[House Hearing, 107 Congress]
[From the U.S. Government Printing Office]



 
SOCIAL SECURITY ADMINISTRATION'S RESPONSE TO THE SEPTEMBER 11 TERRORIST 
                                ATTACKS

=======================================================================

                                HEARING

                               before the

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            NOVEMBER 1, 2001

                               __________

                           Serial No. 107-50

                               __________

         Printed for the use of the Committee on Ways and Means




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                      COMMITTEE ON WAYS AND MEANS

                   BILL THOMAS, California, Chairman

PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
E. CLAY SHAW, Jr., Florida           FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut        ROBERT T. MATSUI, California
AMO HOUGHTON, New York               WILLIAM J. COYNE, Pennsylvania
WALLY HERGER, California             SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana               BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan                  JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota               GERALD D. KLECZKA, Wisconsin
JIM NUSSLE, Iowa                     JOHN LEWIS, Georgia
SAM JOHNSON, Texas                   RICHARD E. NEAL, Massachusetts
JENNIFER DUNN, Washington            MICHAEL R. McNULTY, New York
MAC COLLINS, Georgia                 WILLIAM J. JEFFERSON, Louisiana
ROB PORTMAN, Ohio                    JOHN S. TANNER, Tennessee
PHIL ENGLISH, Pennsylvania           XAVIER BECERRA, California
WES WATKINS, Oklahoma                KAREN L. THURMAN, Florida
J.D. HAYWORTH, Arizona               LLOYD DOGGETT, Texas
JERRY WELLER, Illinois               EARL POMEROY, North Dakota
KENNY C. HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin








                     Allison Giles, Chief of Staff

                  Janice Mays, Minority Chief Counsel

                                 ______

                    Subcommittee on Social Security

                    E. CLAY SHAW, Florida, Chairman

SAM JOHNSON, Texas                   ROBERT T. MATSUI, California
MAC COLLINS, Georgia                 LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona               BENJAMIN L. CARDIN, Maryland
KENNY C. HULSHOF, Missouri           EARL POMEROY, North Dakota
RON LEWIS, Kentucky                  XAVIER BECERRA, California
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin










Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.







                            C O N T E N T S

                               __________
                                                                   Page
Advisories announcing the hearing................................     2

                               WITNESSES

Social Security Administration, Larry G. Massanari, Acting 
  Commissioner, accompanied by Beatrice M. Disman, New York 
  Regional Commissioner, and Laurie Watkins, Acting Philadelphia 
  Regional Commissioner..........................................    18
Social Security Administration, Office of the Inspector General, 
  Hon. James G. Huse, Jr., Inspector General.....................    46
Kelly, Hon. Sue W., a Representative in Congress from the State 
  of New York....................................................     8

                        STATEMENT FOR THE RECORD

ERISA Industry Committee (ERIC), Mark J. Ugoretz, and Janice M. 
  Gregory, letter................................................    66






SOCIAL SECURITY ADMINISTRATION'S RESPONSE TO THE SEPTEMBER 11 TERRORIST 
                                ATTACKS

                              ----------                              


                       THURSDAY, NOVEMBER 1, 2001

                  House of Representatives,
                       Committee on Ways and Means,
                           Subcommittee on Social Security,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:00 a.m., in 
room 2200 Rayburn House Office Building, Hon. E. Clay Shaw, 
Jr., (Chairman of the Subcommittee) presiding.
    [The advisory and the revised, revised #2, and revised #3 
advisories follow:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                                CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
October 11, 2001
No. SS-9

                     Shaw Announces Hearing on the

               Social Security Administration's Response

                 to the September 11 Terrorist Attacks

    Congressman E. Clay Shaw, Jr., (R-FL), Chairman, Subcommittee on 
Social Security of the Committee on Ways and Means, today announced 
that the Subcommittee will hold a hearing on the Social Security 
Administration's response to the September 11 terrorist attacks. The 
hearing will take place on Thursday, October 18, 2001, in room B-318 
Rayburn House Office Building, beginning at 10:00 a.m.

    In view of the limited time available to hear witnesses, oral 
testimony at this hearing will be from invited witnesses only. However, 
any individual or organization not scheduled for an oral appearance may 
submit a written statement for consideration by the Subcommittee and 
for inclusion in the printed record of the hearing.

BACKGROUND:

    Social Security survivor and disability benefits are available for 
the families of those who lost their lives and to those who suffered 
severe injuries as a result of the terrorist attacks at the World Trade 
Center, the Pentagon, and in Pennsylvania on September 11, 2001. The 
Social Security Administration (SSA) established special emergency 
handling procedures for all claims in response to these incidents. The 
number of related claims continues to grow with over 3,150 claims 
received through October 1. The SSA personnel continue to staff family 
assistance centers at the site of the Pentagon attack and in both 
Manhattan and New Jersey. In order to facilitate claims-taking, and to 
educate victims and their families about Social Security's benefits, 
SSA is continuing its outreach efforts to area hospitals and employers.

    Along with helping victims and their families, SSA has faced 
certain operational impacts in the greater Manhattan area. Most 
affected offices have resumed operations, and those disability hearings 
which were postponed are being rescheduled. The New York Disability 
Determination Service Director is awaiting permission to recover an 
estimated 15,000 case folders from their office located a quarter-block 
from the World Trade Center.

    Beyond responsive service delivery, ensuring the integrity of 
Social Security's programs can play a role in the prevention of any 
future terrorism. Identification documents are critically important to 
terrorists, and the key to such documents is the Social Security number 
(SSN). The integrity of the SSN application process must be ensured to 
the maximum degree possible because of the fundamental role it can play 
in helping unscrupulous individuals steal identities and obtain false 
identification documents. In addition, SSA's Office of the Inspector 
General must have the support it needs to effectively investigate fraud 
and SSN misuse, quickly and accurately identify suspects--including 
those who may be suspected of terrorism, and share needed information 
with other law enforcement.

    In announcing the hearing, Chairman Shaw stated: ``SSA employees 
are to be commended for their responsiveness to the victims of the 
terrorist attacks of September 11 and for their ongoing assistance in 
the resulting Federal investigations of these heinous crimes. We must 
focus now on what we can do to protect the integrity of the Social 
Security programs and deter future incidents. Early reports that the 
hijackers have stolen others' identities to evade and frustrate law 
enforcement officials highlight our challenge to prevent identity 
theft, that often centers around the stealing of SSNs. The bipartisan 
'Social Security Number Privacy and Identity Theft Prevention Act' 
(H.R. 2036), introduced earlier this year, restricts the sale and 
public display (including internet) of SSNs by both the public and 
private sector and enforces such restrictions through civil and 
criminal penalties. Through this hearing, we will hear whether we need 
to do more.''

FOCUS OF THE HEARING:

    During the hearing, witnesses will provide information on how the 
SSA has served the victims and families of the terrorist acts, how 
operations have been impacted, and how the agency has supported 
resulting Federal investigations. In addition, witnesses will discuss 
the degree to which changes may be needed within the agency and the law 
to ensure the integrity of Social Security programs.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

    Any person or organization wishing to submit a written statement 
for the printed record of the hearing should submit six (6) single-
spaced copies of their statement, along with an IBM compatible 3.5-inch 
diskette in WordPerfect or MS Word format, with their name, address, 
and hearing date noted on a label, by the close of
business, Thursday, November 1, 2001, to Allison Giles, Chief of Staff, 
Committee on Ways and Means, U.S. House of Representatives, 1102 
Longworth House Office Building, Washington, D.C. 20515. If those 
filing written statements wish to have their statements distributed to 
the press and interested public at the hearing, they may deliver 200 
additional copies for this purpose to the Subcommittee on Social 
Security office, room B-316 Rayburn House Office Building, by close of 
business the day before the hearing.

FORMATTING REQUIREMENTS:

    Each statement presented for printing to the Committee by a 
witness, any written statement or exhibit submitted for the printed 
record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or 
exhibit not in compliance with these guidelines will not be printed, 
but will be maintained in the Committee files for review and use by the 
Committee.

    1. All statements and any accompanying exhibits for printing must 
be submitted on an IBM compatible 3.5-inch diskette in WordPerfect or 
MS Word format, typed in single space and may not exceed a total of 10 
pages including attachments. Witnesses are advised that the Committee 
will rely on electronic submissions for printing the official hearing 
record.

    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.

    3. A witness appearing at a public hearing, or submitting a 
statement for the record of a public hearing, or submitting written 
comments in response to a published request for comments by the 
Committee, must include on his statement or submission a list of all 
clients, persons, or organizations on whose behalf the witness appears.

    4. A supplemental sheet must accompany each statement listing the 
name, company, address, telephone and fax numbers where the witness or 
the designated representative may be reached. This supplemental sheet 
will not be included in the printed record.

    The above restrictions and limitations apply only to material being 
submitted for printing. Statements and exhibits or supplementary 
material submitted solely for distribution to the Members, the press, 
and the public during the course of a public hearing may be submitted 
in other forms.
      

    Note: All Committee advisories and news releases are available on 
the World Wide Web at ``http://waysandmeans.house.gov/''.
      

    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.

                * * * NOTICE--HEARING POSTPONEMENT * * *

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                                CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
October 11, 2001
No. SS-9-Revised

                Postponement of Subcommittee Hearing on

            the Social Security Administration's Response to

                   the September 11 Terrorist Attacks

                       Thursday, October 18, 2001

    Congressman E. Clay Shaw, Jr., (R-FL), Chairman of the Subcommittee 
on Social Security of the Committee on Ways and Means, today announced 
the Subcommittee hearing on the Social Security Administration's 
response to the September 11 terrorist attacks, previously scheduled 
for Thursday, October 18, 2001, at 10:00 a.m., in room B-318 Rayburn 
House Office Building, has been postponed and will be rescheduled at a 
later date.

                                


                * * * NOTICE--HEARING RESCHEDULED * * *

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                                CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
October 25, 2001
No. SS-9-Revised #2

                       Rescheduled Hearing of the

                 Subcommittee on Social Security on the

               Social Security Administration's Response

                 to the September 11 Terrorist Attacks

                       Thursday, November 1, 2001

    Congressman E. Clay Shaw, Jr., Chairman of the Subcommittee on 
Social Security of the Committee on Ways and Means, today announced 
that the Subcommittee hearing on the Social Security Administration's 
response to the September 11 terrorist attacks previously scheduled for 
Thursday, October 18, 2001, will now be held on Thursday, November 1, 
2001, at 10:00 a.m., in room B-318 Rayburn House Office Building.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please note: Due to the change in House mail policy, any person or 
organization wishing to submit a written statement for the printed 
record of the hearing should contact the Subcommittee on Social 
Security at (202) 225-9263 by the close of business, Thursday, November 
15, 2001. Those filing written statements who wish to have their 
statements distributed to the press and interested public at the 
hearing should contact the Subcommittee on Social Security at (202) 
225-9263 by close of business the day before the hearing.
      
    All other details for the hearing remain the same. (See 
Subcommittee Advisory No. SS-9, dated October 11, 2001.)

                                


                 * * * NOTICE--CHANGE IN LOCATION * * *

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                    SUBCOMMITTEE ON SOCIAL SECURITY

                                                CONTACT: (202) 225-9263
FOR IMMEDIATE RELEASE
October 31, 2001
No. SS-9-Revised #3

                           Change in Location

                    for Subcommittee Hearing on the

               Social Security Administration's Response

                 to the September 11 Terrorist Attacks

    Congressman E. Clay Shaw, Jr., (R-FL), Chairman, Subcommittee on 
Social Security of the Committee on Ways and Means, today announced 
that the Subcommittee hearing on the Social Security Administration's 
response to the September 11 terrorist attacks, previously scheduled 
for Thursday, November 1, 2001, at 10:00 a.m., in room B-318 Rayburn 
House Office Building, will now be held in room 2200 Rayburn House 
Office Building.
      
    All other details for the hearing remain the same. (See 
Subcommittee Advisory No. SS-9, dated October 11, 2001, and No. SS-9-
Revised #2, dated October 25, 2001.)

                                


    Chairman Shaw. Good morning. I want to thank the Foreign 
Affairs Committee for allowing us to use their room. I think it 
is quite appropriate because of the subject of the hearing that 
we have this morning.
    Today we focus on the Social Security Administration's 
(SSA's) response to the tragic events of September 11. As we 
mourn the loss of so many Americans, the best of our great 
Nation have stepped forward to assist those injured and the 
families of those who were lost. Many of the victims were 
eligible for Social Security survivor or disability benefits, 
and employees of the Social Security Administration responded 
with urgency, dedication, and with great compassion.
    Today the Acting Commissioner of Social Security will 
detail the Administration's diligent efforts to respond to the 
victims of those heinous attacks. And also this morning the 
Inspector General (IG), Jim Huse, will discuss how the theft of 
Social Security numbers may have helped harbor terrorists in 
our own country.
    Countless hours of investigations by IG agents have 
provided key identifying information on these terrorists and 
their networks. Law enforcement officers, local police, Federal 
Bureau of Investigations (FBI), Secret Service, and Social 
Security Administration Office of Inspector General have worked 
in concert since the attack to identify the terrorists, their 
enabling thugs, and others who are suspect.
    The events of September 11 have changed all of us, perhaps 
forever. Yet our resolve to respond is unyielding, and we learn 
today more about the terrorists' methods. Investigations have 
found that some of the terrorists assumed identities using 
Social Security numbers (SSNs) to execute their plans and to 
frustrate law enforcement efforts.
    The activities of the terrorists highlight the need for us 
to be vigilant in ensuring the integrity of the Social Security 
number application process, protecting the privacy of Social 
Security numbers, and preventing identity theft.
    This year, I, along with several of my Committee 
colleagues, introduced H.R. 2036, the Social Security Number 
Privacy and Identity Theft Prevention Act of 2001. This 
bipartisan bill represents a balanced approach to protecting 
the privacy of Social Security numbers while allowing for their 
legitimate use. It restricts the sale and public display of 
Social Security numbers by both the public and private sector 
and enforces such restrictions through civil and criminal 
penalties. Passage of this legislation would be a step in the 
right direction. Today we will learn whether there is more that 
we can do.
    Social Security is called upon after a crisis to assist 
victims, and this role is paramount. I count the employees of 
the Social Security Administration and the Office of Inspector 
General among our Nation's best, and we thank them for their 
ability to serve the public good no matter how difficult.
    But now we must look to the future. Having a secure system 
is critical to preventing future attacks. Social Security 
numbers have become the most frequently used personal 
identifier and are far too easily used by criminals or 
terrorists to steal identities and obtain false documents. We 
must act to protect the privacy of Americans' Social Security 
numbers. It is a necessary step in our Nation's response to 
terrorism.
    I note in yesterday's Washington Times, in Charlotte, North 
Carolina, a man was charged with attempting to obtain a credit 
card under the name of a victim killed in the September 11 
attack on the World Trade Center. This I think is a new low. 
This is incredible, and certainly this alone should spur us 
along to move ahead with this legislation.
    I now yield to Mr. Matsui.
    [The opening statement of Chairman Shaw follows:]
 Opening Statement of the Hon. E. Clay Shaw, Jr., a Representative in 
   Congress from the State of Florida, and Chairman, Subcommittee on 
                            Social Security
    Today we focus on the Social Security Administration's response to 
the tragic events of September 11th.
    As we mourn the loss of so many Americans, the best of our great 
nation have stepped forward to assist those injured and the families of 
those who were lost. Many of the victims were eligible for Social 
Security survivor or disability benefits, and employees of the Social 
Security Administration responded with urgency, dedication, and 
compassion.
    Today, the Acting Commissioner of Social Security will detail the 
Administration's diligent efforts to respond to the victims of these 
heinous attacks. And also this morning, Inspector General Jim Huse will 
discuss how the theft of Social Security numbers may have helped harbor 
terrorists in our own country.
    Countless hours of investigation by IG agents have provided key 
identifying information on these terrorists and their networks. Law 
enforcement officers--local police, FBI, Secret Service, and the Social 
Security Administration's Office of Inspector General--have worked in 
concert since the attacks to identify the terrorists, their enabling 
thugs, and others who are suspect.
    The events of September 11 have changed all of us, forever. Yet, 
our resolve to respond is unyielding. As we learn more about the 
terrorists' methods, investigators have found that some of the 
terrorists assumed identities, using Social Security numbers to execute 
their plans and to frustrate law enforcement efforts. The activities of 
the terrorists highlight the need for us to be vigilant in ensuring the 
integrity of the Social Security number application process, protecting 
the privacy of Social Security numbers, and preventing identity theft.
    This year, I, along with several of my Committee colleagues, 
introduced H.R. 2036, the ``Social Security Number Privacy and Identity 
Theft Prevention Act of 2001.'' This bipartisan bill represents a 
balanced approach to protecting the privacy of Social Security numbers 
while allowing for their legitimate uses.
    It restricts the sale and public display of Social Security numbers 
by both the public and private sector and enforces such restrictions 
through civil and criminal penalties. Passage of this legislation would 
be a step in the right direction. Today we will learn whether there is 
more we can do.
    Social Security is called upon after a crisis to assist victims, 
and this role is paramount. I count the employees of the Social 
Security Administration and the Office of Inspector General among our 
nation's best, and we thank them for their ability to serve the public 
good, no matter how difficult.
    But, now we must look to the future. Having a secure system is 
critical to preventing future attacks.
    Social Security numbers have become the most frequently used 
personal identifier, and are far too easily used by criminals or 
terrorists to steal identities and obtain false documents. We must act 
to protect the privacy of Americans' Social Security numbers. It is a 
necessary step in our nation's response to terrorism.

                                


    Mr. Matsui. Thank you very much, Mr. Chairman. I want to 
first of all thank you for calling this hearing. I think it is 
very timely and obviously very important, and I also want to 
thank you very much for your bipartisan approach on the whole 
issue of the identity of Social Security numbers, and how to 
protect the privacy of those that have these numbers I think is 
extremely important. And we appreciate the fact that you and 
your staff have outreached to our staff on this particular 
issue. I appreciate it very, very much.
    I would like to first of all thank Acting Commissioner 
Larry Massanari and his staff, obviously the Inspector 
General's Office, and all of the employees of the Social 
Security Administration.
    I would like to also just mention two witnesses who will be 
testifying this morning who have done really an outstanding 
job. One is Bea Disman from New York, and Laurie Watkins of the 
Philadelphia Region, both of whom, obviously, because of the 
deaths that occurred as a result of September 11 in both 
Pennsylvania and New York, have done really an outstanding job 
with their staff. And we just want to thank them very much as a 
result of that.
    This was an unprecedented situation. All of us at this dais 
and in the audience will remember this just as we recall Pearl 
Harbor, John Kennedy's assassination, and FDR's death. This 
September 11 date will be a historic date, and all of you have 
really come through and made sure that those victims and the 
families of victims have been helped greatly by this very 
difficult situation. And over 4,000 people now are about to 
receive or have received either survivor's benefits or 
disability benefits, and that couldn't have happened without 
the dedication of our Federal work force. And all of you really 
epitomize what this country is really all about and the 
greatness of this country.
    I would also just like to, if I may, make one other 
observation. I think it is important to note that because of 
the Social Security system, a family with two minor children 
will receive over the lifetime of that family over $400,000 in 
Social Security benefits. Now, that will not take care of the 
loss of life that occurred. It will not, obviously, take care 
of the loss of comfort. On the other hand, it will give that 
family at least some opportunity to get back on its feet and 
perhaps get on with their lives in the best possible way.
    For a disabled individual, that family would receive, with 
the head of the household being disabled, about $350,000 under 
the current Social Security system, and it really demonstrates 
the greatness of this system. And all of the employees of the 
administration who are administering the program, you will at 
least give some comfort to the lives of those Americans who 
have suffered so severely by this tragic moment in American and 
world history. We want to again thank you for that.
    Mr. Chairman, again, I want to thank you and commend you 
for holding this hearing today, and I look forward to 
Representative Kelly from New York and, obviously, the other 
witnesses as well.
    Chairman Shaw. Thank you, Bob, and it is a pleasure to be 
working in a bipartisan way, which is sometimes too rare in 
this Committee as well as other committees.
    As our first witness, we have our colleague, Sue Kelly, 
from the State of New York. We have your full statement, which 
will be placed in the record, and you may proceed as you see 
fit. Welcome to the Committee.

