SPEAKERS CONTENTS INSERTS
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COUNTERFEITING AND MISUSE OF THE SOCIAL SECURITY CARD AND STATE AND LOCAL IDENTITY DOCUMENTS
IMMIGRATION AND CLAIMS
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
JULY 22, 1999
Serial No. 60
Page 2 PREV PAGE TOP OF DOCPrinted for the use of the Committee on the Judiciary
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
COMMITTEE ON THE JUDICIARY
HENRY J. HYDE, Illinois, Chairman
F. JAMES SENSENBRENNER, Jr., Wisconsin
BILL McCOLLUM, Florida
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR S. SMITH, Texas
ELTON GALLEGLY, California
CHARLES T. CANADY, Florida
BOB GOODLATTE, Virginia
STEVE CHABOT, Ohio
BOB BARR, Georgia
WILLIAM L. JENKINS, Tennessee
ASA HUTCHINSON, Arkansas
EDWARD A. PEASE, Indiana
CHRIS CANNON, Utah
JAMES E. ROGAN, California
LINDSEY O. GRAHAM, South Carolina
MARY BONO, California
SPENCER BACHUS, Alabama
Page 3 PREV PAGE TOP OF DOCJOE SCARBOROUGH, Florida
JOHN CONYERS, Jr., Michigan
BARNEY FRANK, Massachusetts
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ROBERT WEXLER, Florida
STEVEN R. ROTHMAN, New Jersey
TAMMY BALDWIN, Wisconsin
ANTHONY D. WEINER, New York
THOMAS E. MOONEY, SR., General Counsel-Chief of Staff
JULIAN EPSTEIN, Minority Chief Counsel and Staff Director
Subcommittee on Immigration and Claims
LAMAR S. SMITH, Texas, Chairman
BILL McCOLLUM, Florida
Page 4 PREV PAGE TOP OF DOCELTON GALLEGLY, California
EDWARD A. PEASE, Indiana
CHRIS CANNON, Utah
CHARLES T. CANADY, Florida
BOB GOODLATTE, Virginia
JOE SCARBOROUGH, Florida
SHEILA JACKSON LEE, Texas
HOWARD L. BERMAN, California
ZOE LOFGREN, California
BARNEY FRANK, Massachusetts
MARTIN T. MEEHAN, Massachusetts
GEORGE FISHMAN, Chief Counsel
JIM WILON, Counsel
LAURA BAXTER, Counsel
CINDY BLACKSTON, Professional Staff
LEON BUCK, Minority Counsel
C O N T E N T S
July 22, 1999
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Smith, Hon. Lamar, a Representative in Congress from the State of Texas, and chairman, Subcommittee on Immigration and Claims
Anderson, Michael, International Chair, Driver Licensing and Control, American Association of Motor Vehicle Administrators
Derbyshire, Robert, Detective Sergeant, Supervisor Economic Crimes, Criminal Investigation Division, Baltimore County Policy Department
Donnelly, Glenna, Assistant Deputy Commissioner, Office of Disability and Income, Social Security Administration
Flaherty, Brian, State Representative from Connecticut, National Conference of State Legislatures
Hesse, James, Chief Intelligence Officer, Forensic Document Laboratory, Immigration and Naturalization Service
Hotchner, John, Director, Office of Passport Policy, Planning and Advisory Services, Bureau of Consular Affairs, Department of State
Martin, Susan, Director, Institute for the Study of International Migration, Georgetown University
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Simcox, David, Chairman, Board of Directors, Center for Immigration Studies
Stana, Richard, Associate Director, Administration of Justice Issues, General Government Division, U.S. General Accounting Office
Stewart, Larry F., Chief Document Examiner, Forensic Services Division, U.S. Secret Service
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Anderson, Michael, International Chair, Driver Licensing and Control, American Association of Motor Vehicle Administrators: Prepared statement
Derbyshire, Robert, Detective Sergeant, Supervisor Economic Crimes, Criminal Investigation Division, Baltimore County Policy Department: Prepared statement
Donnelly, Glenna, Assistant Deputy Commissioner, Office of Disability and Income, Social Security Administration
Flaherty, Brian, State Representative from Connecticut, National Conference of State Legislatures: Prepared statement
Hesse, James, Chief Intelligence Officer, Forensic Document Laboratory, Immigration and Naturalization Service: Prepared statement
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Hotchner, John, Director, Office of Passport Policy, Planning and Advisory Services, Bureau of Consular Affairs, Department of State: Prepared statement
Martin, Susan, Director, Institute for the Study of International Migration, Georgetown University: Prepared statement
Simcox, David, Chairman, Board of Directors, Center for Immigration Studies: Prepared statement
Stana, Richard, Associate Director, Administration of Justice Issues, General Government Division, U.S. General Accounting Office: Prepared statement
Stewart, Larry F., Chief Document Examiner, Forensic Services Division, U.S. Secret Service: Prepared statement
Material submitted for the record
COUNTERFEITING AND MISUSE OF THE SOCIAL SECURITY CARD AND STATE AND LOCAL IDENTITY DOCUMENTS
THURSDAY, JULY 22, 1999
House of Representatives,
Subcommittee on Immigration
Page 8 PREV PAGE TOP OF DOCand Claims,
Committee on the Judiciary,
The subcommittee met, pursuant to call, at 10:20 a.m., in Room 2141, Rayburn House Office Building, Hon. Lamar Smith [chairman of the subcommittee] Presiding.
Present: Representatives Lamar Smith, Bill McCollum, Edward A. Pease, Bob Goodlatte, Sheila Jackson Lee and Howard L. Berman.
Staff Present: George Fishman, Chief Counsel; William Griffith, Pearson Fellow; Judy Knott, Staff Assistant; and Leon Buck, Minority Counsel.
OPENING STATEMENT OF CHAIRMAN SMITH
Mr. SMITH. The Subcommittee on Immigration and Claims will come to order.
Good morning to you all. We look forward to a very instructive hearing this morning on a very, very important subject.
I have an opening statement, then the Ranking Member has an opening statement, and then we will begin.
Page 9 PREV PAGE TOP OF DOC However, first let me say to you all that we were in session voting last night till past midnight, which makes me appreciate the presence of the Ranking Member and Ed Pease, the gentleman from Indiana, very much. We hope to be joined by some other individuals later on, but we are getting off to a little bit of a late start this morning because of the late hour last night.
I will recognize myself for my opening statement first.
If you want to know why the rampant use of phony IDs across the Nation is a crisis, look no farther than Angel
Maturino Resendez, the accused serial killer who recently surrendered to a Texas ranger. Most of us are familiar with the long list of brutal crimes Resendez has alleged to have committed. Woven into that trail of terror are many details that give us a clear picture of how forged or stolen documents allowed Resendez to live illegally in the United States and to move about the country engaging in a crime spree lasting more than two decades. And of course at this point that individual has been accused of, I think, 12 different murders.
Here are the examples from Mr. Resendez's life:
October 10, 1985, Resendez provided false documents to the INS in support of a fraudulent claim to U.S. Citizenship. He had been periodically traveling in the U.S. since the mid-1970's, presumably using fraudulent documents once again to claim U.S. Citizenship.
May 19, 1986, Resendez, while apparently using either a fraudulent driver's license or vehicle registration, received a traffic ticket for permitting an unlicensed driver to operate his vehicle in South Burlington, Vermont.
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September 8, 1986, Resendez was sentenced to 18 months in prison for falsely representing himself as a U.S. Citizen.
Also, late in 1987, Resendez stole or bought a voter registration card from a homeless U.S. Citizen in New Orleans.
November 30, 1988, Resendez was arrested in St. Louis by the INS. He had three Social Security cards and a false U.S. Passport.
August 6, 1996, Resendez was arrested for trespassing on a railroad car in Kentucky. He had a forged Social Security card.
For more than a decade, Congress had been trying to address the vulnerabilities in the documents that Resendez was able to exploit. In 1986, Congress passed the Immigration Reform and Control Act, which established an employment verification system that relies on various identity and employment eligibility documents. As part of the 1990 immigration law, Congress established the Commission on Immigration Reform. In 1994, the Commission, under the leadership of the late Barbara Jordan, made recommendations for reducing the fraud and abuse of birth certificates, Social Security cards, and driver's licenses. In 1996, Congress included many of the Commission's recommendations in the Illegal Immigration Reform and Immigrant Responsibility Act. Unfortunately, few of those provisions have been implemented by this administration.
I am not surprised, for example, that the Secretary of Health and Human Services refused to send a witness to testify today. I believe they did not want the embarrassment of having to tell the members of this subcommittee that the administration has failed to comply with important provisions of the 1996 act.
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Section 656 part A of that legislation required the President to select a lead agency to coordinate an intraagency effort to develop standards for reducing the vulnerability of birth certificates to fraud and to create regulations for the issuance of birth certificates. The Department of Health and Human Services was charged with assisting the States in implementing the standards set forth in those regulations. The Secretary of Health and Human Services was also required to submit a report to Congress on ways to reduce the fraudulent use of birth certificates. Both the regulations and the report were due 1 year after the passage of that legislation by October 1, 1997, or almost 2 years ago. We are still waiting to hear from the administration.
Disregarding the 1996 law is nothing new for this administration. For example, it failed to include funding in its fiscal year 2000 budget to hire 1,000 additional Border Patrol agents as mandated by the 1996 act. Section 133 of the law authorized the INS to enter into written document agreements with States and local law enforcement agencies authorizing them to enforce immigration laws despite the strong interest of several local law enforcement agencies. No action has been taken by the administration on this provision. The President's failure to properly carry out a law that was passed by overwhelming majorities in both Houses of Congress is a breach of his constitutional responsibilities and, in my judgment, an insult to all Americans who care about those provisions.
Another provision of the 1996 law, section 657, charges the Social Security Administration with developing a counterfeit-resistant Social Security card. While the Social Security Administration and the General Accounting Office have submitted reports on this subject as required by the law, there has been little progress toward developing a more secure Social Security card.
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Right now, all U.S. Citizens are vulnerable to identity theft because our basic identity documents such as driver's licenses and Social Security cards are so easy to forge and because no adequate verification mechanisms are now in place. I believe we can and must address genuine privacy concerns, while taking steps to protect our identity documents from fraud and abuse.
That concludes my opening statement, and I will now recognize the Ranking Member for her opening statement.
Ms. JACKSON LEE. Thank you very much, Mr. Chairman, and good morning.
And I might add, before I begin my remarks, I would like to put in the record a letter dated July 21, 1999, directed to my attention as well as the statement of Edward Sondik, Director of the National Center for Health Statistics of the Health and Human Services Department, who indicated, because of his scheduling difficulties of staff members of HHS, they were not able to be here presently. I would like to submit this testimony into the record.
Mr. SMITH. Without objection. Although I would like to make a comment and that is that all the other Federal agencies today who were invited to testify for them found time to find someone to testify, whereas HHS submitted a two-page statement late last night. They were the last testimony to be received.
And it is absolutely incredulous to me that HHS could not find some individual to testify. The point of these hearings is not just to have testimony submitted but, obviously, to allow members of this subcommittee to engage in a question and answer period with individual witnesses and find out more information. If it were otherwise, we could just get everybody's testimony, put it in a book and pass it out.
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So I am more than a little disappointed that HHS, quite frankly, has snubbed this subcommittee. I want you to know that I thought seriously about subpoenaing them. Let this be a warning, the next time they will be subpoenaed. And their testimony, however, will be made a part of the record.
Ms. JACKSON LEE. I thank the chairman.
I, too, will make a personal inquiry as to the difficulty in getting a live witness here. I appreciate the chairman's consternation. As the Ranking Member, I believe our work is extremely important and would like our agencies to be responsive and certainly am going to personally look into it. And I thank the chairman for allowing the testimony in, and I can only take the letter at face value that there was some difficulty, but I would like to determine what that may have been, and I thank the chairman again.
As I indicated, this is an important subcommittee, important hearing; and I would like to specifically announce that I personally abhor the results of fraud and misuse of various identification documents. I do not in any way approve of the fraudulent use of identification cards. However, if these issues are going to be examined, we want to beand to have them examined in a fair and equitable way.
Mr. Chairman, during the work recess in July, I had the privilege and opportunity of visiting one of the busier centers of INS' detainee centers as well as look at the procedures that are utilized at one of the international airports or the international airport in New York. What I was most pleased to determine is that, once INS received sophisticated machinery as they showed and indicated in their detainee center, it was very obvious that the use of fraudulent cards could be easily detected and that the INS was working toward improving their particular internal structures to be able to be more diligent in doing so. I would hope with the appropriations process that the focus for INS would be in again improving those systems, but I did see firsthand the results of increased technology.
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The people who fraudulently use identification documents can and should be punished. This is being done now. An alien at our border who has engaged in document fraud is inadmissible under certain sections of the INA section 212(a)(6)(C). If the alien is in the United States already, he or she is deportable for document fraud under section 237(a)(3)(C) of the INA. In addition, it is unlawful for any person to forge, counterfeit, alter, or falsely make any document for immigration-related purposes.
Effective measures will be difficult to achieve in any event. It will be pointed out today that the integrity of any verification system, even a computer-based ''paperless'' one, hinges on the security of the documents which underlie it, and such ''breeder'' documents are not secure. The birth certificate is a breeder document in that it can be used to obtain an identity document such as a U.S. Passport, driver's license, military ID, or Social Security card.
We need to decide just how far we are willing to go in dealing with this problem. For instance, birth and death records are certain to be used, and the cost of revamping just those record-keeping systems could be exorbitant. The same is true of SSA and INS databases. Are we willing to bear the cost of developing and maintaining such gigantic databases?
The fight against counterfeiting and fraud should not become a fight against personal privacy that leads to a national ID card. I do not want a national ID card to be demanded of Americans every time they engage in what should be routine activity that can be conducted anonymously and without government intervention.
Page 15 PREV PAGE TOP OF DOC In fact, as Americans, we pride ourselves in the freedom of access and privacy. Technology has played a vital role in advancing freedom around the world, but it also has laid new temptations at the doorstep of government. In our debate on the financial services bill just a few weeks ago, one of the major issues of Americans who were concerned about this bill was the issue of privacy. How much can the government know about you? Once the technology and database are in place for a system such as a national worker registry, alternative uses for the registry might arise. This temptation can occur every time a new ''national crisis'' emerges: To help fight the war on drugs, to control the spread of disease, to combat terrorism, and so forth.
Congress also must take steps to avoid that which would increase rather than diminish immigration-related discrimination that already has become a feature of our employment system.
Now, I am in support of employer sanctions. I believe they are important. But in response to employer sanctions, many employers have screened out all foreign-looking or accented job applicants, have adopted illegal citizen-only hiring policies, have selectively applied verification procedures only to suspect employees, have demanded documents before hiring more often of foreign sounding employees, have demanded more or better documents of suspect employees. I have heard much testimony on this, personal testimony, from many of my constituents, some of them from India who are here on H(1)(b) visas.
Finally, we also have to be mindful of States' rights. We should not become so aggressive in this area that States are turned into mere tools of the Federal Government in connection with the identity documents they issue.
Page 16 PREV PAGE TOP OF DOC As I said, Mr. Chairman, this is an important factual hearing. I look forward to the testimony of the witnesses, and I would ask your indulgence as I may be in and out since I am dealing with a family matter, personal matter, and as well will be attending briefly the memorial to the fallen police officers who were killed just last year at the United States Capitol.
I thank the chairman.
Mr. SMITH. Thank you, Ms. Jackson Lee.
We will now go to our first panel, and again my appreciation to you all for being here and taking the time to testify.
The first panel consists of Larry F. Stewart, Chief Document Examiner, Forensic Services Division, U.S Secret Service; John Hotchner, Director, Office of Passport Policy, Planning and Advisory services, Bureau of Consular Affairs, Department of State; James Hesse, Chief Intelligence Officer, Forensic Document Laboratory, Immigration and Naturalization Service; Richard Stana, Associate Director, Administration of Justice Issues, General Government Division, U.S. General Accounting Office; Glenna Donnelly, Assistant Deputy Commissioner, Office of Disability And income, Social Security Administration.
And, as I mentioned, we are missing the witness from the Department of Health and Human Services. My speculation is that they are embarrassed by the fact that they haven't done their job and that is why they are not here.
Page 17 PREV PAGE TOP OF DOC Enough said on that subject.
Mr. SMITH. We will begin, Mr. Stewart, with your testimony.
STATEMENT OF LARRY F. STEWART, CHIEF DOCUMENT EXAMINER, FORENSIC SERVICES DIVISION, U.S. SECRET SERVICE
Mr. STEWART. Mr. Chairman and members of the subcommittee, I am pleased to be here today and be afforded the opportunity to testify before you.
My name is Larry F. Stewart, and I am the Assistant Laboratory Director as well as the Chief Document Examiner for the Secret Service Forensic Services Division. I am here to discuss the prevalence of fraud and forgery in U.S.-issued documents and, more specifically, the current trends that we have forensically detected in the counterfeiting of these official documents through the use of computers and desktop publishing.
The United States does not have a unique identification document issued to verify someone's identity. In today's society, there is frequently a need for such verification. This is commonly found in situations such as new employment, banking transitions and issuance of a new driver's license.
Because of the needs of such verification, many documents not originally designed as secured identity documents have become routinely utilized as proof of identity. Currently, there are State and Federally issued identity documents that are used throughout America to prove identity. Due to the wide variety of formats, designs and security, it is nearly impossible to assume that a person checking this form of identification would have the proper knowledge base to determine if it is a genuine document.
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Breeder documents are used to obtain genuine identification documents in order to perpetrate fraud or establish a new identity. The most sought after identity documents are those that bear the most security and are thus the least challenged during their use. Birth certificates are widely accepted as proof of identity and are usable in obtaining a new driver's license. Generally, birth certificates contain very little security.
There are over 1,000 different authorized forms of certified birth certificates in the United States. Furthermore, counterfeiters can obtain new digitally produced identity documents or models directly through the worldwide web. Once the counterfeit birth certificate is obtained, an individual can easily apply for a genuine driver's license and a genuine Social Security card. From this, bank accounts may be opened, credit cards may be obtained.
The Secret Service began investigating the counterfeiting of U.S. Currency in 1865. As a result of this responsibility, we have been able to track the latest and greatest methods available to counterfeiters in their efforts to produce realistic versions of secured documents. Additional jurisdictions of the Secret Service allow our forensic analysis and investigative assistance in cases involving false identification documents, travelers checks, and credit cards. Through our various investigative responsibilities, we are well aware of the dramatic changes in the methodologies used to counterfeit breeder documents in the recent years.
During the 1960's, counterfeiters of security documents routinely used the offset lithographic method due to the quality and its ability to reproduce fine line detail.
Page 19 PREV PAGE TOP OF DOC In the early 1960's, Xerox developed the first electrophotographic method. This process was a precursor to current day photocopiers and was seldom used to counterfeit due to its lack of availability, one-color restriction and poor quality. In the mid-1970's, monochromatic copiers that could produce color documents were developed. Subsequently, three and four color photocopiers were developed and again were used widely to counterfeit documents. In 1985, the first bubblejet printer was introduced by Cannon. Computer printers are now widely used.
We have developed databases of standards that can be used by the forensic laboratory to narrow it down or in some cases identify the source of this printing. This process involves microscopic analysis of the counterfeit document and then the subsequent chemical examination of the ink or toner. The same scheme was used by our laboratory to successfully determine the make and model of the computer printer Ted Kaczynski, also known as the Unabomber, had used to make a return address label on an unexploded mail bomb. Through the same technology our laboratory routinely identifies the makes and models of computer printers and copiers used to make counterfeit identity and monetary documents.
We have developed a unique database that houses not only the forensic information about the counterfeit document but also all of the investigative information regarding the use, passing and seizure of the document. To maintain an unbiased approach, the two portions of the database remain separate. We have successfully linked documents that in the past would not have been connected, such as counterfeit food coupons to travelers checks to postage stamps. This database has proven invaluable to our investigative efforts.
The most common form of counterfeiting of these documents today involves the use of a computer. Currently, breeder documents are effectively counterfeited using many of the same techniques that are used to create the corresponding genuine documents. The ease of using a computer work station and scanner to manipulate documents is undeniable, and we can only assume their use will increase as technology advances.
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Until recently, the limiting factor in the final quality of the counterfeit document was generally the printing device. Typical printing devices used by the counterfeiter include ink jet, laser jet, color laser, thermal dye diffusion printers and color copiers. Today's home computers and printers can produce excellent quality, passable counterfeit breeder documents, identifications and monetary instruments. If counterfeiting of these documents is to be addressed, I suggest that more consideration needs to be made of the systems available to today's would-be counterfeiter, as well as utilization of uniformity in design and education of the public.
Optically variable devices, specialty inks, and security papers are still excellent approaches in limiting the counterfeiter's effectiveness. As an illustration, I brought samples of counterfeit documents produced by desktop publishing for your review. Each of these was produced by scanning in the original document, manipulating the image on a desktop work station and printing the product on a four-color copier. These are very typical of the counterfeit documents that are being used today.
In conclusion, I wish to thank the subcommittee for its long history of support, not just in our mission but in the support you have shown to the men and women of this agency to ensure that they have the proper tools to do their job.
Mr. Chairman, this concludes my statement. I would be pleased to answer any questions that you or other members of the subcommittee may have.
Mr. SMITH. Thank you, Mr. Stewart.
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Mr. Stewart, are these the examples to which you just referred?
Mr. STEWART. Yes, sir.
Mr. SMITH. Do you have a copy of this yourself? You might want to hold it up.
I got a bigger copy than you do. I think the point you made in your statement is reviewed by these examples of fraudulent documents that are so easy to duplicate. I thank you.
[The prepared statement of Mr. Stewart follows:]
PREPARED STATEMENT OF LARRY F. STEWART, CHIEF DOCUMENT EXAMINER, FORENSIC SERVICES DIVISION, U.S. SECRET SERVICE
Mr. Chairman and members of the subcommittee, I am pleased to be here today, and to be afforded the opportunity to testify before you.
My name is Larry F. Stewart, and I am the Assistant Laboratory Director as well as the Chief Document Examiner for the Secret Service, Forensic Services Division.
I am here to discuss the prevalence of fraud and forgery in U.S. issued documents and more specifically the current trends that we have forensically detected in the counterfeiting of these official documents through the use of computers and desktop publishing.
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The United States does not have a unique identification (ID) document issued to verify someone's identity. In today's society, there is frequently a need for such verification. This is commonly found in situations such as new employment, banking transactions, and issuance of a new driver's license. Because of the need for such verification, many documents not originally designed as secured identity documents have become routinely utilized as ''proof'' of identity. Currently, there are state and federally issued identity documents that are used throughout America to prove identity. Due to the wide variety of formats, designs and security, it is nearly impossible to assume that a person checking this form of identification would have the proper knowledge base to determine if it is a genuine document.
''Breeder'' documents are used to obtain genuine identification documents in order to perpetrate fraud or establish a new identity. The most sought after identity documents are those that bear the most security and are thus the least challenged during their use. Birth certificates are widely accepted as proof of identity and are useable in obtaining a new driver's license. Generally, birth certificates contain very little security. Certified copies of birth certificates are available through local vital records offices, which number over 7000 (The Criminal Use of False Identification, The Report on the Federal Advisory Committee on False Identification, U.S. Department of Justice, 1976). It has been estimated that over 80 % of the requests for certified copies of birth certificates are made and processed through the mail with the name and return address as the only indication of the requestor's identity. There are over 1000 different authorized forms of certified birth certificates in the United States. Furthermore, counterfeiters can obtain new digitally produced identity documents or models directly through the worldwide web. Once a counterfeit birth certificate is obtained, an individual can easily apply for a genuine driver license and a genuine social security card. From this, bank accounts may be opened, and credit cards can be obtained.
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The U.S. Secret Service began investigating the counterfeiting of U.S. currency in 1865. As a result of this responsibility, we have been able to track the latest and greatest methods available to counterfeiters in their efforts to produce realistic versions of secured documents. Additional jurisdictions of the Secret Service allow our forensic analysis and investigative assistance in cases involving false identification documents, traveler's checks and credit cards. Through our various investigative responsibilities, we are well aware of the dramatic changes in the methodologies used to counterfeit breeder documents in the recent years.
During the 1960's, counterfeiters of security documents routinely used the offset lithographic method due to the quality and its ability to reproduce fine line detail. The offset equipment used generally required printing one color at a time. A document such as U.S. currency would require at least three separate passes through the press to counterfeit. This would include once for the black obverse, once for the green obverse, and then once for the green reverse of the Federal Reserve Note. Most of the presses were somewhat bulky and photographic processes were also required.
In the early 1960's, Xerox developed the first ''electrophotographic'' method. This process, the precursor to current day photocopiers was seldom used to counterfeit due to its lack of availability, one-color restriction and poor quality.
In the mid-1970's, monochromatic copiers that could produce color documents were developed. These systems were normally desktop models, inexpensive and could produce multiple colors with separate system passes. It gave the counterfeiter the ability to sit in his home and manipulate the system settings until reasonable counterfeits were created. It was the first time that the Secret Service began seeing widespread use of Xerographic type processes in the production of counterfeit security documents.
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Subsequently, three and four color photocopiers were developed and again were widely used to counterfeit documents. The latest four-color copier systems utilize small size toner particles and can be directly connected to a computer to receive images for printing. Photocopiers generally can reproduce resolution in the 400 dots per inch (DPI) range. This means that the system can successfully print up to 400 separate lines or dots in a one-inch space. If a secured document has printing that would require more than 400 lines in a one-inch space to reproduce, the final appearance of the counterfeit would be smudged. The technology currently exists to elevate the resolution of these systems to 600 DPI.
In 1985, the first bubblejet printer was introduced by Canon. Computer printers are now widely used. We have developed databases of standards that can be used by the forensic laboratory to narrow down or in some cases identify the source of printing. This process involves microscopic analysis of the counterfeit document and then the subsequent chemical examination of the ink or toner. This same scheme was used by our laboratory to successfully determine the make and model of the computer printer Ted Kaczynski (AKA the ''Unabomber'') had used to make a return address label on an unexploded mail bomb. Through this same technology our laboratory routinely identifies the makes and models of computer printers and copiers used to make counterfeit identity and monetary documents.
The Secret Service currently analyzes counterfeit identity and financial documents that are submitted to our agency for examination to determine whether the document is related in any way to previously seen documents. We then develop investigative information about the counterfeit's production that can be utilized by our investigators to find the perpetrator. Forensic analysis schemes generally require a combination of microscopic and analytic approaches. We have developed a unique database that houses not only the forensic information about the counterfeit document but also all of the investigative information regarding the use, passing, or seizure of the document. To maintain an unbiased approach, the two portions of the database remain separate. Through link analysis, similarities can be found between the investigative and/or the forensic information kept on the various documents, which can then be used in the investigation or prosecution. We have successfully linked documents that in the past would not have been connected, e.g., counterfeit food coupons to travelers checks to postage stamps. This database has proven invaluable to our investigative efforts.
