The USDA's Losing Effort

Delbert Bland, the owner of Bland Farms, the largest grower of Vidalia onions in the nation, said he began hiring Mexican field hands about two years before he received a USDA guaranteed loan in 1998. Bland said it was impossible to find enough workers. "Absolutely, I can't get local help," he said.

Bland turned to a federal program that allows farms to use temporary foreign help so long as they consider American workers first. He said he has used "anywhere from 400 to 600" foreign workers.

In 2001, a number of longtime black and Hispanic workers at Bland Farms filed a complaint with the Justice Department contending that the business rejected them "due to the presence and preference" for foreign workers, court records show. The workers alleged that Bland didn't like using American workers because they complained about their wages and working conditions.

"It's ironic," said Dawson Morton, a lawyer for the Georgia Legal Services Program, which represented the American workers. "The purpose is to create jobs for Americans, and they get rejected."

Bland said that there simply were not enough local workers and that the charges were exaggerated. In December 2001, his company settled with the Justice Department, agreeing to pay a $15,000 fine and about $62,000 in compensation to the American workers.

Bland filed for bankruptcy protection but has since recovered and says his business is thriving. He has paid off his loan and still employs hundreds of Mexican laborers on his sprawling farm, for $7 to $8 an hour. For this year's harvest, he sent 14 Greyhound buses to Mexico to pick up laborers, he said.

Jobs for Guatemalans

The owners of Aztec Environmental projected that they would save 210 jobs and create eight when USDA officials agreed to back two loans in 2003 and 2004 totaling more than $1.6 million.

Aztec specialized in bidding for government contracts and was aided by designations as a minority business enterprise and as a woman-owned business. Operating out of an office in Panama City, a beach resort of 37,000 on the Florida Panhandle, the company won millions in contracts for environmental cleanups at military bases, records and interviews show.

"The last good year we had was about $22 million," said Debbie Livingston, who owned Aztec with her husband, Jimmy. "About 95 percent of that was government."

Aztec relied heavily on foreign workers, especially from Central America. "When we were in full swing, we had 125 employees working in five different states," Livingston said. "Most of them came from Guatemala. We had supervisors who hired them. I couldn't speak Spanish."

Livingston said she tried to hire locals but had trouble finding workers. "In asbestos removal, you have to work a lot of nights and weekends, and a lot of Americans don't like to work nights and weekends," she said. "Spanish people, they never fuss about how long they work as long as they get paid their overtime."

Turnover was high, Livingston said, with workers usually staying 30 to 90 days. She said she checked their papers to make sure they were in the United States legally, "but if they were forged or faked, that wasn't my job."

In 2003, immigration authorities reviewed Aztec files and identified four illegal immigrants, whom Livingston fired. Two years later, the Air Force moved to bar Aztec from bidding on government contracts, alleging that it dumped "improperly bagged asbestos into unmarked dumpsters" and employed "many illegal aliens," according to court records and investigative files.

Aztec denied the charges and challenged the Air Force's claims in federal court. After being debarred for about a year, the company was allowed again to bid on government contracts. But by then it was too late, according to Livingston. "We were already in the hole so far, it was impossible to get back up," she said. "The bank has liquidated everything we own. It's not enough. Eventually we'll have to file bankruptcy."

Research editor Alice Crites contributed to this report.