I came across Jack Abramoff back in 1999 while doing some research on how sweatshops could still exists on the Commonwealth of the North Marina Islands (CNMI) almost a decade after they had been subject to some of the largest fines ever handed down by the US Dept. of Labor. The answer was Jack Abramoff, the K Street Project and the Tom DeLay wing of the GOP (which is pretty much all the current Republican Party).
I have collected hundreds of articles and documents, but today I came across one that captured the epoch scope of Saipan's sweatshops and their connection to the Abramoff scandal and US politics.
Oddly it was written last August for China's Business Newspaper The Weekly Standard of Hong Kong. The article written by Zach Coleman, Sweating it out in Saipan is the one to read to fully understand the Abramoff scandal and its links to Saipan, China and corruption in DC.
Excerpts and more details on the jump...
Ready. Set. Here we go. Let's meet the Tan Family:
The island of Saipan has been very good to Tan Siu-lin and his children.
In just two decades, this Hong Kong family has built a business empire there encompassing an airline, a sea freight line, a large fishing fleet, a newspaper and ventures in insurance, logistics and many other sectors. It is an empire whose prosperity has been maintained through an intricate web of money-fueled connections to powerful figures in the United States.
Family companies Tan Holdings and Luen Thai Holdings are together the leading players in the island's two main industries, garment production and tourism, as well as Saipan's biggest employer and taxpayer.
The Tans' success in the Pacific, 3,400 kilometers east of Hong Kong, flows from Saipan's status as what amounts to a special economic zone of the United States. [snip] At the same time, the commonwealth has autonomy over its immigration, customs, taxes and minimum wage levels.
The Tans exploit this duality by importing thousands of young women from China and other Asian countries to work in their factories and hotels at starting wages 40 percent below the US federal level. [snip]
Luen Thai turned a profit of US$30.4 million in 2004 as its core operation remained in Saipan sewing clothes for the US market.
Tan Siu-lin, father of Henry, William and four other children, moved the brood from Hong Kong to Guam in 1972 to venture into shipping, real estate and movie distribution. The family business headquarters moved to nearby Saipan in 1983 after the elder Tan opened a sweater factory.
It was the island's first clothing factory and was followed by dozens of others opened by the Tans and companies from South Korea, Taiwan and China. Workers from the Philippines, Bangladesh, Thailand and other Asian nations poured in and quickly outnumbered native residents.
Of course they had some trouble with forces that didn't like sweatshops under a US flag:
US labor inspectors eventually came poking around. In 1991, the US Labor Department sued six Tan companies for paying 1,350 mainly Chinese workers less than Saipan's minimum wage and forcing them to work up to 90 hours a week without overtime pay.
The US Occupational Safety and Health Administration (OSHA) levied more than US$240,000 in fines against the six Tan companies the next year [snip]
The Tans eventually settled the overtime suit without admitting wrongdoing by agreeing to pay the workers US$9 million. They settled the health and safety charges by pledging US$1.3 million in renovations and paying a US$76,000 penalty.
In 1992, George Miller, ... chairman of the House Resources Committee, convened the first of several hearings to ... consider possible changes to Saipan's legal status, such as extending the federal minimum wage or immigration controls [snip]
Enter Jack Abramoff, stage Right:
The Tans and their fellow Saipan garment makers realized they needed friends in Washington. Commonwealth governor Froilan Tenorio, a Republican, hired Abramoff [snip]
Years spent running conservative political groups had brought Abramoff close to many newly ascendant Republican congressional leaders, especially DeLay. Abramoff augmented those friendships with campaign contributions.
His favored tactic was organizing trips to the island for congressmen, their staff and families, conservative commentators and think-tank researchers. The delights of free travel to a remote, beach-fringed tropical island were an easy sell in the busy US capital.
"There is no doubt that trips to the CNMI are one of the most effective ways to build permanent friends on [Capitol] Hill and among policy makers in Washington,'' Abramoff wrote in a 1998 strategy memo.
