Yale University Divests CCA Stock Following Student and PLN Protests
According to a May 12, 2006 Securities and Exchange Commission filing, Farallon Capital Management LLC, a hedge fund that handles part of Yale University's $12 billion endowment, has sold all of its shares in Corrections Corporation of America (CCA), the nation's largest private prison operator. Farallon, which controls approximately $10 billion in financial assets, dumped around $90 million in CCA stock over the preceding year; about $1.5 million of that stock was attributed to Yale's investments.
The sell-off of private prison shares by one of the country's top universities followed a year-long period of organizing and campaigning by Yale's Graduate Employees and Students Organization (GESO). GESO argued that investing the school's funds (including student tuition payments) in a private prison company was a moral issue due to CCA's history of inhumane treatment of prisoners, an over-reliance on mass incarceration, and the disproportionate imprisonment of minorities. Students and teachers at eight other colleges, including Duke University and the University of Michigan, also called on Farallon to divest its CCA holdings.
GESO's anti-CCA campaign included protest rallies on December 1, 2005 and March 27, 2006 that drew hundreds of supporters. PLN editor Paul Wright, associate editor Alex Friedmann and office assistant Sam Phillips attended the March demonstration, which coincided with a hearing on Yale's CCA stock ownership by the university's Advisory Committee on Investor Responsibility. Friedmann, who served six years at a CCA-operated prison in Clifton, Tennessee, spoke at the rally as a featured speaker. "Their [CCA's] only motive is to make money. It is not to protect public safety. It is not to protect the prisoners under their control. ... It is to make money and, unfortunately, it sounds like Yale's investment policy follows those same thoughts," he said.
Wright, Friedmann and Phillips attempted to attend the advisory committee hearing but were stopped by armed guards. After informing security officials that they were members of the media, PLN's staff was told the committee especially didn't want the media present. Yale, a private university, apparently doesn't want outsiders listening in -- even on issues of national public importance. GESO representatives addressed the committee and detailed abuses by CCA staff, including the 2004 beating death of Estelle Richardson, a Tennessee prisoner, by four CCA guards. [See: PLN, June 2006]. The committee was unimpressed and declined to recommend divestment.
Yale University President Richard Levin and the investment advisory committee defended the school's CCA stock ownership, claiming that divestment was not appropriate under Yale's ethics policies because investment in CCA did not reach the standard of "grave social injury." In the past, Yale has made ethics-based divestment decisions only twice, selling stock in companies operating in South Africa under apartheid and more recently, in February 2006, in oil companies operating in the war-torn Darfur region in Sudan.
Friedman noted at the protest rally that Yale's investment in CCA might be just a ?"rop in the bucket, but it's a drop that taints the entire bucket. You can't just have a little injustice."
Farallon had sold two-thirds of its remaining CCA holdings by March 2006; the rest was dumped within two months of GESO's March protest. "I am delighted that Yale and Farallon have listened to the outcry against CCA and have done the right thing.... This is a major victory for the values of higher education," said Sarah Haley, a GESO member who authored Endowing Injustice, a report that revealed Yale's stock ownership in CCA.
GESO's successful campaign against Yale's CCA stock holdings was aided by Not With Our Money!, a project of Grassroots Leadership, a national non-profit organization that opposes prison privatization. Previously, Not With Our Money! led a student-based campaign that ultimately forced mega-corporation Sodexho-Marriott to sell off its CCA stock in June 2001. At the time, Sodexho was CCA's largest shareholder. [See: PLN, Jan. 2001]. In both these cases the stock was then bought by other investors and business continues as usual.
Not With Our Money! is presently targeting institutions that provide financial backing to the private prison industry, including Lehman Brothers, an investment bank. For more information on this campaign, visit: www.notwithourmoney.org.
Sources: Yale Daily News, Hartford Courant, Yale Herald, New Haven Register
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