59

that hearing, bipartisan legislation, HR 4422 was introduced on the House side proposing to
codify E.O. 12612 and 12875. Somewhat similar legislation, S. 2422 was introduced on the
Senate side. Executive Order 13083 was suspended indefinitely. NCSL thanks you Mr.
Chairman, and members of the subcommittee, for giving federalism the kind of attention it

deserves.

My point, however, is that section 656 (b), when placed beside any of the aforementioned
executive orders or legislation, woefully fails the federalism test. Given that most of you have
indicated support for one or more of these executive orders or bills, I suggest that you, therefore,
have more than a foundation for urging passage of H.R. 4179 immediately.

‘Thank you for this opportunity to testify. I would be glad to respond to any questions that you

may have.


122
more or less happened, there was not a debate on the Federal level

As far as the privacy, I think ple have raised concerns that,
uu know, you may already be able to obtain, quite easily, Social
rity numbers. I would think that overarching it may be some-
thing more for Con; to look into. Certainly something we are
concerned with in the States and in Connecticut, we are consid-
ering wi whether or not we may sftivatize the State technology. Pri-
vacy has become a main part of that debate.

ir. GRINDLEY. Mr. Chairman, I would simply bring to you the
fact that 17-year-olds are breaking into our Pentagon systems, into
their data bases. If they have this ca weBt aa aay ere is a pool of
knowledge that has a monetary bent way, shape, form,
or fashion, it will be compromised. And I that is too impor-
tant. There are some valid points, that if someone is unconscious
and you need to know what they are allergic to. It is a slippery
slope. How far are we going to

Mr. McINTOSH. Thank you Hi for coming. I appreciate it. This

has been of tremendous benefit to us, and we will make this avail-
able to the committees of jurisdiction in these areas. The committee
stands in adjournment.

[The prepared statement of NHTSA follows:]


25

Insecure Data Little needs to be said about how insecure even the most protected systems of data
hhave become. Computer hackers have achieved access even to sensitive defense files In 1997, the
Social Security Administration itself was forced to shut down a service it offered on its web site
afier reports that it may have provided unauthorized access to information about individuals’
personal income and retirement benefits on the Internet.

In fact, the SSN is used as a key to unlock all manner of personal information about consumers. An
intemet-based industry has sprung up to harvest and sell personal information accessed through the
‘SSN: auto ownership, creditors, criminal records, driving records, bank accounts and work histories
are all alleged to be accessible. Since Section 656(b) would make drivers’ SSNs more accessible to
state workers harvest the number, and to every person who sees the number on a state-issued
identification document, it will make this problem of protecting personal privacy much more
difficult.

CONCLUSION

‘The SSN was never intended to be relied upon as an identifier. Historically, SSNs have
been easy to obtain because there was no need for a secure card for purposes of administering the
‘Social Security program. The number was used only to track payments into the Social Security
Account. Many duplicate and inaccurate social security numbers are in use.

A national ID system based on the SSN, and the nationalized ID cards that Section 656(b)
would require, pose a direct threat to personal privacy and to the security of personal information.
To forestall such a threat, we urge members of Congress to support H.R. 4197, the Citizen's Privacy
Protection Act of 1998. It would repeal Section 656(b) of the Ilegal Immigration Reform and
Immigrant Responsibility Act of 1996. We believe that the Big Brother proposal which is
represented by Section 656(b) should be stopped now so that further damage to the cause of
privacy, and liberty, is contained.

I will be happy to entertain any questions you might have.


153

‘health plan premium payments

‘The goals of these provisions are to unprove the efficiency and effectiveness of the health care
-rystem by standardizing the electronic exchange of admunustratve and financial data end to
‘Protect the security of transmitted information. The industry estimates that billions of dollars can
‘be saved each year by moving from paper forms to uniform electronic transactions.

‘Asnong the standards that HIPAA directs the Secretary to adopt are four unique identifier for use
in the health care system, one each for: health care providers, health plans, employers, and

. HIPAA also requires HHS to promulgate security standards for organizations that
‘maintain and transmit health information electronically. HIPAA instructs the Secretary to adopt
«existing standards developed by the industry through an open, consensus process whenever
possible.

‘The privacy implications of enabling electronic exchange of health information and of national
identifiers were recognized when these provisions were being drafted. At that time, Congress
envisioned enacting omnibus privacy legislation prior to the effective date of the standards.
‘Congress also included « contingency plan in HIPAA. If a Federal privacy law is not enacted by
August 1999, HIPAA requires the Secretary to issue regulations to protect the confidentiality of
information maintained or transmitted in connection with the standardized transactions listed in
the statute, The Department has no intention of implementing the UHI standard before
comprehensive privacy protections are in place.

‘To adopt the health care transsction standards required by HIPAA, HHS is in the process of
issuing notices of proposed rule making (NPRM) for public comment in the Federal Register.
(Addendum). Where industry standards don't already exist, HHS has been working in close
cooperation with industry to develop such standards. In each NPRM, HHS has proposed
‘standards supported by broed consensus,


148

110 STAT. 3009-719 PUBLIC LAW 104-208—SEPT 30, 1996

Transportation shall make grants to States to assist them
in issuing driver's licenses and other comparable identification
documents that satisfy the requirements under such paragraph,

(3) EFFECTIVE DATES.— .
ef a ee ene ese
sul ‘ion I effect on the
Erthe enactment ofthis Act. date
(B) PROHIBITION ON FEDERAL AGENCIES.—Subpara-
graphs (A) and (B) of paragraph (1) shall take effect begin.
ning on October 1, ), but shall apply only to licenses
locuments issued to an individual for the first time
and to replacement or renewal licenses or documents issued
according to State law. :

(c) Report.—-Not later than 1 year after the date of the enact-
ment of this Act, the Secretary of Health and Human Services
shall submit a report to the Congress on ways to reduce the fraudu-
lent obtaining and the fraudulent use of birth certificates, including
any such use to obtain a social security account number or a
State or Federal document related to identification or immigration.

(d) Feperat Acency DerineD.—For Purposes of this section,
the term “Federal agency” means any of the following:

(1) An Executive agency (as defined in section 105 of title

5, United States Code).

(2) A military department (as defined in section 102 of
such title).

(3) An agency in the legislative branch of the Government
of the United States.

(4) An agency in the judicial branch of the Government
of the United States. coment J


COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
J. DENNIS HASTERT, Ilinois ‘TOM LANTOS, California
CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, JR., West Virginia
CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York
CHRISTOPHER COX, California EDOLPHUS TOWNS, New York
ILEANA ROS-LEHTINEN, Florida PAUL E. KANJORSKI, Pennsylvania
JOHN M. MCHUGH, New York GARY A. CONDIT, California
STEPHEN HORN, California CAROLYN B. MALONEY, New York
JOHN L. MICA, Florida ‘THOMAS M. BARRETT, Wisconsin
THOMAS M. DAVIS, Virgi ELEANOR HOLMES NORTON, Washington,
DAVID M. McINTOSH, Indiana DC
MARK E. SOUDER, Indiana CHAKA FATTAH, Pennsylvania
JOE SCARBOROUGH, Florida ELIJAH E. CUMMINGS, Maryland
JOHN B. SHADEGG, Arizona DENNIS J. KUCINICH, Ohio
STEVEN C. LATOURETTE, Ohio ROD R. BLAGOJEVICH, Illinois
MARSHALL “MARK” SANFORD, South DANNY K. DAVIS, Illinois
Carolina JOHN F. TIERNEY, Massachusetts
JOHN E. SUNUNU, New Hampshire JIM TURNER, Texas
PETE SESSIONS, Texas THOMAS H. ALLEN, Maine
MICHAEL PAPPAS, New Jersey HAROLD E. FORD, Jr., Tennessee
VINCE SNOWBARGER, Kansas —
BOB BARR, Georgia BERNARD SANDERS, Vermont
DAN MILLER, Florida (Independent)

RON LEWIS, Kentucky
Kevin BINGER, Staff Director
DANIEL R. Mout, Deputy Staff Director
Davin A. Kass, Deputy Counsel and Parliamentarian
Lisa SmitH ARAFUNE, Deputy Chief Clerk
Pui. ScHILIRo, Minority Staff Director

SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH, NATURAL RESOURCES, AND
REGULATORY AFFAIRS

DAVID MCINTOSH, Indiana, Chairman

JOHN E. SUNUNU, New Hampshire JOHN F. TIERNEY, Massachusetts
J. DENNIS HASTERT, Ilinois BERNARD SANDERS, Vermont
JOE SCARBOROUGH, Florida HAROLD E. FORD, JR., Tennessee
JOHN B. SHADEGG, Arizona PAUL E. KANJORSKI, Pennsylvania
STEVEN C. LATOURETTE, Ohio GARY A. CONDIT, California
VINCE SNOWBARGER, Kansas DENNIS J. KUCINICH, Ohio

BOB BARR, Georgia i
PETE SESSIONS, Texas

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California
MipReD WEBBER, Staff Director
KAREN BARNES, Professional Staff Member
ANDREW WILDER, Clerk
ALYS CAMPAIGNE, Minority Professional Staff Member

ay


Docket No NHTSA-98-3945
Saly 31, 1998
Page 4

ni “bare bong alnsnos ov encicon aoa Ghneue: 1331 6@)
srates that “before wssuing a hoenss or document each state shall (1

sin of the social secunty by every fara mor Socunent”
We that the above statement is not true whea the does not have a social
security number and signs a certifying statement to that effect, purruant to §1331.6 (2)
(@, thin i comec, hen 1931.6 ( (1 should sate “ules the pplioant does ot have

1 social security number and signs a ortifying statement to that effec, pursuant to
913316 @) @)."

Further, the procedures are unclear a to the process to be followed after the
spplicant signs the certifying statement, We easume the intent isto allow the ismance of
‘a license without a social security number once the certifying sistemeat is signed;
however, this should be specified in the procedures.

‘While there are variations between Virginia's present list of acceptable
documentation and the proposed list of documents in Appeadices A through D of the
rules, we do see that there is merit in a uaifocm, national list of scceptable documents t

documents listed én the appendices. We suggest, therefore, that (i) the rules provide for
‘waning forthe states on an oa-going basis at federal expense, to be given by INS, The
"aling shou ot imum lode istrction onthe corent version as wala moet
versions of each document, and instroction on recognizing a genuine document as well at
pousble forgeries) the INS be responsibe for providing ths saa wha comet
version of each INS documeat mentioned; and (i) the INS be responsible for supplying
the states with a new version whenever changes are made to a particular document.

‘We note thatthe proposed rules state thet the President included a request for
$325,000 in his facal year 1999 budget foe grants to asvit the states. Virginia would
certainly be interested in participating in any grant program: however, we calculate our
ors for the aew divers icease to bein excem of SI tilion. Thin ont clues he
‘cont to add a bar code to the driver's license, as wal! as bar code readers and persoaal
‘computers to support the ber code readers. In addition, we estimate that it will cost

spproximastely $50,000 to $90,000 to masich all existing records with SBA and
(here will be further contimuing oo-line costs of approximately $18,000 per year to match
‘spplications for new driver's Hoenses.


67

A Cat (A FEA YEARS YCCNGEA CR A FEW YEaas

S7 YSU SEN'T NEED TO Go THRCUGH THE GRAVEYARDS LOCKING

*S SEEN CCNE THIS WAY AND IT WCRXS, BUT THERE Is ay
Go Tc THE MAIN LIBRARY GF ANY Lace CZTy, CvTvzRs:

CR TC A PRINGEPLE NEWSPAPER CFFICE AND TAKE A LOOK

TSE Cis NEWSFAFEAS RECIRCED CN MICORFILM. CHCCSE A YEAR TU wHr

YOU WECLD HAVE SEEM NO CLOSER TEAN.TEN (101, USING YOUR AGZ AS a

ROCKING FOR ARTICLES Ty warce

SF YSUR $Ex, RACE AND FRESIIT AGE Was

= FIRE, CR SRCWHIING. THE VERY BIST Fes-

SIM WEISHE TSE ONTIRE FAM=: Wag Wi?ES cot,
EMEMSEATS CF SEEN BY NCH

£ BIRTS CERTIFICATES, '$ RECCMMENCES THAT

BAZ xccszo, BRCWNSVILIE, SAM ANTCNTZO, LAREDO OR CoRFUS

22 CEEZ, AGAIN GSING THE SPANISH PERSCN'S GENEPAL DESCAI?-

TICM, AGE, ANC BF SURE TO FING A spanisi RACE CHILD FOR THEM.

ALSC, CHECK THE CEITUARIES TCO, ESPECIALLY FOR DEATHS OF CHILOREN

GCE: HE AGE CF FIVE (5), GNCEA ‘THIS AGZ, AT LEAST 90% CF TECSE

WaO DIED OID SO IN THE SAME CCUITY THEY WERE BORN TH. MARE SURE THE

GATE CF THE NEWSPAPER IS SUCK TERT TEE AGE OF TEE DECEASED AND YCCR

AGE CR THE SPANISH PERSCH'S ACE AT TEE TIME OF RIS DEATE REFLECTS

YCUR AGE NCW. .

IN WRITING FOR THE BIRTH CERTIFICATE, OMLESS THE ARTICLE OR OBITUARY

STATES WHERE THE CHILD WAS BORN, ASSUME THAT BE WAS BORY IN THE SAKE

COUNTY WHERE HE OED. REQUEST A CERTIFIED COPY EITHER AS THAT PERSCY

‘OF THE BIATH CERTIFICATE, OR AN EMPLOYER OR INVESTIGATOR WHO REQUIAES

IT IN CROER THAT YOU MIGHT RIRE THAT PERSOM, APPROVE HIM FOR A SPECTAL

TYPE OF CLEARANCE OR WHATEVER. WCW: IF THAT CCONTY MAS HO RECORD OF

‘THE QIRTY WHEN YOC WAITS, TRY EITHER A LARGE NEIGHBORING COUNTY OR JUST

sues ANCTHER NAM! YOU WILL FIND THOUGH THAT MAMY WEWS?APERS, PARTIC~

ULARLY IN RURAL AREAS, ARE AMAZINGLY COMPLETE IN THEIR DETAILS OF TRAGE-

DIES TN WHICH A SPECTACULAR ACCIDENT KILLED SEVERAL OR ALL THE MEMBERS

EVERYTHING YOU WEES TO HVCW WILL BE RIGHT THERE IM FRCIT



151

¢ DEPARTMENT OF HEALTH & HUMAN SERVICES

‘Statement for the Record
by

William R. Braithwaite, M.D., Ph.D.
Senior Advisor on Health Information Policy
Office of the Assistant Secretary for Planning and Evaluation
U.S. Department of Health and Human Services

for the
‘Subcommittee on National Economic Growth, Natural Resources, and
Regulatory Affairs
of the
House Committee on Government Reform and Oversight

September 17, 1998


78

uesause or ene wnas

one
S UF CCMMCM SENS2 AND ACDAUNTASS

HI wast

cae
THE CF THE CREDIT CARD COMPANIES. $c AES
ACVISED, THOUSANCS GF DOLLARS ARE THERE FOR TOUR PLEASURE

Seuss THE

ARE REACHES, DESTROY THE CARD ANG RETSE
SS AND YCU WELL FIND THAT YCU WILL NEVER HAVE ANY

AGAIN, USING A FORWARDING ADDRESS AGENCY, YCU s.

ATTORNEY CR BUSINESSMAN CR INVESTIGATE
IT WON'T WORK. 1: ARE A TOTAL CF (50)
R VITAL STATISTICS
YOU CAN ALWAYS USE THE NEWSPAPER SYSTEM FOR THE DEAT:
HE PROPER CERTIFICATE. ALWAYS DCUBLE

YOU ATTEMPT TO GET THE NECESSARY DOCUME!

OSTAIN IDENTIFICATICN.

Ge LTaRARY

So 12 THE NewsParcs o7i

AL GOOD PROSPECTS YOU CAN USE

2. FIND §'
APPLY FOR THE BIRTH CERTIFICATE (WAIT FOR ITS ARSIVAL IN THE MATE

4. ABELY FOR THE SOCIAL SECURITY CARD (WAIT UNTIL IT ARRIVES THEY GET

CRIVERS LICENSE)
APELY FOR DRIVERS LICENSE (NEW MEXICO & KANSAS - SAME DAY SERVICE)

5.
6. THE BANK ACCOUNTS (3) NEED $300 TOTAL
7. YOUR PAYMENTS ACCCROING TO THE ECCKLET (TRIPLE AAA RATING

iy 30 Gays)


15

STOLEN IDENTITY

Testimony of Marvin Young, Jr.

Before the Subcommittee on National Economic Growth, Natural Resources,
and Regulatory Affairs

September 17, 1998

ost my credit record and my good name, but at least managed to avoid being arrested
for crimes committed by an imposter. In one month, my imposter opened up 40 accounts in
my name. It's a year later and I still can't get a drop of credit. I came home from work one
evening and found a certified letter from the Sacramento police that changed my life. There
‘was a warrant for my arrest for check fraud. I nearly fainted. That was in 1991. Seven years
Jater, I'm still fighting to clear my name, allegedly stolen by a former housemate. Tm having
trouble explaining who I am. He took over my life. I just sold my house and I can't buy
another one. I've worked hard and never made a late payment in my life, but this other guy has
just messed up everything for me.

‘The person who stole my identity has been arrested several times, but apparently finds
‘my name too useful to resist, In the Sacramento case, I could prove that I was at work at a San
Francisco bank the day the fraudulent checks were written. But my problems were far from
over. Anthony Maurice Phillips, 34, who was my housemate for a few months in 1989, had
allegedly stolen my identity and run up debts around the nation. My case began in 1989,
shortly after I moved to the Bay Area from Mississippi. Philiips, my housemate, allegedly
asked to see my Mississippi driver's license photo and covertly copied some of my personal
information, including my social security number and date of birth.

From 1991 to 1993, I worked to clear my name, writing more than 100 letters and
checking my credit report regularly. He was quiet until August of 1997, then he went on a
rampage. In one month, he opened up 40 accounts in my name, He was all over Atlanta,
Florida, Washington, D.C. and Minnesota. Phillips was finally arrested in Robbinsdale,
Minnesota.


127

corresponding portions of the proposal is to emphasize that the
notice follows the requirements set forth in the Act.

To ensure that the rule would be compatible with state
systems, Congress directed the agency to develop the rule in
consultation with the American Association of Motor Vehicle
Administrators (AAMVA), the organization representing the State
driver's licensing agencies. In developing its proposal to
implement these requirements, the agency consulted with AAMVA at
every step of the way. The appendices to the proposal, in which
the agency lists a variety of documents for use in identifying
applicants, are derived from a model program developed by AAMVA.

‘The agency is now receiving comments on the proposal, having
xeopened the comment period in response to a request from
Representative Barr. As of thie date, the agency has received
more than 2,000 comments, and anticipates receiving many nore.
Since we are still receiving comments on the proposal, we will
not be able to address the agency's response in this statement.
However, we can give you a brief description of the comments we
have received to date. The AAMVA, with whom we developed the
proposal, affirms in its comment that the proposal reflects the
recommendations AAMVA made at the various stages of the
proposal's development and that the proposal accords with the

needs of State driver licensing agencie:

We received comments from individual State agencies, State
legislative organizations, and other organizations familiar with

the driver licensing process, as well as organizations with an


133

I would like to thank the subcommittee for holding today’s hearings on the
establishment of a national identification card. I believe today’s hearing will
sharply focus the American people's attention on an issue which may have major
consequences for each and every citizen now and for many decades to come.

In 1996, the House of Representatives had a lengthy debate on the Illegal
Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA). As
passed by the House of Representatives and sent to the U.S, Senate, the HRIRA
did not contain any provision for federal mandates to implement a National
Identification Card.

‘The Senate added a provision to the immigration legislation -- Section 656 ~ in
the Conference Committee that very explicitly provides for National 1D Card
Program to begin moving forward and to be completed in October 2000. This
provision was never debated in the Senate or the House, in fact, it was never
discussed publicly. The House never voted on this provision with full debate on
the constitutional and other legal implications of developing a national
identification card.

Eventually, the Immigration Bill, including Section 656, was placed in the
Omnibus Consolidate Appropriation Bill for Fiscal Year 1997, which was passed
just prior to adjournment in the fall of 1996.

The National Highway Traffic Safety Administration (NHTSA) of the
Department of Transportation proposed rules that were published in the Federal
Register on June 17, 1998. These proposed regulations explicitly set forth a plan,
now underway, directing that only identification cards with the data in the form
and substance specified will not be acceptable for any federal programs and
benefits.

The process of developing this national identification card is predicted not only
on what will be necessary for a “federal benefit cards,” but also tells the states
they must also, for their driver’s licenses or similar identification cards, include
a list of specific information and a form acceptable to the federal regulators.
The heart of this identification system will be Social Security numbers.

Recently, the Department of Transportation has promulgated a rule to provide
the basis for a national identification card. It does this in part by directing that


73

BER: PLACE CF RESISENCT NEVE? CEEIXIS $C GIVE A Goco cus
RE YOU CaM RECEIVE YCUR MAI. 0 NCT CSE A -P{C. BCX NUMBER FCR
A RESIDENCE aconess.

OM THE APPLICATION Forms tuEAz A PLACE FOR PERSONAL REFER-
ENCES. AGAIN, OC WOT CONCERN Y¥CURSELF, BECAUSE THESE Too ARE EVER
CBECKE>~ ME CNLY REASON THEY ASK YCC FOR THE IS TO MAKE YOU FEEL
RESPCNSIELE FCR YOUR ACTICNS; A PLAY CH THEIR PART. ECT CO PRCVIDE
PERSONAL REFERESCES; GIVE THEM.A CCCTCR, MINISTER. YSU CAN
MAMES FRCM TEE PRCNE ECCK IF MECESSART BECATSE THEY co
Tent.

MAIL, WEICH IS aves

SCARE APFLISATISNS CAN 3 SALTS
GAT ASK FOR, SUF7LT TBE REGTT:
= 32 DELIGETES To GIvE oC THE CARDS. SELCW ARE A FEa
CREDIT CARES FCR PURCZASES OF WHATEVER vOut

WaNT TS BUT.

1, WEEN A CLERK ACCEPTS YOUR CARD TEXT YOU PRESENT FOR PAYMENT CF .
AYE MERCHANDISE, THE TITLE TO THE'GCODS BELONG TO YOU. LEGALLY,
YOU ARE PAYING IN FULL, MOT REQUESTING A LOAM. WHAT THIS MEANS
IS IMPORTANT - YOC CAN NOW SEZL,- TRADE OR EVEN ZORRCW AGAINST _
YOCR NEd PURCHASES OR PROPERTY WITHCUT ONE WORD TO THE CREDIT
CCMPAMY. THEY HAVE EXTENDED YOU CREDIT ON THE BASTS OF YOUR
ABILITY TO REPAY, MOT ON TEE MATURE OF THE PURCHASE OR AMCUNT
GF THE PROPERTY YOU OWN.

2. [E TRE CASE OF MASTER CARD AND BANK AMERICARD, YOU CAN OWW AS
MANY OF THESE CARDS UNDER TUE SANE MAME, AS THERE ARE BANKS TO
ISSUE THEM TO YOU: ROWEVER, TUEY MOST BE OLFYERENT BANKS AND MOT
BRANCHES OF THE SAME'BANK. IF YOU QUALIFY AT ONE BANK FOR THE
AZCVE CARDS, CCHMON SENSE WILL TELL YOU THAT YOU CAN APPLY AT
ALL THE OTHER ONES YOU WANT TO AND GET THE CARDS. ALL THEY WANT
IS. YOUR BUSINESS ANO BY EAVING TOUR (4) SUCH CARDS, WILL 00 THIS.
WITH BILLING DATES A WEEK APART, YOU CAN EASILY GET ($0) DAYS
FREE CREDIT, ADO ANOTHER (4) AND THE BANKS WILL CARRY, YOU FREE
FOR (90) DAYS. THE TRICK.IS IN USING THE CARD WITH TRE MOST



32

comment on their own medical records. Unfortunately, this perception is
false. The danger with this one-way system 1s that once personal
information is collected for one purpose, the temptation to use it for
another is often irresistible.

Health privacy is one of the most important privacy issues facing our
nation. Protecting patient privacy is critical to improving health care, and
fostering valuable public health initiatives. The need to protect patient
records is urgent, notably, due to the time limit in the Health Insurance
Portability and Accountability Act of 1996 (otherwise known as the
Kennedy-Kassenbaum bill} which requires Congress to pass health privacy
legislation by August 1999, and if Congress fails to act, the law directs the
Secretary of Health and Human Services to promulgate rules of
enforcement. This requirement was mandated under a provision called
“Administrative Simplification,” which was, until it made the front page of
the New York Times in July 1998, a little-known amendment to the 1996
Act. Last year the Secretary issued her proposed regulations which had
several alarming features. Most disturbing is that the proposal will allow
law enforcement officials to obtain unfettered access to patient medical
records, without first getting patients’ permission.

Additionally, there are three aspects of the Secretary's proposed
regulations that pose the gravest threat to medical privacy:

« Computerization: Citizens may be denied the option of a "paper only’
patient record without risking denial of insurance or loss of benefits,
forcing everyone to participate in a huge computerized network. The
model for computerization of patient records is the credit bureau
industry, whose mammoth database for consumers financial
information have been plagued by inaccuracy, unauthorized
access, and fraud.

No informed consent: Secretary Shalala has said that privacy rights
are not absolute, claiming that ‘it's not always possible to ask for
permission” to use a patient's record. But Americans think differently.
According to a Time/CNN poll, 87 percent of Americans demand to
be asked for permission every time medical information about them is
being used.

National I.D. Number: The regulations include a tacit or explicit
endorsement of the establishment of a "unique health identifier" - a
de facto national |.D. assigned by the government or business and


‘ash candor as ono a national ID cand,
athe, itmaybe anefeem of seething eine
canying sey: your eter eran,

Several sate arrow in ot pst thigh tech
escent, New esey i sting a0 nabs
“art vrs” witha ombud hip that ald

nce an fr ataing ater ate Ucoens,sch at af
‘permit. The ca might asa be wed for ctr:

‘whats probably the mart inviting and feat intimidating
ofthese search sites. There smo ign up processor coun:
saitment, and alo its services oe offered individual, for
fat foe that typicaly ranges from $20 10 40, which you
‘ean pay for online with credit ard.
‘Not colacidentay, AIN manages one ofthis emerging
Gategoy' better inown resellers of public record services:
theofficial sounding Laternet Department of Motor Wehi-
det or LDMY. You en’ renew your own drive’ Boense
atte LDMY, but ytcan take & peck at romeone bes,
_long with hit or ber driving history. Fora $20 fe, you aa,
‘earch any one ofthe 50 eae {phat District of Columbia)
‘moter vebiclas databases, Many states requie that you
Inno the drive’ icense cumber to conduct a search, and
some requir a date of birth. But you may beable to get
both of thee pices of information a the LDMY, toa, with
12535 licenae plate seach, which requires only a tag num
ert cetrew all rehic (The

(eee rar, sch a wef
att Wee Jersey hoped to Bega sing ech

esiguted merchant,
‘Tras ad Pervytvaria hove sadly

snore modest vest of the gia coven Ue Teas,

‘new ecto ensig syst captures a vary at

(perinal nforation, facing sgt. gaits,

ad igftalpotats, The Hoanae at has meg

|: vach profound sample, You fl out a shot form ane,
‘hich inchudes your name and phoae wumber—yu're not

Hundreds of
researchers on the

Web will gather
information for you

—OF ON you.

‘anonymous asthe searcher, either. Searches generally take

‘one to four day to complete, and the rent ar sent pou.

via cand o far Ws nt fat, but there reno wating Ines.
“The drivers Heemse search returns the kindof infr-

deprtrent
‘ermal ons tome winched —right down eels
«ge


39

verification system. Even agencies as seemingly mundane as the General Services
Administration and the U.S. Postal Service are embarking on programs with regard to
digital signature standards that should undergo close scrutiny by Congress and
probably be terminated immediately.

© Fourth, government policy should presume in favor of individuals managing their
‘own personal information in response to market incentives. For instance, parental
control of education obviates much of the supposed “need” for national educational
databases. Medical savings accounts for individuals make a unique health care
identification code for each American much less attractive as a way to stop fraud in
government-financed healthcare.

There is simply too much “information pollution” that goes on in Washington. The all-
to0-obvious bias of a national capital is to implement policy by creating centralized
databases and credentialling systems that control citizens rather than letting them manage
their own affairs. If this taxpayer-friendly Congress wants to do future Americans a favor,
it will systematically design its policies in such a way that they require little or no
personal information from citizens to implement. A sensible place to start doing this is
the tax code. Just as America’s great industrial companies have learned to engineer waste
out of manufacturing processes that once produced toxic by-products, so too Congress
must engineer the decentralized, voucher-based systems of the future to operate without
invading citizens’ privacy.

1. National ID Card Systems: A Public Choice Perspective

Public choice theory powerfully illuminates the reason why the United States finds itself
on the verge of implementing a national I.D. card through the DOT regulations almost by
accident and without any serious debate of the consequences. The historical record shows
that seemingly simple policy changes made by bureaucrats with no goal but their own,
short-term administrative convenience in mind can have profound results.

I cite you the case of income-tax withholding, adopted as an expedient measure to finance
World War Il. Ail that money flowing to Washington certainly helped win the war, but
the spigots once opened were never tumed off, and over the long term the result has been
an enormously larger government and burden of taxation that we are only now beginning
to constructively reverse. Similarly, in the 1970's, European governments began
adopting the value-added tax as a supplement to their existing tax systems. As a result,
European governments have grown from rough parity with the United States in relative
size to being roughly half again as large. Today, all levels of government absorb about 35
percentage points of gross domestic product in the United States—far from Socialism but
not comfortable either. Had the United States chosen a European tax policy, we might be
in the same position as statist France, with government absorbing more than half of all
economic output and reaching for more.


163

ovement Refer de Ovrmgtt Commune
Sennouier 15, 1998

‘There is no law requiting a state-issued driver's license to be the principal form of
identification. But today, businesses, industry, and the American public have come to accept the
license as a valid and reliable document, What other sogments of the American public do with
state-iasued driver's licenses is not under the control of the DMVs. Rest assured that the goal of
the DMVs isto keep unsafo drivers off the road—aot to create a “paper trail” of every
individual's comings and goings. However, a state issued driver's license offers two guarantees:
thatthe individual is qualified to operate a motor vehicle in that jurisdiction, and that the
ihdividual holding the license bas substantiated his or her ideasity.

‘The Association would appreciate the opportunity to participate in any further discussions
focusing on the use of the driver's licenses as a national id. card. If there is any additional
information we can provide the Committee, or should you have any questions, please fee! free to
contact Linda Lewis, Director of Public and Legislative Affairs, at (703) 522-4200.

Sincerely,

ce: The Honorable Rodney Slater
Secretary of Transportation


63

cane it is kind of a roundrobin type thing. But I think we will get
to it.

I had someone hand me a training manual from Nigeria that ex-
plained how to come to the Unit States, how to assume some-
one’s birth certificate that has died within 10 years of your age how
to assume their identity, and get Social Security numbers.

From that, I did a little research in my own State and I found
out that the State did not mark “deceased” on birth certificates. I
asked why and they said, no one had ever asked them to. I passed
legislation subsequently that requires the State of Georgia now to
stamp “deceased” on birth certificates, and they have said it will
save millions of dollars from fraud cost simply from that one word.

I am not one that is going to propose national data-bases, but if
you were going to have one, maybe a national data-base of de-

would be the appropriate way to go.

Mr. McINTOSH. Maybe private sector will create that as well.

Mr, GRINDLEY. Maybe. But I think that is an important safe-

ard.

Mr. McINTosH. Have you ever had anybody in your State held
liable for identity theft r the person had died?

Mr. GRINDLEY. Not to my knowledge.

Mr. McIntosH. Thank you, Mr. Grindley. I appreciate it. Thank
yu for your good efforts at the State level. By the way, do you still

we that training man

Mr. Grinptey. t do in my files at home.

Mr. McINTosu. If it is not difficult, please send us a copy of that,
I would like to put it in the record.

Mr. GRINDLEY. I can do that.

(The information referred to follows:]


47

PUBLIC LAW 104-208—SEPT 30,1996 110 STAT. 3009-718

(I) whose birth is registered in the United

States; and
(B) that—

(i) is a copy, issued by a State or local authorized
custodian of record, of an original certificate of birth
issued by such custodian of record; or

(ii) was issued by a State or local authorized custo-
dian of record and was produced from birth records

tain. such custodian of reco1

(b) State-Issuep Drivers Lic ‘AND COMPARABLE IDENT!
FICATION ENTS,

'1) STANDARDS FOR ACCEPTANCE BY FEDERAL AGENCIES.

(A) IN GENERAL—A Federal agency may not accept
for any identification-related purpose a driver's license,
‘or other comparable identification document, issued by a
State, unless the license or document satisfies the following
requirements:

(i) APPLICATION PROCESS.—The application process
for the license or document shall include the presen-
tation of such evidence of identity as is required by
regulations promulgated by the Secretary of Transpor-
tation after consultation with the American Association.
of Moto) is ini:

(5) Except as provided
in subparagraph (B), the license or document shall
contain a social security account number that can be
read visually or by electronic means.

(iii) ForM.— license or document otherwise
shall be in a form consistent with requirements set
forth in regulations promulgated by the Secretary of

. Transportation after consultation with the American
Association of Motor Vehicle Administrators. The form
shall contain security features designed to limit
tampering, counterfeiting, photocopying, or, otherwise
duplicating, the license or document for. fraudulent
purposes and to limit use of the license or document

npostors

(B) ‘The requirement in subparagraph
(AXii) shall not apply with respect to a driver's license
or other. comparable: identification document issued by a
State, if the State—

G) does not require the license or document to
contain a social security account number; and

- Gi) requires—

(1) every applicant for a driver's license, or
other comparable identification document, to sub-
mit the applicant's social security account number;

(iD) an agency of the State to verify with the

Social Security Administration that such account

(Cc) Beaman : “the retary of Trai hall

EADLINE.—The Sec of Transportation s!

promulgate the regulations referred to in clauses (i) and

iii) of subparagraph (A) not later than 1 year after the
date of the enactment of this Act.

___ (2) GRANTS TO STATES.—Beginning on the date final regula-

tions are promulgated under paragraph (1), the Secretary of


35

Mr. McInrosu. Our final witness on this panel is Mr. Grover
Norquist, who is president of Americans for Tax Reform. Mr.

forquist.

Mr. Norquist. Thank you. I have prepared remarks which I
have shared in writing. I will just open up by saying when I got
my driver's license in Washington, DC, and said, “I would like, as
1 understand is my right, to give you a different number than So-
cial Security.” The lady said, “You want a driver's license or what?”
I waited for.a while, and I eventually gave up and gave her my So-
cial Security number because I sort of, at some point, wanted the
driver’s license. I was not told there was an option. I was told I was
wrong in thinking that this was an option.

I serve as president of Americans for Tax Reform. We are a na-
tional tax bureau organization and we try to reduce the size and
scope of government at both the Federal and State level. But over
the last 12 years, we have been actively involved in opposing all
efforts to move toward national ID is or national ID systems.

It seems to me there is sort of a bad game of jeopardy going on.
The answer always seems to be the same even though the ques-
tions change. Immigration law, let’s have a national ID card.
Health care, let’s have a national ID card with all sorts of informa-
tion. Tax policy, let’s have Social Security numbers on dependents.
Deadbeat dads is another reason for a national ID card. Now driv-
er’s licenses. There is always a new reason. It is always the same
answer. And the answer is more power and information flowing to
Washington.

I think it is imy t to remember that when you hand the gov-
ernment more information and more control, they don’t necessarily
use it in the way that they first sold it to you. The Withholding tax
was a tempo! measure to t World War II and it has been
used to expand State power in the United States. The value-added
tax in Europe was sold as a way to rationalize a whole series of
excise taxes, and became an engine for government growth and a
vacuum cleaner for resources.

In Europe, even the Brady bill and the effort at Instant Check,
which we were assured was the way to move away from keeping
data, the government actually temporarily will have data on who
buys a gun. And now they want to keep that data. The whole thing
was set up so the government wouldn’t ever have it. There is a
fleeting moment when they do have it. And now the Clinton admin-
istration is coming back and saying they want to hold on to it for
months. Somehow, I guess months will turn into a longer period.

This is in keeping with a couple of threats to American privacy.
We have seen Janet Reno suggesting to the sroup of eight justice
ministers last December that we put a unique identifying tag on
over a packet of data on the Internet so that the police can track
things as they go through the Internet, quote, “the same way we
tag explosives.”

The FCC has turned down a Reno request to do what other coun-
tries have done.

Mr. McINTosH. What is a packet of data? Is that e-mail?

