State Department
Improvements Needed to Strengthen U.S. Passport Fraud Detection Efforts Gao ID: GAO-05-853T June 29, 2005Maintaining the integrity of the U.S. passport is essential to the State Department's efforts to protect U.S. citizens from terrorists, criminals, and others. State issued about 8.8 million passports in 2004. During the same year, State's Bureau of Diplomatic Security arrested about 500 individuals for passport fraud, and about 300 persons were convicted. Passport fraud is often intended to facilitate other crimes, including illegal immigration, drug trafficking, and alien smuggling. GAO examined (1) how passport fraud is committed, (2) what key fraud detection challenges State faces, and (3) what effect new passport examiner performance standards could have on fraud detection.
Using the stolen identities of U.S. citizens is the primary method of those fraudulently applying for U.S. passports. False claims of lost, stolen, or damaged passports and child substitution are among the other tactics used. Fraudulently obtained passports can help criminals conceal their activities and travel with less scrutiny. Concerns exist that they could also be used to help facilitate terrorism. State faces a number of challenges to its passport fraud detection efforts, and these challenges make it more difficult to protect U.S. citizens from terrorists, criminals, and others. Information on U.S. citizens listed in the federal government's consolidated terrorist watch list is not systematically provided to State. Moreover, State does not routinely obtain from the Federal Bureau of Investigation (FBI) the names of other individuals wanted by federal and state law enforcement authorities. We tested the names of 67 federal and state fugitives and found that 37, over half, were not in State's Consular Lookout and Support System (CLASS) database for passports. One of those not included was on the FBI's Ten Most Wanted list. State does not maintain a centralized and up-to-date fraud prevention library, hindering information sharing within State. Fraud prevention staffing reductions and interoffice workload transfers resulted in fewer fraud referrals at some offices, and insufficient training, oversight, and investigative resources also hinder fraud detection efforts. Any effect that new passport examiner performance standards may have on State's fraud detection efforts is unclear because State continues to adjust the standards. State began implementing the new standards in January 2004 to make work processes and performance expectations more uniform nationwide. Passport examiner union representatives expressed concern that new numerical production quotas may require examiners to "shortcut" fraud detection efforts. However, in response to union and examiner concerns, State eased the production standards during 2004 and made a number of other modifications and compromises.
GAO-05-853T, State Department: Improvements Needed to Strengthen U.S. Passport Fraud Detection Efforts
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Testimony:
Before the Committee on Homeland Security and Governmental Affairs,
U.S. Senate:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 9:30 a.m. EDT:
Wednesday, June 29, 2005:
State Department:
Improvements Needed to Strengthen U.S. Passport Fraud Detection
Efforts:
Statement of Jess T. Ford, Director:
International Affairs and Trade:
GAO-05-853T:
GAO Highlights:
Highlights of GAO-05-853T, testimony before the Committee on Homeland
Security and Governmental Affairs, U.S. Senate:
Why GAO Did This Study:
Maintaining the integrity of the U.S. passport is essential to the
State Department‘s efforts to protect U.S. citizens from terrorists,
criminals, and others. State issued about 8.8 million passports in
2004. During the same year, State‘s Bureau of Diplomatic Security
arrested about 500 individuals for passport fraud, and about 300
persons were convicted. Passport fraud is often intended to facilitate
other crimes, including illegal immigration, drug trafficking, and
alien smuggling. GAO examined (1) how passport fraud is committed, (2)
what key fraud detection challenges State faces, and (3) what effect
new passport examiner performance standards could have on fraud
detection.
What GAO Found:
Using the stolen identities of U.S. citizens is the primary method of
those fraudulently applying for U.S. passports. False claims of lost,
stolen, or damaged passports and child substitution are among the other
tactics used. Fraudulently obtained passports can help criminals
conceal their activities and travel with less scrutiny. Concerns exist
that they could also be used to help facilitate terrorism.
State faces a number of challenges to its passport fraud detection
efforts, and these challenges make it more difficult to protect U.S.
citizens from terrorists, criminals, and others. Information on U.S.
citizens listed in the federal government‘s consolidated terrorist
watch list is not systematically provided to State. Moreover, State
does not routinely obtain from the Federal Bureau of Investigation
(FBI) the names of other individuals wanted by federal and state law
enforcement authorities. We tested the names of 67 federal and state
fugitives and found that 37, over half, were not in State‘s Consular
Lookout and Support System (CLASS) database for passports. One of those
not included was on the FBI‘s Ten Most Wanted list. State does not
maintain a centralized and up-to-date fraud prevention library,
hindering information sharing within State. Fraud prevention staffing
reductions and interoffice workload transfers resulted in fewer fraud
referrals at some offices, and insufficient training, oversight, and
investigative resources also hinder fraud detection efforts.
