Our Man in Saipan

Dick Armey thinks he's found a free-market paradise in the Marianas Islands, a U.S. territory where the workers never complain, the factories never quit, and wages are so low, even welfare mothers can hire a Filipino maid

Major suppliers of textiles and apparel to the United States, including Asian countries, have quota limitations that severely restrict their ability to increase their exports to the United States.

Mexico and the Caribbean have preferential access to the United States for garments made from U.S.-made textiles--not Chinese fabric, as in the Marianas. Were the work done in Mexico or China, U.S. textiles corporations would get hundreds of millions in sales--generating several thousand more jobs in the United States, which would also receive millions in duty and taxes. "Currently, with its Chinese fabric and workers, [Marianas] garment production is largely at the expense of the 50 states and other territories," the report concludes.

With 60,000 apparel manufacturing jobs, mostly concentrated in El Paso and San Antonio, Texas ranks third in the nation in numbers of garment-industry employees. Joe Allen, a garment business consultant in Dallas, says the actual number is lower today because of widespread factory closings last year in El Paso. There is no significant clothing manufacturing in Dallas, which was once a garment-producing center. Allen says competition from abroad beginning in the 1970s and illegal domestic home sewing are mostly to blame.

The Clinton administration set off the current discussion about the Marianas last summer when it recommended that Congress end the island's exemptions from federal law. In a letter to the islands' governor, President Clinton called labor practices in the Marianas "inconsistent with our country's values" and said the U.S. government has been patient long enough.

To deal with the garment sector, the administration proposed to raise the minimum wage to mainland standards, ban the use of temporary workers in permanent jobs, and encourage the hiring of U.S. citizens in the Marianas' labor force. For products to be shipped to the U.S. mainland tariff-free, 50 percent of the workers in a factory would have to be U.S. citizens or legal immigrants eligible for citizenship. The proposal would be phased in over the next two years.

Armey and DeLay vowed within a week that they would fight to preserve the current system.

Their June 6, 1997, letter to the Marianas' governor mentioned that "a number of our colleagues and their staff have visited the commonwealth in recent months," and saw nothing but progress in conditions and living standards. Five Armey staffers, including his chief of staff, have to date taken their all-expenses-paid tours of Saipan. The trips were arranged by the Seattle-based law firm of Preston, Gates Ellis & Rouvelas Meeds, which the Marianas hired and paid more than $4 million over the past two years to lobby for the status quo. The islands also hired Manuel Lujan, interior secretary in the Reagan administration, to help lobby Congress. He was paid $208,000.

Jack Abramoff, a Preston Gates lobbyist, contributed $500 to Armey's 1996 campaign, $2,000 to DeLay's 1996 campaign, and, together with his wife, $4,000 to DeLay for this year's race, campaign finance records show.

"On the junkets, they're getting wined, dined, tattooed, and screwed," says Joe Allen, a harsh critic of Armey and DeLay. "It's difficult to get much of a picture there by touring a couple of showpiece factories and a model barracks or two."

Indeed, DeLay, whose New Year's holiday junket received considerable press attention, wasn't on the island more than a day when he gave the Marianas' garment industry his seal of approval.

On his first night on the island, DeLay was invited to a reception at the posh, beachfront Pacific Islands Club hosted by Willie Tan, the powerful garment factory king. According to a promotional brochure, Tan Holdings Corp. owns the island's largest garment factories, several hotels, a bank, and businesses ranging from travel agencies to ice cream parlors.

"When one of my closest and dearest friends, Jack Abramoff, your most able representative in Washington, D.C., invited me to the islands, I wanted to see firsthand the free-market success and the progress and reform you have made," DeLay said, after thanking Tan for "that great introduction."

"Even though I have only been here for 24 hours, I have witnessed the economic success of the Marianas."

DeLay told Tan and his group that the Clinton administration wanted to "kill prosperity on the islands."

"You are up against the forces of big labor and the radical left," he said.
DeLay repeated the promise that "Dick Armey and I made" to defend the island's present system. He finished his remarks by telling the group: "Stand firm. Resist evil. Remember that all truth and blessings emanate from our Creator."

Photographs taken by a U.S. Labor Department employee last August of a workers' barracks owned by the L&T Group of Companies, a Tan subsidiary, show that life for Tan's workers is no day at the beach. They paint a foul picture of hallways puddled with water, foam-pad mattresses packed end-to-end on the floors, piles of garbage drifting up in a courtyard outside, and dank, grungy bathrooms inside. A yellowing health-department notice taped to a wall serves as a testament to the effectiveness of local enforcement. Addressed to Tan and several others, it's a "reminder" that "all our housing facilities be kept clean, in sanitary condition and safe."

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