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Money, migration and U.S. missiles
A detailed proposal by the U.S. Department of Labor to regulate the traffic in indentured workers from Micronesia and the Marshall Islands was shunted aside in recent talks to extend the Compact of Free Association, after the chief U.S. negotiator ignored it and island officials said they would not be "bullied" by the United States.
A State Department memorandum described discussions on the 16-year-old agreement that regulates relations between the United States and the island nations as "rancorous," according to sources familiar with the closed-door talks.
The memo said it was "folly" to link labor reforms to the billions of dollars in U.S. aid that keeps the island economies afloat, the sources said, because that could sidetrack the successful conclusion of the talks before the financial aid provisions of the compact expire on Sept. 30.
The Labor Department proposal would bar recruiters, known in the trade as "body brokers," from requiring workers to sign contracts making them liable for damages if they quit before their contracts expire. It also would require recruiters to register with the island governments, which would share the information with U.S. officials. And recruiters would have to give workers detailed information about wages, living accommodations and length of their assignments.
"We're going to resolve these issues, but we're not going to have our arms twisted," said Howard Hills, an American who negotiates for the Republic of the Marshall Islands.
Jim Stovall, counsel to the negotiating team for the Micronesian government, said island officials are willing to work with U.S. officials on the recruiting problems but they oppose any attempt to link recruiting reforms with financial issues.
"The Marshall Islands government welcomes the Labor Department proposal," said Kristina Stege, first secretary of the Marshall Islands Embassy in Washington, adding: "It's not really a compact negotiation issue."
However, some U.S. officials think it is.
"The department hopes that there would be some meaningful progress on the issue of worker abuse before there is any final decision on funding," a senior Labor Department official said.
That position has gained support from other federal agencies. A U.S. Immigration and Naturalization Service memo, distributed to federal agencies after the latest round of negotiations in Honolulu, said recruiters' conduct may violate a federal law banning "human trafficking," or modern-day slavery, a crime punishable by up to 20 years in prison and a $250,000 fine for each offense.
However, sources said that the chief U.S. negotiator, Albert V. Short, a Virginia businessman acting on special assignment for the State Department, views the Labor Department proposal as a distraction from his principal aim: extension of the lease on the Ronald Reagan Missile Range on Kwajalein Atoll in the Marshall Islands, where the U.S. military conducts tests. The development of an anti-ballistic missile system has been a major priority of the Bush administration.
Short, a former Army colonel, declined to comment.
"They think that they have leverage," Hills said of proponents of the reform plan. "But that is wrong. They are squandering their leverage."
The safety valve
Island officials, who have long viewed emigration as a safety valve in dealing with poverty, strenuously oppose any measure that would impede the free flow of their citizens to the United States. Under the compact, citizens of Micronesia and the Marshall Islands have a permanent right to "enter, work and establish residence as a nonimmigrant in the United States."
With the compact's aid provisions due to expire Sept. 30, negotiators face a tight deadline to come up with a new financial package. The islands are pressing for a deal that would ensure that U.S. aid is included in the budget for the next fiscal year, which will be drawn up this fall. Congress would then have to ratify any agreement.
The latest U.S. proposals would provide about $2.3 billion for Micronesia and about $1.1 billion for the Marshall Islands over the next 20 years.
Supporters of labor reforms say that unless recruitment regulations are linked to the financial aid package now being negotiated, the United States will lose any chance to eliminate abuses.
Hills said he believes the effort to regulate recruiters is part of an effort by some U.S. officials in several agencies who are bent on undermining the compact.
Stovall said the team from the Federated States of Micronesia doesn't have the legal authority to negotiate changes in nonexpiring provisions of the compact.
Since the agreement went into effect in 1986, the United States has provided about $2 billion in direct assistance and $700 million through job training and other federal programs.
In 1998, the last year for which figures are available, U.S. aid accounted for 54 percent of government revenue in Micronesia and for 68 percent in the Marshall Islands.
Hills acknowledged that there is evidence of recruiting abuses, but said island officials don't know the extent of the problem.
