Publish PostIn the biggest workplace immigration raid this year, federal agents swept into a kosher meat plant on Monday in Postville, Iowa, and arrested more than 300 workers.
The authorities said the workers were suspected of being in the United States illegally or of having participated in identity theft and the fraudulent use of Social Security numbers.
A spokesman for Immigration and Customs Enforcement would not say how many people had been rounded up beyond the initial 300 or whether the management and owners of the plant, AgriProcessors, would face criminal charges.
The plant has 800 to 900 people and is the country's largest producer of meat that is glatt kosher, widely regarded as the highest standard of cleanliness.
The plant shut temporarily.
The agents set up a perimeter around the 60-acre plant, in northeastern Iowa, and entered on the morning shift, carrying out two search warrants, federal authorities said. An affidavit filed in court before the raid by the Homeland Security Department cited "the issuance of 697 criminal complaints and arrest warrants against persons believed to be current employees" and to have acted criminally.
The affidavit said a former plant supervisor had told investigators that a methamphetamine laboratory had operated at the plant and that some employees had carried weapons to the plant. The former supervisor, the affidavit said, estimated that 80 percent of the employees were in the United States illegally.
A spokesman for Representative Bruce Braley, Democrat of Iowa, said the number of arrests was expected to increase, perhaps even double, as the investigation continued.
Federal officials leased an expansive fairground area in nearby Waterloo to process and house the arrested workers. Among people at the fairgrounds and in Postville, "there is a lot of fear," said Prof. Mark A. Grey, who focuses on immigration at the University of Northern Iowa.
"It's absolutely devastating to the local economy," Professor Grey said.
In a news release, Matt M. Dummermuth, the United States attorney for the Northern District of Iowa, called the sweep "the largest operation of its type ever in Iowa."
Federal authorities have been conducting workplace raids across the country in recent years, with the pace accelerating since the failure of immigration legislation last year in Congress.
The raid had been planned for months and was conducted in coordination with local law enforcement, according to the news release, released jointly by Claude Arnold, special agent in charge for the ICE regional office in Bloomington, Minn.
Calls to AgriProcessors, a global giant in the kosher meat market and the major employer in Postville, a town of 2,200 people, were not answered. A lawyer for the plant did not return a call.
According to a company Web site, Aaron Rubashkin, whose family controls the plant, bought a defunct meat factory in Postville in 1987 and turned it into the present plant.
According to Menachem Lubinsky, the editor of Kosher Today and a marketing consultant, AgriProcessors provides 60 percent of the kosher retail meat and 40 percent of the kosher poultry nationally, and most retail chains depend on it for supply. Mr. Lubinsky said the company was also the sole American packing plant whose products are accepted in Israel.
The raid was not the first moment in the national spotlight for the plant. In 2004, it was asked to change its slaughtering methods after an animal rights group secretly documented workers cutting the throats of living steers and letting them bleed to death.
The company has also been a target of environmental pollution complaints.
MIAMI
Burger King said Tuesday it fired two employees following the disclosure that an executive secretly posted blogs slamming a farmworker advocacy group.
The Miami-based fast-food chain did not name the individuals who were fired. It also said it is discontinuing the use of a private investigation firm whose president allegedly posed as a student activist to infiltrate the farmworker group and its supporters.
Burger King is in a public relations feud with the Coalition of Immokalee Workers over how to improve wages and working conditions for Florida's tomato pickers.
"Following an investigation, Burger King Corporation has terminated two employees who participated in unauthorized activity on public Web sites which did not reflect the company's views and which were in violation of company policy," the company said in a statement.
The company owned by Burger King Holdings Inc. said Tuesday it hopes to meet with the Coalition of Immokalee Workers soon to find ways to ensure decent wages and working conditions for the region's harvesters.
Coalition co-founder Lucas Benitez said in a statement the group welcomed Burger King's actions but said more needed to be done "to clear the path toward a sincere partnership for more humane conditions in Burger King's tomato supply chain."
Burger King's announcement comes a week after The Associated Press confirmed an e-mail it received in January from an individual purporting to support the coalition appeared to be sent from the company's server.
In March, an individual using the same password-protected e-mail account sent a message to a student group that supports the coalition, according to an AP investigation. That individual claimed to be a University of Virginia graduate student named "Kevin" who wanted to help the coalition boost farmworker wages. The individual asked to listen in on the group's strategy call regarding efforts to pressure Burger King to pay more for its Florida tomatoes.
