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Weekly Privatization Report 6-25-2018

1) National: As the Trump administration ramps up the criminalization of migration and refugees, the Department of Homeland Security (DHS) has been instructed to ‘accelerate resource capacity.’ In the Public Interest has just released a new in-depth report showing how private prison corporations CoreCivic and GEO Group are primed to provide additional immigration detention space by privately financing new facility construction. An examination of private financing for correctional and immigration detention facilities takes you inside the world of for-profit immigration detention and for-profit prison deal-making, going through the various structures and strategies that shape the sector—and pose risks to taxpayers, detainees, communities and staff. “Providing financing to governments has become a central growth strategy as both companies became Real Estate Investment Trusts (REITs) in 2013, requiring them to have significant real estate holdings. REIT status allows the corporations to avoid corporate-level taxation. GEO Group received almost $44 million in tax benefits in 2017.”

2) National: President Trump’s migrant and refugee family breakup policy and his subsequent move to family detention have led to an outpouring of commentary and analysis on profiteering from immigration detention, though not yet to much discussion of corporate profiteering from possible “alternatives to detention” that may be emerging as a ‘solution.’

Trump is trying to dramatically expand the existing family detention system. Bob Libal of Grassroots Leadership reports that “ICE is soliciting up to 15,000 new family detention beds. There are a little less than 4,000 today. Four years ago there were less than 100.” See the DHS solicitation here. “The Office of Enforcement and Removal Operations (ERO) is the program within ICE that handles the planning, implementation, and management of broad programs relating to the processing, supervision, detention, and removal of family units when held at one of ICE’s family residential facilities.” Responses are due by this Friday. [See Bob Libal’s interview last Thursday on Democracy Now! talking about private, for-profit, unlicensed family detention centers].

Private, for-profit prison companies such as CoreCivic and the GEO Group have always relied on the kind of “bed shortage” crisis now precipitated by the Trump crackdown and trumpeted in the media. Their prison privatization model depends upon mass incarceration and “the New Jim Crow,” and indeed was initially spurred by the bipartisan crime panic of the 1990s. This profit model has now been augmented, as In the Public Interest has reported, by a growth strategy to cash in on “alternatives” to detention or imprisonment such as ankle monitoring and private supervision.

The private prison corporations, and the thousands of other companies that profit from America’s industrial scale incarceration and criminal justice system, are surely eagerly anticipating the opportunity to make money on the current anxiety drummed up by Trump, Sessions, Fox News, etc. Their stock prices are up, as they were during the first months after the November 2016 election. One possible obstacle to a huge expansion of commercial family detention centers would be a ruling from Judge Dolly Gee this coming week stopping Trump and Sessions in their tracks. But whatever the outcome, vigilance is needed on privatized immigration detention and on government contractors who are sure to be pitching ankle monitors and other social surveillance technologies.

3) National: “Together in a cage is not better than separate cages,” says Claudia Muñoz, immigration programs director at Grassroots Leadership, which has organized a Hutto Community Deportation Defense & Bond Fund. “This order is going to lead to more and potentially longer family detention. Locking families in detention camps with a proven history of abuse to be traumatized together instead of traumatized apart is a sick way to supposedly ‘keep families together.” But Wall Street is bullish on the policy. “The nation’s two largest family detention centers, located in Dilley and Karnes City, Texas, are operated by for profit prison corporations CoreCivic and GEO Group, respectively.”

4) National: The ACLU has done the numbers on “alternative detention.” They report “the Trump administration would have you believe that releasing immigrants while their cases proceed in court encourages them to disappear from the government’s radar. That’s just false. The Family Case Management Program had a 99 percent effectiveness rate— meaning almost every single person enrolled in the program showed up for all immigration appointments and court hearings. And it was fiscally responsible—just $36 per day per family, compared to $319 per day per person for family detention. (…) The administration must reinstate the Family Case Management Program or other alternatives that provide families with community-based support services. It must use its authority to release families on recognizance, bond, and parole. It must reverse its plan to build new jails for children and their parents. And Congress must refuse to fund family detention beds.”

5) National: The Partnership for Working Families, which recently co-authored a new report on the unique power of cities to make progressive change, has launched “We Make This City,” a 10-city national campaign “for community-controlled, publicly owned institutions, structures, and services. We are fighting to ensure all people have access to the systems and structures needed to live full and healthy lives. This includes transportation systems that connect us to work, schools and services, the ability to afford housing in the communities we love, access to clean water and energy and organized power for workers who make all this possible. Public infrastructure connects us all and should serve the needs of the people, not the pockets of corporations. (…) As we struggle to meet our people’s basic needs, corporate interests tell us that they are actually the solution to our problem. Private entities are taking over our roads, our water and our schools — the building blocks of our cities — to create more profit for themselves. It isn’t working for us. The rich are getting richer and our people are suffering.”

