DES MOINES REGISTER

November 1, 2009

State sends prosecutor its findings on Atalissa

By CLARK KAUFFMAN

The Iowa Division of Criminal Investigation has completed its investigation into Henry's Turkey Service and its alleged exploitation of mentally retarded processing-plant workers.

The agency's findings have been passed on to the Muscatine County attorney's office for review. Prosecutor Dana Christensen says the findings are contained in "about 15 pounds worth of reports" that he plans to examine in the weeks ahead.

More than eight months have passed since county, state and federal authorities descended on the eastern Iowa town of Atalissa and evacuated the aging bunkhouse where dozens of disabled workers had lived over the past 34 years.

The bunkhouse was shut down shortly after The Des Moines Register asked state regulators why 21 mentally retarded men were living in what appeared to be an unlicensed care facility or group home.

The Federal Bureau of Investigation, the Equal Opportunity Employment Commission, the U.S. Department of Labor and other agencies have been looking into allegations that the Atalissa men were paid as little as 40 cents an hour for working in the West Liberty Foods plant.

In addition to their wages, the workers were given room and board in the 106-year-old Atalissa bunkhouse Henry's rented from the city. In recent years, the building was marked by boarded-up windows, roach infestation and a lack of central heating.

To date, no criminal charges have been filed in the case, and company officials have denied any wrongdoing.

In March, the Iowa Department of Inspections and Appeals alleged Henry's Turkey Service violated Iowa law by running the bunkhouse as an unlicensed care facility. The inspections department forwarded its findings to Muscatine County prosecutors.

Christensen said the county hasn't acted on that referral because of a desire to coordinate activities with federal authorities who are looking into other potential violations of federal law.

"We have some avenues of prosecution that are available to us at the state level that are not open to federal authorities, and vice versa," he said. "That's why my preference is to have a coordinated effort that has a sense of internal logic to it, and a sense of internal justice to it."

$900,000 labor fine is appealed by Henry's

Earlier this year, Iowa Workforce Development alleged 9,000 violations of state wage-and-hour laws by Henry's Turkey Service, but that case is being pursued as a civil matter, not a criminal case. The agency has imposed a $900,000 fine that is being appealed by Henry's. A hearing on that matter is scheduled for April 2010.

Christensen said that with the case still under review he cannot say whether the 9,000 alleged payroll violations might also form the basis of a criminal case against Henry's.

Since the investigation began eight months ago, Henry's and its affiliate, Hill Country Farms, have been selling most of their assets, and the companies' bank accounts are close to being depleted.

Federal labor investigators from Iowa have traveled to Texas to interview the owners of Henry's Turkey Service, Kenneth Henry and Jane Ann Johnson. They have also interviewed members of Johnson's family in an apparent attempt to ascertain how assets from the company were used over the years.

Officials at the U.S. Department of Labor have declined to comment on the status of their investigation, but the agency has a history of not penalizing Henry's for violations of labor laws.

In 1998 and 2003, the department alleged that Henry's or Hill Country Farms violated wage-and-hour laws in Atalissa and Texas. In 2001, the department's inspector general found that Henry's was deducting a total of $67,200 per year from the Atalissa men's pay for lodging at the bunkhouse, even though the city was charging the company just $7,200 per year in rent. Henry's also deducted a total of $100,000 from the men's pay to help construct a for-profit retirement home in Texas, the inspector general said.

Those findings never resulted in criminal charges, although Henry's was ordered to reimburse its workers for unpaid wages.

The 21 workers who were still living in the Atalissa bunkhouse when it was shut down in February have since been relocated to care facilities in Texas and Iowa.

Some of the men who worked for Henry's in Atalissa years ago are now living in a bunkhouse located on the Johnson & Johnson Egg Farm in Goldthwaite, Texas. That facility is owned by Herman Johnson, the brother of Henry's founder, Thurman Johnson.

Nine years ago, Herman Johnson agreed to pay $40,000 to the state of Texas to settle allegations that he had abused and exploited the elderly and mentally retarded men who moved to the egg farm from Atalissa when they became too old to work at West Liberty Foods.

Texas accused company of abusing laborers

The state alleged that Herman Johnson routinely ordered the men on the egg farm to dig trenches, handle 50-pound bags of feed and do other forms of manual labor. At the time, most of the men were in their 60s. One of the men died, allegedly while unloading bags of feed.

Johnson hired Tommy Adams, a state prosecutor, as his defense attorney. At the time, Texas law specifically prohibited prosecutors from acting as defense attorneys in cases brought by the state.

The case was resolved with a settlement in which Johnson agreed to let a local expert in mental health services make periodic, unannounced inspections of the Texas bunkhouse to make sure the men were being properly cared for.

However, those inspections never took place. The mental health expert told the Register that the Texas attorney general never informed her of the arrangement and so she never visited the facility.

Additional Facts

Henry's Turkey Service at a glance

1966: The state of Texas begins paying Henry's Turkey Service and an affiliate, Hill Country Farms, to take in mentally retarded men from state institutions. Over the next several years, the companies send the men to labor camps in Iowa, Missouri, Kansas and other states. One of the camps was based in Atalissa.

1974: Iowa social worker Ed George writes a memo to his superiors at what is now the Iowa Department of Human Services, likening Henry's business practices to slavery and calling them "obscene." He adds that once a man becomes an employee of Henry's, "he, for all practical purposes, loses most basic human rights."

1979-90: Amid investigations into alleged labor-law violations, Henry's Turkey Service shrinks in size. Most of the labor camps are closed, but the Atalissa operation continues.

1997: Texas authorities ask the Iowa Department of Human Services to investigate allegations of "poor treatment" of the Atalissa workers. The Iowa agency refuses, with one social worker writing, "Seems to us these folk are Texas' responsibility." That same year, the U.S. Department of Labor finds multiple wage-and-hour violations by Henry's.

2000: A Texas rancher tied to Henry's pays $40,000 to settle allegations that he forced former Atalissa workers to do hard, physical labor on his egg farm.

2001: The Iowa Department of Inspections and Appeals visits the Atalissa bunkhouse and finds that it is operating as an unlicensed care center. The department imposes no fines or penalties.

2003: The U.S. Department of Labor orders Henry's to pay 43 Atalissa workers more than $20,000 in back wages. No other sanctions are imposed.

2005: A former Henry's employee complains to the Department of Inspections and Appeals that the bunkhouse is overrun with cockroaches and that workers are being abused. The department's findings regarding those allegations are never made public.

2006: An Atalissa city official complains to the Department of Human Services that the front door of the bunkhouse is chained shut, presenting a fire hazard. The department declines to investigate.

FEBRUARY: Sherri Brown, the sister of one of the Atalissa workers, asks The Des Moines Register to investigate Henry's. A Register reporter visits the bunkhouse, collects payroll information, interviews the caretakers and contacts state regulators to ask why the bunkhouse appears to be unlicensed. Within days, the facility is shut down.

MARCH: The Department of Inspections and Appeals alleges the bunkhouse was run as an illegal, unlicensed care facility. The matter is turned over to Muscatine County prosecutors.

MAY: Iowa Workforce Development alleges that Henry's committed 9,000 violations of state law by failing to pay the minimum wage, failing to provide pay stubs to workers and by making illegal deductions from workers' pay. The department imposes a $900,000 civil penalty that is now being appealed.

OCTOBER: The Iowa Division of Criminal Investigation wraps up its investigation and sends its findings to Muscatine County prosecutors.