DIRECTOR OF NATIONAL SECURITY STUDIES, CIS
MARK KRIKORIAN: Good morning. My name is Mark Krikorian. I am executive director of the Center for Immigration Studies. In earlier eras, you really didn’t need IDs. When people lived in the same village and everybody knew everybody’s great-grandparents and you never left, it didn’t really matter whether you had an ID because there was no conceivable use for it.
In a modern, anonymous, mobile society, some form of identification, some system of identification is imperative for the normal functioning of society. And it affects basically all areas of life. Immigration is where the Center for Immigration Studies comes at it from, obviously. Matters like denying employment to illegal immigrants, doing a better job of verifying identity for visa applicants, for instance, and for people entering the country and leaving the country.
But it affects all manner of other areas – security, for instance. The 9/11 Commission specifically highlighted the importance of identification documents. Depending on what happens with national health care, if there were a national health-care system, again, identification would be essential. Personal finance – every area of life, really, requires a sound system of identification.
Unfortunately, too much of the debate really hasn’t been all that useful. Some of it has been hyper technical about what kind of RFID chip you should use, for instance, which really isn’t relevant to broader policy concerns. And then you have, frankly, what is kind of sophomoric rejection of the whole idea of IDs by libertarians and others, who reject in principle identification systems since what you end up with is what we have now, which is an ID system, but isn’t very good – a bad ID system.
And so to try to shed a little light on that, we are going to have this discussion on secure IDs and related specifically to immigration, but obviously affects all kinds of other areas. Our first speaker will be Ron Mortensen, author of the paper in the packets, a retired Foreign Service officer who has worked with the Society for Human Resource Management, which obviously specifically is relevant to ID issues as well. Ron will speak first and talk about his paper.
Then Janice Kephart, director of national security studies at the center, former council at the 9/11 Commission, will talk about some research that she is doing on identification-related crimes. And finally, Stewart Baker will speak. He is a former policy director at Homeland Security Department and oversaw, among other things, a lot of the initiatives on identification and secure identification that DHS undertook in the previous administration.
And this is obviously relevant not just in a broad sense, but in a very specific, immediate legislative sense, too, because Congress is considering something called the PASS ID Act, which would roll back many of the elements of the REAL ID Act, which attempted to apply some federal standards, among other things, to state driver’s licenses, which is our de facto national ID system. So let’s start with Ron, then Janice, then Stewart and then we will have some Q&A in case anybody has any unanswered questions. Ron?
RON MORTENSEN: Okay. The paper I am reporting on is a document called, “Illegal, but Not Undocumented: Identity Theft, Document Fraud and Illegal Employment.” I first learned about the problem of illegal alien-driven identity theft about four years ago. I live in Utah. And out there, our workforce services division had noticed that a lot of wage data actually was being assigned to Social Security numbers of children, which – and they kind of wondered how an 8-year-old could be earning $30,000 a year or something.
Our Medicaid folks, when they would run the applicants through the save system, were finding children making 30 or 40 or $50,000 a year. And so this raised some concerns. So they went and there was a taskforce formed by the Social Security Administration, the attorney general’s office and ICE and they took all the children in Utah who were receiving public assistance – because they had their Social Security numbers – they took those numbers and then they ran them against a Social Security database. And they found that 1800 kids under the age of 13 had their Social Security numbers being used and 5,000 under the age of 18.
And at any given time, about 10 percent of the families in Utah are on public assistance. So just a rough extrapolation comes out 20,000 to 50,000 children had their identities being used. And then when they started going in to look at who used these identities, they found that it was primarily illegal aliens. And the reason that they wanted to get these children’s identities – a child’s identity is very valuable because nobody checks their credit history. Nobody is looking at what is going on with that identity number for years.
It is very interesting. One of our state legislators actually, her son had gone away to college – 18 years old, he went down to college. And he went to get Internet service hooked up and he was denied because he had bad credit. And when they looked into it, an illegal alien had been using his Social Security number for years and ruined his credit, so he couldn’t even get his Internet service hooked up.
So anyway, based on that, that is what gave me the idea to start looking into this. And on this study, there are three major findings in this study: basically, that illegal aliens might not have legal documents, but they are definitely not undocumented. They have lots and lots of false documents. They have false green cards. They have even passports. They might have birth certificates. They have Social Security numbers. They have driver’s licenses. They have all kinds of documents that are required in order to operate within society and to get jobs.
In fact, even according to the Social Security Administration, estimates that three-quarters of illegal aliens have a Social Security number although they cannot legally get one. On the identity theft the interesting thing, too, is that 98 percent of the identity theft – according to the Social Security Administration’s inspector general in Utah, 98 percent is Social Security number-only identity theft, which means I use my own name and I get somebody else’s Social Security number and just use it with my name. I don’t take the total identity of the person. It is too hard to get. It is too hard for me to find somebody’s name, date of birth and Social Security number. It is easy to get a Social Security number. So 98 percent is Social Security number-only identity theft.
The second thing that this points out is we always hear that illegal aliens are really good, law-abiding people. The only violation of law is a civil breach of when they enter the United States illegally and after that, they are just good, hard-working people. Well, the fact of the matter is that in order to get a job, you have to commit two and possibly three felonies. If you go into a reputable employer, you have to have the information required for the I-9 form, so you have to have a Social Security number. You have to have a passport. You have to have a driver’s license. You have to have identification documents for the employer to look at when he is filling out the I-9 form. To do that, you have committed document fraud, which is a felony.
Then, you fill out the I-9 form. And on the I-9 form, it very clearly states that I am aware that federal law provides imprisonment and/or fines for false statements or use of false documents in connection with the completion of this form. And then under penalty of perjury, I certify that I am a citizen of the United States, a lawful permanent resident, an alien authorized to work in the United States. Now, if you are here illegally, you cannot certify to any of those. But they do and they fill this out, so it is under penalty of perjury. So that is the second felony.
And then the third felony will be if that Social Security number belongs to someone else, it is identity theft. And we will talk about it later – Janice will talk about at the federal level, the identity theft said it had to be knowingly done or it didn’t count. A number of state laws have changed that. In Utah, for example, our state law was changed to say you cannot use the fact that you did not know that the number belonged to someone else as a defense against identity theft. You are stuck with identity theft in that case. So up to three felonies to get a job.
