Media Scans
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This Week’s Outsourcing Scan 2-1-2016

1) National: A national scandal erupts over the poisoning of Flint, Michigan residents by lead-tainted water pumped into their homes by order of Gov. Rick Snyder’s Emergency Manager. Jeremy Mohler of In the Public Interest reports that Gerald Ambrose, Snyder’s EM, overruled the democratically elected city council’s overwhelming vote to return the city’s pipes to the old water source. In 2012, the Republican-controlled state legislature banned a referendum on the emergency manager law.
 
Veolia, a leading water privatization company, had conducted a study of Flint’s water but didn’t report any lead. In the Public Interest’s Donald Cohen warns that the tragedy in Flint may be used as an opening for privatization. He writes, “Flint’s water system needs to be fixed today regardless of costs. But one thing should be completely off the table: privatization.” Veolia has been involved in previous controversies over alleged environmental racism in Texas (see this and this), Georgia, and Baltimore.
 
2) National/Texas: As Texas state officials near a decision on whether to declare immigrant detention centers “child care facilities,” public opposition grows. “‘They are prisons, plain and simple,’ said Antonio Diaz, an anti-detention center advocate with the Texas Indigenous Council. ‘They are prisons for profit.’” Bob Libal of Grassroots Leadership declares “this is not about the welfare of children. This is a desperate attempt for the state to bail out the federal government’s immigrant detention regime.”
 
The centers are run for profit by the GEO Group and Corrections Corporation of America (CCA), which are at the nexus of a network of corporations profiteering from all aspects of America’s criminal justice system (see ITPI’s new infographic). CCR’s Ghita Schwartz has looked into “How ICE Shields Its Financial Dealings with Private Prison Contractors from Public Scrutiny.”
 
3) National: Ring of Fire’s Sam Seder interviews attorney David Scher on alleged fraud in for-profit education that victimizes students and taxpayers. Scher is representing Rodney Lipscomb, the former dean of academic affairs at ITT’s Tallahassee campus, who filed suit this month. “The suit comes as ITT and other for-profit colleges face increased scrutiny following the collapse of Corinthian Colleges amid allegations the school lured students with inflated job placement and graduation rates” [Begins at 18:30]. Research resource: the State of California Bureau for Private Postsecondary Education’s disciplinary actions webpage.
 
4) National: Seth Freed Wessler reports in The Nation that “dozens of men have died in disturbing circumstances in privatized, immigrant-only prisons. The Bureau of Prisons itself says there’s a problem. And yet the privatization scheme continues.” Wessler writes, “Donna Mott started working as a prison guard for the BOP in the 1980s and remained with the bureau until she retired in 2014. For the last seven years of her career, she supervised the performance of seven private contracts. Mott says the kinds of performance issues described in the monitoring reports and medical records are a direct result of the effort to cut costs via privatization.”
 
5) National: Adding to the for-profit education sector’s woes, the Federal Trade Commission has sued DeVry University, alleging that it misled consumers about students’ job and earnings prospects. “In its complaint, the commission alleged that DeVry deceived students in its advertising and marketing by claiming that 90 per cent of its graduates actively seeking employment landed jobs in their fields within six months of graduation. The agency also says DeVry was misleading when it claimed its graduates had 15 per cent higher incomes one year after graduation on average than graduates of all other colleges or universities. Both representations, the commission said, were false and unsubstantiated.” Also, the education department has warned DeVry to stop making certain claims about postgraduate outcomes.
 
6) National: Former teacher Sarah Lahm was shocked at the rhetoric she heard at a National School Choice Week event last week. The Institute for Justice’s Richard Komer “waxed enthusiastic about all of the wonderful things a deregulated, voucher-filled education landscape could offer—including more discipline, more uniforms, more religion, and more racist, elitist assumptions about what ‘poor minorities’ want. Public schools could do this, too, he said, if only the Constitution was not standing in the way.”
 
7) National: There is growing debate about the use of private contractors in the U.S. government “kill chain”—e.g. in drone programs. “Under U.S. government procurement law, authorized support by contractor personnel that constitutes taking a direct part in hostilities must comply with the prohibition on outsourcing ‘inherently governmental functions.’ (…) There has been some analysis as to where various drone mission activities fall along the spectrum and how to prevent contractors from ‘crossing the line’ into the inherently governmental realm.” 
 
8) National: Government contractor Booz Allen Hamilton reports flat revenues ($1.3 billion) and profits ($106.2 million) for Third Quarter FY 2016. It also cites a potential risk to its business from “increased insourcing by various U.S. government agencies due to changes in the definition of ‘inherently governmental’ work, including proposals to limit contractor access to sensitive or classified information and work assignments.”
 
9) National: The market research firm Technavio projects that the virtual private schools sector will grow at a rather astonishing and questionable compound annual growth rate of 29% until 2019. Its report ($2,500) looks at Connections Academy, K12, Mosaica Education, White Hat management, and other companies.
 
