Entries in Outsourcing (4)


US Software Developer Caught Outsourcing His Job to China

Ciaran Griffin/Thinkstock(NEW YORK) -- A software developer was busted for outsourcing his job to a programmer in China while he surfed the Web at work.

The case was described by Andrew Valentine, a principal with Verizon Enterprise Solutions, who published a blog post about the incident.

"We've seen plenty of employee misconduct cases, but not typically like this," Valentine told ABC News.

Valentine's team was contacted by another company based in the U.S. for assistance over "anomalous activity" it noticed in records of employees logging remotely into the company's IT system.  Verizon Enterprise Solutions is not releasing the name of the company or the employee.

The company's security team eventually found that someone was logging in from Shenyang, China, with the American employee's credentials -- while that employee was staring at a computer monitor in his U.S. office.

In his blog, Valentine described the employee as being in his mid-40s with a "relatively long tenure with the company, family man, inoffensive and quiet. Someone you wouldn't look at twice in an elevator."

A search of the employee's computer found hundreds of PDF invoices from a third party contractor/developer from Shenyang.

Eventually, it was discovered that the employee had outsourced his own job to a Chinese consulting firm, paying about $50,000 to the firm out of his salary of several hundred thousand dollars.

Once on-site, Valentine said it took about two days for investigators to collect relevant evidence and put all the pieces together.

The employee had sent his company log-in key through FedEx to China so that the third-party contractor could log in under his credentials during his workday.

The "best part" of the story is that "for the last several years in a row he received excellent remarks" in his performance review, Valentine wrote in the blog.  "His code was clean, well written, and submitted in a timely fashion.  Quarter after quarter, his performance review noted him as the best developer in the building."

Valentine said the employee was terminated for violating internal company policy.

"The employee denied everything at first, but then changed his story once we produced the invoices that were recovered from deleted disk space," Valentine told ABC News.

Copyright 2013 ABC News Radio


Senate Kills Anti-Outsourcing Bill; Democrats Point to Romney, GOP Points to Obama's Economy

iStockPhoto/Thinkstock(WASHINGTON) -- The Senate has rejected further consideration of a bill Democrats say would have eliminated existing tax breaks for employers who ship their jobs overseas. While Republicans sought to squash it as political theater on the part of the Democrats, Dems admit quarreling over the “Bring Jobs Home Act” was openly influenced by the 2012 presidential campaign.

“It’s fairly easy to see why Republicans are blocking our bill to stop outsourcing,” Senate Majority Leader Harry Reid, D-Nev., said at a press conference before the vote. “They’re obviously defending their presidential nominee, who of course made a fortune by shipping jobs overseas.” Reid's home state of Nevada is suffering from one of the worst unemployment rates in the union.

Reid was referring to Mitt Romney’s past involvement with Bain Capital, the private investment firm Democrats say bought companies, laid off many of their American workers, and outsourced their jobs. With more dismal economic news on their plates this week, Democrats have made Romney’s history with Bain a central talking point on the trail.

Senator Richard Durbin, D-Ill., followed Reid, saying that Thursday’s vote was about turning the Republican position on outsourcing into “a matter of record.”

“So the dance ends, the music ends and the votes are counted,” he said. “And we can find out whether or not the Republican senators support the Bain Capital investment strategy of exporting jobs overseas.”

Under existing law, employers may take tax deductions for the costs associated with moving jobs out of the country. The proposed legislation would have eliminated that, and used the resulting new revenue to fund a 20 percent tax credit for the costs companies run up “insourcing” labor back into the U.S.

The bill failed 56-42. A count of 60 was required to end discussion and move to a final vote.

To further push the issue, Democrats held a conference call with employees from Sensata Technologies, an electronics hardware manufacturer that plans to close its Freeport, Ill., plant at the end of the year and move those operations to China. Democrats say 150 people will be laid off in the process. Sensata, formerly known as the Sensors and Controls division of Texas Instruments, was spun off to Bain in 2006 for a reported $3 billion. The call was held after the vote.

“There is no reason in the world this would not have passed except for so many of the Republican senators have other interests,” said Tom Gaulrupp, a 33-year veteran of the company.

Gaulrupp says there was never a year the company did not draw a profit. Another employee, Lin Feller, was more frank:

“They do not care about us. The average guy on the street, they just do not care about us.”

On the House floor Thursday morning the ranking Republican member of the Senate finance committee called the bill “a joke,” suggesting President Obama’s campaign staff were its true authors.

“It’s devoid of serious content because it is of political rather than economic priorities,” Orrin Hatch, R-Utah, said.

Speaking on the House floor, Hatch said it was “misleading” for Democrats to say there is a tax break for outsourcing. Holding up a large book, Hatch said the Democrats were trying to invent controversy.

“I’ll keep this book of tax codes at my desk here. If someone wants to show me the tax code that allows deductions for shipping jobs overseas. I’d like to see it. But it’s not in here.”

