[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
     PROBLEMS IN THE CURRENT EMPLOYMENT VERIFICATION AND WORKSITE 
                           ENFORCEMENT SYSTEM

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


                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON IMMIGRATION,
                CITIZENSHIP, REFUGEES, BORDER SECURITY,
                         AND INTERNATIONAL LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 24, 2007

                               __________

                           Serial No. 110-17

                               __________

         Printed for the use of the Committee on the Judiciary


      Available via the World Wide Web: http://judiciary.house.gov




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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. SCOTT, Virginia            HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
MAXINE WATERS, California            DANIEL E. LUNGREN, California
MARTIN T. MEEHAN, Massachusetts      CHRIS CANNON, Utah
WILLIAM D. DELAHUNT, Massachusetts   RIC KELLER, Florida
ROBERT WEXLER, Florida               DARRELL ISSA, California
LINDA T. SANCHEZ, California         MIKE PENCE, Indiana
STEVE COHEN, Tennessee               J. RANDY FORBES, Virginia
HANK JOHNSON, Georgia                STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
BRAD SHERMAN, California             TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin             LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York          JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota

            Perry Apelbaum, Staff Director and Chief Counsel
                 Joseph Gibson, Minority Chief Counsel
                                 ------                                

          Subcommittee on Immigration, Citizenship, Refugees, 
                 Border Security, and International Law

                  ZOE LOFGREN, California, Chairwoman

LUIS V. GUTIERREZ, Illinois          STEVE KING, Iowa
HOWARD L. BERMAN, California         ELTON GALLEGLY, California
SHEILA JACKSON LEE, Texas            BOB GOODLATTE, Virginia
MAXINE WATERS, California            DANIEL E. LUNGREN, California
MARTIN T. MEEHAN, Massachusetts      J. RANDY FORBES, Virginia
WILLIAM D. DELAHUNT, Massachusetts   LOUIE GOHMERT, Texas
LINDA T. SANCHEZ, California
ARTUR DAVIS, Alabama
KEITH ELLISON, Minnesota

                    Ur Mendoza Jaddou, Chief Counsel

                    George Fishman, Minority Counsel



                            C O N T E N T S

                              ----------                              

                             APRIL 24, 2007

                           OPENING STATEMENT

                                                                   Page
The Honorable Zoe Lofgren, a Representative in Congress from the 
  State of California, and Chairwoman, Subcommittee on 
  Immigration, Citizenship, Refugees, Border Security, and 
  International Law..............................................     1
The Honorable Steve King, a Representative in Congress from the 
  State of Iowa, and Ranking Member, Subcommittee on Immigration, 
  Citizenship, Refugees, Border Security, and International Law..     3

                               WITNESSES

Mr. Jonathan R. Scharfen, Deputy Director, United States 
  Citizenship and Immigration Services, Department of Homeland 
  Security
  Oral Testimony.................................................     6
  Prepared Statement.............................................     8
Mr. John Shandley, Senior Vice President Human Resources, Swift & 
  Company
  Oral Testimony.................................................    35
  Prepared Statement.............................................    38
Mr. Stephen W. Yale-Loehr, Miller Mayer, LLP, Adjunct Professor, 
  Cornell Law School
  Oral Testimony.................................................    42
  Prepared Statement.............................................    44
Mr. Marc Rosenblum, Ph.D., Department of Political Science, 
  University of New Orleans
  Oral Testimony.................................................    57
  Prepared Statement.............................................    60

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Zoe Lofgren, a Representative 
  in Congress from the State of California, and Chairwoman, 
  Subcommittee on Immigration, Citizenship, Refugees, Border 
  Security, and International Law................................     2
Prepared Statement of the Honorable Sheila Jackson Lee, a 
  Representative in Congress from the State of Texas, and Member, 
  Subcommittee on Immigration, Citizenship, Refugees, Border 
  Security, and International Law................................     4
Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, and 
  Chairman, Committee on the Judiciary...........................    85

                                APPENDIX
               Material Submitted for the Hearing Record

Letter from Jonathan R. Scharfen, Deputy Director, United States 
  Citizenship and Immigration Services, Department of Homeland 
  Security to the Honorable John Conyers, Jr., Chairman, 
  Committee on the Judiciary.....................................    92
INS Basic Pilot Evaluation Summary Report submitted to the U.S. 
  Department of Justice, Immigration and Naturalization Service, 
  prepared by the Institute for Survey Research, Temple 
  University, and Westat on January 29, 2002.....................    93
Interim Findings of the Web-Based Basic Pilot Evaluation 
  submitted to the U.S. Department of Homeland Security, prepared 
  by Westat in December 2006, and accompanying letter from 
  Jonathan R. Scharfen, Deputy Director, United States 
  Citizenship and Immigration Services, Department of Homeland 
  Security to the Honorable Zoe Lofgren, Chairwoman, Subcommittee 
  on Immigration, Citizenship, Refugees, Border Security, and 
  International Law..............................................   145
``Alternative strategies for preventing false negatives and 
  identity theft problems iin an electronic eligibility 
  verification system'' by Marc Rosenblum, Ph.D., Department of 
  Political Science, University of New Orleans...................   265


     PROBLEMS IN THE CURRENT EMPLOYMENT VERIFICATION AND WORKSITE 
                           ENFORCEMENT SYSTEM

                              ----------                              


                        TUESDAY, APRIL 24, 2007

                  House of Representatives,
Subcommittee on Immigration, Citizenship, Refugees, 
             Border Security, and International Law
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 11:04 a.m., in 
Room 2226, Rayburn House Office Building, the Honorable Zoe 
Lofgren (Chairwoman of the Subcommittee) presiding.
    Present: Representatives Lofgren, Berman, Jackson Lee, 
Delahunt, Sanchez, Conyers, King, Gallegly, and Gohmert.
    Staff present: Ur Mendoza Jaddou, Chief Counsel; J. Traci 
Hong, Majority Counsel; Benjamin Staub, Professional Staff 
Member; and George Fishman, Minority Counsel.
    Ms. Lofgren. This hearing of the Subcommittee on 
Immigration, Citizenship, Refugees, Border Security, and 
International Law will come to order.
    I would like to welcome the Immigration Subcommittee 
Members, our witnesses, and members of the public who are here 
today at the Subcommittee's fourth hearing on comprehensive 
immigration reform issues.
    At our first hearing at Ellis Island in the shadows of the 
Statue of Liberty and in the Great Hall where 12 million 
immigrants were processed in a controlled, orderly and fair 
manner, we heard from witnesses who explained why our Nation 
needs comprehensive immigration reform.
    Our border patrol chief, David Aguilar, said we need 
comprehensive immigration reform to secure our borders. 
Demographer Dowell Myers said comprehensive immigration reform 
is critical to prepare for the declining birthrates and aging 
population. Economist Dan Siciliano explained that immigration 
is good for the economy, good for jobs, and a critical part of 
our Nation's prosperity. Historian Daniel Tichenor told us that 
each new wave of immigrants has been scorned by critics only 
later to be among our most accomplished and loyal citizens.
    At our second and third hearings last week, we learned 
about the shortfalls of the 1986 and 1996 immigration 
legislation to ensure that we do not repeat the mistakes made 
in those last two reforms of immigration law.
    One theme that arose in both hearings is the inability of 
the current paper and electronic systems to accurately verify 
the immigration status and employment eligibility of workers in 
the United States.
    Since one of the main reasons for undocumented immigration 
is the lure of jobs in the United States, it is imperative that 
comprehensive immigration reform include an employment 
verification system that prevents employment of unauthorized 
immigrants.
    We will learn today that the employment verification 
systems created in 1986 and 1996 fail to meet that goal.
    In our second hearing on unemployment verification, 
currently scheduled on Thursday, we will look for some of the 
potential solutions that will help end illegal immigration.
    Employment verification is the one component of 
comprehensive immigration reform that will affect all workers 
in the United States, including U.S. citizens, lawful permanent 
residents, and others legally authorized to work in the United 
States.
    Thus it is imperative that Congress ensure that any 
employment eligibility verification system enacted as part of 
comprehensive immigration reform is designed and implemented 
properly.
    I look forward to hearing from our witnesses today, who 
will each provide an explanation of the problems of our current 
employment verification system, each from their own 
perspective, including the perspective of employers who 
attempted to follow the law but still got caught up in an 
enforcement action by Immigration Customs and Enforcement.
    With these problems identified, we can move to our next 
hearing to exam proposed solutions for an employment 
verification system in comprehensive immigration reform.
    [The prepared statement of Ms. Lofgren follows:]
 Prepared Statement of the Honorable Zoe Lofgren, a Representative in 
Congress from the State of California, and Chairwoman, Subcommittee on 
Immigration, Citizenship, Refugees, Border Security, and International 
                                  Law
    I would like to welcome the Immigration Subcommittee Members, our 
witnesses, and members of the public that are here today for the 
Subcommittee's fourth hearing on comprehensive immigration reform.
    In our first hearing at Ellis Island, in the shadow of the Statue 
of Liberty and in the Great Hall where 12 million immigrants were 
processed in a controlled, orderly, and fair manner, we heard from 
witnesses who explained why our nation needs comprehensive immigration 
reform.

      Our Border Patrol Chief, David Aguilar, said we need 
comprehensive immigration reform to secure our borders.

      Demographer Dowell Myers said comprehensive immigration 
reform is critical to prepare for a declining birth rate and aging 
population.

      Economist Dan Siciliano explained that immigration is 
good for the economy, good for jobs, and a critical part of our 
nation's prosperity.

      Historian Daniel Tichenor told us that each new wave of 
immigrants has been scorned by critics only later to be among our most 
accomplished and loyal citizens.

    In our second and third hearings last week, we learned about the 
shortfalls of 1986 and 1996 immigration legislation to ensure that we 
do not repeat the mistakes made in those last two reforms of 
immigration law. One theme that arose in both hearings was the 
inability of the current paper and electronic systems to accurately 
verify the immigration status and employment eligibility of workers in 
the U.S.
    Since one of the main reasons for undocumented immigration is the 
lure of jobs in the U.S., it is imperative that comprehensive 
immigration reform include an employment verification system that 
prevents employment of unauthorized immigrants. We will learn today 
that the employment verification systems created in 1986 and 1996 fail 
to meet that goal. In our second hearing on employment verification on 
Thursday, we will explore some of the potential solutions that will 
help end illegal immigration.
    Employment verification is the one component of comprehensive 
immigration reform that will affect all workers in the U.S., including 
U.S. citizens, lawful permanent residents, and others legally 
authorized to work in the U.S. Thus, it is imperative that Congress 
ensure that any employment eligibility verification system enacted as a 
part of comprehensive immigration reform is designed and implemented 
properly.
    I look forward to hearing from our witnesses today who will each 
provide an explanation of the problems of our current employment 
verification system, each from their own perspective, including the 
perspective of an employer who attempted to follow the law but still 
got caught up in an enforcement action by Immigration Customs and 
Enforcement.
    With these problems identified, we can then move to our next 
hearing to examine proposed solutions for an employment verification 
system in comprehensive immigration reform.