Any effect that new passport examiner performance standards may have on
State‘s fraud detection efforts is unclear because State continues to
adjust the standards. State began implementing the new standards in
January 2004 to make work processes and performance expectations more
uniform nationwide. Passport examiner union representatives expressed
concern that new numerical production quotas may require examiners to
’shortcut“ fraud detection efforts. However, in response to union and
examiner concerns, State eased the production standards during 2004 and
made a number of other modifications and compromises.
Crimes Suspected of 37 Federal and State Fugitives Not in CLASS Who
Were Included in Our Test:
Type of crime: Murder;
Federal fugitives: 5;
State fugitives: 4.
Type of crime: Felonious assault and related acts;
Federal fugitives: 2;
State fugitives: 7.
Type of crime: Child sex offenses;
Federal fugitives: 4;
State fugitives: 1.
Type of crime: Drug trafficking;
Federal fugitives: 3.
Type of crime: Attempted murder;
Federal fugitives: 1;
State fugitives: 1.
Type of crime: Bombings;
Federal fugitives: 1.
Type of crime: Child kidnapping;
State fugitives: 1.
Type of crime: Other crimes;
Federal fugitives: 4;
State fugitives: 3.
Total;
Federal fugitives: 20;
State fugitives: 17.
Sources: State Department and other federal agencies.
[End of table]
What GAO Recommends:
In our report State Department: Improvements Needed to Strengthen U.S.
Passport Fraud Detection Efforts (GAO-05-477, May 20, 2005), we
recommended that the Secretary of State consider ways to improve
interagency information sharing, establish a centralized and up-to-date
fraud prevention library, consider augmenting fraud prevention
staffing, assess the extent to which interoffice workload transfers may
hinder fraud prevention, and strengthen fraud prevention training and
oversight. State generally concurred with our recommendations and
indicated that it has begun taking steps to implement most of them.
www.gao.gov/cgi-bin/getrpt?GAO-05-853T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Jess T. Ford at 202-512-
4128 or fordj@gao.gov.
[End of section]
Madam Chairman and Members of the Committee:
I am pleased to be here today to discuss our report on the State
Department's efforts to strengthen U.S. passport fraud
detection.[Footnote 1]
Maintaining the integrity of the U.S. passport is essential to the
State Department's effort to protect U.S. citizens from terrorists,
criminals, and others. The department issued about 8.8 million
passports in fiscal year 2004. Each year, State passport examiners
refer tens of thousands of applications they suspect may be fraudulent
to their local fraud prevention offices. In fiscal year 2004, State's
Diplomatic Security Service arrested about 500 individuals for passport
fraud and about 300 were convicted. Passport fraud is often intended to
facilitate such crimes as illegal immigration, drug trafficking, and
alien smuggling.
Our report addressed three key issues: (1) how passport fraud is
committed, (2) what key challenges State faces in its fraud-detection
efforts, and (3) what effect new passport examiner performance
standards could have on fraud detection. Today I am going to focus my
discussion on the first two issues, and I will also discuss our
recommendations to State and State's response to them.
For our work on this subject, we reviewed various fraud statistics and
investigative case files maintained by relevant State bureaus and
observed State's fraud detection efforts at 7 of the 16 domestic
passport-issuing offices. We also tested State's use of electronic
databases for fraud detection and interviewed officials in various
State offices and bureaus involved in this issue. We conducted our work
from May 2004 to March 2005 in accordance with generally accepted
government auditing standards.
Summary:
We found that identity theft is the primary tactic used by individuals
fraudulently applying for U.S. passports. Specifically, imposters' use
of other people's legitimate birth and other identification documents
accounted for 69 percent of passport fraud detected in fiscal year
2004, while false claims of lost, stolen, or damaged passports and
other methods accounted for the remaining 31 percent. According to
State's Bureau of Diplomatic Security, passport fraud is often
committed in connection with other crimes, including narcotics
trafficking, organized crime, money laundering, and alien smuggling.
Fraudulently obtained passports help enable criminals to hide their
movements and activities, and concerns exist that fraudulently obtained
passports could also be used to support terrorism. U.S. passports allow
their holders to enter the United States with much less scrutiny than
is given to foreign citizens and also allow visa-free passage into many
countries around the world, providing obvious potential benefits to
terrorists and criminals operating on an international scale.
Our report details a number of challenges to State's passport fraud
detection efforts, including information sharing deficiencies and
insufficient fraud prevention staffing, training, oversight, and
investigative resources. These challenges make it more difficult to
protect U.S. citizens from terrorists, criminals, and others who would
harm the United States. Specifically, State does not currently receive
information on U.S. citizens listed in the Terrorist Screening Center
(TSC) database, which is the federal government's consolidated
terrorist watch list, nor does State routinely obtain from the FBI the
names of individuals wanted by both federal and state law enforcement
authorities. Therefore, many of these individuals are not listed in
State's Consular Lookout and Support System (CLASS) name-check database
for passports,[Footnote 2] and they could obtain passports and travel
internationally without the knowledge of appropriate authorities. We
tested the names of 67 different federal and state fugitives--some
wanted for serious crimes, including murder and rape--and found that
fewer than half were in State's system. One of those not included was
on the FBI's Ten Most Wanted list. Though State, TSC, and the FBI began
exploring options for more routine information sharing on certain
passport-related matters in mid-to late 2004, such arrangements are not
yet in place.
