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This Week’s Outsourcing Scan 3-21-2016

1) National/Illinois: Tom Tresser, the founder of Chicago-based TheCivicLab, takes on the logic and numbers of municipal austerity, “tax increment financing,” and privatization in an interview with FAIR’s Counterspin. “Chicago is hundreds of millions of dollars in debt, say the headlines, and the only question is which social services should communities shortchange? But is Chicago broke because experts say it is, or is there another way to look at it?” [Audio]
 
2) National: The director of ICE, Sarah Saldaña, says the Karnes immigration detention center may be converted to an all-male facility, “perhaps with children.” The Karnes City and Dilley centers in Texas have been described as “baby jails.” Saldaña’s statement at a congressional hearing “comes as Obama’s proposed budget for fiscal year 2017 cut his request for funding for family detention to 960 beds, about half the 1,800 requested the year before. The reduction is a positive step, but it’s not enough, said Bob Libal, executive director of Grassroots Leadership, which opposes private prisons. ‘The question for the administration is will it go far enough for family detention not to be one of their legacy issues?’ Libal asked. ‘Or will Obama go down as creating the largest trend in detaining families since Japanese internment?’”
 
3) National: The Department of Justice has weighed in against unconstitutional practices by local courts seeking to raise municipal funds by gouging poor people caught up in the system.
 
In a nine-page letter, DOJ said “courts must safeguard against unconstitutional practices by court staff and private contractors,” and warned that “additional due process concerns arise” when a jurisdiction “employs private, for-profit companies to supervise probationers. In many such jurisdictions, probation companies are authorized not only to collect court fines, but also to impose an array of discretionary surcharges (such as supervision fees, late fees, drug testing fees, etc.) to be paid to the company itself rather than to the court. Thus, the probation company that decides what services or sanctions to impose stands to profit from those very decisions.”
 
Donald Cohen of In the Public Interest comments, “as we revealed earlier this year, probation is just one of the many areas of our criminal justice system where private companies profit. Companies perform familiar functions like prison operation and immigrant detention, but even GPS ankle monitoring and residential reentry.”
 
4) National: The family of Nestor Garay has filed a wrongful death lawsuit against Correct Care Solutions and GEO Group. “In the family’s lawsuit, Garay’s parents, Indalecio and Alvara Garay, who have lived for decades in California’s Napa Valley, allege that their son’s ‘life threatening conditions were left untreated.’ ‘The nurses on staff were severely undertrained and were not equipped to recognize, diagnose, or treat patients with serious illnesses or conditions,’ the complaint reads.”
 
5) National: A prison phone company says that new caps on intrastate calls imposed by the FCC will cause “jail unrest.” One commenter writes, “If Securus Technologies is really so concerned about prison unrest, why not voluntarily lower their rates?” Another says “What? I can’t pay an extra $13.78 a minute? RIOT! RIOT! RIOT!”
 
6) National: Up next: will the Uber/Airbnb model disrupt parking infrastructure investments, whether public or private? “Or as [Antin Infrastructure Partners’ Mark Crosbie] put it, ‘infrastructure is moving away from being the safe predictable asset you can lock away and get the coupon on every quarter. It’s facing risks and opportunities that none of us could have predicted before.’” [Sub required]
 
7) National: Federally-sponsored research has found racial disparities in disciplinary measures between charter schools and traditional public schools. “Black students are four times as likely to be suspended from charter schools as white students, according to a new analysis of federal education data. And students with disabilities, the study found, are suspended two to three times the rate of nondisabled students in charter schools.”
 
8) National/Michigan: Jeremy Mohler of In the Public Interest gets to the heart of the Flint water poisoning scandal. “Regardless of who‘s to blame, what happened in Flint is the result of running government like a business. Yes, Michigan’s elected officials and government agencies failed. But they failed because of how they govern, the ‘small government’ politics that makes them think public institutions should operate like corporations and causes them to ignore those they don’t need to get elected. Underinvestment in key public goods like drinking water is what ‘small government’ looks like.”
 
