Results 1 to 2 of 2

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

  1. #1
    Senior Member Brian503a's Avatar
    Join Date
    May 2005
    California or ground zero of the invasion

    Wire firm a force in debate over immigration ... money.html

    Wire firm a force in debate over immigration
    Western Union builds ties with donations, publications

    Chris Hawley
    Republic Mexico City Bureau
    Mar. 19, 2006 12:00 AM

    MEXICO CITY - Every two weeks, Nayeli Toxqui pushes her baby stroller down Insurgentes Avenue, past the whizzing taxis and the wheezing buses, and joins a line of people near a yellow-and-black Western Union sign.

    "I'm picking up money from my husband in Chicago," she said one recent morning, peering at the cashier's booth dispensing money at the back of the Elektra appliance store. "I don't work, so you could say I depend on la Western."

    So do millions of other families and their migrant relatives. And in turn, Western Union depends on them, as it rides a 10-year wave of immigration to record-high profits.

    So perhaps it is no surprise that the world's biggest money-transfer company and its parent firm, First Data Corp., are quietly becoming a force in the debate over illegal immigration and border security.

    In recent years, Denver-based First Data has openly campaigned for immigration reform, which could legalize millions of undocumented workers, and has created a $10 million "Empowerment Fund" for the same purpose.

    It has held seminars on migration law, published how-to guides for migrants, sponsored English classes, given money to a charity that helps Mexican women whose husbands are in the United States, and showered immigrant-sending communities with aid.

    First Data has stepped up its political donations in recent years. It also "directly, actively" fought against Arizona's Proposition 200, a First Data official told the Mexican Senate in 2004.

    Critics accuse the company of encouraging immigrants, both legal and illegal. Supporters say the company is just trying to connect with customers, and that First Data's actions have little effect on migration.

    "The economic forces that are driving immigration were not created by First Data," said David Landsman, executive director of the National Money Transmitters Association, which represents wire-transfer companies.

    Either way, both sides admit Western Union's fate is intimately tied to immigrants and likely will become more so after First Data spins off Western Union into an independent company later this year. First Data currently makes about half of its profits from money transfers, with the rest coming from its other financial services: credit-card processing, ATM networks, and moving money between banks.

    But an independent Western Union will be entirely dependent on money transfers, and on the migrants who send them.

    "As these individuals move, and they continue to move around the globe, Western Union will continue to benefit," First Data chief executive Ric Duques told analysts in a conference call in January, according to Bloomberg News.

    First Data declined to comment for this article, but in news releases, company Web sites and speeches, its officials have touted the company's recent activism.

    Other wire-transfer companies have ramped up their migrant outreach efforts, too. But none has invested as much money and energy as First Data, or taken as direct a role in the immigration debate.

    "They do support immigration reform for instrumental reasons - or you can use a more crude word, for opportunistic reasons," said Manuel Orozco, an expert on remittances at the Inter-American Dialogue, a think tank.

    "But there is also a genuine reality: the money-transfer companies work face to face with migrants, and they understand their needs. (First Data feels) that they have to have a position on this, and it would be hypocritical to stay quiet and let things happen."

    Booming business

    When First Data acquired Western Union through a merger 11 years ago, the telegram company founded in 1851 was nearly bankrupt. Its fortunes were about to change.

    The United States was on the verge of an immigration explosion. The Mexican economy was collapsing, even as U.S. businesses were booming and needed labor.

    Soon Mexicans were flooding across the border. While the number of legal immigrants to the United States remained flat at about 650,000, the number of illegal border-crossers soared, from 450,000 annually before 1994 to 750,000 a year during the late 1990s.

    Now there are 37 million foreign-born people in the United States, including at least 11.5 million unauthorized migrants, most of them Mexican, according to the Pew Hispanic Center.

    Those migrants send a torrent of money to their families. Mexicans in the United States alone sent home some $20 billion in 2005, up from $6.6 billion just five years ago.

    The increase has been a windfall for wire-transfer companies. Western Union, which also owns the Vigo and Orlandi Valuta chains, saw its revenue nearly double from $2.3 billion in 2000 to $4.2 billion in 2005. It made $1.3 billion in profit last year.

    "Their real key to success is the immigration from Third World to Second World and First World countries. That is the ultimate secret sauce," said Kartik Mehta, an analyst with FTN Midwest Securities.

    However, new competitors are moving in. Citigroup and Wells Fargo are trying to get into the remittance business by persuading migrants to open bank accounts, and a raft of smaller companies are offering cheaper service.

    With competition heating up, wire-transfer companies are jealously guarding their client base.

    Reaching out

    To win points with customers, First Data has launched programs to help migrants and their families back home.

    The efforts include a series of immigration-law seminars called "Western Union La Ley," and a directory of immigrant resources called "Pasaporte a los Estados Unidos" (Passport to the United States).

    The company also sponsored the printing of 300,000 guides telling Salvadorans how to apply for the U.S. Temporary Protected Status program. The program gave legal residency to 248,000 migrants following two earthquakes in El Salvador in 2001.

    In 2000 the company formed the First Data Western Union Foundation, which is funded by First Data, its employees and its agents in other countries.

    The foundation has given out more than $16 million, funding everything from seminars on home buying for migrants in Broward County, Fla. to English classes at the Chicago and San Antonio campuses of the National Autonomous University of Mexico.

    It gives money to a legal aid groups and organizations like the Massachusetts-based Immigrant Learning Center, which along with running English classes, produces studies "promoting immigrants as assets to America," according to one of its reports.