 STATEMENT OF HON. SUE W. KELLY, A REPRESENTATIVE IN CONGRESS 
                   FROM THE STATE OF NEW YORK

    Mrs. Kelly. Thank you very much. Chairman Shaw, Congressman 
Matsui, and members of the Subcommittee, I thank you for 
allowing me to testify here today on this subject.
    The Financial Services Subcommittee on Oversight and 
Investigations, of which I am the chairman, has investigated 
the issue of timely release of death information by the Social 
Security Administration to the financial services industry and 
its links to identity theft. I appreciate this opportunity to 
review the problems we have found and discuss the potential 
solutions with your Subcommittee.
    According to the Federal Trade Commission, identity theft 
was the top consumer complaint received last year, with the 
rate of complaints and inquiries increasing at an alarming rate 
with the widespread use of the Internet technology. Numerous 
examples of organized identity theft, with great cost to the 
victims, retailers, and lenders, can be found all around our 
country.
    In addition, the families of the recently deceased are 
especially vulnerable because they are so engaged in the 
aftermath of the death that steps are not taken to properly 
protect the deceased's Social Security number and to monitor 
the deceased's accounts.
    Last year, two felons--James Jackson and Derek Cunningham--
assumed the identities of numerous executives, living and 
deceased, and purchased over $730,000 worth of gems and watches 
using credit they obtained using the stolen identities. The 
victims included senior executives of some of America's best-
known companies, such as Coca-Cola, Lehman Brothers, Hilton 
Hotels, and Wendy's International. The deceased chairman of 
Wendy's had been dead for only 10 days when the Jackson gang 
stole his Social Security number and misused it. Fortunately, 
the law caught up with them, and they are awaiting sentencing 
in New York City.
    Staff of the Financial Services Committee met with 
officials of the Social Security Administration to begin a 
review of the process by which Social Security numbers of the 
deceased are transmitted to the financial services industry for 
permanent deactivation. As you may know, the SSA updates the 
Death Master File and sends it by magnetic tape through regular 
mail to another Federal government agency each month for 
commercial distribution. That agency makes copies of the 
original tape and, again, mails out copies to the subscribers. 
Now, obviously, this is going to be a long process. It is all 
done by snail mail.
    The Financial Services Committee has concluded that this is 
an antiquated process that creates a window of opportunity for 
tech-savvy criminals. And I know you agree that this process, 
which can take well over 30 days from the time of death, is 
completely outdated when we can securely and instantly update 
information through the Internet.
    Most recently, however, we learned that this issue is now a 
matter of our national security and safety. This Washington 
Post article from Saturday, September 29, states that Lofti 
Raissi, held by the British on suspicion that he trained four 
of the hijackers, had used the Social Security number of a New 
Jersey woman who has been dead for 10 years. You take this 
issue of timely release and use the Social Security information 
to a new level. I think that this requires immediate action.
    As you, Mr. Chairman, pointed out, the newspapers have 
reported now a man that attempted about October 2 to steal the 
identity of a victim of the World Trade Center of September 11. 
It was only from September 11 to October 2 that it took for 
this man to get that Social Security number and try to fake 
that ID.
    I would like to know if I could insert both of these in the 
record, with your permission.
    Chairman Shaw. Without objection.
    [The articles follow:]
                 U.S. Develops Picture of Overseas Plot
      Hijackers Spent $500,000; at Least 4 Trained in Afghan Camps
By Dan Eggen and Bob Woodward
Washington Post Staff Writers
Saturday, September 29, 2001; Page A01
    The terrorists who carried out the Sept. 11 attacks were bankrolled 
with $500,000 from overseas that financed an operation planned and 
launched several years ago in Germany, with crucial support in Britain, 
the United Arab Emirates and Afghanistan, senior government officials 
have concluded.
    U.S. investigators have determined that at least four of the 19 
suspected hijackers were trained at camps in Afghanistan run by Osama 
bin Laden, whose al Qaeda network is believed responsible for the 
assaults on New York and Washington. They also have tentatively 
concluded there are links between bin Laden and most of the other 
hijackers, according to information gathered by the Justice Department, 
FBI and CIA.
    Government investigators are becoming increasingly convinced that 
one or two other hijackings were in the works, officials said, and are 
focusing on three men in U.S. custody who received flight training. One 
was detained while seeking flight simulator training in Minnesota 
before the hijackings, and two others were arrested on a train in Texas 
after departing on a jet that was grounded after the attacks, sources 
said.
    Government officials said other people in the United States might 
have provided minor assistance or had knowledge that a terrorist 
operation was underway. But the FBI has found little evidence so far 
that the teams of hijackers received much support here, sources said.
    ``There seems to be no U.S. mastermind,'' one official said.
    The Justice Department has cast a global dragnet over the last two 
weeks in a hunt for accomplices. It is narrowing its criminal 
investigation to a number of individuals and is beginning to formulate 
criminal charges that could be filed against them, sources said. But a 
senior Justice official declined to predict when the first indictment 
might be handed down.
    ``We are past the first phase, and we are beginning to sharpen and 
focus the investigation,'' one Justice official said. ``You don't get 
smoking guns in a case like this. The key is going to be in the 
details, in putting together the pieces, and we've gone a long way to 
doing that.... We're looking with particularity at a number of 
people.''
    The disclosures provide the most complete picture yet of the 
direction and scope of the U.S. investigation into the deadliest terror 
attack in American history, which has left 6,500 people missing or dead 
in New York, Washington and Pennsylvania. The hijackings have led to 
arrests on every continent but Antarctica.
    In tracing $500,000 flowing into U.S. bank accounts used by Mohamed 
Atta and other suspected Members of the hijacking teams, the FBI has 
documented numerous large cash withdrawals and a long trail of hotels, 
rental cars and airplane trips that largely dispel any notion of an 
austere plot, a senior government official said. Previous reports have 
said the attacks cost no more than $200,000.
    Some of the money used to prepare the attack has already been 
linked to accounts in the Middle East, the source said, and 
investigators have documented instances of simultaneous withdrawals 
from the same account in different cities.
    ``This was not a low-budget operation,'' the official said. ``There 
is quite a bit of money coming in, and they are spending quite a bit of 
money.''
    Investigators are convinced that the details of the terror plot 
were hatched in Hamburg, Germany, where Atta and two other suspected 
hijackers, Marwan Al-Shehhi and Ziad Samir Jarrah, are believed to have 
run a terrorist cell out of a second-floor student apartment.
    The FBI is doubling its contingent of agents working on the 
investigation in Germany, in the belief that the trail will lead from 
there to the Middle East, one official said. The initial concept for 
the Sept. 11 attacks likely came from Afghanistan, where bin Laden is 
believed to be hiding, another official said.
    Investigators have found that the suspected leaders in the plot 
moved in and out of the United States beginning at least 18 months ago, 
with lower-level hijackers not arriving until this year. Atta returned 
to Germany at least twice after arriving in the United States, a source 
said.
    ``There were two groups on each plane,'' one senior official said. 
``You've got the brains, who are the pilots and the leaders, and then 
you have the muscle coming in later on. They were the ones who held the 
passengers at bay.''
    The FBI is deeply suspicious of the circumstances surrounding three 
key men who have been detained in the case. Zacarias Moussaoui was 
taken into custody in Minnesota in August after he attempted to pay 
cash to learn how to steer, but not take off or land, a jumbo jet.
    Moussaoui is not cooperating with authorities.
    Two others, Mohammed Jaweed Azmath and Ayub Ali Khan, were detained 
on an Amtrak train Sept. 12 in Fort Worth with hair dye, large amounts 
of cash and box-cutter knives like the ones used in the hijackings. The 
men, who had lived in Jersey City, had flown on a plane from Newark to 
St. Louis that was grounded after the attacks. Both men had flight 
training, one source said.
    FBI agents have combed the passenger manifest on that flight and 
have not found anyone else who is believed to be a potential hijacker, 
an official said.
    Adding another important element to the global investigation, 
British authorities yesterday accused an Algerian pilot of training 
four of the hijackers, including the apparent pilot of the jet that 
crashed into the Pentagon.
    During an extradition hearing in London, British prosecutor Arvinda 
Sambir suggested that Lotfi Raissi, 27, may have been a knowing 
participant in the terrorist plot, and that U.S. authorities might 
charge him with conspiracy to murder.
    ``The hope is that he will be able to tell us who planned what and 
when,'' added one senior U.S. official.
    However, the British prosecutor left open the possibility that 
Raissi may have instructed the hijackers at an Arizona flight school 
without knowing their intentions. Defense lawyer Richard Egan said 
Raissi ``adamantly denies any involvement in the recent appalling 
tragedies.''
    In a sign of U.S. investigators' intense interest in the case, 
eight FBI agents attended the hearing at Bow Street Magistrates' Court. 
The court ordered Raissi held in jail for another week, pending a 
second hearing on the U.S. extradition request.
    The original request, issued June 19, said Raissi had given false 
information on an application for a U.S. pilot's license. Now, 
authorities want to pursue his alleged connections with the hijackers.
    Dressed in a white track-suit top and pants, Raissi spoke only to 
confirm his name during the brief hearing,.
    Sambir said that Raissi, who was arrested in Britain last week, had 
visited the United States several times this year. The evidence against 
him, she said, includes a videotape of him flying on June 23 from Las 
Vegas to Phoenix with Hani Hanjour, who is believed to have been the 
pilot of American Airlines Flight 77, the plane that hit the Pentagon.
    In June, Hanjour was a Member of the flight simulator club of the 
Sawyer School of Aviation in Phoenix, according to the school's 
spokeswoman. Raissi was also a Member of the Phoenix flight simulator 
club for 5 months this year and used a flight simulator at a Phoenix 
area airport at the same time as Hanjour, according to the aviation 
school.
    ``He was a lead instructor of four of the pilots that were 
responsible for the hijackings,'' Sambir said in court. ``We say he was 
there to ensure that the pilots were capable and trained for this 
purpose,'' she added.
    Raissi received a U.S. commercial pilot's license in January 1999, 
with a rating to fly a Boeing 737. Two days later, he was certified as 
a ground instructor, and in March 1999, he received a license to be a 
flight instructor.
    Raissi lived in a Phoenix apartment complex and listed himself as 
both a student and employee at Westwind Aviation Academy, a flight 
school at the Phoenix Deer Valley Airport, according to the East Valley 
Tribune, a Mesa, Ariz., newspaper. Raissi has said he trained at 
Westwind in 1997 and 1998, according to documents the FBI showed to 
another local flight school director.
    Westwind was acquired 2 years ago by Pan Am International Flight 
Academy, a Florida company. Todd Huvard, a vice president at Pan Am 
International, said the company was cooperating with the FBI but would 
not release any information to the press.
    Last week, police searched Raissi's apartment in the village of 
Colnbrook, Berkshire, near London's Heathrow airport, and took a flight 
manual and a pilot's logbook that had several pages torn out, 
authorities said.
    In an odd twist, a database search of public records shows that 
Raissi had used the Social Security number of a Jersey City woman who 
died in 1991. The woman, Dorothy Hansen, was a retired factory worker.
    Hansen's grandson, Carl G. Hansen III, 37, said he had never heard 
of Raissi. Joyce Mastrangelo, Dorothy Hansen's daughter, said she was 
astounded.
    ``Oh my God, how did he get that?'' Mastrangelo said. ``My mother 
has been dead 10 years.''
    In other developments yesterday:
     Attorney General John D. Ashcroft released a four-page 
letter in Arabic that was found among the belongings of men on three of 
the hijacked jetliners. The letter includes Islamic prayers, speaks of 
death for a glorious cause, and reminds the reader not to forget his 
knives and passport.
    The letter, first detailed in yesterday's Washington Post, 
demonstrates how the Muslim hijackers ``grossly perverted the Islamic 
faith,'' said Ashcroft, who repeated that Muslims in the United States 
``deserve dignity and respect.''
    Identical letters were discovered in three places. One was found 
inside a car parked at Dulles International Airport, starting point of 
the flight that crashed into the Pentagon. The second was found at the 
Pennsylvania crash site of United Flight 93. The third was found in the 
Boston luggage of Atta, who was aboard one of the planes that plunged 
into the World Trade Center.
     Ashcroft said more than 480 people have been arrested or 
detained during the first 18 days of a quest he has called the largest 
criminal investigation in the nation's history.
    Although bin Laden has been identified by President Bush as the 
sponsor of the Sept. 11 attacks, Ashcroft said investigators ``have not 
ruled out the participation of any individual or any organizations in 
this attack.''
     FBI Director Robert S. Mueller III contested reports that 
FBI agents have posed questions about political beliefs to Muslims, 
Sikhs and Arab Americans who have been stopped or detained as part of 
the investigation. He said questioning focuses on relationships with 
the 19 suspected hijackers and their associates, and ``may cross over 
into relationships that may have sprung out of attendance at, for 
instance, religious meetings. But there is no effort to delve into 
either the political or the religious beliefs of individuals.''
     In Cedar Rapids, Iowa, the Secret Service arrested Youssef 
Hmimssa, who had been wanted under the alias Jalali. Authorities said 
they believe he may have knowledge of a terrorist threat against former 
defense secretary William Cohen.
    Hmimssa was indicted Thursday, along with two other men, by a 
Federal grand jury in Detroit on two counts of fraud. During a Sept. 18 
search of a Detroit apartment, FBI agents seized false immigration 
papers and a fake passport bearing the name Michael Saisa and a picture 
believed to be that of Hmimssa or Jalali, two of five aliases cited by 
authorities. He was also wanted in Chicago on charges of financial-
related fraud and false identification charges.
    Agents also found a day planner that refers to the ``American 
defense minister'' and contains an apparent sketch of the U.S. air base 
in Incirlik, Turkey. Cohen canceled a visit to Incirlik last December 
after learning of a ``credible threat against him,'' according to a 
former Department of Defense officials.

    Special correspondent Adi Bloom in London; staff reporters Sari 
Horwitz, Lena Sun, Scott Higham, Fredrick Kunkle, Allan Lengel, Peter 
Slevin and Marcia Slacum Greene, and researchers Bobbye Pratt and 
Margot Williams contributed to this report.

                               __________
      Man indicted for attempting to steal identity of WTC victim
heraldsun.com
By The Associated Press
October 31, 2001 8:16 am
    GREENSBORO--A North Carolina man has been indicted on charges he 
tried to steal the identity of someone killed in the terrorist attack 
at the World Trade Center.
    The U.S. Secret Service arrested Jermaine Lamar McCall, 20, of 
Laurel Hill, on Friday after he was indicted on charges of making false 
statements to a bank and identity theft. U.S. Attorney Benjamin H. 
White Jr. announced the indictment Tuesday.
    The indictment, handed down by a Federal grand jury in Greensboro, 
charges that on or about Oct. 2, McCall applied for a Citibank credit 
card using the name, Social Security number and birth date of a victim 
of the Sept. 11 attacks.
    The false statement to a bank charge carries a maximum possible 
penalty of 30 years in prison and a $1 million fine. The identity theft 
charge carries a maximum penalty of 3 years in prison and a $250,000 
fine.

                                


    Mrs. Kelly. The chairman of the Financial Services 
Committee, Representative Mike Oxley, and I agree: Whether 
someone has been dead for as little as 10 days or as long as 10 
years, that Social Security number should never be available 
for illegal use, and the financial services industry should 
have the knowledge of the death and the ability to apply it 
right away. We must stop crooks and terrorists from so easily 
using someone else's Social Security number to obtain credit or 
verify a false identity. That is why we asked the Social 
Security Administration to take a fresh look at the way they 
release Social Security numbers of the deceased and asked that 
the U.S. General Accounting Office (GAO) quickly review the 
issue, including the industry's use of death information. We 
have to throw open the doors, we have to cut the red tape, and 
we have to tear down these barriers to preventing identity 
theft. We have to make sure that we can know who these people 
really, truly are. It is important that you are having this 
hearing today.
    We have to ensure at the very least that the industry can 
readily distinguish inactive Social Security numbers from 
active ones, starting with the transmission from SSA to the 
financial services industry almost immediately after death. The 
GAO briefed senior staff of your Subcommittee and mine last 
week on their initial progress in response to our letter. They 
have already found areas for improvement, and we look forward 
to holding a joint Subcommittee hearing with you, Mr. Chairman, 
in the very near future to review this issue in more detail. I 
speak for the Committee chairman and for all Members of the 
Financial Services Committee in pledging to work with you 
toward a permanent solution to this problem.
    I have a copy of the September 29 article from the 
Washington Post, as well as the letters that we have written to 
the SSA, the GAO, the Committee's press release of October 5, 
and the October 18 response of the Social Security Commissioner 
to this inquiry, and I ask unanimous consent that all of this 
be included in the record.
    I thank you again for the opportunity to testify, and I am 
glad to take any questions you may have.
    [The information follows:]
                                      U.S. House of Representatives
                                               Washington, DC 20515
                                                    October 3, 2001
Mr. Larry G. Massanari, Acting Commissioner
Social Security Administration
500 E. Street, SW
Washington, DC 20254
Dear Acting Commissioner Massanari:
    We need your immediate action to protect the American people from 
the theft of a deceased's Social Security number. Such a theft now 
appears to have played a role in the terrorists' attacks on our country 
on September 11. Social Security numbers have become too easy for 
criminals to use to commit fraud, and it is too difficult for regulated 
finance companies to prevent fraud using stolen numbers.
    A Washington Post article on Saturday, September 29, reported that 
a man suspected of training four of the terrorists who hijacked the 
airliners on September 11 used the Social Security number of a New 
Jersey woman who died in 1991. The woman's relatives had never heard of 
the suspect and were astounded at the use of the Social Security number 
10 years after the woman's death. It appears from the published report 
that the Social Security number was included in the Death Master File 
released regularly by your office.
    For several months, the Committee on Financial Services has 
investigated the process of collecting and distributing information on 
deaths and is concerned that the current notification system may be 
outdated, inefficient, and untimely. We have studied other cases of 
identity theft and heard from numerous constituents who suffered fraud 
perpetrated through the identity theft of a recently deceased family 
Member. Fraud losses in just one case totaled more than $730,000, 
because the financial institutions involved did not receive timely 
notice of the victims' deaths. In each case, the fraud could have been 
prevented, or at least limited, through a more timely and targeted 
release of the Death Master File.
    However, in light of the Washington Post report, the need to ensure 
the immediate and permanent deactivation of deceased's Social Security 
numbers is greater than ever. It is now a matter of the protection of 
our national security and the safety of each and every American.
    We need to get used Social Security numbers to the credit bureaus 
and credit card issuers much more quickly to prevent future incidents. 
At a time when instantaneous and secure updating of information through 
the Internet has become a routine practice, we fail to see why it 
should take well over a month before the financial services industry 
receives a deceased's name and Social Security number in a complete and 
official file. We also need to ensure that such numbers can never be 
used again to obtain credit, obtain funds in any way, or improperly 
verify another person's identity.
    Please contact us by October 19 to let us know how these concerns 
can be addressed, and whether any additional congressional action is 
necessary to facilitate your efforts. We also plan further follow-up on 
the timeliness of the collection of death information and how financial 
institutions could better use the information upon distribution without 
creating opportunities for additional fraud or a criminal purpose. We 
are also requesting that the General Accounting Office immediately 
begin a review of the matter and provide recommendations for action by 
SSA and the financial services industry.
            Sincerely,
                                                   Michael G. Oxley
                                                           Chairman
                                    Committee on Financial Services
                                                      Marge Roukema
                                                         Vice-Chair
                                    Committee on Financial Services
                                                       Sue W. Kelly
                                                         Chairwoman
                       Subcommittee on Oversight and Investigations
                               __________
                                      U.S. House of Representatives
                                               Washington, DC 20515
                                                    October 3, 2001
Hon. David M. Walker
Comptroller General of the United States
U.S. General Accounting Office
441 G Street, NW
Washington, DC 20548

Dear Comptroller Walker:
    We need your immediate action to protect the American people from 
the theft of a deceased's Social Security number. Such a theft now 
appears to have played a role in the terrorists' attacks on our country 
on September 11. Social Security numbers have become too easy for 
criminals to use to commit fraud, and it is too difficult for regulated 
finance companies to prevent fraud using stolen numbers.
    A Washington Post article on Saturday, September 29, reported that 
a man held in Great Britain, and suspected of training four of the 
terrorists who hijacked the airliners on September 11, used the Social 
Security number of a New Jersey woman who died in 1991. The woman's 
relatives had never heard of the suspect and were astounded at the use 
of the Social Security number 10 years after the woman's death. It 
appears from the published report that the Social Security number was 
included in the Death Master File, raising the question how the suspect 
improperly re-used the number.
    For several months, the Committee on Financial Services has 
investigated the process of collecting and distributing information on 
deaths and concluded that this notification system is outdated, 
inefficient, and untimely. We have studied other cases of identity 
theft and heard from constituents who suffered fraud perpetrated 
through the identity theft of a recently deceased family Member. Fraud 
losses in just one case totaled more than $730,000, because the 
financial institutions involved did not receive timely notice of the 
victims' deaths. In each case, the fraud could have been prevented, or 
at least limited, through a more timely release of the Death Master 
File.
    However, in the wake of news that a deceased's Social Security 
number might have been used by a suspect in the deadly acts inflicted 
on our country, the need to ensure their immediate and permanent 
deactivation is greater than ever. It is now a matter of the protection 
of our National security and the safety of each and every American.
    We need to get the Social Security numbers to the credit bureaus 
and credit card issuers much more quickly to prevent another such 
incident. At a time when instantaneous and secure updating of 
information through the Internet has become a routine practice, we fail 
to see why it should take well over a month before the financial 
services industry receives a deceased's name and Social Security number 
in a complete and official file. We also need to ensure that such 
numbers can never be used again to improperly obtain credit or funds in 
any way or to verify another person's identity.
    Accordingly, we are asking GAO to examine the full process of 
gathering and distributing death information, recommend how to 
accelerate it and how to permanently deactivate such numbers. Specific 
areas of inquiry should include, but not be limited to, the following: 
(1) How much time does each stage of the process take, from initially 
gathering the information to the receipt of the DMF by subscribers? (2) 
What actions could be taken to ensure more timely collection and 
transmittal to financial institutions to reduce the potential for 
fraud? (3) Would it be possible for the SSA to update the master death 
list on a daily or weekly basis with an immediate electronic transfer 
to the NTIS, or to the financial services industry without NTIS's 
involvement? (4) What steps need to be taken by SSA and the financial 
services industry to ensure that such numbers are never used again?
    Please provide the Committee staff with the information and 
recommendations you have developed on the subject by Friday, October 
19. Due to the critical impact of identity theft on our National 
security, we are asking that you place this review ahead of all others 
requested by the Committee.
            Sincerely,
                                                   Michael G. Oxley
                                                           Chairman
                                    Committee on Financial Services
                                                      Marge Roukema
                                                         Vice-Chair
                                    Committee on Financial Services
                                                       Sue W. Kelly
                                                         Chairwoman
                       Subcommittee on Oversight and Investigations
                               __________
                                CURRENCY
                                    Committee on Financial Services
                                         Michael G. Oxley, Chairman
                                    CONTACT: Peggy Peterson at 226-0471
For Immediate Release:
Friday, October 5, 2001

          Oxley, Roukema, Kelly Seek to Prevent Identity Theft
                      by Terrorists and Criminals,
             Urge Quick government Action to Close Loophole
    Seeking to prevent identity theft and financial fraud, House 
Financial Services Chairman Michael G. Oxley (OH), Vice Chairwoman 
Marge Roukema (NJ), and Oversight and Investigations Subcommittee 
Chairwoman Sue Kelly (NY) today revealed a government loophole that 
makes identity theft easier. They called on the Social Security 
Administration (SSA) to take quick action to close it.
    The Members have discovered a lapse in SSA practices that Oxley 
says ``presents an engraved invitation on a silver platter to an 
identity thief.''
    What makes the gaping loophole even worse is that the vulnerable 
identities are those of deceased individuals. Making the matter more 
urgent is the fact that a man being held on suspicion of involvement in 
the September 11 hijacking attacks illegally used the Social Security 
number of a New Jersey woman who died in 1991.
    Oxley added, ``Now we know that the terrorist MO might include 
identity theft, it's critical for the SSA to take extra steps to 
protect Americans' Social Security numbers and their identities.''
    ``Tightening up practices at the SSA will help to foil common 
thieves stealing identities to obtain illegal credit cards, as well as 
brutal terrorists who may be plotting something much worse,'' Roukema 
said.
    In a letter to the SSA, Oxley, Roukema, and Kelly called for 
modernization of the gathering and distribution of death information to 
the financial services industry. The Members are seeking immediate and 
permanent deactivation of Social Security numbers, whether an 
individual has been dead for ten years or 10 days. Oxley is considering 
adding such a legislative provision to his anti-money laundering 
package introduced Wednesday, H.R. 3004, the Financial Anti-Terrorism 
Act.
    The SSA actually uses 'snail mail' every month to send a cartridge 
of death information to another Federal agency, which copies it again 
and sends it--again through regular mail--to subscribers like credit 
bureaus, credit card issuers, and other financial institutions. The 
whole process takes well over a month. In the meantime, Social Security 
numbers and accounts remain active, and identities are up for grabs by 
clever thieves. Because of the time gap, criminals can deplete lifelong 
savings before the deceased victim's financial institutions are even 
informed of the death.
    ``Terrorists have shown they will use any means at their disposal 
to carry out their monstrous plans. Closing these loopholes will take 
away another tool in the terrorists' arsenal,'' Kelly said. ``The 
Federal government needs to act swiftly to prevent this from happening 
again.''
    ``The Social Security Administration has the power to stop rip-off 
artists and terrorists from victimizing the dead and their grieving 
families,'' Oxley said. ``The financial services industry needs to have 
an official notification of a person's death from the Federal 
government quickly and permanently--preferably by electronic means--to 
prevent identity theft and financial losses.''
    The Committee investigated the theft of Social Security numbers by 
James R. Jackson and Derek Cunningham, who admitted to stealing 
hundreds of thousands of dollars by assuming the identities of live and 
deceased victims. One Ohio victim had been deceased for 10 days when 
Jackson and Cunningham stole his Social Security number, assumed his 
identity, and arranged the transfer of $300,000 from the corporate 
executive's life savings to buy diamonds and watches for resale on the 
black market.
    These felons and others like them would have had a much more 
difficult time stealing identities if the Federal government had sent 
official notification to the credit bureaus and credit card companies 
sooner.

