Media Scans
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This Week’s Outsourcing Scan 1-25-2016

1) National: In the Public Interest launches a new campaign called Programs Not Profits. “A consensus is growing that is truly unprecedented. More and more Americans—including leaders from both political parties—agree that mass incarceration is neither cost-effective for taxpayers nor safe for our communities.

“But the private corrections industry, made up of companies that make more profit when more people are in the system, is an obstacle to change. For-profit private prison operators, like Corrections Corporation of America (CCA) and GEO Group, and companies that work in industries such as health care, telecommunications, and prisoner banking, have grown to provide an increased number of services to America’s correctional facilities.”

Programs Not Profits is a multi-year campaign that promotes replacing private profits that hurt incarcerated people, correctional officers, and taxpayers, with publicly funded and managed programs that provide job training, mental health care, and substance abuse treatment. Private companies are making a killing in the justice system.

ITPI executive director Donald Cohen writes “a new look at the industry shows that private companies profit from nearly every function of America’s criminal justice system. The industry’s scope is startling: companies perform functions like prison operation and immigrant detention, but even GPS ankle monitoring and residential reentry.”

2) National/Indiana: The disastrous poisoning of Flint’s publicly-run water supply causes others to ask if privatized water systems are also vulnerable. “Can Flint happen here?” asks the Crawfordsville Journal Review. The city’s water is provided by American Water, which has issued a press release on the situation in Flint.

3) National/International: Pearson, a major player in the for-profit education industry, axes 4,000 jobs to protect its dividends. The company’s stock is down 42% in the past year. According to Bloomberg, “the education company is underestimating the deep changes technology is having on its business and is ill-equipped to manage a sprawling operation that spans 80 countries.” Demand for textbooks is falling and college enrollment is down. “A political row has hurt Pearson’s sales of books and tests under a program of national educational standards called Common Core.”

4) National/Arizona: R&B recording artist John Legend and Latin singer and songwriter Juanes tour the Eloy immigration detention center, which is run for profit by Corrections Corporation of America. Legend is campaigning against mass incarceration in the U.S. “We’ve been a witness to what’s happening so we can tell the world about it,” Legend said. “We want to learn from the stories of the individuals; we want to affirm their humanity and their right to life, liberty and the pursuit of happiness, no matter where they are from.”

5) National: The Center for Constitutional Rights charges that the Obama administration is blocking its lawful FOIA efforts to find out how lockup quotas and remuneration rates are determined for immigrant detainees held in for-profit prisons. CCR senior staff attorney Ghita Schwarz says “private corporations that profit off detentions have grown to have enormous influence over how and where immigrants are detained. Now they are controlling what information the public can get about the immigration detention system. The government is using what are supposed to be narrow FOIA exemptions to protect the interests of private corporations.”

CCR reports that “the former head of ICE’s Enforcement and Removal Office, David Venturella, is now a high-level official at the GEO Group, one of the largest detention contractors in the country, and submitted a declaration in the government’s filing asking the court to keep his company’s contracts secret.” [The government’s response]

6) National: Corrections Corporation of America announces the dates of its 2015 fourth quarter earnings release (market close February 10) and conference call (11 Eastern, February 11). CNBC celebrity investment advisor Jim Cramer said last week that “I’m not on privatizing (in the prison business) and making money off of that.”

7) National/California: Reed Hastings, the founder of Netflix, is “creating a $100 million foundation to fund education, which mostly means bankrolling the charter school industry.” Steve Rosenfeld reports in Alternet that Hastings “has been at the forefront of helping the privatization movement gain a foothold in the state since the late 1990s, when he financed and led a state ballot measure that forced the legislature to loosen its restrictive charter regulations.”

8) National: GAO finds a risk that contract employees may be performing inherently government functions in DOE, DOD, and HHS research programs. “GAO found that some research participants’ projects involve activities that are closely associated with inherently governmental functions, such as participating in certain policy and strategic planning meetings, which may increase the risk of the participants performing inherently governmental functions. Development of detailed guidance could help sponsoring components reduce this risk and help officials better ensure adherence to the federal guidance on inherently governmental functions.”

9) National: Veteran educator Marion Brady offers a primer on schools privatization.

