The Alabama Homeland Security Department expects massive budget cuts this upcoming year due to a reduction in flow of federal dollars.

“It will be about a 40 to 50 percent cut in the state’s homeland security budget,” says John Scripture, spokesperson for the head of the Alabama Department of Homeland Security Spencer Collier (ADHS).

Accordingly, DHS expects to greatly reduce its programs and projects:

These cuts and reduction in funds for functioning programs will be a blow to the ADHS. However, the ADHS will require more funds from the state’s general fund to fulfill its newly bestowed duties. According to the Alabama’s new immigration law, the state’s homeland security department is responsible for maintaining the E-Verify system. This will require a 25 percent increase in general funding for the department to run the citizenship authentication system.

For an already cash-strapped state budget, this could pose a problem. Nevertheless, Scripture is assured the funding will be there. “Until the legislature changes its mind, we will require an increase in funding from the general fund.”

For you see, DHS had a fairly large responsibility placed upon it by the Alabama Legislature. In an effort to be sly, the Legislature converted DHS into the Human Resources/Personnel department of every small business in Alabama: all 80,000 of them. (See here and here)

Remember when House Majority Leader Mickey Hammon said that mandatory E-verify, “the right to work list,” was the “cornerstone” of  HB56, the Alabama Anti-Immigration Bill?

Well, that “cornerstone” turns out to be anathema to freedom, according to Tea Party activists.

In an open letter to all members of Congress today, a plethora of conservative orgnaizations and Tea Party groups detailed their fundamental and principled opposition to a mandatory E-verify system. The signatories to the open letter include:

  • Take Back Washington
  • Liberty Coalition
  • Downsize DC
  • American Freedom Agenda
  • Competitive Enterprise Institute
  • Republican Liberty Caucus
  • Tea Party Nation
  • Washington D.C. Tea Party
  • November Patriots
  • Taxpayers Protection Alliance
  • Constitutional Alliance
  • Kitchen Table Patriots
  • Conservative Rebublican Women

(I apologize, but I could not help but copy the entire text of the letter.)

Dear Member of Congress:

We, the undersigned national and state pro-freedom, limited government, and Constitutional government organizations, representing millions of Americans, encourage you to vote against the proposed “E-Verify” system established by H.R. 2885, the “Legal Workforce Act” that mandates the use of an electronic employment verification system by every employer in the U.S. for every person seeking employment in the U.S.

We are alarmed that E-Verify poses a threat to both the Constitution and every law-abiding citizen of this country because it:

 1. Creates a de facto national I.D. System – even for citizens;

2. Violates individual civil liberties such as the right to work and free speech;

3. Mandates a costly job-killing regulatory burden that cripples small business

4. Requires employers to become enforcement agents of the federal government;

5. Encourages identify theft of law-abiding citizens;
National ID System

This onerous Act would require each American to ask permission from the Federal Government when hiring or being hired.  The Act empowers the Department of Homeland Security to compile and monitor the personal information of every person seeking employment, and to surreptitiously transfer it to yet unspecified entities.

The result is a de facto National Identification System, and the enabling language that mandates the intrusive collection of personal data could grow to include biometrics such as fingerprints, DNA and/or iris scan.  This invasion becomes tantamount an unconstitutional, warrantless search.

Violation of Civil Liberties

The dangerous and intrusive precedent set by the bill opens the floodgate of additional incursive and contentious employment verification hurdles.  Mission creep is the signature of all bureaucracies.  After enactment of the Legal Workforce Act, employers could soon be required to verify whether employees are delinquent in the payment of federal, state, or local taxes, in compliance with child support or alimony decrees, on a terrorist watch list, or convicted or even accused of crime.

We are born with an unalienable right to acquire property through our own labor. Private property is a bulwark against government oppression.  Requiring citizens to secure permission from the Department of Homeland Security to enjoy the fruits of their labor is an unacceptable violation of our civil liberties.

