Privatization Report: Massive online charter school in Georgia hits snag | California hospital to be public again | and more

This week’s highlights

  • Weak oversight may doom the future of an online charter school, which, if approved, would be the second-largest public school in Georgia.
  • Chicago is again considering the privatization of the Port of Chicago.
  • California healthcare providers and residents are celebrating as a for-profit hospital is set to be returned to the public two decades after it was privatized.

Education

1) National: Rachel Cohen, writing in The American Prospect, maps out the various positions of leading Democratic presidential primary candidates in what she calls “The Charter School Primary.” She writes, “the turn against charter schools within the Democratic primary does not offer the industry an easy way to separate Sanders or Warren from the rest of the 2020 field. It’s part of a larger sea change on education within the party, though one that’s unevenly reflected so far across racial groups.”

2) National/Pennsylvania: The video is up of the excellent panel discussion at Netroots Nation on What Philly Taught Us: How Philadelphia Activists Beat School Privatization to Restore Local Control. Moderated by Jeff Bryant of the Independent Media Institute’s Our Schools, the panel included Kendra Brooks, formerly an organizing member and parent advocate/activist with Parents United for Public Education; Councilmember Helen Gym; Domingo Morel, an Assistant Professor of Political Science at Rutgers University, Newark; and Horace Ryans III, a young African-American student in the city of Philadelphia. The video is about an hour.

3) National: As the country is roiled by President Trump’s racist tweets and comments and chants of “send her back” by his supporters, a drama is playing out in a rural corner of Alabama involving a charter school, religious bigotry, and public school financing. “Just north of Mobile, the battle over a public charter school has spilled across social media, pitting neighbor against neighbor, dragging in state officials, giving rise to claims of bullying, and stoking religious fears. Local supporters of the charter school say they’ve been threatened. Workers have quit, saying they faced retaliation if they helped build the school. The charter’s champion was shot dead in a shocking, unrelated case, leaving supporters without their original leader as the furor grew.

“The firestorm is fueled in part by fear of a Muslim organizer unwelcome among many in the Christian community. Recently, Washington County schools made national headlines after 18 public school athletes were baptized on a high school football field. Opponents of the charter have called attention to the charter manager’s Muslim faith and questioned his motives for being in the county at all. (…) Opponents, including local school employees, have hammered away on social media, also arguing the school threatens current district funding by draining children from the shrinking public schools.”

“I just felt that this is an excellent opportunity for me to prove that in a small community where there is no option, no choice, parents are fleeing to find a proper education outside of this county,” said Dr. Soner Tarim, manager of the would-be school.

4) National: ESS, a substitute staff contractor, “will add capabilities to focus on the burgeoning charter school market.” The company has “announced that it has acquired Enriched Schools, a specialist firm focused on providing high quality substitute staffing services to charter schools around the country.” LA Enriched is headquartered in New Orleans. Its founder, Andre Feigler, is a Teach for America alumnus.

5) Arkansas: Bank OZK, a regional bank headquartered in Little Rock, tells investors “We’re trying to get more traction in affordable housing and charter schools verticals. Our subscription financing kind of specialty C&I business [Commercial and Industrial — ed.], we’ve got a really good transaction that we’re excited about there. That would be an almost $100 million transaction that we’re working on, have been working on for a number of months, couple of quarters now that seems to be coming to fruition.”

6) District of Columbia/Maryland/NationalMcDonald’s Corporation is expanding a pilot program including charter schools to DC and Maryland. “McDonald’s will partner with three local community based organizations, The Maryland 4-H Foundation, Latin American Youth Center, and LAYC Career Academy.” The Latin American Youth Center “serves over 5,000 youth and families through youth centers, school-based sites, and public charter schools in the District of Columbia and Maryland’s Prince George’s and Montgomery Counties as the Maryland Multicultural Youth Centers (MMYC).”

7) Florida: Gov. Ron DeSantis has approved a charter school executive to go onto the Jacksonville community college board. “Executive Director of KIPP Jacksonville Charter Schools Jennifer Brown will serve a four-year term. (…) She also is politically-connected: She offered remarks at this month’s re-inauguration of Jacksonville Mayor Lenny Curry. KIPP’s Gary Chartrand and John Baker are among the most significant players in this part of the state in big-dollar GOP establishment politics.”