The key thing, too, is if you look in the report – and the table has been updated on the Web site – the table in the report has some older data in it. It is updated on the Web site, so I encourage you to look at that. But identity theft and illegal immigration go hand in hand. The states that rank the highest in identity theft also have the highest percentage of population of illegal immigrants in their population.
And then also, for example, in Arizona, when they break it out – when the Federal Trade Commission breaks it out – 33 percent of all identity theft in Arizona is employment-related, 27 percent in Texas, 20 percent in California. So employment-related identity theft is a major driver of identity theft and almost all of that is associated with illegal immigrants.
The third thing that the paper points out that is a fallacy is that illegal immigration is a victimless crime. They come in and they take jobs – they are working and they are good, hard-working people. They contribute to the economy. The fact is if your Social Security number is being used by an illegal alien or anyone else for that matter, you can have serious problems. The credit bureaus, if they get a Social Security number that comes in and it is not totally matched to your name, they will create a sub-file and that starts impacting your credit score.
If somebody gets an arrest record on your Social Security number and a warrant is issued, you can be pursued for that warrant. If somebody earns income and, say, an illegal alien using your Social Security number makes $50,000 and they don’t file an income tax return. The IRS originally will first start out trying to find the individual who earned the money. But if they can’t find them, then they come back on you and ask you to pay it. And you have to prove that you didn’t earn that money. And it can cause all kinds of problems. There are horror stories of people having wage garnishments or refunds held up or anything else because the IRS says it is your Social Security number. The money is made under it; you have got to pay it.
And perhaps the worst thing that can happen is, as we go to electronic medical records, if those medical records and Social Security numbers are linked, if somebody is using my Social Security number and I have O-positive blood and somehow our records get mixed and he has B-negative blood, that could be a life-threatening situation if – the medical records being corrupt if you can’t have confidence that your medical records are okay.
So there are other things that come along from this also that you looked at on it. We are talking about a time where we have stimulus bills. We are trying to stimulate the economy. We are trying to increase consumer spending because that is the major driver of the economy. As illegal immigrants send a large portion of their earnings outside the United States, so when we take stimulus money, we don’t do background checks or verification checks on who we are employing, if the money is going to an illegal alien, a large portion of that money is not put back into the local community. It is sent out to their countries of origin.
And, for example, in October of 2008, just as everything was starting – really crashing down, $2.4 billion in remittances went out of the United States in just that month alone. In April of 2009, there was $1.7 billion in remittances to Mexico and totaling $25 billion to Mexico in 2008 according to the Wall Street Journal. So this is one of the areas that if we wanted to help out, we would start using employment verification systems ensuring that these jobs go to American citizens who will spend the money in the United States.
Another thing that is interesting: If you look at where the majority of illegal aliens come from, the top 10 countries of illegal aliens – there is an organization called Transparency International that ranked the countries worldwide on a corruption index. And all of the countries that send illegal aliens to the United States are – with the exception of Korea, which is fair – either have serious or rampant corruption problems.
And so what happens is people who are used to operating in a system where corruption is the norm, where dealing with your government entities and things, it is all right – and you have to pay kickbacks or you do things under the table. They come into the United States and we are immediately saying it is all right to use false documents, it is all right to lie on I-9 forms. It is all right to do this. So we are actually importing a culture of corruption, which can bleed over into gangs, into mortgage fraud, into all kinds of serious problems that can come from this. And it really weakens the overall respect and upholding of the rule of law.
One other thing I found in here that if you look at it, the opinion leaders, a lot of the religious leaders, the civic leaders, when we look at it, we always hear about the noble illegal alien. They are working hard to support their family. If they are being deported, we always hear the hardships that they are facing and we focus on the perpetrators of the crime, but you never hear about the victim.
You never hear about the person, the American child who goes to college and can’t get Internet because an illegal alien has ruined their credit history. You don’t hear about the American citizen whose good name has been ruined because they have got an arrest record attached to their name now because of this identity theft.
And so one of the things that we need to look at is if we do comprehensive immigration reform is not just look at how we are going to take care of the illegal aliens in the United States, but justice would demand, what are we going to do for the victims? And the way that we have – the comprehensive immigration bills up ’til now have totally ignored the victims of illegal alien identity theft.
So for example, in the previous bills, they actually had a provision in the bill where if I came in – if I was here illegally, I came in and I had to prove that I had been working and that I had lived in the United States for a period of time and I presented my W-2s or something to the federal government employee that was looking at that and he can see that I have been using a Social Security number and everything and, you know, how could you have that Social Security number? If the federal employee would turn that Social Security number over to law enforcement or notify the person it belonged to, he was fined $10,000. He would be fined $10,000.
It was total protection. And that is amnesty. There is no question that is amnesty because now you know a crime has been committed and you are waiving the crime. So an illegal alien, the way it is set up now and the way they keep talking comprehensive immigration reform, illegal aliens will be given a total pass, given a new Social Security number, go on, start out. And the American citizen now is left holding the bag and responsible for recovering their identity. And that can cost thousands of dollars at least and hundreds and hundreds of hours of work.
So if you are going to talk really true comprehensive immigration reform, you have got to look at both sides of the equation. You have got to look at the victim’s side and you have got to look at the illegal immigrant side. You cannot sacrifice American citizens simply to regularize illegal aliens. And that is what the program is doing.
And I will sum up here and be done in just a second. Just some solutions to this: Really enforce E-Verify. If every employer in the United States would use E-Verify, that would stop 100 percent of all child identity theft and it would stop 100 percent of Social Security number-only identity theft because you have to have name, date of birth and Social Security number all matching. But if all I am doing is using somebody else’s Social Security number, my name and my date of birth won’t match that Social Security number.
If I am using a child’s Social Security number, even if I take my grandson’s Social Security number, I can pass – he is male, I am male. That is all right. Social Security number, that will probably get by. But when I try to pass for an eight year old, somebody – the first place it should stop it is that the employer should say wait a minute. I can’t put this/that in. You are not eight years old. And that would stop it right there. If they do submit it, then the system should pick that up hopefully. So E-Verify would stop all that.
We always hear that well, if we do E-Verify, then everybody is going to go out and they are going to get – they will just get full identities. It is much harder. I have talked to our attorney general’s office. It is much, much more difficult to get a complete data set that is gender-specific, that is within the age range and all that than it is to just simply make up a number and attach it to your name. So E-Verify would stop all that Social Security number-only identity theft.
