House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev. (WDCpix)

Then came Massachusetts.

In the wake of Republican Scott Brown’s stunning Senate victory in the Bay State Tuesday, Republicans are already spinning the outcome as a damning referendum on the Democrats’ partisan health reform proposal. The validity of the claim is debatable, as many political experts say the voters’ anger is more likely a response to the nation’s still-struggling economy. Still, with polls indicating that health reform has become more liability than asset, Democrats are scrambling for ways to put health care in the rearview mirror and make room for more tangible election-year items: taking on Wall Street and tackling the unemployment crisis.

Democrats can’t abandon their health reform bill, many experts say, but nor can they rely on it alone for success in November.

“There’s no question that this has got to make the Democrats queasy about health care reform,” Henry E. Brady, dean of the Goldman School of Public Policy at the University of California, Berkeley, said of the Massachusetts contest. “But the reason they’re getting clobbered on the health care bill is the economy. That’s what they’re going to live and die on.”

“There’s a much larger discontent that’s demoralized the average Democratic voter in Massachusetts, and that’s the state of the economy,” agreed Michael L. Mezey, a political science professor at DePaul University. “They want to get health care behind them, and the administration is going to pivot to more populist themes.”

David Epstein, an expert on congressional politics at Columbia University, compared the health reform bill to another consequential, but controversial, Democratic initiative: the sweeping deficit-reduction legislation passed by the Clinton administration in 1993. That law eventually helped the country achieve billions of dollars in budget surpluses, but because it took a few years to realize the gains, the accomplishment offered Democrats few immediate political advantages. Indeed, the Republicans swept to power just a year later.

“It was a great piece of public policy, but it didn’t help them [Democrats] in the [1994] midterms,” Epstein said. In a similar vein, he added, “just health care is not doing it right now.”

Democrats seem to have gotten the message. House Majority Leader Steny Hoyer, D-Md., indicated Tuesday that, after health care, the Democrats will turn their attention quickly to the economy — and keep it there through the year. “Creation of jobs and the policies which will return us to fiscal balance will be our focus,” Hoyer said.

Later, Rep. Chris Van Hollen, D-Md., chairman of the Democratic Congressional Campaign Committee, issued a statement summarizing the Democrats’ election-year message. It boasted of the “economic progress” under Democratic leadership, but there was no mention of health care reform.

Still, Democrats can’t entirely abandon their top domestic priority at this late stage in the debate. As tough as it might be for some Democrats to explain to constituents their support for the bill, detailing its failure would be even tougher.

“They’re going to look like the gang that can’t shoot straight,” said Mezey. “Not passing it would be a big problem.”

Gary C. Jacobson, a political science professor at the University of California at San Diego, agreed. “Folding at this point,” he said, “might be more dangerous than just plowing on.”

Brown’s victory Tuesday was never supposed to be. Not only is Massachusetts among the most loyally Democratic states in the country, but the contest was staged to fill the seat vacated by the late Sen. Edward Kennedy, D-Mass., a lifelong champion of health care reform and an author of one of the early versions of the Democrats’ proposal.

Republicans were quick to claim Brown’s win as an indictment of the Democrats’ health reform bill. “The voters in Massachusetts, like Americans everywhere, have made it abundantly clear where they stand on health care,” Senate Minority Leader Mitch McConnell, R-Ky., said in a statement. “They don’t want this bill and want Washington to listen to them.”

The episode has left Democratic leaders struggling to locate populist issues that voters will embrace. Epstein suggested that financial regulatory reform would be such an issue. “It’s good for them both as politics and policy,” Epstein said. “If you’re looking ahead, that’s the issue that will make or break the Democrats in the midterm elections.”

Not that the Democrats don’t already have some legislative trophies to carry with them on the campaign trail. In the last 12 months, President Obama has signed bills to prevent workplace pay discrimination, expand children’s health care coverage and protect consumers from the most abusive traps of credit card companies. And the Democrats’ $787 billion stimulus bill — which has taken its share of lumps from both sides of the aisle — is also widely credited with preventing the economy from sinking much lower.

Still, Democrats could have done much more to excite the populist base that swept them to victories in 2006 and 2008. Party leaders, for example, ignored calls from a host of prominent economists who warned that the $800 billion stimulus was much too small to tackle the Great Recession. More recently, the White House abandoned its earlier support for mortgage bankruptcy reform, paving the way for the bill’s failure in the Senate. And while consumer advocates have applauded the credit card reforms enacted last spring, they were also critical that Democrats, bowing to pressure from the finance industry, delayed the effective date of those changes until this year.

In the wake of Tuesday’s election in Massachusetts, MoveOn.org sent its members an email message indicative of many liberals’ discontent with the Democrats. “Pass real health care reform,” the email said. “Rein in Wall street. Take on the banks and special interests that stand in the way of change.”

