State Department: Improvements Needed to Strengthen U.S. Passport
Fraud Detection Efforts (20-MAY-05, GAO-05-477).		 
                                                                 
Maintaining the integrity of the U.S. passport is essential to	 
the State Department's efforts to protect U.S. citizens from	 
terrorists, criminals, and others. State issued about 8.8 million
passports in fiscal year 2004. During the same year, State's	 
Bureau of Diplomatic Security arrested about 500 individuals for 
passport fraud, and about 300 persons were convicted. Passport	 
fraud is often intended to facilitate other crimes, including	 
illegal immigration, drug trafficking, and alien smuggling. GAO  
examined (1) how passport fraud is committed, (2) what key fraud 
detection challenges State faces, and (3) what effect new	 
passport examiner performance standards could have on fraud	 
detection.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-477 					        
    ACCNO:   A24577						        
  TITLE:     State Department: Improvements Needed to Strengthen U.S. 
Passport Fraud Detection Efforts				 
     DATE:   05/20/2005 
  SUBJECT:   Counterterrorism					 
	     Crime prevention					 
	     Crimes						 
	     Criminal activities				 
	     Criminals						 
	     Fraud						 
	     Identity theft					 
	     Law enforcement					 
	     Passports						 
	     Performance measures				 
	     Department of State Consular Lookout and		 
	     Support System					 
                                                                 

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GAO-05-477

United States Government Accountability Office

GAO	Report to the Committee on Homeland Security and Governmental Affairs, U.S.
                                     Senate

May 2005

STATE DEPARTMENT

    Improvements Needed to Strengthen U.S. Passport Fraud Detection Efforts

                                       a

GAO-05-477

[IMG]

May 2005

STATE DEPARTMENT

Improvements Needed to Strengthen U.S. Passport Fraud Detection Efforts

                                 What GAO Found

Using the stolen identities of U.S. citizens is the primary method of
those fraudulently applying for U.S. passports. False claims of lost,
stolen, or damaged passports and child substitution are among the other
tactics used. Fraudulently obtained passports can help criminals conceal
their activities and travel with less scrutiny. Concerns exist that they
could also be used to help facilitate terrorism.

State faces a number of challenges to its passport fraud detection
efforts, and these challenges make it more difficult to protect U.S.
citizens from terrorists, criminals, and others. Information on U.S.
citizens listed in the federal government's consolidated terrorist watch
list is not systematically provided to State. Moreover, State does not
routinely obtain from the Federal Bureau of Investigation (FBI) the names
of other individuals wanted by federal and state law enforcement
authorities. We tested the names of 67 federal and state fugitives and
found that 37, over half, were not in State's Consular Lookout and Support
System (CLASS) database for passports. One of those not included was on
the FBI's Ten Most Wanted list. State does not maintain a centralized and
up-to-date fraud prevention library, hindering information sharing within
State. Fraud prevention staffing reductions and interoffice workload
transfers resulted in fewer fraud referrals at some offices, and
insufficient training, oversight, and investigative resources also hinder
fraud detection efforts.

Any effect that new passport examiner performance standards may have on
State's fraud detection efforts is unclear because State continues to
adjust the standards. State began implementing the new standards in
January 2004 to make work processes and performance expectations more
uniform nationwide. Passport examiner union representatives expressed
concern that new numerical production quotas may require examiners to
"shortcut" fraud detection efforts. However, in response to union and
examiner concerns, State eased the production standards during 2004 and
made a number of other modifications and compromises.

Crimes Suspected of 37 Federal and State Fugitives Not in CLASS Who Were
Included in Our Test

                              Type of crime Federal fugitives State fugitives 
                                     Murder                 5               4 
              Felonious assault and related                 2               7 
                                       acts                   
                         Child sex offenses                 4               1 
                           Drug trafficking                 3 
                           Attempted murder                 1               1 
                                   Bombings                 1 
                           Child kidnapping                                 1 
                               Other crimes                 4               3 
                                      Total                20              17 

Sources: State Department and other federal agencies.

United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
Identity Theft a Primary Means of Committing Fraud
State Faces Challenges to Fraud Detection Efforts
Effect of New Examiner Performance StandardsonFraud Detection

Remains Unclear Conclusions Recommendations for Executive Action Agency
Comments and Our Evaluation

                                                                   1 2 4 9 12

27 31 32 33

Appendixes                                                              
                Appendix I:             Scope and Methodology              35 
               Appendix II:     Comments from the Department of State      38 
              Appendix III:     GAO Contact and Staff Acknowledgments      45 
                               Table 1: Crimes Suspected of 20 Federal     
     Tables                             Fugitives Not in CLASS             
                                    Who Were Included in Our Test          14 
                                Table 2: Crimes Suspected of 17 State      
                                      Fugitives Not in CLASS Who           
                                      Were Included in Our Test            16 
    Figures                 Figure 1: Key State Department Units Involved     
                                    in Passport-Related Operations          5
                            Figure 2: The Typical Passport Application and 
                                             Adjudication                  
                                               Process                      7 
                             Figure 3: Electronic Databases Available to    8 
                                          Passport Examiners               

Contents

Abbreviations

CLASS Consular Lookout and Support System
DHS Department of Homeland Security
FBI Federal Bureau of Investigation
OIG Office of the Inspector General
SSA Social Security Administration
TDIS Travel Document Issuance System
TSC Terrorist Screening Center

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A

United States Government Accountability Office Washington, D.C. 20548

May 20, 2005

The Honorable Susan M. Collins

Chairman

The Honorable Joseph I. Lieberman

Ranking Member

Committee on Homeland Security and Governmental Affairs United States
Senate

Maintaining the integrity of the U.S. passport is essential to the State
Department's effort to protect U.S. citizens and interests at home and
abroad in the post-September 11 world. The department issued about 8.8
million passports in fiscal year 2004. Each year, State passport examiners
refer tens of thousands of applications they suspect may be fraudulent to
their local fraud prevention offices. In fiscal year 2004, State's
Diplomatic Security Service arrested about 500 individuals for passport
fraud and about 300 were convicted. Passport fraud is often intended to
facilitate such crimes as illegal immigration, drug trafficking, and alien
smuggling.

You asked us to assess State's efforts to detect passport fraud and
whether new performance standards for passport examiners may require them
to adjudicate passport applications too quickly to adequately detect such
fraud. This report examines (1) how passport fraud is committed, (2) what
key challenges State faces in its fraud-detection efforts, and (3) what
effect new performance standards for passport examiners could have on
fraud detection.

To examine how passport fraud is committed, we reviewed fraud statistics
maintained by State's Bureau of Consular Affairs and examined fraud
statistics and selected investigative case files within State's Bureau of
Diplomatic Security. To assess the key challenges State faces in detecting
passport fraud, we directly observed State's fraud detection efforts at 7
of the 16 domestic passport-issuing offices located across the United
States; tested State's use of electronic databases for fraud detection;
ran the names of 67 different federal and state fugitives against State's
name-check system; analyzed State's fraud referral statistics within the
Bureaus of Consular Affairs and Diplomatic Security; and interviewed
cognizant officials in Consular Affairs' Office of Passport Services,
Office of Consular Fraud Prevention, and Consular Systems Division. We
also met with cognizant officials in the Bureau of Diplomatic Security and
the Office of the Inspector General. To assess what effect new performance
standards

for passport examiners could have on fraud detection efforts, we reviewed
the test results and methodology that State used in developing the new
standards, and interviewed union representatives for passport examiners,
select examiners, the fraud prevention managers at all 16 domestic
passport-issuing offices, and Consular Affairs officials responsible for
developing and implementing the new standards. Our work was conducted in
accordance with generally accepted government auditing standards. (For a
detailed discussion of our scope and methodology, see app. I.)

Results in Brief	Using the stolen identities and documentation of U.S.
citizens is the primary tactic of those fraudulently applying for U.S.
passports. Imposters' use of legitimate birth and other identification
documents belonging to others accounted for 69 percent of passport fraud
detected in fiscal year 2004, while false claims of lost, stolen, or
damaged passports; child substitution; and other methods accounted for the
remaining 31 percent. According to State's Bureau of Diplomatic Security,
passport fraud is often committed in connection with other crimes,
including narcotics trafficking, organized crime, money laundering, and
alien smuggling. Fraudulently obtained passports help enable criminals to
conceal their movements and activities. Further, U.S. passports allow
their holders entry into the United States with much less scrutiny than is
given to foreign citizens and also allow visa-free passage into many
countries around the world, providing obvious benefits to criminals
operating on an international scale. Concerns exist that fraudulently
obtained passports could also be used to help facilitate terrorism.