Errors in the verification process will be practically immune from timely legal redress and violate another constitutional tenet. Citizens have already lost their jobs after DHS deemed them not “work-authorized.” The CBO reports that in 2009 about 80,000 workers likely received erroneous findings from the system and may have lost their jobs.

Fearing this retaliation, free speech will chill and citizens will be loath to criticize government.

Devastating Impact on Employers & Economy

This Act is falsely portrayed as containing safe harbor provisions for employers, yet there are no protections for them against criminal prosecution if they do indeed employ an individual later proven to be in the U.S. illegally or who has successfully assumed a fake or stolen identity.  While acting as de facto law enforcement officers for the federal government, employers will need armies of expensive attorneys to safeguard against criminal prosecutions at a cost that small business can ill-afford even in a good economy.

The loss of jobs will be staggering as employers substitute machinery for employees or outsource employment to avoid the vexations and costs of compliance, as will the loss of tax revenues as jobs go underground.  Here are some of the economic statistics according to the CBO and Bloomberg:

-Mandatory E-Verify mandatory would increase the number of employers and workers who resort to the black market, outside of the tax system. This would decrease federal revenue by more than $17.3 billion over ten years. (CBO)

-The cost to employers to fully implement E-Verify will be more than $6.1 billion for all businesses.  (CBO)

-Mandatory E-Verify will cost small businesses at least $2.6 billion  in the first year. (Bloomberg)

-One small Maryland business estimates their cost for one year will be $27,000 and decimate their ability to hire new workers. (U.S. Chamber v. Chertoff No. 08-CV-3444-AW)

Encourages Identity Theft

E-Verify will create an unprecedented black market demand for fake identities coveted by those seeking employment, particularly for short-term jobs where illegal workers will be long-gone before there is any chance of detection. Law-abiding citizens will become prime targets for skyrocketing identity theft, and we can only speculate as to the anticipated nightmare this “hit-and-run” use of their identities will create in the long range for the true owners to be able to work again.

Conclusion

E-verify, in short, is a national identification and surveillance system run by the DHS. It will lead to even more bureaucracy, bigger government, greater surveillance, and less freedom.

H.R. 2164 should never leave committee.  It is anathema to limited government, the right to privacy, free enterprise and prosperity. It violates the philosophy of the Constitution and intent of the Framers by subordinating the liberty of citizens to the administrative convenience of government.  And the Founding Fathers would have rebelled against such a staggering Federal intrusion into every workplace in the nation and our personal civil liberties.

Mickey Hammon and Scott Beason will now need to include the Tea Party in their definition of “liberals.”

If President Obama were to propose anything like the mandatory permission-to-work lists contained in the Alabama Anti-immigration bill, I would expect to hear howls and cries that such proves the President is the Anti-Christ. (Take a second and Google “Obama is Anti-Christ”: 4.6 million results) I am sure proof-citations to Revelation 13:15-18 would fill fundraiser e-mails and talk-show programs:

Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name.  This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.

However, because “conservative” Republicans passed these Big Brother provisions, all is safe and good and well. No worries right? According to this report, we should be worried; not because the President is the prophetic Anti-Christ, but because of serious privacy concerns of this type legislation involved in E-Verify.

Privacy advocates are growing increasingly worried that a system meant to identify illegal immigrants will morph into a Big Brother-style high-tech ID database of all Americans. . .

The program makes sense to proponents of illegal immigration control, but some privacy advocates are worried this is only the first step toward a commingling of personal information of everybody in the United States.

A joint FBI-DHS PowerPoint presentation—provided to Whispers by groups involved in a Freedom of Information Act lawsuit against DHS—indicates Secure Communities is a test case for a larger FBI biometric database initiative called “Next Generation Identification,” or NGI. It is being built to replace the FBI’s current fingerprint database with more robust records like palm prints, photos of tattoos and scars, iris scans, and facial imaging.

Due to the Alabama Anti-Immigrant Law, every employer and ultimately every employee will need pass through E-verify to remain eligible to work.

Lillie Coney, associate director of the Electronic Privacy Information Center, worries about a lack of transparency and oversight in implementing such a broad database. “It’s not just about what it is that is private,” Coney says. “It’s the rules that are out there to protect the individual and the society from abuse and misuse of that information. We just don’t have that.”

