Contract killers: Selling out privatization at the INS.

When they aren't interviewing celebrities or inserting explosives underneath pick-up trucks, television news programs occasionally affect public policy. Last July, ABC News's 20/20 aired a segment called "Selling Out America," which focused on corrupt naturalization proceedings. "Would you believe that some private companies are helping immigrants cheat on the citizenship test?" asked Barbara Walters as she introduced the topic. By September, Congress had convened hearings on the matter. Rep. Mark Souder (R-Ind.) said "serious instances of testing fraud in the citizenship process" had become common. His main witness: a woman featured on 20/20. Throughout October, Republicans charged the Clinton administration with coercing the Immigration and Naturalization Service to produce record numbers of new citizens (read: likely Democratic voters) by tolerating the type of illegal behavior that 20/20 had exposed.

20/20 was onto something. The INS has invited an undue amount of fraudulence into the naturalization process. And although the mini-uproar over citizenship may have done some good, it has also sacrificed a surprising and innocent victim: privatization.

First, a little background. More immigrants are becoming citizens today than ever before. Roughly 1 million of them are expected to have naturalized by the end of 1996, up from an average of about 210,000 per year during the 1980s. Why the five-fold increase? Conventional wisdom says the country's newly harsh attitude toward immigrants has inspired most of the interest. Congress just passed a new welfare law that severely restricts non-citizens' access to public assistance. It also concluded an occasionally nasty debate on the utility of immigrants in general, featuring a number of prominent Republicans who painted even legal newcomers as shiftless ne'er-do-wells. Two years earlier, California voters approved Proposition 187, a ballot initiative designed to deny a series of public services to illegal aliens (implementation of which has since been blocked by the courts). To escape persecution, say the pundits, immigrants are seeking sanctuary in citizenship. They fear that the political sentiments driving Prop. 187 may snowball into attacks on legal permanent residents.

There is a fair amount of truth to this interpretation. Frightened by recent laws and ballot initiatives, many immigrants have no doubt sought citizenship when they might not otherwise have done so.

But there is more to the story. Applications for citizenship started rising in 1992, before immigrants became anybody's favorite scapegoat. In fact, the INS minted more citizens in 1993 than in any previous year, breaking a record set in 1944. Applications climbed slightly higher still in 1994, and many of them were made long before the Prop. 187 campaign became general knowledge in California, let alone around the country. In other words, the rush to citizenship started before the GOP-controlled Congress said its first word about immigrants.

The boom in naturalization includes three important sources that have nothing to do with recent anti-immigrant sentiments. First, the pool of eligible citizenship applicants has increased. Between 1981 and 1987, as the Center for Immigration Studies has pointed out, the United States admitted about 581,000 immigrants per year. Over the next seven years, however, admissions jumped by 47 percent to 853,000 per year (this figure includes both legal immigrants and illegal immigrants granted amnesty under the 1986 Immigration Reform and Control Act). The calculation is simple: More legal aliens equals more potential citizens. Second, two years ago the INS ordered permanent legal residents holding green cards issued before 1979 to have them renewed - for a fee of $75. Applying for citizenship, on the other hand, costs only $95. So thousands of non-citizens decided to lay out the extra money and seize the opportunity to naturalize. Finally, the Mexican government may revise its constitution to allow Mexican nationals who become citizens of other countries to retain certain property rights that they currently forfeit. Although this change has not yet occurred, mere talk of it encourages Mexican immigrants - who have very low naturalization rates - to apply for citizenship, with the hope that during the wait to become an American citizen, Mexico's policy will change.

Whatever the ultimate cause of the rise in citizenship applications, the sheer volume quickly created a dilemma for the INS. How should it deal with so many applicants at once? Naturalization, after all, is a complicated process that makes many demands upon the agency conferring it. The INS must conduct an FBI criminal background check of every naturalization applicant to guarantee that they have not been convicted of a felony. During a one-on-one interview, an INS agent must ensure that would-be citizens can speak, read, and write in simple English. Agents must also give a test in which the immigrants demonstrate a basic understanding of U.S. history and government. There are other requirements, too. Added together, it takes about 15 minutes to interview each citizenship candidate and either accept or reject the petition. When hundreds of thousands of people are waiting in line, those minutes add up.

If a private business were confronted with this problem, it might choose to out-source the work - in other words, pay someone else to do it. The public sector does not often think in these terms, so when it does it should receive praise. And, in fact, this is what the INS smartly did. Recognizing that the test on U.S. history and government took up a chunk of agents' interview time, it searched for ways to cut down on this commitment. It decided to contract with six private companies to offer the naturalization testing. Immigrants can still take the test in an INS office, but they do not have to. Those who pass one of these out-sourced tests are granted waivers exempting them from taking the exam with an agent. Agents, in turn, are able to conduct more interviews over the course of a day. Although the INS does not keep numbers, informal estimates from INS officials indicate as many as 20 percent of all citizenship applicants now use these waivers.

