Task Force in Tatters : State-Federal Tensions Hinder Garment Industry Crackdown

It seemed like the ideal marriage: state and federal inspectors joining forces in an unprecedented partnership to root out garment sweatshops in Southern California.

But four years later, after about 2,000 raids, $15 million in penalties and one of the century’s most celebrated sweatshop busts, in El Monte last August, interviews and public records show that inspectors have barely made a dent in Southern California, home to the nation’s largest apparel industry.

Government officials blame a lack of resources, saying they can’t keep up with a growing industry where the economics provide minimal incentives for reform.

But others say staffing is only part of the problem. Despite the hard work and commitment of inspectors, critics say, enforcement has been marred by political infighting, a misplaced focus and a series of missteps, including a number of controversial raids and increased friction between state and federal authorities over strategy and publicity.

In short, the Targeted Industries Partnership Program--the official name of the joint garment task force--is unraveling. Even officials within the program acknowledge that the state and the feds are no longer cooperating on a continuing basis, nor are the two partners sharing information.

“I don’t know what can be done to stop that gradual, creeping erosion of the program,” said Jose Millan, the state’s assistant labor commissioner and a founder of the joint task force.

When state and federal officials have joined in raids, conflicts have arisen over their tasks, even over whether they should make the raid at all.

Soon Kwan Huh, owner of Sun Fashion in Los Angeles, complained that federal inspectors last spring stormed into his sewing shop, interviewed workers and examined time cards, even though he was at the hospital with his sick wife and no manager was on duty. “It’s not right,” Huh protested.

Federal officials declined to comment about that case but said that in general, it’s irrelevant whether an owner is present, as long as somebody is in charge. Nonetheless, some of their state counterparts took exception and would not take part in the inspection.

Just last week, state investigators uncovered what they said was a string of illegal home-sewing operations for contractors of Guess Inc., raising serious doubts about the federal government’s strategy for battling sweatshops by enlisting manufacturers such as Guess to police the industry.

“I don’t see any signs that the industry is getting any better,” said Edna Bonacich, a UC Riverside sociology professor who has long studied the Southland’s garment industry and is writing a book on the subject.

“TIPP isn’t effective,” she said of the joint task force. “Evasion remains very easy. . . . The underground economy continues to flourish.”

Indeed, experts say a major weakness of the enforcement is that inspectors don’t aggressively go after the most profligate violators: the underground contractors.

“People who are targeted are visible,” said Bill Bernstrom, a Labor Department veteran who headed Los Angeles’ garment inspections before quitting earlier this year.

Bernstrom, who now works for the garment consulting firm Cal Safety Compliance Corp. in Los Angeles, says as much as 40% of the region’s multibillion-dollar apparel trade “exists entirely in cash pay, completely underground.” There are about 6,000 registered contractors in the state, mostly in the Southland, where 158,000 people work in the apparel industry.

But government agents often pursue contractors whose state garment registrations have lapsed, Bernstrom said, not the “real underground shops,” which have never registered and are tucked in alleyways and other out-of-the-way places.

Last year, for example, just 10% of the 703 inspections conducted jointly by the state and feds turned up cash-pay violations, statistics show. And although many of the raids last year yielded registration citations, only a fraction involved shops that have never registered.

“They should really concentrate on the underground. We are getting hurt because of that,” said Dominic Chui, a Los Angeles contractor and a director of the American Chinese Garment Contractors Assn. of Southern California, which, with 400 member shops, is the second-largest after the Korean-American Contractors Assn.

Millan, the assistant state labor commissioner, acknowledged that the underground element remains elusive. But he said inspections are driven by complaints and referrals, so investigators need more and better leads, especially from contractors and their associations.

William Buhl, the Labor Department’s top enforcer in California, said recently that despite some problems, the joint garment enforcement has been successful. And both agencies are planning to bolster staffing.

Labor Secretary Robert Reich, who after last year’s El Monte raid has made sweatshops a crusade, has put in for more investigators. And at the state level, labor officials say a just-passed budget will enable them to significantly boost their garment staff for the first time in four years.

“TIPP is doing a fantastic job,” Buhl said, citing increased garment inspections in each of the last four years, as well as more penalties assessed and wages collected.

But those statistics show only part of the picture.

Separate data obtained through the Public Records Act indicate that the state is moving to do more of its own garment inspections. Last year, for example, the state went solo on more than 300 apparel raids, whereas in 1993, all of the actions were conducted jointly with the feds.

Moreover, despite the increase in garment inspections, the numbers still pale compared with the 1,000-plus raids annually during the early ‘90s and much of the ‘80s, when there were far fewer contractors than the 5,000 now registered in Southern California.

Although staff cuts have certainly been a factor, state inspectors also say they have been slowed down by the addition of another layer of bureaucracy, resulting in more meetings and other delays caused by the conflicting styles and agendas of the state and federal levels.

Said one veteran inspector, “It’s a struggle because they have a different way of working and a different outlook.”

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TIPP didn’t start out so contentiously.

When the two sides teamed up in late 1992, they had good reason for doing so. Both state and federal labor agencies were dealing with a budget crunch, and they figured joint enforcement would reduce duplication and give them more tools to combat the abuse-ridden industry.

