REMEMBER MY BLOG ON CORPORATIZING UNIVERSITY OF MARYLAND AND JOHNS HOPKINS.....THIS IS THE SAME STORY ONLY NPR NEVER MENTIONS ALL THE CORPORATE SUBSIDY!
You also received a good example of why the US is no longer a free press nation....the entire piece was from a corporate/neo-liberal slant with one 30 second clip from a labor and justice person like me! THIS IS PROPAGANDA BECAUSE IT OFFERS NO CONTEXT, NO END GOAL.....SIMPLY STATES STEP BY STEP AS IT HAPPENS! It's OK because all of this building will be good when the public regains government control and make these universities into public education again! Politicians are elected to work in the public's interest and these contracts will be NULL AND VOID.
The Duke story does a good job showing you the boom in research infrastructure building as is happening here in Maryland but allows the interviewee to mislead you. These building costs are not a university expense....they are paid for by the Federal stimulus a few years back. So, as this report makes you believe students are helping to pay for infrastructure....they are being soaked for profit on top of use of taxpayer money. THIS IS BASICALLY A PUBLIC INSTITUTION. The report tells us of this excellent professor bringing her entire team with her from Texas to get lots of money. What NPR does not tell you is that this is a corporate research group and her team is simply employees of that corporation. They stay together and profit off of taxpayer funded research that is patented for profit and then sold to a global corporation that these corporate universities probably have ownership shares. Then you hear that administrative costs are high for all of the 'partnerships' and at the end you hear the cost to the student is worth it because no doubt there is a pipeline to the corporations to which this university is connected. THE SAME THING IS HAPPENING WITH THE UNIVERSITY OF MARYLAND COLLEGE PARK AND JOHNS HOPKINS.
Just think of the amount of taxpayer money going into building these corporate research structures.....the financial aid these students are using and often default on with the government dealing with the defaults.....and then.....the status of these corporations as private non-profits not paying any taxes and you have
THE NEW ECONOMY = THE 21ST CENTURY ECONOMY = BROOKINGS INSTITUTE NEO-LIBERALISM.
This is what your incumbent politicians have been working on for these few decades. ALL OF MARYLAND POLS ARE NEO-LIBERALS AND WE SIMPLY NEED TO TAKE BACK THE DEMOCRATIC PARTY BY RUNNING AND VOTING FOR LABOR AND JUSTICE. We can change it easy peasy!!
THIS IS WHAT A NEO-LIBERAL MEANS WHEN THEY SAY THEY SUPPORT PUBLIC PRIVATE PARTNERSHIPS AS ALL MARYLAND CANDIDATES FOR GOVERNOR DO! MIZEUR MADE SURE WHEN SHE CAME OUT AS A PROGRESSIVE.....THAT SHE TOO SUPPORTED BOTH THIS CORPORATE SUBSIDY AND WALL STREET LEVERAGE FOR PUBLIC PROJECTS....BANK SUBSIDY. So, it does not matter if a candidate supports a progressive issue or two....it matters that they are aligned with wealth and profit just like the republicans. This is why labor and justice have not caught a break.
Let's take a look at this tiered administrative class that are simply government paid corporate executives:
As corporate NPR/APM report on Duke University as a corporate campus that charges $90,000 tuition shows.....all of America's tax revenue is going to subsidize all of corporations operations. This is called a public private partnership as are all of the deals listed below. Taxpayers get to not only pay all operation and infrastructure costs.....they are fleeced with fraud and corruption while the work is being done. In the case of Duke University as with all corporate universities....students not only pay high tuition.....but they are free labor in a corporate R & D department.
SEE WHY WE HAVE NO MONEY TO FUND PUBLIC SERVICES AND PROGRAMS LIKE K-12?
Keep in mind this has been happening for a few decades....it is only hitting the press because all of the funding and contracts are probably in place. WE THE PEOPLE can recover what is sure to be tons of fraud and we can claim the space as public and simply rebuild real public universities so all is not lost!
Here is an article from 2000 where you can see the process of building these corporate universities. You can see it started in the Clinton era in full force. Here in Maryland Johns Hopkins is a full-throated corporation and the Dean is allowed to simply say----WE ARE NOT PAYING TAXES. WE ARE GOING TO FLEECE STUDENT AND EMPLOYEE....WE ARE GOING TO USE WALL STREET FRAUD TO BOOST OUR ENDOWMENTS.
