What Does a Vendetta against Immigrants Cost?

By Richard W. Crockett

What can Monmouth and surrounding communities learn from the Postville, Iowa experience? Both towns have meatpacking plants and both plants employed large numbers of immigrants. In Monmouth it is Farmland Foods, which processes pork. In Postville it was Agriprocessors which was a kosher meatpacking operation, and

at its peak supplied 60 percent of the nation’s kosher beef and 40 percent of the nation’s kosher poultry. The plants in both Monmouth and Postville have been the largest employers in their respective communities and counties. In Monmouth’s case, Farmland is also the largest employer in Warren, Knox, Henderson, and Mercer counties. Postville is a community whose population over the last ten years has ranged from a low of approximately 1300 when a previously closed packinghouse reopened, to an estimated high of approximately 3500 toward the “end” of the period. The census of 2000, some eight years ago, put the official population of Postville at 2273. In Iowa, recent headlines in the press have proclaimed, “Postville streets empty as immigration officials return,” “Postville real estate firm could close, owner says,” and “Agriprocessors’ Bankruptcy Leaves Iowa Town Flailing.”

Postville is suffering severe economic stress as a result of recent events. The events are the aftermath of a deliberate governmental anti-immigration policy; an Immigration Agency raid on May 12, 2008 in search of illegal immigrants employed by Agriprocessors, and the fallout from the raid has been a disaster for the local businesses and community.

I will confess my bias at the outset. The Mexican immigrant population, residing and working in Monmouth, are good people who add richness to the semi-rural midwestern culture. They have a reputation, in the main, as persons who work hard, pay their bills and rents and support the community businesses. In Postville until May 2008, the immigrant population was primarily Guatemalan, and the Guatemalans and others in Postville supported their community also. The May 12, 2008 anti-immigration raid in Postville led to 389 arrests and 270 immediate convictions, representing about one-third of the workforce, which set the Agriprocessors plant reeling. Because many of the workers had families, for the plant to lose a worker is for the community to lose an entire family. A repeat raid on Election Day, November 4, 2008 emptied the streets in Postville, but netted only one arrest. (Never mind why Election Day was chosen, but it does suggest a political as well as law enforcement motive.)

According to Postville, Iowa City Clerk-Administrator, Darcy Radloff, even though Agriprocessors filed Chapter 11 Bankruptcy November 4, 2008, in a New York bankruptcy court, a case was already in preparation prior to a foreclosure notice that it had received for alleged non-payment of a 35,000,000 dollar debt to First Bank Business Capital of St. Louis, Missouri, and it had been continuing to operate with a skeleton crew in its poultry operation until Friday, November 14. (If you ever want to eat poultry again, you don’t want to know all of the details of the final days.) Anyway, the remaining workers apparently did not get paid on Friday November 14, and as a result on Monday November 17, the place looked pretty deserted.

For a time Agriprocessors had employed the services of staffing agencies, and Jacobson Staffing of Des Moines, Iowa, had since the May 12, 2008 Immigration Agency raid supplied “legal” workers to the company. Many of these were American citizens described as “transients,” some recently released from prison, as well as “legal” persons from some 20 other countries. According to Radloff, the arrest rate in Postville jumped up significantly following the replacement of the Guatemalans with the “transients” and “legals.”

Creditors have joined to file motions for a change of venue and to move the bankruptcy proceedings from New York to an Iowa bankruptcy court, since most of the creditors are located in the Midwest. According to a report in the Des Moines Register, Agriprocessors “owes nearly 400 creditors between $50 million and $100 million.” Some of the claims against the company include $10,000,000 in fines by the state of Iowa for alleged labor violations, MetLife Ag Investments of Overland Park, Kansas has claims of $9.6 million, National City Commercial Capital of Ohio claims $2.9 million due for leased equipment, and Jacobson Staffing claims it is owed more than $800,000.

Two Postville landlords, Nevel properties and GAL investments have taken a hit. Nevel Properties owns about 67 homes, estimated value at about 4.7 million and rents primarily to the Jewish Community associated with the kosher meatpacking plant in Postville. GAL Investments owns 135 units in about 60 properties consisting of apartments and homes, according to City Clerk-Administrator, Darcy Radloff, and rented to many of the workers in the plant. The last report that Radloff had of GAL Investments was on Friday November 14, and they had 25 tenants who were paying their rent, 75 vacancies where the tenants had left following the original May 12, 2008 raid by ICE (Immigration and Customs Enforcement), and 35 units are still occupied, but not paying rent. Gabay Menahem, the president of GAL, was quoted in the DesMoines Register on November 12, 2008 as saying, “In a month or two, we might have to close shop. We’ve gotten virtually no rent in almost five months. Nobody gets my side of the story. Everybody blames the landlords.” At one point the landlords had an arrangement with Agriprocessors to withhold rents from workers paychecks, allowing new workers to acquire a place of residence upon arriving in Postville with no money. Recently, the rents had not been forthcoming from Agriprocessors, even though the money had allegedly been withheld from paychecks.

