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 may obtain a U.S. passport, and evidence of citizenship or  nationality is required with every passport application.  For individuals 16  or older, a regular U.S. passport issued on or after February 1, 1998, is valid  for 10 years from the date of issue; it is valid for five years for younger  applicants. 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, within State’s Consular Affairs Bureau. Passport  Services, the largest component of Consular Affairs, consists of three  headquarters offices: Policy Planning and Legal Advisory Services; Field  Operations; and Information Management and Liaison. The Office of  Consular Fraud Prevention addresses passport, visa, and other types of  consular fraud. The Consular Systems Division is responsible for the  computer systems involved in passport services and other consular  operations. The Office for American Citizens Services 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.
Figure 1 shows the key State Department units involved in passport-related  operations.
State operates 16 passport-issuing offices in Boston; Charleston, South  Carolina; Chicago; Honolulu; Houston; Los Angeles; Miami; New Orleans;  New York; Norwalk, Connecticut; Philadelphia; Portsmouth, New  Hampshire; San Francisco; Seattle; and Washington, D.C. These 16 offices  employ the approximately 480 passport examiners who are responsible for  approving and issuing most of the 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. With only a few exceptions, applications  submitted and approved overseas are transmitted electronically to a  domestic passport office to be printed.

		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.   Passport acceptance facilities are located at certain U.S. post offices,  courthouses, and other institutions and do not employ State Department  personnel. 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 that  applicant. Applications go to a passport office to be examined after their  information is entered, and payments are processed by a State Department  contractor, Mellon Bank, in Pennsylvania.
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. It also  includes the examination of an application to detect potential indicators of  passport fraud and the comparison of the applicant’s information against  databases that help identify individuals who may not qualify for a U.S.  passport. When passport applications are submitted by mail or through  acceptance facilities, examiners adjudicate the applications at their desks.  A relatively small percentage of the total number of passport applications  are submitted directly by applicants at one of State’s domestic passport- issuing offices. Applicants are required to demonstrate imminent travel  plans to set an appointment for such services at one of the issuing office’s  public counters. “Counter” adjudication allows examiners to question  applicants directly or request further information on matters related to the  application, while “desk” adjudication requires telephoning or mailing the  applicants in such cases. Figure 2 depicts the typical passport application  and adjudication process.

		Passport Fraud Detection Tools

The passport adjudication process is facilitated by computer systems— including the Travel Document Issuance System (TDIS), which appears on  passport examiners’ screens when the adjudication begins. Figure 3  identifies the key computer databases available to help examiners  adjudicate passport applications and detect potential fraud.
TDIS automatically checks the applicant’s name against several  databases— including State’s Consular Lookout and Support System  (CLASS), which contains  information provided by various offices within  State and information on outstanding criminal warrants provided by the  U.S. Marshal’s Service, the FBI, and other state and federal agencies, as  well as Health and Human Services’ database, which identifies parents who  have been certified by a state agency as owing more than $5,000 in child  support and therefore are not eligible for a passport. If TDIS indicates the  applicant may have applied for a passport at another agency or been issued  a U.S. passport within the last 10 years, it prompts the examiner to  reference computer databases outside of TDIS to determine whether the  prompt refers to the applicant or rather someone who resembles the  applicant.
In addition, examiners scrutinize paper documents and other relevant  information during the fraud detection process. Examiners compare the  application submitted by the applicant to the information on the screen to  make sure the information was entered properly, check for missing  information, and analyze application documentation for various types of  fraud indicators. In addition, examiners watch for suspicious behavior and  travel plans. Examiners and acceptance agents are instructed to request  additional proof of identification if they feel the documents presented are  insufficient. State officials said that in such cases, some individuals  abandon the application, and the names of those who do are placed in  State’s name-check system and are more stringently scrutinized if they  apply again. 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

Using the stolen identities and documentation of U.S. citizens is the  primary tactic of those fraudulently applying for U.S. passports. Applicants  also commit fraud through other means. Passport fraud is often linked to  other crimes.

		Passport Fraud Most Commonly Attempted by Imposters Using the Legitimate Documents of Others

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. One example identified by Diplomatic Security  investigators involved an alien using another person’s identity to obtain a  U.S. passport. In 2003, a woman using a fraudulent identity claimed to be  born in Puerto Rico and provided a Puerto Rican birth certificate when  applying for a passport at a clerk of the court office in Florida. She also  provided a Florida driver’s license.
Diplomatic Security investigators also found cases of U.S. citizens using the  documentation of others to hide their true identity. In 1997, a naturalized  U.S. citizen born in Cuba stole a Lear jet and transported it to Nicaragua for  use in charter services. 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 time served (about 7 months) and returned to California to  stand trial for murdering his wife. In a third example, a woman obtained a  U.S. passport for herself and her daughter using the assumed identity of a  friend and that friend’s daughter. The individual fled the country, but was  eventually caught, returned to the United States, and tried for forgery,  criminal impersonation, and child abduction.

