In the Public Interest’s weekly privatization report

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1) National: The Sentencing Project has released a major new report on prison privatization, Capitalizing on Mass Incarceration: U.S. Growth in Private Prisons. “From 2000 to 2016 the number of people housed in private prisons increased five times faster than the total prison population. Over a similar timeframe, the proportion of people detained in private immigration facilities increased by 442 percent. The federal government and 27 states utilized private prisons operated by for-profit and non-profit entities during 2016. New Mexico and Montana led the nation in their reliance on private prisons with 43 percent and 39 percent of their prison populations, respectively, housed within them.”

Authors Kara Gotsch and Vinay Basti report that “political influence has been instrumental in determining the growth of for-profit private prisons and continues today in various ways. If overall prison populations continue the current trend of modest decline, the privatization debate will likely intensify as opportunities for the prison industry dry up and corrections companies seek profit in other areas of criminal justice services and immigration detention.” Five state-level case studies are included.

The report recommends: eliminating contracts with for-profit prison companies; expanding transparency requirements; ending the practice of incarcerating people far from home; and eliminating the federal bed quota for immigration detention.

For more on prison privatization see In the Public Interest’s report on how private prison corporations are primed to cash in on trump’s immigration executive order; and the Corrections Accountability Project’s reports, The Prison Industrial Complex: Mapping Private Sector Players, and Immigration Detention: An American Business.

2) National: In a court filing, the Trump administration suggests the privatization of immigrant family reunification. “‘The court filing is remarkable,’ ACLU attorney Lee Gelernt said. ‘The government is washing their hands of it, and saying we’ll try and do a little. They’re saying, “You all [the ACLU], find the parents.”” Melissa McEwan, Editor-in-Chief of,says“this is the privatization of compassion, by a government of sociopaths.” But Federal judge Dana Sabrow responded by ordering the administration “to appoint government officials who will take charge of reuniting the rest of the families, and submit a comprehensive plan for how they’ll help the parents who were deported without their children. ‘In reviewing the status report it appears that only 12 or 13 of close to 500 parents have been located, which is just unacceptable at this point,’ Sabraw added.”

3) National: The GEO Group held its quarterly earnings call, and their CEO George Zoley said “during the second quarter, we experienced higher utilization rates across our federal segment, which we expect to continue into the second half of the year.” GEO bought back 3.1 million shares of their common stock for approximately $70 million during the first half of this year, and is projecting 2018 annual revenues of approximately $2.3 billion.

On growth, Zoley said, “Looking forward to the balance of 2018, we remain optimistic about our ability to pursue growth opportunities across our diversified platform of real estate, management and programmatic solutions. There are several active procurements, which we are participating in, which total approximately 12,000 beds and could result in the opening of some of our idle or underutilized facilities. We are pleased that we’ve already begun to reactivate some of our idle capacity with the activation of our Folkston, Georgia Annex in the Eagle Pass, Texas facility.” Ann Schlarb, president of GEO Care, said “our focus on rehabilitation and recidivism reduction program is in line with criminal justice and prison reform efforts being undertaken at the Federal and State levels in the U.S. We expect that our efforts will allow us to pursue new quality growth opportunities across our diversified GEO Care division.” Brian Evans, GEO’s CFO, told investors “our growth CapEx is expected to be approximately $120 million in 2018, of which approximately $78 million was spent during the first half of the year.”

4) National: CoreCivic will hold its earnings call this Thursday at 11AM EDT.

5) National/Texas: National Public Radio looks at the economics of immigrant detention, focusing in on Willacy, which is operated by Management and Training Corp. (MTC), the third largest for-profit prison company in the U.S. “SHAPIRO: We requested an interview with the judge and with each county commissioner. They all either declined or didn’t reply. We also filed a public records request for the new contract between the county and MTC, and they haven’t responded to that either. Christina Patino Houle was at the courthouse that day. She’s with a local group called the Equal Voice Network. CHRISTINA PATINO HOULE: To put money on the table and to say if you lock up your brothers and sisters, we will improve the quality of your street, to position the well-being of few against the well-being of the collective—I think it is an absolutely false dichotomy.” [Rio Grande Valley Equal Voice Network]

6) National: The New York Timestakes an in-depth look at charges of abuse at some federal youth detention facilities operated by nonprofit private contractors. “Teenagers as young as 14 were strapped to the chair—some stripped down to their underwear—with their feet, arms and waist restrained by cushioned leather straps and loops, they said. Those who guards feared might spit on staff, said one former worker, got the mask—a mesh hood that covered their entire faces and heads. Sometimes, the detainees said, they were forced to wear it while in the chair.”

