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Dan Rather

Dan Rather

 

Visa Loophole

Posted: 03/25/11 12:22 PM ET

Millions of business travelers from across the globe come to the United States every year to attend conferences or negotiate deals. Most of them come and go legally, using business visitor visas issued by the State Department. But a recent investigation by Dan Rather Reports revealed allegations of visa fraud by corporations that are using these visitor visas not to conduct business, but to import foreign laborers to do work -- work that could and should be done by Americans.

In the world of high-tech, misuse of the visas has been an open secret for years, veterans of the information technology industry told us. But last month, the grumblings that had long been relegated to employee lounges and Internet message boards were suddenly laid out in open court. The complaint reads like a John Grisham novel, detailing schemes, cover-ups and fraud allegedly surrounding a systematic effort to import workers from India.

The lawsuit was filed in Lowndes County, Alabama, by a computer executive named Jack Palmer. The target of the suit is Palmer's employer, an I.T. giant called Infosys Technologies based in Bangalore, India. The crown jewel of India's hi-tech outsourcing industry, Infosys started out in 1981 with seven people. Now it has more than 120,000 employees who provide back office labor and computer consulting for U.S. companies like Wal-Mart, Goldman Sachs, American Express -- and curiously enough, even the software paragon Microsoft.

The vast majority of the work is done offshore, but Infosys also has more than 10,000 people based in the U.S., most of whom are sent from India to provide on-site staffing at client offices on a temporary basis. Palmer's lawsuit alleges that Infosys is using visitor visas -- known as B-1 business visas -- to send Indian workers to staff projects at U.S. clients in "direct violation" of U.S. immigration, laws.


Palmer declined to speak to us directly because according to his attorney, Kenny Mendelsohn, Palmer continues to be a loyal Infosys employee despite suffering retaliation since he filed an internal whistleblower complaint last fall.

"There are a serious number of people over here basically doing work on illegal visas," Mendelsohn said in an interview with Dan Rather Reports. "This is not just an individual who accidentally applies for and gets the wrong visa. This was a decision made by the company, higher-ranking company officials discussed it."

In order to get a B-1 visa, foreigners must file an application with a U.S. consulate and provide supporting documentation. That typically involves a letter of invitation detailing the length and purpose of the trip, which cannot include full-time work.

But Mendelsohn provided internal documents that he says help prove the company was flouting visa rules. For example, he gave us a list of "Do's and and Don'ts" for using B-1 visas that he says was posted on Infosys' internal website, which includes tips such as :

  • "Do not mention activities like implementation, design, testing, consulting, et cetera, which sounds like work."
  • "Please do not mention anything about the contract rates as your on a B-1 visa."

Most troubling, he said, is this advice:

  • "[D]o not use words like, work, activity, etc., in the invitation letter. DO NOT TELL THEM YOUR [sic] WORKING. Speak little English."


Mendelsohn says Infosys was also requesting its clients and employees in the U.S. help obtain B-1 visas, by asking them to sign false letters of invitation for the U.S. consulate.

For example, he says Palmer was asked to sign a letter inviting an Infosys employee from India to attend "business meeting and workshops" where he would be "making a presentation on quality assurance." His trip, according to the letter, was expected to last two weeks.

But that Infosys employee was actually coming to staff Palmer's project at a client office in Chicago and "planned to stay for 6 weeks as per the project plan," Mendelsohn said, pointing to what he says is an email exchange among Infosys managers.

We wanted to verify and discuss the allegations and documents with Infosys, but the company declined our request for an interview or to comment on the material we obtained. They did provide this statement:

"We are aware of the law suit filed in Alabama by an employee. We believe in conducting our business with integrity. As a result, we take these allegations seriously and are investigating them thoroughly."

But the B-1 visa is just one part of a much bigger problem, according to I.T. worker activists like Donna Conroy, the founder of grassroots advocacy group in Chicago called Bright Future Jobs.

Conroy says corporations are using an alphabet soup of visas that, in essence, enable them to discriminate against American workers. The most longstanding problems, she says, stem from the so-called guest worker visas, such as the H1-B visa and the L-1 visa, which allow companies to import skilled foreign workers in specialty occupations to fill jobs in the United States.

Conroy showed us several job posting websites in India with dozens of ads -- some from U.S.-based companies -- recruiting people with one of these visas to come to the United States to work. Much of what she showed us was perfectly legal.

"It's legal to displace Americans," Conroy said. "It's legal to recruit abroad, to fill a job opening that is already being done by a highly-skilled, talented American and then have them train their foreign replacement, and then fire them."

Conroy's group is fighting back against what they believe is corporate America's misuse of visas to undermine American workers. They recently launched a website that they hope will spur a digital civil rights struggle based on the lunch counter sit-ins of the 1960s. The goal: flood the companies recruiting foreign workers with qualified American applicants.

Time will tell whether the high-tech world is suffering from a true shortage of domestic talent or a new strain of discrimination.