		Various Other Methods Used to Fraudulently Obtain Passports

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 that it was 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. Assuming the identity of a deceased person is another  means of fraudulently applying for a passport. Diplomatic Security  investigated an individual who had been issued a passport in the identity of  a deceased person and was receiving Social Security benefits in the  deceased person’s name. The individual was charged with making false  statements on a passport application.

		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 Securityofficials, 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, according to a State Department document. 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. Other leaders of alien smuggling rings have also been  recently convicted. One such ring had been smuggling hundreds of  undocumented aliens from Ecuador and other parts of South America into  the United States for fees of $12,000 to $14,000 each.

	State Faces Challenges to Fraud Detection Efforts

State faces a number of challenges to its passport fraud detection efforts.  Limited interagency information sharing between State and law  enforcement and other agencies makes it more difficult to protect U.S.  citizens from terrorists, criminals, and others who would harm the United  States. Intra-agency information sharing between passport-issuing offices  and headquarters, and between offices, is also limited because State lacks a  centralized and up-to-date fraud library accessible by all staff. Additionally,  insufficient fraud prevention staffing, training, and oversight has resulted in  reduced fraud detection capabilities at the issuing offices. Finally,  overstretched investigative resources within State’s Bureau of Diplomatic  Security and Office of Inspector General have prevented investigators from  devoting adequate time and continuity to passport fraud investigations.

		Limited Interagency Information Sharing May Allow Individuals with Terrorism Ties and Criminal Fugitives to Obtain Passports

One of the key challenges to State’s fraud detection efforts is limited  interagency information sharing. State does not have access to certain  information in the Terrorist Screening Center’s (TSC) consolidated watch  list database. Additionally, State’s CLASS name-check system does not  include names of all criminals wanted by federal and state law enforcement  authorities. Further, access to information from other agencies varies.

			State Lacks Access to TSC Database

State currently lacks access to the names of U.S. citizen “persons of  interest” in  TSC’s consolidated terrorist watch list database. TSC 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. Because State’s CLASS name- check database for passports 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 1, 2003, State and TSC  did not begin exploring the possibility of systematically uploading data  from TSC database into passport CLASS until December 2004. State  initiated discussions with TSC after an official in State’s Passport Services  Office attended an interagency meeting and became aware that information  on certain U.S. citizens was available in the TSC database. A TSC official  told us that the center had devoted substantial effort in the first 16 months  of its operation to reaching out to federal agencies that could benefit from  TSC information. However, efforts to prevent the entry of or locate foreign  citizens who would do harm to the United States had been a higher  immediate priority in the early stages of operation than information-sharing  efforts involving U.S. citizens. The official also noted that, while TSC plays  an outreach role with other agencies, it is up to the individual agencies  involved to define their own specific information requirements.
State and TSC have not reached an agreement about the information- sharing proposal, though State sent an official proposal to TSC in January  2005. TSC has noted that it is in the process of addressing certain legal  questions relating to privacy. A TSC official told us that she does not  foresee any technical limitations because TSC already has an “elaborate  interface” with State’s CLASS system for visas. She added that TSC agrees  that it is important to work out an agreement with State.

			State’s CLASS Name-Check System Does Not Include Names of All Fugitives Wanted by Federal and State Law Enforcement Authorities

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. One of these 20 did  obtain a 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. Table 1 lists the crimes suspected of the federal fugitives in our  test. Fourteen were wanted by the FBI—including one on its Ten Most  Wanted list (the names of all 14 were posted on the FBI’s Web site). Six  other fugitives not in CLASS were wanted by other federal agencies—two  by the U.S. Marshal’s Service; two by the Bureau of Alcohol, Tobacco,  Firearms, and Explosives; and two by the U.S. Postal Service.
State officials told us 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.  Marshal’s Service was already sending to CLASS the names of all fugitives  wanted by federal law enforcement authorities. The officials noted that the  U.S. Marshal’s Service had been cooperative in providing names to CLASS  from its main database of fugitives. However, prior to the summer of 2004,  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, State requested, and the FBI agreed, to provide the  names from the FBI’s Ten Most Wanted list, though State officials told us  they often obtain this information by periodically checking the FBI’s Web  site. As part of these discussions, State and 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 (other than those from the Ten Most  Wanted list) 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. During the most  recent negotiations, in December 2004, FBI officials told State officials that  they would need a written proposal outlining State’s specific technical and  information needs, following which negotiations could begin to develop a  formal agreement. One possibility that was discussed for additional name  sharing was for the FBI to send State weekly extracts from its databases,  while another possibility would be to give State officials the ability to  access the FBI’s wanted-persons database. According to State, it sent a  written request to the FBI outlining its needs in April 2005. State also noted  that it had reached agreement in principal with the FBI on information  sharing efforts related to FBI fugitives.
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. A State official told us that the information  provided by the U.S. Marshal’s Service together with that to be requested  from the FBI would enable State to meet its regulatory requirement that it  not issue passports to subjects of federal felony arrest warrants. However,  we noted that the limited information State was receiving on fugitives  wanted by the U.S. Marshal’s Service was not as comprehensive or up to  date as State officials believed: two of nine individuals wanted by the U.S.  Marshal’s Service were not in CLASS at the time of our test. 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.
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 they believed it would be more useful for  State to have a more comprehensive list of names that included both  federal and state fugitives. These officials pointed out 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. Table 2 lists the crimes  suspected of the 17 state fugitives not in CLASS who were included in our  test.
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. The officials pointed out that, though the law is specific about  denying passports to individuals wanted on federal felony charges, the law  was not as clear cut about doing so in the case of state fugitives. However,  FBI officials told us that, at a minimum, State could notify law enforcement  authorities that such individuals were applying for a passport. Then, the  relevant law enforcement authorities could make their own determination  about whether to obtain a court order that would provide a legal basis for  denying the passport or to simply arrest the individual or take some other  action. State officials noted that, to work effectively, such an arrangement  would require the FBI to establish some sort of liaison office that State  could contact in such instances.

