New York City sold off $48 million in private prison stocks and bonds, making it the first major public pension system in the nation to fully divest from the industry, pension trustees announced Thursday.
Comptroller Scott Stringer noted reports of alleged human rights abuses across the private prison industry could imperil the reputation and value of the city’s investments.
The city divested from three companies, The GEO Group, CoreCivic and G4S, and both The GEO Group and CoreCivic also operate immigrant detention centers, according to Stringer.
“As President [Donald] Trump ratchets up hateful rhetoric and steps up deportations, private prison companies are going to see enormous reputational harm — and that means they’ll become even riskier investments,” Stringer said in a statement. “Divesting is simply the right thing to do — financially and morally.”
A G4S spokesperson said the company derives less than 5 percent of its revenues from running prisons and does not run any prisons in the United States.
In a statement, The GEO Group rejected the “baseless claims” that led to the “misguided” divestment move.
“We’re proud of our longstanding record providing high quality services, while treating the men and women in our care with the respect and dignity they deserve,” The Geo Group added.
CoreCivic did not respond to a request for comment.
Before the trustees voted to divest from the industry, they reviewed a study that found there are “inherent investment risks” in for-profit prisons, given that lawsuits related to human rights abuses could prove expensive and that the companies’ profits tend to rely on government contracts and political fortunes.
Stringer said the pensions pulled investments from companies that derive at least 20 percent of their revenue from private prisons. He plans to analyze the funds annually to ensure they do not make any additional investments in the industry.