In addition, State does not maintain a centralized electronic fraud
prevention library that enables information sharing on fraud alerts,
lost and stolen birth and naturalization certificates, counterfeit
documents, and other fraud prevention resources. Further, we found that
fraud prevention training is provided unevenly at different passport-
issuing offices, some examiners have not had formal fraud prevention
training in years, and training and oversight of passport acceptance
agent operations are even more sporadic. State does not have any way of
tracking whether many acceptance agent employees are receiving required
training, it makes oversight visits to only a limited number of
acceptance facilities each year, and it does not maintain records of
all of the individuals accepting passport applications at those
facilities, posing a significant fraud vulnerability.
Any effect that new passport examiner performance standards may have on
State's fraud detection efforts is unclear because State continues to
adjust the standards. State began implementing the new standards in
January 2004 to make work processes and performance expectations more
uniform nationwide. Passport examiner union representatives expressed
concern that new numerical production quotas may require examiners to
"shortcut" fraud detection efforts. However, in response to union and
examiner concerns, State eased the production standards during 2004 and
made a number of other modifications and compromises.
We are recommending that State, as it works to improve the coordination
and execution of passport fraud detection efforts, take several actions
to improve and expedite information sharing, specifically by ensuring
that State's CLASS system for passports contains a more comprehensive
list of individuals identified in the Terrorist Screening Center
database as well as state and federal fugitives, and by establishing
and maintaining a centralized electronic fraud prevention library. We
are also recommending that State consider designating additional
positions for fraud prevention coordination and training in some
domestic passport-issuing offices; examine the impact of other workload-
related issues on fraud prevention; and strengthen its fraud prevention
training and acceptance agent oversight programs.
In commenting on a draft of this report, State generally concurred with
our findings and conclusions. State indicated that it has already begun
taking, plans to take, or is considering measures to address most of
our recommendations.
Background:
A U.S. passport is not only a travel document but also an official
verification of the bearer's origin, identity, and nationality. Under
U.S. law, the Secretary of State has the authority to issue passports.
Only U.S. nationals[Footnote 3] may obtain a U.S. passport, and
evidence of citizenship or nationality is required with every passport
application. Federal regulations list those who do not qualify for a
U.S. passport, including those who are subjects of a federal felony
warrant.
State Passport Operations:
The Deputy Assistant Secretary for Passport Services oversees the
Passport Services Office, the largest component of State's Consular
Affairs Bureau. Passport Services consists of three headquarters
offices: Policy Planning and Legal Advisory Services; Field Operations;
and Information Management and Liaison. Also within Consular Affairs is
the Office of Consular Fraud Prevention, which addresses passport,
visa, and other types of consular fraud; the Consular Systems Division,
responsible for the computer systems involved in passport services and
other consular operations; and the Office for American Citizens
Services, which handles most issues relating to passport cases at
overseas posts. The Bureau of Diplomatic Security is responsible for
investigating individual cases of suspected passport and visa fraud.
The State Department Office of the Inspector General (OIG) also has
some authority to investigate passport fraud.
State operates 16 domestic passport-issuing offices, which employ
approximately 480 passport examiners who approve and issue most U.S.
passports that are printed each year. The number of passports issued by
domestic passport offices has risen steadily in recent years,
increasing from about 7.3 million in fiscal year 2000 to 8.8 million in
fiscal year 2004. Overseas posts deal with a much lower volume of
passports by comparison, handling about 300,000 worldwide in fiscal
year 2004.
Passport Application and Approval Process:
The majority of passport applications are submitted by mail or in-
person at one of almost 7,000 passport application acceptance
facilities nationwide.[Footnote 4] The passport acceptance agents at
these facilities are responsible for, among other things, verifying
whether an applicant's identification document (such as a driver's
license) actually matches the applicant. Then, through a process called
adjudication, passport examiners determine whether they should issue
each applicant a passport. Adjudication requires the examiner to
scrutinize identification and citizenship documents presented by
applicants to verify their identity and U.S. citizenship. The passport
adjudication process is facilitated by computer systems, including the
Travel Document Issuance System, which appears on passport examiners'
screens when the adjudication begins and automatically checks the
applicant's name against several databases. Figure 1 identifies the key
computer databases available to help examiners adjudicate passport
applications and detect potential fraud.
Figure 1: Electronic Databases Available to Passport Examiners:
[See PDF for image]
[End of figure]
In addition, examiners scrutinize paper documents and other relevant
information during the fraud detection process, watch for suspicious
behavior and travel plans, and request additional identification when
they feel the documents presented are insufficient. When examiners
detect potentially fraudulent passport applications, they send the
applications to their local fraud prevention office for review and
potential referral to State's Bureau of Diplomatic Security for further
investigation.
