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This Week’s Outsourcing Scan 1-9-2017

1) National: Senate Republicans and the incoming Trump administration have stacked up a flurry of confirmation hearings this week, including for cabinet secretaries who will be closely involved in privatization issues—such as Betsy DeVos (education), Jeff Sessions (DOJ/Bureau of Prisons/U.S. Marshals Service), Wilbur Ross (Commerce), Gen. John F. Kelly (DHS/Immigration and Customs Enforcement), and Elaine Chao (Transportation, infrastructure and privatization). Trump has yet to nominate someone to be Veterans Affairs secretary. No date has been set for hearings for Rep. Tom Price (R-GA), who has been nominated to head HHS, and thus would be at the center of any battles over privatizing Medicare and Medicaid.

2) National: Writing in USA Today, Jeremy Mohler of In the Public Interest warns against letting for-profit companies take over prisoner reform. “The fact that the number of people incarcerated in for-profit prisons continues to decline suggests that the future of private prisons in the U.S. is anything but certain. But the companies, ever the salesmen, have a backup plan. As fewer people have been sent to prisons and jails in recent years, the industry has diversified beyond the business of incarceration. (…) By diversifying into community corrections, the same multibillion dollar industry that enabled the country’s addiction to incarceration could dramatically shape how we recover from that addiction.”

3) National: Prison strike organizers target food service contractor Aramark. “The shift toward privatization has been called a ‘prison-industrial complex’ by the Free Alabama Movement and justice reform advocates, who add that it has created an economic incentive to keep inmates in jail. And on Sept. 9, the anniversary of the Attica takeover, thousands of inmates across dozens of state prisons went on strike to rail against it. There were reports of pepper spray, teargas and zip ties at Kinross Correctional Facility in Michigan before hundreds of people believed to be involved were transferred to other facilities. Inmates across the country were also censored, prevented from receiving newspapers and put in isolation. ‘That was the first wave,’ [movement spokesperson Pastor Kenneth Glasgow] said. ‘This is the second wave.’” On Jan. 14, leaders of the Free Alabama Movement, which led a national prison labor strike that began on Sept. 9, will bus from Alabama to Washington, D.C., to join a civil rights march and protest the company.

4) National: Intelligent Discontent, Montana’s intrepid progressive blog, tells us “A Few Important Things to Know about Ryan Zinke, Potential Interior Nominee.” They say, “while Zinke has recently positioned himself as some sort of maverick Republican bucking his party when it comes to selling off public lands, he’s a recent, and uncommitted convert. In the same week he trumpeted his independence from his party, he voted for HR 2316, which would allow the transfer of millions of acres of federally managed, public lands. Worse yet, he signed a pledge in 2012 calling for the transfer of federally managed public lands to state control. This paragraph, from February 2015, shows just how little trust we can have in Zinke when it comes to a consistent, honest position on public lands…” No date has been set for Zinke’s Senate confirmation hearings.

5) National: Kojo Nnamdi of WAMU takes a look at anxiety among federal workers about the incoming Trump administration and explores how the transition is affecting morale. “President-elect Donald Trump and the Republican-controlled Congress have sent ripples of uncertainty through the civil service with calls to ‘drain the swamp’ and shake up Washington bureaucracy. With job protections and benefits potentially under threat, federal agencies are scrambling to secure new hires, while some long-time civil servants are weighing whether to stay under an administration that seems hostile to their mission.” [30 minutes]

6) National: Wall Street and the energy industry are hungrily eyeing the Tennessee Valley Authority, speculating on how much money they could make if Trump privatizes it. “If the government’s stake in TVA can fetch $20 billion… the ‘privatizers’ in the new administration will take notice. And perhaps sooner than later. If interest rates continue their rise, TVA’s considerable debt costs more to service and the prospective value of its equity will decline. Higher interest rates invariably depress the value of all bond like utility stocks. So if they’re going to sell, sooner may be better.” But, “the privatization price may have to be adjusted for the debt situation, another way of saying the government may get stuck with some of the debt.”

