A.LOEWENSTEIN ONLINE NEWSLETTER

• Serco and G4S can’t believe their luck in a brave new world
• Has the Left not explained why capitalism isn’t working well?
• Rupert funds things that should raise an eyebrow
• Aussie Jews are desperate to become the best Zionists in the world
• Paper trail of Serco’s detention centre millions raises accountability questions

Serco and G4S can’t believe their luck in a brave new world 01 Nov 2010 Britain’s future is a privatised world of guards managing and monitoring “undesirables”. Australia and much of the world is following suit. Company G4S may have lost a contract to remove asylum seekers from Britain but its employees will inevitably be working elsewhere soon, possibly doing this to people: A Zimbabwean asylum seeker whose deportation from Britain was halted after his wrist was broken while he was being restrained by security guards is to be flown back to Africa tomorrow on a British Airways plane. Khu Mlotshwa, 31, claims he was assaulted by security guards in June when the UK Border Agency first attempted to deport him from Britain. During the struggle on the Virgin Airways flight, Mr Mlotshwa, who was handcuffed and wearing leg locks, alleges he was punched and kicked by guards and had his wrist twisted back. A Home Office investigation has now exonerated the two G4S security officers – even though one of the guards can be heard on CCTV saying that Mr Mlotshwa “put up a good fight”. Earlier this month Jimmy Mubenga, 46, an asylum seeker from Angola, died when he was being deported by G4S guards from the UK. That death is being investigated by Scotland Yard, who have arrested three G4S guards. Mr Mlotshwa now says he is terrified of being forcibly removed from the UK again. “It was a terrible and frightening experience which I fear will be repeated tomorrow,” he told The Independent. “These escorts are evil, they are really evil. They do these things to you and then the whole thing is covered up so that they get away with it.” Meanwhile, another multinational making money from the imprisonment of people, Serco, is forced to take stock (via the Financial Times): Serco has withdrawn a demand for a 2.5 cent “cash rebate” from its leading suppliers and apologised unreservedly to them after the government ordered it to explain its actions. The outsourcing company, which runs prisons, nuclear facilities, schools and ports for the government, had written to its 193 largest suppliers demanding that they make the payments or risk losing future contracts, in an effort to meet the coalition’s request for multimillion-pound savings on procurement contracts. But the decision angered Francis Maude, the Cabinet Office minister in charge of the government’s efficiency drive, who wrote to Serco seeking an explanation of the action. Mr Maude believed he had received an undertaking from Chris Hyman, Serco’s chief executive, that the savings it would put forward would not come from suppliers’ payments. The government wants smaller companies to get a bigger share of government business. Serco said on Monday that it had now told the Cabinet Office that its most recent offer of savings to the government would not result in any of the cost saving programme being passed on to suppliers. The company said in a statement that it had a continuing procurement process with its supply chain partners, which has been underway for more than five years. “More recently we have also been working with the Cabinet Office as part of their efficiency programme, which has involved discussions with our leading suppliers. As a result our plans evolved and we decided not to seek or accept any contributions from our suppliers, who had recently received letters asking for rebates. “As a company that values our relationships with all our supply chain partners, large and small, we deeply regret this action and apologise unreservedly to them for the concern that this has caused. We are now communicating this to our supply chain partners and retracting the letters.” Mr Maude has been pressing the government’s biggest contractors to accept lower margins to help reduce the budget deficit, but to date only a handful have signed agreements to renew existing contracts. Serco has yet to finalise a deal. A letter was leaked to the Sunday Telegraph, which quoted one supplier who received the demand as saying it was “brutal” and “absolutely appalling”. In the letter, Andrew Jenner, Serco’s finance director, said the “cash contribution” was required to meet the Cabinet Office’s demands to cut Whitehall expenditure. He said Mr Hyman had given a “personal commitment” to the Cabinet Office that Serco and its supply chain would provide “total support” to the plan to save £800m from central government procurement this year. The letter said: “I am asking you to offer us a rebate of 2.5 per cent [exclusive of VAT] on Serco’s full-year spend with you for the 2010 calendar year in the form of a credit note. Like the government, we are looking to determine who our real partners are that we can rely upon. Your response will no doubt indicate your commitment to our partnership but will also be something I will seriously consider in our working relationship as Serco continues to grow.”

Has the Left not explained why capitalism isn’t working well? 01 Nov 2010 Peter Beinart writes in the Daily Beast that the DC Rally for Sanity was a failure, and the Left just doesn’t understand why: In his closing monologue, [John] Stewart did acknowledge that Americans have legitimate fears, but the thrust of the event was that Americans would soothe their rattled nerves if only the media and politicians stopped whipping them up. I don’t think that’s true. In the last year or so, the right has found a way of acknowledging Americans’ terror about economic decline. The left has not, and last weekend, Stewart barely tried. In America today, as at past moments in our history, there’s a profound debate underway not just about how to right our economy but about the relationship between capitalism and freedom. Pretending it’s not a real debate is a great way for the left to lose. Maybe it’s not fair to blame Jon Stewart for all this. He’s a comedian, after all. But he’s the left’s closest equivalent to Rush Limbaugh or Glenn Beck. And while they’re busy struggling to recreate the America of William McKinley, he’s acting as if our biggest problem is that people shout at each other on the tube. For a guy as talented as Stewart, that’s insane.

