Identification Document Fraud

By Rosemary Jenks May 1997

Testimony prepared for the U.S. House of Representatives
Committee on the Judiciary
Subcommittee on Immigration, Border Security, and Claims
May 13, 1997

By Rosemary Jenks
Senior Fellow, Center for Immigration Studies


Mr. Chairman and Members of the Subcommittee, I am Rosemary Jenks, a Senior Fellow at the Center for Immigration Studies, a non-profit, non-advocacy research institution. I have been asked to appear before you today to discuss Congressman McCollum's bill, H.R. 231, to improve the integrity of the social security card and to apply the same criminal penalties for identification document fraud to work authorization document fraud. Before I talk about the specifics of H.R. 231, however, I would like to provide some background on why secure identification is critical both to law enforcement efforts and to the protection of individual rights in the United States.

It is fitting that this hearing is today, during the month that marks the ten-year anniversary of the implementation of the 1986 Immigration Reform and Control Act (IRCA), which first established sanctions for employers who knowingly hire aliens unauthorized to work in the United States. Ten years ago, Congress promised the American people that, in exchange for an amnesty for illegal immigrants already living in this country, the U.S. government would control future illegal immigration through increased border control resources and enforcement of employer sanctions. Immigration experts agreed then, as they do now, that illegal immigrants come to the United States for one primary reason: jobs. Thus, it was clear then, as it is now, that border controls alone would not halt illegal immigration as long as jobs were still available to illegal immigrants. Moreover, border controls would do nothing to deter those immigrants who entered the United States on legal temporary visas and then overstayed.

While IRCA's amnesty provisions resulted in the granting of legal residence status and all the ensuing benefits to almost three million illegal immigrants, the increased border control resources did not materialize. Employer sanctions, while credited with a decline in apprehensions immediately following IRCA's passage (primarily because of would-be illegal immigrants' fear of enforcement efforts, rather than actual enforcement), clearly have not served as a significant deterrent to illegal immigration.

The Immigration and Naturalization Service (INS) estimates that the stock illegal immigrant population in the United States at the beginning of FY 1997 had reached five million--about the same level as it was before the 1986 amnesty--and was growing by about 275,000 each year. Most economists and immigration experts agree that large-scale illegal immigration, which is comprised mainly of people with low education levels and few job skills, is contributing to the rapid expansion of the low-skilled labor market and, thus, increased competition for low-skilled, entry-level jobs. As a result, wages in low-skilled industries continue to stagnate or decline. Some occupations that used to provide workers with middle-class incomes now pay poverty-level wages. In 1990, 18 percent of all full-time workers were paid wages too low to keep a family of four above the poverty level--that figure was 12.1 percent in 1979.

Working conditions in some industries, such as agriculture, are as bad as or worse than they were in 1986. The U.S. garment industry is experiencing a resurgence of sweatshop conditions. A 1994 General Accounting Office (GAO) report concluded that "Sweatshop working conditions remain a major problem in the U.S. garment industry, according to the experts contacted. They say working conditions, in many cases, have worsened over the last few years. In general, the description of today's sweatshops differs little from that at the turn of the century."1 According to an article in the Washington Post on February 16, 1997, "The return of the kind of sweatshops that flourished early this century--and were thought to have been largely eliminated--reflects fundamental changes in the garment industry and, more broadly, in American society," including "increasing waves of legal and illegal immigration since the 1970s."

Why have employer sanctions failed to deter illegal immigration? There are two main reasons:

1) Enforcement of employer sanctions has not been a top priority of the INS. Many employers recognize that the chances are very small that the INS will ever find out if they employ illegal immigrants. Other employers are willing to risk sanctions as simply another cost of doing business. Employer sanctions cannot act as a serious deterrent until it becomes clear to employers that the law will be enforced consistently and aggressively and that the penalties are significant enough to make the risk of sanctions unacceptable.

