Military deals keep factory going despite immigration raid
NEW BEDFORD, Mass. — Michael Bianco Inc. was a success story, a small leather factory in a struggling city that landed military contracts at such a rate that its work force more than quadrupled in the span of a few years.
Federal officials said that growth was on the backs of illegal immigrants. The U.S. Immigration and Customs Enforcement rounded up 361 workers in a March 6 raid at the waterfront factory, and arrested the company’s owner and three top managers.
Yet inside the factory, sewing machines still rattle away as remaining workers continue stitching together backpacks and vests for U.S. soldiers in Iraq and Afghanistan. Owner Francesco Insolia has been back on the job since the day after his arrest, and the company says more than 400 people have applied for jobs since the raid.
And unlikely allies have come forward in support of the company because of what’s at stake: $91 million in an Army contract and hundreds of jobs in a region with an unemployment rate nearly double the national rate.
“We regard these 361 positions as new jobs in New Bedford for qualified and legal residents,” New Bedford Mayor Scott Lang said. “I want these contracts to be kept in the city.”
The mayor wants Insolia to step aside and the company put under receivership in a bid to persuade the Pentagon that federal dollars are being well spent.
“I don’t want this company on a disqualification list if new people are running it,” said Lang, who also is seeking to recover $57,000 in tax breaks the city gave to Michael Bianco. “The individuals should be on a disqualification list.”
Michael Bianco had 85 employees in 2002, when it began winning bids to supply gear to the U.S. military. It was up to 325 workers in 2004, when it landed an $82 million contract to make vests and backpacks for the Defense Logistics Agency, which is the Pentagon’s purchasing arm.
The Army last year awarded a $138 million contract to Bianco and has paid about $47 million for goods so far. The remaining $91 million and future contracts are suspended pending the outcome of the case. Bianco remains under contract to produce $64 million in goods for a Pentagon contract ending in August.
Before striking it big with military contracts, the company did business with high-end retailers, and until last week boasted about it on its Web site, naming Timberland Co., Coach Inc. and shoemaker Rockport among its clients.
Those names were removed from the Web site after inquiries by The Associated Press. Apparel companies, under pressure from workers rights activists in recent years, have adopted strict standards for conditions at garment factories.
Coach lawyers sent a letter to Insolia to demand that Coach be removed from the site, said Andrea Shaw Resnick, a vice president for Coach, adding that Coach hasn’t done business with the factory for at least the past 10 years.
Insolia’s attorney, Frank Libby Jr., said the nation’s immigration enforcement puts too much pressure on employers.
“It’s left at the employers’ door — the one and only point where the country’s immigration policies are supposed to be enforced,” he said.
Federal immigration guidelines instruct employers to not challenge prospective workers whose paperwork “appears genuine,” said Libby, a former federal prosecutor who specializes in defending corporate executives.
He had no comment on the mayor’s proposal to have Insolia step aside.
U.S. Senator Edward Kennedy, D-Mass., also wants the jobs to stay in New Bedford.
“But absolutely no one who helped oversee the operation of this fraud on the taxpayers and wholesale undermining of labor law and human rights should be able to participate,” Kennedy spokeswoman Melissa Wagoner said.
One roadblock may be a Senate amendment approved by a vote of 94-0 on Jan. 26, with both Kennedy and U.S. Sen. John Kerry, D-Mass., voting for it — as part of the federal minimum wage bill. Under the bill, companies caught hiring illegal workers while on a federal contract would be banned from government work for 10 years.
New Bedford at one time was a thriving textile city, home to Wamsutta Mills, which in the late 1800s was the largest textile mill in the world. Today, most retailers import their goods from Asia and other regions offering cheap labor.
Insolia, eager to change the public perception set by prosecutors who called his business a “typical sweatshop,” allowed Libby to give an Associated Press reporter and photographer a tour of the facility. That followed the release of a video — available on YouTube and produced by a public relations firm — that offers a similar look inside the company.
The day of the raid, U.S. Attorney Michael Sullivan accused Insolia of exploiting the illegal immigrants, paying them $7 to $7.50 per hour under “deplorable conditions,” including fining workers $20 for spending more than two minutes in the bathroom or talking while working. Minimum wage in Massachusetts as of Jan. 1 is $7.50 per hour.
Libby called the sweatshop allegations “baloney” and said there are no charges filed related to working conditions. He wouldn’t discuss the charges specifically. Insolia and his co-defendants are due in federal court April 6. They each face 10 years in prison.