Fowl Play

Fowl Play
Christopher Helman 02.11.08, 12:00 AM ET

Chicken king Bo Pilgrim wants immigration reform. First he might keep an eye on his own coop.

Feathers are flying at Cluckingham Palace, the Pittsburg, Tex. mansion of Lonnie (Bo) Pilgrim. The 79-year-old founder and chairman of Pilgrim's Pride (nyse: PPC - news - people ), the nation's biggest chicken processor ($7.4 billion sales), had barely caught his breath following the sudden death in mid-December of Chief Executive O.B. Goolsby, when he faced a fresh crisis. On Jan. 8 a federal grand jury returned indictments against 20 Pilgrim employees. (No one has yet entered a plea.) Five people have been charged with peddling stolen Social Security numbers and forged documents to illegal immigrants looking for work at one of the company's slaughterhouses, in Mount Pleasant, Tex. Says Alan Jackson, the assistant U.S. attorney prosecuting the suspects, "Identity theft is what makes the case."

But the immigration angle gives it a special irony. For years Pilgrim has been outspoken about how vital migrant labor is to his business. In 1996 he told the Dallas Morning News, "God wants poor people to have jobs." A decade later he told the same paper, "We're not looking for cheap labor. We're looking for available labor. … How many people can you get to squat down and catch chickens?"

A lot. Pilgrim's 55,000 workers kill, pluck, chop and pack 44 million chickens a week at its 37 factories. In the interest of keeping a steady supply of workers, last year Pilgrim founded Texas Employers for Immigration Reform with owners of a dozen agriculture and construction businesses. "You won't have to build a wall if you have a good guest worker program," says William Hammond, president of the Texas Association of Business.

Separate from the criminal complaint, a Labor Department investigation uncovered discriminatory hiring practices at Pilgrim's Dallas and Nacogdoches, Tex. plants. The company denied all wrongdoing but signed a consent decree in September, agreeing to pay $1 million and hire 63 non-Hispanic females, 100 Hispanic females and 198 non-Hispanic males who met all job qualifications but had been rejected in favor of Hispanic male applicants.

In April 2007 the Immigration & Customs Enforcement (ICE) arm of the Department of Homeland Security began its investigation into Pilgrim's Mount Pleasant factory after receiving 76 calls complaining that the company was knowingly hiring undocumented workers. Undercover agents and informants posing as illegals say they penetrated a ring of identity thieves and document peddlers at the plant. According to ICE, Daniel Totosaus-Rodriguez had been working at the plant for a year, making $440 a week under the stolen identity of one Alberto Morales and claiming to be involved in the narcotics trade in Mexico. He and his accomplice Marcos Garcia allegedly sold agents sets of false documents for $1,100 that they guaranteed would be good enough to get a job at the plant--or they'd replace them for free.

Why so confident? They allegedly had an inside connection. Reyna Villarreal, the aunt of Garcia's wife, was a hiring manager in the plant's personnel office. ICE officials charge that Villarreal took a $500 bribe to hire the undercover informant brought to her by Garcia and that they had similarly given jobs to more than a dozen other identity thieves. What's curious is that Villarreal was working there at all. ICE agents discovered that she got her first job with Pilgrim's Pride in 2000 under the name Reyna C. Aleman, using a Social Security number stolen from an Ohio man; she falsely claimed (under penalty of perjury) on employment forms that she was a U.S. citizen. Then in October 2002, says ICE, Reyna Aleman resigned from Pilgrim's Pride, only to be rehired the next day to the same job as Reyna Villarreal, with a different Social Security number. On her application she claimed she had not worked at Pilgrim's Pride before.

That evidently didn't bother her supervisor, Hope Anguiano, who in 2003 wrote an internal memo explaining that Aleman/Villarreal had previously worked for the company under a different identity, according to ICE. Pilgrim's Pride also notarized Villarreal's employment documents and submitted them to the Immigration & Naturalization Service. When the case comes to trial later this year, Villarreal faces as much as 20 years in prison, according to prosecutors.

During the investigation last summer Pilgrim's Pride fired 100 or so workers at Mount Pleasant for having "bad papers." The company says it continues to improve its hiring practices and always checks the authenticity of Social Security numbers used by applicants. Culpability, apparently, doesn't affect the pecking order: So far no executive at the company has been called to account.