Before they can move to the economy, though, Democratic leaders will have to decide how to pass their health reforms with just 59 seats in Senate. Under one scenario, the House could simply take up the Senate-passed bill. Many House Democrats, however, have blasted that proposal from both the right and the left, leaving the success of that option in question. Furthermore, many moderate House Democrats who supported health reform the first time through might get cold feet after witnessing Brown’s victory in Massachusetts. That election, Brady said, “makes it so much easier for people in the House not to vote for it.”

Some experts argue that the Democrats have spent so much time, energy and political capital on health care reform that they won’t be able to ignore it on the campaign trail.

“They’ll have to campaign on it,” said Jacobson. “They’re pretty well committed at this point. If they’re not going to defend what they’ve done then they’re hopeless.”

Furthermore, with unemployment still hovering in double digits, it’ll be difficult for lawmakers to campaign on what is perhaps their most significant accomplishment of the last year: the string of government interventions that prevented the recession from becoming a depression.

“It’s tough to make the case that, ‘Had we not done this, things would be worse,’” Mezey said. “People are going to say, ‘Well, things are still pretty bad now, what are you going to do about it?’”

Hoyer, for his part, had a response. “We’ve been trying to do something about it,” he said in the Capitol Tuesday. “I think we’re making success. … But until the numbers turn around, until the economy is creating jobs, until there is more stability, people are going to be angry. And that, I think, is manifested throughout the country — not just in Massachusetts.”

Mike Lillis covers Congress for The Washington Independent, a Center for Independent Media site.

The revelations could resonate in Iowa, where two groups have made similar accusations against the company.

Elizabeth Jacobson, who worked as a subprime loan originator for Wells Fargo in Baltimore from 1998 to 2007, said her former company would encourage subprime loan officers to go into the city and target African American churches.

….to get a relationship going with the minister or the reverend at the church and try to get that person to schedule some sort of meeting. They would call it a “wealth-building seminar” to get the parishioners of the church to attend. And any loan that was funded by Wells Fargo, whether a purchase or a refinance, $350 would then be donated to the church. And so, that was the incentive for the church to want to have these seminars there.

But what would happen is the only loan officers that would attend these seminars were generally the subprime loan officers. And on these conference calls, at one point, somebody made a joke who happened to be a white loan officer and said, “Well, will I be able to go to these seminars?” And they were told right there on the conference call, unless you were of color, you could not attend these conferences, these wealth-building conferences. So it seemed me—Wells Fargo didn’t come right out and say this; this is just what I saw—is that they wanted the African American Wells Fargo loan officers to sell loans to the African American community.

Anyone who received a loan from Wells Fargo during this period could ask that the company donate $350 to a nonprofit of the borrowers choice.

“But the way that it was sold to these churches was, well, that money then will go back to your church. Have the parishioner decide, as the church is a nonprofit, that they want that $350 to go right back to that church,” Jacobson said.

In June, Jacobson filed a sworn affidavit with a federal court in support of the City of Baltimore’s lawsuit against Wells Fargo for pushing high-interest, subprime loans onto African Americans in Baltimore and the Maryland suburbs.

In addition to the targeting of African American communities, Jacobson said there was a push to drive up the company’s subprime loan division while telling the media the company was trying to avoid the risky loans.

I just started to see, well, wait a minute, you know, we’re putting — we’re setting people up for failure, basically. And what really — the point that really made my decision that I was going to leave the company was third quarter of ’07. Wells Fargo was actually the number one subprime lender in the country. So, internally, we’re getting all these emails and all this information about “great job, we achieved our goal, we’re number one subprime lender in the country.”

And I happened to see a news report with the CFO of Wells Fargo, and he was questioned about the subprime division and denied at that point that Wells Fargo even had a subprime division. So here he is, the chief financial officer, where the subprime loans were supposed to be paying for the fixed costs of the company, and he’s denying that Wells Fargo even did subprime loans. That was just the final straw of total disillusionment, and then I put my resignation in.

Loan officers would make “three to four times as much in commission if you put somebody into a subprime loan,” she said.

Two watchdog groups have compiled data showing a similar pattern of racial discrimination in Iowa. Their numbers show that minority homeowners in Des Moines were three times as likely to receive a high cost subprime loan as their white counterparts.

So far, no legal action has been taken in Iowa.

Here is Jacobson’s full interview, via Democracy Now.

The jury convicted Leonard Ray Russell on Sept. 12 after a four-day trial in Denison. Some of the alleged offenses took place at Big Earl’s Key Club, located in the same community.

“This case helped us understand that human trafficking is a much bigger problem in Iowa than most of us realized,” Miller said in a prepared statement. “It can be especially perilous for young people and disadvantaged kids, and it can occur in small towns. The underground nature of human trafficking makes it hard to fight, but the trafficking law is a valuable new tool and we will use it.”

