Yale is [an] intellectual institution and leader and should not be investing in something that destroys entire populations and is used to keep people down in our society. As an intellectual institution, it is our job to promote a way of investing that shows how humans interact with each other.
JOSEPH GAYLIN, CLASS OF 2019, YALE UNIVERSITY
DIVESTMENT IS THE practice of declining to invest in companies deemed immoral or unethical, and it has a long history as a topic of activism on college campuses. I spent an evening with the Yale Students for Prison Divestment on a cold February night and learned that they believed their university’s investment policy should reflect the school’s values.
We, concerned students of Yale University, have reason to believe (prior investment history) that Yale is investing in American private prison corporations, which are engaged in highly unethical practices. Private prison corporations are perpetuating a system of modern slavery through prison labor programs that disproportionately affect black Americans. Our organization exists to further education about private prisons and their injustices, and challenge Yale to take an affirmative stance against these corrupt organizations.(Yale Students for Prison Divestment’s mission statement)1
Six undergraduate students were huddled around a wooden table, working to ensure that their university wasn’t complicit in America’s mass incarceration. They were meeting to discuss the logistics of Facebook pages, social media tools, PowerPoint presentations, banners, posters, and event planning. The chair of the group, an African American upperclassman, was instructing them to keep track of volunteer lists, advising where to print materials, and suggesting well-known activists and potential speakers on criminal justice reform issues for a campus event. One student read aloud a draft email she planned to send to the university to request funding for printing materials to “inform other Yale students about private prisons.”
They debated about the kind of event that would grab the attention of their classmates. One student suggested “something educational. Perhaps a presentation by some or all of us on why this cause matters, about why private prisons are a thing. Prior divestment history, and why we think this is causing considerable social harm, and maybe at the end, outlining what steps we would take to move away from that situation.”
Why were these students here? One grew up with a father in prison. Another had studied mass incarceration and drug policy and was moved enough to join this group, even recruiting his roommate to the cause. One undergraduate spoke passionately about how corrections should never be for profit: “These companies, CCA and GEO Group, the guys that own these private prisons, they are subsidized by the government per head, by beds that they fill. They have cases for judges being indicted for…filling up beds under the influence of these corporations, so something like corrections, there should be no reason why more is better if profit is the motive. There should be no profit from corrections.”
Students at Columbia University had discovered pension investments in private corrections. These Yale students worried that their school might have similar ties, and their hunch was rooted in history. In 2005 the university had invested in CCA but eventually divested. One student blurted out, “I mean, accidentally divested in that the mutual fund they were investing in just dropped that particular small investment, I think it was $1.5 million in CCA.”
Unsure of how to proceed, one student explained how the students at Columbia University found out that the school invested in private prison corporations. The Columbia campaign launched after a student asked the university for its investment portfolio to inform her school research project. “That seems like a way we can’t exactly use, because tricking someone in a certain way only works once,” one of the students excitedly stated. “I’m sure all the other universities would have instant red flags go up if students said ‘we need your financial records for a research project,’ considering what happened to Columbia afterward.”
Columbia University Divests from Private Prisons
In 2015, Columbia University became the first U.S. institution of higher learning to divest from the private prison industry. Columbia President Lee Bollinger announced that the university would “divest any direct stock ownership interests in companies engaged in the operation of private prisons and refrain from making subsequent investments in such companies.” It was a victory remarkable not just for its results but because the campaign that convinced one of the world’s foremost universities to reform its investment practices was created and directed by students.
