Here’s our weekly analysis of the corporate takeover of schools, water, and other public goods in the news and communities nationwide. Not a subscriber? Sign up.
- Trump’s Federal Protective Service, making “proactive arrests” of protesters, is rife with private contractors.
- State departments of transportation across the country are estimated to need an “immediate infusion” of at least $37 billion.
- The pandemic may boost the prospects of public-private partnerships, says the public-private partnership industry.
1) National: More than 150 prominent medical experts, scientists, teachers, nurses and other experts signed a letter circulated by U.S. PIRG urging leaders to shut the country down and start over to contain the rampant spread of the virus. “We need you to lead,” they tell elected officials. “Tell the American people the truth about the virus, even when it’s hard. Take bold action to save lives—even when it means shutting down again. Unleash the resources needed to contain the virus: massively ramping up testing, building the necessary infrastructure for effective contact tracing, and providing a safety net for those who need it. Many of the actions of our government thus far have fallen short of what the moment demands. Mr. Trump, federal administration, honorable governors: we remind you that history has its eyes on you.”
2) National: Senate Democrats are urging support for a bill that would federalize the medical supply chain and bolster transparency. “Forty-six Senate Democrats along with the AFL-CIO; Service Employees International Union; National Nurses United; American Federation of State, County and Municipal Employees; and several large advocacy groups support this legislation. Reps. Katie Porter, D-Calif.; Jason Crow, D-Colo.; Elissa Slotkin, D-Mich.; and Tim Ryan, D-Ohio, introduced a House companion bill in May. It was also included in the House’s coronavirus relief package, the HEROES Act, which passed in May.” [ The Medical Supply Transparency and Delivery Act]
3) Washington: As the pandemic has shut restrooms, public libraries have stepped up to provide relief. “The lack of restrooms has become an issue for delivery workers, taxi and ride-hailing drivers and others who make their living outside of a fixed office building. For the city’s homeless, it’s part of an ongoing problem that preceded COVID-19. ‘It’s gone from bad to worse,” said Eric, who lives in an encampment near Interstate 5. (Eric asked to be identified only by his first name.) ‘It’s definitely much, much harder.’”
4) Think Tanks: The Tax Justice Network says “Don’t miss our two part series on @TheTaxcast looking at how white supremacy is embedded in tax systems and how tax justice can help address #SystemicRacism Part 1 here and Part 2 is just out. #Taxcast #Taxcasters.”
5) Think Tanks: Brookings has launched COVID-19 Metro Recovery Watch, which is “aimed at informing local and state recovery strategies from COVID-19’s historic economic impacts in ways that link near-term resilience to longer-term economic transformation, racial equity, and economic inclusion.” One report they flag this week is Building Racial Equity in Tech Ecosystems to Spur Local Recovery by Dell Gines and Rodney Sampson.
6) National: The Centers for Disease Control and Prevention (CDC) have capitulated to political pressure on reopening schools, says Diane Ravitch. “At first, the CDC held firm, urging schools to practice social distancing, to require personal protective equipment, and not to reopen unless all safety precautions were in place. But the CDC buckled to the White House pressure. It changed the tone of its guidance, now stressing the necessity of reopening over the importance of safety. Now the CDC sings the song that Trump, Pence, and DeVos want to hear.”
7) National: The NAACP is suing Secretary of Education Betsy DeVos over the distribution of more than $13 billion in federal aid intended for K-12 schools. “DeVos issued a rule that says if states want to use the funds to provide services for all students, such as tutoring or extra school buses to allow for social distancing, they must also fund “equitable services” for all private school students in the district. The move is a departure from typical interpretations of federal education law, which usually requires ‘equitable services’ only for low-income students in private schools. DeVos’ rule vastly increases the share of federal funding that would go to private school students. Private school students are more likely to be wealthy than public school students, and a majority of private school students are white, while a majority in public schools are students of color.”
8) National: In a long thread on how the COVID-19 crisis is affecting higher education and driving privatization, UNC Wilmington Prof. Kevin R. McClure says “another connection involves outsourcing. Colleges have contracted out various services to private companies to cut costs and/or increase returns. This means the colleges aren’t responsible for workers employed by these companies.”