10) CaliforniaEducation is expected to figure prominently in next year’s Los Angeles mayoral race. The founder of the charter school group Green Dot Public Schools, Steve Barr, is considering a run, and will decide in April. “A Silver Lake resident, he runs Future is Now Schools, a education reform group.”
 
11) California: The Los Angeles Times reports that Steve Van Zant, who brokered deals to authorize charter schools, now faces a felony charge. “The Union-Tribune has tracked a charter empire built by Van Zant by taking advantage of what some call a shortcoming in state law that gives districts a financial incentive to place charters in other school districts. By placing charters outside its boundaries, a district can raise new funds—up to 3 percent of a charter’s revenue—without any threat to enrollment or state attendance funds.”
 
12) Florida: Opa-locka’s mayor and her husband are “at the center of a federal criminal investigation,” according to the Miami Herald. “The investigation of the couple is the most recent in a string of cases against them for using their influence to prop up personal interests, including the mayor casting votes to funnel thousands to benefit her charity—drawing a public reprimand and fine by the ethics commission in 2011. The couple was caught diverting tens of thousands of dollars years earlier from a charter school founded by the mayor to benefit the family, including payments for two Mercedes Benzes, and a host of other expenses that led to tax-evasion convictions.”
 
13) GeorgiaAtlanta’s school superintendent is proposing a set of sweeping changes to the system, including closing schools and turning others over to charter school companies. Dozens of teachers would have to reapply for their jobs and possibly 400 district staff positions may be affected. “The changes are part of an attempt to keep Atlanta schools out of state control if voters approve Gov. Nathan Deal’s Opportunity School District plan this fall.” APS “plans a series of public meetings regarding the changes. The school board is scheduled to vote on the charter school group agreements in March.”
 
14) Illinois: Last week a federal jury convicted former Chicago official John Bills for “taking bribes in return for steering the contract for the installation of Chicago’s red-light cameras to Redflex Traffic Systems.” Sentencing is set for May 5. Two company officials have already pleaded guilty. Insurance and auditing firms are reportedly distancing themselves from Redflex because of the red light corruption scandal.
 
15) NevadaSheldon Adelson, the billionaire funder of right wing political causes, is reportedly going to be part of a ‘public private partnership’ to build a new billion dollar stadium in Las Vegas. According to the Las Vegas Review Journal, “Las Vegas Sands may seek legislative approval for diversion of hotel room tax revenues that now support the Las Vegas Convention and Visitors Authority to the project. The company plans to present its idea in February or March to the Southern Nevada Tourism Infrastructure Committee, which is tasked with finding ways to further grow the tourism economy.”
 
16) New Jersey: Gov. Christie wants to expand the number of charter school seats in the state, and Senate Minority Leader Tom Kean Jr. (R) “said the state should consider having multiple authorizers for new charter schools, such as Rutgers University or other colleges or universities. Currently, only the state Department of Education can approve new charter schools in New Jersey.” The state education commissioner, David Hespe, who supports the changes, is Christie’s former chief of staff. Blue Jerseysays Hespe was “appointed by Gov. Christie to grease the way for privatization targeting NJ’s minority-majority cities.”
 
17) North Carolina/NationalCharter schools are worsening racial segregation in the state, a new Duke University survey finds. “In the state, at first, black students were over-represented in charters, but that trend has flipped, and there is an overload of white students: ‘The percentage of charter school kids in mainly white schools has almost doubled since the late 1990s,’ New Orleans Public Radio reports.”
 
18) OhioHB 2, legislation to tighten up charter school funding, goes into effect today. Columbus resident Jeanne H. Melvin writes that “now legislators need to change the laws to ensure that local school district money doesn’t go to charters. As it is, the state diverts school system funding to lower-performing charters. Kudos to the school districts for creating public awareness by passing resolutions to invoice the Ohio Department of Education for past charter school deductions.
 
19) OhioThree dozen school districts invoice the state education department, asking for the return of millions of lost dollars “that they say improperly went to fund charter schools.” The state is not expected to pay. A nasty political battle has erupted over the state’s formula for allocating money to traditional vs. charter schools. “The foundation of the whole problem is that the state wouldn’t put its money where its mouth was and set up a separate charter school fund that could offset the difference that districts got from their local revenue,” [Innovation Ohio’s Stephen] Dyer said. But he added that a recently passed charter school reform bill, plus current discussion of the funding issue by the legislature, has him more optimistic.”
 
20) Pennsylvania: The state Public Utilities Commission has approved a rate hike to nearly double the speed with which the public Philadelphia Gas Works replaces its aging gas mains. The former Nutter administration had attempted to privatize the facility, arguing that it needed investment. The city council blocked that move, laying the groundwork for a public solution to the problem.
 
21) Tennessee: The Chattanooga Times Free Press profiles a little known Wall Street millionaire hedge fund manager—W. Thorpe McKenzie—who may be planning to put a charter school in downtown Chattanooga. McKenzie sidekick Pete Cooper says “education reform right now is the most exciting thing going on in this city, and I want the McKenzie Foundation to be a major part of it.”
 
