The new racketeers

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Dressed up in their designer suits, they trade in human cargo

Let’s pull the curtain and look at a police line-up of some of the most thuggish members of organized crime in America today. They don’t have names like “Scarface” or “Bugsy,” as mobsters of old did, but decidedly uptown names like: Tommy Hilfiger, J. Crew, The Limited, Nordstrom, The Gap, Lord & Taylor, Sears, J.C. Penney and Lane Bryant.

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These brand-name dons of modern mobbism are among 18 prominent corporations that have had a billion-dollar class-action law suit filed against them for engaging in an organized racketeering conspiracy. Their racket is not dealing drugs, but conspiring with sweatshop owners to deal in indentured servitude.

Some 5,000 miles away from our shores is a place in the South Pacific called the Northern Mariana Islands, where these upright corporate citizens are involved in a pernicious, tightly-organized sweatshop system that brutally exploits thousands of workers who make clothing for them to sell to you and me.

The system works like this: (1) Investors from China, Korea or Taiwan have built sewing factories in the Marianas; (2) “Recruiters” then scour the back roads of Bangladesh and other impoverished Asian nations to find workers, mostly uneducated girls and young women, who will come to these factories, enticing them with promises of a brighter future and well-paying jobs (at least by Bangladeshi standards, where incomes average $250 a year); (3) The workers find upon arrival that their “bright future” is a hell hole:

• Their passports are confiscated;

• The fine print in their contracts has stripped them of their basic rights, from the right to practice their own religion to the right to ask for a raise;

• They sit on hard benches and sew for up to 12 hours a day, seven days a week for pathetic wages that won’t meet their elementary needs, much less the golden promises their recruiter made;

• They are screamed at, groped, and harassed by supervisors;

• The factories literally are sweatshops with poor ventilation in the broiling heat of the South Pacific, and there might be only a couple of functioning bathrooms for a factory with several hundred women;

• They live eight to a room in guarded, prison-like company barracks that are locked at night and encircled with barbed wire;

• They would try to leave, but they have no passports or money, plus they fear disgrace for them and their families if they return in failure;

(4) About 40,000 Asian immigrants work in this hellish system, churning out boatloads of clothing from what essentially are forced labor camps; and (5) The willing buyer arrives, which is the key component for making the whole ugly system work, thus bringing us full circle to the brand-name racketeers.
The code of misconduct

The initial weasel tactic used by the U.S. peddlers of these sweatshop-stained products is ignorance: “What? You mean there’s exploitation? We had no idea! It’s those darned foreign factory owners, not us.” But, of course, their buyers and quality-control people go there again and again. They know, and they shamelessly delight in getting such cheaply-produced goods.

Their second line of defense is that, by golly, they have a “corporate code of conduct” that clearly opposes all sweatshop conditions. They should ask Carmencita Abad about their code. She sewed clothing for The Gap in one of the Mariana’s abusive factories, and she says: “This abuse occurs while U.S. retailers watch. I have seen many times the Gap inspector come into the factory. In my factory, the Gap code of conduct is posted over the water fountain. But the code is written in English, a language the workers can’t speak or read.”

Gap officials maintain that they “make clear to our vendors that violating the code will result in serious consequences—up to and including the termination of orders and any future business dealings.” Sounds tough. But the code itself is a weasel’s delight—for example, it does not require paying a living wage, but only wages that are “in compliance” with local laws. On the Marianas, the factory owners are the local law. The legal minimum wage assures abject poverty for anyone who gets it . . . plus, no one even enforces this minimum, so there are weeks when some workers don’t get paid at all; every week they get hit for board, food and “loans” to their supervisors that are never repaid.
Made in the USA, NOT!

Get ready to ratchet up your outrage from slow-burn to purple-faced rage: This gross exploitation is taking place in the United States of America. The Northern Mariana Islands are a U.S. Commonwealth, with the Stars & Stripes flying above these factories. Indeed, a big part of the lure used by the recruiters to sign up immigrant workers is that they are “going to America.”

M.A.H. Durbar of Bangladesh was recruited in 1997 to work as a security guard on Saipan, the largest of the Mariana Islands. The San Francisco Chronicle reports that “Durbar, 26, was told by the labor contractor that he was going to Saipan USA, America, the land of the free—located only a train ride away from Los Angeles.” His family scrimped up money to send him to this land of opportunity, but he found himself an ocean away from the USA—and with no job. The recruitment was a scam. A local court ordered the security company to pay Durbar and 21 other of his countrymen who were recruited with him, but not a cent has been collected. The men wander the island begging for work. Meanwhile, says Durbar, his family members “think I’m a liar, that . . . I’m in America . . . making good money and spending it all at nightclubs, doing things with girls, rather than helping them pay what we owe.”

How can this peonage happen on U.S. territory—don’t Commonwealths have to comply with our immigration and labor laws? Yes, unless they have paid-lobbyists and lawmakers in Washington who have written exemptions into the law for the Northern Marianas. There’s nothing common about the wealth on this Commonwealth; the whole place is one big sweatshop loophole, profiting not only the Asian factory owners, but also the elite mob of brand-name companies.