You have heard the argument:  Gun prohibition won’t keep guns out of the hands of criminals or make us safe. Making guns illegal will primarily disarm peaceful citizens make it hard for them to lawfully obtain a gun.

As can be said of gun laws, the same can be applied to the new Alabama mandatory “permission to work” law.  Prohibiting the hiring of illegals (which is already the law) and mandating the use of e-verify will not stop businesses from hiring illegal immigrants. It will primarily just add burdens onto those businesses which try to comply with the law. In fact, evidence suggests that e-verify will be pushed into informal or underground employment.

As evidenced by this AP news report, those already mandated to use E-Verify still hire illegal immigrants.

Federal prosecutors want a Mississippi businessman to forfeit $475,000 for employing illegal immigrants, including some who worked construction jobs at the federal courthouse where he was convicted in the scheme and at a nearby military base.

Randy Weitzel of Gulfport was identified in court records as the operator of Biloxi-based Artisan Textures Inc. and Procoat of LA Inc., based in Baton Rouge, La. He pleaded guilty June 3 to conspiracy to defraud the United States. Sentencing is set for Sept. 1. . .

Weitzel was convicted along with two other men, Woody Brodtmann Jr. of Bay St. Louis and Agustin Arcadia of Vancleave. Weitzel and Brodtmann were indicted in 2009 for knowingly hiring and harboring illegal immigrants, including some who worked for Artisan Textures at Keesler Air Force Base in Biloxi as far back as 2003. Arcadia was charged later. . . .

Prosecutors said they had proof Weitzel knew some of his workers were illegal — in 2003 he allegedly stopped paying a worker under one name and began paying him under another name.

Prosecutors said Weitzel rented homes for illegal immigrants as far back as 2000. Police raided one of the homes in 2004, but court records said federal immigration officials didn’t have the resources to detain the illegal immigrants at the time. An unnamed coconspirator allegedly rented hotel rooms to hide the men.

What the articles does not say is that Weitzel was required to run all his employees though E-verify. These were federal projects; all federal contractors and subcontractors are required to use E-Verify to vet the employment eligibility of their workers.

How did Weitzel get around E-verify? The article does not say. While E-verify catches illegal workers “almost half of the time,” it is possible these workers slipped through the system. I doubt that though because prosecutors could prove he knew they were illegal. So most likely, to confirm that some businesses that are going to break the law will find ways around E-verify, the real burden of the law will fall on those that would obey the law without the new red-tape.


If trends continues in federal court, the only portion of the Alabama Anti-immigration Bill left standing will be the “Permission to Work” list aka mandatory E-Verify, one of the portions the Legislature forgot to fund.  (I have addressed other consequences of E-verify here, here, and here.)

A new report issued today entitled ‘Seen and (mostly) Unseen: The True Costs of E-verify” details the true costs on businesses and individuals of a mandatory E-verify system.  According to the report summary,

This brief seeks to arm policymakers and the public with a better understanding of the true costs of E-Verify. It explains the system’s known costs, such as lost tax revenue and monetary burdens on small businesses, and estimates the cost of additional fiscal burdens— to individuals verified through the system, to employers utilizing the system, and to the federal government in running the system—that have been absent from much of the dialogue surrounding it.

In particular, we focus on the added costs that do not get scored in government revenue estimates, such as the high legal costs to employers to defend their use of the program, the “jobs tax” that will be needlessly applied to American workers, and the increased burdens on federal agencies from new mandates. All of these numbers add up to one simple conclusion: Mandating E-Verify without legalizing all workers is too expensive, especially in these fragile economic times.

BUSINESS START-UP COSTS AND ANNUAL UPKEEP: The reports finds that first year start-up costs for businesses will be:

  • 10 employees = $1254
  • 50 employees = $3163
  • 100 employees = $5,515
  • 500 employees = $24,422

Additionally, the annual costs after year-one for all small businesses will be $435 on average, not including legal fees to comply with government regulations and defend against lawsuits. (“One lawyer experienced in E-Verify claims, who wished to remain anonymous, stated that the system “is a gold mine for lawyers” because of the high costs of setting up a compliance system, and of fending off federal government audits.”)

