Illegal Aliens: Fraudulent Documents Undermining the Effectiveness of the
Employment Verification System (Testimony, 07/22/1999,
GAO/T-GGD/HEHS-99-175).

The Immigration Reform and Control Act of 1986 (IRCA) established an
employment verification system to prevent employers from hiring aliens
who are unauthorized to work. Yet large numbers of unauthorized aliens
are obtaining jobs through the widespread use of fraudulent documents.
The Immigration and Naturalization Service (INS) is trying to reduce the
number of documents that can be used for employment verification and
improve the integrity of the documents that it issues. However, these
efforts will not substantially affect unauthorized aliens' ability to
obtain employment. The most common counterfeited documents will still
remain on the list of acceptable documents. In addition, counterfeiters
may be able to manufacture "passable versions" of even the most secure
INS documents, undermining employer confidence in their authenticity.
Providing a more secure Social Security card to all current number
holders could cost as much as $9.2 billion. Alternatives that could
reduce the cost require legislative action. The steps being considered
to improve document security could make it more difficult for an
unauthorized alien to obtain employment, but the employment verification
process can still be circumvented or easily thwarted by the use of
widely available fraudulent documents.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  T-GGD/HEHS-99-175
     TITLE:  Illegal Aliens: Fraudulent Documents Undermining the
	     Effectiveness of the Employment Verification System
      DATE:  07/22/1999
   SUBJECT:  Illegal aliens
	     Immigration and naturalization law
	     Fraud
	     Identification cards
	     Forgery
	     Alien labor
	     Law enforcement
	     Labor law
IDENTIFIER:  INS Employment Verification Process

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    United States General Accounting Office GAO
    Testimony Before the Subcommittee on Immigration and Claims
    Committee on the Judiciary, House of Representatives For Release
    on Delivery Expected at 10:00 a.m. EDT Thursday July 22, 1999
    ILLEGAL ALIENS Fraudulent Documents Undermining the Effectiveness
    of the Employment Verification System Statement of Richard M.
    Stana, Associate Director Administration of Justice Issues General
    Government Division GAO/T-GGD/HEHS-99-175 Statement Illegal
    Aliens: Fraudulent Documents Undermining the Effectiveness of the
    Employment Verification System Mr. Chairman and Members of the
    Subcommittee: I am pleased to be here today to discuss the impact
    of fraudulent documents on the effectiveness of the employment
    verification system established by the Immigration Reform and
    Control Act (IRCA) of 1986 and efforts to reduce such fraudulent
    use.  My statement will summarize pertinent information from two
    of our reports: Illegal Aliens:  Significant Obstacles to Reducing
    Unauthorized Alien Employment Exist (GAO/GGD- 99-33, Apr. 2, 1999)
    and Social Security:  Mass Issuance of Counterfeit- Resistant
    Cards Expensive, but Alternatives Exist (GAO/HEHS-98-170, Aug. 20,
    1998). The availability of jobs is one of the primary magnets
    attracting illegal aliens to the United States.  Immigration
    experts believe that as long as opportunities for employment
    exist, the incentive to enter the United States illegally will
    persist and efforts at the U.S. borders to prevent illegal entry
    will be undermined.  IRCA's employment verification system was
    intended to prevent employers from hiring aliens unauthorized to
    work, therefore reducing the job magnet. In this statement, I make
    the following points: *  Significant numbers of aliens
    unauthorized to work in the United States have used fraudulent
    documents to circumvent the employment verification process
    designed to prevent employers from hiring them. *  The Immigration
    and Naturalization Service (INS) has taken steps to reduce the
    number of documents that could be used to verify employment
    eligibility and to improve the security features in its work
    authorization documents.  However, opportunities still exist for
    unauthorized aliens to circumvent the employment verification
    process and obtain employment. *  In 1997, the Social Security
    Administration (SSA) estimated the cost of producing and issuing a
    counterfeit-resistant Social Security card that could be used to
    establish employment eligibility to all 277 million cardholders
    ranged from $3.9 billion to $9.2 billion, depending on which types
    of security features and data were incorporated into the card.
