WASHINGTON—Two federal agencies are refusing to turn over a mountain of evidence that investigators could use to indict the nation's burgeoning workforce of illegal immigrants and the firms that employ them.
Last week, immigration cops trumpeted the arrests of nearly 1,200 illegal workers in a massive sting on a single company, but they admit that they relied on old-fashioned confidential informants and an unsolicited tip to get their investigation going.
It didn't have to be that hard.
The IRS and the Social Security Administration routinely collect strong evidence of potential workplace crimes, including names and addresses of millions of people who are using bogus Social Security numbers, their wage records and the identities of the bosses who knowingly hire them.
But they keep those facts secret.
"If the government bothered to look, it could find abundant evidence of illegal aliens gaming our system and the unscrupulous employers who are aiding and abetting them," said Rep. J.D. Hayworth, R-Ariz.
The two agencies don't analyze their data to root out likely immigration fraud—and they won't share their millions of records so that law enforcement agencies can do that, either.
Privacy laws, they say, prohibit them from sharing their files with anyone, except in rare criminal investigations.
But the agencies don't even use the power they have.
The IRS doesn't fine even the most egregious employers who repeatedly submit inaccurate data about their workers. Social Security does virtually nothing to alert citizens whose Social Security numbers are being used by others.
Evidence abounds within their files, according to an analysis by Knight Ridder Newspapers and The Charlotte Observer.
One internal study found that a restaurant company had submitted 4,100 duplicate Social Security numbers for workers. Other firms submit inaccurate names or numbers reports for nearly all of their employees. One child's Social Security number was used 742 times by workers in 42 states.
"That's the kind of evidence we want," says Paul Charlton, the U.S. attorney in Arizona. He regularly prosecutes unauthorized workers, but says it's hard to prove employers are involved in the crime.
"Anything that suggests they had knowledge . . . is a good starting point. If you see the same Social Security number a thousand times, it's kind of hard for them to argue they didn't know."
The potential crimes are so obvious that the failure to provide such information to investigators raises questions about Washington's determination to end the widespread hiring of illegal immigrants at cut-rate pay.
For years, the illicit workforce has ballooned.
An estimated 7 million unauthorized workers are gainfully employed in the United States. They're picking crops, building homes and tending yards in a shadow economy at work every day. In some cases, they work for the government on public projects that pay them with taxpayer money. They've built roads in North Carolina, military housing in California and even helped reconstruct the Pentagon after the Sept. 11 attacks, until law enforcement got word.
They also work at airports, seaports, nuclear plants and other sites vulnerable to U.S. security.
Those are the sites where immigration officials have focused their attention. But on Thursday, they announced a new push toward busting bosses who hire unauthorized workers.
Homeland Security Secretary Michael Chertoff has asked Congress for access to the secret earnings files, a tool he says would help "get control of this illegal workforce."
In last week's bust at IFCO Systems North America Inc., a Houston-based maker of wooden pallets, more than half the workers were using invalid or stolen Social Security numbers.
"We need to be able to ... spot that kind of widespread abuse and not really just have to wait for tips," Chertoff said.
The IRS wants to protect the privacy of its records because disclosing them might cause companies and employees to stop reporting income and paying taxes—and go underground where exploitation is more certain.
"At least now," IRS commissioner Mark Everson told Congress in February, "we are collecting some taxes in these areas, and we are working to collect even more."
The records at issue are the earnings reports, sent by employers along with money withheld for taxes and Social Security.
They contain workers' names and Social Security numbers, and when they don't match Social Security records, the information is set aside in what's called the Earnings Suspense File.
Created in 1937, the file contains about 255 million unmatched wage reports representing $520 billion paid to workers but not credited to their Social Security earnings records.
Typos and name changes can cause wage reports not to match Social Security records. But increasingly, officials cite unauthorized workers using bogus Social Security numbers as a driving force behind the mismatch files.
The incorrect worker files mushroomed during the 1990s, as migrants poured into the United States. Almost half of the inaccurate reports come from such industries as agriculture, construction and restaurants, which rely on unauthorized labor.
