October 16, 2014


New Report Exposes Governors Who Helped Powerful Lobbies & Campaign Donors Boost Profits at Taxpayer Expense. A new report by the Center for Media and Democracy, Pay to Prey: Governors Facilitate the Predatory Outsourcing of Public Services, details a national trend of outsourcing experiments gone awry. “Governors across the nation seem to be reading out of the ALEC playbook, attempting to shrink government by selling off the profitable services to private companies,” said Lisa Graves the Executive Director of the Center for Media and Democracy. “While success stories are hard to find, fiascos are thick on the ground. In state after state, the result has been worse outcomes for the public, scandal, lawsuits, and scorching headlines.” The report highlights the efforts of governors across the country to outsource important public services to private firms with high-powered lobbyists and related campaign contributions. The report includes examples from multiple states. eNews Park Forest

Trillions in Global Cash Await Call to Fix Crumbling U.S.. . . Institutional investors such as Montreal-based Caisse de Depot et Placement du Quebec have capital and want to invest in U.S. infrastructure because it meets their long-term objectives, said Macky Tall, Caisse’s vice president of private equity and infrastructure. The Caisse is Canada’s second-biggest pension-fund manager, with C$214.7 billion ($190.7 billion) in net assets as of June 30. There hasn’t been more investment because the U.S. is behind other countries in tapping private capital, Tall said, and there’s been a lack of expertise, legal authority or receptivity to it in some parts of the country. Bloomberg

NC: Charter School Power Broker Turns Public Education Into Private Profits. Baker Mitchell is a politically connected North Carolina businessman who celebrates the power of the free market. Every year, millions of public education dollars flow through Mitchell’s chain of four nonprofit charter schools to for-profit companies he controls. ProPublica

IN: Toll Road board hears about “worn out” road. . . .”For all intents and purposes the whole concrete road is worn out,” said board member Kevin Kelly, who is president of construction company Walsh & Kelly. “It has served its useful life.” In comments after the meeting, Kelly said an annual report on the road showed private operator Indiana Toll Road Concession Co. is in substantial compliance with its lease, including road maintenance. . . . “We get more complaints about the service stops than anything else,” said board member John Letterman, of Elkhart. “How Indiana looks to the world is part of this,” he added. . . . Since the bankruptcy, a number of elected officials, including U.S. Sen. Joe Donnelly, have called for Indiana to exert its rights under the lease and take the road back. At the time the lease was under negotiation, then-Indiana Gov. Mitch Daniels declared the state could take the road back if the operator ever went bankrupt. It is not clear from the Toll Road Concession Agreement if that can actually be done. If the state did commandeer the road, it most likely would be sued by the bondholders, who could claim to be owed billions of dollars. nwitimes.com

IN: Infrastructure investors line up for Indiana toll road. Some of the world’s largest pension funds and infrastructure investors are forming consortia to bid for the operator of an Indiana toll road that filed for bankruptcy last month, according to people familiar with the matter. The interest in the asset shows that infrastructure investors have not been fazed by the failure of one of the largest privatisations of U.S. infrastructure, even though any deal is expected to come at a significant discount to its original value. . . . Australia’s Hastings Funds Management has partnered with the California Public Employees’ Retirement System (Calpers) and Italian toll road operator Autostrade Meridionali SpA , the people said. The West Australian

TX: Foes try to bring proposed toll road to a dead stop. Critics of a toll road connecting Bush Turnpike to Hunt County brought their fight Tuesday to this city of about 25,000 along Interstate 30, the planned terminus for the divisive Northeast Gateway. As Hunt County commissioners, who largely support the project, prepared to meet, toll road opponents stood outside a county building with signs that said, “No eminent domain for private gain” and “Hands off our land.” It was one of several government meetings that opponents attended Tuesday to express their opposition to a road that many say will ruin a rural way of life. A growing number of area city councils, including in Fate, Lavon, Rockwall, Sachse and Wylie, formally oppose the project. Dallas Morning News