Politics & Policy

Fast Feuds

Conservatives who assume that business opponents of state immigration enforcement laws are scofflaws should listen more carefully.

Marion “Mac” Magruder and Jason LeVecke are mainstays of the conservative movement in Arizona. Both are restaurateurs. LeVecke operates 130 branches of Carl’s Jr. Until recently, Magruder ran the state’s McDonald’s franchise.

Jason, a former Marine, is a classic Arizona Republican: an economic libertarian, a national-security hawk. LeVecke is the principal underwriter of a new tax-limitation effort. Arizona’s Proposition 105 — dubbed “Majority Rules” — would require tax-increase referenda to win the electoral assent of a majority of all registered Arizona voters. In a normal-turnout election, that’s an 80-plus percent supermajority.

But when Magruder and LeVecke organized businessmen to oppose to Arizona’s “Employer Sanctions Act” — a statute aimed at purging illegal aliens from the Arizona workforce — the Arizona conservative movement stopped liking them so much.

The act LeVecke and Magruder challenged was HB 2779, dubbed the Employer Sanctions Law — Arizona’s “enforcement-only” alternative to the failed comprehensive immigration reform championed by President George Bush and Sen. John McCain. The law requires companies to use the Federal “E-Verify” system, based primarily on the Social Security Administration’s data base, to ascertain whether new hires are eligible to work in the United States. Employers who “knowingly” employ illegals more than once have their business licenses revoked — the “business death sentence,” as Gov. Janet Napolitano tersely called it.

A district court upheld the law, and the matter is now before the Ninth Circuit Court of Appeals. In addition, Wake up Arizona succeeded in getting an initiative on November’s ballot; the “Stop Illegal Hiring” initiative would lift the E-Verify requirement and demand more of prosecutors trying to prove “knowing” hiring.

Magruder and Levecke were right to oppose the law. It makes immigration law, constitutionally the job of the federal government, a state-by state nightmare; its mandated E-Verify system is unreliable; and its penalties are overly harsh.


Roughly five percent of the Arizona workforce resides in the U.S. illegally. The business organizations challenging the law include the obvious suspects, sectors laden with low-skilled and entrance-level labor — food franchisers, hoteliers, and farm operators — but also heavy constructors, roofing contractors, and the Arizona Chamber of Commerce. Twelve other states’ chambers of commerce, and the national Chamber of Commerce, filed supporting briefs.

It’s no surprise that such a wide swath of business groups took an interest — under the law, it’s much more difficult to own businesses in multiple states. Previously, the federal I-9 employee-verification process (in effect since the Immigration Reform and Control Act of 1986) directed employers to inspect three (of 25 available) forms of identification for each employee, and to certify that these contained no facial untruths. The I-9 process is useless for detecting document fraud, but it provided the employer with a “safe harbor” — a set procedure that, if practiced in good faith, protected him from lawsuits for illegal hire anywhere in America.

The new state laws, including Arizona’s, disrupts this consistency. I-9 still applies, but an employer in Arizona is now also required to check hires through E-Verify. An employer in Illinois is forbidden to do so. In Tennessee and Louisiana, the list of documents employers may use to verify employment overlaps with, but does not conform to, the I-9 list.

In addition to the obvious complications, chambers of commerce in states that have passed such laws fear their unintended consequence: a disincentive to in-state job creation.

Database Discrepancies

E-Verification depends on a Social Security Administration database. Said database has an overall error rate of 4 percent; for foreign-born workers — naturalized citizens and those on work visas — the error rate is 10 percent. This is why Illinois forbids its use.

And inaccuracy is not E-Verify’s worst problem. The Human Resources Initiative for a Legal Workforce Coalition, which advocates for universal employment verification, lobbied for the temporary extension of E-Verify that passed Congress in July. But for the coalition, “temporary” was the key word. Here’s how Susan Messinger, the coalition leader, describes E-Verify:

The system is based on outdated databases and paper documents. Employers are still required to complete the paper Form I-9 after analyzing as many as 25 documents that an employee can use for identity and work authorization purposes. Mandating it will lock in the paper-based, error-prone, ineffective and insecure I-9 system that employers have learned to hate during the past 10 years. E-Verify still can’t detect document fraud or identity theft — two common tactics used by unauthorized workers to beat the system and get jobs.

In other words E-Verify is an electronic method of transmitting document fraud. The only thing that changes for is the sequence: A fraudster must fool the government first, then the employer.

Messinger’s coalition, which includes the National Association of Manufactures, the Food Marketing Institute, the National Association of Convenience Stores, and the National Franchisee Association, is not opposed to a federal database. In fact, it promotes such a universal system, based on forgery-proof bio-metric identifiers.

Backers of the Human Resources Initiative regard E-Verify as an ineffective, error-ridden substitute. And they vehemently oppose an approach to employment verification based on state and local enactments, which they regard as a step backward — a regression from the goal of a universal, dependable, biometric I.D. system.


The admittedly deficient I-9 process requires a business owner to “examine” three forms of federally listed ID. If he fails to do so, the employer may suffer a series of fines and penalties, which increase with multiple violations. But his right to do business is not terminated. State laws that threaten to extinguish entire enterprises over immigration violations are too harsh, and sometimes even give their punishments to the wrong individuals.

The original Arizona law, for example, exempts exempted a business from sanctions if it “unknowingly” employs illegals. But businesses don’t know things, individuals do — and if one individual in the business knowingly commits the crime, another may be held responsible. Franchise holders like LeVecke face license revocation if their local managers defy the law. The person who authorized the violation — the actual “knower” — faces no penalty.

In Arizona, investigations of illegal hire can be triggered by anonymous accusers. The purpose is to proliferate investigations, thereby discovering and deporting more illegal aliens. However, the I-9-compliant businessman whose existing workforce is disrupted by such investigations is understandably perturbed.

And then, the workplace investigations proliferate against a swelling patchwork of worker-verification laws, causes of action, and draconian penalties. In Louisiana and Oklahoma, a former employee can sue a business that has been found to have hired an illegal alien, knowingly or otherwise, in the same job category. Hazelton, Pa., enacted a similar law, but allowed courts to triple damages. Mississippi allows a civil damage claim in addition to license revocation.

Nothing in the grievances cited by Arizona businessmen conflicts with the goal of immigration enforcement. The appellants do not say “Give illegals citizenship” or “Open the borders” or even “Expand guest-worker.” What turns business against state enforcement statutes are the realities of their operation in the real world: contradictory verification standards, draconian threats, and open-door litigation.

But to formulate a solution to these objections is to arrive at the place from which President Bush started. What entrepreneurs need is a comprehensive law, containing uniform employee verification standards, uniform appeals procedures, uniform sanctions, and above all, a uniform safe harbor for those attempting to comply in good faith.

In 2007, 244 employer-related immigration bills were introduced in 45 states, 20 of which passed. Through them, conservatives have earned the united wrath of the business community.

— Richard Nadler is president of the Americas Majority Foundation.


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