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Worked Over

A controversial corporation brings foreign students to Whitefish and other cities, giving them menial jobs for lousy pay. Is this any way to see America?


It was late December 2007 when Brazilians Paulo Vanucci, 30, and Ricardo Fernandes, 21, and Chilean Daniel Henriquez, 22, arrived in barren West Wendover, Nev. They’d come to the outpost, a gambling oasis near the Utah border, for jobs at a hotel-casino—work that had been arranged for them by an Atlanta-based company called Hospitality & Catering Management Services.

The three men were all college students on their summer break (it was summer in South America), and they’d signed on with HCMS for common reasons. Coming to America would help them improve their English, learn about the culture, and make a little money, too.

When they arrived in Nevada, however, their would-be employer, the Red Garter Hotel and Casino, had surprising news. The hotel didn’t need them after all—it had too many employees already. So HCMS directed the trio to board a bus for a 15-hour ride to Missoula. There, Alisher Hamrakulov, an HCMS property manager, picked them up and drove them to Whitefish.

The men say Hamrakulov led them to a two-bedroom, one bath unit at the Alpha Apartments, a two-story building near the downtown. The room held five beds, a collapsible card table, and a pair of couches. The light bulbs were bare; there were holes in the walls. There was no phone, no sheets or blankets for the beds, and no dishes or cookware for the kitchenette. In the coming days, two more roommates would arrive to share the cramped space.

For this apartment, HCMS deducted $250 in rent each month from the men’s $1,200 per month paychecks, and made each of them pay rent through the end of March 2008, even though Fernandes’ and Vanucci’s visas expired at the end of February.

Together, the five roommates would pay $1,250 per month for the apartment. According to former residents, the same sized unit in the Alpha Apartments normally rented for about $500 per month. Owners of Alpha Apartments would not comment for this story.

“It was like this,” Fernandes says, explaining how he came to sign an HCMS contract that would bind him to these terms.

“We got in the house, and [Hamrakulov] just throw the papers on the table and he says, ‘Just sign the contract, just sign the contract.’ I say, ‘Hold on man, I gotta read this contract first.’”

When contacted by phone, Hamrakulov declined to comment for this story. The three students, however, say the contracts, all of them written in English, obligated them to stay at the apartments, and set the terms of their rent and their three-month lease. It also informed them that there wouldn’t be any transportation, public or otherwise, to get them to their jobs at Idaho Timber, a local mill. They were on their own to walk a mile to work down the shoulder of U.S. Hwy. 93 in the middle of winter, with not enough money to buy a car, or even a bike.

While all three men speak English fairly well, they say they were not prepared to read and sign legal documents in a foreign language.

“He say, ‘If you don’t sign this, you’re not going to be able to work for the company, and you are going to have to go back to your country,’ and we say, ‘Oh my God, we are in trouble,’” Fernandes says. “My dad pay a lot of money for this.”

Each of them had paid more than $3,000 in travel costs, visa expenses, and fees to the three different companies they’d used to get the jobs.

“So I got to keep this work,” Fernandes says. “I hope the only problem is going to be the housing, but no.”

No indeed. Vanucci, Fernandes and Henriquez came to Montana on a J-1 visa issued by the U.S. State Department as part of its Summer Work/Travel program. The program allows college students from other countries to work and travel in the United States during their summer vacations. To get admitted, Vanucci, Fernandes and Henriquez sought out recruiters at their colleges, who referred them to a visa sponsor, who in turn procured their J-1 visas and connected them with HCMS. The corporation, according to its website, offers management services for hotels and restaurants; it also finds apartments and jobs for foreign students, placing them in fast-food chains, restaurants and hotels, among other spots.

The work/travel program was created under the Mutual Educational and Cultural Exchange Act of 1961, in part to provide “foreign nationals with opportunities to participate in exchange programs in the United States and return home to share their experiences.”

Unfortunately, according to one government study, the program is poorly supervised and not always a positive experience.

In 2005, the General Accounting Office (GAO) released a report about the work/travel program and a similar program for students seeking training in their fields of study. It found lack of oversight that could lead to “exchange participants being exploited, resulting in negative experiences, which could undermine the purpose of the programs.” One State Department official found 45 participants in substandard housing, the report said.

