Wednesday, May 14, 2008

Middlemen grease E-Verify's wheels

The federal E-Verify scheme has been criticized (by me, among others) as intrusive, unreliable and a threat to privacy. Now, it turns out that it's such a pain in the ass to use that businesses are hiring specialists -- registered agents -- to run the names of employees and prospective hires through the system for an extra fee. Says the Arizona Republic:

Mehr is among the dozens of business owners who have decided to hire registered agents to use the federal government's E-Verify system, a Web-based program that electronically checks the employment eligibility of newly hired employees. Though E-Verify is free, agents say they have found an entrepreneurial niche because businesses are willing to pay a small fee to have someone help them with government regulations. ...

Just what are businesses' complaints about this oh-so-easy-to-use barrier against the sinister forces of eager and affordable labor?

Laura Kendall, co-owner of Intricate Builders LLC in Phoenix, said in an interview that she, too, has had problems with E-Verify after spending nearly seven hours over two days last week trying to get just one employee verified. She said the frustration might lead her to hire a registered agent.

Kendall, who has background as a real-estate agent and office manager, said she tried to log on to the E-Verify system on three different computers but was unsuccessful one day, and when she finally got on the following day it took her two hours to go through the tutorial.

"They put all this responsibility on us and threaten us if we don't comply," said Kendall, who runs a small construction framing company. "The thing that upset me the most is when I couldn't go on the system, there's nothing in Arizona to help an employer. The answer I seemed to get was that it's a federal program."

This reminds me of the peculiar New York City practice of hiring expediters to deal with the city's byzantine regulatory apparatus. The New York Times reported on this fascinating development in 1991.

[W]hat, you may be wondering, is an expediter? They are the people who are hired by architects and building owners to get permits for construction and renovation -- by figuring out which forms to fill out, which lines to stand in and what will satisfy a particular building examiner. That's right, the process of getting a building permit is considered so complicated and time-consuming that an entire industry has been spawned to deal with it, even to the point where expediters hire their own expediters. ...

While the act of permit-getting may sound straightforward enough, in New York City it definitely is not. There is an old building code (which applies to certain applications for buildings built before the end of 1968) and a new building code. There are fire-safety codes, zoning ordinances, a housing-maintenance code, a multiple-dwelling law, a handicap law and asbestos-removal requirements, to name but a few obstacles for expediters. The building code and zoning regulations have been modified and amplified so many times since the 1960's that they have grown from 400 to 3,000 pages in that time.

"Our system of rules and regulations are so complicated that the average person just can't deal with them," said Judith A. Faulkner, who has been an expediter for more than 11 years.

In Arizona, as in New York, the problem of a bureaucratic barrier has become a business opportunity for those willing and able to negotiate government processes that baffle many other people.

Experts in bureaucracy often bring a little extra to the table, besides their skill in dealing with red tape. When I hired an expediter-like service to get me a New York City pistol permit in the mid 1990s, I was charged a substantial fee in addition to the cost of the permit itself. While I was never explicitly told so, it was implied that part of the fee went to the expediter, and part was used to grease palms at One Police Plaza so that the paperwork would go through without a hitch.

That's not unusual. As the Times pointed out, "Expediters have been arrested for bribe-paying in the past, and Mr. O'Brien says he believes that a number of the 14 Buildings Department inspectors who were arrested on bribery charges last year took payoffs from expediters."

A knowledge of who and how much to bribe is, frankly, one of the services expediters sell.

The registered agents handling E-Verify cases haven't been accused of such improprieties -- not yet, anyway. But they do have a special advantage, since it's easier for them to get the results that employers want from the system.

Julie Pace, a Phoenix immigration lawyer who specializes in the employer-sanctions law, said she is not surprised companies are using registered agents who have a lower level of accountability in using E-Verify.

While employers who use E-Verify are required to check photos of authorized non-citizens on a government database, registered agents, Pace said, are not subject to that requirement. And, she said, agents do not have to make photocopies of documents and keep them.

"We are all baffled the government would come out with two sets of standards," Pace said. "They (agents) do not have to comply with the same requirements as businesses."

A lower hurdle to overcome for registered agents? That's just asking employers to use the middlemen to increase the likelihood that they'll be able to hire workers without a hassle.

As much as I admire the entrepreneurial ambition of registered agents and expediters, the need for their services adds unnecessary costs to doing business. Everything becomes just a little bit more expensive, a little bit more to be avoided if possible and, perhaps, going into business at all becomes just a bit more unattractive.

Registered agents, expediters, extra costs and a whiff of corruption are understandable reactions to burdensome bureaucracy. But we'd be better off without the red tape that makes it all so necessary.

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March 19, 2009 12:58 AM  

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