Mr. Norquist. It is e-mail. It is the whole kit and kaboodle. Of
course, the present legislation that the Clinton administration has


66

RAVE HIG CFFISE AND FILES aT TSE CSUNTY SEAT. A QUICN CHECK oF TEE
ATLAS CR GSCE ENCYCLCFEDIA WILL TELS YOU WHICH CITY GR TOWN THrZs rs.
IG YCUR NEW MAME SEEMS TCO DIRECT OR “UP FRCNT*, THEY |
UCH AS THAT OF AN ATTORNEY OR AN INVESTIGATING
ELUSNG THEM Y¥CU WANT A CERTIFIED COPY CF THE BIRTH CEaT=-
FCR CUR COMPANY'S GRCUP LIFE INSURANCE POLICY GR ¥CU ARE RE-

NG A CZPY CERTIFIED CF SO-aND-£0'S BIRTS CERT:
Y CLEARANCE. ALWAYS INCLODE THE FEE, You WILL GIT Iz rac,
SCCUMENTS ARE ALWATS AVAIIARIIZ. cr

33 ASRIZ. PUBL

EEE RECTREED Tt A LAR:
THIS WAY. aLTScUGH f-¥OTLS ato
SOOTHE PERSCNAL APPEARANCE, IF YCU ARE GOING AFTER Scuecuz tric
WAS FROM A RORAL AREA, THERE IS ALMAYS A GOCD CHANCE THE CLERK MIGHT
BRATZ MICWN THE PERSCN CR EAVE EZARD OF MIS RECENT CEATE. REASGH aNd
GOCO CIMMCM SEUSE CN YOUR PART ‘MUST ALMAYS PREVAIL. .

WARY HETECO YOU RAVE TO RENEMSER THAT IF YCU USE THE ataTe
CERTIFICATE OF SCHECNE WHO HAD ALREADY ENTERED “ACULT LIFE", HZ HORE
THAN LIKELY RAD CONTACTED DEPARTMENTS, MAD A-SCCIAL SESuatTY weuszi,
ANC AT SOME TIME, REGISTERED FOR TSE DRAFT. WE MIGHT HAVE BEEN NARSzED
HAD A RCLICE RECORS, OR EVEN POSSIBLY BAD A FEM OUTSTANDING WAANANTS.
CF BIRTH CERTIFICATE IS STATELY “LIGHTWZIGAT* IN THAT
RAVE MUCH ASSURANCE OF REVAINING RIDDEN VERY.LONG. I7 IS
Goce THCUGH, ESPECIALLY FOR A “CHECK MM* OR “CREDIT GAME” OR A WILD
WEEKEND GA FOR CISAPPEARING IN A AURRY. BY THAT TIME YOU ARE READY
FOR THE "MASTER TYPE OF BIRTH CERTIFICATE”, AXO RIGHT HAVE ALREADY
RECEIVED IT IN THE FIRST PLACE OW TRIS FIRST TYPE OF BIRTH CERTIFICATE.
TCCH*'T RECCMMEND USING THIS OTHER THAN FOR ROWING CHECKS OR TEAPCRARY
1.0., RUT RESP IT FOR REFERENCE, OR THAT EMERGENCY YOU MIGHT HAVE.

ESCO - OLD NEWSPAPER METHOD

TNE SIATH CERTIFICATE YCU OBTAIN USING THES METHOD ENABLES YOU TC
ACTUALLY BECOME A PERSON WHO OLED Loc BEFORE RE GOT ENTANGLED Int
THE PAPER MCRASS YOU ARE TRYING TO ESCAPE FROM. AGAIN, MIS BIRTHDATE



Seven Ways to Guard Your
Ontine Privacy .

{WERE 15 WO Wt sap the few of paren fformation
shout you tats naliable one, Much ft cos fom
“pubic ocr” that con legally be ed or ted,
‘at thre are mays to isin the type md amon of
your peronal data that appar odin yu
‘id, Here are seven sgpestions, cafld fom a varity

of ptracy groups and opera:

‘Yu phone mambe on forms, 2k hare your oe
‘unter tap spr fm ail ca.
Dy rt Sc nt er
Dusines and goverment datos rege that
Joutune fb cy tye at fr

mating Wats ad databass Ths sounds to en andy

ed ot afore

Ati. Thera

Sprig up fra serv acing to a pul
‘tion, Foe ramp, aigJb T Jones from,
Jahn 2. oes fo meth Tat wy. you ca hep tek
wh seg yur amet whom, ena they
pling the prin mt tl ur mane
(© rect yur om cote npr ly. Ore coy
nce x ya tom oo mre of the bg ce bo
as Ei (00-6111, TW (00-52-7054) and
‘an Union (316-496-410). You ct ony cect or
seer which recommen, et sa wh ogee #
apy ot yur net ree.
(© your baat conection. Severs tot
‘nd seven we nth en help pote your phy,
{econ ore that ale yo eye your eal send
8 wogh “maar” wich ced bach oy.
(ar et you we bengal what tig ste
praters tow yu ty. [eee hat WP
‘eter Idea cy fra ston |
tae youre row. the te ec Prhacy
roti

otal wot, bt seven srvicer we ea
(ated une would dos they we asd, it tat yo

‘estrictions nod ongan donor sahat—end 9 ae any black,
smacks oo one's driving recon. This can inchade speeding

5 Certara
tan welcome patcpation ~C2.

‘be wil retriwe a Social Security mumber if gven a name
sd addres, whe mother fads information on the nine
toe des,

andthe tes and of thee vos nearest
lations say alo include drug x alcohol elated comic
‘ons, and court pleadings and penalties,

‘Such services acem to have taben ons quiet popularity.
AIN reports that ts We site receives about 80,00 “page
views” per dey—a very bury pace even by inflated Interet

‘But AIN is hard alone in ishing out sal portions
‘of perronal data to anyone with a Vise cand. Atleast a
dozen Web-based services wil ke creditcard orders on-
Hine for such information, and macy roe thet advertise
‘sir services on the Web wil do 20 by phone ot fax. Nex
‘ional Locator & Dats for ample, ci to have acces
10 950 milion records and lets you order more than 40 “i+
formation brokering” services from ts Web rite. One dat

age

taking.
led toy Pere mal ft, dd of
‘te invertigaton, public records researchers and credit.
checking tervices onthe Web sre wing todo the hut-
ing and gathering fr you ar c2 you.

"Where does alle ths lem your sense of primey?


166

incorporate secunty features against counterfeiting and incorporate the applicant's Social
Secunty account number (SSN). However, itis important to recognize that the requirement
was not for the display of the SSN on the driver's license. The states, if they choose to do so,
may simply collect the SSN—most states already do so—and simply archive that information
after verifying with the Social Security Administration that the number was valid and issued to
the driver’ license applicant. The point isto try to stop the use of fraudulently-obtained drivers
license.

The new regulations proposed by the National Highway Traffic Safety Administration to
implement this provision are intended to provide for adoption of the new secure driver's licenses
by October 1, 2000, the date specified by IIRAIRA section 656(b).

WHY DOCUMENT SECURITY IS NECESSARY

‘The Immigration and Naturalization Service (INS) conservatively estimated the number of illegal
aliens resident in the United States in October 1996 at 5 million and the annual net increase in
that number to be about 275,000 per year. This suggests that the current number would be about
5,825,000 illegal alien residents. Further, the INS estimates that four out of ten new illegal alien
residents enter the country legally and then remain illegally, while the other six in ten enter the
country illegally.

Those enormous numbers understate the problem. The fact is that the illegal alien population
would be much greater if the Congress had not enacted the IRCA amnesty for illegal aliens in
1986. That made nearly three million illegal aliens in to legal once when they were given the
chance to apply for legal residence. Congress promised this would be a one-time amnesty in
exchange for meaningful deterrents to illegal immigration. This process of wiping the slate clean
was intended as a fresh start to a period in which further illegal aliens would be discouraged from
coming by the absence of job prospects. Secondly, the number is understated because it does not
include illegal aliens who have been in the country for less than a year or all those who are in the
country for periods shorter than a year. Yet those aliens have an impact on wages, on emergency
medical services, on police work and schools, to name just a few aspects.

‘The problems associated with illegal immigration are numerous. They include not just violation
of our immigration law but also harm to our citizens and legal residents. Some of the more
serious aspects include wage depression and deteriorating working conditions for our poorest
citizens, drug trafficking, violent crime and sweat shop exploitation. In addition, unless we have
control over our immigration policy, we have lost a major element in shaping the future country
that we will leave to our children.

HOW WILL SECURE IDENTIFICATION HELP?
legal immigrants continue to pour into the country because they anticipate that they can find
jobs and benefits that will pay them much more than they were able to make at home. They may
also anticipate the opportunity to raise a family in a society of greater opportunity, but that
depends on their being able to find work.

If they are denied work by an effective system of identity verification, as intended by the IRCA
legislation in 1986 and as called for by subsequent national commissions, they will be
discouraged from setting out on a journey expected to result in failure. When that occurs, illegal

3


125

an additional 22

year. The secondary document list includ
documents that serve to confirm the applicant's identity,
including a photo driver's license that has been expired for more
than one year. Together the documents would establish the
applicant's identity, as required by §656(b) .

The second requirement concerns the use of social security
numbers, either on the documents or as part of the application
process. §656(b) (2) (A) provides that

{i4) SOCIAL SECURITY NUMBER.-- Except as provided in

subparagraph (B), the license or document shall contain a

jocial security account number that can be read visually or
by electronic means.

wees

(B) EXCEPTION.-- The requirement in subparagraph
{A) (44) shall not apply with respect to a driver's
license or other comparable identification document
issued by a State, if the State-

(1) does not require the license or document to
contain a social security account number and

(44) requires-

(I) every applicant for a driver's license,
or other comparable identification document, to
submit the applicant's social security account
number; and

(II) an agency of the State to verify with
the Social Security Administration that such
account number is valid.

The proposal would not require a State to place the social

security number on driver's licenses and identification

documents. A State may do so, but need not. The notice proposes
that a State shall require an applicant to submit a social
security number and that the State shall verify that number with
the Social Security Administration. The verification requirement

would apply to States that use the social security number on


45

Postal Service 1s a regulated monopoly which sull receives extensive indirect taxpayer
subsidies although it 1s now theoretically financially independent of the federal
government. The Postal Service should not be permitted to use its privileged monopoly
status and monopoly rents to cross-subsidize its move into competitive markets that are
already well-served by private enterprise. The Postal Service should deliver the mail,
period. They should get out of e-commerce and indeed, not be permitted by Congress to
attempt entry in the first place.

TV. Policy Recommendations

Time permits me only briefly to suggest some legislative approaches that might be
helpful in stemming tide toward a national ID card system however implemented. 1
would recommend first of all a comprehensive annual or biennial review by this
Committee with supporting research as needed by the Government Accounting Service or
some other research arm of Congress to better document the problem. Other possibilities
include:

* Legislation by Rep. Barr to clarify the Immigration Law which DOT misapplied to the
create the NHTSA Rule setting standards on drivers's licenses.

© Legislation by Rep. Ron Paul prohibiting the use of Social Security legislation for
purposes other than Social Security.

‘® Amending digital signatures legislation now being considered by the House
Commerce committee to prevent federal agencies including the U.S. Postal Service
from establishing digital signatures standards of their own and attempting to impose
them through various forms of industrial policy and regulatory mandate.

© Pass Rep. Bob Goodlatte’s “Security and Freedom through Encryption (SAFE) Act,”
H.R. 695, to scale back outdated export controls on encryption. Today these serve no
purpose but to give government regulators leverage to attempt back-door industrial
policies invidious to personal privacy such as those contained in the original S. 909
and still pending before the House in various substitute amendments to H.R. 695.

In the long run, though, as I noted, the way to prevent Big Government from becoming
Big Brother is to start dismantling Big Government now and systematically reducing the
amount of the personal information the federal government needs to implement its
policies.

An excellent place to start this is in the tax code, where the tax code provisions most
invasive of personal privacy could be targeted for immediate reform. A huge step toward
improved privacy protections could be made simply by abolishing the death tax, which
accounts for less than one percent of federal revenues and yet requires the most extensive
personal information of any tax provision to enforce.


86

Once the fat: has been astablished, the typical scenario is for the
individual to open an account at a bank or S&L. Generally, a large check is
then deposited in the account almost immediately. The checks are often a payroll
chack or an insurance secclement check (insurance scams). These checks are
usually wréccen on Eieri¢ious companies or non-existant people.

Due co sey regulations which restrict the amount of time a bank can hold a
sa ind‘viduals can start draving goney from their accounts

‘This is almcsc alvays done before che check is recuraed co
the inseicution as being bogus. In addition to asking large cash withdrawals,
duals will write checks co merchants for very expensive items suca as
ching, stereo equipment, etc.

aud are by go means novices or sclicary
ained in their craft, eithe:

‘They are oftes co:

es sizce he is highly cautious and detegaces casi

are ng to sources, he is dangerous ard keeps his croops
its threats of violence. He 4s purported to carry an UZI submachine gua in
e crunk Chhis car.

th
Te is believed chac some of the proceeds earned from bank fraud, FTC fraud, and
ether frauds are cent to Nigeria in exchange for drugs (heroin) and guns, which

are then smuggled elsevhere.

Nigerian nationals are playing an ever-increasing role in aarcocics icking
woridvide. They are particutarly involved with smuggling heroin. According to
the Chicago, Illinois Office on National Drug Control POlicy (ONDC?), Nigerians
played an insignificant role in drug smuggling up until 1983. That year, only 17
Slgerians vera intercepted at airports in the U.$.6 Since 1983, however, there
haa bean a rapid increase in Nigerian tnvolvenest iu drug smuggling as evidenced
by a steady facrease in apprehensions and seizur je ONDCP estimates that
over 600 Nigerian heroin couriers ware intercepred vorldvide during 1988, with

Lictle effect on Nigerian suuggling organizations.’ INTERPOL ataciscics show that
king between September 1988 and

over 500 Nigerians vere arrested for drys t=
March 1969 in different parts of Europ



12

my store with their social security number on their check and advise them never to do
that again. A.J. Woodson used my identification in ATM machines and over the
phone. He is a black man and I am a white woman. I was a single new mother of a
nine-month-old daughter running my own business when this came to my attention.
It has consumed and continues to consume a tremendous amount of energy that I have
not and do not have to expend. It has stunted my ability to establish independence.
My daughter is now three-and-a-half years old.

On September 15, 1998 I called the bank which sent me the live loan check
for $2,500 dated June 1998 to ask them where they had gotten the address on the
‘check which was Woodson's. They told me they purchase so many mailing lists there
‘was no was they could track down that information. I went to the post office to
change my address from his to mine again, which I do about every six months, and
realized this could go on indefinitely.


A NATIONAL ID CARD: BIG GOVERNMENT AT
ITS WORST OR TECHNOLOGICAL EFFI-
CIENCY?

THURSDAY, SEPTEMBER 17, 1998

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES, AND REGULATORY AFFAIRS,
COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT,
Washington, DC.

The subcommittee met, pursuant to notice, at 10:15 a.m., in room
2247, Rayburn House fice Building, Hon. David M. McIntosh
(chairman of the subcommittee) presiding.

Present: Representatives McIntosh and Kucinich.

Also present: Mr. Davis of Virginia.

Staff present: Mildred Webber, staff director; Karen Barnes, pro-
fessional staff member; Andrew Wilder, clerk; and Alys Campaigne,
minority professional staff member.

Mr. McINTOSH. The subcommittee will come to order.

Today the subcommittee will examine several recent steps taken
by Cor and the Clinton administration toward establishing a
national ID card. These measures which include a medical ID re-
quirement for uniform driver’s licenses containing Social Security
numbers, and a national data base of all newly hired employees,
among others, move in exactly the wrong direction, threatening the
privacy and security of all American citizens.

The new law, which requires the Department of Health and
Human Services to create a unique health identifier, or medical ID
card, for all Americans would expose an individual’s personal med-
ical records to public scrutiny. As a result, individuals would be
vulnerable to discriminati Fiased on their medical history, they
may be turned down for jobs, and turned down for insurance and
important benefits. A medical history is one of an individual’s most
private records and it merits the greatest degree of privacy protec-
tion.

Vice President Gore has indicated that the administration does
not intend to move forward on establishing a medical ID until the
proper privacy protections are in place. Now, we in Congress need
to make sure that the privacy legislation enacted truly is adequate.

One of the National Highway Traffic Safety Administration’s lat-
est proposals apy to create a de facto national ID card. This
regulation says that a Federal ney may only accept, as proof of
identity, a State-issued driver's license which conforms to certain
standards, including, it must contain a Social Security number or,

@



149

PUBLIC LAW 104-191—AUG, 21, 1996 110 STAT. 2025

“(1) In GENERAL.—The Secretary shall adopt standards for
transactions, and data elements for such transactions, to enable
health information to be exchanged electronically, that are
appropriate for—

“(A) the financial and administrative transactions
described in paragraph (2); and

“(B) other financial and administrative transactions
determined appropriate b; , consistent with
the goals of mproving the operation of the health care
system and reducing administrative costa.

“(2) TRANSACTIONS.—The transactions referred to in para-
graph (1A) are transactions with respect to the following:

_ (A) Health claims or equivalent encounter informa-
tion.
“(B) Health claims attachments.
“(C) Enrollment and disenroliment in a health plan.
“(D) Eligibility for a health plan.
“(E) Health care payment and remittance advice.
“(F) Health plan premium payments.
“(G) First report of injury.
“(H) Health claim status.
“() Referral certification and authorization.

Pa Agcommoparion, OF SreCiFIC Faovinens The
standards at the Secretary under paragraph (1) s
accommodate the needs of different types of health care provid-

“(b) Unique Heattit Ipentiviers.—

“(1) IN GENERAL.—The Secretary shall adopt standards
providing for a standard) pr ue health identi ier for gach
Graraauen employer, th plan, and health care provider
oF ase tithe health care system. In carrying out the preceding
sentence for each health plan and health care Provider, the
Secretary shall take into account multiple uses for identifiers
and mulliple locations and specialty classifications for health
care providers.

“(2) Se On IDENTIFIERS <The standards ado ted under
aragra: shall specify the purposes for which a unique
ealth identifier may be used. ia
‘(c) CODE SETS —

Ch “(1) IN GENERAL.—The Secretary shall adopt standards
that—

“(A) select code sets for appropriate data elements
for the transactions referred to in subsection (a\1) from
among the code sets that have been developed by private
and public entities; or

(B) establish code sets for such data elements if no
code sets for the data elements have been developed.

“(2) DistRiBUTION.—The Secretary shall establish efficient
and low-cost procedures for distribuiion (including electronic
distribution) of code sets and modifications made to such code
sets under section 1174(b).

i “(a) SecuRITY STANDARDS FOR HEALTH INFORMATION.—

“(1) Security STANDARDS.—The Secretary shal} adopt secu-
rity standards that—

“(A) take into account—

i) ical capabilities of record systems
used to maintain health information;


42

type of transaction that is regulated already. Such areas include healthcare, education,
financial services, telecommunications, employment, transportation and more, Thus if
you go to the doctor, send your child to school, cash a check, carry a cell phone, get a job,
or buy a plane ticket, Big Brother will know about it and attempt to limit your choices or
ration you access to any of these items.

To give an example of how far government agencies are willing to go in terms of
micromanagement, I would like to give a few examples:

«Ina press conference with the Group of Eight Justice Ministers last December,
Attorney General Janet Reno seriously proposed putting a unique identifying tag on
every packet of data on the Intemet, so that police agencies could track the flow of
information on the Intemet “the same way we tag explosives.”

© Just last week, the Federal Communications Commission gave the American public a
temporary reprieve from another Reno plan to turn every cell phone in America into a
personal locator device. However bizarre this sounds, itis already a serious problem
in many countries. In Japan, for instance, the national telephone company NTT
maintains a website at which it is possible to get the exact location of anyone carrying
cellphone in Tokyo by typing in that person’s cellphone number. In Switzerland,
the location of every cellphone is logged every three hours and the location data on
every person is archived for six months.

*  Tnorder to combat minute amounts of alleged postage stamp fraud, the U.S. Postal
Service has decreed that payment evidencing systems for first class mail must include
the from-to address information on letters in a scannable bar code form so that the
Postal Service will be able to log and monitor all first class deliveries the way Federal
Express tracks the location of overnight packages.

Clearly, the combination of such transactional record databases with the regulatory
infrastructure provided by a national ID card would go far in creating the type of police
state that hitherto has been the province only of science fiction writers.

Il. DOT Standards are the Tip of the Iceberg

The proposed focus of this hearing is to address the Department of
‘Transportation/NHTSA Rule “State Issued Drivers Licenses and Comparable
Identification Documents” (23 CFR Part 1331) that was proposed on June 17, 1998 as an
implementation of Section 656(b) of the Hlegal Immigration Reform and Immigrant
Responsbility Act of 1998 passed last year as part of the FY 1997 Omnibus Consolidated
Appropriations Act.

This rule would require states to collect and verify social security numbers in the process
of assigning drivers licenses and would require in most cases that social security number
be placed on drivers licenses in most cases in a way that could be read visually or in


160

Page 2

AAA policy is clear: We view driver licensing as the proper function of state
government, We generally resist federal government intrusion into this state function,
except for such rare, safety-related goals as commercial driver license standards.
Although we encourage adoption by all states and localities of motor vehicle laws and
ordinances which are uniform to the greatest extent possible, this does not rise to the level
of federally-mandated standards.

For example, we encourage studies to develop driver examination licensing
standards which will “effectively and efficiently” select those persons qualified to drive.
We encourage states to improve the vision and knowledge tests for driver licensing to
more accurately measure real-world functions that are directly related to crashes. We
recommend that driver examinations be appropriate for each vehicle class and that each
licensed driver hold a single license which identifies the type (s) of vehicle (s) the person
is authorized to drive. And, in one of our newest national initiatives, AAA is working
with all 50 states to enact graduated driver licensing programs for teen drivers, for whom
the proportion of deadly accidents has reached alarming levels.

My point in restating these policies is that AAA believes the primary purpose of
DMV agencies is one of administering, regulating and monitoring traffic and driver
safety laws within their respective jurisdictions. While some states have opted to expand
these authorities to facilitate tracking of parents failing to meet their child care
responsibilities, voter registration, and other responsibilities, it is quite different from a
federal mandate imposed on all states.

We have already witnessed some resistance by state DMV officials to our efforts
to enact state graduated drivers licenses (GDL) because of their concern that they do not
have the staff or resources to implement a system that would require a three-step
licensing process for teen drivers. This past year we lost GDL bills in several states
because of DMV opposition and are working hard to address those concems in the
coming legislative sessions. New Jersey recently passed a very good bill, but it will not
be effective until 2001 because of state DMV concer that they need more time to
implement the system.

The issue of who pays the additional costs associated with implementing the
proposed system also concerns AAA. If additional state resources are not made available,
then other important DMV services will be slighted or fees will be increased — passing on
to drivers the cost of a program -- deterring illegal immigration - that bears no
relationship to driving.

In response to delays at DMV's, states have sought ways to remove hassles and
shorten the time it takes to secure or renew a license, Technology and use of the intemet
has offered promising solutions. Congestion at the DMV can be just as frustrating to the
motorist as sitting in a traffic jam. To further complicate the licensing process for reasons


12

SoMBAN' MANE ANS CH YOUR APPLICATION, CURSELE aS “THE GoIERAS
SALIS MANAGZA". THIS W: ‘TELL THE PEASCN WHC IS CHECKING YCUR A?-

PLECATISN THAT YOU ARE CN A SALARY WHICH IS VERY GOCO. Azz THE pEa-
SCM HAS TS SC WHC ANSWERS THI3 PECNE IS ANSWER THE PHCNE BY THE Cx

PANY NAME, TELL WECE7ER CALLS THAT YOU HAVE WORKED THERE FoR FIVE ($;
YEARS ANG THAT YOU ARE THE SALES MANAGER. THE CREDIT PHCME Wilt az
ANSWERED WITM A COMPANY MAME THAT YCU BAVE CECSIM, STATING THAT You
RATE RAL AM ACCOUNT WITE THEN FOR COTTE SOME TIME, ALHRYS PAY YoUR
ES ANS MANY TIMES BE7C;
ANSHTR THESE FHCMIS

=> 35 aan CF av? CARS THAT Tote

SAE STORES, GIL CoMPANTES, MASTER

CARE, AMERICAM EXPRESS, DINERS CLUB CARD, CARTE

ALL SEND YCU THETA CARDS TO PURCHASE WHATEVER
YCU DESTRE ON TIME. REMEMBER, YOU CAN MAKE THOUSANDS GF DOLLARS
FRCM THESE CARDS ONDER THE ASSUMED IDENTITY WITE NO DANGER WHATSO-
EVER, TO YOU. WHEN YOU FINISH WITH A SET, DESTACY THEM AND GET AN
OTHER SET UNDER ANOTHER NAME.
ANGTHER REGUIREMENT THEY SOMETIMES REQUIRE IS RESIDENCE.
TO SUPPLY THEM WITH A RESIDENCE PREFTRASLY TH YOUR CH ECUSE, AT
WoaST NO MORE THAN TWO (2) MOVES IM THE LAST FIVE (S) Y2a2s.

PLACE CF RESIDENCE [$ EVER CHECKED: SO, USE AN ADDRESS WHERE

YOu KYCW THAT YOU CAN PICK UP THE MAIL OR A FRIEND'S ECHE GR AY APART-

MENT ADORESS WHERE YOU RENT AM APARTMENT. REMEMBER IT'S NEVER CHECKED.
ON ALL ApPLI-

(JUST NEVER USE AM APARTYEWT WUMER. JUST THE ADORESS.
35 TO 6S IS THE VERY

CATIONS YOUR AGZ SHOULD BE BETWEEN 25 AND 35.
REST FOR AGE REQUIREMENTS.

YOGA CCCUPATION TS AND SHOULD SE TWA “PROFESSIONAL CATEGORYTM,
‘EXECTULVE, DOCTOR, SALARIED SALES MANAGER, PROPRIETOR, MINISTER.
ALL OF THESE’ ARE VERY GOOD. THEN WHEN TOU HAVE SOMEONE ANSWERING
THE PHOMES FOR YOU, YOU AE COMPLETELY COVERED. IN OTHER’ HCROS,

X THEM WHAT THEY REGUIRE TO APPACVE YOUA APPLICATICN ANS THEY WIz2:

reser It.

PREPARE,



81

ure rarely utilizes oizth certificates. Back in Nigeria, 2
person simply dec: their aame and date of birth and are provided with
documentation to chac effect? There are ao controls in Nigeria as to how aar
declarations an individua! can ake. Thus it is possible for individuals fr
Migeria co encer che Uniced States vich passports based on these declarations.
Tn Atlanta for exazple, Spectai agents arrested .

; 4 deportable residence aliea in possession of three Nigerian passports. Two
of the chree passports vere in different names, passport 1119917 was issued tn
the mane of Faiix Ayoto OSHINOWG and passpor= #0502232 was in the naze of Abdula:
Sheu KARATU, the chird passport vas in bis real cama, all
three passporss were Legally issued from Nigeria, all having bis photograyi
These passports eaabled Mr. to re-enter the 0.5. without dececcion after

having been deporc!

rians accumulate false identities by assusiag ¢!
"g License in choc indiv:

In che U.S. Nz
rea! person ane che= acatiring a driv
89, Special Agents fron

nancial {nstizutions
thar cher

sco personnel files,
Gad secuzederedit ratings. Ia Atlanta for example, a Nigerian by
vas employed by # local janitoriai company.
ae. through mechods unknown to Investigations, assumed the identity of a
U.S. Internal Ravenue Agent and was able to accumulate approxinacely $24,000.00
of credic before being apprenended. Xr. ~ is presently serving 24 sonths
for Financial Transaction Card Fraud and 12 months for Re-entry Aft!

Deportacion.

The 24 wonth sentence received by Mr. for Financial Transaction (FTC)
Fraud is the exception rather than the rule in the Federal, Stace and Local
furisdiceions wichia che Atlanta Metropolitan area, FIC Fraud in the Atlanca
‘area ill be discussed at lengch later in this report. What should be noted bere
ig that che overburdened criminal justice system appears to be the precursor
rather chen the panacea to this problex.

Even though che ecriainal justice system, (specifically the lenient sentences
imposed on these perpetrators) appears to be the culprit, i¢ would be grave
error to lay total blame or responsibility for solving this problem on che
shoulders of government agencies. Financial institutions, insurance companies,
and credit card companies all share equally in the formation and ultiaately in
the resolve of this problem. Financial communities, in their reluctance to
divulge chetr liberal leading practices to their investors, are sore likely to
Myrite” the loss off to their investors racher than pursue criminal prosecution.



A NATIONAL ID CARD: BIG GOVERNMENT AT
ITS WORST OR TECHNOLOGICAL EFFICIENCY?

HEARING

BEFORE THE

SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH,
NATURAL RESOURCES, AND REGULATORY AFFAIRS

OF THE

COMMITTEE ON GOVERNMENT
REFORM AND OVERSIGHT
HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS
SECOND SESSION

SEPTEMBER 17, 1998

Serial No. 105-191

Printed for the use of the Committee on Government Reform and Oversight

a

U.S. GOVERNMENT PRINTING OFFICE
52-910 WASHINGTON : 1999

For sale by the U.S, Government Printing Office
‘Superintendent of Documents, Congressional Sales Office, Washington, DC 20402

3



107

Testimony of
Richard D. Holcomb, Commissioner
Virginia Department of Motor Vehicles
Before the National Economic Growth,
Natural Resources,
And Regulatory Affairs Subcommittee
September 17, 1998

Good moming, Members of the subcommittee. I appreciate the opportunity
to comment on the topic of a national ID card.

While Virginia does not take a position on a national standardized ID, we
are concerned that proposed rule making from the National Highway Traffic
Safety Administration will seriously impact Virginia’s ability to deliver driver’s
licenses to our customers in a quick and efficient manner. During the past five
years, Virginia has earned a national and international reputation for service
delivery standards that rival and even exceed service delivery in the private sector.
Within our own state and across the nation, we have raised the bar for delivery of
government services, emphasizing service that’s fast, convenient and efficient.
Neither we nor our customers would care to see this reputation diminished at the
cost of an unfunded federal mandate.

1 would like to respond today to the Illegal Immigration Reform and
Immigrant Responsibility Act of 1996 as well as the National Highway Traffic
Safety Administration’s proposed rule making.

Virginia already meets many requirements

Regarding the statutory requirements of Section 656(b),! Virginia already
complies with the application process and the format of the license itself,
including features to limit tampering and counterfeiting.

" All Sections referenced in this document are Sections of the legal Immigration Reform and Immigrant
Responsibility Act of 1996.


130

of the social security number, which has proven highly
controversial, has little bearing on the safety mission of the
agency. Whatever the outcome of the rulemaking, the effect on
our safety programs will be marginal. Yet we do not have the
authority to amend the controversial aspects of the proposal or
to terminate rulemaking.

To the extent that the controversy over the proposal is
requiring us to address thousands of comments from angry members
of the public, we would welcome the Congress’s reassessment of
subsection 656(b). Whether you choose to reaffirm its current
requirements, amend it to achieve its purpose more precisely, or
repeal it, we will execute your decision accordingly.

This concludes our statement. Thank you for the opportunity

to submit our views.


158

Addendum

Status of HIPAA Administrative Simplification Regulations
(As of September 17, 1998)

National Provider Identifier (NPI) ~ HCFA-004SP

+ NPRM published in the Federal Register on May 7, 1998, Comment period ended on
July 6

‘Transaction and Coding Sets - -HCFA-0149P

+ NPRM published in the Federal Register on May 7, 1998. Comment period ended on
July 6.

‘Employer Identifier - HCFA-OM47P

+ NPRM published in the Federal Register on June 16, 1998. Comment period ended on.
‘August 17.

‘Security—HCFA-0049P-

2 NPRM published in the Federal Register on August 12, 1998, Comment period ends on
Oct 13.

Plan Identifier (PAYERID)-HCFA-6145P
2 NPRM in Departmental Clearance.




108

Virginia, however, does not require that the soctal security number appear
‘on the license. Customers may opt for a randomly selected control number
instead, We do require proof of a social security number before we issue a driver's
license or photo identification card (assuming the customer has a social security
number). We retain the social security number of each customer on his or her
customer record.

Virginia lawmakers first offered customers this choice in 1995 in response
to a national public outcry over stalkings and murders made possible by
unrestricted access to individuals’ social security numbers and street addresses.
Since 1995, nine percent of driver's license applicants have chosen not to display
their social security number on their driver's license.

Indeed, Virginia’s privacy laws rank among the strictest in the country and
even exceed federal requirements.

NHTSA‘ verify SSNs and Virginia’:

NHTSA proposes that, beginning October 1, 2000, every state will verify
each application for a new, duplicate, or renewal driver's license or identification
document electronically with the Social Security Administration, unless
previously validated. Technologically, electronic verification with SSA poses no
problem to Virginia's DMV. Instead, our concerns center around three issues.
First, we are concerned about the speed of verification with SSA; second, we
question what will happen when the system is down at SSA or when, for some
other reason, Virginia is unable to receive an immediate response from SSA; and
third, how will we handle social security number non-matches with SSA.

Additionally, we are concerned about the concept of lawful presence,
wording in Section 1331.6 of the procedures, and Virginia's implementation costs.

Speed of Verification

Virginia uses state-of-the-art technology to issue driver's licenses to
customers during their visit to one of our 72 customer service centers or three
mobile customer service centers. With an average wait time of only nine minutes


30

STATEMENT
OF
SOLANGE E. BITOL

LEGISLATIVE COUNSEL

AMERICAN CIVIL LIBERTIES UNION
WASHINGTON NATIONAL OFFICE
ON

A NATIONAL ID CARD — PATIENT IDENTIFIERS

BEFORE THE
HOUSE OF REPRESENTATIVES
‘COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH, NATURAL RESOURCES AND
REGULATORY AFFAIRS

September 17, 1998

The American Civil Liberties Union is a nationwide, non-partisan
organization of more than 275,000 members devoted to protecting the
principles of freedom set forth in the Bill of Rights. On behalf of the ACLU,
appreciate the opportunity to testify before you today about personal
privacy, especially medical privacy, and the threat that a national ID
poses on the privacy rights of all US citizens.

From using the telephone to seeking medical treatment or applying fora
job or sending e-mail over the Internet, Americans' right to privacy is in
jeopardy. The reason: our personal and business information is being


INSURANCE $CaMs

Of all the fraud being conducted by Nigerians in che Atlants District, the area
of insurance fraud saens to be the fastas= groving. Our office has been besieged
wich requescs for help from nuzercus insurance conpanies looking for quici
solutions to the huge economic losses they are sufierimg due to the fraud
accivicies of the Nigerian community, The prevalent insurance fraud activities
2 property dasage (vehicular), bod: jury, homeowner theft, business ¢

and lize insurazce. juranes industzy investigators in the Atlanta area
that as much as 50% of the fraudulenc clains being filed can be attributed co
Nigerians.

In one local scenario, an insurance company has identified a "property
ving" involving a number of Nigertans. Beginning in 1987, this Aci
pa:é our 30 clatss

Ina Vareation of the property danage scams, Nigerians often purchase an
expensive car (ie - Bi) and insure che vehicle vith cumerous agencies. Thep
then stage an accident, often with the help of Nigerian accomplices in another

vehicle, and then file claias wich all the coupanies. Many companies pay of:
such claias immediacely, with average settlements around $3,000.00. Ic is eas
to see how quickly a aus of $15,000.00 + can be made in one day in this manner.

Another popular fraud involves feigning bodily injury after an automobile
accident is staged. . Nigerians will load up 3-4 peopie in one car and drive down
che dneerscace, according to a loca! insurance investigator. The driver will gee
in frone of an unsuspecting motorist and then slam-on the brakes, causing a
colifsion. These individuals have ao concera for the safecy of the othe:
motorist nor the extent of danage that results. All of the Nigerians will then
claim bodily injuries and vill file against their own inurer as veli as agains<
che victia motorist’s insurer. This is because Georgia is a ne~faui

which the insured's own carrier pays for injuries. The average pay-off 1s
$7,500.00 per person, or $30,000.00 per accident. The claims are nost often
handled by mail, vhich makes detection of fraud difficult. The Nigerian usually
takes the policy out under an alias, which he substantiates vith a driver
License (fraudulently obtained). The accident normally takes place before the
policy goes to the undervriter for clearance.



83

the Celestial Church of God, with affiliates in the U.S. recruit individuals to
travel co che U.S. for che sole purpose of commiccing criminal acts. This type
of venture is reaiaiscent of the indenture servant era. It is unknown vhether
the recruituene is prior to or after the issuance of the visa, but what is known
is thac che sole purpose of this church is to school individuals in the
inerieactes of “saite collac" crime in the U.S. The exact specifics of each
crausactioa becveen the church and client are not known. What is known is that a
“contraccTM is made betvees both parties whereby the church ‘nstructs the
individual on U.S. lavs specifically lavs dealing with “white collar” crime and
ways co cfzcunvent thea, In some instances, the church alse pays for passage to
the U.S. and in recura for this service, the church denands 10% on everything
thae the fadividuai scaals in the €.5. These "contracts" are enforced throug
aiiliaces 2 the U.S. Most of the U.S. cities chat are experiencing
tate of the Celestial Church of God
there 15 cianca aecropeiitan area che caurch ts Loca:

apes to taiitscace chis church ba

stone of che Nigerian Cr:
rez amount lost tz dollars {3 an elusive
gure, prisarily dua to che reluctance of financial institutions releasing that
ingornatfos-for fear of reprisals from investors. But 4 conservacive estinace
would put the loss in the excess of aillions of dollars per year.

