[Senate Hearing 109-1060] [From the U.S. Government Publishing Office] S. Hrg. 109-1060 IMMIGRATION ENFORCEMENT AT THE WORKPLACE: LEARNING FROM THE MISTAKES OF 1986 ======================================================================= HEARING before the SUBCOMMITTEE ON IMMIGRATION, BORDER SECURITY AND CITIZENSHIP of the COMMITTEE ON THE JUDICIARY UNITED STATES SENATE ONE HUNDRED NINTH CONGRESS SECOND SESSION __________ JUNE 19, 2006 __________ Serial No. J-109-87 __________ Printed for the use of the Committee on the Judiciary U.S. GOVERNMENT PRINTING OFFICE 48-837 WASHINGTON : 2009 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gov Phone: toll free (866) 512-1800 Fax: (202) 512-2250 Mail: Stop IDCC, Washington, DC 20402-0001 COMMITTEE ON THE JUDICIARY ARLEN SPECTER, Pennsylvania, Chairman ORRIN G. HATCH, Utah PATRICK J. LEAHY, Vermont CHARLES E. GRASSLEY, Iowa EDWARD M. KENNEDY, Massachusetts JON KYL, Arizona JOSEPH R. BIDEN, Jr., Delaware MIKE DeWINE, Ohio HERBERT KOHL, Wisconsin JEFF SESSIONS, Alabama DIANNE FEINSTEIN, California LINDSEY O. GRAHAM, South Carolina RUSSELL D. FEINGOLD, Wisconsin JOHN CORNYN, Texas CHARLES E. SCHUMER, New York SAM BROWNBACK, Kansas RICHARD J. DURBIN, Illinois TOM COBURN, Oklahoma Michael O'Neill, Chief Counsel and Staff Director Bruce A. Cohen, Democratic Chief Counsel and Staff Director ------ Subcommittee on Immigration, Border Security and Citizenship JOHN CORNYN, Texas, Chairman CHARLES E. GRASSLEY, Iowa EDWARD M. KENNEDY, Massachusetts JON KYL, Arizona JOSEPH R. BIDEN, Jr., Delaware MIKE DeWINE, Ohio DIANNE FEINSTEIN, California JEFF SESSIONS, Alabama RUSSELL D. FEINGOLD, Wisconsin SAM BROWNBACK, Kansas CHARLES E. SCHUMER, New York TOM COBURN, Oklahoma RICHARD J. DURBIN, Illinois James Ho, Majority Chief Counsel Jim Flug, Democratic Chief Counsel C O N T E N T S ---------- STATEMENTS OF COMMITTEE MEMBERS Page Cornyn, Hon. John, a U.S. Senator from the State of Texas........ 1 Kennedy, Hon. Edward M., a U.S. Senator from the State of Massachusetts, prepared statement.............................. 104 Kyl, Hon. Jon, a U.S. Senator from the State of Arizona.......... 3 Leahy, Hon. Patrick J., a U.S., Senater from the State of Vermont, prepared statement.................................... 111 WITNESSES Baker, Stewart, Assistant Secretary for Policy, Development, U.S. Department of Homeland Security, Washington, D.C............... 5 Dodd-Major, Linda, former Director of Office of Business Liaison, Immigration and Naturalization Service, Washington, D.C........ 32 Gerry, Martin H., Deputy Commissioner for Disability and Income Security Programs, Social Security, Administration, Baltimore, Maryland....................................................... 10 Munoz, Cecilia, Vice President, Office of Research, Advocacy, and Legislation, National Council of La Raza, Washington, D.C...... 29 Myers, Julie L., Assistant Secretary, Immigration and Customs Enforcement, U.S. Department of Homeland, Security, Washington, D.C............................................................ 8 Stana, Richard M., Director, Homeland Security and Justice, U.S. Government Accountability Office, Washington, D.C.............. 25 Verdery, C. Stewart, Jr., former Assistant Secretary of Homeland Security, and Adjunct Fellow, Center for Strategic and International Studies, Washington, D.C......................... 27 QUESTIONS AND ANSWERS Responses of Stewart Baker and Julie Myers to questions submitted by Senators Gassley, Kennedy and Sessions...................... 38 Responses of Martin H. Gerry to questions submitted by Senators Sessions and Kennedy........................................... 51 Responses of Cecilia Munoz to questions submitted by Senator Kennedy........................................................ 58 Responses of Richard Stana to questions submitted by Senator Cornyn......................................................... 62 Responses of Linda Dodd-Major to written questions were not available at the time of printing.............................. 66 Responses of Stewart Verdery to written questions were not available at the time of printing.............................. 66 SUBMISSIONS FOR THE RECORD Amador, Angelo I., Director of Immigration Policy, U.S. Chamber of Commerce, Washington, D.C., statement....................... 67 Baker, Stewart, Assistant Secretary for Policy, Development, U.S. Department of Homeland Security, Washington, D.C., statement... 79 Dodd-Major, Linda, former Director of Office of Business Liaison, Immigration and Naturalization Service, Washington, D.C., statement...................................................... 88 Gerry, Martin H., Deputy Commissioner for Disability and Income Security Programs, Social Security, Administration, Baltimore, Maryland, statement............................................ 94 Munoz, Cecilia, Vice President, Office of Research, Advocacy, and Legislation, National Council of La Raza, Washington, D.C., statement...................................................... 113 Myers, Julie L., Assistant Secretary, Immigration and Customs Enforcement, U.S. Department of Homeland, Security, Washington, D.C., statement................................................ 123 Stana, Richard M., Director, Homeland Security and Justice, U.S. Government Accountability Office, Washington, D.C., statement.. 134 Verdery, C. Stewart, Jr., former Assistant Secretary of Homeland Security, and Adjunct Fellow, Center for Strategic and International Studies, Washington, D.C., statement............. 161 IMMIGRATION ENFORCEMENT AT THE WORKPLACE: LEARNING FROM THE MISTAKES OF 1986 ---------- MONDAY, JUNE 19, 2006 U.S. Senate, Subcommittee on Immigration, Border Security, and Citizenship, Committee on the Judiciary, Washington, D.C. The Subcommittee met, pursuant to notice, at 2:05 p.m., in room SD-226, Dirksen Senate Office Building, Hon. John Cornyn, Chairman of the Subcommittee, presiding. Present: Senators Cornyn, Kyl, and Sessions. OPENING STATEMENT OF HON. JOHN CORNYN, A U.S. SENATOR FROM THE STATE OF TEXAS Chairman Cornyn. Good afternoon. This hearing of the Senate Subcommittee on Immigration, Border Security, and Citizenship will come to order. First of all, I would like to express my appreciation to Senator Specter, the Chairman of the Judiciary Committee, for scheduling today's hearing, as well as my appreciation to Senator Kennedy, the Ranking Member, and his staff for working with us on the hearing. I also want to acknowledge, given the subject matter of worksite verification, being within the jurisdiction of the Finance Committee we were fortunate to have both the Chairman and other members of the Finance Committee also on the Judiciary Committee to work very closely on Title III, or this worksite provision that is actually contained in the Senate version of the bill, and those would be Chairman Grassley and Senator Jon Kyl, and I want to express my appreciation for their leadership on that critical issue. More than 3 weeks ago, the Senate passed the Comprehensive Immigration Reform Act of 2006. In my judgment, that bill contains fundamental flaws, and I voted against its passage. But I also recognize that the Senate bill reflects a comprehensive approach to immigration reform, and I have consistently advocated for a comprehensive reform, and I believe if we can get the bill to conference, we can significantly improve the bill and come out with a bill that both reflects our National interests and our National values. And while the differences between the House and the Senate immigration bills are many, we need to roll up our sleeves and get to work to find common ground. There is really no other option. I invite anyone who thinks this issue can wait to come down to Texas and just take a look firsthand at how this problem manifests itself along our borders, in our hospitals, in our schools, and in our criminal justice system. It simply cannot wait. The legislative history of the 1986 Immigration Reform and Control Act--the floor debates and Committee reports--reveal how similar the current immigration reform debate is to one held 20 years ago. Americans were assured then that there would be a one-time amnesty and better enforcement, and that that better enforcement, including a system to prevent undocumented workers from obtaining employment in the United States, would reduce the flow of illegal aliens into our country. The American people are now once again being asked to accept the same bargain today, and the cornerstone of this deal is a new electronic employment verification system. Unfortunately, the Senate has conducted virtually no open debate on this subject. Not a single amendment was debated or marked up during the Judiciary Committee hearing, and less than 1 hour of floor time was devoted to this subject during the debates on the Senate floor. Now, this concerns me because not only do I see worksite enforcement as the critical means or linchpin, really, of successful immigration reform, but also because the Secretary of the Department of Homeland Security has told me that several provisions in the Senate bill would make the system unworkable. And the Government is not the only one to express concerns regarding the current proposal. Some groups have expressed concerns that an electronic verification system will increase opportunities for employers to discriminate against employees. Business groups, meanwhile, have also expressed concern with the Senate proposal. Under the Senate bill, an employer might not receive confirmation of a worker's status for up to 50 days. That lengthy waiting period yields two results: a loophole for unscrupulous employers and a prolonged period of uncertainty for law-abiding employers. We have a diverse group of witnesses today, including current and former Government officials, and I am optimistic that their testimony will allow us to explore those issues in an open setting and build momentum for conference with the House. But a perfect verification system accomplishes nothing if we are not committed to enforcing the law against those who do not comply. And the Government's track record on employer sanctions does not inspire confidence. In 1999, there were 2,849 worksite arrests for immigration violations. By 2004, that number had dropped to 159. And in 2003, Immigration and Customs Enforcement, ICE, devoted only 90 full-time equivalent employees to worksite enforcement. Let me just repeat that because the numbers are significant. Ninety employees to enforce laws that apply to every employer in the United States. Ninety. It is no wonder that many employers view enforcement as a remote possibility and any civil penalties that might potentially be assessed as merely a cost of doing business. And it is also no wonder that many Americans are skeptical about how serious the Federal Government is about enforcing its own laws. As we discuss these technical issues, we must not lose sight of the bigger question. Will this new electronic system eliminate the magnet of illegal employment? It is my belief we cannot control illegal immigration unless we stop illegal employment, as 45 percent of those who are currently in this country illegally have not come across the border illegally, but have come legally and overstayed and melted into the American landscape. This hearing will explore these issues, and it is my hope that we will be in a better position to improve the legislation during a conference with the House. Senator Kennedy has asked that his full statement be made part of the record, and it will be, without objection. And I know that we will probably have other Senators come in and out during the course of the day, as they have conflicting obligations. But since Senator Kyl is here with us, I would like to offer him an opportunity to make any opening remarks he would like to make. STATEMENT OF HON. JON KYL, A U.S. SENATOR FROM THE STATE OF ARIZONA Senator Kyl. Thank you, Mr. Chairman. We certainly want to get to the witnesses, but I do want to commend you for the work you have done on this, not only as Chairman of this Subcommittee, but working alongside me and others to try to approach this whole question of comprehensive immigration reform in a sensible way. You have certainly done that, and I appreciate the hearing that you are holding here today. If you would pardon an anatomical analogy, it seems to me that not only is the workplace verification the backbone of any system, but it is also potentially the Achilles heel. As we saw in 1986, if you do not have a system that works well, then the rest of your program, however well intentioned it might be, is bound to fail. And what some people fail to appreciate is that you are not just talking about proper documents for guest workers, though, of course, that is included; but you are also talking about documentation for every American who is seeking a job, because the people who are here as guest workers will gladly show you valid documentation of their guest worker status. It is those who are not willing to participate in that kind of program, but, rather, will try to continue to get away with the use of false and fraudulent documents that you are concerned about. And those people contend that they have the right to work here because they have a Social Security card, a driver's license, a passport, or other document that has been fraudulently prepared. So that is the challenge that exists, and I note that Mr. Baker in his testimony talks about the key components of the current failed employment verification and enforcement system: fake documents and no requirement for employers to verify with the electronic system; broad safe harbors for employers and high standards to prove malfeasance; insignificant penalties which do not provide deterrence; lack of information sharing to target those who significantly abuse the system; and a failure, and I might even say, to some extent an inability to follow the fraud when new fraud schemes have developed. The plan that the administration lays out in general terms here I think is a good plan. One reason I think that, Mr. Chairman, is because it is very similar to the plan you and I laid out in our bill, and I think that the elements of a workable system are embodied in our legislation. But, there are some things that I hope that this panel and the subsequent panels can flesh out for us, which would include precisely how a plan will be implemented, for example, as to people who are currently employed, not just prospective employees; for all Americans, not just people that we think of as illegal employees today; how we will ensure that audits will occur so that it is known by employers that they will be audited within a relatively short period of time; therefore, appreciating the fact that they need to get into compliance quickly; how much it is going to cost; and in that regard, has the administration's budget submission this year reflected a serious attempt to get ahead of this problem. In other words, much of what the administration proposes is