                               __________
                                     Social Security Administration
                                          Baltimore, Maryland 21235
                                                   October 18, 2001
Hon. Michael G. Oxley
Chairman, Committee on Financial Services
House of Representatives
Washington, DC 20515
    Dear Mr. Chairman:
    This is in response to your letter of October 3, 2001 regarding the 
theft of deceased individuals' Social Security numbers. We share your 
concerns about potential fraudulent use of death information and your 
interest in providing it in a timely, accurate and secure manner,
    The Social Security Administration (SSA) releases the fact of death 
and the individual's name, date of death and SSN to any requestor under 
the terms of a court settlement made in 1980 in connection with a 
Freedom of Information Act lawsuit brought against SSA. SSA makes the 
Death Master File (DMF) available through the Department of Commerce's 
National Technical Information Service (NTIS). NTIS sells the 
information to the private sector. Any private sector customer (e.g., 
credit card companies, financial institutions) can purchase the DMF 
from NTIS.
    Clearly the value of the DMF to users would be enhanced if updates, 
which are currently offered to subscribers on a monthly basis, were to 
be provided more frequently. That value could be further enhanced if 
the files and updates were provided electronically rather than through 
magnetic media, as is the current case.
    I share your concern that we do everything we can to make timely 
and reliable information about deaths available to members of the 
financial community. As more information becomes available to us 
concerning activities leading up to the events of September 11, the 
need to strengthen our existing processes in this area is clear. We are 
reviewing our current procedures in this area and look forward to 
working with you, the members of your Committee, and others in the 
Congress to enhance the value of our DMF to the many subscribers who 
rely on it for information regarding deaths that occur in this 
country.We are providing the same information to Representatives Sue 
Kelly and Marge Roukema.
            Sincerely,
                                                 Larry G. Massanari
                             Acting Commissioner of Social Security

                                


    [The prepared statement of Mrs. Kelly follows:]
 Statement of the Hon. Sue W. Kelly, a Representative in Congress from 
                         the State of New York
    Chairman Shaw, Congressman Matsui, and members of the Subcommittee, 
thank you for allowing me to testify here today on this subject. The 
Financial Services Subcommittee on Oversight and Investigations, which 
I chair, has investigated the issue of the timely release of death 
information by the Social Security Administration to the financial 
services industry and its links to identity theft. I appreciate this 
opportunity to review the problems we have found and discuss potential 
solutions with your Subcommittee.
    According to the Federal Trade Commission, identity theft was the 
top consumer complaint received last year, with the rate of complaints 
and inquiries increasing at an alarming rate with the widespread use of 
Internet technology. Numerous examples of organized identity theft, 
with great cost to the victims, retailers, and lenders, can be found 
around the country.
    In addition, the families of the recently deceased are especially 
vulnerable, because they are so engaged in the aftermath of the death 
that steps are not taken to properly protect the deceased's Social 
Security number and monitor the deceased's accounts. Last year, two 
felons, James Jackson and Derek Cunningham, assumed the identities of 
numerous executives, living and deceased, and purchased over $730,000 
in gems and watches using the credit they obtained using the stolen 
identities. The victims included senior executives of some of America's 
best-known corporations, such as Coca-Cola, Lehman Brothers, Hilton 
Hotels, and Wendy's International. The deceased chairman of Wendy's had 
been dead for only 10 days when the Jackson gang stole his Social 
Security number and misused it. Fortunately, the law caught up to them, 
and they are awaiting sentencing in New York City.
    Staff of the Financial Services Committee met with officials of the 
Social Security Administration to begin a review of the process by 
which Social Security numbers of the deceased are transmitted to the 
financial services industry for permanent deactivation. As you may 
know, SSA updates the Death Master File only on a monthly basis and 
sends it by magnetic tape through regular mail to another government 
agency each month for commercial distribution. That agency makes copies 
of the original tape and, again, mails the copies out to subscribers. 
The Financial Services Committee has concluded that this antiquated 
process creates a window of opportunity for tech-savvy criminals. I 
know you agree that this process, which can take well over 30 days from 
the time of death, is completely outdated when we can securely and 
instantly update information through the Internet.
    Most recently, however, we learned that this issue is now a matter 
of our national security and safety. This Washington Post article from 
Saturday, September 29, states that Lofti Raissi, held by the British 
on suspicion that he trained 4 of the hijackers, had used the Social 
Security number of a New Jersey woman who has been dead for 10 years! 
This takes the issue of timely release and use of Social Security 
information to a new level that requires immediate action.
    The Chairman of the Financial Services Committee, Mike Oxley, and I 
agree: Whether someone has been dead for as little as 10 days or as 
long as 10 years, that Social Security number should never be available 
for illegal use, and the financial services industry should have the 
knowledge of the death and the ability to apply it. We must stop crooks 
and terrorists from so easily using someone else's Social Security 
number to obtain credit or verify a false identity. That is why we 
asked the Social Security Administration to take a fresh look at the 
way they release Social Security numbers of the deceased and asked the 
General Accounting Office to quickly review the issue, including the 
industry's use of death information. We have to throw open the doors, 
cut the red tape, and tear down the barriers.
    We must ensure at the very least that the industry can readily 
distinguish inactive Social Security numbers from active ones, starting 
with the transmission from SSA to the financial services industry 
almost immediately after death. GAO briefed senior staff of your 
Subcommittee and mine last week on their initial progress in response 
to our letter. They have already found areas for improvement, and we 
look forward to holding a joint Subcommittee hearing with you, Mr. 
Chairman, in the very near future to review this issue in more detail. 
I speak for the Committee Chairman and all members of the Financial 
Services Committee in pledging to work with you towards a permanent 
solution to this problem.
    I have a copy of the September 29, 2001 article from the Washington 
Post, the letters that we wrote to SSA and the GAO, the Committee's 
press release of October 5, and the October 18 response of the Social 
Security Commissioner to this inquiry. I ask unanimous consent that 
they be included in the record.
    Thank you again for this opportunity.

                                


    Chairman Shaw. Thank you, and without objection, those 
matters that you asked unanimous consent to be placed in the 
record will be.
    We look forward to meeting with you. We will be announcing 
today the joint meeting that we will be having with your 
Subcommittee next week in order to discuss and explore the 
issues related to the Death Master File and identity theft, and 
we look forward to working with your Committee.
    Do any of our Members have any questions for Mrs. Kelly?
    [No response.]
    Chairman Shaw. Thank you very much for being with us this 
morning. We look forward to being with you at a hearing next 
week.
    We now have, as Mr. Matsui pointed out, three witnesses to 
come to the table. We have the Acting Commissioner of Social 
Security, Larry Massanari, who I think is still looking forward 
to passing the baton on to his successor. He tells us that 
every time he comes here. And we have Beatrice Disman from the 
New York Region. She is the commissioner of the New York 
Region. And Laurie Watkins is the acting Philadelphia regional 
commissioner.
    Welcome, and you may proceed, Mr. Acting Commissioner, as 
you see fit. Your full statement, as you well know, will be 
made a part of the record.

 STATEMENT OF LARRY G. MASSANARI, ACTING COMMISSIONER, SOCIAL 
SECURITY ADMINISTRATION, ACCOMPANIED BY BEATRICE M. DISMAN, NEW 
    YORK REGIONAL COMMISSIONER, AND LAURIE WATKINS, ACTING 
               PHILADELPHIA REGIONAL COMMISSIONER

    Mr. Massanari. Thank you, Mr. Chairman.
    Mr. Chairman, Mr. Matsui, Members of the Subcommittee, 
thank you for inviting us here today to discuss SSA's response 
to the September 11 terrorist attacks. We at SSA, along with 
the rest of the Nation, were deeply affected by the tragic 
events of that day, and we responded immediately to the needs 
of the victims and their families.
    Before I begin, though, I, too, want to acknowledge the 
dedicated service of the two regional commissioners who are 
here with me today. On my right is Bea Disman, the regional 
commissioner in New York, and on my left, the acting regional 
commissioner for Philadelphia, Laurie Watkins. They and their 
staffs have worked tirelessly to provide prompt and 
compassionate service to those affected by these acts of 
terror.
    I also want to recognize the extraordinary efforts of SSA's 
employees, particularly those in the New York and Philadelphia 
regions. Reflecting the very finest traditions of our agency, 
they have set aside their personal concerns, because they 
recognized the importance of what they do for the American 
people. They have handled the difficult and delicate task of 
working with the survivors to help them obtain benefits, and 
they have done that with compassion and with speed.
    I had the opportunity in September to visit the Family 
Assistance Centers in both New York and Virginia, where SSA 
staff have worked long hours to provide information and to take 
claims. Officials and families at both locations have had high 
praise for SSA's employees. At the Pentagon site, the director 
of the Center, U.S. Army Lieutenant General John Van Alstyne 
told me that SSA employees are truly professionals with a 
heart. Quite honestly, I could not agree more.
    Let me now briefly outline for you what we have done to 
help the survivors and also what we have done to restore agency 
operations.
    The human toll, of course, is staggering, and we don't yet 
know what the total number of claims will be. But at this time 
it is well over 4,000. And over half of those are for children 
who have lost parents. We have also taken a small number of 
disability claims, something in the neighborhood of 50 now, 
although we expect that number will rise in the near future.
    After the September 11 attacks, SSA immediately invoked 
special emergency procedures to ensure that survivor claims 
could be taken and paid as quickly as possible.
    We have taken claims at many locations, including the 
family assistance centers, at facilities set up by large 
employers, in our own field offices, through our 800 numbers at 
hospitals, and even in local congressional offices.
    We have also conducted a full-scale, aggressive outreach 
effort to make sure that no family eligible for benefits is 
overlooked. We have a special Web page with information about 
how to apply for both survivor and disability benefits.
    By the Sunday following the attacks, public information 
spots were in virtually every media outlet in New York City, 
both English and Spanish. On September 11, all Social Security 
offices were closed early while we assessed the need for added 
security. But the next day, all facilities were open, except 
for offices in New York City.
    On September 13, 2 days after the attacks, our New York 
City offices reopened--except for those in Lower Manhattan--and 
the staffs from those offices were redeployed in other 
facilities throughout the city.
    As for the security of our facilities, we are now screening 
visitors more thoroughly and increasing our inspections of 
packages, delivery vehicles, transit buses, and we are 
carefully screening all vehicles that use underground parking. 
We have also placed guards in the 322 field offices that did 
not previously have security guards.
    Recently, we have had a number of anthrax scares in several 
of our offices. Thankfully, all of those scares have been 
unfounded. But every report of a suspicious incident is taken 
very seriously and is thoroughly investigated. And we are 
asking all of our employees to remain alert, vigilant, and 
cautious.
    Let me now turn, Mr. Chairman, if I might, to an issue that 
deeply disturbs all of us at SSA. There are indications, as you 
know, that some of the terrorists had Social Security cards 
which may have been fraudulently obtained. As soon as we 
learned of this, we created a high-level response team made up 
of persons from around our organization and the Inspector 
General's Office to re-examine our entire enumeration process. 
They are working to ensure that we are taking all necessary 
precautions to prevent those with criminal intent from using 
Social Security numbers to advance their operations. The team 
has already made several short-term recommendations that we are 
now considering.
    Over the last few years, we have made changes to our Social 
Security number procedures seeking to strike a balance between 
the integrity of the process and responsive service. But we all 
know that the world changed on September 11, and now we need to 
reassess that balance between security and public service.
    I want to thank you, Mr. Chairman, and the Members of the 
Subcommittee for your efforts in protecting the integrity of 
the Social Security number process and also in protecting the 
privacy of the American people. We at SSA look forward to 
working with you on H.R. 2036, which seeks to further these 
goals.
    We also look forward to working with the Subcommittee to 
address your concerns about the Death Master File.
    Finally, I would like to acknowledge and thank SSA's Office 
of the Inspector General for the significant role that they 
have played in the investigation of the terrorist attacks. The 
Inspector General is coordinating activities with SSA 
components and is working side by side with the FBI and with 
other Federal law enforcement agencies. Their hard work and 
their expertise in the area of Social Security number misuse 
have been absolutely invaluable.
    To conclude, Mr. Chairman, as you know, SSA has long sought 
to educate the American public that Social Security is far more 
than a retirement program. But, sadly, nothing has brought home 
that message quite as vividly as the tragedy of September 11. 
Take, for example, the story of a man whose wife was killed at 
the World Trade Center. He was ready to sell the family's home 
because he as a stay-at-home dad could no longer afford it. But 
after a Social Security representative told him that he and his 
young child were eligible for survivor benefits, he was able to 
take his home off the market.
    All of SSA mourns the losses suffered by thousands of our 
fellow Americans, and we remain committed to doing everything 
possible to support the families of the victims. We also remain 
committed to protecting employees and visitors to our offices 
against any biological threats. And, finally, we are fully 
committed to safeguarding the integrity of the enumeration 
process.
    I would be pleased to answer any questions that you might 
have.
    [The prepared statement of Mr. Massanari follows:]
 Statement of Larry G. Massanari, Acting Commissioner, Social Security 
                             Administration
    Mr. Chairman, Mr. Matsui, and Members of the Subcommittee:
    Thank you for the opportunity to discuss the Social Security 
Administration's (SSA) response to the terrorist attacks on our country 
on September 11. We, along with the rest of the nation, were deeply 
affected by the tragic events that occurred in New York, at the 
Pentagon, and in Pennsylvania. However, in the best tradition of public 
service, SSA responded immediately to meet the needs of the families 
who lost a loved one in these tragedies. Today, I will describe what we 
have done to assist the families, how we are handling their claims for 
benefits, and what measures we have taken to ensure that the American 
people will continue to receive the services and cash benefits they 
need in a timely and compassionate way. In addition, in the wake of the 
incidents of bioterrorism, I will discuss what SSA is doing to protect 
our employees and the people who visit our offices.
    Before I begin, however, I want to acknowledge the dedicated 
service of the two Regional Commissioners (RC) who have accompanied me 
here today. To my right is Bea Disman, the RC for the New York Region, 
and to my left is Laurie Watkins, the Acting RC for the Philadelphia 
Region. Ms. Disman led our efforts to provide service to the citizens 
of New York, and Ms. Watkins directed our activities in providing 
benefits to the survivors of the victims of the attack on the Pentagon. 
I believe both of them reflect the highest ideals and the finest 
traditions of our Agency in making real our common goal of providing 
prompt and caring service to those affected by these acts of terror.
    I also want to recognize the remarkable efforts of SSA's employees, 
particularly those in the New York and Philadelphia Regions. Although 
many employees were themselves affected by the events of September 11, 
and some were physically close enough to the sites to witness the 
events as they unfolded, virtually all of them were on duty the next 
day. They set aside any personal concerns, because they recognized the 
importance of what they do for the American people. And they handled 
the difficult and delicate task of working with the survivors to 
provide the support needed to help them obtain benefits with 
sensitivity and speed.
    Mr. Chairman, I have had the opportunity to visit the Family 
Assistance Centers in New York City and in Crystal City, Virginia where 
SSA staffs have worked long hours to provide information and take 
claims. While at the Pentagon site, the Director of the Center, U.S. 
Army Lieutenant General John Van Alstyne said that ``SSA employees are 
truly professionals with a heart.'' And I couldn't agree more. As I 
share with you today SSA's response to the disastrous events of 
September 11, I also share with you my pride in SSA's workforce. They 
have risen to a challenge no one could have anticipated with an 
extraordinary sense of commitment and compassion.
Supporting the Families

    Following the attacks, SSA immediately invoked special emergency 
procedures to ensure that survivor claims for the families of those 
killed in the World Trade Center, the Pentagon, and the plane crash in 
Pennsylvania could be taken and paid as quickly as possible. These 
procedures include, for example, allowing payment of survivors' claims 
with proof of death other than a death certificate (for example, 
airline manifests and employer records). Using these procedures, we can 
take and pay a claim as quickly as possible.
    As soon as employers were able to arrange locations to meet with 
the families of victims, which happened in the first days following the 
tragedy, our New York Regional personnel were on-site working with 
employers and families to take and expedite claims. When the Family 
Assistance Centers were established at Pier 94 and Liberty State Park, 
we became part of that effort. We also worked closely with the New York 
Police Department, the Fire Department, and the Port Authority to take 
claims for the survivors of their employees who were killed. We were 
on-site at the Pentagon Family Assistance Center as well, working side 
by side with Department of Defense personnel to handle survivor claims 
there.
    In addition to those sites, survivor and disability claims are 
being taken at a number of other locations. These include our field 
offices, our toll-free 800 number, as well as Federal Emergency 
Management Agency locations, hospitals, facilities set up by large 
corporations, and even local Congressional offices.
    The human toll of this tragedy is staggering. At this time, the 
number of disaster-related claims has risen to over 4,000 claims. Over 
half of those are for children who lost parents in the attacks. We have 
also taken a small number of disability claims (about 50) although we 
expect that number to increase over time. Unfortunately, we don't 
really know what the total number of claims arising from the September 
11 assaults will be.
    In Virginia, we have now taken claims or determined eligibility for 
all of the families of the 125 victims who worked for the Department of 
Defense, and for 53 of the 64 passengers on the American Airlines 
flight that crashed into the Pentagon.
    Finally, we are working closely with both United and American 
Airlines. The information they can provide us is invaluable as we 
search to locate people who may be eligible for benefits. In addition, 
SSA staff attended a gathering at the site of the Western Pennsylvania 
crash to provide information to the family members who were there about 
how to apply for benefits.
    In response to calls coming into our national 800 number, 
representatives are referring all disaster-related claims calls to our 
Immediate Claims Taking Units where benefit applications are taken 
immediately. These units represent a nationwide network of 14 claims 
processing units, staffed with 390 claims takers.
Outreach Efforts

    Within days, we also launched an extraordinary, full-scale outreach 
effort to make sure that no family eligible for benefits is overlooked.
    We quickly put in place a special web page with information for 
those affected by the September 11 disaster to use. The site has 
information about how to apply for survivor benefits, as well as 
information about disability benefits. It displays the 800 number and 
has a link to SSA's office locator to assist persons who need to file a 
claim. It also reassures people that benefits will continue to be paid 
on time.
    By the Sunday following the attacks, we had public information 
spots on every major network affiliate in New York City, the local 
television stations, and Spanish language stations. These spots 
included information on survivor benefits and how to contact Social 
Security.
    We have worked with hospitals in the New York and Washington D.C. 
areas to identify potential claimants for disability benefits. The New 
York City Labor Council is working with us to provide outreach to union 
members and their families.
    We are also working closely with the union, which represents the 
restaurant workers in the World Trade Center. The union will supply SSA 
with acceptable evidence of identity for enumeration purposes. This 
will enable U.S. citizens to obtain replacement Social Security cards, 
which they will need to apply for unemployment benefits.
    To make sure that those foreign survivors who might be eligible for 
Social Security benefits are contacted, the Regional Office has done 
outreach to about 60 consulates.
    We matched lists of employees for those companies that had been 
located in the World Trade Center. We are also working with those 
employers who were the most severely impacted, such as the Fire 
Department, the Port Authority, and several financial service 
corporations. We have contacted all of the individuals or families 
referred by these employers.
    Finally, press releases and fact sheets have been and will continue 
to be distributed, as necessary, to national media outlets, advocacy 
organizations, and others. We are also providing frequent updates to 
Congressional delegations from the five affected States.
Social Security Remained Open for Business

    In the aftermath of the attacks, SSA took immediate steps to ensure 
that we stayed open for business, for routine business as well as for 
those who lost family members or were injured that day. All Social 
Security offices in New York City and the Washington D.C. area were 
immediately closed on September 11 to protect both the public and our 
employees, while SSA assessed the severity of the situation and the 
need for increased security.
    The next day, all Social Security offices and the national 800 
number were open, with the exception of field offices in New York City, 
the Northeastern Program Service Center in Jamaica, and the hearing 
office and the Disability Determination Services (DDS) office in lower 
Manhattan. The New York Regional Office also remained closed, but we 
opened a command center in the Grand Central field office. All of our 
offices--except for those in lower Manhattan--reopened on September 13. 
We redeployed employees from the closed offices to offices that were 
open.
    We immediately worked with the Treasury Department and the Postal 
Service to make sure that, where normal processes remained in place, 
benefit checks and electronic funds transfer payments continued to be 
sent. Where service was disrupted, we tried to find ways to mitigate 
delays.
    We also recognized that our employees themselves were experiencing 
a wide range of emotions in dealing with the tragedies. Because of 
these concerns, we provided and will continue to provide counseling for 
both individuals and small groups of employees. We also offered our 
counseling services to employees in other Federal agencies.
    By September 24, all of our offices were open, with the exception 
of the Manhattan DDS, which had been located near the World Trade 
Center. Some of the DDS staff is being temporarily housed in the 
Northeastern Program Service Center in Jamaica. Others have been sent 
to work in other offices.
    All 15,000 claims that had been pending in the DDS were removed 
from the building and sent to a contractor for cleaning and 
decontamination. All cases have been cleaned and sent back to the DDS. 
The DDS personnel are in the process of recontacting claimants to 
update the medical evidence and explain the delay in processing.
    We have deferred some workloads that are not time sensitive to 
focus on serving the needs of victims and survivors. We have also 
temporarily suspended collection and recovery of overpayments where the 
responsible party is under a hardship resulting from the terrorist 
attacks.
    As for the security of our facilities across the country, we have 
supplemented existing security at our large sites by screening 
visitors, contractors, and non-employees more thoroughly and increasing 
inspections of packages, delivery vehicles, transit buses, and all 
vehicles entering areas under buildings. We have placed guards in the 
322 field offices that did not have them, and will keep them in place 
for at least the remainder of the fiscal year.
Protecting Against Biological Threats

    In this time of heightened concern about possible biological 
threats, both public and private organizations are treating suspicious 
mail seriously. The health and safety of all of our employees and the 
people who visit our offices is our utmost concern, and we will do 
everything possible to protect them. Every report of suspicious mail 
has been and will continue to be taken seriously and investigated 
thoroughly.
    First, let me assure you that presently we have had no known cases 
of anthrax in the SSA community. Our employees in the Washington D.C. 
area have already been referred for treatment in accordance with 
instructions from the Centers for Disease Control and Prevention (CDC). 
We are also doing environmental testing of our mailrooms in the New 
Jersey, Baltimore, and Washington, D. C. areas that may have received 
mail, either directly or indirectly, from either the Brentwood, D. C. 
or Hamilton, New Jersey, U.S. Postal Service mail processing 
facilities, to ensure they aren't contaminated. Employees in these SSA 
facilities are being referred for treatment in accordance with the CDC 
protocol.
    We have had some incidents involving suspicious envelopes or 
packages in our field offices around the country. We have had to close 
some of our offices for a day or two while testing was done. We have 
also temporarily evacuated other offices for an hour or so. Thankfully, 
all of these suspected threats to public safety to date have proven to 
be unfounded.
    We are working with the CDC and other Federal and State agencies to 
make sure all necessary actions are taken. To make our employees aware 
of what to do if they see a suspicious letter or package, we have 
distributed posters displaying instructions throughout our facilities. 
We also sent several advisories to SSA supervisors and staff that 
describe emergency procedures to follow if contamination is suspected. 
We conducted a live interactive broadcast with SSA security and medical 
staff that included questions and answers about anthrax, and have made 
the videotape of the broadcast available to all SSA employees.
    I want to assure you that we are committed to doing everything 
possible to protect SSA staff and the American people who we serve.
Social Security Number Safeguards

    Mr. Chairman, I would also like to discuss an issue that deeply 
disturbs all of us at the Social Security Administration. There are 
indications that some of the terrorists had Social Security numbers and 
cards, which may have been fraudulently obtained. As soon as we learned 
of this, we formed a high-level response team, which includes 
participation from our Office of the Inspector General (IG), and from 
the New York and San Francisco Regions. The response team is 
reexamining our enumeration process to determine what changes we need 
to make in our policies and procedures to ensure that we are taking all 
necessary precautions to prevent those with criminal intent from using 
Social Security numbers and cards to advance their operations.
    The response team is also reviewing the recommendations the 
Inspector General has made over the last five years with respect to 
enumeration. They are also looking at several initiatives that SSA 
already had underway to identify those that can be accelerated. I have 
received the first of the response team's recommendations and I am 
considering their suggestions. They are just the beginning of our 
efforts to strengthen the process.
    In addition, we are taking the lead to form an interagency task 
force with the Immigration and Naturalization Service and the 
Department of State to accelerate an initiative which we have long 
supported to enumerate people as they enter the country. I have 
contacted both agencies to begin to set up meetings for the task force.
    I would like to point out, however, that based on information from 
the Department of Justice, it appears that as many as 13 of the 19 
terrorists, who were on the planes on September 11, were in this 
country legally. Depending upon what their entrance status was with the 
INS, they could have been eligible to receive a Social Security number.
    Mr. Chairman, over the last few years we have made changes to our 
Social Security number process to improve our security procedures. 
Those changes sought to strike a delicate balance between measures to 
ensure the integrity and security of the enumeration process and a 
desire to get a number issued to the applicant as quickly as possible. 
But we all know that the world changed on September 11, and we need to 
reassess that balance between customer service and security.
    That brings me to your bill, Mr. Chairman, H.R. 2036, the Social 
Security Number Privacy and Identity Theft Prevention Act of 2001, 
which you have developed over the last few years, with Mr. Matsui and 
other members of the Subcommittee who have cosponsored the legislation. 
This Administration supports the goals of your legislation to enhance 
privacy protections for individuals and to prevent the fraudulent 
misuse of the Social Security number, and we look forward to working 
with you and the Subcommittee members to best achieve those goals.
    Finally, with respect to this subject, I would also like to 
acknowledge and thank SSA's Office of the Inspector General for the 
very significant role they have played in the investigation of the 
events of September 11. Our OIG is coordinating activities with SSA 
components, working with the Federal Bureau of Investigation, 
participating in the Joint Terrorism Task Forces, and working with 
other Federal law enforcement agencies. In addition, their hard work 
and unique knowledge in the area of Social Security number misuse has 
been invaluable to SSA. I am confident that through their ongoing work 
and participation in the response team, we will be able to strengthen 
our safeguards to assure that only those individuals who by law are 
entitled to Social Security numbers and cards receive them.
Necessary Resources

    Obviously, SSA has moved swiftly to implement all the emergency 
measures I have described knowing that additional resources will be 
needed to process thousands of new and unanticipated claims, increase 
security, and redeploy staff. There are also costs associated with 
redeveloping claims and replacing facilities, equipment, and computer 
systems that were damaged. We also know that we will need to provide 
the Office of the Inspector General with the additional resources they 
will need to support their investigative efforts.
    It is still too early to estimate the full impact of our response 
to this tragedy. And, indeed, our first actions have been to address 
the needs of the survivors and injured in every way possible. However, 
President Bush has proposed a $20 billion emergency spending measure to 
provide for disaster recovery and security needs related to the attack 
on America, and SSA is to receive $7.5 million of that request.
Conclusion

    In conclusion, Mr. Chairman, SSA has long sought to educate the 
public that Social Security is far more than a retirement security 
program. Sadly, nothing has brought home that message quite as vividly 
as the tragedy of September 11. In September, a husband in New York 
City whose wife had been killed at the World Trade Center was ready to 
sell his home, because he, as a stay at home father, could not afford 
to keep it. He was able to take it off the market after a Social 
Security representative contacted him to let him know that he and his 
family were eligible for survivor benefits. All of SSA mourns with this 
man and with the rest of the country. We remain fully committed to 
doing whatever we can to help the families of the victims' recover from 
this heinous act of terror.

