Privatization Report: St. Louis Airport employees fear privatization | Alabama to open private prisons | and more

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

EDUCATION

1) National: Sen. Amy Klobuchar (D-MN) and Gov. Jay Inslee (D-WA) and eight other Democratic candidates for president spoke to NEA members about advancing public education and about school privatization. “Both plans seek to roll back some of the Trump administration’s education policies. Klobuchar’s proposal would end the Trump administration’s push for a school choice tax credit, which critics say would siphon funds from public schools. Inslee says he will end the diversion of federal funds to private charter schools.” You can watch the entire NEA presidential forum with 10 presidential candidates here. [Video, about 2 hours and 230 minutes]

2) National/Tennessee:The Trump administration has given the green light for the imposition of Catholic church rules in publically-funded charter schools. “The U.S. Department of Education said a charter school network’s lease prohibiting it from teaching anything considered ‘gravely immoral’ by the Catholic Church does not violate federal guidelines, state officials wrote in an email obtained by Chalkbeat. The federal guidance removes the final hurdle for Compass Community Schools to open its six campuses across Memphis on July 31 in former Catholic school buildings. The opinion also confirms the new network’s eligibility to receive $600,000 per school in federal grants for ‘promising’ new charter schools.”

Experts suggest the charter network may be vulnerable to a lawsuit. “Preston Green, a University of Connecticut professor, whose 2001 law review article explored the legal questions of churches operating charter schools, said the ban on ‘gravely immoral’ teaching or activities adds up to the church giving orders. ‘The church is dictating what is taught or done,’ Green said of the Memphis charter network’s lease with the diocese. ‘That seems like a conflict under the [U.S. Constitution’s] establishment clause to me,’ which prohibits the government from favoring a religion.” The Center for Inquiry sent a letter to Tennessee’s attorney general in March after the lease agreement controversy first became public.

3) National: Public education supporters have responded to criticism of a report produced by the Network for Public Education by charter school activists. In a detailed refutation, Carol Burris of NPE writes, “Beyond faulty calculations that either deliberately or incompetently leave out a decade of funding, NAPCS also misrepresents our main criticism of the review process that documents the gap between what schools say on their application and the reality of the school. No matter how thick the manual, if reviewers are prevented from seeking outside verification of school claims, there is no way that false statements can be identified. Our report provides examples of false and misleading claims made by applicants, with links to the applications themselves. The critique is also silent on our documentation of grant recipients that have been identified by the California and Arizona ACLU as having discriminatory admissions policies and practices, charter schools whose student populations are dramatically different than the district in which they are housed, and grant recipient schools that have been involved in scandal.” 

Burris concludes, “Rather than continue a point-by-point rebuttal that would bore readers to tears, I suggest that readers read our reportfor themselves. Despite the NAPCS claim that the report lacks documentation, there are 106 citations, many to U.S. Department of Education documents and Office of Inspector General audits that are a fascinating read.”

4) California: The Healdsburg school board has decided to merge kindergarten classrooms of a charter school and a traditional public school “amid criticism of a racial divide and academic achievement gaps between the two schools that prompted the district last year to form a task force and hire a nonprofit to investigate disparities in the school system. (…) It’s the first step in eventually combining the two schools into one, district officials say, an action many parents demanded after contending Latino students were funneled away from the charter and into a Healdsburg Elementary English language program. (…) Although Healdsburg Elementary and Healdsburg Charter share campuses, their student bodies are sharply divided by race and academic achievement. Latinos represent 89% of students at Healdsburg Elementary, and only 36% at the charter school.”

5) California: Assembly bill 75, which Gov. Gavin Newsom (D) signed on July 1, may bring in more money for Santa Ynez traditional public schools and see a reduction of money for a charter school. “‘This is nothing short of a miracle, and it is the long-term solution that we were hoping would happen. Thankfully, it happened sooner than we anticipated,’ said SYVUHS Superintendent Scott Cory. The change goes into effect for the 2019-20 school year that begins this fall, Cory added. Both the Santa Ynez and Santa Barbara school districts were told in December that they would need to pay some of their tax revenue to help support Olive Grove Charter School because it operates within their district boundaries. The Santa Ynez district was told it could expect to make annual payments in excess of $1 million, which Cory said could bankrupt the district.”