Identity Theft a Primary Means of Committing Fraud:
State's Bureau of Diplomatic Security investigators stated that
imposters' use of assumed identities, supported by genuine but
fraudulently obtained identification documents, was a common and
successful way to fraudulently obtain a U.S. passport. This method
accounted for 69 percent of passport fraud detected in fiscal year
2004. Investigators found numerous examples of aliens and U.S. citizens
obtaining U.S. passports using a false identity or the documentation of
others to hide their true identity. In one example, in 1997, a
naturalized U.S. citizen born in Cuba stole a Lear jet and transported
it to Nicaragua. At the time of his arrest in 2003, he was using an
assumed identity and possessed both false and legitimate but
fraudulently obtained identification documents, including a U.S.
passport in the name he used while posing as a certified pilot and
illegally providing flight instruction. Seized at his residence when he
was arrested were two Social Security cards, four driver's licenses,
three Puerto Rican birth certificates, one U.S. passport, one pilot
identification card, numerous credit cards and checking account cards,
and items used to make fraudulent documents. In October 2004, he pled
guilty to knowingly possessing five or more "authentication devices"
and false identification documents, for which he was sentenced to 8
months confinement. In another case, a man wanted for murdering his
wife obtained a Colorado driver's license and a passport using a
friend's Social Security number and date and place of birth. Three and
four years later he obtained renewal and replacement passports,
respectively, in the same assumed identity. He was later arrested and
pled guilty to making a false statement in an application for a
passport. He was sentenced to about 7 months time served and returned
to California to stand trial for murdering his wife.
Applicants commit passport fraud through other means, including
submitting false claims of lost, stolen, or mutilated passports; child
substitution; and counterfeit citizenship documents. Some fraudulently
obtain new passports by claiming to have lost their passport or had it
stolen or damaged. For example, one individual who used another
person's Social Security number and Ohio driver's license to report a
lost passport obtained a replacement passport through the one-day
expedited service. This fraudulently obtained passport was used to
obtain entry into the United States 14 times in less than three years.
Diplomatic Security officials told us that another means of passport
fraud is when individuals obtain replacement passports by using expired
passports containing photographs of individuals they closely resemble.
This method of fraud is more easily and commonly committed with
children, with false applications based on photographs of children who
look similar to the child applicant.[Footnote 5] Assuming the identity
of a deceased person is another means of fraudulently applying for a
passport.
Passports Used to Commit Other Crimes:
According to State Bureau of Diplomatic Security documents, passport
fraud is often commited in connection with other crimes, including
narcotics trafficking, organized crime, money laundering, and alien
smuggling. According to Diplomatic Security officials, concerns exist
within the law enforcement and intelligence communities that passport
fraud could also be used to help facilitate acts of terrorism. Using a
passport with a false identity helps enable criminals to conceal their
movements and activities, and U.S. passports provide their holders free
passage into our country with much less scrutiny than is given to
foreign citizens. U.S. passports also allow visa-free passage into many
countries around the world, providing obvious benefits to criminals
operating on an international scale. According to State officials, the
most common crime associated with passport fraud is illegal
immigration. For example, one woman was recently convicted for
organizing and leading a large-scale passport fraud ring that involved
recruiting American women to sell their children's identities, so that
foreign nationals could fraudulently obtain passports and enter the
United States illegally. According to the Department of State, the
woman targeted drug-dependent women and their children, paying them
about $300 for each identity and then using the identities to apply for
passports. The woman then sold the fraudulently obtained passports to
illegal aliens for as much as $6,000 each.
State Faces Challenges to Fraud Detection Efforts:
One of the key challenges to State's fraud detection efforts is limited
interagency information sharing. Specifically, State currently lacks
access to the Terrorist Screening Center's consolidated terrorist watch
list database, which was created in 2003 to improve information sharing
among government agencies. By consolidating terrorist watch lists, TSC
is intended to enable federal agencies to access critical information
quickly when a suspected terrorist is encountered or stopped within the
United States, at the country's borders, or at embassies overseas.
However, because State's CLASS name-check database does not contain the
TSC information, U.S. citizens with possible ties to terrorism could
potentially obtain passports and travel internationally without the
knowledge of appropriate authorities.
Although TSC has been operational since December 2003, State and TSC
did not begin exploring the possibility of uploading data from the TSC
database into passport CLASS until December 2004. State and TSC have
not reached an agreement about information-sharing, though State sent
an official proposal to TSC in January 2005. A TSC official told us
that she does not foresee any technical limitations, and added that TSC
agrees that it is important to work out an agreement with State. We
recommended that State and other parties expedite such arrangements,
and State said that it and the TSC are actively working to do so.
