The Graduate Employees and Students Organization’s recent protest against Yale’s alleged holdings in the private prison company Corrections Corporation of America reopened an ongoing discussion of transparency in the University’s investment portfolio. While it is important for watchdog groups to scrutinize Yale’s investments to the degree that they are able, GESO’s conflicts with the University prevent it from being such an independent arbiter.
To be sure, private prisons are a thorny issue, and some of GESO’s stated concerns are legitimate. Groups such as Amnesty International and the ACLU have expressed reservations regarding prison privatization, and the CCA recently lost a $1.65 million lawsuit in which it was charged with mistreating prisoners in an Ohio facility.
On the other hand, increased efficiency within private prisons can save money for other state social programs, and the liability for misconduct among prison companies and their guards may encourage better treatment of prisoners than in state facilities that lack such accountability.
Either way, opening a productive dialogue about the issue is a worthy endeavor. But while the Yale Corporation formally adopted the guidelines outlined by professor John Simon in The Ethical Investor more than 30 years ago, Yale’s Investments Office still lacks a clearly articulated policy regarding the types of ethical concerns that would prevent the office from investing in a particular company.
The problem is compounded by a lack of transparency, but Yale cannot afford to jeopardize the programs facilitated by its high investment returns, and these returns depend on strategic confidentiality. The Yale Corporation should share portfolio information with the Advisory Committee on Investor Responsibility — a group of students, faculty and staff who currently lack such knowledge — but even this would be insufficient given the limitations of ACIR’s ability to investigate ethical issues surrounding individual holdings.
Given these concerns, the role of watchdog groups in monitoring Yale’s portfolio is particularly important. While some complaints may seem petty, such groups have proven their worth by opening dialogues on Yale’s investments in apartheid South Africa and domestic big tobacco, among others. Groups like Unfarallon, a GESO-sponsored national investment watchdog group with a vocal Yale chapter, have made important contributions to such investigations, even if the solutions they suggest are sometimes unreasonable.
But GESO’s own role as such a watchdog group is dubious. While graduate students have a right to question Yale’s investment practices to the extent that endowment funds help support their paychecks, GESO’s protests do not always speak for its full membership. In the case of private prison investments — an especially controversial issue — GESO’s failure to consult its members prevents it from claiming a mandate from the graduate student community.
More importantly, there is no clear link between graduate students’ desires to form a union and their desires for greater portfolio transparency. If GESO organizers truly wish to start a productive dialogue on the valid question of oversight, they should not attempt to do so through an organization explicitly tied to labor concerns.