8) Florida: A convicted Palm Beach businessman’s oceanfront mansion has sold for $30 million. “Pennsylvania-based lawyer and entrepreneur Vahan Gureghian, who has extensive ventures in charter schools, and his wife, Danielle Gureghian, bought the two-story, six-bedroom home about four miles north of President Donald Trump’s Mar-a-Lago estate.”

9) Georgia: The Atlanta Journal-Constitution reports that “A proposal for an online public school with as many as 8,000 Georgia students faces an uphill battle for approval after an official review cited concerns about weak oversight. The staff of the State Charter Schools Commission is recommending the denial of Destinations Career Academy, which, if ultimately approved, would become the second-largest public school in the state.”

10) Idaho: Karen McGee, a former president of the Idaho State Board of Education and director of the Idaho State Board of Education, says the leaders of Idaho’s charter school efforts are not fit for the job. “The Idaho Charter School Movement is failing. The schools are not failing. The leadership is failing. The goal was to create choice for parents and schools. The leadership has created a new bureaucracy focused on power and competition.”

11) KentuckyRepublican Gov. Matt Bevin and his Democratic challenger Andy Beshear have clashed on education policy. “Some of their sharpest disagreements came on charter schools and proposed changes to the state’s Medicaid program. Beshear, the state’s attorney general, said both policies would hurt two pillars of rural Kentucky — public schools and hospitals. Beshear says charter schools would divert money away from public schools. ‘We’ve got to make sure that we have a governor that’s not supporting for-profit, charter schools that will run your systems of education out of town,’ he said.”

12) Louisiana: New Beginnings, one of the oldest charter school companies in New Orleans, is surrendering its charters amid a scandal involving “incredibly disturbing” management problems. Raphael Gang, president of the New Beginnings board, “whose voice wavered as he spoke to members of the school community, said that an internal investigation had turned up “incredibly disturbing” information but that he was prohibited from sharing the results at this time. ‘It has been one of most difficult things I have ever gone through, to learn about things that have happened to our students,’ Gang said. ‘It’s one of the most depressing things I’ve seen in my entire career.’”

13) Massachusetts: Tri-Town school districts are switching their outsourced custodial services because of poor performance. “Facilities Director Gene Jones told the school committees that several years ago the school districts made the move to outsource custodial services, but the company they chose ‘didn’t work out well.’ According to Jones, some of the contracted services weren’t being performed regularly, and creating a checklist to enforce custodial procedures was unsuccessful. (…) The committee approved a one-year custodial contract with FM & M (Facilities Management and Maintenance), a non-profit, union-represented custodial firm.”

14) Missouri: The St. Louis Development Corp. has approved federal new markets tax credits for charter schools. “Up to $8 million in the federal credits will go to KIPP St. Louis, which runs five charter schools in the city. The system wants to use credits to help finance the acquisition and renovation of a building at 3740 Marine Avenue for a new elementary school, which will be its sixth location. That building formerly housed the St. Louis Language Immersion School, which moved to Pine Street downtown. The project will cost about $7 million.”

15) Oklahoma: The Associated Press reports that “the founders of Oklahoma’s largest virtual charter school embezzled millions of dollars in state funds through an illegal scheme that involved the use of ‘ghost students’ to artificially inflate enrollment numbers, investigators allege. Oklahoma State Bureau of Investigation agent Tommy Johnson outlined the allegations in an affidavit for a search warrant of an Epic teacher’s home filed late Monday in Oklahoma County. Investigators seized a laptop and mobile phone during their search.” Epic charter schools has denied the allegations. Gov. Kevin Stitt (R) and State Superintendent Joy Hofmeister (R) are calling for an investigative audit of Epic Charter Schools.

16) Pennsylvania: Auditor General Eugene DePasquale has released audit reports for several school districts. “The Department of the Auditor General audits school districts, charter schools, intermediate units, and area vocational-technical schools. The audit assessments include whether school entities received the state subsidies and reimbursements to which they were entitled, accurately managed taxpayer funds, and complied with ethics codes. The audits also determine whether teachers and administrators were properly certified for the positions they held during the audit period.”

