Difference between revisions of "Portal:Outsourcing America Exposed/Privatizers and Profiteers"

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===MAXIMUS===
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'''[[MAXIMUS, Inc.]]''', based in Reston, Virginia, is a publicly-traded ([https://www.google.com/finance?q=NYSE%3AMMS&ei=AA74UeCwD4K9qQH3FA NYSE:MMS]) for-profit corporation that receives government contracts to provide "business process services" to government health and human services agencies in the United States, Australia, Canada, the United Kingdom, and Saudi Arabia. The company focuses primarily on operating government-sponsored programs for vulnerable populations, such as Children’s Health Insurance Program (CHIP), Medicaid, health insurance exchanges and other health care reform initiatives under the Affordable Care Act, Medicare, welfare-to-work, and child support services.<ref name="10K2012">MAXIMUS, Inc., [http://investor.maximus.com/report/annual/2012-annual-report 2012 Annual Report/Form 10-K], November 16, 2012</ref>
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The outsourcing of health and human services function to private for-profit firms raises significant concerns. According to non-profit research group In the Public Interest, a comprehensive resource center on privatization and responsible contracting, "many children and adults rely on government-provided health and human services. The ability of these programs to deliver services efficiently and appropriately often is a matter of life and death. Numerous state and local governmental entities are finding that turning over these programs to private contractors not only fails to achieve projected cost savings but also decreases access to these important services, hurting many vulnerable families. In many cases, the service quality declines dramatically and many sick or at-risk people are left with substandard care."<ref>In the Public Interest, [http://www.inthepublicinterest.org/sector/health-and-human-services Privatization by Sector: Health and Human Services], organizational website, accessed August 2013</ref>
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[[MAXIMUS, Inc.|For more, see the full corporate rap sheet on the outsourcer Maximus, Inc. here.]]
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===Affiliated Computer Services===
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'''[[Affiliated Computer Services, Inc.]]''' (ACS), is a private firm that specializes in the privatization of government administrative services for some of the nation's most vulnerable citizens. Since 2000, it has been a subsidiary of the publicly-traded [[Xerox Corporation]] ([https://www.google.com/finance?q=Affiliated+Computer+Services%2C+Inc.&ei=b8T_UYiINMarqAGbIw NYSE:XRX])
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The services ACS markets include processing Medicaid claims, managing the electronic toll collection system E-ZPass, servicing student loans, processing child support payments, managing electronic payment card programs (such as Temporary Aid to Needy Families, Unemployment Insurance, Social Security Insurance), and processing parking tickets.<ref name="gov'tglance">Xerox Corporation/ACS Inc., [http://www.acs-inc.com/uploadedfiles/resource_library/public_sector/case_studies/ov_acs%20gs%20at%20a%20glance.pdf Government at a Glance], corporate website, accessed August 2013.</ref> ACS obtains contracts to perform functions as administration, including health care claims processing; finance and accounting; human resources; payment processing; sales, marketing, and customer care call centers; and supply chain management in both the public and private sector.<ref name="hoovers"/> As of August 2013, ACS has over 74,000 employees.<ref name="hoovers">[http://www.hoovers.com/company-information/cs/company-report.Affiliated_Computer_Services_Inc.6c86db66e79c16cb.html Company Report: Affiliated Computer Services, Inc.], ''Hoovers'' credit report, accessed August 2013.</ref> Its parent company, Xerox, grossed $22.39 billion in revenues for the fiscal year 2012, with nearly $1.2 billion in total profits.<ref name="financials">Xerox Corporation, [http://www.xerox.com/about-xerox/annual-report-2012/financial-performance/enus.html 2012 Annual Report Financial Highlights], corporate website, accessed August 2013.</ref>
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ACS has come under fire for siphoning off excessive fees from recipients of Temporary Assistance for Needy Families, the mismanagement of services from parking meters to Medicaid payment systems, and the failure to complete major multimillion dollar contracts.
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[[Affiliated Computer Services, Inc.|For more, see the full corporate rap sheet on the outsourcer Affiliated Computer Services, Inc. here.]]
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==K12 Inc.==
 
