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"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," the report reads. (Credit: Center for Media and Democracy)

Outsourcing Public Services: Governors Push Privatization, With Disastrous Results

Motivated by profits and ideology, governors across the country are 'attempting to shrink government by selling off the profitable services to private companies,' research group reveals

Deirdre Fulton

Governors across the country have outsourced important public services to private firms with high-powered lobbyists, mostly with disastrous results, according to a report released Wednesday by the Center for Media and Democracy's "Outsourcing America Exposed" project.

"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," reads the report, titled Pay to Prey: Governors Facilitate the Predatory Outsourcing of Public Services (pdf).

Pay to Prey details boondoggles from Pennsylvania, where Governor Tom Corbett "outsourced millions of dollars in state legal contracts to outside law firms (including one that later defended his unconstitutional voter ID bill) that are among his biggest campaign contributors;" Ohio, where Governor John Kasich’s "privatized economic development agency has failed to deliver promised jobs, but is receiving a huge stream of funds from Ohio liquor sales;" and Florida, where Governor Rick Scott "championed initiatives to drug test state employees and welfare recipients, benefiting his drug testing company;" along with those in other four other states.

All the case studies illustrate privatization—of everything from prisons to water services to schools—gone awry.

Some experts estimate that $1 trillion out of the $6 trillion that federal, state, and local governments spend annually are handed over to private contractors, according to the Center. Such outsourcing and privatization has been on the rise since 2010, when "a new breed" of governors was ushered in with the help of corporate-funded legislative and lobbying groups, such as the American Legislative Exchange Council (ALEC). The report notes that such groups, and the governors they support, are motivated not only by profit, but by an ideology that values small government. 

“Governors across the nation seem to be reading out of the ALEC playbook, attempting to shrink government by selling off the profitable services to private companies,” said Lisa Graves, executive director of the Center for Media and Democracy. “While success stories are hard to find, fiascoes are thick on the ground. In state after state, the result has been worse outcomes for the public, scandal, lawsuits, and scorching headlines.”


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