9) National: Moody’s says the ‘public private partnership’ market in the U.S. could grow to be the world’s largest. “‘The U.S. P3 project pipeline is starting to diversify away from traditional transportation projects to more social infrastructure projects,’ [Moody’s John] Medina said. ‘Universities are also expanding their use of P3s beyond privatized student housing to include other university facilities.’” [Sub required]
 
10) NationalThe IRS’ Office of Tax-Exempt Bonds “has seen significant staff cuts and, as a result, a steep reduction in audit counts in recent years. (…) The department completed 200 examinations in 2015 compared to 1,000 three years ago.”
 
11) National: Bond lawyers are up in arms over the Treasury Department’s tightening up of tax exemption rules on what constitutes a political subdivision. “To be governmentally controlled, a political subdivision would have to be controlled by a state or local governmental unit or an electorate. The proposed rules set forth what [Richard Chirls, a lawyer with Orrick, Herrington & Sutcliffe] later called ‘arbitrary new standards for voting’ to ensure the political subdivision is not controlled by private parties.” John Oliver recently aired an amusing report on some bizarrely-defined and operated special districts in California, Idaho, Kentucky and elsewhere. [Video]
 
12) National: In a wide-ranging Kansas City Star article on profiteering by the ‘treatment industrial complex,’ Mary Sanchez asks a key question: “In a for-profit model—in which more inmates equals more revenue—what possible incentive does a rehabilitation company have to help people regain stability and rejoin society?”
 
13) Arizona: Privatization advocates complain that the Oak Flat campground area has been added to the National Register of Historic Places, based in part on the site’s spiritual ties to Western Apache tribes. A private copper mine has been proposed for the area. But “the historic designation won’t stop efforts to mine the rich copper deposit beneath Oak Flat, said Apache Elder Vincent Randall, 75. The Yavapai-Apache Nation, comprising two distinct people, is in the Verde Valley, near Sedona. ‘It doesn’t have any teeth,’ Randall said. ‘It’s a victory maybe in that more people will understand this is a special place. But as far as the designation, it’s not stopping the mine.’”
 
14) ConnecticutThe state says it has saved money by moving away from private companies to service Medicaid recipients. “In 2012, Connecticut fired the companies that were running Husky, as its Medicaid system is known, and returned to a more traditional “fee-for-service” arrangement where the state reimburses doctors and hospitals directly. State officials, physicians and patient advocates have welcomed the move: Average cost per patient, per month, is down from $718 in mid-2012 to $670 last year, according to state data. The number of doctors willing to treat Medicaid patients is up 7% and as a result fewer patients are using emergency rooms for routine care.” [Sub required]
 
15) District of ColumbiaAn audit to determine if the DC public schools can insource food services uncovers “inefficiencies and waste including equipment that we were told had been broken for a year or longer.” The school system has experienced a number of scandals over outsourced food services. The auditor is to report to the DC City Council.
 
16) FloridaThe Department of Juvenile Justice is severing its ties with Youth Services International Inc., which has operated multiple juvenile facilities in the state for two decades. “Daly explained that the decision to cut remaining ties with the company was largely informed by a former employee-turned-whistleblower. That person filed a lawsuit that claimed YSI neglected young people in its care and intentionally fabricated important documents to influence its state contracts.”
 
Think Progress reports that “YSI largely benefited from owner James F. Slattery’s lobbying in state politics and other executives’ charitable donations to top GOP leaders, including Gov. Rick Scott (R).” Scott has also received donations from Donald Trump, the Koch brothers, and Elon Musk.
 
17) Georgia: Duluth citizen Dean Poirier defends the public commons, says beware of privatization. “I have always appreciated the commons. I’ve liked that there is a water system that belongs to all of us. I’ve liked that there are public roads and parks, and I could bring my family to them on those roads. Further, I’ve always felt that we belonged there when we arrived. Things in the commons are everyone’s birthright. We are each of us richer because of them. (…) Losing the commons makes me feel like a serf.”
 
18) Indiana: Some observers think a ruling will be handed down soon on the lawsuit over IBM’s failed effort to privatize the state’s welfare services. The dispute is now the longest pending case before the state Supreme Court, and one of the court’s justices is expected to retire by April 29.
 