Two Nebraska girls testified at the September trial that they met Russell in Omaha in August 2007, shortly after they had ran away from a juvenile home in Fremont, Neb. Aided by a 19-year-old prostitute named Marcia “Jazzie” Ryan, Russell befriended the girls and provided them with illicit substances.

Prosecutors alleged Russell, who has used addresses in both Sioux City and Omaha, Neb., took the girls to Davenport and Rockford, Ill. and then to Denison over the course of several days. At the locations, Russell was convicted of forcing the girls to engage in prostitution and perform at strip clubs, including Big Earl’s Key Club in Denison.

The girls testified that they didn’t like what they were doing and that they felt ashamed, but that they also believed they had no where to go. According to court testimony, the girls were required to give all money they earned to Russell and Ryan in exchange for food, shelter, transportation and clothing.

After the girls had been with Russell and Ryan for eight days, one of the girls — a 15-year-old — was placed on a bus to Washington, D.C. The girl was told that she was being sent to Russell’s cousin so she could learn to solicit sex. The other girl remained in Denison at the strip club and with Russell and Ryan.

An anonymous tip led law enforcement to the girl who remained in Iowa. The other girl was recovered and protected by law enforcement in Washington, D.C.

At trial local police and Iowa Division of Criminal Investigation officers testified that they retraced the steps the girls took and located hotel receipts showing that Russell had rented rooms in the cities described by the girls. Investigators also found online postings that contained pictures of the girls and an offer to provide them as prostitutes.

The Iowa Code, Section 710, made human trafficking a felony if there is a victim under the age of 18. According to the Code, the crime is the participation in a venture to recruit, harbor, transport, supply provisions, or obtain a person for purposes ranging from forced labor to debt bondage to commercial sexual activity.

Russell was convicted on two counts of human trafficking, one count of ongoing criminal conduct and two counts of pandering, all classified as felonies. He was sentenced Monday by Crawford County District Court Judge Edward Jacobson of up to 25 years for the criminal conduct charge, and up to 10 years each on the human trafficking and pandering charges. The sentences are to be served concurrently.

Ryan, Russell’s alleged accomplice, was arrested in September in Omaha on an active warrant. She was earlier charged with the same counts Russell faced in Iowa, pleaded “not guilty,” and her case is pending.

While Russell’s case was the first to be successfully prosecuted under the additions to the 2006 Iowa Code, there was a high-profile federal case on human trafficking tried in Iowa during 2007. Staff from the Cedar Rapids Gazette created a 14-part special report on that case, which involved a Minnesota teen and an eastern Iowa prostitution ring.

Jewish rabbis, who provide the required religious-based cut and inspections that are a part of the kosher slaughter process, were not paid Friday, and it was not the first time time that the kosher slaughterers (shochtim) and rabbis at Agriprocessors have gone without compensation. Other employees did receive paychecks, although some voiced concern that the checks may not clear. The rabbis were asked for patience and promised payments as soon as possible.

According to a source who attended the meeting, the plant plans to concentrate on poultry production — particularly on chicken — in the near future. The plant’s beef line has operated only sporadically over the past two weeks.

The decision to focus on poultry is intended to provide liquidity to the failing meatpacker, and it is seen as a necessary step in the wake of employee losses that have left the plant with less than a third of its full-capacity workforce.

Friday’s meeting came in the wake of a motion filed in the Agriprocessors bankruptcy case by the meatpacker’s largest creditor, First Bank Business Capital of St. Louis, Mo., claiming that the company should have filed for bankruptcy in Iowa court rather than in New York, where the current case is pending. Attorneys for First Bank contend that Agriprocessors filed as an Iowa business with the Iowa Secretary of State, and they filed as an out-of-state business with the New York Secretary of State.

The court in New York is expected to hold hearings on the motion Monday morning.

Documents filed with the court show three companies with a significant secured interest in Agriprocessors. First Bank is the largest with $35 million. Chicago-based MetLife Agricultural Investments is owed $9.6 million and Minneapolis-based Farm Credit Leasing is owed $6 million.

In addition, Jacobson Staffing Company of Des Moines leads the list of 20 creditors with the largest in unsecured claims with just over $845,3000 in unpaid bills. Weyerhauser of Chicago is a close second with just over $806,900 in unsecured claims. Other notables on the list are Alliant Energy ($318,255); Nyemaster, Goode, West, Hansell & O’Brien law firm ($208,636); U.S.D.A. Food Safety and Inspection ($88,179); and Chicago attorney Thomas V. McQueen ($60,612). McQueen served as counsel for former Agriprocessors supervisor Martin De La Rosa-Loera in a federal immigration-related case.