10) National: Berkery Noyes issues a report on 2015 mergers and acquisitions activity in the education sector.

11) California: Three pro-privatization Costa Mesa council members block efforts to bring efficiency to the city’s emergency response system, in which three vehicles arrive at every medical emergency. “Councilwoman Foley, who has been endorsed by the firefighters union, questioned why Righeimer voted at a past council meeting to fund the ambulance study if he had no interest in exploring models that increased the fire department’s role in those services. ‘It’s just outrageous,’ [council member Katrina] Foley said. ‘It’s a waste of resources.’”

12) California: Blaire Behrens, a veteran vocational nurse, says jail healthcare services desperately need county oversight after Corizon lays off 49 licensed vocational nurses at Santa Rita Jail in Dublin and the Glenn Dyer Detention Facility in Oakland. “The move threw the facilities’ health care services into chaos and put the health of Alameda County inmates at risk. Remaining staff are scrambling to meet inmates’ medical needs with far less time and far fewer resources, and the strain is showing. Santa Rita Jail is almost decimated. The remaining nurses are burned out and exhausted. They’ve been forced to work double shifts repeatedly since the layoffs were implemented, and are even bringing in supplies from home, since Corizon has failed to provide adequate equipment.” Corizon takes in $30 million a year from Alameda County taxpayers.

13) Florida: Charter schools in Broward and Palm Beach counties may close following an audit. “The Broward audit found numerous academic deficiencies at the school. It said the school failed to provide evidence that students were receiving the required instructional time for reading, failed to provide a ‘clear and comprehensive grading system,’ and failed to show it was following state law in regard to serving students with disabilities and limited English skills. The state is also penalizing the school by $200,000 because too many students failed their end-of-course exams.”

14) Illinois: Illinois American Water is asking for an 18% hike in water bills from the state commerce commission. “Homer Glen Mayor George Yukich, whose village is served by Illinois American Water, said the rate request is ‘ridiculous.’ ‘We would like to sit down with the ICC and give them our side of the story,’ Yukich said. ‘Water should never be in the hands of a company that is for-profit. It’s a rotten shame this is happening.’”

15) Iowa: A Polk County judge has refused to block privatization of the state’s Medicaid program. “Aetna Better Health and Meridian Health Plan claimed the bidding process was rigged and the state should do it over again.”

16) Michigan: Victor Gibson, a retired Detroit educator, and Russ Bellant, veteran Detroit labor activist and researcher, explain the origins of the crisis in the Detroit school system—which is now being administered by the same emergency manager, Darnell Earley, who forced through the change of water supply that caused the poisoning of Flint’s children. Bellant says “a huge amount of the money is going to contractors and to investors,” and that successive governors of Michigan conducted a “looting operation” on the DPS, “using it as a cash cow for friends and contractors and investors.”

17) Nevada/National: As in Iowa, concern grows over the possible privatization of Medicaid services in Arizona. Harry J. Schiffman, president of AFSCME Local 4041, says “in reality, privatization often fails.”  The Las Vegas Review Journal reports that “Schiffman said his union is against privatizing state services, period. There’s also a lot of unknown in terms of whether state jobs would be affected. ‘They cannot provide the same kind of care,’ he said of the managed care organizations. For state employees, ‘this is their careers, serving some of the most vulnerable in the state.’ State officials plan to have meetings with state employees to hear their concerns and input.”

18) New Jersey: Black Agenda Report’s Glen Ford takes aim at Atlantic City’s emergency manager regime and efforts to privatize the city’s water system and fire department. Last week Gov. Christie vetoed a rescue package for the city, raising suspicions that he’s trying to push it into bankruptcy. Mayor Don Guardian says he will fight a state takeover. “We will not tolerate the stripping of our God-given civil rights and right to self-governance.”

19) New Jersey: Dennis Township may outsource leaf collection. A resident “suggested that perhaps local landscapers could bid on the job since the Public Works Department does not seem able to handle the task of collecting leaves each season.” But “Another resident reported that Waste Management, which handles the trash collection, seems to miss her development on a regular basis.”

