Weekly privatization report

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1) National: In a powerful article in Current Affairs, David Anderson, who has worked as a volunteer EMT in Connecticut, makes the case against private ambulance services. “American emergency services are steadily on the road to disaster,” he writes. “Nationwide, there is one massive monopoly, American Medical Response, which is kind of like the McDonald’s of EMS, since they have branches all over that are fairly decentralized but still linked to the same capital distribution system. AMR runs a massive share of private EMS services, with over 6,000 ambulances and even 12 fixed-wing aircrafts. The private ownership model for ambulances is fundamentally at odds with its own purpose. In the beginning they were useful insofar as they were an ad-hoc option in a society that gave no thought to whether or not speed was important in treating an illness or injury. However, this jumble of organizations across the nation creates big problems beyond figuring out billing logs.”

The for-profit model is hitting both low-paid EMTs and low income community members hardest. Some comments from Yelp reviews: “Charged us $1,400 to take my wife two blocks to a radiation center. Then charged another $1,400 back to the hospital. Corporate corruption at its finest!” “I received a bill of $1,212.50 for a 5-minute ambulance ride in which no help was given.” “AMR took her about 4 miles to the local hospital and we received a bill for $1,857.00.  We have insurance but AMR is private and not in network for ANY providers! THIS IS ABSURD!”

There’s no getting around it, Anderson says: “Good emergency medical services are going to be expensive and unprofitable. The sheer cost of operating an emergency response service is why firefighting was ultimately turned into a public utility.”

2) National: There are still 565 children who have not been reunified with their families in custody in ICE-contracted for-profit facilities. See the interview on PBS Newshourwith the ACLU’s Lee Gelernt. PBSreports that “among the children who remain in U.S. custody, the largest group is comprised of the 366 whose parents are no longer in the U.S. The government filed its latest plan in court that shows how it expects to reunify these adults with their children. On Friday, Judge Sabraw said the joint plan ‘looks excellent.’”

3) National/Texas: School districts around the country are beginning to weigh up their responsibilities to children in migrant shelters. “When San Benito, Texas, school leaders learned of an influx of children to a migrant shelter in their small town near the U.S.-Mexico border, they felt obliged to help. The superintendent reached out and agreed to send 19 bilingual teachers, mobile classrooms and hundreds of computers to make the learning environment resemble one of his schools. While a government contractor bears responsibility for educating children at the highly guarded center, local officials say they stepped up partly because of a law that calls on school systems to educate any child, anywhere within their district.”

The Associated Press“inquired with public school districts in 61 cities nationwide where shelters are known to exist within their boundaries. Among the 50 that responded, most said they had no contact with the shelter or federal program authorities. Some outside the border states, including Camden, New Jersey, said they only recently discovered the existence of migrant shelters in their community.”

4) National: Writing in Forbes, Peter Greene, who spent 39 years as a high school English teacher, outlines “How To Profit From Your Nonprofit Charter School.” Greene says “running a nonprofit charter school can still be a highly lucrative undertaking—all financed with taxpayer dollars. Here’s how to make a bundle with your nonprofit charter school.” The short answer: real estate and management companies.

5) National/Virginia: Want to see how a well-managed, publically financed, overseen, and owned infrastructure project worked, where public bodies, private companies, and communities collaborated on a design-bid-build project that adopted flexible solutions, responsibly addressed environmental protection regulations at the state and federal level, and produced a high quality road system? The new issue of the American Society of Civil Engineering’s Civil Engineeringmagazine takes us on a deep dive into the unfolding of the Dominion Boulevard project.

“The $400-million Dominion Boulevard Improvement Project, finished in 2016, is the largest locally administered project completed in the Commonwealth of Virginia to date. The project transformed Dominion Boulevard, in Chesapeake, from a two-lane road into a four-lane limited access, divided, toll highway composed of three new grade-separated interchanges and a twinspan bridge, crossing the Atlantic Intracoastal Waterway. Innovative funding solutions, a jack-of-all-trades design team, and public involvement helped bridge the gap between concept and reality.”

