Date: Fri, 1 Oct 2004 23:04:40 -0700 From: Norm Matloff To: Norm Matloff Subject: bulletin--Chambliss bill passes Judiciary! To: H-1B/L-1/offshoring e-newsletter Contents of this posting: 1. Surprising update on Chambliss bill. 2. Why the Chambliss bill is a "no-op" (computer speak for something which does nothing) on L-1, merely cosmetic, no real reform. 3. How the Chambliss bill is basically what the ITAA asked for. Recall that Sen. Chambliss introduced a bill last year which ostensibly addresses the problems of the L-1 work visa. As I stated at the time, the "reforms" in the bill are bogus, probably deliberately so, to give the impression of doing something about the problem but actually keeping "business as usual." More recently, I've reported on plans in the works to incorporate into the Chambliss bill a major expansion of the H-1B program. Even up to yesterday, it appeared that these plans were on their way to being implemented. I cited yesterday's edition of Immigration Daily, an e-newsletter for immigration lawyers, plus confirming information from a reader who has been in close contact with the office of a senator on the Senate Judiciary Committee. And even today's issue of Immigration Daily stated, H-1B/L - we are confident that there is significant momentum behind H-1B cap relief. This cap relief will likely be limited to those with advanced degrees. We believe that this relief will not be cost-free, and restrictions on the L will be the price for this relief. The exact nature of the L restrictions are still very fluid and subject to negotiation between the two parties and the two chambers. We believe that the lame duck session will see some compromise on H-1B/L enacted into law. (The "lame duck session" referred to is a short session Congress is planning to hold in November, AFTER the election, a perfect time to enact unpopular legislation without recrimination.) Well, it turns out that--from the point of view of people like me--there is good news and bad news to report on the Chambliss bill. First, the good news: The H-1B expansion was apparently NOT incorporated into the bill after all. The staffer of the Judiciary member told the constituent today, The Chambliss L visa bill passed out of the Judiciary Committee on Thursday without amendment or additional provisions. It passed with language as introduced. That is consistent with what is on Congress' Web page (thomas.loc.gov; plug in "S 1635" for the bill number). So, no H-1B expansion in the Chambliss bill. It appears that even Immigration Daily--associated with one of the most powerful special-interest groups on the Hill concerning H-1B/L-1 policy--was taken by surprise (as was, apparently, the very active immigration reform organization NumbersUSA). On the other hand, that certainly does NOT mean that H-1B expansion is dead in this session of Congress. Instead of adding that provision to Chambliss' bill, which apparently had begun to attract unwanted attention, the promoters of that expansion might now opt to bury that provision in some huge, complex unrelated bill, where no one would see it. The BAD news is that the bill has now been passed by the Judiciary Committee, the crucial first step to likely eventual enactment. This is bad from my point of view, because as I said above, the bill's "reform" of L-1 is phony, merely giving the illusion of providing help to U.S. programmers and engineers. This is quite pernicious, as it gives politicians the ability to tell their constituents that they have done something about the foreign labor issue. If American workers now say (assuming the bill is enacted), "But the bill really did nothing useful on L-1, and did nothing at all on H-1B," the politicians can reply, "Well, let's see how well this bill works before we think of doing more"--a perfect stalling tactic. In other words, a "no-op" bill is worse than doing nothing. Getting back to the L-1 "reforms" Chambliss proposes, here is why they are merely cosmetic: To understand what is going on here, recall first what sparked all this-- the famous case in which Tata Consultancy Services (TCS), a big user of H-1Bs and L-1s, "rented out" its L-1s to Siemens in Florida, displacing software engineers such as Mike Emmons. Emmons made a major case of this, was in the press a lot, and put pressure on his congressperson, Rep. Mica. Unfortunately, the impression developed that the only problem with L-1 was that TCS "rented out" its L-1s to Siemens. Of course, that was just a side issue. Siemens could have imported its own L-1s from its Indian subsidiary. The CENTRAL issue was the replacement of American workers by cheap foreign labor, regardless of whether it was via "renting out" or direct importation. I suspect that this focus on what is only a side issue was a deliberate diversionary tactic on the part of the politicians. But in any case, suddenly the attention was on the "renting out." Even the leaders of unions and professional organizations fell into this trap; see http://heather.cs.ucdavis.edu/Archive/TataSpecialSW.txt http://heather.cs.ucdavis.edu/Archive/TataDenies.txt Now in that TCS/Siemens setting, the Chambliss bill, referring to TCS as the "petitioning employer" and Siemens as the "unaffiliated employer," states An alien who will serve in a capacity involving specialized knowledge with respect to an employer for purposes of section 101(a)(15)(L) and will be stationed primarily at the worksite of an employer other than the petitioning employer or its affiliate, subsidiary, or parent shall not be eligible for classification under section 101(a)(15)(L) if-- `(i) the alien will be controlled and supervised principally by such unaffiliated employer; or `(ii) the placement of the alien at the worksite of the unaffiliated employer is part of an arrangement merely to provide labor for the unaffiliated employer rather than in connection with the provision of a product or service for which specialized knowledge specific to the petitioning employer is necessary.'