Privatization report: Former Trump appointee joins private prison corp | Nashville looks to outsource parking | 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

  • Trump’s former chief of staff, John Kelly, has joined the board of advisers of the corporation running the largest unaccompanied migrant children shelter.
  • The fight is heating up in Nashville over a plan to privatize parking, à laChicago.
  • The Gainesville Sun editorial board has denounced Florida lawmakers for diverting public education money to vouchers and charter schools.

EDUCATION

1) NationalLA Progressive digs into political influence peddling by the charter school industry under the direction of the California Charter Schools Association (CCSA). Sara Roos reports that “The charter industry lobby has expended a total of $91.4 million in California between 11/18/08 and 12/31/18, according to political financial information stored online by the Secretary of State.”

2) California: Education expert and former Long Beach superintendent Carl Cohen says California must reform its charter school law. “I must confess that I don’t have quick and easy answers for the three charter reform bills currently being considered by the State Assembly (AB 1505AB 1506, and AB 1507), but I do applaud [State Superintendent of Public Instruction] Tony Thurmond’s courage in taking on challenges that have largely been ducked by other state leaders for the past 27 years. For the sake of our students and families looking for the right educational opportunities in our state, I hope he is successful.”

3) Florida: The Gainesville Sun editorial board has denounced Florida lawmakers for diverting public education money to vouchers and charter schools. “Last week, Florida lawmakers voted to raid taxpayer money meant for public education to pay for middle-income families to send their children to private schools. They passed the measure despite these largely religious schools lacking the standards and other requirements that the state has piled on public schools. They passed the legislation despite the Florida Supreme Court rejecting a similar measure as unconstitutional in 2006. They even included $250,000 in the state budget for an expected legal fight but are surely expecting a positive outcome this time around before a state Supreme Court that had three new conservative members appointed by Republican Gov. Ron DeSantis. (…) He appears unconcerned with the consequences of continuing to divert money meant for traditional public schools to private and charter schools, while saddling traditional public schools with mandates that make it harder for educators to do their jobs and students to succeed.” 

4) Tennessee: Lawmakers gave final approval to Gov. Bill Lee’s school voucher program, which is estimated will cost in excess of  $330 million by 2024, despite pleas by Tennesseans to oppose vouchers (see video, about six minutes). “The program will apply to Davidson and Shelby counties. The state would shift money away from Tennessee’s Basic Education Program to fund the education savings accounts. That’s all existing funding, through a combination of state and local sources. Then an equal amount of money would go into a new school improvement fund for three years starting in fiscal 2021-22 when students can begin enrolling. That new fund would provide grants to Metro Nashville Public Schools and Shelby County Schools to make up for the money that the districts lose when the students participating in the ESA program leave a public school. That’s new money — $165 million over three years based on full participation in the program. There would also be administrative costs.” Joey Garrison (@joeygarrison), the national correspondent for USA Today, says “It still kinda blows my mind that Metro Nashville was fine with the city’s top lobbying firm also lobbying for the pro-voucher @TennesseeCAN.” 

INFRASTRUCTURE

5) National: The widely publicized meeting last week between President Trump, House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Charles Schumer (D) produced agreement that a higher target of $2 trillion in federal spending is needed to repair and upgrade America’s infrastructure, but congressional Republicans immediately threw cold water on the plan. “The resistance from Trump’s own party illustrates how quickly the bipartisan idea has been imperiled in Washington, as the president heads into his reelection campaign with no significant legislative agenda and besieged by congressional investigations. The infrastructure effort also underscores Trump’s penchant for talking up deals with Democrats behind closed doors—leaving his own advisers and congressional Republicans to reel him back.” 

In addition, top House Republicans are insisting that so-called public-private partnerships be part of any new plan, which Trump has opposed in the past. “GOP lawmakers, concerned that Democrats will propose raising or implementing new taxes, argue that going with public-private partnerships could help them stretch federal spending for infrastructure projects. But in the meeting, Trump reportedly referred to his administration’s previous infrastructure plan, which called for public-private partnerships, as ‘so stupid’ and argued that he was never supportive of the model because ‘you get sued.’ He blamed the past plan on his former top economic adviser Gary Cohn.” 

6) National: Preqin, which provides financial data and information on the alternative assets market, sees “unprecedented momentum in the infrastructure industry.” They say “enthusiasm for infrastructure has several drivers: the likes of China’s Belt and Road Initiative and the US Government’s infrastructure program have highlighted massive global infrastructure deficits, drawing new investors and capital to the asset class. (…) Of particular note are the largest funds currently in market: Global Infrastructure Partners IV and Brookfield Infrastructure Fund IV are each targeting $20bn, suggesting that these experienced fund managers anticipate a great deal of potential allocation from investors to infrastructure.” 