6) Florida: The Manatee school district “has accused Lincoln Memorial Academy of failing to comply with document requests and violating its contract as a result. Both issues arose during a joint effort to address financial troubles at the Palmetto-based charter school.”

7) GeorgiaEnrollment in state-authorized Atlanta charter schools has begun to level off after years of growth. “It’s beginning to plateau as existing schools reach the enrollment caps specified in their charters and finish adding on grade levels. Only one school, KIPP Soul, which was approved in 2017, is still expanding grade levels.”

8) Idaho: Charter school officials in Jerome are requesting an investigation of a state education commission in response to criticism of charter schools made behind closed doors. “Commissioners accused Heritage Academy Superintendent Christine Ivie of ‘malpractice’ and claimed she was happy after Heritage fell into the state’s bottom 5% for school academic achievement, qualifying them for an additional $87,098 of federal money. They suggested Heritage’s board is not engaged and approves Ivie’s ideas with a ‘rubber stamp.’ One commissioner can be heard suggesting Ivie and the school board aren’t interested in education and ‘should run a social service agency, not a school.’”

9) New MexicoNew grand jury indictments have been filed in district court naming two former staff members of Alma d’Arte Charter High School in Las Cruces. “On June 28, a grand jury indicted Rivera on eight felony charges including embezzlement, fraud, forgery, tampering with evidence and public records, and conspiracy. Also indicted was Alma’s former special education coordinator, Maggie Baber, who was charged in February with embezzling $11,500 above her authorized contract.”

10) North Carolina:Court-ordered “Leandro” regulations that all students have a right to a solid education may now reach charter schools. “Some members of the [Commission on Access to a Sound Basic Education] say charter schools are draining money from traditional public schools. ‘Public charter schools were created to be laboratories of innovation to help improve public education and provide alternative learning environments for students,’ the commission wrote in a report on the draft recommendations for school finance and resources. ‘Unfortunately, the expansion of charter schools has begun to place a financial and planning burden on traditional public schools.’ The commission recommends changing funding for new charter schools and enrollment increases.”

11) Ohio: “Are Lucas County voters responsible for the oversight of 53 Ohio charter schools?” asks Liz Skalka of the Toledo Blade. “A little-known aspect of the ECOT saga is the unique role local voters play in electing watchdogs who oversee the Educational Service Center of Lake Erie West, the public entity that green-lit ECOT in 2000 and allowed the embattled school to keep operating until it could no longer afford to once the state set out to recoup $80 million for inflated student enrollment figures provided to the state Department of Education. Under state law, Lucas County voters elect the five-member board that oversees Lake Erie West, the state’s largest charter school sponsor. But what could be high-stakes political races—especially in the wake of ECOT’s failure and its large footprint across the state—have typically garnered little attention.”

12) Oklahoma: A charter school chain has provoked outrage by obtaining the personal information of teachers in an attempt to recruit them. “The attempt to siphon away public school teachers would seem to deepen this divide between Epic and traditional schools. For [Jeremy Davis], a union member who proudly marched during last year’s teacher walkout at the state Capitol, the email came as a slap in the face. ‘You’re putting in all this effort to be a part of education and to have a say in fixing things and then you have this entity come along that plays by completely different rules and try to lure you away,’ Davis said. ‘It’s disheartening … they’re pulling teachers we desperately need out of physical classrooms. It adds to the strain.’”

13) OregonPublic schools have stepped in to serve students affected by the Portland school board’s revocation of Trillium’s charter in late February, citing academic and financial struggles. “Trillium is closed, and the school’s 151 students have had to look for a new place to get an education. Most chose their neighborhood schools. Some picked other charters or alternative or focus-option schools. ‘We wanted to, as a district, be really helpful to these students and families to find the right fit,’ said newly elected PPS Board Chair Amy Kohnstamm.”

14) Pennsylvania: School property taxes are increasing almost everywhere in Lancaster County, and charter schools are part of the reason. “School officials point to rising special education, pension, charter school tuition and health insurance costs as the main reasons for raising taxes. And some, like Penn Manor, also must raise revenue for major construction projects. (…) ‘The local economy has really helped the revenue side, while the district has worked hard by implementing many initiatives to control some of the bigger drivers on the expense side related to special education, cyber charter tuition, and health insurance costs,’ [school district chief financial officer Nate Wertsch] said.”