			Access to Information from Other Agencies Varies

State receives varying degrees of information from several other agencies,  including the Department of Health and Human Services, the Department  of Homeland Security (DHS), the Social Security Administration (SSA), and  individual state departments of motor vehicles.
Health and Human Services provides names of parents who have been  certified by a state agency as owing more than $5,000 in child support  payments and are therefore not eligible for a U.S. passport. According to  State officials, this information-sharing arrangement has been very  successful in preventing such individuals from obtaining passports.
State is negotiating with DHS to gain access to naturalization records to  verify applicants’ citizenship. State officials currently rely on ad hoc  information from DHS colleagues, according to Passport Services  officials, and irregular notifications from DHS when fraudulent  passports are confiscated.
State currently uses limited information from Social Security records  which are quickly becoming outdated that SSA provided to State on a  one-time basis in 2002. Though State and SSA signed an April 2004  memorandum of understanding giving State access to SSA’s main  database to help verify passport applicant’s identity, the memorandum  had not been implemented as of March 2005 because the system was  still being tested to ensure SSA privacy standards. The agreement will  not include access to SSA death records, though State officials said they  are exploring the possibility of obtaining these records in the future.
Issuing office officials have contact with officials in individual state  departments of motor vehicles to confirm, for example, the physical  characteristics of individuals presenting drivers licenses as  identification. However, these are informal contacts cultivated by  individual State officials.

		Limited Intra-agency Information Sharing and Unclear Fraud Support Responsibilities May Be Affecting Fraud Detection Capability

State does not maintain a centralized and up-to-date electronic fraud  prevention library, which would enable passport-issuing office personnel in  the United States, and overseas, to efficiently share fraud prevention  information and tools. As a result, fraud prevention information is provided  inconsistently to examiners among the 16 domestic offices. Though offices  share information through local fraud prevention files or by e-mailing  relevant fraud updates, the types and amount of information shared with  passport examiners in each office vary widely. 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.
In contrast, the issuing office in Seattle developed its own online fraud  library that contained comprehensive information and links on fraud alerts  nationwide. Some information was organized by individual state, including  information such as the specific serial numbers of blank birth certificates  that were stolen. The library contained sections on Social Security  information, government documents related to U.S. territories, recent fraud  updates, and fraud-related news, among other information. It included  examples of legitimate as well as counterfeit naturalization certificates,  false driver’s licenses, fraud prevention training materials, and a host of  other fraud prevention information resources and links. Seattle offered a  static version of its library on CD-ROM to other issuing offices at an  interoffice fraud prevention conference in 2003. A few of the other offices  used this resource to varying degrees, but their versions have not been  regularly updated since 2003. An Office of Consular Fraud Prevention  official told us that they uploaded at least some of the information onto its  Web site, but that material has not been regularly updated, either. The  developer of the library has since been reassigned. Most of the 16 fraud  prevention managers we talked to believed that the Bureau of Consular  Affairs should maintain one centralized, up-to-date fraud prevention  library, similar to the Seattle-developed model, that serves offices  nationwide.
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. Fraud prevention officials  also told us that most of the information on the site relates to visas rather  than U.S. passports. We directly observed information available on this  Web site and in the “e-room” during separate visits to State’s passport- issuing offices and noted that some of the material was outdated. For  example, in September 2004, we noted that certain information on state  birth and death records had not been updated since September 2003 and  that information on fraudulent U.S. passports had not been updated in  more than a year.
In addition to limited information sharing, State’s fraud prevention support  services are not closely coordinated with the passport-issuing offices.  Multiple headquarters offices, including the Office of Consular Fraud  Prevention and Office of Passport Policy Planning and Legal Advisory  Services, claim some responsibility for fraud trend analysis and fraud  prevention support but fraud detection personnel in issuing offices are  unclear as to which offices provide which services. Most of the 16 fraud  prevention managers we interviewed said they do not clearly understand  the respective roles of these headquarters offices in helping them with their  fraud detection efforts. Also, while officials in these two offices said they  are responsible for analyzing fraud-related data to identify national or  region-specific trends on factors such as the types, methods, and  perpetrators of fraud, most fraud prevention managers told us they could  not recall having received much analysis on fraud trends from these offices  beyond individual fraud alerts. We noted that the Office of Passport Policy  Planning and Legal Advisory Services only recently began to perform some  basic fraud trend analysis on a systematic basis. Office of Consular Fraud  Prevention officials told us they spend most of their time on visa fraud  because each domestic agency has its own fraud detection apparatus.  While this office provides some training services, these are limited, and  much other training is provided by issuing offices and is not coordinated  with headquarters.

