[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
ARE GOVERNMENT CONTRACTORS EXPLOITING WORKERS OVERSEAS? EXAMINING
ENFORCEMENT OF THE TRAFFICKING VICTIMS PROTECTION ACT
=======================================================================
HEARING
before the
SUBCOMMITTEE ON TECHNOLOGY, INFORMATION
POLICY, INTERGOVERNMENTAL RELATIONS AND
PROCUREMENT REFORM
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
NOVEMBER 2, 2011
__________
Serial No. 112-93
__________
Printed for the use of the Committee on Oversight and Government Reform
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
U.S. GOVERNMENT PRINTING OFFICE
71-964 WASHINGTON : 2012
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana ELIJAH E. CUMMINGS, Maryland,
JOHN L. MICA, Florida Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee PETER WELCH, Vermont
JOE WALSH, Illinois JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania
Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Robert Borden, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director
Subcommittee on Technology, Information Policy, Intergovernmental
Relations and Procurement Reform
JAMES LANKFORD, Oklahoma, Chairman
MIKE KELLY, Pennsylvania, Vice GERALD E. CONNOLLY, Virginia,
Chairman Ranking Minority Member
JASON CHAFFETZ, Utah CHRISTOPHER S. MURPHY, Connecticut
TIM WALBERG, Michigan STEPHEN F. LYNCH, Massachusetts
RAUL R. LABRADOR, Idaho JACKIE SPEIER, California
PATRICK MEEHAN, Pennsylvania
BLAKE FARENTHOLD, Texas
C O N T E N T S
----------
Page
Hearing held on November 2, 2011................................. 1
Statement of:
Klemstine, Evelyn R., Assistant Inspector General for Audits,
U.S. Department of State; Kenneth P. Moorefield, Deputy
Inspector General for Special Plans & Operations, U.S.
Department of Defense; Linda Dixon, Combating Trafficking
in Persons Program Manager, U.S. Department of Defense; and
Michael P. Howard, Chief Operating Officer, Army and Air
Force Exchange Service..................................... 88
Dixon, Linda............................................. 111
Howard, Michael P........................................ 119
Klemstine, Evelyn R...................................... 88
Moorefield, Kenneth P.................................... 99
Wyler, Liana, Senior Analyst, Congressional Research Service;
David Isenberg, independent analyst and writer; Nick
Schwellenbach, director of investigations, Project on
Government Oversight; and Sam W. McCahon, founder, McCahon
Law........................................................ 4
Isenberg, David.......................................... 19
McCahon, Sam W........................................... 72
Schwellenbach, Nick...................................... 49
Wyler, Liana............................................. 4
Letters, statements, etc., submitted for the record by:
Cummings, Hon. Elijah E., a Representative in Congress from
the State of Maryland, prepared statement of............... 141
Dixon, Linda, Combating Trafficking in Persons Program
Manager, U.S. Department of Defense, prepared statement of. 113
Howard, Michael P., Chief Operating Officer, Army and Air
Force Exchange Service, prepared statement of.............. 122
Isenberg, David, independent analyst and writer, prepared
statement of............................................... 21
Klemstine, Evelyn R., Assistant Inspector General for Audits,
U.S. Department of State, prepared statement of............ 91
McCahon, Sam W., founder, McCahon Law, prepared statement of. 74
Moorefield, Kenneth P., Deputy Inspector General for Special
Plans & Operations, U.S. Department of Defense, prepared
statement of............................................... 101
Schwellenbach, Nick, director of investigations, Project on
Government Oversight, prepared statement of................ 51
Wyler, Liana, Senior Analyst, Congressional Research Service,
prepared statement of...................................... 6
ARE GOVERNMENT CONTRACTORS EXPLOITING WORKERS OVERSEAS? EXAMINING
ENFORCEMENT OF THE TRAFFICKING VICTIMS PROTECTION ACT
----------
WEDNESDAY, NOVEMBER 2, 2011
House of Representatives,
Subcommittee on Technology, Information Policy,
Intergovernmental Relations and Procurement Reform,
Committee on Oversight and Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:05 a.m., in
room 2247, Rayburn House Office Building, Hon. James Lankford
(chairman of the subcommittee) presiding.
Present: Representatives Lankford, Walberg, Connolly, and
Speier.
Staff present: Richard A. Beutel, senior counsel; Molly
Boyl, parliamentarian; Gwen D'Luzansky, assistant clerk;
Cheyenne Steel, press assistant; Nadia A. Zahran, staff
assistant; Richard Burkard, detailee; Jaron Bourke, minority
director of administration; Paul Kincaid, minority press
secretary; and Cecelia Thomas, minority counsel.
Mr. Lankford. We are going to go ahead and get started. Mr.
Connolly is on his way; he is in another hearing as well right
now, so he will be back and forth a little bit. But we want to
go ahead and begin at this time as well.
The committee will come to order.
The Oversight and Government Reform Committee exists to
secure two fundamental principles: first, Americans have the
right to know that the money Washington takes from them is well
spent; second, Americans deserve an efficient, effective
Government that works for them. Our duty on the Oversight and
Government Reform Committee is to protect these rights. Our
solemn responsibility is to hold Government accountable to the
taxpayers, because taxpayers have a right to know what they get
from their Government. We also work tirelessly in partnership
with citizen watchdogs to deliver the facts to the American
people and bring genuine reform to the Federal bureaucracy.
This is the mission of the Oversight and Government Reform
Committee.
As a Nation, we have certain values that characterize us.
We believe that each person has been endowed by their creator
with certain rights, including life, liberty, and the pursuit
of happiness. These are not rights given by men or confined to
national boundary; they are unique to each person worldwide.
That passion for freedom and our national security has taken us
across the globe. In the process of doing the right thing, we
must also be careful to do it the right way.
At the height of our overseas contingency operations, we
had hundreds of thousands of military personnel stationed
overseas. While we have our differences of opinion on the
current strategy or the way forward, we must remember there are
tens of thousands of American men and women stationed abroad,
and regardless of whether there are tens or hundreds or
thousands of troops abroad, the support personnel required to
ensure these military and diplomatic operations are effective
continue to remain.
Within the confusing maze of contractors and subcontractors
who support our operations, there appear to be less than
reputable foreign companies that engage labor brokers who
apparently are accountable to no one. They exploit unskilled
workers from impoverished backgrounds. We are told that these
workers are taken advantage of in their unconscionably low
wages, in their work expectations, and in their living
conditions.
The purpose of this hearing is to stop, ask the questions
that will confirm or deny these accusations. These foreign
workers are known as third country nationals [TCNs]. They are
the workers who tend to the gardens, wash the dishes, prepare
fast food meals, do the laundry for American embassy workers or
military personnel stationed in the Middle East, Iraq, and
Afghanistan. They come from countries such as India, Nepal,
Bosnia, Pakistan, Bangladesh, Sri Lanka, and the Philippines.
They provide what the military calls base support operations or
they are used by embassies throughout the Middle East to
perform the menial labor necessary to support embassy
operations.
According to various accounts, some of these workers have
been robbed of wages, injured without compensation, subjected
to sexual assault, or held in deplorable living resembling
indentured servitude by their subcontractor bosses. Many are
paid an illegal job broker fee equal to or greater than their
final pay.
Reports have suggested they are deceived about their work
location or conditions when they are recruited. This can best
be characterized as involuntary servitude or even labor bondage
for the victimized workers. These unsavory labor practices are
collectively called trafficking in persons. It is prohibited by
the Trafficking Victims Protection Act of 2000, which
establishes minimum standards for eliminating trafficking in
persons around the world. In fact, the United States has
numerous laws, policies, and contractor regulations already on
the books to prevent human trafficking.
The purpose of this hearing is to explore whether the
United States, through its unprecedented use of contractors in
war zones and contingency environments, has become an enabler
of human trafficking or if we have knowingly turned a blind eye
to trafficking. We also want to examine the role of contractors
and their subcontractors in adopting these abhorrent labor
practices. If our Nation is trafficking in persons, we must
stop this practice immediately; apply every option with abusive
contractors, including suspension, debarment, or prosecution;
and take the appropriate steps to impose the law. This is not a
case where clear law is lacking; it seems to be a case where
enforcement is lacking.
To examine the facts, we have two panels today. The first
panel combines investigative journalists or lawyers
specializing in human trafficking concerns, and an expert from
Congressional Research Service to describe the problem in more
detail.
The second panel consists of representatives from the
Inspector Generals Offices of the State Department, the
Department of Defense, as well as representatives from the
Department of Defense Human Trafficking Office and the Army-Air
Force Exchange Service to recount their experiences with human
trafficking issues and to offer some insight into what they are
doing to prevent American taxpayer money from supporting these
practices.
I look forward to receiving some clarity and answers on
this issue. There is no good explanation of why we would still
have contractors using illegal recruiting fees, providing
inadequate living conditions for TCNs, or violating a multitude
of other clear human dignity values.
With that, I would like to recognize Mr. Connolly for his
opening statement.
Mr. Connolly. Thank you, Mr. Chairman, and I agree with you
that this is a matter of enforcement. This is a matter of
values. There is nothing more abhorrent than taking away human
autonomy. Human trafficking is unacceptable under any
circumstances. War does not justify it; the mission doesn't
justify it. We cannot and will not turn a blind eye to this
practice. And as far as I am concerned, and I think eventually
this Congress, Federal agencies will be held responsible, prime
contractors will be held responsible when and if this practice
occurs. It needs to be rooted out, stamped out, and ended. That
is as fundamental an American value and a human rights value as
exists on this planet.
I am glad you are holding this hearing today, Mr. Chairman,
and I look forward to working with you on a bipartisan basis to
make sure we end this abhorrent practice.
Mr. Lankford. Thank you, Mr. Connolly.
Members may have 7 days to submit opening statements and
extraneous materials for the record.
We now welcome our first panel. Ms. Wyler is the Senior
Analyst for the Congressional Research Service; Mr. Isenberg is
an independent analyst and writer specializing in issues
involving wartime contingency operations; Mr. Nick
Schwellenbach is the chief investigator of the Project for
Government Oversight; and Mr. Sam McCahon is an attorney in
private practice and founder of the McCahon Law firm.
Pursuant to committee rules, all witnesses will be sworn in
before they testify. Would you please rise and raise your right
hands?
[Witnesses sworn.]
Mr. Lankford. Let the record reflect the witnesses have
answered in the affirmative. Thank you. Please be seated.
In order to allow time for discussion, please limit your
testimony to 5 minutes. Your entire written statement, of
course, will be made part of the record.
Ms. Wyler, you are first up. We would be honored to be able
to receive your testimony at this time.
STATEMENTS OF LIANA WYLER, SENIOR ANALYST, CONGRESSIONAL
RESEARCH SERVICE; DAVID ISENBERG, INDEPENDENT ANALYST AND
WRITER; NICK SCHWELLENBACH, DIRECTOR OF INVESTIGATIONS, PROJECT
ON GOVERNMENT OVERSIGHT; AND SAM W. MCCAHON, FOUNDER, MCCAHON
LAW
STATEMENT OF LIANA WYLER
Ms. Wyler. Thank you. Chairman Lankford, Ranking Member
Connolly, and distinguished members of the subcommittee, thank
you for the opportunity to appear today before you on behalf of
the Congressional Research Service. My testimony will discuss
U.S. policies and efforts to combat international human
trafficking among contractors working overseas and representing
the U.S. Government.
Trafficking in persons has been an issue of concern to the
United States and international policy community for its human
rights implications and as a prolific form of transnational
criminal activity. Despite international commitments to
eradicate human trafficking, recent reports suggest that the
United States continues to face challenges in preventing it and
related violations in the performance of Federal contracts
overseas.
These challenges are not new. Since at least the late
1990's, U.S. contractors have been implicated in allegations of
human trafficking and related violations in Bosnia, South
Korea, Iraq, Afghanistan, and other countries around the world.
These allegations have been of concern to policymakers because
they risk tarnishing the reputation of the United States as a
country that stands for freedom and human rights principles.
They may also undermine U.S. diplomatic efforts to galvanize
international support to combat human trafficking.
In response to many of the allegations that have surfaced
over the years, the U.S. Government has sought to prevent human
trafficking in the context of a multi-tiered policy framework.
This framework consists of international treaties, Federal
statutes, policy directives, implementing regulations, agency-
specific policy guidance, and voluntary best practices. In
their current form, U.S. anti-trafficking policies provide for
a common definition of severe forms of human trafficking and
related offenses. As of December 2002, the U.S. Government also
established a zero tolerance policy against such trafficking
which applies to contractors.
The centerpiece legislation for the U.S. efforts to combat
human trafficking is the Trafficking Victims Protection Act
[TVPA] of 2000, as well as its three reauthorizations. The TVPA
emphasizes a three-pronged policy approach to anti-trafficking
that focuses on preventing human trafficking, protecting
trafficking victims, and prosecuting traffickers. The TVPA, as
amended, also contains provisions designed to prevent human
trafficking in Federal contracts. Specifically, the TVPA's 2003
reauthorization allows contracts and subcontracts to be
terminated without penalty under certain conditions. These
include situations in which a contractor engages in severe
forms of human trafficking, procures a commercial sex act
during the contract period, or uses forced labor in the
performance of the contract.
Implementing regulations require that contractors insert an
anti-human trafficking clause into all solicitations and
contracts. This clause covers, among other provisions, how to
address violations, including the application of suitable
remedies such as termination, suspension, and debarment.
