Diligence required to avoid getting a raw deal


Leonard Gilroy was right to point out that outsourcing requires “due diligence and accountability” (“Privatization a solution for government budget woes?” Daily Sun News, November 14.)

Unfortunately, this rarely happens. Instead, we see contracts that take control of services away from taxpayers and give them to Wall Street banks and foreign investors with little to no transparency, accountability or oversight. One such case is the catastrophic “deal”, mentioned by Mr. Gilroy, that sold Illinois’ lottery to a European gaming firm and has resulted in revenue shortfalls, questionable auditing and insufficient marketing.

Mr. Gilroy pointed to Sandy Springs, Ga., where the average annual family income is nearly $170,000, as an example of a privatized city working well. But this model does not work absent an affluent tax base without a need for services like public schools, health departments and emergency services.

Mr. Gilroy didn’t appear to mention Maywood, Calif., where privatizing the entire city has resulted in widespread scandal, including missing records, lack of open meetings, loss of accountability of funds and property, inability to operate on a budget and a decline in basic city services.

Outsourcing can only work if rigorous accountability, transparency and oversight measures are put into place. But when a company offers to do something cheaper while still padding its own bottom line, as Mr. Gilroy notes, corners must be cut and fees increase.

Governments must be diligent in ensuring that taxpayers aren’t getting a raw deal when we hand over control to for-profit corporations.

/s/ Donald Cohen, Executive Director, In the Public Interest, Washington D.C.

Commenting has been disabled for this item.