    Ms. Lofgren. I would now recognize our distinguished 
Ranking minority Member, Mr. Steve King, for his opening 
statement.
    Mr. King. Thank you, Madam Chair, and thank you for holding 
this hearing.
    In the Immigration Reform and Control Act, known as IRCA, 
in 1986, Congress tried to end the job magnet that drew illegal 
aliens to the United States by making it unlawful to knowingly 
hire illegal aliens and by requiring employers to check the 
documents of new employees.
    In the mid-1990's, failure of the Federal Government to 
enforce employer sanctions that were set out in IRCA and the 
failure of the Employment Eligibility Verification provisions 
in IRCA to help curb the illegal employment of aliens--all 
those failures led to calls for a better way to ensure that 
employers hire only citizens and aliens eligible to work in the 
United States.
    In 1996, the Illegal Immigration Reform and Immigration 
Responsibility Act answered those calls by establishing the 
Basic Pilot Employment Eligibility and Verification Program. 
That Basic Pilot program allows employers to check workers' 
Social Security and Alien Identification Numbers against Social 
Security Administration and DHS workers in order to ensure that 
new hires are genuinely eligible to work.
    The program is voluntary for employers in all 50 States and 
is now used by over 15,500 employers, one of whom will be 
before us today.
    When using the Basic Pilot program, an employer has 3 days 
from the time they hire an employee to contact the Federal 
Government by Internet to determine the validity of the 
employee's Social Security Number or Alien Identification 
Number. The numbers are checked against Social Security 
Administration's database and DHS database.
    Within 3 days, the employer will receive a confirmation 
that the employee is eligible to work or a tentative non-
confirmation indicating that the work eligibility of the 
employee cannot be validated.
    Once a tentative non-confirmation is received, the employee 
can request secondary verification and contact DHS or SSA to 
determine how government records differ from the information 
submitted by the employee.
    DHS has another 10 days in which to further investigate the 
discrepancy, after which the employer will receive a 
confirmation or a denial of work eligibility number. If the 
employer receives a final non-confirmation, they can then fire 
the employee.
    The Basic Pilot program has been remarkably successful. A 
study found that an overwhelming majority of employers 
participating found the Basic Pilot program to be an effective 
and reliable tool for employment verification. In fact, 
according to a recent National Federation of Independent 
Business survey of its members, 76 percent said use of a phone 
or Internet employment verification system would be a minimal 
burden or not a burden at all.
    Last Congress, this House passed legislation that would 
have made it mandatory. The Basic Pilot is not perfect. In 
fact, a recent high-profile case highlights that a business's 
use of Basic Pilot does not ensure that it is not hiring 
illegal immigrants because the program is vulnerable to 
identity theft.
    Swift & Company, whose representative, Mr. Shandley, will 
be testifying at this hearing, has participated in the Basic 
Pilot program since 1997. However, last December exactly 1,282 
of its employees were arrested by the Immigration and Customs 
Enforcement during a worksite enforcement action. ICE suspected 
a pattern of identity theft and conducted the enforcement 
action. Many of the Social Security numbers submitted by Swift 
employees were genuine but had been stolen or purchased and 
were being used illegally.
    So, there is no doubt that Basic Pilot needs some tools to 
deal with identity theft. DHS needs to have access to Social 
Security Administration data so that it can investigate 
situations in which a single Social Security number was 
submitted more than once for the same employer but where a 
number was submitted by multiple employers in a manner that 
suggested fraud.
    The vast majority of American businesses want to hire legal 
workers. And most would like a quick and easy system to verify 
employee work eligibility. The Basic Pilot program holds out 
the promise that it can meet these goals.
    I look forward to the testimony and hope we can minimize 
the burden and still provide for a more effective Basic Pilot 
program.
    Madam Chair, I thank you, and I yield back the balance of 
my time.
    Ms. Lofgren. Thank you.
    Mr. King, Mr. Conyers will join us later and will be able 
to give us his opening statement at that time. I don't know if 
Mr. Smith is expected, but we would extend the same courtesy to 
him.
    We have two panels today. The first panel is by himself.
    And I would ask that other Members submit their statement 
for the record so that I can introduce Deputy Director of U.S. 
Citizenship and Immigration Services Jonathon Scharfen.
    [The prepared statement of Ms. Jackson Lee follows:]
       Prepared Statement of the Honorable Sheila Jackson Lee, a 
    Representative in Congress from the State of Texas, and Member, 
 Subcommittee on Immigration, Citizenship, Refugees, Border Security, 
                         and International Law
    Today marks the third hearing in a series of hearings dealing with 
comprehensive immigration reform. This subcommittee previously dealt 
with the shortfalls of the 1986 and 1996 immigration reforms, and a 
consistent theme throughout both hearings was the difficulty that 
employers encountered when they attempted to verify that potential 
foreign employees have work authorization. Making a mistake could 
subject an employer to fines or more serious sanctions for employing a 
foreign worker who does not have work authorization. Some employers 
avoid that risk by simply refusing to hire foreign-looking employees. 
Therefore, as Members of the 110th Congress we must ensure that we find 
practical solutions to fixing the employment eligibility verification 
system.
                                history
    In 1986 Congress passed the Immigration Reform and Control Act of 
1986 (IRCA). Congress' intent was to create a system that could verify 
the employment eligibility of potential foreign workers, and impose 
sanctions on employers from knowingly hire workers who do not have 
employment authorization. that were not authorized. IRCA established 
the I-9 Form employment eligibility verification system. Under this 
system a potential foreign employee has to present valid documentation 
to establish his identity and his authorization to work in the United 
States, such as a U.S. passport, permanent resident card, driver's 
license, or Social Security card.
    However, with any system relying on documents the potential for 
fraud was great, and this became evident in the years after the 
legislation was enacted. The prevalence of fraudulent documents, either 
counterfeit or real but used fraudulently, makes it difficult for 
employers to determine who has legal authorization to work in the 
United States. Also, employers have to be mindful against 
discrimination during the verification process. In addition, the 
executive branch has not made a sustained, determined effort to enforce 
employer sanctions.
                          basic pilot program
    In reaction to an ongoing problem with the employment of 
undocumented workers that was only exasperated by the shortcomings of 
IRCA, Congress created the Basic Pilot Program (BPP). The BPP involves 
verification checks of the Social Security Administration (SSA) and 
Department of Homeland Security (DHS) databases, using an automated 
system to verify the employment authorization of all newly hired 
employees. Participation in this program has been voluntary, and free 
to participating employers. The intent of the BPP was to remove the 
guesswork from document review during the I-9 process; allow 
participating employers to confirm employment eligibility of all newly 
hired employees; improve the accuracy of wage and tax reporting; 
protect jobs for authorized United States workers. The program has been 
available to all employers in the States of California, Florida, 
Illinois, New York, and Texas since November 1997 and to employers in 
Nebraska since March 1999. The program originally expired in November 
2001, but was extended to November 2008 thru the Basic Pilot Program 
Extension and Expansion Act of 2003.
    The Pilot Program has had numerous problems ranging from inaccurate 
and outdated information in the DHS and SSA databases, misuse of the 
program by employers, and a lack of adequate privacy protections. In 
2002, the Government Accountability Office (GAO) issued a report 
stating, ``existing weaknesses in the program, such as the inability of 
the program to detect identity fraud, delays in entering data into DHS 
databases, and some employer noncompliance with pilot program 
requirements, could become
    more significant and additional resources could be needed if 
employer participation in the program greatly increased or was made 
mandatory.''
    Therefore, as we move forward in this immigration debate, we need 
to adhere to practicality. We can not allow emotion, and our ambition 
to cater to all of the interested parties to cloud our view. 
Comprehensive immigration reform must include a viable employer 
sanctions system in addition to creating an opportunity for 
undocumented workers to earn legal status, and securing our borders. In 
the end, this debate is really about the American worker and the 
American family, and what we are doing to protect them, because when we 
protect the American worker from wage and workplace exploitation we 
protect everyone in pursuit of the American dream.

    Ms. Lofgren. Prior to assuming his post at USCIS, Mr. 
Scharfen served for 25 years in the U.S. Marine Corps, retiring 
in 2003 at the rank of colonel. Mr. Scharfen is no stranger to 
the House of Representatives, however, where he served as both 
Chief Counsel and Deputy Staff Director for the House 
International Relations Committee following his military 
service.
    Mr. Scharfen received his bachelor's degree from the 
University of Virginia, his JD from the University of Notre 
Dame, and his LLM from the University of San Diego.
    Mr. Scharfen, your written statement will be made part of 
the record in its entirety, so I would ask that you now 
summarize your testimony in 5 minutes or less.
    And to help you stay within the time, there is a timing 
light at your table. When 1 minute remains, the light will 
switch from green to yellow, and then to red when the 5 minutes 
are up.
    And I would let all the Members who are present know that 
our mikes are live at all times.
    Mr. Scharfen, if you would begin.

  TESTIMONY OF JONATHAN R. SCHARFEN, DEPUTY DIRECTOR, UNITED 
  STATES CITIZENSHIP AND IMMIGRATION SERVICES, DEPARTMENT OF 
                       HOMELAND SECURITY

    Mr. Scharfen. Thank you very much, ma'am. I am grateful for 
this opportunity to appear before the Subcommittee to discuss 
the Employment Eligibility Verification program administered by 
United States Citizenship and Immigration Services, USCIS.
    Previously known as the Basic Pilot program, this unique 
program provides employment eligibility information on newly 
hired employees to more than 16,000 participating American 
employers.
    Any company anywhere in America can try the Employment 
Eligibility Verification System, EEVS, and use it for free over 
an easy-to-use government web site. EEVS is a valuable tool 
that helps employers comply with immigration law while also 
strengthening worksite enforcement.
    This year, the program is growing by over 1,000 employers 
every month. We project that the EEVS system will verify over 3 
million new hires this fiscal year at more than 71,000 
worksites.
    Chairwoman Lofgren, California has 2,104 participating 
employers in this program, representing over 12,000 sites.
    In the state of Iowa, Ranking Member King, there are 148 
participating employers, representing 659 sites.
    For fiscal year 2007, USCIS received $114 million from 
Congress for the expansion and improvement of EEVS to better 
support an increasing amount of employers. Appropriations have 
been used to test the photo screening tool, incorporate 
additional data sources to deter fraud and cases of identity 
theft and streamline the employer enrollment process by making 
it completely electronic.
    USCIS is improving the program in many other ways, 
including updating training materials, creating more user-
friendly web pages, providing better customer support and 
exploring additional query access methods that could be used by 
employers that do not have Web access. We are also continuing 
to conduct independent evaluations to provide additional input 
for improving the program.
    An accurate and secure Employment Eligibility Verification 
program is a critical component of efforts to improve worksite 
enforcement. Better worksite enforcement is a key component of 
any proposal to create a Temporary Worker Program. The success 
of the TWP will be essential to reducing the pressure on our 
border.
    A secure border will allow us to free up much needed 
resources, enforce our laws and protect our homeland against 
foreign threat. It is all connected. Each link in this chain is 
critical to its overall integrity and our Nation's homeland 
security.
    The ultimate success of a future electronic eligibility 
verification program will rely on public-private cooperation 
and active employer participation in government partnerships to 
secure our workforce. Our work is critically important to the 
future of our Nation and directly impacts national security, 
our economy and individual lives. We all share in the 
responsibility to make our Nation greater.
    I look forward to working with you to advance our mutual 
interests and assist those who come here seeking freedom, 
prosperity and hope for a better future.
    Thank you, and I look forward to answering your questions.
    But at this time, Chairwoman, I would like to ask 
permission to have Ms. Gerri Ratliff, who is the Director of 
our Verification Division, join me at the table here, so she 
can do a quick demonstration on the EEVS system.
    Ms. Lofgren. Without objection.
    Ms. Ratliff. Good morning.
    This is the employer's homepage for the Basic Pilot. When 
an employer is ready to perform a query on a new hire, they go 
to this screen and input information from the Form I-9. So you 
can see it is basic information, very simple: name, date of 
birth, SSN, citizenship status.
    You can see here in the middle of the screen, where it says 
``employment authorized"--or you may not be able to see. In the 
middle of the screen, it says ``employment authorized,'' and 
this happens 92 percent of the time for queries. The employer 
then is essentially done with the verification.
    In the percentage of cases, about 7 percent, where there is 
a mismatch, the employer gets a screen like this that will 
indicate the type of mismatch.
    Our latest functionality that we wanted to show you today 
is a pilot with about 40 employers called the photo screening 
tool. This is a query by card number. It is a query for new 
hires who are non-citizens showing a green card or employment 
authorization document for Form I-9 purposes, and we are 
querying by that card number to display on the screen the photo 
that we, USCIS, put on that card.
    If the photo does not match the photo on the document the 
employee showed the employer 100 percent, then the card has 
been either photo substituted or is completely a fraudulent 
card. And this pilot has already detected one case of fraud in 
about 300 queries that have been run, and that employee did not 
contest that it was a fraudulent document.
    The information is also verified against our databases in 
addition to showing the photo that should be on the screen.
    Thank you very much.
    Ms. Lofgren. I should note for those whose vision is not 
good enough to see the writing on that screen, that we do have 
the PowerPoint attached to the testimony of the witness for our 
review.
    Thank you very much for your testimony.
    [The prepared statement of Mr. Scharfen follows:]
              Prepared Statement of Johnathan R. Scharfen














