The private prison industry is a growth industry—exploding by 350 percent in just 15 years. As the federal and state governments are facing slimming budgets, contracting out prison operations to private companies is seen as a convenient way to deal with ever-increasing rates of incarceration and detention.
At the same time, such rapid growth has made the private prison industry an especially attractive investment for university endowments, prompting a nationwide, student-led divestment campaign that’s lately seen some notable success.
Studies have shown that while private prison operations may help ease some budgetary strain, they perform worse than public prisons on a number of metrics: reducing prison violence; living conditions; and rehabilitation rates. These companies also insist on including contract clauses that mandate a certain level of prisoner capacity in order to maximize profits, thus fueling high incarceration rates. In 2013, the ACLU filed a lawsuit on behalf of severely mentally ill prisoners in a private Mississippi facility, describing "an extremely dangerous facility operating in a perpetual state of crisis, where prisoners live in barbaric and horrific conditions and their basic human rights are violated daily."
Additionally, people of color are more likely to be imprisoned in private prisons than public prisons. So it’s no wonder that student activists were angered when they found that their Ivy League institution, Columbia University, held significant investments in private prison companies.
The Corrections Corporation of America (CCA) is the fifth largest correctional system in the United States; the private prison operator runs more than 60 facilities in 20 states under federal, state, and local government contracts. G4S is the world’s largest security contractor, operating private detention and correctional facilities from the U.S.-Mexico border to (until last year) Guantanamo Bay.
Through its endowment funds, the institution had invested $8 million—more than 230,000 shares— in CCA and $2 million in G4S. On a purely monetary basis, it’s not a surprising investment.
As one article about the glowing prospects of CCA and prison operator GEO Group (another Columbia investment) puts it, “Prisons are essential, and governments aren’t going to let convicts walk free unless there is a fiscal emergency that necessitates it. Furthermore, private prison operators may benefit from a weak economy. If a recession lowers a state’s income, it may be motivated to seek savings by privatizing prisons.” Their stocks also soared during an increased demand for detention centers along the border last year’s immigration crisis.
In a very direct way, Columbia University was investing in companies that lobbied for expanding the carceral state.
For years, the university’s endowment portfolio had shrouded behind a veil of committees and bureaucratic processes, says Columbia student Asha Rose. She was a member of Students Against Mass Incarceration, a prison abolitionist group on campus, when the organization began looking into whether their school had a tangible financial investment in private prisons. In 2013, they unearthed the fact that the school had substantial investments tied up in CCA, G4S, and the GEO Group.
A few months later in 2014, the student activists launched Columbia Prison Divest, and delivered a letter to Columbia University President Lee Bollinger requesting to meet about the school’s investments. The group insisted that the university was investing in a system that was racially oppressive and immoral. From there the group was working within the institution’s bureaucratic system to shine light on the endowment portfolio while also maintaining public pressure.
The campaign began to quickly gain momentum last semester. “There was this new energy around the country and at Columbia,” Rose says. The Black Lives Matter movement was gaining traction across the United States. There was an increasing amount of public scrutiny aimed at systems of racial oppression—violent over-policing in communities of color, which has led to an outsized amount of people of color destined for the confines of prison. In New York specifically, Columbia Prison Divest was calling specific attention to Columbia’s expansion into West Harlem, arguing that the university was decimating a low-income neighborhood with gentrification and bringing along with it an increased police presence.
In March, the University Senate Student Affairs committee voted to call upon the university to divest from private prisons. In May, President Bollinger sent out an email expressing his personal support for prison divestment and said that it would be discussed at the next Board of Trustees meeting. “The issue of mass incarceration in America weighs heavily on our country, our city, and our University community. The student group Columbia Prison Divest has been a vocal and valued champion for private prison divestment,” Bollinger wrote.
A couple weeks ago, in a stunning turnaround, the board met and announced its intention to divest its endowments from the private prison industry. The victory was hailed as a boon for both for campus divestment campaigns generally, and the national prison divestment campaign—of which this effort is just one facet.
A Broader Campaign
The National Prison Divestment Campaign has been on the forefront of pushing institutions to divest from the private prison industry for years and the campaign has taken on the major stakeholders in the industry, specifically targeting the roughly 30 banks and hedge funds that have more than one million shares invested in the private prison industry. So far, it’s had some notable success. In April 2014, the campaign pressured three major corporations—Scopia Capital, Dutch Pension (DSM), and Amica Mutual Insurance—to divest a combined $60 million from private prisons. In December, the City of Portland introduced a socially responsible investment policy—a main tenet being private prison divestment.
Given that it’s often difficult to parse out exactly how much institutional investment is in the private prison industry, the easiest way to target divestment is direct stock holdings in private prison companies. “It’s actually very hard to tell how much is being invested in private prisons,” says Ian Trupin, an organizer with the Responsible Endowments Coalition. “Even with direct investments, it’s very volatile and it changes very frequently.”
Despite the relatively lower investment shares of what could be called “the people’s institutions”—pensions, religious endowments, and more recently college and university endowments—are also low-hanging fruit for the campaign.
“These institutions have a strong political role,” Trupin says. “And a moral high ground that can be achieved by divestment and not complicit in terms of profiting from social harm.”
But many of these pensions and endowments are layered investments. For example, a pension manager could invest in a certain hedge fund that has a portfolio that includes private prison investment. The pension may not be investing in private prisons directly, but its money is still going to the industry in one way or another.
The Responsible Endowments Coalition (REC) began focusing on private prison divestment campaigns on university and college campuses in 2013. “It’s a very nascent campaign,” Trupin says.
While campus prison divestment campaigns are still relatively new, they’ve already spread to dozens of schools. In 2013, students at the University of California, Berkeley won a student senate resolution calling for private prison divestment.
One of REC’s organizing strategies has been to work with student activists that take an intersectional approach. For example, Columbia activists were organizing a broad coalition of BDS Israel, migrant rights, and racial equality causes, along with prison divestment, in order to maximize influence and reach.
Campus prison divestment campaigns—and other divestment efforts—are on an upswing across the country. “It still remains to be seen how Columbia University will affect the national conversation,” Trupin says. “I see it growing on more campuses, and we’ll be seeing more wins within the next few years.”