WASHINGTON - Over the past seven months, Bush administration officials have quietly toured the country, trying to persuade businesses that rely heavily on immigrant labor to join a little-known program that would spare them from embarrassing federal raids if they voluntarily hand over their workers' documents so the government can scan them for fraudulent information.

The Department of Homeland Security has asked companies to join the ICE Mutual Agreement Between Government and Employers program, known as IMAGE, operated by the department's Immigrations and Customs Enforcement division. It calls on businesses to submit employee eligibility verification forms to ICE for an audit to verify Social Security numbers.

One business, Smithfield Packing Co., which operates a hog slaughterhouse in Tar Heel, N.C., has participated since June, with dramatic results. Twenty-one workers at the plant were arrested last week after the government scrutinized forms submitted by the company.

ICE alerted Smithfield of discrepancies in employees' records via e-mail. A company spokesman said 541 workers in the plant's work force of 5,000 are facing termination.

"This is terrible for everyone -- us, the employees, their families," said Dennis Pittman, a company spokesman. "It's heart-wrenching."

Pittman called Smithfield's agreement with ICE "a business decision" resulting from an implied threat. "We knew raids could be a possibility," he said.

But Smithfield received a benefit from cooperating with the government, according to the union that is helping its workers organize. Union officials say the company submitted the names of organizers as a tactic to intimidate some workers and get rid of others. They note that the National Labor Relations Board has found Smithfield undermined union elections by intimidating employees in 1994 and 1997.

"Most of the leaders of a walkout in November are on their list," said Leila McDowell, a spokeswoman for the United Food and Commercial Workers. "Whether ICE is consciously in collusion or not, Smithfield could very easily manipulate the process and can use it as a tool to intimidate and threaten workers."

Smithfield strongly denied the claim.