CalPERS: Stop Investing in Migrant Abuse Companies
CalPERS Executive Officers and Board Members
More than three months after the court-ordered deadline to reunite all families ripped apart at the border under the Trump administration's zero tolerance policy, 150 families remain detained in for-profit prison companies' facilities. At least four companies in CalPERS' portfolio – CoreCivic, GEO Group, General Dynamics, and United Rentals - are providing the very resources the administration depends on to carry out these crimes against humanity.
Tell CalPERS: Complicity in crimes against humanity is not an option!
With more than $185 million of shares in CoreCivic, GEO Group, General Dynamics, and United Rentals, CalPERS is investing in companies that are profiting off of a policies designed to inflict grave harm and lasting trauma on children and families fleeing horrific violence and persecution. The separation, detention, and deportation of refugees and asylum seekers - to countries where they face serious threats to their life and freedom - violates fundamental human rights enshrined in international law. Thanks to fierce opposition from stakeholders, CalSTRS announced plans to divest from for-profit prison companies; it's imperative that CalPERS follows their lead. CalPERS is widely recognized as a leader in socially responsible investing; it’s time they lived up to that reputation.
Demand that CalPERS immediately divest from GEO Group and CoreCivic, and pressure General Dynamics and United Rentals to urgently end their material support for the detention of migrant children.
CalPERS Executive Officers and Board Members
From: [Your Name]
Dear CalPERS Executive Officers and Board Members,
We, the undersigned CalPERS members, vehemently and wholeheartedly object to CalPERS’ $185 million worth of investments in companies - CoreCivic, GEO Group, General Dynamics, and United Rentals - aiding and abetting the Trump administration’s egregious abuses of migrant families, children, and asylum seekers. We urgently demand immediate and complete divestment of our retirement funds from GEO Group and CoreCivic, and good faith engagement with General Dynamics and United Rentals to pressure them to immediately end their material support for the detention of children.
CoreCivic and GEO Group operate the largest family detention centers in the US, where the vast majority of detainees are seeking asylum. Plaintiffs in six federal lawsuits have alleged forced labor and other human rights abuses in CoreCivic and GEO Group facilities. GEO Group’s Adelanto Detention Center - named the “deadliest facility in 2017” - is currently detaining parents who were allegedly coerced into signing away rights to reunite with their children. According to independent medical experts, CoreCivic and GEO Group’s practices have contributed to the deaths of numerous detainees, and advocacy groups continue to voice concerns over medical neglect and sexual assault at the companies’ migrant detention centers. A recent report by the Department of Homeland Security’s internal watchdog concluded that ICE’s detention facilities, including those operated by CoreCivic and GEO Group, are not subject to rigorous oversight and therefore are not held accountable for substandard conditions; this conclusion is all the more alarming given that Trump’s executive order provides for indefinite family detention.
More than three months after the court-ordered deadline to reunite all detained migrant children, 150 families remain detained in CoreCivic and GEO Group facilities. In a recent statement from the UN Office of the High Commissioner for Human Rights, experts concluded that placing immigrant children in detention facilities may, in and of itself, amount to torture. However, General Dynamics, a US defense contractor specializing in missile defense systems and combat vehicles, is currently under contract with the Department of Health and Human Services (HHS) for “cadre and infrastructure services for shelter care for unaccompanied children” at the Homestead Temporary Shelter for Unaccompanied Children in Florida; around 50 of the children separated under the administration’s zero tolerance policy are currently being held in this facility. United Rentals, one of the world’s largest rental companies, is also providing rental equipment and infrastructure for the Homestead facility, which is technically located on federal land, thereby exempting it from state child welfare inspections.
DHS has indicated that the lack of resources, including building facilities, is one of the main reasons they have stopped separating families. This was confirmed again just last month when ICE began releasing migrant families when detention facilities reached maximum capacity. By providing the very resources the Trump administration depends on to commit such egregious human rights abuses against migrants, CoreCivic, GEO Group, General Dynamics, and United Rentals have played a crucial role in this nightmare. To put that in legal terms, these four companies are aiding and abetting human rights abuses that qualify as crimes against humanity under international law. Continuing to invest in these companies with knowledge of their role in migrant abuse makes CalPERS complicit.