not dependent on congressional legislation. And so as the first step toward implementing a program is, a little over $100 million adequate to begin this program? What will the costs be? And does that depend to some extent on whether a card is involved in the system, as both the administration and Senator Cornyn and I propose? If so, what does that cost? Importantly, the timeline. Is 18 months as good as we can do? If so, there are a lot of people that would like to ensure that the system is up and running before benefits of the legislation apply to people? And I think that is a reasonable issue to raise. There are other issues as well, but all of the things that have been raised in your testimony I think are appropriate for discussion. And as the Chairman pointed out, probably the most important part of the legislation, after border security, was given the least amount of time for debate on the floor. Now, in fairness, one of the reasons was because the small group that helped to put together Title III I think did a very good job of starting the process. It is a very good first step, but it is by no means complete and it is only the beginning. And because it is the most important part of the legislation, in my view, we need to spend a lot of time making sure that we get it right. So thank you for holding the hearing, Mr. Chairman. I thank our witnesses for being here. We have got the right people to tell us what needs to be done, and we need to get about it. Chairman Cornyn. Well, we are pleased to have a distinguished panel with us today, and I will introduce each member of the panel, and we will swear you in together and then ask each of you to give your opening statement. First, Stewart Baker was appointed by President Bush to be Assistant Secretary for Policy for the Department of Homeland Security and confirmed by the U.S. Senate on October 7, 2005. Before his appointment and confirmation as Assistant Secretary, Mr. Baker served as General Counsel of the Commission on the Intelligence Capabilities of the United States Regarding Weapons of Mass Destruction, where he headed the drafting team for the Commission's report. He also served as General Counsel of the National Security Agency and Deputy General Counsel of the Department of Education. Earlier, Mr. Baker served as a law clerk to John Paul Stevens on the U.S. Supreme Court and to Frank M. Coffin on the First Circuit. Joining Mr. Baker on the first panel is Julie Myers. Ms. Myers is the Assistant Secretary of Homeland Security for the United States Immigration and Customs Enforcement. In that role, she leads the largest investigative component of the Department of Homeland Security and the second largest investigative agency in the Federal Government. Before her appointment by President Bush on January 4, 2006, Ms. Myers served as Special Assistant to the President for Presidential Personnel. Before that, she was nominated by President Bush and unanimously confirmed by the U.S. Senate to serve as Assistant Secretary for Export Enforcement at the Department of Commerce. Before her service with the Commerce Department, Ms. Myers served as the Chief of Staff for the Criminal Division of the Department of Justice. Martin Gerry is our third witness. He was appointed Deputy Commissioner of Social Security for Disability and Income Security Programs in November of 2001. Before assuming his current position, Mr. Gerry served as research professor and director of the Center for the Study of Family, Neighborhood, and Community Policy at the University of Kansas, where he was also a faculty member within the university's School of Law and Education. Before that, Mr. Gerry served as the Assistant Secretary for Planning and Evaluation of the U.S. Department of Health and Human Services, where his responsibilities included overseeing the formulation and implementation of all Department policy were, as I say, his responsibilities. If I can ask each of you to rise and let me swear the witnesses in. If you will raise your right hand and repeat after me, do each of you swear that in the matter before the Committee you will tell the truth, the whole truth, and nothing but the truth, so help you God? Mr. Baker. I do. Ms. Myers. I do. Mr. Gerry. I do. Chairman Cornyn. Thank you. Mr. Baker, let's go ahead and start with you, if we may. Of course, each of your written statements will be made part of the record, without objection, and if you would care to summarize that for us in 5 minutes or so, and we will ask each of the other witnesses to do the same. And then I know all of us are eager to get to the Q&A. STATEMENT OF STEWART BAKER, ASSISTANT SECRETARY FOR POLICY DEVELOPMENT, U.S. DEPARTMENT OF HOMELAND SECURITY, WASHINGTON, D.C. Mr. Baker. I am glad to summarize it, although I actually feel as though you and Senator Kyl have already pretty well summarized what I was planning to say. Thank you very much for having us here. This is, as you said, perhaps the most important topic that the bill addresses in the immigration reform area, and it deserves the attention that you are giving to it. We share your support for a comprehensive solution--we think that is the only way to address this issue--and also your concerns about the Senate bill and the practicality of some of the worksite enforcement provisions in it. As you said, 1986 was a long time ago, and yet it is a very familiar debate. Just to show how long ago it was, I looked up some things that happened in 1986. There were only three networks before 1986, and there had always been three networks. Fox just got started in 1986, and there was a little daytime TV show called ``AM Chicago'' that was changing its name to ``The Oprah Winfrey Show'' for the first time in 1986. So a lot of things have changed since then, and yet when you read those debates, it feels like today. The debate was over an immigration crisis. There were 3 million illegal immigrants in the country. Everyone knew they were drawn here by jobs, and the question was: How could the immigration be controlled? The answer was an effort to say we will grant amnesty, as you said, one time to the illegal immigrants who are here and we will have a tough worksite enforcement program. Up until 1986, it was not illegal to employ people who had entered the country unlawfully, and there was no particular requirement that you show an ID to get a job. So Congress enacted what I think it was sure would be sufficient measures by making it unlawful to hire an illegal immigrant and by requiring that all workers show ID and go through a process of having that ID recorded by the employer. Obviously, that has not worked. We have got close to 12 million illegal immigrants in the country today. They are still being drawn here by the prospect of getting work. So the question is: What went wrong? It turned out that we probably put to many eggs in one basket. We thought that just making it illegal to hire illegal immigrants and requiring ID would solve the problem. Instead, employees who wanted jobs who were here illegally just got fake IDs. They made up Social Security numbers, and that was the end of the enforcement mechanisms. The reason that it was not possible to go beyond that solution I think lies also in some of the compromises that were made in 1986. It is worth remembering that the business groups that were a part of that debate wanted to make sure that they did not have an excessive burden in hiring people. The immigrants' rights groups wanted to make sure that employers did not have too much discretion so that they could not use the rules for discriminatory purposes, and the result was employers were given a very narrow window. They were to look at the ID. If it was not obviously fake, it was not clear that they could do anything other than accept it. And so when fake IDs that did not misspell ``California'' came onto the market, it was very difficult for employers to do anything other than accept them. It was obvious that there was a problem. There are 9 million people who are the subject of no-match letters each year. Those are mostly people who have made up Social Security numbers, based on our experience, and the employers who get those rarely do anything about the fact that they have received a letter that indicates that their employee's Social Security number and name do not match. They do not have an obligation to do that under the statute, and they have not had much clarity about how they should address that problem. We have come out with a proposed rule that will give more clarity and provide a clear safe harbor for employers so they know what they can do to clear up those problems and hopefully discourage workers who are working on false Social Security numbers. But, in general, it has been very difficult to squeeze solution to these new forms of fraud into a statute that was written on the assumption that everything could be solved with an ID requirement. We want to avoid making that same mistake with the new legislation, and our proposal is to address this in a number of ways. First, we ought to end the most obvious fraud, the made-up Social Security numbers, by requiring electronic verification of the name and the Social Security number, by sharing data from the Social Security Administration's records, and by improving identification cards. Second, we need to have a much more pervasive partnership with employers. We have to make sure that employers do not mechanically carry out a limited number of tasks without asking the question: Do I really think this person is here in the country legally? We have got to get beyond a series of obligations that depend on not knowingly hiring an illegal alien and ask people not to recklessly or negligently hire illegal aliens. We cannot expect employers to be detectives, but we can expect them to be our partners in enforcing the laws of the land. And that is something that the statute needs to reflect. Third, we need to increase the penalties on employers who do not obey the law. As the President said, some of the penalties that are in the law now are less than a speeding ticket in many jurisdictions. We have got to substantially increase those, and we have got to particularly increase them very aggressively for repeat offenders so that we have the ability to take this well beyond the cost of doing business and making people put their business at risk if they are going to violate the law. And, finally, while we expect that these changes are going to make it much harder for people to work with a made-up or false Social Security number, we need to be very careful to not put all our eggs in one basket again. We need to have the regulatory flexibility to address new forms of fraud as they arise and to give employers a new sense of the steps that they ought to take to address these new frauds. I think you may have seen the story in the paper over the weekend about Audra Schmierer, who is a housewife in California who discovered that her Social Security number and name had been used by 81 people in 17 States. Now, that is a form of fraud that electronic verification by itself is not going to address, and we need to be alert to the fact that there will be new forms of fraud even if we stamp out the existing made-up Social Security fake ID business, and that is why we need broad authority to address new problems. So I will close there, Mr. Chairman. I think this has been an enormously helpful exercise, and I hope to be able to address any further questions you may have at the end. [The prepared statement of Mr. Baker appears as a submission for the record.] Chairman Cornyn. Thank you, Mr. Baker. I have a copy of the Associated Press story that you just alluded to, 81 people in 17 States using this woman's Social Security number, and obviously creating havoc in her life, not to mention the fraud that it perpetrated upon others. We will get to that in a minute. Ms. Myers, would you please give us your opening statement? STATEMENT OF JULIE L. MYERS, ASSISTANT SECRETARY, IMMIGRATION AND CUSTOMS ENFORCEMENT, U.S. DEPARTMENT OF HOMELAND SECURITY, WASHINGTON, D.C. Ms. Myers. Thank you, Chairman Cornyn and members of the Subcommittee. Thank you for having me here today with my colleague, Stewart Baker, to talk about immigration enforcement in the workplace. ICE is reinvigorating our worksite enforcement efforts as a core part of our interior enforcement strategy. We are seeking to change the culture of illegal employment across the country by pursuing the most egregious employers engaged in the employment of illegal workers and educating the private sector to institute best hiring practices. I appreciate the opportunity to elaborate a little bit about what Assistant Secretary Baker talked about, our historical experience implementing the 1986 Immigration Reform and Control Act. The INS focused primarily on the enforcement of administrative employer sanction provisions. This approach resulted primarily in the issuance of Notices of Intent to Fine. After extensive litigation, the typical result was a small fine that was routinely litigated or ignored and had little to no deterrent effect. In short, the system did not serve as a true incentive to change their business model. Moreover, under the 1986 law, employers were not required to verify the validity of a document and were not required to even maintain a copy of the documents that they reviewed. This resulted, as Secretary Baker testified, in an explosive growth in an increasingly profitable false document industry that catered to undocumented workers who purchased the documents necessary to gain employment. Cognizant of these lessons, ICE's current worksite enforcement strategy is targeting felony charges to bring in appropriate worksite enforcement investigation. And how does this approach work differently than the old approach used by the INS? Well, you could take the Kawasaki restaurant chain case as an example. Back in March, ICE executed warrants at three Kawasaki restaurants and at four related residences, where we encountered 15 undocumented aliens living in completely deplorable conditions in an apartment with non- working bathrooms and these aliens were being paid $2 an hour to work at these restaurants. At the same time that the aliens were suffering, the owners of these restaurants had created a lavish lifestyle for themselves, purchased themselves several houses, fancy cars. Fortunately, the ICE agents were able to criminally arrest them on money-laundering charges and harboring illegal aliens for commercial advantage. We seized their assets. We seized eight luxury vehicles and ten bank accounts. The owners have since pleaded guilty to these felony charges and agreed to forfeit approximately $1.1 million in assets. Now, how would this have been handled differently prior to ICE's new approach? Well, historically, the INS agents would have simply conducted an I-9 inspection, which would likely have led to the issuance of a fine based on paperwork violations. The owners would have likely escaped even a