Editor's Note: Here are parts 6 to 10 of United Press International's Homeland Security series.
Part 6: Security locks up the immigration
By MARK BENJAMIN
WASHINGTON, Feb. 8 (UPI) -- Mexican President Vicente Fox strode on to the U.S. House floor Sept. 6 to address a joint meeting of Congress and delivered a simple message: a new era of trust should mark relations between Mexico and the United States, punctuated by a marked relaxation in immigration law.
"I am sure that many on both sides of the border would rather stick to the old saying that 'good fences make good neighbors,'" Fox told a packed House chamber. "But circumstances have changed. We are now bound closely together."
At the time, Fox had behind him the tacit support of President Bush, who that day had announced he was "willing to consider" a plan for millions of Mexican workers already in the United States to become permanent residents, though they had entered the country illegally.
Fox said the two countries should agree on that plan by the end of the year.
Five days later, three airliners crashed into the World Trade Center and the Pentagon, and one crashed in the Pennsylvania countryside. Three of the 19 terrorists involved were illegal aliens, according to the Center for Immigration Studies.
On Jan. 25, just four months after the attacks, Bush announced that he would seek to double the number of Immigration and Naturalization Service agents patrolling the borders from 9,000 to 18,000 and increase the INS enforcement budget by $1.2 billion.
Congress is also quickly moving a bill that would create "biometric" student visas to match students' physical characteristics, like eye scans, to their true identity by October 2003. The administration has already pledged to have up and running by the beginning of next year a system that will require educational institutions to keep better track of the 547,000 individuals inside the U.S. on student visas.
(The government admits it knows little about where those students are or what they are doing. The government also says that Hani Hanjour, who allegedly flew American Airlines Flight 77 into the Pentagon, entered the country using a student visa.)
According to CIS, a non-profit think tank in favor of strong enforcement of immigration laws, new census data indicates that 115,000 people from Middle Eastern countries live in the United States illegally.
The attacks have galvanized proponents of limited immigration and tight borders who are using them to fuel a much more aggressive agenda to crack down on illegal immigration and establish a new army of INS agents to track and hunt down law breakers who abuse U.S. visa or immigration policies.
"After Sept. 11, people in Washington began to think about the need for borders and what we need to do in order to protect American lives and property," Rep. Thomas Tancredo, R-Colo., told United Press International. "That is the thing that the Constitution establishes as our primary responsibility."
Tancredo leads a congressional delegation opposed to broad-scale relaxation of immigration law and in support of spirited enforcement instead.
"If you think we need a border, then you have to think about what that means in terms of enforcement," Tancredo argued. "That means, determine how many people come into the United States, for what purpose and how long they will stay."
Some of Tancredo's supporters envision a high-tech system that accurately tracks the identity of all individuals entering and leaving the country, a de-facto national identification card patched together by standardized state drivers' licenses and placing new requirements on employers to verify the legal status of potential employees in order to make the U.S. labor market particularly inhospitable to illegal aliens.
Immigration advocates are on their heels as their opponents, like Tancredo, ride a swell of concern over national security. Immigration advocates worry that their opponents will ride that swell too far and use steps ostensibly designed to isolate terrorists for a broad-scale crackdown on immigrants, mostly from Mexico or Latin America, who simply seek gainful employment.
"That has always been our greatest fear," said Lawrence F. Gonzalez, Washington office director of the National Association of Latino Elected and Appointed Officials. "Guys like Tom Tancredo are saying, 'Let's round them all up.'"
Advocates of tight borders said the immigration debate has now reached a pivotal moment: the government must decide whether security threats will push politicians to tackle the politically prickly, complicated and expensive security challenges posed by immigration policy.
"It might be harder in the future to sneak into the United States or stay past your (visa) due date, but it is hard to tell," Krikorian said.
"Experience has shown us that Congress boosts enforcement to respond to a particular political situation, corporate and ethnic interests flex their muscles and Congress backs off."
For example, the administration now says it will establish an electronic entry and exit system and move forward with plans to track student visas. President Bush has proposed spending $380 million next year to establish that high-tech system that would track people entering and exiting the United States. Bush has said he wants that system in place by 2004.
But Canadian Deputy Prime Minister John Manley is pressing the United States to make sure that system does not apply to any Canadians in the 200,000 vehicles crossing that border every day.
At a Feb. 2 meeting between Homeland Security Director Tom Ridge and Manley at the World Economic Forum in New York, Ridge pledged to exempt Canadians from that system.
"I assured him that we understand we've got a very unique relationship with them," Ridge told reporters later the next week. "I think this is geared -- this is not geared to Canada, but basically the balance of the world."
Both leaders are worried about upsetting $1.3 billion in trade on that border every day --- but exempting Canadians has angered administration critics, who said exempting Canadians from that system opens an obvious vulnerability.