State faces a number of challenges to its passport fraud detection
efforts, including limited inter-and intra-agency information sharing and
insufficient fraud prevention staffing, training, oversight, and
investigative resources. These challenges make it more difficult to
protect U.S. citizens from terrorists, criminals, and others who would
harm the United States. Specifically, State does not currently receive
information on U.S. citizens listed in the Terrorist Screening Center
(TSC) database-the federal government's consolidated terrorist watch
list-and State does not routinely obtain from the Federal Bureau of
Investigation (FBI) the names of other individuals wanted by both federal
and state law enforcement authorities for various crimes. Many of these
individuals are not identified in State's Consular Lookout and Support
System (CLASS) name-check

database for passports1 and could therefore obtain passports and travel
internationally without the knowledge of appropriate authorities or, in
some cases, potentially flee the country to escape charges. We tested the
names of 67 different federal and state fugitives-some wanted for serious
crimes-and found that fewer than half were in State's system. One of those
not included was on the FBI's Ten Most Wanted list. Though State, TSC, and
the FBI began exploring options for more routine information sharing on
certain passport-related matters in mid-to late 2004, such arrangements
are not yet in place. Further, State does not maintain a centralized
electronic fraud prevention library that enables comprehensive,
well-organized, and timely information sharing on fraud alerts, lost and
stolen birth and naturalization certificates, counterfeit documents, and
other fraud prevention resources among passport-issuing office personnel
across the United States. We found that, in 2004, fraud prevention
staffing changes at some domestic passport-issuing offices may have
resulted in fewer referrals of potential fraud cases to Diplomatic
Security for investigation. Interoffice transfers of passport adjudication
cases may have resulted in fewer fraud referrals as well. We found that
fraud prevention training is provided unevenly at different
passport-issuing offices and that some examiners have not had formal fraud
prevention training in years. Training and oversight of passport
acceptance agent operations are even more sporadic. State does not have
any way of tracking whether many acceptance agent employees are receiving
required training, it makes oversight visits to only a limited number of
acceptance facilities each year, and it does not maintain records of all
of the individuals accepting passport applications at those facilities,
posing a significant fraud vulnerability.

Any effect that new passport examiner performance standards may have on
State's fraud detection efforts is unclear because State has continued to
adjust the standards. To make passport adjudication work processes and
related performance measurement more uniform across the 16 different
domestic passport-issuing offices, State began implementing the new
standards in January 2004. The 2004 performance standards placed more
emphasis on meeting numerical production quotas because, for the first
time, a required average production rate stands alone as a
performancerating element for examiners. Passport examiner union
representatives and some other examiners maintain that the numerical
production standards force examiners to take "shortcuts" in fraud
detection efforts. However, in

1State maintains a separate CLASS database for visas. References to CLASS
throughout this report relate to the CLASS database for passports only.

response to union and examiner concerns, State eased the production
standards during 2004 and made a number of other modifications and
compromises at various times during the year. As a result, while over 60
examiners were not achieving the required production rate midway through
2004, all but 18 of about 480 examiners nationwide were meeting the
standards by year-end.

In commenting on a draft of this report, State generally concurred with
our findings and conclusions. State indicated that it has already begun
taking, plans to take, or is considering measures to address most of our
recommendations.

Background	A U.S. passport is not only a travel document but also an
official verification of the bearer's origin, identity, and nationality.
Under U.S. law, the Secretary of State has the authority to issue
passports. Only U.S. nationals2 may obtain a U.S. passport, and evidence
of citizenship or nationality is required with every passport application.
For individuals 16 or older, a regular U.S. passport issued on or after
February 1, 1998, is valid for 10 years from the date of issue; it is
valid for five years for younger applicants. Federal regulations list
those who do not qualify for a U.S. passport, including those who are
subjects of a federal felony warrant.

State Passport Operations	The Deputy Assistant Secretary for Passport
Services oversees the Passport Services Office, within State's Consular
Affairs Bureau. Passport Services, the largest component of Consular
Affairs, consists of three headquarters offices: Policy Planning and Legal
Advisory Services; Field Operations; and Information Management and
Liaison. The Office of Consular Fraud Prevention addresses passport, visa,
and other types of consular fraud. The Consular Systems Division is
responsible for the computer systems involved in passport services and
other consular operations. The Office for American Citizens Services
handles most issues relating to passport cases at overseas posts. The
Bureau of Diplomatic Security is responsible for investigating individual
cases of suspected passport and visa fraud. The State Department Office of
the Inspector General (OIG) also has some authority to investigate
passport fraud.

2National means a citizen of the United States or a noncitizen owing
permanent allegiance to the United States.

Figure 1 shows the key State Department units involved in passport-related
operations.

Figure 1: Key State Department Units Involved in Passport-Related
Operations

Source: GAO analysis of State Department data.

State operates 16 passport-issuing offices in Boston; Charleston, South
Carolina; Chicago; Honolulu; Houston; Los Angeles; Miami; New Orleans; New
York; Norwalk, Connecticut; Philadelphia; Portsmouth, New Hampshire; San
Francisco; Seattle; and Washington, D.C.3 These 16 offices employ the
approximately 480 passport examiners4 who are responsible for approving
and issuing most of the U.S. passports that are printed each year. The
number of passports issued by domestic passport offices has risen steadily
in recent years, increasing from about 7.3 million in fiscal year 2000 to
8.8 million in fiscal year 2004. Overseas posts deal with a much lower
volume of passports by comparison, handling about 300,000

3There are two passport-issuing offices in Washington, D.C.: a regional
passport agency and a special issuance agency that handles official U.S.
government and diplomatic passports.

4State's official title for the position of passport examiner is passport
specialist.

worldwide in fiscal year 2004. With only a few exceptions, applications
submitted and approved overseas are transmitted electronically to a
domestic passport office to be printed.

    Passport Application and Approval Process

The majority of passport applications are submitted by mail or in-person
at one of almost 7,000 passport application acceptance facilities
nationwide.5 Passport acceptance facilities are located at certain U.S.
post offices, courthouses, and other institutions and do not employ State
Department personnel. The passport acceptance agents at these facilities
are responsible for, among other things, verifying whether an applicant's
identification document (such as a driver's license) actually matches that
applicant. Applications go to a passport office to be examined after their
information is entered, and payments are processed by a State Department
contractor, Mellon Bank, in Pennsylvania.

Through a process called adjudication, passport examiners determine
whether they should issue each applicant a passport. Adjudication requires
the examiner to scrutinize identification and citizenship documents
presented by applicants to verify their identity and U.S. citizenship. It
also includes the examination of an application to detect potential
indicators of passport fraud and the comparison of the applicant's
information against databases that help identify individuals who may not
qualify for a U.S. passport. When passport applications are submitted by
mail or through acceptance facilities, examiners adjudicate the
applications at their desks. A relatively small percentage of the total
number of passport applications are submitted directly by applicants at
one of State's domestic passportissuing offices. Applicants are required
to demonstrate imminent travel plans to set an appointment for such
services at one of the issuing office's public counters. "Counter"
adjudication allows examiners to question applicants directly or request
further information on matters related to the application, while "desk"
adjudication requires telephoning or mailing the applicants in such cases.
6 Figure 2 depicts the typical passport application and adjudication
process.

5Number is as of March 2005. State officials noted that this number
changes frequently as new acceptance facilities are added and others are
dropped.

6Applications accepted and adjudicated at the counter also undergo a
number of desk adjudication steps to complete the fraud detection process
before deciding whether to approve each passport.

      Figure 2: The Typical Passport Application and Adjudication Process

                           Source: State Department.

Passport Fraud Detection The passport adjudication process is facilitated
by computer systems-

Tools	including the Travel Document Issuance System (TDIS), which appears
on passport examiners' screens when the adjudication begins. Figure 3
identifies the key computer databases available to help examiners
adjudicate passport applications and detect potential fraud.

Figure 3: Electronic Databases Available to Passport Examiners

Source: State Department.

TDIS automatically checks the applicant's name against several databases-
including State's Consular Lookout and Support System (CLASS), which
contains information provided by various offices within State and
information on outstanding criminal warrants provided by the U.S.
Marshal's Service, the FBI, and other state and federal agencies, as well
as Health and Human Services' database, which identifies parents who have
been certified by a state agency as owing more than $5,000 in child
support and therefore are not eligible for a passport. If TDIS indicates
the applicant may have applied for a passport at another agency or been
issued a U.S. passport within the last 10 years, it prompts the examiner
to reference computer databases outside of TDIS to determine whether the
prompt refers to the applicant or rather someone who resembles the
applicant.

In addition, examiners scrutinize paper documents and other relevant
information during the fraud detection process. Examiners compare the
application submitted by the applicant to the information on the screen to
make sure the information was entered properly, check for missing
information, and analyze application documentation for various types of
fraud indicators. In addition, examiners watch for suspicious behavior and
travel plans. Examiners and acceptance agents are instructed to request
additional proof of identification if they feel the documents presented
are

insufficient. State officials said that in such cases, some individuals
abandon the application, and the names of those who do are placed in
State's name-check system and are more stringently scrutinized if they
apply again. When examiners detect potentially fraudulent passport
applications, they send the applications to their local fraud prevention
office for review and potential referral to State's Bureau of Diplomatic
Security for further investigation.

Identity Theft a Using the stolen identities and documentation of U.S.
citizens is the

primary tactic of those fraudulently applying for U.S. passports.
ApplicantsPrimary Means of also commit fraud through other means. Passport
fraud is often linked to Committing Fraud other crimes.

