Proponents of E-Verify, the Internet-based system to verify that a person is eligible to work in the United States, often tout its supposed speed and reliability. A recent Freedom of Information Act (FOIA) request from Cato has shed some light on how long it takes for the government to resolve contested tentative non-confirmations (TNC). The data should temper some enthusiasm for the system.
Our FOIA revealed that in 2012, the most recent year for which data are available, there were 68,775 contested TNCs through E-Verify. A TNC is an initial E-Verify determination that a worker is unlawful. Of those, 21,007 were handled by the Social Security Administration, with an average turnaround of 3.42 business days after the TNC was contested.
The Department of Homeland Security handled the other 47,768 contested TNCs, with an average turnaround of 6.01 business days. SSA deals with a lower volume of cases and deals with them in almost half the time that it takes DHS.
The information received as part of the FOIA included further breakdowns of resolution time:
Thanks to Denver lawyer Kevin Evans, who filed the Freedom of Information Act Request, we now know that several employees of the Securities and Exchange Commission (SEC) might have missed the financial crisis because their eyes were glued to their computer screens watching porn.
The chart below shows the number of incidents, as reported by the SEC’s Inspector General. What caught my eye was that the number of porn-viewing incidents shows a massive spike in 2008, when the financial crisis was at its worst.
It should, of course, be noted that the overall level of incidents was small in number, so we shouldn’t draw too many conclusions about the SEC overall. We should, however, be concerned at at least one of these employees was being paid $222,418 a year. I might be able to accept someone getting paid $20,000 a year spending their work time watching porn, but not $222,418. But then at least this employee has an excuse for missing the financial crisis; we are still waiting to hear the excuse for the SEC’s non-porn viewing employees (perhaps they were too busy on Facebook to keep an eye on Wall Street).
As an economist, I should probably be most agitated about the economic consequences of TARP, such as moral hazard and capital malinvestment. But when I read stories about how political insiders (both in government and on Wall Street) manipulate the system for personal advantage, I get even more upset.
Yes, TARP was economically misguided. But the bailout also was fundamentally corrupt, featuring special favors for the well-heeled. I don’t like it when lower-income people use the political system to take money from upper-income people, but it is downright nauseating and disgusting when upper-income people use the coercive power of government to steal money from lower-income people.
Now, to add insult to injury, we’re being fed an unsavory gruel of deception as the political class tries to cover its tracks. Here’s a story from Bloomberg about the Treasury Department’s refusal to obey the law and comply with a FOIA request. A Bloomberg reporter wanted to know about an insider deal to put taxpayers on the line to guarantee a bunch of Citigroup-held securities, but the government thinks that people don’t have a right to know how their money is being funneled to politically-powerful and well-connected insiders.
The late Bloomberg News reporter Mark Pittman asked the U.S. Treasury in January 2009 to identify $301 billion of securities owned by Citigroup Inc. that the government had agreed to guarantee. He made the request on the grounds that taxpayers ought to know how their money was being used. More than 20 months later, after saying at least five times that a response was imminent, Treasury officials responded with 560 pages of printed-out e-mails – none of which Pittman requested. They were so heavily redacted that most of what’s left are everyday messages such as “Did you just try to call me?” and “Monday will be a busy day!” None of the documents answers Pittman’s request for “records sufficient to show the names of the relevant securities” or the dates and terms of the guarantees.
Here’s another reprehensible example. The Treasury Department, for all intents and purposes, prevaricated when it recently claimed that the AIG bailout would cost “only” $5 billion. This has triggered some pushback from Capitol Hill GOPers, as reported by the New York Times, but it is highly unlikely that anyone will suffer any consequences for this deception. To paraphrase Glenn Reynolds, “laws, honesty, and integrity, like taxes, are for the little people.”
The United States Treasury concealed $40 billion in likely taxpayer losses on the bailout of the American International Group earlier this month, when it abandoned its usual method for valuing investments, according to a report by the special inspector general for the Troubled Asset Relief Program. …“The American people have a right for full and complete disclosure about their investment in A.I.G.,” Mr. Barofsky said, “and the U.S. government has an obligation, when they’re describing potential losses, to give complete information.” …“If a private company filed information with the government that was just as misleading and disingenuous as what Treasury has done here, you’d better believe there would be calls for an investigation from the S.E.C. and others,” said Representative Darrell Issa, the senior Republican on the House Committee on Oversight and Government Reform. He called the Treasury’s October report on A.I.G. “blatant manipulation.” Senator Charles E. Grassley of Iowa, the senior Republican on the Finance Committee, said he thought “administration officials are trying so hard to put a positive spin on program losses that they played fast and loose with the numbers.” He said it reminded him of “misleading” claims that General Motors had paid back its rescue loans with interest ahead of schedule.
P.S. Allow me to preempt some emails from people who will argue that TARP was a necessary evil. Even for those who think the financial system had to be recapitalized, there was no need to bail out specific companies. The government could have taken the approach used during the S&L bailout about 20 years ago, which was to shut down the insolvent institutions. Depositors were bailed out, often by using taxpayer money to bribe a solvent institution to take over the failed savings & loan, but management and shareholders were wiped out, thus preventing at least one form of moral hazard.
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