                                

    Chairman Shaw. Thank you, Mr. Commissioner.
    I would like to first of all address a question to Ms. 
Disman. I am wondering, Ms. Disman, how are you holding up? How 
are your employees holding up? How overwhelming is the caseload 
at this time? I am very impressed with the speed with which you 
have gone forward in processing these claims. So why don't you 
give us the inside story.
    Ms. Disman. I think the inside story is that I am so proud 
of the Social Security employees in the New York Region. They 
were incredible given what they had to deal with because I 
don't know if you know, Mr. Chairman, a number of my employees 
are at 26 Federal Plaza within ear-shot of the World Trade 
Center. They actually saw the planes coming in. So we had a 
real emergency and an emotional situation to deal with at all 
the Social Security offices, as well as the New York DDS, 
Disability Determination Service, that was in Lower Manhattan.
    But I will tell you right now that working with the 
victims' families has for the Social Security employees been 
one of the largest rewarding efforts of their careers and life. 
We were on site within 3 days with all the large employers, and 
my employees volunteered to work 12, 15 hours to be there. We 
were there within 3 days, and I will tell you--and I was with 
them--of the impact of talking to some of the widows--and at 
that point they weren't really classifying themselves as 
widows, but seeing a mother whose husband's first day of work 
was on Tuesday at one of the large employers, and she had a 14-
month-old son with her, and she was pregnant. And she looked at 
us, Mr. Chairman, and said, ``You are the U.S. government. You 
are here for us.'' That was all that our employees needed, and 
that is what has kept them going.
    Of course, I provided counseling services for all the 
employees because I had to make sure that their emotional state 
was stable, because of the experience, before we even brought 
them back into 26 Federal Plaza and to the offices there. We 
had private counseling services for groups as well as 
individuals, and we have extended the contracts so that people 
could continue. Because, you know, with depression and some of 
the side effects, it comes much later.
    Also, we had that incredible situation of 15,000 disability 
folders that were sitting right at the edge of the World Trade 
Center for our DDS, and we needed to ensure, first of all, that 
350 employees got out and were safe, and then we had to get the 
folders. And I think you know, Mr. Chairman, we have the 
folders.
    So how are we faring? I think if you look, communications 
are back, although not wonderful. Security is there. I chair 
the Federal Executive Board, so I am very concerned with 
security for the whole Federal complex and have worked with the 
General Services Administration, not only for Social Security 
but for all Federal agencies. Helping the victims' families has 
provided incredible stories. I remain concerned for the 
emotional stability of my employees, and we are constantly 
working on it, and certainly the anthrax scares in New Jersey 
and New York have additional impact. And, finally, working on 
all those disability cases and making sure that individuals 
that are vulnerable with disability are treated fairly and get 
their cases processed. That has been the focus of our 
attention.
    Chairman Shaw. How many caseworkers do you have that are 
actively working on cases resulting from September 11?
    Ms. Disman. I have 206 employees that have been actively 
involved, not including the DDS, in helping the victims' 
families. And as a matter of fact, the Acting Commissioner will 
join me on the 13th to recognize all of these employees. They 
have been both at New Jersey--because we can't forget the State 
of New Jersey, which is within my region, as well as in New 
York. And these have been incredible, dedicated people, and we 
will celebrate with them.
    Chairman Shaw. I, as others, have gone to ground zero and 
observed the tremendous amount of work, the dedication of 
public servants, not only from New York but from around the 
country who have come to New York's aid. And I was very 
impressed as to the strength of the New Yorkers.
    You know, I have often thought that we don't understand how 
they think, the terrorists. But I don't think they understand 
how we think, either. And it certainly has brought out an inner 
strength, and the New Yorkers are really to be complimented.
    I was joking with Charlie Rangel the other day. I said, you 
know, after seeing this, I am beginning to really love New 
Yorkers.
    Ms. Disman. Thank you, Mr. Chairman.
    Chairman Shaw. So we are very impressed. This whole country 
is very impressed at the job you have done. And I don't think 
that people really realize how many of you that are behind the 
scenes. We see the firemen and the rescue workers and the 
police climbing on the ruins of the World Trade Center. But the 
people that are in the offices making the system work and 
caring for the victims is a tremendous important part of what 
you do.
    Ms. Watkins, what are your observations? This would be in 
the Pennsylvania area, in Philadelphia?
    Ms. Watkins. That is correct.
    Chairman Shaw. And the Pentagon, too.
    Ms. Watkins. Most of our efforts were centered at the 
Pentagon Family Assistance Center and the victims of the 
Pentagon attack.
    My observations are very similar to Ms. Disman's, although 
they were necessarily of a more limited scope. But my employees 
found the entire experience to be much the same as Ms. Disman 
described in terms of incredibly rewarding. They remained 
committed throughout the process. They felt very, very good to 
be able to do something. I think all Americans probably 
experienced that kind of feeling after September 11.
    I am incredibly proud of the employees of the Philadelphia 
Region and the way they handled the very delicate work that was 
necessary to deal with the survivors. So I think they have done 
a tremendous job, and I think they are holding up very well. 
Thank you very much.
    Chairman Shaw. How is the emotional stability of the 
workers? It has got to be a very depressing situation to be 
facing the people who have firsthand--the family Members or 
survivors who have suffered such an awful tragedy.
    Ms. Watkins. Well, I think all of our employees at times 
have been somber, but at the same time, I think Social Security 
employees routinely do work that involves dealing with people 
who have faced significant life events such as the loss of a 
spouse. So I do think that this was something unprecedented and 
requires an extraordinary level of sensitivity because there 
were emotions, as you note, running for both the people that we 
were dealing with and the employees that were serving them. But 
I think they rose to the occasion.
    Chairman Shaw. Mr. Massanari, my last question will be 
directed to you. How are we as far as the allocation of 
resources to be sure that we are giving the people the service 
that they so desperately need?
    Mr. Massanari. Mr. Chairman, our original estimates, as we 
assessed the situation shortly after September 11, were that we 
would need something in the neighborhood of $40 million to 
provide adequate security, to process the additional claims, 
and to support the restoration of operations in New York, 
particularly the New York DDS in Lower Manhattan. Actually, 
that original $40 million estimate has really held up. It has 
been somewhat fluid, in some areas a little more, in some areas 
a little bit less, but it is still in the neighborhood of $40 
million.
    We also estimated that we would need around $7 million in 
order to strengthen the investigative capacity of the Office of 
the Inspector General. We think it is very important that we 
enhance their capability to deal with Social Security number 
misuse. So our estimates were in the neighborhood of $40 
million.
    As you know, the President has submitted for congressional 
approval a request for the second $20 billion as a part of the 
emergency relief package. Included in that $20 billion package 
is $7.5 million for Social Security.
    Chairman Shaw. And this is adequate to take care of the 
caseload we have?
    Mr. Massanari. It does not approach, of course, the $40 
million estimate that we had made; however, we will do 
everything we need to do to divert funds from other sources in 
order to meet these needs. We are going to do whatever it takes 
to provide the necessary security for employees, to process 
these claims, and, of course, to restore operations in New 
York.
    Chairman Shaw. Thank you.
    Mr. Matsui.
    Mr. Matsui. Thank you very much, Mr. Chairman. I would like 
to thank Ms. Disman and Ms. Watkins as well for their 
testimony. I appreciate the fact that you asked them the 
questions you did. I think it was very critical and very 
important.
    Ms. Disman, I might just point out that Mr. Rangel also 
talked with me. I ran into him today at a meeting, and for 
those of you who don't know Charlie Rangel, a Member of 
Congress, he is from New York and he has been here probably for 
30 years.
    Chairman Shaw. If you have met Charlie, you know he is from 
New York.
    Mr. Matsui. New York, right. He said, ``Aren't we great?'' 
And I thought he was for some reason connecting it to this 
hearing, because I knew you were coming this morning. And he 
was talking about how New York beat Arizona last night.
    [Laughter.]
    Mr. Hayworth. Would the gentleman yield?
    Mr. Matsui. And I am sure you are happy about that as well.
    [Laughter.]
    Mr. Matsui. I didn't want to look that way, I am sorry to 
say.
    Mr. Hayworth. Here we are having a nice hearing. It is 
tough enough.
    Mr. Matsui. Well, at least it is bipartisan. But, again, I 
want to thank you.
    If I may just, Mr. Massanari, ask you about the funding 
situation, you mentioned four or five different areas that you 
are going to have to augment, and that would constitute the $40 
million. How long do you think that would take? Over what 
period of time are we looking at the expenditures of the $40-
plus to $70 million, do you believe?
    Mr. Massanari. It, of course, depends upon the area of 
spending, Mr. Matsui. In terms of the added security, about $20 
million of that is for additional guard service in those 322 
offices I mentioned in my testimony. We are going to provide 
that guard service for the balance of this fiscal year.
    For the claims-taking operation, it is a little tough to 
estimate how much longer that might run. After last Sunday's 
memorial service at ground zero, the claims-taking activity has 
picked up. But I would think over the next several weeks most 
of the claims will have been taken.
    The restoration operations for the New York DDS, which 
includes not only site preparation for what will likely have to 
be new space, it also includes computer equipment, furniture, 
supplies. We are talking many, many months into the future.
    Mr. Matsui. And so you believe that the--I guess the 
security is probably a large part of this, though. Is that 
right? Do you have an idea what that might be at this moment?
    Mr. Massanari. The security cost will be around $20 million 
for guard service.
    Mr. Matsui. Oh, so that will be about half the cost.
    Mr. Massanari. Yes.
    Mr. Matsui. Over the next 12 months, I would assume.
    Mr. Massanari. Yes.
    Mr. Matsui. OK.
    Mr. Massanari. Now, in addition to that--and this has not 
been factored into that $40 million--with all of the activity 
around hazardous substances and the anthrax scares, we have had 
some instances where we have had to either evacuate offices or 
even close offices for a short period of time. Thankfully, all 
of those incidents have been unfounded. There has been no 
contamination. But it has been disruptive to our operations, 
and it is going to begin to take its toll, I fear, on our 
productivity. So there will be some added cost associated with 
that.
    Mr. Matsui. I wanted to get into the anthrax issue, and I 
want to be somewhat careful because just talking about it could 
create uncertainty, and we obviously don't want to do that. But 
obviously you are aware of it, and all of the different 
regional offices throughout the country are now on alert on it. 
And because much of the processing is through the mail, I would 
imagine you do have a mechanism set up even, for example, in 
the Fresno office and elsewhere throughout the United States 
where the employees are watching this very carefully. Is that 
correct? And do you think this will go on a long period of 
time, a permanent situation? And will there be additional costs 
in that over a period of time?
    Mr. Massanari. Well, let me describe, Mr. Matsui, what we 
have done. Actually, we became involved in this very early, 
actually 2 weeks ago, because we had a number of our staff who 
had delivered mail and were in the Hart Building. So we began 
to take steps immediately to deal with the threat of anthrax.
    We have been working very closely with the Centers for 
Disease Control and Prevention (CDC) and with other Federal and 
even local health agencies. We have issued information through 
bulletins and also through interactive videos to all of our 
offices. We have issued instructions and guidance to our 
managers so that all employees are being alerted and know what 
to look for in terms of suspicious envelopes or suspicious 
packages.
    In addition to that, we have provided gloves and masks to 
employees, for any who might choose to use them. We are also 
taking precautionary steps in those facilities that receive 
mail directly from either Brentwood here in D.C. or from 
Hamilton Township in New Jersey or Morgan in New York City.
    We are actually going to be undertaking precautionary 
environmental sweeps and offering folks in those mail rooms the 
opportunity to be evaluated by local public health facilities. 
And, again, it is hard to predict how long this might last, but 
certainly we are trying to raise sensitivity and consciousness 
among our employees so that they will remain cautious and alert 
well into the future.
    Mr. Matsui. And, last, you obviously have electronic 
deposit capability, and obviously that is a savings to the 
Social Security Administration, and probably a convenience also 
to the recipient. And I do know there have been some stories on 
this in the newspapers. Is there a way--are you working on 
trying to get the word perhaps further out on that now? Because 
it may be a good opportunity to convince people that they ought 
to consider that as a way to get their check, at the same time 
having to avoid all the paper problems.
    Mr. Massanari. Yes, our press office has been very 
aggressive in this area. In fact, we had a wire story, an AP 
wire story, that was released early Monday morning, and we are 
going to continue to deal with this issue in that context, 
because there is concern expressed by beneficiaries about 
receiving paper checks. So we are using this as an opportunity 
to encourage them to avail themselves of direct deposit.
    Mr. Matsui. And then the amount of requests coming in on 
disability requests, applications for disability benefits, I 
would imagine all those are being processed on a timely basis. 
Obviously with this situation it could create some concern and 
some problems, and I am just wondering how that is----
    Mr. Massanari. The disability claims associated with the 
attacks or----
    Mr. Matsui. Well, no. This would be generally. I mean, as 
the mail comes in----
    Mr. Massanari. I see what you are saying.
    Mr. Matsui. The concern of obviously the employees, the 
legitimate concern.
    Mr. Massanari. It is a concern. In terms of so much of the 
documentation going through the mail, there is a real concern 
about delays in the process, which continues to push us toward 
ultimately an electronic process. But that is an issue, and I 
would suspect that there will be some delays in processing, 
particularly as mail gets hung up in those mail processing 
facilities that are being closed for environmental testing.
    Mr. Matsui. Well, I want to thank all three of you very 
much for your testimony and obviously for the work you have 
been doing on behalf of the country and the American people. I 
really appreciate it. And I would like to just point out I 
appreciate the comment you made, Mr. Massanari, in your opening 
statement when you talked about the disability benefits and 
survivors' benefits issue. It is so critical to the average 
American family.
    I didn't realize this until about 3 or 4 years ago when I 
really got into this whole issue of Social Security that 28 to 
30 percent of all benefits paid out are in the form of 
disability or survivors' benefits, and it is just an 
astonishing number. We really appreciate all you have done. I 
think you have given a lot of security through very difficult 
times for all of us.
    Thank you.
    Mr. Massanari. Thank you, Mr. Matsui.
    Chairman Shaw. Mr. Matsui, there is no question that Social 
Security is a lifeline for so many people today because of this 
unexpected, horrible tragedy.
    Mr. Hayworth, you may have the final word with regard to 
last night's baseball game.
    [Laughter.]
    Mr. Hayworth. Well, you know, Mr. Chairman, I was so 
pleased to hear my friend from California speak about the 
Ranking Member of the full Committee and the delightful time he 
had. I was having a delightful time until there were two outs 
at the bottom of the ninth inning. I guess it just simply goes 
to say that in the words of the book title, the great Arizona 
resident, Joe Garagiola, ``Baseball is a funny game.'' We will 
see who the last laugh is on as the series continues. But right 
now I think there have been some chuckles at our expense.
    Be that as it may, aren't we fortunate that we are able, 
even in the midst of rebounding off this trauma, to see that 
type of endeavor. It truly proves that baseball is our National 
pastime, and I welcome all of you today, World Series results 
notwithstanding.
    Chairman Shaw. Perhaps I should identify you as the 
gentleman from Arizona.
    [Laughter.]
    Mr. Hayworth. That might be good. I can see now the live 
coverage they have to put up little explanatory notes here: The 
Congressman is from Arizona, that is why he has tears down his 
cheeks.
    [Laughter.]
    Mr. Hayworth. As they sometimes very helpfully do in the 
live coverage and the tape coverage offered by C-SPAN.
    As we turn to this very serious topic, Mr. Acting 
Commissioner, I appreciate your testimony. There are obviously 
so many different issues to deal with right now.
    But at the root of that event, as investigators point out, 
as you point out in your testimony, there are indications that 
some of the terrorists had Social Security numbers and cards, 
and you offered the phrase, ``which may have been fraudulently 
obtained.''
    Dealing with this whole matter of Social Security fraud, so 
many different ideas have been proffered. We have heard some 
talk about, with the technology that may be at our disposal 
today, engineering or coming up with some sort of fraud-proof 
card. Does that warrant consideration in your mind? Is that a 
strategy that should be pursued by the Social Security 
Administration? And are there any, pardon the pun, ballpark 
figures as to what a fraud-proof card might cost?
    Mr. Massanari. Well, I am not sure there is an absolutely 
fraud-proof card, Mr. Hayworth, but certainly there are more 
counterfeit-resistant approaches that might be pursued. There 
are with the current card, of course, a number of counterfeit 
resistant features. But back in 1997, at the request of the 
Congress, we did submit a report based upon an extensive study 
that we did looking at a number of options for enhancing the 
Social Security card to make it more tamper--or counterfeit-
resistant. Those options ranged from a plastic card with the 
card holder's picture on it at sort of the low end, all the way 
out to a card that would have a memory chip or a magnetic strip 
on it that might include information regarding citizenship or 
lawful alien status. It might even include biometric data.
    The cost associated with that back in 1997--and I suspect 
those estimates are probably still pretty solid, but they 
ranged anywhere from $4 billion to $10 billion, depending upon 
which option might be pursued.
    The work-year costs associated with that--and also, at the 
request of the Congress, we structured these estimates around 
re-enumerating 280 million Americans over a 3-year period, over 
a 5-year period, and over a 10-year period. And the estimate 
for any of those options over the period of time that we would 
re-enumerate was 70,000 work-years, and, of course, that is a 
major portion of that range of $4 to $10 billion.
    It is something that can be done. It is technically 
possible. But it is also very costly.
    Mr. Hayworth. To return to your testimony about the 
terrorists, it says in the testimony, ``Some of the terrorists 
may have had Social Security cards.'' Can you share with the 
Subcommittee, do we know that more definitively now? Do we know 
with certainty that some of the perpetrators of these horrible 
acts, in fact, had Social Security cards?
    Mr. Massanari. I think we do know that. I would prefer to 
defer to my colleague, Inspector General Huse, who has been so 
much a part of this investigation. There is some indication, 
publicly announced by the U.S. Department of Justice, that in 
at least 13 of the 19 cases, the individuals may have been here 
lawfully and may have appropriately had Social Security 
numbers. But I think Mr. Huse is in a better position to talk 
about those instances in which some of those individuals may 
have gotten numbers based upon fraudulent documents. It is a 
part of the investigation, of course.
    Mr. Hayworth. Thank you very much, and I look forward to 
hearing from the Inspector General. And, again, I want to thank 
all of you for being here and for the work you are doing in 
extraordinary times. And as we have seen so often with many 
Americans in many different walks of life, we are called upon 
to do extraordinary things, and we appreciate the efforts you 
are making that can be described as heroic to make sure that 
the Social Security Administration continues to serve the 
American people.
    Thank you very much.
    Mr. Massanari. Thank you, Mr. Hayworth.
    Mr. Hayworth. Thank you, Mr. Chairman.
    Chairman Shaw. Thank you, J.D.
    Mr. Becerra.
    Mr. Becerra. Mr. Chairman, thank you very much, and to you 
first and foremost, thank you very much for convening this 
hearing and for working in such a bipartisan fashion to try to 
move us forward on some of these issues.
    Commissioner Massanari, thank you very much for all of your 
testimony to date. Hopefully we can satisfy you at some point 
pretty soon and let you move on to other endeavors in life.
    Mr. Massanari. Thank you, Mr. Becerra.
    Mr. Becerra. And, Ms. Disman and Ms. Watkins, thank you so 
very much for being here. You are probably much more needed in 
your particular offices, but we thank you very much for your 
testimony and for all the work. And please convey to all those 
people who day in and day out have been doing this kind of 
work, thank you, after September 11, but also thank you for 
everything they did before September 11. If your folks are 
anything like the folks that we have had a chance to work with 
in my office in Los Angeles, with the Social Security office in 
Los Angeles, then you have got some great folks.
    By the way, I want to also compliment you in doing your 
PSAs, Public Service Announcements, your outreach. That is so 
essential to do that early on. And the fact that you also 
reached out in Spanish I think was so essential because you 
don't want to see people losing out on an opportunity to pick 
themselves up as quickly as possible. So I compliment you on 
that.
    The estimates, Mr. Massanari, that you just gave, can you 
give us a sense--now that you have updated your numbers, have 
you submitted a request to OMB, Office of Management and 
Budget, to try to deal with the larger figure? I think you said 
$40 million for additional security and processing of claims, 
$7 million more--what was the $7 million more for?
    Mr. Massanari. The Office of the Inspector General.
    Mr. Becerra. Inspector General expenses. Have you conveyed 
that to the Office of Management and Budget and the White House 
so they can revise their $7.5 million request to the Congress?
    Mr. Massanari. Yes, that was a part of our request, and 
obviously, as you well know, Mr. Becerra, there are a lot of 
significant needs associated with that relief package. And the 
administration had to sort out and make difficult choices among 
those very significant priorities. And the decision was that 
$7.5 million would be included for SSA.
    Mr. Becerra. And I think we are going to find, as we 
continue to have hearings on the Hill, that the administration 
will have to come to us and probably request additional funding 
for the different work that all the different government 
agencies will have to make, not least of which is, of course, 
the U.S. Department of Defense, to carry on its efforts. So I 
think a number of us, if not all of us on this Committee, would 
be more than willing to try to work with you to make sure that 
we can help the administration find the dollars that it will 
take to keep you up and running.
    How long can you go on the additional $7.5 million, should 
that be the amount that is appropriated, for you to continue to 
do the work that is needed as a result of September 11?
    Mr. Massanari. Well, of the $7.5 million, about $5 million 
of that would be devoted to infrastructure support in New York 
for the disability determination unit in New York to restore 
operations, and about $2.5 million would be for security.
    We will continue to operate. We will divert funds from 
other areas to be sure that all of the needs associated with 
the aftermath of the attacks are covered. There are some costs, 
however. And the impact, of course, of diverting funds is that 
it will have some effect on processing work.
    Mr. Becerra. Does that mean that recipients, whether they 
are retired, whether they are disabled, or whether they are the 
survivors of deceased who, not as a consequence of September 
11, may find that the processing of their claims may be 
delayed?
    Mr. Massanari. Yes, that could happen. To give you just an 
example of what this could mean in terms of diverting funds, 
about $10 million, if you look at it in terms of $10 million 
increments--and in this case, we are talking a difference of 
about $33 million. But $10 million equates to just over 100 
work-years, and with 100 work-years, we process something in 
the neighborhood of 13,000 disability claims. So if you 
multiply that 13,000 cases times three, we are probably talking 
something around 40,000 disability claims that would be delayed 
because of having to divert funds. That is simply an example. 
The impact could be in another kind of claim.
    But what it will mean is that it would have some impact on 
case processing.
    Mr. Becerra. Well, let us work with you because I don't 
believe any of us want to see that occur where, as a result of 
trying to do the good work of providing assistance to the 
victims of September 11, that other very needy and those 
recipients that are expecting this assistance will have to 
suffer the consequences of any delay.
    I want to again just say thank you for that testimony. I 
hope you will let us know if some of these uncertainties of 
temporary closures of offices, the evacuations, will also 
increase your costs. So you can let us know, and we look 
forward very much to working with all of you as you continue 
your work. And I think you continue to prove that when it comes 
to the Social Security Administration and Social Security 
program, it is and has been the most successful Federal 
government program this country has ever created. And we look 
forward to working with you to keep on championing that program 
and make it clear to the American people that we are there to 
help.
    Thank you very much, and thank you, Mr. Chairman.
    Mr. Massanari. Thank you, Mr. Becerra.
    Chairman Shaw. There are a couple votes on the floor, but I 
am going to yield to Mr. Lewis before we start to vote.
    Mr. Lewis. Thank you, Mr. Chairman.
    Mr. Commissioner and Ms. Disman and Ms. Watkins, we 
certainly appreciate you coming today and giving your testimony 
and certainly appreciate the outstanding job that your team is 
doing, so thank you.
    Mr. Commissioner, going back to the Social Security card 
and the problems with fake cards, how easily is it today for 
Social Security cards to be counterfeited?
    Mr. Massanari. I think if you were taking an existing card 
and altering it, it is probably not that easy. It can certainly 
be done, but it is fairly apparent when it is done because of 
the card stock that is used and also what you call intaglio 
printing. So I think it is fairly noticeable; if one looks 
carefully, you can tell that the card has been counterfeited.
    I am probably not in the best position to determine how 
easy it is to buy a fraudulent card on the street, but 
certainly there are examples where that has been done. There is 
no question of that.
    Mr. Lewis. Do you have any data on how often it does occur, 
any information?
    Mr. Massanari. Where there are counterfeit or fraudulent 
cards?
    Mr. Lewis. Yes.
    Mr. Massanari. I don't, no. I think we would not 
necessarily know in how many instances cards have been 
counterfeited. We would be able to identify--I think the 
Inspector General may have some information on those cases 
where we have identified that there is a counterfeit card, 
where somebody has tried to present a fraudulent document, a 
fraudulent card. But beyond that, I don't have any data, no.
    Mr. Lewis. OK. I need to ask Mr. Huse some questions a 
little later concerning some concerns that our State may have 
as far as driver's licenses and Social Security cards. Thank 
you.
    Mr. Massanari. A concern we share, Mr. Lewis.
    Mr. Lewis. Thank you.
    Chairman Shaw. Mr. Johnson.
    Mr. Johnson. Thank you, Mr. Chairman. I am wondering, with 
today's technology, why you don't put photos on cards.
    Mr. Massanari. On the Social Security card itself?
    Mr. Johnson. Yes.
    Mr. Massanari. It has largely been a matter of cost. As I 
had mentioned, we did some work back in 1997 and submitted a 
report to the Congress at that time indicating how the card 
might be enhanced, and that is one possibility.
    One of the reasons, I think, is it is very costly.
    Mr. Johnson. We have a license bureau for driver's licenses 
all over the country that do that. You just walk up, they got 
your picture on the card.
    Mr. Massanari. But if you were to--I think the issue has 
been one of having to re-enumerate people. Probably right now 
about 280 million people would have to be re-enumerated. And 
our estimate was that it would take about 70,000 work-years to 
do that. It can be done, but it----
    Mr. Johnson. Well, then, how do you determine whether a guy 
has got a card fraudulently or not if you don't have--I mean, 
do you have to re-enumerate everybody to figure that out? I 
know in your statement you mentioned that you are taking the 
lead to form an interagency task force with Immigration and 
Naturalization (INS) and the U.S. Department of State to 
enumerate people as they enter the country. Can you explain how 
that would result in a more effective process? And would there 
be extra requirements for an immigrant?
    Mr. Massanari. Right now, it is a two-step process where 
INS makes the determination regarding lawful entry and also 
authorizes an individual to work. And they at INS then issue 
the appropriate documentation for that individual. Then that 
individual comes to Social Security for a Social Security 
number, presenting the INS document. Where there is a question, 
we independently verify that INS document.
    The idea of----
    Mr. Johnson. Well, if you independently verify them, how 
did some of those terrorists get cards?
    Mr. Massanari. If I might, let me come back to that. The 
advantage of enumeration at entry is it would be a one-step 
process, where at the time that the information is provided to 
INS for lawful entry, INS would then electronically transmit 
that information to us, and we would then issue a Social 
Security card based upon the information that INS had gathered 
and had verified. It would be a one-step process. And as long 
as INS had determined that it is the appropriate individual, 
then we would use that same information to enumerate them. It 
is faster, it is more secure, and it is a far more accurate 
process.
    Mr. Johnson. I agree with you. When do you expect that to 
be implemented?
    Mr. Massanari. Well, the first phase of this is supposed to 
be brought up next August. One of the reasons for our wanting 
to assemble an interagency group is to accelerate that process. 
We would like to see it brought up next spring.
    Mr. Johnson. Thank you, Mr. Chairman. Thank you, sir.
    Chairman Shaw. Thank you.
    The Committee will recess. I understand there are probably 
two votes on the floor, one on an appropriations bill and the 
other on approval of the journal. And so we will recess, but we 
will reconvene immediately following the votes. And I hope the 
witnesses can stay.
    [Recess.]
    Chairman Shaw. We are back in session.
    Mr. Brady.
    Mr. Brady. You caught me by surprise, Mr. Chairman.
    First, Mr. Commissioner and regional commissioners, thank 
you. I want to echo the praise everyone else has given you 
today. You are doing just a remarkable job, and I am very proud 
of you all.
    As you know, Mr. Commissioner, you and I are both extremely 
concerned about the backlog of Social Security disability cases 
pending before administrative law judges (ALJs). At last count, 
it was around 430,000 cases.
    You have been extremely responsive and have shown a great 
deal of leadership in working with the Committee to try to 
alleviate that situation, and I am convinced it was your help 
and leadership earlier this year that was vital in getting 
approximately 120 new administrative law judges back into the 
system. And considering that there were only 900 to 1,000 of 
them nationwide, these new judges will greatly help.
    Given the current backlog of cases you are working so 
diligently on, obviously I think we concerned the impact of a 
catastrophic event could have on a system that is already 
stretched pretty thin. Also, following the 50 people, as you 
testified, in the New York area have filed disability claims, I 
imagine there will be cases filed in the future by workers at 
the site, by others who were there during that tragedy as a 
result of breathing all the junk that was in the air and some 
other occurrences.
    And I notice, too, that you felt that needing to divert 
existing resources to the situation could also delay perhaps as 
many as 40,000 current disability cases.
    My question obviously to you is: What can we do together to 
try to bring the number of administrative law judges? I know 
that we need 120 new ones, additional ones, just to come up to 
the level we were in 1998. I know the judges are handling 50 
percent more cases than they were just 2 years ago. So the 
number of cases is growing, the number of judges has really 
shrunk, and is now starting to build back up; the time has 
lengthened, the cases have lengthened. What can we do together, 
this Committee and yourself, in trying to obtain more 
administrative law judges and reduce this backlog?
    Mr. Massanari. First, Mr. Brady, let me just share with you 
that we did have good news this past month. It was the first 
month that we have actually seen a decline in the number of 
pending hearings before ALJs in a period of almost 18 months.
    Mr. Brady. Right.
    Mr. Massanari. Let me thank you as well for your support 
and interest in this whole area and in working with us to 
enable us to bring in those 120 administrative law judges.
    As you know, there have been some restrictions and 
limitations on hiring ALJs because of a legal proceeding before 
the Merit System Protection Board (MSPB). I think at this point 
we would be hard-pressed to absorb more administrative law 
judges into the system with the 120 who we now have in 
training. They, incidentally, began their training a week ago 
Monday.
    Mr. Brady. Right.
    Mr. Massanari. They will report to their assigned offices 
on the 23rd of November, and, of course, during the next 9 to 
10 months, they will continue their training with mentors in 
their assigned offices. It takes about that long for an 
administrative law judge to become truly productive. We have 
established mentoring arrangements with current ALJs.
    We think it would probably stretch us to bring on any more 
administrative law judges much before the end of this fiscal 
year. I think it bears watching that legal proceeding very 
closely to see where that takes us and then we will need to 
determine a strategy from there. Our hope is that the merits of 
that case will be dealt with in a way that will still enable us 
to continue hiring ALJs as we need them.
    Mr. Brady. All right.
    Mr. Massanari. At this point I am not sure that more action 
needs to be taken until we see where that proceeding before the 
MSPB takes us.
    Mr. Brady. Well, if you would keep us up to date on that. I 
know your office and mine talk pretty frequently on this issue. 
