It could take up to a year and a half for Sonoma County to sever financial ties with border detention center-related companies should county officials commit to divestment, Sonoma County Treasurer Erick Roeser confirmed Wednesday.
County supervisors on July 23 heard from numerous residents who want the county to pull out of investments totaling more than $100 million with banks that have done or are doing business with private prison companies that run detention centers for migrants and asylum seekers along the U.S.-Mexico border.
Conditions in those camps have been described as inhumane by many, including by Rep. Mike Thompson, D-St. Helena, who toured a detention facility in McAllen, Texas in mid-July.
Roeser said he, too, has concerns about the conditions of the camps, but he can’t lawfully pull the county’s money out now because other investments would yield lower returns.
With its $82.5 million tied to Wells Fargo and $20 million in Bank of the West, the county, activists say, is rewarding private prison companies with Sonoma County taxpayer dollars. Those activists want to know how much money is required to make “imprisoning immigrants and children” worth it — sparking a now multiweek reckoning at the Board of Supervisors on the balance between money and community values.
Supervisor Susan Gorin said she recognizes the apparent dichotomy.
“Fiduciary duty comes from professional organizations; they have blinders on about political values,” Gorin said. “It’s about that bottom line. We as a community, and as a nation and world should start questioning, ‘Should we make better choices that would better prepare us for a sustainable future?’ ”
Since residents began pressing the issue late last month, the Board of Supervisors has yet to weigh in with any definite answer.
Supervisor Lynda Hopkins said she met with fellow Supervisor James Gore and County Administrator Sheryl Bratton on Tuesday, and the trio made plans to seek board approval to send a letter to the banks stating their concerns with funds tied to detention facilities. Further, Hopkins said they’ll ask Roeser to give supervisors a presentation related to alternative investment strategies.
Supervisors delegate investment authority yearly to the treasurer, putting Roeser in charge of $2.5 billion. That means they can also take authority back, and former longtime Sonoma County Supervisor Ernie Carpenter, who led a divestment push centering on South Africa during the late stages of apartheid, said they need to do that now.
“The board has total authority, in my opinion,” Carpenter said. “They can’t pass off responsibility.”
Roeser said divestment is a somewhat nebulous term. Concerned residents want the county’s money removed immediately, but Roeser said it’s not that simple, and that any investment decision he makes must be best for the county financially.
“If we were to divest or sell our current holdings, we would not be able to reinvest that money at the same rate of return through the maturity dates of our current holdings,” Roeser said, adding that the county has very favorable rates with its current investments. “So that would be lower income.”
If the board did take action, but sought to reduce financial losses, it might look like Hopkins’ suggestion last week, when she said the county could divest over time by forgoing future deals once current investments run their course.
Roeser agreed, hypothetically, that the approach could work. The county has one investment with Bank of the West that will reach maturity in September.
It has three investments with Wells Fargo, with the newest reaching maturity in January 2021, meaning any divestment push would have to wait 1½ years to advance.
“I’m aware of the county’s goals, and what we can do in our role to be consistent with those goals,” Roeser said, speaking of supervisors’ distaste for detention center-related investments. “We’re not out there looking to not take that into consideration.”
Morgan Simon, a finance expert and author of “Real Impact: The New Economics of Social Change,” took part in a recent panel advising nonprofit entities on divestment. Simon said government entities don’t always look at the real-world impacts of the companies or policies that are getting their dollars.
“We like to talk about, ‘What’s a reasonable rate of return?’ ” Simon said. “If market rate is where we destroy the environment and treat people terribly, perhaps that’s not how we want to define the market and our definition of success as a society.”
Hopkins said the only line currently being drawn is based on legality. For instance, the county wouldn’t invest in illegal activities despite the draw of potential higher returns. She lumped the detention center investments into another camp — things that are technically within a legal framework, but are still immoral.
“At one point, slavery was legal,” Hopkins said. “There’s a very high return on investment for slavery. At that point, it would have been legal for governments to invest in that. Is that right? Absolutely not.”
Mara Ventura is the director of North Bay Jobs With Justice, which focuses on worker and immigrant rights. She’s concerned county officials are looking for excuses to continue to fund the banks, saying it runs afoul of the county’s values.
Ventura recognized the county’s financial support of legal services for immigrants, but said the continued investment in detention center-related companies is problematic.
(The county is) “cutting the legs out of the funding we’re providing,” Ventura said.
“What is the amount of money that’s worth it to continue to imprison immigrants and children?”