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This Week’s Outsourcing Scan 10-31-2016

1) National: Republican presidential candidate Donald Trump proposes that $137 billion in tax breaks be given to corporations to help pay for his $1 trillion infrastructure plan. The New York Times has reported that Trump has built his branding and real estate empire on inside connections and $885 million in tax breaks. Democratic presidential candidate Hillary Clinton has proposed to help pay for her federally-supported $275 billion, five-year infrastructure renewal plan through “business tax reform”—including reauthorizing the Build America Bonds program and creating “superBABs”.

2) National: Corrections Corporation of America/CoreCivic and the GEO Group will be releasing their profit reports this week and holding conference calls. The calls will be held this Thursday, November 3, at 9:30 am eastern time (GEO) and 11 am eastern time (CCA).

3) National: Corrections Corporation of America, facing unprecedented criticism of its central business model—incarcerating people for profit—rebrands itself as CoreCivic in an effort to present itself as a socially responsible company concerned with rehabilitation. “Alex Friedmann, a criminal justice activist at the Human Rights Defense Center and former inmate who served six years in a CCA facility, told [Casey Tolan of Fusion] he thinks the company’s name change is an attempt to escape a damaged brand. The CCA name has ‘become a liability due to its connection with higher levels of violence, sexual abuse, corruption and questionable cost savings at CCA-run prisons and jails,’ Friedmann said in an email. ‘CCA may have changed its name, but its business model, bad corporate practices and sordid history remain the same.’” Carl Takei of the ACLU boils it all down in a tweet.

4) National: Rebecca McCray of TakePart says it’s “One Step Forward, Two Steps Back” for the Feds as ICE “is doubling down on its ties to the facilities, where years of reporting, research, and advocacy work have uncovered rampant abuse, insufficient health care, and unsafe conditions.” Christina Fialho, executive director of Community Initiatives for Visiting Immigrants in Confinement told TakePart “ICE has manufactured this need for additional private prisons. ICE is creating an illusion that private facilities are necessary so that the [ICE advisory committee] has an excuse not to follow in the footsteps” of the Justice Department.

5) NationalWashington Post education reporter Valerie Strauss takes a look at a new documentary film on school privatization. “With actor and activist Matt Damon narrating, ‘Backpack’ tells a scary but important story about corporate school reform policies that critics say are aimed at destroying the U.S. public education system, the country’s most important civic institution.” Damon says “”I got involved in the making of ‘Backpack Full of Cash’ because it tells the important story of how current education reform policies are increasing inequality and causing harm to our most vulnerable children.”

6) National: Neuberger Berman analyst James Iselin says Hillary Clinton’s plan to raise taxes on high income earners would be positive for municipal bonds, which are used to finance public works. “Trump, meanwhile, has proposed capping itemized deductions at $100,000 for single filers and $200,000 for couples, which Iselin said would also negatively impact munis if it applies to them. The Republican nominee has also proposed reducing the corporate top rate to 15% from 35%, a decrease that the investment management firm said could reduce demand for munis from banks, insurance companies and other institutions.” [Sub required]

7) AlabamaLate changes muddy the prospects for Amendment 2, which would prevent lawmakers from transferring funds generated by state parks to the state’s general fund. “The part of Amendment 2 blocking funds transfers has not generated any serious opposition from the legislature or the public, but a late addition to the amendment, which would explicitly allow hotels, restaurants and other vendors to operate in all areas of the state parks, has raised concerns about the privatization of the state parks. Former Alabama attorney general Bill Baxley has written that the second part of the amendment is a ‘poison pill,’ and former conservation commissioner Charley Grimsley called it a ‘Trojan horse’ that would allow privatization of park functions.”

8) CaliforniaSan Francisco Chronicle columnist Otis R. Taylor Jr. asks “Who needs public services? Build a stadium, Oakland.” Oakland Mayor Libby Schaaf has been pushing back against intense pressure to use tight public funds to support a new Raiders stadium, pointing out that it would come at the expense of needed services. “Let’s take a walk through the city and county budgets and I’ll show you where to find $750 million,” Taylor writes. “I mean, come on, people, do we want to fix boring, old potholes, help the homeless, improve public transit and feed the needy when we can subsidize a team that brings so much joy and excitement to our region?”

