Friendly FIRE

Source: Chris Maisano, Jacobin, Jacobin, Issue 15/16, Fall 2014

Social impact bonds offer private interests yet another opportunity to enrich themselves at public expense. …

Goldman Sachs wants you to know that it’s not just about plundering the globe for profit — it wants to do a little good along the way. That’s why the vampire squid has started founding seemingly innocuous philanthropic outfits like the Urban Investment Group (UIG).

Established in 2001, the UIG is the perfect embodiment of what labor journalist Bob Fitch used to call “friendly FIRE,” per the old shorthand for the finance, insurance, and real estate industries. Always attuned to the public-relations value of its activities, UIG promotes itself with a gauzy language of community uplift centered on the buzzword “double bottom line”: the simultaneous pursuit of social change and return on investment.

In a gesture of exquisite irony, its first investment was in the Dorothy Day Apartments, an affordable housing development in Harlem named after the founder of the anticapitalist Catholic Worker movement. Since then, it has invested billions of dollars in projects such as community health centers, charter schools, early childhood education, low- and moderate-income housing units, small business loans, and community development grants. As Alicia Glen, the former UIG chief currently serving as deputy mayor for housing and economic development under Mayor Bill de Blasio, put it: “We’re not all evil squids. We’re nice little calamari.”

Glen’s highest profile deal as head of UIG was a $42 million investment in Citi Bike, the privately funded bike-sharing program whose signature blue bicycles have become ubiquitous throughout Lower Manhattan and the gentrified zones of north-central Brooklyn. But bikes may not be the most important legacy of her tenure at Goldman. The bank, together with some of the biggest names in social policy, philanthropy, and the nonprofit sector, has led the way in establishing the burgeoning field of social impact bonds (SIBs)…..

…The SIB market is still rather small in terms of dollars, but its promoters are intent on achieving rapid growth. The current total value of SIB transactions in the US is estimated at approximately $100 million; sixteen states and Washington, DC either have an active SIB underway or are considering implementing one…..

….Public-sector unions are increasingly aware of the threat SIBs pose and have begun to rally against state-level legislation that would expand their use. AFSCME Council 94 in Rhode Island has been outspoken in its opposition to a bill that would allow the state to implement a $25 million SIB program….

In Florida, clear guidelines give private prisons priority /Those with serious medical or psychological issues are left to the state

Source: Beryl Lipton, MuckRock, January 29, 2015

Florida, home to private prison giant GEO Group, Inc. and host to facilities managed by Corrections Corporations of America, has seen an uptick in inmate deaths and abuse over the past decade. Earlier this month, the overhaul of its struggling prison system was tasked to Julie Jones, the fourth Department of Corrections head in as many years….. “I asked [former Department of Corrections] Secretary Crews a very specific question,” State Senator Rob Bradley said during a meeting of the Committee on Criminal Justice, “and that was, I said, ‘Are inmates cherry picked for private facilities?’ and he said, ‘No.’”

Secretary Jones’s attempt to respond — “The inmates don’t select….” — was interrupted.

“No, no, no, no, I mean, do private facilities get to take the cheapest ones, the ones that don’t cost as much, the ones that aren’t as bad? ‘Does that happen?’ and he said it’s as random as anything in the world, that private facilities do not cherry pick,” Bradley clarified. “Because I asked that specific question of him and that’s what he told me. Are you giving me a different answer? That the privates get all the easy ones and y’all get all the bad ones?”

“That is my belief,” Jones replied, “yes, sir.”…

….MuckRock has placed requests for private prison contracts related to every CCA facility. We have yet to receive acknowledgement from Florida’s Department of Corrections on requests in that state — GEO took over operation of a few CCA facilities at the beginning of last year, and requests for contracts have only yielded GEO inmate transfer agreements thus far — but a look at a CCA contract we received from Bernalillo County, New Mexico illustrates the sort of restrictions that raise questions.

According to the contract, any inmate in need of “specialty treatment” is not accepted and “the Contractor reserves the right to refuse or remove any inmate from the Facility if the Contractor determines it is in the best interest of the Contractor.”….

Skubick: Workers Fear For Jobs In Merger Of Two State Departments

Source: Tim Skubick, WLNS, January 27, 2015

Ever since the governor announced that he would combine the Community Health and Human Services Departments, the anxiety level in the state civil ranks has gone up as some workers fear they could lose their jobs. 6 News Capitol correspondent Tim Skubick has talked to some of the key players in this story, starting at the top with Governor Rick Snyder. The governor wants to find a better way to deliver state services to those who need it and to get there he wants to take workers from the Community Health Department and combine them with the Human Services Department to create a new and mammoth department of 14,000 workers…..

D.C. home health workers suing for back pay seek class-action status

Source: Tina Reed, Washington Business Journal, January 27, 2015

Home health care workers who sued three D.C. employers for back pay are now seeking class-action status for what they say could ultimately grow to a $150 million case. The workers’ bid for class-action status was filed Tuesday afternoon in D.C. Superior Court. The initial lawsuit was filed in December and included about 150 home health workers. Named defendants include Nursing Enterprises Inc., Vizion One Inc. and Health Management Inc., the latter of which has filed a motion to dismiss the case. ….. The group hopes to also include other home health care companies they allege didn’t pay employees. …. According to the lawsuit, the workers claim they were forced to work without pay following an FBI sting last year that uncovered $78 million in fraudulent Medicaid billing and rocked the local home health industry….

