ERB urged to divest from private prisons

Firms’ shares have done poorly; board OKs policy change on divestment votes

SANTA FE — Board members for New Mexico’s teacher pension fund took a step Friday toward allowing politically-flammable investment holdings — specifically in private prison companies — to be dumped in certain situations.

However, Educational Retirement Board members ultimately held off on a direct vote to divest from two private prison companies despite pressure from numerous teachers and advocates to do so.

At issue is roughly $480,000 in ERB investments in two private prison companies —GEO Group and CoreCivic — that have come under scrutiny amid a national debate over immigration laws and for their response to the ongoing coronavirus pandemic.

Calls for the teacher pension fund to divest, or rid itself of the investment holdings, have gathered momentum in recent months, and several board members said Friday they support such action.

“I just want the opportunity every once in a while to say ‘Wait a minute ... we don’t want to do that anymore,’” said state Treasurer Tim Eichenberg, who moved to direct ERB staff to come up with investment policy changes that would allow for divest

ment votes.

That motion, which was approved unanimously, was necessary because the $12 billion pension fund’s chief investment officer said current policies do not give staff the authority to pick and choose stocks from market-determined index funds.

An outside attorney and investment adviser also reminded pension fund board members they are required to prioritize the fund and its beneficiaries — current and future retirees — over outside interests and concerns.

“You’re not supposed to sacrifice return for other particular factors,” said attorney David Powell of the Washington D.C.based Groom Law Group.

However, both GEO Group and Core Civic have been poorly-performing investments over the last year.

Nearly a year ago, the teacher pension fund had stock shares valued at $533,043 with Florida-based GEO Group Inc. and roughly $505,342 invested with Tennessee-based CoreCivic.

As of last week, those investments had dropped to $267,817 in GEO Group and $215,004 in CoreCivic, according to ERB figures.

In the case of CoreCivic, the decline in stock value has prompted Standard & Poor’s to remove the company from an index fund the ERB invests in — meaning the pension fund will no longer be invested in the private prison company starting next week.

But the investment in GEO Group will remain in place for now.

The Friday board meeting was conducted remotely and broadcast online. No public comments were taken, though several individuals who had logged on to the broadcast interrupted proceedings to urge board members to vote in favor of divesting.

Sylvia Johnson of the Santa Fe Dreamers Project, which has spearheaded the divestment movement, said board members have been receiving hundreds of emails daily from teachers around New Mexico who do not want their retirement funds invested in private prison companies.

She expressed disappointment the ERB board did not vote directly Friday to change its policies and divest from the two companies, but said the push would continue.

“Sometime you just have to do the right thing — especially in a case like this where doing the right thing is also the most financially sound option,” Johnson said in a statement after the meeting.

In New Mexico, GEO Group operates several private prisons and related facilities and CoreCivic runs a private prison and a U.S. Immigration and Customs Enforcement detention center in Cibola County.

Meanwhile, some pension funds around the country have already moved to divest fully from the private prison industry.

And private prison companies are not the only publicly traded firms to be targeted by advocacy groups, as pension funds have faced pressure to divest from tobacco companies, fossil fuel firms, gun manufacturers and more.

Divestment has also been a tactic used to apply pressure on foreign governments, including Iraq, Sudan and, during apartheid, South Africa.

The ERB had 60,000 active members and roughly 50,000 retirees as of last year.