IBC Bank Chairman and CEO Dennis Nixon

Thank you, Gilbert, for having me on board with you today. Yeah, I think that's really how I got started in the whole border issue and immigration. My research into the matter opened my eyes to the demographic problem and the fact that we've had low fertility rates in most of the developed countries around the world for many decades now. That's resulted in a collision course now with all of the baby boomers retiring. The baby boomers being the largest part of our workforce, and we're followed by the millennial population, which mathematically is a much smaller group of people than the baby boomers. After World War II, we had all these people have children, and now they're retiring, or many of them have retired. By 2030, most of those people will be out of the workforce, and many of them will pass away. So we have a big gap in workforce. I started investigating it more and more, and I realized, my gosh, half of our workforce is coming from immigrants in this country, and we don't have an immigration policy today that is matching our workforce needs with the people that we need to do the jobs. Through my research, I determined that we need 6 to 700,000 low-skilled workers every year, and then we need all the high-skilled workers we can find, because we're not graduating enough engineers, especially in the STEM areas of education that we need to be able to maintain our economy. I'm a basic banker, and I say people plus productivity equals GDP. Well, if you don't have the people, maybe you can do some of that work with automation. I'm in the business of banking, so automation is a big part of our business, but we still need people. Today, I only have 87% of my jobs filled, and we're working very hard every day to try to fill those jobs, and we just cannot fill them because we don't have enough people in the workforce. The other problem is our labor participation rates are not as strong as they used to be. So now we have a gap between the jobs available today and the people who are available for those jobs, about 2.7 million, and that number fluctuates between 2 and 3 million people pretty constantly. So here we have this dilemma of workforce needs for businesses, and yet we don't have an immigration policy that provides that. And this whole mess with the asylum that's been created under the Biden administration, although providing people, has not provided people in an orderly fashion to match our workforce needs. As an interesting factoid, I'm on the board of visitors of MD Anderson in Houston, been on that board for about 20 years. In our last meeting in the fall, Dr. Pisters, who was our head of that MD Anderson institution, was on stage talking about the issues at the institution. One of the factoids that he pointed out: one in six of our research scientists and the people who are here trying to find a cure for cancer were born in the United States. One in six. That used to be like one in one and a half, now it's one in six. So we're seeing greater and greater dependency on people from all over the world, and we need to recognize that we just have not, since Reagan, had any kind of basic immigration reform that can actually face the problems we face coming out of today's world.

Exactly right. We've got that basic workforce need, those people in the kitchen, the servers, the people who do the basic work that we need to have done. I'm aware of that as well, that some restaurants are having to make a choice whether to open for lunch or open for dinner because they can't staff both. We've seen that critically out in West Texas where the big oil and gas boom was. A lot of restaurants and small service businesses couldn't open because they didn't have the people. The oil and gas industry was absorbing them all, and they were actually having to bring people in by vans from all the surrounding cities in that area to be able to meet that workforce demand.

It's clear that things need to be streamlined. The reality is anything we do with government seems to get overly complicated. One of the criticisms obviously is that all these people are taking our jobs. Nobody in the construction industry, or in the food service industries, or in agriculture, can tell you anybody's taking anybody's jobs. There's just no people around. In my case, I can testify to the fact that we've got only 87 to 88% of our workforce filled. We're looking for people every day, and our HR function today is full-time trying to recruit and retain. People continuously move around. One of the problems we have today is the internet itself. The internet has been a great resource for controlling price because you can shop and look at all different places to get the best price. Well, it also works against us in terms of hiring people, because people can put their resume out on the internet and they constantly get pings from various businesses that want to hire them. So the turnover rate we're also seeing in business, not only do we have a workforce shortage, we have a constant revolving door of people coming and going, which is running our training costs up and our customer service quality down, because people don't stay in the job long enough to get their skills up. So you have people complaining that you don't have good workers. Well, it's not that we don't have good workers, we can't retain them long enough to train them properly and maintain them properly.

