This is In the Public Interest’s weekly analysis of privatization in the news and in communities nationwide, in order by sector.
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This week’s highlights
- Virginia Tech Prof. Wornie Reed places the battle over school vouchers in an historical context, including the use of vouchers by some whites to resist desegregation.
- Infrastructure investors are waxing almost hysterical about the amount of money they can squeeze out of privatized airports.
- Community groups are protesting a decisionby the EPA to grant a permit to a hazardous waste facility run by French multinational corporation Veolia in Sauget, Missouri.
1) National: Virginia Tech Prof. Wornie Reed places the battle over school vouchers in an historical context, including the use of vouchers by some whites to resist desegregation. “The more recent voucher systems were built on the duress of African American parents. And, in essence it looked like African Americans were being used to undermine educational systems that they helped bring about in the south.” For a detailed discussion of segregation in public and private schools in Washington, DC, see the American Federation of Teachers report. On the racist history of “school choice” see Steve Suitts, “Segregationists, Libertarians, and the Modern ‘School Choice’ Movement.”
2) National: ProPublica’s Annie Waldman has written a comprehensive article on how Teach for America evolved into an arm of the charter school movement. “Established nearly 30 years ago to tap idealistic graduates of elite universities to teach at traditional public schools in high-poverty areas, Teach For America has evolved into an informal but vital ally of the charter school movement. Not only does it place a disproportionate number of its teachers in charter schools, but the organization and its affiliated groups also have become reliant on the support of the Walton Foundation and other school choice advocates, including a daughter of billionaire Michael Bloomberg, the former New York City mayor. As board members of Teach For America’s offshoot leadership organization, which gives to the political campaigns of former TFA teachers, Emma Bloomberg and a Walton family member have supplemented the organization’s contributions to charter school proponents with their own donations.”
3) California: “California’s charter school appeals process disempowers local communities,” In the Public Interest reports in a new study. One reason for the immense growth of the charter school sector after the passage of 1992 legislation “is the state’s charter appeals process, which has helped allow charter schools to rapidly increase in number in many local school districts. The California Charter Schools Act currently enables prospective charter school operators to appeal a local school district’s decision to deny a charter application.” The report “summarizes a number of instances when a charter school closed after being granted an appeal by a county board or the SBE. Its aim is to shed light on the students, families, educators, and school staff harmed by an appeals process that takes decision-making power away from local communities.”
4) California: Mercedes Schneider has carefully gone through the 235-page indictment document of the $50 million (and counting) fraud allegedly committed by the online charter chain called A3 Education and flagged key sections. Schneider is a southern Louisiana native, career teacher, trained researcher, and author of the ed reform whistle blower, A Chronicle of Echoes: Who’s Who In the Implosion of American Public Education. Diane Ravitch writes, “the California legislature is currently deciding whether and how to reform the state’s charter law. The California Charter School Association is fighting any accountability or reform of the law. If a theft of more than $50 million by charter vultures doesn’t persuade the legislature of the need for reform, nothing will.”
5) California: Capital & Main’s Bill Raden reports on “significant wins last week when [Gov. Gavin Newsom (D)]’s first education budget sailed through the legislature mostly intact. A minimum increase, mandated by Prop. 98, will bump funding for K-12 and community colleges by $2.9 billion, to $81.1 billion in 2019–20. The best news for the Golden State’s chronically cash-strapped school districts may be the estimated $850 million freed up over the next two years by the $3.15 billion pension obligation paydown Newsom unveiled in January.” However, Raden notes, “still pending in a follow-up budget bill is language that would limit the ability of charter schools to cherry-pick enrollment, by banning the requirement of student academic records for admissions and outlawing the ‘counseling out’ of low-achievers and students with learning disabilities.”
6) Delaware: State-level auditing practices are inadequate, according to a report by the advisory firm Baker Tilly. “The report comes as [state auditor Kathy] McGuiness] faces criticism over not ordering an audit of a charter school. Charter school audit practices have been criticized, due to financial irregularities that have surfaced over the years.” A charter school audit bill has moved in state Senate after stalling in the House.
