Weekly privatization report

 


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

1) National: More than 100 organizations have demanded that Wells Fargo and JP Morgan Chase stop financing private prison corporations that profit from the pain and separation of families. “On September 26, 2018 hundreds of thousands of people from many organizations across the nation including the National Domestic Workers Alliance, MomsRising, MoveOn, In The Public Interest, Little Sis, ACRE, Color of Change, Make the Road New York, AVAAZ, Enlace, Presente.org, the Center for Popular Democracy, and others signed petitions that were delivered to your corporate headquarters urging the end of financing of CoreCivic and Geo Group.” [Letter]. Forbes has an excellent in-depth interview on the subject with Families Belong Together coalition members Matt Nelson of Presente.org and Xochitl Oseguera of MomsRising/MamásConPoder.

2) National: The New York Times reports the federal government is moving hundreds of migrant children to a contractor-operated tent city in the Texas desert that costs an estimated $100 million a month to operate. The money has been diverted from federal programs “targeted for medical research, treatment, and other programs.” The story was originally broken by Robert Moore of Borderzine.com in the Nonprofit Quarterly last Monday. Moore has covered the story for the Texas Monthlyand Washington Post.

The Times reports that “until now, most undocumented children being held by federal immigration authorities had been housed in private foster homes or shelters, sleeping two or three to a room. They received formal schooling and regular visits with legal representatives assigned to their immigration cases. But in the rows of sand-colored tents in Tornillo, Tex., children in groups of 20, separated by gender, sleep lined up in bunks. There is no school: The children are given workbooks that they have no obligation to complete. Access to legal services is limited.”

The Tornillo facility is operated by the nonprofit San Antonio-based contractor Baptist Child Facility Services (BCFS), which will receive $360 million through Dec. 31 for running it. [See the Federal Register Notice of the award, and the October 2016 standing announcement under which it was issued]. In July, the New York Timesreported “BCFS—a nonprofit group that operates a number of shelters housing migrant children, including a tent city outside of El Paso that has been the focus of protests—counts a former Republican congressman, Henry Bonilla, as a longtime board member and a lobbyist. In December 2016, Mr. Bonilla met with Mr. Trump, then the president-elect, to discuss joining his cabinet as agriculture secretary. BCFS has also long retained Ray Sullivan, a lobbyist and onetime chief of staff to Rick Perry, the former Texas governor who is now Mr. Trump’s energy secretary.” Bonilla’s lobbying firm, The Normandy Group, LLC, received $40,000 in the first quarter of this year for lobbying the House, HHS, DGS, and FEMA for BCFS on “Emergency services; humanitarian assistance.”`

In June, U.S. Rep. Beto O’Rourke (D-TX), who is running for the Senate against Sen. Ted Cruz (R-TX), “led a packed protest rally against the Tornillo facility at the height of the Trump administration’s practice of separating families as part of its zero tolerance approach to unlawful border crossers. Local teachers are trying to get the detained children into the local schools. (…) The local teachers’ union has helped organize protests at the Tornillo facility with the Texas State Teachers Association and the National Education Association.”

3) National: A federal judge has ruled that hunger-striking immigrant detainees at the GEO Group-run Northwest Detention Center in Tacoma can be force fed. “In response to media inquiries about the hunger strike at the facility, the claims of another chickenpox outbreak and the worries about detainees potentially being exposed to toxins from the nearby fire, GEO Group’s Vice President of Corporate Relations Pablo E. Paez referred all questions to ICE.”