Remember----between the fraud and corruption and the amount of taxpayer money used to build these university corporations....THE PUBLIC OWNS THESE UNIVERSITIES AND WE SIMPLY NEED TO TAKE BACK THESE CAMPUSES.
IT IS NOT IN PUBLIC INTEREST TO SEND TRILLIONS OF DOLLARS TO PRIVATE UNIVERSITIES TO BECOME CORPORATIONS.
From Columbia University charter:
'For this reason, the handbook states, "businessmen must do everything they can to make certain that they do not carry over from business life and customs [which] do not belong in the university atmosphere." '
Company or College --
Corporate Connections - Mutual benefit or Moral Corruption?
Students are questioning universities' practices and their relationships with corporations.
From the Columbia Spectator, 11/22/99
By Elaine Shen
In a Nov. 1 New York Times article that became a popular topic of discussion on campus, reporter Karen Arenson described Columbia's ascendancy in the following words: "As much a business as an ivory tower…" A business?
In the most traditional sense, schools are not thought of as money-making enterprises. It would be hard to imagine that Plato would support the idea of the guardian kings' school generating revenue from the education it provided. However, in recent years, businessmen and educators alike, have explored ways in which schools can imitate the efficiency found in the marketplace.
But President George Rupp questioned the casual treatment of the similarity between a university and a for-profit corporation.
"Neither 'business' nor 'ivory tower' captures the special identity of a university like Columbia," he responded. "To support our central preoccupation with teaching and scholarship we have…institutional structures that in technical legal terms constitute a corporation. But our core purpose is learning in all its forms."
The University as a Corporation
According to the Department of Education, in terms of legal status, all private educational institutions are corporations - the same organization structure used by many for-profit companies. A corporate structure entails having a governing board of directors (or trustees) who are responsible for hiring a president of the organization. The board is a corporation's highest decision-making body.
Columbia's trustees are also responsible for approving budget appropriations, investment and donation policies, and faculty awards in addition to other broad issues that deal with the school's management.
According to University Secretary Keith Walton, the primary purpose of trustees is "to be mindful of the long-term interests of the school and its core mission of educational and scholarly endeavors."
At Columbia, as well as most universities, most of its trustees are drawn mainly from the for-profit corporate area. The board membership of businessmen (as opposed to faculty, which is the case for British university boards) has historically been the characteristic of American universities.
According to the Role of the trustees of Columbia University, a handbook published in 1957 and still in use today, the lack of educators on the board is attributed to "the democratic idea rising in America."
"Where the legal structure of the privately supported American university is unique," states the handbook, "is that it provides, de jure, a government imposed on professionals (faculty) by laymen (the trustees)."
In fact, Columbia's Charter of 1754 given by the State of New York, explicitly declares that the university's faculty are not allowed to be board members. The handbook reminds trustee business members of the different goals of a university as opposed to a company.
For this reason, the handbook states, "businessmen must do everything they can to make certain that they do not carry over from business life and customs [which] do not belong in the university atmosphere."
Trustees are often but not exclusively alumni of a Columbia school and have demonstrated a strong commitment to the university. Nominated trustees are elected by the existing board, which includes President Rupp. Individual professional accomplishments and area of expertise are the prime considerations, not the particular organizations those achievements may have been for.
But some members of Columbia's community are skeptical of the administration's strict adherence to these ideals and those articulated in the handbook.
"The board of directors are the Who's Who of the ruling class here," said Terry Klug, Executive Board member for Local 241 of the Transport Workers' Union. "It's not any easier to deal with a school than with a corporation because the board of trustees who
have the final approval over contracts are the heads of corporations."
While the board has the ultimate say, Emily Lloyd, Executive vice President of Administration, is the senior administrator with whom unions usually engage.
"We certainly feel a responsibility to run the day-to-day non-academic operations in a cost-effective way," she said, " but, being Columbia, we balance that goal with a belief that we should pay wages and provide benefits that are comparable to those for similar jobs in the area."
She added that Columbia as a university differs from the typical for-profit employer in that the school approaches union negotiations in the least adversarial manner possible.
