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Trial by Wire

 

Terry Graham arrived at the immigration-reform forum late, when things were already heating up. She slid into the back row of seats in the North High School auditorium and listened as a man in the audience charged that the panel was skewed with open-border activists.

The man was invited up on stage, where he bashed what he saw as a one-sided discussion advocating illegal immigration. After he returned to his seat, Graham stood up and made the same complaint, projecting her voice so that the panelists could hear. Other audience members told her to shut up. Someone said that the event was for "Mexicans only."

Graham had brought a tape recorder to the forum, and when a young Hispanic woman sat down next to her, Graham warned that she was taping everything and that if she was threatened, she'd give the tape to the police. Several extra officers were on the scene for this forum, since the sponsor, the multibillion-dollar First Data Corp., had anticipated that protesters might be planted among the several hundred people in attendance.

Graham kept complaining, and people kept telling her to be quiet. The woman next to her, Julissa Molina, was the last one to tell Graham to shut up.

Graham says that Molina grabbed the tape recorder from her hand, then attacked her when she tried to get it back. Molina pulled her hair and ripped her T-shirt, Graham claims, then knocked her to the floor, where she may have passed out briefly. She got her tape recorder back, minus the tape.

Molina was cuffed and charged with assault and disturbing the peace.

"I was beaten up because I was speaking freely in my own country, by a woman who was a Mexican national and didn't like what I was saying," Graham says. "Are we not allowed to debate this issue without risking our life?"

Some witnesses say Graham was just speaking her mind. Others say she was inciting a riot.

Graham has filed suit against both Molina and First Data, which hosted the forum as part of its ongoing effort to bring attention to the immigration debate.

Anyone who uses a credit or debit card has likely done business with Colorado-based First Data, whose subsidiaries include the STAR ATM network and Western Union. The company's customers include many of the Latino immigrants who sent a total of $30 billion out of the United States and back to their homelands in 2003.

Graham believes that First Data has a vested interest in promoting illegal immigration because of the money it collects from its remittance business.


Juan had to cross four international borders to reach Colorado and the Western Union office at East Colfax Avenue and Emerson Street. Juan came to Denver because he heard that law-enforcement authorities here aren't as tough on illegal immigrants as they are in border states. He works odd jobs for whatever cash he can get, and he sends most of his money back home to Nicaragua.

The forms at Western Union are available in English or Spanish. Juan asks the clerk one of the few questions he can articulate in English: "How much?"

Juan has no official identification, but he doesn't need any to send money home. After filling out the form and handing over his cash, he walks to a nearby convenience store and purchases a calling card. Then he calls his family back in Nicaragua and gives them the code he just received from the Western Union clerk so they can claim the money.

By the time Juan hangs up the phone, his remittance has been sent. Out of the $100 that he handed over, Western Union keeps about $12 for its services -- a hefty commission.


Western Union was just ten years old in 1861 when it completed the first transcontinental telegraph line to provide fast, coast-to-coast communications during the Civil War. Five years later it introduced the first stock ticker. In 1871 it pioneered the world's first electronic money transfer, in 1914 the first consumer charge card, and in 1933 the first singing telegram.

In 1995, Western Union's then-owner merged with First Data Corp., the first company to process bank-issued MasterCard and Visa cards (in 1976), and the outfit that linked banks with the first ATM network five years later, in 1981. First Data already had a strong Denver presence, and in 1996 it moved Western Union's North American headquarters to Englewood.

First Data followed suit in May 2001, moving its corporate headquarters to Greenwood Village. The company's CEO and core team of senior managers are based here, and they tout the highly skilled workforce attracted by the area's quality of life. Today First Data is one of Arapahoe County's three largest employers, with approximately 2,400 people in Colorado and 30,000 around the globe.  

And as the global economy grows, so grows First Data.

First Data generated more than $10 billion in 2004, and Western Union remains one of its largest subsidiaries. Western Union, which accounts for about 14 percent of the $151 billion wire-transfer market, has more than 200,000 agents worldwide, working out of 195 countries and territories. First Data maintains more than 424 million credit, debit and other accounts, and made more than $1 billion in profit from Western Union alone in 2004.

A 2002 study by the Inter-American Development Bank found that one-third or more of those sending money home are in this country illegally. Critics like Graham charge that lax standards in the money-transfer industry benefit the undocumented immigrant population -- and the companies benefit as a result.

In March 2003, Western Union settled a class-action lawsuit claiming that the company failed to disclose the commission it charged when wiring customers' money to Mexico. The suit also alleged that the company ripped customers off on the exchange rate. Western Union settled by making about $5.5 million in "charitable donations," and also offering discounts to some customers.