misdemeanor charge available under 274A, and the maximum fine would have been $20,000 or $30,000. And in any case, that would have been negotiated to something even further. With such a paltry end result, it is not surprising that the old employer sanction regime had simply become a cost of doing business. There are several other recent cases that demonstrate ICE's new tougher approach that is designed to really attack egregious employers where it hurts--their bank accounts and by bringing criminal charges. For example, in April we had the IFCO Systems worksite case, where mid-level managers and employees at IFCO were charged with conspiracy to transport and harbor illegal aliens for financial gain, as well as with document fraud. Another example is the Fischer Homes case in May where several Fischer Homes employees were also charged with harboring illegal aliens for commercial advantage. Some of the penalties in these cases carry up to 10 years in prison. I firmly believe that charging egregious employers with criminal felonies will create the kind of deterrence that was previously absent in enforcement efforts. In fact, we are already starting to see that businesses are responding. We have seen a substantial increase in requests for training and for other information. And to be clear, while the magnet of employment is fueling illegal immigration, we do find that the vast majority of employers do their best to comply with the law. Accordingly, we are also providing good tools on our website and providing presentations to employers to tell them how to avoid getting into trouble with the law. Moreover, as part of our comprehensive strategy and since 9/11, we have continued to prioritize critical infrastructure for worksite enforcement. Just 5 days ago, an ICE investigation apprehended 55 illegal aliens working at Dulles Airport. In our view, effective homeland security requires verifying the identity of not just the passengers who board the planes, but also the employees who work at the airports and the employees who staff our critical infrastructure sites. Additionally, to more effectively combat the significant role that fraudulent documents play in the illegal employment of aliens, we have created with the Department of Justice Document and Benefit Fraud Task Forces throughout the United States. These task forces focus on the illegal benefit and fraudulent document trade that caters to aliens looking to obtain illegal employment. By reshaping our enforcement efforts, I believe ICE will be able to more effectively reduce the magnet of illegal employment using existing authorities. And as the Congress seeks to learn from the lessons of the 1986 Act, there are also several tools that would be of substantial aid to us in our efforts: As Assistant Secretary Baker noted, we need fuller access to information, access to the no-match data. Second, we believe we need a new and improved process for issuing fines, and larger fines so that they serve as more than just a cost of doing business. And, third, we need additional resources, as requested by the President in the 2007 budget. We are dedicated and committed to the worksite enforcement mission, and we look forward to working with the Subcommittee in our efforts. Thank you. [The prepared statement of Ms. Myers appears as a submission for the record.] Chairman Cornyn. Thank you very much, Ms. Myers. Mr. Gerry. STATEMENT OF MARTIN H. GERRY, DEPUTY COMMISSIONER FOR DISABILITY AND INCOME SECURITY PROGRAMS, SOCIAL SECURITY ADMINISTRATION, BALTIMORE, MARYLAND Mr. Gerry. Thank you, Mr. Chairman. Mr. Chairman and members of the Subcommittee, first I want to thank you for the opportunity to discuss how the Social Security Administration issues Social Security numbers and processes wage reports, which I think are the key parts of the testimony that relate to the theme of this hearing. These important activities are part of our core mission of determining eligibility and the benefit amounts for the Social Security retirement and disability programs that we administer. At the heart of these determinations are records of the amounts earned by each individual over his or her working years. Maintaining accurate records is of utmost importance, and the Social Security Administration developed the Social Security number to keep an accurate record of workers' earnings. The Social Security card was provided to individuals as a record of their number. The Social Security card was never intended--and does not serve as a personal identification document. Possession of the card does not establish that the person presenting it is actually the person whose name and Social Security number appear on the card. Over the years, the use of the Social Security number has proliferated as Government agencies and private industry have used the Social Security number as a convenient recordkeeping method. Consequently, the Social Security Administration continually improves its processes for issuing numbers and cards to ensure the integrity of both. We have developed processes for issuing Social Security numbers to newborns and to immigrants with permanent work authorization. In addition, the Social Security Administration has developed more stringent verification processes and requirements, which I have discussed at some length in my written statement. As the uses of the Social Security number have increased, the need for counterfeit-resistant Social Security cards has also grown. Congress and the Executive Branch have worked together to increase the security features of the card. You asked me to discuss the costs related to replacing cards currently in use with a different kind of card. The major cost of replacing cards is not the cost of the card itself, regardless of how elaborate that card might be. It is the cost of interviewing every individual and carefully verifying the documents that are submitted as evidence. Last year, we estimated that a card with enhanced security features would cost approximately $25 per card, not including the startup investments. According to those estimates, reissuance of all new cards for the 240 million cardholders over age 14 would cost approximately $9.5 billion. Since that estimate, we know that the cost of issuing Social Security cards has increased by approximately $3 per card due to new requirements for additional verification of evidence developed as a result of legislation passed by Congress. Last year, we estimated that we would need about 67,000 work-years to process 240 million new cards. This would require hiring approximately 34,000 new employees if we were required to complete the work within 2 years. If the new card was issued to only a limited number of individuals each year, such as 34 million, which would represent the individuals changing jobs and individuals reaching working age--new entrants to the labor force--the costs would be approximately $1.5 billion per year. The Social Security Administration offers many alternatives to assist employers in verifying that the name, number, and date of birth submitted by a new employee matches Social Security Administration records. Employers can call a toll-free number. They can submit a paper list to our local office of names and numbers, they can submit magnetic media, or they can use an Internet-based service which we call SSNVS. Last year, we processed over 25.7 million verifications for over 12,000 employers through SSNVS. This is the new Internet- based service. We estimate that we provide an additional 41 million employer verifications through other methods. Employers may also use the Basic Pilot Program administered by the Department of Homeland Security to verify work eligibility of new hires. In 2005, the Social Security Administration processed approximately 1 million queries to the Basic Pilot. We also send letters, often called ``no-match letters,'' to employers who submit wage reports that meet a certain threshold for errors. In 2004, we sent approximately 120,000 no-match letters to employers, which covered 7.3 million mismatched records. For privacy reasons, the letter includes only the Social Security number, not the name of the individuals. These letters are generated as part of the wage-reporting process, and the source of information is the tax return information on Form W-2. SSA receives and processes Form W-2s for the Internal Revenue Service. The use and disclosure of tax return information is governed by Section 6103 of the Internal Revenue Code. SSA currently has the authority to use this information only for the purpose of determining eligibility for and the amount of Social Security benefits. Although under current law the Social Security Administration cannot release no-match data to the Department of Homeland Security, the Administration supports allowing this disclosure for national security and law enforcement purposes. In closing, the Social Security Administration remains committed to maintaining the security of the Social Security number and the card to ensure that the American public's hard- earned wages are properly credited so that they will be able to receive all of the benefits to which they may be entitled. Thank you very much for the opportunity to appear before you today, and I will be pleased to answer any questions you may have. [The prepared statement of Mr. Gerry appears as a submission for the record.] Chairman Cornyn. Thank you very much, Mr. Gerry. We will now proceed to 5-minute rounds of questions, and I can think of a lot of them based on what you have told us so far. Secretary Baker, you mentioned that we have all tried to learn from what happened in 1986, and I think the way you put it is, ``What went wrong? '' And as I recall, former Attorney General Ed Meese wrote an op-ed in the New York Times. He said that Ronald Reagan was persuaded that the only way that we could get beyond where we were in 1986 would be to grant amnesty, but then the trade-off, the quid pro quo, would be effective worksite verification and sanctions against employers who cheat. Here we are today, as several of you pointed out, with the number not 3 million but closer to probably 12 million, and no one knows for sure. We have had lengthy and I think very helpful debates both in the House and the Senate on this issue, and a lot of the focus has been on the border, some suggesting that we need to do more along the border. I certainly agree. We need to secure our border. We need to know who is coming into the country and what their intentions are when they get here in the interest of our national security. But as I pointed out, and as Senator Kyl reiterated, we spent about 1 hour on the Senate floor talking about this issue, which is essential to getting some handle on the 45 percent of illegal immigration that takes place from people who come in legally but who overstay and who are attracted to this huge magnet known as America, prosperity and jobs. How much of this problem--assuming we did not do anything else, how much of this problem could we address effectively if we just allowed information sharing between the Social Security Administration and the Department of Homeland Security when it came to no-match letters? The figure I had that Mr. Gerry mentioned, in 2004 we sent approximately 120,000 employer no- match letters, which covered 7.3 million mismatched records. Mr. Baker. We could certainly make a big dent in the problem. In the long run, I think we believe that the electronic verification system is more effective. The Social Security system is not designed for addressing illegal immigration. It simply has revealed a lot of illegal immigration and has given us a clue as to where that is, or at least it has given the Social Security Administration a clue as to where that is. Since we cannot see it, we cannot use that as a tool to guide our investigations. We obviously need that. There are employers who are using the same Social Security number over and over again for dozens of employees. We need to know who those employers are because they obviously ought to be at the top of our list for investigation. So it would be a useful tool, if not perfect. It is delayed. It arrives up to a year or more after the employee has begun working so that for seasonal workers, they may well have moved on by the time we would get notice of a no-match, which is why we think the electronic verification also is necessary. Chairman Cornyn. Well, I certainly agree with you that both are necessary. Ms. Myers, recently ICE conducted a large raid on a pallet manufacturer who had refused to respond to--I believe it was up to 13 different inquiries from the Social Security Administration about a number--as it turned out, more than 50 percent of their employees who were on the no-match list. Could you explain how you were able to conduct that enforcement action in spite of this law that prohibits information sharing as a rule? Ms. Myers. Absolutely, Senator. In the IFCO case, we first started the investigation when an employee kind of came to us, came to local police and said they had seen some things inside IFCO that were wrong. People were ripping up W-2s and, you know, that certainly sent--this employee realized there was something wrong. As we worked through this investigation, we were able to bring Social Security in on this investigation, but if we had had this information at the beginning, we could have targeted IFCO. As you mentioned, approximately 13 letters, each letter saying more than 1,000 employees had no-match. This would have been an employer that we would have targeted from the beginning and not had to work this case through other means. So it would have kind of tremendous value having access to this information up front to really drive our investigations to the most egregious employers. Chairman Cornyn. Mr. Gerry--and thank you for doing it--you gave us some proposals for how much money it would cost to change the Social Security card, and if we looked at doing it for everyone, some $9.5 billion, but if we targeted it, more; at least perhaps on a phased-in basis, it could be done for less than that. But, really, my question goes to all three of you about what the American people are being asked to accept when it comes to comprehensive immigration reform. Knowing that it is going to cost a lot of money and take some time and take development of considerable infrastructure when it comes to border security and the systems that it would be necessary to expand the Basic Pilot Program so that employers could actually verify employment eligibility, and perhaps even change the nature of the Social Security card to verify that, in fact, this person is actually the person who claims that is their card to prevent things like identity theft. Isn't it realistic to say that this comprehensive reform, which I support, should be phased in once we have had an opportunity to get some of these systems up and running so that we can actually have some confidence that they will work? I am going to throw that hot potato to you, Mr. Baker, to