    Passport Fraud Most Commonly Attempted by Imposters Using the Legitimate
    Documents of Others

State's Bureau of Diplomatic Security investigators stated that imposters'
use of assumed identities, supported by genuine but fraudulently obtained
identification documents, was a common and successful way to fraudulently
obtain a U.S. passport. This method accounted for 69 percent of passport
fraud detected in fiscal year 2004. Investigators found numerous examples
of aliens and U.S. citizens obtaining U.S. passports using a false
identity. One example identified by Diplomatic Security investigators
involved an alien using another person's identity to obtain a U.S.
passport. In 2003, a woman using a fraudulent identity claimed to be born
in Puerto Rico7 and provided a Puerto Rican birth certificate when
applying for a passport at a clerk of the court office in Florida. She
also provided a Florida driver's license.

Diplomatic Security investigators also found cases of U.S. citizens using
the documentation of others to hide their true identity. In 1997, a
naturalized U.S. citizen born in Cuba stole a Lear jet and transported it
to Nicaragua for use in charter services. At the time of his arrest in
2003, he was using an

7Many issuing office managers and Diplomatic Security agents said that
applicants fraudulently using legitimate Puerto Rican birth certificates
is a key fraud concern. They said that legitimate Puerto Rican birth
certificates are readily available because they are commonly required in
Puerto Rico as identification for enrolling children in school and other
activities, and they aren't subsequently taken care of properly. Also,
there have been many instances of lost and stolen blank Puerto Rican birth
certificates. State recently began requiring examiners to give additional
scrutiny to Puerto Rican birth certificates, and State officials also met
with senior officials of the Puerto Rican government to encourage them to
impose more controls over the issuance of multiple birth certificates.

assumed identity and possessed both false and legitimate but fraudulently
obtained identification documents, including a U.S. passport in the name
he used while posing as a certified pilot and illegally providing flight
instruction. Seized at his residence when he was arrested were two Social
Security cards, four driver's licenses, three Puerto Rican birth
certificates, one U.S. passport, one pilot identification card, numerous
credit cards and checking account cards, and items used to make fraudulent
documents. In October 2004, he pled guilty to knowingly possessing five or
more "authentication devices" and false identification documents, for
which he was sentenced to 8 months' confinement. In another case, a man
wanted for murdering his wife obtained a Colorado driver's license and a
passport using a friend's Social Security number and date and place of
birth. Three and four years later he obtained renewal and replacement
passports, respectively, in the same assumed identity. He was later
arrested and pled guilty to making a false statement in an application for
a passport. He was sentenced to time served (about 7 months) and returned
to California to stand trial for murdering his wife. In a third example, a
woman obtained a U.S. passport for herself and her daughter using the
assumed identity of a friend and that friend's daughter. The individual
fled the country, but was eventually caught, returned to the United
States, and tried for forgery, criminal impersonation, and child
abduction.

    Various Other Methods Used to Fraudulently Obtain Passports

Applicants commit passport fraud through other means, including submitting
false claims of lost, stolen, or mutilated passports; child substitution;
and counterfeit citizenship documents. Some fraudulently obtain new
passports by claiming to have lost their passport or had it stolen or that
it was damaged. For example, one individual who used another person's
Social Security number and Ohio driver's license to report a lost passport
obtained a replacement passport through the one-day expedited service.
This fraudulently obtained passport was used to obtain entry into the
United States 14 times in less than three years. Diplomatic Security
officials told us that another means of passport fraud is when individuals
obtain replacement passports by using expired passports containing
photographs of individuals they closely resemble. This method of fraud is
more easily and commonly committed with children, with false applications
based on photographs of children who look similar to the

child applicant.8 Assuming the identity of a deceased person is another
means of fraudulently applying for a passport. Diplomatic Security
investigated an individual who had been issued a passport in the identity
of a deceased person and was receiving Social Security benefits in the
deceased person's name. The individual was charged with making false
statements on a passport application.

    Passports Used to Commit Other Crimes

According to State Bureau of Diplomatic Security documents, passport fraud
is often commited in connection with other crimes, including narcotics
trafficking, organized crime, money laundering, and alien smuggling.
According to Diplomatic Securityofficials, concerns exist within the law
enforcement and intelligence communities that passport fraud could also be
used to help facilitate acts of terrorism. Using a passport with a false
identity helps enable criminals to conceal their movements and activities,
according to a State Department document. U.S. passports provide their
holders free passage into our country with much less scrutiny than is
given to foreign citizens. U.S. passports also allow visa-free passage
into many countries around the world, providing obvious benefits to
criminals operating on an international scale. According to State
officials, the most common crime associated with passport fraud is illegal
immigration. For example, one woman was recently convicted for organizing
and leading a large-scale passport fraud ring that involved recruiting
American women to sell their children's identities, so that foreign
nationals could fraudulently obtain passports and enter the United States
illegally. According to the Department of State, the woman targeted
drug-dependent women and their children, paying them about $300 for each
identity and then using the identities to apply for passports. The woman
then sold the fraudulently obtained passports to illegal aliens for as
much as $6,000 each. Other leaders of alien smuggling rings have also been
recently convicted. One such ring had been smuggling hundreds of
undocumented aliens from Ecuador and other parts of South America into the
United States for fees of $12,000 to $14,000 each.

8In an effort to address this problem, State established a new requirement
in February 2004 that children aged 14 and under appear with their parents
when applying for a passport to allow comparison of the children to the
photographs being submitted.

  State Faces Challenges to Fraud Detection Efforts

State faces a number of challenges to its passport fraud detection
efforts. Limited interagency information sharing between State and law
enforcement and other agencies makes it more difficult to protect U.S.
citizens from terrorists, criminals, and others who would harm the United
States. Intra-agency information sharing between passport-issuing offices
and headquarters, and between offices, is also limited because State lacks
a centralized and up-to-date fraud library accessible by all staff.
Additionally, insufficient fraud prevention staffing, training, and
oversight has resulted in reduced fraud detection capabilities at the
issuing offices. Finally, overstretched investigative resources within
State's Bureau of Diplomatic Security and Office of Inspector General have
prevented investigators from devoting adequate time and continuity to
passport fraud investigations.

    Limited Interagency Information Sharing May Allow Individuals with Terrorism
    Ties and Criminal Fugitives to Obtain Passports

State Lacks Access to TSC Database

One of the key challenges to State's fraud detection efforts is limited
interagency information sharing. State does not have access to certain
information in the Terrorist Screening Center's (TSC) consolidated watch
list database. Additionally, State's CLASS name-check system does not
include names of all criminals wanted by federal and state law enforcement
authorities. Further, access to information from other agencies varies.

State currently lacks access to the names of U.S. citizen "persons of
interest" in TSC's consolidated terrorist watch list database. TSC was
created in 2003 to improve information sharing among government agencies.
By consolidating terrorist watch lists, TSC is intended to enable federal
agencies to access critical information quickly when a suspected terrorist
is encountered or stopped within the United States, at the country's
borders, or at embassies overseas. Because State's CLASS namecheck
database for passports does not contain the TSC information, U.S. citizens
with possible ties to terrorism could potentially obtain passports and
travel internationally without the knowledge of appropriate authorities.

Although TSC has been operational since December 1, 2003, State and TSC
did not begin exploring the possibility of systematically uploading data
from TSC database into passport CLASS until December 2004. State initiated
discussions with TSC after an official in State's Passport Services Office
attended an interagency meeting and became aware that information on
certain U.S. citizens was available in the TSC database. A TSC official
told us that the center had devoted substantial effort in the first 16
months

of its operation to reaching out to federal agencies that could benefit
from TSC information. However, efforts to prevent the entry of or locate
foreign citizens who would do harm to the United States had been a higher
immediate priority in the early stages of operation than
information-sharing efforts involving U.S. citizens. The official also
noted that, while TSC plays an outreach role with other agencies, it is up
to the individual agencies involved to define their own specific
information requirements.

State and TSC have not reached an agreement about the informationsharing
proposal, though State sent an official proposal to TSC in January 2005.
TSC has noted that it is in the process of addressing certain legal
questions relating to privacy. A TSC official told us that she does not
foresee any technical limitations because TSC already has an "elaborate
interface" with State's CLASS system for visas. She added that TSC agrees
that it is important to work out an agreement with State.

State's CLASS Name-Check Because the FBI and other law enforcement
agencies do not currently System Does Not Include Names provide State with
the names of all individuals wanted by federal law

of All Fugitives Wanted by Federal and State Law Enforcement Authorities

enforcement authorities, State's CLASS name-check system does not contain
the names of many federal fugitives, some wanted for murder and other
violent crimes; these fugitives could therefore obtain passports and
potentially flee the country. The subjects of federal felony arrest
warrants are not entitled to a U.S. passport. According to FBI officials,
FBI databases contain the names of approximately 37,000 individuals wanted
on federal charges. State Department officials acknowledge that many of
these individuals are not listed in CLASS. We tested the names of 43
different federal fugitives and found that just 23 were in CLASS;
therefore, passport examiners would not be alerted about the individuals'
wanted status if any of the other 20 not in CLASS applied for a passport.
One of these 20 did obtain a U.S. passport 17 months after the FBI had
listed the individual in its database as wanted.

