Texas farm that employed intellectually disabled men scrutinized more closely after closure of "Iowa bunkhouse"

From the Dallas Morning News:

GOLDTHWAITE, Texas – The young men, fresh from Texas state institutions for the mentally disabled, began arriving at Thurman Johnson's ranch in the rolling hills west of town in the late 1960s.

Johnson taught them how to raise turkeys and cows and perform other farm chores, then put them to work. Later, he and his partner, Kenneth Henry, hired out the men as laborers at turkey processing plants in Iowa and other states.

Over four decades, Johnson and Henry cared for hundreds of mentally disabled Texans and profited from their labor – with the knowledge of state and federal authorities. The arrangement ended in February, when Iowa authorities shut down a shabby bunkhouse where the last 21 men lived while working long hours in a nearby turkey processing plant.

FBI agents and other federal and state investigators in Texas and Iowa have interviewed witnesses and are poring over thousands of pages of records to determine whether the business broke laws, including underpaying workers or violating their civil rights. Iowa authorities recently notified Henry that the business could face $900,000 in fines for improper payroll deductions and other alleged violations.

In his first interview since the controversy erupted, Henry said he and Johnson followed the law. At the heart of the dispute, he said, is the cost of the 24-hour care that his workers required – a cost that Henry said they legally deducted from paychecks.

"These boys cannot take care of themselves," said Henry, 68. "The constant care is the part that nobody wants to talk about."

Henry said he and Johnson, who died last year, viewed their business as a higher calling that provided them with a modest living. He rejected critics who have likened it to slavery.

"They don't have a clue," Henry said. "They don't understand the program. The boys take pride in their work. They don't think they're being exploited."

Before he died in Texas last year, Thurman Johnson lived for many years with his "boys" in a 106-year-old schoolhouse (pictured) in the tiny east Iowa town of Atalissa. It was the last outpost for Henry's Turkey Service, the business through which Johnson and Henry sold the labor of mentally disabled men.

When Iowa state inspectors visited Johnson's bunkhouse in February, they found 21 mentally disabled men living in the structure. They also found cockroaches, boarded-up windows and exits, and a faulty boiler that forced the men to use space heaters to stay warm in the cold Iowa winter.

The inspectors declared the facility a fire hazard and shut it down, setting in motion a massive federal and state investigation.

Johnson was already in the turkey farming business when state officials hired him in August 1966 to teach job and independent living skills to five young adult men with mental retardation. Henry was an expert in artificially inseminating turkeys, a standard industry practice to increase output. Before long, Johnson and Henry combined their operations and began doing business as Hill Country Farms and Henry's Turkey Service.

The state paid Johnson and Henry up to $990 to train each of the young men over six months, according to a company document written in 1980. When the training was completed, the men would be given private-sector jobs in which they would be paid 50 percent of the minimum wage, the document said.

"It was all put together with the state," said Robert Womack, a former Hill Country Farms corporate officer who worked with the mentally disabled men from 1969 through 1978. "We even had a nurse out there that was paid for by the state."

At its peak, Hill Country Farms was a 2,000-acre operation that included a dairy farm, turkey farm, egg farm, country store and restaurant. The young men learned how to drive tractors, milk cows, deworm sheep and artificially inseminate turkeys.

They lived in a low-slung bunkhouse behind Johnson's ranch-style home outside Goldthwaite, on the northern edge of the Texas Hill Country.

When work allowed, Johnson and his employees took the young men camping, fishing and bowling. Every fall and winter, they celebrated Thanksgiving and Christmas.

"There was never a night, if Thurman was there, that he wouldn't walk through the bunkhouse at 9 o'clock to make sure no one was fussing," Womack said. "He dearly loved every boy that was out there."

In the early 1970s, Johnson began hiring out crews to artificially inseminate turkeys on farms in Kansas, Missouri, Illinois, North Carolina, South Carolina and Iowa. That led to more opportunities for Johnson's men – the gory, monotonous work of processing turkeys for slaughter.

One of Johnson's contracts was with a turkey processing plant in West Liberty, Iowa. To house his men, Johnson and Womack transformed an old school into a bunkhouse in Atalissa, about seven miles from the plant.

The plant paid Henry's Turkey Service for the men's labor. Henry's, in turn, paid the men an hourly wage based on their ability to perform assigned tasks, Kenneth Henry said.

