A Mythic Proposition

Rex Swift wears a confident smile as he receives a rousing round of applause from the conservative crowd at the Thursday Morning Breakfast Club on a recent sunny morning.

“The problem,” explains Swift, “is that government is doing far too many things that the private sector could do, at much too high a cost.”

This is a message that Swift has been honing—and greatly profiting from—for years. A rising star on the conservative circuit and a familiar face to viewers of Fox News shows The O’Reilly Factor and Hannity, Swift has been working in states around the country to privatize various government agencies; in the process, he’s turned his 10-year-old Mythic Corporation into a Fortune 500 company. In Alabama, Mythic Corporation has taken over the state parks; in Texas, it runs one-third of the prisons; in Utah, it has assumed control of failing schools.

And, as he explains to his audience, he’s managing to cut costs while making a healthy profit for his company.

“Government can’t make the decisions we make, because they are bound by too many regulations that limit the imagination of the bureaucracy,” he says. “We bring a new creative approach to serving the people. We do it smarter, and we do it cheaper.”

In recent months, as Arizona has struggled to bridge a $5 billion budget shortfall by cutting everything from health care to education, Swift has been a constant presence at the Capitol, where he is often seen huddling with Republican lawmakers and members of Gov. Jan Brewer’s staff.

In Arizona, Swift may have found his biggest prize yet: A Legislature that appears prepared to turn over nearly every aspect of government to the Mythic Corporation.

On Thursday, April 1, state lawmakers are expected to introduce legislation that promises to transform the state of Arizona forever—by putting nearly every element of state government into private hands.

“A new day is coming to Arizona,” he promises the crowd. “We are going to reduce your taxes; we are going to reduce your government; and we are going to reduce your burdens.”

while he’s delighted to speak in generalities to conservative audiences, Swift isn’t interested in talking to the Weekly about the specifics of his plans.

“We present our own facts in our own media at a time of our own choosing,” he told us when we asked him about the rumors surrounding his proposal.

Lawmakers and other Capitol sources are equally hush-hush about the government-reform package that they are expected to introduce this week, but the Weekly has obtained a series of documents that give a rough outline of the proposal.

Swift sidestepped questions about whether the documents were an accurate representation of his plan. “As a journalist, you know you need to be skeptical about everything that you hear,” he said as he climbed into his sleek BMW M6 Coupe and sped off from Wesley Bolin Memorial Plaza, where he had casually parked in House Speaker Kirk Adams’ reserved space.

Within a few hours, however, Robin Widdoes, a Mythic Corporation attorney, delivered a letter to the Weekly demanding that the paper “cease and desist” with any plans to report on the documents’ contents.

“Your failure to return the documents in question, if they do belong to the Mythic Corporation (or, indeed, if they even exist), could result in serious legal liability,” Widdoes wrote. “Any publication of the details of said documents, whether in print or electronic media, could result in a loss in profit to Mythic Corporation that could total billions of dollars. Should you proceed with your ‘investigation,’ Mythic Corporation will pursue legal action to recover said damages.”

The documents that Swift doesn’t want you to see outline a bold plan to hand over control of much of Arizona’s government to Mythic Corporation, which would also receive most of the $30 billion that the state receives from taxpayers and the federal government. In exchange, the private corporation would take over the delivery of services to Arizonans.

The state would retain a few million dollars every year to run the Legislature and the Governor’s Office, although their responsibilities would be sharply curtailed to a ceremonial role.

“The governor and state legislators would remain in office, but this plan would free them up to handle traditional duties such as attending dinner functions, sporting events and ribbon-cuttings,” according to the documents.

The package of memos and e-mails, many of which appear to have been written by Swift himself, promise to reduce the cost of state government and allow lawmakers to deliver tax relief, “particularly to Arizona’s wealthiest residents, who, under the current punishing system, must surrender their hard-earned wealth to benefit low-income citizens who lack proper incentive to improve their financial status.”

Capitol railbirds have been hearing rumors about the plan for months, as Swift and his army of lobbyists—he seems to have hired nearly every consulting firm in Arizona—have been working the Legislature nonstop since the beginning of the session.

“It’s an unprecedented full-court press,” says one nervous state staffer who prefers to remain anonymous. “These guys mean to get this done, and they know every button to push with the majority.”

Sen. Randy “Hoof” Bergman, a Republican who represents Kokopelli County, tells the Weekly that he’ll be co-sponsoring a bill that he plans to drop on Thursday, April 1, but he’s elusive about the details.

“It’s a big opportunity to expand freedom and liberty for the taxpayer,” says Bergman with a hearty laugh. “Y’all will find out all about it soon enough.”

While Democrats have heard whispers about the proposal, they also remain in the dark about the details. That appears to be part of the plan; a strategy memo penned by Swift notes: “Because Democrats remain in the minority at the Legislature, there is no need to lobby them for their support. We anticipate that their socialist leanings would lead them to run to their media allies with farfetched stories before we’re prepared to properly market our project.”

That particular passage causes state Sen. Wanda Newtax to nearly spit up a spoonful of the prickly pear chili she’s devouring for lunch at Café Engañar, the popular vegan/heritage- food restaurant on North Fourth Avenue.

“This is the mother of all corporate giveaways,” says Newtax, the ranking member of the Senate Federal Litigation and Firearms Committee. “It makes Halliburton look like a lemonade stand.”

Bergman chuckles when he hears about Newtax’s concerns.

“I’d say she should have gone home a long time ago,” he says. “Those Democrats always complain that the sky is falling. Look at how they squealed just because we got rid of that welfare program that gave free health care to all those kids. We’re getting pretty tired of hearing that whining around here.”

while previous legislatures have moved toward more corporate involvement in Arizona, none have attempted the type of large-scale transformation called for in the Mythic proposal.