The list of 20 creditors totals just under $5.6 million. Agriprocessors has estimated that it owes between $50 and $100 million.

A 46-page creditor listing that was filed by attorneys for Agriprocessors in conjunction with the bankruptcy contains creditors from 30 states and the District of Columbia. In addition, the document lists creditors from the nations of Canada and Isreal. Creditors range from the Brick City Inn in Clermont to the Diners Club in The Lakes, Nev. Within the bulk creditor listing, which does not provide dollar amount owed to the creditors, both company founder Abraham Aaron Rubashkin and former executive officer Sholom M. Rubashkin are listed.

GAL Investments, a Postville property management company owned by Gabay Menachem, is one of the companies on the bulk list facing financial demise due to dependency on the Agriprocessors. Although the company has no direct management ties to Agriprocessors, its business was providing housing to rental customers in Postville. Since Agriprocessors was the largest employer in the area — definitely the largest by far for Postville — Menachem’s business depended on employees from the meatpacking plant needing lodging.

Last week, Menachem noted that up to 90 percent of his tenants had not paid their rents. His company, like the others in Postville that had organized to serve or had adapted to serve needs related to the meatpacking plant, has undergone difficult financial times since the May 12 immigration raid at the plant. The latest round of hardship, which includes Jacobson Staffing ending assignments with nearly half the Agriprocessors workforce, however, may be the final blow.

The rural electric cooperative that serves Postville turned off power to many of Menachem’s units this past week for non-payment. On Friday, many of the units without power had bright orange tags from the City of Postville warning that within a minimum of 24 hours water would be cut off if bills were not paid. Given that the electricity to the units also provided heat, the Postville Water Department was likely doing Menachem a favor by reducing the chance for broken water pipes.

“I couldn’t give you an exact figure as to the number of rental properties in town that are vacant,” Jeff Abbas of KPVL Radio said Friday. “I think I can safely say that two-thirds are empty.”

Abbas and other community leaders have been working to ensure that those left in town have basic necessities. Pauluans were thankful for warm winter coats. Some from the tropical island were hoping for monetary help so they could return to their homeland. Other individuals of varying nationalities sought refuge in a building with heat for a night, but many brave the elements as they try to figure out what comes next.

For his part, Menachem has tried to keep the wolves at bay. He argued with the electrical company, explaining that some of the units in jeopardy contained children. When the electrical company could no longer continue to offer their services without payment, Menachem moved families to other units which still had heat and power. Since many, if not all, of the properties have past due utility bills, however, it remains unclear how long such temporary shelters will last.

This week, former Agriprocessors executive officer Sholom M. Rubashkin, son of company founder A. Aaron Rubashkin, was arrested by federal authorities and will begin his own legal proceedings amid identity theft and immigration-related allegations. Within hours of Rubashkin’s arrest a financial institution cried foul on company management, claiming a $35 million loan was in default. Then more than 400 workers, brought into Postville by a staffing agency, learned that they were no longer working at the plant.

Iowa Gov. Chet Culver looked beyond the immediate and past news headlines to the lesson he hopes all state employers have learned from Postville.

“As Governor, I’ve worked hard to attract, retain and grow businesses, both large and small, across the state, including the creation of thousands of new ‘green jobs’ in Iowa,” Culver told the Iowa Independent. “At the same time, I expect every Iowa business to follow the law when it comes to the hiring and treatment of their employees.

“I have been concerned about the practices of Agriprocessors, not only as a result of federal raids earlier this year but because of state sanctions the company has faced on issues ranging from the health and safety of workers to their impact on water quality. No company is above the law. But if any thinks that they are, they will be held accountable.”

James Carstensen, chief of staff for U.S. Rep. Tom Latham (R-IA), said the action taken by federal authorities reinforces Latham’s “strong belief that no person is above the laws of our country.”

“If someone is found to have violated the law,” said Carstensen, “they should be prosecuted to the fullest extent of the law.”

U.S. Rep. Bruce Braley (D-IA) also expressed his appreciation that there would be consequences for members of Agriprocessors management if they are found guilty of usurping the law.

“I’m glad to see that investigations into Agriprocessors are continuing and that federal charges were filed today,” Braley said. “We must enforce our immigration laws equally against both employers and employees, and today’s charges are a significant step towards holding key management employees at Agriprocessors accountable. There should be consequences for those who broke the law, and I hope today’s charges will bring us one step closer to justice.”

Plant Future Even More Tenuous

Although it has hardly been a secret that Agriprocessors has had difficulty meeting financial obligations since the immigration raid, the plant’s immediate financial situation has further degraded since Rubashkin’s arrest in Postville Thursday morning.

