When Wall Street collapsed the economy in 2008, one company eager to buy public assets from cash-strapped governments proclaimed, “Desperate governments are our best customer!” Across the country, for-profit companies are engaged in a hostile takeover of our schools, roads, prisons, drinking water, and even government itself. CMD’s “Outsourcing America Exposed” project will give taxpayers the tools they need to identify these privatizers and profiteers, their eye-popping salaries, the “fine print follies” contained in their contracts that put taxpayers on the hook — even for work not done — and how taxpayers can take back control of public assets and public services.
Outsourcing Company Sodexo
For our first profile of America’s big 12 outsourcing firms, the Center for Media and Democracy (CMD) focuses on Sodexo, a multinational company based in France that provides food services to schools, college campuses, the U.S. military, and other government entities across the United States. With about $8.8 billion in annual revenues from operations in North America, Sodexo is a primary driver of outsourcing of food services in America.
Sodexo Group is the largest food services and facilities management company in the world, as of 2013. Sodexo contracts to provide food services to private corporations, government agencies, schools and universities, military bases, hospitals, clinics, senior residential facilities, and correctional facilities, and is a primary driver of the privatization and outsourcing of these services.
In 2010, Sodexo was caught fomenting a race to the bottom in food service, by choosing food suppliers based not on quality but based on which supplier could give them the highest cash rebate for the contract. This iced out small local famers and other quality food suppliers in favor of big agriculture and big business that could best engage in the kickback scheme. After an attorney general investigation, Sodexo paid an eye-popping $20 million in 2010 to settle claims that it overcharged 21 New York school districts and the State University of New York (SUNY) system for food and facilities services from 2004 to 2009. New York’s case led to a “major investigation” by at least three other state attorneys general, and the U.S. Department of Agriculture’s (USDA) Office of Inspector General began a nationwide audit in October 2011 for alleged systematic taxpayer fraud by multiple firms.
Sodexo’s unethical business practices ensure that low quality foods are the norm.
Most famously, Sodexo was implicated in the British horsemeat scandal earlier this year, when the company found horse DNA in some of its products and withdrew all frozen beef products from its catering operations at 2,300 British schools, care facilities, military bases, prisons, office canteens, and sporting venues. In 2007, when Sodexo was contracted to provide food services to all Marine Corps mess halls in the United States, the USDA recalled 3,000 pounds of chicken that may have been contaminated with Listeria bacteria.