Many of Katrina’s Migrant Workers Go Unpaid

When attorney Luz Molina met a worker on a street corner to talk about how he’d been stiffed of wages he was owed for helping install a roof, they weren’t alone for long.

As they spoke, five other men approached Molina with their own stories of work they had not been paid for.

“There’s no talking to one without three or four coming up to you,” said Molina, a law professor at Loyola University in New Orleans.

In the year since hurricanes Katrina and Rita, thousands of illegal immigrants have come to the region for the first time to work.

Most speak no English and often take under-the-table jobs without knowing even the names of those who hire them.

A cash-based reconstruction economy has taken root in New Orleans, and reports of worker rip-offs are common.

Molina spends her days trying to construct cases with enough detail to file in court.

“I describe it as the new Wild West of labor law, where lawlessness is absolutely tolerated,” she said.

Last month, the National Immigration Law Center filed suit on behalf of 82 guest workers from Bolivia, Peru and the Dominican Republic against Decatur Hotels, a downtown New Orleans chain.

The suit alleges that the workers were recruited, went into debt to get here, then weren’t given the work hours they were promised.

By law, they aren’t allowed to work elsewhere.

“It’s a system of slavery,” said Luis Lopez, 34, who left a job in an architecture office in the Dominican Republic to come work for Decatur.

“You belong to the person who contracted you.”

Partly to blame for the chaos, critics say, is a federal disaster-relief contracting system that breeds fraud and waste by allowing work to be contracted and subcontracted repeatedly, without much opportunity for public scrutiny of how taxpayer money is used.

Prime contractors often don’t oversee how their subcontractors do the job.

The subcontractors who actually do the work, meanwhile, are so removed from oversight, critics say, that they’re often tempted to hire illegal immigrants who have little recourse if they are not paid.

A case in point: suits filed by the Southern Poverty Law Center of Montgomery, Ala., against contractors Belfor USA and LVI Environmental Services, which had been awarded government reconstruction contracts.

The suits allege that the companies and their subcontractors did not pay dozens of illegal workers the wages and overtime owed them for cleaning hospitals and public schools.

On Sept. 7, Belfor USA acknowledged that many of its workers far down its subcontracting line hadn’t been paid and, in a court-approved settlement, agreed to begin looking for, and paying, those workers. A Belfor attorney said the company had relied on subcontractors to pay workers and was unaware any had not been paid until the law center filed suit.

“This was something that was dropped at the subcontractor or the sub-subcontractor level,” said Steve Griffith, a New Orleans attorney representing Belfor. Griffith said the company is, in turn, suing one of its subcontractors -- Florida-based Expo Services Inc. -- alleging nonpayment of workers.

LVI Environmental Services did not return phone calls requesting comment.

Failure to pay workers has become widespread in New Orleans since the hurricane.

The Southern Poverty Law Center has interviewed more than 500 workers in New Orleans since Hurricane Katrina who have had problems getting paid from contractors of all kinds, said J.J. Rosenbaum, a law center attorney. Most reported that when they were paid, it was in cash. Only in rare instances did workers get payroll checks that showed hours worked.

“Workers should be getting checks with stubs that show their hours,” Rosenbaum said. “This is 2006. No one is running a cash payroll unless they’re running a scam.”

One problem, Molina said, is that even before the hurricanes, Louisiana had no infrastructure to deal with labor-law violations, or the challenges presented by thousands of illegal immigrants. The state has no labor office.

The U.S. Department of Labor had one investigating agent covering Louisiana and Mississippi. Earlier this year, the Labor Department sent more agents to Louisiana.

But mostly the agents take complaints and have not launched investigations of their own, a department spokeswoman said.

Another complicating factor in the labor market has been the enormous size of the federal disaster-relief contracts created by bundling together smaller ones. Bundling is intended to speed contracting and make prime contractors responsible for completing the job, paying workers, and ensuring they have safe work conditions and are in the country legally, said Jean Todd, chief of contracting for the Army Corps of Engineers’ Louisiana Recovery Office.

But though the contracts involve taxpayer money, many details of the contracts are not public record. Among information often not available to the public is the amount the prime contractor is paid, which subcontractors they use, how much subcontractors are paid, whom they hire and what work they do.

In January, Kellogg, Brown and Root -- a Halliburton subsidiary -- was forced to pay $141,000 in back wages to 86 illegal immigrants employed by one of its subcontractors to remove debris on the Navy Seabee base in Gulfport, Miss.

Between the workers and Kellogg, Brown and Root were three tiers of subcontractors, said Victoria Cintra of the Mississippi Immigrants Rights Alliance in Biloxi, which investigated the workers’ claims and brought the matter to the U.S. Department of Labor.

“We want them to tell us where all this money’s going,” Cintra said. “How much are these contractors getting for not doing anything?”

She added: “Money is disappearing. Then even the money that’s left at the bottom, the workers aren’t getting it.”

One case Molina is investigating involved an Army Corps of Engineers contract to install blue tarps on 82,000 storm-damaged houses shortly after the hurricanes.

One of the four prime contractors the corps used was LJC Defense Contractors of Dothan, Ala. The corps will say only that it paid the prime contractors an average of $2.38 per square foot for the labor to install the tarps -- almost as much as the cost to install a permanent roof, according to the National Roofing Contractors Assn.

Through interviews and a Freedom of Information Act request, The Times learned that LJC let its contract to six levels of subcontractors in a descending ladder that consumed roughly 95% of the money before it got to the people who did the work.

Several illegal immigrants said they were recruited from around the country to come to New Orleans last September and install the tarps under part of the LJC contract. They said they were promised 11 cents a square foot for the work.

And, they said, the subcontractor who hired them didn’t pay. “We worked three months for free,” said Leonel Santos of Durango, Mexico, who performed part of the LJC contract.

Santos said workers slept outdoors in a park, ate once a day from cans of food bought at convenience stores, and showered with hoses. For three months, the workers said, they labored seven days a week, from 7 a.m. to 7 p.m. -- as stipulated in the LJC contract -- installing tarps on houses in the suburbs of Metairie and Kenner, then Baton Rouge and Lake Charles.

The subcontractor and his assistants -- who were from the same village in Mexico as many of the workers -- gave the workers partial payments along the way.

“Sometimes they’d pay us $200; some weeks they wouldn’t pay us anything,” said Ruben Carrillo, another Durango immigrant who worked on the LJC contract. “They kept saying they didn’t have any money. They’d say, ‘Wait for next week.’ ”

Santos, Carrillo and other workers say each is owed about $1,600. They are now represented by Molina, who has filed a complaint on their behalf with the U.S. Department of Labor.

A Labor Department spokeswoman said the department was conducting an investigation into LJC but declined to comment further. LJC’s owner, Laura J. Clark -- selected as Alabama’s Small-Business Person of 2005 by the U.S. Small Business Administration -- did not return phone calls requesting comment.

The corps’ Todd said there was no reason for anyone in the chain not to have been paid because “the prime contractors have been paid. We are current to date.”

Meanwhile, attorney Molina has been waiting six months to hear from the U.S. Department of Labor regarding the money owed Santos, Carrillo and the others. “It’s my little test case to see how fast they do it,” she said.