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Week of 9.18.09

Transcript: Surrogacy: Wombs for Rent?

BRANCACCIO: If you think immigration and abortion get people riled, take a look at this one...surrogate parenting. It turns out the United States has become a major destination for those looking to hire someone to give birth to their child. Why? Because it's illegal in many other countries...but also because in the U.S. surrogacy is largely unregulated. And then there's the bonus feature: every child born here is automatically an American citizen. Here's NOW Senior Correspondent Maria Hinojosa.

HINOJOSA: Thanks to advances in medical technology, surrogate parenting has become a viable alternative for childless couples wanting a baby. But as our investigation has found, it's become a big business as well; one that's ripe for exploitation and fraud. Habiba Nosheen and Hilke Schellman produced our report, one of a series on women and men in the twenty-first century we call Life Now.

Beth and Marcio Mardones have been happily married for almost 10 years. They live in a Chicago suburb with their dog, a cocker spaniel named Tommy Boy. But there is one thing they need to complete their all American family: a child of their own. It's the one thing that's been out of reach ever since the year they became engaged.

BETH MARDONES: I found out that I had a cervical cancer in February of 2000.

HINOJOSA: In order to save Beth's life, doctor's had to remove her uterus.

BETH MARDONES: I had the radical hysterectomy and then recovered for 12 weeks and planned my wedding and —and then we got married in September of that year and still all along knew that we would, you know, we were going to have a family.

HINOJOSA: She was only 27, but Beth knew she would never be able to carry a child. And for years, adoption was the only option for infertile couples like the Mardones'.

Thanks to technology, surrogacy has become another option.

BETH MARDONES: Surrogacy would be our only route to have our own biological child.

HINOJOSA: Doctor's removed eggs from one of Beth's ovaries and combined them with Marcio's sperm to create nine frozen embryos. The Mardones' would pay a surrogate who could carry their child for them, but the surrogate would have no biological relationship to the baby.

BETH MARDONES: It is just incredible. I mean it really is amazing. And, you know, I think it's a real blessing. And I —I am, you know, so glad that it's helped so many couples.

HINOJOSA: Surrogacy has given a remarkable gift to many for whom biological parenthood was only a dream. But as you will soon see, it's a practice with complex legal and moral implications. In fact almost every developed country in the world bans the practice except the United States. But there are no federal laws regulating this industry. And that's turned the U.S. into a hot bed for surrogacy. Its one of the only western countries that allows anybody to pay a woman to carry their baby.

BETH MARDONES: We saved over several years to be able to have the option to try surrogacy.

HINOJOSA: Beth learned that these businesses work almost like dating services, matching intended parents with surrogates willing to carry a child to term. They chose a company called SurroGenesis.

BETH MARDONES: When we started with SurroGenesis, one of the other things that we really liked about them is that we were able to see some profiles of the surrogates before we actually committed and paid them their agency fee which was really nice.

HINOJOSA: So, who are the women who agree to rent their wombs for money? Meet Salina Ramirez. We spent several months following her surrogate pregnancy as part of our investigation into the industry. We wanted to find out how the business works and how surrogacy in America is affected by the almost total lack of regulation.

RAMIREZ: I was willing to do it for a mother who never had kids or couldn't have kids.

HINOJOSA: Salina Ramirez is a twenty-five year old single mother of two young daughters. She works as a receptionist at a doctor's office in Sacramento, California. And she lives in a tiny rental apartment.

Was the fact that you were going to be able to essentially make money by being a surrogate a consideration for you?

RAMIREZ: That wasn't my driving force, but it was a nice like little bonus.

HINOJOSA: For her it adds up to $20, 000. So Salina decides to sign up with SurroGenesis, the same agency that the Mardones' have been using. Salina wanted to carry a child for somebody in her local area. But the agency matched her with a couple in Spain. The match-maker at SurroGenesis told Salina they needed her help.

RAMIREZ: You know she kinda ...not really pressured, but she gave me a sob story, so I was just like okay.

HINOJOSA: SurroGenesis arranges everything. The sperm from the father is flown in from Spain. The mother's infertile so the couple uses eggs from an anonymous donor. That also means Salina will have no biological or legal claim to the baby. Salina gets pregnant through in-vitro fertilization on the first try.

