The Business of Adoption

Permissive laws, big bucks make Texas hot spot

Nancy Stancill

Houston Chronicle

October 6, 1991

TOTING cameras and gifts, five North Carolina couples showed up as unwelcome guests at a Houston Christmas party for unwed mothers.

The holiday spirit dissipated as the party disintegrated into a bizarre mating dance. The infertile couples circled the roomful of distended bellies and one man took video footage of the young mothers-to-be.

"I felt like it was a cattle auction," says Winnell Byrd of the 1988 Prince of Peace Adoption Services party.

Byrd said her former partner, Houston attorney Lawrence D. Tackett, brought the out-of-state couples to the party to spotlight the proprietary agency's profitable product -- Texas babies.

Permissive laws and the lure of big money are making Texas a white-hot baby market, offering quick and loosely monitored adoptions.

Children are being exported to other states in record numbers by entrepreneurial agencies whose critics accuse them of baby-selling.

The Texas Department of Human Services revoked Prince of Peace's license two months ago after finding serious problems at the Houston agency.

But other adoption businesses that aggressively court birth mothers are driving up the cost and jeopardizing the ability of average-income couples to adopt. The needs of birth parents are sometimes lost in the entrepreneurial scramble to satisfy well-to-do adoptive couples. And children may go to the highest bidders rather than to the most suitable homes.

Tackett's agency left heartsick customers in Houston, Oklahoma and North Carolina. They include couples who paid money to adopt babies they never got, a couple who returned twin boys to the agency and a birth mother whose baby died just after a judge ordered Prince of Peace to return the infant to her.

Tackett said the agency was having financial reversals, but declined further comment. Byrd left Prince of Peace in 1989 and opened her own successful agency, Blessed Trinity Adoptions.

Texas has more licensed child-placing agencies than far more populous New York and California. The Houston Chronicle investigated the state's volatile adoption industry and found troubling practices and abuses. Among them:

Despite large numbers of Texas couples who desperately seek babies, the number of Texas children adopted by out-of-state people has tripled in the last five years. In 1989, 620 of the 2,196 children placed by Texas agencies -- 28 percent -- went out of state.

State laws that allow relatively unrestricted financial support of pregnant women and quick relinquishment of parental rights have spawned proprietary agencies set up primarily to service clients of out-of-state lawyers.

Large payments to birth mothers after they relinquish their babies have tempted some couples to have children for the financial support they can gain.

Fees charged to adoptive couples and salaries paid to agency operators are skyrocketing, and the state can do little to control those costs.

The entrepreneurial agencies sometimes refuse to help women carrying black or biracial babies because they can charge higher fees for white or Hispanic infants. Success of those agencies often comes at the expense of the non-profit charity or church-supported agencies.

Nanci Gibbons, a Texas Department of Human Services administrator charged with licensing adoption agencies, said the industry has changed so much in the last several years that the state agency will revise its minimum standards sometime in 1992. More financial accountability will be emphasized, she said.

"I'd be naive to assume there aren't abuses," said Gibbons. "Adoption is a business, and there are abuses in any business."

"We know of babies bringing $35,000 to $50,000, and when you start talking money like that, ethics tends to get lost," said Carolyn Langendorf, TDHS investigator.

Earlier this year, Leslie Thacker, a 73-year-old Houston lawyer who operated the agency bearing her name, was indicted on charges of purchasing a child and tampering with documents after problems with some of her placements were publicized. Her trial is scheduled for January.

The number of Texas adoption agencies has risen dramatically in recent years. By December 1990, there were 138 private child-placing agencies, up from 107 in 1987 and 86 in 1985. Additionally, TDHS is a public child-placing agency that handles adoptions of children who have been abused or neglected.

Some 5,060 of the 7,277 adoptions in Texas in 1990 were independent adoptions, many of them children adopted by stepparents or extended family members. Other independent adoptions are arranged between birth parents and adoptive parents who find each other and hire lawyers to make it legal.

The remaining 2,217 adoptions were handled by a wide variety of licensed agencies across the state, ranging from the venerable Gladney Center in Fort Worth -- the country's largest -- to bustling proprietary agencies run by urban lawyers to small mom-and-pop agencies in rural areas.

Michael McMahon, president of the Gladney Center, said the agency placed 241 children last year, 54 of them in other states. Gladney, which is 104 years old and operates on-site maternity facilities, expects those numbers to rise this year because of new programs it has started.

"Texas is a good place to try to adopt because, unfortunately, there's a high unplanned pregnancy rate and more young women who are pro-life and reluctant to terminate their pregnancy," he said. "Of the birth mothers we serve, 50 percent are either Baptist or Catholic."

However, he noted, "We have 10 legitimate calls from couples wanting to adopt for every child available for adoption."

The scarcity of healthy white infants -- the children most frequently sought for adoption -- is underscored by national statistics. According to the Washington-based National Committee for Adoption, only 25,000 infants are available annually for adoption and more than 1 million infertile couples wait for babies.

