Corporate Scandal Threatens National Security

There is a scandal unfolding in corporate America that President Bush needs to stop, given that fixing Social Security is his top domestic goal and securing the nation against terrorism is his greatest duty.

The scandal is happening precisely where Social Security and national security intersect.

The question it raises: Is the administration tolerating an increased risk of terrorism because it doesn’t want to stop big businesses from hiring illegal aliens?

Key facts of this scandal were revealed in an October report from the Inspector General of the Social Security Administration (SSA). The report examines the records of the 100 companies that filed the most W-2 reports from 1997-2001 on which the names and/or Social Security Numbers did not match SSA records and that SSA–even after some investigation–could not credit to a known taxpayer.

SSA consigns these orphaned W-2s to what it calls the Earnings Suspense File (ESF). The “Top 100″ worst filers of W-2s that ended up in the ESF, the inspector general discovered, collectively filed more than 2.7 million of these bad W-2s over the five years studied, reporting about $9.6 billion in wages that could not be matched to a worker.

The report does not name these “Top 100″ companies. But it provides some details about them. For, example:

  • The No. 1 corporate filer of orphaned W-2s is based in Illinois. From 1997-2001, it filed 131,991 of these W-2s, reporting $524,933,538 in wages that the government could not credit to a known taxpayer.
  • A Texas company was No. 2. It filed 108,302 orphaned W-2s over five years, reporting $532,964,026 in wages paid to unknown workers.
  • The problem got worse. “Our review of the Top 100 employer data also found that the average increase in suspended wage items between TYs 1997 and 2001 was approximately 69%,” said the report.

Now, this is an obvious scandal for Social Security. Workers with higher reported wages get bigger benefit checks in retirement. But as long as the $9.6 billion in wages reported by the “Top 100″ companies on bad W-2s remains unmatched to any taxpayer, the taxpayers who earned those wages and paid taxes on them may be denied their full Social Security benefits.

These workers–provided they were legally entitled to work in the U.S.–are getting ripped off.

Even if national security were not involved, that alone should cause President Bush to act.

But testifying before the Senate Intelligence Committee in February, Deputy Homeland Security Secretary James Loy said al Qaeda leaders have considered infiltrating terrorists across the Mexican border because they “believe illegal entry is more advantageous than legal entry for operational security reasons.”

Citing “the threat from criminal groups and persons who engage in criminal enterprise that supports or contributes to terrorism,” Loy listed as examples “people smuggling †¦ document forgery, and false identity provision.”

Illegal aliens sneaking into the U.S. to commit terrorism need the same criminal services as illegal aliens sneaking into the U.S. to work. Mass illegal immigration–and corporations that encourage it by hiring masses of illegal aliens–have created an inland sea of lawlessness in which terrorist sharks can readily swim.

In fact, on June 25, 2002, following an SSA examination of the identities used by the September 11, 2001, hijackers, then-SSA Inspector General James G. Huse, Jr. told the House Subcommittee on Crime that the hijackers used, among others, five counterfeit SSNs and one belonging to a child.

“Because a terrorist, to be effective, must first be assimilated into American society, and because an SSN is a critical tool in the assimilation, it became apparent that the acquisition of an SSN was indispensable,” said Huse.

On Sept. 19, 2002, Huse told the House Immigration Subcommittee: “Protecting the integrity of that identifier [the Social Security Number] is as important to our homeland security as any border patrol or airport screening.”

Before September 11, we had little warning. Now we’ve had plenty.

To make terrorist sharks easier to spot and capture, the government must drain their habitat–and it can start by pulling the plug on a policy that looks the other way when businesses hire illegal aliens.

Huse told the Immigration Subcommittee: “Our reviews of the suspended wages in the ESF suggest that illegal work is the primary cause of suspended wages.”

If illegal work is the “primary cause” W-2s end up in the ESF, isn’t it reasonable to suspect that companies filing large numbers of these W-2s may be hiring large numbers of illegal workers?

House Judiciary Chairman James Sensenbrenner told me last month the Department of Homeland Security should investigate these companies to find out if that is the case.

Make it happen, Mr. President.