The E-verify does not allow employers to pre-screen applicants.  Accordingly, employers will be less likely to hire applicants which “look” undocumented or Latino; they will not want to deal with the hassle of a TNC.  Here is where the litigation lawyers will make a killing.

According to Westat, naturalized citizens are more than 30 times more likely to receive
a TNC than U.S.-born workers. What these findings tell us is that areas with higher
concentrations of immigrants and new Americans will have a harder time coping with
the effects of E-Verify.

“JOB TAX”: The reports estimates there will be an average $225 per person indirect “jobs tax” to procure proper photo identification for the system.  0.5 percent of all people run through E-Verify do not currently have a sufficient photo ID, and would need to acquire one to use the system.

There will be additional tax on average of $190 per person to resolve erroneous Tentative Non-confirmations. 0.8 percent of all legally authorized employees will receive a TNC, 152,000 in Alabama alone.

POSSIBLE JOB LOSSES BECAUSE OF ERROR RATES:  Per the report,

If E-Verify was made mandatory more than three-quarters of a million legal workers— including U.S. citizens—would lose their jobs because of the system’s error rate. Approximately 0.8 percent of all U.S. residents who are citizens or legally eligible to work in the country receive an erroneous TNC. A small portion of these workers, about 0.3 percent, are able to successfully contest their findings, and gain proof of work authorization. The remaining 0.5 percent are unable to correct their records and receive an equally erroneous FNC.

These are American workers, legally authorized and otherwise innocent, who will ultimately lose their jobs. A final error rate of only 0.5 percent may not seem like a particularly large number, but with an estimated 154,278,000 workers across the country, that translates out to just over 770,000 jobs lost.

Translated for Alabama: 10,000 legally authorized Alabamians will ultimately lose their jobs because of E-verify error rates. For the 15,000 which receive a TNC, they are exposed to danger from employer non-compliance.

We worry, however, that unscrupulous employers will either demote, fail to pay, or otherwise discriminate against an employee who receives a TNC. Indeed, 42 percent of workers who received a TNC in 2009 were not notified of the status by their employers, robbing employees of the ability to contest, and of the ability to ultimately keep their job. Westat further found that a portion of those employers who did inform their workers about TNCs did not explain to them the procedures for contesting, or the eight-day window in which an employee may contest.

For the 10,000 which lose their job because of system error, they will have continuing problems after their firing:

Losing your job over an erroneous TNC or FNC has real consequences: If the Social Security Administration deems you to be an ineligible employee, you would also be
ineligible for unemployment benefits.

SYSTEM DOES NOT WORK: All of these costs and lost jobs for a system which only catches 46% of illegal immigrant workers. The report findings suggest:

The system has far poorer results when it comes to unauthorized workers, catching only 46 percent of such workers. That means that more than half of all unauthorized workers have no problem getting through E-Verify, a finding Westat chalks up to identity fraud. E-Verify only has the capacity to match legal records with those submitted by the employee—it does not detect identity theft. If a worker submits a valid Social Security number, but not his or her own number, the system returns a work authorization.  We as a nation have to ask ourselves: can we accept three-quarters of a million Americans losing their jobs for a system that catches unauthorized workers less than 50 percent of the time?

The mandate of an E-verify system on Alabama was not on the talking points memo for the supporters of the Anti-immigrant. However, some discussion of E-verify should have been included:

That is the cornerstone of the entire legislation,” said House Majority Leader Micky Hammon, R-Decatur, one of the framers of the law.

Note: Every business is required to enroll in E-verify; there is no small business exception like the North Carolina version.

