Despite increased anti-terror demands, immigration inspectors guarding the nation’s borders are laboring under an internal budget crisis that has forced freezes on overtime pay and new hiring — as well as the release of hundreds of illegal immigrants from detention centers.

The funding crisis, which some lawmakers blame on possible financial mismanagement at the Department of land Security, is expected to last at least through the fall, even as DHS warns that al-Qaida is planning another large-scale attack here before the November elections and has ordered airport inspectors to increase scrutiny of Pakistanis and other foreign nationals entering the U.S.

What’s more, detention facilities in some regions have been asked to cut their populations of detained illegal immigrants by as much as 50 percent to save money, according to internal DHS memos obtained by WorldNetDaily. More than 1,600 detainees are in the process of being released inside the U.S. Hundreds more are expected to follow before the election.

DHS officials insist operating funds are available but have been tied up in a messy bureaucratic process to reconcile the budgets of the INS and U.S. Customs, which in 2002 merged along with 20 other agencies into DHS.

“The process wasn’t as smooth as anticipated,” said DHS spokesman Bill Strassberger in a WND interview.

Until last October, the two agencies continued to operate under separate budgets appropriated for fiscal year 2003. But since then, they’ve been operating under the new budget structure, which is still in development, he explains.

“The money’s there, but who owns the money and where it should be is more the issue. And that’s just something that has to be worked out,” Strassberger said.

“It’s getting worked out,” he added, “but it may take until the end of the fiscal year, quite honestly.” The 2004 fiscal year ends Sept. 30.

Some alarmed members of Congress aren’t fully buying the explanation, however.

For example, U.S. Rep. Jim Turner, ranking member of the House Committee on land Security, last month asked the DHS inspector general to conduct an audit of the financial management of the U.S. Customs and Border Protection, or CBP. The Texas Democrat says the committee has received “numerous reports” of financial problems at the new DHS bureau, possibly resulting from mismanagement.

In a June 15 committee hearing, Turner cited one report from an unidentified source that drew attention to “a $1.2 billion shortfall which led to a hiring freeze in the bureau,” although the huge sum was later explained to be an accounting error. Still, he says reports indicate the bureau may have violated federal law that prevents an agency from “over-obligating” appropriated funds.

As a result of budget woes, officials say DHS decided to freeze hiring at two of its bureaus: CBP and Immigration and Customs Enforcement, or ICE, which is responsible for detaining and deporting illegal immigrants.

Strassberger confirmed the department recently froze hiring, but he sped short of blaming a budget shortfall.

“There was at one point a freeze,” he said. “But I think that was more a result of just trying to sort out the budget.”

Union officials representing federal immigration officers say the move is hurting efforts to fight terrorism.

“How are you going to catch these terror connections if you are under a hiring freeze?” asked Sergio Ugazaio, an American Federation of Government Employees official. “If the U.S. faces the threats it does, why are we not hiring more personnel?”

U.S. immigration officers are the first line of defense against foreign terrorists, something CBP Commissioner Robert C. Bonner himself pointed out earlier this year in a memo to all CBP employees. He praised the vigilance of an Orlando airport inspector who denied a Saudi national, now suspected of being the original 20th hijacker, entry into the U.S. The inspector, Jose Melendez-Perez, determined the terrorist’s story didn’t add up after questioning him in the secondary inspections area.

“CBP’s priority mission is preventing terrorists from entering the United States,” Bonner said in the Feb. 5 memo.

At the same time, however, inspections supervisors at major airports say they are under pressure to cut back on overtime staffing, especially for secondary inspections.

“The goal is no OT if possible. Even if we go to orange (on the terror alert system), D.C. says do with what you’ve got — no OT,” one CBP supervisor told WND. “If Osama bin Laden was in secondary, they’d say, ‘Let him go. We don’t have the budget.’”

Headquarters has also asked supervisors to refer fewer passengers to cargo inspections, says the supervisor, who works at a major international airport and asked not to be identified for fear of reprisals.

“What they’re doing is endangering people,” he said.

At the same time, airport inspectors are being asked to do more. Starting Sept. 30, they’ll start fingerprinting and photographing the millions of visitors from the 27 Visa Waiver Program countries. Currently they’re processing through US-VISIT only about a quarter of the foreign visitors they’ll have to process this fall. And starting Dec. 31, US-VISIT goes into effect at the 50 busiest land border crossings, as well.

Before the merger, overtime pay for INS inspectors was paid out of a fund set aside from airline user fees collected from arriving international passengers.

But now it’s not clear where that money is going.

CBP spokeswoman Danielle Sheahan could not say how the funds are allocated.

But, she said, “They don’t necessarily go for the overtime.”