                               ATTACHMENT




















    Ms. Lofgren. I I will begin the 5 minutes of questioning.
    Mr. Scharfen, you say that over 92 percent of the queries 
from employers receive an instantaneous clearance within 3 
seconds, but it is that 8 percent that we need to resolve. The 
Bureau of Labor and Statistics estimates that the total number 
of employees in the United States is 146.3 million. Eight 
percent of that workforce would be 11,704,000.
    As the United States contemplates the Basic Pilot program 
and expansion, are you equipped to deal with that volume of 
inquiries? And, if so, in what timeframe?
    Mr. Scharfen. Yes, ma'am. Right now, we are taking 3 
million inquiries a year. Our current capacity is for 25 
million inquiries a year. However, we are also taking 
approximately 10 million inquiries a year from the State 
programs. So that puts us at 13 million. We have capacity for 
25 million. So right now, we are about half-capacity.
    Ms. Lofgren. I see.
    Mr. Scharfen. So we could double it today.
    Ms. Lofgren. I want to make sure I understood your 
testimony correctly. Was it your testimony that the Social 
Security Administration Numident database and the USCIS 
database are not currently interoperable?
    Mr. Scharfen. I am sorry, Madam Chairwoman. If the 
databases----
    Ms. Lofgren. USCIS and the Social Security Numident, are 
they interoperable databases?
    Mr. Scharfen. What we do is we make an electronic query to 
the Social Security----
    Ms. Lofgren. So it is a query system.
    Mr. Scharfen. Yes, ma'am.
    Ms. Lofgren. I am going to give you an example, and I want 
you to tell me how this could happen and how what you are doing 
will change it. It is a real-life story that happened with an 
employee of the House of Representatives who was hired on March 
2.
    This individual is a United States citizen, came to the 
United States as a child in 1980 and has been a U.S. citizen 
since 1992. Because the United States House of Representatives 
participates in screening, she went down to the Committee, 
completed the I-9, showed them her United States passport, and 
it came back as a tentative non-confirmation.
    So this person, the next day, got 8 Federal Government work 
days to resolve it--even though it was actually dated the day 
after she found out, so it ended up being only 7--and ended up 
having to go to several meetings, to the Social Security 
office, back to her employer, to House Employee Services. I 
mean, it took about six or seven meetings. And luckily this 
person had her passport on her.
    She was told that even though she has always been legal to 
work, I mean, she came as a lawful permanent resident, that 
that didn't matter, that wouldn't be reflected in the Social 
Security database.
    And I am just mindful that Ms. Hong here, who is our 
counsel, if that is what is happening to her in the Basic 
Pilot, what is happening to someone who isn't an immigration 
lawyer, who doesn't work for the Immigration Subcommittee, who 
doesn't have access to the Social Security Office in the 
Rayburn Building, and whose boss is not the Chair of the 
Immigration Subcommittee? [Laughter.]
    Mr. Scharfen. That is a good question, Madam Chairwoman. I 
will try to answer as best I can.
    We understand that the system today is not perfect, and we 
are taking the large investment that Congress has made, $110 
million, and during the past year we have been trying to make 
improvements to the system.
    Unfortunately, there is a fact pattern there that has 
occurred previously, where someone has been born outside the 
United States, whether as a citizen or otherwise, when they 
come to the United States they have been having some problems 
with the EEVS process. And so that is one fact pattern 
unfortunately that we are struggling with.
    Some of the ways that we are trying to correct that is that 
we are adding to the databases that make up the system on the 
USCIS side. We are also working closely with the Social 
Security Administration, working through those types of issues 
as well.
    Ms. Lofgren. So are you saying that it--we have, for 
example, in Silicon Valley a tremendous percentage of our 
population is a naturalized citizen. I mean, these are 
engineers from all over the world, that they are all going to 
get a hit as possible non----
    Mr. Scharfen. No. But there have been--any of these types 
of hits, obviously, are too many. And in looking at the data 
that we have of non-confirmations that should have been 
confirmations, we have found this sort of information, this 
sort of fact pattern.
    Ms. Lofgren. I am going to end because my time is up and I 
want to set an example, so I will turn now to Mr. King for his 
5 minutes of questions.
    Mr. King. Thank you, Madam Chair.
    Mr. Scharfen, as I review this testimony, it occurs to me 
that we have also been talking, and the President, as I recall, 
has been talking about biometrics in addition to anything you 
might be using right now with your improvement in the photo 
tool incorporation.
    Have you considered incorporating biometrics into that? 
Because as I recall the gentlelady's testimony about matching 
the picture on the card with the picture that is in the 
database, what about matching the face that is in front of you 
at the same time?
    Mr. Scharfen. Yes, sir. The current photo pilot is doing 
just that.
    What we have done is, we have taken the data, we have 
increased our database and are taking the photographs from the 
I-551s, the green cards, and the EADSs, the work permits, and 
we have taken those photographs and we have put them into the 
system so that when you do--when a participating--we have 40 
employers right now in the pilot participating with this 
photo----
    Mr. King. Can you identify the distinction between twin 
brothers or sisters?
    Mr. Scharfen. I am sorry, sir. Can you----
    Mr. King. What I really want to know is, does the employer 
have the authority to determine by visual identification, if 
the picture on the card matches the picture in the database but 
does not match the face in front of them, can you then dismiss 
that employee?
    Mr. Scharfen. Well, yes. He would be able to then try to 
ask for confirmation. You go through that process that you had 
described.
    Mr. King. Would there be repercussions on the employer if 
he made a bad judgment call and they happened to be twins?
    Mr. Scharfen. I would hope that in a situation like that, 
that discretion would play into any type of enforcement action.
    Mr. King. The reason I ask the question is because I think 
when you get into this judgment call, we had that problem in 
the judgment call of reasonably determining that the documents 
are valid. Now there is this question about the judgment call 
of being able to verify that the person in front of you matches 
the picture.
    So I submit that, can you incorporate fingerprints into 
this, like ICE has, where you put the index fingers on a cheap 
little camera and the picture shows up that matches those 
fingerprints? Have you considered going down that path with 
real biometrics?
    Mr. Scharfen. Right now, sir, we are just working with the 
photo pilot, and we are not working with using any of the 
fingerprints at this time. There are other biometrics that are 
conceivably possible with this program, but right now we are 
working on the photo.
    And getting back to the photo, I think that with our 
current system under the pilot, the emphasis has been just 
making sure that the photograph that comes up through the 
computer, on the computer screen, and the photo in front of you 
are one and the same and that they haven't been doctored.
    Mr. King. And I will concede that is a very good start. And 
hopefully we will also plant some seeds here that we know we 
are going to have to be facing a requirement for biometrics to 
really get this right in the longer term.
    In your written testimony, you state or indicate that we 
can ``protect our homeland against foreign threats by 
implementing a temporary worker program.'' I wonder if you 
could explain to this panel, how letting in millions of foreign 
workers is going to make the United States safer.
    Mr. Scharfen. I think that the President's position would 
be that it has to be part of a comprehensive immigration reform 
plan.
    Mr. King. The point of legalizing millions of people that 
are here today illegally, how does that make America safer, 
though? Do you have an understanding of that or is that the 
Administration's position and that is where we are today?
    Mr. Scharfen. I do. I think that the Administration's 
position is defensible in terms of looking at a comprehensive 
reform plan and that taking one piece of that reform plan in 
isolation won't get you the right answer.
    But in terms of putting it in the larger context of the 
immigration reform proposal, you would increase security 
because you would be brining people out of the shadows who are 
working----
    Mr. King. At least those that felt comfortable that they 
would be legalized. Those that suspect that they would not be, 
I suspect would not come out of the shadows.
    I point out also that many of the people who are here 
illegally don't have a legal existence in their own country, 
and how would we go about doing background checks or verifying 
them since they don't have a birth certificate if they are not 
born in a hospital?
    Mr. Scharfen. We would be doing a full series of background 
checks that we do on immigrants coming in or other non-
immigrants coming in through our systems today, whether it is 
the FBI name check, whether or not it is the arrests and 
warrants system. We would do the full security check and 
fingerprint check on these----
    Mr. King. But if someone has committed a felony in a 
foreign country and come into the United States illegally and 
they don't have a legal existence in their home country, then 
do you have a way to verify that? Or do you just have to take 
them at their word?
    Mr. Scharfen. I think that currently our system checks are 
with the FBI and with the other arrest and watch warrants that 
feed into that process. Whether or not they would have some of 
the foreign information on that, I think would be questionable, 
but not necessarily preclude it, sir.
    Mr. King. Thank you, Mr. Scharfen.
    Thank you, Madam Chair. I yield back.
    Ms. Lofgren. Thank you.
    The gentleman from California, Mr. Berman, is recognized 
for 5 minutes.
    Mr. Berman. Thank you, Madam Chairman.
    Could you explain how doing nothing will make us safer?
    Mr. Scharfen. I am not certain I could do that, Mr. Berman.
    Mr. Berman. Because it wouldn't.
    Mr. Scharfen. Yes, sir.
    Mr. Berman. On the Basic Pilot, that is not a photo 
verification system. That is simply a Social Security number 
authenticity check?
    Mr. Scharfen. Yes, sir. Basically, today, the current Basic 
Pilot is taking a look at the information behind different 
cards that are given to the employer on the I-9 form so that 
you go back and you check the Social Security number first with 
the Social Security Administration and then if it is a non-
citizen, you check the USCIS data to see whether the individual 
is----
    Mr. Berman. The Social Security Administration has a 
special designation for legitimate Social Security numbers held 
by non-citizens?
    Mr. Scharfen. That is correct.
    Mr. Berman. What the system doesn't tell you is whether the 
person who is asserting his or her Social Security number is in 
fact the person who has that number.
    Mr. Scharfen. Yes, sir. And that is the problem we had with 
the Swift case, where there was identity theft and identity 
fraud, sir.
    Mr. Berman. Let us assume for a second that wasn't a 
problem. In order to expand that Basic Pilot program into a 
mandatory national system, how much time would you need? And 
how many new employees would you need? And how much more than--
this year it was $114 million--in appropriations would you 
need?
    Mr. Scharfen. Yes, sir. I will try to give you that answer 
as best that I can, sir.
    It depends on what sort of program the EEVS is, whether or 
not you are going to have all new, just all new employees 
covering everybody----
    Mr. Berman. Let us assume that it would be universal in 
terms of employer coverage, but it would only apply to new 
employees.
    Mr. Scharfen. We currently have a capacity of 25 million 
queries right now. We would have to double that to 53 million. 
We think we could do that with the current system and that all 
we would be adding onto that system would be servers. And so we 
think we could do that in short order and on the hardware 
capacity side of it we could add on to that system rather 
easily.
    Our intake here, the Web intake, is large. The pipe is 
large, if you will. And just adding on to the servers would not 
be that difficult or technical----
    Mr. Berman. Just quantify ``short order.''
    Mr. Scharfen. It would be less than a year, I believe.
    Mr. Berman. And quantify ``cost of additional servers.''
    Mr. Scharfen. Right now, it costs $75 million just to run 
our current system a year. We would anticipate that it would be 
in the hundreds of millions of dollars, sir, to expand that. I 
would probably leave it at that magnitude, sir, if I could.
    Mr. Berman. Tell me about the photo pilot. The individual 
who applies for the job, in order to participate in this pilot, 
what does the employer have to get from the individual other 
than the Social Security number?
    Mr. Scharfen. The way for this to work, sir, you have to 
have a green card or an EADS, a worker authorization card.
    Mr. Berman. Some kind of nonimmigrant worker----
    Mr. Scharfen. Yes, sir, or a green card that has the photo, 
the biometric, there.
    And what happens, and I will let Ms. Ratliff describe this 
in more detail since it is her program, but basically you pull 
it up, you put the number of the card into the system. It pulls 
up the photo in the system and the employer matches the two 
photos, but I will let Ms. Ratliff add anything to that.
    Ms. Ratliff. Sir, it is query by card number so that it is 
a one-to-one match against our repository where we store the 
data that we put on the card, the green card or the EAD. So we 
are collecting an additional data field for card number.
    And this applies today, in sort of Phase 1, to non-citizen 
new hires who show a green card or employment document for the 
Form I-9.
    Mr. Berman. Let me just interject. But the employer 
determines that the card he is seeing on the screen matches the 
picture? There is no machine verification?
    Ms. Ratliff. Correct. Today it is just a matter of the 
visual verification that the photo on the card and the photo on 
the screen are 100 percent the same, because it is the photo we 
put on the card.
    For the purpose of this pilot, we are moving very 
carefully, and if the employer thinks there is a mismatch, we 
are having them send us copies of the document so we can also 
visually inspect because it is just such a huge leap forward to 
begin incorporating this biometric. We want to do it quite 
carefully.
    Mr. Berman. I think my time is expired.
    Ms. Lofgren. The gentleman's time has expired.
    The gentleman from California, Mr. Gallegly, is recognized 
for 5 minutes.
    Mr. Gallegly. I appreciate the opportunity, but since I 
came in in the middle of the hearing, I will defer.
    Ms. Lofgren. All right. Let me call, then, on Mr. Gohmert, 
who has been here from the beginning.
    Mr. Gohmert. Thank you, Madam Chairwoman.
    I appreciate you being here to testify. There are so many 
problems, it is kind of hard to know where to start.
    First of all, we had heard testimony in the last couple of 
years in this Immigration Committee that when a name is 
processed, wanting the right to come into the United States, it 
is put in the most generic form, put into the computer for 
potential hits or flags, and when those come, it goes to 
adjudicators, if I understood the process--is that correct?--to 
check out those flags and see if it is something they should be 
worried about or that this couldn't possible be the person.
    Mr. Scharfen. Essentially, that is it. There is a two-step 
process and it goes to verifiers at the USCIS, who then work on 
