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Weekly Privatization Report 4-2-2018

1) National: Trump fires Veterans Affairs Secretary David Shulkin to pave the way for the privatization of the $200 billion agency, setting off a national backlash. For months, elements inside the White House and VA, and outside groups backed by the Koch brothers, have waged war on Shulkin, who opposed privatization while supporting veterans’ access to private care where necessary. In an interview on NPR, Shulkin rejected the notion that for-profit healthcare providers could provide adequate care.

In a New York Times op-ed published the day he was fired, Shulkin wrote “advocates within the administration for privatizing V.A. health services saw me as an obstacle to privatization who had to be removed. That is because I am convinced that privatization is a political issue aimed at rewarding select people and companies with profits, even if it undermines care for veterans.”

Shulkin writes, “the private sector, already struggling to provide adequate access to care in many communities, is ill-prepared to handle the number and complexity of patients that would come from closing or downsizing V.A. hospitals and clinics, particularly when it involves the mental health needs of people scarred by the horrors of war.” For more details see Suzanne Gordon’s recent piece in the American Prospect, and listen to her interview on Democracy Now!On Friday.

Veterans organization reacted sharply. The American Legion said in a statement “The American Legion fought to create the Department of Veterans Affairs and we remain committed to its success. Our two million members are opposed to any legislation, or effort, to close or privatize the VA health-care system, and we will continue to work vigorously to ensure our nation’s veterans have the efficient, transparent and properly functioning VA that they deserve.” AMVETS Executive Director Joe Chenelly said of Trump’s appointment of his White House physician to take over the VA, “I am deeply concerned about the nominee. Veterans’ lives depend on this decision, and the Trump administration needs to substantiate that this active-duty Navy officer is qualified to run a $200 billion bureaucracy, the second largest agency in the government.”

House Minority Leader Nancy Pelosi (D-CA) said “from day one of this Administration, the President has openly encouraged and embraced Koch Brothers-led forces as they work around Congress and behind closed doors to dismantle veterans’ health care.” Sen. Bernie Sanders (I-VT), the former chairman and current member of the Veterans Affairs Committee, said “every major veterans’ organization in this country vigorously opposes the privatization of the VA. I stand with them. Our job is to strengthen the VA in order to provide high-quality care to our veterans, not dismember it. The Senate Committee on Veterans Affairs should not approve any nominee for secretary who supports the privatization of the VA.”

2) National: Donald Trump has entered the debate on the relationship between Amazon and the U.S. Postal Service, saying that the post office “is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!” On Saturday, he tweeted “it is reported that the U.S. Post Office will lose $1.50 on average for each package it delivers for Amazon. That amounts to Billions of Dollars.” Amazon paid no federal taxes last year. The full details of the agreement between Amazon and the U.S. Postal Service are unknown to the public, but Jeremy Mohler of In the Public Interest writes that because of its low wages and exploitation of public goods “like many corporations, Amazon is successful because of government, not despite it.”

The financial pressures on the USPS worsened when congress imposed a requirement to pre-fund for 75 years healthcare costs for its workers, and right wing groups have been pushing for privatization for decades (e.g., the Koch-backed Cato Institute and AEI). And not only them, as Andrew Reinbach discusses in the Huffington Post. Calls to privatize the USPS are being heard from centrist outlets, he points out, and he wonders whether this is actually a public asset privatization move because of the valuable real estate the USPS owns. (DC’s historic Old Post Office, e.g., was converted into a highly profitable luxury hotel owned by you know who). “But the idea raises a question: If Geddes and the AEI are correct and the USPS is such a bottomless money pit, why would anybody want it? Who ever heard of buying a service company with no upside? What’s in it for them? Well, real estate, actually, and Geddes and every commenter hints at this. Privatizing the USPS has the potential of being one of history’s biggest—and most profitable—real estate deals ever. Here’s how it could work.”

Privatization of the Royal Mail in Britain has generated a significant backlash and led Labour leader Jeremy Corbyn and others to call for it to be brought back into full public ownership as post offices are closed, pension schemes are cut, and shareholders cream off funds. Polls show 67% of voters back the idea. In the U.S., the boom in packages sent by Amazon and other companies which have made it easier to shop online are placing a tremendous burden on postal workers as pressures remain on management to cut costs.

3) National: An Aramark executive, Bruce W. Fears, has been named to the Trump/Zinke Interior Department’s “Made in America” Outdoor Recreation Advisory Committee along with numerous other recreation industry and trade association executives. Fears is president of Aramark Leisure. The privatization offensive is reaching public lands, including recreational areas in parks: “The advisory board is being set up to assist the Trump Administration with considering public-private partnerships across all public lands, with the goal of expanding access to and improving infrastructure on public lands and waterways.”