Is it strange for you, I mean as a mother of two, that you just want to deliver this baby and not even...perhaps not even see it.

RAMIREZ: A little bit. But biologically I just know it's not mine, so it's not really, I don't know, I'm not really connected because I know biologically it's not mine...and so I keep telling myself, it's not your baby.

HINOJOSA: So who are all these?

RAMIREZ: This is Juliet and Unique.

HINOJOSA: So these are your daughters.

RAMIREZ: These are my daughters.

HINOJOSA: This is your older daughter.

RAMIREZ: Aha, my oldest

HINOJOSA: And then your little one?

RAMIREZ: My little one

HINOJOSA: So have you thought about the fact that the baby that the baby that you are carrying now this baby's photographs may or may not end up here on your refrigerator?

RAMIREZ: Ummm. No. Not really. I mean I would want a picture probably maybe...

HINOJOSA: Debora Spar is the president of Barnard College at Columbia University. She is also the author of a book about the surrogacy industry called The Baby Business.

SPAR: I think it is womb selling or womb renting. So, I think there's - there's no doubt that a surrogate mother is providing a bodily service for a fee. It's clearly a relationship marked by vast inequities. You have rich people buying bodily functions of poor women.

HINOJOSA: So, you see that this is a business where primarily wealthy people are essentially buying the services of primarily not so wealthy women?

SPAR: That's exactly what it is

HINOJOSA: Back in California, Salina is receiving pre-natal care as part of her agreement with SurroGenesis. They promise to pay for her health insurance during the pregnancy and delivery. But suddenly when she is four months pregnant there is a problem.

RAMIREZ: And I received a letter from Blue Shield stating that your insurance has been terminated due to umm... not being paid. Due to the plan not being paid.

HINOJOSA: Blue Shield cancels Salina's health insurance that she got through SurroGenesis because Blue Shield says the bills haven't been paid. Salina tries to get an explanation from the SurroGenesis, but she can't get in touch with anybody there. The owner is no where to be found. At 14 weeks pregnant Salina loses her health insurance for the surrogate pregnancy. Salina does have insurance through her work. But she learns that the surrogate pregnancy will not be covered through that policy because she is being paid for carrying the baby.

DR. NELSON: Her regular medical insurance does not cover surrogate pregnancies. so that left her without insurance to both take care of the pregnancy and pay for her maternity leave after the baby.

HINOJOSA: Salina learns that getting a separate health insurance policy for this pregnancy would cost around $26,000. An amount she cannot afford. She emails the couple she is carrying the baby for and begs them to pay for health care. The Spanish couple says that they have already put up almost $50,000 in advance to cover the costs of this arrangement with SurroGenesis. The couple writes that they have already sold their apartment and they are running out of funds. Salina tells her doctor that because of the expense of the pregnancy she is worried that she won't be able to pay her rent and care for her own two children.

DR. NELSON: I told her that I was very concerned about this, and felt that before she determined that she was going truly to go forward with the pregnancy, she needed to make sure that herself and her family were going to be taken care of.

HINOJOSA: At her doctor's suggestion, Salina considers a radical step in order to do the best thing for her family.

DR. NELSON: I simply said that you need to then consider your options and whether abortion is an option.

HINOJOSA: Salina writes another email to the intended parents in Spain telling them that unless they pay for her health insurance she will have no other option but to terminate the pregnancy.

RAMIREZ: It was the hardest thing I had to write. I remember in the email telling them I am so sorry I don't want you to think I am this evil person but I'm a mother first and I have to be a mother to my children, and I have to worry about their health and well being.

HINOJOSA: And where is SurroGenesis in all of this? It turns out that Beth and Marcio Mardones have been asking the same question. Like most couples seeking surrogacy they have been asked to deposit all the funds in advance into a trust account to ensure that they could pay the bills.

RAMIREZ: I'll never forget, March 13th, you know, I was checking email before we were going out to meet my sister and her husband. And we got this email that, you know, there may be some questions about our funds.

HINOJOSA: The email comes from an employee of SurroGenesis warning that most of the client's money could be in jeopardy.

BETH MARDONES: After spending hours online we realized we kinda came to the conclusion that night that our money was gone. We had a balance of $22,000.00 left in the account. Gone. Just in —just a flash.

