Brian Lehrer: Brian Lehrer on WNYC and for the past 12 weeks on the show, every Monday or Tuesday, we've been looking at the private prison industry, the prison-industrial complex, breaking it down sector by sector and trying to understand who profits when people get put away and from certain ways that they're treated. Well, we've come to our final segment in that series. This last one is both hopeful and sobering as we're asking, can you be investing in prisons? Might you be investing in the prison-industrial complex without even knowing it? The answer is, yes, it's very possible.

Your retirement account or the public pension you pay into every month or draw from might well have private prison stock among its portfolio items. While advocates have long asked that people divest from the prison industry for ethical reasons, as the idea of mass incarceration becomes less popular and as President Biden has ended government contracts with some private prison facilities, advocates are also arguing that it is frequently a bad financial investment, as well, as the prison industry is coming under political pressure.

Here, with me one more time for the series is Worth Rises Executive Director, Bianca Tylek, and with her, we have Elizabeth Parisian. She has worked in the labor movement for over a decade as a strategic campaigner and is now Assistant Director of Research and Strategic Initiatives at the American Federation of Teachers. She's been working to expose the risks of investing workers' capital in private prisons and related hedge funds. Hi, Bianca. Welcome back one more time, and Elizabeth, welcome to WNYC.

Bianca Tylek: Hi, how are you, Brian.

Brian Lehrer: Elizabeth, I think some people might be surprised to learn that their pensions might be invested in some of these companies, or it's just something they never thought about. Can you talk about your work specifically with teachers' pensions?

Elizabeth Parisian: Sure. Well, the American Federation of Teachers has 1.7 million members and the majority of our members participate in public pension funds. Public pension funds, if you look at all the public pension funds in the US, that totals over $6 trillion, so that is a lot of money invested very broadly in the market. Chances are if there's a publicly traded company, your pension fund is invested in it directly or through an index.

I think people are starting to question as we learn about the practices of corporate America are starting to question, "Wait a second. Are my pension savings invested in this? If so, I have concerns about that." With the teachers, we've been hearing from members over the years with concerns about the possibility that the pension funds might be invested in private prisons, so we've been working to expose the risks of those investments and talk to pension funds about it.

Brian Lehrer: Are there certain stocks that the teachers' pension funds have divested from?

Elizabeth Parisian: Yes. Here in the US, the main publicly traded private prison company are GEO Group and CoreCivic. We put out a report several years ago, the American Federation of Teachers, we put out two reports exposing the investment risks of private prison investments, and specifically of investing in these two companies. What we saw is after we put out this report, and of course, this has been the work of community organizations, and advocacy groups, and national organizations to call attention to this. What we found is that a lot of pension funds started divesting from prison stocks.

They did the analysis. This is never a snap decision. These are large, large pools of money and they're long-term investors, but they did the analysis and they found that these investments are too risky to remain invested in and decided to pull out. The investment risks are many. There's regulatory risk. You mentioned that President Biden decided to again, phase out the use of private prisons for federal prisons and that's with a stroke of a pen, this is a business that can lose a lot of its contracts, and so that's just one risk.

There's litigation risks. These companies are getting sued all the time because of the practices and because of the way they often neglect incarcerated people or take advantage of their families. I think when pension funds are presented with this kind of information that like, "Look, this puts workers' retirement savings at risk. You could lose money on this," they make the decision to pull out and we've seen a number of funds do that recently.

Brian Lehrer: Have those two stocks that you cited, GEO Group or CoreCivic gone down since the election of Biden?

Elizabeth Parisian: Yes. I think they've gone down a lot over the years. Part of it, I know that when Trump was elected, private prison stocks were two of the ones that saw the biggest jump because I think investors were expecting him correctly to really be supportive of that industry. Yes, Biden's election, I think the writing was on the wall. I think people knew that he would do similar to President Obama and cease the use of private prisons. I think there are other factors too.

Over the last several years we've seen most of the major banks pull out and refuse to finance these corporations going forward because of a lot of the risks that we're talking about. They're losing financing. Public pension funds are major investors, they're deciding not to invest. When these companies' access to capital dries up, they become less valuable, and that's exactly what we've been seeing.

Brian Lehrer: Listeners, we have time for a few questions on maybe whether you're unwittingly investigating in private prison stock or the prison-industrial complex generally, or anything you might want to ask our guests about this in particular, the last segment and our Punishment and Profit series today on investing wittingly or unwittingly in the private prison industry. (646) 435-7280, (646) 435-7280. Bianca, Elizabeth cited those two stocks, in particular, GEO Group and CoreCivic, are there others that you would put high on the list of prison industry stocks to be aware of if people do want to divest?

Bianca Tylek: Absolutely. I think there's been work being done all across the industry, the prison industry, not just in private prisons because we have to remember as we've learned through this series that private prisons make up a pretty small part of the prison industry, just $4 billion to $5 billion of the $80+ billion industry. Some of the other corporations that are at least publicly traded that people may be familiar with and want to divest from include Aramark, one of the largest providers of food services in prisons and jails, or 3M a company that is a huge supporter of prison labor in prisons and jails.

