The University of California is planning to sell the almost $25 million of shares it had indirectly invested in private prisons after receiving pressure from black student leaders to divest.
The Afrikan Black Coalition, which brings together the black student organizations on campus, began to push for the University to make such a move in November. UC has about $25 million in shares invested in Corrections Corporation of America and The Geo Group.
The decision comes at a time when student protests against racism are rampant on college campuses across the country in addition to the Black Lives Matter civil rights movement against the US criminal justice system, writes Katy Murphy for The San Jose Mercury News.
Yoel Haile, the coalition's political director and a master's student in public policy at UC Berkeley, said the move came as part of a larger campaign against private prison companies. The group believes the companies to have taken an active role in the high incarceration rate of African Americans during the "war on drugs."
"In this critical time in the Black Lives Matter movement, we have to direct our attention to the main institutions that are keeping our people down and locking our people out of opportunities," he said. "This is one initial battle that we have won on the way to make private prisons illegal."
UC spokeswoman Dianne Klein announced earlier in the week that the school had sold its holdings, which were part of its $100 billion portfolio. Although UC has a policy against "blanket divestment," she said that a meeting with the Afrikan Black Coalition convinced the university's chief investment officer that the companies did not meet the sustainable investment policy any longer, adding that the decision was based on risk over the next few years, writes Alexei Koseff for The Sacramento Bee.
Klein went on to say that she was unaware of exactly which private prison companies the university held shares in or the exact amount of money that had been invested.
Corrections Corporation spokesman Jonathan Burns said: "Frankly, we're delighted to have a greater share of investors who are thoughtful about our business, can tell the difference between rhetoric and reality, and agree that the free market is a great creator of innovation and economic opportunity."
The coalition is continuing to pressure the University into pulling $425 million out of Wells Fargo, who invests in private prison companies, unless the bank agrees to cancel its relationship with Corrections Corporation of America and The Geo Group. However, Klein said the University is not agreeing to that divestment, arguing that it does not make financial sense.
Wells Fargo won a dismissal of lawsuits in July in both Chicago and Los Angeles that suggested it had acted in violation of the federal Fair Housing Act. A separate lawsuit was filed against the company in September by the California city of Oakland.