Growing up in the African-American community, one becomes intimately familiar with numerous time-honored phrases and colloquialisms. One such phrase was introduced to me as a teenager while walking to the corner bodega with a friend in East Camden.
As we walked in the store, we saw (and heard) a brand new BMW with custom rims and a quality stereo system where the vocals weren’t drowned out by the power of the subwoofer. I said to my friend, “That car is phat,” (I’m telling my age). He looked back and said to me that he’d have one in a few short years. I asked him how. He explained his intention to become a drug dealer, and that his older cousin would help him. I suggested that he not do that, but my friend responded by reminding me of how fly that car was that just drove by.
At that moment, an elder approached us as we were walking away from the cashier. He put his hand on my friend’s shoulder and said to us, “Boys, all money ain’t good money.”
It is very true that all money ain’t good money; there is a reason why drug money is called “dirty money.” But I shouldn’t have to feel that way about my pension, right? I am an educator, I love what I do, and I am thankful for my public employee pension, but is it okay to knowingly pay into (and eventually retire with) a pension that invests in the misery of people who look like me – the very people I seek to empower as an educator?
Generally speaking, a pension plan is a retirement plan whereby employers must match employee contributions to a retirement savings account. The funds are often invested by the employer on behalf of the employee, and all earnings go to the employee upon their retirement. The American Federation of Teachers (AFT) published two reports, in 2017 and 2019, on the risks of investing in private prison companies by pension investors.
These reports were made because numerous pension funds nationwide do or once did invest the pension funds of their employees in private prison companies or companies associated with the private prison industry. The reports highlight publically traded companies, specifically CoreCivic (CCA), GEO Group (GEO) and General Dynamics (GD), whose business either is private prisons or profits from them.
The report also mentions various hedge funds that invest in these companies.
These companies, CCA, GEO and GD, all benefit from both the mass incarceration of Black and Brown peoples and the detention of immigrant families due to the Trump Administration’s zero tolerance policy of immigrant detention and family separation.
CCA is the largest private prison company in the United States. It owns and operates 8 immigrant detention centers, including family detention centers. GEO owns correctional facilities throughout the world and is the largest provider of electronic monitoring in the United States. They also operate family detention centers. GD, a defense contractor, is not a private prison company, and yet it is responsible for casework management for detained immigrant youth.
A report released by the American Civil Liberties Union, Human Rights Watch, and National Immigrant Justice Center told of the injustices of immigration detention under the Trump administration. According to the report, detainees are without access to legal counsel, access to proper health-care, and access to proper hygiene while living in unsanitary conditions… all in the midst of a global pandemic where the United States is the hub of Coronavirus activity.
Meanwhile, these corporations continue to make money from the mass incarceration of Black people. Black people are incarcerated at more than 5 times the rate of whites; 5% of illicit drug users are Black, yet Black people represent 29% of those arrested and 33% of those incarcerated for drug offenses.
The private prison industry, reinforced by the school-to-prison pipeline, ensures that Black children are ushered into prisons. Nationwide, Black children are 14% of all youth, yet represent 32% of children who are arrested, 42% of children who are detained, and 52% of children whose cases are judicially waived to criminal court.
According to the Sentencing Project, the juvenile incarceration rate for white youth is 93 versus 862 for Black youth in the state of Pennsylvania; 11 white youth to 337 Black youth in the state of New Jersey.
Table 1: Comparison of Incarcerated By Race (PA vs. NJ)
|White Incarceration Rate||204||94|
|Black Incarceration Rate||1,810||1,140|
|Latinx Incarceration Rate||668||206|
|Black : White Ratio||8.9 to 1||12.2|
|Latinx : White Ratio||3.3 to 1||2.2|
|White Juvenile Incarceration Rate||93||11|
|Black Juvenile Incarceration Rate||862||337|
|Latinx Juvenile Incarceration Rate||312||55|
*Source: Sentencing Project
In the three months after the election of Donald Trump, the stock prices of CCA and GEO doubled. From June 2020 through August, GEO’s stock price increased by 7.14% and CCA’s 22.6%. That means great returns on all pension investments and quite a few state pension programs are doing well for their public employees.
New Jersey was once one of those states. However in 2018, the New Jersey Pension Fund divested $1.3 million from its GEO holdings. However, the pension fund still owns $156 million in equity and fixed income investments in GD; a company that builds war machines and violent weapons is charged with caring for children.
Defense contractors aren’t social workers. However the federal government thinks so, but I digress.
Another one of those states is Pennsylvania’s Public School Employees’ Retirement System (PSERS). Sydney Edelson, inspired by Citizen Stewart’s challenge to us all on one of the 8 Black Hands podcasts, did some research and found that PSERS is managed by numerous investment groups, including Apax Partners and Platinum Equity Capital Partners; both listed on the AFT asset manager watch list.
Apax Partners is the private equity owner of Attenti; a global provider of electronic monitoring technologies for all levels of law enforcement around the world. Platinum Equity Capital Partners is the private equity owner of Securus; whose stake is also held partly by Detroit Pistons team governor Tom Gores.
Securus is a predatory telecommunications company charging high rates and fees to inmates and their families as well as recording confidential conversations between inmates and attorneys, forwarding to prosecutors.
In addition, PSERS also owns shares in CCA and GEO, in addition to a fledgling property connected to Trump Administration senior official Jared Kushner.
The prison industrial complex is big business; lining the pockets of capitalists who hope to that working people are placated by their pension earnings. Thankfully, others are choosing to divest themselves from private prison investments.
In addition to New Jersey, the California State Teachers’ Retirement System (CalSTRS) voted to divest from CCA and GEO, citing human rights violations of immigrants and their children detained at their facilities. Also, the Chicago Teacher’s Pension Fund added immigrant detention centers and other private prison operators to its list of prohibited investments.
As for Pennsylvania, the president of Local 634 UNITE HERE union representing 2,200 public sector school cafeteria employees and noon-time aides working for the Philadelphia School District, voiced her displeasure in an op-ed saying she couldn’t “bear the thought that [her] retirement will be funded off the grief of the children served.”
Nevertheless, PSERS, comprised of a predominately white board of trustees, shrugged off calls from critics and voted to invest $300 million into a new fund managed by the firm. They shrugged those criticisms off like my friend did the helpful advice from that elder that day before leaving the corner bodega. He did exactly what he said; he became a drug dealer. Two years later, he was driving his own BMW just like he said he would. Unfortunately, he lost his car and his life just one year after that.
Employers, employees, and investment managers may not lose their lives because of private prison investment, but maybe, just maybe, our souls are on the line. If we’re all so serious about Black lives mattering and antiracism in our schools, challenging the ways capitalism makes racism a reality must be at the top of our agenda.
This post originally ran on the Philly’s 7th Ward blog here.