Privatization Report: Ed tech and school “reform” | Private investors see gold in calls for public broadband | and more

Here’s our weekly analysis of privatization in the news and in communities nationwide. Not a subscriber? Sign up.

This week’s highlights

Education

1) National: Audrey Watters takes an informative deep dive into the connection between ed tech and school “reform.” Writing in The Baffler, she says “over the past five years, more than $13 billion in venture capital has been sunk into education technology startups. But in spite of all the money and political capital pouring into the sprawling ed-tech sector, there’s precious little evidence suggesting that its trademark innovations have done anything to improve teaching and learning. Perhaps, though, that’s never really been the point. Rather, it may be that all the interest in education technology has been an extension of a long-running campaign to make over American schools into the image of corporate endeavor—to transform education into a marketplace for buzzword-friendly apps and instruction plans, while steadily privatizing public institutions of learning for the sake of enhancing the bottom lines of the business interests promoting investment-friendly school ‘reforms.’”

2) National: Author and Cornell University interdisciplinary scholar Noliwe Rooks will be one of the keynote speakers at the 6th national conference of the Network for Public Education (NPE) in Philadelphia on March 28-29. Watch her video and register for the NPE event

3) NationalDiane Ravitch and Robert Kuttner have struck back at a New York Times article that claimed “that black and brown parents are offended that the Democratic candidates (with the exception of Cory Booker, now polling at 1%) have turned their backs on charter schools.” Ravitch writez, “perhaps the Times will now interview Dr./Rev. Anika Whitfield in Little Rock to learn about the struggles of Grassroots Arkansas to block the Walton campaign to destroy their public schools. Perhaps its reporters will interview Jitu Brown to hear from a genuine civil rights leader who is not funded by the Waltons or the Bradley Foundation or Betsy DeVos. Perhaps they will dig into the data in Ohio, where 2/3 of the state’s charter schools were rated either D or F by the state in 2018, and where the state’s biggest cyber charter went into bankruptcy earlier this year after draining away over $1 billion from public schools’ coffers. Perhaps they will cover the news from New Orleans, the only all-charter district in the nation, where the state just posted its school scores and reported that 49% of the charters in New Orleans are rated either D or F. Perhaps they will cover the numerous real estate scandals that have enabled unscrupulous charter operators to fleece taxpayers.”

4) NationalProf. Will Hanley of Florida State, reacting to a Great Schools report, says “here’s @GreatSchools’ ‘review’ of the school where my kids have spent the last decade. Its algorithms know NOTHING about the work the school does. But they serve up prejudice in the guise of data, doing tremendous harm to precious children and to anxious parents who run away.”

5) Arizona: State lawmakers are trying to move legislation to establish more effective oversight of “non-certified educators” in charter and traditional public schools

6) MassachusettsParents at City on a Hill charter school in Roxbury have called for the school’s CEO to resign in the wake of layoffs and disruption. “‘I was angry, frustrated, sad. It’s hurtful,’ said Cathy Garcia, whose daughter is a senior at City on a Hill Circuit Street. ‘Now you’re taking something from my daughter, you’re taking this from our kids. They have my child for 8 hours a day. That’s home.’ After getting a robocall and email notice on Monday that City on a Hill’s New Bedford campus would close and staff would be laid off at City on a Hill Circuit Street and Dudley Square, Garcia found out her daughter, along with other Circuit Street juniors and seniors, would be moved to Dudley Square effective Jan. 1, 2020.”

7) New York: Shawgi Tell says that a landmark October court decision enforcing equal standards for charter and public school teachers “shows that when the weight of the public is put behind a pro-social agenda, the public can prevail and the rich can be defeated—often quite easily. Power has always rested with the public. It just has to be harnessed effectively in the complicated present to bring about major changes favoring society, including an economy that has as its aim ensuring the well-being of all.”

8) Oklahoma: The Enid New & Eagle reports that most virtual charter schools’ students don’t graduate. “In a state where the average graduation rate is 83%, just 40.2% of Epic’s students graduated on time last year, according to recently released school assessment data from the state Department of Education. Accounting for fifth- and sixth-year graduates, Epic’s rate remains near 40%. In fact, fewer than half of all students at three of the four virtual charter schools in Oklahoma graduated within six years, according to the same state data. Leaders of Oklahoma’s growing virtual charter school system promote it as an option of last resort for thousands of students not adequately served in traditional school environments, and despite low overall academic performance, they claim students demonstrate significant growth and eventually will be prepared to graduate. But low graduation rates bring into question the effectiveness of these computer-based public schools that now educate more than 25,000 students in nearly every community across the state.”

