Rhode Island Pulls Investments in Immoral Businesses: Assault Weapons and For-Profit Prisons

“In the for-profit prison context, growing your revenue means locking more people up. Which… runs counter to this notion of criminal justice reform and not locking people up for minor and non-violent offenses,” said Rhode Island General Treasurer Seth Magaziner.

Rhode Island General Treasurer Seth Magaziner today announced that the State Investment Commission has voted to approve his proposal to pull pension fund investments in “fundamentally immoral businesses” that manufacture assault-style weapons for civilian use or operate private for-profit prisons.

“Assault weapons and for-profit prisons have caused too much pain for countless Americans, including many Rhode Islanders,” said Treasurer Magaziner. “The State Investment Commission is taking this action after careful consideration. With today’s decision, we can do the right thing without impacting the health of Rhode Island’s pension system.”

Explaining his position on for-profit prison operators, Magaziner called them a “fundamentally broken business model.”

“When you’re running a business and you want to expand your profitability,” said Magaziner, “there’s only two ways to do it. You either grow your revenue or cut your costs. And in the for-profit prison context, growing your revenue means locking more people up. Which… runs counter to this notion of criminal justice reform and not locking people up for minor and non-violent offenses.” Private prison companies have a monetary motivation to lobby for public policies that increase already high incarceration levels in the United States.

As for guns:

“There is a growing epidemic of gun violence in this country and particularly in recent years a disturbing growth in the number of mass shootings happening nationally,” said Magaziner. “In these mass shootings, particularly the largest and deadliest mass shootings, assault style weapons that were not designed for civilian use, but are now be marketed and sold to civilians, play a disproportionate role. The five deadliest mass shootings in the recent decade all saw the use of assault weapons.” Each year, 36,000 Americans die from gun violence, with mass shootings becoming increasingly frequent.

Magaziner invited Erica Keuter, an East Greenwich resident and a survivor of the deadliest mass shooting in United States history to speak. Keuter was at the country music festival in Las Vegas where a man murdered 58 people and injured 851 in a bout ten minutes.

“That night not only changed my life significantly, it also impacted those who are close to us, especially our children,” said Keuter. “I’m so grateful to be living in a state whose leaders are doing their best to make a safer world for my girls, while setting an example of good government for the rest of the country.”

Rhode Island’s state pension system has less than $250,000 total invested in affected investments, representing 0.003 percent of assets in the $8.7 billion pension fund, says the Treasurer’s office. After the shares of these companies are sold, the proceeds will be reinvested across the broader market.

Rhode Island is the fourth state pension system to drop its investments in private for-profit prisons, and also the fourth state to end its investments in the manufacture of certain firearms for civilian use.

The Rhode Island pension system earned 16.7 percent in the 2019 calendar year, outperforming the plan benchmark return of 15.0 percent for the same period. The fund has earned $2.3 billion since Treasurer Magaziner announced his “Back to Basics” investment strategy in September 2016.

Also invited to speak at the press conference were State Representative Justine Caldwell (Democrat, District 30, East Greenwich) and State Senator Joshua Miller (Democrat, District 28, Cranston) who are submitting legislation this session banning weapons that enable mass shootings. Co-sponsoring Miller’s legislation in the Senate is State Senator Gayle Goldin (Democrat, District 3, Providence).

“We introduced these bills early in the session because we believe legislation with the support of a large majority of Rhode Islanders and their senators and representatives should be heard early enough to be brought out of committees and voted on,” said Senator Miller, who is sponsoring the assault rifle ban, as he has for several years. “These are the weapons of choice for mass shooters, not recreational hunters. They have no place in homes, neighborhoods or on the streets. As long as they are legal, our state is inviting people to have their very own weapon of mass murder, putting Rhode Islanders in danger.”