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Privatization Limits Access to Public Information

As private companies buy up projects in the public sector, transparency becomes a thing of the past.

Companies looking to take control of public services are winning government contracts for a wide array of services ranging from state prisons to local water systems to public schools, and often without much public oversight.

Private contractors are circumventing open records and sunshine laws as state and local governments push to privatize public services. For example, for-profit prison contractors are escaping scrutiny about prison conditions, financial information about government services that was once public such as management salaries and employee wage rates becomes “proprietary information” exempt from disclosure and even the names of corporations bidding to take control of public services are kept from the public. In Allentown, Pennsylania, the Mayor refused to release the identities of potential contractors that responded to his proposal to privatize the water system.

A 2012 report by In the Public Interest, demonstrates the real world consequences of privatization on government transparency. Recent examples show that some states are taking steps to strengthen their open records laws, while others are failing to protect public information.

For example:

In both New Jersey and Pennsylvania, the governors’ efforts to privatize the states’ lottery systems have been rushed, top-down approaches occurring outside of the public’s view. In Pennsylvania, Governor Corbett went so far as to award the operations contract to the sole bidder, Camelot Global Services, without full input from the Pennsylvania Gaming Control Board and the General Assembly. Ultimately, the proposal was rejected by the state’s attorney general.

As companies continue to evade transparency laws, demands for transparency are increasing. Recent court rulings across the country have ruled in favor of increased transparency of government contracting.

For example:

The Tennessee Court of Appeals ruled that the for-profit prison giant, Corrections Corporation of America, must make public certain documents that they previously refused to disclose, including reports and audits in which they had been found in violation of their contracts and lawsuit settlements where the company had to pay damages.

The Florida circuit court ruled that Aramark, the company that took control of housekeeping and maintenance services at the Florida State Hospital in Chattahoochee, must divulge information regarding the number of formerly public employees that were offered positions with the company following the privatization effort.

Stronger open records laws and more transparency would render these court cases unnecessary.

Several states are taking action to protect access to information and public input in the contracting process. Virginia recently passed a bill that requires contractors engaging in public-private partnerships for transportation services to make their proposals readily available to the public. New Mexico legislators are advancing legislation that would require large government contractors to disclose their political contributions and post them on the state’s Sunshine Portal.

Federal and state-based open records and sunshine laws are essential accountability protections and help ensure that public services operate in our best interests. The more we privatize, the less we know and the less control we have over our public services. Stronger open records laws are the right step towards maintaining that control.

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