CLASS Does Not Include Names of All Wanted Federal and State Fugitives:
Because the FBI and other law enforcement agencies do not currently
provide State with the names of all individuals wanted by federal law
enforcement authorities, State's CLASS name-check system does not
contain the names of many federal fugitives, some wanted for murder and
other violent crimes; these fugitives could therefore obtain passports
and potentially flee the country. The subjects of federal felony arrest
warrants are not entitled to a U.S. passport. According to FBI
officials, FBI databases contain the names of approximately 37,000
individuals wanted on federal charges. State Department officials
acknowledge that many of these individuals are not listed in CLASS. We
tested the names of 43 different federal fugitives and found that just
23 were in CLASS; therefore, passport examiners would not be alerted
about the individuals' wanted status if any of the other 20 not in
CLASS applied for a passport. In fact, one of these 20 did obtain an
updated U.S. passport 17 months after the FBI had listed the individual
in its database as wanted. A number of the 20 federal fugitives who
were included in our test and were found not to be in CLASS were
suspected of serious crimes, including murder. One was on the FBI's Ten
Most Wanted list. Table 1 lists the crimes suspected of the federal
fugitives in our test.
Table 1: Crimes Suspected of 20 Federal Fugitives Not in CLASS Who Were
Included in Our Test:
Type of crime: Murder;
Number of fugitives: 5.
Type of crime: Felonious assault and related crimes;
Number of fugitives: 2.
Type of crime: Child sex offenses;
Number of fugitives: 4.
Type of crime: Drug trafficking;
Number of fugitives: 3.
Type of crime: Attempted murder;
Number of fugitives: 1.
Type of crime: Bombings;
Number of fugitives: 1.
Type of crime: Other crimes;
Number of fugitives: 4.
Sources: Various law enforcement agency databases and Web sites and the
State Department's CLASS name-check system.
[End of table]
State officials told us that they had not initiated efforts to improve
information sharing with the FBI on passport-related matters until the
summer of 2004 because they had previously been under the impression
that the U.S. Marshals Service was already sending to CLASS the names
of all fugitives wanted by federal law enforcement authorities. State
officials were not aware that the information in the U.S. Marshal's
database was not as comprehensive as that contained in the FBI-operated
National Crime Information Center database. State officials became
aware of this situation when the union representing passport examiners
brought to their attention that a number of individuals on the FBI's
Ten Most Wanted list were not in CLASS. In the summer of 2004, the FBI
agreed to State's request to provide the names from the FBI's Ten Most
Wanted list. As part of these discussions, State and the FBI explored
other information-sharing opportunities as well, and FBI headquarters
officials sent a message instructing agents in its field offices how to
provide names of U.S. citizens who are FBI fugitives to State on a case-
by-case basis.
Additionally, State began discussions with the FBI about receiving
information on individuals with FBI warrants on a more routine and
comprehensive basis. According to FBI officials, State requested that
the FBI provide only the names of FBI fugitives and not those of
individuals wanted by other federal law enforcement entities. However,
the FBI is the only law enforcement agency that systematically compiles
comprehensive information on individuals wanted by all federal law
enforcement agencies, and, according to FBI officials, it is the
logical agency to provide such comprehensive information to State. We
recommended that State expedite arrangements to enhance interagency
information sharing with the FBI to ensure that the CLASS system
contains a more comprehensive list of federal fugitives. According to
State, it sent a written request on this issue to the FBI in April
2005. State also noted that it had reached agreement in principal with
the FBI on information sharing efforts related to FBI fugitives.
In addition to its role in compiling information on federal fugitives,
the FBI is also the only law enforcement agency that compiles
comprehensive information on individuals wanted by state and local
authorities. According to FBI officials, FBI databases contain the
names of approximately 1.2 million individuals wanted on state and
local charges nationwide. FBI officials told us that some of the most
serious crimes committed often involve only state and local charges. We
tested the names of 24 different state fugitives and found that just 7
were in CLASS; therefore, the CLASS system would not flag any of the
other 17, were they to apply for a passport.[Footnote 6] Table 2 lists
the crimes suspected of the 17 tested state fugitives not in CLASS who
were included in our test.
Table 2: Crimes Suspected of 17 State Fugitives Not in CLASS Who Were
Included in Our Test:
Type of crime: Murder;
Number of fugitives: 4.
Type of crime: Felonious assault and related crimes;
Number of fugitives: 7.
Type of crime: Child sex offenses;
Number of fugitives: 1.
Type of crime: Attempted murder;
Number of fugitives: 1.
Type of crime: Child kidnapping;
Number of fugitives: 1.
Type of crime: Other crimes;
Number of fugitives: 3.
Sources: Various law enforcement agency databases and Web sites and the
State Department's CLASS name-check system.
[End of table]
During our review, State Department officials told us that having a
comprehensive list of names that included both federal and state
fugitives could "clog" State's CLASS system and slow the passport
adjudication process. They also expressed concern that the course of
action required of State would not always be clear for cases involving
passport applicants wanted on state charges. We recommended that State
work with the FBI to ensure that the CLASS system contains a more
comprehensive list of state fugitives. In commenting on a draft of our
report, State said that it now intends to work with the FBI and U.S.
Marshals Service to establish an automated mechanism for integrating
information on state warrants into CLASS.
