Minnesota's legislative auditor is recommending changes to the way the state selects and manages outside vendors who handle sensitive data for the state.

Auditor Jim Nobles' recommendations stem from his examination of a data security breach at a Texas company hired to verify that new hires are authorized to work in Minnesota.

Nobles spent almost four months picking through the state's troubled history with Bellaire, Texas-based Lookout Services, which was hired by state officials in July, 2009. The state was under pressure to comply with Gov. Tim Pawlenty's 2008 executive order to verify all new hires.

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"The selection of the vendor, the management with the vendor, the agreement with the vendor just never was on solid ground and I think the principle reason is the people doing it just didn't take into consideration data security issues that were involved," he said.

In the rush to implement the federal Department of Homeland Security's E-Verify program, state internet technology staff consistently were not adequately involved at the outset or as problems popped up along the way, Nobles found.

A San Diego-area French bakery, along with its owner and a manager, are charged in a 16-count indictment unsealed Wednesday resulting from an investigation by U.S. Immigration and Customs Enforcement (ICE) into allegations the business knowingly hired undocumented workers.

The French Gourmet, Inc, of San Diego, Calif., together with its president and one of the company's managers, are accused in the indictment handed down by a federal grand jury here April 15. The indictment alleges the defendants conspired to engage in a pattern or practice of hiring and continuing to employee unauthorized workers, a misdemeanor, in addition to 14 felony counts, including making false statements and shielding undocumented alien employees from detection.

Also named in the indictment are the bakery's owner, Michel Malecot, 52, and a company manager, Richard Kauffman, 51, both of San Diego. The men are charged with 12 felony counts for making false statements and shielding undocumented alien employees working at the bakery from detection. They were arraigned Wednesday. If convicted, Malecot and Kauffman face a maximum of five years in prison and a $250,000 fine on each count.

The indictment also seeks criminal forfeiture of proceeds gained from the corporation's unlawful activities.

"Employers have a responsibility for maintaining the integrity of their workforce," said Mike Carney, acting special agent in charge for ICE Office of Investigations in San Diego, "This indictment shows ICE's commitment to holding businesses accountable when they repeatedly ignore immigration laws as it relates to their workforce. The goal of our enforcement effort is two-fold, first to reduce the demand for illegal employment and, second, to protect job opportunities for the nation's lawful workforce."

According to the indictment, the company's managers, including Malecot and Kauffman, certified on the firm's Employment Verification Forms (I-9) that the documents they examined appeared to be genuine, and to the best of the their knowledge, the employees listed on the I-9 were eligible to work in the United States.

The managers then put the illegal workers on the company's payroll and paid them by paycheck until they received "no match" letters from the Social Security Administration (SSA) advising that the Social Security numbers being used by the employees did not match the names of the rightful owners of those Social Security numbers.

After receiving the "no match" letters, The French Gourmet, Inc., then allegedly conspired to pay the undocumented employees in cash until the workers produced a new set of employment documents with different Social Security numbers.

In May 2008, ICE agents executed a federal search warrant at The French Gourmet and arrested 18 undocumented workers. During the searches, ICE agents seized employee and payroll records as evidence in the criminal case.

In response to questions by AILA, ICE confirmed that penalties were still based on INS guidance from the late 1990s, which categorized I-9 errors into two groups: substantive verification failures, which are not subject to the ten-day correction period, and technical or procedural verification failures, which may be corrected. Substantive errors could arise, for example, when the employee fails to sign section 1 or forgets to check one of the boxes indicating his or her citizenship or immigration status. Technical or procedural violations tend to be more benign in nature including, for example, the failure of the employee to enter his or her maiden name, address, or birth date in Section 1 or failure of the employer to provide the title, business name, and business address in Section 2.

It’s important to note, however, that an employer must have made a good faith effort to comply with the I-9 requirements in order to take advantage of the ten-day correction period. So if an employer repeatedly made mistakes in knowing reliance of the 10 day correction period or attempted to correct the errors by back-dating, ICE may very well fine them to the fullest extent.

Use of E-Verify — a federal program designed to help employers determine whether prospective employees are legally entitled to work in the United States — will be incorporated into the city of Santa Maria’s hiring process.

The City Council adopted the program on a six-month trial basis with a unanimous vote Tuesday.

However, a motion by Mayor Larry Lavagnino to appoint a committee of city department heads to review, research and study E-Verify use for city vendors, contractors, and any firm doing business with the city during the trial period, as suggested by city staff, was not seconded.