9) Pennsylvania: Chester Community Charter School’s bid is due in court on Wednesday, and if successful will “put the Chester Upland School District’s schools out of the business of educating elementary school children,” says Chester’s Will Richan in a letter to the editor. “That school doesn’t propose to do all the educating, but does plan to expand if the petition is granted. Charter schools are allowed to hire private, for-profit companies to manage their affairs. So it is that Chester Community Charter is managed by CSMI. Who created Chester Community Charter in the first place? A gentleman named Vahan Gureghian. And who founded CSMI? You guessed it, the same Mr. Gureghian.”

10) Texas: A must read New York Times article by Manny Fernandez on how the state’s right wing government is taking over Houston’s schools, prompting charges of racism. “Many black parents and students are opposed to a state takeover and fear that state officials will appoint a board that will seek to close Wheatley or turn it into a charter school. (…) Teachers’ union leaders and other takeover critics said the dynamics at play in Houston were about far more than fixing Wheatley. They dispute the state’s depiction of the district as dysfunctional, when it earned an overall grade of B for the last school year under the state’s rating system. They point to problems with past state interventions, and they believe the takeover in Houston was prompted by racism and a conservative agenda to turn public schools into charter schools. Across the district, 62 percent of the students are Hispanic and 24 percent are black. The nine-member school board is made up of four Hispanics, three African-Americans, one white and one Asian.”

Infrastructure

11) National: Writing in Infrastructure Investor, three analysts say schools might be the next big infrastructure sector. “There is no real alternative or the option to reduce consumption. The underperformance of certain high-profile infrastructure investments in GDP-linked businesses during the 2008-09 downturn, such as some car parks, toll roads or ports, demonstrates how important an upside this factor is to education as an infrastructure investment. (…) Education businesses have traditionally favored leasing rather than owning school properties for the obvious reason that rates of return on capital employed on property acquisitions can be better deployed on expansion capex or further acquisition of school businesses. This is true even when balanced off against the impact that lease payments have on EBITDA, i.e., reducing this key measure of an education business’s value. Similarly, since school businesses are often acquired with properties already owned, cash has been raised by selling properties to deploy on expansion capex or further acquisition of school businesses. ‘The need for education is generally unaffected by political and cultural changes and upheavals’” [Sub required]

12) National: As proposals for a national broadband program gain popularity, private capital is trying to get there first and cream off the subsidies. “Members of Congress continue to propose bipartisan bills for expanding the use of tax-exempt private activity bonds in rural America with the latest legislation involving broadband and aggie bonds. These bills provide evidence of bipartisan support for PABs expansion among rural lawmakers and not just their colleagues who represent big cities where public-private partnerships are most common. It’s a positive signal two years after the House Republican leadership initially proposed the termination of the tax exemption for PABs as part of the Tax Cuts and Jobs Act. A bipartisan Senate bill to expand the use of PABs for rural broadband would also allow state and local governments the option of issuing direct-pay bonds which would provide a 35% federal subsidy to the issuers to help offset their interest costs.” [Sub required]

13) California: As some investors bet that PG&E may be circling the drain, a bankruptcy judge has ruled that the private company is subject to a doctrine that holds utilities liable for covering the costs of wildfires. Gov. Gavin Newsom (D) has reiterated that “we will do everything in our power to restructure PG&E, so it is a completely different entity when they get out of bankruptcy by June 30 of next year.”

14) Florida: On Friday, council member Matt Carlucci sent out a lengthy email calling for the resignation of JEA CEO Aaron Zahn, who is leading efforts by JEA’s board to privatize the public utility. “This entire ‘conversation’ of selling the JEA has lost credibility, fatigued our citizens and stalled our city’s progress on many other important issues. At a time when the trend countrywide is to keep or acquire municipal utilities. Aaron Zahn’s advice is wrong and his leadership misguided. This drama needs to come to an end. The JEA board must hire a can-do CEO, not a give up and sell it off CEO.” 

Today is the deadline for attorneys seeking to represent the Jacksonville city council in the JEA matter to apply for the position. “According to the published scope of services, the council is looking for a firm with expertise in general corporate law; transactions, mergers and acquisitions; environmental matters; regulatory matters; labor and employment matters; procurement; and local government and legislative options.” [Sub required]

15) Massachusetts: The “public-private partnerships” lobby is licking its lips over Gov. Baker’s new $18 billion transportation bond bill. “Baker’s bill underscores rebuilding and modernizing assets; enhanced mobility options; support for municipalities; and accelerating capital delivery through public private partnerships and alternative project delivery methods, such as design-build-finance-operate-maintain. It also calls for design-build authority for small projects. Accelerating capital spending is paramount for the T, which left an estimated $1 billion on the table from 2016 to 2018.” [Sub required]

16) InternationalWhat could be the last of the U.K.’s “public-private partnership” deals has reached financial closure. PPPs were once touted as the future of infrastructure and services financing, but ran into a series of disastrous results in the water, transport and services sectors and were abolished by the central government last year. A consortium comprising Macquarie Capital, Aberdeen Standard Investments, Cintra, BAM PPP PGGM and SK Group has closed on the Silvertown Tunnel PPP.