Another thing employers could do if they really wanted to help out, they could use the IMAGE program, which is kind of something that we don’t talk about too often. But the IMAGE program – ICE works with the employers to help them make sure they are keeping a legal workforce. And it also allows ICE to go in and look at the I-9 forms and to ferret out anything that – any false Social Security numbers that they have. They can identify people using fraudulent Social Security numbers on their payroll right now and take steps to stop that.
So the other thing that really needs to be done, too, is that our civic groups, our churches, our law enforcement agencies, everyone needs to tell illegal aliens – needs to go out to the communities that have a lot of illegal aliens, needs to tell them if you are using fraudulent documents, that is a serious crime. That is a felony. That is not acceptable in the United States. They have a responsibility to do outreach and say if you are here, you have got to abide the law and you cannot be committing felonies, document fraud, identity theft, et cetera.
The other thing they need to do: We need to fix the federal identity theft law. I think Janice is going to talk about that, I believe. Utah fixed theirs when we found out that Utah’s laws said you had to knowingly use the data belonging to somebody else. Illegal aliens were getting off saying I didn’t know who that Social Security number belonged to.
Utah changed their law to get rid of that and actually put in a clause saying in your defense, you cannot argue that you didn’t know who the number belonged to. That doesn’t carry any weight. So they changed the law in Utah, even added in employment as one of the things you use identity theft for, specified that.
And again, in summary, at the end of it, I would just say that – I have mentioned before, but on comprehensive immigration reform, we have got to look at the victims. We have got to give the victims rights, not just the perpetrators. Thank you.
MR. KRIKORIAN: Thank you, Ron. Janice?
JANICE KEPHART: Good morning, privileged to be here. I am going to try to do three things here. First is define identity theft a little bit; second, talk about some research we are currently conducting at the center on aggravated identity theft; and three, discuss the May 2009 Supreme Court decision of Flores-Figueroa, which Ron has alluded to that changed the interpretation of a key prosecution tool, namely the aggravated identity theft statute.
Let’s start out with identity theft and defining it a little bit. Identity fraud, as we all know, knows no boundaries and can be committed by anyone. American or not, those who commit identity fraud mutilate credit ratings and reputations, empty bank accounts, charge up credit cards, file false tax returns, submit false medical claims and assume innocent identities for criminal purposes.
When I was in the Senate back in 1998 trying to help update the identity theft law, we defined identity theft as assuming another person’s entire identity. Well, identity fraud was defined as an identity compiled with other real or false information to create an entirely new identity. In either case, the identity fraudster, which I am going to say includes the term “identity thief,” intends to use identity information other than his own most often to support the commission of another crime.
He does so either purposefully or in reckless disregard that the identity information he is using belongs to another person. Either way, the crime and the harm remain. There is always a victim of some kind in identity fraud. Right now, I am in the process of analyzing over 250 aggravated identity theft cases prosecuted by U.S. attorney’s offices across the country since February 2006. In total, these cases cost victims $1,038,000,000.
Let’s turn to illegal aliens and identity fraud. Illegal aliens and illegal immigrants are human and commit the same basic run-of-the-mill identity theft that Americans do. For example, one illegal Lebanese national who entered from Mexico who had evidence linking him to Hezbollah did about 4.8 million (dollars) in identity fraud damage by stealing Social Security numbers, adding fictitious names and bilking credit card companies.
Then there is the Romanian national that used a phishing scam involving 7,000 individuals, costing those folks about $700,000. And he was sentenced in May 2009. Then my favorite one is the two Kenyan sisters who came to the United States on student visas who stole personal information of about 500 individuals in nursing homes across 27 states, filed over 540 fraudulent tax returns worth $15 million and received at least $2.3 million of that. In 2008, they were sentenced to 14 years in jail with no parole under the aggravated identity theft statute and the other felonies that they were charged with.
However, with these types of crimes replicating the types of crimes Americans commit, but for perhaps the more unusual terrorism nexus, we are finding that foreign-born individuals commit more varieties of identity fraud crimes than Americans do. In fact, 45 of the 250 cases we are reviewing or 18 percent stated clearly that the defendants were actually foreign born. Within those 45 cases, 64 were stated as illegal aliens and 15 were resident aliens.
To put that 18 percent in perspective, we are looking at almost one in five of the ID theft cases we are studying involving those who are foreign born. That 18 percent is significantly higher than the estimated illegal population in the United States, which is at about 4 percent according to CIS studies. While 4 percent is still a high number, it appears that illegal aliens make up a larger percentage of ID theft cases than their population in the U.S. would otherwise suggest.
Now, why would this be so? I suggest that the identity theft numbers for aliens, especially illegal numbers, are high for three reasons. First, they are committing the same type of crimes every other identity thief out there commits. And in addition to that, they commit certain types of identity fraud Americans have no reason to commit, including illegally applying for U.S. passports, illegally entering or re-entering the country, applying for immigration benefits, and in the most publicized situations, using ID fraud to obtain jobs they are not authorized to do.
And third, the crime is becoming more necessary with the increasing strength of biometric border-related identity programs that we hawked so much on the 9/11 Commission and the last administration, which Mr. Baker was so key and really drove forth those biometric border-related ID programs – programs like US-VISIT that take and check fingerprints and digital photographs at ports of entry, the Western Hemisphere Travel Initiative that now requires a passport or biometric equivalent for every person entering the U.S, and E-Verify, the highly successful work authorization program.
These programs, as Ron suggested as well, are not so easy to bypass or simply very difficult without posing as a real person. In fact, getting a job today with a law-abiding employer and keeping it is not likely to happen with any certainty if an illegal alien does not obtain a real person’s identity information or document.
Take E-Verify, for example: This ever-growing program is so popular amongst employers it is growing at a rate of 277 percent. With a 99.6 percent accuracy rate for determining work authorization and very little associated cost, E-Verify is snuffing out counterfeiters relatively well. For them to stay ahead of the curve and have a product to sell illegal aliens needing a U.S. identity, they need to steal identity information of real people more and more often or the aliens just do it themselves.