20) New York: Parents of 13 children and civil rights groups file a lawsuit against Success Academy, New York City’s largest charter school chain, run by Eva Moskowitz. The suit charges systematic discrimination against special needs kids. “Meanwhile, the State University of New York, which licenses charter schools, is planning to investigate Success’s alleged pressure tactics, according to a New York Post report.”

21) New York: A decision on whether Massena Memorial Hospital should privatize or affiliate with a network to get state aid is at hand. Pension payments are a key issue. “The board voted in December to allow MMH to start the process of severing municipal ties and becoming a private, non-profit organization.”

22) New York: The Belknap County Commission votes against privatizing the county’s nursing home. “Commissioner Hunter Taylor (R-Alton) said the nursing home ‘plays a unique role which cannot be filled by a private company. It’s a home of last resort for Medicaid patients and no private company can make money from it. The county needs to take care of its elderly.’”

23) Tennessee: Board of Regents Chancellor John Morgan has submitted his resignation, effective January 31. Morgan had removed, at least temporarily, “the state’s 13 community colleges and 27 colleges of applied technology from Gov. Bill Haslam’s plan to privatize management and operation of all state-owned buildings. But state officials said Morgan acted prematurely and that a decision should be made after the business justification for the outsourcing proposal is finished by mid-February.” The Commercial Appeal reports, “Morgan has expressed a number of concerns about Haslam’s privatization plan, particularly regarding the protection of building maintenance employees, who has ultimate control over campus buildings and grounds, and with expressly spelling out what services a building contractor will perform under contract.”

24) Texas: The Texoma Area Paratransit System (TAPS) wants to outsource the job of operating the system. “TAPS will delegate the responsibility of operating the entire TAPS organization to a private operator that is charged with implementing the policies of the TAPS Board of Directors. All operating, performance and cost risks reside with the contractor. All capital infrastructure including revenue vehicles and facilities is provided by TAPS.” Proposals are due February 15, 2016. [260-page RFP]

25) International: Montreal municipal employees are to go on an eight-day strike today. “The municipal employees are protesting against Mayor Denis Coderre’s decision to privatize and subcontract some of their work and reduce the overall budget for salaries by 12 to 14 per cent.”

26) Revolving Door News: Texas’ new ‘public private partnerships’ center will be headed by a former executive from the P3 industry—Ferrovial’s Samuel Franco. “The Texas Facilities Commission (TFC), the real estate representative for the State of Texas in the purchase of buildings, grounds and property, has named Samuel Franco as director of the newly created Centre for Alternative Finance and Procurement. Franco’s appointment comes the same day the Commission announced the opening of the Center, whose mission includes establishing best practices for procurement and the financing of qualifying public-private partnership projects.” [Sub required]

27) Think Tanks: The Salt Lake Tribune and the Hinckley Institute, run by Republican governor Gary Herbert’s former chief of staff, Jason Perry, conduct a poll purportedly finding that Utahans favor liquor privatization. But “while the Legislature has discussed privatization several times in the past, these proposals always face opposition from the Mormon church, some health officials and conservative lawmakers. More than 80 percent of Utah lawmakers are LDS. Gov. Gary Herbert recently said he opposes privatization because it could mean a loss of revenue to the state and cause higher rates of consumption.” The Libertas Institute, a Utah-based anti-government libertarian affiliate of the Koch-backed State Policy Network, voiced support for liquor privatization.

28) Upcoming Meeting: This Thursday in DC the Project on Government Oversight and Taxpayers for Common Sense will be holding a panel discussion on “taxpayers’ rights to a #fairshare of revenue made from extracting natural resources on public lands. The government recently announced the federal coal program is under review for the first time in 30 years.” The keynote speaker is Ali Zaidi, associate director for natural resources, energy, and science programs at OMB.

Legislative Issues

1) National: Senators Durbin and Leahy join with 20 of their colleagues to call on the Obama administration to halt deportation raids against undocumented migrants. “Additionally, we are increasingly concerned with the ongoing cost of this so-called deterrence approach. The administration’s decision to contract with the Corrections Corporation of America to construct and operate a massive detention facility specifically for mothers and children at an expense of $343 dollars per person per day costs the taxpayers over $800,000 a day. Setting aside our significant due process and humanitarian concerns, we simply reject the notion that this is a wise use of funds.”