"We have always believed that our disclosures are clear and that our customers understand the way our business works," says Western Union spokeswoman Danielle Pereira. "Though we have consistently believed the allegations have absolutely no merit, we chose to resolve the matter to avoid the continued expense and prolonged distraction of a drawn-out court proceeding."

That $5.5 million is separate from a $10 million "empowerment fund" that First Data launched last March. In Denver, that fund is paying for an $800,000 pilot program to "support and increase the number of Hispanic entrepreneurs"; it also pays for immigration-reform panels such as the one at North High last July.

The empowerment fund was established "not to advocate a position, but to create an interest about the issues and dynamics that are driving the debate," says Fred Niehaus, a former state economic-development official who is now First Data's senior vice president for public affairs. First Data wants to be a voice for the voiceless, he explains, bringing all parties in the immigration debate to the table.

"The bottom line on this thing is that our business was built by immigrants around the world, and our CEO feels very strongly that those people are the most impacted and often don't have a voice," Niehaus says. "We knew that there'd be some lumps along the way, but we are prepared to take those."

Except, perhaps, when those lumps come in the form of U.S. Representative Tom Tancredo.


"Mind if I smoke?" asks Congressman Tom Tancredo before blazing a cigar and cozying up in a leather chair in his Centennial office. He's sporting jeans and a Big Dog sweatshirt.

The former schoolteacher is a hero to some, a racist to others. He despises illegal immigration, which he sees as a threat to American culture, and chairs the congressional Immigration Reform Caucus.

"I am trying to make both the state of Colorado and the United States a place that is not accommodating to illegal immigrants," he says. "I don't want to provide them with social services, I don't want to provide them the ability to vote, I don't want to provide them with cards that they can use for identification purposes, that makes their life easier: 'Here, these are the keys to the kingdom.'

"They're not Americans; they're something else," he continues. "They're in this group that's separate from us, unconnected to this broader concept of America. This goes to the core of who we are as a nation and whether we can hold it together."

Last summer, citing statistics that Latino immigrants send $30 billion out of the country each year, Tancredo suggested that the government tax international wire transfers to offset some of the costs incurred with illegal immigration.

Tancredo says he wasn't thinking about First Data, whose headquarters are in his congressional district, when he pitched the idea. Nonetheless, First Data responded with harsh words for Tancredo in the Denver Post, and he backed off -- not because First Data threatened him, Tancredo says, but because he realized that taxing the people who send the money would be taxing the wrong party.

In the meantime, though, Niehaus sent a letter to Douglas County Commissioner Jim Sullivan, accusing Tancredo of ambushing the corporation on the wire-transfer-tax issue. The "adversarial environment" created by the congressman might impact First Data's expansion in Colorado, Niehaus suggested.

Sullivan took the letter and other materials regarding Tancredo's activities to the Colorado Division of Civil Rights, which in January declined to take action against the congressman.  

"I don't want to focus on Tom Tancredo," Niehaus says, "but I will say this: We react to people who talk to us, and we react to people who try to understand our company. I respect his position, but I don't agree with him."

First Data gave Democratic candidate Joanna Conti $2,000 for her unsuccessful bid to unseat Tancredo last fall. The corporation wasn't out to get Tancredo, Niehaus says, adding that its political action committee simply felt that Conti better represented the company's issues. Overall, he adds, the First Data PAC splits its contributions between parties.

Tancredo's next suggestion was that the federal government withhold foreign aid equal to the amount that countries are getting in remittances from immigrants in the United States. So far the idea is only hypothetical, he says, but fair. After all, Mexicans in this country send more money home than Mexico generates through any official foreign investment, including tourism and oil. (The drug trade makes more money -- unofficially, of course.)

Migrants living in el Norte are heroes for the aid they send south. Tancredo argues that this flow of cash is turning countries into lobbyists for open borders -- and the companies that make the cash flow possible into advocates for illegal immigration.

Most illegal immigrants are scared of bank accounts. They're scared to give the information required, scared that they'll lose funds if they're deported. They prefer the wire-transfer system, which doesn't require an ID to send under a thousand dollars.

A Tancredo fan recently sent the congressman a phony ID card -- a matricula consular issued by the Mexican government to people living here illegally, which Western Union accepts as proper identification. This particular matricula features a smiling Tom Tancredo and indicates how easy it is to forge a card.

Tancredo knows he can't tax wire transfers and that withholding foreign aid probably won't fly, either. But he's bound and determined to outlaw the Mexican-issued matricula. He already boasts of how Colorado became the first -- and perhaps is still the only -- state to bar acceptance of the matricula, and says he plans to pursue legislation on a national level that would ban it at financial institutions.

