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Weekly Privatization Report 10-23-2017

1) National/Indiana: Because Indianapolis International Airport is a ‘public private partnership,’ its workers won’t be able to benefit from the city’s new $13 “living wage” increase. “Reed, and nearly 100 cashiers, coffee baristas, janitors and service workers at the airport, argue that the city’s recent move to increase municipal workers’ minimum wage to $13 an hour should apply to them, too. (…) That is why workers like Reed plan to take their fight straight to their employer, HMS Host, a private airport food service company based in Bethesda, Md.” The workers are represented by Unite Here Local 23.

2) National/Idaho: State and Corizon officials waited a year before reading a court order on prisoner health, says a federal judge. “The state still has a ways to go before the lawsuit is closed. A new audit of the prison’s medical and mental health care system is expected to be released later this year.” But “the ruling also means the stakes are high for inmates at the prison, because once this lawsuit ends they’ll have to file a completely new legal action if medical delivery problems resume.”

3) NationalThe Nation has a cover story this week on the injustice of the cash bail system, which is helping to drive the money-making machine that profits from every corner of the criminal justice system, as In the Public Interest reported last year. “Bail-bond companies can set nearly any condition on a client until the case is resolved, from daily check-ins to drug tests, without facing much regulation. And they often tack on additional costs.” See National Bail Out and The New York Times report on the broken bail bond system.

4) NationalJames Kilgore, writing in Truthout, says electronic monitoring is hindering decarceration. “While monitors have been around for more than three decades, remarkably little research has been done on their impact. Despite this lack of evidence of its effectiveness, EM has become a preferred option because it is convenient to implement, exerts control over criminalized individuals in the name of ‘public safety’ and saves the state money. Apart from these factors, leading firms in the EM market, like private prison operator GEO Group and carceral phone provider Securus Technologies, have escalated promotion efforts. Before electronic monitors become part of the DNA of the criminal legal system, we need a deeper exploration of this technology and its impact.”

5) National: Blackstone president Tony James announces that the $387 billion AUM private equity firm intends to raise an additional $10 billion for its projected $100 billion infrastructure investment fund before it begins to deploy capital. “Despite a lack of action on the policy front, James remains optimistic regarding opportunities for the fund, which will target investments in the US. ‘Based on today’s market conditions, today’s political regulations, today’s processes in Washington and everything else, [we believe] that there is a huge opportunity for the fund we are raising right as things stand,’ James said.” [Sub required]

6) National: The issue of balancing the public interest and private corporate investment strategies has arisen in Wisconsin and other states as Foxconn and Amazon have invited bids to house major corporate operations. Writing in the Village Voice, Neil deMause asks “how much is it worth to bring Amazon to Town?” He quotes Good Jobs First’s Greg LeRoy’s answer: “People are really concerned that there’s going to be a giant burden shift, a big transfer of wealth. If you’re paying attention to their labor practices and their tax practices, this is a predatory company. And they could go on steroids to affect a million-plus people in a metro area.” Lydia DePillis at CNN Money gives us the big picture on the Amazon feeding frenzy.

In Wisconsin, Republican governor Scott Walker’s attempt to put a deal together to bring a Foxconn facility to the state in exchange for billions of dollars of state subsidies has hit a snag. The necessity of transparency for any public contracting process to be considered responsible is at the heart of the dispute. But no one knows for sure what the snag is because it is hidden behind a veil of so-called proprietary information and secretive bidding. “On Wednesday, a Democratic state representative who opposed the deal told a local Wisconsin news organization the delay was over a ‘nuclear bomb’ in the contract that wouldn’t sufficiently protect taxpayers in the case that Foxconn didn’t fulfill its promises, sparking concerns the deal could be in trouble. (…) The board next meets Nov. 8. A spokesman for the WEDC wouldn’t say if the final contract would be approved at that time. Board members were tight-lipped about the details around what was holding up the deal but it was broadly characterized as a problem around assurances in the contract that Foxconn would fulfill its promises.”