17) West Virginia: In an editorial, the Register-Herald scores lawmakers for focusing on charter schools instead of educational needs. “While Senate President Mitch Carmichael and his Republican minions were spending inordinate time this legislative season on behalf of charter schools in the name of education reform, much policy was left off the table and many important voices were left out of the discussion. The end result? Reform is still desperately needed. You don’t need to study the menu long to see the veritable smorgasbord of issues begging for attention in West Virginia. High on the priority list, however, should be education. What is also clear, disappointing and contrary to progress is that the legislative agenda in this particular matter is being guided by those with a profit motive — not those who have a genuine interest in shaping the education of our children. (…) But charter schools? They fix nothing that’s broken. But we do know who they serve and it’s not the school children of this state.”

18) Think tanks: Education historian and privatization opponent Diane Ravitch reports that “Laura Chapman has been doing research on the Center for American Progress, which the media views as the voice of the Democratic Party. This may be the most depressing thing you read today. It calls for a return to the principles of No Child Left Behind and Race to the Top. Both failed. CAP wants to resuscitate the worst features of both.” The CAP document, A Quality Education for Every Child: A New Agenda for Education Policy, which can be found here, calls for “bringing a balanced approach to charter school policy.”

19) Think anks: John D. Singleton, a University of Rochester economics professor, has published an article in American Economic Review on “Incentives and the Supply of Effective Charter Schools.” He writes, “charter school funding is typically set by formulas that provide the same amount for students regardless of advantage or need. I present evidence that this policy skews the distribution of students served by charters toward low-cost populations by influencing where charter schools open and whether they survive. To do this, I develop and estimate an equilibrium model of charter school supply and competition to evaluate the effects of funding policies that aim to correct these incentives. The results indicate that a cost-adjusted funding formula would increase the share of disadvantaged students in charter schools with little reduction in aggregate effectiveness.” [Sub required]

Infrastructure

20) NationalAmerican Water Works, a major privatizer of public water systems, will be holding its earnings call on Thursday, August 1 at 9 am ET.

21) California: Metro is looking for a private contractor to help plan a rail route through Los Angeles’s notoriously congested Sepulveda Pass. “This month, the agency’s Board of Directors will consider whether to allow staff to negotiate pre-development agreements allowing private contractors to participate in the project’s early design process, and eventually to submit bids for its construction.”

22) Illinois: Chicago is again considering privatizing the Port of Chicago, WTTW says in a video report. The developer would be able to keep most of the profits for a number of years after making a $100 million investment. Ald. Susan Sadlokski Garza opposes the privatization proposal (at 4:52), saying the state and city should invest more money.

23) New York: Aren’t P3s supposed to do things quicker and cheaper than public works projects done by governments? The Port Authority is learning otherwise. “Port Authority officials had said that a public-private partnership with a developer was faster and more efficient than if the Port Authority had embarked on the renovation itself. The Port Authority agreed to pay $83 million for the renovation. A consortium of developers, George Washington Bridge Bus Station Development Venture LLC, agreed to pay $100 million and cover cost overruns. In return, the consortium won the right to operate 120,000 square feet of commercial real estate under a 49-year lease. The Port Authority argued in court that because the developer contracted with Tutor Perini, the agency wasn’t responsible for project delays and cost overruns. But Tutor Perini says in its lawsuit that the Port Authority caused delays and added costs by changing design plans, forcing the contractor to use unsuitable equipment and directing Tutor Perini to perform extraneous work on nearby subway tunnels and streets.” [Sub required]

Criminal justice and immigration

24) National: In the Public Interest, the Public Accountability Initiative, and the Center for Popular Democracy have issued an updated report showing that private prison companies stand to lose $1.9 billion as Wall Street banks sever their ties. “This year, JPMorgan Chase, Wells Fargo, Bank of America, SunTrust, BNP Paribas, and Fifth Third Bancorp publicly announced that they would no longer provide any new financing to the private prison industry. Together these six banks represent an estimated $1.93 billion, or 72% of the total current financing available to private prison companies, CoreCivic and GEO Group. These commitments are landmark victories for the movement to end Wall Street’s financing of the private prison industry. It is the result of years of coordinated action, including the hard work of the coalition of organizations working under the banners of #FamiliesBelongTogether and #BackersOfHate.”

