Sale of Children in Interstate and Foreign Commerce
Between 21 March and 25 April 1977 the Subcommittee on Criminal Justice of the Committee on the Judiciary House of Represetatives held a hearing on the Sale of Children in Interstate and Foreign Commerce.
The proceedings of this hearing are available in electonic format and uploaded as an attachment to this post.
A very important testimony was made by Pamela Zekman of the Chicago Sun-Times. She describes the wheelings and dealings of infamous figures such as Seymour Kurtz and Stanley Michelmann. Kurtz' Easterhouse is as of today still active in the state of Illinois.
The testimony of Pamela Zekman is presented below.
TESTIMONY OP PAMELA ZEKMAN, INVESTIGATIVE REPORTER, CHICAGO SUN-TIMES
Ms. ZEKMAN: I would like to thank the committee for inviting me to testify on this legislation. The bill that you have under consideration will fill a vacuum in the criminal statutes that are now silent on the subject of the sale of human lives. At present, there are no Federal laws that deal directly with the flourishing business of selling babies. Lawyers, doctors, and others who barter with babies know that. And as the supply of babies steadily shrinks, these baby brokers have steadily expanded their operations to increase their source of infants. They have set up complicated but profitable interstate pipelines to match babies in one State with adoptive couples in other States, with little fear of the law catching up to them.
During a 2-month investigation of the baby-selling racket, the Chicago Sun-Times uncovered evidence of interstate operations that criss cross the country and stretch even beyond national boundaries. They are carefully constructed schemes that rely on abortion clinics and pregnancy counseling services as well as doctors and lawyers to provide a. steady supply of healthy white babies for couples who can pay the highest price.
Our investigation found the price for a healthy white baby ranged from $5,000 to $15,000. We have heard indirectly of prices quoted as high as $25,000. Most courts and legitimate adoption attorneys will tell you that reasonable attorney fees run from $500 to $1,000. Some charge far less. But in the baby-selling racket, the fee is not based on reasonable costs. it is based on the laws of supply `and demand-and right now the demand is very high and the supply is very low.
It is not uncommon for adoption agencies to have couples on wait lists for babies from 1 to 4 years. The independent baby brokers suffer from the same shortages of babies caused by the easing of abortion laws and the new morality that accepts unwed motherhood. But the independent brokers have an edge on the market over the adoption agencies. They can lure natural mothers with promises of benefits that agencies cannot afford or are not permitted to give. And they have proven themselves inventive in their methods of finding babies to keep their business going.
One Chicago attorney who quoted us a going rate of $10,000 for a baby complained once to me about his unsuccessful effort to persuade the Government of India that he could help alleviate their twin problems of overpopulation and hunger by placing Indian babies with American clients of his. His idea was motivated by considerations other than the welfare of Indian babies. He selection of parents is based purely on their ability to pay, and he bragged to Sun-Times reporters about the many questionable placements he has arranged. His attitude was best described by him to an adoptive mother who was appalled by te pricetag he placed on babies and accused him of peddling flesh. He retorted to her and I quote "That's my business. I sell flesh.
As brazen as this baby broker sounds, he will be difficult for any law enforcement agency to pin down. Federal authorities will have a difficult time building an income tax case on him because like others in this business, he deals in cash only. And he carefully instructs adoptive couples on how to make payments that cannot be traced. One adoptive couple living in Florida told me how the lawyer instructed them to pay his $8,000 fee 4 years ago. The fee was to he paid by. a check for $2,000 to cover the attorney fees and hospital expenses. for the natural mother. The remaining $6,000 was to be concealed from the court and paid in cash on the day of the adoption. The lawyer instructed them to borrow the money from a relative and not to withdraw it from their own bank account because then it could be traced. He instructed them on how to lie about the costs when they appeared in court. After the adoption was completed, he told them that by the time they came back for their second child, the fee would probably be up to $12,000.
Law enforcement authorities in Illinois have told me that income tax laws are the only tools available to them right now to clamp down on interstate baby-selling, rackets. The U.S. State's attorney's office in northern Illinois once researched the possibility of using other laws to indict baby brokers. They came up with few alternatives. One' theory was to stretch the mail fraud statutes to try to fit this particular crime, but the theory was dismissed. as too convoluted to result in successful eases.
Local prosecutors are trying to deal with the problem as best they can, but face jurisdictional problems in interstate operations. I will leave it to the prosecutors you have scheduled to appear before you this morning to testify about those problems. I would rather spend my time with you describing some of the operations we found during our investigation. I hope through these examples you will realize that the law you are considering is badly needed to halt the practices we uncovered.
One of the slickest of the international operations is run by a Chicago lawyer who for years headed a State licensed adoption agency known as Easterhouse. When the shortage of babies crimped this operation the attorney, Seymour Kurtz, began building an international network of corporations and foundations that spreads from Chicago to the Netherlands and Mexico, and is still growing with plans for expansion to New York. Italy. and Colombia. The operation, as we found it in June 1976, involved a confusing system of referrals from one Kurtz founded agency to another, leaving adoptive couples with the impression that they were dealing with totally separate operations.