Additional executive branch regulations apply to certain
contracts in Afghanistan and Iraq. For example, the U.S.
Central Command's Joint Theater Support Contracting Command
mandates additional provisions related to employee passports,
recruiting fees, and living conditions, among others.
Yet, despite this multi-tiered policy and implementation
framework, allegations of trafficking violations and
contracting practices that heighten the risk of trafficking
appear to continue to take place. The U.S. Commission on
Wartime Contracting has highlighted possible incidents related
to human trafficking involving labor brokers, contractors, and
subcontractors in U.S. contingency operations overseas. Several
reports by U.S. Inspectors General Offices have also, in recent
years, identified problematic contracting practices overseas
that raise the risk of human trafficking and related
violations.
Some observers have begun to wonder why, after decades of
strengthening United States and international policy against
human trafficking, do such violations continue to occur. Is the
existing legal and regulatory framework sufficient? Are there
gaps in the oversight and enforcement of existing laws and
regulations among overseas contractors? Do contractors and
subcontractors, as well as those responsible for monitoring
them, understand what actions are prohibited and how such
contracts should be monitored? And to what extent are continued
trafficking violations in contracts overseas a manifestation of
broader challenges associated with managing and relying on a
large contractor force to support overseas missions?
These questions may warrant further exploration by
policymakers and implementing agencies.
This concludes my testimony. Thank you again for the
opportunity to be here today. I look forward to your questions.
[The prepared statement of Ms. Wyler follows:]
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Mr. Lankford. Thank you, Ms. Wyler.
Mr. Isenberg.
STATEMENT OF DAVID ISENBERG
Mr. Isenberg. Chairman Lankford, Ranking Member Connolly,
other distinguished members of the subcommittee, thank you for
the opportunity to testify here today.
I commend you for examining the issue of whether Government
contractors exploit workers overseas. It is unquestionably a
problem. Though it has come up elsewhere, it has not yet
received the sustained attention it merits. The Commission on
Wartime Contracting in Iraq and Afghanistan noted in its final
report: U.S. contingency contractors, opportunistic labor
brokers, and international criminal organizations have taken
advantage of the easy flow of people, money, goods, and
services to capitalize on the sources of revenue and profit.
Their actions bring discredit to the United States and act as a
barrier to building good diplomatic relations.
This subject also means you have to look at the
relationship between prime contractors and their
subcontractors, which is another linked problem. ``It is
often,'' to cite Winston Churchill, ``a riddle, wrapped in a
mystery, inside an enigma.'' As proof of this, you don't have
to look any further than last week, when the International
Stability Operations Association, a major trade association for
an industry, held their annual summit. One of their workshops
was entitled Performance and Pitfalls of Subcontract
Management.
I am pleased to be here to discuss The Najlaa Episode
Revisited report that I coauthored with my colleague, Nick
Schwellenbach of POGO, which came out earlier this year. In the
interest of full disclosure, I should mention, though I fully
commend POGO for allowing me to come to them with the
information and publishing the report, I don't speak for POGO.
First, let me address why is this important. For years,
industry advocates have been claiming that thanks to private
military and security contractors, U.S. military forces have
the best supplied military in any military operation in
history. It is true that PMCs are now so intertwined and
critical that the U.S. military simply can't operate without
them. But it is not an unmitigated benefit. Many PMCs have
problems implementing contracts. Some have committed outright
fraud, as you know, thus wasting U.S. taxpayers' moneys and
indirectly negatively affecting U.S. military operations.
Second, our report documented various violations of the law
and irregularities with regard to third country nationals. Some
people may say this is unfortunate, but since nobody was
wounded or killed, what is the big deal? The answer is twofold.
First, as any competent military commander will tell you,
wars are not fought and won by machine and tools; they are
fought and won by people. Given how tightly integrated private
military contractors are with regular military forces, treating
people badly on the private side can adversely impact people on
the public side.
Second, there is a cost when contractors are improperly
used and treated, and I am not talking about money. Although it
is not widely recognized, the use of private contractors among
the complex of national defense, security and foreign policy
departments and agencies is so widespread and so wide in scope
that their impact can be strategic, as opposed to merely
operational and tactical.
If you think I am exaggerating, consider the recent news
that the United States is withdrawing its military forces from
Iraq by the end of the year. This was not done because the
Obama administration wanted to do so; it was done because it
could not work out a deal regarding immunity for U.S. military
forces. But given the events of September 2007, when Blackwater
security contractors shot and killed 17 Iraqi civilians, no
Iraqi government was ever going to be able to grant an immunity
deal. Now, like it or not, that is strategic impact. In other
words, there is a reputational cost when contractors do bad
things or are treated badly.
Third, while industry officials and advocates say they
often welcome regulation, it often comes with the caveat that
it should not be intrusive or burdensome. They note they
already comply with existing law laws. While it is true that
existing regulation could interfere with the proper functioning
of the private sector, it is equally true that the
unconstrained activities of the marketplace, especially in the
chaos of battlefields and war zones, is a recipe for problems.
In truth, free market and regulation can go together.
Finally, contractor advocates also point to their own
efforts to ensure ethical conduct, notably through codes of
conduct. While this is commendable, and perhaps some day even
useful, it is hardly sufficient. At the present time, their
mechanisms for enforcement are largely theoretical and not
resourced, and there are no people or money put behind them.
Right now they operate on the Joe Isuzu principle, which is to
trust us. My response is that we should heed the words of
Ronald Reagan and trust, but verify.
Finally, even if a company does have high standards for
ensuring ethical conduct, it all falls apart when it comes to
subcontractors. KBR has an extensive code of conduct, has a lot
of resources it puts into implementing behavior for its
employees, but when it came to dealing with its own
subcontractor, it failed miserably.
Thank you.
[The prepared statement of Mr. Isenberg follows:]
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Mr. Lankford. Thank you, Mr. Isenberg. Look forward to
receiving questions as well.
Mr. Schwellenbach.
STATEMENT OF NICK SCHWELLENBACH
Mr. Schwellenbach. Chairman Lankford, Ranking Member
Connolly, and other distinguished members of the subcommittee,
thank you for inviting me to testify today.
The United States has been a global leader in combating
trafficking in persons, yet our tax dollars are inadvertently
fueling this human rights tragedy through our overseas contract
labor supply chain. Not only is trafficking and exploitation of
laborers a moral wrong, but it can spark a backlash from the
laborers and their home countries, and could undermine the U.S.
mission abroad.
There have been some oversight improvements over the last
several years, but there is a lack of enforcement. For example,
to date, there have been no prosecutions for contractor-driven
war zone trafficking.
First, I will recount some stories of laborers in Iraq;
then I will summarize public reporting of U.S. investigative
and enforcement activity; third, I will recommend some ways to
strengthen enforcement.
In June, The New Yorker's Sarah Stillman reported on labor
rights abuses against third country nationals on U.S. contracts
in Iraq and Afghanistan, and she focused on the stories of two
Fijian women, Vinnie Tuivaga and Lydia Qeraniu, who worked for
the Army Air Force Exchange Service subcontractors in Iraq.
Vinnie and Lydia were, like many others, lured by promises
of good pay. They were told by a local recruitment firm in Fiji
that they could each make between $1,500 and $3,800 a month in
Dubai, in the UAE. After arriving in Dubai, they and other
women discovered their true destination, which was Iraq. They
could have quit, but they had gone into massive debt to pay the
recruitment fees to be there. Quitting would mean no income to
pay off this debt.
But when they got to Iraq, Vinnie and Lydia and the other
women further discovered that instead of making between $1,500
and $3,800 a month, as they were promised, they would only make
$700 a month, which was later further reduced to $350 a month.
The contract they signed specified that they would work 12
hours a day for 7 days a week, and that their vacation was a
return ticket home.
In addition, an AAFES subcontractor supervisor had been
repeatedly sexually assaulting Lydia according to The New
Yorker article. The allegations eventually ended up in the
hands of both AAFES officials and the Army Criminal
Investigation Command. Army CID told me last year, when I was
working on another article, that they did not substantiate the
allegations of trafficking and sexual assault. They would not
tell me if they had actually interviewed the women. According
to The New Yorker, Lydia and Vinnie both say that no one from
the military or AAFES spoke to them about their sexual assault
claims.
In another case from 2004, several Nepali laborers believed
that they would be working in a five-star hotel in Jordan.
Cementing that belief was paperwork filed with Nepal's Labor
Ministry for several laborers to work at that hotel. The
recruiting fee charged each laborer meant that they and their
families were deeply in debt. But the promises of lucrative pay
made the debt seem like a good deal.
Furthermore, the manager of the recruitment firm told the
Chicago Tribune that he didn't mention anything about Iraq to
the applicants. They believed they were going to Jordan. But
after they arrived, the Jordanian brokers demanded that the
Nepalis surrender 2 months' pay as a fee, in addition to their
recruitment fee, and accept less than half the salaries
promised them in Nepal, and that they go to Iraq. According to
the Tribune, their families told them that they must go to Iraq
to cover the loans used to pay a Nepalese broker $3,500 for
each man, more than a decade of earnings for the average Nepali
laborer.
The Amman to Baghdad Highway, which runs through Iraq's
Anbar Province, is dangerous even for convoys guarded by
security details. But 12 Nepali laborers did not have the
advantages of having a security detail; they traveled this
route, were kidnaped by insurgents, held for weeks, and killed.
I will skip an example.
Looking at overall enforcement activity over the last
several years, there have been a few investigations, but there
were no DOD investigations into trafficking in both 2006 and
2007, according to the DOJ. This section detailing DOD
investigations is missing in 2008 and 2009 reports. In 2009,
according to the DOD IG, there was one report of a preliminary
investigative activity of a contractor in Iraq for labor
trafficking, but prosecutors determined the facts and
circumstances did not warrant further action.
Over at the State Department, two investigations were
opened in 2009 and closed in 2010, a State Department IG
spokesman told me last year. He said both cases were
unsubstantiated.
So there have been a few investigations, but so far none of
them have led to prosecutions.
There was also a civil action where the DOJ joined a
whistleblower lawsuit earlier this year and the company settled
to ``end the litigation.''
But what can be done to improve enforcement? Investigators
clearly need the resources that they require. The SIGOCO, or
Special Inspector General for Overseas Contingency Operations,
may be one way to do this. They also need to be trained in
investigating trafficking in persons violations, and
jurisdictional ambiguities should be closed with Civilian
Extraterritorial Jurisdiction Act.
Thank you for this opportunity. I am open to questioning.
[The prepared statement of Mr. Schwellenbach follows:]
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Mr. Lankford. Thank you, Mr. Schwellenbach.
Mr. McCahon.
STATEMENT OF SAM W. MCCAHON
Mr. McCahon. Chairman Lankford, Ranking Member Connolly,
members of the committee, thank you for inviting me to testify
before you today and thank you for taking an interest in the
practice of modern day slavery on government contractors, and
thank you for your commitment to take decisive action in this
area.
I lived approximately 9\1/2\ years in the Gulf region,
Kuwait, Iraq, Saudi Arabia. Trafficking in persons is not a
unique phenomena to government contracts; it is par for the
course in these countries, which is why the Department of State
ranks them on tier 2 and tier 3 for trafficking countries. In
support of our trafficking countermeasures, my colleague,
Sindhu P.K., and I have collectively spoken with several
thousand victims of trafficking on government contracts both in
Iraq and back in South India.
As an attorney who has spent a significant portion of my
career investigating allegations of procurement fraud on behalf
of the U.S. Government and corporations, I look forward to
talking to you today about the dynamics of trafficking in
persons on government contractors performed in contingency
areas.
I would like to focus and summarize three areas. The first
I will describe the common schemes used by contractors and
recruiters to exploit workers and reduce them to the status of
indentured servants. Second, briefly describe the scope of
trafficking on U.S. Government contractors and the inadequacy
of Government efforts to date; and, finally, touch upon some
mitigation measure that can be taken by the Government to
abolish this practice.
Although there are many companies engaged in trafficking on
U.S. Government contracts in Afghanistan and Iraq, they use a
tried and tested business model to perpetrate the fraud. The
following steps are standard operating procedure for the
traffickers and also the subcontractors and prime contractors
to take kickbacks from the traffickers.
First, subcontractor-prime contractor establishes direct
contact with the recruiting company in the developing nation.
The purpose of the personal contact by the subcontractor or
prime is to solidify the kickback scheme.
Second, arrangements are made for the contractor company to
pay the recruiter for the services of recruiting, such as air
fare, visas, cost of medical examinations.
Third, the contractor and the recruiter agree to the amount
of the kickback paid to the contractor for giving the
recruiting firm the business. The kickback is typically 50
percent of the money charged by the recruiter to the
prospective employee. This is where the violation of the Anti-
Kickback Act of 1986 occurs.
Fourth, the recruiter retains the services of subagents to
solicit victims. This process facilitates the layering or onion
skin effect in order to provide plausible deniability up the
trafficking chain.
Fifth, the recruiter will solicit victims from farming
villages who are typically without resources. This category of
victim is also less sophisticated concerning the fraudulent
techniques used by recruiters.
Sixth, the recruiter deceives the victim into believing
that he will receive money far beyond which he will actually
earn. Oftentimes, but not always, the location of the work site
is misrepresented.