15) Think tanksGrover Norquist’s minions are trying to drum up opposition to Democratic presidential candidates who have taken a critical position on charter schools and vouchers. Patrick Gleason, Americans for Tax Reform’s state director, is hoping that the upcoming Supreme Court case on Montana’s tax credit scholarship program will provide an opening. Gleason is part of the right wing blob trying to dismantle workers rights.

INFRASTRUCTURE

16) California: California American Water has filed an application to set new rates in each of its service areas for 2021 through 2023. The new rates would take effect January 1, 2021, pending approval by the California Public Utilities Commission. “The CPUC will hold Public Participation Hearings on this request to get input from customers and the public. California American Water will notify customers of the time, date and location once the hearings are set. Rates will remain unchanged until this request undergoes extensive public scrutiny by the CPUC. This process will include extensive, independent review and public evidentiary hearings. The process is expected to conclude in late 2020, with new rates taking effect by January 1, 2021.”

17) Florida: Gov. Ron DeSantis (R) has signed a bill dissolving the Miami-Dade County Expressway Authority, despite analysts’ warnings that another wave of rating downgrades could result. “The warning was realized Friday, when Moody’s Investors Service downgraded to A3 from A2 the authority’s debt, saying that the action was taken in response to House Bill 385 being signed,” reports The Bond Buyer. “In addition to signing the bill late Wednesday, DeSantis made his three appointments to the new governing board of the Greater Miami Expressway Authority. The governor appointed Koch Industries regional manager Fatima Perez, Key Biscayne attorney Marili Cancio, and Rodolfo Pages, who is a managing director for the private equity firm Caoba Capital Partners.” [Sub required]

18) Indiana: With Indiana American Water rates kicking up, community members say “I want to be able to see where my money is going.”

19) MissouriAirport workers at St. Louis Lambert International Airport fear that a proposed privatization will put their jobs at risk. “Keyahnna Jackson has a lot of questions about the potential lease of St. Louis Lambert International Airport to a private company. ‘Will I still have a job? Are they bringing new people in? Would our rate of pay change? What’s going to be the difference?’ she asked. She’s been working at the airport since January, cleaning bathrooms and hauling trash off the concourse during the overnight shift for Regency Enterprises Services. While Jackson said she’s attended a few community outreach meetings held by FLY314, the consulting group that’s working with the city on the privatization effort, she said she and her co-workers still feel in the dark. ‘We know right now we don’t feel like it’s the best thing for the workers because we don’t know their plans,’ she said.” About 500 airport workers are city employees.

Kevin McNatt the president of Unite Here Local 74, which represents about 400 food and beverage workers employed by HMSHost, is concerned. “While he’s been informed by FLY314 that any existing contracts would be honored, McNatt said there’s no guarantee once they expire. Contracts for the workers he represents are up this fall. ‘The first place they’re going to try to make cuts is with the workers,’ he said. ‘Our folks have good wages, good benefits, health insurance and pensions out there.’”

20) Think tanks: The National Conference of State Legislatures (NCSL) has very helpfully updated its data on the use of transportation ‘public-private partnerships’ by the states, Puerto Rico, and the District of Columbia, with detailed information on legislative changes in many states. “Twenty bills involving P3s were introduced in 11 states during 2019 legislative sessions, according to the NCSL database. Most of those bills failed to be enactedand among the few that did become law, the changes mostly involved tweaking existing authorizations for P3s,” The Bond Buyer reports. [Sub required]

CRIMINAL JUSTICE AND IMMIGRATION

21) National: In the Public Interest’s Jeremy Mohler sets out how corporations profit from almost every step in the U.S.’s immigration detention system. “The takeaway is crystal clear: if we’re going to dramatically reform our immigration laws or even #DismantleICE, removing private profit from the system is a necessary step.” 