    While alternatives exist that could reduce these costs, these
    options require legislative action to move forward. Page 1
    GAO/T-GGD/HEHS-99-175 Illegal Aliens: Fraudulent Documents
    Undermining the Effectiveness of the Employment Verification
    System IRCA1 made it illegal for employers knowingly to hire
    unauthorized aliens. Background                    IRCA requires
    employers to comply with an employment verification process
    intended to provide employers with a means to avoid hiring
    unauthorized aliens.  The process requires newly hired employees
    to present documentation establishing their identity and
    eligibility to work. Employees have the choice of presenting 1
    document establishing both identity and eligibility to work (e.g.,
    an INS permanent resident card) or 1 document establishing
    identity (e.g., a driver's license) and 1 establishing eligibility
    to work (e.g., a Social Security card) from a list of 27
    acceptable documents.2   Generally, employers cannot require
    employees to present a specific document.  Employers are to review
    the document or documents that an employee presents and complete
    an Employment Eligibility Form, INS Form I-9.  On the form,
    employers are to certify that they have reviewed the documents and
    that the documents appear genuine and relate to the individual.
    Employers are expected to judge whether the documents are
    obviously fraudulent.  INS is responsible for checking employer
    compliance with IRCA's verification requirements. IRCA's
    employment verification process is easily thwarted by fraud.
    Large Fraudulent Documents numbers of unauthorized aliens have
    used fraudulent documents to Have Undermined
    circumvent the employment verification process.  For example, data
    from INS' employer sanctions database showed that over the 20-
    month period Effectiveness of INS'         from October 1996
    through May 1998, about 50,000 unauthorized aliens Employment
    used 78,000 fraudulent documents to obtain employment.  About 60
    Verification Process          percent of the fraudulent documents
    used were INS documents; 36 percent were Social Security cards,
    and 4 percent were other documents, such as drivers' licenses.
    During this same time period, INS determined that about 2,100
    employers it had investigated had complied with the employment
    verification process and did not knowingly hire unauthorized
    aliens, but that these employers hired unauthorized aliens who
    used fraudulent documents to circumvent the process. Counterfeit
    employment eligibility documents are widely available.  For
    example, in November 1998 in Los Angeles, INS seized nearly 2
    million counterfeit documents, such as INS permanent resident
    cards and Social Security cards, that were headed for distribution
    points around the country. 1 P.L. 99-603, 8 U.S.C. 1324a et seq. 2
    Attachment I lists the 27 acceptable documents. Page 2
    GAO/T-GGD/HEHS-99-175 Illegal Aliens: Fraudulent Documents
    Undermining the Effectiveness of the Employment Verification
    System INS has undertaken two initiatives to improve the
    verification process. INS Is Taking Steps to    First, INS has
    started the process to reduce the number of documents that Improve
    the               employees can present to determine employment
    eligibility.  Second, it has begun issuing new documents with
    increased security features that it Verification Process,
    hopes will make it easier for employers to verify the documents'
    But Opportunities for     authenticity.  However, opportunities
    for unauthorized aliens to use Fraud Will Still Exist
    fraudulent documents to obtain employment will still exist.