7) National: The U.S. Postal Service is pulling the plug on its ‘public private partnership’ with Staples, which attracted sharp criticism as a foot in the door for privatization. “Workers protested and demonstrated outside of stores, and the union successfully argued its case in front of the National Labor Relations Board. The union said it received a letter from the Postal Service just before Christmas, saying the Staples shipping program would end by March. Its president, Mark Dimondstein, planned to share the news with union members Thursday afternoon. ‘It’s been a three-year battle, and we feel good,’ Dimondstein said. ‘We think we stood up against a wrong and won.’”

8) National: Trump’s pro-privatization nominee for education secretary, Betsy DeVos, and members of her family, are major campaign donors to the senators who will vote on her nomination. “Sen. Patty Murray (Wash.), the HELP committee’s ranking Democrat, said this week that after speaking with DeVos, she continues to have ‘serious concerns’ about the nominee’s ‘long record of working to privatize and defund public education, expand taxpayer-funded private school vouchers, and block accountability for charter schools, including for-profit charter schools.’ Murray also said she is concerned about DeVos’ “’extensive financial entanglements and potential conflicts of interest.’ Of the 20 sitting senators who received money from the DeVos family during the past four years, Marco Rubio (R-Fla.)—who ran two campaigns in 2016, for president and then for Senate—was the biggest beneficiary.” [Betsy DeVos’ filing with the Senate HELP Committee]

9) National: Daily Kos is circulating a petition opposing the privatization of air traffic control. “If we give up control of this vital public good, we leave hardworking Americans, travelers and our airspace vulnerable to the whims of a private corporation controlled by corporate airlines.”

 

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10) Alaska: The Alaska State Employees Association files suit to block the state’s attempt to downsize the Department of Transportation staff and privatize the majority of the agency’s design team. “The grievance says plans to privatize union member positions must first have a feasibility study or an opportunity for the union to submit alternate proposals. ‘It’s only fair to our members and it’s part of the contract that there be some justification if they’re going to privatize jobs,’ said ASEA Executive Director Jim Duncan.” The Department of Administration has 20 days to respond.

11) Arizona: The transportation department is bidding out for legal advisory services on ‘public private partnerships.’ Bids will be opened by AzDOT on January 18.

12) Florida: AFSCME Local 118 cries foul and files grievances as the Miami-Dade School Board starts outsourcing school services to for-profit companies. “‘It’s work the employees are supposed to be doing,’ said AFSCME local president Vicki Hall. AFSCME workers are generally the lowest-paid union members working for the school district; they include custodians, maintenance employees, bus drivers and food service personnel. ‘It weakens the union when they outsource and take away jobs from the employees who should be doing the work,’ said Terry Haynes, the AFSCME local’s senior vice president. He estimated the two contracts cost 10 to 15 school district jobs.”

13) Illinois/National: Writing in Crain’s Chicago Business, Susan J. Popkin, a senior fellow at the Urban Institute in Washington, D.C., takes a look at what Chicago learned from privatizing some affordable housing. “With the potential for big changes under the Trump administration, we must convince private companies already engaged in the affordable housing sector of the value in providing support services. We must work with them to ensure their financing plans include the necessary funding for such programs. If that doesn’t happen, the poorest tenants in mixed-income housing could have problems that make such developments less attractive to higher-income residents who pay more rent and are integral to the developments’ economic sustainability. The CHA and its private-sector partners could lead the way for the rest of the country when it comes to ensuring that mixed-income developments continue to serve even the neediest tenants.”

14) North Carolina: Lindsay Wagner, the A.J. Fletcher Foundation’s education specialist, offers “an accountability and transparency wish list for 2017” for North Carolina’s school voucher program. “Conversely, transparency and accountability is something we don’t have for our nascent school voucher program, which is scheduled to shift up to $1 billion in taxpayer dollars over the next ten years to private schools that are not required to adhere to any curricular standards or assess students in a way that is comparable to public schools. Our voucher program is one of the least accountable and transparent when comparing program participation standards to that of other states in a document authored by the National Conference of State Legislatures. We need to ask more of a program that could spend billions of taxpayer dollars on education.”

