By Diane Bartz and Tabassum Zakaria
WASHINGTON, June 26 U.S. government auditors
discovered four years ago that a select group of private
contractors conducting background checks for high-security jobs
were not doing enough to ensure the quality of their
Some investigators hired by the companies were not
adequately trained or closely supervised, and the background
reports they turned over to agencies for hundreds of thousands
of prospective employees had missing information that could lead
to risky hiring, the inspector general for the Office of
Personnel Management said in a 2010 report that got little
Now, as Congress focuses on how former Booz Allen Hamilton
systems administrator Edward Snowden gained access to
National Security Agency secrets while working at a facility in
Hawaii, the report's findings are drawing new attention. Some
lawmakers are calling for a full review of how security
clearances are done.
Snowden is facing espionage charges after leaking details
about secret U.S. surveillance programs to the media. He flew to
Moscow from Hong Kong on Sunday and, according to Russian
President Vladimir Putin, on Tuesday he was in the transit area
of a Moscow airport.
At a hearing last week, Senator Claire McCaskill, a Missouri
Democrat on a contracting oversight panel of the Senate Homeland
Security Committee, cited an ongoing investigation into USIS,
the contractor that conducted the most recent security review of
"It is a reminder that background investigations can have
real consequences for our national security," McCaskill said.
Questions have been raised about whether Snowden misstated
his educational credentials. Hiring screeners at Booz Allen
Hamilton found possible discrepancies in a resume submitted by
Snowden, but the company still employed him, a source with
detailed knowledge of the matter said last week.
Snowden also would have had to undergo a polygraph exam
administered by the NSA, a senior government official said on
condition of anonymity.
USIS is one of three companies now doing background checks
under contracts worth up to $2.5 billion with the government's
Office of Personnel Management.
USIS declined to comment for this story beyond a statement
issued last week in which it said it had cooperated with the OPM
inspector general's investigation and had no comment about
Snowden's background check.
Screening prospective employees is a challenge because of
the large number of jobs now requiring secret or top-secret
As of October 2012, 4.9 million U.S. workers had some sort
of federal security clearance. There were 3.9 million background
investigations done in fiscal 2012, some by the OPM's Federal
Investigative Services unit and others by the three contractors
with oversight by the OPM. It is unclear how many each does.
The OPM's Federal Investigative Services (FIS) defended the
quality of background investigations.
"FIS investigative personnel are held to the highest
standards of ethical and professional conduct in their positions
of public trust and national security," Merton Miller, associate
director of FIS, said in a statement. "Misconduct rarely
The 2010 report found problems with procedures and
safeguards used by all three private contractors - USIS,
KeyPoint Government Solutions and CACI International Inc
All three companies have had investigators who were found to
have done substandard work in background checks, which involve
pulling records and interviewing associates of a job seeker.
"USIS, Kroll (KeyPoint) and CACI have all employed
background investigators who have been convicted of
fabrication," Susan Ruge, associate counsel at the OPM's
inspector general's office said.
The U.S. Attorney in the District of Columbia has prosecuted
18 cases since 2006 - 11 of them federal employees and seven who
worked for the private companies, according to OPM Inspector
General Patrick McFarland in testimony to Congress last week.
The penalties for the crimes have ranged from prison time to
CACI and KeyPoint declined to comment.
Some experts said it made no difference whether the
background investigations were done by contractors or by
Companies are "using basically the same kinds of people" as
the government, said Daniel Schwartz, a former NSA general
counsel. "They're former agents or retired agents."
The Government Accountability Office said the fiscal 2012
base price for a "top-secret" clearance investigation conducted
by OPM was $4,005 while the base price of a less sensitive
"secret" clearance was $260.
Those conducting the background checks may be inexperienced,
and may be pushed to work quickly, said Schwartz.
"The real problem in this process is that it is grossly
understaffed," said Schwartz, now with the law firm Bryan Cave.
"There are not enough good staffers. On the clearance side, it's
a huge problem."
USIS, which has 2,300 investigators, is the oldest and
largest of the three companies. It was created in 1996 when the
government decided to partially privatize the work to achieve
savings estimated at the time to be between $60 million and $120
million per year.
USIS is owned by a larger investigative company called
Altegrity, which in turn is principally owned by
private equity firm Providence Equity Partners.
KeyPoint started in 2000 as Kroll Government Services, which
did consulting and investigations. Veritas Capital bought Kroll
in 2009 and changed its name.
It has 2000 investigators and works for more than 120
federal agencies, including OPM, Immigration and Customs
Enforcement, Customs and Border Protection and the
Transportation Security Administration, according to the
company's web site.
Defense contractor CACI, a technology company, began doing
federal background checks in 2004. It was criticized for the
translators and other personnel that it provided to the U.S.-run
Abu Ghraib prison in Iraq.