Weekly privatization report: Charter special ed failure in Louisiana | Water corporation takes big hit | 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.

THIS WEEK’S HIGHLIGHTS

  • Louisiana officials are recommending to closea charter school amid allegations of financial mismanagement and a failure to provide proper special education services to the roughly 40 percent of enrolled students with disabilities.
  • Moody’s has downgraded the credit ratingof American Water, a leading private operator of municipal water and wastewater systems.
  • The Des Moines Register editorial board takes aimat Iowa’s privatized Medicaid program after one of the for-profit insurers says its pulling out of the program.

EDUCATION

1) California: After nearly a decade of legal battles, Bullis Charter and Los Altos school district have struck a deal “to give the charter school its own facility and relocate hundreds of Egan Junior High students who have shared the same campus to a brand new facility elsewhere in about four years.” Jessica Speiser, president of the school board, “on Friday called Bullis’ growing student enrollment an ‘existential threat to the district,’ but added that the tentative agreement was a better option than the direction both sides were heading toward under the Prop. 39 negotiating process last year.”

2) California: NPR interviewed Anna Phillips, author of an informative Los Angeles Times article on the prospects for charter school authorization reform in Sacramento. “She’s been investigating loopholes in California’s charter school system. What she discovered is a fragmented and decentralized regulating system. In Los Angeles, Phillips encountered a case in which a wealthy Beverly Hills couple made millions of dollars by simply turning to a different school district whenever their charter schools came under scrutiny.” [Audio, 4 minutes]

3) Connecticut: Longtime charter school supporters, billionaire investor Ray Dalio and his wife, are donating $100 million to help low-income schools in Connecticut. “It’s part of what the state hopes will be a $300 million public private partnership,” WNPR reports. “Connecticut’s schools have the largest achievement gap in the nation, and Governor Ned Lamont is hoping to make an impact with this investment. He said the state itself will raise $100 million to match the Dalios’ donation, and they’ll be looking for $100 million more in private funds.”

4) Florida: Custodians and labor activistsprotested last week outside the Hillsborough school board to protest plans to outsource custodial jobs. “The Hillsborough School Employee Federation represents most of the non-teaching workers within the district, which includes the security officers, bus drivers, maintenance workers, student nutrition workers and obviously, custodians. Stephanie MacNeel, a school bus driver and HSEF Vice President, says that ‘[privatization] is not just going to have an effect on us, as far as the union is concerned, but it is going to have an effect on the entire community.’”

5) Louisiana: After a media investigation, a New Orleans charter school has placed its CEO on paid leave “pending the outcome of an independent investigation into allegations of grade inflation and falsifying public documents related to a bus contract.” Blouin-Williams “has also been accused of doctoring board meeting minutes to falsely reflect that the board approved a lucrative contract with the Scholars First bus company. WWLTV’s David Hammer approached Blouin-Williams about the allegations but she wouldn’t answer questions.”

6) Louisiana: State officials “are recommending the closure of Smothers Academy Preparatory School, an F-rated charter school in Jefferson Parish, amid allegations of financial mismanagement and a failure to properly serve disabled students. (…) The state said Saturday that the school failed to provide proper special education services to the roughly 40 percent of enrolled students with disabilities.”

7) NevadaCharter school supporters and education unions are clashing over a bill to tighten up oversight of the state’s charter schools. “Bill supporters with politically powerful teachers unions said those charters now amount to a ‘separate and unequal’ school system that’s home to a wealthier, whiter student population. They sent no fewer than four representatives to argue that the state needed to press pause on new charters to ensure they’re being held to the same standards as traditional public schools. ‘You have to admit there’s a problem here,’ said Ruben Murillo, president of the Nevada State Education Association. ‘I’m a little surprised at the opposition to pausing, to fixing a system that’s broken. … The charter school authority doesn’t seem to have the power to fix what’s broken.’”

8) New Jersey: Following Abbott Koloff and Jean Rimbach’s blockbuster investigative series for NorthJersey.com and the USA Today Network New Jersey, “Cashing in on Charter Schools,” the Asbury Park press is calling on Gov. Murphy (D) and his administration “to probe this question: How do private companies leverage taxpayer dollars to operate New Jersey’s charter schools?” The editors “demand that the following questions be addressed—in a pending review of charter schools from the Murphy administration, from inquiries we call on the Legislature to make, and by leaders in the state Department of Education.”