A number of the 20 federal fugitives who were included in our test and
were found not to be in CLASS were suspected of serious crimes, including
murder. Table 1 lists the crimes suspected of the federal fugitives in our
test. Fourteen were wanted by the FBI-including one on its Ten Most Wanted
list (the names of all 14 were posted on the FBI's Web site). Six other
fugitives not in CLASS were wanted by other federal agencies-two by the
U.S. Marshal's Service; two by the Bureau of Alcohol, Tobacco, Firearms,
and Explosives; and two by the U.S. Postal Service.

Table 1: Crimes Suspected of 20 Federal Fugitives Not in CLASS Who Were
Included in Our Test

                       Type of crime Number of fugitives

Murder

Felonious assault and related crimes

Child sex offenses

Drug trafficking

Attempted murder

Bombings

Other crimes

Sources: Various law enforcement agency databases and Web sites and the
State Department's CLASS name-check system.

State officials told us they had not initiated efforts to improve
information sharing with the FBI on passport-related matters until the
summer of 2004 because they had previously been under the impression that
the U.S. Marshal's Service was already sending to CLASS the names of all
fugitives wanted by federal law enforcement authorities. The officials
noted that the U.S. Marshal's Service had been cooperative in providing
names to CLASS from its main database of fugitives. However, prior to the
summer of 2004, State officials were not aware that the information in the
U.S. Marshal's database was not as comprehensive as that contained in the
FBI-operated National Crime Information Center database. State officials
became aware of this situation when the union representing passport
examiners brought to their attention that a number of individuals on the
FBI's Ten Most Wanted list were not in CLASS.

In the summer of 2004, State requested, and the FBI agreed, to provide the
names from the FBI's Ten Most Wanted list, though State officials told us
they often obtain this information by periodically checking the FBI's Web
site. As part of these discussions, State and FBI explored other
information-sharing opportunities as well, and FBI headquarters officials
sent a message instructing agents in its field offices how to provide
names of U.S. citizens who are FBI fugitives (other than those from the
Ten Most Wanted list) to State on a case-by-case basis. Additionally,
State began discussions with the FBI about receiving information on
individuals with FBI warrants on a more routine and comprehensive basis.
During the most recent negotiations, in December 2004, FBI officials told
State officials that they would need a written proposal outlining State's
specific technical and information needs, following which negotiations
could begin to develop a formal agreement. One possibility that was
discussed for additional name

sharing was for the FBI to send State weekly extracts from its databases,
while another possibility would be to give State officials the ability to
access the FBI's wanted-persons database. According to State, it sent a
written request to the FBI outlining its needs in April 2005. State also
noted that it had reached agreement in principal with the FBI on
information sharing efforts related to FBI fugitives.

According to FBI officials, State requested that the FBI provide only the
names of FBI fugitives and not those of individuals wanted by other
federal law enforcement entities. A State official told us that the
information provided by the U.S. Marshal's Service together with that to
be requested from the FBI would enable State to meet its regulatory
requirement that it not issue passports to subjects of federal felony
arrest warrants. However, we noted that the limited information State was
receiving on fugitives wanted by the U.S. Marshal's Service was not as
comprehensive or up to date as State officials believed: two of nine
individuals wanted by the U.S. Marshal's Service were not in CLASS at the
time of our test. The FBI is the only law enforcement agency that
systematically compiles comprehensive information on individuals wanted by
all federal law enforcement agencies, and, according to FBI officials, it
is the logical agency to provide such comprehensive information to State.

The FBI is also the only law enforcement agency that compiles
comprehensive information on individuals wanted by state and local
authorities. According to FBI officials, FBI databases contain the names
of approximately 1.2 million individuals wanted on state and local charges
nationwide. FBI officials told us they believed it would be more useful
for State to have a more comprehensive list of names that included both
federal and state fugitives. These officials pointed out that some of the
most serious crimes committed often involve only state and local charges.
We tested the names of 24 different state fugitives and found that just 7
were in CLASS; therefore, the CLASS system would not flag any of the other
17, were they to apply for a passport.9 Table 2 lists the crimes suspected
of the 17 state fugitives not in CLASS who were included in our test.

9We also noted that 10 of the 20 tested federal fugitives that were not in
CLASS were also wanted on state charges. Thus, if State fugitives had been
listed in CLASS, these individuals would have been flagged, even if
information on their federal warrants had been missed.

Table 2: Crimes Suspected of 17 State Fugitives Not in CLASS Who Were
Included in Our Test

                       Type of crime Number of fugitives

Murder

Felonious assault and related crimes

Child sex offenses

Attempted murder

Child kidnapping

Other crimes

Sources: Various law enforcement agency databases and Web sites and the
State Department's CLASS name-check system.

State Department officials told us that having a comprehensive list of
names that included both federal and state fugitives could "clog" State's
CLASS system and slow the passport adjudication process. They also
expressed concern that the course of action required of State would not
always be clear for cases involving passport applicants wanted on state
charges. The officials pointed out that, though the law is specific about
denying passports to individuals wanted on federal felony charges, the law
was not as clear cut about doing so in the case of state fugitives.
However, FBI officials told us that, at a minimum, State could notify law
enforcement authorities that such individuals were applying for a
passport. Then, the relevant law enforcement authorities could make their
own determination about whether to obtain a court order that would provide
a legal basis for denying the passport or to simply arrest the individual
or take some other action. State officials noted that, to work
effectively, such an arrangement would require the FBI to establish some
sort of liaison office that State could contact in such instances.

Access to Information from State receives varying degrees of information
from several other agencies,

                             Other Agencies Varies

including the Department of Health and Human Services, the Department of
Homeland Security (DHS), the Social Security Administration (SSA), and
individual state departments of motor vehicles.

o 	Health and Human Services provides names of parents who have been
certified by a state agency as owing more than $5,000 in child support
payments and are therefore not eligible for a U.S. passport. According to
State officials, this information-sharing arrangement has been very
successful in preventing such individuals from obtaining passports.

o 	State is negotiating with DHS to gain access to naturalization records
to verify applicants' citizenship. State officials currently rely on ad
hoc information from DHS colleagues, according to Passport Services
officials, and irregular notifications from DHS when fraudulent passports
are confiscated.

o 	State currently uses limited information from Social Security records
which are quickly becoming outdated that SSA provided to State on a
one-time basis in 2002. Though State and SSA signed an April 2004
memorandum of understanding giving State access to SSA's main database to
help verify passport applicant's identity, the memorandum had not been
implemented as of March 2005 because the system was still being tested to
ensure SSA privacy standards. The agreement will not include access to SSA
death records, though State officials said they are exploring the
possibility of obtaining these records in the future.

o 	Issuing office officials have contact with officials in individual
state departments of motor vehicles to confirm, for example, the physical
characteristics of individuals presenting drivers licenses as
identification. However, these are informal contacts cultivated by
individual State officials.

    Limited Intra-agency Information Sharing and Unclear Fraud Support
    Responsibilities May Be Affecting Fraud Detection Capability

State does not maintain a centralized and up-to-date electronic fraud
prevention library, which would enable passport-issuing office personnel
in the United States, and overseas, to efficiently share fraud prevention
information and tools. As a result, fraud prevention information is
provided inconsistently to examiners among the 16 domestic offices. Though
offices share information through local fraud prevention files or by
e-mailing relevant fraud updates, the types and amount of information
shared with passport examiners in each office vary widely. For example, at
some offices, examiners maintain individual sets of fraud prevention
materials. Some print out individual fraud alerts and other related
documents and file them in binders. Others archive individual e-mails and
other documents electronically. Some examiners told us that the sheer
volume of fraudrelated materials they receive makes it impossible to
maintain and use these resources in an organized and systematic way.

In contrast, the issuing office in Seattle developed its own online fraud
library that contained comprehensive information and links on fraud alerts
nationwide. Some information was organized by individual state, including
information such as the specific serial numbers of blank birth
certificates

that were stolen. The library contained sections on Social Security
information, government documents related to U.S. territories, recent
fraud updates, and fraud-related news, among other information. It
included examples of legitimate as well as counterfeit naturalization
certificates, false driver's licenses, fraud prevention training
materials, and a host of other fraud prevention information resources and
links. Seattle offered a static version of its library on CD-ROM to other
issuing offices at an interoffice fraud prevention conference in 2003. A
few of the other offices used this resource to varying degrees, but their
versions have not been regularly updated since 2003. An Office of Consular
Fraud Prevention official told us that they uploaded at least some of the
information onto its Web site, but that material has not been regularly
updated, either. The developer of the library has since been reassigned.
Most of the 16 fraud prevention managers we talked to believed that the
Bureau of Consular Affairs should maintain one centralized, up-to-date
fraud prevention library, similar to the Seattle-developed model, that
serves offices nationwide.

