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Arizona Politics 2010: The Year That Was SB 1070

It’s the start of 2011. This is usually when everyone writes top 10 lists for the year just past. I was going to write a “top 10 political stories of 2010 column,” when it occurred to me that was the year of one main significant political story.

Oh, there were plenty of important political happenings. President Obama and the Democrats were crushed nationally in the midterm elections. Arizona said goodbye to Congressman John Shadegg, Congressman Harry Mitchell, and Congresswoman Ann Kirkpatrick, and hello to newly elected Congressmen Paul Gosar, Ben Quayle and David Schweikert.

Our state struggled to balance the budget, and almost every city in Arizona made major cuts in order to balance theirs. Gov. Jan. Brewer’s re-election faced an early challenge from within her own party. During the general election campaign she froze in a televised debate and didn’t seem to offer any tangible evidence of headless bodies in the desert. Then of course she sailed to an easy victory at the polls.

Voters even decided that marijuana should be legal in Arizona (as medicine that is).

None of these other stories came anywhere close to being as significant as the firestorm created by the Support Our Law Enforcement and Safe Neighborhoods Act, more commonly known by its Senate bill number, SB 1070. At one point in the 2010 legislative session, SB 1070 seemed to lack support and was close to being dead. Then tragically, on March 27, southeastern Arizona rancher Robert Krentz was found shot to death alongside of his dog. His ranch sits 12 miles away from the U.S.-Mexico border. SB 1070 found new life and was signed into law on April 23.  Suddenly the nation was abuzz about Arizona. It even became a headline internationally.

Those first few weeks were a little surreal. Almost daily, you could find our local elected officials on national talk shows speaking out in favor or against it. Supporters justified that action was needed to deal with illegal immigration, an issue the federal government was ignoring. Opponents claimed SB 1070 would violate civil rights and lead to racial profiling.

SB 1070 was a little vague, so on April 30, HB 2162 was passed to amend and clarify it.

A boycott was called against Arizona and numerous lawsuits were filed, including one by the U. S. Department of Justice. The day before SB 1070 was to go into effect, a federal judge issued an injunction against a portion of the law that effectively killed it.

You might think that this is where the SB 1070 story ends, but it doesn’t — and that is what makes it such a huge event. Although nationally, numerous jurisdictions and high-profile people were passionate in their opposition, polling showed that it was more popular with the masses. A number of states are discussing similar legislation for 2011.

In the New Year, Russell Pearce, the Arizona Senate president and major sponsor of SB 1070, is continuing to focus on the same issue. With the start of the next Arizona Legislative session, he intends to take on the U.S. Constitution’s 14th amendment dealing with citizenship being granted to anyone born in the U.S. He is trying to prevent illegal immigrants from getting citizenship for their children by fleeing to America and having a baby on U.S. soil.

Although SB 1070 didn’t get enacted, it did serve part of the purpose it supporters intended. Illegal immigrants now recognize Arizona as the least friendly state to homestead in.

I still believe that SB 1070 would not have really fixed the problems it was intended to fix. However, it was successful in driving a complicated issue into the mainstream of discussion on the national level.

Manage Foreign National Employees - AZ Business Magazine Jul/Aug 2010

State And Federal Laws Are Putting More Responsibility On Businesses To Manage Foreign National Employees

Arizona’s Support Our Law Enforcement and Safe Neighborhoods Act, better known as SB 1070, is due to be implemented this month, and will grant expanded investigation powers to police and enable arrest based on an officer’s reasonable suspicion that an individual is in Arizona illegally.

The difficulty for businesses is obvious – employers are the front line for determining work authorization status. They must be responsive to new layers of enforcement that are focused on immigration, and they must avoid discrimination based on national origin or citizenship status. The issues are complex, dynamic and controversial.

Arizona employers will need to protect the continuity of their work force and staffing levels by mitigating the chances that employees could become incarcerated under this new law. Consult with legal counsel and follow this advice:

Organize and audit your company’s I-9 and e-Verify processes to ensure that your employment verification process is well managed. Employers who are found to employ undocumented individuals could face criminal and civil liabilities.

Properly train your company’s first-line receptionist on how to respond to calls and visits from Immigration and Customs Enforcement (ICE) or local law enforcement asking immigration-related questions.

No employee should be interviewed alone by ICE or by a police officer. Any enforcement visit should include a warrant or ICE Notice of Inspection, which should be immediately and carefully reviewed by an attorney.

Advise employees to carry proper government identification with them at all times, such as a valid driver’s license or a Social Security card.

Employees who are in the U.S. on work status should have on them at all times their immigration document evidencing status and work authorization. The law requires that the original documents, not copies, be presented upon request.

What is the risk to employers?

Employers may be prosecuted for violations of state and federal statutes unrelated to the employer sanctions provisions. For example, the deliberate hire of persons illegally in the U.S. may violate federal employment statutes, criminal anti-smuggling or harboring provisions, and trigger investigation for non-payment of employment taxes and criminal fraud. State statutes like Arizona’s Employer Sanctions Law are the most fearsome, with penalties including the loss of business licenses.

The system for verification of employment eligibility is far from perfect, but the penalties for non-compliance by employers can be substantial. Immigration Reform Control Act (IRCA) penalties include fines ranging from $250 to $10,000 per unauthorized employee, and imprisonment of up to six months or both.

Tools for employers

To better ensure that employees are IRCA work authorized, there are some well-recognized tools. The best is the United States Citizenship and Immigration Services’ e-Verify program. Required in Arizona by the Legal Arizona Workers Act, e-Verify is simple and reliable. It requires that the user sign a memorandum of understanding with the USCIS, and it may be used only for new hires, with a few exceptions for designated federal contractors.

