State Dept. may have overcharged for passports

Vacations, weddings, honeymoons, business meetings, education plans and nonrefundable deposits all fell victim to the delays. People lost work time waiting in long lines.

"We've had a passport mess in this country," Dorgan said. "Now we find out the same State Department ... has been double-charging with respect to the fee for applying for the passport. This is not acceptable."

Linda Kocher of Wahpeton, N.D., paid twice for three passports this year — the second payment was necessary when the original passports failed to arrive as she was ready to vacation in Mexico.

"You think they're not trying to make any money off me. That's baloney," she said.

The GAO said the State Department and the Postal Service — which are permitted to keep any profits — benefited from a dramatic surge in the numbers of passports issued, rising from 7 million in 2002, including renewals, to more than 18 million over the past year.

The senators estimated the government overcharged travelers $112.7 million during 2002, when just 7 million passports were issued.

The government uses some of its profits to provide free passports to relatives of dead soldiers traveling overseas to attend funeral services. But the senators said it was "inconceivable" all the government's profits were used for those purposes, and they asked Rice for a detailed accounting of where the money went.

More Americans are required to have passports because of new anti-terrorism laws. The State Department has said it expects to issue as many as 23 million passports next year and 30 million more in 2010.

FACT FILE Passport rule changes What travelers need to know about new regulations

Since January, for the first time, travelers visiting Canada, Mexico, Central and South America, the Caribbean and Bermuda by air have needed passports — or proof they applied for passports. The requirement will take effect for land and sea travelers before June 2009.

Since many Americans travel often to these areas, including regular cross-border travel to Canada and Mexico, the State Department plans to introduce a new $45 Western Hemisphere passport card next spring.

The fee for accepting the applications would drop from $30 to $25 for the card and traditional passport books, under a State Department proposal.

The State Department told congressional investigators its cost for accepting applications at its offices in 2005 had risen to $24.36, virtually the same as the proposed new $25 fee. But consular officials could not describe how they calculated that estimate, investigators said.

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The Postal Service initially told the GAO, in April 2006, its cost for accepting applications had jumped to $19. But later the mail service revised its cost estimate upward to $32.86 — adding overhead costs not associated with passport processing — making its cost appear to be higher than the $25 fee it would collect.

"It is unclear whether USPS's estimate accurately reflects its costs," the GAO said.

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