David Phinney

A Kuwait-based contractor now building the new $592-million US embassy in Baghdad has some pretty heavy baggage. It has been repeatedly accused of exploiting low-paid Asian workers and coercing them to work in war-torn Iraq against their will under US funded contracts.

A lot of people view such labor practices as labor trafficking, including the Bush administration. Nevertheless, the US State Department quietly awarded the half-billion-dollar-plus deal -- no questions asked.

When the contract with First Kuwaiti General Trading & Contracting, aka FKTC, was first unveiled last summer, the State Department pulled back the announcement immediately. My efforts since July to get State to explain the move went unanswered until February of this year.

FKTC has been accused of pushing by low-paid workers from the Philippines and Nepal into Iraq. The workers say they were recruited for jobs in Kuwait, but when they arrived at First Kuwaiti, they were then told those jobs had disappeared.

The workers say FKTC managers offered them a few options: Either hit the streets of Kuwait without a dime, food or a visa until the police take you to jail -- or go to Iraq. (Oh, and by the way, pay back the plane fare that got you to Kuwait in the first place before you leave town.)

The workers say they slept in company housing while they thought about it and they were served only rice and water.

Diplomatic officials from Nepal and the Philippines tell similar stories. So do former First Kuwaiti business associates. None of these people know each other, yet they all weave the same tales.

Here's my down-and-dirtyCorpwatch tale of the US embassy.

Otherwise read on for a fuller rendition:

Wadih al-Absi dreams of magazine covers celebrating his rise as a global player in large-scale engineering and construction.

The Lebanese Christian began his career as a laborer installing drywall on building projects after escaping war in his home country in the late 1970s and moving to Kuwait. The Persian Gulf nation welcomes, even recruits, expatriate blue-collar workers like al-Absi once was to do the grunt work and domestic chores for its booming, oil-rich economy. Glitzy shopping malls, flashy cars and sprawling villas reflect the countries affluence even as migrants make up the nearly two-thirds of this tiny desert state's 2.3 million population.

Now, building his own personal fortune, al-Absi, too, relies on migrant labor. His Kuwait City firm, co-owned by a member of one of Kuwait's richest and most powerful families, is one of the larger Middle East companies that collectively ship tens of thousands of cheap day laborers to war-torn Iraq. Once delivered, the low-paid workers earn just dollars a day under US contracts in support of the Pentagon’s military presence and reconstruction efforts.

Recruited from some of the poorest countries in Asia, these laborers work 12 hours a day, seven days a week to provide essential services once performed by the military itself. Called “third country nationals,” or TCNs, they toil in military camps performing a sundry of tasks considered unsuitable for US war fighters. They work construction, drive trucks, run laundries, clean latrines, pick up rubbish and operate stores, dining facilities and warehouses. Without them, and these “body shop” contractors that provide the, the US and coalition military camps -- virtually small cities -- would shut down.

It is a lucrative business for al-Absi’s company, First Kuwaiti General Trading & Contracting, or FKTC, where he acts as both general manager and co-owner. Less than three years ago FKTC boasted of having $35 million in assets. Today, the firm has racked up hundreds of millions of dollars in US contracts in Iraq, supercharging the company well past the $1 billion mark. With 7,000 employees in Iraq, the company’s Web site lays claim to holding $800 million construction and supply contracts directly with the Army for military camps, plus over $300 million performed for Halliburton ’s multibillion prime contract to perform military logistics for the occupation forces in Iraq.

Trim and handsome with the looks of a gentleman in his prime, it’s the kind of success that allows al-Absi to enjoy finely tailored suits with French cuff shirts, send his children to American universities and enjoy the fruits of being a newly-minted millionaire.

But lucrative as his business is, it is also an increasingly controversial one. First Kuwaiti has been accused repeatedly of coercing low-paid Asian laborers to work in Iraq’s war zones against their will. Once there, FKTC workers and American contractors witnessing their plight have openly complained that the low-paid Asians have endured abysmal working conditions, live in crammed housing, eat poor food, and lack satisfactory medical care and safety gear.

