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Weekly Privatization Report 4-24-2017

1) National: CoreCivic and its lobbyists have been hard at work trying to drum up Trump-era federal money for immigrant detention and federal incarceration. Last week, first quarter 2017 lobbying reports for five of its outside lobbying groups and its own lobbying operation were released, totaling nearly $400,000.

Registrant Name

Amount Reported

AKIN GUMP STRAUSS HAUER & FELD

$           60,000

CoreCivic, Inc.

$         220,000

Greenberg Traurig, LLP

$           10,000

The Simmons & Russell Group, LLC

$           20,000

Hobart Hallaway & Quayle Ventures, LLC

$           80,000

The Ingram Group LLC

$                  –  

 

$         390,000

Among the activities listed were “issues pertaining to the construction and management of privately-operated prisons and detention facilities” (Simmons & Russell Group); “FY 17 appropriations for Commerce, Justice, Science and Related Agencies—provisions related to privately-operated prisons and detention facilities. FY 17 Department of Homeland Security appropriations—provisions related to privately-operated ICE detention facilities” (Greenberg Traurig); “FY 17 appropriations for Commerce, Justice, Science and Related Agencies—provisions related to privately-operated prisons and detention facilities. FY 17 Department of Homeland Security appropriations—provisions related to privately-operated ICE detention facilities” (CoreCivic’s own lobbying shop, run by Bart VerHulst and Jeremy Wiley); “issues pertaining to the construction and management of privately-operated prisons and detention facilities,” and “issues related to tax treatment of REITs” (Akin Gump Strauss Hauer & Feld). Hobart Hallaway & Quayle Ventures lobbied for CoreCivic on “FY17/FY18 Commerce, Justice, Science, and Related Agencies Appropriations; FY17/FY18 Department of Homeland Security Appropriations; P.L.114-254, Further Continuing and Security Assistance Appropriations Act, 2017; funding related to the Bureau of Prisons, United States Marshals Service, the Office of the Federal Detention Trustee and Immigration and Customs Enforcement.”

It is unclear what the Ingram Group does for the CoreCivic, since no lobbying payments to it were recorded, even though it’s been a registered lobbyist for the company since 2013 without reporting any lobbying payments.  2) National: The GEO Group has also been hard at work pounding the halls of Congress and the agencies for Trump-era federal money and contracts. Over the past few weeks, first quarter 2017 lobbying reports for its seven outside lobbying groups were released, totaling over $420,000.

Ballard Partners

$100,000

Bradley Arant Boult Cummings LLP

$60,000

Capitol Counsel LLC

$70,000

Da Vinci Group

(less than $5,000)

Lionel “Leo” Aguirre

$30,000

Mack Strategies

$70,000

Navigators Global LLC (Formerly DC Navigators)

$90,000

 

$420,000

Among the activities listed were to “advise and advocate for the client on general government policies and regulations” at the DOJ, White House, Congress, and federal agencies (Ballard Partners); “FY17 and FY18 Commerce/Justice/Science Appropriations; FY17 and FY18 Homeland Security Appropriations, [and] federal government use of contract correctional facilities” (Bradley Arant Boult Cummings, one of whose lobbyists on the account, David Stewart, is a former legislative correspondent of Jeff Sessions); lobbying Congress about the “tax treatment of Real Estate Investment Trusts (REITs)” (Capitol Counsel); “monitoring and advising [the GEO Group] on Judiciary-related bills, crime, [Subcommittee on Commerce, Justice, Science] Appropriations” (Da Vinci Group); lobbying the House of Representatives on “criminal justice, development, operation and management of prison and detention facilities [and] issues relating to deportation of federal prisoners” is Lionel “Leo” Aguirre; lobbying Congress “advocating for the continued use of privately operated facilities” is Mack Strategies (for Trident DMG on behalf of the GEO Group).