start with. Mr. Baker. Thank you. Well, certainly, on the question of what the American people will be asked to accept, you and Senator Kyl have both identified not just the costs. We all now when we get jobs have to fill out I-9 forms, and there will be more requirements beyond paying taxes on Americans who want jobs because, as Senator Kyl pointed out, it is very easy for someone to pretend to be a U.S. citizen. And so if we do not ask everyone who takes a job to go the electronic verification system, then the system will not work. So this is not cost-free for anyone. On the question--you asked me a hot-potato question. Sorry. Chairman Cornyn. Well, the question is: Should the American people just accept comprehensive immigration reform based on the Government's promise to follow through with the means to actually make it work? Or should there be a phased-in system where once the border is secure and once the worksite was--we were able to verify eligibility of prospective employees, then we could work on phasing in other aspects of the program? Mr. Baker. The phasing of this is tricky, but there is no doubt that it is going to take us a little while to get many of these systems ramped up. This is not something that can be done overnight, or at least it cannot be done well overnight. And at the same time, I think that there would be considerable difficulty if you began aggressive worksite enforcement and had nowhere for the people who were going to lose their jobs as a result of that to go, if you did not have a temporary worker program for them to enter into. So that there are difficulties with beginning all of enforcement without also providing a place for people to go when they are driven out of the shadows and hopefully into the light. Ms. Myers. If I could just add to Secretary Baker's comments, as the enforcement agency we are committed to stepping up our worksite enforcement efforts and, in fact, are doing so, regardless of whether Congress will pass a law. This year alone, on criminal investigations of egregious employers, we are already up over 121 percent over last fiscal year, and that is only based on the end of May totals. So we are aggressively ramping up worksite enforcement, as directed by Secretary Chertoff, and we will continue to do so, regardless of whether there is a change in the law. Chairman Cornyn. Thank you. Senator Kyl. Senator Kyl. Thank you, Mr. Chairman. Let's break this down a little bit. In your testimony, Mr. Baker, on page 7, you quoted the President talking about a key part of the system being a new identification card for every legal foreign worker. As I mentioned in my opening statement, the people least likely to be engaged in fraud would be those people who seek a new identification as a temporary worker. They would have every incentive to use that. It would probably be something like a laser visa that people from Mexico obtain today to come into the country for short periods of time. Would all of you agree or, in effect, stipulate that for the guest worker program, some kind of legal document that can be easily verified and has biometric data in it would be a logical step to take. Any disagreement there? So the key question is then what you do with everybody else, namely, American citizens and everybody who has claimed to or will claim to be an American citizen. And my question is: What are we going to do to verify the eligibility? Let me just state a couple predicates and then ask all three of you to relate to this. Madam Secretary, you talk about the ICE worksite investigations, and you say the law should reasonably require to review and retain relevant documents and information obtained during the verification process, as well as during the subsequent employment of a worker. I am just going to posit that if we are relying upon employers to look at documents, we are starting off on the wrong foot here. So just put that away for a moment. And, Mr. Gerry, you say on page 2 of your testimony that, ``Our ability to determine the identity of the person to whom a number has been assigned, whether that individual was entitled to an SSN, and whether the individual was authorized to work in the U.S. at the time the SSN was issued, has been improved with the development of SSA's more stringent verification processes and requirements.'' You go on to point out that the bulk of the expense and the issuance of a card for everyone who seeks employment--it would not have to be everybody in the United States, but at least if you seek employment, you would have to have this case--that the bulk of that expense is in the background checks to determine eligibility for it. It is not in the issuance of the piece of paper itself, as I recall. So with those background notes here, would all three of you speak to what the administration proposes with respect to verifying the employment eligibility, not of foreign workers but of everybody else, starting with Policy Secretary, Mr. Baker? Mr. Baker. Thank you. The administration has been supportive of the idea of having a tamper-proof Social Security card, not one that is an identity card but a card that is not easily forged. As a way of preventing what happened to Audra Schmierer and the identity theft problem, that has considerable value. You do not have to go to an identity card or require-- Senator Kyl. May I just interrupt you? Would it have biometric data or at least a photograph? Otherwise, how would you identify the number with the person who is seeking employment? Mr. Baker. Well, the important thing--we have not suggested that it necessarily include biometrics because even without biometrics, as long as a limited number are issued, as long as you do not issue more than one, then there is only one. And you cannot have 81 people walking around with the same card. Senator Kyl. But if the card is stolen, I can contend it is my card, even though it is not, unless there is a way for the employer to see obviously that I am not the picture on that card. So don't you have to have some identifier connected to the card? Mr. Baker. We have not gone as far as that. That changes substantially the Social Security-- Senator Kyl. Wait, let me just interrupt and go on to the rest of the panel here. You are going to have to persuade me that somehow not only can Social Security verify the legitimacy of the number, but that you can connect it up to the individual who is presenting the card to you when you offer the job. So would all three of you address that? Mr. Baker. And I would just point out that many--most Social Security cards now are issued at birth, and most people, unlike me, don't look as much like they did when they were born. And so it is unlikely that the picture will do much good, or you are going to have to have them renewed regularly. Ms. Myers. I don't know that I have too much to add on the particular point that Secretary Baker raised, but to the point about whether or not the card is enough, we think the card is not enough. You need to have kind of a comprehensive approach and a comprehensive view of how you do effective worksite enforcement. So from an enforcement agency's point of view, we would be looking at, you know, beefed-up document and identify fraud cases. That is where for us I think it would be helpful if the employers were required to retain the documents. It is also helpful for us--we have had a number of employers come to us recently and say, ``We are not sure we are doing this right. How do we do this? '' It is helpful, if they were required to keep the back-up documents, to see, you know, who was trained, how were they trained, what sort of things they were doing. So in terms of enforcing the law, it is helpful for us to be able to use all the criminal statutes to go after it and not depend on just one tool. Senator Kyl. Let me get to Mr. Gerry, but let me just say that if we are going to rely upon documents, you are going to have to persuade me that they are not counterfeitable or that the employers can easily determine that they are not counterfeitable, or every employer is going to have to continue to play cop and try to figure out whether this birth certificate is real or not or the driver's license is real, or whatever. I do not see how the administration can support a temporary worker program and an employment verification system that does not clearly connect a valid Social Security number to the applicant for the job in some very specific governmentally determined way. If you are going to rely upon the employer to figure it out, the system is bound to fail. It has a fundamental flaw, the same as the 1986 law did. Chairman Cornyn. Senator Sessions. Senator Kyl. I am sorry. I interrupted Secretary Myers. Mr. Gerry. I was going to add on the point of the biometric identifier. The cost numbers that I gave you, the estimate we have right now is $28-$25 for the card; and we estimate an additional $3 per card due to new verification requirements. Adding pictures or other biometric information is not a large part of the cost. On the other hand, as Secretary Baker mentioned, if you use a picture, you are going to have downstream updating costs, and, of course, those costs will be the $25 part of the $28. That is, every time you have to have someone come back in and add a picture, of course, you want to be sure that the picture is the picture of the person, so you would have to go through that process. We have been looking at some of these cost issues, as well as how often we would have to update the card. Obviously, we would have to up date the card even for people who started with adult pictures, because over time the value of the biometric identifier would decrease. Chairman Cornyn. Senator Sessions. Senator Sessions. Thank you, Mr. Chairman and Senator Kyl. Both of you have worked very hard to identify the weaknesses in the workplace enforcement and have been active in attempting to develop a system that will actually work. Secretary Baker, you are exactly correct, but I would be a little more critical of the Congress than you have been. You said they passed in 1986 a bill they thought would work. I submit they probably thought it would not work and maybe never intended for it to work, at least the interest groups who blocked the stronger legislation. The bill was not workable. So early on we realized, did we not, that the 1986 law was unenforceable as a practical matter? Wouldn't you agree? Mr. Baker. I think that by the middle 1990's, at least, it was pretty clear that it was going to have major problems. Senator Sessions. Now, it strikes me, Mr. Baker, that the President takes the oath to enforce the laws of the United States and ensures that the laws are enforced. The executive branch--I used to serve in the Department of Justice--is the branch with the responsibility to enforce the laws. My question to you is: Are you coming forward with a comprehensive plan to tell this Congress that we are now setting about to deal with the problem of immigration? Are you coming forward with a plan that would actually work? And do you have one? Mr. Baker. We are doing two things. As Assistant Secretary Myers said, we are enforcing the law and we are enforcing it in creative, new ways, and we will continue to do that. And I think that that will demonstrate our resolve and our willingness to work within the current system to try to make it work. But as you said, we do not have today a civil enforcement scheme that works well. The fines are too low, and we cannot meet all of the administrative procedures and the knowing standard and still have an effective, fast-moving regulatory process. We have asked for that. Senator Sessions. T.J. Bonner with the Border Patrol Officers Association said, ``Absolutely we can create a lawful system. You have border enforcement and you have workplace enforcement to eliminate the magnet, the jobs magnet.'' Mr. Baker. Absolutely. Senator Sessions. I think he is exactly correct. Would you agree with that? Mr. Baker. I would. Those are the two critical things. Senator Sessions. All right. Then, is the President committed to a program that will work? Mr. Baker. Yes. We have asked for a lot of new worksite enforcement capabilities as well as, as you know, a lot of resources for the border, and those are a critical part of this comprehensive program. Senator Sessions. Secretary Myers, you mentioned Secretary Chertoff, and I have been pleased in recent weeks that he has begun to speak out in ways that indicate he is serious. I thought one of the most helpful things was his statement--I believe in a conference call maybe some of the other Senators were involved in--in which he said that S. 2611, the immigration bill that passed the Senate, with regard to the Social Security number question and the ability to identify those who have fraudulent numbers and are submitting fraudulent numbers, he concluded that is a poison pill and that it would not work. Yet when Senator Cornyn objected to it, it was ratified anyway by a vote. I voted against it. At any rate, the Senate has passed a bill. Would you agree that, with regard to enforcement at the workplace through utilization of the Social Security number, that will not be effective? Ms. Myers. Well, certainly at this point, Senator Sessions, we have such limited access to the data. It is on a very limited case-by-case--we have to petition on each particular case only after we have articulable facts. Certainly we want free and complete access to this data. We think that would allow us to target the employers more effectively and do a better job. I also think, following up on what Assistant Secretary Baker said, that one of the mistakes in 1986 is thinking about worksite enforcement as simply enforcing 274A, that criminal misdemeanor and low fines statute. I think as Senator Kyl pointed out, unless we go after document fraud, the document fraud rings, unless we go after the other--the alien-smuggling rings that bring people into this country to find jobs, unless we go after the other parts of the problem, border security and interior enforcement, we will not be able to really stem the magnet of illegal employment. Senator Sessions. Well, the matter is very serious. Mr. Chairman, I would just note that we created a wall between CIA and FBI that we recognize helped keep us from enforcing the law against terrorists, and we removed that wall. We now have one between the Department of Homeland Security and Social Security. Both of you work for the Government of the United States of America and the people, and we need to have that information readily shared. Under the bill that we passed, this Senate passed, Homeland Security has to ask for the specific information in writing, and Social Security is only required to respond if the employer that you are inquiring about has over 100 employees whose names do not match their individual taxpayer identifying number and more than 10 employees are using the same taxpayer identifying number. That indicates to me that Congress, at least, is not very alert