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February 20, 2006
Internal report finds problems with handling of L-1 visas
Kent Hoover
Washington Bureau Chief
The Department of Homeland Security's inspector general found widespread problems with the handling of L-1 visas, which enable companies to transfer foreign executives or "specialized knowledge" workers to the United States.

The Bureau of Citizenship and Immigration Services approves more than 40,000 L-1 visas a year, mostly to workers in the information technology industry. Half of the petitions for specialized knowledge visas last year were submitted for workers from India.

Critics of the program say businesses are using the visas to import cheaper labor, leading to job losses for U.S. engineers, computer scientists and IT professionals. They contend U.S. companies are using the L-1 visa program to get around caps on H-1B visas, which are temporary work visas for highly skilled workers.

The inspector general's report found that immigration officials who review L-1 visa petitions "believe they have little choice but to approve" almost all specialized knowledge petitions because the term "is so broadly defined." They also have have trouble confirming that a company seeking to transfer a manager or executive actually will use the employee in that capacity, according to the report.

Immigration officials also find it difficult to verify that a company has operations in a foreign country, the report found. Plus, companies that petition for L-1 visas can merely be in the process of setting up an office in the United States, which opens the program to abuse by foreign companies that supply workers to U.S. companies.

From 1999 to 2004, nine of the 10 businesses that filed the most L-1 visa petitions were IT-related outsourcing firms that specialized in workers from India, according to the report.

Congress passed legislation in 2004 that made foreign workers ineligible for L-1 visas if they are supervised by companies that didn't file for the visas or if their placement "is essentially an arrangement to provide labor for hire."

The inspector general concluded it's too soon to judge the impact of this legislation.

Sen. Charles Grassley, R-Iowa, wants a task force of government officials to recommend ways to close loopholes in the L-1 visa program.

"Something has to be done," Grassley says. "We can't have companies bypass the H-1B visas just to get around protections intended to help American workers."

IEEE-USA, which represents electrical and electronic engineers, says the inspector general report confirmed its suspicions about L-1 visas.

"This report shows that the L-1 classification, just like the H-1B program, is vulnerable to fraud, abuse and poor enforcement," says IEEE-USA President Ralph W. Wyndrum Jr.

For more information, see grassley.senate.gov.