According to records recently released via public disclosure request, the Seattle City Employees Retirement System (SCERS) owns almost $750,000 in stock of GEO Group, the company which operates the Northwest Detention Center in Tacoma, WA. SCERS also holds over $50,000 in CoreCivic, the largest private prison company in the United States.
The SCERS also directly and indirectly owns $71.5 million in fossil fuel company stock as of mid-2019, despite the adoption of ethical guidelines that prioritize investments that positively impact climate change.
Founded in 1929, the SCERS is responsible for managing $3 billion in assets in order to fund retirement benefits for current and former city employees. The fund is independently administered by a seven-member board composed of Human Resources and Finance department staff members, three elected as current and former city employees, an at-large member, and the chair of the finance and neighborhoods committee of the city council, outgoing Councilmember Sally Bagshaw. Bagshaw has not yet returned a request for comment.
In the past 20 years, the fund has grown tremendously, more than doubling in nominal value.
In 2013, the city adopted Environmental, Social and Governance (ESG) guidelines for investments in the pension fund, specifically focusing on “a positive action strategy that is intended to have a beneficial impact on this systemic problem [of climate change].” But examination of the SCERS investments show that the city’s adopted ethical guidelines often play a secondary role.
Furthermore, the board of SCERS has stated it will not divest from or invest in a targeted company, sector in order to advance environmental or social justice goals.
This policy prioritizes the financial health of the fund, but lacks a strong enforcement mechanism to hold accountable the companies whose stock SCERS owns. This may risk rendering the ESG policy a mostly meaningless PR maneuver. Because it does not prioritize ESG considerations, the city’s employee pension fund has been profiting off of companies that have seen growth directly from the private prison system, the fossil fuel industry and other fields with questionable human rights records.
Maru Mora Villalpando of La Resistencia, the community group organizing with detained immigrants to shut down the Northwest Detention Center, says that SCERS owning GEO Group stock is outrageous. “It’s appalling that a city that claims to be a sanctuary city for immigrants can still choose to have money invested in a company that is profiting from people’s suffering,” Mora Villalpando said.
To Mora Villalpando, the social cost of investment in private prison companies far outweighs the financial benefits SCERS might receive from them. “For us, even a dollar is too much to be invested in private prisons. [The city] should find a way [to divest]. I don’t care what the bureaucracy looks like, they should just divest, period,” she said.
Without the ability to divest, environmental and social justice considerations might have very little effect on where SCERS’s money goes. In May 2019, SCERS’ board passed a revised ESG policy, clarifying its stance on issues such as divestment. Current and former Seattle city employees can provide input on the ESG policy at SCERS’ monthly board meetings, which occur on the second Thursday of each month at 9 a.m.