Navigators Global LLC
 worked for GEO on the “President’s Budget Request—issues relating to alternatives to detention within ICE FY 17 DHS Appropriations Act—issues related to alternatives to detention within ICE FY 17. Additionally, issues related to the education and promotion of the benefits in the use of public-private partnerships for the delivery of secure residential care, community reentry and supervision, offender rehabilitation, and location monitoring services.”

3) National: The public finance heavyweights are weighing in “bigly” on the infrastructure financing debate to push back against ill-conceived proposals that may be coming down the pike. The issue of who controls public infrastructure is at the heart of the debate. Municipal Market Analytics, a leading advisory firm, is cautioning against over-exuberance about infrastructure ‘public private partnerships,’ which are now being widely promoted by private industry and its PR flacks—some of whom are also trying to undermine the tax exemption system for financing America’s public infrastructure. The Bond Buyer reports, “‘Alternatives to traditional municipal finance simply seem to consolidate control of large projects in the federal government that facilitates the effectiveness of lobby efforts by private enterprise,’ said MMA. ‘The eclectic and idiosyncratic municipal industry has largely represented a defense against corporate abuse, disruptive lobbying, egregious borrowing and loss of local control.’” [Sub required].

The politics behind one-sided proposals for infrastructure financing involve former Macquarie and Koch Industries staffer D.J. Gribbin, now Trump’s special assistant on infrastructure. Perhaps issuers and the muni industry will now become more directly engaged—before it’s too late.

4) National: Brendan Fischer of the Campaign Legal Center denounces as “pay to play” the federal government’s awarding of a $100 million contract to GEO Group. “For over 75 years, federal contractors have been prohibited from making contributions to federal candidates to protect against the appearance or reality that taxpayer-funded federal contracts are for sale. Private prison contractor GEO Group gave $225,000 to a super PAC closely affiliated with Trump’s campaign, and upon taking office, the Trump Administration reversed an existing policy phasing-out private prisons, then awarded GEO Group a new $110 million federal contract. Are taxpayer dollars being spent based on what is best for the public, or based on what is best for big donors?” Fischer calls on the FEC to “enforce the longstanding federal contractor contribution ban and take action against GEO Group.” CLC has filed a FOIA request to find out the basis on which Trump reversed the Obama DOJ’s decision to phase out private prisons.

5) National: Trump’s OMB memo on “government reform” will drive more unaccountable outsourcing, says the National Treasury Employees Union (NTEU). “The guidance seems to be little more than opening the door to increased contracting out of agency functions and services.” And the American Federation of Government Employees (AFGE) says that “the federal government already spends twice as much annually on service contractors as it does on its own workforce ($450+ billion on contractors in FY 2016 vs. $200 billion on civilian employees in FY 2016). Nobody knows precisely what these contractors do, how well they do it, who they’re hiring, or where they’re working.” [OMB guidance]

6) National: Trump budget director Mick Mulvaney finally puts a number on the public share of Trump’s infrastructure plan: “When you see details of our budget, what you’ll see is a $200 billion number for infrastructure, with the understanding that there will be a 5:1 leverage ratio on that.” Specifics won’t be out until the fall, said Mulvaney at an Institute of International Finance meeting. [Sub required]

7) National: Sam Pizzigati of the Institute for Policy Studies of reminds us of the golden age of public regulation of the airline industry, when air travel was civilized, respectful, and efficient, and of how decades of bipartisan deregulation has created an abusive “social microcosm of class-based society.”

8) National: Peter DeFazio (D-OR) and Rick Larsen (D-WA) write a letter to the Washington Post panning its editorial promoting privatization of the public air traffic control system. “A real bright idea would be for Congress to pass targeted reforms to fix the problems facing the FAA today without ripping the agency apart. Privatizing our air-traffic-control system presents myriad risks and perils. Targeted reforms can achieve our common objectives and maintain our nation’s unparalleled aviation safety record.”

9) National: In a piece on the substantial amount of corporate money donated to the Trump inauguration fund, The New York Times reports that the GEO Group and CoreCivic donated $250,000 each. “Since then, the outlook for both companies has greatly improved. In February, Attorney General Jeff Sessions rescinded an Obama-era order that would have phased out the use of such prisons by the Justice Department. And Mr. Trump directed his administration to prioritize the detention and deportation of unauthorized immigrants, proposing hundreds of millions of dollars for a vast new network of detention facilities like the ones the companies already operate for Immigration and Customs Enforcement.”