Congress passed legislation to set up a similar system in 1996 in a bill that would also require colleges to track student visas, but later put the plan on the back burner because of inordinate cost and political pressure from colleges and pro-immigration groups, immigration experts said. And even if the administration establishes the student visa-tracking program, there are no plans to put together the army of INS enforcement officials needed to enforce it.
The biometric visa bill now in Congress would also establish biometric passports to attach an international traveler's identity to his physical characteristics, such as fingerprints or eye-scans. That bill would also create a massive database to help those key agencies cooperate on tracking and identifying potentially nefarious individuals.
But the bill relies heavily on technology that has never been used on such a grand scale, assumes that the government will spend billions to put it in place and requires the cooperation of governments around the world to follow suit and begin issuing biometric identifications. It also would not apply to Canadians.
"The practical question is, 'Can we do a better job of monitoring and controlling our borders?'" said CIS Executive Director Mark Krikorian. "The answer is 'yes.'"
"The other question is political," Krikorian said. "Is having 3,000 people buried in Manhattan enough to get Congress to do something about that?"
The scattered plans reflect that after Sept. 11, security is the focus of immigration policy. But experts disagree on what the United States should do about it. In the uncertain political playing field, opponents and proponents of immigration worry how the war on terror will affect their cause.
"I know there is a lot of opportunism going on this town," Frank Sherry, executive director of the pro-immigration National Immigration Forum agreed.
The discussion in Congress of a national identification system is one development that has startled immigration advocates and civil libertarians alike. A national I.D. card system, those advocates worry, might isolate illegal immigrants, cut them off from work and drive them into the light where INS agents could apprehend them --- or simply make the United States an inhospitable place to function without that card.
The concepts are anathema to immigration advocates but on the agenda for border control advocates.
Prior to Bush's funding announcement, the White House had tossed around more aggressive plans. The White House briefly considered a revolutionary plan that would combine and boost the enforcement capabilities of the INS, U.S. Customs Service and even parts of the Agriculture Department and Coast Guard. The goal would be enforcement of immigration law.
Lawmakers on Capitol Hill said the plan to combine enforcement duties, drafted by Ridge, has now been torpedoed by Bush's own deputes scrambling to keep hold of their own departmental turf.
"Ridge got his teeth knocked in," one House GOP member said.
Instead, the Bush administration has been mostly focusing on making trade safer.
The government has been scrambling to establish short and long-term plans designed to weave a high-tech security apparatus into the torrent of trade humming in and out of U.S. ports, bridges and airports, after decades of trying mainly just to facilitate trade. Now, government experts want to improve security without grinding the economy to a halt.
"We are working with Canada and Mexico to institute smart borders that will keep terrorists out, while letting the flow of commerce in," Ridge told the U.S. Conference of Mayors Jan. 23.
"Mayors on bordering communities ... to Mexico and Canada understand it's not only about making your borders more secure, but we have to facilitate the flow of goods and services, and people across those borders, because it has economic implications."
Advocates of tighter borders predict that the government will not do enough for security for political reasons, including the Hispanic vote.
"The reason why there has not been a full exploration of the connection between security and immigration is because everybody is afraid of it," Krikorian said. "They are actively doing the old, 'Pay no attention to the man behind the curtain.'"
Next: Passengers and freight are security threats above our heads
Part 7: Safe air travel? not yet
By NICHOLAS M. HORROCK
WASHINGTON, Feb. 8 (UPI) -- At 12:16 p.m. on Sept. 11, 2001, three hours after the first airliner had hit the World Trade Center, there were no private aircraft in the skies over the United States.
Nineteen men armed with box cutters had grounded the greatest commercial air fleet in the world, crippling the aviation industry of the nation that beginning with the Wright Brothers had led the world to the aviation age.
Save for the excruciatingly tragic loss of life in the Pentagon and at the World Trade Center and in Pennsylvania, the terrorist's most crippling blow to this nation was to the aviation industry.
In the months since that fateful morning, the economic fallout of the aviation disaster has reached across the nation and around the world.
Award-winning chefs were laid off in San Francisco, resorts in Las Vegas and Honolulu shut their doors, aircraft workers were idled at Boeing in Seattle, and hotels in New York went to 20 percent occupancy.
Suddenly, a marvel of the late 20th century U.S. economy, cheap and easy air travel, had come to a halt, undermining all business, crippling the hospitality industry and cutting especially into advertising.
Marketing firms abandoned the face-to-face sales contact, professional conventions were cancelled, school trips foregone, family vacations postponed and trains and highways filled with travelers too anxious to fly.
Perhaps no person was as acutely aware of the disaster to air travel as President Bush. A few days after the terrorist attacks, he flew to Chicago's O'Hare Airport to cheer up American and United Airline employees who were still burying their dead colleagues. He pledged that the U.S. government would take over the security of America's 429 commercial airports, ordered the National Guard to guard baggage screen posts and put armed marshals aboard America's air fleet.