And Tancredo doesn't want to stop there. He wants to militarize the border until the U.S. Border Patrol can be beefed up to 20,000 agents and can use more military technology like drones and radar. He wants to go after the employers of illegal immigrants by increasing the penalty for hiring them. He wants a mass deportation of the estimated ten million illegal immigrants living here, and a program for guest workers that would allow them to come back legally, if they so choose.

Unlike Tancredo, Polly Baca, executive director of the Latin American Research and Service Agency (LARASA), was invited to be a member of First Data's immigration forum last summer. She says that the congressman's mass deportation concept is expensive and impossible, and that it's also a bad idea to militarize a border with a friendly nation.

LARASA's motto is "When you improve the lives of Latinos in Colorado, you improve the lives of all Coloradoans." Its website lists First Data and Western Union as partners in this mission. First Data is the most positive corporation in the state for the disadvantaged, Baca says. And while the company wants to find a solution to the immigration problem, Tancredo does not.

"As long as there are jobs, the undocumented will keep coming into this country," Baca says, adding that any attempt to replace undocumented workers with guest workers would destroy Colorado's tourism and agriculture industries. Who would pick the fruit? Who would cook the meals? Who would make the beds? "We want some reality," she adds. "It's time we stop living in Fantasyland. I don't know the answer; I just know you have to deal with reality."

As reality now stands, the burden of proof for determining the legal residence of a worker doesn't fall on an employer. But it would if a national ID card were in place, Tancredo says. "If my plan went into effect -- honest to God, I'm saying this truthfully -- First Data wouldn't be impacted negatively, because the number of people coming in would be close to the number of people that are here, maybe," he adds. And while he does acknowledge that the economy might take a hit, he thinks that would be for just a year or so while the new rules take effect.


Although First Data is not about to step away from the immigration debate, it's recently backed away from other controversial issues.  

Last year the company stopped processing transactions for iBill, the Internet Billing Company, an online pornography-fee giant that collects for sites like www.indiansex4u.com and www.hardcorehoneyz.com. "We determined that processing payments for that company was inconsistent with our core values," says Jeff Fowler, who's with First Data's operation in Houston. "We decided we'd pull out of that business across the board."

But First Data wasn't just acting as a collection agent for porn sites. In 2003, a Los Angeles jury awarded the incarcerated owner of a large online escort service more than $3 million in his suit against the corporation. During the trial, according to Forbes, a First Data subsidiary admitted that the company was processing credit cards for 143 escort services.

The money-transfer business also faces threats from terrorism. The September 11 hijackers used Western Union to collect funds, as did people accused of taking up arms with Al-Qaeda and the Taliban against the U.S. in Afghanistan.

The feds are used to tracking crime through wire transfers. They've nailed Columbian cartels sending millions out of the U.S.; they've nailed a Russian man who moved $680 million around the world to places including the Middle East, where the wire-transfer business is booming; they've caught a Pakistani who sent home $100 million out of a makeshift business in a two-bedroom shack in New Jersey.

But most of those crimes used wire-transfer companies that aren't licensed. As a licensed corporation, Western Union must comply with federal standards that include reporting all transfers over $3,000 and reporting multiple transactions by the same party over a certain amount. Those standards help the feds track narco cartels, terrorism financing and other criminal activities. Federal officials classify Western Union as generally helpful in investigations.

So does the state of Colorado.

When you pay back a student loan, renew your vehicle-registration tags, get a state-issued license or make an income-tax payment in Colorado, First Data gets a cut. That's because since May 2003, Colorado has paid almost $400,000 to Key Bank and First Data, a subcontractor, to process the state's lockbox payments. This means they open the payments and make sure they're adequate before depositing them in state accounts.

The three-year contract expires in May, when there's an option to extend for two years. First Data scored the subcontractor role when the original contract went out to bid in 2002. Soon after, First Data took on state representative Mike May.

In 2003, May was working with state treasurer Mike Coffman to resolve a conflict in the law regarding unclaimed property. Colorado was the last state to adopt an unclaimed-property law, in 1987, and a contracted third party did the audits until the treasurer's Unclaimed Property Division got an audit staff in 1991. Unclaimed property can include old bank accounts, uncashed paychecks, cash, wire transfers, insurance-claim payments, stocks, dividends, mutual funds and pensions. "Somebody said it's like rust: You find it everywhere you look," says Patty White, the treasurer's employee in charge of the program today.

The state now has more than $200 million in unclaimed assets listed on its website. According to Coffman, about a third of the money is usually claimed. Until it is -- and people have an indefinite time to claim it -- the state is using it to subsidize health care and to track down other unclaimed property.

Two years ago, May proposed legislation that might have increased the pool by allowing third-party auditors to work for a cut of what they recovered when they tracked down unclaimed funds that corporations were withholding from Coloradans. First Data was a leader among the companies opposing the bill, he says. It argued that the third-party auditors might get too aggressive in tracking down property in order to get their percentage cuts, and that could raise privacy concerns.

