JACKSON, Miss. — An organization suspended from bringing foreign exchange students to the U.S. was hounded in recent years by allegations of mismanagement, with complaints ranging from sexual abuse by host fathers to urging a host family to lie about company mistakes, an Associated Press review shows.
San Diego-based Pacific Intercultural Exchange, or PIE, is appealing this year's suspension from its role as one of the State Department's sponsors for the high school exchange program. The company has said it's being treated unfairly.
The State Department won't say exactly why PIE was suspended, but AP has reviewed emails, court documents and school board records that show the company has been accused of mismanagement involving dozens of teenagers in recent years.
PIE is part of a network of organizations that brings close to 30,000 high school students to the U.S. annually in a program overseen by the State Department. The program has come under increasing scrutiny, with critics saying that sponsors are more concerned about profits than the participants. The State Department says the safety of the students is its main concern and that it's working to make the program better. It wouldn't comment on PIE's appeal.
Yet emails among State Department officials reviewed by the AP, along with court documents, show a pattern of alleged oversights that one of the officials decried as "lax business practices." Two of the most serious cases involve PIE host fathers convicted of sexually abusing exchange students, with one spawning a lawsuit that accused the sponsor organization of failing to do an adequate background check.
"They're getting greedy. They're getting sloppy. And there's no room for greed or sloppiness when you're dealing with children," said Danielle Grijalva, director of the nonprofit Committee for Safety of Foreign Exchange Students.
The State Department has adopted several rules designed to safeguard students over the years, including requiring background checks, but it scrapped plans for a pilot program that would have required more thorough FBI fingerprint checks like those used by the Boy Scouts and Girl Scouts. Critics say the more thorough background checks would help identify potential host families who may abuse the students.
In one of the abuse cases, 30-year-old PIE host father Shernon James was convicted of molesting a 15-year-old Ukrainian student in 2009 at a hotel in Kissimee, Fla. James had previously been charged with, but acquitted of, possessing child pornography.
Another host father for PIE, 52-year-old Craig Steven Ley, of Beaverton, Ore., pleaded guilty in 2010 to sexually abusing a German boy. PIE didn't do an adequate background check to find out that Ley had a felony record for using another exchange student in a bogus insurance claim, according to a lawsuit filed over the case.
Another problem for PIE has been accepting more students into the program than there are host families available at the time, Grijalva said.
PIE's president, John Doty, told his staff in a 2006 email that the company narrowly dodged sanctions for cancelling "a number" of students who signed up to participate in 2005. The email also said Doty went to Washington D.C. in 2006 to meet with State Department officials because he was again faced with canceling participants, this time 113 Korean students.
PIE and other sponsors charge the students' families thousands of dollars to arrange for them to live in American households and go to school high school. The U.S. government also gives grants to students from some countries.
A number of other sponsors have been accused of violations. An agency review last year found that 15 of the 39 largest such organizations were in "regulatory noncompliance," according to State Department documents obtained by AP.
Many violations are handled with a reprimand and corrective plan, but it's unusual for a company as big as PIE to be suspended. The suspension affected a more than 455 students from 18 countries for this school year.
Officials in Louisiana were so alarmed by the living conditions of PIE students that in 2010 the Vermillion Parish School Board banned the company from placing students in the district. A teacher took in one of the students because the teen was being mistreated by the host family, according to Superintendent Randy Schexnayder.
"The whole family was utilizing the student to do their house work," Schexnayder told AP. "I don't think they properly screened the host families."
The company has declined to discuss these and other allegations, some of which are contained in emails among high-ranking State Department officials and court documents reviewed by AP.
Among the allegations investigated by State Department officials, according to the emails, were accusations that PIE tried to falsify records in 2010 to conceal the fact that the company brought a 17-year-old girl from Kazakhstan to Maryland without having her registered for school. The students are supposed to be registered for school before coming to the U.S. The girl ended up going home disappointed and distraught.
Doty, PIE's president, and a regional manager, Patricia Littrell, asked the host family to lie about the school arrangements in order to cover up their mistake, according to the host mother, Peg Marose. The girl was not allowed into the public school because she missed the registration deadline. Marose said Littrell wanted her to "back date" documents.
Littrell and Doty didn't respond to messages, and PIE's attorney said company officials could not comment at this time.
Stanley Colvin, a deputy assistant secretary for the State Department involved in exchange programs, wrote a highly critical email on Sept. 1, 2010, that referenced the Maryland case.
"Given the attempt to fabricate documents and its failure to secure a school placement, and other regulatory violations and lax business practices, my staff no longer considers PIE to be a reputable organization with whom the department should be doing business," Colvin told other State Department officials in the email.
The State Department considered revoking PIE's sponsor designation effective May 2011, but ended up putting the company on probation and reducing the number of students it could sponsor. The company was told in June of this year that the State Department was taking immediate action and was suspended, the agency has said. The State Department won't elaborate on the reasons for the suspension other than to say PIE violated program rules.
The company has complained that the State Department is treating it unfairly.
"We stand behind the quality of the program that we have provided for nearly four decades and do not believe that this action by the Department of State is warranted," PIE said in July in a letter to staff members and host families.
PIE generated nearly $3.5 million from October 2009 to September 2010, according to a 2011 IRS filing required of nonprofit organizations. About $1.26 million was from government contributions or grants, but the majority of the company's money, about $2.26 million, came from its foreign program fees, according to the document. The company's website says it has facilitated exchanges for more than 25,000 high school students since the 1970s.