California’s teacher pension fund is pulling its investments out of two private prison companies that have contracts to house immigrants detained at the Mexican border.
The retirement board’s 6-5 vote Wednesday to divest from the companies followed intense activism from teachers and left-leaning organizations that wanted the $229 billion pension fund to dissociate itself from private prisons.
Their calls for divestment led the pension fund to conduct its own investigation, which it published in a 28-page report that did not include a formal recommendation. CalSTRS staff reported that they visited immigrant detention centers and consulted with the companies before providing their report to the teachers’ retirement board.
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“The board conducted a review of the staff research; we agreed that the engagement efforts were thorough; and, listened to our expert investment consultants. Based on all the information and advice we were provided, the board decided to divest according to the policy criteria,” said Teachers’ Retirement Board member Harry Keiley.
The activism began last spring, when the Trump administration began separating children from adults detained at the Mexican border. The administration has ended that practice, but it shaped the views of teachers and retired teachers who wanted their pension fund to withdraw money from the companies.
They drew attention to CalSTRS investments in companies with Department of Homeland Security contracts.
“This really came out of a movement of educators from their deep love of children and the families they serve. We were horrified to see the family separation and we wanted to look at any part we could influence,” said Cathy Campbell, president of the Berkeley Federation of Teachers.
Teachers and union members submitted petitions to CalSTRS encouraging them to pull money out of the companies.
“The news and images of family separation were fresh,” said Berkeley High School teacher Josh Austin. “This was an opportunity to put a dent in (the Trump) administration’s horrendous policies.,”
Both companies in July told The Sacramento Bee they were committed to providing humane treatment to detained people, and to working closely with the U.S. government through Republican and Democratic administrations.
Divesting from any industry is a controversial measure for a public pension fund.
Generally, CalSTRS and the larger California Public Employees’ Retirement System prefer to use their clout as a massive investors to persuade companies to adopt policies that California retirees favor.
For instance, CalPERS has nudged sporting goods stores to restrict sales of certain kinds of weapons and ammunition. CalPERS also encourages companies to consider the long-term risks of climate change.
CalSTRS has similar policies. In May, it voted to step up its engagement with gun retailers and consider divesting from them at a later date.
Pension fund staff members have also warned that divesting from an industry can restrict their ability to earn money, which could increase their overall risk. Both funds, nonetheless, have divested from tobacco and coal companies.
“I am proud of my retirement fund for acting to improve the lives of children. After all, we try to improve children’s lives every day,” Masha Albrecht, a Berkeley High School teacher, said in a news release that was distributed by the advocacy group Educators for Migrant Justice.