Wednesday, July 26, 2006

Commerce Department Releases Oppressed Offshoring Study

The Commerce Department has finally released an offshoring study that it originally refused to release publicly. FOIA petitions were even denied and now career researchers are being layed off as reward for releasing non-biased research on the matter.

The Commerce Department's Office of Technology Policy (OTP), while under the last president Phil Bond, refused to release the report and instead released a 12 page executive summary that even the report's researchers dispute the accuracy of.

This summary glossed over the problems of offshoring and focused on the positive things. Phil Bond has since become the President of the ITAA - an now works for the largest IT lobbyist firm in the United States. That is his reward for betraying American technology workers and pushing his political agenda while heading the Office of Technology Policy.

According to Professor Norman Matloff in his newsletter:

Through both the Clinton and Bush administrations, the Dept. of Commercehas been remarkably even-handed in issues relating the the industry'sclaims of a tech labor shortage, and the offshoring issue. Remarkably, this is largely due to two career researchers in DOC, and their principled insistence on doing objective analyses. Even more remarkably, their political appointee bosses have usually stood by them,albeit with occasional blips. You can read the history of this at

According to

The 360-page version of the report describes the types of IT services and software jobs that are being outsourced. It states the obvious: that Indian outsourcing companies "are expanding staff annually by the thousands." The report describes the reasons for the trend including the fact that "venture capitalists are now encouraging U.S. IT start-ups to use lower-cost offshore destinations for software development to reduce the 'cash burn rate.' "

That document is quite different from the original 12-page summary, and it is apparent why Bush's political appointees so vehemently refused its release. The administration "was scared of anything having to do with outsourcing," says one source who is familiar with the report's travails. The Bush team "could not afford even a discussion" of the outsourcing issue.

"The report speaks for itself," said Ben Wu, who was in charge of the report's demise while at the Commerce Department's Technology Administration. Wu now works in the state of Maryland's economic development organization. Phil Bond, who was in charge of the Technology Administration at the time, said he had nothing to do with re-writing the report. He has since been named president and CEO of the Information Technology Association of America (ITAA), an organization that took the lead in Washington in defending the practice of offshore outsourcing of IT jobs.

I am forced to call a spade a spade. This is none other than corruption at the highest levels of our government. The OTP has been infiltrated by corporate lobbyists and even worse will be firing the career DOC researchers responsible for reporting the facts:

"what was produced and provided by the Commerce Department in September 2005 was a 12-page document bearing a July 2004 publication date that bore little resemblance to the work done by analysts at the Technology Administration, all of whom have recently been told they will be laid off due to severe budget cuts for the agency and the issuance of a reduction in force (RIF)." (

We must demand an investigation into this matter. These honest career researchers should not lose their jobs because of corruption. More on this as news unfolds.


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