to what needs to be done. I thank the Secretary for at least objecting to that. Mr. Chairman, thank you. Chairman Cornyn. To summarize what I understand you are telling us, Mr. Baker, first of all, I know the President has made a speech about the need for effective worksite verification, but until today, has the Department of Homeland Security actually come forward and asked the Congress to embrace the elements of this proposal for an electronic employment verification system, to share no-match data, to ensure that all legal foreign workers have secure employment authorization, and to stiffen the penalties for employers who violate those laws? Mr. Baker. Well, as you know, we have had a long and extensive engagement with the Senate, the Senate Committees, but I think we have not made a formal statement to that effect before today. Chairman Cornyn. Well, suffice it to say these elements which you consider essential to effective worksite verification, to your knowledge are they present in the current Senate bill? Or are these things that need to be added to improve it to actually make it workable? Mr. Baker. We think the Senate bill needs substantial work along those lines. Chairman Cornyn. The Senate bill would require all employers in the United States to participate in a mandatory electronic verification system within 18 months. Right now, only 8,600 employers participate in the voluntary Basic Pilot verification system. Is 18 months a realistic timeframe? Mr. Baker. It is an aggressive timeframe. We were pressed pretty hard in the discussions to say what can you do. We have the advantage that the current budget proposal that is pending before Congress for next year actually includes about $100 million that is designed to ramp up electronic verification so that we could get started and we could have the money beginning in September or October. So as I say, it is aggressive, but the CIS experts who have followed this have looked at it and believe that they can meet it. Chairman Cornyn. Secretary Baker and Secretary Myers and Mr. Gerry, you all are dedicated public servants, and we appreciate your service. But the American people feel like they were scammed the last time we were on this subject 20 years ago. And if we are going to effectively solve this problem, we are going to have to regain their confidence. And I know that you have a gift for understatement, Mr. Baker, when you said that this is very aggressive to get this online in 18 months. But I feel very strongly that, unless we are serious about making the system work and we actually appropriate the money, hire the people, train the people, actually put them in place, create the databases, create the secure identification card to make this work, we will find ourselves here once again with not 12 million people illegally in the United States but maybe 24 million or more. And the list goes on and on. And I for one do not want to look back with regret that I did not do everything within my power, as someone representing 23 million people, to make sure that we do not scam the American people, that we are serious with them, we mean what we say, and we are going to do what we say. Ms. Myers, we talked a little bit about the several hundred workers who were arrested in the IFCO case. That is the pallet company. And the GAO, the Government Accounting Office, reports that officials in 8 of the 12 field offices they interviewed told them that the lack of sufficient detention space has limited the effectiveness of worksite enforcement. This is an issue Senator Kyl and I have focused a lot on during the course of our hearings and our joint Subcommittee hearings. But we only currently have somewhere around 20,000 detention beds, and I know we have tried to add to those, but it seems like we are sticking our finger in a hole in a dike trying to hold the ocean back, when we had 1.1 million people come across the border illegally last year, yet we only have 20,000 detention beds. And we say, the Secretary has said he wants to eliminate the catch-and-release program, particularly insofar as it relates to people coming from countries other than Mexico. But that was some 250,000 or so last year, and 20,000 detention beds are not enough to hold enough people to make that a credible deterrent. Can your agency expand worksite enforcement along the lines of what you are suggesting here if you do not have sufficient detention space? Ms. Myers. Well, certainly we will continue to prioritize the beds we have. As you noted, we have 20,800 beds. In the supplemental, we were just given an additional 4,000 beds through the end of this fiscal year. The President's 2007 budget seeks an additional 6,700 beds. What we are trying to do is to use the beds we have more efficiently by turning them over quickly, by utilizing things such as expedited removal, which we are using along the borders, and other tools, such as stipulated removal and administrative removal, to send aliens home more quickly. One of the things that I have implemented in worksite enforcement cases kind of after the IFCO case and looking at kind of the large number of worksite cases we have coming up is I am requiring my agents, the SACs, to meet with the head of their detention and removal local office before they start any worksite investigation and see is there a way that we can detain these people or do we have a JPATS that can come in, that can take these people if they want to stipulate to removal right away. That has been very effective in some recent cases in using the beds that we have and making sure everyone is detained. Another thing that we are doing and we did in the Fischer Homes case is we worked very successfully with the U.S. Attorney there and got them to agree to prosecute each and every one of the aliens that were arrested in the case on the misdemeanor 1325 charge, and that allowed us to borrow the Bureau of Prison beds and not use the ICE detention beds, but also ensure that we were detaining these aliens before we were able to remove them. So it certainly is a challenge, but I think we are making some good progress. Chairman Cornyn. Senator Kyl. Senator Kyl. Let me go back to the question of what kind of verification system will be used for other than temporary workers. First of all, let me ask all of you this question: Does it make any sense necessarily to have a standard for temporary workers that requires the use of a fraud-proof document that in some way identifies the individual but not require the same kind of system for people who are seeking employment, 12 million of whom we know not to be United States citizens? Is there a reason for that double standard? Mr. Baker. Let me try to address that. It is not our expectation that there will be no identification requirement for employees, prospective employees who say, ``Well, I am not a temporary worker.'' Senator Kyl. That is obvious. My question is: Why would you have a double standard? When you know there are 12 million people who are here illegally and more coming every day, why would you have an easier standard for them to be employed than for people who voluntarily step forward and say, ``I would like to be a temporary worker'' ? Mr. Baker. Well, we are working to raise the standards for documents. In the longer run, the REAL ID-- Senator Kyl. Look, Secretary Baker, let's get to the point here. You are in charge of policy. Secretary Myers has to then figure out a way to enforce that policy. And Mr. Gerry has pointed out that for a nice sum of money but, nevertheless, his agency can verify the eligibility of people to hold a Social Security card and run a system that uses a card for verification. Now, what you have outlined in your statement is a double standard. For temporary workers, they have got to have a fraud- proof document that identifies them. But for everybody else, we are going to have a requirement to share no-match data--which could be at least a year old, as we have heard--and a mandatory electronic verification of the validity of the Social Security number system. But I have not heard any other fleshing out of what you propose to do to ensure that when I apply for a job, you verify that not only is my number valid but that I am who I say I am. Mr. Baker. We would expect employees to show ID and to allow the Secretary to set standards for that ID that would be designed to make sure that it is high-quality ID. Senator Kyl. Okay. Now, let me just ask you: Since you have had that authority in the last several years, is there a suggestion that the ID that is required today is adequate or that nobody has gotten around to requiring that it be improved? Mr. Baker. We think that probably too many documents currently are permissible, and we propose in the legislation to trim those back. And if the legislation does not pass, we will have to take action in-- Senator Kyl. Well, have you suggested to us what documents you are talking about? Mr. Baker. Yes, and I do not have that list, but it would be a relatively limited list. Senator Kyl. Give me the two or three most usable ones. Mr. Baker. REAL ID-compliant driver's license, which contains a lot of double-checks on IDs, on identity, and also on tamper-proof standards; a passport. Now, not everybody has those things. Birth certificates are going to have to be accepted. Those are the documents. Senator Kyl. Okay. So let me just interrupt. We have got the same basic thing we have got today except that in 2\1/2\ years REAL ID kicked in, and when it does, there may or may not be better driver's licenses because there is still no foolproof way of the motor vehicle department personnel verifying the legitimacy of the person who is asking for a driver's license. Not everybody has a passport, as you note. I do not know very may employers who are good at detecting counterfeit birth certificates. Are we going to improve this situation with what you are suggesting here? Mr. Baker. I think it will improve it. I recognize that there are still gaps in the process that could be exploited. At the same time, there are great costs to saying to Americans, you are going to have to show up and get in line for a new form of ID that is going to be issued by an agency that has not been in the ID-issuing business before. Those are heavy costs, and not just in Government funds but in the time and energy and hassle that it would impose on every American. And so we want to be cautious before concluding that that is the only solution. Senator Kyl. Okay. Let me just say that we require that for many, many other things in life, including a driver's license or to get credit to go down to the store. I mean, people do not consider it a huge burden to show some identification purposes at a store. It just seems to me that Americans want us to ensure that the rule of law is respected and enforced, and if they see us coming in with something that is second-best, that does not guarantee that people can be found out if they seek employment illegally, they are going to consider our efforts no better than 1986, as we talked about before. Now, you talked about what life was like in 1986. That was a big year for me. That is the year I was elected to the Congress. So since I did not come here until January 1987, I can say I had nothing to do with the 1986 law. But I do have something to do with this law, and I will just tell you this: We cannot repeat the mistake of 1986. You cannot rely on the same kind of documents and expect to get a different result. There must be a governmental-issued document that verifies employment eligibility, or this system will not work. Mr. Gerry has said that they have the ability to do that, and I do not think that Americans will consider it too much of an imposition when they are seeking a job--that is the only time they have to do it. Now, some people seek jobs relatively frequently, but most people do not. So on that one occasion where you are going to have to get a job or show your prospective employer you are eligible, is it too much to ask that you get something that looks like a driver's license or an old Social Security card, but, in any event, that is fraud- proof, has your picture on it, and that the employer can verify is a properly issued card? It seems to me the American people are perfectly willing to bear that kind of expense to get back with the rule of law and end this problem of illegal immigration. Senator Sessions. I could not agree more with Senator Kyl in the fundamental premise that we have got to get it right this time. I will not support a bill and I will oppose as vigorously as I can any legislation that from a reasonable analysis of it, will not work. I am convinced S. 2611 will not work, and to the extent to which it has been sold to the American people, that is not legitimate. Mr. Baker, you mentioned objections from the business community. You know, it is kind of like the farmers. I think the farmers do not want open borders. There may be some lobbyist groups that do. I think some of the lobbying entities for businesses seem to favor almost--they do not want any restrictions on immigration. But looking at a recent poll from the National Federation of Independent Business in April, 76 percent said they would work with an electronic eligibility verification system and would not consider it a burden. That is over three-fourths. And over 90 percent of small businesses believe immigration is a problem. So I think we would have support if we would come up with a system that can work. Mr. Gerry, with regard to the Social Security match problem, that is, when an employer sends in a Social Security number and that number does not match some other number, or someone is already using that number I guess would be some of the things that show, did I understand you earlier to say that the Social Security Administration supports removing this wall between you and ICE and that the administration supports removing that wall for law enforcement purposes? Mr. Gerry. Yes, I did say that, Senator. I think the Administration's position is that, it would be appropriate for Congress to amend Section 6103 in order to remove the restriction that currently prevents us from sharing information on no-match letters, except in the extraordinary circumstances that Assistant Secretary Myers indicated. But the-- Senator Sessions. What if it was--would that include all immigration offenses, civil and criminal? Mr. Gerry. Well, that would be the point, Senator. It would include all information that we have. We would provide the Department of Homeland Security with whatever information we have about the no-match--the no-match letters themselves, and the Social Security numbers that did not match. Then it would be up to the Department of Homeland Security to decide what, if anything, to do with that information. Right now we are actually precluded from doing that, unless Homeland Security is in the stage that Secretary Myers described earlier where they are in an active investigation. In which case, we are now allowed in that very