The seventh step, the recruiter's agent informs the victim
he will need to pay a fee between $2,500 and $5,000 in order to
get the well-paying job and good working conditions servicing
the U.S. Government. This action induces the victim to pay the
high recruiting fee and will help ensure future compliance with
the contractor's dictates because the victim will become
indebted in order to pay the commission to the recruiter.
Eight, victims will typically obtain the money from a loan
shark or use their house or their dowry gold as collateral. The
interest on the loan is between 35 and 45 percent. The money
paid the loan shark must be provided to the recruiter or
subagent prior to departure for the work site.
Workers are not provided a written contract prior to the
departure from their host nation. If they do receive an
agreement once they arrive at the work site, it will not be
written in a language they can understand.
The 10th phase, once the victim arrives in the combat zone,
he is typically housed for several months without pay and not
permitted to call his family. When he does receive his first
work and pay, it is typically 50 percent of what he was
promised by the recruiter. He tells his employer what was
promised by the recruiter, but the subcontractor or prime
informs him that is a matter between the worker and the
recruiter.
By this time, the worker has missed monthly payments to the
loan shark. He now pays approximately 50 to 75 percent of his
monthly wages just to service the interest on the loan. Even
though he knows he was deceived, he is helpless. If he speaks
to anyone with the Government, he is terminated immediately and
sent home. Often we found that the prime contractor instructs
the employees that they are not allowed to inquire or report
trafficking conditions of subcontractors, thereby completing
the conspiracy of silence and mitigating detection of the
crime.
In response to the focal question of this committee about
the effectiveness of the Tafficking in Persons Act on the
process on contingency contracts, it is not had any deterrent
effect.
Several mitigation measures can be taken. I would be glad
to address those in the questions.
Thank you for the time to speak.
[The prepared statement of Mr. McCahon follows:]
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Mr. Lankford. Thank you for your testimony.
I now recognize myself. I am going to do 6 minute question
rounds. Are you okay with that?
Mr. Connolly. Fine.
Mr. Lankford. There you go, we just settled it.
This is one of those moments where you think, okay, where
do we start? All right, let me begin here. Do you feel like,
anyone can answer this, that we have the right policies and
regulations in place? Because this is not some new feature that
we have never heard of; this has gone on now 20 years. All the
way back to Bosnia they were very aware that this has flipped
into our subcontracting and contracting process for overseas
contingencies.
At this point we have added new laws, added new
regulations, added new policies, added new procedures over and
over again, added new officers and lead in it; yet, we still
have stories of this occurring. Do we have the right policies
and procedures and regulations in place, in your perspective?
And anyone can answer that at this point.
Mr. McCahon. Chairman Lankford, members of the committee, I
do believe we have the right regulations in place. The problem
is transparency and reporting. There are not enough agents on
the ground to report this conduct. It has to be the
responsibility of the prime contractor. But now the prime
contractor has no incentive and all the disincentive in the
world to report the conduct. It makes the prime contractor look
bad if they do report it, and they get no incentive for
engaging in reporting.
Mr. Lankford. Okay. I am going to come back to that. Anyone
else have another comment to add to that? Mr. Isenberg.
Mr. Isenberg. Mr. Chairman, I believe that the right
policies are in place, but I believe that some of those
policies and regulations are rarely used, in part due to
opposition from the industry. For example, major trade
associations, I have in mind the Professional Services Council
and the International Stability Operations Association to name
two, have been quite voluble in their opposition to the
Government using its powers of suspension and debarment against
contractors who do wrong things.
Mr. Lankford. But do we have suspension and debarment being
applied to people that are doing human trafficking? If we are
aware that is happening on the ground, do we know of a case
that a contractor has been suspended or debarred?
Mr. Schwellenbach. There was one State Department embassy
subcontractor, I believe in Jordan or somewhere else in the
Lavant, that was terminated earlier this year, according to a
State Department Office of Inspector General report, after the
contracting officer discovered that there was a violation of
the FAR for prostitution. Apparently one of the employees was
being solicited by a manager of the subcontractor.
Mr. Lankford. Okay, so one?
Mr. Schwellenbach. That's all I know of.
Mr. Lankford. As far as we know at this point? I mean, for
a policy that, as Ms. Wyler referenced earlier, has come up
again and again and again, these zero tolerance policy for
this, why is it that I talk to soldiers coming back and ask
them what it was like in the wire, and they tell me stories
about TCNs over and over again in their abusive living
conditions, in the way that they are treated on the ground, the
recruiter fees, how they are trying to get out, they can't get
home. I mean, those are the stories that I hear from soldiers
when they begin to tell me about what was happening on the
ground while they are in Afghanistan. Those are the reports
that continue to come back.
So if we have the right regulations in place, we have a
zero tolerance policy, we have the options in the toolbox,
suspension and debarment, what is holding us back to actually
enforcing this on contractors and subcontractors so we can make
this stop?
Mr. Schwellenbach. I will weigh in here. I completely agree
with my co-panelists here. And while I think there are some
tweaks to law and regulation that would be beneficial, such as
clearing up any ambiguity about U.S. jurisdiction over non-DOD
contractors in overseas contingency operations. I think the
biggest problem is commitment to enforcement of the laws and
regulations on the books.
I didn't get to it in my oral, but in my written testimony
I recount the example of the Nepali laborers who were killed in
Iraq on the Amman to Baghdad Highway. Attorney Martina
Vandenberg, several years ago before a Senate subcommittee,
remarked that the DOD IG, and this was several years ago, keep
in mind, seemed to confuse the principles of civil and criminal
law, and the IG said, well, we couldn't go after the
subcontractor because there was no privity of contract between
the U.S. Government and the subcontractor. But this was a
criminal matter and, according to the Military Extraterritorial
Jurisdiction Act, criminal jurisdiction extends to all tiers of
subcontracting. So if the remarks by the then-acting DOD IG
were correct, they were totally confused.
Mr. Lankford. Well, let me clarify this as well. Do you
have a perspective on what is an appropriate recruiting fee or
these broker fees at this point? For someone to pay a $2,500 to
$5,000 broker fee to someone in a very poor country, and then
they go and they work and they receive less than that, than
what they paid, that is difficult not to define that as
slavery. That is very difficult not to say this is not some
sort of debt bondage, that we put you in $5,000 worth of debt,
and if you work for us in a year you will get your $5,000 back,
maybe, unless you mess up or report what is going on, and then
you will get way less than that and we will send you home.
Is there an appropriate level you would say that is a
recruiter fee?
Mr. McCahon. Chairman Lankford, I believe that there is an
appropriate recruiting fee; it is defined by the host nations.
All of these nations that produce foreign labor have their own
laws. Some say a specific amount, like Kenya, maybe $275;
others will limit it to 1 month of the salary as a maximum
recruiting fee for foreign laborers; which also creates a
conflict within the U.S. Government contracts, which say that
the contractors are abiding by all the laws of the host nation,
wherever they are performing.
Mr. Lankford. But not having to pay for their travel, their
flight, all that stuff in transitioning, that is not an
appropriate level? Obviously, that should be paid for in the
contract.
Mr. McCahon. And in many of the countries, Mr. Chairman,
for instance, Kuwait mandates that the employer pay for those
fees, and the housing and transportation over.
Mr. Lankford. Someone, when we are going through the
contract, we are aware of what it costs to move people into the
country, what it costs for travel, what it costs for a laborer.
So at some point we can say this is out there. We are not
tracking it, but someone signed off on this contract with the
details within it of what that money would pay for, so either
that money is being skimmed off completely by an unscrupulous
contractor or we are aware this is going on. But it can't be
none of the above on that.
With that, I would like to yield to Mr. Connolly.
Mr. Connolly. Thank you, Mr. Chairman.
As I said in my opening statement, taking away human
autonomy is perhaps the most abhorrent crime imaginable, and it
occurs with murder and it occurs with human trafficking. What
you have described is a process of, the most charitable phrase,
indentured servitude. And that is being charitable.
Ms. Wyler, you noted that the 2003 TVPA directed agencies
to cease contracting with firms that engage in human
trafficking or which sexually abuse their employees. Is it
correct that not a single case of trafficking or sexual assault
has been prosecuted under this statute or the 19 other laws,
executive orders, and DOD memos banning such trafficking and
abuses?
Ms. Wyler. Representative Connolly, thank you for your
question. Unfortunately, issues related to the U.S. criminal
justice system and the status of prosecutions in U.S. courts
are beyond the scope of my expertise, but I am happy to share
your question with my colleagues in the American----
Mr. Connolly. Are you aware, Ms. Wyler, of a single
prosecution?
Ms. Wyler. As far as I know, according to the State
Department's last two reports, there have not been
prosecutions.
Mr. Connolly. Right.
Mr. McCahon, why? One thing I gleaned from your testimony,
if I can interrupt, we have created a system of disincentive
for reporting. The prime contractor gets dinged if he is
diligent and says, you know, I have encountered a case here; I
think we need to pursue it. He actually loses if he does that,
if I understood your testimony.
Mr. McCahon. I believe that is correct, sir. I do believe
that is correct. Right now there is no mandate to report it,
and if they do report the misconduct, it has a negative
reflection upon them. To date, the only thing we have seen
reported is when there has been such overwhelming attention to
a given issue, as identified in The New Yorker and by POGO,
that the prime contractor will take action.
And if I might respond to the chairman's question, I think
one of the problems why there is no suspension and debarment is
people don't understand suspension and debarment. I was a trial
attorney for the Army's Procurement and Fraud Division,
Suspension and Debarment Branch. Suspension and Debarment
Branch is not a criminal or civil matter, it is a business
decision by a preponderance of the evidence, whereby the
official makes the determination we don't want to do business
with this company; and it is more likely than not----
Mr. Connolly. Again, a disincentive. If I am a private
contractor, debarment and suspension are not desirable goals.
Mr. McCahon. That is correct.
Mr. Connolly. So why would I want to risk that? And it
seems to me we have the wrong set of incentives and
disincentives in place if we want to really deal with this.
Now, I asked Ms. Wyler, and maybe she is the wrong person
to ask, but I am not aware of a single case being prosecuted.
Are you, Mr. McCahon?
Mr. McCahon. I am not of a single case, nor am I aware of
any suspension or debarment.
Mr. Connolly. So that must mean that our zero tolerance
policy is working, is that correct?
Mr. McCahon. I believe it is a zero tolerance policy on
reporting the conduct.
Mr. Connolly. Well, Mr. Schwellenbach and Mr. McCahon, we
are talking about some very isolated examples, then, right?
This is not a widespread practice. We are not talking about a
lot of people, are we?
Mr. Schwellenbach. My understanding is this could
potentially impact thousands of laborers. I mean, the exact
percentage of the third country national work force that is
subjected to these kind of labor practices is quite large,
although I am not sure if it is the majority or not. Sam might
be more prepared to answer that.
Mr. Connolly. Time is limited. Would you concur it is
thousands?
Mr. McCahon. I would say tens to hundreds of thousands.
Mr. Connolly. Dear Lord. Okay, my goodness. So it is not
some isolated, random practice. We are aware of it. We have a
zero tolerance policy. We have 19 laws, executive orders, and
DOD memos making it very clear we frown on this practice, we
won't tolerate it if it is ever uncovered, but fortunately it
has never been uncovered, at least not rising to the level of a
single prosecution. Is that correct?
Mr. McCahon. That is correct.
Mr. Connolly. Well, then I guess I would ask, these are all
contractors or subcontractors serving the U.S. Government we
are talking about?
Mr. McCahon. Yes.
Mr. Connolly. So to what do you ascribe the apparent
indifference of the U.S. Government and its prime and subprime
contractors with respect to this abhorrent practice?
Mr. Schwellenbach. Well, with regards to suspensions and
debarments, Government agencies are often loathed to suspend or
debar a contractor or subcontractor unless there is some sort
of successful civil action or criminal prosecution, so it
becomes this kind of Catch-22 situation: well, there is no
prosecution or conviction or civil action, so we can't suspend
or debar; and that is a misunderstanding of the suspension and
debarment practice. As Sam mentioned, they can do what are
called fact-based debarments to protect the interests of the
U.S. Government if they can successfully document noncompliance
with U.S. Federal acquisition regulations.
Mr. Connolly. But we are in this system that protects
itself.
Mr. Schwellenbach. Exactly.
Mr. Connolly. Not the victims.
Mr. Schwellenbach. Absolutely.
Mr. Connolly. Not human beings whose autonomy is being lost
or compromised. Because I guess it is inconvenient or--other
than, bureaucratically, debarments and suspensions are messy
and complicated and people don't like them, but, I mean, your
testimony is it could be tens of thousands, maybe even hundreds
of thousands of individuals we are talking about in this victim
pool serving the U.S. Government and its prime contractors, and
we have not had, to our knowledge, this panel, not a single
prosecution. The laws are all in place, the policies are all in
place. We have zero tolerance. And what that system has
produced is zero reporting.
Mr. Schwellenbach. Zero prosecutions.
Mr. Connolly. Zero prosecution.
Mr. Schwellenbach. And there have been cases that have been
presented to prosecutors, but they have declined to prosecute,
at least two that I know of.
Mr. McCahon. Yes, I believe Nick is correct, Representative
Connolly. There was one case in 2009, one case in 2010 when the
DOD IG surveyed all the four Federal law enforcement agencies
on the ground, and they reported one case in each year.
Mr. Connolly. A final question because I have 3 seconds.
Does DOD take this issue seriously, in your view, given what
you just described?
