[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]


 
    IDENTIFICATION DOCUMENTS FRAUD AND THE IMPLICATION FOR HOMELAND 
                                SECURITY

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

                                HEARING

                               before the

                          SELECT COMMITTEE ON
                           HOMELAND SECURITY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 1, 2003

                               __________

                           Serial No. 108-28

                               __________

    Printed for the use of the Select Committee on Homeland Security


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house


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                 SELECT COMMITTEE ON HOMELAND SECURITY

                 Christopher Cox, California, Chairman

Jennifer Dunn, Washington            Jim Turner, Texas, Ranking Member
C.W. Bill Young, Florida             Bennie G. Thompson, Mississppi
Don Young, Alaska                    Loretta Sanchez, California
F. James Sensenbrenner, Jr.,         Edward J. Markey, Massachusetts
Wisconsin                            Norman D. Dicks, Washington
W.J. (Billy) Tauzin, Louisiana       Barney Frank, Massachusetts
David Dreier, California             Jane Harman, California
Duncan Hunter, California            Benjamin L. Cardin, Maryland
Harold Rogers, Kentucky              Louise McIntosh Slaughter, New 
Sherwood Boehlert, New York          York
Lamar S. Smith, Texas                Peter A. DeFazio, Oregon
Curt Weldon, Pennsylvania            Nita M. Lowey, New York
Christopher Shays, Connecticut       Robert E. Andrews, New Jersey
Porter J. Goss, Florida              Eleanor Holmes Norton, District of 
Dave Camp, Michigan                  Columbia
Lincoln Diaz-Balart, Florida         Zoe Lofgren, California
Bob Goodlatte, Virginia              Karen McCarthy, Missouri
Ernest J. Istook, Jr., Oklahoma      Sheila Jackson-Lee, Texas
Peter T. King, New York              Bill Pascrell, Jr., New Jersey
John Linder, Georgia                 Donna M. Christensen, U.S. Virgin 
John B. Shadegg, Arizona             Islands
Mark E. Souder, Indiana              Bob Etheridge, North Carolina
Mac Thornberry, Texas                Charles Gonzalez, Texas
Jim Gibbons, Nevada                  Ken Lucas, Kentucky
Kay Granger, Texas                   James R. Langevin, Rhode Island
Pete Sessions, Texas                 Kendrick B. Meek, Florida
John E. Sweeney, New York

                      John Gannon, Chief of Staff

         Uttam Dhillon, Chief Counsel and Deputy Staff Director

               David H. Schanzer, Democrat Staff Director

                    Michael S. Twinchek, Chief Clerk

                                  (II)





                            C O N T E N T S



                               STATEMENTS

The Honorable Christopher Cox, Chairman, Select Committee on 
  Homeland Security
  Oral Statement.................................................     1
  Prepared Statement.............................................     4
The Honorable Robert E. Andrews, a Representative in Congress 
  From the State of New Jersey...................................    58
The Honorable Dave Camp, a Representative in Congress From the 
  State of Michigan..............................................    49
The Honorable Peter A. DeFazio, a Representative in Congress From 
  the State of Oregon............................................    45
The Honorable Bob Etheridge, a Representative in Congress From 
  the State of North Carolina....................................    64
The Honorable Duncan Hunter, a Representative in Congress From 
  the State of California........................................    74
The Honorable Sheila Jackson-Lee, a Representative in Congress 
  From the State of Texas........................................     8
The Honorable Kendrick B. Meek, a Representative in Congress From 
  the State of Florida...........................................    70
The Honorable Eleanor Holmes Norton, a Representative in Congress 
  From the District of Columbia..................................    51
The Honorable John B. Shadegg, a Representative in Congress From 
  the State of Arizona...........................................    54
The Honorable Christopher Shays, a Representative in Congress 
  From the State of Connecticut..................................    60
The Honorable Louise McIntosh Slaughter, a Representative in 
  Congress From the State of New York............................    74
The Honorable Lamar S. Smith, a Representative in Congress From 
  the State of Texas.............................................     7
The Honorable Jim Turner, a Representative in Congress From the 
  State of Texas.................................................     5

                               Witnesses

The Honorable C. Stewart Verdery, Jr., Assistant Secretary, 
  Border and Transportation Security Policy Directorate, 
  Department of Homeland Security
  Oral Statement.................................................     9
  Prepared Statement.............................................    11
Mr. Joseph R. Carico, Chief Deputy Attorney General, Commonwealth 
  of Virginia
  Oral Statement.................................................    29
  Prepared Statement.............................................    30
Mr. Roscoe C. Howard, Jr., United States Attorney for the 
  District of Columbia, Department of Justice
  Oral Statement.................................................    26
  Prepared Statement.............................................    27
Mr. Keith M. Kiser, Chairman, American Association of Motor 
  Vehicle Administrators
  Oral Statement.................................................    35
  Prepared Statement.............................................    37
Mr. Ronald D. Malfi, Director, Office of Special Investigations, 
  General Accounting Office
  Oral Statement.................................................    32
  Prepared Statement.............................................    34

                                 (III)

?

Mr. Paul J. McNulty, United States Attorney, Eastern District of 
  Virginia Department of Justice
  Oral Statement.................................................    21
  Prepared Statement.............................................    22
Mr. John Pistole, Assistant Director for Counterrorism, Federal 
  Bureau of Investigation
  Oral Statement.................................................    16
  Prepared Statement.............................................    18

                   Material submitted for the Record

Questions and Responses for the Record...........................    76

                                  (IV)


 
   HEARING ON IDENTIFICATION DOCUMENTS FRAUD AND THE IMPLICATION FOR 
                           HOMELAND SECURITY

                              ----------                              


                       Wednesday, October 1, 2003

                     U.S. House of Representatives,
                     Select Committee on Homeland Security,
                                                    Washington, DC.
    The committee met, pursuant to call, at 1:15 p.m., in room 
2318, Rayburn House Office Building, Hon. Christopher Cox 
[chairman of the committee] presiding.
    Present: Representatives Cox, Smith, Shays, Camp, Diaz-
Balart, Linder, Shadegg, Gibbons, Sessions, Hunter, Turner, 
Sanchez, Markey, Slaughter, DeFazio, Andrews, Norton, McCarthy, 
Jackson Lee, Christensen, Etheridge, Lucas of Kentucky and 
Meek.
    Chairman Cox. [Presiding.] Good afternoon, a quorum being 
present, the Select Committee on Homeland Security will come to 
order.
    The committee is meeting today to consider how lax 
government policies toward the issuance of official 
identification documents, such as driver's licenses, are 
becoming a dangerously weak link in the war on terrorism. On 
September 11th, 2001, Al Qaeda slipped into airports in Boston, 
Newark, and Washington, D.C. undetected. No less than seven of 
these terrorists used authentic Virginia identification cards 
obtained from the Virginia Department of Motor Vehicles.
    The terrorists used Virginia identification cards for a 
reason. Although not a single one of these terrorists was 
actually a lawful resident of Virginia, they knew the 
weaknesses of Virginia's identification process and they 
exploited those weaknesses in their plot to kill thousands of 
Americans.
    Here is how they did it. In August 2001, Hani Hanjour, 
whose picture is on the screen, went to the DMV in Springfield, 
Virginia where he used a false address to obtain an 
identification card. And that false address of course, among 
other things, falsified his state of residence. Hanjour would 
wind up flying into the Pentagon.
    The same day, Khalid Almihdhar went to the same Virginia 
DMV and likewise used false information to obtain his Virginia 
license. The next day, Hanjour and Almihdhar used their new 
cards to attest that a third 9/11 hijacker, Majed Moqed, lived 
in Virginia. That allowed him to get an identification card.
    That same day they got an I.D. for a fourth hijacker, Salem 
Alhazmi in exactly the same way. Later in August, Hanjour 
signed a DMV form for Ziad Samir Jarrah. He would eventually be 
one of the hijackers on United Flight 93 headed for Washington 
which crashed in Pennsylvania.
    Abdulaziz Alomari, who crashed into the World Trade Center, 
also had obtained an illegal Virginia I.D. card. And so did 
Ahmed Alghamdi. He used his Virginia identification card to 
board one of the planes that hit the World Trade Center. 
Although none of us thought that the horrors of that day would 
or could ever happen, we vowed as a nation on 9/11, ``Never 
again.''
    To the credit of the Commonwealth of Virginia, the 
governor, the attorney general and the legislature acted 
quickly and they changed their laws. They tightened the rules 
for the issuance of driver's licenses and I.D. cards to prevent 
further abuse and to protect their citizens. But according to a 
recent General Accounting Office report, even as Virginia has 
moved to protect the integrity of its identification system, 
several other states continue to administer loophole-ridden 
systems.
    In these states, the Department of Motor Vehicles invites 
terrorists and criminals to create multiple fraudulent 
identities. And one state, California, has actually amended its 
laws to make things worse, introducing the very problems that 
Virginia had before 9/11.
    In August, our friend and colleague, Representative Eleanor 
Holmes Norton, wrote to me and to the ranking member to request 
this hearing into the dangers of fraudulent I.D. cards. This is 
a problem she has seen first-hand in the District of Columbia 
and that plagues too many other jurisdictions in our nation. In 
particular, she stressed the problems that laxity in government 
identification cards creates for homeland security, and I 
agree.
    Thank you, Eleanor, for your vigilance on this important 
issue.
    We all know that a driver's license is the most commonly 
used form of identification in America. We use it to board 
airplanes, to buy weapons, to enter secured government 
facilities, to open bank accounts, to cash checks and to cross 
international borders. A driver's license carries a presumption 
of authenticity that establishes legitimacy; that is why Al 
Qaeda operatives here in the United States wanted them and why 
they still want them.
    Some of the 9/11 terrorists used their true identities, 
others used false names. In each case, however, the pattern was 
the same: the terrorists found it simple to obtain genuine 
government-issued I.D. cards by submitting false information to 
a DMV. As I said, Virginia has moved swiftly to close these 
loopholes; California has moved to widen them.
    Recently, the GAO sent three undercover agents into 
separate offices of the California DMV, each with false 
identification, purportedly from Texas, which they had 
manufactured themselves on a desktop computer using PhotoShop. 
According to the GAO, the documents should have been easily 
identified as forgeries. To make it especially easy for the 
California DMV to stop the fraud each of the three undercover 
agents used the same fake name. Yet California cheerfully 
issued California's driver's license to all three of them; all 
based on the same poor-quality forged documents and all using 
exactly the same name.
    According to the GAO, California has no systems in place to 
detect attempts by terrorists or criminals to obtain driver's 
licenses, yet the DMV employees have no training in what to do 
with false documents when they see them. And there is nothing 
to stop an Al Qaeda member or a drug runner or a common 
criminal from doing just what their undercover agents did to 
obtain a California driver's license with no legitimate backup 
identification.
    And all of this was true before California changed its law 
a few weeks ago to make identity theft and fraudulent license 
issuance easier than ever. California's new law actually allows 
an individual to obtain a driver's license using documents that 
we know, to a certainty, are not and cannot be secure. In 
California, an Al Qaeda operative may now obtain a driver's 
license with a taxpayer identification number issued by the 
IRS, but the IRS has repeatedly stated that this taxpayer 
identification is not a reliable means to identify a person and 
should not be used for identification purposes.
    In fact, a taxpayer identification number can be obtained 
by a third party; that is, you can obtain a taxpayer 
identification number for someone else, or someone else can 
obtain one in your name. And it can be obtained by mail, an 
applicant need not even appear in person.
    For all of these reasons, the IRS has posted a warning on 
its website that taxpayer identification numbers do not prove 
identity outside the tax system and should not be offered or 
accepted as identification for non-tax purposes. So says the 
IRS, yet the state of California has now changed its law to do 
exactly that. It is as if 9/11 never happened.
    Likewise, both the Department of Homeland Security and the 
FBI have stated that they have serious concerns regarding the 
reliability for identification purposes of the matricular 
consular, a sort of, ``I.D. on the fly'' issued by Mexican 
consulates in the United States. It too, is acceptable 
documentation to obtain a driver's license in California under 
the new law.
    Homeland Security Secretary Tom Ridge has said that states 
and financial institutions that rely upon the matricular 
consular do so at their own risk. California has decided to 
incur that risk on behalf of its 30 million people so that, 
ironically, the state of California now accepts as secure a 
document that most Mexican provincial governments do not.
    This is hardly a sign of post-9/11 progress in the area of 
securing us against the dangers of document fraud. To meet the 
terrorist threat, we need to get better, more reliable 
identification information to our customs and immigration 
inspectors, to state DMVs, to the TSA, and to the law 
enforcement security personnel and civilians who need it to 
ensure our safety. The Congress and this committee must 
consider whether it is not time for uniform minimum standards 
for identification to board aircraft and to purchase dangerous 
weapons.
    Our 50 states, territories and the District of Columbia 
need direction from the Department of Homeland Security about 
the best way to defend against document fraud and identity 
theft. We need to continue the development of technology to 
help ensure more reliable identification, and we need to 
provide training for our local, state and Federal officers and 
civilian employees who check I.D.s everyday at airports, DMVs, 
gun shops, banks and on our borders.
    In short, we need to ensure that the DHS and the Congress 
are doing all we can to prevent document fraud and identity 
theft, so that we can keep our bi-partisan promise in the 
crucible of 9/11, ``Never again.''

 PREPARED STATEMENT OF THE HONORABLE CHRISTOPHER COX, CHAIRMAN SELECT 
                     COMMITTEE ON HOMELAND SECURITY

    On September 11, 2001 al Qaeda slipped into airports in Boston, 
Newark, and Washington, DC undetected. No less than 7 of these 
terrorists used authentic Virginia identification cards obtained from 
the Virginia Department of Motor Vehicles.
    The terrorists used Virginia identification cards for a reason. 
Although not a single one of these terrorists was actually a lawful 
resident of Virginia, they knew the weaknesses of Virginia's 
identification process; and they exploited those weaknesses in their 
plot to kill thousand of Americans.
    Here is how they did it. In August 2001, Hani Hanjour went to the 
DMV in Springfield, VA, where he used a false address to obtain an 
identification card. Hanjour would wind up flying into the Pentagon. 
The same day, Khalid Almihdhar went to the same Virginia DMV and 
likewise used false information to obtain his Virginia's license. The 
next day, Hanjour and Almihdhar used their new cards to attest that a 
third 9-11 hijacker, Majed Moqess, lived in Virgina. That allowed him 
to get an identification card. That same day, they got an ID for a 4th 
hijacker, Salem Alhamzi, in exactly the same way. Later in August, 
Hanjour signed a DMV form for Ziad Samir Jarrah. He would eventually be 
one of the hijackers on United Flight 93, headed for Washington, DC, 
which crashed in Pennsylvania. Abdulaziz Alomari, who crashed into the 
World Trade Center, also had obtained an illegal Virginia ID card. And 
so did Ahmed Alghamdi; he used his Virginia identification card to 
board one of the planes that hit the World Trade Center.
    Almost none of us thought that the horrors of that day would or 
could ever happen. But in the wake of 9-11, we vowed, as a nation, 
``never again.'' To the credit of the Commonwealth of Virginia, the 
governor, the attorney general, and the legislature acted quickly to 
change their laws. They tightened the rules for the issuance of 
driver's licenses and ID cards to prevent further abuse, and to protect 
their citizens. But according to a recent General Accounting Office 
report, even as Virginia has moved to protect the integrity of its 
identification system, several other states continue to administer 
loophole-ridden systems. In these states, the Department of Motor 
Vehicles invites terrorists and criminals to create multiple fraudulent 
identities. And one state, California, has actually amended its laws to 
make things worse, and to introduce the very problems that Virginia had 
before 9-11.
    In August, our friend and colleague, Eleanor Holmes Norton, wrote 
to me and the Ranking Member to request this hearing into the dangers 
of fraudulent ID cards. This is a problem she has seen first-hand in 
the District of Columbia, and that plagues too many other jurisdictions 
in our nation. In particular, she stressed the problems that laxity in 
government identification cards create for homeland security, and I 
agree. Thank you, Eleanor, for your vigilance on this important issue.
    We all know that a driver's license is the most commonly used form 
of identification in America. We use it to board airplanes, to buy 
weapons, to enter secure government facilities, to open bank accounts, 
to cash checks, and to cross international borders. A driver's license 
carries a presumption of authenticity. It establishes legitimacy.
    That is why al Qaeda operatives here in the United States wanted 
them--and why they still want them. Some of the 9-11 terrorists used 
their true identities. Other used false names. In each case, however, 
the pattern was the same. The terrorists found it simplicity itself to 
obtain genuine government-issued identification cards by submitting 
false information to the DMV.
    While Virginia moved swiftly to close the loopholes that made this 
possible, California has moved to widen them. Recently, the GAO sent 
three undercover agents into separate offices of the California DMV--
each with false identification, purportedly from Texas, which they had 
manufactured themselves on a desktop computer using PhotoShop. 
According to the GAO, the documents should have been easily identified 
as forgeries. To make it especially easy for the California DMV to stop 
the fraud, each of the three undercover agents used the same fake name. 
Yet California cheerfully issued California driver's licenses to all 
three of them--all based on the same poor quality forged documents, and 
all using exactly the same name.
    According to the GAO, California has no systems in place to detect 
attempts by terrorists or criminals to obtain drivers' licenses; its 
DMV employees have no training in what to do with false documents when 
they see them; and there is nothing to stop an al Qaeda member, or a 
drug runner, or a common criminal from doing just what their undercover 
agents did to obtain a California driver's license with no legitimate 
backup identification.
    And all of this was true before California changed its law a few 
weeks ago to make identity theft and fraudulent license issuance easier 
than ever. California's new law actually allows an individual to obtain 
a driver's license using documents that we know to a certainty are not, 
and cannot, be secure.
    In California, an al Qaeda operative may now obtain a driver's 
license with a Taxpayer Identification Number (TIN) issued by the IRS. 
But the IRS has repeatedly stated that the TIN is not a reliable means 
to identify a person, and should not be used for identification 
purposes. In fact, a TIN can be obtained by a third party; that is, you 
can obtain a TIN for someone else, or someone can obtain a TIN in your 
name. And it can be obtained by mail. An applicant need not even appear 
in person. For all of these reasons, the IRS has posted this warning on 
its website:
        Since [Taxpayer Indentification Numbers] are strictly for tax 
        processing, we do not need to apply the same standards as 
        agencies that provide genuine identify certification. ITIN 
        applicants are not required to apply in person; third parties 
        can apply on their behalf; and we do not conduct background 
        checks or further validate the authenticity of identity 
        documents. ITINs do not prove identity outside the tax system, 
        and should not be offered or accepted as identification for 
        non-tax purposes.
    Yet, the State of California has now changed its law, to do exactly 
that. It is as if 9-11 never happened. Likewise, both DHS and the FBI 
have stated that they have serious concerns regarding the reliability 
for identification purposes of the matricula consular, a sort of ID-on-
the-fly issued by Mexican consulates in the United States. But it, too, 
is acceptable documentation to obtain a driver's license in California 
under the new law. Homeland Security Secretary Ridge has said that 
states and financial institutions that rely upon the matricula consular 
do so ``at their own risk.'' California has decided to incur that risk 
on behalf of its 30 million people; so that, ironically, the State of 
California now accepts as secure a document that most Mexican 
provincial governments do not.
    This is hardly a sign of post 9-11 progress in the area of securing 
us against the dangers of document fraud. To meet the terrorist threat, 
we need to get better, more reliable identification information to our 
Customs and Immigration inspectors, to state DMVs, to the TSA, and to 
the law enforcement, security personnel, and civilians who need it to 
ensure our safety. The Congress, and this Committee, must consider 
whether it is not time for uniform minimum standards for identification 
to board aircraft, and to purchase dangerous weapons.
    Our 50 states, territories, and the District of Columbia need 
direction from the Department of Homeland Security about the best way 
to defend against document fraud and identity theft. We need to 
continue the development of technology to help ensure more reliable 
identification. And we need to provide training for our local, state 
and federal officers and civilian employees who check identifications 
every day at airports, DMVs, gun shops, banks, and on our borders.
    In short, we need to ensure that the DHS and the Congress are doing 
all we can to prevent document fraud and identity theft, so that we can 
keep our bipartisan promise in the crucible of 9-11, ``Never Again.''

    The chair now recognizes Mr. Turner, the ranking Democrat 
member, for any statement that he may have.
    Mr. Turner. Thank you, Mr. Chairman.
    As you stated, we all saw the results of Al Qaeda's ability 
to obtain driver's licenses in at least five different states 
through fraudulent means and the consequences that flowed from 
that. We were all surprised, as you stated, Mr. Chairman, when 
the General Accounting Office did its investigation and was 
able to have several undercover agents enter the United States 
with counterfeit documents with few questions asked.
    So it is clear to us, I think, that today we must move 
faster and we must be much stronger, in terms of our effort, to 
end the use of fraudulent documents, particularly those that 
are used to cross our borders and enter our country. We know 
that the forgers can produce high-quality birth certificates 
and driver's licenses with off-the-shelf software. It is 
certainly very difficult for our border agents to be able to 
deal with the problem when there are over 240 different types 
of valid driver's licenses issued in the United States today 
and more than 50,000 different versions of birth certificates 
issued by states and counties and cities.
    It is unlikely that these officers and inspectors can 
become with familiar with these valid forms of identification 
without spending years and years on the job. Past attempts to 
reduce fraudulent documents have met with mixed results. Some 
years ago, the Congress made an effort to develop a more secure 
social security card but, after several different types of 
cards were proposed, no action was taken.
    Clearly, the Congress and the American people have had an 
aversion to any form of uniform identification. It does seem 
incumbent upon us, however, to revisit the issue, to look more 
carefully at providing uniform standards for at least state 
driver licenses so that we can begin to make some inroads upon 
a very serious problem that places our nation at risk.
    We hope we can learn from the testimony today whether there 
are sufficient programs in place for our Federal border 
officers and state and local law enforcement to detect document 
fraud, whether planned programs such as the U.S. VISIT Entry-
Exit System will truly help to deter and eliminate the use of 
fraudulent documents at our borders, and whether legislative 
remedies, perhaps expanding criminal penalties for document 
use, will be appropriate in fighting this very difficult 
problem.
    We also need to consider whether the Federal Government 
should provide more direction and/or assistance to the states 
in developing more secure official identification documents. 
Hopefully, these issues and others will be addressed by our 
distinguished panel today.
    I would also like to join the Chairman in thanking Eleanor 
Holmes Norton for her suggestion that this Committee conduct a 
hearing on this very critical issue. I appreciate Eleanor's 
leadership in this area and her work on the issue.
    Thank you, Mr. Chairman.
    Chairman Cox. I thank the gentleman.
    Under Committee Rule Three, members who waive an opening 
statement can add 3 minutes to their time for questioning. Does 
any member wish to make an opening statement?
    Ms. Norton?
    Ms. Norton. Mr. Chairman, may I thank you and our ranking 
member for today's hearing in response to illegal document 
buying and selling in the nation's capital, this region, and in 
the country post-9/11.
    The District of Columbia may be the last place to expect 
open and notorious hawking of counterfeit birth certificates, 
driver's licenses and social security cards. Such activities 
have long been associated with the Southwest and border 
communities because of the presence of large numbers of 
undocumented immigrants.
    In the District, the sale of illegal documents has been 
concentrated in Adams Morgan, a neighborhood with many 
immigrants from El Salvador, Guatemala and all Latin and 
Central American countries. D.C. Councilmember Jim Graham, who 
first brought this matter to my attention, and neighborhood 
residents complained of constant street corner harassment and 
compared the effect on residents to harassment by drug 
peddlers. However, it doesn't take much imagination after 
September the 11th to see how illegal activities directed 
toward immigrants seeking identification papers necessary to 
find work in this country could become a conduit for people 
seeking identification documents to enable them to carry out 
terrorist activities.
    We know that several of the 9/11 terrorists had driver's 
licenses, they were from Saudi Arabia, not Latin America. The 
lesson of 9/11 is to read the handwriting on the wall, not to 
wait until, to quote, the moving finger, having writ, writes 
and moves on. We need a hearing from officials from the 
national capital region where the vulnerability that carries 
elements is perhaps, the most calming effect.
    Our particular report shows the efforts of our U.S. 
Attorney Roscoe Howard, whose office has been chosen to 
prosecute cases. The ways the document-producing mills have 
lined up the street corner puddles have apparently limited 
three of the four recent document readings. Nevertheless, I 
will not be surprised to find illegal document sales still 
occurring this afternoon in Adams Morgan. The councilman tells 
me that that process is continuing.
    I don't blame the states. Get them pressures and 
empowerments occur in the States, and we can expect that they 
would have different approaches. Particularly, this issue cries 
out for National Homeland Security leadership.
    One of the problems may be that we are over-independent on 
two 9/11 memos; blanketing the area with agents, rough and the 
like. Much of that cries for priority, so our particular 
problems in the nation's capital. I recognize that there may 
never be enough agents to eliminate the problem on a retail 
basis. This problem is national in scope, and therefore, needs 
new national approaches. Perhaps, for example, increasing 
penalties and the use of jail term, plus deportation; penalties 
have been used in prosecutions here, instead of deportation 
only.
    Today the issue is not pre-9/11 document selling to 
immigrants, but post-9/11 violations that carry great homeland 
security risks. We, therefore, need new thinking and remedies. 
And I hope we can use today's hearing to encourage new 
approaches of new thinking outside the box to get a tightening 
around the issues before it emerges in a new and lethal form.
    May I thank you again, Mr. Chairman, and our own ranking 
member as well.
    Chairman Cox. Thank you.
    The gentleman from Texas?
    Mr. Smith. Mr. Chairman, I will be brief, but I also want 
to just mention a couple things because I am going to have to 
leave at 2 o'clock for a conference and I may not be able for 
questions.
    First of all, I want to thank you for convening this 
hearing, and I particularly want to thank you for a very tough 
statement. I hope our friends in the administration in fact, 
listen to your statement, and perhaps will act on it. We had 
the unfortunate situation recently where the Department of 
Treasury has encouraged individuals and banks and organizations 
to rely upon one of those documents that you identified as 
unreliable, the matricular cards. And they do so, in my 
judgment, at great danger to the American people. So I hope the 
administration will reconsider what they have chosen to do with 
those matricular cards.
    That decision was made, by the way, against the advice of 
the Department of Justice and the Homeland Security Committee 
and many of us in Congress. So I hope the administration, as I 
say, will reconsider. But I appreciate the hearing today and 
yield back.
    Chairman Cox. Does any other member wish to be recognized?

         PREPARED STATEMENT OF THE HONORABLE SHEILA JACKSON-LEE

    we are living in a high-tech world. It is tempting to believe that 
the problem of fraudulent documents can be solved with technology, but 
two recent government reports indicate that the human factor must be 
addressed first. On January 30, 2003, the General Accounting Office 
(GAO) reported the results of an investigation it had performed at the 
request of the Senate Committee on Finance. The Finance Committee was 
concerned about the illegal transportation of currency through our 
borders, especially counterfeit money and terrorism funds. It asked the 
agents of the Office of Special Investigations at GAO to attempt to 
enter the United States as United States citizens from Canada, Mexico, 
and Jamaica at land, air, and sea ports of entry using fictitious 
identities and counterfeit identification documents.
    the GAO agents encountered no difficulty entering the United 
States. From September 2002, through May 2003, they used counterfeit 
documentation, including counterfeit driver's licenses and fictitious 
names, to enter the United States from Jamaica, Barbados, Mexico, and 
Canada. Bureau of Immigration and Customs Enforcement (BICE) staff 
never questioned the authenticity of the counterfeit documents.
    In other tests, GAO agents obtained Social Security numbers for 
fictitious children when investigators posed as parents of newborns and 
submitted counterfeit birth certificates and baptismal certificates. 
GAO agents breached the security of airports and Federal office 
buildings because no one questioned the authenticity of their 
counterfeit identification. In still another test, GAO agents used 
counterfeit driver's licenses with fictitious identifiers to purchase 
firearms from Federal firearm licensees in five states. The weapons 
purchased included (1) a 9mm stainless semiautomatic pistol, (2) a .380 
semiautomatic pistol, (3) a 7.62mm Russian-manufactured rifle, (4) a 
.22 caliber semiautomatic rifle, (5) a 9mm semiautomatic pistol, and 
(6) a .25 caliber semiautomatic pistol.
    In February of 2003, the Inspector General (IG) of the Justice 
Department issued a similar report which sheds additional light on the 
reason for the difficulties identified by the GAO study. The only part 
of the IG's report that can be discussed in public is the Executive 
Summary. According to the Executive Summary, the capability of 
immigration inspectors to analyze advance passenger information to 
identify high-risk and inadmissible travelers is limited by a lack of 
adequate resources. The lookout system for spotting high-risk and 
inadmissible travelers does not always provide primary inspectors with 
available, critical information. Primary inspectors were not always 
querying lookout databases as required, and controls were not 
sufficient to ensure that all primary inspectors and supervisors could 
access backup information in the event of system outages.
    The report also mentions the fact that INS invested more than $19 
million in Fiscal Year 2002 to provide basic training for approximately 
1,000 new immigration inspectors. The IG found that the training 
provided a good foundation for newly hired inspectors, but it was 
insufficient in two important areas, on the use of computer systems 
that provide lookouts and other critical information and on awareness 
of current terrorist tactics used to enter the United States.
    I know from personal experience that there is a serious problem 
with the recruitment and retention of immigration inspectors. It is 
common for the immigration inspection stations at Houston's 
international airport to be understaffed. Making matters worse, many of 
the inspectors are inexperienced. In Fiscal Year 2002, approximately 26 
percent of all inspectors at air, land, and sea ports of entry were 
newly hired.
    I hope that today's hearing will lead to the development of new, 
more effective ways to train and equip the security personnel in our 
country who are charged with the responsibility of detecting fraudulent 
documents. Thank you.


    Chairman Cox. If not, we have a very distinguished panel of 
witnesses today. I would ask each of our witnesses to summarize 
your testimony as you see fit because you were good enough to 
provide us with your written statements in advance of this 
hearing and members have your written statements, and they will 
be included in the record.

    I will introduce our first witness. He is the assistant 
secretary of the Department of Homeland Security for Border and 
Transportation Security Policy, Hon. C. Stewart Verdery, Jr.
    Mr. Verdery?