Consular Affairs' Office of Consular Fraud Prevention maintains a Web site
and "e-room" with some information on fraud alerts, lost and stolen state
birth documents, and other resources related to fraud detection, though
fraud prevention officials told us the Web site is not kept up to date, is
poorly organized, and is difficult to navigate. Fraud prevention officials
also told us that most of the information on the site relates to visas
rather than U.S. passports. We directly observed information available on
this Web site and in the "e-room" during separate visits to State's
passportissuing offices and noted that some of the material was outdated.
For example, in September 2004, we noted that certain information on state
birth and death records had not been updated since September 2003 and that
information on fraudulent U.S. passports had not been updated in more than
a year.

In addition to limited information sharing, State's fraud prevention
support services are not closely coordinated with the passport-issuing
offices. Multiple headquarters offices, including the Office of Consular
Fraud Prevention and Office of Passport Policy Planning and Legal Advisory
Services, claim some responsibility for fraud trend analysis and fraud
prevention support but fraud detection personnel in issuing offices are
unclear as to which offices provide which services. Most of the 16 fraud
prevention managers we interviewed said they do not clearly understand the
respective roles of these headquarters offices in helping them with their
fraud detection efforts. Also, while officials in these two offices said
they

are responsible for analyzing fraud-related data to identify national or
region-specific trends on factors such as the types, methods, and
perpetrators of fraud, most fraud prevention managers told us they could
not recall having received much analysis on fraud trends from these
offices beyond individual fraud alerts. We noted that the Office of
Passport Policy Planning and Legal Advisory Services only recently began
to perform some basic fraud trend analysis on a systematic basis.10 Office
of Consular Fraud Prevention officials told us they spend most of their
time on visa fraud because each domestic agency has its own fraud
detection apparatus. While this office provides some training services,
these are limited, and much other training is provided by issuing offices
and is not coordinated with headquarters.

    Insufficient Fraud Prevention Staffing, Training, Oversight, and
    Investigative Resources Make Fraud Detection More Difficult

Staffing Change Reduced Time Available to Review Fraud Cases

Limited fraud prevention staffing, training, oversight, and investigative
resources pose additional challenges to fraud detection efforts. A
staffing realignment reduced the time available to Fraud Prevention
Mangers to review cases and make decisions on fraud referrals.
Additionally, interoffice transfers of passport adjudications have, in
some cases, led to fewer fraud referrals back to the originating offices.
Further, State's lack of a standard refresher training curriculum and
schedule has led to uneven provision of such training. Additionally,
sporadic training and limited oversight of passport application acceptance
agents constitute a significant fraud vulnerability. Finally,
overstretched investigative resources hinder fraud detection efforts.

In January 2004, State eliminated the assistant fraud prevention manager
position that had existed at most of its domestic passport-issuing
offices, and most Fraud Prevention Managers believe that this action was
harmful to their fraud detection program, in part by overextending their
own responsibilities. State eliminated the permanent role of assistant
primarily to expand participation of senior passport examiners serving in
that role on a rotational basis; the purpose was to help the examiners
gain a deeper knowledge of the subject matter and, in turn, enhance
overall fraud detection efforts when the examiners returned to
adjudicating passport

10About 10 years ago, the Office of Consular Fraud Prevention stopped
doing case work on individual potentially fraudulent applications in an
effort to become more involved with overall program management and to
identify overall trends.

applications.11 Prior to the permanent position being abolished, 12 of the
16 passport issuing offices had at least one assistant manager (2 offices
had two).12 Of the 4 offices that did not have permanent assistants, 3 did
not have them because they had relatively low workloads and 1 had been in
operation only for a few years and had not yet filled the position.
Managers at 10 of the 12 offices that had assistants told us that the loss
of this position had been harmful to their fraud detection program. In
particular, managers indicated that the loss of their assistant impacted
their own ability to concentrate on fraud detection by adding to their
workload significant additional training, administrative, and networking
responsibilities. Fraud Prevention Managers also said that taking on their
assistant's tasks had diverted their attention from their fraud trend
analysis as well as their preparation of reports to Washington, D.C., and
cases for referral to Diplomatic Security. Some managers said they are now
performing more case work than before because they lack an experienced
assistant and do not always believe they can rely on rotating staff to do
this work unsupervised.

Fraud Prevention Managers and other State officials have linked declining
fraud referrals to the loss of the assistant fraud prevention manager
position. In the 12 offices that previously had permanent assistants,
fraud referral rates from the managers to Diplomatic Security decreased
overall by almost 25 percent from fiscal year 2003 through 2004,13 the
period during which the position was eliminated, and this percentage was
much higher in some offices.14 Fraud Prevention offices screen fraud
referrals received from examiners, perform certain checks on applicant
information, and

11All 16 offices now have senior examiners rotate through the fraud
office-generally two at a time, one short and one longer term. The
long-term rotator is expected to do some of the tasks the assistant
manager performed; however, Fraud Prevention Managers said that not all
long-term rotational staff are capable of handling these tasks as well as
the permanent assistants had. Further, most managers spend considerable
time training rotating staff coming into the fraud office.

12Of the 12 offices, 10 already had senior examiners routinely rotating
through the office to assist in running the fraud prevention program.

13In the 4 offices that did not previously have permanent assistants,
fraud referral rates decreased on average by only 7 percent during the
same period. As noted, 3 of these offices have low workloads. One of the 4
has the second highest workload nationwide, and its fraud referral rate
remained relatively static during this period.

14Two offices that had assistant fraud prevention managers in 2003 saw
increases in their fraud referral rates. These 2 offices received just
over 8 percent of the total applications received by offices that had
assistants.

assess the examiner's rationale for making the referral before the fraud
prevention manager can determine whether to refer the case to Diplomatic
Security for further investigation. Without their assistants helping them
with these and other duties, managers said they are making fewer fraud
referrals to Diplomatic Security because they lack the time and do not
believe they can fully rely on new rotational staff to take on this
responsibility. In one issuing office where referrals to Diplomatic
Security were down 41 percent, the manager indicated that loss of his
assistant had slowed his ability to get cases to Diplomatic Security
because he had to perform many of the assistant's duties. A Diplomatic
Security agent in another issuing office, where the fraud referral rate
was down by 55 percent, said the overall effect of eliminating the
assistant manager position had been harmful to fraud detection efforts at
least in part because the permanently assigned assistants had developed
valuable personal contacts and cooperative arrangements over time with
state and local law enforcement authorities, department of motor vehicle
officials, and others, and that such relationships could not be easily
developed or maintained by rotating staff.

Most Fraud Prevention Managers acknowledged the value of having senior
examiners rotate into the fraud prevention office for temporary
assignments; however, the managers said that rotating staff should augment
the efforts of a permanent assistant and not serve in place of that role.
Passport Services management told us they were not planning to reestablish
the permanent assistant role,15 but that they are in the process of
filling one to two additional fraud prevention manager positions at each
of the 2 offices with the largest workloads nationwide. Both of these
offices operate multiple shifts each workday, and the new managers are
intended to provide more comprehensive fraud prevention support for all of
the shifts. State also plans to establish one additional fraud prevention
manager position at another issuing office with a large workload. There
are no current plans for additional positions at any of the other 13
offices.

15State officials told us they did not wish to re-establish the permanent
assistant fraud manager role at least in part because it had never been an
official State Department position with a position description.

Interoffice Transfers of Passport Adjudication Workload Result, in Some
Cases, in Fewer Fraud Referrals Back to Originating Office

As adjudication workload and production capacity fluctuate at individual
passport-issuing offices, State routinely transfers adjudication cases
among the different offices to keep workload and capacity in balance at
each location. Fraud Prevention Managers at a number of issuing offices
said they had noticed that a lower percentage of fraud referrals are being
returned to them from the 3 offices that were assigned the bulk of
workload transfers from other offices.16 The Fraud Prevention Managers
noted that, over the course of a year, the many thousands of passport
applications originating from one particular region should generally be
expected to generate a consistent rate of fraud referrals. In fiscal year
2004, 28 percent of passport applications were transferred to 1 of these 3
offices for adjudication, while other issuing offices adjudicated 72
percent. Although these 3 offices received 28 percent of the applications,
they provided only 11 percent of total fraud referrals to the originating
agencies; the other 89 percent were provided by regional agency passport
examiners (74 percent) and others, including acceptance agents (15
percent). For fiscal year 2003, the 3 processing centers adjudicated 26
percent of the applications but provided only 8 percent of the fraud
referrals. In 2004, 1 of the issuing offices transferred out to processing
centers 63 percent of its applications (about 287,000) but received back
from the processing centers only 2 percent of the fraud referrals it
generated that year. In 2003, this office transferred out 66 percent of
its workload, while receiving back only 8 percent of its total fraud
referrals.