The Social Security Administration’s (SSA) Enumeration Verification Service can be used to verify Social Security numbers (SSN), another method to ensure, at a minimum, that the employee’s SSN matches with his or her name and gender. Information on verification of SSNs is available at 800-772-6270 or online at www.ssa.gov/employer/ssnv.htm. This is a simple, free method not requiring a memorandum of understanding, and can be used to check small numbers of names, or if registered with SSA, groups of more than 50 names.

Congress may speak

As Congress debates comprehensive immigration reform and SB 1070 is tested in court, one thing is clear – federal and state governments are making employers the gatekeepers of legal status. Businesses that thoroughly educate all employees about the implications for each individual, their department and the workplace as a whole will remain a step ahead.

Arizona Business Magazine Jul/Aug 2010

Federal Rule Aimed At Stopping Identity Theft - AZ Business Magazine June 2010

Businesses Need To Prepare For A New Federal Rule Aimed At Stopping Identity Theft

Starting this month, the Federal Trade Commission (FTC) will begin enforcing a new law, the Red Flags Rule, to combat identity theft. It regulates most businesses that sell goods or services without a contemporaneous payment. It requires businesses to adopt written policies identifying and addressing red flags of identity theft patterns, practices or specific activities that indicate the possible existence of identity theft.

Since other laws already require businesses to safeguard personal information, the rule’s purpose is to prevent identity theft after personal information is misappropriated. Because the rule potentially applies to a universe of businesses, every business will need to understand the rule, determine whether it applies and comply, if necessary.

The rule requires any creditor maintaining covered accounts to “develop and implement a written Identity Theft Prevention Program that is designed to detect, prevent, and mitigate identity theft in connection with the opening of a covered account or any existing covered account.” A creditor’s administration of its program involves proper program adoption and effective enforcement, training and supervision.

The rule broadly defines a creditor as “any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit.” It defines credit as “the right granted by a creditor to a debtor to defer payment of debt or to incur debts and defer its payment or to purchase property or services and defer payment therefore.”

Basically, anyone who sells property or services without a contemporaneous payment could be a creditor. Virtually every business, aside from pure point-of-sale retailers, falls within this definition. The definition appears to exclude retailers who merely accept as payment credit extended, renewed or continued by third parties, for example, businesses allowing payment with third-party credit cards.

However, the rule’s definitions of account and covered account clarify this point. An account is “a continuing relationship established by a person with a financial institution or creditor to obtain a product or service for personal, family, household or business purposes. Account includes: (i) An extension of credit, such as the purchase of property or services involving a deferred payment; and (ii) A deposit account.”

A covered account is one the creditor offers or maintains that is itself a “continuing relationship” between the customer/debtor and the creditor allowing purchases paid for in installments and over time. This definition includes: (1) an account primarily for personal, family, or household purposes, that involves or is designed to permit multiple payments or transactions, and (2) any other account for which there is a reasonably foreseeable identity theft risk to customers or to the creditor.

Once a creditor determines that it falls within the rule’s broad scope, the program components are straightforward — identify, detect, respond and update. Identifying requires the creditor to identify relevant red flags for the accounts that the financial institution or creditor offers or maintains, and incorporate those red flags into its program. Thus, while many different businesses must comply, the rule states the program be appropriate to the size and complexity of the financial institution or creditor, and the nature and scope of its activities.

Creditors should consider several risk factors and several sources for appropriate red flags to identify. The risk factors include: (1) the types of covered accounts the creditor offers or maintains, (2) the methods the creditor provides to open its covered accounts, (3) the methods the creditor provides to access its covered accounts, and (4) the creditor’s previous experiences with identity theft. Recommended sources for red flags include: incidents of identity theft that the creditor experienced, methods of identity theft the creditor identified that reflect changes in identity theft risks, and applicable supervisory guidance.

Detection requires a creditor to establish policies and procedures to detect red flags that have been incorporated into the program. The FTC encourages adopting policies that require verifying identities, authenticating customers, monitoring transactions and verifying address changes when dealing with covered accounts.

The response requires the creditor to respond appropriately to any red flags that are detected in order to prevent and mitigate identity theft. The FTC suggests creditors consider adopting measures appropriate to their unique risks and aggravating factors, such as monitoring accounts, contacting customers, changing passwords, closing accounts, not opening new accounts and notifying law enforcement.

Updating requires the creditor to ensure the program be updated periodically to reflect changes in risks to customers, and to the safety and soundness of the financial institution or creditor from identity theft. The FTC suggests periodic program review and update to determine changes internal to the creditor and with evolving methods of identity theft and handling.

According to the FTC, there is no private right of action under the rule. However, consumers can file a complaint with the FTC about a company’s program, and the FTC intends to use such complaints to target its law enforcement efforts. Only certain agencies have jurisdiction to enforce the rule, but they have a variety of options at their disposal to ensure compliance, including penalties of up to $3,500 per violation, and injunctions.

Businesses should evaluate the rule’s applicability and, if necessary, implement a compliant program to avoid sanctions. At a bare minimum, the rule requires any creditor to periodically review its operations to assess whether the rule applies to it. Indeed, the FTC suggests that even low-risk businesses should adopt a minimal program. The FTC has published “Fighting Fraud With The Red Flags Rule: A How-To Guide For Business” to help companies interpret and apply the rule. The guide is available at www.ftc.gov/redflagsrule.

Arizona Business Magazine June 2010