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At present, over 70,000 separate counterfeit documents are tracked in our database. Most of these are counterfeit travelers checks, bank checks, and credit cards. To effectively utilize any of these monetary counterfeits one would generally need a fake ID or a stolen ID with a photo substitution. So it stands to reason that thousands of counterfeit birth certificates, driver licenses and social security cards are also in our system as well as in circulation.
The most common form of counterfeiting these documents today involves the use of a computer. Currently, breeder documents are effectively counterfeited using many of the same techniques that are used to create the corresponding genuine documents. The ease of using a computer workstation and scanner to manipulate documents is undeniable. We can only assume their use will increase as technology advances. Photographs can be easily replaced, biographical information can be modified and a new counterfeit document can be created very quickly. Current scanners can easily produce thousands of lines per inch resolution. A scanned image of a genuine security document can then be endlessly manipulated using software, e.g., Corel or Adobe Photoshop. The computer savvy manipulator can also duplicate bar codes, magnetic stripes, background printings, and special fonts. These images can then be printed or sent around the world as email attachments. As an illustration, I brought samples of counterfeit documents produced by desktop publishing for your review. Each of these was produced by scanning in the original document, manipulating the image on a desktop workstation and printing the product on a four-color copier. These are very typical of the counterfeit documents that are being used today.
Until recently, the limiting factor in the final quality of the counterfeit document was generally the printing device. Typical printing devices used by the counterfeiter include ink jet, laser, color laser, thermal dye diffusion printers and color copiers. Today's home computers and printers can produce excellent quality, passable counterfeit breeder documents, identifications and monetary instruments. If counterfeiting of these documents is to be addressed, I suggest that more consideration needs to be made of the systems available to today's would-be counterfeiter, as well as utilization of uniformity in design and education of the public. Optically variable devices, specialty inks and security papers are still excellent approaches in limiting a counterfeiter's effectiveness.
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In conclusion, I wish to thank the subcommittee for its long history of support, not just in our mission, but in the support you have shown to the men and women of this agency to ensure that they have the proper tools to do their job.
Mr. Chairman, this concludes my statement. I would be pleased to answer any questions that you or other members of the subcommittee may have.
Mr. SMITH. Mr. Hotchner, before you begin, let me just say, and I should have said it earlier, that I would appreciate you all limiting your testimony to 5 minutes. The warning light on the desk will give you about a minute with the Orange light, and then the red light will come on after 5 minutes. But, unfortunately, with five members of this panel, five members of the second panel and with our needing to be out of this room very close to 12:00, we will have to be pretty precise. Thank you.
STATEMENT OF JOHN HOTCHNER, DIRECTOR, OFFICE OF PASSPORT POLICY, PLANNING AND ADVISORY SERVICES, BUREAU OF CONSULAR AFFAIRS, DEPARTMENT OF STATE
Mr. HOTCHNER. Thank you for this opportunity to testify on behalf of the Bureau of Consular Affairs, Mr. Chairman, about the Department of State's experience with the use and presentation of so-called breeder documents, often birth certificates.
Page 27 PREV PAGE TOP OF DOC The integrity of birth documentation and the potential for fraud are of great concern to us. An individual's U.S. certificate of birth is primary evidence of citizenship. When an individual born in the United States applies for a passport for the first time, the evidence of citizenship presented is usually a U.S. birth certificate. We need that document to be reliable because, after the first application, the passport itself is used as evidence of citizenship.
I will briefly outline the nature of the problems which we are facing and then will outline some of the steps taken to mitigate the problems.
There are many thousands of offices nationwideState, county, and cityauthorized to issue certified copies of birth certificates. They come in hundreds of different formats. For instance, there are 900 different offices in the State of New York alone that are issuing birth documents. To further complicate the matter, some States issue birth certificates to children who have been born abroad and adopted by U.S. citizens.
States also issue delayed birth certificates on the basis of an oral declaration only; often years after the alleged birth. An example is a case of a foreign couple who were able to obtain a 2-year delayed birth certificate on the basis of the father's affidavit for a baby who they claimed had been born in a motel room while they were here on vacation. There were no witnesses other than the alleged father, who just happened to be an obstetrician, and no outward signs of a birth left in the hotel room. As you can see, the potential for fraud is very real.
Compounding the problem of the variety of certificates is the ease with which copies can be obtained. Copies of legitimate birth certificates can often be obtained in person upon presentation of nothing more than a driver's license. Many States give unrestricted access to vital records, in most cases allowing purchase of copies of birth certificates by mail.
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In many instances, legitimate birth certificates are purchased from U.S. citizen accomplices. To cite one example, the Department's Diplomatic Security Service, which has statutory authority to investigate passport fraud, recently had a case of an alien trafficking operation that recruited American citizens out of a methadone clinic to obtain and sell their birth certificates. The birth certificates were then used illegally for a number of purposes, including obtaining U.S. Passports.
Furthermore, birth certificates can be falsified with relative ease, with widely varying degrees of quality and sophistication. At ffthe low end, we see photocopies of legitimate birth certificates with the original name deleted with typewriter correction fluid and a new name typed over. At the high end, we see computer-generated copies of birth certificates using virtually the same ink, paper, and printing fonts as a legitimate birth certificate. While these can be detected in the passport application process, it requires extensive research and checks of records in the jurisdiction which would ordinarily issue the legitimate certificate.
Additionally, fraudulent applicants are able to obtain legitimate birth certificates of deceased persons because some States do not cross-reference the records of births and deaths.
So what is being done to combat the problems presented by the lack of minimum security features and uniformity in birth certificates? To address these problems, the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 required the establishment of minimum standards for birth certificates. The State Department has been working closely with the Immigration Service and other Federal agencies to identify those desirable standards.
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The Department also considers the more than 4,000 passport acceptance agents nationwide to be our first line of defense in detecting fraudulent documentation. We have training programs to alert them to possible imposter fraud, and we ask them to report suspicious documents to the passport agencies. There is a Fraud Program Manager at each of the 14 passport agencies and when there is a question about the birth certificate or other document, our Fraud Program Managers routinely contact the office that purportedly issued the suspect document.
Furthermore, as we enter the new millennium, the Department is implementing technological enhancements for combatting document fraud, including the digitized passport. This means a computer printing of the photo directly into the passport, thus deterring photo substitution.
We in the State Department are proud of our fraud prevention programs and the technological improvements we are making. We will continue to work with other Federal agencies and the States to aggressively combat documentation fraud.
I would be happy to answer any questions you might have, Mr. Chairman.
Mr. SMITH. Thank you, Mr. Hotchner.
[The prepared statement of Mr. Hotchner follows:]
PREPARED STATEMENT OF JOHN HOTCHNER, DIRECTOR, OFFICE OF PASSPORT POLICY, PLANNING AND ADVISORY SERVICES, BUREAU OF CONSULAR AFFAIRS, DEPARTMENT OF STATE
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Mr. Chairman and Members of the Committee:
Thank you for this opportunity to testify on behalf of the Bureau of Consular Affairs about the Department of State's experience with the use and presentation of so-called breeder documents, usually birth certificates.
The integrity of birth documentation and the potential for fraud are of great concern to us. An individual's U.S. certificate of birth is primary evidence of citizenship. When an individual born in the United States applies for a passport for the first time, the evidence of citizenship presented is usually a U.S. birth certificate. We need that document to be reliable because, after the first application, the passport itself is used as evidence of citizenship. If a U.S. passport is issued on the basis of a counterfeit or altered birth certificate or a genuine birth certificate presented by an impostor, the original evidence may never be examined again and the problems are compounded.
First, I will briefly outline the nature of the problems which we are facing and then will outline some of the steps being taken to mitigate the problems.
There are many thousands of offices nationwide authorized to issue certified copies of U.S. birth certificates, which come in hundreds of different formats. These include long-form birth certificates issued by state, county or municipal entities, as well as shortened versions, called abstracts, or transcriptions, which contain only limited information. We have also seen wallet-size versions. Format changes are plentiful. They reflect new issuance procedures, new paper stock, or a newly appointed registrar. To further complicate the matter, some states issue local birth certificates to children who have been born abroad and adopted by U.S. citizens, in addition to birth certificates amended to reflect domestic adoption. States also issue delayed birth certificates, on the basis of an oral declaration only, often years after the alleged birth. An example is a case of a foreign couple who were able to obtain a two-year delayed birth certificate, on the basis of an affidavit, for a baby who they claimed had been born in a motel room while they were here on vacation, with no witnesses other than the alleged father, who just happened to be an obstetrician, and no outward signs of a birth left in the hotel room. The parents claimed to have returned to their homeland the day after the alleged birth, leaving the baby with an acquaintance for the next two years. As you can see, the potential for fraud is very real.
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Compounding the problem of the variety of certificates is the ease with which copies can be obtained. Copies of legitimate birth certificates can often be obtained through state, county or municipal authoritiesgenerally upon presentation of nothing more than a driver's license. Many states have unrestricted access to vital records, in some cases allowing the purchase of copies of birth certificates for different individuals. Others place minimal restrictions, requiring that an individual requesting a record be able to identify it by providing minimal information about a parent listed on the certificate. So there is no guarantee that the individual who obtains the copy is actually the individual who is named on the certificate. Without extensive records searches, it is very difficult to definitively establish whether or not the certificate actually belongs to the passport applicant. In many instances, legitimate birth certificates are purchased from U.S. citizen accomplices. To cite one example, the Department's Diplomatic Security Service, which has statutory authority to investigate passport fraud, recently had a case of an alien-trafficking operation that recruited American citizens (out of a methadone clinic) to obtain and sell their birth certificates. The birth certificates were then used illegally for a number of purposesthe primary one being application for a U.S. passport.
Furthermore, birth certificates can be falsified with relative ease, with widely varying degrees of quality and sophistication. At the low-end, we see photocopies of legitimate birth certificates with the original name deleted with typewriter correction fluid and a new name typed over. These types of documents are generally purchased from a street-level vendor, exploiting migrant workers and uneducated aliens. However, any individual can produce such a document. We recently learned of a case where three passengersgrandmother, alleged mother and childarrived at London's Gatwick Airport. Authorities found approximately 20 blank counterfeit birth certificates in the alleged mother's luggage. This caused the British authorities to question the documents presented by the three. One of the documents in their possession was a U.S. birth certificate in the child's name. We were able to determine that the U.S. passports they carried were genuine and properly issued. The passport application for the child showed a different name for the mother than the birth certificate found by the British authorities. The child;s passport had been applied for by the true mother using a valid and correct U.S. birth certificate, but the child had been kidnapped by her aunt who created a counterfeit birth certificate to facilitate her crime.
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At the high-end, we see computer-generated copies of birth certificates using virtually the same ink, paper, and printing fonts as a legitimate birth certificate. While these can be detected in the passport application process, it requires extensive research and checks of records in the jurisdiction which would ordinarily issue the legitimate certificate.
Additionally, fraudulent applicants are able to obtain the legitimate birth certificates of deceased persons because some states do not cross-reference the records of births and deaths. Many states participate in a voluntary interstate program to exchange information when an individual age 45 and younger dies. Even in states that cross-reference internally and share information with other states, limited personnel resources may mean that records are not cross-referenced immediately upon receipt of a death notification. The speed with which records can be cross-referenced is important because impostors are prepared to take advantage of any lag-time between a death in one state and its recording in another state. We have seen cases where an individual born in one state is killed in an accident in another. Someone spots the obituary, gets a copy of the birth certificate, obtains identification under the identity, and applies for a passportall before the death record is filed in either state. We have also seen a few cases of passport fraud using identities of young men who died of drug overdoses or gang violence a short time beforehand. In addition, vendors or other fraudulent applicantsmostly career criminalstarget infant deaths, as there are generally no other legitimate records, such as social security number or credit cards, which may conflict with an assumed identity.
So what is being done to combat the problems presented by the lack of minimum security features and uniformity in birth certificates? To address these problems, the ''Illegal Immigration Reform and Immigrant Responsibility Act of 1996'' required the establishment of minimum standards for birth certificates. The State Department has been working closely with the Immigration and Naturalization Service, the Department of Health and Human Services' National Center for Health Statistics, and other Federal agencies on birth certificate issues and has participated in meetings of interested Federal agencies.
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The Department also considers the more than 4000 passport acceptance agents nationwide to be our first line of defense in detecting fraudulent documentation. We have training programs to alert them to possible impostor fraud, and we ask them to report suspicious behavior to the passport agencies. There is a Fraud Programs Manager at each of the 14 passport agencies. When there is a question about a birth certificate or other document, our Fraud Program Managers routinely contact the office that purportedly issued the suspect document. In addition, the State Department 's Office of Fraud Prevention Programs tracks fraud worldwide, analyzing the schemes used to defeat the system and quickly informing our officers of them, securing documentary materials and features, training our officers to detect and counter document fraud, and providing specific support.
Furthermore, as we enter the new millennium, the Department is implementing technological enhancements for combating documentation fraud, including:
The digitized passportWe are in the process of converting the domestic passport agencies to the digitized passport system. With this system, we are making significant progress in combating and deterring the photosubstitution of the U.S. passport. In addition, the multiple U.S. passport issuance verification program is a feature of the new digitized passport system. It gives us the means to identify automatically those applicants who make false statements regarding prior passports and to detect impostors who apply in the identity of a person who already has a passport.
Development of an electronic case-management system that will provide passport agencies and other authorized users complete and readily accessible information on passport applicants, including images of key documents such as passport applications and birth certificates.
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We in the State Department are proud of our fraud prevention programs and the technological improvements we are making. We will continue to work with other Federal agencies and the states to aggressively combat documentation fraud.
Mr. SMITH. Mr. Hesse.
STATEMENT OF JAMES HESSE, CHIEF INTELLIGENCE OFFICER, FORENSIC DOCUMENT LABORATORY, IMMIGRATION AND NATURALIZATION SERVICE
Mr. HESSE. Good morning, Mr. Chairman and members of the subcommittee. Thank you for this opportunity to appear before you today to discuss our fight against the counterfeiting and misuses of Social Security cards, birth certificates, and other State and local identity documents.
As the Chief Intelligence Officer of the Immigration and Naturalization Service's Forensic Document Laboratory, FDL, I know firsthand the challenges that we face with document fraud. Combatting counterfeit documents has become an extremely complex challenge as a result of rapid advances in computer and printing technologies. In fact, today's technology is so sophisticated and so readily available that no document is entirely fraud proof.
Technological advances aren't the only recent change that has made it more difficult to stay one step ahead of the counterfeiters. Once mom-and-pop operations, counterfeiting today is a billion dollar industry run by well-organized criminal networks that are often linked to alien smuggling, drug trafficking, terrorism, and other illegal activities. This scenario is further complicated by the fact that there are two types of document fraud, one where the document is counterfeit; the other is the use of a genuine document by an imposter.
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Efforts to combat fraud are also hindered by the large number of commonly accepted identity documents and the many variations of these documents that are in circulation. This is particularly problematic when it comes to U.S. Birth certificates, Social Security cards, and State driver's licenses, which continue to be the mainstay of breeder documents used to procure genuine documents.
Birth certificates are the single most vulnerable document for one salient reason: They are accepted by virtually all government agents as proof of both identity and citizenship and therefore are the key to obtaining many documents and government benefits. It is estimated that there are over 8,000 State and local government offices that collectively issue more than 10,000 variations of birth certificates.
The Social Security card is also highly sought after because it too enables the holder to obtain various government benefits as well as establish eligibility for employment. Today, more than 20 versions of the Social Security card are in circulation. And there are as many as 10 times that number of variations in the State driver's licenses issued by the 50 States.
Nothing better illustrates the scope and complexity of the challenges we face than Operation Fine Print. This undercover INS operation culminated last November with the seizure in Los Angeles of more than 2 million counterfeit identification documents, with an estimated street value of $80 million. The FDL linked the seized documents, which included driver's licenses from eight different States, to more than 80 other cases Nationwide.
Page 36 PREV PAGE TOP OF DOC Just 4 months ago, in Operation Eastern Approach, more than a dozen people, some linked to a foreign-based terrorist organization, were arrested in southern California and Nevada for their involvement in a criminal ring that used counterfeit documents to make fraudulent asylum claims and visa applications.
What can be done to better address these challenges?
First, we need to reduce the number of documents accepted as valid identification. However, we must ensure that the number is not reduced to the point where it creates a hardship for citizens and lawful residents who use legal documents for legitimate purposes or increases the potential for discrimination.
We also need to improve and expand fraud detection training. The FDL has developed advanced training programs for INS officers, which is paying great dividends at our ports of entry and elsewhere. But this is not enough. All personnel who are required to make the extremely difficult determination of whether a document is genuine or counterfeit should receive comprehensive document detection training.
Perhaps the most critical step we need to take is to increase the security of the documents we issue, and the most effective tool for doing this is wider use of biometrics. While security features such as holograms and microprinting are good for determining the validity of a document, we must remember it is not the document but the applicant that receives the benefit. As such, it is more important to validate the authenticity of the cardholder than the card. Biometrics which makes use of unique physical characteristics is the best way to do this.
Page 37 PREV PAGE TOP OF DOC Mr. Chairman, before taking your questions, I want to invite all of you and your staffs to visit our Forensic Document Laboratory, where you can see the people, their expertise and the equipment that INS has put into place to combat document fraud both here and abroad. Thank you.
Mr. SMITH. Thank you, Mr. Hesse.
[The prepared statement of Mr. Hesse follows:]
PREPARED STATEMENT OF JAMES HESSE, CHIEF INTELLIGENCE OFFICER, FORENSIC DOCUMENT LABORATORY, IMMIGRATION AND NATURALIZATION SERVICE
Good morning Mr. Chairman, Congresswoman Jackson Lee, and Members of the Subcommittee. Thank you for this opportunity to appear before you today to discuss the counterfeiting and misuse of the Social Security card and State and local identity documents. As Chief Intelligence Officer at the Immigration and Naturalization Service (INS), Forensic Document Laboratory (FDL), I am prepared to expound on the vulnerability of documents. Allow me to present a brief description of the FDL's mission.
The FDL provides a wide variety of forensic document analysis and support services to all INS programs in the enforcement of the immigration laws. Support is also provided to other Federal, State, and local agencies in joint operational initiatives involving immigration fraud. FDL services include: the scientific examination of questioned document evidence; the provision of testimony as expert witnesses in judicial proceedings and hearings; technical advice and assistance in major criminal cases involving fraudulent documents; training programs in the detection of fraudulent documents; the identification of document evidence; the production and dissemination of ''Document Intelligence Alert'' bulletins; collection of document exemplars; real-time assistance via the Photophone network in resolving questions concerning suspect travel documents and identity documents; and guidance to INS Headquarters program managers and foreign immigration authorities on policies and procedures involving document fraud. In addition, the FDL provides advice and assistance to the Department of State Office of Fraud Prevention Programs and the Bureau of Diplomatic Security in common efforts to enforce the immigration laws.
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Since the enactment of the Immigration Reform and Control Act of 1986 (IRCA), employers have been required to use the Employment Eligibility Verification form (Form I9) to verify the identity and employment eligibility of each newly hired individual. Each individual, in turn, is required to attest to his or her status in the United States.
To counteract the potential for discrimination based upon an individual's national origin or citizenship status, Congress included anti-discrimination provisions in IRCA. IRCA prohibited employers from requesting individuals to present specific documentation for completion of the Form I9. Thus, at this time, employers can choose from among 25 documents in order to comply with the Form I9 requirements.
In order to circumvent the verification process, some unauthorized aliens present employers with counterfeit, altered, and/or fraudulently obtained documents. Document fraud encompasses the counterfeiting, possession, sale, and/or use of identity documents to circumvent U.S. laws. In addition to their direct use to obtain unauthorized benefits, fraudulent birth certificates, Social Security cards, and other forms of Federal, State, and local identification are also considered ''breeder'' documents because they are often used to support the acquisition of lawfully-issued immigration or other identity documents.
Before I get into the specifics of the vulnerability of certain documents and how significant a problem it is, allow me to make two points regarding the use of fraudulent documents. First, there is no legitimate reason (other than for under cover law enforcement purposes) to use a fraudulent document or to obtain by fraud a genuine document. They are used to attempt illegal entry, obtain unauthorized benefits and employment, create new identities for criminal purposes, conceal true identities for illegal purposes, and commit criminal acts. Second, fraudulent documents are not used solely by the illegal migrant; they are used extensively by the criminal as well. Once it has been detected that an individual has used a fraudulent document, that individual's identity is in question.
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The impact of counterfeit documents and the fraudulent use of legitimate documents have undermined the employment verification provisions of the Immigration and Nationality Act (INA). The existing verification process can be easily thwarted by fraud. Documents suitable for use in establishing work authorization are readily available in any area where there is a market. For example, a driver's license or school I.D. is all that is needed to establish identity, and the addition of a Social Security card will suffice to meet the standard for establishing work eligibility. The presence of an illegal alien population willing and able to work provides a ready market for these basic documents. On the whole, drivers' licenses, birth certificates and Social Security cards are easily counterfeited by the simplest of means.
False U.S. birth certificates, Social Security cards and State drivers' licenses continue to be ''breeder'' documents for the procurement of genuine documents. There are many factors that must be dealt with in combating this type of fraud.
The birth certificate is the single most vulnerable document for one salient reasonit is accepted by virtually all governmental agencies as proof of identity and citizenship. Therefore, it is the key to obtaining many benefits and/or documents. It is estimated that there are over 8,000 State and local registrars' offices that issue birth certificates. Due to the fact that many of these offices produce more than one type of certificate with various endorsement or authorization seals, it is further estimated that there are over 10,000 variations of U.S. birth certificates being issued at any given time. And if one considers there have been numerous revisions by states of the birth certificates they issue over the past fifty years, then the number of different types of genuine birth certificates in circulation at this moment becomes exponentially larger. Security features in these documents run the entire gamut, from virtually none to quite secure. The problem is obvious. With so many variations in circulation, it is difficult to make an informed decision about the genuineness of the piece of paper (birth certificate) presented.
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The best birth certificate to use fraudulently is a genuine birth certificate. Some states furnish a birth certificate to anyone who requests it. Other states may have issuance requirements, but these requirements can also be circumvented. Some states are experiencing malfeasance in their issuing offices. In these cases, it is very difficult for most people who are responsible for examining birth certificates to detect this type of fraud, because the document is genuine and in many cases the document is received without the person being present. However, U.S. Immigration Officers are very adept at detecting impostors with genuine birth certificates. These officers encounter dozens of birth certificates every day and given their training, experience, knowledge of body language and interview techniques they have proven to be very effective at detecting fraud. The El Paso Intelligence Center (EPIC) receives approximately 4,000 intercepted genuine birth certificates every month.
Of course, birth certificates are also subject to alterations and counterfeiting. The biographical data is printed onto the surface of the paper and it can be removed either mechanically or chemically and replaced with data for a ''new'' bearer. These alterations can be quite deceptive, especially without the assistance of magnification or an ultraviolet light source. In these cases you have a genuine document but the pertinent data has been changed. This is also difficult to detect in most cases.
With the advent of document scanners, graphic software and advances in printing techniques it has become extremely easy to counterfeit documents. Security features play a big part in combating counterfeits but their effectiveness is somewhat limited by the fact that an examining officer must know what security features a particular document has to be able to look for it. This is daunting given the number of various documents in use and in some cases special equipment is necessary (i.e. ultraviolet or transmitted light) to view the feature(s). Also, many security features are simulated by forgers and the presence of a simulated feature may further dupe the examining official.
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The Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA) of 1996 called on the Administration to prescribe minimum security features for birth certificates. INS has been designated as the lead agency for developing these standards, and has met with a working group including representatives from the Department of State, Health and Human Services, the Social Security Administration, Department of Transportation, the Secret Service, the Government Printing Office, and the U.S. Postal Service Lab. Also included in the working group was a representative of the major state organization, the National Association for Public Health Statistics and Information Systems (NAPHSIS). One issue that has been identified is the potential for significant costs to states to change existing birth certificates to a new, more secure format. The working group plans to continue its dialog with NAPHSIS and to consult with states in developing its final recommendations in an effort to balance security and cost factors. Some standards and security features NAPHSIS endorses include:
The paper that all of the State birth certificates are printed on contains a unique watermark
The paper would be sensitized to chemicals
Hidden word Pantograph
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Explanation of security features printed on the document
Embossing seal unique to issuing office
SOCIAL SECURITY CARD
The U.S. Social Security card is a highly sought after document as the card may enable the holder to obtain various benefits and can be used to establish employment eligibility. In addition, the possession of a Social Security card gives credibility to the bearer. It is often part of a counterfeit ''package'' which consists of a resident alien card, Social Security card and a driver's license. There are over twenty versions of the card and this has proven problematic for Immigration and other law enforcement, school, bank, and other officials who may not be familiar with the security features of each of the documents.
The Social Security card is not intended to serve as a national identification card. Therefore, none of the revisions of the card prior to October 1983 contained security features and some revisions actually had ''NOT FOR IDENTIFICATION'' printed on the card. Social Security cards issued subsequent to October 1983 contain security features which include intaglio and microline printing and security planchettes in the paper.
As with the birth certificate, the best Social Security card to obtain for fraud use is a genuine one. A Social Security card may be obtained by presenting a birth certificate or Resident Alien card.
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The exact number of counterfeit Social Security cards in circulation is also unknown but they are believed to be as prevalent as counterfeit birth certificates. The FDL receives thousands of these cards every year from Border Patrol Agents who routinely intercept them at traffic checkpoints.
All fifty states, the District of Columbia, and the U.S. territories issue drivers' licenses and identity cards. Originally, drivers' licenses were simply issued to verify that the bearer was afforded driving privileges by the state. However, these documents have become identity documents and therefore are also being abused.
Once again it is often difficult to determine the genuineness of many licenses due to the volume in circulation. There are over one hundred ''current'' types of documents, 50 licenses and 50 identity cards, in circulation. However, if you factor in the older versions that are still valid, there are many more variations in circulation at any given time.
Many states have incorporated security features into their drivers' licenses. This is helpful, but limited in its effectiveness. For example, police officers in Utah certainly know the security features in a Utah driver's license, but may or may not be familiar with security features, if any, in a Florida driver's license.
One can obtain a genuine driver's license in many states by producing a driver's license from another state. This is true in Virginia. So, if an individual can pass off a counterfeit Arizona driver's license in the Commonwealth of Virginia, he/she can obtain a genuine license issued in his/her name (or any name he/she chooses).
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Many of the reasons drivers' licenses are abused are the same as birth certificates and Social Security cards. They establish identity, lend credibility to the bearer and provide a benefit. Drivers' licenses are also sold in counterfeit ''packages'' as previously mentioned.