Criminal Justice and Immigration

17) National: The McAllen Monitor’s Dina Arévalo reports that five men and women facing federal charges of bribery, and in one instance, sexual abuse of an inmate—have pleaded not guilty and will soon be released on bond. They worked at the East Hidalgo detention center, operated by GEO Group. “Hernandez, along with Jayson Catalan, 37; Erasmo Loya, 54; Veronica Ortega, 43; and Jhaziel Loredo, 32 are all accused of accepting bribes in exchange for smuggling contraband into the La Villa detention facility, which houses federal inmates under a contract from the U.S. Marshals Office. Brenda Alicia Fuentes, 47, stands accused of sexually abusing an inmate in federal custody.”

18) NationalSell-side analysts “have stopped covering U.S. private prison operators as Wall Street has distanced itself from publicly traded GEO Group Inc. and CoreCivic Inc. (…) Sell-side analysts typically issue reports setting stock-price targets and recommending whether investors should buy, sell or hold the stocks based on business analysis. The lack of reports and recommendations is a negative for both investors and corporations, according to Haran Segram, a clinical professor of finance who teaches classes on valuing companies at NYU Stern Business School. ‘It‘s bad news from the investor‘s perspective because no price discovery is happening. Its bad news from the company‘s perspective because if they‘re trying to do funding investors will be looking for independent research. If they don‘t find it they‘d be reluctant to fund the company,’ said Segram.”

19) National: One analyst says that if Trump wins, “expect shares to bounce back just as they did in October 2016—GEO jumped by 40 percent and CXW rallied by 61 percent.”

20) Alabama: The state’s prison construction program is about to get under way. Gov. Kay Ivey (R) “announced that four developer teams have qualified for the next stage of the bid process: The GEO Group, Corvias, CoreCivic and Alabama Prison Transformation Partners. The firms were selected after submitting qualifications for the project. (…) Ivey’s office said the request for proposals will go out to the companies next month. The proposals are expected to be received in spring 2020. The process has at times faced criticism that it is too secretive.”

21) AlaskaIs Donna Arduin at it again? asks Kevin McGee, president of the NAACP Anchorage Chapter, and Veri di Suvero, executive director of the Alaska Public Interest Research Group (AKPIRG). “[Gov.] Dunleavy and [Budget Director] Arduin propose cutting or maintaining every line item for the Department of Corrections, except for the ‘Out of State Contractual’ budget line, which they increased… Claiming lower costs, they propose moving a minimum of 500 incarcerated people out of Alaska to a facility that is, as of writing, unknown and far from those people’s communities. When asked where, at a legislative budget hearing on Feb. 13, Arduin would not state to which facility they would be moved. Arduin sat on the board of trustees for a GEO Group corrections spinoff—a for-profit landholding firm working in tandem with a correctional company. Will they get a windfall from Alaska’s budget? Well, it’s happened before.”

22) California: Last Wednesday a federal judge allowed the release of a scathing report about the psychiatric care inmates are receiving inside California’s prisons. “CDCR has a broken system of care because information is not accurately reported upon, and reliable commonsensical action has not been taken,” the 161-page report from Dr. Michael Golding, the chief psychiatrist for the prison system, said. “I have documented that CDCR has prevented errors from being fixed, and worse, CDCR has not allowed anyone to know that there has been inaccurate reporting to the courts and to our leadership,” it adds. 

23) Mississippi: NOLA.com reports that “a Louisiana father-and-son duo who built private prison contracting firms worth millions of dollars are now awaiting sentencing to federal prison after admitting they tried to bribe their way into business at Mississippi lockups.” 

24) International: Following Friday’s extremist attack in London, Dal Babu, the former Met police chief superintendent, said “fundamentally, a lack of resources to policing and the criminal justice system puts us all in danger. We need to carry out an urgent review of the resources available to monitor convicted terrorists by the police and security services, including what impacts privatisation has had on the probation service.

