Wednesday, November 23, 2011

Private Prison Corporations Buy Policy

Over the past two decades the private prison industry increased the number of Americans incarcerated behind private bars by a factor of 17 through a three prong strategy of contributing to political campaigns, lobbying, and garnering political relationships that allow access to policy makers. A report published last week by PICO National Network and Public Campaign details the money and effort spent by the Corrections Corporation of American and GEO Group, among others, in twisting the legislative process to change the landscape of American policies on criminal justice.

In the past decade, CCA and GEO Group have spent upwards of $22 million and employed nearly 300 people to lobby Congress. Through involvement with the American Legislative Exchange Council, these corporations have worked directly with legislators to draft model legislation including mandatory sentencing, truth in sentencing, and three strikes. Additionally, the wave of strict anti-immigration laws are a result of these close ties with ALEC. CCA and GEO's motivation comes from their housing over half of all immigrants detained by the federal government.

Since 2001, the private prison industry has given more than $7.3 million dollars to state candidates and political parties and over $3.3 million dollars to national candidates and political parties. Last year was their largest contribution to date, CCA and GEO Group spent over $1.9 million to influence state elections.

All of this money, time, and effort is applied to influence the legislative process in this country because private prisons are extremely profitable when the policy makers are helping to increase profit margins. In the past decade, CCA has nearly doubled its revenue to over $1.675 billion annually. GEO Group, which is a multinational prison company, saw its US revenue double to $842 million over the same period.

How can voters expect their elected policy makers to use cost-benefit analyses as the basis for decisions regarding the privatization of anything, particularly prison policy, if those politicians are only at the policy table as a result of money from the industry they are supposed to analyze impartially?

Friday, November 18, 2011

Privatization Scandals in New York City

The New York website City Limits has this terrific article about recent and emerging scandals of privatization and delegation of various city services.  A very good overview, worth taking the time to read.

The latest scandal that occasioned this coverage involves CityTime, an outsourced payroll software system, which involves hundreds of millions, almost a dozen people now facing fraud charges, and two on the lam with millions in stolen funds.  The article then a number of other privatization nightmares - cost overruns by a factor of ten, millions paid to consultants with no measurable results or benefit, and so forth.  Municipal outsourcing has always been a feature of American urban management, but recently it has reached an epic scale -  NYC alone now dishes out $10.5 billion to private contractors with little competition in the bidding and little accountability for those who lock in contracts.  As the article points out:

"Free-market rhetoric aside, there is often little real competition under privatization. A national survey of local governments found that in most locations and for most public services, the average number of private firms that could possibly take on government work was less than two—not exactly perfect competition." 
Accountability is often absent - there are insufficient mechanisms to punish contractors for malfeasance or shirking, and there is little transparency in the process or the final products.  

ObamaCare Mandates the Outsourcing of Public School Sex-Ed Classes?

Should state schools be compelled to outsource their sex-education classes?

The Affordable Care Act of 2010 (ObamaCare) authorized $75 million a year, for five years, in mandatory funding for teen pregnancy prevention. (see PREP) This is on top of the $114.4 million that President Obama and Congress are providing to community organizations and local governments for teen pregnancy prevention this year. Fifteen Planned Parenthood affiliates were selected by the Department of Health and Human Services to receive the new grant funding as part of ObamaCare’s Teen Pregnancy Prevention Initiative.

Planned Parenthood plans to partner with states to provide sex education for public school students. Planned Parenthood's website states that its goal is to put an end to abstinence-only programs and “partner with states to provide effective sex education for adolescents, so young people can have the information and skills they need to help them delay sexual activity and to protect themselves when they do become sexually active.”

Planned Parenthood has already begun using these funds to give presentations in public schools across the country. These presentations have some parents up in arms.

note: PREP (Personal Responsibility Education Program) is the first state-grant program from the federal government that funds comprehensive sex education.