And I know that more judges aren't the only answer, but it is a 
critical part of the solution and is an important part of the 
solution. I know, too, that we are working also on programs 
that create applications early on that are more complete and 
thorough, where we have better training of State examiners so 
that they hopefully make more accurate initial rulings, that we 
are working on better communication with claimants during the 
process, and I am still convinced ultimately that at some point 
this Committee or Subcommittee is going to need to look at 
revising our Federal disability law that is 30 years old and 
that appears to me has over the years we have had so many 
conflicting legal rulings and precedents and regulation that 
makes it difficult, I think, for both these examiners and these 
judges to make their decisions.
    So I think there are a number of ways that both we can work 
together and some roles this Committee can play in helping.
    Thank you, Mr. Commissioner.
    Chairman Shaw. Thank you, Mr. Brady. Mr. Cardin.
    Mr. Cardin. Well, thank you, Mr. Chairman, and let me 
repeat what I think every Member of this Committee has said, 
but it is worth repeating. We want to thank the SSA work force 
for their dedication and public service during these very, very 
trying times. So I hope, Ms. Disman, that you will take that 
back to the people of New York, the workers in New York, and 
the workers that were involved at the Pentagon, and, I must 
tell you, I think throughout the Nation. You are on the 
frontlines. It is not an easy task today to sit in a mail room 
sorting out the mail that is important for us to continue the 
essential work at SSA. And speaking for myself, but also 
speaking for all my colleagues, we thank you for your public 
service and the people who are at SSA.
    I want to talk a little bit about what is happening at SSA 
in Baltimore. We have a lot of workers there. There are a lot 
of security issues. I have had some conversation with the work 
force. I have had some conversation with the local authorities 
in Baltimore County and the State whose resources are also 
being stretched. Every time there is an anthrax concern, it 
puts additional pressure on the Baltimore County Health 
Department, on the State health people, and the other local 
governments in the region.
    One of the things I would hope that we would be looking 
into as we start to allocate resources for security is the 
needs of our local governments in working with our Federal 
agencies and dealing with the security issues and the public 
health issues.
    Truly, it is very taxing on the Federal facilities. We are 
the targets. If you want to try to disrupt our way of life, SSA 
is a target. We know that, and you are taking that very 
seriously.
    So I guess I would ask you if you would respond as to the 
cooperation you have had with the local officials in Maryland 
as well as around the rest of the Nation and whether we should 
be looking at a more coordinated strategy on the allocation of 
resources so that we can tie into, as we have, the public 
health departments of local governments and also the ability on 
environmental assessments to use the State and local resources 
as well as our own Federal resources.
    Mr. Massanari. We have been working cooperatively with 
folks in the State of Maryland as well as in the city of 
Baltimore. When I mentioned earlier some of the things that we 
were doing in response to the anthrax scares or threats, we 
have been working at the Federal level to arrange of the 
environmental sweeps. We are using private contractors who have 
been retained by the General Services Administration, working 
closely with the General Services Administration and with the 
CDC.
    But in terms of providing evaluative services, as we have 
taken employees for evaluation and potential prophylactic 
treatment, we have been working with local public health 
facilities, and they have been full cooperative with us and 
always eager to provide assistance and support.
    Yesterday we took almost 300 employees to those local 
public health facilities. We are taking another 470 today. And 
they are being very helpful to us in terms of evaluating 
employees and offering employees prophylactic treatment, that 
is, antibiotics.
    Mr. Cardin. Thank you for that. Mr. Shaw has been a leader 
in trying to give your agency a little more flexibility on its 
administrative budget. And I think this crisis points out the 
need for us to be concerned about this in that, Mr. Chairman, 
it is clear that SSA is going to have to draw from other 
priorities in order to meet the current need on security, 
whether it is just checking the people at the perimeter 
security of your buildings, as well as checking people who are 
coming in, as well as to meet the health needs. And that is 
going to take manpower away from some of the other functions. 
If I understand the math here, if the needs are $20 million and 
you are getting $7.5 million, it is going to take away from the 
other essential programs of SSA, and we will do that because 
that is the priority. But ultimately we are going to need to 
come back to these other issues, and I think it points out for 
us to give you the administrative support you need in order to 
carry out all of your missions because they are all very 
important to the people of our country.
    We talked about the victims, the direct victims of 
September 11. Their claims need to be processed and will be 
processed, but there are other people in the country whose 
claims also need to be processed, whether it is survivor 
benefits or disability benefits or receiving their retirement 
checks. They need that service to be done quickly, and they 
expect it to be done quickly. And it is our responsibility to 
make sure you have the resources to do it. And I think we need 
to work very closely to make sure those resources are made 
available.
    Thank you, Mr. Chairman.
    Chairman Shaw. Thank you, Mr. Cardin. Mr. Hulshof.
    Mr. Hulshof. Thank you, Mr. Chairman. I appreciate you 
convening this hearing, especially I know we had to postpone it 
from a previous date. I think it's been very enlightening. I 
appreciate the panel being here.
    We have learned a lot today. We have learned from those of 
you particularly responsive at the ground zero level of 
addressing those direct victims and family Members from 
September 11. We have learned, I think, about the safety 
measures that you have implemented that all of us who work with 
Social Security Administration employees and their concern 
about being safe in their offices. And I appreciate that. We 
have talked about resources.
    What I would like to focus on and really pick up is a 
thread from Congresswoman Kelly, who was the first one to 
appear here today, regarding identity theft. Mr. Massanari, as 
you know, this Committee has looked at this prior to September 
11, and I know that there are those since September 11 that 
have proposed a national identification card, which at least 
from my vantage point is not the way to go, but that we can 
certainly have that discussion.
    But as this Committee has looked at and you have talked 
about a little bit some of the identity theft--and I know 
Congresswoman Kelly talked about it--recently we learned of--I 
won't ask you to comment or verify this, but a man in North 
Carolina who was recently charged with the crime of attempting 
to steal the identity of someone who was actually killed in the 
terrorist attack.
    Congresswoman Kelly talks about what she says, and I am not 
going to adopt her terminology, but she calls it ``a government 
loophole'' that makes identity theft easier, namely, your 
Administration, the SSA, not being able to distribute death 
information more timely and suggesting that Social Security 
numbers be permanently deactivated.
    Let me just ask you that very open-ended question. Is this 
a good idea? Is this feasible? Is it desirable, that is, 
deactivation of a Social Security number upon death?
    Mr. Massanari. We certainly share the concerns of 
Congresswoman Kelly and the Financial Services Committee. We 
are doing a number of things in that regard. We have begun to 
explore first of all how we can issue the Death Master File 
electronically. We are currently releasing it to the U.S. 
Department of Commerce, who in turn sells it to subscribers in 
the private sector. We are currently sending tape cartridges 
via Federal Express, and we are able to do that within a week 
after the close of the month.
    But what we are exploring now with the U.S. Department of 
Commerce's National Technical Information Service is the 
electronic transmission of that data rather than sending it via 
Federal Express.
    We are prepared to do that immediately, or as soon as the 
U.S. Department of Commerce is ready to receive it, so we are 
now in discussions with them in that regard. In fact, we 
transmit that Death Master File to the Office of Personnel 
Management electronically now. We are also looking at ways in 
which we could release the file and update the file more 
frequently than monthly, for example, every 2 weeks or even 
weekly.
    In terms of what happens to a Social Security record when 
we receive a report of death, first of all, I think it is 
important for everyone to understand that we only issue a 
Social Security number once. It is never used again. And once 
we receive a report of death, our records are annotated, they 
are flagged indicating that the person is deceased, so that any 
request for information or anyone who wants to match against 
that record knows that that number holder is deceased.
    We maintain that record, however, because earnings during 
the year of death need to be applied to that account. Where 
earnings after the year of death are applied, there is an alert 
that is generated so an investigation can be undertaken.
    But, in addition to that, that account remains on our 
records because family members of that card holder, for 
example, a spouse or the widow, could later file for benefits 
against that account. That is why that account needs to remain 
there.
    But I think it is important to understand that our records 
are annotated and flagged so it is very clear when there is a 
match against that record that the person is deceased.
    Mr. Hulshof. Again, just a general question. I think now is 
as good a time to ask it in light of what we have been 
discussing. What is the real value of a Social Security card 
today? In other words, as I think my colleague from Arizona 
talked about, it cannot be used to determine the citizenship 
status. It is not really proof of the bearer's identity. What 
is the real value of having that actual card?
    Mr. Massanari. Well, I think it is very important to 
distinguish between the card and the number.
    Mr. Hulshof. Right.
    Mr. Massanari. It is the number that really has the value, 
and in terms of identity theft, it is the number that is stolen 
rather than the card itself.
    In most instances where you are presenting your number, you 
are not also asked to present your card. So in those instances, 
the card has limited value. It is really the number that needs 
to be protected.
    Mr. Hulshof. I appreciate that. Mr. Chairman, my time has 
expired. I appreciate it. I yield back.
    Chairman Shaw. Yes, sir. Mr. Pomeroy.
    Mr. Pomeroy. Thank you, Mr. Chairman.
    First of all, I would like to associate myself with the 
concerns raised by Congressman Hulshof. I think that we are all 
terribly worried about the misuse of these numbers, and your 
comments are somewhat assuring. But there is ongoing deep 
congressional concern here, and your further efforts will be 
appreciated, and I look forward to our ongoing discussions 
about how we best minimize any prospect for abuse of these 
numbers.
    I want to get to the issues of your resources in order to 
get the job done. Last Congress, I looked closely at a proposal 
and had discussions with the Office of Management and Budget 
about it that would have allowed the administrative functions 
of Social Security to be funded out of the trust fund, 
appropriated through the congressional appropriations process 
drawn out of the trust fund. That is a fairly common practice 
relative to trust funds. The trust fund serves the intended 
purpose, and the costs of administering that program come also 
from the trust fund.
    The Social Security trust fund is vast. While the 
administrative expenses are notable, they do not impact the 
actuarial life of the fund, again, in light of the significance 
of resources of the fund.
    Looking forward at the extraordinary pressure that there is 
going to be on general fund dollars, I am wondering what your 
thoughts are in terms of whether Congress ought to contemplate 
again shifting the ultimate source of funding for Social 
Security onto the Social Security trust fund.
    Mr. Massanari. As you know, Mr. Pomeroy, the bulk of what 
we call our LAE account, the limitation on administrative 
expenses, the bulk of that funding does come from the trust 
fund. Of course, there are spending limits because our LAE 
account is subject to the discretionary spending caps, and 
that, of course, does impose some limits on our ability to 
spend.
    From where we sit within the agency, the mechanism itself 
is less important to us than getting adequate funds to carry 
out our responsibilities. So it's not the mechanism that is 
important to us, but getting sufficient dollars to effectively 
carry out our mission.
    Mr. Pomeroy. I thank you for your comment and your gentle 
way of correcting me relative to my fundamental premise. It was 
the spending cap that was basically the constraint.
    Mr. Massanari. Yes.
    Mr. Pomeroy. OK. That really didn't make a lot of sense, 
having it under the spending cap, because the spending cap was 
for the most part trying to deal with general fund outflows.
    Well, I think that is an issue we will have to continue to 
evaluate because there aren't many functions that the Federal 
government performs more important than the prompt, competent 
execution of the Social Security program. You have to have the 
resources to do it. If we are asking more and more in terms of 
the performance part, without giving you the resources you need 
to get your job done, the person who ultimately is going to pay 
the price is those relying upon the Social Security program. So 
I hope we will be able to work forward making sure you can have 
the resources you need to get your work done.
    Thank you very much. I yield back, Mr. Chairman.
    Mr. Massanari. Thank you, Mr. Pomeroy.
    Chairman Shaw. Thank you. Mr. Collins.
    Mr. Collins. No questions.
    Chairman Shaw. Mr. Massanari, with a little bit of luck, 
this may be your last appearance before our Committee.
    Mr. Massanari. I think you said that the last time, Mr. 
Chairman.
    [Laughter.]
    Chairman Shaw. Sir, we are dealing with the Senate.
    [Laughter.]
    Chairman Shaw. But I do understand that Jo Anne Barnhart is 
about ready to be confirmed. I just want to point out our 
appreciation for the warm relationship that you have had with 
this Committee. You have been the Acting Commissioner, I would 
say without any qualification, through the roughest time since 
the beginning of the agency, together with the heroes sitting 
to your left and to your right and the people working under 
them. And we greatly appreciate your service to your country. 
We appreciate your taking this agency at a very difficult time 
and steering it through a horrendous time. And I just want to 
express the appreciation of this Committee and the American 
people for the great job that you have done.
    [Applause.]
    Chairman Shaw. Mr. Collins.
    Mr. Collins. Mr. Chairman, there is one thing that I would 
like to mention, and I believe Mr. Brady brought this up a few 
minutes ago about the administrative law judges. And I believe 
you answered in the affirmative that there needs to be and 
should be and will be some reform in that area.
    I hear this from my administrative law judges in the 
Atlanta Regional Office, and we encourage the Social Security 
Administration to follow through with that proposal. They do 
need help, and, you know, they are trying to do the best job 
they can, but there are quite a few restrictions on just how 
they can operate. And we appreciate your interest there.
    Mr. Massanari. That is an area we are working on, Mr. 
Collins, and I can assure you it is an area that our 
Commissioner Designate has a great deal of interest in, and it 
will be one of her top priorities when she arrives in the next 
couple of weeks.
    Mr. Collins. Very good. Thank you, sir.
    Chairman Shaw. Ms. Disman and Ms. Watkins, please express 
the appreciation of this Committee and I think of all the 
American people for the wonderful job that your employees are 
doing to keep this system up and working through very difficult 
times.
    Thank you.
    [Questions submitted from Chairman Shaw to Mr. Massanari, 
and his responses follow:]
                                     Social Security Administration
                                          Baltimore, Maryland 21235
    1. Every event, no matter how tragic, has to also be seen as an 
opportunity. The events of September 11 have given you a chance to 
assess what the Agency needs to function efficiently in the new world 
of terrorism. Unfortunately, this incident may not be the last, and the 
next occurrences could be very different from the first. What plans are 
you undertaking to better respond for the next time? Is there anything 
we can do to help in your efforts?
    The Social Security Administration (SSA) has gained extensive 
experience dealing with major disasters, such as Hurricane Andrew in 
Florida, Earthquakes in Los Angeles and San Francisco, and the Oklahoma 
City bombing. We will continue to draw upon these experiences as well 
as the lessons learned in addressing the World Trade Center and 
Pentagon attacks. Our operational and physical security procedures were 
effective. We are confident that our personnel will respond with the 
same commitment and flexibility to any future crises. We will 
continually refine and update our Continuity of Operations Plan to 
ensure that critical Agency activities continue in the event of a 
disaster so that we will be able to serve those who are directly 
affected by a disaster and the nation as a whole.
    SSA has divided its response to the recent terrorist activities 
into two major categories:
     Short-term initiatives to address identified weaknesses in 
the Agency emergency response, and
     Long-term strategic initiatives to ensure the Agency would 
be prepared for the full recovery of its systems and has an effective 
recovery strategy for future events.
    As part of the short-term initiatives, SSA's Office of Systems has 
created a Remote Control Center (RCC) for the National Computer Center 
(NCC). The facility allows the Agency to continue operating essential 
computer systems even when personnel do not have physical access to the 
building. During the next phase of this project, the RCC will be 
expanded so that personnel could continually occupy the facility, 
providing a secondary operating location for the NCC.
    In addition, the Agency's Occupant Emergency Plan, Emergency 
Response Plan, Continuity of Operations Plan, and Technical Procedures 
for Off-site Recovery of the NCC Computing Environment have all been 
reviewed and updated to reflect the new threats our nation faces.
    The primary long-term initiative plan is to review our disaster 
recovery alternatives. Given the number of recent innovations in 
technology, the evaluation is necessary to ensure the Agency has 
effectively covered all its critical assets from a disaster recovery 
perspective.
    2. In your testimony, you say you are following the protocols 
issued by the Centers for Disease Control relative to referring 
employees for treatments. Can you summarize for us the number of 
employees who are under going treatment? Also, have any employees 
tested positive for anthrax exposure? Has evidence of anthrax been 
found in any of your offices?
    SSA has followed the recommendations of the Centers for Disease 
Control and Prevention as well as the implementation guidelines from 
pertinent State and local health departments. In all cases, SSA 
informed our employees of these guidelines and took steps to ensure 
that staff followed current procedures. SSA maintained close contact 
with all involved health departments, advised them of exposure risks at 
SSA sites, and conveyed the various health departments' advice to 
managers and employees.
    SSA took a number of steps to ensure that employees had access to 
appropriate medical evaluations. SSA facilitated visits for 930 
employees to various health clinics.
    We tested a limited number of SSA sites with the highest potential 
for contamination. Test results for these sites have been negative for 
anthrax. Therefore, in line with State health department 
recommendations based on advice from the Centers for Disease Control, 
we advised our employees that there is no longer a need to continue 
with antibiotic prophylaxis against anthrax (unless they have been 
directed to do otherwise by their own health care provider). To date no 
SSA employees or worksites have tested positive for anthrax.
    3. You also mention that you have supplemented existing security 
and placed an additional 322 new guards in field offices. How are you 
collecting information from your employees about their concerns for 
safety? What is the feedback you are hearing from them, given the 
additional security measures you have taken? Do they tell you there is 
more to do?
    Although we have not had a formal opportunity since September 11 to 
measure employees' concerns about office security, we know that the 
attack and subsequent events have caused substantial concerns among our 
employees about the safety of the facilities in which they work. For 
example, employees are aware that concerns about possible exposure to 
anthrax have prompted the closing of a number of Social Security 
offices since September 11. Fortunately, none of these incidents 
involved actual anthrax exposures. Immediately after the September 11 
attack, we authorized the employment of security guards at all SSA 
facilities that did not already have them. We are continuing to 
evaluate the security of our offices and the safety of our employees 
and will provide enhancements where they are needed. We are confident 
that through our communications with SSA offices that most employees 
are satisfied with our response to physical security. However, we do 
still get emails and letters from individual employees raising issues. 
Let me assure you that we take our employees' concerns about security 
very seriously and we will continue to address the concerns that they 
raise.
    4. When new security features are added to Social Security cards to 
make them less counterfeitable, do you reissue the Social Security 
cards? Can you tell us how many versions of the card are out there now?
    SSA has never undertaken a mass reissuance of SSN cards, in part 
due to the prohibitive cost. When the format of the card has been 
changed or we have added new security features, the changes have been 
made prospectively. We only reissue cards at the request of the 
cardholder. In 1997, SSA estimated that 277 million cards would have to 
be reissued if more counterfeit resistant cards were to be issued to 
everyone.
    There are currently 48 different versions of the SSN card that have 
been used since 1936 when the first cards were issued, all of which 
remain valid. Since 1978, SSA has required proof of identity and 
citizenship/resident status when new or replacement cards are issued. 
The first counterfeit resistant SSN card was issued on October 31, 
1983. The current version was first used in June 1999.
    5. In light of the recent events, some individuals have called for 
a national identification card. In 1997, your Agency at the request of 
Congress, provided a report to Congress regarding options for enhancing 
the Social Security card. Would you summarize for us your overall 
findings, how Congress has dealt with this issue in the past, and what 
are the key points we would need to think about if we were to consider 
pursuing such an option?
    The immigration and welfare reform laws passed in 1996 required the 
Commissioner of Social Security to develop a prototype of a 
counterfeit-resistant Social Security Card. SSA responded by issuing a 
1997 Report to Congress entitled, ``Options for Enhancing the Social 
Security Card.'' The legislation required an evaluation of the cost and 
workload implications if an enhanced Social Security card were issued 
to all current number holders.
    To summarize the findings of the report, it was estimated in 1997 
that 277 million cards would need to be reissued, at a cost ranging 
from $3.8 billion to $9.2 billion depending on the card technology 
selected. Approximately 70,000 workyears would be required. 
Interviewing people to determine the identity of each number holder 
requires the largest cost and is the source of the greatest 
inconvenience to the public.
    Key to the future enhancement of the Social Security card is the 
need to balance privacy protection and public interests, while 
providing integrity for our data systems. Also, in deciding the 
features of the card, it would be necessary to decide in advance the 
uses to which the card would be put.
    6. In your testimony, you mention that as soon as you learned that 
some of the terrorists may have had fraudulent Social Security numbers 
and cards, you formed a high-level response team. This team, which 
includes representatives from the Office of Inspector General, has 
provided you with the first of their recommendations. Can you share 
these with us?
    The high-level response team is reexamining our enumeration process 
to determine what changes we need to make in our policies and 
procedures to ensure that we are taking necessary precautions to 
prevent misuse of Social Security numbers and cards. The team 
recommends the following seven improvements to the enumeration process. 
They are to:
     Provide refresher training on enumeration policy and 
procedures, with emphasis on enumerating noncitizens, for all involved 
staff;
     Convene a joint task force between SSA, Immigration and 
Naturalization Service (INS), the Department of State and the Office of 
Refugee Resettlement to resolve issues involving enumeration of 
noncitizens, including working out procedures for verifying INS 
documents before SSN issuance;
     Eliminate drivers' licenses as a reason for assigning a 
non-work SSN;
     Limit information released by field offices to reduce the 
potential for identity theft;
     Conduct a mandatory interview for all applicants for 
original SSNs over the age of 12. Verify the birth records of all 
applicants for original SSNs over the age of 1 and require evidence of 
identity for all children, regardless of age;
     Determine the feasibility of photocopying (or scanning) 
all documentary evidence submitted with SSN applications; and
     Enhance the Modernized Enumeration System (MES) to 
electronically record the type(s) of evidence submitted by the 
applicant for all modes of SSN application input. This ensures that an 
electronic audit trail is available for all SSN applications.
    Of these recommendations, the refresher training has been 
conducted, and a system enhancement to the Modernized Enumeration 
System has already been implemented. I anticipate that the other 
recommendations will be implemented within the next few months.
    In addition, the response team is reviewing previous Inspector 
General's recommendations with respect to enumeration. The team is also 
looking at accelerating several enumeration initiatives that had been 
underway prior to September 11.
    I am confident that these initial and other long-term 
recommendations under consideration will strengthen the safeguards in 
our enumeration process.
    7. You acknowledge that the World has changed since September 11 
and that you need to reassess the balance between customer service and 
security. You also mentioned that the response team is reviewing 
previous recommendations made by the Office of Inspector General over 
the last five years. How have the events of September 11 changed your 
view of these recommendations?
    It is clear that security has assumed a much greater importance now 
than it had before September 11, and it will have a more prominent role 
in the actions and decisions of the Social Security Administration.
    The Enumeration Response Team formed after September 11 has 
identified recommendations, including those of the Inspector General, 
that will strengthen the security of our processes. Specifically, the 
team reconsidered and recommended implementing several previous 
enumeration recommendations from the Inspector General. In addition to 
the team's review, I have also asked my Counselor to review all the 
Inspector General's recommendations.
    8. Regarding ways to improve the enumeration process, would you 
explain how enumerating at the point of entry could result in a more 
effective process? Is it easier to verify documentation?
    SSA has negotiated an agreement with INS and the Department of 
State (DOS) where the information required to assign an SSN will be 
collected as part of the immigration process. The project, known as 
Enumeration at Entry (EAE), will hopefully eliminate the need for SSA 
personnel to evaluate and verify INS or State Department documentation 
presented by an applicant.
    This process will help SSA reduce the opportunity for fraud since 
INS or DOS will be providing the information needed to issue a Social 
Security number to a noncitizen directly to SSA. Initially this process 
will be piloted for individuals admitted for permanent residence, but 
with agreement from INS and DOS, the piloted process would then be 
expanded to other non-immigrant categories.
    9. Congresswoman Sue Kelly in her testimony discussed what she sees 
as a ``government loophole'' that makes identity theft easier-namely, 
the Social Security Administration not gathering and distributing death 
information more timely and utilizing technology, and also suggesting 
that the Social Security number be permanently deactivated. What do you 
think of the points Ms. Kelly raises? Can SSA do better? Is 
deactivating SSNs feasible or desirable?
    SSA is working with other agencies, including the National 
Technical Information Service (NTIS) to implement recommendations made 
by Congresswoman Kelly. We are currently making changes to provide 
SSA's Death Master File (DMF) to NTIS on a weekly, as well as a monthly 
basis. NTIS, which receives the DMF from SSA, is making plans to 
process the files weekly and also plans to be able to share that 
information on a weekly basis to those who request the DMF from them. 
In addition, SSA has made a commitment to provide the updates to the 
DMF electronically to the 19 agencies that currently receive the file 
from SSA and are willing to process the data electronically.
    We believe that proposals to deactivate SSNs raise significant 
concerns, if the term ``deactivate'' means deleting or removing the SSN 
and the associated information from SSA's records. When we become aware 
that the person to whom a number was assigned has died, we annotate our 
records to reflect that fact. If any subsequent wage activity is 
reported, we are aware of it and can investigate. Deleting an SSN or 
removing it from our main databases would undermine key SSA operations. 
Deactivation could facilitate fraud if the deactivated numbers can be 
exploited freely (as in death cases) without raising detection flags in 
our systems. In addition, deleting SSN earnings histories from our 
records would create problems in processing claims for survivors 
benefits for individuals who become eligible long after the worker's 
death, e.g. widow.
    10. Are there automated systems enhancements, which SSA should 
implement to improve SSN verification and help eliminate identity 
theft?
    While we believe our current processes are secure, we have a number 
of systems enhancements underway to further strengthen the security of 
our enumeration processes.
    One such project is Enumeration at Entry (EAE) which we described 
in question 8.
    Another project is to expand agreements with State Departments of 
Motor Vehicles to verify SSNs during the drivers' licensing process 
through a system known as AAMVA-net. Currently 17 States participate 
and the number is expected to grow. A meeting (including 
representatives from our Office of Inspector General) was recently held 
to promote this growth.
    There are also enhancements to the Modernized Enumeration System 
(MES) underway to detect fraud-prone transactions.
    11. Has there been any thought of giving a different type of SSN to 
noncitizens? Would a different identifier help institutions, such as 
universities, manage and follow the number of foreign students? For 
organizations that rely solely on the SSN as way of legitimizing a 
person's status, would a separate number encourage an organization to 
ask for more proof of identity and purpose?
    SSA is consulting with those who are directly involved, such as law 
enforcement officials, to help determine whether an identifiably 
different Social Security number for noncitizens would be desirable. Of 
course, for SSNs issued after April 1981, SSA's own internal records 
indicate whether or not a person was a noncitizen at the time the 
number was issued.
    With respect to SSN cards, those for certain noncitizens already 
bear restrictive legends. Some identify the owner as having only 
temporary authority to work. Others bear a legend indicating that the 
SSN is not valid for employment (in the case of those who are not 
authorized by INS to work but who have a currently valid nonwork reason 
for an SSN--for example, to receive a Federally financed benefit). 
Noncitizens who have permanent work authorization receive the same card 
as U.S. citizens.
    12. The IG stated in his testimony that an SSA employee processed 
an SSN and sold it to a suspected terrorist. How exactly was this 
accomplished? How did this employee get caught for his deed? What if 
anything can be done to prevent any future occurrences?
    While I defer to the Inspector General to discuss the specifics of 
the case, I believe that any such abuses are very serious, and demand 
constant vigilance on the part of Agency managers to prevent them. We 
have an aggressive program in place to address improper or fraudulent 
activity relating both to the access to personal data in our databases 
and the issuance of SSNs.
    SSA has a comprehensive integrity review system to select cases 
which contain certain high-risk criteria. Local managers are required 
to review any case selected through the integrity review process in 
order to ensure the transaction was appropriate and accurate. If a case 
is determined to be suspicious, the local office works with the Office 
of the Inspector General to fully investigate and determine what action 
is warranted. Through this process, SSA is able to remain vigilant in 
overseeing the integrity of the enumeration process and fulfill our 
stewardship responsibilities.
    We are continually reviewing our processes to ensure that the most 
effective safeguards available are in place for maintaining the 
integrity of SSA's programs. We will work very closely with the Office 
of the Inspector General to aggressively pursue any allegations of 
improper conduct.
    13. I understand that the IG conducted an audit which focused on 
SSA pursuing matching agreements with New York and other States that 
use biometric technologies. The States which use this technology do so 
to combat fraud and identify ineligible recipients in social service 
programs. As you know, this technology is used for identification 
purposes by measuring unique characteristics such as fingerprints. In a 
recent audit report, the IG recommended that SSA pursue matching 
agreements with New York and the other States that are using this 
technology. Can you give us your thought on this? What type of benefits 
and drawbacks if any would be gained by taking advantage of this 
technology? What program savings do you believe could result?
    SSA agreed, as the Inspector General suggested, to pursue the 
feasibility of entering into a matching agreement with New York to 
determine if any SSA beneficiary, who also was receiving or had applied 
for a State benefit, refused to provide a fingerprint to the State. 
Under the Inspector General's proposal, those individuals' cases would 
be reviewed to determine if they were properly receiving benefits from 
SSA. SSA would not actually use the fingerprint data collected by the 
State. The use of these technologies even in this manner breaks new 
ground and consequently SSA is proceeding carefully, but we are 
proceeding as we agreed. At present, we are unable to estimate the 
amount of program savings that might result.
    SSA recognizes the benefits of technical advances to safeguard the 
integrity of our programs, and the Agency has demonstrated its 
commitment to use technology. The developing field of biometrics may 
well provide opportunities for SSA to improve the administration of its 
programs, and we are certainly open to those opportunities. At the same 
time, we must also be aware of the privacy concerns associated with the 
government collecting and using biometric data.

