Why Woke Asset Managers Are Still Loading Up On Private Prison Stock
Fidelity, BlackRock, State Street and Vanguard are all big private prison investors despite social justice pledges.
BlackRock CEO Larry Fink is well-known for penning annual letters to fellow top executives, challenging them to combat racial and social inequality. When protests over the murder of George Floyd by a Minneapolis police officer roiled the country in May 2020, Fink wrote that the incident shows how much work we have to do to build a stronger, more equal, and safer society.At the same time, BlackRock is the largest investor in U.S. private prison firm CoreCivic, with a stake of 15.38%. If mass incarceration in general doesnt sound particularly in line with racial justice Black Americans are more than five times as likely to be incarcerated as white Americans profiting from private prisons is worse. CoreCivic and rival GEO Group have faced numerous lawsuits and other accusations of housing people in unsafe conditions, providing abysmal healthcare and food, keeping inmates as long as they can to maximize revenue, and paying staff as little as possible to limit expenses.
Its Hell, a Black prisoner who goes by Abe told us, describing his experiences at CoreCivics Trousdale Turner Correctional Center in Hartsville, Tennessee. Abe, who has also been incarcerated in publicly-managed facilities, said conditions at Trousdale are particularly bad because of understaffing and poorly-trained guards.
Most Prominent Prison Stocks On Robinhood
The three most prominent companies running private prisons in the United States are CoreCivic , GEO Group and Management & Training Corporation .
Of the top three, only CoreCivic and GEO Group are publicly traded in the New York Stock Exchange. The performance of these stocks is tracked on the NYSE Composite Index, which tracks the price movements of all common stocks on the New York Stock Exchange, the U.S. Securities and Exchange Commission writes.
One can invest in these prison stocks on Robinhood and other brokerage accounts. While these companies are the most prominent publicly traded companies running for-profit prisons, they are not the only publicly traded companies involved in the prison industrial complex. In fact, you can be invested in the network and not realize it.
Millions In Us Taxpayers Money Invested In Private Prison Firms
At least 20 public worker pension funds have invested in firms profiting from Trumps immigration policy, including California and New York
- This story is co-published with the Documented news website and newsletter
The two firms have become more attractive to investors after Donald Trump became president, pushing tougher immigration policies. The firms have secured contracts worth hundreds of millions of dollars from Immigrations and Customs Enforcement which has turned to private operators as it has detained growing numbers of immigrants.
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Whos Getting Rich Off The Prison
You likely already know how overcrowded and abusive the US prison system is, and you probably are also aware that the US has more people in prison than even China or Russia. In this age of privatization, of course, it’s also not surprising that many of the detention centers are not actually operated by the government, but by for-profit companies. So clearly, some people are making lots and lots of money off the booming business of keeping human beings in cages.
But who are these people?
Using NASDAQ data, I looked through the long list of investors in Corrections Corporation of America and GEO Group, the two biggest corporations that operate detention centers in the US, to find out who was cashing in the most on prisons. When we say “prison-industrial complex,” this is who we’re talking about.
Henri WedellThe individual who’s invested the most in private prisons is Henri Wedell, who started serving on CCA’s board of directors in 2000, when the company was struggling with scandals related to prisoner abuse and mismanagement. He now owns more than 650,000 shares in the company, which is far more successful these days. Those shares are worth more than $25 million.
I called Wedell to ask him what it was like to make a fortune from the incarceration of others, and whether it bothered him to profit off a system that puts more people in prison than any other country in the world.
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What Are Private Prisons
Private prisons are privately owned facilities that profit off of the incarceration of people. They’re part of a larger network of companies, legislators, government systems and investors known as the prison industrial complex. Other companies involved in the network are goods and services companies that sell items at inflated prices to incarcerated people and prison labor companies that pay low to no wages for incarcerated peoples’ labor, the team at Forbes writes.
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According to the Sentencing Project, an organization dedicated to promoting and educating people on the need for systemic change in the criminal justice system, private prisons hit their peak in 2012 with â137,220â people incarcerated in private prisons across the country. Since then, the numbers have decreased â16 percentâ to â115,428â people in 2019, making up â8 percentâ of the total state and federal prison population.
According to the American Civil Liberties Union , private prisons held nearly three-quarters of federal immigration detainees in 2016, as reported by the U.S. Immigration and Customs Enforcement.
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The Political Bribe That Turned Prisoners Into Profits
Private prison companies are exploiting our corrupt political system to lock people up for profit.
The two largest private prison companies alone have spent $35 million on lobbying and campaign contributions to state and local officials since 1989. Evidently, it was money well spent:
The number of prisoners housed in private facilities has jumped 1600% since 1990.
By buying favor with the right politicians, for profit prisons have been able to secure everything from lucrative government contracts to harsher laws to guarantee a steady stream of inmates for their facilities. These companies turn our tax dollars into a lucrative business that hauls in $3 billion a year. All of which contributes to America incarcerating more people than any other country in the world.