As scacaé earl
Seework's criniza, scructura. The

FINANCIAL TRANSACTION CARD FRACD
Financial Transaction Card (FTC) Fraud and theft 1s by far the most serious
erininal activicy encountered by Spectal Agents in the Atlanta Metropolitan area.
Since inception of the Wigerian Task Force (NTF) in atlanta, 19 of che 39 cases
opened have been FIC related. That equates to 48%. Almost balf of all the cases
fovolving Nigerians have bees associated vith sone type of credit card fraud. It
Should be noted that many of the cases opened by U.S. INES ara cases in which the
individuals have been convicted and have cose to our attention due to their
deporcabiticy. There are aumerous cases still pending whereby Nigerian vesi¢wat
fens have been arrested for F.T.C. by federal, state and local jurisdictions
and who have not been deported based on Section 261(a)(4) of the Immigration and

Nationality act. Dua to the lack of sanpover in the Atlanta Discrict Offic
Sone individuals have avoided deportation based on the inability to “track” every
resident alien evaiting conviction. | Imigration holds cannot be placed on
resident aliens until after sentencing. It should elso be noted that a vast
majority of the FTC cases involve resident aliens. One individual in particular,
resident alien was convicted in 1988 for

FIC Fraud in Gwinnett County, Georgia. He was sentenced to 2 years in jail, but



12

my store with their social security number on their check and advise them never to do
that again. A.J. Woodson used my identification in ATM machines and over the
phone. He is a black man and I am a white woman. I was a single new mother of a
nine-month-old daughter running my own business when this came to my attention.

It has consumed and continues to consume a tremendous amount of energy that I have
not and do not have to expend. It has stunted my ability to establish independence,
My daughter is now three-and-a-half years old.

On September 15, 1998 I called the bank which sent me the live loan check
for $2,500 dated June 1998 to ask them where they had gotten the address on the
check which was Woodson's. They told me they purchase so many mailing lists there
‘was no was they could track down that information. I went to the post office to
change my address from his to mine again, which I do about every six months, and
realized this could go on indefinitely.


AVOID PREEMPTION.

‘When Congress considers an issue that may mclude preemption, there 1s typically a debate,
sparked by the presentation of competing arguments, as to why or why not federalization of what
is a traditional state activity ought to pursue. Nonetheless, state capability to issue driver's
licenses was never the subject of debate. No Member of Congress, to my recollection, charged
the states with ineptness. No one suggested that the federal government could accomplish
issuance and production tasks more effectively. Therefore, unlike disagreements NCSL has had
over takings, internet tax, financial services modernization, product liability and health insurance
regulation initiatives, the contents of those disagreements were absolutely non-existent when
‘Congress considered federalization of the driver's license issuance process. Yet, the end result of

the law is preemption and activity that counters state experiences.

BAD SECTIONS OF LAW CAN ONLY PRODUCE BAD REGULATIONS.

‘Some would argue that a “fix” to the federal regulations would tame the counter-devolutionary

content of 656 (b). Let me make it perfectly clear that a bad, misguided section of law will only
produce bad, misguided regulations. The problem is the law!

‘The National Highway Traffic Safety Administration has received thousands of comments on its
proposed regulations for implementation of Section 656 (b). It is not surprising to me that the
‘overwhelming preponderance of the comments are negative, both toward the section of law

generally and toward the regulations specifically. The first round of comments was so


95

Mr. Chairman and members of the subcommittee, I want to take this opportunity to
thank you for inviting me to here today to testify about a very important issue affecting
every American citizen, My name is George Grindley and I am member of the Georgia
House of Representatives. Over the last several years I have been focusing on concerns
about privacy. In addition, I recently pushed through the Georgia House legislation to
prevent Social Security numbers from being placed on the state’s driver licenses.

In a nutshell, Mr. Chairman, I introduced this legislation, because I and millions of
‘Americans realize the use of the information superhighway has continued to expand
and a new type of fraud has suddenly emerged. With just a few pieces of critical
information, a clever crook can order fraudulent credit cards, issue money order
transfers from your personal account to theirs, or just generally snoop through your
business.

‘The key to unlock all of those doors is your social security number, birth date, and
address. However, the social security number works like a skeleton key. The nine digit
number can open numerous doors to a person's private life. In Georgia, I did a little
research and found those three pieces of information currently sell on the street for
about fifty dollars. For fifty dollars, a person's identity can be taken from them.

Mr. Chairman, last year, I pushed through the in Georgia State General Assembly
legislation which specifically required that social security numbers be removed from
driver licenses in the state. Prior to this law being passed, the state of Georgia placed
Social Security numbers on driver licenses unless an individual specifically asked to do
otherwise.

During the consideration of this legislation by the Governor, the Georgia State Police
requested that the bill be vetoed. Their only reason was by the year 2000, they were
going to require social security information on each individual's driver’s license. I have
found their argument very contradictive ~ that the agency who is sworn to protect the
rights of the citizens was so willing to readily give those rights away.

On June 17, 1998, the National Highway Transportation Safety Administration issued
regulations to establish a national identification system that will mandate a National
Identification Card no later than October 2000. The provisions of the law will require
each and every American to produce a state driver’s license that conforms to
specifications established by the federal government -- and based on the Social Security
number -- to be eligible for virtually every government or commercial service.

I believe these proposed rules are a travesty. It is a travesty based on how easy it is to


4

AG TAXING AOVANTAGE CF THE cARD'S
SUST ASK YCCR FRIEMCLY BANKER AECCT THIS

8Z GLAD TC TELz Yeu.

YoU ARE USING “SCCO I.5.", AND THE MCMEY YOU MARE cE
PENS UPON THE USE CF THE CAADS. ALSO, CHECK WITH EACE EYDT7zCUAL
CREDIT CARD YOU GET AND SEZ WHAT YCCR “FLCOR LIMIT IS. THIS Is
TEE AMCUNT YCU CAN S$?EWC IN A STORE WITHCUT THEM CALLING IY FCR AN
APacWAL | FRcM THE CRETIT CARD ComPar?. YU CAM OSE YcUR DuccMAt=cN

ry casas ANS CREDIT ARE EAST To GET, TSEY AaE ALSO AN IM~
TE 2.0. AS SACKUP, JUST KEEP THIS IV RIMD, ALWAYS GO AY TEE
RULES ANC THERE [5 NO PCSSTSLE WAY ANYCHE OTSTINGUTSHING You BE-
TWEEN THE REAL AND. UNREAL. AFTER ALL; “THEY ARE IN YOUR MAME, SIGHT?
CMLY WHEN YOU OTSAPPE3R DOES THE RSKLITY OF WHAT MAS HAPPEYED BECCNE
“APPARENT TO THOSE WHO PUSHED IT CN YOU TEE MOST, BY THEN, OF Cocast
YOU WILE ALREADY BAVE SEEM NOTIFIED THAT YOUU “ME MAME CRESIT A2PLI
CATION" HAS BEEN APPROVED AND YCUR WEW CARDS ARE OM THELR WaY TO You
SHORTLY. THEY IT'S ANOTHER BALL GAME. JUST REPEAT THE PROCESS CVEE

AGAIN. Lo .
iM SUPPLYTNG REFERENCES BEYOND TRE ONES WHICH YOUR FRIEND WILL VERI~
FY OVER THE PHONE, YOU SHOULD RENENSER THAT SO¥E FINNS, ESPECIALLY
DEPARTMENT STORES AND CREDIT UNTOMS WILL WOT GIVE OUT THEIR CREDIT
AATINGS TO ANYSOOY. $0, IF YOU SUPPLY OME OR SEVERAL OF THESE RIFER-
ENCES, YOU CAN OZ CERTAIN THAT THEY WELL NOT BE CHECXED OUT. THE
LENDER RNCWS HE CANNOT VERIFY YOUR REFERENCES BUT HE WILL DEFINITELY
NGT TELL YOU THIS. ME WILL BASE AIS LENDING DECISIOW OW THE ASSUMP-
‘Tiow CF YOUR HONESTY. .

ALSO REMEMBER: YOU CAN USE YOUR CREDIT CARDS FOR RENTING CARS, TRUCES.
CATS, NGTELS, ACRPLANE TICKETS, BUS TICKETS, MEALS, GAS, BATTERIES,
EQUIPMENT, CLOTHES, JUST AZGUT ANYTHING YOU CAN THINK OF AND THE &:

28 GafaT F9a reU.



36

been pushing for to not allow inscription domestically would allow
them to e-mail. Tagging would be a step beyond that.

The FCC has turned down an effort that Reno suggested to fol-
low where Japan and Switzerland have already gone. In Japan, the
National Telephone Co., NTT, maintains a Web site where it is
possible to get the exact location of anyone carrying a cell phone
in Tokyo. Because these things emit little beepers when they are
on, you can tell where a cell phone is.

In Switzerland, the location of every cell phone is logged every
3 hours and the data is kept for 6 months. So, you can find out
where somebody is by where they are keeping their cell phone, and
it is possible to keep that information.

Now, if you take the post office, in order to fight fraud, wants
to have a to and from address that can be read technologically on
every letter, so that the post office could keep and maintain a list
of every letter that went to and from you, indefinitely into the fu-
ture, and hold onto it. It becomes easier to store data. You keep
that stuff indefinitely into the future.

Put that together withrefforts toward a national ID card and you
have really got a tremendous web of the government expanding the
data that it can have. And the challenge is, when you have data
like that, there is a tremendous temptation to do something with
it. And people are constantly coming up with new ideas. if
we have an ID card, why don’t we put everybody's health stuff in
a little chip in the middle of the card?” Well, if you are going
to do that, why not put their tax data on it?

There are going to be a number of arguments, each of them to
make life simpler and easier. And people like me who stand there
and are told, “Do you want to get your driver's license or what,”
will surrender each day a little of their privacy.

And even what gu may promise people in law, you will never
have to give your Social Security number, well, the bureaucrat who
wouldn’t let me have my driver’s license without it may or may not
have read your law, but at some point that protection did not mat-
ter, and people do trade.

The only good that I can see that comes out of this effort by the
transportation people is it might put an end to the enemies of the
second amendment who always say, “Oh, you shouldn’t worry
about licensing guns. No one has ever had trouble with licensing
cars and driver’s licenses.” Now they are going to be using that as
an ment for a national ID card, and I think there are some po-
tential dangers there.

I would certainly support the efforts by Congressman Barr to
undo this, and certainly Ron Paul’s efforts to make it clearer legis-
latively that Social Security numbers cannot be used for other pur-
poses,

Thank you.

(The prepared statement of Mr. Norquist follows:]


48

found something was charged in California and someone had been
using the credit card. This man was using my credit for a year and
a before I ever found out. So, he was ping the payments
up, taking out from other accounts and paying off those accounts.
And when it was finally found fraudulent, I’m not sure it wasn’t
worth it to the credit card company to go ahead and grant the cred-
it.

It was just a simple phone call. I called where he said I worked.
He said that I worked in Chicago and that I lived in Springfield.
And I made the phone call to see, is there anybody there by the
name of Celene Cross? Is there anybody there with this Social Se-
curity number? It was a phone call. And to require that of a credit
card company, I don’t think that is, you know, such a—I don’t
think that is very extreme at all.

Mr. MCINTOSH. And the question for us would be, is it better to
lay out those detailed requirements in Federal law or would it be
better to place liability on a private party and let them figure out
the best way to to prevent that from happenin ? And those of
you who have experience in this area, let me know what you
think about that.

Mr. Nogem. I don’t know what the answer to that is at the Fed-
eral Government level. But there may be an answer developing at
the private level.

In fact, one victim of identity theft has actually started a busi-
ness of helping other victims of identity theft. He or she has put

r a “how to reclaim your identity” publication, a kit, and
they sell it for about $90.

Mr. McINTOsH. And from the examples that you gave us, Ms.
Cross and Mr. Young, you all sort of to find out one step at
a time what is next. It sounds like you are fearful it is not over
yet. It would be helpful to get that information out.

Let me_ask one other question. What steps have you taken, Ms.
Cross or Mr. Young, to protect your Social ity number in the
future? And I guess, therefore, what advice would you give others
to protect it?

Mr. YOUNG. Well I have had warnings put on my credit report,
don’t issue out this credit until you contact me at work or at home.
And T had that on my eredit report, on all three major credit re rt
agencies, before this happened to me and they violated my rignts.

ey didn’t call me at work or at home to verity who I was or any-
thing: They just issued this person credit. So, I don’t know if that
would help.

Mr. Mc. 3H. So that was not effective in stopping the issuing
of credit.

Mr. Youn. No.

Mr. McINTOsH. Ms. Cross.

Ms. Cross. As I said before, the accounts are off. And, in fact,
I had heard that having the warning on your credit report was
harmful. So, I had them on at one point and then I took them off.
And I am still getting credit applications that are saying that I
have a prior bad credit history. Well, if it is supposedly cleared up,
then why I am getting these card applications? And I do think a
lot of the liability lies with the credit reporting agencies because
T have had tremendous problems with them.


116

National Highway Traffic Safety Adminstration
Docket No NHTSA-91-3945

July 31, 1998

Page 2

‘With regard to noa-matches, we have been advised that there will be seven
‘Possible responses ftom SSA on # non-match. Is it intended that all non-match responses,
‘re to result in no license being issued, or will the rules allow for a temporary document
to be issued to the custoraer in soroe instances?

Another concer in relation to the verification from SSA is the response time. Lo
Virginia, we issue driver's licenses directly to the customer during his or her visit to o0€
of ovr customer service centers. Our system is state ofthe art and has beea built to
‘provide the ultimate in customer service. The Virgiala driver's license iseuance process
‘a almost instantancous, with an average wait time of only twenty minutes per customer.
In FY 1994 and 1995, DMV issued over 1.8 million driver's licenses per year. We are
‘concemed that these rales will add significant additional delays to the driver's license
insuance process and may require centralization of driver's license issuance, thereby
destroying DMV's mission of de-centralization through 72 customer service centers
statewide. Further, we with to make sure that the rules are not written in such a way a3 to
effectively prevent over the counter issuance of a permanent driver's license, thereby

dramatically increasing costs and decreasing customer service.

NMVTIS pilot was seven seconds per transaction aod we propose that this should be the
uuanteed minimum response time for the SSA system.

Further, we believe it is essential that SSA ia ready to receive our files a8 soon as
possible in order for us to compare social security numbers in existing records by means
‘of batch transmissions. We respectfully suggest that this should be done long before
October 1, 2000, fn Virginia, customers will be able to renew their driver's licenses by
‘mail and by telephooe and it is crucial that our current records be matched with SSA
‘records in order to avoid unnecessary delays in our mail and telephone renewal process.


53

unfortunately went on to accept this Senate provision that ultimately became Section 656 (b) of

the 1996 Illegal Immigration Reform and Immigrant Responsibility Act.

REPEAL SECTION 656 (b).

My message to you today, Mr. Chairman and members of the Subcommittee, is quite simple.
Section 656 (b) of that 1996 act must be repealed immediately. That section is a gross
usurpation of state authority. It is an unfunded mandate. It is preemption at its worst. It is
counter-devolutionary. It contradicts state experience. It federalizes an activity that
fundamentally sbould remain with states. And, because that section requires federal regulations
to implement, it is about to breed bad and misguided regulations,

PASS H.R. 4179.

The answer to this dilemma is also simple, We need quick enactment of H.R. 4179, sponsored
by Mr. Barr, who sits on this subcommittee, and a bipartisan group of cosponsors. While I
realize that you are in the waning days of this session, this section of the law is so egregious that
it merits an expeditious repeal. H.R. 4179, when passed, will produce two immediate benefits:
(1) it will rid us of an absolutely unnecessary preemptive section of the law and return the
driver's license issuance process entirely to the states, where it belongs, and (2) it will prevent the

situation from worsening through the promulgation of regulations.


137

lL a nomena
abt Stree gone

accents Congress of the United States wean ne
supemonon House of Representatives srcmonan

excayonst ‘Blashington, BE 20515-4314 =
wont ree swear nonrett

‘Statement of Hon. Ron Paul
Before the House SubCommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs
Hearing on National Identifiers

9-17.98

‘Mr. Chairman, I appreciate the opportunity to present my views regarding the Federal
Government's plan to create a national ID card, assign every American a uniform health identifier,
as well asthe trend toward transforming the Social Security number into a uniform numeric
identifier. The creation ofthese identifiers represent perhaps the greatest threat to liberty facing
‘Americans today. When one closely examines the details ofthese schemes it becomes clear that
the proponents of Big Government wish to forbid Americans fom going to work, getting a job.
boarding a plane, seeing a doctor or conducting any other major life activity without their
{federaly-approved identifier.

‘Such a system is incompatible with American liberty. If history teaches us anything, it is that when
‘government gains the power to monitor the actions of the people, it eventually uses that power to.
impose totalitarian controls on the populace. American could very weil come to resemble Nazi
Germany or Soviet Russia, where state officials could arbitrarily punish innocent citizens for
failure to produce the correct “paperst”

However, Congress does not need to look at this century's totalitarian societies for a clear view
of the dangers of national identifiers, Just consider the numerous cases of TRS abuses that have
‘been brought before Congress in the past few months, the history of abuse of FBI files and the

‘ase of & Medicaid clerc in Maryland who accessed a computerized data base and sold patients’
‘names to an HMO.

1 have int three pieces of legisttion to protect the American people: the Freedom and
Privacy Restoration Act (HR 4217) which repeals those sections of the 1996 Immigration Act
that established federal standards for state drivers’ licenses; the Patient Privacy Act (HR 4281)


49

Another interesting aspect of my case is that I wrote letters for
AJ. Woodson to sign, taking full responsibility and liability, saying
he had no affiliation with me, he took the account out without my
authorization. And they were sent to the credit report agencies and
to the banks, and the banks sent in credit forms to the credit re-
porting agencies, sometimes more than once, and the information
was still not removed.

Mr. McINTOSH. So there are not adequate incentives for the re-
porting agencies to have an accurate record?

Ms. Cross. No. It has changed since the Fair Credit Reporting
Act was amended in September 1997. The last thing I did was
write to the three credit reporting agencies, and two were com-
pletely cleared up and the other one, the place of employment
wasn’t correct. And I haven't followed those up.

Before, when they became corrected, it is my understanding that
the creditors send tapes in every 30 days. So I could have my credit
report cleaned up, and 30 days later even if the accounts weren’t
on it, it would have the wrong address on it or wrong place of em-
ployment or different information would come back, and it was
very hard for the credit reporting agencies to track where that in-
formation was coming from.

Mr. McINTOSH. Because of the massive volumes they have of up-
dating the information?

Ms. Cross. They just do not seem very organized.

Mr. MCINTOSH. Well, let me say thank you to all of you for com-
ing. This is very helpful to us. What I would like to do is take this
information and make it available to my colleagues and some of the
committees of jurisdiction in this area. And I am also asking unani-
mous consent, which will be easy to get right now, that we hold the
record open for an additional 10 days. And if you have other infor-
mation that you think would be helpful to us, please sumbit that
to the record.

Thank you all very, very much for coming.

Our second panel is a panel of government representatives who
have been active in this area. The first is a State representative
from Connecticut, Brian Flaherty. The second is a State represent-
ative from Georgia, George Grindley. And then the third is Com-
missioner Richard Holbomb of the Virginia Department of Motor

les.

I appreciate all of you coming. As I mentioned earlier, it is the
policy of the full committee that we ask each of our witnesses to

sworn. So, if you would please rise and take the oath with me.

[Witnesses sworn.]

Mr. McINTOSH. Let the record show each of the witnesses an-
swered in the affirmative.

Our first witness is State Representative Brian Flaherty of Con-
necticut. Mr. Flaherty, feel free to summarize your testimony. We
will put the entire written remarks into the record.


TT

Vitis NE! SERAT ICN un

6. WOTER REGISTRATION CARDS ARE (SSUED BY THE Lea, BCARSS CF ELECT:
am) ARE USED BY THETR HOLDERS AS EVIGENCE OF AGE Ano CITTzENSHE? FoR
LIMITED PURPOSES. OFTEN, THESE CARDS ARE USED FRECUENTLY TO suP2CRT
THEIR CLAIM OF U.S. RESIDENCY FOR RE-ENTRY TO THE U.S. FAGM CANADA ANS

MEXICO. .
BUT THEY ARE OF WC USE WHEN APPLYING FOR A PASSZORT AND NCT USUALLY
ACCEPTED WHEY APPLYING FOR A DRIVERS LICENSE. RECISTRATION FCR A
WGTER MESTSTRATION CARD [5 PESMITTED BY MAIL IN MANY JURigoroTicus:
ANG EVEU WHEN A PERSCUAL APPEARANCE IS AEQUTRED, THE EvInENcE oF
#55. ©: EMSHi?, RESIDEMCE AND [DETTITY OF THE CHE REGISTERING THAT
SAM 32 CEMANCED BY THE LOCAL GFFICIALS 13 A VERSAD SESLARAT:

ES PENALTY CF YAW AND VERCURY. THE CHECKS MADE FOR TH25
AE “NILWTGONCEAMING THE LOCAL BOARDS CHECKING ANYTHING FoR vERzTICSs:

ce CARS

7. ALTHGUGH CREDIT.CARDS CONTAIN CERTAIN PRINTED AND EMBOSSED INTCR-
MATION WHICH WHEN CHECKED BY A MERCHANT OR RETAILER, RE MAY CCHFIRN THE
VALIDITY GF THE CARD, BUT THE PRIMARY MEANS OF CARONOLDER AUTHENTICATION
1S THE SIGNATUAE ON THE CAKD ITSELF. WORMALLY, WO OTHER f.0. 5
AEGUTRFD TO CHARGE GOOOS CP SERVICES At A WIDE VARTETY OF RETAIL CUTLETS,
UNCESS A CUESTICN ARISES AS TOTHEVALIOITY OF THE CARD OR THE HOLOEA,

AND WELT, SP OETERMTUED BY dOW YOU PRESENT YOURSZLE AND KNOWING TRE
LINGTS OF THE CARD, YOU KNOW THIS BY THE PRE-CNECK YOU KADE WREY YOu

EIVEO THE CAAD. AANK CARDS ‘SUCH AS MASTER CARD AND BANK
‘THE LIMLTATIONS AND

FTAST AEC!
AMERICARD CAM EVEN BE USED TO OBTAIN ACTUAL CASH.
THE USe OF THESE CARDS ARE UNBELIEVABLE. °

WHES OBTAINING CREDIT CARDS UNDER A LEGAL IDENTIFICATION SYSTEN, THERE
ARE NO LIMITS TO THE PURCHASE POWER YoU POSSESS. I PERSONALLY RICH
(OF ONE THCIVIGUAL ‘HO OBTAINED OVER 1,000 CARDS USING 300 OLFFERENT
MAMES ANG FALSE IOMNTITIES.


87

dere 2 the Atianca Distr! wad vas cacent!y evidenced by the a
four Sizertan heroin Atlanta Hartsfield International Atrzort
wichia 4 chree veek period in Yay and June 1983. Ail four of these individuals
ware heroin "svallowers": shay packaged the heroin in balloons or condoms
and than secured che end vich deacal floss and suyergiue before swallowing. The
record Zor this iaceraal coacealaent sethod is 1432 grams (227 packages) and is
held by a Vigerian arresced ac JFK. The individuals arreated im Aclanca chis
year had svalioved an average of abouz 100 packages.

Another worrisome trend vas also avidesced by the recent Atlanta arrests. Of che

four Nigerian individuals, tvo (2) ware resident aliens (I-551's)
held work auchoefzacion cards (I-640A"s), This corresponds to an ONDC? teyc;
dated 6/13/39 stares chac "Nigerian, LPRs say be craveliag to Vigeria co
Staces".* A icrge percentage of the Nigerian

elas a apraviiag sion im the aeart of Lagos,

due ean ebet over N15,000,00 (apprexizacsly $2,000.00 0.8.).

Tha factors concribucing to the groveh of the Nigerian Heroin trafficking
organizacions are prisarily econoaic. Nigeria is the mosc populous nation 1a
Africa and has beex suffering huge losses in revenue due to the woridvide drop in
el prices severai years ago. As an {llustrdtion of che severity of this crisis.
the Nigerian goveranent closed the Nigerian consulate in Atlanta this spring. 4
consular officer stated this vas due to financial difficulties and that al)
consulaces vould be closed excepc for Nev York and the Embassy in Washington.
Farcharzore, a Migeztan can make che equivalent of ten years annual saiar7 in one
heroin scuggling Crip to che U.S. Added co this ts che fact that Nigerians are
told that is licele or no chance of being detected wich the use of the
ingesting (swallowing) tachniques. Furthernore travel to the U.S. from Nigeria
ss cad the Wigerien goverumeat, which subsidizes air travel. A

for about $400.00 as opposed to a

MIgerian can cravel co the U.S. from
fare of $3,000.00 if purchased tn che J.S.

Te ts difficult co profiie che Nigerian drug trafficker. Couriers are recruited
from all social levels in Migeria. Children as young as tea years old, as vell
ae pregnant vousa have been used to smuggle heroin. In 1987, Coprain Joba Billy
EKO, a forner top pilot of Migeria Airvays, vas arrested for smuggling cocaine at
JFK and ves sentenced to seven years confinenant.’ In April of this year,
former senator from Nigeria, Adenoia ADEGOKE was clso arrested at JER wich
Luggage concaintag 5,300 kilos of heroin valued ac $2.000,000.00.9 It is easy to
see chat drug trafiicking permeates every echelon of Wigertan society.



43

electronic form. Drivers licenses would also have to include security measures such as a
hologram and other devices. Clearly, the ultimate result of this rule would be to move all
drivers licenses in the direction of the i
citizens smart cards with embedded sil
detailed persona! information. What is most astonishing about this rule, however, is not
that DOT followed Congressional instructions in drafting it but rather that Congress
passed authorizing legislation that could be interpreted in this way with such little debate.

Other national ID card measures worthy of consideration is the unique national healthcare
identifier for individuals established as part of the Kennedy-Kassebaum Health Insurance
Portability Act of 1996 and the so-called “new hires” database established by the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996. The Committee is
correct to identify these measures as significant first steps toward the creation of a
national ID card system.

The Kennedy-Kassebaum provisions are particularly troubling not only in that they lay
the groundwork for a national healthcare ID card system but also in that they dilute the
Fourth Amendment protection of medical records, giving federal agencies access to
personal records without need of a judicially approved search warrant. As in
telecommunications issues, the degradation of Fourth Amendment protections here
proceeds in tandem with the creation of new national database programs.

However, other proposals, many also already enacted into law, also deserve scrutiny by
this committee. Some examples include:

© A hardened or “tamperproof” Social Security card.

* A possible national worker registry to verify employment eligibility in the United
States.

‘© A nnational voter registration system based on Social Security numbers, possibly
linked to a national voter registration card.

© Children’s health and immunization databases maintained the Center for Disease
Control.

© Educational and vocational training databases including extensive local databases on
school-age children that are gradually being linked together on a national scale.

© Firearms registration proposals.

* A so-called “public-key infrastructure,” deployed worldwide through reciprocal treaty
obligations, that would link allow government-appointed, government-regulated
trustees to keep on file the encryption keys used by citizens to encrypt their personal
financial transactions and other information communicated over the Intemet. Each


128

6
interest in issues of privacy. Some suggested changes to various
details of the proposal. Four States objected to the proposal
that all States must verify social security numbers, not just
thoge States that do not use the number on their licenses and
documents, on the grounds that thie would exceed the agency's
authority under the Act. Several comments objected to the entire
proposal because of ite costs, which they believe greatly exceed
the agency's estimates, and because these costs, without Federal
reimbursement, could represent an unfunded mandate. Other
comments objected to the process on privacy grounds, fearing that
more widespread use of the social security number could lead to
easier access to personal information and to identity fraud.

The great majority of comments from the general public were
extremely negative. Almost all of these comments object to the
proposal in the strongest terms, The thrust of their objection
is that they oppose the use of the social security number and
what they uniformly regard as a proposal for a “national
identification card.”

The Administration had itself expressed concerns along these
lines during the consideration of the Act, at a point where the
legislation would have required the social security number to be
Placed on the license. The Department of Justice, in commenting
for the Administration, expressed ite strong reservations about
this requirement, which it believed could lead to licenses
becoming “tantamount to a universal identification card.* It

also suggested that the Act could create an unfunded mandate.


112

passport, and proof of lawful presence, which again may be the arrival-departure
record (I-94) with a B2 visa, We do not believe that a temporary visitor to the
USS. should receive a state-issued driver's license.

There are also areas where the list is not sufficiently inclusive. For
example, we believe a lawful refugee or a person lawfully seeking asylum in the
U.S. should be able to obtain a driver's license if they can produce the appropriate
primary and secondary documents.

Wording in Section 1331.6

We also have questions with regard to Section 1331.6 of the procedures.
Section 1331.6 (a) states that "before issuing a license or document each state
shall: require the submission of the social security number by every applicant for a
Jicense or document." We assume that this is not true when the applicant does not
have a social security number and signs a certifying statement to that effect,
pursuant to Section 1331.6 (2) (d). If this is correct, then Section 1331.6 (a) (1)
should state “unless the applicant does not have a social security number and signs
a certifying statement to that effect, pursuant to Section 1331.6 (2) (d).”

Further, the procedures are unclear as to the process that states should
follow after the applicant signs the certifying statement. We assume that after the
applicant signs the certifying statement, states are to issue a license without a
social security number. If this is true, this should be specified in the procedures.

We do not believe it is reasonable that states be familiar with the numerous
INS documents listed in the appendices. We suggest, therefore, that the rules
provide for [NS to train states on an on-going basis at federal expense. The
training should instruct states to identify recent and current INS documents, as
well as possible forgeries.

In addition, [NS should provide states with a current version of each INS
document mentioned. Lastly, INS should supply the states with a new version
whenever they modify their documents.


121

Mr. McINTosH. Now, what would happen if someone like Ms.
Cross came back—and they probably do not even know that is hap-
pening—but suppose one did, and said, “Can you guarantee that
my drivers, license information has not been misused?” Would you
invest ?

Mr. Hotcoms. Yes, sir, Mr. Chairman. And we have had those
occasions where the information that has been made available law-
fully has then been redistributed and we do a thorough investiga-
tion. And there have been occasions where some of our users have
been removed from the list because they were not protective
enough of the information.

Mr. MCINTOSH. I am, unfortunately, going to have to go vote. But
one last question, Mr. Flaherty. Has your committee, with the Na-
tional Council of State islatures, taken a look at, say, a uniform
State bill on privacy rights like the Virginia one, or is that a
project that you all might want to take up?

Mr. FLAHERTY. It is something I am not aware that we have done
at this point. But our committees are all somewhat patterned on
the committees in Congress, and the times that we meet, three
times a year probably, it may be something that one of them may
be going into. I am not aware that we have done that just at this

point.

Mr. McINTosH. Mr. Holcomb, I wanted to also ask, the Vice
President has said that he agrees with us that the national medical
ID should not go forward until there are adequate privacy protec-
tions. Is that possible, to have adequate privacy protections, or
should we just drop that entire idea of a national medical ID? Any
views on that? Including Mr. Nojeim, if you have anything you
want to say on that. I understand Ms. Bitol was the one who ad-
dressed that, but if the ACLU has any comments on that, let me

Ow.

Mr. Nogem. In our experience, and this is unfortunate, when
privacy protections are built in, over the years, sometimes over the
months, they are taken away one at a time because somebody
comes up with a new use for the data that has been gathered. So
I rather doubt that there would be a way to put in place privacy
protections that would actually work for good.

The problem is that there needs to be a way, though, when a per-
son is, for example, unconscious and somebody wants to do some-
thing, they need to know what medicine that they are taking, that
kind of thing. There are going to be emergencies where that infor-
mation is going to be needed. So the problem is to respond to the
emergencies but without setting up this whole data base system
that has been proposed and is now on hold.

Mr. MCINTOSH. So it does not need to be centralized.

Mr. NoJEIM. It does not need to be centralized.

Mr. McINTosH. Any comments from any of the other panel mem-
bers on whether privacy protections are adequate, so at the Federal
level we should go ahead with some of these data bases?

Mr. FLAHERTY. I would only point out, it is interesting to note
the juxtaposition of when there yas been debate on the national—
the medical ID card, it has centered around the debate, should we
do this, this is a good thing to do, yes or no. In contrast te what
we have been talking about, with the driver’s licenses, where it just


126

their licenses and documents as well as to States that do not
The proposal also provides that aliens lawfully in the country
but not able to obtain a social security number may instead
present documentation showing their lawful presence.

The third requirement in §656(b) (1) (A) concerns the form of
the documents, and provides that:

(iii) FORM.-- The license or document otherwise shall
be in a form consistent with requirements set forth in
regulations promulgated by the Secretary of Transportation
after consultation with the American Asociation of Motor
Vehicle Administrators. The form shall contain security
features designed to limit tampering, counterfeiting,
photocopying, or otherwise duplicating, the license or
document for’ fraudulent purposes and to limit use of the
license or document by impostors.

The notice correspondingly proposes that the license or
identification document contain such information as the

jurisdiction of issuance; the full name of the applicant; the

applicant's date of birth; the applicant's signature; and a
physical description of the applicant, which may include sex,
height, weight, and eye and hair color. The document. would be
required to have one or more security features drawn from a list
of 19 such features, including ghost images, ghost graphics,
holograms, optical variable devices, and so on.

The agency reviewed the potential coste of this regulation,
using estimates it received from five States, and estimated that
the total national cost associated with the regulation would be
between $24.8 million and $72.6 million in the first year and
between $7.7 million and $51.7 million in each subsequent year.

Our purpose in quoting at length from the Act and the


150

110 STAT. 2026 PUBLIC LAW 104-191—-AUG. 21, 1996

42 USC 1820d-3.

“(ii) the costs of security measures;
“(iii) the need for training persons who have access
to health information;
“(iv) the value of audit trails in computerized
record systems, and
“(v) the needs and capabilities of small health care
providers and rural health care providers (as such
providers are defined by the Secretary); and
‘(B) ensure that a health care clearinghouse, if it is
part of a larger organization, has policies and security
procedures which isolate the activities of the health care
clearinghouse with respect to processing information in
manner that prevents unauthorized access to such
information by such larger organization.

“(2) SAFEGUARDS.—Each person described in section
1172(a) who maintains or transmits health information shall
maintain reasonable and appropriate administrative, technical,
and physical safeguards—

“(A) to ensure the integrity and confidentiality of the
information;
“(B) to protect against any reasonably anticipated—
“(i) Uhreats or hazards to the security or integrity
of the information; and
“(ii) unauthorized uses or disclosures of the
information; and
“(C) otherwise to ensure compliance with this part
by the officers and employees of such person.
“(e) ELECTRONIC SIGNATURE. —

“(1) STANDARDS.—The Secretary, in coordination with the
Secretary of Commerce, shall adopt standards specifying proce-
dures for the electronic transmission and authentication of
signatures with respect to the transactions referred to in sub-
section (aX1).

“(2) Erect OF COMPLIANCE.—Compliance with the stand-
ards adopted under paragraph (1) shall be deemed to salisly
Federal and State statutory requirements for written signatures
with respect to the transactions referred to in subsection (aX 1).
“(f) TRANSFER OF INFORMATION AMONG Heattit PLans.—The

Secretary shall adopt standards for transferring among health plans
appropriate standard data elements needed for the coordination
of benefits, the sequential processing of claims, and other a |

elements for individuals who have more than one health plan.
“TIMETABLES FOR ADOPTION OF STANDARDS

“Sec. 1174. (a) INiTiAL STANDARDS.—The Secretary shall carry
out section 1173 not later than 18 months after the date of the
enactment of the Health Insurance Portability and Accountability
Act of 1996, except that standards relating to claims attachments
shall be adopted not later than 30 months alter such date.

“(b) ADDITIONS AND MODIFICATIONS TO STANDARDS.—

“(1) IN GENERAL.—Except as provided in aragraph, (2),
the Secretary shall review the standards adopted un ier section
1173, and shall adopt modifications to the standards (including
additions to the standards), as determined appropriate, but
not more frequently than once every 12 months. Any addition
or modificat ‘to @ standard shall be completed in a manner
which minimizes the disruption and cost of compliance.



154

Advantages of the UHI

‘As privacy concerns have assumed center stage, the many compelling advantages of the UHI -
snchading aspects of a UHI that wall promote privacy —are getting Jost mn the debate. A unique
identifier would allow for more rapid and accurate identification and integration of the proper
patient records, so patients cen receive safer and higher quality health care. Every aspect of
health care — from making sure the right person gets the right blood transfusion to making sure
the right insurance company pays for care - requires sccurate identification of individuals. A.
‘unique identifier is desirable because the identifier used today is a person's name. Since names
are not unique we have to collect additional information to identify an individual such as birth
date, gender, SSN, and mother’s maiden name. As more information is collected error rates
increase. It is currently estimated that there is an error rate of 5 to 8 percent in identifying
patients. In addition, the information many people have an opportunity to see personally
identifiable information. Replacing a name with an identifier could reduce errors and provide
‘greater privacy protection

A.UHI can improve confidentiality, by providing accurate identification without unnecessarily
disclosing a patient's identity, For example, it can eliminate the need to use names on many
claims forms and clinical records. Tt can replace the multiple pieces of identifying information
(eg.. name, birth date, gender, SSN) about a patient thet today must accompany clinical and
financial information to ensure positive identification.

Being able to accurately and rapidly identify information about a patient, regardless of the health
‘care environment in which it was generated, would make the detection of health care fraud more
effective. In investigations focused on providers, use of the UHI would permit the paticats’
‘identities to remain anonymous. The added accuracy of the UHI would also be helpful for
research and public health activities.


CONTENTS

Hearing held on September 17, 1998
Cross, Celene, identity heh Yistim, Macomb, IL; Marvin Young, ident ity

theft victim, Oakland, legislative
American Civil Liberties intone Solange o Bitat legislative counsel,

‘American Civil Liberties Union; and Grover Norquist, president, Amer-
Fishetty Bran 6 mnectict State tative; George Grindley, Geo

rian, Connecticut representative; rindley, rr

ga, Site sephonentatve: and Richard D. Holcomb, commissioner, Vir-

Grindiey, George, Georgia State representative:

naiak Resets Paani

item

Richard D., commissioner, Virginia Department of Motor Vel

“5 formation concerning comments to NHTSA
statement

Kucinich, Hon, Dennis J., @ Representative in Congress from the State

of Ohio, prepared statement
Mcintosh, Hon. David M., a Representative in Congress from the State

au)

115
107

61

4
123
19

16


Federal Register/Vol €3, No_116/Wednesday, fune 1

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105

ginia’s ability to deliver driver’s licenses to our customers in a
quick and efficient manner.

Over the past 5 years, we worked very hard and I think have
been successful in achieving a national reputation as well as an
international reputation for service delivery that rivals and even
exceeds service delivery in the private sector. We have raised the
bar for delivery of government services, emphasizing service that is
fast, convenient, and efficient. And neither our Governor, Jim Gil-
more, nor I, would daresay that any of our 5 million drivers would
like to see this reputation damaged or diminished as a result of
this unfunded Federal mandate.

First, in regards to Social Security numbers, I am pleased, Mr.
Chairman, that our State is 1 of those progressive States that you
referenced in your opening statement. Back in 1995, under the
leadership of then-Governor George Allen, Virginia legislation was
offered and approved, removing the Social Security number from
the licenses. It is now optional; and since that time, 9 percent of
our drivers have selected that option and have had their Social Se-
curity numbers removed.

Obviously, to comply with this Federal mandate—because we
will resist any mandate that will put that number back onto our
license—but to comply with it, we will capture it in the bar code;
which still means it will be accessible to anyone who has a scanner
that can read a bar code, and we will verify it with the Social Secu-
rity Administration.

And, Mr. Chairman, that is where the nightmare will begin.
Using state-of-the-art technology, we currently are able to issue our
driver’s license in 1 of our 73 customer centers or even our 3 mobile
units. With an average wait time of 9 minutes, we are able to pro-
vide our license service in phenomenally fast order. During this
last fiscal year, we issued over 1.4 million original, renewal, or du-
plicate driver’s licenses.

Under this proposed regulation, at best we would add several
minutes to that process, and at worst we would have to revolu-
tionize our process and centralize it so that no one would be able
to leave one of our offices with a driver's license.

Certainly if you look at the speed with which that can be done,
that is a tremendous concern. There are other national programs
that have commitments to on-line checking time of 7 seconds or 3
seconds.

We also are concerned that the Social Security Administration
has seven potential responses, only one of which would be viewed
as a positive verification. And our question is: What do we do to
these Virginia citizens who, because of some bureaucratic snafu,
cannot have that number verified? Does it mean that they cannot
have their license issued or even renewed?

The other concern that we have got is trying to get our current
databank verified by Social Security. We have been trying to do
that for the last several years, to no avail, and would hope that cer-
tainly Social Security would be more willing to assist the States in
looking at the current databank and getting that in order before
this mandate would go into place.

We also think that the Social Security Administration would
need to be more user friendly and have a more comprehensive list


65

Loycw EXPLAIN THE THREE SUCTESSFUL METuCES, ALL OF we

ALL BERTH CERT:
y THE COUNTY RECORDER ANO THEY WEE BE IN THE COUNTY WHERE
ERSCN'S NAME, - ALWAYS REMEWEEA THIS -
LED IN THE COUNTY ARCHIVES AND A COPY MARKED *
ED", AND/OR “CERTISTE" WI=

2 iF YOu WANT IT

QIED WITHIN A FEW YEARS CF YOUR Z2ESDR acz,
RECCMMENDED CEFENDING GPGN WHERE Yoo £27
, SMALL, THEN AN CUT CF STATE PAPER IS TEE azsT
METHOD. MANY SUCH PAPERS CAN BE FOUND AT THE LOCAL LIBRARY. CNCE YoC
CATED A GCCD PROSPECT, YCU SHOULD FEEL CCMFORTASLE ARCCT THE
SOTIONS BEFCRE GCING AFTER

ERA HEME, CEMETARY, CR EVEN THE FAM!
BUELY OR ECYRESE
LikE 10 8£ SURE IT WAS HIM. IF THEY
ERTEDATE AND PLACE OF

G YOU A GAEATER PEACE CF MIND. FACTS GLEANED FRCM THE
SCE WOULD BE EXCELLENT PCINTS OF REFERENCE. USING YCCR

WAITE THE

THE PERSON'S BACXGRCUND, LITE SITUATION, ETC. WEEN YOU GET
THE FACTS YOU NEED, SIMPLY WRITE TO THE CLERK OF THE COUNTY WHERE TH:
ERSCN WAS ECPM, USING AN APPROPRIATE TITLE WHEN YOU WRITE, SUCH AS

=" OR “SEPARTMENT OF VITAL RECORDS", “BIRTH REGISTRATICNS", ETC. .
EET A “CERTIFIED COPY OF ‘YOUR’ BIATH CERTIFICATE”. SF SURE
TD ENCLOSE stloc (THE MCST COMMON FEE), AND YoU SHCULD RECE:

REGARD:



52

‘Mr. Chairman, members of the Subcommittee, My name is Brian Flaherty. I am a state
representative from Connecticut. I serve as the Deputy Minority Leader in the Connecticut
House of Representatives. I appear before you here today on behalf of the National Conference
of State Legislatures. I am vice-chair of NCSL's Assembly on Federal Issues. The Assembly
formulates NCSL's state-federal policies that serve as the foundation for our organization's

advocacy activities in Washington, D.C.

‘The National Conference of State Legislatures represents the legislatures of the fifty states and
the nation’s commonwealths and territories. This organization is an outspoken and firm believer
in our federal system of government. We consistently defend state authority, resist preemption
and unfunded mandates sek balance and flexibility in the delivery of services through state-

federal partnerships and act to protect the intergovernmental fiscal system.

Just over two years ago, a letter sent to the House and Senate leadership on a pending conference
committee on an illegal immigration reform bill stated: "...we write you to you today to express
our strong belief that the House should not accept the extremely ill-advised provisions of the
Senate bill that would federalize driver's licenses and birth certificates. These provision. .are
antithetical to basic principles of federalism and would impose new unfunded mandates on state
and local governments." The letter goes on to say that "...by forcing states to imprint (or verify)
Social Security numbers for driver's licenses, the federal government would be scomning the
considered judgement of 37 states that for reasons of crime prevention and personal privacy
choose not to use Social Security numbers as all-purpose identifiers." Mr. Chairman, that letter

‘was one that you and fourteen of your House colleagues signed. Yet, the conference committee


100

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26

Concerning the definition of a rule, we recognize that determuning the precise scope of
the definition as st applies to the widely varying rulemaking practices of the agencies involves
questions of legal interpretation. For these reasons, we would welcome the participation of the
agencies and the Department of Justice in developing a guidance that identifies the precise
contours of the definition in a manner that will best facilitate full compliance with the law.

‘As OIRA’s authorizing and oversight committee, we expect to participate in this process
at each step in the development of the guidance. We would prefer to begin this process of
consultation by the second week of October and would like to receive a proposed draft of the
guidance by the end of November. We believe that the end of March 1999 would be a
reasonable target date for issuing a final guidance, allowing the agencies a fair opportunity to
submit comments.

I would appreciate it very much if you could send me a written confirmation of the
understandings set forth in this letter by the close of business on Friday. If you have questions,
please call me at 225-4407.

Sincerely,

Mildred Webber

Staff Director

Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs

cc: Michelle Mrdeza

Subcommittee on Treasury, Postal Services,
and General Government Appropriations


22

secure a driver's license, there is no governmental seizure to be prohibited or controlled by the
‘warrant or probable cause requirements, Any privacy protection must therefore be statutory.

Twenty-five years ago, a Democratic Congress enacted, and a Republican President signed
into law, the Privacy Act of 1974, Congress feared that if the “use of the SSN as an identifier
continues to expand, the incentives to link records and broaden access are likely to increase.”

The Senate Committee report described the growing use of the SSN as “one of the most
serious manifestations of privacy concems in the nation,” including the risk that “the number may
become a means of violating civil liberties by easing the way for indexing of locating the person.”
Senator Barry Goldwater (R-AZ) spoke on the Senate floor in vehement opposition to the
increasing use of the SSN, calling on his colleagues “to stop this drift toward reducing each person
toanumber.”

For the most part, the Privacy Act only applies to threats to privacy by federal agencies and
does not stop state agencies and commercial interests from threatening personal privacy. In a sense,
Section 656(b) makes an end run around the Privacy Act by parking the personal information that
would be disclosed at the state, instead of at the federal level. In fact, Section 656(b) would
apparently represent the first time that the federal government had ever mandated that the SSN of
virtually every adult in the nation be tied to a physical description or photograph of the person in
records unprotected by the Privacy Act.

Twenty years afier the it passed the Privacy Act, Congress became troubled that state
DMVs were selling to commercial interests personal information about drivers for as little as $20
per inquiry. In one case, a stalker used information in state DMV records to find his victim. In
1994, Congress enacted the Driver's Privacy Protection Act to establish rules to protect the privacy
of the wealth of information drivers license applicants submit to their states in order to obtain a
license to drive, 18 U.S.C. Sections 2721-5.

The Driver's Privacy Protection Act cannot be relied upon to protect the privacy of drivers’
personal information, such as their SSNs. Though it would bar DMVs from disclosing certain
personal information (SSN, photo, address, name, phone number, medical information, but not
physical description) about the driver, and threatens violators with civil and criminal fines and
creates a civil cause of action for anyone whose privacy is violated, the statute lists 14 exceptions to
its protective provisions. It gives law enforcement at all levels of government, and insurance
companies and private investigators blanket exceptions, allows states to provide personal
information to mass marketers and solicitors unless the driver affirmatively requests that it do not,
and it allows any legitimate business to obtain a driver's personal information to verify the accuracy
of information the business claims the individual submitted to it.

‘More importantly, the statute has been successfully challenged on 10" Amendment grounds

in at least three jurisdictions. Two weeks ago, a three-judge pane! of the Fourth Circuit struck the
Driver's Privacy Protection Act as an invalid exercise of Congress's power under the Commerce


104

Mr. McInrosu. I turn to Mr. Davis to introduce Mr. Holcomb.

Mr. Davis. Thank you very much. Let me say it is a pleasure to
have Rick Holcomb here. He is our commissioner of De
ment of Motor Vehicles in Virginia. This is a State ney that
serves approximately 37,000 customers a day in its 73 customer
service centers across the State. In addition, he oversees the collec-
tion of aj proximately $1.4 billion in revenue annually for the Com-
mon’

While he served at DMV, he has implemented a number of
projects that have increased agency efficiency and produced posi-
tive results for customers: for example, i ition of the Knowl-
edge Automated Testing System; transformed DMV’s driver testing
by replacing the paper and pencil test with computerized testing.
My son flunked this last year when he went up for the first time.
But he flunked right away. I mean, he knew it very quickly. He

assed it the second time; straight A student. It was a tough test.
system enables DMV to provide effective testing and faster
service for customers.

Under Mr. Holcomb’s guidance, motor carrier functions were con-
solidated at DMV providing, for the first time, one-stop shopping
for Virginia’s truckers. Motor carriers can now obtain all operating
credentials and permits at a single location. Plus his plan has re-
duced duplication of functions such as auditing and accounting be-
tween different State agencies. One of his major initiatives cut the
process for driver’s license applicants from two steps to one, and
annually reduced agency transactions for original driver’s licenses
by almost half.

By processing licenses for new drivers at the headquarters site,
Holcomb has reduced traffic in DMV offices by at least 4,000 trans-
actions per month. That is saving money for the Commonwealth
and making s lier service for the customers.

I just note that prior to coming to DMV and putting such an out-
standing record there, he had a distinguished career on Capitol
Hill. He was chief of staff to John Linder, to French Slaughter who
was from Culpeper, VA, and to Craig James from the Daytona area
in Florida. He gained legislative experience when he served as gen-
eral counsel of the Senate Judiciary Subcommittee on Security and
Terrorism from 1983 to 1987, where he assisted Senator Jeremiah
Denton in drafting legislation ranging from bills on nuclear ter-
rorism to child abuse and child support.

Before that, he practiced law in Charlottesville and he was also
a member of the Virginia and D.C. Supreme Court bars, numerous
bars. He is also a native Richmonder and in 1976 graduated from
Hampden-Sydney College, in 1979 from T.C. Williams School of
Law at the Universit of Richmond.

We are pleased to have you here today, Rick. Go ahead.

Mr. Mcbvrosi. Thank you, Tom. I appreciate Mr. Holcomb com-
ing by today. And I can tell you that Mr. Davis does a great job
of. representing your State and your district.

Mr. Holcomb, please share with us a summary of your testimony.

Mr. Hotcoms. Thank you, Mr. Chairman. And thank you, Con-
gressman Davis, for that very generous introduction.

I would like to take my few moments to talk about the impact
that this legislation and the proposed rulemaking will have on Vir-


161

Page 3

unrelated to driving 1s likely to cause motonsts -- your constituents and AAA members --
= to voice their objections.

‘We commend Congress for holding a hearing on this issue, and we urge the
subcommittee to recommend a delay implementation of Section 656 (b) until sufficient
study can determine whether the costs (in time and money) outweigh the benefits.


164

STATEMENT OF

DAN STEIN
EXECUTIVE DIRECTOR

FEDERATION FOR AMERICAN IMMIGRATION REFORM
FOR THE

NATIONAL ECONOMIC GROWTH, NATURAL RESOURCES
AND REGULATORY AFFAIRS SUBCOMMITTEE
OF THE HOUSE COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT

Hearing on
Thursday, September 17, 1998

Summary: This statement is for a hearing on improving driver's license security
and underlying data to prevent illegal immigration and welfare fraud. FAIR
strongly supports Section 656 of IIRAIRA and the proposed implementing rule of
the National Highway Traffic Safety Administration. Both are designed to help
achieve greater drivers license security. Moving forward expeditiously with this
process is in the national interest. Failure to do so would be a cave-in to interests
that seek to smuggle and exploit illegal cheap labor at the expense of local
communities and taxpayers.


34

care, which will necessarily expose confidential information to a wider
network of people; and third, the unevenness of privacy protection
provided by current state laws to medical records whether kept on paper-
based or computerized information systems.

As more and more companies merge and interact with each other, the
ability for a company to run a database storage for medical records and
house a credit reporting database is not only a potential but a reality. Our
objections focus on the unrestricted access to private information by non-
health care providers, the potentials for abuse, and the government
implementation of a program that, from all indications, it does not have a
successful track record in managing. One need only look at the social
security number fiasco, the uniform drivers license requirement which
makes it almost mandatory for states to use social security numbers as
drivers license identifiers and other breaches of privacy facilitated by the
federal government.

Further with respect to the massive database industry, where patient
information has been cross-referenced with credit report header
information as we in Washington, DC found out earlier this year, when the
drugstores where we purchased our prescriptions were utilizing these
databases to target people as potential marketing prospects for new
drugs or refills. It is this unrestrained access to patient information that is
the problem, the result of an unrestricted arena in which patients are the
losers.

| submit finally that a national ID system, like a unique patient identifier,
poses a direct threat to personal privacy and to the security of personal
information. This Congress should focus on a solution to the overall need
for comprehensive personal privacy, not a way for Big Brother to further
ruin the personal, financial and medical lives of Americans.

Statement Prepared by:
Solange E. Bitol, Legislative Counsel
ACLU Washington National Office
In compliance with US House Representative Rule XI, clause 2(g) (4) the

American Civil Liberties Union receives no federal grant funding, and has
not received any federal grant funding in the two preceding years.


114

Mr. McINTosH. Thank you. I appreciate our coming and your
testimony. Let me make sure I understood. Your preference would
be to repeal the requirement. But if we leave it there, those are the
changes that you think need to be made.

Mr. Houcos. Yes, sir.

Mr. McINTOsSH. Have you submitted those comments to NHTSA?

Mr. Hoicoms. Yes, sir. We have filed our comments as part of
the proposed rulemaking, and I can provide those for the record
should you so desire.

Mr. McINTOSH. That would be freet, Thank you.

[The information referred to follows:)


185

showing them the way.”

Mr. Chairman, I want to take a moment to discuss the Citizen's Protection Act
of 1998, H.R. 4197. When I first learned about the proposed rule by NHTSA, I
introduced legislation which would revoke Section 656 of the Illegal Immigration
Reform and Immigrant Responsibility Act of 1996. H.R. 4197 would provide
general prohibitory language that no federal agency may construe any law as
authorizing, directly or indirectly, the issuance or use of a National Identification
Card.

I and many others, including millions of citizens, do not favor a national
identification card and are very concerned with the moves in this direction, as
well as with the method whereby this provision of law was implemented. When
[introduced my legislation, { held a press conference in my home state of
Georgia. Joining me at that event, where grassroots organizations as diverse as
the Christian Coalition and the American Civil Liberties Union (ACLU). They
pledged their support for this legislation, and stressed their opposition to a
national identification card. Since that press conference, groups such as Eagle
Forum, Americans for Tax Reform, the CATO Institute, the Coalition for
Constitutional Liberties, and others have raised their opposition to NHTSA
about the proposed rule and their support for individual constitutional liberties.

The IMegal Immigration Reform and Immigrant Responsibility Act was written
to assist in dealing with the increase in illegal immigration in the United States.
1 believe the United States needs to take steps to protect our borders and provide
the necessary resources to stop the spread of illegal immigration throughout this
nation. Some have argued Section 656 does just that.

‘These individuals say Section 656 was written to help employers identify illegal
aliens. However, each one of us here today knows that illegal aliens will be able
to obtain inexpensive fraudulent documents, which some businesses will use as
a way to justify that the individuals in question are legal while knowing there is
high probability the person is an illegal alien. These sweeping and far-reaching
proposed rules place the burden of compliance with a national identification
system on law-abiding citizens, and no real obstacle for an illegal worker to
obtain a fraudulent document.

The Clinton Administration recently proposed the establishment of a health


58

CONDUCT A STUDY, IF THERE IS A NEED.

‘The federal government can access various data as proof of identity, legal status or lawful
presence in the United States. The Immigration and Naturalization Service alone has 26
different documents that prove lawful presence. Federalizing the state driver's license process
and essentially requiring imprints of and/or verification of social security numbers seems like
document overkill.

If there is a need to assess best practices states use to verify identity-related information in the
driver's license issuance and production process, I urge you to direct the General Accounting

Office to conduct a study.

If, on the other hand, the real issue driving this bad section of law is the need for a national
identification card, then NCSL's suggestion is for both houses of Congress to call for a vote on
such. I would not urge you to pass it for the very same reasons we in Connecticut do not collect

social security numbers for use on driver's licenses.

FEDERALISM REVISITED

Less than two months ago, this subcommittee explored the topic of federalism and the issuance
of a new executive order, E.O. 13083, on federalism and intergovernmental relations. NCSL's
President, Representative Dan Blue, testified before you that day to ensure the reinstatement of

Executive Orders 12612 (President Reagan) and 12875 (President Clinton). In the aftermath of


11

SSA records to avoid unnecessary delays in our mail and telephone renewal
processes as well as for our walk-in customers.

Pre-validation of our existing records is the key to successful
implementation of social security number validation. On the other hand, DMV’s
system and, I suspect, SSA’s system will grind to a halt if we must validate every
customer's social security number when they come in to conduct a driver's license
transaction. Finally, the idea of turing away a customer and not completing his
or her transaction because we cannot validate the social security number or even
make contact with SSA is unacceptable.

Lawful Presence

Virginia is also troubled by the concept of lawful presence in the proposed
tules. Presently, we require applicants to prove identity and residency in Virginia.
The proposed requirement that citizens prove legal presence in the United States
or U.S. citizenship in order to obtain a driver's license or a photo identification
card is a radical departure from current Virginia law.

We understand the purpose of the Immigration Reform Act is to deter
illegal immigration into the U.S.; however, this should not be unduly burdensome
on legal residents, many of whom have held their driver's license all their adult
lives. We suggest that the rules clearly define eligibility requirements for a social
security number.

The rules should define what documents a person may provide to show
eligibility for a social security number, such as a U.S. birth certificate or a U.S.
passport. Once the rules clearly identify who is eligible, it will be the states’
responsibility to obtain proof of lawful presence from individuals who are not
eligible to obtain a social security number.

In addition, we respectfully suggest a further examination of the list of
lawful presence documents in Appendix D. In our opinion, this list is overly
inclusive in some areas.

For example, a B2 tourist (visitor for pleasure) in the U.S. could obtain a
driver's license by showing: a primary document such as an arrival-departure
record in a valid foreign passport; a secondary document such as a foreign


%

ETE: AFTER YOU ARZ THROUGH PLAYING WITH THE CARDS, YCU CAN Aigo
THIS SAME CREDIT RATING UP FOR YOURSELF UNDER THE-MAME YCU INTEND
REEPING AND REAP? THE SAME BEMEFITS AS ABOVE. THE ONLY OIFFEArICE
WOULD RE TUAT WITH TRE LAST CARD FOR YCURSELY, YOU WOULD RAVE TO Pay
BILLS AND KEEP EVERYTHING LEGAL, BUT YOU WOULD STILL GET ANY’
YOU MIGHT NEED. THIS PROCEDURE OF GETTING CREDIT ANC CREDIT Caats rs
MCT ILLEGAL. REMEMSZA THIS.

ETEA APPLY FOR MORE TURN CHE CERTIFICATE IN cord
> SAME MAME)

2. ONLY 28 a FEW STATES ARE BIRTH CERTIFICATES ISSUED AT THE STATE
LEVEL. APPROXIMATELY 10 MILLICN CERTIFIED COPIES OF EIRTH CEATIFICAtES
ISSUED EACH YEAR AND OVER 80% OF THESE ARE REQUESTED, PROCESSED,

MO-ISSUEO @¢ MAIL. THIS WAS THE ESTIMATE IN 1976, IT'S WOW WELL
VER 1S HILLICN EACH YEAR PROCESSED. MAME AND ADDRESS ARE USUALLY THE
icy roerrer ication REQUIRED BY THE AGENCIES. ©

E STATES, INCLUDING WASHINGTON, 0.C., REGARD ALL “VITAL RECORSS”
ALIC DOCUMENTS. A COPY WHICH MUST BE SUPPLIED TO ANY INTERESTED
AEGK. GTHEA STATES ONLY REQUIZE THAT THE PERSON WHO IS REGUESTING THE
WOH CERTICTCATE PE RELATED, OR MAVEA LEGITIMATE REASON AND NEED
THE DOCUMENT. TRE IDI METHOO (INFANT DEATH IDENTITY) IS THE BEST
‘TO OBTAIN A MEW IDENTITY THAT WILL BE SAFE AWO SECURE. IT'S ALSO
UEMELY DIFFICULT TO DETECT BY ANY LAW ENFORCEMENT AGENCY.

TO APPLY FOR A BIRTH CERTIFICATE, ALL THAT IS REALLY NEEDED IS THE
» PLACE OF BIRTH AYO MAMES OF THE DECEASED PARENTS, AND GF CCUASZ,
CAM BE ORTAINED FROM THE WEWSPAPERS DEAD FILES OF DEATHS. THE
‘OF EVENTS $$ AS FOLECHS, ANO THIS APPLIES TO THE ILLEGAL ALIEN

TALLY.


28

access to their records, including limiting some persons to specified
information only.

Additionally, redisclosures should be prohibited except with spe-
cific permission or, with very narrow circumstances, upon ex-
pressed statutory authorization.

We support Federal privacy protection in this area for three pri-
mary reasons: First, si ring technological innovations which
allow for the easy transfer of personal health information over
great distances; second, the expansion of managed care, which will
necessarily expose confidential information to a wider network of
people; and third, the unevenness of privacy protection provided by
current State law to medical records where they are kept on paper-
based or computerized information systems.

As more and more companies merge and interact with each
other, the ability for a company to run a data base storage for med-
ical records and house a credit reporting data base is not only a
potential but a reality. Our objections focus on the unrestricted ac-
cess to private information by nonhealth-care providers, the poten-
tials for abuse, and the governmental implementation of a program
that, from all indications, it does not have a successful track record
in managing.

One need only look at the Social Security number fiasco and the
uniform driver’s license requirement, which makes it almost man-
datory for States to use Social Security numbers as driver’s license
identifiers, and other breaches of privacy facilitated by the Federal
Government. .

Further, with regard to the massive data base industry where
patient information has been cross-referenced with credit report in-

formation, as we in Washington, DC, recently found out this year,
when drugstores where we purchased our prescriptions were uti-
lizing these data bases to t: people as potential marketing
prospects for new drugs or refills. It is this unrestrained access to
patient information t_ is the problem, the result of an unre-
stricted arena in which patients are the losers.

One need only look at the concerns that I have stated today, that
have been echoed by so many, to see the potential dangers posed
by implementing a national ID.

I submit, finally, that the national ID system, like the unique pa-
tient identifier, poses a direct threat to personal privacy and to se-
curity of personal information of all Americans. I urge you to con-
sider the fact that not only my privacy will be infringed upon but
your privacy as well.

I just want to shift gears for 1 second and say something per-
sonal, which is the fact that 7 years ago I adopted a daughter and,
like most teenagers, when she turned 17, I allowed her to get her
driver’s license here in Washington, DC, where we live.

As a protector of privacy, I know firsthand the dangers of putting
our Social Security number on your driver’s license—in fact, as a

wyer, I am frightened because I actually have a client named
Marvin Young and he doesn’t look like the gentleman sitting next
to me.

But the steps that I had to go through to have my daughter’s So-
cial Security number not used as her identifier—I had to have
three things notarized, I had to take time off of work, I had to go


93

BIBLIOGRAPHY

1 Tagas Savzngs and Loaz, "Busted", May-Juse 1989.

ational Assoctation of Credit Card Iaveszors
tan Profsse”, April 1969.

3. ‘Tines tncernatéonal, "Nigerians abroad - The Bad, The
‘Good, and The Ugly"

. Departzent of Justice

arian Herois Seugelins
eiietis 6/13/89.



TESTIMONY OF
CELENE CROSS

BEFORE THE ;
SUBCOMMITTEE ON NATIONAL ECONOMIC
GROWTH, NATURAL RESOURCES, AND
REGULATORY AFFAIRS

SEPTEMBER 17, 1998

My name is Celene Cross and I am a victim of identity theft. This is my story.

In September 1995, I received a phone call from a collection agency telling me
Towed $4,500 on a Citibank Visa to which I responded, "What Citibank Visa?" As it
tums out, I was listed as the primary person on this account of which J was not aware
and a man by the name of A.J. Woodson was listed as the secondary person which he
had opened a year earlier. I was given his address and phone number and was advised
to contact Citibank Visa and fill out a fraud affidavit, which I did. Citibank Visa
suggested I get a copy of my credit report to find out if there were any more
fraudulent accounts, which I did. I discovered he took out three other accounts using
my name and social security number. I contacted the three other banks, First USA,
Star Bank and AFSCI and filled out fraud affidavits with them as well.

To this day I have never met this person and have racked my brain trying to
think of how he could have gotten my name and social security number since I am
quite cautious with it. The only connections we seem to have is that we both attended
Western Hlinois University at the same time while he was a freshman and I was a
Graduate student and he is from Springfield, Hlinois and I lived there for a year. All
in all, he used approximately $17,000 worth of credit using my name and social
security number.

I thought this was a clear cut case of forgery since he had forged my name on
the credit applications and so proceeded to contact the U.S. Secret Service, the Postal
Inspectors in Macomb and Springfield and the Social Security Administration for
resolution to no avail. Upon further investigation I learned that the banks, not me,
were the victims and that they were responsible for prosecuting him, not me. { further
Jeamed that none of the banks were willing to prosecute him; after all, what would
they gain by doing so? I also learned that the U.S. Attorney's Office will not pursue
cases in which less than $100,000 worth of credit has been used. I filed a report with
my local police department in Macomb, Ilinois, which told me I would have to press
charges in the jurisdictions where the credit had been used. When I tried to get copies
of the accounts from the banks, they told me they could not release that information
since I had all ready reported it fraudulent.

I spoke to the State's Attorney in my local county, McDonough, who referred
me to the Sangamon County State's Attomey, where A.J. Woodson lived. Since one
of the accounts was a live loan for $1,000 and A.J. Woodson had forged my name on
the back of this check I filed a report of forgery against him with the Springfield
Police Department. About a year and a half later, the Sangamon County State's
Attorney charged Woodson with a misdemeanor theft under $300 and fined him $101



16

1, PASSPORTS WHICH ARE ESSENTIAL FOR INTERNATICNGL TRAVEL Caw ae
Use FGA ELTHER LEGAL ANO/OR LELECAL PURPOSES. BY DEFINITION, THE
PASSZORTS ASSISTS THE TRAVELER AND ATTEST TO THE FACT CF YOUR TOENTITY
SUSHI? OF ITS BEARER; THEREFORE, SPECIFIC EVICENCE oF roENT:
ENSHIP I$ RECUIRED FROM ANYCNE WHO APPLIES FCR A PASSPORT. A
BIRTH CERTIFICATE IS USCALLY THE ACCEPTABLE PROOF OF CIT=ZENSEZ?.
IQENTITY CAN BE ESTABLISHED ETTHER AY A GOVESSHENT ISSUES PHOT 1.0. (szcx
AS DRIVERS LICENSZ) CR BY AN AFFIDAVIT CF A WITIESS WHO RICHS THE
APPLICANT PERSCUALLZ. APPLICATIONS MUET EE SUEHITTED TN FERSCN BEFSAE

A FASSPCRT AGENT CR CTNEA ACTHCRIZED CFFTSTAL. AFTER AWAITING PER

CF SEvERAx SAYS, THE COMPLETED PASSPORT IS CELIVERED Ca PICKED CP BY

THE APPLICA

4. PREOR TO 1974, SS MUMBERS WERE ISSUED IM THE MAME OF ANY INDIVIDCAL
GPON SUBMESSICN OF AN APPLICATION FORM, IM PERSON, OR BY MAIL, WITHOUT
ANY PROOF OF IDENTITY. “IT IS WOW ReQuiayD THAT A DRIVERS LICENSZ,
}IRTY CERTIFICATE, BAPTISMAL CERTIFICATE OR VOTER REGISTRATION CARD

£ PRESENTED BEFORE THE ISSUING OF A SS CARD.

ORMALLY, THERE IS WO OSE OF A $S MUMSER FOR I.D. PURPOSES, BUT IT

3ES EUPSORT OTHER FORMS OF 1.0. IF IT IS NEZDED.

CTIVE SERVICE DRAFT CARD:

THIS OCCUMENT IS ISSUED TO, OF COURSE, MILITARY STATUS PERSONNEL OR
ING MEN ELIGIGLE FOR THE ORAFT SYSTEM. THERE ARE NO SERIAL NUMBERS,
PICTURE AND THIS CARD COULD BETTER BE USED AS BACKUP I.0. TO SUPPORT
\T YOU ALREADY HAVE AVAILASLE IF YOUR AGZ BRACKET IS BETWEEN 18 AND
WHERE BY CAW EVERY MALE TS SUPPOSED TO REGISTER. THEN YOU DEFINITELY
2 ONE CF THESE BUT IT IS NOT ESSENTIAL. .



82

yheani=g, OE the 30,000 - 50,000: Nigeztan: dt
is ds escizazad chac a aasotTly ate_ iavolvel in éraniusl segivic) SS
those, a scanctiy i0 + 15 percent are prose ‘for their fraudulent accivicies?
‘Ya order ts fully appreciate che extant of the Crines comattted by “Migerisas evo
underiving causes; the econocte conditions in Nigeria, and the mind-set of
Migertans shculé be explored.

Stacas, i: is

Ling with the forner alenent first, « brief history of Nigeria is in order.
zest pepulous courts; in Africa vith a population of 80 - 100

uillion pecpie conscizuting approxtsacely 250 tribes. These rrtbal groups
include the HAUSA and FULANI in the North, YORUBA in the Souch aud 130 in the
East. Many of the probien Nigerians come from the south, uainly BENDEL Stace,
ONDO State, CYO State and LAGOS Scaces. Many come from the YORUBA and 180
tribes, Ic should be noted chat Nigeziens are very tribal and thus organize
stn the C: tribal lines. Migerta

vizg 356,700
sh, hovever each cztbe

governenc is pet
ent cores fron ofl.
az of oft to the Un!

that Migeria fs a very affluent courtry,
unfortudacfly this de not che case. Greed and corruption at the upper echelons
of society prevent any trickling down of revenue to the majority of Nigerians.

Nigeria, lize most third vorld countries, consist of two socie-economée groups;
the upper and lower class, the laccer constituting the majority. Black Yarker is
away of life in Nigeria. Children are taught about the incricacies of the Black
Markec before they are Caught about math, science or history.

Ie 4s because of these econoaic conditions that many Nigerians opt to vecture to
more affluent countries to reap the ravards unobtainable ia their country.

In May of this year Speciai Agents from the U.S. Tnnigration Service atlanta

ce, while on a deporcation detail to Lagos, obtained some useful
concerning the mind-set of the eriningl Nigerians in the United
States. Nigerians see the Sniced States as the most affluent countz7 in the
world. This is portrayed to thea by Nigerians vho have returned from che U.S.
with the “bounty” of their criminal vors. Nigerians the U.S. through
rose colored glasses, vith streets lined vith gold, there for the taking. It is
because of this perception that many unscrupulos organizations prey on
imaigrants and noninmigrants bound for the U.S. Ova organization in particular,



don't faukt NHTSA for proposing this regulation. In fact, they have largely just
‘complied with what the law requires them to do. NHTSA submitted a statement to us for our
hearing record in which they state: “We ... have no programmatic interest in whether a final
tule is developed. We issued the proposal because we were directed by the Act to do s0, The use
‘of the social security number, which has proven highly controversial, has little bearing on the
safety mission of the agency,” They ask Congress to reconsider the statutory requirement for the
rule: ““To the extent that the controversy over the proposal is requiring us to address thousands of
‘comments from angry members ofthe public, we would welcome the Congress's reassessment of
subsection 656 (b) {the staute].”

|1don’t fault the authors of the law ~ they did not intend this law to create a national ID
‘card, But, unfortunately, it does, Now Congress ust deal with the very real, unintended
consequences of this regulation, and that may mean going back to the law and changing it.

(Other measures, such as a recently implemented database of all newly hired individuals
for the purpose of tracking deadbeat parents, raise more concems about exposing private,
personal information to the public. This database includes people's narves, Social Security
‘humbers, and wages.

Al these measures and others like them show a disturbing pattern of government
invasion of individuals’ privacy. This moming we will hear from two individuals who have
already suffered the dire consequences of baving their Social Security numbers stolen — an
invasion of privacy which is likely to become much more prevalent if a national ID card is
established. Celene Cross and Marvin Young have traveled across the country so that they can
‘warn others of the dangers of identity theft. T want to thank them and all our witnesses for being
bere today.

look forward to your insights, and 1 hope that. through this hearing, we can determine
some constrictive solutions tothe privacy problems that these government policies present.


110

within that time frame, then states should be allowed to issue a driver's license
without verification of social security number. Alternatively, we request that the
states be allowed to issue a temporary document when the SSA system is down or
falls below the guaranteed response time.

Non-mai wi

With regard to matches of social security numbers, we understand SSA
provides seven responses, only one of which is a positive verification of the social
security number. Does this mean then, that this agency would be unable to issue a
license in the case of the remaining six non-match responses? Or, will the rules
allow us to issue a temporary document in some of these cases.

Virginia wholeheartedly supports the concept of social security number
verification and we recognize the advantageousness of not issuing driver's
licenses to customers with potentially fraudulent documents. However, in order
for this proposal to work successfully for the states and our individual citizens, it
is critical that we validate social security numbers for existing records well in
advance of the October 1, 2000 deadline. Furthermore, it is essential that SSA.
provide us with some sort of remedy for customers who visit one of our customer
service centers but whose valid social security number somehow turns up as a
non-match.

In order to keep non-matches to an absolute minimum, we request that SSA
select a comprehensive range of data fields. For example, we believe that it will
not be adequate to simply compare the full name and social security number. The
SSA system should be flexible enough to accept variables, such as last name and
social security number, or a match on first and last names with the middle initial in
one record and the middle name spelled out in full in the other record. SSA’s
system should also be able to use other fields such as birth date, city and state of
residence,

Further, we believe that SSA should be ready to receive our files as soon as
possible in order for us to compare social security numbers in existing records by
means of batch transmissions. We suggest that this happen long before October !,
2000. In Virginia, customers will soon be able to renew their driver's license by
mail and by telephone. Therefore, it is critical that our current records match with


80

AN ANALYTICAL STUDY OF THE NIGERIAN PROBLEY
ATLANTA, GEORGIA

This report vas weiccen by Special Agents and of the
Aclanta District Office of the Immigracion and Naturalization Service.