Given the important role that the board of trustees has, it is surprising that most students interviewed were not aware of who the trustees were, nor what their function was at the University.
Unfortunately, this lack of knowledge lends itself quite easily to misunderstandings. When Aaron Dobish, CC '00 was presented with the profiles of Columbia trustees, he immediately noted Columbia's very visible agreements with AT&T and Citibank. "It all seems a bit sketch to me," he said.
However, when asked about a possible link between trustee Maurilyn Laurie of AT&T and Columbia's deal with that company, University Registrar and Director of Student Information Systems Joe Ienuso, answered, "Who? Who is she? Ienuso also said that trustee Robert McCormack, former corporate executive vice president of Citicorp, had no part in Columbia's agreement with Citibank.
Both Ienuso and Bob Moskovitz, executive director of Student Services, maintain that the most important determinant in their decision-making is student input. The current services on Campus were chosen after evaluation of what the companies could provide to meet student needs.
Given the non-profit status of the university, some students also questioned the existence of an endowment.
Kate Hallinan, CC'03, remarked, "I do think the distinctions [between a for-profit organization and the university] have been blurred when they have however much insane money, they charge us $30,000 and then the elevators break down. It sometimes seems like they're sucking more money in than they're actually spending on us."
While the exact numbers are difficult to calculate, Jon Rosenhein, Vice President of University Budget and Finance, maintains that per capita student expenditures have increased a little more than 100 percent since 1988, while the growth of student enrollment has been about 15 percent.
"I can say with assurance that spending per student rose significantly during the period [of 1988-1998], not declined. "While Columbia's $3.5 billion endowment may be astounding, very little of it is spent - a common practice among most universities. A large part of the endowment is invested as stocks; only a portion of the interest is spent. Endowment numbers are often used for comparing schools because the difference in total dollars can be staggering. Since Harvard's 1998-1999 endowment was $14.4 billion and the average percentage of university endowment spending is five percent, that means that Harvard could have spent an additional $525 million more than Columbia that year. In fact, a school is considered in financial trouble (as Columbia was in 1992 when it spent 6.3 percent of its endowment) if it uses more than its base assets.
"It would be different if the university were receiving charitable expendable gifts in excess but we are not in the situation where we're raising more annually so that the base of revenue exceeds university expenditures," Derek Bellin, Executive Director of University Development and Alumni Relations, explained.
"We would have to be raising at least a little more than a billion dollars a year.
Relations Between For-Profit Corporations And Universities
Tuition revenue alone is not enough to cover the operation costs of the university; therefore outside donors such as alumni, foundations and corporations must be sought. But all gifts accepted must be consistent with the university policy that the trustees put together.
While Bellin conceded that it is possible that for-profit corporations could have different objectives than those of the university, he asserted that, " It has not been the case here, where the university has found itself in the position where the goals of the corporate community are irreconcilable with those of Columbia."
If for-profit entities have different objectives other then those of "educational and scholarly endeavors," what are some of their intentions when giving to schools?
Cathy Grant of Citigroup Foundation replies, "We select the recipients based on a number of criteria, including but not limited to our recruiting initiatives, the quality of the proposed project and whether it fits with our funding priorities, and also to support our businesses globally."
Maciej Paluch, CC'00, believes that for-profit corporate involvement in universities has a simple objective. "I think it's more that companies are trying to save their image by getting involved in the university."
One of the oldest university-business relationships is that between Emory University and the Coca-Cola company. In addition to having a number of buildings named after notable Coca-Cola families, the company also plays a large role in the university's fundraising campaigns. The Atlanta, Ga.-based university even has a sports cheer that dates possibly as far back as the 1930's: (sung to the tune of "Sailing, Sailing") "Emory, Emory, thy future we foretell./ We were raised on Coca-Cola. So no wonder we raise hell./When e'er we meet Tech's engineers, We drink them off their stool./ So fill your cup, here's to the luck/ Of the Coca-Cola school."
Could Columbia start singing an ode to Pepsi? Or Citibank?
According to University Secretary Gary Hauk, who also wrote a book on Emory's history, there has been little if no student opposition to Coca-Cola's involvement on campus.