7) National: The Pittsburgh Business Times says Aqua America and American Water are thirstier than ever for aging municipal utilities. “As officials begin to crack down on the presence of the extremely resilient chemicals in drinking water, cash-strapped municipal water systems that already face high costs for infrastructure upgrades are under increasing pressure. It’s a national issue, but New Jersey and Pennsylvania—where local manufacturing of the chemicals and use of PFAS-containing firefighting foam at regional military bases spurred some of the most serious concerns—are at the center. (…) New Jersey and Pennsylvania are also each home to a major power player in the space—publicly traded water utilities American Water Works Co. and Aqua America, respectively—that are ready to step in. ‘[The wave of privatization] is only going to swell moving forward,’ said Richard Verdi, senior water equity research analyst at Atwater Thornton.” [Sub required] 

8) National/California: The Wall Street Journal reports that Macquarie, the Australian investment bank, has purchased a multiyear concession to run the Long Beach Container Terminal in Southern California. An executive from another bidder said Macquarie “hit the jackpot.”

9) Illinois: Despite vocal opposition, the Nokomis city council has approved a contract with Woodard and Curran to manage the city’s water and sewer systems. Commissioner-elect Jocko Nash  “asked again, ‘Why are you so adamant about signing this tonight? You passed off other issues on to us.  Why is it tonight this thing has got to be signed?  Why don’t you want us to deal with this?  Because if it goes south, is it going to reflect on you?’ (…) Nash maintained the incoming commissioners were not against the idea, but wanted to review the work done by the current commissioners before the city committed to the contract.  He felt that certain areas of the contract seemed too vague.  He also asked if any other alternatives had been considered.” The future of current staff is also at issue. “Commissioner-elect Derrick Durbin showed concern for the current employees and being able to keep their jobs. He stated he has problems with much of the wording of the contract, as much of what is being stated or has been stated at former meetings does not reflect in the contract. He stated that if it was not spelled out in writing it was not valid.” [“Council: Contract Approval Sparks Debate,” Daily Herald, May 1, 2019; sub required]

10) Missouri:Alderwoman Cara Spencer is redoubling her efforts to force a public vote on the privatization of St. Louis Lambert International Airport. “‘The public doesn’t need to weigh in on every little decision the government makes. We do elect leaders to take on issues,’ Spencer said. ‘But an issue this big, the city’s single largest asset—by a longshot—if we are going to hand it over and be a guinea pig across the country on such a matter, we really ought to have a very rigorous, healthy public dialogue.’”

11) New Jersey: The Hoboken city council has passed separate ordinances that ratified a renegotiated water contract with Suez. “In August, multiple water main breaks to the city’s antiquated infrastructure prompted the city to call for a new contract with Suez. The city filed a lawsuit, which has since been dropped, claiming the company mismanaged the water system. The new deal converts the concession model with Suez, formerly United Water, into a public water utility that will be operated by city engineers and its environmental services director, Jennifer Gonzalez. (…) Under the new deal, the city will retain the profits the system generates, while sending Suez an annual fee of $1.99 million to continue to operate and manage the system.”

12) Ohio: St. Clairsville is debating what to do with its water and wastewater systems. “The way leaders see it, there are two ways to go—privatization, or having the county take over the systems. The city is leaning toward the former, and also making changes to comply with the EPA.” A request for qualifications has gone out. “Public meetings were held on the topic, and many residents expressed concerns about that option. (…) The city’s board of control should make a decision in June, and then council would have to approve that.” Resident Brewster Martin has expressed concern after a fact finding trip last month that “there might be a rush. Aqua Ohio is basically a monopoly. They have no competition, and that concerns me right off the bat. We don’t want to give our water plant away.” Citizen activist Bill Brooks is also opposed to the privatization, as he explained to 106.3’s The River. [Video, about an hour]

13) Rhode Island: As part of a three-part series, Sofia Rudin asks if Providence’s water is the city’s to sell. “That set off a wave of public outrage. At community meetings this year, Cristina Cabrera was among the most outspoken opponents. ‘You just cannot gamble, you cannot put that up for monetization or privatization or leasing or capitalization, commodification, or whatever you want to call it,’ Cabrera said. ‘When you report to shareholders, profit is the bottom line. It is not the environment; it is not the people.’”

