[Senate Hearing 111-337]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-337
 
ENSURING A LEGAL WORKFORCE: WHAT CHANGES SHOULD BE MADE TO OUR CURRENT 
                    EMPLOYMENT VERIFICATION SYSTEM?

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON IMMIGRATION, REFUGEES
                           AND BORDER SECURITY

                                 of the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 21, 2009

                               __________

                          Serial No. J-111-36

                               __________

         Printed for the use of the Committee on the Judiciary




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                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
HERB KOHL, Wisconsin                 JEFF SESSIONS, Alabama
DIANNE FEINSTEIN, California         ORRIN G. HATCH, Utah
RUSSELL D. FEINGOLD, Wisconsin       CHARLES E. GRASSLEY, Iowa
CHARLES E. SCHUMER, New York         JON KYL, Arizona
RICHARD J. DURBIN, Illinois          LINDSEY GRAHAM, South Carolina
BENJAMIN L. CARDIN, Maryland         JOHN CORNYN, Texas
SHELDON WHITEHOUSE, Rhode Island     TOM COBURN, Oklahoma
AMY KLOBUCHAR, Minnesota
EDWARD E. KAUFMAN, Delaware
ARLEN SPECTER, Pennsylvania
AL FRANKEN, Minnesota
            Bruce A. Cohen, Chief Counsel and Staff Director
                  Matt Miner, Republican Chief Counsel
                                 ------                                

       Subcommittee on Immigration, Refugees and Border Security

                 CHARLES E. SCHUMER, New York, Chairman
PATRICK J. LEAHY, Vermont            JOHN CORNYN, Texas
DIANNE FEINSTEIN, California         CHARLES E. GRASSLEY, Iowa
RICHARD J. DURBIN, Illinois          JON KYL, Arizona
SHELDON WHITEHOUSE, Rhode Island     JEFF SESSIONS, Alabama
AL FRANKEN, Minnesota
               Stephanie Marty, Democratic Chief Counsel
              Matthew L. Johnson, Republican Chief Counsel


                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Cornyn, Hon. John, a U.S. Senator from the State of Texas........     5
Feingold, Hon. Russell D., a U.S. Senator from the State of 
  Wisconsin......................................................     8
    prepared statement...........................................   115
Schumer, Hon. Charles E., a U.S. Senator from the State of New 
  York...........................................................     1
Sessions, Hon. Jeff, a U.S. Senator from the State of Alabama....     7
Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode 
  Island.........................................................     7

                                WITNESS

Aytes, Michael, Acting Director, U.S. Citizenship and Immigration 
  Services, Washington, D.C......................................    12
Gutierrez, Hon. Luis, a Representatives in Congress from the 
  State of Illinois..............................................     9
Melmed, Lynden, former Chief Counsel for USCIS, Berry Appleman & 
  Leiden, LLP, Washington, D.C...................................    16
Ziglar, James, Senior Fellow, Migration Policy Institute, 
  Washington, D.C................................................    14

                         QUESTIONS AND ANSWERS

Responses of Michael Aytes to questions submitted by Senators 
  Feingold and Cornyn............................................    27
Responses of Lynden Melmed to questions submitted by Senator 
  Cornyn.........................................................    39
Responses of James Ziglar to questions submitted by Senator 
  Cornyn.........................................................    42

                       SUBMISSIONS FOR THE RECORD

Amador, Angelo I., Executive Director of Immigration Policy, 
  Chamber of Commerce, Washington, D.C.:
    Statement....................................................    45
    Electronic Employment Verification System Report, April 2, 
      2009.......................................................    61
Aytes, Michael, Acting Director, U.S. Citizenship and Immigration 
  Services, Washington, D.C., statement..........................    88
Calabrese, Christopher, Counsel, Technology & Liberty Project, 
  American Civil Liberties Union, Washington, D.C., statement....    96
Construction Industry, on behalf of American Subcontractors 
  Association, Associated Builders and Contractors, Independent 
  Electrical Contractors Independent Electrical Contractors, 
  Mason Contractors Association of America, National Association 
  of Home Builders, National Roofing Contractors Association, 
  joint statement................................................   108
Gutierrez, Hon. Luis, a Representative in Congress from the State 
  of Illinois, statement.........................................   117
Horn, Stephen, Chief Legal Officer, Dunkin' Brands, Inc., Canton, 
  Massachusetts, statement.......................................   121
Human Resource Initiative on behalf of the Society for Human 
  Resource Management, American Council on International 
  Personnel, Food marketing Institute, HR Policy Association, 
  International Public Management Association for Human 
  Resources, and National Association of Manufacturers, 
  Alexandria, Virginia, statement................................   124
Kephart, Janice L., National Security Policy Director, Center for 
  Immigration Studies, Washington, D.C., statement...............   129
Melmed, Lynden, former Chief Counsel for USCIS, Berry Appleman & 
  Leiden, LLP, Washington, D.C., statement.......................   140
Niotti-Soltesz, John, Chairman & Chief Executive Officer, Zerco 
  Systems International, Inc., Brookfield, Ohio, statement.......   145
Ziglar, James, Senior Fellow, Migration Policy Institute, 
  Washington, D.C., statement....................................   151

                 ADDITIONAL SUBMISSIONS FOR THE RECORD

Submissions for the record not printed due to voluminous nature, 
  previously printed by an agency of the Federal Government, or 
  other criteria determined by the Committee, lists:

Pattinson, Neville, Vice President Government Affairs, Gemalto, 
  Inc., Arlington, Virginia,
    Gemalto e-Government 2.0: Identification, Security and Trust, 
      Exploring European Avenues Report, September 2007
    Gemalto e-Government 2.0: The keys to success, choosing and 
      building the pathway to success; best practices and success 
      factors, June 2009


ENSURING A LEGAL WORKFORCE: WHAT CHANGES SHOULD BE MADE TO OUR CURRENT 
                    EMPLOYMENT VERIFICATION SYSTEM?

                              ----------                              


                         TUESDAY, JULY 21, 2009

                                       U.S. Senate,
                      Subcommittee on Immigration, Refugees
                                       and Border Security,
                                Committee on the Judiciary,
                                                     Washington, DC
    The Committee met, pursuant to notice, at 2:30 p.m., Room 
226, Dirksen Senate Office Building, Hon. Charles E. Schumer, 
Chairman of the Subcommittee, presiding.
    Present: Senators Feingold, Whitehouse, Sessions, and 
Cornyn.

 OPENING STATEMENT OF HON. CHARLES E. SCHUMER, A U.S. SENATOR 
     FROM THE STATE OF NEW YORK, CHAIRMAN, SUBCOMMITTEE ON 
           IMMIGRATION, REFUGEES AND BORDER SECURITY