Yeah, I think what the bottom line for me is that you've got to take the money out of this process. This whole situation is under the control of the cartels on the southern border. I'm not as familiar with the northern border issues as I am the southern border, but the northern border is also becoming a big problem. People have been invited to come. I mean, that's what Biden did. Whether you agree with him or don't agree with him, that's what he did. During his campaign, he basically put in place policies that said come, if you surrender at the border and you claim you fear for your life and you want to seek asylum, then they're going to put you in the asylum process. The difficulty that we have today is that it's all managed by the cartels. The people that come across the border, at least here in Texas we know for sure, and we know pretty much in California and the other states, that there's a toll on the border and the cartels are collecting that toll every time somebody comes. So my first choice is to get rid of the money. You stop the money by sending people back and saying, look, you have to do it a different way. If you want to seek asylum under our laws and you can qualify, then you start at the embassy or their consular office in the country where you live now. That could create some problems in terms of security, but in most cases, no, you can go into one of our consular offices or one of our embassies and make that claim and start that process.

I think that is a concern, but we also know that 95, somewhere 96, 97% of the people who are seeking claims based upon fear of their life are not claims that can be made. So most of the claims that are really coming are more economic than they are real fear for life. I think that basic data that we've seen from the immigration services indicates that most of these claims are turned down. So I would say yes, maybe there are some risks there, but then I think also that you could move to the country next to you to make that claim. That's what the state of Mexico is sort of about, that you make that claim in the closest country to you. But I think you need to make that claim through our existing facilities. We have consular offices, embassies all over the world. The State Department is not going to jump up and volunteer to do that because that's a big job, but I think we're going to have to fund that resource at those local levels. We're spending billions of dollars now on border security that we would not have to spend if we got this process contained at home and then we took the money out of it. The people that come up here that spend four, five, six, seven thousand dollars, I understand the Chinese are paying as much as 40 or $50,000 to cross, those people are not going to come back again because they don't have the money to do it. So if they come up here, you send them back immediately, which is what I'm calling for. If you want to make a claim, you go to our consular office or you go to an embassy, you make that claim. If that claim has got substance to it after an interview with an embassy officer, then you can go through the process. What that process is, I haven't designed that, but I believe it can be designed in a way that's effective for the people who have that issue and cut the numbers down from thousands to one or two.

No, I think because they have not found a solution that works because they haven't sent people back. People basically, it's a rush, it's almost like the Oklahoma Land Rush. You have an opportunity maybe once in a lifetime and you don't want to pass it up, so you see people coming that are basically rushing across the border because they feel like they've reached the motherland, so to speak, and they want to stay here. I can understand that. We have to look down today at Latin America. Latin America's a mess. The governments down there have failed the people, and the people are looking for ways to improve their lives. You can't blame them for that. But we have to have order in our country too, because now we're seeing these unintended consequences of this action resulting in roaming gangs where they're beating up on police people, they're robbing businesses, and doing other things because they have no way to earn a living. They're not allowed to work. That work process is really, if you're going to have a temporary asylum program and people are going to spend eight or nine or ten years in the country before they get a hearing, there's got to be some way to support those people. Why should the taxpayer be caught with that tab? Why don't we allow them to have some kind of a work permit? If you're going to have this process, tie it together with some kind of a work permit to allow these people to have substance. It's a mismanaged process all the way around at almost every level, and now that's absorbed all of our border officials in terms of processing.

No, I think that's really what the confusion is. I think the reality is that the Biden administration has created a very liberal, very open door interpretation of those, and using what I understand the basis of what they're doing is using parole as a part of that process. In other words, you've come into the country and the government can grant you parole. That parole process has been traditionally used for emergencies like medical care or some kind of action that someone had to come here to do something, and they're given permission to come in for a specific period of time and then return. I believe, as I've seen and looked at it, the readings I've seen say that they don't have to interpret it that way. They can put a block on it, send everybody back, and say no, you don't have that right to come to the United States under the law. We know we can get a Supreme Court decision that's split, and so people interpret things the way they want them to interpret them. So we continue to have one liberal process that says okay, you come, then we have another process that says no. I know from my practical experience that you have no right to come to the United States unless you're a US citizen. Our border CBP people every single day make those decisions thousands and thousands of times at our border crossing ports. I'm sure if you've traveled around the world, any place you go through a checkpoint in every country you come into basically, you are permitted to come. You don't have any right to come into that country. If you have your papers in order and all your documentation in order, they allow you to come into the country, but if you don't, they can refuse you and send you back. That happens every single day at our ports of entry. People are refused entry because of some particular reason. It's up to that individual inspector to determine under his subjective view. So the government has basically said, now the Biden administration has basically said to the Border Patrol and CBP that these people, if they come in and make that claim, then they are allowed to be processed. That's exactly what they're doing. It's a very peaceful process. The media makes it out like it's some sort of terribly destructive and violent process going on on the border. We have offices in Eagle Pass, and it's not the case at all. People are coming in, they're basically holding their hands up and saying 'I fear for my life and I want to seek my rights under asylum laws,' and they're told to go get in line over there. They wait, once they get in line and are marshalled, then they get on some sort of transportation bus, taken to a processing center, and then they're released. There's nothing violent about any of that. It may turn into violence as people, it's the volume of people, too many people, that's the problem.