On Friday U.S. District Judge Linda Reade provided a St. Louis liquidation firm a certain amount of interest in Agriprocessors’ Postville plant and a smaller, but similar kosher meatpacking operation in Gordon, Neb. Reade deemed the move necessary due to dire circumstances regarding the operation’s existing stock and livestock and a pending lawsuit by First Bank Business Capital, a bank that had loaned the company at least $35 million. In court documents filed Thursday, the bank contends that Agriprocessors is in default on the loan and that it should be allowed to sell any existing collateral.

The ruling by Reade allows Atec Liquidations to maintain conditions — such as keeping electrical power in the plant — so that any existing meat stores can be preserved and so that a possible million chickens and chicks can be fed.

It is unclear how the pending lawsuit by the bank will immediately affect the plant, although more will be known after a hearing scheduled for Wednesday. It is also unclear how the court will handle this suit in relation to the earlier suit filed by a Kansas City-based design firm for non-payment of invoices shortly after after the raid.

What is very clear is that the Postville plant, which has never been able to re-establish a stable workforce since the raid, is now in an even deeper hole. Jacobson Staffing, an employment agency that has effectively been serving as a human resources department for Agriprocessors since the raid, pulled all of its workers from the plant. Roughly 450 employees were formally notified this week that they should no longer report to work at Agriprocessors. An official with Jacobson would only cite a “communication breakdown” as a reason for the decision.

Just as First Bank Business Capital is not the first to bring a lawsuit for non-payment against Agriprocessors and its management, Jacobson is not the first staffing company to pull workers from the Postville facility. Waterloo-based Labor Ready pulled temporary workers from the plant in early summer after its employees had worked roughly 10 days. Labor Ready cited safety concerns.

Agriprocessors had also been using the staffing agency One Force to identify potential workers. It is unknown if One Force has kept a relationship with the plant, but on Saturday morning the company maintained online employment advertisements for the Postville facility.

The plant’s beef line ceased production either Sunday or Monday of this week, although poultry kills continued on some level. On Wednesday, sources in Postville reported seeing trucks load roughly 250 cattle that had been held in an outdoor pen and drive away from the plant. In the week prior, inspectors from the Iowa Department of Natural Resources discovered a cow skull, hide and two dismembered legs in the plant’s wastewater lagoon.  Management was not cited for a violation because, according to an Iowa DNR spokesman, “it was not standard operating procedure but did not pose a significant environmental risk.”

Since the May 12 immigration raid Agriprocessors has:

• been fined $47,750 by the Iowa Division of Labor Services for numerous health and safety violations.
• had two middle-management supervisors arrested by federal authorities (both later pleaded guilty) for encouraging illegal immigration.
• hired a high-profile, New York-based public relations firm that was caught impersonating members of the Jewish community.
• been the subject of an informal hearing by members of the U.S. Congressional Hispanic Caucus.
• said tentative relationship with Jewish labor force is “off limits.”
• been cited by the Iowa Division of Labor Services for 31 new and repeat safety violations.
• come under additional scrutiny for treatment of livestock.
• been charged by the Iowa Attorney General’s Office with more than 9,000 violations of state child labor laws.
• had two human resources employees arrested by federal authorities on immigration-related criminal charges. (One has pleaded guilty while the other awaits trial.)
• has been assessed nearly $10 million in civil penalties by the state of Iowa for wage law violations.

“We were trying to help people who were coming into the community without money and without a way to pay rental deposits and first month rent,” said Gabay Menachem, owner of GAL Investments, Inc., in a telephone interview Monday. “We worked with these people individually to allow them to use their future wages at Agriprocessors as security that they would pay their obligations.”

Menachem said the wage agreements, which began three to four weeks following the massive May immigration raid at the meatpacking plant, were viewed as a way to ensure he would get paid and to allow the new workers to immediately have a roof over their heads despite their inability to pay up front. The employees signed written contracts with GAL to have an agreed upon amount taken from their future paychecks, which were being paid by Jacobson Staffing Co. While there was a verbal agreement on behalf of GAL and Jacobson to offer this process to the new workers, residing in GAL properties was not a condition of employment, nor was there a written contract between the staffing and property company.

“When the new workers first came into town, I did rent to some without a wage agreement,” he said. “If the worker did not last, I was often left holding the bag. Even after we began to do the wage agreements with Jacobson, if a worker didn’t stay as an employee, I often would not know right away and would be left with a shortfall.”

Menachem believes the intent of the agreement was noble, but is concerned that media may have provided a false impression of his role in the wage agreements and with the Agriprocessors kosher meatpacking plant.

“I have set rents on my properties,” he said. “The properties were rented by unit and not by person in a unit. There may have been some of our renters who went against the rules and sub-leased their properties to others, but we did not have a part in that. I think there is a belief or a perception that I’ve exploited the workers and am getting rich from the wage agreements. That is just not the case.”