BACKGROUND

Agents of

In April of 1989 a Nigerian Task Force (NIT) consisting of Specta!
Investigation,

P opite.of
"eopy: nancial transaction
Nigerians

DETAILS

The Nigerian probiea is noc rescricced to Atlanta. In fecc, sany 1
uecropolicen areas throughout che continenca! U.S. are also experiencing problers
associated with Nigerians and white collar crime. For example, in 1986, the New
York League of Savings Institutions discovered that there vas an organized fraud
ring in the Ney York area. This ring later became known as the "Nigerian Crine
Necwork" (SC¥).! The NCM is a very well organized and clever ring. The typical
perpetrator 1s a well educated biack male betveen the ages of 20 acd 40 years
old.! The type of fraud utilized by che NC¥ which ds the cornerstone of the fraud
used:in the Atlanca area will be discussed in detail later in this report. The
success of the NCN {2 based upon cheir accessibility to false identities (See
Exhibit 4).

Nigeria vas ouce a colony of Great Britain. Because of che British accent chat
igerians possess, they often attenpt to pass themselves off as Anerican Virgin
Islanders. This claim 1s seldom challenged by officials of financial and
tasurance institutions.



106

of data fields. For instance, instead of only verifying on full name
and Social Security number, we would hope that maybe they would
be flexible enough to accept such variables as last name and Social
Security number, or match on a first name, last name, with a mid-
dle initial and having that matched with one that has the middle
name spelled out.

We have some concerns about the concept of legal presence.
While in Virginia we require identity and Virginia residency, we do
not require legal presence, and that will certainly change the way
we approach things in Yirginia. But even so, if you look at what
appears on their appendix D, for instance, someone who only an
sesses a B2 tourist visa under the proposed rulemaking would be
allowed to get a Virginia license; while, on the other hand, someone
who may be a lawful refugee or a person lawfully seeking asylum
in this country may not be able to. So, we think at a minimum that
list needs to be looked at.

In conclusion, our major concern, however, is that this is an un-
funded Federal mandate. We note that the proposed rule states
that the President has included a measly $325,000 in the 1999
budget for the grants to assist the States. But, Mr. Chairman, I
will tell you that our cost to implement this unfunded Federal
mandate will exceed $1 million, and that includes what we antici-
pate to be $60,000 to $90,000 that will be paid to the Social Secu-
rity Administration to verify our existing file, as well as $18,000 a
year to continue to verify.

Mr. Chairman, this burden does become significant when taken
in conjunction with the weight of another unfunded Federal man-
date that the DMVs have, and that is the National Voter Registra-
tion Act, or the Motor Voter Act.

So in conclusion, Mr. Chairman, I do appreciate the leadership
that this subcommittee has taken in Jooking at an area and do ap-
preciate being given the opportunity to tell you what impact this
would have on our State. you.

[The prepared statement of Mr. Holcomb follows:]


91

SPECIAL AGRZCULIURAL WORKER PROGAAM FRACD

Ta 1986, the Congress
to addrass and alle

assed the Immigration Refora and Control act iz an atzen;
ace problems associated with an enorzcus and eve:
{nereasing illegal allen population within the U.S. As parc of the solution, the
Congress passed the Speciai Agrisuitural Worker Program (SAW), vhich aade ic
possibie for aany illegal allens cho had vorked in certain agricuicural jobs co
Decone legal residents of che U.S. through a gradual process. This process
included che presentation by the alten of proof that he/she had perioraed such
agricultural work (such as picking crops) in the fora of documentation.

This docvzentarion
chac che aiian per:
As has been encou:

y consists of a notarized letter fron a faz
such work on his fara duré:
tn otk

othersise procs:
cepeion.

an Task Fo
NCA

separate
chree gave scotere:
che facaieg, {3 currentiy being charged criminally and has given acacezents co the
effect chat there are a lot af people wao obtained. sinilar documentation through
a Liberian national in the Atlanta area.

CRIMES INVOLVING WORAL TURPITUDE (CIMT)

Tf an alten 1s convicted of a crime tavolving moral turpicude (1e: heft,
murder, forgery, etc), he/she 1s subject co separate adminiscrative violations in
addition co any crizinal paualcies. For example, a lawful permanent resident
alien who 1s convicted of a CIMT can be charged adainiscratively and deported
fron the U.S., depending on the circumstances.

Of the Nigerians included in this report, over 60Z had been convicted of CIMT
or were convicted subsequent co their arcest by this office nose, 2
rajority had auitizle convictions. Sore of chose arrested are in custody aad are
pending erial. Of course, a large aumber of Nigerians in this study have been
implicated in crines but never stood trial due to 4 lack of evidence in their
cases. On occasion, prosecution is declined because local, state, or federal
Prosecutors opt for deportation of the alien frou the U.S. instead of criminal
coaviction.

The reason for this undesirable situation can be attributed to the overburdened
erisinal juscice system in the U.S. Uncil this problem is addressed, Nigerians
and ocher aliens can come to this councry and perpetrate crines vith Little risk
og serving time in che country's penal institutions. When they are caught, they
are nerely deported and can be back ia business within weeks.


60

Mr. McIntosH. Thank you, Mr. Flaherty. Let me mention one
thing triggered by your testimony. I think Mr. Barr’s statute would
be an outright repeal and it would be the preferred solution. But,
if we for some reason have that blocked for whoever wanted this
provision in the beginning in the Senate and the House, another
option to keep in mind, and a less good option because it is not as
definitive, when the final regulation—if it is promulgated—comes
uP, is that the Congressional Review Act gives Congress the option
of nullifying it. And one interpretation, it is a new area, so we are
plowing new ground, but one interpretation of that act, if the agen:

says we have no choice but to issue this regulation and then
mngress nullifies it, is to have it effectively repeal the requirement
for that rule.

It is not as good, as I say, as an outright repeal but it is some-
thing to keep in mind, and you may want to take that back and
have the National Council of State Legislatures take a look at that.
Our staff has a fair amount of expertise on the Congressional Re-
view Act and would be glad to work with you on the legal questions
it might present.

Mr. FLAHERTY. I will certainly do that, Mr. Chairman. We have
a similar mechanism in the State of Connecticut.

Mr. McIntosu. In fact, ours is a less good one than many of the
States which can more easily nullify regulations, but we try to
model it on those. It is an example of an instance in which Con-
gress looked to the States for guidance and found a good thing.

Mr. FLAHERTY. We recommend that at all times.

Mr. McINTOSH. Before I turn to the rest of our panel, let me wel-
come to the hearing one of my good colleagues, Mr. Davis, who
serves on the Government Reform and Oversight Committee with
us. Thank you for coming by, Tom. Would you like to add any re-
marks?

Mr. Davis. Not at this point. When Mr. Holcomb speaks I would
like to give him a formal introduction.

Mr. McINTosH. While we are at a breaking point, I noticed my
friend Mr. Kucinich has come in. Do you have any remarks,
is, you want in the record?

Mr. Kucinicu. I do have a statement for the record, and I do

support our efforts and concerns about the national ID card.
ir. MCINTOSH. I appreciate ‘yon coming by.

[The prepared statement of Hon. Dennis J. Kucinich follows:]


56

‘citizens come into direct, face-to-face contact with government There have certainly been
problems with long lines. Progress has been made in several states to remedy these situations. It
is certainly not in my interest, and I would assume not in yours, to entertain ideas that will extend
the wait at motor vehicle license offices. However, section 656 (b) and its regulations are not
likely to help. NCSL only sees more complication, therefore more time, as a result of the

“federal” presence in the “state's” business.

Thirdly, the regulation states that “the application process for the driver's license or identification.
document shall include the presentation of such identity as required by regulations promulgated
by the Department of Transportation...and the agency proposes to list acceptable primary and
secondary documents.” The result here is obvious - a federally dictated, one size fits all, the
heck-with-what-the-state-experience-is document. States become nothing more than a
commandeered administrator of federal policy. Also, you ultimately end up with licenses that
“meet federal standards" or those that are likely not to be accepted for federal identification
purposes because they do not have social security numbers or meet other federally-desired

guidelines.

could go on and on. Instead, I will submit for the record NCSL's comments on the proposed
regulation, I also want to repeat that we can sit here all day long and beat up on the regulators
and their proposed regulations. We could also discuss modifying the law in hopes that more
reasonable regulations would follow. However, the only way we can bring common sense and

reasonableness to this issue is to agree to repeal Section 656 (b).


18
authority for the rule must be repealed. We urge you to take that
step by supporting and enacting the Citizen’s Privacy Protection
Act. Therk nos to big brother and no to the national ID card.

(The prepared statement of Mr. Nojeim follows:]


47

Mr. McINTOSH. Great. In fact, let me take off from that and
ask—and it was Congressman Barr’s bill, I guess it is H.R. 4197—
Is that the one you were referring to, Mr. Nojeim, that would re-
peal the section related to ID m ers on the driver’s license?

Mr. Nose. Yes.

Mr. McINTOSH. And then for any of you, Congressman Shadegg
has a bill that may come up next week on the sus sion calender
on identity theft that would actually make it a Federal crime to
steal someone’s identity, which Mr. Young and Ms. Cross had hap-
pen to them. Do you all support that type of legislation?

Ms. Biro. Yes; actually we do. But our concerns are that there
is no pending legislation that goes far enough in terms of what to
do. We can criminalize ID theft, but what do you do once your iden-
tity has been stolen?

Mr. MCINTOSH. How do you have restitution?

Ms. BiTou. Exactly. It is complicated to get a new Social Security
number, if not almost im ible. Plus ali of your good credit and
everything that you had behind you, how do you transfer that in-
formation over? it plus restitution, it is not OK to just make it
illegal, but you have to have something that goes further, to help
victims really to get their lives back together.

Mr. McINTOSH. Ms. Cross pointed out that the law considers the
credit card company or the person who had the money stolen, the
victim, not the person who had the identity stolen. I am not a big
fan of creating liability. But, obviously, nobody has the incentive to
monitor this other than the credit card company. Well, the credit
card company has a pretty good incentive. They don’t want to have
somebody ripping them off if they have to pay for it. But nobody
has incentive for the restitution for the victims like Ms. Cross and

. Young.

Would it be a good idea to put that liability onto the credit agen-
cies, the ones that report individuals?

Ms. BrTou. I guess that is assuming that there is some monetary,

ou know, amount that could assist. But we are talking about—you
w, she is relatively young—we are talking about potentially 60,

70 years into the future where her bad credit could continue to
haunt her, and I am not sure that there is an amount that you

could place on that.
I think that there has to be some t; of governmental method
for assisting victims with their Social ity numbers, with their

credit reports; not only that, but making it—I mean the liabilit;
with the credit card companies is one thing, but what about abil
ity with the credit bureau giving out that type of header informa-
tion, for changing addresses’

Citibank sits in North Dakota or South Dakota. It is easy enough
to call somebody’s office, “Does that person work there?” “Yes.” It
is difficult to verify employment. It is difficult to verify all of those
things. But once there is some t; of victim identified, helping
that victim sort of reclaim their life back, I mean that is of para-
mount importance and not so much punishing the person that does
it. To us, we see the victim that really needs services.

Mr. McIntosu. What do you think, Ms. Cross?

Ms. Cross. It seems to me that the banks, I know they check.
I know my sister had a credit card and she is in Illinois, and they


51

things. One, the regulation states a driver’s license or identification
document shall contain a Social Security number that can be read
visually or by electronic means. Yet the movement of the States,
which are often called “laboratories of democracy,” has been in the
other direction.

The regulation also talks about that the States have to verify the
validity of those Social Security numbers. Without an on-line or an
easy verification process available nationwide, therein lies a very,
very costly mandate.

And third, it talks about the application process for driver's li-
conses shall include ine sbyepentation of su identity as required

regulations promulgat yy the Department of Transportation.
What this really essentially leads to is a federally dictated, “one-
size-fits-all,” “the heck with what the State experience is” docu-
ment. And some States may end up with a Federal-accepted policy
and six States have chosen to have Social Security numbers on
their driver’s licenses. Others would not meet those standards and
it sets up a very difficult situation indeed.

This is the second time I have had the opportunity to testify on
Capitol Hill on NCSL, particularly where we think the Unfunded
Mandates Reform Act has been, certainly if not violated, outright
not followed in its spirit. Since its enactment, the Unfunded Man-
dates Reform Act has certainly stemmed the tide of unfunded man-
dates and it was certainly not meant to block them all; rather, to
serve as an early warning system. And it was certainly dismaying
that in the Senate’s consideration of this and the spreading out im-
plementation, the cost figure did not trigger UMBA, as we feel it
should have.

And we are not suggesti: Mr. Chairman, that there is some-
thing that the Congress should not be concerned with, the various
validity of the data, the proof of identity that is available across the
country. But if there is a need to assess the practices, perhaps the
GAO could be directed to look at where those actual deficiencies lie.
I am not aware that it has been said that the deficiencies lie within
the States and within our issuance of driver’s licenses.

Mr. Chairman, this subcommittee has certainly been very sup-
portive and very receptive to NCSL. Our president appe ere
not long ago on the subject of Executive orders on federalism. We
see this in a very similar light. And we certainly thank you for the
opportunity to come here and tell our story.

e prepared statement of Mr. Flaherty follows:]


19
RENT THE CFFICE AND INSTALL Two (2) PHONES, 1-24PLOYMENT, 1-cazsrT
RATING
MAKE APPLICATIONS FOR CREDIT CARDS USING BANKS AS
STORES PER PHONE
MAKE SURE YOU HAVE GCOD REFERENCES (THESE ARE NOT CHECKED)
WAVE A HOME ADORESS FOR THE LENDER WHERE YOU CAN GZT YCUR MA:
(NOT CHECKED)
WAIT FOR YCUR CREDIT CARDS TO ARRIVE
PURCHASZ LIMITS ON EVERY CARD (FLCOR LIMITS AND MAXIMUM LIM
RE LOANS

REFERENCES AND

CHECK WITH SANK ON MASTER CARD LCANS
LL TELL YOU)

AZPLY FUR BANK CARDS AT SEVERAL BANKS IN YOUR NAME

GO TO WORK AND XZE? PACE (TRACK) OF EVERY STORE THAT YCU GO TO
AND WHAT ¥CU SPEND, ESPECIALLY WHAT GARDS YOU USE - DO NOT PUSH
YOUR LUCK, BE CAREFUL AND SPEND TO THE LIMITS

(rse2 w



141

33220 Federal Register/Vol, 63, No. 116/Wednesday, june 17, 1996/Proposed Rules

‘Section 65600) ofthe Act. ented my
DEPARTMENT OF TRANSPORTATION, e560) fe Ac eutied provides, xe parent
0 ‘Assocation af Moter Vehicle
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Trae Recor Dewi press, Senet ‘encatoe documents
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134

all federal agencies may accept as proof of identity only a driver's license or
identification document that conforms strictly to certain, specific and uniform
requirements; and that ifa state driver’s license issued by any state fails in any
respect to conform to such requirements, it shall not be acceptable for any
federal purpose or by any federal agency. The proposed rule also requires that
all driver’s licenses or identification cards contain a Social Security number.
Individuals applying for driver's licenses will be required to provide a Social
Security number which will be verified with the Social Security Administration.
The number will be placed on the driver’s license.

‘The extended use of Social Security numbers in this manner could then justify
state and federal proposals to link even more private information, such as
health, education, banking, travel or firearm purchase records. While this
apparently was not the intention of that provision in the 1996 law, it will be its
result

Mr. Chairman, I want to take a moment to specifically state the proposed rule
by the NHTSA violates the basic principles of the Tenth Amendment of the
Constitution. Every state in this nation follows basic rules of the road when it
comes to qualifying for the privilege of driving. A stop sign in Georgia looks like
a stop sign in Indiana. However, driver's test are administered by each state, and
the license is issued by that state. Driver’s licenses are documents issued by the
states under their own purview, and their regulation has never been placed in
the hands of the federal government. The majority in Congress have taken
numerous steps to stop the encroachment of federal agencies on the rights of the
states. These NHTSA proposed rules are a clear example of the federal
government mandating to the states how to deliver basic needs to its citizens.

In addition, there is the belief the NHTSA has underestimated the cost of this
proposed rule which prevents it from coming under the provisions of the
Unfunded Mandates Reform Act of 1996 (P.L. 104-4). Documents show the
NHTSA’s estimates are drawn from only five states which are not a
representative sample of the United States. Information demonstrates that the
cost for one state could be as high as $25 million, In turn, the cost for all 50
states to comply will far exceed the $100 million cap established under the
Unfunded Mandates Act. Mr. Chairman, you and I, both support the Unfunded
Mandates Act because we were both sent to Washington with the message “Let
the states govern themselves, without the heavy hand of the federal government



13

Mr. McINTosH. Thank you.

What I will do is ask each of the witnesses to give their testi-
mony, and then I would like to explore even more, some of the
problems you have had. That is just incredible. And it sounds like
you ran into brick wall after brick wall both from the private sector
and the Government.

Our next witness is Mr. Marvin Young, who traveled here from
Oakland, CA. Thank you, Mr. Young.

Mr. Youn. Hi, how are you?

Mr. McIntosH. Good, thank you. Share with us a summary of
your testimony. As I said, your written remarks will be put in the
record in their entirety. But what happened in your case with the
identify theft?

Mr. Youne. I_ am originally from. Mississippi, and in Mississippi
they put your Social rity number and date of birth on your
driver's license. I don’t know if they still do, but back then they did.

In 1989, I moved to Oakland, where I live now. I moved in
with a roommate who promised to help me find a job. I didn’t have
a job when I moved out. And that sounded really good, that he was

ing to help me find a job. So, he wanted some of my personal in-
formation, and I refused to give it to him because I really didn’t
know him that well at the time. But I did show him my Mississippi
driver’s license and from that he took my information off my Mis-
sissippi driver’s license. He sent back to Mississippi and requested
a copy of my birth certificate, and they actually sent it to him. And
from that, my life has been really a living hell.

He opened up over 40 different accounts in my name. I have had
warrants out for my arrest. I work for a bank called Bank of Amer-
ica back in Oakland. And it was really hard getting a job because
they didn’t believe I was the person I said I was. But when I &
home one day, I received a certified letter from Sacramento, CA,
saying, Thad a warrant out for my arrest for check fraud.

did not even have a checking account myself. So what he did,
he had actually taken my name and my Social Security number
and date of birth and he rigged up some kind of fake driver’s li-
cense where he was able to get a checking account in my name. He
wrote over 150 checks, ranging from $5,000 up to $10,000. He
opened up different businesses in my name in Oakland, CA. He
went to Atlanta. He opened up businesses in Pensacola, FL. He
had a condo there in my name. He bought a car in my name. And
this goes on and on and on.

I bought a house in 1994, and I sold the house just recently and
tried to buy another house. And I cannot even buy another se

use they will not even give me credit. Back in 1993, I applied
for a job at the Federal Reserve Bank in San Francisco, and it was
really hard getting the job. I the job. I worked there for 3¥2
years. But they just took me ugh hell wanting to know who I
was and all this.

And the only way I got the job is that the last job I had, working
at the Bank of America, the manager had to write a letter saying
this is really Marvin Young and, you know, I had to answer so
many questions it was just so hard.

And even to this day, you know, applying for different credit
cards and wanting different things, never late ing a pay-


186

identification card. As each of us are aware, that proposal was almost
immediately withdrawn by Vice President Al Gore because of the far reaching
consequences of the proposal.

Mr. Chairman, the NHTSA proposed rule could lead the federal government to
obtain information and develop a database which can include medical,
economic, and personal information on each and every citizen, This type of
database clearly poses a threat to the liberties embodied in the Constitution.

The NHTSA has extended the period of public comment but only to October 2,
1998. 1 appreciate this, but it is not sufficient. It does not allow us to fairly
address this issue. I urge the NHTSA to rescind these proposed rules so Congress
can debate this important issue, and then provide an informed response to illegal
alien identification fraud.

Once again, I thank you for holding today’s hearing and look forward to hearing
the testimony of today’s witness.


55

unquestionably negatwve that the comment period was extended My sense 1s that the extended
comment period, through October 2 of this year, is just going to give you more evidence that

only a repeal of Section 656 (b) will cure the situation.

NCSL submitted its comments on the regulations on August 3. Several state legislators have
also submitted comments that mirror our organization's general concems. While I have no
intention of going into all of our comments, a sampling of the problems cited in the regulation
include the following: (1) the regulation states that "the driver's license or identification
document shall contain a social security number that can be read visually or by electronic
means...” The movement among states regarding driver's licenses is against mandatory use of
social security numbers and instead assignment of a random identification number (or allowing
the driver the option of using his/her social security number). The bottom line is this: there is no
compelling reason for forcing states to retreat to mandatory use of social security numbers. It
defies our experience and opens the door to concems regarding privacy and security that are best
left closed.

(2) The regulations state: *...that all states shall verify the validity of each applicant's social
security number with the Social Security Administration..." The overwhelming number of states
do not have centralized driver's license issuance. Therefore, all local and regional motor vehicle
offices would require installation of equipment making such verification possible, Some states
do not use social security numbers in the application process. For them, this is a major,
compulsory tumaround on their chosen public policy. Perhaps a larger problem is the matter of

turnaround time on license applications. Getting a driver's license is one of those moments when


2

at least, a Social Security number that is verified for each appli-
cant.

The privacy concerns surrounding this requirement are clear. All
a thief needs to do is take someone’s Social Security number, open
credit card accounts and bank accounts in someone’s name, and
ruin his or her credit for life. With a Social Security number, any-
one can find out almost anything about an individual on the Inter-
net, including where he or she lives, the type of bank accounts he
has, his credit history, the type of purchases he makes—some of
the most private information about an individual. This technology
gives stalkers and abusers easy access to their victims.

Many States are aware of these privacy concerns and are now

ing their laws so that citizens do not have to include their So-
cial Security numbers on their driver’s licenses. And I am proud to
say Indiana has such a system where it is optional if you want to
put that Social Security number on your driver’s licenses.

This regulation is moving in the opposite direction. And I do not
fault NHTSA for proposing the regulation. In fact, they have large-
ly simply complied with the law and what is required of them.
NHTSA submitted a statement to us for our hearing in which they
state, and I will quote,

We have no programmatic interest in whether a final rule is developed, We issued
the proposal because we were directed by the act to do so. The use of the Social
Security number, which has proven highly controversial, has little bearing on the
safety mission of the agency.

Let me digress for just a second here from the prepared remarks.
I have complained a lot about different agencies and the regula-
tions that they make over the last 10 years and oftentimes agencies
do have a defense: “Congress made us do it.” And in this particular
case, I think this is a legitimate point.

Therefore, it is important that we investigate the possible con-
sequences of these regulations and make our colleagues aware here
in Congress of the need to take action to change those juire-
ments and remove any requirements that threaten individual pri-

vacy.
ONATSA asked Co! s to reconsider the statutory requirement
for the rule, and I will quote again,
To the extent that the controversy over the roposal is requiring us to address
thousands of components from angry members & public, we would welcome the
Congress's reassessment of subsection 656(b).

I pledged to work with them to see what we can do about that.

I do not fault the authors of the law. They did not intend it to
create a national ID, but unfortunately it does. Now Congress must
deal with the very real, unintended consequences of this regulation.
That may mean going back into the law and changing it, as I have
sai

Other measures, such as a recently implemented data base of all
newly hired individuals for the purpose of tracking deadbeat par-
ents, raise more concerns about exposing private, personal informa-
tion to the public. This data base includes people’s names, Social
Security numbers, and wages. All these measures and others like
them show a disturbing pattern of government invasion of individ-
uals’ privacy.


162

AMERICAN ASSOCIATION OF aN

MOTOR VEHICLE ADMINISTRATORS AAM\A\
JOHN H. STRANDQUIST, CAE JAY DULANY, Chairman of the Board
President & CEO: Director. Division of Motor Vehicles.

pron

OPEN LETTER TO THE HOUSE GOVERNMENT REFORM & OVERSIGHT
SUBCOMMITTEE ON NATIONAL ECONOMIC GROWTH, NATURAL RESOURCES,
AND REGULATORY AFFAIRS CONCERNING THE USE OF
STATE-ISSUED DRIVER'S LICENSES AS A NATIONAL I.D. CARD

September 15, 1998
Dear Subcommittee Members:
‘The American Association of Motor Vehicle Administrators (AAMVA) is pleased to

provide the Subcommittce with its comments conceming the current debate over the use of
driver's licenses as a de facto “National LD. Card.”

In recent months, the Department of Transportation’s regulations to implement Section
656 of the Iegal immigration Reform and Immigrant Responsibility Act (“the Act”) have dravn
the ire of media outlets and privacy advocates across the nation. The common perception about
Section 656 and the implenting regulations is that they will require the states to develop a
national id. card to be used to track individual's movements in all facets of life. Nothing could
‘be farther from the truth. Section 656 does not require states to develop a national id. card, and
in no way does the Association condone or support the use of the driver's license to eatablish
such a document. Rather, Section 656 and the DOT's regulations are geared toward helping the
‘tates ensure that driver’s licenses are the most secure, tamper-resistant documents they possibly
can be. Toward this end, AAMVA js in fall support ofthe law.

‘Much of the cancer from individuals across the country has centered around the
requirement that license and i.d. card applicants present, and the state DMVs verify, social
security numbers for every applicant. The fear is that by requiring the SSN to appear on the
license, individuals will be subject to greater risks of having their identities stolen.

In reality, the requirement that individuals present » SSN is part of a larger emphasis in
the Act to verify the applicant's identity. In this respect, the regulations will help state motor
vehicle officials prevent the issuance of fraudulent drivers’ Hcenses and protect individuals”
identities. Unless the states are able to maintain the integrity ofa state-issuod license, they will
‘not be able to prevent individuals from stealing the identities of anyone they want. The
association stands firm on the principle that fraudulent driver's licenses threaten the lives and
identity of everyone.

“Exploring Global Solutions”

4201 Wilson Bivd, Suite 400+ Artington, VA 2203+ Telephone 709.522.4200 FAX 703.522.1553


a

A CUSTOMER'S PESTO oN THE CADE, AS A Clas

Mo PERSONAL T.D. INFCRMATE simiateag,
ACCCUNT NUMSER, AQ STATES THE GATE FCR WEICH THE CARD IS vai
THAT IS ACUT THE CNLY INFCRMATICN INCICATES Gi TEE cars
ING INCIVIDUAL DATA." TSE REST IS STORED IN THEIR Comer
BASED GN YOUR CRIGINAL CREDIT APFLICATICN.

IN TCCAY'S INCREASINGLY CASHLESS $c , CREDIT CARES ARE BECTM-
CINTRCLLASLE LOUK SETAEEN PECPLE, INCIME AND FxCPER"
IMMESIATIOY ACCEPTED FIR A MELTIT

PRIAICIAL

IUFINITEL:
MSELVES To SENG YC
SER THE NAME THAT YOU CRECCSE. TEE CASOIT

ISSUE THESE CARGS AND ARE ANXICUS FoR reoa TRACE, ANS COURLY ANXI=UE
THE REAL CARD TO ALL TEOSEWHO QUALIFY: SO, THE SECRET Is
UR_CWN CARDS LEGITIMATE2Y. YOU Dd T: BY STUDYING THEIR
BRCCEURES AND APPLICATICNS TC DETERMINE MCRE QR LESS WHAT TSEY Sx~
PECT EVEN THOUGH YOUR NEA NAME WILL EAVE BO EXISTING CREDIT RECCRS.

A $400 MINIMCM DEPOSIT AT A LARGE BANX WILL PUT YOU CN THE ROAD TO

A GEOMETRICALLY EXPANDING CARZSIT RATING. “(THIS WILL BE OISCUSSED I
GETAIL OM A SEPARATE PAGE AND BEADING AS TO EXACTLY ECW TO SET CF A
ce: NG LEGALLY.)

THERE IS A BCOX I STRONGLY RECCHMEND THAT -YOU READ BEFCRE YOU ATTEMPT
TO OBTAIN A’CREDIT RATING. IT'S ABSOLOTELY THE VERY S£ST THERE IS
AND I HAVE USED IT AS IT STATES AND RECEIVED A TRIPLE A CREDIT RAT-
ING WHICH IS THE BEST YOU CAN HAVE IN THE ONITED STATES. THE BCCK
IS CHOW TO BAVE TRIPLE A CREDIT RATING WITHIN THIRTY -(30) DAYS".

GET THES BOCK FRCM CONTINENTAL ADVISOR MANUALS, P. 0. BOX J-20C0,
HALLENDALE, FLORIDA 33009. TSE COST OF THIS BCCK IS $4.98 BY MA-
AND $2.00 FOR FAST DELIVERY. :



27

Mr. McIntosu. Thank you, Mr. Nojeim. I want to explore with
you those recommendations during the questions and answers.

Ms. Bitol, thank you for coming today. You are also with the
American Civil Liberties Union, and I appreciate your work. Share
with us a summary of your testimony.

Ms. Biro. Thank you, Mr. Chairman.

On behalf of the American Civil Liberties Union and more than
275,000 members nationwide, I appreciate the opportunity to tes-
tify before you on the narrow issues of the problems concerning es-

lishing a unique patient identifier which is mandated under the
Kassebaum-Kennedy Health Insurance Portability and Account-
ability Act of 1996.

The dangers posed by a unique patient identifier are no different
than those dangers posed by a national ID. Both will allow unfet-
tered access to personally identifying information to anyone with
the proper keys. Besides information about physical health, med-
ical records may include information about family relationships,
sexual behavior, substance abuse, and even the private thoughts
and feelings that come with psychotherapy. This information is
often keyed to a Social Security number.

Because of a lack of consistent privacy protection and the perva-
sive use of Social Security numbers, individuals’ information may
be easily accessible. In fact, any private investigator will tell you,
if you have a Social Security number of an individual, you can have
access to almost any information about them.

Currently, there is no comprehensive Federal law to protect the
privacy of health care records. Our educational records receive pro-
tection. Even our video records remain private. However, public
perception is that there is Federal privacy law to safeguard medical
records and that there is Federal law that gives patients the right
to access, review, and comment on those medical records. Unfortu-
nately, this perception is false.

The danger with this one-way system is that once personal infor-
mation is collected for one purpose, the temptation to use it for an-
other is often irresistible. The unauthorized use and abuse of this
confidential information is already widespread. Most Americans
would be alarmed to learn how many pairs of eyes are scanning
what they thought was privileged communication with their doctor.

According to a recent Time Magazine article, trading of health
information has already become a $40 billion industry. A report by
the Institute of Medicine noted that the roster of parties claiming
a “need to know” what is in an individual’s medical records was too
numerous to list.

The problem of protecting privacy, especially medical privacy, is
that many perceive the need for a balancing test, balancing privacy
with the needs of industry research and technology. While techno-
logical advances bring tremendous benefits to society, this quid pro
quo should not and need not be the loss of control over our own
personal information.

It is the position of the ACLU that strong Federal regulation
which establishes enforceable privacy protection for personal health
information is critical. The ACLU supports Federal legislation that
provides individuals with meaningful control over who may have


69

IF YCU APPLY IM PERSCN AND ARE QUESTIGNED AS TO WE YCC EAVE NET;
HAD A SCCIAL SECURITY CARD IN THE PAST, JUST TEL THEM THAT YCU Hz!
ALWAYS EARNED YOUR LIVING BY WCRRING-CH A COMMISSICN BASIS, suCH az
SALESMEN, THEY ARE EXEMPT FRCM HAVING A SOCIAL SECURITY Caan. Rz-
MEMBER TCO, THAT IF YOU ARE ASSUMING IDENTITY OF $

RECENTLY, YCU
ome.

CARED az
ERMINE TEE OF:
Zu AECCT APPROPRIATE ANSWERS, DICTA’
‘THE RESULT WILL #2 THE SAME, HOUR CARS
ARAIv2 Tt IMA SECRT TIME. THE REASCN 76R GETTING THE goczaz
SECURITY CARD BEFCRE THE DRIVERS LICENSE IS THAT NCW A Lot CF statss!

THE SCCIAL SECURITY CARD NUMBER CN DRIVERS LICENSES. .

ou DRIVERS LIC

ME ORIVERS LICENSE BAS BECOME THE MOST COMMONLY AND ACCEFTED Fort
CF £.0, IN THE WHCLE UNITED STATES. GACH STATE BAS ITS CWI ACMTYZ3-
TRATICN FOR OBTAINING THEY UUDER SUCH TITLES AS “DEPARTMENT CF MOTOR
VEHICLES”, “GEPARTMENT OF TRANSPORTATION’, OR “DEPARTMENT OF PUBLIC
SAFETY", AND THEIR CNLY REQUIREMENT IS PROOF OF AGE FOR MINCES. A
CERTIFICATE CF BIRTH OR BAPTISM IS ALWAYS ACCEPTABLE. EVEN IF YOU
HAVE MO 1.0., TELL THE CLERE YOU RAVE LOST YOUR WALLET, OR SIMPLY
NEVER HAD A ORIVERS LICENSE BEFORE, OR THAT YOU HAD A ORIVERS LI-
CENSE PREVIOUSLY IN THAT STATE, BUT IT WAS OVER TEN(10) YEARS BZ-
FORE AND THAT YOU HAVE BEEN OVERSEAS FOR THE PAST WINE (9) YEARS.

BE SURE TO CHECK THE STATE REQUIREMENTS BEFORE YOU APPLY AND BAVE
THE NECESSARY PAPERS AND ANSWERS READY BEFORE APPLYING. THERE ARE
SEVERAL STATES THAT USE THE SOCIAL SECURITY CARD MUMBER GN THETR LI-
CENSES. BE SURE TO CHECK THES FIRST BY GETTING A COPY OF THE STATE'S
“DRIVERS LICEYSE MANUAL” BOOKLET. THE STATES THAT ARE USING SOCIAL
SECURITY MUMEERS ARE TOC NUMEROUS TO MENTION, SO CHECK FIRST.



145

33224 ‘Federal Register/Vol 63, No_116/Wednesday, June 17. 1998/Proposed Rules
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62

Mr. McINTOsH. Our second witness on this panel is Mr. Grindley
from Georgia. Thank you for coming. Share with us a summary of
your testimony.

Mr. GRINDLEY. Thank you, Mr. Chairman, and members of the
subcommittee. I would like to take this opportunity to thank you
for inviting me here to testify about this very important issue that
affects every American citizen.

Tama member of the Georgia General Assembly. I have been
there two terms. And over the last couple years, I have been very
interested in issues of privacy and I have passed some legislation
regarding it. I recently pushed through the Georgia House legisla-
tion that would remove Social Security numbers from driver's li-
censes. I went first to the head of the State Patrol, and got his au-
thorization. He said, it would be no problem. It passed overwhelm-
ingly. After we left ‘the session, he wrote a letter to the Governor,
w him to veto it under some guise.

t turned out that the reason for this urged veto was he found
out that if he didn’t place Social Security numbers on the driver’s
licenses by the year 2000, there would be Federal money taken
from the State of Georgia. Luckily, through the media we raised
public concern about my proposed legislation and the Governor did

sign the bill.

a a nutshell, Mr. Chairman, I introduced this legislation be-
cause millions of Americans realize that the use of the information
superhighway has continued to expand and there is a new type of
fraud that is available. With just a few pieces of information, like
what has already been expounded on here, people are able to trans-
fer money from your bi account. With only the last four digits
of ur Social Security number, crooks can authorize credit cards

80 on.

orThe key to unlocking all these doors is through the Social Secu-
rity number. Through my research I found out that in the State of
Georgia, if you have someone's Social Security number, name and
address, it is worth $50 on the street. You can see the multiplier
here, On one hand, $50 isn’t a lot, but it can quickly ruin someone’s

fe.

There is something else that you need to be aware of that I just
found out about yesterday. There is an Internet address of
gong ary com where I went yesterday and signed up. I was

to try to get your Social Security number for this meeting but

es a couple of days. For only $12.50 I can get the most_per-
ak information that you can imagine, including your Social Secu-
rity number. There is another data-base that for $30 I can get your
mother’s maiden name. What possible use would you have for this
information other than to v. and to use this for fraudulent ac-
tivities?

There are some 10th amendment questions here. Probably the
biggest concern I get from my constituents is about encroachment
on the States by the Federal Government. You all know, no offense,
it seems like you are making a huge power Bee, Over and over my
constituents are saying, “Can we do something?” And, you know,
the folks I talked to said, well, you can’t start a lawsuit until you
can demonstrate that somebody has been personally damaged, be-



20

‘THE PROPOSED ID SYSTEM AND CARD

Background, Section 656(b) of the Hegal Immigration and Immigrant Responsibility Reform Act
of 1996 requires the Department of Transportation to issue regulations that would effectively coerce
every state to place every driver’s social security number on the license or other identification card
the state issues. Any state that did not comply with this federal mandate would be required to verify
the social security number with the Social Security Administration ("SSA"), of, in the alternative,
the driver's license or other ID card the state issues would not be acceptable for federal
identification purposes. Section 656(b) also requires that these state-issued driver's licenses and ID
cards follow a “form” dictated by the federal government. The DOT has proposed that the "form of
the document include a physical description of person to whom it pertains, which may include
gender, height, weight, eye and hair color, a color photograph or image of the person, and his or her
address,

‘Make no mistake. This stanute requires states to issue ID cards that conform to an exacting
federal standard including a photograph and physical description, and which would be supported by
systems of records that would be linked or matched to other records by reference to the SSN of the
driver. This is a national ID system. It is supported by state-issued identification documents that
are federalized because they must comport with the federal standard. Section 656(b) reduces states
to mere tools of federal government for purposes of issuing ID documents because the content and
form of documents they issue are dictated by the federal government. Because the federal
government dictates what goes on the ID card, and because it effectively requires that records of the
‘identifying data be tied to a federal identifying number, states would henceforth issue what are in
essence national ID cards.

