CalSTRS: Stop Investing in Migrant Abuse Companies

CalSTRS Executive Officers and Board Members

Nearly four weeks after the court-ordered deadline to reunite all families ripped apart at the border under the Trump administration's zero tolerance policy, 539 children remain separated from their families. At least four companies in CalSTRS' 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 CalSTRS: Stop investing in companies that are profiting off of human suffering.

Thanks to the fierce opposition from CalSTRS members like yourself and protests at CalSTRS’ board meeting in July, CalSTRS is making a rare move and reviewing its investments in for-profit prison companies, CoreCivic and GEO Group. While this is a step in the right direction, CalSTRS is still resisting stakeholders’ urgent demands for divestment from CoreCivic and GEO Group, and good faith engagement with child-detention enablers General Dynamics and United Rentals. With the media starting to take notice and other states and pension funds looking to CalSTRS for direction, it’s all the more crucial for CalSTRS members to send a clear message to the pension fund: complicity is not an option.

With more than $144 million of shares in CoreCivic, GEO Group, General Dynamics, and United Rentals, CalSTRS 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. CalSTRS is widely recognized as a leader in socially responsible investing; it’s time they lived up to that reputation.

Demand that CalSTRS 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.

Petition by
Emily Goldman
Creve Coeur, Missouri

To: CalSTRS Executive Officers and Board Members
From: [Your Name]

Dear CalSTRS Executive Officers and Board Members,

We, the undersigned CalSTRS members, vehemently and wholeheartedly object to CalSTRS’ $144 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 clear documentation of 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.

Almost four weeks after the court-ordered deadline to reunite all detained migrant children, 565 children remain separated from their families. 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. The Homestead Shelter detains children who have been forcibly separated from their parents under the administration’s Zero Tolerance policy. 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. 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 CalSTRS complicit.

CalSTRS has historically resisted stakeholders demands for divestment, arguing that divesting means we won’t have a place at the table to push companies to change their behavior. 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. CalSTRS did, in fact, recognize this irreconcilable conflict of trying to engage with certain gun manufacturers when they opted to divest in the wake of the Sandy Hook Elementary School shooting in 2013.

Divesting from CoreCivic and GEO Group is a fiscally sound decision and poses no threat to our rate of return. For the past three years, their stock prices have tumbled, with both companies 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 aren’t threatened by unsustainable corporate conduct. This approach is consistent with CalSTRS’ fiduciary duty, given that reports have found that conduct-based divestment produces higher returns for investors.

For General Dynamics and United Rentals, companies in which aggressive and persistent engagement could feasibly result in compliance with CalSTRS’ ESG policies, we, as CalSTRS 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. CalSTRS must publish progress reports on its website every four weeks; the effectiveness of CalSTRS’ engagement and prospects for success will be reassessed at the end of the second month.

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 CalSTRS divest from General Dynamics and United Rentals.

We further call on CalSTRS put its commitment to responsible investing into practice, and provide evidence that CalSTRS is complying with its due diligence obligations to ensure our pension funds are not complicit in any human rights abuses in the future.

We, the undersigned CalSTRS members, demand that CalSTRS:
A. Immediately divest from CoreCivic and GEO Group; and
B. Use its leverage to pressure General Dynamics and United Rentals - and its 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.

*To view this letter with hyperlinks and citations, please see: https://drive.google.com/file/d/13PKpnyb4-dXvyBr79eLGkqBG-Te-zIeq/view?usp=sharing

Sincerely,