    Chairman Schumer. Okay. The hearing will come to order.
    We'll allow each of the members here to make an opening 
statement and then we'll turn to Congressman Gutierrez. We're 
honored you've come across the Capitol Building to be here with 
us.
    Well, about a month ago, I articulated principles for 
immigration reform that I believe can pass through Congress 
with bipartisan support. Each of the principles was based on a 
fundamental notion that the American people are both pro-legal 
immigration and anti-illegal immigration. The American people 
will not accept any legalization of those currently in the 
United States illegally unless and until they're convinced that 
the government is very seriously committed to preventing future 
waves of illegal immigration.
    That's why I previously said that any comprehensive 
immigration reform bill must achieve operational control of our 
borders and our ports of entry within 1 year of enactment. But 
in order to completely prevent future waves of illegal 
immigration we must recognize that, no matter what we do on the 
border and at our ports, jobs are what draw illegal immigrants 
to the United States. When an immigrant has the choice between 
making $1 per day in Oaxaca Province or making $40 per day in 
the United States, one cannot expect the immigrant to remain in 
Oaxaca and subject their family to extreme deprivation.
    We can only prevent illegal immigrants from working in the 
United States if we create a tough, fair, and effective 
employment verification system that holds employers accountable 
for knowingly hiring illegal workers. In the past, our 
employment verification laws have placed employers between a 
rock and a hard place. Employers have been required to make 
subjective determinations about identity documents provided by 
employees in order to determine whether the employee is legally 
able to work in the United States.
    Employers who accept all credible documents in good faith 
may still be targeted by ICE for turning a blind eye towards 
illegal immigrants in their workplace. Furthermore, when 
employers have to make on-the-spot subjective decisions about 
who is qualified to work and who is not, they can face 
potential lawsuits from employees who are actually U.S. 
citizens but who were wrongfully profiled as illegal 
immigrants.
    Employment verification systems that require employers to 
make subjective determinations about an employee's identity or 
legal status are bound to fail. So we must instead adopt a 
system that relies upon a non-forgeable identification system 
to completely and accurately identify legal workers. The system 
must be non-forgeable and airtight. This is the only way, in my 
opinion, to stop future waves of illegal immigration.
    Attempts in the past to create employment verification 
systems have been half-hearted and flawed. The current E-Verify 
system is an example of a half-hearted and flawed system. Under 
the current E-Verify system, an employer merely verifies 
whether the name, date of birth, Social Security number, and 
citizenship status given by a potential employee match the 
exact same information contained in the Social Security 
Administration's data base, along with other government data 
bases.
    The E-Verify system does not prevent an illegal immigrant 
from using the name, accurate Social Security number, and 
address of a U.S. citizen to get a job. For instance, if an 
illegal immigrant wants to say that he is John Smith, who is 
actually a U.S. citizen from Buffalo, and he knows John Smith's 
Social Security number and he can get a fake ID with John 
Smith's address--all very easily accomplished--nothing about E-
Verify will stop that illegal immigrant from getting a job.
    In addition, E-Verify does not prevent U.S. citizens from 
voluntarily providing their name, Social Security number, and 
address to their illegal immigrant friends, families, or 
employees in order to game the system. That is why it's not 
surprising that many of the companies which have been raided by 
ICE in the last few years for employing illegal immigrants have 
actually used the E-Verify system.
    Simply put, it's not difficult for illegal workers to scam 
the system by providing the personal information of a legal 
worker. The only way the American people will have faith that 
our comprehensive immigration reform bill will stop illegal 
workers from obtaining jobs is if we implement an employment 
verification system that is tough, fair, easy to use, and 
effective and which relies on a non-forgeable biometric 
identifier.
    A truly effective employment verification system must 
possess the following 10 characteristics in order to prevent 
employers from hiring illegal workers and to be accepted by the 
American public:
    First, any new system must rely upon employers to check the 
immigration status of their employees against a government 
verification system. This is the simplest and most effective 
way to stop the flow of future illegal immigrants. Any system 
which relies upon employers to check the immigration status of 
their employees, however, must give employers clear guidance, 
rapid response, and must be inexpensive and easy to use.
    Second, the system must authenticate the employee's 
identity by using a specific and unique biometric identifier. 
This identifier could be a fingerprint, an enhanced biometric 
picture, or other mechanism. If fraud is rampant or even 
permissible, the system can't work and will necessarily fail. 
No employment verification system will be worthwhile if it 
cannot stop illegal workers from obtaining employment simply by 
presenting the Social Security number or address of a legal 
worker, and that's the main flaw of the E-Verify system.
    Proposals to give legal workers PIN numbers or other 
security codes that they can use to authenticate their identity 
with the employer will similarly not stop illegal workers from 
gaining such PIN numbers and providing this information to 
their employer in order to obtain employment, but it's 
virtually impossible for an illegal worker to forge a 
fingerprint or an enhanced biometric picture.
    That's why it's critical that any future employment 
verification system require employees to prove their identity 
through their unique biometric features rather than by 
requiring workers to provide Social Security numbers or PIN 
numbers to an employer, who then enters the information into 
the system. It's the only effective way to combat future waves 
of illegal immigration.
    Third, the system must apply to all people, citizens and 
non-citizens alike. The only way to prevent fraud is to make 
sure that everyone is uniformly in the system. By creating a 
uniform system, illegal workers will no longer be able to use 
the name and Social Security number of U.S. citizens in order 
to obtain a job.
    Everyone will verify their identity and their immigration 
status in the same way and there will be no ability for people 
claiming to be U.S. citizens to go through a system that 
requires less proof of identity than a non-U.S. citizen. 
Illegal workers have used this disparity for years in order to 
obtain employment.
    In addition, a uniform system will have the advantage of 
removing potential invidious discrimination that immigrant 
workers currently face from employers who must make subjective 
determinations about their employees' citizenship. And, either 
by design or not, all too often the way the employee looks, 
their last name, is used by the employer to separate legal from 
illegal, and that's a very bad and un-American way to do 
things.
    Fourth, the system must be easy to use for both employers 
and employees, must not be expensive, and must quickly give an 
employer an answer as to whether the employee can be legally 
hired. All businesses, but especially small businesses, should 
be able to implement this new system of employment verification 
with minimal costs of compliance. No business should be 
financially or logistically burdened by a new employment 
verification system. The system should not impede employers 
from hiring legal workers or prevent legal workers from 
obtaining employment.
    Fifth, the system should exonerate employers of any and all 
potential liability if they use the system and the system says 
that a worker is legal. A clear advantage of a biometric-based 
system is it would tell employers instantly and definitively 
whether their employee has legal status. If the system does 
tell the employer that his employee is authorized to work, the 
employer should never have to pay any fines if that employee 
turns out to be unauthorized.
    Sixth, on the other hand, the system should severely punish 
employers who fail to use the system or who knowingly hire 
illegal workers after using the system by levying stiff fines 
for initial offenses, unpalatable fines for secondary offenses, 
and prison sentences for repeat offenders. Employers should 
know that if they fail to use the system or use the system and 
hire a known unauthorized employee, they'll be audited and will 
be caught and severely punished.
    Seventh, the system should not require American workers to 
pay any money to the government in order to obtain employment. 
Although a new employment verification system will have costs, 
these costs can be covered by fees and fines charged to those 
seeking legalization and through fees charged to future 
immigrants, who will gladly pay these fees to live and work in 
the U.S. By creating a uniform employment verification system, 
the fees that immigrants currently pay for work permits can be 
used to pay for the creation and implementation of the new 
system that future immigrants and citizens will jointly use.
    Eighth, significant and substantial protections must exist 
to ensure the system does not prevent Americans from working. 
Among other things, workers must be permitted to legally keep 
their jobs while correcting any potential problems in the 
system, and employers will be prohibited from firing any 
employees while they're lawfully trying to rectify their status 
with any new system. As a corollary, employers must not be 
punished for allowing employees to work while their employees 
are legally attempting to correct any technical problems that 
prevent the employee from being authorized.
    Ninth, any new biometric-based employment system must have 
extensive checks at the beginning of the system to prevent 
illegal aliens from creating a false identity to enter into the 
new data base. And, as I mentioned before, we need to do this 
where the entity administering the new employment verification 
system will have access to public records/government data bases 
to ensure that the person seeking to enter the new employment 
verification system is, in fact, the person they claim to be 
and the person has legal status.
    Finally, tenth, the system must have the strictest privacy 
and civil liberty protections and must only be used for 
employment. The American people must have confidence the only 
goal of an employment verification system is to prevent future 
waves of illegal immigration, which will raise American wages 
and working conditions. The government should be prevented from 
using any employment verification data for any other purpose, 
and strict fines and prison sentences should be levied to all 
persons who use the system for any purpose not permitted by 
law.
    All of these characteristics are based upon the fundamental 
principal that the goal of an employment verification system 
must be to change the calculation currently made by employers 
in order to make it extremely unattractive for employers to 
hire illegal workers. A system with these 10 characteristics 
will be easier to use, less discriminatory, tougher, and more 
effective than the current E-Verify. A biometric system will be 
supported by business groups because it will be easier to use 
than the current system and will provide employers with clear 
safe harbors.
    A biometric-based system will also be supported by labor 
and immigrant groups because it will take away the employer's 
ability to make subjective determination about an employee's 
legal status simply by looking at documents and determining 
their validity, which has previously invited invidious 
discrimination against immigrants and retaliation against union 
organizers.
    In conclusion, we have several distinguished witnesses here 
to discuss how the current E-Verify system operates, the ways 
in which a new system can be created that adds a biometric 
identifier, and I look forward with great interest to their 
testimony.
    I now want to recognize the distinguished Ranking Member, 
Senator Cornyn, for an opening statement.