4) National: As the battle over the possible Senate confirmation of Brett Kavanaugh to the Supreme Court further unfolds this week, some lesser-known issues concerning his legal views of privatization and possible agenda are worth noting. In 2001, National Journal, reporting on court battles over the Affordable Care Act, noted that “Judge Brett Kavanaugh, a former clerk to Supreme Court Justice Anthony Kennedy and a former official in the George W. Bush White House, asked whether it was appropriate for the court to intervene in what ‘could be the blueprint for a privatized social safety net.’ If the court strikes down the health care law, it would also mean it might need to strike down laws providing for the privatization of other social services, like Social Security, he said. ‘Why should the court get in the middle of that?’ he asked.” [Margot Sanger-Katz, “D.C. Circuit Hears Fourth Big Health Care Case, National Journal, September 23, 2011; sub required]

Kavanaugh also defended Jeb Bush in Bush v. Holmes, a lawsuit challenging a controversial private school voucher program in Florida; and submitted an amicusbrief in the Good News Clubcase, arguing that a public school district’s refusal to allow an evangelizing Christian youth group to use its premises was discriminatory and in violation of the Constitution’s First Amendment right to free speech. [Good News Club v. Milford Central School, 2001 U.S. LEXIS 4312 (2001)]. One of the key amicus briefs for the Good News case was submitted by Jay Sekulow, the lead counsel for Pat Robertson’s American Center for Law and Justice, and now on Trump’s personal legal team.

5) National: The accounting firm Cherry Bekaert has issued guidance on “#MeToo and Federal Contractors.” And Washington Technology’s Nick Wakeman has advocated that “public disclosure and transparency surrounding the sexual harassment claims that companies settle” should “be extended to government contractors who are not publicly-traded. Reporting their actions should be one of the things contractors officers check when awarding contracts and determining if a company is in good standing.”

6) National: Jeff Bryant, the editor of the Education Opportunity Network website and an Associate Fellow at Campaign for America’s Future, details education secretary Betsy DeVos’ favors to the for-profit higher education sector.

7) National: Public Employees for Environmental Responsibility (PEER) files suit to force the release of a scientific assessment of whether Americans routinely inhale unhealthy amounts of formaldehyde. “Furious” lobbying by private interests is blocking the release. “The American Chemistry Council, the industry’s main lobby, has pressed Trump officials to block this new assessment by U.S. Environmental Protection Agency (EPA) scientists, arguing ‘premature release’ would cause ‘irreparable harm’ to companies using the chemical.”

8) Vermont: Commenting on the state’s decision to move some of its prisoners to a CoreCivic facility in Mississippi, Valley Newscolumnist Jim Kenyon says, “After looking over the 63-page agreement, I’m not sure Vermont’s out-of-state inmates will fare any better in Mississippi than they did at Camp Hill State Correctional Institution in Pennsylvania, where three Vermont inmates have died since June 2017. The contract allows CoreCivic to keep offenders locked in their cells up to 18 hours a day. Recreation time, which is how many inmates blow off steam, can be limited to 90 minutes a day. Having a paying job can also be a way to pass the time, but CoreCivic is required to employ only 40 percent of Vermont inmates. According to the prison’s 80-page handbook, inmates will be fed in their cells by prison staff. (Some people might consider this room service, but it seems to me just another way to keep prisoners in their cages.)” The Vermont contract pays CoreCivic up to $18.4 million over two years.  

On September 21, CoreCivic’s CEO, Damon Hininger, sold 35,324 shares of the company’s stock, worth $909,593. He still owns 60,082 shares in the company, valued at $6,697,111.50.

9) National: Loading up prison healthcare companies with debt—what could possibly go wrong? Bloombergreports that “bad press and lawsuits are no obstacle” to a $610 million loan to prison healthcare contractor Correct Care Solutions so it can be bought out by a private equity firm. “Now, along with that baggage, it wants a loan carrying risky terms—and Wall Street is happy to provide it. While a few investors balked, Correct Care has won enough lender support for $610 million in leveraged loans backing its buyout by private equity firm HIG Capital LLC, according to people familiar with the matter. (…) HIG agreed to buy Correct Care Solutions LLC in July to merge it with Correctional Medical Group Cos., a regional rival already in its portfolio. The combined company is expected to become the biggest player in the correctional health-care sector in the U.S., according to Moody’s Investor Service. (…) Credit Suisse Group AG and Jefferies, the two main banks arranging the financing, declined to comment.”