The Columbia University divestment campaign started in 2013 with Asha Rosa, a black undergraduate student activist who was a member of Students Against Mass Incarceration, the student group that became the umbrella group for Columbia Prison Divest. Telling members of the Columbia University administration that she was conducting research for her senior thesis on urban studies, Rosa approached the associate director of finance for the Columbia University Advisory Committee on Socially Responsible Investing and asked for investment information.2 It would be months before the university found out this was a contrived request: Rosa was working on no such thesis at the time.3
According to Ella Every, an undergraduate member of Prison Divest who worked with Rosa on the divestment campaign, the investment report indicated that Columbia held approximately $8 million in shares of CCA. The document also revealed that Columbia owned around $2 million in shares in G4S, the world’s largest security company. With more than 600,000 employees across 110 countries, G4S owns and operates prisons globally and reported earned 296 million pounds in profit (about $370 million U.S. dollars) and 7.59 billion pounds in revenue in 2016 (almost $9.5 billion U.S. dollars).4 Roughly a quarter of its revenue comes from North America.
When we spoke about the Columbia campaign, Every acknowledged their fortuitous circumstances: “It was honestly just a total fluke in a lot of ways. Many of these universities keep a very tight hold on their investment lists,”5 she noted. Although Columbia University’s website states that 10 percent of their investments are public, and that the public should have access to them, they don’t publish those investments. Other students have tried to obtain further investment details from the university, according to Every, but the administration has proved less forthcoming since Rosa.
Rosa, Every, and a group of eight to twelve core organizers felt they had the information they needed to move forward with a full-fledged divestment campaign. The students worked over the next eighteen months, holding weekly meetings, appealing to the administration, writing letters, and planning events. They won the administration’s attention when their campaign officially launched in February 2014. They marched to President Bollinger’s office and read a list of demands, which included full divestment from CCA and G4S. They also demanded that the university promise that it would never again invest in CCA, G4S, and GEO Group. Although President Bollinger wasn’t in his office when the group read the letter (the students read the letter to his secretary), the event served as a wake-up call for the university and for institutions of higher learning across the country.
The letter to President Bollinger was videotaped and posted on YouTube and quickly garnered attention outside the university gates, including an article in Rolling Stone a few months later. Nevertheless, the group faced months of stalled negotiations with the administration, who requested that the organizers work with the Advisory Committee on Socially Responsible Investing. From the students’ perspective, the committee stalled negotiations and seemed to overhaul its membership routinely. The student organizers presented to the committee multiple times without progress, but they mobilized tremendous student support, which convinced the university Senate to pass a resolution that Columbia should divest from the private prison industry. The university’s Board of Trustees met in June, and prison divestment was on their agenda. The student group received an email from the Advisory Committee on Socially Responsible Investing as soon as the board voted for divestment.
For decades, student activists have protested their schools’ investments, from the tobacco industry to today’s campaigns against fossil fuels. The widespread student protest of South African apartheid was especially effective in its calls for divestment. In the late 1970s, student activists at college campuses from California to New York began agitating for university officials and trustees to divest from industries conducting business with South Africa in protest of apartheid. In Berkeley, California, students boycotted classes and demonstrated throughout campus “to dramatize the plight of black South Africans, students built shantytowns and resisted police who removed them.”6 In 1977, Hampshire College became the first school to divest stock in all companies trading or conducting business in South Africa. Columbia University students who organized as part of the Columbia Committee Against Investment in South Africa led a successful campaign in the late 1970s with demonstrations focused on university ties to corporations engaged in business with South Africa. The antiapartheid divestment campaign proved incredibly successful. By 1988, 155 universities had at least partially divested, selling holdings in companies doing business in South Africa.7
Prison divestment has emerged as a modern-day civil rights issue on today’s college campuses. It sits at the intersection of students’ discontent with mass incarceration, racial disparities in the criminal justice system, overpolicing in black, low-income communities, income inequality, and equal access to justice. At Columbia, just west of Harlem in upper Manhattan, the Black Lives Matter movement was gaining momentum, and students were protesting violent overpolicing in communities of color. Columbia Prison Divest expressed outrage regarding the school’s expansion, concerned that Columbia was destroying a low-income community with gentrification.8