 STATEMENT OF THE HONORABLE C. STEWART VERDERY, JR., ASSISTANT 
     SECRETARY, BORDER AND TRANSPORTATION SECURITY POLICY 
          DIRECTORATE, DEPARTMENT OF HOMELAND SECURITY

    Mr. Verdery. Chairman Cox, ranking committee member and 
other distinguished members of the committee, I am pleased to 
be here today to testify about homeland security and the 
potential threat of terrorism imposed by document fraud, 
identity theft, and the misuse of social security numbers.
    The Department of Homeland Security and the Border and 
Transportation Security Directorate, Directorate in particular, 
are actively working to address these critical issues. As you 
mentioned, I am the assistant secretary for policy and planning 
within BTS. BTS is responsible for maintaining the security of 
our nation's borders and transportation systems.
    My office supervises and coordinates policy development for 
all the BTS agencies which includes the Transportation Security 
Administration, the Bureaus of Customs and Border Protection 
and Immigration and Customs Enforcement, the Federal Law 
Enforcement Training Center and the Office of Domestic 
Preparedness, and we work closely with the Secret Service and 
the Coast Guard within DHS.
    Let me detail briefly some of the steps that DHS and BTS 
are taking to address document fraud and identity theft. First 
and foremost, DHS deploys first-rate people at our ports of 
entry. They do a terrific job at detecting the use of 
fraudulent documents and conducting the resulting 
investigations.
    Through early September of this fiscal year which ended 
yesterday, our officers at the Bureau of Customs and Border 
Protection, CBP, had intercepted over 60,000 fraudulent 
documents at over 300 ports of entry.
    As Secretary Ridge has announced, DHS is unifying the 
border inspection process by establishing the CBP officer, an 
officer who will be cross-trained to handle immigration, 
customs and agricultural inspection needs. All CBP inspectors 
will receive our most current training in identifying 
fraudulent and altered documents.
    DHS and BTS are leveraging its expertise overseas as well. 
Officials at the Bureau of Immigration and Custom Enforcement, 
or ICE, their Forensic Document Lab, have trained over 6,400 
law enforcement officials around the world on how to detect 
fraudulent documents this fiscal year, and we have published 
over 120 Document Alerts, a 50-percent increase from last year.
    These short, easy-to-understand document alerts are sent to 
the field overseas so that inspectors and law enforcement 
authorities can concentrate on one or two known features of an 
identity document that criminals are trying to exploit. And I 
brought one example to my right of one such alert concerning 
the misuse of the Iraqi ``N'' Series passports, and these 
passports were available for purchase in Turkey for about $500.
    Second, the Department employs first-class investigators at 
ICE and at the Secret Service who investigate cases of document 
fraud and identity theft. As you will hear today from the 
United States Attorneys for the District of Columbia and for 
the Eastern District of Virginia, ICE and Secret Service agents 
have played and will play a key role in the interagency process 
and task forces that have been formed to investigate and 
prosecute these types of cases.
    ICE investigators have logged hundreds of thousands of 
hours working on counterfeit document related investigations. 
The primary focus in these cases is to detect, deter, disrupt 
and dismantle major criminal enterprises operating not only in 
the United States, but around the world as well. These cases 
often entail long-term, complex investigations that involve our 
international partners.
    I would like to share briefly the preliminary results of 
one of ICE's ongoing investigations, the Operation Card Shark 
investigation mentioned in the testimony, and I will leave the 
details to U.S. Attorney Howard, who will be after me in a 
couple of minutes.
    With the investigation continuing today, four document 
mills have already been closed, close to 2,000 documents have 
been seized, 50 aliens have been arrested, 30 have been removed 
from the United States and 15 have been prosecuted.
    The Secret Service is also demonstrating success in this 
area. This fiscal year, the Secret Service has made 209 arrests 
in cases involving identity theft. These cases reflect actual 
losses to consumers of about $5 million and a potential loss of 
$23 million.
    This summer the Secret Service developed and distributed to 
state and local law enforcement agencies throughout the United 
States an Identity Crime Video in CD-ROM. This CD-ROM contains 
over 50 investigative and victim assistance resources that 
state and local law enforcement officers can use with combating 
identity crime. They have authorized that as many copies to be 
made of this as possible to get the word out as broadly as we 
can.
    And just to give credit where credit is due, this CD-ROM 
was made in collaboration with the Postal Inspection Service, 
the Federal Trade Commission and our partners at the 
International Association of Chiefs of Police.
    Third, in responding to Congressman Turner's point, the 
U.S. VISIT Program, we will be changing--
    Chairman Cox. If I could ask you to summarize.
    Mr. Verdery. Sure, of course.
    Chairman Cox. Because your 5 minutes has expired.
    Mr. Verdery. Sure.
    We are changing the way we do business at our ports of 
entry. This critical tool will capture point of entry and exit 
information by visitors to the United States using biometrics. 
We will be locking in people's identity when they arrive for 
the first time and when they exit. We will also know when they 
return.
    And with that, I will lastly like to mention we are working 
closely with representatives from the Social Security 
Administration to discuss issues of mutual concern; how to 
reduce instances of misuse of social security numbers.
    On behalf of Secretary Ridge and Undersecretary Hutchinson, 
I look forward to questions you might have.
    Thank you.
    [The statement of Mr. Verdery follows:]

          PREPARED STATEMENT OF THE HON. STEWART VERDERY, JR.,

    Chairman Cox, Ranking Member Turner, and other distinguished 
members, I am pleased to be here today to testify about homeland 
security and the potential threat of terrorism presented by document 
fraud, identity theft, and the misuse of Social Security Numbers.
    As you know from Congressional hearings, GAO investigations, and 
press reports, it is certainly possible today to produce or acquire 
false documents and gain entry into the United States. The Department 
of Homeland Security and the Directorate of Border and Transportation 
Security are working actively to address this problem in a number of 
ways, as I will detail in my testimony.
    Despite all these good efforts, we, and the Congress, must be 
realistic about the results to expect. While we can, over time, reduce 
the instances when false or fraudulent documents are used to enter the 
U.S. or to obtain some governmental benefit, there is no easy fix 
available, and this is a long-term issue for the Congress, the 
Administration, and DHS to work through together.
    DHS is working diligently on all these issues. My staff has had 
several meetings with the Social Security Administration (SSA) to 
discuss issues of mutual concern and potential ways to reduce the 
instances where Social Security Numbers are misused.
    We are also working with State and Local government authorities, 
and non-government entities like the American Association of Motor 
Vehicle Administrators (AAMVA) on issues of mutual concern.
    Description of the Problem
        Document Fraud
    Fraudulent documents, and, equally as important for the purposes of 
this hearing and our enforcement efforts, legitimate documents issued 
as a result of the use of fraudulent ``breeder'' documents can and are 
likely used to gain entry into the U.S. and to obtain federal and state 
governmental benefits each and every day.
    As a general rule, the Immigration and Nationality Act requires all 
U.S. citizens to present a valid U.S. passport to enter or leave the 
U.S. There are several exceptions to this general rule. The most 
important applies to travel to and from the U.S. involving ``any 
country, territory, or island adjacent [to the U.S.] in North, South, 
or Central America excluding Cuba.'' Thus, as a matter of law, U.S. 
citizens do not typically need to present a single document--a 
passport--to reenter the U.S. for any travel in the Western Hemisphere.
    As a U.S. citizen is not required to present a passport for 
reentry, federal regulations do not detail what is necessary to 
validate a person's claim to citizenship in a manner equivalent to that 
of a passport.
    The law requires that a person claiming to be a U.S. citizen ``must 
establish that fact to the examining officer's satisfaction.'' [8 
C.F.R. 235.1(b).]
    In operational practice, our inspectors, now called ``officers,'' 
from the Bureau of Customs and Border Protection (CBP) examine any 
document that may establish identity and place of birth, such as a U.S. 
birth certificate, driver's license, or whatever else the person's 
basis for claiming citizenship might be, including baptismal 
certificates, Certificate of Naturalization, Report of Birth Abroad of 
U.S. Citizen, or Certificate of Citizenship.
    No law or regulation prevents an oral claim of U.S. citizenship in 
these circumstances. An inspector may, and often does, ask for 
documentation to support a claim, but this is not currently required. 
Thus, even if an individual lacks any documentary identification or the 
person presents counterfeit documents, inspectors must let the 
individual back into the U.S. if the inspector is satisfied that the 
individual really is a U.S. citizen.
    Although the government may be able to prosecute the individual for 
using a counterfeit document, the use of the counterfeit document by a 
U.S. citizen, in and of itself, is not a sufficient ground for 
preventing the U.S. citizen from lawfully reentering.
    Let me be clear about one thing. CBP officers do not accept or rely 
on a State-issued driver's license as sufficient proof of legal 
presence in the U.S even though a person will often present his or her 
license as an identity document. But, it is also true, that officers 
consider a validly issued driver's license as one piece of information 
in the total information the officer considers in making a judgment 
about a person's right to have a legal basis to reenter the U.S.
    The 21 States that currently issue driver's licenses without 
requiring proof of legal status in the U.S. thus complicate the work of 
our officers who examine some \1/2\ billion identity documents each and 
every year. The officers who review these licenses must ask for 
additional information or pose additional questions to the person 
presenting the license since the fact of holding the driver's license 
does not confer on the license holder a legal basis for being present 
in the U.S.
    By law and practice, CBP officers cannot focus their detection 
efforts on a single document, such as the passport, and concentrate 
their expertise on recognizing and blocking the fraudulent use of this 
one document or type of document. As other witnesses have testified 
before Congress, there are more than 240 different types of valid 
driver's licenses issued within the United States, and more than 50,000 
different versions of birth certificates issued by U.S. States, 
counties, and municipalities.
    Even excluding baptismal records, it would not be easy for CBP 
officers to have a passing familiarity with, let alone a working 
knowledge of, each of these documents. While advances in technology 
allow our dedicated and hardworking CBP officers to examine and 
validate documents presented for reentry, that same technology also 
enables the perpetrators of fraud to produce, relatively inexpensively, 
high-quality fraudulent documents. Forgers and counterfeiters can 
produce high-quality fake birth certificates and driver's licenses with 
off-the-shelf software programs and materials that are difficult to 
detect without sensitive instruments and sufficient time to examine 
them.
    Our inspectors are also charged with detecting look-a-likes or 
impostors who attempt to use valid documents which belong to another 
person. This is one of the fastest growing phenomena in travel document 
abuse. Document vendors solicit genuine, unaltered documents and match 
them up with ``look-a-likes.'' The Bureau of Immigration and Customs 
Enforcement (ICE) and CBP have developed a training program to detect 
impostors, which it has conducted for both U.S. and foreign immigration 
and border officers around the world.
    Equipment costs money, and taking the time to examine thoroughly 
and in-depth every one of the approximately 460 million identity 
documents presented at our over 300 land, sea, and air ports of entry 
would be an enormous undertaking with potentially serious secondary 
effects. And, even were we to do this, this effort would only permit us 
to detect fraudulent documents, not, as I will discuss now, 
legitimately issued documents that are based on identity theft.
    Identity Theft
    Identity crime is the theft or misuse of an individual's personal 
or financial identifiers in order to facilitate other criminal activity 
or to gain something of value. Types of identity crime include identity 
theft, credit card fraud, bank fraud, check fraud, false identification 
fraud, and passport/visa fraud. Identity crimes are frequently 
associated with other crimes such as narcotics and weapons trafficking, 
organized crime, mail theft and fraud, money laundering, immigration 
fraud, and terrorism.
    The topic of identity theft is intimately connected with document 
fraud. As the GAO and others have shown, it is quite easy today either 
to obtain or produce using sophisticated software and equipment 
fraudulent identification documents, such as a driver's license or 
birth certificate, or to obtain valid documents issued by the 
appropriate authority (again, driver's licenses, social security cards, 
etc.) on the basis of false or fraudulent information. For example, it 
would be relatively easy for an individual to obtain a properly-issued 
State driver's license in the name of Asa Hutchinson if the individual 
could establish on the basis of false documents that their name was Asa 
Hutchinson.
    Advances in technology and the explosion of e-commerce have 
produced enormous advantages for people around the world, and have also 
conferred benefits on criminals. Information collection has become a 
common byproduct of e-commerce transactions. Internet purchases, credit 
card sales, and other forms of electronic transactions are being 
captured, stored, and analyzed by businesses seeking to find the best 
customers for their products. This wealth of available personal 
information creates a target-rich environment for today's sophisticated 
criminals, many of whom are organized and operate across international 
borders and include both domestic and international organized criminal 
groups, street gangs, convicted felons, and terrorists.
    The personal identifiers most often sought by criminals are those 
generally required to obtain goods and services on credit. These are 
primarily social security numbers, names, and dates of birth. Identity 
crimes also involve the theft or misuse of an individual's financial 
identifiers such as credit card numbers, bank account numbers and 
personal identification numbers.
    Many identity thieves use information obtained from company 
databases and web sites. One case investigated by the United States 
Secret Service, the primary DHS agency with jurisdiction over ID theft 
matters, involved an identity criminal accessing public documents to 
obtain the social security numbers of military officers. In some cases, 
the information obtained is in the public domain while in others it is 
proprietary and is obtained by means of a computer intrusion.
    The method that may be most difficult to prevent is theft by a 
collusive employee. Individuals or groups who wish to obtain personal 
or financial identifiers for a large-scale fraud ring will often pay or 
extort an employee who has access to this information through their 
employment at workplaces such as a financial institution, medical 
office, or government agency.
    Another case, investigated primarily by ICE and the Secret Service 
demonstrates the nexus between identity theft and document fraud. In 
this Greenville, South Carolina case, male foreign nationals from 
Pakistan, India, and Tunisia already in the U.S. traveled to South 
Carolina to participate in arranged marriages, for the purpose of 
acquiring legal permanent residence. The ``brides'' and ``grooms'' 
fraudulently obtained South Carolina State and/or immigration 
identification documents utilizing breeder documents in order to 
substantiate their marriage. The ``brides'' were paid between $1,000 
and $6,000 to enter into the ``marriage.'' Nearly all the brides 
arrested signed, sworn statements admitting to their involvement in 
sham marriages. This case is ongoing and has resulted in over 100 
arrests.
    The Secret Service, ICE, the U.S. Marshal's Service, the U.S. 
Postal Inspection Service, the Social Security Administration's Office 
of Inspector General, and the South Carolina Law Enforcement Division 
(SLED) have all participated in this investigation.
    Identity crime affects all types of Americans, regardless of age, 
gender, national origin, or race. Victims include restaurant workers, 
telephone repair technicians and police officers, to corporate and 
government executives, celebrities and high-ranking military officers.
    Of course, and of most relevance to this hearing, fraudulent 
``breeder'' documents obtained through identity theft can then be used 
to obtain genuine documents from Departments of Motor Vehicles, the 
Social Security Administration, and elsewhere. These legitimately 
issued documents can--and are--subsequently used to obtain government 
services and benefits and to gain reentry into the United States. There 
is no technology available to CBP officers--and none that I am aware of 
that exists anywhere--that would enable an inspector to determine that 
a legitimately issued document was actually based on a false breeder 
document presented to another government agency.
    How DHS is Addressing the Problem
    DHS is actively addressing these issues to make it harder for 
individuals--especially terrorists--to slip into the U.S. using 
fraudulent documents and to pursue identity thieves and those who use 
false breeder documents. We also vigorously investigate cases involving 
the use of fraudulent documents and cooperate with other federal, 
state, and local governmental entities, as well as the private sector, 
to heighten awareness and to reduce our vulnerabilities.
    DHS uses a combination of advance information about individuals 
entering the U.S., pre-screening, registration systems such as the 
National Security Entry-Exit Registration System (NSEERS), and will use 
advanced technology, including the use of biometric information that 
will be incorporated into our US VISIT entry-exit system.
    One Face at the Border
    Training CBP officers to recognize fraudulent documents is another 
important step, and one that BTS takes very seriously.
    Last month, Secretary Ridge announced that DHS will unify the 
border inspection process under one Customs and Border Protection 
Officer, an officer cross-trained to address immigration, customs, and 
agricultural inspection needs. We will have one face in one uniform--a 
single officer trained for primary inspection as well as how to 
determine who needs to go through secondary inspections.
    And since we know that Al Qaeda is interested in entering our ports 
illegally, this officer--now trained in all three areas of inspection 
and armed with the best intelligence we have--improves our ability to 
spot and stop terrorists quickly and keep them out. We have already 
recruited our first group of CBP officers, who will be trained 
throughout this fall. For DHS, this is another significant step toward 
our efforts to retool where it makes sense and create efficiencies and 
unity around a single mission.
    All CBP officers will receive our most current training on 
identifying fraudulent and altered documents. CBP secondary officers 
will receive more advanced training, and BTS will continue to maintain 
the world-class excellence of the ICE Forensic Document Lab (FDL), that 
was previously housed at the INS.
    Our CBP officers are doing a good job on this issue, and will 
continue to improve. As of early September, CBP officers had 
intercepted over 60,000 fraudulent documents at our over 300 ports of 
entry in Fiscal Year 2003.
    ICE Resources
    The sole mission of the FDL, a fully-accredited crime laboratory, 
is to detect and deter domestic and international travel and identity 
document fraud, and the FDL has developed an unparalleled expertise in 
the area of domestic and international travel and identity fraud.
    The ICE FDL maintains a collection of exemplar documents, including 
birth certificates, passports, and driver's licenses to differentiate 
valid documents from fraudulent ones. The FDL provides real-time 
assistance to field personnel in identifying fraudulent documents, 
produces and broadly distributes Document Intelligence Alerts (high 
quality photographic bulletins), develops and presents training 
programs in the detection of fraudulent documents, and works with other 
Federal, state, local agencies, and foreign governments to promote 
common efforts to combat international document fraud.
    I want to mention two such samples of these ICE FDL alerts which I 
commend to the Members of this Committee. These alerts present, in a 
clear and simple format, particular features to look for in order to 
determine whether particular types of documents are fraudulent or 
counterfeit.
    One alert discusses stolen blank Philippine Passports and the other 
concerns counterfeit Iraqi ``N'' series passports that were available 
for purchase in Turkey for about $500. The alerts highlight how to 
distinguish immediately between the genuine and counterfeit document.
    The FDL has on file intelligence reports of over 100,000 stolen 
blank, genuine, passports. These passports pose a serious potential 
threat to national security since they are genuine documents. The FDL 
has developed a reference guide that contains very precise information 
on the issuance process of passports and country specific intelligence 
information. The guide is extremely useful in identifying individuals 
in possession of these stolen passports.
    DHS is leveraging this expertise overseas, as well. In 2003, FDL 
officials trained over 6,400 enforcement officials around the world how 
to detect fraudulent documents this fiscal year, and published over 120 
Document Alerts, a 50 percent increase over last year.
    ICE also operates a Law Enforcement Support Center in Vermont to 
assist state and local law enforcement officers who have questions 
about identification assessments during traffic stops. In addition, ICE 
operates units to link enforcement and intelligence resources with 
adjudication officers from the Bureau of Citizenship and Immigration 
Services (CIS) who must make determinations about documents that they 
are presented for adjudication.
    In addition to the work of the FDL, ICE law enforcement agents 
investigate cases of documents and benefits fraud. ICE has joined the 
U.S. Attorney's Office in the Eastern District of Virginia in a pilot 
project to investigate and prosecute large immigration, visa, and 
identification document frauds. The task force includes the 
participation of the Secret Service, CIS, FBI, Social Security 
Administration's Office of Inspector General, IRS-Criminal 
Investigation, Department of State, Department of Labor, U.S. Postal 
Inspection Service, Virginia DMV, and the Fairfax County Police 
Department.
    ICE investigators have logged hundreds of thousands of hours 
working on counterfeit document related investigations. The primary 
focus of these cases is to deter, disrupt, and dismantle major criminal 
enterprises operating not only in the United States, but in source and 
transit countries as well. The cases often entail long-term, complex 
investigations that frequently involve our international partners.
    Operation Card SharkI would also like to share the preliminary 
results of ICE's ongoing investigation, here in Washington, D.C., known 
as Operation Card Shark. Card Shark focuses on the street sale of 
counterfeit documents in the Adams Morgan area. Although the 
investigation continues, four document mills have already been closed 
resulting in the seizure of close to 2,000 documents with an estimated 
total street value of $155,000. 50 aliens have been taken into 
custody--30 have been removed from the U.S. and 15 have been 
prosecuted.
    On July 15th, one of the primary targets of this operation was 
sentenced in U.S. District Court to a total of 52 months in prison for 
his role as a kingpin in the counterfeit document-manufacturing ring.
    Card Shark has disrupted the activity of three significant 
organizations that operate on the North side of Columbia Road and the 
return of Pigeon Park to the residents of Adams Morgan.
    I look forward to sharing more such successes with you in the 
months ahead.
    US-VISIT
    US-VISIT is a crucial new border security and enforcement tool that 
will capture point of Entry and Exit information by visitors to the 
United States. This system will be capable of using information, that 
may be coupled with biometric identifiers, such as photographs and 
fingerprints--to create an electronic check-in/check-out system for 
people who come to the United States to work or to study or visit. US-
VISIT will also provide a useful tool to law enforcement to find those 
visitors who overstay or otherwise violate the terms of their visas and 
will allow us to lock-in an individual's identity, what those in the 
field call ``positive identification'' when the individual registers 
with US-VISIT.
    By January 1, 2004, when a foreign visitor flies into one of our 
international airports or arrives at a U.S. seaport, the visitor's 
travel documents will be scanned.
    Through US-VISIT, all border officers at air and some sea ports of 
entry will have the capability to access and review the visa 
information, including the photograph, during a visa holder's entry 
into the United States. This will enable the border officers to verify 
the visa photograph with the passport photograph and the individual of 
the visa holder during their inspection for entry into the United 
States. Additionally, border officers will capture biometric data to 
verify and lock-in select visa holders identities. The US-VISIT system 
will be able to compare the captured fingerprint against a fingerprint 
watch list. This will be an enhancement to the existing name check or 
biographical lookout check.
    This information will become part of a foreign visitor's ongoing 
travel record, so their correct information can follow them wherever 
they go. The information will be made available to inspectors, agents, 
consular officials and others with a true need to know.
    Mr. Chairman, we should all be clear on my next point. Good 
information does not threaten immigration. Quite the contrary. The more 
certain we are about someone's status, the less likely we are to make a 
mistake that would jeopardize their status--or our safety.
    NSEERS
    The NSEERS program requires certain nonimmigrant aliens from 
designated countries to be fingerprinted, interviewed, and photographed 
by CBP at our ports of entry at the time they are applying for 
admission to the United States. In addition, other aliens who are 
identified from intelligence sources or who match certain pre-existing 
criteria may also be enrolled in NSEERS.
    NSEERS helps to secure our borders, by intercepting terrorists and 
criminals at our ports of entry, identifying aliens who deviate from 
their stated purposes once they enter the U.S., and identifying aliens 
who have overstayed their visas and are in the country illegally. DHS 
officers have made every effort to minimize the inconvenience for those 
individuals required to register, with an average processing time of 
just 18 minutes.
    During the enrollment process, specific biographic information, 
itineraries and addresses are collected. If aliens remain in the U.S. 
for longer than 30 days, they must return to a DHS office to confirm 
their address and activities in the United States. Registrants must 
also complete a departure check when they leave the country and 
register with NSEERS if they are subject to registration and have not 
already registered.
    The NSEERS registration process enables DHS to verify that an alien 
is living where he said he would live, and doing what he said he would 
do while in the United States, and to ensure that he is not violating 
our immigration laws.
    Identity Theft
    DHS is also working hard to reduce the incidence of identity theft, 
and the Secret Service is leading this effort on behalf of the 
Department.
    This summer, the Secret Service developed and distributed to state 
and local law enforcement agencies throughout the United States an 
Identity Crime Video/CD-ROM. The CD-ROM I am holding contains over 50 
investigative and victim assistance resources that local and state law 
enforcement officers can use when combating identity crime. This CD-ROM 
contains a short video that can be shown to police officers at their 
roll call meetings and discusses why identity crime is important, what 
other departments are doing to combat identity crime, and what tools 
and resources are available to officers. The Identity Crime CD-ROM is 
an interactive resource guide that was made in collaboration with the 
U.S. Postal Inspection Service, the Federal Trade Commission and the 
International Association of Chiefs of Police.
    The Secret Service has authorized law enforcement agencies to make 
as many copies of the CD-ROM as they wish so that the agencies can 
distribute this resource to their officers to use in identity crime 
investigations.
    The Secret Service is also training state and local law enforcement 
agencies to prevent identity theft the old fashioned way. In a joint 
effort with the Department of Justice, the U.S. Postal Inspection 
Service, the Federal Trade Commission and the International Association 
of Chiefs of Police, the Secret Service has hosted Identity Crime 
training seminars for law enforcement officers in New York, Chicago, 
Seattle, Dallas, Las Vegas, Washington D.C., Phoenix, Richmond, and 
Iowa, Mr. Chairman. The Secret Service has additional seminars planned 
for San Antonio, Texas next month, Orlando, Florida in November, and 
San Diego, California. These training seminars focus on providing local 
and state law enforcement officers with tools and resources that they 
can immediately put to use in their investigations of identity crime. 
Additionally, officers are provided resources that they can pass on to 
members of their community who are victims of identity crime.
    Collaboration
    DHS is also collaborating with others in both the government and in 
the private sector to combat and address these important issues. We 
have worked closely with the Department of State on visa issuance 
issues and obtaining access to the Consolidated Consular Database. My 
staff has met several times with representatives of the Social Security 
Administration (SSA) to discuss issues of mutual concern and to explore 
how to reduce the instances of the misuse of social security numbers.
    ICE and CIS has also worked cooperatively with the SSA for a number 
of years through the Systematic Alien Verification for Entitlements 
(SAVE) Program. The SAVE program enables Federal, state, and local 
government agencies to obtain immigration status information to 
determine an applicant or recipient's eligibility for many public 
benefits. The SAVE Program also administers employment verification 
pilot programs that enable employers quickly and easily to verify the 
work authorization of newly hired employees.
    Current SAVE participants include the SSA; National Aeronautics and 
Space Administration (NASA); the Department of Defense Manpower Data 
Center; Arizona County Health Care Cost Containment; the California and 
Wyoming Departments of Motor Vehicles; the New Jersey Department of Law 
and Public Safety, Division of Gaming Enforcement; the Mohegan Tribal 
Gaming Commission; and the Texas Department of Health, Asbestos 
Licensing Program.
    The Secret Service has worked closely with the American Association 
of Motor Vehicle Administrators (AAMVA) to support AAMVA's efforts to 
develop minimum and uniform standards for U.S. driver's licenses. I 
understand, for example, Mr. Chairman, that there are still four states 
that do not require a photograph on their state's driver's license, 
which, obviously, makes that document easier to use in a fraudulent 
manner.
    Secret Service representatives work closely with the private sector 
on a number of efforts, and, together with the private sector, formed 
the Document Security Alliance as an ad hoc working group of law 
enforcement and industry focused on developing standards for the 
improving the security and traceability of plastic identification 
cards.
    Conclusion
    In sum, Mr. Chairman, DHS recognizes the enormity of the problems 
that we face, and we are working actively to improve our ability to 
detect fraudulent identification documents and to keep criminals and 
potential terrorists from obtaining these documents in the first place.

    Chairman Cox. Thank you, Mr. Verdery.

    Our next witness is Mr. John Pistole, who is the Assistant 
Director of the Federal Bureau of Investigation for 
Counterterrorism. We appreciate you being with us today and 
look forward to your testimony.

     STATEMENT OF MR. JOHN PISTOLE, ASSISTANT DIRECTOR FOR 
        COUNTERTERRORISM FEDERAL BUREAU OF INVESTIGATION

    Mr. Pistole. Thank you, Chairman Cox.
    Good afternoon, Ranking Member Turner, and other members of 
the committee. I appreciate the opportunity to be here today 
and represent the FBI in this hearing today.
    As the committee is well aware, the top priority for the 
FBI is the prevention of the next terrorist act here in the 
U.S. or against U.S. interests overseas in connection with our 
overseas partners. More than 29,000 employees of the FBI are 
working toward that goal on a daily basis. The identification 
of sleeper cells here in the U.S. is one of the key aspects to 
the success in this ongoing war against terrorism. And for 
that, we need strong authentication procedures for issuing 
identifications across the country.
    As we know, identity fraud is not a new problem. For those 
who are familiar with either the book or the movie, ``Catch Me 
if You Can,'' starring Tom Hanks, as the FBI agent, of course, 
the good guy, we went back 40 years. We have a history of 
individuals who have either as a fugitive or as a fraudster 
used false identities to further their own goals.
    The significance today, of course, is the application and 
the use of fraudulent I.D. by a terrorist. The use of false or 
stolen identity enhances its chances of success in commission 
of almost all crimes, especially financial crimes. The identity 
provides a cloak of anonymity for the subject while the 
groundwork is laid to commit the crime. This includes the 
rental of mail post offices boxes, apartments, office spaces, 
vehicles, and storage lockers, as well as the activation of 
pagers, cellular telephones and various utility services.
    The crucial element in the acceptance of any form of 
identification is the ability to verify the true identity of 
the bearer of the identification, which is honestly more 
important in this post-9/11 world to determine whether an 
individual is who he purports to be. This is essential in our 
mission to identify potential terrorists.
    The FBI is concerned about the issuance of driver's 
licenses without adequate verification of identity. The 
criminal threats and terrorist threats stem from this fact that 
the driver's license can be a perfect breeder document for 
establishing a false identity.
    Since 9/11, the FBI has investigated numerous incidents 
where terrorists have utilized false identifications. I have 
outlined some of those in my written testimony and won't go 
into detail here other than to mention there are cited five 
examples of international terrorists who have used false travel 
documents, false identification to attempt to travel around the 
world.
    And we have also had several examples here in the U.S., 
one, in particular, that stands out from the 1995 Oklahoma City 
bombing, Timothy McVeigh, who had nine different forms of 
identification. A couple of other domestic examples are cited 
in my written testimony. I won't take time to go into those at 
this point.
    The FBI has implemented, in conjunction with our domestic 
law enforcement partners, and some in the intelligence 
community, to address the various fraud schemes being utilized 
by terrorists to fund their terrorist activities through the 
use of fraudulent identification. And those, again, are 
outlined in my written testimony.
    One I would like to highlight is a project with the Office 
of the Inspector General for the Social Security 
Administration, which is a multi-phase project to identify 
either fraudulent numbers, fictitious numbers, or those being 
used by individuals whose name does not match to that. And this 
is being handled by the Terrorism Financing Operations Section, 
or TFOS, of the FBI Counterterrorism Division.
    We are also working on several joint interagency working 
groups involving bank regulators of the state, local and 
Federal Government regulatory agencies as part of the financial 
services industry trying to bring together a two-part national 
identify theft assistance and investigative referral system.
    The law enforcement component will work in conjunction with 
a victim/witness assistance center to be operated by the 
financial service industry and will receive complaints, 
collect, aggregate and analyze data and refer cases to identity 
task forces nationwide to target terrorists or organized groups 
perpetrating identify theft.
    In conclusion, I want to thank you again for the invitation 
to be here to speak to you today. One of the keys is the 
nation's reliance on paper documents, and until we move to some 
type of standardized biometrics approach, we will be struggling 
with the same issues we have.
    Thank you, Mr. Chairman.
    [The statement of Mr. Pistole follows:]

     PREPARED STATEMENT OF MR. JOHN S. PISTOLE, FEDERAL BUREAU OF 
      INVESTIGATION ASSISTANT DIRECTOR, COUNTERTERRORISM DIVISION

