JACKSON, Miss. – Secretary of State Hillary Rodham Clinton has ordered an "extensive and thorough review" of a foreign exchange program that has been used by U.S. businesses as a source of cheap labor and exploited by criminals to import women to work in the sex industry.
In the latest debacle for the J-1 Summer Work Travel visa, a federal indictment unsealed last week accuses the mafia of using the cultural exchange program to bring Eastern European women to work in New York strip clubs.
The U.S. House Judiciary Committee's immigration subcommittee also has been gathering information on the J-1 visa, which was created in 1963 to allow college students from other countries to spend their summer breaks living, working and traveling in the U.S.
As the program has grown to bring more than 100,000 young people here annually, it has become as much about money as cultural understanding.
The State Department has made several changes since an Associated Press investigation last year uncovered widespread abuses, including living and working conditions that some participants compared to indentured servitude. In one of the worst cases, a woman told the AP she was beaten, raped and forced to work as a stripper in Detroit after being promised a job as a waitress in Virginia.
More common than sex trade abuses is shabby housing, scarce work hours and paltry pay. In August, dozens of workers protested conditions at a candy factory that packs Hershey chocolates in Hershey, Pa., complaining of hard physical labor and pay deductions for rent that often left them with little money.
A State Department spokesman, who spoke on condition of anonymity, said Clinton "has called for an extensive and thorough review of the program."
"We continue to be committed to working to strengthen the Summer Work Travel Program to safeguard the health and welfare of the participants," the official said in an email late Friday. "We have already instituted one set of reforms and are working toward additional ones that take additional measures to protect participants and prioritize the original cultural intent of the program."
The New York case was made public just days after the State Department opened a period of public comment on proposed changes that would require companies that sponsor the participants to gather more information about employment and living arrangements.
It's not clear if the proposed changes would have prevented the situation in New York, in which authorities say fraudulent offers for jobs as waitresses were used to help Eastern European women get visas to come to the U.S. Instead of working in restaurants, they allegedly danced in strip clubs. Authorities say members of the Gambino and Bonnano crime families were involved, along with the Russian mob.
The reforms being considered by the State Department would limit and refine the types of jobs students can have, expand the list of prohibited employment categories, and strengthen the "the cultural aspects of the program to ensure that the objective of the program — positive exposure to the United States — is accomplished."
The agency already prohibits participants from taking jobs "that might bring the Department of State into notoriety or disrepute" but the AP found that strip clubs and adult entertainment companies openly solicited J-1 workers.
Most of the abuses in the J-1 program over the years have been blamed on unregulated, third-party labor brokers who work with the students. Critics say the students have gotten little help from companies designated as sponsors by the State Department.
The State Department said in November that it has temporarily stopped accepting any new sponsors and will limit the number of future participants to this year's level, or about 103,000 students. The State Department also revised its rules to require more oversight by its 53 designated sponsors, which help students arrange for visas and find jobs and housing in return for a fee.
"Foreign exchange student abuse continues due to lack of oversight by State and the unadulterated greed of the exchange sponsors," according to Danielle Grijalva, director of the Committee for Safety of Foreign Exchange Students, an advocacy group. Grijalva called on the State Department to enact a strict moratorium and impose sanctions for sponsors who fail to maintain the integrity of the program.
Under the J-1 program, foreign students are granted visas for up to four months and often land jobs at hotels, resorts and restaurants. Participation has boomed from about 20,000 students in 1996 to a peak of more than 150,000 in 2008, and roughly 1 million foreign students have taken part in the past decade. The students come from around the world, with some of the top participating countries being Russia, Brazil, Ukraine, Thailand, Ireland, Bulgaria, Peru, Moldova and Poland.
The students sometimes work as maids or groundskeepers in high-priced resorts, but they can also be found flipping burgers on the Mississippi Gulf Coast or working at fish factories in Alaska. The State Department says most participants enjoy the program and some sign up to participate more than once.
The J-1 program generates millions for the participating employers and middleman companies. The students pay fees that reach several thousand dollars for help getting visas. Businesses that hire a foreign student over an American can save 8 percent because they don't have to pay Medicare, Social Security and unemployment taxes. Also, the foreigners must have their own health insurance.
In its own review, the AP found plentiful examples of students who made $1 an hour or less after deductions for housing, transportation and other expenses. Sometimes, labor recruiters charge students exorbitant rent for packing them into filthy, sparsely furnished apartments so crowded that some endure "hotbunking," where they sleep in shifts.
George Collins, an inspector with the Okaloosa County Sheriff's Department in the Florida Panhandle, has investigated abuses in the program for years, and said the State Department has done little to fix the problems, even when he has told them the names of corrupt labor brokers.
Collins said the middlemen between the sponsors and work sites should be cut out completely, the students should be better informed of their rights and sponsors who don't comply should be fined, suspended or banned.
There also needs to be a better system for verifying compliance and checking students' living and working conditions, perhaps through partnerships with state and local governments, he said.
"There's an old saying that 'what the boss doesn't check doesn't get done,'" Collins said. "The boss needs to start checking."