22) Texas: The Dallas school board and the superintendent are getting set to oppose charter schools, which are draining money and students from the public school system. “The uproar over Uplift started when DISD trustee Joyce Foreman publicly said she’s tired of charter schools draining students from the neighborhoods she represents. So Foreman and her allies have taken the unusual step of asking the Dallas City Council to pick sides in a school-related matter.”
 
23) International: The U.S. government has eased sanctions, “clearing the way for American companies to participate in public infrastructure projects alongside the Cuban government. (…) A policy of denial will remain in effect for revenue-generating exports that are designated for use by state-owned entities.” [Sub required]
 
24) Revolving Door News: Dan Grazier, a fellow at the Project on Government Oversight (POGO), looks at how “a revolving door keeps military brass beholden to contractors.”
 
25) Upcoming Conference: Are P3’s being used to undermine labor peace? The National Council for Public Private Partnerships is holding a two-day “Federal P3 Summit” on March 17-18. NCPPP is funded by Veolia, CH2M Hill, SouthWest Water and Suez Environnement. Key topics include a “survey of the political climate for P3s on Capitol Hill” and an “analysis of current legislative P3 proposals and their chances for success.”  The legislative update will be moderated by Ben Brubeck, a top federal lobbyist of the Associated Builders and Contractors and opponent of project labor agreements; the speaker for that session is Ed Mortimer, executive director of transportation infrastructure at U.S. Chamber of Commerce and a USCC lobbyist at the DOT on “expanding public-private partnerships for public infrastructure.”
 
Legislative Issues
 
1) National: “Low wage Senate workers get a raise—and then the shaft,” reports the Washington Post. “Days after the new contract was signed, a cafeteria manager quietly began calling some workers into his office. He demanded they sign paperwork acknowledging new job titles. (…) See, wages in the new contract were occupation-specific. And lo and behold, ‘food service worker’ falls into a lower tier than ‘cook.’ Rather than getting the big raise Olotara expected as a cook—which would have upped his pay to $17.45—he was entitled to just $13.80 as a ‘food service worker.’” The company, Restaurant Associates, has been notified by the Labor Department that it’s looking into the matter. Catherine Rampell writes, “near as I can tell, none of the senators who boasted last year about how they were looking out for the little people have said anything about how those little people never got their big raises.”
 
Restaurant Associates is owned by the Compass Group, whose Group COO for North America, Gary Green, was paid nearly $5 million last year according to Bloomberg; Richard Cousins, its CEO, was paid over $7.5 million.
 
2) National: The New York Times urges Congress and the White House to take steps to rein in corporate inversions. “The White House should reform federal contracting rules to make it harder for inverted companies to win contracts.”
 
3) NationalCriminal justice reform legislation faces an uphill battle in the Republican-controlled Senate. “‘John [Cornyn] has some work to do, big-time work,’ to secure enough support to persuade Mr. McConnell to go forward, said one Republican senator who spoke on the condition of anonymity to discuss internal party matters.”
 
4) Arizona: Voters will decide in March on whether to increase funding for education, including charter schools. Prop 123 “plans to amend the Arizona Constitution by permanently increasing annual distributions from state trust lands to fund education.”
 
5) Florida: Some state lawmakers are pushing for dramatic changes to laws governing public school districts, “saying parents want more charter schools and smaller school districts. Some say their proposals would come at the expense of the 67 districts that already serve most of the state’s 2.8 million students. The legislative proposals have the potential to increase competition for state education operating and capital funding, which could stress existing school district budgets, according to analysts.” A move is also being made to ease charter authorization. An amendment, “if approved by voters, would allow charter school operators to circumnavigate local school district approval by asking the state to authorize their charters. Diaz told the House K-12 committee last week that the bill gives schools an alternative path to obtain a charter and avoid conflicts with districts that now have the sole power to authorize charters.” [Sub required]
 
6) MassachusettsDemocratic House Speaker Robert DeLeo backs Republican Gov. Baker’s charter school expansion agenda. Massachusetts Teachers Association President Barbara Madeloni says “it is incredibly disappointing that the speaker appears to be buying into the anti-public education agenda.”
 
7) Virginia: The Virginian-Pilot says that Republican lawmakers are pushing an agenda that is “endangering public education where it was born.” A constitutional amendment is being pushed to allow the state board of education to create charter schools without approval from local school boards—and make them pay for at least part, and possibly most, of their budgets. The measure must be passed again by the legislature then would go to voters in November. Bipartisan opposition has emerged. Del. Ken Plum (D-36), a former administrator at Fairfax County Public Schools, says “if you are going to take public money and use it for public education you ought to do it within the framework of public schools.” 
 
8) Wisconsin: Kerry Schumann, the executive director of the Wisconsin League of Conservation Voters, warns against privatizing water in Wisconsin. “The crisis in Flint points to the critical need to have access to clean drinking water and effective sewer systems for the health and well being of any community, and makes us realize that unsafe drinking water is not just a problem in less developed countries. In fact, it’s a problem right here in Wisconsin—a problem that could get much worse if AB 554 is voted into law. The bill, which would make it easier to privatize community water supplies, has been approved by the Assembly and is making its way through the state Senate.”

 

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