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Pay to Prey Report on the Privatization of Public Services Center for Media and Democracy 2014

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Pay to Prey

Governors Facilitate the Predatory
Outsourcing of America’s Public Services

CENTER FOR MEDIA AND DEMOCRACY
October 2014

© 2014 Center for Media and Democracy. All rights reserved.
No part of this document may be reproduced or utilized in any form or by any means, electronic or mechanical,
including photography, recording, or by information exchange and retrieval system,
without permission from the authors.
Center for Media and Democracy
ALECexposed.org | PRWatch.org | SourceWatch.org
Madison, WI 53703 | (608) 260–9713
Acknowledgements: Jonas Persson, Mary Bottari, Jessica Mason, Brendan Fischer, Lisa Graves, Rebekah Wilce.

TABLE OF CONTENTS
INTRODUCTION............................................................................................................................................................. 1
EXECUTIVE SUMMARY................................................................................................................................................. 2
OUTSOURCING AMERICA: FLORIDA......................................................................................................................... 4
Inmates Die in Droves After Governor Scott Outsources Prison Healthcare................................................................. 4
Scott Pushes Expansion of Cyber Schools and Online Testing........................................................................................ 5
Scott Pursues a Family Friendly Approach to Privatization............................................................................................ 7
OUTSOURCING AMERICA: KANSAS........................................................................................................................... 9
Governor Brownback Outsources Child Support Services to Donor............................................................................. 9
Brownback Slashes Medicaid for the Poor to Finance Tax Cuts for the Rich............................................................... 10
OUTSOURCING AMERICA: MICHIGAN................................................................................................................... 12
Governor Snyder Stands Behind Prison Privatization, Even After Murder for Hire and Maggots on the Plate......... 12
With ALEC Air Cover, Failing Cyber Schools Are on the March.................................................................................. 13
OUTSOURCING AMERICA: OHIO............................................................................................................................. 15
Governor Kasich’s Privatized Jobs Agency Fails to Generate Jobs................................................................................. 15
White Hat’s Magic Trick, Transforming Public Schools into Private Assets................................................................. 17
OUTSOURCING AMERICA: PENNSYLVANIA........................................................................................................... 20
Governor Corbett Pushes to Privatize Liquor Sales Benefiting Campaign Donors..................................................... 20
Corbett Outsources Legal Counsel to Campaign Contributors.................................................................................... 21
OUTSOURCING AMERICA: MAINE........................................................................................................................... 23
Governor LePage’s Outsourcing Experts Plagiarize Report........................................................................................... 23
LePage Supports Pumping Public Water for Private Gain............................................................................................. 24
OUTSOURCING AMERICA: WISCONSIN.................................................................................................................. 26
Governor Walker’s Privatized Jobs Agency Generates Many Headlines, Few Jobs....................................................... 26
Maximus Inc.’s Troubled History in Wisconsin............................................................................................................. 27
ENDNOTES..................................................................................................................................................................... 29

INTRODUCTION
Maggots, drug smuggling, sex with inmates. As if the news
were not already bad enough, shocking new allegations of
a murder-for-hire plot are emerging from Michigan as the
media digs deeper into that state’s failed outsourcing of
prison services.
In 2013, Governor Rick Snyder invited the Philadelphia-based for-profit company Aramark to take over food
services in the state’s prisons. The action was a 180-degree
change in course, as the administration previously rejected
all such bids on the grounds that none of the proposals
would save the state money. The $570,000 Aramark spent
on lobbying surely helped the company persuade the administration to change its mind.
Since Aramark took over Michigan’s $145 million food
service contract – eviscerating the stable middle class
jobs of some 370 public workers – one stomach churning
scandal followed another. The state fined Aramark $98,000
in March for food shortages, “unauthorized menu substitutions” and sexual relations between kitchen workers and
inmates, and another $200,000 in August after problems
persisted.

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All the while, the Snyder administration has stood behind
the company and the state prison director secretly waived
the $98,000 fine soon after it was imposed. Perhaps Snyder
will reconsider this position given new allegations that an
Aramark worker has asked a prisoner to assist him with the
murder of another inmate.
While Aramark’s failed outsourcing of prison food services
is a dramatic example of the harms that can arise from
the America’s public services and assets, this report, Pay
to Prey: Governors Facilitate the Predatory Outsourcing
of America’s Public Services, contains many other cases of
outsourcing run amok generating worse outcomes for the
public, often higher costs, lawsuits and scorching headlines.
While large corporations are the winners in this scenario,
all too often taxpayers are the losers when transparency, accountability and the public interest are sold out to
for-profit firms.

EXECUTIVE SUMMARY
Outsourcing of public services is a big business. Some
experts estimate that $1 trillion out of the $6 trillion the
federal government, together with state and local governments, spend annually are handed over to private contractors.1
In 2010, an electoral landslide ushered in a new breed of
governors. Aided and abetted by corporate-funded legislative and lobbying groups, such as the American Legislative
Exchange Counsel (ALEC), these governors pushed the
envelope of outsourcing and privatization, selling public
services to for-profit firms with their powerful political
lobbies and related campaign contributions.
In this process, transparency and accountability are lost
and the public loses its ability to influence decision makers
through normal democratic channels. Shared prosperity
also suffers when good middle class jobs are lost to lowroad, low-wage employers.
In states across the country, schools, health care, prisons,
prison food, water services, road services, state liquor sales,
state economic development authorities, legal services, and
even child support services were outsourced to private,
for-profit companies. While the governors spoke of tight
budgets and cost savings, a pattern emerged of influential
corporate lobbyists and deep-pocketed campaign contributors.
In this effort to shrink government and sell off the prosperous parts to private interests, the winners are large corporations with a phalanx of lobbyists and campaign coffers big
enough to buy political influence. All too often, taxpayers
find themselves on the losing side.
While there are countless examples of privatizations gone
awry costing taxpayers more money, few independent
studies have been conducted on the true costs of outsourcing. Do reduced labor costs save taxpayers money or do any
savings line the pockets of CEOs and shareholders? One
survey of local officials by the International City/County

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Management Association showed that 52% of governments
that brought services back in-house reported that the primary reason was insufficient cost savings.
As this report goes to print, Indiana’s groundbreaking
sale of the Indiana Toll Road to a foreign conglomerate is
ending in outright bankruptcy and uncertainty for drivers;
Governor Bobby Jindal’s former health secretary is indicted
for lying about his role in the awarding of a $200-million
Medicaid contract, while his controversial privatization of
public hospitals is being rolled back by the federal government; and a Florida newspaper reports that just months after the health care services in state prison were outsourced,
inmate deaths spiked to a ten-year high.
This report – Pay to Prey: Governors Facilitate the Predatory Outsourcing of America’s Public Services – highlights
examples from Florida, Kansas, Michigan, Ohio, Pennsylvania, Maine, and Wisconsin where governors have sold the
public interest to private firms.

•	 FLORIDA: When Florida Governor Rick Scott took office in 2011, he promised sweeping changes in prisons,
health care and education. During his tenure, he went
on to privatize state health care services for prisoners
resulting in a significant increase in inmate death.
His privatization of Medicaid services benefited the
bottom line of private HMOs, who spent $2.54 million lobbying, while shortchanging the most needy. He
also signed bills into law requiring every high school
student to take online classes, aiding private firms
Pearson, K12 Inc., Connections Academy, and Kaplan,
which have spent $2.357 million on lobbying in the
state.

•	 KANSAS: After his inauguration in 2011, Kansas
Governor Sam Brownback immediately began to
slash core government services and privatize the rest.
In the words of one critic, he used citizens as “crash
test dummies.” Among other things, he outsourced
child support services to YoungWilliams, whose CEO

is a campaign donor. Brownback’s austerity politics
resulted in the state being downgraded by S&P in
August 2014, and have caused a mutiny among fellow
party-members.

•	 MICHIGAN: With Republicans in firm control of
both houses of the legislature, Michigan Governor
Rick Snyder has advanced an extreme privatization
agenda. When private contractor Aramark took over
prison food services in the state, one scandal followed
another: from maggots and food poisoning to sexual
encounters and murder for hire. Bills introduced by
ALEC legislators have resulted in the number of online
K12 Inc. schools skyrocketing, despite the fact that
these schools fail to educate children as well as public
brick-and-mortar schools. But Snyder remains firm in
his support.

•	 OHIO: Governor John Kasich has also pursued an
extreme privatization agenda, using state liquor sales
to create a privatized economic development agency.
Taxpayers are losing out on hundreds of millions in
revenue each year, but the private agency is producing
few jobs. He has also pushed prison privatization, creating Ohio’s first private prison and serving up more
maggots with prison food contractor Aramark. Further
privatization of public schools is also on the menu in
Ohio, where Kasich campaign contributor White Hat
is busy evading open records and accountability and
transforming public money into private assets in a
controversial case before the state’s Supreme Court.

•	 PENNSYLVANIA: Despite a promise to make school
funding a top priority, Governor Tom Corbett cut
education funding by close to $1 billion during his
tenure and expanded charter schools run by private

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companies. In his attempts to uphold a repressive voter
ID law – later declared unconstitutional – he paid millions to outside law firms last year that were also some
of his biggest campaign donors. Other big spenders in
his 2010 campaign were Wal-Mart and local gas station
chain Sheetz, two companies that stand to benefit from
the governor’s planned privatization of liquor stores.

•	 MAINE: Maine Governor Paul LePage has repeatedly
vetoed bills that would expand Medicaid coverage for
low-income Mainers, referring to the expansion as “ruinous.” However, his efforts to prop up his agenda with
research showing the cost-efficiency of privatization
backfired. LePage awarded consultancy firm Alexander Group a $1 million no-bid contract for reports on
Medicaid outsourcing. When one report turned out
to be full of erroneous data and plagiarized passages,
there was no getting the $474,760 already spent back.
LePage also continues to facilitate efforts by Nestlé/Poland Spring water, which has spent more than $100,000
lobbying the legislature in this small state, to pump
precious public water for private gain.

•	 WISCONSIN: Since being elected to office in 2011,
Scott Walker has waged a campaign against most
things public. He has done so by privatizing the state’s
economic development functions, generating grants
for donors but few jobs. According to one report,
Walker donors ended up getting 60 percent of the
funding even though they only made up 30 percent of
the recipients. Privatization behemoth Maximus Inc.,
whose track record in other states has been described
as a “disaster” for families and kids, was awarded a new
$21 million contract for foster care, even after previous
contract failures in the state.

OUTSOURCING AMERICA: FLORIDA
Inmates Die in Droves After Governor Scott
Outsources Prison Healthcare
Suffering from lung cancer? Here’s a Tylenol and some
warm compresses.2 Are your intestines escaping? Not to
worry; here’s some K-Y Jelly to shove them back in.3
Between 2008 and 2013, Corizon Health – the country’s
largest prison health care provider – was sued 660 times
for malpractice.4 But Governor Rick Scott’s administration
failed to take note of this history when it awarded Corizon
a $1.2 billion contract in 2011.
Now an investigation by The Palm Beach Post reveals that
Florida inmates have been dying in droves since the state
privatized prison health care. 5
In January 2014, three months after the privatization was
fully implemented, the number of inmates who died “shot
to a 10-year high,” says the Post. In the past ten years, there
were only ten months in which 30 or more inmates died.
So far this year, the death count has “topped 30 a total of
four times in just seven months.” This is a dramatic increase from 12.5 percent to 57 percent. The investigation
also found that the number of referrals for outside hospital
care is down by 47 percent compared to 2012.
How did this happen? In his 2010 gubernatorial campaign, candidate Scott promised to cut prison funding by
$1 billion. “Privatization isn’t necessary for us to achieve
that goal, but nothing is off the table,” Scott’s spokesperson
Brian Burgess said. 6 True enough, the Florida Corrections
Department soon sent out a request for proposal for prison
health care services. Underbidding the competitors, Corizon argued that it could provide the current quality of care,
but for seven percent less.
As the privatization process moved forward, 1,890 state
employees received a dismissal letter reading, in part, “Due
to the outsourcing of this function, your position will be
deleted.” 7 As far as Corizon was concerned, there were
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Florida Gov. Rick Scott

some snags along the way. But $415,000 spent on lobbying
the state legislature between 2011 and 2013 might have
gone some way toward ironing them out. 8
In December 2012, the contract was blocked by a judge
after three unions – AFSCME, the Federation of Physicians
and Dentists, and the Alliance of Healthcare and Professional Employees – filed a lawsuit. In its ruling, the court
writes that the Corrections Department broke the law
when it approved the transfer of $57.6 million – money
earmarked for salaries to state employees – to Corizon. 9
Six months later, the contract was revived when an appellate court over turned the decision noting: “The LBC
[Legislative Budget Commission] simply moved funds
from different line items within the Department of Health
Service’s Program.” 10
In the midst of the court challenges last year, Governor
Scott struck a no-nonsense pose: “If we can provide a great

service at a better price, the we ought to do that.” 11 But as
David Fathi, director of the ACLU National Prison Project,
pointed out in a prescient warning, sometimes privatization can be lethal:
“Unlike governments, private companies exist first
and foremost to generate profits […] If they say they
can do it more cheaply than government, it’s because
they’re cutting something. When you combine the
profit motive with limited oversight and a uniquely
powerless population, you get bad and sometimes
lethal results.” 12

Scott Pushes Expansion of Cyber Schools
and Online Testing
Virtual classrooms provided by for-profit companies have
always been high on Governor Scott’s agenda. In his 2010
school manifesto “New Education for a New Economy,” the
gubernatorial hopeful envisioned a brave new world where
“the programmatic classroom” was replaced with the “programmatic expansion of virtual schooling.” 13
In June, he signed House Bill 719114 into law. 15 Sponsored
by Sen. Anitere Flores, who is a member of the ALEC Edu-

cation Task Force, and ALEC conference attendee Rep. Kelli
Stargel, 16 the bill echoed ALEC educational priorities and
the needs of ALEC corporate funders such as K12 Inc.
The bill included a massive expansion of virtual schooling:
“at least one of the 10 courses required … must be completed through online learning.” Plus, all end-of-course
tests in Florida will be given online and school districts will
be permitted to issue adjunct teaching certificates to anyone, creating a class of less highly trained and highly paid
teachers for use in cyber schools than in brick and mortar
schools.
The winners were, of course, the virtual school companies.
Today, K12 Inc. boasts that more students are taking online
courses in Florida than in any other state. 17 In 1998, there
were 13 virtual schools; today there are 411.18 But the
victory did not come out of nowhere; it had been long in
the making. In addition to bankrolling Republican candidates,19 and wining and dining Florida politicians at ALEC
policy summits, 20 the biggest virtual school power players
have also spent more than $2.3 million directly lobbying
the legislature, as the Center for Media and Democracy’s
(CMD) chart below illustrates.