7) Florida: Central Florida parents have written letters to the state Department of Education criticizing the performance of private schools that receive tax credit scholarships. The department responded that it does not control private schools, and parents are free to transfer their children. “The concerns about some private schools highlight a key, and ongoing, debate about Florida’s controversial school voucher programs, which are the largest in the nation and considered a model for school choice nationwide. The Sentinel reported in 2017 that some of these schools, free from most state rules, have hired teachers without college degrees and with criminal records, set up in rundown facilities and faced eviction mid-year. For critics, reports of poor-quality facilities and questionable academics mean Florida shouldn’t spend taxpayer money on private schools that don’t have to meet the standards required in public schools.”
Florida’s newest Republican-approved voucher program begins in August and could give another 18,000 youngsters state-funded scholarships at a cost of about $130 million.
8) Florida: Parents of a private religious school that closed last month after its headmaster and football coach was arrested and charged with lewd molestation of a 15-year-old boy, are demanding their children’s records. “Ray said there are a lot of parents just like her who can’t register their children at another school, but there is no one to call — one school official apparently has changed his number and parents can’t reach him. An email sent by The Ledger to a generic school address bounced back as undeliverable.”
9) Idaho: After a whistleblower claims the Cassia County School District’s plan to outsource custodians and maintenance workers “is retaliation against workers who reported improper chemical storage at the district’s maintenance shop,” the school district’s board of trustees voted unanimously to table a decision on privatizing the district’s custodial and maintenance services. Responding to a grievance filed by the Cassia County Education Association, Superintendent James Shank said “I also met with CCEA leadership on June 19 to discuss those issues. I have requested additional meetings if needed.” Trustee Ryan Cranney “said he is deeply concerned about how the change would affect current employees and the other trustees said they agreed.”
10) Idaho: The accidental release of the recording of an Idaho Public Charter School Commission meeting has generated outrage and raised concerns that the state’s open meetings rule has been violated. “After listening to the recording, Blackfoot Community Learning Center said via a press release issued late Friday night that it believes the commission probably violated the state’s open meeting laws by not holding the April 11 discussion in public. Blackfoot Community Learning Center stated, ‘The purpose of open meeting laws is to allow for transparency and input from the public. The commission spent a great deal of time discussing in (the April 11) executive session how they could convince the legislature and governor’s office why it is necessary to close some charter schools in Idaho. This is a discussion that needed to be had in an open meeting, not behind a closed door.’”
11) Indiana: The Journal Gazette takes aim in a sharp editorial against a legal loophole “that allows charter and voucher school operators to walk away from a failing school and open shop under a different name — with barely an interruption in the generous flow of state tax dollars.” If the Indiana State Board of Education approves accreditation, “it will deliver Exhibit A in the accountability charade supported by voucher proponents.”
12) Mississippi: The charter school funding issue has gone before the state supreme court. The plaintiffs claim the state’s unconstitutional charter law has forced the Jackson Public School District to divert nearly $8.7 million to charter schools. They say JPS has no say over how charter dollars are spent. [Video, about 2 minutes] Yanking decision-making from local school districts by state governments is, says Mississippi Business Journal columnist Bill Crawford, “my very most favorite government hypocrisy. The same complaints state officials use against the federal government can be used against them by local officials.”
13) Pennsylvania: Cyber charters are draining money from traditional public schools at an alarming rate. “‘It’s hard to look at these numbers and understand how big they really are in my budget,’ said [Daphne Bowers, superintendent for Montgomery Area School District]. ‘If you look at last year, almost $300,000 in my budget went out to cyber education. When you compare that to what a mill is worth in my district, that is 1.5 mills. We can only raise taxes to an index. I can’t even raise enough taxes in a school year to cover just that. Because of this, districts are faced with cutting back on programs, teachers or even closing schools.’”
14) Pennsylvania: An Allentown charter school, Executive Education Academy, is suing its former business consultant over payroll taxes embezzled by the company it hired, Innovative Payroll. “School officials said Gerald Santilli, a principal in Santilli and Thomson, in June 2014 selected Innovative Payroll and recommended the firm, which handled payroll services for Santilli and Thomson’s other charter school clients.”