State officials expect the number of companies cited for violating the state's immigration laws will rise when audits of small businesses begin in July.

Those audits will focus on businesses that traditionally hire foreign workers, meaning landscapers, hotels, restaurants, golf courses and construction companies will be first to get inspected.

The state has been auditing larger employers since last summer, and so far the compliance rate has been high, said Jim Knight, spokesman for the S.C. Department of Labor, Licensing and Regulation, the agency conducting the audits.

'On July 1, 2010, ask me if my compliance rate is going to be as high as 94 percent,' Knight said. 'No, it's not.'

ICE and South Carolina company sign first-ever IMAGE agreement in the state
Coastal Steel and Acoustics (CSA) partners with ICE to ensure legal status of workforce

LONGS, S.C. - The owners of a Longs' privately-owned construction company signed the state's first-ever agreement with U.S. Immigration and Customs Enforcement (ICE) today to strengthen hiring practices and to combat the unlawful employment of illegal aliens.

Jack Doyle and Jim Shealy, owners of Coastal Steel and Acoustics (CSA), signed an agreement in a public ceremony at the company's headquarters in Longs with ICE Special Agent in Charge of the Office of Investigations in Atlanta Kenneth A. Smith.

The agreement is part of a voluntary employer program known as IMAGE, or ICE Mutual Agreement between Government and Employers, which is a joint initiative between government and the business community to restore integrity to the U.S immigration system. By voluntarily participating in the IMAGE program, companies can reduce unauthorized employment and the use of fraudulent identity documents.

"ICE recognizes that the highest level of employment integrity can only be achieved through close coordination with industry partners," said Smith. "CSA will join IMAGE business participants around the country who are committed to protect the integrity of their workforce by helping ensure that their employees are who they represent themselves to be."

"We are committed to ensuring that those who work for us are lawfully present in the country," said Shealy. "We hope that other South Carolina businesses would follow our lead. Through programs like these, we can ensure that Americans and those lawfully in the country aren't competing with those unlawfully in the country who will work for fewer wages than what they're entitled to."

As part of IMAGE, ICE will provide CSA with education and training on proper hiring procedures, fraudulent document detection, use of the E-Verify employment eligibility verification program and the Social Security Number Verification Service, and anti-discrimination procedures.

All IMAGE participants gain membership to the Department of Homeland Security (DHS) E-Verify employment eligibility verification program. Through this program, employers can verify that newly hired employees are eligible to work in the United States. This Internet-based system is available throughout the nation and is free to employers. It provides an automated link to the Social Security Administration database and DHS immigration records.

Upon enrollment in and commitment to DHS's Best Employment Practices, program participants will be deemed "IMAGE certified," a distinction DHS and ICE believe will become an industry standard.

CSA was formed in 2004 by Doyle and Shealy, with the purchase of a small drywall company. The company has two locations: a corporate headquarters in Longs, S.C. and an office in Lumberton, N.C. CSA does work in metal framing, drywall and acoustic ceiling installation, painting, stucco, and office and retail renovation.

Notorious Maricopa County Sheriff Joe Arpaio deserves some credit for creativity. After losing much of his ability to enforce immigration laws when the Administration grew frustrated over civil rights complaints being filed against the Phoenix area law enforcement chief, Sheriff Joe has found a loophole. He's targeting illegal immigration through criminal laws rather than immigration laws. From the Arizona Daily Star:

A raid targeting illegal immigration led to the
arrests of 21 Phoenix-area McDonald's workers Friday, and
authorities were still seeking 30 other employees.

Those arrested during the raid of four McDonald's in Scottsdale,
Tempe and Mesa were being held on suspicion of identity theft. It
will take more time to determine whether any are illegal immigrants
as officials suspect, said Maricopa County Sheriff Joe Arpaio.

Deputies also searched a mansion in the tony Phoenix suburb of
Paradise Valley owned by Richard Coulston, who owns the
restaurants, Arpaio said. Coulston was not arrested.

It's a shame that Friday's arrests had to happen at the
fast-food restaurant, which is "more than just a business," Arpaio
said.

"It's an American institution," he said, adding, "a place that
my kids and yours could always count on for their first job ever.
That these McDonald's restaurants targeted in today's investigation
are giving jobs away to people using false IDs or perhaps working
here illegally is a shame."

One question that will certainly be asked is whether Sheriff Joe is profiling businesses that simply have lots of Latino workers as opposed to businesses he has genuine reason to believe are hiring illegally present immigrants. If that's the case, then expect some serious push back.