For-Profit Education Lobbying in Florida21

Pearson Inc.

2009

2010

2011

2012

2013

2014
(Jan to June)

Sum Total

$140,00

$180,000

$180,000

$137,000

$100,000

$50,000

$787,000

$75,000

$40,000

$65,000

$60,000

$60,000

$60,000

$60,000

$80,000

$25,000

$5,000

$10,000

$80,000

$50,000

$20,000

$25,000

$10,000

$345,000

$60,000

$60,000

$60,000

$30,000

$30,000

$240,000

$70,000

$75,000

$70,000

$70,000

$30,000

$355,000

K12 Inc.
Connections
Academy

$60,000

Calvert Education
Kaplan

$160,000

McGraw-Hill
Academica

$40,000

$180,000
$30,000

$330,000
$120,000

$2,357,000

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Florida is the only state in the nation in which every student must take online classes, and it is hailed as a “model”
by K12 Inc.
Unfortunately, a victory for the virtual school companies
does not translate to a victory for students. While K12 Inc.
touts its “exceptional education,” it received failing grades
from the Florida Department of Education this year. Both
its own schools, and public virtual schools paying to license
the K12 Inc. curriculum, are failing to educate children,
receiving a report card packed with D’s and F’s that would
be unacceptable to any parent.

As for Pearson, the company has spent $787,000 on lobbying the Florida Legislature over the past five years, and
the investment paid off. Not only was Pearson awarded a
lucrative contract to sell courses and technology developed
by the state, but it also administers all state K-12 testing.
In April 2014, the Pearson servers crashed during highstakes testing, throwing students in 26 school districts into
disarray. And it was not the first time Pearson failed to
deliver in Florida; in 2000 it was fined $4 million, and in
2010 a further $14.7 million. But the state has apparently
not learned any lessons regarding the hazards of for-profit
education

State Grades for Florida K12 Inc. Cyber Schools22
School

Provider

Grade 2014

Florida Virtual Academy at Duval

K12 Inc.

C

Florida Virtual Academy at Osceola

K12 Inc.

F

Flroida Virtual Academy at Palm Beach

K12 Inc.

D

Florida Virtual Academy at Pasco

K12 Inc.

D

Florida Virtual Academy at Broward

K12 Inc.

D

Clay Virtual Academy

K12 Inc.

I

OCVS Digital Academy

K12 Inc.

F

Mosaic Digital Academy

K12 Inc.

F

Lake Virtual Instruction Program

District + K12 Inc.

F

Lee County Virtual Instruction Program

District + K12 Inc.

D

Pasco Virtual Instruction Program

District + K12 Inc.

C

Duval Virtual Instruction Program

District + K12 Inc.

F

Lake Virtual Instruction Program

District + K12 Inc.

F

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Scott Pursues a Family Friendly Approach to
Privatization

differ, and in April 2011 his wife bowed to public pressure,
selling her majority share to a private equity firm.

In his 2011 inaugural address, Florida Governor Rick Scott
announced that he would be taking a fresh look at health
care. “Why should we cling to models created in another
century?” 23

The Solantic episode was not the first or last time that the
governor was accused of using his position to advance policies that turned a profit for private firms and investors, including potentially the Scott family itself. Aided by Florida’s
loose state ethics laws, Governor Scott would soon unleash
a sweeping “fresh look” on the management of traditional
nonprofit hospitals.

Since Scott’s gubernatorial campaign was largely self-financed (he paid some $60 million out of pocket), he
understandably preferred a “fresh look” to public scrutiny
of the money he had made in another century as CEO of
Columbia/HCA – the health care behemoth that pleaded
guilty to what was described by the U.S. Department of
Justice as “the largest health care fraud case in history,”
resulting in a $1.7 billion fine.24
As part of his new deal on health care, Scott soon signed
an executive order for mandatory drug tests of all state
employees every three months (with random tests thrown
in for good measure).25 At the same time, a bill enjoying
Scott’s support was introduced in the Senate. It called for
drug screenings of everyone applying for benefits – paid for
by the applicants themselves.26
One of the companies that stood to reap the most benefits
from the new legislation was Solantic, a chain of walk-in
clinics offering drug tests that Scott had co-founded back
in 2001.27 Scott attempted to calm the furor by reassuring
the public that he had transferred his $62 million worth of
Solantic shares to a fund managed by his wife a few days
before he took office. 28 He was no longer “involved in that
company,” Scott claimed.29 The media, however, begged to

In 2013, Scott expanded a five-county Medicaid privatization pilot program launched by his predecessor, Jeb Bush,
into a statewide program. According to current estimates,
the plan will enroll three million residents (most of them
children) by the end of 2014.30
Under the program, the state of Florida pays insurance
companies a set fee, with the provision that they spend 85
percent on patient care and expand the network of eligible
doctors and hospitals. While proponents claim that the
system will dramatically expand access to health care, 31 the
pilot program tells a different story. In 2009, 25 percent of
the participating doctors had dropped out of Jeb Bush’s
pilot program, saying that they were unable to provide
necessary treatment to patients.32
Fourteen insurance companies have signed five-year contracts to implement the state plan,33 with Sunshine Health
(a subsidiary of Centene Corporation) and Staywell (WellCare) getting the biggest slice. Prior to being awarded the
lucrative contracts, the contract winners lobbied heavily in
Florida (and WellCare and Centene ramped up the spending significantly in 2013) as this chart shows.

Healthcare Lobbying In Florida34
2009

2010

2011

2012

2013

2014
(Jan-June)

Sum total

Staywell /
WellCare

$250,000

$300,000

$345,000

$200,000

$280,000

$80,000

$1,455,000

Sunshine /
Centene

$60,000

$60,000

$50,000

$35,000

$245,000

$155,000

$605,000

Prestige

$110,000

$100,000

$80,000

$70,000

$80,000

$40,000

$480,000
$2,540,000

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From January 2011 to October 2014, WellCare shares have
almost doubled,35 while Centene has seen a whopping 224
percent rise36 – both significantly outperforming the Dow
Jones Industrial Average, which roes by 46 percent during
the same period.37 In a May 2014 investment recommendation, Forbes looked at companies capitalizing on “the
trend toward privatizing government managed healthcare,”
recommending Centene as an “acquisition target.”
Ever on the cutting edge, Florida’s First Lady Ann Scott
had invested tens of millions38 of the money her husband
gave her after the Soltanic affair into a blind trust managed
by a private equity company – a company whose portfolio
primarily consists of “consumer-driven healthcare services
and products.”39 Blind trusts are supposed to shield the in-

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vestor from knowledge of the investments and thus prevent
conflicts-of-interest, yet newspaper reports indicate that
the fund is managed by one of Scott’s old business associates.40
How much Scott stands to profit personally by this “fresh
look” at Medicaid – including a private fortune invested in
“healthcare services” – is anyone’s guess and the blind trust,
once approved by the state ethics commission, is now being
challenged in court. One thing seems certain, though:
patients might not receive a fresh look as much as a cursory
glance. In one study of the Florida pilot program, as many
as two-thirds of the doctors stated that their patients did
not receive critical services.41

OUTSOURCING AMERICA: KANSAS
Governor Brownback Outsources Child Support Services to Donor
When he was elected in 2010, Kansas Governor Sam
Brownback began to slash core government services and
privatize the rest. His austerity politics resulted in the state
being downgraded by S&P in August 2014, and his privatization initiatives have also drawn criticism, causing one
leading Republican to state, “I had hoped that it wouldn’t
be as extreme as it’s been … what we didn’t know was that
Sam would use this state as crash test dummies for his own
fiscal experiments.”42
Kids receiving child support payments from absent parents
would be among Brownback’s first crash test dummies.
While Kansas partially outsourced the enforcement of child
support to private corporations and law firms in 1997, the
private players were only awarded around 20 percent of
the contracts; the rest went to public state agencies.43 In
March 2013, however, the Kansas Department of Children
and Families (DCF) announced that all child support services would be outsourced, and a request for proposal was
issued. Not limited to enforcement, the contracts would
include services connected to court petitioning, locating
parents, and establishing paternity, which had never been
in private hands before.44
“Collection is a function that can be carried out more
efficiently and more cost-effectively by private companies,”
DCF secretary Phyllis Gilmore said at a press conference.45
Similar blanket statements, seldom backed by empirical
evidence, are often echoed by privatization proponents,
regardless of which public services they want to outsource.
In this particular case, there is little evidence to support
Gilmore’s sound bite. A 2013 report on the privatization
of child support services commissioned by the Mississippi
Legislature, for example, concluded that “the significant additional cost of privatization would outweigh the potential
additional benefits.”46
Child support is indispensible for hundreds of thousands
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Kansas Gov. Sam Brownback

of vulnerable Kansans, mostly single women and children.
Nationally child support “represents 40 percent of family
income for poor families who receive it, and reduces the
poverty rate for children in these families by nearly 25
percent.”47
In June 2013, DCF announced that four firms had been
awarded contracts.48 The winner among the winners was
YoungWilliams – a nationwide company based in Mississippi – that received two-thirds of the caseloads or 85,000
child support cases, worth some $50 million.49 While
YoungWilliams boasted that it landed the contract because
of its “innovative service delivery structure,”50 there might
be more to it than that.
Rob Wells, CEO of YoungWilliams, met Brownback at a
fundraiser for the gubernatorial hopeful in 2010. He and
his wife went on to donate $2,000 each to Brownback’s
campaign51 – the largest contribution allowed under state
financing laws. But this pales in comparison to the $67,500

retainer he paid for GOP lobbyist Austin Barbour’s services. Through his lobbyist network, Barbour arranged for
a private meeting with Brownback’s chief-of-staff David
Kensinger (currently under FBI investigation for illegal lobbying)52 and some of the governor’s closest aides.
The parties met to discuss child service privatization in
the conference room of what used to be the State Treasurer’s Vault of the Kansas Statehouse,53 far from the public
spotlight.
A few weeks later, the Brownback administration appointed Trisha Thomas from YoungWilliams as director of child
support enforcement after firing her predecessor. It didn’t
take long for the new director to conclude that “privatization was the quickest way to improve Kansas’ child support
enforcement performance numbers.”54
Asked whether there was any research in support of Thomas’ project of wholesale privatization, a DCF spokesperson
said, “No … It was an informal kind of pitch, I guess; research done, based on her … experience in other markets.”
It is too early yet to say what YoungWilliams will do with
Kansas child support enforcement, but if history is any
guide, outsourcing vital public services for vulnerable populations to companies that must turn a profit frequently
leads to higher costs to taxpayers and worse services for the
public.
Between 1995 and 2000, privatization behemoth Maximus
was in charge of child support enforcement in two Tennessee counties. A report concluded that the company “spent
more but collected less money for overdue child support
payments in [these] counties, on average, than DHS did in
the rest of the state.” Sen. Hob Bryan (D-MS) characterized a similar situation simply as “a disaster” for Mississippi
families and their kids.55

state would incur around $200 million in extra costs, which
would “threaten funding for all other state priorities.”56
There is no secret as to where the sympathies of powerful
HMOs and the Kansas health care industry lay; despite the
tight contribution limits in the state,57 PACs and individuals affiliated with the health care industry contributed
$344,75958 to his campaign, giving less than a tenth of that,
or $32,509,59 to his Democratic opponent Tom Holland.
In March 2011, he commissioned his lieutenant governor,
plastic surgeon Jeff Colyer, to “remake” the Kansas Medicaid system.60 Colyer was asked to wield his scalpel and
slash Medicaid funding by up to $400 million. By selling
out Medicaid, Brownback hoped to save $1 billion over
five years and pave the way for other governors to do the
same. At the same time, he gave away $1.1 billion in tax
cuts aimed primarily at big businesses and the rich, a move
that the even The Wall Street Journal recently criticized as a
“warning” for other governors rather than a “beacon.”61
While officials claimed that “all options were on the table”
in fact privatization was the primary means of coping with
the cuts. When Brownback rolled out “KanCare” in November 2011, the wholesale privatization of Medicaid services was underway. The health care of 360,000 low-income
Kansans would be “managed” by three for-profit companies. Kansas issued a Request for Proposal (RFP), and a
dozen companies soon expressed interest in the contracts
worth some $2.8 billion.62
Advocates for the developmentally disabled argued that
for-profit insurance companies lack experience in providing long-term support, and wanted to opt out.63 Senior
support groups shared the concern. At a public meeting,
a woman said matter-of-factly that she didn’t see why the
managed care companies wouldn’t want to “screw everyone.”64

Brownback Slashes Medicaid for the Poor to
Finance Tax Cuts for the Rich

Most Kansans shared her concern. In an informal poll
conducted by The Wichita Eagle, 61 percent of the readers
agreed that “private companies will put profits first, and
that means that care will suffer.”65

In his gubernatorial campaign, Sam Brownback had been
dismissive of the Affordable Care Act and its provisions to
expand Medicaid to cover more Kansans, claiming that the

In June 2012, it was announced that Amerigroup, United
HealthCare, and Sunflower State Health Plan (a subsidiary