No, that's a serious problem too, because if we can't solve the problem in the United States and it's overwhelming us, you can imagine what it would do to Mexico. They're a country of 125, 130 million people, so you can't have 10 million people or 8 million people making their home in Mexico. They've got the same problems, it'd be all kinds of crime and problems. Then obviously you have the criminal problems already in Mexico, those people would greatly abuse it. The big problem here is that we have a failure of Congress and the executive branch to pass meaningful legislation to have immigration reform and asylum reform. So you and I can talk this issue to death, but when our political leaders cannot come together and sit around a table like we're doing right now and come up with a meaningful immigration policy and asylum policy that solves the problem, we're going to continue to have these what I would call bastard problems that just never get fixed because people won't stand up for it. To me, the most ridiculous part about this is all the money that's being wasted, billions and billions of dollars, not only by the state but by the federal government, to try to manage something that's more manageable when the law is changed and the people deal with it. It's just disgusting to me that both parties can't come together and sit around a table and come up with a solution for this. We know we need people, we know more or less what the estimates are, modeling shows what we need. We should be able to sit down in a civilized country and come up with a policy that works for us and works for the rest of the world.

I think the big problem that killed it was just the fact the numbers. You know, 5,000 a day, and then I think there was another trigger at 8,500 or something like that. Nobody trusted that that would be an effective tool to stop it. I think the lack of trust in the executive branch to actually enforce the law and to be able to get control of it just didn't seem to be there. The people I talked to, the senators I visited with and talked about it, they were very skeptical that that big number was basically saying theoretically that you could permanently allow 1.8 million people into the United States every year under that program if it's interpreted liberally by the administration. So I think the bottom line of that was that there needs to be more effective overall immigration reform, and not just this sort of halfway or one small little etch of things that have to be done here that will just minimally solve the problem, when we need to sit down and really solve it. They just don't seem to be capable of doing that. Obviously, there are forces on both sides of the political world that we live in that don't want any immigrants, and then you've got people that want all the immigrants. Getting in the middle of that just seems to be such a challenge for everybody, which I don't understand. To me, that's what I call my paper 'Common Sense.' It seems at some point you have to recognize, and maybe now that we've seen such a flood and now that we've seen so many countries all over the world using that open door policy to come, we just thought we were dealing with people from the south, but now we've got a problem on the Canadian border. Now we've got a big problem on the southern border. Not only are we having people come from the Latin American countries, we're having people coming from all over the world. So when is this going to stop, and who's going to put control of it? We're going to have gangs of people roaming the streets, we're going to have some serious violence, and we don't know whether we have terrorists and other people coming in.

I think everything that we do in life has to be managed. Every day, I know you probably get up and you have a managed routine of what you do every day. So I think, why is America prepared to accept this chaos?