Although Columbia probably invested in other corporations with poor human rights track records, Every explained why the students were targeting the private prison industry. “Look, we have this privilege of being in this university, and it’s because of, [in] a lot of ways, this [is a] system that locks up young black and brown people in unreasonable numbers.” Every went on to add: “And in the end, we profit from it financially because of the money that the school makes off of its investment in that system, but also because of opportunity. And we aren’t any more deserving of being here than they are deserving of being there.”9
A month after their initial meeting, the Yale undergraduate students wrote an open letter to the university’s administration and the Yale Corporation detailing the unjust practices of the private prison industry and asking the university to divest from it. With more than 289 signatures, the letter requested that “the Yale Corporation immediately divest from the for-profit prison industry, publicly denounce the for-profit prison industry and affirmatively state that it will not invest in the for-profit prison industry in the future.”10
The Yale Corporation oversees the university’s investments, and a separate committee—the Board of Ethics and Investments—is tasked with ensuring that the university doesn’t invest in companies or funds that have a role in producing “grave social injuries.” Joseph Gaylin, a rising sophomore at the time of the demands, explained why he continues to fight for divestment at Yale. “Yale is an intellectual institution and leader. It should not be investing in something that destroys entire populations.”11 Almost a year later, in 2017, the group of Yale undergraduate students met with members of the University’s Advisory Committee on Investor Responsibility to demand that the Yale Corporation sell any current investments in private prisons, publicly denounce the industry, and promise not to invest in private prisons in future years.
Since 1972, the Yale Corporation has considered divestment requests for nonfinancial reasons by following guidelines spelled out in The Ethical Investor, which specifically states: “A security will be sold where the company is committing grave social injury and where all methods of correcting these practices have failed or appear doomed to failure.”12 Since the 1970s, the Yale Corporation has relied on these guidelines to divest from twenty-four companies that engaged in business in South Africa under apartheid or conducted business in Sudan when the country was under scrutiny for allegations of genocide in 2006.
The advisory committee considered similar student demands in 2005 to divest from private prisons. At that time, it decided that investments in CCA did not constitute a grave social injury.
The Domino Effect
After the Columbia divestment victory, students from colleges across the country reached out for advice on how to launch divestment campaigns on their own campuses. The volume of emails and telephone calls was so enormous that the Columbia students had trouble keeping up. Their success was the beginning of a wave of similar demands nationwide.
Six months later, the University of California system became the first public education system to divest its holdings in private prison companies when it announced it would sell its $25 million stake in GEO Group, G4S, and CCA. Expressing concern about “pampering student whims” and the outsized power students wield to force the hands of college trustees in shaping their investment practices, a finance professor at UCLA commented that “if you start going down the list of Fortune 500 companies, I’m sure we can come up with reasons we should divest from each one.”13
Student campaigns continued to gain momentum across the nation. In 2016, Northwestern University student members of Unshackle NU, a group focusing on the effects the prison system has on communities of color, joined forces with Fossil Free NU and Northwestern Divest. Princeton University students submitted a referendum in April 2016 calling for the Council of the Princeton University Community and the Princeton University Investment Company to divest from private prisons. In early 2017, Princeton University graduate and undergraduate students met to lobby the university to divest from corporations that profit from incarceration, drug control, and immigrant deportation policies. The graduate group Princeton Private Prison Divest stated that “private prisons perpetuate a national civil-rights crisis, one that falls disproportionately upon the most vulnerable people in our society.”14 Students at Swarthmore College continued to meet throughout 2016 and 2017 to discuss a broader divestment effort aimed to persuade their administration to divest from fossil fuels and private prisons.
Lindsay Holcomb, an undergraduate at Swarthmore, joined the prison divestment campaign on her campus as part of her efforts to encourage the college to reform its admissions policies and accept students with criminal records. “Ban the Box” campaigns have found traction with student activists who strive for more inclusive admissions at their universities. The campaign name refers to an application question that requires prospective students to check a box if they have a criminal history. The practice is common in admissions offices nationwide, and administrators claim the question provides them with a fuller picture of prospective students and ensures public safety on their campuses.