6) National: The New York Times has run an excellent piece on how the Koch Brothers have waged a well-funded war on public transportation. “At the heart of their effort is a network of activists who use a sophisticated data service built by the Kochs, called i360, that helps them identify and rally voters who are inclined to their worldview. It is a particularly powerful version of the technologies used by major political parties. In places like Nashville, Koch-financed activists are finding tremendous success.”

7) National: The Network for Public Education and the Schott Foundation have released Grading the States, “a report card on our nation’s commitment to public schools.” The report “examines our nation’s commitment to democracy by assessing the privatization programs in the 50 states and the District of Columbia with the goal of not only highlighting the benefits of a public school education, but comparing the accountability, transparency and civil rights protections offered students in the public school setting versus the private school setting.”

8) National: The Walton Foundation, a major backer of privately run charter schools, is not exactly throwing in the towel, but seems to be inching toward a more balanced approach after years of outside pressure, saying it will make new room in its education giving to include traditional public schools. “In a report released in conjunction with the grant announcement, Walton conceded that charter schools could not be the only way forward. ‘To achieve the growth and diversity of options we seek, we cannot view public charter schools as our only path to new school creation,’ the report said. ‘The sizable challenge in urban schools can’t be met with any single approach. Every family should be able to access a school that best meets their children’s needs.’ By the look of the grantees Walton announced, the bulk of the gifts will still go to charter schools, networks and the organizations that support them. However, a public school district and an organization that turns around struggling Catholic schools join the usual suspects on the list of grantees.”

9) National: The ACRE Action Center on Race & the Economy has published Police Brutality Bonds: How Wall Street Profits from Police Violence. The report contains case studies of Chicago, Cleveland, Lake County (Indiana), Los Angeles and Milwaukee. “A 2017 Chicago GO bond allocated $225 million for settlements and judgments. Chicago will pay 7.045 percent interest over 12 1/2 years, costing the city $198 million in interest. That adds nearly $200 million on to the cost of the settlements themselves—money that goes directly to investors. Banks and other companies—including lead underwriter Goldman Sachs—collected approximately $1.8 million in fees on the portion of that 2017 issuance that was allotted to settlements and judgments.”

One of the report’s conclusions: “Neither banks and other firms, nor private investors, can continue to make a profit from police violence. Banks who hope to do business with a city—such as by providing bond underwriting services, or other financial services—should be required to provide no fee, interest-free loans when that city needs to borrow money to meet police-related settlement or judgment costs. Banks who refuse to do so should be barred from doing business with the city. This would enable cities to cover these costs without generating a profit for companies or investors.”

10) National: Medical contractors are poised to make a killing from Trump’s crackdown on migrants and refugees. “Healthcare for detained immigrants—both children and adults—is a sprawling, confusing system where various government agencies contract with networks of doctors and community hospitals. It is also an expensive system whose costs are hard to predict and manage since they are based on unexpected surges in people crossing the border. In the first six weeks of the Trump administration’s policy to separate kids and parents at the U.S.-Mexico border, more than 2,300 children were sent to HHS-contracted shelters and facilities or foster care. The HHS Office of Refugee Resettlement (ORR) currently houses 12,000 children across 17 states and in 100 facilities managed by contractors.”

11) National: It’s not just the for-profits. It’s both. Nonprofit organizations and their executives have been cashing in on immigrant child detention, and their past performance should cause concern about the safety of detained children. Reveal and the Texas Tribune report that “taxpayers have paid more than $1.5 billion in the past four years to private companies operating immigrant youth shelters accused of serious lapses in care, including neglect and sexual and physical abuse.” The Daily Beast’s Lachlan Markay reports “the surge in child-immigrant arrivals, and resulting detentions, since 2014 has also been very good financially for the people who run SKP. From 2012 through 2016, according to annual tax filings, Southwest Key (SKP) President and CEO Juan Sanchez’s compensation grew nearly threefold, from less than $280,000 to more than $786,000. In 2017, it nearly doubled again, to just under $1.5 million. That’s more than the 2017 non-stock compensation of any GEO Group executive with the exception of its CEO.”

Southwest Key also has a nice sideline in charter schools, one of which “could soon add hundreds of those kids to its attendance rolls, which would mean an influx of state dollars.”

Truthdig reports
that “children held at Shiloh Treatment Center, a government contractor south of Houston that houses immigrant minors, described being held down and injected, according to the federal court filings. The lawsuit alleges that children were told they would not be released or see their parents unless they took medication and that they only were receiving vitamins.”