    Various studies of IRCA's employment verification process have
    advocated that the number of documents be reduced to make the
    process more secure and reduce employer confusion.  For example,
    in 1990 we reported that the multiplicity of documents contributed
    to (1) employer confusion about how to comply with the employment
    verification requirements and (2) discrimination against
    authorized workers.3 INS first proposed reducing the number of
    usable documents in 1993; however, INS has made little progress to
    date in reducing the number of documents that employers can accept
    to determine employment eligibility. In February 1998, INS issued
    proposed regulations to reduce the number of such documents that
    can be used from 27 to 14.  Under the proposed regulations, INS
    plans to: *  Retain all eight of the documents that currently
    establish both identity and employment eligibility, including the
    INS permanent resident card and the various versions of INS'
    employment authorization card. *  Eliminate 9 of the 12 documents
    that establish identity, such as the school identification, voter
    registration, and various military identification cards. *
    Eliminate five of the seven documents that establish employment
    eligibility, such as the Certificate of Birth Abroad issued by the
    State Department and the U.S. citizen identification card, a card
    no longer issued by INS.  INS proposes to retain the Social
    Security card and the Native American tribal document and add the
    Arrival-Departure Record, Form I-94 for aliens authorized to work
    for a specific employer. According to an INS official, as of July
    14, 1999, comments on the proposed regulations were being reviewed
    within INS. 3 Immigration Reform:  Employer Sanctions and the
    Question of Discrimination (GAO/GGD-90-62, Mar. 29, 1990). Page 3
    GAO/T-GGD/HEHS-99-175 Illegal Aliens: Fraudulent Documents
    Undermining the Effectiveness of the Employment Verification
    System INS has also begun issuing new documents with increased
    security features, which it hopes will make it easier for
    employers to verify the documents' authenticity.  In February
    1997, INS began issuing a new Employment Authorization Card with
    improved security features, including a hologram, microprinting,
    and etched barcoding.  In April 1998, INS began issuing a newer
    version of the card for lawful permanent residents, commonly
    called the green card, with improved security features, including
    a hologram, a digital photograph, and an optical memory stripe
    containing information on the cardholder. With respect to the new
    security features on INS documents, this may not have a
    significant impact on unauthorized aliens' use of fraudulent
    documents to obtain employment.  According to an INS official in
    Los Angeles, that office has already seized counterfeit versions
    of the new green card INS began issuing in April 1998.  According
    to this official, the counterfeit cards do not have all of the
    security features of the new INS green card.  While they are
    easily detectable by trained INS employees, they will appear
    genuine to untrained employers. Consequently, they could be used
    to obtain employment.  Also, current procedures do not require
    aliens to show employers the INS document that authorizes them to
    work. Other widely used documents, such as the Social Security
    card, do not have the security features of the INS documents.
    Further, INS plans to phase in the replacement of existing
    versions of the permanent resident card issued between 1989 and
    1998 as they expire, which could take up to 10 years.  Cards
    issued from 1977 to 1989 have no expiration date and will remain
    valid until INS replaces them.  Therefore, unauthorized aliens
    seeking employment can circumvent the improved security features
    of INS documents by simply presenting counterfeit versions of the
    new cards, less secure versions of INS documents, or non-INS
    documents (e.g., Social Security cards) to employers. Because the
    Social Security card has become one of the primary Enhancing the
    Social              documents to determine employment eligibility,
    it is important that this Security Card for                 card
    be a secure document.  This would mean that there are strict
    controls over card issuance and that the card itself is
    counterfeit-resistant. Employment Eligibility Unfortunately,
    neither situation is currently true.  Historically, the purpose
    Verification Would Be             of the Social Security card was
    to document the card holder's Social Costly
    Security number, not serve as a means of identifying the
    individual. Consequently, the controls over whom the card was
    given to and the security features built into the card have not
    traditionally been a priority. Regarding the controls over card
    issuance, since 1978 SSA has required applicants for original
    Social Security numbers to provide proof of age, Page 4
    GAO/T-GGD/HEHS-99-175 Illegal Aliens: Fraudulent Documents
    Undermining the Effectiveness of the Employment Verification
    System identity, and citizenship or alien status.  However, the
    identity data contained in Social Security records are only as
    reliable as the evidence on which they are based.  Regarding
    security features of the card, SSA introduced its first
    counterfeit-resistant card in response to the Social Security
    Amendments of 1983.4  Since that time, the current card has
    incorporated certain limited security features including use of
    banknote paper, a marbleized pattern on the card that shows signs
    of alteration, small multicolor discs randomly placed on the card,
    and printing that has a raised effect and can be difficult to
    replicate. However, concerns continue to be raised that the card's
    security features did not make it significantly more difficult to
    counterfeit and that employers could not easily determine a card's
    authenticity for work authorization purposes. Because of these
    concerns, Congress in the Illegal Immigration Reform and Immigrant
    Responsibility Act of 19965 (IIRIRA) required SSA to develop cost
    estimates for a prototype counterfeit-resistant card made of
    durable tamper-resistant material with various security features
    that could be used in establishing reliable proof of citizenship
    or legal noncitizenship status. In 1997, SSA estimated the cost of
    issuing the enhanced cards to all 277 million current number
    holders and provided estimates for 7 card options employing a
    range of card technology features. SSA assumed that it would use
    existing Social Security application procedures to reissue all
    enhanced cards and establish reliable proof of the citizenship or
    alien status for number holders for whom proof had not been
    previously established.  SSA reported that the total cost of
    issuing the new cards would range from $3.9 billion to $9.2
    billion, depending on the technology selected, and would involve
    73,000 work years.6  These technologies ranged from the use of
    plastic cards with multicolor, miniprinting, and transparent
    holograms to digital photographs and optical memory storage.