9) Pennsylvania: Instructional aides from the Carlisle Area School District rallied on Friday evening to protest a proposal to outsource their jobs

10) PennsylvaniaCyber charter schools are eating up the Carbondale Area School District’s budget. “As cyber charter school enrollment grew over the last decade, Carbondale Area School District’s budget reserves disappeared. Now operating with a $2.5 million deficit, the district started its own cyber program last year, joining a growing number of districts trying to find relief. The 37 school districts in Northeast Pennsylvania pay a combined $42 million in cyber charter school tuition each year. The total amount paid—and the way the state determines tuition—has many people calling for reform.”

11) Pennsylvania: The Ellwood City Area School Board is considering outsourcing its food service. “Cafeteria operations has been a touchy subject in the district for the last two years because of fears the board might outsource the service and eliminate current cafeteria workers. The board declined to change the workers’ situations previously, but kept the option open because the costs are so high there. In the most recent cafeteria report, it was operating at a $77,487 deficit for the school year.” 

12) South Carolina: The Charleston County School District continues to have major problems with its outsourced bus service. “According to documents from CCSD, there have been nearly 3,000 bus related complaints formally submitted to the Charleston County School District during the 2018-19 school year. CCSD pays Durham School Services nearly $900,000 a year to run the majority of its buses. ‘It’s just extremely frustrating,’ CCSD parent Christina McCarthy said. ‘Consecutively late, not showing up at all.’ Over the span of two weeks in February, parents formally complained more than a hundred times to the CCSD transportation department.” live5news reports that “CCSD is holding back 10% of pay from Durham because of those issues. The district recently started a second contract with Coastal Bus Line to manage a few routes.”

13) Texas: A Houston charter school superintendent and employee have been accused of stealing $250,000. “According to the indictment, Garza awarded a no-bid contract in 2014 to a group called Hot Rod Systems to build an IT building at the new school, even though construction on the school had not started. The indictment states Hot Rod Systems was owned by Bokaiyan, who then wired some of that money into Garza’s personal account. Authorities said some of the money was used toward a new car and condominium.”

14) TexasThe Houston school board is renewing several charter school contracts despite questionable finances. “Three of those charters — Energized for Excellence, Energized for STEM and Inspired for Excellence Academy, Inc. — received extra scrutiny because of their finances. Trustees questioned why some of them had loaned the founder Lois Bullock’s for-profit company millions of dollars and paid excessive salaries to leadership. ‘The liabilities exceed the assets of this organization by a couple million dollars, and the auditor says there’s a going concern,’ said Trustee Anne Sung, questioning the financials of Inspired for Excellence Academy.”

15) International/National: Lisa Mastrobuono (@ETFOcb), coordinator of collective bargaining services for the Elementary Teachers’ Federation of Ontario, says “Canada’s public school systems rank 6th in the WORLD in math, science, reading. The USA – land of privatization, charter schools & union busting – is 31st. The only thing Americans have to teach us is how to do education wrong.”

INFRASTRUCTURE

16) National/Puerto Rico: Tom Sanzillo, the director of finance for Institute for Energy Economics and Financial Analysis, explains why he will tell a Congressional committee this week that privatizing Puerto Rico’s electrical system will fail. “Privatization will create incentives to maintain those expensive contracts while setting up barriers to residents generating their own power through rooftop solar or other local options. This goes directly against Puerto Rico’s ambitious energy bill that was passed by the legislature and signed into law by the governor last month. The law governing privatization creates a non-transparent process with little role for Puerto Rico’s energy regulator and little clarity on the long-term monitoring and accountability of the contracts. In other words, it enables precisely the same sort of expensive and politically-driven contracts that have plagued PREPA’s operations in the past and contributed to its current bankruptcy. Such contracts include a billion-dollar oil contracting scandal, over-priced renewable energy contracts, excessive fees for financial consultants, and the award of a major grid contract to the politically-connected but not-up-to-task Whitefish firm.”

