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High-tech on the Hi-Line? Proposed project relying on foreign workers prompts questions

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For profit or not?

Main Street in Harlem isn’t busy on a weekday afternoon in May. This town of about 880 people could be the hub of a multi-million-dollar project using more than 20 foreign workers to create Internet resources for residents of nearby Fort Belknap Indian Community.

HARLEM — In this tiny town on Montana's Hi-Line, a project is planned that would potentially bring 20 or more foreign high-tech workers to town, pay out more than $1 million in annual salaries, and create Internet resources for residents of the nearby Fort Belknap Indian Community.

At first glance, the proposed "Cyber-Rez" project would be a positive pilot program to help rural Native communities stay connected to the modern world.

But questions remain about where foreign workers would live, who's going to pay them and who stands to gain from a project that even leaders of the native reservation it would benefit say they know nothing about.

Beyond that, a state attorney has suggested that a web of business-to-nonprofit activity surrounding the project's leaders could be pushing the boundaries of what's legal and what's not.

Rose Community Development, the nonprofit that intends to produce the project, hopes to bring 20 to 25 specialized workers from India to start the project later this year, according to Rohit Saksena, who is listed as vice president of operations on more than a decade’s worth of Rose CDC tax records.

A project using that many foreign workers brought to the U.S. under visas for high-skilled workers would be the largest such project in Montana in recent years, according to federal records.

Saksena’s New Hampshire-based IT consulting firm, SAKS IT Group, was certified earlier this year by the U.S. Department of Labor to bring as many as 41 foreign workers to work at 58 S. Main St. in Harlem, where Rose CDC’s office is kept, according to Department of Labor certification data. The workers would be hired by SAKS and then contracted out to work on the Rose project.

Because the visas are awarded in a lottery, it’s still unclear how many workers will actually be approved for SAKS IT Group.

The project would be a boon for Blaine County and for Harlem. The town of 880 people has no major industry other than nearby agriculture and is largely isolated from more populous towns.

According to federal certification documents, each worker on the Rose CDC project would earn $60,000 annually, dumping roughly $1.2 million in payroll into the area if the project starts with 20 workers.

But no one interviewed at the Harlem city offices, the Fort Belknap Indian Community Tribal Council or anywhere else in the area has ever heard of the proposed project. Rose CDC’s founder and director, Doug Stuart, who lives in Harlem himself, doesn't appear to have discussed the project with many locals.

“If this was going to come up, somewhere along the way he would talk to us,” said Mark Azure, president of the Fort Belknap Indian Community Council. Azure said he had never heard of the project before an interview with the Chronicle.

Doug Stuart

Doug Stuart

And Stuart refuses to say how his nonprofit will pay 20 or more workers the annual salary of $60,000 listed on the certifications on file with the Department of Labor. Nor does Stuart have a plan to house the workers — even if only temporary — in an area with few housing options.

“(Doug Stuart) hasn’t come to the city to talk about how it might impact the city or how the city might coordinate or cooperate in the venture,” said Bill Taylor, Harlem’s mayor and a former school administrator in the area.

Harlem wouldn't have even temporary housing for 20 workers, Taylor said.

What's more, some of the business arrangements of Stuart and Saksena could be in violation of state and federal law, attorneys and other experts have suggested.

And locals in the area paint a picture of Stuart as a man with big ideas but not much history of following through.

Conflict of interest?

According to Montana and New Hampshire Secretary of State records, Stuart and Saksena are both connected to at least three companies.

The many connections between Rose CDC and several businesses

This graphic shows the links between Rose Community Development's founder and director Doug Stuart, and the various businesses, individuals and other organizations he manages or works for or with. Graphic created using Kumu.

Both men are named in Montana Secretary of State documents as managers of Big Sky Global LLC, an information technology consulting firm Rose CDC hired in 2008, 2009 and 2010 to “bring enhanced Internet connectivity to Indian country,” according to federal tax forms. Saksena is the lone agent listed on New Hampshire Secretary of State records for Big Sky Global.

Rose CDC paid Big Sky Global more than $111,000 over those three years. Records for 2011 were unavailable, but in 2012, Rose paid Big Sky Global more than $95,000 under a single line as "Consulting with integrated marketing and technological services to help market their services to Indian country."

When asked specifically what Big Sky Global did for Rose during those years, Stuart told the Chronicle he couldn't remember.

The latest project would have Rose CDC hiring Saksena’s SAKS IT Group to provide staffing for the Cyber-Rez project, according to both Stuart and Saksena.

Federal and state tax rules prohibit directors or other voting members of nonprofits from profiting through their connection to the group. In rare cases, a nonprofit can hire a company that a member has an interest in, but only if strict procedures are followed.