the case, sir.
    Mr. Gohmert. And one of the things that concerned me 
greatly in trying to get at why it is taking so long to process 
things here was that many of the adjudicators didn't have the 
security clearance; they had not gone through the process 
because it costs money.
    They didn't have adequate security clearances in order to 
access the FBI files, the documents, the files, the records 
that would allow them to make that determination, and that in 
some cases, because of time restraints, they eventually either 
just made a guess, passed it on or left the flag on.
    So I am wondering, how are we doing for getting security 
clearances for adjudicators to make those determinations, so 
they don't just sit there?
    Mr. Scharfen. Sir, I think there are two issues here. One 
is the EEVS system and then the other is the FBI name check----
    Mr. Gohmert. Right.
    Mr. Scharfen. And the checks of watches and warrant type 
checks there.
    As to the second there, we are giving this our attention at 
both the agency and at DHS to improve our ability to do our 
name checks in a quicker, expedited and more accurate fashion, 
and we have looked at that process from start to finish.
    And as a matter of fact, I am meeting today after this 
hearing with the FBI to work on a pilot program that we hope 
will increase the efficiency with which we do our FBI name 
checks to make sure----
    Mr. Gohmert. I appreciate that, but I would sure--I am so 
pleased that the Chairwoman would have this meeting, and I hope 
will have more so we can find out what progress they are making 
in this regard.
    An anecdotal situation, but I am afraid from what I hear 
this is true across the country. We had a business in Belgium 
that wanted to locate in one of the towns in my district, and 
they wanted to hire workers in the community. Most of them 
would have been Democrats. [Laughter.]
    But all they were asking was that we have the plant manager 
from Belgium. And after about a year and a half, they are 
going--this is people we could have had working for a year, 
year and a half, and all we are trying to do is get this guy 
through.
    I ended up talking to the company's lawyer in New York. 
They said they were told, gee, if you pay $1,000 it will put it 
on the expedited path. So they paid $1,000. Months later, they 
checked, said we thought it was expedited, and they were, 
according to him, oh, yeah, it was expedited on that one part, 
but now if you want it expedited on the next part, pay another 
$1,000.
    And I am going, my goodness, it sounds like the United 
States is a corrupt, third-world country that may, actually, in 
talking to others that come in, they say it is easier and 
quicker to go into a third-world country and get a visa to move 
in there than it often is in the United States.
    So with all our millions, with all our technology, I am 
really concerned about our image abroad, and especially when we 
leave people without jobs simply because we can't process one 
visa, one right to come into this country and help all of us.
    So I would like your comment on that.
    Mr. Scharfen. Yes, sir. We admit that it is a serious 
problem, and it is a problem that, in terms of the backlog, 
unfortunately, has been----
    Mr. Gohmert. And is there a bribe system like that, that 
helps smooth the path? An official, I mean, not illegal bribe. 
Just a legalized bribe system to move it forward?
    Mr. Scharfen. No, sir. There are some----
    Mr. Gohmert. So you are saying you can't pay $1,000 so we 
need to run down who they paid the $1,000 and where it ran and 
who got the $1,000?
    Mr. Scharfen. There are some expedited processes in our 
immigration services.
    Mr. Gohmert. So you can pay extra money to move it along.
    Mr. Scharfen. In some of the immigration transactions, yes, 
sir, there are expedited processes and fees that you can pay. 
However----
    Mr. Gohmert. You understand how that looks to the outside 
world, and even to some of us in this one?
    Mr. Scharfen. Yes, sir. What happens, though, if--and I 
don't know the facts of this case, sir, and I would be happy to 
go back and take a look at it carefully, but----
    Mr. Gohmert. Well, he is in now, finally.
    Mr. Scharfen. I am glad to hear it.
    Mr. Gohmert. And the Democrats are working, as they wanted 
to do all along.
    Mr. Scharfen. What happens, though, is that we don't want 
anyone, we can't allow anyone to get into the United States 
unless the FBI name check has been cleared. And that is really 
where we have this terrible backlog. And it is affecting any 
number of people.
    It is affecting our laws. We are being sued tremendously 
over this. It is requiring a--there is a real cost. There are 
costs to lives, individuals' plans and their families. It is a 
cost to our economy and a cost to our Nation's security, and we 
are working hard to fix the problem, sir.
    Mr. Gohmert. Okay.
    Thank you, Madam Chairwoman.
    Ms. Lofgren. The gentleman's time has expired.
    Mr. Delahunt, the gentleman from Massachusetts.
    Mr. Delahunt. Thank you, Madam Chair.
    Let me just pick up on the theme--it is good to see you, 
Jock.
    Mr. Scharfen. Nice to see you, sir.
    Mr. Delahunt. Let me pick up on the theme that was laid out 
by my colleague, Mr. Gohmert. We have a real problem in terms 
of welcoming people to the country. In the year 2005, our share 
of the international visitors market, what we should have had, 
has been estimated at a loss of some $43 billion in that single 
year.
    You know, the problem, as Mr. Gohmert referenced, it is my 
understanding, and there is significant evidence to establish 
this premise, is that international businesses are now making 
decisions to relocate elsewhere rather than in the United 
States because of the problem in the anecdote that was 
described by my friend.
    That is serious. You know, we are a Nation of immigrants 
and all that, and we do have to provide for security, but it 
would appear to be in terms of the admission process, and we 
are talking people who we want in this country for our own 
economic prosperity, are being discouraged.
    It would just seem, and I am just giving you an opinion. I 
have had in my own Subcommittee which I chair, I have had a 
series of hearings on America's image abroad as well as this 
issue of the decline in tourism and travel internationally that 
we are witnessing.
    I don't want to get into the weeds, but it would appear, 
Mr. Secretary, that we have a real mess here in terms of the 
technology, and it is very, very frustrating. I don't know what 
the current status is in terms of the biometric passports. I 
just recently returned from Germany. We were besieged by German 
officials to expand the visa waiver program and to enhance the 
Visit USA every time we turned around.
    Let me just pose a question, because I think this goes to 
Mr. Gohmert's point and to the Chairwoman's point in this case. 
Is there, within USCIS, an ombudsman? Do we have, within the 
agency, a significantly sized resource to expedite these kinds 
of problems that I think are hurting our image and are clearly 
impacting in a negative way our national economy in an economy 
that is increasingly subject to globalization?
    Mr. Scharfen. Yes, sir, we do. We have an ombudsman who has 
been there for about 4 years, and he has addressed these 
issues, and they are of concern to him, sir.
    Mr. Delahunt. But, I mean, I guess what I am talking about, 
Mr. Scharfen, is, it is one thing if you are counsel to the 
House Committee on Immigration, but, again, going to the 
problem that Mr. Gohmert talked about, a year and a half is 
just totally unacceptable. It is just totally unacceptable.
    I mean, what is the size of his staff? Are we talking five 
people or are we talking hundreds of people so that those whom 
we want in this country that are being impeded can pick up a 
phone and talk to somebody and have them walk through the 
process so that we can get these issues resolved?
    Mr. Scharfen. No, sir, he does not have 100 individuals. It 
is significantly less than that.
    Mr. Delahunt. What I am saying, I think these problems are 
everywhere, all over the system. We don't seem to be doing well 
in the technology. You just referenced the FBI. I mean, we had 
a debacle in terms of $180 million computer appropriation that 
didn't work. I mean, here we are, a leading technological 
Nation and we just can't seem to get it together. And as a 
result, our image abroad is hurting.
    If you look at these surveys, people are opting to go 
elsewhere for school. They are going elsewhere in terms of 
their recreational travel. And they are relocating elsewhere--
their business decisions are being impacted by what they 
perceive to be an unfriendly Nation in a system that they don't 
want to navigate any longer.
    Ms. Lofgren. The gentleman's time has expired.
    The gentlelady from California is recognized for 5 minutes 
for her questions.
    Ms. Sanchez. Thank you, Madam Chair.
    Mr. Scharfen, can you tell me if Basic Pilot can detect in 
cases when an employer probably knowingly hires an undocumented 
worker, doesn't enter them into the system, but then enters 
them into the system later, say, after they have filed a labor 
complaint?
    Mr. Scharfen. Right now we are working to improve that area 
of our program, ma'am.
    We have $110 million appropriated to us, and some of the 
improvements we are doing is in the monitoring and compliance 
side of it, and what we would like to do, we have the data but 
we are not right now monitoring it, and we are putting it into 
systems and adequately monitoring it to pick up the patterns 
that you have just identified.
    We would like to do that, and so we have a program where we 
are hiring and starting to develop different monitoring 
software and analysts so that we can look for those sorts of 
patterns in the data, so that we can make those sorts of 
judgments and then go from monitoring to compliance.
    Ms. Sanchez. Because right now, participation in the Basic 
Pilot program requires signing of a memorandum of understanding 
and there are certain conditions that employers have to abide 
by for the use of the program as well as the prohibited 
practices for using the program.
    But my understanding is that in an external evaluation that 
was done by Temple University, they found many employers were 
misusing the system and violating the terms of the memorandum 
of understanding, things like giving non-authorized people 
access to the database or information, prescreening job 
applicants, taking adverse actions against employees after 
receiving a tentative confirmation.
    Do you have any updates in terms of what percentage of 
employers who are currently using the Basic Pilot program might 
be misusing it?
    Mr. Scharfen. I don't have that at my fingertips, here. Ms. 
Ratliff might have some of the data.
    But before I allow her to add that in, I would say that 
that sort of illegal conduct, some of the conduct that you just 
identified, is clearly against the law. And whether it is 
discrimination or otherwise. And the monitoring program that I 
was just discussing would be aimed at looking for that sort of 
pattern as well, where an employer is illegally screening out 
foreign workers, for instance, or on other grounds.
    That may be evident when we start doing the monitoring of 
that, and then that would go into the compliance side of it, 
and it would be on any one of those grounds.
    Ms. Ratliff, can you add to that?
    Ms. Ratliff. I would just add that that Temple report is 
based on data that is 5, 6, 7 years old.
    Ms. Sanchez. Do you have any more current data?
    Ms. Ratliff. Westat is doing an independent evaluation with 
updated information. We have an interim report that came out in 
April and the final report is due out this summer, that we 
would be happy to make available.
    Ms. Sanchez. Okay. I would appreciate that.
    Can you please tell me what actions are currently taken 
against employers that misuse that system? The compliance side 
of it.
    Mr. Scharfen. I would think that we would refer that to the 
enforcement side of the department. We would refer it to ICE 
and give it to them for any appropriate enforcement.
    Ms. Sanchez. To your knowledge, do you know if there have 
been instances of misuse where action has been taken against 
employers or if any employers have been penalized for misusing 
the system?
    Mr. Scharfen. There have been instances where the use of 
the EEVS has been cut off, but as to other types of 
enforcement, I will have to look into that and get back to you, 
ma'am.
    Ms. Sanchez. Would you have any recommendations for 
ensuring that employers use the system properly and ways in 
which we could penalize, what would be effective methods of 
penalizing those who violate the terms of----
    Mr. Scharfen. I think getting back to the original point 
that I had made, ma'am, is that we first have to monitor it and 
then go from there onto the compliance side of it, and that the 
first step is to identify in a more systematic way those 
instances of violations and then treat those appropriately, 
both programmatically and in individual instances, and I think 
if we did pick up individual instances, we would refer those to 
ICE for enforcement.
    Ms. Sanchez. Thank you.
    I yield back.
    Ms. Lofgren. The gentlelady's time has expired.
    I will note that the record is held open for 5 legislative 
days so that written questions can be directed to the 
witnesses. And all Members are asked to pose those questions 
within the 5 days, and we ask that answers be made as promptly 
as possible.
    We do thank you, Mr. Scharfen, for your testimony today and 
for your further information and answers to follow-up 
questions. And we do look forward to the April interim report, 
which we do not have, and we look forward to getting that.
    Mr. Scharfen. Yes, ma'am. Thank you for the opportunity to 
testify.
    Ms. Lofgren. Thank you so much.
    I am now going to ask the second panel to come forward to 
the table. While we are getting organized, I will start the 
introductions.
    First, we are pleased to introduce John Shandley, the 
Senior Vice President of Human Resources at Swift & Company. 
Before his work with Swift & Company, Mr. Shandley directed 
several units within the Labor Relations Division at Nestle USA 
and store operations at Ralph's Grocery Company.
    A former aide to the commanding Army general in Okinawa, 
Japan, and the assistant commanding Army general in Fort Hood, 
Texas, Mr. Shandley holds a B.S. degree from the University of 
Southern California and graduated from the Food Industry 
Management Program, also at the University of Southern 
California.
    We are also pleased to have Stephen Yale-Loehr join us from 
the law firm of Miller Mayer. Mr. Yale-Loehr has practiced 
immigration law for more than 20 years and has co-authored the 
leading multi-volume treaties on U.S. immigration law, titled, 
Immigration Law and Procedures.
    In addition to his practice, Mr. Yale-Loehr teaches 
Immigration and Asylum Law at Cornell University's Law School 
as an adjunct professor. He holds his bachelor and law degrees 
from Cornell.
    Finally, I would like to welcome Dr. Marc Rosenblum, a 
professor with the Political Science Department at the 
University of New Orleans. In addition to his scholarship on 
immigration policy and U.S.-Latin American relations, Professor 
Rosenblum has served as an international affairs fellow at the 
Council on Foreign Relations and a visiting fellow at the 
Migration Policy Institute.
    Professor Rosenblum earned his B.A. from Columbia 
University and his Ph.D. from the University of California in 
San Diego.
    Each of you have provided written statements, which I have 
read and I am sure the other Members have as well. They were 
very helpful. The entire statements will be made part of the 
official record.
    I would ask that you summarize your testimony in 5 minutes, 
and to help you stay within that timeframe we have a very 
helpful little light here. And when you have about 1 minute 
remaining, the yellow light will go on. And when it turns to 
red, it means that your time is up.
    So, again, thank you for being here.
    And let us start with Mr. Shandley.