19) Kansas: The Department for Aging and Disability Services wants to privatize the state’s largest psychiatric hospital. They issued a Request for Information last year and now want to issue a Request for Proposals. “Rebecca Proctor, executive director of the Kansas Organization of State Employees, a union that represents many of the hospital workers, testified against the bill saying it would allow the hospital to be privatized without public input or debate.”
 
20) Louisiana: Stung by the Public Service Commission’s rejection of their $4.7 billion bid to take Cleco Power private, Macquarie Infrastructure and British Columbia Investment Management Company try to sweeten the deal and get back to the bargaining table. Their revised offer includes a $100 million one-off rate relief credit in the summer, extending its commitment to maintain Cleco’s employee head count and retirement benefits from five to ten years, and $15 million to state economic development agencies. [Sub required].
 
The PSC meets tomorrow at 9 am and may decide to revisit the issue, although its chair, Clyde Holloway, says the changes were minor and “there’s no doubt about one thing, I’m going to vote no and I’m going to fight it with every ounce in my body.” One of Holloway’s concerns: the deal “would have allowed the new owners of Cleco to pocket taxes collected as part of the monthly rates, rather than turning the proceeds over to state and federal authorities.”
 
21) LouisianaA team of experts issues a scathing report on Orleans Parish’s new jail. “The opening of the new jail in September ‘should have been a positive impetus to reform,’ the report said, but violence continues amid critical staffing shortages and ‘poor housing unit management.’ ‘All involved in this process are exceedingly frustrated,’ the experts wrote. ‘There are so many issues that are a priority to address involving critical safety issues, it is overwhelming to contemplate.’” But Sheriff Marlin Gusman says, “how can the (Sheriff’s Office) create a career development plan for our deputies, when these professionals are faced with salaries that are comparable to what they could make at a fast food restaurant? Addressing the ‘internal culture’ concerns outlined in this report begins with a living wage for our professionals.”
 
22) LouisianaPrivate Activity Bonds issued by the state may be at risk as the private partner goes bust. PABs are often part of the financing packages of ‘public private partnerships.’ “The German parent firm filed for bankruptcy with less than 5,000 Euros cash on hand, according to a report in the Handelsblatt newspaper. An unsecured creditors’ committee was appointed Tuesday in Louisiana’s jointly administered bankruptcy case.” [Sub required]
 
23) Louisiana: Members of LSU’s board of supervisors want to privatize the university’s child care service. “The current child care center, which operates under Auxiliary Services, has had a long waiting list and leadership issues, but a low student-to-teacher ratio. Some faculty-parents feared that ratio could rise under a private partner, whose goal would be to turn a profit.”
 
24) MarylandThe Baltimore Sun says the idea of introducing ambulance fees in Howard County is unwarranted. An advisory committee is calling for a study. “Emergency ambulance service—like police protection, schools, firefighting and libraries—is an inherently governmental responsibility. Putting ambulance fees on the table for further study is fine to do but any report generated should be shelved and pulled down only if the county’s financial condition is ever on life-support.”
 
25) Michigan: After Gov. Snyder backtracks on privatizing Medicaid due to public pressure, Robert Sheehan, director of the Michigan Association of Community Mental Health Boards, weighs in on what changes he thinks are necessary. Sheehan says he doesn’t think privatization of mental health care would help in coordinating physical and mental health care. “The private system tends to use office space psychotherapy and inpatient care. The public system can offer residential care, employment services, transportation, case management, etc. A wide range of services not available in the private system.”
 
26) New Jersey: Concern grows that the proposed dissolution of the Evesham Municipal Utilities Authority might pave the way for privatization. “While acknowledging the decision to take over an authority rests in local officials’ hands, Peggy Gallos, executive director of the Association of Environmental Authorities of New Jersey, questions the need to do so.”
 
27) New York/National: Public interest, labor, and consumer groups denounce New York State’s likely move to join a weak oversight system for online for-profit colleges, warning that it will expose students and the public to risk. “‘We’re basically leaving our most vulnerable students open to being scammed,’ said Evan Denerstein, a senior staff attorney at MFY Legal Services Inc., an organization in New York that provides free legal services to people who have defaulted on their student loans.”
 