7) National: Robert Greenwald’s Brave New Films releases “Immigrant Prisons,” a new video. “Adding insult to injury, detainees at for-profit detention centers are often coerced into working for virtually no money. The for-profit companies that run the facilities have all the wrong incentives and a captive workforce at their disposal. The food they provide detainees is frequently so inadequate that detainees feel they have no choice but to work for $1 a day to buy additional food from the commissary, often at inflated prices. Fialho doesn’t mince words about this practice: ‘Detention centers are starving people into working in order to then cut staff salaries.’ The two largest private detention center operators, CCA and Geo Group, got started in the 1980s. In fact, CCA’s very first contract was for locking up immigrants. In the past twenty years, the two companies have made over $12 billion in profits, largely from immigrant detention.” [Watch video]

8) National: Former Rep. Tom Marino (R-PA), who withdrew from consideration as Trump’s head of DEA after revelationsthat he successfully pushed legislation to derail efforts by the DEA to inhibit pharmaceutical industry distribution of opioids, also pushed for increased incarceration of immigrant detainees by ICE through lockup quotas—especially in his district. “During the hearing, Representative Tom Marino, a Pennsylvania Republican, complained to Morton about not getting enough inmates to fill detention beds in his district, including one where it costs $82.50 a day for each detainee. ‘Why not take advantage—more advantage—of facilities like this, and particularly in Pike County, who built a whole new facility just to house these individuals?’ he asked Morton.” [Sub required]

9) National: CoreCivic, formerly Corrections Corporation of America, announces its earnings release and conference call dates. It will release its 2017 third quarter financial results after the market closes on November 8, and will hold its call on November 9 at 11am ET.

10) National: Eighteen attorneys general have sued U.S. Secretary of Education Betsy DeVos for not enforcing the Obama-era “Gainful Employment Rule,” which cuts off federal financial aid to colleges that leave students with large amounts of debt and a low likelihood of gainful employment. The attorneys general said that DeVos’s failure to implement the rule “leaves students vulnerable to exploitation and fraud.” A spokesperson for the U.S. Department of Education reportedly called the lawsuits “frivolous” attempts “to score quick political points.”

11) National: Education Secretary Betsy DeVos has rescinded 72 guidance documents outlining the rights of disabled students. “One titled ‘Questions and Answers on Serving Children with Disabilities Placed by Their Parents at Private Schools,’ translated the legal jargon into plain English for parents advocating for their children. Some of the guidance documents that were cut had been on the books since 1980s.”

12) National: With the Veterans Administration facing massive staff shortages, VA workers are concerned that siphoning funding off to private providers will hobble efforts to improve the VA itself. “VA employees feel they are uniquely trained to handle veterans. Lee says they believe that they understand the veterans needs, but adds that she doesn’t think the private sector will do as well. ‘We want the money coming back into the VA for our veterans, so we can hire more resources to give them better care,’ Looney says. ‘They served for us; it’s time for us to give back to them.’”

13) National: Is the debate over privatizing Social Security about to come back to center stage? Maya Rockeymoore Cummings, the CEO of think tank Global Policy Solutions, thinks it will, and fairly soon. “Even though polls have shown that most Americans strongly support Social Security more or less as it is, Rockeymoore Cummings said Republican leaders in Congress will seek to pass income-tax cuts without fully funding them. ‘They will then say we can’t afford Social Security, Medicare and other safety-net programs,’ she told [a] journalists’ group. ‘It’s a bait-and-switch.’”

14) Colorado: A proposed Colorado Springs land deal is being called a “corporate giveaway,” amid accusations that city officials didn’t scrutinize the deal sufficiently. The Catalyst’s Kelsey Maxwell reports “there is significant public opposition to this issue, which demonstrates the value that the community places on the preservation of natural public lands. A citywide poll has indicted that 85 percent of Colorado Springs residents oppose this exchange and the Save Cheyenne group has raised over $100,000 in donations to help fund the court case against the city and the Broadmoor. Although the exchange will ensure the Strawberry Fields is protected under a conservation easement by Palmer Land Trust, the community still opposes the commercialization and privatization of the land.”

15) Illinois: Camelot, the company chosen to replace Northstar Lottery Group as the private operator of the Illinois lottery, says it will raise an additional $1 billion per year by the end of the 10-year deal, Associated Press reports. “Acting Lottery Director Greg Smith said the new agreement incorporates ‘lessons learned’ from the relationship with Northstar. For example, Camelot’s management fee will be reviewed and reconciled each year to reflect actual costs, a process that wasn’t part of Northstar’s initial agreement. Camelot’s management fee is estimated at $25 million in the first year. Northstar’s first-year fee was about $15 million.”