STATEMENT OF HON. JOHN CORNYN, A U.S. SENATOR FROM THE STATE OF 
                             TEXAS

    Senator Cornyn. Thank you, Mr. Chairman.
    I want to express my appreciation to all of the panelists 
who are joining us today. Congressman Gutierrez, it's good to 
have you here.
    I also want to acknowledge Lynden Melmed, who's worked 
closely with my office in the past, and the subcommittee as 
well, on these issues and now is in private law practice. I 
look forward to hearing the views of all of our panelists with 
regard to how we can improve the E-Verify system.
    I agree with Senator Schumer, the E-Verify system is broken 
and we must act to fix it. In 1986, Congress clearly recognized 
that employers should verify that the workers they hire are 
eligible for employment or face strong sanctions if they 
wilfully evade our labor laws, but Congress did not provide the 
tools to employers needed to carry out those mandates.
    So today, 20 years later, the problem remains: our laws are 
not enforced, our employers are frustrated, and the people are 
cynical of the government's will to act. We have, however, made 
some improvements in enforcement and employment verification 
over the past few years. The Department of Homeland Security's 
E-Verify program has great promise and I think is headed in the 
right direction, but the program needs expanded legal 
authorities, additional resources, and other improvements 
before we can begin to hope that it will meet its aspirations.
    Like many of my colleagues, I support an effective 
employment verification system. An effective system must be 
reliable, accurate, and not unduly burdensome to small 
businesses. An effective system must include a secure, tamper-
proof card that is easily verifiable and gives employers surety 
when it comes to an individual's identity and authorization to 
work in the United States.
    I see three challenges. Most everyone agrees we need to 
improve our employment verification system, but the first 
challenge relates to the mechanics of employment verification. 
In other words, how will employment verification work in 
practice? We must ensure that any process will be user-friendly 
to both the employer and the employee.
    Would the individual simply swipe a card through a card-
reader or would they have to get online somehow? What would a 
secure card look like, and what types of biometric data would 
be available on it? Would the employer and the employee get a 
real-time response in a matter of seconds or would they have to 
wait days for an answer? Would the employee have a simple 
process to correct any inaccuracies in the agency data bases? 
An effective system must get all these questions right to earn 
the confidence of both workers and employers.
    The second challenge relates to costs. How much will it 
cost taxpayers to get an effective E-Verify program up and 
running? Last year, U.S. Citizen and Immigration Services 
estimated a mandatory E-Verify program could cost about $765 
million over 4 years, and that's only if it covers new hires. 
To cover both new hires and current hires, that number rises to 
$838 million. The Social Security Administration also estimated 
that a mandatory E-Verify program would cost about $281 million 
over 5 years and require 700 new employees. These costs are 
significant and highlight that if we do not resource our E-
Verify program adequately, our workers and employers will 
become frustrated and they'll never buy into the system.
    On the other hand, if we give the agencies the resources 
they need in order to get the job done right, that can help 
turn around public perception, and E-Verify can help restore 
lost confidence in government when it comes to enforcing our 
immigration laws.
    Our third challenge relates to identity theft. In other 
words, how can we improve information sharing among all levels 
of government to deter identity theft before it happens and 
prosecute the bad actors when deterrence doesn't work.
    Technology is clearly the key. We must create 
interconnectivity between the data bases maintained by various 
agencies, including the State Department, the Social Security 
Administration, the Internal Revenue Service, and the Bureaus 
of Vital Statistics in every State. And as we improve this 
connectivity, we must ensure that we minimize errors and 
inaccuracies and balance the lawful disclosure of information 
with the individual's right to privacy.
    So, Mr. Chairman, I want to express my gratitude to you for 
focusing our discussion on the important component of 
employment verification in solving our broken immigration 
system. We have got to get this effort right in order to have a 
crack at any larger reform effort. The American public will not 
bestow their faith upon us if we pass immigration reform 
without an effective, accurate, and enforceable employment 
verification program.
    I look forward to hearing the witnesses' perspectives on 
this issue and the concrete solutions that I know each of you 
will bring to the challenges that confront us.
    Thank you, Mr. Chairman.
    Chairman Schumer. Senator Whitehouse.

 STATEMENT OF HON. SHELDON WHITEHOUSE, A U.S. SENATOR FROM THE 
                     STATE OF RHODE ISLAND

    Senator Whitehouse. Thank you, Mr. Chairman. I don't have 
an opening statement. I just, as somebody who was witness to 
the acrid tone and the ugly thoughts and words that accompanied 
the melt-down of our recent immigration reform effort, I just 
want to observe that it takes a bold legislator to want to go 
back into that blasted wasteland, and I'm delighted that you 
are doing it. I am proud that you are doing it.
    I applaud the bipartisan tone that I have detected. There 
was a lot of overlap between the statements of the Chairman and 
the Ranking Member, and I think this is important work to get 
done. I also understand that one of our witnesses, the 
Republican witness, is a former staffer to Senator Cornyn, and 
also a graduate of the University of Virginia Law School. So, 
things are just getting better and better, and I really 
appreciate what you two are doing.
    Chairman Schumer. Thank you for those nice words, Senator 
Whitehouse.
    Senator Sessions.

  STATEMENT OF HON. JEFF SESSIONS, A U.S. SENATOR FROM ALABAMA

    Senator Sessions. Thank you, Chairman Schumer. It is, 
indeed, a challenge. But one thing I'm absolutely convinced of, 
that we can create a lawful immigration system that we can be 
proud of. After initially thinking the second proposal that 
came forward last year was one that might be effective, I 
studied it and came to believe it was not, and the American 
people agreed with that.
    So I think you're raising some important questions. E-
Verify is not strong enough. I think it's a good system. I'm 
baffled that people would not want to use it or that would 
oppose it as it is, because it's free and quick and works in a 
number of instances. I agree with you, a more comprehensive 
identification matter is important, Mr. Chairman.
    I know Senator Kyl worked on that in-depth. He was the 
master of all the details of that, and I shared that view. But 
it's the kind of thing that's not easy. We've got people on the 
left that don't want a card, people on the right that don't 
want a card, then you've got people that really like the 
illegal immigration occurring and they don't want a card. So 
it's not a little, easy thing to do, but your leadership might 
make a difference. So let's see what we can't do to go forward 
and develop a system that can actually work. But count me a 
skeptic. I've got to be, show me how this is going to actually 
work. I think that's where the American people are, but maybe 
we can do some good this time.
    Thank you.
    Chairman Schumer. Thank you. The only point I'd make here 
is, I believe we need a biometric. It could be a card. That's 
one of the things we're looking at. It doesn't necessarily have 
to be a card.
    Senator Feingold.

STATEMENT OF HON. RUSS FEINGOLD, A U.S. SENATOR FROM THE STATE 
                          OF WISCONSIN

    Senator Feingold. Thank you, Mr. Chairman. I'm glad that 
the Committee is taking up this issue. I want to say, too, how 
much I appreciate that you are working tirelessly to draw 
attention to a number of changes we need to make the current 
employment verification system, E-Verify, a better system, and 
I applaud your efforts.
    I've been concerned about recent efforts to make E-Verify 
mandatory and to expand its use to federal contractors without 
first fixing problems with the system. Employment verification 
is a very promising idea and it has tremendous potential to 
ensure that U.S. jobs only go to U.S. citizens and those who 
are legally authorized to work in the U.S., but we need to get 
it right before we expand our reliance on electronic 
verification.
    Our current system, E-Verify, remains riddled with errors 
and other inaccuracies. According to a 2006 report of the 
Social Security Administration's Inspector General, the data 
set on which E-Verify relied contains errors in 17.8 million 
records, affecting 12.7 million U.S. citizens. If E-Verify 
becomes mandatory before these errors are fixed, millions of 
Americans could be misidentified as unauthorized to work, and I 
think that is an unacceptable result.
    I understand that U.S. Citizenship and Immigration Services 
has been working to improve the accuracy of E-Verify, but we 
still have a long way to go. According to recent reports, if E-
Verify becomes mandatory for all U.S. employers, roughly 
600,000 workers, most of whom are U.S. citizens, would be 
deemed ineligible to work, and that is a very large number. 
It's equal to the entire population of the largest city in my 
State, Milwaukee. I recognize that no employment verification 
system will be completely error-free, but that kind of error 
rate, in my opinion, makes this system unworkable.
    In 2008, Intel Corporation, a very large employer, reported 
that 12 percent of the workers that they ran through E-Verify 
came up as ``tentatively non-confirmed.'' All of these workers 
were eventually cleared as work-authorized, but Intel had to 
invest significant time and money to correct these errors, 
which is something that many smaller businesses would be 
unwilling or unable to do for their staff.
    I am particularly concerned about these error reports 
because almost half of all businesses that use E-Verify report 
that they use E-Verify to pre-screen job applicants. This means 
that employers are making hiring decisions based on erroneous 
information and they are never notifying applicants of this 
information so the applicants can contest and correct it.
    Any permanent mandatory employment verification system must 
contain sufficient procedural protections for workers who are 
initially deemed unauthorized to work. Workers must be given a 
simple, straightforward means to appeal any data errors. 
Employer verification proposals should also contain sufficient 
provisions to ensure that any personally identifiable 
information that is collected by the government is kept 
completely confidential. We must be very careful to establish 
safe, secure systems that will protect the electronic 
transmission of any personal information.
    Mr. Chairman, I strongly believe that we need to secure our 
borders, we need to fix our broken immigration laws, and we 
need to deal with the fact that there are millions of 
undocumented individuals in this country, and we need to do it 
now. But we also need to be very conscious that thousands of 
American citizens and legal immigrants could lose their jobs if 
we mandate the use of an electronic verification system before 
these errors are fixed. This would cause massive disruption, 
not just in the lives of these workers, but also to the already 
fragile U.S. economy.
    I thank you, Mr. Chairman, for the chance to make those 
remarks.
    Chairman Schumer. Well, I thank you for your thoughtful 
remarks. Some of the principles we enunciated would, in a broad 
brush, address those. Obviously the devil is in the details in 
getting them all done, but I agree with your comments, the 
thrust of your comments, completely.
    It's now our honor--and he's waited patiently--to introduce 
the Honorable Luis Gutierrez. He represents the Illinois Fourth 
District. He's done that with great distinction for eight 
terms, 16 years. We served in the House together, I'm honored 
to say, and were friends there. Until this year when I left the 
Senate gym, we spent a lot of time in the House gym talking 
about things together.
    Luis Gutierrez is the first Latino to be elected to 
Congress from the Middle West. He serves as chair of the 
Democratic Caucus Immigration Task Force and as chair of the 
Congressional Hispanic Caucus Immigration Task Force. He was 
named to the Judiciary Committee in the 110th Congress, and 
he's remained there, serving on the Immigration Subcommittee.
    He chairs the Financial Services Subcommittee on Financial 
Institutions and Consumer Credit. Along with Congressman Jeff 
Flake of Arizona, he co-sponsored bipartisan immigration reform 
in 2007 known as the STRIVE Act, which called for, among other 
things, a biometric-based system of employment verification. I 
just want to say this: Congressman Gutierrez has traveled the 
country--he's a national figure--in his passion that we do 
immigration reform. I don't think there's a member of the 
Congress who cares more about it or has spent more time about 
it than Congressman Gutierrez, and we really appreciate that.
    Your entire statement will be read into the record, and you 
may proceed.