We plan to continue investigating these visa issues. If you have had relevant experiences or documentation, please contact us viewer@hd.net. Or you can join the discussion on our Facebook page.

Dan Rather Reports airs Tuesdays on HDNet at 8 p.m. and 11 p.m. ET.

 
 
 
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This user has chosen to opt out of the Badges program
10:02 PM on 05/19/2011
Time will tell if there's a shortage of IT people? It's been 14 years that the Americans are tossed for H1Bs. I think the question has been answered for quite a while.
1) Immigration back door (Hey! Bring your friends!).
2) Cheap labor (many are being rooked by their body shop employers).
3) Defense is short on citizen employees (cream rises no matter how much is under it so flooding the profession isn't going to fix that).
4) Universities love it as a Masters degree gets a free H1B pass and they make a lot of $$$ off of this back door for students.
5) Edison NJ - gone.
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HUFFPOST SUPER USER
picaman
Conservatism is an Un-Christian lack of Empathy
11:33 AM on 04/28/2011
Excellent article. Tell Congress to stop the abuses of these programs and to stop giving away american jobs. Sign the petition at change.org search for "stop giving away"

http://www.change.org/petitions/stop-giving-away-american-jobs
08:24 AM on 04/09/2011
My company just outsourced. They are currently offering 'buyouts' to drive down employement to make room for our India Staff. Unfortunately, the 'outsourced strategy' started when our products/material goods were 'made in China'. Then the 'steel industry'. No President stopped it then, it has now progressed to affect more and more people, our 'young generation'. We, as a country need to 'come together' and ban anything and everything that is made or produced 'internationally'. Watch and see the business change. America is the 'greatest' country in the world, we need to preserve it and it's people. America not only provides opportunity, however a 'freedom' like no other country can provide. How grateful we are to have our American Soldiers fighting for our freedom everyday and preserve the American spirit and pride!
I have been in the workforce for 15 years and now, I am now faced with loosing my job to India.
How can we let that happen?
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HUFFPOST SUPER USER
picaman
Conservatism is an Un-Christian lack of Empathy
11:35 AM on 04/28/2011
tell congress to put an end to these practices, sign the petition at change.org, search for "stop giving away"
http://www.change.org/petitions/stop-giving-away-american-jobs
02:05 PM on 04/01/2011
There is too much talk about Indians... as if they are the only talented global workforce.
07:57 AM on 03/30/2011
I am an American contractor who competes with these outsourced resources; my success solely attributable to my writing and verbal skills, which most of this group never master. I am working in one of the top five financial corporations in the country in IT. I would say 75 percent of the people working in this department are Indian. They rent apartments for 8 - 12 individuals and live together to save money- most of the residents in my apartment complex are Indian. To say this is not taking away American jobs is ludicrous, it does. And from what I've seen, it's not the skillset; it's the fact that they cost less. The small contingent of American workers that are on staff fill in the language and documentation communication gaps and do most of the legwork for these workers.
01:06 PM on 03/29/2011
As a shareholder in several American companies I think that outsourcing to foreign labor has made me handsome profits. The real problem from my perspective is that it has not gone far enough. The executives are the most highly compensated employees in any company and yet I do not see any moves by American corporations to cut costs by off shoring this function. Why should I pay an American executive upwards of hundreds of million dollars a year if I can find a foreigner to do it for a few hundred thousand a year? Yet as a shareholder, the actual owner of the company, I have no say in this. I can only approve or reject the recommendations of the board (part of the executive function that I want to outsource). They are so quick to send other peoples jobs abroad but will do anything to keep it from happening to them. This is the classic 'principle-agent problem' from MBA school.
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08:57 AM on 03/29/2011
America is in denial. I was in a top ten US engineering college, most of my coursemates were foreigners, Indians, Koreans, Chinese, and a couple of Americans. Of course I had more American classmates in my general requirement classes. A lot of my American classmates majored in Psychology, English, Art History, Drama, Dance. Coincidentally, these are also fields that don't outsource...
Wake up people, your kids are not interested in contributing to the field of science or engineering, that we need so much. College to them is 4 years of "vacation", of little learning, and much partying.
This is what they are *passionate* about.
This user has chosen to opt out of the Badges program
10:05 PM on 05/19/2011
I am one of the people advising your American classmates to give up any idea about a career in engineering as long as it's flooded. "Coincident­ally, these are also fields that don't outsource.­.. " Coincidentally? I hope you weren't planning on being rocket scientist.
07:12 AM on 03/29/2011
Companies really like the H1b visa workers. They can be paid much less, given little or no benefits, and they know that if they complain about unpaid overtime or anything else they can be deported. It is basically indentured servitude and Americans lose their jobs. A decade ago Transamerica Corp fired their entire American IT department and brought in a contractor using H1b visa holding foreigners to replace the fired Americans. Practices like this have been going on for a long time - American workers are being shafted by the corporate dominated Federal Gov't.
01:08 PM on 03/29/2011
All I hear is opinions and I cant find facts any where on what you are saying. Could you please include some references (obviously the ones that are not opinions). I don't see that H1B workers are paid less, they are in fact paid equally around me. They also seem to contribute to Social Security, Medicare and most importantly to Federal and State Income taxes. Why are they paying these taxes? I don't here visa workers complaining anywhere about this. If the argument is paying less salaries to visa workers then you have to realize that we are collecting taxes from them that go to OUR development (our roads and our infrastructure) and not in THEIR countries.