10) National: In the Public Interest’s Jeremy Mohler takes on the hoary myth that the private sector is efficient and the public sector is inefficient. “The government isn’t automatically good at doing anything and everything, but neither are corporations. It’s time to bury the myth of government inefficiency. What matters more, anyway, is democracy, whether we have a say in how a public good or service that we all pay for is managed. And corporations certainly aren’t good at that.”

11) Arizona/National: The city of Eloy has pulled out of a controversial middleman agreement that allowed Tennessee-based CoreCivic to run a family immigration detention center in Texas. “The decision to end the city’s role in a contract with the private prison company CoreCivic comes a month after the city was hit with a $40 million legal claim related to the death of a child who lawyers contend became sick at the center because of unsanitary conditions and then died following her release because of inadequate medical care. ” R. Stanton Jones, a lawyer for Yazmin Juarez, the girl’s mother, said “Mariee died just months before her second birthday because ICE, the city of Eloy, and others failed to provide the most basic standard of care as her condition rapidly deteriorated, and this move by the Eloy City Council has no impact on the city’s liability for this little girl’s death earlier this year.”

12) California: The Newport-Mesa Unified School District board of trustees has received a petition from a charter school seeking to operate within the district’s boundaries. “The Newport-Mesa board is required by state law to hold a public hearing on the petition, and trustees will subsequently vote to grant or deny it. If it is denied, ISSAC may seek approval from the Orange County Board of Education. ‘I’m looking forward to the public meeting with our community and recommendations from staff as well as the presentation from the proposed charter,’ Newport-Mesa board President Vicki Snell said.”

13) California:The Mountain View Whisman School District faces an uphill battle if it decides to fight charter school expansion plans under the state’s current law, some lawyers say. “While school districts are asked to consider the level of support from teachers, employees and parents during the review period, there’s really no teeth to it. Public sentiment is not a valid criteria for denial, Huff said. ‘It doesn’t really have any meaning at all, and it’s unfortunate, frankly,’ he said. ‘Even though you’re required to consider the level of your community support, the statute doesn’t allow you to use that for one of your bases to reject the petition.’ (…) Mountain View Educators Association president Sean Dechter urged trustees not to support the charter petition when it comes before them, stating that it would hurt the district’s schools financially and lower enrollment—potentially eliminating teaching positions in the district. He also cautioned the district about potential legal battles, pointing to the history of litigation between Bullis and the Los Altos School District, where it operates a K-8 school.”

14) Delaware: A New Castle charter school has abruptly closed, leaving students and parents scrambling. “With the school year already well underway, hundreds of students from the Delaware Academy of Public Safety and Security, commonly referred to as DAPPS, found themselves at this quickly organized school fair Wednesday searching for a new place to attend class. ‘We just got word that school was closing as of immediately,’ said parent Charles Brandt.”

15) District of Columbia/Maryland/Virginia: ATU Local 689 declined to speak at the WMATA Board meeting last week that extended General Manager Paul Wiedefeld’s contract, saying “this union is well aware that trying to persuade the WMATA Board with facts and evidence is no different from the board meetings themselves: a complete waste of time.” Despite vociferous objections from two WMATA board members and the agency’s frontline workers, the Metro board voted Thursday to “extend Wiedefeld’s contract to 2021 and pay him $435,000 a year, making him one of the highest-paid public transit chiefs in the country.” Wiedefeld will receive a $37,500 raise, effective immediately. Among other things, the Metro board recently enraged its staffers and member of the riding public by “using a publicly funded rail car to give a private ride to racist white nationalists complete with police escort and news media in spite of public outcry from around the world.”

