Wednesday, July 29, 2009

As South African Recession Stings, Emigration Resurfaces

It's been three months since Jacob Zuma took power as South Africa's President, and things are hardly going well.  As the global economy continues to sputter, Mr. Zuma is finding himself in a difficult position...and losing support from his key constituencies.

This morning's Wall Street Journal reports that "tens of thousands" of municipal workers are striking in Johannesburg, South Africa's economic epicenter.  As someone who has a great affection for South Africa and can attest to the remarkable success of the nation, particularly when compared to its regional neighbors, this concerns me.

The strikes are happening in a hodge-podge fashion so far, but one particularly troubling strike involved a weeklong work stoppage earlier in July by the construction crews working around the clock to on building projects for next year's FIFA World Cup, which is to be hosted in South Africa.  The event is considered to be South Africa's most promising opportunity to showcase its remarkable tourism offerings and culture, and to trigger a fresh round of international investment.  The strikes represent real threats to these objectives.

But perhaps the biggest threat to South Africa and Mr. Zuma's ability to govern is more in the area of human resources:  after a relative lull in emigration by South African professionals, international and South African immigration firms are seeing a renewed interested and more inquiries than they've seen in awhile.  And while my sole "presence" in Johannesburg consists of Jaime working out of his home office, what we are hearing suggests that as economic pressures continue to mount on South Africa, the threat of a fresh "brain drain", such as that seen in the 90's (when South African nurses and pharmacists made a hasty exodus to the U.S.) might be looming.

Unlike the Philippines, which produces far more healthcare workers than it needs domestically and has long relied on an expat workforce as a primary contributor to its national economy, South Africa does  not graduate sufficient workers for its domestic needs.  That means that the departure of such health care professionals cannot help but have an adverse impact on South Africa's health care needs.

We who practice immigration law, of course, are not in a moral position to talk someone out of emigrating from their economically-troubled nation.  Nevertheless, there is something to be said for those who instead choose to stay home and build their communities, notwithstanding the temptation for a big overseas salary.

Tuesday, July 28, 2009

In Praise of Biometrics

It was back in 1988 when I first sat down to teach Border Patrol
officers stationed at the very porous El Paso/Ciudad Juarez border the difference between legitimate "Micas " - border crossing cards (BCCs) - and those which were fraudulent.  Incredible as it seems, the profitable art of subtle photo replacement and modified signatures was thriving along the U.S./Mexico border long before the advent of the color copier would make places like Manila epicenters of sophisticated document fraud.

Back in Juarez, we saw it ALL.  I could write a book about the fraud perpetuated at the border, and I remember lively discussions with my wonderful visa section boss, Mike Hogan, and our incredibly astute Consul General, Louis Goelz, over the problem.  I served as Fraud Officer for a period of time in Juarez, responsible for what were known as "Stateside Criteria" cases...immigrant visa processing of individuals who had married U.S. citizens and who wanted to get their permanent residency approved at a convenient border boast in Mexico or Canada instead of flying home to wherever.  Juarez, as it happened, was responsible for NYC area cases, and about 80% of the marriages we interviewed were bogus.

In the midst of the scams, I advanced an idea to my bosses, and they thought it was a fine one:  why not simply 1) include thumbprints on BCCs and 2) integrate federal criminal fingerprint and photo data at a national level, allowing border entry posts to have access to FBI ID verification information? It was a fine idea, promptly filed in the circular file by the State Department.

Well, here we are 21 years later, and the "new" concept of biometric ID enhancement is all the rage.  The TWIC card is foolproof and will keep our ports safer, we are told.  Yet there remains a certain vocal resistance to the implementation of basic biometric technologies because "in America we don't want a national ID card."  The logic behind that is valid, but rooted in emotion: the horrors perpetrated by the Nazis against the Jews and others was in large part organized via the issuance of identification cards, and the post war reaction was that this kind of documentation did not belong in the land of the free and the home of the brave.

Yet the concept of a national ID has continued to be the common denominator in systems utilized by some of the most civilized and democratic countries in the world.  In Latin America, the "cedula" - the ubiquitous nationa ID document - is part of everyone's daily life, sort of a combination SSA card and internal passport.  In America today, with the dual problems of illegal immigration and threat of border-crossing terrorism, common sense dictates that we need a fresh look at this option.

Several days ago the Wall Street Journal brought this issue up, and several U.S. congress members - one Democrat and one Republican - wrote what I felt was a pretty good comment to the editor.  Here you have it in its entirety:

"The Journal’s editorial “Blame the Employers” (July 16) is right to point out the shortcomings of the federal government’s E-Verify employment verification system.