Yeah, I can completely understand the governor's frustration. This obviously is a terrible issue for the border and all the things that are going on on the border with the people crossing and the difficulties that these individual communities face. I live in Laredo, and we have business in Eagle Pass, for instance. We have major operations there, we have major operations up and down the border in the Valley, Rio Grande as well. It's not a comfortable situation to have this many people traipsing through your community where you have no way to understand what they're doing and what risks they may apply to us. We have shootings all over the country now, we have all kinds of violent things happening all over the country, so you can't totally dismiss that you're going to at some point have those kinds of things happening. I understand that. But this money that's being wasted, in my opinion, has been totally ineffective. I think at some point you have to realize it is ineffective, and it's become a political issue more than it is a factual issue. So we're spending a lot of money with our National Guard and our DPS officers. We have all these people coming in from all over the state being pushed down to the border. I think we're going to hurt our Texas National Guard because these are weekend warriors, for lack of a better word. They spend their time because they want to serve their country, but they also have jobs and they have lives. So you call them up and you send them to the border for a year or six months or whatever time frame, that's disrupting their careers and their lives. You continue to do that, you're going to kill your recruiting. First of all, you're not going to have anybody join the Texas National Guard going forward, in my opinion. It's going to be a very tough situation. You already have a tough recruiting problem. You've got the same problem with DPS. You're pulling these people in for temporary duty from all over the state, having them come to the border, they're having to spend many, many months at a time away from their families. There are all kinds of morale problems being created, as I understand from DPS, and all kinds of extracurricular activities that would not occur if they were in their home station. The other problem we're having on the border is our stop activity is three or four times what it is in the rest of the state. So these people, especially DPS, are stopping people all the time, causing discomfort in our communities because they're being stopped and asked, checking for maybe they're transporting people or they're doing something possibly illegal. That's an annoying and invasive process that we shouldn't have to suffer through either. So there are a lot of negative consequences coming from this that the average person living in the northern part of the state doesn't understand. The fact that we're going to have a terrible problem with our Border Patrol, our Texas National Guard, and our DPS recruitment because of these problems, and we already have a huge problem with Border Patrol and CBP people. They've never been able to meet their job requirements because there's not enough people. Why? We have a demographic problem, we don't have enough workforce. The 87% that I face, virtually every business in the country is now facing. So we have real workforce problems. If you put these people into a situation where they don't want to stay because they have no ability to maintain their life in a reasonable way, you're going to have serious problems. So I understand the frustration, it's a huge frustration, but is it being effective? I don't think it's effective.

No, I think it has proven out to be that there's an excessive amount of stops. The data is published by the state. These different zones of the state keep up with data on stops, and the border region, which is border area three, has data that completely verifies the fact that these stops are excessive, and they've been going on for a long time now, for several years, because of the very thing you talked about. How do we know whether you're here illegally or not illegally? The fact that you're in a car and maybe you've got five or six people in a car, which is not uncommon on the border with large families, people do travel around like that, and so those people are constantly being stopped. The other problem we're having is they're stopping trucks and they're basically causing serious delays and logistics problems on the border with our trucking industry. Laredo itself crosses 20,000 18-wheelers a day. Laredo now is the largest port in the nation. Our business and commercial activity is huge, and those trucks are coming back and forth carrying vital products in our supply chain to support the economy of the United States, Canada, and Mexico. Periodically, the governor has gone in there with the DPS and stopped and inspected all these trucks that are in what we call the border zone, which is basically 20 miles on the north side of the border and 20 miles on the south side of the border. That zone is where these basic trucks are crossing. They're inspected by the CBP people as they cross, and then there's another checkpoint about 20 miles north of the border in most cases, somewhere between 18 and 25 miles, and then they're checked again. Well, he's gotten his troopers in there to reinspect them, and they're inspecting them now for safety reasons. So if you've got a mud flap that's not right or your turn signals not right, these trucks are being pounded and inspected. The problem is a lot of that inspection was going on right at the bridgeheads as trucks were coming across. Well, they were backing up into Mexico because they couldn't exit the bridges because they're being inspected. They're basically saying, 'Well, what's the problem? We're on US soil now, and our inspections are 15 or 20 or 30 minutes time frame.' Well, we don't have 20 or 30 minutes on the border when you have 20,000 trucks crossing every day. One minute is a disruption. So we had terrible problems with that backing up into the bridges and causing problems and delays, which aggravates the inflation problem because stuff doesn't get delivered, we have supply shortages, all the consequences. The problem I have with what most people are doing today is the law of physics: every action creates an equal and opposite reaction. We're not spending enough time understanding the reaction to our policies and our processes. So we don't want to look like we're taking action, we look out there and say, 'Oh my goodness, what have I done now?' When we had these stoppages that caused massive problems, we were calling the governor's office and stopping this and saying, 'Quit, you can't do this anymore,' and people pushing back saying, 'Why is this such a big problem?' Well, they're sitting way up there in Austin, and we're right there on the border, and we can look at the trucks and see the problem. We had people that were stuck in line for as much as 24 hours trying to cross the border. There were no facilities for them to use a restroom, there were no facilities for them to eat, they couldn't abandon their trucks. A big mess. So I think we need to think more about what we're doing here. That's exactly what happened in the Biden administration. They had this generally socially good policy, so-called, to let the people in who were suffering, but you opened the door to everybody, and suddenly now you have a flood. Now what are you going to do with it? Now it's hard to get ahead of it, and now they're scrambling to try to figure out how to get ahead of it. That's the problem we have today. You've got to stop it. I'm sorry, you just got to stop it.