Mr. McCahon. I believe that there are some elements in DOD
that take it very seriously, Representative Connolly, but I
think that the people that can make a difference don't give it
enough attention.
Mr. Connolly. Thank you, Mr. Chairman.
Mr. Lankford. Recognize Mr. Walberg for 6 minutes.
Mr. Walberg. Thank you, Mr. Chairman, and I thank the panel
for being here.
Mr. Schwellenbach, you cut short your descriptions or
stories. I want to give you a little further opportunity to
tell us some of those stories. I mean, you talked about the
Nepalis who were captured and ultimately murdered. I guess we
use that term. But also the fact that one of them was
decapitated and the rest were murdered later on.
Tell us a few more stories, because a panel like this, its
purpose is to get the answers and problems, but I think it is
also to give voice to those who have no voice.
Mr. Schwellenbach. The third example that I wasn't able to
recount in my oral testimony earlier was a case of alleged
labor contracting or labor trafficking in Iraq with a DOD
subcontractor or a State Department subcontractor that was
involved in building the new embassy compound in Baghdad. The
Multinational Force Iraq Inspector General did look into these
allegations that First Kuwaiti was doing this, and according to
an Inspector General memorandum from 2007, they stated that
several laborers reported that fraudulent hiring practices were
used during the recruitment; they stated that promises made and
terms of the original contracts presented to them in their
country of origin were inconsistent with the actual conditions
regarding lower pay, longer hours, no days off of their
employment in Iraq.
The memo also details debt bondage that some of these
laborers faced. A large majority of the workers from the Indian
subcontinent incurred recruiting fees of up to 1 year's salary,
which far exceeded the legal limits of the countries where the
recruitment took place; and in some extreme examples third
country national workers relinquished all pay, all pay, for
between 9 to 12 months of labor. And if that isn't indentured
servitude, I don't know what is.
But that was the third example.
Mr. Walberg. And that was in violation of the country of
origin.
Mr. Schwellenbach. Yes. They could not charge recruitment
fees, but the labor brokers did anyway, and the laborers signed
up with the belief that they would be making more pay when they
eventually got to the country where they were going to do the
work, and they often believed they were not going to Iraq; they
were going to Dubai or some other non-war zone country.
Mr. Walberg. How difficult is it to investigate human
trafficking allegations?
Mr. Schwellenbach. Well, if you don't talk to the victims,
it can be very difficult, and that is one problem I have seen
in a few of these investigations, is the victims say they were
not interviewed by U.S. Government investigators. So that is a
basic principle of criminal investigation, is you want to talk
to the victim. I mean, they are a key witness.
Mr. Walberg. So it is not difficult if you can talk to the
witness, but if you choose not to talk to the witness----
Mr. Schwellenbach. I don't want to minimize the difficulty
of these investigations; they span continents, there is often a
complex chain of subcontractors and labor brokers and
recruitment companies. And sometimes I also think the
investigators sometimes use a narrow lens when they look at a
potential crime. They don't look at the procurement fraud
elements of trafficking violations, and I think they would be
wise to do so.
Mr. McCahon. If I might, Representative Walberg, I also say
that it isn't that difficult if you really take an interest in
it. My colleague, Sindhu P.K., and I recently interviewed a
dozen victims in the south of Indian Chunai and we interviewed
many, many victims on the ground in Iraq. The problem is, and
one of the problems with the DOD IG report, when you read about
the people they interviewed, they never spoke to a victim; they
spoke to Government personnel, they said they even spoke to
some of the management of the contractors.
Mr. Walberg. But not the victims.
Mr. McCahon. But never the victims. And the victims also
need to be protected, because we have had situations when we
would speak to a victim and the next day they are on a plane
home. In fact, we interviewed these dozen men in Chunai this
summer, that is exactly what all of them said, they knew they
couldn't speak to an American because, if they did, they would
be put on a plane home, which meant no job, they still owned
the loan shark, and some very serious consequences for them.
Mr. Walberg. And they don't perceive that the DOD would be
of any help or protection for them?
Mr. McCahon. One of the things that we found was echoed in
Sarah Stone's comments in The New Yorker, that please tell the
American people, because if the American people know what is
going on here, they will help us. And we heard that several
times in our interviews. They believe that if the American
people know how they are being treated, that we would help
them.
Mr. Walberg. Mr. Isenberg, what needs to happen to increase
oversight and enforcement?
Mr. Isenberg. Well, I would say that somebody within the
hierarchy of the various executive departments needs to
emphasize that this is a real problem. As an example, the
person responsible for bringing to my attention, at
considerable cost to themselves, what happened with Najlaa had
originally tried contacting the U.S. Government directly. That
person had sent letters and emails to Department of Justice,
Department of Defense, USAID, Department of State.
Mr. Walberg. With no results?
Mr. Isenberg. No results except that earlier this year that
person finally got contacted initially via email, more than 10
months later, after that person had originally contacted that
agency, to say we are in receipt of your email and would like
to talk to you more about it. Since then there has been an
interview of that person and phone calls, and presumably they
are now looking at it. Where the status of that is, I don't
know, but clearly there is no excuse, in my mind, for a 10
month delay between receiving information and getting back to
that person.
Mr. Walberg. I thank you. Thank you for bringing light.
Yield back.
Mr. Lankford. Thank you, Mr. Walberg.
Let me do a quick question as well. On the investigation
side, I can fully appreciate this becomes quickly a he said-she
said, where an investigator goes in, talks to a third country
national who is terrified and says, I paid $5,000. There is a
language barrier, there is all kinds of difficulty in
investigation there. Then the subcontractor or the prime,
either one, says, no, we didn't do that; no, our recruiters
don't. Can you find that recruiter? No, they are just some firm
we used overseas. So validating these things, I would assume,
would be incredibly difficult to do. The problem is just the
frequency of the number of stories, you would assume someone
would rise up and say we have to start tracking this in some
way.
Right or wrong on that?
Mr. Schwellenbach. You are absolutely correct, Chairman.
Building an airtight criminal case can be quite difficult,
especially when you have that kind of he said-she said
situation. But I think if there was--there is certainly, I
think, plenty of opportunities to build criminal cases, and I
think a high profile criminal case that leads to successful
conviction could have some sort of deterrent effect. And I do
think, given the plethora of allegations out there, I think
something could be made of at least some of those.
Mr. Lankford. Right. But you go back again to suspension
and debarment does not have the same threshold.
Mr. Schwellenbach. Exactly. You have a lower----
Mr. Lankford. At a minimum. So the tools and the options
are out there to do something. The question is are we doing
anything other than saying it has to be included in the
contract, which even then, through the statistics, even the
basic statement of the FAR and that we don't do trafficking in
persons, that is not always included in contracts.
Mr. Schwellenbach. Yes. As the DOD IG has found in some of
its audits, all the contracts need to have this clause;
sometimes the clause is just missing. But you are absolutely
right, suspension and debarment could be a tool used to protect
the Government's interest, and it is not used enough.
Mr. McCahon. Chairman Lankford, I would also mention it is
not as difficult as it might appear at first. What the
subcontractor usually does is deny the representations made by
the recruiter. One need only see who entered into the agreement
with that recruiter to start their investigation. That is the
person who has the responsibility.
What we have found is oftentimes there is no paper trail.
The contractors say, well, we don't really have a written
agreement with the recruiter. We will say, well, how do you
flow down the clauses, then, that are mandatory; which goes to
the whole suspension and debarment. I think that it is
difficult to prosecute these cases because of the
jurisdictional issues and also the distance and language
barriers. It isn't difficult to do a fact-based debarment.
Mr. Lankford. Okay.
Mr. Connolly, would you like to ask some questions?
Mr. Connolly. It is exactly that area I wanted to ask you
about, Mr. McCahon, because in listening again to your
testimony, it seems to me that--well, first of all, this is all
about money, so, frankly, going after criminal prosecution may
be ideally a good thing to do down the road. But what we need
to do is change the incentive-disincentive system, and it is
all about money; for recruiters, for the workers, the lure of
that money, and for the subcontractors who are getting paid by
the U.S. Government through the prime.
It seems to me that the system you described in your 10-
point sort of list, the weak link is the recruiting,
potentially. If we really want to go after this practice,
requiring documentation, working with the host government
getting at deceptive practices, laying out in more contractual
terms exactly what is expected and exactly what it is going to
cost, and how we document that those payments are made or not
made, or they are exorbitant or they are not.
Could you talk just a little bit about that and what is the
U.S. Government doing back in the host country with those
recruiters?
Mr. McCahon. I would be glad to address that,
Representative Connolly. One of the things that the U.S.
Government can do is mandate in the contract that every worker
receive a copy of their contract prior to departing their host
nation in a language that they understand, in their host
language. Doesn't cost anyone anything. Because you hit it upon
the head, the crux of this is deceptive recruiting. It is all
deceptive recruiting about where they are going to work, how
much money they are going to make paying the commission.
Another thing that they could do is make the subcontractor
required to compensate that individual 1 day after they depart
their host nation. The men we talked to languished for months
in warehouses until they can be pulled off the shelf like a
widget and then supplied and put into the supply system. They
get no money, only subsistence food. They are not making
payments to their loan sharks or anything like that. So you
could make the subcontractor require to be responsible and also
make sure that these recruiting agreements are in writing. Very
few of the people we talked to ever had a contract. So those
few simple steps would mitigate this significantly.
Mr. Connolly. And, to your knowledge, has there been such
discussion with DOD in imposing such requirements so that we
can try to get our arms around deceptive recruiting practices?
Mr. McCahon. My colleague and I have forwarded a summary, a
four-page memorandum on solicitation strategies and contract
provisions that can be used. We forwarded it to DOD and
Department of State for consideration.
Mr. Connolly. When?
Mr. McCahon. To Department of State about 15 months ago,
and to the Department of Defense maybe 6 or 8 months ago.
Mr. Connolly. And the reaction?
Mr. McCahon. We have worked with the chief of the CTIPS
operation at DOD and I believe they are committed to this, and
we recently spoke at a conference, a CTIPS conference in August
on the topic.
Mr. Connolly. You have spoken about it at a conference.
Mr. McCahon. Yes, sir.
Mr. Connolly. But there has been no formal response in 15
months to your State Department memo or in 6 months to your DOD
memo.
Mr. McCahon. Not to the State Department at all, sir.
Mr. Connolly. Let me ask this question, again on the
recruiting side. Obviously, when a recruiter--it is one thing
to engage in deceptive practices on the financial end, but the
purpose of your labor is a different matter. If I am recruiting
and I tell you you are going to go to a five-star hotel and you
are going to serve fancy dancy clientele, and you are going to
be rich from the tips alone, and, instead, I am actually luring
you into a prostitution ring where you are serving whoever in
Iraq or some other war zone, presumably somebody at the
receiving end knows full well what I am doing, and so do I. The
only person deceived is the poor victim.
Mr. McCahon. Yes.
Mr. Connolly. What has been done to try to crack down on
that practice, that aspect of human trafficking?
Mr. McCahon. To my knowledge, Representative Connolly,
nothing has been done. I spoke at a conference in 2007
specifically entitled Things That Government Contractors Can Do
to Mitigate Trafficking, and there was a major contractor who
spoke ahead of me who was vice president of contracting,
currently one of the LOGCAP contractors. His response, when he
was asked what they were doing to mitigate trafficking, he said
we have no privity of contract with the employees of the
subcontractor, therefore we are taking no action; it is not our
responsibility.
So I think what we see is all the way down the trafficking
chain people disavow the responsibility for it.
Mr. Connolly. I have to say, Mr. Chairman, I am just
stunned at this testimony, I mean, stunned, that in the name of
the American people these practices have been allowed and we
have turned a blind eye to them for either bureaucratic reasons
or because we have what we consider to be more important parts
of the mission. And it seems to me that whatever it is we are
fighting for in Iraq and Afghanistan under the banner of our
flag, allowing these practices compromises it all. It couldn't
be more antithetical to American values what you are
describing.
I look forward to the testimony of the next panel.
Mr. Lankford. As do I.
Thank you, ladies and gentlemen, for being here as part of
this first panel.
With that, we will take a short recess to reset for panel
number two.
[Recess.]
Mr. Lankford. We will return from recess.
Thank you for resetting and for waiting. I assume most of
you all were in the earlier panel as well and got a chance to
enjoy some of the conversation that was occurring. I would like
to go ahead and, pursuant to all committee rules, swear in the
witnesses before they testify.
Would you please stand and raise your right hand? Thank
you.
[Witnesses sworn.]
Mr. Lankford. Thank you. You may be seated.
Let the record reflect the witnesses all answered in the
affirmative.
In the second panel we have Ms. Evelyn Klemstine, the
Assistant Inspector General for the Department of State. Thank
you for being here. Ambassador Kenneth Moorefield, the Deputy
Inspector General for the Department of Defense; Ms. Linda
Dixon, the Program Manager for Combating Trafficking in Persons
Office for the Department of Defense; and Mr. Mike Howard is
the Chief Operations Officer for the Army and Air Force
Exchange Service.
I am grateful that you are here and looking forward to
being able to receive your testimony and be able to hear what
is going on. Obviously, your written testimony has already been
submitted. That will be part of the record. Be honored to be
able to receive oral testimony at this point.
Ms. Klemstine.
STATEMENTS OF EVELYN R. KLEMSTINE, ASSISTANT INSPECTOR GENERAL
FOR AUDITS, U.S. DEPARTMENT OF STATE; KENNETH P. MOOREFIELD,
DEPUTY INSPECTOR GENERAL FOR SPECIAL PLANS & OPERATIONS, U.S.