I think it is important then, as Ron has said as well, to put to rest the argument that illegal aliens in the job market are quote, “not intending any harm,” end quote, when they commit ID theft as some scholars and activists state repeatedly. Saying such a thing is really at best naïve and out of touch with current trends. In fact, any illegal alien risking getting hired today knows he has to secure the identity of a real person.
Proving the alien knows he has used real identity information, however, is another story all together, which brings us to the Supreme Court decision of Flores-Figueroa decided in May of 2009. Before reviewing Flores, I think it is important to note that most of the Supreme Court cases that led up to the Flores for review involved illegal aliens.
There was a split in the circuits that led up to Flores being taken up by the Supreme Court. And in all seven cases that led up to that accepting Flores for review was the question of whether the government must prove beyond a reasonable doubt that the defendant knew he was using a real person’s identity information to be guilty under the aggravated identity theft statute.
Interestingly, in six of these seven cases, the identity theft involved an illegal alien using false identity information to gain a privilege that by law belongs to a real legal immigrant or U.S. citizen. Three involved work authorization, one a passport application, one attempted re-entry after deportation and another, a Washington, D.C. case where an illegal alien was picked up using false and stolen identities to support assimilation into the U.S. after three prior illegal entries and two deportations.
All of these cases were decided within a span of eight months across the country. And within 11 months of the Supreme Court taking up the Flores case, four cases have been decided in favor of the government and three in favor of the defendant. The four cases in favor of the government held that the government does not have to prove the defendant knew he was stealing a real person’s identity, just that the defendant used the identity in the commission of another crime. The three that decided in favor of the defendant, which is the side the Supreme Court ultimately took, held that the defendant must prove the defendant knew the identity information belonged to a real person.
And yet, in all three cases that ruled in favor of the defendant, there was strong dissent, some of which gave Congress rewritten statutory language for the aggravated identity theft statute to help prevent the law from being reinterpreted in the future. The fact that the majority of circuit court judges’ original opinions did not agree with the Supreme Court’s ultimate decision, I think, is an interesting twist. That, and the fact that the Supreme Court picked the one case that only had a bench ruling with no attending opinion when two others of these cases were pending for potential review did have in-depth opinions is also curious.
However, my curiousness of this particular Flores case is really not nearly as important as simply dealing with the court’s ruling. So what was the Flores decision? In May 2009, the Supreme Court used the Flores case to reinterpret the aggravated identity theft statute from its common usage. Used in the 250 cases I am studying to narrow substantially the types of cases where the government can meet its evidentiary burden.
In essence in Flores, the court agreed with the defendant that if the government could not prove that the defendant actually knew he had acquired a real person’s identity information to stay employed illegally, he could not be convicted of aggravated identity theft. Perhaps, somewhat amusingly, Flores did not contend he did not know he had a real person’s identity information and use it unlawfully; he just claimed that the government couldn’t prove it.
So what has essentially happened here is that the Supreme Court in Flores has created a burden of proof that the government will in many cases have difficulty meeting. Government authorities can prove knowledge on the part of the defendant where that knowledge is clear, such as computer hacking of personal information or employees that steal personal information from their employer or their clients or their patients or those that dumpster drive or steal purses or use familial ties in an unlawful manner.
However, where the investigation does not stem directly from identity fraud schemes, what the court has inadvertently done is carve out an exception that largely lets off the legal hook incidents of identity fraud where that fraud is collateral, yet essential to other felonies. Often, although not always, these felonies involve activities of illegal aliens, including the illegal entry, passport fraud or unauthorized work where the prosecution is simply unable to prove how the identity information was acquired, even though there is clearly a victim.
Reading the court’s opinion closely, Justice Breyer in writing for the court seems to be telling Congress that if their intent is quote, “practical enforceability,” end quote, across the platform of identity theft and fraud crimes, then the statute needs to be rewritten to clearly reflect what the defendant needs to know to have committed the crime. If Congress intended that the defendant need not know whether the identity fraud involved another person or not, then the statute needs to be rewritten to reflect that in plain, ordinary language.
The Flores decision has the potential to significantly chill prosecutors’ ability to punish criminals across the board who are able to claim ignorance as to whether a real person’s identity information was acquired unlawfully. Is this result of Flores acceptable to Congress or to the American people? Is it worth congressional time and effort to put a fix on the statutory language so identity fraud can be prosecuted fairly and vigorously?
In conclusion, I am writing a report now, which is an attempt to provide Congress a starting point to fix the language and provide adequate justification to do so per the analysis of the 250 cases I mentioned previously.
A carve-out, in my view, that allows identity thieves to claim ignorance of their crime and further puts a protective legal covering over illegal aliens’ ability to game our border-related ID programs, as well as many other types of identity fraud, should not be something that a nation built on the rule of law should tolerate. In my view, we need to fix it. And I hope that our panel here today and with my paper out soon, we will help Congress do just that.
MR. KRIKORIAN: Thank you, Janice. Stewart?
STEWART BAKER: Yeah, let me ask a question to the audience. How many people have had their identity stolen in the last five, 6 years? (Chuckles.) Okay, so more people on the panel than in the audience. Yeah, that is pretty good because actually, usually when I ask a young audience, I get a lot more hands. Yeah, yeah. It has got to be the most common crime that ordinary people are subjected to these days – much more common than street crime, for example.
And what is striking about Ron’s report, I think, is how much of that identity theft is now employment-related. It is striking in its variability that it could be below 10 percent in New York and then over a third in Arizona. I think that does reflect in part the fact that Arizona was the first to really mandate the use of E-Verify for employment, so that if you wanted a job in Arizona, you were going to have to have a real ID instead of a made-up ID.
But the other striking figure from Ron’s report is that 50 percent of the Social Security numbers have already been given out. So if you pick one at random, you have got a one in two chance of picking the Social Security number of a real person. So if there are 4 or 5 million illegal workers in the United States, that is two-and-a-half million people whose identities have been stolen just to fill out the forms that they need to get jobs. That is before you get to the essentially mandate that you steal an identity if you want to survive scrutiny under E-Verify. So we are going to see more of this.
I do think that this substantially undermines the victimless crime notion. I remember vividly the signs in some of the rallies for amnesty that we saw in 2007. “Somos ilegales, no criminals”: We are illegal, we are not criminals. And that is increasingly difficult to say as people – as enforcement increases. This is actually a fruit of enforcement.