When done correctly, the contract testing works like an SAT exam. A bunch of very serious, very anxious people come together for the test, which is mercilessly administered by frowning proctors who check identification at the door, read the directions no more than twice, and insist that everybody keep quiet. The test takers leave without knowing for certain how well they have done. Weeks later, their scores arrive in the mail.

Many immigrants are eager to take these tests, which they pay for themselves (prices vary widely, from $25 to more than $100). They are often provided as part of a package deal that includes professional advice on how to fill out maddeningly complex citizenship applications, a set of fingerprints, and a pair of photographs (both required for the application).

Perhaps more important, if immigrants fail one of these exams, they can try again and hope for a better performance next time. Failure in an INS office, on the other hand, usually results in long delays or a complete rejection. Many immigrants also say that they prefer to get the test out of the way before they arrive for their formal interview because visiting an INS office is a nerve-wracking experience not conducive to passing an exam. Suffice it to say that INS bureaucrats do not have a stellar reputation among the foreign-born.

Unfortunately, this privatized testing is full of corruption (though INS testing is not without its problems). When The New York Times in 1994 called the INS "broadly dysfunctional" and "perhaps the most troubled major agency in the federal government," it wasn't joking. The six companies that have contracted with the INS to conduct the tests parcel out the actual job of giving the citizenship exams to hundreds of subcontractors around the country, who send the completed tests into their parent company for grading. Many of these subcontractors are the adult education branches of public schools. Nonprofit organizations are also active participants, as are individual for-profit entrepreneurs. The vast majority are honest providers.

But many are not. The problem is that the INS has done virtually nothing to oversee the practices of the contractors or subcontractors. In other words, it has no quality-control mechanism to prevent the buying and selling of answers. This has invited plenty of hucksters into the INS's privatization program. It is impossible to know the precise extent of the problem, except to note that almost everybody close to the process is suspicious of it. Many of the INS agents detailed to naturalization say they do not trust the waivers awarded by the private companies because they have seen people who do not speak a word of English walk into their offices carrying them. 20/20's investigation of a Dallas-based subcontractor showed, via hidden camera, how an exam proctor would walk around a room of test takers and correct their mistakes. "This threatens my livelihood," said Greg Gourley, a Seattle-based entrepreneur who offers a variety of naturalization-related services. "The system is wide open to payoffs. Somebody has to clean up what's going on."

So what lesson did 20/20 draw from this evidence? Answer: Privatization is bad. "Some people [are] making a mockery of the whole citizenship process," said correspondent Brian Ross, "particularly since the federal government a few years ago quietly permitted key parts of the testing process, once conducted exclusively by federal inspectors, to also be run by outside groups, including for-profit businesses." What could be worse? Not much, according to Ross, who wasted little time before returning to his theme of public-sector virtue versus private-sector corruption. Contract testing is "a booming multimillion dollar business," he said, "plagued by blatant cheating and fraud...by people making money giving the test."

To be sure, Ross got all the details right. In fact, his investigation should win an award for fine reporting. Unfortunately, 20/20 got the big picture wrong. The problem isn't that some people are earning a living by conducting citizenship tests for the INS - a category, which, after all, includes INS agents along with private testers. Rather, it's that the INS has not followed through on its privatization efforts.

It has made virtually no effort to ensure that the private companies providing the tests (and their subcontractors) are not also selling answers. Without such reasonable guarantees, contract testing cannot work. Some INS agents in places like Arlington, Virginia, and Spokane, Washington, have even started rejecting waivers entirely and making applicants take the in-house test instead, a de facto reversal of the INS's privatization efforts. In November, the INS actually terminated its relationship with one of its six contractors, the Florida-based Naturalization Assistance Service. This action grew out of 20/20's expose. There are currently no signs that the INS will eliminate the entire privatization program, but the other five main providers are wary.

There are, however, a few simple steps the INS could take to salvage a program that, for the most part, makes the difficult citizenship process run more smoothly and efficiently, for agents and applicants alike. For starters, the INS could monitor the testing. "Auditors, random site inspections, even undercover operations - these are the most obvious ways to improve performance," says William D. Eggers, director of the Reason Foundation's Privatization Center.

Other, less costly steps might also work. Subcontractors could submit themselves to the same FBI background check that naturalization applicants must pass. This would weed out people who have been convicted of felonies. The INS could insist that all testing times and sites be publicly announced several weeks in advance. This would shine light onto a business that often goes on behind closed doors. Finally, INS agents across the country could be instructed to look carefully at the names of subcontractors appearing on the exam waivers. Department stores routinely post lists of people who write bad checks next to their cash registers. Perhaps agents could be told to pay more attention to who is granting waivers, and to become familiar with which ones seem to have a solid record of producing well-prepared citizenship candidates, and which do not.

Without such measures, the INS will have no choice but to pull the plug on privatization. It might wind up doing what 20/20 did - blaming the profit motive as the reason its privatization experiment did not work. The real reason would be because the agency could not get its act together. But in the meantime, an innovative idea that has helped thousands become American citizens and the INS to become more efficient will suffer.

John J. Miller ([e-mail]) is vice president of the Center for Equal Opportunity.