10) National: For the especially intrepid: the Federal Accounting Standards Advisory Board will meet this Wednesday and Thursday to discuss, among other issues, accounting standards to be used for federal leases.

11) California: Steven Rosenfeld of Alternet reports on the state auditor’s findings that the largest charter school chain in Los Angeles raised millions of dollars in dark money in a union busting campaign. “The efforts by Alliance College-Ready Public Schools to stop the union drive that began in March 2015, when 67 teachers and counselors said they wanted to join United Teachers Los Angeles, also included $2.2 million in donated legal fees, hiring an array of campaign consultants routinely seen in political fights and coordinating with the California Charter School Association (CCSA), which used the private alumni files to recruit former students to their side.” [Auditor’s report]

12) Colorado: With its prisons full, state officials are considering reopening the Kit Carson Correctional Center private prison in Burlington, “which employed 142 people and was by far Burlington’s biggest taxpayer.” The prison is owned by CoreCivic, which closed the prison because it “was not able to make a profit.”

13) District of Columbia: A charter school for at-risk students may be shut down for failing to meet its objectives. DC Charter Board executive director Scott Pearson “recommended that the board revoke the school’s charter and shut it down ‘based on the school’s performance over the previous four years, along with its poor data management, and most significantly, its failure to meet its goals and mission for the majority its students.’ The charter board’s seven members will decide if it will shut the school down in early May. If it revokes the charter, the school would shut down in June. Charter revocations are not a rarity in the District.” At the Latin American Youth Center Career Academy “more than two-thirds of the 770 students enrolled at the school since 2012 were not on a track to earn a GED or receive college or career training. Of the 119 students who could have earned a GED, 20 percent earned one. Of the 42 students on a plan to start a medical assistant career, none earned certification.”

14) Georgia/South Carolina: Spreads widen on municipal bonds used to finance a nuclear ‘public private partnership’ for bankrupt Westinghouse Electric Co. They are “ensnared in [the] nuclear contractor’s Chapter 11 case.” Risk-transferring P3s? [Sub required]

15) Georgia: A public records dispute is again raising important questions about what happens to public information when a government entity is privatized. “The case has pitted Jones Day partner E. Kendrick Smith—the sole named plaintiff in the ongoing litigation—against Atlanta’s Northside Hospital over records associated with the hospital’s acquisitions of four large physician practice groups between 2011 and 2013—estimated to have cost $100 million in total. Smith—represented by Jones Day partner Peter Canfield, a former longtime lawyer for The Atlanta Journal-Constitution—contends that Northside Hospital and its parent corporation are subject to Georgia’s open records law because the now-private, nonprofit hospital was first established by the Hospital Authority of Fulton County 50 years ago.”

16) Massachusetts: The state’s federal congressional delegation has written a letter to the Massachusetts Bay Transportation Authority encouraging it to negotiate with a machinists union in hopes of preventing dozens of jobs from being outsourced. Members of the union praised the delegation for its support. “‘We hope Governor Baker and Transportation Secretary Pollack take the appropriate action against the failed policy of privatizing our public transit services,’ said Mike Vartabedian, a local business representative of the machinists. The Baker administration has made privatization a priority to help the MBTA balance its budget. But the push to outsource jobs has met strong opposition from unions and many Democratic legislators.”

17) Massachusetts: The Saugus School Committee has voted to privatize cafeteria staff. “Unionized cafeteria workers, members of the American Federation of State, County and Municipal Employees, have expressed concern that school officials appear to want a private company to take over the entire food service operation, including the workforce. (…) After the vote, AFSCME Council 93 Assistant Director of Legislation, Political Action and Communications Molly Maloney told the School Committee members they showed “a complete lack of respect” to the employees and union members. At the outset of the April 13 meeting, Maloney asked the School Committee to delay approval of the food service contract in order to be able to fully review and process information she provided.”