    Some critics say the foundation's work is window-dressing designed to distract customers from Western Union's high rates. The company's fees are consistently higher than its competitors, according to Mexico's consumer protection agency.

    "The company is washing its face," journalist Alberto Najar wrote in Mexico's La Jornada newspaper. "Fine. But who do you think charges the most to send money from Chicago, Houston, Indianapolis, Los Angeles and New York? That's right, Western Union."

    Furthermore, some of the foundation's programs almost seem to reward migration, say some border-control advocates.

    Helping out

    In the Mexican state of Oaxaca, the foundation gave $250,000 "to provide assistance to women living alone because their husbands are working in the United States," according to a foundation news release.The money helped women build small gardens in their back yards to raise extra money, said Narcedalia Ramírez Pineda, the vice president of the AYU Foundation, which operated the program. Women were taught how to install drip-irrigation systems and raise poultry, and some of the money went toward building a greenhouse.

    "First Data was a great help," Ramírez said. "We're very satisfied with the solidarity they have shown us."

    It also has pledged $1.25 million to the Mexican government's 4x1 Program in Zacatecas state. The program provides matching funds for each peso that migrants invest in small businesses in their hometowns.

    That money, presumably, comes through wire transfers.

    Another foundation-funded program helps Mexican migrants go to U.S. universities "because they don't have the documents necessary to go to a college and pay tuition as international students," First Data's public relations director Mario Hernández said during a forum in the Mexican Senate on Nov. 10, 2004.

    The foundation made headlines by funding a 56-page booklet for migrants called "A Survival Guide for Newcomers to Colorado."

    The guide included legal tips such as, "It's not the job of the police to report you to Immigration," and listed banks where migrants could open accounts with only an ID card issued by the Mexican consulate.

    The guide infuriated border-control advocates. In a broadcast last year, CNN newsman Lou Dobbs called the guide a "how-to guide for illegal aliens."

    Soon afterward, the Colorado state government yanked the guide from one of its Web sites and replaced it with an edited version.

    Border-control groups say First Data is encouraging immigration to fatten their profits.

    "They're promoting whatever is going to enhance their bottom line, and if that means encouraging mass immigration, that's what they're going to do," said Mike McGarry, acting director of the Colorado Alliance for Immigration Reform, which has opposed First Data's advocacy efforts in its home state.

    Political power

    On March 3, 2004, First Data leaped into the debate over immigration reform.

    During a panel discussion organized by the company at the National Press Club in Washington, D.C., First Data's then-chief executive, Charlie Fote, announced the creation of a $10 million "Empowerment Fund" to push for an overhaul of U.S. immigration laws, though he gave few details of how the money would be used.

    "This is a critical issue for our country and our consumers," Fote said, according to a company statement.

    The company stopped short of calling for the legalization of undocumented migrants who already are in the United States. But it said the new policies should not be "overly burdensome to businesses or individuals," and said the educational needs of immigrant children need to be respected.

    "A new immigration policy must recognize that immigrants strengthen the U.S. economy and diversify the social fabric of our society," the company's statement said.

    Since then, First Data has held panel discussions around the country to campaign for immigration reform. The company also said it used its money to fight Arizona's Proposition 200, a measure passed in 2004 that bars illegal immigrants from receiving some state services.

    "Our company directly, actively and with financial support, supported the business, political and community groups that opposed this proposition," Hernández, the public relations director, told lawmakers during the 2004 forum at the Mexican Senate.

    First Data did not respond to a Republic request for more information about the effort.

    First Data also has stepped up its campaign donations. The company has spent $247,000 on federal elections since 2001, compared to $145,000 in the five years before that, according to the Center for Responsive Politics.

    A political action committee, First Data Employees for Responsible Government, has donated $128,000 since it was formed in 2000. And that's not counting hefty donations by individual executives. Fote and his wife, for example, gave $46,800 to 32 federal candidates between the beginning of 2000 and Fote's retirement in November.

    Most of First Data's beneficiaries are members of the Senate and House committees on banking and financial services. Much of the money also has gone directly to the Republican and Democratic parties in the form of "soft money" donations.

    Left out of the largesse: Republican Rep. Tom Tancredo, one of the most vocal immigration-control activists, who also happens to be First Data's hometown congressman. First Data, its PAC and many of its executives gave money to Joanna Conti, his Democratic opponent, in the 2004 election.

    It is unclear if the $10 million Empowerment Fund has gone into campaign donations. First Data would not give The Republic details on how that money is being spent.

    Attractive cash

    Western Union will become even more dependent on immigrants after First Data completes a planned spin off of the company this year. The spin off comes at a critical time, as state governments are beginning to take notice of the billions of dollars flowing through the wires of money-transfer companies.

    Last month, the Georgia House of Representatives passed a bill putting a 5 percent tax on wire transfers placed by undocumented immigrants. The measure would require wire-transfer clerks to check the IDs and visas of senders.

    Meanwhile, a bill in the Arizona Legislature asks voters to approve construction of a border wall funded by an 8 percent tax on wire transfers to foreign countries.

    As other states consider taxing migrants' wire transfers, other money-transfer companies could find themselves increasingly drawn into the immigration debate, Orozco said.

    "That doesn't mean to say that they are pro-illegal immigration," Orozco said. "But their position is, 'There is a double standard here, let's not be hypocritical and put the burden only on the individual (migrant) who comes in here.' "

    Reach the reporter at chris
    Support our FIGHT AGAINST illegal immigration & Amnesty by joining our E-mail Alerts at

  2. #2
    Senior Member WavTek's Avatar
    Join Date
    Jan 2006
    North Carolina
    Boycott Western Union and First Data. I just added them to my list.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts