Anyone who has followed this blog knows that I have written on privatization many times. For years I have been a big proponent of privatization, which I believe was about bringing market competition to the delivery of services that previously was provided by government. Unfortunately in recent years, I've come to see the dark side of privatization. Wannabe contractors giving large campaign contributions to elected officials trying to get the inside track. Long contracts handed out where there is no concern by the vendor over competition. No supervision by elected or appointed officials over existing privatization contracts. Campaign contributors winning no bid contracts. Contracts that are actually bid off often come with specs written in such a way as to ensure that only one company can win the bid, usually a bid contributor, wins the bid. (Ask Diana Vice about that one.) The executive revolving door where a top level executive official comes from the private company to head up an agency and then agency gives a contract grants a private company to that agency head's former employer. Example: Mitch Roob and the FSSA privatization.
Indianapolis - Mayor Greg Ballard is looking at privatizing some city services to save money, a move that could ultimately effect hundreds of city employees. His administration recently sent draft letters to three unions alerting them to the possibility.The draft letter reads, "The city has determined that it is in its and the taxpayers' best interest to competitively bid out the work of the following areas: 1) grounds maintenance; 2) forestry; 3) pool/plumbing maintenance; 4) mowing; 5) towing; 6) water maintenance; 7) fleet services: 8) payroll; 9) HVAC; 10) electrical; and 11) procurement."
The city privatization effort raises a number of red flags. First, Mayor Ballard's 2008 campaign report showed the vast majority of his fund-raising came from contractors seeking to do business with the city. Privatizing more services opens up more possibilities for campaign contributions from more companies wanting to do business with the city. Second, you have the pervasive influence of Barnes & Thornburg in the current administration, who represent a number of government contractors. You have already seen Barnes & Thornburg clients, John Bales of Venture Real Estate and Andy Mohr Toyota, winning highly questioned contracts from the city. One small business owner who wanted to do business with the city told me that a very high level official in the Ballard administration told him that if he wanted a contract, he needed to retain Barnes & Thornburg. He was happy with his attorney though and wasn't going to change just in the hopes of getting a city contract.
While privatization in many cases makes sense, the problem is that government has totally bungled the implementation of many privatization efforts. Unfortunately money from contractors (the new form of patronage) has a way of clouding people's good judgment.