HINOJOSA: Beth and Marcio then contact the FBI and learn they are not the first couple who have been asking questions about SurroGenesis. They soon find out that the owner of SurroGenesis Tonya Collins is missing and so are 2.5 million dollars which belong to them and some 60 other clients. How did it happen? It turns out the money has disappeared from a supposed independent trust fund. The FBI says it's investigating but has not filed any criminal charges in this case. In spring of 2009, the intended parents file a class action law suit to get their money back. Ted Penny and Wayne Beaudoin are lawyers representing the intended parents.

PENNY: It —it is difficult to believe that the money's been stolen for so long and at least Ms.Collins has not been arrested for this yet. The clients, of course, feel that some justice needs to be had, the money was stolen from them, there are people responsible and nothing's been done so far.

HINOJOSA: They explain that their clients were told that the escrow account would be held in an independent trust company called Michael Charles Independent Financial Holding Group. And that the Michael Charles group would safely keep their client's money for the surrogacy process. But the Michael Charles group wasn't what it seemed to be.

BEAUDOIN: Little did the clients know that Michael Charles' company was actually being operated by Tonya Collins, who was the principal owner of SurroGenesis.

HINOJOSA: The lawyers allege that this structure gave Tonya Collins access to her clients money without their knowledge. As NOW on PBS begins to investigate SurroGenesis, the missing millions, and the woman at the center of the mess, we learn that 33 year old Tonya Collins founded SurroGenesis in 2006 after being a surrogate herself. In Modesto, California, we track down James Collins, Tonya's estranged husband. James was the public relations executive for SurroGenesis. He reluctantly agrees to an interview. We ask why none of the clients were told that Tonya Collins owned both SurroGenesis and the Michael Charles Group.

So do you think the employees of SurroGenesis were aware of the fact that that Michael Charles and SurroGenesis were essentially one in the same?

COLLINS: Everybody was aware of that. ...Yes, the employees were absolutely aware of that.

HINOJOSA: And you were aware of it too?

COLLINS: Yeah.

HINOJOSA: And as far as you were concerned, that was okay?

COLLINS: Yeah. There's no conflict of interest there. But, Tonya did not want people to know she owned Michael Charles.

HINOJOSA: Turns out SurroGenesis had also figured out how to fool Blue Shield of California.

What is your understanding of the insurance you got through SurroGenesis, and what SurroGenesis told you about the insurance and how it was being taken care of?

RAMIREZ: When they had me fill out the forms, it was weird because they had said...they had said....employee of SurroGenesis, and so, it was like... I don't know... and to me I was like maybe they consider surrogacy, you know a form of a job because you are getting paid I guess.

HINOJOSA: If I am a surrogate for SurroGenesis, and I don't have health insurance. What were some other ways you guys would handle that?

COLLINS: If there was no other way to get insurance, and the parents say could not afford say Lloyds of London, we would hire, at minimum wage, hire the surrogate, and put them under the group plan.

HINOJOSA: Put them under SurroGenesis group plan of health insurance. What do you think about that?

COLLINS: What about it? I think it's a pretty smart way to get insurance.

HINOJOSA: In San Francisco private insurance investigators are working with the FBI. Steve Price is the Senior Fraud Investigator for Blue Shield of California. We show him documents that prove SurroGenesis represented Salina as an employee.

PRICE: In this particular situation that you have mentioned where this individual states that the agency was going to hire her, they had marked on the forms that she was an employee though she had never set foot in that office, they applied for coverage for her through Blue Shield of California, is —is an example of the knowing and willful intent, which provides for an element and evidence for —for fraud.

HINOJOSA: Debora Spar says this kind of misrepresentation could be avoided with stronger government oversight.

So you say that essentially this business is inherently uncertain.

SPAR: If you compare surrogacy for example buying a used car there are many more rules of what happens when you buy a used car.

HINOJOSA: As we investigate SurroGenesis we learn that most of the people doing business with Tonya Collins have never even met her.

BETH MARDONES: At the time it was very convenient for us to be able to do everything over the phone and conference calls rather than meeting face to face. Now, after going through the whole experience what we've been through, obviously that's not always the best avenue in which to do business and a lesson learned for us.