Tomorrow GAL will cease all wage agreements with the employees that were hired by Jacobson. Tenants working for Jacobson will no longer have their rental payments deducted from their paychecks, but will pay those bills directly to GAL. While Menachem acknowledges that this is an indication that workers who initially needed help in order to begin their new journey as members of the Postville community have become more self-sufficient, he also knows the decision could make moving to Postville difficult for future new residents.

“Before, Jacobson workers were able to use their employment as security for their rent and deposits,” he said. “This will no longer be the case and new workers will now have to pay those costs up front.

“It was an usual system to begin with,” he added. “I can’t think of any other place in America where a person could come into town with nothing and soon have a place to live and new employment. It typically just doesn’t work that way. People have to pay for those things up front. But because the plant needed the workers and because Postville needs the plant, we were willing to try and help people coming into town.”

Nina Taylor, who runs an accounting business and does work for GAL, said she remembers what Postville looked like before Agriprocessors purchased the defunct meatpacking plant.

“It was a ghost town,” she said. “There were many properties in town that were either for rent or for sale with few prospects for renters or buyers.”

As for the condition of rental properties being managed by GAL, Menachem, who has been a member of the Postville community for roughly four years, said the properties were in extreme disrepair when he originally purchased them.

“I’ve bought the properties, which were in need of assistance, and would work on them,” he said. “We’ve chosen to take care of the indoor problems first, so there are some of the properties that still look neglected on the outside. But, we are still working to repair that as well. You can see a big difference in the properties that we’ve owned for some time and those we’ve recently acquired.”

Taylor added that the problem with property maintenance bubbled over immediately following the immigration raid.

“Something that I haven’t seen reported is that many of the properties were rented before the raid to individuals who were not in the country legally,” she said. “People in that circumstance didn’t like to draw attention to themselves and, because of that, often didn’t report problems within their rental units. There was also a period of time right after the raid when we didn’t know which tenants had been detained or which properties were available.”

In the first weeks following the raid, GAL scrambled to find out which properties were vacant. According to Menachem, before the properties could be properly inspected and/or cleaned, there were new workers in need of a place to live.

“Before the raid I had two fulltime maintenance people on staff,” Menachem said. “All of this time since the raid, I’ve employed seven maintenance workers, and they all have been kept very busy correcting problems that have come to our attention.”

Although workers through Jacobson will no longer have rents deducted from their paychecks, employees that enter the plant via One Force Staffing will still have the option of living in properties that have been rented from GAL by the staffing agency for a wage deduction of $100 per week. Menachem wants the public to know that the properties have been rented at his standard rate and that GAL has no interest in the wage deductions being done by One Force.

Getzel Rubashkin, a grandson of Agriprocessors founder Aaron Rubashkin, is concerned that Iowa Independent’s previous report regarding the agreement between GAL and Jacobson may have mischaracterized him as a family or company spokesman.

“I can speak only for myself, and definitely am not speaking on behalf of Agri or for the family,” he said in a telephone conversation Monday morning. “In addition, I am concerned that my remarks were taken out of context and may have been interpreted to mean that this was how the company was justifying the payroll deductions.”

Formal requests for interviews of members of the Rubashkin family have been ignored, although prepared statements from company and family spokespersons have been made available to Iowa Independent via e-mail. With the lack of another avenue to present an opposing viewpoint and believing readers would want to know that the payroll deductions were used to pay more than rent, Getzel Rubashkin’s comments from the Failed Messiah blog were used in our report.

Some Agriprocessors workers have complained that they are being required to pay too much money for sub-standard housing in Postville. This picture, first published on FailedMessiah.com and used with permission, was taken inside some of the "campus-style" housing in Postville.

Some Agriprocessors employees may soon be paying less for housing.

GAL Investments, a property management company in Postville with roughly 60 properties, has notified tenants that it will be ending its relationship with Jacobson Staffing Company. Employees at the Agriprocessors kosher meatpacking plant who are working under Jacobson will no longer have rents deducted from payroll, but will pay the fees directly to GAL.

According to Ryan Regenold, a spokesman for the Des Moines-based Jacobson Staffing, his company has roughly 90 employees currently with Agriprocessors who will be impacted by the decision. Regenold confirmed the contract would be ending on Sept. 30, but otherwise had little to say.

A spokewoman in the GAL Investment office said ending the contract was a “mutual decision” that she felt would better serve the tenants. A letter from GAL owner Gabay Menachem informing tenants of the change was circulated to the affected homes in Postville on Friday.

A laundry room in this Postville residence has become a bedroom. Some employees have complained they are paying too much for inferior living conditions.

Jacobson will continue to provide employees to Agriprocessors, according to Regenold.

One Force Staffing, another company which has brought workers to Agriprocessors, has its own contract with GAL Investments. According to the GAL spokeswoman, that contract is not ending and will continue.