Mary Beth Seader, vice president of the national organization, said, "Large numbers of adoptions take place in Texas. In some ways, licensing standards may be more lax than in other states. It's easier for agencies to become licensed in Texas and there are a large number of them."

Seader said couples in other states who want to adopt are often counseled by lawyers to turn to Texas.

"Texas is one of those states where a lot of children are leaving and going elsewhere. There are a number of agencies in Texas set up by out-of-state attorneys and controlled by them."

Some of the new proprietary agencies have strong ties with out-of-state attorneys, including Adoption Services Associates of San Antonio. ASA, operated by San Antonio attorney Linda Zuflacht, placed 206 babies last year, mostly with out-of-state couples. Only Gladney placed more babies than ASA.

Zuflacht said her referrals come from out-of-state lawyers who belong to the American Academy of Adoption Attorneys. She acknowledged that many referrals come through Stanley Michaelman, a well-known New York lawyer who has written extensively about new-style adoption techniques. Michaelman could not be reached.

The out-of-state lawyers instruct clients to apply to Texas agencies with which they have referral arrangements and advertise in a Texas newspaper to find a birth mother. Under state regulations, couples can pay a birth mother's medical, legal and living expenses -- such as housing, food, clothing and transportation -- by funneling those expenses through an agency.

Sometimes, birth mothers recruited in other states are sent to Texas for the duration of their pregnancies, so their living expenses can be legally passed through the agency to the adoptive couple. Because the Texas law does not specify how much can be paid to support a birth parent, policies vary among agencies.

Not surprisingly, the agencies that interpret the law more generously generally attract more birth mothers and place more babies.

Texas Assistant Attorney General Ann Hartley said she is troubled by the growing popularity of "pass-through" expense payment policies and believes they encourage baby-selling, which is specifically outlawed.

"I think that's dancing very close to the wrong side of the Texas penal code, because the adoptive couple doesn't know whether they're paying for something like Mom's cocaine habit," said Hartley.

"It's not very safe for adoptive couples because one way an adoption can be overturned is to offer money as an improper incentive for a child."

Elizabeth Vanderwerf, a veteran San Antonio adoption social worker who recently teamed up with a lawyer to open a new agency there, said she has seen abuses.

"I have heard of birth parents who were promised maternity supports in amounts that paralleled specific items that would not be allowable under state law," she said. "I have seen cases of birth parents referred by out-of-state attorneys and promised exorbitant amounts of lost wages. That is not allowed under state law."

Many of the newer proprietary agencies -- and some of the older ones -- handle identified adoptions, in which the birth mother and adoptive couples find each other through advertising or are paired with the agency's help months before delivery. Then the agency keeps a ledger of that birth mother's medical and living expenses and seeks reimbursement from the adoptive couple as expenses are incurred.

The advantage to the agency is that the adoptive couple pays all of the pregnant woman's expenses and bears all the risk, should she change her mind and decide not to relinquish her child after it is born.

Even Gladney started an identified adoption program a few months ago. McMahon said several out-of-state couples are now working with Gladney in the agency's "self-directed" adoption program, but that Gladney still offers traditional adoptions.

In a traditional adoption, the agency would work with a birth mother and select a family to adopt her child, or ask her to select among profiles of couples who had been preapproved by the agency. The adoptive couple's fee -- a flat amount or sliding scale based on their income level -- would not include their specific birth mother's expenses but would be for a range of services provided by the agency.

The fee in a more traditional adoption would be paid when the couple receives a baby.

In an identified adoption, the adoptive couple risks losing thousands of dollars already paid in maternity supports, should the birth parents keep the child. But Zuflacht said she recommends that adoptive couples purchase newly available insurance to cover the expenses incurred in such cases.

She said her agency's identified adoptions can range from $18,000 to $25,000 but are not necessarily that expensive.

Zuflacht said she would like to work with more Texas couples, but she's not apologetic that most of her business comes from out of state.

"There are good people in every state in the union, and certainly there are infertile people in every single state who want to adopt," she said.

But others said they worry that qualified Texas couples are being priced out of the baby market by big-money interests outside the state.

State Sen. Chet Brooks, D-Pasadena, who chairs the Senate Health and Human Services Committee, said, "We really don't need that kind of economic development. We need the kind that creates jobs in the state and doesn't export babies."

Celeste Ross, executive director of Homes of St. Mark, a longtime Houston adoption agency, puts it even more bluntly:

"I really think there's a baby train leaving Texas. That's how loose the laws are in our state."

Homes of St. Mark will not place a child out of state unless it cannot find a Texas family. In those rare instances, it is usually because the agency does not have enough minority families who want to adopt black or mixed-race children.