The State Department’s monitoring efforts, the report continued, “largely consist of reviewing written information provided by sponsors, with minimal efforts of verifying such information through program visits.”

When told about alleged problems with the program in Whitefish, Jess Ford, the GAO official who wrote the report, put it this way: “To be honest, I’m not surprised. The State Department doesn’t have enough people to go out and check out all the sponsors,” he said.

Potential troubles notwithstanding, the State Department has increased the number of summer work/travel visas it offers each year. In 2004, the year before the GAO warned about abuses, the department handed out some 89,500 program visas; in 2007 it issued 150,300, nearly 2,000 of them for students headed to Montana.

Montana, for the most part, has been grateful for the help. In regions like the Flathead, chronic labor shortages leave businesses anxious to fill jobs that locals won’t take.

Some guest workers say they are grateful for the J-1 programs, too. Nicolás Pereyra, 29, of Argentina, and Nicolas and Marko Yurac, two brothers from Chile, 21 and 20 years old, spent three months this winter in a large two bedroom apartment in Whitefish that they shared with a fourth roommate, courtesy of a San Francisco-based employment agency called Intrax. On a recent visit, their apartment had the perpetually festive feel of a college dormitory, with a few beer cans lying around, snowboards propped against the wall, and posters of bikini-clad women thrown in for good measure.

On their days off, the men said they went boarding or hit the local bars for karaoke nights. Pereyra talked about getting dressed up to see EOTO play at the Bierstube on Big Mountain. Nicolas and Marko, meanwhile, made gnocchi in their kitchen, using cookware provided by Intrax.

“We like it very much,” said Pereyra.

But other guest workers around the nation, like Fernandes, Vanucci and Henriquez, have complained about overpriced, sub-par housing conditions, lack of basic services, and insufficient wages. A number of the complaints involve HCMS.

In Alabama last June two Moldovan women filed a $1.1 million civil suit against the company, charging it with fraud, breach of contract, and “human trafficking.”

Montana’s HCMS workers have returned home with depleted bank accounts, broken dreams, and, in one case, a broken leg.

A number of Whitefish residents, meanwhile, see the guest worker program as a drag on local wages and social services—a potentially positive cultural exchange that, because of mismanagement, has been mostly negative.

The Independent this winter spoke to more than a dozen employees reporting problems with their summer work/travel work programs. All had one thing in common—they worked for HCMS.

If there’s any doubt about labor shortages in the Flathead region—and why employers there hired an estimated 90 J-1 visa students this winter—all one has to do is talk to Laura Gardner, supervisor of the Flathead Job Service Workforce Center. Businesses have had a tough time filling vacancies for at least the past six years, Gardner says. Positions have gone unfilled across the board, in both skilled and unskilled labor, construction, health care and the service industry. This month alone, the center listed 270 job openings.

“I’ve had such a hard time getting local employees,” says Todd Featherly, general manager of Idaho Timber, the first employer for Fernandes, Vanucci and Henriquez. In the past, Featherly says he hired people who already had day jobs and were looking for night work to supplement their incomes. For the last four years, he says he’s used J-1 workers to fill general laborer positions, including eight current employees from HCMS. This is the first year he’s actually contracted with HCMS, or any company, to have employees brought to Whitefish for Idaho Timber. So far, he says he’s happy with HCMS, although he hasn’t decided whether or not to use the program again next winter.

At Whitefish Mountain Resort, Dana Connell, the human resources director, says there are about 70 J-1 visa students from South America this year. “It’s a struggle to find people locally who are willing to work seasonally,” says Connell, who adds that the resort also used J-1 students last year. “It’s not really about the pay, because the pay is competitive. It’s really about job security…People who live here aren’t willing to leave their full-time jobs to come work for us, knowing that they’ll be unemployed again on April 6.”

Karen Baker, human resources director for Grouse Mountain Lodge, says she’s used HCMS to provide J-1 workers for about five years, and uses about 25 student workers each year (supplying all of them with bedding and kitchenware, she adds).

“They’ve done right by us,” she says about HCMS.

Not everyone agrees that this is the best way to solve worker shortages, however.