ONGOING INS EFFORTS
While striving to reduce the number of acceptable documents for employment verification, INS is continually improving upon the security of the documents it issues. Over the last several years, the INS has initiated processes to create new and more secure immigrant documents to both prevent the creation of counterfeit documents and to increase detectability of counterfeit documents. These initiatives include the creation of new Permanent Resident cards, Employment Authorization cards, and LaserVisas (in conjunction with the Department of State). These documents take advantage of improvements in technology, including biometrics, making them more difficult and significantly more expensive to counterfeit.
In 1996, INS had 20 versions of the Permanent Resident and Employment Authorization cards in circulation. Today there are five. The addition of the expiration date to all cards will greatly assist in deterring fraud. This allows INS to update the photograph and add the most recent security features when the individual applies for a new card.
With the introduction of the latest Permanent Resident card, INS has significantly ''raised the bar'' for counterfeiters. In addition to a new holographic laminate patch that secures the printed data, the new card has a unique security feature like no other in the world. Every card has a personalized ''engraving'' of the photo, biographical data and signature on the optical stripe. This virtually eliminates mass production of counterfeit cards, as each card will bear an engraving that matches the photo and biographical data that is printed on the reverse.
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The INS has developed an Image Retrieval System, which is a database of the photographs, fingerprints and signatures that were used to issue the Permanent Resident cards from 1989 through 1998 (images from the current Permanent Resident cards issued since 1997 will be added to the system later this year). This system provides instant and accurate verification of lawful permanent residents. Currently, Image Retrieval Terminals (IRT) are deployed at eleven INS sites: the FDL; INS Headquarters; the four Service Centers; the Central States Command Center in Chicago, Illinois; the Law Enforcement Support Center in Burlington, Vermont; Dulles Airport; the Baltimore District Office; and John F. Kennedy Airport. Furthermore, the FDL is staffed seven days a week to respond to requests from INS offices, ports-of-entry, consulates and embassies for verification of cardholders.
In cooperation with Australia, Canada, and the Netherlands, INS has also developed the ''EDISON'' project. This is an image database of documents that assists officers in identifying documents from every country in the world.
The FDL publishes ''Document Intelligence Alerts,'' which are photographic intelligence bulletins of counterfeit or altered documents. These bulletins, which are distributed worldwide, have proven to be extremely effective in assisting officers in the detection and interception of fraudulent documents.
Improvements can be made to the security of birth certificates, Social Security cards and drivers' licenses, but those changes may take time and still do not solve the problem. The INS officers at our ports-of-entry are successful in detecting fraud due to their experience and training in document fraud. To that end the Service is close to implementing a new training program to put certified document trainers in every district office. These officers will not only conduct refresher courses for INS officers, but will also provide training in the recognition of genuine documents, detection of fraudulent documents and the detection of impostors to local DMVs, Social Security offices, police and other entitlement and enforcement agencies.
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INS FRAUD STATISTICS
The most secure document in the world can be counterfeited or altered. The true test of the security of a document is how difficult it is for a forger to simulate successfully the genuine to the point that it can fool those tasked with inspecting it. The INS has incorporated reliable and proven security features in the Permanent Resident and Employment Authorization cards to deter counterfeiting, altering, and use by impostors. The FDL has developed advanced training programs for INS officers in the recognition of U.S. documents, detection of fraudulent documents and the detection of impostors. In FY 1998, INS officers at ports-of-entry intercepted 99,171 fraudulent documents. That's one every five minutes; and, so far in FY 1999, they are on a pace to intercept 119,595. These numbers do not include documents intercepted in the benefits programs or picked up at Border Patrol checkpoints. The INS' Office of Inspections is the program with primary responsibility for the interdiction of fraudulent documents presented on an individual basis.
Document fraud is no longer a ''mom and pop'' operation. Document syndicates are well organized and widespread and reap millions of dollars. In November 1998, INS agents executing search warrants at two Los Angeles storage facilities netted more than two million counterfeit identity documents with an estimated street value of more than $80 million dollars. Along with numerous bogus alien registration documents, Social Security cards, Mexican birth certificates, California identity documents (i.e., drivers' licenses, vehicle title certificates, proof of insurance certificates, and State identification cards), and drivers' licenses for eight other states, the agents seized a large number of counterfeiting implements. The INS' FDL has linked the counterfeits seized in more than 80 other INS cases across the country to their manufacture by this Los Angeles criminal organization. The ringleader of this crime group and eight of his associates were arrested.
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In October 1998, a Federal Grand Jury in Tampa, Florida indicted 10 resident aliens for receiving, possessing and using false INS documents and with furnishing false information when applying for Social Security numbers. The indictments resulted from an investigation INS conducted jointly with other Federal law enforcement agencies.
There are also many fraudulent document ''mills'' that operate locally and on a smaller scale. In September 1997, a Boston couple pled guilty to conspiracy and possession of document making implements with the intent to use such in the production of false identity documents and knowingly possessing counterfeit Social Security cards with intent to sell. An INS-executed search warrant at a co-conspirator's apartment netted 600 blank Social Security cards.
During the first five months of Fiscal Year 1999, INS Investigations presented for criminal prosecution 164 document fraud conspiracy cases. These cases accounted for the presentation of 247 principals for prosecution. During this same period, INS Investigations presented 44 fraud cases for prosecution of forfeiture, 39 of which were conspiracy cases. In addition, asset forfeiture was accomplished in three large-scale conspiracy investigations.
Document fraud encompasses the counterfeiting, possession, sale, and/or use of identity documents to circumvent U.S. laws. The impact of counterfeit documents and the fraudulent use of legitimate documents is significant. However, in taking steps to reduce the misuse and counterfeiting of documents, it is also important that these actions do not increase the potential for discrimination based upon national origin or citizenship. Thank you for inviting me to address the subject. I will be pleased to take any questions you have on the topic.
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STATEMENT OF RICHARD STANA, ASSOCIATE DIRECTOR, ADMINISTRATION OF JUSTICE ISSUES, GENERAL GOVERNMENT DIVISION, U.S. GENERAL ACCOUNTING OFFICE
Mr. STANA. Mr. Chairman and members of the subcommittee, I am pleased to be here to discuss the impact of fraudulent documents on the effectiveness of INS's employment verification system.
As you know, one of the primary magnets attracting illegal aliens to the United States is jobs. Immigration experts believe that as long as opportunities for employment exist, the incentive to enter the United States illegally will persist and efforts at our borders to prevent illegal entry will be undermined.
In the IRCA of 1986, Congress sought to prevent employers from hiring unauthorized aliens by creating an employment verification process, but the effectiveness of this process has been undermined since its inception because it is easily thwarted by fraudulent documents. Our prepared statement and underlying reports discuss in detail the nature of the fraudulent document problem, efforts made by INS to increase the security of its documents, and options for the Social Security Administration to improve the security of the Social Security card.
In my oral statement, I would like to make three main points.
First, large numbers of aliens unauthorized to work in the United States have used fraudulent documents to circumvent the employment verification process and obtain jobs. For example, data from INS's employer sanctions database show that over the 20-month period from October, 1996, through May, 1998, about 50,000 unauthorized aliens used about 78,000 fraudulent documents to obtain jobs. These were either counterfeit documents or genuine documents that were used fraudulently. About 60 percent were INS documents, 36 percent were Social Security cards, and 4 percent were other documents such as driver's licenses.
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Large-scale counterfeiting of employment eligibility documents has made them widely available. For example, and as Mr. Hesse referred to in his opening statement, INS seized nearly 2 million counterfeit documents in November 1998 that were headed for distribution points around the country.
Second, INS has undertaken two initiatives to improve the verification process. In February, 1998, it issued proposed regulations to reduce the number of documents that employers can accept to determine employment eligibility from 27 to 14. And I believe at the beginning of this month, Mr. Bach testified that that should be ready at the end of the summer.
Having a smaller number of acceptable documents could make the process more secure and reduce employer confusion. As of right now, however, the proposed regulations are still being reviewed by the INS.
INS has also begun to issue new employment authorization cards and a newer version of the green card with improved security features, which INS hopes will make it easier for employers to verify the document's authenticity. These features include a halogram, microprinting and barcoding.
While these are steps in the right direction, they might not have a substantial impact on unauthorized aliens' use of fraudulent documents. This is because an INS investigation showed that unauthorized aliens rarely use the documents being eliminated and because they can show various other documents like the Social Security card that don't have security features that are over and above those that can be reproduced by a counterfeiter. With respect to these security features, in fact, counterfeiters have already begun issuing new versions of the green card that appear to be genuine to the untrained eye.
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My third point is that, as required by IIRIRA, the Social Security Administration calculated the cost of producing and issuing a counterfeit-resistant Social Security card to all 277 million cardholders. The cost would be between 3.9 billion and 9.2 billion, depending on which types of security features and data were incorporated into the card. Alternatives exist which could reduce these costs, such as issuing enhanced cards only to those who need it to prove work eligibility or to issue the new card only to those who apply for a new number or replacement card. If Congress decides to change the Social Security card to enhance security features for work eligibility requirements, it would need to specifically provide funding to accomplish it.
Along these lines it is important to note that Social Security cards and records are only as reliable as the evidence upon which they are based, and security features are as good as the ability and willingness of employers to detect fraudulent cards. Further, as improvements are made to the Social Security card, the alien could choose to use several other types of documents to prove their authorization to work.
In closing, the steps being taken to improve document security could make it more difficult for an unauthorized alien to obtain employment. But this alone will not solve the problem. Other efforts, like an improved electronic verification system and credible sanctions for both the illegal alien and the illegal employer, are needed to be sure that these security initiatives have value. I might also add that these steps would take the guesswork and discrimination out of the process.
Mr. Chairman, this concludes my prepared statement. I would be pleased to answer any questions you or other members of the subcommittee may have.
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Mr. SMITH. Thank you, Mr. Stana.
[The prepared statement of Mr. Stana follows:]
PREPARED STATEMENT OF RICHARD STANA, ASSOCIATE DIRECTOR, ADMINISTRATION OF JUSTICE ISSUES, GENERAL GOVERNMENT DIVISION, U.S. GENERAL ACCOUNTING OFFICE
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss the impact of fraudulent documents on the effectiveness of the employment verification system established by the Immigration Reform and Control Act (IRCA) of 1986 and efforts to reduce such fraudulent use. My statement will summarize pertinent information from two of our reports: Illegal Aliens: Significant Obstacles to Reducing Unauthorized Alien Employment Exist (GAO/GGD9933, Apr. 2, 1999) and Social Security: Mass Issuance of Counterfeit-Resistant Cards Expensive, but Alternatives Exist (GAO/HEHS98170, Aug. 20, 1998).
The availability of jobs is one of the primary magnets attracting illegal aliens to the United States. Immigration experts believe that as long as opportunities for employment exist, the incentive to enter the United States illegally will persist and efforts at the U.S. borders to prevent illegal entry will be undermined. IRCA's employment verification system was intended to prevent employers from hiring aliens unauthorized to work, therefore reducing the job magnet.
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In this statement, I make the following points:
Significant numbers of aliens unauthorized to work in the United States have used fraudulent documents to circumvent the employment verification process designed to prevent employers from hiring them.
The Immigration and Naturalization Service (INS) has taken steps to reduce the number of documents that could be used to verify employment eligibility and to improve the security features in its work authorization documents. However, opportunities still exist for unauthorized aliens to circumvent the employment verification process and obtain employment.
In 1997, the Social Security Administration (SSA) estimated the cost of producing and issuing a counterfeit-resistant Social Security card that could be used to establish employment eligibility to all 277 million cardholders ranged from $3.9 billion to $9.2 billion, depending on which types of security features and data were incorporated into the card. While alternatives exist that could reduce these costs, these options require legislative action to move forward.
INS IS TAKING STEPS TO IMPROVE THE VERIFICATION PROCESS, BUT OPPORTUNITIES FOR FRAUD WILL STILL EXIST
IRCA(see footnote 1) made it illegal for employers knowingly to hire unauthorized aliens. IRCA requires employers to comply with an employment verification process intended to provide employers with a means to avoid hiring unauthorized aliens. The process requires newly hired employees to present documentation establishing their identity and eligibility to work. Employees have the choice of presenting 1 document establishing both identity and eligibility to work (e.g., an INS permanent resident card) or 1 document establishing identity (e.g., a driver's license) and 1 establishing eligibility to work (e.g., a Social Security card) from a list of 27 acceptable documents.(see footnote 2) Generally, employers cannot require employees to present a specific document. Employers are to review the document or documents that an employee presents and complete an Employment Eligibility Form, INS Form I9. On the form, employers are to certify that they have reviewed the documents and that the documents appear genuine and relate to the individual. Employers are expected to judge whether the documents are obviously fraudulent. INS is responsible for checking employer compliance with IRCA's verification requirements.
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FRADULANT DOCUMENTS HAVE UNDERMINED EFFECTIVENESS OF INS' EMPLOYMENT VERIFICATION PROCESS
IRCA's employment verification process is easily thwarted by fraud. Large numbers of unauthorized aliens have used fraudulent documents to circumvent the employment verification process. For example, data from INS' employer sanctions database showed that over the 20-month period from October 1996 through May 1998, about 50,000 unauthorized aliens used 78,000 fraudulent documents to obtain employment. About 60 percent of the fraudulent documents used were INS documents; 36 percent were Social Security cards, and 4 percent were other documents, such as drivers' licenses. During this same time period, INS determined that about 2,100 employers it had investigated had complied with the employment verification process and did not knowingly hire unauthorized aliens, but that these employers hired unauthorized aliens who used fraudulent documents to circumvent the process.
Counterfeit employment eligibility documents are widely available. For example, in November 1998 in Los Angeles, INS seized nearly 2 million counterfeit documents, such as INS permanent resident cards and Social Security cards, that were headed for distribution points around the country.
INS IS TAKING STEPS TO IMPROVE THE VERIFICATION PROCESS, BUT OPPORTUNITIES FOR FRAUD WILL STILL EXIST
INS has undertaken two initiatives to improve the verification process. First, INS has started the process to reduce the number of documents that employees can present to determine employment eligibility. Second, it has begun issuing new documents with increased security features that it hopes will make it easier for employers to verify the documents' authenticity. However, opportunities for unauthorized aliens to use fraudulent documents to obtain employment will still exist.
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Various studies of IRCA's employment verification process have advocated that the number of documents be reduced to make the process more secure and reduce employer confusion. For example, in 1990 we reported that the multiplicity of documents contributed to (1) employer confusion about how to comply with the employment verification requirements and (2) discrimination against authorized workers.(see footnote 3)
INS first proposed reducing the number of usable documents in 1993; however, INS has made little progress to date in reducing the number of documents that employers can accept to determine employment eligibility. In February 1998, INS issued proposed regulations to reduce the number of such documents that can be used from 27 to 14. Under the proposed regulations, INS plans to:
Retain all eight of the documents that currently establish both identity and employment eligibility, including the INS permanent resident card and the various versions of INS' employment authorization card.
Eliminate 9 of the 12 documents that establish identity, such as the school identification, voter registration, and various military identification cards.
Eliminate five of the seven documents that establish employment eligibility, such as the Certificate of Birth Abroad issued by the State Department and the U.S. citizen identification card, a card no longer issued by INS. INS proposes to retain the Social Security card and the Native American tribal document and add the Arrival-Departure Record, Form I94 for aliens authorized to work for a specific employer.
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According to an INS official, as of July 14, 1999, comments on the proposed regulations were being reviewed within INS.
INS has also begun issuing new documents with increased security features, which it hopes will make it easier for employers to verify the documents' authenticity. In February 1997, INS began issuing a new Employment Authorization Card with improved security features, including a hologram, microprinting, and etched barcoding. In April 1998, INS began issuing a newer version of the card for lawful permanent residents, commonly called the green card, with improved security features, including a hologram, a digital photograph, and an optical memory stripe containing information on the cardholder.
With respect to the new security features on INS documents, this may not have a significant impact on unauthorized aliens' use of fraudulent documents to obtain employment. According to an INS official in Los Angeles, that office has already seized counterfeit versions of the new green card INS began issuing in April 1998. According to this official, the counterfeit cards do not have all of the security features of the new INS green card. While they are easily detectable by trained INS employees, they will appear genuine to untrained employers. Consequently, they could be used to obtain employment. Also, current procedures do not require aliens to show employers the INS document that authorizes them to work. Other widely used documents, such as the Social Security card, do not have the security features of the INS documents. Further, INS plans to phase in the replacement of existing versions of the permanent resident card issued between 1989 and 1998 as they expire, which could take up to 10 years. Cards issued from 1977 to 1989 have no expiration date and will remain valid until INS replaces them. Therefore, unauthorized aliens seeking employment can circumvent the improved security features of INS documents by simply presenting counterfeit versions of the new cards, less secure versions of INS documents, or non-INS documents (e.g., Social Security cards) to employers.
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ENHANCING THE SOCIAL SECURITY CARD FOR EMPLOYMENT ELIGIBILITY VERIFICATION WOULD BE COSTLY
Because the Social Security card has become one of the primary documents to determine employment eligibility, it is important that this card be a secure document. This would mean that there are strict controls over card issuance and that the card itself is counterfeit-resistant. Unfortunately, neither situation is currently true. Historically, the purpose of the Social Security card was to document the card holder's Social Security number, not serve as a means of identifying the individual. Consequently, the controls over whom the card was given to and the security features built into the card have not traditionally been a priority.
Regarding the controls over card issuance, since 1978 SSA has required applicants for original Social Security numbers to provide proof of age, identity, and citizenship or alien status. However, the identity data contained in Social Security records are only as reliable as the evidence on which they are based. Regarding security features of the card, SSA introduced its first counterfeit-resistant card in response to the Social Security Amendments of 1983.(see footnote 4) Since that time, the current card has incorporated certain limited security features including use of banknote paper, a marbleized pattern on the card that shows signs of alteration, small multicolor discs randomly placed on the card, and printing that has a raised effect and can be difficult to replicate. However, concerns continue to be raised that the card's security features did not make it significantly more difficult to counterfeit and that employers could not easily determine a card's authenticity for work authorization purposes.
Because of these concerns, Congress in the Illegal Immigration Reform and Immigrant Responsibility Act of 1996(see footnote 5) (IIRIRA) required SSA to develop cost estimates for a prototype counterfeit-resistant card made of durable tamper-resistant material with various security features that could be used in establishing reliable proof of citizenship or legal noncitizenship status. In 1997, SSA estimated the cost of issuing the enhanced cards to all 277 million current number holders and provided estimates for 7 card options employing a range of card technology features.
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SSA assumed that it would use existing Social Security application procedures to reissue all enhanced cards and establish reliable proof of the citizenship or alien status for number holders for whom proof had not been previously established. SSA reported that the total cost of issuing the new cards would range from $3.9 billion to $9.2 billion, depending on the technology selected, and would involve 73,000 work years.(see footnote 6) These technologies ranged from the use of plastic cards with multicolor, miniprinting, and transparent holograms to digital photographs and optical memory storage. SSA's estimates showed that processing costs for five of the seven card options, which mainly included personnel costs, accounted for about 90 percent of the estimated costs to issue an enhanced card. So, regardless of the option selected, issuing an enhanced card to all number holders would involve an enormous cost and have a significant impact on SSA's resources.
IIRIRA also required us to review SSA's cost estimates. We found the estimates to be generally reasonable.(see footnote 7) However, we also identified the following alternatives to the mass reissuance of a new Social Security card, which could provide a more cost-effective approach to preventing those individuals who are unauthorized to work from obtaining jobs:
Issue a new enhanced Social Security card only to those who need it to prove work eligibility. For retired individuals who are no longer working and the very young who have not entered the workforce, there may be little advantage to issuing a new card. Also, many individuals of working age would not change jobs and would have no need for the card. Bureau of Labor Statistics data suggested this approach could have reduced the number of individuals ''needing'' an enhanced card from 277 million to an estimated 118 million. This option could help increase control over illegal workers while significantly reducing cost.
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SSA could issue the new card only to those applying for a new Social Security number and those who normally request replacement cards. This option would also substantially reduce the cost of card issuance. But this option provides no new employment authorization internal controls for many current number holders.
If Congress decides to change the Social Security card to enhance employer reliance on that document for work eligibility determinations, it would need to specifically provide funding to accomplish it. The Social Security trust funds have historically borne the cost of issuing original and replacement cards. However, under section 274A of the Immigration and Nationality Act (8 U.S.C. 1324a), payment for major changes, such as implementation of an enhanced counterfeit-resistant Social Security card, cannot be paid for by the trust funds.
Significant numbers of unauthorized aliens can still obtain employment because IRCA's employment verification process can be easily thwarted by fraud. INS has efforts under way to reduce the number of documents that can be used for employment verification purposes and improve the integrity of the documents it issues. However, this will not substantially affect unauthorized aliens' 5ability to obtain employment. The most common counterfeited documents will still remain on the list of acceptable documents. In addition, counterfeiters may be able to manufacture ''passable versions'' of even the most secure INS documents, thwarting INS' hope of giving employers Confidence in the authenticity of the documents they review.
Providing a more secure Social Security card to all current number holders was estimated to cost between $3.9 billion and $9.2 billion, depending on which types of security features and data were incorporated into the card. While alternatives exist that could reduce these costs, these options require legislative action to move forward.
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The steps being considered to improve document security could make it more difficult for an unauthorized alien to obtain employment. But significant numbers of unauthorized aliens can still obtain employment because the employment verification process can be circumvented or easily thwarted by the use of widely available fraudulent documents.
Mr. Chairman, this concludes my prepared statement. I would be pleased to answer any questions your or other members of the Subcommittee may have.
CONTACT AND ACKNOWLEDGMENT
For further information regarding this testimony, please contact Richard M. Stana at (202) 5128777. Individuals making key contributions to this testimony included Michael P. Dino, Nancy Kawahara, Tom Jessor, Roland H. Miller III, Jeff Bernstein, and Jacquelyn Stewart.
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Mr. SMITH. Ms. Donnelly.
STATEMENT OF GLENNA DONNELLY, ASSISTANT DEPUTY COMMISSIONER, OFFICE OF DISABILITY AND INCOME, SOCIAL SECURITY ADMINISTRATION
Ms. DONNELLY. Mr. Chairman, Congresswoman Jackson Lee, members of the subcommittee, thank you for inviting me to testify about the documentation the Social Security uses to establish identity for Social Security program purposes and for issuance of Social Security cards and numbers. I will summarize my remarks but ask that my full statement be placed in the record.
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At the time the Social Security card was initially developed in the 1930's, it had a single purpose, to provide a record of the Social Security number that had been assigned to an individual. This permitted an employer to accurately report Social Security earnings for that individual and Social Security to keep track of those earnings. It was never intended to serve as a personal identification document to establish that the person presenting it actually is the person whose name and SSN appears on that card.
Due to the limited purpose of the Social Security card, no special efforts were made initially to deal with the potential of counterfeiting. However, all Social Security cards issued since October 31, 1983, are made of bank note paper and incorporate a number of security features to make the card counterfeit-resistant and tamper-proof. It is now, in our view, difficult to produce a high-quality counterfeit of these cards.
Let me point out on a sample card some of the specific features that were incorporated. Keep in mind that, like the $100 bill, there are other features that we do not make public. The identifiablereadily identifiable features on the card include a stock of blue tint with a random marble pattern which easily shows attempts at erasures or alteration; planchets, small multicolor disks that are randomly placed on the paper stock and can be seen with the naked eye; and intaglio printing like that used on U.S. Currency for some of the printing on the card and produces a raised effect that can be readily felt.
Over time, the use of the Social Security number and the card have greatly expanded and the SSN and card are now used for purposes other than Social Security earnings maintenance. A ready example is the increasing use of computerized data leading to the use of the Social Security number as a personal identifier in many computer records.
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In viewing what is an increasing divergence from its original intended use, it is important to remember that, even with the improvements to the SSN card and its issuance process described in my statement, that card is still just a record of the SSN assigned to the individual and not an identity document. It is equally important to note that some of the information in SSA records, such as citizenship and work authorization, reflect a person's status only at the time the card is assigned or the card is replaced.
When applicants come to Social Security for an SSN card, they must present at least two forms of acceptable evidence that establish age, identity, and citizenship. This is usually a birth certificate, an immigration document. Unfortunately, these documents are relatively easy to alter, counterfeit or obtain fraudulently. These breeder documents, as have been described before, permit other documents accepted in establishing identity to be obtained. For example, a birth certificate can be used to obtain a driver's license, which can be used to establish identity.
Because the identity data in Social Security records are only as reliable as the evidence on which the data are based, SSA is focussing its efforts on identifying those counterfeit and fraudulent documents and preventing their use. To the extent that we can prevent the issuance of an SSN card based on one of those documents, we help disrupt the chain of fraudulently obtained documents.
Over the years, we have tightened our SSN policies, instituted many different systems checks that have led us to progress from my initial experience with an easily duplicated paper card issued from local offices to a centrally controlled and issued counterfeit-resistant and tamper-proof card. We continue to take advantage of new fraud detection devices and tools, broaden the training of our employees for detecting and preventing SSN fraud.
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I am afraid that a novice witness is not being guided very well by your light bulb. There are some things that I wish to say, but in trying to keep up with your time frame, I would offer to answer any questions at this time.
Mr. SMITH. Thank you, Ms. Donnelly. We will try to cover those subjects in a question and answer period.
[The prepared statement of Ms. Donnelly follows:]
PREPARED STATEMENT OF GLENNA DONNELLY, ASSISTANT DEPUTY COMMISSIONER, OFFICE OF DISABILITY AND INCOME, SOCIAL SECURITY ADMINISTRATION
Mr. Chairman and Members of the Subcommittee:
Thank you for inviting me to testify about the documentation the Social Security Administration (SSA) uses to establish identity for Social Security program purposes. In my testimony today I will also discuss the development of the Social Security card, use of the Social Security card for employment eligibility verification purposes, and the report to Congress on options to enhance the security of the card.
History of the Social Security Card
At the time the Social Security card was initially developed in the 1930's, its only purpose was to provide a record of the Social Security number (SSN) that had been assigned to the individual so that an employer could accurately report Social Security earnings for the individual and SSA could keep track of those earnings. That is still the primary purpose for which SSA issues the card. It was never intended to serve as a personal identification documentthat is, to establish that the person presenting it is actually the person whose name and SSN appear on the card. Although we have made the card counterfeit-resistant, it does not contain information that allows it to be used as proof of identity.
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Over time, however, the use of the SSN and the Social Security card has greatly expanded, and the SSN and card are now used for purposes other than Social Security earnings record maintenance. Society's increasing use of computerized data has led to the use of the SSN as a personal identifier in computer records.
Prior to November 1971, all SSNs were assigned and cards issued based solely on information alleged by an individual. Because of the expanding use of the card for other purposes, there was concern about its integrity. Beginning November 1971, persons aged 55 and over applying for an SSN for the first time were required to submit evidence of identity.