15) Pennsylvania: Washington County attorney Gary Stout looks at the human cost of nursing home privatization. “Privatization is defined as a public service taken over by a for-profit business, with the primary goal of profit, not service. When a for-profit business begins operating a health center—or hospital, prison, fire department or toll road, as the case may be—the business cuts costs to increase profits and satisfy its investors. In return, the public entity receives either a lump sum payment or a long-term cost saving, relieving its taxpayers of an ongoing financial burden and management headache. The most common actions undertaken by private concerns to increase profits following privatization include: eliminating unions; raising prices to consumers; cutting worker benefits; expanding working hours; and terminating long-term employees who earn the most. More troubling, in a nursing home setting, cutting services to residents might be a prime cost-cutting feature.”

16) Tennessee: The Knoxville News and Sentinel, citing the unacceptable performance of CoreCivic at running the Trousdale Turner Correctional Center, calls for Tennessee to phase out the use of private prisons. “Privately run prisons are not a better alternative to state-run facilities. The U.S. Department of Justice last year announced it would phase out the use of privately-run prisons after an Inspector General’s report found shortcomings in safety, security and oversight at facilities managed for the federal government. Tennessee should follow the Justice Department’s lead. The state’s prison system is crumbling, and it is the duty of state government to correct its deficiencies. Farming out prison operations is not sound management; it is shirking responsibility.”

17) Virginia/District of Columbia: Commuters are shocked as Transurban jacked toll prices up to over $30 on its privatized express lanes when VDOT plows started clearing roads during last Thursday’s snowstorm. “I mean, it’s kind of like using us as ATMs,” said one driver.

18) International: Blackwater founder Erik Prince—the little brother of schools privatizer Betsy DeVos—writes an op-ed in the Financial Times urging the European Union to privatize its Libyan security operations in order to stem the flow of refugees. Prince believes that “by using five patrol bases that cover existing smuggling routes, security personnel could quickly establish base camps, alongside a new border force, and secure Libya’s borders. (…) This approach requires a new way of thinking but it has a proven record. The border police I established in Afghanistan used a similar private-public partnership.” [Sub required]

In response, human rights lawyer Sarah Kay asks, “what’s more profitable than jumping into a glaring lack of [EU] leadership? (…) Prince’s constant insistence that such deployments are not just beneficial to states but also inherently carry humanitarian values is misguided. Ultimately the outsourcing of crucial elements of policy enforcement isn’t new and reflects a defeatist acknowledgement of institutional failure. The (mis)handling of the refugee crisis by the EU is often cited as a perfect illustration of the institution’s shortcomings. Weighed against the toll of human suffering, it is unforgivable.” Belen Fernandez says that “in peddling his alleged antidotes to crisis, Prince is symptomatic of a far more profound one.”

19) International: SaveOurWater.CA and Wellington Water Watchers are accusing Nestlé Waters Canada and the Township of Centre Wellington of a backroom deal to privatize water—a “scheme that will jeopardize the local water supply.” The Council of Canadians has called on the province to expropriate the well from Nestlé and give it to the local municipality.

20) Think Tanks: Nikki Fortunato Bas, executive director of the Partnership for Working Families, calls for a greater focus on local politics. “We think there’s a lot of importance in protecting local democracy. It’s in the communities [where] we live [that] we’re most connected to the need of our neighbors, and lawmakers are most connected to the needs of their constituents.” PWF’s Community Benefits Toolkit is designed “to harness the power of your city to make real change.”

Legislative Issues

1) National: ALEC plots out ways to move its agenda in the statehouses. “The American Legislative Exchange Council … briefed its members and allied groups on the bright future for its agenda now that Republicans will effectively control 68 of the nation’s 99 state legislative bodies, as well as 33 governor’s mansions. Among other things, group members said they would push bills to reduce corporate taxes, weaken unions, privatize schooling and influence the ideological debate on college campuses. ‘We can pretty much do whatever we want to right now,’ said Rep. Jim DeCesare, a Republican state legislator in Kentucky, where the party gained the state House for the first time in nearly a century.” Among the goals will be ideological policing of publically-funded colleges and universities. “There’s going to be a lot more aggression on this,” said Inez Feltscher, the director of ALEC’s education task force.

The Modern Language Association’s annual meeting voted 104 to 8 to approve a resolution expressing alarm at President-elect Trump’s threat to violate “core principles of democracy and academic freedom,” and endorsed the American Association of University Professors’ defense of academic freedom. In its resolution, AAUP pledged to “oppose the privatization of our public higher education system and fight for higher education as a common good, accessible and affordable to all.”