Rupert funds things that should raise an eyebrow 01 Nov 2010 The Murdoch press lacking transparency? Hold the front page: The Fox Business Network focused on what it called “The War on Business” all last week, but on Tuesday its coverage was decidedly more focused — with a series of reports about a California ballot initiative that its parent company, the News Corporation, had spent $1.3 million to defeat. Call it the War on Proposition 24. The News Corporation is one of the many major media companies that have spent more than $1 million each seeking to defeat the proposition, which supporters say would repeal $1.7 billion in corporate tax breaks to help close the state’s budget gap. Executives at media companies, which employ tens of thousands in the entertainment industry, say defeating the proposition is one of their biggest priorities in the midterm elections, and they question how they would continue to operate in the state if taxes go up. In five consecutive hours of live reports on Tuesday, a Fox Business correspondent, Adam Shapiro, was stationed at Cambridge of California, a small furniture manufacturing facility in Gardena. Mr. Shapiro repeatedly said the proposition could drive businesses — specifically small businesses, not media titans — out of California, and he said “332,000 jobs” were “on the line.” Tracy Byrnes, the anchor for one of the reports, expressed the opinion that “the proposition was setting up businesses to be destroyed, quite frankly.” Yet in its expanded coverage of the issue, Fox did not disclose the News Corporation’s donation to a group working to defeat Proposition 24. Nor did Fox report that the small-business man it featured in the news reports was asked to do the interview by the same group, No on 24 — Stop the Jobs Tax. A Fox Business executive said he had not known about the parent company’s donation. Industry observers, however, said the News Corporation’s contribution to the group, and the organization’s role in arranging the interview, raised a potential conflict of interest that warranted disclosure. “There’s a trust between you and your audience, no matter what the medium is,” said Kevin Z. Smith, who holds the ethics chair for the Society of Professional Journalists and is a past president of that organization. “Not disclosing conflicts, to me, severely undermines your credibility.”

Aussie Jews are desperate to become the best Zionists in the world 31 Oct 2010 Australian Jews are overall regarded as being the Diaspora group most closely associated with Israel. Discuss.

Paper trail of Serco’s detention centre millions raises accountability questions 31 Oct 2010 My following article, with journalist Paul Farrell, appears in today’s Crikey: The recent suicide at Villawood Detention Centre in Sydney again confirmed that the situation in Australia’s immigration detention centres has become critical. But what has remained largely unquestioned is the role of Serco, the British multinational that holds the $367 million contract to run detention facilities across the country (alongside a few prisons and a just won contract for a hospital in Western Australia). The company said it was “preparing a report” on the suicide for the Department of Immigration and Citizenship just after the event and most journalists left it at that. But Crikey has taken a closer look at the extent that Serco outsources to other companies. The paper trail shows how the tender process allows private companies to further outsource, limiting the abilities of the Department of Immigration and Citizenship to scrutinise the fulfilment of their contracts.   The Department of Immigration and Citizenship says Serco employs two major subcontractors: MSS Security and Resolve FM. Resolve FM is owned by the Norfolk Group and is a “facilities management” organisation that provides services across a wide range of areas. The Norfolk Group was established in 2004, when it was bought from Tyco International by Hauraki Private Equity No.2, managed by the private equity firm JBWere (NZ). JBWere has given almost $1 million in donations to both the Liberal and Labor parties since 2000. JBWere is also a subsidiary of Goldman Sachs, which according to ASIX is the majority shareholder of the Norfolk group. MSS Security provides security services in several detention centres and their guards have been involved in several notable incidents, including an officer allegedly caught in bed with an asylum seeker. Furthermore, foreign workers are working for MSS to guard asylum seekers and illegal fisherman at the Darwin detention centre. The Northern Territory News reported in early October that “the asylum seekers and illegal fishermen under detention in Darwin are being guarded by foreign students and “guest” workers”: “A company payslip obtained by the NT News reveals MSS security pays its foreign staff $16 an hour plus penalties. One employee worked 66 hours during a 14-day period and took home $1554.00 after tax.” MSS Security is actually owned by an Indian multinational security company, Security Intelligence Services (SIS) India Ltd, which also owns Chubb Security Personnel. It is one of the biggest security providers in India. The paper trail doesn’t stop there. In January 2008 the global private equity fund DE Shaw bought a 14% stake in SIS. While this name may mean very little, the company that bought a 20% stake in DE Shaw in 2007 is more infamous; they trade by the name Lehmann Brothers. This is the very same Lehmann Brothers that filed for bankruptcy in the US. Mainstream media coverage, if it happens, rarely questions the ideological underpinnings of privatising asylum seekers, merely the effectiveness or otherwise of the services for them. At least some in Britain are questioning the morality and effectiveness of outsourcing the management of vulnerable people to unaccountable multinationals. When Crikey requested the names of the subcontractors that Serco employs, a DIAC spokesperson said that not all the names of subcontractors were available. Serco employs more subcontractors, but they’re not reported to DIAC due to the size or duration of the contracts. When asked about the specific guidelines for when a contractor had to be reported to the immigration department, a spokesperson said: “The detention services provider has met its obligations to the department regarding the reporting of subcontractors. It would be inappropriate for the department to discuss in further detail the names of each individual contractor engaged, as it is a matter for that company … if it is a major subcontract (that being, total value greater than $1 million), IHMS (Serco) must seek prior written approval from the department … if it is a minor subcontract, IHMS (Serco) does not need to seek prior written approval from the department.  IHMS (Serco) must provide a copy of the subcontract to the department within 10 business days from the department’s request.” *Paul Farrell is a Sydney-based freelance journalist. Antony Loewenstein is an independent journalist and author.