14) Tennessee: Nashville mayoral candidate State Representative John Ray Clemmons (D-Nashville) calls on Nashville residents to reject privatized parking. In a statement, Clemmons said “several concerns by my colleagues were confirmed by the Metro officials. Multiple cities across the country have shown that privatized parking is a failed model, as Nashville would no longer retain the full value of its parking or full control of our roadways. It would result in higher fees and fines, longer pay-for-parking hours, and allow for expansion of meters into residential neighborhoods outside the existing footprint. This deal would also make infrastructure and public transit improvements more difficult in the future, because any upgrade would require negotiations with a private company.”

CRIMINAL JUSTICE AND IMMIGRATION

15) National/Revolving door news: CBS News reports Trump’s former chief of staff, John Kelly, has joined the board of advisers of Caliburn International, the company operating the largest unaccompanied migrant children shelter. “Caliburn is the parent company of Comprehensive Health Services, which operates Homestead and three other shelters for unaccompanied migrant children in Texas. Prior to joining the Trump administration in January 2017, Kelly had been on the board of advisors of DC Capital Partners, an investment firm that now owns Caliburn.” Delaney Marsco, ethics counsel at the nonprofit Campaign Legal Center, told CBS “the fact is that when he was in the White House, the government took action that swelled the population of people that were in these facilities, and that benefited his former employer. That’s the exact kind of situation that is why we have the ethics clause.” Sen. Jeff Merkly (D-OR) says “he’s going to make $$ off imprisoning migrant children. It’s appalling, morally reprehensible and downright evil.” 

The Miami Herald reports “the announcement comes a few weeks after the government quietly granted the company a no-bid, $341 million contract.” Caliburn’s “chief compliance officer, Lynne Halbrooks, served as Department of Defense’s principal deputy inspector general from 2009 to 2011 and 2013 to 2015. She is included in a ‘revolving door’ database by an independent watchdog group of military officials who are now working for companies they used to oversee.” Business Insider reports “Tracey Valerio, a top official responsible for Immigration and Customs Enforcement contracting, resigned in April 2018 and became a paid expert witness in a lawsuit to defend a private prison and immigration detention company that was the agency’s biggest contractor, according to a Daily Beast report.” The case involved paying detainees $1 a day.

The Washington Post reports “it is the only for-profit company operating such shelters.” According to the South Florida Sun-Sentinel, Florida’s child-welfare agency has investigated six cases of alleged child sexual abuse at Homestead, “including two allegations that state records say involved staff and legal guardians caring for migrant children. Investigators later said there were no ‘indicators’ of abuse, but some lawmakers remain concerned.” See also The Miami Herald’s “Who’s Holding Immigrants in Florida? Private Vendors, Feds and County Sheriffs, Too.”

16) National: In a sweeping overview of prison privatization in The Nation, freelance journalist and Lecturer in Science & Writing at New York University Tim Requarth explains “How Private Equity Is Turning Public Prisons Into Big Profits.” Privatized services in public prisons “affect nearly everyone in the system,” he writes. “Because of this reach, the market for privatized services dwarfs that of privatized facilities. The private-prison industry’s annual revenues total $4 billion. By comparison, the correctional food-service industry alone provides the equivalent of $4 billion worth of food each year, according to Technomic, a food industry research and consulting firm. Corrections departments spend at least $12.3 billion on health care, about half of which is provided by private companies. Telephone companies, which can charge up to $25 for a 15-minute call, rake in $1.3 billion annually. The range of for-profit services is extensive, from transport vans to halfway houses, from video visitations to e-mail, from ankle monitors to care packages. To many companies, the roughly $80 billion that the United States spends on corrections each year is not a national embarrassment but a gold mine.”

17) National: Sasha Lilley of KPFA’s Against the Grain conducted a very interesting interview with Aaron Bobrow-Strain, author of The Death and Life of Aida Hernandez: A Border Story on “Who Benefits from the Militarized Border? The US-Mexico border is often in the news. But what’s usually missing is the cost of the border, both in human terms, and in terms of the political economy of the region itself—the deep entanglement of the livelihoods of people who live in places like Douglas, Arizona with the border industrial complex. Scholar Aaron Bobrow-Strain discusses the militarization of the border and its connection to deindustrialization and economic abandonment.” Bobrow-Strain, who is with the Walla Walla Immigrant Rights Coalition, discusses the courage and agency of immigrant detainees and the role of private, for-profit prison corporations.

18) National: Worth Rises has just released the 2019 edition of The Prison Industrial Complex: Mapping Private Sector Players. They say “we add 800 companies this year bringing our total coverage up to 3,900 companies operating within the PIC. We also added more data, including engagement in immigration detention and deportations.”