It looks like a victimless crime. It looks like everybody else’s immigration experience if no one is trying to enforce it. But we see at the border as we make it harder to get across the border, people who are determined to get across the border will resort to violence against the border patrol in order to make sure that they can do it. It becomes more and more of a criminal enterprise.
The same thing is going to be true in the context of getting jobs. People want the jobs and it turns out that they will violate the law and they will pay off criminals and they will pay off government officials, as Ron said, in order to get the credentials that they need. And so increasingly, this will become something in which we are dealing with a genuine illegal subculture rather than just people who are here to get jobs and not otherwise engaged in any illegal conduct.
What is interesting also, I think, about identity theft for illegal immigration and illegal employment purposes is that for most of us who have been the victims of identity theft for financial reasons, the impact is one time and then it is over. That is to say, somebody steals your identity, they pass some checks, they charge some goods and then it stops and you have to go back and clean it up. But you clean it up one time and the likelihood that that person is going to continue to charge stuff to your account is near zero.
This is not the experience that people who have been the victims of identity theft for illegal work purposes have had. For those people, it goes on and on and on because once you have got a Social Security number that works and you have built up some documentation, you keep using it. You get new jobs. You get telephone service. You get a credit card. And you want to keep using it. And consequently, for somebody who has been the victim – I have talked to people who have been the victim of identity theft by illegal immigrants. And their pain is decades long sometimes because they keep getting new instances of the theft.
Also, of course, once you have a Social Security that works, the first person to discover that has a valuable asset, which they are inclined to sell to other people because they can say this is a Social Security. Here is the name that goes with it. This will get you through all of the checks. Well, why not have two people with that Social Security number? Why not four? Why not 20? And so increasingly, we are seeing that once your name gets into the underground with your Social Security number attached, you are going to be victimized over and over again, even if the first person who started using it does not continue to use it.
But that is the other reason we don’t see – that we see this lengthy process of victimization is it is harder to get all the authorities to pay attention to this for two reasons. There is a whole set of political-correctness issues. Local authorities don’t want to deal with this if it turns out that they are indirectly enforcing immigration law because it has grown up as an article of faith in big-city police departments that it is not a good idea to be a handmaiden to immigration enforcement. And this starts to take on that color.
But it is also true, I think, that there is nobody who is out any money as a result of this other than the victim, whereas with financial crimes, typically the banks, the credit card companies, the merchants, somebody ends up stuck with the bill. And they want it to stop now. Whereas if the only person who is trying to stop this is some poor person whose identity has been stolen, trying to figure out who to talk to and how to make the system work is almost impossible. So for all those reasons, identity theft for illegal employment purposes is actually going to turn out to be a worse nightmare for people than identity theft for financial purposes.
So the other thing that I thought was striking in Ron’s report, which he didn’t talk too much about, is how astonishingly uninterested in this crime the Social Security Administration and the Internal Revenue Service are. That is just – there is no inclination on the part of either of those institutions to enforce the rules.
Part of it is I suspect that they end up ahead financially as a result of this. They are going to collect taxes on a lot of this. They are going to collect Social Security payments on this. And they aren’t going to probably have to pay out the earned income tax credit or Social Security benefits at the end of this because the illegal immigrants are not likely to claim those.
And consequently, very quietly, I am sure that the people who need to make the budget – well, I won’t say balance, but need to maintain the revenue side of the budget – are saying, well, you know, if we enforce this, it will cost us money at both ends. First, we will spend money enforcing it and then we will lose money from the revenue we don’t collect. That is something that does need to be fixed.
Things that we could do about it. Some thoughts on that. We could end a lot of this if we applied E-Verify to existing employees in E-Verify companies. There has been a reluctance to say that, you know, E-Verify today applies to new employees. But if you were illegal and you got in before your employer moved to the E-Verify system, you are home free.
And the notion for not allowing people to check their existing workforce is the – I won’t call it bugaboo because I am sure it does happen – but it is a figure that is achieved almost in mythic proportions. The employer who uses immigration law to abuse his employees and stamp out nascent labor organization, that the fear is that selectively employers will say I think I will check this guy. He is making too much noise on the floor and maybe it will turn out that his ID isn’t any good and I can fire him on that basis.
And let’s assume that, that does happen. It doesn’t happen if the government makes the decision about which companies are going to do it or if it applies it across the board to everybody in E-Verify. This is not a hard thing to do. At least checking the name and Social Security number to make sure they match is a relatively straightforward thing. Practically every employer has a payroll system that has name and Social Security number, which can be extracted and sent as a batch to E-Verify. You could do this very quickly if there were the will to do it.
You should let people lock their jobs. You know, with one in four and soon, I am sure, one in three jobs has to go through E-Verify, you can save yourself a lot of pain as somebody whose identity has been stolen by this by being able to call up E-Verify and say don’t give out a job to me again until I call you and tell you that I am looking for one. And this is something that easily could be implemented and would give people some protection against misuse of their Social Security number.
And then finally a third idea and I will close with this is to collect the misused Social Security numbers, which are easy to get. The FTC has a list of them. You can find out which Social Security numbers are being misused, which people have complained about and alert the employers that those are not Social Security numbers that should be accepted without further inquiry.
You know, in 1940, the credit card system and the Social Security system looked very much the same. You got the card and the card was all you needed to get credit or to get Social Security benefits. And probably the Social Security card was harder to forge than the credit card. And that was it. It was just the card.
In the 69 years since then, we have changed almost nothing about the Social Security system despite the massive fraud. And in credit cards where fraud is also common, we have gone to doing online immediate checks of people’s cards. If you want to use it online, you have to use an additional security feature that is not the card number. You can’t use people’s credit cards if you just know their number. You also have to know the code that is on the back.
And then finally, there is back-end artificial intelligence that we have all gotten the calls, excuse me, but are you in Moscow buying chocolates? And if you say no, they disapprove the transaction. None of that, with the exception of E-Verify, which is a very limited program, occurs on the Social Security side.
So all of the fraud techniques that people have developed in the financial services area are being used by the crooks on the Social Security side and none of the defenses have been put in place. We need to begin saying let’s have defenses against identity theft for employment purposes that are equivalent to the protections that we have against misuse of credit cards.