Montana Rep. Mike Jopek (D-Whitefish) says he considered crafting a bill for the 2007 Legislature that would tighten up rules regarding the hiring of guest workers. But he says he was told such a measure would step into an area governed by federal law.

Eventually, Jopek backed off. “I don’t know if that was the right choice or not,” he says.

Jopek says he’s not fully convinced that there’s a worker shortage, believing instead that supply and demand should solve the problem—and that employers should attract workers during a shortage by paying them more. (McDonald’s in the Flathead Valley, for example, has offered $10 per hour to new employees—nearly $4 more than today’s minimum wage.)

“When you bring in the guest worker scenario you interrupt that natural succession of supply and demand,” Jopek says, “and for that particular reason the guest program takes away from opportunities for our Montanans to increase their living standard.”

Critics say the guest program has another unintended consequence, too. Some of the cost is being passed on to the valley’s social services. June Munski-Feeman, who runs the North Valley Food Bank in Whitefish, says needy J-1 workers frequently show up at the food bank. Indeed, since October, food bank records show that about 20 of the J-1 visa workers—either from HCMS or other companies—come to the food bank each week, making up about 15 percent of the bank’s 145-household-per week clientele.

“They’re not living in the very best of conditions, because they have to pay so much rent and get such low income,” Munski-Feeman says. “They don’t give them a living wage or accommodations to get by.”

In Munski-Feeman’s view, it’s wrong that local social services are essentially subsidizing companies like HCMS. “I want to send a letter to them and see if they won’t donate something to the food bank,” she says.

Officials at HCMS declined to be interviewed for this story, despite repeated requests from the Independent by phone and e-mail. However, Janece Burke, executive vice president of HCMS, offered this explanation to a Whitefish resident who wrote Burke to protest the treatment of Vanucci and other HCMS workers.

“I am not sure of your relation to Mr. Vanucci,” Burke responded to the letter, “but I wish to enlighten you on some facts you have no knowledge of. In order to hire international students in this country we are responsible to arrange their housing. We have done that, and find our apartments to be more than sufficient…The forms Mr. Vanucci signed are legal documents [and] were well understood by him before arriving to this country.”

Shortly after arriving in Whitefish, Fernandes, Vanucci and Henriquez started work at Idaho Timber, where they were hired as “pullers,” which basically involved hauling lumber by hand.

When an Independent reporter visited January 25, a month after they’d moved in, the apartment still had holes in the walls, bare light bulbs and five occupants.

They still didn’t have blankets. “We froze in the nights,” Vanucci said.

The men had other worries, too. Fernandes, Henriquez and Vanucci said they didn’t feel safe walking along Hwy. 93 on dark winter mornings, with snow banks crowding them on the highway’s shoulder, and cars speeding by at 45 mph.

“There are cars coming in front of you and in back of you and you cannot see the cars,” said Fernandes.

Their fears were well founded. On Dec. 27, one day after the men arrived in Whitefish, Cyntia Diaz, a Peruvian who also worked for HCMS, was struck by a hit-and-run driver while walking to work at Grouse Mountain Lodge early in the morning.

According to Indhira Huaman, a fellow HCMS worker who was walking with Diaz, a car traveling east toward Whitefish swerved and hit Diaz. The impact sent the woman airborne and pitched her into a ditch.

Huaman says she ran to Diaz and screamed for help. Diaz’s right femur was broken in three places; she was hospitalized for two weeks. Her visa sponsor, Cenet, covered the health costs, but Diaz was forced to return home two months early.

In response to the accident, Grouse Mountain Lodge began offering a free shuttle service for its J-1 employees. Whitefish Police say the hit-and-run suspect has not been caught.

Fernandes, Henriquez and Vanucci, meanwhile, were exhausted by their work hauling wood. They called their visa sponsors, Into Edventures, who in turn urged HCMS to let the men leave the timber company and work instead as housekeepers at Grouse Mountain. After about a week, the men’s wishes were granted, and they gratefully started new jobs at the lodge.

They were not allowed to leave the Alpha Apartments, however. And soon, one of them would go home.

The problems experienced by Vanucci, Fernandes and Henriquez are apparently not isolated to Montana. Similar woes are mentioned in a civil suit against HCMS filed in Alabama federal district court last June by Lina Scurtu and Cornelia Grozav of Moldova.

