In government, too: you'll find illegal aliens in the darndest places.(Cover story)

NEARLY everyone professes to agree that the government should crack down on employers who hire illegal aliens. But it appears that the government needs, first, to crack down on itself. That's the story told in a footnote of an audit report quietly released a year ago by the inspector general of a federal agency that seemingly has nothing to do with immigration.

It indicates that the Bush administration itself has employed aliens not authorized to work in the United States. Year after year, first the Justice Department and then the Department of Homeland Security were given information that would have allowed them to pinpoint exactly who these unauthorized alien workers were and which federal agencies employed them. Yet, by the end of the period covered by the audit report (which ran through tax year 2003), the problem remained unsolved. (The inspector general has not yet analyzed the relevant data for tax years after 2003.)

Which agencies employed these aliens? The government won't say. Citing a provision in the tax code, the inspector general's office says it is prohibited from publicly identifying them, and so, for now, they stay "in the shadows."

The audit report is innocuously titled "Employers with the Most Wage Items in the Nonwork Alien File." It was published in June 2006 by the inspector general of the Social Security Administration (SSA), and is publicly available on SSA's website. The audit was designed to discover the 100 employers that had filed the largest number of W-2 forms in tax years 2001 through 2003 for employees who were using what SSA calls "nonwork" Social Security Numbers (SSNs). These are SSNs that SSA gives to aliens who are not entitled to work in the U.S. but who claim to need an SSN anyway.

Prior to 1996, SSA handed these numbers out like candy. According to a 1999 inspector general's report, an alien who had no right to work in the U.S. could nonetheless get an SSN "for a variety of reasons including tax, banking, school, insurance, driver's license, and government benefit purposes." After reforms made in 1996, an alien could still get a "nonwork" SSN in order to secure a driver's license or claim a government benefit to which he was entitled even though he was not entitled to work in the U.S. In 2003, SSA stopped giving out nonwork SSNs for driver's licenses.

But the damage was done. By 1998, there were already more than 7 million "nonwork" SSNs in circulation--a number exceeding the combined populations of Rhode Island, New Mexico, Wyoming, Montana, North Dakota, South Dakota, and Delaware. Not surprisingly, many aliens used these "nonwork" SSNs to work illegally in the U.S.

To deal with this problem, the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 mandated that SSA create a list every year called the NWALIEN file. This list includes the names and addresses of every worker and every employer associated with a W-2 bearing a nonwork SSN. The law mandated that SSA provide this list annually to the Justice Department, which contained the Immigration and Naturalization Service (INS). In 2003, when the Department of Homeland Security (DHS) took over the functions of INS, SSA started sending the list to DHS.