Weekly privatization report: From immigrant detention to charter schools | What privatization really is | 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

  • A nonprofit that’s been awarded almost $1.8 billion in federal money to run shelters for undocumented immigrants is also in the businessof charter schools.
  • Privatization is, above all else, an attack on democracy.
  • Massive sports stadium deals, such as the $4.9 billion Los Angeles Stadium for the Rams and Chargers, can drive gentrificationby causing rents and real estate prices to soar out of reach.

EDUCATION

1) National: The New York Times has run an in-depth investigative piece on the charter school operations of Southwest Key, the troubled charity that “has been awarded almost $1.8 billion to run migrant shelters over the last decade, but is now under federal investigation for possible financial improprieties.” The reporting, by Kim Barker, Nicholas Kulish, Rebecca R. Ruiz, and David Montgomery, with research by Susan C. Beachy, reveals that “the operations of the charter schools, serving about 1,000 students, show how Southwest Key profits off public money, boosting compensation for charity leaders and stockpiling tens of millions of dollars.” 

2) National: Writing in In These Times, In the Public Interest’s Jeremy Mohler focuses on how outsourcing takes decision making power away from the public. Charter schools are “managed by private boards of unelected members who get to decide how to spend public money with little to no accountability to parents, teachers and voters. Charter schools are, in a word, undemocratic.” But this extends to all forms of privatization of public services and assets. “The through line is an attack on democracy. Yes, privatization is a corporate cash grab as well as a convenient way for politicians to dodge accountability and distract us from demanding higher taxes on corporations and the wealthy. But most of all, it takes decision-making power from the public and puts it into the hands of corporations.”

3) National: The National Labor Relations Board has extended until April 3 the deadline for parties to file responsive briefs in the case of whether the NLRB should exercise its discretion to decline jurisdiction over charter schools as a class. Interested amici have until this Wednesday, March 20, to file amicus briefs. [see note on KIPP Academy Charter School, 02-RD-191760]

4) National: Nancy Flanagan, “a retired music teacher living her personal lakeside dream in Cedar, Michigan,” says “Education Reformers Keep Pushing the Same Old Stuff.”  

5) National: Does the college admissions cheating scandal offer any lessons for the debate over school privatization? Steven Singer of Gadfly on the Wall says it does. “Few notice how the equity built into authentic public schools gets left behind by those enrolling in privatized alternatives. No more open meetings. No more elected school boards. No more public comment or even a voice in how the money is spent. So long as there are two Americas, the fear of being in the wrong one will motivate the privileged to cheat and steal their way to the top. They will horde resources and wealth for themselves and their children while denying it to others. It is a self-perpetuating system—a loop that we’re all caught in.”

6) National: A District of Columbia public school has won a novel ‘public-private partnership’ tax case involving an agreement by an apartment developer to pick up payments on its PILOT bonds. “The IRS began an audit in February 2016 of the remaining $8.73 million in bonds that were still outstanding, according to a public event notice the District of Columbia filed in April of that year. Shortly before that announcement, Mark Scott, former head of the IRS Tax Exempt Bond office who has a private practice focused on representing whistleblowers, tweeted that the Oyster School P3 ‘is a tax scam … that cost district residents millions in tax dollars.’ At that time, Scott told The Bond Buyer that the transaction was a ‘PPP disaster’ and asked whether this is the kind of project Mayor Muriel Bowser’s new P3 office wanted to support.” Scott said “he intends to file a Freedom of Information Act request that will include the IRS Office of Appeals decision. ‘I’ll know eventually what happened,’ Scott said. He said the D.C. Court of Appeals recently ruled in his client’s favor in another FOIA request involving the Oyster School P3 in which a lower district court had issued a summary judgment in favor of the IRS.” [Sub required]

7) California: Pro Public Ed reports that “At the CA State Capitol, California Charter Schools Association (CCSA) bused in hundreds of students for an astroturf effort to promote and perpetuate the privatization movement- at the expense of a student school day.”

8) District of Columbia@EmpowerEdDC says “In our democracy we believe in a simple principle: Institutions that serve the public should be open & transparent. Engaging w/ community is not a burden but a privilege. We urge @cmdgrosso & @ChmnMendelson to schedule a hearing on @CMCharlesAllen’s Public School Transparency Act.” On April 4 EmpowerEd will be having a benefit to support their work giving DC teachers a voice.

