At-Large Metro Councilmember Erica Gilmore, taking a cue from cities including New York and Cincinnati, wants Nashville’s pension fund to divest from private prisons — specifically its nearly $1 million investment in Nashville-based company CoreCivic.
Gilmore’s newly filed resolution, if passed, would request that the Metropolitan Employee Benefit Board’s investment committee sell off its CoreCivic stake. Gilmore writes in the resolution that it is incumbent upon Metro Council members to seek divestment from “entities engaged in ethically dubious — albeit legal — enterprises, including the operation of private prisons.”
“While the operation of private prisons is legal, deriving a profit from the incarceration of others is a morally bankrupt enterprise with which the Metropolitan Government should not be affiliated,” she continues, though she doesn’t mention Metro’s $100 million contract with CoreCivic to run the Metro-Davidson County Detention Facility.
Gilmore tells the Scene that a “group of concerned Nashville residents” brought the divestment idea to her. Citing CoreCivic’s annual revenues, which are north of $1.7 billion, she adds that she does not believe divesting the city’s share will hurt the local company.
Steve Owen, a spokesperson for CoreCivic, sent a lengthy statement to the Sceneresponding to Gilmore’s proposal.
“Unfortunately, much of the information about our company being shared by special interest groups is wrong and politically motivated, resulting in some investors reaching misguided conclusions about what we do,” Owen writes. “The fact is our sole job is to help the government solve problems in ways it could not do alone — to help ensure the inmates in our care are equipped upon their release never to return to prison, provide solutions for overcrowded and potentially unsafe conditions, and meet many other critical needs efficiently and innovatively.”
Owens disputes several specific claims in Gilmore’s resolution, including that the company lobbies governments in an effort to lengthen prison sentences. Owen says that company policy precludes lobbying for or against policies that determine detention times.
CoreCivic has had to fend off criticism about its management of the local jail, where a scabies outbreak last summer affected dozens of inmates. More recently, the Green Hills-based company has come under fire for its work managing immigrant detention facilities for federal authorities.
University of Tennessee finance professor Andy Puckett told the Scene last year that so-called socially responsible investing practices — in which funds consider both the financial and social consequences of an investment — run the risk of limiting the pension fund’s profit potential.
“From a theoretical standpoint,” said Puckett, “if you have a universe of stocks to choose from and then you eliminate some of those stocks from your universe of choices, you can never be better off.”
More than 20,000 current and former Metro employees are included in the pension fund, which last year held an approximate market value of more than $3 billion. An outside investment manager engaged by the investment committee makes individual investment decisions on behalf of the fund, which also includes stakes in other local companies, including Ryman Hospitality.