limited circumstance to share information. The proposal that you are talking about would be to remove the barrier so that we could freely share information about no- match letters. Senator Sessions. Secretary Myers, do you think that would meet the needs of the Department of Homeland Security and ICE? Ms. Myers. Absolutely. That would be a terrific tool. Every time we have been able to work with Social Security in the middle of an investigation, it has been terrific, and we would love to have that information on the front end so we could talk to-- Senator Sessions. It would give you an easy red alert that something is wrong in this business if they have a lot of no- match or improper Social Security numbers. Ms. Myers. That is exactly right. Senator Sessions. Let me ask you, how many ICE investigators are there? And how many do we have working on workplace enforcement today? Ms. Myers. There are approximately 5,600 ICE agents, and then working on--40 percent of them work on various immigration-related topics full-time. I would say that it is--I cannot give you a precise work-year number. I think it is higher than the number that GAO had from a few years ago, but I would have to get back to you on that. I would say it is in the range--I would have to get back to you with the precise number. Senator Sessions. Well, our numbers from the GAO report in August of 2005, just less than a year ago, said there were 90 agents, which is down from 1995, when there were 240. But when you figure based on that full-time equivalent evaluation of how many hours were actually spent on it, it totaled 65 agents. Isn't that an awfully small number if you want the American people to think you are serious about workplace enforcement, 65 for the whole United States of America? Ms. Myers. Yes, it is, and the President is proposing some additional 171 agents to be dedicated solely to workplace enforcement. Since I have been in the job, I have made workplace enforcement a priority. As I mentioned earlier, we are up in terms of investigations, criminal investigations of egregious employers, over 121 percent already over all of fiscal year 2005. We are also up 48 percent in terms of investigations on critical infrastructure protection sites, and this year we have already apprehended and arrested on administrative charges almost twice as many individuals, illegal aliens, as we did all of last year on worksite enforcement. So we are increasing this as a priority, and we are also looking at what can we do that is not pure worksite, but how can we do document fraud cases more effectively, because if the aliens do not have those phony documents, they will not be able to bring them in and trick employers who want to do the right thing. Senator Sessions. Well, the numbers show that the actual enforcement actions went to virtually insignificant numbers. They were so low in early 2000, and I am glad to see they are coming up. In my view there is a tipping point, and we are way away from it. But it is not impossible to reach it. And that tipping point is the point at which every business in America knows that they are likely to be audited and likely to be disciplined if they hire people illegally. We are not there yet. Doubling from 100 or 50 is not significant when you consider the nationwide challenge, so I think we need to get serious about it. I think some of that can be done through a reallocation of existing resources, and some may have to be done with new resources. Thank you, Mr. Chairman. My time has expired. Chairman Cornyn. Thank you, Senator Sessions. We are winding down here with this panel. We have another panel. Senator Kyl wanted to send you off with some concluding thoughts and maybe requests for additional information. By the way, we will leave the record open until 5 p.m. next Monday, June 26th, for members to submit additional documents or written questions to you, which we would ask for you to promptly respond to. But, Senator Kyl, I will recognize you. Senator Kyl. Just this to close. The bill that the Senate passed in Title III does require a way of verifying the eligibility of all people who apply for a job that does not rely on documents that are currently relied upon. And my understanding from the administration's position was that there was support for implementing that kind of a system, though the suggestion was it would take longer than the 18 months that we are seeking here. We need clarification of that from the administration, because I believe if we simply rely upon the kind of documents that we have been talking about and employers are required to verify it, we will not have a system that will work. And, second, Mr. Gerry, I think it is very important for us--and I would like to submit some additional questions to you--to find out what is necessary for, including the cost of, determining eligibility when you issue a Social Security number to an adult to ensure that the individual that receives the number is, in fact, legally entitled to be employed, whether U.S. citizen, green card holder, other kind of visa, or whatever the status might be, because it seems to me that those are the critical elements of not only making a system work but also providing that it can be enforced. And I think people have to know it can be enforced. Finally, for Secretary Myers, I am going to do some followup questions regarding how many people would be required to perform the audits that employers must know are coming, because if they do not know that they are going to be audited-- if they know they are going to be audited within a 3- or 4-year period for sure, then we are much more likely to have good compliance with this. Thank you, Mr. Chairman. Chairman Cornyn. Secretary Baker and Secretary Myers and Commissioner Gerry, thank you very much for being here with us today. We appreciate your service. If we could have the second panel assume their position at the table as soon as they are given an opportunity, we would appreciate it. [Pause.] Chairman Cornyn. We are pleased to have as a distinguished second panel today a number of individuals, and I will introduce you individually and turn the floor over for opening statements. On this panel we will hear from Mr. Richard Stana, Director of Homeland Security and Justice for the Government Accountability Office. Stewart Verdery is joining Mr. Stana to his left. Following his confirmation by the U.S. Senate in 2003, Mr. Verdery served as the Assistant Secretary for Homeland Security, and he is also an adjunct fellow at the Center for Strategic and International Studies. Cecilia Munoz is Vice President of the National Council of La Raza, the Office of Research, Advocacy, and Legislation. She has been actively involved in comprehensive immigration reform, and I know we will benefit from her testimony here today. Linda Dodd-Major is creator and director of the INS Office of Business Liaison. She worked with the attorneys, employers, and associations throughout the United States to explain regulations, policies, and procedures relating to the employment verification process. I know we will benefit from your experience. Let me at this time turn the floor over to Mr. Stana for a 5-minute opening statement. We will go down the line, and then we will open it up for questions. Thank you. STATEMENT OF RICHARD M. STANA, DIRECTOR, HOMELAND SECURITY AND JUSTICE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE, WASHINGTON, D.C. Mr. Stana. Thank you, Mr. Chairman, members of the Subcommittee. I appreciate the opportunity to participate in this hearing today on worksite enforcement and employer sanctions efforts. My prepared statement is drawn from our recent work on the employment verification process and ICE's worksite enforcement program. I would like to summarize it now and also briefly discuss our ongoing study of foreign countries' programs for guest workers and worksite enforcement. As we and others have reported in the past, the opportunity for employment is a key magnet attracting illegal aliens to the United States. In 1986, Congress passed the Immigration Reform and Control Act, which made it illegal to knowingly hire unauthorized workers. IRCA established an employment verification process for employers to verify all newly hired employees' work eligibility and a sanctions program for fining employers who do not comply with the Act, and these programs have remained largely unchanged in the 20 years since passage of IRCA. The current employment verification process is primarily based on employers' review of work authorization documents presented by new employees. However, the availability and use of counterfeit documents and the fraudulent use of valid documents belonging to others have made it difficult for employers who want to comply with the employment verification process to ensure that they hire only authorized workers. This is further complicated by the fact that employees can present 27 different documents to establish their identity and/or work eligibility. Counterfeit documents have also made it easier for employers who do not want to comply with the law to knowingly hire unauthorized workers without fear of sanction. DHS and the Social Security Administration currently operate the Basic Pilot Program, which is a voluntary, automated system authorized by the 1996 immigration act for employers to electronically check employees' work eligibility information against information in DHS and SSA data bases. Of the 5.6 million employers in the U.S., about 8,600 employers have registered to use the program, and about half of them are active users. This program shows promise to help identify the use of counterfeit documents and assist ICE in better targeting its worksite enforcement efforts, particularly if the program is made mandatory as envisioned under various legislative proposals. Yet, a number of weaknesses exist in the pilot program that DHS will have to address before expanding it to all employers. They include the inability to detect the fraudulent use of valid documents and DHS delays in entering information into its data bases. Furthermore, according to DHS, additional resources may be needed to complete timely verifications under an expanded or mandatory program. Turning to worksite enforcement, the low priority given to it by both INS and ICE has been a major factor in the ineffectiveness of IRCA. In fiscal year 1999, INS devoted about 240 FTEs to worksite enforcement. It now devotes around 100 FTEs to address the employment of millions of unauthorized workers. After 9/11, ICE focused its worksite enforcement resources mainly on identifying and removing unauthorized workers from critical infrastructure sites, such as airports and nuclear power plants. As a result, the number of non- critical infrastructure worksite investigations declined. Furthermore, the number of Notices of Intent to Fine issued to employers for knowingly hiring unauthorized workers or improperly completing the employment verification forms dropped from 417 in fiscal year 1999 to only 3 in fiscal year 2004. In addition to limited resources, a number of issues have hampered worksite enforcement efforts. In particular, the availability and use of counterfeit documents have made it difficult for ICE agents to prove that employers knowingly hired unauthorized workers. Further, although guilty employers could be fined from $275 to $11,000 for each unauthorized employee, fine amounts are often negotiated down in value during discussions between ICE attorneys and employers, to a point so low that employers might view it as a cost of doing business rather than an effective deterrent. ICE recently announced a new interior enforcement strategy under which the agency will seek to bring criminal charges against employers for knowingly hiring unauthorized workers, and ICE has reported an increased number of criminal arrests, indictments, and convictions. However, it is too early to tell whether this revised strategy will materially affect ICE's impact on the millions of unauthorized workers in the U.S. and those employers who hired them. As I mentioned earlier, we are currently studying foreign countries' guest work programs and worksite enforcement efforts. Among the issues we are studying are the types of guest workers involved and the incentives used to help ensure their return to their home countries, the nature and effect of regularization policies, foreign countries' experiences with integration and assimilation programs, and worksite enforcement activities and resources. We plan to report on the result of this work later this summer. In closing, both a strong employment verification process and a credible worksite enforcement program are needed to help reduce the employment of unauthorized workers. It is important to consider what resources would be needed to make these programs successful and how to balance these resources with those devoted to border enforcement and to other immigration management priorities. This concludes my oral statement, and I would be happy to address any questions that the Subcommittee may have. [The prepared statement of Mr. Stana appears as a submission for the record.] Chairman Cornyn. Well, thank you very much, Mr. Stana. Mr. Verdery. STATEMENT OF C. STEWART VERDERY, JR., FORMER ASSISTANT SECRETARY OF HOMELAND SECURITY, AND ADJUNCT FELLOW, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES, WASHINGTON, D.C. Mr. Verdery. Chairman Cornyn, Senator Kyl, Senator Sessions, thanks for having me back to the Committee again as you consider the most critical issue of how to get this employment system correct. I hope you will make sure that 2006 is not the immigration version of the movie ``Groundhog Day.'' We do need to get it right, and I think we have made a lot of progress over this year in trying to figure out the best employment system that we can come up with. I appeared here about a year ago as you were beginning your hearings. Now is the time to act. Senator Cornyn, as you said in your opening statement, each day that goes by the problem gets worse. The issues get more inflamed. The number of workers becomes greater. The politics become worse. This cannot be solved solely by enforcement or by what you might put on an appropriations bill. Now is the time to act. The issues are hard, but this is the time to act now that both bodies have acted and you have a chance to go to conference, I urge you to try to push this over the finish line this year, if you can. In that vein, I wanted to ask for your indulgence to put in the record an open letter from a number of former Immigration and Homeland Security officials asking for a comprehensive approach to immigration strategy, which I believe your staff has. Chairman Cornyn. That will be made part of the record, without objection. [The letter appears as a submission for the record.] Mr. Verdery. In particular, I would mention in terms of this comprehensive approach, is the issue of whether we should wait to turn on a guest worker program before the employment verification