    TESTIMONY OF JOHN SHANDLEY, SENIOR VICE PRESIDENT HUMAN 
                   RESOURCES, SWIFT & COMPANY

    Mr. Shandley. Chairwoman Lofgren, Ranking Member King, 
Members of the Subcommittee, good morning. My name is Jack 
Shandley, Senior Vice President of Human Resources for Swift & 
Company. Thank you for inviting me.
    Today I will cover background on Swift, our experiences 
with employment verification, worksite enforcement systems, and 
recommendations.
    Swift is the third-largest processor of fresh beef and pork 
in the United States. Annual sales exceed $9 billion. All but 
one of our seven domestic plants have union representation. We 
employ 15,000 people domestically, pay production employees 
more than twice the Federal minimum wage, offer retirement and 
comprehensive health care benefits, and possess industry-
leading employee safety records.
    Swift's hiring process goes above and beyond what is 
required by Federal and State law in terms of identity 
determination and work authorization.
    First, every new Swift employee is required to complete an 
I-9 form, provide government-issued photo identification, 
usually a State identification card or driver's license. 
Employers must accept identification documents that on their 
face seem valid and not specify which of the 29 authorized 
forms of identification the applicant must supply and are 
prohibited from asking for additional documents.
    In fact, Swift was sued for $2.5 million by the Department 
of Justice in 2001 for allegedly going too far in trying to 
determine applicant eligibility. We settled the case for less 
than $200,000 with no admission of wrongdoing.
    Second, Swift has voluntarily participated in the Federal 
Basic Pilot program since 1997. Every production employee hired 
since has received a Social Security number and name validation 
through this government system.
    Third, last year, with the assistance of third-party 
immigration compliance consultants, we implemented a hiring 
process improvement program called, informally, Connect the 
Dots. It enhanced our interviewing and information evaluation 
procedures to allow us to better detect identity fraud in a 
nondiscriminatory way.
    For example, we now automatically flag new applicants who 
were either previously employed with or denied employment at 
another Swift location.
    Simply put, a company cannot legally and practically do 
more than we have done to ensure the legal workforce under the 
current regulations and tools available from the government. 
Despite these procedures, the government raided six Swift 
production facilities on December 12, 2006, detaining 1,282 
employees. This event cost Swift more than $30 million and 
disrupted communities and livestock producers.
    The raids came after numerous attempts over many months by 
senior management, outside counsel and others to understand 
ICE's concern. We sought a collaborative way of apprehending 
all potential illegal workers and criminals in order to 
minimize disruption to the company, the communities and the 
livestock producers. All efforts to generate a collaborative 
solution were repeatedly rebuffed by ICE under the guise of an 
ongoing criminal investigation.
    After 14 months of investigation, the government has not 
accused or charged Swift or any current or former member of 
management with any wrongdoing in connection with this 
immigration worker investigation and we have no reason to 
believe they shall do so in the future.
    DHS continues to unfairly insinuate that Swift is somehow 
guilty. We believe it is past time for it to publicly admit to 
the company that it is not guilty of violating immigration 
laws.
    These ICE raids dramatically highlighted flaws in the Basic 
Pilot program. Criminals today are able to substitute 
counterfeit identification documents with genuine ones obtained 
under fraudulent terms. For example, State identification cards 
obtained with valid copies of birth certificates or Social 
Security cards. Furthermore, Basic Pilot does not detect 
duplicate active records in its database. The same Social 
Security number could be used at multiple employers across the 
country.
    Today we are confronted with a prolific and sophisticated 
document fraud industry now capable of providing unauthorized 
workers with documents and identities that challenge our 
ability to detect fraud and seem to defeat the Basic Pilot 
program relied upon by employers. Let me reiterate: Basic Pilot 
is the only government tool available to employers and it is 
fatally flawed.
    Employers like Swift, who follow the law, are not the 
problem within the immigration reform debate. The immigration 
system is the problem. We need a legislative solution to the 
issue of employment verification, a more broadly comprehensive 
immigration format that includes a revamped Basic Pilot 
program; standardized State identification requirements; 
tamper-proof or biometric identity documents; tough penalties 
for employers who break the law and protection for those who 
don't; a refocused initiative for ICE that includes a 
collaboration with employers who play by the rules; a guest 
worker program; and earned status adjustment for a large 
portion of the estimated 12 million individuals illegally here 
today, whether as citizens or permanent alien residents.
    Thank you for having me.
    [The prepared statement of Mr. Shandley follows:]
                 Prepared Statement of John W. Shandley








    Ms. Lofgren. Thank you very much.
    Mr. Yale-Loehr?

  TESTIMONY OF STEPHEN YALE-LOEHR, MILLER MAYER, LLP, ADJUNCT 
                 PROFESSOR, CORNELL LAW SCHOOL

    Mr. Yale-Loehr. Thank you. The Subcommittee asked me to 
give you a brief history about employer sanctions. I also want 
to talk with you about some systemic problems with the current 
employer sanctions regime and conclude with some 
recommendations.
    First, a brief history. Congress enacted employer sanctions 
in 1986. Until then, it was not illegal for an employer to hire 
someone who did not have proper work authorization. It was 
illegal for the worker to be here without proper work 
authorization, but it was not illegal for an employer to hire 
them.
    That changed in 1986 when Congress enacted employer 
sanctions as part of IRCA. IRCA did four things relating to 
this hearing today.
    First, it prohibits employers from knowingly hiring 
undocumented workers.
    Second, it requires all employers to verify identity and 
work eligibility of all job applicants, U.S. citizens or 
foreign nationals.
    Third, IRCA created anti-discrimination protections.
    And, fourth, although it wasn't in the statute, one flaw of 
IRCA was that it failed to provide for a temporary worker 
program to allow future flows of temporary workers to enter the 
United States legally.
    Congress was concerned that the enactment of employer 
sanctions might increase discrimination against foreign-looking 
and foreign-sounding job applicants, so it asked the Government 
Accountability Office to do a series of three reports.
    In 1990, the final version of that report came out and the 
GAO found that IRCA's employer sanctions provisions created ``a 
serious pattern of discrimination.'' The GAO found that because 
of employer sanctions, discrimination against foreign-looking 
and foreign-sounding job applicants increased by 19 percent.
    Despite that finding by the GAO, Congress did not do much 
to repeat or to modify employer sanctions. Employer sanctions 
effectively has created a paradox. We have a high degree of 
paperwork compliance, but a low degree of actually stopping 
undocumented workers from entering the United States or working 
here.
    Employers complain about the paperwork burdens and they do 
not want to be junior immigration inspectors. Fraud and 
discrimination have increased with employer sanctions over the 
last 20 years.
    What to do about it? Well, in 1994, Representative Barbara 
Jordan headed a commission that looked into this issue and they 
came up with a proposal to take verification away from 
employers and put it on the government. They recommended a 
computerized registry of looking at Social Security and 
immigration databases. That was the genesis of the Basic Pilot 
program that Congress enacted in 1996.
    I am not going to talk about the Basic Pilot program 
because the other panelists will talk about that in more depth. 
What I next want to focus on are some of the systemic problems 
in our current employer sanctions regime.
    First, the political compromise that created employer 
sanctions floundered against the economic reality of the fact 
that we did not have a legal way to bring in needed temporary 
workers to the United States legally. Therefore, they had to 
enter illegally and use fake documents many times.
    Second, employer sanctions enforcement has been 
inconsistent. It was fairly good right after enactment of IRCA 
in 1986, but has then declined. For example, the Immigration 
and Naturalization Service audited almost 10,000 employers back 
in 1990, but only 2,200 in fiscal year 2003, a decline of 77 
percent. Similarly, back in 1992 the Immigration Service issued 
over 1,460 notices of intent to fine against employers who 
violated employer sanctions. By 2004, that had dropped to 
three, a decline of 98 percent.
    So what do we do? Well, I have several recommendations in 
my written testimony. I call them the 3 E's: enforcement, 
evaluation, and entry.
    First, on enforcement, we need consistent, vigorous and 
adequately funded enforcement that is funded by the Congress 
over the long haul, not just for a few years. Moreover, we need 
to target employers who intentionally violate whatever employer 
sanctions regime is enacted.
    Second, evaluation. We need to properly, quickly and 
accurately evaluate a person's documents so that we know those 
documents are not fraudulent and that they do relate to the 
person presenting those documents. We also need to continually 
evaluate any new system to make sure that it is working 
properly with very few errors and is not causing any increase 
in discrimination or privacy problems.
    Third, entry. We need to have a temporary worker program as 
part of comprehensive immigration reform that is large enough 
to accommodate our labor shortages. Those people then will be 
able to enter legally and with proper documents. That will 
reduce incentives to enter illegally or use false documents.
    These three elements are the three legs of the stool that 
can reform our employer sanctions regime. All three legs need 
to be adequately funded and enforced over time or they may fall 
apart.
    In sum, employer sanctions is a very important component of 
comprehensive immigration reform, perhaps the most important 
component because it affects all Americans, not just 
immigrants. For that reason, Congress must handle this issue 
carefully and thoughtfully.
    Thank you.
    [The prepared statement of Mr. Yale-Loehr follows:]
                Prepared Statement of Stephen Yale-Loehr


























    Ms. Lofgren. Thank you.
    Now, finally, Dr. Rosenblum.