Writing in Forbes, Morgan Simon says the report “demonstrated just how much pain private prison companies are feeling. (…) This is especially threatening to the industry given how dependent private prison companies are on outside financing, in large part due to the fact that the companies are organized as Real Estate Investment Trusts (REITs).”

25) National: After examining tax filings, the Washington Post reports that six officials at Southwest Key, the Austin-based nonprofit that houses thousands of migrant children for the federal government, made more than $1 million in 2017. “In a 2018 interview, [founder Juan] Sanchez said the increase between 2015 and 2016 came from a retirement contribution rather than a salary bump. He said that in Southwest Key’s early years, they ‘had nothing. No benefits, no 401(k), no insurance. We just go out there keeping kids out of prisons and jails.’”

26) NationalCoreCivic has announced its second quarter 2019 earnings release and conference call dates — August 5 and 6 respectively. GEO Group has also announced the date of its earnings and conference calls — July 30.

As of Friday’s close, since the beginning of 2019 the GEO Group’s stock price is down 12.49%; the S&P 500 broad index is up 18.74%. CoreCivic’s is down 6.73% since the beginning of this year, and down 25.66% in the past month.

27) National: Bruce Kamich, The Street’s in-house technical analyst, tells investors “Don’t Get Locked Into CoreCivic.”

28) National: So how much money has DHS/ICE awarded to CoreCivic so far this year? Check it out. To GEO Group? Check it out. How much has Customs and Border Protection awarded to Lockheed Martin over the past decade? How does $744,640,082 sound?

29) New York/National: WNYC’s The Brian Lehrer Show looks at When Tech Companies Empower ICE. “WNYC investigative reporter George Joseph and Albert Fox Cahn, Executive Director of the Surveillance Technology Oversight Project at The Urban Justice Center, talk about reports into how various tech and data companies like Amazon and Palantir Technologies help U.S. Immigration and Customs Enforcement track undocumented individuals. Plus a call from Maritza Silva-Farrell, executive director at ALIGN.” [Audio, about 30 minutes]

Public services

30) National: Sarah Anderson of the Institute for Policy Studies, Scott Klinger of Jobs with Justice and the Institute for Policy Studies, and Brian Wakamo of IPS explain How Congress Manufactured a Postal Crisis — And How to Fix it. “If the costs of this retiree health care mandate were removed from the USPS financial statements, the Post Office would have reported operating profits in each of the last six years. This extraordinary mandate created a financial ‘crisis’ that has been used to justify harmful service cuts and even calls for postal privatization. Additional cuts in service and privatization would be devastating for millions of postal workers and customers.”

In the Public Interest attended a congressional briefing last week “to help fight for a thriving and public future of the U.S. Postal Service. Communication is a crucial public good!” The briefing was held by A Grand Alliance to Save Our Public Postal Service, which live tweeted the event.

31) California: Healthcare providers and residents are celebrating as a for-profit hospital is set to be returned to the Watsonville and Pajaro Valley community two decades after it was privatized. “‘This victory is groundbreaking as it is one of very few times in the country that we have seen a for-profit hospital returned to the community,’ Malinda Markowitz, RN and president of the California Nurses Association/National Nurses Organizing Committee, said in a statement Friday. (…) ‘Seeing this hospital return to the community is not only important for Watsonville, but provides a path for other communities who would like to reclaim their hospitals,’” said Markowitz.

32) Michigan: Responsible contracting can save lives and protect communities. Last week Flint engineering contractors were sharply criticized for irresponsible behavior. “The incompetence of the city of Flint’s water consultants was a principal cause of the Flint water crisis,” Michigan Attorney General Dana Nessel said in a statement. “It has become clear through documents obtained in discovery that the consultants made repeated missteps and engaged in reckless behavior.”

33) New York: Ira M. Millstein, a life trustee and former chairman of the board of the Central Park Conservancy, writes in a letter to the editor of The New York Times to warn about the commercializing of Central Park by roping it off from the public for fundraising events. “I write to protest on behalf of the millions of citizens who use Central Park as it was intended by its founding fathers and Frederick Law Olmsted. It was intended to be, and is, the ‘People’s Park.’ The city is now commercializing the park, blocking out some of its manifold uses for a long period of time, to raise money for its general budget and profits from ticket sales for the promoter. This is the beginning of a slippery slope that opens the door to total commercialization.”