    Good morning Chairman Cox, Ranking Member Turner, and members of 
the Committee. On behalf of the Federal Bureau of Investigation (FBI), 
I would like to thank the Committee for affording us the opportunity to 
participate in this forum and comment on the use of fraudulent 
identification documents and the implications for homeland security.
    As this Committee is well aware, the FBI, along with other federal 
law enforcement agencies, investigates and prosecutes individuals who 
use false identities, or the identities of others, to carry out 
violations of federal criminal law. These violations include bank 
fraud, credit card fraud, wire fraud, mail fraud, money laundering, 
bankruptcy fraud, computer crimes, and fugitive cases. When these 
crimes are carried out using a false or stolen identity, investigation 
of the offenses becomes much more complicated. The use of a false or 
stolen identity enhances the chances of success in the commission of 
almost all financial crimes. The identity provides a cloak of anonymity 
for the subject, while the groundwork is laid to carry out the crime. 
This includes the rental of mail drops, post office boxes, apartments, 
office space, vehicles, and storage lockers, as well as the activation 
of pagers, cellular telephones, and various utility services.
    Identity theft, and the use of false identities, is not new to law 
enforcement. For decades fugitives have changed identities to avoid 
capture and check forgers have assumed the identity of others to 
negotiate stolen or counterfeit checks. What is new today is the 
pervasiveness of the problem. The Federal Bureau of Investigation does 
not view the use of false identities and identity theft as a separate 
and distinct crime problem. Rather, it sees this issue as a component 
of many types of crimes, which we investigate.
    Advances in computer hardware and software, along with the growth 
of the Internet, have significantly increased the role that identity 
theft and false identities play in crime. For example, the skill and 
time needed to produce high-quality counterfeit documents has been 
reduced to the point that nearly anyone can become an expert. Criminals 
and terrorists are now using the same multimedia software used by 
professional graphic artists. Today's software allows novices to easily 
manipulate images and fonts, allowing them to produce high-quality 
counterfeit documents. The tremendous growth of the Internet, the 
access it provides to such an immense audience and the anonymity it 
allows users result in otherwise traditional fraud schemes becoming 
magnified when the Internet is utilized as part of the scheme. This is 
particularly true with identity theft related crimes. Computer 
intrusions into the databases of credit card companies, financial 
institutions, on-line businesses, etc. to obtain credit card or other 
identification information for individuals have launched countless 
identity theft related crimes.
    The impact is greater than just the loss of money or property. As 
the victims of identity theft well know, it is a particularly invasive 
crime that causes immeasurable damage to the victim's good name and 
reputation in the community; damage that is not easily remedied.
    Today, the threat is made graver by the fact that terrorists can 
utilize identity theft as well as Social Security Number fraud to 
enable them to obtain such things as cover employment and access to 
secure locations. These and similar means can be utilized by terrorists 
to obtain Driver's Licenses, and bank and credit card accounts through 
which terrorism financing is facilitated. Terrorists and terrorist 
groups require funding to perpetrate their terrorist agendas. The 
methods used to finance terrorism range from the highly sophisticated 
to the most basic. There is virtually no financing method that has not 
at some level been exploited by these groups. Identity theft is a key 
catalyst fueling many of these methods.
    The crucial element in the acceptance of any form of identification 
is the ability to verify the actual true identity of the bearer of the 
identification. In today's post-9/11 world, this element is all the 
more important because, in order to protect the American people, we 
must be able to determine whether an individual is who they purport to 
be. This is essential in our mission to identify potential terrorists, 
locate their means of financial support, and prevent acts of terrorism 
from occurring.
    Foreign nationals who are present in the U.S. legally have the 
ability to use various alternative forms of identification, most 
notably a passport, for the purposes of opening bank accounts, gaining 
access to federal facilities, boarding airplanes, and obtaining a state 
driver's license. In addition, foreign nationals who are present in the 
United States, either legally or illegally, have the ability to obtain 
a passport from their own country's embassy or consular office.
    The FBI is concerned about the issuance of driver's licenses by 
states without adequate verification of identity. The criminal threats 
stem from the fact that the driver's license can be a perfect "breeder" 
document for establishing a false identity. The use of a false identity 
can facilitate a variety of crimes, from money laundering to check 
fraud. And of course, the false identity serves to conceal a criminal 
who is already being sought by law enforcement. Such false identities 
are particularly useful to facilitate the crime of money laundering, as 
the criminal is able to establish one or more bank accounts under 
completely fictitious names. Accounts based upon such fraudulent 
premises greatly hamper money-laundering investigations once the 
criminal activity is discovered. As the Committee is well aware, the 
FBI is particularly concerned about fraudulent financial transactions 
in the post 9/11 environment, given the fact that foreign terrorists 
often rely on money transferred from within the United States.
    The ability of an individual to create a well-documented, but 
fictitious, identity in the United States provides an opportunity for 
terrorists to move freely within the United States without triggering 
name-based watch lists that are disseminated to federal, state and 
local police officers. It also allows them to board planes without 
revealing their true identity and in some cases purchase firearms. All 
of these threats are in addition to the transfer of terrorist funds, 
mentioned earlier.
    The FBI, since 9/11/2001, has investigated numerous incidents where 
terrorists have utilized false or stolen identifications. For example, 
an Al-Qa'ida terrorist cell in Spain used stolen credit cards in 
fictitious sales scams and for numerous other purchases for the cell. 
They kept purchases below amounts where identification would be 
presented. They also used stolen telephone and credit cards for 
communications back to Pakistan, Afghanistan, Lebanon, and other 
countries. Extensive use of false passports and travel documents were 
used to open bank accounts where money for the mujahadin movement was 
sent to and from countries such as Pakistan and Afghanistan.
    While the 9/11 hijackers did not utilize fraudulent identification, 
they did obtain US identification cards in their true names. These are 
"legitimate" identification cards, but they are not issued by any state 
or federal agency. Some of the vendors the hijackers received these 
cards from were involved in fraudulent identification cases--they were 
subsequently charged and arrested. In Virginia, some of the hijackers 
used a loophole to apply for, and receive, legitimate state 
identification cards and Driver's Licenses.
    Investigation and interviews of detainees have included the 
following instances of fraudulent documents and use of false 
identification related to terrorism matters: (1) A Pakistani detainee 
who served as a doctor and guard for the Taliban was detained at JFK 
for attempting to enter the US on a forged passport; (2) An Iraqi 
detainee purchased a false Moroccan passport for approximately $150.00 
in US currency, and used it to enter Turkey where he was arrested; (3) 
An Algerian detainee requested asylum in Canada after entering that 
country on a false passport; (4) A Yemeni detainee acquired a false 
Yemeni passport and was able to get a Pakistani visa; and (5) An 
Algerian detainee obtained a French passport in an alias name and used 
it to travel to London. The cost for this false passport was 3,000 
French Francs (about $530 US, according to the Council of Economic 
Advisors).
    The FBI has seen other examples of document and identification 
fraud in our investigations related to terrorism, to include: (1) the 
April 2003 arrest of William Joseph Krar in Tyler, Texas. Krar is the 
subject of a fraudulent identification matter, which was initiated in 
August 2002 based upon information developed following the delivery of 
a package of fake identification cards to the wrong address. The 
package, which contained numerous false identifications, had been 
mailed from Krar in Tyler, Texas to an individual in New Jersey, an 
admitted member of the New Jersey Militia. The identities included a 
Defense Intelligence Agency identification, a United Nations Observer 
Badge and a Federal concealed weapons permit; (2) former Top Ten Most 
Wanted fugitive Clayton Lee Waagner was found to have in his possession 
fraudulent US Marshal's badges and a significant amount of equipment 
for making fraudulent identification cards, in addition to bomb making 
materials and large amounts of currency; and (3) The investigation of 
the bombing of the Oklahoma City Murrah Federal Building was a 
collaborative effort between by the FBI and many other federal, state, 
and local law enforcement agencies. The evidence developed and 
presented in court led to the convictions of both Timothy McVeigh and 
Terry Nichols by two separate juries of their peers. McVeigh and 
Nichols, like others planning to commit criminal acts, utilized 
aliases. McVeigh was also known to utilize fraudulent identification.
    The FBI has implemented a number of initiatives to address the 
various fraud schemes being utilized by terrorists to fund their 
terrorist activities. One involves targeting fraud schemes being 
committed by loosely organized groups to conduct criminal activity with 
a nexus to terrorist financing. The FBI has identified a number of such 
groups made up of members of varying ethnic backgrounds, which are 
engaged in widespread fraud activity. Members of these groups may not 
themselves be terrorists, but proceeds from their criminal fraud 
schemes have directly or indirectly been used to fund terrorist 
activity and/or terrorist groups. By way of example, the terrorist 
groups have siphoned off portions of proceeds being sent back to the 
country from which members of the particular group emigrated. We 
believe that targeting this type of activity and pursuing the links to 
terrorist financing will likely result in the identification and 
dismantlement of previously unknown terrorist cells. Prior to 9/11, 
this type of terrorist financing often avoided law enforcement 
scrutiny. No longer. The FBI will leave no stone unturned in our 
mission to cut off the financial lifeblood of terrorists.
    Another initiative has been the development of a multi-phase 
project that seeks to identify potential terrorist related individuals 
through Social Security Number misusage analysis. The Terrorist 
Financing Operations Section of the FBI works with the Social Security 
Administration's Office of the Inspector General for SSN verification. 
Once the validity or non-validity of the number has been established, 
investigators look for misuse of the SSNs by checking immigration 
records, Department of Motor Vehicles records, and other military, 
government and fee-based data sources. Incidents of suspect SSN 
misusage are then separated according to type. Predicated investigative 
packages are then forwarded to the appropriate investigative and 
prosecutive entity for follow-up.
    The events of 9/11 forever changed our world. As unpleasant as it 
may be, we must face the realities of our current world as they relate 
to protecting the people of the United States. This requires continual 
vigilance, particularly when it comes to being able to detect and deter 
those who might abuse the system to directly cause harm, or those who 
might aid and abet the financing of terrorist operations.
    I again want to thank you for your invitation to speak here today, 
and on behalf of the FBI, look forward to working with you on this very 
important topic.

    Chairman Cox. Thank you very much for your statement.
    Next, we have with us the United States Attorneys, both for 
the Eastern District of Virginia and the District of Columbia, 
who are exceptionally familiar with the problems that we are 
discussing in the nation's capital area.
    Welcome to both of you.

    Mr. McNulty, you are recognized for your statement.

   STATEMENT OF MR. PAUL J. McNULTY, UNITED STATES ATTORNEY, 
       EASTERN DISTRICT OF VIRGINIA DEPARTMENT OF JUSTICE

    Mr. McNulty. Thank you, Mr. Chairman and Mr. Turner. It is 
great to be back in the House.
    As I look at the cases that we are working on in my office, 
the investigations, the prosecutions, I think it is clear that 
terrorists need three things to operate: first, they need to 
conceal or establish their identity; second, they need money to 
operate and; third, they need an opportunity to strike.
    So if we are going to prevent terrorism, if we are going to 
disrupt, if we are going to try to be proactive rather than 
just investigate cases after they occur, we need to focus 
resources on those three areas. And that has to do with, again, 
strengthening the integrity of our identification system, 
making sure that funding doesn't flow to the terrorists or 
scams by credit card bust-out schemes or other things aren't 
used to support terrorists here.
    And then third, we have to harden our targets. We have to 
make sure that our airports, our military bases or ports are 
not vulnerable and an opportunity to strike is not there. That 
is how we have kind of organized our efforts in the Eastern 
District of Virginia on the prevention side.
    As has already been said, identification fraud and document 
fraud is an enormous problem. Identification is on sale in the 
streets of America. They can be purchased by criminals, 
terrorists, anybody that wants to pose as someone else.
    Thousands upon thousands of government identification 
documents are produced or sold by fraud every month, including 
state driver's licenses, identification cards, social security, 
green cards, birth certificates, and U.S. passports. Some of 
them are counterfeit; others are genuine government documents 
that have been obtained through corruption or false statements.
    All of them enable the holders to conceal their true 
identity, or, as in the case of the hijackers to establish 
themselves in a way that gives them more legitimacy.
    For some reason, Virginia has become a hub of 
identification and document fraud. We have more cases than we 
could ever hope to prosecute; the problem is so widespread. We 
have had a number of big cases recently.
    We recently prosecuted an individual who was responsible 
for acquiring labor certificates, certificates issued from the 
Department of Labor that he would turn around and sell to 
individuals for anywhere from $7,000 to $20,000 per 
application. He sold over 2,700 fraudulent certificates. This 
individual was convicted on 57 accounts of conspiracy, labor 
certificate fraud, immigration fraud, and money laundering.
    We had another case involving the Virginia Department of 
Motor Vehicles and driver's license corruption and fraud. And 
we had recently a large case where we prosecuted someone for 
selling over one thousand per month false Virginia driver's 
license and identification cards.
    Recently we arrested and are in the process of prosecuting 
another scheme involving labor certification, and in this case, 
we have over 150 false applications and the charges there--two 
of the applicants are anywhere from $10,000 to $50,000 per 
application. That is just a small sample of the kinds of cases 
that we are seeing and that we are trying to pursue.
    And again, there is a lot of money in this. In the case of 
Mr. Kooritzky with the nearly three thousand false labor 
certifications there was more than $6 million seized and 
forfeited in that case. We found over one million dollars in 
cash under his bed.
    Now, the question is, ``What are we doing about this,'' as 
far as trying to get at the problem on a large-scale basis. And 
in the Eastern District of Virginia we have formed a task 
force, an Immigration and Visa Fraud Task Force, to try to 
bring together the resources from many different agencies, 
because the problem is so great, that no one agency has the 
authority or the resources to take on the problem.
    And in my testimony I have all of the agencies who are 
involved in our task force. We meet about once a month in the 
office and we identify the cases that are the most important 
ones to pursue and we try to pull together the combined efforts 
to be most effective.
    And so, I am happy to discuss in more detail this task 
force approach, which I think, is a model for how we can be 
effective in this area across the country.
    And I thank you for your time.
    [The statement of Mr. McNulty follows:]

   PREPARED STATEMENT OF MR. PAUL J. McNULTY, UNITED STATES ATTORNEY 
                      EASTERN DISTRICT OF VIRGINIA

    Mr. Chairman and Members of the Committee: As the United States 
Attorney for the Eastern District of Virginia, I am privileged to serve 
the public and to lead a talented staff in a district on the front 
lines of the war against terrorism. It is also my privilege to appear 
before you today to discuss the significant problem identification 
document fraud poses for our national security.
    I. Scope of the Problem
    Identification document fraud is a serious, national problem. 
Simply put, identities are for sale on America's streets--to criminals, 
to terrorists, to anyone who wants to pose as someone else. Thousands 
upon thousands of government identification documents are produced or 
sold by fraud every month, including state drivers licenses and 
identification cards, Social Security cards, green cards, birth 
certificates, and U.S. passports. Some of these documents are 
counterfeit; others are genuine government documents that have been 
obtained through corruption or false statements. All of them enable 
holders to conceal their real identity and where they really come from.
    Unfortunately, identification document fraud has become widespread 
in Northern Virginia. People from all over the United States come here 
to obtain fraudulent identification. In just the past three years, my 
office has investigated and prosecuted a string of identification 
document frauds of a size we rarely, if ever, saw before. To give a few 
examples:
     Samuel G. Kooritzky of Vienna, Virginia, was convicted in 
March on 57 counts of conspiracy, labor certification fraud, 
immigration fraud and money laundering. Mr. Kooritzky, who practiced 
law in Virginia, Maryland and the District of Columbia, filed false 
applications for alien employment certificates with the U.S. Department 
of Labor. These certificates allow immigrants to apply for a green card 
to live and work in the United States. Mr. Kooritzky filed over 2,700 
fraudulent applications within an 18 month time frame. He charged 
between $7,000 and $20,000 per application.
     Jennifer Wrenn, a notary public and owner of a realty 
company in Northern Virginia, was convicted in August 2001 for selling 
fraudulent Virginia drivers licenses and identification cards to 
illegal immigrants from all over the United States. At its height, this 
operation sold fraudulent documents to over 1,000 aliens a month. After 
a year-long investigation, Ms. Wrenn and thirteen of her associates, 
including a lawyer, were convicted of various crimes, including 
identification document fraud, money laundering, and encouraging 
illegal immigration. Several of the defendants, including Ms. Wrenn, 
her husband, and the lawyer, were sent to prison; many of the rest were 
deported.
     Most recently, Steven Y. Lee, Jordan N. Baker, and Byung 
Chul Kim were charged in August with filing fraudulent applications for 
alien employment certifications with the United States Department of 
Labor. Lee and Baker are alleged to have prepared and submitted 
applications they knew contained false information and forgeries on 
behalf of many different employers and immigrants. In particular, they 
are suspected of colluding with local employers--one of whom was Kim--
to file applications seeking immigrant workers for jobs the employers 
did not have and did not intend to fill. Lee and Baker sold these 
applications to Korean immigrants who would then use the approved 
applications to obtain employment authorizations but would never work 
for the sponsoring employer. Lee and Baker charged the illegal 
immigrants between $10,000 and $50,000 per application, a portion of 
which fee Lee and Baker paid as a kickback to the cooperating employer. 
Of the 150 applications known to have been submitted by these 
defendants, the vast majority are believed to be fraudulent.
     Our Office's prosecution of Ousmane Sow and Aboubakar 
Doumbia for Social Security fraud illustrates how easily Social 
Security cards are obtained by fraud and how widespread the abuse is. 
Sow and Doumbia were caught at Reagan National Airport in transit from 
New York to Miami. They were traveling on tickets paid for with stolen 
credit cards and were found to be carrying a dozen foreign passports 
and two dozen stolen immigration forms. Both men were charged with 
immigration fraud and pled guilty prior to trial. Interestingly, both 
had fraudulent Virginia identification cards even though they lived in 
New York.
    One of the two men agreed to cooperate with the government and 
revealed the purpose of their trip to Miami. He and his accomplice were 
part of a West African criminal syndicate based in New York City. This 
syndicate specialized in the fraudulent procurement of Social Security 
cards and, to a lesser extent, the fraudulent procurement of Virginia 
drivers licenses and identification cards. Members of the syndicate 
repeatedly traveled from New York to major cities in the United States 
on tickets paid for with stolen credit cards. The purpose of the trips 
was to apply for Social Security cards by fraud at the Social Security 
Administration offices in each city. At each office, the members of the 
syndicate would apply for a card using a passport and an INS form.\1\ 
The members of the syndicate altered the passports by substituting 
their own photographs so that they could apply in person for a Social 
Security card in the name of one of the syndicate's clients (to whom 
the passport actually belonged). They further placed doctored INS forms 
in the client's passport to make it appear that they, the applicants, 
were lawfully in the United States and had the right to work. In fact, 
their clients were illegal immigrants in New York and New Jersey who 
paid the syndicate between $700 and $1,500 for a Social Security card. 
Members of the syndicate obtained well over a thousand fraudulent 
Social Security cards.
---------------------------------------------------------------------------
    \1\ The form used was an INS form I-94, which is a record of 
authorized entry.
---------------------------------------------------------------------------
     airport Security Task Force: After September 11, 2001, the 
Department of Transportation (DOT) became concerned that large numbers 
of employees at National and Dulles airports had obtained their airport 
secure area access badges by fraud or misrepresentation. A task force 
was convened to investigate all 28,000 badge holders. In the end, 
approximately 120 of them were charged with various crimes, including 
making false statements, Social Security fraud, and immigration fraud. 
Another twenty badge holders were arrested by INS (now part of DHS's 
Bureau of Immigrations and Customs Enforcement) on administrative 
charges.
    These cases, and many others like them, demonstrate that 
identification document fraud is pervasive. If a person is willing to 
pay the price, he or she can obtain fraudulent identification for any 
purpose, no questions asked. These cases also reveal that 
identification document fraud is big business. Kooritzky made no less 
than $6,300,000 in the space of eighteen months, including $1,000,000 
in cash seized from a suitcase under a co-conspirators's bed. It is 
also easy: many defendants have told us that they bought their Social 
Security cards and green cards on the street for as little as $50.
    II. Relevance to Homeland Security
    Identification document fraud directly undermines our homeland 
security. It also creates huge holes in our immigration and 
naturalization controls; it enables terrorists to enter and remain in 
our country; and it facilitates crime--crime such as credit card fraud, 
mortgage fraud, and bank fraud, the proceeds of which can be used to 
support sleeper cells or finance large-scale terrorist attacks in this 
country.
    Fraud involving state drivers licenses is of a particular concern. 
Drivers licenses are a primary source of identification and a mainstay 
of daily life in this country. With a drivers license, you may drive a 
car, board an airplane, and purchase a handgun. You may open bank 
accounts, buy alcohol, and obtain credit cards. In addition, although a 
driver's license is not evidence of lawful residence in the United 
States, it may be perceived as such. In short, the integrity of state 
drivers licenses is critical to our commerce and our national security.
    Given the importance of drivers licenses and other government 
identification documents, we cannot afford to ignore serious 
identification fraud. Widespread fraud in government programs is simply 
bad government and should be vigorously fought as a matter of 
principle. No one benefits when state and federal programs are 
routinely abused. In addition, identification document fraud undermines 
public confidence in government, particularly our ability to protect 
the national security. We cannot restore public trust in our 
immigration and border controls if fraudulent green cards, drivers 
licenses, and Social Security cards remain available to anyone with 
cash to buy them. This sort of fraud presents terrorists and other 
serious criminals with an easy way to gain entry to the United States.
    Most important, identification document fraud facilitates 
terrorism. Seven of the September 11th hijackers \2\ obtained genuine 
Virginia drivers licenses by submitting false proof of Virginia 
residency to the DMV.\3\ One of the seven was involved in the failed 
attempt to fly Flight 93 into a target here in the Washington, D.C., 
area; two were aboard the airplanes that crashed into the World Trade 
Center; and four were aboard Flight 77 when it was flown into the 
Pentagon. None of the seven lived in Virginia. Rather, they made a 
special trip to Virginia, because they knew they could get a genuine 
drivers license in one day for approximately $100 in cash with no 
questions asked. And although we will never know for sure, we strongly 
suspect that these seven hijackers intentionally used their Virginia 
drivers licenses to board the flights they hijacked to avoid the 
scrutiny a foreign passport would bring.
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    \2\ The seven were Hani Hanjour, Khalid Almihdhar, Majed Moqed, 
Salem Alhazmi, Abdulaziz Alomari, Ahmed Alghamdi, and Ziad Jarrah.
    \3\ Since September 11, 2001, this Office has prosecuted four 
individuals who helped the hijackers complete fraudulent forms and 
submit them to the Virginia Department of Motor Vehicles (``DMV''). All 
four were charged with and pled guilty to identification document 
fraud, in violation of 18 U.S.C. Sec. 1028. In addition, this Office 
has used 18 U.S.C. Sec. 1028 to prosecute several people who came to 
our attention through the 9/11 investigation, either due to their 
contacts with the hijackers or because of their presence near Dulles 
airport on September 11th with flight manuals. We also prosecuted two 
men who ran a checkpoint at the Pentagon in a tow truck in February of 
this year. In each of these cases, the defendant submitted false 
information to the Virginia DMV to obtain a Virginia identification 
card or license for himself or another by fraud.
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    II. Challenges Law Enforcement Faces in Combating the Problem
    The Administration is working to address identity theft on a 
collaborative basis. The Departments of Justice and Homeland Security, 
the Federal Trade Commission, the U.S. Postal Inspection Service, and 
other agencies are all working hard to combat this problem.
    Unfortunately, however, as the last few years have shown, 
immigration and identification fraud is flourishing in this country. 
First, there are simply too many large-scale frauds to investigate all 
of them. Second, we have recognized the need for improved coordination 
among the agencies with jurisdiction to investigate document fraud 
offenses. Many different federal and state agencies have authority to 
investigate these crimes, but they rarely coordinate their efforts 
beyond a given case.
    There are a number of additional steps we can take to fight 
identification document fraud more effectively and to improve our 
homeland security. First, we can ensure that federal law enforcement 
agencies have the authority to investigate all forms of identification 
document fraud, from Social Security cards to employment authorizations 
to airport security badges. Together with state law enforcement, 
federal agencies could pursue a truly national effort to combat 
identification document fraud.
    Second, we must improve coordination among the many federal and 
state agencies with authority to investigate the various forms of 
identification document fraud. Given the extent of the fraud we face, 
no one federal agency can be expected to tackle the problem alone. As a 
preliminary matter, the number and scale of the frauds are simply too 
much for one agency. Furthermore, most of the large frauds involve 
multiple government programs and cut across agency jurisdictions and 
state lines. For example, we often find that the same document vendor 
who sells fraudulent state drivers licenses also sells fraudulent 
Social Security cards and green cards. In such a case, it is essential 
that the investigation involve agents from the state motor vehicle 
agency, the Social Security Administration's Office of the Inspector 
General, and the Department of Homeland Security.
    Third, we should review our procedures that govern the issuance of 
identification documents to ensure they are effective. Our prosecutions 
of large immigration and identification document frauds have revealed 
that the underlying regulatory and adjudicatory processes invite much 
of the abuse. There are too many unintended loopholes and too few 
efforts to identify and deter fraudulent applications. In short, our 
own procedures may sometimes make it easy for the unscrupulous to 
defraud the government. As a result, we must place as much emphasis on 
reviewing the underlying programs as we do on prosecuting crimes 
against those programs.
    To be effective, the steps I have just outlined will need to be 
pursued at a national level, but the same principles work at the local 
level. In my district, for example, we quickly realized that 
identification document fraud was one of the most significant threats 
to our homeland security in the wake of September 11. We also realized 
that the conventional model of investigating and prosecuting these 
cases was not capable of dealing with the problem. In response, we 
created the Immigration and Visa Task Force early this year 
specifically to address immigration and identification document fraud.
    The purpose of the task force is to create a standing group of 
agents and prosecutors to identify, investigate, and prosecute large 
immigration, visa, and identification document frauds. The primary aims 
of the task force are (1) to restore integrity to the nation's 
immigration and identification document controls and (2) to prevent 
terrorists and criminals from entering and residing in the United 
States.
    The basic idea behind the task force is to bring agents from the 
various agencies with the relevant enforcement powers together with 
prosecutors to target and prosecute the bigger frauds in our area for 
maximum effect. These frauds require substantial resources and time, 
but provide great deterrence because of the publicity and length of 
sentences they generate. The task force also pursues forfeiture as a 
further deterrent. This too requires a good deal of investigation, but 
is well worth the effort (e.g., the government obtained $6.3 million in 
forfeiture in the Kooritzky case).
    The task force meets approximately once a month at the United 
States Attorney's Office and is chaired by an Assistant United States 
Attorney. At each meeting, the members of the task force review the 
status of existing cases, examine new leads, and discuss practices or 
problems that deserve investigation. The members of the task force are
        (1) United States Attorney's Office;
        (2) Department of Homeland Security--U.S. Immigration and 
        Customs Enforcement;
        (3) Department of Homeland Security--Secret Service;
        (4) Department of Homeland Security--U.S. Citizenship and 
        Immigration Services ;
        (5) DOJ--FBI;
        (6) DOJ--Office of Inspector General;
        (7) Department of Labor;
        (8) Department of State;
        (9) Social Security Administration, Office of the Inspector 
        General;
        (10) IRS;
        (11) US Postal Inspection Service;
        (12) Virginia DMV;
        (13) Fairfax County Police Department; and,
        (14) Metropolitan Washington Area Airport Police.
    The participating agencies have worked well together, and the task 
force has already brought two large frauds to a close.
    That concludes my testimony, Mr. Chairman. I am pleased to answer 
any question you may have.

    Chairman Cox. Thank you very much.
    Roscoe C. Howard, Jr. is the United States attorney for the 
District of Columbia, also exceptionally familiar with the 
things that were described by the National Capital area. Thank 
you very much for being here.

    I know, in fact, that your work has come to the attention 
of Representative Eleanor Holmes Norton, and is one of the 
reasons that we are having this hearing. So I appreciate your 
being here today.

  STATEMENT OF MR. ROSCOE HOWARD, JR., U.S. ATTORNEY FOR THE 
                      DISTRICT OF COLUMBIA

    Mr. Howard. I appreciate the opportunity to come and 
testify. And I am also thanking members of the committee, and I 
would especially like to thank Representative Eleanor Holmes 
Norton, not only for her leadership, but focusing all of our 
efforts on this problem.
    D.C. is like a lot of cities where there is a high 
concentration of illegal immigrants. The business of 
counterfeit identification documents just thrives here.
    Since 1998, our office has been working aggressively with a 
number of law enforcement offices. The Bureau of Immigration 
and Customs Enforcement, MPD, the FBI, Social Security 
Administration, the U.S. Postal Service, IRS, the Secret 
Service, the Diplomatic Security Service, out of the Department 
of State and the Department of Labor.
    We get together to try to figure out exactly how we are 
going to fight this menace posed by the manufacturing and 
distribution of false and fraudulent documents. Now what we 
have done is our office has conducted four major operations 
focusing primarily on the Adams Morgan section of the city, 
where we probably have our most diverse population.
    These investigations have resulted in dozens of convictions 
of manufacturers and distributors of false documents. One of 
our most recent that you have heard referred to, Operation Card 
Shark, was actually in response to complaints from the 
community. These gentlemen that were operating, women and 
gentlemen, was basically an open-air market up in the Northwest 
section. We used Federal agents and MPD agents to make 
observations, to secure warrants and then we executed those 
warrants.
    And what we recovered were just a number of blank documents 
for making green cards and social security cards, as well as 
equipment for laminating. We also were able to identify the 
kingpin, a gentleman by the name of Soloman Gonzalez-Gonzalez. 
We identified him as the owner of the equipment and the owner 
of the mills. What we do know is a lot of the documents that he 
was getting were actually being imported from California, where 
they were made. We ended up with a number of sentences that 
ranged from about 27 months up to Mr. Gonzalez's 52 months that 
he received on July 15th.
    In another recent case, Calvin McCants, the owner of a 
false document-making factory in the 2100 block of P Street 
N.W. recently entered a guilty plea to possession of false 
document-making implements. And depending on the court's 
decision on the monetary loss, Mr. McCants is facing somewhere 
between 27 months and 63 months and he will be sentenced later 
this month in October.
    But in executing search warrants, while what we found in 
the defendants' offices and storage facilities in Washington 
and throughout this area were a wide variety of document-making 
equipment, including blank and finished passports, military 
identification, driver's licenses from almost all 50 states, 
birth certificates, access devices, other official 
documentation and pamphlets such as ``New I.D.s in America'' 
and ``How to Make Driver's Licenses and Other I.D.s.'' These 
are just a couple of examples of what our office is doing, as 
many of the offices, including Mr. McNulty's, are doing across 
the country.
    This year alone, we have initiated about 40 false document 
cases involving a huge number of defendants. Now as we address 
these--when we first started addressing this well before 9/11, 
our office was addressing them, they started off as identity 
and theft issues, but after 9/11, it is clear that they also 
become critical to looking at the terrorism issue.
    Often in terrorism what we are doing is looking for a 
needle in a haystack, but that is what our jobs are and that is 
what we intend to. Our efforts will continue, we will work with 
law enforcement to get this, but one thing that is clear, as I 
go through these cases, is that law enforcement alone cannot 
accomplish of reducing the probability that there could be 
another terrorist attack.
    I think that we as a government need to think 
constructively about not only how we design our identification 
documents, but how we issue those identification documents. And 
in addition, our office and certainly the Department of Justice 
is keenly interested in exploring legislative improvements in 
this area. For example, the department strongly supports H.R. 
1731, the Identity Theft Penalty Enhancement Act, which is 
pending before the Judiciary Committee.
    I want to again, Mr. Chairman, thank you for the 
opportunity to testify today, and as everybody else, I will be 
glad to answer questions.
    [The statement of Mr. Howard follows:]

       PREPARED STATEMENT OF THE HONORABLE ROSCOE C. HOWARD, JR.

    Mr. Chairman, Members of the Committee, I appreciate the 
opportunity testify today on the threat to national security posed by 
false and fraudulent identification documents. I would like to express 
my appreciation to Representative Eleanor Holmes Norton, who has 
focused attention on this important issue and continues to seek 
resources to help combat this problem at the local level.
    The District of Columbia is a diverse city of over 570,000 
residents. We have people from countries all over the world who bring a 
rich diversity to our communities and neighborhoods. Many of our 
residents emigrate here legally, following in the footsteps of our 
forefathers. However, many others, in the District and across the 
country, are not here lawfully or have allowed their legal status to 
lapse. In cities where there is a high concentration of illegal 
immigrants, the business of counterfeit identification documents 
thrives. The District of Columbia is no exception. Illegal ``document 
mills'' provide a variety of identification documents to their 
customers, including green cards, social security cards, driver's 
licenses, and passports.
    Since 1998, the United States Attorney's Office for the District of 
Columbia has been working aggressively with our local and federal law 
enforcement partners to combat the menace posed by the manufacture and 
distribution of false and fraudulent identification documents. We have 
conducted four major operations focusing primarily on document mills in 
the Adams Morgan section of the city, which have resulted in the 
conviction of dozens of manufacturers and distributors of false alien 
registration cards and social security cards. The most recent of these 
is Operation Card Shark,\1\ which resulted in the sentencing on July 15 
of kingpin Salomon Gonzalez-Gonzalez, (aka Angel Marques, aka El Virus) 
to an aggregate of 52 months in prison for conspiracy to distribute 
false documents, distribution of false documents, possession of 
document-making implements, possession with intent to distribute more 
than five documents, and re-entering the country illegally after 
deportation. Aspects of this investigation are on-going.
---------------------------------------------------------------------------
    \1\ The earlier operations were named Southside (1998-2000), 
Operation Mica Maker (2000-2001) Identity Crisise (2000-2001). ``Mica'' 
is a Spanish word for a government-issued identification card.
---------------------------------------------------------------------------
    Operation Card Shark started in response to complaints from the 
community about document vendors in the area of Columbia Road, N.W. 
between 16th and 18th Streets. Agents from the Bureau of Immigration 
and Customs Enforcement (BICE) conducted surveillance, obtained search 
warrants, and seized hundreds of blank documents as well as equipment 
for making false cards. Forensic examination of these items revealed 
Gonzalez-Gonzalez's fingerprints at several locations. Further 
investigation revealed that Gonzalez-Gonzalez purchased and owned the 
equipment in the document mills, hired other illegal aliens to sell 
counterfeit documents, and paid them and the workers in the mills based 
on the number of sales. Consequently, he was regarded as the boss and 
was sentenced accordingly.\2\
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    \2\ Six other members of the conspiracy were sentenced to periods 
of incarceration of up to 27 months. Related cases against eight co-
conspirators are pending.
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    In another recent case, Calvin McCants, the owner of a false 
document-making factory in the 2100 block of P Street, N.W., entered a 
guilty plea to possession of false document-making implements. 
Depending on the court's decision on the monetary loss attributable to 
the defendant, he could face up to 27 months or 63 months when he is 
sentenced later this month. The defendant's plea followed the execution 
of three search warrants at defendant's offices and storage facilities. 
In the first, the U.S. Secret Service's Financial Crimes Task Force 
found: a scanner; a lamination machine and laminated sheets; a corner 
rounder (for cutting corners off cards); a color laser-printer; a 
cutting board; metal seal presses (used to emboss raised seals on 
official documents for several jurisdictions, including the District of 
Columbia); computers; computer discs containing templates for official 
identification documents (such as passports, military identifications, 
driver's licenses, and birth certificates); driver's licenses from 
several states and the District; access devices in the same names as 
the driver's licenses; and other finished and unfinished identification 
documents. The second and third searches, at different locations, 
netted a number of documents bearing McCant's photograph but other 
names, along with other equipment and documents. Pamphlets entitled 
``New ID's in America,'' ``How to make driver's licenses and other ID's 
on your home computer,'' and ``2000 ID checking guide'' were also 
found.
    These are two examples of the efforts that we have been undertaking 
to curb trafficking in false and fraudulent identification documents. 
Other initiatives include prosecuting those who commit passport and 
visa fraud, arrange sham marriages for immigration purposes, obtain 
false labor certificates, and use false social security numbers on 
employment documents. In 2003, we have had over 40 cases of this nature 
involving a larger number of defendants. We have worked closely with 
BICE and its predecessor, the Immigration and Naturalization Service, 
the Metropolitan Police Department, the Federal Bureau of 
Investigation, the Social Security Administration, the U.S. Postal 
Inspection Service, the Internal Revenue Service, the United States 
Secret Service, and the Departments of State and Labor.
    What we used to address only as immigration or identity theft 
issues has become critically more important as a terrorism issue. Those 
who are bent on undermining our society and destroying our government 
are adept at using false and fraudulent identification documents that 
allow them to move easily across borders and within our country.
    So the efforts we have undertaken--and will continue to undertake--
to combat counterfeit identification documents need to be doubled and 
re-doubled. Law enforcement alone, however, cannot accomplish the goal 
of reducing the probability that terrorists can obtain and use false 
identification documents to advance their cause. We need to think 
constructively about how we design and issue identification documents 
that are less susceptible to counterfeiting. We have made changes in 
our currency in recent years for this purpose, and we may need to make 
changes in other official documents. It is a more complicated task, I 
know.
    The federal government has a leadership role to play in developing 
and promoting new technology and in assisting the states and the 
District of Columbia to use such technology to reduce the probability 
that identification documents can be created in illegal document mills.
    In addition, we are very interested in exploring legislative 
improvements in this area. For example, the Department strongly 
supports H.R. 1731, the ``Identity Theft Penalty Enhancement Act,'' 
which is pending in the Judiciary Committee. I note that the Senate 
passed an identical bill, S. 153, by unanimous vote on March 19, 2003.
    Thank you for the opportunity to testify today. I would be pleased 
to answer any questions you might have.