7) National/Arizona: Two workers at a immigrant youth detention facility operated by Southwest Key Programs, one of the largest government-contracted providers in the country, “have been charged with sexually assaulting immigrant teenagers, according to court records. They are the latest claims of abuse at government-contracted shelters that have a key role in the Trump administration’s hardline immigration crackdown.” ProPublica reports that Sens. Grassley and Feinstein have written a letter to the HHS inspector general requesting an investigation. “These allegations demonstrate a long-term pattern of abuse warranting a thorough investigation into the claims, including the process and procedure by which any guards or contracted staff are hired, trained, and vetted,” they wrote. State inspectors have found 246 violations at Southwest Key’s facilities, according to the Texas Tribune. The Tribunesays “taxpayers have paid more than $1.5 billion to private companies operating shelters accused of serious lapses in care, including neglect and abuse.”

8) National/Texas: Voxreports that five hundred fathers being held in the GEO Group-run Karnes immigration detention facility after reunification with their children announced a hunger strike last week “out of frustration and despair over being ‘restrained from our freedom as human beings,’ as one father put it.” @RAICESTEXAS identifies the risks they are taking: “We know that those being held against their will while trying to submit a credible fear claim are not being treated with dignity and care. Karnes staff has a history of abuses of power. This includes the last time a hunger strike happened, in which ICE held a meeting to let the mothers know if they continue to refuse to eat they would be classified as security risks or ‘unavailable’ to care for their children and therefore separated from them.” VOA reported one detainee saying in a letter, “we are desperate, we are tired of being incarcerated and we want to be released with our sons.” The letter said it represented 400 families.

9) National: MarketWatchreports that Trump’s “zero-tolerance” policy toward undocumented immigrants is driving institutional and individual investors to drop their investments in the for-profit prison corporations that are lining their pockets from the crackdown. “They’ve met with some success among institutional investors. Columbia University became the first U.S. university to pull its money out of private prison companies in 2015 following student protests and the University of California system followed suit a few months later. When Trump took office, attention shifted to private prison companies’ role in immigration detention. Citing Trump’s border policies, New York City became the first in the country to divest its pension fund from all private prison companies in 2017. This month, New York State’s comptroller announced that the state’s $206.9 billion pension fund will pull out of its direct holdings in private prison companies.”The Urban Justice Center published a guide this month with step-by-step instructions on how to divest from companies that detain immigrants.

Last Monday New York City Comptroller and Manhattan Borough President Scott Stringer and community organizerJavier H. Valdés called on cities and states to divest from private prisons. “In recent decades, private prison operators have opened facilities that detain immigrants and their children. This means that many times, when a mother escapes life-threatening dangers in her home country and arrives in the United States only to be imprisoned in one of these facilities, they profit. When a family seeking refuge in this country is put behind bars, they profit. When a new center needs to be opened because law enforcement officers are arresting more immigrants, they profit. This industry has turned human suffering into a billion-dollar business.”

10) National: Democrats who’ve accepted campaign cash from the for-profit prison industry are quietly returning the money. “Some people think it’s OK to speak out against [hard-line immigration policies] while at the same time being deeply in bed with a company that works with politicians to put more people in jail,” a Dream Defender told New Times. “So while a slew of Democratic politicians took to Twitter and cable news to slam the administration’s hardline border policies, some have also been cleaning up their books,” reports Mother Jones.

11) National: Dayvon Love, director of public policy for the racial justice think tank Leaders of a Beautiful Struggle, discussed Sen. Bernie Sanders’ proposal to eliminate the private cash bail system with Taya Graham of The Real News Network. Sanders’ proposal would eliminate cash bail on the federal level, offer money for state pre-trial services, and withhold grants for states that continue cash bail. “I think it’s important for those who are paying attention to the fight around bail,” says Love, “to keep track of the fact that the bail industry is going to use some of this whole thing around them making sure that they get people to court. But the data shows otherwise.”