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of Centene) – all out-of-state Fortune 500 companies – had
been awarded the lucrative contracts.66 When KanCare
went live in January 2013, Finn Bullers, a former reporter
for The Kansas City Star, illustrated the painful costs with
the following letter to the newspaper:
High fives all around for $1 billion in taxpayer savings, the media reports. Meanwhile, I, and I suspect
other Kansas Medicare/Medicaid recipients in my
situation, have fallen through the cracks. As of midnight Dec. 31, I was dropped from my healthcare
service and have no one to provide my basic care
needs — bathing, dressing, toileting and eating. As a
person with muscular dystrophy, type-1 diabetes and
is dependent on a ventilator to breathe — 24-hour
nursing, as provided under the Affordable Care Act, is
critical.67
Corroborating Buller’s account, Kansas Insurance Commissioner Sandy Praeger admitted to the New York Times
that many of “the poorest of the poor” would “fall into a
gap in which no assistance is available.”68 The only way for
the three companies to post a profit big enough to please
the shareholders has been to cut services significantly,
especially for people with physical disabilities69 and those
requiring around-the-clock care, such as Buller.70

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While victims of the cuts like Finn Buller said they needed
the assistance to eat and even breathe, Angela de Rocha
with the Kansas Department of Aging and Disability Services had a different perspective, and offered up a bizarre
analogy in an interview with The Pitch.
“It is, she said, as if she had been dishing out cars to
people every year and then suddenly stopped. “Your
natural response to that is going to be, ‘Why is she
being so mean to me’ … That’s just human nature
… People get used to it. They think that’s what you
need.”71
As if the privatization of Medicaid to finance unprecedented tax cuts was not enough, some of Brownback’s closest
confidants are currently under FBI investigation. In the
revolving-door politics of Kansas, senior staff members
move seamlessly between politics and corporate lobbying.
What the federal investigators are keen to know is whether
the Brownback administration has applied illegal pressure
to land lucrative lobbying contracts for former aides.
Is it a mere coincidence that three of his closest confidants,
including former chief of staff David Kensinger, are registered lobbyists for United HealthCare and Sunflower – two
of the firms awarded the KanCare contracts?72 Brownback
says yes, and denies any wrongdoing. The allegations are,
he argues, all part of a smear campaign by his political
opponents.73

OUTSOURCING AMERICA: MICHIGAN
Governor Snyder Stands Behind Prison Privatization, Even After Murder for Hire and
Maggots on the Plate
Ideological slogans often trump facts when it comes to the
outsourcing of public services. When independent studies
are commissioned, the conclusions are often disregarded.
In some cases, however, there seems to be solid research
supporting the cost-efficiency of privatization. Such was
the case in Michigan – at least at first glance.
In April 2013, Simon Hakim and Erwin Blackstone – two
Temple University professors – published a paper based on
their study, “Cost Analysis of Public and Contractor-Operated Prisons.”74 The results were staggering. Not only
would private (or “contractor operated”) prisons generate
savings of up to 58 percent, but they would also help alleviate overcrowding “without sacrificing the quality of the
services.”75
In their fervor to spread the gospel, the authors also
churned out op-eds for Michigan newspapers, such as the
Detroit Free Press,76 calling for prison privatization.77
The fact that Michigan was targeted was no coincidence,
since the privatization of state prisons has been on the
agenda for some years. In 2012, for example, Sen. Jon Bumstead (R) introduced House Bill 5174,78 which would have
re-opened the North Lake Correctional Facility – a youth
prison that was previously owned by the private GEO
Group, but was forced to close due to high operating costs
and widespread abuse of prisoners.79 The following year,
GEO spent $134,200 on lobbying the legislature in hopes
of a new contract.80
When Bumstead’s bill died in the House, the prison privatization proponents regrouped and rolled out a different
strategy. If the time was not ready for wholesale outsourcing, perhaps custodial and food services could be privatized?

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Michigan Gov. Rick Snyder

In May 2013, the Snyder administration announced that
Philadelphia-based Aramark Corporation would take over
food services in the state prisons. This was a 180-degree
turn, as the administration had previously rejected all bids
it had received to its RFP, including the Aramark one, on
the grounds that none of the proposals would save the state
money.81
But perhaps the $570,000 Aramark spent on lobbying in
the years leading up to the decision,82 or the research touting prison privatization as a panacea, had something to do
with it. In any case, officials with the state Department of
Corrections shrugged the earlier decision off as a mistake.
Comparisons between private and public sector costs, they
said, were not “apples to apples.”
Around 370 good paying state jobs were at risk, the newspapers reported, when Aramark took over food services.
Job loss was not the only risk. In 2009, the poor quality
food and the meager portion sizes Aramark served at the

Northpoint Training Center in Burgin, Kentucky, caused a
riot. “It’s over the food,” a corrections officer told the committee investigating the incident. “The food was slop.”83
With the CEO of Aramark, Eric J. Foss, making $18 million
a year,84 there have to be savings somewhere.
The warning signs from Aramark’s track record were there,
but the Snyder administration paid little attention. Aramark took over food services in December 2013.
After seven months, the company has amassed an impressive rap sheet: In June 2014, 30 prisoners came down with
severe food poisoning as maggots and larvae were discovered in the food.85 74 workers86 were banned for offenses
ranging from having sex with inmates87 to smuggling
contraband.
The state fined Aramark $98,00088 in March for food
shortages, “unauthorized menu substitutions,” and sexual
relations between kitchen workers and inmates, and another $200,00089 in August after problems persisted.
All the while, the Snyder administration has stood behind
the company and the state prison director quietly waived
the $98,000 fine soon after it was imposed. Perhaps Snyder
will reconsider this position given shocking new allegations
that an Aramark worker has asked a prisoner to assist him
with a murder-for-hire plot.90
“Obviously it hasn’t gone as smoothly as we want … I trust
that it’s going to get better,” said Rep. Joe Haveman (R).91
After all, independent research supports the idea that prison privatization will lead to significant savings, at least in
the long run, right?
Not so fast. Doubting the rosy figures in Hakim and Blackstone’s report, Alex Friedmann, an ex-inmate turned activist, demanded to know where the funding came from.92 It
turned out that they had received a grant from “the private
corrections industry.” “It’s kind of like the tobacco industry funding the Tobacco Institute, which says smoking is
just fine for you,” Friedmann said.93
In fact, Corrections Corporation of America and the GEO
Group – two for-profit corporations motivated to advance

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prison privatization in the state and across the country
– funded the research. It seems that the 2013 Michigan
campaign took a two-pronged approach: By encouraging respected academics to write op-eds, and spending
$134,000 on lobbying in the state, GEO hoped to get a new
slice of the market.
It is unlikely that we will see more Michigan prisons in
private hands soon, but the lobbying has worked wonders.
Officials and lawmakers, educated by $570,000 from Aramark, turned a blind eye to the company’s abysmal track
record. They even discounted the company’s own savings
projections of less than 10 percent – not as being exaggerated, but as being too conservative. Instead, they argued
that the state would save 20 percent or about $16 million,94
with little evidence to back up their claims.

With ALEC Air Cover, Failing Cyber Schools
Are on the March
Even though national data95 shows that large cyber schools
are failing to educate children in almost every state, they
are expanding with the help of the usual suspects in Michigan: ALEC politicians and private for-profit education
companies.
In 2009, Sen. Wayne Kuipers introduced a bill to amend
the Michigan public school code.96 A longtime ALEC
member, Kuipers had previously used taxpayers’ money
to pay his membership dues.97 And now he was intent on
pushing the ALEC school agenda in one fell swoop. The
bill would allow the state to impose a sort of martial law
on “failing” public schools by suspending seniority systems
and union work rules, or by outsourcing management to
private school management companies and converting the
school to a charter.98 In the end, a diluted version of the
bill – introducing performance-based pay for teachers, and
allowing for 10 “failed” schools to be converted – passed in
the House and Senate and was signed into law by Governor
Jennifer Granholm. The final bill also mandated the creation of two virtual charter schools, also known as cybers.
Cyber charter schools are a multi-billion dollar industry in
the United States.99 While the schools themselves often (as
in the case of Michigan) are structured as nonprofits and

receive public funding, private corporations such as K12
Inc. license the educational software and curricula.
The public school districts pay the cyber schools only a
fraction less per pupil than they do for children in brickand-mortar schools, despite the fact that there are far fewer
teachers and no physical school building. Add to this the
fact that cybers pocket the money even when children drop
out, which happens with alarming frequency,100 and it is
no wonder that this is a lucrative market.
As far as the virtual charter school operators were concerned, the two-school cap was woefully inadequate. To
expand its presence and increase revenues, K12 Inc. spent
close to $180,000 between 2009 and 2013 in lobbying the
legislature to enact laws that would lift the cap. Charter
school operator Leona Group spent $110,150 lobbing
during the same period, while the statewide lobby group
Michigan Council of Charter School Authorizers spent
$140,000 to open up the market.101
It soon became apparent that the two virtual schools created after the 2009 bill and operated by K12 Inc. were failing
the “at risk” student population they were meant to serve.
An attempt by Michigan Virtual Charter Academy to cherry-pick students for the state exam by telling 20 percent
of them not to attend backfired,102 and the school did not
meet Adequate Yearly Progress in 2010–2011. In 2013, only
one in four of the students in grade three to eight were proficient in reading.103 At Great Lakes Virtual, the math and
reading scores were even lower.104
Data, however, have never been a deterrent for card-carrying ALEC lawmakers. Neither has the fact that at-risk
students might need more time with the teacher rather
than less.

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In April 2011, Governor Snyder called for the lifting of the
cap on cyber schools in a special education address. In September 2011, Patrick Colbeck (R) introduced Senate Bill
619, designed to remove the cap on cyber schools entirely.105 A couple of months earlier, Colbeck had extolled the
virtues of corporate influence in state politics. At a meeting
with the Koch-founded group Americans for Prosperity, he
recounted how some Michigan lawmakers had wavered in
their support for union-busting Right to Work legislation
(which was cribbed word-for-word from an ALEC “model”
bill).106 Fortunately, however, Amway billionaire Dick DeVos, who has used his fortune to bankroll a radical school
privatization agenda, stepped in and provided “air cover …
[and] financial contributions,”107 said Colbeck, and the bill
passed.
The charter school bill, on the other hand, proved too radical even for some of his fellow party members. Despite the
fact that Republicans control the legislature (with a two-toone ratio in the senate), Colbeck did not succeed in lifting
the cap entirely. But the version of the bill that passed did
provide for a massive increase in the number of virtual cyber schools: from two schools to 15 to 30 schools enrolling
two percent of the state’s public school students.108
In written testimony opposing Senate Bill 619, the president of the Michigan Teachers’ Union pointed out
something odd. Independent research seems to have no
influence whatsoever when it comes to virtual school legislation:
“Those making policy should be clear on this key
point: there exists no evidence from research that
full-time virtual schooling at the K-12 level is an
adequate replacement for traditional face-to-face
teaching and learning. Yet to date, this lack of support appears to have exerted little or no influence on
the proliferation of virtual K-12 schools.”109

OUTSOURCING AMERICA: OHIO
Governor Kasich’s Privatized Jobs Agency
Fails to Generate Jobs
In February 2011, Governor John Kasich signed a bill to
create JobsOhio, a private economic development agency
that was meant to replace Ohio’s Development Services
Agency.110 JobsOhio would “work at the speed of business,”
making Ohio “flexible” and “competitive” in economic
development.
At the time, seven states had outsourced their economic development efforts to some form of private agency, drawing
criticism for frequent problems with lack of transparency,
misuse of taxpayer funds, and conflicts of interest between
businesses, politicians, and the new development organizations.111 But in a unique twist, Ohio’s new organization
would have its own revenue source: liquor sales.
As Kasich put it, “Over the years people drink more. It’s just
a natural revenue stream.”112
By January 2012, Kasich arranged a deal through which all
liquor taxes collected by the state’s monopoly liquor agency
would be funneled to JobsOhio for the next 25 years. In
return, JobsOhio would pay the state a lump sum of $1.4
billion, funded by bonds. $750 million was to pay off state
bonds, $150 million would fund environmental revitalization projects, and the remaining $500 million would be
added to the state’s general fund. At the time, JobsOhio was
expected to net about $100 million in operating revenue
each year, which would be spent on economic development
activities.113
Even then, Democrats, public policy groups, and even
one Republican legislator raised concerns about the state
being underpaid for the lease. Liquor revenues amounted
to $228 million in 2010.114 A 2011 report by the Center for
Community Solutions, an Ohio public policy think tank,
calculated that JobsOhio’s net profit on liquor would total
$9.5 billion to $12.7 billion over 25 years, far more than it
paid for the lease.115
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Ohio Gov. John Kasich

In February 2013, JobsOhio and the JobsOhio Beverage
system purchased from the state a 25-year exclusive franchise for the sale of liquor, taking over the state’s public
liquor operation. JobsOhio paid the state $1.42 billion,
which it generated by selling $1.51 billion in bonds backed
by the liquor lease.116 According to JobsOhio’s 2013 annual
report, gross revenues were $447 million just for the first
half of 2013. Plus, with liquor sales increasing around six
percent per year, money will continue to stream in.
Hopefully, time will tell if this complicated privatization
deal and the loss of the increasing stream of liquor revenue
is worth it to the Ohio taxpayer. But given the fact that
JobsOhio was designed to be exempt from open records
requirements, the cost-benefit analysis might be hard to
achieve.