9) California: Public interest groups say Measure RRR, on the ballot next Tuesday, would “centralize power in the hands of unelected, unaccountable bureaucrats (…) For example, the DWP Board of Commissioners could move to privatize a new water recycling or treatment facility without City Council approval and existing oversight, said [Brenna Norton, Senior Organizer with Food & Water Watch]. The LADWP signed up the biggest private water company in the world, Veolia North America, for consulting services in 2014. The City of Pittsburg has sued Veolia for $12.5 million claiming it created problems like faulty automated water meters and elevated lead levels in drinking water. ‘There is ample evidence that such contracts often force unjustified rate hikes, worsen service, and lead to environmental harms,’ Norton said.”

10) California: The Antioch school board will hold a public hearing on the Rocketship charter school application on November 9, and vote on the issue on December 7. “Navarro’s request to revert the dates back to the tentative schedule had some in the community crying foul. School board candidate Michael Burkholder contacted the East Bay Times suggesting that Navarro and incumbent Alonzo Tony Terry received campaign funds from sources connected to Rocketship Education. Additionally, Burkholder alleged ‘Rocketship is now pressuring the district to have the hearing prior to the seating of the new board.’”

11) FloridaPrivatization is a key issue in the senate race between Marco Rubio (R) and Patrick Murphy (D)Politifact reports on Murphy’s charge that Rubio supported “the bill by U.S. Rep. Paul Ryan, R-Wis., to privatize Social Security and turn Medicare into a voucher. Rubio has supported a ‘premium support system’ that would give seniors a fixed amount of money to purchase insurance from Medicare or a private provider. That was similar to a plan by Ryan.”

12) Florida: In the race for the 16th congressional district, Democratic candidate Jan Schneider accuses incumbent Vern Buchanan “of voting to privatize Social Security, a strategy outlined in U.S. Rep. Paul Ryan’s 2010 budget proposal. ‘If we were to privatize Social Security, what would have happened in 2008, 2009 and 2010?’ she said. Buchanan’s office notes that he has made no such vote and has vowed not to privatize the entitlement program.”

13) Georgia: The charter school takeover initiative is faring badly in the polls a week ahead of the state vote. “The results released Friday found likely voters—regardless of party affiliation—siding nearly 2-1 against Amendment 1. The measure would amend Georgia’s constitution, authorizing the state to take over low-performing schools and the tax dollars associated with them, with the intent of turning them around.”

14) Indiana: The state’s I-69 highway ‘public private partnership’ falls deeper into junk territory. “Fitch’s B rating indicates that material default risk is present, the rating agency said. ‘Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment,’ the Fitch report said.” [Sub required]

15) Maine: The Bangor Daily News asks “If privatization is so great, why won’t the LePage administration share information?” Gov. Paul LePage (R) is embarking on a campaign to privatize multiple public services and functions. “There is an easy fix to solving the lack of transparency surrounding Maine’s service contracts. The administration just needs to follow the law. Last year, the Maine Legislature supported a bill requiring the state to publish online cost-savings information associated with competitive contracts. LePage tried to veto the bill but missed the deadline to do so. More than a year later, the LePage administration is apparently still in the process of creating the rules needed to implement the new law but is not saying when that work will be completed.”

16) Maine: The Portland Press Herald takes a detailed look at the issue of privatization of public services and government functions, and finds a mixed picture. “Ramona Welton, president of the Maine State Employees Association, SEIU Local 1989, the union that represents the bulk of state employees, said the state loses skilled workers it may otherwise need in other roles just from privatization announcements like the one for the ASPIRE program. That program is now understaffed, she said, because many of the 50 workers who could lose their state jobs already have moved to the private sector or to other state agencies and departments. Welton said skilled workers want stability and job security, and privatization plans usually offer neither. ‘What we’ve seen around other contracts and how the (LePage administration) has done this, it’s not all that reassuring,’ she said.”

17) Massachusetts: Aaron Leibowitz of wickedlocal.com reports on the onerous contract terms Mystic Valley Regional Charter School imposes on its teachers. The school wants to charge a teacher over $6,000 in damages under a noncompete clause. “What Mystic Valley is doing is getting people to sign up in April, then you’ve locked yourself in for the next year, you can’t look for another job, and if you leave, you get slapped with a $6,000 penalty,” Massachusetts Teachers Association General Counsel Ira Fader said. “Teachers leave for other school districts all the time. This is okay in public education.”

The Boston Globe
 recently reported that “for over three years, state education officials have had acrimonious dealings with the leaders of the Mystic Valley Regional Charter School over their management style and attempts to expand.” Even pro-charter state education commissioner Mitchell D. Chester cited the board’s “clear record of insularity and opaque decision-making.”

