December 18, 2006

How Uncle Sam Assists Identity Thieves

Immigration and Customs Enforcement (ICE) agents on December 12 arrested 1,282 Swift & Co. meatpacking plant employees in six states on violations of immigration law and identity theft. The arrests were not only the culmination of an 11-month investigation, but they exposed a flimsy government program that knowingly allows millions of illegal aliens to commit identity theft. It’s called the Basic Pilot program.

Employers who voluntary utilize Basic Pilot simply send the Social Security number provided by a job applicant to the Social Security Administration (SSA). If the Social Security number matches the name in the SSA’s records, the employer can assume that applicant is legal to work in the U.S. However, Basic Pilot does not check the name to see if the person is dead or alive, if the Social Security number has ever been reported stolen or, more importantly, if the number is currently in use by another person. Consequently, illegal aliens seeking employment in the U.S. use millions of stolen or fraudulent Social Security numbers.

A 2002 Temple University study evaluated Basic Pilot’s ability to prevent the hiring of illegal aliens. The study found that approximately 10 percent of Social Security numbers submitted to Basic Pilot were from illegals.  That does not mean that 90 percent of all job applicants are legal to work in the U.S. It means that Basic Pilot caught the 10 percent of aliens not bright enough to purchase or steal credibly fake Social Security cards and other forms of identification.

A separate SSA database, the Earnings Suspense File (ESF), also illustrates the scope of the document fraud problem. When an employer files payroll taxes for an employee, and the employee's name and Social Security number do not match or the number does not exist in Social Security's other records, the unmatched or fraudulent number is recorded in the ESF. And by the way, the SSA keeps the taxes filed.

Though estimates of illegal aliens present in the U.S. range from 12 million to 20 million, as of November 2004 the ESF contained over 246 million records and $420 billion in payroll tax contributions, as reported by Bob Sullivan of MSNBC in 2005. 

Unfortunately, the SSA is currently barred from sharing information in the EFS with the Department of Homeland Security (DHS) because it contains taxpayer records. Congress has constructed a bureaucratic nightmare in an effort, ironically, to protect our privacy. Unfortunately, their efforts have created a nightmare for millions of Americans, who are victims of identify theft because of a sham program masquerading as effective law enforcement and deterrence against hiring illegal aliens.

According to an AP report, DHS Secretary Michael Chertoff said the ICE investigation uncovered a “disturbing front” in the war against illegal immigration. In reality, the massive identity theft and document fraud perpetrated by illegal aliens has been occurring for 20 years, with the full and tacit blessing of our federal government.

The identity theft/illegal aliens connection began in 1986. That year Congress passed the Immigration Reform and Control Act (IRCA), which required workers to show a Social Security card to obtain employment. IRCA also made it illegal to knowingly hire undocumented workers. In 1996, President Bill Clinton signed into law the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA). IIRIRA required the federal government to establish pilot programs employers could voluntary use to verify their job applicants’ employment eligibility. One of those pilot programs is known today as Basic Pilot.

Our federal government’s wink-and-nod policy toward illegal aliens and their employers encourages massive identity theft, document fraud and ruined financial standing for millions of Americans. Solutions to the problem exist, but they require leadership from the president and the political will of Congress.

First, Basic Pilot must check to see if the Social Security number offered by a job applicant is in use by someone else or has been reported stolen. The current program completely misses the use of stolen or fraudulent numbers, actually encouraging further identity theft.

Second, the Basic Pilot program must be mandatory for the sectors of our economy that employ the vast majority of illegal aliens. These include the construction, hospitality, agriculture and domestic service industries. A 2006 General Accounting Office study found that 43 percent of employers that file payroll taxes on stolen or fraudulent Social Security numbers represent just five industries.

Third, Congress must allow DHS access to the ESF files. The ESF files would literally provide DHS the roadmap to employers and workers guilty of breaking labor and immigration laws.

Fourth, Congress must provide employers with more effective tools to identify illegal aliens with fake documents. Most employers want to obey the law, but the laws have to make sense and be effective.

Illegal aliens represent a challenge to our economic security and our national security. Those in Congress, the White House, private organizations and businesses who support the unchecked flow of illegal aliens by default support the massive identity theft and document fraud rampant in our nation.

Identify theft is illegal. There is no middle ground.

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