Postville has a municipal water supply and the city recently sent out 54 notices of disconnection and got responses from 32, discovering 22 in which the units were apparently vacant. The local utility company has abated shut offs for the time being. Area banks hold mortgages on many of these properties. There are three banks, which include Citizens State Bank in Postville, Freedom Bank in Postville, and Luana Bank in Luana, nearby. Radloff estimates the average home price in the community to be at about $85,000.

Two stores have closed so far, a Mexican clothing store and a Guatemalan convenience store. There is a Mexican Restaurant, which has exhibited low traffic lately and a Jewish Clothing store, which seems to be “hanging on by a thread.”

Beyond the job losses and personal dislocations flowing from the May 12, 2008 immigration raid, there are additional personal costs in criminal charges brought against not only workers, but also management personnel. The Iowa Attorney General’s Office charged the company and five individuals with 9,311 child labor law violations, according to a complaint and affidavit filed in Allamakee County on September 9, 2008. These are misdemeanor charges and are against Abraham Aaron Rubashkin, “principal owner and president; Shalom Rubashkin, plant manager and an officer in the company; Elizabeth Billmeyer, human resources manager; and Laura Althouse 38, and Karina Freund 29, management employees in the human resources division,” according to a November 11 story published in the Cedar Rapids Gazette. Conviction of these misdemeanors could result in up to 30 days in jail per violation (9311 of them) and fines ranging from $65 -$625 for each count. There are 32 victims under the age of 18, some of them under 17.

Human Resources personnel were also facing federal felony charges. Karina Freund, who worked in the human resources department was arrested September 9 and charged with harboring illegal immigrants and assisting them in preparing false documents. She was indicted September 17. Her trial date is scheduled for January 20, 2009. If convicted, she could be sentenced to five years in prison and $250,000 in fines, a “special assessment” of $100 and three years of “supervised release.” Laura Althouse of Postville, Iowa a co-worker was arrested September 9 and indicted September 17. She was charged with “aiding and abetting document fraud, aiding and abetting aggravated identity theft, and conspiracy to harbor undocumented aliens for financial gain.” On Wednesday October 29, she pleaded guilty in Federal Court to “conspiracy to harbor undocumented immigrants for financial gain,” and “aggravated identity theft.” This plea could result in up to two-year sentence in the identity theft charge and up to ten years in jail on the conspiracy charge and a $250,000 fine on each. She awaits sentencing.

Two other supervisors were also arrested. The July 9, 2008 page of Essential Estrogen reported Juan Carlos Guerrero-Espinoza, 35, was charged and convicted with having conspired with others, and aiding and abetting his employer, in hiring more than ten individuals known to be undocumented and unable to legally work in the United States. Upon conviction, Espinoza faces a possible ten years in prison, a $500,000 fine, $200 in “special assessments,” and “supervised release for up to six years.” Espinoza became a legal resident in 2002. Martin De La Rosa-Loera, 43, pleaded guilty to charges of aiding and abetting the use of fraudulent identity documents and encouraging aliens to illegally reside in the United States. De La Rosa-Loera became a naturalized citizen in 2006.

A third supervisor, Hasom Amara, 44, who allegedly required workers to buy cars from him with illegal fraudulent registration in order to keep their jobs or have more agreeable job assignments is still sought by authorities and according to one account in the Iowa Independent written by Lynda Waddington in June, he has fled to Israel.

The biggest fish caught in the INS net appears to be Sholom M. Rubashkin, former CEO of Agriprocessors. Sholom is the son of the company’s founder, A. A. Rubashkin, and was arrested October 30, 2008. He is charged with “conspiracy to harbor undocumented aliens for profit, aiding and abetting document fraud, and aiding and abetting aggravated identity theft.” If convicted of all of these charges, he could be looking at up to 20 years in prison. The Feds found phony blank immigration document cards in the Agriprocessors Human Resources offices.

The principal lesson is that the country needs to fix its broken immigration policy and do so with the recognition that market forces are overwhelming the legal restrictions on immigration. I think this country can work out something with Mexico and other Western Hemisphere nations, which allows for workers in jobs such as those in the meatpacking industry to be here legally. It is also a lesson against the crude exploitation of workers because of their vulnerable status. Much of the evidence for the Federal case Agriprocessors came from persons who had grievances, and who were working inside the plant in Postville. Finally, there are the economic costs associated to the plant closure. Not only are business failures in Postville, but there are now national shortages of Kosher meats throughout the United States. Maybe we can learn.

12/4/08