Copyright © 2019 Albuquerque Journal
SANTA FE – New Mexico’s teacher pension fund is scrutinizing its handling of politically flammable investment holdings, after calls to get rid of more than $1 million in combined investments in two private prison companies that also run immigrant detention centers.
However, the Educational Retirement Board’s executive director said it’s unlikely that New Mexico will follow in the footsteps of pension funds in New York City and Chicago that have moved to divest fully from the private prison industry.
“It’s a very difficult thing to do,” ERB Executive Director Jan Goodwin said. “Once you get on the slippery slope of divestment for policy reasons, it’s hard to know where it’s going to lead you.”
As part of its internally managed investment index, the $13.3 billion teacher pension fund has stock shares valued at $533,043 with Florida-based GEO Group Inc. and roughly $505,342 invested with Tennessee-based CoreCivic, Goodwin said.
In New Mexico, GEO Group operates several private prisons and related facilities and CoreCivic runs a private prison and a U.S. Immigration and Customs Enforcement detention center in Cibola County.
The companies have come under scrutiny during a national debate over immigration policy, and several prominent New Mexico Democrats – including Attorney General Hector Balderas and two members of the state’s congressional delegation – last year announced plans to give charitable donations in the amounts they received as campaign contributions from two private prison companies.
Goodwin said the ERB has received calls to divest from the private prison companies from two outside groups, the Santa Fe Dreamers Project and the Albuquerque Interfaith coalition.
In addition, a prominent national teachers union, the American Federation of Teachers, has pushed for public pension funds to divest from the private prison industry, arguing that such investments benefit from mass incarceration rates that disproportionately affect minorities.
The union mentioned New Mexico’s teachers pension fund, in a report issued this year, as being among 24 pension funds around the country with investment holdings in the two private prison companies.
Private prison companies are not the only publicly traded firms to be targeted by advocacy groups, as pension funds have faced pressure to divest from tobacco companies, fossil fuel firms, gun manufacturers and more.
Divestment has also been a tactic used to apply pressure on foreign governments, including Iraq, Sudan and, during apartheid, South Africa.
However, divestment decisions can have legal repercussions, as New Mexico pension fund board members are required to prioritize the fund and its beneficiaries – current and future retirees – over outside interests and concerns.
Board members of New Mexico’s teacher pension fund discussed divestment issues – including the legal requirements of board members – at meetings last year and this year, and could vote on a new divestment policy next month.
ERB Executive Director Goodwin said pension officials generally believe the fund can have a greater influence as a stockholder – in part by casting votes in stockholder elections – than if the pension fund were to phase out its investments.
“Once you sell your stocks, you don’t have a seat at the table,” she said.
New Mexico’s other large public retirement system – the Public Employees Retirement Association – has smaller investment holdings in the two private prison companies, as does the State Investment Office.
The State Investment Office has about $312,000 in combined investment in the two companies – or less than 0.0001% of its total assets – while the PERA has about $243,0000 invested, according to its chief investment officer.
The PERA has had only one inquiry from a retired member asking about investment holdings in the private prison companies, according to the pension fund.