9) California: CBS New investigative reporter David Goldstein reports that LA County charter schools received over $78 million in PPP money, with over $4.5 million alone going to Palisades Charter High, even though it is receiving all of its public funding. Clare Crawford of In the Public Interest tells CBS “these moneys were not intended for public entities to tap into.” Carol Burris of the Network for Public Education says “in our mind this was an unethical take of money that was intended for parents who were left without a job.” [Video, about two minutes]
10) California: Writing in Los Angeles Education Examiner, Sara Roos says that privateer and charter school interests strategized to “outflank CTA [CA Teacher’s Association] from the left” to advance their school privatization agenda
11) Illinois: First Student school bus drivers represented by Teamsters Local 777 have ratified their first collective bargaining agreement with the company. “In addition to the newly ratified contract, the Maywood drivers and monitors are also covered by the First Student National Master Agreement, of which a tentative agreement is being voted on for ratification by Teamsters employed by the company all across North America starting next week.”
12) New York/National: Longtime educator Jamaal Bowman is headed to Congress. Here’s his take on reopening schools.
13) North Carolina: At least 50 North Carolina charter schools received money from the federal Paycheck Protection Program, created to help small businesses and nonprofits stay afloat during the COVID-19 pandemic, NC PolicyWatch reports. “NPE estimates that North Carolina charter schools and/or their management organizations have received between $21.1 million and $53.6 million in PPP funds. “We believe that exorbitant funding should trigger a reduction of COVID-19 aid to those schools who took PPP with those savings equitably dispersed among all North Carolina public schools,” Burris said. At least three charters received PPP loans of between $2 million and $5 million. And another five received loans of between $1 million and $2 million. Dozens more received loans of between $150,000 and $1 million.”
14) South Carolina: A state court judge has temporarily blocked Gov. Henry McMaster’s decision to use $32 million of federal coronavirus aid to fund vouchers that help parents afford private K-12 tuition in the upcoming school year. “Skyler Hutto, an Orangeburg attorney and the son of Democratic state Sen. Brad Hutto, argued in a court filing that McMaster’s plan violates a portion of the state constitution preventing the government from funding private or religious education.” The decision also received support from several Democratic state lawmakers and U.S. Rep. Joe Cunningham, D-Charleston, who tweeted that public funds should go to public schools. Arguments will be heard in court this week.
15) International: Public Services International is urging trade unions and civil society groups to sign the education support personnel manifesto on dealing with the COVID-19 crisis. “This manifesto is a call for recognition by a group of professionals who are among the most influential in the lives of our young people. We are our unions’ education support personnel—school and university frontline workers who are office employees, custodians, maintenance workers, bus drivers, classroom paraprofessionals, food service workers, school nurses and health aides, secretaries, special education assistants, and many others strengthening the institutions where we work, and protecting the health and welfare of our students. Health, safety, hygiene in the workplace and training must be guaranteed as fundamental human rights, based on international labor standards.”
16) National: American Association of State Highway and Transportation Officials have urged in a letter to Congressional leadership that state departments of transportation across the country “need an ‘immediate infusion’ of at least $37 billion to prevent disruptions to planned transportation projects, keep workers employed, and enable the nation’s mobility network to fully support economic recovery from the COVID-19 pandemic.” [Letter]
17) National/Ohio/Illinois: Writing in Inside Climate News, Dan Gearino points out the connections between utility deregulation and two king-sized bribery scandals in Ohio and Illinois. “But David Pomerantz, executive director of the Energy and Policy Institute, a watchdog group that investigates corruption by utilities, said such debates are largely beside the point. The core problem, he said, is something much simpler: Utilities have shown a pattern of trying ‘to spend money to influence policy in ways that, above all, protect or strengthen their monopolies and grow their profits, agnostic of the climate impacts.’ Pomerantz said he thinks that reducing the political power of utilities will be good for renewable energy and the climate in the long run, because renewable energy has public support and is competitive on the market.”