Couples inquiring about adoption at Easterhouse are told that there is a long wait for babies Then they are told of in alternative. They are told that Easterhouse works closely with a. foundation located in the Netherlands called the Stichting SuSu which has connections to adoption agencies around the world. Eager couples are. advised to contact SuSu which, at the time of our investigation, was nothing more than a post office box. Kurtz himself would fly back and forth to the Netherlands picking up the inquiries the Chicago agency had directed there, and responding t.o them by dropping answers in the mail with postmarks from the Netherlands.
The Stichting SuSu, a Kurtz-founded foundation named after his daughter, Susan, in turn refers couples to a Mexican adoption agency called Casa del Sur which has offices in Mexico City and Juarez. The Casa del Sur is also a Kurtz founded agency Inquiries to Casa del Sur are answered with confident assurances that babies are available there sometimes within a month They are referred back to Easterhouse in Chicago which, according to the script, is the designated U.S. agency to do home studies for Casa del Sur. Thus, the couple is right back with the same agency they started with in Chicago. But that is not the last of the Kurtz corporations a couple will deal with before the adoption is complete.
To assist them in handling the complicated Mexican adoption, Kurtz will recommend local Chicago attorneys. The couple is told that the attorney fees are $900. This is in addition to the adoption price which is usually $4,000, but is sometimes reduced for couples showing financial need. What the couples don't know is that the attorneys recommended by Kurtz only keep 10 percent of the $900 legal fee or $90. The rest is kicked back to a Kiirtz-owned-for-profit corporation incorporated in Delaware called the SuKu Corp.
The adoption fee is usually paid in the form of a donation to another Kurtz-foundation called Tzyril, which has the stated purpose of aiding orphaned children. However, the only donations recorded in furtherance of this purpose were to the Kurtz-owned Mexican adoption agency, Casa del Sur. We also discovered that Tzyril filed tax returns as a tax-exempt organization in 1973 and 1974, even though that foundation did not have tax-exempt status. Kurtz said this was unimportant because the foundation did not make any money anyway. The reason it did not make any money, according to the returns, was that it paid $16,000 for Kurtz' travel expenses and $61,000 to Casa del Sur.
Little is known about the Mexican end of this operation except that medical expenses for deliveries are a fraction of the cost in the United States. Thus the potential profits are tremendous.
There are a lot of questions immigration authorities have about how Kurtz is able to get around the usual 6 month waiting period required under Mexican law for an adoption to become final. His become final immediately.
Income tax agents have questions about how the money paid by couples is shuttled back and forth between corporations and just how nonprofit the nonprofit corporations are.
Illinois authorities have questions about the costs charged and the propriety of the entire setup, but the State regulators have, no jurisdiction in Mexico and the Netherlands. Why set up such a mish mash of corporations and foundations? Why send couples around the world and back home again to the agency they started out. with? One State investigator who studied the scheme concluded, "He may have found the foolproof scheme. He has created such jurisdictional problems that no one can get their teeth into it.. He's all over the map."
Not all baby sellers have, found it necessary to run such complicated operations. But they still operate secure. in the thought that the law will have difficulty following them from State to State. I was referred to a Pittsburgh attorney when I called a toll free number in the yellow pages of the phone directory belonging to an abortion assistance service in Havertown, Pennsylvania. They screened me with two questions. Did I take hard drugs? What color was the father? Having passed that test they gave me the telephone number of their .so-called. legal department, a Pittsburgh lawyer who said he could arrange living quarters for me in New York through an attorney he works with. I questioned him about this, inquiring why a Chicago girl, assisted by a Pittsburgh attorney, should be directed to an apartment in New York. His only explanation was that the geography should not concern me, the geography, he said, was only important to him. The adoptive parents, he said, could come from anywhere in the country, and I would never know from where. I suggest to you that a case like that would be difficult to track down after the adoption became final.
The brazenous of interstate baby brokers like this is best exemplified by Joseph Spencer, a New York lawyer who said he has done this kind of work for 25 years, even though New York law, like Illinois, prohibits unlicensed persons from arranging for the placement of a child. I telephoned Spencer as a prospective adoptive mother from Chicago. He was eager to please, but warned me that a newborn white infant would be difficult to get.
He explained that the interstate system works this way, "Most of the children come through other lawyers. They are like a middleman, you see. So besides the hospital costs and the living costs for the mother, there would be a finders fee, which is called a legal fee, to the other lawyer for his service. Actually it is a finders fee because he will help find us a baby, but we can't call it that. He explained that an adoption handled in this manner would cost me about $14,000 to $15,000.
