Trial by Wire

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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.

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Luke Turf

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