                                


    Chairman Shaw. Now the next witness I believe is just a 
single witness. We have James Huse, who is the Inspector 
General, Office of the Inspector General, from Baltimore, 
Maryland. Mr. Huse, welcome back to this Committee.

 STATEMENT OF THE HON. JAMES G. HUSE, JR., INSPECTOR GENERAL, 
  OFFICE OF INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION

    Mr. Huse. Thank you, Mr. Chairman. I am just checking my 
watch to be sure it is still morning.
    Good morning, Mr. Chairman, and Members of the 
Subcommittee. Before I start, I want to thank Acting 
Commissioner Massanari for his compliments to the Office of the 
Inspector General, and I have to say that I am often cast in a 
tough spot as the watchdog of the agency. But in regard to the 
events on September 11, we are part of the SSA team. And we 
have worked as one, and it has been an honor and a privilege 
for us to do that.
    I have come before you on many occasions to discuss the 
misuse of Social Security numbers, but never before in a 
situation such as this. In the past 5 weeks, we have learned 
that the risks inherent in failing to adequately protect the 
integrity of the SSN may have serious consequences.
    My office is currently involved in a great many 
investigations of subjects and witnesses suspected of 
association with the events of September 11. It has quickly 
become apparent just how instrumental the use of a fraudulent 
SSN has been for these individuals, who rely on aliases and 
assumed identities in order to integrate themselves anonymously 
into our society.
    I would like to describe one example of an investigation 
being conducted by the FBI and one of our field divisions 
involving an individual currently under INS detention for 
immigration violations. The investigation determined that the 
individual purchased a fraudulent SSN processed by a former SSA 
employee who was indicted and prosecuted. The fraudulent Social 
Security number and associated INS documents enabled this man 
to remain and function without restriction in the United 
States.
    This is only one example of how the SSN has been integrated 
in the national investigation into the September 11 attacks. 
Our office has been a busy participant in the investigation 
from the start.
    Across the country, our agents are assigned to joint 
terrorism task forces, and four senior investigative officials 
in Baltimore oversee all of our emergency operations. Many of 
our investigators are working full-time on the terrorism 
investigation and responding to allegations of SSN misuse. This 
has obviously left us somewhat shorthanded in other areas.
    What has become apparent in the case I discussed a moment 
ago, and in all of our work on the national investigation, is 
that a purloined SSN is as useful a tool for terrorists as it 
is for identity thieves. We must now address that reality as we 
continue our efforts to deal with these problems.
    The first step in that renewed efforts is to face again an 
unavoidable reality. While never intended to be such, the SSN 
is used as our National identifier.
    The SSN is used legitimately in so many areas of our lives 
that it is impossible to think that we can turn back the clock 
and reverse its use to tracking earnings and paying benefits, 
the uses for which it was originally designed. We can, however, 
take two critical steps.
    The first is to stop the issuance of SSNs to those who 
would use them to commit crimes. Enumeration, the process by 
which SSNs are issued by the Social Security Administration, 
has been the subject of several audits by my office, and we 
have made numerous recommendations. Most notable is the need 
for independent verification of evidentiary documents submitted 
in support of applications for SSNs. Whether by statute, by 
regulation, or by policy, SSA must be required to verify the 
evidence submitted by SSN applicants before approving any SSN 
application. And if those documents originate with the INS, the 
INS should certify them.
    H.R. 2036, introduced by this Subcommittee, does require 
verification of birth records for SSN applicants and moves us 
closer to the INS certification requirement. It is my hope that 
upon enactment of this bill, SSA and the INS will move quickly 
to establish such a program. SSA is justifiably proud of its 
track record of outstanding customer service, but we must 
achieve a more effective balance between security and 
expediency. I believe the Enumeration Work Group chartered by 
the Acting Commissioner within days of the terrorism attacks is 
developing appropriate adjustments to our business processes to 
respond to this need.
    The second step we must take is to better protect validly 
issued SSNs. The Subcommittee's bill not only provides better 
enforcement mechanisms, but is designed to stop the 
indiscriminate display of SSNs on public documents and the sale 
and purchase of SSNs over the Internet and by other means.
    By acknowledging that the SSN is our virtual national 
identifier, we accept the responsibility to protect its 
integrity--not only to prevent the financial crimes that have 
historically defined SSN misuse, but to ensure that it is not 
used for other criminal purposes as well.
    By limiting the public availability of SSN information and 
continuing to review the added value of stronger controls over 
the issuance of SSNs, even if those controls are more time-
consuming and more expensive, we can make true progress. we 
must not maintain the status quo and provide any advantage to 
those with criminal intentions.
    We have already fought long and hard to reduce SSN misuse, 
and we stand ready to do more. We know now, without question, 
that this illegal activity not only facilitates financial 
crimes, but provides capacity for organized criminal 
enterprises to sustain themselves while engaged in acts of 
terrorism. Certainly I cannot state that the SSA Office of the 
Inspector General can prevent terrorism, or even completely 
eradicate SSN misuse. But the time has come to attempt--and 
accomplish--still more.
    Thank you, and I would be happy to answer any questions.
    [The prepared statement of Mr. Huse follows:]
Statement of the Hon. James G. Huse, Jr., Inspector General, Office of 
           Inspector General, Social Security Administration
    Good morning, Chairman Shaw, Congressman Matsui, and members of the 
Subcommittee. I have come before you on many occasions to discuss the 
misuse of Social Security numbers, but never before in a situation such 
as this. In the past five weeks, we have learned that the risks 
inherent in failing to adequately protect the integrity of the SSN may 
have serious consequences.
    My office is currently involved in a great many investigations of 
subjects and witnesses suspected of association with the events of 
September 11. It has quickly become apparent just how instrumental the 
use of a fraudulent SSN has been for these individuals, who rely on 
aliases and assumed identities in order to integrate themselves 
anonymously into our society.
    I would like to describe one example of an investigation being 
conducted by the FBI and one of our Field Divisions involving an 
individual currently under INS detention for immigration violations. 
The investigation determined that the individual purchased a fraudulent 
Social Security Number processed by a former SSA employee who was 
indicted and prosecuted. The fraudulent Social Security number and 
associated INS documents enabled this man to remain and function 
without restriction in the United States.
    This is only one example of how integral the SSN has been to the 
national investigation into the September 11 attacks. Our office has 
been a busy participant in the investigation from the start. Within 
minutes of the attack on the World Trade Center, my Special Agent-in-
Charge for the New York Field Division was in contact with the FBI, 
offering the services of the eighteen Special Agents under his command. 
Our involvement in the ongoing national investigation, mandated by the 
role the SSN plays in establishing false identities and committing the 
financial crimes necessary to bankroll terrorism, has grown on a daily 
basis.
    While top management officials at our Baltimore headquarters worked 
with the Commissioners of Social Security and the Internal Revenue 
Service to secure appropriate authority to share data with the FBI, our 
field agents swung into action. Nine of our agents in the New York/New 
Jersey area remain assigned exclusively to the FBI investigation. At 
headquarters, one of our agents was quickly assigned to the FBI's 
Strategic Information and Operations Center, another to the National 
Infrastructure Protection Center. Six members of our electronic crime 
team have rendered assistance to the FBI, while two of our computer 
specialists write programs to more specifically query SSA's databases 
for information the FBI needs. Seven additional agents are fielding 
those requests for SSN information on suspects and witnesses, each of 
which is routed through the FBI's Baltimore office to our headquarters. 
Across the country, more of our agents are assigned to Joint Terrorism 
Task Forces, and four senior investigative officials in Baltimore 
oversee all of our emergency operations. Many of our investigators are 
working full-time on the terrorism investigation and responding to 
allegations of SSN misuse. This has obviously left us somewhat short-
handed in other areas.
    What has become apparent in the case I discussed a moment ago, and 
in all of our work on the national investigation, is that a purloined 
SSN is as useful a tool for terrorists as it is for identity thieves. 
We must now address that reality as we continue our efforts to deal 
with these problems.
    The first step in that renewed effort is to face again an 
unavoidable reality. While never intended to be such, the SSN is used 
as our national identifier.
    The SSN is used legitimately in so many areas of our lives that it 
is impossible to think that we can turn back the clock and reserve its 
use to tracking earnings and paying benefits, the uses for which it was 
originally designed. We can, however, take two critical steps.
    The first is to stop the issuance of SSNs to those who would use 
them to commit crimes. Enumeration, the process by which SSNs are 
issued by the Social Security Administration, has been the subject of 
several audits by my office, and we have made numerous recommendations. 
Most notable is the need for independent verification of evidentiary 
documents submitted in support of applications for SSNs. Whether by 
statute, by regulation, or by policy, SSA must be required to verify 
the evidence submitted by SSN applicants before approving any SSN 
application. And if those documents originate with the INS, the INS 
should certify them. H.R. 2036, introduced by this Subcommittee, does 
require verification of birth records for SSN applicants and moves us 
closer to the INS certification requirement. It is my hope that upon 
enactment of this Bill, SSA and the INS will move quickly to establish 
such a program. SSA is justifiably proud of its track record of 
outstanding customer service, but we must achieve a more effective 
balance between security and expediency. I believe the Enumeration Work 
Group chartered by the Acting Commissioner within days of the terrorism 
attacks is developing appropriate adjustments to our business processes 
to respond to this need.
    The second step we must take is to better protect validly issued 
SSNs. The Subcommittee's Bill not only provides better enforcement 
mechanisms, but is designed to stop the indiscriminate display of SSNs 
on public documents and the sale and purchase of SSNs over the Internet 
and by other means.
    By acknowledging that the SSN is our virtual national identifier, 
we accept the responsibility to protect its integrity--not only to 
prevent the financial crimes that have historically defined SSN misuse, 
but to ensure that it is not used for other criminal purposes as well.
    By limiting the public availability of SSN information and 
continuing to review the added value of stronger controls over the 
issuance of SSNs, even if those controls are more time consuming and 
more expensive, we can make true progress. We must not maintain the 
status quo and provide any advantage to those with criminal intentions.
    We have already fought long and hard to reduce SSN misuse, and we 
stand ready to do more. We know now, without question, that this 
illegal activity not only facilitates financial crimes, but provides 
capability for organized criminal enterprises to sustain themselves 
while engaged in acts of terrorism. Certainly I cannot state that the 
SSA Office of the Inspector General can prevent terrorism, or even 
completely eradicate SSN misuse. But the time has come to attempt--and 
accomplish--still more. Thank you, and I'd be happy to answer any 
questions.
    Chairman Shaw. Mr. Huse, how many of the terrorists had 
Social Security numbers?
    Mr. Huse. It is my understanding that all 19 had Social 
Security numbers.
    Chairman Shaw. Now, how did the fact that they have Social 
Security numbers help them to accomplish the destruction that 
they did?
    Mr. Huse. There is absolutely no doubt from the record and 
from our investigative experiences since September 11 that 
these individuals, irrespective of how they came to get a 
Social Security number--some used fraudulent documents, some 
may not have; some had expired visas. In any case, the balance 
of them shouldn't--or wouldn't have received them had all of 
our systems been integrated together.
    But the Social Security number, once obtained, allowed them 
to obtain driver's licenses, the ability to transport 
themselves. It allowed them to gain and obtain financial loans 
and credit. It enabled them to engage in commerce within the 
United States. Basically, it allowed them anonymity, the 
ability to absorb themselves into our society below the radar, 
if you will. And there is no doubt that the obtaining of the 
Social Security number is the first act that enables you to do 
all of these things.
    Chairman Shaw. Would you walk us through the process that 
each of these people had to do or you would suspect they had to 
go through in order to obtain that number?
    Mr. Huse. At every one of the instances, they would have 
come to this country with some type of documentation--passport 
and obviously some type of a visa since they were not citizens.
    Coming to the Social Security Administration, they would 
have brought these documents and filled out an application 
for----
    Chairman Shaw. They would personally have to come to the 
Social Security Administration?
    Mr. Huse. They would personally present themselves. 
Correct, sir.
    Chairman Shaw. OK.
    Mr. Huse. They would then have to assure Social Security by 
filling out an application that they were legally inside the 
United States for allowable purposes: tourism, education, work, 
be that as it may. Then Social Security looks at these 
documents and determines that they are true and not 
counterfeit.
    Chairman Shaw. Is a copy made of these documents?
    Mr. Huse. Unfortunately, a record is made of them but 
copies are not. We have hopefully--going forward, one of the 
recommendations of this work group is that we are going to try 
to start to do that.
    But this comes back to this process. There is an attempt to 
verify the visa status of these people with INS, but as this 
Subcommittee is aware, that process is somewhat--it is 
difficult because the data that INS has is not in real time. 
There is a time lapse. So there are opportunities for judgments 
to be made as to whether or not the person obtains the Social 
Security number based on what they have presented, and it is a 
possibility that these may not have the scrutiny. They are 
making this judgment based on customer service, in other words, 
for legitimate visitors to our Nation, they need to go to work 
or they need to begin to school, they can't wait. So they are 
enumerated. They get the number.
    In our post-attack work group, we will change some of those 
processes.
    Chairman Shaw. Now, when someone does come to this country, 
even if they don't have a green card or a work permit or a work 
visa, they are here on perhaps a student visa, they still would 
go in and get a Social Security card or a Social Security 
number, as I would assume they would need this in order to open 
a bank account. Some of the universities require that.
    Mr. Huse. For their student ID.
    Chairman Shaw. Use it as a student ID number, which 
practice we are discouraging and will shortly outlaw, I hope. 
What other reasons would they need a Social Security number 
for?
    Mr. Huse. When we take the instances, the horrible 
instances of the September 11 events, they would have needed a 
Social Security number to get flight lessons, for the 
applications to take--you know, to make application with a 
flight school. They certainly needed the Social Security number 
to get a driver's permit to allow them to transport themselves 
around from place to place.
    The Social Security number is so integrated into our daily 
lives that it is caused me even to shift my position somewhat 
before this Committee. I used to think we had the chance to put 
some of these things back in the box, to pull back somewhat. 
Now, looking on the realities after September 11, I wonder if 
we have to face up to the real issue about the ambiguity we all 
have about this number.
    Is it our National identifier or isn't it? It is not my 
place to make that determination or even to make policy, but I 
have to ask myself if the procedures we use now are adequate to 
the uses we have put this number to.
    Chairman Shaw. Well, Jim, very simply, it has become a 
national identifier, whether we like it or not, and I think 
what our job now is to do--the law was not drawn to make it a 
national identifier. Now what we have to do is to be sure that 
the law protects this national identification.
    But it would appear that we would still want it to be used 
when someone applies for a driver's license, although that 
number, after the issuance of the license, would be protected 
from public view.
    Mr. Huse. I think that is the ideal, and I think that is 
the right place for the number. I still truly believe we have 
an obligation to preserve the privacy of the number. However, 
it is apparent to me that we have also an equal obligation to 
make sure that this number has some integrity.
    Chairman Shaw. Do you know if the supplying of the Social 
Security number is an FAA, Federal Aviation Administration, 
requirement for flight lessons?
    Mr. Huse. I don't know that. We can find that out and get 
back to you, Mr. Chairman.
    Chairman Shaw. I wish you would because----
    Mr. Huse. I do know that the schools required the number, 
though, as they would--as most businesses do for the financing 
and application.
    Chairman Shaw. Well, even when you are not dealing with 
terrorists, I kind of want to know who is up there, I think so, 
because we are down here. And I think that is important to all 
of us. Mr. Hayworth?
    Mr. Hayworth. Thank you, Mr. Chairman.
    We appreciate your testimony, sir, and it raises many more 
questions. When you talk about flight lessons, the tragedy of 
this, in hindsight, at the Scottsdale Air Park we know that 
some of these perpetrators--strike that--murderers took their 
flight lessons at Scottsdale Air Park. I visited the facility.
    But as we are looking at this, it seems to me just hearing 
this testimony that we are going to have to devise some other 
means of student identification for foreigners who come to this 
country. I know that many of us have relied--the Social 
Security number first became an identifier for me during 
college days when grades would be posted out, and thank 
goodness people didn't have your number memorized. But even 
thinking about that action now, think about the propensity for 
someone who actually shows up to go to school for a while, may 
start as undecided, then decides to major in nuclear 
engineering, to go down the hallway and copy down numbers when 
grades are being posted.
    There are so many things that we have to take care of, but 
I think we are going to have to definitely rethink any type of 
application of foreign students for Social Security cards to be 
registered on university campuses. That is going to have to 
change.
    Inspector, recent press reports discussed the indictment of 
an individual in Phoenix based on Social Security charges with 
possible connections to the terrorist attacks. Can you tell us 
what role your office played in that investigation? And are you 
able to share any of those findings with us at this hearing 
this morning?
    Mr. Huse. Mr. Hayworth, that is true. My office, working 
with the FBI and the United States Attorney in Arizona, in 
Phoenix, have been able to effect the indictment of an 
individual who is associated with these activities of September 
11.
    I can't be too specific because some of this information is 
still part of the active investigation. But for a fact, this 
individual obtained his Social Security number using false, 
fraudulent information, and he has been indicted for those 
crimes before the United States court in Arizona. In fact, this 
past weekend, he was brought back from Europe to answer that 
indictment.
    Mr. Hayworth. Again, to amplify your testimony, Inspector, 
all 19 of the perpetrators had Social Security numbers.
    Mr. Huse. Yes. That is my understanding, that all 19 had 
Social Security numbers. Thirteen of them obtained those 
numbers, as near as we can determine, in a lawful manner, 
meaning that we decided they were worthy of receiving the 
number. And the balance, the other six, obtained them 
fraudulently, with phony numbers. In other words, 13 of the 
people at least were the same name as who they claimed to be in 
death as they were in life.
    Mr. Hayworth. So they walk right in, sit right down, I 
guess the distinction is just because it was legal or fit the 
rules, in retrospect, obviously, didn't make it right. We are 
going to have to rethink the entire process.
    Mr. Huse. That is our--those have been our recommendations 
in much of our work the past few years by my office in a range 
of audits. We do really need to verify all of the documents 
that are brought before the Social Security Administration in 
granting these numbers. Each and every one of those breeder 
documents need to be verified.
    Mr. Hayworth. Thank you, sir. Thank you, Mr. Chairman.
    Mr. Huse. I might add, no matter how long it takes, which 
is--that is the distinction in these days.
    Mr. Hayworth. I think the distinction, too, whatever it 
takes. If we have learned anything in the wake of these attacks 
on our homeland, three words sum it up: Whatever it takes, 
needs to be done.
    I thank you. Thank you, Mr. Chairman.
    Chairman Shaw. Thank you, Mr. Hayworth.
    Just a follow-up question. Is there any distinction made on 
the Social Security number that would in some way code the 
designation of the individual holding the card? Would there be 
a separate designation for a non-working visa as to a working 
visa?
    Mr. Huse. We have a process of issuing non-work Social 
Security numbers, and those numbers are able to be determined, 
as opposed to a number that is issued for work purposes. We 
have to do this because some of the visitors to the United 
States have--let me say in the past we have had to do this 
because some of the visitors have needed a Social Security 
number, certainly at least in six of our States, in order to 
get a driver's license--well, actually, in more States than 
that, but in six States it is the driver's license number. So 
the practice of issuing non-work Social Security numbers is one 
of the matters that is under review by the agency in this 
process of re-evaluating the enumeration.
    Chairman Shaw. If I might make a suggestion, it seems that 
perhaps a prefix or a code, even if it was a single letter, 
that would designate and point out whether someone is a citizen 
and what their status was, by just putting a code, and when 
someone became a citizen, that could be removed from their 
number and they would retain that number from then on. So I 
think that might be helpful in trying to identify the people as 
to what their status is in this country.
    I would assume that the flight school would not have known 
the status of the people taking those flight lessons by just 
looking at the Social Security number.
    Mr. Huse. No, they would not.
    Chairman Shaw. They could have been citizens.
    Mr. Huse. Correct. There is no way for someone in commerce 
like that to know what the number stands for.
    Chairman Shaw. I have been just handed by staff, and for 
the record, I should read this: The Social Security 
Administration issues three types of cards: the cards which 
show an individual's name and Social Security number, allowing 
that individual to work with restrictions, issued to U.S. 
citizens or people lawfully admitted to the United States with 
permanent INS work authorization. Two, the card that bears the 
legend ``Not valid for employment''--so that would be helpful--
issued to those from other countries lawfully admitted to the 
United States without work authorization from the INS, and who 
need a number because of Federal law requiring an SSN to get a 
benefit or service; and, three, the card that bears a legend 
``Valid for work only with INS authorization,'' issued to those 
who are lawfully admitted to the United States on a temporary 
basis and with the INS authorization to work.

