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 detained migrant children, hundreds of children remain detained in CoreCivic and GEO Group family detention 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 $231 million of shares in CoreCivic, GEO Group, General Dynamics, and United Rentals, CalPERS is investing in companies that are profiting off of 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’ $231 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 and provide access to redress for affected families.
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. 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 the Trump administration is now seeking to terminate standards  that prevent children from being held in CoreCivic and GEO Group family detention facilities for prolonged periods of time. More than three months after the court-ordered deadline to reunite all detained migrant children, hundreds of children  remain detained  in CoreCivic and GEO Group family detention facilities. The increased detention capacity provided by CoreCivic and GEO Group facilities has proved crucial  for the Trump administration’s crackdown on refugees and asylum seekers, as the Department of Homeland Security (DHS) previously indicated  in June, and confirmed  again just last month.
This is part of a wider pattern of racism and xenophobia that has a left a record number of migrant children detained in U.S. government facilities, despite UN human rights experts concluding  that placing immigrant children in detention facilities may, in and of itself, amount to torture. Of the 14,000  migrant children currently in detention, 1,300 are being held at the Homestead Temporary Shelter for Unaccompanied Children  in Florida, which relies on companies including General Dynamics and United Rentals for resources and operational support. Staff at the Homestead facility have reportedly  not undergone FBI fingerprint checks or child welfare screenings, and the facility’s location on federal lands exempts  it from state child welfare inspections. 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 Florida Homestead  facility. United Rentals, one of the world’s largest rental companies, is also providing rental equipment and infrastructure  to this facility.
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. By continuing to invest in these companies with knowledge of their role in migrant abuse, CalPERS is complicit.
CalPERS has historically resisted stakeholder demands for divestment, arguing  that having a voice at the table is the best way to change corporate conduct. 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 is consistent with CalPERS’ fiduciary duty given the level of risk such investments pose to CalPERS’ rate of return. According to a 2015 report from the UN Principles for Responsible Investment, to which CalPERS is a signatory, “failing to consider long-term investment value drivers – which include environmental, social and governance [ESG] issues – in investment practice is a failure of fiduciary duty.”  Researchers have found that companies with strong ESG performance make better investments,  with a report from Norway’s Government Pension Fund finding that conduct-based divestment produces higher returns for investors. 
In June 2017, NYC pension funds divested from CoreCivic and GEO Group after the “Comptroller’s office found inherent legal, regulatory, and reputational risks in for-profit prison companies”  that could lower demand for such investments and damage valuation as a result. Concerns over the financial impact of ESG issues concentrated in for-profit prison companies “have been warranted”;  not only have CoreCivic and GEO Group’s stock prices dramatically underperformed the market for the last three years,  but the dramatically higher risk both companies pose - as compared to US junk bonds - has led to a sharp decline in the value of their bonds. Now, 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.
Institutional investors across the country, including the California State Teachers’ Retirement System (CalSTRS) and the New York State Common Retirement Fund, as well as pension systems in New York City, Chicago, Cincinnati, and Philadelphia, have already divested from CoreCivic and GEO Group over both companies’ human rights abuses. 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.
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.
 The Human Trafficking Legal Center, Alexandra Levy, “Fact Sheet: Human Trafficking & Forced Labor in For-Profit Detention Facilities,” (2018), available at: https://www.business-humanrights.org/sites/default/files/documents/Human-Trafficking-Forced-Labor-in-For-Profit-Detention-Facilities.pdf.
 American Civil Liberties Union, “Report Links Poor Medical Care to Deaths in ICE Detention,” (June 20, 2018), available at: https://www.aclu.org/news/report-links-poor-medical-care-deaths-ice-detention.
 The San Diego Union Tribune, Kate Morrissey, “Report links deaths in immigration detention to sub-par medical care,” (June 20, 2018), available at: https://www.sandiegouniontribune.com/news/immigration/sd-me-immigration-deaths-20180620-story.html.
