Three investment groups announced this week that they will divest from the two major private prison corporations that constitute a massive share of America’s prison-industrial complex.
Scopia Capital, DSM, and Amica Mutual Insurance have all pledged to remove their collective investments of about $60,000,000 from the Corrections Corporation of America and the GEO Group — the two prison companies that own 75 percent of the nation’s private prisons. The decision to divest comes on the heels of pressure from Color Of Change, a racial and economic justice advocacy group that ran a campaign asking a total 150 companies to stop investing in the private prison industry.
“In accordance with the principles of the UN Global Compact, with respect to the protection of internationally proclaimed human rights, the pension fund has divested from the for-profit prison industry,” DSM President Hugh Welsh said in a Color of Change statement. “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.”
Sixty million dollars is actually a drop in the bucket for GEO and CCA. The groups together earn over three billion dollars annually on private prisons, and even more on immigrant detention centers. But the move signals a growing distrust in the ballooning private prisons industry, which grew by “approximately 1600% between 1990 and 2009,” according to the American Civil Liberties Union (ACLU).
Other groups have previously reportedly divested, as well, but this may be the largest single successful divestment campaign.
“It’s an important first step,” said Carl Takei, the private prison expert in the ACLU’s National Prison Project. “To the extent that investment firms are committing themselves publicly to divestment, that is a very important step. To the extent that investment firms are deciding that private prisons are a bad investment, that’s even more important.”
CCA lost four of its prison contracts with states last year — and that combined with slowly falling imprisonment rates may actually make private prisons not just morally questionable but financially unstable, Takei pointed out.
“We’ve started to turn the corner on mass incarceration and if that’s something that makes private prisons a bad investment, that’s important,” Takei added. He said that if investment firms chose to divest for ethical reasons, it is “an important first step,” but that “the financial reasons justification would be huge.”
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.