JobsOhio Exempted from Open Records,
Open Meetings Laws
When Kasich first announced his plan to create a new jobs
organization, he gave assurances that transparency was
“really important.”117 But when it was created in 2011, JobsOhio was exempt from Ohio open meetings and public records laws,118, 119 especially troubling given that it is largely
supported by taxes that had previously provided public
revenues. Legislation was passed in May 2012 in an effort
to include JobsOhio in Ohio’s open records laws,120 but
the state Supreme Court later dismissed a public records
lawsuit by finding that the organization was “specifically
exempted” from public records requirements.121
In March 2013, state auditor David Yost, a Republican,
issued a subpoena for the agency’s financial records after
questions were raised about $5.3 million in grants that had
not been disclosed.122 In response, the Republican-controlled state legislature fast-tracked legislation declaring
JobOhio’s liquor tax revenue to be private money not
subject to a state audit,123 which Kasich signed on June 5,
2013.124 Yost was eventually able to subpoena some records, issuing an audit report in November 2013 that found
JobsOhio had “failed to document thousands of dollars in
expenses and neglected for months to have executives and
board members sign conflict of interest policies,” according
to the Cincinnati Enquirer. The report also found that some
$14 million had been spent on expenses like meals and
personal charges on credit cards.125 Yost noted that it was
unclear whether the findings of future audits would even
be available to the public.126
JobsOhio’s lack of transparency means that it is not clear
what JobsOhio is spending its funds on and who is benefiting from the private corporation’s grants, loans and other
economic incentives.127 The highest-profile deals, such as
those with Diebold and American Greetings, have been
comprised mainly of tax incentives provided by the state
and local governments, raising questions about where JobsOhio’s millions in annual revenues are going.128
Some, however, has clearly been earmarked for staff salaries. Even though JobsOhio is a non-profit, seven of its
top staff members earned six-figure incomes in 2013, with
executive director John Minor pulling in $231,217 in total

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compensation.129 For comparison, Ohio’s median household income in 2012 was $48,246, according to the U.S.
Census Bureau.130
And Kasich campaign contributors haven’t been left
behind. JobsOhio has spent hundreds of thousands on
consulting fees with Deloitte and Touche,131 which gave
Kasich’s campaign $20,000 in 2010.132

Nearly Half of Companies Fail to Reach
Jobs Goals
Supporters of JobsOhio have defended its opacity, arguing
that business deals need to be kept under wraps to be competitive.133 But JobsOhio’s record on actually creating new
jobs is in doubt.
In its first year, 2011, JobsOhio arranged more than $240
million in incentives for just a few companies, with most
of the grants, loans, and tax credits directed toward retaining existing companies or poaching businesses from other
states, rather than developing new jobs.134 For example,
pharmacy service provider Omnicare was given $8 million
in incentives to move to Ohio -- of questionable benefit to
the regional economy, given that it was previously based
just across the border in Covington, Kentucky. As one Covington city commissioner put it, “They have not created
any jobs with this move. They’ve just redistributed jobs
from Point A to Point B.”135
Kasich and JobsOhio touted “successes” like these at the
agency’s board meeting in 2012,136 but many of the deals
eventually fell through, making headlines in state papers.
It is difficult to determine how successful JobsOhio has
been at creating jobs, in part because its own annual reports use vague language and unusual metrics to describe
its activities. In particular, it touts job “commitments”
by businesses receiving incentives as its key performance
metric, rather than actual jobs created. JobsOhio reported 21,099 new jobs “committed” in 2011 and 20,979 in
2012.137
But as later audits showed, nearly half of companies failed
to follow through on those commitments. When Ohio Attorney General Mike DeWine finally issued an audit report

on the agency in 2011, only 52 percent of companies that
had received incentives met their job creation, job retention, and other goals.138 Compliance was scarcely better in
2012 (63.5 percent)139 or 2013 (54.9 percent).140

Conflicts of Interest and Sweetheart Deals
JobsOhio is exempt from most state ethics rules.141 At first
blush, the incentives package received by Bob Evans Farms
in 2011 sounds like just another case of big subsidies paid
to maintain the status quo: $11 million in benefits for moving its headquarters from south Columbus down the street
to New Albany.
But it turns out that Bob Evans CEO Steven Davis, whose
estimated compensation for 2014 is $3.1 million,142 was
also appointed to the board of JobsOhio. Davis serves
alongside former Ohio State University president E. Gordon Gee on both boards, and Gee has received compensation worth hundreds of thousands from Bob Evans as a
director.143
Davis and Gee aren’t the only JobsOhio officials with potential conflicts of interest. An investigation in 2013 by the
Dayton Daily News revealed that six of the nine JobsOhio
board members had potential conflicts of interest with
companies that had received economic incentives.
James Boland does double duty on the boards of JobsOhio and Sherwin-Williams, which has rewarded him with
several million in director fees and stock. The paint company received a $5.8 million tax credit with JobsOhio’s help.
Marathon Petroleum, whose CEO is also a JobsOhio board
member, got $78 million in tax credits in 2011.
Not to mention the potential conflicts of interest when tax
credits were given to companies in which board members
and top officials had investments, including IAC Wauseon,
IBM, Johnson Controls, and Ford. An investigation by the
Ohio Ethics Commission in 2013 found that a third of top
JobsOhio officials had such potential conflicts.144
Massive tax credits with little accountability, sweetheart
deals, and almost total protection from public scrutiny. Is
that what Kasich meant by “working at the speed of business”?

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White Hat’s Magic Trick: Transforming Public Schools into Private Assets
There’s a lot of money at stake in Ohio charter schools,
which as a group will receive almost $900 million in 2014.
Charters get about $7,200 per student in taxpayer funding,
compared to about $3,500 per student in traditional public
schools.145
On paper, Ohio’s charter schools are operated by non-profit organizations whose governing boards hire management
companies to operate the schools. The boards are supposed
to have a strong oversight role and have the power to fire
charter operators if they don’t measure up.
It’s a particularly important role, given how poorly many
charter schools perform. Since Ohio’s experiment in school
privatization began, around 29 percent of the charter
schools opened in the state have been closed,146 and
according to Ohio Department of Education board member Mike Collins, the state has spent over $1.4 billion just
since 2005 on charters that never scored above a D on their
annual report cards.147
Oversight is impossible without transparency. But when
the governing boards at ten Ohio charters run by White
Hat Management tried to find out how the company was
spending its budget, the company simply refused to provide detailed records, claiming that information about how
it was spending taxpayer money was proprietary.
The years-long struggle, which will culminate in a hearing
before the Ohio State Supreme Court in September 2014,
relates to two questions at the heart of the school privatization controversy: When do public funds become private
assets? And how much transparency do private companies
owe when they provide public services on the public’s
dime?

Oversight by a Hand-Picked Board
Ohio’s charter schools, which are publicly funded, are
supposed to be subject to periodic state audits and held to
performance standards by the sponsoring organizations
that contract with operators.148

But governing boards may not be as independent as they
ought to be, as a 2014 investigation by the Akron Beacon
Journal found. White Hat shares legal representation with
the boards of many of the charter schools it has contracts
with.149 And a number of board members have admitted
that they were recruited by White Hat, a clear conflict of
interest.
In a revealing statement, Maggie Ford, chief academic
officer at White Hat, told the Beacon Journal, “Sometimes
we have one or two people that would like to start a school,
and they don’t have enough for an entire board. So they
want to, they talk to, other board members or ask us to
help recruit board, um, recommend board members.”150
In effect, the boards at many “nonprofit” charter schools
were hand-picked by White Hat, which contracted with
those same boards to operate the schools.
But the problems really started when board members at
Hope Academies and Life Skills Centers started to examine
White Hat’s operations. By 2010, board members at ten
schools in Cleveland and Akron were concerned about
whether resources were being used effectively at their
schools, but the company had provided little information
about its spending even to the boards of its schools.151
As board member Lillie Blair explained to the Cleveland
Plain Dealer, “The public says, ‘You’re responsible for the
money we gave you – what did you do with it?’ And I as a
board member have to say I don’t know.”152
The boards had essentially agreed to pass over 95 percent
of the schools’ budgets to White Hat, which then had sole
responsibility for everything from hiring teachers to buying
school supplies. In 2010, after White Hat refused to provide any additional details about its budgets, the ten school
boards sued.153
The lawsuit, Hope Academy Broadway Campus et al. v.
White Hat Management, LLC et al., claims that White Hat
didn’t meet its contractual obligations because it didn’t
provide quarterly un-audited financial disclosures, it didn’t
adequately track how various grants were spent, and it
“failed to promote the academic success of each school’s
students.”154

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When the boards that hired White Hat to manage their
schools began demanding financial transparency, White
Hat pushed back, insisting that it wasn’t required to
provide full quarterly financial reports.155 When the Ohio
House held a hearing about the complaints against White
Hat in 2010, the company refused to testify.156
When the boards made moves not to renew their contracts,
White Hat made the startling claim that it owned all assets
purchased under its management, despite the fact that they
were paid for with taxpayer money.157
In most business relationships, that might be enough simply to choose not to renew a contract. But when it comes to
Ohio charter schools, the boards’ power to terminate charter school contracts is limited by Ohio law, which allows
operators to appeal contract decisions to school sponsors
or the state board of education. The appeal could result in
the board -- not the operator -- being removed.158
White Hat may even be entitled to keep all assets purchased
during the contract, from desks to textbooks to the school
buildings -- even if they were bought using taxpayer funding.159 As the lawsuit states, “if the school terminates the
Management Agreement, it must buy all personal property [...] and must exercise the Schools option to lease the
School Facility.”160 In other words, taxpayers could end up
paying twice for the same school facilities and equipment.
White Hat’s grip on the school’s property -- from buildings
to the trademarked school names -- made it impossible for
the charter schools to simply hire a new operator. Like witnesses in an organized crime trial, the charter schools had
to change their names and find new locations. They even
had trouble recruiting staff, who were afraid of losing their
jobs for even speaking to the “new” schools.161
This sleight of hand, which transforms public money into
private assets for charter operators, comes from a statute
created by H.B. 79, a charter school overhaul bill introduced by State Rep. Thomas Raga and passed in 2007.162
Raga has served on the advisory board of the right-wing
Heartland Institute163 and paid membership dues to ALEC
in numerous years.164

The suit asks the court to declare the statute unconstitutional, arguing that it gives operators like White Hat too
much control over charter schools.165

Spending Money to Make Money
Ohio Governor John Kasich received direct contributions
totaling $45,580 from White Hat CEO Brennan and his
wife, Ann, in 2010.166
State campaign finance records show that Rep. Raga also
took substantial contributions from charter school interests from 2002-2006, including $22,500 from Brennan,167 a
$17,500 from Brennan’s Main Street PAC,168 and $10,000
from All Children Matter,169 a Michigan-based charter
school PAC founded by the DeVos family. The DeVos
family (Betsy and Dick DeVos, inheritors of the Amway
fortune) are major funders of right-wing organizations,
and privatizing education has long been one of their pet
causes.170
Both Main Street PAC and All Children Matter were later
found to have been involved in schemes to help donors
evade campaign finance limits in Ohio, and All Children
Matter even changed its name after the scandal, returning
as the “American Federation for Children.”171 In 2006 and
2007, Brennan funneled around $30,000 above contribution limits to candidates through his Main Street and
Go-Go PACs, and another $200,000 through All Children
Matter in 2006. All Children Matter was fined $5.2 million
in 2008 for violating Ohio campaign finance laws, while
four of the recipients of Main Street’s cash made a deal
with the Ohio Secretary of State to return the money.172

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White Hat’s lobbyists have worked closely with legislators who support the company’s agenda, even providing
a “four-page legislative wish list” to House Speaker Bill
Batchelder to help his office prepare for a phone call with
lobbyists.173 Batchelder, who is an ALEC member174 and a
major proponent of privatization through charter schools
and voucher programs, received direct contributions totaling $67,000 from Brennan between 2006 and 2013.175
All told, Brennan has reported a stunning $3.6 million in
contributions to Ohio races since 1992.176
But White Hat schools are failing to educate Ohio kids. A
2010 report by the National Education Policy Center at
the University of Colorado-Boulder found that only two
percent of White Hat’s schools nationwide were meeting
Adequate Yearly Progress (AYP) measures.177 Despite this
abysmal record, and despite a 2007 state audit that found
White Hat’s business practices to be “abusive,” the company
continues to operate some 30 charter schools in Ohio.178
Ohio House Speaker Bill Batchelder, a White Hat defender, claims on his 2014 campaign website, “School districts
must be held accountable for how they allocate their money.”179 It remains to be seen whether White Hat will be held
to that standard.
The Ohio Supreme Court heard the White Hat case on
September 23. Justices explored the question -- if a private
body is doing a public job using public money, aren’t they
functionally equivalent? That is indeed the heart of the
matter and a ruling is anticipated later this year.

OUTSOURCING AMERICA: PENNSYLVANIA
Governor Corbett Pushes to Privatize Liquor
Sales Benefiting Campaign Donors
Pennsylvania is one of 18 alcoholic beverage control states.
Wine and distilled spirits are sold by the state-owned Wine
and Spirits shops and regulated by the Pennsylvania Liquor
Control Board (PLCB). Through the local sales tax and the
state liquor tax, the PLCB annually returns more than half
a billion to the Pennsylvania treasury – money that funds
both community programs and government services.180
In 2012, with the backing of Governor Tom Corbett, Republican House Majority Leader Mike Turzai (a long-term
ALEC stalwart) announced a sweeping plan to privatize
the state liquor system by auctioning off the current liquor
stores and issuing 1,600 new liquor store licenses.
A year later, Bill 790181 passed the House of Representatives in a vote that largely followed party lines, and it was
moved to the Senate’s Law and Justice Committee, chaired
by Republican Sen. Chuck McIlhinney. The committee
held a hearing in April 2013 in which representatives from
professional organizations and community groups182 all
spoke out in opposition to the bill. Law enforcement officers argued that it provided no extra police funding for the
likely rise in alcohol-related emergency calls, and Mothers
Against Drunk Driving as well as high school students
warned that privatization would lead to more alcoholism
and domestic violence.183
Following the hearing, Sen. McIlhinney went on record
saying that he would not support the House bill. This
setback proved temporary, however, and it was not long
before a new push toward wholesale privatization was
launched (in a 2012 radio interview, Gov. Corbett made
clear that he would accept no compromises).184 It now
seems likely that a privatization bill – but perhaps not the
no-holds-barred version Turzai and Corbett argued for –
will win the state Senate’s approval later this year.185

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Pennsylvania Gov. Tom Corbett

The list of organizations opposing the privatization bills in
Pennsylvania is as diverse as it is impressive.186 From the
Pennsylvania Fraternal Order of the Police and the International Association of Fire Fighters to the local NAACP
chapter and the Black Clergy of Philadelphia and Vicinity,
all are worried that the erosion of liquor store profits that
have funded dozens of community programs and government services, as well as the increased violence and youth
deaths that follow in the wake of increased alcohol availability.187, 188
Money talks, however. It turns out that many of the companies189 that stand to benefit most from the privatization
of liquor sales are major donors to Corbett. Wal-Mart
contributed $33,500, its twelfth biggest donation to any
single candidate ever.190 Sunoco, a Fortune 100 gasoline distribution company that owns gas stations and convenience
stores all over Pennsylvania, donated $111,750191 to the

campaign. Another Pennsylvania gas station/convenience
store chain, Sheetz, which is actively “supporting Gov. Tom
Corbett’s liquor privatization,”192 contributed $120,350.
In addition to this, Robert F. Weis, who chairs the board of
the supermarket chain Weis Markets, which for years has
pushed for the sale of beer in its stores,193 spent $13,750194
out of his own pocket.

services … for the benefit of the public.”195 In addition to
the 498 attorneys employed by the state, the handling of
legal business is frequently outsourced to outside counsel.
Last year, the total bill for private law firms – footed by the
taxpayers – amounted to a whopping $32.7 million in 2013
and $100 million over three years, according to the Pittsburgh Tribune-Review.196

In total, these companies donated $279,350 directly to Gov.
Corbett.

