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Flawed immigration laws
pose risks to everyone
Stolen Social Security numbers used to get jobs
PETER ST. ONGE AND TIM FUNK
pstonge@charlotteobserver.com | tfunk@charlotteobserver.com


For two decades, Congress has neglected to fix failed immigration legislation, leaving the U.S. with a maze of contradictory laws that discourage immigrants from coming, yet encourage them to stay.

It is a 20-year story of missed opportunities and weak political will. The result is an estimated 12 million illegal immigrants in the U.S. today -- including 390,000 in North Carolina and 55,000 in South Carolina.

They are here, in part, because of laws that call for U.S. borders to be patrolled but allow U.S. employers to hire illegal workers with hardly a look at the paperwork they provide.
Some consequences, to be reported in a three-day Observer series:

• Illegal workers have received taxpayer money to help build N.C. roads, with neither the federal government nor state agencies requiring contractors to verify workers' documents.

• The IRS and Social Security Administration know of possibly millions of cases in which illegal workers use someone else's Social Security number to get a job -- but they don't let you know if it's your number being used and don't use that information to crack down on the workers.

• The IRS and SSA also don't act upon information that tells them which employers are the most egregious in submitting fraudulent Social Security wage reports -- including one company that used the same Social Security number for 2,580 worker reports.

• Local enforcement officials say they arrest an average of one document counterfeiter every three weeks, and they say there could be hundreds of counterfeit operations in the Charlotte region -- some selling Social Security numbers for as little as $30.

All of which was supposed to be prevented in fall 1986, when House and Senate leaders revived a fragile immigration package just days before Congress adjourned.

The Immigrant Reform and Control Act was historic legislation, supporters said, a responsible mix of open arms and closed doors. Signed quickly by President Ronald Reagan, the law tightened border security while legalizing 3 million undocumented immigrants already in the United States.

It was, the bill's sponsor believed, the last amnesty this country would need.

Now, Congress is again confronting an immigration system most everyone thinks is flawed -- from Latino advocates who point to decade-long waits to legally enter the U.S., to businesses that point to jobs needing to be filled, to citizens who chafe at the financial strain immigrants put on public schools and social services.

Except now, 20 years have been added to immigration's issues -- two decades of accumulated impatience that is fueling a debate as raw and divisive as ever.

Three weeks ago, legal and illegal immigrants boldly marched in cities across the Carolinas, carrying signs and chanting "Sí se puede" ("We can do it"). Two days later, at a Winston-Salem government office, Rep. Mark Souder, R-Ind., led a public hearing on immigration issues. Its title: "Gangs, Fraud and Sexual Predators: Struggling with the Consequences of Illegal Immigration."

Said Howard Coble, R-N.C.: "For the past several years, we've been ignoring the issue, hoping it will get better.

"Now, we have to deal with it."

1986: A large loophole created

As a young lawyer in Park County, Wyo., Alan Simpson watched as federal agents rounded up people who looked Mexican beginning in the 1950s as part of a raid called "Operation Wetback." Simpson represented some of the arrested illegal immigrants. The employers, he said, "went their merry way."By 1986, Simpson was chairman of the Senate's subcommittee on immigration and refugee policy, and he co-authored the 1986 Immigration Reform and Control Act -- the first law to punish employers for hiring illegal immigrants.

He was proud, and is now, that the legislation was the first to penalize employers and not just the illegal immigrants they hired. He was proud of the amnesty that allowed longtime and trouble-free workers to stop fearing the next knock at the door.

"I am very proud of the fact that we brought 2.9 million out of the dark," Simpson said.

Along with border security, the law's primary aim was to dry up jobs for illegal immigrants by penalizing employers who hired them. But like most legislation, IRCA was the product of strategic weakening, as compromises softened those employer sanctions to appease business and Latino advocates.

Also removed from the bill was anything resembling a federal ID system, which immigration groups blasted as discriminatory and civil liberties groups characterized as invasive.

Said one Kentucky representative then of the finished product: "It's the least imperfect bill on the horizon."

To some, IRCA's most significant flaw was an element that hardly had been debated: Employers were required to ask job applicants for documentation proving their legality, but employers did not have to verify that the documents were legitimate.