In fact, Coca-Cola is one of the largest benefactors of Atlanta's educational and non-profit organizations. James Alexander, CC'00, whose high school in Atlanta also received donations from Coca-Cola, said, "There's a need to appreciate what they do for us."
Indeed, many schools are looking for more corporate partnerships and have actively tried to cater to a for-profit's needs. Cornell, Carnegie Mellon and Stanford all have websites for corporate visitors where they can find a list of ways corporations can form relationships with the university for campus recruiting, corporate gifts, and leading classroom discussions, to research partnerships.
The Blurry Line
"Traditional educators like to argue that the profit motive doesn't enter into what they do," explained Patrick Clinton of University Business, a publication for educational administrators,, " but for many of us, the line between traditional institutions and for-profit institutions is getting blurrier by the day."
"At the moment, virtually every major nonprofit institution has for-profit subsidiaries to manage patents, run hospitals, or in a few cases (including Columbia) to market courses or courseware," Clinton wrote via e-mail.
The New York Times article by Karen Arenson also mentions Columbia's aggressive patent efforts as a factor of its financial health. Columbia Innovation Enterprise (CIE) is the office responsible for intellectual property rights of research done at the University. Columbia inventions like the MPEG (Moving Pictures Experts Group), an audio-visual compression format, and co-transformation, a process that can be used to produce multiple kinds of drugs, became patented and the profits that go to CIE follow straight to the university.
But does this pursuit of profit for research go against the university's non-profit ideals? Amy Shapiro, Business Manager of CIE, would argue against this. All the profits from CIE go to the university for distribution. However, the university does not have the resources available to mass-produce and market a product, so it must form agreements with outside companies who are better suited to those responsibilities. "The main reason for technology transfer is to get whatever was created out to the public. There's a difference between just making technology publicly available and getting it out there. The researchers do not have the resources to do that [distribute and sell a product]; the point of a school is not to do business but to do research. However, there's an economics side. By protecting what a researcher invents and by patenting it, we're able to invest back in more research."
Morningside Ventures Incorporated (MVI) is a recently formed for-profit company that was founded by Columbia University earlier this year. Its specialty is similar to CIE in that it handles new media research patents and seeking corporate alliances. But another main focus is distance learning. All of MVI's profits will also go to the university, although MVI is a separate legal entity.
Todd Hardy, Chief Operation Officer of MVI, sees the company's goals as an extension of the university's core mission. "What we are trying to do is find ways to use the content and talent that we have here in the faculty and student body to create knowledge of products and services that do the most for mankind."
Hardy, who previously had little experience with university programs, found the campus atmosphere to be quite different from the commercial environment.
"I've only been here a few months, but the first thing that I noticed right away is the community. It's a university community with talents and resources all focused on maximizing the opportunity we have for delivery of that knowledge throughout the country, community and broader audiences. The commercial environment also has high goals but they're not always as high-minded as that."
In the end, Hardy believes that MVI will help "promote the university both in the name and financial stature and improve all of its goals and resources available to all future students."
That is where Maciej Paluch, CC'00, perceives a similarity in the objectives of a for-profit company and a university.
"A for-profit organization's goal is not necessarily to make money but to expand, to increase its services. IBM and Microsoft are already past the point of making money.
Making money is already guaranteed because they're expanding. For Columbia, I think it's the same thing."
The non-profit educational model could be challenged by the emerging for-profit institutions like the University of Phoenix. But Kenda Gonzales, chief financial Officer of Apollo Group, Inc., the owner of Phoenix, says that for now, the for-profit and non-profit schools are providing different services for different kinds of students. Phoenix primarily works with students age 23 and above to provide continuing education. Most of its classes are held at night to accommodate the students' job schedules.
Responding to Rupp's reference to Columbia as a "community of learning," Gonzales commented, "The key word there is community. Traditional liberal arts colleges offer things like student services, frats, clubs, things that our students aren't as interested in. Our students come here with set career goals."
Essentially, in the education market, one of the non-profits' most distinct characteristics is their community, or at least the semblance of one. The more a non- profit university can create a sort of social coherence, the more successful it is as an institution. "I heard that of all the Ivy Leagues, we have one of the lowest alumni giving rates. That's the business that the Columbia administration should invest in. The only way to go about it is to serve students better."