Now nearly six months after the terrorist attacks, the American aviation industry is still struggling to regain normalcy and the Bush administration has learned how complex and difficult the job of securing 600 million air passengers a year really is.
Part of the delay was an angry political tiff on Capitol Hill over whether the 28,000 baggage screeners in the nation should be private or federal employees.
A hard core of the president's own party feared recruiting this many federal employees would renege on the Republican commitment to pare down the federal service and were anxious that these new employees would join the Democratic leaning government unions.
It took eight crucial weeks to resolve this disagreement and pass the Aviation and Transportation Security Act that Rep. John Mica R.-Fla., chairman of the House aviation subcommittee, calls "the most massive overhaul of aviation and transportation security in the history."
Congress compromised on the baggage screeners, making them federal employees but limiting their right to federal job protections and denying them the right to strike.
The bill created a new government bureaucracy, the Transportation Security Administration, which this month takes over all security operations of the Department of Transportation including baggage screeners, sky marshals, airport security officers and a phalanx of federal managers. When recruiting is complete, TSA will be larger than the FBI and the Immigration and Naturalization Service combined.
Even once the bill was signed, action was delayed because the Senate recessed without confirming Bush's nomination for the undersecretary of Transportation, John Magaw, a former head of the Secret Service to carry it out. He finally took office last month.
The continuing vulnerability of air travel to terror is not theoretical. Only a few weeks ago, Richard Reid boarded an American Airline's plane in Paris allegedly wearing shoes rigged with explosives. Crew members said they noticed him trying to light his shoes with a match. He was wrestled down and tied to his seat by passengers and crewmembers.
And following that, a 15-year-old student pilot stole a plane in Tampa, Fla., and flew it into a building.
With 600,000 civilian pilots and 200,000 small planes, Mica suggested at a recent hearing that "we may never be able to stop or prevent an act of suicide by a civilian aircraft."
Only last month, San Francisco's crowded airport was cleared after a man's shoes triggered explosive-detecting alarms. The screener gave the man back his shoes and went to find a supervisor. The man disappeared before authorities could question him.
The FBI said it doesn't know whether he was a potential terrorist or had explosive particles on his shoes from some more benign source like the nitrogen in lawn fertilizer.
It will take a year to recruit and train some 31,000 baggage screeners and supervisory personnel provided for by Congress. John Magaw told a meeting of the nation's mayors in Washington that the federal government hopes to be able to actively take over security in as many as 40 to 60 airports a week by spring with a target of having all the airports under federal control by Dec.31.
The new screeners will be paid in the range of $20,000 a year, have to speak and deal with the public in English, undergo a background security check and be trained on all aspects of their equipment.
The new screeners "will be qualified, trained, uniformed, highly effective and they will be a proud force," said Magaw, who has spent nearly 40 years in law enforcement.
"I view the screeners as the front lines here at home," Magaw said, emphasizing that they are a key element in reassuring American passengers.
Meanwhile, no airport has federal screeners, although in the next six weeks pilot groups will be tested at the Baltimore Washington International Airport.
Still in place are the National Guard soldiers and local police, providing muscle and sometimes supervision to the same low paid privately employed screeners that were on duty on Sept. 11.
Beyond the passengers are the bags. Prior to Sept. 11, the estimated 1.5 million pieces of luggage that are checked by passengers annually to be carried in the plane's cargo hold were not screened for explosives, nor matched up with the passenger.
On Jan. 18, the Transportation department began examining bags under the terms of the Aviation Security bill.
"We began meeting requirement for checking all baggage, screening either by machine, by manual searches, by bomb-sniffing dogs, by trace detectors or by matching each piece of luggage to a passenger on board," Magaw told a House committee last month.
But members of the committee said that well before every bag can be screened for explosives, every bag can and should be matched to a passenger on every flight. This was the sharp lesson of Pan Am 103's destruction over Lockerbie, Scotland, where a bomb rigged bag was checked through from Frankfurt to London to the United States, but no passenger was matched to the bag and it blew up with a pressure fuse, killing 270 Christmas travelers.
Beyond matching is explosive detection. Explosives can be sniffed by dogs, but considering that dogs are needed to detect explosives at the Peace Bridge in Buffalo, N.Y., and at the Super Bowl and the White House and a myriad of other places, there is a major shortage of dogs.
A special scanner that is as big as a Sports Utility Vehicle is the best machine to detect explosives. The United States, Magaw said, has 161 of these machines and needs 2,000 to service all the airports. The two companies that manufacture the machines, he said, cannot produce sufficient new ones to meet these needs in a timely fashion and he is trying to persuade the manufacturers to allow other companies to produce them.
There are hand-held explosive scanners, but they are too few and they do not work as well, according to congressional staff members.
Mica and members of his committee went to Europe in January to study safety measures there.
"It was apparent," he reported at a hearing last month, "that integrating explosive detection equipment into the airport environment will be much more difficult than many people realize.