Yosemite Hospitality, LLC, is a subsidiary of Aramark and is the concessionaire for Yosemite National Park. Aramark Sports and Entertainment LLC lobbied on monitoring “Department of the Interior (DOI) reorganization plans and Made in America Recreation Advisory Committee” in the last quarter of 2017 though Heather Podesta’s rebranded lobbying firm Invariant LLC. This past October Aramark established a new travel website, The Nation’s Vacation, “dedicated to helping travelers find the national park destination that best suits their vacation desires.”

4) National: CoreCivic releases its Proxy Statement ahead of its annual meeting in Nashville on May 10 at 11 AM ET. The statement reports that President and CEO Damion Hininger received $2,373,657 in compensation last year, and $8,880,172 from 2015-2017. CoreCivic’s named executive officers received $26,415,968 from 2015-2017 (p. 46 totals). The median of the total compensation of all employees (other than their CEO), determined in accordance with SEC rules, was $38,236, a ratio of 62:1 compared to Hininger. It is unclear whether inmates making $1 an hour for their work, who are suing CoreCivic and the GEO Group for violating human trafficking laws, are included in this ratio.

5) NationalThe New York Times runs a front page, in-depth report on the devastating human impact of the brutal and authoritarian for-profit bail system. “When a home health care aide wanted to bail her son out of Rikers Island in New York City, she was charged $1,000 to have a courier walk her money a few blocks to the courthouse. A defendant in a serious domestic violence case in Santa Clara, Calif., suffering from a dangerous heart condition, had to have his ankle monitor removed each time he went to the hospital, and was forced to pay $300 to have it put back on afterward. A woman in Des Moines woke one morning to find that her 2001 Pontiac Grand Prix had been repossessed during the night. Had she put up her car as collateral in a typical loan, she would have been notified that she had fallen behind and given 20 days to pay. But instead, the car was collateral for a bail bond for her child’s father. She owed $700 to the bail agents. They not only took the car, but turned the father over to the jail.”

Meanwhile, the for-profit companies benefitting from ankle monitors are booming. For more, see Christopher Zoukis, “From Cages to the Community: Prison Profiteers and the Treatment Industrial Complex,” in the March issue of Prison Legal News.

6) National/Oklahoma/Arizona: What NBC News is calling the “Red-state teacher rebellion” has come to Oklahoma, where teachers are planning to strike today. “Since 2008, per-pupil instructional funding has been cut by 28 percent—by far the worst reduction in the whole country,” Eric Blanc reports in Jacobin. “The gutting of public education has been accompanied by a push for vouchers and, especially, the spread of charter schools. There are now twenty-eight charter school districts and fifty-eight charter schools across Oklahoma. ‘Is the government purposively neglecting our public schools to give an edge to private and charter schools?’ asked Mickey Miller, a Tulsa teacher and rank-and-file leader.” Teachers’ salaries in Oklahoma are grotesquely low.

Arizona Educators United organizer Noah Karvelis, reacting to Gov. Ducey’s hostile response to the teachers and vow to cut taxes even further, says “Meanwhile, Ducey claims everything is A okay and passes another tax cut.” TheArizona Teachers Association says teachers are threatening to strike if they don’t get an adequate pay raise.

7) National: R Street, the right-wing, Searle Freedom Trust-funded, ALEC-affiliated group, has launched a campaign to end the ban on commercial activity at interstate rest stops. NATSO opposes commercialization, and says “allowing states to set up shop along the interstates threatens more than 97,000 businesses nationwide and jeopardizes 2.2 million jobs.”

8) Arizona: The chief of the state corrections department, Charles Ryan, has had to “correct” his statement at his contempt hearing that “incentives” paid to Corizon came from savings from having hundreds of unfilled jobs within the Department of Corrections. Instead, the payments came from “money that was set aside for health care for the 35,000 inmates in Arizona’s prisons.” U.S. Magistrate Judge David Duncan “has repeatedly voiced frustrations over what he described as Arizona’s ‘abject failure’ to improve inmate health care after the state agreed in October 2014 to settle a lawsuit that alleged inmates were being given shoddy health care. In addition to convening civil contempt hearings against Ryan, Duncan is considering fining the state $1,000 for each instance during December and January in which the state failed to comply with the promised changes.”