Fraud Prevention Managers and other officials told us that one reason
fewer fraud referrals return from these 3 offices is that passport
examiners handling workload transfers from a number of different regions
are not as familiar with the demographics, neighborhoods, and other local
characteristics of a particular region as are the examiners who live and
work there. For example, some officials noted that, in instances when they
suspect fraud, they might telephone the applicants to ask for additional
information so they can engage in polite conversation and ask casual
questions, such as where they grew up, what school they attended, and
other information. The officials noted that, since they are familiar with
at least some of the neighborhoods and schools in the area, applicants'
answers to such questions may quickly indicate whether their application
is

16Two of these 3 offices-Charleston, South Carolina, and Portsmouth, New
Hampshire- are passport processing "megacenters" that do not cover a
specific region of the country but rather process applications from across
the country. The third office, New Orleans, does cover a specific region;
however, it also performs some of the functions of a megacenter by
processing a substantial number of applications that originate in regions
other than its own.

likely to be fraudulent. One examiner in an office that handled workload
transfers from areas with large Spanish-speaking populations said that the
office had an insufficient number of examiners who were fluent in Spanish.
She and other officials emphasized the usefulness of that skill in
detecting dialects, accents, handwriting, and cultural references that
conflict with information provided in passport applications. Moreover,
some officials added that passport examiners at centers handling workload
transfers are not always well trained in region-specific fraud indicators
and do not have the same opportunity to interact directly with applicants
as do the examiners working at public counters in regional offices.

State Lacks Established State has not established a core curriculum and
ongoing training

Refresher Training Curriculum; requirements for experienced passport
examiners, and thus such training is

Such Training Is Provided provided unevenly at different passport-issuing
offices. While State

Unevenly across Offices	recently developed a standardized training program
for new hires that was first given in August 2004, the Fraud Prevention
Managers at each passportissuing office have developed their own fraud
detection refresher training approaches and materials. We reviewed the
training programs and materials at all 7 issuing offices we visited and
discussed the programs and materials at other offices with the remaining
nine Fraud Prevention Managers by telephone and found that the topics
covered and the amount and depth of training varied widely by office. Some
had developed regionspecific materials; others relied more heavily on
materials that had been developed by passport officials in Washington,
D.C., much of which were outdated. Some scheduled more regular training
sessions, and others held training more sporadically. Several examiners
told us they had not received any formal, interactive fraud prevention
training in at least 4 years.

Some Fraud Prevention Managers hold brief discussions on specific fraud
cases and trends at monthly staff meetings, and they rely on these
discussions to serve as refresher training. Some Fraud Prevention Managers
occasionally invite officials from other government agencies, such as the
Secret Service or DHS, to share their fraud expertise. However, these
meetings take place when time is available and may be canceled during busy
periods. For example, officials at one issuing office said the monthly
meetings had not been held for several months because of high workload;
another manager said he rarely has time for any monthly meetings; and two
others said they do not hold such discussions but e-mail to examiners
recent fraud trend alerts and information.

Sporadic Training and Limited Oversight of Acceptance Agents Constitute
Significant Fraud Vulnerability

Numerous passport-issuing agency officials and Diplomatic Security
investigators told us that the acceptance agent program is a significant
fraud vulnerability. Examples of acceptance agent problems that were
brought to our attention include important information missing from
documentation, such as evidence that birth certificates and parents'
affidavits concerning permission for children to travel had been received,
and identification photos that did not match the applicant presenting the
documentation. Officials at one issuing office said that their office
often sees the same mistakes multiple times from the same agency.

These officials attributed problems with applications received through
acceptance agents to the sporadic training provided for and limited
oversight of acceptance agents. State has almost 7,000 passport acceptance
agency offices, and none of the 16 issuing offices provide comprehensive
annual training or oversight to all acceptance agency offices in their
area. Instead, the issuing offices concentrate their training and
oversight visits on agency offices geographically nearest to the issuing
offices, those in large population centers, those where examiners and
Fraud Prevention Managers had reported problems, and those in high fraud
areas.17 Larger issuing offices in particular have trouble reaching
acceptance agency staff. At one larger issuing office with about 1,700
acceptance facilities, the Fraud Prevention Manager said he does not have
time to provide acceptance agent training and that it is difficult for
issuing office staff to visit many agencies. A manager at another large
issuing office that covers an area including 11 states said she does not
have time to visit some agencies in less populated areas and concentrates
her efforts in higher fraud areas, which tend to be in the larger cities.

Officials at one issuing agency noted that State had worked together with
the U.S. Postal Service to develop CD-ROM training for use at Postal
Service acceptance facilities. The officials noted that, while they
believed the training had been well designed, State does not have any way
of tracking whether all postal employees responsible for accepting
passport applications actually receive the training. Additionally, issuing
office officials also said that acceptance agent staff should receive
training from outside agencies such as state departments of motor
vehicles, local police,

17Management officials at one office said some acceptance facilities have
a particularly high fraud risk and their work has to be scrutinized
carefully. Management officials at another issuing office said their goal
is to train all acceptance agents once every 3 years, but that they have
not yet reached this goal.

and the FBI on document authenticity and fraud. Other issuing office
officials said acceptance agents should also receive interview training.

Finally, while State officials told us it is a requirement that all
acceptance agency staff be U.S. citizens, issuing agency officials told us
they have no way of verifying that all of them are. Management officials
at one passportissuing office told us that, while their region included
more than 1,000 acceptance facilities, the office did not maintain records
of the names of individuals accepting passport applications at those
facilities and the office did not keep track of how many individuals acted
in this capacity at those facilities.

Overstretched Investigative Although State's Bureau of Diplomatic Security
has provided additional

Resources Hinder Fraud resources for investigating passport fraud in
recent years, its agents must

Detection	still divide their time among a number of competing demands,
some of which are considered a higher priority than investigating passport
fraud. A Diplomatic Security official told us that, after the September 11
terrorist attacks, the bureau hired about 300 additional agents, at least
partially to reduce investigative backlogs.18 Diplomatic Security and
passport officials told us that, while the increased staff resources had
helped reduce backlogs to some degree, agents assigned to passport fraud
investigations are still routinely pulled away for other assignments. For
example, a significant number of agents from field offices across the
country are required to serve on "protective detail" in New York when the
United Nations General Assembly convenes and at various other diplomatic
events. We found that at most of the offices we visited during our
fieldwork, few of the agents responsible for investigating passport fraud
were actually physically present. At one office, all of the agents
responsible for investigating passport fraud were on temporary duty
elsewhere, and the one agent who was covering the office in their absence
had left his assignment at the local Joint Terrorism Task Force to do so.
A number of agents were on temporary assignments overseas in connection
with the 2004 Summer Olympics in Greece. Agents at one office said that
five of the eight agents involved in passport fraud investigations there
were being sent for temporary duty in Iraq, as were many of their
colleagues at other offices.

18State officials also noted that the Bureau of Consular Affairs funds
more than 120 Diplomatic Security agent positions nationwide to help
support efforts to investigate passport fraud.

Agents at all but 2 of the 7 bureau field offices we visited said they are
unable to devote adequate time and continuity to investigating passport
fraud because of the competing demands on their time. The agents expressed
concerns about the resulting vulnerability to the integrity of the U.S.
passport system. We noted that the number of new passport fraud
investigations had declined by more than 25 percent over the last five
years, though Diplomatic Security officials attributed this trend, among
other factors, to refined targeting of cases that merit investigation. A
number of Diplomatic Security agents pointed out that passport fraud
investigations are often "time sensitive" and that opportunities to solve
cases are often lost when too much time elapses before investigative
efforts are initiated or when such efforts occur in fits and starts. The
rotation of Diplomatic Security agents to new permanent duty stations
every 2 or 3 years also makes it more difficult to maintain continuity for
individual investigations. Passport-issuing office officials told us that
cases referred to Diplomatic Security sometimes take a year or more to
investigate. The officials also said that the investigating agents often
do not have time to apprise passport-issuing offices of the status of
individual investigations and, thus, that the opportunity to convey
valuable "real-time" feedback on the quality of fraud referrals was lost.
The Special-Agent-in-Charge of a large Diplomatic Security field office in
a high fraud region expressed serious concern that, in 2002, the Bureau of
Diplomatic Security began requiring that most cases be closed after 12
months, whether or not the investigations were complete. This requirement
was meant to reduce the backlog of old cases. The agent said that about
400 cases at his office were closed before the investigations were
complete and that this action had taken place over his strenuous
objection. A Diplomatic Security official in Washington, D.C., told us
that, while field offices had been encouraged to close old cases that were
not likely to be resolved, there had not been a formal requirement to
close all cases that had remained open beyond a specific time limit.

State officials agreed that Diplomatic Security agents are not currently
able to devote adequate attention to investigating passport fraud. State
officials told us that the Bureau of Diplomatic Security plans to hire 56
new investigative agents over the next few years to augment passport fraud
investigation resources at each Diplomatic Security field office
nationwide. According to State officials, these new investigators will be
solely dedicated to investigating passport and visa fraud and will not
participate in protective details or other temporary duties that would
distract them from their investigative work. The new hires are to be civil
service employees and will not be subject to the frequent rotations to new
duty

stations that regular Diplomatic Security agents experience as
foreignservice officers.