22) National: The New York Times has reported on conditions in the Clint Customs and Border Protection facility in Texas, which it described as “the stuff of nightmares.” And there are companies profiting from the nightmares: “The sense of normalcy fades away the deeper one goes into the station. A detachment of Coast Guard personnel, sent to assist overworked agents, stock an ad hoc pantry with items like oatmeal and instant noodles. Monitors in blue shirts roam the station, hired through an outside contractor to supervise the detained children.” See Alex Kotch in Sludge on Customs and Border Protection Vendors, 2010-June 2019. He identifies over 1,100 companies which have been paid a total of $6,430,888,152 since 2010.

23) National: In “Bank of America Cut Off Private Prisons Weeks After Lending to One,” The Wall Street Journal reports that there is less to Bank of America’s pledge to cut off financing from private prison companies than meets the eye. “As the review was taking place, GEO Group Inc., which runs prisons and immigration-detention centers, was looking to tweak a $900 million loan. The revolving-credit line was so large that a group of banks, including Bank of America, had come together to make it, according to securities filings. That is a typical practice in commercial lending. Bank of America’s ESG [environmental, social and corporate governance] team vetted and approved the deal, according to people familiar with the matter. The new revolver was finalized on June 12 and the bank agreed to cover a $90 million portion, according to a securities filing and people familiar with the matter. The loan was extended to May 2024 from May 2021.” [Sub required] 

24) National: Democratic presidential candidate Cory Booker says he would “virtually eliminate immigration detention” if elected. “Booker’s plan would require border facilities operated by the U.S. Border Patrol, including those holding children, to comply with stringent health standards or face closure. He would also phase out contracts with private prison operators such as GEO Group Inc. and CoreCivic Inc., which operate a number of facilities for U.S. Immigration and Customs Enforcement to house adult migrants awaiting court proceedings.” 

25) NationalLara Witt of Wear Your Voice magazine has put together a useful annotated list of companies, politicians, and political groups profiting and/or benefitting from immigrant detention and private prisons. “Wear Your Voice wanted to put together a list of the known companies and politicians profiting from the camps—the list is non-exhaustive and we will update it with new information. We encourage you to divest from them, protest, write letters and call others to action.”

26) National: CNN reports that BlackRock and Vanguard are the biggest investors in private prisons, saying “you may own prison stocks in these giant ETFs and mutual funds.” They say “it’s not yet clear if big investment firms will distance themselves from the prison industry, similar to what iShares and several other fund managers did with gun stocks American Outdoor Brands (AOBC) (formerly Smith & Wesson) and Sturm Ruger (RGR) in the wake of a series of mass shootings in America during the past few years. (…) iShares has a socially responsible ETF tied to the S&P Mid Cap 400 index called the MSCI KLD 400 Social (DSI) fund which does not hold GEO and CoreCivic.” 

27) NationalCoreCivic CEO/President Damon Hininger retweeted his company’s message “Wishing you and your family a safe and enjoyable Independence Day.” Here’s one response.

28) NationalU.S. Customs and Border Protection is attempting to end business with Perceptics LLC, a contractor involved in data breach, CNN reports. Perceptics is “a company that provides vehicle identification and license plate recognition technology for border security and other enforcement purposes. The company had been a contractor for Customs and Border Protection. The company was found ineligible for federal contracting based ‘upon adequate evidence of conduct indicating a lack of business honesty or integrity, or a lack of business integrity’ or other pending investigations, according to the records.” 

CNN reported last month “that at least 50,000 American license plate numbers were made available on the dark web after the data breach, according to a CNN analysis of the hacked data. The company was never authorized to keep the information, the agency told CNN at the time. ‘CBP does not authorize contractors to hold license plate data on non-CBP systems,’ an agency spokesperson said.”

29) National: Do public pensions in Baltimore and Prince George’s County have a stake in the company that owns the Homestead child detention center? Axios can’t get them to talk.

30) National: Public Citizen boils it down. “Of every 100 immigration detainees: 32 are in GEO Group facilities; 21 are in CoreCivic facilities; 21 are in other private facilities; 26 are in public jails. It’s no mystery why for-profit prisons spent more than $3.8 million lobbying Congress in 2018.”