6) National: Following a two year in-depth investigation, Reuters reports that the privatization of military housing may have contributed to lead poisoning of children on U.S. army bases. “The two contractors that operate Villages of Benning – Clark Realty Capital and Michaels Management Services—didn’t respond to requests for comment. The military’s lapses in lead safeguards leave legions of kids at risk. Private contractors house some 700,000 Americans at more than 100 military installations nationwide, including an estimated 100,000 children ages 0 through 5.” Jeet Heer reports that “the roots of the problem go back to the privatization of military housing in the 1990s. The military contractors tasked with running housing have been slow to build new residences and the military has provided meagre funding for upkeep and renovation.”

7) National: Infrastructure Investor raises the question of how new legislation just signed by Trump (the Foreign Investment Risk Review Modernization Act) could change the rules governing foreign investment in American infrastructure, and “on which industries and assets should be guarded against overseas investments based on national security interests.” Baker McKenzie lawyer Sylwia Lis says “foreign investors involved in infrastructure projects, when assessing their [Committee on Foreign Investments in the United States (CFIUS)]-related risk profile, need to look at that threshold somewhat differently from the wa­y it is right now.” [Sub required]

8) National: The USDOT Federal Highway Administration has issued an RFP for the Build America Bureau for financial advisory services “in the transportation infrastructure project finance area to support its activities and programs. The Bureau administers the Transportation Infrastructure Finance and Innovation Act (TIFIA) credit program and the Railroad Rehabilitation and Improvement Financing (RRIF) credit program.” There is keen competition for TIFIA and RRIF loans among P3 project sponsors, developers and financiers, and as the saying goes, people are policy.

9) National: In the second quarter, the waste removal and landfill outsourcing company Waste Management, which derives a considerable share of its revenues from taxpayers through local government—and benefitted from the Republican/Trump tax cut—paid out nearly half a billion dollars to its investors in share buybacks and dividends. All this as local governments struggle to make ends meet. Senior VP and CEO Devina Rankin says “we paid $200 million in dividends and bought back $300 million in shares. We’ve allocated over 90% of our 2018 free cash flow to dividends and share buyback in the first half of the year.”

10) National: Adam H. Johnson and journalist Kira Lerner discuss “When Electronic Cages Replace Steel and Cement” on The Appeal Podcast. “As technology improves and as private corporations move more and more towards experimenting with implanting their employees,” Lerner says, “if their employees agree to implementation of a GPS device, I think it really is the next logical step that ‘Well, why don’t we experiment with other methods of tracking these pretrial detainees?’ And I think the privacy implications are even greater when there’s not consent to a device underneath your skin. And I think that we’ve seen the increase in the use of these devices over the last decade and I think there’s a wide recognition among activists that we’re only going to continue using them at this caliber, if not even more intensely, if we don’t raise greater awareness about the problems.” [See also the Challenging E-carceration project at the University of Illinois]

Both the GEO Group and CoreCivic see promoting their electronic monitoring business as a key growth strategy.

11) National: New reports have surfaced suggesting that Trump is considering Erik Prince’s proposal to have contractor mercenaries take over the U.S. effort in Afghanistan. “Prince said he hasn’t spoken directly to Trump about the plan, but told NBC News he plans to launch an aggressive media ‘air campaign’ in coming days to try to get the president to embrace it.” Reports last year said there are about 9,800 US troops stationed in Afghanistan and more than 26,000 contractors. For more see Phillip Carter’s “Outsourcing the War in Afghanistan to Contractors is a Very, Very Bad Idea.”

12) National: The GSA has created a web page that lists Pentagon contractors that have received waivers for new contracts despite having been barred from government work because of fraud-related charges.

13) Arizona: AZCentralcolumnist E.J. Montini says all the exposés of corruption in the charter school world won’t make a difference if politicians don’t act on them. “And it is allowed to go on because Gov. Ducey and the Republicans who control the legislature like it this way. They condemn teachers with the Red for Ed movement who are trying to improve their lives and working conditions and then encourage and actually legislate abuses for charter school owners and administrators. That won’t change unless the people in charge are replaced.”

14) Arizona: A charter school head’s boast that he was engaging in mass expulsions of at-risk students lands him in hot water with the oversight board and public interest groups and charter school advocates. “The charter school board investigated Mohave Accelerated Schools soon after the meeting because of Mulligan’s comments. And in a heated email exchange with the head of the Arizona charter association, the state board president said that Mulligan’s comments described ‘illegal activities.’”