12) National: The American Federation of Government Employees (AFGE) reports that Bureau of Prisons (BOP) prisons are overflowing with 1,600 new Immigration and Customs Enforcement (ICE) detainees. “AFGE Council of Prison Locals, which represents more than 33,000 BOP employees nationwide, has been urging Congress to increase staffing and has pushed back against the administration’s decision to slash 6,000 positions from correctional facilities. ‘The men and women who work at the Bureau of Prisons risk their lives every day they show up to work, and now they’re being asked to jeopardize themselves further by looking after an even larger population without the proper training, support, or planning,’ said Council President Eric Young. ‘How are our officers supposed to protect and care for these detainees when they barely have enough resources to care for the prisoners under their charge now?’” Yesterday the New York Timesreported on the guilt, rage and tears for federal workers enforcing separations.

13) National: Private prison companies are also profiting from family detention, and court action to restrict it would hit their bottom lines. “In addition to operating immigrant detention centers, these companies also operate family detention centers–the South Texas Family Detention Center in Dilley, TX (CoreCivic), and the Karnes Residential Center in Karnes, TX (GEO Group), which have been subject to significant legal challenges. In its most recent annual report, CoreCivic singles out the operation of family detention centers as a significant risk factor for its business”

14) Arizona: Corizon CEO Steve Rector is whining about the American Civil Liberties Union’s class action suit to hold them accountable for failing to provide adequate services to the state’s inmates, and at KJZZ’s nerve to report about it. He says “prison health care is a red herring.” ACLU Arizona says “Prisoners have died and suffered unnecessarily while waiting for @AZCorrections & @CorizonHealth to provide adequate health care in AZ prisons. It’s unfortunate that the Corizon CEO would rather spend his time attacking the ACLU than comply with a settlement that can save lives.”

15) California/National: CoreCivic is moving fast to expand its immigration detention facilities, and “has filed for building permits in Otay, California, to add a 66,400 square feet extension to the Otay Mesa Immigration and Customs Enforcement Detention Center.” The timing is interesting. “The construction permits were filed on June 11, around the time that hundreds protested outside of the detention center calling for the release of asylum seekers. The facility continues to be in the spotlight as activists allege poor treatment for those held in the facility, such as the lack of access to medical treatment and coercing detainees to do low-paid labor in place of hired workers, which ICE denies. The facility also recently transferred detained immigrants to federal prisons due to overcrowding.”

16) California: Charter school special interest group cash boosts a Sacramento County school board candidate to a narrow victory. “Keefer, a charter school executive who runs the Pacific Charter Institute, received more than $150,000 from charter school advocates during his campaign, according to statements filed with the county. The 51-year-old defeated Sacramento State professor Richard Launey 51 percent to 48 percent for the Area 3 seat, which represents parts of San Juan, Twin Rivers and Sacramento City Unified school districts.”

17) Maryland: Baltimoreans have beaten back water privatization—for now. Food & Water Watch reports that “the mayor withdrew four out of five of her proposed charter amendments, including one that would have radically shifted the way Baltimore awards contracts to private companies after a huge public backlash and real concerns from City Councilmembers about what the changes could mean. The proposals essentially allowed Mayor Pugh’s administration to ability to hand out contracts as they pleased, instead of following competitive bidding best practices..”

18) New York: A state judge has overturned new rules that would have allowed some charter schools to decide on their own who was qualified to teach. “Betty A. Rosa, chancellor of the Board of Regents, and MaryEllen Elia, the state education commissioner, celebrated the decision and said in a statement, ‘every child—regardless of color, economic status or ability—deserves a qualified teacher with meaningful experience to be prepared for the classroom.’ A SUNY official said the decision was likely to be appealed, and that the board’s charter schools committee might reissue the rules in such a way that would satisfy Justice Young’s concerns.” UFT President Michael Mulgrew said of the union victory, “today the children of New York State won. We are gratified that the Court found in favor of strict certification requirements for all teachers. It is not easy to become a fully certified teacher in New York, nor should it be.”

19) North Carolina: The state board of education has transferred operation of a troubled charter school to a new company. “The school opened in 2014 and last year the state outlined several concerns, including low performance, an audit turned in late, and licensure non-compliance issues.”

20) Ohio: The clock is ticking on a privately-run jail. “Over those 20 years the company operating the jail has changed three times, and some cite this as a cause of recent problems. The GEO Group has been operating the jail since early 2017. Low pay for corrections officers, inadequate training and staff turnover at GEO have been cited as contributing factors by county officials(…) No one expects the county jail to be run like a five-star hotel, but inmates and staff have a right to expect a safe environment in which to live and work. If a private company can’t deliver a safe and efficient jail, the county must,” says the Lisbon Morning Journal.

21) Rhode Island: Teachers at a Providence charter school have voted no confidence in their executive director. “The no-confidence vote and a lawsuit by the Providence Teachers Union (which represents the school’s faculty) stems from a disagreement over who can be hired to fill summer teaching positions.”

