Immigration Mission Creep and the Flawed H-1B Report on Fraud and Abuse

There is a troubling development in the land of immigration.  The lessons of history have been forgotten.  The immigration bureaucrats, immigration enforcement officials, and collusive politicians have been engaged in mischief, and a gullible media swallow the Kool-Aid.  The public is then misled.  What's behind these bold assertions? 

For the full story, see the long version of an article (Immigration Risks Imperil the New Government) that I co-authored with Ted Chiappari, pulished on October 27 by the New York Law Journal.  For a summary, read my rant below:

• Before 9/11, when the old Immigration and Naturalization Service (INS) lived dysfunctionally within the Department of Justice, many knowledgeable observers decried the inherent contradiction of asking a single agency to perform inherently contradictory functions: (1) to adjudicate requests for immigration benefits; and (2) to serve as a police agency that enforces the immigration laws, punishes fraud and other crimes, and deports people.
• With the enactment of the Homeland Securty Act (HSA), Congress showed that it had heard the cries of the critics.  HSA abolished INS and separated the immigration agency into distinct units: (1) one unit would perform the immigration adjudicative, benefit-conferring function; and (2) two other units would serve as the immigration cops.  The adjudicator of benefits is now USCIS.  The immigration police are now divided into border police (Customs and Border Protection) and interior police (ICE or Immigration and Customs Enforcement).
• It didn't take long after HSA's passage for mission creep to begin, hand in hand with its kissing cousin, mission neglect.  USCIS initiated a fraud detection unit to ferret out benefit fraud. 
• This unit, now known as the Fraud Detection and National Security (FDNS) division, has many of the earmarks of a police agency in that it investigates immigration crimes and builds cases for prosecution.  These are tasks that ICE should be doing, but that unit is too busy with high profile raids to be bothered with investigating what apparently is viewed as penny ante immigration fraud. 
• Even though the HSA says that USCIS should focus on the sole task of approving or denying requests for visa petitions, green cards and citizenship, FDNS and Congressional opponents of immigration impose on the agency this extra-legal crime detection role.
• Aside from the mission neglect of ICE and USCIS, what's worse is that USCIS funds FDNS's operations through user fees paid by U.S. businesses and individuals seeking immigration benefits.  This is simply unjust because these users get no benefit from FDNS; rather they suffer the detriment of delayed immigration-benefits adjudications by a distracted agency.
• This succession of outrageous developments is now surpassed by an even more galling affront to fairness and justice.    FDNS has recently released its Report on H-1B Fraud and Abuse, finding a 20% rate of fraud and abuse in H-1B cases.  The report is found on the home page of Senator Chuck Grassley who uses it to promote pet legislation that will add new unneeded and burdensome restrictions on the H-1B and the similarly beleaguered L-1 visa categories.
• As our article shows, the report lacks statistical validity: Based on an absurdly small sample size of 246 (0.2%) out of the 96, 827 H-1B petitions filed between October 1, 2005 and March 31, 2006, the USCIS Office of Fraud Detection and National Security (FDNS) found 51 cases of fraud and abuse (33 cases of fraud [13.4%] and 18 cases of “technical violations” found to constitute “abuse” [7.3%]).The statistical significance, if any, of the findings from this survey, and the extrapolations from these findings, should be taken with large chunks of salt.

  The survey’s findings of a 20% combined fraud and technical violation rate is subject to a margin of error of plus or minus 5%. The USCIS excluded from the sample population prospective H-1B workers still residing abroad and excused the site-visit component of the research in unspecified “extenuating circumstances” with unstated frequency.

  The report states that it drew a “random” sample of 246 cases, but mere randomness does not establish lack of bias. There is no indication of how randomness was determined and the samples were chosen.

  The survey report notes that USCIS selected the Chi-Square distribution approach to theoretical probability distribution and used a 95% significance test. This means that USCIS picked a significance level of 5%. There is no indication why a 5% level rather than a lower level was chosen. Would the test fail to be significant at a less than 5% significance level? The significance level is subjective and is chosen based on the seriousness of the issue at hand. For instance, a 1% significance level on a murder trial might be chosen because it is serious and a 5% significance level on something less serious. The survey does not discuss the importance or “seriousness” of the H-1B visa category to U.S. employers and the nation’s economy.

  Moreover, the report does not say whether the USCIS picked the significance level before or after it knew the results. The significance level must be chosen before the analysis is done, not after.Given these uncertainties and concerns, the next Administration, Congress and DHS should be slow to draw conclusions and extrapolate patterns of fraud or abuse from this study without confirming whether the survey results and methodology would satisfy neutral experts in statistics and probability.

  In pursuing H-1B violations, FDNS is not only traipsing into ICE's domain.  FDNS also steps on the toes of the Department of Labor (DOL), as our article notes:

  More than 80% of the asserted violations involved DOL regulations found at 20 CFR § 655.805. A supermajority of the 51 H-1B violations found in the BCA Report involved:

  (1) employment at a location not listed on the LCA (55%),

  (2) the failure to pay the prevailing wage (27%),

  (3) the duties the H-1B employee performed were other than those listed on the LCA (12%), and

  (4) the H-1B worker paid the petition filing fee statutorily imposed on the employer (6%).

  (Note that the percentage numbers exceed 100% because some petitions revealed more than one category of violation.)

  So what comes next?  I predict that USCIS will use the report to arrogate more extra-legal police powers to FDNS.  Large H-1B employers will claim all the fraud and abuse are perpetrated by small employers.  USCIS will make it harder for small H-1B employers to receive petition approvals, just as they are now doing with small L-1 petitioning businesses. Prodded by Lou Dobbs and his ilk, Congress will push for more restrictive legislation further imperiling employment-based immigration.  America will lose the economic revitalization that business immigration can produce.