    Chairman Cox. Thank you very much for that testimony.
    Our next witness is Joseph R. Carico, who is the Chief 
Deputy Attorney General from the Commonwealth of Virginia.

    Thank you very much for joining us, and as I said in our 
opening statement, thank you, the attorney general, the 
governor and the legislature of Virginia for moving so swiftly 
to correct the problems that we identified.

 STATEMENT OF MR. JOSEPH CARICO, CHIEF DEPUTY ATTORNEY GENERAL 
                    COMMONWEALTH OF VIRGINIA

    Mr. Carico. Thank you, Mr. Chairman, Mr. Ranking Member, 
members of the committee, thank you for allowing us to be here 
today.
    I represent the Attorney General of Virginia, Jerry 
Kilgore, and he sends his greetings and thanks for letting our 
office be represented as you discuss these important security 
and safety concerns of all Americans.
    The hijackers of 9/11 had many different things in common; 
one of the main things is that they had an intense hatred for 
America and everything that we stand for. Seven of those 
terrorists as has been pointed out today also shared another 
characteristic; seven of those terrorists had Virginia driver's 
licenses or identification.
    It is a sad fact that our Commonwealth had become known in 
the terrorist community as an easy place to obtain state 
driver's licenses or state identification cards. And this is a 
lapse in security in Virginia that we sought to rectify.
    A valid driver's license, as you all know, is a passport to 
all sorts of places and behavior, including of course, boarding 
airplanes. Attorney General Kilgore recognized that fact and 
set out to rectify that with members of our General Assembly 
and they sought legislation that tightens the controls on the 
issuance of Virginia driver's licenses. Now, in order to obtain 
a Virginia driver's license, a person must show proof that they 
are either a United States citizen or that they have legal 
presence in this country.
    There are provisions that have been made for individuals 
who have immigration situations pending. United States 
citizens, green card holders, resident aliens or others, such 
as individuals who sought political or religious asylum may 
still obtain Virginia driver's licenses. They must simply 
document their lawful status now.
    In addition, if a person is in this country with a legal 
immigration document, his driver's license issued will expire 
on the same day as the applicant's authorization to be in the 
United States. We recognize that it made no sense at all to 
issue a Virginia driver's license for 5 years if that person's 
authorization to be in this country was for only 2 years.
    The new law also says that if you illegally obtained a 
driver's license then you are guilty of a Class Six felony, 
which in our state, brings a prison term of 5 years and a $2500 
fine. Of course, identity must also be proven still in Virginia 
to receive a Virginia driver's license.
    Every 16 year old who goes and gets their license now has 
to still prove that they are who they say they are. We have 
experienced firsthand, in Virginia, what could happen when 
people are not held to high standards and required to show 
proof of identity and legal presence in this country.
    Other states may have taken different actions, but in 
Virginia we suffered one of those attacks on that dark day in 
September.
    We are proud to be working with Congressman Eric Cantor of 
the 7th District of Virginia. He has been carrying legislation 
that is very similar to ours here in Congress, and clearly 
recognizes the public's safety concerns that we all share.
    On another front of identity theft, Attorney General 
Kilgore passed another law, known as the Identity Theft 
Protection Act which cracks down on the crime of identity 
theft.
    Now there are also the financial costs associated with the 
crime of identity theft, but in the worst cases of identity 
theft people are arrested for crimes committed by others who 
have stolen their identities. In drafting the legislation we 
started a state-wide Identity Theft Task Force and the U.S. 
Attorney Paul McNulty was a member of that task force.
    One of the worst stories we heard was from a Virginia 
resident from Southeast Virginia named Angel Gonzalez, Jr. Mr. 
Gonzalez had his identity stolen by an illegal immigrant who 
then went on a multi-state crime spree committing crimes in his 
name; his nightmare culminating when he was arrested in front 
of his children for crimes that he did not commit.
    General Kilgore and the General Assembly sought to rectify 
this and they created Identity Theft Passport Program, which I 
can go into further if I am asked about that by any of the 
members of the committee. The law also makes it a crime to 
steal an identity of a dead person or to impersonate a law 
enforcement officer for the purpose of stealing an identity. 
The law also requires that credit bureaus take notice that 
someone who was a victim of identity theft has filed a report 
with the police.
    Finally, and importantly, the legislation limits the 
availability of social security numbers on state documents in a 
variety of ways, including removing the numbers from state 
employee I.D. cards, or student I.D. cards, and removing the 
numbers from the outside of state mailings like tax forms. It 
also allows the clerks of our circuit courts to refuse accept 
documents for public recordation that unnecessarily contain 
social security numbers.
    In these ways we can better protect our consumers, provide 
greater security and go after the criminals who would commit 
these crimes. Now, would it have changed the events of 9/11 if 
we had had these laws in place then? We have no way to know 
that; we will never know that. But we do know that we would 
have now made it harder and more difficult for those to board 
airplanes and turn them into guided missiles.
    We are pleased the Virginia General Assembly sought to pass 
these pieces of legislation and we believe we have made our 
driver's licenses more secure and building greater protection 
against the security threat of identity theft.
    Thank you, Mr. Chairman, for allowing me to be here today.
    [The statement of Mr. Carico follows:]

               PREPARED STATEMENT OF MR. JOSEPH R. CARICO

    Good morning, Mr. Chairman. Mr. Ranking Member. Members of the 
Committee.
    Thank you for allowing me to be here with you this morning. My name 
is Joseph R. Carico, and I am the Chief Deputy Attorney General for the 
Commonwealth of Virginia.
    I represent the Attorney General of Virginia, Jerry Kilgore. He is 
unable to be here this afternoon, but sends his greetings and his 
thanks for allowing our office to be represented as this committee 
discusses what I believe to be very important ideas for the safety of 
Americans everywhere.
    On the morning of September 11, 2001, nineteen hijackers boarded 
four airplanes with the intent of flying them into buildings and 
killing as many Americans as possible. The nineteen men had many things 
in common, among them an intense hatred for America and everything it 
stands for.
    But seven of the terrorists also shared one other characteristic--
hey all possessed Virginia Driver' Licenses or ID cards.
    It is a sad fact that our Commonwealth had become known in the 
terrorist community as a place you could go to easily obtain a valid 
driver' license or official state Identification card as a foreign 
national.
    This was a lapse in security that we in Virginia vowed we would 
never allow to happen again.
    A valid driver' license is a passport to all sorts of places and 
behaviors--including, of course, boarding airplanes.
    Attorney General Kilgore recognized this fact and set out to do 
something about it. With two members of the Virginia General Assembly 
as patrons--Senator Jay O'Brien of Fairfax and Delegate Dave Albo of 
Springfield--General Kilgore sponsored legislation that tightens the 
controls on the issuance of Virginia driver's licenses.
    Now, in order to obtain a driver's license, a person must provide 
appropriate documentation that he is either a United States citizen, or 
is otherwise legally present in this country. There are provisions made 
for those individuals who have immigration situations pending, such as 
in the case of someone with a pending application for asylum or 
protected status.
    United States citizens, green card holders, resident aliens, or 
others, such as individuals who have sought political or religious 
asylum may all obtain Virginia driver's licenses. They must simply 
document their lawful status.
    In addition, if a person is in this country with a legal 
immigration document, the driver's license issued will expire on the 
same day as the applicant's authorization to be in the United States.
    We recognized that it made no sense at all to issue driver's 
licenses that are valid for five years, while the applicant might only 
be authorized to be in the country for two years.
    The new law says that if you illegally obtain a driver's license, 
you are guilty of a class 6 felony, which carries a penalty of up to 
five years in prison and a fine of up to $2,500.
    The fact of the matter is, identity must be proven routinely at our 
DMV offices. Every sixteen year old in Virginia, when he gets his first 
driver's license, must show that he is who he says he is--with a birth 
certificate or a passport.
    We have experienced first hand what can happen when people are not 
held to high standards and required to show proof of legal presence in 
this country.
    Other states may have taken different action, but in Virginia, we 
suffered one of the attacks of that dark day more than two years ago.
    Simply put, in Virginia, we learned our lesson . . . and we do not 
feel that it is too much to ask for people to obey the laws of our 
society before they take advantage of what our society has to offer.
    We are proud to have been working with Congressman Eric Cantor of 
the 7th District of Virginia.
    He has been carrying legislation that is very similar to ours here 
in Congress and clearly recognizes the public safety concerns that we 
address here today.
    Identity Theft
    Attorney General Kilgore pushed another new law, known as the 
Identity Theft Protection Act, which cracks down on the crime of 
Identity Theft.
    There are, of course, financial costs to Identity Theft, as the 
crime costs merchants, banks, credit card companies and others billions 
of dollars a year nationwide. Many times victims have spent as many as 
400 hours cleaning up the mess in their credit histories. In the worst 
cases, people were arrested for crimes committed by others who had 
stolen their identities.
    In drafting the legislation, we launched a statewide Identity Theft 
Task Force. One of the worst stories we heard was from a man in 
Southeast Virginia named Angel Gonzalez.
    Mr. Gonzalez had his identity stolen by an illegal immigrant who 
then went on a multi-state crime spree--committing crimes in his name.
    Mr. Gonzalez's nightmare culminated when he was arrested in front 
of his children for crimes committed by the Identity thief.
    Also in the Tidewater area of Virginia, police have broken up a 
major crime gang because the Norfolk police made a routine Identity 
Theft check.
    Twenty-three people have no been arrested across the country as 
part of the crime ring, which is based in Los Angeles, but is spread 
throughout many states.
    These are stories that involve theft, fraud and other crimes. But 
it is easy to imagine that someone who wanted to slip through the 
cracks in this country could easily just commandeer someone else's good 
name.
    That's why we created an Identity Theft Passport Program within the 
Attorney General's Office. These Passports will be issued to people who 
have documented that they are victims of Identity Theft--to shield them 
from false arrest and to tell creditors that they did not ring up the 
bogus charges.
    The bill also tightens the laws regarding Identity Theft by making 
it a crime to steal the identity of a dead person . . . or to 
impersonate a law enforcement officer for the purpose of stealing an 
identity. The bill also requires that credit bureaus take note that 
someone who is a victim has filed a police report.
    Finally, the legislation limits the availability of Social Security 
Numbers on state documents in a variety of ways--including, removing 
the numbers from state employee IDs or student IDs . . . and removing 
the numbers from the outside of state mailings, such as tax forms. It 
also allows the Clerks of Circuit Courts to refuse to accept documents 
for public recordation that unnecessarily contain Social Security 
Numbers.
    In these ways we can better protect our consumers . . . provide 
greater security . . . and go after the criminals who would commit 
these crimes.
    Now, if we had had these laws in place two years ago, would we have 
prevented the events of September 11, 2001?
    There is no way to know that.
    We know these were determined men . . . determined to kill 
Americans and strike a blow for their cause.
    No, we will never know if we could have completely prevented it. 
But we do know that we may have made it more difficult for them to 
board those airplanes and turn them into guided missiles.
    I am pleased that the General Assembly saw fit to pass our two 
pieces legislation. I believe we have made our driver's licenses more 
secure . . . and built in greater protection against the security 
threat of Identity Theft.
    Thank you for allowing me to be here today.

    Chairman Cox. Thank you for that testimony.
    Mr. Malfi is here representing the General Accounting 
Office.
    In fact, GAO's work in this area which has come to the 
attention of this committee and to Congress as one of the bases 
for this hearing. We are very concerned about what GAO has 
discovered nationwide as part of, if not a 50 state pattern, 
then a too-often repeating pattern. And we look forward to your 
testimony.

  STATEMENT OF MR. RONALD MALFI, DIRECTOR, OFFICE OF SPECIAL 
           INVESTIGATIONS, GENERAL ACCOUNTING OFFICE

    Mr. Malfi. Thank you.
    Mr. Chairman and members of the committee, thank you for 
the opportunity to testify today about how homeland security is 
vulnerable to identity fraud.
    Today, counterfeit identification is easily produced and 
used to create fraudulent identities. Tests we have performed 
over the past 3 years demonstrate that counterfeit 
identification documents can be used to enter the United 
States, purchase firearms, gain access to government buildings 
and other facilities, obtain genuine identification for both 
fictitious and stolen identities and obtain social security 
numbers for fictitious identities.
    In conducting these tests we created fictitious identities 
and counterfeit identification documents such as driver's 
licenses, birth certificates and social security cards. We did 
this using inexpensive computer software and hardware that are 
readily available to any purchaser.
    Our work shows how security vulnerabilities can be 
exploited. From July 2002 to May 2003 we counterfeited state 
driver's licenses and birth certificates with fictitious names 
and used them to enter the United States from the Western 
hemispheres, countries including Jamaica, Barbados, Mexico and 
Canada. Bureau of Immigration and Customs Enforcement staff 
never questioned the authenticity of the counterfeit documents 
and our investigators encountered no difficult entering the 
country using them.
    Second, counterfeit drivers' licenses can be used to 
purchase firearms. Between October 2000 and February 2001 we 
used counterfeit driver's licenses with fictitious identifiers 
to purchase firearms from licensed dealers in five states: 
Virginia, West Virginia, Montana, New Mexico and Arizona.
    When we purchased these firearms, the majority of the 
firearms dealers we dealt with complied with the laws governing 
such purchases, including instant background checks required by 
Federal law. However, an instant background check only 
discloses whether the prospective purchaser is a person whose 
possession of a firearm would be unlawful. Consequently, if the 
prospective purchaser is using a fictitious identity, as we 
did, an instant background check is not effective.
    Third, counterfeit identification can be used to gain 
access to Federal buildings and other facilities. In March 2002 
we breached the security of four Federal office buildings in 
the Atlanta area using counterfeit law enforcement credentials 
to obtain genuine building passes, which we then counterfeited.
    We were also able to obtain building passes that authorized 
us to carry firearms in the building. As a result, several 
investigators, including one carrying a briefcase suitable for 
carrying firearms, bypassed the magnetometers and x-ray 
machines using the counterfeit building passes. Then they were 
able to move freely throughout the buildings during the day and 
evening hours. In April and May of 2000, we similarly gained 
access to numerous Federal buildings in Washington D.C. that 
contained the offices of cabinet secretaries or agency heads.
    Finally, we easily obtained social security numbers for 
fictitious names. We used counterfeit identification documents 
to obtain valid social security numbers from the Social 
Security Administration for two fictitious infants. In 
addition, we visited two states and obtained authentic but 
fraudulent driver's licenses using the names, social security 
numbers and date of birth of individuals listed on the Social 
Security's publicly available master death file.
    The master death file contains the names, social security 
numbers and dates of birth of deceased individuals. The motor 
vehicle departments in two of the states we visited are among 
those that rely solely on visual verification of identification 
documents and do not compare the information on licenses 
applications with the Social Security Agency's master death 
file.
    Our work leads us to three basic conclusions. One: 
government officials and others generally did not recognize 
that documents we presented were counterfeit. Two: that many 
government officials were not alert to the possibility of 
identity fraud and some failed to follow security procedures. 
And three: identity verification procedures are inadequate.
    While some of the problems revealed in our tests have been 
addressed by the responsible agencies, much remains to be done. 
The driver's license is the most commonly accepted document 
used for identification. The weaknesses we found during this 
investigation clearly shows that border inspectors, motor 
vehicle departments and firearm dealers need to have a means to 
verify the identity and authenticate the driver's licenses that 
are presented to them.
    In addition, government officials who review identification 
need additional training in recognizing counterfeit documents. 
Further, those officials also need to be more vigilant when 
searching for identification fraud.
    Thank you.
    [The statement of Mr. Malfi follows:]

               PREPARED STATEMENT OF MR. RONALD D. MALFI

    Identification Documents Fraud and the Implications for Homeland 
Security
    Mr. Chairman and Members of the Committee:
    Thank you for the opportunity to testify today about how homeland 
security is vulnerable to identity fraud. Today, counterfeit 
identification is easily produced and used to create fraudulent 
identities. Tests we have performed over the past 3 years demonstrate 
that counterfeit identification documents can be used to
     enter the United States,
     purchase firearms,
     gain access to government buildings and other facilities,
     obtain genuine identification for both fictitious and 
stolen identities, and
     obtain social security numbers for fictitious identities.
    In conducting these tests, we created fictitious identities and 
counterfeit identification documents, such as driver's licenses, birth 
certificates, and social security cards. We did this using inexpensive 
computer software and hardware that are readily available to any 
purchaser.
    Our work shows how security vulnerabilities can be exploited. From 
July, 2002, through May, 2003, we counterfeited state driver's licenses 
and birth certificates, with fictitious names and used them to enter 
the United States from Western Hemisphere countries, including Jamaica, 
Barbados, Mexico, and Canada. Bureau of Immigration and Customs 
Enforcement staff never questioned the authenticity of the counterfeit 
documents, and our investigators encountered no difficulty entering the 
country using them.\1\
---------------------------------------------------------------------------
    \1\ U.S. General Accounting Office, Counterfeit Documents Used to 
Enter the United States from Certain Western Hemisphere Countries Not 
Detected, GAO-03-713T (Washington, D.C.: May 13, 2003).
---------------------------------------------------------------------------
    Second, counterfeit driver's licenses can be used to purchase 
firearms. Between October, 2000, and February, 2001, used counterfeit 
driver's licenses with fictitious identifiers to purchase firearms from 
license dealers in five states--Virginia, West Virginia, Montana, New 
Mexico, and Arizona. When we purchased the firearms, the majority of 
the firearms dealers we dealt with complied with laws governing such 
purchases, including instant background checks required by federal 
law.\2\ However, an instant background check only discloses whether the 
prospective purchaser is a person whose possession of a firearm would 
be unlawful. Consequently, if the prospective purchaser is using a 
fictitious identity, as we did, an instant background check is not 
effective.\3\
---------------------------------------------------------------------------
    \2\ 18 U.S.C. Sec. 922(t).
    \3\ U.S. General Accounting Office, Firearms: Purchased from 
Federal Firearm Licensees Using Bogus Identification, GAO-01-427T 
(Washington, D.C.: March 19, 2001).
---------------------------------------------------------------------------
    Third, counterfeit identification can be used to gain access to 
federal buildings and other facilities. In March, 2002, we breached the 
security of four federal office buildings in the Atlanta area using 
counterfeit law enforcement credentials to obtain genuine building 
passes, which we then counterfeited. We were also able to obtain 
building passes that authorized us to carry firearms in the buildings. 
As a result, several investigators, including one carrying a briefcase 
suitable for carrying firearms, bypassed the magnetometers and x-ray 
machines using the counterfeited building passes. They then were able 
to move freely throughout the buildings during day and evening 
hours.\4\ In April and May, 2000, we similarly gained access to 
numerous federal buildings in Washington, D.C., that contained the 
offices of cabinet secretaries or agency heads.\5\
---------------------------------------------------------------------------
    \4\ U.S. General Accounting Office, Security Breaches at Federal 
Buildings in Atlanta, Georgia, GAO-02-668T (Washington, D.C.: Apr. 30, 
2002).
    \5\ U.S. General Accounting Office, Security: Breaches at Federal 
Agencies and Airports, GAO/T-OSI-00-10 (Washington, D.C.: May 25, 
2000).
---------------------------------------------------------------------------
    Finally, we easily obtained Social Security Numbers (SSN) for 
fictitious names. We used counterfeit identification documents to 
obtain valid SSNs from the Social Security Administration (SSA) for two 
fictitious infants. In addition, we visited two states and obtained 
authentic but fraudulent driver's licenses using the names, SSNs, and 
dates of birth of individuals listed on SSA's publicly available Master 
Death file. The Master Death file contains the names, SSNs, and dates 
of birth of deceased individuals. The motor vehicle departments in two 
of the states we visited are among those that rely solely on visual 
verification of identification documents and do not compare the 
information on license applications with SSA's Master Death file.\6\
---------------------------------------------------------------------------
    \6\ U.S. General Accounting Office, Social Security Numbers: 
Ensuring the Integrity of the SSN, GAO-03-941T (Washington, D.C.: July 
10, 2003).
---------------------------------------------------------------------------
    Our work leads us to three basic conclusions: (1) government 
officials and others generally did not recognize that the documents we 
presented were counterfeit; (2) many government officials were not 
alert to the possibility of identity fraud and some failed to follow 
security procedures and (3) identity verification procedures are 
inadequate. While some of the problems revealed in our tests have been 
addressed by the responsible agencies, much remains to be done. A 
driver's license is the most commonly accepted document used for 
identifications. The weaknesses we found during this investigation 
clearly show that border inspectors, motor vehicle departments, and 
firearms dealers need to have the means to verify the identity and 
authenticity of the driver's licenses that are presented to them. In 
addition, government officials who review identification need 
additional training in recognizing counterfeit documents. Further, 
these officials also need to be more vigilant when searching for 
identification fraud.
    Mr. Chairman, this completes my statement. I would be happy to 
respond to any questions you or other members of the committee may 
have.

    Chairman Cox. Thank you, Mr. Malfi. And thank you for your 
leadership of the Office of Special Investigations.
    That is hair curling testimony. We were sorry to receive 
it, but we intend to act upon it.
    Our next, and final, witness is Keith M. Kiser, who is the 
chair of the American Association of Motor Vehicle 
Administrators, an organization of the departments of motor 
vehicles in all 50 states.

    Mr. Kiser, welcome.

 STATEMENT OF MR. KEITH KISER, CHAIR, AMERICAN ASSOCIATION OF 
                  MOTOR VEHICLE ADMINISTRATORS

    Mr. Kiser. Good afternoon, Mr. Chairman and members of the 
committee.
    I am Keith Kiser, Chair of the Board of the American 
Association of Motor Vehicle Administrators, or AAMVA. AAMVA 
represents motor vehicle and law enforcement officials who are 
responsible for administering motor vehicle laws, driver 
credentialing and highway safety enforcement.
    The state-issued driver's license is the most widely used 
and accepted form of I.D. in America. It is at the heart of our 
identification infrastructure and homeland security. 
Unfortunately, homeland security is threatened because 
licensing procedures are outdated.
    Many states are taking piecemeal steps to improve the 
licensing process, and that includes California, despite 
passage of S.B.60. However, California's situation is not 
unique. Other states' policy makers have weakened driver's 
license I.D. procedures by allowing undocumented aliens to 
obtain a license. This further compromises our nation's 
security.
    A valid license opens doors and allows freedom of movement 
within society. It serves as identification to purchase 
firearms and to obtain benefits, credit, employment, and other 
federally-issued documents and potentially voting rights. 
Unfortunately, until we implement uniform practices to verify 
the validity of documents and the identity of the person 
holding them, the process will remain fragmented and vulnerable 
to fraud.
    Recently, the AAMVA board passed two resolutions. One 
discourages the issuance of a photo driver's license to 
undocumented aliens. The other recommends it is premature to 
accept foreign consular cards for I.D. purposes.
    ``Why did the board take these actions?'' Our mission is to 
serve those who are lawfully in this country. We have a 
responsibility and an obligation to preserve public safety and 
national security. As issuers of this document we must verify 
the identity of the license holder and ensure lawful residence 
to maintain reciprocity among the states.
    Since October 2001, AAMVA has joined with numerous 
industry, advocacy and law enforcement experts to strengthen 
the licensing process.
    As a result of this comprehensive approach, we recommend 
tightening application requirements; electronic verification of 
an applicant's driver's record and breeder documents; improved 
issuance procedures including internal audits and training for 
employees; increased penalties for those who commit fraud, and 
to ensure compliance with these activities participation by all 
states in the Driver's License Agreement, an interstate compact 
developed to address these issues.
    Because DMVs do not have a real-time verification system, 
individuals apply for and obtain a license in more than one 
state. The findings of the recent GAO investigations are 
evidence of this weakness. To remedy this, we need an 
information system to ensure each driver has only one license, 
only one driver record, and only one identity.
    In addition, the use of false breeder documents within the 
application process continues to grow. We must adopt a uniform 
list of acceptable I.D. documents relied on for license 
issuance; provide training to be a DMV employee so they can 
recognize and appropriately handle fraudulent documents; and 
ensure motor vehicle agencies have the ability to 
electronically verify the validity of breeder documents.
    We also have a problem with fake licenses and I.D.s. They 
are easily altered or counterfeited. There are more than 240 
valid license formats, all lacking uniform security features. 
To combat this problem, we need minimum uniform card design and 
security features for the license and then train other end-
users to identify fraudulent documents.
    The last problem we would like to address is people. We 
cannot legislate morality, but we can fight fraud on both sides 
of the DMV counter. AAMVA recently developed model internal 
controls of compliance procedures for states to adopt. In 
addition, Federal and state policy makers must partner with law 
enforcement and the courts to implement and enforce stiffer 
penalties.
    Over the last 2 years, AAMVA has discussed these problems 
with Congress and our Federal partners. The evidence is clear, 
it is time to implement the solution; a solution that is a 
comprehensive package and not a piecemeal fix; a solution that 
reduces identity theft and enhances homeland security; a 
solution that protects an individual's privacy by first 
verifying their identity.
    In closing, two GAO investigations began with a different 
focus, but ended with the same recommendation: the Senate 
Finance Committee studied the facts and agreed with AAMVA that 
states need a driver's license information system to share 
driver records, exchange digital photos and verify birth and 
death records with vital statistics agencies.
    The states cannot go it alone. The solution requires a 
state-Federal partnership that includes funding and political 
will. We need Congress's help.
    Mr. Chairman, I thank you for the opportunity to be here. 
On behalf of all the AAMVA members we look forward to working 
with you.
    [The statement of Mr. Kiser follows:]

