On the illegal immigration front, there are two things that you, the small business owner, need to understand. The first is that even if you live in a state that mandates the use of the federal E-Verify program to check job applicants’ immigration status, and you use it religiously and without fail, it won’t save your company from being raided by Immigration and Customs Enforcement (ICE). The reason for this is the second thing you need to understand about the centerpiece of US immigration enforcement: E-Verify doesn’t detect identity theft, a fact that has led to an explosion of—you guessed it—identity theft among illegal aliens.

E-Verify: This is Not a New Problem

The problem of ID Theft as a way to get around the E-Verify system was known to federal authorities as early as December of 2006, when the Swift Company had several of their meat packing plants raided and 1,200 illegals were rounded up on both immigration and identity theft charges. Last month, 595 employees of Howard Industries, a manufacturer of electrical parts in Mississippi were rounded up on the same charges. Both companies were fully compliant in using E-Verify. In fact, Mississippi mandates that all employers use the system. In between these two mass raids, evidence mounted showing that identity theft is on the rise and that it is rendering the e-Verify system useless. It can, in fact, be worse than useless insofar as it also occasionally mistakes legitimate citizens for illegal aliens.

Mixed Marks for E-Verify
Aside from the obvious connection to identity theft, criticism of the E-Verify centers on the system’s reliance on the Social Security database, which has a 4.1% error rate. This means that the system could mistakenly declare millions of people ineligible for employment. “Republicans, Democrats, liberals, conservatives, people that are pro-immigration, people that are tough on enforcement all have said very clearly that E-Verify doesn’t work,” says Mike Aitken, SHRM director of governmental affairs.

Still, the system, which the House of Representatives just extended for another five years, has ardent defenders, such as Homeland Security Secretary Michael Chertoff, who said in a statement that “A large part of our success in enforcing the nation’s immigration laws hinges on equipping employers with the tools to determine quickly and effectively if a worker is legal or illegal. E-Verify is a proven tool that helps employers immediately verify the legal working status for all new hires.” Right now, the system is voluntary, unless you are a federal contractor. If you are, then you must use the system. You also have to use it if your state is one of those that mandated its use for all employers.

The Proven Tool Proves What?

Call me a cynic, but it strikes me as odd that such a “proven tool” to stem the tide of illegal aliens could allow so many illegal aliens to operate as freely as they do. Maybe I am not getting the point, but I would have an easier time believing Chertoff’s description of E-Verify if Swift had 12 illegal alien ID thieves on their payroll rather than 1,200; or that the take at Howard’s was 6 instead of 595. If we are seeing raids of this size at firms that use E-Verify, how many others are escaping the federal nets? Jim Harper, with the Cato Institute weighed in on the question:

Faced with the alternative of living in poverty and failing to remit wealth to their families, illegal immigrants would deepen the modest identity frauds they are involved in today. Their actions would draw American citizens, unfortunately, into a federal bureaucratic identity vortex.

In other words, E-Verify encourages identity theft and it will only get worse as the system is mandated in more places. In March of this year, the Minnesota Office of the Legislative Auditor had this to say about the program:

According to several recent federal reports, the E-Verify program is susceptible to employer misuse and system inaccuracies. For instance, employers may enter the same identity information to authorize multiple workers. The E-Verify program also cannot control for identity fraud, such as when employees present borrowed or stolen genuine identity documents. Moreover, the E-Verify program often returns inaccurate results; a 2002 DHS study of a sample of E-Verify queries found that 42 percent of employees deemed ineligible by E-Verify were actually eligible for employment.

Although currently available at no charge to employers, the E-Verify program is potentially costly to employers and employees. Specifically, some employers limit the work assignments or pay of employees who are waiting for verification, and delays are expected to increase as more employers use E-Verify. In addition, employers that do not terminate employees deemed ineligible to work by E-Verify must pay $11,000 in fines; a fee that is expected to increase as DHS expands the program.

Hardly a ringing endorsement: A 42% error rate and no way to deal with the identity theft it encourages. I think the “proven tool” is really proving that it’s a band-aid measure at best while the Congress engages in its usual ideological grandstanding and whining. It’s like an energy policy, or a crime policy—they know they have to do something, but they have neither the brains nor the courage to stop squabbling long enough to do what is necessary. In the end, they slap something together that will usually cause more harm than good, and hype it up and Bang! You have E-Verify, protecting the American Workplace from illegal immigrants too dumb to fake their identity and from real Americans unfortunate enough to have their Social Security records screwed up.

The Bottom Line

If this is all E-Verify has proven, that it exposes unwitting employers to legal sanction because it can’t do the job in the face of the rampant identity theft that the law itself encourages and the pernicious clerical mistakes within the federal bureaucracy, then it has also proven that instead of extending this boondoggle, it is time to scrap it and start over.

One an alternative is the New Employee Verification Act (NEVA), which was written by Rep. Sam Johnson, R-Texas. NEVA, which is cosponsored by both Republicans and Democrats, eliminates the current I-9 process in favor of having companies submit their new-hire information to the Social Security Administration through a child-support enforcement system that about 90% of U.S. employers already use. Furthermore, the measure includes an appropriation to clean up the Social Security database before the verification system goes into effect and provides safe harbor for employers that use the system, something not available under the current E-Verify system. NEVA also reduces the number of acceptable identification documents for new hires down to four and it offers more protection for Social Security numbers.

Representative Gabrielle Giffords, D-Arizona, a co-sponsor of the Johnson measure, summed up the need for a new system when she said, “If Congress does nothing or simply extends E-Verify without much-needed reform, it would be disastrous.”