Two weeks ago WMATA sent out requests for private contractors to bid on Silver Line extension work. The union said “there is objective evidence around the country that privatization is not a cost saving, but instead drives up fares, jeopardizes safety, results in service cuts, and fosters an environment for political corruption because it puts profits ahead of the riding public.  Furthermore, Metro provided no examples of improved rail service through privatization [in the] U.S. Still, Mr. Wiedefeld refuses to let those facts get in the way of his destructive agenda.” [See ATU 689’s report, WMATA: Fund It, Fix It, Make It Fair].

16) Illinois: Prospects for a $1 billion ‘public-private partnership’ to build a 12-mile express train link from downtown Chicago to O’Hare Airport remain uncertain after a dramatic week in which the project’s backer, Tesla head Elon Musk, faced charges, then concluded settlement, with the SEC over statements Musk made about taking Tesla private. The agreement removes Musk from the chairmanship of Tesla. Musk’s Boring Company, which would build the link, has been excluded by the SEC from the agreement. But details of the airport link are shrouded in secrecy, which has led the Chicago Better Government Association to file suit to force some transparency. [BGA complaint].

The airport link may be getting a boost from Washington, DC, where a provision tucked into the FAA reauthorization bill now working its way through Congress could channel $152 million in Passenger Facility Charge (PFC) revenue to the project. Although Musk has said his Boring company and not the city would bear the costs of the project, will Boring be able to raise the financing considering the challenges facing Tesla? The New York Timesreported (before the announcement of the SEC settlement) that “Tesla has struggled to meet its production targets for the Model 3, and has continued to burn through cash while two bond payments totaling more than a billion dollars will come due in the next six months. Tesla had $2.2 billion in cash at the end of the second quarter, but has been using up nearly a $1 billion every three months. It also has about $11 billion in debt, and owed its suppliers $3 billion as of June 30.” Los Angeles Mayor Eric Garcetti has given Musk a vote of confidence.

17) Iowa: The Davenport Education Association unanimously has passed a resolution opposing a proposal by the Davenport Community School District to consider outsourcing educational support professional (ESP) positions within the district to private companies. ESP positions “make up the DCSD’s employees in the custodial, maintenance, food service, para educator and clerical/secretarial departments and job classifications of the DCSD.” The DEA notes that “rotating crews of privatized support-service employees may not have the same level of commitment to DCSD students as career-minded ESP employees hired in-house, [and] the primary motivation of the companies offering outsourcing or privatized support services to the DCSD is making a profit and not serving the DCSD’s students or communities.”

18) Iowa: The share of Iowans who want to continue Medicaid privatization drops to 28 percent, according to polling reported by the Des Moines Register. Gov. Reynolds’ Democratic challenger, Fred Hubbell, “has zeroed in on the issue. He has scoffed at claims the shift is saving taxpayers money, and he has focused on stories of disabled Iowans struggling to maintain their services.”

19) Louisiana/National: A federal appeals court has ruled that a New Orleans charter school must recognize a union whose members have voted for collective bargaining rights. “The ruling says the school’s employees voted to have United Teachers of New Orleans represent them in collective bargaining. Voices had refused, saying charter schools are political subdivisions of the state and are therefore exempt from federal collective bargaining laws. But a three-judge 5th Circuit panel unanimously ruled that a charter is a privately controlled employer—not a political subdivision.”

20) Maryland/National: As Maryland Governor Larry Hogan presses on with his dubious and hugely expensive proposal to introduce privately owned express toll lanes on congested major arteries (covering 77 miles of the Beltway and I-270), new data shows that Virginia’s experiment with private toll lanes has been a bust. “The lanes remain bathed in red ink, and their owner, the Australian firm Transurban, seems to have raised tolls to the point where drivers are simply unwilling to pay more. One new set of data comes from Donna Chen, a civil engineering professor at the University of Virginia. She has carefully analyzed toll rates and compared them with the traffic delays on the roads’ untolled lanes. (…) Facilities that charge these stiff rates can serve only the affluent, and they surely deserve their critics’ label of ‘Lexus Lanes.’”