15) West Virginia: The House has sent to the Senatean omnibus education bill, “after replacing its cap of 10 charter schools statewide with a cap of three until July 1, 2023. But the bill would allow three more charter schools every three years after that. The number allowed as the years roll by would be unlimited. If the bill ultimately becomes law, these would be the state’s first charter schools” [House Bill 206]. The bill is expected to pass the Senate, “though it remains to be seen if Senate Democrats will agree to suspend the constitutional rules requiring a bill be read on three separate days.”
16) National/St. Louis: Infrastructure investors are waxing almost hysterical about the amount of money they can squeeze out of privatized airports — if they can get their hands on them. “Few infrastructure assets contain the same complexities as airports,” Infrastructure Investor reports, “where revenues arise from core infrastructure aeronautical drivers, a core-plus component such as car parks and a real estate play from its shopping-centre function. While this deters some from even thinking of investing in airports, it provides a huge value opportunity for others. (…) At Luton, latest figures show 45 percent of revenue is derived from non-commercial drivers, while Hywel Rees says about 60 percent comes from retail at Newcastle Airport, partially owned by AMP Capital since 2012. ‘The more mature the airport, the more balanced the split would be,’ he adds. ‘You’re aiming for an ideal split of about 50:50.’” So the biggest issue? “Getting their hands on an asset.”
17) National: “Lexus lanes” are bringing in more revenue than expected for investors, but do little to relieve congestion. From The Bond Buyer: “‘In more recent years, there’s been a pickup in growth and in inflation and so those things have helped to drive both traffic and revenues,’ said Scott Monroe, director in Fitch Ratings’ global infrastructure and project finance group. Fitch’s study includes express lanes that users must pay to use. That could include those that do not charge for vehicles that have two or more people, such as high occupancy vehicles or HOV. Express lanes can be financed and completed by a government entity or through a private company creating a public-private partnership.” [Sub required]
18) National: The Governmental Accounting Standards Board (GASB) is proposing expanded guidelines for reporting on ‘public-private partnerships’ that recognize their increased use in more varieties of agreements. “Susan Howard, program director for transportation finance at the American Association of State Highway and Transportation Officials, said the new guidance addresses the use of performance-based availability payments which are being used by a handful of states such as Florida, Georgia, Indiana, Pennsylvania and Texas. ‘From my understanding, we’re trying to ensure there is greater transparency and consistency when governments are reporting on P3s and specifically on availability payments,’ said Howard. ‘From AASHTO’s perspective it’s pretty technical and detailed when it comes to accounting systems. My understanding is that there are some transactions that don’t fit the existing rules for disclosing leases and concession agreements with private parties.’” [Sub required]
19) Missouri: On Friday, St. Louis Alderman Cara Spencer, D-20th Ward, “introduced a proposed city charter amendment requiring voter approval for any plan to lease St. Louis Lambert International Airport to private companies. The charter amendment itself would first have to be passed by voters. Spencer said she would continue pushing as well for her proposed city ordinance requiring a citywide vote on airport privatization. The city’s chief attorney has said that the measure wouldn’t be legally binding.”
20) International: A confrontation has erupted in Italy between toll road operators and the government after the Transportation Authority lowers the cap on the amount of money private investors can make from their concessions to 7.09%. “This figure is much lower than the average of the current conventions, which in many cases is even more than 10%. The new rules distinguish between works already in the pipeline and those in the future. For the former, the ‘internal rate of return’ provided by the prior tariff system will continue to be applied. Finally, the new system encourages the effective implementation of planned investments, with annual audits and decreases in tolls in the event of non-compliance with timetables.” In the wake of a fatal bridge collapse in Genoa, private road concessionaires were accused of profiteering and neglecting road maintenance for decades, and the government was blamed for scandalously lax oversight.