"The distinction between the university as a for-profit corporation and as an educational institution cannot be separated as much as we would like it to be," commented Miriam Benor, CC'01. "They go hand in hand. If this university isn't successful on a corporate level, it can't possibly maintain its function on an educational level. It needs to find the appropriate balance."
"The challenge comes when budget decisions are made [so that] the so-called academic needs [are] given the right priorities in the process," pointed out psychology professor Donald Hood, who formerly chaired the first Executive Committee of the Faculty of Arts and Science.
After all, the university's mission, by all accounts - though it may stray - is inevitably the education and betterment of its students.
"It needs to look at what it's teaching us and what it's doing as a corporation and make sure the two are consistent," Dobish said.
Reprinted with Permission from the
Columbia Spectator, 11/22/99
New Report Exposes America's Highest Paid Government Workers
Thursday, 20 February 2014 09:38 By Staff, PR Watch
The report shows that, contrary to misinformation spread by some politicians and pundits, America’s highest paid "government" workers are not your local teachers, nurses, or sanitation workers. Rather, they are corporate executives who sign lucrative contracts to take over public services and then pay themselves and other executives eye-popping salaries.
This report by CMD highlights just six of these "government" workers who, between them, raked in more than $100 million from taxpayers in personal compensation during the past few years alone.
"Given these astronomical salaries, and evidence of higher prices, poor service, and at times outright malfeasance, taxpayers have every right to be concerned about how their outsourced dollars are spent," said Lisa Graves, Executive Director of CMD.
These top executives include:
George Zoley, America’s highest paid "corrections officer" and CEO of private prison giant GEO Group. Zoley made $22 million in compensation between 2008 and 2012. CMD estimates that GEO Group makes 86 percent of its revenue from the taxpayers. GEO Group writes language into private prison contracts that forces taxpayers to keep prisons full or else pay for empty beds. GEO Group has faced hundreds of lawsuits over prisoner deaths, assaults, excessive force, and more, which have led to secret court settlements.
David Steiner, president and CEO of Waste Management, is America’s highest paid "sanitation worker." Steiner made a whopping $45 million in compensation from 2006 to 2012. Waste Management's makes about 50 percent of its revenue from U.S. taxpayers, says Goldman Sachs.
Ron Packard of K12 Inc. is America’s highest paid "teacher." Packard made more than $19 million in compensation between 2009 and 2013, despite the alarming fact that only 28 percent of K12 Inc. cyber schools met state standards in 2010-2011, compared to 52 percent of public schools. CMD estimates that K12 Inc. makes 86 percent of its revenue from the taxpayers.
Jeffry Sterba, president and CEO of American Water Works Company, is America’s highest paid "water worker." Sterba has made $8.3 million in the three years he has been top executive. American Water is the largest for-profit provider of water and wastewater services in the United States. CMD estimates that American Water makes approximately 89 percent of its revenue from taxpayers.
Richard Montoni, CEO of Maximus, is America’s highest paid "caseworker." Maximus is a for-profit firm that handles government services for poor and vulnerable residents. Montoni made more than $16 million between 2008 and 2012. In 2013, Maximus landed in hot water for improper billing in Wisconsin. In 2007, Maximus paid $30 million to settle a U.S. Department of Justice criminal investigation into fraudulent billing.
Nicholas Moore is America’s highest paid "road worker." As managing director and CEO of the Australian infrastructure firm Macquarie, Moore made $8.8 million in compensation in fiscal year 2013. As a member of the American Legislative Exchange Council (ALEC), Macquarie has pushed for privatization of public services across the board. It has long-term contracts to run Chicago's Skyway, Indiana's Toll Road, and the Dulles Greenway in Virginia.
These and other “government workers” who head big firms that take over public assets or contract for services make billions off of taxpayers, but are not accountable to taxpayers for their enormous salaries being subsidized at public expense. The report also contains information on shareholder lawsuits, criminal investigations, U.S. Securities and Exchange Commission (SEC) sanctions, court settlements, and more.