18) Michigan: With state backing, Detroit is making its way back to financial health. “State oversight works,” says Eric Scorsone, a deputy state treasurer who is on leave from his position as director of the Center for Local Government Finance and Policy at Michigan State University. “Scorsone did not defend the state’s controversial emergency management law, which has come under fire following decisions made by Flint managers that led to the city’s water contamination crisis, instead stressing that some version of state oversight or intervention is an important tool.” [Sub required]

19) Montana: Republican House candidate Greg Gianforte, a fan of selling off public land and privatizing social security, says he opposes the very idea of retirement because it’s “not biblical.”

20) New Jersey: The privatized New Jersey lottery is missing its targets again. “Lottery revenues are down and on track to make it the third year out of four that the private company running the games has missed its targets. (…) Now Northstar is on track to fall short of even those lower targets. Christie’s administration and the Office of Legislative Services agree on projections that in June, when the 2017 fiscal year ends, the state will get $970 million back from Northstar to support social service programs such as a school for the blind and disabled veterans housing. That’s $20 million short of the $990 million income target in the amended contract (Northstar had originally promised $1.07 billion).

21) New York: The New York Times reports that the city auditor has found massive violations of agreements between the city and corporations on “privately owned public space.” New York City comptroller Scott Stringer said in a statement ‘right now, some large developers are gaining benefits worth tens of millions of dollars, but it’s coming at the expense of the rest of us.” [Auditor’s report]. The auditor’s office said “we urge DCP to pursue the avenues required to seek enactment of a local law mandating signage at all POPS locations.”

22) North Carolina: John Lassiter, who was appointed by former Gov. Pat McCrory, resigns as chairman of the Economic Development Partnership of North Carolina. Lassiter “was appointed in 2014 to lead the agency that [McCrory] essentially created to privatize many of the economic development functions of the N.C. Department of Commerce.” The Charlotte Observer says Lassiter was pushed out by the new Democratic governor, Roy Cooper, “after he helped dilute the governor’s influence on the board.”

23) Ohio: State officials are turning down $22 million out of $71 million “in federal charter school expansion grants, saying they don’t think enough potential schools will meet the high performance ratings needed to qualify. The grant money is for new schools opened by sponsors receiving ratings of ‘effective’ or ‘exemplary.’ Those are the two highest of five possible ratings on new state sponsor evaluations. Ohio officials say only five of 65 sponsors achieved ‘effective’ ratings and none were rated ‘exemplary’ last fall.”

24) Pennsylvania: Schuylkill County commissioners are considering responses from nine companies to a request for qualifications it issued earlier this month for an “intermediate punishment center” intended to reduce prison overcrowding. “On Wednesday, county officials and several department heads met with representatives from the GEO Group Co. They met with another group earlier this month.”

25) Wisconsin: Another charter school operator skips out on its students and their families, Peter Greene reports in the Huffington Post. “One of the most basic things we expect from a school, particularly one that tries to bill itself as a public school as many charters do, is that it will be around basically forever. (…) But modern charters are not public schools, and they do not make a public school commitment to stay and do the work over the long haul. They are businesses, and they make a business person’s commitment to stick around as long as it makes business sense to do so. That does not make them evil, but it does make them something other than a public school. And it underlines another truth—students are not their number one priority.”

26) International: Irish anti-austerity activists who won major concessions against water privatization are now being targeted by the state.

Legislative Issues

1) California: The hearing on SB 808, a crucial piece of legislation that would defend traditional public schools from the depredations of private charter management organizations by putting their regulation back in the hands of local school districts, has been rescheduled for this Wednesday, April 26.

2) Florida: Public school supporters are warning that a House proposal pits public schools against charter school operators. Beth Overholt, an opponent of high stakes testing and charter schools, “is among a group of parents, educators, and lawmakers who see a plot to undermine public education unfolding in the session’s final two weeks. They say it is being executed by reformers who use a pretense of accountability and innovation to divert public money to set up an alternative privatized education system.”