Beginning in April 1974, all noncitizens applying for original SSN cards were required to provide documentary evidence of age, identity, and noncitizen status. U.S. born applicants age 18 and older applying for original SSN cards were required to submit evidence of age, identity, and U.S. citizenship. Naturalized citizens would be required to provide evidence of age, identity and citizenship status. This made it more difficult to obtain a card on the basis of a false identity. In July 1974, because of our concern that individuals who had been assigned SSNs for purposes other than work might use the card to obtain unauthorized employment, we began to annotate our records to reflect the fact that a noncitizen had been assigned an SSN for nonwork purposes.
Several years later, the integrity of the SSN process was further improved. In May 1978, we began requiring all SSN applicants to provide documentary evidence of age, identity, and U.S. citizenship or noncitizen status. Generally, to obtain an original SSN and Social Security card, an applicant now must submit at least two forms of acceptable evidence. For U.S. born applicants, this is generally a birth certificate and driver's license. Noncitizens must also submit appropriate Immigration and Naturalization Service (INS) documents to establish lawful noncitizen status. Applicants for replacement Social Security cards must submit evidence of identity, and if foreign-born, evidence of current citizenship or immigration status. It must be kept in mind that the Social Security card was never meant to be an identification document. In evaluating documents submitted with applications for SSN cards, SSA applies the same strict standards used to evaluate documents submitted with claims for title II and title XVI benefits.
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Applicants for an original SSN card who are age 18 or over are also required to have an in-person interview specifically to determine whether they previously were assigned SSNs. During the interview, the applicant is asked for prior names and surnames and the reasons for never before needing an SSN. For those who allege being born in the United States, SSA performs additional verification prior to the issuance of an original SSN, because most people born in the United States should have been assigned an SSN by the time they have reached age 18. For these applicants, SSA also verifies the existence of a birth certificate at the State Bureau of Vital Statistics, and initiates a search for a death certificate when there is reason to believe the applicant may be assuming a false identity. SSA also requires documentation supporting the reason(s) the applicant never had an SSN.
We must remember that, even with these improvements to the SSN card issuance process, the Social Security card is still just a record of the SSN assigned to the individual and not an identity document for Social Security purposes. Further, SSA records reflect citizenship and work authorization status only as of the time the SSN is assigned or the card is replaced. SSA updates this information only if the person applies for a replacement card.
Furthermore, the identity data contained in Social Security records are only as reliable as the evidence on which the data are based. The documents that a card applicant must present to establish age, identity, and citizenship, usually a birth certificate and immigration documentsare relatively easy to alter, counterfeit, or obtain fraudulently. These documents are commonly referred to as ''breeder documents'' because they can be used to obtain other documents used to establish identity: for example, a birth certificate can be used to obtain a driver's license, which, in turn, can be used to establish identity. SSA's efforts are focused on detecting these counterfeit and fraudulent documentsto the extent we prevent the issuance of an SSN card based on one of these documents, we help break the chain of fraudulently obtained documents.
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Enumeration Process Improvements
To combat identity theft and other SSN fraud, SSA has tightened its SSN policies and instituted many different systems checks. We have progressed from an easily duplicated paper card issued from local offices to a centrally controlled and issued counterfeit resistant card. We have taken advantage of new fraud detection devices and tools and broadened the training of our employees for detecting and preventing SSN fraud. With a vigilant workforce, these measures have been highly successful; in fact, it is our front line employees who typically uncover fraud. More recently, however, schemes involving career criminals, sometimes using technologically advanced forgeries, have been uncovered. The Agency's ultimate goal is to prevent fraud. Primary to that prevention is eliminating the opportunity for fraud by ending SSA's dependence on documents presented directly to us by the public as evidence of age and citizenship/work authorizationdocuments which might be forged or misused by the dishonest in a fraudulent attempt to acquire an SSN.
The efforts to reach this goal target a wide range of initiatives aggressively being pursued with the INS and the State Bureaus of Vital Statistics (BVS)the sources of documents the dishonest forge or misuse to obtain SSNs. Chief among these are our projects to enumerate newborns (right at birth in the hospital) and newly-arrived noncitizens (as they enter the country) when their identity is certain and simultaneous to the birth and work authorization certification.
Enumeration At Birth Initiative
Page 67 PREV PAGE TOP OF DOC The Enumeration at Birth (EAB) program was established in 1989 as another means of improving the SSN process. It is a valuable tool in preventing fraudulent acquisition of an SSN and a Social Security card. This program is available in all States as well as the District of Columbia and Puerto Rico, and allows parents to indicate on the birth certificate information form whether they want an SSN assigned to their newborn child. States provide SSA with birth record information about newborns whose parents want a Social Security card for their child, and SSA then assigns an SSN and issues a card. Almost 90 percent of the original Social Security cards issued in calendar year 1998 were processed through EAB.
This process greatly reduces the potential for someone to use another person's birth certificate to obtain a Social Security card. For example, an individual who presents the birth certificate of a child enumerated under EAB would not be assigned a new SSN, since our records would screen against the date of birth and parents names shown and indicate that an SSN had already been assigned to the child named on the birth certificate. As more children are enumerated through the EAB program, there will be fewer persons without SSNs whose birth certificates could be used to obtain an SSN for someone else.
Federal income tax law requires that all persons claimed as dependents for Federal tax deduction purposes have a taxpayer identification number (now generally the SSN). This has created a strong incentive for individuals to obtain SSNs for their children at birth, thus reducing the potential for someone else's birth certificate to be used to fraudulently obtain an SSN.
Electronic Verification of Birth Certificates
Page 68 PREV PAGE TOP OF DOC We are currently working with the State Bureaus of Vital Statistics through the National Association of Public Health Statistics and Information Systems (NAPHSIS) to allow our field offices online access to State vital record data. This capability will serve as an electronic link between individual States and SSA. This system is a key step in making verification a reality.
In Tennessee, all SSA offices already access that State's vital record data online. Using the model in place in Tennessee, we are also now piloting online access to State vital records in Kentucky, Texas, Florida, and California.
Initiatives with INS and the Department of State
In addition, SSA is moving ahead with plans to have INS and the Department of State help us with enumeration. We paved the way for this initiative by publishing a regulation in October 1998 that authorized us to enter into agreements with INS and the State Department to collect enumeration data. At this point, we are in the process of working out the final details of those agreements.
We are confident that enumeration accuracy will greatly improve when this multi-phased process is fully implemented. Because this more fraud-resistant process will also be much more convenient and result in more timely receipt of an SSN, we believe that most noncitizens eligible to take advantage of the service will do so. Through INS participation in enumeration, work-authorized noncitizens will find their way cleared for early employment, an important benefit. While we expect the number of noncitizens applying for SSNs in our field offices to be minimal once this process is implemented, we will continue our efforts to guard against the submission of fraudulent documents in these cases.
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We believe it is important to acknowledge that most noncitizens who request SSNs have a legitimate right to and need for SSNs so they can work. To help them and still maintain integrity in our processes, we and INS have long worked together to improve the verification process. We introduced access to an automated systemcalled Systematic Alien Verification for Entitlements (SAVE) in a few offices several years ago, and by January 1997, we had SAVE in every SSA office. We verify every INS document presented with an SSN application through the SAVE program, except for documents from noncitizens who have not been in the country long enough for information to be available through SAVE. Currently, for these newly arrived noncitizens, our offices follow existing procedures for evaluating INS documents and seek manual verification from INS for any that appear suspect.
Finally, while we are finalizing plans for INS participation in enumeration, we are also exploring ways to improve and shorten the verification process through automated access to more INS data. We will continue to jointly consider options for improving the way we verify noncitizen status and employment authorization.
Social Security Cards for Work Authorization
I would now like to discuss the role of the Social Security card as evidence of work authorization, which is a separate issue from personal identification. The Immigration Reform and Control Act of 1986 (IRCA) makes it illegal for an employer to knowingly hire anyone not legally permitted to work in the United States; that is, noncitizens not authorized to work by INS. Under IRCA, all employers are required to verify the identity and employment eligibility of all employees hired after November, 1986, regardless of citizenship or national origin. Any of a variety of documents specified in the law and in INS regulations can be used for this verification. Some of these documentssuch as a United States Passportestablish both employment eligibility and identity. Othersincluding a Social Security card without a restrictive nonwork legendcan be used to establish employment eligibility, but must be accompanied by an identification document, such as a State driver's license. Employers do not have the authority to require employees to show their Social Security card to establish employment eligibility. In fact, for I9 purposes, requiring a new employee to present their card is a violation of immigration law.
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Originally, SSA issued the same type of Social Security card to everyone, whether or not they were authorized to work. Beginning in May 1982, a legend, ''NOT VALID FOR EMPLOYMENT,'' was printed on the Social Security cards of noncitizens not authorized to work. This was due to the increasing need for persons to have SSNs for nonwork purposes and INS concern that such persons could use their SSNs for work and the employer could not determine, based on the card, if the individual was authorized to work. Currently, there are few valid reasons to be issued a nonwork Social Security number card, although one such reason is to receive local, State, or Federal benefits.
With this nonwork legend appearing on the card, employers were able, for the first time, to determine whether the individual to whom the card was issued was authorized to work at the time the card was issued. Of course, they still could not rely solely on the card to establish that the person presenting it was the person to whom the SSN was assigned. Beginning in September 1992, SSA began issuing SSN cards with the legend ''VALID FOR WORK ONLY WITH INS AUTHORIZATION'' to noncitizens lawfully in the United States with temporary authority to work. In these cases, employers must look at the noncitizen's INS document to determine if the noncitizen has current authorization to work in the United States.
Counterfeit-Resistant Social Security Cards
In the beginning of the Social Security program, due to the then limited purpose of the Social Security card, no special efforts were made to prevent Social Security cards from being counterfeited. However, as counterfeiting became a concern, actions were taken to address this problem. For example, legislation enacted in 1983 required that Social Security cards be made of banknote paper andto the maximum extent practicablebe resistant to counterfeiting. SSA worked with the Bureau of Engraving, the Secret Service, and the Federal Bureau of Investigation to design a card that met these requirements. All Social Security cards issued since October 1983, incorporate a number of security features intended to make the card counterfeit-resistant and tamper-proof. It is now difficult to produce a high quality counterfeit of these cards.
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Some types of humanly readable security features that make the card more counterfeit-resistant are already incorporated in the current Social Security card. However, while some of these security features have been made public, others, for obvious reasons, have not. Thus, it would be difficult to train employers to identify counterfeit Social Security cards without disclosing the very security features designed to make the card counterfeit-resistant. Under current law, employers are required to make a good faith effort to ensure that documents are genuine. They are not required to be document experts. For the same reason that most of us will unwittingly accept a counterfeit $20 billlack of experience, expertise, and equipment in identifying a counterfeit billemployers may unwittingly accept counterfeit Social Security cards.
As new versions of Social Security cards have been developed since the first cards were issued in 1936, new and replacement cards have been issued prospectively because of the prohibitive cost of replacing all cards still in use. Thus, there are now 49 versions of the Social Security card in use, all of which are still valid.
Prototype SSN Card Study/Report
As you know, both welfare reform and immigration reform legislation required us to develop a prototype of a new card and to study and report on different methods of improving the Social Security card application process. In September 1997 SSA published our findings in the Report to Congress: Options for Enhancing the Social Security Card.
We developed seven card options in response to the legislative requirements. These included:
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Cards with pictures
Cards with secure barcode stripes
Cards with an optical memory stripe
Magnetic stripe cards
Magnetic stripe/picture cards
Microprocessor/magnetic stripe/picture cards
We found that issuing any of the enhanced cards would be feasible. If mass reissuance of cards to all SSN holders were required, it would be far more costly than a prospective issuance. We also studied the feasibility of charging a user fee to offset costs to issue enhanced cards. SSA's Inspector General studied Canada's Social Insurance Number fee charging operation and concluded that to pay for the related administrative expenses SSA should charge a fee of $13 for each card (in 1997 dollars).
The cost of issuing an enhanced card to almost 300 million card holders would be staggering. Depending on the option selected, costs range from $3.8 billion to $9.2 billion, including costs for contacting all number holders, processing costs (excluding staff overhead) to issue cards, cost of the card itself, and the cost of special equipment needed to work with each card option and capture information to be included on the card. In addition, because SSA would have to establish a process to collect the user fee, at an additional cost of $1.2 billion, the total cost of issuing replacement cards ranges from $5.1 billion to $10.5 billion. And, of course, there would be concerns about privacy and the potential for the card to be used as a national identification card, an issue that must be considered carefully.
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In conclusion, Mr. Chairman, SSA has in place a comprehensive system to check and verify documents necessary for an individual to get an SSN or file for Social Security and Supplemental Security Income benefits. The current SSN card has a number of features that make it counterfeit resistant and which make the card suitable for the purposes of reporting and tracking earnings. The card is as counterfeit and tamper resistant as all but the newest bills of U.S. currency. I would be happy to answer any questions you may have.
Mr. SMITH. In appreciation of his nearly flawless attendance record with this subcommittee, I am going to recognize the gentleman from Indiana first for his questions.
Mr. PEASE. Thank you, Mr. Chairman.
Thank you to members of the panel. As the chairman has made reference, we sit through a number of hearings here. This one has been extremely helpful, all of the witnesses, and I am very grateful for your time here.
Mr. Stewart, you were the first one, although several others made references to breeder documents. I confess to you, though I think I understand from the context of what was said what those are, but could you give us a definition of that term?
Mr. STEWART. Certainly. A breeder document is used for a number of purposes. One of them would be to create a false identity as an initial document that would then be used to go get other documents that would help support that new identity.
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An example, let's say that I wanted to get a driver's license. I could go into a driver's license motor vehicle administration office and I could ask for a driver's license by either showing them another driver's license from another State or showing them a birth certificate, Social Security card, or any combination of documents like that. The breeder term comes from its use to create further documents.
Mr. PEASE. I appreciate that.
You also made reference to the availability of birth certificates on the Worldwide Web. By that do I understand that you mean people can access a site on the web and download blank birth certificates that can then be modified for whatever purpose?
Mr. STEWART. Yes, sir. You can obtain templates, if you will, of birth certificates, driver's license, Social Security cards, et cetera, off of the Worldwide Web. Bring them down into your computer at your desk, and then manipulate those images by putting your own biographical information in them, print them out to a suitable printing device, and then you have a document that could be used.
Mr. PEASE. I appreciate that.
Mr. Hotchner, most of your discussion dealt with birth certificates and a number of others have mentioned that as, I guess, a common problem because of the thousands of variations on that form that are used by State and local governments. Do you have any recommendations regarding the advisability of standardization of birth certificates in the United States?
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Mr. HOTCHNER. Yes, Congressman. This is something that we have been actively supporting with other government agencies, trying to determine what the basic requirements ought to be. And there have indeed been some requirements set, and they have beenthe National Association for Public Health Statistics and Information Systems, which is, I gather, a group that is made up of State representativeshas adopted a set of those recommendations.
If you would like to know what they are, I can give you a precis of that: Specific paper stock with unique national or State watermark; minimum paper weight; sensitized paper that reacts to chemicals, and toner retention; latent images; microline printing; things like hidden word pantographs that would appear on photocopies that you don't see if you look at the original document; that sort of thing that would make the document itself quite secure.
Mr. PEASE. I am sensitive to the rights and responsibilities of State and local governments, but I am also sensitive to the need to have documents that are easily available for law enforcement, INS, and others to verify. And it would seem to me that standardization of those documents, at least this document, might be a place to start if in no other way than to say if a birth certificate is going to be used for verification for any other instruments, only a certain standardized one could be used for that purpose. State and local governments could continue to use others if they wish. Do you have a specific recommendation on this subject?
Mr. HOTCHNER. No. This is something that we are discussing with other Federal agencies, and I don't think that a conclusion has been reached except that we agree with your basic theory that this is a good idea to pursue.
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Mr. PEASE. I appreciate that.
Mr. Hesse, you were discussing advances in biometrics as a possible way to solve some of the problems with counterfeiting. How expensive are those processes and, therefore, how realistic is it for us to expect their widespread use in the near future?
Mr. HESSE. It would be very difficult for me to answer specific dollar amounts, but that is the problem. They are expensive because you not only have to, first of all, determine which biometric you are going to use, what type of system you are going to use, an optical strip or two D barcode or whatever, and then you will need readers to be able to actually retrieve that information that has been captured. So it is not like printing a document and then you are done with it. You have a system that has to go into place; and, obviously, it depends on what system and how widespread it is deployed, on the cost. Dollar amounts, I couldn't give you.
Mr. PEASE. Mr. Chairman, I assume my time has expired.
Mr. SMITH. Yes, but we are going to indulge you.
Mr. PEASE. Thank you, Mr. Chairman.
I just wanted to give Ms. Donnelly the opportunity. You were starting to make a point and ran out of time. I wanted to at least give you the chance if you had something else you wanted to add to do so.
Page 77 PREV PAGE TOP OF DOC Ms. DONNELLY. I think that, from our perspective, what is important about breeder documents is the greater sophistication in the ability to produce documents and the ready availability to fraudulently obtain them. Our focus is really to reduce our dependence on documents that are presented directly to us for enumeration purposes from the public, from dishonest people who may forge or misuse documents to obtain Social Security cards. So we are being very aggressive in trying to pursue some arrangements with the INS and with State bureaus of vital statistics to limit that.
Our project to enumerate newborns, right in the hospital, almost immediately after birth, and to try and have INS assist us by providing us the enumeration information directly when a person enters the country, when a decision about work authorization is made, in our view will get us the direct information that we need to issue cards and to limit the opportunity for these breeder documents, fraudulently-obtained documents to contaminate our system.
Mr. PEASE. I appreciate that.
Do you know, Ms. Donnelly, whether you would need, you or the INS, would need additional statutory authority to exchange that information, or is it possible to do that now?
Ms. DONNELLY. I believe it is possible, but we are at the early stages of trying to negotiate an agreement, and I don't know that we have explored everything so that I could make such a definitive statement.
Page 78 PREV PAGE TOP OF DOC Mr. PEASE. Thank you.
Thank you, Mr. Chairman.
Mr. SMITH. Thank you, Mr. Pease.
The gentlewoman from Texas, Ms. Jackson Lee, is recognized for her questions.
Ms. JACKSON LEE. Thank you very much, Mr. Chairman.
Let me start again with Ms. Donnelly, again thanking the panel for their presentation. And having reviewed some of your testimony, not having heard it, let me ask Ms. Donnelly if she can again state or maybe for the first time state for me the proper utilization of a Social Security card and what its intended use in your perspective is for?
Ms. DONNELLY. The Social Security card really, in a very parochial view was established by us solely for the purpose of maintaining accurately an individual's earnings covered under the Social Security program so that we would have a sound and accurate base in determining an amount of benefits that we would pay out for this program as certain appropriate events occurred.
We are not so naive that we have not understood that it has, by its nature and its widespread issuance pattern, been very attractive for use by other people.
Page 79 PREV PAGE TOP OF DOC The government itself has increasingly mandated uses for it. It is the identifier in military service records. Various other programs and agencies of the Federal Government and local entities have adopted it.
In keeping with that, and for our own purposes, we have tried to find a balance in making improvements to that card that maintain its integrity and its utility.
Ms. JACKSON LEE. But has the Social Security Administration represented to the private sector that this is an identification card? Have you advertised to that extent? Have you made a point of pushing it as an identification card?
Ms. DONNELLY. I believe that we have done exactly to the contrary. For a long period of time and very early in its issuance we clearly placed on the card the message that this was not an identification document. We have increasingly, as its use has expanded, added other similar messages that communicate very specifically what the card is about, messages such as ''this card is valid for work only with INS authorization,'' or ''this card is not valid for work.''
I think we have repeatedly, publicly pointed out that the card has no ability to serve as an identification document, because there is nothing on that card, if you present it to me, that permits me to make a determination that you are the person whose name is on the card.
Ms. JACKSON LEE. I thank you for that.
Page 80 PREV PAGE TOP OF DOC Let me pose a question to Mr. Stewart and Mr. Hesse and Mr. Stana with respect to what kind of improved technologyif you would restate it for me, if that has been part of your testimonythat could beI would like to use the word panacea. Maybe you will correct me and say there is none, but improved technology for this issue of fraudulent use of identification documents, what enhanced activities the GAO believes that the INS could engage in that would make them better able to deal with this question.
I think I said Mr. Stewart, Mr. Hesse. We can start with Mr. Stewart.
Mr. STEWART. Thank you.
I believe it is a three-pronged approach. There has to be an element of the education of the public. There has to be some type of penalty if you accept a bogus document. Then you also have to better secure the documents that are being used. Better security can come in many different forms, and each form has an associated cost to it.
Some of the most secure systems that are out there are the biographical systems that we have heard about today, where you could takesuch as the magnetic stripe on the card and encode that with information. You can do the same with a bar code type of pattern, but that would require a reader device at the point it is being used. So the cost would escalate according to the amount of security being put in.
Ms. JACKSON LEE. Thank you.
Mr. HESSE. Thank you. Well, yes, there is no panacea, I think, for fraudulent documents, because there are so many issues. It is not just the document itself; it is the whole issuing process. If you create a document, you have to secure it from the printing press to when it is handed to the actual person who is entitled to that document. So there is the security of the physical document itself that has to be thought into the process.
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The issuing process itself has to be secure. If you had the most secure document in the world but you are handing it over to anyone who paid the fee, obviously, that is not a secure document.
So these have to be factored into it.
As far as the security of the document itself, it is simply a matter of how secure do you want it or how much do you want to spend. It is that simple. The more secure documents will include biometrics, because they do tie the personas I said in my statement, it is the person who you are going to grant or deny entitlements to, not the document. So that is why we think biometrics is the right way to go. There is a cost involved, but what is the cost savings for the fraud that we stop? So that has to be taken into consideration.
Ms. JACKSON LEE. Has there been any measured improvement in the green card in terms of its technology and being fraud proof?
Mr. HESSE. Our newest green card, which came out over a year ago, is a very unique document. It is the only one like it in the world right now that has an engraved image of the person on it. It matches a printed photo that is on the opposite side of the card.
This isfor us in the document world, it is a big deal, because previously it was very easy to mass produce documents. Once you make the plate for that Social Security card or passport or birth certificate, you simply make as many as you can.
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Here we have taken the mass production out of it for the counterfeiter. Each card is individually engraved, and this is a major hurdle for counterfeiters to get by.
I am going to hate myself for saying this, but it has been out for over a year, and we have not seen one counterfeited yet, not at the lab anyway. So it is a very unique feature, and we continually try to improve these documents.
Ms. JACKSON LEE. I am glad you made that statement.
Mr. STANA. Very quickly, I don't think we need to be defeatist about this, because I think there are some steps that could make it much better. But I think we also have to recognize that even some of the improvements that the INS has made in their documentation and even some of the improvements that Social Security has made are improvements that are mostly good for people who are trained to use them appropriately.
I just returned from San Ysidro yesterday, and agents there told me there are thousands of people coming across the border with documents that appear genuine enough to the untrained eye to not only allow the alien to cross the border but to authorize employment. Really, when you mention the issue of technology, that is where maybe some major gains could be madehaving some sort of a reader that helps authorities and employers understand how authentic the document is and the identity of the person who is holding it.
Page 83 PREV PAGE TOP OF DOC Ms. JACKSON LEE. I will conclude.
I would imagine that frailty or failing would also attribute to any kind of national ID system as well in terms of people being able to identify.
Mr. STANA. As long as you are relying on the untrained human eye to pick up on the subtleties of the security features, it is very difficult to fix the problem.
Ms. JACKSON LEE. Thank you, Mr. Chairman.
Mr. SMITH. Thank you.
You have all mentioned, and been candid in doing so, the problems we are having with fraudulent documents. Mr. Stana, you just mentioned the problem that individuals can present documents to the untrained eye that are not readily, obviously fraudulent.
But, Mr. Stewart, I want to go back to part of your testimony. You were candid as well, not only in talking of the danger of the breeder documents and, Mr. Hesse, that is part of the problem with the INS documents, not the problem with the documents themselvesI am glad to hear about the progressbut the underlying documents used to obtain that document. The same with Social Security. Even if you have a tamper-proof immigration card or Social Security card or something else, if fraudulent documents are used to obtain that, we really haven't done what we can to deter the use of fraud.
Page 84 PREV PAGE TOP OF DOC Mr. Stewart, both in regard to the underlying breeder documents, which typically would be the birth certificate, Social Security card and driver's license, we have the problem of the number of fraudulent documents that are now used as well. I don't know if it was a typo or not, but I noticed in your written testimony that you said there was something like 70,000 different fraudulent documents that you have encountered. Is that accurate?
Mr. STEWART. Yes, sir. I left that out of my verbal testimony because of time. We began a database in our laboratory about 2 years ago where we are helping many different agencies with their counterfeit documents, and we have a forensic portion of it and an investigative portion. In that database, in a 2-year time period, we have amassed 70,000 different counterfeit documents.
Mr. SMITH. The problem is both with the underlying breeder documents as well as with the number of documents. We have gotten into that problem with the INS a little bit where we are trying to reduce the number of documents used by employers.
You also made the point that, with the computer expertise now available, that those who want to use fraudulent documents are just one step behind you. Because once we make advances in trying to reduce fraud, then the counterfeiters are right there with the same technology and the same computers trying to, I guess, stay even with if not ahead of those of us that would try to reduce the number of fraudulent documents.
What is your suggestion or do you have any suggestions for some type of improvements we can make and come up with a workable system to try to avoid the high incidence of fraudulent birth certificates, for example, which may or may not be the number one breeder document, but it is certainly a large part of the problem?
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Mr. STEWART. So your question is, how would we stop the high incidence of birth certificates?
Mr. SMITH. Can you make any proposal for a workable, verifiable birth certificate?
Mr. STEWART. I can make a proposal. It would be a very costly proposal.
The way to secure a document like that, in my own opinion, based on what I have seen in the forensic side of the house, is to add a biometric-type feature to it, which would cost a substantial amount, more than is being spent right now, and to come up with a more universal type of document, one that at most would only change the State name. Everything else would be the same on the document.
Mr. SMITH. Mr. Hotchner had some suggestions on that as well as to the paper and standardization and so forth.
Mr. Hotchner, just to go to your testimony for a minute, I thought it was interesting, unless I misread your written testimony, that you basically came up with four problems of fraudulent documents. This is in regard primarily to birth certificates. You said, first of all, there are many thousands of offices nationwide which authorize copies of U.S. birth certificates which come in hundreds of different formats. I think you also pointed out you can get birth certificates now by mail with no way to be sure who is actually requesting it.
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The second problem was you said copies of legitimate birth certificates can often be obtained through State, county and municipal authorities, generally upon presentation of nothing more than a driver's license, which gets us into the problems of fraudulent drivers' licenses.
Third, birth certificates can be falsified with relative ease.
