Tuesday, September 26, 2006
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The U.S. Department of Labor's role in approving visas for skilled foreign workers is a rubber stamp that exposes the system to fraud, according to internal audits and a Portland Press Herald/Maine Sunday Telegram investigation.
Of the 307,771 H1B labor condition applications filed nationwide last year, 99.7 percent were certified by the department, according to a June 2006 U.S. Government Accountability Office report.
The federal law that sets up the H1B visa program is written so that Labor officials must certify them, even if there's good reason to believe that applicants don't meet statutory requirements, federal auditors say.
This certification process could hurt American workers and raises national security issues, critics and auditors suggest, by not providing enough review of the need for foreign labor in the United States.
During 2004 and 2005, Maine served as a gateway to this system for dozens of companies, including several with little or no connection to the state.
In some cases, individual companies filed applications for as many as 500 foreign high-tech workers who purportedly would have been working in Maine communities such as Portland, Augusta and Pittsfield.
"In Maine they're looking for 500 (software) developers? That's absolutely absurd, but that's how out of control this program has gotten," said Marcus Courtney, president of WashTech, a unit of the Communications Workers of America labor union. "There's clearly not that kind of demand in Maine.
"One of the big myths of the program is that there's some kinds of laws. It literally is like the Wild West," Courtney said. "There's not even a Wyatt Earp in sight when it comes to reining in the H1B visa program."
Supporters of the program acknowledge that it's not perfect, but suggest the program isn't as fraught with fraud as its detractors charge.
"It seems to me it's possible to game the system, (but) at least from our members, 99 percent or more are using it properly," said Angelo Amador, director of immigration policy at the U.S. Chamber of Commerce.
In Maine, companies such as Wright Express, Fairchild Semiconductor, Idexx Corp. and others make legitimate use of the system to fill gaps in their work forces. And nationally, groups such as the U.S. Chamber are pushing to expand the H1B program, allowing more of the world's "best and brightest" admission into the country to work at America's high-tech companies.
"We're in a global economy. With these companies, it's very easy to pick up shop and go somewhere else," Amador said. "It's important to keep these jobs in the United States."
The first step in the complex process of bringing foreign professionals into the country is the Department of Labor's approval, or certification, of a labor condition application.
Companies seeking to bring skilled foreign workers to the United States on H1B visas must file applications with the department.
Once a company has a certified labor condition application, it can petition the U.S. Department of Homeland Security's Citizenship and Immigration Services unit for an H1B visa, which is a temporary, three-year work permit for an employee that can be extended another three years.
The Labor Department "has minimal human intervention during the review process and the certification approval is simply a rubber stamp, as long as the (labor condition application) is complete and free of obvious errors," the U.S. Department of Labor's Office of the Inspector General said in its 2003 report, "Overview and Assessment of Vulnerabilities in the Department of Labor's Alien Labor Certification Programs."
And that rubber-stamp program is a magnet for those who want to defraud the system, the auditors suggested in the same report, as evidenced by continued findings of fraud in the system by their office.
"These cases involve fraudulent (labor condition applications) that are filed on behalf of fictitious companies and corporations, individuals who file petitions using the names of legitimate companies and corporations without their knowledge or permission, and immigration attorneys and labor brokers who collect fees and file fraudulent applications on behalf of their clients," auditors wrote.
According to the laws setting up the H1B visa program, "The secretary of labor shall review such an application only for completeness and obvious inaccuracies. Unless the secretary finds that the application is incomplete or obviously inaccurate, the secretary shall provide the certificationwithin seven days of the date of the filing of the application."
The system's supporters say concerns about fraud are overstated, and they stress the importance of bringing over foreign high-tech workers to fill gaps in the American work force.
The newspaper's own investigation found that labor condition application filings for Maine-based positions has mushroomed in recent years. From fiscal years 2003 to 2005, the number of Maine-based labor condition applications filed with Labor jumped 230 percent, according to federal records analyzed by the newspaper.
The number of computer-related application filings saw a particularly high increase. In 2003, 53 applications were filed through Maine for 206 computer-related workers. In 2005, 722 applications were filed for 2,266 computer workers. The 2005 records are the latest released by the U.S. Department of Labor.
Maine isn't Silicon Valley, or even Massachusetts, when it comes to a need for computer programmers. While there's a solid high-tech sector here, it's also modest in size. It's difficult to envision actual demand driving the jump in visa certification applications, experts said.
The number of computer programmer and software engineer types of positions declined 9.4 percent in Maine from 2003 to 2004, according to the latest state records.
The flood of labor condition applications also wasn't being driven by Maine's quicker paperwork processing speed, which has been cited as a reason that green-card requests exploded here during the same period. Green cards allow foreigners to live and work here indefinitely.