"In the end, that's how (employers) shield themselves," said immigration lawyer Linda Monsaur. "They hide behind: `Well, we didn't know the Social Security number was fake. It's not our job to check the validity of the Social Security number.' "

That loophole also prompted a cottage industry of fraudulent Social Security numbers, which soon poured into the Social Security Administration as employers sent in annual W2 wage reports. The reports allow the government to track workers' career earnings, which are used to calculate retirement and disability benefits.

The reports also provided a ready-made registry of potential illegal workers, but agencies haven't acted on the information they have.

Instead, Social Security sets aside wage reports that contain names and numbers that don't match its master files. Created in the 1930s, the Earnings Suspense File contains 255 million wage reports that are inaccurate due to mistakes and misuse of Social Security numbers by immigrants and others.

The file ballooned during the 1990s as illegal immigrants poured into the United States, and it represents about $520 billion in earnings paid to workers.

Taxes paid on those earnings help pay Social Security and Medicare benefits.

"They're filling our coffers," said Vincent Gawronski, an immigration expert and political science professor at Birmingham-Southern College. "It's all about the money. The government doesn't want to stop that flow. (Illegal workers) are paying into the system, not drawing down on it."

Unauthorized workers are driving the growth of the suspense file -- which provides a boon for the government because illegal immigrants pay taxes on their earnings but can't, by law, later claim benefits.

Officials say they are trying to reduce the suspense file by helping employers collect accurate information from workers. Social Security offers free verification services for companies striving to help ensure that numbers match the workers. Officials also have pleaded with Congress for help, including earlier this year, when SSA Inspector General Patrick O'Carroll placed the blame for immigration issues bluntly at the doorstep of the Internal Revenue Service.

O'Carroll said the IRS declines to sanction employers who hire workers that are clearly undocumented, and that the SSA is forbidden from sharing information on illegal immigrants with employers and other agencies, such as Homeland Security.

"The information is at our fingertips," O'Carroll told the House Ways and Means Committee in February. "We can identify the most egregious employers with respect to wage reporting irregularities, but no action is taken against them by the IRS."

In turn, IRS officials say a study of those employers showed that most could say they didn't knowingly violate hiring laws -- a claim difficult to disprove given that employers are asked to do little under current law to verify worker documents.

Pursuing those employers would yield little in significant penalties, IRS commissioner Mark Everson told Congress in February. Such an enforcement effort might also frighten companies and employees into doing more business underground. "At least now," Everson said, "we are collecting some taxes in these areas, and we are working to collect more."

But this week, in the wake of a new wave of workplace raids, Homeland Security Secretary Michael Chertoff said he would like his agency to have access to IRS and SSA wage reports, which include names and addresses of invalid users of Social Security numbers. That authority, as well as other changes in immigration law, can only come through Congress.

1990s: Weak political will

In the first two weeks of May 1998 -- the heart of the $70 million Vidalia onion harvest in Georgia -- dozens of federal officers descended on the southeast corner of the state in a hunt for illegal immigrants. The scene was chaotic, with workers scattering from the onion fields, farmers demanding the gun-carrying INS agents get off their land.

Quickly, word of the raids spread to nearby onion farms, and migrant workers began to depart in groups, leaving growers with onions that might soon spoil in the spring sun. The farmers' complaints quickly reached the Georgia congressional delegation, which promptly confronted the INS and sent letters to the secretaries of labor and agriculture.

The result: an unprecedented handshake agreement in which the INS said it would look the other way, temporarily, if the growers would follow immigration law in the future.

The compromise is widely seen as a turning point in immigration, a moment when the INS threw up its hands and stopped aggressively enforcing hiring laws. "The opposition to enforcement was so great that it changed the direction the INS took," said Gordon Hanson, immigrant expert and economics professor at the University of California-San Diego.

Said Doris Meissner, INS commissioner from 1993 to 2000: "Those things affect an agency's morale. You go out of your way to make it work, then it comes to nothing. Very demoralizing."

The onion raids also illustrated the radioactivity of the immigration debate -- and how political will can dissolve when legislators find themselves facing business constituents who want plentiful and inexpensive labor.

"This is an issue where there is no way to pass anything comprehensive without really making somebody mad," said Sen. Lindsey Graham, R-S.C. "And politicians love not making people mad."

That sentiment was evident throughout the 1990s, as Congress tried to grapple with an out-of-control immigration system. Its best opportunity for change came in 1996, when legislators were armed with a new solution -- a bill including a federal pilot program that required employers to place a simple, toll-free phone call to verify driver's licenses.