16) Louisiana: New Orleans’ summer of floods has revived the specter of privatization, ThinkProgress reports. “As climate change intensifies weather events like the rainstorms that keep hitting New Orleans, the burden on cities’ infrastructure gets heavier. At the same time, the backlog of deferred maintenance in most of the country has weakened these systems’ resilience. Most municipal governments are ill-equipped to handle the increasingly urgent overhauls, especially if they’ve just been hit with a major disaster. That opens a window for private companies—so-called ‘disaster capitalists’—to make their pitch. (…) Private firms Veolia and CH2M quickly snapped up no-bid contracts to analyze New Orleans’ systemic failures after the August flood, stoking suspicion that the mayor would quietly transfer power over the water systems to for-profit companies.”

17) Michigan: Detroit Pistons owner Tom Gores wants to get in on the private prison business. This “highlights how privatization, especially when fueled by private equity, warps the role of government,” writes Donald Cohen of In the Public Interest. “Gores’s latest high-profile acquisition relies on a captive audience. His firm Platinum Equity is awaiting federal approval to purchase the country’s second largest prison phone corporation, Securus, which charges over 1 million prisoners in the U.S. and Canada as much as $22.56 for a 15-minute call. If the $1.6 billion deal goes through, Securus’s current owner, another private equity firm, would walk away with a cool $960 million return. That’s nearly a billion dollars straight out of the pockets of prisoners and their families, disproportionately those of color, who pay for the calls.”

18) Nevada: Transparency advocates are concerned about Nevada’s plan to use private, for-profit prisons run by CoreCivic. “Civil liberties advocates are raising another concern about the arrangement—that private companies contracting with the government aren’t subject to state or federal public records laws, potentially complicating the public’s ability to get timely, complete information about how safely and effectively Nevada inmates are being taken care of. ‘There’s really no oversight over that if we’re not able to request that information through [the Freedom of Information Act],’ said Holly Welborn of the American Civil Liberties Union of Nevada. ‘There’s no way to hold them accountable.’”

19) New York: Parents “are staging an uprising at Eva Moskowitz’s flagship, $68 million Success Academy charter school” over harsh, boot-camp style disciplining. “The parents charge Russell gives detention for minor infractions such as failing to clasp their hands, failing to make eye contact and inadvertently breaking wind in class. ‘It’s like a military-style boot camp,’ said one of the parents, who asked to remain anonymous for fear of retaliation. ‘The kids have two hours of homework a night,’ the parent added. ‘They don’t have time for playdates, they have no time for a life.’ The insurgent families’ group—which calls itself the Parents’ Opposition Committee and has about 20 members, according to parents—already held one marathon meeting with Russell at the school on Oct. 5 to detail their concerns.”

20) New York: New York City and state teachers’ unions are suing “to kill a new rule allowing some charter schools to mint their own teachers. The State University of New York charter school committee [has] voted to allow charter schools to design their own teacher-training programs and certify their own teachers.” United Federation of Teachers president Michel Mulgrew says “their argument was bogus. The SUNY charter institute is clearly just bought and paid for. We will do our appropriate legal actions and everything else.”

21) Puerto RicoThe Weather Channel gets it right by asking critical questions about the hiring of private contractor to restore the island’s electricity services. “When the [American Public Power Association] convened its conference shortly after Maria struck, PREPA told participants it wouldn’t need the network’s help because it had already contracted with Whitefish Energy Holdings LLC, a two-year-old consultancy, to spearhead the restoration efforts. Whitefish, having to subcontract almost all of the work, had recruited and deployed 160 of the 1,000 workers needed to do the job—16 percent—three weeks after Maria struck. By then, coincidentally, 16 percent of the power grid has been restored. Last week, the effort saw reversals when a large number of people whose power had been restored lost it again when a transmission line tripped. ‘It’s a bit unclear why PREPA chose to go down that route, especially considering the offer was made to them for this mutual aid from the American Public Power Association that apparently wasn’t taken advantage of,’ said Cathy Kunkel, an energy analyst with the Institute for Energy Economics and Financial Analysis, a non-profit that focuses on utility issues.”

22) Puerto Rico: As the saying in the P3 world goes, “desperate government is our best customer.” The Bond Buyer is reporting that the storm-ravaged island is “working on six public private partnership projects that would lead to $300 million to $400 million of investment in projects ranging from a hydroelectric dam to student housing. Puerto Rico will seek requests for qualifications for three of the projects and it is already working with companies on the other three.” Big projects seem to be leading the pack: “Three private sector entities presented unsolicited proposals in the energy sector. One proposal was for a hydroelectric dam that, the government said, would make the island’s electrical generation more flexible and would lower electrical prices.” [Sub required]

23) Utah: Despite well-documented problems with the model, including snafus on public maintenance, Utah County is considering privatizing all of its public services along the lines of Sandy Springs, Georgia, which pioneered the practice before doing a rethink. Three of its officials recently went on a junket to the town. “One of the worst parts of meeting with Sandy Springs, Lee said, is that it has caused a lot of concern with county employees who are worried about job security. He’s already met with members of the Human Resources Department about concerns related to that, he said.”

