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Bloggings on Dysfunctional Government

by Angelo Paparelli

Editor's note: Here are the latest entries from Angelo Paparelli's blog.

October 30, 2008

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.