22) Texas: Tomorrow, advocates, community members, and religious leaders are testifying to Williamson County Commissioners to urge them “to use their power to immediately end the contract with the T. Don Hutto Detention Center in Taylor, Texas. Testimony will include letters from detained mothers and accounts from community members speaking with them. (…) Community members will call for the immediate release of dozens of mothers they are visiting who have been ripped from their children at the border. They will demand their release from T. Don Hutto and safe reunification with their children.”

23) Utah: The Salt Lake County public library system will begin distributing overdose-reversing naloxone to residents at its 18 branches starting this week. “To date, no one has overdosed at a Salt Lake County library, though the idea of training librarians to administer the overdose antidote is relatively common nationwide. (In the past year alone, librarians in Philadelphia, Denver, San Francisco and Maryland have used naloxone to reverse overdoses.) But even in the midst of a nationwide opioid crisis, it’s still rare for libraries to dispense overdose kits to the public, said Dr. Jennifer Plumb, co-founder of Utah Naloxone.”

24) International: For those interested in the wonkish details of the spectacular collapse of Carillion, the British public services outsourcing company, the Financial Times has published an in-depth and damning indictment of the corporate stewardship of Carillion’s directors, and the dodgy accounting practices allegedly abetted by its outside accountants. E.g., “in the five years before 2017, the group impaired not a penny of its goodwill pile, despite growing circumstantial evidence that some of those assets might have slumped in value. Its avoidance of impairments was one of the reasons Carillion could continue paying dividends (and bonuses to managers). In 2016, despite the looming disaster, it paid a record dividend of £78m.” [Sub required] A failure to take seriously slumping government payments for services also contributed to the train wreck, which should be food for thought for fans of PPPs and long-term outsourcing deals here in the U.S.

Legislative Issues

1) National: The Trump administration has released its 132-page blueprint for reorganizing government. Among its proposals, which Democrats in Congress declared dead on arrival, are “to increase efficiency via shared services, public-private partnerships, workforce redeployments, and better customer experiences”; “to learn from organizational design in the private sector”; “to ensure effective implementation of the President’s Management Agenda”; to “leverage more private sector investment” in development finance; to “establish a Government Effectiveness Advanced Research (GEAR) Center as a public-private partnership”; to explore devolving federal services to “direct state, local, or even private-sector stewardship”; “transitioning Fannie Mae and Freddie Mac to fully private entities”; the idea that “the Federal Government’s role in owning and operating transmission assets creates unnecessary risk for taxpayers and distorts private markets that are better equipped to carry-out this function.” The blueprint also envisions reorganizing the Office of the Secretary of Transportation (OST), whose multiple duties, including allocating Private Activity Bonds, have “stressed OST’s organizational structure.”

A key item is to “restructure the U.S. Postal System to return it to a sustainable business model or prepare it for future conversion from a Government agency into a privately-held corporation. The President’s Task Force on the United States Postal System will make recommendations on reforms towards this goal in August 2018.”

2) National: Bob Libal and Judy Greene write “It’s Time to Decriminalize Immigration. Congress should repeal the law that allows for kids to be ripped away from parents and for migrants to be criminalized en masse at the border.”

3) Arkansas: New rules for carrying out a 2017 state law “meant to give open-enrollment charter schools easier access to vacant or little-used traditional school campuses” will be voted upon by the state’s Commission for Public School Academic Facilities and Transportation.

4) Ohio: The Beacon Journal is encouraging Ohio Republican lawmakers to fix the ECOT cyber school scandal. “This is a big scandal, the state seeking to claw back $80 million, with the total amount of undeserved public funding likely reaching into the hundreds of millions. Now Republicans are taking the responsible course, with Ryan Smith, the House speaker, and Peggy Lehner, the chairwoman of Senate Education Committee, in the lead. No doubt, the party is driven to save political hides. It also is true the state must develop a sound structure for governing and funding online education. This mode of schooling won’t function effectively without it.”

5) Pennsylvania: Education historian and anti-privatization advocate Dianne Ravitch says “Pennsylvania has many cyber charters. They are all failing schools. The legislature doesn’t care. (…) Even choice advocates are embarrassed by cyber charters, but they keep on going, collecting tax dollars for rotten services.” But maybe there’s hope. “No cyber charter school in Pennsylvania have ever received a passing academic score from the state, and very few have come close, according to information recently highlighted in a report from the office of Democratic State Rep. James Roebuck of Philadelphia. Roebuck and other House Democrats have assembled a package of bills that would further regulate charters by reforming how they use reserve funds, rules for leasing buildings, special education payments, contracting, the teacher evaluation system, disclosure in advertising, school building closures, and the transfer of school records. The package would not single out cybers, but other legislation has been introduced that would reduce their per-student reimbursement.”

 

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