"If the aviation industry and the flying public were concerned about the chaos created when the new baggage system was installed in Denver, imagine the challenge of retrofitting 400 United States' airport's baggage systems in the next 11 months," Mica said.
Rep. James Oberstar, D-Minn., may have summed it up at last week's hearing:
"I think the airlines clearly understand that if people aren't getting back on airplanes, it's not because the fares are too high, it's because the public's anxiety level is too high. And the way to get the anxiety level down is to get the security bar raised."
Next: An exploration of the new technology of security
Part 8: New devices for national security
By CHARLES CHOI AND DEE ANN DIVIS
WASHINGTON, Feb. 8 (UPI) -- Scanners that screen for everything from plastic explosives and biological weapons to deceit on the faces of airline passengers may become tools in securing U.S. borders against terrorism.
Aimed at improving security without slowing down commerce, the new devices will have to contend with the hundreds of millions of people, trucks, shipping containers, airplanes and vehicles that pour over the border every year.
Many of the emerging technologies were supported by Defense Department projects. Among them is face recognition software--developed with the aid of the Office of Naval Research in Arlington, Va.--that eventually could be deployed in the nation's airports.
The most widely used facial recognition software today originally was nurtured as a research project at Rockefeller University in New York to aid ONR's neural computation program. The software analyzes the placement and angles of between 12 and 40 facial elements. The arrangement of these elements, like the eyes and nose, remains constant irrespective of the angle from which the face is viewed.
"It captures a face and converts it to a digital code," explained Joseph Atick, president of Visionics in Jersey City, N.J. "You can implement it as checkpoint surveillance in a walkthrough situation or in a physical border--for instance, requiring drivers to roll down a window of their car as a requirement for entering the country."
A "faceprint" file is only 88 bytes in size, which enables quick cross-referencing.
"In terms of accuracy and being able to handle large databases of photos, it's the best we can do right now," said neural computing program officer Thomas McKenna of ONR, which sponsored the technology.
There are other types of scanners that use such unique physical information--called biometrics--to match individual identities.
Retinal scanners map the unique pattern of blood vessels in the retina with a low-energy laser. Iris recognition technology analyzes the colored ring in the eyeball. Like fingerprints, no two retinal blood vessel patterns or irises are alike. Such scanners, when used with databases of retinal or iris prints, have the potential to keep known terrorists and criminals out.
Legislation now under consideration in Congress would mandate that biometrics be used on key travel documents, particularly visas and some passports. Sponsored by Sen. Edward Kennedy, D-Mass., bill S. 1749 would mandate the Department of State begin issuing "tamper-resistant, machine-readable" travel documents with biometric identifiers.
The bill also requires aliens entering from countries that have a visa waiver program with the United States to have passports with "standardized biometric identifiers."
Biometric data also has been suggested for inclusion in a national identification card. These cards, perhaps replacing existing driver's licenses, could be used as a form of identification--for example, when boarding an airplane.
Though there are many variations on this more controversial proposal, the fundamental idea is to have a "smart card," perhaps similar in appearance to a credit card, with a magnetic strip or computer chip that contained key data. Biometrics and other measures, such as an imbedded hologram, would make the cards difficult to counterfeit, say proponents.
Some advocates want to see the card used for commercial transactions as well, just like a credit card.
"The potential is endless and the amount of information that can be stored on the cards is virtually unlimited," explained a spokesman for EDS, a leading supplier of smart cards. "Basically it has a computer ship and you can store any type of information in there--whether it's biometric information, fingerprints or facial structure. You can even go so far as putting DNA coding on there. It would all depend on what types of information the individual client wanted on the card."
To make the cards viable though, they need to be standardized, say proponents. Sen. Dianne Feinstein, D-Calif., is working on legislation to form a biometric technology clearinghouse that might move the process forward.
The organization "would bring together a number of the different agencies that are involved in this in a public private partnership to develop the best possible biometric information to be used on information cards," said a Feinstein spokesman.
"The idea is to have a public private organization so that we can take advantage of what is out there in the private sector," the spokesman told United Press International.
Data from smart cards might someday find its way into yet another system proposed to improve flight security. This system, being suggested by private companies to the government, would use current fraud detection software to try to identify travelers that might have terrorist intent.
HCN Software, leader of one of at least two teams working on the idea, uses software with artificial intelligence algorithms to detect patterns of out-of-synch buying behavior. They collect data from a wide array of banks, combine it with other data like addresses and search for patterns experience has shown indicate possible credit card fraud. The same approach of searching for unusual, risk-indicative patterns, they say, can find possible terrorists.
"We will take reservations data, and apply these algorithms to score them for risk that a passenger is intending to commit a terrorist act," Joseph Sirosh, HNC executive director of research and development told UPI. "If the score is high (the passenger) will be put into a category that is directed to security people for closer screening. This will be screening at the airport ... before the passenger boards the aircraft."
