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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