On the Backs Of the Poor - Articles - CAIR - Colorado Alliance for Immigration Reform

...Teresa, who doesn't want her last name used, is poor and illegal, having slipped into Arizona from Mexico a year ago. When she first arrived, her 17-year-old son wired a $1,000 payoff, or two months' pay, to the "coyote" who brought her in. The transfer fees cut the smuggler's take to only $900, and he abandoned her in anger, she says...

Teresa is one face behind the booming, multibillion-dollar transfer business that has revived the fortunes of a 153-year-old corporate icon: Western Union. The company that pioneered coast-to-coast telegraph service in 1861 dominates the money-transfer business today, racking up $3 billion in fees and investment income, and an operating profit... of $1 billion last year--most of it on the backs of the poor.

...Western Union handled 81 million cash transfers last year, with a face value that appears to be close to $30 billion.

...Western Union is under fire as never before... The feds are investigating it for locking in agents exclusively and forbidding them to offer cheaper rival services. The U.S. Department of the Treasury's Financial Crimes Enforcement Network is questioning whether the company may be unwittingly setting up agents who turn out to have terrorist ties, though no hard evidence has been cited. Western Union has already agreed to pay $45 million in vouchers to settle a class action that accused it of deceptive practices in currency exchange...

Anti-immigration [immigration reductionist] forces, meanwhile, accuse Western Union of aiding and abetting a flood of illegal aliens to U.S. shores. Western Union and others "lure people up here, put them in very precarious situations and are responsible for their deaths," says Michael McGarry of the Colorado Alliance for Immigration Reform, a hard-line group that has thrown up billboards bearing a map of the U.S. stamped with the word "FULL."...

At a Western Union shop... formalities are shelved and anonymity is prized; for transfers of less than $1,000, no ID is required at all. The tradeoff is far higher fees...

The coming crackdown could crimp the company's hell-bent expansion. Western Union fuels handsome growth at First Data Corp.... That makes the company worth $34 billion.

The Western Union deal was engineered by First Data veteran Charles Fote, 55, who rose to chief executive two years ago... Under his gaze Western Union's reach has grown from 55,000 to 200,000 storefronts since 1998; in the U.S. it grew from 30,000 to 65,000.

...Some $200 billion in cash transfers now course around the globe from one country to another, exceeding foreign investment and aid in many countries. The $14 billion that went to Mexico last year, a 33% jump over the prior year, is now the second-largest source of income for that country, behind oil exports. Remittances make up 33% of the gross domestic product of Haiti and 29% of the GDP of Nicaragua. Senator Paul Sarbanes... says money zappers such as Western Union, which controls as much as 90% of the business in some markets, siphon off up to $4 billion of the $30 billion sent from the U.S. to Latin America.

First Data has tried to counter the criticism by forming a $10 million "Empowerment Fund" for immigrants and staging immigration "reform" panels around the country. But the sessions have emboldened the company's critics and sparked a melee or two. At the panel in July in Denver, a woman was arrested after pummeling an anti-immigration heckler, Terry Graham. Graham filed a lawsuit against the woman, First Data and Western Union alleging negligence and misconduct.

The parent company has even managed to get into a spat with its own representative, outspoken conservative Colorado Republican Congressman Tom Tancredo. He sparked the fight last May by briefly suggesting that cash transfers to foreign recipients should be taxed. "This guy is off in left field, and we're tired of his antics, tired of his games," a First Data spokesman huffed in the Rocky Mountain News at the time. Now Tancredo accuses the company of retaliating against him by forming a new political action committee to help Tancredo's Democratic opponent defeat him in November [2004]...