Our latest episode of Follow the Money takes a look at the simple, 3-step process:
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Note: All Sources Are Linked at the Bottom of the Page
Step 1: Campaign Contributions
Private prison corporations exploit our corrupt political system by using campaign contributions and lobbying to curry favor with legislators and regulators. CoreCivic and GEO Group, the two largest private prison companies in the United States, have funneled more than $10 million directly to state lawmakers since 1989. They pick candidates who are likely to win and donate enough money to ensure they get a seat at the negotiating table when it comes time to start writing laws.
Step 2: Hire some lobbyists
The Problem With Private Prisons
On the surface, a private prison seems like a great idea. If it costs the government $200 per day to incarcerate someone, and a private company comes along and says they can do it for $150 per day, then why not save the government money while allowing a corporation to profit? The problem lies in the economics behind prisoners.
One of the goals of the prison system is to rehabilitate people. Based on a U.S. Department of Justice study in which data from 24 states measured state recidivism rates from 2008 through 2018, the recidivism rate was 82%, possibly putting that goal in doubt.
Besides that point, if prison was 100% effective, the private prisons would be working themselves out of business. This makes one wonder: is prison supposed to rehabilitate the individual, or is it supposed to earn money? If the goal is to earn money, then a high prison population is the end goal.
Finally, the law needs to be structured in such a way that it allows a steady stream of new inmates. This ties back to that lobbying aspect: stricter laws mean more people in the system. More people in the system means more money for the prison. Many have argued that this is the entire reason that the war on drugs was started: another set of laws that could incarcerate thousands of people every single year.
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Big Banks Leaving The Private Prison Business
At the US Southern border, immigrant families are held for unknown amounts of time in facilities that are often grossly overcrowded and understaffed. Across the country, citizens in prison face similar conditions. What these facilities have in common is that theyre both private prisons. Private prisons hold about nine percent of the nations total prison population and about 73 percent of immigrant detainees, reports the New York Times.
This year, banks responded to wide-spread pressure from social justice groups, corporate responsibility organizations , and shareholders. Wells Fargo, Bank of America, SunTrust, JPMorgan Chase, PNC, BNP Paribas, Fifth Third Bancorp, Barclays, and U.S. Bancorp all announced that they will no longer issue loans to the two largest private prison operators, CoreCivic and GEO Group.
GEO Group and CoreCivic are contracted by US Immigration and Customs Enforcement , the Federal Bureau of Prisons, and the US Marshals Service to run facilities that hold immigrants. Private prison operators earn substantial profits from detention as the number of detainees increases.
Though eight banks have bowed to pressure from justice reform groups and concerned investors, five smaller banks have not yet made the commitment: Regions Financial Corporation, Citizens Financial Group, Pinnacle Financial Partners, First Tennessee Partners, and Synovus Bank.
Top 7 Reasons Why You Should Invest In Private Prison
Rabbi, Skokie Valley Agudath Jacob, Founder of Uri L’Tzedek: Awaken to Justice
Dear readers, do I have a hot stock opportunity for you.
Why invest in boring stocks like Exxon, McDonalds, or Lockheed Martin when you could invest in one of America’s hottest growth sectors — the private prison industry!
Here are 7 great reasons, quoted directly from the Corrections Corporation of America’s 4th Quarter Investor Report on why you should invest in prisons, today!
1. “High recidivism”
2. “One in every 100 U.S. adults are in prison or jail”
3. “At current imprisonment rates , prison populations would grow by about 80,400 between 2012 and 2017, or by more than 13,000 per year, on average”
4. “Constraints on new public prison construction and compelling value proposition have benefited the partnership corrections industry”
5. “No meaningful, new competitor has entered industry in 20 years”
6. “Filling Vacant Beds Drives Earnings”
7. “Local governments reduce ongoing and long-term pension obligations.”
Why wait? You can make money off our spiraling prison inmate population, help cut down on those pesky pensions, and participate in the destruction of the future of millions of American lives, all at the same time! Invest today!
A Slow Motion Version Of The Death Penalty: Why Harvard Shouldnt Invest In Prisons
In early 1971, Terrell Don Hutto was the warden on a cotton plantation the size of Manhattan. About a decade later, hed use lessons learned on the plantation to create something new, crude, and often in Harvards portfolio the worlds first corporate prison.
Hutto began his career in incarceration on the Ramsey Prison Farm in the 60s.
In many ways, Ramsey was a typical Southern prison. After slaverys abolition, former Confederate states realized the 13th Amendment handed them a path forward. Neither slavery nor involuntary servitude would exist in the U.S., it declared, except as a punishment for crime. So states with economies bruised by emancipation eyed prison labor as new fuel for the old slave economy. They purchased plantations, attached them to prisons, and began filling them with Black men many for crimes, like selling crops without a white persons permission, invented to incarcerate them.
When Hutto ran Ramsey, every Black person it imprisoned was forced to work the cotton plantation, plus a fraction of the prisons few white prisoners. Dusk to dawn, they picked cotton across sprawling fields. None were paid. Slow hands in the field often meant solitary confinement or being fed a punishment diet, which one man testified he lost 30 pounds on. Academics flocked to Texas to document the old slave songs, reaching back to West Africa, that rang out on its prison plantations.
