Pensions fund US firms

Scots pension funds put £90m in firms linked with US rights abuses

Scotland’s largest council pension funds have investments worth £90 million in companies profiting directly from President Donald Trump’s immigration enforcement agency. 

Analysis by The Ferret found that Strathclyde Pension Fund (SPF) and Lothian Pension Fund (LPF) hold more than £70m and £19m respectively, in companies which have contracts with Immigration and Customs Enforcement (ICE). The firms are Dell, Microsoft, US Bancorp and General Dynamics.

Critics concerned over human rights violations by ICE have branded the investments as “unethical” and called for disinvestment. But both SPF and LPF insist that they invest responsibly.

US firms have benefited from a boom in ICE contracts since Trump came to power in January 2017 and introduced an immigration regime which has been widely condemned as harsh.

Scottish pension funds linked to Donald Trump’s border jails

A crackdown on migrants and asylum seekers in the US has included ICE separating migrant children from their parents and detaining them in camps on the border with Mexico.

Footage and audio tapes of distressed children caged in large warehouses attracted global condemnation in 2018.

The Ferret reported then that Scots pension funds held at least £138 million in investment firms which were funding private companies operating the immigration detention centres.

Now the new analysis shows Strathclyde Pension Fund (SPF) and Lothian Pension Fund (LPF) hold tens of millions in ICE contract holding firms including Dell, Microsoft, US Bancorp and General Dynamics Corporation.

SPF has £70,170,536 invested with firms involved in ICE while  LPF has £19,280,014 in total.

Data on ICE contractors was published by US investigations website Sludge last week and revealed that 3,231 contractors have sold over £10.1 billion ($12.7b) worth of goods and services to ICE since 2010.

According to Sludge, Dell’s contracts were worth £47.8m ($52.9m), Microsoft’s amounted to £11.7m ($14.6m), while US Bancorp’s were worth £29.9m ($37.5m) . General Dynamics Corporation has made £220.2m ($275.9m).

Rapid expansion

The private detention sector in the US has expanded rapidly since Trump came to power. Following a crackdown on undocumented migrants there has been an increase in detainees to about 40,000.

Some ICE contracts involve firms helping transport and jail undocumented immigrants, while others provide products, technical assistance, consulting, cleaning, utilities, and other services such as information technology.

US immigration authorities have been accused of human rights abuses, however, including the rampant use of solitary confinement and the detention of hundreds of pregnant women in allegedly dire conditions.

Last year it emerged that ICE had been force feeding nine asylum seekers who were on hunger strike in El Paso, after obtaining secretive judicial orders. The men, some of whom had been in ICE custody for more than a year, were protesting at the length of their detention and the conditions.

It was reported that if a hunger striker is uncooperative for when refusing food they are placed in a hospital bed in a seated position with their arms and legs placed in soft restraints.

Human Rights Watch has expressed concern over ICE raids in 10 US cities, arguing the effect of these is to “foster cruelty and terror with the apparent aim to deter others from seeking refuge or a better life in the US”.

In April Amnesty International published a report saying that the mass detention of migrants in the US during the coronavirus pandemic was endangering lives.

The report said detainees at several ICE detention facilities had launched hunger strikes to demand their freedom, and to protest against dangerous and inadequate hygiene and sanitation conditions.

Looming disaster

Amnesty’s 34-page report – “We are adrift, about to sink’: the looming COVID-19 disaster in US immigration detention facilities” – said these facilities have failed to provide soap and sanitiser, or introduce social distancing.

The authorities have also continued with unnecessary transfers of people between facilities despite the risks to health, the report added, regularly transporting thousands of people in and out of facilities.

There is no suggestion that Dell, Microsoft, US Bancorp and General Dynamics are responsible for any of the above alleged human rights abuses.

But critics of Trump’s immigration regime are concerned about the link between Scots pension funds and firms profiting from ICE.

They include Scottish Green external affairs spokesperson Ross Greer who said Trump has created a “sprawling for-profit detention industry where refugee families are ripped apart and children are literally held in cages”.”

He added: “It was bad enough that Scottish pension funds were invested in these companies two years ago, but with what the world has witnessed since there is absolutely no defence for avoiding divestment.

