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CUNY financially tied to private prison industry

CUNY invests thousands of dollars into private prison companies, said documents obtained by CUNY Prison Divest through a Freedom of Information Act request.

The documents revealed CUNY invested $275,200 in total in private prisons as of September 2014. It invested $248,900 in G4S, one of the top private prisons in the U.K. Moreover, it invested $13,300, $8,400 and $4,600 in Corrections Corporations of America, GEO Group Inc. and Aramark, respectively.

A private prison operates as a contractor for governmental agencies to house inmates in either public or private jails. Its use surged in the 1980s due to overcrowding, a result of the War on Drugs.

This new information gave legitimacy to CUNY Prison Divest’s claims, said Arlene Cornejal and Nancy Uddin, core members of the group.

“We requested the FOIA report so that we could receive actual proof of these investments that were taking place. We knew that a lot public institutions are investing in companies that uphold the prison industrial complex,” Cornejal and Uddin said.

CUNY Prison Divest was created in response to the problems of for-profit prisons, specifically because of the disproportionate incarceration of people of color. Indeed, a study from Oregon State University last August found black and Hispanic inmates were overrepresented in private prisons.

“As a student[s] of color attending a public university, [We] think it is important to be in solidarity with people in prison who are constantly hurt by the injustice system and this is why we need to demand our institution to stop investing in racism,” Cornejal and Uddin said.

More than 53 percent of students that identify as black or Hispanic made up CUNY’s fall 2013 student body, said the CUNY Office of Institutional Research and Assessment.

CUNY works with Cambridge Associates, a company that provides “investment consulting, independent research and performance monitoring,” said the Cambridge Associates’ firm description.

Michael Arena, director for communications and marketing for CUNY, said the investments made by CUNY are used for student scholarships. Last year, the university used nearly $2.5 million from its investments to help enable “nearly seven of ten full time undergraduates to attend tuition free.”

“To ensure that this vital source of scholarship money remains available for deserving students, the University utilizes Cambridge Associates to recommend and advise on the selection of several fund managers,” Arena said.

Furthermore, Arena highlighted how small the investments were in relation to the rest of the holdings.

“As of Sept. 30, 2014, G4S represented 0.1 percent of CUNY’s investment pool. GEO Group represented 0.003 percent of the CUNY investment pool,” Arena said.

Brian Sonenstein, a journalist covering criminal justice and prisoners’ rights for Firedoglake, said there are multiple problems with private prisons.

“It’s a massive misuse of taxpayer dollars that otherwise could be invested in community justice alternatives instead of incarceration, it reduces the government’s accountability for prisoners and some research would suggest it actually increases recidivism,” Sonenstein said. “Finally, it breeds a self-perpetuating cycle of crime and poverty in families and communities from which prisoners are drawn.”

Sonenstein stressed that private prisons focus on one important thing–profit.

“But, on a fundamental level, the problem with private prisons is the profit motive. Corrections Corporation of America, [for example], is a business first and foremost. It exists to make a profit. It has shareholders, like schools such as CUNY, demanding it do so,” Sonenstein said.

Private prisons profit from overpricing inmate commissaries, which include food, clothing and hygiene products bought with their own money, privatizing inmate communications and controlling medicine by changing or canceling prescriptions, according to Sonenstein.

Moreover, they hire people with minimal experience in order to pay them less, under-staff prisons and overwork their employees, which results in a breeding ground for violence.

For-profit prisons enter contracts with state and federal governments, where beds must be filled between 90 and 100 percent capacity. In turn, as documented in a report by the Committee on Causes and Consequences of High Rates of Incarceration, they “expended substantial effort and resources in lobbying for more punitive laws and for fewer restrictions on the use of prison labor and private prisons.”

Groups like CUNY Prison Divest are not alone in their efforts. Students at Columbia University and University of California at Berkeley rallied for divestment in private prisons in 2014. At Berkeley, a student resolution was passed to stop the college from investing in private prisons.

Columbia Prison Divestment, a similar group, discovered last September how their college owned $8 million and $2 million worth of shares in CCA and G4S, respectively. They found such figures after obtaining a breakdown of 10 percent of the university’s investments, said The Columbia Daily Spectator.

Arena stressed investments were not made on an individual basis, but part of Russell Investments’s Russell 3000 Index, which, according to the firm, represents “98 percent of the investable U.S. equity market.”

“CUNY’s investments do not involve individual stock purchases, but rather purchases in funds that hold basket of stocks. For example, one of the funds reflects the holdings of the Russell 3000, an index fund that is passively managed. Because expenses are generally lower for index funds such as the Russell 3000 Index, more of the earnings can be reinvested for greater returns to fund scholarships,” Arena said.

CUNY Prison Divest formed recently, but it aims to raise issues involving private prisons across CUNY campuses.

“We’ve primarily focused our work so far on building awareness around this issue in our respected campuses. However, we do strategically plan out on calling out CUNY for it’s investment in private prisons that allow for the mass incarceration and criminalization of black and brown people,” Cornejal and Uddin said.

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