Accountability and Transparency
• Lack of public information and open records
• Lack of public input on decisions affecting the public interest
• Loss of recourse if the public is harmed
Democratically elected governments are accountable to voters and their processes are open to public scrutiny. Privatization shuts the public out of decision-making that deeply affects the public interest.
Terms of privatization contracts often are decided behind closed doors, without any public input. In some cases, the public is unaware of the possibility of a privatization deal until the contract is almost finalized. A prime example is the privatization of Chicago’s parking meters, which was planned and negotiated without public knowledge, and left the public extremely unhappy with the outcomes.
Transparency also refers to the public’s ability to obtain information regarding government contracts. While government documents generally are available through open records requests, private companies can shield information from public view by claiming it has a proprietary status.
Another important aspect of accountability and transparency relates to the government’s ability to properly manage contracts. Contracts and governmental policy must contain adequate mechanisms for monitoring and oversight to ensure contract compliance and hold contractors accountable for contractual abuses and the failure to deliver on promised deliverables.
In many large complicated contracts, it is difficult to hold companies accountable partly because no one can anticipate all possible contingencies and set consequences, and partly because companies may be able to shield important information from the government. Furthermore, governments that have sunk a lot of time and money into a contractual relationship may choose not to hold the contractor accountable for fear of losing that initial investment or the transaction costs associated with contract cancellation.
As the Blackwater Nisoor Square case shows, it can be difficult for the government to hold a private company accountable for even the most heinous actions. A New York Times editorial titled "Privatized War and Its Price" (January 2010) noted that in dismissing charges against Blackwater agents for killing civilians in Iraq, a federal judge "highlighted the government’s inability to hold mercenaries accountable for crimes they commit."
The State of Georgia is considering outsourcing "some or all of the state's foster-care system," according to the Atlanta Journal-Constitution. AJC opinion columnist Jay Bookman rightfully points out Georgia's previous failure in privatizing probation services and the problems with accountability associated with privatization. Georgia's taxpayers should also look to examples in Los Angeles and Nebraska.Read more »
In July of 2010, three inmates from the privately owned, for-profit Kingman Arizona State Prison received bolt cutters and lineman's pliers over a fence from an outside accomplice. The three prisoners, with four murders or attempted murders between them, cut the chain-link fence and made their getaway leading to a nationwide manhunt that lasted for weeks.Read more »
Out of Control: The Coast-to-Coast Failures of Outsourcing Public Services to For-Profit Corporations
The corporation contracted to operate the State of Tennessee’s real estate management has an “organizational conflict of interest” according to an audit from the state Comptroller. Jones Lang Lasalle receives up to four percent commission on real estate deals. This clause in the contract gives the firm an incentive to recommend the shuttering of state-owned buildings and leasing of private space.
Outsourcing public services is not a new concept for the U.S. and state government, but the recent trend towards the privatization of prison services, and the contracts that this entails has caused great concern among some commentators. Shar Habibi looks at the rise of “lockup quotas” in private prisons; quotas where states guarantee that prisons will be filled at rates of 90 percent or even higher.Read more »
Last week, Good Jobs First released a new report detailing the litany of scandals created by the advent of privatized state economic development agencies. Profiling privatization efforts in eight states, Good Jobs First discovered a laundry list of apparent pay-to-play, misspent tax dollars, cronyism, and other scandals.Read more »