Public Services

25) National: Michael Dobie, a Newsday columnist, lays out the “troubling origins” of the National Park Service’s privatization plans. “But this all makes sense when you delve into the origins of the proposal. It came from the Interior Department’s “Made in America” Outdoor Recreation Advisory Committee, which counts among its members—you knew this was coming—several who would benefit from privatizing the national parks. Derrick Crandall’s National Park Hospitality Association includes as members many of the nation’s largest concessionaires. Jeremy Jacobs Jr. is co-chief executive of Delaware North, which holds contracts at Sequoia, Kings Canyon, Shenandoah, Grand Canyon and Yellowstone. Bruce Fears is an executive with Aramark, which runs various concessions in Yosemite, Denali, Crater Lake, Grand Canyon and Canyonlands. Another member’s company makes electric bicycles, and wouldn’t you know it, Interior Secretary David Bernhardt recently signed an order to allow previously banned electric bikes on trails in national parks and wildlife refuges. There’s a concession for that, too. The pattern is clear. Not only does this administration not care about conflicts of interest, it seems to prefer them when there’s money to be made.” 

26) National: James Wilt has laid out the case for free public transit, pointing to, among other things, the racialized enforcement of fare evasion and the regressive taxation involved in charging for public transit at the point of use. “It’s not some utopian demand. Over 100 transit systems operate fare-free around the world, including much of Estonia. Dunkirk, France, became one of the largest examples, when it introduced free buses to its population of 200,000 last year. About half of riders surveyed said they were new transit users and were using it instead of driving a car, a clear indication of the policy’s power to reduce transportation emissions in a city. Such an approach can be scaled up to any level, of course, including to intercity bus service or national passenger rail.”

27) National/InternationalLabour leader Jeremy Corbyn releases 451 unredacted pages detailing the conservative government’s negotiations with the Trump administration to privatize Britain’s National Health Service by selling off huge chunks of its services to U.S. “healthcare” and pharma giants. [Video, about 37 minutes]

As Trump visits the U.K. this week for a NATO summit, he will be met by mass demonstrations led by NHS staff to protest U.S. corporate attempts to gobble up the British health service. “‘This week we discovered just how great a threat Donald Trump is to our NHS,’ explained Nick Dearden of trade campaign group Global Justice Now, who is set to speak at the upcoming protest. ‘That’s why Tuesday’s demonstration will be led by nurses and doctors—to symbolize the millions of people who will stand up for our health service against a U.S. president who simply represents the biggest, greediest corporate interests in the world.’” 

28) National@cooperlundsays “remember social security privatization? It’s back, and it’s the Democrats turn to try!”

29) California: The New York Times ran a must-read piece by Jose A. Del Real on rural California’s water system, highlighted the chronic failures of government at all levels to deal with service delivery racism—“brown water for brown people.” Del Real writes, “I wanted to understand how a water system, under the supervision of locally elected board members, could go so far off-the-rails without the government’s intervening, and I wanted to know if that said something about the system at large. In the course of that reporting, I realized significant regulatory gaps were keeping the state in the dark about what water districts were up to. Sources at the state water agency then told me that up to 1,000 systems across California may be at risk of significant failures, but there is no way of knowing until they actually fail. Economies of scale might be a problem, but a flawed and outdated regulatory framework was clearly also implicated.”

The Ralph Nader Radio Hour also hosted an interesting discussion of America’s water contamination issues with Seth M. Siegel, a lawyer, activist, serial entrepreneur and author of the New York Times bestseller, Let There Be Water. “We were led to believe falsely that Flint was a unique situation,” says Siegel. “I believe that once we alert Americans everywhere that this is just not a problem on Indian reservations—although it’s a terrible problem there. It’s not just a problem in poor black communities—although it’s a terrible problem there. But this is a universal problem. Once people understand that, I believe people will demand of their public officials that they start to move on this.” He focuses not just on lead contamination, but on contamination involving a vast amount of chemicals the EPA has failed to regulate. [Audio, about an hour]

30) District of Columbia: Raymond Jackson, president of Amalgamated Transit Union Local 689, says that a strike in Virginia will determine the future of the area’s public transit. “There are dirty little secrets that WMATA and [WMATA General Manager Paul J. Wiedefeld] don’t want the public to know,” he writes in the Washington Post. “Their path toward privatization was always doomed to fail, in part because companies such as Transdev have a long history of devaluing service, safety and their workers for the sake of profits. We at Amalgamated Transit Union Local 689 have members who still remember why WMATA was created: Its private-sector predecessors repeatedly failed to deliver equitable service while trying to turn a profit. Those failures ignited years of labor unrest, including several strikes by our members. These members now watch with frustration as WMATA ignores its history and entrusts public transit to private hands, this time with even bigger consequences.”