		Insufficient Fraud Prevention Staffing, Training, Oversight, and Investigative Resources Make Fraud Detection More Difficult

Limited fraud prevention staffing, training, oversight, and investigative  resources pose additional challenges to fraud detection efforts. A staffing  realignment reduced the time available to Fraud Prevention Mangers to  review cases and make decisions on fraud referrals. Additionally,  interoffice transfers of passport adjudications have, in some cases, led to  fewer fraud referrals back to the originating offices. Further, State’s lack of  a standard refresher training curriculum and schedule has led to uneven  provision of such training. Additionally, sporadic training and limited  oversight of passport application acceptance agents constitute a significant  fraud vulnerability. Finally, overstretched investigative resources hinder  fraud detection efforts.

			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, in part by overextending their own  responsibilities. State eliminated the permanent role of assistant primarily  to expand participation of senior passport examiners serving in that role on  a rotational basis; the purpose was to help the examiners gain a deeper  knowledge of the subject matter and, in turn, enhance overall fraud  detection efforts when the examiners returned to adjudicating passport applications. Prior to the permanent position being abolished, 12 of the 16  passport issuing offices had at least one assistant manager (2 offices had  two). Of the 4 offices that did not have permanent assistants, 3 did not  have them because they had relatively low workloads and 1 had been in  operation only for a few years and had not yet filled the position. Managers  at 10 of the 12 offices that had 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. Fraud Prevention Managers also said that taking on their  assistant’s tasks had diverted their attention from their fraud trend analysis  as well as their preparation of reports to Washington, D.C., and cases for  referral to Diplomatic Security. Some managers said they are now  performing more case work than before because they lack an experienced  assistant and do not always believe they can rely on rotating staff to do this  work unsupervised.
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, the period during  which the position was eliminated, and this percentage was much higher in  some offices. Fraud Prevention offices screen fraud referrals received  from examiners, perform certain checks on applicant information, and  assess the examiner’s rationale for making the referral before the fraud  prevention manager can determine whether to refer the case to Diplomatic  Security for further investigation. Without their assistants helping them  with these and other duties, 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 this  responsibility. In one issuing office where referrals to Diplomatic Security  were down 41 percent, the manager indicated that loss of his assistant had  slowed his ability to get cases to Diplomatic Security because he had to  perform many of the assistant’s duties. A Diplomatic Security agent in  another issuing office, where the fraud referral rate was down by 55  percent, said the overall effect of eliminating the assistant manager  position had been harmful to fraud detection efforts at least in part because  the permanently assigned assistants had developed valuable personal  contacts and cooperative arrangements over time with state and local law  enforcement authorities, department of motor vehicle officials, and others,  and that such relationships could not be easily developed or maintained by  rotating staff.
Most Fraud Prevention Managers acknowledged the value of having senior  examiners rotate into the fraud prevention office for temporary  assignments; however, the managers said that rotating staff should  augment the efforts of a permanent assistant and not serve in place of that  role. 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. Both of these offices  operate multiple shifts each workday, and the new managers are intended  to provide more comprehensive fraud prevention support for all of the  shifts. State also plans to establish one additional fraud prevention  manager position at another issuing office with a large workload. There are  no current plans for additional positions at any of the other 13 offices.

			Interoffice Transfers of Passport Adjudication Workload Result, in Some Cases, in Fewer Fraud Referrals Back to Originating Office

As adjudication workload and production capacity fluctuate at individual  passport-issuing offices, State routinely transfers adjudication cases among  the different offices to keep workload and capacity in balance at each  location. Fraud Prevention Managers at a number of issuing offices said  they had noticed that a lower percentage of fraud referrals are being  returned to them from the 3 offices that were assigned the bulk of  workload transfers from other offices. The Fraud Prevention Managers  noted that, over the course of a year, the many thousands of passport  applications originating from one particular region should generally be  expected to generate a consistent rate of fraud referrals. 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;  the other 89 percent were provided by regional agency passport examiners  (74 percent) and others, including acceptance agents (15 percent). 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, since they are familiar with at  least some of the neighborhoods and schools in the area, applicants’  answers to such questions may quickly indicate whether 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 examiners who were fluent in Spanish.  She and other officials emphasized the usefulness of that skill in detecting  dialects, accents, handwriting, and cultural references that conflict with  information provided in passport applications. Moreover, some officials  added that passport examiners at centers handling workload transfers are  not always well trained in region-specific fraud indicators and do not have  the same opportunity to interact directly with applicants as do the  examiners working at public counters in regional offices.

			State Lacks Established Refresher Training Curriculum; Such Training Is Provided Unevenly across Offices

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, the Fraud Prevention Managers at each passport- issuing office have developed their own fraud detection refresher training  approaches and materials. 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., much of which were  outdated. Some scheduled more regular training sessions, and others held  training 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 when time is available and may be canceled  during busy periods. 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.

