The Rest of the Story … JPMorgan Gets $90 Million a Year from USCIS

By David North on October 11, 2010

Here's the rest of the story about JPMorgan, the U.S. government generally, and USCIS, specifically.

As I noted in an August 20 blog posting, JPMorgan received about $94.7 billion in bailout funds, some of which it has repaid. In addition, regarding the international trade in workers, it:

  1. shipped thousands of what had been American jobs overseas;

  2. is paid millions a year by USCIS to handle paperwork filed by people seeking immigration benefits; and

  3. routinely receives about 100 new H-1B nonimmigrant workers annually, displacing American workers and lowering wages generally.

At that writing I did not know how much JPMorgan was paid to do this work, and was told by USCIS press people that if I wanted to know, I would have to go through the Freedom of Immigration Act (FOIA) process.

I groaned to myself. We at the Center for Immigration Studies have had an FOIA request pending since April (we want some USCIS decision statistics that are readily available to the agency but kept secret), and our request shows no sign of being opened, much less answered, for at least another six months.

But then came an odd bit of what turned out to be good news. USCIS would not tell us how much they were paying JPMorgan because all mail-handling contracts (lockbox operations) are managed by the U.S. Treasury, so we had to use the FOIA process there. Treasury apparently presides over all government lockbox operations. These activities involve opening envelopes, depositing any checks in them, and organizing the paper so that adjudications can be done by USCIS staff members. The flow of paper into USCIS is monstrous.

Our question was a simple one: "How much does this [lockbox contract with JPMorgan] cost a year, nationwide, or what is the amount of the contract and its length." I had broken the question into two parts in the hopes that it would speed the answer.

The response was not quite so simple. Was CIS a scientific research organization or an "all other"? How much Treasury would charge us depended on the answer. They decided that we were not a "scientific" organization (social science apparently does not count) and they figured it would cost us $431.97 for the research involved.

Given that all they had to do was to open a file drawer, look at a contract, and copy down the bottom line, that seemed excessive, but we decided to pay. (They agreed to accept a personal check, not seeking a bank check or a money order – a hopeful sign.)

The check was received on September 28 and yesterday, October 9, I got the answer in the mail. Compared to USCIS, the speed was breathtaking.

The bottom line: JPMorgan has what I would call a monopoly – they have done all lockbox operations for USCIS since March 2008, and in FY 2009 the firm was paid $89,116,473.94.

The simple declarative sentence above is not modeled on Treasury prose. It was assembled from these various segments of the Treasury response:

Please note that the figures for fiscal year 2008 and 2009 contain the total amounts paid by FMS [Financial Management Service] to all immigration lockbox providers, not just JPMorgan Chase Bank, N.A. Currently. JPMC is FSM's exclusive immigration lockbox provider.

Then there was this note following the data on the FY 2008 ($85,494,095.13) and the FY 2009 figures:

Note these figures represent the total amount paid by Treasury's Financial Management Service to all firms associated with providing USCIS lockbox services.

Then, elsewhere:

Treasury's Financial Management Service's (FMS) current agreement with J.P.Morgan Chase Bank, N.A. was executed in March 2008 and expires on Jan 11, 2011, with potential options for extension through January 11, 2015.

So there were presumably in FY 2008 some lockbox payments paid to other firms, but only to JPMorgan in FY 2009.

The quality of the Treasury's prose did not match either the rapidity of the response, or the elegance of its presentation. The three-page missive from the Treasury was neatly typed on pale green Treasury stationery, including a small table with yellow highlighting. None of the pages had been folded into a No. 10, envelope, as you might expect, so they all arrived uncreased in a 9 1/2-by-12-inch sturdy brown envelope.

As a recovering stamp collector I noticed that the use of the big envelope cost the Treasury $1.05 in postage, while 44 cents would have delivered the No. 10 envelope. Maybe it's just a little governmental extravagance – and not the only time I have noticed this particular governmental postal behavior – or maybe in is a conscious effort of the part of the rest of the government to increase the income of the sore-pressed U.S. Postal Service.

Nevertheless, the Treasury is to be commended for quickly providing information on this, one of the smaller financial transactions between the government and Wall Street.