"We couldn't get all sides to agree, and the amendments died, and the bill died also," May says.

According to White, third-party auditors are "not as openly welcomed" in Colorado as in other states, some of which contract out all of their unclaimed-property audits. "Businesses don't welcome it with open arms, and therefore it is not always popular in the legislature," she says. "The banks have never been favorable to it."

But it isn't a third party that's now auditing First Data on behalf of Colorado; it's the state itself. "They've been on our list for a long time, and we've never gotten around to them, probably because they are so big," White says. "Auditing is a fact of life here."

Although First Data has reported unclaimed property annually, as required by law, the audit is being conducted to ensure that everything is being reported. "It's just a matter of course," White explains. "We have to make sure companies are complying with the law." Many companies have never heard of the law that requires unclaimed property to be turned over to the state after five years, she says, adding that only a few have been found to have willfully withheld unclaimed property.  

Her office has five or six audits going at a time, and none of the three auditors is working on First Data full-time. The First Data audit, which was initiated last year, is expected to take at least another year.

Niehaus declined to discuss either First Data's state contract or the unclaimed-property audit.


Julissa Molina is scheduled to go on trial in May on charges of assault and disturbing the peace at last July's First Data forum.

But Terry Graham isn't counting on the criminal courts. She's also filed a civil suit seeking compensation from Molina, First Data, Western Union and the Hep C Connection, a Denver non-profit agency. The Hep C Connection is listed as a defendant because it's funded by a foundation established by First Data and Western Union. Molina manages the Hep C Connection's Multicultural Outreach Program and attended the forum as part of her job to reach out to the Latino community, according to Graham's suit. Hispanics are infected by the disease at a rate at least 20 percent higher than that of the general population, according to group's website.

Graham claims that First Data failed to provide a safe environment at the forum. She's also claiming ethnic intimidation.

Molina hit back with a counterclaim for alleged abuse of process, malicious prosecution and outrageous conduct.

Robert Corry, Graham's attorney, says he's expecting that counterclaim to be dismissed. He's also requested that the Denver District Attorney's Office increase the criminal charges to include theft of the tape from Graham's recorder.

"It seems like the other side is holding media conferences like it's a movie premiere, and we're just going to wait for the trial," says Frank Moya, Molina's attorney. (He advised Molina not to comment for this story.)

"Bottom line is, she just attacked me," Graham says. "We're losing our country, whether it's just plain corporate greed or whatever."

But it was Graham who went on the attack January 29, when she posted a story on www.vdare.com, the website of the non-profit Center for American Unity, about a survival guide for immigrants that the Colorado Department of Education had posted on its website. The guide instructed illegal immigrants to get a matricula consular ID and gave tips for run-ins with the police, who are there not to report them to immigration, but to serve and protect everyone, according to the guide. It also told them to enroll their kids in schools, and about special services for students in need.

On the front page, Governor Bill Owens gave readers a warm welcome, telling them he appreciated the newcomers' contributions to the economy and this state's culture, and that the guide would help them adapt.

Until Tancredo got wind of it. "The booklet is quite obviously aimed at illegal aliens more than legal immigrants," he wrote the governor. "It tells illegal aliens how to take maximum advantage of Colorado's government-funded social services and how to seek employment at companies that will not try to verify their documents."

"When something was brought to light that the governor might not have supported, it was reviewed, a few things were removed by the Department of Education, and they put it back up on the website," says Dan Hopkins, Owens's spokesman.

According to William Moloney, Colorado's Commissioner of Education, the survival guide had been on the department's website for two years before Tancredo went after it. "As I understand, there were legal opinions of a questionable provenance," he says. "Everyone agrees that 99 percent of this stuff is good stuff."

First Data Western Union Foundation was listed as a primary sponsor of the guide, which reminded readers that they could use Western Union to send money back to Mexico.

Tancredo says he's met with First Data officials on at least one occasion to discuss immigration issues. "But I am not going to stop doing the things I'm doing, nor am I going to stop pursuing what I believe to be the most important kind of domestic-policy agenda that we could possibly have in this country," he says. "And then they'll have to do what they have to do."

Niehaus expects Congress to start immigration reform this session. Members of both parties agree that the Mexican border needs to be brought under control and that some type of guest worker program should pair willing workers with employers who can't find U.S. citizens to work in the fields or the kitchens. President Bush mentioned both the border and a guest-worker program in his most recent State of the Union address but avoided discussing what to do with the millions of immigrants who are now here illegally.  

"That's where the devil is going to be," Niehaus says. "In the details."


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