States don't process the H1B visa applications; that's done by the federal government. Many observers think the jump in Maine-based applications could be related to prevailing wages.
The system for filing a labor certification application for an H1B visa is online. Companies must fill out a Form ETA 9035E, a labor condition application for nonimmigrant workers. Each application is made for a position, or a number of positions, not for an individual or individuals.
The companies make several "attestations," or statements, on the form, including when it wants to employ the foreigners and how many. The company also states the prevailing wage for the position in the area where it wants to employ the foreign workers. (See box at right for more information.)
But the labor condition application "simply requires employers to make certain attestations that program requirements have been met," the Office of the Inspector General said in its 2003 audit. "Employers are not required to provide any supporting documentation for DOL to review prior to making a determination on the (labor condition application)."
The Government Accountability Office report for June said the U.S. Department of Labor electronically reviewed more than 960,000 applications and certified almost all of them from January 2002 through September 2005.
The auditors also found 3,229 applications that were certified, even though the wage rate on the application was lower than the prevailing wage for that occupation.
They discovered about 1,000 certified applications that contained "erroneous employer identification numbers," which the GAO said raises questions about the applications' validity.
On the application form, the companies must identify the city and the state where the position is based, and the prevailing wage for the position in that city. If the foreign workers move to a different company worksite in another area, the business is supposed to refile the labor condition application for the new location.
Experts suggested that certifying the applications in Maine instead of areas where the foreign workers actually will be employed circumvents that prevailing-wage attestation.
"One of the ways the companies sort of play the system is they say, 'We're going to locate this worker in, let's say, Maine,' which may be a lower-cost area, and then actually place them in, let's say, Boston or someplace else that's a high-cost area," said Ron Hira, assistant professor of public policy at the Rochester Institute of Technology in New York, an officer with the Institute of Electrical and Electronics Engineers and a leading expert on the H1B visa system.
Another reason for filing the applications through rural sites such as Maine is that it can help keep companies out of the spotlight, said Courtney, of WashTech.
"By going through places like Maine, it's much more difficult to track how major employers are using the H1B visa program," said Courtney. "People are looking around, poking around on this issue. Most people are looking at it in labor market areas where there's a high concern of abuse.
"You would never look in rural, non-urban areas that have no significant high-tech presence to try to find answers for problems with the program."
And finally, cases of outright fraud have surfaced as well, including at least one with a Maine connection.
The U.S. Department of Labor's Office of the Inspector General said it has uncovered illegal operations in California, Texas and other states in which fraudulent labor condition applications were used to obtain visas for foreigners.
On May 5, a federal grand jury in New Jersey indicted Narendra V. Mandalapa, president of Cybersoftec Inc., on counts of immigration fraud, money laundering and mail fraud related to his applications for green cards. He has pleaded guilty to a single count of immigration fraud and is to be sentenced Nov. 27.
Cybersoftec had offices in Maine and New Hampshire, and it also got more than 100 H1B labor condition application certifications for H1B visas during 2004 and 2005, claiming the two states as the work sites for the requested positions.
Essentially all of these Maine-based applications - as with others across the country - were certified. And that's a problem, according to Labor's Office of Inspector General.
Its auditors clearly - and bluntly - detailed problems with the agency's labor certification system for both green cards and H1B visas in its 2003 report.
"The H1B is a 'rubber stamp' program because the applicable regulation requires (the department) to approve the labor condition application if the form is complete and free of obvious errors," the auditors wrote, emphasizing the word "requires" in the report.
"In our opinion, DOL adds nothing substantial to the H1B program. It would be more efficient if the employers filed their applications directly to the Bureau of Citizenship and Immigration Services for visa approval," the auditors wrote. "The (Inspector General) believes that if (Labor) is to have a meaningful role in the labor certification process, it should have corresponding (statutory) authority, not currently available, to ensure the integrity of the process, by verifying the accuracy of the information provided on (applications)."
Auditors noted that the processing system for labor condition applications was designed for speed rather than for actually screening out applicants who don't meet program requirements.
"Investigations continue to identify fraud in the H1B program which may result in security risk associated with aliens admitted to the U.S. by fraudulent means," they wrote. "(The department) does not track the movement of H1B visa holders while in the U.S. and has no way to prevent the nonimmigrant from abandoning employment and remaining in the U.S."
The auditors reiterated many of the same concerns in its report last November, "Top Management Challenges facing the Department of Labor Identified by the Office of Inspector General."
And many of the issues had been raised previously, in a 1996 Office of the Inspector General report titled "The Department of Labor's Foreign Labor Certification Programs: The System is Broken and Needs To Be Fixed."
