Private Prison Stocks have a close connection to some state teacher pension funds.
Large banks, insurance companies, and pension funds own the majority of the stock in private prison companies GEO Group (GEO) and Core Civic formerly Corrections Corporation of America (CXW). The top 19 largest shareholders of CXW own 58.89% of the stock and the top 19 largest shareholders of GEO own 80.88% of the stock. However, the other investors in these private prison stocks might be more interesting to readers. Most investors are financial institutions, but some investors are state governments, teacher pension funds, and state employee retirement funds. For example, The State of California Teachers Retirement System owns 434,206 shares of GEO Group worth $11M, the stock generates $204,000 per quarter $816,000 annually. The State of California Teachers Retirement System owns 330,649 shares of Core Civic worth $8.4M, the stock generates $142,000 per quarter $568,000 annually. The State of California is just one of many state government investors in the private prison industry. Between GEO and CXW The State of California owns $19 million worth of private prison stocks that generate $1.3 million in annual income for California teacher pension funds.
Some states have private prisons, and their pension funds own private prison investments. In some cases, states with private prisons have significantly increased their private population. The Sentencing Project has analyzed Bureau of Justice statistics from the Department of Justice between 2000 and 2016.
“Private prisons in the United States incarcerated 128,063 people in 2016, representing 8.5% of the total state and federal prison population. Since 2000, the number of people housed in private prisons has increased by 47%.”
“According to BJS data, 19 of the states with private prison contracts incarcerate more than 500 people in for-profit prisons. Texas, the first state to adopt private prisons in 1985, incarcerated the largest number of people under state jurisdiction, 13,692.”
The Sentencing Project Compared to Public Investment Filings
There are some states that hold GEO and Core Civic in their portfolios that have significantly increased their private population. Arizona, California, Florida, Ohio, Tennessee, and Colorado all hold private prison investments and have increased their total number of private inmates significantly since 2000. New Jersey, New Mexico, Pennsylvania, and Texas hold private prison investments and have grown or maintained their private prison population. While other states like Kentucky, Michigan, and Utah hold private prison investments and have eliminated their private population. New York and Oregon have private prison investments but since 2000 or earlier the states have not held incarcerated people in private prisons. Arizona, California, Florida, Ohio, Tennessee, and Colorado have significantly increased their private population since 2000.
Core Civic Teacher Pension Investments
The State of Arizona holds 85,413 shares of GEO and 82,302 shares of CXW. Combined the stock is worth approximately $4.2 million. Between 2000 and 2016 the private population in Arizona prisons grew 479% from 1,430 people to 8,285 people. GEO has 3 Arizona facilities, and Core Civic has 7 facilities.
The State of California holds 434,206 shares of GEO and 330,649 shares of CXW. Combined the stock is worth $19.1 million. Between 2000 and 2016 the private population in California prisons grew 54.1% from 4,547 people to 7,005 people. GEO has 42 California facilities, and Core Civic has six facilities.
The State of Florida holds 67,256 shares of GEO and 108,510 shares of CXW. Combined the stock is worth $4.4 million. Between 2000 and 2016 the private population in Florida prisons grew 211.3% from 3,912 people to 12,176 people. GEO has 6 Florida facilities, and Core Civic has 2 facilities.
The State of Ohio holds 91,141 shares of GEO and 274,906 shares of CXW. Combined the stock is worth $9.1 million. Between 2000 and 2016 the private population in Ohio prisons grew 226.3% from 1,918 people to 6,259 people. GEO has 6 Ohio facilities, and Core Civic has 2 facilities.
The State of Tennessee holds 90,000 shares of GEO and 81,851 shares of CXW. Combined the stock is worth $4.3 million. Between 2000 and 2016 the private population of Tennessee prisons grew 111.8% from 3,510 people to 7,433 people. GEO has 0 Tennessee facilities, and Core Civic has 9 facilities.
The State of Colorado holds 21,232 shares of GEO and 21,175 shares of CXW. Combined the stock is worth $1 million. Between 2000 and 2016 the private population in Colorado prisons grew 69.8% from 2,099 people to 3,564 people. GEO has 14 Colorado facilities, and Core Civic has 16 facilities.
State retirement funds are not the only major education affiliated investor. The Teachers Insurance and Annuity Association TIAA is a major financial institution that created pensions for college professors. The firm has over $1 trillion in assets under management. TIAA has 1,976,083 shares of GEO and 937,352 shares of CXW. Combined the stock is worth $72.9 million. Between 2000 and 2016 the private population in Federal prisons grew 120% from 15,524 people to 34,159 people.
GEO has 71 U.S. Corrections facilities with 75,338 beds. 7 International facilities with 7,861 beds. 50 Residential Reentry facilities with 11,512 beds. 62 non-residential reentry facilities. 11 residential facilities for youth with 1,235 beds. Core Civic AKA Corrections Corporation of America has 91 facilities in the United States. They have bed capacity for 80,000 people in the United States. The prison industry thrives when more people are incarcerated. Between 2000 and 2016 the total number of people incarcerated in the United States private prison system grew 46.6% from 87,369 people to 128,063 people.
According to the data collected from the Bloomberg Professional Service and the Sentencing Project, it is clear state employee pension funds have small investments in the private prison system in their own state. Some government employees including teachers have a small amount of their retirement fund invested in GEO Group and Core Civic. There are teachers in Arizona California, Florida, Ohio, Tennessee, and Colorado teaching their students while a very tiny portion of their pension fund benefits when one of their students is incarcerated. These companies also maintain immigration detention facilities.
According to Reuters The Chicago Teachers Pension Fund recently decided to phase out private prison investments because of their involvement with ICE and immigration detention. The Chicago Teachers Pension Fund voted days after The American Federation of Teachers urged pension funds to eliminate their exposure to private prisons. The California State Teachers Retirement System are also evaluating their private prison holdings.
Sources:
Bloomberg Professional Service — Public Filings as of August 27, 2018