When asked to identify himself further by the AP and the alliance, the individual did not respond.
Later that month, Cara Schaffer, head of the private investigation firm Diplomatic Tactical Services, also posed as a student interested in the coalition's activities, according to the student group. Her company's Web site says it specializes in labor relations, including covert and overt surveillance.
Burger King said Tuesday it "discontinued the services provided by Diplomatic Tactical Services Inc. for violation of the company's code of conduct."
The company says it had contracted the firm to provide general safety advice and security services during high profile events such as global conventions and shareholders' meetings.
A local paper identified Web postings linked to Burger King Vice President Stephen Grover describing the coalition as "an attack organization lining the leaders (sic) pockets ... They make up issues and collect money from dupes that believe their story. To (sic) bad the people protesting don't have a clue regarding the facts. A bunch of fools!" He used his middle school daughter's screen name to make the posting.
Burger King's Chief Executive Officer John Chidsey said he was distressed to learn of the allegations.
"Neither I nor any of my senior management team were aware of or condone the unauthorized activities in question," he said in a company statement.
In a speech last fall at Davidson College, Chidsey said the media has misrepresented the issue of Florida tomato picker wages and conditions and that the average tomato picker earns $12.56 an hour. He said farmworkers are paid better than many Burger King restaurant workers.
The Immokalee coalition has long disputed Chidsey's assertions, and U.S. lawmakers have called for an investigation into worker wages and conditions.
The coalition wants Burger King to join McDonald's Corp. and Yum Brands Inc., which have already agreed to pay more for their Florida tomatoes, so long as growers pass the extra money on to their workers. Those agreements also call on the companies to work with the coalition to establish a code of conduct for their suppliers.
But since last fall, those deals have existed on paper only after the industry group representing Florida tomato growers refused to allow its members to participate.
When a Morris County municipal court judge was stopped by police, he tried to avoid arrest for drunken driving by revealing he sided with police in his courtroom, even when a case "could have gone either way," a letter recounted, according to an amended lawsuit filed yesterday in U.S. District Court in Newark.
The letter to Superior Court Judge Theodore Bozonelis is dated Nov. 16, 2007. In it, Roxbury Patrolman Jonathan Edmunds recalls what George Korpita told him on the night he was arrested for DWI.
"When the cops beat the ... out of a guy, I do the right thing. I'll never take care of cops again ... My whole ... life, I've taken care of cops, my whole life ... never again," Korpita said according to the lawsuit.
Korpita -- who served as a judge for Dover, Victory Gardens and Rockaway Borough -- also told the patrolman that when cops came into his courtroom, where the cases could have "gone either way," that he "always ruled for the cops." He added that he had "helped out" Jefferson and Roxbury township police in the past, the letter to Bozonelis said.
Sgt. Kevin Carroll, who was also present during the DWI arrest on Nov. 6, wrote a letter to Roxbury Police Chief Mark Noll recounting similar comments, the lawsuit said. Korpita told the officer during the arrest that "all he is asking for is professional courtesy," Carroll wrote to Noll, according to the lawsuit.
The letters were used as evidence to amend a lawsuit involving a dispute between Korpita and Dover securities broker Warren Hartzman.
Last August, Hartzman sued Korpita, claiming the judge abused his power to imprison him overnight for scratching the judge's Maserati in a Rockaway parking lot. Hartzman claims Korpita called police and had him arrested.
Hartzman is suing the police department for false arrest and imprisonment and malicious prosecution. He claims the matter has damaged his reputation, causing him to suffer severe mental anguish, stress, humiliation and pain. In a separate legal filing with the municipality, Hartzman is seeking $5 million.
As a result of the two letters, the lawsuit has been expanded to include Rockaway Borough, alleging there was a "regular practice of violating individual civil rights" in the Korpita-run court in Rockaway Borough.
"It is now clear that Rockaway had a regular practice of violating individual civil rights," according to legal filings.
Hartzman's attorney William Pinilis declined comment yesterday.
Woodbridge attorney Blair Zwillman, who represented Korpita in the 2007 drunken-driving incident in Roxbury, yesterday questioned the importance of the judge's alleged comments made to Roxbury police.
