Progress on Private Prison Divestment
The private prison divestment movement has gathered great momentum since our June 2019 webinar, “Private Prison Divestment—Justice for Refugees and Migrants”. During that event, we provided an overview of the movement’s history and an update on current developments, mainly related to the family separation crisis at the US and Mexico border. In June, only two of the six major banks lending to the private prison industry had announced their intent to halt financing, JP Morgan Chase and Wells Fargo. Over the subsequent six months, US Bank, Bank of America, SunTrust, BNP Paribas, Fifth Third, PNC, and Barclays followed suit. By the end of 2019, the two major private prison companies, CoreCivic and GEO Group, were estimated to face an 87% financing gap as a result of this withdrawal of funds from their primary lenders.
The divestment movement has also advanced in several state governments. In January 2020, Rhode Island announced its decision to divest its public pension system from private prisons, becoming the fourth state to do so. New York also continued its leadership in the movement, passing a 2019 bill prohibiting state-chartered banks from “investing in and providing financing to private prisons”, a move designed to thwart regional banks that may see megabanks’ divestment plans as a growth opportunity.
While divestment advocates rightly celebrate these victories, the question remains of how divestment efforts affect conditions “on the ground”. In his January announcement, Rhode Island General Treasurer Seth Magaziner acknowledged that given the state pension’s relatively small investment in the private prison sector, the move to divest was largely symbolic—yet he also said that “symbolic gestures are important.” While the large banks’ plans to cut off funding for the sector were announced in 2019, funding will continue through the end of current contracts, most of which expire in two to five years. This means these companies’ daily operations remain largely unchanged for the time being.
Where does the private prison divestment movement go from here? Freedom to Thrive (formerly Enlace), a nonprofit that builds intersectional movements at the city and campus levels to redefine safety, has been a leader in the private prison divestment movement for most of the last decade, and has no intention of becoming complacent with recent victories. A relatively new target for the group is the elimination of e-carceration, or “the use of technology to deprive people of their liberty” through surveillance technology like ankle monitors. The fruits of the divestment movement may be seen a few years ahead, but the movement’s rapid, sustained growth is a testament to the chord it has struck with stakeholders. Rhode Island’s Magaziner summed up succinctly the feelings of a growing number of investors: “We don’t want to be associated with businesses we think are fundamentally immoral.”