A federal law enacted to encourage employers to hire people with disabilities allowed Johnson to pay less than the minimum wage and to deduct the "reasonable cost" of room, board and care from the men's pay.

The men worked long hours, but they also attended dances hosted by local groups and visited zoos, museums and amusement parks.

Each year, Johnson brought the men back to Texas for time off.

Although a national advocacy group for the mentally disabled honored Johnson as "employer of the year" in 1969 for his Texas operations, and similar awards followed over the years, Iowa regulators raised questions about the business almost from the beginning.

In 1974, an Iowa state social worker who had examined Johnson's new branch in Atalissa criticized the "exploiting manner" of Henry's Turkey Service and compared it to slavery. He also questioned how the business handled Social Security and disability payments to its mentally disabled employees.

Any man assigned to the Atalissa operation "loses control of finances, the location where he lives, the type of work he does, and the type of housing in which he must dwell, as well as with whom," state social worker Ed George wrote in late 1974. Iowa regulators concluded that the operation needed regular monitoring.

Federal authorities also got interested. By 1980, Johnson and his wife, Jane Ann, were so concerned with U.S. Department of Labor scrutiny that they asked relatives of their workers to write letters to the department's Des Moines office, said Robert Berry, who kept the books for Hill Country Farms.

Scrutiny intensified as the years passed, and in 1997, the Labor Department ordered Hill Country Farms to pay back wages to disabled workers and a supervisor. The Labor Department is refusing to discuss the earlier problems because of the current investigation.

In 2003, after more digging, the Labor Department ordered Hill Country Farms to pay about $20,000 in overtime to its Iowa employees.

Around the same time, the Labor Department inspector general's office examined Henry's Turkey Service as part of a broader review of companies allowed to pay disabled workers less than the minimum age. The investigation found that Henry's claimed to pay its men an average hourly wage of $5.65 in Iowa, but was actually paying between $60 and $65 a month in cash plus meals, lodging and other services.

Investigators questioned Henry's method of calculating worker pay, including its deduction of $67,200 a year for housing – although actual rental expenses for the Atalissa bunkhouse were only $7,200 a year.

Kenneth Henry told The Dallas Morning News that the discrepancy, then and now, results from the cost of round-the-clock care given to the men.

Berry said none of the investigations found any serious problems. He cited the 2003 probe as a case in point: The $20,000 in overtime that Henry's Turkey Service was ordered to pay amounted to about 12 cents per hour per worker, Berry said.

"There was no fine, no recommendation to change their operating procedures," Berry said.

By the time Thurman Johnson died in early 2008, it looked as though Henry's Turkey Service would fade away without further controversy. Late last year, Jane Ann Johnson and Henry began shutting down the business and bringing workers back to Texas to live in nursing and retirement homes.

When Johnson arrived at the Iowa bunkhouse in early February to bring 11 more men back to Texas, she was surprised to find that the local caretakers "had let it run down," said Henry.

Hill Country Farms paid the caretakers, Randy and Dru Neubauer, and two other family members more than $127,000 in wages last year, company records show. When contacted by The News, a woman who answered the telephone at the Neubauer residence said "no comment" and hung up.

Dru Neubauer recently blamed Henry for the shabby condition of the bunkhouse. She told Iowa investigators that he had ordered her to slash maintenance spending and cut in half the $3,000 monthly grocery budget, according to Iowa records.

"Absolutely wrong," Henry told The News.

He said he told the Neubauers that the grocery bill should decline as men were brought back to Texas, but he denied cutting the budget. He also provided The News with a January pest extermination invoice for nearly $200 and a $2,000 invoice from an Iowa dentist for treatment of Henry's Turkey Service employees in late 2008 and early 2009 – proof, he said, that he was continuing to spend money on his workers and the bunkhouse.

In the months since Iowa authorities shuttered the bunkhouse and took custody of the remaining workers, the FBI has interviewed Johnson and Henry and has seized thousands of pages of company documents. Among the questions the U.S. Justice Department is pursuing is whether Henry's violated the civil rights of its employees by coercing them to work for the company. The U.S. Labor Department wants to know whether Henry's underpaid the men or failed to pay overtime.