MR. KRIKORIAN: Thank you, Stewart. Since I am paying for the room, I will ask the first question. (Laughter.) For anybody who has some ideas – sort of off of what something Ron said that assuming there were, and this is something you guys may have considered when you were at DHS and thinking about the amnesty bills.
Assuming we legalize the illegal immigrants – there was legislation to do that – and let’s assume further that the illegal immigrants committing identity theft, which is the vast majority of them, were given a pass on the federal offenses they committed. Is there some way that the state laws – because they are violating 50 state laws as well depending on where they live. There is no way the feds can mandate that the states give legalized illegal immigrants a pass on their crimes in their states. Is that the case? I mean, Ron or Stewart, have you guys – first of all, have you guys thought about that?
MR. BAKER: No, we didn’t plan to legalize – to forgive people the crimes of –
MR. KRIKORIAN: Yeah, but de facto, they all would have been anyway. Is that the case?
MR. BAKER: De facto – I think the likelihood that they would have been pursued for those things where there wasn’t a victim that could demonstrate real harm was pretty small. But there was nothing, if I remember, in the bill that would have forgiven crimes committed. And you know, technically, I suspect that the federal government could decide as part of its plenary immigration authority that it is going to forgive all crimes committed by people here illegally in the 10 years prior to the amnesty.
The likelihood of that happening politically, I think, is close to zero. And so you will face a situation in which it is possible for the states to prosecute people for this. And probably you should. I mean, I would have thought that you could today, even with this Congress, get through a sense of Congress statement that says we don’t intend to legalize people who have committed felonies and caused harm to Americans as part of their illegal stay in the United States.
That is a very hard thing to vote against, it seems to me. And consequently, I suspect we will have a patchwork, you know. There are plenty of states that will grant that kind of amnesty effectively. But others will not.
MR. MORTENSEN: I would just point out that in the bill, when they had that $10,000 fine for the federal employee reporting it, if the federal government knows somebody has been doing it, but won’t share that information with the states or with other law enforcement officials, that is a de facto amnesty provision in the bill would be the way I would look at it.
MR. KRIKORIAN: Yes, sir, in the back. And then you, ma’am. Yes, you.
Q: Dr. Mortensen – (inaudible, off mike) – reading your paper, so forgive me if the answers are in there. But you had alluded to E-Verify being a foolproof safeguard against ID theft. And the example you raised was the use of children’s Social Security numbers. What about adults? Are they misusing adult numbers?
If I could just add a quick follow-up to any of the panelists, which is the Democrat Senator Schumer and the Republican Sam Johnson, they have both proposed biometric features in slightly different ways to incorporate – and I haven’t heard any discussion about biometric features here. And I just wondered in your minds if there is any place for that in E-Verify or any other system?
MR. KRIKORIAN: Two questions. Go ahead.
MR. MORTENSEN: And on adults actually, yes, if I were to take your name, your Social Security number and your date of birth, we are pretty much – I might be able to pass for your age and that kind of thing. I could probably do that. I could steal your identity under E-Verify and get through with that. So on adults, it is not totally foolproof.
One thing they are doing in E-Verify is they are adding a photo to it that they can get out of the immigration database and other things. They are also trying to link that in – talking about linking it into driver’s license photos. So if had put in and it would pull up your photo with my information and I am sitting in front of them, that would be some factor in there.
The biometrics is probably a good idea. And I know a lot of organizations are now pushing for that, although it seems to – in a sense, it is a long ways down the line. It is something we should shoot for. But it is not going to do anything until we get that because what we are doing, in effect – all the time that we go on doing this, we are literally sacrificing millions of Americans, millions of children for profit.
And that is basically what it comes down to. We are willing to sacrifice this so the Social Security Administration can make a profit, so the IRS can make a profit, so employers can make a profit. And rather than taking the hard decisions and saying no, we are going to verify this and we are going to at least cut out the children and we are going to cut out a lot of the – the 98 percent of Social Security number-only identity theft, we are not willing to do that.
MS. KEPHART: Can I continue on it?
MR. KRIKORIAN: Sure, please.
MS. KEPHART: And then Stewart, correct me if I am wrong. Okay, in terms of biometrics, the images that relate back to USCIS, the immigration benefit card images, so your green cards, et cetera – those images have been available for at least a year in E-Verify. However, what it is missing, which Ron alluded to, is driver’s license information, which is much, much more difficult to come by because it requires a compact with every state separately to acquire that information.
Because most people who are American supply a driver’s license – or claim to be Americans supply a driver’s license along with a birth record for E-Verify, that driver’s license information is absolutely essential to get in there and is one thing that is missing in E-Verify right now, which does allow some identity fraud to continue to proliferate within the program.
They are working to get that. What they are doing right now and what they will have soon hopefully is passport application data – U.S. passport application data. So if somebody presents a U.S. passport, they can match the data from the application to what they see in E-Verify. They are also getting U.S. visa – for foreign passports – U.S. visa application information, too – all of that, hopefully, by next summer.
So that will add a biometric element. What I understand Schumer wants to do is add a fingerprint or other type of biometric as well. I would drill down on that a little bit. And Stewart, correct me if I am wrong. But my understanding is in talking to the folks who are on the technology side who are promoting that, it is really an alternative to E-Verify. It doesn’t really fit into E-Verify.
It would act as an alternative to E-Verify to create a frozen identity on a card that has a fingerprint on it. And the only way you could do it as an employer, I would think, is if you have some kind of reader to read the information on the card and verify that the person standing in front of you is, indeed, the person who is on that card that presents it to you. That is a very different kind of solution than E-Verify. And I think it is up for debate as to an add-in of that is worthwhile or not.
MR. BAKER: Yeah, that is how I would come at it. It is just a pilot proposal, as far as I can tell. And for biometrics to work – let’s remember that the only way these systems work where you are actually checking a good identity document instead of an easily obtained bad identity document is if everybody in America has them and everybody presents them when they get a job.
That means that you have to make the very difficult political decision that you are going to require everybody to get a new document or go in and have their old document credentials and anti-forgery protections increased. This is what REAL ID tried to do with the states and we see what an enormous resistance there has been to that.
The only alternative to that, I suppose, would be to say well, we are going to have IDs at the federal level, which actually Senator Schumer has been good about the importance of good ID and it’s conceivable that would turn out to be cheaper and more effective than trying to get the states to all uniformly raise their game.