Although Holcomb’s initial focus was on convincing the college to end this admissions practice, she also moved in the direction of demanding divestment. She joined other Swarthmore students in submitting a FOIA request to gain access to information about Swarthmore’s endowments and secondary holdings. These investments are housed with privately managed financial institutions, so this information may prove hard to obtain.
In 2015, the campaign was still in its infancy, and the students were unsure of the extent (if any) of Swarthmore’s holdings in private prisons. Holcomb was fairly certain there was a connection because Swarthmore’s finances were held by Wells Fargo, which has holdings in CCA and GEO Group. “When we are invested in these people, then our education is through a long and indirect chain, sponsored by what is essentially the captivity of these humans who may be innocent, may be mothers who are going to be deported, maybe any number of situations in which private prisons and companies like GEO Group deal.”15
Student-led prison divestment campaigns have occupied Board of Trustee agendas from California to New York the past few years, but not all college campuses are focused on cutting ties to the for-profit prison industry. In fact, one university in south Florida looked for ways to increase its visible connection with one of the nation’s largest private prison corporations. In February 2013, Florida Atlantic University announced that the school’s new football stadium, home of the Florida Atlantic Owls, would bear the name of the GEO Group, whose CEO, George Zoley, is an alumnus of the school and formerly served as chair of the university’s Board of Trustees. For the honor of seeing the company’s name on the school’s football stadium, GEO Group promised Florida Atlantic University $6 million over twelve years. Student resistance was swift. They immediately stormed the president’s office; some began calling the stadium Owlcatraz.16 In April, the university canceled its contract with the GEO Group, and the president resigned shortly afterward.
Will Student Movements Make an Impact?
Ella Every admitted that the students at Columbia University made a conscious decision not to engage with the private prison companies. “We wanted to send the message that it didn’t matter how these companies reform themselves, that private prisons are still wrong. So engaging with the companies was setting us down a trajectory that would suggest that these companies could be fixed in some way and made better and then they would be okay.”17
After Columbia University and the University of California system announced complete divestiture from private prisons, CCA and GEO Group issued statements through their press offices. “While the University of California system has maintained its action was based on long-term investment goals, by appearing to bow to activist demands the decision nevertheless represents a missed opportunity for honest and thoughtful dialogue around corrections systems, the role of our industry and the distinction between rhetoric and reality,” said Jonathan Burns, director of public affairs for CCA.18 Pablo Paez, vice president of corporate relations for the GEO Group similarly wrote: “Attacks on private prisons ignore the ways our industry and our company have, for more than three decades, worked to deliver education and rehabilitation programs and post-release, reentry services to thousands of inmates, so they can reintegrate successfully into society.”19 By campaigning to break all ties with the industry, do students send the message that the for-profit prison sector can do no right?
Frank Smith, a retired seventy-eight-year-old Alaska state social worker, has spent decades helping local communities fight against private prisons and is well known in the private prison activist field. He has worked as a field organizer for the nonprofit Private Corrections Institute, which operates in a handful of states and has a budget of about $20,000 a year, mostly funded by correction officer fraternal associations rather than unions. Smith currently consults with the Private Corrections Working Group. If a community is protesting the siting of a private prison or conditions at a private prison somewhere in the United States, Smith is probably involved.