Filipino Ramil Autencio is one such laborer who worked for FKTC. Originally recruited for employment by MGM Worldwide Manpower in the Philippines, the 37-year-old air conditioning maintenance man said he had planned to work at Crown Plaza Hotel in Kuwait for $450 a month. That all changed in December 2003 when he arrived in Kuwait. He says his recruitment contract was sold to FKTC.

“They forcibly brought me to Iraq when my contract provided that I would work in Kuwait,” he claimed. In 2003, Autencio and other Filipinos found themselves cooped up in FKTC housing for a month without pay and minimal food as they awaited their transfer to Iraq, he said. “They threatened to put us in prison and they took everything we had, including our passports. The police would arrest us if we went out.”

Al-Absi, who speaks excellent English with the collegial frankness of a construction worker, denies the allegations of ill treatment and repeated reports of trafficking.

“It’s bullshit,” he said during a telephone call from Kuwait after emailing electronic documents apparently signed by Autencio and others agreeing to work in Iraq. “Total bullshit.”

The agreement also lays out Autencio’s salary: $346 a month for 8-hour days, seven days a week, plus $104 a month for a mandatory 2 hours overtime every day.

Al-Absi insists that Autencio was paid in full.
“He sued me in court over this, and he lost,” Al-Absi said. “He doesn’t have a case against us.”

Besides, if FKTC treated workers badly, why do they still work for FKTC and renew their contracts every six months, al-Absi asks. Why does his roster of US contracts continue to grow larger and larger and the US Army has awarded the company certificates for a job well done?

“Our camps rank number one of all labor providers,” Al-Absi said during a recent telephone interview. “Come and see. KBR, the military and everybody is all very happy.”

Still, Autencio does not back down on his story. “All the contracts I had referred to Kuwait,” he said. “They pushed me into Iraq when they opened jobs there.”

Meeting over a morning coffee last September at the posh Four Seasons Hotel in Washington, a legendary Georgetown retreat favored by pampered heads-of-state, Hollywood elite, the Rolling Stones and business executives, al-Absi’s eyes widened as he talked about his company’s greatest prize yet -- the new US embassy construction in Baghdad.

The massive $592-million project may be the most lasting monument to the US occupation in the war-town nation. Located on a on a 104-acre site along the ancient banks of the Tigris River, plans call for a totally self-sustaining compound of 21 buildings, a swimming pool, a power station and a food court. Scheduled for completion by June 2007, the installation will be the largest, most secure diplomatic embassy in the world -- covering two-thirds the area of the National Mall in Washington, DC. -- and home to more than 1,000 US embassy workers.

With a prestigious notch like that on the company’s resume, First Kuwaiti will step onto the world stage, al-Absi beamed. “I dream about what it means,” he said. “We have become a global company.”

But he asked to keep the embassy contract a secret until the first floors were built for security reasons. The dangers of an attack are just too serious. Even his personal residence had been bombed in the past, he explained. “I am all for transparency, but this is Iraq,” he said.

Despite the new embassy’s importance, the State Department has also resisted publicizing the contract. Only after weeks of inquiries, did the State Department confirm that FKTC had been selected for all but the most classified construction portion of the project. The department also acknowledged that when a public announcement of the first $370-million in FTKC contracts were awarded in July on the Web site FedBizOpps -- standard practice for all government contracts -- it immediately yanked the announcement down one day later for security reasons, according to department spokesman Justin Higgins.

When first asked about mistreatment of FKTC’s labor force last August, al Absi threatened to sue if the allegations were published. At the time, I was investigating the claims of Autencio and other Filipinos working in Tikrit for FKTC in late 2003 and early 2004. They complained they were overworked, served poor food, and received less salary than what was agreed to in their contract.