			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, such as evidence that birth certificates and parents’  affidavits concerning permission for children to travel had been received,  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 agency.
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, those in  large population centers, those where examiners and Fraud Prevention  Managers had reported problems, and those 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 and concentrates her efforts in higher  fraud areas, which tend to be in the larger cities.
Officials at one issuing agency noted that State had worked together with  the U.S. Postal Service to develop CD-ROM training for use at Postal  Service acceptance facilities. The officials noted that, while they believed  the training had been well designed, State does not have any way of  tracking whether all postal employees responsible for accepting passport  applications actually receive the training. Additionally, issuing office  officials also said that acceptance agent staff should receive training from  outside agencies such as state departments of motor vehicles, local police,  and the FBI on document authenticity and fraud. Other issuing office  officials said acceptance agents should also receive interview training.
Finally, while State officials told us it is a requirement that all acceptance  agency staff 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 and the office  did not keep track of how many individuals acted in this capacity at those  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 11 terrorist  attacks, the bureau hired about 300 additional agents, at least partially to  reduce investigative backlogs. 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. For example, a  significant number of agents from field offices across the country are  required to serve on “protective detail” in New York when the United  Nations General Assembly convenes and at various other diplomatic  events. We found that at most of the offices we visited during our  fieldwork, few of the agents responsible for investigating passport fraud  were actually physically present. At one office, all of the agents responsible  for investigating passport fraud were on temporary duty elsewhere, and the  one agent who was covering the office in their absence had left his  assignment at the local Joint Terrorism Task Force to do so. A number of  agents were on temporary assignments overseas in connection with the  2004 Summer Olympics in Greece. 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 because of the competing demands on their time. The agents  expressed concerns about the resulting vulnerability to the integrity of the  U.S. passport system. 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. A  number of Diplomatic Security agents pointed out that passport fraud  investigations are often “time sensitive” and that opportunities to solve  cases are often lost when too much time elapses before investigative  efforts are initiated or when such efforts occur in fits and starts. The  rotation of Diplomatic Security agents to new permanent duty stations  every 2 or 3 years also makes it more difficult to maintain continuity for  individual investigations. Passport-issuing office officials told us that cases  referred to Diplomatic Security sometimes take a year or more to  investigate. The officials also said that the investigating agents often do not  have time to apprise passport-issuing offices of the status of individual  investigations and, thus, that the opportunity to convey valuable “real-time”  feedback on the quality of fraud referrals was lost. 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 that most cases be closed after 12 months, whether or not  the investigations were complete. This requirement was meant to reduce  the backlog of old cases. The agent said that about 400 cases at his office  were closed before the investigations were complete and that this action  had taken place over his strenuous objection. 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 close all cases that had remained open beyond a  specific time limit.
State officials agreed that Diplomatic Security agents are not currently able  to devote adequate attention to investigating passport fraud. State officials  told us that the Bureau of Diplomatic Security plans to hire 56 new  investigative agents over the next few years to augment passport fraud  investigation resources at each Diplomatic Security field office nationwide.  According to State officials, these new investigators will be solely  dedicated to investigating passport and visa fraud and will not participate  in protective details or other temporary duties that would distract them  from their investigative work. The new hires are to be civil service  employees and will not be subject to the frequent rotations to new duty  stations that regular Diplomatic Security agents experience as foreign- service officers.
State Department OIG officials told us that the OIG also has authority to  investigate passport fraud. However, OIG officials told us that budgetary  constraints and related staffing reductions in recent years had severely  restricted its ability to investigate such fraud. The OIG has invested more  resources in efforts to pursue visa fraud, primarily because visa fraud is  more prevalent than passport fraud. The OIG has focused most of its more  recent passport-related efforts on assessing systematic weaknesses in  fraud detection efforts. The idea was to produce broad findings that would  be of greater benefit than individual passport fraud investigations could be  expected to yield with such a low investment of staff resources available.

	Effect of New Examiner Performance Standards on Fraud Detection Remains Unclear

Although State’s approach to developing new nationwide passport  examiner production standards, which were implemented in January 2004,  raises a number of methodological concerns, subsequent changes to the  standards make an assessment of their impact on fraud detection  premature. State intended that the new nationwide standards would make  performance expectations and work processes more uniform among its 16  issuing offices. State tested examiner production capabilities before  standardizing the passport examination process and used the test 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, State made a number of  modifications to the production standards during the year, making it  unclear what impact the standards have had on passport fraud detection.

