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.

“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.