 Physicians for Human Rights, Dr. Altaf Saadi, “Detention Facilities Display Dangerous Trend of Delayed and Inadequate Care,” (June 20, 2018), available at: https://phr.org/resources/detention-facilities-display-dangerous-trend-of-delayed-and-inadequate-care/#top.
 American Civil Liberties Union, Victoria López and Madhuri Grewal, “The Department of Homeland Security’s Own Watchdog Says ICE Detention Inspections are Meaningless,” (July 3, 2018), available at: https://www.aclu.org/blog/immigrants-rights/immigrants-rights-and-detention/department-homeland-securitys-own-watchdog.
 US Department of Homeland Security, Office of Inspector General, “ICE’s Inspections and Monitoring of Detention Facilities Do Not Lead to Sustained Compliance or Systematic Improvements,” (June 26, 2018), available at: https://www.oig.dhs.gov/ sites/default/files/assets/2018-06/OIG-18-67-Jun18.pdf.
 ACLU, supra fn. 5.
 American Civil Liberties Union, Stephen Kang, “Trump’s New Attack on Immigrant Children,” (September 14, 2018), available at: https://www.aclu.org/blog/immigrants-rights/immigrants-rights-and-detention/trumps-new-attack-immigrant-children.
 Soboroff, Jacob (@jacobsoboroff). “BREAKING: Trump administration reveals new number of *still-separated* migrant kids. 47 separated kids still in custody. Parents of 33 already deported. Lawyers for families say “government has not yet provided… a timeline” for 258 reunited but still-detained families.” October 26, 2018, 2:14am. Tweet available at: https://twitter.com/jacobsoboroff/status/1055704122320515072.
 The Texas Observer, Jason Buch, “More than 150 Families Separated at the Border Remain Locked Up in Texas,” (October 31, 2018), available at: https://www.texasobserver.org/more-than-150-families-who-were-separated-at-the-border-remain-locked-up-in-texas/.
 Padilla, Angel, “Update on Family Separation,” available at: https://docs.google.com/document/d/1QmgBiO_ xpXtd4uWJ00yIZxYMjtcpKsc8Du-XtQdyC50/mobilebasic.
 Politico, Ted Hesson and Andrew Hanna, “White House Reasserts Zero Tolerance Policy As Border Patrol Suspends It,” (June 25, 2018), available at: https://www.politico.com/story/2018/06/25/white-house-resources-detain-migrant-families-670363.
 Prison Divest, “With Detention Center at Capacity, ICE Begins Releasing Immigrant Families,” (October 10, 2018), available at: https://prisondivest.com/2018/ 10/10/with-detention-centers-at-capacity-ice-begins-releasing-immigrant-families/?fbclid=IwAR22TzvGqiZpw8HcgGoy7PzEu1c6SZL2ZzsDj9IGim8QkNnXIzyvtd3Okcw.
 United Nations Office of the High Commissioner for Human Rights, “UN experts to US: ‘Release migrant children from detention and stop using them to deter irregular migration,’” (June 22, 2018), available at: https://www.ohchr.org/EN/ NewsEvents/Pages/DisplayNews.aspx?NewsID=23245&LangID=E.
 Mother Jones, Kanyakrit Vongkiatkajorn, “There Are Now More Than 14,000 Immigrant Kids in Federal Custody - A New Record,” (November 17, 2018), available at: https://www.motherjones.com/politics/2018/11/there-are-now-more-than-14000-immigrant-kids-in-federal-custody-a-new-record/.
 Bloomberg News, Jennifer Epstein and Laura Litvan, “Migrant Children Being Held in Camps in 17 States,” (June 19, 2018), available at: https://www.mercurynews.com/2018/06/19/migrant-children-being-held-in-camps-in-17-states/.
 The Daily Beast, “Report: FBI Background Screenings Waived for Florida Migrant Camp Staff,” (December 8, 2018), available at: https://www.thedailybeast.com/ report-fbi-background-screenings-waived-for-florida-migrant-camp-staff.