34) Pennsylvania: “About 40 percent of Drexel University physicians and clinical staff will lose their jobs as a result of the planned closure of Hahnemann University Hospital, Drexel president John Fry announced in an email to the university staff Thursday morning,” The Philadelphia Inquirer reports. Bisnow’s Matthew Rothstein reports that “Hahnemann University Hospital sits on a desirable plot of real estate in the north part of Philadelphia’s Center City and was purchased in 2017 by Joel Freedman and his private equity firm, Paladin Healthcare. A year and a half later, Freedman announced that Hahnemann was not profitable enough and would be forced to close, the Philadelphia Inquirer reports.” Eileen Appelbaum, co-director of the Center for Economic and Policy Research (CEPR) says “private equity has been active in the hospital space, but buying a hospital as a pure real-estate play is very rare. If PE is successful with this move on Hahnemann Hospital real estate, expect to see a lot more.”

35) International: The British Labour Party says that if it is elected it will insource billions of dollars worth of public services — including IT services. “Labour is set to mount a fresh assault on business with the shadow chancellor expected to set out plans to bring billions of pounds worth of outsourced public services back in house if it wins power. John McDonnell is understood to have drawn up draft laws that would force government departments to favor providing services themselves unless absolutely necessary. That would prove troublesome for the likes of Serco and G4S, which run prisons and house asylum seekers, and Capita, which assess benefits claims and runs Whitehall IT systems.” [Sub required]

Other

36) National/Revolving door news: In a dramatic confirmation hearing for Defense Secretary, Sen. Elizabeth Warren (D-MA) confronts former Raytheon lobbyist Mark Esper about his multiple potential conflicts of interest. The Center for International Policy’s veteran arms industry expert Bill Hartung has just written a comprehensive article on merger mania in the military-industrial complex. “As POGO’s research has demonstrated,” Hartung says, “the infamous ‘revolving door’ that deposits defense executives like Esper in top national security posts swings both ways. The group estimates that, in 2018 alone, 645 senior government officials — mostly from the Pentagon, the uniformed military, and Capitol Hill — went to work as executives, consultants, or board members of one of the top 20 defense contractors.”

37) National: As we celebrate the 50thanniversary of the first astronaut moon landing, Neil M. Maher, author of “Apollo in the Age of Aquarius,” raises the issue of privatization and public control. “Private spaceflight companies like SpaceX, Blue Origin and Virgin Galactic are bound to the interests of their shareholders, not the public. Unlike NASA in the late 1960s and ’70s, they can ignore criticism from the streets and focus instead on the wealthy who want to buy tickets to the stars. If we prioritize these commercial ventures at the expense of a robustly funded national space program, we distance space exploration from the public sphere, limiting our ability to guide and shape it. We also weaken our democracy. That is why this week, on the 50th anniversary of Apollo 11’s launch, we should not only celebrate the astounding accomplishment of landing two men safely on the moon. We must also applaud those who took to the streets to ground the space race in problems back on Earth.”

38) National: The National Conference of State Legislators will hold its Legislative Summit in Nashville from Aug. 5–8. Here’s the agenda.

39) Puerto Rico/National: As Puerto Rico is rocked by demonstrations demanding the resignation of Governor Ricardo Rosselló, an end to school privatization and much more, municipal finance expert Cate Long offers some crucial context: “I’m going to state this everyday: US multinationals operate in Puerto Rico and generate +$40 billion of net income there. PR govt taxes them < 4% on this income & companies get to credit 80% of that to their federal taxes. PR is the only bankrupt tax haven in the world.”

40) Think tanks: As readers of the Privatization Report know, critical information about privatization battles in education, infrastructure, criminal justice and immigration, public services and other areas is frequently developed by diligent journalists working the beat in newsrooms around the country. But Pew has just released a study that shows newsroom jobs fell 25% from 2008 to 2018, mainly in newspapers. Digital is not making up for it. “Since 2008, the number of digital-native newsroom employees has increased by 82%, from about 7,400 workers to about 13,500 in 2018. This increase of about 6,100 total jobs, however, fell far short of offsetting the loss of about 33,000 newspaper newsroom jobs during the same period.”

In the Public Interest

In the Public Interest is a nonprofit that advocates for democratic control of public goods and services.

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