		Methodological Concerns Exist Regarding State’s Development and Implementation of New Performance Standards

Consular Affairs officials stated that they created nationwide production  standards to make performance expectations of examiners and the  passport examination process as similar as possible at all domestic  passport offices. Though the issuing offices already had production  standards for their examiners, the average number of cases examiners  were expected to adjudicate per hour varied from office to office, creating  confusion and raising questions about equity among passport examiners,  according to State officials. In an effort to identify reasonable production  standards that would be applicable nationwide, State tested examiner  production capabilities at all of its domestic passport-issuing offices.  Issuing office management in each of the 16 offices measured the number  of passport cases completed by each examiner over a two-week period in  April 2003 and computed the hourly average for their office. Management  did not inform examiners that their production rates were being measured  for the test.
Passport Services officials set the new performance standards, but they did  not fully standardize some work processes and methods of counting  production until after the new numbers were set. After considering  nationwide test results, offices’ old standards, and passport office  partnership council feedback, headquarters officials at Passport Services  decided on the new standards for both desk and counter adjudication. The  new standards were implemented in January 2004 and varied by pay grade  level. After deciding on the production standards, State standardized the  work processes and counting methods that were the basis of examiners’  production averages. For example, State officials encouraged all domestic  passport offices to include expedited cases in examiners’ production  averages to make examiners’ work more comparable nationwide, though  some examiners and issuing office managers said expedited cases take  longer to complete because they require additional steps. Also, State’s  decision to base examiner’s production averages on a 7-hour day starting in  January 2004 marked a change for offices that previously had measured  production based on a 6½- or 7½-hour day.
State’s decision to measure and compile nationwide production averages  before fully standardizing the application examination process and the way  completed cases are counted at the passport-issuing offices limited the  validity of State’s test results. GAO has reported that consistency is a key  element for data reliability and that the data obtained and used must be  clear and well-defined enough to yield similar results in similar analyses.  However, we found that State had attempted to uniformly measure  production capacity at its 16 issuing offices when the individual offices  were still using differing work processes and methods of counting  production. Upon visiting 7 of the 16 offices after the new standards had  been implemented, we found that several differences in passport  adjudication practices and methods for counting production still existed.  For example, at some offices, the more complex and time-consuming cases  were included in examiner production averages, while at other offices they  were not. In addition, issuing office and headquarters management told us  that contract staff at some issuing offices performed certain tasks that  helped speed up examiner production, while such tasks were performed by  examiners at other offices. State told us 5 months after they had  implemented the standards that domestic offices’ requirements for  counting completed cases still varied and that this situation could make it  easier for examiners at some offices to meet their production standard.  State officials acknowledged that these processes and procedures should  be standardized to ensure that the standards are fair. If State had  standardized its work processes and procedures for measuring  performance before testing production, the test would presumably have  produced more valid results that could have been used to set uniformly  attainable production standards.

		Production Standards’ Effect on Fraud Detection Unclear

Because State adjusted the impact of production on examiners’  evaluations, the production standards implemented in 2004 placed  increased pressure on examiners to focus on production numbers. Before  State introduced the new standards, quantitative production requirements  were grouped together with qualitative measures for performance ratings.  For example, one former evaluative element paired the requirement that a  GS-11 examiner adjudicate 25 to 28 cases per hour with a qualitative  assessment of the examiner’s overall knowledge of the adjudication  process. Supervisors and management officials at some of the domestic  passport offices we visited said that if in previous years examiners failed to  meet their minimum production number, the supervisor could still rate the  examiner fully successful based on better performance against qualitative  standards within the same rating element. However, the 2004 standards  separated the quantitative performance measures—production numbers  and error rates—from qualitative elements. Examiners not meeting the  minimum hourly production average for the year were to receive an  unsuccessful rating on that performance element, regardless of qualitative  performance. An unsuccessful rating in one element results in an  unsuccessful rating overall, even if the examiner rates outstanding in the  other three skill elements. State officials said they made this change to  clarify the criteria on which examiners were rated.
Since the new production standards were set, State has incorporated  computer upgrades and process changes that have enhanced fraud  detection, but may have slowed the examination process. For example, at  passport office counters, State upgraded the computer system to allow  examiners to perform cashiering functions and to produce a receipt  immediately for all financial transactions, thus adding time to each case  requiring a fee. In addition, State added a page to the standard passport  application in March 2005, thus requiring more information from each new  applicant. Headquarters officials, regional office managers, and examiners  agreed that these changes enhance fraud prevention efforts. But while they  were pleased with the enhanced fraud detection capabilities, some  examiners and examiners’ union representatives told us the changes may  slow production now that examiners are required, for example, to  scrutinize longer applications.
Passport examiners and union officials argue that the new standards’  emphasis on production combined with changes to the examination  process have made it more difficult to meet the new production standards  without shortcutting fraud detection efforts. Some examiners we talked to  said changes to annual evaluation criteria and to the examination process  put additional pressure on them to focus on their numbers more than their  efforts to detect fraud. Some also told us they believe the new standards  were evidence that management prioritizes quantity of work over quality.  Union representatives said examiners frequently complain that, to achieve  their number targets, they have to skip required steps in the examination  process or scrutinize applications less thoroughly than necessary to  adequately detect fraud. A number of examiners at each domestic office we  visited either stated they take shortcuts themselves or know colleagues  who do. Some said, for example, they do not thoroughly check Social  Security information provided on the computerized examination software  against the information on the individual’s application. Others reported  they do not thoroughly check all “hits” generated by the computer  software—information that may help identify applicants flagged as  fugitives or raise other concerns in one of State’s passport-related  databases. An examiner noted that most hits, when further scrutinized,  prove to be invalid, and thus the chances of missing a valid hit were low.  Union representatives said they are hesitant to share such examples with  passport management because examiners fear negative repercussions.
Headquarters and regional office management said it is difficult to assess  the number or magnitude of shortcuts being taken and the impact of  shortcuts on fraud detection. Management officials at some of the offices  we visited said supervisors audit only a limited percentage of cases after  they are examined and that audits would not necessarily reveal that  examiners had taken shortcuts. The impact of shortcuts on fraud detection  is also difficult to assess because the overall incidence of detected fraud is  low. One examiner noted that if she failed to check any fraud indicators at  all and granted a passport to every applicant, she would be right more than  99 percent of the time. State data show that less than one-half of 1 percent  of applications in 2004 were identified as potential frauds.
Because State has modified the 2004 production standards in response to  management, union, and examiner concerns, the standards’ effect on fraud  detection is unclear. State officials told us that, from the outset of  implementing the production standards, they had planned to reassess the  standards regularly and to adjust them as necessary. In July 2004, State  responded to a union suggestion to reduce by one-half hour the number of  daily work hours used to calculate the hourly production average, thus  acknowledging that time examiners spend doing essential tasks, such as  reading e-mail updates, should not be factored into their hourly production  averages. Both desk and counter examination production standards were  lowered during 2004, and certain offices were exempted from either desk  or counter measurement due to regional workload variations. One such  exemption occurred in September 2004, when State informed regional  management that neither New York nor Hawaii should rate examiners on  desk examination production averages in 2004 because their desk  workloads were too low to enable a fair rating of examiners. Also,  headquarters passport management lowered the counter production  requirement for GS-9 and GS-11 passport examiners retroactive to January 1, 2004. While about 63 examiners were not achieving the required  production rate after the first quarter of 2004, all but 18 of State’s  approximately 480 examiners nationwide had met the standards by the end  of the year. Because State’s changes to the production standards continued  throughout 2004, the standards’ net effect on fraud detection efforts  remains unclear.