Autencio said that conditions became so bad that he and a group of 46 Filipinos decided to escape Iraq by hitching rides from Filipino truckers. Another Filipino serving in the US Army also helped them. Traveling by night, they reached Kuwait in three days time. Their numbers were so large that the Kuwaiti police could not stop them and they sought refuge in the Philippines Embassy, Autencio said. “The Kuwait police couldn’t do anything because we outnumbered them. We shoved them back when they asked for our papers. We were bolder because one of us had died by then.”

No Philippines embassy official could be found to comment on the alleged incident, but diplomatic affairs between Kuwait and the Philippines can be a touchy matter. The Philippines makes 10 percent of its gross national product off Filipinos employed around the globe, including Kuwait where an estimated 85,000 Filipinos live and work. Soon after the coalition invasion of Iraq in March 2003, a high-level Philippine delegation (led by Secretary of Foreign Affairs Roberto R. Romulo) visited Kuwait the following October to nail down agreements for Filipino manpower to labor under the flood of lucrative contracts for reconstruction and military support.

One of the delegation’s first visits was with the powerful Marafie Group of Companies, a consortium operated by one of the most powerful mercantile families in Iraq. Mohammad I. H. Marafie, chairman and co-owner of FKTC, is a member of that family. The Philippines has since soured on the occupation of Iraq. It has dropped out of the coalition and bans and Filipino nationals from working in Iraq for safety reasons.

One high level official with the Philippine Department of Foreign Affairs who requested anonymity did acknowledge that there had been numerous disputes in the past with Iraq contractors employing Filipinos, including FKTC. Poor food, medical care, crammed living quarters, salaries and work hours “have been serious issues,” the official said. “First Kuwaiti is well known.”

But the official cautioned that there was no evidence of labor trafficking by the company.

Still, accusations similar to Autencio’s also have been reported elsewhere.

Nepalese worker Krishna Bahadur Khadka told the Kathmandu Post in September 2004 that after he arrived in Kuwait for a job he was told by FKTC that if he and 121 other workers would be sent back to Nepal if they refused travel on to Iraq for jobs.

“I was not happy at first as my contractors did not provide me a job as heavy vehicle driver as pledged. But they had offered Rs 175,000 [$2,450], and one would not be able earn half that amount in Kuwait. So I signed the papers,” Khadka said, adding that he had already invested $1,680 as payment to a recruiting agent in Nepal so he could go to Iraq.

Noting that some recruiters misrepresent jobs, Al-Absi claims that Khadka’s allegation, too, is a lie and that Khadka misrepresented his skills. Again al-Absi presented a contract identifying the work site as “mainly Iraq." It bore Khadka’s signature and fingerprint.

“Khadka is a troublemaker who was trying to organize the workers,” al-Absi said, noting that thousands of TCNs working for First Kuwaiti have renewed their contracts with raises. “We treat our workers with excellent care,” he said.

More recently, an Oct. 10 story in The Chicago Tribune reported on four-dozen Nepalese workers waiting in Kuwait for jobs on American military bases in Iraq, but then changed their minds in September 2004. On television, they had just seen 12 Nepalese hostages in Iraq executed at the hands of insurgents. Some of the 12 believed they would get jobs in Jordan, but their work contracts have been sold several times and they were pressured into traveling on sent to Iraq for work with a Halliburton subcontractor based in Amman, Daoud & Partners.

In Kuwait, a manager from FKTC handed the panicked workers an ultimatum, reports the Tribune: either travel to Iraq to fulfill their contracts and they would get food and water or get nothing and be released on the streets of Kuwait City to fend for themselves. Undoubtedly, none had the resources to find their way back to Nepal.

"The company was forcing them to go to Iraq," Lok Bahadur Thapa, the former acting Nepalese ambassador to Saudi Arabia, told the Tribune.

Thapa successfully urged the contractors to release the workers from their contracts. He also persuaded the Kuwaiti government, albeit briefly, to ban the traffic of Nepalis across the border into Iraq.