12) National: Katie Parker, a research associate at the Democracy Collaborative, looks into the dangers posed by the possibility that Amazon will monopolize the world of government purchasing. “One element of Amazon’s business strategy has fallen under the radar, and this one could really bite where you live: its bid to dominate local government purchasing. In January 2017, Amazon won a contract with U.S. Communities, a purchasing cooperative made up of government agencies, school districts, and other public or nonprofit agencies. The cooperative wields the heft of its more than 55,000 members to negotiate better prices. With this contract, they can now opt to buy their goods through Amazon Business, which advertises greater product selection, free shipping, and pricing discounts. While the contract is a big boon for Amazon—a potential for $5.5 billion in sales over 11 years—recent analysis from the Institute for Local Self Reliance (ILSR) seriously questions how good a deal the public is getting out of this.”

13) National/New York: A problem-plagued charity has reaped millions in taxpayer dollars by shifting its business to immigrant children. “But an investigation into Cayuga’s history found that as the agency was shifting its focus to working for the federal government, problems were festering at its upstate campus. (…) Meanwhile, the federal government has asked Cayuga to increase its capacity to 900 children in the next month, said Alphonso David, the counsel for Gov. Andrew M. Cuomo, who said all agencies were required to report an increase to the state. Cayuga had not yet done that, so it was unclear, Mr. David said, whether it would still be receiving unaccompanied children coming from the border in the coming weeks.”

14) National: As the number of homeless people explodes, rents blow past affordability, the McMansion boom surges, Amazon plays housing hardball, and the federal government sits on the sidelines, San Francisco’s new mayor London Breed signs an $11B city budget that prioritizes housing and public safety. “When it comes to homelessness the city will spend an additional $60 million on an array of services, including $4.4 million on a navigation center for homeless youth, $12 million will go to rapid re-housing programs for those who have just become homeless and $6 million to fund street medical teams. ‘A first-in-the-nation program to bring treatment directly to people suffering from addiction on our streets,’ Breed said.”

15) National: The ‘public-private partnerships’ industry is apparently salivating over the prospect they could get access to a large federal infrastructure revolving fund Trump said he was considering earlier this year. Particularly appealing would be a relaxation of rules on what count as operating expenses in a P3, and the blunting of OMB scoring rules on proposed projects. For more see Covington & Burling’s Inside Government Contracting blog. P3s might, Covington says “find a home in the Revolving Fund.” Will the Senate pick up the idea, which Mick Mulvaney continues to push (p.4)? That depends on the outcome of the midterms.

16) California: A class action lawsuit brought by Equal Justice Under Law, a civil rights nonprofit, is confronting what it says is the extortion of prisoners by a for-profit electronic monitoring firm, Leaders in Community Alternatives (LCA). “While many reformers of the criminal legal system are touting electronic monitoring as a humane alternative to incarceration, this lawsuit raises some serious alarm bells about the punitive nature of this technology, especially when left unregulated in the hands of private providers. The case continues a trend of litigation concerning abuse by private companies handling probation and parole services.”

17) California: Rick Hennes says that because of the cost, if a charter school is approved Twain Harte public school students will “will lose $250,000 in the 2019-20 school year and would have to look at the following budget cuts: Eliminate one full time teacher; Eliminate all art instruction; Eliminate all music instruction; Eliminate the librarian; Eliminate all class trips; Eliminate school counselor; Eliminate purchases of classroom library books; Eliminate Safe School Ambassador; Eliminate Treehouse Program (addresses social adjustment for grades K-3).” Hennes has served as part time superintendent of the Twain Harte School District for the past two years. He has 39 years of educational service including nine years as a superintendent and lives in the Twain Harte School District.

18) California: The Vallejo school board has rejected a proposal for a charter school. “The district’s lawyer outlined the four legal grounds under which it was denied: It presents an unsound education program; It fails to specify a location where it hopes to operate; It is ‘unlikely to successfully implement the program’; It presents no reasonable descriptions. It was also noted that as proposed, the school would have a severe ethnic imbalance and no clear dispute resolution procedure, among other concerns.”

19) Colorado: Charter schools in the state are to get a funding boost due to new legislation. “Individual charter schools often enroll fewer students than public schools that operate within the school district, and critics of charter schools are concerned about the financial impact the bill will have on public school districts.” For more see In the Public Interest’s recent report on the damaging financial impact charter schools have on traditional community schools.

20) Florida: The Palm Beach County school board has thrown down the gauntlet to local for-profit charter school interests, placing a referendum on the November ballot to raise taxes. “Still, the board took a big risk. If the vote fails, the district loses not just the extra $110 million but the current $37 million. From what I’ve heard, there’s no backup plan. The board’s other risk was not sharing the money with charter schools. Board members cited an analysis by the Greenberg Traurig law firm that money for charters can come from only three sources. One is the Florida Education Financing Program—essentially, the state budget. The others are the Florida Lottery and a school district’s current tax, not this discretionary tax.”

