Surro Connections was once a reputable surrogacy agency that operated out of Camas, Washington. The company helped match surrogates with prospective parents and facilitated communication and payments between them.
But the agency abruptly closed late last year, leaving clients without access to the tens of thousands of dollars needed to pay the surrogates carrying their children. The whereabouts of the company’s founder, Megan Hall-Greenberg, are unknown.
Investigative health care reporter Sarah Kliff talked to clients, surrogates and former employees of Surro Connections for the New York Times. She joins us with more details about the closure and the largely unregulated surrogacy industry in the U.S.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. Surro Connections was once a well-respected surrogacy agency that operated out of Camas, Washington. The company helped match surrogates with prospective parents, and then facilitated communications and payments between the two parties. Then the agency abruptly closed late last year, leaving clients without access to the tens of thousands of dollars needed to pay the surrogates carrying their children.
Sarah Kliff is an investigative health care reporter for The New York Times. She talked to clients, surrogates and former employees of Surro Connections. She just joined us now to talk about this story and what it says about the broader surrogacy industry in the U.S. It’s great to have you on Think Out Loud.
Sarah Kliff: Yeah, thanks for having me.
Miller: Can you give us the basics of how the surrogacy process usually works?
Kliff: Usually these are cases where you have an individual or a couple who wants to have children, but for various reasons – sometimes it’s a male same-sex couple, sometimes it’s a heterosexual couple that struggled with infertility – they seek a surrogate to carry the pregnancy. So typically what will happen is embryos will be created either using donated material or their own materials. And then they will work with a surrogacy agency who essentially connects them with a woman who is going to carry that pregnancy, make sure the bills are going to get paid, make sure that the person is healthy enough to carry the pregnancy. This agency essentially plays a coordinating role both in matching a surrogate with the family and in making sure that everything goes smoothly for the term of the pregnancy.
Miller: What are the costs that are involved in surrogacy, just in terms of ballpark figures, and what does that money go towards?
Kliff: It can vary, but I’d think of a ballpark of about $100,000 to $200,000. Some of that is going to IVF, the process of making those embryos that the surrogate will carry. Some of it is going to the agency, which typically charges a coordinating fee, about $20,000 or so. And then the rest of it is going to the surrogate and to her medical care. Typically, private health insurance does not cover a surrogate pregnancy. So if this person has health insurance at work, that’s not going to cover the costs of having a baby. So the costs are going towards paying those medical bills and they are going to compensate the surrogate who often gets a monthly payment, basically a paycheck for their work carrying the pregnancy.
Miller: What was Surro Connections’ reputation before this last December?
Kliff: It was strong. I talked to a number of clients who said they were attracted to it because it had been in business for over a decade. Its founder was involved with some nonprofits in the surrogacy world. And they also really liked that it wasn’t one of the largest agencies, that it seemed to have a good track record, but it was also more medium sized, which meant they might be getting a bit of a more personal touch in this pretty intense, pretty emotional journey. A lot of people I talked to spoke to me about Megan Hall-Greenberg, the founder, who they found very personable, very warm. She seemed to really care about the journey they’re going on to have a baby. So it was that combination of warm and personable, with respectable and good track record that seemed to draw a lot of clients to Surro Connections.
Miller: What are best practices in terms of the way surrogacy agencies are expected to operate?
Kliff: A few key best practices. One is that somebody else should be holding on to this large amount of money, the $100,000 to $200,000 that we just talked about. That there should be some kind of third party escrow who essentially is taking care of paying the bills, looking at the claims the surrogate is sending in, making sure they’re legitimate and sending them out. The idea there is to make sure that there is an uninterested third party with no conflicts, no connection to the surrogate, to the family, to the agency whose only job is to make sure that the bills get paid. That’s a really important best practice.
Another for the agency is carrying insurance. These companies often have a decent amount of money flowing in and out, and that they should have enough insurance to cover those funds if something were to go awry. Those are two that I think became relevant in this particular case.
Miller: So, in what way? What was Surro doing that went against these best practices?
Kliff: Yeah, so the biggest one was they were not working with a third party escrow company. They were convincing clients to park all that money with Surro Connections. And I reviewed multiple text message exchanges, emails where clients would ask, “Hey, should we work with an escrow company?” And Megan, the company’s founder, would discourage them from doing so. She would say, “Those companies charge high fees. It’ll be administratively easier if you just leave it with me. Sometimes they’re slow to pay the bills.”
The clients I talked to thought that they were doing something called in-house escrow. I haven’t been entirely clear on what exactly that was supposed to be, but they did expect that their money was in these secure, individualized accounts. What I was able to piece together afterwards was that was not the case, that multiple clients were wiring funds to the exact same account where they were likely commingled. And what we saw happen with the collapse of this company last month is that they were not being held securely. They were being spent elsewhere, we’re not sure exactly where.