Criminal justice and immigration
21) National: The stock prices of GEO Group and CoreCivic, the prison-and-detention-for-profit companies, got crushed on Friday after Democratic presidential candidate Elizabeth Warren released a plan to terminate private prisons, stop contractors from charging service fees for essential services, and expand oversight. GEO Group closed down 7.09%, its biggest intraday loss since March; CoreCivic was down 5.92%. Sens. Kamala Harris of California and Bernie Sanders of Vermont have also vowed to phase out private prisons and detention centers.
“This is exploitation, plain and simple,” Warren says. “Our criminal and immigration systems are tearing apart communities of color and devastating the poor, including children. Women — especially women of color — are particularly saddled with the financial burden. We need significant reform in both criminal justice and in immigration, to end mass incarceration and all of the unnecessary, cruel, and punitive forms of immigration detention that have taken root in the Trump Administration. The first step is to end this private profiteering off cruelty. The government has a basic responsibility to keep the people in its care safe — not to use their punishment as an opportunity for profit.”
In its most recent annual report (p. 33), CoreCivic stated “any political platform or promise, governmental agency report, investigation or inquiry, public statement by any governmental agency, policy or legislative change, or other similar occurrence or action, that seeks to, or purports to, prohibit, eliminate, or otherwise restrict or limit in any way, the federal government’s (or any state or local government’s) ability to contract with private operators of correctional and detention facilities, could negatively impact our growth and our ability to renew or maintain existing contracts or to obtain new contracts and could have a material adverse effect on our business, financial condition, results of operations or the market price of our common stock.”
22) National: Democratic presidential candidate Cory Booker says he would implement a sweeping clemency plan for those serving nonviolent federal drug sentences. Fellow candidate Amy Klobuchar proposed a similar step in April. In its most recent annual report (p. 34), released in February, the private prison company CoreCivic stated, “the demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, the expansion of alternatives to incarceration and detention, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by criminal laws. For instance, any changes with respect to drugs and controlled substances or illegal immigration could affect the number of persons arrested, convicted, and sentenced, thereby potentially reducing demand for correctional or detention facilities to house them.”
23) National: An investment analyst says private prison companies face political risk as Democrats pull into the lead in presidential polling. GEO Group “has approximately 40,400 beds at facilities for ICE, USMS, the BOP, or joint Federal/state facilities. Perhaps even more concerning is that a majority of those beds, approximately 35,085, are in owned facilities. However, most of the facilities are run under multi-year contracts. Only 9,300 beds (it’s not specified at what facilities) are up for re-bid in 2021 and only 2,200 up for re-bid in 2022. So, you might think there is no big immediate threat. However, later in their 10-K GEO Group discloses that most contracts can be terminated at any time for no reason.”
24) National/California: The LGBT community in San Francisco’s Tenderloin has been waging a fight against private developers to secure their area from gentrification. “Local organizers began discussing the creation of a historic district as a way to fight gentrification. The concept was later solidified during community negotiations with a real estate developer, who had gained approval from the city to tear down numerous historic LGBT sites to build a residential and hotel project. Activists opposed the destruction of landmarks, but were unable to stop the demolition and development. A group led by black trans women, were, however, able to secure funding from the developer for community services and the official creation of the district, which covers six blocks and is considered the first legally recognized trans district in the world.”
25) National/Texas: Writing in Common Dreams, Eoin Higgins reports that the Trump administration is preparing to open a facility in Carrizo Springs today run by Texas non-profit BCFS for the federal Department of Health and Human Services (HHS) to “house more than 1,000 captured children.” In July 2018, the New York Timesreported “BCFS — a nonprofit group that operates a number of shelters housing migrant children, including a tent city outside of El Paso that has been the focus of protests — counts a former Republican congressman, Henry Bonilla, as a longtime board member and a lobbyist. In December 2016, Mr. Bonilla met with Mr. Trump, then the president-elect, to discuss joining his cabinet as agriculture secretary. BCFS has also long retained Ray Sullivan, a lobbyist and onetime chief of staff to Rick Perry, the former Texas governor who is now Mr. Trump’s energy secretary.” Bonilla’s lobbying firm, The Normandy Group, LLC, received $40,000 in the first quarter of 2018 for lobbying the House, HHS, DGS, and FEMA for BCFS on “Emergency services; humanitarian assistance.”`
26) National: Hacked documents from a Customs and Border Protection private contractor, Perceptics, led to the exposure of the faces and license plates of thousands of U.S. travelers and “also revealed the inner workings of a complex surveillance network that border authorities have long sought to keep secret.” The hoard of hacked documents “includes detailed schematics, confidential agreements, equipment lists, budget spreadsheets, internal photos and hardware blueprints for security systems. Among potentially sensitive government material are internal Department of Homeland Security handbooks, border surveillance diagrams and dozens of signed nondisclosure agreements between the subcontractor and government authorities, as well as companies such as Microsoft and the defense-contracting giant Northrop Grumman.”