31) AlabamaThe state is moving forward with a ‘public-private partnership’ process to finance new prisons. “The state is seeking the qualifications of firms interested in designing, building, financing, and maintaining three turnkey correctional facilities. Reponses are due Aug. 2. The concessionaires are expected to purchase and own the land for the prisons, and to enter 50-year public-private partnership contracts with the state, the Alabama Department of Corrections said in a 41-page request for qualifications. ADOC said it will lease the three facilities using an availability payment structure, according to the RFQ. Firms must tell the state what kind of financing they plan to use, such as bonds, and if the funding source will be via a private placement, public offering, or bank loan.” [Sub required; here’s the 41-page Request for Qualifications]

32) Arizona: How much has changed under Sheriff Paul Penzone, who replaced the notorious Maricopa County Sheriff Joe Arpaio? Not much as Elvia Díaz of the Arizona Republic reports. “Federal immigration agents have removed more than 5,000 people from Maricopa County jails since Sheriff Penzone took over.” Now it will be interesting to see who bids on a new RFP the county just issued for “Training: Bias-Free Policing & Detentions, Arrests, & Immigration Related Laws.” Bids are due July 17.

33) California: California legislation (#AB32) that would ban for-profit prison companies like CoreCivic and GEO Group from being used by the Department of Corrections and Rehabilitation has passed the State Senate Judiciary Committee. “Now on to the Public Safety Committee next Tuesday, July 9th at 8:30am! BE THERE!!” says human rights lawyer Emily Claire Goldman. The amendment “An act to add Section 5003.1 to, and to add Title 9.5 (commencing with Section 9500) to Part 3 of, the Penal Code, relating to detention facilities” was passed last Wednesday. The language: “This bill would also prohibit, with exceptions, the operation of a private detention facility, as defined, within the state.”

34) Florida/National: Manuel Madrid of the Miami New Times reports that Florida companies are making millions off of ICE contracts. While big-name corporations such as Microsoft, Amazon, and Salesforce “have caught flack for their ICE contracts, the vast majority remain unmentioned. Never one to be outdone when it comes to ethically thorny business dealings, Florida boasts its own collection of faceless ICE contractors raking in millions of dollars for their work with the agency.” These include Aircraft Transport Services, G4S Secure Solutions (USA) Inc., Harris Corporation, Telco Solutions Inc., and of course the Florida-headquartered GEO Group. 

35) New MexicoState officials declare it is unlikely “the Department of Corrections will contract with another private company to run a prison in Clayton, a facility struggling to maintain adequate staffing. Tripp Stelnicki, a spokesman for Gov. Michelle Lujan Grisham, said the GEO Group’s decision Thursday to pull out of its contract to operate the Northeast New Mexico Detention Facility was no surprise to state officials. ‘We’ve been working on it and planning it,’ Stelnicki said in an email. ‘The only reason it wasn’t announced sooner by us was that we had to wait for them to notify their employees.’ Stelnicki said the state wants to run the medium-security prison, which holds 500 inmates. ‘That’s why this is happening,’ he said.” GEO Group “will continue to operate prisons in Guadalupe and Lea counties, which it owns outright. A spokesman said that without funding to increase wages, the company was losing staff members to better-paying state-operated prisons in both New Mexico and Texas.” 

36) Texas: Rep. Henry Cuellar (D-TX), the largest Democratic recipient of donations from the Geo Group private prison and detention company, has a primary opponent—his 26-year old former intern Jessica Cisneros, a Laredo immigration and human rights attorneyCisneros has called out Cuellar for taking “hundreds of thousands of dollars from large corporations, including private prison companies like the GEO Group, oil and gas corporations and Republicans like the Koch Brothers.”

37) InternationalA Canadian pension fund has quietly divested from private prison stocks. “The [Canadian Pension Plan Investment Board (CPPIB)], which manages C$392bn (US$299m) in pension funds on behalf of 20 million Canadians, did not make a public statement when it dropped the two companies from its list of foreign public equity holdings, but the change was spotted this week by the federal MP Charlie Angus, a member of the opposition New Democratic party. On Friday, he called on the CPPIB to publicly acknowledge the divestment and take a position on ethical investing. ‘Ethical investments are essential to maintaining public confidence in what the Canadian Pension Plan does, and the investments in Geo Group and CoreCivic were deeply offensive to Canadian values,’ he told the Guardian.”

