‘Decarcerate’ portfolios: Planner exhorts advisors to help defund mass imprisonment

Advisors and their clients who are serious about ending police violence against Black Americans should recognize that investing in for-profit prison companies undermines those values, a financial planner and social justice activist says.

“If your portfolio includes private prisons,” says Rachel Robasciotti, founder and CEO of Robasciotti & Phllipson, “you are part of the problem. You can passively sit there and let that conveyor belt move towards injustice.”

The topic is in sharp relief amid ongoing nationwide protests that follow the death of George Floyd in Minneapolis at the hands of police. The Hennepin County Medical Examiner concluded his death was a homicide. The officer who restrained him until he died has been charged with murder.

In a Twitter thread this week, Robasciotti described her upbringing in the town of Oroville, California, north of Sacramento, where she says the Black population still lives largely segregated from the majority of white residents.

“Deadly police brutality in the black community is the story of my family, the backdrop of my life, and I'm coming out about it now,” Robasciotti wrote in her Twitter thread. Robasciotti, who is Black and lives and works in San Francisco, says her father, who struggled with mental illness, was tazed by the police in 2010 when making a public disturbance. He was subsequently hospitalized and he died in the hospital in Woodland, California. But he wasn’t the only family member whose death she’s remembered this week.

“When I finally watched the video of George Floyd calling out for his mother with a white police officer's knee on his neck, I wondered if my cousin Brady called out for his mother before he died in police custody 20+ years ago,” Robasciotti tweeted about her late cousin Brady Cumbuss’ death in police custody in 1995.

“I know my cousin … did before he was shot and killed by police two years ago,” she tweeted about another cousin 26-year-old Jonathan Erick Alexander who died after being shot by police. According to the Sacramento Bee, which cited the Yuba County Sheriff's office, an autopsy of Alexander found he had died of “multiple gunshot wounds” while in an officer-involved shooting.

“It’s just so sad,” Robasciotti’s sister Jasmined Smith, a property manager in Chandler, Arizona, says through tears. “Jonathan’s son is a year-and-a-half.” Smith says Alexander did call his mother as he was being pulled over to say he believed he was going to die.

Growing up in poverty, Robasciotti resolved as a kid that she would come to understand money. She graduated from high school at 15 and received a specialized degree in the political economy of industrialized countries at The University of California at Berkeley. A friend’s father, who was a black financial advisor, inspired her to become an advisor herself.

Robasciotti’s firm, which she started in 2004 as an RIA-broker-dealer hybrid and converted to an RIA in 2010, is majority-owned and operated by women, people of color and members of the LGBTQ+ community. Its portfolios seek to “build bridges that bring the investment industry into deep alignment with social justice movements,” according to its website. The firm’s platform, RISE, screens investment portfolios for public companies that have made changes in response to input from grassroots activists seeking racial equality, among other goals.

As part of that filtering, it identifies private prisons and other companies that provide services such as paid phone calls to inmates at rates as high as $22.56 for 15 minutes, according to the Prison Policy Initiative, and that electronically monitor and track inmates outside of prisons. The profit models of those companies support mass imprisonment, Robasciotti says, and the filters allow investors to identify them and delete them from their portfolios.

Jasmined Smith

“We have been participants in elevating industry consciousness around decarcerating money,” she says, adding that these companies’ profits rise when more people are incarcerated. One tool that RISE leverages allows an advisor or client to search a fund name or a fund company in a website created by the American Friends Service Committee, a Quaker organization. Those who type “Vanguard” into the search function see that a majority of Vanguard equity funds (it does not track bond funds) hold shares in prison companies. The Quakers have a long history of fighting for social change, including an 18th century campaign mounted in Britain to end the Atlantic Slave Trade.

The past week Robasciotti has felt her own fight give way to exhaustion. Protests that have followed Floyd’s killing left her feeling wiped out and “retraumatized,” she says in an interview. Quarantined and under curfew in her 10th floor condominium in the The Tenderloin district in San Francisco, Robasciotti says she could see flashes and smoke out of her window coming from a jewelry store a block away after it had been looted. She says her firm’s office building on Market Street was being boarded up after looters broke into the Westfield Mall across the street.

Despite the impact on her own life, Robasciotti says she understands the looting.

“I don’t necessarily condone that behavior, nor do I engage in it, but it makes perfect sense to me. That’s the difference between me and other people in financial services,” she says. “It’s only from the standard of a valid social contract that you can condemn someone else’s behavior.”

American society has denied Black Americans access to safe housing, educational and career opportunities, while exposing them to random lethal police violence, she says.

“You can be asleep,” Robasciotti says, alluding to 26-year-old Breonna Taylor, an emergency medical technician who was sleeping in her Louisville, Kentucky, home, in March when police burst into her home and shot her eight times. “If just being alive puts you under threat, what do you have left to lose?” she asks.

Since 1970, the number of Americans behind bars has increased by 700%, growing far faster than either the U.S. population or crime, according to the ACLU. While the U.S. accounts for 5% of the world’s population, it has nearly 25% of the globe’s prison population, the nonprofit says; and one out of every three Black boys — versus one out of every 17 white boys — will go to prison in their lifetime.

“What happens to us now is the same thing that happened to us 400 years ago,” Robasciotti says. “We get killed or enslaved.”

Jasmined Smith

The case of her cousin Brady Cumbuss puts a face on the peril she says the nearly half a million black men in prison today can encounter. Sheriff’s officials said a preliminary autopsy showed Brady “died of natural causes related to swelling of the brain,” according to an October 12, 1995, story in the Elko Daily Free Press. Robasciotti and Smith say his body, which they viewed, showed signs of violence. The autopsy said there were no signs Cumbass had been beaten, according to the Free Press story. His death was the second of a Black person at the same jail in a matter of weeks, according to the article. A 300-person march in Oroville followed to protest his death.

Robasciotti seeks to help change the conditions that precipitated his death. To that end, she urges advisors to understand that the very idea of “passive” investing is flawed.

“Don’t think you’re doing nothing,” Robasciotti says, pointing to more than $100 billion generated annually by a dozen industries that support prisons. “The funding of private prisons and the institutions that allow them to function is overwhelmingly happening.”

Advisors are in a position to promote change, she says, by teaching others that “We should not be making money by incarcerating people.”