U.S. immigration agency will lose millions because it can't process visas fast enough

Lost amid the uproar over the Trump administration's crackdown on undocumented immigrants is a change coming to the legal immigration system that's expected to be costly for both U.S. companies and the government itself.

Each year at about this time, U.S. Citizenship and Immigration Services receives a tidal wave of applications for H-1B visas, the ones for college-educated workers. For-profit companies usually have a five-day window in April to send in applications for new visas just as existing visa holders begin renewing theirs.

The new wrinkle is that earlier this week USCIS suspended so-called "premium processing," a program that allowed employers to pay extra to reduce visa wait times from as long as eight months to just two weeks.

Officials have depicted the temporary stoppage as the upshot of a "significant surge" in demand for expedited service, but, in reality, it appears to reflect the agency's own mismanagement and waste.

According to USCIS records, congressional testimony and interviews with former agency officials, USCIS has plunged most of the expedited program's revenues from the last eight years -- some $2.3 billion -- into a failed effort to digitize the larger immigration system, leaving inadequate resources to staff the H-1B portion that was its cash cow.

"I can't believe that my old agency could be that stupid and reckless," said William Yates, a former senior USCIS official who helped create the fast-track program. "It infuriates me."

USCIS has occasionally suspended premium processing before, but the timing of this suspension, which is expected to last up to six months, is especially damaging. Some 236,000 H-1B applications poured in in April 2016.

Pausing expedited service is likely to cause delays for tens of thousands of applicants for new visas, mainly workers at universities or research organizations, as well as foreign doctors who receive H-1Bs in exchange for working in areas that are medically underserved, according to USCIS data.

It'll also cost USCIS up to $100 million in lost fees, agency spokeswoman Carolyn Gwathmey acknowledged.

Gwathmey said the loss would be cushioned by a $700 million reserve fund created by a surplus of premium processing fees and "would not negatively impact" the agency's ability to keep paying for the digitization initiative, which is $1 billion over budget and five years behind schedule.

But the interruption has fueled concerns about the Trump administration's intentions for the H-1B program overall and the fate of the digital push that expedited H-1Bs have funded.

Many H-1Bs are gobbled up by outsourcing companies, and President Trump promised during his campaign to make sure visa holders weren't displacing Americans for jobs. In January, a draft executive order aimed at cracking down on work visas leaked and, while it hasn't been signed, Politico reported it may be soon. In recent days, the Justice Department and USCIS have announced initiatives to look into H-1B fraud and abuse, and USCIS has said that some entry-level computer programmers may no longer be eligible for H-1Bs.

The suspension of premium processing won't affect the number of H-1B visas issued, even to outsourcing firms, but critics worry that lost revenue from the program will extend the agency's digitization delays and, thus, perpetuate the backlogs that led to the stoppage in the first place.

So far, the effort to modernize has been plagued by glitches and lapses in security -- between 2014 and 2016, for example, faulty programming resulted in the agency sending out thousands of green cards with inaccurate information on them and then failing to recall them. Some see little hope of fixing such flaws if funds from premium processing stop flowing.

"Any CEO who would propose to cut the source of all your revenue -- while at the same time still paying to fix your product -- would be fired," said Greg Siskind, a longtime immigration lawyer.

When it was unveiled in 2000, premium processing appeared to be a clever solution for both USCIS and its frustrated users.

At the time, the wait for H-1B visas was about two to three months, and the agency was processing about 195,000 a year, at a cost to applicants of about $2,130 a pop.

The snail's pace was due in part to sheer volume and that the lengthy applications, which run to 60 pages on average, were processed entirely on paper. Applicants printed them out and submitted them in duplicate, with the original going to USCIS and a copy going to the State Department. Each application had to be checked against criminal, and customs and border protection records.

The premium service was pitched as a boon to businesses -- particularly tech companies -- more than willing to pay fees of $1,000 or more to cut the turnaround time from months to weeks.

Today, regular processing costs applicants from $1,600 to about $5,000 per visa; premium processing costs another $1,225 on top of that.

The expedited option has become more popular as the timeframe for regular processing has grown longer. It jumped from 41 days in fiscal year 2014 to eight months this year, USCIS data shows. Last year, 59 percent of H-1B applicants paid for premium processing, up from 36 percent two years ago. Premium processing revenue more than tripled in the last decade, reaching $488 million in 2016.