18) National: The pandemic may boost the prospects of “public-private partnerships,” the P3 industry says. But with traffic projections way down, they are placing their bets on “availability payments,” guaranteed returns to private, for profit companies. “Across the sector, availability payment projects—where the private sector is reimbursed by the public sector through a predetermined performance-based payment plan—are likely to be favored in the medium term over traffic and demand risk projects, where revenues depend on traffic and user demand. ‘Investors, whether foreign or domestic, will likely prefer availability payment projects over traffic risk ones,’ says Paul Epstein, a partner at law firm Shearman & Sterling’s project development and finance practice. It should be noted, however, that certain investors in the PPP space have always been more comfortable with the former rather than the latter, and Covid-19 has just emphasized this preference. ‘It will be interesting to see if hybridized projects gain pace in the future as a result of the virus outbreak,’ he adds.” But with interest rates so low, does it make any sense to pay the premiums that go with P3s, not to mention their other problems?
19) National: Are tax exempt COVID bonds on the horizon? The privatization industry seems to be boosting proposed legislation. “This program would be somewhat similar to private activity bonds which provide alternative funding for public initiatives. The new COVID recovery bonds would be tax exempt when used for permitted purposes such as financing airport, port, transportation, sewage, water, solid waste disposal, certain facilities, and other projects.” Never let a good crisis go to waste?
20) Hawaii: The collapse of state tax revenues due to COVID-19’s impact on the tourism industry is hitting Honolulu’s rapid transit sector hard, and is threatening to pull down a major “public-private partnership” development project. “Adding to the rail project’s financial troubles is a decision by the FTA to withhold $744 million in federal funding until HART demonstrates it can actually complete the project. The FTA has been waiting to see the outcome of the bidding process for a public-private partnership, or P3, contract that HART plans to award later this year. That contract will involve an estimated $1.4 billion for construction of the last four-mile segment of the elevated rail line through the city center, and involve billions of dollars in city funding to maintain and operate the rail line for the next 30 years.”
But the project, which has major implications for Hawaii’s public finances, is shrouded in secrecy. The FTA is awaiting the outcome of the bidding because it wants to be sure the bids are affordable for HART and the city, but the public won’t get to see the numbers, which will only be released when a contract is awarded. Two or three bids have come in for the project, so the ball is in the FTA’s court.
21) Illinois: An important new report from the Citizens Utility Board in Illinois documents how aggressively American Water and Aqua America have been buying up systems in Illinois (home state of Democratic Senator Tammy Duckworth, who is drawing criticism for supporting privatization) and the cost of those acquisitions to the public. The report says, “Over the past several years, private water utilities Illinois American Water and Aqua Illinois have been buying up depreciated water and wastewater systems across the state. These for-profit companies have purchased 14 systems since the fall of 2018, when state legislation was passed that allows them to pass the bill—more than $88.5 million—onto their customers. ‘The amount we pay for water and sewer services is unreasonable,’ one person complained to the Illinois Commerce Commission. ‘I feel we are being held hostage by Illinois American Water Company.’”
On Saturday, the Chicago Sun-Times ran an editorial saying “residents deserve a direct say in any decision to privatize their community’s water system, in the same way that higher property taxes must be submitted to a referendum.”
Criminal Justice and Immigration
22) National: Chad Wolf, the acting head of U.S. Customs and Border Protection, states that CBP is making “proactive arrests” of demonstrators. He was the official “who drew up the segregation orders that resulted in migrant children being separated from their parents.” Wolf, a former lobbyist for companies including Bill Ackman’s Pershing Square Capital, Cintas, and ChoicePoint, presides over an agency with over 1,000 outside contractors. Speaking to Rachel Maddow last Tuesday about the Portland lawsuits, former DHS Secretary Jeh Johnson said “most members of the Federal Protective Service are private contractors.”
Both CBP and FPS are housed within the Department of Homeland Security, which spends billions on contractors. FPS contracts with private security firms “to provide 13,000 contract Armed Protective Security Officers (PSO) providing access control and security response within federal buildings.”
23) National: American Oversight is suing the Department of Homeland Security (DHS), U.S. Customers and Border Protection (CBP) and Immigration and Customs Enforcement (ICE) to get them to release information about the deaths of migrants detained by federal authorities. “The lawsuit, filed in federal district court in D.C., is over seven FOIA requests filed by American Oversight, two from March and five from June, for records from the federal agencies related to the deaths of detained migrants. American Oversight is asking the court to order the federal agencies to conduct a search to uncover all records related to the FOIA requests, as well as enjoin the agencies from continuing to withhold any and all non-exempt records responsive to the FOIA requests.”
