The San Francisco Employees' Retirement System (SFERS), the city's $21 billion pension fund, is no stranger to demands that it invest “responsibly.” City officials have demanded that the city divest its holdings in gun manufacturers and fossil fuels; in 2013, housing activists demanded that the city sell off its shares in Wells Fargo because of alleged predatory lending practices that fueled the foreclosure crisis.
That divestment campaign ultimately failed. But now, some activists are alleging that San Francisco's investment in Wells Fargo also funds private prisons.
Earlier this year, the Afrikan Black Coalition — an alliance of the black student unions across the nine University of California campuses — demanded that UC sell $425 million in shares of the bank, which is one of the largest financiers of the for-profit prison companies Corrections Corporation of America (CCA) and the Geo Group (GEO).
As of September, the bank held shares worth $33.8 million in Corrections Corp of America — a 25 percent increase from the previous quarter — and $12.5 million in shares in GEO Group, according to its own financial statements.
For its part, Wells Fargo denies any connection to private prisons.
“Wells Fargo Funds — which are owned by the Funds' investors, not Wells Fargo — currently holds a very small position in GEO and CCA as part of a passive index fund,” bank spokesman Ruben Pulido wrote in an email. “SEC filings can make it appear that Wells Fargo is the owner, but we are not. In fact, the holdings of the mutual funds must be segregated from Wells Fargo's own assets in accordance with applicable laws.”
Still, San Francisco's ties to Wells Fargo are undeniable. According to Jay Huish, SFERS's executive director, the city's pension fund invests approximately $75 million in the bank. Whether that includes investments in Corrections Corp or GEO, Huish could not say. But according to activists with Enlace, which launched a national private prison divestment campaign, Wells Fargo has no “portfolio screens” that prevent investments like San Francisco's from being used to invest in incarceration for profit.
“We believe that city, pension, and university investments in major prison investors like Wells Fargo and other companies who own over one million shares of CCA and GEO stock combined, are investments in mass incarceration and immigrant detention,” said Jamie Trinkle, the campaign and development coordinator of Enlace's private prison divestment campaign.
Wells Fargo has repeatedly refuted its connection to private prison shares, noted Trinkle, who nonetheless believes that the bank has the ability to completely divest from CCA and GEO, just as the University of California did.
As for SFERS, its board members have been on notice for three years to divest from fossil fuels companies, yet still hold hundreds of millions of dollars in the likes of Chevron. If the wait to divest from fossil fuel companies is any indication of the Board of Supervisors' reluctance to withdraw funds, then the chances of SFERS selling its shares in Wells Fargo any time soon are slim.