  Or maybe, Congress will engage in oversight and insist that USCIS, ICE and DOL each do their distinct jobs, and not engage in mission-creep and mission-neglect.   Or an outraged public can put Congress's feet to the fire and demand that all immigration laws be honored, especially the ones that restrict agency behavior, not merely those that apply foreign citizens.  One can only hope. 

Comments

[Green card visa]

Angelo is right in his response to lou dobbs' ilk. It is a fundamental idea in America that parties are innocent of allegations brought against them until proven guilty in court. Hence raising more allegations does not in any way prove that a party is guilty, so we cannot extrapolate from this data. And it is also true that federal agencies should do their job, and not take on the duties of other agencies.

[HoraceJones]

How is it that these agencies can pick and choose which laws they follow and do not, as well as which laws they enforce and which ones they do not? Where do the inspectors general of these agencies come into play? After all, the inspector general of each administration's purpose is supposed to be to ensure ethical and lawful behavior within the administration. Especially if the USCIS is only supposed to approve or deny immigrant investor visas, wouldn't its inspector general protest that the service was behaving illegally by overstepping its bounds as an agency?

[Green Card Visa]

It's so unfortunate that they would say '20% fraud and abuse' when there is only (from this very small sample) 13% fraud. That's like saying that cigarettes and oranges kill millions of people each year...Why lump in the two numbers then act is if the total is representative of each, rather than the sum it actually is? I'll tell you why - sensationalism!

[JT]

"why doesn't USCIS refer the matter to DOL and allow that agency to investigate?"

Investigating benefit fraud is the concern of EVERY government agency, not just that of the principcal agency that is charged with law enforcement such as ICE or the investigative unit at DOL. USCIS is a central hub of tremendous amounts of data and it would be absurd to not have an internal unit such as FDNS to investigate benefit fraud and develop leads that can amount to crimimal prosecutions. Agencies need to account for their own internal processes as well as maintain a liasonship with external entities in an effective manner. That said, the creation and funtionality of FDNS within USCIS is critical.

As for user fees supporting FDNS, I don't see how that is a concern as FDNS protects the integrity of the application process by aiming to stem both internal and external fraud. It is not only petitioners/beneficiaries that can fall within the scope of FDNS investigative duties.

USCIS was created as a self sustaining agency that can maintain as little an impact on gov't tax spending as possible. To ask the gov't to fund a USCIS internal vetting/fraud assessment unit such as FDNS would defeat itself.

[jobfinder]

i agree that this fdns thing has to stop as it's getting harder for aliens to get jobs and green cards. bring back ins who didnt look for fraud.

[Angelo Paparelli]

Dear Lou Dobbs' Ilk:

Thank you for your extensive, albeit misguided comments. You make the same mistake as USCIS. You take unchallenged allegations as truth and then extrapolate from that error to a broad and unproven conclusion ("[i]t is possible that 100,000 persons in the Employment Based backlog come from misrepresented/fraudulent employment arrangements").

The point of my blog posting was that USCIS should not be in the business of invading the turf of other agencies. If there is widespread suspicion of H-1B fraud, why doesn't USCIS refer the matter to DOL and allow that agency to investigate?

The Immigration and Nationality Act and the DOL regulations provide that if the Secretary of Labor after investigating finds good grounds to support the claim of fraud, then the employer will be given notice and an opportunity for a trial of the claim in an adversarial proceeding with a right of representation by counsel and a determination by an administrative law judge.

The USCIS has not proven that widespread H-1B fraud has occurred. The agency has not given the employer an opportunity to respond in a formal way with the right of legal representation. Mere allegations prove nothing.

[Lou Dobbs' ilk]

Perhaps the problem lies with the attorney representing the worker and the employer at the same time? Generally, the employer and employee have competing interests -- somehow employment based migration is different?

Perhaps you could do a blog entry on who represents the nonimmigrant worker, the domestic employee and the employer, and how groups like the AILA can accept money from employers under Department of Commerce rules concerning foreign labor representation.

Let's do a sanity check on your reasoning for discounting the validity of the USCIS study.

(1) employment at a location not listed on the LCA (55%),

This is important, the LCA allows the employer to pay the LOCAL prevailing wage not the national prevailing wage. If this is a problem, perhaps the law should be changed to the national median wage. In the programming occupation, this would give the H-1B programmer an increased wage of about $15,000.00 yr.

(2) the failure to pay the prevailing wage (27%),

The LCA is effectively a portion of the employment contract. Benching is a breach of that contract, the employer has the option to terminate the agreement, but not reduce the pay below what is stated on the LCA. The failure of the employer to provide billable hours is not a valid reason to pay beneath the stated wage.

(3) the duties the H-1B employee performed were other than those listed on the LCA (12%), and

This can be a clear indication of fraud, where the employer classifies the employee in a lower paying prevailing wage classification. Again, prevailing wage in Silicon Valley is far different wage level than Ohio.

My understanding is that it is legal for the employer can hire a Ph.D. for an entry-level prevailing wage within the proper occupation. The prevailing wage is based upon the occupational classification, job description and location, not the employee competency/education level, isn't that hyper-competitive enough?

(4) the H-1B worker paid the petition filing fee statutorily imposed on the employer (6%).

My understanding is that employers can recover some fees from H-1B employees, if they are paid above the prevailing wage.

Again, if the employee could be required to pay application and legal fees, how would it be possible for the attorney to represent the employer?

The USCIS study indicates that 31% of those holding bachelors degrees are fraudulent or misrepresented. Most EB-3 green card applicants are adjustment of status from H-1B at the bachelor degree level or below.

It is possible that 100,000 persons in the Employment Based backlog come from misrepresented/fraudulent employment arrangements.