2) National: Andy Slavitt, the acting administrator of the Centers for Medicare and Medicaid Services, tells a Senate committee that the Obama administration will soon release guidelines to help ACA co-ops attract private investment. “More than 500,000 consumers who had insurance through plans offered by failed co-ops had to find new coverage. Those consumers typically are paying much higher premiums and face higher deductibles with another insurer. Some may be on the hook for medical bills if a failed co-op can’t cover them.” Slavitt is a former UnitedHealth Group executive. He replaced Marilyn Tavenner, who became president and CEO of the insurance industry’s top lobbying group—America’s Health Insurance Plans.

3) Indiana: Republican lawmakers are breathing life into a privatization deal “that awarded a long-term lease to a well-connected Republican developer who wants to bring fine dining and a bar to the Indiana Dunes State Park, which conservationists have fought to keep free from commercial development for over a century.” Dunes Action’s Desi Robertson says “the public was loud and clear about no booze at the park. Now legislators are trying to reverse that by changing laws to cut out public input.”

4) Kansas: A hospital administrator tells lawmakers that trying to get reimbursed by the state’s three managed care corporations is “exhausting.” Lawrence Memorial Hospital’s director of compliance management, Susan Thomas, says “‘we deal with three different payers and there’s three different sets of policies. There’s three different sets of denial reasons. There’s three different sets of process rules. And often there’s three different responses to similar issues.” Rep. Barbara Ballard “recalled the promise of improved efficiency was one of the reasons Republican Gov. Sam Brownback gave for privatizing Medicaid in 2013.”

5) Kentucky: Some for-profit cable and telecom companies are pushing lawmakers and the governor to end the recently initiated project to create the best public broadband network in America, KentuckyWired. “The telecoms are getting backup from libertarian advocacy groups that object on principal to government-owned broadband networks. A common thread among these groups is that they have received money from billionaire brothers Charles and David Koch, who have given hundreds of millions of dollars to politicians and advocacy groups to try to limit government’s power to regulate, tax and provide public services.”

6) Michigan: Lobbying efforts by the private healthcare industry are underway to further privatize the state’s public nonprofit mental health system. “The Lansing-based Michigan Association of Health Plans has mounted a lobbying effort to gain state approval next year to bid for the potentially lucrative contracts that now are exclusively in the public health sector.”

The Michigan Association of Community Mental Health Boards “have warned state officials about the dangers that could face a vulnerable and needy population by allowing health plans to take over the state’s [$2.4 billion] mental health system. ‘This budget is pretty attractive to the health plans,’ said Bob Sheehan, CEO of the mental health board association. ‘They see that market, and they believe they can do quite well’ financially. Sheehan said the health plans underestimate the difficulty in caring for a complex population and their plans’ ability to earn high profit margins in behavioral health. ‘This is not a traditional market most health plans are used to serving,’ Sheehan said. ‘(We) treat the more severe cases that involve the additional complexities of poverty, housing, employment, disease and environmental concerns.’”

7) Oregon: Kristena Hansen of the Associated Press looks at some of the issues that will shape Oregon’s November referendum on liquor privatization. “State lawmakers are have already drafted a proposal, LC 196, for the upcoming short session beginning February 1. During a House Committee on Revenue hearing last week, lawmakers described it as a ‘contingency’ bill should the grocers’ initiative pass in November. It would tax the liquor that wholesalers—not consumers—purchase, and at a rate that aimed at sustaining the state’s revenue stream. However, the bill needs strong support to get the required two-thirds majority vote, so the final version could look drastically different from the current proposal.”

8) Pennsylvania: Two bills under review in the legislature would preserve but more tightly regulate the use of traffic enforcement cameras. “The Senate Transportation Committee recently approved an amended bill if passed into law would allow vehicles to proceed through red lights if sensors do not detect the vehicles, triggering the light to change to green. Another provision in the bill would also delay plans to rid the state of red-light cameras. The city of Philadelphia and some other municipalities use automated ticketing devices. Without legislative action to save them, use of the devices expires on January 1, 2017. HB950 would extend the sunset provision for red-light cameras by one decade to 2027.”

 

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