DEPARTMENT OF DEFENSE; LINDA DIXON, COMBATING TRAFFICKING IN
PERSONS PROGRAM MANAGER, U.S. DEPARTMENT OF DEFENSE; AND
MICHAEL P. HOWARD, CHIEF OPERATING OFFICER, ARMY AND AIR FORCE
EXCHANGE SERVICE
STATEMENT OF EVELYN R. KLEMSTINE
Ms. Klemstine. Thank you, Chairman Lankford, Ranking Member
Connolly, and members of the subcommittee, for the opportunity
to discuss our Office's oversight of the Department's
compliance with the Federal Acquisition Regulations, FAR
Trafficking in Persons clause.
OIG has actively conducted TIP oversight to include making
it an area of emphasis for audits, inspections, and
evaluations. Specifically, the objective of our October 2011
audit on the Bureau of East Asian and Pacific Affairs, EAP, was
to measure the extent to which Department personnel and
contractors were complying with laws, regulations, and policies
established to prevent and detect TIP activities on Department-
awarded contracts.
While the audit did not find evidence of any form of TIP
involving contractor employees or contractors, the Department
must strengthen implementation of its zero tolerance policy
regarding TIP. We found that Department employees in the Asia
Pacific Region were not uniformly aware of what constitutes TIP
activity, the penalties for TIP violations, where to report
suspected violations, and whether the TIP policy applies to
Department contractors.
A general awareness survey was distributed to employees in
the Asia Pacific Region to assess whether the employees were
aware of TIP issues. One thousand, seven hundred two Department
employees responded to the survey, which disclosed--that 46
percent of the Department employees either were somewhat aware
or not at all aware of the zero tolerance. Forty-three percent
of the employees did not know where to report suspected
violations and 79 percent of the employees had not received
training about TIP.
We also found that contractors in the region were not
always aware of or complied with their obligations under the
FAR clause. We visited 24 contractors whose contracts included
the FAR clause and found that 83 percent had not notified their
employees of the TIP policy and 92 had not informed the
employees of the consequences of violating that policy.
Additionally, six contractors hired subcontractors to perform
services; however, no contractors had included the required FAR
clause in their subcontracting agreement.
We found that Department contracting officials did not
consistently include the FAR clauses in contracts. Of 41
contracts reviewed in the region, we found that 27 percent of
them did not contain the clause and 8 contracts did not contain
the correct version of the clause. Further, even when the
clause was contained in contracts, Department contracting
officials did not monitor contractor compliance with the
clause.
Inspectors also found that an embassy contract did not
always include the FAR clause. In fiscal year 2010, inspectors
reviewed contracts at 20 posts and found that 25 percent of
them had contracts without the required clause. In fiscal year
2011, teams addressed the same issue at 16 posts and found that
19 percent of them had contracts without the required clause.
When inspectors found contracts that did not include the FAR
clause, embassy staff immediately began the process of
modifying the contract.
During the October 2011 audit, the Department issued a
Procurement Information Bulletin [PIB], on Combating
Trafficking in Persons, which requires contracting officers to
ensure that all solicitations and contracts over the micro-
purchase threshold of $3,000 contain the TIP clause. The PIB
also provides guidance to contracting officer representatives
[CORs], on how to monitor TIP compliance. We expect the new
guidance will enhance the Department process for monitoring
contractors for TIP compliance.
We recommended that the Department implement a policy in
the Foreign Affairs Manual on TIP, expand the Department's code
of conduct to prohibit TIP activities, and designate an office
to which employees and contractors should report suspected
violations. In addition, the Department should expand its TIP
training to all Department employees.
In response to the audit, the Ambassador-at-Large for the
Office to Monitor in Combat Trafficking in Persons stated that
his office found the report helpful if somewhat troubling, and
there was undoubtedly a need for increased awareness and
understanding of human trafficking in the State Department. The
Ambassador generally agreed with all the report's
recommendations and stated he was taking corrective actions.
OIG also released an evaluation in January 2011 of six
contracts in Arab states in the Gulf which assessed the risk of
TIP-related activities. Although we found no direct evidence
that contractors violated provisions of the FAR clause, we
found indicators that increased the likelihood that a TIP
violation could occur. Specifically, our team found that 77
percent of contract employees interviewed had to pay fees up
front during recruitment, which could indicate an increased
risk of debt bondage, and that every contractor reviewed
confiscated workers' passports. In addition, contract workers
at all posts expressed frustration with inconsistent payments,
confusing pay stubs, and withheld wages. More than 70 percent
of the workers interviewed also reported that they lived in
overcrowded, unsafe, or unsanitary conditions.
TIP monitoring was ineffective because CORs did not have
standard procedures to monitor the implementation of FAR. We
recommended that posts strengthen TIP monitoring procedures and
the Department provide detailed guidance on how to monitor
contractors' practices.
Negative contracting practices can affect foreign workers
and reflect poorly on the United States. We believe that
adopting a strong TIP program which includes mechanisms to
increase employee awareness, report suspected TIP violations,
and provide for a strong monitoring program of contractors will
help TIP and ensure that foreign workers are treated fairly and
within the law.
Once again, thank you for the opportunity to present our
work on this important topic. I am pleased to answer any
questions you may have.
[The prepared statement of Ms. Klemstine follows:]
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Mr. Lankford. Thank you.
Ambassador Moorefield.
STATEMENT OF KENNETH P. MOOREFIELD
Ambassador Moorefield. Good morning, members of the
committee. Chairman Lankford and Ranking Member Connolly and
distinguished members of this committee, I want to thank you
for the opportunity today to discuss our oversight reporting at
the Department of Defense Inspector General's Office with
respect to trafficking in persons. I have also presented a
written statement which I ask be submitted for the record.
The DOD IG previously presented testimony on oversight
efforts concerning the topic of human trafficking in 2004 and
again in 2006. Our first assessment was initiated in response
to a request from Members of the Congress to the Secretary of
Defense, asking for an investigation into allegations
concerning the U.S. military leadership in South Korea and
whether or not they had been implicitly condoning sex slavery
in that country. In addition to that project, DOD IG initiated
another parallel assessment into allegations that the European
Command activities in Bosnia-Herzegovina and Kosovo also had
similar problems.
In addition to the Command actions taken in response to our
reports to prohibit and prevent sex slavery in these two
environments, both assessments recommended strongly that the
Secretary of Defense issue a policy statement that clearly and
unambiguously set forth DOD opposition to any activities
promoting, supporting, or sanctioning human trafficking, and
the Department subsequently did that. Further, DOD established
annual CTIP awareness training in 2004 for all service members
and DOD civilians, which continues until today.
In a followup initiative, the DOD IG Initiated an
evaluation of CTIP efforts across all of DOD in 2005. The
resulting report recommended that the Office of the Secretary
of Defense develop CTIP policy and program guidance. In a
response, the Department issued DOD instruction, Combating
Trafficking in Persons, that assigned CTIP program
responsibilities across the Department.
Our most recent efforts were conducted as a result of the
William Wilberforce Trafficking Victims Protection
Reauthorization Act of 2008. This act, as you know, requires
State Department, USAID, and DOD IGs to each report each year,
in January, for three consecutive years beginning in January
2010, on a sample of contracts or subcontracts under which
there is a heightened risk that a contractor may engage
knowingly or unknowingly in acts related to trafficking in
persons.
To accomplish this, the DOD IG has consulted each year with
the State Department's Office to monitor and combat trafficking
in persons, as well as the DOD CTIP Program Office. We selected
four combatant commands to conduct these reviews: the U.S.
Pacific, Central, European, and Africa Commands. To date, we
have issued two of these reports, covering the Pacific and
Central Commands, and the report on European and Africa
Commands will be issued in January 2012.
In the U.S. Pacific Command overview, we found the Federal
Acquisition Regulation, the FAR clause, Combating Trafficking
in Persons, present in 93 percent of the contracts. The DOD IG
recommended in its final report that the Director, Defense
Procurement, and Acquisition Policy modify contract writing
software to ensure that the FAR CTIP clause was automatically
included in all contracts, and this was accomplished.
In the U.S. Central Command, we found the CTIP clause
present in 79 percent of the contracts reviewed. The team did
identify good practices had been taken by several U.S.
contracting commands in Kuwait who had incorporated CTIP
compliance items in their quality assurance reviews. The team
found, however, that contracting officers in none of the
commands had ready access to TIP violation information from DOD
criminal investigative organizations. Providing timely
communication of TIP-related indictment and conviction
information to DOD contracting organizations remains a systemic
challenge.
For each reporting year of our investigations in the last
two-plus years, the teams have received DOD criminal
investigative data on possible TIP violations. Two TIP
incidents have been reported so far. In both cases the
contractor had dismissed the offending employees and there was
no further judicial investigation taken or certainly judicial
action.
During our DOD field work, we have noted that
nonappropriated funds were not required to include the FAR CTIP
clause in their contracts. As a consequence, the Army and Air
Force Exchange Service and Navy Exchange were included in
assessments of our U.S. Central Command, European and Africa
Commands, and in December 2010 the Navy Exchange Command
Headquarters recommended changes inserted in DOD Instruction
Nonappropriated Fund Procurement Procedure, which required
inclusion of a CTIP clause in all nonappropriated fund
contracts, and as of October, as of this month, that
instruction revision process is still ongoing.
I also want to report that the DOD IG has self-initiated an
assessment of CTIP program compliance and performance among DOD
components. So far, over 70 DOD organizations have been
reviewed, and this report will also be issued in January 2012.
Finally, let me emphasize that the DOD Inspector General
remains committed to providing oversight support of the U.S.
Government's zero tolerance policy against trafficking in
persons. We will continue to evaluate DOD CTIP performance and
compliance.
On behalf of DOD IG, I thank you again for this opportunity
to testify.
[The prepared statement of Ambassador Moorefield follows:]
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Mr. Lankford. Thank you.
Ms. Dixon.
STATEMENT OF LINDA DIXON
Ms. Dixon. Mr. Chairman, Ranking Member Connolly, and
members of the subcommittee, thank you for this opportunity to
discuss past and ongoing DOD efforts to combat trafficking in
persons.
The Department of Defense Trafficking in Persons, TIP,
Program was designed to ensure that our military services,
combatant commands, and Defense agencies have the necessary
tools to stop it. Training is mandatory for all employees and
is mandated by DOD instruction first published in February 2007
and revised September 15, 2010. The instruction is directive in
nature and established policies and assigns responsibilities
for combating trafficking. The policy recognizes DOD's
opposition to trafficking in persons, prostitution, forced
labor, and any related activities that may contribute to the
phenomenon of TIP. Engaging in trafficking in persons is
incompatible with DOD core values.
To help enforce the policy, heads of DOD components must
designate a component Combating Trafficking in Persons, CTIP,
Office of Primary Responsibility and they must assign a program
officer. We maintain a list of all the components points of
contacts within our office. We maintain this list and we also
provide this information to our DOD IG when they conduct their
periodic evaluations of the DOD CTIP program.
DOD started training on TIP using a multimedia Combat
Trafficking in Persons Program in January 2005. Our training
consists of general awareness training, law enforcement
training, and training for our leadership. As well, we also
have PowerPoint presentations for our training. Our general
awareness training is now available on mobile devices.
An annual DOD CTIP conference has been held ever since
2007. A CTIP workshop was held in August 2011. Best practices
among our components are shared and we receive information from
the U.S. Government agencies, as well as from non-governmental
organizations at our conferences and workshops. Our DOD CTIP
Web site, ctip.defense.gov, displays information regarding our
trafficking in persons training, events, and links to other
agencies' TIP Web sites.
In response to early concerns about possible labor
trafficking in subcontracts in Iraq, DOD took swift action. The
first TIP clause was in the Defense Federal Acquisition
Regulation supplement, DFAR, as an interim rule and was
published in the Federal Register in October 2006. The clause
required contractors to establish an awareness program to
inform employees regarding trafficking in persons.
The Federal Acquisition Regulation published a TIP clause
in 2009 that required the contractor to notify its employees of
U.S. Government's zero tolerance policy and to take appropriate
action against employees of subcontractors that violated the
policy. It did not require contractors to establish an
awareness program for their employees.
When the FAR rule was published, the DFAR rule clause moved
to become program guidance for our contractors regarding DOD's
zero tolerance policy and CTIP training program. A new DFAR
requirement soon to be published in the Federal Register adds
additional contract administration duties to maintain
surveillance over contractor compliance with trafficking in
persons for all DOD contracts.
In December 2010, the Defense Incident Base Reporting
System, DIBRS, was updated with the new FBI TIP offense codes,
commercial sex acts, involuntary servitude, and prostitution
offense, allowing the reporting of TIP offenses by our DOD law
enforcement agencies. Human trafficking public service
announcements [PSAs], two 30-seconds and two 15-seconds, aired
on our Armed Forces Network from October 2009 to October 2010.
DOD released four new PSAs in September 2011 that will air for
5 years.
Trafficking in persons is a form of modern day slavery, and
DOD will do our part to strive for its total abolition.
Thank you again for scheduling this hearing, and I look
forward to your questions.
[The prepared statement of Ms. Dixon follows:]
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Mr. Lankford. Thank you.
Mr. Howard.