At a July hearing of the House Resources Committee, officials of the two island nations said they would oppose any effort to place limitations on the rights of their citizens to come to the United States to work. One of the few issues they're willing to discuss is the use of machine-readable passports by islanders, a security issue pushed by U.S. officials since the Sept. 11 attacks.
"From a Marshallese perspective, one of the most important benefits of the compact is the right of citizens to enter, reside, join the military, work and go to school in the United States," said Gerald M. Zackios, the Marshall Islands' minister of foreign affairs.
Holding negotiations "hostage to an agreement on ... immigration issues," he said, would be "like negotiating with a gun to our heads."
Zackios did not directly address the issue of worker recruitment, and members of Congress and their aides said they were unaware of any problem.
The embassy's report
That is not the case among island officials.
"Our concern is that our citizens are being taken advantage of," Paul McIlreath, justice secretary of the Marshall Islands, said in a March interview. "Currently, there isn't a national policy on this issue. It has come to a head in the last 18 months."
Little more than a year ago, Stege compiled a six-page report detailing problems with worker recruitment. The embassy official found that many recruits had no idea they were signing up for jobs as low-paid nursing assistants, but thought they were coming to the United States to attend nursing school.
"There is a complete change in culture," Stege said in describing the plight of Marshallese who come to the United States. "For many of these women, this is the first time they've had any personal freedom.
"Without a champion to communicate their side of the story or inform them of their rights, Marshallese are easily exploited in such situations," the report states.
Stege concluded that oversight is necessary: "A government representative who is not profiting from the program should have some oversight over the recruitment and orientation process."
No action was taken on the report.
This year, James Naich, deputy chief of mission at the Micronesian Embassy in Washington, urged reforms similar to those being advocated by the U.S. Department of Labor.
"I suggested [to the governor] that we should look into these companies. We want employment opportunities for our young people, but we want to make sure the employment agreements are equal on both sides. Not all of these people have a strong grasp of the language ... never mind a legal contract."
For Naich, the problem became evident in 2000, when the phone began to ring at the embassy. That is when one of the major recruiting companies, Medical Placement Services Inc., operated by Donald Finn of Bonita Springs, Fla., suddenly dissolved. Hundreds of workers it had imported beginning in 1998 were left stranded, despite a clause in their contracts guaranteeing a flight home at the conclusion of their work assignments.
"We received calls from citizens who were complaining about their employment and working conditions," said Naich. "They said they were promised things that did not come to pass."
Finn's former lawyer said the dissolution of the company absolved the recruiter of any responsibility to pay for the workers' return home. Finn blamed employees for his business reversals.
Micronesians' complaints to their government have not been limited to those about nursing homes.
Members of the Pohnpei state board that administers funding from the U.S. government under the Workforce Investment Act went to Florida last year to meet with some of the 300 workers imported by the North Pacific Trading Co. of Kissimmee, Fla.
The firm had been paid $252 in federal grant funds per worker recruited for jobs at three Florida amusement parks - for "interviewing, screening, orientation and all other costs needed to prepare them for departure to the U.S.," according to a report on the visit issued by the panel in April last year.
The workers "did nothing but complain" about their treatment by North Pacific, the report said, noting unexplained deductions from their paychecks, "fake" insurance that was not recognized by area hospitals, and being crowded into apartments.
Maynard S. Etse, who led the visit to the United States, said that as a result of the complaints, the Pohnpei government had decided not to grant North Pacific a new contract.
David Bencivenga, North Pacific's founder, denounced the board's report as "very inaccurate" and "very inflammatory," and said it was instigated by a disgruntled recruit trying to get back at him. He described it as "a set-up," designed to take the contract away from his company and give it to another.
In March, Etse's board signed a contract with J/C Placement Services, a Georgia firm that held a similar contract to aid in the recruiting of workers for nursing home jobs. It is run by Cathy Massey and Johnny Hebel, both of whom had learned the recruiting trade from Finn before striking out on their own.