Weekly privatization report

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1) National: ICE detainees at the GEO Group-operated Northwest Detention Facility in Tacoma, Washington, have joined the nationwide prisoners strike launched on August 21. “The immigrants demand from ICE an end to forced labor, minimum wage for all work, and approval of contact visits with children,” reports Amanda Arnold of The Cut. Newsweek reports that at least 60 immigrant detainees at NWDC have joined inmates in their call for an “end to prison slavery” by launching their own hunger strike. Maru Mora, a spokeswoman for the immigration advocacy group NWDC Resistance “said at least 200 detainees had planned on joining the 19-day protest, which launched on Tuesday and is expected to be taking place across 17 states, but dozens dropped out due to health concerns and fear of retaliation from detention center staff.” Mora said “‘the retaliation is real,’ asserting that [GEO Group] staff at the NWDC have threatened to force-feed detainees who go on hunger strikes ‘by forcing food through their noses,’ in addition to segregating detainees.”

2) National: On Friday Vox reported that the federal government is marketing prison labor to businesses as the “best-kept secret.” Alexia Fernández Campbell writes that “perhaps the most problematic element of prison labor is the twisted market incentive it creates. Because prison labor is so cheap, federal and stategovernments can sell prison-made goods and services to private companies at rock-bottom prices, creating a labor-market incentive for mass incarceration. Just take a look at how the federal government markets its prisoner workforce to the private sector. In marketing brochures, the Department of Justice touts its ‘cost-effective labor pool’ and a workforce with ‘Native English and Spanish language skills.’”

3) National: Matt Barnum, @chalkbeat’s education policy reporter, breaks a major story about a new organization’s plan to spread charter and charter-like schools to 40 cities in 10 years. “The City Fund, whose formation was announced late last month, has already amassed over $200 million and a well-connected staff, making it poised to influence education policy in cities across the country. The full presentation, used a few months ago to pitch potential funders, offers the most detailed available blueprint of the group’s goals and strategies, which include expanding charter schools or charter-like alternatives. Known as the ‘portfolio model,’ it’s a controversial approach that has faced skepticism from both critics and supporters of charter schools. The academic success of the approach remains hotly debated.”

4) National: CoreCivic, the private, for-profit prison company, has just paid $242 million for a Social Security Administration-occupied office complexin northwest Baltimore, one of the largest deals this year in the region. (…) Social Security inked a 20-year lease for the build-to-suit project, and has 15.5 years remaining until January 2034. (…) The acquisition boosts the company’s CoreCivic Properties portfolio of government-leased buildings by 36 percent on a rentable square foot basis. The company owns 26 properties representing nearly 2.1 million square feet of real estate within its CoreCivic Properties portfolio, all used by government agencies.” The company, as well as its competitor the Geo Group, benefits from an IRS ruling that allows it to be a Real Estate Investment Trust.

As Rob Urban and Kristy Westgard recently wrote for Bloomberg, “It’s a Great Time to Be a Prison Landlord, Thanks to the IRS.” They write, “savvy use of the tax code plays a role, too. CoreCivic and GEO, the biggest U.S. prison companies, are classified as real estate investment trusts. That means almost all their profits from property-related operations are tax free as long as they’re distributed to shareholders through dividends.” The build and lease, or sale-leaseback model as in Baltimore, gives CoreCivic a nice income stream. “The shift in strategy is evident in Conroe, Texas, and Lansing, Kansas, where the companies’ income is guaranteed by long-term leases.” But the question remains: Is government paying more for these long term lease deals than they would if they financed facilities with low interest government debt?

5) National: Danielle McLean and Josh Israel of Think Progress have done some super digging and put together a list of the law firms that work with GEO Group, the private, for-profit prison and immigration detention company. “These included lawyers in Arizona, California, Colorado, Florida, Indiana, Louisiana, Missouri, New Mexico, Oklahoma, Pennsylvania, Texas, and Virginia. Two of those firms even advertised on their website that The GEO Group is one of their major clients — alongside prominent companies like CNA, FedEx, Pilot Travel Centers, R.J. Reynolds Tobacco, and Zurich Insurance Group — until ThinkProgress asked about it. Those firms have since taken down their client pages.”