Luckily, this history didnt shake investors.
Investors Question Private Prison Holdings
In recent decades, an increasing share of incarcerated people have been held in private prisons. Between 2000 and 2016, the number of inmates in private prisons grew five times faster than the rise in the total incarcerated population. Reports of neglect, abuse, and preventable inmate deaths have led to scrutiny of private prison operators. In August 2016, the US Department of Justice announced it would reduce its reliance on private prisons to house inmates, though in 2017, it reversed that position.
Now, the issue is attracting attention among environmental, social, and governance or ESG investing trends. Advocates for prison divestment are calling on financial institutions to give up their shares in private prison companies and asking public funds, universities, and other investors to take a stand as well.
Some Organizations Opt to Divest
Some students have advocated for their universities to divest from private prisons with varying results. In 2015, Columbia University became the first US university to divest from private prisons after students urged it to sell its shares in Corrections Corporation of America and G4S. Students argued that private prisons encourage mass incarceration and longer prison terms because they benefit financially from incarceration.
Some students have advocated for their universities to divest from private prisons with varying results.
Other Investors Turn to Shareholder Engagement
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Companies Part Of The Prison Industrial Complex
A prison stocks list can be found on Prison Free Funds, an organization dedicated to identifying publicly traded companies involved in the prison industrial complex and the border industry. They also provide tools to help expose how much of your mutual fund investments and 401 is invested in the complex.
For example, Acadia Healthcare Co is a healthcare company that provides residential re-entry programs. It’s also involved in the border industry by detaining a small number of unaccompanied immigrant youth, Prison Free Funds writes. Aramark provides food, commissary and other goods, as well as prison labor, to the prison industrial complex. SuperCom Ltd. is another company involved in the complex. The company owns the California-based Leaders in Community Alternatives , an electronic monitoring and community corrections company, providing community corrections and e-incarceration to the prison industry, Prison Free Funds writes.
Investing in prison stocks is a personal choice however, if you would like to avoid it, it’s essential to understand that the complex extends further than private prison operators. Research is critical to wise investments.
Are You Unknowingly Investing In Private Prisons
Black woman looking shocked, covering her face with hands, peeping through fingers
While theres a need to house people convicted of crimes, some U.S. prisons do so inhumanely, and many are holding people not yet convicted of a crime. Private prisons pose particular problems. They are part of what is known as the prison industrial complex. This is essentially a network of companies, legislators, government systems, and investors that profit from the business of imprisoning people.
The prison industrial complex also includes companies that sell goods and services at inflated prices to incarcerated people and companies that pay low or no wages for prison labor. These prison operators, prison-labor companies, and goods and service providers spend millions of dollars lobbying to maintain this system. That effort in and of itself suggests that profit is a stronger motivator for private prisons than keeping communities safe or rehabilitating those who have committed crimes.
Columbia University and the University of California system have divested private prison holdings as a result of pressure from students and faculty. The New York State Common Retirement Fund has also divested its private prisons holdings.
How to tell if youre supporting prisons
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Retirement Plans Are Invested In Private Prison Operators And Other High
Mass incarceration is particularly devastating for poor communities, immigrants, people of color, and their families. For-profit firms have flooded money into prison and immigration jail infrastructure and services, and have used industry associations to lobby for harsher policing and longer sentencing, even for non-violent offenders. People who are incarcerated work for pennies per hour while their families pay exorbitant fees to keep them supplied with bare necessities. Powerful, private equity interests and corporations reap enormous profits from the militarization of the U.S.-Mexico border and the policing of immigration.
Asset managers like Vanguard are investing in economic systems of oppression and exploitation and theyre using workers retirement plan savings to do so. Through Vanguard, the retirement plans of companies like Amazon and Comcast are investing hundreds of millions of dollars into private prison operators and other companies recommended for divestment by the American Friends Service Committee state violence criteria.
Danish Funds Invest In American Private Prisons
When one thinks of financial support for Americas privatized prisons, one assumes it primarily comes from entities in the United States. But that is not always the case.
A February 18, 2020 story by Danwatch, a Danish investigative website, uncovered three Danish pension funds that had invested into two of Americas biggest prison profiteers: CoreCivic and the GEO Group. PKA, Villiv, and Lærernes Pension are pension funds for Danish social educators, social workers, nurses, and medical secretaries.
PKA invested the equivalent of about $8.5 million in the two private prison companies. Lrernes Pension has invested about $1.1 million in CoreCivic, and Villi invested about $160,000 in the two companies.
The Denmark pension fund investments come as Americas largest pension funds and banks have increasingly divested themselves from these prison profiteers. Politically, the companies are becoming pariahs, as some state Democratic parties and political groups are refusing to accept donations from private prison companies.
American public opinion of private prison companies has been trending against the profiteers. The Obama administration issued an executive order to phase out federal use of private prisons, but that order was reversed by President Trump. Both CoreCivic and GEO Group were donors to the Trump campaign.
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