HUD Approves Fund Ban for Illegal Aliens

Cities may withhold federal grant money from programs that serve illegal aliens without violating anti-discrimination laws, the Department of Housing and Urban Development said Thursday in a letter to officials of this Orange County city.

In a long-awaited ruling that could have broad impact on illegal immigrants and attempts to regulate them, HUD lawyers agreed that Costa Mesa can deny funds to charities and other groups unless they pledge to not knowingly serve illegals.

The city passed such a law last August, but voted to suspend it when federal authorities questioned whether it might violate U.S. anti-discrimination laws.

“In line with our review of the case we do not conclude that the city’s prohibition on the use of city funds for illegal aliens is in violation of the Constitution, or other federal law,” wrote HUD general counsel Frank Keating, in an opinion addressed to Rep. C. Christopher Cox (R-Newport Beach). City officials requested the ruling through Cox.

Keating added that federal regulations do not appear to preclude HUD from adopting a similar policy agency-wide.

“In discussions on this subject, the question has been raised as to whether HUD could, without clearly articulated congressional direction, issue regulations which prohibit illegal aliens from receiving bloc grant assistance. In our view, HUD may properly and in accord with constitutional principles issue” such a regulation, the lawyer wrote.

HUD officials could not be reached for comment on whether such a policy is under consideration.

Immigrant-rights groups immediately branded the ruling “dangerous” and “sad,” predicting that it will encourage other cities to adopt restrictive policies.

“It’s a really backward step,” said Evelyn Colon-Becktell, chairwoman of the Orange County Coalition for Immigrant Rights. “It’s outrageous. Outrageous that we would do something like this. I could see this having a ripple effect on other cities and it could be really devastating to the immigrant population.”

With HUD’s ruling, several Costa Mesa City Council members said they will seek to have the city’s original funding policy reinstituted

“I have asked to have it put on the next council agenda,” said Councilman Orville Amburgey, who proposed the policy. “I think HUD’s decision confirms what we have said all along. They quite clearly feel that our policy is valid and agree that in this day and age when there is such a demand for funding that we should not be disbursing those funds to illegals.”

The city’s funding policy, believed to be the first of its kind in the state and possibly the nation, had attracted national attention and provoked a storm of protest from immigrant rights groups and service providers.

Opponents of the policy predicted that such attempts to drive away illegal aliens would radically alter the way nonprofit groups operate.

It was also feared that some groups might discriminate against Latino-looking people, rather than set up screening procedures.

Nativo Lopez, director of the Santa Ana immigrant rights group Hermandad Mexicana Nacional, pointed out that a recent report by the General Accounting Office in Washington found widespread discrimination against undocumented workers by employers, who now are obligated, under penalty of sanctions, to make sure their employees have legal working papers.

“If employer sanctions can’t work, what makes them think that social service agencies can do any better a job in ascertaining the legal status of their client population?” he asked. “We’re going to see discrimination increase geometrically. It’s a very, very significant ruling.”

Colon-Becktell said her coalition will probably hold an emergency meeting of its executive board to discuss the ruling’s implications.

Many service providers have said they would forgo city funds rather than accept terms of the policy if made mandatory.

This year, Costa Mesa is dispensing $279,900 in HUD Community Development Bloc Grant and general revenue-sharing funds to 35 public service agencies. Groups range from the Harbor Area Boys and Girls Club to the Easter Seal Society and the South Coast Institute for Applied Gerontology.

“I really don’t see how we can sign a contract that includes (the policy),” said Shirley Cohen, executive director of Feedback Foundation, which provides meals to needy seniors in Costa Mesa and other areas of Orange County.

City officials have conceded that the policy, if reinstated, would be difficult to enforce. The original policy did not outline the measures an agency should take to ensure it does not serve illegal aliens.

Costa Mesa’s law states that the city “will not consent to support individuals or agencies who employ, provide assistance to, house, feed, or in any other fashion, support illegal aliens.” The sole programs exempted were medical and dental services.

Times staff writers Maria Newman and Mary Ann Perez contributed to this story.