                                     Social Security Administration
                                          Baltimore, Maryland 21235
Your Number And Card
How To Get A Number And Card

    To get an original number and card, you'll need to complete an 
Application for a Social Security Card (Form SS-5), and show documents 
that prove your age, identity, U.S. citizenship or lawful alien status.
    To get an application:

           Use www.ssa.gov/online/ss-5.html on the Internet.
           Call 1-800-772-1213.
           Or, visit a local office.

    Call your local Social Security office or our toll-free number 1-
800-772-1213 before you visit the office. Tell them what documents you 
have. That way you won't have to make a second trip.
    Remember, there is no charge to get a Social Security card. This 
service is FREE.
Types Of Cards

    We issue three types of Social Security cards:
    1. The card most people have shows your name and Social Security 
number and lets you work without restriction. We issue it to:

           U.S. citizens, or
           people lawfully admitted to the U.S. with permanent 
        Immigration and Nationalization Service (INS) work 
        authorization.

    2. The second card bears the legend, ``NOT VALID FOR EMPLOYMENT.'' 
We issue it to people:

           from other countries lawfully admitted to the U.S. 
        without work authorization from INS; and
           who need a number because of a federal law requiring 
        a Social Security number to get a benefit or service.

    3. The third card bears the legend, ``VALID FOR WORK ONLY WITH INS 
AUTHORIZATION.'' We issue it to people:

           lawfully admitted to the U.S. on a temporary basis; 
        and
           with INS authorization to work.
How To Replace Your Card

    To get a duplicate card because yours was lost or stolen, or a 
corrected card because you have changed your name, call or visit your 
local Social Security office to use this FREE service. You'll need to:

           Complete an Application for a Social Security Card 
        (Form SS-5).
           Show evidence of your identity. If you need a 
        corrected card, we need to see one or more documents which 
        identify you by the old name on our records and your new name. 
        The document showing your current identity must be of recent 
        issuance so that we can determine your continued existence.
           Show evidence of your U.S. citizenship or lawful 
        alien status if you were born outside the U.S.

    Your duplicate card will have the same name and number as your 
previous card. Your corrected card will have your new name and the same 
number as your previous card.
Proving Your Identity

    Some documents we can accept to prove your identity are:

           driver's license;
           employer ID card;
           school ID card;
           marriage or divorce record;
           health insurance card (not a Medicare card);
           military ID card;
           adoption record; or
           life insurance policy.
Protect Your Number And Records

    Your Social Security number is used to keep a record of your 
earnings. Here are some things you can do to protect your earnings 
record and to make sure it is accurate:

           Keep your number and card in a safe place to prevent 
        their theft.
           Show your card to your employer voluntarily when you 
        start a job, so your records are correct. Don't rely on your 
        memory.
           Check your name and Social Security number on your 
        pay stub and W-2 form to make sure they are correct.
Giving Your Numbers to Others

    If a business or other enterprise asks you for your Social Security 
number, you can refuse to give it to them. However, that may mean doing 
without the purchase or service for which your number was requested. 
For example, utility companies and other services ask for your Social 
Security number, but do not need it; they can do a credit check or 
identify their customers by alternative means.
    Giving your number is voluntary even when you are asked for the 
number directly. If requested, you should ask:

           why your number is needed;
           how your number will be used;
           what happens if you refuse; and
           what law requires you to give your number.

    The answers to these questions can help you decide if you want to 
give your Social Security number. The decision is yours.
    Our primary message is this--be careful with your Social Security 
number and your card to prevent their misuse.
    If you think someone is misusing your number, ask us for the 
leaflet, When Someone Misuses Your Number (Publication No. 05-10064).
Privacy of Records

    We can't prevent others from asking for your number. And we can't 
control what uses are made of your number once you give it to someone. 
However, you should know that giving it to them does not give them 
access to your Social Security records. The privacy of your records is 
guaranteed unless:

           We are required by law to disclose information to 
        another government agency.
           The information is needed to conduct Social Security 
        or other government health or welfare programs.
What Does Your Number Mean

    The nine-digit Social Security number is divided into three parts:

           The first three digits are the area number. If your 
        Social Security number was assigned before 1972 when Social 
        Security cards were issued by local offices, the area number 
        reflects the State where you applied for your number. If your 
        number was assigned in 1972 or later when we began issuing 
        Social Security cards centrally, the area number reflects the 
        State as determined by the ZIP code in the mailing address on 
        your application for the number.
           The middle two digits are the group number. They 
        have no special geographic or data significance but merely 
        serve to break the number into conveniently sized blocks for 
        orderly issuance.
           The last four digits are serial numbers. They 
        represent a straight numerical sequence of digits from 0001-
        9999 within the group.
For More Information