STATEMENT OF MICHAEL P. HOWARD
Mr. Howard. Mr. Chairman and members of the subcommittee,
again, thank you for the opportunity to testify today. I am
looking forward to sharing the measures taken by the Army Air
Force Exchange Service to prevent human trafficking in
Southwest Asia.
AAFES is a joint military activity providing merchandise
and services to active duty, reserve, National Guard, and their
families worldwide. AAFES is responsible for 3,100 facilities
worldwide in 30 countries, 5 U.S. territories, and 50 United
States. We have 43,000 employees. Thirty percent of those are
family members of the military active duty. Another 1 percent
are military members on their part-time working after-duty
hours. We take great pride in our employee relations, no matter
where they serve.
Combating human trafficking is a complex and challenging
mission. The responsibility is substantial, but our policy is
clear: zero tolerance. My report today will confirm that AAFES
has implemented and is enforcing a comprehensive Combating
Human Trafficking program throughout our contingency area of
operations.
AAFES runs exchange facilities in eight countries, spread
over 71 locations in combat zones in the United Central Command
area responsibility. The core of the AAFES team consists of 300
direct hire associates; however, we have over 3,100 individuals
that are third country nationals that are hired to provide
additional services to the military. These manpower agencies
and concessionaires are often third country nationals and they
are an integral part of our team. In fact, without third
country nationals we would not be able to provide world class
support to our deployed troops and customers.
Today I would like to highlight three essential elements in
AAFES's fight against human trafficking: an enforceable bill of
rights for third country national associates, consistent
inspection in reporting to ensure compliance, and effective
communication to increase awareness of command and the workers
and planning for the future also.
AAFES has an inherent responsibility and contractual right
to ensure humane treatment of third country nationals working
in our facilities. The first element in deterring human
trafficking among the third country national population is an
enforceable bill of rights. In 2008, AAFES developed the bill
of rights, which contains non-negotiable aspects of working for
the Exchange. The right to elevate complaints without fear of
reprisal, to have a copy of the contract under which they are
employed, to receive pay in a timely fashion, to leave their
deployed location at any time. These are among the inalienable
rights that each of the third country national workers working
with the MPA agency has to have.
One of the most important of these rights is the freedom to
retain possession of their passport. The bill of rights is very
clear: at no time will any official, either contractor or
AAFES, will withhold a passport of a third country national
worker. This bill of rights is part of every manpower agency
and concession contract we have, which ensures AAFES has legal
authority to enforce it.
The second component of the AAFES program is frequent
inspection and mandatory reporting to enforce the bill of
rights, especially the right to maintain passports. AAFES
leaders ensure manpower agencies and concessionaire contractors
do not withhold passports of third country nationals working in
our facilities. As a part of the policy, AAFES team leaders,
our service business managers, food business managers, and
other direct hire AAFES associates in leadership positions are
required to conduct 100 percent inspections every month to
ensure that the third country nationals of manpower agencies
and concession contracts are in possession of their own
passports.
Leaders report results of the monthly passport verification
inspections through the chain of command to the AAFES Regional
Operations Center and the Contracting Officer Representative,
documenting any contractor employees that do not or cannot
present their passports. AAFES has a zero tolerance of
violation of this policy. Corrective action to contractors may
include a warning letter or a cure notice, as we call it, which
gives the contractor the opportunity to address and rectify the
issue; termination for default and/or referral to criminal or
civil authorities for enforcement.
Finally, effective communication and command level
oversight is the heart of the AAFES Combating Human Trafficking
program. To make certain AAFES managers and third country
nationals understand Combating Human Trafficking policies and
procedures, the AAFES bill of rights, posted in prominent areas
in their workplaces, have been translated into 11 languages.
The AAFES Inspector General conducts sensing sessions with
third country nationals to collect independent feedback about
the program and our education efforts.
Metrics from the Combating Human Trafficking program are
incorporated into AAFES' Balanced Scorecard Management program.
The scorecard information regarding passport inspections,
proper living conditions, communication efforts, and fair pay
are measured and provided to AAFES leadership to ensure the
program is implemented and enforced throughout the contingency
area and to identify areas for improvement.
I am pleased to say that the AAFES efforts to condemn and
combat this serious crime has been successful. Now completing
our third year of the program, AAFES has achieved these
following results: Because of our efforts, third country
national workers are now in possession of their own passports,
several have been liberated from involuntary servitude and been
able to return to their own home country as a direct result of
this program.
AAFES's Contracting Officer Representative in Kuwait and
Qatar and UAE was cited in January 2011 by the DOD Inspector
General for outstanding work in combating human trafficking.
In the January 2011 report, the DOD IG inspection cited
AAFES as an excellent example of Combating Trafficking in
Persons awareness and contract quality assurance that merits
being considered for replication.
Regardless of our significant achievements, human
trafficking still exists, and AAFES must and will remain
vigilant in these efforts to combat it.
We recognize the threat to basic human rights and the zero
tolerance for it. AAFES does not have the power to eradicate
this scourge throughout Southwest Asia. We do have the power to
fight it to our best abilities so that our contract workers are
not victimized. We make it clear to our contractors: if you
want to do business with AAFES, then you will not engage in
human trafficking AAFES does not have police powers; we cannot
enforce contractors to do anything. What AAFES does have is
power of contracting, which in many ways is more powerful than
police authorities. The ability to take the contract away for
violations of our policy is very persuasive; our contractors
respond quickly.
We might not be able to change the world, but we can and we
do combat human trafficking. I look forward to your questions.
[The prepared statement of Mr. Howard follows:]
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Mr. Lankford. Thank you. Thank you for all your testimony.
Let me say, first, you will find in Members of Congress and
those that are included, they can all speak for themselves as
well, we have tremendous honor and respect for the work that is
done by DOD and the State Department. We are Federal employees
as well. We get it. You are also, I am sure, when you got out
of bed today, said I can't wait to go do a congressional
hearing on this. You also understand you are getting the full
heat for what is really happening beyond you. We understand
that as well. My goal with this hearing today, though, is to
find ways to get this to stop.
Are any of you ready to go on record right now and to say
there is no one in State Department or in DOD, that says there
is currently no one that is being trafficked right now?
[No response.]
Mr. Lankford. We know this reality is out there. Whether it
be one or whether it be 10,000. And it is working through the
process to try to work through. We have 19 or 20, as Mr.
Connolly mentioned before, policies and procedures that are
major pieces that are there. You have all kinds of process
pieces that are in place. The issue in our conversation today
is how do we move from these things that are in place to this
has gone away. We now have the things in line on that.
So I want this to be a dialog today as we go through these
questions, so let me just field some questions and go through
some things.
Mr. Howard, you mentioned you have the power of contracting
and of making those decisions of, if a contractor is out of
bounds, not doing contracts with him anymore. How often does
that occur?
Mr. Howard. Chairman Lankford, we have done six cure
letters. The majority of these were for withholding passports,
and the contracting management agency did the corrective
action; there was no more disciplinary action after that. But
it does, when we do that cure letter, it is the first step
toward termination. If they did not adhere to that, the second
one would be----
Mr. Lankford. Okay, any others beyond just the passport
issue on that?
Mr. Howard. No, it is just the passport, the withholding
the passport.
Mr. Lankford. The reason I say that is I have talked to
some military personnel coming back as well and saying that is
a standard. If you work inside the wire, you have to have your
paperwork with you; you have to have the designation on you.
They need to know who is walking around.
Mr. Howard. Yes.
Mr. Lankford. So that is not only just, obviously, your
requirement, that is if you are going to be on that base
especially, that is their requirement as well.
What about the next step of the issue of the recruiting
fees and the brokers fees? Because that is where this begins.
If someone is recruited and they are going to work for the
State Department or the Department of Defense even secondarily,
through AAFES or whatever it may be, and they are coming
through the process, do we have verification from them or
anyone holding a conversation with that person that is now
working on one of our bases or one of our embassies how much
did you pay to get this job?
Mr. Howard. I cannot say that for the record. The
discussion is there. We do ensure they have the contract, we do
ensure that their fair pay is documented in the contract. But
as far as prior to that, the fees and so forth, I am not aware.
I could check back on that, take it for the record.
Mr. Lankford. Okay. Because that is where, obviously, this
begins.
Mr. Howard. Right.
Mr. Lankford. Do we have any kind of tracking in place that
a subcontractor that has the recruiting responsibilities, that
they are doing a contract with them that we can see is coming
from their home country that shows how much they paid in
recruiter fees? Is any of that in the chain at all?
Mr. Howard. I would have to check with our procurement to
make sure, and we can take that for the record.
Mr. Lankford. Okay. The effective communication part of
that, obviously, that becomes a big issue. Posting something
and translating it into languages, that is a good start, but if
they are fired for talking to American leadership, or an
investigation begins and suddenly that person disappears, or as
I have had conversations with military personnel that have said
some of these bosses will just release a person for the
slightest thing in their encounters with American personnel.
This person, let's say, paid a $5,000 fee to be able to
come, which they took out a loan for. They get there, they work
for 3 months, they find out it is terrible, talk to an American
and say that this is a problem, then they are gone. Now they
have lost their $5,000, they worked 3 months as a slave in
horrible conditions, and they are out before the reporting
occurs.
It is the tracking of all of that. Do you have a sense that
any of that may be occurring?
Mr. Howard. Well, we ensure that they get their monthly
pay. We also ensure that they are aware of the contract. Our
contracting officers representative in country visits sites
regularly and talks to the associates and has a real good
working relationship with the third country nationals, and I
believe has a very good back and forth flow of information. So
if one had seen any issues of that, it would have been brought
to our attention, and she had no recollection of that.
Mr. Lankford. Okay. It is a struggle when we hear so many
stories that we have a zero tolerance policy, yet these stories
continue to rise up still, and we are still seeing this as a
practice of whatever scale that that may be. And I know that we
can all have different numbers of what scale this may occur,
but it is difficult for me to say we have had these letters
that have gone out dealing with passports, but we are not
dealing with recruiter fees, we are not dealing with housing
issues, for instance, and are they in the 50 square feet
required housing; just the basics of how we care for people
that are caring for us.
Mr. Howard. Chairman Lankford, we stress also the living
conditions. If our own AAFES associates are in trailers, our
third country nationals will be in trailers. If we are in
tents, then the same thing. Whatever the military is in, we
have that same living standard for our own associates, as well
as our third country nationals.
Mr. Lankford. Okay.
Ms. Dixon, let me ask who is responsible for assuring that
these contracts are fulfilled? Let me just give you an example.
Someone that is on the ground, begins to get reports that they
have recruiter fees, that their living conditions are not good,
they are being mistreated, whether it is sexual abuse or
whatever it may be. Who begins to follow through the process of
assuring that the contractor is identified, that we don't have
a continuing pattern of this occurring? Does that make sense?
Ms. Dixon. I don't want to step out on I am not sure, but I
believe it should be the contracting officer and contracting
officer representative that monitor the contract. Those people
should be the ones responsible.
Mr. Lankford. Do they have adequate conversation time with
the people that are on the ground, these third country
nationals?
Ms. Dixon. I can't really speak to that. I will definitely
take that for the record.
Mr. Lankford. That becomes the challenge. If the person
that is responsible for overseeing is not interacting with the
third country nationals to see if that is actually being
fulfilled as promised, then we have a breakdown in that as
well. And I am confident in the AAFES area and other areas
these American companies that are there represented, whether
they be fast food or product or whatever it may be, I am sure
they would be mortified to know that some of the employees of
their company in other countries working for American soldiers
have the possibility of being in indentured servitude. I am
confident none of those American companies want that to be able
to get out or would want to be able to see it, nor would we, as
American citizens and taxpayers, want to know that any of our
tax dollars or our process of dealing with our own soldiers and
the folks that are service members on that.
There will be plenty of questions, we will have several
rounds, get a chance to talk through, and we will have this
ongoing conversation on that. I would like to be able to
recognize Mr. Connolly for 6 minutes.
Mr. Connolly. Thank you, Mr. Chairman. If I could just pick
up on that last point.
Ms. Dixon, I am not sure I understood your answer to the
chairman's question. You said you would have to get back to us
on the record. Your title is Combating Trafficking in Persons
Program Manager. Do you get out in the field? Do you meet with
contractors and subcontractors to satisfy yourself that this
practice is not as widespread as testimony indicated?
Ms. Dixon. Yes, sir, I do go out and talk to contracting
officers. I have been invited to come and do--I try to do
outreach training to----
Mr. Connolly. Have you been to Iraq?
Ms. Dixon. No, I have not. I have not been to Iraq.
Mr. Connolly. And you are the program manager for Combating
Trafficking in Persons.
Ms. Dixon. Correct. I rely on our Inspector Generals in-
country, as well as----
Mr. Connolly. Ms. Dixon, we just heard testimony that this
is a widespread problem. We are talking about human beings who
are being forcibly recruited and lured into employment on our
behalf, and you have not made it your business to go and kick
the tires and check the dipstick to ascertain to your own
satisfaction that these reports are accurate?
Ms. Dixon. No, I have not.
Mr. Connolly. Do you think it might be your responsibility
to do that?
Ms. Dixon. Definitely.
Mr. Connolly. Thank you.
Ambassador Moorefield, I placed in the record this
statistic, that not a single prosecution with respect to this
kind of human trafficking has yet been brought by the
Department of Defense against any contractor or subcontractor.
And, again, you heard the testimony in the first panel. Unless
you wish to contradict it, it is widespread. We are not talking
about isolated examples, we are talking about tens of
thousands, if not multiples of that. Help me understand, help
this committee understand why not a single prosecution has been
brought on this subject.