24) National: The Marshall Project, in partnership with the Associated Press, regularly tracks numbers of COVID-19 infections and deaths in federal prisons. On Friday they reported, “by July 21, at least 70,717 people in prison had tested positive for the illness, a 10 percent increase from the week before. New cases among prisoners reached an all-time high in mid-July after slowing down in June. The growth was driven by big jumps in prisoners testing positive in Texas, California and the federal Bureau of Prisons as well as outbreaks in Idaho, Iowa, Oregon and South Carolina. Cases first peaked in late April, when states such as Michigan, Ohio, Tennessee and Texas began mass testing of prisoners. Those initiatives suggested that coronavirus had been circulating among people without symptoms in much greater numbers than previously known.” There have been at least 681 deaths.
25) National: Worth Rises says “we have more than 60,000 signatures on our petition to include prison phone justice in the next COVID-19 relief bill! Please sign and share if you haven’t yet!” MediaJustice, Worth Rises, OC Inc./UCC, the Lawyers Committee for Civil Rights Under Law of the San Francisco Bay Area, Working Narratives, the Ella Baker Center, and CURE say “we must ensure that Congress adopts the bill as part of its stimulus response and codifies phone justice into federal law. In honor of Martha Wright Reed’s legacy, we’re calling on lawmakers to stand up for vulnerable communities and make prison-phone calls more affordable for families trying to stay connected.”
26) National: The New York Times’ Caitlin Dickerson tells the story of the film ICE doesn’t want Americans to see. “The filmmakers, Christina Clusiau and Shaul Schwarz, who are a couple, turned drafts of their six-part project called ‘Immigration Nation’ over to ICE leadership in keeping with a contract they had signed with the agency. What they encountered next resembled what happened to Mary L. Trump, the president’s niece, who was eventually sued in an unsuccessful attempt to stop her from publishing a memoir that revealed embarrassing details about the president and his associates. Suddenly, Ms. Clusiau and Mr. Schwarz say, the official who oversaw the agency’s television and film department, with whom they had worked closely over nearly three years of filming, became combative.”
27) National: The GEO Group and CoreCivic have announced the dates of their second quarter earnings releases and conference calls. GEO Group will release its earnings numbers before market open on August 6 and hold a conference call at 12 noon Eastern Time that day. CoreCivic will release its earning number on August 5 after market close and have its conference call at 11am Eastern on August 6.
28) National: Thus far Senate Republicans have left state and local aid out of their emergency relief package, The Bond Buyer reports. “In the meantime, counties and school systems’ federal aid needs have increased since the House passed the $3.5 trillion HEROES Act. The National Association of Counties said Tuesday its newest estimate of the impact of COVID-19 on county budgets through fiscal 2021 shows a $202 billion gap, up from an earlier $144 million estimate.” In the New York area, counties have already lost $1.2 billion of sales tax revenue. [Sub required]
29) National: Mark Dimondstein and Richard Koritz say the Post Office belongs to the public. let’s not give it to Wall Street. “Postal privatization, better termed ‘profitization,’ will turn over this vast treasure to Wall Street investors and a few private corporations. In turn, companies could raise prices, eliminate a democratic right of the people to universal postal services no matter who we are or where we live, and destroy living-wage union jobs in the midst of the COVID-induced economic crisis.”
A formal complaint has been filed with the U.S. Postal Service Office of Inspector General by a Portland, Maine letter carrier alleges that city Postmaster James Thornton is unlawfully mandating the delay of first-class mail in order to prioritize the delivery of Amazon packages. And in “a message to the American Postal Workers Union’s 200,000 members Monday, the organization’s National Executive Board accused [new Postmaster Louis DeJoy, a major Trump donor] of advancing the Trump administration’s privatization agenda by attempting to ‘undermine service to the point that the people no longer trust and support it.’”