Lastly, fraudulent applicants are able to obtain the legitimate birth certificates of deceased persons.
So you have got four different ways that people can take advantage of that situation. We have already gotten into a little bit and in your earlier answer to Mr. Pease as to how we can help reduce the incidence of those fraudulent birth certificates. What I was going to ask you was, in your experience, how does the State Department handle a situation where an individual falsely claims U.S. citizenship? Individuals who do so, as I understand the law, are deportable. But do you all recommend to the INS the individuals who have been apprehended for using false documents, and then what happens at that point?
Mr. HOTCHNER. Mr. Chairman, once we have identified a likely candidate for a second look, it goes to our Fraud Program Manager in each of the passport agencies wherever the application has been identified. If they agree that there is a problem, if it is an obvious problem, we will refer it to our Diplomatic Security Service which handles investigations of these sorts of problems. If it is not obvious, we may go back to the applicant and ask for additional evidence.
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We identify something on the order of 5,000 cases per year of evident frauds, but we stop a lot more than that by simply asking for additional information. But if it does go to the Diplomatic Security Service for investigation and they determine that there is fraud present, then it is referred to the U.S. Attorney that has jurisdiction for
Mr. SMITH. What in your experienceout of those 5,000 individuals, in your experience, how many of those individuals will actually be prosecuted?
Mr. HOTCHNER. I don't have a figure for that, Congressman. We can certainly provide one for the record.
Mr. SMITH. From your experience, would it be a high percentage or a low percentage?
Mr. HOTCHNER. It would be fairly low percentage, and for a couple of reasons, not least of which is that the U.S. Attorneys have a high case load and a substantial number of the cases we refer to them are simple alien fraud. There is no criminal activity involved, other than the fact of the fraudulent application.
Mr. SMITH. Okay. Thank you, Mr. Hotchner.
Mr. PEASE. No further questions.
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Mr. SMITH. In which case I will continue.
Let's see, Mr. Hesse, if I may go to you, I don't know that you actually mentioned this in your verbal testimony, but I thought this was a very good two-sentence summary of just how serious the problem was and how many ways fraudulent documents were used. I am going to read it to refresh your memory. You are referring to fraudulent documents.
They are used to attempt illegal entry, obtain unauthorized benefits and employment, create new identities for criminal purposes, conceal true identities for illegal purposes, and commit criminal acts. Second, fraudulent documents are not used solely by the illegal migrant, they are used extensively by the criminal as well.
That is a summary of the whole range of abuses of documents and the uses of fraudulent documents for wrong and illegal purposes.
You also make a point that I think is a good point about the single most vulnerable document and the one used by most government agencies being the birth certificate. That has been the focus of several of our questions today, because that is one of the underlying breeder documents.
Do you have any suggestions, other than the suggestions that have already been made, to try to reduce the incidence of use of fraudulent birth certificates?
Mr. HESSE. I wish I did have some miracle cure here, but I think it has been mentioned by the others, we are working with the other agencies to come up with standards. As has been mentioned earlier, this proposal has been made on standardizing the paper and the security features so all 50 States have basically the same document, which will help in the identification of any document that is handed to you.
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Beyond that and what I previously already mentioned, the whole system of issuing process, the security of the physical stock of the document, the security of the issuing process and, as was also mentioned, the training of anyone who is tasked with looking at these documents, the training is invaluable.
Mr. SMITH. You mentioned again I think in your written though maybe not verbal testimony that the INS has intercepted something like 100,000 fraudulent documents and will probably intercept thatmore this year. I am sure that involves tens of thousands of individuals.
Let me ask you the same question I asked Mr. Hotchner, which is, what happens to these individuals? You have thousands of individuals who have in effect broken the law who are deportable. What does the INS do with these individuals?
Mr. HESSE. Well, there are many different scenarios to that. In some cases, they arrive at the port of entry, and you arrive without being properly documented, you can be removed immediately, which really in the long run is the biggest cost-saving factor for all of us.
Mr. SMITH. So if I understood you correctly, someone who is apprehended on the spot using fraudulent documents is removed immediately?
Mr. HESSE. Can be.
Page 90 PREV PAGE TOP OF DOC Mr. SMITH. Oh, can be. That is a big difference.
Mr. HESSE. There are many other processes. If the person then states they havethey claim political asylum or whatever, they go into other processes.
Mr. SMITH. Let's assume there were 50,000 individuals who were known to use these fraudulent documents. How many of those 50,000 individuals would have been deported, in your estimation?
Mr. HESSE. I don't have a good number.
Mr. SMITH. A small fraction?
Mr. HESSE. No, I would say a large portion, because a large percent of those intercepted are on the southern border with documents that we are talking about.
Mr. SMITH. When they try to come across, they are turned around.
Mr. HESSE. That is right.
Mr. SMITH. Mr. Stana, let me go to you. I appreciate your being back as well.
You mentioned in your testimony that a significant number of aliens unauthorized to work in the United States have used fraudulent documents. We talked about the problem there. The employers are not trained to identify fraudulent documents, and it is known to the experts who are trained but not to the employer oftentimes. Do you have any kind of a guess as to the percentage of individuals or the number of individuals who have wrongly obtained employment by using fraudulent documents?
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Mr. STANA. I don't have a number, but I know that it is in the hundreds of thousands, if not millions. It is estimated there are 5 million unauthorized aliens in the country. I would imagine a good number of those are working.
Mr. SMITH. Are there individuals, though, who we think are working legally because of these fraudulent documents? And what are their numbers, would you guess? In other words, not known to be here illegally but thought to be here legally, even though they are using fraudulent document.
Mr. STANA. I don't have a number.
Mr. SMITH. Presumably, the number is large.
Mr. STANA. Very large.
Mr. SMITH. You mentioned, just trying to get a number of numbers, you mentioned in a single 20-month period from 1996 to 1998 that there were about 50,000 unauthorized aliens using 78,000 fraudulent documents to obtain employment. About 60 percent of the fraudulent documents used were INS documents. What are the most widely known fraudulent immigration documents used?
Mr. STANA. Well, first I would say that the 50,000 unauthorized aliens are only those that INS was investigating. As we have talked about in earlier hearings, that is a small portion of the total.
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Mr. SMITH. You mentioned millions.
Mr. STANA. That is the estimate. Most often, the green card and the employment authorization card are the ones most often used.
Mr. SMITH. And then what was the second most used?
Mr. STANA. The Social Security card.
Mr. SMITH. We talked a little bit about that.
One other question. When we talked about the cost, and I think Ms. Donnelly got into the cost, there is a rangeif you were to come up with a tamper-proof Social Security card with all seven types of safety devices and you issued it to everybody right now, the cost was something like 3 to 7 billion. But there are ways to get that cost down. I think you mentioned several of them in your prepared remarks. Would you tell us how we can get that cost down.
Mr. STANA. We identified two options to bring the immediate cost down. The first is to issue a replacement card to only those who need it for work authorization purposes. So of the 277 million card holders, you get 120 million rather than 277 million replacement cards.
Mr. SMITH. That would cut the cost in half.
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Mr. STANA. Roughly, because you have personnel costs. Roughly cut in half.
The other option would be to only issue a new card to those who apply for a replacement card.
I might mention something Mr. Pease brought up earlier, and I don't have the figures with respect to the INS documents. But earlier you asked about a rough cost estimate of putting biometrics and other features on the card. Attachment 2 on my statement shows seven options for which Social Security had developed cost estimates. For five of the seven options, which are essentially credit card type documents with a magnetic strip on the back, the cost of materials is less than a dollar.
Now, of course, the real cost is processing fees and the cost of having INS people, or Social Security people, interview applicants in this case. But there are two options for which the costs were much larger, and those options would be the ones that would be more foolproof because they may contain a microchip or other biometric identifiers. For those, the unit cost jumps to $11 to $18 per card. You are going from roughly 50 cents a card to 11 to 18 dollars a card. I would imagine those cost figures and the geometric increases based on features would apply to the kinds of cards the INS would issue.
Mr. PEASE. I do appreciate your pointing that out.
I had another question on another subject, but also for Mr. Hesse and Mr. Stana. Do we have any experience with fraud in the use of I9s, and, if so, what can you tell us with that?
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Mr. STANA. As you know, when an employee is hired, after he or she is hired, the employer is required to fill out the I9 on the employee. If you go to attachment 1 of my statement, the employee is required to provide either one document from document A or one document each from column B and C.
The fraud that occurs could be divided into two different categories. One is that the alien produces a fraudulent documenta fraudulent INS document or a driver's license and Social Security document. The employer looks at it and cannot detect whether that is a genuine document or the right individual with the document so the alien keeps the job.
The other is there are some employers who would like to take advantage of cheap labor, and they look at the documents, not very carefully, and say they look authentic. So the alien keeps the job. But that would be the fraud that I would see in connection with the I9.
Mr. PEASE. Have there been any studies, either by GAO or the INS itself, on this subject?
Mr. STANA. I am not aware of any done by the INS. I know we have not done a detailed study on the incidence of fraud on the I9 form, other than to say there are hundreds of thousands, millions of illegals, and if the I9 process was followed in connection with the employment verification system, then something went awry.
Mr. PEASE. Thank you very much.
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Mr. SMITH. Thank you, Mr. Pease.
We have been joined by the gentleman from Virginia, Mr. Goodlatte. He is recognized for questions.
Mr. GOODLATTE. Mr. Chairman, I want to thank you for holding this hearing on this important issue. I don't have any questions at this time.
Mr. SMITH. Thank you, Mr. Goodlatte.
Let me resume my own questions. Mr. Stana, I had a question for you and also for Ms. Donnelly. We have a colleague, Bill McCollum of Florida, who introduced legislation this year as in past years for a tamper-proof Social Security card, not a national ID card but just making the Social Security card tamper-proof. Give me your impression of that bill, if you will, and what you think we could accomplish by having a tamper-proof Social Security card.
Ms. Donnelly, I would like to ask you the same question.
Mr. STANA. I think anytime you increase the security of the document, it is a step in the right direction. So if we could have a tamper-proof Social Security card which would take the guesswork out of the employment and the discrimination issues, that would be great.
A couple of cautions, though. This is not a silver bullet. It is not the only thing that needs to be done. You would also need an effective electronic verification process and also, I might add, have an effective way to screen out some of the defective breeder documents mentioned by the others.
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Mr. SMITH. Ms. Donnelly.
Ms. DONNELLY. We certainly don't have an official agency position on it, but we did look at it, and when we looked at the counterfeit security relative to the $100 bill issues, I think we genuinely felt that the construct of our current card provided the same level of counterfeit-proof tamper resistance that could be achieved through that piece of legislation. We are continuing to introduce automated supports that I think are going to increase the security of our process. So we get down to the issue that is raised about the comparability with the passport and, in our assessment, that then led to what can we do to the card that permits someone to link it to the person who is presenting it, and the obvious thing that comes from the passport is the photograph.
When we get into that, then we get into the same issues about cost, the kind of distribution we make, whether it is wholesale to every current, active card holder, some of the variations that Mr. Stana presented.
Mr. SMITH. Okay. I gather from that answer you are in favor of making the Social Security card as counterfeit-proof as possible. You also recognizeMr. Stana, you pointed this outthe problem with the breeder documents. We have to address that problem. We haven't addressed that problem at all.
Any other questions by any Member that is here? Mr. Pease?
Mr. PEASE. I am sorry, Mr. Chairman, I know we have another panel.
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On the I9 issue, is there any consequence to the employer or the employing officer for filing, preserving the I9 form, knowing that the information that was used to fill it out is false or recklessly obtained?
Mr. STANA. Yes, there are penalties that can be imposed on an unscrupulous employer. Most often, when the INS inspectors review the I9s, the employer may say, well, the documents looked genuine to me. It is really tough to prove that the person knowingly hired someone with a false document. Where it is proven, and that is in about one in five INS investigations, they can impose a sanction. The records show, at least the most recent I have seen, that the fine averages about $6,100. About one in five investigations result in a sanction, and about one-half of the sanctions are actually collected.
Mr. PEASE. Those are financial sanctions against the employer?
Mr. STANA. Yes.
Mr. PEASE. Is there any personal liability for certifying a document that one knows or should have known was fraudulent?
Mr. STANA. I believe this is done in connection with the workplace. I don't know if any individual employee would be liable for sanctions.
Mr. PEASE. Thank you.
Page 98 PREV PAGE TOP OF DOC Mr. SMITH. Thank you, Mr. Pease.
Any other questions?
If not, thank you all for being here as witnesses for us. We will look forward to considering your testimony and trying to improve the system.
As members of our second panel come forward, I will introduce them: Detective Sergeant Robert Derbyshire, Supervisor, Economic Crimes, Criminal Investigation Division, Baltimore County Police Department; David Simcox, Chairman, Board of Directors, Center for Immigration Studies; Susan Martin, Director, Institute for the Study of International Migration at Georgetown University; Michael Anderson, International Chair, Driver Licensing and Control, American Association of Motor Vehicle Administrators; and the Honorable Brian Flaherty, State Representative from Connecticut, National Conference of State Legislatures.
We will start with Detective Sergeant Derbyshire. Is that the correct pronunciation? Do we say detective, sergeant or both?
Mr. DERBYSHIRE. Either, sir.
Thank you, Mr. Chairman.
Fraudulent use of personal identification documents
Mr. SMITH. Speak right into that microphone, if you would. Then let me caution you all, unfortunately, we have a 5-minute limit on all testimony. Okay.
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STATEMENT OF ROBERT DERBYSHIRE, DETECTIVE SERGEANT, SUPERVISOR ECONOMIC CRIMES, CRIMINAL INVESTIGATION DIVISION, BALTIMORE COUNTY POLICY DEPARTMENT
Mr. DERBYSHIRE. The fraudulent use of personal identification documents has been a long-standing criminal activity. In the age of technology, the creation of false identification documents can be accomplished on a computer keyboard. These documents appear so genuine that expert techniques are needed to verify their illegality. Counterfeit documents such as passports, birth certificates, drivers' licenses, Social Security cards, tax forms and educational diplomas can be created with such ease that an individual can assume almost any identity and engage in a variety of criminal activity.
Baltimore County, Maryland, is an urban county with a population of over 700,000. The Economic Crimes Unit of the Baltimore County Police Department investigates criminal activity involving financial fraud, credit card fraud, telecommunications fraud, forgeries, computer fraud and other white collar crimes. During the first 6 months of 1999, 1,262 cases were reported to the department, representing a lost value of over $3 million. The Economic Crimes Unit investigated 576 of these cases. Approximately six out of ten cases involve ''identity theft'' in the accomplishment of the criminal activity.
The criminal activity of identity theft has not only an impact on our economic structure but also on the lives of the innocent victims whose identities have been compromised. Individuals have suffered civil and criminal actions along with the destruction of credit history information. Victims struggle with the exasperating task of repairing their financial history, and very often at their own expense. In many jurisdictions, when financial loss is not suffered, identity theft leaves victims without criminal recourse.
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To further understand this problem, I would like to present three synopses of cases to the Subcommittee on Immigration and Claims.
The first case was a telecommunications fraud and passport fraud case. Information was received from Bell Atlantic of a possible cell site fraud at a location in Baltimore County. Review of the telephone records showed that, at one location, telephone service was established eight different times within a 3-month period under different names and Social Security numbers. The company's loss was over $12,000 in long-distance billing, which included international calls to the United Kingdom and Cameroon. Two of the names used to establish the accounts showed that the same Social Security numbers were used.
A search and seizure warrant was executed at the address. Found at the home were several passports with the same photograph, 16 different identities and several Social Security cards. The perpetrator had six different bank accounts and documents indicating ownership of three different businesses with four different mail drop addresses. The target's passports were used to obtain United States visas for other people in his native land of Cameroon. Eight different credit cards had been obtained in his various names. The perpetrator was prosecuted both federally and locally and is currently serving a Federal sentence.
In another case, counterfeit financial documents and telecommunications fraud information was received through a narcotics investigation that an electronic serial number reader was to be delivered at a location. This device is used to record cellular telephone numbers while customers use their telephones.
Page 101 PREV PAGE TOP OF DOC A controlled delivery was made, and the perpetrator was arrested. A search of his target vehicle led to the discovery of several other cloned phones, justifying the execution of a search and seizure warrant of the perpetrator's residence. The search of the target's home revealed counterfeit birth certificates from several States, a digital camera system for making drivers' licenses, which is used by many States. These counterfeit documents were all created by the perpetrator's computer system.
Lists of people's personal information, including Social Security numbers, along with mothers' maiden names, was also found. The perpetrator had several identities through which over $100,000 had been fraudulently obtained and deposited in bank accounts outside the United States.
Our investigation learned that the perpetrator was also selling identities to others. He had received people's personal information from being employed at a credit reporting agency. The perpetrator in this case was also prosecuted both federally and locally and is currently serving a Federal sentence.
In the last case, investigators from the Social Security Administration alerted us to a location in Baltimore County where several Social Security cards were being mailed. The location was a commercial mailing office. Through a trace of the mailing box, it was learned that the owner lived in New York City and made routine trips to the area to pick up mail.
A mail cover was placed on the box through the Postal Service, and it was found that numerous mailings were being received from the Social Security office. Surveillance was established, and three persons came to pick up the mail. Upon their apprehension, it was learned that the perpetrators were from Eastern Europe. In their possession were several Social Security cards. Further investigation revealed that the Social Security cards were being applied for and sent to addresses for use by illegal immigrants from Eastern Europe recruited to work in the United States.
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This investigation was merged into a larger investigation of vice criminal activity in the City of New York, which also exploited female immigrants. Since the perpetrators obtained the fraudulent Social Security cards through counterfeit identity documents made in New York City, they were prosecuted in New York State.
In conclusion, the prevalence of identity theft by internationally organized criminal rings is significant. Many of these rings support other illegal activities, particularly drug and vice crimes. The Baltimore County Police Department has been fortunate to receive strong support and cooperation from a number of Federal agencies, including the Secret Service, Immigration and Naturalization, Postal Inspections, Social Security, and the Federal Bureau of Investigation.
Collaboration has resulted in numerous arrests and convictions and the recovery of hundreds of thousands of dollars. However, efforts at this time have been reactive in nature.
To effectively mitigate identity theft in a proactive manner, identity theft laws need to be established in every State; collaboration between private and public sectors for the development of protection technologies to secure personal information needs to be supported and expanded; and, again, public education and information efforts need to be further developed and enhanced.
Thank you, Mr. Chairman.
Page 103 PREV PAGE TOP OF DOC Mr. SMITH. Thank you, Mr. Derbyshire.
[The prepared statement of Mr. Derbyshire follows:]
PREPARED STATEMENT OF ROBERT DERBYSHIRE, DETECTIVE SERGEANT, SUPERVISOR ECONOMIC CRIMES, CRIMINAL INVESTIGATION DIVISION, BALTIMORE COUNTY POLICY DEPARTMENT
Fraudulent use of personal identification documents has been a long standing criminal activity. In the age of technology the creation of false identification documents can be accomplished on a computer keyboard. These documents appear so genuine that expert techniques are needed to verify their illegality. Counterfeit documents such as; passports, birth certificates, drivers licenses, social security cards, tax forms, educational diplomas can be created with such ease that an individual can assume almost any identity and engage in a variety of criminal activity.
Baltimore County Maryland is an urban county with a population of over 700,000. The Economic Crimes Unit of the Baltimore County Police Department investigates criminal activity involving financial fraud, credit card fraud, telecommunications fraud, forgeries, computer fraud and other white collar crimes. During the first six months of 1999, 1262 case were reported to the department, representing a lost value of over 3 million dollars. The Economic Crimes Unit investigated 576 of these cases. Approximately six out of ten cases involve ''identify theft'' in the accomplishment of the criminal activity. The criminal activity of ''identity theft'' has not only had an impact on our economic structure but also on the lives of the innocent victims whose identities have been compromised. Individuals have suffered civil and criminal actions along with the destruction of credit history information. Victims struggle with the exasperating task of repairing their financial history and very often at their own expense. And in many jurisdictions, when financial loss is not suffered, ''identity theft'' leaves victims without criminal recourse.
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To further understand this problem I would like to present three case synopses to the Subcommittee on Immigration and Claims.
Case One-Telecommunications and Passport Fraud
Information was received from Bell Atlantic of a possible ''cell site'' fraud at a location in Baltimore County. Review of telephone records showed that, at one location, telephone service was established eight different times within a three month period, under different names and social security numbers. The company had loses of over $12,000.00 in long distant billing which included international calls to the United Kingdom and Cameroon. Two of the names used to establish accounts showed the same social security numbers. A Search and Seizure warrant was executed at the address. Found at the home were several passports with the same phonograph, sixteen different identities, and several social security cards. The perpetrator had six different bank accounts and documents indicating ownership of three different businesses with four different ''mail drop'' addresses. The target Passports were used to obtain United States Visa's for other people in Cameroon. Eight different credit cards had been obtained in his various names. The perpetrator was prosecuted federally and locally and is currently serving a federal sentence.
Case Two-Counterfeit Financial Documents and Telecommunications Fraud Information was received through a narcotics investigation that an electronic serial number reader was to be delivered at a location. This device is use to record cellular numbers while customers use their telephones. A controlled delivery was made and the perpetrator was arrested. A search of his targets vehicle lead to the discovery of several cloned telephones, justifying the execution of a Search and Seizure warrant of the perpetrator's residence. The search of the targets home revealed counterfeit birth certificates from several states, a digital camera system for making drivers lice These counterfeit documents were all created by the perpetrator's computer system. Lists of people's personal information included social security cards along with mothers maiden names. The perpetrator had several identities through which over $100,000.00 had been fraudulently obtained and deposited in bank accounts outside the U.S.A. Our investigation learned that the perpetrator was also selling identities to others. He had received people's personal information from being employed at a credit reporting agency. The perpetrator was prosecuted both federally and locally and is currently serving a federal sentence.
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Case Three-Passport Fraud
Investigators from the Social Security Administration had been alerted to a location in Baltimore County where several social security cards were being mailed. The location was a commercial mailing office. Through a trace of the mailing box, it was learned that the owner lived in New York City and made routine trips to the area to pick up mail. A mail cover was placed on the box through the postal service and it was found that numerous mailings were being received from the Social Security Administration. Surveillance was established and three persons came to the address to pick up mail. Upon apprehension, it was learned that the perpetrators were from Eastern Europe. In their possession were several social security cards. Further investigation revealed that the social security cards were being applied for and sent to the address for use by illegal immigrants from Eastern Europe ''recruited'' for work in the U.S.A.. This investigation was merged into a larger investigation of vice criminal activity in the city of New York which also exploited women immigrants. Since the perpetrators obtained the fraudulent social security cards through counterfeit identity documents made in New York, they were prosecuted in New York State.
The prevalence of Identity theft by internationally organized criminal rings is significant. Many of these rings support other illegal activities, particularly drug and vice crimes. The Baltimore County Police Department has been fortunate to receive strong support and cooperation from a number of federal agencies, including the Departments of Secret Service, Immigration and Naturalization, Postal Inspections, Social Security, and the Federal Bureau of Investigation. Collaboration has resulted in numerous arrests and convictions and the recovery of hundreds of thousands of dollars. However, efforts at this time are reactive in nature. To effectively mitigate ''identity theft'' in a proactive manner: 1) ''identity theft'' laws need to to established in every state; 2) collaboration between the private and public sectors for the development of protection technologies to secure personal information needs to be supported and expanded; and 3) public education and information efforts need to be further developed and enhanced.
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Mr. SMITH. Mr. Simcox.
STATEMENT OF DAVID SIMCOX, CHAIRMAN, BOARD OF DIRECTORS, CENTER FOR IMMIGRATION STUDIES
Mr. SIMCOX. Thank you, Mr. Chairman, for giving me this opportunity to speak to you today and to your colleagues.
It is important to stress at the beginning of my statement that the safety of ID documents and vital records is just not about immigration control. If the United States had no immigration at all, it would still have a pressing national interest in reliable and secure ID and the supporting databases to meet the needs of banking and finance, highway safety, health care, government benefits, crime control, passports and numerous other critical functions.
Nor is fraud the only problem. Consider, for example, how national health statistics are distorted by false claims of birth in the United States or how election outcomes can be affected by carelessness in maintaining adequate citizenship records.
Near anarchy continues to persist in identification related to immigration control and citizenship. Congressionally mandated employer sanctions have been rendered null and fraud by massive fraud.
Faked documents are no longer a cottage industry. They are increasingly sophisticated in production and distribution. We heard earlier in the testimony today about the major bust of a document ring in Los Angeles that had 2 million documents in inventory that showed a remarkable variety, not only all the standard old favorites of Social Security cards, drivers' licenses and INS documents, but also fake travelers checks and credit cards.
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Market conditions now in the United States couldn't be better for document fraud. The booming economy and labor market, the increasing interdependence, complexity and anonymity of American society, and indeed the trusting nature of many American institutions all interact to create lucrative opportunities for counterfeiters, just as those same conditions further heighten the need for reliable and secure identification.
INS has made progress in the technical aspects of fraud proofing its own documents, but its very success has caused more unauthorized job seekers to use the more vulnerable U.S. birth certificate to fraudulently establish job eligibility with citizenship.
I personally credit the States with considerable progress in enhancing the technical security features of their drivers' licenses and their capacity for secure storage and exchange of personal data. While I personally favor Federal standards for drivers' licenses, I believe the State motor vehicle administrators, working together, can accomplish many of the same objectives. In that effort, they deserve congressional incentives and support.
Legislators might consider some of the following: Stimulate more computerization of MVAs to allow rapid interactive exchanges among them and with other involved State and Federal agencies; support creation of a State-based ''all driver'' file, using a unique identifier and a pointer system for problem drivers; funding or sharing research with motor vehicle administrators on biometric technology; encourage States to raise their penalties for abuse of their own vital documents and vital statistics records, including the power to confiscate fraudulent ID documents. In this regard, perhaps impress on the States and the American public the seriousness of ID fraud by requiring INS to seek deportation of aliens who gain legal residence or other benefits using knowingly fraudulent documents.
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An Immigration Service study in 1992 of ID reported that State progress in rationalizing and protecting their vital records was considerably slower than it was in the drivers license field. Unfortunately, 7 years later, that assessment is still largely valid. The crazy quilt of vital records formats, standards and legal statuses even within the States does not yield easily to streamlining.
Strong congressional support for expanded grants to the States through the National Center for Health Statistics, INS, State Department and other agencies, will advance such important goals as standardization within and among States which now have some 7,000 different issuing jurisdictions; computerization and interactive electronic transfer of data among States and with involved Federal agencies; and matching of all births and deaths in the United States and those of U.S. citizens abroad as reported by U.S. Consular officers.