Ambassador Moorefield. It is a fair question, Congressman
Connolly. I only know of one case that was referred to the
Department of Justice, and they disinclined to pursue it for
lack of substantiating evidence.
Mr. Connolly. I have limited time, I am sorry, Mr.
Ambassador, but do you have any reason to dispute the testimony
we heard from the previous panel that this is a widespread
problem involving tens of thousands, if not as many as hundreds
of thousands of individuals?
Ambassador Moorefield. I can't verify or deny the number of
persons that may be affected.
Mr. Connolly. Okay. If we posit that that is even remotely
accurate, the fact that we have five cure letters, no
prosecutions, and one reference to the Justice Department, they
declined to prosecute, might suggest to a layman, if not a
Member of Congress, that we are not taking this subject
seriously at all.
Ambassador Moorefield. Well, I can only say that with
respect to the justice process and the criminal investigative
process that, and I am not trying to avoid your question, we
are not directly responsible. I can consult with our
investigative agency to find out what their belief is and get
back to you as to why more cases have not been investigated to
the point of being referred to the Justice Department for
prosecution.
Mr. Connolly. Like none.
Ambassador Moorefield. One referred, none prosecuted, that
I know of.
Mr. Connolly. One.
Ambassador Moorefield. Yes.
Mr. Connolly. How many subcontractors are there, just to
pick one country, Iraq? How many would you guess?
Ambassador Moorefield. I am sure there are dozens and
dozens.
Mr. Connolly. Dozens? Perhaps many more than that.
Ambassador Moorefield. Well, we have been scaling down, so
I can't really say what it is today. It was one point, no
doubt, hundreds.
Mr. Connolly. Okay.
Ms. Klemstine, you heard Mr. McCahon, in the previous
panel, indicate that he had written with some suggestions about
how the State Department might help deter this phenomenon with
its contractors and subcontractors, and he wrote that letter 15
months ago and has yet to receive a reply. Can you explain why?
Ms. Klemstine. No.
Mr. Connolly. Are you aware of the letter?
Ms. Klemstine. No, I am not aware of the letter.
Mr. Connolly. May I ask you, Mr. Chairman, with your
indulgence, that we would like you to get back to the committee
with an explanation and with a response to Mr. McCahon that is
cc'd this committee?
Mr. Lankford. Without objection.
Ms. Klemstine. Would be glad to do.
Mr. Connolly. I thank the Chair.
In your testimony, Ms. Klemstine, if I understood you
correctly, you said that human trafficking among State
Department subcontractors apparently is fairly commonplace,
particularly the fact that 77 percent of contract employees
paid a recruitment fee, which ought to be a red flag. Doesn't
necessarily prove there is human trafficking, but it is one red
flag out there. And that passports confiscated and wages were
stolen. And you also testified to the fact that the awareness
level, even among State Department employees, was, frankly, not
where we want it to be, nowhere near where we want it to be.
Is State Department taking this issue seriously?
Ms. Klemstine. I believe so, in reference to the response
that we just received on our October report. I would say that
prior to the October report, although our Department had, on
several instances, disclosed potential TIP violations, the
seriousness wasn't taken. However, recently, and I think a lot
of it had to do with the survey that was actually sent out to
employees that substantiated the fact that there was an
awareness problem, really did bring the GTIP office to say,
yes, we have a problem, now we have to do something.
Mr. Connolly. My time is up, Mr. Chairman, and I do have a
series of questions for Mr. Howard that I will revisit in the
other round. Thank you.
Mr. Lankford. Thank you.
Mr. Walberg is recognized.
Mr. Walberg. Thank you, Mr. Chairman.
Mr. Howard, in your testimony you stated that, because of
your efforts, several third country national workers have been
liberated from involuntary servitude. In these cases, what
actions were taken against the contractors?
Mr. Howard. That is where the cure letters went into play
and the third country nationals were returned to their country
and the cure letters, to ensure that did not occur again, was
done with the contractors.
Mr. Walberg. There was no termination for defaults or
suspension or debarment in the cases of these contractors?
Mr. Howard. No.
Mr. Walberg. How many contractors are you aware of that
have engaged in these types of abuses?
Mr. Howard. I don't have the exact figures. I would have to
take one for the record and get back to the committee.
Mr. Walberg. Appreciate that. You were here with the last
panel and it was indicated that while there were hundreds and
hundreds of allegations and incidences of contract or alleged
contractor abuse, there were nationals that were sent back,
that there were allegations made; yet, it was indicated that
generally speaking, overwhelmingly speaking, Department of
Defense, other governmental entities did not question the
victims. Do you agree with that or do you reject that as being
hyperbole?
Mr. Howard. If we have the opportunity to question the
individuals before they leave country, we do. But once they are
out of country, we don't have the capability to.
Mr. Walberg. So what you are indicating is that, generally
speaking, they are out of country before you find out any of
the abuse has taken place.
Mr. Howard. Well, again, if there would be abuses, our
contracting officer representative, who is talking to them all
the time, our store managers, our general managers that are at
each location every day, if they are aware of anything, they
would take the appropriate action and contact our Inspector
General also. So I am not aware of any.
Mr. Walberg. Ms. Dixon, what is your policy on that? I
mean, do you agree with the statements made earlier by the
panel that very few, if any, of the victims were interviewed by
the Department of Defense?
Ms. Dixon. I can't speak to whether victims were
interviewed or not. I know that attempts were made to interview
victims; they tried to get in touch with victims to interview
them.
Mr. Walberg. Ambassador Moorefield, how do you respond?
Ambassador Moorefield. Frankly, I am not aware from any of
our oversight initiatives so far that we have determined
whether or not they are systematically the prime contractor or
is determining whether or not people were--their CTIP rights
were violated before they left the country. We have been
accompanying Defense Contract Management Agency and contracting
officers on visits to camps where the laborers are kept or in
their places of employment where interviews were conducted
asking these sorts of questions. So far we have not determined
that there was an identifiable CTIP violation.
Mr. Walberg. I certainly would appreciate hearing
subsequent information that Department of Defense and others
are interviewing more of the alleged victims, that we are
seeing some aggressive action taken there, because it seems
like the evidence is leaving the scene and we are not gaining
the opportunity to find ways of achieving success in this area.
I would like to give my remaining time to the chairman.
Mr. Lankford. Thank you. I receive that.
Let me just ask a quick question, then we are going to
continue to move on.
State Department report that came out, the OIG report,
January 2011, this year. Here's the statement that comes out of
it: 77 percent of the interviewed workers stated they obtained
their jobs by paying a recruitment agency in their country of
origin. Of the 77 percent, approximately 50 percent of those
workers said they paid a recruitment fee that totaled more than
6 months contracted salary; 27 percent reported paying fees of
more than 1 year's salary; and 11 of those 75 workers paid a
recruitment fee that would take 2 years to pay off.
They paid a recruiter fee 2 years. That is the length of
their typical contract. When it listed out and broke out of
those that were interviewed, the minimum and maximum, the
average payment here, an average person coming in from
Bangladesh, $2,383 for a recruiting fee.
Here's my struggle. We have to move passed they have their
passport; they could leave if they want to. They don't have the
money to leave; they are in indentured servitude, in debt
bondage to a recruiter that came, and I am not sure we are
verifying that. We have to be able to move passed that.
With that, I would like to be able to yield to Ms. Speier
for 6 minutes for questioning time.
Ms. Speier. Thank you, Mr. Chairman.
And thank you all for participating.
Let me ask this simple question. Is there a problem, in
your mind? Ms. Klemstine.
Ms. Klemstine. Yes.
Ms. Speier. Ambassador Moorefield.
Ambassador Moorefield. Yes.
Ms. Speier. Ms. Dixon.
Ms. Dixon. Yes.
Ms. Speier. Mr. Howard.
Mr. Howard. Yes.
Ms. Speier. What tools do you not have that you need in
order to make this problem go away?
Ms. Klemstine. Well, I think in the State Department there
are really three answers to that question. I think, first of
all, there needs to be better awareness within the Department.
Secondary of all, the contracting officer representatives need
to be far more proactive in this area than they have in the
past. And as you probably know, the State Department has
suffered in the area of CORs on many of its contracts, and that
is one of the reasons why our office, the IG Office, has been
actively working with the State Department to increase CORs
within the whole region. That has been a huge issue.
The third area that I think would definitely help in this
arena is to establish some type of hotline, a place where
people can call if they feel that they are victims of human
trafficking. Right now something like that doesn't exist, and I
think that we need to, just like we have in the OIGs a hotline
for people to call in things throughout the Department, I think
we need one also on the contractor level so that people that
are working in these conditions can actually report it; and it
would give us on the investigative side some mechanism by which
to go back and to really dig into these issues.
Ms. Speier. All right.
Ambassador Moorefield, what tools do you need?
Excuse me. Ms. Klemstine, how many people do you have
working specifically on this issue?
Ms. Klemstine. On this issue? I have had two teams working
on it. I am divided into two sections.
Ms. Speier. Just give me a number.
Ms. Klemstine. Probably about 10 people.
Ms. Speier. Ten people?
How about you, Ambassador, how many people are working on
this issue?
Ambassador Moorefield. I would say on the various teams we
have sent out or are sending out, about 10.
Ms. Speier. Ms. Dixon, how many in your office?
Ms. Dixon. It is only two people in my office; however, we
work----
Ms. Speier. Is that including you?
Ms. Dixon. Yes, it is.
Ms. Speier. All right.
Mr. Howard.
Mr. Howard. We have 300 because all of our AAFES associates
are directly involved in monitoring and being aware of what is
going on, in addition to our oversight from our European
headquarters and our headquarters in Dallas, Texas.
Ms. Speier. Have you all read The New Yorker piece?
Mr. Howard. Yes.
Ms. Dixon. Yes.
Ambassador Moorefield. Yes.
Ms. Klemstine. Yes.
Ms. Speier. Have you taken any action based on The New
Yorker piece?
Ms. Dixon. Yes.
Ms. Speier. What action have you taken? You sent a cure
letter?
Ms. Dixon. I answered yes.
Ms. Speier. Oh, Ms. Dixon. What have you done?
Ms. Dixon. Contacted the DOD IG about further inquiries
into the matter, looked at the previous inspection that was
done, the evaluation that was done, and looked at the issues
that were sent down on that previous inquiry, which was
different from what was put out in The New Yorker.
Ms. Speier. Okay. I have to tell you I am as frustrated as
my colleagues on this panel. First of all, Ms. Klemstine, I
have just been informed that there is a hotline; no one answers
it, and that third country nationals don't speak English.
Ms. Klemstine. I am not sure what hotline they are
referring to because, as far as I know and based on the audit
work that we have done, there has not been a hotline dedicated
to TIP.
Ms. Speier. All right, so here is this New Yorker reporter,
Sarah Stillman, who spent a year investigating this. Retired
General Stanley McCrystal says that the unregulated rise of the
Pentagon's Third World logistics army is undermining America's
military objective. So you have that issue. You have former
Congressman Christopher Shays saying it is a human rights abuse
that cannot be tolerated.
There are references made that these workers, primarily
from South Asia and Africa, often live in barbed wire compounds
on U.S. bases, eat at meager chow halls, and host dance parties
featuring Nepalese romance ballads and Ugandan church songs, a
larger number employed by fly by-night, some contractors who
are financed by the American taxpayer but who are often
operating outside the law.
Now, this is not like it is not happening under our noses.
That is what is most offensive to me. These are on bases in
these countries. We know that, moving forward, in Iraq, State
Department is going to be employing more of these third country
nationals.
So are we just going to compound this problem or are we
going to do something about it? I feel like our focus is on
dotting Is and crossing Ts and making sure that people have
their passports or have been informed about the
responsibilities to inform, but we are not doing anything about
the underlying problem, which is people are being enslaved,
providing services, being told one thing and yet being offered
something very different.
And we are allowing these subcontractors to continue to
operate. A cure letter is a slap on the hand. They should be
booted out of there. They should lose the privilege to work for
the U.S. Government forever. And we send them a cure letter,
Mr. Howard? That is the extent of the penalty that is going to
be imposed on anyone who is trafficking?
Mr. Howard. These, again, were for holding on to passports.
And we give a cure letter and if they don't abide by that, we
would debar them and never do business with them again.
Ms. Speier. Except that you did say that you believe there
is a problem. And your response so far has been to send out
cure letters.
Mr. Howard. No. It is also working on a daily basis to
ensure that the problems don't occur in our areas of
responsibility.
Ms. Speier. My time has expired.
Mr. Lankford. Let me tell you a quick story. Then we are
going to a different round, if you all have additional
questions as well.
Part of my own preparation and my own research on this, I
sat down with an MP coming back from Afghanistan who handles
internal security for one of the bases, and I am going to leave
their name out of it. When I asked about the questions of third
country nationals on that base in Afghanistan right now, there
was a long hesitation and the response was, what would you like
to know? We started talking about human trafficking and
trafficking in persons. Their response was, I don't even know
where to report it, but I know it is going on. This is an MP
doing internal security on one of our bases. When I asked about
living conditions, their response was we would never ever want
to live where they live on base, never.
