Will the DREAM Scheme Bring Millions to J.P. Morgan?

By David North, August 2, 2012

We know that as many as a million young illegal aliens may get amnesty under the President's DREAM Scheme, but how many millions of dollars will J.P. Morgan get out of the deal?

As my colleague Jessica Vaughan pointed out in a recent blog, DHS may be offering the DREAMers a deep discount on the fees that should be levied for handling their applications. But whatever the fees charged to the aliens, USCIS is going to pay a bundle — from some source — to handle all the incoming paper.

We know that most of the work for the DREAM Scheme will take place in the USCIS's four Regional Service Centers (in California, Nebraska, Texas, and Vermont). We also know that the actual handling of checks and applications for most benefits dispensed by these centers is not done by federal employees, but by contract workers in what are called "lock box" operations.

And because the Center for Immigration Studies pried the information out of the U.S. Treasury Department in the fall of 2010 via a Freedom of Information Act request, we know that at the time J.P. Morgan had a monopoly on all USCIS lockbox operations, and had had it for some time.

Treasury told us that the contract was then worth about $90 million a year to J.P. Morgan, not a huge chunk of that firm's total income, but still $90 million. The chances are that J.P. Morgan is still doing this business and will charge something substantial to handle the million applications that are expected.

How much more? We will probably never know, but if J.P. Morgan charged $90 million a year for the some five million applications that USCIS handled in 2010; and if 90 divided by five comes to 18, and if the cost of working with the DREAM Scheme applications is about equal to the cost of handling USCIS applications generally, and if there are, in fact, one million applications, then:

J.P. Morgan will get something like $18 million for its work on the DREAM Scheme.

Peanuts compared to J.P. Morgan's take from the various Wall Street bailout programs, but still $18 million.

J.P. Morgan should tip its top hat to the White House.