HINOJOSA: On the company's website SurroGenesis claimed to have over 50 locations across the United States. We went to look for one of their offices in Modesto, California, but it turns out that it is only a postal box at a local mail franchise. Tonya's husband gives us permission to visit their home in Modesto. Its been abandoned but we make an eerie discovery. The signs that once advertised this multi-million dollar business lie in the garage, covered with dust. But where is Tonya Collins? At the time SurroGenesis folded Collins lived in Colleyville, Texas, a Dallas suburb. But we get a tip from a former employee that she might be back in California. After searching through all her previous addresses we track Tonya Collins down in Hilmar, California. Her SUV with Texas license plates sits in the drive way of her first husband's home.

Hi we are looking for Tonya. Can I just ask her a few questions we are with public television.

YOUNG WOMAN: No actually she isn't here

HINOJOSA: Her car is here.

YOUNG WOMAN: I know but she is not here.

HINOJOSA: What time do you think she will be back? And she is definitely not home right now?

YOUNG WOMAN: Thank you

HINOJOSA: Thank you.

We follow up with a phone call, which went unreturned. But it seems we aren't the only ones unable to talk to Tonya Collins. She has been moving from state to state. She also hasn't responded to the civil law suit filed by the attorneys. Back in Sacramento, Salina receives an email from the Spanish couple urging her not to abort their child. In exchange they promise to cover her expenses. She decides not to abort the baby.

When somebody says, that they find it just almost impossible to believe that you would become impregnated by people who you never met, never even spoke to, and the person who was managing all of this was somebody you had never met in person, they're going to say, what were you thinking?

RAMIREZ: That's something I regret, like not going to an office... like an actual office and meeting somebody.

HINOJOSA: When you think of the story of Salina who is now essentially in a situation where she doesn't know where to turn and what the future looks like, you say, regulation could have helped?

SPAR: Well, I think for sure, regulation would have helped. First of all, there should be some kind of regulation that who can open a surrogacy business. Again, if you open a medical practice, if you open a law practice, you have to have some kind of certification behind you. You can make sure the money is really held in a legitimate escrow account that is certified by some kind of government agency so the money is there.

HINOJOSA: Not only are there no federal laws dealing with the surrogacy business in the United States, at the state level it's a patchwork ranging from outright bans on surrogacy to no regulation at all.

SPAR: Well, I think it's pretty primal that what happens in the surrogacy arrangement is that one woman gives birth to a child and then she hands that child over to another in exchange for money, and it feels very, very close to baby-selling, which is something that is completely illegal in virtually every country around the world; and because surrogacy comes so close to feeling like baby-selling, most countries have decided that it too should be illegal.

HINOJOSA: So why hasn't congress acted on the issue? They've decided not to regulate, I mean is that a proactive decision, we're not going to regulate or is it, we don't even discuss it?

SPAR: I think it's closer to the latter. That in the United States, politicians are so terrified of touching the abortion debate.

HINOJOSA: But what does abortion have to do with surrogate mothering?

SPAR: If you want to think about how you would regulate surrogacy, you have to have define who owns the embryo or who has control over the embryo, who gets to inherit the embryo, all these - basic legal matters, but in order to do that you have to define what the embryo is and once you define the embryo legally, you are smack in the middle of the abortion debate.

HINOJOSA: There have been calls for more regulation at the state level. But for the former clients of SurroGenesis like Beth and Marcio Mardones the emotional trauma will never go away. After three failed attempts with surrogacy they are down to their last two embryos.

BETH MARDONES: I just - I just feel like time keeps getting away from me and - when situations like this happen with SurroGenesis, it's like, you know, you have - you have taken money from me, but you have taken time It's really hard, but there is nothing that would complete us better than having a child of our own, whether that's through surrogacy or adoption. We both have so much love and care to give.

HINOJOSA: On July 21st Salina gives birth to a premature baby girl by an emergency C-section. The Spanish couple flies in and receives custody of the infant immediately. Salina's name does not even appear on the birth certificate. She's back home now taking care of her own two children. In the end she received half of what she was promised. But she may have to pay that out in medical bills. She's liable for the hospital cost including the delivery.

BRANCACCIO: So what do you think of the essential premise here? Paying people to carry babies. We'd like to know if you think it's right or wrong. Vote in our website's "Weekly Q". PBS.org is the place to start.

And that's it for now. From New York, I'm David Brancaccio. We'll see you next week.

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