. Barring L-1s from (i) is easily circumvented, as I explained in: http://heather.cs.ucdavis.edu/Archive/Mica2.txt (Mica bill is similar) http://heather.cs.ucdavis.edu/Archive/Chambliss.txt All Tata would have to do is instruct its L-1 workers at Siemens to talk to Siemens management as little as possible. If an L-1 has a question, he/she would direct it to a Tata manager (who might actually be on site at Siemens), who in turn would talk to Siemens, thus preserving the fiction that the worker is working for Tata, not Siemens. Provision (ii) is a little more subtle. The key phrases are "specialized knowledge"--which was already in the statute--and "specific to the petitioning employer"--which would be added to the bill. On the surface, it would SEEM to mean that TCS could not, say, rent out an L-1 to Siemens simply for the purpose of, say, XML development, since XML (a data description language) is not specific to TCS. But that is only what it seems. The fact is that Tata and the other big L-1 Indian firms prepared for this refined notion of "specialized knowledge" long ago. In June of last year, Tata told the Dallas Morning News, India-based Tata Consultancy Services uses the L-1 visa program to transfer employees to the United States and send them out on consulting projects across the country. The primary reason is that its workers in India are trained in Tata software - training not available to U.S. workers, said resident manager of personnel Girish Surendran. "We've got more than 50 research and development centers spread across India in multiple locations," he said. "When they come to the U.S. on this basis, they bring that knowledge with them." See my report I made at that time, at http://heather.cs.ucdavis.edu/Archive/TataSpecialSW.txt In that report, I raised the question as to what the heck Tata's "special software, training [for which is] not available in the U.S." might be, and I speculated that it is project management software. I noted that this seemed to be an especially likely explanation, since the Indian firms make such a big deal out certified process methodologies. (Itself a red herring, as I've explained in http://heather.cs.ucdavis.edu/Archive/CMUHype.txt) But in any case, it would mean that Chambliss' bill would not threaten TCS' operations. TCS could still supply programmers to, say, Siemens, for, say, XML work, but could claim that the real value of the programmers is that they know TCS' "specialized" project management software. Since Tata's remark came just a month after Chambliss introduced his bill, it is clear that Tata's statement to the Dallas Morning News was aimed at "prequalifying" to operate "business as usual" should the bill ever be enacted. But wait a minute, you might ask, was Tata so lucky as to have something in place which coincidentally let it off the hook with regard to the Chambliss bill? No, of course it was no coincidence. No, instead of Tata fortuitously qualifying under the Chambliss bill, what appears to be the case is that THE BILL WAS DELIBERATELY WRITTEN TO SUIT FIRMS LIKE TATA. I say that, because the bill follows the recommendations made by ITAA industry lobbying group. Around that same time (with development presumably coming considerably earlier), the ITAA released a policy paper, proposing what should count as "specialized knowledge" (www.itaa.org/itserv/docs/l1bposition.pdf), and distributed it in Congress. By some weird coincidence, ha, ha, the ITAA's wording is the same as what Tata used in its statement to the Dallas Morning News: 5. The alien beneficiary has advanced knowledge of his/her employer's special process or methodology that is not generally held throughout the industry. For example: ... c. The employer's specific process or methodology that is used to perform a certain service is different than the processes or methodologies used by many other companies in the industry in that the employer's process or methodology has been certified as meeting SEI or Six Sigma standards (level of Total Quality Management) and the beneficiary has been trained in such employer specific process. Aha! So, as long as it is "not generally held throughout the industry," it qualifies as "specialized knowledge, specific to the company." This matches exactly the Tata statement to the Dallas Morning News. And did you notice the other interesting part? The ITAA refers to certified project management methodologies, exactly what I speculated that "special Tata software, not available in the U.S." consisted of. As most readers of this e-newsletter know, Congress is entirely beholden to the industry, for its campaign contributions, and has openly stated so. The ITAA openly gives Congress its marching orders, as seen in http://heather.cs.ucdavis.edu/Archive/Chambliss2.txt In other words, a reasonable theory of what happened is this: 1. The ITAA asked TCS and others, "What do you do of a specialized nature that we can make use of politically?" 2. TCS said, "Oh, we use our own special project management software, which Americans don't know how to use." 3. The ITAA went to Chambliss and "suggested" that he draft legislation along those lines, i.e. allowing TCS et al to continue business as usual, while giving the public the impression that Congress is responding to the people's concerns about L-1. Of course, TCS and the others probably talked to Chambliss too. According to Congress' Web page, another thing that happened yesterday regarding the bill is the Sen. Dianne Feinstein (D-Calif.) became a cosponsor of the bill, as did Sen. Lindsey Graham (R-SC). Neither of them is a cosponsor of Sen. Dodd's bill (D-Conn., S 1435), a bill which actually would bring some benefits. They'd rather cosponsor a bill (Chambliss') that actually does nothing but looks good to the public. By the way, the Chambliss bill also would institute a "one-year rule," once again no real restriction, as I explained in http://heather.cs.ucdavis.edu/Archive/Chambliss3.txt Norm