Thursday, November 17, 2011

The High Costs of RoboCop

This online article exposes the predicament some 700 municipalities have gotten themselves in by contracting with red-light camera companies. Hoping cameras will make statistically unsafe intersections safer by discouraging motorists from taking the chance with a yellow-light. Traffic camera companies promise new revenue and safer streets.
Municipalities are finding these traffic control devices are having the opposite effect—violations and traffic related fatalities increased. Cities wanting to remove the cameras are in a bind. While replacing public employees (human police officers) with "RoboCops" was as easy as a pen stroke, firing Robocop is complicated.
Getting out of the contract is costly, for example, it will cost the City of Houston $25,000,000 to terminate its contract with American Traffic Solutions. Red-light camera contracts have forced cities to choose between public safety and paying contract termination fees.

NYC City Council Passes Outsourcing Accountability Act, Awaits Bloomberg Consideration

Amid reports of massive fraud and waste surrounding New York City's policies privatizing everything from billing to traffic control, the City Council passed the Outsourcing Accountability Act. The Act requires a cost-benefit analysis ensuring that any outsourcing contract actually saves the city money. It also requires the city's agencies to publicly disclose plans to renew contracts or solicit private contractors and vendors one year before opening bidding. Mayor Bloomberg has opposed the bill, arguing that it will create excessive red tape that will slow down the city agencies' attempts to improve services and solve problems. The city's spending to private vendors and contractors has increased from $5.7 billion to $10.5 billion over only fifteen years. The Act will give New Yorkers a chance to ensure their tax dollars are not wasted through fraud or inefficiency by the private sector.

Wednesday, November 16, 2011

Oregon Furloughs State Workers, Cuts Services to the Poor, and Pays a Fortune to Private Firms

This online article details the paradoxes of privatization in Oregon, where the state government is so strapped that it is forcing furlough days on state workers and cutting services to the poor.  At the same time, it grants millions in no-bid contracts to private firms (many of them out of state or even out of country), pays hundreds of thousands of dollars to former state employees as consultants to advise state officials on various matters, and pays exorbitant amounts for molded plastic furniture for use in state prisons ($133 per chair).  A nice survey of typical state government outsourcing and the associated abuses that go along with it.

The Texas Statesman has an article here about state contracting bills.  As we would expect, it delineates a long series of non-competitive bidding, no sanctions for unsatisfactory performance, no benchmarks for state auditors to assess contractor performance, and troubling connections between firms that received contracts (without having to compete) and elected officials' campaign contributions.

Tuesday, November 15, 2011

Risky Business: A Look at “State-Owned Enterprises” Under the FCPA (Part 2)

     Last week, Part I explained how operating in foreign markets can be risky business for U.S. companies subject to the FCPA. To briefly recap, the FCPA makes it a crime for a company to offer or pay a bribe to a foreign official. For those who are not familiar with the FCPA, hearing the words “foreign official” might conjure up images of foreign dignitaries brokering peace and discussing foreign policy with fellow leaders of the free world. A handful of federal courts, however, have recently interpreted this term of art much more expansively to include any employee of a “state-owned enterprise” (SOE) when the SOE serves as an “instrumentality” of a foreign government. As a result, U.S. employees who work with employees of foreign entities may not realize that they are in fact transacting business with “foreign officials” for purposes of the FCPA.
     This raises two important questions: First, should SOEs even be considered government instrumentalities under the FCPA? If so, at what point does a foreign company with state ties lose its characterization as a private enterprise and transform into an instrument of the government? Although very little case law exists on the FCPA, a number of recent decisions take a shot at answering these questions. Last week, Part I looked at the Lindsey Manufacturing Case, which answered the first question in the affirmative, and addressed the second question by providing a laundry-list of characteristics that indicate when an SOE is operating as an instrumentality of the government.
     This post will examine United States v. Carson, a foreign corruption case currently pending before a federal judge in the Central District of California. Consistent with his colleague’s ruling in Lindsey Manufacturing, which I discussed in last week's post, Judge James V. Selna ruled in Carson that "state-owned companies may be considered 'instrumentalities' under the FCPA, but whether such companies qualify as 'instrumentalities' is a question of fact [for the jury].'" Therefore, according to the court's order on the matter, employees of SOEs can in fact qualify as foreign officials, which would, in turn, expose companies to the FCPA. In addition to a common-sense reading of the statute's text, Judge Selna based this decision on the expansive use of the term "instrumentality" in other federal statutes as well as the longstanding tradition of private corporations serving as instrumentalities of governments to help "carry out governmental objectives."
     The court also provided "[s]everal factors [that] bear on the question of whether a business entity constitutes a government instrumentality." These non-exclusive factors, which largely overlap with the items provided in Lindsey Manufacturing, include:
  • "The foreign state’s characterization of the entity and its employees;"
  • "The foreign state’s degree of control over the entity;"
  • "The purpose of the entity’s activities;"
  • "The entity’s obligations and privileges under the foreign state’s law, 
including whether the entity exercises exclusive or controlling power to 
administer its designated functions;"
  • "The circumstances surrounding the entity’s creation; and"
  • "The foreign state’s extent of ownership of the entity, including the level of 
financial support by the state (e.g., subsidies, special tax treatment, and loans)."
The trial date for Carson is set for June 5, 2012.
     See Order Denying Defendants’ Motion to Dismiss Counts 1 Through 10 of the Indictment, United States v. Carson, No. 8:09-cr-00077-JVS-1 (C.D. Ca. May 18, 2011) (download here).