15) California/National: Watch this thread on how allowing for an unlimited number of privately operated charter schools in California is taking funding from students and forcing cuts to staff, classes, and maintenance at traditional, neighborhood schools. Visit howmuchcharterscost.org and read In the Public Interest’s report, Breaking Point: The Cost of Charter Schools for Public School Districts.

16) California: More allegations of embezzlement surface at Oakland’s BayTech Charter School. “OUSD flagged purchases from Netflix, Amazon, and numerous expensive restaurant bills as cause for concern. It’s unclear if the purchases had any legitimate educational purpose. The district also found $6,800 in payments to Commodore Cruises and Events, an Alameda-based cruise ship operator. BayTech’s credit card was also used to purchase $2,919 in Disneyland tickets. The school paid for hotels and plane tickets for staff to travel to Southern California, Arizona, Utah, and Texas.”

17) California/Illinois/National: BloombergBNAreports that California’s two largest public pensions, CalPERS and CalSTRS, “are reviewing their investments in hedge funds and companies that have ties to the Trump administration’s immigration enforcement efforts at the U.S.-Mexico border. Some of those companies include General Dynamics Corp ., GEO Group, and CoreCivic. All three own or provide services to private prisons that have been used to detain immigrants.” But they hasten to add that “CalPERS and CalSTRS aren’t rushing to remove their investment in these three companies. Both pensions are considering their position, but generally favor engagement over divestment.”

And on Thursday, the Chicago Teachers’ Pension Fund added immigration detention centers to its list of prohibited investments. “Companies such as GEO Group Inc., CoreCivic Inc., and General Dynamics Corp. are among those that own or operate the private prisons that have come under fire lately amid allegations of abuse of immigrant detainees. A spokeswoman told Bloomberg Law that pension trustees want investment managers to also “prudently liquidate public market holdings in private prison companies as soon as reasonably practical and in accordance with the managers’ fiduciary duties.””

18) District of Columbia: The DC Office of Public-Private Partnerships will be accepting unsolicited proposals for possible P3 projects from August 31-October 1.

19) District of Columbia: Amid a privatization push, Metro is outsourcing a portion of its bus operations. “Transdev will be responsible for about 5 percent of the bus service that Metro provides (…) Though Metro has moved to privatize some of its more peripheral tasks, such as custodial services at some facilities or shuttle bus operations during temporary subway shutdowns, this would be the biggest-ever contract for privatizing day-to-day operations of the agency’s core services. (…) But officials with Amalgamated Transit Union Local 689, which has been in near-constant conflict with Metro management the last few months, are outraged. They called the decision to contract out operations at the new bus yard a ‘blatant attempt to attack the union members, lower worker morale and drive down the reliability of service.’ Union leaders say they are adding the bus proposal to their list of grievances with Metro filed with an arbitration board, pushing the argument that privatizing the day-to-day operations at the bus yard would violate their collective bargaining agreement.”

20) Florida: A political action committee supporting Republican gubernatorial candidate Ron DeSantis just got $100,000 from the GEO Group, which imprisons and “detains” inmates and undocumented immigrants for profit. “DeSantis isn’t alone,” reports the Orlando Weekly. “The GEO Group has sprinkled cash all over Florida politicians, including Sens. Marco Rubio and Bill Nelson, according to the National Institute on Money in State Politics. In fact, it’s hard to find someone who hasn’t taken money from the group.”

21) Florida: Lawyers for the Florida League of Women Voters asked a judge on Friday to “remove a proposed constitutional amendment that could expand charter schools in Florida from the November ballot, arguing the measure is misleading.” FLWV attorney Ronald Meyer said “It’s not enough that they have legislatively been able to get at the money. Now they (charter schools) want to be stripped of any control by the elected school board that has to tax you and me to pay for them. None of this is disclosed anywhere in this ballot summary and that is what this is about.”

22) Florida: A key school board race is set for Sarasota on August 28. Candidate Nick Guy says “VOTE in the #August28th Sarasota School Board election! Vote to protect our public schools from privatization and profiteering. Vote to keep them among the best in the state. #VoteNickGuy for our kids, for our schools, for our community! What’s your plan?”

