UC sells shares in private prison companies after Black Student Unions release resolution

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Afrikan Black Coalition/Jeremy Michael Vasquez/Courtesy

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The University of California has sold approximately $25 million worth of investments in private prison corporations, according to UC spokesperson Dianne Klein, after Black Student Unions of all nine UC campuses voted on a resolution calling for immediate divestment.

Klein said UC Chief Investment Officer Jagdeep Singh Bachher decided to sell the university’s shares in private prisons after several meetings with a group of concerned students from the Afrikan Black Coalition, or ABC, a universitywide group for black student organizations. At the most recent meeting Friday, Bachher informed the ABC that the university had sold its assets, according to an ABC press release.

“This victory is historic and momentous. Divesting $25 million is a good step towards shutting down private prisons by starving them of capital,” said Yoel Haile, ABC political director, in the press release. “This is a clear example of Black Power and what we can achieve when we work in unity.”

According to Klein, the university makes investment decisions after evaluating the risks of an asset in terms of social, governmental or environmental issues. The university eventually concluded that “based on risk over the next several years, these holdings were not a good investment for a long-term investor such as UC,” Klein said in an email.

On Nov. 30, the ABC reported in a press release that the UC Board of Regents had invested $25 million split among three private prison corporations  — the GEO Group Inc., the Corrections Corporation of America and G4S  — as well as $425 million in Wells Fargo, which ABC alleged also finances private prison companies.

The university’s Black Student Unions voted on a resolution in early November demanding that the regents institute a permanent policy against investments in private prison companies in addition to withdrawing current investments, according to Anthony Williams, ABC prison divestment communications director. The resolution cited a disproportionate number of national black prison inmates and the profitability of the prison industrial complex as reasons for divestment, among others.

“We thought that the resolution was necessary once we found out they were invested but also the amount to which they were invested,” Williams said.

Although the university has sold its shares in the private prison companies, it remains invested in Wells Fargo, according to the ABC press release.

Wells Fargo spokesperson Mariana Phipps said Wells Fargo Funds currently holds a “very small” position with two private prison companies — the GEO Group and CCA. She added that Wells Fargo Funds is owned by the funds’ investors rather than Wells Fargo & Company, which does not have corporate ownership of the GEO Group or CCA.

While Williams believes that the university can still make progress in its relationship with other organizations associated with private prison companies, he said he approves of the university’s decision to cut its financial ties with private prison companies by selling its shares.

“I’m absolutely pleased that the University of California is making this step and working towards, on their end, more financially smart decisions and, on our end, more ethically sound decisions that actually represent the morals that the University of California puts forward,” Williams said.

Contact Kimberly Nielsen at [email protected].

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  • Abdul Keddou

    ABC and BSU are essentially the same as the cop-hating thugs of Black LIES Matter, except there focus is prisons instead of cops. If black folks didnt commit a disproportionately high number of crimes there would not be so many in prison.

    • David Dickinson

      You’re in the wrong place. The forum you want is townhall.com. A lot of uninformed, unintelligent, unthinking bigots go there. You’ll fit right in.

    • TTB

      Ahhhhh a sand terrorist using statistical racism tomorrow up white supremacy….

  • Shawn Barnett

    Hip Hip Hooray for students with purpose and dignity! You got them where it counts!!!

  • J. Williams

    GOOD JOB Students!!! THAT is the ACTIVE in ACTIVIST! Finally, citizens with some BALLS!!! Good on them! Keep it up young men and women. I’ll stand with you too. Just let me know when and where. Don’t misunderstand me, I think creating working experience, and maybe a way for inmates to put $$ into the prisons- for prison upkeep- is one thing. But ‘For Profit’ Prisons, designed to profit investors, is WAY, WAY WRONG! That is a slippery slope that is too slippery and unethical. Not in America you don’t! You don’t get to profit directly from other’s disenfranchisement- Oh, no, no, no! That happens in evil, ugly, human rights violating countries- we don’t want that here!!!!!!!

  • Mark Talmont

    I wonder when they bought in? GEO peaked at $45 in March, has been above it’s recent close since Jan. 2013. With a below-market-average P/E ratio and 2.6% dividend yield, might actually be a buy.
    Curiously, CCA (symbol CXW) has a remarkably similar chart, has been above it’s current price since May 2012, almost identical P/E, current price and similar earnings and div.yield. The time to sell these things was in January of this year! InsiderMonkey.com shows significant insider purchases of stock recently for CXW.

    You know if it’s prisoner’s rights you are worried about you might want to take a look at Laogai.org, there are something like 7 million prison laborers in this Chinese gulag and if you bought virtually any consumer electronics this year you are “invested” into this system to some degree. What next, divest GE and Apple?

  • Christian Waters

    They sold their investments in private prison corporations to other people? How does this starve private prisons of capital and by how much?

    • simea

      It doesn’t. When a corp has an IPO – they get their money from the stocks then. It is how they raise money. After that, for the most part, shares are sold back and forth among investors (individuals, mutual funds, large institutions, etc). That’s the stuff that gets reported on the news (NYSE, NASDAQ, DOW). It is quite likely that UC made a profit/gain on the sale, depending on when they bought it. If it was part of a larger fund or portfolio, they just replace the sold stock by buying another. Most of this investing is for the UC employees retirement fund. A long term fund. So…this means that someone sells and someone buys. The shares don’t just disappear off the face of the earth because UC doesn’t want them anymore. They get picked up by another fund/inst or whatever. Hence the term ‘Financial Market’. Really, if anyone looks at the details of where their own IRA/401k/mutual fund money is seated, you might find quite a diverse pool of stocks and funds- drilling down to the details might reveal a lot, even if it is a tiny % of the whole. Realistically, it is almost impossible to completely be rid of non-PC investments. These kids don’t get the reality of all this. They still have an idealistic view of how they would like things to be. Kudos to them.