Monday, November 14, 2011

Privatization and Copyright Law

This article (publicizing the author's own book) has an interesting discussion of privatization currents in the enforcement of copyright law.  An interesting angle not usually discussed in privatization debates.

Sunday, November 13, 2011

The Student Loan Crisis and Proposals to Privatize

With the student loan debate heating up in government, many are asking how we should address the issue of the rising cost of education and the inability of students to pay them off once out of college.  Increasingly, comments posted online are reciting the mantra: "Privatize, privatize, privatize...The Feds need to get out of the education system entirely."

The current loan system is already highly privatized. The federal student loans for years were quickly sold to private companies who would own and service the debt. My law school loan payments went to a private company, not the federal government - they bought the loans from the feds. Obama is trying to reverse how much of this is going on, actually, because the hasty privatization of the student loan debt actually escalated the problem, making it too easy for the government to dish out loans that students couldn't easily repay.

Also, for the first half of our nation's history, most colleges were private and religious, and then the state universities gradually displaced many of them and became dominant. When people talk about "privatizing" higher education, do they recognize that most college students attend state-run universities? Do they really want to shut all those down? If we don't want to close down all the state schools, then we should think of the federal student loans as a subsidy from the federal government to the states. Without it, the states could not afford to run the universities and most of them would close.

Those who want the private sector to start and operate colleges should recognize that almost all of them will be religious/sectarian schools. The secular private colleges of today were nearly all started as sectarian schools to train ministers; many went secular partly to compete with the state-run universities. Among new colleges that start today, the trend is the same - the vast majority are religious-sectarian. Why? Because education is not a very profitable business, and requires heavy subsidization from somewhere.  The experimental for-profit universities we see cropping up today are simply exploiting the taxpayer-funded student loans; they would collapse if the government stopped dishing out tuition money. The private sector does not start and maintain good colleges except where there is a sectarian group pouring money into it. Bottom line: higher education is going to be funded either by taxpayer dollars or by church tithes. If you want to return to being a country where every college is part of a church denomination, that's what privatization means in this area.

Saturday, November 12, 2011

Yet Another Major Federal Contract with No Competitive Bidding

The LA Times reports here that the Obama Administration crammed through a contract (worth nearly a half billion) for an experimental smallpox vaccine without any competitive bidding on the project.  Privatization and government outsourcing advocates often extol the efficiency that free-market forces will bring to government endeavors, meaning competitive pressures to perform.  Unfortunately, instances of no-bid contracts worth millions (or, in this case, hundreds of millions) in taxpayer dollars are very common.  If there is no competition for the contracts, there are no market forces at work, and no resulting efficiency gains.  The article also points out, unsurprisingly, a number of concerns about the costs and need for the contract.  As often happens with large-scale government contracts, the contracting firm's controlling stockholder is a major donor to election campaigns (in this case, Democrats).  Ironically, this is from the same Administration that publicly denounced the Supreme Court's Citizen United decision limiting campaign contributions by corporate interests.

