California Pensions Invest Billions in ICE Contractor Companies

Two of the state's largest public pension funds have invested over $2.7 billion in firms that work with federal immigration enforcement agencies.

Apr. 2, 2026 at 9:20pm

Got story updates? Submit your updates here. ›

A dynamic, abstract painting with overlapping, fractured shapes and lines in shades of grey, blue, and red, representing the tension and fragmentation surrounding California's public pension fund investments in companies that work with federal immigration enforcement agencies.California's public pension funds face scrutiny over investments that appear to conflict with the state's sanctuary policies.Los Angeles Today

A new analysis has found that CalPERS and CalSTRS, California's two biggest public pension funds, have invested over $2.7 billion in companies that contract with Immigration and Customs Enforcement (ICE) and the Department of Homeland Security. The largest investments were in tech firm Palantir, which has provided AI-powered systems to help track individuals for deportation, as well as defense contractors like General Dynamics and L3Harris. This has raised concerns from teachers and activists about the apparent contradiction between California's sanctuary state status and the pension funds' financial ties to ICE contractors.

Why it matters

California has positioned itself as a sanctuary state, limiting cooperation with federal immigration enforcement. However, the state's two largest public pension funds are investing billions in companies that work directly with ICE and DHS, raising questions about the alignment between the state's values and the investment decisions of these influential funds.

The details

The analysis by the nonprofit group Stand.earth found that CalPERS has invested $1.6 billion and CalSTRS has invested $1.1 billion in companies that contract with ICE and DHS, including tech firm Palantir, defense contractors General Dynamics and L3Harris, and telecom companies AT&T and CACI. Palantir was the largest recipient, with CalPERS investing $734 million and CalSTRS investing $625 million. The pension funds have faced calls from teachers and activists to divest from Palantir and other companies involved in immigration enforcement and the Israeli-Palestinian conflict, but the funds have cited their fiduciary duty to maximize returns.

  • The analysis was based on quarterly SEC filings as of December 2025.
  • Last year, the Department of Homeland Security awarded Palantir a nearly $30-million contract to build an AI-powered system to help find and track individuals for deportation.
  • In 2024, California's Legislature considered a bill to force CalPERS and CalSTRS to divest from fossil fuel companies by 2031, but the bill's author ended up pulling the proposal.

The players

CalPERS

The California Public Employees' Retirement System, the largest public pension fund in the United States with over $550 billion in assets.

CalSTRS

The California State Teachers' Retirement System, which funds public school teacher pensions in the state.

Stand.earth

A nonprofit advocacy and research group that conducted the analysis on the pension funds' investments in ICE contractor companies.

Lena Gonzalez

A California state legislator who introduced a bill in 2024 to force CalPERS and CalSTRS to divest from fossil fuel companies.

Andrea Pritchett

A middle school teacher in Berkeley who is part of a group called CalSTRS Divest that has been pushing the pension fund to divest from Palantir and other companies involved in the Israeli-Palestinian conflict.

Got photos? Submit your photos here. ›

What they’re saying

“There should be an alignment between where money is being invested and the types of values that people of the state embrace. People's hard-earned savings are going to enable ICE to rip families apart. It's very egregious to me that California's biggest two pensions have chosen to turn a blind eye to this.”

— Richard Brooks, Researcher at Stand.earth

“Their response has been that their fiduciary responsibility outweighs any other consideration.”

— Andrea Pritchett, Middle school teacher in Berkeley

“We must demand transparency and accountability, especially when billions are being funneled into contracts that threaten the safety and dignity of Californians.”

— Lena Gonzalez, California state legislator

What’s next

The California Legislature is expected to consider new legislation in the coming year that would require greater transparency and oversight of the pension funds' investment decisions, particularly those related to companies involved in immigration enforcement and human rights abuses.

The takeaway

This investigation highlights the complex tensions between California's progressive policies and the investment decisions of its powerful public pension funds. As the state grapples with its role as a sanctuary for immigrants, the revelation that these funds are profiting from companies that work with ICE has sparked outrage and calls for reform to better align the pensions' portfolios with the state's values.