	Conclusions

Maintaining the integrity of the U.S. passport is an essential component of  State’s efforts to help protect U.S. citizens from those who would harm the  United States. The steadily increasing volume of passports issued each year  underscores the importance of this task. State has a range of tools and  resources at its disposal to help detect passport fraud, and it has taken a  number of important measures in recent years to enhance its efforts in this  area. However, State still faces a number of key challenges. Included  among them is limited information sharing with TSC, the FBI, and other  agencies, making it more difficult to protect the United States from  terrorists, criminals, and others. State has begun working with these  agencies to address this problem and is dependent on their cooperation to  remedy it. Limited intra-agency information sharing and insufficient fraud  prevention staffing, training, oversight, and investigative resources also  make fraud detection more difficult. Together, these challenges constitute a  serious concern to the overall effort to secure the borders of the United  States and protect its citizens.

	Recommendations for Executive Action

To improve the coordination and execution of passport fraud detection  efforts, we recommend the Secretary of State take the following six  actions:   Expedite, in consultation with the U.S. Attorney General, Director of the  Federal Bureau of Investigation, and Secretary of Homeland Security,  arrangements to enhance interagency information sharing, and reach  agreement on a plan and timetable for doing so, to ensure 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 that such information is made  available to State in an efficient and timely manner.
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.
Consider designating additional positions for fraud prevention  coordination and training in some domestic passport-issuing offices.
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 take any corrective action  that may be necessary.
Establish a core curriculum and ongoing fraud prevention training  requirements for all passport examiners, and program adequate time for  such training into the staffing and assignment processes at passport- issuing offices.
Strengthen fraud prevention training efforts and oversight of passport  acceptance agents.

	Agency Comments and Our Evaluation

State provided written comments on a draft of this report (see app. II).  State generally concurred with our findings, conclusions, and  recommendations. State indicated that it had agreed in principle with the  FBI on information-sharing arrangements concerning subjects of federal  felony arrest warrants and planned to establish an automated mechanism  for obtaining information from the FBI on the subjects of state warrants.  State said that it was designing a centralized passport “knowledgebase” for  passport examiners that includes information on fraud prevention  resources. It said it would consider rotating GS-12 Adjudication  Supervisors through local fraud prevention offices to relieve Fraud  Prevention Managers of some of their training responsibilities. State is also  establishing a standardized national training program for passport  examiners, instituting a regular nationwide quality review program for  passport acceptance agent work, and adapting and expanding computer- based training for U.S. Postal Service acceptance facilities for more  widespread use among acceptance agents nationwide. State did not  address our recommendation that it 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.
The FBI also reviewed a draft of this report for technical accuracy. The  FBI’s comments have been incorporated into the report, as appropriate.
As we agreed with your office, unless you publicly announce the contents  of this report earlier, we plan no further distribution until 30 days from the  date of this letter. We will then send copies to interested congressional  committees and the Secretary of State. We will also make copies available  to others on request. In addition, the report will be available at no charge  on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (202) 512-4128 or fordj@gao.gov. Additional GAO contacts and staff  acknowledgments are listed in appendix III.