As WYPR talked of the bidding process for the next round of public private partnerships...it is odd they try to hide the fact that the transportation rail corporation with ties to the Holocaust is VEOLA....we know this is what will happen. Handing yet another public asset.....public rail to a private corporation while having taxpayers pay all the costs. Close your eyes and tons of fraud and corruption. See why Erhlich and O'Malley need so many fees and taxes on the middle/working class. IT'S THE LOOTING OF THE VISIGOTHS COURTESY YOUR ELECTED NEO-LIBERALS! Below you see what will become of this new rail line in Maryland and none of it is in the public's interest. CONTRACTS NULL AND VOID WOULD YOU SAY? It is sheer thuggery.
Public-Private Partnerships: a Bad Deal for Taxpayers
Design-build procurement, lack of public oversight and unfavorable lease agreements have typified California's public-private partnership (P3) projects. State Route 91 in Orange County required a $207 million taxpayer bailout and is now a public toll road. San Diego County’s State Route 125 was in bankruptcy, defaulted on hundreds of millions of dollars in taxpayer loans, and was ultimately purchased by SANDAG.
The 2009 budget package included expanded P3 authority for state highways. The legislation required safeguards to ensure public agency involvement and inspection to prevent future P3 taxpayer rip-offs. The Presidio Parkway replacement project violated those basic public safeguards. A no-bid contract was awarded that will waste one billion taxpayer dollars.
In Maryland, it is hard to find a venue for Freedom of Information Act with all business tied to private wheeling and dealing. The Maryland Health System website is an example of all of the above. What happens when the state is flooded with FOIA requests as people try to find who got the loot? The state tells us they will now charge 50 cents a page for info. Most information in Maryland comes with a charge. If you can afford it....you can see it.
Republicans will shout this is socialism....which is laugh out loud. Bush placed this process on steroids and now Obama and neo-liberals are knocking it out of the park. So, this is a global corporate policy.....and it is the naked in naked capitalism. There is no free market here.....no competition. That is why Tea Party hates it and labor and justice. THOSE VISIGOTHS AT THE 'CENTER' NEED TO GO!
Secretive, risky, unaccountable: How Public-Private Partnerships are bad for democracy
Jan 27, 2005 02:12 PM
Public-Private Partnerships (P3s) are “all the rage” these days.
Increasingly, throughout Canada, and around the world, public sector managers and politicians are looking to private corporations to provide infrastructure and services that were formerly provided publicly.
Contracts with terms that stretch over several decades are being entered into for a vast array of government projects and services. What does this change portend for democratic values and democratic governance?
Because P3s are, first and foremost, commercial relationships, they are fundamentally changing the values and processes of democratic governments. The thesis of this presentation is that P3s are undermining democratic public institutions because the commercial relationships are inherently secretive, unaccountable and often very risky.
Further, the commercial, business nature of these contracts is turning normal public priorities and values upside down. Public administrative values such as responsibility of staff to elected officials, accountability to the public of elected officials, transparency, public consultation, openness, and Parliament’s “power of the purse” have increasingly been supplanted by concepts such as “investor confidence”; “commercial confidentiality”; “stability for investors”; “proprietary ownership of information and assets”; “commercial sensitivity”; “protection of shareholders” and “competitive procurement rules”. The language change reflects a change in priorities and process.
But first, before I explain how that is so, some definitions. What are public-private partnerships? They are ventures in which the private business sector becomes the lead actor in the provision of public infrastructure and services.
The form of P3s varies, but they generally entail private financing, design, construction, operation, maintenance and even ownership of public services, facilities or infrastructure.
Often, P3s involve the private sector lending funds for a public project and the public sector leasing facilities back by providing regular payments for the life of a specified contract. These contracts are generally very lengthy, usually for a term of 25 to 40 years. These lengthy terms themselves erode aspects of democratic decision-making, since a multi-decade contract by one government of a particular stripe may bind future governments for decades into the future. A child in Grade 8 today will be 50 years old by the time the contract for a Richmond/Airport/Vancouver rapid transit P3 has concluded.
P3s are quite different from normal design and build construction contracts between a public sector owner and a private sector constructor because they use the private sector for provision of operating services, financing and key decision making about issues such as cost.
Any public service or infrastructure is a candidate for P3s, including health care, education, water, electricity, transportation, municipal services and more.