==K12 Inc.==
  

Revision as of 22:44, 15 October 2013

MAXIMUS

MAXIMUS, Inc., based in Reston, Virginia, is a publicly-traded (NYSE:MMS) for-profit corporation that receives government contracts to provide "business process services" to government health and human services agencies in the United States, Australia, Canada, the United Kingdom, and Saudi Arabia. The company focuses primarily on operating government-sponsored programs for vulnerable populations, such as Children’s Health Insurance Program (CHIP), Medicaid, health insurance exchanges and other health care reform initiatives under the Affordable Care Act, Medicare, welfare-to-work, and child support services.[1] The outsourcing of health and human services function to private for-profit firms raises significant concerns. According to non-profit research group In the Public Interest, a comprehensive resource center on privatization and responsible contracting, "many children and adults rely on government-provided health and human services. The ability of these programs to deliver services efficiently and appropriately often is a matter of life and death. Numerous state and local governmental entities are finding that turning over these programs to private contractors not only fails to achieve projected cost savings but also decreases access to these important services, hurting many vulnerable families. In many cases, the service quality declines dramatically and many sick or at-risk people are left with substandard care."[2]

For more, see the full corporate rap sheet on the outsourcer Maximus, Inc. here.

Affiliated Computer Services

Affiliated Computer Services, Inc. (ACS), is a private firm that specializes in the privatization of government administrative services for some of the nation's most vulnerable citizens. Since 2000, it has been a subsidiary of the publicly-traded Xerox Corporation (NYSE:XRX)

The services ACS markets include processing Medicaid claims, managing the electronic toll collection system E-ZPass, servicing student loans, processing child support payments, managing electronic payment card programs (such as Temporary Aid to Needy Families, Unemployment Insurance, Social Security Insurance), and processing parking tickets.[3] ACS obtains contracts to perform functions as administration, including health care claims processing; finance and accounting; human resources; payment processing; sales, marketing, and customer care call centers; and supply chain management in both the public and private sector.[4] As of August 2013, ACS has over 74,000 employees.[4] Its parent company, Xerox, grossed $22.39 billion in revenues for the fiscal year 2012, with nearly $1.2 billion in total profits.[5]

ACS has come under fire for siphoning off excessive fees from recipients of Temporary Assistance for Needy Families, the mismanagement of services from parking meters to Medicaid payment systems, and the failure to complete major multimillion dollar contracts.

For more, see the full corporate rap sheet on the outsourcer Affiliated Computer Services, Inc. here.

K12 Inc.

K12 Inc. was founded by former Goldman Sachs executive Ron Packard and former United States Secretary of Education and right-wing talk show host William Bennett in 1999.[6][7] Packard was able to start K12 Inc. with $10 million from convicted junk-bond king Michael Milken and $30 million more from other Wall Street investors.[8][9] For more on this, read the PRWatch investigation: "From Junk Bonds to Junk Schools: Cyber Schools Fleece Taxpayers for Phantom Students and Failing Grades", October 2013.

K12 Inc. on its own and as a member of the American Legislative Exchange Council (ALEC), has pushed a national agenda to replace bricks and mortar classrooms with computers and replace actual teachers with "virtual" teachers. K12 Inc. operated 58 full-time virtual schools and enrolled close to 77,000 students in the 2010-2011 school year, according to a May 2013 report by the National Education Policy Center (NEPC, a research organization at the University of Colorado at Boulder).[10] Many have questioned the company's extraordinary revenue and profit levels, largely generated at taxpayers' expense.[11] [12]

Although K12 Inc. was born on Wall Street, some on Wall Street have turned against the model. As of September 2013, hedge fund manager Whitney Tilson announced he was shorting K12 Inc. stock, effectively betting that the company would fail with an unsustainable education model.[13][14] Tilson said in a September 2013 presentation document that although average revenues per student are on the rise and the concept of online education has "strong political support, especially among Republicans" as well as "enormous buzz," "K12's aggressive student recruitment has led to dismal academic results by students and sky-high dropout rates, in some cases more than 50% annually" and "there have been so many regulatory issues and accusations of malfeasance that I'm convinced the problems are endemic."[15]

The efficacy of the model has also been questioned by the company's shareholders in a lawsuit alleging that the firm violated securities law by making false statements to investors about students' performance on standardized tests and boosting its enrollment and revenues through "deceptive recruiting," according to the Washington Post (see below for more).[16]

For more, see the full corporate rap sheet on the outsourcer K12 Inc. here.

Connections Academy

Connections Academy is a division of Connections Education, LLC, which is owned by the UK-based, publicly-traded international media conglomerate Pearson PLC (LSE:PSON, NYSE:PSO).