An assistant attorney general for Montana said such a case would require the voting member with the potential to gain from a contract to disclose that interest and recuse themselves from any vote on the contract.

If not, the nonprofit could face penalties.

"It would certainly be something that the attorney general would investigate if it came to our attention,” said Kelley Hubbard, assistant attorney general for Montana.

Rose CDC’s board, however, is composed of just three members, according to Montana state records. Stuart is listed as director as well as president, while his mother, Rose Stuart, fills another director position. The third director slot names Dr. Philip V. Fellman, a university professor whom Saksena and Stuart met during college, according to interviews with them. The secretary and treasurer seats are vacant.

With such a small board of directors, it would be impossible to eliminate a conflict of interest, as the remaining board member couldn’t vote alone, Hubbard said.

Stuart, who lives with his mother in an aging mobile home just across the train tracks from his Main Street office in Harlem, previously filed for bankruptcy and earns no salary from Rose CDC, according to tax records. He says he makes his living off of other business interests.

Besides their involvement with Rose CDC and Big Sky Global, Stuart and Saksena also appear to co-manage two other LLCs — Elist Universe LLC and Aspire Global LLC — with Stuart appearing as the principal agent in Montana and Saksena appearing as the principal in New Hampshire. It's unclear what business, if any, those companies have conducted, though they share Harlem addresses with Rose CDC.

In a May interview, Stuart denied that Saksena had any significant involvement with Rose CDC at present, though he said Saksena had been more involved in the earlier years of Rose CDC. The nonprofit was formed in 1999. Federal tax records from 2003 to 2013 list Saksena as the vice president of operations and tax forms are all signed by Saksena. Saksena is also listed as the principal agent for Rose CDC in New Hampshire Secretary of State records, as the nonprofit is also licensed there.

Similarly, Stuart is listed in Montana records as an "LLC manager or member" with Big Sky Global. 

Rohit Saksena

Rohit Saksena

Saksena’s SAKS IT Group does not list Stuart as an agent, but Saksena's connection to Rose CDC could still be construed as a conflict of interest, according to Hubbard's description of the law.

Stuart, however, doesn't see any problem with the arrangement, he said. He considers Saksena like family, so working with him is only natural, he said.

"People do business with their brothers, don't they?" Stuart said.

Stuart similarly dismissed his involvement with Big Sky Global, saying he had little involvement there and the company was "basically" Saksena's project. Stuart does travel to the company's Great Falls office to check the mail occasionally, he said.

Foreign workers

Big Sky Global, like SAKS IT Group, is an information technology staffing firm that acts as a foreign labor contractor to American high-tech firms.

Generally, these companies act as a go-between, handling the paperwork to hire workers on H-1B or other foreign worker visas, and then contracting with tech companies to hire workers out on projects.

According to U.S. Department of Labor records, Big Sky Global has been certified for dozens of foreign hi-tech workers in years past, under H-1B visas or on green cards. Those certifications, however, do not represent actual workers.

Only a total of 85,000 H-1B visas are allowed each year, and with companies applying for many more than that cap, U.S. Citizenship and Immigration Services now holds an annual lottery to hand out the visa slots.

Companies apply first for the labor certifications from the Department of Labor, and then, once the results of the lottery are released, these companies apply for approval from Citizenship and Immigration Services for the number of worker visas allotted them in the lottery. 

According to unpublished USCIS records, Big Sky Global had 36 H-1B visa workers approved between 2008 and 2013. Generally, the visas are good for three years and can be renewed.

Many of the Department of Labor certifications for Big Sky Global listed a Great Falls office as the place of work. The USCIS records, however, don't list job locations, so those 36 workers could have gone anywhere.

The Great Falls office, a small space above a Wells Fargo Bank branch in downtown, has seen little activity.

A secretary in a nearby office said she had seen a man come and go about once every month or so, and sometimes not for several months at a time. The city of Great Falls, which requires businesses to hold licenses and have regular safety inspections, has no record of Big Sky Global.

The use of foreign workers is not completely out of the ordinary in Montana.

According to guestworkerdata.org, Montana saw 350 foreign workers during fiscal year 2013, working under H-1B, H-2A and H-2B visas.

Sixty-two of those workers came under H-1B visas — for high-skilled workers — and Montana State University took the most with 16. 

That number is a relative drop in the bucket compared to states like California, where high-tech companies used hundreds of foreign workers each year. 

But still, if 20 foreign workers went to work in Harlem on the Cyber-Rez project, the city would hardly be able to sustain them, said mayor Bill Taylor.

"If 20 people came to town and each of them needed a house, there aren't that many houses in Harlem," Taylor said.

He recounted a conversation with officials from nearby, larger Chinook, where it was clear that town didn't have housing for even 10 people.