Puerto Rico Launches Major Privatization Program

Reason Foundation's Annual Privatization Report 2010 states that "Since taking office in January 2009, Governor Fortuño’s administration has taken bold actions to address the U.S. Commonwealth’s chronic deficits and unsustainable debt, including eliminating approximately 22,000 government jobs, dramatically cutting expenditures and passing a broad-ranging new law in 2009 inviting private investors to modernize or develop new roads, ports, water systems, electric plants and more." While this form of privatization serves as a short-term solution, the long-term effects of allowing foreign investors to gain control of vital infrastructure can be devastating. The 2009 law (Act No. 29) will allow "any government agency to enter into public-private partnerships (PPPs) with private firms for the design, construction, financing, maintenance or operation of public facilities." This Act authorizes legislators to enter into 50-year leases with private entities with possible extensions of up to 25-years. With minimal upfront investment an investor could gain control over Puerto Rico's infrastructure for 75-years with little return to the commonwealth's coffers.

Book Review: Shrinking the State: The Political Underpinnings of Privatization

REVIEW of Harvey Feigenbaum, Jeffrey Henig, and Chris Hamnet, Shrinking the State: The Political Underpinnings of Privatization (Cambridge Univ. Press 1998).

This site offers reviews of new academic books and monographs on privatization as they come out (see, e.g., here), but we also want to provide our readers with the useful service of featuring important earlier texts that contributed significantly to the literature on privatization of government services.

Unlike most books in this area, this text focuses on the causes of privatization rather than the effects or consequences. This focus on causation makes the book a unique and significant contribution to the academic literature in this area. The causal connection is essentially political, rather than administrative (logistical need) or economic (best value).  As the title suggests, the authors see privatization primarily as an attempt to shrink the state, a political reaction against the large bureaucratic welfare states that emerged in Western/developed countries after WWII.  At the outset, the authors acknowledge that some privatization is illusory, as when the government cedes an enterprise to the private sector but then imposes a regulatory regime (licensing, permitting, code violations, etc.) that allows the government to retain enough control to be a partial owner.

More important for the authors’ thesis is the concept that privatization is a political pendulum – the state expands in response to demands for services from the lower classes, eventually triggering a backlash of those who want to downsize the government, which in turn creates an eventual backlash against privatization when such efforts go too far.  They trace the ebb and flow of privatization in France, the UK, and the US since WWII. This comparative perspective between three highly developed nations also makes the book a useful and significant contribution to the literature, with a well-written history of privatization in each of the countries, as well as discussion of how these trends were independent or influenced each other.  Click "read more" to continue with this review...

Thursday, November 10, 2011

A Corporate Perspective of Prison Privatization

Last year the "libertarian" think tank, the Reason Foundation, published a report on the successes of prison privatization across the country. Amidst a flurry of superficially impressive savings to strained state and federal budgets, the report sounds like an investor prospectus more than an unbiased analysis of the correctional system in the throws of partially transitioning to privatization. The report itself, while proclaiming the benefits of private prisons, discusses numerous violations ranging from poor food quality (resulting in a riot), to sexual misconduct between guards and prisoners, to permitting excessive inmate on inmate violence. The Arizona private prison that several inmates escaped from was found to have inadequate patrols and prisoner movement, excessive false alarms, a lax culture, and inconsistencies in visitor screening procedures. Although the prison was run by the Management and Training Corporation, the report places the blame squarely on oversight by the Arizona Department of Corrections. The Corrections Corporation of America was violating inmates' constitutional rights by preventing them from receiving books from Prison Legal News, yet it changed the policy shortly after a lawsuit was filed on behalf of the prisoners.  The report can be found here"read more" for additional analysis...

Wednesday, November 9, 2011

"Occupy the Dept of Education" Protesters Rally Against School Privatization in NY

NYT has an article here about an offshoot of OWS rallying on the steps of the NY Dept of Education building to protest against privatization of NYC public schools.  Nice introduction to some of the arguments for and against school privatization.  The photo is from the NYT article (Chelsia Rose Marcius).