Coercing the States to Comply, and To Threaten Privacy. States have no real choice but to issue
documents that meet the federal standard. If they fail to do so, their drivers will be unable to secure
federal benefits including Social Security, enter many federal buildings, sit for the civil service
‘exam, serve on a jury in a federal case, register for the Selective Service, or obtain passports that
allow them to exercise their right to travel, Imagine going to the Post Office to get a passport so
‘you can travel to Europe on your honeymoon, and being told that the federal government will not
‘accept your state-issued driver's license as ID. No resident would stand for it; no state would risk it.
To avoid citizen complaints, all states will issue documents that conform to the federal mandate and

procedures.

In addition, many states will be coerced into putting the SSN on every driver's license and
identification card. In various comments the states have filed with the Department of
‘Transportation, state departments of motor vehicles ("DMVs") have made it clear that verifying the
SSN would inconvenience drivers and cost millions of dollars to the states. States would have to
hire data entry clerks tasked with verifying SSNs. Many drivers would be compelled to wait in line
at the state DMV, then go to the nearest office of federal Social Security Administration to wait in
line again because their SSN did not exactly match their name. Then they would have to go back to
the DMV to wait in line again, in the hopes that now their SSN would be verified. Lines at DMVs



37

“A National ID Card:
Big Government at its Worst or Technological Efficiency?”

Hearings before the House Commmittee on Government Reform and Oversight

Subcommittee on National Economic Growth, Natural Resources, and Regulatory
Affairs

Testimony of Grover G. Norquist
President, Americans for Tax Reform
September 17, 1998

Mr. Chairman, my name is Grover Norquist and I am President of Americans for Tax
Reform (ATR), a national coalition of taxpayer organizations with a strong interest in
lower taxes, smaller government, and taxpayers’ rights. ATR is particularly concemed
with taxpayer privacy in the era of electronic commerce. I might also add that ATR
receives no government funding and strongly opposes the use of taxpayer dollars to lobby
Congress.

ATR sponsors the Taxpayer Protection Pledge which is a written pledge by candidates for
office not to raise taxes once elected. In the House and Senate, 207 Representatives and
42 Senators are Pledge signers. Aside from our work in electronic commerce and
encryption, another ATR program that is highly relevant here is called “In Half.” ATR
supports the goal of cutting the size of government as measured by the share of national
income it consumes in half over the next twenty years. In a forthcoming book I will
present a detailed plan explaining how to do this. Here I mention it because it
foreshadows my single most important policy recommendation: if you don’t want big
government to become Big Brother, you should not let government get big in the first
place.

Let me start by thanking you, Mr. Chairman, for holding this very important hearing
today on the theme of “A National ID Card: Big Government at Its Worst or
Technological Efficiency.” You have chosen a title that shows you well understand the
problem before us today. I firmly believe that because of this grave subject matter the
small hearing we hold today will in fact be one of the most important such meetings held
in the 105" Congress.

1 also thank and salute Rep. Bob Barr of Georgia for having had the insight and wisdom
to recommend that you hold this hearing. I will do my best this morning to validate Rep.
Barr's Very worthy concems and I will do him one better by urging you to make to make


156

identifier for health care, Congress will later enact legislation requiring it to be used for purposes
other than health care, a it has many times with the SSN.

Others are concemed about any identifier that requires a trusted third party for administration,
because they fear the administrator will be the goverment, and that the government will thereby
Ihave open access to everyone's medical records. While we are sensitive to this issue, it will be
critical forthe public to understand that, like bank records, a single administrator is not required.
Biometric identifiers, while often viewed as still in the realm of fantasy, are rpidly becoming
‘more accurate and cheaper, and would not require a trusted third party. HHS intends to publish
{8 “Notice of Intent” (NOI) which would discuss these and other technical issues in considerable
detail to get public feedback before proceeding further on a standard for the UHI.

‘The Administration's Response

Jn September 1997, the National Committee on Vital and Health Statistics (NCVHS), an
advisory committee to HHS, recommended that the agency not adopt a standard for a unique
identifier for individuals until after privacy legislation is enacted. In light ofthis
recommendation and in response to the lack of consensus, HHS decided against issuing an
NPRM for the individual identifier, and instead opted for lengthening the public process for
discussion of the issues surrounding the UHI. Instead of a proposed rule, HHS is preparing
Notice of Intent (NON). The NOI would not make any recommendations or proposals, Tt would
describe the UHI options, including their administrative, cost and privacy implications, and ask
for public input on concems, possible approaches, and alternatives. We wil publish the NOI in
the Federal Register with a 60-day public comment period.

In addition, HHS asked the NCVHS to hold a series of public hearings on the individual
{identifier and its associated issues. Three to four public meetings are planned. The first hearing
‘was held in Chicago on July 20-21, accompanied by national media attention, Based on its


ST

ABUSING THE UNFUNDED MANDATE REFORM ACT

I would be quite remiss, Mr. Chairman and Subcommittee Members, not to mention the
Unfunded Mandates Reform Act. I believe that UMRA has been a positive influence on the
legislative process. None of us ever believed that UMRA would halt, forever, any unfunded
federal mandate, For the most part since its enactment, the tide of unfunded federal mandates
has ebbed significantly. There are a few notable exceptions, and perhaps, not surprisingly, they
deal with the subject of today's hearing. When Section 656 (b) was adopted, Senate sponsors of
the language, in order to skirt the UMRA point of order, spread out the implementation time of
the proposed law. In doing so, they were able to undercut a cost estimate that easily took this,
section over the $50 million threshold, NHTSA has taken similar action in determining the cost
estimate for the proposed regulatory charge in relying on data from a non-representative group of
states to bring the estimate under $100 million. NCSL's estimates indicate that implementing
656 (b) and its corresponding regulations will place a substantial cost on state governments that

will exceed the $50 million threshold set in UMRA. But there is yet more insult here. In

preparing its regulations, NHTSA completely ignored its mandated responsibility to consult with
elected state and local officials and their organizations when preparing the proposed regulations,
Had they done so, we could have discussed cost estimate methodology and assumptions. I
cannot help but reiterate that a bad section of law can only produce bad regulations, and in this

specific instance, improper regulatory processes.


23

‘Clause in violation of the Tenth Amendment Condon v Reno, 97-2554, US App LEXIS 21557
(4th Cir. September 3, 1998). The federal government argued that drivers possess a nght to privacy
in the information maintained in state motor vehicle records that Congress can secure under the
14th Amendment. The court rejected federal govemment's privacy argument because: (i) the
‘Supreme Court has never found a constitutional right to privacy with respect to the type of
information found in motor vehicle records, which traditionally have been open to the public; (ii)
the type of information in motor vehicle records is available from other public records such as
ty tax records; and (iii) the information in the records is commonly put on the driver's license
provided to strangers when a person cashes a check, boards and airplane, or purchases alcohol.
Federal courts reached similar conclusions in Wisconsin (Travis v. Reno, No. 97-C-701-C, US
Dist. LEXIS 8570 (W.D. Wisc. June 9, 1998) (appeal_pending)) and in Oklahoma (State_of
‘Oklahoma v. U.S., 994 F. Supp. 1358 (W.D. Okla. 1997)), and reached the opposite conclusion in
Alabama (Pryor v. Reno, 998 F. Supp. 1317 (M.D. Ala. 1998).

Jn many states, the state “open government” laws permit disclosure of personal information
in the state driver's data base to a great degree. ACLU is a strong proponent of openness in
government and favors many such laws because openness sheds light on secret governmental
activity that could violate civil liberties. Suppression of information of public interest infringes on
First Amendment rights by narrowing the range of information that enters the marketplace of ideas.

‘The Driver's Privacy Protection Act cannot be relied upon to protect the privacy of drivers’
‘SSNs in state DMV data bases. But it does illustrate that the best way to protect the privacy of such.
information is to prohibit (or to remove incentives to) collection of the SSN in the first place, rather
than to control and punish disclosure after the SSN has already been put in a system of records
maintained by a state. Section 7 of the Privacy Act originally prohibited states that did not already
do so in 1974 from denying drivers licenses to applicants who refused to provide their SSN. This
protection was reversed in 1976. 42 U.S.C. Section 405(cX2XC)(). Section 656(b) does much
‘more than permit states to demand the SSN of their drivers for their DMV records; it coerces states
to put the SSN on the license itself.

Potential for Misuse. Using the SSN as an identifier on federalized drivers licenses, as is
contemplated in Section 656(b), would subject people to privacy intrusions, such as government
surveillance and increased data collection and sharing.

‘There are clear examples of how government-collected information has been used for a
purpose other than that for which it was initially intended. Call these "cases of authorized misuse”
to distinguish these abuses from criminal activity, such as fraudulent activity from ID the.

For instance, the confidentiality of Census Bureau information was violated during World
War IL to help the War Department locate Japanese-Americans so they could be forcibly moved to
internment camps. During the Vietnam War, the FBI secretly operated the "Stop Index” by using
its computerized National Crime Information Center (NCIC) to track and monitor the activities of
people opposed to the United States’ involvement in the war. The government's thirst for personal


143

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89

Another popular ana very lucrative insurance fraud tovolves Life insurance
policies. Recently a Nigerian tourtsc cage Co the Atlanta area to visic his
wife, who resides here. While here, be cook out a $700,000.00 life insurance
policy. fe then ailegedly went back to Nigeria and died shortly thereafce:

widow chen fied for her claia, and proof of Ais death, she auba:
phococopy of her husband's Nigerian death certificate (without official

@ poco of the deceased laying in a casket. Obviously, the potenti
of this sature {3 great, since any documentation originacizs i:
suspecc.

Nigeria is

5 imsuranca and business cheft insurance. Some

ordiag to one insurance company, have beer found
following an alleged burgia Ho:

quancicies of jevelzy,

Other frauds inctude home-ount
Migerfan busizess owners, ac
submiczing fraudulent stock tavoic
burglaries igo staged, wi:

+ being raporzed!y stolen.

ported ¢9 law andor
aofi th and coure chen as 3
heir losses ac $3,000,000.00/year na:
and adds thar this is fuse the "tip of the ics:
prosecucion ce fraud, many

toa, uany Yige
2's, Fel's) are able to conduct these frauds vichour che ng fa: y
Immigravisg auchorities, since District or Regional policy ts to decain only
aliens coaviccad of erizas.

crpes of frauds

lack ¢2

Thera have been several instances ia the Atlanta District where such aliens have
been repeatadly arrested and released due to lack of # criminal conviction.
These aliens sudsequencly go back incs che comunity and continue to file
fraudulent insurance clains co support cheaselves. The only lesson they leara is
chat ingurance fraud {s a very easy, lucrative business and that there is no
fective system in place to deal with such violations. They also discover that
as long as they avoid being convicced, the Immigration and Naturalization Service
Will be very Limited in its ability co act affectively agatuse thea.

ADMINISTRATIVE VIOLATIONS

In addition to the aforenentioned criminal activities, eany Nigerian nationals
also are found to be in violation of the administrative codes and regulations of
the United States. This 1s especisily true when speaking of immigration
violations, since many Nigerians come Co the United States aot for legicimace
pursuics but ioscead coma here co pursue less than Legal activities. The
following is a breakdown of che aost often encountered administrative violations
as experienced in che Aclenta District. Thece figures are compiled from daca
relating to arrests made by the Migerian Task Force of the Iamigration and
Waturalizacion Service in Aclanca, Gaorgia since April 1989.



44

key would linked to an identity verification system called “ceruficate authority ”
Fourth Amendment protections of the keys and other confidential information stored
this way would be greatly curtailed if not completely eliminated in some draft
legislation, such as the original McCain-Kerrey “Secure Public Networks Act,”
introduced in the Senate last year as S. 909 and fortunately since amended to be
slightly less offensive.

Incredibly, the exact dimensions of the problem are not entirely clear. A search of the
Library of Congress Information System conducted by Americans for Tax Reform
Research Director James Lucier almost two years ago discovered up to 300 bills
considered in the 104" Congress that would have created, modified, or expanded
databases on U.S. citizens. However, research on the topic is complicated by the fact that
current Library of Congress classification systems for legislation do not include a well-
defined category for bills that deal primarily with federal databases. This is certainly an
area where this Committee should recommend appropriate action,

Two additional programs that deserve immediate scrutiny by this Committee are the
ACES digital signature standards-setting program underway at the General Services
Administration and the announced plans by the U.S. Postal Service to take over
administration of the Internet country code high level domain designation for the United
States, which is the so-called “.us extension” (pronounced dot-u.s.-extension.)

Many civil libertarians believe that government-set standards for digital signatures will
require excessive, centralized collection of personal information and that federal
standards for digital signatures, whether set by the GSA, the Postal Service, or the
Department of Commerce will have exactly the same effect as creating a formal national
ID card system, since digital signatures will soon become the ubiquitous requirement for
doing any kind of serious business on the Internet. This is the point I was driving at when
Tnoted earlier that government-set standards for identity verification are generally much
stricter than those necessary for commercial purposes. The cause of liberty is better
served by multiple, competing, privately set, commercial digital signature standards that
offer varying levels of security and allow the public to choose what standards they will
use and participate in.

The Postal Service’s designs on the .us extenion are particularly troubling because they
would involve assigning every American and every mailing address a unique email
address that would correspond to a physical location. Again, the record keeping
requirements are exactly the same as those that would go into a national ID card system.
More troubling still are the Postal Services intentions to being offering non-postal
services should as certificate authority, digital signatures, secure email, and electronic
“pill-paying” or presentment services.

The Postal Service has no business venturing into these areas. As a quasi-governmental
institution which maintains close links to government agencies, its entry into these areas
poses potential serious challenges to civil liberties. Also, in purely economic terms, the


84

served only 3 months. He vas brought to our attention in Septaaber of 1989 afcer
it vas learned that Mr. vas vanted by Scotiand Yard, for
internacional conspiracy involving credit cards stolen in cha U.S. and then
shipped co England for use.

The methods used by Nigerians to obtain credic cards are extensive, bue che
common denominator in all of the cases is the availapilicy of false
Adenciitcarion cards. Some individuals obtained false I.D. cards to obtain che
‘eradic cards, vhile others obtained the false 1.D.'s after they stole the cards.
One individual apprehended.by IN&S, + was found
im possession of sixzees (16) different I.D."s al! in dizferent names eli bearing

his pictur

One of the aost common ways Nigertans perpetrate FIC fraud is siaviy to assuze
the idencisy of a respacted citizen end then file credit applicatéons io chat

nace s the cards are received the subject bas days 29
defora the aext billing dace.
Anecher :omton procedure which was used by oa Migersa:
eo 1986, for FIC and deporcad by the Atianca ta duly
198S, vas a 1icrie cote complicated. Mr.
‘a aca procassor, and had access to aunerous ezed‘c caré
easy for to transact business vich credic card companies ov

with weZe@y the credic card aumber. Mr. . would simply telephone the cregit
card company and request an “Add-on” card. :

To avoid suspicion, Mr. would telephone the credic card company a few days
later and request a change of address on the gev “Add-on” card, Mr- vould
Sive che address as a "drop-box" kmown’‘only to himself. Once the card(s)
arrived, Mr. ., knowing the credit limit on the card, would then charge the
card to che lint. Gace the Limte was reached, Hr vould send the credit
card company 2 “bogus” check printed in che card holder's name. When the credic
card company received the check it vould autoastically raise the credit limit to
the amount of the “bogus” check. This procedure wes repeated tvo or three tines,
accusulating as much as $50,000.00 of credit before Mr. would stop using
chat card, Mr. would then begin the whole process again. Hr. vas
convicted on LS counts of FIC and sentenced to } years probation.

Most of the other cases involving FIC in Atlanta involve stealing credit cards
from mail boxes. A couple of cases have involved individuals working inside the
post office stealing the cards and then selling them to friends.

The methods used co perpetrate FIC fraud and theft ts {nexhaustive. Many
Nigerians chat are involved in this particular type of crime are college educated
individuals majoring primarily in business. It is for this reason that they are
adept in defrauding various financial institutions



61

‘Statement of Denmss J. Kucinich
September 17, 1998
“A National ID Card: Big Government at its worst or Technological Efficiency?”

Mr. Chairman, I welcome our Subcommittee’s hearing on national identifiers
and their implications on the privacy rights of the individual. Innovations in
information technologies have made possible increased efficiency in the handling of
data. Credit lines, banking accounts, and other personal information can all be
accessed at the click of a button. However, while this information technology may
save time and allow for easier access, it may also comprimise personal privacy.

In particular, Mr. Chairman, I would like to take a close look at the National
Highway Traffic Safety Administration's proposed rule concerning state-issued
driver’s licenses. This rule, which is a product of a bill passed by Congress in 1995,
raises issues of cost and constitutionality. State officials question whether the rule
constitutes an unfunded mandate. State interest groups regard it as an usurption of
states’ rights by the federal government. Most troubling to me is the mule’s use of the
Social Security number as a de-facto national identifier. Depending on where you're
standing, Mr. Chairman, this rule can be interpreted as nothing less that an accomplice
to “identity theft.”

In the midst of an information revolution, it is critical that we establish effective
methods to protect citizens’ privacy. Until we do so, any national identifier, de facto
or otherwise, is a risky proposition. Mr. Chairman, I am pleased with the

Subcommittee’s attention to this matter and I look forward to today’s discussion.


‘BANK FRAUD
According to FBI statistics, the losses from bank fraud have doubled each year

for che last threes years. ,:
$2,000,000,000.00, as compared to the gross losses attributed to robbery vhich
totaled iess chan $47,000,000.0C nationvide.> These, of course, are figures
conpited froc cases actually reported and do not tapresent tocal industry losses.

Nigerian aliens have been associated wits benk fraud since the eariy 1970's. Te
was then chac banks in Nev York uncovered aries of fraudulent Loan
applications being submitted by students from Nigeria. The loans vere in che
sanes of lagiciaate coliege professors, vhose auses vere obtained from college
yeazsooks.” In 1986, the Yew York League of Savings Institutions uncovered an
organized izuud ring which d the "Nigerian Crime Necvork"! This cing
anes. and othe: Dusineases 10 che Zev Tork ares.
by up of Nigeztece
yas used sy che Segurean 3

jigerian Crine Satvork ara dy og means Lintead to cha scaz,
is. The staras of Georgia, Alabana, Norsh Carolina, ané Sout
'$ organization.

og Sev “ark a:
Carolina pave also deen targeted by
oh

There ace several thousand Nigerian nationals living in the Atlenta Metropolitan
area alone. There is also a large concentration of Nigerians Living in the
viciaicy of Huntsville, Alabama. Stace April 1989, Atlanca INS bas arrested 42
Nigerian cationa!s in boch proactive and reactive operations. Of those 42
Nigerians, roughly 25% had received or subsequently received convictions for bank
fraud or forgery. It 1s believed that chese figures only represent a drop in the
bucker as far as the total bank fraud activity in the Atlanta District. Due to
manpover rustrictions, we have been unable to keep up vith the enormous influx of
favescigative leads received from ouserous sources.

The success of the Nigerian Crime Netvork is largely related to their ability to
procure fraudulent identification docunents and thereby establish accounts under
“ually any nase that suits heir needs. The examples of Nigerians arrested ir
the Atlanta Discrict in possession of multiple identicy docunants are too
Bumerous to mention. Suffice it to say chat dozens of counterfeir driver's
and state issued driver's Licenses obtained

Also seized are blank birth end baptises?
certificates, a dry seal stamp machine, end blank gold seals. In addition, a
fraud manual used by the Nigerian Crime Necvork has been obtained. It describes
the step by step procedures aecassery to obtain fraudulent identification.

(Exhibit 4).

fraudul



120

Mr. McINTOsH. Mr. Grindley, you mentioned that all 50 States
sell their driver’s license information. And apparently there was a
statute that Congress passed that has been struck down by the
courts as being in violation of the 10th amendment that prohibited

it.
What is s your experience in Georgia—and I was going to ask Mr.
Holcomb also in Virginia—can the States be prevailed upon to limit
that themselves, or what is the dynamic in your State for the deci-
sion to do that?

Mr. GRINDLEY. It needs to be a State issue, but it seems to be
driven from a Federal guideline. I got that information again out
of this Popular Science that said all 50 States.

In Georgia, we are in the minority party, unfortunately, but until
that changes we do not have a lot of—that is just the way it has
always been, and that is the way it will always be until something
changes in that re .

Mr. McIntosu. Is it a fiscal benefit? I mean, presumably if they
are selling the information, there are some receipts.

Mr. GRINDLEY. They are kind of tight-lipped on that, I guess is
what I am saying without saying it. They are not anxious to share
that. And now I have a little controversial relationship with the
head of the State Patrol since I blasted him on TV for trying to
veto it after he promised me it was no problem. So, we are not on
talking terms.

Mr. McINTOsH. Been there, done that with different officials.
Well, if you find out anything more when you return, let us know.

Mr. GRINDLEY. Sure.

Mr. McInTosu. Mr. Holcomb, how about in Virginia?

Mr. Hoicoms. Mr. Chairman, this may surprise you, but you
should not believe everything you read. Virginia does not make
their private information commercially available. We have certain
limited circumstances; for instance, someone who is verifying for
employment or insurance companies, There are certain ways that
you can get that information, but it is not commercially available.
It cannot be used for marketing.

Virginia’s privacy statutes are probably stronger than even the
Federal statutes, and we will fight to continue to protect the pri-
vacy of our individual drivers.

ir. MCINTOSH. So, let me make sure I understand how that will
work. If an insurance company wanted that information, would
they contact you, or have you transferred it to a private company
that provides it on a limited basis for that use?

Mr. Hotcoms. Mr. Chairman, the insurance companies would
have a use agreement with us. In Virginia, the same as Indiana,
we have a vendor or a third party. Ours is called VIPnet. I am not
sure what it is called in Indiana. I think it is Indiana Interactive.
But there is a use agreement which they sign and they are told
what restrictions are on the use and the redistribution of that in-
formation, and should they violate that, they lose their right to get
that information.

But they get that information to determine insurability. Pri-
marily, they look at the person’s driving record, determine if this
person should be insured or not; as well as law enforcement, obvi-
ously, has access to these records.


123

Statement by the
National Highway Traffic Safety Administration
to the
Subcommittee on National Economic Growth, Natural Resources, and
Regulatory Affairs
of the
Committee on Government Reform and Oversight
September 17, 1998
Mr. Chairman and Members of the Subcommittee:

We are pleased to respond to your request to testify on the
National Highway Traffic Safety Administration's (NHTSA) proposed
rule on “State-Issued Driver’s Licenses and Comparable
Identification Documents.” You have asked that we address the
proposed rule and provide an overview of the comments that we
have received.

Our proposed rule is intended to implement one subsection of
the Illegal Immigration Reform and Immigrant Responsibility Act
of 1996, P.L. 104-208, legislation intended by Congress to
provide more effective measures to prevent illegal immigration to
the United States and to detect and return persons who have
entered the country illegally. Subsection 656(b) of the Act is
intended to prevent the use of State driver‘’s licenses and other
identification documents by illegal immigrants seeking to obtain
benefits under Federal programs.

Subsection 656(b) seeks to ensure that Federal agencies
verify that persons applying for benefits under Federal or
Federally funded programs are lawful residents of the United

States. State-issued documents such as driver's licenses are

among the means by which an applicant's status can be verified.


31

digitized through an ever-expanding number of computer networks in
formats that allow data to be linked, transferred, shared and sold — usually
without our knowledge or consent. Regarding medical records, many
Americans may not realize how comprehensive their medical records are.

Contents of Medical Records

* patients nome, address, age, next of kin, social security number
* name of parents, date and place of birth

* marital status, religion and military service

* medical, social and family history

treatments, medications and diagnosis

* findings, reactions, incidents

* use/abuse of alcohol and tobacco:

A complete medical record may contain more intimate details about an
individual than can be found in any other single document. The risks of
misuse are tremendous.

Risk of Misuse of Medical Data

improper treatment

loss of employment

* loss of insurance

‘« loss of privacy

* reluctance to obtain medical care

Besides information about physical health, medical records may include
information about family relationships, sexual behavior, substance abuse,
and even the private thoughts and feelings that come with
psychotherapy. This information is often keyed to a social security number.
Because of a lack of consistent privacy protection in the use of social
security numbers the information may be easily accessible, in fact, any
private investigator will tell you if you have a social security number of an
individual, you can have access to any information about them. The
dangers posed by a unique patient identifier are no different than the
dangers posed by a national ID, both will allow unfettered access to
personally identifying information, to anyone with the proper keys.

Currently, there is no comprehensive federal law to protect the privacy of
health care records. Our educational records receive protection — even
our video rental records are protected, however, public perception is that
there is federal privacy law to safeguard their medical records, and that
there is federal law that gives patients a right to access, review and


155

Coacerus About the UHI

Opinion about a standard for the unique health identifier for individuals, however, is deeply
divided. The UHI has become a lightening rod for a set of privacy concerns that stem from many
sources. Even without this identifier, there are legitimate reasons to be concerned thet sensitive
hnealth information is not adequately protected. While the administrative simplification
standards, including the UHI, are intended to increase the accuracy and efficiency with which
health information can be exchanged, having access to the UHI can lead to serious privacy
concerns.

‘The media has reported thatthe unique individual identifier will be used to create a national
‘database containing everyone's medical records. Even immigration advocates have been
involved, out of concer that a health identifier could become a de facto national identification
number. There is no intent to ti the UHI to national database or to use it asa national
identifier, and we intend to address this issue in the context of privacy legislation,

Among those who do not oppose adoption of a UHI, there is significant disagreement about
which potential UHI would be the most appropriate for individuals. The different UHI options
the SSN, an encrypted or enhanced SSN, and a new number - each have different cost and
privacy implications. They would function equally well as identifiers, so the choice will be
based on these cost and privacy concerns.

‘Some people believe thatthe choice of identifier will have no effect on privacy. Others believe
that privacy can be enhanced by choosing a UHI with certain characteristics, For example, using.
‘an identifier unrelated to the SSN could improve privacy protection (but would be more costly).
Because the SSN is already ubiquitous, opponents of the SSN stress how it could be used to link
financial, consumer behavior, employment, law enforcement, and health care records by those
‘who wish to violate our privacy. Another significant fear is tat, if we create a new, nou-SSN


7

responsible for prosecuting the person who stole my identity. And
since they have no—there is no—they are not going to gain any-
thing from doing this, none of them did it.

One of the accounts that he took out was a live loan, which is
a check. I do not know if anyone has gotten these in the mail. It
is a live loan check, and you sign the check and you make pay-
ments back to that check. Well, he had signed a thousand dollar
live loan check; and I was able to get a copy of this check and file
a police report and have him ed with forgery.

However, dealing with the kind of Bersonality that would steal
someone's identity to begin with, he claimed that he had a sister
named Celene Cross, that her Social Security number was different
by one number, and that he had signed the check in good faith.
And it took a year and a half to have him prosecuted.

After 6 months of his writing sort of notarized letters to the
banks stating that there is ano’ Celene Cross whose Social Se-
curity number was different by one number, and the reason why
everything was going through him was because her ex-husband
was stalking her, the police and the postal inspector tracked him
down at his employment and told him that he needed to produce
this person. A few days later he went into the police department
and told them, no, the real story was he had run a Sears credit
card up and that he had met a woman at a bowling alley who
claimed to be a stripper and paid her to take her name, to use her
name and Social Security number.

I don’t know if he knows what I look like or not. But apparently
the information that he gave the police and my appearance are
enough alike that the police did not believe me, and I was accused
by the postal inspector of basically lying. I remember distinctly the
phone call, “Look, lady, we don’t have time to pursue things that
we are not going to prosecute. And if it comes right down to it, you
are going to have to submit to a polygraph if this person convinces
enough people that he is telling the truth.”

To which, at that point, after going through it for however long,
a year and a half at that point, I was astonished. And he has since
admitted that he didn’t meet anyone. He has changed his story
again. I do not know what the true story is.

I contacted several neies for assistance. I have mentioned
some of them already. The local police, State’s attorney, the postal
inspectors, U.S. Secret Service, Illinois Attorney General’s Office,
U.S. Attorney General’s Office, the FTC, the Social Security Ad-
ministration, my State rep, and my U.S. Congressman.

And, by the way, I don’t think it is an accident that I am the
one that is kind of representing my income here today. I just think
that I have ued this much farther than anyone would. I had
hit brick walls over and over again, and I am still not done. I have
done all this myself, since I have heard horror stories of people
paying money to attorneys to get nowhere, and I think I have prob-
ably accomplished more than any attorney could have done.

T think there is one thing it you need to know, I suppose.
When I contacted the U.S. Attorney’s Office, because he had forged
my name on these credit card applications and it is Federal fraud
to use my Social Security number, they advised me that they don’t


138

‘which repeals those sections of the Health Insurance Portabihty and Accountability Act of 1996
‘that require the Department of Health and Human Services to establishes a uniform standard
health identifier, and the Privacy Protection Act (HR 3261), which forbids the federal and state
‘governments from using the Social Security number for purposes unrelated to Social Security. HR.
3261 and HR 4217 are currently pending before the Government Reform Committee

Mr. Chairman, while I do not question the sincerity of those members who suggest that Congress
can ensure citizens’ rights are protected through legislation restricting access to personal
information, the fact is the only solution to the threat to liberty created by the national drivers’
licenses and the medical ID proposal is simply to repeal the provisions of law authorizing those
identifiers. Legislative “privacy protections” are inadequate to protect the liberty of Americans for
several reasons. First, federal laws have not stopped unscrupulous government officials from
accessing personal information, Did laws stop the permanent violation of privacy by the IRS, or
the FBI abuses by the Clinton and Nixon administrations?

Secondly, the federal government has been creating property interests in private information for
certain state-favored third parties. For example, a litle-noticed provision inthe Patient Protection
‘Act established a property right for insurance companies to access personal health care

ion, Congress also authorized private individuals to receive personal jon from
government data bases in the recent copyright bill. The Clinton Administration has even endorsed
allowing law enforcement officials" access to health care information, in complete disregard of the
fifth amendment. Obvioualy, “privacy protection” laws are inadequate to protect personal
information when the government is the one providing the information!

‘The primary reason why actions short of the repeal of laws authorizing privacy protection is
insufficient is because the federal goverament lacks constitutional authority to force citizens to
adopt a universal identifier for health care, employment, or any reason. Any federal action that
‘oversteps constitutional limitations violates liberty for it ratifies the principle thatthe federal
government, aot the Constitution, is the ultimate judge of its own jurisdiction over the people.
‘The only effective protection of the rights of citizens is for Congress to follow Thomas Jefferson's
advice and “bind (the federal government) down with te chains of the Constitution.”

‘Mr. Chairman, those members who are unpersuaded by the moral and constitutional reasons for
‘embracing my privacy package should consider the overwheiming opposition of the American
people toward national ID cards and medical IDs. My office has been inundated with calls from
‘around the country protesting the movement toward a national ID card and encouraging my
‘efforts to thwart this scheme. Imagine the public reaction if we do nothing and Americans are
forced to accept a federal ID and a uniform health identifier.

{need not remind the members of the Committee of the public outcry aver the federally-approved
divers’ licenses and uniform health identifier, All defenders of liberty must be heartened by the
public outcry against these plans. 1 am also pleased that many other members of Congress,
particularly Mr. Barr, bave beea working to reverse this scheme. Mr. Chairman, { hope 10
‘continue working with the members of this SubCommittee and all members of Congress to stop
implementation of the federally-approved drivers’ license and the uniform health identifier.


146

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152

“Thank you forthe opportunity to present the testimony of the Department of Health and Human
Services (HHS) on the topic of the Unique Health Identifier (UHI for individuals. The
Administration believes that a UHI for individuals is important to the improving the quality of
care patients receive by reducing medical errors and inaproving the efficiency and effectiveness
of the health care system by standardiring the exchange of administrative and financial data sent
clectronically. The UHI also has potential for improving the privacy of health care records.
Today, any health record bearing an individual's name makes it “open” to anyone who
Seliberately or accidentally sees the record. A health record using only a unique health identifier,
‘would display no such “identifying” information and therefore would be anonymous. Since
1993, this Administration has emphasized the need to ensure individuals have greater protection
of their heath information. The Secretary and the Vice President have recently reiterated that
rmeesage in light of public discussions on privacy concems reganding the UHI. However, the
‘Administration bas an obligation to help bring the many clinical and administrative advantages
of electronic medical records to the American people. We look forward to working with
‘Congress to achieve this goal.

Beckground

‘The UHI is one of # larger set of national standards for electronic exchange of health information
that HHS is required to adopt pursuant tothe administrative simplification provisions of the
Health Insurwace Portability and Accountability Act of 1996 (HIPAA). These provisions were
‘enacted with the widespread support of the health care industry, and bipartisan support in
‘Congress. They require HHS to adopt a number of uniform, national standards for the electronic
interchange of health information for a specified set of administrative transactions, including:

+ health claims or equivalent “encounter” information
+, enrollment and disenroliment in a health plan

+ eligibility for health plan

+ health care payment and remittance advice

1


46

On top of this there is great progress to be made in blunting the drive toward socialized
medicine through establishing more widespread availability of medical savings accounts.
As the years go on, there will be many more such opportunities to reduce the role of
centralized administration by voucherizing programs such as direct educational
assistance, and failing that, converting federal programs to block grants administered by
the states.


10

plus $25 court costs and restitution, He paid his fine and his probation period is over.
Icalled this bank, AFSCI, after his prosecution, which had initially refused to
prosecute him and refused to take my name off of the account. I told them to take my
name off the account, that he had been prosecuted and asked if they wanted the case
number. I was told, “No, I do not want the case number and no, we will not take your
name off of this account.” About a year and half later, and after his employment at
that agency, I was able to have my name removed from the account, but it had been
passed onto another agency at that point and was not an easy task.

I suppose the point of my trying to get him prosecuted was so that I could
prove the accounts were fraudulent and my credit reports could be cleared completely
of these accounts. I have come to find that his prosecution has had little to do with
the state of my credit reports. When A.J. Woodson filled out the credit applications,
the only identification he needed was my name and social security number. The
address, previous address, mother’s maiden name, birth date, phone numbers, and
place of employment were listed erroneously on the credit card applications, but he
‘was still granted the credit. I thought that the banks would be liable since they did not
verify this information, but verifying this information is optional by law, which
relieves them of any responsibility.

Talso had problems with all of the banks having these accounts removed from
my credit reports, even after A.J. Woodson fully confessed in writing to all of the
banks involved and all three credit reporting agencies that he took these accounts out
without my consent or knowledge, that he wanted to take full responsibility for their
balances, and he had no affiliation with me.

Thave a low to moderate income. I do not know how far people in my income
bracket pursue these cases. I had heard horror stories about people hiring an attorney
to clean up a mess like this, but all they would end up with was a fat bill from an
attorney who was not able to resolve a thing so that is why I pursued it myself. Iran
into so many brick walls that I think most people would have given up long before
now yet I continue to fight this losing battle. Every piece of personal data on my
credit reports has been incorrect at one point or another since this began. Accounts
that have been taken off later came back as "disputed". My birthrate, place of
‘employment, address, previous address, spelling of my name and my social security
number have been incorrect on them at one time or another. I have documented
nearly every phone call and every correspondence made throughout this ordeal and
resented it every step of the way, not to mention the emotional turmoil it has caused
me.

This has been going on for four and a half years and my files are now divided
into years. Since the Fair Credit Reporting Act was amended in September 1997, I
have had two credit reports come back entirely clean and one report come back with
one mistake. Ihave not double-checked to see if these reports are still clean, but in
the past whenever 30 days had passed, a bunch of fraudulent data would return which
Idid not understand. I probably have around 30 copies of incorrect credit reports. I
was finally told that the banks send tapes to the credit reporting agencies every 30
days so the reason why incorrect data kept popping back up on my credit reports was
because one or more of the banks bad not entirely remove my name from their
databases. When | asked the credit reporting agency which bank/s the false
information was coming from, they could not tell me. They also told me that there
was information on my credit report that showed up on their computer, like "ghost
accounts”, which would not show up on my copy of the credit report.

In addition, Ihave had to deal with the type of personality that would steal


40

I founded Americans for Tax Reform as an organization that opposes any tax increase for
any reason whatsoever as a matter of principle. In 1986, the most straightforward way to
limit government power was to limit the amount of money government took in. This is a
very real check on government growth. Today, I still very much support this approach,
but I am adding a second component: in the information economy, money and
information are much the same thing. My good friend Richard Rahn make much the
same point in a forthcoming book on electronic currency and financial privacy called The
End of Money. If we are to limit the size and scope of government in the future, we must
limit government’s ability to coercively require information of its citizens.