Outside counsel, it has been pointed out, is an insider’s
game.197 A comparison between the firms used as outside counsel last year and their contributions to Corbett’s
gubernatorial campaign of 2010 makes for interesting
reading.

Corbett Outsources Legal Counsel to Campaign Contributors
Pennsylvania’s Office of General Counsel “serves as the
Governor’s in-house legal counsel,” providing the executive
branch with “expert, responsive and cost-effective legal

Biggest State Legal Contracts and Corbett Campaign Contributions198
Law Firm

Corbett paid for outside
counsel in 2013

Contributions to
Corbett 2004-2014

Pepper Hamilton LLP

$2,427,030

$39,350

DLA Piper

$2,135,307

$5,000

Swartz Campbell LLC

$1,922,177

$34,000

Rawle & Henderson

$1,603,974

Dickey, McCamey & Chilcote

$1,517,829

$8,500

Cozen O'Connor PC

$1,434,011

$114,390

McKenna Long & Aldridge

$1,321,737

Chartwell Law Offices LLP

$1,275,539

$39,500

Blank Rome LLP

$1,171,517

$254,207

Duane Morris LLP

$1,060,319

$384,550

Drinker Biddle & Reath LLP

$942,790

$46,461
$494,947

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Center for Media and Democracy || October 2014

While the Corbett administration claims that the overall
cost for outside counsel has decreased, it is important to
look at the selection process and what kinds of cases are
being outsourced. The official webpage assures us that the
outside firms provide services “of the very highest caliber,”199 and yet it seems that quality is not the only criterion used when considering candidates.
The biggest campaign donor, Duane Morris LLC, received
ample rewards. Several employees were picked for Corbett’s
transition team,200 while others were appointed state commission members and state judges.201
In another instance, Corbett fought for two years to uphold
the “voter ID” law modeled on an ALEC bill that required
everyone to present a state ID before voting. The photo
requirements specified by the bill (ostensibly to prevent
fraud, although Corbett was hard pressed to point to a
single case of it)202 were among the most draconian in the
country.203 According to NAACP estimates, the law would
have disenfranchised “tens of thousands if not hundreds of
thousands of Pennsylvanians.”204 One of the plaintiffs was
95-year old Viviette Applewhite,205 who marched with Dr.
King in the 1960s but would have been unable to obtain the
identification required by the law.

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Corbett’s hard-fought battle to limit democracy proved
costly. When the in-house lawyers could not handle the
workload, Corbett decided to fill the coffers of corporate
contractor Drinker Biddle & Reath by $942,790. Their
campaign contributions amounting to $46,461 turned out
to be a good investment.206 In the end, in May 2014, the
law was finally struck down and declared unconstitutional
by the Pennsylvania Commonwealth Court.207
But a million down the drain to implement voter ID is
peanuts compared to the $3.4 million Gov. Corbett paid
consultants from DLA Piper and Blank Rome (two firms
that had incidentally donated to his attorney general and
gubernatorial campaigns) to help him hand over control
of the state lottery, which generates money for programs
for senior citizens, to British behemoth Camelot in what
Democratic Whip Mark Hanna described as “a corporate
giveaway … while the Pennsylvania seniors are left with
less money to help them pay for their prescription drugs,
transportation, property taxes and rent.”208
Challenged by lawmakers, unions, and watchdogs, Corbett
was finally forced to abandon the plans to sell the lottery in
2013,209 while the attorneys at DLA Piper and Blank Rome
cried all the way to the bank.

OUTSOURCING AMERICA: MAINE
Governor LePage’s Outsourcing Experts Plagiarize Report
In November 2013, Maine governor Paul LePage announced that the state had signed a highly unusual no-bid
$925,200 million contract with a private consultancy firm.
The Rhode Island-based Alexander Group was commissioned to evaluate Maine’s welfare system, and in particular
the expansion of Medicaid mandated by the Affordable
Health Act.210 Founded by Gary Alexander, former Secretary of Public Welfare211 in Pennsylvania, the firm was
ideologically aligned with LePage’s own pro-privatization
views.212
Alexander’s firm was awarded the contract for a five-installment evaluation of the state welfare program, beginning with a feasibility study on Medicaid expansion.
Signed and sealed in September, the deal was not publicly
announced until two months later.213
At a press conference in November, Maine Department of
Health and Services commissioner Mary Mayhew expressed her excitement “about the opportunity to work
with such a knowledgeable group of experts.”214
Democrats did not share her enthusiasm, and warned
about Alexander’s record of “mismanagement and failed
policies.”215 They also charged that LePage was not interested in a non-partisan report but in a foregone conclusion.
“The philosophy of the consultants, I believe, is merely
an effort on the part of the administration to bolster their
own philosophy about the human service budget in the
State of Maine,” said Rep. Richard Farnsworth.216
The first Alexander report did indeed echo LePage’s sentiments. In common with other governors intent on an extreme privatization agenda, LePage had previously rejected
federal money for the expansion of Medicaid coverage for
the poor in the state. In his 2013 Medicaid veto letter, the
governor argued that it “is not the time to push forward on
expansion. Maine must negotiate with Washington to en23

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Center for Media and Democracy || October 2014

Maine Gov. Paul LePage

sure that our citizens and taxpayers are protected. We need
flexibility in our program to improve delivery and root out
fraud and abuse.”217
The Alexander report echoes the sentiment: “Maine needs
a state-based solution with flexibility from the federal
government that focuses on access … personal responsibility, and efficiency.”218 It soon became clear that the report
was not even nominally independent as the Department of
Health and Human Services edited and redrafted it before
releasing it to the public.219
Also, the numbers didn’t add up. According to a review
by the independent research and consulting firm Health
Management Associates, the dire cost projections in the
Alexander report were a result of underestimating the
federal funding for welfare programs, the so-called Federal
Medical Assistance Percentages (FMAP). The higher rate

used by the Alexander Group, and the fact that the report
contained no analysis of savings associated with a Medicaid
expansion, erroneously inflated the costs by $575 million.
Looking at savings, the Alexander Group said, was “outside
the scope” of the study.220
In March, lawmakers on the joint Health and Human
Services Committee in the state capitol passed a bill to stop
all further payments and effectively cancel the contract.221
LePage’s spokeswoman called this “an unabashed attempt
to punish the governor for uncovering the true cost of
welfare,” and made clear that he would veto any such bill.222
Two months later, the final project deadline passed.
Despite the fact that taxpayers had already ponied up more
than half a million, Maine had only received one of the five
reports.223 The Alexander Group scrambled to finish a second one.224 In June 2014, Bangor Daily News revealed that
large chunks of the policy recommendations were lifted
from a 2011 paper by the Washington D.C. groups Center
on Budget and Policy Priorities and the Center for Law and
Social Policy.225
In the face of the plagiarism revelations, Maine decided to
formally terminate the contract. In a letter to the Alexander
Group, the head of the state’s Department of Health and
Human Services further made clear that the department
would impose a “payment penalty” due to “citation errors.”226
In the end, the bill (footed by Maine’s taxpayers) for sloppy
“expert advice” to support the governor’s ideological beliefs
and political agenda came to a whopping $474,760.

LePage Supports Pumping Public Water for
Private Gain
Around the world, private firms have been given “carte
blanche rights to mine local groundwater supplies at the
expense of local populations, say experts.”227 In 1997,
Swiss food giant Nestlé signed a contract with the privately-owned water services provider in Fryeburg, Maine,
to buy freshwater in bulk for its Poland Spring brand of
bottled water.228

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Fearing that large-scale commercial water exploitation
would lead to groundwater depletion and the Saco River
drying up,229 the town of Fryeburg enacted a Land Use
Ordinance that required that any company pumping more
than 10,000 gallons of water a day get approval from the
planning board. With a constant stream of litigation and
appeals, however, Fryeburg Water Co. was able to buy time
while continuing its moneymaking sideline business without interruption.
In 2004, Poland Spring/Nestlé announced an expansion of
operations; the firm hoped to build a bottling plant.230 The
town’s Ground Water Regulation Work Group compiled
a report, stating that the impact plan submitted by Nestlé
was overly optimistic and based on incomplete data; there
was, in fact, a potential risk of pumping the aquifer dry.231
Amid threats of a state excise tax on water bottling,232
Nestlé decided to ditch the bottling plant. Instead, in 2013,
the company and Fryeburg Water Co. announced plans to
enter into an unprecedented 45-year contract “for water
extraction and lease of utility property.”233 Worth close to
$11 million, the deal would allow Nestlé the exclusive right
to draw 75+ million gallons of water a year.
Activists and environmental groups, such as Community
Water Justice and Food & Water Watch-Maine, soon collected 136,000 signatures and presented Gov. LePage with
a petition urging the Public Utilities Commission to reject
the deal: “It’s our water! Stop bullying my community!”234
LePage refused to listen to the concerns of the protestors.235
Reports filed with the Maine Ethics Commission reveal
that Nestlé/Poland Spring spent $101,160 on lobbying the
legislature between 2007 and 2013.236 Moreover, the media
soon uncovered that all three members of the Maine Public
Utilities Commission, the regulatory agency charged with
reviewing the contract, had ties to Nestlé.237 The chairman
Thomas Welch, for example, worked as an attorney for
Nestlé Waters until his appointment to the commission. He
recused himself from the contract review,238 and soon the
other two dropped out as well.
Following media scrutiny, the last commissioner standing,
David Littel, who had also worked as an attorney for the
firm representing Nestlé Waters, decided to step down in

July 2014, citing a conflict of interest. LePage sent a letter239
to Waters expressing his “concern” about Littel’s interpretation of the recusal standards. Apparently Littel had let
his moral code get the better of him. But the governor was
prepared for such unfortunate eventualities. To make sure
that the commission was independent in name only, he
had previously passed legislation allowing him to appoint
retired judges as substitute commissioners when it suited
him.

and other uses;” it should not be sold off as a “bulk commodity” to Nestlé or other bottlers.

In September 2014, a report by a PUC hearing examiner
recommended that the contract not be approved. Fryeburg
Water Co., the report notes, was established to “convey to
the village of Fryeburg a supply of pure water for domestic

The recommendations in the report, however, are nonbinding. In October, LePage’s substitute commissioners will
have the final say.

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For Food & Water Watch, which has campaigned against
the contract, “The report validates everything we’ve been
saying all along: that this 25-year proposal with options of
extending it to 45 years … was a shameful sweetheart deal
with a multinational corporation to strip a local community of its right to water.”

OUTSOURCING AMERICA: WISCONSIN
Governor Walker’s Privatized Jobs Agency
Generates Many Headlines, Few Jobs
On one point, Wisconsin Governor Scott Walker has never
wavered. He means business. After taking office in 2011, he
soon announced that he would create 250,000 new private-sector jobs during his tenure: “Wisconsin is open for
business!”240 This sound bite was soon added to road signs
across the state and became his mantra at public presentations.
One of Walker’s first bills called for the privatization of the
Department of Commerce’s economic development functions. In July 2011, the new Wisconsin Economic Development Corporation (WEDC) was launched, “with the mission of elevating Wisconsin’s economy to be the best in the
world.”241 The quasi-public agency is run by a 15-person
board, chaired by the governor, which controls hundreds of
millions in bonds, grants, tax credits, and loans.
Wisconsin Gov. Scott Walker

The agency was soon mired in controversy. In May 2012,
WEDC was slammed by the federal Department of Housing and Urban Development for misappropriating $10
million in federal funds. Two months later, allegations of
bid-rigging forced it to cancel a planned award to an information systems company. And in October of the same year,
the Milwaukee Journal Sentinel reported that WEDC had
lost track of some $8 million in funds.
In May 2013, the Wisconsin Legislative Audit Bureau
found that WEDC had awarded a portion of these grants,
loans, and tax credits to ineligible recipients, for ineligible
projects, and for amounts that exceeded specified limits
(auditor language for “broke the law”).
With all that taxpayer money, how many actual jobs have
been created since 2011?
In October 2011, the WEDC governing board chaired by
Walker approved an operations plan that set the agency
a goal of creating or retaining 50,000 jobs in Fiscal Year
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2011.242 At the end of 2012, when WEDC was required
to issue its first report documenting how many jobs it
had created, WEDC reported 23,759 jobs “impacted” in
FY 2012.243 This new term combines “expected” jobs and
“retained” jobs. It allows WEDC to avoid reporting “actual”
jobs.
CMD spoke to subsidy expert Greg LeRoy at the national
nonprofit research group Good Jobs First about the term
“impacted.” “I am not aware of any other state that uses the
term impacted in this way. It is a vague and not very meaningful measure,” said LeRoy.
Nowhere in its 2012 annual report does WEDC say how
many jobs were actually created that year, but CMD’s
analysis of WEDC’s official database documents only 1,044
“actual” jobs reported by companies.
At the end of 2013, WEDC told the legislature and the public that it had “impacted” 37,313 jobs.244 No actuals were

included in the report to the Legislature, but its official
database includes documentation for 4,796 “actual” jobs.
This means only 5,840 jobs were created for the two-year
period CMD examined. To create those jobs, some $203
million in taxpayer money went out the door in grants,
loans, and bonding authority.
While WEDC was busy handing out grants, many Wisconsin companies were cutting back or going under. Over the
same two-year period, state data indicates that Wisconsin
lost 13, 616 jobs to mass layoffs and closings. Two state
databases, two distinct numbers — more than two jobs lost
in the state for every job gained through WEDC’s efforts.
But by any measure, Walker’s WEDC has failed in its mission to elevate “Wisconsin’s economy to be the best in the
world.”
Why such poor performance? Recent reports point to numerous contributing factors.
CMD found that one unsecured, delinquent $500,000 loan
did not require that any jobs be created at all. That loan
was made to Bill Minahan, owner of Building Committee,
Inc. WEDC approved the loan even though the firm was
dragged into court for failure to pay its bills in 2010. It is
unknown why these officials thought Minahan was such
a good risk, but he was a Walker donor, giving $10,000 in
2010. After receiving the $500,000 loan, Building Committee Inc. racked up $757,103 in judgments and liens, leaving
taxpayers with little hope of recovery.
A report published in May 2014 by One Wisconsin Now
found that a number of job-creation grants had gone to
firms engaged in sending jobs to states other than Wisconsin, and outside of the U.S. itself.245 WKOW TV found even
more grants to companies that offshored jobs overseas.246
A report by Citizen Action in February 2014 showed that
the agency was not targeting areas of the state in need of
jobs, but was disproportionately aiding Republican Assembly districts.247 The advocacy group One Wisconsin
Now found that Walker donors received a third of WEDC
awards, but this equated to 60 percent of the funding handed out in that time period.