21) Illinois: The Chicago Board of Education inspector general has found that a large charter school operator, Camelot Education, engaged in bid rigging with Barbara Byrd-Bennett, a convicted felon and former CEO of the Chicago Public Schools. Camelot may be banned from doing further business with the school district or heavily fined. “Schuler accused Camelot of quietly hiring Byrd-Bennett’s co-defendants and former employers, Gary Solomon and Thomas Vranas, as paid lobbyists to help skirt CPS’ procurement rules and with her aid, landing big contracts to open publicly-funded schools for students who’ve dropped out or are at risk of doing so.” For more see the Network for Public Education’s continually updated charter schools scandal page and this.

22) Indiana: In an editorial, the Fort Wayne Journal-Gazettemarks the public backlash against privatization of public libraries. “Library Systems & Services, a for-profit company, has become the nation’s third-largest library system, behind only the New York and Chicago public libraries. It promotes itself as many for-profit prison and school operators have done—promising savings through greater efficiency and innovation. But In the Public Interest, an advocacy group supporting democratic control of public goods and services, argues that what Library Systems & Services has done at the 82 libraries it manages has been to ‘slash employee pay and benefits to turn a profit while shrouding its dealings in secrecy. Last year it was hit with nearly $70,000 in penalties for wage and hour violations,’ writes Jeremy Mohler, a writer for In the Public Interest.”

23) Massachusetts: The possible expansion of Alma Del Mar’s charter school seats “is forcing New Bedford to face impossible circumstances.” South Coast Todayreports that “it is facing those circumstances because of the failure of the Legislature and governor to adequately reform the way public education is funded in Massachusetts. (…) It will undoubtedly hurt other New Bedford public school students who will be left behind with far less funding and significantly fewer resources to use in the city’s already struggling public school system. In addition, diverting millions of dollars in state school aid to New Bedford could even end up hurting the city’s police, fire and public infrastructure departments as officials are faced with tough decisions about where to spend its limited municipal resources. Further, it could pressure the city’s comparatively high property taxes as it struggles to meet net school spending figures.”

24) Montana: ACLU Montana denounces Gov. Steve Bullock (D) for renewing a contract with CoreCivic to continue running the Crossroads Correctional Center, a for-profit prison in Shelby, for two years. “The state of Montana has now committed to pour millions of taxpayer dollars into an industry that disregards constitutional rights, treats human beings as financial assets, and understaffs their facilities,” the ACLU said. “The contract is an enormous step backward for criminal justice reform in Montana.”

25) New Hampshire: A new charter school is opening up inside an empty department store at the Steeplegate Mall in Concord.

26) New York: A federal judge is allowing a lawsuit “accusing a Success Academy charter school in Brooklyn of harsh treatment of five disabled children to move forward to trial. U.S. District Judge Frederic Block of the Eastern District of New York preserved discrimination claims by five plaintiff children who attended the Success Academy in the Fort Greene section of Brooklyn, and who were disenrolled for breaking a disciplinary code that one attorney for the plaintiffs described as ‘militaristic.’ ‘Given the unrelenting nature of the disciplinary code, it is questionable whether Success Academy is a good fit for disabled children,’ the judge said.”

27) New York: Hudson Valley Charter School’s application is raising concerns in the Poughkeepsie community. A public hearing on the proposal was held last Wednesday. “Some are concerned that a charter school would harm Poughkeepsie’s public school district. ‘Our city, community and children have enough division already,’ said longtime local activist Mae Parker-Harris. ‘A charter school would make more division in the city.’ Charter schools are public, funded with tax dollars that follow students from their home districts. But while they get public money, they have fewer regulations and can operate by their own rules, often with longer hours than regular public schools, and no unions. There was reportedly opposition from some in the Poughkeepsie district when another charter proposal was on the table a few years ago. And elsewhere in the state, there has been friction between charter schools and the public school districts in which they are located.”