9) California: The Imperial County board of education held a public hearing last week on granting a charter to Imagine School. “James Taylor is not only a teacher in Calexico, but the President of the Imperial County Uniserv, which is a coalition of teachers in the valley. He’s also one of the many who opposes Imagine school’s petition to charter which was denied by the El Centro elementary school district.  ‘On one side we have members of the community and teachers who are speaking out in favor of upholding a decision that was made by an elected board. And on the other side we have basically a company trying to stay in business.’” The board has sixty days to rule on the petition.

10) California: The opening of the new Southwestern College Aquatics Center in Chula Vista has been delayed by a labor dispute over outsourcing. “Members of the classified union and administrators group have expressed unhappiness with the college’s decision to hire MediFit, a private firm, to operate the new pool and gymnasium facilities. Classified union leaders insist those new jobs should be college positions represented by the California School Employees Association (CSEA). Former President Dr. Melinda Nish and the governing board decided it would be much less expensive to outsource jobs in the wellness and aquatics complex. (…) [CSEA President Matthew Millus] said the community voted for a college-managed public facility that would generate good jobs when it passed Proposition R, a $389 million general obligation bond, in 2008. ‘This changed when the governing board approved the agreement with MediFit to operate a for-profit health club in the new facilities,’ said Millus. ‘CSEA became involved because the district was, in effect, contracting out our bargaining unit’s work.’”

11) California: The city of Chico, finding that “there was no real cost savings by outsourcing,” will keep its animal shelter in-house. “City Manager Mark Orme made the determination not to recommend outsourcing animal control and sheltering services at this time, he said, and the matter will not come before the council unless requested. That is standard practice, Orme said, adding that one aspect of his job is to examine the viability of operations in the city on a continuous basis.”

12) District of Columbia/Virginia/National: Open government advocates have filed Freedom of Information Act (FOIA) requests for information from state and local governments, including Loudon County, “in hopes of discovering the breadth of incentives being offered to Amazon in hopes of landing the web and retail giant’s second headquarters. The FOIA requests were submitted by members of the D.C. Metro chapter of Democratic Socialists of America in conjunction with the anti-Amazon HQ2 ObviouslyNotDC campaign. The group has now launched a partner website, NoVaSaysNo.com.” Similar opposition is growing in Seattle, Chicago, and Detroit.

13) Florida: Influential lawmakers’ spouses are serving on two charter school boards. “Though far removed geographically from each other, two new Florida charter schools share an uncommon feature: They both have a board member who is married to a state lawmaker heavily involved in crafting state policy on charter schools. (…) ‘Richard Corcoran’s education policies and the cuts to public schools have hurt millions of Florida’s children while his own family and corporate donors have benefited from the state-sponsored expansion of charter schools,’ said Gwen Graham, a Democratic candidate for governor, in an emailed statement. She has been vocal about the Speaker’s charter connections in the past.”

14) Georgia: An Atlanta charter school has “apologized for a black history program that featured second-graders holding masks that depict traditional blackface and said it will provide cultural competency training for teachers.”

15) Guam: Charter school teachers and other employees didn’t get paid as scheduled. “The charter school has had problems with finances and faces a possible reduction in funding support from the government of Guam,” reports the Guam Daily Post.

16) Nebraska: Omaha schools are facing drastic cutbacks across a wide range of educational programs, and will have to pay for 30 faculty positions because of the elimination of federal funding for their positions. They will also be “contracting out special education busing and privatizing other services.”

17) New Jersey: Newark Mayor Ras Baraka, a former principal, wants to put the brakes on new charter schools. “About 30 percent of the city’s public school students already attend charter schools, and that percentage could surpass 40 percent in the next five years based on plans that have been already approved, according to Chalkbeat. (…) Baraka said he does not think that charters should expand ‘arbitrarily’ and ‘aggressively’ without thinking about the impacts on the traditional school system. The district will steer $237 million this year to charter schools, Chalkbeat‘s Patrick Wall reported.”

18) New Jersey: The Trenton teachers union and NJEA are at loggerheads over the future of a charter school. NJEA represents the employees.

19) South Carolina: A charter school has filed suit against the Williamsburg County School District, demanding payment. “South Carolina Superintendent of Education Molly Spearman has been asked to immediately evaluate the district and the charter school to determine whether the district is financially able to pay the necessary expenditures for the remainder of the fiscal year, [State Senator Ronnie Sabb] said.”