What changed everything was El Monte. When 72 Thai workers were found to be toiling in what authorities called near-slave-like conditions a year ago, Southern California’s garment industry became a worldwide spectacle.

Glorified in the bust were state officials, who moved quickly and led the charge. Federal officials, on the other hand, got little credit for their role, and privately they groused that state agents acted secretively. Relations worsened when Gov. Pete Wilson attacked the feds after it was learned that immigration officials knew about El Monte as early as 1992 but took little action.

Labor leaders haven’t forgotten about El Monte. “It’s still a sticking point,” said Rolene Otero, district director of the Labor Department’s wage and hour division in Los Angeles. Otero says she hasn’t given up on TIPP. “The state has some excellent investigators,” she said.

But the feuding isn’t likely to let up--at least not in this election year. The garment industry remains a hot issue, and state and federal political chieftains don’t want to be eclipsed by each other.

“The perception is that they’re not on the same page,” said Randy Youngblood, chief executive of Apparel Resources, an industry consultant in Yorba Linda. “It’s one-upmanship.”

Publicity has been a particularly divisive issue. In raids earlier this summer in Orange County, where the state and feds work much more closely together, the state invited a crew from NBC’s “Dateline” despite objections by some federal inspectors.

Both government agencies amassed a huge team, suspecting that the three targeted shops were unregistered. State officials, wired with NBC microphones, led the foray. But it turned out that the businesses were properly licensed, and investigators did not uncover any immediate violations, although the state says it is continuing to audit the owner. Afterward, the state and federal agents blamed each other for the embarrassment.

The state-federal relationship is far worse in Los Angeles, where strong-willed personalities have been unbending about whose strategy is most effective.

Federal officials view their agreement with manufacturers to self-police the industry as the most promising way of obtaining compliance from contractors. But state officials have publicly snickered at that strategy, saying it is akin to letting the fox (manufacturers) guard the henhouse (contractors). And last week’s discovery of home-sewing operations tied to Guess, the first signatory of the federal agreement, which includes about 40 manufacturers, is certain to worsen relations.

“They’re taking it very hard,” said a federal inspector of the Labor Department’s reaction. “It’s not going to help relations any. It’s going to further set it back.”

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On other occasions, federal officials have criticized the state for stampeding through shops on joint raids, not leaving them enough time to do a thorough job.

In a recent inspection of a Riverside County contractor, the feds complained that their state partners hastily checked for a garment registration and counted time cards before taking off. Federal agents stuck around, and a more careful review showed that the employer’s time clock was broken and had the wrong month and that time cards were missing for several workers.

State officials, for their part, say some of the feds are overly aggressive in raids--a criticism that others in the industry attribute to TIPP in general. Chi Mui, a senior staff member for state Sen. Richard G. Polanco (D-Los Angeles), whose constituency includes the Garment District downtown, said a common complaint from contractors is that they are bullied.

“Some of the contractors say it’s very intimidating,” said Mui, who did not differentiate between the state and federal sides. “They’ll [the inspectors] come in and say this is the law, throw the book down and take over the office.”

Jesse Atilano, a former state labor inspector and now a consultant to garment contractors, has had a few run-ins with investigators. He left the California Division of Labor Standards Enforcement several years ago after pleading no contest to extorting money from a business that he was inspecting, according to court records and an interview with Atilano.

Some of Atilano’s clients have posted an advisory in their shops stating that they have every right to refuse entry to inspectors. In one of his more confrontational cases, last month at a shop in South El Monte, Atilano said, a federal investigator refused to provide him a business card and then refused to leave. Atilano said he called the sheriff’s office, which declined to comment. Federal officials also would not talk about that incident.

But in general, both state and federal labor leaders insist that their troops act professionally, abiding by a joint inspection protocol. But some inspectors weren’t sure such a protocol statement existed, and others murmured that they’ve seen their partners go through an employer’s computer, use their phones and faxes and bully them around.

“Even if they violate laws, is it right for us to violate their civil rights?” said one labor official who spoke only on condition of anonymity.

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Roberta Mendonca, California’s newly appointed labor commissioner who replaced Victoria Bradshaw, wasn’t involved with TIPP when El Monte flared. But Mendonca said she wants to put all that behind.

“What happened in El Monte happened,” she said in a recent interview in her office in San Francisco. “It’s been an effective partnership. . . . We appreciate what they bring to the team.”

But for all the conciliatory words, actions tell a different story.

As recently as May, state and federal officials met to talk about mending their strained relations, among other things. But just a week later, when top Labor Department officials in Washington arrived for a joint news conference on a much-heralded garment survey, their state partners were conspicuously absent.

Afterward, federal officials said the state suddenly backed out of the conference. “I can’t explain why,” said the Labor Department’s Buhl.

California officials insisted it wasn’t their fault. The feds, they said, caused the mishap by changing schedules at the last minute.

Bernard Lax, head of the Coalition of Apparel Industries, laughs at the exchange. “If these two agencies truly want to enforce the law, they should get along and listen to each other,” Lax said. He added that this is what people in the industry are saying: “If they can’t get their act together, why should we?”