This afternoon, Fischer Homes, the Crestview Hills, Ky.-based builder, will hold a press conference to officially announce the publication of a new book that chronicles the builder’s 22-month ordeal following the May 9, 2006, raids on three of its jobsites by federal authorities. (Click here for video of the press conference.)
Those raids—which also encompassed Fischer’s headquarters, and the homes and apartments where its employees and subs were living—led to the arrests of 76 alleged undocumented laborers and four of Fischer’s field superintendents, the latter of whom were charged with conspiring with its contractor (who was indicted two days later) to harbor illegal workers for financial gain.
Six months after those raids, though, a judge dismissed the charges against Fischer’s associates, but only after the government, according to the book, tried unsuccessfully to get the superintendents to implicate Fischer’s officers, and then threatened the builder with money laundering and racketeering charges. That dismissal didn’t end things, either.
The 160-page “No Crime But Prejudice: Fischer Homes, the Immigration Fiasco and Extra-judicial Prosecution,” was written by Jon Entine, a former ABC and NBC producer and a corporate responsibility consultant who is currently a visiting fellow with the American Enterprise Institute. Fischer Homes gave Entine unlimited access to its employees, attorneys, and documents for what initially was intended to be a record of events for the personal use of the company’s owners, who retained control over when or if its contents would be released, and in what form.
Entine secured a grant from Searle Freedom Trust to write a full-length book, whose distribution, through Atlas Books, and marketing are also being financed by Searle and the Buckeye Institute for Public Policy Solutions, a free-market think tank. The first print run is 1,500, and proceeds from the sale of the book will go to St. Jude’s Research Hospital, a charity the Fischer family supports. Searle and Buckeye will sponsor a panel discussion about Fischer Homes’ experience and extra-judicial prosecution on June 9 in Columbus, Ohio.
In cover letters sent with advance copies of the book, Fischer Homes’ president and CEO Bob Hawksley characterizes its publication as his company’s “civic duty.” David Jansen, Buckeye’s president, writes that this case trumpets the “ultimate victory of freedom over tyranny in our country.” What’s missing, though, is a conclusive explanation of why the government singled out Fischer Homes in the first place.
Robert McBride, who led the prosecution of Fischer’s employees and subs for the U.S. Attorney’s Office in Lexington, Ky., declined to comment about his office’s motives or targeting. He told BUILDER this week that he didn’t know anything about the book and hadn’t been contacted by its author for comment or rebuttal. As for the book’s thesis—that the case against Fischer Homes was unsupported by facts or law—McBride replied that the prosecution was “successful” since Fischer’s contractor and “all of the illegal aliens” pleaded guilty.
Now chief of the U.S. Attorney’s Office Criminal Division, McBride emphasizes that his office never indicted Fischer Homes, and dismisses the book’s claims—based on quotes from the builder’s officers and legal counsel—that he threatened the company with various criminal charges as “not in the public record. This office makes decisions based on the evidence we have for the case we are pursuing. I think we acted very responsibly.”
The government’s standard refusal to provide details about its investigations or litigation, and the author’s sympathetic acceptance of Fischer Homes’ version of events, make for a retelling of this saga that is gripping but also at times one-sided, repetitious, and polemical. The book, though, does shed light on the government’s ultra-aggressive prosecutorial methods, and offers a rare behind-the-scenes look at how one builder in a crisis situation responded strategically to defend its employees and reputation.
CHANGING THE RULES
Immigration was a hot issue in 2006, as laborers from Mexico and other Latin American countries had pored into America’s booming construction industry, where their numbers had grown to 14 percent of the workforce, according to Pew Hispanic Center estimates. (BUILDER devoted most of its July 2006 magazine to this topic.)
President Bush was advocating a temporary worker plan that would allow immigrants to shuttle back and forth across the U.S.-Mexico border. Senators Edward Kennedy and John McCain backed a plan that would allow undocumented workers to eventually apply for citizenship. Opponents of illegal immigration demanded stricter border control and law enforcement.
