It’s an open secret; one that AFT, NEA, and their supporters are reticent to discuss:
Public pensions, including those managed on behalf of educators, invest hundreds of millions of dollars into private prisons and immigrant detention centers.
According to a two-part (part one & part two) series published by AFT last year, public pensions own more than 2.3 million shares in the two largest private prison corporations in America, CoreCivic and Geo Group.
Retirement funds for public school teachers (as well as other government employees) in several states have a combined $90 million invested in Corrections Corporation of America (CCA) and GEO Group, the largest private prison companies in the world.
According to reporting by Vice, “The retirement funds for public employees and teachers in New York and California together have about $60 million ($30 million each) invested in CCA and GEO. Teacher retirement funds in Texas and Kentucky have $8.3 million and $4 million invested in prisons respectively, and public employees in Florida ($10.3 million), Ohio ($8.6 million), Texas ($5.6 million), Arizona ($5.3 million), and Colorado ($2.25 million) are also connected to the industry.”
This is merely the tip of the iceberg as public pensions are also heavily invested in two of the private prison industry’s biggest stock holders, Vanguard and Fidelity. “Together, they [Vanguard / Fidelity] own about 20 percent of both CCA [CoreCivic] and GEO.”
As an example, take my home state of New Mexico. The primary pension fund for K12 educators is the New Mexico Education Retirement Board (NMERB). Despite long time pressure for divestment from the PIC, retirement boards tend to kick the can down the road when under pressure. The simple reason is clear: private prisons typically provide great return in investment.
A quick cross-reference of NMERB investments finds that dollars from New Mexico teachers’ pension fund more than $2.4 billion in PIC direct and adjacent corporations, ranging from direct service providers (CoreCivic and Geo Group), to construction and equipment.
Managers of teacher pension funds don’t seem to mind morally compromised investments as long as they provide reliable returns.
When I reached out to spokespeople for the teacher-retirement funds of New York and California, both emphasized that the job of these funds is to make money so teachers can enjoy their golden years, and when you manage funds as vast as theirs, you might get into some ethically questionable territory. They also said that the private-prison investments are likely tied to index funds, which means they are part of mutual funds that mimic the ebb and flow of the market as a whole. In other words, no one is really deciding to invest in prisons, they just aren’t deciding not to invest in prisons.
While many teachers’ unions are calling for removal of police from schools (but not the over suspension of students of color which sparks the school-to-prison pipeline), no such demand is made for divestment from the prison industrial complex, thus maintaining funding of the pension-to-prison pipeline.
This research is ongoing. Please reach out with questions, suggestions, complaints, and compliments.