 STATEMENT OF HON. LUIS GUTIERREZ, A U.S. REPRESENTATIVE FROM 
                       THE STATE ILLINOIS

    Representative Gutierrez. Thank you. Chairman Schumer, 
Ranking Member Cornyn, and members of the subcommittee, thank 
you for this opportunity to testify on employment verification.
    I first want to commend you, Mr. Chairman, for holding this 
hearing and for your steadfast leadership on this issue, and 
for what I consider very creative approaches to developing 
employment verification systems as a means to reduce future 
waves of illegal immigration.
    I want to share with you that it's not just my years of 
work on this issue that brings me here to testify before you 
today, it is the countless men and women I have met across this 
country who have been exploited in the absence of a system that 
holds employers accountable for their actions.
    It is because of the mothers who toil in sweat shops in New 
York and Los Angeles to feed their children. It is because of 
16-year-old boys who I met in Iowa who work 17-hour shifts six 
days a week without overtime on the kill floor of a meat-
packing plant. It is because of U.S. workers who have tried, 
time and time again, American citizens, to unionize their shop 
and failed to do so because there is the availability of an 
exploitable workforce. It is for the women who face demands of 
sex in exchange for decent wages, decent hours, and decent 
working conditions, and it's for all those small business 
owners who have been unable to get ahead of the competition 
because he or she plays by the rules, when corrupt employers 
down the street choose not to.
    As you know, Mr. Chairman, the obligation to protect good 
workers and decent employers are the driving force behind the 
need not only to overhaul our employment verification system, 
but also to initiate real, lasting, comprehensive immigration 
reform. In fact, any employment verification system must be 
part of comprehensive immigration reform.
    To ensure a legal workforce, the system must implement 
smarter border security, establish a program to fill true gaps 
in our workforce, keep families together, and require--
require--the estimated 12 million unauthorized individuals 
currently living and working in the U.S. to register and fully 
integrate into our society.
    I know some in Congress believe that a mandatory employment 
verification system alone would fix our broken immigration 
system by encouraging undocumented immigrants to self-deport. 
However, like it or not, we've come to depend on the 
contribution of these hard-working immigrants and they have 
become an integral part of our families, of our communities, 
and of our workforce.
    Moreover, it would arbitrarily separate families and punish 
4 million U.S. citizen children who have undocumented parents. 
I assure you that the separation of families is not needed to 
build support for comprehensive immigration reform; polls have 
shown again and again the vast majority of Americans already 
do. However, the American people do want Washington to lead and 
develop workable solutions within comprehensive immigration 
reform that will end illegal immigration as we know it.
    So let me be clear: the end of illegal immigration is only 
possible through effective employment verification as a part of 
comprehensive immigration reform. Effective employment 
verification must maintain and provide accurate data; be rolled 
out prudently under a realistic time line as its accuracy and 
privacy protections are established; allow workers to review 
and correct their own employment eligibility record and have 
access to administrative and judicial review; protect 
individuals from discrimination; be paired with robust 
oversight and enforcement, including random audits with 
employers.
    With regard to a biometric system that Chairman Schumer is 
currently exploring, I regard the following as advantages over 
the current system we have. It would provide workers greater 
power over their employment records. It would prevent 
prescreening and other misuses of the system by requiring 
employee consent. The swipe of a card, along with a 
fingerprint, would prevent individuals from inventing an 
identity and assuming another identity to get a job.
    As Congress examines biometrics as part of a new and better 
system, I want to encourage you to ignore the naysayers, those 
who claim it cannot be done. Don't listen to them: they do not 
speak for real change or workable solutions or an end to 
illegal immigration as we know it. Rather, they want to produce 
gridlock, prevent action, and protect the status quo.
    Let me repeat: incorporating an effective employment 
verification system is the only hope for truly ending illegal 
immigration. We can do this, and we must do this, this year. In 
the end, this is not a question of whether or not we can craft 
an effective system, rather, it is a question of political 
will.
    I am grateful to all of you for allowing me to come and 
testify here this afternoon. I want to say to my dear friend 
Chairman Schumer, millions of people are counting on you and 
relying on you and your leadership and your commitment to 
comprehensive immigration reform, and I hope that the bond that 
Senator Kennedy and Senator McCain were able to have in the 
past Congresses is the same kind of bond that you and Senator 
Cornyn are going to be able to develop on this very important 
issue.
    Thank you so much.
    [The prepared statement of Representative Gutierrez appears 
as a submission for the record.]
    Chairman Schumer. Well, I want to thank you, Luis 
Gutierrez. You are an inspiration in terms of all you have 
done, and your passion, but also your intelligence and your 
practicality, realizing how we can get this done. There are 
lots of people on both sides of the aisle who would like to 
sort of make a lot of speeches, but are unwilling to put their 
nose to the grindstone and get it done. If we listen to your 
remarks, Senator Cornyn's remarks, my remarks, you can see 
that, yes, we can. Yes, we can do this.
    I know you have another place to go. Well, we all did our 
opening statements. I want to thank you very much for being 
here.
    Representative Gutierrez. Thank you so much. Thank you so 
much, Senators.
    Chairman Schumer. Okay.
    We'll now begin our second panel. Let me introduce them as 
they come forward. Okay. While people are getting seated, I'm 
going to do the introductions so we can proceed.
    On the left side--on our left, your right, audience--of the 
panel is Michael Aytes. He serves as Acting Director of the 
U.S. Citizenship and Immigration Services, USCIS, within the 
Department of Homeland Security, DHS. He was named to this 
position in April 2008. Prior to his appointment, Mr. Aytes 
served as Associate Director of U.S. CIS Domestic Operations, 
where he was responsible for processing all immigration 
benefits and services within the U.S. Mr. Aytes has served in a 
variety of positions, with the former INS service, beginning 
his Federal career at INS in 1977. The Committee thanks him for 
taking the time to testify and for his years of service to this 
great country.
    James Ziglar is Senior Fellow at the Migration Policy 
Institute. In addition, he serves as senior counsel at the 
Washington law firm, VanNess Feldman. Mr. Ziglar retired in 
2008 as president and chief executive officer of Crossmatch 
Technologies, a leading provider of biometric technologies to 
the Federal Government. Before joining Crossmatch in August 
2005, Mr. Ziglar was managing director and chief business 
strategist at UBS Financial Services.
    From August 2001 until his retirement from the Federal 
service in December of 2002, Mr. Ziglar served the last 
Commissioner of the Immigration and Naturalization Service. In 
addition to his position as Commissioner of the INS, Mr. Ziglar 
served as sergeant-at-arms of the U.S. Senate--we're proud to 
see an alumnus do so well--and as Assistant Secretary of 
Interior for Water and Science.
    The final witness. Do you want to introduce the final 
witness, Senator Cornyn? Or you can read my statement.
    Senator Cornyn. Your statement is an excellent statement.
    Chairman Schumer. We'll just ask unanimous consent my 
statement be put in the record, and Senator Cornyn do the 
introductions of Lynden Melmed.
    [The prepared statement of Senator Schumer appears as a 
submission for the record.]
    Senator Cornyn. Lynden Melmed was assigned to my office as 
a detailee from the Department of Homeland Security. Somebody, 
a rarity, I found, during the debates in the Senate on 
immigration law, who actually knows immigration law and he was 
an invaluable resource. I'm glad to have him here today to 
share some insights on the E-Verify program.
    Chairman Schumer. Great.
    Senator Cornyn. Thanks.
    Chairman Schumer. Thank you, Mr. Melmed, for being here.
    Everyone, all three witnesses' entire statement will be 
read into the record. We're going to ask you to try to limit 
your presentation here to 5 minutes, and then we'll go to 
questions.
    Mr. Aytes.