17) National: Adie Tomer and Lara Fishbane of the Brookings Metropolitan Policy Program say political gridlock is blocking infrastructure progress. “Infrastructure talks are heating up again. In just the last week, 2020 presidential candidate Amy Klobuchar pitched a trillion-dollar infrastructure proposal while the Trump administration and Congress continue to flirt with major infrastructure packages. This kind of thinking reflects clear public support for greater investment. While these concepts and conversations suggest bipartisanship could deliver infrastructure reform, the current state of national politics delivers anything but an infrastructure boost. Put bluntly, when political discord leads to infrastructure failure, it doesn’t just deepen our distrust of government—it also takes our economy down with it.”

18) NationalMoody’s has downgraded the credit rating of American Water, a leading private operator of municipal water and wastewater systems. They cited “capital spending amid the federal tax reform’s negative impact on free cash flow.” Ryan Wobbrock, vice president and senior credit officer at Moody’s, said in a statement that “American Water’s financial profile is declining due to debt-funded capital spending and growing shareholder dividends amidst near-term cash flow pressures from tax reform.” [Sub required]

19) ConnecticutFellow Democrats have killed off Gov. Lamont’s proposal to loosen regulations on ‘public-private partnerships.’ “Sen. Mae Flexer, D-Killingly, and co-chairwoman of the government administration and elections committee, said unions and others, particularly Democrats, criticized the legislation for bypassing the State Contracting Standards Board. ‘I think it’s unfair to dismiss the concerns of labor in that they were advocating for good government, transparency and how these arrangements are set up and how public money is spent,’ she said. Sal Luciano, president of the Connecticut AFL-CIO labor federation, said in a statement that the committee protected the state’s ‘clean contracting laws.’”

20) Maryland: Opponents of plans by Gov. Larry Hogan (R) to create a massive $9 billion ‘public-private partnership’ to expand and toll heavily congested I-270 and I-495 are pushing for more legislative scrutiny and public input. “Opponents say the Hogan administration is moving too quickly and ignoring local concerns about a project that many residents don’t want and fear could destroy homes and businesses if the highways have to be widened to accommodate up to four new lanes each. Many criticized the state for rejecting transit options that they say would get more people out of their cars. They say Maryland law regulating public-private partnerships should allow for more General Assembly oversight of such proposals and permit the public to view their potential impacts before the state begins to forge partnerships with profit-driven companies. The bill ‘restores practical commonsense oversight to a project that many here feel is getting out of control,’ the bill’s sponsor, Del. Jared Solomon (D-Montgomery), said at a gathering of opponents before the Senate hearing.” [HB1091/SB0488, the P3 Transportation Safeguards ACT]. 

WAMU reports that “multiple bills were introduced by lawmakers to halt Gov. Hogan’s plan to widen I-270 and I-495, but only one comprehensive bill would slow down the expansion.” District 20 State Delegate Jheanelle Wilkins says HB1091 “provides commonsense oversight of Maryland’s Public Private Partnership projects.” The legislature adjourns tomorrow.

There will be eight public meetings this month and next in Montgomery County and Prince George’s counties on Maryland’s plans to widen 495 and 270.

21) Maryland: Prince George’s County will be holding an industry day on April 17 “for those interested in submitting proposals to participate in the public-private partnership (P3) school construction process.” NCPPP, the P3 industry’s promotional association, says companies may “explore opportunities to team up on projects during the event.”

22) New Jersey: Concerns have been raised at the first of several public hearing on a proposed ‘public-private partnership’ for Suez to operate and maintain Edison’s water and wastewater system. “Ahead of the public hearing, Junior Romero, central New Jersey organizer of Food and Water Watch, presented concerns of risks of rate increases, hidden surcharges, broken promises and lack of control at two meetings held in the township. Romero, at the meetings he held, provided examples of case studies his organization conducted in Bayonne and Middletown, Pennsylvania. Both municipalities entered long-term agreements with Suez and saw surcharges and rate increases. Many residents including Romero raised the same concerns at the public hearing.” 

23) Pennsylvania: The Department of Transportation is accepting proposals for ‘public-private partnerships’ for road, bridge, rail, aviation, and port construction projects through the end of this month.

