Harlem Senator Plans to Introduce Legislation Barring Pension Fund Investments into Private Prisons

1
2006
Image via Crain's New York Business

In New York State, Senator Brian Benjamin plans to introduce a bill urging the state to disinvest in private prisons. The Harlem senator proposes that the pension fund rethink their investments. Currently, the $200 billion New York State Common Retirement Fund invests approximately $11.5 million into two companies.

“There is no reason a progressive state like New York should be benefiting from mass incarceration,” according to Benjamin. Hence, Benjamin a Democrat and the ranking member of the Senate Civil Service and Pensions Committee, stated that his energy is coming from the thoughts of young people. “When it comes to incarcerating primarily young kids of color, that the priority is not the same as for other things.”

Per the Observer, “I think we systemically facilitate mass incarceration in our country and I believe that there are a range of things that are included in that.” He continued, “For me, when I think of for-profit prisons, I think of institutions whose bottom line is driven by the need for people to be imprisoned… and I just don’t believe-I don’t like that motivation. And on top of that, I definitely don’t like the fact that our pension money is sort of actually enabling that.”

The Bill

Consequently, the bill would prohibit the state controller, “the sole trustee of the state pension from investing in any stocks, securities, or other obligation of any company or subsidiary that owns or invests in a for-profit company that contracts with a government to run a prison,” according to the NYDailyNews. Also, he would like to examine a way to ensure disinvesting would not cause any financial harm to pension holders.

Currently, the legislation is in the beginning stages as Benjamin is carefully working on the ‘language’ of the bill. He stated, “I wanted to plant the flag on the issue.” Benjamin added, “It’s not this language or nothing. It’s, ‘No, we need to move in this direction.’ Now how we get there, let talk more about that.”

State Comptroller Thomas DiNapoli announced his office was taking steps to limit the pension fund’s investment in private prisons. Photo credit )Mike Groll/AP)

On the contrary, E.J. McMahon, of the Empire Center, a state fiscal watchdog group, disagrees with the senator’s bill. Of course, he believes that the process should not be politicized. In addition, “the controller’s responsibility is to get the best returns on investments for the state’s pensioners.”

E.J. McMahon, of the Empire Center , slammed Benjamin’s bill. Photo Credit (Mike Groll/Ap)

“This is basically a recipe for endless meddling and would actually undermine the integrity of the pensions investments,” McMahon stated.

The Law

Accordingly, state law does not allow privately run prisons in New York. However, there is no formal prohibition keeping the state pension fund from investing in such companies, according to the NYDailyNews. That’s why it is important and necessary to pass legislation that would seal the deal and make it official.

DisInvestment in Private Prisons in New York City

Indeed, New York City is paving the way in the United States by selling its investment in prison companies. According to Bloomberg, there were allegations of human rights abuses and the risk of the industry attracting “long-term reputational and financial harm.”

New York City Comptroller Scott Stringer cited “news reports and lawsuits of alleging physical and sexual abuse of inmates, wrongful deaths, and increased violence due to improper staffing in privately managed prisons,” according to Bloomberg.

New York City’s police officers, fire fighters, civil service workers, teachers and school administrators’ trustees voted to become the first retirement funds in the U.S. to divest such assets. Impacted by the divestment are Geo Group Inc., CoreCivic Inc. and G4S Plc., three private prison organizations. The trustees redirected approximately $48 million dollars, which is only a tiny portion of the $175 billion pension fund.

Stringer stated, “Divesting is simply the right thing to do, financially and morally.” For more information on the upcoming legislation, visit the Senator’s website.

1 COMMENT

  1. I love where the comptroller says divestment will compromise the “integrity” of the pension fund by introducing politics. People are in total denial that money is political. We’re just accustomed to pretending it’s not, so a change like this call for divestment makes the politics visible again. Evidence that we have to keep talking about money. Making the blind assumptions visible.

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