19) National/MississippiCoreCivic has announced the Federal Bureau of Prisons will not renew its contract at the Adams County Correctional Center, which opened in 2009 on U.S. 84 east of Natchez. “CoreCivic owns and operates the 2,232-bed facility that houses mostly prisoners who are illegal immigrants charged with re-entering the United States after deportation.”

20) National: Patricia J. Williams looks at the Orwellian implications of surveillance monitors embedded in ankle bracelets and other technologies provided by private, for profit corporations to criminal justice structures and beyond. “The social cost of 24/7 surveillance, then, is not merely the mechanization of our duties at work; it makes us uncreative robots in the process, forming us into obedient soldiers.” 

21) National: Writing in the Stanford Law Review, David S. Rubenstein & Pratheepan Gulasekaram ask some interesting jurisdictional questions as the debate over the treatment of immigrant detainees heats up: “What autonomy do states and local governments have to regulate, license, or otherwise monitor private immigration detention? More specifically, under what circumstances are private entities, by dint of their public contracts, shielded from subfederal law under the doctrines of preemption, intergovernmental immunity, and derivative immunity? And is there something unique about immigration that might skew the doctrinal analysis in favor of the federal government and its contractors?” 

22) California: Last Tuesday the Sanctuary State Contracting and Investment Act (AB-1332) was re-referred to the state assembly’s appropriations committee. OC Weekly has taken a look at whether Big Tech will pay a steep price for collaborating with ICE in California. It’s not only California. The Partnership for Working Families reports by email that “ALIGN and partners did a powerful action demanding that Amazon stop contracting with ICE.” ALIGNny says “sign the petition.”

23) International: A damning parliamentary report in Britain has denounced the “disastrous” part-privatization of probation services. “Richard Burgon, Labour’s shadow justice secretary, said: ‘Mr. Grayling’s disastrous decision to privatise probation has been a costly failure that has left our communities less safe. [HM Inspectorate of Probation found a ‘two-tier system’ between private Community Rehabilitation Companies and the National Probation Service]. The Tories must show that they have learnt the lessons of this failure and drop their ideologically-driven plans to sign yet more private probation contracts.’” Richard Seymour has prepared a useful timetable of privatization in the UK.

PUBLIC SERVICES

24) International: Democracy Now! Reports that Honduran lawmakers have suspended ratification of plans to privatize education and health services “after massive protests in the capital Tegucigalpa saw protesters clash with riot police. The bills have the support of the U.S.-backed president, Juan Orlando Hernández, but are deeply unpopular among doctors and teachers, who say they’re aimed at mass layoffs ahead of the wholesale privatization of Honduras’s education and healthcare systems.”

25) International: Thousands of demonstrators rallied in Queen’s Park last Tuesday to protest against Premier Doug Ford’s plans to privatize Ontario’s health-care system. “The rally, which was organized by the Ontario Health Coalition (OHC) and various unions, is taking aim at what the OHC is calling the looming ‘cuts, mega-mergers and privatization’ of the province’s health-care system. ‘They have no mandate to cut and privatize our health-care services,’ said Natalie Mehra, executive director of the OHC, from a stage during the rally.” OSSTF/FEESO, representing over 60,000 education workers in Ontario’s schools, from kindergarten to post-secondary, calls out “Step 3 in the Privatization Playbook—Create alternatives to the system.”

OTHER

26) National: U.S. District Judge Colleen McMahon said on Thursday that the Department of Justice effectively outsourced its investigation of Libor rigging at Deutsche Bank to the bank and its attorneys at Paul Weiss. The judge is reportedly “deeply troubled” by the practice. [Subs required]

27) Colorado: The National Employment Law Project (NELP) reports on an important victory against state preemption as lawmakers vote to repeal preemption of local minimum wage laws. “Similar bills have been introduced this year in Louisiana (HB422), Mississippi (SB2321), Indiana (SB82), Texas (SB161), Hawaii (HB96), Georgia (HB573), Virginia (HB2631), Kansas (HB2017); Oklahoma (SB713), New York (AB5441); and Kentucky (HB302).” Polling shows that people want local control, not state takeovers. The Progressive reports that “similar histories of state meddling in inner-city public education is also rearing its head across the nation, as privatization of traditional public schools has relied heavily on states’ suspension of local school districts. In fact, countering ‘state takeovers’ of local schools and school districts has become a central concern of a leading education justice #WeChoose campaign resisting the privatization of public education.”