There is a huge array of recent P3 proposals in Canada. Examples include: P3 schools in Nova Scotia; the Richmond/Airport/Vancouver rapid transit P3 in B.C.; the Brampton and Royal Ottawa Hospital P3s in Ontario; the Abbotsford hospital P3 in B.C.; the Moncton to Fredericton toll highway; the proposals for P3 hospitals and courthouses in Calgary and elsewhere in Alberta; the privatisation of B.C. Rail; the 407 toll highway in Ontario and many more.
P3s are a form of privatisation.
There are a wide variety of problems with P3s, which I won’t have time to go into today. Problems ranging from the higher cost of private versus public borrowing; diversion of public funds to profits; inequities caused by user fees; international trade treaty concerns; inadequate risk transfer; service quality concerns; debt being hidden, but not reduced and many more.
But – for today – let me set those concerns aside to focus exclusively on democracy and accountability concerns:
In October of 2002, a very revealing presentation on P3s was made to the Council of the District of North Vancouver by lawyers John Haythorne and Sandra Carter, from the firm of Bull, Housser and Tupper. The presentation featured a list of procedural, policy and legal challenges related to P3s. Among the obstacles identified were policies requiring public consultation and approval. One presentation slide was entitled “Inherent Diseases” which outlined some of the areas the private sector finds problematic in dealing with the public sector – including that with the public sector there is an emphasis on “process”; “stakeholders”; “transparency”; and “public justification”. The slide explained that these things are “often a threat to the success of the project”. (1)
“Inherent diseases”? What do you think? Are transparency and public justification inherent diseases of democracy?
Here are some recent – often alarming, sometimes absurd – examples of the way P3s have caused private, commercial priorities to supplant the “inherent diseases” of democracy.
Three years ago – before the decision was made to proceed with the $2 billion Richmond/Airport/Vancouver rapid transit P3 (R.A.V.), the accountancy and investment advisory firm of PriceWaterhouseCoopers was hired to do a financial feasibility study and business case analysis of the proposed project. The decision making body in this case was “TransLink”, the regional transportation authority for the Lower Mainland. The Board of TransLink consists of elected Mayors and Councillors from around the region. The PriceWaterhouseCoopers report contained key information about the financial viability of the whole proposal. Despite requests, project staff adamantly refused to provide a copy of this report to TransLink Directors, who were charged with making the decision about whether to go ahead or not, because the report contained information which – if revealed – might provide a competitive advantage to potential bidders. Protection of the procurement process trumped provision of key information to elected decision-makers. (2)
Speaking of R.A.V., a P3 for which the federal government has committed $450 million, a recent leaked federal Cabinet document provided a glimpse of how P3s encourage manipulation of process and deception of the public. Last May, Paul Martin announced a $150 million top up to a previous commitment of $300 million. But the Cabinet document said no source of funds had been identified and no one was clear which account the money should be drawn from. The document proposed politicians should tell the public the $150 million is part of Canada’s contribution to the 2010 Olympics, even though that’s not true and the money won’t actually come from the Olympic funds. This is so other provinces won’t feel B.C. is getting more than its fair share from the Strategic Infrastructure Fund. Why the anxiety and the urgency to find a quick manipulated “fix” for this internal problem? Here’s where the document is most revealing. The authors say a decision on source of funds is needed immediately so the federal government can sign an agreement for its contribution because “…the nature of the public-private bidding process means that private companies need to have more certainty about public commitments in order to finalize their bid quotes. Not providing or delaying such confirmation could impact firm’s readiness to continue in the process or to submit high quality bids.” Even if it means lying to the public. (3)
Last year, in Hamilton, Ontario, City Councillor Sam Merulla was told he would have to personally pay nearly $5000 to process two freedom of information requests related to a 10 year P3 with American Water Services for water and wastewater services in Hamilton. What was the information the elected Councillor was seeking? Simply details on how much the City paid in capital costs at its water and wastewater treatment plants. (4)