In an interview with FAIR’s Janine Jackson, researcher Lisa Graves, executive director and editor-in-chief at True North Research, and author of the new In the Public Interest brief, The Billionaire Behind Efforts to Kill the US Postal Service, says that longstanding efforts to privatize the postal service may be coming to a head. Graves traces efforts to privatize the postal service to the efforts of right wing libertarian billionaire Charles Koch in the 1970s. This was made possible by the 1970 transformation of the postal service from an executive branch department into a public corporation, a move that followed a powerful national strike by postal workers.
30) National: The two largest federal unions, the American Federation of Government Employees and National Treasury Employees Union, have endorsed Joe Biden for President. “Both unions cited Trump’s three controversial workforce executive orders that made it easier to fire federal workers, shortened the collective bargaining process and placed severe limits on union employees’ access to official time as examples of the administration’s hostility toward federal workers. Biden has indicated he would undo much of the current White House’s workforce policy.” AFSCME, SEIU, AFT and the NEA have also endorsed the former vice president, as has the AFL-CIO.
31) Louisiana: The New York Times reports on the strike by New Orleans sanitation workers, which has been going on for two months. “But with the mix of private employers, one of which hired a public relations firm to help during the strike, it is nearly impossible for a large number of the workers doing the same jobs across the city to band together and negotiate their working conditions with any one company or with elected officials” writes Daytrian Wilken, the spokesperson for the City Waste Union in New Orleans. “That means Mayor LaToya Cantrell and the sanitation department are insulated, remaining one or two steps removed from dealing directly with the men on the front lines. In my uncle’s case, the city contracts with Metro Service Group, a Black-owned, New Orleans-based company, for part of its residential sanitation pickup. Then, Metro subcontracts with an employment company called People Ready, a division of True Blue Inc., based in Washington State, that oversees and pays my uncle and his co-workers.” Wilken asks, “Don’t my uncle, the other hoppers and their families deserve the dignity that Dr. King spoke of a half-century ago? Isn’t it about time to do right by these Black men, and meet their simple demands to be treated as significant in their own city?”
32) New York: A coronavirus fiscal “tsunami” is about to hit New York’s public transit system, The Bond Buyer reports. “Little or no aid from Washington could prompt a rash of doomsday moves, including deficit borrowing, which could further jeopardize its standing on Wall Street. Other options include service cuts; reductions and/or delays in the 2020 to 2024 capital program; fare and toll increases beyond the routine biennial hikes; and layoffs. The MTA has projected a coronavirus-related hit of $14.3 billion for this year and next, or 41.4% of its operating budget. That includes plummeting fare and toll revenue largely due to stay-at-home and social distancing measures to combat the pandemic and reduced demand because of the weak economy, plus the loss of subsidies such as dedicated taxes and additional costs from cleaning the system.” [Sub required]
33) International: Despite assurances to the contrary by U.K. Prime Minister Boris Johnson, alarm bells are going off about the possible privatization of the beloved National Health Service, in large part by selling it off in bits and pieces to the predatory American healthcare industry. Last week the Tory government “voted against an amendment to the Trade Bill that would have protected our NHS. In doing so, they have kept our treasured health service very much ‘on the table’ in trade negotiations with Donald Trump, and the rest of the world.” But the fight against this is continuing, reports The Canary. “The Lords are due to debate the Trade Bill in the autumn, after parliament’s summer recess. If the public’s response to the petition in its first 24 hours is anything to go by, the Lords should be in no doubt of what the country expects of them by the time they return: to seize this “last chance to protect the NHS.”
34) International: Public Finance says the lack of coordination between local and national systems for containing COVID-19 in the U.K. confirms warnings in a May 2019 Localis report, Hitting Reset: A Case for Local Leadership. “This can be seen in the kneejerk outsourcing of testing facilities and national call centers for contact tracing,” Public Finance reports.
35) National: Trump has nominated John Gibbs, an inexperienced and controversial figure, to head the federal Office of Personnel Management (OPM), which has experienced a chaotic level of executive turnover since the Republican administration took over in 2017. “This is the fourth nomination within four years for the OPM permanent director. Previous director Dale Cabaniss resigned suddenly and with immediate effect in March 2020 in a row over interference by the White House, just six months into the role which was supposed to run for four years. Cabaniss was reportedly unhappy about her treatment by John McEntee, the recently-appointed 29-year-old head of the Presidential Personnel Office (PPO), and Paul Dans, OPM’s White House liaison. (…) Gibbs, a former conservative commentator, is a vocal supporter of Donald Trump, and his position as a senior director at HUD was also put under the spotlight when the Washington Post investigated how he obtained the role with no prior housing experience.”
