Rediff.com February 28, 2000

Professor flays IT industry, INS for visa fraud

J M Shenoy

A high-powered meeting called by a congresswoman in Silicon Valley last week faulted the Immigration and Naturalization Service of spending little time and effort in investigating H-1B fraud complaints.

While the INS spent much of its energy in deporting convicted felons and raiding low-tech industries -- such as construction facilities and restaurants -- it neglected the operation run by Lakireddy Bali Reddy and his son Vijay Kumar, the meeting was told.

Multimillionaire landlord Reddy and his son are charged with smuggling several people from India using fraudulent information on work visas. The two have denied charges.

The duo petitioned immigration officials for H-1B and other visas on behalf of workers they said would be employed at Active Tech Solutions in Berkeley. Instead, the workers were employed at Reddy's apartment buildings, office buildings and restaurants, according to the indictment.

The indictment also alleges that Reddy smuggled in two teenage girls claiming they were daughters of a 'software engineer' who fraudulently obtained an H-1B visa. Reddy allegedly used the girls for sex. The allegations only came to light after one of the girls died of carbon monoxide poisoning in November

The H1-B visa program, which is about a year old, has not only led to comparatively small-scale unscrupulous employers misusing it but also led the Silicon Valley industry to create a climate of indentured labor, argues UC-Davis Professor Norman Matloff.

His views were heard last week at a special meeting of residents, industry leaders and programmers called by Congresswoman Zoe Lofgren, Democrat, in Silicon Valley.

Professor Matloff noted that the girls's purported father -- a civil engineer with no computer skills -- easily obtained an H-1B visa, but ended up washing dishes and wiping tables at Reddy's Pasand restaurant in Berkeley.

"To me, a case like this is absolutely appalling," he said.

Professor Matloff believes that Silicon Valley is to be questioned about the way it recruits HI-B visa candidates and then gives them seriously inadequate treatment.

Congress has introduced a legislation to increase the number of H1-B visas from 115,000 to 195,000 for each of the next three years.

He says the industry has been using this "temporary need" excuse for years, ever since the H-1B law was enacted in 1990. In the early- and mid-1990s, for example, the industry kept saying that H-1Bs would not be needed after laid-off defense programmers and engineers were retrained. But they never carried out its promise.

He refutes the claim by industry lobbyists that the H-1Bs tend to be "the best and the brightest" from around the world.

The vast majority of H-1Bs earn less than $ 50,000, which is below the median of $ 60,000 for the field, and far below what "geniuses" make, he notes.

The delay in processing green card and citizenship applications by the INS, is a boon to the sponsoring companies, the UC-Davis professor argues.

"If an H-1B is sponsored for a green card, s/he is, in a de facto sense, in a state of 'indentured servitude' for a period of about five years," he adds. "The worker will often get no raises during that time, so that the employer might save $ 50,000 in salary."

IT industry leaders say critics of the H1-B programs exaggerate the situation H1-B workers face. As for the immigrants getting paid less, they point out that ultimately an open market system dictates wages.

But Professor Matloff stays his ground.

"The indentured-servitude nature of the H-1Bs is extremely attractive to employers. Not only might they accrue large savings in salary, but the H-1B also cannot leave their projects in the lurch by jumping to a competitor. It is no wonder that the industry did not support legislation in 1998 that would have greatly reduced the time it takes for an H-1B to get a green card. Even immigration attorneys have publicly pitched this 'loyalty' of the H-1B workers," he said.