The INS over the past several years has expanded significantly its Telephone Verification System (TVS), which allows employers to verify the work eligibility of new noncitizen hires. Poultry processing plants, meat packing plants, hotels, and a variety of other industries, including the Florida state government, are taking part in the TVS. However, this system has two major downfalls: first, participation is voluntary, so employers who knowingly hire illegal immigrants are not going to participate; and second, verification only takes place if a new employee says he or she is a noncitizen, so aliens using fraudulent birth certificates, for example, are not screened out.

While the INS should be commended for moving forward with the TVS, it must also be encouraged to improve its employer sanctions enforcement activities. As the chart below indicates, employer sanctions cases investigated by the INS were at an all-time low in FY 1996.

INS Employer Sanctions Activities (FY 1990- FY 1996)
FY 1990
FY 1991
FY 1992
FY 1993
FY 1994
FY 1995
FY 1996
Total Case
14,311
10,463
8,868
8,309
7,643
5,963
5,211
Total Fine Cases
2,242
2,184
2,447
1,761
1,314
1,427
1,024
Total Warnings
2,644
1,444
1,262
1,094
858
742
669
Total Amt. of NIFs*
$18.5
$12.8
$17.0
$11.2
$10.9
$10.4
$12.6
Total Amt. of FOs**
$8.1
$5.3
$6.0
$5.4
$4.5
$5.1
$3.6
Total Fines Collected
$5.8
$5.0
$6.2
$5.2
$4.7
$4.1
$4.9

* NIF = Notice of Intent to Fine
** FO = Final Orders
Monetary amounts represented in millions of dollars.
Source: INS

2) The second, and most important, reason employer sanctions have not worked effectively is that, in the words of Dr. Demetrios Papademetriou of the Carnegie Endowment, there is "at least one fundamental weakness in the law: the lack of a reliable means of identifying persons entitled to work in the United States, i.e., the absence of a work authorization system enabling employers to establish reliably a new employee's identity and work eligibility."2

The 1986 law required new employees to present an employer any of dozens of documents to establish identity and/or work authorization, including naturalization certificates, social security cards and birth certificates, all of which can be easily counterfeited or obtained fraudulently. This requirement spurred a multi-million dollar industry in fraudulent documents virtually overnight. A 1988 GAO review of INS records in five states found that about 40 percent of aliens apprehended at work used or were suspected of using fraudulent documents.3 As alien smuggling increased in the late 1980s, smugglers began to include in their "package deals" not only custom-made fraudulent travel documents, but also work authorization documents. Several current and former Members of Congress, including Sen. Feinstein and former Sen. Simpson, have successfully purchased the fraudulent documents they would need to establish work eligibility--generally, a driver's license and a social security card.

Last year's illegal immigration law reduced the number of documents acceptable for employer sanctions purposes by eliminating naturalization and other citizenship certificates and birth certificates from the list. Since these are probably the most easily counterfeited documents, their elimination is a step in the right direction. The current social security card, however, is not far behind in terms of ease of fraudulent reproduction. With a social security card and a birth certificate, an individual can obtain a legal state driver's license or non-driver identification card and so have documents that will meet the requirements for proving identity and work eligibility.

Even under this new law, those employers not participating in one of the voluntary work eligibility verification pilot programs still will be forced to do a balancing act between charges of discrimination if they request additional documents when they suspect fraud, on the one hand, and fines by the INS if they accept documents they suspect may be fraudulent, on the other. The only system that would be fair both to employers and to employees is one that gives employers a reliable way to verify work eligibility without having to judge the integrity of the documents produced and one that requires employers to verify the eligibility of all new hires--not just those who say they are noncitizens or who may look or sound like noncitizens.

A secure social security card that can be verified easily is the most logical option for such a system. The Social Security Administration (SSA) operates the oldest and largest data base, and so has the greatest experience in managing massive amounts of data. Its field offices throughout the country give it the presence at the local level that is needed to administer such a system. The social security number is already used as a universal identifier at all levels of government and in the private sector, and employees already must provide employers with a social security number. The SSA currently is working with state motor vehicle administrations to verify social security numbers, a process that greatly enhances the integrity of state-issued driver's licenses and id cards. Most Americans would not be troubled by the upgrading and reissuance of the social security card, and in many cases, they may even find it reassuring.

