Comptroller Restricts State Investment in Private Prisons
The office of State Comptroller Tom DiNapoli has agreed to get out of the private, for-profit prison business. While the Comptroller’s office does not characterize the move as a “divestment,” to the common investor it looks an awful lot like precisely that.
Specifically, New York State’s Common Retirement fund has placed GEO Group on it’s restricted list for active management. GEO Group is the largest private corrections company in the world, according to it’s website. The Comptroller says they are directing active managers to no longer purchase shares in the company. DiNapoli is also directing all actively managed shares of GEO Group to be sold by the end of the year. The holding is currently 43,220 shares worth about $1.5 Million.
All other shares of GEO Group, and Corrections Corp of America ( which does exactly what it’s name would suggest ) held by the Common Retirement Fund, which amount to about $10.6 Million, are in what is known as passive index funds. In other words, it’s not a direct investment by the State. Money managers are hired by New York to buy lots of different shares of lots of different companies and hold them together as part of a larger fund. Managers are given broad discretion to buy and sell as they so choose, and the State takes no role in those decisions.
To put things in perspective, the State’s retirement fund is worth roughly $184.5 Billion. It’s the third largest in the nation. So, divesting a a couple million bucks isn’t necessarily going to make or break performance. But by taking money out of for-profit prisons, the State is sending a strong, symbolic message. New York State wants no part of private prisons, which have had all sorts of problems with abuse, and other issues.
The move comes after comedian, activist and perennial candidate for public office Randy Credico launched a group with the help of Effective NY’s Bill Samuels called “End the Prison Industrial Complex Now,” or “EPIC.” Randy ( who’s father served time in prison ), has also been dressing up in fake prison garb and holding protests outside the offices of State leaders, including Governor Andrew Cuomo. Joe Percoco from the Governor’s office apparently handed Credico a fancy cigar the last time he was perched outside the Third Avenue office, while also chastising Randy for failing to garner any press attention. In a statement, Credico said,
It’s a significant and welcome development. The implications are profound, and I am extremely encouraged by the Comtroller’s actions. However, I am not suprised. Mr. Dinapoli is an extremely ethical public official. And this is the stuff that makes statesman. This action serves notice to the practice of human beings exploited for profit’s days are numbered. We have our work cut out still, but this removes a huge load. Indeed, one giant step for humankind.
DiNapoli was unavailable for comment, but his Spokesman Matthew Sweeney said,
After a review, Comptroller DiNapoli and the Common Retirement Fund are taking steps to reduce and restrict the Fund’s investment in these companies.
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