A job posting by One Force on the Career Builder web site aimed at potential employees in Convington, Kentucky lists housing accomodations in Postville at a cost of $100 per week, a sum that is deducted from upcoming paychecks. The listing also states that potential employees will be provided one-way transporation from Kentucky to Iowa for a $75 fee, which is also deducted from a future paycheck. Potential employees who wish to return to Kentucky must pay their own way.

Patrick Massey, director of operations for One Force, said that the company’s new employee retention rate at the plant has been good.

“If I lose placements out of Agri, it is normally within the first two weeks of someone being there,” Massey said. “That’s because people get there and get homesick, or realize they didn’t want to move that far away, or thought the job would be different than it turned out to be. People have their own expectations of what it will be like in Postville before they go and then, sometimes, they get there and it’s different, so they want to go home. If they stay past those first two weeks, my retention rate is about 95 percent. Looking at it overall, I’d guess that the retention rate for people who come and stay is about 70 percent — but that’s just an educated guess.”

The paycheck garnishments for rental fees and other fees have come under fire from the media because some plant employees have shown paycheck stubs with several hours worked, but no or few wages earned due to the fees. In addition, some of the workers have reported low living conditions — few furnishings, faulty utilities or other problems.

Nine students from Kyrgyzstan reported paying $2,025 per month for a home in Postville that had no hot water, a broken bathroom and little furniture. Eight men from the tropical island of Palau said they worked at the meatpacking plant and shared a home there. With each man having $100 per week garnished from his pay for rent, the sparsely furnished home is gathering nearly $3,500 per month.

Getzel Rubashkin, grandson of Agriprocessors company founder Aaron Rubashkin, has been quick to point out that the money being collected each week also often includes utilities. Such claims, however, have done little to calm critics.

Jacobson employees who choose to continue to live in their current housing and pay directly to GAL Investments will likely see a reduction in their living expenses. One employee reported that his weekly fee would be reduced from $100 to $60. Another man said he would pay only $45 per week after the change.

The City of Postville does not currently have a housing code that regulates rental properties, but that might soon be changing. Officials are currently working with both landlords and tenants to draft policies in relation to rental properties.

Before the nation’s largest single-site immigration raid came crashing down upon Agriprocessors, a kosher meatpacking plant, and swept away nearly half of the company’s workforce and 18 percent of the population, life was different in Postville. Now the town’s elected officials and residents scramble as they try to balance the needs of the town with those of their largest employer.

Three girls relax on the steps in front of a restaurant in Postville. Paul Rael, director of the Hispanic Ministry at St. Bridget’s Catholic Church, says newcomers to the community, many without means to care for themselves, are putting added strain on the church’s outreach effort. Church resources were already stretched thin as parishioners attempted to help members of the Hispanic community following the May 12 immigration raid.

“I know there are concerns around town about the rebuilding effort following the May 12 raid of Agriprocessors,” said Getzel Rubashkin, a member of the Brooklyn-based family that owns Agriprocessors. While adding that he was not a spokesman for the company, he said, “I want to say that, as residents of this town, we know this is not a company that is run by remote control from somewhere else. Our community lives here with the company and we have to deal with any negative impact of people brought into town to work at the plant.”

Rubashkin’s words before the Postville City Council on behalf of his family and the Hasidic Jewish community were prompted by a recent crime wave that some residents blame on newly hired plant employees. At least a portion of the new workers, desperately needed for the plant to return to normal production levels, were recruited from homeless shelters in Texas.

“This past Saturday, our officers responded to three calls for disorderly conduct,” said Postville Police Chief Michael Halse. “While that may not seem like a lot, you need to understand that on any given Saturday we might have one such call.”

Since 1992, Postville has had an average of 12.5 incidents of disorderly conduct and public intoxication per year with a high of 44 such cases in 1998. At that time, according to Halse, Agriprocessors had employed many young and single Hispanic men who had a difficult time adjusting.

“I couldn’t tell you if we are going to break that record,” Halse said. “But if things continue as they are right now, we’ll have a good chance of doing it.”

Agencies Screening Workers

Ryan Regenold, a spokesman for Des Moines-based Jacobson Companies, said his staffing company was relying on two Texas agencies, one in Amarillo and another in McAllen, for recruiting in that state.

“I represent Jacobson Staffing, and we were brought here on June 2 to basically bring in an entire new community — at least that’s how it seems,” Regenold said. “There are two outside-sourced agencies that Agri is using that were bringing the people from Texas. As I’m sure most have already heard, they are coming in from Amarillo and McAllen. To shore up that, we are screening those people a little bit better, we will be starting to have them drug-screened and background-checked prior to their coming to Postville. The wave of people that you might have seen in the past, those causing the police chief to do a little bit of extra paperwork on his weekends, hopefully will begin to stop.”