Al-Absi, acknowledged that Thapa helped Nepalis at the firm's compound return to their homeland. But he denied anyone from First Kuwaiti tried to coerce them into Iraq. "It's nonsense," he said.

Such stories recently prompted the US State Department join forces with the Defense Department into possible labor trafficking by Middle East firms doing business in Iraq.

“Our people are investigating the issues,” said State Department spokesman Justin Higgins after US Ambassador John Miller, head of the Office to Monitor and Combat Trafficking of Persons, left for the Middle East in late January.

When I inquired last July about widespread complaints about poor working conditions and the possible coercion of low-paid Asian laborers to work in Iraq, the Army said an investigation was underway. That investigation began and ended with the Army raising the issues with Halliburton “for them to address with appropriate action within the terms of the contract,” said Army spokeswoman Melissa Bohan in an e-mail this month.

As FKTC, managing its labor supply business in Iraq is a nightmare. Workers are always complaining. They miss their families, they are frightened of the war, they want their pay distributed to different bank accounts around the world. The problems are ongoing, he said, but he continues in the business because the US Army wants him too. “I wanted to pull out and we started to pull out, but they say, no, no, you started this. Now you have to finish.”

Lucille Quiambao and Howie Severino reported from the Philippines for this article

Posted by davidphinney at 11:14 AM | Comments (5)

Gunning for Chappaquiddick or a Grassy Knoll

Vice President Cheney's accidental shooting on a south Texas hunting trip has all the makings for a radioactive half-life -- and it may possibly produce toxic chatter about the president's right-hand man for months to come.

Blame it on the lag time between the shooting of Cheney's friend, Harry Whittington, and the reporting of it to the police. It reeks of the same dynamic Ted Kennedy plunged into when he failed to report his deadly 1969 car accident at Chappaquiddick in a timely manner. Speculation, loony and otherwise, continues to grind away.

Throw in the fact that local police were slow to investigate the Cheney shooting, and you have a recipe for a story that will drift into years of idle conjecture. The stalling just makes people wonder about a cover up of Cheney possibly being drunk on his bird hunt.

As one prominent and very mainstream DC journalist remarked to me today: "And remember that Whittington was shot by low fire -- strictly verboten in a quail hunt."

Of course, this is all a tempest in a teacup, unless you consider a possible propensity for cover ups might also cast its dark shadow over the Valerie Plame/Scooter Libby affair. Then it gets more interesting.

And so, Capitol Blue reports thusly:

Secret Service agents guarding Vice President Dick Cheney when he shot Texas lawyer Harry Whittington on a hunting outing two weeks ago say Cheney was "clearly inebriated" at the time of the shooting.

The Capitol Blue Web site sometimes makes good news, so the possibility that the sources know what they are talking about is far from remote.

We talked with a number of administration officials who are privy to inside information on the Vice President's shooting "accident" and all admit Secret Service agents and others say they saw Cheney consumed far more than the "one beer' he claimed he drank at lunch earlier that day.

"This was a South Texas hunt," says one White House aide. "Of course there was drinking. There's always drinking. Lots of it."

Then again, maybe the story is just blowing smoke up a Grassy Knoll in Dallas where a mythical "second shooter" is said to have helped assassinate JFK.

The Smoking Gun now posts witness statements taken by the Texas sheriff who investigated Cheney's shooting of his quail hunting buddy. "And while there seems little doubt about how Cheney mistakenly plugged poor Harry Whittington, there still seems to be some disagreement over whether alcohol was consumed by the hunting party."

Posted by davidphinney at 09:31 AM | Comments (0)

February 22, 2006

Raised from the Dead

San Francisco Chronicle columnist David Lazarus interviewed in PRWeek giving suggestions to public relations people, but also punditing on the trajectory of corporate America:.