My observation (nonempirical) is that public school privatization is falling out of fashion now, after having a heyday in the 1990s followed by some highly-publicized disasters.  I'm a little surprised NYC is coming around to this so late in the game, especially after school privatization was tried and abandoned in other places.

Tuesday, November 8, 2011

More on the Battle Over Privatizing Florida's Prisons

A particularly unreasonable editorial appeared on the Daytona Beach News-Journal site: Prison Privatization Offers Major Savings for the State.  It claims that the private prison bids must save the state 7%, and 7 percent is 7 percent savings for the taxpayer, plain and simple - reasoning reminiscent of a jr-high home-economics class from the 1980s.  What if we have only one or two firms bid on the contract(s), and they fall short of the seven percent mark?  Will we bend the rules on the percentage once the commitment to privatization has been made?  Even if we get a 7% savings in year one, there is no way to guarantee that the costs will not increase dramatically once they have the contract locked in and the state no longer has the prison personnel to end the contract and take back the prisons; the state becomes dependent, a hostage to the contract.  There is nothing to keep the firms from low-balling to get the contract and then enjoying the prison budget increases as they roll in year after year.  And even if the state saves 7% the first year on prison operation costs, it will have to spend more money elsewhere in the budget for contract management personnel - these are complex contracts that require experienced procurement managers, which offsets the proposed (illusory) savings.  Numerous laws regarding government transparency, accountability, and procedural safeguards do not apply to private contractors, and additional offset to that imaginary 7%.  Moreover, the private firms running the prison will now have a powerful incentive to lobby for longer prison sentences for criminals and for more behavior to be criminalized, as has happened elsewhere - because more inmates serving longer sentences is money in their pocket.
    The Privatization Blog has previously covered the Florida prison privatization here, and prison privatization more generally here.

Monday, November 7, 2011

New York Times article on contract workers

Yesterday's New York Times contains an interesting article on the supposed gains from privatization.

The article briefly profiles a health-care worker at a state-run veterans facility in Michigan. The worker, employed by a private contractor, is paid $10 per hour rather than $20 per hour like her government-employed counterparts. However, that $10 is not adequate to support her family, so she also receives food stamps. Now Michigan wants to lay off 170 state employees and replace them with contract workers. Will it save the state money, when indirect costs are taken into account?

Privatizing Public Parks?

Article here.  Gov. Chris Christie (R-NJ) has rolled out a new plan to privatize some of New Jersey's public parks.  The plan is said to generate more revenue for the parks, but it will also raise some of the fees charged to patrons of the park. 

Privatizing parks raises several concerns. Some are concerned with a McDonald's being built in the middle of a park, which would defeat the purpose of going to a park to escape the city and relax in nature. Another concern would be having a park renamed after a special interest group or company that pays for the advertising; there is also the possibility of having to pay a fee to enter into a public park, in the future. Commissioner Bob Martin of the NJ Department of Environmental Protection has said that these things would not happen during this particular plan. Let's hope the contract, and future contracts, enforce these promises. In all, there are still many issues to consider about integrating private entities with public parks and the future of "public" parks.

In the private sector, "cutting out the middleman" is a traditional cost-saving measure, but outsourcing involves inserting a middleman between the state and the workers operating and maintaining the parts - and thus would seem, at least eventually, to work in the opposite direction of cost-cutting, despite the promises of contact bidders at the time of the privatization decision.

Privatization Backfire

Nebraska's privatization of child welfare services has given us an example of when privatization can go awry. In 2009 Nebraska began contracting with private agencies that would provide services for families in the child welfare and juvenile justice systems. Two years later three of the five agencies that Nebraska was working with have either lost or dropped their contracts with the central issues being financial and managerial. The Nebraska Legislature's Performance audit Committee has said that the state's officials made a "critical error" by privatizing without first doing any sort of complex cost-benefit analyses. The Department of Health and Human Services also said that there was "some truth" to this allegation that no real analysis was performed. The general opinion seems to be that the state simply moved too fast to privatize without first analyzing the potential financial issues that could arise.

