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."
A battle is shaping up in Louisiana that could provide a model for other states to bring public accountability to privatization decisions. On a lopsided 64-27 vote last month, the state House approved a bill that would enable lawmakers to review and veto privatization contracts.
Gov. Bobby Jindal is planning to lay off state workers and hire outside firms to run psychiatric hospitals and other healthcare facilities. Rep. John Bel Edwards said the legislature must be allowed to review long-term contracts to make sure they save money and don't reduce patient care.Read more »