Limited Intra-agency Information Sharing May Be Affecting Fraud
Detection:
State does not maintain a centralized and up-to-date electronic fraud
prevention library, which would enable passport-issuing office
personnel to efficiently share fraud prevention information and tools.
As a result, fraud prevention information is provided inconsistently to
examiners among the 16 domestic offices. For example, at some offices,
examiners maintain individual sets of fraud prevention materials. Some
print out individual fraud alerts and other related documents and file
them in binders. Others archive individual e-mails and other documents
electronically. Some examiners told us that the sheer volume of fraud-
related materials they receive makes it impossible to maintain and use
these resources in an organized and systematic way.
Other information sharing tools have not been effectively maintained.
Consular Affairs' Office of Consular Fraud Prevention maintains a Web
site and "e-room" with some information on fraud alerts, lost and
stolen state birth documents, and other resources related to fraud
detection, though fraud prevention officials told us the Web site is
not kept up to date, is poorly organized, and is difficult to navigate.
We directly observed information available on this Web site during
separate visits to State's passport-issuing offices and noted that some
of the material was outdated by as much as more than a year. The
issuing office in Seattle developed its own online fraud library that
included information such as the specific serial numbers of blank birth
certificates that were stolen, false driver's licenses, fraud
prevention training materials, and a host of other fraud prevention
information resources and links. However, this library is no longer
updated. Most of the 16 fraud prevention managers we talked to believed
that the Bureau of Consular Affairs should maintain a centralized
library of this nature for offices nationwide.
We recommended that State establish and maintain a centralized and up-
to-date electronic fraud prevention library that would enable passport
agency personnel at different locations across the United States to
efficiently access and share fraud prevention information and tools.
Commenting on our draft report, State said that it now intends to
design a centralized online passport "knowledgebase" that will include
extensive sections on fraud prevention resources.
Staffing Change Reduced Time Available to Review Fraud Cases:
In January 2004, State eliminated the assistant fraud prevention
manager position that had existed at most of its domestic passport-
issuing offices, and most Fraud Prevention Managers believe that this
action was harmful to their fraud detection program. State eliminated
the position primarily to enable more senior passport examiners to
serve in that role on a rotational basis to gain deeper knowledge of
the subject matter and enhance overall fraud detection efforts when
they returned to adjudicating passport applications. However, managers
at 10 of the 12 offices that previously had permanent assistants told
us that the loss of this position had been harmful to their fraud
detection program. In particular, managers indicated that the loss of
their assistant impacted their own ability to concentrate on fraud
detection by adding to their workload significant additional training,
administrative, and networking responsibilities, while also diverting
from their fraud trend analysis and preparation of reports and case
referrals.
Fraud Prevention Managers and other State officials have linked
declining fraud referrals to the loss of the assistant fraud prevention
manager position. In the 12 offices that previously had permanent
assistants, fraud referral rates from the managers to Diplomatic
Security decreased overall by almost 25 percent from fiscal year 2003
through 2004,[Footnote 7] the period during which the position was
eliminated, and this percentage was much higher in some
offices.[Footnote 8] Without their assistants helping them screen fraud
referrals, check applicant information, and assist with other duties
related to the process, managers said they are making fewer fraud
referrals to Diplomatic Security because they lack the time and do not
believe they can fully rely on new rotational staff to take on these
responsibilities.
We recommended that State consider designating additional positions for
fraud prevention coordination and training in domestic passport-issuing
offices. Passport Services management told us they were not planning to
re-establish the permanent assistant role, but that they are in the
process of filling one to two additional fraud prevention manager
positions at each of the 2 offices with the largest workloads
nationwide. State also plans to establish one additional fraud
prevention manager position at another issuing office with a large
workload. Commenting on our draft report, State said that it would now
also consider rotating GS-12 Adjudication Supervisors through local
fraud prevention offices to relieve Fraud Prevention Managers of some
of their training responsibilities.
Interoffice Transfers of Passport Adjudication Workload Result, in Some
Cases, in Fewer Fraud Referrals Back to Originating Office:
State routinely transfers adjudication cases among the different
offices to balance workloads, and Fraud Prevention Managers at a number
of issuing offices said they had noticed a lower percentage of fraud
referrals returned to them from the 3 offices that were assigned a bulk
of the workload transfers. In fiscal year 2004, 28 percent of passport
applications were transferred to 1 of these 3 offices for adjudication,
while other issuing offices adjudicated 72 percent. Although these 3
offices received 28 percent of the applications, they provided only 11
percent of total fraud referrals to the originating agencies. For
fiscal year 2003, the 3 processing centers adjudicated 26 percent of
the applications but provided only 8 percent of the fraud referrals. In
2004, 1 of the issuing offices transferred out to processing centers 63
percent of its applications (about 287,000) but received back from the
processing centers only 2 percent of the fraud referrals it generated
that year. In 2003, this office transferred out 66 percent of its
workload while receiving back only 8 percent of its total fraud
referrals.