To cut down a real backlash from small business owners, the Republicans created a new service:

Section 26: The Alabama Department of Homeland Security shall establish and maintain an E-Verify employer agent service for any business entity or employer in this state with 25 or fewer employees to use the E-Verify program to verify an employee’s employment eligibility on behalf of the business entity or employer. The Alabama Department of Homeland Security shall establish an E-Verify employer agent account with the United States Department of Homeland Security, shall enroll a participating business entity or employer in the E-Verify program on its behalf. . . . The Alabama Department of Homeland Security shall not charge a fee to a participating business entity or employer for this service.

Instead of directly enrolling in E-verify, these businesses will provide the information to Homeland Security. Accordingly, instead of doing public safety, the Alabama Department of Homeland Defense will become a HR department and enroll the 80,000 firms, or 91 percent of all Alaba­ma businesses, potentially in the federal E-verify program for them.

In a day that we are closing courts for lack of funding and eliminating other essential services, the Republican Legislature just created a taxpayer-funded,  incredibly time-consuming service. Initially, the “service” will actually enroll the 80,000 business into the federal E-verify system which means collecting and accurately entering the following for each and every company:

  • the I-9 information for every employee of the company,
  • the company name,
  • the physical address of the company,
  • the company mailing address,
  • the  employer identification number (also called a federal tax ID number),
  • the total number of employees for all of your company’s hiring sites that will participate in E-Verify,
  • the first three digits of your company’s North American Industry Classification System (NAICS) code,
  • the number of hiring sites that will participate in E-Verify,
  • whether the company is a federal contractor and whether you are enrolling your company because it has a covered federal contract with the Federal Acquisition Regulation (FAR) clause requiring use of E-Verify M-776 Supplemental-2,
  • and contact information for the company’s memorandum of understanding (MOU) signatory (name, phone number, fax number (optional) and e-mail address),

Needless to say, that will take a many man-hours and will require dozens of employees. However, there is more. If any of the information listed above changes after the company is enrolled in E-Verify, it must notify “the service” and the “the service” is responsible for managing and updating the account in E-Verify. So, every time one of these 80,000 employers hires someone new after enrollment, the “service” will have three days to properly update the federal E-verify account.

[Private companies do provide this service also for a fee. They sometimes charge: $50 for set-up, a continuing $25 annual fee, and $7.50 for every employee or new new hire.  But now, the Department of Homeland Security will do this for free (to the businesses, not the taxpayer.)]

Small problem: the Legislature forgot to fund this new program in the budget; no money was designated for these additional services. According to this Montgomery Advertiser article,

The challenge for the de­partment, Collier said, is money. The law did not allo­cate money to Homeland Se­curity to implement the pro­gram, and prohibits the Department from charging fees to enroll businesses. Homeland Security receives about $5 million a year in federal funding, but 80 per­cent of those funds must be spent locally, and Collier said he doesn’t believe they can be spent on E-Verify.

“We have very strict guidelines on expenditure of state Homeland Security funds, and I haven’t seen anything to allow that ex­pense,” Collier said.

That will leave the depart­ment to fall back on its mea­ger budget to set up the service. Asked if Homeland Security will need more money to set up the service, Collier said “Yes.”

“This is statute now, and we are going to do every­thing in our power to carry out the statutory responsibil­ities we have been given,” he said.

By the way, Homeland Defense has 90 days to get this service up and running.

How is that for responsible budgeting!

I discussed some of the burdens on businesses of the Alabama Immigration Act, such as a great increase in litigation and new red-tape.

But how does the statute apply to multi-state corporations?

  • For instance, when the statute requires every business which receives incentives from the state to “participate in the E-Verify program and shall verify every employee,” does this mean that Tyson Foods must now verify every employee of the entire corporation, even those outside the state in Arkansas or Texas or Nebraska?
  • Or, considering that a person can sue for discriminatory hiring practices if they are looked over for a job or lose a job and the company employs any illegal immigrant, then if a Wal-Mart store fires an employee in Alabama but the company employes an unauthorized immigrant at a Texas distribution center, does the fired employee still have a cause of action?

Alabama courts (and federal one, too) will be busy and have plenty of opportunity to answer these questions and assess other unclear implications and consequences of this statute.