Greer claimed that Scottish workers “do not want their pensions invested in this continuing atrocity” and said council pension funds should “follow the global trend to move away from unethical investments and started playing their part in making the world better”.

“Lothian Pension Fund’s investments in renewable energy have been critical to new wind farms being brought online here at home,” Greer added. “That’s what we need to see more of, investment which provides a reliable return and which contributes something positive to the world, rather than bankroll more misery for the most vulnerable.”

Simon Watson, of Unison Scotland, said Scottish local government pension funds “wield major financial power” and that workers who contribute to the funds “expect their pensions to be financed in line with their values”.

“Ethical investment should be part and parcel of how public sector pension funds operate, and funds have a lot more to do to give confidence to workers that their contributions are being properly invested,” Watson continued.

Scottish Liberal Democrat leader Willie Rennie said that local authority pension managers “need to be careful about who they hand their money to” and that pension provision “should not come at the expense of a system of abuse.”

A spokesman for Dell Technologies said: “Dell Technologies does business with the US government, across its agencies, and with governments around the world where legally authorised.

“Since 2003, we’ve provided infrastructure technology to ICE’s Homeland Security Investigation and their Cyber Crimes Centre to investigate crimes including art and drug smuggling, human trafficking, child pornography and other criminal activity conducted online. We have never knowingly participated in any activities related to the humanitarian crisis on the border.”

A spokesman for SPF said the fund is a signatory to, and active participant, in the United Nations Principles for Responsible Investment. SPF has also appointed independent monitors to ensure these principles are adhered to by its investment managers.

“It takes its social responsibilities seriously and is recognised as a fund that is showing leadership both nationally and internationally in actively engaging with the companies in which it invests; to challenge them to address risks and improve performance,” said a spokesman for SPF.

“We note that, although several of these firms have worked with ICE since it was established in 2003, they are on the record as not holding contracts relating to the building or operation of detention facilities.”

LPF said: “Lothian Pension Fund appreciates the investigative work that various individuals and groups do to identify controversial activities. We spend considerable time engaging with companies on such topics, but it would be unrealistic for pension funds with a diverse portfolio of investments to avoid contentious issues, which might affect a small part of a company’s business. We do not seek to support unethical practices.”

General Dynamics, which has provided support to unaccompanied minors through its work with the Office of Refugee Resettlement in the US, said: “We are an aerospace and defense contractor, and the US government is our primary customer.

‘Upholding human rights’

“Our five lines of business are: business aviation; combat vehicles, weapons systems and munitions; IT services; C4ISR solutions; and shipbuilding and ship repair. The construction and operation of detention centers is not among our lines of business. We would refer you to the US government for any questions you might have about its policies.”

Microsoft declined to comment but a statement on its website says it is committed to upholding human rights. It says: “At Microsoft, respecting human rights is a critical component of our mission to empower every person and every organisation on the planet to achieve more. Focus on human rights helps our employees to make good decisions and ethical choices, and builds trust with our customers and partners.”

US Bank Corp did not reply to our requests for a statement. A statement on its website says: ““We are committed to investing in the future of our communities and being a socially responsible corporate citizen. It is at the heart of everything we do.

“When we combine our philanthropic giving with our products, services and experiences, we can make a significant impact in our communities. We do this by making ethically and environmentally sustainable business decisions, engaging our employees, volunteering and embracing diversity, equity and inclusion.”

ICE has been contacted for a comment.

In 2018 The Ferret reported that the pension funds of Scotland’s public service workers held at least £138 million in investment firms backing the president’s immigration detention centres. The funds were managed by international finance firms with huge investments in America’s largest private prison operators.

LPF was criticised recently after The Ferret revealed it had shares worth nearly £7 million in an Israeli bank fined for tax evasion and conspiring to launder kickbacks to football officials in a Fifa corruption scandal.

LPF invests in Bank Hapoalim BM, which was fined in the US for “criminal conduct” relating to a major corruption case. The scandal involved marketing rights for the Copa America – the South American football championship.

Pension fund investments

CompanyStrathclyde Pension fund shareholdingLothian Pension Fund shareholding
US Bancorp£10,232,341£5,229,160
General Dynamics£956,729£2,672,970
Total value£70,170,536£19,280,014

Photo thanks to iStock.

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