Against this contentious backdrop, government investigators, pretending to be searching for an escaped murder suspect from Texas, in January 2006 entered Fischer’s jobsites in Kentucky and interviewed workers and supervisors. Videotaped conversations show laborers admitting they were in the country illegally, and at least two Fischer employees acknowledging casually that there were undocumented workers on-site.
Four months later, agents from the U.S. Department of Immigration Customs and Enforcement (ICE), the FBI and the Internal Revenue Service (IRS) swooped in, made arrests and demanded that the company turn over records and computer files. Two days after those raids, four of Fischer’s supervisors were indicted, along with Robert Pratt, who owned Progressive Builders, a framing company Fischer Homes was using on these sites, and which had employed these laborers.
Photos and news clips show swarms of government officials hauling off suspects bound by plastic handcuffs, and hauling boxes of documents from Fischer’s offices. SUVs and helicopters completed the scene. Whether this was overkill depends on whom you talk to, although author Entine believes the government was more interested in generating media attention than pursuing justice, and that its ultimate goal was either a “trophy conviction” or a plea that included a huge fine being paid by the builder.
The raids occurred a day before the NAHB held its annual “Day on the Hill” in Washington, D.C. where members visit their representatives. Entine quotes Fischer officers who were convinced the raids were intended to send a message to the housing industry about using undocumented workers. (McBride, the prosecutor, denies this.)
But corporate responsibility for hiring documented workers had already become more ambiguous after the government issued in January 2003 what’s known as the Thompson Memorandum. That document gave the Feds wider discretion to go after companies as well as individuals. Indeed, a few days before the raids, Henry Fischer, owner of the home building company, had sent a letter to elected officials asking that they clarify the immigration laws.
In the book, Entine explains that the government’s case against Fischer Homes’ associates rested on several assumptions: that Pratt’s contracting company either an employee or a “shell company” of the builder; that Fischer Homes was responsible for monitoring whom its contractors hired, and liable for any undocumented workers Pratt was using; that Fischer’s supervisors had admitted they were aware that some of the workers on their jobsites were illegal; and that because that labor was cheaper to hire than using documented subs, Fischer had benefited financially. At the very least, Fischer Homes would be guilty of “reckless disregard.”
The builder argued that neither Pratt nor his laborers were its direct employees. (Entine uses the analogy of a homeowner hiring a lawn maintenance service and being held criminally liable because that service used undocumented workers.) Fischer Homes also contended that its agreements with contractors specify that they must abide by existing laws, and that Pratt had supplied verification, via I-9 forms, stating that all of his workers were legal. (Entine concedes that laborers were known to forge their IDs.) And even if its associates knew there were illegals on the jobsites, Fischer Homes would have been in violation of anti-discrimination statutes had it questioned the laborers about their resident status.
What riled Fischer Homes’ officers and attorneys was that they felt the company had followed the rules to a tee, and were still being hounded. According to Fischer’s associates and lawyers, the government tried to get the superintendents—who faced 10 years and a $250,000 fine each if convicted—to say that Fischer’s executives and owner were in on the alleged scam, and then to get those supers to wear a wire. One of Fischer’s associates, Bill Ring, cooperated with the government, though he didn’t say anything that suggested the company had done anything wrong.
The real hero of Entine’s story is Henry Fischer, who stuck by the employees after they were arrested and charged, and paid for the legal counsel, even though by doing so he put the company’s future at risk. To counter the negative media attention from the raids, Fischer Homes launched its own campaign that reached out to newspapers, contractors, and suppliers. Also instrumental in shaping its decisions was an internal Partners in Performance Group, which consisted of several employees whom the company had identified as leaders.
