Profiting from Public Dollars: How ALEC and Its Members Promote Privatization of Government Services and Assets
In The Public Interest, Washington, D.C., September 2012. http://www.inthepublicinterest.org/blog/new-report-profiting-public-dollars
This report documents the role of the right-wing American Legislative Exchange Council (ALEC) in state legislative bills to privatize vital public services, with the aim of helping activists fight back.
Using case studies on education, health care, and prisons, the report shows how ALEC produces “model” bills that benefit its member corporations, which pay fees ranging from $7,000 to $25,000 to join. ALEC also acts as matchmaker, creating opportunities for the companies to woo and influence the conservative state lawmakers who are also members and submit the bills for votes back home.
The report walks readers through ALEC’s Virtual Public School model bill from conceptualization to birth. In 2005, representatives from K12 Inc. and Connections Academy–the virtual education industry’s two largest companies–collaborated with state legislators in ALEC on bills allowing states to contract with private companies to offer virtual education as an alternative to public schools. Since then, ALEC members have sponsored this “model bill” in Mississippi, Maine, Tennessee, Massachusetts, Virginia, and Texas. In all of the states but Massachusetts, this bill became law. The virtual education market is projected to grow by 43 percent between 2010 and 2015, and private companies can expect to reap enormous profits if states delegate this service to them. ALEC has already opened opportunities for corporations to capture a large share of this market and promoted other legislation to open schools as target markets for partner industries such as beverages and snack foods.
The report similarly untangles how major health insurance companies are now trying to profit from state Medicaid spending, and ALEC’s involvement in the private prison and detention industry.
In the Public Interest captures the extent to which ALEC has succeeded in its privatization mission, and reminds us that with increased privatization legislation, we could well lose control over public services and weaken our democracy. To ensure private interests do not usurp the public good, the report identifies four questions we should ask when we come across privatization legislation: 1) Does the bill use language from ALEC model legislation? 2) Who introduced or sponsored the bill? 3) What corporations helped draft the legislation? and 4) What interests would benefit or profit from this bill’s passage? Through practical information on ALEC’s internal processes, In the Public Interest equips social justice advocates to push back against its corporate agenda.