Smith tracks all the employees of private prison companies who have been indicted and keeps voluminous records regarding their activities. But even Smith acknowledged the real effect divestment campaigns will have: “If Columbia divests, it doesn’t really matter. Vanguard owns an enormous amount of stock…. If they divested, it might make a difference in the price.” Although some universities are divesting as much as $10 million in holdings from private prisons, this is a drop in the bucket for a $5 billion industry. As of late 2015, the Vanguard Group held 14 percent of CCA stock, valued at $447 million. But Smith also recognized the huge political effect images of students protesting and media coverage have on the public’s opinion. “If a Columbia or NYU decides to divest, then people will look up and take notice. In terms of fiscal effect, it is close to zero. But in terms of public relations, it’s big.”20
William MacAskill, associate professor of philosophy at Oxford University, wrote about the effect of divestment campaigns and CEO compensation. Companies that are labeled unethical have earned the dubious title “sin stocks,” but they often produce better returns than their ethical alternatives. MacAskill pointed out that “as soon as an ethical investor sells a share, a neutral or unethical investor will buy it.”21
But one can’t argue with the publicity these student campaigns have garnered, calling attention to the issues around private prisons and mass incarceration. When Harvard University divested from the tobacco industry in 1990, Harvard University President Derek Bok explained that Harvard did not want “to be associated with companies whose products create a substantial and unjustifiable risk of harm to other human beings.”22 When Columbia University President Lee Bollinger issued a statement supporting Columbia’s divestment from private prisons, he wrote that the “issue of mass incarceration in America weighs heavily on our country, our city, and our University community.”23
Not Just Students
In October 2009, Pershing Square Capital Management, a New York–based hedge fund run by billionaire Bill Ackman, extolled the value and growth potential of CCA. Noting that public sector corrections were operating at or beyond capacity, that inmate populations in the United States have grown regardless of economic factors, and that federal demand alone could fill CCA’s inventory over the next years, the hedge fund’s presentation concluded that CCA is a “high quality business at a substantial discount to intrinsic value” and noted its “strong management, role as market leader, and secular growth opportunity.”24
In February 2011, the hedge fund sold approximately 3.4 million shares of CCA stock. At one time, the hedge fund owned 10 percent of CCA, the largest share of any single investor. Three months later, activists protested outside Ackman’s Manhattan apartment building during a “day of action” in which protestors targeted Pershing Square and other investment houses that had ties with private prisons. The event was loosely organized by Enlace, an umbrella group of community organizations in the United States and Mexico that launched a national prison divestment campaign. A few days after the protest, Ackman sold the rest of his investments in CCA. In the end, Pershing Square Capital Management sold a stake of almost $200 million in the company.
In January of 2012, the United Methodist Church Board of Pension and Health Benefits—the largest faith-based pension fund in the United States—divested almost $1 million in stocks from GEO Group and CCA. That same year, General Electric fully divested its CCA shares worth $54 million.
In one week in 2014 three corporations divested from GEO Group and CCA. After intense pressure from the civil rights nonprofit Color of Change, which persuaded more than 150 companies to divest from private prison companies, asset management company Scopia Capital Management, Netherlands-based chemical company DSM North America, and Amica Mutual Insurance sold off $60 million in investments from CCA and GEO Group.25
The City of Berkeley had more than $6 million invested in Wells Fargo in 2014 when Wells Fargo came under criticism by divestment advocates for its substantial holdings in CCA and GEO Group. Wells Fargo owned 1 million shares of CCA, valued at nearly $37 million. In July 2016, the Berkeley City Council adopted a resolution calling on the city to divest from private prisons and sent a letter to the city’s business partners asking them to follow suit. Berkeley became the second major city to take substantial steps toward prison divestment. Earlier that year, the Socially Responsible Investment (SRI) committee voted unanimously to recommend that the City of Portland, Oregon, divest $40 million in Wells Fargo corporate bonds due to the company’s financial investment in for-profit incarceration. And in September trustees of the New York City Employees’ Retirement System, one of five pension funds that make up the $163.1 billion New York City Retirement Systems, voted to study divesting its $6 million stock holdings in private prison companies.26 After months of deliberation, New York City’s Comptroller announced in June of 2017 that the city’s pension funds had sold its $48 million in stock and bonds from three private prison companies—GEO Group, CoreCivic, and G4S. In announcing the divestment, New York City Comptroller Scott Stringer stated:
As President Trump ratchets up hateful rhetoric and steps up deportations, private prison companies are going to see enormous reputational harm—and that means they’ll become even riskier investments. Morally, the industry wants to turn back the clock on years of progress on criminal justice, and we can’t sit idly by and watch that happen. Divesting is simply the right thing to do—financially and morally.”27
At the time of the announcement, New York City’s pension system became the only one to fully divest from the for-profit prison industry. Although the divestment amount represented a small fraction of the more than $175 billion pension fund held on behalf of New York City’s police officers, fire fighters, and other civil service workers, the decision marked a symbolic victory for the private prison divestment movement.