system were to come online 18 months or so after a bill were to pass. We have systems to vet foreign workers right now. They work for things like H1-Bs and other programs. Those systems should be used while we build out a better system down the line. But if you essentially wait to turn on that foreign guest worker program for another 18 months or more, you are only adding to the hole. You are having another 18 months of workers being attracted to employment and hired and employed illegally rather than channeling that flow through legal means. Turning to the employment issues, it is hard to imagine a situation worse than the current one, and it is not solely the fault of the 1986 law. It is a mix of law, of enforcement policy, of employer practices, and of legal decisions from the courts. But it has been mentioned by prior witnesses and by the Senators on the dais that essentially prospective employees are allowed to prove their identity by producing a number of identification documents which are illegally obtained, easily forged, and could be used multiple times. In essence, we have tried building an enforcement regime on quicksand. Prospective employers who would like to do the right thing have been provided no tools to ascertain anything but the very worst frauds, and there has been no system to confirm employment eligibility. Prospective employers who would like to break the law or are willing to look the other way have essentially been given a green light due to lack of enforcement resources and the fact that INS and DHS announced that enforcement activity would be focused on employers in a handful of critical infrastructure industries with national security implications. And despite the fact that Social Security has an elaborate system to vet down to the last penny the amount of retirement benefits and tax charges that people owe, that system has essentially been of little use to enforcement authorities. The American people rightfully are concerned about this situation, but they are also willing to accept the reality that a new employment verification scheme cannot be expected to be foolproof and universally applied from day one. This is not missile defense. Some measure of error is to be expected and tolerated, so long as it does not result in U.S. citizens being denied the right to work. Thus, as you begin and continue the process of building the electronic employment verification system, the EEVS, I make the following recommendations that are more thoroughly discussed in the written testimony. It should be a phased-in approach. You should go after the most critical industries first--aviation, chemical plants, other critical infrastructure--as your Senate bill does. In terms of employee rights, during the initial phases of the EEVS, enforcement activities should err on the side of employees claiming to be U.S. citizens before they would be terminated. Eventually, over 50 million people are likely to be enrolled on an annual basis in the system, and nothing will cause support for it to collapse more quickly than horror stories of legitimate U.S. citizens being denied the right to work because of faulty Government data bases. Third, on REAL ID enforcement, the regulation process is ongoing at DHS, but the question is: Where is the funding? Are we going to stay on track with the regulations and tell States what they have to do? And are we going to help States pay for this? It is expensive. But we are building an immigration system, a voter ID system, and even perhaps a cross-border traffic system on REAL ID, and we have to keep it on track and have it be adequately funded. In terms of biometrics, basing this system on non-biometric identifiers, such as Social Security numbers and immigration control numbers, may be a good short-term fix, but over the long haul you have to nail down the person with a biometric identifier. This will be especially helpful for people who are likely to be discriminated against because you can tell one person from another with surety. In conclusion, I would also like to make two other points. We have to involve the private sector in building this system. The Herculean task of building this system on the back of a U.S. Citizenship and Immigration Services agency that is already busy is going to require private sector involvement. And, last, on fees, asking U.S. employers to pay for this beyond what they have to do in their own internal workplaces to make themselves into compliance is not right. Employers should be ready to comply with laws, whether it be environmental laws, tax laws, accounting compliance, immigration laws, but they should not have to pay for the Government to build this system. This is a core governmental function, and the taxpayers ought to pay for it. Again, I congratulate you on having the oversight of the legislation. There is nothing more critical than getting this right. It is the linchpin to this bill, and I hope that you will continue your oversight. And good luck during the summer on this most important project. Thank you. [The prepared statement of Mr. Verdery appears as a submission for the record.] Chairman Cornyn. Thank you, Mr. Verdery. Ms. Munoz. STATEMENT OF CECILIA MUNOZ, VICE PRESIDENT, OFFICE OF RESEARCH, ADVOCACY, AND LEGISLATION, NATIONAL COUNCIL OF LA RAZA, WASHINGTON, D.C. Ms. Munoz. Thank you very much, Mr. Chairman, and thanks for the opportunity to come and talk about this very critical issue in the immigration reform debate. This is perhaps the least discussed element of the bill, as you mentioned, and it is arguably the one which is going to have the biggest impact in the sense that it is going to affect everybody in the United States work force. And I could not agree more with all of your assertion that it is essential that this provision of employment verification work. It needs to work in order to make immigration control more effective so that employers can efficiently and accurately verify their employees, and it needs to work to ensure that American workers and immigrant workers who are fully authorized to work in the United States do not experience delays and denial of employment as a result of what we do on immigration reform, and that they do not experience discriminatory practices. The potential for impact on the United States work force is enormous, and we have experience on what this is likely to do and the problems that may well be caused if we do not address them as Congress proceeds with immigration reform. We know that U.S. workers are likely to be--could be negatively affected if we do not fix problem in the data base, if we do not change the incentives that are in the law which affect discriminatory practices. And we must not move forward unless we are prepared to address the potential for mistakes to make sure that, as we are creating avenues for employers to effectively verify their employees, we are making sure that American workers and immigrant workers who are authorized to work do not experience delays or denials of employment. We have almost 20 years of experience with employer sanctions and nearly a decade of experience with the Basic Pilot Program that you mentioned, and in 2002, the Department of Justice conducted a study of the Basic Pilot and found that a sizable number of workers who were found by the program not to be work authorized actually were work authorized, about 4 percent of the verifications. If you multiply that times 54 million or so new hires every year, a 4-percent error rate means about 2 million American workers every year could face denials or delay in employment as a result of Government errors. That is an unacceptable level, and it needs to be addressed, and building in mechanisms to address it is essential to moving forward on this issue. For those people who the system said were not authorized to work when, in fact, they were, and they or employers attempted to address that with the immigration authorities or SSA, 39 percent of employers reported that SSA never or only sometimes returned their calls promptly, and 43 percent reported a similar experience with the INS, the precursor to DHS. The evaluators also discovered that employers engaged in prohibited practices. Forty-five percent of employees surveyed who contested the information coming out of the system were subject to pay cuts, delays in job training, and other restrictions on working, and a full 73 percent of employees who should have been informed of work authorization problems in the system were not. Those numbers should really give us pause. That is something that we need to fix as we move forward because the impact on the American work force would be substantial. The evaluators also found enormous problems with employers not complying with the terms of memoranda of understanding that they themselves had signed when they began to participate in the Basic Pilot. That includes pre-employment screening, which employers are not supposed to do, which essentially could deny workers the ability to even find out that there is a data problem with their own data in the system and, therefore, address the system. It means they lose access to the job, but that they are likely to run into a problem the next time they apply for a job without an opportunity to address the mistake in the data base. These are things employers agreed not to do and ended up doing anyway as they participated in the Basic Pilot. We were pleased to see the amendment by Senators Grassley, Kennedy, Obama, and Baucus on S. 2611. We think it improves substantially the original Senate language. And the most critical protections that are now in the bill which passed the Senate include language protecting against discrimination, due process protections, and key language protecting privacy. We believe all of that needs to be maintained and strengthened as we move forward because of these problems that I just outlined. I want to highlight two particular concerns: Default confirmation. My colleague, Mr. Verdery, also mentioned this as well. It is incredibly important in the case that the Government data bases are unable to reach a final decision within the 30-day timeframe. And administrative and judicial review. When there are problems in the data for people where the names and the Social Security data base do not match up, for example, a lot of people in my community have multiple first names, multiple last names. I am one of those. The name on my Social Security record is different from the name that is on my W-2, and that is a very common issue. That could lead to employment problems. If that, in fact, leads to denial and delay of employment, I would hope that somebody like me would have the ability to address that expeditiously, certainly before I lost wages, the ability to support my family. We would also ask, just briefly, as we move forward with this legislative process, that we talk about a phase-in, again described by my colleague, Mr. Verdery, measures to ensure the accuracy of the data and to improve expeditiously the accuracy of the data before we subject the entire work force to verification under this system. Changes and greater efficiency in the issuance of immigration documentation. Immigrants workers, in particular, who are authorized to work should have an employment authorization document, but we know that thousands of them experience delays in renewing those documents. We have examples from all around the country of people experiencing delays in getting driver's licenses, delays in employment, because even though they are, in fact, authorized to work but because the authorities have not gotten their documents or their renewals on time. That affects people's ability to feed their families. It is something that we should address. Enforcement of labor laws ultimately is critical to the success of the overall effort and sufficient resources for the agencies to clean up their data and implement this swiftly and efficiently are essential. So, in conclusion, Mr. Chairman, we recognize that worksite verification is an essential element of the immigration debate, and we are prepared to play a constructive role in making sure that the policy is effective. But it would be morally and substantively disastrous to put a system in place without addressing serious flaws which have been identified by 10 years of experience with the Basic Pilot and 20 years of experience with employer sanctions. We believe there is ample evidence of what we need to do. We believe that we have the capacity to do it, and we would urge you to look at those issues as we move this forward. Thank you. [The prepared statement of Ms. Munoz appears as a submission for the record.] Chairman Cornyn. Thank you, Ms. Munoz. Ms. Dodd-Major. STATEMENT OF LINDA DODD-MAJOR, FORMER DIRECTOR OF OFFICE OF BUSINESS LIAISON, IMMIGRATION AND NATURALIZATION SERVICE, WASHINGTON, D.C. Ms. Dodd-Major. Good afternoon, Senators. Thank you for the opportunity to address these issues today. I also look forward to doing that. I also consider it extremely important. I do not disagree with-- Chairman Cornyn. Would you double-check to make sure your microphone is on? Ms. Dodd-Major. Okay. Now the light is on. Chairman Cornyn. Thank you very much. Ms. Dodd-Major. I do not disagree with what my colleagues on both panels have said. However, I probably of all of the panelists have more hands-on experience with the I-9 process. Not only did I direct and run the Office of Business Liaison, but I spent many years almost embedded, as we know it today, into many worksite operations, into audits, into raids, just as the media representatives do in the Middle East now. I did that so that I could better explain to employers who wanted to comply what the law expected of them, what the consequences could be so that they could be more likely to--so they could be persuaded toward voluntary compliance. I also was in charge of the I-9 regulation at INS for years. I also was the chairperson of the interagency task force on birth certificate standardization. So in terms of all these documents, in terms of the process, I have a lot of experience. I also have a different perspective. First of all, with respect to the new enforcement priorities, most employers are not engaged in criminal activity. Furthermore, most undocumented workers are not working for criminal employers. In fact, not only are most employers not engaged in criminal activity, they are furious that the difficulties they have had with the I-9 process have not resulted in any enforcement that is meaningful to them. Those who try to get assistance do not get it. Those who call up to try to get removals of undocumented aliens do not get responses. And they feel that all of their efforts--and I am talking now of the huge percentage of compliance-minded employers. They feel that their efforts have been useless. They feel--and I think it is a justified position for them to take-- that they have been victims in this process. Yes, they are often portrayed in the media and elsewhere as being addicted to