Congressional analysts at the Joint Committee on Taxation say $14 million could be raised next year from removing outsourcing credits, compared to a cost of $21 million for bringing those jobs back. Hatch points out the relatively low sum has already been passed in Obama campaign ads on the issue.

Three Republicans voted in favor of the bill: Senators Susan Collins, Olympia Snowe and Scott Brown.

Copyright 2012 ABC News Radio


Obama Hammers Romney on Outsourcing vs. ‘Offshoring’ Explainer

JEWEL SAMAD/AFP/Getty Images(DURHAM, N.H.) -- President Obama today doubled down on his attack on Mitt Romney as an “outsourcing pioneer,” directly rebutting comments made Sunday by the Republican nominee’s advisers Eric Fehrnstrom and Ed Gillespie in network news interviews.

“Just last week it was reported that Gov. Romney’s own firm were pioneers in outsourcing. … Yesterday, his advisers were asked about this and they tried to clear this up by telling us there’s a difference between outsourcing and ‘offshoring,’” Obama said, drawing laughter and boos from the crowd of 1,200 packed into the Oyster River High School gym.

“That’s what they said,” he quipped, “you cannot make this stuff up.”

Gillespie and Ferhnstrom have said that Democrats and the news media have confused outsourcing and offshoring and that Romney, during his time as a corporate buyout specialist at Bain Capital, did not send U.S. jobs en masse overseas. Obama today rejected the explanation.

“What they don’t understand,” he continued, is that “if you’re a worker whose job was sent overseas, you don’t need someone who’s going to explain the difference between outsourcing and off-shoring. … You need someone who’s going to wake up fighting” every day for jobs for you.

Obama said his tax plan would close the “outsourcing loophole” and provide tax incentives to companies that bring jobs back to the United States from overseas.  He said Romney’s “commitment to outsourcing” is part of an overarching economic vision that caters to the wealthiest Americans over the middle class.

“I believe their policies were tested and they failed,” Obama said of Republicans’ commitment to tax cuts as the primary approach to boosting economic growth. “And my belief is not just based on some knee-jerk partisan reaction. It’s based on the fact we tried it.”

Rallying his supporters about his plans for a second term, Obama urged optimism: A slightly new message that perhaps gave nod to criticism from some Democrats that he had lost touch with a message of hope.

“It’s fashionable right now for people to be cynical,” he said.  “Let me tell you something, there’s no problem out there, no challenge we face that we don’t have the capacity to solve. We are Americans.

“And what’s lacking right now is our politics,” he said. “What’s lacking right now is that some of the worst impulses in our politics have been rewarded, and that’s something entirely within your power to solve.”

Copyright 2012 ABC News Radio


Obama Campaign: Romney Would Be 'Outsourcer In Chief'

Riccardo S. Savi/Getty Images(WASHINGTON) -- The Obama campaign pounced this morning on a Washington Post article claiming Bain Capital invested in companies that helped ship American jobs overseas while Mitt Romney was at the helm of the firm, calling it a “significant moment” in this campaign.

“People really have a fundamental choice in this election,” Obama campaign strategist David Axelrod told reporters on a conference call. “The question is, do they want an outsourcer-in-chief in the Oval Office or do they want a president who will fight for American jobs, American manufacturing and the American middle class.”

The president’s campaign argues the article is further proof that Romney’s business record would not translate into economic growth if he were elected president.

“This is really significant because throughout this campaign Romney has suggested that the experience that he’s had in business gives him special insights into the economy and that would translate into jobs and growth and benefits to the American worker,” Axelrod explained. “This article speaks more to the kind of experience he has, the kind of insights he may have drawn from that experience. And it goes to the fundamental question of whether that is the experience that we need in the Oval Office. Do we need the philosophy that embraces outsourcing and offshoring as a positive tool in our economy?”

In response, the Romney campaign is drawing a distinction between “outsourcing,” which can include moving jobs from one domestic firm to another, and “offshoring” jobs to another country.

“This is a fundamentally flawed story that does not differentiate between domestic outsourcing versus offshoring nor versus work done overseas to support U.S. exports,” Romney spokesperson Andrea Saul said in a statement. “Mitt Romney spent 25 years in the real world economy so he understands why jobs come and they go.  As President, he will implement policies that make it easier and more attractive for companies to create jobs here at home.  President Obama's attacks on profit and job creators make it less attractive to create jobs in the U.S.”

The Obama campaign isn’t buying that argument. “It’s very important that we look at the Governor’s true record on this issue and not be snookered, so to speak, by cosmetics as to what Bain did or didn’t do. We know what Bain did and it moved thousands and thousands of good paying American jobs off shore,” Obama surrogate Leo Hindery, managing partner of InterMedia Partner, said on the call.

“For those of us who looked at that story today, there’s a bright line between offshoring American jobs, that’s moving them outside of this country, and outsourcing them,” Hindery later added. “Bain was a company that preponderantly off-shored jobs. And even in those where it outsourced domestically, it did so into lower-cost settings at the expense of workers and their union organizers."

Copyright 2012 ABC News Radio

ABC News Radio