ALBANY — State Controller Thomas DiNapoli this week took the rare step of divesting all direct state pension fund holdings in private prison companies.
The move comes amid concerns about President Trump’s stepped up immigration detainment policies.
“For nearly two decades, the fund has recognized private prisons is a controversial industry and restricted investments,” said DiNapoli spokeswoman Jennifer Freeman. “The current immigration situation is creating even more risks in their business model, which has consequences for their long term value.”
The state Controller’s Office since 1999 has restricted state pension fund investments in private prisons, which are barred in New York. DiNapoli updated the list of companies subjected to the restrictions in 2016.
But as of June, the $206.7 billion state pension fund — the third largest public fund in the country — continued to have a modest $9.6 million in holdings in two private prison companies, The Geo Group and CoreCivic.
DiNapoli on Thursday ordered the divestment of the pension fund’s direct holdings in those two companies.
“Because of the limited size of these holdings, imposing these restrictions will not negatively impact the (pension) fund,” Freeman said..
The move drew immediate praise from pro-immigrant groups.
“As Trump ruthlessly seeks to criminalize immigrants and people of color and put us in cages, his administration relies on the morally bankrupt private prison industry to hold our communities captive,” said Javier Valdes, co-executive director of Make the Road New York. “With the Comptroller’s bold action…he is ensuring that New York stands up to this grotesque industry.”
Make the Road New York recently issued a report that found full implementation of the President’s “zero tolerance” policy at the border would expand the number of people held in private immigration detention up to 580% within two years.
“New York State is withdrawing itself from an industry that cages children and thrives off the separation of our families, joining cities and universities that have together divested billions from private prisons,” said Cindy Martinez, organizer at Enlace and member of the National Prison Divestment Campaign & Freedom Cities.
DiNapoli over the years has been urged by activists to divest pension funds from a host of companies, including the fossil fuel industry. He almost always declines, saying his fiduciary responsibility as the sole trustee of the pension fund its value and the pensioners it serves. He also has suggested he could do more as a shareholder to pressure companies to implement reforms.
Deciding whether to divest “requires a high level of due diligence” and input from the office’s counsel and investment and risk staff, Freeman said..
In deciding to divest from The Geo Group and CoreCivic, Freeman cited concerns about a number of different factors related to private prisons, including immigration detention, and the fact it will not significantly harm the overall pension fund.
Melissa Nunez, a trans woman who said she suffered physical and mental pain as well as being sexually assaulted during a six-month detainment at a CoreCivic facility, urged other states and corporations to follow DiNapoli’s lead by divesting from private prisons.
“New York is sending the message that no one should invest in companies that torture, separate and criminalize our community,” Nunez said.
Sen. Brian Benjamin, a Harlem Democrat who last December introduced a bill to force the state pension system to divest from private prisons, praised DiNapoli for acting unilaterally.