At a recent WMATA board meeting, “once the public comment period ended, organizers from local Jobs With Justice, Sunrise Movement, and Democratic Socialists of America chapters commanded the floor. ‘This whole thing’s a mess,’ one protester yelled as the group held up a banner that read ‘Equal pay = Equal work’ in front of the board seating before Metro security and staff shoved them out of the room. Transdev workers and community members left, joining them for an impromptu march in the neighborhood while the WMATA board meeting continued on.”

31) Louisiana@AlanEvilsays “behold the glory of privatization! The ferries were public services for decades, only cars paid to cross on them, pedestrians just walked on and walked off. Then it was $4 to ride one way. Then they closed them because profits.” 4WWL TV reports that “across the river, in Algiers Point, it’s tranquil, peaceful and quiet. But not all is well. Business owners are fuming because they don’t know when, or even if, the ferry will resume service. ‘I can’t order products for my shop,’ said shop owner Beatrix Bell. ‘I can’t order 50 bars of soap if I’m only going to have one tourist come in the shop a week.’ Her business in Algiers has taken a big hit.”

32) MarylandBig cuts to public services and possible privatization may be coming to Carroll County. “Dalton recommended the board deal with its rising jail costs by meeting with Bland, Grayson, Wythe, and Giles counties to see if they have any suggestions for cutting costs. He also wrote the county should ‘deal with Social Services and the cost,’ and deal with fire and rescue departments to include ‘hard billing, reduction of staff, receiving proposal on privatization of rescue and how to reinvigorate volunteers to run night and weekend calls.’”

33) Rhode Island: @SamuelWBell says “we accept libraries as a given, but in reality conservatives are chipping away at them hard in our state. Libraries are incredibly cheap, but our stingy and unfair library formula has led to crises like the massive cutbacks and partial privatization of Providence’s libraries.”

34) International: Analysis by the U.K. Trades Union Congress finds that private shareholders in rail companies have pocketed £1.2 billion in dividends over the last five years while rail fares have risen 46% over the past decade. “TUC General Secretary Frances O’Grady said: “The Great Train Robbery is peanuts compared to the Great Privatisation Scam. “We can’t go on being fleeced like this. Let’s use our votes to fix the railways and put them back in public hands.” The rail companies are subsidised to the tune of £5billion a year, three times the level received by nationalised British Rail in the 1980s.” For more see the TUC’s 2013 report.

35) International: Trade union leaders in Canada are warning that plans by the Alberta government to slash thousands of public service jobs by 2023 will drive privatization. “David Harrigan, labour negotiator for the United Nurses of Alberta, says the move by Alberta Health Services means at least 750 nurses will be out of work once job-sharing is factored in. ‘It means a very significant number of layoffs. It means longer wait lists. It means less care. It likely means more privatization,’ Harrigan said Friday after learning of the decision in a meeting with the health agency.” 

Odds & Ends

36) National: Right wing Supreme Court Justice Brett Kavanaugh has signaled his support for an extremist legal interpretation of the nondelegation doctrine that would “take a wrecking ball to federal regulations. By doing so, the court could jeopardize a vast swath of laws that govern pollution, Wall Street, wage and hour rules, campaign finance limits, and more.” Kavanaugh signaled he may join the other four right wing justices in gutting the “administrative sate.”

37) Indiana: In desperate budget and debt straits, Gary goes in a for sale-leaseback deal. “The city will sell its public safety building to an entity called the Gary Building Corp. for $40 million. In turn, the corporation will lease the building back to the city. The building corporation was created for the sole purpose of owning city facilities and leasing them back to the city.” Gary’s deficit grew to $42.5 million in 2019 from $7.3 million in 2018. [Sub required]

38) International/NationalPreqin reports that “for the sixth consecutive quarter, hedge fund outflows surpassed capital inflows, with the industry losing $34.4bn in capital during Q3 2019.” Less money for charter schools?

39) Think tanks: Steven Ruggles of the University of Minnesota and Diana L. Magnuson of Bethel University have written an analysis of how the methodology and technology for census-taking has been privatized over the decades. “For most of the twentieth century, Census Bureau administrators resisted private-sector intrusion into data capture and processing operations, but beginning in the mid-1990s, the Census Bureau increasingly turned to outside vendors from the private sector for data capture and processing. This privatization led to rapidly escalating costs, reduced productivity, near catastrophic failures of the 2000 and 2010 censuses, and high risks for the 2020 census.”

Governing for the Common Good

40) National/International: As squalor, pain and degradation overtake the homeless in the U.S., Austria shows what can be done to create excellent public housing when the political will is there. [Video, about 4 minutes]