Biometrics is a nice thing. I think people chase that as a solution a little aggressively. It is expensive. And when you ask yourself how likely is it that the American people are going to say yeah, that is what we want; we want to be fingerprinted, every one of us, by the United States government in order to get a new ID that we have to carry. I have been there and have listened to people react to much less controversial proposals than that. So I suspect it is going to be hard to get.
And at the end of the day, biometrics is just data. And unless you have somebody at least neutral or maybe inclined toward enforcement present when the biometrics are presented, then it is easy to forge biometrics. It is every bit as easy as a credit card number because at the end of the day, your fingerprints are going to be reduced to bits and bytes and transmitted over telecommunications lines.
And if you can just hand somebody who is really in it with you the electronic file of somebody’s fingerprints, then that is what they will transmit and the guys at the other end won’t know the difference. So unless you are confident that employers are going to be pretty aggressive about whether people are putting their fingers or some gummy bear on the – (laughter) – fingerprint slide, you don’t really get as much benefit out of biometrics as you think.
MR. KRIKORIAN: Thank you. Yes?
Q: I just have a question in regards to E-Verify: Is a there a lack of compliance from the businesses because maybe their assumptions or they might know that they do have illegal immigrants working for them and so they choose to pay them, you know, lower wages and kind of exploit their business there?
MS. KEPHART: Stewart, you take that one. That is a policy question.
MR. BAKER: First, E-Verify is voluntary in most states. And if you know you have illegal workers and you depend on them, you are afraid you won’t get people to pick your apples if you actually check ID, then you are likely not to join the program. So there very much is an economic divide there.
We do see in some industries that have a significant problem with illegal workers – meatpacking, for example – because everybody knows where they are, where the meatpacking plants are and they can be raided on a regular basis, those employers got tired of the liability and many of them joined E-Verify and at least cleaned up the sort of random choices of Social Security number type fraud that existed.
But because those jobs are pretty good if you are an illegal immigrant, lots of people could afford to buy the name and Social Security number of a real person and survive by engaging in identity theft, which is why so many of the people in those plants when they were finally arrested were charged with identity theft because they moved on to the second stage. But in the rest of the world, I think there is very much a correlation between people who are dependent on this sort of labor and are reluctant to use E-Verify.
MR. KRIKORIAN: Don, you had your hand up next.
Q: Yeah, I congratulate you on a wonderfully informative panel. Am I misinformed, but I thought E-Verify ran out in two days.
MR. KRIKORIAN: Well, I think there is a continuing resolution extends it for another month until the end of October.
MS. KEPHART: And then it will be another six months.
MR. KRIKORIAN: But that is an important question that until it is reauthorized permanently or –
Q: – resolution, when did that happen?
MR. KRIKORIAN: A couple of days ago – yesterday, a couple of days ago. But I mean, that is just a stopgap thing and then they will take it up again by the end of October.
MS. KEPHART: I think the difference, though, with it now is that the administration for the first time is actually behind it.
MR. KRIKORIAN: Behind authorizing E-Verify.
MS. KEPHART: Yeah. And they put budget numbers behind it. And they have now been convinced that it is actually a good program and they are willing to go forward with it. There was a lot of flip-flopping going on there for the first nine, eight months in regards to it. Nobody knew how E-Verify would fare. But with the administration behind it now and you talk to the USCIS people, they are not really concerned about it at this point. People are pretty sure it is going to go through.
MR. KRIKORIAN: Jack, you had your hand up.
Q: With regard to E-Verify and the federal requirement conceived in the Bush administration, now implemented by the Obama administration –
MR. KRIKORIAN: For federal contractors.
Q: For federal contractors. I am told that that applies to existing employees working under a contract with the federal government. So that, in effect, creates – it breaks the barrier of only checking new employees. Would I be correct in assuming that this, in effect, is a green light for states to operate similar requirements for contractors that have only in the past verified new employees?
MR. BAKER: It does do that. And I have forgotten the exact – it is a relatively limited set of requirements. But they are in there and it is the first time that they have broken through that. And they have broken through, I think, on the same theory that as long as we tell you to do it, then the likelihood that it is going to be used discriminatorily or for anti-labor reasons is small.
I question whether the states could mandate the use of E-Verify for existing employees because that is inconsistent with the standard agreements and, indeed, if I remember right, the law for E-Verify, so that there would be a question whether you could get E-Verify to authorize its use if there hadn’t been a federal authorization for that use as well.
So I think there is an open question there. And it would pose a big problem for the administration. The administration would have to decide whether they were going to reach out and preempt those state policies in some fashion or prohibit the state determination to have that kind of enforcement. So it would be a very tough problem for them and it is not something that Arizona could just say let’s do it and it would happen.
MR. MORTENSEN: And you would have the chambers of commerce and everybody immediately suing on that. So it would be – I think it is by rule that you can’t go back – it seems like to me it is by rule that you can’t verify retroactively.
MR. BAKER: It is certainly in the agreement.
MR. MORTENSEN: The agreement that the employer signs, though, it clearly states that the employer will not go and use that retroactively. So until they change that agreement, it would be very difficult for the states. And I don’t think the states – the states are hesitant somewhat to push ahead because every time they do, they get sued.
All of the cases have come down – all of the cases have been decided in favor of the states, so it should be less of a problem now in that instance. But I don’t know if they want to go breaking new ground and challenging. I think if they can just push E-Verify ahead, they are making good headway.
MR. KRIKORIAN: Anyone else? Yeah.
Q: Hi, I came in a little late, so I may have missed this. Those of us who do research on taxes paid by illegals generally estimate that about 55 percent of illegal – somewhat over half have provided their employer with some kind of documentation – a Social Security number. That estimate is based on research I could talk to you about and it may not be right. But let’s assume it is.
Could you guys tell me what you think might be the breakdown of people who provide a Social Security number – and let’s assume for the sake of this discussion it is 55 percent – what share are visa over-stayers who had former work authorization, but don’t, you know, they are an H-1B that just never went home or maybe a student who was working as opposed to stolen identity as opposed to bogus identity – Social Security numbers of all zeros or, you know, one, two, three, four, five, six, seven, eight, nine. Any sense – do we have any clue?
