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None Dare Call It Privatization
Dispatch from a high-powered conference spelling out a new strategy for raiding the commons
At the Hyatt Lodge Hotel on the McDonald’s corporate campus in Oak Brook, Illinois, June 24, the other wingtip dropped.
It happened at a conference called “It’s Not Privatization: Implementing Partnerships in Illinois”, organized by The National Council for Public-Private Partnerships and the Chicagoland Chamber of Commerce with assistance from the Metropolitan Planning Council .
The conference revealed the corporate sector’s designs on the commons in Illinois, and how they intended to duck the increasingly unpopular label of privatization.
In recent years Chicago has become an epicenter of privatization.
In 2005 Mayor Daley assigned the Skyway Bridge connecting the city to Indiana to a consortium owned by Spanish and Australian companies. That deal got the city $1.83 billion for a 99 year lease. One analysis of the deal shows that the new owners stand to reap between $5 to $15 billion, depending on the traffic volume and how high they jack up the tolls.
In 2009 Mayor Daly gave our parking meters to a group of investors led by MorganStanley, which included the oil-rich sheikdom of Abu Dhabi. Chicago got $1.15 billion for a 75 year lease. The investors will earn in the vicinity of $11.6 billion over the life of the deal. Parking rates have skyrocketed, meters appeared in places that never been been metered before and the hours for paid parking were extended.
In each case, all the major planning bodies, civic watchdog groups and various park and public watchdogs were silent. Many supported these privatization schemes.
In addition to these schemes, Mayor Daley was also a master of tax increment finance districts (TIFs). Chicago has 160 of them and in 2009 they siphoned $519 million in property taxes away from the units of government that rely on them for operation. TIFs are supposed to be used to jump start development in “blighted” communities. But in Chicago they constitute a giant slush fund controlled by the Mayor and a few powerful aldermen. Public dollars from the TIF program have gone to such corporate giants as United Airlines, MillerCoors, Quaker Oats, Willis Insurance and the Chicago Mercantile Exchange. In addition, hundreds of millions of dollars have flowed to private developers with no oversight, accountability or citizen input.
Mayor Daley also hatched Renaissance 2010 plan in 2004 to create 100 new schools outside of the public school system. Two of the creators of the Chicago Small Schools Workshop critique the plan as having “more in common with the erosion of public space, with the ‘ownership society,’ than it does with democratic education.” (Read their analysis here.)
The Skyway, the parking meters, the TIFs, Renaissance 2010– they all constitute the first wingtipped shoe of privatizing our commons in Chicago.
The Other Wingtip Drops
I was among a small group of activists attending the “It’s Not Privatization” conference on the McDonald’s campus, and as the presentations unfolded, I began to see how business, labor and legislators were lining up to assault the commons with the complicity of civic planning groups that are loaded with staff and board members with deep connections to Mayor Daley and the Chicago business community. (You can see the presentations for yourself here.)
The conference was underwritten by 14 major corporations. The Gold Sponsors included Veolia Water. In their own words, “With a workforce of 96,260 in 67 countries and revenue of €12.128 billion in 2010, Veolia Water is the leading global operator of water servicet.” The other Gold Sponsors were Lochner MMM Group (“dedicated to bringing its worldwide public-private venture experience to the U.S. infrastructure market”); Weston Solutions (“integrated environmental, sustainability, property redevelopment, energy, and construction solutions”); and Wight (“one of only a few firms that possess comprehensive design and construction capabilities in-house”).
The conference started with a summary of Illinois House Bill 1091, “The Public Partnership for Transportation Act,” by one of its chief sponsors, Rep. Elaine Nekritz (D-Des Plaines). Basically, this bill allows—for the first time—the building and operation of roads and tollways by private companies in Illinois. (You can listen to Nikritz’s explanation of the bill here)
In the presentations I detected three dominant themes that will frame how these policies will be pitched to the public.
*First – government at all levels of operation is broke, and there is no possibility of raising taxes. The implication is that there is no way for government to build a new Hoover Dam or other long-lasting, large scale or even small-scale project for the public good.
*Second – government is stupid and incapable of innovation and delivering needed services and facilities efficiently and effectively. Big business is offered as the only source of innovation, efficiency and smart operation. (Of course, no mention was made of the global financial melt-down brought on by these same companies and that the public sector – the taxpayers – had to bail them out to the tune of trillions of dollars)
*Third – Because the people of Chicago and Illinois have been burned badly by privatization deals, we will not be hearing that term used in these debates. Instead, we will hear the term “public-private partnerships” applied to these deals involving public assets.
Because people have been burned badly by privatization deals, we will not be hearing that term used. Instead, we will hear the term “public-private partnerships.”
You can hear these arguments unwind in the presentation by the President of the National Council for Public-Private Partnerships, Richard Norment, “The Framework for Public-Private Partnerships vs. Privatization.” Listen to his remarks here
Despite the high-minded rhetoric being unleashed at this conference, privatization is what happens when we transfer control of public assets, infrastructure and services into the private sector, which then operates them for a profit. The public sector is responsible for the creation and care of assets and services that benefit all. Somehow we have arrived a place where the very nature of what is “public” is under attack.
Privatization or public-private partnerships—the bottom line is always the bottom line. Who controls what asset or service and who profits from it? At this conference one could see all the players coming into alignment, testing their talking points and sharing strategies for selling these newly named schemes to the public.
What was also very troubling was the statement from a number of speakers that the privatization of roads in Illinois is only the beginning. One speaker presented a slide listing public water, public hospitals and public schools as candidates for privatization.
It seems that the same legislators, law firms, banks, construction companies and policy minds that brought us the parking meter deal (which many speakers praised from the podium) are now behind privatization on a new and massive scale. Labor unions are backing this trend because they need work for their members in the construction trades, and so long as union labor is used in these projects or a prevailing wage is paid workers, they don’t care what happens after the projects are completed.
The Powers That Be have the money and means to frame these scams to their advantage. They are already re-writing history and calling the parking meter fiasco an unappreciated master stroke that is simply the victim of bad publicity.
No one at this conference revealed the profit margins on these deals. No one talked about the stories of privatization gone sour across America and the world elsewhere. No one asked where the line should be drawn in parceling out public assets, public services and public infrastructure to private investors.
We are going to have get organized to stop the pawning of our public assets to private interests for a song. Defenders of the commons – unite!