Responding to the Pro-privatization Fanatics in Florida

     This weekend saw the publication of new articles/editorials insisting the Florida should privatize its prisons, as Governor Scott wants (but the courts have thus far disallowed).  The Privatization Blog has covered the Florida prison privatization earlier here, and prison privatization more generally here.
     Journalist (but certainly no expert on this) Steve Bousquet has a piece at the Bradenton site entitled "Union Again Bests Florida," suggesting even by his title that this is merely a fight between 4,000 selfish prison guards and all the good taxpayers of Florida; he repeatedly talks about the guards being in a state of "panic."   Question for Mr. Bousquet: if any other single employer announced that it was cutting 4000 jobs (say, Disney), wouldn't that seem like a bad thing for the state?  Wouldn't you be talking about corporate greed and the staggering unemployment rate in Florida and the strain this would put on various state service agencies?  Why are 4000 suddenly-unemployed state prison guards less of a concern than, say, 4000 displaced workers from the tourism industry?    Second question: these newfangled, more-efficient private prisons - where do you think they might find a few thousand experienced prison guards for their private prisons?  Maybe they will hire a lot of the 4000 newly-unemployed prison guards from the state, right?  If many of the same individuals are going to end up running these prisons after the guv's privatization goes through, how are they magically going to be so much more efficient?  Click "read more" for the rest of the commentary and updated links...

Sunday, November 6, 2011

Risky Business: A Look at “State-Owned Enterprises” Under the FCPA (Part 1)

     Operating in foreign markets can be risky business for U.S. companies. A series of recent cases brought under the Foreign Corrupt Practices Act (FCPA) highlight the fact that the line separating public entities from private entities is not always clear.
     The FCPA’s anti-bribery provisions generally prohibit companies from giving (or offering) anything of value to a foreign official. The Act defines “foreign official” to include employees of government “instrumentalities,” but fails to clarify exactly what constitutes an “instrumentality.” Federal prosecutors, however, have interpreted this term expansively to include “state-owned enterprises” (SOEs), which often resemble private-sector companies. SOEs typically provide water, electricity, telecommunications, and other goods and services, but are owned or controlled, at least in part, by the state within which they operate. Based on this interpretation, any employee of an SOE—from the mailroom clerk to its CEO—may be considered a “foreign official” under the FCPA.
     As one might expect, employees of U.S. companies conducting business abroad often do not realize that they are dealing with an SOE, unwittingly exposing their company to prosecution under the FCPA. This raises two important questions: First, should SOEs even be considered government instrumentalities under the FCPA? If so, what exactly constitutes an SOE? Although very little case law exists on the FCPA, a number of recent decisions take a shot at answering these questions.
     This is the first of a series of posts that will examine the characteristics that differentiate SOEs serving as instrumentalities of foreign governments from private-sector entities that merely conduct business with foreign governments, for purposes of the FCPA.
     This post will examine the “Lindsey Manufacturing Case,” in which District Judge Matz recently ruled that SOEs may serve as an instrumentality of a foreign government under the FCPA. Judge Matz provided the following non-exclusive list of characteristics that indicate when an SOE operates as an instrumentality of the government:
  • "The entity provides a service to the citizens – indeed, in many cases to all the inhabitants – of the jurisdiction."
  • "The key officers and directors of the entity are, or are appointed by, government officials."
  • "The entity is financed, at least in large measure, through governmental appropriations or through revenues obtained as a result of government-mandated taxes, licenses, fees or royalties, such as entrance fees to a national park."
  • "The entity is vested with and exercises exclusive or controlling power to administer its designated functions."
  • "The entity is widely perceived and understood to be performing official (i.e., governmental) functions."
See Criminal Minutes, U.S. v. Noriega, et al., No. 2:10-cr-01031 (C.D. Ca. Apr. 20, 2011). You can download the ruling here.

