In a victory in the ongoing fight against prison privatization and the big business behind mass incarceration, three companies have agreed to pull $60 million in investments out of the GEO Group Inc. and Corrections Corporation of America (CCA), the two largest private prison corporations in the United States. The three companies are investment groups Scopia Capital Management LLC, DSM and Amica Mutual Insurance Co. GEO Group and CCA currently own 75% of the private prison industry in America, and the investments were withdrawn after a campaign by ColorofChange.org put pressure on them and 147 other companies, Think Progress reports.
DSM President Hugh Welsh explains his company's action:
In accordance with the principles of the U.N. Global Compact, with respect to the protection of internationally proclaimed human rights, the pension fund has divested from the for-profit prison industry. Investment in private prisons and support for the industry is financially unsound, and divestment was the right thing to do for our clients, shareholders, and the country as a whole. DSM is committed to good corporate citizenship and operating in a way that contributes to a better world.
Think Progress notes the problems with the private prison industry:
Studies have found that private prisons spend millions on lobbying to send more people to jail for longer periods of time. The facilities are often rife with abuse and neglect, too; accusations against the companies range from wrongful death to bad sanitation and even forcing a woman to give birth in a toilet. They do no favors for states that support them, either; Idaho was one of the places that ended its contract with CCA after the company handed over a $1 million settlement for falsifying staff hours and leaving mandatory monitoring spots unattended.
While the $60 million is only part of the $3 billion the companies make in profits each year, the investment withdrawals show a growing momentum, after CCA lost contracts with four states last year and rapper Kanye West brought CCA to the attention of the masses in his song "New Slaves." The AFL-CIO stood up against prison privatization and mass incarceration in a resolution at its national convention last September.
The AFL-CIO came out against private prisons and the business of mass incarceration targeting people of color. Check out a fact sheet on mass incarceration here.
AFL-CIO chief economist William Spriggs says:
These actions highlight that investors have fiduciary and moral obligations; and they can fulfill both. These investors in this particular case look at the business model of spending millions of revenue on lobbying that lowers investors' returns. Clearly, a business model that needs so much lobbying to drink at the public trough is not viable. And, in this case, lobbying that encourages policies that hurt low-term growth broadly by needlessly reducing the labor force size.