![Mass incarceration: remedies within reach Mass incarceration: remedies within reach](https://baystatebanner.com/wp-content/uploads/2018/03/divest-prisons.jpg)
Part Two of this two-part series summarizes financial sector tools and innovative reform approaches that seek to weaken the private prison business model, lower recidivism, generate jobs for ex-offenders and confront institutional racism. Part One provided a brief overview of changes among various political and nonprofit actors and the creative partnerships that have emerged.
“It is an ethical embarrassment and a clear disregard for black and immigrant lives for [the University of California] to be investing tens and hundreds of millions of dollars in private prisons and their financiers. In the age of mass incarceration and Black Lives Matter, the UC should be leading the fight for social justice and ethical investing as opposed to bankrolling the inhuman mass incarceration regime that has gripped America.”
Those are the words of Yoel Haile, a 2013 graduate of the University of California Santa Barbara and political director of a student activist group called the Afrikan Black Coalition that, along with black student unions from throughout California, put pressure on the University of California to divest its holdings in private prison companies — and the financial firms that support the prison industrial complex.
Haile’s statements appeared in an ABC press release issued on November 30, which revealed that UC had investments totaling $25 million in both the Corrections Corporation of America (CCA) and The GEO Group, as well as $425 million in Wells Fargo, one of the largest financiers of private prisons.
According to ThinkProgress, both CCA and GEO are well-known to activists for corruption and human rights violations such as feeding inmates spoiled, rat-eaten food, housing them in moldy cells, forcing them to defecate in plastic bags, profiting from free prison labor and denying them adequate medical treatment. In addition, the companies’ political contributions grease the wheels for securing prison contracts, and their highly-compensated executives are closely tied to national lobby groups such as the American Legislative Exchange Council (ALEC), which has promoted legislation leading to higher rates of detention and incarceration — and profitability.
The ABC efforts, part of a national movement led by the National Private Prison Divestment Campaign, were successful: On December 18, the $98.5 billion UC endowment began selling off its stakes in CCA and The GEO Group, which it completed by the end of 2015. The UC system has no plans to divest its Wells Fargo holdings, a UC spokeswoman told Reuters.
UC’s prison stock dump makes it the nation’s second university to do so; in late June, Columbia University’s board of trustees voted to pull its $10 million invested in CCA. Meanwhile, prison divestment campaigns continue at the City University of New York (CUNY), Brown, Cornell, Florida Atlantic and Central Florida University, among others.
“Punishment profiteering”
These victories show the growing revulsion over incarcerating people for profit. According to the American Civil Liberties Union, for-profit companies house roughly 16 percent of federal prisoners and six percent of state prisoners, as well as inmates in local jails in Texas, Louisiana and a handful of other states.
Combined, CCA and GEO generated $3 billion in revenue in 2014. That may not seem like a lot, but when other companies doing business with the mass incarceration ecosystem are added to the list — for example, telephone companies charging high rates for collect calls from inmates; banks and municipalities funding prison construction; companies using prison labor to lower operational costs; transportation companies; food service, vending and clothing companies; prison video communications services; surveillance and supervision equipment companies; pharmaceutical firms such as Pfizer that manufacture execution drugs; and private probation companies, to name a few — untold billions more are added to the profits.
Some progress already has occurred as a result of government action. Building on reforms begun in 2013, last October the Federal Communications Commission took another big step toward reducing excessive rates and fees for inmate phone calls, which they discovered could run as much as $14 a minute. Among the new measures: a lower cap on all interstate and intrastate inmate calling rates, no more flat rate calls and a cap or ban on unnecessary fees.
Meanwhile, half of the federal government’s immigrant detention centers are privately operated. And many of the estimated 7 million people who are on probation or parole pay monthly fees to private vendors in addition to their original fines. According to the American Friends Service Committee, municipal courts in at least ten states, mostly in the Southeastern U.S., contract with private, for-profit probation companies.
Add to that the growing niche market in privately-run halfway houses and the growing number of private, for-profit juvenile facilities. More than half of the nation’s 1,300 juvenile facilities are privately operated.
Remedies within reach
To combat punishment profiteering, a number of alternative strategies have emerged in recent years that use the power of capital markets to make change.
Socially responsible investors are using the same tools and tactics honed in previous boycotts, divestment and targeted investing campaigns such as those fighting apartheid in South Africa in the 1970s and ‘80s and climate change and our dependency on fossil fuels in current times. Only now investors are seeking to disrupt the private prison industry, delegitimize its business model and use impact investing or “pay for success” models that help generate economic opportunities for ex-offenders and others vulnerable to incarceration.
Divestment
The multiracial National Private Prison Divestment Campaign — comprising 150 advocacy groups, community organizations and unions — was launched in 2011 to target investors in Corrections Corporation of America and The GEO Group. It was convened by Enlace, a Portland, Oregon-based “strategic alliance of low-wage worker centers, unions and community organizations in Mexico and the U.S.” seeking to advance racial and economic justice.