9) District of Columbia: National Collegiate Prep is fighting against its closure by the D.C. Public Charter School Board. “The PCSB has closed 26 charter organizations or campuses/programs across the city between 2012 and 2018—primarily for academic reasons.

10) Florida: Tallahassee Democrat columnist and former 10-year state senator Paula Dockery takes aim at a newly introduced school vouchers bill. “The Florida Legislature is at it again. Another legislative session starts with a push to expand the use of vouchers for students to attend private, religious and for-profit schools,” Dockery writes. “Does the state have so much money that it can fully fund our public education system, meet our other needs and then throw some money at those wanting to send their children to private schools using tax dollars? The answer is no. (…) There is big money involved. Last year’s K-12 education budget for 2.6 million students was $14.7 billion. Proponents could be primarily focused on diverting money to private interests by outsourcing a government service in order to turn a profit. Their objective also could be to control the curriculum to incorporate their religious and political beliefs. Legislators often try and fail to force these religious and social beliefs into our public schools. Little by little further efforts are made to remove students and the education dollars that follow them from our public schools. What’s the end game? Some fear it is to do away with public schools through total privatization for profit and control. We can’t let that happen.”

11) IllinoisParents and teachers are fleeing Chicago Virtual Charter School over questionable spending and other issues. “Parent after parent at CVCS told similar stories about their child falling behind in school, because of delays in getting educational materials. This school year was supposed to focus on fixing things at CVCS, because it was already on academic probation. Administrators said part of their planned solution was to ‘restructure academic programming’ by changing curriculum vendors. Instead, teachers said the swap left them scrambling, and students without their coursework.”

12) Indiana: Jenny Robinson, chair of the Indiana Coalition for Public Education of Monroe County, says charter schools weaken the state’s commitment to students. “Charter schools’ lesser mission, minimal oversight, lack of transparency and reduced requirements for teacher certification represent an erosion of protections for children and taxpayers. The most basic difference from the public school system is frequently skipped over. Charter schools do not have a responsibility to serve all children in a community. (…) Indiana owes its citizens truly public schools. Publicness has to do with the responsibility to provide all children an equitable, well-rounded education that reflects state standards and local aspirations. It involves legal mandates, transparency and community voice. Schools that answer to our communities are good for our communities and essential to our democracy.”

13) IowaA funny/not funny public service ad by Iowans for Public Education on Education Savings Accounts, i.e. vouchers.

14) Missouri: A St. Louis charter school will close at the end of the school year. “The closure follows an investigation into falsified attendance records and a resulting drop in state funding. The school has some of the lowest test scores among St. Louis charter schools, with 24 percent of students proficient or advanced in English and 15 percent in math.” The St. Louis Post-Dispatch reports that “About half of the 30-plus charter schools that have opened in St. Louis since 2000 have been shut down for academic or financial failure.”

15) New York: Appearing at a packed town hall organized by the Jackson Heights People for Public Schools along with education historian Diane RavitchRep. Alexandria Ocasio-Cortez (D-NY) says “I saw that instead of being incentivized to go an hour north to a public school somewhere else, now we are being incentivized to enroll into a charter school. We should never feel that way about our public schools. The moment we start feeling that way is when we should start fighting to improve them.”

16) Pennsylvania: School aides in Carlisle are concerned that outsourcing would open students to greater instability. The Sentinel has a detailed profile of what three of them they do, and how important their work is to students and to them. “Chaney said that as an aide, she is like a second mom to some students. Many aides have told the school board that students are more likely to confide in them than their teachers. The aides received word of the outsourcing proposal in an email sent at 2:30 p.m. on a Friday, Chaney said. For her, it was like a slap on the face that the district would even consider replacing all the aides. ‘We felt so undervalued and underappreciated,’ Chaney said. ‘We are not in it for the money.’”

INFRASTRUCTURE

17) National: Danielle McLean of Think Progress explains how Trump’s HUD wants to expand a flawed program that is privatizing public housing. “In a RAD ‘conversion,’ public housing authorities turn over low-income housing to private developers, who receive private activity bonds or low-income housing tax credits to repair or rebuild dilapidated housing. Once construction is complete, the developers own and sometimes even manage the former public housing properties. The law requires the new owners to keep each renovated unit affordable, both for existing and future tenants. That doesn’t always happen.” A ThinkProgress investigation “shows that HUD is attempting to dramatically expand this federal program that privatizes dilapidated public housing without providing enough oversight to ensure that the very people it is supposed to help—low-income tenants—are protected.”

