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Citizens Class: Abramoff, Inc.

Should U.S. territories be subject to the same laws as the United States itself. If so, why? If not, why not?

Backgrounder: Abramoff, Inc.
One aspect of the unfolding Abramoff scandal involved the Marianas, a U.S. territory in the Pacific that Congress exempted from the U.S. minimum wage and immigration laws. The islands are home to Chinese-owned factories, where low-wage workers were imported from China and the Philippines and forced into slave labor conditions, living in squalid shacks behind barbed wire, to produce "Made in the USA" goods. As pressure built in the mid-1990s for a bill to impose U.S. laws on the islands, Abramoff was pitching his client-the government of the Marianas-as a regulation-free paradise and taking lawmakers there on luxury junkets ... [more]

Class Is in Session...

The scattered islands of the U.S. Commonwealth of the Northern Mariana Islands, which lie roughly halfway between Hawaii and the Philippines and just north of Guam, cover a mere 179 square miles and have a population of just 82,459. Yet they have figured prominently in the house of cards that Jack built. The Marianas Islands

In 1995, Abramoff took on the government of the Northern Marianas in Saipan as a client and for the next six years lobbied key Washington lawmakers to maintain a hands-off approach to the sweatshop economy blossoming there. According to Rep. George Miller (D-Calif.), of all the improprieties, fraud and corruption in which Abramoff engaged, "[his] most damaging and most indefensible work was to protect … sweatshops located in this U.S. territory."

Former Senator Frank Murkowski said of the Islands in a 1998 Senate hearing..."We saw living conditions that simply should not exist in the United States of America…." And why, as immigrant workers churned out millions of garments for top labels from The Gap to Jones New York - featuring the "Made in the U.S.A." label-did the U.S. Congress fail to ensure that proper worker safety and minimum wage standards were being met? Murkowski queried: "How could we have in the United States working conditions like this under the US flag?" The answers to these questions lead directly back to the controversial relationship between Abramoff, former House Majority Leader Tom DeLay (R-Texas) and other important figures in government.

Made for America

Aside from Puerto Rico, the Northern Mariana Islands are the only other insular commonwealth of the United States. The arrangement, which began in 1978, grants all indigenous inhabitants of the islands American citizenship and allows them to elect a local island government but excludes the right to vote in U.S. presidential elections. The government of the Northern Marianas benefits from substantial U.S. federal funds-in the form of subsidies and development assistance-administered by the Department of the Interior. The United States benefits by having a strategic military site in the Pacific.

Under the terms of their commonwealth agreement, the Northern Marianas also maintained the right to label "Made in the U.S.A." all products manufactured on the islands — despite the fact that they had been given exemption from some federal labor laws, customs laws, immigration laws, quotas and tariffs laws By the late 1980s, this state of affairs had become a boon both for the island's garment industry and for a slew of American apparel giants who could count on abundant cheap labor without sacrificing the sacred "U.S.A." label.

During those years, the Northern Mariana's garment and textile businesses exploded, with companies importing tens of thousands of foreign workers from China, the Philippines, Thailand, Cambodia, Sri Lanka and Bangladesh to stitch in their factories for roughly half the American minimum wage. These immigrants often paid thousands of dollars to loan sharks to bring them to Saipan with the promise of work and spent months, if not years, paying off their debts, if they found work at all. Workers were often housed in barracks behind barbed-wire fences, often in unsafe, overcrowded and unhygienic conditions, and were charged exorbitant amounts for their room and board.

In the early 1990s, the U.S. Department of Labor began looking into allegations of garment industry worker abuses, focusing on factories owned by one of Saipan's biggest employers, Willie Tan. In 1992, the department filed suit against Tan and ordered him to pay $9 million in back wages and damages to workers at five of his plants-at the time, the largest fine ever imposed by the Department of Labor. The suit alleged that employees were forced to work more than 80 hours a week, below the islands' already low minimum wage and with no overtime. Further, workers were kept locked inside their barracks and were not allowed to leave during their off-work hours

Tan and his associates in the government of the Northern Marianas looked to American lobbyists for protection against potential federal regulation. Jack Abramoff was one of those lobbyists.

Enter Abramoff

Abramoff pocketed nearly $8 million from his contracts with Saipan between 1995 and 2001, according to the Northern Marianas' public auditor. And with the help of Tom DeLay (R-Texas) and others he accomplished his goal of keeping congressional hands off the commonwealth's sweatshops, despite a growing public outcry over the continuing abuse of immigrant workers.

Between 1995 and 1998 — in testimony before Congress; in investigations by the Department of Labor and the Department of the Interior; in congressional fact-finding missions; and in numerous media accounts, including a report which aired on ABC's 20/20 as "The Shame of Saipan"-the mistreatment of nearly 18,000 workers in the Northern Marianas became widely known. The public and the nation's lawmakers heard tales of women forced to undergo abortions in order to keep their jobs, of women and young girls guaranteed jobs in the restaurant industry only to find that they would be working as prostitutes; of long hours with no overtime and illegally substandard pay; of foul living conditions and beatings and humiliations.

In 1997, no doubt in partial response to these accounts, the Clinton administration wrote to the Marianas' elected leader, Governor Froilan Tenorio, that "certain labor practices in the islands ...are inconsistent with our country's values," and made mention of reforming the commonwealth's labor and immigration laws to bring them into line with those of the United States.

Tom DeLay visited Saipan in for the New Years holiday 1997/1998 — at the invitation of Abramoff, whom DeLay called one of his "closest and dearest friends." DeLay's trip — which boasted luxury hotels, fine white-sand beaches and several premier golf courses — was paid for by the government of the Northern Marianas and was one of a number of junkets the government sprung for at the urging of Abramoff.

When DeLay returned to Washington, he kept his promise to his clients in the Northern Marianas regarding federal regulation. Although the Senate in 1999 passed legislation that would have stipulated that any garment bearing a "Made in the U.S.A." label would have to be made by American workers, and more than 200 members of the House co-sponsored similar legislation the same year, the efforts were never made into law.

Willie Tan, the Saipan garment giant was captured on hidden camera by by Global Survival Network saying that DeLay had effectively told him not to worry about the legislation. According to Tan, "[Delay] said, 'Willie, if they elect me majority whip, I make the schedule of the Congress, and I'm not going to put it on the schedule.' So Tom told me, 'Forget it, Willie. No chance.' "

In 2000, Republican Sen. Frank Murkowski of Alaska authored a bill that would have extended U.S. labor protections and minimum-wage laws to the Northern Marianas. The Senate bill passed with unanimous consent. Again, it died in the House. But a number of class actions suits filed on behalf of garment workers in Saipan have fared better. In 2004 the workers dismissed their remaining lawsuit after having won a $20 million settlement with 26 U.S. retailers and 23 Saipan garment factories.


  • Should U.S. territories be subject to the same laws as the United States itself. If so, why? If not, why not?
  • What kinds of changes could we make to the Congressional power structure that would prevent one or two individuals from allowing a debate on legislation? What are the pros and cons to those changes?
  • What do you think about the ability of foreign companies to lobby the US government? What kinds of restrictions, if any, should be placed on foreign companies vs. domestic companies?

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