The American Friends Service Committee has long been opposed to Arizona’s deep financial involvement in the for-profit private prison industry. Fundamentally, that is because we believe that incarceration for profit is immoral. But we also know that these corporations are profoundly mismanaged, negligent, and do not deliver the cost savings they promise to taxpayers.
That is why we were deeply disturbed to learn that the Arizona State Retirement System (ASRS) just increased its shares in CoreCivic (formerly Corrections Corporation of America), the largest for-profit prison company in the US.
During the second quarter, the ASRS “raised its position in shares of Corrections Corp. of America (NYSE:CXW) by 1.8% during the second quarter, according to its most recent filing with the SEC. The fund owned 49,800 shares of the real estate investment trust’s stock after buying an additional 900 shares during the period. Arizona State Retirement System’s holdings in Corrections Corp. of America were worth $1,373,000 at the end of the most recent quarter.”
The ASRS is the government-run retirement system whose membership includes employees of the State of Arizona, the three state universities, community college districts, school districts and charter schools, all 15 counties, most cities and towns, and a variety of special districts. A total of 205,162 members around the State.
In 2017, the State of Arizona spent approximately $168,617,100 of general fund dollars on private prison contracts. As of the latest Department of Corrections report, Arizona currently has 5 contracts that account for roughly 14% of the Department of Corrections’ $1 billion budget.
As the state’s corrections budget has grown, it has siphoned off general fund dollars from other critical agencies and programs. Ironically, some of those who have lost the most in state funding are the very same whose retirement is now invested in this predatory industry. For example, the Grand Canyon Institute reported that Arizona spends 60% more on prisons than on state colleges and universities. Yet, the retirement funds for those professors are now tied up in the corporation that arguably benefitted from the drastic reduction in state funding for higher education.
It is also worth noting that two former members of the Arizona Board of Regents were also serving on the Board of Directors of what was then Corrections Corporation of America (now CoreCivic). Former Arizona Senator Dennis DiConcini came under public pressure to resign from the Board from immigrant rights advocates and others (including AFSC) for his willingness to accept huge stock dividends from a corporation that was detaining thousands of immigrants in Arizona and elsewhere. He later resigned from the Board of CCA.
Another former ABOR member, Anne Mariucci, is currently listed as “Independent Director” at Corrections Corp. of America. She remains on the Board of Directors at Corrections Corp. of America, as well as Southwest Gas Corp., Arizona State University Foundation, Banner Health System, Inc., Fresh Start Women’s Foundation and The University of Arizona Health Network. Notably, she served previously as the Director of the Arizona State Retirement System.
CoreCivic is also the largest employer in Pinal County, where it operates a total of 6 facilities. In addition to contracts for incarceration of Arizona state prisoners and Mesa Jail detainees, the company also imports prisoners from California, Vermont, and Hawaii, as well as thousands of immigrant detainees from ICE and the US Marshals.
The corporation is moving aggressively into other areas of Arizona’s criminal justice system, including the recent privatization of the Mesa jail and the acquisition of New Beginnings Treatment Center, Inc, a residential reentry center in Tucson that holds a contract with the Federal Bureau of Prisons.
A closer look at the ASRS’s holdings reveals that it is also invested in the nation’s second largest for-profit prison corporation, GEO Group. In fact, as of August 2, 2017, ASRS had 52,450 shares in the company–more than its recent increased investment in CoreCivic. GEO Group also holds contracts with the Arizona Department of Corrections for Florence West and Phoenix West.
You can read the full list of the Arizona State Retirement System’s investments here.
AFSC has long advocated for divestment from private prisons as a strategy that both individuals and institutions can use to help end for-profit incarceration. The organization even has a website that allows people to scan their investments to find out if any of their holdings are involved in prison profiteering: http://investigate.afsc.org/