"We believe the chief cause of (unmatched) wage items . . . is unauthorized work by non-citizens," Social Security's Inspector General Patrick O'Carroll told Congress in February.
The IRS also receives the mismatch information. It tries to match workers involved to its records, then probes to see whether the workers are paying taxes.
Particularly disturbing is that possibly millions of the Social Security numbers belong to other people.
In Utah, after Social Security provided data for one criminal probe, investigators discovered that Social Security numbers of 2,000 children were being used by other people.
"What do you think we'd find if we had the ability to analyze all of their information?" said Kirk Torgensen, Utah's chief deputy attorney general. "It would be invaluable. How short-sighted is it that the government doesn't follow this trail?"
Getting a job is easy for illegal immigrants.
One Honduran man, who crossed the U.S. border in Texas and settled in Charlotte, N.C., paid $50 for a Social Security card, but the construction company that hired him never asked to see it.
He's grateful. The job has allowed him to buy a home, a computer for his two boys and an aquarium filled with goldfish for the living room.
He's worked for the company for four years and now earns in a day what he made in a week back in Central America.
"I'm happy here," said the man, 37, who asked not to be named for fear he'd get fired and deported. "Over there, we don't have anything. You can't even afford to go to McDonald's."
Many of his fellow workers are illegal, he said. He thinks the company knows.
To work lawfully in the United States, individuals must have valid Social Security numbers or authorization from the Department of Homeland Security.
But the law doesn't require companies to verify that workers give them names and numbers that match Social Security records.
So most companies don't check.
That loophole, created by Congress in 1986, makes it hard to prove whether employers know they're hiring illegal workers.
Internal federal studies suggest that errors are so frequent that some companies must be aware of the illegal status of their employees.
_About 8,900 of the nation's 6 million employers accounted for 30 percent of inaccurate reports.
_Ten states account for 48 percent of the U.S. workforce, but have 72 percent of the unmatched earnings reports.
_Some companies repeatedly have reporting problems, including 40 that made the worst 100 list repeatedly over a span of eight years. One company submitted 33,000 errant earnings reports in a single year.
Some of the country's most successful prosecutions have come with help from Social Security, which will open specific files once a criminal investigation is under way.
The records played an important role in last week's nationwide sting at IFCO, but investigators didn't learn about the company's immigrant workforce until a year after Social Security began sending notices asking the company and employees about the errors.
"The only reason we got onto this case was because of a lucky tip," said Immigration and Customs Enforcement spokesman Dean Boyd. "We could have launched this case a year earlier. It sure would make our jobs easier and save the taxpayers a lot of money if we had access to their information."
Most immigrants simply use Social Security numbers to get work, experts say.
They make up numbers, buy them on forged cards, or steal them.
But their demand has fueled a massive industry of suppliers who make fraudulent documents or steal real ones.
Federal officials downplay the risks that people face when others use their numbers for work. Safeguards are in place to protect retirement and disability benefits, they say.
Lenders, too, say most won't lend money if an applicant's Social Security number doesn't match the name on record.
But sometimes those safeguards fail.
Prosecutors and consumer groups say they see plenty of fraud committed with stolen Social Security numbers.
In Utah, prosecutors charged dozens of immigrants who got lured into a fraud ring to buy homes. The immigrants managed to obtain 87 home loans using Social Security numbers they'd obtained.
"The whole world revolves around the Social Security number. You need it to get employment, a driver's license, credit. . . . The more demand there is for stolen numbers, the odds are they're going to hit your number," said Torgensen, Utah's deputy attorney general.
Jay Foley warned that obtaining someone's number can also be the first step toward total identity theft. He started the Identity Theft Resource Center in San Diego after his wife became a victim.
"Someone can open credit in your name. You can be hounded by collection agencies," he said. "I've seen people lose their homes and their marriages over this."
(Charlotte Observer correspondents Tim Funk, Stella Hopkins and Danica Coto contributed to this report.)
(c) 2006, Knight Ridder/Tribune Information Services.
PHOTOS (from KRT Photo Service, 202-383-6099): IMMIGRATION-ENFORCE
GRAPHIC (from KRT Graphics, 202-383-6064): 20060421 IMMIGRATION
Need to map