Strassberger insists the money has not been siphoned off by Customs or ICE, as some legacy INS managers contend.

“There’s no split-out of money for Customs or for immigration,” he said. “It is one face at the border now.”

Even so, veteran immigration inspectors say morale has sunk to new lows since the merger, which they describe more as a “hostile takeover” by U.S. Customs management.

‘Shoot the stragglers’

Bonner is from the Customs side. So was his deputy, Doug Browning, who resigned after warning inspectors last year at a town hall meeting in Chicago that dissent over the merger would not be tolerated.

“My intention is to shoot the stragglers,” he said at the Sept. 9 gathering.

Many INS managers have left the agency since the merger. Those who remain say they are being marginalized.

“Washington views the inspector in the field as the enemy,” said a supervisor at another major airport, “and is trying hard to get rid of as many older inspectors as possible.”

Veteran immigration inspectors complain they’ve been muscled out of secondary inspections shifts by Customs agents, who they say don’t have the experience required to screen foreign visitors for visa violations and terrorist ties. Previously, Customs officers focused on inspecting baggage and cargo for illegal contraband.

And even though immigration inspectors carry firearms and have the same search and arrest authority as Customs agents — and both wear the same uniforms now — they are still not considered law enforcement officers, which means they miss out on the higher pay and benefits.

“They still look at us as stamping monkeys,” one veteran immigration officer said, “even though we’re on the front line in the war on terrorism.”

Strassberger allows that, for the most part, INS is now operating in the shadow of Customs.

“INS seems to have been absorbed and dismantled,” he said. “But that’s what the law (creating DHS) called for.”

He says headquarters is aware of immigration inspectors’ pique.

“We know that any time there’s change, it can be upsetting,” Strassberger said.

But he says headquarters is taking steps to “regularize the different pay structures and different promotion potential of the different inspections.”

“I mean, in general, your Customs inspectors were a (pay) grade higher than the immigration inspectors for relatively the same type of work,” he said.

“And there were different requirements,” he added. “For instance, immigration inspectors are expected to speak Spanish, whereas a Customs inspector, if they did speak Spanish, had a (pay) differential because of that.

“It’s a lot of little things like that that have to be worked out and made cohesive as far as one organization,” Strassberger acknowledged. “People just have to be patient.”

He also recognized that, “obviously, immigration inspectors would be able to focus better on the people side” of inspections than Customs inspectors.

But he says inspectors are undergoing rigorous cross-training so both sides can be proficient in both immigration and cargo inspections.

However, some Customs inspectors say they train less than one week a month at INS primary inspections booths.

“The inspectors on both sides of the house have really not been trained to accomplish the one-man inspection yet,” said a veteran airport inspector.

And the budget crunch has dried up funding for training, officials say.

“The budget is so bad they have sped Border Patrol and CBP officer training,” union official T.J. Bonner said.

“Customs side doesn’t even have the funding to train the new CBP inspectors when they get back from the academy,” said a CBP official.

Money is so tight, in fact, that some major airports have even begun cutting back on supplies used at inspections booths, such as copying paper, pens and latex gloves, officials say.

‘Compassionate alternative’

Worse, DHS is planning to release thousands of jailed illegal immigrants to save money. It spends about $550 million a year to hold the estimated 24,000 detainees around the country.

And headquarters is discouraging border patrol officers from taking new aliens into custody, according to both officials and internal documents.

“They don’t want to capture anybody because they’re running out of [jail] space and they don’t have the money to hold them,” a CBP official said.

An internal CBP memo circulated in the Midwest region reveals that the Detention and Removal division, or D&R, of ICE has been told to cut jail populations in half.

“D&R is feeling the budget crunch, too,” said CBP official Richard J. Roster in a recent staff memo. “D&R has been told to cut back lock-up numbers by 50 percent.”

“For example, down Kansas City way, they raided a chicken feeding farm and picked up 24 aliens. This will have to s!” he said in his June 21 memo obtained by WND.

Strassberger says the plan does not include mandatory custody cases at airports and will mainly affect land ports along the Mexican border, where overcrowding has become an issue since 9-11.

“It’s not so much a funding issue as much as it is a bed-space issue at certain ports such as Laredo,” Texas, he said.

President Bush, who has been courting Hispanic voters, has proposed amnesty for illegal aliens, even after 9-11, and waived US-VISIT fingerprinting for Mexican laborers and shoppers crossing the border on day passes.

Victor Cerda, acting director of detention and removal operations at ICE, called the administration’s new plan to release thousands of jailed illegal immigrants to confinement “a compassionate alternative.”

However, others note that part of the congressional mandate of DHS was to ramp up the number of deportations of illegal immigrants in the wake of 9-11. Now many are being released from custody.