On March 8, JPMorgan Chase & Co. announced that the firm will no longer finance private, for-profit prison operators, including those who run detention facilities along the border between the United States and Mexico. Although this is welcome news, the move could be simply symbolic if banks and other groups do not continue to call for divestment.
And it’s not just financiers and big investors who have a responsibility to act. Everyday Americans should do their part, too.
About 70 percent of immigrant detainees are held in facilities owned by for-profit companies, according to the National Immigrant Justice Center.
These corporations face allegations that they force detained immigrants to perform unpaid labor inside their facilities, a kind of modern slavery.
GEO Group, of the two publicly traded companies affected by the JPMorgan decision, has been accused by human rights monitors of neglect and abuse at their facilities. The Adelanto ICE Processing Center in California, with its history of death and complaints of assault and medical neglect, has drawn comparisons to a modern-day concentration camp.
An ongoing lawsuit asserts that detainees were subjected to practices that violate federal anti-slavery laws, including the Trafficking Victims Protection Act.
And although private prison revenues continue to be measured in billions of dollars, many conscientious investors are choosing not to invest in them because of their participation in an abusive federal detention policy.
For Americans with money invested in the stock market — through retirement plans, college funds, or rainy day accounts — one of the simplest actions they can take is to make sure those dollars aren’t supporting the for-profit prisons that hold detained immigrants.
Private prison companies are organized as real estate investment trusts, which must pay 90% of their profits to shareholders in the form of dividends.
Remembering that investors are part owners of these companies helps to frame the issue more clearly. Many people would balk at the idea of physically owning or collecting rent from an immigration detention facility, but investors who own GEO Group stock are effectively doing that.
It’s possible that investors unwittingly own these stocks through index funds or other investment vehicles. Asking an employer’s human resources department if prison-free investment options are available is a way that individuals can do their part to contribute to a constructive response to abusive detention policies.
It’s going to take institutional investors, financiers, and everyday people collectively making the choice to divest or refrain from investing in for-profit prisons to turn the tide on this problem. JPMorgan’s decision was a good start. Individuals can do their part, too.
Joshua Brockwell is Investment Communications Director at Azzad Asset Management, a socially responsible registered investment advisor located in Falls Church, Virginia. As a matter of policy, Azzad does not invest in for-profit prison companies in any of its funds or portfolios.