"I think it's much ado about nothing," Zwillman said. "This man had a .22 blood-alcohol level and pled guilty to drunken driving. The statements, if he made them, should be taken in the context of his state of mind at that time."
Neither Korpita, nor Rockaway Borough Mayor Kathyann Snyder could be reached for comment last night.
Since Hartzman first filed his lawsuit, Korpita, 48, has been embroiled in legal troubles.
In December, Korpita pleaded guilty to DWI and to threatening a public servant. Morris County Prosecutor Robert A. Bianchi lauded the officers for following through with the arrest and noted Korpita made similar threats to Dover police officers regarding his DWI arrest.
In February, a Superior Court judge found Korpita guilty of using his official position to avoid a drunken driving arrest in Roxbury. Korpita was ordered to never serve in a public office again.
In February, Korpita was charged with a second DWI in Sparta. That case is still pending.
Leslie Kwoh may be reached at lkwoh@starledger.com or (973) 539-7910.
Health insurance companies are rapidly adopting a new pricing system for very expensive drugs, asking patients to pay hundreds and even thousands of dollars for prescriptions for medications that may save their lives or slow the progress of serious diseases.
With the new pricing system, insurers abandoned the traditional arrangement that has patients pay a fixed amount, like $10, $20 or $30 for a prescription, no matter what the drug’s actual cost. Instead, they are charging patients a percentage of the cost of certain high-priced drugs, usually 20 to 33 percent, which can amount to thousands of dollars a month.
The system means that the burden of expensive health care can now affect insured people, too.
No one knows how many patients are affected, but hundreds of drugs are priced this new way. They are used to treat diseases that may be fairly common, including multiple sclerosis, rheumatoid arthritis, hemophilia, hepatitis C and some cancers. There are no cheaper equivalents for these drugs, so patients are forced to pay the price or do without.
Insurers say the new system keeps everyone’s premiums down at a time when some of the most innovative and promising new treatments for conditions like cancer and rheumatoid arthritis and multiple sclerosis can cost $100,000 and more a year.
But the result is that patients may have to spend more for a drug than they pay for their mortgages, more, in some cases, than their monthly incomes.
The system, often called Tier 4, began in earnest with Medicare drug plans and spread rapidly. It is now incorporated into 86 percent of those plans. Some have even higher co-payments for certain drugs, a Tier 5.
Now Tier 4 is also showing up in insurance that people buy on their own or acquire through employers, said Dan Mendelson of Avalere Health, a research organization in Washington. It is the fastest-growing segment in private insurance, Mr. Mendelson said. Five years ago it was virtually nonexistent in private plans, he said. Now 10 percent of them have Tier 4 drug categories.
Private insurers began offering Tier 4 plans in response to employers who were looking for ways to keep costs down, said Karen Ignagni, president of America’s Health Insurance Plans, which represents most of the nation’s health insurers. When people who need Tier 4 drugs pay more for them, other subscribers in the plan pay less for their coverage.
But the new system sticks seriously ill people with huge bills, said James Robinson, a health economist at the University of California, Berkeley. “It is very unfortunate social policy,” Dr. Robinson said. “The more the sick person pays, the less the healthy person pays.”
Traditionally, the idea of insurance was to spread the costs of paying for the sick.
“This is an erosion of the traditional concept of insurance,” Mr. Mendelson said. “Those beneficiaries who bear the burden of illness are also bearing the burden of cost.”
And often, patients say, they had no idea that they would be faced with such a situation.
It happened to Robin Steinwand, 53, who has multiple sclerosis.
In January, shortly after Ms. Steinwand renewed her insurance policy with Kaiser Permanente, she went to refill her prescription for Copaxone. She had been insured with Kaiser for 17 years through her husband, a federal employee, and had had no complaints about the coverage.
She had been taking Copaxone since multiple sclerosis was diagnosed in 2000, buying 30 days’ worth of the pills at a time. And even though the drug costs $1,900 a month, Kaiser required only a $20 co-payment.
Not this time. When Ms. Steinwand went to pick up her prescription at a pharmacy near her home in Silver Spring, Md., the pharmacist handed her a bill for $325.