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Another news story in July 2014 seemed to summarize
an emerging pattern. The conservative daily, the Wisconsin State Journal, found that the WEDC board headed by
Walker approved a $6 million loan to a furniture store
with a deal that would not require the firm to create any
new jobs at all, instead granting the company license to lay
off half of its current 3,848 Wisconsin-based workers in
exchange for an enterprise zone tax credit, one of the most
valuable and coveted state subsidies. Shortly after the board
decision, Walker received a $20,000 campaign contribution
from executives at the firm.248
The situation in Wisconsin is not unique. Reviewing eight
states that have privatized their economic development
agencies, Good Jobs First concluded that these new public-private partnerships have all been mired in scandal.
Lack of accountability and transparency, paired with widespread cronyism, are not a good recipe for job creation:
“In these times of severe economic development
bargaining asymmetry between the private and public
sectors, taxpayers are best served by experienced public-agency employees who are fully covered by ethics
and conflicts laws, open records acts, and oversight by
auditors and legislators … Privatization delivers none
of these qualities.”249
As Scott Walker’s term nears its end, he is still short on
150,000 jobs. PolitiFact reports that “his promise remains
stalled.”250

Maximus Inc.’s Troubled History in Wisconsin
Based in Virginia but with offices all over the world, Maximus Inc. rakes in more than $1 billion251 a year from U.S.
states and countries around the world outsourcing administrative functions. Wisconsin and the privatizing giant
have a long and very troubled history, but breaking up, it
seems, is hard to do.
Between 1997 and 2001, the Wisconsin Department of
Workforce Development awarded Maximus three contracts
to administer the newly created Wisconsin Works (W-2)
program for $107 million.252 W-2 provides employment

counseling and cash assistance for families living below
the poverty line. There is no entitlement to assistance; it
must be earned through “work participation and personal
responsibility.”253
While the struggling Wisconsin families kept their part
of the responsibility bargain, Maximus did not. In 2000,
it transpired that the company had improperly billed the
state hundreds of thousands of dollars for expenses that
had nothing to do with W-2, including “social functions
and entertainment.” In the end, Maximus was forced to pay
back $500,000. As a show of “good faith,” it also wrote a
check for a further $500,000.254
Whether it was the show of good faith or its impressive
history of maximizing profits is impossible to say, but in
2004 Wisconsin once again contracted Maximus, this time
as a “revenue-maximization consultant.” The company was
charged with helping the Department of Health Services
prepare and file Medicaid claims to extract more money in federal reimbursement.255 The $3.4 million dollar
contract – footed by Wisconsin taxpayers – ran until 2009.
And initially, things seemed to be going fine. Perhaps the
appropriation of $500,000 some years earlier was just a bad
day in the office for Maximus?
When the contract expired, DHS continued filing in accordance with the “best practices” developed by the company.
In 2013, these practices caught the eyes of the inspector
general for the U.S. Department of Health and Human Services, who found that they did not comply with federal requirements. Out of $41 million claimed for residential care
services between 2004 and 2006, $39 million was deemed
“unallowable.” That translates into $19 out of every $20.
In much the same way as someone who wants to avoid or
evade paying taxes might try to write all expenses off as
deductions – hoping that they won’t be audited – Maximus had advised Wisconsin to claim reimbursement for
work done by youth care workers and social workers as
“other services.”256 When the audit came, the “best practices” proved to be costly, as the feds demanded Wisconsin
pay back $23 million. Chances are that this number will
increase by a magnitude when the claims made after 2006
get the fine-tooth-comb treatment.

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W-2 and Medicaid consultancy are not the only services
that have been outsourced to Maximus in Wisconsin. After
spending more than $114,000257 on lobbying the legislature
on bills related to the “W-2 budget allocation process,”258
Maximus was awarded a renewed six-year contract with
the Wisconsin Department of Children and Families worth
some $21 million in 2011.259 Once again, Maximus was
charged with deciding whether cases (this time children
placed in foster care) met the criteria for federal reimbursement. And once again, the company developed “best
practices.“
In neighboring Illinois, the Maximus experiment came to
a sudden end in December 2013. Facing a shortage of staff,
the Department of Healthcare and Family Services had
contracted Maximus to deal with a backlog of Medicaid
cases up for re-determination.260 An investigation of the
redetermination data found that Maximus’s work was sloppy and had high error rates, as opposed to the work carried
out by state employees.261 The case went to arbitration,
and during the proceedings, the union showed that Illinois
could save $18 million by hiring more staff to make up for
the shortfall, instead of using a contractor.262 The independent arbitrator issued an order cancelling the $77 million
dollar contract with Maximus.
In Wisconsin, on the other hand, things are not as straightforward. The foster care contract is still in effect, and
Maximus continues to provide W-2 services, with an office
in Milwaukee.263
Eager to see Walker remain in office, Maximus contributed
$5,000 (its biggest Wisconsin contribution in ten years) toward the governor’s recall election campaign.264 Maximus
also pays $100,000 a year for exclusive access to Republican
governors through the secretive Republican Governors
Public Policy Committee. At a 2013 event, Philip Geiger,
Vice President of Maximus, wined and dined with members of Scott Walker’s inner circle. In attendance was also
Kevin Moore, Deputy Secretary of the Wisconsin Department of Health Services.265
In a tweet from August 2014, W-2 urges job applicants to
“Check Check & Double Check your resume.”266 Good advice indeed. Perhaps some résumé-checking would not be
amiss the next time Wisconsin officials evaluate a Maximus
bid.

ENDNOTES
1.	 http://www.theatlantic.com/politics/archive/2014/04/
city-state-governments-privatization-contracting-backlash/361016/
2.	 http://www.mypalmbeachpost.com/news/news/privatized-prison-health-care-in-florida-deadly-pa/nhWkX
/#32426ac2.3784377.735504
3.	 http://www.browardbulldog.org/2013/10/florida-prison-officials-didnt-ask-companies-didnt-tell-about-hundreds-of-malpractice-cases/
4.	 http://www.browardbulldog.org/2013/10/florida-prison-officials-didnt-ask-companies-didnt-tell-about-hundreds-of-malpractice-cases/
5.	 http://www.mypalmbeachpost.com/news/news/privatized-prison-health-care-in-florida-deadly-pa/nhWkX
/#32426ac2.3784377.735504
6.	 http://westorlandonews.com/2010/12/20/scott-eyes-1-billion-in-prison-cuts/a
7.	 http://www.miamiherald.com/news/politics-government/
article1944656.html
8.	 Aggregated totals from compensation reports filed with the
Florida Legislature: http://olcrpublic.leg.state.fl.us/aggregate_totals.cfm?CFID=5715429&CFTOKEN=44889058
9.	 http://www.bloomberg.com/news/2012-12-04/florida-s-230million-prison-contract-rejected-by-judge.html

ter-schools/
19.	 From 2008 to 2014, K12 Inc. spent $202,500 on Florida
candidates, either directly or through the Florida Republican
Party and the Republican Leadership Committee. http://
beta.followthemoney.org/show-me?s=FL&y=2014,2013,2012
,2011,2010,2009,2008&d-eid=7334#[{1|gro=f-eid
20.	 http://votelocal2014.org/pdf/alecinflorida.pdf
21.	 The lobbying data is aggregated from the annual reports filed
with the Florida Legislature: http://olcrpublic.leg.state.fl.us/
aggregate_totals.cfm
22.	 Data from http://schoolgrades.fldoe.org/
23.	 “While we set about becoming the best place in the country
to create jobs, we’ll also take a fresh look at education and
health care. Few things matter as much to us as our health
care and the education of our children. It’s time to offer
Floridians more choices, more opportunity to select the
services they need. Why should we cling to models created
in another century?” http://www.flgov.com/2011/01/04/florida-governor-rick-scott-inaugural-address/
24.	 http://www.justice.gov/archive/opa/pr/2003/June/03_
civ_386.htm
25.	 http://www.rawstory.com/rs/2011/03/24/florida-senate-panel-approves-plan-to-drug-test-welfare-recipients/
26.	 http://www.flsenate.gov/Session/Bill/2011/0556

10.	 http://www.bloomberg.com/news/2013-06-05/florida-s-230million-corizon-prison-contract-is-revived.htmla

27.	 http://www.tampabay.com/news/business/gov-rick-scott-solantic-and-conflict-of-interest-whats-the-deal/1161158

11.	 http://www.tampabay.com/news/publicsafety/crime/stageset-for-massive-privatization-of-prison-health-care-in-florida/2129248

28.	 http://www.motherjones.com/politics/2011/03/
rick-scott-florida-medicaid-solantic

12.	 http://www.huffingtonpost.com/2013/10/04/florida-prison-health-care-contracts_n_4045943.html
13.	 https://docs.google.com/file/d/0B4fjL1-0K8piNmJhZTUyMzEtYTA0Ny00NGU0LTk2ZjYtZjg0MjczYTE2NzVj/
edit?hl=en&pli=1
14.	 http://www.flsenate.gov/Session/Bill/2011/7197/?Tab=BillText
15.	 http://archive.wtsp.com/news/local/article/198708/8/GovScott-signs-education-bills-in-St-Pete
16.	 http://www.sourcewatch.org/index.php/Florida_ALEC_Politicians

29.	 http://www.tampabay.com/news/business/gov-rickscott-finalizes-deal-to-sell-his-holdings-in-urgent-carechain/1163630
30.	 http://www.miamiherald.com/2014/07/08/4224582/flajudge-wont-dismiss-medicaid.html
31.	 http://www.miamiherald.com/2014/07/08/4224582/flajudge-wont-dismiss-medicaid.html
32.	 http://www.wjhg.com/home/headlines/38605857.html
33.	 http://miami.cbslocal.com/2014/07/02/florida-medicaid-privatization-underway-statewide/

17.	 http://kpk12.com/states/florida/

34.	 The lobbying data is aggregated from the annual reports filed
with the Florida Legislature: http://olcrpublic.leg.state.fl.us/
aggregate_totals.cfm

18.	 http://www.fundeducationnow.org/resource-room/char-

35.	 https://www.nyse.com/quote/XNYS:WCG

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36.	 https://www.nyse.com/quote/XNYS:CNC
37.	 http://finance.yahoo.com/q?d=t&s=^IXIC
38.	 http://www.browardbulldog.org/2014/05/floridas-first-lady-invests-quietly-in-investment-firm-that-mirrors-governors-old-company/
39.	 http://investing.businessweek.com/research/stocks/private/
snapshot.asp?privcapId=171235621
40.	 http://www.tampabay.com/news/politics/stateroundup/
gov-rick-scotts-blind-trust-safe-for-now-judge-sees-noemergency-in-lawsuit/2181828
41.	 http://medicaid-florida.medicaidconsultants.com/florida-medicaid-expanding-privatization.html
42.	 http://www.thedailybeast.com/articles/2014/07/20/
sam-brownback-s-kansas-catastrophe.html
43.	 http://cpr.ca.gov/cpr_report/Issues_and_Recommendations/Chapter_2_Health_and_Human_Services/HHS03.
html
44.	 http://www.khi.org/news/2013/jul/05/state-child-supportworkers-be-laid/
45.	 http://cjonline.com/news/state/2013-03-01/kansas-privatize-child-support-collections
46.	 http://media.khi.org/news/documents/2014/05/27/MS_
PEER_Report.pdf, p. 36.
47.	 http://www.nwlc.org/sites/default/files/pdfs/stoppingcutstochildsupport.pdf
48.	 http://www.khi.org/news/2013/jun/14/dcf-picks-child-support-enforcement-contractors/
49.	 http://www.khi.org/news/2013/jul/05/state-child-supportworkers-be-laid/
50.	 http://ywcss.com/news/kansas-awards-management-twothirds-its-child-support-caseload-youngwilliams
51.	 http://www.sos.ks.gov/elections/cfr_viewer/cfr_examiner_contribution.aspx
52.	 http://www.nytimes.com/2014/05/07/us/politics/associates-of-kansas-governor-are-investigated-over-fund-raising-and-lobbying.html?_r=0
53.	 Kansas Health Institute notes in passing how the vault, now
a conference room, was the location of one of the most infamous heists in state history. The story, we might add, is also
one of public funds being appropriated into private hands
(though in this case by illegal means.) In 1933, Ronald Finney – a business man and a prolific donor to then governor
Alf Landon – stole half a million worth of public bonds from
the vault and replaced them with forged copies. The plot was
masterminded by Ronald’s father, who was sentenced to 30
to 600 years in prison, where he committed suicide. Ronald
served twelve years and was released in 1945. http://cjonline.
com/stories/120600/opi_snidercol.shtml
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54.	 http://www.khi.org/news/2014/may/27/privatization-initiative-offers-window-kansas-gove/
55.	 http://www.nashvillescene.com/nashville/a-new-firmis-taking-over-davidson-countys-privatized-child-support-enforcement-and-not-a-moment-too-soon/Content?oid=3445605
56.	 The author of the study cited in Brownback’s campaign
debunked these numbers as “bizarre” and “just false.” http://
www.khi.org/news/2010/oct/18/brownback-claims-aboutfederal-health-reform-miss-/
57.	 Political Action Committees and individuals are allowed to
give $2,000 to each candidate running for statewide office.
58.	 http://beta.followthemoney.org/show-me?y=2010,2009&c-teid=6681039&d-ccg=8
59.	 http://beta.followthemoney.org/show-me?y=2010,2009&c-teid=6409084&d-ccg=8
60.	 http://www.khi.org/news/2011/mar/07/lieutenant-governor-leading-medicaid-makeover/
61.	 http://online.wsj.com/articles/sam-brownbacks-tax-cutpush-puts-kansas-out-on-its-own-1402448126
62.	 http://www.khi.org/news/2012/feb/01/blue-cross-kansasnot-bidding-kancare-proposal/
63.	 http://www.khi.org/news/2012/mar/01/advocates-developmentally-disabled-continue-opposi/
64.	 http://wellcommons.com/groups/wise/2012/feb/1/kansas-advocate-raises-concerns-about-me/
65.	 http://www.kansas.com/2012/10/11/2528217/kansas-providers-unsure-of-medicaid.html
66.	 http://www.khi.org/news/2012/jun/27/kancare-contracts-signed/
67.	 http://viewfromthemidwest.com/2013/01/04/fallingthrough-the-cracks-of-kancare/
68.	 http://www.nytimes.com/2013/05/25/us/states-policies-onhealth-care-exclude-poorest.html
69.	 From fiscal year 2012 to 2013, the enrollment for people with physical disabilities dropped by 15 % whereas
per-capita funding skyrocketed by 41%. http://cjonline.
com/news/2014-03-20/group-persons-disabilities-falling-through-kancares-cracks
70.	 http://www2.ljworld.com/news/2013/dec/05/kancare-expansion-medicaid-under-aca-discussed-for/
71.	 http://www.pitch.com/kansascity/kancare-sam-brownbackfinn-bullers/Content?oid=4031015
72.	 http://www.kansascity.com/news/government-politics/article349201/Lobbying-in-Kansas-draws-scrutiny-from-theFBI.html
73.	 http://www.kansas.com/2014/05/05/3440618/brown-

