NJ’s Slimy Investment Portfolio

Yesterday there were three news stories on New Jersey slimy fund investments. Capital & Main reported that taxpayers in New Jersey have a large financial stake in the owner of the media company that allegedly helped the Trump campaign bury negative stories. Documentednj reported on an investment in the owner of the infamous immigration Elizabeth Detention Center. On a happier note NJ Advance Media reported that our Division of Investments has dumped its small holding in a private prison contractor that runs family detention centers.  

NATIONAL ENQUIRER

Capital & Main explains that Chatham Asset Management, a high-risk hedge fund has control of the National Enquirer’s parent company, American Media Inc., which is at the center of the federal investigation into President Donald Trump’s 2016 campaign. In 2013, former Governor Chris Christie’s administration moved $300 million of pension cash into the Chatham Fund, LP according to SEC records. Last year, barely three months before Christie left office, his administration steered another $200 million to another Chatham vehicle. 

Capital & Main points out the Christie administration’s shift of $500 million into Chatham makes New Jersey retirees a substantial investor in the hedge fund. National Enquirer’s legal troubles could end up depressing the market value of AMI. Teachers, firefighters, cops and other public employees could potentially suffer losses at a time when their pension funds are already facing shortfalls.

“I am personally appalled by the Enquirer being an accessory to Cohen’s criminal behavior on behalf of the candidate,” said Tom Bruno, a state union representative who is the chairman of the pension’s board of trustees and serves on New Jersey’s State Investment Council, which oversees the pension system’s investments. “If asked to vote, I can assure you I will be voting for us to divest.”

Records show the original $500 million investments are now worth as much as $692 million – a fInancially successful investment so far, but morally reprehensible and subject to a potential decline in value. 

NJ’S ELIZABETH DETENTION CENTER

It was reported by Documentedny that New Jersey’s much smaller employee deferred compensation plan purchased nearly $1 billion in stock in Geo Group and CoreCivic, another ICE contractor. Tennessee-based CoreCivic runs the Elizabeth Detention Center, an ICE facility where there have been numerous complaints of inmate mistreatment including parents separated from their children. The purchase was in July around the height of the now defunct “zero tolerance” policy that led to the separation of families.

PRIVATE PRISONER CONTRACTOR 

In happier news NJ Advance Media reported, the $78.6 billion public worker pension fund last week sold its $1.3 million investment in Florida-based Geo Group, one of the U.S.’s largest private prison contractors. The Division of Investments “reviewed the investment merits, including consideration of environmental, social and governance issues, and … elected to sell the security.” The transaction was completed last Thursday.  

Governor  Murphy’s administration would do well to perform a sweeping review of NJ invesments and weed out those that are ethically tainted. 

Comment (1)

  1. Bertin Lefkovic

    The SIC should get the state pension fund out of the stock market entirely and invest in the state. Instead of borrowing money from banks and paying exorbitant interest rates, the state should borrow from the pension fund, pay far more reasonable interest rates, while still providing the fund with a quality return on investment.

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