Besides, America is all about innovation and entrepreneurship and there is a need for huge number of skilled engineers and scientists constantly. When your kids and friends are not delivering what are these innovators and entrepreneurs supposed to do. They have gotten creative. Please don't fret about that.

All around the world, in societies, being skilled means having a level of education and most importantly having work experience. I am sure there are no good opportunities for gaining experience in other countries but they have good level of education so visa workers come here to fill the gaps in their portfolios. We are lacking in education the industries need although our IQs are better and we can speak politics much more fluently.
This user has chosen to opt out of the Badges program
10:09 PM on 05/19/2011
You don't hear them complaining? Apparently you don't work around InfoSys. Or Wipro. Or Cisco. Or SAP. Or Avaya.
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HUFFPOST SUPER USER
ritamary
03:11 PM on 03/28/2011
Dan Rather, thank you for your report. Visa fraud is an important topic since we are faced with such high unemployment.
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LeftCoastEng
Obsessed with failed trade
02:48 PM on 03/28/2011
These visa issues are just the tip of the iceberg. Our ludicrous trade and tax policies reward outsourcing of good paying jobs. I applaud steps suggested here to push our politicians to fix the visa problem, but the topic should be expanded to real trade reform and ending the one sided free trade policies that are destroying our economy.

Ian Fletcher has a great set of articles here at HuffPo on how free trade doesn't work: http://www.huffingtonpost.com/ian-fletcher . He would be a great guest on Mr Rather's show.
01:30 PM on 03/28/2011
this happens every day my corporation. perfectly fine working americans doing their job get told to train these offshore folks just to help out and do some off hours work. after the offshore folks get up to speed then it is goodbye to the person training them.

and yet the government is wondering what is happening to the economy and why the unemployment rate is so high? these are trained BS degree workers too. sort makes it hard to raise your child in a country that promotes this type of behavior. why tell them to go to college? just so they can train their replacements and be outsourced?

great country we live in.
01:46 PM on 03/28/2011
And Obama's solution is to ask CEOs how to create jobs. They only know how to slash wages. So get ready for more free trade and more work visa programs.
luminavi
Love kicking over anthills on both left and right.
05:17 PM on 03/28/2011
Yep, happened to the company I worked for, too. We were told to TRAIN our replacements, for heaven's sake. It was painful trying to train them, too, because they were simply so incompetent, unskilled and so lacking in communication and team skills.

Now multiply what happened to you and I by a million other companies throughout the nation. YES, you're DARNED RIGHT --- and they wonder why unemployment is SO HIGH???????

Outsourcing is driving unemployment in our era. It always HAS. Freakin geniuses like that guy in the White House - Mr. Empty Suit Corporatist Posing as a Democrat still think it's all related to the recession.

NO, it ISN'T. The recession has simply served as a SMOKESCREEN to the REAL reason why UNEMPLOYMENT is so bloody high!!!
12:38 PM on 03/28/2011
The justice department has a "Gone Fishing" sign on its doors. Its been there for decades.
12:07 PM on 03/28/2011
This is doubly despicable on the part of these companies - it's a lot cheaper for a corp. to sponsor a B-1 visa than an H-1B, so they're saving money on the employee *and* on the legal documentation for that employee. Let's send ICE into some of these businesses on an immigration sweep: after all, anyone here working full-time with a B-1 visa is in jeopardy of deportation and banning. Then let's fine the heck out of the corp. for illegally employing foreigners. Hit 'em in the pocketbook and make it harder for them to recruit abroad, it's the only way they'll learn.
01:48 PM on 03/28/2011
Northbronx, the simple fact is that Democrats fully support wage suppression. So they will never end work visas or do anything serious about fraud. Democrats loath working Americans.
luminavi
Love kicking over anthills on both left and right.
10:03 PM on 03/28/2011
Yeah, and do an immigration sweep across the MIS departments of companies like Microsoft, Intel, Disney, Wells Fargo, Warner Bros, AIG, AT&T and every other Fortune 500 company?

SURE. RIGHT. You do realize who the people are that Obama's surrounded himself with, right?
11:31 AM on 03/28/2011
When the federal government sees it's job as being to secure labor for business then you know you're in trouble. If employers know that the federal government will keep importing labor they know that wages can stay low. They know that supply will never be unmet and thus there will be no wage pressures.

H-1b and all these work visas are just a new form of wage suppression.
Wupta
Parent
09:23 AM on 03/28/2011
Finally some light on a despicable Corp. Practice.