Warning: The P3s Are Coming!

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I am a definite outsider when it comes to corporations, so I don’t often get to enter the corporate culture and observe its special littlerituals.

But in May, I got the opportunity at a conference of The Canadian Council on Public-Private Partnerships (C2P3), the front-group for some of the world’s largest corporations who try to make people feel good about privatizing every precious public service we have.

The folks at C2P3 swept into Vancouver in a mood that can only bedescribed as giddy anticipation. They could just taste the profits soonto be made with B.C.’s new Gordon Campbell led anti-government, eager to turn over public services to the private sector.

The Premier’s Deputy Minister Ken Dobell had already declared “the choice is now between either not getting the project done at all or delivering it through a P3."

The conference was a two-day cheerleading session for P3s, and no one was allowed to say a negative word about these corporate giveaways. Journalists at the event were not allowed to ask questions during the sessions - instead reduced to chasing down presenters in the halls amongst the paid-up delegates munching their canapés at the breaks.

There were times when I felt I was at a meeting of the Shriners or some other secret society. The P3 priesthood even makes up its own language, with several promoters talking about the need for the “incentivization” of businesses to get involved, and how to “incent” business and government into embracing P3s.

I, however, remained unincented. I would have liked to ask somequestions of the privateers about their actual record, or, as they likedto say at the conference, their “outputs.” I would have especially liked to ask them about companies repeatedly defrauding governments, like dozens of American health-services corporations. (Many American health-industry players now have their eye on Canadian medicare — there was a whole session on health care.)

In the mid-1990s, health-care fraud by U.S. corporate giants has beenestimated as high as $USD100 billion-dollars annually. Washington actually started catching up with some of these crooks by 1994 — the year that National Medical Enterprises, now Tenet Healthcare Corporation, paid a then-record US$379 million dollars in fines and restitution for fraud in psychiatric services.

In 1997, the mega-giant Tentet agreed to pay $100-million to settle claims that patients were kept in psychiatric hospitals simply to maximize insurance payments. In 1999 alone, the U.S. Justice Department recovered $840-million stolen from the taxpayers through health-care fraud.

Columbia/HCA Health Corporation, America’s largest hospital company, agreed to pay $745-million to settle civil fraud charges. In 2001, Tap Pharmaceuticals agreed to pay $875-million, including a $290-million criminal fine. Schering-Plough Corp. will pay the U.S. Food and Drug Administration (FDA) $500-million.

Lest you think that all that is involved here is a few hundred-billionin tax dollars, think again. People die as a result of these corporatepractices. American nursing-home advocate Ila Swan, testifying before The United States Senate Committee on Aging, stated: “I am still aghast at collecting 26,000 death certificates of nursing-home residents, showing the causes of death from starvation, dehydration, fecal impactions, bedsores and urinary tract infections.”

Are all for-profit contractors providing public services engaged infraud? Of course not. But you don’t need to commit outright fraud to rip off the public. If the private-sector trashing of medicare in the U.S.doesn’t convince you to keep these vultures away from your publicservices then let’s turn to our own backyard and see what P3s have to offer public education in Canada.

In 1994, Nova Scotia committed itself to the most extensive experiment in P3 schools anywhere in Canada. Called “leaseback” arrangements, they are common in the U.S. The government leases the schools from a contractor and then agrees to buy the school (or hospital, or prison) outright at the end of twenty to thirty-five years.

In Nova Scotia, the government contracted the construction of thirtyP3 schools to a local consortium. Within six years, there were so many scandals and improprieties, the whole grand experiment caused a public uproar. The government cancelled all future P3 construction. But by then, the thirty schools — with contracts as long as thirty-five years — were slated to cost the public $CDN32-million more than if they had been built in the traditional manner.

It isn’t just the money. It turned out that corporations, not localpreferences, determined where new schools would be built, usually onland already owned by a member of the consortium. And the consortium preferred to locate in upper-income subdivisions with lower land costs, rather than in urban cores where the schools were actually needed.

You might think if you were leasing the school you wouldn’t have toworry about repairs. Think again. The taxpayer is responsible for theoperating costs, capital improvements and repairs, and technologyupgrading. The private owners were assured of receiving 89 per cent of their costs through leasing charges, and will still own the building and the land when the lease is up. Then the government has to buy the school whether or not it is still needed.

Not sweet enough for you? Still need a little incentivization? The contract exempts the owners and the builders from any legal orfinancial liability for shoddy school construction, or even faultywiring and plumbing — an enormous incentive for using cheaplabour and low-quality materials. And, of course, since the corporationowns the schools, it has the right to use them and all their technologyfor profitable activities after hours, on weekends and during thesummer.

The C2P3 conference hosts didn’t mention the Nova Scotia fiasco, which is a strange given it presented the first Halifax P3 school with its first prize in the “infrastructure” category in 1998. Students and staff in that school were still drinking bottled water in 2001, twelve months after arsenic was found in the school’s well water.

A water-filtration system had been installed, but it wasn’t being used because the school board and the school’s corporate owner couldn’t agree on who was responsible for providing students with clean water.

I suppose we should give C2P3 a break. It’s hard to find a corporation today that isn’t fiddling the books and/or stiffing the public. Case inpoint — Accenture (formerly Andersen Consulting of Enron infamy) is right there at the top of the list of “sponsor members” in C2P3’s welcoming letter to conference delegates.

Among other things, Accenture is known in Ontario for its outrageous cost overruns (from $70-million to $180-million) in its welfare privatization scheme. They paid some project managers $575 an hour.

If Canadians actually buy the argument about P3s providing better andcheaper public services it will only be after a prolonged period ofintensive stupidification. But governments are already there. It doesn’tseem to matter how many P3 disasters — trains in Britain, water inLatin America, prisons and schools in the U.S. — rain down on anunsuspecting public. It’s a matter of faith, not reason.

Accenture has just been handed several divisions of B.C. Hydro to run. Pray for the B.C. taxpayer.

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