Here Is Your Bible of Privatization Horror Stories

Government sucks. Why doesn't it run more like business? Why don't we let business run more of the government? The good news is: We already do. The bad news is: Business sucks worse.

A just-released draft report by In the Public Interest, a nonprofit contracting watchdog, offers nationwide look into just how the push for privatization is screwing up everything, from sick nuns to broken roads to beaten foster children.

The full report—titled "Out of Control"—is available here; here are some of the highlights. Grab your gas masks and armbands:

  • Los Angeles County continually renewed its $3 million year contract with a firm called Wings of Refuge to place foster children, despite numerous reports of kids going to abusive homes where they were beaten and locked away for days on end.
  • Indiana hired IBM to run its food stamp and Medicaid programs, then bungled it and dumped thousands of residents from the rolls—including an elderly nun who was denied food stamps because she missed a recertification interview while hospitalized for cancer.
  • School-cafeteria workers in New Jersey saw their hourly wages cut by $4 to $6 an hour after their jobs were privatized. "[W]e use our personal sick days just to get paid so we can pay rent for the next month," one told investigators.
  • Also, there was the whole Chicago parking meters thing.
  • Denver contracted with a Portuguese company to run a toll-road for 99 years. That firm successfully prevented the construction of a free road nearby, citing its contract. The city is stuck unable to build new roads nearby for a century unless it richly compensates the toll-road operator.
  • During the 2008 flood emergency in Indiana, tolls on turnpikes were suspended for travelers. The company running the toll roads, citing its contract, billed state taxpayers $447,000 for the lost revenue… and got it.
  • A company contracted in New Mexico to tape city commission meetings refused to make those tapes available to the public because they were "private property."
  • A California public transit district hired for-profit companies to run bus routes—companies that didn't do complete drug-and-alcohol tests on drivers and stranded handicapped riders at their stops.
  • Two-thirds of Florida's privatized prisons failed to meet the legal requirement to run at least 7 percent more cheaply than state-run jails. Half of the private jails were actually more expensive to run. But the state never set up a mechanism for punishing them.
  • 65 percent of private prisons require the states and cities they work with to meet inmate quotas, forcing governments to find inmates to keep the jails up to a profitable capacity.
  • Northwest Missouri State University forked over tons of taxpayer cash to contract out most of its food, vending, and bookstore services. Rather than open up the contract to bidders, it took contractors at higher rates who were willing to donate to the university's athletic stadium fund.

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