We are still plagued with 10 different versions of the Social Security card. The Social Security Administration's 1997 study of the options for a more secure card shows that a phased recarding of all Social Security participants with a highly secure and reliable account number card is technically, administratively and financially feasible. Even the most expensive of those options cited by SSA, the $9.2 billion plastic card with optical data storage, is a reasonable cost when it is considered it will be spread over a period of 5 to 10 years. The savings to the United States institutions and individuals from fraud thereby avoided would far exceed the investment.
Thank you, Mr. Chairman.
Page 109 PREV PAGE TOP OF DOC Mr. SMITH. Thank you, Mr. Simcox.
[The prepared statement of Mr. Simcox follows:]
PREPARED STATEMENT OF DAVID SIMCOX, CHAIRMAN, BOARD OF DIRECTORS, CENTER FOR IMMIGRATION STUDIES
I am David Simcox, Chairman of the Board of the Center for Immigration Studies here in Washington, and former executive director of that organization. The Center is a nonprofit, public interest research and policy analysis group that studies the effects of immigration into the United States on broad national social, environmental and demographic interests. Thank you for this opportunity to comment on the seemingly intractable problem of extensive fraud and abuse in the use of U.S. identification documents and vital records.
What needs to be stressed early in hearings such as these and in the national debate is that security of vital records, driver licenses, passports and other federal and state ID documents is not just about immigration control. Even if there were no immigration at all, there would be a pressing national interest in reliable and secure personal identification and data bases for such needs as crime control, government entitlements, banking and finance, health care, tax collection, gun control, and child support enforcement.
While the near anarchy in the misuse of vital records remains discouraging, Congress is to be commended for passing in 1996 the most extensive and rigorous legislation yet to combat document fraud in the administration of immigration, public assistance and related government programs. Their actions reflect a growing national exasperation with rampant fraud. But patience is needed. A number of these provisions, however, will need considerable time to begin changing behavior.
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But for now the country remains awash in counterfeit and misrepresented ID documents. INS's pilot work eligibility verification projects in the past half decade have proved what has long been suspected: in industries dependent on foreign workers, such as meat packing and food processing, a huge segment of the work force defeats the intent of employer sanctions with fake documents. A rapidly growing foreign work force, rising prosperity, tight labor markets, the spreading administrative anonymity and interdependence of U.S. society, and the innocence and trusting nature of American institutions, have come together to make secure identification more urgent just as they have made the production and distribution of false documents a large and sophisticated industry that has advanced beyond its ''cottage'' phase.
In 1998 INS investigators and other federal and state officials in Los Angeles broke up what was the largest document counterfeiting ring ever. Agents seized two million high quality fake government ID cards and other documents, including false credit cards and travelers checks awaiting distribution through an extensive and sophisticated network.
The immense and urgent demand for ID documents ''proving'' the right to work in the United States leads to the exploitation of the most obscure weak points in the Federal and State systems. In identification as in the physical world, nature abhors a vacuum. In 1996, motor vehicle administrators of my state, Kentucky, which has only a small foreign-born population, dropped the requirement that foreign applicants take the drivers' tests. Within weeks Circuit Court clerks in larger counties saw a significant rise in the number of foreign applicants coming in escorted groups from New York and other major immigrant gateway cities. In Louisville, applications by foreigners rose to nearly 200 a week. INS discovered that a major national immigrant smuggling ring had identified the state as an easy mark for obtaining drivers' licenses. The state also helped invite fraud by not requiring evidence of residence in the state, by granting licenses to visitors of short-term non-immigrant visas, and by declining to verify questionable immigration and vital records documents, and by delivering the finished license on the spot rather than mailing it to the applicant as many state MVA's do.
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The remedies to abuse of vital records and ID documents lie in large part with the states. The powers of Congress to help, however, are considerable. I believe that the record of the 23 years since enactment of IRCA show that most of the states genuinely want to improve the security and reliability of their vital records and identification documents, such as the motor vehicle operator licensesfor reasons of public interest far beyond helping the Federal government to enforce immigration law. Steady improvement in the physical security and anti-fraud measures in state motor vehicle operators licenses in the 1990s have been impressive.
While Congress has preferred to delay implementation, the 1996 Immigration Reform Law's requirement that state drivers licenses meet federal security standards, there is still much it could sustain and expand the States' own promising efforts to bring greater uniformity and security to their licenses. Legislators should consider:
Mandating the Social Security Administration (SSA) to give state motor vehicle administrators (MVA) on-line, interactive access to its files, thus permitting verification of applicants' Social Security numbers before issuance of the license.
Mandating similar access by state MVA's to INS files to verify documents presented by foreign applicants.
Supporting and encouraging the continued upgrading of reliability and security of state vital records, in particular by supporting electronic links between MVA's and vital statistics agencies.
Page 112 PREV PAGE TOP OF DOC Supporting the establishment under state auspices of an ''all driver'' file and pointer system covering all U.S. license holders, secured by a unique identifier such as the Social Security number. This would reduce fraud, flag problem drivers, and prevent issuance of multiple licenses.
Providing, sharing or funding research on biometric identification to meet the MVA's needs for rapid capture and retrieval of biometric data with affordable technology.
Considering federal legislation raising the penalties for fraudulent use of State vital records documents.
State Vital Records
As directed by the 1989 Immigration Nursing Relief Act, INS analyzed progress in securing state vital records and reported in 1993 that, unlike the drivers license, it was ''slow.'' Six years later it is still slow. Abuse of ''breeder documents'' remains high. Indeed improvements in the security of INS documents proving work eligibility, and the removal of others that were too easily falsified, have increased the popularity of fake or misrepresented U.S. birth certificates among illegal alien job-seekers. A false claim to U.S. citizenship to unwary employers avoids much of the risk and high-cost of submitting forged work authorization documents.
While there is a uniform model vital records statute drawn up by the National Center for Health Statistics and the Association of Vital Records and Health Statistics Administrators, it is not binding on many states. Our state-based system of vital records continues to suffer from a dizzying diversity of formats, standards, and legal statuses of its documents, even within states. There are no national master file, and the present incompatibilities in the system would make it very hard to establish one. Many well-intentioned states lack the resources to meet the standards in the model statute. Kentucky, for example, supports the concept of matching of all birth and death records, but scarcity of resources forces it to limit its matching to in-state births and deaths and only for those nine years and under.
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States need tougher sanctions in their statutes against fraud, alteration, and imposture in the use of their own vital records, now only a misdemeanor in most states. Many lack the authority to confiscate fraudulent ID documents. Usually purchasers and users of fraudulent documents are accomplices rather than innocent victims of swindlers. INS could help the states by sending clearer message that those who obtain work authorization or legal residence through document fraud will not benefit from their misdeeds. While such offenses are deportable, this is not the message INS has been sending. INS now cracks down on the makers and purveyors of false documents, but because of staff shortages rarely acts against the willing beneficiaries of the schemes. Starting off membership in the American community with acts of fraud and bribery does not bode well for good citizenship.
Congress has a continuing interest and a role here, and it does not involve ''federalizing'' the nation's vital records system. Federal agencies such as the Department of Health and Human Services, the State Department Passport Office, and the INS depend on accurate and timely vital records. Congress should consider further expanding the grants and other incentives it has given to State vital statistics agencies through the National Center on Health Statistics to encourage greater standardization, computerization of registering and reporting, rapid sharing of information among states and with federal agencies, and matching of all birth and death records.
The Legislative Process: Greater Awareness of the Administrative Limits and Contradictions
Congress itself must be more sensitive to the potential for document fraud. This requires a greater awareness of the vulnerabilities and limitations of ID systems and vital records in the United States. The tendency has been to pass laws awarding immigration benefits to specifically defined groups that exceed the capacity of Federal agencies to adjudicate them accurately. The 1986 Special Agricultural Program was an egregious example of vague criteria and unverifiable personal data on applicants opening the door to massive fraud. Such giveaways threaten the very integrity of our immigration system.
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Congress, in its hearings and investigatory process on creating or expanding immigration benefits should give more consideration to the practical question of whether the benefits can be adjudicated with reasonable accuracy and security. It is my impression from years of following hearings in this committee and its counterparts in the Senate that witnesses from the executive branch are often not fully candid on such issues. Now wanting to appear inept or unhelpful, they are reluctant to acknowledge fully the inadequacy and vulnerability of U.S. data and document systems and their proneness to extensive fraud. Correct determination of immigration eligibilities on the basis of foreign documents or affidavits of aliens is even more problematic, verging on the impossible.
Permanent resident status in the United States has become one of the most valuable commodities on this planet. It is hardly surprising that each Congressional act to extend it to a new group will confer immense value on documents or information establishing membership in that group. Such legislation evokes remarkable creativity and entrepreneurship throughout the world to produce the needed documents or data and rising political pressures on legislators to accept lower standards of proof.
Before each vote on such measures, each congressman should have the information that will make him ask himself and others: will administrators have the reliable information and the clarity of guidelines to award this benefit only to those deserving it, while effectively screening out the myriad of unentitled who are likely to claim it? If the honest answer is ''no,'' then the question must be whether the public interest would be better served by delaying, defeating or reformulating such legislation.
Page 115 PREV PAGE TOP OF DOCBalancing consumer service, accuracy and privacy
Legislators must recognize and deal with the fact that tighter screening and closer scrutiny of personal identification has a political cost. Every administering agencyindeed, Congress itselfhas three conflicting goals in applying the law: Good customer service, protection of privacy, and accuracy of information on which to base the decision. All too often the search for accuracy comes to be seen as ''red tape'' to be cut in the interest of quick customer satisfaction. But often forgotten is that millions of American who favor responsible management of immigration are also ''customers'' of the government.
Similarly, the debate over improved identification has tended to pivot on the possible threats to the privacy interests of potential victim groups, while overlooking the added protection such systems may provide to the privacy and security of scores of millions of ordinary Americans. This may help explain why polls show that most Americans, including minorities and immigrants, favor a national ID system, with the support for it greater among lower income groups (source: Gallup surveys of 1983 and 1993; CNN/USA Today/Gallup Poll of July 9, 1995).
The presumption of threats to privacy is often raised as an obstacle to accuracy and completeness of information, a convenient scarecrow for those whose real objections lie elsewhere. Reconciling basic privacy safeguards and effective compilation and use of personal data is one of the toughest things policy makers must do in our democratic society. Public and congressional perceptions of the extent of threats to privacy have varied widely and at times unexplainably, depending on the particular issue.
The 105th and 106th Congresses have blocked the implementation of federal standards of acceptability for state drivers licenses legislated in the 105th Congress because of fears of threats to privacy and individual freedom. But to crack down on child support deadbeats, and with little reference to privacy concerns, the 104th Congress in the Welfare Reform Act, mandated creation of a nationwide Directory of New Hires, a massive database of the nation's workers that imposes new responsibilities on employers and gives the Federal government an unprecedented ability to monitor the work force. For reasons of privacy, however, that data is not accessible to INS and other law enforcement agencies.
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I conclude by taking noting the Social Security Administration's 1997 study of the options for a tamper-proof, secure Social Security card that can carry varying amount of personal and administrative data and which may use biometrics (Report to Congress on Options for Enhancing the Social Security Card).
I believe this report shows clearly the technical, administrative and financial feasibility of giving the American people a useful and secure document that will help safeguard their privacy and reduce identity theft. Even the highest cost option, a plastic card with optical storage at a total cost of $9.2 billion, seems reasonable when spread over five or more years and when compared with prospective savings to Americans from forestalling fraud and abuse. While all seven options provide the basis for further discussion, I would urge the appropriate committees of Congress to give serious study to those options that are the most fraud-proof and most sophisticated in storing and protecting personal data, take the lead in educating the rest of Congress, and develop legislative initiatives.
Mr Chairman, thank you and your committee colleagues for hearing my comments.
Mr. SMITH. Dr. Martin.
STATEMENT OF SUSAN MARTIN, DIRECTOR, INSTITUTE FOR THE STUDY OF INTERNATIONAL MIGRATION, GEORGETOWN UNIVERSITY
Page 117 PREV PAGE TOP OF DOC Ms. MARTIN. Thank you for this opportunity to testify.
My interest in issues related to fraudulent documents goes back a number of years to when I served as Executive Director of the Commission on Immigration Reform. We held a number of expert consultations and formed a working group to help us develop recommendations for deterring the proliferation of fraudulent documents.
More recently, I have been involved in a number of transatlantic discussions with our counterparts in Europe on issues of counterfeiting and document fraud. This is an issue not only of concern to us but also of concern to the other advanced democracies.
We have heard of the many uses put to fraudulent documents. In the immigration context certainly the use of such fraudulent documents such as birth certificates, drivers licenses and Social Security cards for work authorization purposes is of great concern.
In looking at the ways of dealing with fraud, we were particularly concerned with birth certificates, since they are at the root of the ability to build a fraudulent identity.
The Commission came up with a number of recommendation to improve the security and to deter fraudulent access to birth certificates, while also ensuring privacy by helping to ensure that imposters cannot gain access to identities that are not their own.
The Commission recommended having a standardized application form for requesting certified copies of birth certificates, ensuring that only State or State-authorized vital records offices would be authorized to issue certified copies that could be used for the purpose of applying for benefits, developing standard designs and paper stocks that would have greater security features, computerizing birth record repositories in order to be able to have the link between the database and the records themselves, and matching of birth and death records in order to ensure that people could not take on other identities.
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The Immigration Act passed in 1996 encouraged these types of reforms by first specifying that 4 years after enactment no Federal agency would be able to accept birth certificates unless they conformed to minimum standards, requiring the President to designate a lead agency to promulgate regulations as to those minimum standards and providing grants to States to help them in the process of transforming their systems.
Unfortunately, since that time, the regulations have not been promulgated. My understanding, and it is confirmed in the INS testimony, is that INS was designated as the lead agency, even though the legislative record assumed that it would be HHS. There have been two meetings held so far, but the process appears to be somewhat stalled in moving forward with those regulations. Nor have funds been appropriated for grants to the States to help them in the process of improving their records.
It also raised penalties in order to use that as a mechanism for deterring document fraud. I would encourage this committee, perhaps through one of the GAO reports that are issued on the implementation, to monitor the effectiveness of those increased penalties for deterring document abuse.
Now, let me end by saying that, while these efforts are important and I would say necessary, they are not sufficient. Without, as we heard from the other panel this morning, a more secure process for verifying employment eligibility, it is unlikely there will be the type of reduction in document fraud that is needed. The untrained nonprofessional cannot determine the difference between a good counterfeit or imposter document and a real document without having help in verifying that information.
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To see how easy it is to get a good counterfeit, you can just go to the web site www.fake-id.org where you can order about any document. They specify these are for novelty purposes, but if you take the sticker off, it is your decision how you are going to use the documents. The web site is only of interest to those who want to establish a new identity because the documents are so good and the cost is quite high.
So without better verification processes that involve computerization, it is unlikely we will really do much in deterring the type of document fraud that has been discussed today.
Mr. SMITH. Thank you, Dr. Martin.
[The prepared statement of Ms. Martin follows:]
PREPARED STATEMENT OF SUSAN MARTIN, DIRECTOR, INSTITUTE FOR THE STUDY OF INTERNATIONAL MIGRATION, GEORGETOWN UNIVERSITY
Mr. Chairman and Members of the Subcommittee, I want to thank you for this opportunity to testify at this hearing on ''Counterfeiting and Misuse of the Social Security Card and State and Local Identity Documents.'' I serve as the Director of the Institute for the Study of International Migration in the Edmund Walsh School of Foreign Service at Georgetown University. My interest in these issues go back a number of years. When I served as Executive Director of the U.S. Commission on Immigration Reform, we held expert consultations on document fraud. More recently, I have been involved in transatlantic discussion of best practices in management of immigration programs, in which I have had the opportunity to compare U.S. and European policies regarding documentation.
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At the root of many of the problems encountered in enforcement of immigration laws is the proliferation of counterfeit documents. In the United States, implementation of the employer sanctions provisions of the Immigration Reform and Control Act of 1986 stimulated development of lucrative enterprises that produce counterfeit social security cards, drivers licenses and birth certificates to use in demonstrating authorization to work in this country. In addition, aliens can buy or borrow legitimate documents with photographs and information that match their own age, gender and appearance. The growth in global smuggling operations has fueled these activities, as traffickers provide counterfeit or imposter passports, visas, and other documents to migrants seeking entry into the more affluent countries.
The so-called ''breeder documents''birth certificates, social security cards and drivers licensesare among the most easily counterfeited or used fraudulently, not only to gain work authorization but also to build new identities. The social security card and drivers license remain the most frequently used documents shown to employers as part of the I9 process for verifying work authorization.
The Commission recommended a series of actions that would reduce the fraudulent access to breeder documents, particularly birth certificates, that can be used to establish an identity in this country. The issue of birth certificate fraud is twofold: either the birth certificate itself is altered (lack of standardization makes it easy to counterfeit birth records); or the document is obtained through fraudulent means (obtaining birth records of someone other than the person making the request). With a birth certificate, it is possible to obtain other identification documents. Experts point to the need for a system which could control access to birth certificates while not impinging a registrar's ability to serve the public.
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At the time the Commission made its investigations, there were about seven thousand local registrars, in addition to state registrars, issuing certified copies of birth certificates. The majority of requests for birth certificates were by mail and most were made for administrative or legal purposes (to verify age, citizenship, or parental relationship for social security cards, passports, driver's licenses, etc.). Another common reason for requesting birth records is genealogy. The volume of requests has been quite high and some state offices have been months behind in issuing certified copies.
Most states have restricted access to birth records, meaning that requests can be made only by certain individuals. Requests for certified copies are handled either in person or by mail. In-person requests are handled differently by each state. Some state registrars require both a picture ID and that the applicant be either named on the birth certificate or be a designated representative of the person named. Although many states require that certain identification information be sent in along with mail-in requests, fraudulent access is easier by mail than in person. It is relatively easy for someone seeking a legal identity to scan the obituary section of any newspaper for a name and birth date of someone of similar age, request a certified copy of the deceased's birth certificate, and automatically acquire a new identity.
Moreover, there are thousands of different types of birth certificates, many of which are easily obtained and easily altered. Currently, most states utilize specialized paper and markings, seals, and other features. Controls have not been put into place in most local registrars, however. There is no standard form for certified copies of birth certificates and there is no national standard for issuance of birth certificates. Lack of secure paperstocks and inks in local registrars' offices increases the ability to alter or counterfeit birth certificates.
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To reduce fraudulent access to birth certificates, the Commission recommended:
Regulation of requests for birth certificates through standardized application forms;
A system of interstate and intrastate matching of birth and death records;
Making certified copies of birth certificates issued by states or state-controlled vital records offices the only forms accepted by federal agencies;
Using a standard design and paperstock for all certified copies of birth certificates to reduce counterfeiting; and
Encouraging states to computerize birth records repositories.
The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA) included several provisions to encourage these types of reforms. Beginning four years after IIRIRA's enactment, no Federal agency may accept for any official purpose a birth certificate unless it conforms to minimum requirements including the use of safety paper, the seal of the issuing custodian of record, and other features to limit forgeries and photocopies. Within one year after passage of IIRIRA, regulations were to be promulgated setting out minimum requirements. IIRIRA specifically precludes the Federal government from requiring a single design to which birth certificates issued by all States must conform, specifying that the requirements shall accommodate the differences between States in the ways in which birth records are stored and birth certificates are produced. IIRIRA authorizes grants to States to assist them in issuing birth certificates that conform to the required standards and to assist them in establishing mechanisms for matching birth and death records.
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To date, the regulations have not been promulgated nor have funds been appropriated for the grant program. Only last year was a lead agencythe Immigration and Naturalization Servicedesignated to coordinate the development of the regulations. A working group of interested agencies, including representatives of State vital records divisions, has met twice but the work appears stalled as INS has called no meetings since April 1999. I hope this hearing will restart an already delayed process.
The Commission also recommended imposition of greater penalties on those producing or selling documents for purposes of evading immigration laws, steps taken in the Illegal Immigration Reform and Immigrant Responsibility Act of 1997. IIRIRA amended Title 18 of the U.S. Code to increase the penalties to imprisonment of up to 15 years for fraudulent production or transfer of birth certificates, drivers licenses, personal identification cards and other documents issued under the authority of the U.S. government. If the document fraud occurred to facilitate drug trafficking or terrorism, the penalty is up to 20 years and 25 years, respectively. IIRIRA also provided wiretap authority in investigating cases involving production of false identification documents. A systematic evaluation is needed of the effectiveness of these new law enforcement tools in deterring document fraud.
I venture to make a preliminary conclusion in the absence of such systematic assessment: These various activities aimed at making documents more secure and increasing penalties and enforcement capacity will help address the problems identified herein, but on their own, they are insufficient to reduce significantly the use of counterfeit and imposter documents. Particularly in the context of work authorization, phony documents will continue to have value until a more secure verification process is in place.
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Identifying forgeries and imposter documents is difficult, even for trained professionals. Employers cannot be expected to become document experts. Moreover, the market for fraudulent documents is so lucrative and the technology for producing them is so accessible and inexpensive that counterfeit but visually acceptable versions of almost every document produced by government will be available within months if not days of their issue.
To give an idea of the ease with which fake identification documents can be obtained, check out www.fake-id.org on the Internet. Although there is a disclaimer that the requested documents are for novelty purposes only, the company provides cards with all of the security featuresmagnetic strips, holograms, seals, reflective laminate coatingused by the government agencies that produce the originals. In fact, the company boasts that it uses the same equipment used by Departments of Motor Vehicles and the same paper used by the Social Security Administration. Maryland birth certificates, with the authentic raised seal, are in stock, but the Fake-ID will gladly custom make others. The company's website explains that they have found a ''loop hole in the law that if we put a sticker (very tiny) on the front of your license we can sell/ship it to you. Now if you choose to peel it off after it arrives that is entirely up to you and you assume all responsibility/liability after that point.'' The prices are higher than those on other websites, but as they explain ''if it is novelty card you are after so you show off to your friends and have a laugh then this is not the place for you, if however on the other hand you want the Photo I.D. required to become someone you are not and need exceptional quality material to do so, then this is the site for you.''
The INS Forensic Document Laboratory, a highly professional and world-renowned operation, can barely keep pace with the new counterfeits it receives. Its efforts, along with the immigration agencies in several other countries, to produce CDROMs that government officials can use to detect forgeries is extremely useful but has less utility for the non-professionals who review so many of the documents required to demonstrate eligibility for immigration-related benefits.
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Because of these limitations, the Commission recommended pilot testing of a computerized system for verifying work authorization. In effect, documents are only as secure as the databases that can be checked to determine their validity. IIRIRA mandated implementation of such pilots, including a system through which social security numbers are electronically verified. The pilot programs fall short of the Commission's recommendations. For example, new hires must continue to fill out I9 forms and self-identify as citizens or aliens. The Commission urged elimination of this step to reduce the potential for discrimination against those identifying themselves as immigrants and to reduce paperwork for employers. Nevertheless, these pilots should provide useful information in determining if document fraud can be reduced by establishing computerized safeguards. I urge this subcommittee to monitor closely the implementation and evaluation of the pilot tests as one of its principal oversight activities.
I would be pleased to answer any questions you have.
Mr. SMITH. Mr. Anderson from the Texas Department of Public Safety.
STATEMENT OF MICHAEL ANDERSON, INTERNATIONAL CHAIR, DRIVER LICENSING AND CONTROL, AMERICAN ASSOCIATION OF MOTOR VEHICLE ADMINISTRATORS
Mr. ANDERSON. Representing the American Association of Motor Vehicle Administrators at this particular meeting. I serve as the Chair of the International Driver Licensing and Control Committee, Mr. Chairman. I will refer to the American Association of Motor Vehicle Administrators as AAMVA in my presentation.
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AAMVA is an international association whose members are the chief motor vehicle and law enforcement administrators in the United States and Canada. We are responsible for administering the laws covering the motor vehicle and its use throughout North America.
AAMVA is no stranger to the identification and fraudulent document issues that are prevalent throughout North America today. The use of fraudulent documents results in enormous economic losses in the United States and Canada through bank, employment, welfare and retail fraud, even drug smuggling and money laundering. However, the use of fraudulently obtained identification also is directly related to losses in human life on our highways.
Economically, the use of fraudulently obtained drivers licenses or illegal identification cards is estimated to cost society billions of dollars each year. The drivers license is universally accepted to verify a person's identity. Virtually everyone considers the drivers license as a legal and authentic document. If a person presents a drivers license or ID card which indicates the name to be John Doe with a date of birth of July 19, 1950, the Clerk in the grocery store, the person selling the hunting or fishing permit, the law enforcement officer making a traffic stop, the employer reviewing a job application, or the person approving a gun permit holds that document to be legal and trusts the information therein to be correct.
The check approval, job offer or traffic ticket is made based on the fact that the person believes that the license or ID card holder is the person identified on the face of the document. To that end, it is the responsibility of the licensing agency to ensure that the document is issued to an applicant who first submits documentation which satisfactorily verifies his or her identity. The agency should follow strict guidelines in reviewing identification documents to ensure authenticity. We believe severe penalties should be in place for any individual who presents false or fraudulent documentation or who misrepresents himself or herself in an application for a driver's license or ID card.
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AAMVA has been and is currently involved in a number of programs that address these issues. The first is The Uniform Identification Practices Model Program for motor vehicle agencies in the United States and Canada. This effort began in March 1994 and culminated with the publication of a guideline document in May 1996.
The model program recommends identical identification standards to be followed for both driver license and identification card applicants. The program encompasses a number of aspects and contains minimum standards that are understandable and reasonable to implement by all driver licensing agencies.
Mr. Chairman, we have included a copy of that document for the record.
The next program deals with document verification and fraud detection. To deal with this issue, AAMVA has developed and implemented the Fraudulent Identification Prevention Program (FIPP). This program assists jurisdictions in training front-line staff to detect fraudulent documents. The key to curbing fraudulent identification lies in the detection of fraudulent documents and in verifying a person's identity prior to issuing the driver's license or identification card. Only when the front-line staff are fully trained to detect fraudulent documents and only when automated verification documents is a reality can fraudulent applications be truly minimized.
Unfortunately, fraudulent applications will never be totally eliminated, but would-be fraudulent ID holders certainly can be discouraged with the implementation of stricter issuance procedures. Many documents contain hidden verifiers whose presence or absence can be detected with proper training.
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Working in conjunction with the National Highway Traffic Safety Administration and the U.S. Secret Service, AAMVA has conducted over 30 train-the-trainer sessions throughout North America, training in excess of 500 key motor vehicle agency officials in all 51 U.S. jurisdictions and five Canadian provinces.
The last program deals with the information contained on the driver's license and ID card documents as well as the technologies used.
AAMVA and representatives of our Industry Advisory Board are participating in an American National Standard Institute project to develop a U.S. Standard for driver licenses and identification cards that deals with both the information contained on the documents as well as the technologies that are utilized.
Work on this standard began in 1997 and is currently in its final stages. The objectives of the standards being developed are as follows: To uniquely identify the card issuer and cardholder, to bring uniformity to the millions of driver license cards now in circulation, and to encourage transition from existing practice to the new standards.