Saksena admitted during a May interview that it would be hard to board that many workers in Harlem, though he planned to hold initial planning meetings at the Harlem office.

Once the project was underway, he and Stuart would seek office space in Great Falls or Billings and then have workers commute or work remotely for most of the project, Saksena said.

Saksena and Stuart made it clear, however, that if they didn't get enough workers, the project would be at a standstill for the foreseeable future.

"If we don't get the right people, it won't be a project and it will go away," Stuart said in a June interview. "Projects can be canceled, projects can be changed."

A big project in a small town

The place where the Cyber-Rez project is at least set to begin is Rose CDC's Harlem office, a one-room space on the main street through town.

For Profit or Not?

The office of Rose Community Development (foreground right), along Main Street in Harlem, would ostensibly be the main hub for a multi-million-dollar project the nonprofit hopes to do. 

The wood-paneled office is littered with photos of Stuart posing with famous political personalities, including former President George W. Bush. Leather couches form half a rectangle on one side of the room and a large table, covered with economic and political magazines and newsletters, takes up the other half.

It would be hard to envision nearly two dozen IT workers crammed into the space for even a single meeting, let alone for daily work.

The office is toward the north end of the town's main drag, just south of the train tracks that separate it from the dead-end residential street where Stuart lives with his mother. 

That fact that no one interviewed by the Chronicle had heard of the project was not a surprise to Stuart, who said he and his mother keep their business to themselves these days.

The family has a long history in the Hi-Line, where they farmed a large tract of reservation land until the early 1990s. In the late 1990s, Stuart decided to go back to school at Southern New Hampshire University and then started Rose CDC in 1999. 

The family's success, Stuart said, led people in the town to be jealous of him and his family. Stuart and his family are Native American, and they had suffered through a lot for their success, he said.

"Most of these people sitting in this community, who had stuff handed to them, never had the kind of risk our family took," Stuart said. "I was 24 years old and had my first Cadillac. It created a lot of jealousy in the community."

Whatever the motivations, people interviewed had little positive to say about Stuart.

Mayor Taylor doubted Stuart's ability to complete a project like Cyber-Rez, he said.

"A lot of things Doug Stuart does are big, bright ideas and none of it comes to fruition, so far," Taylor said.

Some people in the area also have had trouble working with Stuart, Taylor said.

Taylor said Stuart was, at one time, appointed to the city and county planning board. 

"He behaved in such a way that the members voted him off," Taylor said.

Stuart said he was used to having "wicked terrible things" said about him. 

"I just really resent it that people believe that something we want to do couldn't happen," he said. "I run circles around every one of them in this town. And on top of it, we were Indians from the reservation."

But Rose CDC's past projects appear to be little more than studies and research papers.

In one project, the nonprofit created an agricultural resources management plan for the Fort Belknap tribes. Such a plan would essentially act as a master plan for how tribal lands would be used and developed.

Rose CDC was hired by the Fort Belknap Indian Community to create a plan — and was paid for the work — but the plan went largely unused, Indian Community Council President Azure said.

The first phase of the Cyber-Rez project was essentially a report outlining the needs of native communities for better technology infrastructure — the goal of Stuart's second phase, to create a "virtual reservation."

Throughout its 16 years in existence, Rose CDC has never handled more than about $150,000 in revenue in a single year, according to tax records. The second phase of Cyber-Rez would cost more than $1 million per year in labor costs alone, based on the number of workers Saksena said he needs to get started. 

Most of Rose CDC's work has been done on what's called a fee-for-service basis, Stuart said. Rather than collecting donations and then working on projects, the nonprofit hires itself out to do projects for fees.

But tax records show those fees never go to salaries or other compensation for Stuart or Saksena — the only two people ever named on tax documents — despite them often listing 40 hours per week as the amount they worked for the nonprofit.

Rose CDC has collected few donations over the years, according to tax records.

Stuart won't say how the next project will be funded — whether it be by donation or fee-for-service — or where the money is coming from. 

But he said the funding is secured and available if Saksena gets enough workers to move forward. 

It's also unclear who will make money off the project — if anybody. 

"We don't want to make a lot of money out of this," Saksena said. 

The initial project would be a pilot, to be implemented on Fort Belknap, creating a native-oriented search engine, resource sites and educational infrastructure, including virtual classrooms and other Web-based tools aimed at helping natives better utilize Internet resources, Saksena and Stuart said.

The pilot might take several years to complete, Saksena said. But then Rose CDC would market the project to other tribes outside of Montana.

Daniel DeMay can be reached at ddemay@dailychronicle.com or at 406-582-2651. He is on Twitter at @Daniel_DeMay.

Related Documents

Documents gathered from the Montana and New Hampshire secretaries of state as well as tax forms downloaded from CitizenAudit.org.

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