There must be a mistake, Ms. Steinwand said. So the pharmacist checked with her supervisor. The new price was correct. Kaiser’s policy had changed. Now Kaiser was charging 25 percent of the cost of the drug up to a maximum of $325 per prescription. Her annual cost would be $3,900 and unless her insurance changed or the drug dropped in price, it would go on for the rest of her life.
“I charged it, then got into my car and burst into tears,” Ms. Steinwand said.
She needed the drug, she said, because it can slow the course of her disease. And she knew she would just have to pay for it, but it would not be easy.
“It’s a tough economic time for everyone,” she said. “My son will start college in a year and a half. We are asking ourselves, can we afford a vacation? Can we continue to save for retirement and college?”
Although Kaiser advised patients of the new plan in its brochure that it sent out in the open enrollment period late last year, Ms. Steinwand did not notice it. And private insurers, Mr. Mendelson said, can legally change their coverage to one in which some drugs are Tier 4 with no advance notice.
Medicare drug plans have to notify patients but, Mr. Mendelson said, “that doesn’t mean the person will hear about it.” He added, “You don’t read all your mail.”
Some patients said they had no idea whether their plan changed or whether it always had a Tier 4. The new system came as a surprise when they found out that they needed an expensive drug.
That’s what happened to Robert W. Banning of Arlington, Va., when his doctor prescribed Sprycel for his chronic myelogenous leukemia. The drug can block the growth of cancer cells, extending lives. It is a tablet to be taken twice a day — no need for chemotherapy infusions.
Mr. Banning, 81, a retired owner of car dealerships, thought he had good insurance through AARP. But Sprycel, which he will have to take for the rest of his life, costs more than $13,500 for a 90-day supply, and Mr. Banning soon discovered that the AARP plan required him to pay more than $4,000.
Mr. Banning and his son, Robert Banning Jr., have accepted the situation. “We’re not trying to make anybody the heavy,” the father said.
So far, they have not purchased the drug. But if they do, they know that the expense would go on and on, his son said. “Somehow or other, myself and my family will do whatever it takes. You don’t put your parent on a scale.”
But Ms. Steinwand was not so sanguine. She immediately asked Kaiser why it had changed its plan.
The answer came in a letter from the federal Office of Personnel Management, which negotiates with health insurers in the plan her husband has as a federal employee. Kaiser classifies drugs like Copaxone as specialty drugs. They, the letter said, “are high-cost drugs used to treat relatively few people suffering from complex conditions like anemia, cancer, hemophilia, multiple sclerosis, rheumatoid arthritis and human growth hormone deficiency.”
And Kaiser, the agency added, had made a convincing argument that charging a percentage of the cost of these drugs “helped lower the rates for federal employees.”
Ms. Steinwand can change plans at the end of the year, choosing one that allows her to pay $20 for the Copaxone, but she worries about whether that will help. “I am a little nervous,” she said. “Will the next company follow suit next year?”
But it turns out that she won’t have to worry, at least for the rest of this year.
A Kaiser spokeswoman, Sandra R. Gregg, said on Friday that Kaiser had decided to suspend the change for the program involving federal employees in the mid-Atlantic region while it reviewed the new policy. The suspension will last for the rest of the year, she said. Ms. Steinwand and others who paid the new price for their drugs will be repaid the difference between the new price and the old co-payment.
Ms. Gregg explained that Kaiser had been discussing the new pricing plan with the Office of Personnel Management over the previous few days because patients had been raising questions about it. That led to the decision to suspend the changed pricing system.
“Letters will go out next week,” Ms. Gregg said.
But some with the new plans say they have no way out.
Julie Bass, who lives near Orlando, Fla., has metastatic breast cancer, lives on Social Security disability payments, and because she is disabled, is covered by insurance through a Medicare H.M.O. Ms. Bass, 52, said she had no alternatives to her H.M.O. She said she could not afford a regular Medicare plan, which has co-payments of 20 percent for such things as emergency care, outpatient surgery and scans. That left her with a choice of two Medicare H.M.O’s that operate in her region. But of the two H.M.O’s, her doctors accept only Wellcare.
Now, she said, one drug her doctor may prescribe to control her cancer is Tykerb. But her insurer, Wellcare, classifies it as Tier 4, and she knows she cannot afford it.
Wellcare declined to say what Tykerb might cost, but its list price according to a standard source, Red Book, is $3,480 for 150 tablets, which may last a patient 21 days. Wellcare requires patients to pay a third of the cost of its Tier 4 drugs.