18) California/National: Brian Addison of the Long Beach Post has taken a deep look at how massive stadium deals, such as the $4.9 billion Los Angeles Stadium for the Rams and Chargers, can drive gentrification by causing rents and real estate prices to soar out of reach

19) Connecticut: Under budgetary pressure, some lawmakers are coming up with new proposals for a toll-fed infrastructure bank to fuel road ‘public-private partnerships.’ Gov. Ned Lamont “projected tolls would generate $800 million to $1 billion annually, starting in 2023. ‘We would be able to borrow against that; we’d be able to put together public-private partnerships. We’d be able to leverage the money coming out of Washington, D.C.’” [Sub required]

20) Florida: Miami-Dade County may be looking for a ‘public-private partnership’ deal to build an elevated fixed guideway transit system along Northwest 27th Avenue. “A resolution by Commissioners Barbara Jordan and Esteban Bovo Jr. that was to be heard in county committee this week would ask Mayor Carlos Giménez to report within 60 days how to best design, build, finance and operate the system and, if appropriate, bring commissioners a resolution recommending any or all of the project be treated as eligible for a public-private partnership, putting the procedure to cut a deal in motion.”

21) Illinois: The Chicago City Council has approved an $850 million borrowing authorization covering local projects, facilities repairs and much else. The city intends to go to the bond market for about $800 million later this month, the first general obligation bond offering in more than two years. The budget includes “$171 million for a smart lighting program that was originally to have been financed though a public-private partnership.” [Sub required]

22) PennsylvaniaAnother delay hits the multiple Rapid Bridge Replacement ‘public-private partnership’ deal Pennsylvania DOT has with Plenary Walsh. “Construction began in April and initially was slated to wrap up in January. But winter weather has set back expected completion—first, to mid-February, and now, to late April or early May, according to project spokesman Rory McGlasson.”

23) International/Think tanks: So-called ‘public-private partnerships’ are undergoing a major rethinking in Canada’s British Columbia, which once pioneered the infrastructure delivery method in North America. Among the changes is a renewed emphasis on Community Benefit Agreements (CBAs) and tightening up procurement processes to eliminate conflicts of interest. The main procurement vehicle, Partnerships BC (PBC), which was once touted as a model by the privatization industry, sees its days numbered, saysChris Gardner, president of the Independent Contractors and Businesses Association of B.C. The province “is sending more dollars into labor and training as outlined in its CBA.” Columbia Institute public policy analyst Keith Reynolds, who wrote a critical report update in mid-2018 on P3s, “believes PBC should be dissolved because of the conflict of interest that exists with the crown corporation advising ministries on whether a project should be a P3.” Reynolds’ report is Public-Private Partnerships in British Columbia: Update 2018.

24) International: The Financial Times reports that with the Private Financing Schemes in tatters, British Chancellor Philip Hammond has launched a consultation into new ways to finance Britain’s infrastructure. “Britain has an infrastructure pipeline of projects worth about £600bn and Mr. Hammond said last year that half of this would be financed by the private sector. The original PFI contracts were introduced by the Tories in the 1990s but significantly expanded under Tony Blair’s Labour government. Under the system, private companies took on the risk of delivering projects in return for state payments over many decades. Former chancellor George Osborne announced a major overhaul of the scheme in 2012, establishing a new system called PF2, but it has only been used on six projects accounting for under 0.5 per cent of public investment over the period. (…) Mr. Hammond’s decision to axe PF2 last year came just months after the collapse of Carillion, an outsourcing company that ran several public-private partnerships.” [Sub required]

25) International: From the Philippines, a report from Water for the People Network says “since privatization began in 1997, Manila Water increased its water rates by 879%, and Maynilad by 574%.”

CRIMINAL JUSTICE & IMMIGRATION

26) National: In a deeply researched piece, Katherine Hawkins of the Project on Government Oversight has warned about the role of outsourced oversight at immigration detention facilities. “The spat between the Department of Homeland Security’s inspector general and the Nakamoto Group over Adelanto epitomizes the debate over oversight of the immigration detention system at a time when DHS is locking up a record number of people for violating immigration laws. At stake are the health and safety of over 50,000 people kept in detention on an average day.”