18) Massachusetts: State commissioner Mitchell D. Chester, who is charged with evaluating charter schools, has weighed in “vaguely” to the initiative campaign over whether to expand the cap on charter schools. “Paul Sagan, chairman of the Board of Elementary and Secondary Education—to which Chester reports—came under fire earlier this fall after he donated $100,000 to the committee pushing the charter school ballot question. Critics questioned his ability to be impartial on future charter school applications, though Gov. Charlie Baker—who’s backing the question—dismissed the criticisms as a ‘nothing burger.’” Polls show the ballot question is a toss-up.

19) MassachusettsThe MBTA fires six of seven human resources administrators as it moves to privatize elements of the system. “Citing outdated technology and a lack of trained employees, [acting general manager Brian Shortsleeve] wants to outsource some benefit transactions to the GIC or a private vendor. The MBTA would retain a human resources staff for hiring and recruitment, but it could be smaller, officials said.”

20) Massachusetts: David Sirota, Avi Asher-Schapiro, and Andrew Perez report that executives at eight financial firms “with contracts to manage Massachusetts state pension assets have bypassed anti-corruption rules and funneled at least $778,000 to groups backing Question 2,  which would expand the number of charter schools in the state.” Randi Weingarten, president of the American Federation of Teachers, says “this is a morally bankrupt situation. These managers are using money they’ve earned from teacher pensions to try to destroy the same public education system that teachers have worked in mightily to help children.”

21) New Jersey: Atlantic City will find out, probably tomorrow by a phone call to the Mayor, whether the state will take over its finances and maybe privatize its water system. The city submitted a five-year recovery plan last week that would preserve the system under public ownership and control. The city was advised by consultants PFM Group, NW Financial and bond counsel McManimon, Scotland and Baumann [Sub required]. Tax exempt bond issuance would be part of the city’s recovery. “Dennis Enright, another city consultant from NW Financial, said it makes more sense to bond for the Borgata [Hotel Casino tax appeal] settlement than allow the casino to continue withholding property taxes. Borgata has withheld $23 million so far this year.” [Five Year Recovery Plan]

22) New Mexico/National: The Cibola County Commission votes to approve a contract with Immigration and Customs Enforcement to house Haitian immigration detainees at the Cibola County Correctional Center in Milan. “County attorney Dave Pato says the contract approval is contingent upon County Manager Tony Boyd negotiating and executing a contract with the Corrections Corporation of America, which runs the private facility.” The prison was scheduled to shut down after the Bureau of Prisons decided not to renew its contract with CCA.

23) North CarolinaPrivatization of Medicare is a key issue in the senate race between incumbent Richard Burr (R) and Deborah Ross (D). “Ross and her Democratic allies, in turn, have spent millions of their own dollars tarring Burr, 60, as a Washington insider beholden to corporate interests, highlighting a proposal he promoted to privatize Medicare and his vote against a bill banning members of Congress from trading stocks based on their private knowledge as lawmakers.”

24) Oklahoma: An on-duty guard at a Corrections Corporation of America-operated prison just stood by and watched as prisoners got ready to kill each other, according to a new lawsuit. “Footage of the fight and the actual sequence of events does exist. However, it is being withheld by CCA who ‘claims the video is exempt from the Oklahoma Open Records Act’ based on the argument that it is a ‘law enforcement record.’ This is something of a problem, as CCA is not actually registered with Oklahoma as a law enforcement agency—meaning it has no legal bearing on which to keep the video private.”

25) Tennessee/NationalDozens protest outside the gated community where Corrections Corporation of America/CoreCivic CEO Damon Hininger lives. “Southerners In Action led the protest as part of the Day of the Dead celebration. (…) ‘We’re here to remember those who have been lost at policies that have no reason to be in existence,’ Brenda Perez, an organizer told NewsChannel 5. Members claimed inhumane conditions in the company’s existing migrant detention centers continue to deteriorate, leading to medical incidents and untimely deaths of immigrant detainees.”

26) TexasBrutal treatment of a prisoner in a jail run by LaSalle Corrections adds strength to concerns about healthcare in privatized prisons. “Experts say that although private prison and healthcare companies must follow state guidelines, a dearth of accountability means private prison and healthcare companies often don’t answer to taxpayers. Marc Howard, director of the Georgetown University Prisons and Justice Initiative, says healthcare is poor ‘in all prison situations, but typically, it’s even worse in private prisons.’ Howard says he’s seen numerous cases of preventable deaths, low-quality care, delays in treatment, clinicians with questionable licenses, understaffing and substandard facilities. ‘When it’s privatized, it’s so barebones, it’s so cutthroat, there’s much less understanding on a human level that people might need care,’ Howard said.”