2) National: The reemergence of a rule to enable Congress “to vote to cut the pay and jobs of individual workers or groups of workers without getting input from the agencies where these employees work,” alarms federal workers. American Federation of Government Employees President J. David Cox says “the jobs and paychecks of career federal workers should not be subject to the whims of elected politicians. The Holman Rule will not only harm our hardworking federal workforce, but jeopardize the critical governmental services upon which the American people rely.”

3) National: Politico reports that Republican congressional leaders are slow-walking Trump’s infrastructure plan, which many expect to include a major push on private financing. The package “is beginning to fade on Capitol Hill, crowded out by other priorities on GOP leaders’ wish lists.” But U.S. Chamber of Commerce infrastructure advocate Ed Mortimer told Politico, “obviously we’d all love to know more about the plan, but I think we are going to have an infrastructure bill in 2017, which really is our number one priority.” OOIDA, the Owner Operator Independent Drivers Association, seems to agree. For a discussion of the state of play, check out their podcast. They expect something to materialize in the spring or summer.

Speculation is that a Trump infrastructure plan, however it is paid for, will focus on major projects. Right on cue, the U.S. Treasury Department has just released an extensive report it contracted out to Aecom on40 Proposed U.S. Transportation and Water Infrastructure Projects of Major Economic Significance. “The 40 projects identified for this study vary widely in their size and the magnitude of the net benefits generated. The total benefit-cost ratio across all 40 projects falls between 3.5 and 7.0. This means that if all the projects on the list were constructed, the nation would gain benefits in the range of $3.50 to $7.00 for every $1.00 spent on capital costs.”

Somewhat bizarrely, the report says “municipal water supply and wastewater management projects are not included on our list of 40 economically important projects. Most such projects are driven by regulatory or service level requirements and not by economics.” (p. 14). But water, and energy, will surely be in the mix. Kelle Louaillier, the president of Corporate Accountability International, has warned that “Trump’s infrastructure plans will hamper access to clean water. (…) That agenda includes unfettered access to tax-exempt, private activity bonds and other public financing resources, like state revolving funds, that have historically supported public works projects. By inviting the private sector further into the management of our infrastructure, Trump risks spreading the water industry’s disastrous track record across the country.”

4) Kansas: A dynamic new coalition has been put together to take back the state from the Koch brothers and Sam Brownback’s lawmakers. “The Kansas People’s Agenda “hopes to give voice to those who are opposed to the direction the State of Kansas has taken under Brownback.” Since last summer their organizational meetings have “established common legislative priorities for each of 15 broad issues ranging from racial justice to infrastructure investment, health care access to voting rights. A complete summary is available at: http://www.kansaspeoplesagenda.org/our-issues.” The group is holding an important rally on Wednesday in the Capitol Rotunda.

5) Maine: Cynthia Phinney, president of the Maine AFL-CIO, applauds a bipartisan agreement to hold public hearings on the decision of whether to privatize a new forensic psychiatric facility at Riverview, one of Maine’s mental health facilities. She says this “is a major policy decision that legislators need to be involved in making. So far the administration has not answered key questions about what this facility would be like, who would run it, how much it would cost and what the standards of care and staffing would be. The mental health workers, acuity specialists, doctors and nurses entrusted with this work have serious concerns about a potential private prison corporation running a public health facility. There has been a disturbing national trend of private prison corporations seeking to privatize mental health institutions and undermining transparency and accountability.” 

During four hours of testimony on Thursday, lawmakers heard concerns about the proposal, including about civil liberties and due process for patients. “The union that represents the state workers at Riverview said it wants more information about the proposal. ‘As the workers who currently care for these patients every day, we have some serious concerns about the lack of information and transparency with the administration’s plan for a step-down facility,’ said Lisa Cromwell, a mental health worker at Riverview and secretary-treasurer of AFSCME Local 1814, in a prepared statement. ‘We agree that we need more beds with a step-down level of care, but we have yet to hear answers to key questions about how this facility will be structured and run.’”

But Gov. LePage has plowed ahead anyway
.

 

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