PRWeek: Do you have any predictions for 2006 for your beat? Lazarus: We're probably going to see a continuing disenfranchisement of consumers from large companies, and a growing sense of frustration in the marketplace that companies are sacrificing customer service at the altar of greater profitability. And at some point, you're going to reach a tipping point.

PRWeek: What happens after the tipping point?
Lazarus: I think you'll start to see a scaling back. In addition, there will be more awareness that the notion of bigger is better, which might work for shareholders, doesn't work for customers. And you're going to see a renewed focus at some point on giving customers attention. A good inclination of that is we're already seeing a number of companies advertising that when you call customer service you'll get a real person. Or, Dell Computer stepping up and saying 'When you call us these days, you won't go to India.' Clearly, a lot of companies are hearing that customers do not want to be treated in certain ways. And slowly but surely, I think the big ones will be responsive to that.

Posted by davidphinney at 01:08 PM | Comments (0)

I'll Buy That

Technology decentralizes power and dumps it onto the keyboads of individuals at all socio-economic levels. Corporate bureaucracy and middle management are increasingly being cut out of the deal and made irrelevant despite the short-term camouflage of outsourcing because the arts of outsourcing themselves are being outsourced.

Here's The New York Times noting the obvious about "the democratization of information technology:"

The second-generation Internet technologies -- combined with earlier tools like the Web itself and e-mail -- are drastically reducing the cost of communicating, finding things and distributing and receiving services online. That means a cost leveling that puts small companies on equal footing with big ones, making it easier for upstarts to innovate, disrupt industries and even get big fast.

If the The New York Times finds this news, then what has been pretty obvious for some time now is getting, well, really obvious -- especially on a slow news day.

Some people will judge a trend in light of their own self-interest and time frame, then operate accordingly. "That's true," they will say of technology, " but not in my lifetime."

Hey, the Internet kicked in just 15 years ago. We are in hyperdrive, Scotty. Gordon Moore's law still applies in spirit, if not specifically: Computing power will double every 18 months with no increase in price.

The strength of big corporations continues to be their mass marketing muscle, their dominance in branding products and their knack for persuading politicians to do their bidding in regulatory matters (remember the telecom bill?). Big corporations still have the capital to leverage and swipe the innovations of the smaller guys or stamp them out.

If that doesn't work then the big corporations just buy up the little ones -- and frequently ruin the product or service by doing so.

But big corporations are based on pyramids of power. It works in some sectors -- financial services, of course. But other corporate sectors face rapid decline as workers and small business decentralize with tech.

Posted by davidphinney at 08:18 AM | Comments (0)

February 21, 2006

Be My Guest?

It is an incredibly puzzling thing that advocates for lax immigration laws argue that illegal immigrants do the work that American workers refuse.

Outsourcing is great for low prices at Target and Walmart. Increasing cheap labor stateside with a flood of guest workers in competition with the US unemployed is ludicrous.

We may as well shoot ourselves in the foot -- or at least shoot the unemployed.

Here's an idea: employers should pay a living wage to Americans and Americans should be willing to pay it. We are talking about our neighbors down the street.

Second, illegal immigration flattens wages for US workers. For Christ sakes, unemployment rates among African Americans are an ongoing insult -- 14% unemployment rate among African Americans in Los Angeles, twice as high as among whites, The Los Angeles Times reports.

Why should the US invite more low-paid immigrants when people are unemployed in Watts?

This is the first time I have seen an immigration story framed with these issues in mind. The Los Angeles Times opens:

Drexell Johnson and his Young Black Contractors of South Central Inc. are hungry for work -- and when polite requests for an opportunity are rebuffed, they're not afraid to raise a ruckus.

After Johnson was cut out of a contract when Staples Center was being built, he drove to the construction site, spinning 360-degree rolls and kicking up doughnuts of dust until, he said, a bulldozer nearly ran him down. In Torrance, his group staged a mock hanging in front of an automaker's office. And earlier this month, they hauled a makeshift "slave ship" to an Inglewood mall development to symbolize economic injustice.