The U.S. Social Security Administration is examining the company's handling of federal assistance payments to its disabled workers. At the time authorities shut down the Iowa bunkhouse, each of the Henry's workers was collecting on average about $640 a month in Social Security and federal disability payments. The money went directly into each individual's account at the Mills County State Bank in Goldthwaite – accounts that Hill Country Farms was allowed to access, Berry said.

Henry said the payroll records and company documents seized by investigators will clear his business of wrongdoing.

"People think that we got rich out of this deal, but we haven't," he said.

As chief executive of Hill Country Farms, Thurman Johnson collected an annual salary of $50,000, and vice president Henry earned around $45,000, company records show.

"You can pick apart the finances and how much the boys were paid and all that," said Berry, "but the bottom line is Hill Country Farms took care of these boys for 40 years."

Indeed, some families whose loved ones worked for the Texas ranchers over the years still praise their program.

Brady Watson, 40, spent 18 years working for Hill Country Farms and Henry's Turkey Service. He started at the ranch in Goldthwaite, worked on Henry's crews in Missouri and other states and wound up at the Iowa turkey processing plant. He lived at the Atalissa bunkhouse for seven years, until it was closed in February.

Brady's father, Howard Watson, a retired manager with a major corporation in Dallas, visited his son in Atalissa four or five times, including last December.

"They seemed to feed them well," Watson said. "I didn't see any abuse or neglect. I never saw any roaches. The building was warm and my son was happy there."

Watson said he doesn't have a problem with what his son was paid for his work or how his finances were managed. The company paid for his son's medical and dental care, bought his clothes, winter coats and boots and other necessities and gave him spending money, he said.

"I wasn't concerned about the money because he seemed to be well taken care of, and that's expensive," Watson said. "Those people that make the suggestion that the program did not help the men should try to get help somewhere else for this type of person."

The men themselves can provide only partial answers. Most have IQs below 75 and communicate haltingly. More than a dozen, ranging in age from their early 40s to late 70s, have returned to Texas, where they live in group homes and nursing facilities, largely unaware of the controversy.

After shutting down the Atalissa bunkhouse, Iowa authorities declared the last 21 workers "dependent adults" and placed them under the state's temporary guardianship. Nineteen of the men remain at an Iowa assisted living facility, said Roger Munns, spokesman for the Iowa Department of Human Services.

Jeff Long, 49, one of the 21 men removed from the bunkhouse, lives in a group care home in Fort Worth and works at a Tarrant County sheltered workshop for mentally disabled men and women.

"I'm done with Iowa," he said.

He didn't enjoy the turkey processing work, but he misses his friends from the bunkhouse. He also misses Thurman Johnson.

"He was my buddy," he said. "He was always kidding around. Sometimes he would take us out."

The Henry's workers who returned to Texas last year also have adjusted well.

Clarence Dunning of Tyler was in his late 20s when he arrived at Hill Country Farms in the late 1970s after years in a state institution for the mentally retarded.

Dunning learned the ropes around the ranch, learned how to milk cows. Later, he was sent to South Carolina to work on a turkey processing line, and wound up in Iowa with a Henry's team. For more than 25 years, Dunning lived in the Atalissa bunkhouse and worked on the turkey processing line in West Liberty.

These days, the 59-year-old Dunning plants flowers, plays bingo and makes the rounds of the Midland nursing home where he lives with five other former Henry's workers.

"I'm retired," Dunning declared one recent day, after tending his flowers.

None of the men misses the turkey plant.

Leon Hall, 56, said he suffered from a breathing problem that was aggravated by the swirling dust, feathers and moist air at the Iowa plant. He remained on the job for 15 years, working the line each day until he would be gasping for breath.

"They'd take me off the table, send me back to the schoolhouse," he said.

Harry Griffee, like the other men, loved Johnson. Among his fond memories are the saucer-sized "Texas biscuits" that Johnson whipped up in the bunkhouse kitchen.

At his home in Proctor, 45 miles north of Goldthwaite, Henry pulled a book of testimonials from a shelf to sum up the four-decade history of Hill Country Farms and Henry's Turkey Service. He flipped through it, reading page after page of letters from family members whose loved ones worked for Johnson and Henry, accolades from advocates for the mentally disabled, even notes from some of the men themselves.

"We haven't tried to hide from anybody," Henry said. "We've had 1,500 boys go through the program. It was a lot better than letting them rot in a state institution."