 CBS News, Graham Kates, “Some detention centers for migrant children are not subject to state inspections,” (July 5, 2018), available at: https://www.cbsnews.com/ news/some-detention-centers-for-immigrant-children-wont-be-subject-to-traditional-inspections/.
 USASpending.Gov, “Contract award for General Dynamics Information Technology, INC.,” available at: https://www.usaspending.gov/#/award/66259391.
 Bloomberg News, supra fn. 16.
 People Magazine, Jamie Spain, “The Most Haunting Images from the Migrant Crisis at the U.S. - Mexico Border - And How You Can Help,” (June 20, 2018), available at: https://people.com/human-interest/migrant-children-us-mexico-border-photos/ #migrant-childrens-detention-center-in-homestead-florida-where-congress-have-been-denied-entry-to-check-on-kids-safety.
 U.N. General Assembly, “Report of the Special Representative of the Secretary-General on the Issue of Human Rights and Transnational Corporations and other Business Enterprises, John Ruggie,” ¶17, U.N. Doc. A/HRC/17/31 (2011), available at: https://www.ohchr.org/Documents/Issues/Business/A-HRC-17-31_AEV.pdf.
 Slate, Ben Mathis-Lilley, “Everything We Know About the Separated Migrant Families and What Happens Next,” (June 25, 2018), available at: https://slate.com/ news-and-politics/2018/06/trump-family-separation-reunification-policy-crime-against-humanity.html.
 CalPERS, “The Importance of Corporate Engagement on Climate Change,” available at: https://www.calpers.ca.gov/docs/ corporate-engagement-climate-change.pdf.
 The LA Times, Marc Lifsher, “CalPERS to sell all of its stock in two gun manufacturers,” (February 19, 2013), available at: http://articles.latimes.com/2013/ feb/19/business/la-fi-mo-calpers-to-sell-firearms-makers-stocks-20130219.
 U.N. Principles for Responsible Investment, “Fiduciary Duty in the 21st Century,” (2015), available at: https://www.unpri.org/ fiduciary-duty/fiduciary-duty-in-the-21st-century/244.article.
 Oxford University and Arabesque Asset Management, “From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial Performance,” (2015), available at: https://yoursri.com/users/7d11334ea516e07aa5d1b161c31784ac/ 3d9e447b4dff4ffcf2974b8f47809e63/@@download/fs/201503_FROM_THE_STOCKHOLDER_TO_THE_STAKEHOLDER1.pdf; The Financial Times, “Companies With Strong ESG Performance Make Better Investments,” (October 26, 2017), available at: https://www.ft.com/content/80c833ce-b994-11e7-8c12-5661783e5589; Khan, Mozaffar and Serafeim, George and Yoon, Aaron, “Corporate Sustainability: First Evidence on Materiality,” The Accounting Review, Vol. 91, No. 6, pp. 1697-1724 (November 9, 2016), available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2575912.
 Pensions & Investments, Sophie Baker, “Ethics council identifies 11 companies in 2017 for Norway’s sovereign wealth fund to exclude,” (March 8, 2018), available at: https://www.pionline.com/article/20180308/ONLINE/180309828/ethics-council-identifies-11-companies-in-2017-for-norways-sovereign-wealth-fund-to-exclude.
 Sustainalytics, Kasey Vosburg, “Migrant Detention at US Borders: What investors need to know,” (June 26, 2018), available at: https://www.sustainalytics.com/esg-blog/family-separation-migrant-detention-what-investors-need-to-know/.
 “Quarterly Research report: CoreCivic,” BuySellSignals (May 31, 2018); “Bi-Monthly Research report: GEO Group,” BuySellSignals (March 1, 2018).
 U.N. Principles for Responsible Investment, “Shifting Perceptions: ESG, Credit Risk and Ratings, Part 2” (2018).