    SSA's estimates showed that processing costs for five of the seven
    card options, which mainly included personnel costs, accounted for
    about 90 percent of the estimated costs to issue an enhanced card.
    So, regardless of the option selected, issuing an enhanced card to
    all number holders would involve an enormous cost and have a
    significant impact on SSA's resources. 4 P.L. 98-21. 5 P.L. 104-
    208, 110 Stat. 3009-719. 6 Attachment II contains a table showing
    the enhanced card options and associated costs for issuing them to
    all number holders. Page 5
    GAO/T-GGD/HEHS-99-175 Illegal Aliens: Fraudulent Documents
    Undermining the Effectiveness of the Employment Verification
    System IIRIRA also required us to review SSA's cost estimates. We
    found the estimates to be generally reasonable.7  However, we also
    identified the following alternatives to the mass reissuance of a
    new Social Security card, which could provide a more cost-
    effective approach to preventing those individuals who are
    unauthorized to work from obtaining jobs: *  Issue a new enhanced
    Social Security card only to those who need it to prove work
    eligibility.  For retired individuals who are no longer working
    and the very young who have not entered the workforce, there may
    be little advantage to issuing a new card.  Also, many individuals
    of working age would not change jobs and would have no need for
    the card.  Bureau of Labor Statistics data suggested this approach
    could have reduced the number of individuals "needing" an enhanced
    card from 277 million to an estimated 118 million.   This option
    could help increase control over illegal workers while
    significantly reducing cost. *  SSA could issue the new card only
    to those applying for a new Social Security number and those who
    normally request replacement cards.  This option would also
    substantially reduce the cost of card issuance.  But this option
    provides no new employment authorization internal controls for
    many current number holders. If Congress decides to change the
    Social Security card to enhance employer reliance on that document
    for work eligibility determinations, it would need to specifically
    provide funding to accomplish it.  The Social Security trust funds
    have historically borne the cost of issuing original and
    replacement cards.  However, under section 274A of the Immigration
    and Nationality Act (8 U.S.C. 1324a), payment for major changes,
    such as implementation of an enhanced counterfeit-resistant Social
    Security card, cannot be paid for by the trust funds. Significant
    numbers of unauthorized aliens can still obtain employment
    Conclusions      because IRCA's employment verification process
    can be easily thwarted by fraud. INS has efforts under way to
    reduce the number of documents that can be used for employment
    verification purposes and improve the integrity of the documents
    it issues.  However, this will not substantially affect
    unauthorized aliens' ability to obtain employment.  The most
    common counterfeited documents will still remain on the list of
    acceptable documents.  In addition, counterfeiters may be able to
    manufacture "passable versions" of even the most secure INS
    documents, thwarting 7 Social Security: Mass Issuance of
    Counterfeit-Resistent Cards Expensive, but Alternatives Exist
    (GAO/HEHS-98-170, Aug. 20, 1998). Page 6
    GAO/T-GGD/HEHS-99-175 Illegal Aliens: Fraudulent Documents
    Undermining the Effectiveness of the Employment Verification
    System INS' hope of giving employers more confidence in the
    authenticity of the documents they review. Providing a more secure
    Social Security card to all current number holders was estimated
    to cost between $3.9 billion and $9.2 billion, depending on which
    types of security features and data were incorporated into the
    card. While alternatives exist that could reduce these costs,
    these options require legislative action to move forward. The
    steps being considered to improve document security could make it
    more difficult for an unauthorized alien to obtain employment.
    But significant numbers of unauthorized aliens can still obtain
    employment because the employment verification process can be
    circumvented or easily thwarted by the use of widely available
    fraudulent documents. Mr. Chairman, this concludes my prepared
    statement.  I would be pleased to answer any questions your or
    other members of the Subcommittee may have. Contact and
    Acknowledgment For further information regarding this testimony,
    please contact Richard M. Stana at (202) 512-8777.  Individuals
    making key contributions to this testimony included Michael P.