                PREPARED STATEMENT OF MR. KEITH M. KISER

    Good Morning, Chairman and distinguished Members of the House 
Select Committee on Homeland Security. My name is Keith Kiser and I am 
the Director of the Motor Vehicle Division of the North Dakota 
Department of Transportation (NDDOT) and Chair of the Board of 
Directors for the American Association of Motor Vehicle Administrators 
(AAMVA). Thank you for the opportunity to testify on behalf of AAMVA to 
discuss the vulnerabilities in the driver's license application process 
and the document itself, its impact on national security and a 
comprehensive approach needed to fix the driver's licensing system.
    AAMVA is a state-based, non-profit association representing motor 
vehicle agency administrators, senior law enforcement officials and 
industry in the United States and Canada. Our members are the 
recognized experts who administer the laws governing motor vehicle 
operation, driver credentialing, and highway safety enforcement. AAMVA 
plays an integral role in the development, deployment and monitoring of 
both the commercial driver's license (CDL) and motor carrier safety 
programs. The Association's members are responsible for administering 
these programs at the state and provincial levels.
    We believe this hearing will generate critical public discourse 
about the urgent public policy issue of building more integrity into 
the driver licensing process.
    BACKGROUND
    AAMVA commends the House Select Committee on Homeland Security, for 
its focus on defining and showing the vulnerabilities with the driver's 
license and identification card. The state-issued driver's license is 
the most widely used and accepted form of ID in America. It's at the 
heart of our identification infrastructure and homeland security. 
Unfortunately, homeland security is threatened because of 
vulnerabilities in the driver's license system.
    Why is this happening? Our current licensing structure and the 
credential that we issue were designed for another time and today's 
system is, at best, antiquated. The U.S. has more than 240 different, 
valid forms of passenger car driver's licenses and ID cards in 
circulation. Each state and D.C. has different practices for issuing 
licenses and reporting convictions. Individuals looking to undermine 
the system, whether a problem drinker, underage drinker, identity thief 
or terrorist shop around for licenses in those states with the weakest 
practices. Unfortunately, over-the-counter computer software and 
hardware is making it easier for individuals to produce counterfeit 
licenses and fraudulent breeder documents.
    In addition, the lack of standard security features on a license 
allows individuals to exploit the system. This makes it difficult for 
law enforcement to verify the validity of a license from another 
state--not to mention the identity of the person holding it. This 
situation is worsened by the availability of counterfeit licenses and 
fraudulent breeder documents over the Internet and sold on the 
underground market.
    Many states are taking steps to improve the licensing process. And, 
that includes California, despite passage of Senate Bill 60. However, 
California's situation is not unique. Other state policymakers have 
weakened driver's license ID procedures by allowing undocumented aliens 
to obtain a license through use of the IRS Individual Taxpayer 
Identification number, acceptance of foreign consular cards and non-
secure ``breeder'' documents. This further compromises our nation's 
security. A valid license opens doors and allows freedom of movement 
within society. It serves as identification to purchase firearms and to 
obtain benefits, credit, employment, other federally issued documents, 
and potentially, voting rights.
    Taking away the privilege to drive in this country is often viewed 
by both the federal and state legislative branches of government as an 
option to punish those who break the law. U.S. citizens can have their 
privilege to drive withdrawn for, among other reasons, poor driving 
behavior, failure to provide court-ordered child support--even failure 
to pay library fines. If DMVs are required to license undocumented 
aliens (who have by definition violated federal law) the illegals are 
in a sense receiving preferential treatment.
    Also, such action places a state government agency as being 
essentially complicit in the violation of federal immigration laws. 
Once an undocumented alien obtains a driver's license, essentially that 
individual has no need for valid, federally issued immigration 
documents.
    Recently, the AAMVA Board passed two resolutions.\1\ One 
discourages the issuance of a photo driver license to undocumented 
aliens. The other recommends it is premature to accept foreign consular 
cards for ID purposes. Why did the Board take these positions? Our 
mission is to serve those who are lawfully in this country. We have a 
responsibility and an obligation to preserve public safety and national 
security. As issuers of this document, we must verify the identity of 
the license holder and ensure lawful presence to maintain license 
reciprocity among the states.
---------------------------------------------------------------------------
    \1\ See Attachment 1 and 2.
---------------------------------------------------------------------------
    However, until we all share uniform practices to verify the 
validity of documents and the identity of the person holding them, the 
process will remain fragmented and vulnerable to fraud. As a result, we 
increase the opportunities for identity theft and put at risk our 
nation's national security and highway safety.
    Shortly after September 11th, AAMVA members came together to 
develop a comprehensive solution to enhancing the licensing process. 
This comprehensive approach addresses:
         tightened application requirements for obtaining a 
        driver's license,
         real-time verification of an applicant's driver 
        history and breeder documents,\2\
---------------------------------------------------------------------------
    \2\ Breeder documents are defined as those documents used to 
confirm identity such as birth certificates, Social Security cards or 
immigration documents.
---------------------------------------------------------------------------
         improved processes and procedures for issuance, 
        including internal audit controls and training for employees, 
        and
         increased penalties for those that commit credential 
        fraud.
    Vulnerabilities & Comprehensive Approach
    The events of September 11th, caused a radical shift in the 
perception of risk and the use of a driver license or ID card. In 
October 2001, the AAMVA Executive Committee developed and passed a 
resolution establishing the Special Task Force on Identification 
Security. The Task Force concluded that there were a number of common 
issues needing to be addressed: administrative processing, 
verification/information exchange, the need for a unique identifier, 
the format of the driver's license/ID card, fraud prevention and 
detection, residency, and enforcement and control of standards. Based 
on the recommendations of the Task Force, AAMVA brought together 
knowledge, experience and expertise from across jurisdictional 
boundaries, federal agencies and stakeholder organizations to establish 
uniform identification practices and procedures to aid in the 
prevention of fraudulently issued driver licenses and identification 
cards.
    The objective, with participation and recommendations from states 
and provinces, was to provide a guide to jurisdictions that would help 
standardize the process of identifying applicants in the 21st century. 
AAMVA divided the issues surrounding identification security into 14 
subtopics, each subtopic being addressed by a task group.
    AAMVA has identified and targeted the areas to fix what we believe 
are the problems with the current system. Let's look at the 
vulnerabilities in driver licensing. And more importantly, the steps 
needed to tighten the system.
    First, individuals can apply for and obtain a license in more than 
one state, which the GAO investigators illustrated by using the same 
fictitious name and fraudulent documents in seven of the eight states. 
At this time, DMVs do not have an electronic method to verify whether a 
person has been issued a license in another state. We need to establish 
an information system that will ensure each driver has only one 
driver's license, only one driver record and only one identity. The 
findings of the GAO investigations are evidence of this weakness.
    In the mid-1990s, AAMVA began exploring the possibility of having a 
system similar to the Commercial Drivers License Information System 
(CDLIS) for all drivers within the United States in order to better 
monitor the problem driver population. States need more effective tools 
to manage the driving records we already maintain. Problem drivers, who 
obtain multiple licenses, spread their bad driving history across the 
states. As a result, they avoid detection, penalties and punishment. By 
1998, Congress recognized the potential benefits of such an information 
system and directed NHTSA and FMCSA to study the IT issues and costs 
associated with developing and operating this system. The report 
concluded an all-driver pointer system is feasible.\3\
---------------------------------------------------------------------------
    \3\ National Highway Traffic Safety Administration in conjunction 
with Federal Motor Carrier and AAMVA, ``Report to Congress: Evaluation 
of Driver Licensing Information Program and Assessment of 
Technologies,'' 2001. (http://www.aamva.org/drivers/drv--
AutomatedSystemsDRIVerS.asp#TechAssessment)
---------------------------------------------------------------------------
    We have witnessed the success of such a system through the use of 
CDLIS, which kept more than 871,000 potential dangerous truck drivers 
from obtaining a commercial driver's license between 1992 and 1996.\4\ 
CDLIS is designed as a pointer system for commercial drivers. CDLIS 
limits commercial drivers to one and only one commercial driver's 
license and it has worked well for this purpose. Before CDLIS, it was 
possible for a commercial driver to apply for and obtain a commercial 
driver's license in a new state without acknowledging having an 
existing license in another state. This had serious implications for 
highway safety, since hiding the existence of another license could 
also hide a dangerous driving record. We need an all-driver pointer 
system that will direct one state where to find and accurately verify 
someone's driving histories in other states for all drivers, commercial 
and non-commercial. DMVs already exchange driver history on commercial 
vehicle drivers through CDLIS. An all-driver pointer system will help 
prevent identity theft and strengthen national security by limiting a 
driver to one license and one driving history.
---------------------------------------------------------------------------
    \4\ Federal Highway Administration, Office of Motor Carrier 
Research & Standards Driver Division, ``Commercial Driver License 
Effectiveness Study,'' page 11, September 1998.
---------------------------------------------------------------------------
    Second, the use of false breeder documents to obtain an 
authenticate driver's license or identification card runs rampant 
within the application process. DMVs must adopt a uniform resource list 
for acceptable identification documents, which will narrow the numerous 
documents, relied on for issuing a license or identification card. 
After much research, AAMVA has recently concluded and issued the 
Acceptable Verifiable ID Resource List and Administrative 
Procedures.\5\ By utilizing the lists, its procedures and future 
fraudulent document recognition training, motor vehicle employees 
should be able to verify that the applicant in front of them is who 
they are claiming to be and that documents presented are reliable. The 
use of the resource lists also promotes uniformity, identification 
reciprocity between jurisdictions, and helps protect the customer's 
personal information.
---------------------------------------------------------------------------
    \5\ American Association of Motor Vehicle Administrators, Status 
Report to AAMVA Membership--Attachment 1 Acceptable Verifiable Resource 
Lists and Procedures, July 2003,( http://www.aamva.org/Documents/
idsAttach1StatReportJuly03.pdf).
---------------------------------------------------------------------------
    In addition, DMVs must provide adequate fraudulent document 
training to their employees. We need to give them the tools to 
recognize and appropriately handle fraudulent documents. The use of 
fraudulent documents has caused enormous economic losses in both the 
U.S. and Canada. The use of fraudulent documents to obtain driver's 
licenses/identification cards has grown exponentially in recent years. 
AAMVA in conjunction with the Federal Motor Carrier Safety 
Administration (FMCSA), the National Highway Traffic Safety 
Administration (NHTSA), the U.S. Secret Service (USSS), the Royal 
Canadian Mounted Police (RCMP) and the Canadian Council of Motor 
Transport Administrators (CCMTA) has developed a comprehensive model 
training program for Fraudulent Document Recognition (FDR).
    The three-level FDR program is designed to assist states and 
provinces with the formal training of motor vehicle and law enforcement 
personnel in the recognition/detection of fraudulent identification 
documents. Level I address basic training needs for frontline employees 
and law enforcement officials. Level II addresses advanced training 
needs for motor vehicle supervisors, document examiners, law 
enforcement officials and fraud investigators. Level III addresses 
training at a forensic level and is slated for future development, if 
deemed necessary. Level I and Level II training materials were 
showcased during the 2003 AAMVA regional meetings. Formal Level I and 
Level II train-the-trainer sessions, designed to train jurisdictional 
fraud trainers, will be held between October 2003 and February 2004 in 
Rhode Island, Missouri and Utah. Based on available funding, future 
development may include training videos, educational brochures, self-
study materials and computer-based and/or Web-based training. AAMVA 
will establish a maintenance program to update the materials on a 
regular basis. We invite members of the committee to attend any of the 
upcoming training sessions.
    Furthermore, we must ensure motor vehicle agencies have the 
ability, preferably electronically, to verify the validity of source 
documents with issuing agencies, such as the Social Security 
Administration, Immigration and Naturalization Services, vital records 
agencies and other DMVs. Currently, 25 states are electronically 
verifying Social Security Numbers with the Social Security 
Administration. But that verification process needs improvement, which 
the GAO concluded in another report to Congres.\6\ Too frequently SSA's 
automated system indicates that a number does not match, when in 
reality, after manual investigation, it is a match. This situation is 
deterring other states from using the SSA system. Congress must direct 
the Social Security Administration to improve their system so that this 
unnecessary, labor-intensive process can be eliminated. Each check of 
the system should also reference SSA's death records to ensure that a 
state does not issue a driver's license or identification card to an 
individual presenting personal information of a deceased person.
---------------------------------------------------------------------------
    \6\ General Accounting Office, Improved SSN Verification and 
Exchange of States' Driver Records Would Enhance Identity Verification, 
GAO-03-920, September 2003.
---------------------------------------------------------------------------
    AAMVA is working cooperatively with the states and the Federal 
Motor Carrier Safety Administration (FMCSA) to pilot test three on-line 
verification systems:
     Online Verification of Driver Licenses--this allows states 
and third parties, such as airports and banks, to electronically query 
and verify that a license presented to them was actually issued by the 
state shown on the face of the license. Once rolled out nationwide, 
this effort will greatly inhibit a criminal's ability to use 
counterfeit driver licenses.
     Interstate Digital Image Exchange--this allows states to 
exchange digital driver photos so that they can compare the picture to 
the individual standing in front of the clerk applying for a license. 
Once rolled-out nationwide, this will inhibit imposters from obtaining 
licenses and ID cards under another person's identity.
     Online Verification of Birth Certificates--this allows the 
states to electronically interact with the National Association for 
Public Health Statistics and Information Systems (NAPHSIS) to check 
state vital statistics records to determine the validity of a birth 
certificate being used to establish identity as part of the driver 
licensing program. Once rolled-out nationwide, this will inhibit the 
criminal's ability to use counterfeit birth certificates to obtain a 
driver license or ID card.
    These are very worthy efforts and, on behalf of the states, AAMVA 
thanks Congress and FMCSA for providing the seed money to get them 
going. But they are not fully effective unless all of the data is 
available and all of the states are participating. The states need the 
help and support of Congress to get these programs rolled-out 
nationwide.
    Third, the driver's license document is easily counterfeited. The 
current variety of documents and lack of uniform security features 
makes it easy for criminals to alter a real document or create a 
counterfeit. We must provide fraudulent document training to not only 
DMV employees but stakeholders to thwart acceptance of fake documents. 
The GAO investigators showed how easy it was to create and alter a 
driver's license and breeder documents using inexpensive commercially 
available software and hardware. Also, motor vehicle agencies must 
establish better procedures for removing fraudulent documents when an 
employee realizes the documents are fraudulent. We cannot afford to 
give the fraudulent documents back to the perpetrator and law 
enforcement needs to be notified without endangering the DMV employee. 
However in some instances, DMV employees inform individuals that 
produce fraudulent documents to obtain a driver's license or ID card 
the correct procedure to apply for a document. There is a delicate 
balance between customer service, safety and security.
    Additionally, motor vehicle agencies need to adopt minimum, uniform 
card design and security specifications for the driver license 
document. To secure jurisdiction-issued driver's license/ID card 
credentials, the association examined card functionality, visible data 
and card layout, machine-readable data elements, machine-readable 
technology (MRT), document security features, and other card design 
elements and considerations. AAMVA, working with a wide variety of 
stakeholders, has developed those minimum specifications and they are 
now available for use by the states.
    The fourth problem relates to people. For some, this comes with the 
vulnerability to criminal behavior, which can result in stolen DMV 
equipment and inventory and the acceptance of bribes. Individuals are 
breaking into DMV's, stealing equipment and inventory to produce 
documents. AAMVA is developing model procedures for security and 
inventory controls. DMVs and all identity issuing agencies need an 
information system to post alerts when equipment or inventory is 
stolen. Currently, through AAMVA's Web site, the association posts 
alerts regarding official federal, international or state documents and 
equipment that is stolen.
    We must provide online verification of the driver license and ID 
card. This will render stolen equipment and inventory useless. Any 
driver licenses or ID cards created on stolen equipment would be 
rejected in the verification process because the state's database would 
not contain information pertaining to those cards.
    Unfortunately, individuals bribe DMV clerks to issue driver's 
license or ID cards. It is a lucrative business. We cannot legislate 
moral behavior, but we can fight fraud on both sides of the counter. 
However, we need to implement stronger internal controls and auditing 
procedures that detect this behavior and prevent it from spreading. 
And, we must implement stiffer penalties and enforcement for those who 
choose to break the law.
    Fifth, we must protect an individual's privacy while trying to 
bring the driver's license system into the 21st century. DMVs adhere to 
some of the strongest privacy laws on the books--the Driver's Privacy 
Protection Act. DPPA prohibits DMVs from selling your driver record 
information for commercial purposes without your prior consent. We'd 
like to make them stronger. The AAMVA Board of Directors passed a 
resolution stating that the association does not support the practice 
of collecting people's personal information from a driver's license for 
the purposes of marketing or building customer databases--without the 
full knowledge and consent of the license holder. We advocate that 
people or organizations scan the driver's license only to verify and 
not to capture information. Furthermore, in May 2003, the AAMVA Board 
endorsed eight privacy principles based on the Global Privacy Design 
Principles.\7\ The principles address openness, individual 
participation, collection limitation, data quality, use, disclosure 
limitation, security, and accountability. Therefore, AAMVA is assessing 
the impact of DL/ID security improvement on personal privacy and will 
develop best practices and model guidelines for motor vehicle agencies 
to inform citizens of personal information protection.
---------------------------------------------------------------------------
    \7\ American Association of Motor Vehicle Administrators, Status 
Report to AAMVA Membership--Attachment 4 Privacy Principles, July 2003, 
(http://www.aamva.org/Documents/idsAttach4StatReportJuly03.pdf)American 
Association of Motor Vehicle Administrators
---------------------------------------------------------------------------
    CONCLUSION
    These problems exist and are interstate in nature. The only way to 
ensure that the proper fixes have been applied is for all states to 
follow the same roadmap. Inconsistent remedies from state to state will 
leave open the loopholes that exist today. The solution:
         must be implemented as a package and not as a 
        piecemeal fix.
         will reduce identity theft and enhance homeland 
        security and highway safety.
         can be accomplished without sacrificing an 
        individual's privacy by verifying their identity.
         can only be achieved with a federal-state partnership. 
        Without a federal-state partnership to implement the solutions, 
        this comprehensive approach is little more than a best 
        practice.
    First hand you have witnessed the vulnerabilities of the current 
process. Two GAO investigations began with a different focus but ended 
with the same recommendation. The Senate Finance Committee studied the 
facts and agreed with AAMVA that states need a driver's license 
information system to share driver records, exchange digital photos, 
and verify birth and death records with vital statistics agencies.
    AAMVA seeks funding for the Birth and Death Records Verification 
Program, and Digital Image Exchange program discussed in my testimony, 
to improve the states drivers licensing system. We are grateful that 
the Treasury-Transportation appropriations subcommittee included 
critical Report language in the FY04 transportation appropriations bill 
related to the funding of these programs. We commend Chairman Istook 
for recognizing their importance and his willingness to take action. 
However, we are hoping that the language can be strengthened in 
Conference to ensure these pilot programs stay on track. There is a 
real concern that if the funding is not provided, fraudulent driver's 
licenses and ID's will continue to be issued to potentially dangerous 
individuals.
    Additionally, we seek funding in the TEA--21 reauthorization bill 
to improve the Commercial Drivers license information system and to 
build toward a nationwide all drivers license information system. We 
would ask for your help in securing this authority and funding in the 
highway bill.The states cannot go it alone. The solution requires a 
state-federal partnership that includes funding and political will. We 
need Congress' help.
    Thank you. I've concluded my testimony and welcome any questions 
from the subcommittee.

 AMERICAN ASSOCIATION OF MOTOR VEHICLE ADMINISTRATORS (AAMVA) BOARD OF 
     DIRECTORS RESOLUTION 03-08 USE OF FOREIGN CONSULAR CARDS FOR 
                        IDENTIFICATION PURPOSES

    WHEREAS, the Association has developed an Acceptable Verifiable ID 
Resources List that includes documents issued by the U.S. and Canadian 
agencies and organizations that are recommended for use by DMV 
employees to verify that a person applying for a driver's license or ID 
card is who he/she is purporting to be; and
    WHEREAS, the verifiability of the documents by the issuing agencies 
was an important factor in considering documents for inclusion on the 
Acceptable Verifiable ID Resources List: and
    WHEREAS, many member jurisdictions have expressed concerns that 
foreign consular IDs, including Mexico's matricula consular card, lack 
standardized issuance procedures, uniform security features, and a 
secure database for verification purposes; and
    WHEREAS, the AAMVA Board of Directors recommends the continued use 
of the foreign passport as an official identification document, and
    WHEREAS, AAMVA is in the process of gathering information on other 
foreign consular ID documents and their possible use for identification 
purposes; and
    THEREFORE BE IT RESOLVE, that the AAMVA Board of Directors believes 
that it is premature to recommend the use of any foreign consular ID, 
including Mexico's matricular consular card, at this time, as more 
information is needed to assess the verifiability of these documents.
    BE IT FURTHER RESOLVED, that legal and diplomatic issues also 
warrant further review and consultation with the United States 
Department of State as they relate to possible conflicts with the 
Vienna Convention on Consular Relations and Optional Protocols of 1963.
    RESOLVED FURTHER, that the AAMVA Board of Directors accepts and 
endorses as an AAMVA standard that no other foreign documents be 
allowed to provide specific data for identification purposes other than 
foreign passports. A foreign passport in conjunction with the proper 
immigration documents (i.e. I-95 for the U.S. is necessary if used to 
validate legal presence.
    Board of Directors Resolution No. 03-O8 was passed at a meeting 
duly held on May 17, 2003.

                                           Betty L. Serian
                                           Chair of the Board

                                           Stacev K Stanton
                                           Chair of the Board

 AMERICAN ASSOCIATION OF MOTOR VEHICLE ADMINISTRATORS (AAMVA) BOARD OF 
  DIRECTORS RESOLUTION 03-08 POSITION ON ISSUING DRIVER'S LICENSES TO 
                          UNDOCUMENTED ALIENS

    WHEREAS, in order to strengthen the security of the photo driver's 
license and the issuance process associated with it, it will be 
necessary to tighten the standards proving one's identity in order to 
obtain a license; and
    WHEREAS, the Board of Directors approved a minimum list of 
Acceptable Verifiable Identification Resources for verifying an 
applicant's residence, identity and legal presence; and the documents 
included are required to be original or certified copies from the 
issuing agency.
    THEREFORE RE IT RESOLVED, that raising the bar of proof regarding 
the validity of source documents for everyone strengthens uniformity 
and encourages reciprocity in motor vehicle administration and enhances 
highway safety enforcement; and
    BE IT RESOLVED FURTHER that it is the recommendation of the Board 
of Directors of the American Association of Vehicle Administrators that 
jurisdictions not grant a photo driver's license or photo ID card to 
undocumented aliens.
    Board of Directors Resolution No. 03-09 was passed at a meeting 
duly held on September 4-5, 2003.

                                           Betty L Serian
                                           Chair of the Board

                                           Stacey K Stanton
                                           Secretary of the Board