24) Rhode Island: Providence Mayor Jorge Elorza acknowledges a lack of support to sell off the city’s water supply, and has asked the legislative delegation to withdraw the bill. He will seek other ways to solve pension shortfall.

25) International: Alicja Siekierska of Yahoo Finance has come up with a candidate for the worst road privatization deal ever. “The 407 is worth $30B today—Ontario sold it for $3.1B in 1998.”

26) InternationalKPMG is rubbing its hands over privatization fever in Brazil. “Initiatives are currently underway to reorganize and streamline the previously scattered infrastructure procurement process for much higher efficiency and participation—including enhanced governance concerning approval and tendering of projects and efforts to minimize or combine the number of authorities and ministries involved.”

CRIMINAL JUSTICE AND IMMIGRATION

27) National: “When I first started to write this, I was crying. I was flying back from Dilley, Texas, the site of the largest family-detention center in the United States.” A must read from veteran activist attorney Martin Garbus in The Nation. “The detention center in Dilley is run by CoreCivic, a company that contributed $250,000 to President Trump’s inauguration. Another owner of detention centers, the GEO Group, gave $225,000 to a Trump PAC before the election and an additional $250,000 to his inauguration. CoreCivic, a flourishing business, has a $1 billion contract with the DHS. Frequently lost in all the talk about detention centers is the enormous profit that goes to these corporate Trump supporters, who benefit from jailing immigrant mothers and children. Unlike the Dilley facility, many of the other detention centers they operate were never originally intended to house people; one had been an enormous Walmart. South West Key, another owner of detention centers in Texas, has received more than $1.3 billion in federal grants and contracts in the past eight years. Follow the money: The more immigrants that Trump stacks up at the border, the more need there will be for big detention centers. There is no reason for these immigrants to be held in such facilities other than racism and the profit of the detention-center owners and investors.”

28) National: Lawmakers will again attempt to visit a Florida detention center this morning, after having been previously turned away. The Homestead Temporary Shelter for Unaccompanied Children is currently being run by Comprehensive Health Services, Inc. (CHSi).

29) National/California: Writing in Capital & Main, Robin Urevich poses the question “Will Adelanto Officials Reform a Brutal Detention Center—Or Just Make It Bigger?” “The city’s decision to sever ties with ICE is not, however, the immigrant rights victory it might appear. Adelanto’s move may actually allow the GEO Group, which owns and operates the detention center, to expand its operations. State law forbids California cities from increasing detention space under their existing ICE agreements. But if ICE contracts directly with a private detention company like GEO, there is no such constraint.”

30) National: Bloomberg opinion columnist Noah Smith says U.S. private prisons are a failed government experiment. “There are many examples of this. No-bid contracting in the health-care, defense and infrastructure industries drives up costs. Expensive mercenary contractors like Blackwater (now Academi) were notorious for human rights abuses during the Iraq War. But perhaps the most egregious example is private prisons. Implementing criminal justice is one of the most critical, central functions of a state. Prison privatization turns this function over to contractors with comparatively little accountability. That opens the door for both cost overruns and mistreating inmates.”

31) National: CoreCivic, one of the nation’s largest for-profit prison companies, has released its proxy statement covering the year 2018. Damon T. Hininger, president and CEO, was paid total compensation of  $4,117,669. His compensation over the past three years was  $9,592,524. Compensation of the top five officers, including Hininger, was  $11,855,897 in 2018 (total of comp figures p. 47). Over the past three years, the officers were paid $26,363,688. Bloomberg recently reported that CoreCivic “again has failed to convince a federal judge that it can’t be sued for requiring immigrant detainees to work at the facility for $1 a day.”

32) National: The GEO Group announces it will hold its conference call and simultaneous webcast at 11:00 AM (Eastern Time) on Tuesday, April 30, 2019. The 2019 annual shareholders meeting will be held virtually, conducted via live audio webcast on Tuesday, May 7, 2019, at 10:00 A.M. (EDT).

33) National: The Center for American Progress has released an issue brief recommending steps to take “to upend the infrastructure created by the Violent Crime Control and Law Enforcement Act of 1994, also known as the crime bill.” Their recommendations: No blank checks on federal funding for public safety;No easy path to new criminal justice penalties; No new jails or prisons; and No privatization. “Congress must immediately end the use of private corporations in the criminal justice system. America’s two largest private prison companies amass more than $3 billion in revenue per year, roughly half of which comes from the federal government, not to mention the enlarged role of private companies in pre- and post-conviction supervision. By severing the link between criminalization and profit, lawmakers can accelerate efforts to drastically reduce overall incarceration and supervision rates.”