Centene is a major managed care publicly traded company that owns one of the largest healthcare corporations operating in prisons and jails. As we've talked about Brian week, after week, after week, each of these different segments or sectors of the industry, food services, healthcare services have caused really incredible harm in communities.

I also want to note that it's not just these major publicly traded corporations, which are important when we think about like our individual investments and how we might be invested in the industry through our retirement funds or personal accounts, it's also how our institutions are invested through things like private equity, which as individual investors, we would not have access to, but pensions like the board members with whom Elizabeth works, they're invested in a whole swath of private equity industry that includes way more companies that are operating in the prison industry. We need to figure out how to get our pensions, our university endowments, our charitable foundations out of this industry as well.

Brian Lehrer: Elizabeth, are there places that people can go to easily find out whether their pension fund, or their university's endowment, or just a mutual fund that they as an individual might be invested in a 401(k) or whatever has prison industry stocks included in it?

Elizabeth Parisian: Yes. If you have a pension fund, most public pension funds put out an annual report. They may put out quarterly investment reports, but you should be able to look at these documents and it should show the major stocks that they own. However, you can always contact the pension fund and ask this question. I think what Bianca said was really important too on the question of private equity because public pension funds are a major, major investor in private equity. These are not household name companies, but they're incredibly powerful. They employ a lot of people. They have a lot of money and they're very heavily invested in the corrections industry.

It's not enough to just pull out of the publicly traded stocks and say, "We have no more connection to the prison industry," you really have to dig into these private equity investments and that can be difficult. Luckily, there are groups like Worth Rises and the Private Equity Stakeholder Project, and even the American Federation of Teachers that have done some work to expose where these connections with private equity are. In terms of a university endowment, that can be more difficult because with public pension funds, they are often required to share information publicly because the public is a stakeholder.

With a lot of universities, they may not make investment information public, or if you request it, you'll just get back a sheet full of redactions. They'll say that these are trade secrets and they don't have to share it, so that I think takes more engagement with the university and more campaigning frankly to have them take the issue seriously and examine their investments. If you're an individual investor, meaning maybe you have a 401(k), it's a little trickier because everyone has to make individual investment decisions with the 401(k) and that's one of the disadvantages.

You can certainly talk to your administrator and say, "I have concerns about being exposed to the prison industry through my investments. Do you have a prison-free to investment option?" They might-- If they hear from enough participants that that's something that they want, you might be able to get that option. I think it's really important. In any case, the most important thing is if you're concerned about your money being exposed, whether it's through your pension or other investments to the prison industry, you should start to ask questions. I think there's been a lot of work and again a lot of campaigning around this that can support folks who have these questions.

Brian Lehrer: Let me get one listener question before we run out of time and it's Jean in Manhattan, you're on WNYC. Hi, Jean.

Jean: Hello. I wanted to know how much the prevention organizations regarding the prison-industrial complex are looking into corporations that are hiring prisoners to make their products within the prisons?

Brian Lehrer: Jean, I'm going to leave it there for time, I apologize. Bianca, briefly on that. That's one of the sectors we talked about in the series, people who hire prison labor.

Bianca Tylek: Use of prison labor is definitely one of the factors that is often considered into this, so I'll just say really quickly in terms of really practical resources that people can use to figure out if they're exposed to prison labor or any other part of the prison industry, we have a report that we publish annually, our last one was in 2020 that details over 4,000 corporations that are invested in the prison industry, and that can be accessed on our site, worthrises.org.

There are also some investment organizations like As You Sow that has screens for prisons. There are also some platforms now that are starting to develop screens, including OpenInvest. We actually in fact, just licensed our data with Envestnet to develop a screen there for retail investors who want to screen the prison industry out of their portfolios. I think there's increasing resources available.

Brian Lehrer: Let me just say, Bianca, that it's been such a great pleasure and so informative and educational to talk to you every week for these last three months. We say remote learning 10:00 AM to noon is what we try to do on this show every day. You have taught our listeners so much over the course of this series. We're tremendously grateful. Just tell people about the final event in your live series that is tonight at 7:00 PM. It's virtual, but it's live through The Greene Space. We have 20 seconds.

Bianca Tylek: Yes. Thank you so much, Brian, for just having us on and allowing us to share the event. Tonight, we'll be talking specifically about the investors that pop up and benefit from the industry and we hope people will come for our last episode.

Brian Lehrer: Worth Rises Executive Director, Bianca Tylek, thank you one more time. Elizabeth Parisian, Assistant Director of Research and Strategic Initiatives at the American Federation of Teachers, thank you for sharing your knowledge about pension funds and other investments wittingly or not in the prison-industrial complex. Thank you.

Bianca Tylek: Thank you.

Elizabeth Parisian: Thanks, Brian.

Brian Lehrer: Brian Lehrer on WNYC.

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