27) Texas: The Texas Municipal Retirement Fund has allocated $775 million for investment in infrastructure assets and Real Estate Investment Trusts. “The $400 million allocation for Cohen & Steers will follow the manager’s multi-asset class strategy. The capital will be used to invest on a global basis in REITs, infrastructure and natural resources.”  [Sub required]. Will this include GEO Group and CoreCivic/CCA, which are REITs?

28) Utah: Utah State University student Samuel Jackson warns that the fate of public lands is on the ballot next Tuesday. “In Utah, there is essentially a one-party system in government (the Republican party).This is a state government that essentially ignored our state’s poor air and water quality, as well as the environmental deterioration of our land. Given the opportunity, the state would sell off these lands to private companies, and ruin many of the beautiful areas which make Utah so great. Not only would we lose these pristine areas to developers, but the environmental impact would certainly be felt as well. Governor Gary Herbert has publicly denied that he would sell off these lands, but that is simply not true. In a press conference, the governor has even said that he would argue to privatize public lands, and have it developed commercially.”

29) International: Standard & Poor’s thinks developers and institutional investors will be going on a “shopping spree” for cash-yielding transportation assets in coming years. Even with higher prices, “S&P argued that opportunities would increase as governments court private capital providers to help revamp ageing infrastructure assets” [Sub required]. According to the Financial Times, Japan just recorded the biggest IPO of the year for a public asset—$4 billion raised for Kyushu Railway—paving the way for the sale of more state assets. “The list of potential floats between now and 2020, say government officials, includes toll roads, airports and—potentially the most attractive prize for investors—the Tokyo Metro.”

30) International: The battle over the Canadian-European Trade Agreement (CETA) now moves to national parliaments, after the Belgian region of Wallonia resisted the undemocratic, corporate-friendly provisions of the treaty and was able to wring some concessions out of EU leaders. The ratification process is not yet complete. Public Services International president Rosa Pavanelli says “the sustained pressure which neoliberal EU leaders and corporate lobby groups put Wallonia under shows that they are allergic to real democracy. Had all local and regional communities been given the chance to decide, CETA wouldn’t stand a chance. It is very concerning to hear some EU politicians now calling for even less democratic control over trade.” CETA is seen as a stalking horse for TTIP, the widely unpopular U.S.-European trade agreement, and TiSA, the trade in services agreement.

31) Revolving Door News: Two federal judges who helped navigate Detroit’s historic bankruptcy will join a Miller, Canfield principal to launch a downtown Detroit office of Judicial Arbitration and Mediation Services. “JAMS’ Detroit office will be launched in April by Steven Rhodes, the retired federal bankruptcy judge who presided over Detroit’s historic bankruptcy and is currently Detroit Public Schools transition manager; Gerald Rosen, the former chief federal district judge in Detroit, who crafted Detroit’s bankruptcy grand bargain; and Clarence Pozza Jr. a veteran litigation attorney who is principal at Miller Canfield.” [Sub required]

Legislative Issues

1) Maryland: A pro-transit pressure group has been formed to try and revive the Baltimore Red Line light transit ‘public private partnership’ project, which Gov. Hogan (R) killed off, saying it was a boondoggle. The Maryland Transit Opportunities Coalition is “gearing up for a political fight that could last through the spring’s General Assembly session.” “Sometimes, transit is postured as an urban-versus-suburban issue. Not true,” said State Sen. Jim Rosapepe. “The major beneficiaries of getting a 21st-century transit system in this state are going to be suburban working families.”

2) Michigan: A new law signed last Wednesday requires the state legislature to receive quarterly updates regarding veterans’ health care in state facilities. The law has become an issue in the Muskegon state house race. “Former state Rep. Lamonte (D) is running to win back her seat from Rep. Holly Hughes (R) and says Hughes should not take credit for these improvements, pointing to Hughes’ vote for a budget cut to veterans affairs in 2011 which she says lead to the privatization of the Grand Rapids Home for Veterans. Hughes says otherwise. ‘Any time you’ve got greater transparency it’s a good thing,’ said Lamonte. ‘But I think it’s an attempt by my opponent to try to make up for her mistakes and voting for the privatization in the first place.’”

 

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