Illegal immigration rises there, and small-business people see their income reduced because of fear in Mexico.

CLAUDINE LoMONACO

DOUGLAS - Kevin Fenske pointed to freshly scuffed earth under a bent barbed-wire fence.

"You see?" asked Fenske as he knelt down to straighten the wire. "This is where they came in last night."

Fenske, 44, owns a ranch and feed store half a mile from the Mexican border. He's used to migrants crossing his land. But ever since the Minuteman Project, an armed civilian patrol that aims to seal the border, set up shop a little to the west of him, he said he's been overrun. All the project has done is move traffic his way, he said.

"I've had more illegals this week than I've had in the last two months," he said.

But Fenske said he's angrier about what the project has done to his business, which he said has taken a 20 percent loss since the Minutemen arrived April 2. Like most business owners in Douglas, Fenske depends on customers across the border in Agua Prieta.

"They're not coming because they're afraid they're going to be harassed," Fenske said.

Fenske's wife, Cynthia, said she's seen a similar impact at the Wal-Mart Super Center, where she works. Wal-Mart has publicly denied a slowdown, but William Molaski, director of the Douglas Port of Entry, said the store reported a 12 percent drop to him.

While Minuteman volunteers insist their efforts are focused on stopping illegal immigration, others say their presence has created a fearful environment that has angered the town's largely Hispanic population, frightened legal visitors from Mexico and hurt the town's economy.

Douglas is a town of 15,000 people that depends on visitors from the much larger Agua Prieta, population 130,000, for 60 percent of its sales, Mayor Ray Borane said. He said business owners, including those at big-box stores built to take advantage of Agua Prieta's population, have been expressing concern over the project's potential economic fallout.

Borane is a critic of the Minuteman Project and has questioned the potential for violence among armed volunteers recruited over the Internet.

Like many people in Mexico, Agua Prieta native Jose Lopez refers to the Minutemen simply as "caza-migrantes," or migrant hunters. He normally spends around $60 a week in Douglas on groceries. But the 49-year old carpenter doesn't plan to cross the border into Douglas as long as the "migrant hunters" are around.

"I'm legal, but how do I know they're not going to come after me?" Lopez said. "They're migrant hunters. They're bad. And they're armed. That's even worse."

It's illegal to carry a gun in Mexico, Agua Prieta Mayor David Figueroa said. "When you see somebody with a gun, you associate them with the worst elements of Mexican society - drug traffickers or criminals." So even people with visas are scared and don't want to cross, he said.

"Scare off legal visitors in an attempt to reduce illegal immigration?" asked University of Arizona economist Alberta Charney. Not a good idea, she said.

In a study she conducted in 2001, Charney found that Mexican visitors spent nearly $1 billion in Arizona and generated tens of millions of dollars in tax revenue.

Over the past several years, Augy Garcia of the Tucson-Mexico Trade office, has worked to increase Tucson's share of that money. Today, Mexican visitors spend a million dollars a day in Tucson. Part of attracting them here is creating the impression that Arizona is a Mexico-friendly place, Garcia said. The Minuteman Project hasn't made his job easier.

"People here ask me if we're just a bunch of bounty hunters or something," Garcia said at a large manufacturing conference in Hermosillo where he was trying to drum up business and fight off the reputation of the Minutemen.

"The long and the short of it," he said, "is that these people come, and they have their right to express their opinion. But it does have consequences."

Back on his ranch, Fenske works on his fence and wonders about his future.

"We're a small business. It's just us," he said and twisted another piece of barbed wire into shape. "To lose 20 percent, whether it's for a few weeks or a month, it's going to take me months to make that up. To me, that's not right."