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DOJ Sues Firm That Screened Edward Snowden and Navy Yard Shooter

On Wednesday, the Justice Department filed its long-awaited complaint in a False Claims Act lawsuit against background check contractor U.S. Investigations Services (USIS). In October last year, Justice announced it had intervened in the lawsuit, which was filed in 2011 by former USIS employee Blake Percival. Percival’s complaint is posted here.

The government claims that, from March 2008 through September 2012, USIS defrauded the government by submitting at least 665,000 incomplete background investigations of current or prospective federal and contractor employees, which were used to determine eligibility for access to classified information and suitability for sensitive jobs. Specifically, the government accuses USIS of engaging in a practice known inside the company as “dumping” or “flushing,” through which it allegedly submitted investigations that it falsely claimed were complete and had undergone quality review. The government paid USIS between $95 and $2,500 for each of these 665,000 investigations (about 40 percent of USIS’s total workload during that time period) and also paid USIS more than $11.7 million in annual performance bonuses.

USIS made national news last year as the firm responsible for the background investigations of Navy Yard shooter Aaron Alexis and NSA surveillance program whistleblower Edward Snowden. It is not clear from the government’s complaint whether USIS’s 2011 investigation of Snowden is among the thousands USIS allegedly falsified. (USIS’s investigation of Alexis, conducted in 2007, is presumably outside the scope of the lawsuit.) It also does not state whether USIS’s alleged fraud resulted in any serious security breaches or if any of the allegedly tainted background investigations had to be reopened.

USIS is the federal government’s largest contract provider of background investigations. It has received more than $5 billion in federal contracts since fiscal year 2000. The company was founded in 1996 when it was spun off from the Office of Personnel Management (OPM) as part of the Clinton administration’s effort to “reinvent” government. As The New York Times reported at the time, there was considerable opposition to President Clinton’s plan to privatize background investigations, with members of Congress and even some of USIS’s first employees expressing concerns about quality control. Those concerns grew over the years as private equity firms gradually took over the company, and as USIS faced an increasing backlog of background investigations resulting from the post-9/11 surge in national security hiring.

In addition to the False Claims Act lawsuit, USIS faces criminal investigations by the OPM Inspector General and a federal grand jury over its alleged “dumping”/“flushing” scheme. The scheme is believed to be related to the spate of prosecutions of individual USIS employees in recent years for fabricating background checks. USIS is also mired in civil litigation alleging unfair labor practices by former employees who claim they were forced to work off the clock and during unpaid breaks to keep up with the company’s hectic work schedule. One such lawsuit, a class action filed in California in 2011, reportedly settled out of court for $900,000.

Given the dire legal situation of USIS, we must take this opportunity to again question the wisdom of the government’s policy of outsourcing security clearance work. Are we comfortable with giving contractors such a large role in determining who gets access to the country’s most closely guarded secrets?

By: Neil Gordon
Investigator, POGO

Neil Gordon, Investigator Neil Gordon is an investigator for the Project On Government Oversight. Neil investigates and maintains POGO's Federal Contractor Misconduct Database.

Topics: Contract Oversight

Related Content: Contractor Accountability, Inherently Governmental Functions, Federal Contractor Misconduct, Government Privatization, False Claims Act

Authors: Neil Gordon

Submitted by Tool at: January 25, 2014
'USIS' was the 'United States Information Service' abroad during the sixties and seventies. They had libraries for both cultural and political information. Is this a private sector continuation of the same department with added duties? Maybe they should go back to running libraries!
Submitted by cyberman at: January 25, 2014
DOJ should also investigate and charge with 'stupidity' those who made the decision to move from federal employees doing background checks to contractors. This was a battle fought and lost to corporate interests. Now we see a bit of the thoroughly foreseeable national security consequences. Thanks Billy. Let's lay this one at your feet too. A few years ago DOE refused to provide, under the terms of a FOIA request, the names of their Q cleared employees who apparently lied about their educational qualifications. Much preferring to protect these individuals who lied than provide their names to the public. Now the question is among the 665,000 incomplete background checks how many of these were given access to Restricted Data and thereby access to nuclear weapons design information and related classification, security and intelligence matters? And what is the national security risk assessment of the consequences of these potentially harmful incomplete backgrounders? Hopefully it is minimal. Again I bet DOE will not utter an insightful public peep about this matter if it applies to them instead once again preferring their thick and heavy security blanket of complete opacity.
Submitted by Bunty at: January 25, 2014
Excellent work, Neil Gordon
Submitted by davidharoldbraun at: January 25, 2014
When will we learn about the wrong-headedness of "privatization of well regulated government functions?
Submitted by ivanczar at: January 25, 2014
Good lord , every time I hear or read anything about privatization it always involves corruption , waste , fraud , abuse or incompetence !
Submitted by Willie at: January 25, 2014
It is about time that proper controls be placed over such screens. This suit should include ANY other suspected or proven screed which was done incompletely or in error by this company.
Submitted by RLK at: January 25, 2014
Every 080 working classified contracts knew this for years but forbidden to say anything. Those "Peter Principle" clowns at DSS looked the other way at the behest of our self-interested elected officials.

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