The software would sift reservation information plus publicly available data like addresses and phone numbers--possibly adding credit card purchases and other restricted information if permission is granted. It could rate the risk of a particular passenger in a matter of seconds of a ticket purchase, said Sirosh--well in advance of the
flight leaving. Because only computers, and not investigators process the data, privacy is protected, he said.
The neural-network system also actually learns as it operates.
"As they see more and more data (the systems) improve themselves on a constant basis and identify what is abnormal and what is normal and clearly learn to separate the two," explained Sirosh.
The system should be ready for demonstration six to eight months and could be in place at airports in as little as a year thereafter if the government and other interested parties agree. It is not clear yet who would actually operate the system or how much it would cost.
"The Government wants a lot of control," Sirosh noted.
The initial data on terrorism behavior for the HCN system will come from a clinical psychologist who worked on counter-terrorism efforts with the government in the late '80s. Accenture, the other firm reportedly developing such a system, declined comment for this report for security reasons.
Though these measures may aid in the identification of terrorists, they do little to stop bombs or suitcases concealing bioweapons.
Scientists at the Naval Research Laboratory in Washington are working on low frequency radio wave pulse generators that swiftly and safely detect explosives concealed in luggage, mailboxes or on people.
The radio waves momentarily disturb the alignment of atomic nuclei, causing them to emit unique weak radio signals. Sensor coils then detect these signals, which computers analyze to determine the type of material found.
"They've installed the scanners in a small number of airports now," ONR's Audrey Haar told UPI, regarding information she received from the Federal Aviation Administration.
The Defense Department also is looking through more than 12,000 different proposals for new counter-terrorist technologies. The proposals arrived in response to a Pentagon request made in October for new ideas.
"We have them from all sorts of companies, large and small, as well as from individuals and educational institutions," said Maj. Michael Halvig of the U.S. Air Force. "We're not putting a definitive time on when the review process is finished yet ... it will take months probably, one or two, but maybe three or four."
Among these proposals is an acoustic scanner for explosives and radioactive material. The company submitting the idea, Eurotech Ltd., of Fairfax, Va., already has demonstrated the technology for government contractors and U.S. Air Force personnel. The device would screen large volumes of cargo and luggage using sound waves to detect the unique acoustic fingerprints of various materials and help monitor shipping containers from planes, trains, buses and ships.
"This can scan moving objects, such as a truck passing through a weigh station security point," said Don Hahnfeldt, president of Eurotech. "This can also be retrofitted to work with current technologies as well, such as metal detectors at airports."
In several years, thermal sensors also may help detect lies and biological or chemical weapons. Researchers at the Mayo Clinic in Rochester, Minn., and Honeywell Laboratories in Minneapolis are working with DOD to develop an infrared camera that monitors flashes of heat that develop around the eyes whenever a person lies.
"This kind of technology really is a screening tool that goes along with many other security tools to identify individuals at risk of committing acts of terrorism," said lead researcher James Levine of the Mayo Clinic. The scientists believe the camera may find use at airports and border checkpoints within the next two years.
Researchers at the University of Delaware in Newark are working on a thermal camera-on-a-chip that would be thousands of times faster at identifying possible chemical weapons than existing laboratory-scale infrared sensors.
The camera would detect the unique infrared signature given off by every chemical. Because the chip has no moving parts, it would be rugged enough to be deployed in the field to detect airborne or container-bound biological or chemical warfare agents.
"Right now, the camera for this system cost $40,000, and it has a limited range," said analytical chemist Doug Elmore of the University of Delaware. "It sounds like a lot of money, but the camera that we're using probably cost over $1 million 10 years ago. There's good reason to expect the price to go down considerably in coming years."
Installing new technologies and expecting them to analyze every person and container moving through the 301 ports of entry into the United States will prove a challenge, however.
"In fiscal year 2001, 11,186,909 trucks were processed entering the country through both borders; 214,610 vessels; 2,257,608 rail cars; and 5,709,974 sea containers. So that gives you an idea of the volume," said U.S. Customs Service officer Jim Michie.
"It's a task that's going to take a great deal of planning and a great deal of cooperation between this country and Canada as well as Mexico."
Next: A bank loophole that could become a "national security threat"
Part 9: Bank loophole despite terror war
By KATHY A. GAMBRELL
WASHINGTON, Feb. 8 (UPI) -- Although President Bush announced a new assault on the finances of terrorist organizations, the administration has yet to close a tax code loophole that immigration-reform groups say allows American banks to open financial accounts for illegal immigrants using government-issued numbers requiring little documentation or proof of identity.
Immigration-reform groups are upset that the U.S. Department of Treasury has no plans to review the 5-year-old law that allows foreigners with non-legal immigration status to open checking and saving accounts, and conduct wire transfers, using government-issued taxpayer identification numbers.