Enhanced enforcement of U.S. immigration laws is not the only benefit of a secure social security card. Countless criminals evade authorities by using aliases. In many cases, they make up names and social security numbers and have supporting identification documents made. In other cases, they take names off tombstones and send in to local authorities for the deceased's birth certificate. There are also countless stories of Americans whose identities have been stolen and whose financial standings have been destroyed by criminals who usurped their social security numbers. For example:

A New York area physician learned that an imposter had opened bank and medicaid provider accounts in his name, billed the government for $250,000 for fictitious services, and forged the payment checks.

A Ph.D. speech therapist learned that an imposter had used her social security number to obtain certified copies of her university transcripts. The imposter then used her name and professional credentials to open a clinic, at which substandard therapy was provided.

A California mother found out that an imposter had stolen the identity of her daughter, who had died in an accident at the age of five, more than 50 years earlier.

Another California resident misplaced his driver's license. He went to get another one, but an imposter had beat him to it. The imposter went on to ruin his credit line.

A brother and two sisters in California discovered, after their identification documents had been stolen, that they had each been "married" to an illegal immigrant.

The SSA in the past has argued against the use of the social security card for identity purposes, but the reality is that it is already used for identity purposes in all walks of life. It has estimated the cost of producing a tamper-resistant social security card with a magnetic strip (which is not required under H.R. 231) at about $2.5 billion. While this is a large sum, it must be placed in context. If you add up the costs of crimes committed by people using fraudulent names and social security cards to evade authorities, the costs of illegal immigration (just the cost of educating the children of illegal immigrants is estimated at between $2.3 billion and $5.9 billion annually), and the costs to Americans whose identities are stolen, you come up with a far greater figure than the one time cost of $2.5 billion. Moreover, some of this money could be recovered by SSA if a small fee were charged for replacement social security cards.

H.R. 231's provisions to extend criminal penalties for the fraudulent use and counterfeiting of identification documents to work authorization documents send an important message, both to criminals and to American workers. Fraudulent document producers, suppliers and users should realize that there are serious consequences to violating U.S. law. U.S. citizen and legally resident workers should be reassured that the U.S. government is serious about protecting their jobs, their wages and their working conditions. These provisions should be noncontroversial.

Conclusion
America has waited ten years for the promise of IRCA to be realized. Last year's immigration law went a long way toward that goal by authorizing increased border control resources, increased employer sanctions resources, and employment eligibility verification pilot programs. The need for a secure verification system to control illegal immigration will become more urgent over the next couple of years as the new welfare law is implemented and an estimated two million welfare recipients begin the search for employment. Most of these people will require the same kind of low-skilled, entry-level jobs now sought or occupied by illegal immigrants. It is not fair to force Americans and legal residents off welfare only so they can compete with illegal immigrants for these jobs, because the U.S. government is unwilling to do what is necessary to control unauthorized employment. The development of a secure social security card represents yet another step toward realizing the promise of IRCA, protecting legal workers, and reducing the ease with which criminals can evade the law by using false identities or usurping the identities of others.

Thank you for the opportunity to appear before you today. I would be happy to answer any questions you may have.


1 U.S. General Accounting Office, Garment Industry: Efforts to Address the Prevalence and Conditions of Sweatshops, GAO/HEHS-95-29 (November, 1994).

2 Papademetriou, Demetrios, in testimony before the House Subcommittee on International Law, Immigration, and Refugees of the House Judiciary Committee, June 16, 1993.

3 U.S. General Accounting Office, Immigration Reform: Status of Employer Sanctions After the Second Year and Plans for the Third Year, GAO/T-GGD-82-24 (May 17, 1989).