    Check our website at www.ssa.gov for answers to many of the 
questions you may have about Social Security. You also may call us 
toll-free at 1-800-772-1213. We can answer specific questions by phone 
from 7 a.m. until 7 p.m. on business days and provide information by 
automated phone service 24 hours a day. If you are deaf or hard of 
hearing, you may call our TTY number, 1-800-325-0778, between 7 a.m. 
and 7 p.m. on business days.
    We treat all calls confidentially-whether they're made to our toll-
free numbers or to one of our local offices. We also want to ensure 
that you receive accurate and courteous service. That is why we have a 
second Social Security representative monitor some incoming and 
outgoing telephone calls.
    Chairman Shaw. I would add to that that we should have a 
separate designation as part of the number, because I know I 
have been asked for my Social Security number for any number of 
things, including trying to get frequent-flyer miles. I won't 
give it out for any number of things. But, anyway, I can't 
remember ever being asked to produce my card. My card is my 
original card, so it is very, very old.
    Mr. Huse. As is mine, and it bears the legend, ``Not for 
identification.'' But the truth is, even in making application 
for flight lessons, or whatever you are doing, or for credit 
cards, which is also a dimension to this, you don't ever show 
the card. A lot of times if it is done online, you don't need 
to. It is the number, not the card.
    Chairman Shaw. Yes, and we need to make that part of the 
number. Mr. Pomeroy?
    Mr. Pomeroy. Mr. Chairman, I want to thank you for holding 
this very important and timely hearing.
    Inspector, I note the evolution of your position, and I 
think that it is the right direction. Indeed, the use of the 
Social Security number as a national identifier is so 
completely interwoven into 21st century commerce that there 
would be an awful lot of expense and consumer inconvenience in 
trying to unravel all of that and start with something new. So 
then the issues are, as you point out, making certain that they 
not issued improperly or under fraudulent application, and then 
that once issued, once legitimately issued, policed very 
carefully. I think your testimony is right on point. I commend 
you for your new position.
    Anything you would like to say about what brought you to 
this conclusion?
    Mr. Huse. Well, I think it is in the events following 
September 11. I think all of us as citizens have come to review 
many of the freedoms we have taken for granted in this country, 
and certainly as these issues bearing on homeland security or 
homeland defense have been brought to our attention, it seems 
to me that one of the key pieces of homeland security is the 
notion that we have some surety that we are who we say we are. 
And we have seen many, many opinions, both here in the Congress 
and in other parts of the media and other people talking about 
the efficacy of a national identification card and that type 
of--well, I mean, that is not my place. That is a far greater 
debate than I certainly feel competent to even initiated.
    But I do know that we have, if we accept the record that we 
brought here to the Subcommittee the past few years, we already 
have a de facto national identifier. So it seems important to 
me that we look at the process we have today to secure that 
identifier.
    The process we have, well intended, is certainly not as 
robust as it needs to be. That is a fact. We have to fix that. 
If we are going to accept that it is what we say it is, we have 
to push this ambiguity away.
    Then going forward, we have to look at how do we make that 
even stronger, taking into account all of the technology and 
all of the rapid information uses that we have to live and 
survive in this world today in real time. And I think then, 
well--and we have suggested this in our recommendations. Maybe 
we need to couple the number with a biometric or some sort of 
system of making it really stronger.
    None of this takes away from the uses that it has today, 
and if we control the privacy aspects by limiting the 
exploitation of the number, I think we have done a good thing. 
And I think that puts us in the right place because even if--
and, again, I am not suggesting a national identification card. 
That is not--but even if someone went that way, how would they 
ever start that process without starting with the Social 
Security number first? And it is already here.
    So no matter where we go, we move out from this point. So I 
think just logic tells us we are in the right place right now 
on this issue.
    Mr. Pomeroy. Your ongoing counsel is going to be very 
helpful to the Subcommittee. Thank you. I yield back, Mr. 
Chairman.
    Chairman Shaw. I think Big Brother, if he is not already 
here, he is on his way.
    Mr. Huse. Well, no, I think the balance, Mr. Chairman--and 
you are absolutely right. It is an obligation on us, though, 
that it doesn't become Big Brother. But, on the other hand, we 
have to make sure that there is enough there to keep us secure. 
That is a huge obligation.
    Chairman Shaw. With every bit of security, there is a loss 
of rights. We know that. And it is a question of finding the 
right trade-off. People lose rights when we put up metal 
detectors to come into this building or the Capitol. When I 
came here 20 years ago, we didn't have that. There was no 
security, hardly, just a policeman at the door.
    Mr. Lewis.
    Mr. Lewis. Yes, thank you, Mr. Chairman.
    Inspector, recently I forwarded a letter to your office 
that was from the Circuit Court Clerk in Jefferson County, 
Kentucky, with his concern about the State of Kentucky requires 
a Social Security number for an individual to receive a 
driver's license there. You mentioned there----
    Mr. Huse. Yes, and it is not alone in that, sir. I think 
most States do.
    Mr. Lewis. And he wanted--and I would like a comment from 
you. Is there something that the State or Federal Government 
can do to try to close these loopholes for fraudulent Social 
Security numbers and those individuals that are here maybe on a 
B1 or B2 tourist visa to limit their access to those numbers 
or--well, just some comments on how the States could work with 
the Federal Government to try to deal with this.
    Mr. Huse. On the first part of your question, we really do 
need to work closer with State and local governments on these 
issues. That is a fact. And even in looking at dealing with the 
Social Security number itself, we have decided that we have to 
change our approach and really participate in as many of these 
local, county, State endeavors, task forces that are brought up 
under the aegis of a local sheriff, or what have you, as we 
can. And we have adjusted our resources to start to do that.
    But all of the State licensing registries of motor 
vehicles, secretaries of State, belong to the National 
Association of Automotive Administrators--is that the right 
title? But we have received, almost at the same time we learned 
of your interest, Mr. Lewis, a letter from their national 
director over in Alexandria, and they have asked us to work 
with them. So we are going to do that, and I know they have 
sent a similar letter to Commissioner Massanari. And I think 
this is a good place to start, where we start to look at the 
common problems here, the interlocking dependence that we all 
have now with the Social Security number. It has gone way 
beyond just a Federal issue. And I think that puts obligations 
and burdens and responsibilities on us, and we are going to do 
that.
    The last part as to this whole visa issue, I think the 
President has spoken about this this week and formulated a task 
force just to look at foreign--I forget the title. Some of 
these titles are beginning to blur, they are so similar. But it 
will look at visas and why they are issued and who gets them 
and who should. And I think if we enforce the rules on visas on 
the issuing side and make them more valid, and then we link INS 
and Social Security Administration together in real time for 
cross-verification, as Commissioner Massanari suggested, we fix 
some of this because then that will take out the counterfeit or 
the phony or the illegitimate person trying to get a driver's 
license.
    Mr. Lewis. Very good. Thank you.
    Chairman Shaw. Mr. Hulshof?
    Mr. Hulshof. Thank you, Mr. Chairman.
    Following up, I think you may have even answered my 
question, Mr. Huse, but let me put it maybe in a different way, 
because you have described for us the process that a non-
citizen would undertake to obtain a Social Security number. As 
you described, SSA has to rely primarily on documents from the 
Immigration and Naturalization Service. I hesitate to put the 
question to you in this way, but what is the weakest link in 
the verification process? Is it on the visa side or the lack of 
sharing information between INS and SSA? How can we shore up 
that paper verification process?
    Mr. Huse. Well, we have been looking at that. That is 
probably the most vulnerable area, as you have correctly 
identified it.
    There are two aspects to this, and this has been recognized 
for some time. We have been engaged in an effort now for 2 
years, to my knowledge, to try and improve the interaction 
between INS and SSA. There are plans. These plans, of course, 
are resource-dependent and they get postponed or rescheduled 
based on other exigencies, and that is where I think we have to 
reallocate some of our attention. But, clearly, we have to make 
those events much closer in real time. We are headed there.
    On the other hand, the other part of this is we are driven, 
or used to be driven, before September 11, by customer service 
concerns, that, you know, we want to get this done in 5 days, 
nobody should have to wait any longer than 5 days for a card. 
We have all of these--and, you know, the truth is the balance 
of people who come to receive a Social Security number are 
legitimate, honest people, whether they are U.S. citizens or 
visitors from abroad. That is the truth. And they want to go to 
school or they want to work or do whatever they are here for.
    The only answer is to make it a one-step in real time 
verification.
    Mr. Hulshof. Would the Chairman permit one additional 
question?
    Chairman Shaw. Yes. I didn't set the clock.
    Mr. Hulshof. Let me ask you this: As much as you can 
comment, Mr. Huse, it has been reported that one of the 
perpetrators of the September 11 attack had gotten the Social 
Security number of a woman who had died, who was deceased.
    Mr. Huse. That is correct.
    Mr. Hulshof. Have you been able or has law enforcement--how 
was that accomplished? How was that individual able to obtain 
that deceased individual's Social Security number?
    Mr. Huse. Exactly where that person--who, incidentally, was 
the roommate at one time of the individual Mr. Hayworth was 
talking about indicted in Arizona this past week. Where that 
man got that deceased lady's Social Security number exactly, we 
are not sure. But we do know that there are many ways to get 
those. They are posted on the Internet. As you learned, the 
death register is sold to many commercial entities. That 
information is out there. You can buy it as a record and just 
look them up.
    If I could, Mr. Chairman, just correct one thing for the 
record. I said that all had Social Security numbers. We don't 
know that all of them had Social Security numbers. We know that 
all had multiple identifications, and some had multiple Social 
Security numbers of the 19. My investigative chief has 
accurately corrected me, and I would not want to be in error.
    Mr. Hulshof. I yield back.
    Chairman Shaw. Our staff corrects us, too.
    Mr. Huse. Well, I need a lot of correction.
    Chairman Shaw. Sometimes I think we get too much direction 
from our staff.
    [Laughter.]
    Chairman Shaw. Mr. Collins?
    Mr. Collins. Thank you, Mr. Chairman. For me at home, I 
have the last word. It is always, ``Yes, ma'am.''
    [Laughter.]
    Mr. Collins. Mr. Huse, I read just a blip of a news 
article--and I did not get the chance to read the whole 
article--that indicated that in the anti-terrorism bill there 
was a requirement for a national ID or an ID number to be put 
forth on anyone coming into this country as a non-citizen. Are 
you familiar with that?
    Mr. Huse. I am not familiar with all of the terms of the 
bill. I do not know if we saw that or----
    Mr. Collins. It said it was tucked away in the bill and 
that it would require a special ID number for those who enter 
this country as non-citizens. I am going to dig into that a 
little further, but I think that would be an interesting 
concept because I really do not see the need for Social 
Security numbers for a lot of people who come into this 
country, particularly as a student. I mean, why would they need 
a Social Security number? They are not going to work. Some type 
of ID number would be fine. And like the Chairman, I think 
there should be some distinction between citizens and non-
citizens when it comes to a Social Security number also.
    I want to ask a question about the work that is going on in 
New York and in Washington. I know you all are very active in 
working to assist in processing claims. Are you taking the list 
of missing persons and going ahead and putting together 
potential information for those people, or are you waiting for 
an application to come in to put the information together?
    Mr. Huse. I am not probably the person to--that is on the 
operation side.
    Mr. Collins. I should have asked Social Security, yes.
    Mr. Huse. You are looking at assisting the victims.
    Mr. Collins. Yes. They have a list of missing persons, and 
as they identify them, then the identification is confirmed.
    Mr. Huse. Right.
    Mr. Collins. But are we, in preparation for the 
anticipation of the confirmation of those missing persons, 
doing anything preliminary work to make sure that we can 
expedite their claims? Also, are we reducing the possibility of 
fraud?
    Mr. Huse. I am sure someone from the--we will get that 
question to Acting Commissioner Massanari, and they will answer 
you. I am sure they are, but I----
    Mr. Collins. I think that could help in reducing the 
possibility of fraud.
    Mr. Huse. Well, and that is why, again, staff--we are 
taking the list of victims as they are verified from the FBI, 
and we are incorporating them in our records. And as a matter 
of fact, this past week we have had our first case, as reported 
in the New York Times, of an individual trying to make a claim 
on benefits, Social Security benefits, fraudulently claiming 
that she had lost family members in the World Trade Center. And 
we will vigorously prosecute those cases. Trust me.
    Mr. Collins. Good. Great. You need any help?
    We handle things a little differently in prosecution in 
some areas of the country than others. Thank you for your time. 
Thank you for your work you do. You have testified before this 
Committee on a number of occasions, and it has always been a 
pleasure, and it has been very informative. We appreciate your 
work.
    Mr. Huse. Thank you, sir.
    Chairman Shaw. Mr. Huse, just a couple of points that I do 
want to discuss with you. Have you done an assessment as to 
what is being done, what precautions are out there to protect 
the employees of the Social Security Administration?
    Mr. Huse. I have, Mr. Chairman, and I have communicated my 
concerns to Acting Commissioner Massanari as I have looked at 
that. We certainly have looked at all kinds of issues, the 
physical security of our facilities and operations, also the 
issue of threats to our employees as a result of trying to do 
their jobs. And, of course, the more we have internal controls, 
the likelihood that these threats increase. So in both 
instances, we have communicated those to the Acting 
Commissioner Massanari.
    Chairman Shaw. Okay. I won't ask you the results of that 
because I don't think that would be proper in a public hearing.
    We thank you for the job that you do, and you have 
certainly been a friend of this Committee. We appreciate it.
    Also, I am going to make a part of the bill that we are 
presently contemplating on the uses of Social Security numbers, 
I am going to be considering putting some identifier with the 
number designating the citizenship status as well as the visa 
status of non-residents or non-citizens of this country.
    Mr. Huse. I think that is a good idea.
    Chairman Shaw. Thank you very much and this hearing is 
adjourned.
    [Whereupon, at 12:27 p.m., the hearing was adjourned.]
    [Questions submitted from Chairman Shaw to Mr. Huse, and 
his responses follow:]
                                     Social Security Administration
                                    Office of the Inspector General
                                     Baltimore, Maryland 21235-0001
                                                  November 30, 2001
    1. Congresswoman Sue Kelly in her testimony discussed what she sees 
as a ``government loophole'' that makes identity theft easier--namely, 
the Social Security Administration not gathering and distributing death 
information more timely and utilizing technology, and also suggesting 
that Social Security numbers be permanently deactivated. What do you 
think of the points Ms. Kelly raises? Can SSA do better? Is 
deactivating SSNs feasible or desirable?
    I believe the point raised by Congresswoman Kelly about the Social 
Security Administration (SSA) not gathering and distributing death 
information more timely is valid. SSA is considering ways to improve 
the timeliness of States' reporting of death information. SSA has 
established pilots with several States to determine the feasibility of 
having death records electronically transmitted to SSA within 48 hours. 
My office plans to review the Agency's results and plans for this 
process.
    While I agree that SSA's release of death information could be 
timelier, I am also concerned with the accuracy of death information. 
Our audit work has revealed systematic errors in the Death Master File 
(DMF), and we have recommended steps that SSA can take to improve the 
reliability of this critical data. Among these recommendations were 
matching the DMF against auxiliary benefit records to ensure that 
individuals receiving benefits in one system are not listed as deceased 
in another, and reconciling 1.3 million deaths recorded in SSA's 
benefit payment files that do not appear in the DMF. We are faced with 
striking a balance between speed and convenience on the one hand and 
accuracy and security on the other. In the post-September 11th 
environment, we must be particularly cautious in striking that balance, 
and any attempt to accelerate the death reporting process must be 
undertaken in full awareness of the importance of accuracy.
    With respect to deactivating the SSN of deceased individuals, I 
have several concerns as to the practicality and feasibility of this 
proposal. One such issue is the reliability of the DMF. In our July 
2000 audit report entitled Improving the Usefulness of Social Security 
Administration's Death Master File (A-09-98-61011) we found that about 
1.3 million beneficiaries' deaths were not recorded on the DMF. The 
report also noted that SSA does not verify the accuracy of death 
reports on the DMF for non-beneficiaries' thus, the risk of 
``deactivating'' the numbers of living persons, or failing to 
deactivate the numbers of deceased individuals poses a significant 
problem. Another issue is what would constitute ``deactivation'' 
because SSA uses SSNs for deceased persons for various legitimate 
purposes. For example, SSNs are the basis for Social Security claims by 
surviving spouses and children of the deceased. I believe further study 
would be needed before seriously contemplating the scope and 
implications of deactivating SSNs.
    2. Are there any other measures that you might suggest to help 
provide for increased homeland security?
    Within the context of the Social Security Administration and its 
programs, the most valuable contribution that SSA, my office, and the 
Subcommittee can make is to better protect the integrity of the Social 
Security number at its three stages of existence: upon issuance, during 
the life of the number holder, and after the number holder's death. Of 
these, the most critical is the first, and I would refer you to my 
testimony of November 1 and November 8 of this year for detailed 
discussions on this point.
    3. Given the increase in SSN fraud and identity theft, what role 
has your office taken in prevention and enforcement related to SSN 
misuse. Are there any federal agencies that primarily have the task of 
combating SSN misuse and ID theft?
    Under the Identity Theft and Assumption Deterrence Act of 1998, the 
Federal Trade Commission (FTC) is the central clearinghouse for 
identity theft complaints. The Identity Theft Act requires the FTC to 
log and acknowledge such complaints, provide victims with relevant 
information, and refer their complaints to appropriate entities. Both 
FTC and SSA established a website (www.consumer.gov/idtheft/ and 
www.ssa.gov/pubs/idtheft) that includes a hotline number for identity 
theft victims.
    However, given our obligation to protect the integrity of the 
Social Security number (SSN), we have not limited ourselves to 
referring cases and providing information. We are a member of the 
Identity Theft Subcommittee of the Law Enforcement Initiatives 
Committee of the Attorney General's Council on White-Collar Crime. We 
played a key role in the Treasury Department's Summit on Identity Theft 
in 2000, and hosted a national workshop on Identity Theft which was 
broadcast nationally on C-SPAN earlier this year. We participated in a 
national law enforcement conference on implementation of the 1998 
legislation, met with U.S. Sentencing Commission officials to discuss 
sentencing guidelines for identity thieves, and made a presentation at 
the Canadian Identity Theft Conference to share our work with Canadian, 
British, and Australian government officials.
    To combat Identity Theft on the front lines, we launched SSN misuse 
pilot projects in five cities across the nation to process complaints 
referred from the FTC and elsewhere. In Fiscal Year 2000, these Task 
Forces opened 176 investigations, resulting in 116 Federal and State 
convictions. We have testified before various House and Senate 
committees and subcommittees on SSN misuse and Identity Theft on 
numerous occasions, and made a number of legislative proposals to 
further reduce incidents of SSN misuse and Identity Theft.
    In addition to this external work, we have issued 13 Social 
Security number (SSN) misuse and identity theft related reports over 
the past several years. (www.ssa.gov/oig/hotreports.htm). Several of 
these reports outlined the role SSNs play in the commission of identity 
fraud crimes and highlighted some of the vulnerabilities found within 
SSA's document verification process. For example, we detected SSNs 
issued to individuals based on counterfeit evidentiary documents and 
concluded that SSA's current verification process is not sufficient to 
ensure the validity of evidentiary documents presented for original or 
replacement cards. To effectively reduce the occurrences of improper 
SSN attainment, we recommended that SSA employ effective front-end 
controls in its enumeration process.
    4. In order to combat SSN misuse, can you tell us what resources 
you have requested to address this issue? Have you received any of the 
money Congress has approved to fight terrorism?
    With respect to the second question, no, we have not received any 
of the funds earmarked for combating terrorism. With respect to what we 
have requested, we have proposed the devlopment of a multi-disciplined 
SSN misuse team that would combine the talents of forensic auditors, 
investigators, and attorneys to identify patterns and trends and better 
target audit work to address the SSN enumeration business processes and 
systems at Social Security. We are confident that we can create a 
comprehensive approach to allow for the most effective way to address 
this issue and provide assistance to SSA, Congress, the public, and law 
enforcement. To staff this initiative, we requested 114 staff, 
specifically, 88 investigative staff, 14 forensic auditors, 10 
attorneys, and 2 computer specialists. The total estimated funding that 
would be required to support this initiative would be a two-year, 
$14,000,000 increase; a $7,000,000 increase in Fiscal Year 2002, 
followed by an additional $7,000,000 increase in Fiscal Year 2003.
    5. Are there automated systems enhancements which SSA should 
implement to improve SSN verification and help eliminate identity 
theft?
    In our September 2001 audit report entitled Replacement Social 
Security Number Cards: Opportunities to Reduce the Risk of Improper 
Attainment and Misuse (A-08-00-10061), we recommended that SSA develop 
regulations and incorporate appropriate system controls to limit the 
number of replacement SSN cards an individual can receive during a 12-
month period to 3 and over a lifetime to 10. SSA agreed to look 
carefully at the issuance of replacement cards to ensure that it took 
every advantage of systematic controls, such as limits, that might 
allow it to more effectively identify risk factors and avoid the 
issuance of multiple replacement cards in questionable situations.
    In our September 2001 report entitled Audit of Enumeration at Birth 
Program (A-08-00-10047), we pointed out instances of multiple SSNs 
being assigned to newborns and recommended that SSA enhance its 
duplicate record detection and prior SSN detection routines to provide 
greater protection against the assignment of multiple SSNs. While our 
review focused on SSNs being assigned to newborns, it should be noted 
that the routines in question are used to screen all applications for 
SSNs, regardless of the age of the applicants. SSA has indicated that 
its 5-year Systems Plan Steering Committee will address our 
recommendations during its next meeting.
    Since the events of September 11th, SSA created the Enumeration 
Response team to develop proposals to strengthen the enumeration 
process. My office is a partner on this team. As a result of the team's 
work, SSA approved a recommendation to enhance its Modernized 
Enumeration System to provide an electronic audit trail, regardless of 
the mode used to process applications. Evidence information recorded on 
applications that we reviewed during past audits and evaluations was 
insufficient for verification. This information is critical if we are 
to effectively use fraud preventative techniques, such as data mining.
    6. Allegations received by the SSA Hotline involving potential 
fraudulent SSN use for identity theft increased from 62,000 cases in 
Fiscal Year 1999 to over 90,000 in Fiscal Year 2000--almost a 50 
percent increase in just one year. Can you update this data for us?
    Keeping in mind that the numbers for 1999 and 2000 represent a 
combination of pure SSN misuse allegations and program allegations, 
which experience has shown us frequently involve SSN misuse, the 
following are the numbers for 2001: We received 115,101 total 
allegations, of which 63,941 were pure SSN misuse allegations, and 
38,883 were program allegations which may also have involved SSN 
misuse, for a total of 102,824.
    7. Why doesn't SSA require a photo-id when an adult applies for an 
SSN? Have you recommended that a photo-ID be required?
    SSA doesn't require a photo-ID when an adult applies for a SSN card 
because not everyone has a photo-ID. The general rule for identity 
evidence is that the document must have been established at a later 
time and for a different purpose than the birth record, and be of 
recent issuance so as to establish the individual's continued 
existence.
    When an adult United States citizen applies for an original SSN 
they must have a face-to-face interview in a local field office and 
answer questions pertaining to the reason they have reached adulthood 
without obtaining a SSN. They must also submit a birth certificate and 
an identity document. If the applicant is either a United States 
citizen or foreign born alien, they are required to submit proof of age 
and identity, and proof of either (1) work-authorized lawful alien 
status, or (2) lawful alien status and a valid non-work reason.
    We have not specifically recommended that SSA require a photo ID 
before issuing a Social Security number.
    8. Has there been any thought of giving a different type of SSN to 
noncitizens? Would a different identifier help institutions, such as 
universities, manage and follow the number of foreign students? For 
organizations that rely solely on the SSN as way of legitimizing a 
person's status, would a separate number encourage an organization to 
ask for more proof of identity and purpose?
    I am not aware of any SSA efforts to assign a different type of SSN 
to noncitizens. Instead, SSA attempts to prevent and reduce SSN misuse 
by limiting the issuance of original and replacement SSNs to 
noncitizens with work authorization or a valid nonwork reason.
    While a different identifier (distinct series of SSNs) would help 
institutions, such as universities, manage and follow the number of 
foreign students who are conducting their activities in a legitimate 
manner, it would likely be of minimum value in tracking those 
individuals who enter the country under pretense. Individuals who have 
other intentions, such as terrorism, would likely circumvent the system 
and avoid being associated with a number designed to identify and track 
them.
    If SSA issued a separate number for noncitizens, it would provide 
notice that this number was for very specific purposes. Whether this 
would result in any meaningful change would be dependent on the level 
of diligence that organizations used to verify that the correct 
individual was using the number for an authorized purpose.
    9. You mention in your testimony that your office has completed 
several audits regarding SSA's enumeration process. You touch on some 
of the improvements to the process in your testimony, including 
verifying the personal identification evidence submitted by SSN 
applicant. Are there any other process improvements, both short and 
long-term you could recommend, especially with regard to those 
individuals who are not citizens? How quickly would it take to make 
such improvements? Would SSA support these?
    SSA is working with INS and the State Department on a program that 
would provide for the enumeration of noncitizens at the port of entry 
(``Enumeration at Entry'' program). We believe that this program will 
be extremely beneficial once fully implemented. However, we are 
concerned that full implementation could be years away.
    Because many cases of identity fraud involve improperly obtained 
replacement SSN cards, we believe SSA needs to develop a combination of 
regulations and systems controls to limit the number of replacement 
cards an individual can receive during a specified period. Under 
current SSA policy, any individual can obtain up to 52 replacement SSN 
cards in a year. SSA has recently formed an inter-component workgroup 
to look at the issuance of replacement SSN cards to ensure that SSA 
does not issue multiple cards in questionable situations.
    SSA could expand its data matching activities with other Federal, 
State, and local government entities and explore other innovative 
technologies such as biometrics. Although SSA has a number of matching 
agreements in place with State agencies (for example, Bureaus of Vital 
Statistics) we believe SSA could benefit from expanding computer 
matches with States and other Federal agencies to include individuals 
who had benefits terminated due to confirmed or suspected fraud. While 
the use of biometrics may present privacy concerns, given the tragic 
events of September 11, we must seriously weigh these concerns against 
the need for protecting our critical assets. Although biometric 
technologies are available, I am unsure how quickly SSA could implement 
such tools.
    10. What type of role do you envision SSA having with the 
Immigration and Naturalization Service (INS)? How could SSA work with 
the INS in improving this process?
    We hope that SSA will continue to collaborate with the INS to 
develop a better understanding of the extent that immigration issues 
contribute to SSN misuse and identity theft. SSA, INS and the State 
Department are working on agreements that will enable INS and the State 
Department to collect enumeration data from noncitizens entering the 
United States. Although SSA will still process the SSN applications, 
the agencies believe this initiative will significantly reduce the 
possibility of SSA accepting counterfeit documentation and will 
eliminate duplicate contacts that noncitizens now must make to obtain 
SSNs. Until full implementation of this initiative, we continue to 
believe that SSA should obtain independent verification from the 
issuing Agency (for example, INS and State Department) for all 
evidentiary documents submitted by noncitizens before issuing an 
original SSN.
    SSA and INS are also working to provide all field offices on-line 
access to INS' Nonimmigrant Index System. This system would allow SSA 
personnel to verify documents submitted by noncitizens. Currently, SSA 
can only verify documents submitted by noncitizens with alien 
registration numbers through the Systematic Alien Verification for 
Entitlements program.
    Since the events of September 11th, SSA's Enumeration Response Team 
recommended that SSA join a task force with the INS, State Department, 
and the Office of Refugee Resettlement to work out procedures for 
verifying noncitizen documentation.
    Ultimately, the success of SSA's efforts will depend upon the 
priority it places on combating SSN misuse and identity theft and how 
successful it is in obtaining assistance and support from the INS.
    11. You stated in your testimony that an SSA employee processed an 
SSN and sold it to a suspected terrorist. How exactly was this 
accomplished? How did this employee get caught for his deed? What if 
anything can be done to prevent future occurrences?
    The Social Security Administration conducts a computer audit-based 
management review designed to detect suspicious patterns in the realm 
of employee computer access and transactions. In 1999, such a review 
revealed twenty initial SSN applications processed by a particular SSA 
employee that were suspicious. The District Office manager referred the 
case to the OIG, which initiated an investigation. The OIG quickly 
discovered that the twenty Social Security cards identified as 
suspicious were only the tip of the iceberg. In fact, some 163 suspect 
applications had been processed by this employee. Further investigation 
by the OIG, working with the FBI, and including information obtained 
from the Postal Service and the INS, determined that the SSA employee 
was processing fraudulent SSN applications which were in turn based on 
fraudulent INS documents. Because SSA cannot yet verify INS records in 
real time, this scam was detected only through the internal computer 
audit process and the OIG investigation, and by then, these 
fraudulently obtained Social Security cards were issued, sent to 
various post office boxes and then sold on the open market.
    This case is a clear example of the need to verify records produced 
in support of SSN applications, particularly INS records. In all of the 
163 cases cited above, INS alien registration numbers were submitted as 
proof of identity and residency in support of the SSN applications. 
Investigation revealed that in all but a few of these cases, the alien 
registration numbers simply didn't exist. It is critical that before an 
SSN is issued, the documents presented in support of the application be 
verified, especially when the documents in question are INS documents.
    12. Is SSA required to keep copies of identification and 
citizenship evidence on file when it issues a SSN? Why not?
    SSA policy requires the visual examination of identification and 
citizenship evidence documents and the recording of this information on 
the SS-5 application. However, SSA does not require field office 
personnel to maintain copies of evidence on file. SSA maintains copies 
of the SS-5 on microfiche. Field office personnel copy suspect or 
fraudulent documents for review and referral purposes, not for 
documentation purposes. Since there were approximately 18.4 million SSN 
applications (original and replacement) for fiscal year 2001, hard copy 
storage of evidence of identity and citizenship status would likely be 
overwhelming.
    On November 1, 2001 the Acting Commissioner of Social Security 
approved several recommendations resulting from the work of the 
Enumeration Response Team, which SSA created to strengthen the 
enumeration process. This workgroup recommended that SSA expedite 
implementation of a pilot to photocopy or scan all documentary evidence 
submitted with SS-5 applications. The plan is to conduct an aggressive 
pilot, with broad scope, in at least 2 regions to determine the impact 
of the proposal. SSA plans to pilot this proposal in the New York and 
San Francisco regions, and it will include the following:
     For original applications, interviewers will photocopy all 
documentary evidence submitted with SS-5.
     Offices will maintain applications with the documentation 
in a holding file for a specified period of time.
     The pilots will eventually test the utility of scanning 
and indexing rather than just photocopying evidence.
    13. I understand that the IG conducted an audit which focused on 
SSA pursuing matching agreements with New York and other States that 
use biometric technologies. The States which use this technology do so 
to combat fraud and identify ineligible recipients in social service 
programs. As you know, this technology is used for identification 
purposes by measuring unique characteristics such as fingerprints. In a 
recent audit report, you recommended that SSA pursue matching 
agreements with New York and the other States that are using this 
technology. Can you expound on this? What type of benefits and 
drawbacks if any would be gained by taking advantage of this 
technology? What program savings do you believe could result?
    In our January 2000 report entitled The Social Security 
Administration Is Pursuing Matching Agreements With New York and Other 
States Using Biometric Technologies, we recommended that SSA: (1) 
pursue a matching agreement with New York so the Agency can use the 
results of the State's biometric technologies, and (2) initiate pilot 
reviews to assess the cost-efficiency of matching data with other 
States that use biometrics in their social service programs. At the 
time of our report, almost a dozen States were using or had plans to 
adopt biometric technologies in their social service programs. In 
adopting biometric technologies, States had deterred and detected 
individuals attempting to use multiple identities to apply for State 
benefits, and realized significant savings. For example, New York 
estimated savings of almost $400 million in the first 2 years of their 
program.
    The chief benefit of biometrics is that it offers a potentially 
foolproof means of verifying a person's identity. The drawback is that 
it is perceived by some as an invasion of privacy. Without a matching 
agreement, we were precluded from investigating individual cases. 
Therefore, we did not measure direct program savings to SSA. However, 
we found that SSA paid individuals over $60 million in Social Security 
benefits who refused to participate in New York's finger-imaging 
program.

                                


    [Submission for the record follows:]

                                    ERISA Industry Committee (ERIC)
                                          Washington, DC 20005-3509
                                                   October 31, 2001
The Honorable E. Clay Shaw, Jr.
Chairman
Subcommittee on Social Security
U.S. House of Representatives
1102 Longworth House Office Building
Washington, DC 20515
Dear Mr. Chairman:
    The ERISA Industry Committee (ERIC), representing the employee 
benefits interests of major employers, fully supports the goal of the 
Social Security Number Privacy and Identity Theft Prevention Act of 
2001 (H.R. 2036) to stem the proliferation of ``identity theft,'' and 
other violations of individual privacy, including those that may be 
involved in future terrorist attacks. However, H.R. 2036 as currently 
drafted would substantially interfere with the legitimate 
administration of employee benefit plans and seriously compromise the 
ability of employers to offer defined benefit pension plans, 401(k) 
accounts, prescription drug and other health and welfare benefits 
safely and efficiently to their employees and those employees' 
families.
    The intention of H.R. 2036 in general, and Title II of the bill in 
particular, is to prevent misuse of social security numbers. Title II 
prohibits the ``sale,'' ``purchase,'' or ``display to the general 
public'' of an individual's social security number. While the intention 
of that prohibition is clearly defined, the terms ``sale,'' 
``purchase,'' and ``display to the general public'' are not. Those 
ambiguous definitions risk making legitimate and beneficial uses of 
social security numbers a violation of Federal criminal law.
    ERIC understands that the intention of the bill's supporters is not 
to prohibit legitimate uses of social security numbers. We have been 
working with staff to find a solution though more precise legislative 
drafting. ERIC looks forward to continuing to work with staff and with 
the Committee to effectively address the problem of identity theft 
without creating unintentional barriers to the provision of pension, 
health and other benefits to employees.
    Please do not hesitate to contact us for more information about 
this matter.
            Very truly yours,
                                                    Mark J. Ugoretz
                                                          President
                                                  Janice M. Gregory
                                                     Vice President