Also from Ontario, we have the dispute between the new Liberal Government of Ontario and the international consortium running the major tolled expressway Highway 407. In August, the government filed an appeal of an arbitrator’s ruling that determined the government had no ability to control increases in tolls for use of the highway. In the past four years, rates for some peak driving hours on the highway have gone up more than 200 per cent. During the last election, the government promised to voters that it would take action to control the toll increases but the P3 contract appears to prevent this. There are 94 years remaining until the contract expires (!), hence the government’s appeal to the courts. Meanwhile, the owners of the 407 are seeking their own court order to try and compel the Registrar of Motor Vehicles to withhold vehicle permits and plates from drivers who have overdue accounts for toll payments. And, because the consortium is led by a Spanish company, the Government of Spain has threatened to veto a trade agreement between Canada and the European Union if the Ontario government takes any further legal steps to interfere with the right of the 407 operators to increase tolls whenever and however much they want. (5)
Or how about the case of the William Osler hospital P3 in Brampton, Ontario? Following legal action by public health advocates and a Liberal election promise to release contract details to the public, the government provided access to documents contained in a single room. If you want to look at the documents for this $1.3 billion deal, viewing time must be booked with the hospital, is limited to two hours and requires signing of a waiver promising not to photograph or duplicate any document. Despite these extraordinary strictures, the documents which are available do not include any financial information and many other important elements have been deleted or omitted. The explanation for this extraordinary secrecy was provided by representatives of the hospital and consortium who said: “There is certain information that is not present because it is proprietary to …(the consortium)…We have rights under the Freedom of Information Act to include or not include certain commercially sensitive items …(the spokesperson said)…borrowing costs and the value of the entire project are deemed commercially sensitive.” (6)
Another incredibly secretive P3 scheme was recently ruled illegal by the courts. A P3 for redevelopment of the downtown of Maple Ridge, B.C. was overturned by the courts because the City had failed to obtain public approval for the borrowing, through referendum, as required by B.C. law. Private proponents had convinced the City that it would be bad for their commercial interests if project details had to go through the public scrutiny of a public vote. In the end, as part of honouring the court decision, the City had to make a $7.5 million payout to the private contractor so it could exit from its contractual arrangements. (7)
There are many other undemocratic P3 examples in B.C. Such as the sale of B.C. Rail assets to CN. The taxpayers of B.C. only learned after all contracts were signed and finalised, that the lease term is not only for the initial 90 years that the government had initially admitted, but that the contracts provide for the option of 15 lease renewals of 60 years each. Guess what that adds up to. Wait for it – the total potential length of the B.C. Rail P3 is 990 years! I’m not making this up. (8)
Also, in B.C. we have the case of the Abbotsford Hospital P3. Not only have the cost of proposed lease payments doubled between 2001 and 2003, but this so-called “competitive” process now has only one bidder (!) (Access Health Abbotsford). Any normal government tender which produced only one bidder would be cancelled immediately, but because the government and private investors have staked so much on the Abbotsford P3 process, the procurement continues merrily along with the fiction that there is anything at all competitive about it. (9)
In B.C. too, we have the recent report of the provincial Freedom of Information and Privacy Commissioner looking into the proposed contracting out to a U.S. company (Maximus) of all individual and personal medicare records. The Commissioner has confirmed concerns that – because the contractor is based in the U.S. – extraterritoriality applies so information managed by the company is subject to F.B.I. seizure under the terms to the U.S. Patriot Act. Under the U.S. Patriot Act, judges may sit confidentially in hearing locations that are kept secret and may order that certain personal records be seized. Companies subject to such an order to hand over private data, must keep the order under wraps and are forbidden to reveal the order even to their own lawyers. Now that B.C. has entered into a contractual “partnership” with a U.S. based company, all personal medical and pharmaceutical records of individual British Columbians will be subject to the extraordinary and draconian provisions of the Patriot Act. (10)
I could go on with numerous other examples, but I think these ones help to make the point. Healthy democracy depends on full information for citizens, full participation by citizens, independent advice and judgement from public servants, accountability to Parliament and accountability to electors.
Public-private partnerships are undermining all of that. In many P3 cases, the imperatives of investor certainty, commercial confidentiality, proprietary control of information and long term contractual arrangements are subverting the normal checks and balances of our democratic system.
Those of us who care about the public sphere and who have a vision of increased and ever more health democracy in Canada need to start paying closer attention to P3 proposals. We need to insist on full disclosure, full public participation, decision making by elected officials and accountability of public servants. The more we rely on public private partnerships for provision of public services, the less we’ll be able to achieve our dreams for the public good.