 STATEMENT OF MICHAEL AYTES, ACTING DIRECTOR, U.S. CITIZENSHIP 
            AND IMMIGRATION SERVICES, WASHINGTON, DC

    Mr. Aytes. Chairman Schumer, Ranking Member Cornyn, Members 
of the Subcommittee, I'm grateful for the opportunity to appear 
before you to discuss our shared vision and goal of effective 
employment eligibility verification.
    First, we appreciate the Senate support for the President's 
budget request to extend E-Verify for three more years. As you 
can imagine, uncertainty with respect to extension challenges 
USCIS and users of the system.
    E-Verify has grown exponentially over the past several 
years. Over 137,000 employers are now enrolled, representing 
over 517,000 hiring locations. It is no longer a niche system. 
Today, over 14 percent of all non-agricultural new hires in the 
United States are run through E-Verify.
    E-Verify is sometimes described as a tool to enforce the 
immigration laws, and it is. Others describe it as a tool for 
employers committed to maintaining a legal workforce, and it is 
also that. But we recognize the system must also effectively 
serve employers and workers by giving accurate and quick 
verification. Our goal is to continue to improve the system's 
ability to instantly verify new hires, improve the accuracy of 
our data, and strengthen employer training, monitoring, and 
compliance functions. At the same time, we want to protect 
workers' rights.
    Complaints about the system largely fall into three 
categories: (1) that it's inaccurate and results in erroneous 
mismatches; (2) that it doesn't, as many of you have mentioned, 
effectively combat identity theft and document fraud; (3) that 
the system can result in discrimination.
    I'd like to discuss each briefly in turn. Today, 96.9 
percent of queries result in an automatic confirmation: the 
worker is authorized to work. Of the remainder, less than 3.1 
percent, about 1 in 10 is ultimately found to be work-
authorized.
    We have worked hard to reduce the initial non-confirmation 
rate for workers who are authorized to work. While we've made 
significant success in this area, we will continue to work on 
this problem but we must also recognize that not every mismatch 
in any system--today's system or a future system--can simply be 
prevented by adding data.
    For example, if someone changes their name today through a 
marriage or divorce and updates their driver's license but does 
not update their Social Security record, it will result in a 
mismatch. Any form of verification must recognize the need for 
data changes such as result from marriage or divorce.
    E-Verify was not initially designed to directly combat 
identity theft, I grant you. It relies on the Form I-9 process 
in which the worker must present an identity document, such as 
a driver's license, green card, or passport. But identity theft 
and document fraud are growing issues, not only in the 
immigration context. Last year, as a result, we added a new 
photo screening tool for DHS documents in order to combat 
document and identity fraud.
    In the future, we plan to add U.S. passport photos and 
would like to be able to verify individual driver's license 
information because that does have a biometric, a photo, all to 
streamline the process and let employers quickly verify that 
the document presented matches what was actually issued. We are 
also in the final stages of developing an initiative to let 
individuals who have been victims of identity theft lock and 
unlock their Social Security number for the purpose of E-
Verify.
    As I mentioned, about 9 in 10 initial non-confirmations 
become final, most without the worker contesting the initial 
findings. Some highlight the potential for discrimination in 
that number, suggesting that some of these workers may be work-
authorized but simply do not know they can contest the finding.
    Any system, I grant you, even with safeguards and 
compliance monitoring such as E-Verify, can be used 
incorrectly. However, take that number in context. Some studies 
suggest that about 5 percent of the workforce in the United 
States is not authorized to work in this country. That's 
actually higher than the current E-Verify final non-
confirmation rate of 2.8 percent.
    But the system, any system, must protect the rights of 
workers. Any discrimination reduces the effectiveness of the 
program. Thus, we have expanded our information to workers and 
are growing a new monitoring and compliance branch to ensure 
that employers use E-Verify correctly, including ensuring that 
workers have access to information about redress procedures.
    We have also established a new process that lets workers 
call USCIS directly to address certain mismatches as an 
alternative to visiting a Social Security Administration 
office. We are also working to refer instances of fraud, 
discrimination, misuse, and illegal or unauthorized use of the 
system to appropriate enforcement authorities.
    In summary, the program has made great strides in becoming 
a fast, easy, and more accurate tool to help employers and 
workers. It can go farther, but today it works together with 
the Form I-9 requirement that requires an employer show an 
identity document to an employer. The Administration is 
dedicated to continuing to work to improve E-Verify to address 
issues of usability, fraud, and discrimination.
    Thank you for the opportunity to testify. Again, we 
appreciate this Subcommittee's continued support of the E-
Verify system.
    Chairman Schumer. Thank you, Mr. Aytes.
    [The prepared statement of Mr. Aytes appears as a 
submission for the record.]
    Chairman Schumer. Before Mr. Ziglar proceeds, I would note 
that all three of our witnesses, when they were in government, 
were appointed by Republican people, either Republican 
Presidents or Senators. So there!
    [Laughter.]
    Senator Cornyn. They must know what they're talking about, 
Mr. Chairman.
    Chairman Schumer. Mr. Ziglar.

  STATEMENT OF JAMES ZIGLAR, SENIOR FELLOW, MIGRATION POLICY 
                   INSTITUTE, WASHINGTON, DC

    Mr. Ziglar. Mr. Chairman, Ranking Member Cornyn, and 
Senator Sessions, it is an honor to be here today to 
participate in the E-Verify hearing. If you will allow me a 
point of personal privilege--my wife said I shouldn't mention 
this, but I have to--it was 45 years ago this week that I 
showed up in Washington to work for the Judiciary Committee. I 
have to tell you, this room has not changed much at all, except 
that they used to have an air conditioning unit in the corner. 
For 7 years, I sat back there in the back row doing what a lot 
of you folks are doing. So, it is a particular honor and 
pleasure to be here this particular week.
    Chairman Schumer. Who did you first work for?
    Mr. Ziglar. Senator Eastland, from Mississippi.
    Chairman Schumer. That undoes my theory, doesn't it? Sort 
of. Not quite. Just somewhat.
    Mr. Ziglar. My key job at the time, Senator, was to make 
sure that Senator Eastland had cigars and that Senator Dirksen 
had cigarettes during the hearings. You could smoke in the room 
at the time.
    It is a real pleasure to be here, as I said. I have 
submitted my written testimony that has two documents that I 
would also like to have put into the record, if I could. One of 
them is an op-ed that I co-authorized with Doris Meisner, the 
Commissioner of INS under President Clinton, in the New York 
Times. The second one is a report that was issued yesterday by 
the Migration Policy Institute that relates to the E-Verify 
system and has some recommendations in it.
    [The prepared statement of Mr. Ziglar and additional 
information appear as a submission for the record.]
    Mr. Ziglar. Mr. Chairman, the E-Verify program and the 
policies that underlie that program are critical to the 
effective enforcement of our immigration laws, and that is 
going to be particularly true if we end up having comprehensive 
immigration reform.
    Going back to 1996, the Congress recognized the need to 
implement an electronic employment verification system for the 
purpose of enforcing the law that prohibits the hiring of 
unauthorized workers by American businesses. The 1996 Illegal 
Immigration and Immigrant Responsibility Act also provided for 
three test pilot programs to evaluate the effectiveness of an 
electronic employment verification system. Those three programs 
ended up and culminated into something called the basic pilot, 
which is now, as we know, called the E-Verify system or E-
Verify program.
    The USCIS has done a great job, in my opinion, of 
implementing the E-Verify program and they have dramatically 
improved its performance since it was first launched. However, 
the program suffers from one very important gap in its design, 
and that is that it cannot authenticate the identity of 
individuals presenting themselves for employment, as the 
Chairman has very forcefully pointed out.
    The program has been effective in detecting certain 
fraudulent documents, but when presented with legitimate 
information that has been stolen or is otherwise being used for 
fraudulent purposes, it simply cannot readily detect that 
situation.
    Consequently, identity theft and fraud are actually being 
encouraged by this gap in the system. The problem is that the 
system is based on verifying biographical data and Social 
Security numbers and does not authenticate the identity of the 
person presenting such information.
    This system, just like the I-9 system that it supplements, 
also puts employers in the untenable position of having to 
exercise their discretion in verifying information and 
documents presented to them. This can lead to unintentional 
mistakes, or sometimes encourages less than lawful and ethical 
behavior.
    There is a way to deal with this problem of being unable to 
authenticate a person's true identity. Biometrics have been 
used for many years to identify and verify the identity of 
individuals, primarily in the law enforcement context. However, 
in the past decade, biometrics have been increasingly deployed 
in the civilian sector to authenticate and verify personal 
identity.
    Numerous industries now require employees to provide a 
biometric, as well as biographic, data for purposes of a 
background check and for identification. Perhaps the best 
example is the transportation industry, which has developed the 
TWIC card, which is the Transportation Workers Identification 
Card. This card has a biometric imbedded in it and it is, and 
will be, used for verification and access control.
    Other industries that are adopting or have adopted 
biometrics for identification and verification purposes include 
financial services--which, Mr. Chairman, you know probably 
better than anybody, coming from New York, that if you're in 
the financial services industry as I once was, years ago I had 
to give a biometric and have a background check--health care, 
education, and a number of others. Indeed, the U.S. Government, 
under HS PD12, requires a biometric, a background check, and a 
card for employees and contractors.
    Mr. Chairman, if we're to have comprehensive immigration 
reform it is critical that we have a system that is effective 
in dealing with the problem of unauthorized workers. The time 
is right to address the gap in the E-Verify system in the 
context of immigration reform. Biometrics technology continues 
to improve constantly, but the state of the technology today is 
more than adequate to address the problems presented in the E-
Verify program.
    As I mentioned in my written statement, I believe that it 
would border on the irresponsible not to undertake a thorough 
analysis of the challenges and costs of adding a biometric 
module to the E-Verify program. I commend your attention to the 
report issued by the Migration Policy Institute yesterday. It 
suggests three pilot programs that would provide a road map for 
USCIS in expanding the E-Verify system to deal with the problem 
of authentication of identity.
    Mr. Chairman, there is a lot more that can be said about 
this issue, but my time has expired. I look forward to your 
questions.
    Chairman Schumer. Mr. Melmed?