6) Arizona: Primavera online charter school sees its profits soar as its academics lag. AZ Central; reports “the online school’s student body has doubled, to more than 20,000, over the past decade; as it has grown, the school has diverted large shares of its education funding to investments; Primavera last fiscal year gave its CEO an $8.8 million ‘shareholder distribution.’ (…) With the payout, Creamer’s compensation was 39 times the salary of the superintendent of Mesa Public Schools, the state’s largest public district. Primavera’s student body of 20,210 is less than one-third the size of Mesa’s.” An AZ Centralinvestigation finds charter school financing shenanigans to be widespread in the state.

7) California: Another day, another abrupt closure of a charter school. “On the fourth day of its second school year, an Eagle Rock charter school closed its doors this week, leaving parents and students disappointed, angry and tearful—and bucking the usual narrative of ceaseless charter growth.” As the LA Timesdaintily puts it, “it may or may not have been a factor that the school was part of Partnerships to Uplift Communities, the group of charter schools co-founded by Ref Rodriguez, who resigned from the Los Angeles Board of Education in July after pleading guilty to criminal charges related to his campaign for office.”

8) California: A charter school that borrowed almost $30 million using public tax exempt bonds is closing “and may [?] have to repay the money.” The Guidance Charter School “was founded in 2001 by Muslim community leaders who promised a non-religious educational program that would include Arabic language classes. Earlier this year the Palmdale School District ordered Guidance closed, citing questionable financial practices and poor academic performance.”

9) California: The Oceanside City Council has voted against granting land for a charter school on El Corazon. “‘Stirling Development, LLC wanted the land because they were going to build a charter school there, which is not allowed by the El Corazon Specific Plan,’ [Diane Nygaard, president of Friends of El Corazon], said. ‘There would be no revenue generated by a charter school.’ According to the plan, non-park uses are to generate revenue through real property taxes, sales taxes or transit occupancy taxes.”

10) California/National: Verizon has been accused of slowing down its internet speeds and jacking up its prices during a wildfire. Ryan Cooper and Arstechnica report that “Santa Clara County Fire were using an unlimited cell data plan to fight the largest wildfire in California state history. @Verizon, spotting an opportunity, choked their data speed and jacked up their price by over 100%.” The issue  has been submitted as evidence in a lawsuit that seeks to reinstate federal net neutrality rules.

11) California: Assemblyman Evan Low, who accepted a $4,200 campaign contribution from the GEO Group, which runs the Adelanto ICE processing center in San Bernardino County, said it was a mistake and has donated the money to a community group. QVoiceNewsreports that “Low isn’t the first Democrat to receive money from companies like GEO Group. Half of California’s Legislative LGBT Caucus has accepted money from similar groups.”

12) FloridaAttorney General Pam Bondi’s office is appealing a circuit court judge’s decision to remove an education amendment dealing with charter schools from the November ballot because its language is unacceptable.

13) Florida: Rita Ferrandino, the former chairwoman of the Sarasota Democratic Party and currently an instructor at the University of Pennsylvania Graduate School of Education, says “we are in a hidden battle in Florida, and in Sarasota County, to save our public schools. It’s one reason this primary election is so important.” Ferrandino writes that “this battle for funding and accountability between the privatization advocates and the supporters of public education is playing out now in our local School Board election. Sarasota County has a five-member school board. This election will determine the control over the next four years. However, as mentioned earlier, it is a quiet battle, and the candidates have not been direct about their position on vouchers and privatization. In fact, some have dodged the question. Voting is critical and I urge all voters to look below the veneer.”

14) Indiana: IGT Indiana, the company running the state’s privatized lottery system hasn’t come anywhere close to fulfilling the performance targets in its contract with the state—but has just announced bumper profits for itself.

15) Indiana: Purdue University’s controversial decision to buy a private, for-profit education company, Kaplan University, is again generating headlines in the wake of accusations that Purdue Global is trampling upon academic freedom and the intellectual property rights of faculty. “The American Association of University Professors took issue with a portion of the confidentiality agreement that said work product, including course materials ‘or other intellectual property that arises in any part in the course of … employment at Purdue Global, is commissioned and owned by Purdue Global as a work-for-hire and may not be used, duplicated or distributed outside of Purdue Global.’ Greg Scholtz, director of the AAUP’s Department of Academic Freedom, Tenure and Governance, said: ‘Asserting ownership over the faculty’s teaching-related materials undermines standard academic practice, violating faculty rights to their own intellectual property as well as their academic freedom. … This type of agreement would be unprecedented for a public, non-profit university.’”