And that leads to the second best practice that wasn’t followed: Surro Connections did not carry enough insurance to cover all the money that it was holding. Clients who had asked about this would often get responses from Megan saying, “Yes, we carry insurance, everything’s above board.” And while it is true they did carry some insurance, it only went up to about $100,000, while the company likely had millions of dollars under its management.
So those are two ways these kind of went awry. The money being held in-house coupled with the low insurance essentially left all these clients without money they had been planning to use to have a baby.
Miller: What have you been able to piece together about how all this eventually just exploded?
Kliff: It’s still a bit of a mystery. There’s still elements we don’t know like where this money is. But what did happen was, a little bit after Thanksgiving, around the beginning of December, some of the surrogates realized that they hadn’t gotten their regular monthly payments. These would usually show up the first of the month. They would start telling their families that they’re working with, “Hey, the payment didn’t show up.” Those families then, in turn, went to their contacts at Surro and said, “Hey, can you see what’s going on?”
Many of the employees of Surro Connections suddenly found that the founder and president, Megan, was completely unreachable. And after that, it kind of snowballed a little bit. Access to the accounts were shut off. Megan’s social media disappeared. And over that first week in December, she essentially became unreachable. Many clients had a realization over three or four days that this money was lost and they were not getting it back, and they had to make new arrangements with their surrogates.
In many cases, in most cases, the clients were holding tens of thousands of dollars with Surro Connections. The amounts I found in my reporting ranged from about $20,000, up to one couple who had $80,000 sitting with Surro. And then they got official notice, I believe it was December 5, that the company was closing, that it could not repay the money that it had and they were essentially out of business.
Miller: And in one case, one family that was expecting to have a baby delivered at some point in the coming weeks or months, they lost $80,000?
Kliff: Yeah, this was a couple from Europe. Compensated surrogacy is not legal in most parts of Western Europe, so many European couples come to the U.S. to do surrogacy. And they have a surrogate who at the time was about halfway through a pregnancy. They said they really had to scramble. Their most important guidestar was making sure that their surrogate continued to get paid. So they were talking to their parents to lend them money, looking for how to find the money. But obviously, an $80,000 hole in your budget is not something you can fill overnight. They were pretty devastated and just shocked that this could happen.
Miller: Did the employees that you were able to talk to after the fact say, oh yeah, I guess things were weird, or did they say that they too, were blindsided?
Kliff: It was a bit of both. I think there were things that they had chalked up to disorganization. Things like sometimes a surrogate would send in a bill for a prenatal care appointment and it would be really slow to get it reimbursed, or sometimes some of these monthly payments would be a little late. And they found that frustrating, but figured what the babies are being born, the surrogates are eventually being paid.
Up until November, things seem to have their snags here and there. No one I talked to expected this to happen or expected a sudden shutdown of the company. So hindsight being 20/20, they now were able to identify some warning signs, but nothing … It felt to them very immediate, the closure of the company.
Miller: Is this situation unique to Surro or has it happened to other surrogacy firms?
Kliff: There have been a handful of somewhat high-profile collapses of surrogacy firms or surrogacy-related businesses. About a year ago, there was a company that held itself out as a surrogacy escrow, the company who says, “We’ll keep your money safe, we’ll be the third party.” This was a Dallas-based company that collapsed in a very similar way to Surro. Again, the money, according to a complaint that was filed by some of the clients afterwards, apparently the owner of the company, they allege spent that money on a burgeoning career as a rap artist.
So the coupling of those two, I think it really calls attention to the fact that the United States does have one of the larger compensated surrogacy industries, but it is not especially well regulated. It is really hard for families to tell who is trustworthy and who isn’t. And the rules that folks have to follow are not quite as strong as I think some of the clients and the surrogates involved in the space would like them to be.
Miller: Is it clear where the founder Megan Hall-Greenberg is today?
Kliff: No, I saw a local news outlet did report some law enforcement activity outside her house in late December. But no, it is not clear where she is today. It is not clear what happened to all this money that clients had sent her that was meant to cover their pregnancies. So there are still a lot of unanswered questions in this one.
Miller: We just have about a minute left, but what have you heard from prospective parents and surrogates about what this has been like for them?
Kliff: It’s been really difficult. I mean, some of them describe feeling like they were living through a Netflix special where all of a sudden the money disappears and things collapse. A lot of them described the really difficult two emotions they were holding at once: one, joy and excitement for the baby that they’re about to have, the baby they tried to have for so long, and then this just frustration and I think a shocking lack of trust. If I couldn’t trust this person who seems so invested in me and my baby and my family, who can I trust?
Miller: Sarah, thanks very much.
Kliff: Thanks for having me.
Miller: Sarah Kliff is an investigative health care reporter for The New York Times. She wrote a recent article about the abrupt closure of the Portland area surrogacy company Surro Connections.
“Think Out Loud®” broadcasts live at noon every day and rebroadcasts at 8 p.m.
If you’d like to comment on any of the topics in this show or suggest a topic of your own, please get in touch with us on Facebook, send an email to thinkoutloud@opb.org, or you can leave a voicemail for us at 503-293-1983.