On behalf of AAMVA, Mr. Chairman, I thank you for the opportunity to testify at this important hearing.
Mr. SMITH. Thank you, Mr. Anderson.
[The prepared statement of Mr. Anderson follows:]
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PREPARED STATEMENT OF MICHAEL ANDERSON, INTERNATIONAL CHAIR, DRIVER LICENSING AND CONTROL, AMERICAN ASSOCIATION OF MOTOR VEHICLE ADMINISTRATORS
Good Morning Mr. Chairman. My name is Michael Anderson. I serve as Chief of Driver Services for the Texas Department of Public Safety and as International Chairman of the Driver Licensing and Control Committee of the American Association of Motor Vehicle Administrators (AAMVA).
AAMVA is an international association whose members are the chief motor vehicle and law enforcement administrators in the United States and Canada. We are responsible for administering the laws covering the motor vehicle and its use throughout North America. We are at the forefront of many national highway and traffic safety issues that affect our country today, including identification and document fraud.
AAMVA is no stranger to the identification and fraudulent document issues that are prevalent throughout North America today. The use of fraudulent documents results in enormous economic loses in the United States and Canada through bank, employment, welfare and retail fraudeven drug smuggling and money laundering. However, the use of fraudulently obtained identification also is directly related to losses in human life on our highways.
Obtaining a driver's license through fraudulent means, allows an individual to continue to drive in many instances when she or he should not be on the road, thus circumventing the system. Persons who fraudulently apply for or who possess a fictitious driver's license or identification card often use the document to illegally purchase alcohol and firearms, make illegal welfare applications, drive while suspended or revoked or pursue a variety of other unlawful acts. Economically, the use of fraudulently obtained drivers' licenses or illegal identification cards is estimated to cost society tens of billions of dollars per year.
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In this age of ''uniformity'' within our Association, the Driver Licensing and Control Committee is striving to develop uniform guidelines across the entire spectrum of driving licensing activities: from identification, to testing, to screening and evaluation, to driver improvement. The foundation for work on identification standards relates directly to our desire:
To enhance and promote the one-license, one driver control record concept,
To protect jurisdictions from increasing emphasis on the legal obligations to detect and deny the issuance of fraudulent licenses, and
To provide customers, individuals, businesses and government with products that achieve the quality levels currently expected, but not uniformly justified, by present security and control measures.
The driver's license is universally accepted to verify a person's identity. Virtually everyone considers the driver's license as a legal and authentic document. If a person presents a driver's license or ID card which indicates his name is Joe Smith with a date of birth of July 19, 1950, the clerk at the grocery store, the person selling a hunting or fishing permit, the law enforcement officer making a traffic stop, the employer reviewing a job application, or the person approving a gun permit, holds that document to be legal and trusts the information therein to be correct.
The check approval, job offer or traffic ticket is made based on the fact that the person believes the license or ID card holder to be the person identified on the face of the document. To that end, it is the responsibility of the licensing agency to ensure the document is issued to an applicant who first submits documentation which satisfactorily verifies his or her identity. The agency should follow strict guidelines in reviewing identification documents to ensure authenticity. We believe severe penalties should be in place for any individual who presents false or fraudulent documentation or who misrepresents him or herself in an application for a driver's license or ID card.
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AAMVA has been and is currently involved in a number of programs that address these issues. The first is The Uniform Identification Practices Model Program for motor vehicle agencies in the United States and Canada. This effort began in March 1994 and culminated with the publication of a guideline document in May 1996. In order to keep the document current, we will review and revise it periodically with the first review coming in Fiscal Year 2000.
The model program recommends identical identification standards be followed for both driver license and identification card applicants. The program encompasses a number of aspects and contains minimum standards that are understandable and reasonable to implement by all driver licensing agencies, thus encouraging our jurisdictions to adopt the program.
Aspects of the Model Program include:
Driver License/ID Card Issuance
Social Security Number Collection and Verification
Renewal and Duplicate Applications
Immigration and Naturalization Services Access
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Minor Licenses/ID Cards/Learner Permits
Electronic Exchange of Images
Document Verification and Fraud Detection
Sanctions for Fraudulent Driver License and ID Card Application
Information to be Present on the Driver License/ID Card
We have provided a copy of the model program as a part of the record.
The next program deals with document verification and fraud detection. To deal with this issue, AAMVA has developed and implemented The Fraudulent Identification Prevention Program (FIPP). This program assists jurisdictions in training field staff to detect fraudulent documents.
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A key to curbing fraudulent identification lies in the detection of fraudulent documents and in verifying a person's identity prior to issuing a driver's license or identification card. Only when field staff are fully trained to detect fraudulent documents and only when automated verification of documents is a reality, can fraudulent applications be truly minimized.
Unfortunately, fraudulent applications will never be totally eliminated, but ''would-be'' fraudulent ID holders certainly can be discouraged with the implementation of stricter issuance procedures. Many documents contain hidden verifiers whose presence or absence can be detected with proper training.
Working in conjunction with the National Highway Traffic Safety Administration and the U.S. Secret Service, AAMVA has conducted over 30 ''Train-the-Trainer'' sessions throughout North Americatraining in excess of 500 key motor vehicle agency officials in all 51 U.S. jurisdictions and 5 Canadian provinces. We are currently working to update the training program and plan to conduct more sessions during the next fiscal year.
The last program deals with the information contained on the driver's license and ID card documents as well as the technologies used.
AAMVA and representatives of our Industry Advisory Board are participating in an American National Standard Institute project to develop a U.S. standard for driver licenses and identification cards that deals with both the information contained on the documents as well as the technologies that are utilized.
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Work on this standard began in 1997, and is currently in its final stages. The development involved broad-based project teams including State driver license agencies, government, equipment and software suppliers, card vendors and consultants.
The objectives of the standards being developed are the following:
To uniquely identify the card issuer and cardholder;
To bring uniformity to the millions of driver license cards now in circulation;
To encourage transition from existing practice to the new standard;
To assist administrative efficiency and accuracy through machine-readable identification within a foundation that encourages future applications; and
To facilitate future development in technology and application.
We are also involved with the International Standards Organization (ISO) to develop a worldwide standard for the driver's license and identification cards. This effort began in June of this year.
Mr. Chairman, I thank you for the opportunity to testify this morning to share some of AAMVA's efforts to address fraudulent document and identification issues that have a direct economic impact as well as an impact on highway and traffic safety throughout our country.
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Mr. SMITH. Mr. Flaherty.
STATEMENT OF BRIAN FLAHERTY, STATE REPRESENTATIVE FROM CONNECTICUT, NATIONAL CONFERENCE OF STATE LEGISLATURES
Mr. FLAHERTY. Thank you, Mr. Chairman, members of the subcommittee. My name is Brian Flaherty, and I serve as the Deputy Republican Leader of the Connecticut House of Representatives. I thank you for the honor and opportunity to testify and join you for this important hearing.
I also appear today on behalf of the National Conference of State Legislatures. I am vice chairman of the NCSL Assembly on Federal Issues, which formulates NCSL's State-Federal policies that serve as the foundation for our organizations's advocacy in Washington, D.C.
NCSL represents the legislatures of the 50 States and our Nation's commonwealths and territories, and we are an outspoken and firm believer in the Federal system of government. We consistently defend State authority, resist preemption and unfunded mandates, seek some balance and flexibility in the delivery of services through State and Federal partnerships and act to protect the intergovernmental fiscal system.
Page 136 PREV PAGE TOP OF DOC Today, Mr. Chairman, marks the second time within the past year I have presented testimony to the Congress on what NCSL believes are unintended, but harsh, impacts that a section of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 poses to the States.
Last September, at the invitation of Indiana Representative David McIntosh to the subcommittee he chaired in the former House Government Reform and Oversight Committee, I joined a rather diverse panel of witnesses that brought together the Eagle Forum, Americans for Tax Reform, and the American Civil Liberties Union, united in opposition to section 656(b) of the Immigration Act.
At the time, Mr. Chairman, the focus of the hearing was on identity theft, and we heard some rather chilling testimony on the problems presented and the problems that could have been prevented and that we feel that section 656(b) could exacerbate in exposing people, our citizens, to identity theft by, as it states, requiring that the Social Security number be presented or be put on the driver's license.
Our message at the time was clear, that this section of the act, in setting acceptable forms of identification for certain Federal agencies, was effectively, if not intentionally, a back-door way of commandeering State-issued drivers licenses for Federal purposes.
One only need look at section 656(b), which I just mentioned, and, more importantly or as importantly, the proposed regulations that were drawn off of that statute which state that the driver's license or identification document shall contain, as I said, a Social Security number that can be read visually or by electronic means. This is a mandate, Mr. Chairman, an unfunded one at that, and we feel that it is preemption and we oppose it.
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I don't mean, Mr. Chairman and members of the subcommittee, to suggest in any way that the problems are the focus of your hearing, the problems posed by illegal immigration and fraud, are not something demanding of strong Federal action. We just don't believe that one of the problems is the fact that States don't properly control our own drivers' licenses.
There have been some dauntingand this is a daunting problem. And some of the testimony, it has been interesting to sit here and listen to it, of the technology, the fact that there are several so-called breeder documents, and our drivers' licenses have been included in that, and also the costs it could take to clear that up.
Mr. Chairman, the driver's license, we feel, is an authorizing document for driving motor vehicles, not a document intended as an identifier of U.S. Citizenship. They are intended to bring safety, to ensure a standard of driving competency and insurability.
To allow this section of the act, the regulations by the way have been frozen for a year, thankfully, to go through and require States to put Social Security numbers on our drivers' licenses would go against the experience of 43 of the States that, for reasons of crime prevention, fraud or personal privacy, chose not to pursue that option.
In my own State of Connecticut, we chose to prohibit the use of these numbers on the driver's license, but that is not to say that we don't require the collection. We do, but we restrict the purposes for which they are used, and we absolutely don't print in any form the Social Security numbers on the licenses.
Page 138 PREV PAGE TOP OF DOC So what do we do? I would propose, Mr. Chairman and members of this subcommittee, that in order, because as a lawmaker for 11 years I know that bad regulations are often the product of something in the law, to rewrite or repeal section 656(b) by passing House Resolution 2337 of Congressman Barr from Georgia, who joined us at a press conference before that hearing, and Congressman Ron Paul and Morris Hinchey, who have sponsored that.
Mr. Chairman and members, as any part of your effort to address problems with fraud, please understand that, without changing 656(b), it contradicts the State experience, federalizes an activity that fundamentally should remain with us.
I would be happy to continue this discussion, and I thank you for the opportunity to testify today, sir.
Mr. SMITH. Thank you, Mr. Flaherty.
[The prepared statement of Mr. Flaherty follows:]
PREPARED STATEMENT OF BRIAN FLAHERTY, STATE REPRESENTATIVE FROM CONNECTICUT, NATIONAL CONFERENCE OF STATE LEGISLATURES
Mr. Chairman, members of the Subcommittee. My name is Brian Flaherty, and I serve as the Deputy Republican Leader of the Connecticut House of Representatives. I appear before you here today on behalf of the National Conference of State Legislatures. I am vice-chair of NCSL's Assembly on Federal Issues, which formulates NCSL's state-federal policies that serve as the foundation for our organization's advocacy activities in Washington, D.C.
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The National Conference of State Legislatures represents the legislatures of the 50 states and the nation's commonwealths and territories. This organization is an outspoken and firm believer in our federal system of government. We consistently defend state authority, resist preemption and unfunded mandates, seek balance and flexibility in the delivery of services through state-federal partnerships and act to protect the intergovernmental fiscal system.
Today marks the second time within the past year that I have presented testimony to the Congress on what NCSL believes are unintended, but harsh, impacts that a section of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 poses to the states. Last September, at the invitation of Indiana Representative David McIntosh, Chairman of the House Government Reform and Oversight Subcommittee on Natural Economic Growth, Natural Resources and Regulatory Affairs, and at our press conference, I joined a rather diverse panel that brought together the Eagle Forum, Americans For Tax Reform, and the American Civil Liberties Union in united opposition to section 656 (b) of the Act. Our message was clear: this section of the Act, in setting acceptable forms of identification for certain federal agencies, is effectively a back-door way of commandeering state-issued drivers licenses for federal purposes.
How? One need only look at Section 656 (b) and the regulations proposed to implement it. The National Highway Transportation Safety Administration proposed rules to implement Section 656 (b) covering ''state issued drivers licenses and comparable identification documents.'' The proposed regulations state that ''the drivers license or identification document shall contain a Social Security number that can be read visually or by electronic means.'' That's a mandate (an unfunded one, at that), that's pre-emption at its worst, and NCSL believes that is wrong.
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Mr. Chairman, members of the subcommittee, NCSL recognizes that the problems presented by illegal immigrationparticularly to border statesdemanded federal action. We just don't believe that one of those problems was state control over the issuance of our own driver's licenses.
Legislators around the country have struggled with developing effective solutions to problems with identity fraud generallywhile simultaneously protecting individual privacy. One solution that NCSL totally rejects, however, is a federal mandate that states imprint Social Security numbers on our own driver's licenses. Nor, for that matter, should there be an unfunded mandatory verification of Social Security numbers for driver's licensesespecially when the costs of that verification were so woefully underestimated.
The driver's license is an authorizing document for driving motorized vehiclesnot a document intended to be used as an identifier of U.S. citizenship. Driver's licenses are intended to breed safety, ensuring a standard of driving competency and insurability. In forcing it to be something else entirely, the federal government would be scorning the considered judgement of 43 states that for reasons of crime prevention, fraud and personal privacy choose not to require the use of Social Security numbers as all-purpose identifiers.
In my own state of Connecticut, we bipartisanly chose to prohibit the use of Social Security numbers on the face of driver's licenses. That is not to say, however, that we do not require drivers license applicants to include their Social Security numbers on an application form. We do. We also restrict the purposes for which the motor vehicles commissioner may disclose personal information, including the Social Security number from motor vehicle records. And we absolutely do not printin any formthe Social Security number on the license itself.
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Requiring states to verify Social Security numbers, even if they already collect them, amounts to a serious unfunded mandate. But for the states like Connecticut that call for the number, and those that don't, the issuance and production of our drivers licenses are within our domainnot the federal governments.
REPEAL SECTION 656 (B).
So what do we do? I suppose, Mr. Chairman, that I could sit here all day long and beat up on regulators and their proposed regulations. However, as a lawmaker for the past 11 years, experience tells me that the only way we can bring common sense and reasonableness to this issue is not to tinker with regulations but to repeal Section 656(b).
My message to you today, Mr. Chairman and members of the Subcommittee, is quite simple. As part of any effort to address problems with fraud, Section 656 (b) of the 1996 immigration reform act must be repealed immediately. Despite good intentions, that section is a gross usurpation of state authority. It is an unfunded mandate. It is preemption at its worst. It is counter-devolutionary. It contradicts state experience. It federalizes an activity that fundamentally should remain with states.
BAD SECTIONS OF LAW CAN ONLY PRODUCE BAD REGULATIONS.
Some would argue that a ''fix'' to the federal regulations, which thankfully are frozen from promulgation for one year, would tame the counter-devolutionary content of 656 (b). The unfortunate fact of the matter is, however, that a bad, misguided section of law has produced these bad, misguided regulations. The problem is the law, itself.
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The National Highway Traffic Safety Administration received thousands of comments on its proposed regulations for implementation of Section 656 (b). It is not surprising to me that the overwhelming preponderance of the comments were negative, both toward the section of law generally and toward the regulations specifically. The round of comments was so unquestionably negative that Dr. Martinez from NHTSA wrote a letter to Capitol Hill stating that since the law had unintended consequences, it needed to be revisited by Congress.
NCSL submitted comments on the regulations on August 3, 1998 and again on October 2, 1998. Several state legislators also submitted comments that mirrored our organization's general concerns. While I have no intention of going into all of our comments, a sampling of our problems include the following:
(1) The movement among states regarding driver's licenses is against mandatory use of Social Security numbers and towards the assignment of a random identification number (or allowing the driver the option of using his/her Social Security number). The bottom line is this: there is no compelling reason for forcing states to retreat to mandatory use of Social Security numbers. It defies our experience and opens the door to concerns regarding privacy and security that are best left closed.
(2) The overwhelming number of states do not have centralized driver's license issuance. Therefore, all local and regional motor vehicle offices would require installation of equipment making verification possible. Some states do not use Social Security numbers in the application process. For them, this is a major, compulsory turnaround on their chosen public policy. Perhaps a larger problem is the matter of turnaround time on license applications. Getting a driver's license is one of those moments when citizens come into direct, face-to-face contact with government. There have certainly been problems with long lines. Progress has been made in several states to remedy these situations. It is certainly not in my interest, and I would assume not in yours, to entertain ideas that will extend the wait at motor vehicle license offices. However, section 656 (b) and its regulations are not likely to help. NCSL only sees more complication, therefore more delay, as a result of the ''federal'' presence in the ''state's'' business.
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I could go on and on. Instead, I will submit for the record NCSL's comments on the proposed regulations, which make clear our feelings on Section 656 (b).
PASS H.R. 2337.
The answer to this dilemma is quite clear. We need quick enactment of H.R. 2337, sponsored by a bipartisan group of members of Congress. H.R. 2337, when passed, will produce two immediate benefits: (1) it will rid us of an absolutely unnecessary preemptive section of the law and return the driver's license issuance process entirely to the states, where it belongs, and (2) it will prevent the fraud situation from worsening through the promulgation of regulations.
There are two points I would like to conclude with, if I may, and they are at the center of NCSL's objection. The first is preemption.
When Congress considers an issue that may include preemption, there is typically a debate, sparked by the presentation of competing arguments, as to why or why not federalization of what is a traditional state activity ought to be pursued. Nonetheless, state capability to issue driver's licenses was never the subject of debate. No Member of Congress, to my recollection, charged the states with ineptness. No one suggested that the federal government could accomplish driver's license issuance and production tasks more effectively. Yet, the end result of the law is preemption and activity that runs against state experiences. Is it a ''National ID Card,'' per se? You may not think so. But in reality, it is.
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ABUSING THE UNFUNDED MANDATE REFORM ACT
And finally, I would be quite remiss, Mr. Chairman and Subcommittee Members, not to mention the Unfunded Mandates Reform Act. I believe that UMRA has been a positive influence on the legislative process. None of us ever believed that UMRA would halt, forever, any unfunded federal mandate. For the most part since its enactment, the tide of unfunded federal mandates has ebbed significantly.
There are a few notable exceptions, and perhaps, not surprisingly, they deal with the subject of today's hearing. When Section 656 (b) was adopted, Senate sponsors of the language, in order to skirt the UMRA point of order, spread out the implementation time of the proposed law. In doing so, they were able to undercut a cost estimate that easily took this section over the $50 million threshold. NHTSA has taken similar action in determining the cost estimate for the proposed regulatory charge in relying on data from a non-representative group of states to bring the estimate under $100 million. NCSL's estimates indicate that implementing 656 (b) and its corresponding regulations will place a substantial cost on state governments that will easily exceed the $50 million threshold set in UMRA. But there is yet more insult here. In preparing its regulations, NHTSA completely ignored its mandated responsibility to consult with elected state and local officials and their organizations when preparing the proposed regulations. Had they done so, we could have discussed cost estimate methodology and assumptions.
IF A NATIONAL ID CARD IS WHAT CONGRESS WANTS, ENACT ONE.
If the real issue driving this bad section of law is the need for a national identification card, then vote on one, and let it stand or fall on its own merits. Once again, NCSL is sympathetic to the problems with fraud. We just believe that meddling with the state driver's licensing process is the wrong way to fix those problems.
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Thank you for this opportunity to testify. I would be glad to respond to any questions that you may have.
Mr. SMITH. Let me say that we welcome the gentleman from California, Mr. Berman, who has joined us; but also let me say to all my colleagues, we are running short on time, so we will probably just have the time for one round of questions.
I will begin and direct my first question toward Detective Sergeant Derbyshire, if I may.
You mentioned in your testimony the high incidence of document fraud, particularly in regard to immigration. I have to point out that Baltimore, your city, and Maryland, your State, are not exactly known as border States with high numbers of illegal aliens, and yet it seems to me that a disproportionate amount of document fraud involving immigration has come to your attention.
Just in general terms, what proportion of the cases that you see involve illegal aliens and some type of immigration document fraud?
Mr. DERBYSHIRE. I would estimate about 20 percent of all our fraud cases deal with immigration.
Mr. SMITH. Twenty percent, and this is in a, as I said, not a widely known immigration city or State.
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Mr. DERBYSHIRE. That is correct.
Mr. SMITH. I think that is very significant.
Mr. Simcox, I don't have so much as questions for you as just comments, because I think you made some good points that I just want to emphasize.
The first is that the document fraud that we see goes beyond just immigration, and you made the point that it gets into crime control, government entitlements, banking and finance, health care, tax collection, gun control and child support as well. So while this hearing is primarily concerned with the use of fraudulent documents as related to immigration, the problem is far more extensive than that. I just agree with that.
You mentioned several points that you think States should consider. Give me briefly, if you can, one or two of the most important things that you think States should do.
Mr. SIMCOX. Well, I think they have got to come to terms in some States with whether or not we can still afford to have the birth certificate be a public document, that there should be restrictions on the circulation of birth data, birth certificates, and other documentation. That would certainly be one.
I believe that they have got to devote more resources to some of the basic things in vital statistics collection. For example, performing adequate birth and death matching requires considerable staff, particularly burdensome to the smaller, poorer States. That would be something.
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In the field of drivers' licenses, I have also mentioned I think the importance of makingmany of the States consider fraudulent document use or abuse within the State as only a misdemeanor.
Mr. SIMCOX. I believe they need to be much more serious about criminal penalties.
Mr. SMITH. Thank you, Mr. Simcox.
Dr. Martin, a couple of comments and questions as well. First of all, you pointed out that www.fake-id, isn't that illegal? It is probably not, but it seems that we ought to be able to do something about individuals advertising on the Internet on how they can make fraudulent documents. Real quickly, is there anything we can do on that that you are aware of?
Ms. MARTIN. I would think so. They actually talk about there being a loophole because they put a little sticker on the front of it. They are beyond the law, so that would be one area to
Mr. SMITH. Something like a big void across the front, but maybe not that exactly.
By the way, I thought you understated when you talked about the INS and the 1996 law that required the administration to try to take some steps to reduce the incidence of birth certificate fraud. You called the process stalled. After almost 2 years of not seeing much progress, I would say that is a euphemism for what the actuality is.
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Real quickly thenmaybe I will be able to come back for the other witnesses in a secondthe Commission on Immigration Reform of which you were executive director some years ago under Barbara Jordan's guidance made several recommendations on ways to reduce the fraudulent access to birth certificates. Briefly describe in a little bit more detail some of those improvements that we can make.
Ms. MARTIN. Certainly. The first step is in the application process for a certified birth certificate, to have some standardization in the application process itself to ensure who is able to get access to certified documents.
The second thing is to centralize more which offices are able to issue certified documents; you can have birth certificates that can be used for genealogy purposes or other purposes but don't have something on it that says certified for use for public benefits. You can make that kind of distinction.
Next, the issues that we heard about a lot from the first group on standard designs and secure papers, to move ahead in that area. But then the computerization of the birth records repositories and the matching of birth and death records are essential. And the 1996 legislation does have authorization for grants to States to help them in that process. Those funds haven't been appropriated, and we would certainly encourage that to happen.
Mr. SMITH. We haven't implemented any of those recommendations yet by the Commission and that is to my regret; and, as you say, maybe the process will not be stalled forever in that regard.
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Ms. Jackson Lee is recognized.
Ms. JACKSON LEE. I thank the chairman very much.
Let me start with Representative Flaherty on his comments about his opposition and those I mentioned of the state legislature of section 656 of the 1996 law. Because I think you indicated it is sort of a back-door manner of commandeering State-issued drivers' licenses for Federal purposes. Would you comment on juxtaposing the rights of States in this instance against your assessment of whether or not we have such an enormity of illegal immigration that it will require doing something along those lines which is, as you have indicated, would be commandeering State-issued licenses and more or less taking away the prerogative of the States on these issues.
Mr. FLAHERTY. Certainly. Normally, when a discussion is held in Congress to federalize something or to, let's say, preempt, to take an action away or to direct an action to the States, there is normally debate on that specific action, and there is more give and take, and it is usually because it has been suggested that perhaps the States or even localities in other cases have fallen down on the job.
I know that there has been a trend recently in certain other areas of crime where certain crimes have now been federalized where in other cases, in several different States, there are different measures that exist. I would look to the example, in fact, that some of the States are now doing.
Page 150 PREV PAGE TOP OF DOC I know that in the State of ConnecticutI checked with our Motor Vehicle Department before coming down here to double-checkin order to get a driver's license in the State of Connecticut, you need to bring in two primary forms of ID, a residence address. They check that againstand by the way, you have to fill out on the form your Social Security number. That date is checked against the national driver's registration file to make sure there are no problems in other States regarding your driving record. I also am led to understand they also can detect other criminal violations as well.
The document itself, which I would prefer not to incriminate myself because of the photograph, includes several of the suggestions that Mr. Anderson and others have talked about in terms of technology, the bar coding, the special paper, the embedded information. The State of Washington also is one taking the lead on that.
I would suggest when you weigh the effect when talking aboutlet's just say if a driver's license is one of the breeder documents being addressed by this panel, first, it is only one of them. We have heard about the immigration; we heard about Social Security cards; we certainly heard about birth certificates. All of them would involve technology to keep up with the criminal element and the counterfeiters which we heard about today. All of them would involve, certainly, training of personnel, the front-line people Mr. Anderson was talking about on that technology, and with 656(b) basically focusing on the impact it has on drivers' licenses, on this one of those breeder documents, and in effect that it might not even, based on what I have heard today, might not, in and of itself, deal with the problem effectively.
Ms. JACKSON LEE. Let me pose a question to you, if you can answer briefly. We have said in this committee, the Judiciary Committee, and viewed certain issues as being sufficiently of a crisis nature that we have taken action in terms of the Federal preemption, if you will, for example, in drug cases and putting them on certain schedules as it relates to illegal drug use, some of which have resulted in death. We consider thator let me put it in my context, as responding to a crisis. Drugs kill. Illegal use of drugs can ultimately kill. Do you think we are at a crisis point where that would provide us the necessity to preempt States' handling of drivers' licenses and do you think that it is, frankly, an invasion of privacy to require the Social Security cards' numbers on drivers' licenses?
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Mr. FLAHERTY. I will answer your second question first.
I think it is an invasion of privacy in dealing with the Social Security numbers on the driver's license. I suggest the problem is grave enoughI would suggest the problem that you are bringing up, and certainly as was mentioned by the chairman in the Resendez-Ramirez case where this is a matter of life and death, it is certainly grave enough to work with the States and to have more of a partnership to call upon the States to do these things. But the requirement in 656(b) NCSL believes goes beyond the status we are at right now.