  TESTIMONY OF MARC ROSENBLUM, Ph.D., DEPARTMENT OF POLITICAL 
               SCIENCE, UNIVERSITY OF NEW ORLEANS

    Mr. Rosenblum. Thank you very much, Madam Chairwoman and 
Members of the Committee. It is a great honor to be here with 
you today. I appreciate the opportunity to talk to you about 
the challenges of employment verification and worksite 
enforcement.
    The failure of existing immigration law to prevent 
undocumented employment has been well documented and 
establishing more effective employment-based immigration 
controls has rightly been identified by advocates of 
comprehensive immigration reform as a top priority.
    In short, the current system fails to provide employers the 
tools they need to identify undocumented employees. The I-9 
document-based verification system is vulnerable to document 
fraud, the use of fake IDs, and both the I-9 system and the 
Basic Pilot Electronic Eligibility Verification System are 
vulnerable to identity fraud with the fraudulent use of 
borrowed or stolen identity documents pertaining to another 
person.
    In addition, enforcement of employer sanctions has never 
been a priority for INS or DHS, as we have just discussed, and 
penalties for noncompliance are low. These verification 
problems mean that even conscientious employers may unknowingly 
hire undocumented immigrants and weak enforcement provisions 
mean that unscrupulous employers may knowingly do so because 
the expected penalty is simply not a deterrent.
    So we need to address both the conscientious employers and 
the unscrupulous employers, and they require sort of separate 
solutions.
    These obstacles to effective enforcement are well known, 
and I will therefore focus on three additional problems which 
have received less attention.
    First, even as the current system fails to prevent 
undocumented employment, it also denies authorization to some 
U.S. citizens and other legal workers. False negatives occur 
during the I-9 process because the system is complex and many 
employers recognize their inability to accurately determine a 
job applicant's status.
    So some employers err on the side of caution by refusing to 
hire people who seem like they might be unauthorized to work, a 
phenomenon known as defensive hiring.
    The Basic Pilot was conceptualized in part to address this 
problem by eliminating the need for subjective employer 
judgment, but Basic Pilot database errors are surprisingly 
widespread--we have talked a little bit about this. They exist 
on a scale that would affect hundreds of thousands and perhaps 
millions of workers in a universal system.
    These errors demand our attention, because the logic of 
electronic verification runs counter to the judicial principle 
of presumed innocence. Under Basic Pilot, all job applicants 
are presumed unauthorized until proven otherwise, so the burden 
is on the U.S. citizen or other legal worker to correct 
database errors, often after considerable time and expense, or 
lose their job.
    A second problem is that these false negatives 
disproportionately affect persons born outside of the United 
States so that our overall employment verification system 
becomes a de facto source of employment discrimination. Legal 
workers who look or sound foreign born are more likely to fail 
an employer's eyeball test or to be subject to additional 
scrutiny in the context of ambiguous verification procedures.
    Faced with these doubts, some employers refuse to hire such 
job applicants as a function of their appearance and other 
employers hire questionable job applicants but pass along the 
risk of doing so in the form of lower wages.
    A well-functioning electronic eligibility verification 
system could ameliorate this problem, but the Basic Pilot 
exacerbates the problem because database errors in Basic Pilot 
are far more likely to affect naturalized citizens and legal 
immigrants than native-born citizens.
    A third unintended consequence of the current system is 
increased exploitation of undocumented workers by unscrupulous 
employers. Ambiguity in the verification process allows 
employers to turn a blind eye to fraudulent documents at the 
point of hire and then discover an employee's undocumented 
status later, perhaps in response to an employee's demand for 
fair working conditions or their efforts to join a labor union.
    Because current rules place greater emphasis on migration 
control than they do on holding employers accountable or 
enforcing U.S. labor law, some employers actively seek out 
undocumented employees knowing it puts them in a position to 
deport their labor problem later.
    Once again, the harmful effect on wages and standards are 
felt throughout the U.S. economy, not just by undocumented 
workers.
    As Congress considers comprehensive immigration reform, I 
believe you confront a fundamental tension in this area. Most 
steps to limit undocumented employment, strengthening 
verification and enforcement procedures, tend to increase the 
risk of false negatives, employment discrimination and worker 
exploitation.
    Setting aside the politics, it is technically difficult to 
design a system which screens out those who should be screened 
out without causing collateral damage to legal workers and 
conscientious employers.
    This tension may best be resolved by providing employers 
and employees with clear and effective verification procedures 
so that straightforward compliance prevents the overwhelming 
majority of undocumented employment.
    Once such a verification system exists, enforcement efforts 
and penalty structures must be substantially increased to 
create a real deterrent to undocumented employment with a 
special focus on going after ``bad apple'' employers.
    Most importantly, we now have two decades of unambiguous 
evidence about the harmful, unintended labor market 
consequences of worksite enforcement. Yet even as Congress has 
been made aware of these adverse effects, flawed enforcement 
practices have not only been committed to continue, but they 
have been expanded in direct opposition to the conclusions of 
key reports on this subject.
    So as Congress once again prepares to strengthen worksite 
enforcement, as it should, I urge you to learn from these 
studies and, simultaneously, to take steps to prevent the 
predictable increase in false negatives, discrimination and 
exploitation, which are sure to result.
    Thank you again for the opportunity, and I would be happy 
to elaborate.
    [The prepared statement of Mr. Rosenblum follows:]
                Prepared Statement of Marc R. Rosenblum




