23) Florida: The Palm Beach school board is filing a second court appeal to stop two charter schools from opening. They lost the last one. “The schools, to be located west of Delray Beach and west of West Palm Beach, respectively, would each have been operated by Charter Schools USA, a for-profit management company that operates six other county charters under the Renaissance name. The company is a regular target of board members’ criticism.”

24) Kentucky: The state workforce has declined by more than 9,000 over the past 20 years as the number of outside contractors has risen. “John Schaaf with the Legislative Ethics Commission says the money paid out to contractors has doubled. ‘It’s gone from about a billion dollars a year to over two billion a year spent to employ outside contractors to do the work of the state government,’ he says. (…) Some of the biggest beneficiaries include Nashville’s Correct Care Solutions, which is set to receive $110 million to provide medical services at public and private corrections facilities, and Huron Consulting Services out of Chicago, which is in line for $50 million to provide healthcare consulting service for two years at the University of Kentucky.”

25) Maryland: Backed by a coalition of environmental, religious, and labor advocates Baltimore Mayor Catherine Pugh has signed a landmark charter amendment banning the privatization of the city’s public water system, setting the stage for an electoral showdown when the issue is placed before voters in November. The measure is already being attacked by the Maryland Public Policy Institute, which has been funded by the dark money Donors Capital Fund and State Policy Network (on its website Republican governor Larry Hogan is listed as an “emeritus director”). But supporters are confident the measure will pass. In the Public Interest’s Jeremy Mohler writes, “Baltimore’s leaders just showed what many call political will, a rare commodity in the age of endless tax cuts. Pushed by organized residents and groups like Food & Water Watch and Communities United, they’re laying the groundwork to truly fix the city’s crumbling infrastructure rather than use the smoke and mirrors of privatization.”

26) Maryland: Howard County councilors approved a $140 million ‘public private partnership’ to build a new courthouse on a Friday before they rushed off to their summer break, despite objections by Councilman Calvin Ball. “Ball took issue with voting on a project that a new council would inherit. Ball also said he was uncomfortable with the site-selection process and a lack of public awareness of the project’s details. (…) ‘While I definitely agree that 70,000 feet and a 175-year-old courthouse is inadequate, I’m still unsure that when we just finished having an intense budget conversation not long ago about inadequate capital investment in our school buildings and school overcrowding, that almost 240,000 square feet is the right scope for this project,’ Ball said.”

Last month, Council chairwoman Mary Kay Sigaty said she was skeptical of the (DBFOM) deal “because of information that’s missing from the contract, including the amount for the first annual payment from the county to Edgemoor-Star next year, estimated to be $10 million. The amount owed could shift some depending on interest rates and inflation and the numbers likely won’t be final until the close of the deal later this fall, according to county spokesman Paul Milton. There are also blanks in the contract, which needs council review, over when Edgemoor-Star may refinance the deal.”

27) Missouri: With the help of a sunshine law, the St. Louis Post-Dispatchblows the lid off the scandalously high compensation consultants are making to sell off Lambert International Airport to private, for-profit interests. “Grow Missouri is controlled by local billionaire and philanthropist Rex Sinquefield and run by lobbyist Travis Brown. It has agreed to front money to at least 14 separate consultants as the city prepares to issue requests for proposals to companies that want to bid on the airport operations. The monthly cost of those services, are at least $627,776 just in retainers. Expenses could be $270,250 or more. Three different law firms are also being paid between $425 and $575 an hour, with those costs rising as high as $800 an hour if the city closes a privatization deal.” In the Public Interest Executive Director Donald Cohen says this is no way to do business. “I’ve never seen a procurement process that was this loaded up with consultants especially since the process ignores some of the basic standards of good public procurement practice that protects taxpayers and the public,” Cohen said.

28) New Jersey: Gov. Phil Murphy (D) has signed a bill extending New Jersey’s ‘public-private partnerships’ law to cover infrastructure projects. Jack Kocsis of the Associated Construction Contractors of New Jersey and Senate President Steve Sweeney (D) supported the legislation. The legislation provides for financial oversight and approval of the partnership agreements by the State Treasurer. S-865 “requires local public input and finance controls, as well as land use and financial approvals, should a municipality, county, or school district seek to pursue a P3. If the agreement includes the lease of a public building, road, infrastructure, or facility in exchange for up-front or structured financing by the private entity, the term of the lease may not be for a period greater than 30 years.”

