Running America Like a Business: Burning It down for the Insurance Money

Case in point, Pittsburgh’s increasingly privatized water system, which is now also increasingly lead tainted:

“The government should be run like a great American company,” Jared Kushner, Trump’s son-in-law and senior adviser (who is also an alleged slumlord and the future broker of peace in the Middle East) told The Washington Post last March. “Our hope is that we can achieves successes and efficiencies for our customers, who are the citizens.” President Trump’s administration touts private enterprise as the solution to any and all challenges faced by public projects—from budget waste to bureaucratic delays to low test scores, the market can fix it all.


Yet governments, local and federal, frequently look to the private sector to solve their problems. And it’s no wonder: They need help. The American Society of Civil Engineers gave the entire country a D+ on its 2017 infrastructure report card. “From the crumbling bridges of California to the overflowing sewage drains of Houston and the rusting railroad tracks in the Northeast Corridor,” reads a 2016 piece in The New Yorker, “decaying infrastructure is all around us.”

Pittsburgh, in an attempt to deal with entrenched infrastructure problems, turned to the private sector in 2012 when it partnered with the French management firm Veolia North America, the same water-management company that would fail to disclose Flint’s lead-contamination problem in 2015. Alongside aging infrastructure that produced frequent water-main breaks, flush and boil advisories, and wildly incorrect billing statements, PWSA was in massive debt. Veolia promised to streamline the public utility—in fact, its Peer Performance Solutions model, which embeds private-sector consultants with public-sector employees, won the company an award from the National Council for Public-Private Partnerships in 2014, a little more than a year after it began partnering with PWSA. The organization lauded Veolia for identifying $2.3 million in new PWSA revenue and $3 million more in operating savings, a move incentivized by their contract that stipulated the company could keep 40 percent of every dollar it saved the city. The Pittsburgh Post-Gazette published a glowing account of PWSA’s partnership with Veolia, despite reports that it laid off 23 employees, many of whom were longtime employees with critical institutional knowledge. The private sector had seemingly done its job, weeding out inefficiencies and saving the authority millions.

But this August, a consulting group hired to assess the organization’s current state announced in a public meeting that PWSA was “a failed organization atop a dangerous and crumbling structure” with “an aging system in demonstrably worse condition than any water utility of its size in the country.” Not only that, water tests showed that since the partnership began, Pittsburgh’s water had been tainted with dangerously high levels of lead.


PWSA, like community water systems across the country, had been dealing with the challenges of operating aging infrastructure long before the public-private partnership. And these issues were only complicated further by poor management—the authority was infamous for its high rates and billing mistakes that verged on the absurd. But at least the water didn’t boast dangerously high rates of lead.

In the summer of 2016, when Pittsburgh’s water was tested for the first time since Veolia began instituting changes, the resulting lead levels exceeded the federal limit. Before Veolia, the water authority had long supplemented its water with soda ash, a substance very similar to baking soda that lines the inside of pipes to prevent corrosion. But under Veolia’s management, it switched to caustic soda—which, while approved for use, is generally acknowledged as an inferior, cheaper, means of corrosion control. The switch to caustic soda stripped the inside of PWSA’s pipes, removing the layer of minerals previously deposited by soda ash, helping leach lead into the city’s drinking water.

The mayor and the City of Pittsburgh say they were never notified of the change. The state Department of Environmental Protection demanded immediate testing when notified PWSA had switched back to soda ash and chastised PWSA for making unapproved modifications to the water-treatment process. Veolia says it had no part in the decision, arguing the PWSA board approved the switch—a board made up of half Veolia executives and half members of PWSA’s Board of Directors. And according to The Guardian, “Under Veolia’s management, PWSA’s new executive director, James Good, a longtime Veolia employee and former private water lobbyist, became the second-highest paid public employee in the region. He earned $240,000 a year with generous benefits.”

The Public-Private Partnership (PPP) and its British cousin, the QUANGO (Quasi-Autonomous Non-Governmental Organization) have not proved to be successes.

It’s not surprising.  When you juxtapose taxpayer money with a lack of accountability, incompetence and corruption are what you are paying for.

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