back-dismisses-report-of.html
74.	 http://www.researchgate.net/publication/257780985_
Cost-Analysis-of-Public-and-Contractor-Operated-Prisons-FINAL3

89.	 http://www.freep.com/article/20140808/
NEWS06/308080159/aramark-prison-food-fines
90.	 http://www.mlive.com/lansing-news/index.ssf/2014/09/
schuette_to_investigate_aramar.html

75.	 http://temple-news.com/news/university-review-ethics-complaint-regarding-two-professors/

91.	 http://www.freep.com/article/20140713/
NEWS06/307130092/aramark-prison-food-fraternization

76.	 http://www.freep.com/article/20130607/OPINION05/306070023/prision-privatization-Michigan

92.	 http://temple-news.com/news/university-review-ethics-complaint-regarding-two-professors/

77.	 In an earlier slideshow presentation for their department,
the authors make a final recommendation.  Managed competition, they note, could also “be applied to the bidding
for inmates.”   This phrase did not make it to the final paper
or to the op-eds; perhaps it carried an eerie echo from a
bygone era with human beings in bondage, and a different
bidding process. www.fox.temple.edu/cms/wp-content/uploads/2014/02/Prison-presentation-PP-2-10-14.ppt

93.	 http://articles.philly.com/2014-06-10/news/50451738_1_research-funding-professors-funding-source

78.	 http://www.legislature.mi.gov/%28S%28ae4ouargegryew55ectgmhvu%29%29/mileg.aspx?page=getObject&objectName=2011-HB-5174
79.	 http://www.republicreport.org/2012/michigan-representative-introduces-prison-privatization-bill-top-donor-is-private-prison-lobbyist/
80.	 http://miboecfr.nicusa.com/cgi-bin/cfr/lobby_detail.
cgi?caller%3DSRCHRES%26last_match%3D50%26lobby_type%3D*%26lobby_name%3DGEO%26include%3Dactive%261%3D1%26lobby_id%3D6627%26last_match%3D0
81.	 http://detroit.cbslocal.com/2013/05/01/michigan-privatizing-prison-food-service/
82.	 http://miboecfr.nicusa.com/cgi-bin/cfr/lobby_detail.
cgi?caller%3DSRCHRES%26last_match%3D50%26lobby_type%3D*%26lobby_name%3DARAMARK%26include%3Dactive%261%3D1%26lobby_id%3D10252%26last_
match%3D0
83.	 http://qasite12-site.apps.nandomedia.
com/2009/11/06/1008801_food-caused-northpoint-riotguard.html
84.	 http://investing.businessweek.com/research/stocks/people/
person.asp?personId=398401&ticker=PEP
85.	 http://www.freep.com/article/20140630/
NEWS06/306300136/prison-food-maggots-Aramark
86.	 http://www.freep.com/article/20140713/
NEWS06/307130092/aramark-prison-food-fraternization
87.	 http://www.freep.com/article/20140717/
NEWS06/307170032/aramark-prison-sex-michigan-inmate-contract
88.	 http://www.freep.com/article/20140311/
NEWS06/303110103/michigan-department-of-corrections-fines-prison-food-vendor

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94.	 http://www.crainsdetroit.com/article/20130430/
NEWS/130439985/hiring-of-aramark-corp-for-privatizedprison-food-services-will-save
95.	 In a 2013 report published by the National Education Policy
Center, the authors conclude that “on the common metrics of Adequate Yearly Progress (AYP), state performance
rankings, and graduation rates, full-time virtual schools lag
significantly behind traditional brick-and-mortar schools.”
http://nepc.colorado.edu/files/nepc-virtual-2013.pdf
96.	 http://www.legislature.mi.gov/documents/2009-2010/billintroduced/Senate/pdf/2009-SIB-0981.pdf
97.	 http://www.sourcewatch.org/index.php/Michigan_ALEC_
Politicians
98.	 http://www.michiganvotes.org/2009-SB-981
99.	 Revenues from the “K-12 online learning industry” are projected to reach $24.4 billion in 2015 – most of which comes
from taxpayers. http://www.theinvestigativefund.org/investigations/corporateaccountability/1580/
100.	The student attrition rate in cyber schools is sky high.
Figures from K12 Inc. show that 67 percent of all students
had been enrolled for fewer than two years. http://phx.
corporate-ir.net/External.File?item=UGFyZW50SUQ9MTM0MDc2fENoaWxkSUQ9LTF8VHlwZT0z&t=1
101.	Aggregate financial data filed with the Michigan Department
of State: http://miboecfr.nicusa.com/cgi-bin/cfr/lobby_stats_
res.cgi
102.	http://www.k12.com/sites/default/files/pdf/school-docs/MVCA-AER-Family-Letter-081911.pdf
103.	Average percentages of students who received “proficient”
or above on the state MEAP test: http://www.mlive.com/
lansing-news/index.ssf/2014/02/see_how_michigans_students_per.html?appSession=964467656924652
104.	http://www.mlive.com/lansing-news/index.ssf/2014/02/
see_how_michigans_students_per.html?appSession=009467657955218
105.	http://www.legislature.mi.gov/documents/2011-2012/billintroduced/Senate/htm/2011-SIB-0619.htm
106.	http://www.prwatch.org/news/2012/12/11903/mich-

igan-passes-right-work-containing-verbatim-language-alec-model-bill
107.	http://www.scribd.com/doc/122624971/Sen-Colbeck-TellsKoch-Funded-Group-RTW-Passed-Because-of-DeVosFunding
108.	http://michiganvotes.org/2011-SB-619
109.	http://www.mea.org/pdf/022812-SB619_written_testimony_from_President_Cook.pdf This sentiment is echoed by
the 2013 report from the National Education Policy Center:
“At this point, technological and business models have far
outpaced research on the impact of virtual teaching and
learning. Yet, even though little is known about the efficacy
of online education generally … states aer moving quickly to
expand taxpayer-funded virtual education programs.” http://
nepc.colorado.edu/files/nepc-virtual-2013.pdf
110.	http://www.cleveland.com/open/index.ssf/2011/02/gov_kasich_signs_jobsohio_bill.html
111.	http://www.goodjobsfirst.org/sites/default/files/docs/pdf/
powergrab.pdf

125.	http://www.highbeam.com/doc/1P2-34398862.html
126.	http://archive.cincinnati.com/article/20131121/
NEWS010801/311210053/Audit-finds-accounting-problems-JobsOhio
127.	http://www.crainscleveland.com/article/20140615/
SUB1/306159984/jobsohio-to-date-is-slow-to-spend
128.	http://clawback.org/2012/04/
129.	http://www.guidestar.org/FinDocuments/2013/201/255/201
3-201255734-0a108456-9.pdf
130.	http://quickfacts.census.gov/qfd/states/39000.html
131.	http://www.guidestar.org/FinDocuments/2013/201/255/201
3-201255734-0a108456-9.pdf
132.	http://beta.followthemoney.org/show-me?s=OH&d-eid=773&y=2010&f-eid=6681079
133.	https://www.toledoblade.com/Economy/2013/12/03/JobsOhio-exempt-from-public-records-laws-state-SupremeCourt-rules.html

112.	http://www.cleveland.com/open/index.ssf/2011/03/ohio_
gov_john_kasich_hopes_boo.html

134.	http://www.daytondailynews.com/news/news/national-govt-politics/kasich-approves-more-than-240m-packages-to-retain-/nMwSc/

113.	http://www.dispatch.com/content/stories/local/2012/01/24/
jobsohio-set-to-pay-state-1-4b-for-rights-to-liquor-profits.
html

135.	http://www2.cincinnati.com/blogs/nkypolitics/2011/09/19/
omnicare-move-will-lead-to-change/

114.	http://www.cleveland.com/open/index.ssf/2011/06/is_12_
billion_too_low_for_the.html
115.	http://www.communitysolutions.com/assets/docs/Major_Reports/State_Budget_and_tax/liquorprivatizationupdate_honeck_060111.pdf
116.	http://jobs-ohio.com/images/JO_2013_Financial_Review.pdf
117.	http://www.dispatch.com/content/stories/local/2011/01/20/
jobsohio-kasich.html
118.	http://www.dispatch.com/content/stories/local/2011/02/18/
jobsohio-bill-signed.html
119.	http://www.highbeam.com/doc/1P2-34996852.html
120.	http://www.dispatch.com/content/stories/local/2012/05/02/
jobsohio-bill-fixes-public-records-issue.html
121.	https://www.toledoblade.com/Economy/2013/12/03/JobsOhio-exempt-from-public-records-laws-state-SupremeCourt-rules.html
122.	http://www.dispatch.com/content/stories/local/2013/03/07/
kasich-yost-in-showdown-over-jobsohio.html
123.	http://www.dispatch.com/content/stories/local/2013/05/30/
Yosts-asks-for-more-time-as-Senate-considers-JobsOhio-auditing-proposal.html
124.	http://www.dispatch.com/content/stories/local/2013/06/05/
bill-signed-to-close-jobsohios-books.html

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136.	http://www.dispatch.com/content/stories/local/2012/05/01/
jobsohio-report.html
137.	http://jobs-ohio.com/images/13-0305_JO_Report_Full.pdf
138.	http://www.cleveland.com/open/index.ssf/2011/12/nearly_half_of_companies_that.html
139.	http://www.ohioattorneygeneral.gov/getattachment/cc74bf5
0-b03a-4902-be24-d66797860643/2012-Economic-Development-Accountability-Report.aspx
140.	http://jobs-ohio.com/images/JO_2013_Results_Review.pdf
141.	https://www.toledoblade.com/Economy/2013/12/03/JobsOhio-exempt-from-public-records-laws-state-SupremeCourt-rules.html, http://jobs-ohio.com/images/JobsOhio_
Annual_Ethics_Training.pdf
142.	http://investing.businessweek.com/research/stocks/people/
person.asp?personId=27064273&ticker=BOBE
143.	http://www.mydaytondailynews.com/news/news/state-regional-govt-politics/board-has-ties-to-firms-that-got-help/
nY8QF/
144.	http://www.dispatch.com/content/stories/local/2013/09/26/
JobsOhio-conflict-of-interest-revealed.html)
145.	http://www.nbc4i.com/story/24778722/nbc4-investigatestaxpayers-left-holding-bill-for-charter-schools All websites
accessed in August 2014.
146.	http://www.dispatch.com/content/stories/local/2014/01/12/

charter-failure.html.
147.	http://www.nbc4i.com/story/24778722/nbc4-investigatestaxpayers-left-holding-bill-for-charter-schools
148.	http://education.ohio.gov/Topics/School-Choice/Community-Schools/FAQs-about-Licensure-for-Special-Education-Teacher#FAQ190
149.	http://www.ohio.com/news/irs-sets-rules-on-how-charterschools-qualify-for-tax-exempt-status-1.477137
150.	http://www.ohio.com/news/local/board-members-at-whitehat-charter-schools-say-they-have-little-control-over-publicfunds-part-2-of-3-1.477146
151.	http://stateimpact.npr.org/ohio/2011/10/12/chartersschools-part-iii-cashing-in-on-education/
152.	http://www.cleveland.com/metro/index.ssf/2013/07/white_
hat_managements_ohio_cha.html
153.	http://www.dispatch.com/content/stories/local/2010/05/17/
white-hat-charter-school-lawsuit.html
154.	http://media.ohio.com/uploads/2010/05/Hope-Academiesv-White-Hat-Management-Part-1.pdf
155.	http://www.cleveland.com/open/index.ssf/2010/05/for-profit_management_company.html

169.	http://beta.followthemoney.org/show-me?c-t-eid=3741607&y=2006&d-eid=5720
170.	http://www.sourcewatch.org/index.php/Richard_and_Helen_DeVos_Foundation
171.	http://www.publicschoolshakedown.org/dick-and-betsy-devos
172.	http://www.dispatch.com/content/stories/local/2008/07/01/
brennan.html, http://www.ohio.com/news/state-office-challenges-brennans-committee-donations-1.89511, http://www.
dispatch.com/content/stories/local/2008/04/04/PAC_Money.
ART_ART_04-04-08_A1_579R1JU.html
173.	http://www.dispatch.com/content/stories/local/2011/06/05/
house-cozy-with-charter-schoollobby.html
174.	http://www.sourcewatch.org/index.php/Ohio_ALEC_Politicians
175.	http://followthemoney.org/show-me?c-t-eid=3093047&deid=62968
176.	http://beta.followthemoney.org/show-me?s=OH&deid=62968
177.	http://nepc.colorado.edu/files/EMO-profiles-10-11_0.pdf

156.	http://www.dispatch.com/content/stories/local/2010/06/04/
legislators-join-charter-debate.html

178.	http://www.dispatch.com/content/stories/local/2007/08/15/
BRENNAN_SCHOOLS.ART_ART_08-15-07_B1_
DJ7KAK5.html

157.	http://www.ohio.com/blogs/education/education1.286050/10-charter-schools-sue-white-hat-over-assets-1.286290

179.	http://www.batchelderforohio.com/index.php/education/
180.	http://www.lcb.state.pa.us/cons/groups/externalaffairs/documents/form/002091.pdf.

