon Public Employee Retirement Fund “has funneled at least $2.1 million into shares of the GEO Group and CoreCivic, two government contractors that build and operate immigrant detention centers,” it reported.
In both cases, pension fund officials say it would be difficult and costly to disentangle one piece of bundled private equity investments. Presumably, the investment in these companies is helping the funds achieve annual return targets of 7% or more. Someone is going to profit from the private operation of prisons, including ICE centers. Why shouldn’t state-sector retirees be at that trough, along with private equity fund managers and other wealthy investors?
According to information from the U.S. Securities and Exchange Commission, recently sorted and published by The Guardian, of the top 10 biggest share holdings of public pension funds in GEO and CoreCivic, Oregon is in last place. New York State Teachers Retirement is first, at $9.6 million, followed by California Public Employees Retirement, at $9.5 million. Ohio would be the winner in this unholy sweepstakes if you combine its Teachers Retirement and Public Employees Retirement systems, for about $16 million invested in private prisons.
Some bank, such as JPMorgan Chase, and SunTrust, have been warned off relationships in the private prison space, thanks to the hell raised about this by progressives. The role of state retirement funds has not been as visible until lately – that is, until reporters looked for it.
The Guardian notes some of the largest investments in these companies come from states with sanctuary polices for immigrants, such as New York, California and Oregon – policies meant to shelter many of the same people whom the private prisons jail. And the layers of irony do not end there. But we would be wrong to think this makes hypocrites of liberals any more than it is hypocritical of a conservative to at some point have accepted public assistance. The search for consistency in the modern world can make fools of us all.
We are particularly sensitive to ICE now, but it would probably be strange investing if these enormous state funds did not have any shares of drug companies that are held to be reprehensible today; or makers of genetically altered seeds that are now thought to pose looming dangers if something isn’t done to regulate or otherwise stop them; or Facebook, which some think poses a global threat to every democracy, and for some very good reasons.
We can demand that public funds invest more ethically, and we probably should. But, keeping in mind that these funds are already under-capitalized to meet their future obligations, our ethics could have a cost that ultimately will have to be met by the people who get the retirement benefits as well as all taxpayers in Colorado, Oregon, California, New York, Ohio and many other states. We will have to put more of our money where our mouths are – and that is a harder sell than dumping stocks.