In addition to the University of California and Columbia, the National Prison Divestment Campaign has persuaded Allianz Asset Management, Systematic Financial Management, the United Methodist Church, the Presbyterian Church USA, the Gates Foundation, General Electric and Pershing Square Capital Management to divest their holdings in CCA and GEO.
Meanwhile, a group consisting of Enlace, the Responsible Endowments Coalition (REC), California Immigrant Youth Justice Alliance (CIYJA), Immigrant Youth Coalition (IYC) and the Afrikan Black Coalition (AFC) have held annual youth gatherings to build the movement. Last August, they organized a Prison Divestment Youth Retreat in Los Angeles. The retreat drew young people from throughout the nation to “confront the private interests supporting racist, anti-immigrant and pro-incarceration policies,” according to Enlace’s website, and equip them with organizing tools to develop prison divestment campaigns on their campuses and in their communities. In December, the group published “Private Prison Divestment: A Toolkit for Campus Organizers.”
As for company-specific research, the American Friends Service Committee recently added to the arsenal. Its new “INVESTIGATE” website, launched November 2, is a digital investment screening mechanism that enables users to research companies engaged in violations of human rights and international law. Two focal points — prisons and Israel/Palestine — are covered in depth.
Among its features are the following, according to Dalit Baum, AFSC Director of Economic Activism:
- A map of the U.S. for-profit prison industry, highlighting the main companies involved in anything from facility management to food and commissary services, private probation and video visitation.
- In-depth profiles of 13 of these companies, which the AFSC call “the dirty 13” that includes a summary of divestment and boycott highlights to date.
- A series of new divestment recommendation, including criteria and list of companies, which will be reevaluated in six months.
- A tool for scanning investments, enabling users to upload or type in any list of holdings, however long, in any format. The tool will scan and produce a report highlighting the issues of concern.
“Pay for success”
Another strategy attracting lots of attention: the so-called “pay for success” model of public-private partnerships. Sometimes called a “social impact bond,” it involves pledges of government money to private contractors offering entrepreneurial solutions to persistent policy challenges such as homelessness, workforce development, early childhood education, child welfare and recidivism. Initial funds are provided by philanthropic and commercial investors. The hitch: Payment of public monies is linked to positive outcomes that have been measured and evaluated.
According to America Forward, a nonprofit, nonpartisan initiative launched in 2012 by Cambridge-based New Profit to link social entrepreneurs to national policymakers, the first Pay for Success project had an inauspicious start. Launched in August 2012, its purpose was to reduce adolescent recidivism among adolescents at Rikers Island. Historically, more than half of 16- to 18-year olds previously incarcerated in Rikers Island returned to jail within one year. To prevent this from happening, the Adolescent Behavioral Learning Experience used a targeted, evidence-based intervention aimed at improving personal responsibility and decision making, but first year results showed no impact on reincarceration rates. Consequently, according to America Forward, the project was terminated and “New York City Department of Corrections did not pay the private sector investors for the services provided to date.”
Nevertheless, the experiments continue. The Commonwealth of Massachusetts has the nation’s largest Pay for Success project, with its pledge to Roca, Inc., a Chelsea-based nonprofit with centers in Springfield and Boston that seeks to reduce recidivism. Launched in February 2014, the Roca project is a $23.5 million, seven-year initiative involving 929 young men in the probation or juvenile justice system. Its funding comes from philanthropic and commercial investors — including Goldman Sachs and The Boston Foundation — via Third Sector Capital Partners. “The funders assume project risk by financing services up front with the promise of repayment from government sources only in the event of success,” according to the project fact sheet.
The Commonwealth will pay the investors back only in the event the program succeeds in achieving its pre-defined positive social outcomes. That is a determination based on evidence and evaluation. If the intervention succeeds, it will be extended to another 391 young men.
As stated on its website, Roca’s four-year model aims “to disrupt the cycle of incarceration and poverty by helping young people transform their lives.”
More recently, Roca opened a construction trades laboratory behind its Springfield headquarters. According to MassLive, the 1,200-square foot former garage will be converted into a facility that teaches roofing, plumbing, heating, ventilating, air conditioning, basic electrical, basic plumbing and framing with wood or steel.
Roca — which means “rock” in Spanish — was founded in Chelsea more than 25 years ago by Molly Baldwin to help young people between the ages of 17 and 24 avoid getting caught up in the cycle of incarceration and poverty. It expanded to Springfield in 2010 and to Boston in 2014. Its tagline: “Less jail, more future.”
“The price of admission to Roca is a felony,” Roca director Christine Judd told MassLive last week. “Either a felony arrest or a felony conviction.” Thus far its results have been promising.
Black Power
Reflecting on the University of California divestment victory, ABC’s Yoel Haile was ebullient. “This victory is historic and momentous. Divesting $25 million is a good step towards shutting down private prisons by starving them of capital,” he said. “This is a clear example of Black Power and what we can achieve when we work in unity. This victory belongs to the masses of our people languishing behind America’s mass incarceration regime.”