ARCHIVE VIDEO: Shame of Saipan, an Investigation

May 24, 1999: ABC News’ Brian Ross investigates Saipan sex trade.
3:00 | 06/10/16

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Transcript for ARCHIVE VIDEO: Shame of Saipan, an Investigation
Tonight a 20/20 investigation into a shameful violation of human rights on American soil. The US territory of Saipan an island in the Pacific. In Washington today human rights activists asked the attorney general to investigate allegations first raised in an award winning report. By our chief investigative correspondent Brian Ross. Allegations that some young Asian women has become virtual indentured servants on the island. Will now Brian Ross has gone back to Saipan for a new investigation into charges that things have gotten even worse. This time he has found evidence that some young women are being lowered and decide hands thriving sex trade. And forced into onstage sex acts and prostitution. As you watch our investigation you may ask yourself could sampling like this really be happening on American soil. These are under cover picture made by the human rights group global survival network. Of a business proposition on the American island of Saipan. Sixty dollars for an hour of the sob. With one of the thousands of young women from across Asia. Who under a loophole in American immigration law have been legally brought to work on American soil Saipan. Most of these women were told that they were coming to work as waitresses and restaurants are nightclubs. Once they got there they were told that they had to do more than that. Steve Johnston is the executive director of global survival network and the man who wore the hidden camera in Saipan we're not talking about prostitution here we're talking about forced prostitution. In fact this beautiful American island in the middle of the Pacific where thousands of American soldiers died in World War II. That's come to be known by many as a place of broken promises. According to congressman George Miller. These people are working. Under the protection of the American flag and being exploited as if they weren't the worst Third World country. It's part of the system that was set up on site and primarily to provide thousands of foreign workers for the Ireland's notorious garment factories. Truck loads of young women from China and the Philippines who have actually paid thousands of dollars. An entire family's life savings for what they are told will be good jobs in America. The minute they get off the plane. They'd they'd realize they've been tricked. And there with would now there without any rights. But to work under often grueling conditions the women are not free to change jobs because of the Saipan loop while. It's something that would not be legal on the mainland. But under the same loophole in the law a growing number of the women are being brought in to stay outside fans will mean marathon history. CD sleazy place of nightclubs and karaoke bars. Customers range from wealthy Japanese businessmen to American sailors to local government officials. Palestinians and the government. Once there was a customer than that my breast. But the boss told us the customer is always right and many of them women who work here are only teenagers. Many under age like Katrina not her real name who was fourteen when she was recruited from the Philippine. Yeah that he will. It was my first time to dance naked at night with its name. Katrina told federal investigators that she signed this officials Saipan government affidavit. Thinking she was going to be a waitress and ended up forced into live sex acts on stage it would. Any stake cursing me and threatened to take off my clothes so I was afraid and I took enough instead. And federal authorities say even those not forced into sex are still exploited. Usually kept in labor barracks delivered on most of the club's seven nights a week. And often required to sign labor contracts that say they could be fired and sent home doomed to poverty. If they are not obedient or make trouble or failed to respect the owner or his VIP guests. I'm not happy able an appropriate. Even the governor of Saipan paid boats and Oreo admits what's happening is a huge embarrassment while at the same time defending the system used to recruit the women. If you looked as soon as I it's not a matter is I it's legal for them to work the crop but not to the extent of you know. Force integrated and other than what is in what is hidden in the country. Yet that happens I don't you know that I don't know you don't. No ever brought that to your attention now. You've never heard that these women are broad and forced into prostitution I'm aware of that. It's. On the way if you are over in should. And that very night we saw even bore for the governor to be embarrassed about. A man with two young barber who said he was a top police official became upset when he saw our cameras saw. Look at pictures what. He said he was conducting his own investigation. And in short order uniformed officers showed up to stop articulate. They are not life that. When we refused to stop. One officer then threatened to arrest 20/20 producer Rhonda Schwartz saying she had illegally parked and could be considered a flight that's. My question is why are you know in front. Why wasn't. Local and I voted. And then one of the nightclub owner showed up. Insisting he had a high class clientele. Including important government officials he wanted us to see for ourselves. And sure enough among the customers in a black and white shirt was a man identified to us as that governor's son. The head of the island's tourism office entertaining a delegation of Japanese government officials. Hiding his head the governor's son fled the scene and neither he nor his father have had anything else to say about them that. Clearly you have a situation where business and government have come together. And and really promoted. The exploitation. Of foreign workers workers were brought to Saipan. And congressman Miller says the concern involves not only the nightclubs and sex shops but also although sweatshops in the much bigger garment industry. Which just 20/20 found last year include many places of blocked fire exits overheated electrical panels toilets that don't work. What authorities called a flagrant violations of US labor and safety laws. Brian Ross on news right right. And not surprisingly when we came back this year to follow up factories were not very happy the cius. Really commend. One place went so far as to padlock the front door factory full of women working well after midnight. Then blocked our view and the main exit for the workers and finally turned off the lights. The sorry you blocked