May 16 (Bloomberg) -- The political divide over U.S. immigration policy is the line down the middle of suburban Denver's Quebec Street.

On one side is the headquarters of First Data Corp., the world's largest payment processor and owner of Western Union, which made $1.1 billion in 2004 from money transfers including funds sent by immigrants back to their home countries. Across the four-lane street is the district office of Republican U.S. Representative Tom Tancredo, a supporter of tighter immigration controls who once proposed taxing those transactions to pay for illegal immigration.

In terms of relations between congressman and company, ``that was a deal-breaker,'' says Fred Niehaus, First Data's senior vice president for public affairs.

In response, the company's political action committee wrote a $2,000 check to Tancredo's Democratic opponent before the 2004 election, and its chief executive, Charles Fote, chipped in another $2,000, the legal maximum. The company also hosted community forums that Tancredo says were aimed at criticizing him.

The split between First Data and Tancredo illustrates the ideological fault line immigration is opening between business groups and Republican lawmakers who usually get their support. Companies that need cheap labor provided by immigrants, as well as those like First Data that profit from their presence, are opposing the attempts of lawmakers such as Tancredo to limit immigration because of concerns about national security, the environment and population growth.

Colorado

First Data is Colorado's second-largest public company by market capitalization and one of the Denver area's largest employers, with 3,000 workers in the area. Tancredo, meanwhile, heads the Congressional Immigration Reform Caucus, a group of 71 legislators, mostly Republican, intent on tightening border security and reducing the number of immigrants. The group opposes President George W. Bush's push to create a guest-worker program for immigrants in the U.S. and to overhaul immigration laws.

Michael Kanner, an instructor in political science at the University of Colorado at Boulder, says First Data's contribution to Joanna Conti, Tancredo's opponent in 2004, was unusual among large corporations, which generally donate to incumbents to gain access to politicians with power. First Data was probably trying to send the congressman a message, Kanner says.

``I would not be surprised if about a year from now they bring that political-action committee on to fight Tancredo in 2008,'' he says. ``They will do almost anything.''

`A Horrible Man'

The community forums the company sponsored last year were billed as discussions on the immigration issue. In a Sept. 24, 2004, interview with radio station KHNC-AM, Tancredo, 59, said the forums portrayed him as ``a horrible man.'' One forum ended in screaming and a fight, Conti says. Niehaus declines to comment, citing a pending lawsuit.

The remittance market is critical for First Data, says Chris Penney, an analyst at Friedman, Billings and Ramsey in Arlington, Virginia. Western Union increased its money-transfer business by 14 percent last year, to $3.4 billion. The number of Western Union agents around the world grew to 219,000 last year from 30,000 in 1995, as it defends its market share in Mexico and works to expand into new markets in Asia. ``If you were asking what the one biggest key to growth is for First Data, I'd say it's Western Union,'' Penney says.

Tancredo says his proposal last year for a 5 percent tax on remittances was an ``off-the-cuff remark'' and considered only for a ``micro-second.'' He now wants U.S. foreign-aid contributions to each country to be reduced by the amount of money immigrants send there.

`We Respond'

``Whether it's our congressman or any other congressman, when there's notions of taxes on remittances and major impacts on our company, that's when we respond,'' says Niehaus.

Last year immigrants, mostly in the U.S., sent $16.6 billion to their families in Mexico. Total remittances to the Caribbean and Latin America were $45 billion, more than foreign direct investment and official development assistance sent to the region, according to a study by Inter-American Development Bank. About 75 percent of the money came from the U.S.

Olga Chavez, 28, says she sends $200 a month to her family in Guadalajara, Mexico, through a Western Union agent near her home in Denver, paying an $11.99 fee. Last weekend she was at Denver's annual Cinco de Mayo celebration near a Western Union booth where families, many of them Mexican, lined up to win company-branded prizes including shirts, pens and cups.

About 27 percent of the people in Denver are of Mexican ancestry and a fifth of city residents over 5 years old speak Spanish at home, according to 2003 U.S. Census Bureau estimates.

Tancredo's District

Tancredo's district, south of the city, is 6 percent Hispanic and one of the nation's most affluent. Republicans outnumber Democrats by a two-to-one margin, and Tancredo won re- election last year with 60 percent of the vote.

Conti, 47, says health care and the budget deficit were more important to voters than immigration. ``It was definitely Tancredo's issue,'' she said in an interview. ``It's not the district's issue.''

A national poll by the Washington-based Pew Research Center for the People & the Press released May 10 found that immigration divides the electoral coalitions of both major U.S. political parties.

The split is especially acute within the Republican Party between those who support business interests and ``pro-government conservatives'' who tend to be critical of business and supportive of government regulation, the poll said. Democrats face their own division, with affluent liberals strongly supporting greater immigration and those of more modest means opposing it.

Both Sides

``You could have people on both sides of the political landscape at odds with members of their respective coalition on immigration'' says Andrew Kohut, who directed the poll. ``These splits are driven by different economic circumstances and also different values.''

Immigration is likely to take center stage in the Senate in coming weeks. Senator Ted Kennedy, a Democrat from Massachusetts, and John McCain, a Republican from the border state of Arizona, last week introduced legislation regarding border security and the employment status of immigrants.

Niehaus says the congressional debate will provide opportunities for each side to find common ground on strengthening border security and enforcing existing immigration laws. ``At the end of the day when you look at all the parties, fundamentally no one is that far apart,'' he says.

Tancredo, meanwhile, says he is mystified about why some companies are entering the immigration debate. ``I have no idea what motivates them,'' he says. ``They have not come and talked to me about anything.''

To contact the reporter on this story: Nicholas Johnston in Washington at njohnston3@bloomberg.net.

Last Updated: May 16, 2005 00:08 EDT