Henry Reichman, an emeritus professor of history at California State University, East Bay, and chair of AAUP’s committee on academic freedom and tenure, has written that “in other words, if you agree to teach a class for Purdue Global and publish a book or article, or compose a song, or paint a picture, or invent something that Purdue wants to use, they can do so in any way they want — without paying you and without your permission.”

Like Reichman, David Nalbone, a professor of psychology at Purdue University Northwest and vice president of AAUP’s Indiana conference, “said a public research institution requiring faculty to give up rights to their intellectual property is unprecedented, likening the terms to ‘vacuuming up work’ that professors and researchers spend their careers producing.” Nalbone “called the restrictions on discussing teaching ‘an attempt to deprofessionalize faculty’ that would not serve to advance good teaching. ‘It’s going to intimidate faculty into keeping their head down and just serving as drones.’”

16) Maryland: Jeremy Mohler of In the Public Interest joined Eugene Puryear to discuss Baltimore’s historic move to ban privatization of its water system, the result of much hard work by AFSCME, community groups, and others. The measure will now go to the voters in November. [Audio, at 38:00]

17) Mississippi: A Mississippi school district and two education organizations “are throwing their support behind an ongoing legal battle that argues how charter schools are funded is unconstitutional. On Aug. 15, the Clarksdale Municipal School District, Mississippi Association of Educators and Education Law Center filed amicus briefs in support of the Mississippi Southern Poverty Law Center’s lawsuit that claims charter schools strip much needed funds from the Jackson Public School District.”

18) New Mexico: The state government says that CoreCivic owes it more than $3.6 million in gross receipts taxes, interest and penalties. “The state gave the company a multimillion-dollar refund in 2012 when CoreCivic, formerly known as Corrections Corporation of America, claimed it did not have to pay gross receipts tax on money it got for locking up federal detainees at its prison in Torrance County. But the state now says CoreCivic provided inaccurate information as the company sought that tax break. And New Mexico wants the money back. In response, CoreCivic is taking the issue to court.”

20) Pennsylvania: The Harrisburg school board has voted to begin the process to revoke the charter for the Premier Arts and Science school. “A lawyer hired by the school district evaluated the progress and operations of the pre-K-8 school and noted test scores ranked the lowest in the city out of all schools, the school didn’t comply with many mandates under state law and that the school may have overcharged the district.” Staff members “also did not understand programming differences and nuances of the state’s special education law, which ‘may account for the significant rise in number of identified special education students’ in 2017-18, which would generate more money for the school.”

21) Philadelphia: The first charter school to open under a new operator is opening in Philadelphia. “The school revised aspects of its application after it was rejected by the SRC in February 2017. Still, School District reviewers ‘continued to note a possible misalignment between the stated restorative-justice philosophy and proposed academic and organizational programs of the school.’ The SRC approved the application that May. The approval rankled advocates like Lisa Haver, a retired district teacher and founder of the Alliance for Philadelphia Public Schools. ‘If [new school board members] don’t want to be seen as just a new SRC, a big part of that is, they’re going to have to be serious about standards for charter schools,’ said Haver, whose group has also questioned a School District contract with Jounce.”

22) Puerto Rico: Cathy Kunkel of the Institute for Energy Economics and Financial Analysis worries that privatization without regulatory oversight of the island’s electricity system will just open up opportunities for corrupt, politically driven business deals. “In a report that Kunkel helped author, the IEEFA was particularly dubious that a new private owner, absent robust regulation, would voluntarily shift toward renewable fuel sources: Why would you pave the way for distributed forms of energy generation, like solar, when they compete with the centralized power grid you’ve just bought?” See the report, PREPA Privatization Law Invites More Contracting Scandals.

23) Puerto Rico: The Commonwealth has opened its first charter school, amid much controversy. “So far, no government money has been disbursed to Vimenti, according to Carrera, but they have secured contributions from the Harold Alfond Foundation, which donated $1 million and two $500,000 donations from the nonprofit Fundación Colibrí and the singer Marc Anthony, respectively.”