I do feel somewhat tentative in allowing a perception to be built that we don't or this legislator doesn't feel this is a grave enough problem; we are just here to complain about a mandate. I agree that it is very serious, and I would say look to the States, what we have done, and work with us through that way rather than prescripting something that will only address a narrow aspect of a larger problem we heard today.
Ms. JACKSON LEE. Let me close by simply saying that the acts of Mr. Resendez-Ramirez and his many other names is certainly heinous and horrific, and I think you misconstrued my point. I think my point about federalizing drug laws is because across the country drugs kill repeatedly. Mr. Resendez-Ramirez is what it is, a horrific, isolated case. My question to you was whether we have a crisis level such that would warrant preempting in this instance, and I will close on that. Do you have a yes or no to that?
Mr. FLAHERTY. No.
Page 152 PREV PAGE TOP OF DOC Ms. JACKSON LEE. Thank you.
Mr. SMITH. Thank you, Ms. Jackson Lee.
We have been joined by our colleague from Florida, Mr. McCollum; and I will look to my right to see if any individual has questions.
Mr. Pease, the gentleman from Indiana is recognized.
Mr. PEASE. Thank you, Mr. Chairman.
I express my regrets to members of this panel that, as with many of my colleagues, I have been running back and forth to other meetings and I missed most of your presentations, but I am grateful for your presentation. I am grateful for the materials you have provided.
I was here, though, for Mr. Flaherty's presentation; and I wanted to follow up a few things with you. First of all, I should tell you that, in another life, I was vice chairman of NCSL's Committee on Law and Justice, so I am very sensitive to the concerns that you bring to us.
I also confess to you that I think there are three times in my life I have studied my driver's license. Once when I was 16 when I got it, once when I was 21 for other reasons, and today. And I find out that our Sate has my Social Security number right here with my signature right under it. I didn't know that till now. That is another issue for another time. I am very sensitive to powers and prerogatives of States.
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I wanted to address with you the discussion we had in the prior panel on birth certificates and the possibility of standardization of those documents to assist in this overall effort. My inquiry is whether NCSL has addressed that, if you have suggestions on ways it could be appropriately addressed without intruding on the prerogatives of the States and/or local units of government.
Mr. FLAHERTY. Sir, we have not directly addressed the issue of birth certificates, at least either in policy or, in my recollection, in any panel discussions or otherwise. We have focused more clearly in recentin the lastat least in the last year, last couple of years, on how it would affect the States' issuance of the drivers' licenses as opposed to birth certificates.
But we have also heardand one of the other issues is I am sure the county governments would be here talking about that and they should be, and I am sure they are, involved with dealing with the birth certificates or the localities. Because when we do address birth certificates, when we address drivers' licenses, when we go for Social Security cards, we certainly I suppose all are acknowledging the heavy cost involved. One of the things spurring us here today is just that in deciding perhaps not to go for the billion dollar solutions with Social Security and one of those documents, that we don't just focus on spending the least hundreds of millions of dollars putting it on the States' levels with these drivers' licenses.
Mr. PEASE. I understand that and appreciate that. The Department of Health and Human Services has been tasked with addressing this issue on birth certificates. Do you know if HHS has been in consultation with the States on this issue?
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Mr. FLAHERTY. I don't know personally. I am getting a shake of a head, so I guess the answer would be, right now, not to my knowledge, no, sir.
Mr. PEASE. I find that unfortunate. Thank you.
Mr. SMITH. Thank you, Mr. Pease.
The gentleman from California, Mr. Berman.
Mr. BERMAN. Actually, my question is to the chairman.
Mr. Chairman, when we did this section 656 in the 1996 lawI say we inwhat was the purposewhat was the theory behind the value of having the Social Security number on the driver's license?
Mr. SMITH. I would be happy to respond, and it gives me an opportunity to also clarify some of Mr. Flaherty's remarks, which I am sure weren't intentionally misleading but might have been misleading to individuals nonetheless.
The section 656 does not actually mandate that all drivers' licenses have Social Security numbers on them. What it says is, if States are going to use drivers' licenses for purposes of Federal identification to get Federal benefits and so forth, then the drivers' licenses need to have the Social Security number on it for obvious reasons. If you are going to use it as a Federal ID document, you ought to have some type of Federal fail-safe system, in this case the Social Security number. In other words, if a State is not going to allow individuals to use a driver's license for Federal identification purpose to get benefits and so forth, then there is no requirement that the Social Security number be on the driver's license.
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Mr. BERMAN. When you say to get benefits, are you thinking of the applicant for whatever we now call AFDC?
Mr. SMITH. Things like that, exactly. That is exactly right.
Mr. BERMAN. And because there is Federal money in that program that is administered at the county level, the State gets to decide what the eligibility criteria are. One might be the showing of a license to establish the person is a lawful permanent resident.
Mr. SMITH. Right.
Mr. BERMAN. But what ensures that the number on the driver's license is, in fact, the Social Security number of that person as opposed to a Social Security numberthat the person got something else?
Mr. SMITH. That is exactly the heart of much of what we discussed today, and the reason for the witnesses we had today was to try to focus on the need to make that document as well as other documents like the Social Security card more tamper proof and fraudulent resistant.
Mr. BERMAN. I remember when Mr. McCollum justhe just tried to get a feasibility study on a tamper-proof Social Security card. He lost on the House floor.
Page 156 PREV PAGE TOP OF DOC Mr. SMITH. I think that was a couple of years ago, and I think he narrowly lost.
Mr. BERMAN. It was on the 1996 bill. It was on the House floor, and he lost. But then I read somewhere in here that the law mandates a study of the feasibility of a non-forgeable Social Security card. So what did you do? Put it back in conference?
Mr. SMITH. It was needed. Any other questions?
Mr. BERMAN. No. You may step down.
Mr. SMITH. Does that answer your question to me?
Mr. BERMAN. I am just trying to take what Mr. Flaherty and others were saying here.
Right now, the mandate on the States that if you are going to use the Social Security number as an identifier for a State program that seeks to get Federal benefits for individuals, you have to have a Social Security number on the license, there is no reason to believe that it is a particularly valid Social Security number. It is just the Social Security number that the applicant for the driver's license gave to the DMV in that State.
Mr. SMITH. That is correct.
Mr. BERMAN. So it may not really be serving its purpose. Apart from its privacy or identity theft considerations or anything else, it may not really be culling out ineligible people from those benefit programs. I don't know if there is any reaction to that.
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Mr. SMITH. Mr. Flaherty, why don't you respond to Mr. Berman's questions ?
Mr. FLAHERTY. I would be happy to.
As I look at section 656(b), it does indeed, the requirementand I certainly did address that and certainly not my intent to be misleadingin defining the Federal Government saying these documents will be eligible for use for identification to Federal agencies, that was specifically what I was addressing. And the objection that NCSL brings tobasically, I am going home to the State of Connecticut to tell my constituents, you used to be able to use this as a common identifier, but from now on, for Federal agencies, you can't.
And the problem in your question is it does seem almost like the chicken and the eggand these issues are being addressed by the whole panel. But what about that fake Social Security card or birth certificate that is used to get a legitimate driver's license and the whole going back and forth between legitimate documents being used illegitimately and counterfeit documents being used as well? It doesI don't know that there is a clear answer to your question. I think someone can come in with a fake Social Security number and get that document. Our objection is inwe can opt out of it, but then we are opting all of our citizens out of having a Federally acceptable ID.
Mr. BERMAN. My last point is, if it is not serving the interests of culling out ineligible people from Federal programs, it would seem to me one clear side effect of the requirement is that it may cause certain people who need to drive not to seek drivers' licenses and that there are inI know I would rather have an undocumented person passing the driver's license test for their driving than driving unlicensed.
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Mr. SMITH. Thank you, Mr. Berman.
The gentleman from Virginia, Mr. Goodlatte. Okay.
I have a couple more questions, and then we are just going to need to go. My first question is for Mr. Anderson. You looked like you were going to say something, in any case.
Mr. ANDERSON. It is my understanding in 656(b) there is an exception and that is if a State did not elect to put the Social Security number on the licenseeither on the face of the license or on the mag stripe or electronically encoded, it can capture the information, store the information in their record and then verify the Social Security number through the Social Security Administration.
Mr. SMITH. That is a good point and a good answer. It can serve a purpose asand as we found out today just having one more level, one more effort to try to deter the use of fraudulent documents is worth doing even if it is not foolproof and, of course, we hope by interchanging those underlying documents to make it more so.
Mr. Anderson, I want to thank you for coming all the way from Texas. I think you hold the record today for the witness who traveled the farthest.
I also wanted to make a comment on your earlier testimony and ask you a question. The comment goes along the lines of what Mr. Simcox said a while ago looking at a picture beyond just the use of a particular document for a particular use. In the case of the fraudulent driver's license, you pointed out it goes beyond just the driving. The document is illegally used to purchase alcohol and firearms, make illegal welfare applications, drive while suspended or revoked or pursue a variety of other unlawful acts. The cost to the society is tens of billions of dollars per year. So we sometimes don't understand all the ramifications of a single fraudulent document, and it goes far beyond the professed use of that document.
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One question, you mentioned in your prepared statement, though not in that much detail in your verbal statement, about the model program. Give me just some of the highlights of that model program that you think should be implemented.
Mr. ANDERSON. The model program is much the same as Representative Flaherty described is done in his State. In this document we are suggesting that States not take a birth certificate solely to issue a driver's license or identification card, that it would be one of several instruments to be presented to try to give a clearer confirmation the person is who they say they are.
Another thing I would point out in the testimony that I really didn't get too deep into is a project we are working on, an ANSI standard, and in that we have tried to identify as many security features, if you will, overt, covert type features, that can be put on a document to make it more secure. And some of our recommendations would be including as many of those type features in a document as one could to try to make it more secure and then to share that information with other jurisdictions. That would also get into the encoding of a magnetic stripe or bar code and the digital image itself.
Mr. SMITH. Thank you, Mr. Anderson.
By the way, thinking of drivers' licenses and thinking of Mr. Berman's last remark, a little bit off the subject, but it seems absolutelywhat is the wordcounterintuitive to me to give people who are in the country illegally drivers' licenses to make it easier for them to stay in the country to get jobs illegally and so forth. That is another subject for another time but not necessarily unrelated. But thank you for being here today.
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Mr. Flaherty, just a couple of points. You are not opposed to the voluntary use of a Social Security number on a driver's license if an individual is willing to do it, I presume; and you also do not oppose the assignment of a random identification number, personal identification number if it were not Social Security; is that correct?
Mr. FLAHERTY. That is correct, sir.
Mr. SMITH. It is not the idea, it is just that one particular Social Security number. Do youdid you understandin my response to Mr. Berman a minute ago, did you understand the distinction I was making between what you were saying, which sounded like we are mandating Social Security numbers on all drivers' licenses, and my saying we are doing so only if the State is going to use the driver's license to obtain these benefits? In other words, it is not an across-the-board mandate?
Mr. FLAHERTY. I did understand that, sir. I was merely trying to point out what the impact would be of losing that Federal recognition.
Mr. SMITH. I want to make sure you not only understood it but agreed that that was in the law.
Mr. FLAHERTY. I do.
Mr. SMITH. Thank you, Mr. Flaherty.
Page 161 PREV PAGE TOP OF DOC Are there any other questions by any other member? Mr. Pease?
Mr. PEASE. Mr. Chairman, justI think I observed Dr. Martin's body language that she wanted to respond to something I may have said earlier. If I am incorrect, I apologize. If I was, I want to give you the chance.
Mr. SMITH. You are now obligated to respond anyway, I think, Dr. Martin.
Ms. MARTIN. It was the point that Mr. Anderson made. We were just conferring to determinebecause both of us remembered the lawsaying that there would be a check with Social Security in response to Mr. Berman's answer.
Mr. SMITH. Thank you, Mr. Pease.
Thank you, Dr. Martin.
If there are no further questions, thank you all for your contributions today. They are very much appreciated.
[Whereupon, at 12:35 p.m., the subcommittee was adjourned.]
A P P E N D I X
Material Submitted for the Hearing Record
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PREPARED STATEMENT OF HON. SHEILA JACKSON LEE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS
Good Morning Mr. Chairman. First, let me emphasize that the I like you abhor and hate fraud. I do not in any way approve of the fraudulent use of identification cards. However, if these issues are going to be examined, we want them to be examined in a fair and equitable way.
The people who fraudulently use identification documents can and should be punished. This is being done now. An alien at our border who has engaged in document fraud is inadmissible under section 212(a)(6)(C) of the INA. If the alien is in the United States already, he or she is deportable for document fraud under section 237(a)(3)(C) of the INA. In addition, it is unlawful for any person to forge, counterfeit, alter or falsely make any document for immigration related purposes.
Effective measures will be difficult to achieve in any event. It will be pointed out today that the integrity of any verification systemeven a computer-based ''paperless'' onehinges on the security of the documents which underlie it, and such ''breeder'' documents are not secure. The birth certificate is a ''breeder'' document in that it can be used to obtain an identity document such as a U.S. passport, driver's license, military I.D. or social security card.
We need to decide just how far we are willing to go in dealing with this problem. For instance, birth and death records are certain to be used, and the cost of revamping just these record-keeping systems could be exorbitant. The same is true of revising SSA and INS databases. Are we willing to bear the costs of developing and maintaining such gigantic data bases?
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The fight against counterfeiting and fraud should not become a fight against personal privacy that leads to a national ID card. I do not want a national ID card to be demanded of Americans every time they engage in what should be routine activity that can be conducted anonymously and without government intervention.
Technology has played a vital role in advancing freedom around the world, but it also has laid new temptations at the doorstep of government. Once the technology and data base are in place for a system such as a national worker registry, alternative uses for the registry will arise. This temptation can occur every time a new ''national crisis'' emerges: to help fight the war on drugs, to control the spread of disease, to combat terrorism, and so forth.
Congress also must take care to avoid steps that would increase rather than diminish immigration-related discrimination that already has become a feature of our employment system. In response to employer sanctions, many employers have screened out all ''foreign-looking'' or ''accented'' job applicants; have adopted illegal ''citizens-only'' hiring policies; have selectively applied verification procedures only to ''suspect'' employees; have demanded documents before hiring more often of foreign -sounding employees; and have demanded ''more'' or ''better' documents of ''suspect'' employees.
Finally, we also have to be mindful of states' rights. We should not become so aggressive in this area that states are turned into mere tools of the federal government in connection with the identity documents they issue. Thank-you Mr. Chairman.
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PREPARED STATEMENT OF HON. BILL MCCOLLUM, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA
Mr. Chairman, thank you for raising the level of awareness of the fraudulent Social Security card issue via this hearing. I have argued for the need for a more secure Social Security card since the 105th Congress, and am confident close examination will make it clear that it is imperative we make the Social Security card more tamper-resistant and less susceptible to fraudulent use. Eliminating Social Security document fraud is a vital first step in controlling our borders and stopping illegal immigration. It is simply unacceptable that the one document that is most commonly used to prove eligibility for employmentthe Social Security cardis nothing more than a paper document that is easily counterfeited. As it stands, an illegal alien wanting a Social Security card can go to a street corner and purchase a fake for as little as $30.
So, let me discuss why we need to improve the Social Security card. This is of the utmost importance for two fundamental reasons: 1) it reduces the incentive for illegal aliens to come to the U.S. by making it more difficult for them to get a job and 2) it makes it easier for employers to comply with existing law by making employment authorization documents more reliable. It is that simple.
The only way to control the crisis of illegal immigration is to eliminate the lure of employment. The 1986 Immigration Reform and Control Act created employer sanctions, making it illegal to knowingly hire an illegal alien. That law requires everyone seeking employment in the U.S. to produce evidence of eligibility to work. The most commonly used form of verification is the combination of a driver's license with the Social Security card. These reforms were well intentioned but a decade later, it is clear that fraudulent documents have weakened the impact.
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One of the primary reasons that employer sanctions are not working today is the rampant fraud in the documents used to prove eligibility to work, including the Social Security card. As long as the Social Security card can be easily counterfeited, employer sanctions will not work. The fact that illegal aliens can easily counterfeit authorization documents undermines this important law and the lure of easy jobs continues to pull illegal aliens into this country.
Why should we be concerned if employer sanctions are not working? There are more than 4 million illegal aliens in the U.S. today, with the number increasing each year by the hundreds of thousands. Illegal aliens come to the U.S. for one reasonjobs. Even if the southwest border were sealed, it would not solve the illegal immigration problem. It has been estimated that nearly 50% of illegal aliens are here because they entered on legal temporary visas and did not leave.
The only way to stop illegal aliens from coming, through the border or otherwise, is to eliminate the magnet of jobs. The only way to do that is to make employer sanctions work. An upgrade in the Social Security card will put teeth back into employer sanctions, reducing the magnet of jobs and therefore the flow of illegal aliens.
An upgrade in the Social Security card should also aid employers who obey the law and play by the rules. The most conscientious employer can still lose employees if the I.N.S. determines documents to be fraudulent. This costs time and money to the employer to rehire and retrain employees. The employer may also be subject to other punishments and fines. My legislation would direct the Commissioner of Immigration and Naturalization, in consultation with the Commissioner of Social Security, to conduct a comprehensive campaign to inform employers about the security features of the new secured Social Security card and the detection of counterfeit or fraudulent cards.
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My legislation would require a simple upgrading of the Social Security card. This would replace today's card with one that offers the best possible security against counterfeiting, forgery, alteration and fraudulent use. H.R. 191 would require the Commissioner of the Social Security Administration to make such improvements to the Social Security account number card as are necessary to make it as secure against counterfeiting as the 100 dollar bill and as protected against fraudulent use as the United States passport. I chose these performance standards because of the many counterfeit-resistance features that are built into these two documents, including the type of paper, watermarks, background pattern of inks and security threads.
Some opponents argue that the currently-issued Social Security cards are already counterfeit proof. Even if this were true, there is still the problem with the millions of old Social Security cards, which are particularly easy to forge, still being used. SSA itself notes that there are over 40 versions of the Social Security card still in use and still considered valid. It is indisputable that there is a cottage industry in this country which churns out fake identifications, including Social Security cards, for use by illegal aliens. Even putting aside concerns about illegal immigration, we in Congress simply cannot and should not turn a blind eye to rampant counterfeiting of an official government document and do nothing to prevent it.
With this legislation, the Commissioner of Social Security would be required to offer more than a bare assertion concerning the card's security. This legislation directs the Comptroller General to perform an annual audit regarding the progress and status of developing a secured social security account number card, the incidence of counterfeit production and fraudulent use of social security account number cards, and the steps being taken to detect and prevent such counterfeiting and fraud.
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The legislation also provides that, beginning on January 1, 2006, any Social Security card that is used for employer sanctions purposes, i.e., to show that an individual is eligible to work in the U.S., must be one of the new, secured Social Security cards. By a date certain we need an improved Social Security card to be the only Social Security card acceptable for employer sanctions. Other documents, such as the passport, would still be acceptable. This would make the older, easy to counterfeit cards, worthless to illegal aliens.
In the past, the SSA argued that this would involve a huge cost but SSA's cost estimate was based on the erroneous assumption that everyone would demand a new Social Security card. This assumption failed to take into consideration that the use of the Social Security card in seeking employment is permissive, not mandatory, and that people would be able to use other documents. Last year, a preliminary CBO estimate scored this proposal at an average annual cost of $51 million over ten years. The cost will decline each year after 2006 as fewer and fewer replacement cards are issued. This cost estimate does not even take into account savings from reduced illegal immigration and reduced welfare fraud which will occur when there is a more tamper-resistant Social Security card.
In addition, according to the SSA's own estimate, they issue 10 million replacement Social Security cards each year. Using that figure, more than half of all Social Security cards for American workers will have been replaced by 2006, the year when this legislation would require Social Security cards used for employer sanctions to be secure Social Security cards. Replacing the remainder as people need them is not an insurmountable challenge. On the contrary, it is a manageable challenge that goes after immigration and welfare fraud and promotes efficient use of government resources.
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Some have argued that we should do nothingabsolutely nothingto make the Social Security card more tamper proof because it will not solve the problem of fraudulent breeder documents, such as birth certificates. But even if we did solve the problem of fraudulent breeder documents, we would still have to contend with fake Social Security cards because these cards are being made and purchased in order to avoid going through SSA for a Social Security card. Why not buy a fake Social Security card on the street instead of risking detection through the SSA with breeder documents? If everyone who wants a fraudulent Social Security card has to go through the SSA application process, it will increase both the costs and risks associated with acquiring a false card. My legislation is not a cure-all but it is a necessary component of a multi-faceted effort to reduce document fraud and illegal immigration.
Let me make it clear that this is NOT a national ID card. There are no fingerprints, no retina scans, no magnetic strips or any of the other parade of horribles that have been used to inject confusion and fear into the debate. In fact, this legislation would do exactly the opposite and explicitly prevent any attempt to make the Social Security card a national ID card. This legislation specifies that these new cards cannot be required to be carried upon one's person and nothing in the legislation authorizes the establishment of any new databases. It is there in black and whitethis is NOT A NATIONAL IDENTIFICATION CARD.
Contrary to what is being said by opponents, in making the card more tamper-resistant, the government gains no new information and the card would be used no differently that it is now. Under current law, the Social Security card already may be used to prove eligibility to work when a person seeks a job. Current law also requires an employer to examine the document itself, not just get the number. The legislation I have introduced does not require any new information from individuals, does not require anyone to get a Social Security card and does not require that anyone even use a Social Security card. My bill would simply ensure that the Social Security card is worth the paper it is printed on. A simple upgrade in the quality of the material used to produce the card is not a first step towards anything except document integrity.
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Opposition tactics had an effect during the last session of Congress. The House choseby an extremely close votenot to adopt an amendment to require improvements to the Social Security card. The issue will not go away, though, because the problem remains. Until we institute effective controls, we will continue to receive hundreds of thousands of illegal aliens each year.
Immigrants bring growth, creativity and opportunity to America. They are the cornerstone of much of our great nation's cultural heritage. Immigration should once again be seen as a noble experience that enriches Americaboth economically and culturallyrather than one demeaned by criminality and deceit. To accomplish this, we must make employer sanctions work and cut off the magnet of jobs. Adopting measures, such as a secure Social Security card, to reduce document fraud is the first pivotal step that must be taken.
If we do nothing and continue to allow the use of the Social Security card without making it tamper-resistant, fraud will remain rampant, employer sanctions will not work, and the country will continue to be overrun by illegal aliens. H.R. 191 is a modest proposal to ensure that the SSA uses the latest inking and anti-counterfeiting mechanisms now used on paper issued in the form of the $100 bill and the U.S. passportboth of which boast extremely low rates of fraud. These would be specific, clearly outlined performance standards. In 9 years or so, only such an upgraded card would qualify as a Social Security card for the purposes of confirming employment eligibility. These modest steps are the least we can do to stop the unrivaled wave of illegal immigration hitting our nation.
I look forward to the comments from our guests from the Social Security Administration and the General Accounting Office on this issue and my legislation, and also to working with them on this important matter in the future.
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PREPARED STATEMENT OF HON. RON PAUL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS
Mr. Chairman, I appreciate the opportunity to express my concerns regarding the counterfeiting and misuse of Social Security numbers and state and local identity documents. While the use of fraudulent social security cards, drivers' licenses, and other identifiers to obtain benefits is a problem, I am concerned that some proposed solutions will only serve to subject the American people to an even greater level of government control.
For example, Section 656 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 attempts to address this problem by authorizing the establishment of federal standards for birth certificates and drivers' licenses in order to create ''tamper-proof'' identifiers. I have introduced legislation, the Privacy Protection Act (HR 2337) to repeal Section 656 because the practical effect of this provision is to transform state drivers' licenses into national ID cards.
Mr. Chairman, I am aware that there is some controversy over whether or not this provision truly establishes a national ID card, however, section (b) part 1 subsection (A) of the bill states that ''a federal agency may not accept for any identification-related purpose a driver's license, or other comparable identification document, issued by a State, unless the license or document satisfies the requirements established by the act.''
As a result of this provision no American will be able to get a job; open a bank account; apply for Social Security or Medicare; exercise their Second Amendment rights; or even take an airplane flight unless they can produce a state drivers' license, or its equivalent, that conforms to federal specifications. Thus, regardless of the intentions of its drafters, the clear effect of Section 656 is to create a national ID card!
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Mr. Chairman, the Federal Government has no constitutional authority to require Americans to present any form of identification before engaging in any private transaction such as opening a bank account, seeing a doctor, or seeking employment. Any uniform, national system of identification would potentially allow the federal government to inappropriately monitor the movements and transactions of every citizen. History shows that when government gains the power to monitor the actions of the people, it eventually uses that power to impose totalitarian controls on the populace.
Section 656 not only violates the rights of individuals, it tramples the authority of the states to set their own standards for drivers' licenses and imposes tremendous costs on the statesin possible violation of federal law! According to the National Conference of State legislators, the cost of compliance with section 656 could exceed the $100 million threshold for unfunded mandates established by the Unfunded Mandate Reform Act (UMRA).
A particularly invasive provision of Section 656 is the requirement that states' display an individual's social security number on drivers' license or go through the burdensome and invasive procedures to check each individual's identity with the Social Security Administration. This will greatly expand the dissemination and misuse of the SSN. Mr. Chairman, there is no justification for the Federal Government to put individuals at risk of unscrupulous persons securing and using their SSN!
Instead of attempting to deal with the problem of the use of fraudulent identifiers by endangering the liberty and the safety of the American people, Congress should consider decentralizing the provision of identifiers. Inefficiency, fraud and abuses of civil liberty are inevitable when the federal government presumes to determine what is an acceptable identifier for every citizen in the nation.
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Mr. Chairman, in conclusion, I wish to remind my colleagues that in a constitutional republic the first responsibility of a legislature is to protect the liberty of its citizens. Therefore, we must reject all proposals which deal with the problem of fraudulent identity documents that endanger the liberties of the American people, impose mandates on the state government, or enhance the ability of criminals to prey on innocent citizens. I once again thank the Committee for it's consideration of my views.
(Footnote 1 return)
P.L. 99603, 8 U.S.C. 1324a et seq.
(Footnote 2 return)
Attachment I lists the 27 acceptable documents.
(Footnote 3 return)
Immigration Reform: Employer Sanctions and the Question of Discrimination (GAO/GGD9062, March 29, 1990).
(Footnote 4 return)
(Footnote 5 return)
P.L. 104208, 110 Stat. 3009719.
(Footnote 6 return)
Attachment II contains a table showing the enhanced card options and associated costs for issuing them to all number holders.
(Footnote 7 return)
Social Security: Mass Issuance of Counterfeit-Resistent Cards Expensive, but Alternatives Exist (GAO/HEHS98170, Aug. 20, 1998).