34) National: Adam Johnson of The Appeal interviews Hannah Sassaman and Matt Henry to discuss technology and the movement to end cash bail. “The movement to end cash bail, a system that’s broadly seen now as racist and anti poor, has become more and more mainstream. But with this mainstream appeal comes to the next logical question: what replaces the system? Filling that void increasingly is what’s generally called ‘risk assessment,’ a catch all term to describe a host of tools, typically algorithms designed to predict an arrestees likelihood of missing a court date or fleeing prosecution.” They discuss this “notoriously fraught topic” and “break down racial disparities, misconceptions and the overall risk of risk assessment.” [Audio, about 45 minutes]

35) National: Worth Rises claims “a major victory in the battle for prison phone justice” as “industry behemoth Securus pulled out of its agreement to purchase ICSolutions.” Executive Director Bianca Tylek says “this win gets us closer to stopping them.”

36) InternationalUnions in Britain are calling for public control over private prisons following scandals involving G4S. “For the Prison Officers’ Association, the return of Birmingham to the public sector was welcome. ‘We have campaigned tirelessly since it was wrongly privatised in 2011 to have it returned to the state,’ POA chair Mark Fairhurst said. ‘The more recent events enabled us to pressurize the government into making what is undoubtedly the correct decision for staff, prisoners and the taxpayer.’ But Fairhurst said other private prisons must follow suit. ‘The obsession this Tory government has to outsource and privatise public sector work must cease. It is obvious that when you put profits above safety you sow the seeds of disorder, mismanagement, cover ups and misery.’”

PUBLIC SERVICES

37) CaliforniaA plan by Monterey County to outsource its ambulance service is drawing fire. “Among their complaints: the ambulance request for proposals was adopted without additional public input; the proposal would “significantly” reduce ambulance response times, especially in some rural areas of the county where an ambulance would no longer have to respond within a specific time frame — typically 12-16 minutes — but would be allowed to respond “as soon as possible.” It could potentially prevent firefighter paramedics from being dispatched to medical emergencies by shifting dispatch authority and prohibiting the ambulance provider from requesting assistance from other emergency responders, it would allow ambulances staffed by less-skilled emergency medical technicians rather than paramedics to respond to emergencies, and would allow the ambulance provider to charge fees even when no transport is needed, among others. Monterey County Regional Fire’s law firm in a Jan. 30 letter simply threatened to sue the county over violating the district’s rights and for approving the ambulance request for proposals without public input.” 

38) Iowa: The Des Moines Register editorial board says that “unless Iowa’s Medicaid program is returned to state management, the state will continue to be held hostage by private insurance companies that can abruptly depart at any time.” They report that  “now UnitedHealthcare, one of the for-profit insurers selected to manage Medicaid, is pulling out of the program. [Gov.] Reynolds said the insurer’s contract demands were ‘unreasonable and unsustainable.’ The entire privatization of Medicaid is unreasonable and unsustainable—as evidenced by the abrupt departure of two out of four participating private insurers.” 

39) Michigan: A private waste company failure has left Orion residents sitting in mountains of trash. That’s not their only problem. Many have discovered that the public has lost control by outsourcing the service. The company has “chosen not to respond to many of the people that have been seeking refunds. So as much as people want us to try to assist in that process, we really don’t have any leverage with them,” said Township Supervisor Chris Barnett. 

OTHER

40) National: After a two year investigation, USA Today, the Arizona Republic, and the Center for Public Integrity have released their findings of the extent to which special interests have infiltrated state legislatures using model legislation. “‘There’s real … hypocrisy in many of these so-called conservative legislators trying to rip away local control when they preached for years that a government that’s closest to you … is most responsive to you,’ said Dawn Penich-Thacker, who campaigned to overturn Arizona’s school-voucher expansion with a public vote. Penich-Thacker saw a similar disregard for the will of voters when within hours of Arizonans’ vote to overturn universal school vouchers, the Goldwater Institute and American Federation Children declared they would continue to feed their model proposals to state lawmakers. Bills to modify Arizona’s voucher program were soon introduced. One bore a striking resemblance to model legislation from the Heartland Institute, granting vouchers to any parent who feels their child is unsafe or being bullied at school.” 

