The issue is that he used a visa to get into the country which is essentially a non-immigrant visa. I don't know if he actually overstayed it, but that's a common tactic for illegals - get in on a non-immigrant visa, then just stay. As we saw with the hijackers, the probability of the government doing anything about it is zero.
Personally, compared to the other 13 million gate crashers camping out on our property now, he's probably the least of the transgressors. Certainly he would have been amnestied in under the 1986 law had he not initiated citizenship proceedings before that.
So he may be here legally now, but for part of the 1970's, he wasn't. Because when he started a business or took a job, he violated the terms of his visa. You may not think of it as a big deal, but those were the terms. And that made him...an illegal. (sidenote: I turned down a job in his native Austria in 1976 precisely because I did not have an Austrian work permit).
And so I have a little question for all the apologists. Do you really think that America before 1980 was such a small place that it did not home grow enough competent people to rule itself? That we are required to look to Mexico and Austria for our leaders? What precisely is it about either of those countries that would lead one to think that their sons and daughters have a better idea of how to make a better life for Americans than the sons and daughters of Americans?