State Department OIG officials told us that the OIG also has authority to
investigate passport fraud. However, OIG officials told us that budgetary
constraints and related staffing reductions in recent years had severely
restricted its ability to investigate such fraud. The OIG has invested
more resources in efforts to pursue visa fraud, primarily because visa
fraud is more prevalent than passport fraud. The OIG has focused most of
its more recent passport-related efforts on assessing systematic
weaknesses in fraud detection efforts. The idea was to produce broad
findings that would be of greater benefit than individual passport fraud
investigations could be expected to yield with such a low investment of
staff resources available.

  Effect of New Examiner Performance Standards on Fraud Detection Remains
  Unclear

Although State's approach to developing new nationwide passport examiner
production standards, which were implemented in January 2004, raises a
number of methodological concerns, subsequent changes to the standards
make an assessment of their impact on fraud detection premature. State
intended that the new nationwide standards would make performance
expectations and work processes more uniform among its 16 issuing offices.
State tested examiner production capabilities before standardizing the
passport examination process and used the test results in conjunction with
old standards to set new nationwide standards. The new standards put
additional emphasis on achieving quantitative targets. Responding to
concerns about their fairness, State made a number of modifications to the
production standards during the year, making it unclear what impact the
standards have had on passport fraud detection.

    Methodological Concerns Exist Regarding State's Development and
    Implementation of New Performance Standards

Consular Affairs officials stated that they created nationwide production
standards to make performance expectations of examiners and the passport
examination process as similar as possible at all domestic passport
offices. Though the issuing offices already had production standards for
their examiners, the average number of cases examiners were expected to
adjudicate per hour varied from office to office, creating confusion and
raising questions about equity among passport examiners, according to
State officials. In an effort to identify reasonable production standards
that would be applicable nationwide, State tested examiner production
capabilities at all of its domestic passport-issuing offices. Issuing
office management in each of the 16 offices measured the number

of passport cases completed by each examiner over a two-week period in
April 2003 and computed the hourly average for their office. Management
did not inform examiners that their production rates were being measured
for the test.

Passport Services officials set the new performance standards, but they
did not fully standardize some work processes and methods of counting
production until after the new numbers were set. After considering
nationwide test results, offices' old standards, and passport office
partnership council feedback,19 headquarters officials at Passport
Services decided on the new standards for both desk and counter
adjudication. The new standards were implemented in January 2004 and
varied by pay grade level. After deciding on the production standards,
State standardized the work processes and counting methods that were the
basis of examiners' production averages. For example, State officials
encouraged all domestic passport offices to include expedited cases in
examiners' production averages to make examiners' work more comparable
nationwide, though some examiners and issuing office managers said
expedited cases take longer to complete because they require additional
steps. Also, State's decision to base examiner's production averages on a
7-hour day starting in January 2004 marked a change for offices that
previously had measured production based on a 6 1/2- or 7 1/2-hour day.

State's decision to measure and compile nationwide production averages
before fully standardizing the application examination process and the way
completed cases are counted at the passport-issuing offices limited the
validity of State's test results. GAO has reported that consistency is a
key element for data reliability and that the data obtained and used must
be clear and well-defined enough to yield similar results in similar
analyses. However, we found that State had attempted to uniformly measure
production capacity at its 16 issuing offices when the individual offices
were still using differing work processes and methods of counting
production. Upon visiting 7 of the 16 offices after the new standards had
been implemented, we found that several differences in passport
adjudication practices and methods for counting production still existed.
For example, at some offices, the more complex and time-consuming cases
were included in examiner production averages, while at other offices they
were not. In addition, issuing office and headquarters management told us

19Passport office partnership council participants include issuing office
management and union-designated employees.

that contract staff at some issuing offices performed certain tasks that
helped speed up examiner production, while such tasks were performed by
examiners at other offices. State told us 5 months after they had
implemented the standards that domestic offices' requirements for counting
completed cases still varied and that this situation could make it easier
for examiners at some offices to meet their production standard. State
officials acknowledged that these processes and procedures should be
standardized to ensure that the standards are fair. If State had
standardized its work processes and procedures for measuring performance
before testing production, the test would presumably have produced more
valid results that could have been used to set uniformly attainable
production standards.

    Production Standards' Effect on Fraud Detection Unclear

Because State adjusted the impact of production on examiners' evaluations,
the production standards implemented in 2004 placed increased pressure on
examiners to focus on production numbers. Before State introduced the new
standards, quantitative production requirements were grouped together with
qualitative measures for performance ratings. For example, one former
evaluative element paired the requirement that a GS-11 examiner adjudicate
25 to 28 cases per hour with a qualitative assessment of the examiner's
overall knowledge of the adjudication process. Supervisors and management
officials at some of the domestic passport offices we visited said that if
in previous years examiners failed to meet their minimum production
number, the supervisor could still rate the examiner fully successful
based on better performance against qualitative standards within the same
rating element. However, the 2004 standards separated the quantitative
performance measures-production numbers and error rates-from qualitative
elements. Examiners not meeting the minimum hourly production average for
the year were to receive an unsuccessful rating on that performance
element, regardless of qualitative performance.20 An unsuccessful rating
in one element results in an unsuccessful rating overall, even if the
examiner rates outstanding in the other three skill elements. State
officials said they made this change to clarify the criteria on which
examiners were rated.

20Examiners meeting the production requirement but not meeting minimal
requirements in the areas of adjudicative knowledge, customer service, or
fraud prevention would also receive an unsuccessful rating.

Since the new production standards were set, State has incorporated
computer upgrades and process changes that have enhanced fraud detection,
but may have slowed the examination process. For example, at passport
office counters, State upgraded the computer system to allow examiners to
perform cashiering functions and to produce a receipt immediately for all
financial transactions, thus adding time to each case requiring a fee. In
addition, State added a page to the standard passport application in March
2005, thus requiring more information from each new applicant.
Headquarters officials, regional office managers, and examiners agreed
that these changes enhance fraud prevention efforts. But while they were
pleased with the enhanced fraud detection capabilities, some examiners and
examiners' union representatives told us the changes may slow production
now that examiners are required, for example, to scrutinize longer
applications.

Passport examiners and union officials argue that the new standards'
emphasis on production combined with changes to the examination process
have made it more difficult to meet the new production standards without
shortcutting fraud detection efforts. Some examiners we talked to said
changes to annual evaluation criteria and to the examination process put
additional pressure on them to focus on their numbers more than their
efforts to detect fraud. Some also told us they believe the new standards
were evidence that management prioritizes quantity of work over quality.
Union representatives said examiners frequently complain that, to achieve
their number targets, they have to skip required steps in the examination
process or scrutinize applications less thoroughly than necessary to
adequately detect fraud. A number of examiners at each domestic office we
visited either stated they take shortcuts themselves or know colleagues
who do. Some said, for example, they do not thoroughly check Social
Security information provided on the computerized examination software
against the information on the individual's application. Others reported
they do not thoroughly check all "hits" generated by the computer
software-information that may help identify applicants flagged as
fugitives or raise other concerns in one of State's passport-related
databases. An examiner noted that most hits, when further scrutinized,
prove to be invalid, and thus the chances of missing a valid hit were low.
Union representatives said they are hesitant to share such examples with
passport management because examiners fear negative repercussions.

Headquarters and regional office management said it is difficult to assess
the number or magnitude of shortcuts being taken and the impact of
shortcuts on fraud detection. Management officials at some of the offices

we visited said supervisors audit only a limited percentage of cases after
they are examined and that audits would not necessarily reveal that
examiners had taken shortcuts. The impact of shortcuts on fraud detection
is also difficult to assess because the overall incidence of detected
fraud is low. One examiner noted that if she failed to check any fraud
indicators at all and granted a passport to every applicant, she would be
right more than 99 percent of the time. State data show that less than
one-half of 1 percent of applications in 2004 were identified as potential
frauds.

Because State has modified the 2004 production standards in response to
management, union, and examiner concerns, the standards' effect on fraud
detection is unclear. State officials told us that, from the outset of
implementing the production standards, they had planned to reassess the
standards regularly and to adjust them as necessary. In July 2004, State
responded to a union suggestion to reduce by one-half hour the number of
daily work hours used to calculate the hourly production average, thus
acknowledging that time examiners spend doing essential tasks, such as
reading e-mail updates, should not be factored into their hourly
production averages. Both desk and counter examination production
standards were lowered during 2004, and certain offices were exempted from
either desk or counter measurement due to regional workload variations.
One such exemption occurred in September 2004, when State informed
regional management that neither New York nor Hawaii should rate examiners
on desk examination production averages in 2004 because their desk
workloads were too low to enable a fair rating of examiners. Also,
headquarters passport management lowered the counter production
requirement for GS-9 and GS-11 passport examiners retroactive to January
1, 2004. While about 63 examiners were not achieving the required
production rate after the first quarter of 2004, all but 18 of State's
approximately 480 examiners nationwide had met the standards by the end of
the year. Because State's changes to the production standards continued
throughout 2004, the standards' net effect on fraud detection efforts
remains unclear.