    Chairman Cox. I thank each of the witnesses for your 
outstanding testimony.
    the bells that you heard ring are a recess on the floor, 
subject to call the chair, so we expect that we will not have a 
floor votes for another hour or so. And that is good news; 
these hearings are often interrupted by work on the floor, and 
that will not happen to us just yet.
    I would like to recognize myself for 5 minutes of 
questions. And begin where we just ended up, Mr. Kiser, with 
you.
    You are recommending that the Federal Government take 
action in an area that has traditionally been one of state 
jurisdiction. I think most members of Congress want to be very, 
very careful about the federalism implications here.
    We do not want to do what is not Congress's business, we 
don't want to take over state DMVs, we don't want to tell them 
exactly how and what they may do. On the other hand, we have a 
national system, in which, for example, in the Western 
hemisphere, any U.S. citizen can cross our border going out or 
coming in merely by showing a driver's license, which is 
supposed to be prima facie evidence of--not just prima facie, 
but satisfactory evidence of citizenship, or at least the right 
to be legally in the country. So we have a lot riding on this.
    We have also got, by the GAO's estimate--correct me, Mr. 
Malfi if I am wrong--about 240 different variations of driver's 
licenses and I.D. cards issued by jurisdictions within the 
United States, so that for border guards this is a very 
difficult job.
    Likewise, we heard about the gun shows and gun dealers; we 
heard about entrance to Federal buildings; we heard about all 
manner of uses of these driver's licenses, and in each case the 
security workers, the Federal or state employees of the 
civilians, whose job it is to assess the validity of this I.D. 
are relying on an imperfect computer between their ears that 
supposed to keep straight these 240 different forms of 
identity.
    Aren't we just riding for a fall here?
    Aren't we in great need of using technology to help sort 
this out? And isn't standardization, uniformity and objectivity 
the aim, so that, for example, biometric identification will be 
part of matching the person to the I.D.
    And I am going to address this question to you, but let any 
member of the panel join in.
    Mr. Kiser. Thank you, Mr. Chairman.
    In my testimony I mentioned that we need a state and 
Federal partnership. It is clear to me in talking to my 
counterparts in the administration of driver's license laws 
that there is a clear recognition that there is a problem. And 
the problem is growing and is massive.
    It is also clear that it is in the administrative area that 
we don't have the authority to really fix that, that is a 
legislative decision.
    Chairman Cox. When you say that you don't have the 
authority, you mean AAMVA?
    Mr. Kiser. We mean AAMVA, but also as a jurisdictional 
member, it takes legislation in my jurisdiction and in each 
jurisdiction to create the changes, such as those described in 
Virginia. So it takes a political will to do that. And it also 
takes--
    Chairman Cox. Let me just interject.
    When the Federal Government very explicitly says, ``Don't 
use the taxpayer identification number for any identification 
purpose outside the tax system, because it is not reliable,'' 
and when a state then passes a law that does exactly that, what 
should be the response of the Federal Government, assuming we 
want to be sensitive on the federalism point?
    Mr. Kiser. Mr. Chairman, I wouldn't try to speak to what 
the response of federal government.
    Chairman Cox. But given the existing partnership between 
the states, who are your members, and the Federal Government, 
we want to be sensitive to the separate allocation 
responsibilities. What happens when a state so miserably fails?
    Mr. Kiser. I think, Mr. Chairman, if that state miserably 
fails it may be appropriate for the Federal Government to take 
some level of action. What that is, I am not sure.
    I do think that it is important that we recognize--as I 
believe someone said earlier--that different jurisdictions, 
different states have different levels of response to their own 
situations. Again, AAMVA's position is that you should not 
honor those documents that don't have security. We are not a 
regulatory agency, we don't have the ability to impose our will 
or the will of The AAMVA organization, onto a particular 
jurisdiction.
    Chairman Cox. Mr. Carico, you mentioned that the law 
changed in Virginia, requiring people to show proof that they 
were who they said they were, that they were legitimately in 
the country so that the 9/11 hijacker scheme couldn't be 
repeated.
    In California, we have changed our law to go in the 
opposite direction, so you explicitly do not have to provide 
such information. What do you believe the Federal Government 
should do? You represent a state; can the Federal Government be 
aggressive in this area, do we have to be supine, or are we 
just going to let it happen? What can be done?
    Mr. Carico. I think the main thing the Federal Government 
can do is help in the information sharing process between the 
states. In Virginia, we also have the Federalist concerns that 
you do, but the Federal Government has a bigger repository for 
a lot of different kinds of information. And I know in the 
criminal area, like that National Crime Information Center, the 
NCIC, has a lot of information that is available to the states. 
If someone comes up on criminal charges or something in the 
states--I was a former prosecutor--we often used that vehicle 
of information in order to more effectively go after criminals.
    The same can be done by the Federal Government. But I think 
we have to be careful, like Mr. Cox was saying, we need a 
Federal-state partnership, not only in the information sharing 
arena, but the Federal Government can encourage these states in 
the dangers of using the tax identification numbers. The 
Federal Government has a responsibility to educate the states 
as to the dangers of using these numbers. These numbers are 
rotten.
    Chairman Cox. And do you think the Federal Government has 
failed in its responsibility? I mean who in the world could not 
know this, it is posted on the website; I mean there is no 
question about this.
    Mr. Carico. I don't think that the Federal Government has 
failed, I think the states have failed to listen and failed to 
heed the dictates from the Federal Government when it comes to 
saying, ``Hey, we don't think you should use these numbers, you 
need to use more reliable numbers.'' And the states who are 
going in the opposite way have failed to learn the lessons of 
9/11.
    Chairman Cox. And therefore?
    Mr. Carico. And therefore--again I think the Federal 
Government just needs to help educate and reiterate to the 
states and help to facilitate information sharing between the 
states when it comes to these types of issues.
    Chairman Cox. Well my time has expired. I think we are 
beginning a discussion on this and other members can carry it 
forward.
    In order of appearance, Ms. Holmes Norton is next.
    Mr. DeFazio. Excuse me, Mr. Chairman. I was here before any 
other member was in the room and sat here. So how could that 
be?
    There was no other member in the room. I asked if the 
hearing was really at one o'clock because there was no one else 
here.
    Chairman Cox. I am sorry, we were just using the list that 
was provided by the minority for order of recognition of 
members.
    Mr. DeFazio. Nope, they are shaking their head.
    Chairman Cox. I am happy to recognize the gentleman if 
there is no objection.
    Mr. DeFazio. Well, I know I was here and there was no other 
member here, Mr. Chairman. The minority is shaking its head. I 
am just curious.
    Ms. Norton. Rather than have this deducted from the 
gentleman's time, I would be very pleased to defer to the 
gentleman.
    Chairman Cox. OK.
    Mr. DeFazio. Thanks.
    Chairman Cox. The time belongs to the gentleman from 
Oregon, Mr. DeFazio is recognized.
    Mr. DeFazio. Thank you, Mr. Chairman. Not on my time, but I 
have raised this issue previously with the minority side and 
they are now--it is just if you want members to come and be 
here on time, it is helpful.
    Mr.--is it Pistole, Pistole, how do you pronounce it?
    Mr. Pistole. It is Pistole, the ``e'' is silent, sir.
    Mr. DeFazio. OK. All right. OK. So when I pronounce it, it 
will be right anyway.
    Mr. Pistole. Thank you.
    Mr. DeFazio. You raised an interesting point: who people 
purport they are. If I give you--if I apply, you are a private 
sector, I come to you, I apply for a job. I give you my name, I 
give you my social security number, you say, ``I am going to 
run a background check.'' You put it into NCIC or a credit 
report, what do you get out of that?
    Mr. Pistole. You get whatever records are in there, 
obviously, but it depends on the legitimacy and the validity of 
those underlying documents.
    Mr. DeFazio. Or, whether that person has--how do you know I 
am that person?
    Mr. Pistole. Exactly. So even though the name may be 
legitimate, how do we match it up with the person who has 
presented it to them? That is the underlying issue from our 
perspective.
    Mr. DeFazio. OK. So then to Mr. Verdery, do you fly 
commercially as a passenger?
    Mr. Verdery. Yes I do.
    Mr. DeFazio. OK, I see. Because your portfolio is the 
Transportation Security Policy, OK?
    Mr. Verdery. Yes, sir.
    Mr. DeFazio. Do you go through the security?
    Mr. Verdery. Yes.
    Mr. DeFazio. OK, so you go through the screening?
    Mr. Verdery. Yes.
    Mr. DeFazio. OK. Do you think that it is necessary that we 
should be putting people through that screening at airports?
    Mr. Verdery. Of course.
    Mr. DeFazio. OK.
    Now do you think we should be putting people through that 
screening regardless of whether we know who they are or not? 
For instance, if I--if you don't know who I am, I should go 
through the screening even if we knew you were that person you 
should go through the screening. That is correct?
    Mr. Verdery. Well, yes. Of course the point of the 
screening, primarily, is to make sure that the person who is 
going to be getting on the plane is not a threat to the plane 
itself.
    Mr. DeFazio. OK. Or on the plane, or is the idea of keeping 
those materials out of the airplane terminal where passengers, 
once they have gone through screening could accept something 
from someone else.
    Mr. Verdery. Right. And that is why the screening 
checkpoints are set up before the gates.
    Mr. DeFazio. That is correct. OK.
    Now we just heard from Mr. Pistole that if I give someone 
my social security number and a name, or a social security and 
a name, that is a meaningless background check. Would you agree 
with that, since we don't know whether that is really--we 
didn't check fingerprints, we didn't go to that point.
    Mr. Verdery. ``Garbage in, garbage out.''
    Mr. DeFazio. OK. Are you aware that currently TSA exempts, 
at many airports has made it optional, that employees of 
vendors, that is people who work at McDonald's, Borders, once 
they have undergone a so-called ``background check'' that is, 
they gave their name and their social security to McDonald's or 
Borders is allowed to enter the terminal freely without going 
through security?
    Are you aware of that policy?
    Mr. Verdery. Yes.
    Mr. DeFazio. Well, how does that make sense with what you 
just told me? We know you are from the TSA, you know I am a 
member of Congress, I have got to have everything searched.
    We don't know who this person is; we know they work at 
McDonald's. We don't know if they are the person who said they 
are at McDonald's, he has already told us, you said, ``Garbage 
in, garbage out.'' He told us there is a real problem here, but 
we are allowing those people wearing coats, carrying things, to 
go freely in--how secure is this system?
    Now, what I have heard from TSA before is, ``Well they are 
not getting on planes, congressman.'' A: they might have an e-
ticket in their pocket, so we don't know that. B: they could be 
bringing something in to another person who went through 
security, who is a problem, who is getting on a plane.
    Now how can you justify that? Isn't this a little bit of a 
loophole?
    Mr. Verdery. Well it is clearly a weakness in the system. 
As you know, TSA, working with DHS, is working on a broader 
initiative, the TWIC, the Transportation Worker Identification 
Card.
    Mr. DeFazio. But today, several hundred thousand people, 
who we don't know, we don't know if they are the person they 
said they are, will file into secure areas of airports in the 
United States of America without even walking through the 
magnetometer, which of course wouldn't find explosives or--
doesn't find a whole lot of other things--without putting what 
they are carrying on a belt. They just walk through.
    They flash their McDonald's worker I.D. card at someone and 
they walk in. And you are saying this is a little bit of a 
problem. Don't you think this is a huge problem? Isn't the 
whole thing a lie for the traveling public? We are harassing 
the pilots, we are the harassing the flight attendants, we are 
checking every other passenger, we are checking you, working 
for TSA, head of transportation policy, we are checking members 
of Congress.
    But the McDonald's employee, who may or may not have given 
a fake name and I.D. is allowed to carry whatever they want in 
or out of the airport and we are not concerned and we are not 
going to do anything about it. Or if we might get them a TWIC 
someday; how long has it been that this has been going on?
    Mr. Verdery. Well the TWIC has been underway for several 
months.
    Mr. DeFazio. Right. But I mean how long have these people 
been going in and out of the airport without going through 
security?
    Mr. Verdery. I am not aware of the duration of that 
regulation.
    Mr. DeFazio. Well why does that regulation exist? Why would 
we not want the McDonald's employees to go through the same 
security as the airline pilot when going to a secure part of 
the airport where they could be carrying contraband that could 
be used to take over a plane or blow up a plane? Why don't we 
want them to go through the same screening as an airline pilot?
    Mr. Verdery. Well, as you mentioned, they are going through 
a background check.
    Mr. DeFazio. The background check, as you just admitted, 
``Garbage in, garbage out'' and Mr. Pistole told us it was 
meaningless. All they do is give a name and a social security 
number.
    Mr. Verdery. If the assumption is that the data that is 
being provided in inaccurate.
    Mr. DeFazio. Well the assumption--do you think McDonald's 
is taking fingerprints and checking these people, really doing 
a real background check on these people?
    If they don't have a real background check, why don't they 
go through security?
    The pilots, we know who they are, they have been 
fingerprinted. We know who they are, don't we? We really know 
they are that person with that I.D., that is actually a pilot 
for United Airlines, who has been doing this for 25 years. 
Everything on him and everything in his carry-on has to go 
through security. There is a McDonald's worker, we don't know 
who they are, we haven't fingerprinted them, we don't have the 
slightest idea of their identity, ``Hey welcome to the 
airport!''
    Now what sense does this system make? I have been trying to 
get TSA to pay attention--''Oh, we are working on a TWIC, 
congressman.'' Today four hundred thousand people will file in 
and out of the airport, we don't know who the heck they are or 
what they are carrying, but we are working on a bureaucratic 
solution here.
    Mr. Verdery. If I am wrong, and I would be happy to get 
back to you, my assumption is that the background checks are 
not being performed by McDonald's or by Borders, they are 
performed by the airport.
    Mr. DeFazio. They are performed by commercial vendors who--
what do they check? Do you know what they check?
    Mr. Verdery. I don't know.
    Mr. DeFazio. They check the name and the social security 
number which Mr. Pistole and you just admitted is worthless if 
we don't know that is really the person with that name and that 
social security number, isn't it?
    Mr. Verdery. I mean the broader issue is that we don't have 
confidence in the document, say a driver's license because we 
are not sure.
    Mr. DeFazio. But the broader point is, we don't even have 
to have, we don't even need a counterfeit document. You go to 
the death list, you get a legitimate name of a person and a 
legitimate social security number and you would adopt that, 
with approximately the same age as you.
    We are never going to, McDonald's is not going to get to, 
the airport isn't going to get to whether or not that is really 
that person. So shouldn't that person go through security? 
Shouldn't all these four or five hundred thousand a day go 
through security, just like the pilots and the flight 
attendants and the frequent fliers and the TSA guy and the 
members of Congress? Isn't this an incredible loophole? Don't 
just tell me, ``Oh, it is a little problem.'' It is a big 
problem. We don't know who they are.
    I am not even talking about the other side of the airport, 
which is everybody who has access to the planes, of course we 
did find a few box cutters in the seats on planes after 9/11 
probably put in there by cleaners. We are doing the same 
background check on cleaners, which is, ``We got your name and 
social security number. We will run it through the system, if 
it comes back clean, if you didn't happen to steal the name and 
social security number or misappropriate it of a felon, you are 
fine.''
    Chairman Cox. The gentleman's time has expired.
    But you are certainly eligible to answer the question.
    Mr. Verdery. Obviously congressman, it sounds like you have 
had interaction with TSA on this directly, I am not privy to 
that, but I would be more than happy to go back and work with 
them on this. It is not an issue I have worked with them 
directly on in my few months on the job.
    But just more broadly, if I could just take a second, if we 
don't have confidence in a driver's license or another document 
because there are no security features, there is no check on 
what it takes to get a document, then we go back and revise 
what the driver's license is used for. Basically, if there is 
no security then we have to assume that a driver's license only 
proves that you went and took a driving test and maybe that you 
proved that you have car insurance, but nothing else. And that 
would implicate quite a bit, whether it is Federal buildings, 
getting on a plane, gun shows, whatever. I mean the whole 
reliance on driver's license--the example you raised a fairly 
legitimate one--but it is one of many that is caused by the 
weakness in the driver's license system.
    Chairman Cox. Thank you, gentlemen.
    And I would note, that in some senses these are solvable 
problems and that today's hearing is focused on the ability, 
for example, of a known terrorist who acquired, not just a fake 
I.D., but one issued by the government that has the perfect 
imprimatur of legitimacy. And then to use it to freely gain 
access to places that he or she ought not to be.
    The separate question of people who undergo background 
checks and who work within secure perimeters are beating our 
chests, is certainly one worthy of consideration by this 
committee and I think we ought to pursue it.
    Next in order of questions, we will go to the gentleman 
from Michigan, Mr. Camp is recognized for 8 minutes.
    Mr. Camp. Thank you, Mr. Chairman. Mr. Verdery, you in your 
written testimony talk at some length about the driver's 
license and that 21 states don't require any proof of legal 
status. And it seems to me that that is an area we have a real 
concern, and particularly with the recent California law 
allowing people that are known non-citizens to acquire driver's 
licenses, which then has access to many other identifying 
documents.
    Do you have any recommendations about changing what should 
occur in those sorts of identifying documents?
    Mr. Verdery. There are a couple things I would say in 
response to your question.
    The administration is looking carefully at a whole range of 
document issues. I testified a few months ago at another 
committee at this body regarding the matricular consular, which 
is an issue which I would maybe raise today. In light of that 
issue and others, we are looking carefully at how the Federal 
Government should be encouraging states and others to come up 
with more secure documents. One area I would like to mention 
though, which hasn't come up particularly in the Q and A, or in 
the testimonies, is the positive things that are going on in 
terms of foreign documents.
    In terms of foreign governments with their passports, in 
terms of the United States government issuing visas, in terms 
of the United States government issuing passports to U.S. 
citizens, those are all going to be biometrically enhanced over 
the next couple of years as a result of legislation that 
Congress passed and that we are implementing.
    And so a lot of the problems, in terms of foreign 
documents, are going to be addressed; we will be able to lock 
in people's identities as biometrics, whether foreigners come 
in this country or a U.S. citizen.
    So there is positive news here. Clearly on the driver's 
license front there is a lot of work to be done and I think one 
thing that should be considered is, rather than trying to come 
up with a one-size-fits-all, we ought to have one feature of a 
card that is secure that could be worked across all the various 
states that is secure and gives us some ability to believe that 
the person is who they say they are.
    Mr. Camp. Well, my concern too, is in your written 
testimony, also outlined at some length, how you get into this 
country from Canada or Mexico, and it is simply a verbal 
declaration that you are a resident is sufficient under the 
rules to allow admission.
    Mr. Verdery. That is correct.
    Mr. Camp. Do you have any recommendation in terms of 
changing that or making that more secure. Because it would seem 
to me that, yes, I understand in your testimony that the agent 
at the border will have an opportunity to go deeper and ask for 
written documents, but for the most part, that doesn't happen.
    What should be done there? You lay out the current 
situation, but I wonder what you think we ought to do to 
tighten it up, to make sure that we don't have terrorists that 
come into this country by simply declaring they are citizens 
and being allowed to pass through.
    Mr. Verdery. We are looking very carefully at both the 
requirements, or relative lack of requirements on U.S. citizens 
that are returning to the country and also the Canadians and 
others who are coming into the country. As you know, any types 
of change, in terms of the Canadians, would raise some serious 
foreign policy considerations that need to be factored in.
    We are working on that as part of the U.S.-VISIT System, 
which was mentioned previously. There will be tracking at land 
borders down the road, we have to work with the Canadians and 
the Mexicans who are coming in across the country to try to 
figure out how they fit into U.S. VISIT. So there is work being 
done. The current situation of an oral declaration is clearly a 
problem, notwithstanding the good efforts of our CBP inspectors 
in trying to enforce it.
    Mr. Camp. Obviously, we have a lot of back and forth across 
the border and we obviously want to facilitate legitimate 
travel, but I wondered what direction you see these discussions 
taking. I appreciate you are working on it, but I wondered 
where do you see this going or can you report to this committee 
the direction that you see these sorts of discussions going.
    Mr. Verdery. Well as we implement the VISIT System, I think 
we are headed towards a situation of tighter documentary 
requirements. I can't sit here today and promise you exactly 
what that is going to be, that is going to be decided by 
negotiations with our foreign partners, by an interagency 
process that is not yet complete.
    We are headed in a direction where there will be more 
security, but we are not there today.
    Mr. Camp. OK. Thank you.
    Mr. Pistole, you touched on some of the reasons and 
consequences of identity theft and fraud and I know of, in 
June, Steve McGrath from the FBI testified before the Judiciary 
Committee about the consular I.D. cards and the security 
implications. And I wondered if you could update the committee. 
Anything the FBI is doing to inform other agencies and state 
and local governments about those security implications and 
just sort of, what the status is of that particular issue.
    Mr. Pistole. U.S. Congressman the FBI is working through 
the interagency process to assess the vulnerabilities that are 
associated with those particular cards, based on the lack of 
verifiable underlying data for the recipient to obtain the 
card. We are working with state and of course, the DHS, to try 
to identify those cards that are out there now that may pose a 
risk from previously issued, and then trying to move forward on 
a perspective move to see if there is a consensus to change 
that policy.
    Mr. Camp. Is there a Federal working group or task force on 
this issue?
    Mr. Pistole. Yes.
    Mr. Camp. And is the FBI involved in that?
    Mr. Pistole. Yes, with the Department of Justice.
    Mr. Camp. And tell me how that is going.
    Mr. Pistole. We are making progress in general terms, but 
again, there is a government-wide decision that has been made 
that we dealing with from a threat-assessment perspective, and 
the FBI is one small part of that as representative to DOJ.
    Mr. Camp. OK. Thank you very much.
    Thank you, Mr. Chairman.
    Chairman Cox. Thank you, gentlemen.
    The gentle lady from Washington, Ms. Holmes Norton.
    Ms. Norton. Thank you very much, Mr. Chairman.
    I am interested in prosecutions and enhanced penalties. I 
compliment Mr. Howard for the 50 arrests, the prosecutions we 
have had here. I recognize they are given with documents to 
look like in your and other offices across the country. The 
model from the country is often used, of course we know that if 
you are talking about undocumented immigrants, they don't have 
a lot to lose. They go across and they come right back. They of 
course, are not the people I am most interested in. I am 
interested in potential terrorists.
    I sent for the statute you testified to, Mr. Howard, and I 
in certain parts of that statute I fully endorse the Identity 
Theft Penalty and Enhancement Act, but to refresh my 
recollection, I sent for a summary and I don't--either we need 
a new statute in order to deal with the problem we are talking 
about in this hearing, or we would seriously need to rework it.
    The first problem I noted was that it deals with means--it 
really is an identity theft statute and it deals with 
identification using a means of identification of another 
person; whereas in the matter before the committee, we are 
dealing with probably fictitious persons altogether.
    Now they call for 5 years imprisonment for specified felony 
violations, I have got a question for you. First of all, what 
is the jail penalty, the prison penalty today that you are 
working with and under what statute? Is all identity activity a 
felony, or is some of it considered to be misdemeanor activity? 
I ask you these questions on the matter of fact that I think 
this committee may need to work on an entirely separate 
statute, now pending before Judiciary, may not even be able to 
be fixed to meet our concerns.
    Yes, sir.
    Mr. Howard. The statute we are working with now has 20 year 
penalties. The proposed statute has penalty enhancements of up 
to five years.
    Ms. Norton. You are working with a statute that has 20 
years felonies?
    Mr. Howard. Twenty year felonies.
    Ms. Norton. What is it?
    Mr. Howard. That would be either 18 USC 1546, which is 
``Use of false I.D. documents.''
    Ms. Norton. But these are all felonies?
    Mr. Howard. Everything we are talking about is a felony. 
And the proposed statute has a five year enhancement. As I 
said, we would be glad to work with Congress. Certainly one of 
the things we see is might be more of a sentencing commission 
concern, in that some of the statutes have base levels that 
only provide penalties of 24 months, 2 years.
    Ms. Norton. What is the maximum we have been able to get 
here in the District of Columbia.
    Mr. Howard. So far, Mr. Gonzalez-Gonzalez's 52 months, 
which is about four and a half years, but that was not based on 
the statute itself, he had prior convictions, which allowed us 
under the sentencing guidelines to move that penalty up to the 
total of 52 months.
    Ms. Norton. Would you like to see enhancement--I mean you 
would rather have 20 years, but I am trying to figure out.
    Mr. Howard. I think the government would. Clearly one of 
the issues that we have when we are looking at these cases are 
individuals who come in and there is other information we want 
from them. For instance, if they are, as Mr. Gonzalez-Gonzalez 
was doing, importing documents from other states, we want to 
know who that person is.
    Clearly, if they are willing to do the jail time, they are 
willing to take the penalty we have no leverage, in terms of 
trying to get them to cooperate with us.
    Ms. Norton. I would like very much to look into that.
    I have a final question for all of you. It as a very 
controversial question, a very controversial issue. The chair 
spoke about 240 different kinds of I.D. and I frankly think, 
thinking about what you do. We are asking you to do something 
close to the impossible, and you are trying to somehow conform 
all of this. And ultimately it can all become circular as you 
probe deeper and deeper to find the ultimate document, the 
ultimate identification.
    And I think part of the problem is we are dealing with 
retail remedies, after all it was undocumented immigrants 
looking for work before. If you are dealing with terrorists, it 
seems to me, we have got to get beyond the retail. And we have 
got to get beyond the state-by-state.
    Now I am a card-carrying civil libertarian, I practice 
civil liberties in the courts, and kind of had a gut reaction 
against the national I.D. card. There are many people like me, 
libertarians and civil libertarians, who have begun to rethink 
that matter, because there are much more intrusive actions that 
the government is using in order to discern identity and 
because--I will give you an example, ultimately what we are 
using is racial profiling finally, when we can't think of 
anything else to do.
    I don't know if the national I.D. card would finally get to 
the root of the problem or not. You can counterfeit those 
although probably less easily than counterfeiting all of these 
birth certificates and 240 other documents.
    I am really looking for something beyond the retail that 
produces less intrusion into the privacy of the American people 
and greater security. So I am forced to ask the question about 
a national I.D. card and ask whether you think that would in 
fact, eliminate some of these problems or whether we would 
still have a problem even with a national I.D. card?
    Chairman Cox. The gentle lady's time has expired. But you 
have put such a predicament on the table here that I am sure we 
can allow at least 20 minutes for response.
    Mr. Howard. I would be glad to give you two. It is 
certainly a--I think you hit it on the head congresswoman--it 
is a huge problem.
    And it is one that the Justice Department is certainly 
studying and trying to get a hold of. Certainly as I go through 
a lot of our cases, the people that we are finding are simply 
opportunists and they are working with people, getting money 
from folks who are looking for opportunities in this country. I 
think the whole Justice Department, and certainly my office, 
and I know Mr. McNulty's office is very cognizant of issues of 
racial profiling and we want people who belong here, who are 
here legally and who are residents to enjoy that freedom. By 
the same token, we try to get through some mechanism of 
identifying those who don't.
    But it is not an easy question, I know the Justice 
Department struggles with it and we are trying to come up with 
some answers in terms of a national I.D. And I believe a proper 
answer would probably come from someone who is on that group, 
who is looking at a national I.D. card.
    Ms. Norton. I am just looking for anyone on the panel that 
could tell how--I understand there is no policy yet and I don't 
expect you to endorse such a policy--I am trying to look for 
how effective this would be and whether it would eliminate more 
intrusive ways of trying to see if we are dealing with a 
legitimate party.
    Mr. Howard. Congressman, I would be willing to answer part 
of that.
    Obviously, as long as the government whether that is the 
state or Federal Government, is relying on paper documents 
which can be easily fabricated and fraudulent documents, it is 
problematic that we rely on those for authenticity of the 
person. And that is where the biometrics come in. Whether you 
relate that to a national I.D. card or some other type of 
identification that has either fingerprints or something else 
on it that allows for a match-up of that person to the card 
with that print on it goes a long way.
    One analogy is the FBI's National Crime Information Center, 
NCIC, which runs millions of requests, of records checks if you 
will, both criminally and civilly from around the country, 
around the world, every year. There is a standardized protocol 
for submission to fingerprints to NCIC, so in other words, if 
your fingerprints aren't submitted properly, they won't go in 
the database. So there is a benefit of having standardized, 
uniform policy and protocol for submission of information on a 
national basis, and as an analogy, there is a benefit from 
doing that.
    Mr. Kiser. Mr. Chairman.
    Chairman Cox. Mr. Kiser.
    Mr. Kiser. Congresswoman, AAMVA's perspective is that the 
national I.D. is probably not needed. One of the by-products of 
a national I.D. is the creation of an infrastructure to 
actually issue one. And we believe that the infrastructure to 
issue I.D.s is in place in the state DMVs.
    As we said earlier, there are loopholes and weaknesses in 
that process and we think that the appropriate approach is to 
strengthen what is already there and build on what is there and 
enhance it for the 21st century.
    Chairman Cox. I would also add that I wrestle with these 
same problems like all members, it may be that the Federal 
system is our strength here because one of the great fears that 
people have about the national I.D. card is that it will become 
the means and the basis for a central government repository of 
all information about you as an individual. Whereas if we 
decentralize the issuance of identification, that is less 
likely to happen. It is a big question and happily not the 
topic of today's hearing. Mr. Shadegg is recognized next, the 
gentleman from Arizona, for 5 minutes.
    Mr. Shadegg. Thank you, Mr. Chairman.
    I think it is a perfect segue for some of the questions I 
want to ask. I am fascinated that the last answer says, ``Well, 
we don't really need a national ID card because we have all 
these different DMVs and that is the vehicle to use,'' except 
that at least two states have already decided now to issue 
driver's licenses to noncitizens.
    Both California and New Mexico are taking that step. It is 
being voted in my home state of Arizona. And I think there is 
legislation about to be introduced here in the Congress 
addressing that issue from a national perspective.
    And I guess my first reaction was, well, it is none of the 
Federal Government's business to tell a state that they can't 
issue a driver's license to whomever they want except when I 
listened to the testimony as it was presented here today, 
talking about the importance of identification document fraud 
and then fraud involving state driver's licenses, it seems to 
me maybe it is the function of Federal Government.
    And I introduced and was successful in passing the first 
Federal identity theft legislation. And I think this is a 
critically important topic. But to focus on homeland security, 
Mr. McNulty, if you were advising, say, the governor of 
Virginia on the issue of issuing driver's licenses to 
noncitizens, would you advise him against that for homeland 
security reasons or for it, or is it a mixed bag?
    Chairman Cox. Would the gentleman yield for just a moment, 
because there is some space in between the question and the 
answer for further refinement.
    Does the gentleman have in mind noncitizens or people who 
are in the country illegally?
    Mr. Shadegg. Well, my thought is about people who are in 
the country illegally. But I assume we are already issuing some 
to noncitizens who are resident aliens with proper 
identification.
    Mr. McNulty. Right. Right. That is an important 
distinction. I think that identification cards in Virginia and 
driver's licenses can be issued. But I would defer to my 
Virginia colleague here on that. I am pretty sure that they can 
be issued under the right circumstances. And, obviously, to get 
into the question then of issuance of identification to 
individuals who are undocumented, that is a whole other story 
and certainly creates new problems from the law enforcement 
perspective and an opportunity for individuals to, as I said, 
my testimony establish, legitimize their presence here for 
whatever purpose there might be.
    So I probably should defer to Mr. Carico, whose office 
actually would find itself advising the governor of Virginia, 
as opposed to the U.S. Attorney. But I will say this just 
before I defer.
    Our perspective that the validity of this form of 
identification, driver's license or identification card, is so 
critical to so many things. It just becomes the instrument by 
which people move about in the Commonwealth of Virginia, that 
our concern, of course, is that it is a very secure form of 
identification and that it is only given to those who have the 
proper place, that is, they are permitted to be doing the 
things they are doing with it.
    We don't know what the hijackers did with their Virginia 
identification cards. But presumably, they used it to just 
establish their presence better. And that becomes a problem 
whether it is in the hands of individuals whose presence is not 
even legitimate or lawful in the first place. But let me defer 
to my Virginia colleague on that.
    Mr. Carico. Congressman Shadegg, in Virginia right now, 
under the new laws that we just passed in the wake of 9/11, we 
added a legal presence requirement in our laws so that people 
who want Virginia driver's licenses or state identification 
cards have to prove legal presence as well.
    Now, there are many different statuses of people who are in 
the country who are not necessarily citizens but, like you 
said, resident aliens, there're people here under refugee 
status, temporary protective status, they are here on visas and 
the like, and with the Virginia law right now, those people can 
be issued Virginia driver's licenses or state identification 
cards if they have documentation that proves that they are here 
legally in the country.
    Mr. Shadegg. And Mr. Verdery, from the homeland security 
perspective, what happens to the validity of the driver's 
license if, in fact, the states can make differential 
determinations as to who gets them and if Virginia requires 
some proof of legal status and the states of California and New 
Mexico do not, for example.
    Mr. Verdery. The concern we have is more on the security 
side in terms of do you believe that the person who is getting 
the document is who they say they are, and then can that 
document be used for various purposes to gain access to 
something that they are not qualified to do?
    I do not believe the administration has a position point 
square on the issue of should illegal aliens be given driver's 
licenses by any particular state.
    Our concern at Homeland is: Does anybody have access to an 
ID card that they should not have either because they are not 
qualified for it, or because they are an impostor, and that 
does lead them into situations that we would be concerned 
about, whether it is access to Federal buildings, access to 
airplanes, you can go down on the list.
    Mr. Shadegg. I just want to make sure I understand.
    The Department of Homeland Security and in your view the 
entire administration has no view on whether or not the states 
should issue driver's licenses to people in the country 
illegally? Homeland Security has no opinion on that?
    Mr. Verdery. I am not aware that either the Department or 
the administration has taken a particular position on that 
exact question.
    Mr. Shadegg. It seems to me the Department's going to have 
to take a position pretty quick. Because, as my colleague from 
the District of Columbia pointed out, we all struggle with this 
issue of a national identification card.
    I think surely that, as the testimony here today suggested, 
the American driver's license issued by one of the 50 states is 
what we are using now in lieu of a national identification 
card.
    I have grave reservations about a national identification 
card. But if the standards for issuance of a driver's license 
can vary as greatly as the state of Virginia require proof of 
legal presence in the United States to get a driver's license, 
but the states of New Mexico and California do not require even 
proof that you are legally in the country for the issuance of a 
driver's license, it seems to me the driver's license then 
becomes not what it has been as a standard for identification 
in this country, and particularly if you look at what it is it 
takes in different states to get a driver's license.
    My time has expired. But I think you are asking the same 
question I am in a different form. The way of making the 
driver's license secure, it appears to me, in most states has 
now been substantially differentiated from in at least two 
states where we no longer have control of the documents in even 
basic sense over what it takes to get a driver's license.
    Chairman Cox. Before I yield to Mr. Andrews for questions, 
I just want to understand the answer that the Department just 
gave concerning whether or not states should issue driver's 
licenses to person who are in the country illegally.
    The Department of Homeland Security is responsible for, 
among other things, the Border Patrol. As we discussed earlier 
in this hearing, under United States law, citizens traveling in 
the Western Hemisphere can enter and exit our country by 
displaying a driver's license.
    If the Department has not any view on whether or not people 
can be issued a driver's license when they are not legally 
allowed in the country, then what in the world are we doing 
accepting this at the borders?
    Mr. Verdery. Well, I am not even sure it is actually 
accepted at the borders as proof of U.S. Citizenship. I mean, I 
understand the legal test that the inspector that somebody 
would run into at a point of entry has to be convinced that the 
person in front of them deserves entry to the country. They do 
not have to show any ID. It is entirety of the circumstances 
kind of test. A driver's license currently is seen as a good 
indicator that the person should be allowed back in the 
country.
    Chairman Cox. And if in fact, that is the practice, how is 
it that we can be completely without a view on whether people 
should be able to enter the country with a driver's license 
that we know is issued to people who aren't allowed in the 
country?
    Mr. Verdery. I think it depends on the totality of what we 
think the states are doing in terms of driver's licenses. As 
was mentioned in the testimony, some states such as Virginia, 
have tightened up their security features that are necessary.
    Chairman Cox. Will the department not accept California 
driver's licenses for California citizens across the border any 
longer?
    Mr. Verdery. I don't believe there has been a position 
taken on that.
    Chairman Cox. Well, this is all, it seems to me laid deeply 
at the feed of the Department. We hope to have some answers 
very soon on this.
    Mr. Shadegg. Will the chairman yield?
    Chairman Cox. Well, the time belongs to Mr. Andrews. With 
unanimous consent, I would extend the gentleman additional 
time.
    Mr. Shadegg. Mr. Chairman, can I just elaborate on one 
point just very quickly.
    Chairman Cox. Yes.
    Mr. Shadegg. A reminder that technically under the law, the 
driver's license is not proof of citizenship, and that Customs 
and Border Protection does not treat it as such.
    Chairman Cox. So technically those seven hijackers who 
obtained the driver's licenses from the State of Virginia 
before they attacked the World Trade Center and the Pentagon, 
and so on, weren't supposed to get them either.
    But that is the purpose of today's hearing.
    Mr. Shadegg. Now, Mr. Chairman, in light of that followup, 
I would like unanimous consent for about 20 seconds to just 
follow up on the point that was just made.
    Chairman Cox. By all means, without objection.
    Mr. Shadegg. You just said that technically it is not 
allowed as proof of citizenship? I crossed the border into 
Canada twice this summer, and it was the identification I was 
required to produce, as was every member of my family.
    So in theory it may not be accepted as admission, or as 
proof of citizenship to get in and out of this country, in 
practice it happened to me less than two months ago.
    Chairman Cox. Well, I think to be fair to the witness, what 
he said is that it is discretionary. 8 CFR 235.1 (b) says that 
you have to establish to the examining officer's satisfaction 
that you are a citizen and have a right to enter the country, 
and it is the case in practice that that test is being met by 
presentation of a driver's license.
    Hence today's hearing. You have been very patient. Mr. 
Andrews has the time for 8 minutes.
    Mr. Andrews. Thank you. Mr. Chairman, I thank the witnesses 
for their participation of testimony today. The record before 
us is overwhelming that it is relatively easy for a terrorist 
to pose as someone else, and the impact of that is that the 
Integrated Watch List, other databases that the department is 
collecting and sharing with various agencies, is ineffective if 
we are not identifying the person who claims to be the person.
    It is my assumption that biometric technology has 
progressed to the point where at least in most cases it would 
solve that problem. You can't use someone else's iris, you 
can't use someone else's fingerprint, you can't use someone 
else's biometric characteristics.
    Does anyone on the panel disagree with the proposition? 
Putting aside for a minute the question of which agency should 
administer this, and how it should be paid for and by whom, 
does anyone disagree with the proposition that every driver's 
license and similar document in the country should have a 
biometric identification feature to it? Does anybody disagree 
with that proposition? Mr. Kiser?
    Mr. Kiser. Congressman, I don't disagree with that. A 
biometric identifier is a great place to be and we should be 
trying to get there, and in AAMVA we are trying to get there.
    But we have had a two-year study of biometrics, and our 
conclusion at this point is that although biometrics works 
great on a one-to-one match, it is awfully hard to find the 
technology that works on an one-to-300 million match, which is 
really what we need to do to have an effective biometric 
identifier at this point.
    Mr. Andrews. But doesn't that really get to the point that 
biometrics are not yet perfect, but they are clearly better 
than the piece of paper with your name typed on it. I mean, is 
there any serious dispute about that?
    Mr. Kiser. Not from AAMVA's perspective, no.
    Mr. Andrews. I am not a professional the way you folks are 
on this, but I look at the situation this way. You have all 
told us, and I was particularly impressed by Mr. Malfi's report 
about how easy it was to get into Federal buildings and across 
the border with these fraudulent documents.
    You have made it quite easy for a terrorist to pose as 
someone else. We have developing technologies that would make 
it a lot harder to pose as someone else. You could still do it, 
but it would make it a lot harder to do.
    That seems like a no-brainer to me, that it should become 
the law somehow, whether it is by requiring states to meet this 
standard, or having one national entity that takes care of 
this, but we ought to do this.
    I mean, am I wrong? Am I missing something here?
    All right.
    [Laughter.]
    Assuming I am right, which I occasionally am, what 
recommendation would you make to the committee as to how we 
should implement such a change? Should we create uniform 
standards that each state jurisdiction must meet and then 
subsidize the states rising to that standard? I don't think 
this cost should be visited upon the taxpayers of the states.
    Or should we adopt a national system where driver's 
licenses and birth certificates and such documents are issued 
by the Federal Government? Which of those two should we pursue? 
And if there are other options, what are they?
    And I would open that to the panel.
    Mr. Howard. I will just make an observation. Obviously, the 
Justice Department will have a position. But I think one of the 
observations is, certainly as a citizen, is that, you know, 
when I was starting to drive, they went from a state being able 
to set its own speed limits to having everybody drive 55.
    And what the Federal Government did at that point was that 
if you comply with the 55-mile-an-hour speed limit, then you 
can opt in to certain Federal funds. And if you didn't, you 
didn't get it.
    I mean, money is always an incentive. I think there is 
certainly a concern in some quarters about a national 
identification card, but the comment was made earlier about 
having something like a driver's license, having certain 
information, certain qualities to it that would make it sound, 
make it something you could trust. And maybe a money incentive 
is one way to do it.
    Mr. Andrews. Mr. Howard, as the chairman alluded to 
earlier, I think we are all instinctively reluctant to impose 
mandates, and we prefer incentives and suggestions. But this is 
one area where I would be for a mandate. It is inconceivable to 
me if we have the technology to make it more difficult to pose 
as someone else, that we don't require a way to do it. Again, I 
think it shouldn't be federally mandated and state funded. I 
would be in favor of us paying for it, if we are going to 
mandate it.
    Mr. Howard. Again, Congressman, mine is just an 
observation.
    Mr. Andrews. Yes. Anybody else care to recommend how we go 
about doing this?
    Mr. Verdery. One thing to keep in mind is that there is not 
necessarily the requirement that it be one size fits all, or 
that we have to have one master form for how documents might 
look. The trick is to have some type of security feature that 
we feel confident in, that is acceptable across the board.
    The driver's licenses themselves or IDs don't have to look 
alike or have the same information. It is the fact that we want 
to have confidence that the issuing party, the DMV usually, has 
verified in some way that this person is who they say they are.
    Mr. Andrews. I also understand that we don't want to freeze 
the technology in 2003. We want to be able to build in 
continuous improvements in biometric technology so it works 
better and better and better.
    But, you know, I am as much of a civil libertarian as 
anyone here, and I don't want the government spying my affairs 
and knowing things it ought not know. But it seems to me that 
if I want the privilege of driving down the roads, or availing 
myself of other public services, requiring me to show that I am 
who I say am is not at all an intrusion upon one's liberties 
and it is something that we ought to just make happen.
    Not to say this in any accusatory tone to the Secretary, 
but I think it is disheartening that we are 25 months now away 
from this calamity and this situation still exists.
    And I respect our Federalist traditions. I understand that 
this is expensive. I understand we shouldn't rush into a 
solution without understanding the technology of it, but we 
have to get on the stick here.
    And I commend the chairman for calling the hearing. I think 
that we need to get the best minds in the country, which you 
represent, together and tell us how to fix this problem. I 
think we have spent $74 billion on homeland security since 
September 11th of 2001. Some of that should have gone to this, 
and the next piece of it will certainly go to this as well.
    So I thank the witnesses for their testimony and the 
chairman for his wisdom in calling the hearing.
    Chairman Cox. The gentleman from Connecticut, Mr. Shays?
    Mr. Shays. Thank you, Mr. Chairman.
    I am somewhat reluctant sometimes to get into the issue of 
illegal immigration, because sometimes it has a connotation to 
people.
    But I wrestle with this, like probably all of you do. It is 
illegal to be in this country, but we find every way to 
accommodate people who are here illegally. We give them 
driver's licenses. We allow them to register with banks. We 
know they are here illegally, and we turn the other way.
    I would double legal immigration, but we have about 8 
million people who are here illegally and we don't seem to know 
how to address it. And what I am wrestling with right now are 
the rules done by Treasury, and I want to know each of your 
opinion about it.
    And what we did in the PATRIOT Act was we basically said we 
wanted Treasury to establish verification so that we could get 
at money laundering, et cetera.
    So they basically came out with their rules and they came 
out with their rules in July, and there was such an uproar in 
Congress that they did an inquiry and decided that they would 
look at it again, and then when there was the storm and the 
government was closed down, they came down and reaffirmed that 
they were going to keep the same rules.
    And the same rules basically say the final rule provides 
that for non-U.S. persons a bank must obtain one of the 
following, a taxpayer identification number, Social Security 
number, individual taxpayer identification number, or employer 
identification number, passport number and country of issuance, 
alien identification card or number, and country of issuance of 
any other government-issued document evidencing nationality or 
residence, and bearing a photograph or similar safeguard.
    First off, I would like to ask each of you, can you have a 
fraudulent taxpayer identification number?
    Let us start with Homeland Security.
    Mr. Verdery. I am not sure I understand the question.
    Mr. Shays. All right, let me give you an easy one first.
    Chairman Cox. Actually, if you would let that question hang 
out there and be answered, and let me just qualify it. If I 
understand your question, it is is the taxpayer identification 
number a reliable basis for the issuance of identification? Or 
is it a reliable basis for anything?
    We have covered this in this hearing already. I think that 
is a pretty easy answer. Hopefully, you don't have any question 
about it on the panel.
    Mr. Shays. Well, let us go right down.
    Mr. Verdery. Well, I think the Treasury Department and 
their regulation says that it is for purposes of these banking 
issues.
    Mr. Shays. I don't care what they think. I want to know 
what you think. Let me say to preface, you are in charge of 
homeland security. They have a perspective, you have a 
perspective. And I want to know your perspective. And having 
had 5 years of hearings on this kind of stuff, it is hard for 
me to smile anymore about it.
    Mr. Verdery. Well, as the chairman mentioned, I believe, in 
his remarks earlier--
    Mr. Shays. I don't want to know what the chairman said; I 
want to know what you think.
    Mr. Verdery. Well, there are concerns about requirements or 
identification criteria such as the ITN that we are not sure 
that the person who has it is who they say they are, but the 
Treasury regulations make clear that--
    Mr. Shays. Why are you taking the time telling me--I just 
want to know what you think. Is it a reliable document? It is, 
yes or no?
    Mr. Verdery. It is reliable in some cases.
    Mr. Shays. And in other cases it is not.
    Chairman Cox. Will the gentleman yield? I mean, you know, 
the people who manufacture these numbers, the IRS, have the 
following to say about it: ``Taxpayer identification numbers 
are strictly for tax processing. We do not apply the same 
standards as agencies that provide genuine identity 
certification. ITN applicants are not required to apply in 
person. Third parties can apply on their behalf. We do not 
conduct background checks or further validate the authenticity 
of identity documents. ITN's do not prove identity outside the 
tax system and should not be offered or accepted as 
identification for non-tax purposes.''
    I can't imagine anything more clearer than that. That is 
what the IRS says and they are the ones who manufacture the 
numbers. So to have the Department of Homeland Security say 
maybe they will be good sometimes, then I think we have a big 
problem here.
    Mr. Shays. I would like you to respond to what you just 
heard.
    Mr. Verdery. Again, this has gone through an interagency 
process. The Treasury Department has issued regulations that 
have been approved by the administration and--
    Mr. Shays. You know what you are saying to me? You are 
telling me how it happened. I have been in Congress 16 years, 
and I want to know what my Department of Homeland Security 
thinks, and the reason I want to know that is I helped 
establish this organization because I thought you might be a 
counter to some of the junk that we have seen come out of other 
departments.
    I thought you might be focused on homeland security and 
protecting our citizens. So I want to know what you think and 
what your head thinks. I want to know what you think. I don't 
want to know what you think someone else thinks.
    Mr. Verdery. The Department weighed in on this during the 
interagency process.
    Mr. Shays. And said?
    Mr. Verdery. And expressed concerns about the regulation in 
general. And the administration made a decision that the 
Treasury regulation would go forward.
    Mr. Shays. Right. But the answer to it is, the Department 
disagreed with the decision. There is nothing wrong with saying 
that. You heighten, frankly, and make me feel a little better 
about the department. The position was you opposed it, correct?
    Mr. Verdery. There were certain things about the proposed 
regulation we had concerns about, yes.
    Mr. Shays. And wouldn't one of them have been based on the 
very explanation you heard from our chairman?
    Mr. Verdery. About the parts of the regulation that we 
thought were not as--the documents that would be accepted that 
weren't as secure as we might like.
    Mr. Shays. Mr. Pistole, how many times have you met with 
Mr. Verdery?
    Mr. Pistole. None.
    Mr. Shays. None?
    Mr. Pistole. None.
    Mr. Shays. This is the first time you two have met?
    Mr. Pistole. Yes.
    Mr. Shays. Why?
    Mr. Verdy. Well, I was just confirmed a few months ago.
    Mr. Shays. OK.
    Mr. Pistole. If that answers the question.
    Mr. Shays. How many months ago?
    Mr. Verdery. I guess three, two or three.
    Mr. Shays. So this is the first time you all have sat and 
talked about this issue?
    Mr. Pistole. Yes.
    Mr. Shays. What do you think about a taxpayer 
identification number?
    Mr. Pistole. Really, it is an unreliable form of 
identification for verifying the authenticity of the person. 
And by way of analogy, several of the 19 hijackers when asked 
to provide a Social Security number simply wrote a number in a 
document form that was not verified. So anybody can fabricate a 
number if it is not verified for authenticity.
    So we have concerns, have expressed those concerns both in 
that regard and also from the standpoint of the perhaps 
inconsistencies in the way that they may be scrutinized. So 
even if there is a legitimate taxpayer identification number, 
or Social Security number, if the entity, whether it is a 
financial institution or otherwise, is not exercising due 
diligence in scrutinizing that number, then it is to no avail.
    Mr. Shays. How about, if you would respond to this, the 
number and country of issuance that any other government issued 
document evidencing nationality or residence and bearing a 
photograph or similar safeguard?
    What do you think of that, Mr. McNulty? Mr. McNulty, I am--
excuse me, Mr. Pistole, I am sorry.
    I am sorry. I am so eager to go through this. Why don't we 
take the first one and just do--I think we kind of know the 
taxpayer number, but why don't you respond, if both attorneys 
would respond?
    Mr. McNulty. All I can say as a Federal prosecutor in 
Virginia is I have prosecuted people for using a stolen 
taxpayer identification number, or a bogus tax identification 
number. So, obviously, it is another form of identification 
that is subject to theft and fraud, and it is not reliable 
therefore in some kind of means for establishing positive 
identification in the way we are discussing today.
    Mr. Shays. Thank you.
    Mr. Howard?
    Mr. Howard. I would agree with that. I think that unless 
you are going to do the background to it to find out who 
actually filed the taxes, where they were filed from, verify a 
signature, if all you are going to do is present the number, it 
is certainly our experience that almost any number can be 
fraudulently obtained or manufactured.
    Mr. Carico. Sir, in Virginia, we do not see the tax 
identification numbers as being reliable enough to allow for 
someone to, like, get a driver's license or state 
identification card. So my answer to you would be that we in 
Virginia do not find that it is reliable enough to get those 
sorts of identifications.
    Mr. Shays. Thank you.
    Mr. Malfi. From the operations that we conducted, part of 
the problem is that cards or pieces of identification that are 
issued by the government, or by the state, gives people that 
are examining them a false sense of security and almost a 
complacency for the fact that if you have one of these cards, 
which they really have no way to validate the authenticity of 
them, it lets their guard down because they feel that because 
you are a bearer of this instrument, or this document or this 
card that is issued by a state or a government, that you are 
who you are.
    And the important part in regards to all of these types of 
documents is that, one, they are issued for different reasons, 
and we can't have a document that is being used for something 
other than what the original purpose to issue that is.
    Mr. Shays. Thank you. Very helpful, gentlemen.
    And, Mr. Chairman, I know my--I realize, but let me just 
proceed.
    Yes, sir?
    Mr. Kiser. Congressman, we believe that the ITIN, or the 
taxpayer identification number should not be used as a breeder 
document in the issuance of a driver's license.
    Mr. Shays. So I guess we conclude, Mr. Verdery, you are 
supposed to be the champion of homeland security, you are 
supposed to be the one organization we turn to. And when we go 
right down the line, no hesitation, no qualification, no BS, 
just the realities of circumstance for members of Congress to 
then make a judgment. I would like to think that I could get 
that same precision from you and, frankly, from the Department.
    Chairman Cox. The gentleman's time has expired.
    The gentleman from North Carolina, Mr. Etheridge, is 
recognized for 8 minutes.
    Mr. Etheridge. Thank you, Mr. Chairman.
    Let me also join my colleagues in thanking you for this 
hearing and for all of you for being here. This is an important 
hearing today, and I hope that from this hearing we will find a 
way to find some legislation to deal with an issue.
    I couldn't help but think as the dialogue was going on 
about how we use a driver's license. If I go out today to 
National Airport, or to Dulles, and decide I am going outside 
the United States, I am going to present a passport or I am not 
going. Now, I realize this is a little different. Even if I am 
flying to most any place, Canada, Mexico, otherwise, I have to 
present a passport and when I get there, they are going to ask 
to see it.
    Now, I am not sure I am going to get that far with a 
driver's license, but the point is that if we do that for air 
travelers, then we don't deal with it on the people who get on 
our roads and drive from point to point, we would never have 
worried about if we hadn't had 9/11. This is a serious matter.
    One other point I will make and then I want to ask a series 
of questions. You know, we have a lot of Federal, state and 
local partnerships. We do it through transportation systems, we 
provide monies for highway transportation, the interstate 
system, secondary roads, et cetera. That's a partnership.
    And to get that money, you have to meet a certain standard. 
I know. I served as a state legislator and as a county 
commissioner and as a statewide elected official. You do not 
get that money until you meet that standard.
    And yet, here we are talking about an issue that is 
critical to our national defense and the security of our 
people, and we cannot seem to agree that we ought to have a 
standard from state to state.
    So with that, let me ask a couple of questions.
    How is the Federal Government working with state and local 
officials to provide information about identity theft?
    And I guess I ought to start with you, Mr. Verdery, since 
you are Homeland Security.
    What are we doing to help with this issue? Because it is 
obviously quite serious.
    Mr. Verdery. Well, as I mentioned in my prepared testimony, 
there is a number of different things going on. And I suppose 
it would be nice if they were all centralized in one place.
    But there are a number of agencies that have responsibility 
in this area. The Secret Service is working quite a bit with 
state and locals in terms of trying to get out the word on 
identity theft, how to prevent it.
    You have the Secret Service working with AAMVA on driver's 
license issues, trying to develop security standards. We agree 
with them that there should be a unified standard for the 
issuance of cards in the security standards.
    You obviously have the prosecutions for identity theft both 
by our Federal agents at ICE and Secret Service but also down 
at the local level with our prosecutors. Not to mention the 
efforts more on the civil side with the Federal Trade 
Commission, which has a huge outreach effort to combat identity 
theft under Chairman Muris.
    I mean, there is a lot going on. Is it as much as we should 
be doing? Perhaps not. But there is a lot of work going on to 
try to develop security standards in this area.
    And again, I would not want the record to close today 
without returning just briefly to the work we are doing on 
passports and foreigners trying to come to this country on 
passports and visas. Over the next couple of years, things are 
going to change quite a bit in terms of biometrics being 
incorporated in those documents.
    If we are worried about terrorists coming in, especially on 
airplanes, it is going to be a lot harder for them to find a 
way into this country without being checked with various watch 
lists and the like.
    Mr. Etheridge. Well, that was not the point of my statement 
as it related to passports. The point of my statement with 
passports was the fact that we have pretty good security if I 
am going to fly. The question is, we are talking about identity 
theft and we are allowing our driver's license to be one of 
those issues that opens the door for a lot of opportunities.
    That being said, let me follow up with this question--and I 
am not trying to pick on you, Mr. Carico from Virginia. It just 
happens other states are doing some of the same things.
    But it deals with the whole issue of having an 
identification number on a driver's license. And in the case of 
Virginia, obviously, I believe you indicated they use the 
Social Security number on the driver's license. Is that 
correct?
    Mr. Carico. No, sir. No longer.
    Mr. Etheridge. No longer. You did do it, OK. +
    I think there are some states that still do, so let me 
follow that up and get you to respond to that. Because the 
Social Security Administration and others have indicated that 
that is one of the issues that they are concerned about, and 
they discourage that as much as possibly simply because that 
opens up a whole new avenue of identity theft.
    That being the case, did Virginia go to the random numbers 
in using the ID number?
    Mr. Carico. Yes, sir. We now have driver's license numbers 
that are assigned once you go and request a driver's license.
    Mr. Etheridge. Do you know how many states now use that 
system?
    Mr. Carico. I do not, sir.
    Mr. Etheridge. Can you enlighten us?
    Mr. Kiser. Congressman, my understanding is that all states 
now offer citizens the option to use some other number than 
their Social Security number on their driver's license.
    I know that in my state, some citizens have chosen not to 
change their number, but they do have that option and are 
offered that option at the time they renew or at the time they 
raise the question.
    Mr. Etheridge. Well, let me follow that up, if I may.
    So it is an option on the part of every state, or most 
states?
    Mr. Kiser. All states, as far as I know, sir.
    Mr. Etheridge. It's an option.
    Mr. Kiser. Yes.
    Mr. Etheridge. So if we want to prevent identity theft, it 
seems to me that that would be one way to execute that.
    Mr. Kiser. Congressman, I think you are absolutely correct.
    And again, in the case of my own state's experience, most 
citizens have chosen to take a randomly issued number. But some 
have in fact asked to have their Social Security number left on 
their driver's license, for whatever reason.
    Mr. Etheridge. Mr. Verdery, let me come back to you then, 
we are talking about identity theft, we are talking about 
homeland security, helping to protect the homeland, and this 
being one of those areas that can open up a lot of Pandora's 
Box.
    What is the Department doing to discourage the use of 
Social Security numbers on driver's licenses? It would seem to 
me this is an area that we can have some impact.
    Mr. Verdery. Well, I am not aware of particular efforts in 
terms of our discouraging states from using the numbers 
themselves. I know we are working closely with the Social 
Security Administration generally to try to figure out ways to 
tighten up the use of those numbers across the board.
    But I am not aware of particular efforts in terms of trying 
to get the numbers off the ID cards themselves. But perhaps 
that is something that should be looked into.
    Mr. Etheridge. It would seem to me that is part of what 
homeland security is all about. If you are getting it off 
public documents, you are saving an awful lot of time for the 
rest of the folks sitting on this panel and the American public 
at large.
    So I would hope that would be something you would take away 
from here today, and spend some time on. It seems to be a good 
use of time.
    Mr. Kiser, what training are state DMV workers receiving at 
the present time to help identify false documents? And how 
should, or could, this training be improved to reduce the 
issuance rate and the problems we now face to validate and get 
the identification right?
    I know we have talked about a lot of the issues. It seems 
to me the first issue is training until we get some legislation 
to deal with the other two, to save some of the problems we are 
having in identity theft.
    Mr. Kiser. Congressman, AAMVA's worked on a couple of 
fronts in that area. One is we have developed a standardized 
list of acceptable documents that should be used for 
identification purposes, or breeder documents, in generating a 
driver's license.
    Beyond that, we have developed a fraudulent document 
recognition training program that we unrolled to our membership 
on a limited basis over this past summer, that we now have 
scheduled training for at least one representative from each 
jurisdiction over the next several months where they will get a 
five-day training course on fraudulent document recognition.
    And how can that be helped? There is a cost to doing that. 
And so, you know, those costs are being shared now with AAMVA. 
I think we are getting some assistance from NHTSA, I believe, 
but to continue to fund that the effort is to train at least 
one person in each jurisdiction who can then go home and train 
additional DMV employees in the jurisdiction.
    So that program is up and running. The reviews from its 
initial pilot were very good. It was expanded from three days 
to five days to address some additional issues.
    Mr. Etheridge. Mr. Chairman, thank you. I know my time has 
expired, but what you are talking about is train the trainer.
    Mr. Kiser. That is correct.
    Mr. Etheridge. And the key is how well that first trainer 
is trained. And I would hope, having had a little bit of 
experience in education, that we would use the issue of rewards 
in terms of a level of certification, because I know it takes 
money to get that to some point, but sometimes, given the 
challenge in this country that would be a great way to do it in 
terms of without a lot of additional resources.
    Mr. Kiser. Congressman, we are looking at a certification 
program that may enhance that employee's self-esteem, maybe 
their status within their jurisdiction.
    Mr. Etheridge. Thank you, Mr. Chairman.
    Chairman Cox. Thank the gentleman. The distinguished 
ranking member, the gentleman from Texas, Mr. Turner, is 
recognized.
    Mr. Turner. Thank you, Mr. Chairman. Mr. Verdery, I want to 
follow up on some of the sentiment that was expressed by 
Congressman Shays. It seems that we really need your department 
to be an advocate for greater security.
    You know, we consider it our responsibility in oversight to 
try to close these security gaps, but it is disturbing when we 
learn about some of these and that the Department hasn't 
stepped forward and urged that these gaps be closed.
    In your opening statement, the written version of it, on 
page one, you reference about one problem, that the current law 
allows a U.S. citizen to leave the United States and travel to 
any country in the Western Hemisphere, except Cuba, and return 
to the country without, showing a passport.
    Now, it seems to me that if we are going to control who is 
coming in and out, the problem is simplified if we know who the 
good guys are. In this instance, if we knew that we were 
dealing with a U.S. citizen, if they had a passport that was 
presented upon leaving and re-entering, then that would help 
close the gap and solve the problem that you went to great 
lengths to describe in the first page and a half of your 
testimony. And yet, nowhere in that presentation do I see that 
you suggest that the Congress ought to close that potential 
gap.
    These are the kind of suggestions and the kind of advocacy 
that I think we need from the Department. If you have a 
position on that, it wasn't expressed in this presentation. But 
it just seems like common sense would tell us that if it 
requires a passport to travel in and out of the country as an 
American citizen to go other places, that if we don't require 
it in the Western Hemisphere, that a terrorist can fly into 
Brazil and then into Houston and assert that they are a U.S. 
citizen. And they walk right in.
    So there are some common sense things here that the 
department ought to be advocating to the Congress to it. You 
ought to be out front. You ought to be the leader. If it turns 
out it is too restrictive, that Congress rejects it or somebody 
thinks it is too burdensome on the American people and we want 
to leave that gap open, well, we made the choice.
    But why is it we don't have the Department coming up here 
and telling us we ought to deal with this issue that you so 
clearly articulate there in your own testimony?
    Mr. Verdery. Well, we are looking pretty carefully at the 
requirements for U.S. citizens as they return back into the 
country as we are working on the implementation of the U.S. 
Visit system which I mentioned earlier. Now, clearly, it is a 
problem as I outlined in the testimony.
    Now, I think if you talked to colleagues on the northern 
border especially, people who are U.S. citizens who are used to 
going back and forth, out of the country to Canada, asking them 
to have a passport for each trip back and forth is something 
they are going to be very interested in.
    But we are trying to weigh the equities here and try to 
figure out balance of security needs versus the economic needs. 
And it is something we are definitely focused on. At this point 
today sitting here today, I can't tell you that we are 
recommending solution X or Y. But it is something we are 
closely examining along with the State Department.
    And in terms of your hypothetical about the person flying 
in from Brazil, that person has to go through a CBP inspector. 
Presumably, if he is from Brazil, the inspector hopefully is 
going to recognize that he is probably not a U.S. citizen and 
will require the type of passport control that you would need 
at an international airport. That is what they are there for. 
That is why we have gone 18,000 of them to try to distinguish 
between those people who need that kind of entry document and 
those who don't.
    And while I have the floor, I realized from your remarks 
that my conversation with Congressman Shays may have left an 
unclear impression. The Department agrees that the ITIN does 
not in and of itself prove identity. The Treasury Department 
has decided, for purposes of banking regulations, that it can 
be used or can be accepted by financial institutions for 
opening up a bank account. But beyond that, we agree with you 
concerning other utility to establish identity with that kind 
of document.
    Mr. Turner. Thank you, Mr. Chairman.
    Chairman Cox. The Treasury was implementing changes that 
were occasioned by the Patriot Act. I mean, it is just sort of 
remarkable that legislation that was meant to make it easier to 
get after terrorist money was implemented in such a fashion 
that it opened up possibilities for people to fraudulently open 
bank accounts. Don't you agree?
    Mr. Verdery. As I have mentioned, we had various concerns 
with the regulation. It is now final. And we raised those 
concerns.
    Chairman Cox. Well, if it is a final regulation, it is 
certainly not final in the Capitol. And we are going to be 
after this.
    We have heard today the full spectrum of crimes that are 
facilitated by document fraud and identity theft. I wonder, 
what about abuse and waste in, for example, government benefit 
systems?
    We have two U.S. attorneys here. Possibly you can tell us 
whether the kind of document fraud that we have been hearing 
about today contributes to abuses such as Social Security 
benefit fraud or Medicare of Medicaid fraud?
    Mr. McNulty? Mr. Howard?
    Mr. McNulty. Absolutely, Mr. Chairman.
    These frauds sort of are layered, and they begin with 
fraudulent acquisition of some form of documentation. But it 
just takes off from there.
    And the vendors of fraudulent documents are skillful at 
providing a variety of documents that will allow a person to 
engage in a whole fraudulent scheme or enterprise that they 
might need in order to achieve whatever fraudulent goals they 
have.
    And so you have a terrible waste of resources at agencies 
spending time issuing these fraudulent documents.
    Consider the Department of Labor alone, issuing thousands 
of fraudulent certificates for acquiring a job in the United 
States and the waste that is.
    The amount of abuse of the proper role of these various 
agencies and what they are doing, through all of the different 
fraudulent schemes, is just staggering to consider.
    So I think that from an abuse perspective, this whole 
problem of document fraud in trying to deal not only with the 
prosecution of the crime but reforming procedures so that the 
agencies issuing various forms of documentation and 
identification are really looking at how they are going about 
their business and how they are screening and analyzing the 
applications and other things that they are receiving would be 
an enormous benefit to our government.
    If you could improve that, I think we could reduce this 
problem substantially.
    Chairman Cox. Mr. Howard?
    Mr. Howard. Although you are talking about fraudulent 
documents, some people want to steal your identity. They want 
to be you. They want to take your credit, they want to be able 
get the great benefits of being a Congressman from California, 
so they want to be able to buy a house, buy a car, get credit 
cards, take vacations.
    It is a different sort of issue, but if you talk about 
fraudulent activity, we estimate that people in this country 
are the victims of identity theft, probably about 33 million 
people, and certainly a number of them are here in Washington.
    And it is a really a life-style change. You have got people 
who literally can't get their lives back. They can't, in their 
own good name, get credit because of what other people are 
doing.
    So it is a huge issue. I think it is one of the reasons 
that the Postal Service has kicked off their Operation: 
Identity Crisis.
    And one of the things we have learned, I think all the U.S. 
Attorneys have learned, is it is something we have to work 
together with on all law enforcement.
    One of the things we are going to do in the U.S. Attorney's 
Office in the District of Columbia is just have training on, 
one, how to recognize it.
    Certainly one of the areas I think that legislation can be 
used is, often the victims find that once they find they are 
the victims of identity theft, banks and other institutions 
make it up to them to prove in fact that they did not commit 
these crimes. It really kind of turns it backwards, especially 
for someone who is going through one heck of a time trying to 
gather their good name back.
    But it is a huge, huge problem in the District of Columbia 
and the country in general.
    Chairman Cox. The gentleman from Florida, Mr. Meek, is 
recognized for 5 minutes.
    Mr. Meek. Thank you, Mr. Chairman.
    And I thank our panel for being here today. I just want to 
say as it relates to this identity theft and fraud and 
enforcement that is needed, I don't believe that the country is 
ready to do what it has to do for a national identification 
card. I really don't honestly believe that.
    I for one am a past law enforcement person as it relates to 
Florida State Highway Patrol. I have been dealing with driver's 
license for a very long time now and I can tell you we can go, 
we can change the driver's license every 3 years. There is 
always going to be a way to get a counterfeit one.
    As it relates to a national identification card, we talk 
about the Patriot Act I, there were those voices that were 
saying that we needed a Patriot Act I, once upon a time. Right 
now those same voices are saying we need to do away with 
Patriot Act I and definitely not do Patriot Act II if it is 
going to be the intrusion of civil liberties and individual 
right. And it is interesting to hear those voices say that.
    I do believe if something does happen, God forbid, in the 
very near future in our country as it relates to safety or an 
event takes place in our country, an identification theft or 
fraud or something has something to do with that, then maybe we 
will be able to move some legislation at that time. But 
unfortunately that is going back to the traffic light situation 
of saying that we have to have X amount of lives lost before we 
put a traffic light there.
    I want to know what is going on as it relates to the 
community that is sitting at the table. Obviously if each one 
of you individually don't get together under the light of 
Homeland Security, people in your agencies do. And how does 
that bubble up and bubble out and get up here on the Hill 
through the Department of Homeland Security, through the 
Justice Department, need it be through the FBI of 
recommendations on what we should do?
    I have been a part of panels and I have seen it, I have 
watched C-SPAN, I hear folks talking about what we need to do 
and what we ought to do. But when the bottom line, the final 
analysis, there has to be a horrific event before we get down 
to moving the ball down the field.
    And when we move in haste, these sort of things happen as 
it relates to banking, as it relates to what is going on with 
individuals that are not going through screenings and all of 
these things. So we need to be able to move forth.
    The purpose of this hearing today, getting back to it, was 
about hopefully moving the Department in the direction of 
making sure that we are more aggressive, of moving in a 
direction that we need to move in. I
    mean, I said it the last hearing that we got together, and 
the chairman is fully aware of it--and we have a vote coming up 
right now--the fact that this time of calm waters that we are 
experiencing right now is not a time for me to say, ``Are you 
OK, law enforcement community?''
    ``Well, I am OK.''
    ``Well then fine, let's go have lunch.'' No, it is time for 
us to make sure that we continue to stay ahead of these 
individuals that are trying to hurt us.
    I want to ask anyone on the panel as it relates to the 
carrot-and-stick approach. We talk about federalism, we are 
talking about states that are not following what the Federal 
guidelines are set out for. People around here are driving 55 
and 65 because the Federal Government says they are going to 
cut highway funds.
    Any discussion as it relates to what we can do to make sure 
that we move forth as a union, not as a half a union, but as a 
union toward these United States that I am talking about, 
towards safety of our homeland as it relates to our subject 
matter, distributing driver's licenses, not having that 
information that we need, any discussion on that or any 
thoughts or ideas? Anyone may add.
    Mr. Kiser. Congressman, there was an earlier conversation 
about the issue of state's rights and the carrot-and-stick 
approach. And I think it is a fine balance.
    It is clear to me that the Congress, the governors, the 
legislators in the jurisdictions have to work together to come 
up with a solution that will work. We never believe that we 
have a large piece of that solution ready to roll out. It is 
not in our authority to do it. We need the Congress to advocate 
that there in fact is a problem and that there is a huge 
problem and to be an advocate for saying there needs to be 
better integrity.
    You can tie that to the carrot-and-stick approach. That 
obviously has worked in highway funds and speed limits and all 
sorts of things in the past. And that certainly gets the 
attention of state legislatures and governors, for that matter.
    And so, we believe we can solve some of these problems. As 
someone said earlier, and they are correct, that you will 
probably never prevent all of the fraud that occurs, but I do 
think there are things that we can do to bring the driver's 
license process into the 21st century. I think that the state 
administrators and DMV are ready and willing to do that.
    Mr. Meek. When you say bring it into the 21st century, are 
you talking about some sort of national seal on a driver's 
license? Are you talking about one particular driver's license? 
What are we talking about here, because I can tell you that the 
Treasury Department, as it relates to seals and paper and all 
of these things, they are switching to every 3 years. They are 
regenerating themselves, but they are finding counterfeiting is 
pretty prevalent.
    Mr. Kiser. We believe that in order to move to the 21st 
century, you have to have unified standards. The document may 
not look exactly the same from jurisdiction to jurisdiction, 
but it should have a set of standard security features. It 
should have placement of data in a particular position so that 
it is recognized by a law enforcement officer or an airport 
worker or whoever that might be. And so, yes, we do think that 
there needs to be a great deal more standardization of the 
document itself and the contents of the document in order to 
enhance that security.
    Mr. Meek. Last question, Mr. Chairman.
    Chairman Cox. I see the gentleman's time has expired. And I 
really need to be punctilious about this because we have two 
members on the Democratic side and we are running out of time 
on the floor.
    And I don't know who I am supposed to recognize next.
    Ms. Jackson Lee, the gentlelady from Texas, is recognized 
for 5 minutes.
    Ms. Jackson Lee. I thank the chairman very much and 
apologize to the witnesses, overlapping hearings that have been 
occurring, that I did not get a chance to hear all of your 
testimony, but I certainly have perused a good deal of it.
    I served as a ranking member on the Immigration Committee, 
on the Judiciary Committee, so some of these issues we have 
dealt with, particularly the issues dealing with the use of the 
biometric card or the use of various identities as it relates 
to immigrants. And, of course, we have had hearings on the 
matricular card as well.
    But let me focus on where I would like to go with this, is 
the question as to what would be the best vehicle to ensure 
that you have the tools to make sure that America's homeland is 
safe. I think you are entrusted the responsibilities of law 
enforcement, but you are also prevention as well, because when 
laws are passed, when they know that there are strong oversight 
provisions and oversight institutions, then people are hesitant 
to engage.
    First, I would like to say that I am on record for being 
opposed to a national identification card. I don't think that 
it is going to be advantageous, because any unified document is 
subjected to even more opportunities for fraud because you 
become familiar with it. And it becomes a document that you can 
then make more perfect--the ones who are perpetrating fraud. 
The tax ID numbers have been fraudulent as well.
    So let me raise these questions. And I would appreciate it 
if you all would answer it.
    What would more training do, more staffing do and more 
technology do for all of your work? Is that where we are going? 
I know there is a bill, Paul--if I might the U.S. attorney 
that, having served with him on the Judiciary Committee.
    There is a H.R 1731. And if you recall, I am not sure if 
you had left the Judiciary Committee. We did something on 
identity fraud when we had that horrible experience of FBI 
agents going into the Department of Justice about, maybe, 2 or 
3 years ago with false documents. I guess that was part of the 
overall study. We had hearings in Judiciary. And it wasn't 
dealing with terror and immigration as much as it was dealing 
with people violating the sanctity of secure areas.
    So would we and could we do a better job if we said to the 
various U.S. Attorneys' offices that are represented, Mr. 
Howard and Mr. McNulty, that we gave you more resources and a 
separate unit that dealt only with ID fraud? And then others 
may want to pipe in as well in your respective areas. But if I 
can to my two U.S. Attorneys on that, I would appreciate.
    Training--because I know I need to give more training to my 
immigration inspectors, clearly need to give more training to 
them.
    How would that help in your preventive and prosecution 
work?
    Let me finish my sentence by saying even as I am supporting 
us doing a better job with determining identity fraud because I 
know that helps secure the homeland, know that I am also facing 
every day the insults and confrontations by those with Muslim 
backgrounds or Arabic last names, individuals who come to this 
country repeatedly to do nothing but good or to use our medical 
services and are treated in a horrific way. And they have good 
documentation. So I want to make sure that I am on record for 
balancing, protecting the homeland and respecting the dignity 
of individuals coming into this country.
    I would ask the two U.S. Attorneys and then others, if they 
would, if we have the time.
    And thank you.
    Mr. McNulty. Thanks for the question.
    There are two things I would identify that would help a 
lot. First, authority to enforce various provisions of Federal 
law. One of the problems we run into is that among the various 
Federal law enforcement agencies, they have jurisdiction for 
particular statutes, particular types of identification fraud. 
And unless you have them together in a task force, you have a 
problem of identifying one category of fraud that leads to 
others but not having the right law enforcement agency present.
    So one of the things that I think would help, especially 
with homeland security if I could speak for Mr. Verdery, is 
that as they stand up and organize the jurisdiction and the 
responsibilities of ICE and the other entities, that the 
authority they have to go after identification fraud be 
expanded so that they can address various frauds at the same 
time.
    For example, Social Security fraud is connected closely to 
various forms of immigration fraud. Now, the Social Security 
Administration has jurisdiction over Social Security fraud. I 
am sure they would welcome the help of Immigration and Customs 
Enforcement, ICE, in investigating those kinds of offenses.
    second, when it comes to resources, while I am not in a 
position to be able to go around OMB and ask for more money for 
the administration, I will say this: that the more immigration 
investigators we have, the more we can do in this area. Our 
task force has brought together 14 or so agencies, including 
local police departments, to go after immigration and visa 
fraud. It has been very effective to pool those resources.
    But we certainly depend particularly and primarily on ICE. 
That is the agency that has the lead in this area of 
immigration fraud investigations. And to the extent they have 
the resources to match them up with U.S. Attorneys' offices and 
the task forces that we are creating, we will be in much better 
shape.
    Mr. Howard. And I will echo that, Congresswoman. And, you 
know, if I can take them in order, first of all with training, 
I can't agree with you more. One of the things we do in our 
office is we have a bias crimes task force for some of the 
issues that you have. A lot of times I think AUSAs, as 
honorable as we are and as hard as work, sometimes we don't 
understand the issues that an immigrant community may be seeing 
that we don't. And so what we have asked them to do is, we have 
asked them to come into our office and educate us.
    One of the ways that has helped us is we have actually been 
able to recruit some AUSAs off of that, so it has really helped 
us. But we in turn use that as a vehicle to go out into the 
community and then educate the community about what the issues 
are, sometimes what we are doing out there, and then who it is 
you call.
    And so training very, very important. But that is something 
we pull out of our budget, and clearly when we pull that out of 
our budget, then, you know, I am taking away from something 
else that we think is important.
    Resources. Certainly resources, I am like all AUSAs, if 
somebody suggests resources, yes, you know, we can do more with 
more U.S. Attorneys, assistant U.S. Attorneys, but also for, as 
Paul said, INS and the FBI.
    Clearly, the FBI is being asked to do an awful lot in 
terrorism, and I think that more agents in both areas would 
allow them to dedicate resources. One of the issues we find in 
the Adams Morgan area is that we can go in and we can take out 
these mills, but we can't be up there 24 hours a day, seven 
days a week. They simply have other duties. As soon as we move 
away, my guess is it takes them a good 15 minutes to have 
somebody fill that void.
    We are back there. We have to do surveillance. It takes us 
a while to build the case and we identify who exactly the 
cancer is so we can pull it all out. But we pull them out in 
groups of 15, 20 and 25, and somebody is back in there. And so 
resources just to address the problem is very helpful.
    And then you said equipment. And a lot of times--
    Chairman Cox. I wonder if I could ask you to summarize--
    Mr. Howard. Sure.
    Chairman Cox. --because we really do want Ms. Slaughter to 
be able to ask her questions and we do have a vote on the floor 
with just a very few minutes left.
    Mr. Hunter. With equipment, I say ditto. How's that?
    [Laughter.]
    Chairman Cox. That was an outstanding summary, if ever I 
have heard one.
    Chairman Cox. The gentlelady from New York.
    Mr. Verdery. Mr. Chairman, if I could have 20 seconds in 
response to the Congresswoman's question about the training?
    Chairman Cox. I just want to make sure that Ms. Slaughter 
gets a chance to ask her questions, and then there will be 
endless time for you all to speak for the record.
    Ms. Slaughter. I thank you, Mr. Chairman. It is really 
important to me to do this.
    Gentlemen, I represent 100 miles of the U.S.-Canadian 
border, and we are very concerned up there with the fact that 
we are not getting what we need for first responders.
    And since I am not going to have much time, Mr. Verdery, I 
want to really address this to you, and I am going to cut right 
to the most important part, although everything I am doing is 
important.
    Now, I know this is not within your purview, but you are 
the assistant director there and I want you to get the answer 
for this and get it back to me. OK? All right.
    Niagara Falls, New York, applied for one of the DOJ grants 
for overtime for police. And Niagara Falls, New York, as you 
know, not only represents one of the largest power plants on 
the face of the Earth, one of the seven wonders of the world, 
but towers and all kinds of trestles to carry the electricity 
across the state of New York, international railway 
infrastructure and over 5 million visitors a year, and they 
didn't get one.
    Now, one of the reasons maybe why they didn't get one is 
New York got 13, 13 of those grants.
    Chairman Cox. If the gentlelady would yield, I just want to 
let her know that there is less than a minute left in the vote 
on the floor.
    Ms. Slaughter. All right, thank you. You all go vote, this 
is more important to me, I think, than this vote.
    Chairman Cox. Except that I have got to adjourn the hearing 
before I can go vote.
    Ms. Slaughter. Oh.
    Chairman Cox. So what I would suggest is that you put your 
entire question on the record, and then we will get it answered 
for the record.
    Ms. Slaughter. All right. I have a couple more questions 
and I will put them in as well. But anyway, New York State, as 
I was saying, got 13, Puerto Rico got 155.
    Now, there is no earthly reason why Niagara Falls, whose 
costs have more than tripled, would be, this is a case of 
really rural counties, farm counties, in the State of New York 
that got these overtime grants on homeland security.
    I agree with the GAO. This grant idea really has got to be 
reformed. It doesn't make any sense.
    We do not have unlimited resources here, and unless there 
were political considerations involved, I cannot for the life 
of me understand why a place as strategic as Niagara Falls, one 
of the most important border crossings in the country, with 
everything else that I have mentioned, and in addition numbers 
of chemical plants and remnants of the Manhattan Project, I 
almost hesitate to mention the targets that are there in that 
one small area.
    But to not get any attention at all, and certainly not to 
get any help when they were paying overtime, it absolutely 
makes no sense to me.
    As their representative, I am as mad as I can be about it. 
And I want an answer, and I want it as soon as I can get it, 
and I want to see what we can do to remedy this, because there 
is no way they are going to be able to try to even continue 
what they are doing if their costs are tripling and 
quadrupling.
    And there is no help, and those costs are incurred because 
of what they are trying to do to guard those borders and those 
strategic points of crossing.
    And I will let it go at that. I have a couple of other 
things I want to ask you, but I will send those to you. But I 
really want you to get me an answer that I can take back to 
Niagara Falls that is going to make some sense to them up there 
as to why Livingston County, a rural dairy county, which is 
quite beautiful, and we love it to pieces, why did they get 
overtime COPS grants, and Niagara Falls didn't?
    And if it is a political issue, I cannot tell you how angry 
I am going to be. Thank you.
    Mr. Verdery. Well, I can hear your concerns. I will take 
them back and report back as promptly as we can.
    Chairman Cox. And we will leave the hearing record open so 
that we can have that answer expressed fully in the record. I 
want to thank all of our witnesses for bearing with us through 
several hours.
    This was an extremely informative and constructive hearing. 
The hearing is adjourned.
    [Whereupon, at 4 p.m., the committee was adjourned.]