Among the areas that would be under Mythic control:

• Education: The documents note that many of Arizona’s schools are failing to provide students with the skills they need to succeed in the future. They suggest that the focus of education change from “the 20th-century model of simple memorization of facts and knowledge to preparation for entry into a 21st-century workforce.”

Students would be evaluated with skill-level tests and then placed in different programs, ranging from computer programming to manual labor.

“This has multiple upsides,” Swift writes. “Many foreign companies are looking for value-based computer programming. The students will gain vital skills, while Mythic can expect a significant cash flow from the work that will help cover the expenses of providing a first-class education. This will mean that for the first time, education in Arizona will generate revenue rather than depleting state resources.”

Meanwhile, students who don’t test well will be able to take advantage of a variety of “intern programs,” such as call-center work or “fulfillment centers” for online-shopping outlets.

“Companies such as Amazon are on a constant hunt to lower expenses,” Swift explains. “By putting the students to work assembling boxes and packing shipments, they will learn relevant skills in real time that will serve them for the rest of their lives.”

Other students could be put to work in factories that could compete with Mexican maquiladoras.

“With the United States struggling to maintain its industrial base, one simple solution is to train students from an early age to work in assembly facilities that will provide vital vocational training,” Swift writes. “One major advantage: The small fingers of the students will allow them to perform tasks that adults are incapable of.”

• Health Care: The memo notes that the central problem with Arizona’s health-care system is “the staggering cost of providing treatment to sick people in the American health-care system.”

“If the federal health-care-reform package survives legal challenges, state tax dollars will be required to match federal funding,” Swift explains. “That will cause serious losses to Mythic Corporation that cannot be sustained over the long term.”

The solution: Opt out of the federal program, and transport sick people to Mexico for treatment.

“Many policy experts have suggested re-importing drugs from countries such as Mexico with lower health-care costs, but that has proven to be a nonstarter,” Swift writes. “We suggest that instead, patients be taken to Mexico for treatment.”

Buses would be stationed outside of emergency rooms, and patients with non-life-threatening medical needs would be shuttled to clinics across the border, where they would be seen by Mexican doctors.

“This plan would have the value-added bonus of ensuring that patients who are not in the country legally are deported, thus reducing future state expenses,” according to the memo.

• Transportation: The proposal calls for all state highways, including Interstate 10 and Interstate 17, to become toll roads. The state’s 18-cent gas tax would be cut in half, with the nine cents still collected flowing to Mythic to handle administrative fees.

“For too long, drivers in Arizona have essentially had a ‘free ride’ on state highways,” the memo states. “While instituting toll roads will create some sticker shock, we’re confident that the reduction in gas taxes—and the accompanying reduction in the price at the pump—will compensate for any increased roadway-related expenses.”

• Prisons: The proposal sees Arizona’s prison population as an “untapped resource” that can be put to work across the state. The memo notes that prisoners will be expected to clean up litter along Arizona’s highways, perform custodial duties in Arizona’s schools and patrol vast stretches of desert along the border to intercept migrant workers who enter the country illegally.

• State parks: Title to the state parks would be turned over to the Mythic Corporation as part of the payment for its services. “This will allow Mythic to take on certain expenses that would otherwise have to come out of the pocket of the taxpayer,” Swift writes.

While he notes that there is little demand for homebuilding in the current economic climate, Swift predicts that once the state is under the control of Mythic, Arizona will experience a population boom.

“At that point, the parks offer a golden opportunity,” he writes. “Although parts of them will remain open for paying clients, the scenic beauty is yet another resource that state officials have failed to properly monetize. Mythic will build master-planned communities using prison labor that will offer energy-efficient, green homes in a spectacular setting.”

• Welfare programs: The plan would require anyone seeking state support from welfare programs to actually work for the state’s Department of Economic Security. “By putting welfare recipients to work as state employees, we will be able to lay off a significant number of current state workers,” Swift writes. “These laid-off workers, in turn, will also have to work for the Department of Economic Security in order to collect their unemployment benefits, allowing us to bring in an experienced group of workers to train our new workforce.”

• Universities: Swift expresses concern that Arizona’s universities are in danger of losing their top-notch reputation as a result of funding cuts. “We believe that there are many lucrative opportunities to capture federal grants within the university environment,” he notes.

The memo proposes that the universities make pursuing those federal grants their main mission, primarily in the medical and science fields.

The plan also calls for building stronger football and basketball programs “to optimize both marketing and revenue opportunities that can be leveraged with the Mythic Corporation brand.”

“This will mean that many traditional university programs, such as women’s studies, the humanities and English programs, will have to be eliminated,” Swift notes. “By doing this, we can simultaneously eliminate most of the student body and properly refocus the universities into true economic engines.”

lawmakers hope to end the legislative session before mid-April, and longtime Capitol lobbyist Al Bayou, who is heading up the legislative push, says that the package of laws should have little trouble getting a hearing.

Bayou says the bill to transfer the powers of government will be attached as a “striker” that replaces the language of another bill that has already survived the committee process. The most likely candidate: House Bill 2872, which currently would regulate tire pressure on school buses.

Since the bill has already passed the House of Representatives, it will only need a brief hearing in the Senate Corporate Opportunities Committee before moving on to a full vote in the Senate.

Bayou says the bill’s first hearing will likely be on Thursday, April 1, with passage of the package coming within a week.

But Newtax is promising a legislative fight. And if that doesn’t work, she promises a legal one.

“I refuse to believe that it’s constitutional to strip lawmakers of their power and hand over control of nearly every government function to a corporation that has no consent from the governed,” Newtax says. “This is the craziest thing I’ve ever heard of. It’s hard to take seriously. Somebody needs to tell me that this is just an April Fool’s prank.”

This article appears in Apr 1-7, 2010.