Two stories about the sharp end of the capitalist stick to begin our week. First, Erik Loomis of Lawyers, Guns, and Money hipped us to this bizarre story in the Iowa Capital Journal about how two Iowa trucking companies allegedly schemed to import South African workers as cheap labor through a cattle-feeding operation that didn’t exist. This has brought them into court for fraud.
The lawsuit was filed in U.S. District Court for the Northern District of Iowa by the national nonprofit organization Farmworker Justice and by Iowa Legal Aid. Named as defendants are Kuchenbecker Excavating and H & S Farms-Livestock, their owners, and a Tennessee worker-placement company, Golden Opportunities International. The companies are accused of conspiracy and racketeering activities involving “numerous acts of visa fraud, wire fraud, and fraud in foreign labor contracting, which all are ongoing and continue to the present.”
Trent Taylor, an attorney with Farmworker Justice, said Friday that the practices alleged in the lawsuit appear to be relatively common in the agriculture industry. “Generally speaking, companies have often, through different means, employed different types of fraud to evade the restrictions imposed on the use of temporary migrant workers in the United States,” he said. The companies hire migrant workers, in theory for seasonal agricultural work, as a way of obtaining cheap labor. The workers’ visa status makes them far less likely to challenge any violations related to the visa program or wage-and-hour laws, Taylor said.
Central to the story is an episode involving a 59-year old South African man named Carel Hanekom, who was enticed by a representative of the companies to come to Iowa to work on a livestock farm that a) had no livestock, and b) was not a farm. Instead, with his guest-worker visa arranged, Hanekom showed up expecting to haul feed and chicken manure. His duties turned out to be somewhat different.
Hanekom accepted the job and left his home in South Africa to come to Rake, Iowa, where he was put to work as a long-haul trucker, spending most of his nights in hotels while hauling loads of rock used to build a new runway at an Air Force base and hauling construction materials for a bridge and a power station. Hanekom had to use his own money to pay for meals while on the road, the lawsuit claims. His hourly wages were allegedly well below the prevailing wage for non-agricultural heavy truck driving.
Not only does this sound like Hanekom was completely screwed, but it also sounds like the companies weren’t up nights worrying about public safety. A 59-year old guy comes here expecting to drive grain and chicken shit from here to there, and he ends up long-hauling loads of rock all over the country? I’ve driven extensively in Iowa. The place is as flat as a airport runway and, on the highways, the truckers believe they’re flying F-16’s. Hell, I’d sue the bastards, too.
Also being sued is a Tennessee recruiting company called, and I am not joking with this, Golden Opportunities International. They allegedly recruited South Africans for this cheap-labor, bait-and-switch scheme. And it didn’t start with the unfortunate Mr. Hanekom.
Golden Opportunities allegedly had knowledge of the true nature of the work performed by the H-2A workers in Rake and collaborated with the Iowa companies to defraud the U.S. Department of Labor. Since 2018, the two Iowa companies are alleged to have filed at least a dozen H-2A applications with the federal government, through which they brought South African workers to Iowa. During that same time, more than 40 South African workers allegedly left their jobs in northern Iowa before the end of their contracts due to harm they suffered from fraudulent misrepresentations in their job orders.
The other story comes from the fact that the federal government seems to be preparing to go another 15 rounds with the sugar industry. From RevealNews.org.
Trained to target and dismantle terrorist groups and transnational drug cartels, the special agents from Homeland Security Investigations, or HSI, were probing something very different: working conditions at the Central Romana Corp., a major exporter of sugar to the U.S., whose top executive is Alfonso Fanjul, a billionaire Florida businessman. The agents spent days in March secretly interviewing Haitian cane cutters, who were shuttled to the hotel from Central Romana’s sprawling nearby 240,000-acre plantation, where many workers, along with their families, live in ramshackle camps known as bateyes.
The Fanjuls are renowned for having real juice in Washington, having been lavish bipartisan donors for years. Which is why their operations in places like the Dominican Republic have managed to survive numerous brushes with the law. This time may be different.
But the HSI agents’ inquiry and deployment in the Dominican Republic, disclosed here for the first time, indicates significant new federal scrutiny of the country’s sugar industry. It could also represent a breakthrough in the application of U.S. laws allowing corporations and their executives to be held criminally accountable for labor exploitation in their supply chains.
A series of lawsuits and reports by government agencies, civil society groups and academics– along with extensive media investigations – have exposed grim conditions that Central Romana cane cutters and their families face, including substandard company housing, often without electricity or running water. In dozens of interviews with Reveal and Mother Jones over the last four years, workers and their advocates have described inadequate protective gear, poor medical care, low pay, chronic debt and intimidation by the company’s armed security force.
An investigation by HSI that leads to criminal charges against Central Romana or the company’s leadership would be “unprecedented,” according to Kenneth Kennedy, a retired special agent with the division who directed efforts to expand its work targeting forced labor in goods imported into the U.S. “This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains.”
And that should scare a number of American corporations to death. Being responsible for how every link in your supply chain is managed would turn over a lot of rocks, from the sugar industries to clothing manufacturers. And, recognizing this, and having already been hit by U.S. Custom, which has banned their company’s products from being imported into the U.S, the Fanjuls are gearing up.
The Homeland Security Investigations inquiry is taking place as Central Romana flexes its muscle in Washington over the export ban. Congressional disclosure reports show Central Romana has paid Akin Gump, which Sturla confirmed was hired for its “experience in international trade law,” to lobby members of the House about the ban. Another payment of $25,000 for lobbying the State Department and U.S. Customs and Border Protection went to the firm of James “Wally” Brewster, a U.S. ambassador to the Dominican Republic under the Obama administration.
In August, Alfonso Fanjul, the Palm Beach-based president and CEO of Central Romana, sent a letter to former U.S. Sen. Christopher Dodd, D-Conn., a longtime ally of President Joe Biden who now serves as a State Department special presidential adviser for the Americas. In the letter, obtained by Reveal and Mother Jones, Fanjul said he was “terribly upset” by the forced labor allegations and asked for Dodd’s help in “requesting (Customs and Border Protection) to lift its sanctions on our company…Chris, we have been friends for a long time,” wrote Fanjul, who has contributed millions of dollars to Democratic campaigns, including Dodd’s. “I am a man of honor. … I would never allow my company to treat our workers in ways that would deserve the treatment we have received from CBP.”
And that’s the way the world works. For some people, anyway.
Charles P Pierce is the author of four books, most recently Idiot America, and has been a working journalist since 1976. He lives near Boston and has three children.