“For everybody in my position with metastatic breast cancer, there are times when you are stable and can go off treatment,” Ms. Bass said. “But if we are progressing, we have to be on treatment, or we will die.”
“People’s eyes need to be opened,” she said. “They need to understand that these drugs are very costly, and there are a lot of people out there who are struggling with these costs.”
Who said anything about a recession? Sometime between the government bailout of Bear Stearns and the Bureau of Labor Statistics report that America lost 80,000 jobs in March, Lee Tachman spent roughly $50,000 last month on a four-day jaunt to Miami for himself and three close friends.
The trip was an exercise in luxuriant male bonding. Mr. Tachman, who is 38, and his friends got around by private jet, helicopter, Hummer limousine, Ferraris and Lamborghinis; stayed in V.I.P. rooms at Casa Casuarina, the South Beach hotel that was formerly Gianni Versace’s mansion; and played “extreme adventure paintball” with former agents of the federal Drug Enforcement Administration.
Mr. Tachman, a manager for a company that executes trades for hedge funds and the owner of “a handful” of buildings in New York, said he has not felt the need to cut back.
“I always feel like there’s a sword of Damocles over my head, like it could all come crashing down at any time,” he said. “But there’s always going to be people who are trading, and there’s always going to be a demand for real estate in New York.”
He is hardly alone in his eagerness to keep spending. Some businesses that cater to the superrich report that clients — many of them traders and private equity investors whose work is tied to Wall Street — are still splurging on multimillion-dollar Manhattan apartments, custom-built yachts, contemporary art and lavish parties.
Buyers this year have already closed on 71 Manhattan apartments that each cost more than $10 million, compared with 17 apartments in that price range during all of 2007. Last week, a New York art dealer paid a record $1.6 million for an Edward Weston photograph at Sotheby’s. And the GoldBar, a downtown lounge, reports that bankers continue to order $3,000 bottles of Rémy Martin Louis XIII Cognac.
“When times get tough, the smart spend money,” said David Monn, an event planner who is organizing a black-tie party on May 10 for dignitaries and recent purchasers of apartments at the Plaza Hotel; the average price there was $7 million. “Short of our country going on food stamps, I don’t think we’re doing anything differently.”
Some extreme spenders say they have not cut back on their impulse Bentley or apartment purchases because they have made so much money in the good times from the Internet, stock market and real estate. Some have been able to move their money into investments like private equity that are available only to those with extensive capital. Some rationalize cars and home renovations as “investments.” And some simply don’t want to skimp on the weddings and anniversary parties that they see as milestone events.
“We’re trying to spend on what we feel is important,” said Victor Self, an executive with a fitness company who, with his partner, is planning to spend $100,000 on a commitment ceremony on St. Barts and a dessert party for 200 to 300 guests at Jeffrey, a clothing store in the meatpacking district.
Many economists warn that the nation’s financial troubles may spread far more widely, and could ultimately touch even the wealthiest. The financial sector could lose as many as 20,000 jobs in New York City by the end of 2009, according to the city’s Independent Budget Office. And at a March 18 policy meeting, Federal Reserve Board members raised the possibility of a “prolonged and severe economic downturn,” recently released minutes show. That threat has undoubtedly caused some affluent people to consider some degree of frugality.
But that still leaves plenty who are consuming away, and one of the things New Yorkers love to consume is real estate. In October, Marc Sperling, the 36-year-old president of an equity-trading company, bought a new condo on the Upper West Side in a building where four-bedroom apartments like his cost more than $4 million. When he moves into the completed building next year, he plans to hold on to his other two apartments in Murray Hill and Miami Beach — each of which he values at about $2.5 million.
Mr. Sperling views the nation’s economic slump as a temporary problem, and is grateful that it has yet to affect him. “I think if you have the means to ride it out, that’s what you do,” he said.
His view of the subprime mortgage crisis seemed to reflect a sort of inverse class resentment.
“I don’t want to sound harsh, but the people who were buying million-dollar houses with a combined household income of $70,000 or $80,000 were the ones who were chasing easy money,” he said.
Days before the collapse of Bear Stearns, the bank’s chairman, James E. Cayne, paid $25 million for a 14th-floor condo at the Plaza Hotel.