low-cost labor. They will do anything for cheap labor. That is not true for most employers. In the private sector, I represent three Fortune 100 level companies that are in industries that have historically attracted undocumented workers. They have tried their absolute best to keep undocumented workers out of the workplace. Two of them participate in the Basic Pilot at all of their worksites. Even that, for reasons that I will discuss, has not worked for them. Furthermore, to say that the penalties included in IRCA were not deterrents to undocumented employment is an understatement. The worst consequences of worksite enforcement were not penalties. They were not money damages. They were the business consequences of--now, they do not do this anymore, but what they were doing in the late 1990's were raids on the work force. They were doing it at an Indian restaurant in Houston. They were doing it at a Denny's-type restaurant in Scottsdale. All of these I participated in. I did not participate as a law enforcement officer, but I saw what happened firsthand. They were doing it in food-processing plants, in meat-packing plants. And if you think when they did those raids that all of those undocumented workers and certain legal workers who had fear of the immigration system exited calmly from those workplaces, you are wrong. Every exit and entry was jammed with people trying to leave. There were raw materials ruined. And those employers faced sometimes months and expenses of maybe $1,500 to $2,500 apiece trying to replace those workers, all under circumstances where their Forms I-9 were absolutely flawless. In other words, the system did not work for them. And yet when they called for assistance--now, in the early 1990's, employers used to be able to call on local INS offices who would help them verify name and number matches for a number. After Salinas v. Pena--that was a lawsuit in the early 1990's-- there was a consent agreement after which Deputy Commissioner of INS Chris Sale prohibited all--and there were reasons for this. I am not saying there were not--any investigations offices from providing that type of assistance to employers. After that, they basically had nothing. Not only that, but contemporaneously came out certain GAO reports regarding discrimination that had resulted admittedly from overzealous following of the I-9 requirement and what has come to be known as ``document abuse.'' I think that there is far less evidence that that kind of thing is going on today than there was then. Nevertheless, the resources that had been dedicated to employer outreach were transferred more or less to antidiscrimination, with the result that the message that employers got was thou shalt not discriminate outside of the context of the regular I-9 compliance. They were told accept any document that might be genuine and might belong to that person, or you may face a lawsuit for discrimination. Some other issues that I want to highlight--they are fleshed out in more detail in my written statement--are some other parts of the process that are largely overlooked. First, there is an employee attestation section in the Form I-9. It is Section 1. It is there where the employee states under penalty of law, signed under penalty of perjury, ``I am an authorized worker.'' This is unfortunately--or maybe fortunately, I do not know. It depends on your perspective. The I-9 is seen as a document-driven and a number-driven process. There is a process during which and at which point employees themselves, with their personal signatures, have to attest to their current work authorization. That part of the process has been almost completely overlooked. When you do audits of I-9s, you often see that part not completed, and there has been very little followup and enforcement against individuals who have provided, intentionally provided false data, for whatever personal reasons they have, that have gotten them into the work force and have not seen the consequences. Employers who have experienced consequences themselves try to get enforcement to come in and pick up people and have seen those people just move on to their competitors have a very, very difficult time with this process. There is another thing that is not addressed in the I-9 rule, and that is self-employment. A person who is an independent contractor does not have to complete an I-9, which has led to a widespread misimpression that if there is not an employer-employee relationship between the individual performing services and the payor for services, that that person can work whatever way he pleases. Now, while those people may not be working for some of these criminal employers where there are worksite enforcement actions under the current enforcement model, they are competing with U.S. workers, and that, after all, was the purpose why IRCA was passed in the first place. Discrimination. There is a lot that we could say here, but I will say that I have never once in any discussion with any employer or any organization ever heard--and we are talking about tens and tens of thousands--ever once heard anyone do anything but want to get more workers. Think about it. If an employer is in a labor shortage area, they do not want to discriminate against workers. As a matter of fact, in some cases they feel the I-9 process hampers them from getting workers that they could otherwise get and who have proven to be very good workers. I do not think discrimination--there may have been disproportionate impact on certain ethnic groups, but that may be more because of the huge volume of those ethnic groups in the workplace than it is a reflection of discrimination. Electronic verification. Chairman Cornyn. Ms. Dodd-Major, could I get you to conclude? Ms. Dodd-Major. Yes, yes. Chairman Cornyn. Unfortunately, we are under a little bit of a time constraint. Ms. Dodd-Major. Okay. This is the end. Electronic verification. The problem with this, as has been pointed out by other panel members is that it has driven fraud or exacerbated the movement of fraud from use of fake documents to use of false documents--fake being counterfeit, false being falsely used. This is a very slippery slope that is not going to be improved unless, as has been pointed out also by several of the Senators, there is a biometric link or there is a tamper-proof document, not just for the alien workers but for U.S. workers as well. Now, whether this is a passport or some other secure document for U.S. workers, such as the dreaded national ID card, I do not know. But without that, the Basic Pilot is going to continue to give false results even if it can be administered on a nationwide basis. Thank you. [The prepared statement of Ms. Dodd-Major appears as a submission for the record.] Chairman Cornyn. Thank you, Ms. Dodd-Major. Your testimony has been enormously helpful so far, and my only regret is that Senator Sessions and I both have to go to an Armed Services meeting and a classified briefing at 4 o'clock, and so we are going to have to cut this a little bit short--shorter than we would otherwise. But we hope you will understand and will also allow us to send you questions in writing that will allow us to followup on some of the excellent testimony you have given us. Let me ask Mr. Verdery--and this also touches on some of the other testimony we have heard here in terms of worksite verification. It seems like there is a proliferation of documents that the Federal Government is mandating, whether it is a REAL ID or the Western Hemisphere Initiative travel documents, where people in South Texas, in order to go across the border and come back, they are going to have to have a passport or some equivalent of that, to, I know, because it is so popular in South Texas, the laser visa that Mexican visitors use under the US-VISIT program, and I know you have helped initiate a biometric identifier. You mentioned a phased-in program. Is it possible for the Federal Government to come up with some means to take current documents that are in place or going to be coming in place soon to use that as some means of verifying eligibility until such time as we can come up with a $9.5 billion appropriation to give everybody a new Social Security card? Mr. Verdery. Well, it is a very difficult question. The problem is, as you mentioned, I am not sure anybody is really looking for the solution. There are four things going on at the same time: the Western Hemisphere requirement for travel back into the country for U.S. citizens and Canadians; the US-VISIT program itself, where they are going to enroll people leaving and going; REAL ID; and then a guest worker program. They all have to work together in some way. I do think that you can have an interim step. The REAL ID would essentially have to suffice for people claiming to be U.S. citizens, and then you would have a foreign worker card, as the President has said, which is essentially already a tamper-resistant, biometrically based visa for foreign workers. The real question is people who are not U.S. citizens but claiming to be, as Senator Kyl was getting at quite a bit, and that is where REAL ID I think can help a bit. Even if the EEVS does not work perfectly, essentially you have to trust in the card, and you have to make sure that works. I do think that the next generation has to be a biometrically based system so you are actually tying the person to the card to a data base. If that is a national ID card system, so be it. But I think that is the only way you essentially can tie the person to the card and the person to a watchlist check and a data base check. Chairman Cornyn. Mr. Stana, until such time as we are able to figure out and to actually solve the identification card issue, do you agree that we could make great strides forward in bringing down the wall between the Social Security Administration and the Department of Homeland Security and other law enforcement officials by allowing some sharing of the no-match list? Mr. Stana. Yes, there is no question that there are opportunities to get valuable data from the Earnings Suspense File, and the IRC Section 6103 limitations could be addressed to enable proper use. Of course, you also have privacy concerns. You do not want another laptop somewhere in suburban Washington with 13 million names on it from the ESF. There have to be appropriate safeguards. But I would also say this: Let's not kid ourselves. Technology is not a panacea here. Without the proper procedures and a sufficient number of resources to followup with employers and employees alike, this whole system that we are proposing could face some real challenges. So you have to have all three. You have to have the technology, you have to have the people, and you have to have the processes that everyone understands and everyone knows how to use. Chairman Cornyn. And, Ms. Munoz, I take it you would agree that one of the best protections we would have to some means to avoid either unintentional or intentional discrimination against lawful workers would be some type of verifiable card that would eliminate discretion on the part of the employer. Ms. Munoz. Well, it is a mixed bag. I think experience tells us it is a mixed bag. On the one hand, you are right that it is possible that having a single document that everybody in the country would have and having some confidence that that document is reliable would have some good impact on some of the discriminatory practices out there. I will tell you that experience in our community also leads to a real fear that it could become a document that a lot of us have to show in a lot of other contexts as well and that only some of us are going to be asked to show in the same way that my former boss, the former president of my organization, who grew up in a border town in Texas, carried a card issued by the Border Patrol as he was growing up so that he could prove that he belonged in his own community. There are some concerns that may be eased by such a document and other concerns that would be raised by such a document, and we need to be mindful of that, if we move in that direction, to make sure that we do not create new forms of discrimination. Chairman Cornyn. Ms. Dodd-Major, perhaps more than anyone else, you have had some real-life experience here, and I just have to ask you: Given the difficulties in both getting Congress to respond in a comprehensive way and in a way that actually works, given the political resistance of some in the employer community about sanctions or other ways to actually enforce the worksite verification requirement, and just given the difficulties of making all these moving pieces come together in some smoothly running, efficient machine, are you optimistic or are you pessimistic about Congress' ability to actually learn from its mistakes in the past and actually make the system work? Ms. Dodd-Major. Oh, boy, that is a hard question. Chairman Cornyn. I knew you were up to it. Ms. Dodd-Major. I think that the pressures from the competing sides are so difficult and in a political year the advantages are so likely to cancel one another out politically that the incentive to move this forward as a matter of public policy is--and there are different stakeholders here. There are employers. There is the general public. There are all those aliens who have never had opportunities here before. And I am not confident that all of those things can be brought together to pass legislation now. Chairman Cornyn. Well, you may be right. I hope you are not. I remain optimistic. And one thing, depending on your point of view, whether you are optimistic or less than optimistic about our chances, from my perspective doing nothing is not an option. And this is the responsibility that our constituents have sent us up here to undertake to try to solve difficult problems. And I recognize as much as anyone the upcoming elections, but there are always going to be elections in the future for those who hold office or those who aspire to public office. And I just believe that this is absolutely critical for us to deal with. We can go back to our voters and explain to them why we voted the way we did and why we did what we did. And if we do not have a good explanation, then they know what to do with that. If we do, then I think those who try to do their best and come up with a realistic solution will be rewarded accordingly. Unfortunately, due to the time constraint of this conflicting hearing, Armed Services hearing, we are going to have to conclude there, but please rest assured that your written testimony and your oral summary has been enormously helpful, and we are not going to let you off the hook. We are going to stay in touch with you and ask you more questions and ask you to contribute further in this effort. Thank you so much. We will leave the record open until 5 p.m. on Monday, June 26th, for members to submit additional documents to the record or ask additional questions in writing of the panelists. This hearing is adjourned. 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