21) Massachusetts: The Massachusetts Education Equity Partnership has been launched to work on “glaring and persistent disparities that separate students from low-income families and students of color from their peers.” But University of Massachusetts Boston Prof. Maurice Cunningham says “actually the Massachusetts Education Equity Partnership is an offshoot of a little Arkansas family called the Waltons and agitates for privatization of public goods.”

22) Massachusetts: The New Bedford charter school battle is heating up. “The Alma del Mar proposal is meeting with stiff resistance from the city’s mayor, Jon Mitchell, who says the expansion would have a devastating effect on the city’s finances. Mitchell wrote about the effect of charters on district finances in July and he made the case against expansion last month on The Codcast, calling the plan ‘unreasonable’ and pointing to the city’s already challenged fiscal picture.” The charter school expansion is being backed by the right wing Pioneer Institute.

23) Michigan: A Detroit charter school has stunned parents and students by announcing that it will close today. “‘They’re devastated,’ said Charlotte Jackson, a teacher who answered the school’s phone in tears Wednesday morning. ‘Students were very upset, crying, screaming, walking out, a whole lot of stuff … It’s not good.’ Students and parents learned about the abrupt closure—effective Oct. 1—during a hastily-called, two-hour assembly with school officials Wednesday morning, including representatives from the school’s management company, EQUITY Education. Also present were officials from Ferris State University, which authorizes the charter school.”

24) Michigan: A charter school founder may have violated the state’s campaign finance law. “Chuck Stockwell sent an email communication to the Charyl Stockwell Academy District as well as a physical letter home with some students on September 17th. It shares some information on charter school funding and states ‘it isn’t fair’ that public schools can capture taxes via millages and public charter schools cannot. It urges parents and families to vote no on all public school millages and vote for politicians who support charter schools, providing a link to a list of preferred candidates by Great Lakes Education Project, a charter school advocacy group. It concludes by soliciting a donation of $250 per student that will go to teachers in grants to encourage them to stay and teach in the CSA district.”

25) Missouri: A group promoting the privatization of St. Louis Lambert International Airport has launched a drive that it says will gauge support for the proposal. But “a grassroots group called STL Not For Sale has criticized the survey as being biased. Alderwoman Megan Green, D-15th Ward, said last month that the door-to-door effort appeared to be a campaign to promote airport privatization.” The pro-privatization group will begin sponsoring “informational meetings” this month.  

26) Nevada: The Nevada Virtual Academy, an online charter school, has announced it will be closing its underperforming elementary school program. “Per an agreement reached with the State Public Charter School Authority this summer, Nevada Virtual Academy’s elementary school could only remain open if it received an NSPF index score of at least 34, which would have moved it to two stars. The school failed to hit that mark—instead receiving an unchanged index score of 21. The school’s lackluster performance has raised anew the question of how to regulate online charter schools, some of which have long struggled to yield adequate student achievement.”

27) New York: Next week legal provisions take effect mandating “that all employers (public and private), as well as contractors who bid on state contracts, maintain written sexual harassment policies and annual sexual harassment prevention training.”

28) Pennsylvania: A panel of experts participated in an information session at the Pittsburgh City Council on Thursday to answer members’ questions about privatization and ‘public-private partnerships’ as they pertain to Pittsburgh Water and Sewer Authority. “I like to think of the different types of privatization on a scale of how much control you give up,” said Mary Grant of Food & Water Watch. Both Baltimore City Councilor Bill Henry and In the Public Interest executive director Donald Cohen denied that the Pittsburgh Water and Sewer Authority’s $650 million debt prevents the authority from borrowing the money needed to fix the system. “‘That is categorically false,’ said Cohen. ‘Let’s say you use private capital…it may not show up as debt on your balance sheet as a city, but it is a debt to the citizens of this city. It is debt. They’ve got to pay it back.’”

