TORONTO — The Crown corporation that controls pensions for Canadian public service workers, Canadian Armed Forces soldiers and RCMP officers invested millions of dollars last year in American companies that operate private prisons and immigrant detention centres.
PSP Investments, which invests pensions for federal government employees, owns shares worth US$2.7 million in The GEO Group and about US$2 million in CoreCivic, according to a quarterly report filed with the U.S. Securities and Exchange Commission (SEC) Feb. 12.
Both companies are among the largest private prison operators in the U.S. and also run immigrant detention centres.
A spokesperson for a union that represents Canadian public sector workers says its members are “categorically opposed” to these pension fund investments.
“Our belief is that those functions are better performed by the public sector, as opposed to the private sector,” James Infantino, a pensions and disability insurance officer with the Public Service Alliance of Canada (PSAC), told HuffPost Canada.
“It creates all sorts of problems.”
A spokesperson for PSP Investments said the stock in CoreCivic is part of a portfolio that mimics the moves of the S&P 600 index.
“As a global investor, PSP Investments has a significant allocation to public markets which we manage internally and externally, using a combination of actively-managed and index-replication strategies. Our CoreCivic investment is held in our passive index replication portfolio which follows the S&P 600 index,” Verena Garofalo said by email.
The GEO Group stock is “mostly” in the same type of portfolio, Garofalo said.
A spokesperson for the Treasury Board of Canada Secretariat said the government does not give PSP Investments any direction on its portfolio.
“The PSPIB operates at arms-length from the federal government and therefore is not part of the federal public administration and its multi-billion-dollar funds are managed by an independent board of directors,” Martin Potvin said by email.
Outrage ballooned under Trump
Backlash to the immigrant detention industry, and these two companies in particular, exploded over the past four years as former U.S. president Donald Trump’s administration increased the number of immigrants detained, increased the outsourcing of their detainment to private companies and separated thousands of children from their detained parents.
The GEO Group and CoreCivic together built seven of the 20 biggest new detention centres during Trump’s presidency, according to a 2020 report by the American Civil Liberties Association. Both companies make about 25 per cent of their revenue from contracts with U.S. Immigration and Customs Enforcement, the report said.
Public campaigns in 2018 and 2019 pressured banks that financed The GEO Group and CoreCivic through loans and lines of credit to cut ties, and many did.
The Canadian Pension Plan Investment Board quietly dropped its investments in the two companies in 2019.
At that time, PSP Investments assured PSAC that it was not involved with either company.
“We confirm that we are not a direct shareholder of either of these companies,” the pension board’s president and CEO Neil Cunningham told PSAC’s leadership in a letter the union shared with HuffPost.
He also said that PSP Investments takes “environmental, social and governance” factors into consideration before making investments.
That’s a line that Jasmine Rashid has heard many times. She’s worked on campaigns to pressure banks to stop financing The GEO Group and CoreCivic through her job as director of advocacy and strategic partnerships at Candide Group, a social justice and sustainability-focused investment firm.
“The private prison industry is a relatively ... new industry. And therefore, folks need to be updating their human rights policies yearly, because human rights violations are changing all the time,” she told HuffPost.
“And if you don’t, you’re just increasing the amount of reputational risk and real material risk that you’re opening up your shareholders to.”
She said that divestment campaigns can have a real impact on the number of people detained.
“Without the financial incentive … these industries would cease to exist.”
This story has been updated with comment from the Treasury Board of Canada Secretariat and additional comment from PSP Investments.