27) National: A new bill introduced by Sen. Ron Wyden (D-OR) could eliminate tax breaks for the private prison firm GEO Group, the nation’s largest ICE contractor, Miami New Times reports. GEO Group is based in Florida. “In other words, GEO says it doesn’t make or shape the nation’s immigration laws — it simply profits from them. But that’s not actually true: GEO Group began asserting its influence on immigration policy in 2013, when it turned to the lobbying firm Navigators Global to reach out to Congress on ‘issues related to comprehensive immigration reform.’ In 2017 and 2018, GEO spent more than $3 million on lobbying, including $150,000 to the lobbying firm Ballard Partners for work influencing ‘labor policy’ and ‘immigration regulation.’ Brian Ballard, the firm’s president and namesake, is a top Florida lobbyist who worked as Trump’s finance chairman in the state during the 2016 presidential campaign.”
28) National: Will private detention companies contracting with ICE cash in on the First Step Act? “President Donald Trump convened a news conference last week to celebrate the release of 3,000 federal prisoners on July 19 as part of the First Step Act. But not all of those inmates will actually walk free: 750 noncitizens could well face deportation. (…) The 750 noncitizens released from federal prisons will be held for transfer to Immigration and Customs Enforcement custody so ICE can start the deportation process, according to the Bureau of Prisons. Once detained by ICE, those released from federal prisons can theoretically be released on bond, said Ricardo S. Martinez, a chief U.S. district judge and chair of a federal judicial committee that reviews criminal justice bills and laws. ‘But more likely they are held until they can be repatriated back to their country of origin,’ he said.”
29) California: Although a number of politicians have returned campaign contributions from private prison companies, it appears there is one holdout — San Diego’s Republican mayor Kevin Faulconer. “Faulconer, who has accepted GEO employees’ campaign cash as well as GEO contributions to his charity One San Diego has made no move to rebate the funds. GEO’s latest One San Diego donation of $5000 came April 15, per the mayor’s disclosure reports.” The San Diego Reader reports that GEO is continuing to finance Faulconer’s turkey handouts. “In addition to GEO, SA Recycling of Orange County gave $5000 on April 15. The scrap dealer is best known locally for a raging junkyard fire its Main Street facility in Barrio Logan suffered four years ago, sending plumes of toxic smoke into the neighborhood.”
30) Michigan: These students used their grad speeches to blast their charter school. “Two salutatorians accused Detroit’s Universal Academy of putting profits ahead of students’ educational needs and of firing eight teachers who advocated on behalf of students. The school’s CEO had the mic cut during the second speech.” [Video, about three minutes]
31) New York: New York State may become the first state to ban state-chartered banks from financing private prison companies, with wide-ranging implications. “According to a groundbreaking April 2019 data brief by #FamiliesBelongTogether coalition members In the Public Interest and The Center for Popular Democracy, GEO Group has a $900 million revolving line of credit with a syndicate of six banks (BNP Paribas, Bank of America, Barclays, JPMorgan Chase, SunTrust, and Wells Fargo), has borrowed $490.8 million under the line of credit, owed six banks a total of $786 million through its term loan, and issued four bonds totaling $1.150 billion. Similarly, CoreCivic has issued seven bonds totaling over $1.516 billion, financed by Bank of America, JPMorgan Chase, SunTrust, Wells Fargo, PNC, US Bank, HSBC, BB&T, RBS, Fifth Third, Barclays, Avondale Partners, Macquarie Capital, Regions, Canaccord Genuity, FTN Financial, and Citizens Bank,” Forbes reports.