    Ms. Lofgren. Thank you very much. Very helpful from all of 
you.
    I will begin the questions.
    Mr. Shandley, thank you for coming in voluntarily to give 
us your perspective. You have suggested that ICE's behavior 
with respect to action against Swift, have been problematic. I 
am wondering, I mean, in your written testimony you say that 
Swift lost more than $30 million as a consequences of this 
raid.
    Could you talk about what steps ICE took or didn't take 
that they should have taken, in your judgment, to deal with the 
situation you found and the financial ramifications for your 
business?
    Mr. Shandley. I would address from this way, Madam: It is 
what they didn't take.
    We repeatedly, through various avenues, including attempts 
at direct contact, to work with them in a collaborative format. 
And ultimately, you know, if they are looking for criminals, we 
volunteered to help them. We said we would move heaven and 
earth to get to those criminals and do everything we can.
    At the end of the day, they raided our facilities and 
basically detained thousands of employees to get at the 1,282, 
of which only a few hundred actually had criminal issues 
associated, and that was well documented in the press.
    So at the end of the day, I think it could have been a far 
more collaborative effort in its process without having to shut 
down our operations in what we would consider to be--well, it 
was an unprecedented manner.
    Ms. Lofgren. I am wondering, Mr. Yale-Loehr, you talked a 
little bit about the need to phase in a system over time, and 
as we think about a biometric system, too often we don't think 
about the database that is needed to support that system.
    But we really actually have to make this work for every 
employee in America, which is a lot of people. And I think 
about standing in the line--which I don't much care for. I am 
pretty sure that our American citizen constituents are not 
going to be very happy about that. Everybody thinks this will 
apply to somebody else.
    What do you envision in terms of phase-in to make this 
actually work in a way that will be seamless for the United 
States citizens who are impacted?
    Mr. Yale-Loehr. Because it is such a large problem, we do 
need to phase it in over time. We probably need to have 
checkpoints at each step of the process so that we know that 
there is an accuracy rate that we can live with before we move 
on to the next step of the process.
    For that reason, it may take even a decade before we get to 
a system that we all can agree on that meets certain 
fundamental requirements of speed, accuracy, privacy 
considerations, and non-discrimination. I don't have a specific 
timetable in mind.
    Hopefully, if this could be done well, it would not 
necessarily be an actual line but it would be more of a virtual 
line in that you present your documents to the employer and 
they can find out very quickly by dialing or using the Internet 
the answer that they need.
    But there are going to be some costs to U.S. citizens and 
the question is what is the price of that versus getting 
control over knowing who our workers are.
    Ms. Lofgren. Dr. Rosenblum, you are an expert on these 
technology issues and I appreciate very much your willingness 
to be here.
    Some people say if every employer had the ability to just 
do a card swipe like we do at the checkout stand, that that 
would solve our problems. It seems to me that although that 
kind of a system might eliminate some errors, that is really 
not going to solve the whole thing.
    Can you talk about the biometric needs as opposed to where 
we are on databases and what needs to be done?
    Mr. Rosenblum. Thank you.
    Well, you are certainly correct. Simply adding a card swipe 
to the current system would not solve all our problems. And the 
main reason is that the card swipe doesn't tell you anything 
about who is doing the card swiping. So we still have the same 
identity fraud problem that we have now.
    Ultimately, the only way that we are going to--there are 
two ways that we can conceivably address identity fraud, and 
one is through some kind of a biometric database.
    And when we think about a biometric database, one option--
what that requires is, ultimately, for every U.S. citizen to 
submit biometric data, a digital photograph or fingerprint, to 
DHS, and so there would be an enrollment period where everybody 
would submit that data.
    One option then is that we would have something like the 
photo screening tool that Ms. Ratliff was describing earlier, 
where the employer would see a picture of what that person is 
supposed to look like and then could make a judgment about 
whether that person was in fact in front of them.
    So I would submit that this would essentially address the 
problem for conscientious employers. Most conscientious 
employers could make a judgment. I mean, you would still have 
some false negatives as a result and some discriminatory 
outcomes.
    The only way that you would really decisively confirm the 
identity fraud issue is to take biometric data at the point of 
hire. So to have either fingerprint scanning or some kind of 
digital image scanning when employees get their jobs, and this 
is a massive infrastructure investment and a massive shift in 
how we think about relations between the States and individuals 
and their employers.
    The one thing that we should bear in mind when we think 
about the cost of that is that ultimately we have to choose 
between front-loading the cost by building some kind of a 
biometric database and having problems like what we have seen 
in the Swift case, back-loading the cost. We are either going 
to make a lot of mistakes in enforcement and have employers who 
comply but nonetheless hire undocumented immigrants, or we are 
going to have to make this investment in some sort of biometric 
database.
    Ms. Lofgren. My time is expired, but I will just note that 
compared to the $30 million Swift company lost on this raid, 
they probably wouldn't have minded to spend a small amount to 
enroll their employees.
    But I would yield now to Mr. King for the 5 minutes.
    Mr. King. Thank you, Mr. Rosenblum.
    And thank you, Madam Chair.
    I thank all the witnesses.
    A point that I didn't hear emphasized, Mr. Rosenblum, is 
that 99.8 percent of U.S. citizens are approved in the first 
attempt to pass Basic Pilot. And would you agree that U.S. 
citizens should be our first priority if we are going to clean 
up this database and work our way through this process until we 
get it all right?
    Mr. Rosenblum. As long as there are these--the problem 
with--certainly I think that, you know, your first concern is 
to your constituents, U.S. citizens. As long as the system has 
these large, systematic errors, then we are going to end up 
with mistakes and we are going to have problems like the Swift 
case.
    Mr. King. Are there distinctions between the rights of U.S. 
citizens and the rights of, I will say, visa holders and legal 
workers here in the United States?
    Mr. Rosenblum. Certainly, there are.
    Mr. King. And you would acknowledge that we would have a 
priority to set here in this Congress, would you not? Do you 
just prefer not to make that philosophically yourself?
    Mr. Rosenblum. I don't have a problem with Members of 
Congress making that distinction, and I recognize that there 
are differences in the rights of citizens versus non-citizens.
    My concern is that until we have a verification system that 
is accurate and reliable and employers are making judgments, as 
you commented before, then we are going to end up with a lot of 
mistakes and we are going to end up with employers continuing 
to comply with the law and still hiring undocumented 
immigrants.
    Mr. King. Okay. Thank you.
    On Page 14 of your testimony, you state that a minority of 
the employers will still attempt to game the system. And you 
also address that we need to address both the contentious and 
the unscrupulous employers.
    Do you have any reference that I have missed in 
unscrupulous employees? And what percentage of the employees 
would you suspect are unscrupulous?
    Mr. Rosenblum. Well, all of the undocumented ones are 
attempting to break our law. I would agree with that.
    Mr. King. Thank you. A well-stated point, and I appreciate 
that.
    Turning to Mr. Yale-Loehr, how would you suggest Congress 
determine the number and type of needed workers? Would you put 
a cap on that? Listening to some of your testimony, I didn't 
get that sense that you would.
    Mr. Yale-Loehr. I think that is a large issue, and I think 
it needs to be considered carefully.
    There have been various proposals about how to handle any 
temporary worker program. The Migration Policy Institute, for 
example, convened a task force of experts last year and came 
out with some very good recommendations on how to deal with the 
temporary worker program, generally.
    I think there has to be collaboration between the 
government and employers to be able to figure out what the true 
labor shortages are, and I think some kind of advisory panel to 
say that we have a labor shortage in this industry this year, 
therefore we need workers, would be one way to deal with it.
    So I don't know that we need to have a fixed cap. I think 
that we have seen in other areas of immigration law, like the 
H-1B area, that fixed caps do not work. On the other hand, I am 
not for open borders where anybody can just cross the borders.
    Mr. King. I just happened to notice that in your written 
testimony it says that we need a temporary worker program large 
enough to allow most foreign workers to enter the United States 
legally. And in your verbal testimony, your statement was large 
enough to accommodate our labor shortages.
    What criteria would you use? Would you let the market 
demand determine, as long as there was a willing employer and a 
willing employee? Doesn't that connote that we are then a 
Nation that is an economic Nation, a Nation of opportunity, a 
giant ATM, rather than a Nation of people that has a soul and a 
heart and a culture and interests beyond those of an employer 
that is willing to hire an employee regardless of the price of 
that wage?
    Mr. Yale-Loehr. Well, I think President Bush has said that 
he wants to match willing workers with willing employers, and I 
think----
    Mr. King. You concur?
    Mr. Yale-Loehr [continuing]. That as long as we do that 
carefully, I think that is an appropriate way for Congress to 
act.
    Mr. King. You would make the economic decision only, then. 
You wouldn't consider the cultural implications that I have 
mentioned.
    Mr. Yale-Loehr. I think those are one factor, but I think 
immigration generally is healthy in the United States. So I 
think that has helped our culture over time.
    Mr. King. How would you measure that?
    Mr. Yale-Loehr. I think that is very hard to measure. I 
don't have a way to put that into a concrete system.
    Mr. King. Thank you.
    Mr. Shandley, I want to say first off, as the Member of 
Congress who represents the number-one pork production district 
in America, we appreciate Swift & Company. You provide a 
fantastic market for our producers there. And whatever we 
discuss with regard to immigration has no implication upon the 
character or the efficiency or the people whatsoever. And I 
want to thank you for providing that market. That has been an 
interest of mine as well.
    I wanted to ask you--and you have gone through quite a lot 
since last December, and I have watched it closely since 
Worthington, Minnesota, is to my north and Marshalltown, Iowa, 
is just to my east. We pay attention. Also, Grand Island, 
Nebraska, to my west.
    Have your competitors undergone the same scrutiny that 
Swift & Company has?
    Mr. Shandley. To our knowledge, no.
    Mr. King. Do you consider that to be a disadvantage now to 
you competitively? Or there is another way to phrase that 
around the other way. Do your competitors have an advantage 
that you don't have because they have not undergone the same 
scrutiny?
    Mr. Shandley. We believe that is the case, both at the 
customer level as well as at the employment level.
    Mr. King. Have you made the case to ICE or to Justice that 
you have been now put with a spotlight on you in the Nation and 
it puts you at a competitive disadvantage?
    Mr. Shandley. We have made that case to anybody that will 
listen, including ICE.
    Mr. King. Then I assume you welcome that question, as well, 
and appreciate that.
    In the past, is there a history of INS or ICE raids with 
Swift that have gone on in previous year? How many times has 
this happened?
    Mr. Shandley. You know, the industry has gone through 
raids. The most recent part of that was in the late 1990's. And 
Swift & Company in Nebraska had facilities in Nebraska when 
those raids occurred.
    Mr. King. Thank you, Mr. Shandley.
    Appreciate all your testimony.
    Thank you, Madam Chair. I yield back.
    Ms. Lofgren. Thank you very much.
    I now recognize the gentleman from California, Mr. Berman, 
for his questions.
    Mr. Berman. My first one really isn't so much about 
employers, but I do hope to be able to get into that. It is 
this willing employer/willing worker. The fact is, scarcity or 
shortage is a way by which workers can increase what they get 
paid or get better conditions. That is the marketplace.
    In a universe where you decide the number of guest workers 
by a willing employer/willing worker standard, for all intents 
and purposes, you remove that friction or that scarcity because 
there is somebody in Bangladesh who will do it.
    Now, you have minimum wage laws, but now you are 
essentially condemning lots of workers to being at the legal 
bottom and I just want to make that observation, without 
getting into----
    Mr. Yale-Loehr. If I could respond to that, if you don't 
mind.
    I certainly believe we have to have full enforcement of all 
of our labor protections and I agree entirely with Dr. 
Rosenblum's comments in his written testimony, that we need to, 
for example, repeat Hoffman Plastics. We need to have a lot 
more vigorous labor protection so that immigrant workers, as 
well as U.S. workers, get the full protection of our labor 
laws.
    Mr. Berman. I agree with that very strongly, but that 
doesn't really deal with the underlying point, that the minimum 
labor protections, even if strongly enforced, are not 
necessarily what--at some point, that farm worker who has been 
there 10 years has some expectation of getting more than the 
minimum wage in a willing employer/wiling worker universe, 
somebody is quite willing to take his or he job for the minimum 
wage.
    But anyway, there is a--even in my own mind, there is a 
tension here. I do think we need a legal avenue for people to 
come in and perform jobs. How expansive it is, to what extent 
it should be capped, and what the tests for industries or jobs 
that are eligible for those folks are is a tougher question.
    On the verification, I guess, Dr. Rosenblum, since the 
Chair introduced you as an expert on the technologies, you 
essentially described the most fulsome kind of system and the 
most effective system, the system that will avoid the Swift 
problem, most likely, as a fairly intrusive system with a great 
deal of forward-funding for infrastructure.
    The government is going to essentially--or employers are 
going to underwrite equipment and communication systems that 
give quick and accurate answers very quickly. I don't think 
this thing works without that. I think otherwise we have some 
sort of repeat of 1986 again.
    What can we do to take that element, which you made a brief 
reference to--changing the whole nature of questions of privacy 
and individual liberty and misuse of information. Can we both 
make the investment and decide to implement as effectively and 
quickly as possible that kind of system, and at the same time 
safeguard and limit the change in the nature of those 
relationships such that concerns about misuse of information 
can be alleviated to the greatest extent possible?
    Mr. Rosenblum. I think that is exactly the right question, 
and the record so far, including the Federal Government's 
record in protecting private data, doesn't give us a lot of 
reasons to be confident that we can----
    Mr. Berman. Well, let me interject.
    One area that I was particularly focused on, in the 1986 
law, one of the arguments against the legalization program was 
people will come forward to get legalized, if they didn't 
qualify they will be turned over to enforcement and they will 
be immediately deported. I am unaware of a single--we put in 
prohibitions on that kind of sharing--and I am unaware of one 
instance where that actually happened.
    Why can't you create firewalls and limitations on the use 
of information that by and large will be effectively maintained 
and enforced and thereby protect----
    Mr. Rosenblum. I think the reason it is challenging to 
protect that data is that, as we invest the data with a lot of 
importance in the context of this system, we create a market 
for it. So there will be people who, you know, will seek to 
obtain it, and so the more valuable it is, the more vulnerable 
it is.
    I think that there are ways to phase in this system, even 
before we assemble the complete biometric database that is such 
a threat in the ways that you just observed, by relying on sort 
of data-mining strategies to look for probable cases of 
noncompliance.
    In doing that, we will end up targeting employers who 
intend to comply but aren't able to do so successfully. But to 
my knowledge and in my estimation, there is no way to come up 
with a truly foolproof verification system without building 
this database and building that database is inherently a threat 
to our privacy and inherently restructures our relationship 
with the State and with employers.
    So I think that Congress should certainly invest a lot of 
time and energy in doing what you can to safeguard that data 
and to try to limit it to the purposes of employment 
verification and both the Strive Act and last year's Senate 
S.2611 have some very sensible provisions that way, but I think 
that we should go into it with our eyes open and recognize that 
those protections are going to be imperfect.
    Ms. Lofgren. The gentleman's time is expired.
    The gentlelady from California, Ms. Sanchez, is recognized.
    Ms. Sanchez. Thank you.
    Mr. Yale-Loehr, you mentioned that Congress didn't 
terminate employer sanctions following a 1990 GAO report that 
showed sanctions have created a serious pattern of 
discrimination. You also note that over time it has become 
clear that employer sanctions aren't working effectively and I 
think in your written testimony you said that in the end, fraud 
and discrimination took over the system.
    Can you explain a little bit how fraud and discrimination 
took over that system?
    Mr. Yale-Loehr. Well, I think, as I mentioned in my 
testimony, as it became clear that the immigration agency was 
not effectively enforcing employer sanctions, employers decided 
they didn't really have to worry about it, and they were more 
willing to take fake documents.
    Similarly, particularly back in the 1980's, it was easy to 
obtain fake documents. We didn't have the same kind of 
counterfeit resistant documents that we do today. So it was 
easy for fraudulent documents to flood the market. So that is 
why employer sanctions gradually came to be seen as a joke.
    Ms. Sanchez. Do you know what percentage of employers ever 
got investigated or fined?
    Mr. Yale-Loehr. Yes. There are some statistics in my 
testimony as well, and Dr. Rosenblum's testimony. I don't 
recall what the overall percentage of U.S. employers is, 
however.
    Ms. Sanchez. So you don't think employer sanctions was an 
effective deterrent in that regard?
    Mr. Yale-Loehr. In part because we didn't have consistent 
enforcement.
    In 1999, Immigration and Naturalization Service made 
worksite enforcement the lowest of its five investigatory 
priorities. So with that kind of background, it is hard for any 
system to be effective.
    Ms. Sanchez. We hear terms all the time, the cost of doing 
business, the businesses take the risk because what they save 
in terms of wages that they have to pay far exceeds their risk 
for enforcement of being caught employing people that they 
shouldn't be employing and paying whatever minimal fines at the 
end of the day end up being assessed.
    What recommendations do you have for protecting against 
discriminatory hiring practices?
    Mr. Yale-Loehr. I think we have some decent provisions in 
current law. We also have expansions of that proposed in the 
Strive Act that I think are worth considering.
    I also think we need to give more money to the Office of 
Special Counsel and the Department of Justice so they can go 
out and enforce those laws.
    Ms. Sanchez. And any suggestions on how we could protect 
against the fraudulent aspects of verification?
    Mr. Yale-Loehr. I think Dr. Rosenblum has expressed the 
fact that it is hard to make sure that the person who presents 
the documents really is the person who belongs to those 
documents, and that is a large challenge that we all have to 
face.
    Ms. Sanchez. Okay.
    Mr. Rosenblum, in your written testimony, you discuss at 
length the problem of false negatives and how they can 
adversely effect even United States citizens.
    In your opinion, when the Basic Pilot program or any new 
system is built, who should compensate work eligible citizens 
who are wrongly denied the right to work by DHS data errors or 
by bureaucratic errors?
    Mr. Rosenblum. Well, certainly, if the errors are on the 
part of DHS and the government database, then I would see it as 
the government's responsibility to compensate the workers for 
those lost wages, both the Strive Act and last year's Senate 
bill had provisions for that.
    Ms. Sanchez. Okay, great. Thank you.
    I have no further questions. I yield back my time.
    Ms. Lofgren. Thank you.
    The gentlelady yields back.
    We have been joined by the Chairman of the full Committee, 
Mr. Conyers, who advises me he wishes to put his opening 
statement in the record but does have questions.
    [The prepared statement of Mr. Conyers follows:]
Prepared Statement of the Honorable John Conyers, Jr., a Representative 
in Congress from the State of Michigan, and Chairman, Committee on the 
                               Judiciary
    As we heard during the course of last week's two hearings, prior 
immigration reform efforts--especially the 1996 reforms--sought to 
substantially toughen enforcement of our immigration laws, but their 
implementation has been virtually nonexistent. Nowhere is this better 
illustrated than our broken worksite enforcement system.
    After years of utter neglect, the Administration has just recently 
stepped up its worksite enforcement efforts. This increased flurry of 
activity comes at about the same time that the Administration is 
calling for long-term immigration solutions and the normalization of 
undocumented workers.
    These recent large-scale raids at various businesses across the 
Nation, however, reveal massive problems with our current worksite 
enforcement system.
    First, worksite enforcement should not be a used as a tool of 
retaliation--whether in response to formal organizing activities or as 
a way to punish individual employees who demand their rights as 
workers. Such retaliatory actions are an abuse of the legal process. 
Such misuse of our limited enforcement resources is unfair not only to 
the workers and their representatives, but to the federal immigration 
agents who must conduct these enforcement efforts. Worksite enforcement 
should not be used to profit unscrupulous employers.
    Second, employers should be able to rely--in good faith--on an 
employment verification system, such as under the Basic Pilot program. 
Such voluntary participation should be rewarded, not punished. We must 
ensure that businesses that participate in a verification process do 
not instead end up as targets of that very system as a result of their 
participation.
    Third, many of these worksite enforcement actions have caused 
humanitarian crises in their wake. As we know, many undocumented 
workers belong to blended families, often comprised of legitimate 
immigrants and American citizens. In the course of several recent 
worksite enforcement raids, however, many of these families were torn 
apart. Children were abruptly separated from their parents who had no 
means to communicate with their children or to make alternative care 
arrangements. These children were unexpectedly stranded or left to fend 
for themselves while their parents were detained.
    If we are to achieve a controlled, orderly, and fair immigration 
system, we must look at the flaws in the current system. Yes, 
enforcement is important. But so are people and the communities in 
which they live. The enforcement regime can be fixed. It must be fixed.
    We must keep that in mind as we move forward on comprehensive 
immigration reform.