Conclusions	Maintaining the integrity of the U.S. passport is an essential
component of State's efforts to help protect U.S. citizens from those who
would harm the United States. The steadily increasing volume of passports
issued each year underscores the importance of this task. State has a
range of tools and resources at its disposal to help detect passport
fraud, and it has taken a number of important measures in recent years to
enhance its efforts in this area. However, State still faces a number of
key challenges. Included

among them is limited information sharing with TSC, the FBI, and other
agencies, making it more difficult to protect the United States from
terrorists, criminals, and others. State has begun working with these
agencies to address this problem and is dependent on their cooperation to
remedy it. Limited intra-agency information sharing and insufficient fraud
prevention staffing, training, oversight, and investigative resources also
make fraud detection more difficult. Together, these challenges constitute
a serious concern to the overall effort to secure the borders of the
United States and protect its citizens.

  Recommendations for Executive Action

To improve the coordination and execution of passport fraud detection
efforts, we recommend the Secretary of State take the following six
actions:

o 	Expedite, in consultation with the U.S. Attorney General, Director of
the Federal Bureau of Investigation, and Secretary of Homeland Security,
arrangements to enhance interagency information sharing, and reach
agreement on a plan and timetable for doing so, to ensure that State's
CLASS system for passports contains a more comprehensive list of
individuals identified in the Terrorist Screening Center database as well
as state and federal fugitives and that such information is made available
to State in an efficient and timely manner.

o 	Establish and maintain a centralized and up-to-date electronic fraud
prevention library that would enable passport agency personnel at
different locations across the United States to efficiently access and
share fraud prevention information and tools.

o 	Consider designating additional positions for fraud prevention
coordination and training in some domestic passport-issuing offices.

o 	Assess the extent to which and reasons why workload transfers from one
domestic passport-issuing office to another were, in some cases,
associated with fewer fraud referrals, and take any corrective action that
may be necessary.

o 	Establish a core curriculum and ongoing fraud prevention training
requirements for all passport examiners, and program adequate time for
such training into the staffing and assignment processes at
passportissuing offices.

o 	Strengthen fraud prevention training efforts and oversight of passport
acceptance agents.

  Agency Comments and Our Evaluation

State provided written comments on a draft of this report (see app. II).
State generally concurred with our findings, conclusions, and
recommendations. State indicated that it had agreed in principle with the
FBI on information-sharing arrangements concerning subjects of federal
felony arrest warrants and planned to establish an automated mechanism for
obtaining information from the FBI on the subjects of state warrants.
State said that it was designing a centralized passport "knowledgebase"
for passport examiners that includes information on fraud prevention
resources. It said it would consider rotating GS-12 Adjudication
Supervisors through local fraud prevention offices to relieve Fraud
Prevention Managers of some of their training responsibilities. State is
also establishing a standardized national training program for passport
examiners, instituting a regular nationwide quality review program for
passport acceptance agent work, and adapting and expanding computerbased
training for U.S. Postal Service acceptance facilities for more widespread
use among acceptance agents nationwide. State did not address our
recommendation that it assess the extent to which and reasons why workload
transfers from one domestic passport issuing-office to another were, in
some cases, associated with fewer fraud referrals and to take any
corrective action that may be necessary.

The FBI also reviewed a draft of this report for technical accuracy. The
FBI's comments have been incorporated into the report, as appropriate.

As we agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days from
the date of this letter. We will then send copies to interested
congressional committees and the Secretary of State. We will also make
copies available to others on request. In addition, the report will be
available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact
me
at (202) 512-4128 or [email protected]. Additional GAO contacts and staff
acknowledgments are listed in appendix III.

Jess T. Ford
Director, International Affairs and Trade

Appendix I

Scope and Methodology

To examine how passport fraud is committed, we reviewed State Department
Bureau of Diplomatic Security closed passport fraud case files and Bureau
of Consular Affairs statistics on passport fraud. We also met with
officials at State's Diplomatic Security Headquarters Criminal Division
and at Diplomatic Security's Field Office in Miami and conducted telephone
interviews with Diplomatic Security officials at field offices in Chicago
and San Francisco.

To identify and assess the key challenges State faces in detecting
passport fraud, we directly observed State's fraud detection efforts at 7
of its 16 domestic passport-issuing offices; tested State's use of
electronic databases for fraud detection; analyzed fraud referral
statistics from the Bureaus of Consular Affairs and Diplomatic Security;
and interviewed cognizant officials in both of these bureaus. We visited
State's passport-issuing offices in Charleston, South Carolina; Los
Angeles; Miami; New Orleans; New York; Seattle; and Washington, D.C. We
chose these fieldwork locations to gain an appropriate mix of geographic
coverage, workload, levels and types of passport fraud, and
counter-to-desk adjudication ratios. In addition, we chose the Charleston
office because it is one of the two passport "megacenters" responsible for
adjudicating applications from other regions.

To test the electronic databases that State uses to help detect fraud, we
ran the names of 67 different federal and state fugitives against State's
CLASS name-check system. Our test was not intended to employ a
representative sample, and we did not generalize our results to the
universe of wanted U.S. citizens. The test results were intended to
provide a firsthand illustration of a problem that State and Federal
Bureau of Investigation (FBI) officials acknowledge exists.

o 	We selected names of individuals with federal and state warrants from a
variety of government agencies and offices-the FBI; U.S. Marshal's
Service; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Drug
Enforcement Administration; U.S. Postal Service; and various state and
local law enforcement offices. Many of the names were taken from publicly
available Internet sites, including those operated by the FBI and
Department of Justice.

o 	We verified that all of the individuals were listed as "wanted" in the
FBI's national criminal database as of the date of our test in December
2004.

Appendix I Scope and Methodology

o 	In December 2004, we supervised the entry of the name and date of birth
of each of the 67 fugitives into State's system by an Office of Passport
Services official. Three GAO employees verified each entry's accuracy.

o 	For each entry, we recorded whether State's system contained a record
of that fugitive and, if it did, we noted the type of "lookout" that had
been entered, such as wanted person information from the U.S. Marshal's
Service or a child support "lookout" from Health and Human Services.

We analyzed fraud referral statistics from the Consular Affairs Office of
Passport Services and the Bureau of Diplomatic Security for fiscal years
2000 through 2004. We reviewed the statistics and verified their accuracy
by comparing select data with the individual issuing offices' monthly
reports that are State's original source for compiling these data.
Together with Passport Services officials, we identified the methods used
to capture and compile the data and determined that the data were
sufficiently reliable and generally usable for the purposes of our study.
We did not use data elements that we did not deem reliable.

At each of the 7 offices we visited, we conducted interviews with
officials such as the Regional Director, Assistant Regional Director,
Fraud Prevention Manager, Adjudication Manager, Customer Service Manager,
supervisors, and certain passport examiners.1 We interviewed some
examiners who expressed an interest in meeting with us and chose others at
random. We conducted telephone interviews with the Fraud Prevention
Managers at all 9 of the offices that we did not visit, using a list of
questions identical to that used in interviews with their counterparts at
offices we visited. We also met with Diplomatic Security agents attached
to field offices responsible for investigating fraud suspected at the
offices we visited. In addition, we interviewed cognizant officials in
Consular Affairs' Office of Passport Services, Office of Consular Fraud
Prevention, and Consular Systems Division; the Bureau of Diplomatic
Security; and the Office of the Inspector General. We also met with FBI
and Terrorist Screening Center officials, including attorneys, to discuss
technical and potential legal issues that might affect interagency
information sharing arrangements with State.

1At each office we visited, we met with almost all of these officials. In
a few instances, one or two of these officials were not available during
our visit, and, in these cases, we addressed the relevant questions to
their superiors.

Appendix I Scope and Methodology

To assess the potential effect of new performance standards, which were
implemented in January 2004, on State's fraud detection efforts, we
reviewed the methodology and criteria that State used in developing the
new standards. We compared the adjudication processes that were in place
when State tested examiner production capacity with those in place when
State implemented the new standards and against which it applied them. We
interviewed passport examiner union representatives and select examiners
at the 7 offices we visited and the fraud prevention managers at all 16
domestic passport-issuing offices to obtain their views on the potential
effect of the new standards on fraud detection efforts. We also obtained
views on the same subject from the Consular Affairs Passport Services
officials who oversaw the development and implementation of and ongoing
adjustments to the new standards.

We conducted our work from May 2004 to March 2005 in accordance with
generally accepted government auditing standards.

                                  Appendix II

                     Comments from the Department of State

Appendix II
Comments from the Department of State

Appendix II
Comments from the Department of State

Appendix II
Comments from the Department of State

Appendix II
Comments from the Department of State

Appendix II
Comments from the Department of State

Appendix II
Comments from the Department of State

Appendix III

                     GAO Contact and Staff Acknowledgments

GAO Contact Michael Courts, (202) 512-8980

Staff 	In addition to the individual named above, Jeffrey Baldwin-Bott,
Joseph Carney, Paul Desaulniers, and Edward Kennedy made key contributions
to

Acknowledgments 	this report. Martin de Alteriis, Etana Finkler, and Mary
Moutsos provided technical assistance.

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