‘The basic premise of public choice theory is that any large organization, whether public
or private, will naturally seek to expand its own power and influence. Public sector
bureaucracies, however, often confuse their own institutional interests with the public
good they are supposed to serve. Moreover, public sector bureaucracies do not face the
same market discipline private sector agencies experience. The public sector is often at
best indirectly exposed to market forces and more likely than not completely shielded
from the reality check that immersion in the market can provide. As elected
representatives of the people, Congress and the President are really the only force that
does provide a check on the self-aggrandizing tendencies of any government agency.
Congress in particular should take this responsibility seriously.

The movement we have seen of late toward a single, universal personal identifier reflects
the natural bias of large, centralized bureaucracies that find it convenient to track and
regulate their citizen-subjects that way. Congress needs to question this impulse by any
bureaucracy whenever it appears.

Il. The Particular Dangers of Government Standards-Setting for ID's and Electronic
ication

The humorist P.J. O'Rourke has a line about the danger of giving money to big
government: perhaps somewhat crudely, he compares it to giving whisky and car keys to
teenage boys. One could make a similar argument about information technology and the
possibility of letting government agencies impose themselves on the business of setting
technical standards for communications networks and network-enable communications
devices. There are three things to consider here:

First, a marvelous thing about today's computers is that they make the creation and
management of infinitely scalable large databases not only easy and feasible but actually
somewhat cheap.

Second, today’s networked communications create transaction streams that can be
collected and monitored in real or near-rea! time. In practical terms, this means that
whenever one sends email, accesses a website, carries around a cell phone, or does any
umber of ordinary things, one creates records that show exactly what happened,


ng

‘Nauonal Highway Traffic Safety Administration
‘Docket No. NHTSA-98-3945

July 31, 1998

Page 5

‘We appreciate this opportunity to corement on the proposed rules and hope you
will Incorporate our suggestions into the final rule,

Tabled.

RDHgjs


19

Mr. Chairman and Members of the Subcommittee:

T appreciate the opportunity to testify before the Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs of the House Committee on Government
Reform and Oversight about national ID on behalf of the American Civil Liberties Union (ACLU).
The ACLU is a nationwide, non-profit, non-partisan organization of more than 275,000 members
devoted to protecting the principles of freedom set forth in the Bill of Rights. The ACLU has not
received any grants or contracts from the federal government in the current fiscal year.

ANATIONAL SYSTEM OF IDENTIFICATION

The ACLU vigorously opposes the creation of a national ID card, whether the card is
embodied in plastic, or whether the “card” is intangible -- sort of a "virtual reality” card consisting
instead of a government-mandated computerized data base containing information linked by a
government-issued identifier about most people in the United States. A national ID card or system
Of identification would substantially infringe upon the privacy rights of all ULS. citizens and is
unnecessary to adm/aister programs of the federal government.

‘Over the past few decades, proposals for a national identification card or national ID system
have appeared a tempting (but ultimately ineffective) “quick fix” to national problem of tracking
one segment of the population or another. Lately, these proposals have accelerated.

In 1996 Congress enacted welfare and immigration “reform” legislation establishing
nationwide data bases of workers to track parents who have not paid child support and to prevent
undocumented people from working. This year, we applauded when Congress rejected a proposal
to create a national data base of registered voters. A nation-wide patient identifier number was
proposed to facilitate the matching of sensitive medical records to patients, and is currently on hold
for privacy reasons. My colleague, Ms. Solange Bitol, will discuss that proposal in some detail.

Now, Congress considers a proposal by the Department of Transportation that the federal
government require states to obtain a social security number ("SSN") from every driver, as well as a
physical description and photograph of the driver that could be referenced to the SSN, To our
knowledge, this would be the first time in history that the federal government mandated that the
SSN of virtually every adult in the nation be tied to a physical description or photograph of the
person in records unprotected by the Privacy Act of 1974. Worse still, the statutory mandate on
which the proposed rule is based would coerce states to facilitate ID theft by putting drivers’ SSNs
con driving licenses.

The ACLU believes this an unfortunate proposal to federalize all state identification
documents and tie them to one identifying number, the SSN, In essence, it requires states to issue
federalized, national ID cards. The cure to this ill is not a tinker with the DOT's proposed rule; but
rather repeal of the underlying statutory authority for the rule,


14

ment on anything, is just so hard. And I just hate to see this hap-
pen to anybody else because it is really not fun.

A month ago, I was on my way to work. I work for a company
now called Tiffany & Co. And I was pulled over for Speeding. The
highway patrolman did a check on my California driver’s license
and she came back to the car and said, “I am sorry but I have to
take you in.” And I said, “Why? I was only speeding.” And she said,
“Well you have a warrant in Pensacola, FL, you have an out-
standing driver’s license back here and this is not going to work.”

Thad on a suit and my tie and everything and I said, “Could you
please call my job and let them know that I am here and you are
ready to take me in?” And she said, sure. So she called and they
verified that it was really me and the car that I’ was driving and
my license plate. So she warned me and told me I should ly get
this thing back in Pensacola, FL, cleared up.

And even where I live now, I have gotten letters from my land-
lord saying that, you know, I might have to move because they did
extra ba und checks on me and things just do not look good

ight now. So, it is just really hard.
“ithe prepared statement of Mr. Young follows:]


3

This morning we will hear from two individuals who have al-
ready suffered dire consequences from having their Social Security
numbers stolen—an invasion of privacy which is likely to become
much more prevalent if a national ID card is established.

Celene Cross and Marvin Young traveled across the country so
they could warn others of the dangers of identity theft. I want to
thank them and all of our witnesses for being here today. I look
forward to your insight, and hope through this hearing we can de-
termine constructive solutions to the privacy problems that these
government policies present.

Let me mention, my colleagues on the minority side are not able
to be here yet. We are hoping that they will arrive later but, as
I understand it, they are very supportive of this hearing as well.
This is, in fact, something that does not cut across party lines, Re-
publican and Democrat, but I think does bring the value of indi-
vidual liberty and privacy into focus and requires all of us to look
and see how the effects of some—I am sure well-meaning—provi-
sions in the law have led to results which none of us would like
to see in this country.

So let us move now to the first panel. I would ask them to come
forward. Celene Cross, Marvin Young, Greg Nojeim. Solange Bitol,
and Grover Norquist. Please come forward.

[The prepared statement of Hon. David M. McIntosh follows:]


131

(Whereupon, at 11:38 a.m., the subcommittee was adjourned.]
[Additional information submitted for the hearing record follows:]


109

per customer, Virginia's driver's license issuance process is phenomenally fast.
During fiscal years 1997 and 1998, Virginia issued approximately 1.4 million
original, renewal and duplicate driver's licenses.

With implementation of Q-Matic,’ our automated queuing system, we
established an average service goal of 15 minutes; however, our employees
routinely beat this average by several minutes. Our first full month of Q-Matic
statistics showed an average wait time of 13 minutes. The same month a year
later, wait time had plummeted to an average of eight minutes.

The proposed rules could add significant delays to issuing driver's licenses.
We calculate that verifying with SSA will add an extra minute of processing time
for each driver’s license transaction. As a result, to maintain our current customer
service time, DMV will need to add additional employees to handle the processing
volume.

The proposed rules could also require centralization of our driver's license
issuance process, thereby increasing costs, decreasing customer service, and
destroying our mission of offering customers one-stop shopping at any one of our
72 customer service centers and three mobile customer service centers.

We understand the response time in the National Motor Vehicle Titling
Information System pilot is seven seconds per transaction. Even faster, the current
response time for the National Driver Register averages approximately three
seconds. Virginia believes that the response time from SSA should certainly be as
fast or faster than either of these two system.

Therefore, we respectfully request that the proposed rules provide for a
guaranteed minimum response time from SSA. If SSA’s system does not respond

+ Q-Matic first appeared in DMV customer service centers in 1996 and made standing in line a thing of the past.
When entering a CSC, all customers are issued a numbered ticket within a designated service category, based on the
transaction, Customers then sit comfortably in lobby chairs and listen for their number to be called to a service
‘window or watch the electronic message board which flashes their ticket number and alerts them to proceed to the
appropriate service window. Categories are set up by the complexity and amount of time required to process the
transaction. One of the key benefits of the queuing system is the capability it gives managers to prioritize certain
service categories at specific teller windows during peak times (-., lunch times and the beginning and end of the
month). We often give priority tothe simple transactions, such as vehicle registration renewals, during peak times.
‘This approach is similar to an express line in a grocery store. Prioritizing the quicker transactions moves these
customers through the office more efficiently and reduces the overall waiting times in offices.



68

YOU ARE LOCKING OVER THE MICACFILN IT WOULD, BE A Goce rz:
CoMPILE A LIST CF AT LEAST SEVERAL GOCD POSSIBILITIES. A FEN cusT
GHT PROVE USELESS To you. FOR EXAMPLE, WACNG RACE, CR YoU MicHT
WANT TO CCNSTRUCT SEVERAL £.0.'S FOR WHATEVER REASON.

NCTE: WHEN ¥CU GO TO THE WEWSPAPEA OFFICE, JUST ASK THEM WHERE you
CAM SEZ TSE “CEATES MICACFILM". . YCU NEVER MEZD TO WCRRY A3CUT any
QUESTIONS CONCERNING THE ASCVE PRCCEDCRES. CO IT BY MA:
way TS, ANG MS72 IT MACLED Te a aRITED P. c. Bex SOMBER
= FORWARDING ACCRESS. YCC

TEE MAIL FORWARDING COMPANIES IN TSE NEUSPAPERS AND MAGA:

‘THIS [5 THE NEXT STEP IN THE PROCESS OF OBTAINING CCALITY Torr”
YIER MEW ISENTITY. JUST FCLLCW TRE INSTRUCTIONS CAREFULLY AUD AREAS
THIS SEVERAL TIMES BEFORE ATTEMPTING TO RECEIVE Youa ScCIAL SECuAITY,
CARD. *

GHCE YSU HAVE TSE BIRTH CERTIFICATE YOU WEED, THERE IS THE FURTHER
PROCESS OF YOUR CRTAIYING A SCCIAL SECURITY €AAD AND WOW IS THE

TIME TO APPLY FOR THIS CARD. YOU, OF COURSE, WEED TO GO TO ANY
SCCIAL SECURITY OFFICE I¥ THE CITY WHERE YOU ARE OBTAINING WEW T.D..
ALL THZ INFCRMATICN YOU WEED TO COMPLETE THE APPLICATION CAsD IS RCH
Gt THE CERTIFICATE, SO MERELY FILL IN THE APPROPRIATE BLANKS. TYE
APPLICATICN CAM THEN BE MAILED IN TO THE OFFICE WHOSE ADORESS IS PR:
GN THE BACK SIDE OF THE APPLICATION, “AND YOUR CARD SHOULD ASRIVE IM A
WEZX OR $O. THERE IS MO FEE FOR THIS CARD. (NOTE) FOR SPANISH SPEAK-
ING PEASCN, BE OR SRE PROBASLY MEEDS TO SPEAK SOME SPANISE ANO ENGLISi#
BEFORE TRYING TO OBTAIN A SCCIAL SECURITY CARD, ALSO, MUST RAVE Somr
1.0., IE, BIRTH CERTIFICATE OR ORIVERS LICENSE BEFORE APPLYING. THIS
ALSO APFLIES TO ANYOWE WANTING TO GET A SOCIAL SECURITY CARD ~ A DAIV-
ERS LICENSE IS A MUST.

LE WCCLD MCT RECOMMEND THAT A SPANISH PERSON WHO SPEAKS NC ENGLISH A7
PLY CX PERSCN FOR A CARD. THES CAN GE OONE BETTER THACUCH THE MAZE.

5



24

data ted to the SSN cannot be quenched “Trust us with your personal information We're the
government,” 1s not a theme that resonates well with the American people.

Moreover, the government has facilitated private sector abuse of data tied to the SSN. It
‘was discovered nine years ago that the Social Security Administration used to disclose SSNs to the
private sector until public outcry halted the activity. Following the public disclosures, the SSA
‘Commissioner announced in April, 1989 that the SSA had decided not to process magnetic tapes
containing 140 million names and SSNs submitted by TRW Credit Data, a credit reporting
company that has been succeeded by Experian Information Systems. The Senate conducted
hearings and teamed that the SSA had conducted three million SSN verifications for Citibank and
other firms in past years.

‘The private sector's use of the SSN to access information about individuals has evolved to a
point never envisioned by its creators. For example, in a 1990 advertising brochure, Experian (then
‘TRW), which held itself out as the nation’s largest provider of consumer credit information and
claims to maintain information on nearly 170 million consumers nationwide, advertised a service
called Social Search:

In pursuit of those who have disappeared - former customers, college alumni ot
missing shareholders - TRW brings you Social Search: A state-of-the-art locating
tool that puts our expansive databases to work for you . . . All you need are the
social security numbers of those you're attempting to locate and you can reach those
hard-to-find individuals who may have moved or changed their names.

‘This history shows the enormity of the temptation to expand the uses of data linked by a
common identifier like the SSN, far beyond the purpose for which the data was originally given up.
But having succumbed to this temptation in the past is no reason to facilitate such invasions in the
future by effectively requiring that states put drivers’ SSNs on their licenses.

ID Fraud. \ronically, the more the SSN is used as a personal identifier, the less useful it becomes as
an identifier. This is because unscrupulous criminals can steal a person's identity by appropriating
their SSN. "ID Fraud” ~- the process of obtaining another person's personal identifying information
such as the SSN, date of birth and mothers’ maiden name, then using that information to
fraudulently establish credit, run up debt, or take over existing financial accounts is a growing
problem. According to a recent GAO report, there has been a significant increase in identity theft in
recent years. GAO, Identity Fraud, GAO/GGD-98-100BR (May 1998). It is estimated that 40,000
victims of identity theft must struggle each year to clear their names and fix their credit histories.
Consequently, more and more people are trying to protect the privacy of their SSN.

By coercing states to place drivers’ SSNs on driver's licenses, Section 656(b) promotes ID
theft. Many times when a person cashes a check at the grocery store, boards an airplane, or buys a
beer, they show their license to a stranger who could sell the personal information on it to an ID
thief.


142

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10

plus $25 court costs and restitution. He paid his fine and his probation period is over.
I called this bank, AFSCI, after his prosecution, which had initially refused to
prosecute him and refused to take my name off of the account. I told them to take my
name off the account, that he had been prosecuted and asked if they wanted the case
number. I was told, "No, I do not want the case number and no, we will not take your
name off of this account." About a year and half tater, and after his employment at
that agency, I was able to have my name removed from the account, but it had been
passed onto another agency at that point and was not an easy task.

I suppose the point of my trying to get him prosecuted was so that I could
prove the accounts were fraudulent and my credit reports could be cleared completely
of these accounts. I have come to find that his prosecution has had little to do with
the state of my credit reports. When A.J. Woodson filled out the credit applications,
the only identification he needed was my name and social security number. The
address, previous address, mother's maiden name, birth date, phone numbers, and
place of employment were listed erroneously on the credit card applications, but he
‘was still granted the credit. I thought that the banks would be liable since they did not
verify this information, but verifying this information is optional by law, which
relieves them of any responsibility.

Talso had problems with all of the banks having these accounts removed from
my credit reports, even after A.J. Woodson fully confessed in writing to all of the
banks involved and all three credit reporting agencies that he took these accounts out
without my consent or knowledge, that he wanted to take full responsibility for their
balances, and he had no affiliation with me.

Thave a low to moderate income. I do not know how far people in my income
bracket pursue these cases. I had heard horror stories about people hiring an attomey
to clean up a mess like this, but all they would end up with was a fat bill from an
attorney who was not able to resolve a thing so that is why I pursued it myself. Tran
into so many brick walls that I think most people would have given up long before
now yet I continue to fight this losing battle. Every piece of personal data on my
credit reports has been incorrect at one point or another since this began. Accounts
that have been taken off later came back as "disputed". My birthrate, place of
employment, address, previous address, spelling of my name and my social security
number have been incorrect on them at one time or another. I have documented
nearly every phone call and every correspondence made throughout this ordeal and
resented it every step of the way, not to mention the emotional turmoil it has caused
me.

This has been going on for four and a half years and my files are now divided
into years. Since the Fair Credit Reporting Act was amended in September 1997, I
have had two credit reports come back entirely clean and one report come back with
cone mistake. I have not double-checked to see if these reports are still clean, but in
the past whenever 30 days had passed, a bunch of fraudulent data would retun which
Tdid not understand. I probably have around 30 copies of incorrect credit reports. I
was finally told that the banks send tapes to the credit reporting agencies every 30
days so the reason why incorrect data kept popping back up on my credit reports was
because one or more of the banks had not entirely remove my name from their
databases. When I asked the credit reporting agency which bank/s the false
information was coming from, they could not tell me. They also told me that there
was information on my credit report that showed up on their computer, like "ghost
accounts”, which would not show up on my copy of the credit report.

In addition, I have had to deal with the type of personality that would steal


140

Sune 17, 1000

Part V

Department of
Transportation
National Highway Traffic Safety
23 CFR Part 1331

‘State-lesued Driver's Licenses and

Comparable identification Documents;
Proposed Rule

federal register

ae


29

to the De ‘ment of Motor Vehicles, I had to get a birth certifi-
cate, I had to show her adoption Papers. I had to get an order from
the California court showing that I was her mother, because we
had two birth certificates. “Unbelievable” is the only word I can use
to describe this situation. And, we are talking about the steps
taken to protect her privacy. We are not even talking about iden-
tity theft.

. McINTOSH. So, all the pressure was for you to just say, yes,
go ahead and use the Social Security number?

Ms. Biro. Yes, right here in Washington, DC, those are the
steps you have to go through. In fact, after all that, both she and
I had to sign something to issue a random number. On top of all
that, try going to the grocery store or any store here and writ-
ing a check, they look at the number and say, “Well this isn’t your
Social Security number. Why don’t you have a Social Security num-
ber? Who are you? This is a fake ID.” It is unbelievable.

Mr. McInTOSH. Because the community is used to looking for So-

cial Security numbers.
Ms. Birou. That’s right. Most ple don’t even realize saying
you don’t want to use your Social rity number is an option.

Mr. McINTOSH. That is amazing. I am blessed in Indiana. They
allow you to use a different number, and the Social Security num-
ber is an option to put on there if you want to.

Ms. Brrou. That’s the way it is in California where we are from,
but in Washington, DC, it is a different story.

{The prepared statement of Ms. Bitol follows:]


165

INTRODUCTION

Mr. Chairman, thank you for the opportunity to present this statement for the record. My name
is Dan Stein, and I am executive director of the Federation for American Immigration Reform.
FAIR is a national public interest organization, a citizens’ watchdog organization, working for
comprehensive immigration law reform in general, and for proposals to stem the tide of illegal
immigration in particular.

Mr. Chairman, we are deeply disturbed by the manner in which this important issue is being
mischaracterized and overblown by interests that oppose efforts to eliminate document fraud.
This hearing is billed as "Oversight of a Proposal to Create a National Identity Card."
Respectfully, Mr. Chairman, we are not aware of any proposal to create a national identity card,
and the use of such inaccurate language will certainly inflame passions at the expense of clarity.
Mr. Chairman, the purpose of this law is to stop illegal aliens from getting jobs and welfare.
There is no proposal to create a national identity card.

In 1986, the Immigration Reform and Control Act (IRCA) contained provisions that for the first
time fined employers who knowingly hired illegal and unauthorized aliens. Sanctions were
provided for punishing willful violators ofthis law. Congress acted decisively to cut off the jobs
magnet because the number of illegal immigrants had swelled into the millions, and neither
resources of the Border Patrol nor of {NS inspectors in the interior of the country were adequate
to control the problem.

Very swiftly, however, the flood of illegal aliens resumed as sophisticated smuggling operations
and street vendors dealing phony documents learned that the U.S. had no ready verification
techniques for information contained in birth records, slienage documents and applications for
employment. They learned that false identification, such as counterfeit Social Security cards and
driver's licenses, could be purchased inexpensively, and employers of illegal aliens learned that
they would not be held accountable for distinguishing between counterfeit and valid documents.
This failure in the IRCA employer sanctions provisions led two national, bipartisan commissions
(the Commission on Agricultura! Workers and the Commission on Immigration Reform) to
recommend that Congress adopt a system of a worker identity verification on a mandatory
national basis in order to make the sanctions an effective means for deterring illegal aliens from
coming to this country in search of employment.

In the meantime, employers across America work with labor contractors who, in tum, work with
and other purveyors to attract a steady and growing stream of illegal workers
displacing American workers from entire industries.

STOPPING WELFARE FRAUD

From 1991 through early 1996, there was a great deal of public concem over the growing
evidence of welfare fraud by illegal immigrants. California voters expressed there concerns in
1994 by passing state Proposition 187 that sought to improve the documents required for aliens
to obtain state benefits. In 1996, the Illegal Immigrant Reform and Immigrant Responsibility
Act (IIRAIRA) responded to these expressions of alarm in two ways. 1) Limited identity
verification in employment applications was adopted for testing as a pilot program with a
decision deferred on adoption of a new system. 2) Separately, [IRAIRA specified in section
656(b) that state-issued driver's licenses, to be recognized by the federal government, must

2


POpU ar clence

is Month:
* Who Are the. Great Inventors of Our



139

‘Alowever, {also hope this Commuttee, and other members of Congress who ate concemed about
privacy, will jin my efforts to stop the use of the Social Security number as an identifier While it
has not gotten as much attention asthe attempt to nationalize drivers’ licenses or assigning each
American a unique health identifier, the abuse of the Social Security number may pose an even
‘more immediate threat to American liberty. For all intents and purposes, the Social Security
number is already a national identification number. Today, in the majority of states, no American
‘can get a job, open a bank account, get a drivers’ license, or even receive a birth cenificate for
‘one's child without presenting their Social Security number. So widespread has the use of the
Social Security eumber become that a member of my staff recently had to produce a Social
Security number in order to get ashing license!

Perhaps the most disturbing abuse of the Social Security mumber is the congressionally-tuthorized
rule forcing parents to get a Social Security number for their newborn children in order to claim
them as dependents Forcing parents to register their children withthe state is more like
something out of the nightmare of George Orwell than the dreams of a free republic that inspired
the nation’s founders.

Since the creation of the Social Security mimber in 1935, there have been algnost 40,
‘congressionally-authorized uses of the Social Security umber as an identification number for
non-Social Security programs! Many of these uses, such as the requirement that employers repon
the Social Security number of new employees to the “new hires data base” have been enacted in
the past few years. Infact, just last spring, 210 of members of Congress voted to allow states to
require citizens to allow states to force citizens to produce a Social Security number before they
could exercise their right to vote

In conclusion, Mr. Chairman, I once again thank the members of the subcommittee for their
interest in this vital issue. 1 hope that the members will work with me 10 pass the Freedom and
Privacy Restoration Act (HR 4217) and the Patient Privacy Act (HR 4281). {tis alsa my sincere
hhope that after Congress has indeed stopped the national ID card and the medical ID we are not
fooled into thinking that we have addressed all threats to the privacy of the American people.
‘Only when Congress stops the use of the Social Security mumber as a de facto national ID number
by passing my Privacy Protection Act (HR 3261), will Congress have done its constitutional and
moral duty to protect the privacy of the American people.


OVERSTAYS

seers commonly call an in

an “overstay” {s vhat imafgratior oi
legally aduitsec taco the United Staces but vho ther rerains in
longer chan he is perattted. Exanples are visicors for pleadure (3-2's), who a:
generaily adaicted for a period of ai sonths and visitors for business (3-t's)
vho are adziczed 1p to one year. Of che 42 Nigextans arzested tn Atisnca
Vince Apel 1989, 1° (595) ave classified az Seta ovecscayss ‘The seoune of
overstayed varies greatly, but is generally over one year.

Of these overstays, three individuals had been able to obtain a visitors visa and
re-enter the coucczy even though chey had beer previous:

They accompiisned this fire: obtaining a nev
differenc: name ~ an easy task by alt accounts. | Tae ise: .
tae chat over 50,0

passports,
end obea:

2 passpor:

STUDENTS Sty OF state:

An out of scacus student 1s simply a foreign student (F-1) vho fails to coupiy
with the regulations necessary to maintain their status. This 1s gost often a
studwnt who quits school and then rezains in the United States, or a stud

has already graduated from school and fails to depart the country. Of th
Nigerians arrested in the above sentioned operation, 312 vere classified as being
out of status students. Some of these individuals had actually never actended
any college or approved school. Most had actended for a while and chen droped
out. Many of these clained financial difficulties kept thea from graduating. ie
is, hovever, incumbent upon all foreign students to prove financial soive:
prior to coming to study in che U.S. and financial hardship is not a defense
againse this administrative charg

Te eater the U.S., many Nigerian students obtain fraudulent imnigracion forzs
such as che 1-20, which indicates the foreign student has deen accepted at a U.S.
college or university. The cost for such foras is usually between 100-260 U.S.
dollars. These forms ara either counterfeited, obtained frou unscrupulous
college administrators or from other Nigerians. After obtaining the 1-20, the
Nigerian cakes the document to the US Esbassy in Nigerta and is usually giver &
visa to enter the U.S.



nh

someone's identity. According to one of the collection agencies, A.J. Woodson had
credit reports under five separate names, which he had ruined. And the reason it took
so long to prosecute him was because when the Springfield Police Department
contacted him about the forgery, he told them that he had a sister named Celene Cross
with a social security number different by one number than mine and that he had
signed the check in good faith. He sent notarized letters to the banks stating that the
reason Celene Cross had to be contacted through him was because her ex-husband
(whose name changed a couple of times) was stalking her. After about six months of
this run-around, a Detective from the Springfield Police Department and the Postal
Inspector from Springfield caught him at work and told him he was going to have to
produce his sister.

A few days later A.J. Woodson, who cooperated with the police throughout
this ordeal, went into the police station and told them the “real” story. He told them
he met a stripper who called herself "Sherry " at a bowling alley who sold him the
use her name and social security number to take out credit since he had ruined his
with a Sears credit card for $500 to $2,000, depending on who you talk to.

Apparently, the description he gave them was close to mine, When I talked to
the Postal Inspector he said to me, "Look lady, we only to have time to pursue those
cases we think are worth prosecuting and if he convinces the right people that he's
telling the truth, YOU'RE going to have to submit to a polygraph.” Woodson later
wrote a letter to me stating a friend gave him my name and social security number.

The only types of credit card applications I receive in the mail now are secured
credit which state, "regardless of your past credit history” on them. His address with
my name on it is now part of God only knows how many mailing lists which are sold
to God only knows who. For example, on September 15, 1998 I had a $2,500 live
Joan check thumbtacked to my bulletin board which I was thinking about cashing
since I had wanted to expand my business, but had no credit with which to do so. As
looked more closely at the check, which was dated June 1998, it had A.J. Woodson's
(wrong) address on it.

For a while I tried applying for credit every six months and would get denied
for obviously bogus reasons such as "length of residence too short”. Even after I
accepted my credit was bad and realized I was going to have to reestablish it even
though I did not ruin it to begin with; I tried to get a credit card using my dad as a co-
signer, I then learned that credit card companies won't do that unless you're a college
student. I have quit applying for credit. When Andrew Wilder was making travel
arrangements for me to come and testify, he asked me if I had a credit card to pay for
my food and lodging and told me that I would be reimbursed. I told him I had bad
credit reports so, therefore, I did not have a credit card.

T recently purchased a business to expand my own which I would have done
sooner, but I had to resort to borrowing money from my mother and am fortunate that
my family has the resources to help me. I also recently purchased a house, which I
also would have done sooner for which my father is co-signing the loan. K effects my
business because I have to make orders COD.

I strongly advise against a national identification card. It appears that one
with good credit is at risk for someone stealing his or her identity the way it is. There
are so many databases, which exist all ready that you never know in whose hands
your social security number will fall. It seems to me to have a picture, name and
social security number on an ID card just makes it more easily accessible, like those
which are used at Western Iinois University. I cringe whenever a student comes into


96

get this information on the Internet and how readily this information is used in today's
society. For example, I am required to give the last four digits of my social security
number to transfer money from my account, to verify a credit card, or to do most other
sensitive types of financial business.

If someone illegally obtains this information and this number, they basically have access
and controt to do as much damage as possible to a person's life. Currently, there are
many sites on the Internet where you can get this information, one of them is
IQDATA.com. Mr. Chairman for as little as $12.50 I can pull your social security
number off of the Internet. There needs to be some restraint on the use of the social
security number. We do not need to go the other way, making a person's social security
number more publicly available.

Credit card fraud and bank fraud are rampant. This type of fraud stems from the
illegal possession of an individual's social security number. I would request that this
subcommittee take whatever steps necessary to stop to National Highway Safety
Administration from implementing this rule.

Mr. Chairman, I would also like to touch upon how this proposed rule violates the
principles of the Tenth Amendment to the Constitution. As the members of this
committee are aware, states have all authority other than those specifically authorized
and delegated to the federal government by the Constitution. I ask that this
subcommittee and this Congress remember that the NHTSA proposed rule is an
unfunded mandate. We in the General Assembly are getting tired of being told what we
have to do -- while not being provided the money to do it.

Asa member of the Georgia State House, my constituents repeatedly tell me to protect
their privacy. They feel the federal government has gotten way too big and way too
intrusive in our lives. Every day they come to me and say -- keep them out of our
private business.

Mr. Chairman, I would like to ask you and the members of this subcommittee take
every necessary step to stop the establishment of a national identification card. The
federal government has a duty to protect the privacy of its citizens.


PRIVACY CONCERN GROUPS: CA Lnfotak

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INFORMATION SERVICES: ——_tp-//mrmicnt/iedg/ etre PO? Howe Pope

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‘eet ta tee fein ti ly

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celine evi, But men at endl greene
finding new ways towel iaformatoa about you, not pro-
tect it Revenue from onlin service is expected to top.

'$30 bilion by 2000, according toa stdy by Simba Infor-
‘atioa, and more than 8 percent af that money wil come
from research services, not more genera aervices nich a8
America Online. Cashstrapped tate ae oc periments

governments

new ways
tion about you.

‘that are being forced todo more with es Feel funding
‘are looking for ways to tap int this revenue pipeline, not
shut it off. And it ta pervasive tend ALSO states nel
Arve’ cense records to inferationrselen, fr instance.
“There are afew privacy taboos even online. Few, if ry,
services will supply mother's maiden somes fr far of 28.

‘ol waiable online, hough sme rte eed, och as
ame

Net ere ee raf ide pra
‘ie purpose at defined by the Pair Credit Reporting Act.
“These purpose inchde sot only extensions of red, but
‘sho employment screening 2d “legitimate nines nocd.”

“These services are sil beng widely used but the deep
‘well information they offer i ticking down t euch
‘mere consumer endy serves on the We. Some of them.
‘are fai iemocuoos. Websites noch os Foul and Switch
bond or example enable you to san tei caine nation:

‘ules: Private number: do not appear in thee directories.
But Web purveyor of mone indepth pera data are


‘We believe that SSA must be comprehensive in the date fields that the agency
selects fn order to keep “no matches” to an absolute minimum, We suggest thet it will
not be adequate to simply compare the full name and pocial security mumber. The SSA
symem must be flexible enough to except variables, for example, thatthe last name and
‘the social security number match, or that the nasnes match except for « middle initial in
‘ove rocord and the middle name spelled out in full im the other record. Other fields
should also be eotered to obtain s match, such as birth date, and city and state of
residence,

‘We are also troubled by the concept of lawful presence in the proposed rules. The
requiremcat that citizens prove legal presence is the United States, of US citizenship, in
‘order to obtain s driver's license of a photo identification card is a radical departure from.
current Virginia law. fy, applicants are to prove ideotity and residency in

deterrence to illegal immnigration into the US; however, it abauld not be unduly
‘burdensome on lawful residents, many of whom have beld their driver’s lioease all their
adult lives. We suggest, therefore, that the rules clearly define who is olighble, end who is
not eligible, to obtain a socia] security number (see Appendix D).

‘The rules should define whet documentation is required to show a person is
eligible fora social security number, but bas uot obtained one; examples of such

security nunmber and are ineligible to obtain ouc. The states will then be required to
‘obtain proof of lawfut presence documentation from these individuals who are not
eligible to obtain a social security number.

We respectfully suggest thatthe list of lawful preseace documents in Appendix D
should be examined futher, There are areas in which the list is overly inclusive, for
‘example, « B2 (visitor for pleasure) tourist in the US could obtain x driver's license by
showing: () primary document such as an arrival-departure record ina valid foreign

(i a secondary’ ‘such as a foreign sand (il) proof of lawful
[Prescace, which agein way be the arrival departure record (1-54) with a B2 visa, We do
‘not think that a tensporary visitor to the US should be given a state-issued driver's
license. There are also areas where the list may not be sufficieatly inclusive, for example,
‘we believe 2 Lawful refugee or & person lawfully seoking asyfun in the US should be able
to obtain « driver's license if they are able to produce the appropriate primary and
secondary documents.



CERTIFICATES

ALL £.0. STARTS WITH A BIRTH CEATITICATE: WETN THIS OCCUMENT ESs¢
SY THE ITSELF, YOU CAM OBTAIN ALL THE OTHER FCBMS CF CFFiCzaL.
1.D, SUCH AS SCCIAL SECURITY CARDS, DRIVERS LICENSES, WES ORIVER
POLICE 2.9. AND PASSPORTS. THE ENDING SECRET TO CREATING AN ALTEANAT!
T.D, AMO ISENTITY IS TO OSTATN A SIRTN CERTIFICATE IY ANOTHER NAME. -
I WELL GIVE YCU THREE DIFFERENT METHODS FOR OBTAINING A USAaLE BIRTH
E SIRECTLY FRCM THE STATE ITSELY; THEAESY, IT'S azcreTERES
AND STATE CM TEER COMPETERS AMD CAM BE CRECKED 27
AL CR GOVERGUNIT AGENCY WITHCUT ANY SANGER to THE

NEVERRESE ANY £.9. THAT IS NCT ISSUED BY THE VARICCS AGENCIES, TEN.
PETES. ANY 1.0, THAT IS OCCTORED OM FRCOUCED IS ASSOLUTELY WoRTE-
LESS ANO NCT WORTH THE PAPER TT IS PRINTED CM. TEE TRICK IS TO Bx
THE STATE CA GOVERNMENT ISSUE YOU QIRECTLY THE VARIOUS FORMS CF I.2.
YOU NEED. ALL YOU WEED IS THE REGULAR BIRTH CERTIFICATE - scurciz
#3 - THAT IS: FOLLOW THE ETLOW LISTED INSTRUCTICNS EXAcziy as
WAITINN AND YCO WELS EAVE mO PROBLEMS. -REMENEER, THESE AVE Bem:
TRIED AND THEY WORK.

q

YT .CRINICT BE SCMESNE WEO IS NCW LIVING, SiuCE You WeCLD aE
TING AN EXISTING SET CF 1.0. WHICH WOULD LEAD TO AN EARLY aNd
BY SOMEONE WHO JUST HIGHT CHECK YOUR I.D.. TEE soME-
CME Exse MUST BE THEY:

{Ala pEasce OF rouR szx

(2) & PERSCN OF YOUR RACE

(C) A PERSCM OF YOUR APPRCKIMATE AGE AT PRESENT TIME IF HE OR SEE
WAS LIVING (WHICR I MUST ADO IS WO LONGER LIVING AND THUS FAS NC I
THEA NEED CF 1.0. GMDER HIS MAME, THE PRCRLEN THEN LES IN FENZT
SUCH A PERSCN AMD ULTIMATELY CBTAINING KIS BLETH CERT:



70

EOMIGHT MENTICN HERE THAT I PERSONALLY MICH CF THC STATIS
WHERE YOU CAM APPLE FOR A DRIVERS LICENSE AND REZELVE IT TEE som
QaY WHILE YU WAL THE FIST STATE IF YOU WEED A LIZEMSE ry A
HURRY IS NE MEX THE SECONT STATE IS KANSAS. T ALSO BELZEvE
THERE ARE OTHERS ANO SCME RESEARCH CM THIS WOULD PSCVIDE THE AuswEzS
You NEES.

WETEA CSE A STATES THAT ISSUES A-ORIVERS LICENSE WITHCCT A PICTURE
OMLESS YOU INTE TC TRANSFER TO A STATE THAT cece A PIOTERE
LICENSE. VERY FEW CFFICIALS AEIARD THE NCM-?ICTURE AE Gece r.c.,

act yee car C@TATY CNE WITZCCT A PICTIRE ANG TEE! Ge to THE
STATE THAT L2SCEZ PICTURE ORITERS LicmUEES WITECIT ANY 72C8:

MT: REFERENCE 2CCK TI NATE IS “THE CHIVERS LicIusE
9-34, S#icz CAM BE PURCHASES BY MAIL FRCM THE CRIVERS LI- |.
SSTE-ACCR COMPANY = 1492 CCOSTAD DRIVE, RECWCCD CITY,~CALIFCR-
NIA 94063. TO PURCHASE THIS ECOK, WHICH IS MADE FOR POLICE GEFAAT-
MENTS AND BUSTNESSHEN, YOU NEED TO WAITS “A LETTER ON A COMPANY LETTE?:
HEAD STATING TMAT YOUR COMPANY CASHES A GREAT AMGUNT OF “GUT OF STATE
CHECKS" ANO THEIR GUIDE WOULD VERSFY THE STATES LICENSES IN QUESTICH
FOR YOU. THE GENERAL PUBLIC CANNCT PURCHASE THIS ECOK. IT WOULD BE
“MUCH BETTER IF YCU RAD SOMEONE WHO DOES Cw A COMPANY WEC YOU TRUST ..
AND HAVE THEM GROER IT FOR YOU IN THEIR ate. IT IS ALSO RECCMMENDE!
‘MAT YOU SECURE SZVERAL DIFFERENT DRIVERS LICENSES AND KES? CHE FCR
CTHING BCT THE LEGAL NAME THAT YCU WILL FINALLY SETTLE OGWN TO.

