Detroit Pistons owner Tom Gores has been freed from his fundraising prison.
Two massive pensions — including New York City’s pensions and the Pennsylvania Teachers pension — are planning to commit more money to a new $8 billion fund Gores is raising — despite protests from prison rights advocates over his firm’s ownership of a company that makes money from prison phone calls.
Securus Technologies, which Gores’ Platinum Equity bought in 2017, has been criticized for charging high rates to people who accept calls from prisons, including rates of 50 cents a call, plus 5 cents a minute at Rikers before the charges were nixed by the city earlier this year.
Despite calls from activists to stop supporting Securus by giving money to Gores, the pensions are ready to move forward with roughly half a billion in new funding, including $200 million from NYC and roughly $300 million from Pennsylvania.
In response to critics, Pennsylvania’s pension board studied the issue but found Securus was lowering phone rates in Pennsylvania state prisons, it said.
NYC’s pensions, meanwhile, are moving forward despite protesters showing up Wednesday at one of their meetings demanding that they not invest.
In an effort to appease protestors, Comptroller Scott Stringer is allowing the city’s five individual city pensions, including the NYPD pension and the FDNY pension, to bow out of any future investments Platinum makes in prison-related companies.
“His action allows the city to keep its own hands clean, but does little to move Platinum Equity to act,” Bianca Tylek, the founder of advocacy group Worth Rises, said.
“Stringer made New York City the first public pension fund to divest from private prisons,” a spokesman for the comptroller’s office said in defending the action.
Platinum delivers much better than average private equity returns, including a 39-percent rate of return for a fund that opened in 2012, as of the end of 2017.
A Platinum spokesman declined comment.