Top 100 Filers of Bad W-2s
Rank
State
Bad W-2s Filed by Employer
Wages Reported on Bad W-2s
1
Ill.
131,991
$524,933,538
2
Texas
108,302
$532,964,026
3
Fla.
106,073
$249,952,871
4
N.Y.
86,243
$467,508,085
5
Calif.
76,857
$358,907,957
6
Calif.
66,103
$130,438,417
7
Mich.
56,705
$176,089,925
8
Ky.
50,455
$226,043,907
9
Calif.
50,027
$178,083,256
10
S.C.
49,158
$220,172,981
11
Ga.
45,749
$151,314,908
12
Okla.
43,375
$117,983,189
13
Calif.
39,171
$80,219,973
14
N.J.
37,302
$50,626,511
15
Calif.
36,458
$178,514,463
16
N.M.
36,455
$147,551,907
17
Minn.
36,438
$134,093,065
18
Ky.
36,002
$67,310,457
19
Calif.
34,521
$74,307,690
20
Calif.
33,016
$50,000,341
21
Texas
32,808
$156,643,844
22
Ill.
32,264
$85,954,651
23
Texas
32,189
$165,256,150
24
Calif.
31,171
$54,497,262
25
Ohio
30,592
$127,561,745
26
Ohio
28,317
$108,638,471
27
Texas
27,691
$128,225,077
28
N.J.
27,477
$32,499,346
29
Calif.
27,283
$27,833,987
30
Ill.
27,229
$42,931,023
31
Calif.
27,018
$38,311,364
32
Ill.
26,765
$46,234,639
33
Texas
25,327
$59,367,779
34
Tenn.
25,300
$106,005,077
35
Minn.
25,292
$134,128,618
36
La.
25,175
$92,689,698
37
Utah
24,827
$67,498,582
38
Ark.
24,780
$92,649,911
39
Mich.
24,734
$110,868,849
40
Texas
24,363
$69,517,833
41
Fla.
24,071
$71,614,446
42
Minn.
22,105
$94,243,226
43
Texas
22,039
$33,503,735
44
Ill.
22,016
$51,471,182
45
Kan.
21,843
$113,278,658
46
Calif.
21,840
$56,996,483
47
Fla.
21,565
$58,506,183
48
Calif.
21,434
$86,028,370
49
Wis.
21,338
$76,072,109
50
Calif.
21,131
$29,708,493
51
Calif.
20,942
$30,295,464
52
Ga.
20,793
$113,532,115
53
Ill.
20,743
$43,087,003
54
Calif.
20,538
$104,880,153
55
Texas
20,074
$33,209,528
56
S.C.
19,573
$65,283,165
57
Calif.
19,230
$53,804,244
58
Calif.
19,193
$95,525,517
59
Neb.
18,852
$197,524,222
60
Iowa
18,311
$112,317,486
61
Texas
18,231
$88,328,269
62
Ore.
18,228
$68,088,754
63
Ill.
17,619
$106,111,838
64
Wash.
17,560
$30,271,870
65
Ga.
17,483
$87,697,567
66
Ohio
17,208
$31,554,686
67
Texas
17,173
$88,591,505
68
Calif.
17,084
$37,128,171
69
Calif.
17,075
$70,441,404
70
Calif.
16,627
$46,958,992
71
Texas
16,378
$178,348,327
72
N.Y.
16,358
$69,413,980
73
Ill.
16,036
$28,469,976
74
Ariz.
15,983
$26,651,514
75
Tenn.
15,982
$70,641,087
76
Texas
15,368
$43,302,291
77
Colo.
15,162
$65,223,596
78
N.C.
14,838
$51,128,279
79
Ill.
14,837
$45,186,039
80
Ohio
14,663
$56,211,919
81
Texas
14,427
$32,085,397
82
Wash.
14,091
$62,417,898
83
Ill.
14,084
$42,230,961
84
Ky.
13,995
$66,956,795
85
Fla.
13,885
$40,574,714
86
Ariz.
13,884
$20,808,702
87
Ill.
13,783
$39,330,630
88
Texas
13,557
$47,308,192
89
Calif.
13,300
$14,288,211
90
Kan.
13,287
$47,981,007
91
Ill.
13,276
$27,571,231
92
Calif.
13,247
$61,045,644
93
Texas
13,240
$36,501,214
94
Wis.
13,237
$41,946,282
95
N.J.
13,214
$86,788,484
96
Calif.
13,184
$91,567,382
97
Ill.
13,137
$21,518,488
98
Calif.
13,063
$29,606,997
99
Calif.
12,993
$13,135,799
100
Ill.
12,951
$72,301,907
Totals
2,728,362
$9,570,929,156

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