QRE: TAY TO SET UP A COMPLETE SET OF (1) BTRTH CERTIFICATE, (1) $0-
TAL SECURETY CAAD, (3) ORIVERS LICENSE, ANO (4) CREDIT CARDS FOR

1 NAME YCU PLAN TO.USE TO LIVE OM AND MEVER USE THIS SET FOR ANY~
“ENG ILLEGAL.

CREDET CARDS

DFESSTONAL T.0. SHOULD ALWAYS INCLUDE A FULL RANGE OF CREDIT CA20S,
“PAPER AND PLASTIC, ALTHOUGH A FEA COMPANIES ARE BEGINNING TO USE


16

Mr. McIntosH. Have you had any success in clearing up the
Florida or the Sacramento arrest warrants?

Mr. Younc. Well, I got a letter from Sacramento saying that I
am the real Marvin Young. And at this time when they stop
this mn, they didn’t fing ints. I don’t know what they
did. But they found out later that this was not the real Marvin
Young. But I got a lot of things cleared up and paid out a lot of
money, certified letters, copies, and just spent a whole bunch of
money that I could really use right now on myself to get a lot of
these things cleared up.

Mr. McINTOSH. Thank you for coming today, especially for trav-
eling all the way from California.

Let’s hear now from a couple of witnesses who have worked in
this area in the policy questions involved. I appreciate you coming
today. The first will Mr. Greg Nojeim. Mr. Nojeim is with the
American Civil Liberties Union.

Share with us a summary of your testimony, Mr. Nojeim.

Mr. Nose. Thank you, Mr. Chairman. I appreciate the opi r-
tunity to testify before you about national ID on behalf the ACLU.
We are a nationwide, nonprofit, nonpartisan organization of more
than 275,000 members, devoted to protecting the principles of free-
dom set forth in the Bill of Rights.

The ACLU has always vigorously opposed the creation of a na-
tional ID card. And, Ms. Cross and Mr. Young, you inspire us to
work harder on this issue. The stories that you have told us are
extremely troubling and they really tell us that personal privacy is
at risk today more than ever in the past.

Over the past few decades, proposals for a national identification
card or a national ID system Have appeared a tempting—but ulti-
mately ineffective quick fix to a national problem of tracking one
segment of the population or another. Lately these proposals have
accelerated.

In 1996, Congress enacted welfare legislation establishing na-
tionwide data bases of new hires to promote the payment of child
support. Also in 1996, Congress enacted immigration legislation
that tests a national worker verification scheme to prevent undocu-
mented people from working. However, the tide against national ID
may be turning.

This year, Con; 8 rejected a Proposal to create a national data
base of registered voters and it held up a nationwide patient identi-
fier number that would Put patients’ sensitive medical records at
risk of disclosure. My colleague, Ms. Bitol, will discuss that pro-
posal in some detail.

We believe that national ID systems and nationalized ID cards
that would support them are incompatible with a free society. This
is not Checkpoint America.

These solutions lead inevitably to violation of the most basic of
American liberties: the right to be left alone. Unlike children and
workers in Nazi Germany or Soviet Russia, apartheid South Africa,
Castro’s Cuba, or Saddam’s Iraq, no American need fear the de-
mand for identity papers from their Government. We cherish our
right to be individuals, to be left alone, to start over, free from pry-
ing eyes and the grasping hands of Big Brother bureaucrats and
snooping commercial interests.


159

STATEMENT OF
JAMES L. KOLSTAD
VICE PRESIDENT, PUBLIC AND GOVERNMENT RELATIONS
AAA

To the Subcommittee on National Economic Growth,
Natural Resources and Regulatory Affairs
Hearing on Repealing Section 656(b) of the Illegal Immigration Reform Act

September 17, 1998

On behalf of the 41 million members of AAA, I am pleased to offer our comments
about the requirements imposed on state motor vehicle agencies as a result of passage of
the Illegal Immigration Reform Act, and specifically Section 656 (b), which is now the
subject of proposed rulemaking by the National Highway Traffic Safety Administration
(NHTSA).

‘AAA believes that Congress should seek a delay in implementing this section of
the law until its impact on states can be carefully analyzed and a determination made
whether state motor vehicle agencies should be or are appropriately prepared to act as a
checkpoint on illegal immigration.

The purpose of the Immigration Reform Act was to improve deterrence of illegal
immigration into the United States. The issue before this subcommittee, however, is
whether a specific section of the law, Section 656 (b), will impose additional and
unmanageable burdens on state motor vehicle agencies which, in many cases, are already
stressed seeking to fulfill their primary mission.

‘AAA views the right to drive as a fundamental right and also recognizes that
“driving is a privilege based upon qualifications and satisfactory driving record.” Our
policy goes further to state: “The grounds for issuance, suspension or revocation of
driver licenses should be strictly limited to motor vehicle operating offenses, physical
impairments, or other reasons related to motor vehicle operations, as determined by
the state legislature.” (emphasis added)

No matter how well-intentioned the cause or purpose, AAA questions whether
the driver’s license is the appropriate vehicle to attack every societal problem. A policy
that assumes “one size fits all” is likewise short-sighted and intrudes on the prerogatives
of individual states.


98

Welcome to a small town called the Internet,

By Chris OM

‘PHOTO ALLUSTRATION BY JOHW 8. CARNETT

ORDINARILY, I'm hardly what you'd call
a nosy neighbor—each to his own is my
credo. Yet, without moving from my desk,
I've learned what my neighbors paid for
their houses, whether they've refinanced,
how many bathrooms they have, and what
attey eit median income is. Hknow
their birth dates, social security
numbers, and driving records. And with a
bit more digging. I could unearth many of
their legal and business dealings.
De rou i hi uct? Yu nih Bt casier
pete.

thic None ofthis i
‘thclqe al uch eae ticle © mene
‘with a computer end s modem.

age


21

would lengthen and dnvers’ tempers would flare DMVs would have to serve many drivers twice
dunng the renewal process. It would be less expensive for the states, and more convenent for
drivers and for the states, if the SSN was simply put on the driver's license.

The statute thus builds in an incentive for the states to do what most of them have recently
decided not to do: compromise privacy interests by putting drivers’ SSNs on driver’ licenses.
Currently, only six states require SSNs on the driver's licenses they issue. Most of the large states
have moved away from such a requirement in order to protect their drivers’ privacy, reduce fraud,
and inhibit ID theft. Section 656(b) would effectively require many states to change course.

It is not difficult to anticipate the next federal demands on the federalized driver's licenses.
‘Soon, the Federal Aviation Administration, which already requires air carriers to solicit state-issued
ID from air passengers, will tell air carriers that only state-issued ID's meeting the Transportation
Department's standard are sufficient and that anyone who produces anything else should be treated
a5 a potential terrorist. (This is how the FAA currently directs carriers to treat passengers who
produce no ID.) Then, the Department of Health and Human Services will tell state agencies that
distribute federally-funded benefits that only the federalized-ID’s will do. Then, the Department of
Justice will tell employers that they cannot hire any employee who presents a state-issued ID
document that does not meet the federal standard. This is not a fanciful jump; it is a logical
application of the mandate of Section 656(b) to existing federal identification mandates. In no time,
Americans would have to produce the federalized ID to engage in everyday life activities that
should not be subject to federal governmental interference, such as getting on an airplane, obtaining
1 benefit from their state, or getting a job.

‘Some believe that the way to deal with the problem of undocumented aliens who seek work
is for the federal government to threaten the privacy rights of every USS. citizen. ‘The ACLU
believes that Big Brother, and bigger goverment, are not the answers to this problem.

PROBLEMS WITH THE NATIONAL ID SCHEME

A national ID system and the nationalized identification cards that would support it would
inevitably violate the most basic of American liberties: the right to be left alone. Unlike children
and workers in Nazi Germany, Soviet Russia, apartheid South Africa, Castro's Cuba or Saddam's
Trag, no American need fear the demand, "Identity papers!" We are a free people who cherish our
right to be individuals, to be left alone, and to start over, free from the prying eyes (and grasping
hands) of both Big Brother bureaucrats and snooping commercial interests.

Existing Privacy Protections, Including the Driver's Privacy Protection Act. It is important that the
Subcommittee step back and measure Section 656(b) against the existing privacy regime -- such as
it is ~ in the United States. The Fourth Amendment is the comerstone of personal privacy in this
country. It prohibits the govemment for conducting a search without probable cause, and in most
cases, a judicial warrant. But the Fourth Amendment does nothing to protect personal privacy in
this context. When a person “voluntarily” divulges personal information to a state DMV in order to


50

STATEMENTS OF BRIAN FLAHERTY, CONNECTICUT STATE
REPRESENTATIVE; GEORGE GRINDLEY, GEORGIA STATE
REPRESENTATIVE; AND RICHARD D. HOLCOMB, COMMIS-

SIONER, VIRGINIA DEPARTMENT OF MOTOR VEHICLES

Mr. FLAHERTY. Thank you very much Mr. Chairman. Good morn-
ing. My name is Brian Flaherty. I am a State representative from
Connecticut. I serve as the deputy house minority leader. I also
serve and appear today on of the National Conference of
State Legislatures. I am vice chairman of the Assembly-on Federal
Issues, which is NCSL’s forum for forming policies that we then ad-
vocate in the Nation’s Capital.

NCSL represents the legislatures of 50 States and the Nation’s
commonwealths and territories, and our organization has been an
outspoken and a firm believer in the Federal system of govern-
ment. We consistently defend State authority, resist preemption,
and certainly resist unfunded mandates, and we have always
sought balance and flexibility in the delivery of services through
State and Federal erships.

Mr. Chairman, just about 2 years ago, a letter was sent to the
House and Senate leadership on a then-pending conference com-
mittee on an illegal immigration reform bill. Part of that letter
stated:

‘We write to you today to express our strong belief that the House should not ac-

the extremely ill-advised provisions of the Senate bill that would Federalize

The letter goes on to say that, “By forcing States to implement
or verify Social Security numbers with driver's licenses, the Federal
Government would be scorning the considerate judgment of 37
States that for reasons of crime prevention and personal privacy,”
some of which you heard just a while ago, “choose not to use Social
Security numbers as all-purpose identifiers.”

Mr. hairman, that letter was signed by you and several of your
colleagues.

Mr. McINTosu. I remember.

Mr. FLAHERTY. My message today on behalf of the National Con-
ference of State Legislatures, Mr. Chairman, is quite simple and
you referred to it in your opening remarks, that section 656(b) of
the 1996 act must be repealed immediately. It is a gross usurpation
of State authority. It is an ununfunded mandate. It federalizes an
activity that fundamentally should remain with the States and, as
such, is preemption at its worse. And because the section requires
Federal regulations and is a flawed section, it is thereby, in our
opinion, creating or leading to the creation of flawed and bad regu-
lations.

And if I could be so bold, as a State lawmaker to a Federal law-
maker, I am sure we know very well that sometimes when you
have a legislation or a law that is drafted in a certain way you
can’t help but get the regulations to follow. That is why, rather
than a fix of the regulations, we are seeking the repeal of that sec-
tion of the law ou’ t.

Mr. Chairman, NCSL has submitted when those regulations
came out, we submitted comments and basically centered on three


94

Mr. GRINDLEY. One other thing I forgot that I had here, I got a
copy from Popular Science, it is the January 1997 issue, it is
“Internet Spying: What They Know About You.” And it goes into

at detail about what sites are out there, what someone can
ow, and that currently all 50 States currently sell their driver's
license information, which I was shocked to find out. But it is a
very in-depth article.
(r. McINTOsH. I would like to also ask unanimous consent that
that be put in the record. Thank you yery much.

(The prepared statement of Mr. Grindley and the information re-

ferred to follows:]


33

used to link all medical records from cradle to grave.

Under our laws, what you tell your lawyer is generally protected against
government intrusion, and arguably, what you tell your doctor is certainly
as important as what you tell your lawyer. Most Americans would agree
that our medical information deserves to be as well protected. In fact,
many people don't realize how public their medical record really is. While
state laws differ depending on the state, your doctor, the people working
in your doctor's office of course have access to your records, but also
employees at your HMO office, your employer including your human
resource manager and supervisor all potentially have access to your
medical information. The fact that someone has an abortion or suffers
from depression or is being tested for a genetic illness is simply not
something that they would want to necessarily share with anyone other
than their doctor.

The unauthorized use and abuse of this confidential information is already
widespread. Most Americans would be alarmed to learn how many pairs
of eyes are scanning what they thought was a privileged communication
with their doctor. According to TIME Magazine, trading of health
information has already become a $40 billion industry. A report by the
Institute of Medicine (1997) noted that the roster of parties claiming a
“need to know" what is in an individual's medical record was too
numerous to list.

The problem with protecting privacy, especially medical privacy, is that
many perceive the need for o balancing test, balancing privacy with the
needs of industry, research and technology. While technological
advances bring tremendous benefits to society, the quid pro quo should
not, and need not, be the loss of control over our own personal
information.

It is the position of the ACLU that strong federal legislation which
establishes enforceable privacy protection for personal health information
is critical. The ACLU supports federal legislation that provides individuals
with meaningful control over who may have access to their records,
including limiting some persons to specified information only. Re-disclosure
should be prohibited except with specific permission or, in very narrow
circumstances, upon express statutory authorization. We support federal
privacy protection in this area for three primary reasons: first, staggering
technological innovations which allow for easy transfer of personal health
information over great distances; second, the expansion of managed


167

entry, whether by sneaking across the border or violating the visa status will steeply duminish
Then the resources of the Border Patrol and the INS inspectors will be concentrated on
employers who knowingly continue to exploit illegal aliens, and the sanctions in the law can be
applied in full measure against them.

The adoption of new security features in the driver's livense is a major step in that direction. The
driver's license is the primary identity document in our society, and it has been a primary target
for document forgers who are supplying illegal aliens with the counterfeit documents that may be
shown to a new employer to meet the screening provisions of the [RCA employer sanctions
system. A false Social Security card is similarly illegally manufactured and sold to illegal aliens.
The false cards may be created with imaginary account numbers or they may use the account
number of someone else. By incorporating the verified SSN into the records of the driver's
license file, we will curtail the opportunity for document forgers to be able to sell their customers
documents that will stand up to normal scrutiny. This will be a major step toward regaining
control over our immigration policy.

WHY SECURE DRIVER'S LICENSES WILL NOT BE A NATIONAL ID

As I mentioned earlier, we believe that the term "national identity card” is an inaccurate and
alarmist characterization. Americans do not have the experience of Europeans and others who do
have national {D systems, so they may not realize that a national {D is one issued by national
authorities and is required to be presented by persons regularly for a range of services and
investigatory processes. It also harkens back to imagery of governments demanding documents
from citizens on the street without probable cause or other procedural process. This differs from
a secure driver's license not only in that it would not be a national document, but also in that it
would not be required for any additional purposes that a driver's license is required for now,
However, in cashing checks, giving proof of age or residence as well as for demonstrating
competency to operate a motot vehicle, the driver's license will have greater reliability when the
new security features are incorporated.

‘Those are the primary reasons that FAIR strongly supports implementation of the provisions of
INA Section 656 and the proposed rule of the National Highway Traffic Safety Administration to
begin implementing the steps necessary to make driver's licenses more secure. FAIR believes
that itis clearly in the national interest that we move forward expeditiously with this process.

Mr. Chairman, FAIR's interest in this law is that it will help improve interior immigration law
enforcement to stem the tide of illegal immigration, We know there is strong public support to
curtail illegal immigration. We also know that there are other interests who oppose this law for
reasons completely unrelated to immigration law enforcement. That is there right, of course.

But let the record show that if Congress does move to repeal Section 656 of the INA from federal
Jaw, it will be Striking out one of the most important initiatives to cut off the magnet of illegal
immigration enacted in 1996. We urge that this committee vote for the control of illegal
immigration, and against the welfare cheats, international smugglers and abusive employers who
exploit illegal labor. Retain Section 656 of the INA and allow the Department of Transportation
regulations to take effect as proposed.

Thank you for this opportunity to submit testimony.

4

O°


132

STATEMENT BY
CONGRESSMAN BOB BARR (R-GA)
BEFORE
THE HOUSE OF REPRESENTATIVES
COMMITTEE ON
GOVERNMENT REFORM AND OVERSIGHT
SUBCOMMITTEE ON NATIONAL ECONOMIC
GROWTH, NATURAL RESOURCES, AND
REGULATORY AFFAIRS
ON SEPTEMBER 17, 1998

NATIONAL CITIZENS IDENTIFICATION CARD



W

Some believe that the way to deal with the problem of undocu-
mented aliens who seek work is for the Federal Government to
threaten the privacy rights of every U.S. citizen. We believe that
Big Brother and bigger government are not the answers to this
problem or to other problems.

One of our greatest fears is governmental misuse of records gath-
ered for innocent purposes. For example, the confidentiality and
Census Bureau information was violated during World War II to
help the War Department locate Japanese Americans so they could
be forcibly interned in camps.

ing the Vietnam war, the FBI secretly operated the Stop
Index by using its computerized National Crime Information Cen-
ter to track and monitor the activities of people opposed to the
United States’s involvement in the war. “Trust us with your per-
sonal information, we are the government.” That is not a theme
that resonates well with the American people.

Now we ask you to enact legislation to reject the statutory au-
thority for a rule proposed by the Department of Transportation.
The rule would require the States to conform their driver's licenses
to a Federal ID standard and to obtain a physical description, pho-
tograph or image, and Social Security number from every driver.

‘o our knowledge, implementation of the statute would mark the
first time in history that the Federal Government mandated that
the Social Security number of virtually every adult in the country
be tied to a physical description or photograph of the person in
records that are unprotected by the Privacy Act.

This threat to personal privacy is not mitigated by the Driver's
Privacy Protection Act of 1994. The act, which became effective 1
year , includes many exceptions that allow for disclosure of
drivers’ Social Security numbers and other personal information,
and the act itself has been the subject of a number of successful
challenges under the 10th amendment.

Some will argue that State compliance with the statute to which
we object, section 656(b) of the 1996 immigration law, is voluntary.
This is a myth. The States will issue nationalized identification
cards that meet the Federal standard because if they fail to do so,
residents of the State will have no ID with which to secure Federal

nefits.

Imagine going to the post office to get a passport so you could
travel to Europe on your honeymoon and being told that the Fed-
eral Government will not accept your State-issued driver's license
as ID. No resident would stand for it. No State would risk it.

Worse still, the statute to which we object coerces States to actu-
ally facilitate ID theft by putting drivers’ Social Security numbers
on driver’s licenses. The statute purports to give the States a
choice, either put the Social Security number on the driver's license
or verify it with the Social Security Administration and put it in
the State DMV records.

But to avoid the cost of verifying the Social Security number as
well as the ire of drivers sent to the Social Security Adrainistration
to correct faulty Government records about them, many States will
simply put the number on the license.

cure for these ills is not to tinker with the Department of
Transportation’s proposed rule. Rather, the underlying statutory


29

to the Department of Motor Vehicles, I had to get a birth certifi-
cate, I had to show her adoption Papers. T had to get an order from
the California court showing that I was her mother, because we
had two birth certificates. “Unbelievable” is the only word I can use
to describe this situation. And, we are talking about the steps
taken to | protect her privacy. We are not even talking about iden-
tity

Mr. McINTOSH. So, all the pressure was for you to just say, yes,
go ahead and use the Social Security number?

Ms. Brrov. Yes, right here in Washington, DC, those are the
steps you have to go through. In fact, after all that, both she and
I had to sign something to issue a random number. On top of all
that, try A to the grocery store or any store here and try writ-
ing a check, they look at the number and say, “Well this isn’t your
Social Security number. Why don’t you have a Social Security num-
ber? Who are you? This is a fake ID.” It is unbelievable.

Mr. McINTOSH. Because the community is used to looking for So-
“aie BITGL. "Thats tight. Most people don't reali

is. BrToL. That’s right. Most ple don’t even ize saying
you don’t want to use your Social ceurity number is an option.

Mr. McInTosH. That is amazing. I am blessed in Indiana. They
allow you to use a different number, and the Social Security num-
ber is an option to put on there if you want to.

Ms. Brtou. That’s the way it is in California where we are from,
but in Washington, DC, it is a different story.

[The prepared statement of Ms. Bitol follows:]


129

As we have stated earlier, subsection 656(b), as enacted,

provides that the social security number need not appear on the
license. The proposal accordingly does not propose that the
social security number must appear on State driver's licenses and

documents. It would appear that, for many commenters, any

proposed use of the social security number ra the prospect of
a national identification card, even if a State uses the number
only to verify the identity of an applicant and does not use the
social security number on State documents.

It is not our purpose to address the merits of Section
656{b), but only to state that in executing its requirements we
sought to be faithful to the provisions of the Act.

The publication of the proposal gives the public the ability
to see whether they agree with the underlying law. Insofar as
all the provisions that have provoked public opposition are in
fact required by the law, the Subcommittee has an opportunity to
assess the public reaction directly. If it is the view of the
Subcommittee that Subsection 656(b) has potential consequences
that were not intended, we would be glad to work with the
Subcommittee to devise alternative legislative means of
addressing the purposes of the Act while ensuring the integrity
of driver’s licenses.

We want to state clearly that we have no programmatic
interest in whether a final rule is issued. We issued the

proposal because we were directed by the Act to do so. The use


113

Implementation Costs

Virgina notes that the proposed rules state that the President included a
request for $325,000 in hus fiscal year 1999 budget for grants to assist the states.
Virginia is certainly interested in participating in any grant program; however, we
calculate our costs for the new driver's license to be in excess of $1 million. This
includes the cost to add a bar code to the driver's license, as well as bar code
teaders and personal computers to support the bar code readers.

We estimate that it will cost Virginia approximately $60,000 to $90,000 to
match all existing records with SSA. In addition, there will be further continuing
on-line costs of approximately $18,000 per year to match applications for new
driver's licenses. These costs are significant, especially when you consider that we
are shouldering the weight of another unfunded federal mandate— the National
Voter Registration Act, also known as motor-voter.”

| appreciate the opportunity to comment on the proposed rules. I am
confident that the proposals can work with prompt and guaranteed response time
from SSA, variable matching criteria, an established remedy for customers whose
social security number comes up as a non-match, pre-validation of existing social
security numbers through batch transmissions, clarification of the requirements for
lawful presence as well as language in Section 1331.6 along with adequate
funding for the states. At both the state and federal levels, we are working toward
the same goals—protection of our citizens’ interests and the prompt, convenient
and efficient delivery of government services.

Again, thank you.

DMV is very proud of the record of success in implementing the National Voter Registration Act (NVRA). Since
implementing this program in March 1996, DMV has assisted in the voter registration of 449,058 persons and
handled the name and address changes for 106,416 persons, The costs of this successful record of achievement has
been absorbed by DMV.


5

COMMONWEALTH of VIRGINIA
Department of Motor Vehicles

weet 2300 West Broad Street Hoes Fe Bie ao:

Goran

July 31, 1998,

Docket Management, Room PL401

National Highway Traffic Safety Administration
Nassif Building

400 Seveath Street, S.W.

‘Washington D.C. 20590

Dear Sirs:

Re: Docket No. NHTSA-99-3945,
‘State-Isqued Driver's Licenses and Camparsble Identification Documents

‘We write with Virginia's comuscats in response to the proposed rules
‘mnplementing the Illega! Immigration Reform and immigrant Responsibility Act of 1996,
‘which appeared in the Federal Register, Voluase 63, Number 116, on Wednesday Juae
17, 1998, We appreciate the opportunity to reepond.

adready complies with the statutory requirements of Section 656 (b), with

end ,
docs not require thet the social security number appear on the license, but we do require
‘that proof of the social security number be submitted by every applicant for driver's
license and photo: card ing the applicant has « social security

tember) The applicant ey opt to ue coml maser at epear oa te fc of ha
license, but the social security sumber is retained on the person's record.

‘We note that NHTSA proposes that, beginning October 1, 2000, each State shall
verify each spplicatioa for x naw, duplicate or renewal driver's license or ideatification
document electronically with the Social Security Administration (SSA), unless previously
validated. We are sure that Virginia will have the technical capability to verify
electronically; however, we are concerned with the following: (i) the speed of verification
bby SSA; GD how non-matchcs will be handled; and (ii) what bappeas whea the system is
down at the SSA, or when for some other reasca, we are unable to obtain an immediate
response to a verification from SSA.

FAX: (904) 367-6631 TDD: 1-000-272-9068 MAR: commid@éuv.sni.vnes WEB SITS: wev.env.ast.vs.e0


aa Congress of the United States
oa ‘Bouse of Representatives:

Betece emcee ‘WaseanaTon, DC 20515-6149,

— ‘COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT
— 2187 Rurouni HOSE Orrick BK

A National ID Card: Big Government at its Worst or Technological Efficiency?

‘Opening Statement of Chairman David McIntosh
‘Subcommittee on National Economic Growth,
Natural Resources, and Regulatory Affairs
‘September 17, 1998

‘Today the Subcommittee will examine several recent steps, taken by the Congress and the
Clinton Administration, towerd establishment of a national ID card. These measures — which
include a medical ID. requirements for uniform driver's licenses containing Social Security
‘numbers, and a national database of all newly hired employees, among others -- move in exactly
the wrong direction, threatening the privacy and security of all American citizens.

‘The new law which requires the Department of Health and Human Services to create
‘unique health identifier, or medical ID number, for all Americans would expose an individual's
personal medical records to public scrutiny. As aresult, individuals would be vulnerable to
discrimination based on their medical histories -- they may be turned down for jobs, insurance.
and important benefits. A medical history is one of an individual's most private records, and it
‘merits the greatest degree of privacy protection. Vice President Gore has indicated that the
‘Administration does not intend to move forward on establishing a medical TD until the proper
privacy protections are in place. Now we in Congress need to make sure that the privacy
legislation enacted is truly adequate.

‘One of the National Highway Traffic Safety Administration’s latest proposals appears to
‘teate a de facto national ID card. This regulation says that a federal agency may only accept as
proof of identity a state-issued driver's license which conforms to certain standards, including.
thet it must contain a Social Security number or at least that « Social Security number is verified
for each applicant. The privacy concems surrounding this requirement are clear ~ alla thief
needs is a Social Security aumber to open credit card accounts and bank accounts in someone's
name and ruin his or her credit rating for life. With a Social Security number, anyone can find
‘out almost anything about an individual on the Intemet, including where he or she lives. This
technology gives stalkers and abusers easy access to their victims,

Many states are aware of these privacy concerns and are now changing their laws so that
their citizens do not have to include their Social Security numbers on their driver's licenses. This:
‘regulation is moving in the opposite direction. .


92

The soiution to this foraidable problem 1s not a simplistic one. There has been
cons:deraoie confusion and little agreenent as to vhat the answer ts At one end
of the spectrum there are individuals advocating acre proactive law enforcement
techniques, while at the other end there are those who advocate a ore reacts:
approach. In the financial community there are those vho favor stricter controls
on Le: practices and thea there are those who favor leas. Within the leg:
arenas tere lav makers ho propose tougher seatences and then there are
those who argue that building more prisons just isn't feasibl Some vill
propose chat if we just stopped Migerians from entering our councry the:
probien would be alleviated, but then you have the problea of politics and oii

solucton to this financial aight=are. If che

arole in the solution, then decerrance aust
is based on three funda:

2 3 be tmposed, tne severit:

shac the pe osed fai!

bean a taccor in any rine especial;

and business:cocuntsies are going to contribuea
igusa then they guse address the problem for vhac ie 1a and accept theiz
Tesponsiosbicy in the problen's origins. They must actively pursue crinite®
prosecutions oa these individuals and ot merely acquiesce

‘The legai arenas must realize that the short range cost of building wore
correctional institutions will be ourveighed by the long-range goal of reduc.
the exorbitanc cost of “white collar” crime,

Finally and possibly the most important element in solving this multi-faceced
probien ts oil. As long as Nigeria remains one of this country's leading oil
producers, then politics will uandate the 15% approval rate of visas from
Nigeréa. With approximately 300 individuals applying for visas on a daily basis
then approxinately 45 individuals « day, are receiving visas to enter the U.S.
Many of these individuals become involved in fraud once they arrive in che U.S.

e sore tne fact. Recently, che Aclanca District Office of INS began a
Liaison with Scotland Yard. According to Scotland Yard officials, approximately
25% of all bank fraud in Great Britain is being conducted by Nigerians. There is
deect evidence that many of the Migerians in Great Britain travel to and fron
the Unicad States committing the same crines in both countries.



38

the dangerous drift toward federal identity verification and tracking systems in a variety
of forms—not just smart ID cards with embeded silicon chips and biometric identifiers—
part of your ongoing work in regulatory oversight. I argue below that unless we
consciously monitor and check this drift, not just one I.D. card but more likely a whole
complex of identity tracking systems will result from the normal course of operations by
government agencies that act in the way that naturally makes most sense to government
agencies.

To use a phrase I have borrowed before Professor Lance Hoffman of George Washington
University: the size of government and the development of technology have reached a
critical stage. We can and must choose every time we make a regulatory policy decision
that has a technological component: Do we build Big Brother in, or do we build Big
Brother out? I favor building Big Brother out. However, as our nation progresses and
society becomes more complex, this choice to limit the future options for expansive
government and violation of basic civil and constitutional liberties is a choice we must
constantly make anew.

Let me proceed to the substance of my comments. The immediate topics at hand are (1)
the proposed standards for a drivers licenses that are tantamount to national ID card that
were issued by the Department of Transportation pursuant to its interpretation of last
years’ immigration bill and (2) standards being being develop by the Department of
Health and Human Services for a unique healthcare identifier for individuals as mandated.
by the Kerinedy-Kassebaum Health Insurance Portability Act of 1996.

Like the other witnesses I will touch on these matters to some extent, but at the request of
this Committee I will devote the bulk of my remarks to a broad overview of the forces
driving this country toward a national ID card or similar identity verification system.
Farther, I outline the dire implications such a system would have for the cause of liberty
in this country. And finally, I present a series of legislative steps Congress could take in
order to put a national ID card permanently off limits or at least eliminate ways in which
minot policy errors could accumulate over time and allow such a system to come into
being through sheer inattention to detail by you, the people's representatives in Congress.

1 would summarize the points I make as follows:

First, a national ID card system, if enacted, would result in dramatic and arguably
irreversible expansion of the regulatory-welfare state.

* Second, itis particularly dangerous in this era of networked computers and unlimited,
cheap computing power to let government agencies take upon themselves the business
of regulating networks and setting technical standards for any reason whatsoever.

© Third, the DOT/NHTSA Standards for drivers licenses, the Kennedy-Kassebaum
healthcare identifier, and the “new hires database” in are the tip of the iceberg in
terms of federal programs driving the nation toward some type of national ID


157

‘heanngs, the NCVEIS plans to make recommendations to the Secretary regarding the unique
‘health identifier for individuals,

‘Secretary Shalala has been at the forefront urging Congress to enact privacy legislation. More
recently, Vice President Gore announced in July that the Administration would not implement
the UHI for individuals uatil Congress has enacted comprehensive medical information privacy
legislation. ~“{AJeting on this requirement before Congress has enacted strong, tough, meaningful
‘medical records privacy legislation could compromise the privacy of Americans in many ways,
‘Therefore, on behalf of President Clinton, I am annouacing that we will not put this new
provision into place until we are certain that Americans’ basic privacy is absolutely protected.”

Next Steps

‘We betieve that the best approach is to find a way to address industry's desire that we move
forward with technical standards for the UHI and to obtain more public input and build
‘consensus about the technical standard while we work with Congress to develop comprehensive
federal privacy legislation. By setting technical standards for the UHI but waiting until
sppropriate privacy protections are in place to assign numbers, we can achieve both goals of this
legislation: enhanced efficiency for the health care system and eahanced privacy for individuals.


124

The Act reflects Congress's concern that these documents are
often falsified. The subsection accordingly prohibite Federal
agencies from accepting, for any identification-related purpose,
a driver's license or other comparable identification document
issued by a State unless the license or document satisfies
certain requirements.

Subsection 656(b) establishes three requirements that state-
isaued driver's licenses or other comparable identification
documents must meet before Federal agencies can accept them as
proof of identity. We will address each requirement in turn and
explain how our notice proposes to implement the requirement.

The first requirement concerns the application process for

these documents. §656(b) (1) (A) provides that:

(1) APPLICATION PROCESS.-- The application process for the
driver's license or identification document shall include
the presentation of such evidence of identity as is required
by regulations promulgated by the Secretary of
Transportation, after consultation with the American
Association of Motor Vehicle Administrators.

The notice accordingly proposes a process under which
applicants for a new or duplicate license or document would be
required to submit two identification documents. Applicants for a
renewal would be required only to submit their current license or
document, The notice proposes a list of primary and secondary
documents from which the State could select two documents for
identification purposes. The primary document list consists of
24 documents, including such documents ae a State or Canadian

photo driver's license that has been expired for less than a


ro

where everyone knows your business.

‘What does the online wold now about you? Plenty
and

‘mot ofthe information abut you sn coming Fem yo,
‘eas ot dee 1 coming from rad preament
second and busines tramaction, which ae beng dig-
aed, inked, packaged ok and esol AK hse
sm or at leat is nt cety

‘way worked. With few dole anda tip tothe ight city,
‘county, or state agency, you can get copies of many pub-
Sy ed merch ma ae arti eth

<elve i aregeling at ooghly the tame moment in time.

‘ployer and landlords to ge you a elect once vet
before ling out the welcome mat. And before you fee
too fronted is woth noting that ou might want i
too, whether itt de mising bane inthe family
‘wee orto check uta chideare worker.

‘Nataly, marker want it at wel—preferaly in
large quattics—to ty to do what they abwoys doe
ZS, Ty aig pact se pe

certificates. But a funy onthe way 10

Tins and

city all in the 1990, cnt lr

to your onscreen in-box, as well as your postal mailbox.

factort: PCs are ‘And ar shopping by takes of, they‘ want to
tif hen Sl rm {now more about your ooline buying habits 28 well One
the works: and the Elee-

ye hae tae tronic Frontier are testing 2syters called

seeking new sources of revenue. In short, the warket-
place for online information, and the ability or desie to

prior to buying anything online whether information

Ca


41

Itis only a matter of time before our computer-controlled cars cruising smart highways
send continuous reports on their movement to some centralized traffic manager.
Likewise, spending electronic currency from our digital wallets is something that could
theoretically be monitored as it happens. There are very bright people in the Treasury
Department imagining ways to do this even as I speak—indeed, many forward-looking
people in Treasury fear that electronic currency could render large portions of the tax
code unenforceable. So, instead of simply adopting a flat tax or retail sales tax that would
be more likely to work in the digital economy, these well intentioned people at Treasury
propose massive and unconstitutional violations of privacy instead.

Now, third, we have the real problem, which explains why governments should be out of
the identity-verification business and not involved in setting standards for digital
signatures, certificate authorities, payment evidencing systems, and the like. The reality
is that governments and private-sector business are very different in what constitutes, for
their purposes, useful verification systems.

© Governments are coercive institutions in the business of applying force against
particular people. Hence they have a paramount interest in obtaining personal
identifying information, in unlimited quantity and detail, which is balanced by no
economic consideration or other restraint.

By contrast, markets and civil society are voluntary associations governed by property
tights and the law of contract. What matters to them is aggregate outcomes. Personal
identifying information about an individual has value primarily to the extent it
identifies a potential customer as a sales prospect or credit risk.

At this point, itis not my intention to defend certain private sector practices with regard
to customer or consumer databases. ATR is still developing its position in this area, and
among other things we are greatly concerned at the attempt by certain health insurance
companies to lobby for government assistance in amassing huge files of personal medical
records which they ought not to have and have no legitimate reason to collect. I would
refer you to the excellent work done by the American Association of Physicians and
‘Surgeons (APS) in this regard, which is available at www.AAPSOnline.org

‘What I will point out is what over-reliance on centralized bureaucracies gets us. In his
classic work, the Road to Serfdom, F.A. Hayek explains that the failure of regulatory
interventionism simply begets more interventionism. As government attempts to
micromanage our lives become more pervasive, and these attempts fail, the answer will
always be to use the National ID card system at an every higher level of detail and to
apply it to more things. If a national ID card exists, government agencies will use every
type of leverage they have from regulatory coercion to industrial policy in order to use the
national ID card as a tool to regulate more and more things.

‘Other people giving testimony this moming will probably touch on the fact that a national
TD card creates an infrastructure for applying more stringent regulation to just about any