New York City has become the first pension system in the nation to have totally divested its holdings in private prison companies, NYC Comptroller Scott Stringer said on Thursday.
Speaking at an afternoon news conference at the Dinkins Municipal Building surrounded by Trustees of the city’s pension funds, Stringer said the funds had finished the process of liquidating its $48 million investment in private prison company stocks and bonds.
In May, the pension trustees voted to divest from these firms and since then the comptroller’s office and the pension funds have sold their holdings in GEO Group, CoreCivic and G4S. The process was started last September when pension trustees first voted to study divesting from private prison companies, citing concerns about widespread health and safety violations as well as human rights abuses across the industry.
“We are standing up for what’s right,” Stringer said. “Our criminal justice system has failed a generation of Americans because, for decades, we built bigger prisons instead of greater schools, and we were ‘tough on crime’ instead of ‘smart on crime.’ … Divesting is simply the right thing to do -- financially and morally.”
A study conducted by the comptroller’s office and outside consultants found that divesting would add little or no risk to the Pension Funds’ portfolios. This finding was substantiated by the Pension Funds’ counsel, which concurred that divestment would not violate the Trustees’ fiduciary duty.
Additionally, an analysis conducted by Stringer’s office and outside consultants found inherent investment risks in for-profit prison companies.
Stringer said that reports have exposed a pattern of human rights issues in private prisons which can lead to reputational, legal, and regulatory risks, which could harm investors.
The five largest city pension funds consist of the New York City Employees’ Retirement System; the Teachers’ Retirement System; the New York City Police Pension Fund; the New York City Fire Department Pension Fund; and the Board of Education Retirement System.