TABLES TURNED
The case dragged on through that summer, as the government, according to Fischer sources, turned up the heat on the company, its associates, and other contractors including the pro dealer Builders FirstSource, which was supplying framing crews to some of Fischer’s jobsites. A few weeks after the raids, Fischer Homes tightened the language in its contracts, and required all vendors to recertify that their employees were compliant with current immigration laws. At the same time, the housing market was starting to implode, and Fischer Homes’ sales began to tank, although the company’s analysis indicated that the prosecution had little impact on its reputation with customers or its sales.
In June, McBride reportedly offered to drop the charges against Fischer’s associates if the company plead guilty to a felony and paid a $1 million fine. When Fischer balked, McBride reportedly threatened to file racketeering charges against the builder. But the deadline that McBride set came and went, and Fischer’s attorneys sensed that a crack in the government’s case. Another turning point was a mock trial that Fischer’s attorneys staged, which showed that at least one of its superintendents, Tim Copsy (whom the government had subsequently charged with money laundering), would probably be found guilty by a real jury. That mock trial put the company and its associates’ lawyers on the same page in a common defense against the government’s actions.
The builder also turned the tables on its nemesis when, on August 16, Hawksley sent a letter to an ICE investigator stating that Fischer Homes would henceforth notify the government every day at noon whenever and wherever a “foreign-appearing” worker showed up on its jobsites. Fischer also set up a “hotline” where anyone could report “suspicious” workers. After several days of this, McBride asked Fischer to stop the daily reports, “and acknowledged that the government was ‘uncomfortable’ about receiving unsubstantiated allegations,” writes Entine. In other words, when Fischer Homes offered to be an “immigration cop,” which it has been targeted for not being, the government demurred.
In September, Pratt and six other defendants were convicted and sentenced to between 12 and 18 months in prison. Many of Pratt’s laborers were found guilty, too. A trial date for Fischer’s superintendents was set for Nov. 27. But on the 15th of that month, McBride suddenly requested a continuance because one of his witnesses, a Pratt business associate named Nelson Trejo, had absconded to Mexico. McBride reportedly told Judge David Bunning that he couldn’t make his case without Trejo. (McBride disputes this.) Attorneys representing Fischer and its supers protested against any further delays, and the judge agreed; he dismissed the case without prejudice, which meant that the government could re-indict if it chose to at a later date.
McBride, reports Entine, kept Fischer Homes hanging for another 15 months by warding off the builder’s demands for written notification by his office and ICE that their investigation was over. It wasn’t until Feb. 9, 2009, that an ICE investigator, James Bellamy (who was involved in the initial sting operation), told a Fischer Homes’ attorney that the company could retrieve its documents. The government could re-file over the following three years, but it appeared that its prosecution of Fischer Homes was finally over.
Why it went after the builder remains an unanswered question. Even Entine concludes, after three years of research, that Fischer Homes might have been a government target “by chance.” One theory is guilt by association, as the Feds had had their eye on Pratt for a couple of years, after the Drug Enforcement Administration raided a Mexican restaurant of which Pratt owned a piece. Entine also speculates that the government chose Fischer Homes instead of a larger public builder operating in a western state like California or Arizona where there are heavy concentrations of Hispanic voters and interest groups. He also quotes one Fischer source who believes the raids were payback by one ICE investigator, Paul Chambers, who owned a Fischer-built home about which he had construction-defect complaints.
Fischer Homes seems to have recovered as a business. “The common enemy brought us together,” said Hawksley. As for its employees’ and officers’ faith in the fairness of their government, that’s another story. Entine reports that Henry Fischer couldn’t even get an audience to discuss his problem with Kentucky Sen. Mitch McConnell, whom Fischer had supported financially. Several other Fischer Homes employees expressed disappointment and anger at the Bush administration. “We were just pawns, political pawns,” said Copsy, the superintendent. “If the law lies to you, then arrests you, then tries to coerce you, how can I believe my government? This isn’t what I thought America was.”
John Caulfield is senior editor at BUILDER magazine.