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Home > Publications > Quill > Government outsourcing leads to cloaked figures


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Friday, December 1, 2006
Government outsourcing leads to cloaked figures

Commentary by Joel Campbell

Mitch Pearlman, the longtime head of the Connecticut Freedom of Information Commission, once likened government privatization to the Klingon Empire’s “cloaking device,” which hides spacecraft in the sci-fi TV series “Star Trek.”

To be sure, the Klingon fleet is growing, journalists and the public should be careful as government cloaks services and budgets in privatized deal-making.

The list of services government privatizes is long. Outsourced deals include toll roads, golf courses, swimming pools, water and sewer projects, commuter rails, school choice programs, prisons, foster care services, pension funds, insurance funds, police and fire services, parking meters, food service, airports, school buses and printing services.

A few examples of privatization trends:

* In what is being called the largest highway privatization deal in U.S. history, and in a transaction that’s already raising the ire of many Americans, the Indiana government approved a controversial deal April 13, agreeing to lease the 157-mile Indiana Toll Road for 75 years to Spanish-Australian consortium Cintra-Macquarie for $3.8 million. It remains to be seen how the public will have scrutiny over the project.

* Several other states also are getting into the road privatization game. For example, Utah legislators passed a bill to help fund $16.5 billion in needed road projects. It allows the Utah Department of Transportation to partner with private firms to build and operate toll roads in return for cash to fix roads.

* On a local government level, The Dallas Morning News used school district records to show that Dallas schools spent more by outsourcing copying and printing services to Kinko’s. Instead of slashing printing expenses by the promised 21 percent, Dallas schools quadrupled copying expenses. The contract also requires schools to use Kinko’s equipment, thus hundreds of printers the district already owns sit in warehouses. Without access to district records about this outsourced service, the public may still be in the dark about cost overruns.

If a government outsources services, journalists should check out what’s promised against what’s delivered. But that’s becoming harder as expenditures and reporting slip from public view. When government outsources services, private providers don’t have to comply with open records and open meetings rules. At the same time, quasi-public groups that receive government funding, raise funds or develop policy may also claim exemption from access laws.

At the very least, open government advocates should demand that private companies performing government-like service be subject to access laws through contracts. But even then, contractual obligations are easily broken. More effective are statutes requiring outsourced services to be subject to open records and open meetings laws.

In 2001, the Connecticut General Assembly enacted a law that allows public view of records of private companies providing a government function in contracts of excess of $2.5 million. Contracts must stipulate that companies hand over records about the government function to the public agency making the contract, and then those records are subject to the state’s FOIA.

In some states, access advocates are waging battle over private contracts in the courts. In 2005, the Iowa Supreme Court ruled that the financial records of the quasi-private University of Iowa Foundation are subject to state records laws because the government may not outsource its functions to “secret its doings from the public.” The University of Iowa contracted with the foundation to manage fundraising operations. Although titled an “independent contractor,” the foundation manages $234 million in university money.

In October, Maryland’s highest court heard whether Baltimore’s city economic development agency’s closed-door shenanigans can continue. Baltimore Development Corp. managers said the “quasi-public” organization is exempt from access laws and that working outside public view is important to its success.

Property owners say the organization should comply with sunshine laws because the mayor chooses the board and its coffers are filled from city budgets, according to the Boston Globe.

Comments from Court of Appeals judges bode well for the case’s outcome. The Globe reported Judge Dale R. Cathell saying: “I’ve always heard that if it looks like a duck and quacks like a duck, it’s a duck. This has a lot of quack to it.”

Advocates need to educate more officials to understand the issue like Cathell. And at the same time, advocates should continue pounding on the statehouse door seeking laws that keep the Klingons from turning on their cloaking devices.



A former newspaper reporter and editor, Joel Campbell is an assistant professor in the Department of Communications at Brigham Young University. He serves as SPJ's FOI committee chairman. E-mail him at joelcampbell@byu.edu.

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