CNN — LOU DOBBS TONIGHT — Aired December 26, 2007 - 19:00 ET

KITTY PILGRIM, CNN CORRESPONDENT: As part of our reporting on the crisis of illegal immigration throughout 2007, we've paid particular attention to one state, Arizona. Striving to fix its broken border with Mexico, looking very much like a model for the nation. An example that we first reported in September, the city of Scottsdale is taking action after a police officer was shot to death by an illegal alien. That community now requiring all criminal suspects to state upon arrest whether or not they're in the country legally.

In a moment, we will be speaking with the Arizona state representative Russell Pearce. He's a former sheriff's deputy and author of Arizona's ground breaking anti-immigration laws. But first, Casey Wian has the latest on the Arizona crackdown.

(BEGIN VIDEOTAPE)

CASEY WIAN, CNN CORRESPONDENT (voice-over): In September, Phoenix police officer, Nick Erfle was gunned down while attempting to arrest Erik Martinez, a criminal illegal alien who had been deported to Mexico in 2006.

LT. BENNY PINA, PHOENIX POLICE DEPT: He has had several arrests in the past and he's a documented member of a local street gang.

WIAN: Police say after killing Erfle, Martinez took a motorist hostage, then he was shot and killed by other officers. Martinez's criminal history is a prime example of the gaps in U.S. immigration law enforcement. After serving prison time for theft, Martinez was deported by Immigration and Customs Enforcement, but he was able to illegally re-enter the United States, which outraged local officials at the time.

MAYOR PHIL GORDON, PHOENIX: This individual that took our officer's life today is a perfect example, a poster child of the failed Washington policies in terms of securing our border.

WIAN: Martinez was again arrested by Scottsdale police for assault but they did not notify ICE and he was released on bail by a judge. He could have been sentenced to 20 years in prison if convicted of felony illegal reentry. Officials say it's an oversight that cost the life of a Phoenix police officer. Now the Scottsdale P.D. is tying to prevent it from happening again.

SGT. MARK CLARK, SCOTTSDALE POLICE DEPT: What happened was this tragic event last fall, it really — it caused us to look at, well No. 1, we happen to be the agency, the last agency to arrest this criminal. And he was ultimately released by the judge later. But it caused us to look at how do we deal with the illegal immigrants in our community that commit crimes?

WIAN: Now Scottsdale police ask every criminal suspect where they were born and if they are in the United States illegally. If officers suspect they are, they call an immigration and customs enforcement hot line so ICE can hold the suspect for prosecution or deportation.

(END VIDEOTAPE)

WIAN: ICE has increased the resources available to local law enforcement in Arizona. For example it has made detention and removal officers now available 24 hours a day. Kitty?

PILGRIM: Thanks very much, Casey Wian.

Well the results of Arizona's crackdown have been nothing short of remarkable. In the border patrol's Yuma sector, arrests of illegal immigrants have dropped from 119,000 last year to 38,000 in 2007. Not only does this trend continue downward, but authorities in Arizona report that border crime has dropped significantly as well.

Joining us now from Phoenix is Arizona state representative Russell Pearce. He's a former sheriff's deputy. He's also author of Arizona's groundbreaking anti-illegal immigration laws. And thank you for being with us, Mr. Pearce.

RUSSELL PEARCE (R), ARIZONA STATE LEGISLATURE: Thank you.

PILGRIM: You have a tough new law. It's going into effect in January. Do you believe it's already acting as a deterrent?

PEARCE: Well, if the pundits are to be believed, yes, it is. They say dozens are leaving every day. Hundreds are leaving monthly and that's its intent. Clearly illegal is illegal. They don't have a right to be here, they don't have a right to take jobs that belong to Americans. And then you can't ignore the economic impact. Arizona, $2 billion a year, $2 billion a year just in K-12 to educate illegal alien children.

Plus the crime, plus as you talked about. And this crime isn't just Officer Erfle. It's kind of like the Newark, New Jersey incident of the MS-13 gangs that execution style murdered those young college students.

This is a daily event throughout the United States. This is a daily event. In Arizona, you've got Officer Adkins, Officer Martin, Officer Erfle, Officer Glidewell. You've got Deputies Pierce, Deputy Archslinger (ph), you've got Officer Eagle down at the Park Range. You've got several agents.

This is just Arizona. I mean, it is outrageous that we would think this is just collateral damage for the cheap labor advocates as they continue to import and lure illegal aliens across the border with jobs. Enough is enough. Arizona is speaking out and we're not going to take it anymore.

PILGRIM: Let's take our viewers through some of the points of your law which is very, very tough on employers. If an employer knowingly employs an illegal alien on the first offense, the business temporarily loses their license and face probation for three years. If they're caught again, the license is permanently revoked.

Some are saying it's like a corporate death penalty if you are involved in hiring illegal aliens. You're basically cutting off the demand for the cheap labor force, correct?

PEARCE: Absolutely. We live in a free market. The market will adjust, but what you can't do is allow businesses to rely on staying open while breaking the law and yet ignore all the damage to Americans and the taxpayer. And enough is enough.

This law is fair. And it will be proven to be the fairest and most nondiscriminatory law in the nation. Tough, but fair. You have to knowingly hire an illegal alien. That's been the law since 1986. It's a felony under federal law, you can't knowingly hire an illegal alien.

And in Arizona though, and in the nation, you've always had to rely and perform what is the I-9 process, that's documentation of eligibility and so forth. But that's been an employer fraudulent ridden process because if you just have documents, and even though they're fraudulent, you know they are, you can kind of wink and nod and put them in the folder.

Now in Arizona, we're going to demand by law that you sign up for the e-verify program. It used to be the basic pilot. That program will tell you very clearly whether they're eligible to work here. The reason people don't like to sign up for it, they don't want to know if their workers are legal or not legal. Now they're going to have to. No more winking and nodding. And again, if you knowingly hire an illegal alien, first offense, up to 10 days suspension, three years probation. Subsequent violation, you lose your right to do business in the state of Arizona.

PILGRIM: I want to talk to the figures. It's 9-to-12 percent of the workforce in mostly low skilled jobs in Arizona is illegal. The law was challenged by business groups last week, it survived that challenge. A judge is going to hold a hearing on the constitutionality of this law in about two weeks saying that, you know, a state law can't override federal law. What do you think of these challenges?

PEARCE: Well, I love them because they're going to get put in their place. You know, clearly, states have inherent authority to enforce federal law, including immigration law. Had Congress not wanted the states to enforce these laws, they have what is called plenary powers. They could have invoked those and preempted the states from enforcing these laws. They didn't do that. In fact, Congress has made it clear it's always been the intents for the states.

When do not states have a constitutional responsibility for their citizens for the economic harm, the crime and damage and the cost to the taxpayers, the legal citizens? We have a constitutional responsibility. The citizens have a constitutional right and it's time for our politicians and our policy makers to quit hiding and put America first, put the American citizens first and enforce the law.

And that's what's going to happen. They will learn, this law is constitutional, it's fair and it's legal. And it is going to survive the challenge. I truly believe because again, it's written entirely with knowing that we were going to be sued. I was very careful to make sure this complied with previous court rulings and the constitution and congressional intent.

PILGRIM: We will keep the focus on it as it survives these challenges. Thank you very much for being on the program Russell Pearce.

PEARCE: And it will, thank you very much.