28) New Mexico: The state supreme court rules that Corrections Corporation of America may be held liable for rapes by a guard. “The state Supreme Court found that prison company policies allowed male corrections officers to escort female inmates around the facility alone and that rules were not enforced for maintaining a physical distance between guards and prisoners. The court, in an unopposed opinion by Justice Charles Daniels, said a former warden at the prison also can be found liable for damages.”
 
29) New York: Massena Memorial Hospital’s CEO says “there is a lot going on behind the scenes to privatize MMH, but the process won’t go anywhere until they’ve filed paperwork with the state and had the business assessed.” But Kerrie French, president of MMH’s CSEA chapter, says longtime employees are leaving. “People feel like … they’re losing their pension so they go where the money is.”
 
30) North Carolina: In a widely-watched ballot last Tuesday, voters approved a $2 billion public bond issue to finance infrastructure improvement. The Mountaineer says, “by approving the Connect NC bond, North Carolina voters made a strong statement about their vision for the future. After years of hearing many state politicians belittle the role of public investment in building a strong economy, it wouldn’t have been surprising if a majority rejected the bond question, believing it to be just one more example of government ‘sticking its nose’ into the workings of the economy. Happily, that false narrative did not prevail because North Carolinians know we are all in this together—that without good roads, state-of-the art educational facilities, and safe water the state will fall behind.”
 
Before the vote, Fitch Ratings said “‘if approved, the voters’ decision will signal a national shift toward GOs [General Obligation bonds—ed.] and away from appropriation-backed lease revenue bonds and, potentially, indicate how voters in the state may prioritize infrastructure funding.” [Sub required]
 
31) InternationalDavid Rieff is interviewed by Doug Henwood about, among other things, the privatization of development aid through a corporate and philanthropic takeover or displacement of international development organizations and NGOs. [Audio, at 27:00]
 
32) Think TanksPro-corporate former DC mayor Tony Williams tries to take on the highly effective DC Fiscal Policy Institute, a think tank on local issues established by the Center on Budget and Policy Priorities, from his perch at the Federal City Council, which the Washington Post describes as an “historically insular group of business executives.” The DC Fiscal Policy Institute’s Ed Lazere “is a frequent, prominent voice in D.C. Council hearings, and his former staffers now hold top positions in District government—notably Elissa Silverman, an at-large council member; Jennifer Reed, deputy budget director; and Angie Rodgers, an economic development official.”
 
33) Think Tanks: Center for Effective Government (formerly OMB Watch), is folding its operations into the Project on Government Oversight. “Additionally, POGO will be taking up a new role in the realm of government regulatory authority and independence, while CEG is transferring the staff support it provided as co-chair of the Coalition for Sensible Safeguards to the other co-chair, Public Citizen.”
 
34) Revolving Door News: A bipartisan group of experts calls out the congressional leadership for understaffing and underfunding its own capacity to oversee federal agencies and programs. This gives the revolving door a spin. “This lack of internal capacity empowers lobbyists since they are who the staff turn to for policy expertise,” their letter says. The group calls for the creation of a Joint Committee on the Capacity of Congress.
 
Legislative Issues
 
1) National: Ralph Nader decries Pentagon and corporate contractors that are “too big to audit.” He writes that “auditing the Department of Defense receives left/right support, from Senator Bernie Sanders (D-VT) to Senator Ted Cruz (R-TX). H.R. 942, the Audit the Pentagon Act of 2014, is supported by both Democrats and Republicans in the House of Representatives.”
 
2) Alaska: A lawmaker wants to privatize some state ferry system routes. “Critics of Micciche’s plan say privatization is easier in theory than in practice and that contracting outside companies to operate service around Prince William Sound could affect the system’s unions. (…) ‘There’s a lot of labor issues there,’ [Inter-Island Ferry Authority General Manager Dennis Watson] said. ‘There are contracts, and labor has to be at the table when we talk about all of this.’ Robert Venables, a member of the Alaska Marine Transportation Advisory Board and an employee of Southeast Conference, said he worries privatizing parts of the system would only increase problems.”
 
3) KansasThe state senate has added a privatization provision to a disability bill. “Before the bill was passed, a provision was added that would require the Kansas Department for Aging and Disability Services to seek legislative approval before privatizing facilities.”

 

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