Immigration battle: Ponaks, INS brace for courtroom duel

Nation's Restaurant News, Feb 20, 1989 by Richard Martin

IMMIGRATION BATTLE

Ponaks, INS brace

for courtroom duel

KANSAS CITY, Mo--A disgruntled restaurateur and the Immigration and Naturalization Service are flexing their muscles for a court duel here over $6,900 in penalties assessed by the agency for alleged hiring and bookkeeping violations of the immigration reform law.

"My God, I'm just getting screwed," said Ponaks restaurant owner Chuck Mahowald, who claims the INS is using him as a test case. The agency denied the allegation.

Mahowald, who considers his 175-seat Ponaks restaurant the "highest profile" Mexican restaurant in Kansas City, complained that the fines have also saddled him with legal defense fees that so far total nearly $3,000.

He said Ponaks was hit with one of the fines after the INS arrested an illegal alien who was working as a janitor at the restaurant.

Although two other hiring charges against Ponaks have been dropped, the penalty for the janitor has stuck --despite Mahowald's protests that the alien was employed by an outside janitorial contractor, not by the restaurant.

Although INS officials refused to discuss details of the Ponaks case because of the pending trial, they said many employers have sought to sidestep hiring limits of the immigration reform act through unorthodox or contrived "contracts" for labor services.

"Many employers are saying, "That's not our employee," said an INS attorney familiar with the Ponaks case. "It would behoove [such operators] to determine if ["contractors"] have a true independent contractor status."

Several litmus tests of a contractor's status have been defined by legal precedent, the INS attorney said. One test is whether a restaurant can or would bring a legal action against the "contractor" for failure to provide services.

Another test is whether the "contractor" is offering his services to restaurants at large or to only a small group of employers.

"The question is, 'Who is an employee and who is not?'" the lawyer said. "Painting `cow' on the side of a horse doesn't make the horse a cow."

Other fines against Ponaks were levied because of errors purportedly made in filling out the federal immigration service's I-9 forms, which are required for each employee hired in the United States since Nov. 7, 1986.

Because many of Mahowald's 55 workers speak only Spanish, he has found it easier to use a bilingual accounting firm to process I-9 forms and to handle employment and payroll records. However, Mahowald said most of the fines against Ponaks stem from the accounting firm's mistaken belief that INS auditors would accept partly completed I-9s as long as evidenciary requirements were met by attached photocopies of employees' identification papers and work-authorization documents.

"Instead of putting the [serial] number of the [authorizing document] down on the form, we just attached a copy of the document," Mahowald explained. Apart from the technical deficiency in filling out the forms, all of his employees are legally entitled to work in the United States, he added.

Regardless, "we think these are egregious [violations]," said Ron Sanders, the Kansas City district director of the INS. "We think we have a very strong case [against Ponaks]."

Although the immigration agency agreed to settle for half the total amount of the fines assessed against Mahowald, the restaurateur sought the court hearing to dispute the penalties. The court is tentatively scheduled to hear the matter in April.

Mohowald said the INS now denies ever telling him that its crackdown on Ponaks was motivated partly by a desire to obtain court interpretation of certain aspects of the controversial immigration-reform law. The restaurateur stands firm by his assertion that immigration agents initially offered just such explanations for their actions.

"I think that's just fine," Mahowald said, his voice thick with sarcasm. "I have to pay $10,000 to be a test case."

Henri Watson, Mahowald's attorney, asserted that a typical paperwork violation cited by the INS at Ponaks involved a blank space in Part B of the immigration forms, where an expiration date of an amnesty-program work authorization was supposed to appear. Watson said the date could be ascertained from information elsewhere on the form and on a photocopy of the authorization that was attached.

The INS conceded that its prosecution of Ponaks would be weakened if the court finds Watson's contention to be correct. "If you can discern the [required I-9] information, it is not an egregious violation," an attorney for the INS explained. However, the court would not approve of I-9s intentionally left incomplete to deceive INS auditors, the lawyer added.

Using a restaurant owner as a test case "would certainly be unfair, [but] that's not the case here at all," the agency's Sanders said. Ponaks' I-9 records "are just about as bad as any we've seen."