27) National: President Trump’s proposed budget provides “an additional $350 million ‘for prison and detention program enhancements.’ The Bureau of Prisons itself would get a slight budget decrease under the White House proposal, even though federal prisons are 19 percent over capacity. Although these numbers may sound high, they actually are only a small fraction of the overall Justice Department annual budget of $30 billion, major components of which fund ongoing operations of the FBI, the Bureau of Prisons, and lawyers who handle a wide array of prosecutions and civil litigation.” 

28) National: The Trump administration is discussing a plan to phase out family detention at the GEO Group owned and operated Karnes County Residential Center in Texas, the Washington Post reports. “ICE would instead use the Karnes facility to house easier-to-deport single adults, according to the officials, who spoke on the condition of anonymity to discuss plans that have not been finalized. The Karnes facility is one of two large family ‘residential centers’ ICE operates in South Texas, with a current detainee population of 528 adults and children. Families held there would be issued notices to appear in immigration court and would then be released into the U.S. interior, according to two officials with knowledge of the discussions. (…) Because U.S. federal courts have limited the amount of time children can be held in immigration jails to 20 days, the families often are released into the U.S. interior anyway, sometimes with GPS ankle monitoring bracelets that allow ICE to track their whereabouts.”

29) National: Fortune reports that “JPMorgan’s retreat from the private prison sector reflects the extent to which environmental, social, and governance (known as “ESG”) criteria have embedded themselves in the thinking of the financial services world. Wall Street is coming to terms with the shifting values of investors and shareholders alike when it comes to topics like climate change and human rights, and it’s having an impact on the way they do business.” But, “the same cannot be said for industries like fossil fuels, which many banks have shown to consider too profitable to sacrifice in favor of ESG values.”

30) National: Writing in the San Antonio current, Sanford Nowlin provides an overview of how the immigration detention for profit system works. “People should be asking why we’re spending so much tax money to have private companies lock up people who aren’t dangerous,” said Lauren-Brooke Eisen, a senior fellow at the NYU School of Law’s Brennan Center who follows the private-prison industry. “Our country has a history of stoking unfounded fears around immigration and crime.”

31) Arkansas/Texas/National: A federal case concerning Michael Sabbie’s alleged wrongful death, the use of excessive force, and more, at a LaSalle Corrections/LaSalle Management Company facility in Texarkana is raising important questions about liabilities for wrongdoing between public bodies and private interests. “The report notably found that neither Bowie County nor the City of Texarkana, Ark., can delegate their duties to a third party, LaSalle, through a contract. LaSalle’s contract to manage the Bi-State jail was recently renewed for another year by the Bowie County Commissioner’s Court. Private management of prisons and jails has been hailed as saving tax dollars, but critics allege the privatization has led to widespread abuses by companies that put profits over the health and safety of inmates.” Are liability risks to the public being adequately assessed and accounted for in jail deals before they are approved by local governments?

PUBLIC SERVICES

32) National/Tennessee: Veteran Maggie Martin of About Face and Dave Cooley discussed the struggles of veterans to obtain healthcare, especially in rural areas and underfunded Medicaid states, and efforts to privatize the Veterans Administration on Veterans for Peace Nashville’s podcast. [Audio, about an hour, privatization at 24:00]

33) National: Nurses protested outside the VA headquarters over concerns with the privatization of department services “in light of new community care access standards.” Their group included members of Vietnam Veterans of America.

34) FloridaSarasota has held off on privatizing its SCAT bus system. “SCAT workers, riders and Amalgamated Transit Union Local 1701′s joint industry counsel coordinator, John Lyons, claimed privatization would reduce the quality of service while leading to service reductions, neglect of county-owned equipment, and job and wage cuts. They claimed any privatized service will eventually fail, leaving taxpayers holding the bag.” 

35) Nebraska: Private contractors for nursing facilities are being squeezed by declining Medicaid payments. “Medicaid rates have historically been less than a nursing facility’s cost of providing care; however, this difference has grown dramatically during the last two years. The Medicaid rate paid from July 1, 2017, to June 30, 2018, was 2.65 percent less than the facility’s cost of providing care to Medicaid beneficiaries of two years prior. Think that’s crazy? The Medicaid rate paid from July 1, 2018, to June 30, 2019, is 7.17 percent less than the facility’s cost of providing care of two years prior.”