Database inaccuracies and a vulnerability to identity theft and document fraud render E-Verify far from foolproof, and can subject employers to harsh sanctions when the system fails them. The government should not lag behind by continuing to cling to an employment verification system that has proved to be inadequate.

Where we disagree, however, is in equating biometrics with a national ID card. Use of state-of-the-art biometric technologies is already happening in the private sector and does not require using a card.

Consumers are increasingly given the choice to use biometrics to either prove or protect their identities, whether at the airport or at the ATM. A thumbprint or a retina scan is not the same as an ID card, as it cannot be forged, stolen or misused.

 That’s why utilizing biometrics this way in the employment verification process to confirm identity is included in our bipartisan House bill, H.R. 2028, the “New Employee Verification Act.”

Yes, there will still be unscrupulous employers and “off the books” employment, but that’s where the government should be focusing its enforcement resources—not on plant raids on law-abiding businesses with properly verified employees."

Rep. Sam Johnson (R., Texas)
Rep. Gabrielle Giffords (D., Ariz.)


Monday, July 27, 2009

A Sneaky TWIC

As the U.S. cruise industry continues to scramble to meet the various compliance matters placed back on the front burner by the Obama administration, some lawyers are getting a little creative in their efforts to make a buck.  All of this came to light last week when an old friend contacted me with what appeared to be a simple question:

"Do cruise ship employees require a TWIC card?" (TWIC is the new biometric ID card designed to provide better port access security.)

The answer would appear obvious:  since the entire TWIC purpose is to create secure port access for the commercial maritime sector, it would appear that cruise workers would be a part of those needing registration, along with merchant mariners, port facility employees, long shore workers, truck
drivers, and others requiring unescorted access to secure areas of
maritime facilities and vessels regulated by Maritime Transportation Security Act of 2002.

But not so fast: the fact is that the majority of cruise ships that call on U.S. ports -- even those belonging to U.S. cruise lines -- are foreign flagged vessels.  The key element to determine TWIC requirements has to do with "secure area access".  So, for example, a Filipino waiter employed aboard a non-U.S. flag vessel whose onboard access is limited to crew areas, food prep areas and public areas of the ship would NOT need to apply for TWIC.

Tell that to the cruise line compliance folks, who've been shelling over money to outside HR and legal counsel to delegate TWIC processing and registration.  (I haven't been able to verify just how many folks who have registered for TWIC don't need it; ecause of TWIC's delays and the incredibly bad publicity with which the effort launced, the USG is less than eager to discuss "operational anomalies".) Even more egrigious:  word has it some maritime attorneys in South Florida have been actually  charging carriers legal fees to review the "TWIC status" of individuals who don't even need to apply for TWIC!

Good grief...and we wonder why our profession is the subject of so much contempt.

Bottom line: make sure you know who in your company needs TWIC and who does not, as the money involved is significant.  Besides, with increased I-9 audits, SSA ramping up for more "no match" letters, and the E-Verify expansion gaining momentum in Washington, the cruise lines have plenty to worry about in addition to TWIC.

If you are an HR professional with a carrier and need clarification on TWIC, drop me an email.

Saturday, July 25, 2009

Thinking Through Electronic Employment Verification

As an attorney who spends a substantial part of his time worrying
about how corporate clients run their internal compliance programs, it is easy
to forget that employment verification isn’t ONLY about protecting employers
from fines and sanctions…it is also about insuring the integrity of a process
which, mishandled, can infringe upon the rights of eligible U.S. workers.

As the Obama Administration significantly increases its I-9 audit
activity and I receive more calls from concerned employers and their providers,
the subject of E-Verify – or whatever acronym the final version of our national
electronic employment verification system – is making the mainstream
headlines.  Some folks believe that the
current E-Verify system is just fine and works well; others, predictably those
in the corporate community, believe the current system is already onerous, and contemplated changes will make their
verification tasks darn near impossible.

While the debate is lively and valid points are made by both
sides, the debate distracts from the fundamental fact that the establishment of
a cost-effective I-9 compliance program is a relatively easy undertaking:

STEP ONE: Initiate an I-9 historical records

STEP TWO:Digitize
the paper I-9 forms and

STEP THREE: Integrate
a proven software solution – such as
      for which I serve as Compliance Counsel – and make sure the solution
is embedded as indelible part of the hiring process.

It’s really not rocket science!

