Selling Off the Public Good
These guys have a bridge to sell you. A statehouse, too.
It’s a story of modern-day Robin Hoods who have the plot all wrong. Corporate raiders more concerned about profit than the public good, eager to swoop in and make a little money off the current anti-worker environment. Politicians are using the current economic crisis as an excuse to pursue a privatization agenda that is nothing more than an attack on public service workers and taxpayers. Who gets robbed? We do.
When it comes to privatization, “Unfortunately there’s no shortage of bad ideas,” says AFSCME Sec.-Treas. Lee Saunders. “Every time a new scheme to sell a prison or put an unqualified driver behind the wheel of a school bus comes along, it’s the privateers who are responsible. These guys are in our statehouses, they’re in the corporate boardrooms. And they’re all out for one thing: money.”
Let’s take a look at some of the worst offenders:
(Photo courtesy flgov.com)
Florida Gov. Rick Scott
Scott tried to push through a bill that would have privatized half of the state’s entire prison system, eliminating 25,000 public jobs, and he has tried to privatize Medicaid in Florida. Scott is the founder of Solantic, a chain of urgent-care clinics in the state. After winning office, Scott transferred his $62 million stake in Solantic to his wife. When Scott signed an executive order requiring random drug testing of many state employees and job applicants, guess which company landed the lucrative contract for the testing? Solantic.
Corrections Corporation of America
One of the largest companies in the private prison market, CCA would have taken over prisons in Florida had the Scott-backed proposal been successfully ratified by the state Legislature. In Puerto Rico, the Department of Corrections and Rehabilitation awarded a two-year contract worth $20 million to the Corrections Corporation of America. They’ve completed the $73 million acquisition of an Ohio penitentiary that can hold up to 1,800 inmates. In total, CCA runs more than 60 facilities housing 75,000 inmates. CCA has sent letters to many states, offering to buy state-run prisons in exchange for a 20-year management contract and guarantees that the prisons will be at least 90 percent full.
(Photo courtesy michigan.gov)
Michigan Gov. Rick Snyder
In Michigan, where state officials have already privatized cafeteria workers and janitors in public schools, Snyder has tried to privatize prisons and road and infrastructure maintenance. The Legislature is considering a bill to sell a now-vacant prison in the western region of the state to any prison contractor who will produce cost savings of at least 10 percent for the state. No word yet if they’ll use 10 percent fewer locks.
(Photo courtesy governor.sc.gov)
South Carolina Gov. Nikki Haley
In South Carolina, even the school buses are being sold for profit. It’s just one way that politicians and corporations are targeting education (the most obvious being efforts to privatize custodial services, cafeteria workers, and to sell the schools themselves to for-profit companies.) Legislation introduced in South Carolina’s General Assembly would require districts to own and operate their own school buses or contract with third-party providers by next year. Haley contends the state should focus resources solely on educating students, not on actually getting them to school in the first place.
IBM
In Indiana, a consortium of companies led by IBM took over the state’s welfare system, and thousands of Indiana residents abruptly and erroneously lost their benefits due to a slew of computer problems. In 2009, Gov. Mitch Daniels canceled a 10-year contract with the company, acknowledging that among the services that “just didn’t work” was the idea of replacing public caseworkers with private centralized call centers.
Affiliated Computer Services
This subsidiary of Xerox took over Indiana’s contract after IBM was terminated, but it was already operating in the state as an IBM subcontractor, and had the same problems. Governor Daniels was accused of cronyism when he appointed former ACS vice president Mitch Roob to run the state’s Family and Social Services Administration, the same agency that awarded ACS the contract when IBM was sent packing. ACS’s haul for their shoddy work? A cool $638 million.
(Photo courtesy governor.ohio.gov)
Ohio Gov. John Kasich
Kasich is pitching the sale of the Ohio Turnpike, risking thousands of state jobs and making Ohio the first state in the nation to sell off rest areas. “My vision is that we would literally bulldoze down what is currently there and have so many acres of land available and we would have the private sector come in and put their stores in,” Transportation Dir. Jerry Wray said. When Gov. Mitch Daniels privatized the Indiana Toll Road, tolls more than doubled along the 157-mile highway advertised as the “Main Street of the Midwest.”
Maximus Corp
This Virginia-based company’s motto is “Helping government serve the people.” They discretely omit, “for a hefty fee, while taking public jobs.” They privately operate child care centers and child support enforcement. Maximus got a toehold in 1988 when Los Angeles County sold them a contract to run Temporary Assistance to Needy Families (TANF) programs. The company’s reach spread to other states, operating TANF programs and employment centers, including summer youth and veterans employment programs.
Arizona Gov. Jan Brewer’s Guide to Real Estate
- Sell the state Capitol, House and Senate buildings and nine-story executive office building for $81 million to a private company.
- Lease the buildings back. Call it a ‘cost-savings measure.’
- Decide on a whim to buy all the building back because hey, it’s your state’s centennial!
- Avoid pointing out to taxpayers that you just lost $24 million of their money on the whole scheme.
How Cost-Savings Schemes Backfire
Many of the same state and local governments that sold privatization as a cost-savings scheme are finding the opposite is true.
North Dakota’s efforts to privatize Medicaid claims processing have
run into chronic delays and cost hikes, and will not work until next year. An Affiliated Computer Services exec blamed software glitches. The project scheduled for 2010 now won’t be ready until mid-2013.
North Carolina lawmakers questioned state Medicaid leaders about claims processing delays now that a for-profit company, Computer Sciences Corporation, is in charge. State auditors estimate it will cost more than double the $265 million originally budgeted because of the delays. Another company had received a contract to process the state’s Medicaid claims, but that contract was terminated after delays and skyrocketing costs.
In what is probably the most bizarre and spectacularly ineffective privatization plan of all time, Arizona Gov. Jan Brewer in 2010 sold private companies state government buildings for $81 million, then leased them back, then repurchased them to celebrate the state’s centennial saying the purchase was needed because, “Most of our Capitol complex is not ours.” The cost? $105 million. So much for saving taxpayer money.