Fraud Prevention Managers and other officials told us that one reason
fewer fraud referrals return from these 3 offices is that passport
examiners handling workload transfers from a number of different
regions are not as familiar with the demographics, neighborhoods, and
other local characteristics of a particular region as are the examiners
who live and work there. For example, some officials noted that, in
instances when they suspect fraud, they might telephone the applicants
to ask for additional information so they can engage in polite
conversation and ask casual questions, such as where they grew up, what
school they attended, and other information. The officials noted that,
due to their familiarity with the area, applicants' answers to such
questions may quickly indicate whether or not their application is
likely to be fraudulent. One examiner in an office that handled
workload transfers from areas with large Spanish-speaking populations
said that the office had an insufficient number of Spanish-speaking
examiners, emphasizing the usefulness of that skill in detecting
dialects, accents, handwriting, and cultural references that conflict
with information provided in passport applications.
We recommended that State assess the extent to which and reasons why
workload transfers from one domestic passport issuing office to another
were, in some cases, associated with fewer fraud referrals and to take
any corrective action that may be necessary. In its official comments
on our draft report, State did not address this recommendation.
State Lacks Established Refresher Training; Such Training Is Provided
Unevenly:
State has not established a core curriculum and ongoing training
requirements for experienced passport examiners, and thus such training
is provided unevenly at different passport-issuing offices. While State
recently developed a standardized training program for new hires that
was first given in August 2004, we reviewed the training programs and
materials at all 7 issuing offices we visited and discussed the
programs and materials at other offices with the remaining nine Fraud
Prevention Managers by telephone and found that the topics covered and
the amount and depth of training varied widely by office. Some had
developed region-specific materials; others relied more heavily on
materials that had been developed by passport officials in Washington,
D.C., and were largely outdated. Some scheduled more regular training
sessions, and others did so more sporadically. Several examiners told
us they had not received any formal, interactive fraud prevention
training in at least 4 years. Some Fraud Prevention Managers hold brief
discussions on specific fraud cases and trends at monthly staff
meetings, and they rely on these discussions to serve as refresher
training. Some Fraud Prevention Managers occasionally invite officials
from other government agencies, such as the Secret Service or DHS, to
share their fraud expertise. However, these meetings take place only
when time is available. For example, officials at one issuing office
said the monthly meetings had not been held for several months because
of high workload; another manager said he rarely has time for any
monthly meetings; and two others said they do not hold such discussions
but e-mail to examiners recent fraud trend alerts and information.
We recommended that State establish a core curriculum and ongoing fraud
prevention training requirements for all passport examiners. State said
that it is implementing a standardized national training program for
new passport examiners but that it is still providing training to
existing passport examiners on a decentralized basis. State officials
told us that they intend to develop a national training program for
experienced examiners, after certain organizational changes are made in
State's headquarters passport operation.
Sporadic Training and Limited Oversight of Acceptance Agents Constitute
Significant Fraud Vulnerability:
Numerous passport-issuing agency officials and Diplomatic Security
investigators told us that the acceptance agent program is a
significant fraud vulnerability. Examples of acceptance agent problems
that were brought to our attention include important information
missing from documentation and identification photos that did not match
the applicant presenting the documentation. Officials at one issuing
office said that their office often sees the same mistakes multiple
times from the same acceptance facility. These officials attributed
problems with applications received through acceptance agents to the
sporadic training provided for and limited oversight of acceptance
agents. State has almost 7,000 passport acceptance agency offices, and
none of the 16 issuing offices provide comprehensive annual training or
oversight to all acceptance agency offices in their area. Instead, the
issuing offices concentrate their training and oversight visits on
agency offices geographically nearest to the issuing offices, or in
large population centers, or where examiners and Fraud Prevention
Managers had reported problems, or in high fraud areas. Larger issuing
offices in particular have trouble reaching acceptance agency staff. At
one larger issuing office with about 1,700 acceptance facilities, the
Fraud Prevention Manager said he does not have time to provide
acceptance agent training and that it is difficult for issuing office
staff to visit many agencies. A manager at another large issuing office
that covers an area including 11 states said she does not have time to
visit some agencies in less populated areas.
While State officials told us all acceptance agency staff must be U.S.
citizens, issuing agency officials told us they have no way of
verifying that all of them are. Management officials at one passport-
issuing office told us that, while their region included more than
1,000 acceptance facilities, the office did not maintain records of the
names of individuals accepting passport applications at those
facilities.
We recommended that State strengthen its fraud prevention training
efforts and oversight of passport acceptance agents. In commenting on a
draft of our report, State said that it is adapting and expanding
computer-based training for U.S. Postal Service acceptance facilities
for more widespread use among acceptance agents nationwide. State also
indicated that it would institute a nationwide quality review program
for its acceptance facilities. However, State officials recently told
us that the quality reviews would focus only on new acceptance
facilities and existing facilities with reported problems. It is
unclear whether State will perform quality reviews for the rest of its
nearly 7,000 facilities.