                   MATERIALS SUBMITTED FOR THE RECORD

 Questions for the Record for Mr. Joseph R. Carico from the Honorable 
                            Christopher Cox

    Question: What happens if the application is denied before the 
expiration of the driver's license?
    Answer: Virginia's new legal presence law provides that DMV is not 
to issue a driver's license or identification card to an applicant who 
is the subject of a notification from a federal, state or local federal 
government agency indicating that the individual is not lawfully 
present in the United States pursuant to Sec. 46.2-328.1(c) of the Code 
of Virginia. In order for such an applicant to obtain a subsequent 
document, the individual must provide DMV with documentation that 
proves they are in the United States lawfully. As currently written, 
the law does not require DMV to obtain immigration application status 
updates for these DMV document bearers, but will require DMV to take 
action if the agency is notified by law enforcement that such an 
applicant is no longer lawfully present in the United States.
    Question: Are DMV offices notified that they have someone out there 
who shouldn't have a driver's license?
    Answer: In Virginia's new legal presence law, provision has been 
made for DMV to receive notice from local, state and federal agencies 
that a licensed driver or identification card holder is no longer 
lawfully present in the United States.
    Question: How about when BCIS take more time than they expected, 
are states updated so that these people that deserve a driver's license 
are not driving around with expired licenses?
    Answer: We are not aware of any notification system that may have 
been implemented by BCIS that would provide states with automatic 
updates concerning pending applications. Once the new law is 
implemented, we anticipate that individuals who have pending 
applications on file with BCIS and whose driver's license is about to 
expire will take measures to apply for a new driver's license. DMV is 
planning to use specialists to address such situations. The specialists 
will consider an applicant's situation and attempt to determine whether 
the applicant is eligible for another driver's license. It is likely 
that the determination of whether the applicant is eligible to receive 
a new driver's license will include an inquiry to BCIS.

