Public Sector Privatization — A Prescription for Corruption and Chaos

“Many companies win contracts by claiming that they will manage the service in ways that are more “efficient” than the government. Some companies also claim that they can reduce costs to taxpayers. However, in an effort to provide the service with fewer resources while also maximizing profits, companies cut corners, which can have significant and detrimental impacts.” — Cutting Corners Report by In the Public Interest, April 2016

Misguided notions of taxpayer savings and imagined efficiencies, often borne out of a pejorative view of the public sector, continue to lead GOP lawmakers down the failed privatization path. State after state, the contagion of corporate thinking has led to all manner of poor outcomes — and little, if any, in savings.

A number of states stand out as examples of privatization gone completely amok — Michigan being among them.

As the media burns-up with reports on the Flint water crisis, also a brainchild of the corporatist mindset, it’s easy to forget about Gov. Snyder’s other big scandal — the privatization of prison food services. Under the initial contract with Aramark Correctional Services, the crimes and cover-ups are too vast to account fully here in their entirety, although the cliff notes include: maggots and mold in the food, rampant vermin, smuggling of contraband, and various sex acts in the kitchen.

Trinity pic

Photo: Trinity Services Group

Privatization pitfalls continue under the new prison food contractor, Trinity Services Group, who similarly boast a rap sheet that should have been a giant red flag for the Snyder administration.

Once again, food quality and skimping have fomented unrest in Michigan’s correctional facilities. In late March of this year, 1000 of the 1400 inmates at the Kinross Correctional Facility in the Upper Peninsula staged a silent strike, with only a handful of prisoners showing-up for meals.  A week later, inmates at nearby Chippewa Correctional Facility also refused meals served by Trinity. The Trinity contract has also been plagued by employee terminations due to inappropriate behavior, including relations with prisoners.

A recently published University of Michigan study found that privatized prison food services are a recipe for trouble — creating conditions encouraging crime, smuggling, and gang-related activity. Their 83-page report, Food Service Privatization in Michigan’s Prisons: Observations of Corrections Officers, lays the blame squarely on ill-advised privatization schemes:

Contractor employees were largely inexperienced and inadequately trained to work in a prison environment. The authoritative vacuum created by unfit contractor employees was filled by enterprising inmates. Inmates persuaded contractor employees to smuggle in contraband and commit infractions, such as over-familiarity. Contractor employees were manipulated by inmates to form alliances against officers. In some locations gangs gained control the kitchens.

privatizationThe University of Michigan report amounts to a scathing condemnation of prison food privatization, culminating in the question as to whether the entire enterprise is producing savings of any kind — especially after lower quality service has led to increased compensatory costs, in addition to those services that were at the outset simply shunted to other cost centers within the budget, and not factored into the bottom line.

UPDATE: 5-11-16 A Trinity Food Service worker at Ionia Correctional Facility is under state police investigation for possession of heroin and meth. Story HERE.

The early days of the Snyder administration demonstrated a blind zeal for corporatizing the public sector — resulting in policy decisions of which the state is only now examining the full destabilizing effects.

In the Public Interest, a privatization watchdog group, cites another Michigan example where privatization did more harm than good. In their April 2016 report, Cutting Corners, they point to the Muskegon Heights School District’s contract with for-profit charter school corporation, Mosaica Education, as emblematic of tragic outcomes — and much like in Flint, it was the children left to pay the price. Another commonality –both tragedies occurred under the aegis of a state-appointed emergency manager.

Mosaica attempted to carve-out profit by cutting vital services for special needs students. They slashed support in classrooms — violating educational standards with inadequate assistance and training for teachers. Additionally, they refused special needs kids help with language, occupational, and physical therapy. The vendor hired too few teachers, many poorly trained — with 10 percent lacking a teaching certificate altogether. Mosaica also cut costs through skimping on supplies including toilet paper, and by ignoring essential maintenance tasks. The 2012 contract was terminated in early 2014 purportedly because Mosaica claimed they couldn’t turn a profit in Muskegon.

Michigan veterans have also borne the brunt of thoughtless GOP cost-cutting. Under Gov. Snyder’s leadership, the Department of Military and Veterans Affairs was also bitten by the privatization bug when, in 2013, they hired for-profit J2S Group to manage the Grand Rapids Home for Veterans, laying-off trained state employees. A report from the Michigan Office of the Auditor General exposed dangerous cuts in staffing and training, and found that the vendor failed to perform required room checks nearly half of the time. To solve the problem, Lansing has simply thrown more money at the contractor, and now the Detroit Free Press reports that the projected $4 million in annual savings is dissolving rapidly.

In addition to their love affair with corporate strategies, Michigan’s elected leaders are also known for their unwillingness to invest in infrastructure upgrades, leaving roads and public facilities crumbling. The temptation moving forward will be to enter into public private partnerships (P3s) to rebuild public sector assets. However, the P3 road is littered with potential potholes. P3s, which draw on private capital to bankroll infrastructure improvements, are only as good, or bad, as their contract is crafted.  In the Public Interest warns that these arrangements must be carefully written to protect the interests of citizens — including multiple built-in protections with heavy oversight.

Confidence in Lansing’s ability to get anything right at this point, remains rockbottom low.

DSCN0444Amy Kerr Hardin

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