Overstretched Investigative Resources Hinder Fraud Detection:
Although State's Bureau of Diplomatic Security has provided additional
resources for investigating passport fraud in recent years, its agents
must still divide their time among a number of competing demands, some
of which are considered a higher priority than investigating passport
fraud. A Diplomatic Security official told us that, after the September
11th terrorist attacks, the bureau hired about 300 additional agents,
at least partially to reduce investigative backlogs.[Footnote 9]
Diplomatic Security and passport officials told us that, while the
increased staff resources had helped reduce backlogs to some degree,
agents assigned to passport fraud investigations are still routinely
pulled away for other assignments. At most of the offices we visited,
few of the agents responsible for investigating passport fraud were
actually there. At one office, all of the agents responsible for
investigating passport fraud were on temporary duty elsewhere, and the
one agent covering the office in their absence had left his assignment
at the local Joint Terrorism Task Force to do so. Agents at one office
said that five of the eight agents involved in passport fraud
investigations there were being sent for temporary duty in Iraq, as
were many of their colleagues at other offices.
Agents at all but 2 of the 7 bureau field offices we visited said they
are unable to devote adequate time and continuity to investigating
passport fraud. We noted that the number of new passport fraud
investigations had declined by more than 25 percent over the last five
years, though Diplomatic Security officials attributed this trend,
among other factors, to refined targeting of cases that merit
investigation. The Special-Agent-in-Charge of a large Diplomatic
Security field office in a high fraud region expressed serious concern
that, in 2002, the Bureau of Diplomatic Security began requiring, to
reduce backlog of old cases, that most cases be closed after 12 months,
whether or not the investigations were complete. The agent said that
about 400 incomplete cases at his office were closed. A Diplomatic
Security official in Washington, D.C., told us that, while field
offices had been encouraged to close old cases that were not likely to
be resolved, there had not been a formal requirement to do so. State
officials agreed that Diplomatic Security agents are not able to devote
adequate attention to investigating passport fraud, and told us that
the Bureau of Diplomatic Security plans to hire 56 new investigative
agents over the next few years. According to State officials, these new
investigators will be solely dedicated to investigating passport and
visa fraud and will not be pulled away for other duty.
Effect of New Examiner Performance Standards on Fraud Detection Remains
Unclear:
Although State's approach to developing new nationwide passport
examiner production standards, implemented in January 2004, raises
methodological concerns, subsequent changes to the standards make an
assessment of their impact on fraud detection premature. State
developed new nationwide passport examiner production standards in an
effort to make performance expectations and work processes more uniform
among its 16 issuing offices. However, State tested examiner production
before standardizing the passport examination process; differences in
work processes across offices at the time of the test limited the
validity of the test results. State then used the results in
conjunction with old standards to set new nationwide standards. The new
standards put additional emphasis on achieving quantitative targets.
Responding to concerns about their fairness due to changes that may
have slowed the examination process, as well concerns that the new
standards led examiners to take "shortcuts" in the examination process
to meet their number targets, State made a number of modifications to
the production standards during the year. The various modifications
have made it unclear what impact the standards have had on passport
fraud detection.
Madam Chairman, this completes my prepared statement. I would be happy
to respond to any questions you or other Members of the Committee may
have at this time.
Contacts and Acknowledgments:
If you or your staff have any questions about this testimony, please
contact Jess Ford at (202) 512-4128 or fordj@gao.gov, or Michael Courts
at (202) 512-8980 or courtsm@gao.gov.
Individuals making key contributions to this testimony included Jeffrey
Baldwin-Bott, Joseph Carney, Paul Desaulniers, Edward Kennedy, and Mary
Moutsos.
FOOTNOTES
[1] U.S. Government Accountability Office, State Department:
Improvements Needed to Strengthen U.S. Passport Fraud Detection
Efforts, GAO-05-477, (Washington, D.C.: May 20, 2005)
[2] State maintains a separate CLASS database for visas. References to
CLASS throughout this testimony relate to the CLASS database for
passports only.
[3] National means a citizen of the United States or a noncitizen owing
permanent allegiance to the United States.
[4] Number is as of March 2005. State officials noted that this number
changes frequently as new acceptance facilities are added and others
are dropped.
[5] In an effort to address this problem, State established a new
requirement in February 2004 that children aged 14 and under appear
with their parents when applying for a passport to allow comparison of
the children to the photographs being submitted.
[6] We also noted that 10 of the 20 tested federal fugitives that were
not in CLASS were also wanted on state charges. Thus, if State
fugitives had been listed in CLASS, these individuals would have been
flagged, even if information on their federal warrants had been missed.
[7] In the 4 offices that did not previously have permanent assistants,
fraud referral rates decreased on average by only 7 percent during the
same period.
[8] Two offices that had assistant fraud prevention managers in 2003
saw increases in their fraud referral rates. These 2 offices received
just over 8 percent of the total applications received by offices that
had assistants.
[9] State officials also noted that the Bureau of Consular Affairs
funds more than 120 Diplomatic Security agent positions nationwide to
help support efforts to investigate passport fraud.
