January 31, 2018

The Nation: Trump’s infrastructure plan could destroy our nation’s water systems

By Michelle Chen for The Nation.

Privatization and deregulation could damage city water supplies and lead to pollution of our natural environment.

Remember the Trump administration’s infrastructure plan? The one that promised America job-boosting projects for gleaming highways and bridges? Well, so far the Trump-branded New Deal has fallen by the wayside; the job-creation program of year one involved boasting about employment rates that have little to do with his policies, deregulating federal agencies, and saber rattling about trade wars with China. But now he’s poised to follow his monstrous tax cuts with a stimulus plan that will actually fork over more public assets to corporate executives.

The draft outline of the zombie infrastructure program has resurfaced again with a leak to Axios—and confirms what many feared: The White House hopes to privatize areas of government at a discount, opening up more public services to abuse at the hands of corporations. Trump plans to expand private-activity bonds for infrastructure construction, “to benefit the public,” with a definition of “public benefit” that’s more solid-gold toilet than Hoover Dam. Exhibit A is the plan to expand private management of our waterways, including efforts to mitigate pollution and environmental harm that tends to result from the same private-sector control. In other words, laundering public money to help corporate America break stuff and then buy it. There’s a heavy focus on funding privately managed road and bridge projects, and goodies like highway-rest-stop commercialization and encouraging private leasing of infrastructure.

But Trump’s agenda goes well beyond the “shovel ready” bridge-and-tunnel infrastructure initiatives of the past. The resources of a federal environmental stewardship program that was previously off-limits to corporations will also be handed over: The Clean Water State Revolving Fund (CWSRF) will be open for business for private firms to both manage and repair water infrastructure at taxpayer’s expense. In addition, a credit scheme under the Water Infrastructure Finance and Innovation Act would provide more opportunity to private investors, by eliminating existing requirements that WIFIA funds be used for “Community Water Systems.”

These provisions could open the floodgates to private-financing schemes for critical environmental infrastructure projects, including estuary-conservation programs, wastewater-treatment systems, management of long-term industrial pollution, and energy-efficiency initiatives. (Currently, Drinking Water revolving funds are available for private providers, though lawmakers have sought to also limit funds to community systems).

Taylor Billings of Corporate Accountability warns that funneling CWSRF money into privately owned wastewater systems “would mean turning over even more of our vital public funds,” so that “more money would go toward systems that are run in the interest of profit (i.e., run by corporations), not in the interest of people.” The law seems written by industry—in fact, Billings pointed out that the National Association of Water Companies spent $125,000 in the first quarter of 2017 lobbying on state water-fund issues.

According to Corporate Accountability, “cities will be in a position where they must prop up their crumbling water infrastructure as a money-making scheme in order to compete for much-needed funding.” Privateers have long battled for control over state water infrastructure; the industry has actually seen massive backlash against such privatization projects in many cities in recent years. Trump’s plan would link water systems to his pro-business agenda: the evaluation plan for new projects focuses “70 percent of the selection criteria…on the applicant’s ability to show it will get new, non-federal revenue,” with just five percent “based on actual economic and social benefit.” With a cost split that literally ensures business profit exceeds taxpayer benefit, the 20 percent share that would be picked up by cities and states would become dependent on Washington’s contractor of choice.

Trump’s pro-privatization, anti-regulatory ethos could expand private involvement in cleaning up after failed past public-private contracts, including those that precipitated Flint’s water crisis. The lead-poisoned city remains devastated by long-term public-health damage and ongoing uncertainty around the future remediation plans. With fresh reports of lead-contaminated schools in Flint, and ongoing litigation against private contractors, there’s no sign that the “solution” won’t bring more of the same toxic privatization. The city even explored new contracting possibilities with the French firm Veolia, one of the original contractors that failed in an oversight audit. Veolia is known around the world for privatization projects marred by environmental hazards and collapsed financing schemes.

Of course it’s critical that industry be held accountable for failures, but using public funds to support fixes for those privatization failures threatens a moral hazard and systematic violation of the “polluter pay” principle that should drive environmental and health protections. On top of bringing further industry-driven environmental and health risks, privatization paves the way for labor and consumer abuses in public services.

Expanding corporatization of water ties into other plans to encourage private contracting in constructing new inland-waterway projects and “deauthoriz[ing] certain federal civil works projects.” Trump’s recent appointment of a coal baron to help run the nation’s premier public water utility, the Tennessee Valley Authority, signals that both cleaning up past mistakes and building up new systems will be for the benefit of corporate shareholders and not residents or the environment.

There’s nothing wrong with helping corporations clean our water systems, if not solely for the same profit motives that drive privatization and deregulation in the first place. Once the federal government’s main allegiance is to multinationals, it shifts its responsibility and oversight to the free market. Then protecting the infrastructure that supports both the public and private sector, and protects the health and safety of waterways means chasing corporate money to fill gaps left by massive government disinvestment. Within those funding gaps lies the threat of undermining wages and unions for civil-service workers, dismantling safety projections, and fueling inequitable rates. Corporate Accountability has documented how a partnership with Veolia in Gladewater, Texas, saw numerous violations of federal clean-water standards. In another privatization failure, brown water spewed from United Water–managed pipes in Atlanta. A collapsed Veolia contract in Indianapolis triggered a lawsuit charging massive over-billing for about a quarter-million residents, workforce wage cuts, and federal investigation into a scandal over “falsified water quality reports.”

Indiana’s privatization crusade is directly tied to Trump, in fact; as reported in a Newsweek investigation last year, former Indiana governors Mike Pence and Mitch Daniels were involved in scandal-soaked privatization deals that led to numerous failed and botched plans for construction and toll services on the state’s deteriorating highways. The country’s past experiences with water privatization portend that the administration’s eagerness to flush private investors with federal cash and sell out waterways will turn Trump’s toxic trickle-down economics into a torrent of murky water in our pipelines.


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