Another flourishing interstate broker was referred to me by a Chicago based abortion counseling service which advertises regularly in the major newspapers. I posed as an unwed mother in search of alternatives. A man who described himself as a counselor at this clinic told me there were two ways to handle the adoption. I could go to an agency, but I would probably find myself boarding with a hundred other girls in a dormitory and my baby would be delivered at the county hospital by an intern. On the other hand, I could go the private route. He told me about a contact the clinic had with a New York layer who would put me up in a lovely apartment in New York or Florida. I would have all my expenses paid, the best medical care in a private hospital, clothes, and a source for whatever other needs I had? It doesn't take long to make a decision when the alternatives are presented that way.
This so-called counselor then put me on the telephone to the New York law firm of Michelman and Michelman. I was assured of help, advice, and security. I was promised a lovely apartment and the best medical care. I would have expenses for clothing and food and whatever else I needed. I could come to New York whenever I wanted. I was instructed to keep in touch with Stanley Michelman on a weekly basis until I arrived.
After the first telephone conversation in the abortion clinic I was given a three page questionnaire that asked questions about my background and the father's background. I faked the answers. Then I was asked to sign a document which stated that. I was agreeing to give up my baby for adoption and if I changed my mind I would have to pay back all expenses. It was written on the letterhead of the New York law firm of Michelman and Michelman in the kind of legalese that, would be difficult for most young girls in these circumstances to understand. It leaves one with the impression that it is a formal legal document and could be construed as part of the final adoption papers. Many young girls who gave up their babies through Michelman told us later that that was the impression they had. Actually the document is worthless legally.
The abortion clinic finishes its duties for the New York attorney by taking a photograph of me to be sent to New York with all the other information. The photographs are shown to prospective adoptive parents so they can get an idea of what the baby might look like, It is a degrading experience.
For the next few months I had weekly contact with Stanley Michelman, calling him collect at his instructions to report on my condition, and my plans for coming to New York. He said he had four apartments where I might live. He said one in particular was a luxury place where I would have a room and telephone of my own. I would share the apartment with another girl from North Carolina who was there to have a baby too.
At my request he flew to Chicago to introduce me to two girls who had been to New York and had babies for him to place for adoption.. We chatted about what I could expect in New York. The girls were in their teens, bright-eyed and very eager to give a good sales pitch for Michelman. They loved living in New York. They loved having an. apartment and telephone of their own. They loved the whole experience so much I practically expected them to say they would do it all again for Mr. Michelman.
After the Sun-Times ran its series on the baby selling racket one. of the two girls that chatted with me in that hotel room telephoned to tell an entirely different story. During several interviews with her and her mother, I was told how she and other girls were pressured not to change their minds about giving up their babies and told they would have to pay thousands of dollars to Michelman to reimburse him for his expense. She and her mother complained about poor medical care-they said she was sent home with packing still inside her, a condition that they did not discover for days, and which caused her tremendous pain. She said that Michelman asked her to refer other girls to him and promised her trips to New York if she did.
Adoptive couples visiting Michelman in search of a baby are quoted prices from $4,000 to $7,000 for his services. However Michelman claimed he only charged $2,500 plus medical expenses when asked about his fee by reporters.
The kinds of practices I have described to you this morning will continue unless some kind of legislation is passed that gives prosecutors tools to work with. The need to stop it cannot be overemphasized. All three parties involved-the adoptive parents, the natural mother, and baby can be hurt so long as the brokers deciding their fates are motivated by the prices they can charge. One study showed that 16 of the 19 couples who completed non agency adoptions had never been the subject of home studies by social workers. Even worse, 7 of the 19 were suffering from a terminal illness at the time of the adoption.
Couples using the black market anguish through years of fears that somehow the baby they have adopted could be taken away because they have participated in something illegal. They have probably committed perjury in court and many fear the natural mother could use that to get her baby back. The natural mothers are hurt by operators like this because they are not given the advantage of hearing unbiased, sensitive, educated advice on the alternatives they have. They are confused and upset and frequently young and naive. They have many options from getting an abortion to keeping the baby. But if their counselor is a baby broker, the only advice they will probably get will be to give the baby up for adoption, and give it up through them. The experience can do years of damage to these girls and we interviewed many who suffered feelings of tremendous confusion and guilt after they gave up their Babies. Many were in desperate need of counseling after giving up their babies, but such services are not part of the baby business.
And then there are the babies. We discovered that in most States no investigation is done of the home where they will spend their lives until after the baby brokers have already made the match and placed them there. At that point judges told me they are reluctant to remove the baby unless evidence of an extreme nature is found to deny an adoption petition.
Baby brokers have only one standard for selecting an adoptive. Couple whether they can pay the price. That is not a standard that should he. used to evaluate parenthood. The Illinois Legislature is presently considering hills that will better equip our prosecutors to clamp down on baby selling operations. I hope that the examples I have given vou this morning will convince you that there is a tremendous need for legislation at the Federal level.