  Questions for the Record to the Honorable Stewart Verdery from the 
                     Honorable Lincoln Diaz-Balart

    Question: Currently, BCIS provides immigration applicants a receipt 
indicating that BCIS is processing their application and the estimated 
time it will take to approve or deny the application. States then issue 
a drivers license for that period of time, even though it usually takes 
more time for BCIS to process the applications because of their large 
application backlog. What happens if the application is denied before 
the expiration of the driver's license? Are DMV offices notified that 
they have someone out there who shouldn't have a driver's license? How 
about when BCIS take more time than they expected, are states updated 
so that these people that deserve a driver's license are not driving 
around with expired licenses.
    Answer: State Departments of Motor Vehicles (DMVs) can participate 
in the Systematic Alien Verification for Entitlements (SAVE) Program in 
order to electronically obtain immigration status information when an 
individual applies for a driver's license or state-issued 
identification card. DHS/USCIS will verify the immigration status of 
the applicant, but will not make any recommendation to the state DMV 
whether to issue a driver's license or state-issued identification 
card.
    The SAVE Program is responsible for administering DHS/USCIS 
programs involving customer access to the Alien Status Verification 
Index (ASVI) database. Access to ASVI enables federal, state, and local 
government agencies to obtain immigration status information needed to 
determine an applicant's eligibility for many public benefits. Several 
state DMVs participate in the SAVE Program. At the present time, 
California, Florida, New Jersey, New York, Virginia, and Wyoming have 
signed a Memorandum of Understanding to participate. In FY 2003 over 
674,000 queries were performed by these states. Indiana and Colorado 
have also expressed interest in participating.
    A personal computer with modem and software is used to access the 
information. In most cases, immigration status information will be 
provided electronically within seconds of the request. When the system 
cannot provide the immigration status immediately, the inquiring state 
DMV must enter additional information and electronically send the query 
to DHS. That query is transmitted to an immigration status verifier 
(ISV) for an additional verification check. The response to queries 
requiring additional verification is usually provided within 3 
workdays. Federal, state, and local government agencies are charged a 
fee for queries conducted -- 24 cents for an initial query, and 24 
cents for an ISV verification.
    USCIS issues receipt notices when an application or petition is 
filed for immigration benefits. The receipt notice establishes that an 
application/petition was filed and usually indicates the estimated 
amount of time it will take to process that application. When the 
application is adjudicated, only the petitioner/applicant or their 
attorney is notified in writing of the decision. Recently USCIS began 
posting processing times on the Internet for all form types at all 
District Offices, Service Centers, and at the National Benefits Center. 
The dates are moving dates and indicate the receipt date of the work 
currently being adjudicated. You can find more about this on the USCIS 
website at www.uscis.gov.

  Questions for the Record to the Honorable Stewart Verdery from the 
                     Honorable Louise M. Slaughter

    Question: Moving beyond the current debate over the first responder 
grant system, would he agree that we need to create a method to 
identify and provide what cities, counties, and states need in order to 
be prepared to handle a terrorist attack?
    Answer: The Department of Homeland Security firmly believes that it 
is essential to provide states and localities the support they need to 
enhance their security against terrorist attacks, and to provide them 
the resources to identify vulnerabilities and needs. To this end, the 
Department, through ODP, administered the State Homeland Security 
Assessment and Strategy Process (SHSAS). This process allowed states 
and local jurisdictions to update their needs and vulnerabilities 
assessment to reflect post-September 11, 2001, realities, as well as to 
identify progress on the priorities outlined their initial homeland 
security strategies, which were initially conducted in 1999. The SHSAS 
process allows states to make prudent and informed decisions on how 
best to allocate and distribute funds they receive from ODP and DHS to 
enhance their security.
    In addition, ODP is continuing its efforts to develop preparedness 
standards and to establish clear methods for assessing State and local 
preparedness levels and progress. On December 17, 2003, the President 
issued ``Homeland Security Presidential Directive (HSPD)-8.'' Through 
HSPD-8, the President tasked Secretary Ridge, in coordination with 
other Federal departments and State and local jurisdictions, to develop 
national preparedness goals, improve delivery of federal preparedness 
assistance to State and local jurisdictions, and strengthen the 
preparedness capabilities of Federal, State, territorial, tribal, and 
local governments.
    Earlier this year, the Secretary delegated to ODP the lead for the 
implementation of HSPD-8. This designation by the Secretary is 
consistent with ODP's mission, as provided under the provisions of the 
Homeland Security Act, to be the primary federal agency responsible for 
the preparedness of the United States for acts of terrorism. HSPD-8 is 
consistent with the broader goals and objectives established in the 
President's National Strategy for Homeland Security issued in July, 
2002, which discussed the creation of a fully-integrated national 
emergency response capability. Inherent to the successful 
implementation of HSPD-8 is the development of clear and measurable 
standards for State and local preparedness capabilities.
    The standards that will result from HSPD-8 implementation build on 
an existing body of standards and guidelines developed by ODP and other 
Federal agencies to guide and inform State and local preparedness 
efforts. Since its inception ODP has worked with Federal agencies and 
State and local jurisdictions to develop and disseminate information to 
State and local agencies to assist them in making more informed 
preparedness decisions, including capability assessments, preparedness 
planning and strategies, and choices relating to training, equipment, 
and exercises.
    Question: As the Council on Foreign Relations Task Force recently 
stated, ``The absence of a functioning methodology to determine 
national requirements for emergency preparedness constitutes a public 
policy crisis. Establishing national standards that define levels of 
preparedness is a critical first step toward determining the nature and 
extent of additional requirements and the human and financial resources 
needed to fulfill them.'' Does he agree with this assessment?
    Answer: The Secretary firmly supports the need to establish 
national standards and preparedness levels. Through HSPD-8, the 
Department is developing of clear and measurable standards for State 
and local preparedness capabilities. This process will result in the 
development of national preparedness goals, and will improve delivery 
of federal preparedness assistance to State and local jurisdictions. 
The work completed under HSPD-8 will also strengthen the preparedness 
capabilities of Federal, State, territorial, tribal, and local 
governments.
    The standards that will result from HSPD-8 implementation build on 
an existing body of standards and guidelines developed by ODP and other 
Federal agencies to guide and inform State and local preparedness 
efforts. Since its inception ODP has worked with Federal agencies and 
State and local jurisdictions to develop and disseminate information to 
State and local agencies to assist them in making more informed 
preparedness decisions, including capability assessments, preparedness 
planning and strategies, and choices relating to training, equipment, 
and exercises.
    Question: What is DHS doing internally to develop such a criteria?
    Answer: On December 17, 2003, the President issued ``Homeland 
Security Presidential Directive (HSPD)-8.'' Through HSPD-8, the 
President tasked Secretary Ridge, in coordination with other Federal 
departments and State and local jurisdictions, to develop national 
preparedness goals, improve delivery of federal preparedness assistance 
to State and local jurisdictions, and strengthen the preparedness 
capabilities of Federal, State, territorial, tribal, and local 
governments.
    Earlier this year, the Secretary delegated to ODP the lead for the 
implementation of HSPD-8. This designation by the Secretary is 
consistent with ODP's mission, as provided under the provisions of the 
Homeland Security Act, to be the primary federal agency responsible for 
the preparedness of the United States for acts of terrorism. HSPD-8 is 
consistent with the broader goals and objectives established in the 
President's National Strategy for Homeland Security issued in July, 
2002, which discussed the creation of a fully-integrated national 
emergency response capability. Inherent to the successful 
implementation of HSPD-8 is the development of a national preparedness 
goal that will include clear and measurable standards for State and 
local preparedness capabilities.
    The standards that will result from HSPD-8 implementation build on 
an existing body of standards and guidelines developed by ODP and other 
Federal agencies to guide and inform State and local preparedness 
efforts. Since its inception ODP has worked with Federal agencies and 
State and local jurisdictions to develop and disseminate information to 
State and local agencies to assist them in making more informed 
preparedness decisions, including capability assessments, preparedness 
planning and strategies, and choices relating to training, equipment, 
and exercises.
    Question: Would he agree that such a risk criteria be the basis for 
first responder grant allocations?
    Answer: The language in the President's Fiscal Year (FY) 2005 
request for the Department of Homeland Security recognizes that factors 
other than a minimum formula and population should be considered in 
making overall funding allocations. The language further states that 
the Secretary should have the latitude to and discretion to make this 
determination based on a number of factors, including population 
concentrations, critical infrastructure, and other significant 
terrorism risk factors.
    Terrorism and the threat of terrorist acts are not static, as is 
the current formula included in the USA PATRIOT Act. Instead, threats, 
risks, and vulnerabilities are fluid and can change based on a number 
of factors. The Department of Homeland Security should not be 
constrained by a formula and distribution method that does not change 
to meet current and future security needs. As you know, each state has 
submitted an updated homeland security strategy as a requirement of 
receiving and distributing FY 2004 Office for Domestic Preparedness 
grant funds. It is the Department's expectation that these strategies, 
and periodically updated strategies, will provide invaluable 
information to determine appropriate funding levels for all states--
large and small, urban and rural.
    The Administration and Congress share the goal of enhancing the 
nation's ability to deter, prevent, respond to, and recover from acts 
of terrorism. The Administration firmly supports the notion that 
security needs to be improved across the nation. The Administration 
strongly supports a change in the USA PATRIOT Act formula so that we 
can apply more factors than just population to distributing and 
expending limited homeland security resources.

    Questions for the Record for Mr. Paul J. McNulty, United States 
            Attorney from the Honorable Lincoln Diaz-Balart

    Question: Currently, BCIS provides immigration applicants a receipt 
indicating that BCIS is processing their application and the estimated 
time it will take to approve or deny the application. States then issue 
a drivers license for that period of time, even though it usually takes 
more time for BCIS to process the applications because of their large 
application backlog. What happens if the application is denied before 
the expiration of the driver's license? Are DMV offices notified that 
they have someone out there who shouldn't have a driver's license? How 
about when BCIS take more time than they expected, are states updated 
so that these people that deserve a driver's license are not driving 
around with expired licenses.
    Answer: It is my understanding that the Department of Homeland 
Security's Bureau of Citizenship and Immigration Services (``BCIS'') is 
required by law to provide an application receipt, I-797C, when an 
immigrant applicant submits an application to them. The I-797C 
indicates that the BCIS has received an application and that the 
application is being processed. The I-797C also provides an estimated 
time that will be required to process the application. It is also my 
understanding that BCIS does not issue this document for it to be used 
as a form of identification to assist the immigrant applicant in 
obtaining a valid driver's license from the state in which he or she 
lives. As I stated previously, this document simply acknowledges that 
BCIS is in receipt of an immigrant application and that it will be 
processed in the future.
    State law determines whether a valid driver's license will be 
issued based on a presentation of an I-797C. I am told that some 
states, such as Congressman Diaz-Balart's home state of Florida, do in 
fact issue immigrant applicants valid driver's licenses based on the 
presentation of the I-797C. In the Commonwealth of Virginia, the I-797C 
is accepted as a secondary document in support of proof of identity.
    In Virginia, an applicant for a driver's license is required to 
present two forms of identification, a primary document and a secondary 
document to the Department of Motor Vehicles (``DMV'') in order to 
obtain a driver's license. If the applicant meets the additional proof 
of residency requirement, he is issued a valid Virginia license. This 
license is issued for an approximately five-year time period. It is not 
issued to correspond with the estimated time of adjudication of the 
immigrant application. Thus, the adjudication of the immigrant 
application does not have any affect on the validity of the Virginia 
license. If the immigrant application is denied after the license has 
been issued, that individual still has a valid license until it 
expires. It is my understanding that BCIS does not inform the DMV of 
the denial, nor does DMV inquire with BCIS to determine the status of 
the application. No communication exists between the BCIS and the DMV. 
In Virginia, the adjudication of the immigrant application does not 
affect the validity of the individual's license.
    Finally, I want to compliment the Virginia legislature for its new 
legal presence law, which will be effective on January 1,2004. hi my 
judgment, this law is a step in the right direction towards ensuring 
the integrity of the documents produced and issued by the Virginia DMV. 
As I understand it, the legal presence law will require an individual 
applying for a driver's license or identification card for the first 
time to prove that he is either a United States citizen or is legally 
authorized to be in the United States.


 Question for the Record for Mr. John Pistole from Congressman Lincoln 
                              Diaz-Balart

    Currently, BCIS provides immigration applicants a receipt 
indicating that BCIS is processing their application and the estimated 
time it will take to approve or deny the application. States then issue 
a drivers license for that period of time, even though it usually takes 
more time for BCIS to process the applications because of their large 
application backlog. What happens if the application is denied before 
the expiration of the driver's license? Are DMV offices notified that 
they have someone out there who shouldn't have a driver's license? How 
about when BCIS take more time than they expected, are states updated 
so that these people that deserve a driver's license are not driving 
around with expired licenses.
    [No Response was received.]

  Question for the Record for Mr. Ronald D. Malfi from the Honorable 
                          Lincoln Diaz-Balart

    Currently, BCIS provides immigration applicants a receipt 
indicating that BCIS is processing their application and the estimated 
time it will take to approve or deny the application. States then issue 
a drivers license for that period of time, even though it usually takes 
more time for BCIS to process the applications because of their large 
application backlog. What happens if the application is denied before 
the expiration of the driver's license? Are DMV offices notified that 
they have someone out there who shouldn't have a driver's license? How 
about when BCIS take more time than they expected, are states updated 
so that these people that deserve a driver's license are not driving 
around with expired licenses.
    [No Response was received.]

    Question for the Record for Mr. Roscoe C. Howard, Jr. from the 
                       Honorable Christopher Cox

    Currently, BCIS provides immigration applicants a receipt 
indicating that BCIS is processing their application and the estimated 
time it will take to approve or deny the application. States then issue 
a drivers license for that period of time, even though it usually takes 
more time for BCIS to process the applications because of their large 
application backlog. What happens if the application is denied before 
the expiration of the driver's license? Are DMV offices notified that 
they have someone out there who shouldn't have a driver's license? How 
about when BCIS take more time than they expected, are states updated 
so that these people that deserve a driver's license are not driving 
around with expired licenses.
    [No Response was received.]

Questions for the Record for Mr. Keith Kiser from the Honorable Lincoln 
                              Diaz-Balart

    AAMVA submitted Representative Lincoln Diaz-Balart's questions to 
our membership through the Driver's Licensing Yahoo Group. We received 
33 responses back, which are attached. AAMVA has summarized the answers 
to respond to the Committee's questions.
    Question: 1. Does your jurisdiction tie the expiration date of the 
driver's license to immigration documents?
    Answer: Approximately 15 states tie the expiration date of the 
driver's license to the expiration date of immigration documents.
    Question: 2. Will your jurisdiction issue a driver's license for 
individuals possessing a receipt of application from the Bureau of 
Citizenship and Immigration Services (BCIS)?
    Answer: A majority of motor vehicle agencies will not issue a 
driver's license to an individual possessing a receipt of application 
from BCIS. For those motor vehicle agencies that do accept a receipt, 
they usually require the individual to submit other documentation from 
the agency's list of approved documents.
    Question: 3. What happens if the application submitted to BCIS is 
denied before the expiration of the driver's license issued?
    Answer: MVA's usually do nothing if the BCIS application is denied 
before the expiration of the driver's license. A majority will allow 
the driver's license to expire. However, a few of the motor vehicle 
agencies cancel or revoke the driver's license.
    Question: 4. Are you linked in any way to the BCIS with regard to 
the denial or approval of applicants? If yes, please indicate the 
manner in which you receive this information.
    Answer: A majority of motor vehicle agencies are not linked 
electronically to BCIS so they have no way of knowing whether an 
application has been denied or approved. A few of the states are linked 
to BCIS SAVE system (e.g., Florida) but a majority attempt to call 
their local BCIS to obtain information for special situations.


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                                                    Will your
                                               jurisdiction issue a                           Are you linked in
                             Does your         driver's license for   What happens if the    any way to the BCIS
                        jurisdiction tie the       individuals       application submitted   with regard to the
                         expiration date of    possessing a receipt    to BCIS is denied     denial or approval
        States          the driver's license   of application from   before the expiration    of applicants? If
                           to immigration         the Bureau of         of the driver's     yes, please indicate
                             documents?          Citizenship and        license issued?      the manner in which
                                               Immigration Services                           you receive this
                                                     (BCIS)?                                    information.
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Alabama
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Alaska                 Alaska does not tie    NO                     N/A                    NO, but if any
                        the expiration of                                                    document is
                        immigrant docs to                                                    questionable we
                        the DL                                                               call and verify
                                                                                             validity.
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Arizona                YES.                   YES. EXPIRATION DATE   LICENSE WILL NOT BE    NO.
                                               IS TIED TO THE         EXTENDED.
                                               RECEIPT.
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Arkansas               No.                    No.                    N/A.                   No
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California
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Colorado               YES                    NOT JUST WITH THE      THE LICENSE WOULD      NOT YET
                                               RECEIPT                REMAIN VALID UNTIL
                                                                      THE EXPIRATION DATE
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Connecticut            No. Legislation was    We require a receipt   The license is valid   We run a check
                        proposed during our    or Notice of Action    until expiration.      through NLETS to
                        last session to do     for adjustment of                             the BCIS Law
                        so. It passed the      status to legal                               Enforcement Support
                        Senate by a very       permanent resident                            Center using
                        narrow margin and      from applicants who                           information from
                        never came to a vote   hold a Bi or B2 visa                          the identity
                        in the House.          because we do not                             documents presented
                                               issue a license or                            and wait for a
                                               ID card to visitors                           response.
                                               or illegal aliens.
                                               If the applicant has
                                               a valid passport and
                                               an employment
                                               authorization card,
                                               we will issue as
                                               long as they provide
                                               the receipt
                                               indicating they have
                                               applied for the
                                               adjustment of
                                               status.
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Delaware               No                     No, Delaware does not  No                     No
                                               accept applications
                                               as proof of being
                                               legally in this
                                               Country.
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District of Columbia
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Florida                Yes. In most cases.    Yes.                   First, they will have  We are connected to
                        If there is an                                been issued a          the SAVE system
                        expiration date on                            license as a non-      both for individual
                        the document                                  immigrant. Hence       queries and for
                        presented for non-                            they can only have     batch verification.
                        immigrants, such as                           it for 2 years. They   When the response
                        an Employment                                 have to produce        to a secondary
                        Authorization Card,                           evidence of lawful     verification comes
                        1-20, etc., then                              presence every time    back unverified,
                        license expiration                            they need a service    then our procedures
                        will coincide with                            and this will lay      will prevent the
                        that date. When                               them open to being     continuance of the
                        documents are under                           rejected. Where we     license. There are
                        process and hence no                          are not notified at    possibilities that
                        expiry date is                                all, the 2-year        some will get
                        available but the                             duration will be the   through the cracks
                        customer is in the                            determinant,           and have validity
                        country lawfully,                                                    for 2 years.
                        all non-immigrants
                        will be issued a
                        license for not more
                        than 2 years. All
                        Permanent Residents
                        (with a green card
                        or an ADIT stamp on
                        their passport/I-94)
                        will be issued a
                        normal duration
                        license/ID card. The
                        only expiration date
                        not considered by us
                        is the date on the 1-
                        551/151, the
                        Resident Alien Card
                        or the ADIT stamp on
                        the passport/I-94.
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Georgia
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Guam
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Hawaii                 No.                    No.                    Not applicable.        DMV calls the duty
                                                                                             officer for
                                                                                             verification
                                                                                             whenever they
                                                                                             suspect the
                                                                                             applicant possesses
                                                                                             illegal documents.
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Idaho                  Idaho no.              Idaho no.              Idaho N/A              Idaho no.
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Illinois               No                     No. We will, however,  N/A                    No
                                               accept
                                               identification from
                                               the Department of
                                               Justice indicating
                                               the applicant's
                                               refugee status (this
                                               document often has a
                                               photo and a metal
                                               grommet affixed to
                                               the document). We
                                               will accept this
                                               document for proof
                                               of date of birth in
                                               these cases.
                                               Regardless, the
                                               applicant must still
                                               provide a SSN card
                                               and a proof of
                                               residency document.
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Indiana                No                     Yes, but only with     Licensed revoked.      No direct electronic
                                               INS verification                              link . However, we
                                               that legal status is                          can call if we need
                                               pending.                                      to.
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Iowa                   Yes                    Yes, providing the     We limit the renewal   No. However, we have
                                               petition to adjust     to a term of 120       used the federal
                                               or amend status was    days (Iowa statute     immigration court
                                               made before the        caps it at two         system number and
                                               original status        years). If the         have checked via
                                               expired.               petition is denied,    the A# for those
                                                                      we could cancel the    persons who are
                                                                      license or ID if the   scheduled to appear
                                                                      denial became know     before an
                                                                      to us. However, we     immigration judge.
                                                                      do not track them.     That number is 1-
                                                                      Since a ruling on a    800-898-7180. We
                                                                      petition often takes   have also verified
                                                                      a long time, we are    petitions and
                                                                      under pressure from    Notices of Action
                                                                      advocates of           with the LIN
                                                                      immigrants to issue    receipt number via
                                                                      for the period of      the 1-800-375-5283
                                                                      time the ruling is     number. Our
                                                                      pending. We seem to    agency's motor
                                                                      get mixed responses    vehicle
                                                                      when we consult with   investigators have
                                                                      federal immigration    local contacts with
                                                                      officials, Those in    BCIS, who are
                                                                      the investigation/     helpful also.
                                                                      enforcement side of
                                                                      things, say a person
                                                                      has no benefits when
                                                                      a petition is
                                                                      pending and if the
                                                                      original status is
                                                                      expired, we should
                                                                      not issue.
                                                                      Immigration
                                                                      officials on the
                                                                      benefits side of
                                                                      things, seem to
                                                                      suggest that since
                                                                      they are allowed to
                                                                      stay in the country
                                                                      unti the petition is
                                                                      ruled on, we should
                                                                      issue. We really
                                                                      have no clear
                                                                      direction.
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Kansas                 No, except on non-     No                     N/A                    The only link we
                        resident CDL's (by                                                   have is direct
                        Kansas statute).                                                     contact with agents
                                                                                             in the Kansas City
                                                                                             and Wichita
                                                                                             offices. We use
                                                                                             these contacts for
                                                                                             special situations
                                                                                             regarding
                                                                                             legitimacy of
                                                                                             documents that are
                                                                                             in applicant's
                                                                                             possession.
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Kentucky               Yes                    No. We will allow a    The current license    No
                                               one year license for   remains valid until
                                               individuals applying   the end of the one
                                               to extend or change    year period. At that
                                               their status           point the individual
                                               provided they have     is not allowed to
                                               an official notice     renew.
                                               of action from BCIS.
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Louisiana              Louisiana is           Louisiana uses AAMVA                          No connectivity to
                        currently working on   list of                                       the BCIS.
                        a Next Generation      identification
                        Motor Vehicle system   documents. The
                        that will address      applicant is
                        many issues.           required to submit
                        Currently, Louisiana   proof of legal
                        does require proof     presence, not just
                        of legal presence in   application for
                        order to issue a       legal presence.
                        license or ID card.
                        However, the current
                        computer system
                        still issues a 4
                        year license. This
                        will not be the case
                        with the NGMV
                        system. The
                        expiration date of
                        the license
                        credential will be
                        tied in with the
                        immigration
                        documents. At this
                        point, it is not.
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Maine                  No                     As secondary           See #2                 See #2
                                               documentation only.
                                               Additional INS
                                               documents, or
                                               passport/visa and 1-
                                               94 required.
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Maryland               No                     Yes, it would have no  Nothing                No
                                               bearing on their
                                               application. They
                                               would be required to
                                               be an Maryland
                                               resident, show
                                               proper
                                               identification and
                                               meet all other
                                               application
                                               requirements such as
                                               passing any required
                                               tests and paying
                                               fees.
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Massachusetts
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Michigan
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Minnesota              Yes, if the applicant  Yes, if they are able  If the applicant       Minnesota has a
                        presents temporary     to also submit         submits a receipt      contact that we
                        legal presence         documentation for      with no Duration of    call to find out
                        documents, the date    our list of approved   Status or expiration   approval or denial
                        the documents expire   Primary and            date on it, the        of applicants. That
                        is shown as a          Secondary Documents,   Status Check on the    information is then
                        ``status check         or they submit a       driver's license or    noted as a memo on
                        date'' on the          variance request and   Identification card    the application.
                        driver's license or    through that request   would expire in 6
                        identification card.   can provide adequate   months and the
                                               information to prove   cardholder's
                                               their identity and     privileges would be
                                               legal residency.       cancelled. To
                                                                      prevent
                                                                      cancellation, the
                                                                      cardholder would
                                                                      need to present
                                                                      updated information
                                                                      to prove that BCIS
                                                                      had approved the
                                                                      application by
                                                                      submitting the
                                                                      document itself for
                                                                      review.
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Mississippi
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Missouri               No, not at this time.  No, Missouri does not  N/A                    Not in our field
                                               accept a receipt of                           offices. Our
                                               application as                                central office has
                                               acceptable proof of                           a system in place
                                               identity.                                     for exception
                                                                                             processing.
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Montana
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Nebraska               No.                    No,                    N/A.                   No.
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Nevada                 Effective January 1,   We do not issue a      Not applicable         No
                        2004, we will tie      license until the
                        the expiration dates   BCIS has approved
                        of the immigration     the application
                        documents to both
                        driver's licenses
                        and identification
                        cards.
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New Hampshire
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New Jersey
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New Mexico
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New York               No. New York State     No. We require         N/A                    We will shortly be
                        has implemented a      original valid INS                            commencing a pilot
                        temporary visitor      documents that have                           of the SAVE program
                        program which places   been issued for at                            to verify INS
                        in bold letters a      least a one-year                              documents on line
                        legend on the face     stay with at least                            with the BCIS.
                        of the document        six months of legal
                        indicating that the    status remaining.
                        individuals legal
                        status is temporary
                        and also places the
                        expiration date of
                        their legal status
                        in the United States
                        on the document.
                        Additionally, any
                        further transaction
                        processing is
                        prohibited once the
                        legal status has
                        expired.
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North Carolina         Not at this time. We   North Carolina does    Not applicable, given  No. Occasionally we
                        would consider it if   not require proof of   that we don't          may call them to
                        there was an easy      legal presence for     require proof of       verify documents
                        (i.e. online)          issuance of a DL or    legal presence.        presented to us,
                        process for            ID card. Any                                  but it can be
                        verifying              document issued by                            extremely difficult
                        information. But       BCIS could be used                            to get through to
                        given the complexity   as a form o                                   them (they have the
                        of immigration         identification to                             same understaffing
                        documentation, we      meet the state's                              problem most DMVs
                        hesitate to attempt    requirements.                                 have).
                        that at this time.
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North Dakota           No                     No                     Not Applicable         No
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Ohio                   YES                    YES                    CANCEL THE LICENSE     NO
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Oklahoma               YES                    THERE ARE TWO TYPES    IT IS OUR              OUR ONLY LINK WITH
                                               OF RECEIPTS WE ARE     UNDERSTANDING THAT     BCIS IS THROUGH A
                                               AWARE OF: ONE SIMPLY   SINCE WE ONLY ISSUE    VERY GOOD DIALOGUE
                                               SHOWING PAYMENT        LICENSES BASED ON      WITH BCIS OFFICIALS
                                               RECEIVED AND ANOTHER   THE RECEIPT WITH 1-    IN THIS STATE. AS
                                               HAS A EMPORARY 1-94    94 THAT THE DENIAL     YOU KNOW WE DO NOT
                                               ON IT. WE DO NOT       OF THE INDIVIDUAL      HAVE ANY ELECTRONIC
                                               ACCEPT THE RECEIPT     WOULD BE EXTREMELY     INTERFACE WITH BCIS
                                               SHOWING                UNLIKELY AS THE BCIS   AT THIS TIME TO
                                               ACKNOWLEDGMENT OF      SCREENING PROCESS      IMMEDIATELY CHECK
                                               APPLICATION AND        HAS ALREADY BEEN       STATUS NOR RECEIVE
                                               FEES. WE DO ACCEPT,    COMPLETED.             CHANGES IN STATUS.
                                               HOWEVER, THE RECEIPT
                                               THAT CONTAINS THE 1-
                                               94. WERE TOLD THAT
                                               THE ONLY CASES WHERE
                                               THE 1-94 RECEIPTS
                                               ARE ISSUED IS WHEN
                                               THE BACKGROUND CHECK
                                               HAS BEEN COMPLETED
                                               AND THE OFFICIAL
                                               PERMANENT DOCUMENT
                                               IS ALL BUT ISSUED.
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Oregon                 No                     Yes, it would have no  Nothing                No
                                               bearing on their
                                               application. They
                                               would be required to
                                               be an Oregon
                                               resident, show
                                               proper
                                               identification and
                                               meet all other
                                               application
                                               requirements such as
                                               passing any required
                                               tests and paying
                                               fees.
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Pennsylvania
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Puerto Rico
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Rhode Island
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South Carolina
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South Dakota           Yes.                   No                     N/A                    We do some verbal/
                                                                                             phone verification
                                                                                             of documents. We
                                                                                             also access NLETS
                                                                                             to verify INS
                                                                                             documents.
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Tennessee
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Texas                  No                     Our rule requires      If the applicant is    No
                                               that the applicant     issued a DL/ID based
                                               have valid BCIS        on that document in
                                               documentation, If      conjunction with
                                               this application       other acceptable
                                               extends the validity   documentation, the
                                               period of those        applicant would be
                                               documents, it would    allowed to keep the
                                               be acceptable.         DLIID.
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Utah                   No                     Yes, if they have      N/A                    No
                                               other acceptable ID
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Vermont                No                     No                     N/A                    No, the exception is
                                                                                             some phone contact
                                                                                             to vertify
                                                                                             documents.
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Virgin Islands
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Virginia               Virginia will          No                     N/A                    Not in customer
                        effective 1/1/04,                                                    service centers. We
                        the following                                                        are considering
                        responses apply                                                      having SAVE acess
                        after 1/1/04                                                         for only a very few
                                                                                             persons, just to
                                                                                             assist in
                                                                                             exceptional
                                                                                             situations.
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Washington
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West Virginia          Yes, effective July    Not currently          N/A                    No
                        1, 2003
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Wisconsin              No                     Person must show one   Document remains       No.
                                               document that          valid for period of
                                               verifies name and      issuance.
                                               date of birth
                                               (passport, U.S. or
                                               foreign birth
                                               certificate, 1-151
                                               or 1551, 1-181, 1-94
                                               Refugee/Parolee,
                                               etc.) and proof of
                                               ID which is a
                                               document with either
                                               a photo or
                                               signature.
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Wyoming
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