    Dino, Nancy Kawahara, Tom Jessor, Roland H. Miller III, Jeff
    Bernstein, and Jacquelyn Stewart. Page 7
    GAO/T-GGD/HEHS-99-175 Attachment I Current List of Acceptable
    Documents for Employment Eligibility Verification ABC Documents
    that establish both identity          Documents that establish
    identity                  Documents that establish employment and
    employment eligibility
    eligibility U.S. passport (unexpired or expired)
    Driver's license or identification card issued U.S. Social
    Security card (other than a card by a state or outlying possession
    of the           stating that it is not valid for employment)
    United States, provided it contains a photograph or information
    such as name, date of birth, sex, height, eye color, and address
    Unexpired foreign passport, with form I-551 Identification card
    issued by federal, state,          Certification of Birth Abroad
    issued by the stamp                                           or
    local government agency or entity,              Department of
    State (form FS-545 or form provided it contains a photograph or
    DS-1350) information such as name, date of birth, sex, height, eye
    color, and address Alien registration receipt card with
    School identification card with a                  Original or
    certified copy of a birth certificate photograph or permanent
    resident card           photograph
    issued by a state, county, or municipal (INS form I-551)
    authority or outlying possession of the United States bearing an
    official seal Unexpired temporary resident card
    Voter registration card                            Native American
    tribal document (INS form I-688) Unexpired employment
    authorization card         U.S. military card or draft record
    U.S. citizen identification card (INS form I- (INS form I-688A)
    197) Unexpired employment authorization              Military
    dependent's identification card           Identification card for
    use of resident citizen document issued by INS, which contains a
    in the United States (INS form I-179) photograph (INS form I-766)
    Unexpired employment authorization              U.S. Coast Guard
    Merchant Mariner card             Unexpired employment
    authorization document issued by INS, which contains a
    document issued by the INS (other than photograph (INS form I-
    688B)
    those listed under A list) For aliens authorized to work for a
    specific    Native American tribal document employer, unexpired
    foreign passport with form I-94 containing an endorsement of
    aliens' nonimmigrant status                     Driver's license
    issued by a Canadian government authority School record or report
    carda Clinic, doctor, or hospital recorda Day-care or nursery
    school recorda Note: For employment eligibility verification
    purposes, one document from list A or one each from list B and C
    are required. aFor persons under age 18 who are unable to present
    a document listed above. Source: INS, "List of Acceptable
    Employment Eligibility Verification Documents for Form I-9," under
    interim rules, as of Sept. 30, 1997. Page 8
    GAO/T-GGD/HEHS-99-175 Page 9    GAO/T-GGD/HEHS-99-175 Attachment
    II SSA's Estimates of Cost to Issue 277 Million Enhanced SSN Cards
    (Dollars in billions)
    Card, equipment, and number holder Card option
    Card description                         Processing cost
    correspondence cost                     Total cost 1
    Basic plastic with name and SSA data printed
    $3.6                           $0.3                          $3.9
    on front.  There are two versions; one with and one without a
    statement concerning number holder's citizenship status. 2
    Plastic with name and SSN data on front and
    3.9                            0.4                           4.3
    electronically captured photograph and sex and date-of-birth data
    on back. 3              Plastic with name and SSN data on front
    and a                      3.9                            0.4
    4.3 secure bar code data storage stripe to hold identifying
    information and a biometric indentifier on back.a 4
    Plastic with name and SSN data on front and
    3.9                            5.3                           9.2
    optical data storage stripe on back that can store large amounts
    of identifying information. 5              Plastic with name and
    SSN data on front and a                      3.6
    0.4                           4.0 magnetic stripe on back. 6
    Plastic with name and SSN data and
    3.9                            0.4                           4.3
    photograph on front and a magnetic stripe on back. 7
    Plastic with name and SSN data and a
    3.9                            3.4                           7.3
    microprocessor (computer chip) on front and a magnetic stripe and
    photograph on back. aBiometric indentifiers can capture a living
    personal characteristic such as a fingerprint in digital or analog
    form. Source: SSA, Report to Congress on Options for Enhancing the
    Social Security Card (Sept. 1997). Page 10
    GAO/T-GGD/HEHS-99-175 Page 11    GAO/T-GGD/HEHS-99-175 Page 12
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