"It's a national security threat. Nobody looking at that situation on Sept. 11 could think for a minute that this is OK," said Dean Stein, executive director of the Federation of
American Immigration Reform. "You've big financial interests involved. We all love the story of immigration. It's a great story, but when you clear away the eyewash, it's about making money. It's about greed."
Taxpayer identification numbers, or TINs, are similar to Social Security numbers but require less proof of the applicant's identity. Issued by the Internal Revenue Service, they allow non-legal immigrants who work to file tax returns.
More than 5.3 million TINs have been issued since the law was changed in July 1996, IRS officials in Washington say.
IRS spokesman Tim Harm said TINs were intended to allow individuals to file taxes not open bank accounts. FAIR, however, objects to illegal immigrants using the numbers and says TINs, and through it the IRS, tend to accommodate their illegal presence in the country.
Immigration-reform advocates say that after Sept. 11, money could be moved out of the United States and into the hands of terrorists operating in foreign countries. They say the government should tighten regulations surrounding government-issued identity documents.
Banking industry officials said the U.S. tax code was changed five years ago, giving non-legal foreigners the ability to file tax returns, but TINs have become widely accepted as identification to open accounts. At some banks, only a TIN number and some proof of address are needed.
"It basically allows an individual regardless of their (immigration) status to open up a banking account," said James Ballentine, director of community development for the American Bankers Association, an advocacy group for U.S. financial institutions. "It was a measure that was put in place so that immigrants would have an opportunity to have access to the financial system as we have to really get them to open checking and savings accounts and also in an effort to help them to wire money back to their country by putting it in a regulated financial institution."
He says the law was written to prevent working immigrants from keeping large amounts of cash with them and becoming victims of crime. The program has gained steam in the past few years, particularly among Hispanics, he said.
Ballentine also said the relaxed criteria meant non-legal immigrants could open accounts without fear that banks would turn over their personal information to the Immigration and Naturalization Service.
Immigration-reform advocates say, however, that banks and the government allow foreigners to live and work in the country illegally and to benefit from tax credits, opening the door to fraud and illegal activity.
Stein says financial institutions together with state and local officials lobby the IRS for the use of less-stringent documentation or a requirement that individuals seeking to open accounts have Social Security numbers.
He said the banking profits from fees generated from wire transactions between foreigners and their home countries.
"The administration has to take the lead in this area. The president staked out a position and set a tone two years ago that is so completely out of step with the political reality of the times."
Michele Waslin, senior immigration policy analyst with the National Council of La Raza, called the TINs a good thing for undocumented workers who want to pay taxes.
"They want to follow the law and be good citizens living in the United States," Waslin said.
She said undocumented workers were encouraged by advocacy groups and law enforcement to place their money in bank accounts to lessen the chance they would become victims of crime.
"No one wants to be undocumented, but it's not easy to become legal," Waslin said. Also, she said, they can, in some states, be used to obtain driver's licenses.
"The feeling is that undocumented immigrants are going to drive. They should be allowed to do so safely," Waslin said. "It's a public safety issue.
Treasury Department officials said they had no plans to review bank accounts opened by non-legal foreigners using TINs, or to track cash passing through those accounts.
"We are always encouraging banks to know who they are dealing with and to properly identify them," said Dean Debuck, a Treasury Department spokesman, told United Press International.
TINs are intended for foreigners who need to file tax returns but are ineligible for Social Security numbers.
Under the tax code, those applying for TINs are required to fill out form W-7, which asks the applicant for basic information. It requires the submission of the original or notarized copies of one or more of the following: a driver's license, an identity card issued by a state or national government authority, birth, marriage, or baptismal certificates, foreign military or military dependent identification card, school records, or a foreign voter registration certificate.
Typically, an individual seeking to open a bank account in the United States is asked for a driver's license, passport, birth certificate, Social Security number or another form of government identification. In some cases, a credit-history review is performed.
Treasury and IRS officials could not say whether background checks were performed on foreigners applying for TINs. The forms used to acquire the number do not indicate that the applicant is subject to any investigations.
The process takes about four weeks to six weeks before the applicant is notified in writing, W-7 says.
Last October, President George W. Bush ordered the Treasury Department to monitor and freeze the assets of individuals and organizations associated with terrorist organizations and their financial backers. Since then, the Treasury has blocked more than $33 million in terrorist assets inside the United States. Other nations, mostly at the request of the United States, have blocked another $33 million of terrorist funds.
The directive blocks some American banks from doing business with entities tied to groups identified as funding terrorist activities, but puts no restrictions on undocumented aliens freely opening accounts.
But the ABA's Ballentine says allowing non-legal immigrants to open accounts reduces the chance of them using hawala transactions, an underground wire-transfer service, to send money overseas.
From the Arabic word for trust, the Hawala trade has gone on for centuries in the Middle East, South Asia and China, traditionally in small villages. They were once used to help trade. Immigrants typically use them to wire money to their families abroad.