Ross questions whether the agencies placing children out of state are willing or able to provide the follow-up services that most adoptive families need. Also, she said, her agency provides extensive counseling to determine whether birth parents are psychologically prepared to relinquish their children.

But like many agencies supported by churches or charity, Homes of St. Mark has suffered in recent years from rising costs and a declining number of babies it receives to place.

Ross said Homes of St. Mark is placing about 30 babies yearly and its adoption fees average $10,000, depending on an adoptive couple's income. However, she said, the agency's costs averaged $26,000 per child last year, because of rising medical expenses.

"If something's wrong with a baby, it's not uncommon to run up a $20,000-40,000 bill. Few mothers are insured."

Unexpected medical expenses can really hurt a small agency, agreed Sara Black, director of New Life Childrens' Services, which receives some support from Northwest Baptist Church.

"Financially, we're struggling right now," said Black, the only full-time employee of the small agency that places 15-20 children yearly.

"It's very difficult to say to the birth moms, `I can't provide this.' It's very hard to meet everyone's needs. Birth moms sometimes ask about getting more than we can provide and will say another agency offered them this or that."

Black said counseling at her agency emphasizes that the birth mother has a range of options, including parenting the child. The mother-to-be helps to select the adoptive parents, who are not told until she actually relinquishes the baby to prevent her from feeling pressured.

State officials have expressed doubt that the counseling efforts of the entrepreneurial agencies are as thorough and said they've had scattered complaints that birth parents have been coerced into signing.

James Marquart and Robert Barker, two officials of DePelchin Children's Center, a United Way agency that places about 70 children a year, said it is evident that the entrepreneurial agencies are doing the kind of brisk business placing healthy white infants that DePelchin and other non-profit agencies used to receive a decade or so ago.

"Most of these new groups are focused on white infant adoption in a very entrepreneurial way," said Barker.

The DePelchin officials said some minority birth mothers they assist have told them of being turned away from other agencies. The church and charity-related agencies are receiving more black and biracial infants to place as a result of the market shift, he said.

Almost half the babies DePelchin placed last year were black, and the agency recently received a federal grant to recruit more black families.

Officials of some proprietary agencies said their fees are no higher than those of the church and charity agencies. Blessed Trinity's Winnell Byrd said she uses better marketing techniques to attract pregnant women, such as operating a maternity home for pregnant women who have small children.

Byrd said she sleeps with her mobile telephone "in my bed" to take calls at all hours of the night from birth mothers considering adoption. Byrd said her 2-year-old agency expects to place about 130 babies this year.

One of them will probably be the daughter of 18-year-old Donna Dowling of Michigan, who has already selected a family for her expected child. Dowling said she likes the agency that her Houston sister chose for her.

But some agencies -- including one in Houston -- have used policies that state officials have questioned as possibly coercive to birth mothers.

TDHS records show that earlier this year, state officials reviewed a policy by Adoption Information and Counseling Services Inc., a Houston agency operated by Mills and Charlotte Duncan, of paying birth parents a lump sum of up to $5,000 after the relinquishment of a child.

"The agency's usual procedure is to reimburse the birth parent(s) with a check for the total cumulative amount after the signing of relinquishments. The agency receives a direct reimbursement for this amount from the baby's adoptive parents," a TDHS letter said.

DHS took no action. The Duncans did not return Chronicle calls seeking an interview about agency policies including the lump-sum reimbursements paid after a woman gives up her baby.

"It sounds like a mighty strong incentive to release a baby," said Assistant Attorney General Hartley. "It sounds like a price to me."

Vanderwerf in San Antonio said lump-sum reimbursements have been made by some agencies there and can be a powerful incentive for a poor couple to give up an infant.

Particularly chilling, she said, is a small but growing number of Texas birth parents who repeatedly have babies to gain the financial support that agencies provide during the pregnancies.

"There are some agencies who have birth parents returning every year to place four, six or eight children because it's a way of life," said Vanderwerf.

And because Texas is one of only a dozen states where relinquishment is irrevocable, birth parents are out of luck if they change their minds. Once they sign the relinquishment papers -- usually 48 hours after birth -- the decision is legally final.

"A person buying a piece of furniture has more protection than a teen-age mother giving her baby up for adoption," said Dennis Beck, a Houston attorney who favors a change in the state law that would give birth parents a cooling-off period after signing relinquishment papers and other rights.

Others criticize lack of regulations on adoption fees and say there should be limits on salaries the operators of adoption businesses can pay themselves or their staff.

State regulations prohibit agencies from charging more for services than they pay out for operations. Gibbons said it's easy for agency owners to charge higher fees, raise their salaries and remain in compliance.

Gibbons said she's concerned that agencies' spiraling fees are pricing working-class and middle-class families out of the baby market.

A Houston woman who adopted from an entrepreneurial agency here said once its owners determined that her family income was high, there was little attempt to try to determine whether she and her husband would be good parents.

"The feeling was, `You've got the money. We've got the babies.' "