Elliot Lewis, assistant inspector general for audit at the Office of the Inspector General, said this May that he has just assigned staff to a new audit of the DOL's labor certification process, to see if the agency has addressed problems raised in 2003.
"They literally just got started on this back a couple of weeks ago," said Lewis.
America's high-tech industry is a driving force behind allowing skilled workers into the United States. The industry argues that there aren't enough skilled engineers in this country to meet labor demands. The industry also argues that foreign students educated at U.S. colleges should be allowed to stay here for work, rather than export the expertise to other countries.
Claims of fraud in the foreign-worker system are overblown, as are contentions that American workers are hurt by the influx of skilled immigrants, said Jeff Lande, senior vice president at the Information Technology Association of America.
"By most counts, we've got about 10 million technology workers in America," said Lande. "We're talking about a (H1B visa) cap of 65,000 a year, maybe 20,000 of whom are technology workers. You're barely talking about a drop in the bucket spread out across the country. Any complaints about this program having a serious impact on U.S. labor are comical."
The H1B program is capped at 65,000, though the immigration reform act passed earlier this year by the Senate would increase that to 125,000. That bill must be reconciled with a House version, and the issue is under debate now.
However, according to the State Department, there were 124,100 H1B visas issued in 2005. There are exemptions to the cap, including positions at colleges or nonprofit research organizations, as well as the first 20,000 petitions for foreigners with an advanced degree earned in the United States.
Lande also made the argument that students who earned degrees here should be allowed to work here.
"We're training a lot of these people in our universities. When they're done, they have to go back home instead of being able to hook up here," Lande said. "It's just ludicrous. It undermines our competitiveness and ultimately costs far more jobs than would be saved.
"The world's kind of flat now. The alternative to having the talent here is to just 'offshore' it, and that's not in the nation's interest."
"Offshoring" remains a very real concern, said Daniel Griswold, director of the Center for Trade Policy Studies at the Cato Institute. He was referring to the process of moving work to other countries.
"Clearly the market is flashing a neon sign that we need more skilled workers. We're creating more jobs than we have Americans trained to do them," Griswold said. "Our economy is stronger if foreign-born workers can come here and contribute."
Lande noted that if companies are misusing the program, they should be dealt with.
"My organization and my member companies are strongly supportive of ensuring there is no fraud in the system," Lande said. "Not only should fraud be taken care of from a public-policy perspective, but my companies also realize from a self-protection standpoint that if there is fraud in the system and it's not caught, that causes problems for all the players that are doing it right."
Critics of the H1B process say industry arguments have had too much influence on the current system.
"It was set up that way because the most powerful corporate interests wanted it set up that way," said Courtney, of the labor union's WashTech unit. "It's not that the Labor Department doesn't have concerns. (The law) literally ties the hands of the Department of Labor."
The Government Accountability Office report for June illustrates the enforcement challenges that are created by sheer bureaucracy. The auditors found that the visa program could have more oversight if electronic data from Labor could be understood and used by Homeland Security's U.S. Citizenship Immigration Services' computers. Data exchange between the two agencies is limited because they have different computer systems.
The report also found that Citizenship and Immigration Services doesn't have a process to report possible violations it discovers to Labor.
Current law also blocks Labor from investigating problems with labor certifications that are free of obvious errors, unless an aggrieved party makes a complaint, the report said.
"Even if (U.S. Citizenship and Immigration) did report these cases, current law precludes (Labor) from using the information to initiate an investigation. According to officials from Labor, it does not consider Homeland Security to be an aggrieved party; therefore, Labor would not initiate an investigation based on information received from, or a complaint filed by, Homeland Security," said Sigurd R. Nilson, director of the Government Accountability Office's Education, Workforce and Income Security division, in testimony to a House of Representatives subcommittee.
According to the law setting up the H1B visa program, "Complaints may be filed by any aggrieved person or organization (including bargaining representatives)."
Sen. Olympia J. Snowe, R-Maine, said the Government Accountability Office report showed that the oversight agencies face "unnecessary and artificial barriers to vital information sharing."
Hira, the public-policy professor, said he thought the legislation establishing the H1B program was purposefully set up in a misleading way.
"If you read all the language, you'd think this is all working the way it's supposed to be. It sounds like there's lots of good regulations in place that protect (workers)," Hira said. "The problem is, it is written by the people who are using the program. The less regulation they can get, the better.
"They've written in the language to show enforcement. It works to their advantage. You can tell the American public, 'We've got all these protections in place.' At the same time, 'wink wink, nod nod' to the companies."
Staff Writer Matt Wickenheiser can be contacted at 791-6316 or at: mwickenheiser@pressherald.com
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