    Ms. Lofgren. Welcome, Mr. Conyers.
    Mr. Conyers. Thank you, Madam Chairman and my dear friend.
    We are happy that this is the third hearing trying to 
examine how we got to where we are from the 1996 reforms.
    But we had enforcement, tough enforcement, but there was no 
implementation. Now we are looking at broken worksite 
enforcement systems.
    And, Mr. Shandley, I just want to try to capsulize your 
testimony about the company, the union, that represents your 
workers and how you have addressed the needs of this vulnerable 
population. What do you suggest employers do to avoid the fix 
that you ended up in, trying to cooperate?
    Mr. Shandley. Well, I don't know if an employer can, that 
has the power--especially an employer like Swift, who has 
complied with the laws of the land. And ultimately we do 
believe that it is immigration reform.
    We focus on the documents, not on the individuals, when we 
hire, and the key is that the quality of the documents and do 
they relatively or reasonably relate to the individual in front 
of us. And the testimony that is at hand would go a long way 
toward helping employers continue to abide by the laws of the 
land.
    Mr. Conyers. I am glad to see that you don't have a chip on 
your shoulder and you don't bring a bad attitude to this 
hearing. We were thinking that you would been put in a pretty 
awkward place through the selective enforcement of these 
worksite requirements.
    Should I sleep better in my bed at night knowing that it 
wasn't as bad as we were hearing that it was?
    Mr. Shandley. No, sir. Absolutely not. The chip is just 
deep inside right now. [Laughter.]
    Mr. Conyers. Well, thank you very much.
    I just wanted to, on the record, commend you and the 
representative of your workers in the collective bargaining 
system for the work you are doing. And we would invite you to 
follow along with us as we try to shape a whole new approach in 
immigration legislation that minimizes what happened to you.
    Because, otherwise, let us face it, what is the point if 
you are going to get busted for trying to comply and comport 
with the law? And that is the spirit that I bring to this 
Committee, and I certainly admire your spirit to come and 
testify before us.
    Thank you, Madam Chairman.
    Mr. Shandley. Put us at the head of the line on 
cooperation.
    Ms. Lofgren. Will do.
    I would like to recognize now the gentlelady from Texas for 
5 minutes.
    Ms. Jackson Lee. Good afternoon.
    Let me thank the Chairwoman and the Chairman of the full 
Committee and the Ranking Member. This is an instructive way of 
creating what I call a pathway to a sensible response to our 
immigration crisis.
    Let me characterize what many have described as government 
officials doing their job and, might I say, that the line 
officers on the ground, the ICE officers on the ground, are to 
be commended for their service. They are obviously being 
instructed on the basis of policy and on the basis of believing 
that they are correcting the crisis in the immigration 
structure in the United States.
    I claim it to be a reign of terror, because it does not 
create order. It does not create adherence to the law. It 
creates chaos and confusion.
    I come from Houston, Texas. Any number of times I will tell 
you of the panic that runs through the community when rumor has 
it that apartment buildings will be raided, that jobsites will 
be raided. Nothing constructive comes out of it. And as you 
have your meatpacking responsibilities, we happen to have an 
energized construction effort.
    Now, I would make the argument that there are wide numbers 
of Americans that can be employed and we know together we are 
going to make an effort to ensure that happens. But we also 
know that there are many times jobs going longing, wanting, and 
there are employers, even though we have been faulty in 
enforcement, there are employers who simply ask, such as my 
construction industry, give me a system, let me follow an 
adequate system and I will comply.
    So we failed on two ends. One, whether or not this Pilot 
program is even effective, one because there are inaccuracies, 
wrong names. It makes it very difficult and we don't know if it 
works, and I understand the witness said hundreds of millions 
of dollars for it to work.
    So I am going to start with Dr. Rosenblum, whose experience 
I think started on the Senate side. Would a more corrected 
system of identification, of who is here, accurate, orderly 
system of documentation, something like we are trying to frame 
as we move forward in comprehensive immigration reform--several 
bills, as you know, have been filed. The Senate is still 
looking. But the concept is to find order where there is 
disorder and chaos.
    Would that begin to build a serious employer verification 
program?
    Mr. Rosenblum. Certainly, knowing who is here, bringing 
people out of the shadows, but also knowing, building a 
database, a reliable database of U.S. Citizens as well, because 
it is the same database, because when an employer is checking 
an employee's status, the employer doesn't know. So the 
database has to have access to both U.S. citizen data and 
immigrant data.
    Ms. Jackson Lee. That is interesting.
    Mr. Rosenblum. And that is absolutely the critical step in 
any kind of employment verification process, is to verify 
somebody's work eligibility. So without that, we can't possibly 
do it properly.
    Ms. Jackson Lee. And any efforts to merge a system that has 
citizens and non-citizens or undocumented would be at least a 
step going in a corrective direction.
    Mr. Rosenblum. There has been a lot of focus on the 
interoperability of the FSA and the DHS databases. Currently, 
what happens is that Basic Pilot basically queries both 
databases. It is a system of systems system. And database 
experts don't really consider that particularly problematic. It 
is not ideal, but that is not really where the problem is.
    The problem is that both of these databases have lots of 
errors in them.
    Ms. Jackson Lee. Clean it up.
    Mr. Rosenblum. Clean them up. And the real challenge is 
that ultimately the only way we can clean them up is to query 
them, is to have people go through the system. So we won't 
really know until we start enrolling people.
    And so what the Senate bill conceived last year was to go 
ahead and start that query process, but to not non-confirm 
people until we are sure that we have got all those errors 
fixed and so to do the query and give people the opportunity to 
clear up their records, but to not fully turn on the 
enforcement until we have done that enrollment through the 
program.
    Ms. Jackson Lee. John Shandley, thank you very much. There 
is only one employer, I believe, sitting here, so we are going 
to put the heavy burden of employers on you.
    Are you coming to this Committee complaining that you don't 
want to be part of a process of verification or are you asking 
for relief in the instance of a corrected list, a list that 
works, error-free list? What are you saying about employer 
compliance with knowing who they are employing?
    Mr. Shandley. Swift wants to be part of the solution, and 
the solution requires a whole systematic fix, both in the 
databases as well as the processes, ultimately down to how does 
the U.S. allow people to come into the U.S. to work.
    But, you know, we are not here to complain. We feel that we 
were unfairly treated, especially for somebody who complies 
with all of the laws. But, you know, that is water under the 
bridge.
    What we do have to do as an employer going forward, we do 
have to find a system of which we have the confidence that the 
government looks at and we look at in the same light, that is 
truly accurate and workable from a legal standpoint.
    Ms. Jackson Lee. Madam Chairperson, I know the time is out, 
but I just simply want to make the statement on the record. For 
some reason, it has been given to the public that those of us 
who believe in comprehensive immigration reform are running 
away from legal structure. Employer verification is one. It is 
a very sensitive issue.
    I would like to be on the record that I am not running away 
from it, but I think that you cannot have employer verification 
that works without a system that documents those who are 
undocumented and a fair system of immigration reform.
    With that, I thank you, and I yield back.
    And I thank the witnesses for their testimony.
    Ms. Lofgren. Thank you very much.
    Thanks to all of the witnesses for their testimony today.
    Without objection, Members will be given 5 legislative days 
to submit any additional written questions to these witnesses 
as well as the first panel. And we ask that witnesses answer 
questions as promptly as they can so that the answers can be 
made part of the record.
    And, without objection, the record will remain open for 5 
legislative days for the submission of any other additional 
material.
    I think this hearing today has helped to illuminate 
numerous issues about the Nation's employment verification and 
worksite enforcement system. It has been very helpful to me, 
and I think it will be helpful to the Congress as we move 
forward.
    Somebody asked me earlier what are we doing with these 
hearings, and I said we have a secret plan to be well-informed 
when we actually take action.
    So to that end, our next hearing is planned for 9:30, 
Thursday morning, in the room downstairs, 2141. That will be 
potential solutions to some of the issues that have been 
outlined here today.
    We are aware that we lost our dear colleague, Juanita 
Millender-McDonald. The funeral arrangements are being made. If 
the funeral for Juanita conflicts, our hearing will be 
postponed to the following week. Otherwise, we will proceed at 
9:30.
    And, again, thank you so very much for taking your time to 
help the Congress on this very important questions.
    This meeting is adjourned.
    [Whereupon, at 12:46 p.m., the Subcommittee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

   Letter from Jonathan R. Scharfen, Deputy Director, United States 
 Citizenship and Immigration Services, Department of Homeland Security 
    to the Honorable John Conyers, Jr., Chairman, Committee on the 
                               Judiciary


    INS Basic Pilot Evaluation Summary Report submitted to the U.S. 
Department of Justice, Immigration and Naturalization Service, prepared 
by the Institute for Survey Research, Temple University, and Westat on 
                            January 29, 2002








































































































 Interim Findings of the Web-Based Basic Pilot Evaluation submitted to 
    the U.S. Department of Homeland Security, prepared by Westat in 
   December 2006, and accompanying letter from Jonathan R. Scharfen, 
 Deputy Director, United States Citizenship and Immigration Services, 
     Department of Homeland Security to the Honorable Zoe Lofgren, 
Chairwoman, Subcommittee on Immigration, Citizenship, Refugees, Border 
                    Security, and International Law
















































































































































































































































 ``Alternative strategies for preventing false negatives and identity 
 theft problems iin an electronic eligibility verification system'' by 
 Marc Rosenblum, Ph.D., Department of Political Science, University of 
                              New Orleans












                                 
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