CalPERS has historically resisted stakeholder demands for divestment, arguing that having a voice at the table is the best way to resolve issues. This argument doesn’t hold for companies like CoreCivic and GEO Group, whose for-profit prison business model – where the company has a financial incentive to incarcerate as many people as possible – is inherently incompatible with the concept of corporate social responsibility. No amount of pressure from investors can persuade companies to abandon their business model. CalPERS did, in fact, recognize this irreconcilable conflict of trying to engage with gun manufacturers when they opted to divest from Smith & Wesson Holding Corp. and Sturm, Ruger & Co. in the wake of the Sandy Hook Elementary School shooting in 2013.
Divesting from CoreCivic and GEO Group in response to the companies’ conduct does not pose a threat to investment returns, given that reports have found that conduct-based divestment produces higher return for investors. CalSTRS’ recent corporate governance report confirmed that divesting would have a negligible impact on portfolio performance. For the past three years, CoreCivic and GEO Group’s stock prices have tumbled, with both companies dramatically underperforming the market. As a direct result of the administration’s migrant abuse policy, CoreCivic and GEO Group’s share prices have skyrocketed and this makes it the ideal time to cash out and invest those earnings in companies whose long-term profitability is not threatened by unsustainable corporate conduct. This approach - taking environmental, social, and governance (ESG) risks into consideration when making investment and divestment decisions - is consistent with investors’ fiduciary duty; since 2005, legal opinions have, in fact, concluded that taking ESG factors into account is not only permissible but is arguably mandatory for fiduciaries. In 2015, the UN Principles for Responsible Investment, to which CalPERS is a signatory, published a report that concluded: “failing to consider long-term investment value drivers – which include environmental, social and governance issues – in investment practice is a failure of fiduciary duty.”
The Cincinnati City Council voted to divest the city’s pension system from companies that operate or do business with private (for-profit) prison companies back in August 2017, as have cities and states across the country, including New York City, Chicago, Philadelphia, and New Jersey. CalSTRS followed suit and announced plans to divest from CoreCivic and GEO Group November 7, 2018. This level of divestment makes it more difficult for these migrant abuse companies to underwrite debt, access capital, and lobby for contracts and pro-incarceration, anti-immigrant policies. As the country’s largest pension fund, CalPERS has significant leverage that can and must be used to help end these atrocities.
For General Dynamics and United Rentals, companies in which aggressive and persistent engagement could feasibly result in compliance with CalPERS’ ESG commitments, we, as CalPERS members, demand that you:
A. show us exactly how you are putting pressure on these companies to stop supplying abusive migrant detention facilities with material support; and
B. provide us with evidence that this engagement has had any impact whatsoever.
For example, we want to see internal policy changes, new board members, and accountability for those responsible at General Dynamics and United Rentals. If you are unable to provide this information and effectuate the necessary changes, then we demand that CalPERS divest from General Dynamics and United Rentals.
We, the undersigned CalPERS members, demand that CalPERS:
A. Immediately and completely divest from for-profit prison companies CoreCivic and GEO Group;
B. Leverage good faith engagement to pressure General Dynamics and United Rentals - and their subsidiaries - to cut any and all contracts and bids with HHS or any other local or federal government agency through which they provide infrastructure, equipment, case management support or IT services to process migrant detainees, or any such support at detention facilities where migrant children or their families are held;
C. Conduct a human rights impact assessment of its first and second tier investment chain exposure to corporate activities involved in or otherwise enabling family separation; indefinite detention; or the detention of children, refugees, or asylum seekers; and
D. Facilitate access to redress for those affected by General Dynamics’ involvement in the zero tolerance policy by urging General Dynamics and its subsidiaries to create a non-judicial grievance mechanism, consistent with international law and best practice standards.
*To view this letter with hyperlinks and citations, please see: https://drive.google.com/file/d/1Bb-FTPOrE3HWobpC-1DPnBAyJLy0W_SK/view?usp=sharing