Enlace, the small grassroots advocacy organization that coordinated the 2011 “day of action,” has pressured hedge funds and mutual funds to divest from the private prison industry. They also supported university divestment campaigns at Columbia University and UCLA. Enlace, along with members of the Afrikan Black Coalition (ABC), which represents black students in the University of California system, introduced the resolution to the Berkeley City Council in June of 2016.
Enlace was founded in the late 1990s, and Director Daniel Carillo states that their mission has been “to support and build the capacity of organizations to advance a pro-worker, pro-immigrant, racial and economic justice agenda.”28 Over the years Enlace has worked with teachers, retired manufacturing workers, maquiladoras, seafood processing and chain workers, and retail employees, among others. Enlace is especially interested in working with activists at the beginning stages of a campaign.
Before launching the divestment movement at Columbia University, the student group met with Enlace representatives who provided them with a Private Prison Divestment Campaign Toolkit to get them started. Enlace’s Toolkit is user friendly and can be implemented by almost any student group across the country. One section is titled “How to Begin a Divestment Resolution,” and the text suggests identifying your target (state, city, church, university) and then researching whether the institution has a direct relationship with CCA or GEO Group. It recommends strategies that include searching Yahoo Finance. The Toolkit instructs that even if the institution is not directly invested in CCA or GEO Group, a connection could exist between the institution and other top investors in the private prison industry. Finally, the guide suggests leveraging media attention by using social media outlets such as Facebook and Twitter and by writing op-eds and letters to the editor.
Enlace’s private prison divestment strategy aims to break the lobbying power of organizations such as CCA and GEO Group. Although their combined more than $4 billion in revenue is small compared to a company like Apple, which earned close to $216 billion in 2016, Enlace claims that the two companies’ lobbying power at the federal level played a pivotal role in increasing the government’s use of immigration detention. According to Enlace, these companies vastly increased their influence by relying on lobbyists who represent some of their major investors. Specifically, Enlace points to lobbyists for Wells Fargo, General Electric, and the Financial Services Roundtable who advocated policies and appropriations that contributed to the growth of the private sector immigrant prisoner market.29
Private Prisons and the Banks
The American Friends Service Committee, a ninety-year-old Quaker organization that “promotes lasting peace with justice,” created a database on their website that lists companies it considers “punishment profiteers.” The database is the first of its kind in mapping the prison industry. It allows users to upload investment portfolios and scan them for companies that profit from the prison industry. “We hope that the research presented in this publication will help investors refrain from any investment in the prison industry, unless they intend to use it for corporate engagement and shareholder activism to help companies change their policies and transition out of this industry.”30
The five companies the organization suggests divestment from are CoreCivic Inc. (formerly CCA), G4S, Providence Services Corporation (an international, publicly traded corporation that provides government sponsored misdemeanor probation and supervision services and other court-mandated services), Sodexo SA, and the GEO Group Inc. They also suggest divestment from publicly traded companies that provide food services to U.S. prisons: Compass Group, Aramark, and Sodexo. Most phone companies that service prisons are not publicly held, but divestment from CenturyLink, the only publicly traded major prison phone company in this sector, is recommended.
Despite a groundswell of divestment from private prisons over the last few years, Wall Street banks have largely stayed put. In fact, Bank of America, BNP Paribas, JPMorgan Chase, SunTrust, U.S. Bancorp, and Wells Fargo are heavily involved in financing the growth and expansion of CCA and GEO Group.31 These companies rely on debt financing in credit, loans, and bonds to operate and acquire smaller companies. In practice, this means that these banks underwrote bonds and helped finance their growth through loans and hundreds of millions of dollars in revolving credit.