the when those in turn off the lights all the workers are still inside yes. It now the situation here has led to a novel legal approach. Up billion dollar lawsuit not just against the factories but also against the American designers and retailers who do business with them. The lawsuit alleges that Saipan is America's biggest workshop. Led by veteran attorney Al Meyer off human rights groups and labor unions have filed suit on behalf of Saipan garment workers. They mean some of the biggest names in American fashion. That's our position. Companies like the gap and Tommy Hilfiger and Wal-Mart. They have profited in the hundreds of millions of dollars from the site pants workshops. In statement to 20/20 the gap and Wal-Mart say they try to monitor the factories they use on Saipan and won't tolerate sweatshop conditions. But American retailers have long been drawn to sights and because it is an American territory. We're close can legally be labeled with some version of made in the USA. Even though almost all of the workers are for working in foreign owned factories. Since the scandal it's illegal style. But at the Saipan Statehouse the newly elected governor to Noory who had promised last year to crack down if he found any sweatshops dismissed the lawsuit as. Unnecessary. When was the last time that you as governor are inside one of these factories are one of these parents. Very amicable and not the decent thing to be on its if you make a point not to visit not to dissident. But my why would you want to see for yourself what's going on inside because I thought and that they have to do what they're supposed to do and meet the requirement of mineral otherwise the and why would you make a point. Deliberately not looking inside nor I will say I've grown but I wanna blaze had their barracks anything. That's what the problems are you drive by at lowest no obvious. But even the governor would have had a hard time avoiding the latest outrage in Saipan. More than a thousand workers made sick by suspected food poisoning. At one of the biggest and supposedly best run factories on the island. Owned by the politically prominent Willie tan. A lawyer for tan said the factory is well run and no sweat shop. And suggested to Saipan TV station KE NCV that it might be sabotaged. Somehow connected to the lawsuit. Are we haven't been Paulson. Seven. But federal officials say tens factory has a history of problems including the contamination of water use for drinking and cooking. And tense factory is named in the billion dollar lawsuit because of the work it does for Tommy Hilfiger and other well known American retailers. The vacations of people becoming ill workers fanning. Food poisoning and drinking water contamination. Well document. These are sweatshops plain and simple and you say the Tommy Hilfiger he's in New York. Should know what's going on half a world away the allegation of the complaint is that Tommy Hilfiger is of the world either know or should know. That the violations of human rights and Saipan are occurring in the production of their clothing lines. Bill further as one of the hottest names in the American fashion industry. And he made a big splash at this year's Fashion Week in New York. But when we ask Hilfiger about the clothes he makes on Saipan. He didn't seem to know much about I think it's absurd that. Keeping missions in the England rural letter or not. Of it's. Having said that they are you doing even at night we had we are doing a lot of such access. To take my. Since then Hilfiger has lawyers have sent 20/20 this statement that no new orders will be given to factories in Saipan for the indefinite future although current production continues. But it's not just Tommy Hilfiger the same factory where the workers became ill produces even more clothes for the horrible line of Ralph Lauren. Which told 20/20 last year it would investigate conditions but has continued production. This year Ralph Lauren who is president of the company said he didn't want to talk about the garment factories on Saipan it's your name that is being used. I think she is sure he used properly. If you're good you're satisfied with what's happening there out. I think just finished my show and we appreciate it shouldn't happen. Lauren is not named in the lawsuit but in a statement later sent to 220. His company said it had for several years been taking action to improve worker conditions in Saipan. But would not specify what the action watts. Congress could fix this. That quickly all we have to say is that the immigration laws in the labor laws of the United States of America applying to Saipan. And yet congressman Miller says his efforts to do that. That have been blocked by one of the most powerful people in congress the majority went from. Number three Republican in the house Tom DeLay. Delay and members of the staff took a Christmas holiday trip to Saipan in 1997. Toured select garment factories and barracks and then praise the island. And you represent everything that is good about what we're pregnant due in America. In fact when Steve Elster of global survival network went undercover posing as a garment executive he heard all about congressman delay from the Mr. Big of Saipan garment manufacturers. This man Willie tan. Tan who owns the factory where the workers became ill. Claims he is close to delay and boasted of the assurances he said the congressman had given him that the proposed laws on Saipan would be killed. Because of that it will never let go. Assure you know what Koppel. Two deeply connected it. I think this is about us. What mistake. So topple forget. Who can finish us. What's person for delays says it's no secret he opposes the legislation. Lawyer pretend says Dan was just exaggerating. To impress a man he thought was a potential customer. But congressman Miller says the tape provides a rare insight into the behind the scenes fight against reform on Saipan makes me very merry. You know that's not what. The congress in this case spoke almost view. So the bottom line it is despite the promises to investigate and the calls for reform it seems little has changed on Saipan. And when the sun goes down on this American territory another shift of foreign workers brought to this country under the same legal loophole reports for duty. And another kind of thriving grim business. Make sure Sheen makes you bearish. The Justice Department tells Tony twenty that it has now begun a broad investigation into the allegations of sexual slavery onside fan. To assert once and for role that American law does apply. On the island.

This transcript has been automatically generated and may not be 100% accurate.

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