41) National: In an excerpt from his forthcoming book (co-authored with Jeffrey St. Clair), Joshua Frank writes about The Privatization of Wildlife: How Ted Turner Scored Yellowstone Bison. “‘By removing these bison from Yellowstone, holding them on private lands where the public is not allowed to see them, and selling their offspring to a private corporation, the State of Montana is in clear violation of its public trust responsibilities,’ says Joe Gutkoski, a representative of the Yellowstone Buffalo Foundation, ‘How did the promise of wild buffalo in Yellowstone National Park for the enjoyment of future generations become ranched buffalo fenced behind PRIVATE, NO TRESPASSING signs?’” 

42) NationalThe first lawsuit stemming from the Ethiopian Airlines crash “was filed in Chicago on Thursday by the family of a 24-year-old American woman killed in the disaster, who is the great niece of consumer advocate icon Ralph Nader.” Nader said “if we don’t get this right, if we don’t end the cozy relationship between the patsy FAA, the captured agency, which has been documented for years, and the Boeing company, 5,000 of these fatally flawed planes will be in the air all over the world with millions of passengers. An aircraft manufacturer, no matter what its past safety record, is not allowed two or more free disasters that are due to engineering misdesign of the Boeing 737 Max.”

43) California: Tomás Herrera-Mishler, CEO and President of the Balboa Park Conservancy (and a landscape architect), is pushing for a maintenance ‘public-private partnership’ for San Diego’s Balboa Park, and points to New York’s Central Park. But as Alex Ulam pointed out a while ago, “Central Park is only the most prominent example of a troubling trend. With city budgets being slashed across the country, many municipal parks agencies have become charity cases, overly dependent upon support from conservancies and ‘Friends’ groups in order to fulfill their missions. As a result, some of the most glaring inequities in the United States are becoming manifest in the way our public spaces are designed, maintained, and regulated.”

44) Illinois: Are dramatic changes on the way with regard to privatization as a result of the Chicago elections last Tuesday? Newly elected Mayor Lori Lightfoot was a partner at the law firm Mayer Brown, which worked on the Skyway and parking garage deals but not on parking meter deal. 

Writing in the Washington Post, Chicago-based In These Times’ journalist Miles Kampf-Lassin points to the election of new city council members as highly significant. “While national headlines have understandably pointed to the election of Lori Lightfoot as the first black female mayor in Chicago history, the runoff elections saw another development that will transform the city’s political landscape: the victory of a bloc of democratic socialist city council members. At least three open democratic socialists, Byron Sigcho-Lopez, Jeanette Taylor and Andre Vazquez, won their elections. Another, Rossana Rodríguez-Sánchez, is in first place in her race, though votes are still being counted. All of these candidates were endorsed by the Democratic Socialists of America (DSA) and are set to join two other democratic socialists—Carlos Ramirez-Rosa and Daniel La Spat —elected to the city council during the first round of voting in February. This is no small feat. (…) Save for a few lone voices in the city’s liberal caucus, Emanuel’s policies of privatization, giveaways to big businesses, tax increases on working families, cuts to public education, regressive fines and fees and a bulging budget for a scandal-embroiled police department have sailed through city council with little opposition. With Emanuel on his way out, and Lightfoot on her way in, all that is set to change.” Jacobin sees “a socialist wave in Chicago.” 

Paul Street, a former research director of The Chicago Urban League, agrees that the election of the new left members of the city council is “the most interesting and genuinely progressive development” of the elections, but says “nothing good and progressive is going to happen without the sort of people’s street heat that brought Jason Van Dyke to trial and convinced the neoliberal racist-corporatist Rahm Emanuel to call it a mayoral career at two terms.”

45) Iowa: The University of Iowa has delayed putting out a request for qualifications for a ‘public-private partnership’ to operate its utility system. “UI officials previously said they would aim to complete that process by early June, though it is unclear how this delay may set back that timeline.”