The company's website says it provides "free" services since it does not charge students, but the services are far from free as they divert taxpayer dollars from the public school system to a private for-profit firm, Connections Education, that made an estimated $190 million in revenue in 2011.[12]

Connections Academy contracts with public school districts and charter schools to provide online classes for K-12 students.[17] Connections Academy had 21 schools and more than 27,000 students in the 2010-11 school year.[10] But some of those schools are failing. In September 2013, Politico reported that, "Ohio’s six biggest cyber schools all got Fs on their state progress reports, meaning students learned nowhere near a year’s worth of material in a year of studying online." Ohio Connections Academy received $19.2 million in taxpayer funds for 3,123 students, but those students are failing to meet adequate yearly progress by large margins (-11.3 in reading, -15.7 in math, -17.2 overall.)[18]

Connections Academy has ties to the American Legislative Exchange Council (ALEC) and other organizations promoting a for-profit educational model from which it stands to benefit financially. Both on its own and as a member of ALEC, Connections Academy has pushed a national agenda to replace brick and mortar classrooms with computers and replace actual teachers with "virtual" teachers. Many have questioned the company's extraordinary revenues, generated at taxpayers' expense.[19]

For many years, there was simply no data on virtual school performance. In 2012-13, state data became available indicating poor student achievement, as well as high student turnover, high student-teacher radios, uncertified teachers in some states (such as Florida),[20] and a funding formula that often gives companies extended periods of public funds for a child when the child may only stay at the cyber school for a brief period of time.[10] This new information has led some educators to call for a moratorium on the growth of full-time charter schools until policy-makers can assess the reasons for their significant failure to educate children.[21]

For more, see the full corporate rap sheet on the outsourcer Connections Academy here.

Sodexo

Sodexo is a multinational company based in France that provides food services to schools, college campuses, the U.S. military, and other government entities across the United States. With about $8.8 billion in annual revenues from operations in North America,[22] Sodexo is a primary driver of outsourcing of food services in America.

But Sodexo has taken the low road to profitability.[23]

Sodexo Group is the largest food services and facilities management company in the world, as of 2013.[24] Sodexo contracts to provide food services to private corporations, government agencies, schools and universities, military bases, hospitals, clinics, senior residential facilities, and correctional facilities, and is a primary driver of the privatization and outsourcing of these services.[25][26]

In 2010, Sodexo was caught fomenting a race to the bottom in food service, by choosing food suppliers based not on quality but based on which supplier could give them the highest cash rebate for the contract.[27]

Sodexo's unethical business practices ensure that low quality foods are the norm.

For more, see the full corporate rap sheet on the outsourcer Sodexo here.

Corrections Corporation of America

Corrections Corporation of America (CCA) is the largest owner of for-profit prisons and immigration detention facilities in the United States.[28] It is publicly traded (NYSE: CXW). In 2013, CCA was converted into a real estate investment trust (REIT), which will help the company avoid tens of millions of dollars in corporate taxes.[29][30] CCA's revenue in 2012 exceeded $1.7 billion, and it had profits of $156.8 million, 100 percent of which came from taxpayers via government contracts.[28]

Since its founding in 1983, CCA has profited from federal and state policies that have led to a dramatic rise in incarceration and detention in the United States -- a rise of 500 percent over the past thirty years.[31][32][33]

The company has become a multi-billion-dollar corporation that has been strongly criticized for many aspects of its operations.

For more, see the full corporate rap sheet on CCA here.

GEO Group

The GEO Group, Inc. (GEO), formerly known as Wackenhut Corrections Corporation, "is the world's leading provider of correctional, detention, and community reentry services with 95 facilities, approximately 72,000 beds, and 18,000 employees around the globe," says the corporate website.[34] It is the second-largest for-profit prison operator in the United States, behind CCA.

Since its founding nearly 30 years ago, GEO Group has profited from the same policies and dramatic rise in incarceration and detention in the United States as CCA has.[35][36][37] Although it claims that it has not lobbied for bills that extend or increase sentences for prisoners, for many years GEO Group participated in the task force of the American Legislative Exchange Council (ALEC) that pushed bills that lengthened time in prison, such as so-called “truth-in-sentencing” and “three strikes” legislation, as models for states to adopt across the nation.

GEO Group is now a multi-billion-dollar corporation whose for-profit prison operations have become increasingly controversial.

For more, see the full corporate rap sheet on GEO Group here.