I am really especially interested in the share who are people formerly with work authorization because this seems like an obvious problem with E-Verify, right? Why don’t we zero those out if we know who had an H-1B visa, why do we let that one still be valid, that Social Security number valid? As I understand it, they don’t zero those out. But correct me if I am wrong.
MR. BAKER: Yeah, I think they can and they ought to. I can’t think of a reason why you wouldn’t do that. They have got direct access to the records. They know that that Social Security number was issued to somebody under a visa that has now expired. There is no reason that they couldn’t – oh, I know why, what the problem is.
It is because a lot of people on H-1B ultimately become LTRs, get to stay permanently or even U.S. citizens. And they are therefore entitled to work and they are entitled to have their identity verified. But they are still using this old conditional Social Security number because they have never changed it.
And in those circumstances, you don’t want to say well, because you naturalized and because you didn’t change your records, we are not going to authorize you. So they do have a system for checking that. But again, if you haven’t naturalized, if you haven’t established a new status, there is no reason why they couldn’t say well, your status has expired. We are not going to continue to authorize you. And I would be surprised if they were actually allowing people to get approved on that basis.
MR. KRIKORIAN: So if you are a visa overstay who had prior work authorization, you might not make it through E-Verify, you think maybe?
MR. BAKER: That is right. I don’t know why you would because they have those records.
MR. KRIKORIAN: So Social Security is, in fact – is linked to –
MR. BAKER: Social Security is useless on this. The Social Security Administration is useless. But because DHS has access to their own records, they can say well, this person has lost his authorization –
MR. KRIKORIAN: So when the E-Verify check goes through, the way that I had understood it, it goes to Social Security first and then it is kicked to DHS because if it is okay-ed by Social Security and it is a real number and they don’t know whether you are a visa over-stayer, then would it then go to the next step to DHS?
MR. BAKER: As I said, the Social Security Administration really doesn’t have much interest in helping on this.
MR. KRIKORIAN: Okay, right.
MR. BAKER: And increasingly – they don’t even have much of an interest in helping E-Verify become more accurate for people who are authorized to work. And so the E-Verify team has begun to reach into its own records, which it can use to supplement what Social Security does. And it does it to authorize people who they discover oh, well, yes, we know this person naturalized, so no matter what the Social Security record says about them having an invalid number, we know they are valid. And they could do the reverse.
MR. KRIKORIAN: Okay.
MS. KEPHART: In terms of statistics, in the 250 cases that we are looking at right now, not one of those is a visa-overstay case. They are all in the work authorization area. They are all illegal aliens who have used identity theft to acquire a job. Straight up illegal hires from the get go. We haven’t seen anything different so far.
I haven’t broken it down in terms of how you have. But in terms of the cases we are looking at, we are looking at U.S. passport fraud, work authorization fraud, reentry fraud and just ID fraud for those who have assimilated here illegally. The visa overstay issue has not really arisen in the cases so far.
MR. KRIKORIAN: Well, just to clarify, some of those people could be visa over-stayers, but they may not have been authorized to work when they were here legally on a visa. You see what I mean because it is two different groups of visa over-stayers.
MS. KEPHART: Yeah, it doesn’t look like it from the types of facts that we are seeing right now. It doesn’t look like those types of jobs. The other thing is in terms of stats, the 4 percent of the illegal population that we have here in the United States, these cases that I am looking at, about 18 percent of them – because I know you didn’t hear it – 18 percent of them, of the cases I am looking at are illegal alien or immigrant based – mostly illegal alien based.
So we have got 18 percent, or 45 of the 250 cases, are based on immigrant issues, which is a big difference from a 4 percent of the overall population. So you see a big increase in use amongst the illegal population.
MR. BAKER: I would be real cautious about – there is no good data on how many illegal immigrants are overstays. The data that is out there, the 25 to 45 percent numbers that we are seeing, I would go back to the early 1990s and they weren’t very good then. So nobody has a good hand on that.
I do know, though, when we were looking at the visa waiver program, we actually got some statistics on overstays. The overstays were on the order of two or 3 percent – still a lot of people, but they were two or 3 percent. And something like 30 percent or 40 percent of those weren’t overstays if you waited a month.
So these are just people who overstayed because they got sick or they had a boyfriend or whatever and then they left later. So it is very hard to know how much of an illegal immigration problem we have as we traditionally understand it from overstays. We really do need better data there.
MS. KEPHART: I remember Mr. Baker headed a very in-depth testimony in regards to visa overstays in regards to the visa waiver program and a very long colloquy with Senator Feinstein and Senator Kyl on this issue last year. So I think there is some pretty good testimony and some stats that Stewart has from his prior work when he was head of policy at DHS.
MR. MORTENSEN: And just one last point on that, too. I think if somebody – and I am thinking out loud, so correct me if I am wrong, but if somebody was on an H-1B, had a Social Security card that went along with that and they continue using that number afterward, even after their visa status is expired, they are not committing identity theft, though, because that number – they are using a number that belongs to them or is no longer valid, but they are not committing identity theft. So they wouldn’t show up in the identity theft statistics.
MR. KRIKORIAN: That is a good point. Yeah, good point. One last question.
Q: Do I interpret what you are saying correctly that the Social Security Administration, when they issue a new number to a child, that is not checked to see if they already have employment or other records against that number? Or do they go through that check so that it is only subsequent to the issue of the number?
MR. MORTENSEN: No, according to the information I have, the children are born into identity theft. In the study, there is a story of a two-year-old child in Utah. And they think that she was actually – that somebody – that the individual had used the number before she was born. The Social Security number – t hey hadn’t ever taken it out of the database.
They assigned her the number. She picked up his credit history and everything. And so as my understanding is, they do not pull those numbers out. They just say somebody is using it; we will put that over in the suspense file. And I think the amount in that suspense fund now is something like $500 billion.
MR. KRIKORIAN: It is wages earned.
MR. MORTENSEN: It is huge that is not assigned, which is supplementing Social Security. And that is where it comes in that Social Security really kind of benefits from this because they are getting lots of money coming in and there is not a claim against that money. So it is actually propping up the system.
MR. KRIKORIAN: Okay, well, let’s wrap it up, so respect people’s time. I mean, the panelists might be willing to be accosted afterward. I am not sure if people have other appointments. Thanks for coming. All of our work is online at cis.org. And have a good day.