I am working with I9 Advantage to develop a new, streamlined audit
service called “I-9 Audit Ready” which will FINALLY offer companies a fast and
affordable way of conducting a private internal audit, and making sure they are
“I-9 Ready” if and when the federal folks decide to drop by.  Whether your company has 100 or 100,000
employees, drop me a line if you want to know more.


Speaking of employment
eligibility verification, check out this position paper by a leading immigration
policy group:

Policy Center's E-Verify Position Paper

Thursday, July 23, 2009

Shouldering the Burden- Immigrants and Health Care Reform

My blog today isn't intended to look into the indisputably sleazy actions of Martin Memorial, which unilaterally decided to send a mentally incapacitated man out of the U.S.  The Herald said that Martin Memorial summarily chartered a plane to send him home "without telling his relatives in the
U.S. or Guatemala - even as his legal guardian frantically sought to
stop the move."  The hospital feebly responds that Mr. Jimenez, despite his incapacitation,  "wanted to go home".

Nor is today's blog intended in any way to defend the legitimacy of situations such the Jimenez tragedy, which unjustly burdened a private hospital with the multimillion dollar health care bill of a person illegally in the United States.

Today's blog is about illustrating the dramatic dysfunctions plaguing the U.S. health care system and why reform is not only needed but desperately needed.  More from the Herald:

are already struggling under the staggering costs of treating the
nation's roughly 47 million uninsured. Illegal immigrants make up an
estimated 15 percent of this group, according to the Pew Hispanic

"I think they'll do what's required according to
physician orders," she said, "but I think they will be more pro-active
and aggressive in finding a discharge plan.""

Well, that might resolve the issue for the hospitals, but what will the discharge of seriously ill patients onto the streets of America do for the rest of our society?

I remember when my second son, Danny, was born in 1991 at Baptist Hospital, right here in Miami.  I had recently started private law practice and had no health insurance, and had to wheel and deal with both the hospital and the doctors to negotiate prices I could afford.  Baptist's Obstetrics unit was a veritable resort, with private rooms for each patient and a standard of comfort far beyond any I'd seen.  But when I got a $19 bill for the small box of Kleenex's my wife had requested, I went ballistic.  It was only then when I realized that under this current system - and remember, this was 18 years ago and nothing has changed except for the worse - those of us can afford to pay a little pay a cover those who can't or won't pay anything.

The patient liaison patiently explained the $19 Kleenex box to me, and it was pretty simple: 

  1. Baptist could not refuse an emergency patient

  2. When a woman is in the final stages of labor and the baby's head iss crowning (as in the top of the skull visible), that constitutes an "emergency".

And so illegal immigrants - and others without insurance - would simply sit in their cars at the Baptist Emergency room parking lot, waiting for the head to crown...presto, instant 5 Star Maternity Ward for free.  The liaison further explained that because most of these women had not had prenatal care, the incidence of complications -- and the resulting increased cost in care -- was significantly higher than that of the "normal" (insured or self-paying, as we were) maternity ward patients.  (I should add that I've seen cases of wealthy immigrants with serious health issues leaving their money overseas and having our Medicaid system foot their care.)

My cousin Juan was visiting this past weekend and we had one of our little debates regarding health care.  He's a Libertarian (so he says) and he argued that it is not the responsibility of government to provide health care to those whom it governs.  He and I both share strong market-economy beliefs, but on this topic I respectfully disagree.  I believe that a government which cannot take care of the fundamental medical needs of its elderly and disabled population is a government which has its priorities wrong.

For the past two decades, I have been the sole caretaker of my mother, who is now 87.  I believe that we can do better than simply continue to live with a system where failed immigration policies mean private health care has to pick up the bill.  I believe that the barrage of repetitive EKGs and other exams my mother gets almost monthly are nothing but efforts by the existing medical system to milk Medicare dry.  I believe that the FBI has better things to do than deploy hundreds of agents to thwart Medicare and Medicaid fraud in Miami.

Look, I don't profess to have all or even any of the answers, but I know one thing: the system is broken and we need the federal government to fix it by looking at it wholistically and understanding the basic interrelationships between immigration policy, foreign policy, and health care policy.

Sunday, July 19, 2009

Wealthy U.S. Visitors Not So Wealthy After Medical Emergencies

Let's call him Pierre, since I can't tell you his real name.

Pierre, a wealthy European businessman in his early 60's, was a picture of health.  A daily tennis player and avid cyclist, he carried the sculpted physique of a man half his age.  With an E-2 Treaty Investor visa and smoothly running U.S. business, Pierre divided his time equally between the U.S. and Switzerland, where he was active in real estate.