36) InternationalAnother public services outsourcing corporate giant in Britain, Interserve, has collapsed, driven under by a New York hedge fund that didn’t like the terms of a bankruptcy offer. But to make things worse, the company “was handed £660m worth of public contracts in the run-up to going into administration, in an apparent repeat of the Carillion fiasco, the GMB union has claimed.”

OTHER

37) National: The U.S. National Archives held a series of discussions to mark Sunshine Week. The program featured a Dialogue Regarding Open Government, Transparency and the Legal Landscape between David S. Ferriero, Archivist of the United States, and Beryl A. Howell, Chief Judge, United States District Court for the District of Columbia. It also included panel discussions about the Office of Government Information Services (OGIS)—a Freedom of Information Act (FOIA) resource for the public and the government—and the future of electronic record keeping. [Video, about 4 hours].

38) National: The well-funded national effort by Trump administration officials, right wing think tanks, corporate lobbyists, and their strategic litigators to initiate a new wave of deregulation behind a phony guise of efficiency and freedom to innovate has taken a tremendous hit from the two Boeing crashes and questions about whether the FAA is a captured agency imprisoned in the ideology of privatized “self-regulation” rather than a commitment to the public interest. For details see the excellent piece in the Seattle Times yesterday.

Dana Milbank says “this is what happens when corporations run the government.” He writes, “the billions of dollars that corporate executives invest in lobbying and campaign contributions have generated healthy returns: a corporate tax cut, an assault on regulations and unrelenting efforts to shrink enforcement. The president, who previously attempted to privatize 30,000 FAA jobs, again proposed slashing the FAA in his budget this week.” Mark Elliott points out that “the FAA Outsourced Certification Of Boeing’s New Jets. To Boeing,” and Marietta Robinson says “we shouldn’t depend on Boeing to tell us whether Boeing planes are safe to fly.” 

39) National: In spite of widespread coverage and congressional testimony on serious problems with military housing privatization, the Navy, Marines, and Air Force are plowing ahead anyway. 

40) Indiana: The Long Beach town council has come out in opposition to the just-passed Senate Bill 581, which they say would lead to extensive privatization of 40 miles of Indiana’s Lake Michigan public beaches. “It’s time for all our state legislators to stand up to out-of-state monied interests who are trying to deprive Indiana residents of one of our greatest natural resources,” the council says. “This privatization of public beaches should not be allowed to happen.” A public meeting of the Town Council to discuss the issue and plan responses will be held tomorrow. The bill has been referred to the House Committee on the Judiciary.

41) North Carolina: Local officials from government representatives to ABC board members are worried about the impact that proposed legislation to privatize liquor sales could have. “Local ABC board chairs are worried about what that might mean for local stores, and what could happen to hundreds of thousands in contributions made to local governments, education and more thanks to annual ABC sales.”

42) Texas: A major victory has been scored by San Antonio’s organized grassroots as the Texas Supreme Court rules in favor of its case “challenging the corruption within San Antonio’s city hall, the privatization of public spaces, and the ongoing gentrification of the historic Eastside.”  @yanerdth says “TODAY, almost six months later, the SCOTX ruled against the City, and in favor of COMMUNITY after six months of City officials saying this was a ‘toxic’ case, acting as if this was a done deal that nothing could undo BUT THEY CAN UNDO IT we have to hold Council accountable!

43) International/Think tanks: A new report has been issued by the International Labour Organization (ILO) on how public mandatory pensions are being brought back into the public sector. “From 1981 to 2014, 30 countries privatized fully or partially their public mandatory #pensions. As of 2018, 18 countries have reversed the privatization due to underperformance and high costs. Countries are rebuilding pension public systems.” Read the report, “Reversing Pension Privatizations: Rebuilding public pension systems in Eastern Europe and Latin America.”

44) International: At the Commission on the Status of Women meeting being held at UN headquarters in New York through March 22, NYU’s Philip Alston and Misun Woo of the Asia Pacific Forum on Women, Law and Development  (@apwld) participated in a discussion of the human rights implications of privatization. See Alston’s report on extreme poverty, human rights and privatization.

45) International: Self-proclaimed interim president Guaido is planning to privatize Venezuela’s oil industry.