People using hawala go to an operator and turn over the money they want wired along with a fee; they get a code in return. The hawala operator then calls or e-mails a "branch" in the area to which the money is destined.
The recipient gives the code to his or her hawala operator --- who typically receives a commission -- for the money. The transaction's paper trail is then destroyed.
In November, the Treasury Department cracked down on a number of hawala operations with links to suspected terrorist mastermind Osama bin Laden's al Qaida organization. The move affected not only al Qaida but also the financial lifeline that some immigrants living in the United States provided to their families abroad.
Ballentine said easier banking standards for immigrants typically served populations that maintained low account balances. Individuals with $10,000 or more would likely raise questions among bank officials or regulators, he said.
By law, bank regulators scrutinize financial transactions involving $10,000 or more. But federal authorities said wire transactions between terrorist suspects accused of participating in the Sept. 11 attacks and their associates in other countries involved relatively small amounts of money sent through American wire services.
FAIR's Stein, however, compared TINs to consulate-issued Mexican identification cards now being widely used in Western and Southwestern states.
The Wells Fargo Bank in California announced in November it would accept the cards as documentation for setting up bank accounts in its U.S. branches.
MetroBank in Houston announced it would open accounts for Mexican nationals living in the city if they can produce a consular registration card--a matricula consular--issued as identification by the Mexican consulate, according to American Banker, an online banking industry magazine.
"We're in business to make money, so we're constantly looking for ideas like this," said Allen Brown, the chief executive officer of $732 million-asset MetroBank told American Banker.
Next: The economy and trade: What is at stake with border security?
Part 10: Balancing the economics
By IAN CAMPBELL
From complacency to fear: the murder of thousands of Americans Sept. 11 has created an urgent new agenda in the world's richest and most powerful country. How can the United States secure itself from terrorism while at the same time maintain its freedoms, among which is its freedom to trade, upon which U.S. and global prosperity is built? What are the costs of protection and restriction? Where should the balance be struck?
The question of costs is a big one, and not only for the United States.
The costs are not just ones of expenditure but also costs of trade and opportunity if the United States chooses to restrict the passage of goods and people through its borders. The cost might also be one of reducing U.S. influence overseas if this traditionally open superpower is forced to become more nervous and less welcoming.
It was perhaps this risk that President George W. Bush sought to address in his State of the Union address when he said that a USA Freedom Corps would be created and the Peace Corp of volunteer workers overseas would be doubled. The United States is becoming more "vigilant," Bush was asserting, but it still sought to embrace the world.
The first element of the costs of greater security is easiest to quantify because it is just that, a cost. Bush has announced plans for the 2003 budget that raises spending on homeland security $37.7 billion, almost double the $19.5 billion in the 2002 budget. The Border Patrol and the Immigration and Naturalization service will receive additional funds. More money, personnel and equipment will be invested in making the U.S. ports, airports and borders more secure. The effort will extend overseas, with attempts to eliminate dangers by monitoring foreign ports and exporters more closely.
These measures seem essential yet they may themselves be dangerous. The United States has a huge domestic economy and exports and imports each amount to not much more than one-tenth of U.S. gross domestic product. But the global economy depends on the demand for imported goods from the world's biggest economy.
If the United States spends more time inspecting imports at its borders, or even cuts their inflow from less secure origins or companies, the international impact will be negative. And if the United States imports less, other countries will import less production from the United States.
Security could usher in an unwanted and damaging protectionism.
The concerns about this are nowhere greater than in Canada and Mexico. For both these two neighbors of the United States and fellow members of the North American Free Trade Agreement trade plays a far greater role in national output and therefore in employment and income than in the United States. And they send about 85 percent of their exports to their mutual neighbor. A slowdown in the U.S. economy has dragged the Mexican economy into recession and has brought the Canadian economy close to it. Restriction of exports into the United States would undo some of the good work of the NAFTA and have a permanent deleterious effect on Mexico and Canada.
But the threats from trade and to trade are only one part of the security problem. Dec. 11, an alliance of Canadian business organizations produced a report entitled Rethinking Our Borders. The report addresses many aspects of the security threat. It is indignant about the perception that Canada is a weak link for the United States: the hole through which some of the terrorists of Sept. 11 entered the United States. It calls such reports "erroneous" yet it admits that Canada's government needs to devote more resources to immigration laws and must address "the failure to enforce [immigrant] removal orders, the increased use of locally engaged staff at (overseas) visa offices, and the institution of interview waiver criteria that have increased the potential...for security risk."
Perrin Beatty, president of the Canadian exporters and manufacturers association, says it now appears that none of the 19 terrorists associated with the Sept. 11 attacks entered the United States via Canada.
"It is vital," Beatty asserts, "that the (U.S. and Canada) trading relationship be protected and nurtured."