24) International: Cashing in on green energy policy? “Renewable energy assets are pretty well supported by taxpayers and renewable energy target certificates and they don’t have much in the way of operating costs, so there’s super funds, banks, and us all lining up to make money,” says Western Australia Insurance Commission boss Rod Whithear. “We are all expecting a 10 per cent per annum return. That is probably not a good story for energy prices, but it is a better story for investors.”

25) International/Resource: UNISON’s guidance on private contractor procurement for public service employees.

Legislative Issues

1) National: After taking a knock with the election of Trump and appointment of Jeff Sessions as attorney general, criminal justice reform efforts seems to be getting back on track in Congress. “A bipartisan group of three senators reintroduced a prison reform bill Thursday, which builds off of reform at the state level. Republican Sens. John Cornyn of Texas and Mike Lee of Utah, and Democratic Sen. Sheldon Whitehouse of Rhode Island introduced the Corrections Oversight, Recidivism Reduction, and Eliminating Costs for Taxpayers In Our National System Act — which was first introduced in 2015. The senators have re-upped the bill just weeks after a sentencing reform bill was reintroduced, and a day after a group of law enforcement leaders sent a letter to President Trump and Attorney General Jeff Sessions urging the two to join in on bipartisan criminal justice reform.” The Corrections Act of 2017 is endorsed and supported by a wide array of interest groups and organizations, including Prison Fellowship, Faith & Freedom Coalition, the Alliance for Jewish Renewal, International Community Corrections Association, American Federation of Government Employees, the National Criminal Justice Association, Federal Law Enforcement Officers Association, the National District Attorneys Association, the Major County Sheriffs of America, Major City Chiefs Police Association, International Chiefs of Police, Americans for Tax Reform, American Conservative Union, and Right on Crime.

2) National: Kevin Ring, the Republican president of Families Against Mandatory Minimums (FAMM), says the Sessions Justice Department’s plan to close halfway houses is a terrible idea, and he wants Congress to step in. “If you wanted to increase the chances that federal prisoners would commit new crimes when they are released, there are a few things you would do. First, make lots of prisoners serve sentences that remove them from the community for far too long. Second, limit prisoners’ access to educational and job training opportunities and treatment for substance disorders and mental illness. Finally, as prisoners reach the end of their sentences, limit the time and services they are given to transition back to community. The Justice Department is doing all three of these things right now. ”

3) National: Aviation stakeholders continue to speak out strongly against efforts to privatize the national air traffic control system. “Apollo 13 astronaut Jim Lovell, who has spoken out against attempts to ‘privatize’ ATC in the past, also addressed the general session. Lovell, along with ‘Miracle on the Hudson’ Chesley “Sully” Sullenberger and other acknowledged pilots, were also featured on a new video opposing the legislation.

NBAA President and CEO Ed Bolen said, ‘They have attack ads, we have leaders and legends.’ The airlines have been attacking general aviation in advertisements and on social networks through a front group called Citizens for On-Time Flights.” Bipartisan opposition to privatization has frustrated right wing groups such as FreedomWorks. The bill is awaiting House floor time.

4) National: U.S. Senator Martin Heimrich (D-NM) has introduced a budget amendment to stop Republican efforts to privatize public lands. Heinrich says, “The Republican budget would give fast-track authority to auction off over a billion dollars of public lands in New Mexico and across the West. The White House has already asked Secretary Zinke which lands don’t deserve protection and now Senate Republicans are intent on making it even easier to privatize the places sportsmen and other New Mexicans rely on for recreation and to put food on the table. My amendment would strike this billion-dollar bill of sale for our lands and reject the opportunistic politicians and their financiers, like the Koch Brothers, who want to dispose of America’s national forests, conservation lands, and open spaces.”

5) National: Republican senators sat down last week with Trump administration officials, including D.J. Gribbin and Reed Cordish, to talk infrastructure. The Trump infrastructure plan, announced with great fanfare months ago, has so far amounted to a series of PR efforts. There was “no sense of timing,” said Sen. Cory Gardner (R-CO).

 

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