DeLay was Abramoff's most prominent guest. [snip]
Willie Tan hosted a dinner in DeLay's honor. [snip]
Some time later, Tan told a human rights activist posing as a clothing buyer that DeLay had given a personal pledge to block any reform proposal. "I make the schedule of the Congress and I'm not going to put it on the schedule,'' Tan quoted DeLay in a conversation secretly taped by the activist.
The Senate unanimously passed a bill in February 2000 to extend federal immigration controls to the commonwealth. DeLay rose to the occasion, blocking the House version of the bill from ever coming to a vote. [snip]
Over the last decade, the Tan family and their companies have spent at least US$200,000 (HK$1.6 million) on lobbying and contributions to Washington political campaigns.
More significantly, the commonwealth government and Saipan business associations invested more than US$11.5 million between 1995 and 2002 to lobby in Washington against changes to the islands' status. [snip]
Much of Abramoff's power stemmed from his close ties to Texas Republican Tom DeLay.... Through Abramoff, Willie Tan, who directs the family's ventures in Saipan, also became buddies with DeLay.
And of course the relationship was about more than money. There were the dirty tricks, money laundering, vote rigging and other GOP values that served to build a lasting bond between the Hong Kong corporation and DeLay's GOP:
Congressman Miller pointed out in a letter addressed to US Attorney General Alberto Gonzales last month that commonwealth accounts show US$1.6 million more in payments to Preston Gates in 1996-2001 than Preston Gates reported receiving in its filings. A 1999 commonwealth audit found US$3.4 million of the payments made to the firm to be unlawful, as they covered services performed during periods when no contract was in place. [snip]
Willie Tan ... did play a role in Abramoff's work, as documented in an e-mail sent in January 1998 by the lobbyist to Tan and two senior lieutenants, Eloy Inos and Benigno Fitial, detailing planned lobbying strategy.
"I composed this e-mail before receiving Willie's e-mail concerning the budget for the representation,'' wrote Abramoff. Later he referred to past comments by Tan about the need for extensive preparation for upcoming congressional hearings.
After the memo was leaked to the press, Abramoff told one reporter: "We don't have a relationship with Tan and we never will.'' [snip]
Abramoff eventually won back his commonwealth lobbying contract after Fitial, the Tan Holdings lieutenant addressed in the strategy memo, left the company and won election to the commonwealth legislature in 1999. He emerged as the speaker after two former top DeLay aides flew to Saipan and promised two legislators they would secure federal funding for infrastructure projects in their districts. [snip]
Henry and Josie Tan each donated US$1,000 to George W Bush's 2000 campaign. In October 2002, two family companies on Saipan, the L&T Group and Global Manufacturing, each sent US$25,000 to the National Republican Senatorial Committee. A third, Concorde Garment Manufacturing, sent US$25,000 to the National Republican Congressional Committee. [snip]
Sometimes Tan family members recorded a Hong Kong address on their donations, sometimes one in Saipan. Federal campaign regulations mandate that only US citizens or permanent residents can legally donate. Luen Thai's IPO prospectus says that Henry and brother Raymond are Chinese nationals living in Hong Kong.
There are more details in the article. And an earlier piece by the same reporter in Dec. 1994, The Island that lost its shirts, gives a great snapshot of the CNMI textile industry and its decline in light of trade restrictions coming off China. But its no problem for the Tan Family as the shift their CNMI business to tourism for Chinese vacationers. All to new airports paid for by US taxpayers.
As the Abramoff scandal becomes more competitive reporters will return to CNMI. So will the testimony of Mike Scanlon. He was one of the DeLay aides mentioned in the vote-buying graph of the above story.
And of course there are many Congressmen and at least one Senator (hello Burns) who have more to worry about from Saipan and the Chinese funds flowing to the GOP than they do about the Tribal scandals.
And if Jack makes a deal, we'll get an idea of how big this scandal really is and they'll be a rush on the Republican side of the isle to cut a deal before all the good ones are made.
Now if only a US paper would report on this. I hate getting 4-month old news from China on a GOP owned and operated scandal in the good old US of A...