The tactics may seem outrageous, but they underscore the rage and frustration that Johnson and his cohorts feel about losing out to other workers in the region's construction boom. Their anger is fueled by a 14% unemployment rate among African Americans in Los Angeles, twice as high as among whites.

Of course, Democrats and Republicans are posturing for the "Latino" vote, as the story notes:

"The Democratic Party cannot afford to ignore the tension and anger among blue-collar African Americans and whites here, because they feel [immigrants] are taking their jobs," said Kerman Maddox, a Los Angeles public relations executive who has worked on several Democratic campaigns. "Everyone wants the emerging Latino vote, but at what expense?"

Congratulations to California Senators Dianne Feinstein and Barbara Boxer for having the spines to fight for a guest worker program restricted to farm work.

And as far as winning the "Latino" vote in the grandest of US racist tradtions, it appears the prized "voting block" is divided:

Latinos themselves are split on the issue. A Pew Hispanic Center poll last August found that 34% of American-born Latinos surveyed believed that illegal immigrants hurt the economy by driving down wages, compared with 55% who viewed them as an economic benefit by providing cheap labor. The survey found that 32% opposed a temporary-worker program, while 59% favored one.

Well, maybe not that divided. After all, majorities rule.

Still, the diversity is something news editors and politicians overlook in their search for the silver bullet to grab a bigger slice of the perceived "Latino market." That market is a pretty diverse crowd of people with some pretty diverse backgrounds resonating from Spain to Argentina to Mexico, Cuba to Nuevo York. Some are Europeans. Some are Native Americans. Some are African. Some are Asian. Some are all mixed up like the rest of us.

Posted by davidphinney at 11:19 PM | Comments (2)

February 20, 2006

Pay to Play

Tuition and fees at Columbia University Journalism School -- $38,500 for a one-year master's program. New York University-- $40,500 for a year-and-a-half program.

Hmmmmm..... Okay.

Sounds like membership dues for a country club.

You'll find those price tags in the somewhat pedantic story on changes in J-schools in The Chronicle for High Education. Focusing on the hiring of former BusinessWeek editor Stephen B. Shepard (I guess a certain friend can go back now), to head City University of New York's new Graduate School of Journalism, it quotes Shepard as saying:

"People complain all the time that the profession isn't diverse enough. And I don't mean diversity just in the sense of racial and ethnic diversity, but I mean in class terms, too. Working-class people, immigrants, people who have served in the military. The press in this country is not very representative."....

"There needs to be a publicly funded graduate school of journalism in this part of the world".... "There's not one in the entire Northeast, which means if you don't have $35,000, you're out of luck. And that just doesn't seem right."....

So the discussion continues (See "Part of the Problem"). But what about questioning the paradigm that journalism schools matter at all? I guess they matter most to those who shelled out the dinero.

Posted by davidphinney at 12:41 PM | Comments (0)

February 15, 2006

Cheney Shooting On White House Lobbyist's Ranch:

Katharine Armstrong, whose family owns the ranch where Vice President Dick Cheney accidentally shot a hunting partner, is a registered lobbyist who has been paid to lobby the White House, according to records, reports NBC ace producer Aram Roston.

Armstrong was paid $160,000 in 2004 by the powerful legal firm Baker Botts to lobby the White House, according to records she filed with the U.S. Senate as required by lobbying disclosure rules. The records indicate she was paid the money after she "communicated with the White House on behalf of Baker Botts clients."

Posted by davidphinney at 12:17 PM | Comments (0)

Cheney Shooting Incident: Was He Drunk?

From my source in Texas: "A lot of people down here (and remember this is where everybody hunts and has special property specifically for hunting ) think that he was probably drinking and they delayed telling anyone until he could get it out of system in case he was tested."

AND NOW, a little more third-hand rumination from The Nation:

Posted by davidphinney at 11:21 AM | Comments (0)