Friday, November 4, 2011

5 Hard Facts About Public Employees

Great article here from "Off the Charts" website debunking common myths about public employees (i.e., the jobs not yet privatized):

Five Things You Might Not Know About Public Employees

Quick summary:
1)  Most government employees are schoolteachers or school staff
2)  Apart from public schools, the proportion of the workforce employed by the government has been shrinking for the last 30 years
3) & 4) Government employees generally earn less than their private-sector counterparts, even accounting for benefits
5) Labor costs make up 44% of state and local spending

The Privatization Blog Is Seeking Additional Writers

We are currently looking for two or three additional writers for the Privatization Blog - either temporary guest bloggers or permanent contributors.  Critical commentary, news updates, and book reviews - or all three - would be useful to our readers.  We prefer people in academia (professors or graduate students), government, think tanks, or lawyers, who share our concern over the rampant privatization of government services.  Writing is on a strictly volunteer basis; this is a non-revenue blog.  If interested, even on a short-term basis, contact me (blog administrator).

Thursday, November 3, 2011

Prison Privatization

By privatizing prisons, Americans are incentivizing an increase in the numbers of prisoners and the length of their incarceration, according to the ACLU. Furthermore, there is a profit driven motive for a reduction in the standard of care for prisoners. There is little evidence to support the notion that privatization of prisons reduces the cost to governments. For example, the Arizona Auditor General warned of the increased cost of private prisons, and was factually supported in his analysis when the only state department to receive an increased budget in 2012 was the Dept. of Corrections despite increased privatization of the prison system. Additionally, there have been instances of private prison developers bribing judges to impose longer sentences to increase their profits. Private prison companies also devote an expansive effort on lobbying, which may prevent governments from deciding on the issue of prison privatization on purely economic and policy grounds. Should anyone be allowed to profit from the imprisonment of others?

See the ACLU summary, or read the full report.

Wednesday, November 2, 2011

Florida Gov Appeals Court Ban on Privatizing Prisons

Florida court blocks privatized prisons; after protracted tussle and waffling on whether to appeal the decision, the governor has filed an appeal, as reported here.

Previously, the governor had announced he would drop it.  Article here.

Earlier and more complete coverage of the saga from the New York Times here.

Tuesday, November 1, 2011

Privatizing Liquor?

We've come a long way since Prohibition. In Washington state there is a proposal to privatize all state liquor sales and according to the Seattle Times the measure is supported by Seattle voters. The measure would sell off all of the state's liquor warehouses and related assets and accept bids from liquor distributors to take over and permanently privatize all of the state's liquor sales. Further, it would allow liquor to be sold in grocery stores and retailers across the state have flooded Washington airwaves with ads in favor of the initiative. Costco has spent an astronomical $20.8 million which set a Washington record for the most money from a single donor on a voter initiative.

Washington voters will decide on privatization on November 8th.

Boston's Mayor Menino threatens to pull $66 million transportation contract if buses don’t start arriving on time.

This article in the Boston Globe addresses the mounting transportation problems faced by Boston Public Schools after the failure of a private company to fullfill their $66 million transportation contract.
"Boston finds itself in the midst of a transportation crisis two months into the school year, with one in four buses still arriving late to school last week, some by nearly an hour.
Each day, 32,684 students are assigned to board 611 yellow school buses in the city. Even on the school system’s most punctual day of the year, Friday, about 19 percent of buses arrived after the first bell rang."
Boston Public Schools do not have the resources to solve this problem on their own and have considered awarding the school bus contract to several smaller companies in an attempt to alleviate the current transportation crisis.

Horrors of Privatized Foster Care Agencies

Read this article from Detroit's Action News describing the problems with privatized foster care placement in Michigan.  Favorite quote from the article:

"The state pays private agencies to handle most foster care adoption cases. They are supposed to make placing foster children with family a priority. But 7 Action News has found some private agencies fail to do this and appear to manipulate the process to favor their clients--couples hoping to adopt. This can cut kids off from family forever.  Maureen Gordon says she has been fighting a system that seems set on breaking family bonds. A private agency approved another couple to adopt her great niece who is in foster care..."

Despite heroic efforts by relatives of the foster children to obtain custody and meet all requirements by the agencies, the private companies are rebuffing them and favoring foster parents who will pay to adopt...