29) New Jersey: A state public pension fund, the NJ State Employees’ Deferred Compensation Plan, sinks money into CoreCivic and the GEO Group. “Geo Group runs Delaney Hall Detention Facility in Newark and CoreCivic runs Elizabeth Detention Center, a low slung building in Elizabeth that houses about 300 detainees and an immigration court. A page on the state’s website says Prudential Financial manages the fund.” Last year New York City divested from private prison companies.

30) North Carolina: The contract for the wildly unpopular I-77 toll lanes north of Charlotte will not be bought out by the state so they can be converted to free lanes, says N.C. Secretary of Transportation Jim Trogdon. “The state’s ultimate goal is to take over the toll lane project and turn one of the new lanes on I-77 into a general purpose lane, Trogdon said, but that would take years and require hundreds of millions of dollars.” Instead he will focus on changing the existing agreement, e.g. by capping toll fees.

31) Ohio: The Cleveland Plain Dealer urges voters to finally address the issue of equitable funding of low wealth vs. high wealth school districts two decades after a landmark court ruling.

32) Puerto Rico: Nearly one year after Hurricane Maria devastated communities across the island, protests against disaster capitalism privatization continue. Teachers struck last Wednesday to protest the privatization of the educational system and its accompanying mass school closures. “We are not objects,” said one parent. “We are not furniture that can be moved from place to place. We are not boxes to be consolidated. We are human beings who cannot just be uprooted without consequence. Our children have already been traumatized by the hurricane, and now Secretary Keleher is traumatizing them all over again.”

The privatization of the electrical system has proceeded apace, led by an army of private consultants and lawyers, including from McKinsey, which “coordinates the [Control] Board’s work schedule and advises on proposed cuts to the Department of Correction and the Police Bureau, the consolidation of government agencies and the restructuring of the Puerto Rico Electric Power Authority (PREPA).” McKinsey is currently dealing with a major scandal in South Africa over its practices there, including charges of corruption for its alleged role in a “five year looting spree” of government structures. For details on power restoration see CBScorrespondent David Begnaud’s 45-minute interview with José Ortiz Vázquez, CEO of the Puerto Rico Electric Power Authority.

33) Texas: The Houston Independent School District shuts down a charter school just two weeks before classes start, leaving parents and students scrambling.

34) International: The collapse of a bridge section in Genoa, which resulted in the deaths of at least 43 people, has raised questions about inadequate infrastructure investment in Italy and its deteriorating roads and bridges—and about road privatization, ‘public-private partnerships’ and long-term concessions. Writing in JacobinDavid Broder goes beyond the headlines to expose the long history of corporate and political corruption, austerity mania, and cover-ups that have eroded Italy’s privately-managed public infrastructure. “The bulk of Italy’s road infrastructure dates back to the 1960s and 1970s, including the Ponte Morandi. Since 1999, when it was sold off by Massimo d’Alema’s center-left government, the motorway network has been under the control of private interests. This was an act of asset stripping, as well as a reflection of the cult of ‘public-private partnerships’ so dear to Tony Blair–era European social democracy. As Five Star (M5S) leader Luigi di Maio himself pointed out after Tuesday’s disaster, the deal resulted in Italy having among the highest road tolls in Europe, managed by cost-cutting firms who pay low taxes in Luxembourg.”

The Italian government is moving to strip the private operating company that oversaw bridge maintenance, Autostrade per l’Italia, of its concession. Autostrade is majority controlled by Atalantia, whose biggest shareholder is the wealthy Benetton family. But if the concession was terminated, the company could demand a refund for €3.2bn in bonds guaranteed by Atalantia. Virginia’s Dulles Greenway is also operated by Autostrade International.

35) New Book/International: Wrong Way: How Privatisation & Economic Reform Backfired, edited by Damien Cahill and Phillip Toner, will be released September 21 and is available for pre-order. Contains chapters on electricity reform and productivity by noted privatization critic Prof. John Quiggin. “Privatization, deregulation, marketization and the contracting out of government services: for three decades now, there has been widespread agreement among policymakers on the desirability of these strategies. But the benefits of economic reform are increasingly being questioned. Alongside growing voter disenchantment, new voices of dissent argue that instead of efficiency and improved services, economic reform has led to unaccountable oligopolies, increased prices, reduced productivity and degradation of the public good.”