Get this: Since the Islands are a Commonwealth, the clothing made there can legally bear a Made-in-the-USA label. It’s a con-job that The Gap et al. are pulling on unsuspecting U.S. shoppers, and it’s disgustingly profitable for them. Not only do they get impossibly cheap clothing to sell here, but they pay no tariffs to bring them into our market. Last year, $1 billion worth of garments were shipped tariff free from the Islands to a store near you.

Companies like The Gap avoided more than $200 million in tariffs—meanwhile, The Gap’s profits last year were $824 million.


Exploited garment workers are not the only ones who have been recruited to come to the Northern Marianas. But these others see a different side of the Islands. More than a dozen U.S. senators and house members, plus spouses, and about 100 congressional staffers have journeyed to this chain of 14 islands. Curiously, nearly all of their trips have been in the winter months. Instead of touring sweatshops, they tend to favor the warm beaches, beautiful snorkeling areas and championship golf courses.

These members and staffers have been recruited to journey there by Jack Abramoff, the powerhouse chief lobbyist for the Preston, Gates firm in Washington. The firm has been paid some $5 million in fees by the government of the Commonwealth of the Northern Mariana Islands to put a little happy face sticker on the Islands’ “sweatshop problem.” One way Jack has helped buff the Commonwealth’s image in Congress is to arrange these nice junkets, which cost about $5,000 per person, all paid for by the Commonwealth.

An especially happy recruit has been Rep. Tom DeLay, the former pest exterminator and current gooberhead from Houston who is now the Republican Whip. Tom and Jack are close. Jack and his wife Pam have contributed about $20,000 to DeLay’s various political funds, and Tom’s former top staff assistant now works for Jack’s firm, where he also lobbies for the Commonwealth.

In December of 1997, DeLay, his wife, daughter and three staffers enjoyed a delightful all-expenses paid week in the Islands, arranged by Abramoff. Since he had already pledged in Congress to block any legislation to eliminate their sweatshop system, Tom was toasted by the governor and lavishly feted at various receptions by the factory owners. Willie Tan, a Hong Kong-born tycoon who owns the biggest factories in the Marianas and has been accused of breaking more labor laws than the Pinkertons, hosted a dinner in his honor. At the Tan dinner, DeLay told the assembled sweatshop bosses that their indentured-servitude system was a model of “free-market success” and urged them not to give it up: “You are up against the forces of big labor and the radical left. Stand firm. Resist evil. Remember that the truth and blessings emanate from our Creator.”

Told you he was a gooberhead.

Back in the USA, Rep. DeLay was so giddy about his week among the Saipan sweatshop barons that, as reported by Roll Call, he called for a similar system here, where U.S. companies could import Mexican workers who would be paid below the minimum wage.

Behind the Shrub


George W. (Shrub) Bush is still waxing eloquent about his “Compassionate Conservatism.” Sounds touching, until you ask, compassionate toward whom? To find out where a politician’s true loyalty lies . . . always follow the money.

For starters, look at who paid for Bush’s $1.5 million gubernatorial inauguration bash in January: Dow Chemical, AT&T, Dell Computer, Exxon and 60 other big donors who just happen to need big dollar favors from the governor. They kicked in up to $50,000 each, which is more money than what 80% of Americans make in a whole year. So who gets the compassion?

How about Enron, an energy corporation that wants Bush to deregulate electric power in Texas so it can enter selected markets, skim the cream of profitable clients, leave us regular customers with higher rates and make billions selling power to elite corporations? Enron’s chief lobbyist said of her company’s $50,000 donation: “We clearly never expect to receive anything other than good government as a result of any kind of contribution.” Right—as long as “good government” means government giving them the goods. Sure enough, compassionate George feels Enron’s pain, and he’s pushing its de-reg agenda through the legislature.


Bill Clinton has proven to be the best Republican president since Ike, having been unflaggingly loyal to Wall Street and global corporations at the expense of America’s workaday majority.

But now we hear Al Gore is poised to be president, and once he’s free of Clinton, Gore will show us what it’s like to have a real Democrat in the White House again. Before you swallow that, you’d better know about Rattner, Tisch and Kramer.

This is not a law firm, but three Wall Street heavies who have become tighter with The Man Who Would Be President than the bark on a tree. Steve Rattner is CEO of the investment bank Lazard Freres; John Tisch is a top executive of Loews Corporation; and Orin Kramer heads the megabucks investment firm of Kramer Spellman. This trio is serving as Al’s tour guide to Wall Street’s inner sanctums, raising beaucoup bucks for his campaign and helping him bond with America’s biggest brokers and bankers.

Gore has been holding what the trio calls “cultivational meetings” with the top dogs of Bankers Trust, Lehman Brothers, Citigroup, Goldman Sachs and others. They’re putting money into his personal PAC, but they’re also putting Al in their pocket. At breakfast brainstorming sessions, New York lunches and White House coffees (some people never learn), they’ve been tutoring Gore—including instructing him to tone down traditional Democratic concerns about protecting the environment, investing in our cities and helping out American workers and to focus instead on Clinton-style financial and trade policies that have been so good to Wall Street in the ’90s. They’re plenty pleased with their star pupil, who now turns to them for development of his economic proposals—and Holy William Jennings Bryan!—even vets his speeches through them. As Jon Corzine of Goldman Sachs put it: “The Vice President has tried to understand how the global economy works from the eyes of someone sitting in Wall Street.”

Art by Steve Brodner

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