CPP Fund head Geoffrey Rubin approved investment in for-profit prisons
GEOFFREY RUBIN IS PLEASED WITH THE JOB HE’S DOING. The rest of us not so much. Not since we learned he’s investing some of our CPP (Canada Pension Plan) money in companies that profit from locking up immigrants crossing into the USA.
Rubin is chief strategist for the CPP Investment Board (CCPIB)—their job is to make the most of the surplus beyond what the CPP needs to meet its current obligations. The board has used our money to invest in more than 4,000 companies world-wide. Two of those investments are in companies deep into making the anti-immigrant polices of Donald Trump possible.
The CPPIB holds US$5.9m of stock in Geo Group and CoreCivic. Both companies run private prisons for massive profits, including the “prison camps” set up to cage children following the US “zero-tolerance” crackdown on the US-Mexico border this summer.
Pension board ‘doubles down’ on prisons
Between August 2017 and 2018, the CPPIB grew its investment in Geo Group almost 13-fold to 153,500 shares worth $4.2m.
CoreCivic is the second largest private prison company in the USA. During the same period, our pension fund more than doubled our investment in CoreCivic to 73,700 shares, worth around $1.7 million. CPPIB sees nothing wrong with any of this. Their attitude is, it’s “just business,” and is just something that comes with the territory of big-time investing. And besides, the amount is really “small potatoes.”
A CPPIB spokesperson said: CPPIB’s objective is to seek a maximum rate of return without undue risk of loss. This singular goal means CPPIB does not screen out individual investments based on social, religious, economic or political criteria.” Many Canadians think this might be a good place to start.
Why not invest in narco gangs
CPPIB is a government agency, ultimately accountable to parliament, but free of any government input in its day-to-day operations. Despite its stated environmental, social and governance investment policy, CPPIB remains invested in some companies that other big investors have pulled out of due to ethical concerns.
For example, CPPIB holds:
- a $186m investment in ExxonMobil,
- a $202m investment in the tobacco giant Philip Morris International,
- a $18.7m in the defense contractor General Dynamics and
- a $36.8m in another defense contractor, Raytheon.
“Quite frankly, if they’re going to be investing in private prisons, weapons manufacturers and tobacco companies, why aren’t they investing in narco gangs?” asked NDP MP Charlie Angus.
Private prisons are a growth industry
The Trump administration’s policies have created a positive outlook for both the Geo Group and CoreCivic. Corporate executives for both companies told investors and analysts recently that they are expecting federal contracts for housing immigrant detainees to continue to grow.
Financial analysts from US investment banks and firms agree the companies have a positive growth outlook. “We believe an increased reliance on private prisons will likely be required to handle the inflow of detainees owing to federal prison populations that are at 120% of designed capacity,” wrote one JP Morgan analyst in a report about GEO Group.
Both companies provide a favorable dividend yield of about 7%, which means each investor receives a steady 7% return of their investment.
All of which is all that Geoffrey Rubin and his boss Finance Minister Bill Moreau need to hear it seems. A 7% return will trump other people’s pain and suffering every time.
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