According to the lawsuit, Scurtu and Grozav, two graduates of a Moldovan college of economics, were traveling under a J-1 visa program that had an extra stipulation: HCMS said it would place them in a management-training program or something similarly career-boosting. Instead, they were stuck cleaning floors and taking orders at Wendy’s.

According to the women’s attorney, Robert Ratliff, the women also paid exorbitant prices for substandard apartments miles away from work. “We had young, twenty-something girls with an hour-long walk at three o’clock in the morning along a busy interstate,” Ratliff says.

Documents filed by the plaintiffs further allege, “HCMS controlled the plaintiffs’ daily lives through coercion and threats of being deported back to Moldova.” This, the suit says, “placed the plaintiffs in a form of labor servitude.”

“The workers have paid significant sums of money to come here and participate in the program,” Ratliff explains. “So if they get kicked out and returned home, they’ve lost all this money and they’re going to be in debt to the agency for their lease for housing.”

In response to the lawsuit, HCMS filed documents arguing that both Scurtu and Grozav voluntarily signed agreements stating that they would work “in a Wendco restaurant” and that they would use arbitration to resolve any and all legal disputes. In light of the latter, a district judge last October directed Scurtu and Grozav to take their claims to an arbitrator. The women are also suing the company that provided their visas; that trial is slated to begin in June.

In Ratliff’s view, meanwhile, companies like HCMS bring students to this country and control them by playing on their fears and economic status.

The amount the guest workers pay to participate in the program, about $5,000 for some of them, “is pretty much a year’s salary,” in their native country, Ratliff notes. “So if they return to Moldova, then they’re going to have to fly back and forth for depositions, they’re going to have to fly back and forth for motions and hearings, and they can’t afford to do that.”

Lawsuits in the United States are lengthy—another big problem, given the temporary nature of the J-1 visa. “In my opinion, that is what these companies rely on—that these kids have to go home, they can’t stay here, if they overstay, they’re screwed,” Ratliff says. The Moldovan women can only afford their lawsuit, he adds, because it’s being pursued on a contingency basis. In the meantime, he’s been able to get tourist visas for them, which they’ve already had to extend once.

Back in the Flathead, Vanucci says he tried to get something positive out of his time in America. On a whim one day, he walked into a downtown Whitefish art gallery and struck up a conversation with a clerk, Adrienne Newlon.

He told Newlon he was interested in doing some volunteer work that involved art, and Newlon put him in touch with Whitefish painter Shawna Moore. Moore welcomed him into her art studio and asked him to help her prepare canvasses.

By then, Vanucci had begun the housekeeping job at Grouse Mountain Lodge and now, with the opportunity to work with a local artist, it seemed like things were looking up.

But in late January, Vanucci became sick with what he thinks was a bad case of flu. He spiked a fever and couldn’t work for days.

Around the same time, Vanucci and Moore, the artist, had begun exchanging e-mails with Janece Burke, executive vice president of HCMS. The e-mails explained Vanucci’s issues with HCMS, and his desire to leave if the program was not fixed.

“I do not know of anyone in this town who would approve of bringing young workers and students from warmer climates and dropping them into sub-zero temperatures without an advocate to assist with clothing, transportation, free health services, communication, and access to language tutoring,” Moore wrote. “Besides this, I am sickened to think that companies such as yours benefit financially from the lure of the U.S. and the promise of international travel and learning.”

It was then that Burke responded, writing that Vanucci had fully understood the HCMS contracts when he signed them.

For Vanucci, it was time to cut his losses. His money was almost gone. “I do not want to suffer for this company,” he said. And on January 27, with help from Moore and Newlon for his travel expenses, he went back home to Brazil.

Vanucci, before leaving, said he had mixed feelings about America.

“I just used to see the United States in the movies. I expect just good things here,” he said. “I expect your medical situation is good, I expect people here are friendly, and you don’t have corruption here. We have much corruption in Brazil. Here, I didn’t expect that.

“I believe that in a place like Whitefish people are friendly,” he added. He would miss the people of Whitefish, but he would not miss HCMS. “This is a good place to live in, but this company destroys the image of your state,” he said. “I think you should do something to get it out.”

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