Scope and Methodology

To examine how passport fraud is committed, we reviewed State  Department Bureau of Diplomatic Security closed passport fraud case files  and Bureau of Consular Affairs statistics on passport fraud. We also met  with officials at State’s Diplomatic Security Headquarters Criminal Division  and at Diplomatic Security’s Field Office in Miami and conducted telephone  interviews with Diplomatic Security officials at field offices in Chicago and  San Francisco.
To identify and assess the key challenges State faces in detecting passport  fraud, we directly observed State’s fraud detection efforts at 7 of its 16  domestic passport-issuing offices; tested State’s use of electronic databases  for fraud detection; analyzed fraud referral statistics from the Bureaus of  Consular Affairs and Diplomatic Security; and interviewed cognizant  officials in both of these bureaus. We visited State’s passport-issuing offices  in Charleston, South Carolina; Los Angeles; Miami; New Orleans; New  York; Seattle; and Washington, D.C. We chose these fieldwork locations to  gain an appropriate mix of geographic coverage, workload, levels and types  of passport fraud, and counter-to-desk adjudication ratios. In addition, we  chose the Charleston office because it is one of the two passport  “megacenters” responsible for adjudicating applications from other  regions.
To test the electronic databases that State uses to help detect fraud, we ran  the names of 67 different federal and state fugitives against State’s CLASS  name-check system. Our test was not intended to employ a representative  sample, and we did not generalize our results to the universe of wanted  U.S. citizens. The test results were intended to provide a firsthand  illustration of a problem that State and Federal Bureau of Investigation  (FBI) officials acknowledge exists.
We selected names of individuals with federal and state warrants from a  variety of government agencies and offices—the FBI; U.S. Marshal’s  Service; Bureau of Alcohol, Tobacco, Firearms, and Explosives; Drug  Enforcement Administration; U.S. Postal Service; and various state and  local law enforcement offices. Many of the names were taken from  publicly available Internet sites, including those operated by the FBI and  Department of Justice.
We verified that all of the individuals were listed as “wanted” in the FBI’s  national criminal database as of the date of our test in December 2004.
In December 2004, we supervised the entry of the name and date of birth  of each of the 67 fugitives into State’s system by an Office of Passport  Services official. Three GAO employees verified each entry’s accuracy.
For each entry, we recorded whether State’s system contained a record  of that fugitive and, if it did, we noted the type of “lookout” that had  been entered, such as wanted person information from the U.S.  Marshal’s Service or a child support “lookout” from Health and Human  Services.
We analyzed fraud referral statistics from the Consular Affairs Office of  Passport Services and the Bureau of Diplomatic Security for fiscal years  2000 through 2004. We reviewed the statistics and verified their accuracy  by comparing select data with the individual issuing offices’ monthly  reports that are State’s original source for compiling these data. Together  with Passport Services officials, we identified the methods used to capture  and compile the data and determined that the data were sufficiently  reliable and generally usable for the purposes of our study. We did not use  data elements that we did not deem reliable.
At each of the 7 offices we visited, we conducted interviews with officials  such as the Regional Director, Assistant Regional Director, Fraud  Prevention Manager, Adjudication Manager, Customer Service Manager,  supervisors, and certain passport examiners. We interviewed some  examiners who expressed an interest in meeting with us and chose others  at random. We conducted telephone interviews with the Fraud Prevention  Managers at all 9 of the offices that we did not visit, using a list of questions  identical to that used in interviews with their counterparts at offices we  visited. We also met with Diplomatic Security agents attached to field  offices responsible for investigating fraud suspected at the offices we  visited. In addition, we interviewed cognizant officials in Consular Affairs’  Office of Passport Services, Office of Consular Fraud Prevention, and  Consular Systems Division; the Bureau of Diplomatic Security; and the  Office of the Inspector General. We also met with FBI and Terrorist  Screening Center officials, including attorneys, to discuss technical and  potential legal issues that might affect interagency information sharing  arrangements with State.
To assess the potential effect of new performance standards, which were  implemented in January 2004, on State’s fraud detection efforts, we  reviewed the methodology and criteria that State used in developing the  new standards. We compared the adjudication processes that were in place  when State tested examiner production capacity with those in place when  State implemented the new standards and against which it applied them.  We interviewed passport examiner union representatives and select  examiners at the 7 offices we visited and the fraud prevention managers at  all 16 domestic passport-issuing offices to obtain their views on the  potential effect of the new standards on fraud detection efforts. We also  obtained views on the same subject from the Consular Affairs Passport  Services officials who oversaw the development and implementation of  and ongoing adjustments to the new standards.
We conducted our work from May 2004 to March 2005 in accordance with  generally accepted government auditing standards.

Comments from the Department of State

GAO Contact and Staff Acknowledgments

	GAO Contact

	Staff Acknowledgments

In addition to the individual named above, Jeffrey Baldwin-Bott, Joseph  Carney, Paul Desaulniers, and Edward Kennedy made key contributions to  this report. Martin de Alteriis, Etana Finkler, and Mary Moutsos provided  technical assistance.

Summary:
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 fiscal year 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.