  STATEMENT OF LYNDEN MELMED, FORMER CHIEF COUNSEL FOR USCIS, 
          BERRY APPLEMAN & LEIDEN, LLP WASHINGTON, DC

    Mr. Melmed. Chairman Schumer, Ranking Member Cornyn, 
Senator Sessions, thank you for the opportunity to appear today 
before the subcommittee.
    Congress has wrestled with employment verification for over 
20 years, and rightly so. It is the linchpin of effective 
immigration enforcement. Comprehensive reform will fail if the 
next generation of employment verification is not fast, 
accurate and reliable.
    Conventional wisdom says that employers are reluctant 
participants in the verification process and will only 
participate in an electronic system if forced to do so. The 
recent increase in enrollment in E-Verify, which is voluntary, 
suggests otherwise: employers need, and want, the Federal 
Government to provide them with the means to verify the legal 
status of their workforce.
    E-Verify is a strong foundation for an electronic system. 
During a period when enrollment has increased by over 1,000 
employers a week, DHS has continued to expand its capabilities 
and improve its accuracy. E-Verify is not without its flaws, 
including one fundamental problem that other witnesses have 
mentioned: its inability to detect identity theft.
    The government has been creative in responding to that 
weakness and the photo tool biometric technology now allows an 
employer to compare the photo presented by the worker with the 
photo stored in the government's database. The full 
incorporation of U.S. citizen passport, foreign national visa 
photos, and driver's license photos into the biometric photo 
tool would go a long way to reducing identity theft. Congress 
should, therefore, give consideration to using E-Verify as a 
platform and expanding photo tool for currently issued 
documents and/or incorporating a new biometric identification 
document.
    Irrespective of which system Congress mandates, the 
following elements should be included:
    First, there must be simple procedures that eliminate 
subjective decisions by employers. Under current law, a new 
employee can present a combination of 26 different documents: 
some combinations work, others don't. Some documents require 
re-verification, some don't. The DHS Employer Handbook is 55 
pages long. Congress must reduce the number of acceptable 
documents and establish simple bright-line rules that every 
employer can follow.
    Second, there should be a single set of laws and rules for 
all employers nationwide. At last count, 12 States have passed 
laws dealing with employment verification and the result has 
been a complex web of laws and regulations. At one point, an 
employer faced the prospect of being required to enroll in E-
Verify in Arizona and being prohibited from doing so in 
Illinois. Congress should clarify that any new verification 
system preempts any current or future State law that attempts 
to buildupon, or weaken, the Federal scheme.
    Third, there should be clear standards of liability for 
employers. Employers may scrupulously follow the Form I-9 
verification process or even go further and voluntarily use E-
Verify, yet still end up with unlawful workers. As a result, 
even the most compliant employer could face the prospect of a 
DHS audit or raid, workforce disruption, and uncertainty about 
its liability. For employers who comply with the rules in good 
faith and nevertheless end up with the workers who are not 
lawful, there should be clear standards for when liability 
would attach.
    Finally, employers should bear reasonable and proportional 
costs for any system. Employers already shoulder much of the 
cost of administering the paper-based verification process. 
After all, it's the employer that completes the I-9, retains 
the I-9.
    The fact that so many voluntary users of E-Verify 
inadvertently violate its rules suggests that many employers 
are underestimating the costs involved in establishing and 
running an electronic verification system. As Congress 
considers expansion of E-Verify or creation of a new system, 
careful consideration must be given to any additional costs 
that will be borne by employers.
    In closing, if Congress is successful in designing and 
implementing an employment verification system that is fast, 
accurate, and addresses identity theft, it will be much easier 
to find common ground on how to phase in such a system. But 
that will only be true if employers have access to a legal 
workforce, an open question when the economy recovers and 
current immigration quotas limit the availability of legal 
workers.
    Congress should, therefore, carefully coordinate expansion 
of E-Verify or any alternative system with broader reforms that 
provide employers with the legal supply of workers they need to 
sustain and grow their businesses.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Melmed appears as a 
submission for the record.]
    Chairman Schumer. Thank you, Mr. Melmed. We want to thank 
all three witnesses for excellent testimony.
    We're going to limit questions to 5 minutes, but we'll go 
several rounds. I think I have more than 5 minutes' worth of 
questions, and maybe some of my colleagues do as well.
    First, to Mr. Aytes. One of the major concerns, as you've 
heard, with E-Verify is the risk of identity fraud. We found 
company after company that complies with E-Verify having 
trouble. In December of 2006, a raid of the large food 
processing firm, Swift, led to the arrest of 1,200 suspected 
illegal workers, even though the company was using E-Verify at 
the time.
    As of August 2008, USCIS arrested 595 workers suspected of 
being illegal immigrants in a raid on Howard Industries, a 
company that was using E-Verify since 2007. All 595 in that one 
were charged with identity theft and fraudulent use of Social 
Security numbers.
    Given these incidents and the concern voiced by many, isn't 
there a large risk of identity fraud not captured by the E-
Verify? And people, as I mentioned earlier, desperate to work 
will figure out that that's an easy way to go, it's not just 
hit or miss.
    Mr. Aytes. Clearly, Senator, within the general environment 
of the country today there is a substantial vulnerability to 
identity theft not only with respect to immigration documents, 
but financial documents and in other contexts as well.
    That is one of the reasons why we have been trying to 
expand access to driver's license information. It is the 
largest inventory, other than passport data, which we are 
working to add to our system of photographs to let employers 
know what a State saw and who they issued a document to other 
than creating a stand-alone process, whether it be a TWIC card, 
whether it be the current passport card, or whether it be a 
passport-like process to independently collect biometrics and 
issue documents and create a verification process. It's the 
next logical step, we would suggest, to expanding the utility 
of E-Verify in the identity verification field.
    Chairman Schumer. Okay. You published a statistic that says 
96.9 of employees are automatically confirmed as authorized 
within 24 hours through E-Verify, but isn't it true that that 
statistic includes false positives?
    Mr. Aytes. To the extent to which there may be false 
positives, that someone has been able to successfully convince 
an employer that they are someone else, yes, sir.
    Chairman Schumer. Yes. Okay.
    Next question, I will go to--I have a bunch more questions 
for everybody, but I'm going to go to Mr. Ziglar. Based on your 
time at the INS and your subsequent professional experience, do 
you believe that there is a large risk of identity fraud not 
captured by the E-Verify system?
    Mr. Ziglar. I think that's unquestionable, Senator.
    Chairman Schumer. All right.
    Mr. Ziglar. It's quite easy these days to engage in 
identity theft and then use that to do all sorts of things, 
including beat the E-Verify system.
    Chairman Schumer. Right.
    And now for Mr. Melmed, and then I'm going to ask each of 
the others this question as well: do you agree that the 10 
characteristics I set forth in my opening statement should 
serve as basic requirements for any tough, fair and effective 
system that would prevent employers from hiring illegal workers 
and will be accepted by the American public? Mr. Melmed?
    Mr. Melmed. Yes, Senator Schumer. I think that the 
framework that you set forth is an excellent starting point for 
a verification system. Like any system that involves a lot of 
technology and a lot of different government databases there 
are going to be many, many tough policy questions, but I think 
if you start with that framework it will be a good place.
    Chairman Schumer. Great. And I hope your boss--your former 
boss--was listening.
    How about you, Mr. Aytes?
    Mr. Aytes. Well, as a representative of the government 
here, let me be a little careful. I think it's a good place to 
start, as Lynden says.
    Chairman Schumer. How about just as a representative of 
yourself? I understand this is not your organization's 
position, but just based on your experience. No one is holding 
you to it, and you don't have to say yes or no.
    Mr. Aytes. Thank you, sir. I do think it's a good place to 
start. I think comprehensive reform which includes some changes 
in the verification process is going to be necessary. The 
President has said that, the Secretary has said that; I'm on 
firm ground in that respect.
    Chairman Schumer. Great.
    Mr. Ziglar?
    Mr. Ziglar. Mr. Chairman, I think it's not only a good 
place to start, it's probably a good place to end.
    Chairman Schumer. Thank you. All right.
    I have 14 seconds left, but I'm going to quit while I'm 
ahead in the first round and call on my colleague, Senator 
Cornyn.
    Senator Cornyn. I was reminded before the hearing of a 
story that I read recently about a new project to identify 1.2 
billion Indians. They are taking on, on a humongous scale, 
something that we've been struggling with for 20 years. The 
predicted cost is 10\ 3 billion pounds for 1.2 billion citizens 
and will replace what right now is 20 different proofs of 
identity that are available and require, in the words of the 
gentleman who's been appointed to head up this project, ``a 
ubiquitous online database that will have to be impregnable to 
protect against loss of information''.
    Mr. Chairman, I ask that this story from the Times Online, 
July 15, be made part of the record.
    Chairman Schumer. Without objection.
    Senator Cornyn. Thank you.
    [The article appears as a submission for the record.]
    Senator Cornyn. Why is it that we've been struggling for 20 
