Undercover investigation finds passport issuance process vulnerable to fraud

The State Department's passport issuance process lacks data verification and counterfeit detection techniques, according to several testimonies at a July 29 hearing before the Senate Judiciary subcommittee on terrorism and homeland security.

In an undercover investigation, the Government Accountability Office applied for seven U.S. passports using counterfeit or fraudulently obtained documents to simulate scenarios based on identity theft. The GAO successfully obtained three of the seven passports. Five were processed by the State initially, and later two passport applications were intercepted by mail, prior to delivery.

"We have made significant improvements to the passport issuance system, but the fact is that we did not catch all seven fraudulent applications," said Brenda Sprague, State deputy assistant secretary for passport services, during her testimony.

The State Department "failed to crosscheck the bogus citizenship and identity documents in the applications against the same databases that it later used to detect GAO's other fraudulent applications," said Greg Kutz, managing director forensic audits and special investigations for GAO. 

GAO identified two major vulnerabilities in the issuance process:

• Passport agents and examiners accepted counterfeit or fraudulently acquired genuine documents as proof of identification and citizenship--a problem complicated by the wide variety of documents that are eligible to prove citizenship and identity. (During the hearing Sprague encouraged the standardization of birth documents, as vital record offices across the country have their own unique security features and signatures.)
• State is limited in it's ability to access data from other federal and state agencies, due to privacy limitations, making verification difficult. ("As we are not considered a law enforcement entity, we have limited access to the driver's license data," Sprague later explained.)

The investigation was launched following a request that GAO perform additional proactive testing of passport issuance. The investigation and hearing were followed a May 2009 hearing entitled "The Passport Issuance Process: Closing the Door to Fraud." In March 2009, GAO reported on weaknesses in State's passport issuance process. In April 2009, GAO suggested that State take five corrective actions based on these undercover tests and State acknowledged those corrective actions.

"While even one passport issued in error is one too many, it was exactly the improvements which we put in place after the 2008 GAO operation that allowed us to recognize passport issuance irregularities before GAO acknowledged this recent operation," said Sprague.

The 2009 GAO recommendations led the State Department to implement more aggressive fraud prevention and detection training, increase  data-sharing, establish an acceptance facility oversight program, review and enhance its adjudication program from top to bottom, create an adjudication office at the national level, establish procedural integrity testing and training program, pilot new technologies, procure additional data sources and double the number of fraud prevention program managers.

The results of the 2009 GAO report were not surprising, however. GAO investigations in 2005 and 2007, identified ongoing vulnerability to fraud, said Senator Benjamin Cardin (D-Md.), chairman of the subcommittee.

"So what happened this time? Once again U.S. Postal and State Department employees failed to detect the use of fraudulent identity documents," said Cardin at the hearing. "We must do better--much better."

At the hearing, Cardin announced the introduction of the "Passport Identity Verification Act," which he said aims to give the State greater legal authority to "access information contained in federal, state and other databases that can be used to verify the identity of every passport applicant, and to detect passport fraud, without extending the time that the State Department takes to approve passports."

For more:
- read the GAO report GAO-10-922T (.pdf)
- read Cardin's prepared testimony (.pdf)
- read Sprague's prepared testimony (.pdf)
- watch a webcast of the hearing
- go to the THOMAS page of S. 3666, the Passport Identity Verification Act

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