Regenold added that overall he has been pleased with the relationship between Agriprocessors and Jacobson, and that only about 10 percent of the people sent to work at the plant have been lost to turnover. He urged those in attendance at the council meeting to try and overlook the “bad apples” and promised to make himself available to officials who had questions about the staff restoration at Agriprocessors.

“We do have and do provide — teamed up with Agriprocessors — we do ship these people out,” he said. “We offer them an opportunity. We offer them a bus ticket to go back where they came from. We cannot force them to leave the community by any means, but we do give them the option to get out of the community. We give them transportation back to Waterloo and a bus ticket back to wherever they came from.”

All new hires coming through Jacobson are being checked through the E-Verify system, an online system operated jointly by the Department of Homeland Security and the Social Security Administration (SSA), to ensure their legal status, Regenold said.

“Within the first three days that I was here, we turned away 110 people that tried to get in the doors,” he said. “I think that effort right there is a lot of paperwork and should be applauded. We are trying to clean up the community the best we can.”

Upon completion of Regenold’s informal presentation to the council, Mayor Robert Penrod issued his own warning.

“I’m going to hold you to [what you've said]. And, if you can’t get it turned around, we are going to go round and round,” said Penrod. “That’s the bottom line because this is not going to happen again. There’s no excuse for what we’ve been putting up with and, as far as I’m concerned, that’s poor management on your part.”

One of the firms being utilized by Jacobson is Bravo Labor Agency in McAllen, Texas. Although the company’s Web site has been taken off-line, a May 30 cached version of the page indicates that the firm began in 1987. One of the specialties highlighted by the firm is its ability to “lower overhead, with inexpensive labor from South Texas and Mexico.” The site also indicates that “all workers” will be drug-tested and interviewed, “if needed.”

Texas Recruit: ‘A Bunch of Lies’

Despite Regenold’s statements before the council that workers bussed into Postville were being offered bus tickets back to their original location, at least one worker said she was not provided such an option.

In an interview on KPVL radio, Diana Morris said that she was one of about 15 people who were recruited from an Amarillo shelter. Morris said she was promised $10 per hour at Agriprocessors, 30 days of free housing and a $100 starting bonus. According to Morris, her employment at Agriprocessors came to an end on her third day when, at a doctor’s urging, she phoned in sick. She claims that the housing was a four-bedroom facility without electricity or hot water that she was expected to share with 10 male roommates.

Morris told Iowa Independent on Monday afternoon that she had received her paycheck for the work she provided to Agriprocessors and that she was working with other organizations within the community to raise money for a bus ticket back to Texas.

“I was told that I have a place to stay for one more night — that I’ll be evicted tomorrow,” she said. “I really hope that everything comes together and that I’ll be able to get on a bus tomorrow and go back to Texas. This was a mistake. I believed a bunch of lies.”

On Tuesday afternoon, Morris had collected enough money through donations for her return trip home.

Limited Resources

The “bad apples” aren’t the first to come to Postville for work at Agriprocessors only to seek exit shortly after their arrival. Labor Ready, a multinational staffing firm with a branch in Waterloo, cited health and safety concerns as the reason it pulled roughly 150 workers out of the Agriprocessors plant 10 days after they started employment there. Another group of workers from the company’s Nebraska plant opted to return west, claiming the working conditions in Postville to be far inferior to their original location.

Paul Rael, director of the Hispanic Ministry at St. Bridget’s Catholic Church, said the church’s resources for outreach have been severely taxed by all the newcomers.

“[St. Bridget's] operates a food pantry here in town and we’ve been wiped out on every occasion that we’ve been open,” Rael said. “We have been serving well over 100 people each time [who] we feel we have zero responsibility for. … I would plead that these people be given a better advance so that they can better take care of their [own] needs.”

Regenold said that Jacobson does not provide any payroll advances to employees.

“You come here with an opportunity to work — that’s your opportunity to make money,” he said. “I’m not going to make any promises or guarantees of money on advancements. Any arrangement that has ever been made with money has been put together directly with Agriprocessors.”

Rubashkin, who was in the room and listened to Regenold’s explanation of Jacobson policy, did not offer further comment in relation to employee pay advances.

Agriprocessors, owned and operated by the Aaron Rusbashkin family, produces about 60 percent of the kosher meat and 40 percent of the kosher poultry in the U.S. market. The company’s brands include Aaron’s Best, Aaron’s Choice, European Glatt, Nevel, Shor Harbor, Rubashkin’s, Supreme Kosher, David’s and Iowa’s Best. Two-thirds of their products are nonkosher, and are sold through retailers including Wal-Mart and Trader Joe’s.

An investigation remains under way, according to spokesmen for the U.S. Attorney’s Office of the Northern District of Iowa and for the Immigration and Customs Enforcement (ICE).