State OK'd grants to firm
Did not verify workers' status
The New Bedford manufacturer raided by federal agents last month for allegedly employing illegal immigrants won approval for $111,150 in state grants over the last four years to hire and train employees, as part of the company's expansion.
The Massachusetts Department of Workforce Development approved two grants for Michael Bianco Inc. after the owner of the company, Francesco Insolia, appealed for help in winning new contracts from the US Department of Defense and building its share of the commercial textile market.
In early 2003, Michael Bianco, which then employed 87 people, was awarded a $66,250 grant to hire and train 80 new stitchers and machine operators, and to develop an in-house training program for entry-level workers. The state approved another $44,900 for the company this January, but the March 6 immigration raid put that grant on hold.
The case illustrates the balance that government and businesses have to strike between promoting economic development in immigrant-rich cities and complying with state and federal laws against employing undocumented workers.
Linnea Walsh, a spokeswoman for the workforce development department, said state officials would not have awarded the company money in 2003 had they known then about the company what they know now.
"We based it at the time on their training program," Walsh said. "What are the objectives? . . . Are there benefits to New Bedford? Are there benefits to their workforce?"
The latest grant, Walsh said, has been "tabled for the foreseeable future."
At the time both grants were approved, the state did not require employers to verify workers' immigration status, Walsh said. Now, under an executive order signed by Governor Deval Patrick in February, the state will require all such grant recipients to certify that their employees can legally work in the United States, she said.
A spokesman for Mitt Romney, the former governor whose administration awarded the 2003 grant, said Patrick should seek to get the money back if it was used to train illegal workers.
"Mitt Romney's view is if that grant was not used for legitimate purposes -- if it was used to train illegal aliens, for instance -- then that money should be refunded to the taxpayers of Massachusetts," said spokesman, Eric Fehrnstrom .
When federal immigration agents and police descended on the company in March, they arrested 360 illegal workers, representing more than half of Michael Bianco's workforce, according to US Immigration and Customs Enforcement. Insolia and other managers face federal charges of conspiring to hire illegal workers. Federal prosecutors allege the company deliberately recruited illegal immigrants instead of legal workers, believing they were desperate enough for jobs that they would tolerate substandard working conditions.
It's not clear whether the company recruited and trained illegal immigrants with any of the state grant money it received. Insolia reported to the state after receiving the grant only that it had helped him hire more workers and get additional defense contracts, which would mean even more jobs.
A spokesman for Michael Bianco, Doug Bailey, said Insolia didn't even know such state assistance was available until New Bedford officials informed him during a visit to the factory.
The state eventually sent a representative to meet with Insolia and helped him write the grant, Bailey said. Questions about workers' immigration status never came up, he said.
According to New Bedford officials, the company also received a five-year tax break from the city in 2004 that had already reaped Michael Bianco more than $50,000 in tax savings as of last month. That tax break, which was approved by the state, required that approximately half of the new jobs generated by the company be given to city residents, in exchange for a total of $80,000 in savings by 2010.
Matthew A. Morrissey, executive director of the New Bedford Economic Development Council, said that the city is already working on getting the $50,000 back.
In seeking the 2003 grant, Michael Bianco, which makes safety vests and backpacks for the military, said it was under serious consideration for additional defense contracts if it could reach a certain level of quality-control certification.
The company, which has expanded to 600 workers over the past few years, won the 2007 grant after applying for money to improve its quality-control methods by training 122 workers.
"Our dramatic workforce increase requires us to now pay close attention to quality demands," the company wrote in that application.
Since the March 6 raid, Michael Bianco has lost $91 million in Defense Department contracts. Mayor Scott W. Lang of New Bedford has proposed that the federal government appoint a trustee to take over the company.
Scott Helman can be reached at shelman@globe.com.
(Correction: Because of an editing error, a caption with a photo in yesterday's City & Region section of workers at the Michael Bianco Inc. factory in New Bedford incorrectly described when the picture was taken. It was taken on March 22, weeks after the March 6 raid by immigration agents.) 