One day, as he was leaving to meet friends for dinner in South Beach, he felt a little tug on his left arm and chest.  He pulled his car over and observed the sensation, trying to decide whether he should proceed to dinner or instead head to the emergency room.  Being a prudent man, Pierre headed to the hospital.

Three days later, after an initial 12 hour stay at the emergency room and a mind-boggling barrage of tests, Pierre learned that he had suffered...

...nothing in particular.  No enzymes were present and no heart damage, so heart attack, even minimal, was ruled out.  The only explanation the doctors could give was that he'd suffered some sort of "anxiety attack", something Pierre found absolutely absurd given that he had been in a great mood and looking forward to a nice meal at the China Grill when the discomfort had started.

While Pierre was obviously relieved that nothing serious had happened, he expressed frustration that he had been hospitalized for three days.  "Why", he asked me, "didn't they just release me after they ruled out a heart attack?"

Well, the answer depends on whom you ask: the medical community would say that it was for his own good, keeping him under their watchful eyes until all possible danger had passed.

I don't buy that:  I believe that Pierre, like many others, was kept semi-imprisoned at the hospital as a result of a society which has turned the concept of personal injury into a culture of entitlement, and where the most critical medical acronym has transitioned from AMA to CYA.

Pierre is fine today, but recently had an experience of "discomfort" which significantly eclipsed his prior one: the hospital and physician bills.  Back home, Pierre has wonderful medical coverage and he had never given a second thought to checking on how his national and supplemental EU plans would handle any U.S. claims.  $38,000 later, he found out that, basically, they didn't.

If you are a foreign professional or investor doing business in the U.S, make sure you check your home medical insurance coverage for any medical charges incurred in the bloated current U.S. health care system. Unless that coverage is absolute, get U.S. catastrophic coverage at a minimum.

Email me if you need the names of reliable brokers offering this coverage.

Wednesday, July 1, 2009

The FBAR Side: IRS Ruling an Obstacle for Would-Be U.S. Investors

Despite the long-standing understanding that "if you own it, control it, or benefit from anything anywhere, you must tell the IRS", last week's IRS comments suggest that the plot has thickened substantially for offshore investors...especially those with an eye on U.S. residency.

In the world of offshore banking, there are technically a wide number of justifications for nationals of a given country to park their assets in a tax haven.  Despite this, the real reason comes down to asset protection...from income taxes, from estate taxes, from litigation, etc.

Last week, the IRS issued an opinion which formalizes the need for hedge-fund and private equity investors to disclose EVERYTHING they have offshore. The new position is consistent with the other stuff unfolding in Obama's Washington: the Securities and Exchange Commission (SEC) and Congress are proposing that
hedge fund managers register with the agency, and the administration
is proposing to end a tax break on compensation for private-equity

While the latter two developments do not present immediate concern to private investors (who don't care whether or not their brokers are SEC-registered), the move does represents a departure in policy if not in regulatory language: while the IRS maintains that this requirement has ALWAYS been so (and the letter of the law supports that position to a certain extent by its amplitude), U.S. tax lawyers and fund managers are, well, panicking.  Why?  Because failure to communicate this requirement to high-net-worth clients (in a sort of fiscal "don't ask, don't tell" parallel) means malpractice...and communication of it could mean the loss of a lot of would-be U.S.-resident investments and the lucrative commissions that come with them.

The action by the IRS is no doubt related to the ongoing investigation of a number of UBS AG clients, who the IRS believes have been failing to report income from taxable assets offshore.  It's as if someone in Washington just figured out that people are putting money offshore to avoid taxes...imagine THAT!

What to do, what to do...well, very simple really: if you are already a U.S. tax resident, then you need to select your offshore structures and activities very carefully in order to comply with this development.  In other words, conduct a comprehensive offshore investment self-audit, be prepared to pay some taxes, and sleep well at night.  But if you are one of the many interested in opening a business in the U.S., the new ruling has profound implications: what may comply with your country's tax laws will NOT matter once you become a tax resident of the U.S...potentially exposing whatever you've parked offshore and making it taxable.

In the wake of Madoff, this kind of response to potential losses in the investment world is to be expected, I suppose.   But in reality, this latest clarification - which is what it really is when you chase down the regulatory language -- does not in any way impact how well-managed U.S.-origin investments offshore will be handled.  The creative combination of offshore tools ranging from trusts to insurance products available high net worth individuals interested in the benefits of tax haven investments.

I'm proud to be working with what I believe to be the very best team of international financial advisors, insurance representatives, and tax professionals in the country.  Email me if you want to make sure your offshore ducks are in a row.