  1. ↑ MAXIMUS, Inc., 2012 Annual Report/Form 10-K, November 16, 2012
  2. ↑ In the Public Interest, Privatization by Sector: Health and Human Services, organizational website, accessed August 2013
  3. ↑ Xerox Corporation/ACS Inc., Government at a Glance, corporate website, accessed August 2013.
  4. ↑ 4.0 4.1 Company Report: Affiliated Computer Services, Inc., Hoovers credit report, accessed August 2013.
  5. ↑ Xerox Corporation, 2012 Annual Report Financial Highlights, corporate website, accessed August 2013.
  6. ↑ Lisa Graves, Taxpayer Enriched Companies Back Jeb Bush's Foundation for Excellence in Education, Its Buddy ALEC, and Their 'Reforms', PRWatch, November 28, 2012.
  7. ↑ K12 Inc., S-1 Registration Statement, corporate SEC filing, July 27, 2007.
  8. ↑ David K. Randall, Virtual Schools, Real Businesses, Forbes, July 24, 2008.
  9. ↑ Daniel Golden, Former Secretary of Education Plans School on Internet (sub. req'd., excerpted here), Wall Street Journal, December 28, 2000.
  10. ↑ 10.0 10.1 10.2 National Education Policy Center, Virtual Schools in the U.S. 2013: Politics, Performance, Policy, and Research Evidence, organizational report, Alex Molnar, ed., May 2013.
  11. ↑ K12 Inc., 2013 Annual Report/Form 10-K, corporate annual report filed with the SEC, August 29, 2013.
  12. ↑ 12.0 12.1 Stephanie Saul, Profits and Questions at Online Charter Schools, New York Times, December 12, 2011.
  13. ↑ Victor Reklaitis, Tilson: Biggest Short Is Ed-tech Firm K12 Inc., MarketWatch Pulse, September 17, 2013.
  14. ↑ Whitney Tilson, An Analysis Of K12 And Why It Is My Largest Short Position, Seeking Alpha, September 22, 2013.
  15. ↑ Whitney Tilson, An Analysis of K12 and Why it is my Largest Short Position, investment presentation at Value Investing Congress in New York, September 17, 2013.
  16. ↑ Emma Brown, Shareholder lawsuit accuses K12 Inc. of misleading investors, Washington Post, January 31, 2012.
  17. ↑ Connections Academy About Connections Academy, a Free Online School, company website, accessed July 2013.
  18. ↑ Politico, Cyber schools flunk, but tax money keeps flowing, September 25, 2013.
  19. ↑ Mary Bottari, ALEC Bills in Wisconsin, PRWatch, July 14, 2011.
  20. ↑ Trevor Aaronson and John O'Connor, Florida Investigates K12, Nation's Largest Online Educator, State Impact (NPR), September 11, 2012.
  21. ↑ National Education Policy Center, A Study of Student Characteristics, School Finance, and School Performance in Schools Operated by K12 Inc., organizational report, July 2012.
  22. ↑ Sodexo USA, About Us, company website, accessed July 30, 2013.
  23. ↑ Sodexo, REGISTRATION DOCUMENT FISCAL 2012, corporate annual report, November 12, 2012.
  24. ↑ S Group, About Us, company website, accessed July 23, 2013.
  25. ↑ Sodexo Group, Sodexo On-site Services, company website, accessed July 23, 2013.
  26. ↑ Sodexo Group, Registration Document Fiscal 2012, company document, accessed July 23, 2013.
  27. ↑ Associated Press, Sodexo to pay $20M for overcharging NY schools, Boston.com, July 21, 2010.
  28. ↑ 28.0 28.1 Corrections Corporation of America, Annual Report/Form 10-K, February 27, 2013.
  29. ↑ Grassroots Leadership, The Dirty Thirty: Nothing to Celebrate About 30 Years of Corrections Corporation of America, organizational report, June 2013.
  30. ↑ In the Public Interest, Corrections Corporation of America, organizational website, accessed August 1, 2013
  31. ↑ Katy Hall, CCA Letters Reveal Private Prison Industry's Tactics, Huffington Post, April 11, 2013.
  32. ↑ The Sentencing Project, Incarceration, organizational website, accessed August 7, 2013.
  33. ↑ The Sentencing Project, Drug Policy, organizational website, accessed August 1, 2013.
  34. ↑ GEO Group, Welcome to The GEO Group, Inc., Company website, Accessed August 6, 2013.
  35. ↑ Katy Hall, CCA Letters Reveal Private Prison Industry's Tactics, Huffington Post, April 11, 2013.
  36. ↑ The Sentencing Project, Incarceration, organizational website, accessed August 7, 2013.
  37. ↑ The Sentencing Project, Drug Policy, organizational website, accessed August 1, 2013.
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