Chabad Postville Landlord: I Did It For The Workers

In a new Iowa Independent report, GAL Investments owner Gabay Menachem says he rented his substandard housing by "unit," not by person:

"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.”

Jacobson Staffing, which has been functioning as Agriprocessors' HR department for new hires, and OneForce, another staffing contractor under contract to Agriprocessors, rented those "units" at their "set rents."

Or so Menachem claims.

Menachem also says this:

…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. 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 ended the agreement with Jacobson, effective Wednesday midnight. But he kept his agreement with OneForce:

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.

So, Menachem is willing to rent to OneForce, which then crams 8 to 12 people in his decrepit "units" and charges each $100 per week for a mattress on the floor.

But he is not willing to rent to Jacobson or to employees hired through Jacobson, even when their rent is guaranteed by their paychecks?

Something does not add up.

We know some workers paid approximately $250 up front for a mattress on the floor of one of Menachem's properties. One of those "units," brought Menachem about $1250 per month, because fewer workers took that option, and fewer were put in each house or apartment.

Menachem could have "lost money" this way, if workers left without telling him and spots were then vacant. But he could not have lost money when the rent was deducted from workers paychecks – unless Agriprocessors took the deductions but did not pay Menachem.

This is a real possibility. Agriprocessors and its owners have done this type of thing before.

But I think there is another very real possibility. The close business relationship between GAL, Agriprocessors and Jacobson exposed all three companies to scrutiny they cannot have. Jacobson is functioning as Agriprocessors' Human Resources department for new hires, doing various background checks and checking legal status. But how legal is it for a worker to pay $100 per week for a mattress in a flophouse?

It may not be legal at all.

Agriprocessors can claim OneForce is separate from Agriprocessors, a simple contractor, no more, no less. What OneForce is doing in Agriprocessors' name, the logic goes, may be an ethical problem – but it is not a legal problem for Agriprocessors. But that claim cannot be made about Jacobson.

I think Agriprocessors new CEO, Rubashkin Attorney Bernard S. Feldman, recognizes this and forced the separation.

That brings us to Getzel Rubashkin – the company spokesperson that "isn't":

.…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.

Clearly, Bernard Feldman recognizes the legal peril Getzel puts Feldman in, which is why, I think, Getzel announced today that he is no longer posting here:

I just want to go on the record that I am no longer going to be posting comments on this blog. I am thoroughly disgusted by the irresponsibility of many of the journalists and bloggers when writing about Agri. The Iowa Independent piece which "quoted" me by mirepresenting something I posted here is the final straw for me. Good bye.

Now, back to OneForce:

…[E]mployees 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.…

But this is not really an option. According to the OneForce ad linked by the Independent, workers:

…Must work 520 hours for us (temporary) before you can begin employment with the processing plant

We provide housing accommodations at a cost of $100.00/week (deducted from your upcoming paycheck)

We provide one way transportation from Covington-Iowa for a $75.00 fee (deducted from your upcoming paycheck)…

There is nothing in this ad about these housing or transportation arrangements being optional. Workers coming in through OneForce seem to be stuck in OneForce housing for 8 to 10 weeks, until they become Agriprocessors employees rather than OneForce temps.

Indeed, this has been a complaint of some workers I've had contact with.

So, sof sof, in the end, I think the Rubashkins' attorney Bernie is trying to insulate himself from activities that may impinge on his license to practice law. As long as there is a clear layer in between OneForce and Agriprocessors, attorney Bernard Feldman has, he thinks, done that.

Iowa Independent report.

Our Coverage: Part One. Part 2.

Picture: GAL Investments housing. (More pictures.)

[Hat Tip: Formerly Frum.]

Comments

[Yoel B]

Sounds like the old song:

Man That Who Waters The Workers' Beer
(Paddy Ryan)

Chorus:
I am the man, the very fat man,
That waters the workers' beer.
I am the man, the very fat man,
That waters the workers' beer.
And what do I care if it makes them ill,
If it makes them terribly queer.
I've a car, a yacht, and an aero plane,
And I waters the workers' beer.
Now when I waters the workers' beer,
I puts in strychnine
Some mentholated spirits,
And a drop of kerosene
Ah, but such a brew so terribly strong,
It would make them terribly queer
So I reaches my hand for the watering-can
And I waters the workers' beer

Chorus

Now a drop of good beer is good for a man
When he's tired, thirsty and hot
And I sometimes have a drop myself,
From a very special pot
For a strong and healthy working class
Is the thing that I most fear
So I reaches my hand for the watering-can
And I waters the workers' beer

Chorus

Now ladies fair, beyond compare,
Be you maiden or wife
Spare a thought for such a man
Who leads such a lonely life
For the water rates are frightfully high,
And the meth is terribly dear
And there ain't the profit there used to be
In watering the workers' beer

Chorus

[State of Postville 2]

Just how bad does One Farce rip off their workers?

They lease a home from GAL for $525.00

They charge their people $100.00 per week

There are ten people in the house. That means they collect $4000.00 a month for that house.

If those ten people were allowed to lease directly from GAL, they would pay $52.50 per month per person. That's $13.50 per week per person.

That means One Farce steals $86.50 per week from each one of their employees. Their people work almost one full day per week to line the pockets of the people who have brought them here "for a new start".

This may be legal, but if I was one of the owners of One Farce, I would have trouble sleeping at night. But then, I have a conscience.

In all fairness, the figures above do not take into consideration utilities. That's probably why the owners can sleep at night.

[isabel]

Are they going to furnish heat also,when the cold blows in soon?

[isabel]

I heard that the property owners of these flophouses ripped all outlets and hookups for washer&dryers out,so the renters would be forced to use the only laundermat in town,owned by guess who!!!

[State of Postville 2]

Isabel - That's not true - just another rumor that floats around. The W/D hookups remain in the homes as they were, but in most cases, there are no washers and dryers. The local landromat is owned by Trevor Seibert.

[concerned about Postville]

I would like to comment about Nina Taylor's comment in the Iowa Independent. She states that Postville was a ghost town before Agri Processors saved us. That is a lie. We had no empty store fronts and had some nice stores and a wonderful pharmacy. Maybe ask her why she chose to move to a neighboring town? Mr. Menachem did not buy run down property. The property that he owns now is very run down. I owned one of those houses and now the windows are broken,the weeds are as high as the windows and there are three to four cars parked in the lawn at most times. This has not all happened since the raid. He has not done any upkeep on alot of his rental property and still continue to pack several people in each house. He is what is know in the city as a slumlord and there would be ordinances against it in most cities.

[Archie Bunker]

"But how legal is it for a worker to pay $100 per week for a mattress in a flophouse?"

I too pooped right now to look into this, but even without a municipal housing code, there's probably some seldom invoked kind of state or federal law being violated here that a zealous prosecutor could dig up.