The revenue from the premium program was supposed to cover the costs of providing the service and to supply funds for a much-needed effort to modernize USCIS' infrastructure.

In 2005, USCIS launched the initiative, known internally as "Transformation," whose main focus -- and expense -- has been mounting the Electronic Immigration System, or ELIS, an acronym that plays off the country's longtime immigration gateway, Ellis Island.

ELIS was budgeted to cost no more than $2.1 billion and scheduled to be complete in June 2014.

Agency officials said it would handle all types of immigration petitions -- from work visas to green cards to asylum requests to applications for citizenship. Applicants would be able to submit forms and supporting documents digitally; immigration officers would be able to process their petitions online. Petitions would be adjudicated more efficiently and officials would be able to identify security risks, fraud and criminal activity more effectively.

But ELIS mostly doesn't work.

Designed to process all 90 kinds of immigration petitions digitally, today it can manage just two. Visa applications are still submitted on paper, after which USCIS contractors place them in old-fashioned files and manually transcribe applicants' biographical information into the same computer system used since at least 2003. The Department of Labor has digitally processed a form included in H-1B applications for almost 15 years, yet the same form has to be printed out and mailed to USCIS. To get an email from USCIS confirming receipt of an application, you have to send a paper "Request for e-notification" form.

Lawmakers have called USCIS' digitization initiative a "complete and utter waste of money" and "a poster child for IT mismanagement."

"To call it a transformation is insulting to intelligence," said Houman Afshar, an immigration attorney who represents corporate clients.

With much of its premium-processing windfall going into "Transformation," since 2008, USCIS has chosen to use the proceeds from its regular visa processing program to try to cover the extra personnel and other costs related to the expedited service.

Unsurprisingly, the agency wasn't able to keep up, resulting in what William Stock, the president of the American Immigration Lawyers Association, described as the premium processing "death spiral."

Yates said the current logjam could have easily been avoided. "I would classify it as malfeasance if they took that money and then did not hire sufficient numbers of officers," he said.

USCIS said that since last year, it had begun using premium processing revenue to pay the salaries of immigration officers tasked with adjudicating the growing pile of expedited H-1B petitions.

The agency also said it was considering hiring more immigration officers and that the suspension would help the agency reduce processing times for all applicants whether or not they paid for premium service.

Chad Graham, a lawyer who represents companies seeking H-1B visas on behalf of foreign workers, expects the suspension of premium processing to have an array of effects. Foreign workers renewing H-1Bs may not be able to travel internationally for months while their applications are pending, even if their jobs require it; in many states, they won't be able to renew driver's licenses either.

Because of a rush to file as many H-1B renewals as possible before expedited service was suspended, USCIS said it hasn't been able to keep up with its manual data entry.

With its funding source on pause, ELIS remains thirsty for resources. There's been a steady drumbeat of reports from the Department of Homeland Security's Office of the Inspector General saying the system's flaws have resulted in worrisome mishaps.

In a single month in 2013, USCIS sent out almost 2,500 green cards erroneously marked as valid for 10 years instead of two years because a faulty database had filled in incorrect information in the "expiration date" field.

In 2014, the agency sent applicants over 5,000 green cards bearing the wrong names or birth dates. Some replaced the applicant's first name with "No Given Name"; others included the wrong photos or fingerprints.

Between March and May 2016, USCIS issued duplicate green cards to 756 applicants, in some cases sending as many as five green cards to a single individual. Months later, the OIG found, the agency had not recalled any of the duplicates.

The agency's recently departed acting director, Lori Scialabba, told Congress in March that while the OIG findings were accurate, the study had been conducted shortly after the green card process was put on ELIS, "a time when it is typical for IT systems to have kinks that need to be worked out."

USCIS made its citizenship application available on ELIS last April, then took it down four months later. The OIG later said it had found "alarming security concerns" with the process — including that ELIS was allowing applications to go forward that had not been properly checked against FBI and Customs and Border Protection databases.

Some 175 individuals were granted citizenship before the problems with the background checks were discovered, the OIG found.

The agency now says ELIS will be finished in March of 2019.

"We can see that they aren't going to make that date either," said Kristen Bernard, director of the information technology management division at OIG, who has overseen several audits of USCIS.