20) Washington: AFSCME workers and University of Washington University students are fighting back against the outsourcing of UW’s hospitals and clinics laundry service. “Most of the facility’s workers are middle-aged, immigrants or people of color who rely on the job for its $15 minimum wages, health care, and retirement benefits. ‘The privatization of this facility risks over 100 good-paying union jobs with members whose families directly rely on that employment,’ said Rod Palmquist, the Higher Education Coordinator for the Washington Federation of State Employees.” UW Medicine issued 60-day layoff notices to 15 unionized employees at Consolidated Laundry.

21) International: The Philippine House has passed a bill to ban the privatization of public hospitals. There were efforts to privatize the state-run Philippine Orthopedic Center (POC) in 2015 but they were defeated by widespread public protests. “The bill defines privatization as a process in which non-government actors become increasingly involved in the financing and the provision of health care services which includes outright sale, public-probate partnership, corporatization, contracting out of equipment, joint venture, franchising, management control and leasing and user changes. Likewise, the bill provides that at least 90 percent of the total bed capacity of all public hospitals should be allotted for indigent or poor patients. ‘This will address the lack of access and inequality in health care brought about by the privatization of public health services,’ the Committee Report on the measure read.” For a third violation of the law, that person will be perpetually disqualified from holding any public office.

22) Think Tanks: In a new 174-page report, Thomas Piketty analyzes the political impact of growing social inequality, writing that “globalization and educational expansion have created new dimensions of inequality and conflict, leading to the weakening of previous class-based redistributive coalitions and the gradual development of new cleavages.” Matt Taibbi weighs in to confirm some of Piketty’s research from his experience covering the 2016 elections. In the Public Interest’s report, How Privatization Increases Inequality, explains one of the drivers of inequality.

Legislative Issues

1) National: Moody’s pans Trump’s infrastructure plan, saying there’s little chance it will raise $1.5 trillion in financing. “An injection of $200 billion into the municipal sector would be a noticeable and much-needed increase in federal infrastructure spending over the next decade,” says Marcia Van Wagner a Moody’s vice president. “However, the plan relies on the ability of participants to increase leverage and attract private sector partners, which may be unattractive or unattainable in light of state and local funding constraints and competing budget demands.” The for-profit rating agency lays out its reasoning in two reports, which cost $750 apiece.

2) National: With agency funding issues out of the way with the passing of the budget bill, attention has now shifted to the budget for the fiscal year starting in October, and the administration’s proposals on government reform. The recently passed bill included language “that could slow or even block reorganization plans at numerous agencies by requiring additional review first and/or by limiting the funds available to carry them out. It also rejected a proposal to close nearly two dozen small agencies or subcomponents of larger agencies. It meanwhile continues several long-standing policy provisions including: a ban on starting new ‘Circular A-76’ contracting out studies.”

3) Idaho: Gov. C.L. “Butch” Otter (R) has vetoed a bill that would have allowed charter schools to hire administrators who do not have the same certificate required of public school administrators. “Otter announced Wednesday he vetoed the measure because charter schools need strong instructional leaders just as much as public school. Otter added that asking educators to follow an administrator who does not have experience in the education field undervalues the teaching profession. Supporters of the bill had countered that charter schools need more flexibility to make effective hires.”

4) New Jersey: Community and education activist Corey L. Teague recently testified before the Senate Budget and Appropriations Committee on school funding. He told the committee, “I take issue in which the way charter schools have been funded. In Paterson, public schools lose tens of millions of dollars annually to startup and existing charter schools. I firmly believe a moratorium on any new charter school applications in Paterson is in order. To my knowledge, over $50,000,000 dollars of 2018-19 fiscal budget for Paterson public schools went to charters. The district is currently working tirelessly to find a way to plug the hole. In my opinion, it’s not fair. Public dollars should go to public schools.”

5) Tennessee: Gov. Bill Haslam (R), having been defeated by an impressive grassroots labor and community campaign in his efforts to massive privatize public services and infrastructure, is maneuvering to accomplish his objectives by another route—gutting the University of Tennessee’s board of trustees. “The state House on Thursday approved Gov. Bill Haslam’s controversial plan to dismantle the existing University of Tennessee system’s board of trustees, reduce its size and appoint new members. The bill, known as the UT FOCUS Act, narrowly passed on a 51-41 vote, with 50 votes needed. It now goes back to the Senate because it was amended.”

The United Campus Workers union, “which fought Haslam over outsourcing, said in a statement that House members ‘have handed the keys to the castle to the governor on his way out of office, without any substantial questions about outsourcing having been answered. The UT FOCUS Act gives Haslam extraordinary power to handpick an entire board that can opt-in to the JLL contract on its first day. It has fewer members with more power to move a privatization, corporate agenda. It shuts out student and faculty voices.’”

 

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