Well, we're very concerned because we have a big investment downtown. Our bank headquarters here in San Antonio was down on the Riverwalk next to what used to be called the AT&T Center, which was their headquarters when they were here in San Antonio before they left to Dallas. One of our primary companion buildings there was the AT&T headquarters building, and we have had a very hard time renting that building because the people who want to come into downtown San Antonio don't want to come into downtown San Antonio anymore because they're tired of the homeless problem. People have to walk on the streets normally to do parking because we have a parking problem in downtown San Antonio for businesses and for office buildings. Ladies walking up and down the streets early in the morning or early in the evening, especially in the wintertime when it gets dark so early, they're being harassed and bothered by people. They get uncomfortable. So people are saying, 'Well, we're not going to stay downtown anymore.' So we've had this massive exodus of businesses that don't want to be in downtown anymore, and we're seeing a very difficult future for us to be able to lease that space. We went over to the mayor's office and had a discussion with him and talked about, 'Hey, we've had a very significant investment downtown. We're looking at doing more investing in the downtown area. We've got the Alamo project, which I think is going to be maybe the most important tourist attraction in Texas again. The things being done there, 20, 25 years behind schedule, should have been done years ago. We're finally reaching the pinnacle, the apex of what would be the greatest tourist attraction in the state of Texas because of what the state has done to sponsor that and what local business leaders have come to spend money and make donations. We made a donation ourselves as a company.'

Well, he says we have all these police people on the streets and we have all these people monitoring the homeless. It's just not true. We walk the streets, we walked over there and didn't see one single policeman doing anything. We've allowed the Riverwalk to become a hazard again. When I first came to San Antonio in the 70s, the Riverwalk was not a very pleasant place. The thing that changed the Riverwalk from an unpleasant place to a pleasant place was law enforcement. When they started patrolling the river and then they started making investments in the river and making it a true tourist attraction, that changed the whole dynamic in downtown San Antonio. We need to get back to basics.

I think those kinds of programs have to be carefully measured and where they are being put, because they draw people from everywhere. The social media that exists today provides opportunities for people to come to cities where they believe they can get serious advantages, and I think that draws homeless people to the city when you have superior products and superior services for people like that. They come here. I think that is a big problem. From the things that we've seen, the homeless industry or society has organization about it as well in terms of where they raise money and what corners they stand on and how they promote their existence. There are a lot of problems in that community with drugs and other issues, alcoholism. I feel very, very concerned for those folks, but at the same time, we've got to maintain our lives. We have public areas that people should be able to come to. I think the first duty of government is that every citizen should be safe in their community, and we are not safe in our communities anymore. That will turn us into a terrible outcome here with our property values and the ability to get people to be in downtown. We have a problem already because of stay-at-home issues, work from home issues, and then you put that on top of it, you basically have a situation where you have a collapsing market. We just don't need that in San Antonio. I think San Antonio is probably one of the nicest downtowns that you could ever have and wish for, and with the Alamo coming on, there are all kinds of positives that would be attached to that. If we don't manage the homeless problem and law enforcement doesn't get tough on crime in downtown San Antonio, we will lose it.

Thank you very much, Gilbert. Thank you.