Controversial proposal for nonprofit amendment advances in Pennsylvania

Source: Kate Giammarise, Pittsburgh Post-Gazette, January 28, 2015

In a mostly party-line vote, a state Senate committee advanced a controversial proposal Tuesday that could lead to a constitutional amendment giving the Legislature more authority over determining tax exemptions for nonprofit institutions. A full Senate floor vote is expected on the proposal today. …. Opponents, which include a number of local government and organized labor groups, have said the bill is moving too swiftly and with too little public input or debate, given the far-reaching implications it could have on local government budget and property taxes.
Pittsburgh nonprofit amendment proposal spurs debate
Source:Chris Potter, Pittsburgh Post-Gazette, January 27, 2015

Mayor Bill Peduto blasted a proposed state Constitutional amendment on nonprofits Monday, decrying the bill as hurried — even as efforts mounted to slow it down. Senate Bill 4 would amend the Constitution to give the Legislature sole discretion in defining which organizations are public charities deserving tax exemptions. In a statement, Mr. Peduto denounced the legislation as “secretive and rushed,” and said it could “damage the fragile relationships Pittsburgh and other cities statewide have built with our nonprofit partners.” ….

Surprise check finds charter students missing

Source: Amber Hunt,, January 23, 2015

Two Hamilton County charter schools had fewer than 25 percent of registered students in the classrooms when investigators from the Ohio Auditor’s Office stopped by for a surprise head count, according to a state report released Thursday. State Auditor David Yost announced that he’d dispatched investigators unannounced to 30 schools statewide after fielding complaints that some schools were over-reporting their registration numbers to get more state funding….
Report on Community School Attendance Counts
Source: State of Ohio, Auditor of State, January 22, 2015

Press release

To Collect Debts, Nursing Homes Are Seizing Control Over Patients

Source: Nina Bernstein, New York Times, January 25, 2015

…. But one day last summer, after he disputed nursing home bills that had suddenly doubled Mrs. Palermo’s copays, and complained about inexperienced employees who dropped his wife on the floor, Mr. Palermo was shocked to find a six-page legal document waiting on her bed. It was a guardianship petition filed by the nursing home, Mary Manning Walsh, asking the court to give a stranger full legal power over Mrs. Palermo, now 90, and complete control of her money. Few people are aware that a nursing home can take such a step. Guardianship cases are difficult to gain access to and poorly tracked by New York State courts; cases are often closed from public view for confidentiality. But the Palermo case is no aberration. …. Guardianship transfers a person’s legal rights to make some or all decisions to someone appointed by the court — usually a lawyer paid with the ward’s money. It is aimed at protecting people unable to manage their affairs because of incapacity, and who lack effective help without court action. Legally, it can supplant a power of attorney and a health care proxy. Although it is a drastic measure, nursing home lawyers argue that using guardianship to secure payment for care is better than suing an incapacitated resident who cannot respond. Mr. Palermo, 82, was devastated by the petition, brought in the name of Sister Sean William, the Carmelite nun who is the executive director of Mary Manning Walsh. “…..

Woodbury County Sheriff pitches plan to take over courthouse security

Source: Bret Hayworth,, January 28, 2015

Security guards working at the Woodbury County Courthouse could be reapplying for their jobs less than a year after they started. ….. The outsourcing, aimed at saving an estimated $70,000 a year in personnel costs, resulted in sheriff’s deputies filing a grievance through their union. The action before the Public Employee Relations Board in November pitted deputies in the Communications Workers of America Local 7177 against the new security workers, who are represented by American Federation of State, County and Municipal Employees Local 3462. The county supported AFSCME in the action. The relations board’s decision is due by March 22…..

Policy Cues and Ideology in Attitudes toward Charter Schools

Source: Sarah Reckhow, Matt Grossmann and Benjamin C. Evans, Policy Studies Journal, Early View, Article first published online: December 5, 2014
(subscription required)

From the abstract:
Charter schools have generated support from politicians in both major American political parties while stimulating intense debate among interest groups. We investigate whether and how public attitudes reflect interest group polarization or politician consensus. Using an original survey, we find that charter school opinions diverge along ideological lines among high-information respondents. With embedded experiments, we manipulate respondents’ information using policy cues tied to opposing sides of the charter debate: We assess whether the role of private companies and nonunion teachers changes support for charter schools. We find that the public responds favorably to some informational cues; conservatives without prior information are especially persuaded by information about nonunion teachers. This explains how polarized opinion can develop even in the absence of strong partisan sorting among top political leaders and clarifies the partisan and ideological context of ongoing education policy debates.
Study Finds Pro-Charter School Arguments Are More Convincing
Source: Rebecca Klein, Huffington Post, January 27, 2015

How charter school foes are failing

Source:: Sarah Reckhow, Matt Grossmann, Andy Henion, Michigan State University, MSU Today, January 22, 2015

“School Choice Week” is a Good Time to Review the Evidence

Source: National Education Policy Center, Press Release, January 27, 2015

With “National School Choice Week” once again at hand, the National Education Policy Center reminds us that sound policymaking should be based on research-based evidence, not the ideology of enthusiasts.

Choice Week was created by staunch advocates of choice policies. Accordingly, the Week is generally used to advocate for choice as a goal in itself. The result is that policy is driven by ideology, rather than evidence and research. If the evidence were heeded, however, choice approaches would simply be one of many tools used by policymakers to carefully craft policies in ways designed to advance important societal goals for educating each and every child.

The National Education Policy Center has published research on various forms of school choice, including charter schools, virtual schools, vouchers, and neovouchers (vouchers created through tax credit mechanisms). For example, an NEPC research brief documents the segregation and stratification arising from charter schools run by Education Management Organizations. Importantly, a subsequent NEPC legislative policy brief points to research-based practices that could be employed to create charter schools that are much more equitable.

Similarly, while NEPC research has pointed to disheartening concerns about the current direction and results from online k-12 schools, another legislative policy brief outlines ways to move forward in an evidence-based, cautious way. ….