Thursday, July 26, 2012

Florida's rush to privatize caused scandal. Surprise.

So says Sarasota County's new administrator, Randall Reid. According to the Herald Tribune,
Reid ... said that as the recession hit, the county laid off staffers with experience managing contracts. At the same time, the county started using more contracts. 
The staffers that were left got little to no training in contract management. 
In this environment, the companies that had contracts could easily boost their bottom lines by proposing change orders that allowed them to do more work under the same contract. Staffers did not object because the work was done, and they did not have to renegotiate the contract.
It appears that privatization in Sarasota led to corruption so blatant as to be almost comical. The Herald Tribune reported,
  • A mowing contract resulted in three-foot weeds on a main thoroughfare.
  • Judges voided a $2.5 million software contract because the county violated its own spending rules.
  • Audits showed employees misused county-issued credit cards.
  • The director of community services was reassigned away from baseball spring-training projects because he helped a friend land a $500,000 construction contract.
  • County project manager Rodney Jones was charged with taking bribes from a company that did $5.1 million in work for Sarasota County without a competitive bid.
  • An investigation led to the resignation or firing of a number of employees, including the county administrator.
Florida has had other privatization scandals, of course. One of our favorites was the public-private, not-for-profit economic development corporation (it sounds like one of those public-private partnerships from which any sane or honest person would flee).

Plunderbund reported,
It didn’t turn out so well for Florida. 
In a 2001 audit, the State’s Comptroller found that the private corporation “treats its top executives to bonuses and lavish travel while making grants to businesses whose officers sit on its boards.”  It also did such a poor tracking of its disbursements that it couldn’t guarantee that the funds that it reported coming from “private business donations” didn’t originate from… aid that the agency had given those companies. 
A report issued by a non-partisan office of the Florida legislature that same year found that the agency’s exaggerated its role in creating jobs particularly in distressed urban and failed to provide adequate economic development services in rural areas.