But Republican leaders knew a new bill would pass only with the blessing of small business -- and that any support would vanish if any employers were required to verify that their potentially illegal employees were, in fact, illegal.

When that 1996 Illegal Immigration Reform and Immigrant Responsibility Act went to the floor for vote, it included a late change: The pilot verification program would not be mandatory for employers. The bill passed easily.

Former business lobbyist Grover Norquist, a force behind the verification weakening, said: "The idea was that our job is to enforce the present rules that don't work -- rather than change the rules."

U.S. immigration rules don't allow enough people to enter the country to meet job demands, he said. And so "if the door is too small, everybody is coming in through the windows, and nobody gets their IDs checked. Make the door bigger."

In Georgia, Republican Rep. Jack Kingston understands why business is averse to tighter immigration rules. "Employers in roofing and poultry and other areas will say, `Immigrants will work longer and harder,' " he said. Still, he has moved from being one of the 1998 defenders of the onion growers -- "For us, it was just constituent work," he said -- to becoming an outspoken proponent of get-tough immigrant proposals.

Legislative inactivity, he said, has led to rising anger in local communities everywhere as immigrants seek treatment in emergency rooms and send their children to public schools. Now, he said he believes businesses should be required to verify an employee's legal status. He also is in favor of harsher penalties for employers who violate immigration laws.

He doesn't, however, think such sanctions will be part of any new bill.

"The business lobby," he said, "is too strong."

2006: A new opportunity

Tino Hernandez remembers IRCA, 20 years ago. He was living near Los Angeles then with his wife, Esperanza, and working in a factory that made hot tubs. He gladly took advantage of IRCA's amnesty provision; without it, he would not have been able to take out a loan and open a grocery when he moved to Charlotte in the 1990s.

Today he has four stores, three bakeries and a new distribution warehouse on The Plaza.

"Latinos are bringing a lot of good things here," he said. "Charlotte has grown so much in the last six or seven years, and the Latino community helps fertilize the economy."

This week, Congress returns from a two-week spring break to again decide the future of that business relationship. On the table now are some familiar provisions: a guest-worker program, tougher measures for business, and a plan to grant legal status to immigrants who can show they've been in the U.S. for five years and are learning English.

North Carolina's Coble, who voted last fall for a harsher House bill that made illegal entry a felony, now says economic reality calls for some type of guest-worker program. "Cafe owners in my district tell me, `If we lost our Mexican help, we'd have to close our doors,' ' he said. "Some tobacco farmers in my district have told me the same thing."

South Carolina's Graham similarly said it's unrealistic to declare 12 million illegal immigrants felons. Those already here have been absorbed into the U.S. economy, he said, and they've become part of the social fabric of the Carolinas.

In Walhalla, S.C., site of a headline-grabbing INS raid of a pillow factory in 1989, about one in four students is Hispanic. "Probably 99 percent of the peach picking is done by immigrants," Graham said. "In Saluda (S.C.), 75 percent to 80 percent of those plucking the chickens are Hispanics."

And if you advertised for American workers to do those jobs?

"The peaches would rot and the chickens would smell bad," he said.

Still, Graham and others are parting with some business lobbyists and supporting mandatory employer verification of workers' legal status, a concept that thus far is a part of every congressional bill. Graham would like to nudge verification a step further with the creation of a tamper-proof employee ID card that would read fingerprints or an eye's retina.

"If I had suggested that (in 1986), they would have burned my house down," said Wyoming senator Simpson. "Now, it's a different time... We had 9-11, and 11 million (illegal immigrants) are here."

The current Senate and House immigration bills call for a new national electronic verification system. It would require employers to check a federal database for Social Security numbers -- a move endorsed by the U.S. Chamber of Commerce.

Another difference, legislators say, is that technology makes employee verification easier -- closing the biggest loophole left from the 1986 law. Will it stunt immigration? "As with IRCA, it'll matter for at least a while," said Hanson, the San Diego professor.

But immigration has a way of finding loopholes, he said. As long as there are jobs here and poor economies in countries south of us, illegal immigration will be a force difficult to stop.

At his new Charlotte warehouse, Tino Martinez nods at this.

"They will find a way," he said. "It doesn't matter if they build walls. They will find a way to come over here."


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