158.	http://codes.ohio.gov/orc/3314.026

181.	http://www.legis.state.pa.us/cfdocs/billInfo/billInfo.cfm?sYear=2013&sInd=0&body=H&type=B&bn=790.

159.	http://www.cleveland.com/open/index.ssf/2010/05/for-profit_management_company.html
160.	http://media.ohio.com/uploads/2010/05/Hope-Academiesv-White-Hat-Management-Part-1.pdf
161.	http://stateimpact.npr.org/ohio/2012/12/18/what-happenswhen-white-hat-charter-schools-rebel/
162.	http://www.legislature.state.oh.us/bills.cfm?ID=126_HB_79
163.	http://heartland.org/policy-documents/heartlander-august-2004-0
164.	http://alecexposed.org/w/images/7/7b/Ohio_ALEC_campaign_finance_expenditures.pdf
165.	http://www.dispatch.com/content/stories/local/2010/05/17/
white-hat-charter-school-lawsuit.html
166.	http://beta.followthemoney.org/show-me?c-t-eid=6681079#[{1|gro=d-id
167.	http://beta.followthemoney.org/show-me?c-t-eid=3741607&d-eid=1804112#[{1|gro=d-id
168.	http://beta.followthemoney.org/show-me?c-t-eid=3741607&d-eid=2615842#[{1|gro=d-id
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182.	http://www.paaflcio.org/?p=2160.
183.	http://articles.mcall.com/2013-04-30/news/mc-pa-senate-liquor-privatization-0428-20130430_1_liquor-privatization-plan-liquor-bill-tom-corbett.
184.	http://www.post-gazette.com/news/state/2012/06/09/RepMike-Turzai-has-new-plan-to-privatize-state-liquor-stores/
stories/201206090149.
185.	http://www.pennlive.com/midstate/index.ssf/2014/04/liquor_privatization_moderniza_2.html
186.	http://www.paaflcio.org/?p=2160.
187.	http://pubs.niaaa.nih.gov/publications/UnderageDrinking/
UnderageFact.htm
188.	See, for example, this report by the North Carolina Preventing Underage Drinking Initiative: http://www.ncpud.org/
projectoverview/2013%20NCPUDI%20Report.pdf
189.	As the Pennsylvania state legislature prohibits direct donations from corporations to candidates, the figures listed are
from corporate PACs.

190.	http://followthemoney.org/database/topcontributor.phtml?u=2772&y=0
191.	http://followthemoney.org/database/topcontributor.phtml?u=2513&y=0
192.	http://www.pennlive.com/midstate/index.ssf/2013/03/free_
my_beer_vp_louie_sheetz_s.html
193.	http://www.dailyitem.com/0100_news/x691306994/Lewisburg-Weis-gets-approval-to-sell-beer
194.	http://followthemoney.org/database/StateGlance/contributor.phtml?d=2575112436
195.	http://www.ogc.state.pa.us/portal/server.pt/community/office_of_general_counsel_-_home/1198
196.	http://triblive.com/politics/politicalheadlines/6201767-74/
state-outside-corbett#ixzz34Y4IbvgH
197.	http://www.abc27.com/story/25122021/hiring-of-outsidecounsel-an-insiders-game-critics-say
198.	For outside counsel expenditure, see : http://triblive.
com/politics/politicalheadlines/6201767-74/state-outside-corbett#ixzz34Y4IbvgH, http://www.abc27.com/
story/25122021/hiring-of-outside-counsel-an-insidersgame-critics-say. Campaign contributions from www.
followthemoney.org and www.campaignfinanceonline.state.
pa.us Some of these date back to Corbett’s bid for Attorney
General in 2004.

maine-hires-conservative-firm-to-study-medicaid-expansion-and-bolster-welfare-efficiency/
211.	Some of Alexander’s critics have compiled a list of news clippings outlining his track records as Pennsylvania Secretary
of Public Welfare: https://docs.google.com/file/d/1i7WdVYzS-qfD4yPdB-s36ADG1yuDGhco4LkmOX7rp96oOWeJG5pj8WSoHnGE/edit
212.	It was not long before that Alexander’s hacking and slashing
policies – a $1.3 billion dollar cut in funds for that state’s welfare agency between 2011 and 2013 lead critics to conclude
that Corbett-Alexander had declared a war on the poor.
http://articles.philly.com/2012-04-03/news/31281778_1_corbett-cuts-public-welfare-spending-health-insurance
213.	For an excellent timeline compiled by the New Maine Times,
see http://www.newmainetimes.org/articles/2014/05/29/
timeline-alexander-report/
214.	http://www.maine.gov/dhhs/archivednews_autosearch.
shtml?id=608578
215.	http://mainesenate.org/blog/2014/05/15/new-controversial-alexander-report-more-political-campaign-fodder/
216.	http://www.nytimes.com/news/affordable-care-act/2013/11/21/maine-hires-firm-to-study-medicaid-system-to-democrats-ire/

199.	http://www.ogc.state.pa.us/portal/server.pt/community/outside_counsel/3826

217.	He also referred to a previous expansion of Medicaid as “the
tugging at the heart-strings of people across the political
spectrum” that “did not work.” http://www.maine.gov/legis/
house/hcal/h_20130618.htm

200.	http://wallaby.telicon.com/PA/library/2010/2010113079.
HTM

218.	http://www.maine.gov/dhhs/Alexander/Maine%20Medicaid%20Expansion%20Report.pdf, p. xii.

201.	See http://www.phillyrecord.com/2014/01/green-jimeneznamed-to-s-r-c-as-corbett-dodges-protest/ and http://www.
duanemorris.com/attorneys/johnjsoroko.html

219.	http://bangordailynews.com/2014/01/20/politics/statehouse/state-worked-with-consultant-to-edit-medicaid-report-before-releasing-it-to-public/

202.	http://articles.philly.com/2014-05-10/news/49745457_1_voter-id-law-viviette-applewhite-wilola-lee

220.	http://bangordailynews.com/2014/01/21/politics/alexandergroup-defends-its-medicaid-report-against-claim-of-575million-error/

203.	http://www.politico.com/story/2014/05/pennsylvania-voter-id-ruling-106503.html
204.	http://pastatenaacp.org/voting/pa-voter-id/
205.	www.pilcop.org/applewhite-v-commonwealth/
206.	http://www.abc27.com/story/25122021/hiring-of-outsidecounsel-an-insiders-game-critics-say
207.	http://articles.philly.com/2014-05-10/news/49745457_1_voter-id-law-viviette-applewhite-wilola-lee
208.	http://www.pahouse.com/markosek/PAHouseNews.asp?doc=28316
209.	http://www.washingtonpost.com/blogs/govbeat/
wp/2014/01/02/pennsylvanias-corbett-will-drop-lottery-privatization-plan/
210.	http://bangordailynews.com/2013/11/19/politics/
34

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Center for Media and Democracy || October 2014

221.	http://www.pressherald.com/2014/03/05/maine_lawmakers_
to_consider_bill_to_cancel_lepage_consultant_s_contract_/
222.	http://bangordailynews.com/2014/03/26/politics/lepage-calls-bill-to-cancel-alexander-contract-unconstitutional/
223.	http://bangordailynews.com/2014/05/13/politics/despitepaying-welfare-consultant-more-than-500000-maine-hasreceived-only-one-section-of-5-part-study/
224.	http://www.scribd.com/doc/224395686/Alexander-Group-Baseline-Welfare-Analysis-ME
225.	http://bangordailynews.com/2014/05/21/opinion/best-ideasfrom-lepages-welfare-consultant-appears-to-be-plagiarism/
226.	https://docs.google.com/file/d/0B3PYp5sROj_1REVhSnlpR3B2M2xrYXlPbC1kYVFQVjduM19N/edit?ref=inline

227.	http://thewaterproject.org/bottled_water_resource_usage

247.	http://www.citizenactionwi.org/wedc_report

228.	See Fryeburg Water Company v. Town of Fryeburg for the
early history of the Fryeburg Water Co.-Poland Spring
cooperation: http://www.courts.maine.gov/opinions_orders/
opinions/2006_documents%20/06me31fr.htm

248.	http://host.madison.com/news/local/govt-and-politics/
wedc-board-ok-d-ashley-furniture-getting-million-tax-credit/article_6fe5690f-64d0-5829-bc51-3dc59533abe9.html#ixzz3ChKsFE1s

229.	As opposed to sustainable water use, such as in family
farming where there is a balance between water entering the
aquifer and water being removed, tapping water for profit
disrupts the balance with possible disastrous consequences.

249.	http://www.goodjobsfirst.org/sites/default/files/docs/pdf/
scandalsnotjobs.pdf, p. 39.

230.	For a 2004–2006 timeline of the Fryeburg’s battle against
Poland Spring exploitation, see http://defendingwater.net/
blog/2006/11/timeline-of-poland-spring-in-fryeburg-beforenov-06/

251.	http://seekingalpha.com/article/2403625-maximus-mmsceo-rich-montoni-on-f3q-2014-results-earnings-call-transcript

231.	http://www.maine.gov/dacf/mgs/explore/water/regs/bergoffen.pdf
232.	A bill that would have introduced “an Excise Tax on the Extraction of Water for Bottling” was introduced in the Maine
legislature in 2009, but did not pass. http://www.mainelegislature.org/legis/bills/bills_124th/billpdfs/HP019101.pdf
233.	http://www.portlanddailysun.me/index.php/newsx/local-news/9564-fryeburg-residents-protest-proposed-nestle-waters-contract
234.	https://www.change.org/petitions/poland-spring-and-nestleit-s-our-water-stop-bullying-my-community
235.	https://www.youtube.com/watch?v=WqfDU_yYi8o
236.	Aggregate reports from: http://www.maine.gov/ethics/disclosure/lobbyists.htm
237.	http://www.pressherald.com/2013/09/01/for-regulators-andnestle-waters-conflict-by-the-gallon_2013-09-01/
238.	http://www.pressherald.com/2013/10/15/maine_s_puc_
chairman_recuses_himself_in_fryeburg_nestle_waters_case/
239.	https://s3.amazonaws.com/s3.documentcloud.org/documents/1183436/gov-letter-to-littell-may-13.pdf
240.	http://host.madison.com/news/local/govt-and-politics/readgov-walker-s-state-of-the-state-address-as/article_6a42ad282e5e-11e0-9f9e-001cc4c03286.html#ixzz3B2Pdt1tI
241.	http://walker.wi.gov/departments/wisconsin-economic-development-corporation
242.	http://inwisconsin.com/content/uploads/2013/02/2011Draft-Ops-Plan.pdf
243.	http://inwisconsin.com/content/uploads/2013/02/2012-Annual-Report.pdf
244.	http://inwisconsin.com/content/uploads/2013/07/FY13_Annual-Report.pdf
245.	http://www.onewisconsinnow.org/files/WisForWEDC.pdf,
p. 5.
246.	http://www.wkow.com/story/25977283/2014/07/09/
wedc-award-recipients-outsourced-wisconsin-jobs-to-foreign-countries

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250.	http://www.politifact.com/wisconsin/promises/walk-o-meter/promise/526/create-250000-new-jobs/

252.	http://legis.wisconsin.gov/lab/reports/maximus.pdf
253.	http://dcf.wisconsin.gov/w2/wisworks.htm
254.	http://www.wpri.org/WPRI-Files/Special-Reports/Reports-Documents/Vol20no31.pdf
255.	http://www.jsonline.com/news/health/consultants-advicecould-cost-state-tens-of-millions-b99129639z1-229986111.
html
256.	https://oig.hhs.gov/oas/reports/region5/50700036.pdf
257.	Aggregated figures from 2003 to 2010. From 2003 to the
most recent disclosure report in 2014, Maximus has spent
$185,000 on lobbying.
258.	https://lobbying.wi.gov/Who/PrincipalInformation/2013REG/Information/5742?tab=Profile
259.	http://investor.maximus.com/press-release/contracts-andawards/maximus-awarded-21-million-child-welfare-contract-rebid-wisconsin
260.	Federal law mandates that eligibility must be (re-)checked
annually. http://www2.illinois.gov/hfs/SiteCollectionDocuments/EEVClientFAQ.pdf
261.	http://www2.illinois.gov/hfs/SiteCollectionDocuments/IMRPReport.pdf
262.	http://www.afscme31.org/news/arbitrators-order-will-end-wasteful-outsourcing-return-medicaid-oversight-to-state-government
263.	https://www.facebook.com/pages/Milwaukee-Wisconsin-Works-by-MAXIMUS/172415986123194?sk=a
pp_190322544333196
264.	http://beta.followthemoney.org/show-me?s=WI&d-eid=4064#[{1|gro=c-t-id
265.	https://s3.amazonaws.com/s3.documentcloud.org/documents/1303363/r-g-a.pdf
266.	https://twitter.com/MilW2Central/status/499694534901907457

 

 

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