years to do this, Mr. Melmed? Do you think it's because we lack 
the knowledge or is it a lack of political will?
    Mr. Melmed. Senator Cornyn, I think there were two 
limitations over the past 20 years. The first, is 
technological. The capabilities that the government has today 
are far superior than it had 20 years ago. Even the discussion 
about the issue of an identification document, when I've looked 
at the congressional testimony from the 1986 debate surrounding 
a national ID card, it is a different environment and I think 
Americans are much more comfortable with the use of 
identification throughout their lives. So I think it's a mix of 
both technological developments and social acceptance of the 
use of technology.
    I think more recently, however, it's just the challenge of 
coordinating employment verification with the other issues 
related to immigration reform and the recognition that dealing 
with the workplace, with illegal workers in a workplace, is 
inextricably tied to fixing the legal side of the immigration 
system.
    Senator Cornyn. Mr. Ziglar, I know you were Commissioner of 
INS for a while. I'd just like to ask if you share my view that 
the main reason why Congress has been unable to deal with this 
issue effectively so far--I'm talking about comprehensive 
immigration reform--is because of the lack of confidence that 
the American people have that we're actually serious about, as 
Senator Schumer said, operational security at the border. 
They're not confident that we are serious about establishing an 
effective means of employment verification.
    Do you agree with that? If you disagree, tell us your 
views.
    Mr. Ziglar. Well, I think that's part of the issue. I had 
the good fortune, I spent a year and a half after being INS 
Commissioner studying and teaching immigration law and history, 
and I learned a lot about it I wish I had known when I was 
Commissioner. What we're going through right now in this 
country has happened a number of times, where the Congress, 
which has more authority in the area of immigration than 
probably any other area of the law, if you look at the cases, 
where the Congress has taken literally sometimes two decades to 
move from an ineffective system to something that is a more 
effective system. It's a very volatile political issue; it 
always has been, always will be.
    So I think one of the reasons is some lack of political 
will. I think the lack of trust that it could actually happen 
is part of it. I think with respect to the employment 
verification system, I would associate myself with Lynden on 
several of the things he said. The technology to do a really 
effective verification system has just now been emerging over 
the last decade. We're there today, but we would not have been 
there--we were not there in 1996 when the first electronic 
employment verification system was addressed by the Congress.
    Senator Cornyn. Well, I mentioned to Senator Schumer that 
when I visit New York and want to go into office buildings, I 
not only have to register at the front, but someone has to come 
down and let me in or be there as I go through the turnstile 
with a machine-readable card, presumably some form of biometric 
included. You mentioned the TWIC card that Congress mandated 
for transportation workers. Is there any excuse that you can 
think of, from a technological standpoint now, not to provide a 
reliable, comprehensive means of employee verification?
    Mr. Ziglar. I can't think of any. There is no one 
particular technology that shines over all the others. You 
could use a biometric card and use a verification scanner. 
Literally, you don't necessarily even have to have the cards. I 
think the Chairman mentioned this in his opening statement: you 
could use a combination of fingerprints and iris scan, for 
example. The reliability factor on that is right up near 100 
percent.
    So, I mean, there are ways of doing this and you never have 
to have somebody carry a card around. I don't know about you. I 
carry so many cards that I can't find them, and then I lose 
them. So, I think that has its own set of problems. But there 
are lots of ways we can tackle this problem.
    Senator Cornyn. Thank you very much.
    Chairman Schumer. Senator Sessions.
    Senator Sessions. Thank you.
    Well, this is most interesting, and matters that we need to 
work on. I think one of the things that causes the American 
people to be troubled is the E-Verify, Mr. Aytes, is still a 
pilot program. It passed 10 years ago. It was supposed to have 
been in effect many years ago. Why didn't it happen? The reason 
is, I think it's pretty clear: lack of political will, 
political pressure on Members of Congress. The money didn't get 
appropriated and it never really occurred.
    Although Congress, Mr. Ziglar, definitely has the ultimate 
legislative power, I'm convinced, if the President doesn't want 
this to happen it's not going to happen. We can give them 
money, we can tell them to do these things and these 
capabilities. If they're not leading, and motivated, and want 
to make it succeed, it's never going to succeed. We haven't had 
a President in some time that's committed to that, maybe never.
    With regard to the E-Verify system, only 2.8 percent turn 
out to be final non-confirmation, Mr. Aytes. Is that about 
right, or 2.9?
    Mr. Aytes. 2.8. Yes, sir.
    Senator Sessions. 2.8. Well, I think, as you noted, 5 
percent, people estimate, of workers in America are illegal, so 
this is not over-catching the people, apparently. But like 
Senator Schumer says, it indicates some people may be getting 
by the system and we could do better about it.
    Is it possible--I think you answered this, Mr. Ziglar. I'll 
ask the others. Mr. Aytes, I'll start with you. Based on the 
system, the capabilities of the system, is it possible that not 
only could the business, when they punch in a Social Security 
number, could see if that was the proper match of the Social 
Security number, that is, a valid number, but also could see 
the picture of the applicant?
    Mr. Aytes. Yes, they can see pictures of DHS-issued 
documents today. Soon, next year, they'll be able to see 
passport-issued documents. As I said, we've been trying to work 
with the States to get them interested in sharing their 
documents so we can show what they see typically in an 
employment context, which is a driver's license.
    Senator Sessions. And the question, I guess, is, what 
pictures can they see now, or soon?
    Mr. Aytes. They can see our current employment 
authorization document, which is issued for----
    Senator Sessions. That's for Federal employees?
    Mr. Aytes. No, Senator. That is for aliens who are 
authorized to work temporarily in the United States. And they 
can see green cards, documents that we issue to permanent 
residents of the United States. Those are cards that we issue 
to people for the purpose of their status and their employment 
authorization.
    Senator Sessions. Mr. Melmed, has that got potential to be 
more effective than it is?
    Mr. Melmed. I think there's certainly a lot of potential 
there. My understanding, statistically, from the MPI report 
that Commissioner Ziglar submitted into the record, there's 
approximately only 4 to 6 percent of documents used in the 
hiring process, about 15 million documents right now, are part 
of that photo tool technology system. Those are only documents 
currently issued by DHS in connection with the immigration 
system. Work is under way right now to access, as I understand 
it, passport photos, so anyone with a U.S. passport, an 
employer would be able to see the passport photo in the system. 
But the driver's license is the most commonly----
    Chairman Schumer. Can I ask a question? What percentage of 
the American people have a passport with a picture? I think 
it's only like 10 percent. Is that right?
    Mr. Melmed. I apologize, Senator Schumer. I don't know that 
number off the top of my head.
    Chairman Schumer. Is that right, Mr. Aytes?
    Mr. Aytes. I'm sorry, sir. I don't have that data.
    Chairman Schumer. I think it's a small percentage. I'm not 
sure what it is. I thought it was 7 to 9, because we looked at 
this on the northern border and the crossing into Canada. But 
I'm sorry to interrupt.
    Mr. Melmed. That's an important point to make because the 
driver's license is being used.
    Senator Sessions. The driver's license is the one that 
could make a difference?
    Mr. Melmed. Yes, Senator Sessions. That is the most 
frequently relied upon identity document during the hiring 
process.
    Senator Sessions. And when we say ``biometric'', Mr. Aytes, 
I'm inclined to believe, and was active in this debate a number 
of years ago when Secretary Ridge was there, and I encouraged 
him to use the fingerprint. I noticed when he left, he said he 
had one bit of advice to his successors: use the fingerprint 
because it's a system that--we're computerized nationwide 
through the FBI system and it can actually work to identify 
somebody. If you start a new thing, like an iris, the eye, or 
some other, visage, it has no connection.
    I mean, these may be people wanted for murder, or 
robberies, drug dealing, and things of that nature that would 
not be picked up. Some think, well, that's bad. If I go to 
apply for a job and they find out I'm a murderer or a drug 
dealer, how bad is that? As a former prosecutor, I think that's 
pretty good. That's how you catch criminals today, 
technologically, really.
    Well, today it has real resonance, what we're doing, 
because of the unemployment rate. I'll just share this story. 
An Alabama contractor who does right-of-way work, has been 
doing so for 25 or 30 years, has a lot of employees that have 
worked for him for many years, has a retirement plan and an 
insurance program and pays pretty good wages, all of a sudden 
he had an out-of-State company come in and wins every contract.
    He's convinced, and he's received information from Federal 
investigators, that he's probably correct that most of those 
are not legally here. So he's going to be laying off right now, 
in a time of recession, American workers that probably are not 
over-paid, for sure, but having fairly decent wages and some 
benefits, and he can't compete with this. So I think getting 
this right is so important and I hope that we can.
    Thank you, Mr. Chairman, for talking about these technical 
matters. I know Senator Kyl, on this particular issue, always 
felt there was nothing more important to get right than the 
kind of identification document we use, and it's complex. So, 
there's nothing wrong with starting and talking about it. As a 
matter of fact, I salute you for doing so.