28) Ohio/National: Basketball star and business executive LeBron James has funded and backed the opening of a new public school for needy kids and families in his hometownof Akron. “All of that is worthy in itself, but what makes the school otherworldly is that it’s not a charter school,” writes In the Public Interest’s Jeremy Mohler. “James threw a no-look pass of sorts by working directly with the local public school district instead of against it. This isn’t former NBA player Kevin Johnson opening and pushing charter schools as mayor of Sacramento, California. Or ex-tennis star Andre Agassi teaming up with real estate developers to invest in charter school buildings. Charter schools drain money from traditional, neighborhood school students. (…) James made sure parents and Akron’s residents will have a say in what happens at I Promise School because they’ll be able to hold the elected officials that oversee it accountable.”

29) Pennsylvania: Just a few weeks before the start of the new school year, Wonderland Charter School in Ferguson Township is closing its doors, sending students and parents scrambling after they received email notification. “During the charter review, several people associated with Wonderland, including board members, teachers and parents, informed the board of directors of their concerns with the charter: ‘long-standing, calculated, inappropriate, and unlawful practices with respect to students with special needs,’ according to a letter to the board from Superintendent Bob O’Donnell.”

30) Rhode Island: The ACLU of Rhode Island has filed a suit against Achievement First Mayoral Academy for failing to make its transgender student policy availableas required under the state’s open records law. “The school said the request was sent to a principal who is no longer employed there.”

31) South Carolina/National: On Thursday the U.S. Attorney’s Office for the District of South Carolina reported that Early Autism Project, Inc., South Carolina’s largest provider of behavioral therapy for children with autism, paid the United States $8.8 million to settle allegations of fraud.

32) Texas/National: The Lubbock Planning and Zoning Commission has unanimously denied a proposal by GWB Real Estate to place a U.S. Immigration and Customs Enforcement processing facility in north Lubbock. “Raymond Olmedo, one of the speakers at the meeting, said he organized a Facebook group called ‘Lubbock Anti-ICE Coalition’ in reaction to this meeting. Olmedo said people all over the political spectrum have expressed concern with ICE. ‘People are not comfortable with ICE,’ Olmedo said. ‘People of all political tendencies have expressed serious concern about what ICE is doing and this is just facilitating things for them.’”

33) Think Tanks: New research looks at some of the costs involved when a community loses a local paper—especially on coverage of public financing. Dermot Murphy, assistant professor of finance at the University of Illinois at Chicago, joined FAIR’s Counterspin to talk about his research paper, “Financing Dies in Darkness?  The Impact of Newspaper Closures on Public Finance.” The paper was co-authored by Pengjie Gao of the University of Notre Dame and Chang Lee of the University of Illinois at Chicago. “Following a newspaper closure, we find municipal borrowing costs increase by 5 to 11 basis points in the long run.”

34) Think Tanks: New research explores the role of the private prison industry in setting policy. The private prison companies deny they try to lobby for expanded incarceration and detention. “We argue that private prison companies systematically influence House representatives politically when private prisons are located in their congressional district,” said California State University, Northridge political science professor Jason Morin. The paper, Expanding Carceral Markets: Detention Facilities, ICE Contracts, and the Financial Interests of Punitive Immigration Policy, costs $39.95]

35) Think Tanks: MuckRock has a new and improved Private Prison Project page. Check it out.

36) Upcoming Meeting: An industry-sponsored “P3 Bootcamp” is coming to Chicago on September 18, sponsored by the National Council for Public-Private Partnerships. Hosted by K&L Gates, P3 Great Lakes, and Faegre Baker Daniels.

Legislative Issues

1) National: Trump is said to be supporting a prison sentencing reform bill proposed by Republican senators at a White House meeting. The bill “would combine the prison reform bill passed by the House in May—the First Step Act—with four sentencing reform provisions that have bipartisan Senate backing, according to a source familiar with the meeting.” The bill is being heavily pushed by Trump son-in law Jared Kushner. Hardline Republicans like Sen. Tom Cotton oppose sentencing reform and prefer “prison reform,” but supporters are working on John Cornyn (R-TX) to see if they can put together a workable package.

2) New Jersey/National: State lawmakers are considering a novel approach to countering the disappearance of local news outlets—and along with them a source of vital information on local public issues. Direct public funding of local media. “Journalists and public officials described New Jersey’s undertaking as once unthinkable, raising ethical concerns and stirring fears of government intrusion. Yet there has been little outcry, underscoring for many local journalism’s precarious position and a growing willingness to experiment. ‘I think times have changed,’ said Louis D. Greenwald, a Democrat and majority leader of the State Assembly. ‘I think it’s one of the smartest investments that government can make to protect our democracy and our rights.’” Local journalism provides a rich source of information on privatization, outsourcing, and responsible contracting.


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