36) National: The Great American Outdoors Act, designed to shore up the National Parks social infrastructure, has passed with bipartisan support and the support of the Sierra Club, the Wilderness Society, the Natural Resources Defense Council, and the League of Conservation Voters. “Approval of the bill represents a rare victory for environmentalists during the president’s time in office, who is known for attempting to roll back more than 100 environmental rules and protections such as the National Environmental Policy Act (NEPA),” says The Hill. “It also means a win for the two Republican senators who pushed for its passage and are both facing competitive reelection races this year in swing states where the president’s popularity is sinking: Cory Gardner of Colorado and Steve Daines of Montana.”
But the compromise bill has come in for some stiff criticism too. Christopher Ketcham and Jimmy Tobias say the bill’s reliance on oil money to fuel parks investment sets up a destructive codependency and will fuel privatization. “Some $389 million is for upkeep of infrastructure for the private businesses, known as concessionaires, that operate hotels, restaurants, and trinket shops in the parks. Less than $1 billion is for maintenance of trails and campgrounds. Under the Great American Outdoors Act, as much as 45 percent of the new fund will go to fix roads, bridges and tunnels, allowing more motorists to burn more fossil fuels on better, smoother, faster infrastructure. Among the beneficiaries: the private, for-profit concessionaires that depend on easy motorized access in parks.”
37) National: Tim Whitehouse, executive director of Public Employees for Environmental Responsibility, and Erik Molvar, executive director of Western Watersheds Project, take aim at Trump’s nomination of William Perry Pendley to be the Director of the Bureau of Land Management. “Even in normal times, Pendley would be a terrible choice to lead the Bureau, whose mission is to ‘sustain the health, diversity, and productivity of public lands for the use and enjoyment of present and future generations.’ He’s a self-described ‘sagebrush rebel’ who has a long record of opposing the very existence of the public lands he now oversees. Writing in 2016, Pendley said, ‘The Founding Fathers intended all lands owned by the federal government to be sold.’ He has overseen the Bureau’s highly-politicized move from Washington, D.C. to the agency’s new western Colorado headquarters, losing critical long-term staff and creating vacancies in key positions.”
38) National: Route Fifty takes aim at the sorry state of “performance contract” management by local governments. “To be sure it’s a good thing to see that the deliverables in a contract—particularly ones involving services—are clear. But whatever the contract says, it doesn’t matter much if an agency doesn’t provide sufficient oversight and monitoring, “I love the idea of performance-based contracting,” says Kip Memmott, audit director for Oregon. “And in theory they’re wonderful. But [many] haven’t been effective at meeting their promise.
“Sometimes this is because the contracts themselves don’t do a good job at spelling out, with clarity, what levels of performance are required in order to deserve full payment for the service or avoid penalties. Moreover, even clarity and specificity of performance goals are nearly worthless if there is no pre-ordained schedule for check-ins to make sure that the measures are being met.”
39) National: Brooks Rainwater reports in Bloomberg CityLab that states are abusing their preemption powers in the midst of a pandemic. “Governors and state legislatures have used heavy-handed tactics for years to take away the authority of city leaders to pass laws their constituents want and need. But during this pandemic, we have seen some of the most egregious examples in recent history.”
40) National: As high stakes negotiations continue over the shape and size of the next coronavirus relief package from Congress, all hands are on deck to get Congress to immunize private, non-profit corporations from liability in the courts for exposing their workers to infection. Last week the corporate-funded American Legislative Exchange Council laid out model legislation on this subject during its annual meeting (PR Watch has revealed the sponsors and attendees). “Factory farm interests, behind the scenes, have also directly shaped the policy process. Smithfield Foods, records show, maintains a team of federal and state lobbyists deployed to promote liability concerns around Covid-19.”
41) Milestone: Congratulations to Ed Heinzelman for the 10th anniversary of his first post at the terrific site Blogging Blue, about all things Wisconsin. Among this week’s items, “Wisconsin’s Two Confederate Traitors…”