They said that they had some of the companies that they
work for, they would lose their position and would immediately
be kicked out, which terrifies them because they have this
massive loan back home they have to pay for; they have to stay
and keep that job. If they don't stay and keep that job, they
will never be able to pay off the loan, so they are terrified
they are going to lose it at any point. If they ever interact
with Americans in any way that their boss considers in any way
questionable, that they are pushing toward that, they are just
kicked out, which obviously they have now lost everything and
have no chance of even gaining back what they paid into the
system.
This MP could identify this in the areas where prostitution
was happening in sex trafficking.
This is the reality that is on the ground right now, and my
frustration is we know it. We have to find some way to stop
this. A zero tolerance policy is not working. Failing to
prosecute is not working. Cure letters are not working. Not
doing debarments and suspensions of contractors, that is not
working. What needs to be done? And I think Ms. Speier's
question is a great question: What tool do you need in your
toolbox to make sure that this stops happening?
This violates everything in the American value; that we
value the individual person. It is a person created in God's
image and has inalienable rights no matter what country they
are from. They are to be honored as an individual in the middle
of all that. And to know that our State Department, which
stands up for human rights around the world, has indentured
servitude happening in our embassies is deplorable to me. This
is the group that is standing up for American values worldwide.
Yet, when these individuals return back to their home
countries, all they can speak of is I worked for a year for
nothing and lived in these deplorable conditions. This violates
everything about who we are and what we do.
And the challenge is we have to have back to this committee
some suggestions that extend beyond posting something in the
cafeteria or a hotline to call into; some way that we shift
from we have talked about this, we put policies in place, to we
suspend, debar, to where contractors understand completely this
is not acceptable. Some path of documentation that begins in
their home country, that if they don't come in with
documentation saying how much they paid as a recruiter fee, and
it is verified that is a legal amount to pay as a recruiter fee
in that; some kind of pathway.
I understand keeping their passport is a big deal, but if
they have a passport and no way to get home, or they have such
a large debt that they can't leave for fear they will never be
able to catch up on it and pay it off, that doesn't matter,
their passport is meaningless to them at that point, because
that would be the worst thing for them to go home because now
it is even worse; they have to go home and face the loan shark
with no money.
All these dynamics all wrap in the middle of this for us,
and I am sure it does for you as well. This can't just be an
issue that is only passionate for us; obviously, you live and
breathe in this all the time. But it is simple, we have to move
from the contracts that we put out to primes and sub-primes and
all these contractors are out there has the right language into
it. That is a good start, but just checking to see if they have
the right language is only the beginning point; the real issue
is do we have trafficking in persons that we are paying for
with Federal tax dollars or that we are turning a blind eye to.
That is the ending destination on this.
Now, I want to just throw it open for just a quick moment
and then we will go to Mr. Connolly for a comment.
What response do you have at this point? What do you see is
going to begin to make this shift? What will help us turn
around? Any suggestion that you have that you would say this is
what we are looking at, I think it will turn the corner on
this?
Ambassador Moorefield. Chairman, I am not sure I have a
definitive answer; I think I have plenty of questions I have
written down here that obviously we need to examine more
carefully in our own inspection work.
The judicial side is, frankly, a bureaucratic set of
hurdles that I don't presume to understand.
Mr. Lankford. But the suspension and debarment is a very
low threshold.
Ambassador Moorefield. No, no. But suspension and debarment
of prime contractors is certainly something accessible to
contracting officers and commands in the field, and I don't
have a good answer yet. I am going to get one on why we haven't
been more proactive in using it.
Mr. Lankford. Can you give me a time on when you are going
to get that answer? Because we would like to have a copy of
that answer as well.
Ambassador Moorefield. Sure. Well, we have a report that we
are working on right now that is due to you in January, two
reports, and one of them is a broader perspective look at
issues across DOD; and that would be the obvious place to make
sure we have done sufficient research and can address this.
The other issue, as you know, is the subcontractor issue,
which is beyond the contracting purview of contracting
officers, and that is an extreme vulnerability, needless to
say.
Mr. Lankford. But if a subcontractor violates the rules, we
can hold the prime accountable for it.
Ambassador Moorefield. That is correct, and----
Mr. Lankford. But we are not currently holding the prime
accountable for it.
Ambassador Moorefield. Not to the best of my knowledge, and
not to the best of our oversight work yet. And I also don't
have a good answer why that is not being used more
aggressively.
Mr. Lankford. Okay.
Mr. Connolly.
Mr. Connolly. Thank you, Mr. Chairman.
It seems to me that maybe we have some legislative
refinements required for this topic, but, frankly, it has to do
with will and moral outrage. Maybe if more of us thought of it
as our sister or our daughter there might be some reflection of
moral outrage in the practice, and then maybe we would be
motivated to make sure we are enforcing our own laws,
regulations, memos, executive orders, and the like.
It is not okay to turn a blind eye to this practice. It is
not okay to treat it as a bureaucratic requirement that we can
check off a box because people have been trained or made more
aware. The object here is to cease the practice. It is a
violation not only of human rights, but of everything America
stands for. We fought a civil war to end this kind of practice,
and yet we are turning a blind eye to subcontractors serving
our Government, who are in fact engaged in involuntary
servitude, and in some cases sexual trafficking.
And we know what the problem is. And I am deeply disturbed
that we don't seem to be seized with a mission here, and until
and unless we are, we are never going to solve the problem. All
the laws and all the executive orders in the world aren't going
to solve the problem.
Mr. Howard, I was intrigued by our bill of rights. It
sounds like a substantive contribution to helping us resolve a
very complex problem. When was that bill of rights promulgated?
Mr. Howard. It was developed in 2008 and started to apply
to our third country nationals in March, April 2009.
Mr. Connolly. Okay. And how do we enforce it?
Mr. Howard. We have monthly checks where the managers on
the ground have to validate to us that all points of the bill
of rights are being adhered to for our associates.
Mr. Connolly. Our managers.
Mr. Howard. Our associates, yes.
Mr. Connolly. Gotcha. And that extends to subcontractors?
Mr. Howard. We hold the contractor liable for the
subcontractor, so we check all of the third country nationals
on a monthly basis.
Mr. Connolly. You heard the testimony of the first panel
and the dialog we had. And let's assume, obviously
inadvertently, but the system of incentives and disincentives
actually works against us in the enforcement against human
trafficking because all of the disincentives encourage a prime
or subcontractor, frankly, not to report because he or she is
at risk if they do.
Mr. Howard. Right.
Mr. Connolly. How can we fix that so that we are actually
rewarding people who ferret it out and report it so that we can
deal with it?
Mr. Howard. I am not sure how you can reward the
subcontractors. I do know----
Mr. Connolly. No, no, the prime, the prime.
Mr. Howard. I would have to take that back and think of how
we would reward them. I do know that our associates, the AAFES
employees, U.S. citizens, continually watch out for this and
they will let our--we have a hotline for the Exchange and they
will let the Inspector General for AAFES know if they see any
violations at all.
Mr. Connolly. My colleague referenced the New Yorker story.
It documented the abuses of several beauticians from Fiji who
were falsely lured by recruiters back home, over whom,
apparently we have no jurisdiction or even interest, but
ostensibly to go work in a hotel in Dubai, but in fact they
ended up working for subcontractors serving the U.S. Government
in Iraq. Is that correct?
Mr. Howard. Yes, that is my recollection from reading the
article.
Mr. Connolly. They worked 12 hour days, 7 days a week;
their passports were in fact held for some period of time,
presumably against their will; and their wages, whatever they
were promised, which was substantially more than what in fact
they received, according to this article, were only $350 a
month. To your knowledge, is that accurate?
Mr. Howard. It is accurate in fact that the contract said
$350 plus tips. And when our Inspector General reviewed it, the
tips amounted to about $450, which took the pay on a monthly
basis up to about $800.
Mr. Connolly. Did AAFES ever interview these women?
Mr. Howard. We attempted to, but they had already gone back
to Fiji and we could not interview them. But we did interview
additional associates at that site.
Mr. Connolly. And did you corroborate what you understood
to be their story?
Mr. Howard. Yes. Well, no. What we found is that the
beauticians that were working there said they all had their
passports, that they enjoyed working there, and they had a few
questions about their pay, but nothing about holding on to the
passports or any sexual activity.
Mr. Connolly. So you have reason, therefore, to doubt the
narrative of The New Yorker with respect to these two women?
Mr. Howard. All I can do is based on what our Inspector
General did find during their research.
Mr. Connolly. You indicate that your writ is limited in
terms of sort of third countries from which these people are
being recruited. But in your opening testimony I thought I
heard you say you have a presence in something like 30
countries?
Mr. Howard. We are in 30 countries----
Mr. Connolly. Thirty countries. But you are not in, for
example, Fiji or Nepal, or places like that.
Mr. Howard. No. This is where the manpower agencies go out
and employ.
Mr. Connolly. Would you agree, in light of the concerns we
have about human trafficking, that figuring out some
methodology, whether it is with AAFES or IG offices or maybe
Ms. Dixon's office, if we can get passed two people staffing
it, we ought to be addressing the place where people are
recruiting because that is really the weak link in the chain,
as Mr. McCahon indicated in the first panel?
Mr. Howard. Based on what I heard today, yes, the root
cause is right at the beginning.
Mr. Connolly. All right. I would certainly, and I know the
chairman and members of the committee would, welcome any
additional thoughts you might have as you think about that in
terms of how we might get at that, because I think if we don't
get at that, we are never going to solve this problem. There
are several links in the chain we have to get at, but that is
certainly one of them.
Thank you, Mr. Chairman.
Mr. Lankford. With that, let me make one quick request. I
am going to ask Ms. Speier if she would like an additional
round of questions.
Could the four of you independently put together a set of
ideas of how to be able to resolve this that we could have by
February 1? That would give you 3 months to be able to pull
together ideas of how we move passed what we have in place to
here are solutions to fix this, so that a year from now we
don't have a hearing like this other than to say well done and
be able to move passed that. Is that acceptable? By February
1st on that.
With that, Ms. Speier, recognize you for 6 minutes.
Ms. Speier. Mr. Chairman, thank you, and thank you for
giving the direction you just did. One of my biggest concerns
about the hearings that we have here is that we show great
outrage, the hearing is over, and business as usual. And it is
also a problem on the issue of military rape in this country,
where we have had 16 years and 18 hearings, and nothing has
changed. And I fear that we will be in a similar situation in
this arena as well if we don't stay on it.
And I compliment you on making this request. I also would
encourage you to have subsequent hearings. If we don't stay on
this issue, it will continue without being addressed
appropriately.
I guess I would just like to understand, to you, Mr.
Howard, when the Inspector General went and the beauticians had
left, there still was a company, a subcontractor that had hired
them, correct?
Mr. Howard. Correct.
Ms. Speier. And what happened to the subcontractor?
Mr. Howard. Due to the fact we could not validate the
accusations, nothing.
Ms. Speier. Nothing. Did you show the subcontractor this
article and say what is your response to this?
Mr. Howard. I can't specifically say what the IG did or
didn't say. I could get back to the committee on this.
Ms. Speier. All right, I think, as you can tell, we are
vitally interested in this issue. We expect that you are going
to put metal to the pedal.
Mr. Howard. Yes, pedal to the metal.
Ms. Speier. Pedal to the metal, and take this on as if it
was your own family member. I think that was a reference that
my colleague had referenced. Because this is not just
incompatible. I think that was the word Ms. Dixon used. This is
offensive and violates every principle in our Constitution.
Every principle. And it is only going to get worse because our
use of third party nationals is increasing as we wind down in
both Iraq and Afghanistan. So if we don't get this right, the
problems are just going to explode, in my view.
So, Mr. Chairman, I think at this point I will just yield
back.
Mr. Lankford. I do appreciate you being here today. As I
mentioned before, I am sure this wasn't a fun day. It is not a
fun day for us as well. Some of this was both out of a prior
hearing with the Commission on Overseas Contingencies came and
submitted their report. A small aspect of that report, which is
not relevant to what they are doing, highlighted that this is
an ongoing problem. There will be more that will follow up from
this as well, and both your testimony and the previous panel as
well.
The prime issue is now if we have a contract in place and
we know what the cost of the contract should be based on the
travel of the people coming, the cost of the labor, the cost of
housing; either these primes and subs are skimming off dollars
and taking that dollar that is to be committed to workers or
they are working on an additional kickback, which is also
illegal, from the recruiter on the field, getting a cut back to
the contractors, or were violating the basics of what is a
legal recruiter fee in the country. It is just on and on and
on. But they are all things that are discoverable.
At this point it is moving from we have great rules and
regulations to we are enforcing them and we are accomplishing
that. We are going and asking the questions that we are afraid
to ask, knowing what the answer might be. My concern is--and it
is only my suspicion and concern. My concern is that we are not
reporting it, we are not pushing it, we are not following
through on this for fear that it gets out into the media and it
becomes--it is easier to say we have had no prosecutions,
assuming that means it is not occurring, rather than we have
had 25 prosecutions because it is occurring.
I think it is out. It is occurring, has been occurring. It
has been addressed for the past 20 years just a piece at a
time. Now we have to move it from it is being addressed in
right policies, win contracts and right language, those are all
good first steps, to it is completely eradicated from what we
do. That is what we are looking forward to being in the final
step.
I appreciate your time and the effort you put into this. I
look forward to getting a chance to read back the ideas that
you are submitting back to us by February 1. And, with that, we
are adjourned.
[Whereupon, at 12:16 p.m., the subcommittee was adjourned.]
[The prepared statement of Hon. Elijah E. Cummings
follows:]
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