29) Pennsylvania: Parents are circulating a petition opposing the Pocono Mountain School District’s plans to outsource student transportation services. “Parents have concerns about the proposal and wonder what it could mean for students and their long-time bus drivers. “According to a union representative, about 200 school bus drivers could lose their jobs. Many have given their life’s work to the district. From the first day of kindergarten through their current junior year, the same smiling bus driver has greeted the Palmer twins. ‘I can rest easy knowing that Ms. Annie’s on the job and the kids are going to get to and from school safely,’ says Jillian Palmer, mother. The twins’ mom, Jillian, worries their beloved bus driver’s job is in jeopardy. She adds, ‘this is something that could impact the entire community in a detrimental way I believe.’” A public hearing is set for Wednesday, November 14th at 6 pm.

30) Pennsylvania: The State College Area School District is suing a charter school to get its money back after the school abruptly closed. “After being open for almost 20 years Wonderland closed. Just three weeks before the current school year was set to begin, it left some parents scrambling to find a place for their kids. In addition to the nearly $50,000 officials say they might also collect assets and resources funded by taxpayer money.”

31)International/Think Tanks: The London-based Institute for Government has issued a report saying the British government needs to get a better grip on its IT outsourcing. “Government spent £277bn procuring goods, works and services from third parties in 2016/17, but we still know too little about what it is spending, with whom, to what effect.” They recommend creating a list of all government suppliers and a list of all public sector contracts. (“In order to work out the entire likely impact of the company’s collapse it had to ask Carillion itself about the extent of its contracts with the wider public sector.”) [Gaps in Government Data: Five Things the UK Government Should Publish, by Gavin Freeguard]

32) International: At the British Labour Party’s annual convention, widespread calls for ending the Thatcher era’s privatization drive and insourcing public services are made. “What’s long been a scam, is now a crisis,” says party leader Jeremy Corbyn. Deputy leader John McDonnell said if Labour comes to power they will engage in “a mass sacking of fat cat water bosses.”

33) International: Veolia, the French water and waste group, is to sell its 30% stake in Transdev to Germany’s Rethmann,Le Figarohasreported. Transdev North America is the largest private sector operator of multiple modes of transit in North America, including bus, rail, paratransit, shuttle, sedan and taxi services. They manage over 200 transportation contracts for cities, transit authorities and airports.

34) Think Tanks: Pew highlights America’s hidden corrections crisis in 11 charts. “Nationwide, 4.5 million people are on probation or parole—twice the incarcerated population, including those in state and federal prisons and local jails. The growth and size of the supervised population has undermined the ability of local and state community corrections agencies to carry out their basic responsibilities to provide the best public safety return on investment as well as a measure of accountability. Although research has identified effective supervision and treatment strategies, the system is too overloaded to implement them, so it sends large numbers of probationers and parolees back to prison for new crimes or for failure to follow the rules.”

35) Think Tanks/Ohio: The Greater Ohio Policy Center has issued a brief report showing how public money could be better used to improve the state’s transit systems, which have been starved into near-collapse by radical austerity programs. See GOPC’s Fueling Innovation in Transit: Potential Funding Options for Public Transit.

Legislative Issues

1) National: The popularity of red light camera systems—operated for profit by private companies but giving a slice of the proceeds to government—has gone into complete reverse, with state lawmakers now taking a hostile approach. “Several states have moved to get rid of the cameras or squelch their use in local communities as complaints pour in from drivers who think the cameras are there to reap revenue rather than prevent accidents. The use of cameras has never survived a referendum, according to the National Motorists Association, a consumer group. (…) Some New Jersey lawmakers, though, are pushing legislation that would take the fight further than ever before. The state ended its red-light camera program four years ago. Now, some Garden State lawmakers want to hamper other states’ red-light enforcement by prohibiting the state’s Motor Vehicle Commission from giving out identifying information on their residents to other states. That means if a New Jersey tag holder gets a ticket because of a speed or red-light camera in another state, New Jersey wouldn’t provide the name and address associated with the license plate.”