We obtain information from a variety of sources. Much of it comes from unsolicited letters sent to Santa by children all over the world listing specific items they would like to receive for Christmas. Often these letters convey additional information as well, such as the child's hopes and dreams, how much they love Santa, and which of their siblings are doodyheads.
The letters also provide another important piece of information—fingerprints. We run these through databases maintained by the FBI, CIA, NSA, Interpol, MI6, and the Mossad. If we find a match, it goes straight on the Naughty List. We also harvest a saliva sample from the flap of the envelope in which the letter arrives in order to establish a baseline genetic identity for each correspondent. This is used to determine if there might be an inherent predisposition for naughtiness. A detailed handwriting analysis is performed as part of a comprehensive personality workup, and tells us which children are advancing nicely with their cursive and which are still stubbornly forming block letters with crayons long past the age when this is appropriate.
Our network of fully trained, duly deputized mall "Santas" file reports from the field, telling us which children are well-behaved, which are elf-phobic, which are prone to sphincter control issues, and which are squirmy beard-pulling monstrous little brats. Digital copies of photos taken with these "Santas" are automatically sent to our database for further evaluation, with particular attention given to the ones where the children are crying.
(via Dan Hon)