    Chairman Schumer. Thank you.
    We'll now go to a second round. I just have a few 
questions. These are for Mr. Ziglar. They focus a little bit on 
the technicalities, as Senator Sessions mentioned.
    First, can you provide examples where biometrics-based 
systems are currently being used in private industry, in the 
government, and other countries? Just share with us, briefly, 
how effective they have been.
    Mr. Ziglar. Biometrics are fairly ubiquitous around the 
world now. For example, the company I retired from last year, 
we supplied the hardware for voting systems in Venezuela, 
Bolivia, the Gold Coast, a number of places, under U.N. 
supervision where people were enrolled, and then when they 
showed up to vote, they took their fingerprint to eliminate as 
much voter fraud as possible. That's an example.
    Another example. In Germany, for example, my company owned 
a company in Germany that was in the facial recognition 
business. Now, facial recognition is not a highly reliable 
biometric yet. It will get there one of these days. The two 
most reliable that are in practice are, of course, iris 
scanning and fingerprints. But we deployed a number of systems 
in Germany in casinos that could pick out habitual gamblers, 
which can't go into them, or identify people that were not so 
good, or also identify employees. There are companies in the 
country now, which will remain nameless, that use facial 
recognition on the way in to make sure that these are, in fact, 
employees that are coming in. The Federal Government. In highly 
secure facilities, fingerprints and an iris are used to gain 
access without a card.
    Chairman Schumer. Right.
    Mr. Ziglar. So like I say, it's spreading rather 
substantially. In the health care industry, there are now 
situations where a doctor or a nurse have to give their 
fingerprint in order to get access to medical records, which is 
really a terrific way of honoring the HIPPA laws. Would you 
like me to go on? I could probably spend another 30 minutes 
talking about it.
    Chairman Schumer. No, I get it. It's pretty extensive.
    How is the cost here? I mean, we're exploring this in great 
detail, as you know, as Jeff mentioned. And do you think the 
cost of an employment verification system could be paid for by 
using a combination of the fines and fees to the population of 
individuals who would be legalized as part of comprehensive 
reform, as well as by taking the current revenues received from 
immigration work permits and applications? I mean, is the cost 
sort of comparable?
    Mr. Ziglar. Well, I don't know what those numbers are.
    Chairman Schumer. Is the cost relatively reasonable for 
these things?
    Mr. Ziglar. The cost is really--in fact, the costs are 
coming down rather dramatically in the business, having run a 
company and the business is coming down too dramatically. But 
the fact is that these things can be done very reasonably.
    I know one of the issues that has been raised constantly is 
that employers will have to go out and buy a whole bunch of 
equipment and do all these----
    Chairman Schumer. We do not intend that to happen.
    Mr. Ziglar. That's just not true. There are other ways of 
getting that service on a per capita basis.
    Chairman Schumer. Right. Right.
    And finally, do you think that any employment verification 
system that uses PIN numbers or other security codes to 
authenticate an employee's identity rather than unique 
biometric features will have a larger risk of identity theft?
    Mr. Ziglar. I mean, you can give somebody your PIN number.
    Chairman Schumer. Yes. Can't give them your fingerprint.
    Mr. Ziglar. Pretty hard.
    Chairman Schumer. Or your face. Yes. Okay. Thank you.
    Anyone want to add anything to those two questions, Mr. 
Melmed, Mr. Aytes?
    [No response].
    Chairman Schumer. Great. Okay.
    Senator Cornyn.
    Senator Cornyn. Mr. Aytes, I think you said that only 14 
percent of new hires are run through E-Verify today. Did I hear 
you correctly?
    Mr. Aytes. Fourteen percent of non-agricultural hires are 
run through E-Verify.
    Senator Cornyn. Okay. So if you add agricultural hires, it 
would be----
    Mr. Aytes. It drops the number quite a bit.
    Senator Cornyn. Substantially larger number.
    Let me put it this way: would you agree with me that we 
need to get all new hires run through E-Verify or some sort of 
identification system, whatever it be, whether it's iris scans 
or fingerprints, in order to make this thing work?
    Mr. Aytes. Today, with the exception of two States, which 
have themselves decided it will be mandatory, and I think about 
10 to 12 others which have some variation of a mandatory 
requirement, usually for State employees or State contractors, 
it is entirely a voluntary system presently. That was the way 
it was set up by the Congress. And while it's growing by 1,000 
employees a week, which shows that a number of employers are 
interested in using this program, for it to really serve its 
purpose it's going to have to be used far more consistently in 
the workplace.
    Senator Cornyn. And I understand why people would 
voluntarily decide to use it for their own risk aversion, 
particularly if ICE and others are going to come in and raid 
their premises and enforce the immigration laws. But 
realistically, this has got to apply to every employer, doesn't 
it, if it's going to work reliably in a non-discriminatory way?
    Mr. Aytes. The President said that some form of 
verification system is going to be an essential element of 
immigration controls.
    Senator Cornyn. Well, I think, Mr. Melmed, you mentioned 
that you think it's the linchpin. I would take your statement 
and the President's statement, and Mr. Aytes', and say it can't 
just be a component. It really is the foundation, I think, upon 
which it's going to be built, not only in terms of fairness and 
protecting private information, but also in terms of restoring 
the public confidence that we're actually serious about that.
    Would you agree with that characterization, Mr. Melmed?
    Mr. Melmed. I couldn't agree more. Certainly within the 
business community, having confidence that the verification 
system works is going to be critical to having full compliance, 
both the letter of the law, but also the spirit of the law. 
Employers right now, there's a perception that E-Verify does 
not work. Some of the high-profile raids, like the Swift raid 
that Chairman Schumer mentioned, is cited repeatedly out there 
as evidence that there are still flaws in the system. However, 
the next generation of E-Verify, by incorporating biometrics, 
dealing with identity theft, will increase that confidence 
level and that will be central to comprehensive reform.
    Senator Cornyn. I'd like each one of you to comment on this 
question, if you would, please, starting with Mr. Aytes. 
Obviously we're talking about technology and feasibility of 
uniform employment verification, but we haven't yet begun to 
talk about how many more people the Department of Homeland 
Security is going to need to hire to do this and what sort of 
funds they're going to need to enforce violations of the law or 
other individuals who are identified through this process, 
perhaps.
    I know it's maybe a little premature to ask you to 
speculate what your budget is going to need to be like, but 
could you just comment generally on, once E-Verify or some 
counterpart of reliable employment verification system is put 
in place, what resources will be necessary for the Federal 
Government to provide to make it actually work, rather than 
just make it technologically feasible and not feasible in 
practice?
    Mr. Aytes. Sir, it is a little hard to extrapolate what it 
might cost; it will depend on the scenario. How frequently 
would we want to update to make sure, that if we're issuing a 
card for example, the card is always current, like driver's 
licenses get replaced periodically? Would DHS or another agency 
be involved? We're not the only government agency that issues 
identity documents. The State Department issues passport cards 
and the passport itself, and individual States issue driver's 
licenses. So, there are various scenarios.
    We have outlined that to take E-Verify--the current system 
which is not biometrically based--nationally would cost us 
probably about $200 million a year, which is a little bit more 
than double what our current budget is for that program.
    Senator Cornyn. Commissioner Ziglar, do you have any 
comments on what else is going to be needed to make it work, in 
addition to the technology and the political will to make it 
happen?
    Mr. Ziglar. Well, Senator, I think it's going to be a 
question of whether or not the government reaches out to the 
private sector to help them implement this. If they try to do 
it internally it will overwhelm the system. There is plenty of 
talent and ability in the private sector to work with the 
government to design a system that can be efficient and can be 
maintained. Is it going to cost money? You betcha. Is it worth 
it? You betcha.
    Senator Cornyn. Any comments you'd care to make, Mr. 
Melmed, on that regard?
    Mr. Melmed. Yes, Senator Cornyn. The cost will be 
significant. Beyond just the cost, the process involved in 
expanding the system involves appropriations, procurement, 
hiring employees and screening those employees, as well as 
implementing policy and regulations. All that said, the cost of 
not doing it, of not having an effective enforcement system in 
the workplace, is too significant.
    As I said in my opening statement, I don't think reform 
will work. So I think the question really is how to pay for it 
and how much to spend on new technology and what you're getting 
in return for each additional stage of technology, but it 
obviously must be done, and it must be paid for. Creative ways 
need to be found to pay for it.
    Senator Cornyn. Mr. Chairman, I'd note that today, for me 
to access my laptop computer, I have to swipe my fingerprint 
over a portal, which gains access to it. I just can't imagine 
that this is an infeasible thing to do. I congratulate you for 
focusing on this important linchpin, as it's been called, 
because I do believe that we are not going to get comprehensive 
immigration reform done unless we get this done right.
    Chairman Schumer. And on that optimistic note, we will 
thank our witnesses and call the hearing to a close.
    [Whereupon, at 3:48 p.m. the hearing was adjourned.]
    [Additional material is being retained in the Committee 
files, see Contents.]
    Questions and answers and submissions for the record 
follow.]

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