Immigration Agency Mired In Inefficiency

Citizenship and Immigration's troubles stem from the nation's 1986 amnesty. Acting on the principle that citizenship is a benefit that immigrants, not taxpayers, should pay for, Congress required immigrants to cover the cost of citizenship examinations, then about a tenth of INS's budget.

But what started as a reform became an addiction. Hooked on fees, Congress allowed the growth of a Turkish bazaar of levies, through which immigrants now pay for 90 percent of the agency's budget. They subsidize even non-paying applicants such as refugees, asylum seekers and U.S. military members.

As workloads grew, fees, last revised in 1998, did not keep up. Without money to invest in technology and management improvements, the agency continued to rely on a paper-based filing system from the pre-computer age. That carried $100 million a year in costs for archiving, retrieval, storage and shipping, as well as lost paperwork and delays. The 2001 attacks prompted costly new mandates for background checks, security upgrades at more than 100 offices and subsidies to strapped enforcement operations and the new Homeland Security Department.

By 2004, Citizenship and Immigration was "looking at maybe $500 million or more in the hole," said William Yates, then head of domestic operations.

As backlogs and deficits grew, the agency ratcheted up charges to cover its budget. The longer applicants waited, the more they paid.

"We were really operating a Ponzi scheme," said Yates, who retired last year after 31 years at the agency. "The money that current applicants were paying, we were using to adjudicate older cases.

For example, Citizenship and Immigration set up a Chicago office strictly to accept signed applications and checks, even though most applications are not approved. Officials said they created the system because the Treasury Department offered to set it up at no cost, and the agency doesn't like to process applications before being paid to do so.

In 2005, it raised $230 million by charging green-card applicants for about 1 million temporary work and travel permits they needed while waiting for their cases to be processed. About 325,000 interim permits went to people whose applications were later denied, creating a security risk, Khatri said.

The agency raised another $139 million by charging a separate "premium processing" fee of $1,000 -- three times the normal fee -- that is now used by a majority of applicants to speed up the process.

"If you're a good-government agency, why are you trying to cheat or fool the public into thinking they have to go into first class?" Khatri asked.

Yates said he proposed the premium charge in 1999 to pay for modernization efforts, but the money was tapped after the 2001 attacks for operations.

Under a proposal issued Jan. 31 and to be made final as early as this week, Citizenship and Immigration seeks to boost fees by more than 50 percent on average and to dedicate $139 million in premium fees to modernization. The cost of applying for legal permanent residency, for example, would nearly triple, from $325 to $905.

The plan has drawn 39,000 comments, including criticism from a wide range of interests. Critics say it proposes punishingly big fee increases on immigrants and their employers but promises just a 20 percent improvement in services.

Khatri's proposal to slash green-card waiting times was to assign staffers to weed out ineligible applicants and to ensure that others' forms are complete at the time of filing, cutting down caseloads and processing delays. However, officials determined that while "up-front" processing improved customer service at small offices, it would cost more and worsen service in busy offices because managers cannot anticipate how many people will show up, nor predict political or other circumstances that drive surges in applications.

Agency spokesman Chris Bentley declined to comment specifically on proposals pending before Congress and cited Yates as an authority on Khatri's past reports.

Business transformation is "not something that can be done overnight," he added. "We're building an immigration system to last 30 years."

The Senate proposal would allow Congress to appropriate money in advance to Citizenship and Immigration. The funds would be repaid by legalization fines and fees, and would not be counted toward the federal deficit.

Yates said the clock is ticking. "If they do not start to modernize, they're going to be at a really severe disadvantage when the impact of this comes in," he said. "It means they should have already started."