“If the Assembly passes Bill S5433, and Governor Cuomo signs it into law, this will be the strongest statement by any state yet against the private prison industry, particularly coupled with last year’s divestment. The impact is expected to reach beyond just New York chartered banks, and more widely put pressure on the banking industry writ-large — for instance, New York City Comptroller issued a scathing indictment of Bank of America.”
32) New York: New York City pensions are to expand their ban on prison profiteering. “The New York City Comptroller’s office is working to expand existing restrictions barring investment in private prison operators to now include companies providing services to correctional facilities, said the people, who asked not to be named because the discussions are private. The decision comes amid calls on private equity firms — and the pension funds that hand them billions of dollars to manage — to avoid investing in companies that profit from mass incarceration, including some health care and telecommunications providers that primarily serve prisons.”
33) International: Reacting to a Guardian report, Emeritus Professor of Accounting Prem Sikka says: “Rewards for Failure: Serco has repeatedly failed to meet its contract obligations. So the UK government, obsessed with privatization, gives it more government contracts.”
34) National: The Trump administration is proposing to allow states to contract out job training agency workers. “The changes would also give states the flexibility to staff employment and farmworker-outreach services in the most effective and efficient way, using a combination of State employees, local government employees, contracted services, and other staffing models in the way that makes the most sense for them.” [h/t Michele Evermore at the National Employment Law Project (NELP)]
35) Washington: As the Tacoma City Council rushes to hand over Click! Network, the City’s public Broadband system, to a private company, Mitchell Shook points out the City Charter requirement for a ‘Vote’ of the People on any ‘Sale or Lease’ of a Public Utility System. Shook says that the city has a right to establish its own public utility. [Video, about 2 minutes]
36) National: Washington Post columnist Joe Davidson reports that Trump is outsourcing government to temp workers, citing a new National Employment Law Project (NELP) report. “It says the $1.7 billion the government spent on the contracts in 2018 was five times the amount it spent in 2008. ‘By far,’ wrote authors Chris Schwartz and Laura Padin, ‘the largest increase came in the past two years, when spending jumped from $812 million in 2016 to $1.7 billion in 2018.’ Despite the Republican platform pushing limited government, they said, ‘the Trump administration and its allies in Congress are merely outsourcing government work to temporary staffing agencies, which degrades the quality of those jobs and reduces accountability over the quality of that work.’”
37) National/Louisiana: Writing in In These Times, Karen Savage and Sarah Lazare report on the stealth outsourcing of the St. Martin Parish Sheriff’s Office. “58 sheriff’s deputies [were] granted permission to moonlight for Hub Enterprises, which is Energy Transfer’s security contractor for the Bayou Bridge project,” a part of the larger project connecting the Dakota Access pipeline to refineries in Louisiana. “Records show that Capterville — who was standing sock-footed, his issued uniform and weapon caked with mud, shoes lost hours before along the half-mile trek to the remote site — was, in fact, not on the clock for the sheriff’s office that day. As for why he was in the swamp in uniform, there’s a likely explanation: He’s among the 58 sheriff’s deputies granted permission to moonlight for Hub Enterprises, which is Energy Transfer’s security contractor for the Bayou Bridge project.”
38) Missouri: Community groups are protesting a decision by the EPA to grant a permit to a Veolia hazardous waste facility in Sauget. “Environmental groups say under the new permit, Veolia will be able to emit a harmful level of heavy metalsinto the air.” The Rev. Jennifer Warren Hauser of the First Presbyterian Church in Granite City said “What we don’t measure, will still kill us. You can’t choose what air you breathe, but we have the right to know what is in it. This revised permit removing this monitoring requirement is a travesty (and) a pandering to multinational corporations, by an administration that doesn’t care (whether those living in) the metro-east live or die.” Georgia de la Garza, a spokeswoman for the three groups, “said the pollution emitted by Veolia affects everyone in the region, not just those immediately close to the Sauget business.” The EPA is taking public comments on the permit until Nov. 5.