Thursday, November 4th, 2010
My latest post is up over at New Geography. It is called “The Privatization-Industrial Complex.”
This piece discusses the structural conflicts of interest that exist among the various professional advisors and financiers that help cities with privatization transactions. While I’m sure almost all of them are both technically competent and very ethical, the fact remains that these companies have every incentive to promote privatization because it is how they make their money. With long term, high dollar value asset sales and leases this is particularly critical, since most cities have little in-house or even in-town expertise in these types of complex transactions, and thus are at the mercy of what their advisors tell them.
Cities need to be extra-cautious and establish a robust process to protect the public interest in these transactions.