In the Public Interest is working to reduce the footprint of private prisons in the United States, and it makes the case that by helping these private prisons grow and by collecting interest and fees on outstanding debt, the banks are complicit with CCA and GEO Group. Critics blame these banks for profiting from mass incarceration and the criminalization of immigration. By June 2016, a syndicate of at least six banks—BNP Paribas, Bank of America, Barclays, JPMorgan Chase, SunTrust, and Wells Fargo—had loaned GEO Group $450 million through the company’s revolving credit.32
Revolving credit ensures that CCA and GEO Group can cover their expenses under a business model that allows them to pay little in taxes. Operating as Real Estate Investment Trusts (REITs), these companies receive favorable tax benefits but are required to pass on 90 percent of taxable income to their shareholders. This leaves the companies with little cash on hand to cover the cost of day-to-day operations, such as overhead costs at prisons and staff salaries. They must rely on revolving credit from large banks to run their operations and pay their investors per the REIT requirements. To illustrate just how advantageous this tax status is, in 2015 GEO Group paid a mere $7.4 million in international, federal, and state income taxes on its $1.84 billion in revenue.
Although activists express frustration at what they see as an enormous tax advantage, there are financial downsides to restructuring as a REIT, and it’s not really a fair criticism to complain that these companies are receiving an extra benefit. REIT status has its trade-offs such as forgoing the flexibility of retaining earnings and significant compliance requirements. In addition, the downside to corporations losing the ability to retain their earnings and amass a war chest of capital on their hands is huge.
In addition to the loans and bonds that large banks underwrite for private prison corporations, some of these banks also own shares of GEO Group or CCA on behalf of their clients. Private prison divestment advocates criticize this practice because banks are theoretically profiting twice over on for-profit prisons: first from interest and fees they collect from CCA and GEO Group, and again by owning or investing their clients’ money in private prison firms. Bank of America, JPMorgan Chase, Wells Fargo, and U.S. Bancorp also own GEO Group and CCA stock or invest in the stock on behalf of their clients.33
It is unlikely that divestment campaigns will harm private prison revenue because another investor will swoop in and purchase the shares—especially if they are a sound financial investment. But this groundswell of support to eliminate ties with the private prison industry has impressed major university presidents, their boards of trustees, and some of the largest hedge funds. Just as the leading Democratic candidates saying no to private prison donations are a stain on the for-profit prison industry’s reputation, the divestment campaigns provide another blow to the powerful corporations who many argue have disproportionate political influence.
More than a year after I attended the Yale Divestment from Private Prisons student meeting, the group still had few answers. They submitted a two-page memo to the Yale Corporation Committee on Investor Responsibility outlining their rationale for the university to divest from the private prison industry, wrote op-eds in the Yale Daily News, and organized marches on campus. Gaylin was still active in the campaign and called me right before a divestment rally on campus to provide an update on what the student divestment group had discovered. Gaylin said they know the Yale endowment is invested in Vanguard, which is invested in private prisons, but it was still a bit of a black box as to whether the university was a primary investor in private prisons. “As for what we know about the endowment, we have been operating on the assumption that Yale is invested in private prisons. Thus, if Yale is not invested in the private prison industry, we would need confirmation and a statement that they will not invest again in the future. Additionally, we know through SEC filings that Yale is invested in a number of mutual funds that are invested in the private prison industry, so there are secondary investments.”34
Despite these successes, the efforts so far have not engaged policy makers’ interest in evaluating and reforming private prison contracts, arguably the most effective way to improve their practices. Divestment campaigns are pivotal for raising awareness of the problems in the private prison industry, but they only move the needle so far. It is ultimately pressure on policy makers that will change the industry’s incentives, transparency, and accountability requirements. The next chapter considers the role policy makers play with respect to the vast for-profit prison industry.