3) Maine: Lawmakers want to tighten up review of public contracts. “Many Democrats are backing bills that would create ways to review state contracts and evaluate whether they provide economic value. (…) Democratic Assistant Senate Leader Nate Libby said the current system allows contracts to be awarded on political grounds, and is sponsoring a bill to establish a board that would review procurement contracts worth more than $1 million. ‘Today, the procurement system operates largely in a vacuum, with the executive branch able to spend vast sums of taxpayer dollars on contracts that may or may not be in the public interest,’ he said at a Wednesday committee hearing on the bill. (…) The bills are getting support from unions that say the state has no sound public process to make privatization decisions that can cost public sector jobs. Barbara Theriault, a state social worker, said also that outsourcing creates confusion and trust issues for people with developmental disabilities who use the services.” Gov. Le Page and the Associated General Contractors are opposing the bills.

4) Ohio: The Beacon-Journal says “beware of state lawmakers helping charter schools duck accountability.” They’re referring to the chairman of the House Education Committee, state Rep. Andy Brenner (R-Powell), who “appears to be doing the work of the politically connected Electronic Classroom of Tomorrow, the giant online charter school with a dismal academic record. Lawmakers should be wary of changes Brenner proposes.” The Beacon-Journal says “the state fell into trouble when its school choice chief got caught trying to hide the poor performance of online schools. Now state Rep. Brenner appears eager to achieve something equivalent. Better to stick with a system that aims to put students first, the state using its weight to demand improvement from its poor-performing charter schools.”

5) Pennsylvania: Democratic lawmakers are taking another stab at charter school law reform, introducing an 8-bill legislative package aimed at reforming the state’s 20-year-old charter school law. “Their proposals come a week after Republican state Rep. Mike Reese introduced a charter school reform bill—House Bill 97—that some say doesn’t do the necessary reforms justice. His bill already has been considered twice by the state House. Sturla, who co-sponsored seven of the Democrats’ eight charter school reform bills, said the proposed legislation ‘improve(s) the efficiency and accountability for all public schools in the state of Pennsylvania.’” Conestoga Valley superintendent Gerald Huesken says “overall, public school districts are asking for a level playing field in terms of state mandates and regulations.” Charter school overpayments “are his primary concern. (…) If we can run a program for half of (a charter’s) cost, where is that extra funding going?” he asked. One bill, HB1199, provides for “reimbursable annual rental for leases of buildings or portions of buildings for charter school use.” [HBs1198, 1199, 1200, 1201, 1202, 1203, 1204 and 1205.]

House Bill 1199, introduced by State Rep. James Roebuck, (D- Phila.), “takes aim at conflicts of interest in tax-funded payments for charter school leases. ‘The auditor general’s office has identified millions of dollars in questionable charter school leases,’ Roebuck said in a news release announcing the legislation. ‘We need to prevent these conflicts of interest up front, and we need to recover taxpayers’ money to benefit students when there has been an inappropriate payment for one of these leases.’”

In the Public Interest recently reported that hundreds of millions of dollars have been misspent on California charter schools to lease, build, or buy school buildings.

6) Pennsylvania: A new effort is underway to privatize the state’s liquor system. The House Liquor Committee passed two bills last week, “HB 975, which would further expand the sale of wine, and HB 1075, which would remove state government out of the wholesale wine and liquor business completely, according to the Commonwealth Foundation.” The bills now move to the House floor. But Rep. Peter Schweyer (D-Lehigh County) “expressed concern that the legislature had not completed the study of the state system that was called for in last year’s Act 39. To that, Rep. Adam Harris (R-Juniata County), said he believed the House was at the beginning of the process. ‘It’d be my goal to have that study before we take any action [on the House floor],’ the committee chair said.” The legislation is supported by the right wing Commonwealth Foundation, which has received funding from the State Policy Network, DonorsTrust, Donors Capital Fund, Charles G. Koch Charitable Foundation, and Walton Foundation.

 

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