24) Rhode Island: Charter school-related campaign cash is making its way into politics. “Two board members at a public charter network in Rhode Island have donated $75,000 to Dan McKee’s Democratic primary campaign for lieutenant governor. WPRI-TV reported Tuesday state Board of Elections filings show the top board members at Achievement First made the donation to a pro-charter school group PAC to help support McKee.”

25) Texas: The City of Belton has fielded an online survey to determine what its residents want from the public library service. But there’s a catch: “The survey was developed at the recommendation of Library Systems & Services, which completed an assessment of the library in July.”

26) Wisconsin: County auditors report that Armor Correctional Health Services Inc., the Miami-based company hired by the county and responsible for medical services at the Milwaukee County Jail and House of Correction, failed to meet contract staffing requirements during the time that several people died while in custody at the jail. “Armor employees allegedly ‘engaged in a pattern and practice of intentionally falsifying entries in inmate patient health care records,’ a criminal complaint says.Thomas, a 38-year-old inmate with bipolar disorder, went seven days without water in solitary confinement before his death.”

27) International: Yet another privatisation disaster has rocked Britain, as unbelievably squalid conditions and ruinous mismanagement by G4S leads to the renationalization of Birmingham Prison. In March 2011, officials boasted that the privatization of the prison to G4S would “would deliver ‘innovation, efficiency and better value for money’ without ‘compromising standards.’” As the New Statesmansays, these claims now are laughable. “At repeated intervals, the state—long reviled by free marketeers— has intervened to compensate for private failure.” Among many other things, the scandal has exposed how hollow some “value for money” analyses can be, as this malleable term of art can be used as a smokescreen for the destruction of public services.

28) International: In a wide ranging speech on the role of the media in society and what reforms are necessary, British Labour leader Jeremy Corbyn proposes a radical expansion of the Freedom of Information Act to cover all companies that contract with the public sector. “We have already said that we would expand the Act so it covers private sector providers of public services. It is simply not acceptable for corporate executives to hide behind the excuse of commercial confidentiality when they are meant to be providing—and as we’ve seen with Carillion, East Coast Mainline and Birmingham Prison this week so often failing—a public service. But I think we should be more ambitious. Currently, ministers can veto FOI releases. On two occasions, this veto has been used to block information about the UK’s decision to pursue military action against Iraq. That can’t be right. We will look at ending the ministerial veto to prevent the Information Commissioner being overruled.”

29) Revolving Door News: Sen. Elizabeth Warren (D-MA) reports that “4 months after @FCC Commissioner Meredith Baker voted to approve a huge merger between Comcast and NBC, she resigned. And you’ll absolutely never guess where she went to work next! (It was Comcast-NBC.) #EndCorruptionNow.”

28) Think TanksBianca Wylie, an open government advocate who leads work on public sector technology policy for Canada at Dgen Network and is a co-founder of Tech Reset Canada, discussed some of the public and private accountability issues raised by the trend toward “Smart Cities” with Heidi Boghosian and Michael Stewart Smith of Law and Disorder. A company owned by Google wants to build a Smart City near Toronto, which Wylie and others call “surveillance capitalism.” “The Smart City concept uses information and communication technology to interact with the cities infrastructure and to monitor its development and evolution. Proponents claim it will increase efficiency. Information and Communication Technology is used to increase the contact between local citizens and government to reduce costs and enhance the quality and interactivity of urban spaces within cities. Critics say it vests too much power in profit-minded corporations, and that total connectivity may makes smart cities a hacker’s dream.” [Audio, about 27 minutes]

Legislative Issues

1) California: For-profit companies will be banned from running charter schools in the state if Gov. Brown signs a bill that won final approval from the lawmakers on Thursday. “Assembly Bill 406 would change California’s charter school law to prohibit for-profit corporations and for-profit educational management organizations from running the state’s taxpayer-funded and independently run schools — even if the schools themselves are technically nonprofits. California currently has about 35 such charter schools, according to McCarty’s office. In 2016 K12 settled a lawsuit with the state for $168.5 million over claims that it manipulated attendance records and other measures of student success.”

 

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