There have been "long-standing problems that existed before Sept. 11," Beatty says. Trade between the two neighbors, at 200 million border crossings per year, had overwhelmed the levels of infrastructure and staffing. Staff levels on the U.S. side of the border, Beatty points out, remained at 1980 levels. Only now, following the Sept. 11
tragedy, are the twin problems of enhancing the flow of trade across the border and minimizing the security risk from these crossings being addressed with the urgency they deserve.
Beatty finds numerous flaws with border arrangements. He calls for resources to be used "more intelligently." Trucks can be pre-screened. Frequent crossers, such as the 1,600 nurses who cross the border daily to work in the hospitals of Detroit, can be given passes, which include some biometric identification. In this way the border officials will be left to concentrate on the less well-known people crossing the border, some of who may pose a security risk. The chance of catching the "needle in a haystack" will be greater.
But Beatty believes the effort to enhance security must go far beyond this. Canada has a 4,000 mile border with the United States. No matter what resources are thrown at it, the border will always be porous. But, Beatty points out, Canada has "only a handful of international ports and airports."
It is in these ports and in Canadian embassies overseas that the effort must be made to ensure that those immigrants who enter Canada are not criminals or terrorists.
Beatty is concerned about the economic damage that might be done if the effort to enhance security is mishandled. His association states on its Web site that "The tightening of the Canada-U.S. border in the immediate aftermath of Sept. 11 caused lengthy delays that forced some Canadian plants to temporarily reduce or halt production.
While border conditions have improved, the federal government must act to ensure that such a situation does not become the new status quo."
But the report also states another priority for Canada: the need, given Canada's aging population and labor force, for skilled immigrants. Immigration, the report points out, drawing on government analysis, now provides for 75 percent of the growth in Canada's work force and in 10 years will provide for all of that growth.
"Canada needs skilled newcomers...in order to be competitive in international markets," the report points out.
This aspect of immigration as a source of growth is one underplayed in the United States, where rising productivity has been lauded as the country's trump card. But Stephen King, the Chief Economist of HSBC Bank, writes in a report entitled "Decline and Fall," that "part of America's success in recent years has more to do with labor force growth and reductions in unemployment than productivity growth per se."
King analyses GDP growth per person employed.
At 4.1 percent per year, average annual U.S. growth in the five years to 2000 was double that in Germany and three times that in Japan. But if growth is calculated per person employed, the performance gap between the United States and rival economies declines dramatically.
U.S growth, at 1.7 percent per person employed was not so far ahead of Japan at 1.3 percent per person employed, and of Germany, at 1.1 percent per person employed. Thus U.S. growth in the boom of the second half of the 1990s owes less to a productivity miracle than to the ability to absorb more labor-from the pool of unemployed and from abroad, in the form of immigrants-and to profit from doing so.
The role played by immigration in U.S. growth may be underplayed by these statistics. Immigrant labor accepts low-paid jobs, freeing more skilled workers to obtain other employment. Linda Chavez, initially nominated by Bush as his labor secretary, is not alone among U.S. executives in having an illegal immigrant from Latin America offering domestic assistance in the home.
Such assistance, available cheaply, may help raise U.S. productivity and growth. More restrictive immigration laws in Europe means that cheap labor is less readily available and restrictive labor laws artificially raise wage rates. Output and growth suffer.
Part of America's success is the freedom of its markets, including its labor market, where employers accept workers even if they have entered the country illegally.
Irony fences the border. The U.S. government has made increasing efforts to shut off the Mexican border to illegal immigrants but corporate America welcomes those immigrants and U.S. growth has almost certainly been boosted by them.
The United States gains from the fact that it is an open country: open to trade and still reasonably open to immigrants, whether it wants to be or not. Few of those immigrants pose any risk. But again the problem is identifying and apprehending those who do.
Along the Canadian and Mexican borders heightened security persists and immigration officials are working overtime but, according to Roger Maier of the Customs office in El Paso, Texas, waiting times at the Mexican border are no more than half an hour--as against 3 hours in the wake of Sept. 11. And, Maier adds, the heightened security, with more questioning of people crossing the border and more frequent inspection of containers, has meant that more ordinary criminals have been intercepted and we are, in Maier's words, "turning up more narcotics than we ever have."
So the drug traffickers are at greater risk from the border crackdown, but not, perhaps, the terrorists.
Though border security must be enhanced, the answer to terrorism does not seem to lie on the endless Mexican and Canadian land borders. Bush has been right to take the battle with terrorism overseas, attacking the enemy in its camp.
The U.S. assault on al Qaida has meant that the terrorist organization that has proved itself more dangerous than any other to Americans, is on the run.
The question will be, however, not how the overseas war on terrorism develops, but whether the domestic security measures taken prove enough.
If overseas terrorist groups again infiltrate the United States and again murder its citizens, the restriction of trade and travel and immigration within not only the United States but in North America may be stepped up.
Then the risks that terrorism will harm prosperity in the United States and the wider world will grow. A free society and the free parts of the world will become less free and less prosperous. The terrorists will have achieved one of their goals.