36) Think Tanks: The Eno Center for Transportation throws cold water on the idea of privatizing U.S. airports, saying “privatization for its own sake is bad public policy. But airports should have it available as a tool and evaluate it along with all other options.” In Eno’s new report, Deal or No Deal: Prospects for Airport Privatization in the United States, authors Robert Puentes and Paul Lewis write “while privatization may be attractive in some circumstances, policymakers first need to clearly understand the problem they are trying to solve, and whether privatization is the best approach. (…) While privatization is still more prevalent abroad, the U.S. context is starkly different because tax-exempt municipal debt can provide a cheaper alternative to private investment. In other words, despite its worldwide attention, calls for airport privatization in the United States and the problems stakeholders are trying to solve are unproductively disconnected. Therefore, it is important to investigate the complexities of U.S. airport governance and lessons learned from past privatization experiences. This discussion is especially timely because of several major policy moves occurring today.”

37) Think Tanks: As part of its wider project on correctional health care in the United States, Pew has issued a report on how states set up and finance off-site care for incarcerated individuals. “The report’s discussion of state approaches to providing care to incarcerated individuals is designed to help the officials involved in setting hospitalization policy—lawmakers, prison and hospital medical staff and administrators, correctional officers, and sometimes private contractors—better manage costs while working toward or maintaining a high-performing prison health care system.”

Legislative Issues

1) National: The issue of federal sentencing reform is coming to a head in the Congress, as administration officials battle right wing lawmakers to produce a workable bill and enough votes to pass it in both chambers. But two powerful Senate Democrats, Cory Booker and Kamala Harris, “are not responding warmly to overtures from the White House and congressional Republicans on a possible criminal justice reform deal.” The two Senators want the bill to go beyond sentencing reform and to embrace measures to reduce recidivism. But Inimai Chettiar, the director of the justice program at New York University’s Brennan Center for Justice, says “we don’t want Congress to clap their hands and say they’ve fixed criminal-justice reform yet not have actually done anything to actually address the problem of mass incarceration.”

2) California: State Superintendent of Public Instruction Tom Torlakson has announced that he has created a panel to review the 1992 law governing California charter schools. “The team will be co-chaired by Carl Cohn, a retired professor at Claremont Graduate University, and Susan Bonilla, a former Assemblywoman from Concord and director of the state office of the Council for a Strong America. Other members, with their affiliations, include Cristina de Jesus, Green Dot Public Schools; Terri Jackson, California Teachers Association; Camille Maben, First 5 California; Charmaine Mercer, Hewlett Foundation; Ana Ponce, Camino Nuevo Charter Academy; David Rattray, Los Angeles Area Chamber of Commerce/UNITE-LA; Jonathan Raymond, Stuart Foundation; John Rogers, UCLA IDEA; Sylvia Rousseau, University of Southern California; Wes Smith, Association of California School Administrators; and Gia Truong, Envision Education.”

3) Iowa/National: Rep. Dave Loebsack (D-IA) spoke about the challenges of providing adequate mental healthcare at the opening of a new facility in Ottumwa. “Of course, he added, there are reasons besides the frustration of mental health stigma. A lack of funding, of course, is part of the problem but the money Iowans do have could be used in a way that is more efficient. He’s hoping cooperation between state and federal officials can resolve at least that administrative obstacle. ‘We have to have a dialogue with whoever Iowa’s next governor is,’ he said. ‘This privatization of Medicaid is not working. I was not in favor of privatization.’”

4) New York: The issue of whether Westchester County Airport should be privatized is now in the hands of county lawmakers. “County Executive George Latimer said Westchester would, among other steps, improve the noise complaint system, but would only say there is [an “informal”] dialogue going on with the Board of Legislators as to whether the county-owned airport would be leased to a private operator long-term. He would not say if the $1.1 billion offer from Macquarie Infrastructure Corp. is still on offer.” Watch a short clip of Latimer’s briefing on the issue.

 

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