He, too, is invited to the May 10 party at the Plaza. It will feature a dozen female string musicians made up to look like statues and clothed in dresses of fresh flowers, like roses and gardenias. There will be caviar and Cognac bars, as well as a buffet designed to visually replicate 17th-century Dutch paintings from the recent Metropolitan Museum of Art exhibit, “The Age of Rembrandt.”
Even high-end rentals are going fast. In just the three weeks since it arrived on the market, a four-bedroom apartment at 15 Central Park West, advertised for $55,000 a month, has gone to contract. The broker, Roberta Golubock with Sotheby’s International Realty, said she showed the apartment to eight financially qualified prospects.
Some New Yorkers defend their spending as investments or gifts to themselves. In August, Karen Borkowsky and Robert Kennedy, a partner in a law firm, were married at the Rainbow Room. The reception, which the event planner, Shawn Rabideau, lavished with glass and calla lilies, cost $150,000 to $200,000. But when Ms. Kennedy considered that she had survived breast cancer and, at age 41, married a guy she had dated in high school, the wedding’s cost seemed less exorbitant. Then, shortly after returning from their honeymoon, the couple started a $400,000 project to combine and restore two apartments into a three-bedroom, three-bath co-op on the Upper West Side. “We are investing in the longevity of the apartment,” she said.
There are also some people who say they have not been hurt because they have poured so much money into opportunities not available to the Main Street investor. Paul Parmar, a 37-year-old investor in companies specializing in health care, defense, media, luxury items and private aviation, says he is living just as large as ever.
In recent months, Mr. Parmar, who lives in Colts Neck, N.J., said he bought 140 acres in Mineola, Tex., and is spending $20 million to begin building a refuge there for abused tigers. Since January, he said he added to his car collection with a $110,000 BMW 750 Li (for his girlfriend) and a Bentley Arnage for himself, for about $300,000. He is leasing a Maybach through Luxautica, an “ultimate car club” that has annual fees of about $125,000.
“On a spending level,” Mr. Parmar said, speaking about a possible recession, “it doesn’t affect me at all.” That said, providers of luxury goods reported anecdotal evidence of a widening gap between the merely rich and the ultrarich. Clifford Greenhouse, who owns a household-staff employment company, said he suspects that the merely rich might be starting to lag behind their far richer counterparts, and are trimming their budgets. He cited reduced demand for chauffeurs — a relatively small-ticket service — yet ever-strong demand for private chefs, butlers and “household managers.”
Darren Sukenik, a real estate broker with Prudential Douglas Elliman, said that while business may be slower for clients with a mere million to spend on apartments, none of his clients with budgets of more than $2.5 million have stopped shopping. Seth Semilof, the publisher of Haute Living, a luxury magazine, said that luxury car dealerships that advertise with him are pushing Bentleys and Rolls-Royces at the expense of less-extravagant cars like the BMW 5 Series.
“If you look at the $20 million-plus market, it’s still strong as ever,” Mr. Semilof said. Some of the ultrarich are still willing to pay above sticker price for things they want badly enough. Mr. Semilof helped three buyers in the past two months acquire Rolls-Royce Phantom convertibles for as much as $200,000 above the asking price of $465,000.
And Eric Lepeingle, a yacht salesman for the Rodriguez Group, said that since January, three New Yorkers bought yachts worth $8 million to $35 million. Although the weak dollar does give some pause to buyers considering Italian-built yachts, Mr. Lepeingle said, they eventually give in. “They want the product anyway,” he said.
All sorts of products, actually.
“They want their Jeroboam, or Methuselah, or Nebuchadnezzar,” said Ronnie Madra, referring to the sizes of Champagne bottles served at 1OAK, a lounge on West 17th Street where he is a part-owner. A Nebuchadnezzar, weighing in at 15 liters, costs up to $35,000.
There would be no Nebuchadnezzar for Mr. Tachman and his friends in Miami, but they soldiered on until the moment the wheels of their private jet returned to the tarmac in New York.
There were hand-rolled cigars, massages, guided rides in racing boats and fighter jets — all arranged by In The Know Experiences, a travel and concierge service in Manhattan.
“It was just all out — it was insane,” said Mr. Tachman. “I’m not afraid to spend money like that.”
(see me cool w/bag)
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