38) InternationalThe British government has propped up the outsourcing giant Serco with a Deferred Prosecution Agreement covering “fraud on a mass scale.” But The Independent’s James Moore asks “if companies know there is a get out of jail at a discount rate, where’s the deterrent? There will always be people in business who cut corners, or worse. Part of the reason for their doing that is because they know the consequences to their employers are limited. As this episode demonstrates.” 

PUBLIC SERVICES  

39) National: As California experiences two significant earthquakes, the Trump administration has proposed cutting the U.S. Geological Survey’s earthquake hazards budget by 23%, according to the American Institute of Physics. Meanwhile, the USGS earthquake maps system was snarled and unusable in the early hours of the second quake. Perhaps the privatizers want to put up a firewall to weed out the high online traffic and make the real time maps accessible only to the wealthy, as they are trying to do with the National Weather Service and the international network of forecasting systems it relies upon?

40) National: “Half of Americans Are Effectively Poor Now. What The?” says Umair Haque. “Think about it. If Americans go on playing this strange and silly game of pretending to be rich when they’re poor…then what reason is there to address any of the obvious and fatal failures at the heart of American life anymore? If you’re rich and fortunate…why do you need public healthcare, childcare, retirement? And yet without those things, Americans will only ever get poorer.”

41) National: The IT industry has a bright idea to solve the ransomeware threat to local government—outsource government IT to the IT industry. The idea is being put about by Alan Shark, executive director of the Public Technology Institute, which is a subsidiary of CompTIA, an IT industry trade association. As we all know, private, for-profit IT managed service providers have figured out this ransomware thing.

42) Oregon: The public agency in charge of earthquake study and preparation, as well as monitoring mining efforts in Oregon, could be shut down after going over budget for the second time in four years. “Brad Avy, director of the agency, said there were a number of factors that led to the financial problems ‘including the need for an improved accounting architecture and written financial policies and procedures.’ The funding model has shifted over time, Avy added, to more reliance on grants. ‘(The agency) starts the biennium without knowing how successful it will be in securing grant awards to meet its budgeted revenue,’ he said. ‘This results in a less predictable funding structure for our Geological Survey and Services Program.’”

43) Revolving door newsScott Gottlieb, Trump’s former head of FDA, has quietly slipped onto the Pfizer board. Presidential candidate Elizabeth Warren has denounced the move. “‘You will be on the board of a company that has billions of dollars at stake in the decisions made by the agency you used to head and the employees you used to lead,” states Warren’s letter. It’s a profitable venture for Gottlieb. ‘According to Pfizer,’ Warren notes, ‘board members in 2018 were paid $142,500 in cash retainers, plus received $192,500 worth of Pfizer stock.’” Pfizer’s board.

OTHER

44) National/Michigan: A kerfuffle broke out last week over the appointment as a Harvard Fellow of former Gov. Rick Snyder (R-MI), who has been accused of overseeing the Flint mass water lead poisoning. Snyder withdrew as outrage spread. Yale philosophy professor (and member of the Prison Policy Initiative advisory board) Jason Stanley once wrote, “Snyder’s first appointment as an emergency manager, to the city of Pontiac, Michigan was Louis Schimmel, the author of the 2005 report for the Mackinac Center. Schimmel was appointed with a salary of $150,000 per year and an indefinite tenure. By privatizing most of the city’s services, Schimmel laid off 480 out of 500 city employees, resulting in a 96% loss of public sector jobs. It’s hard to see why that would be a positive benefit for Pontiac, but Pontiac was eventually released from emergency management, its finances now overseen by a state board. Its municipal assets, however, are in the hands of companies owned by private equity.”

45) International/National: The Wall Street Journal reports that Britain’s regulator for accounting and audit, the Financial Reporting Council, has fined the major accounting and consulting corporation Deloitte for its role in auditing a subsidiary of the outsourcing firm Serco Group PLC. Serco Geografix Ltd. “provided electronic-monitoring services to the U.K. government, [and] recently settled fraud and false accounting charges with a different British regulatory agency.” 

Deloitte also has active operations in the United States, e.g. providing accounting advisory services to GEO Group during its conversion to a real estate investment trust (REIT). Deloitte also scored an $18 million contract with ICE in 2017 for case management at migrant detention facilities.