Sept. 20 (Bloomberg) -- The same federal contractor that vetted Edward Snowden, who leaked information about classified U.S. spying programs, also performed a background check that let the Washington Navy Yard shooter obtain a security clearance.
Now the contractor, USIS, is drawing fire from a U.S. senator asking how Snowden and Navy Yard shooter Aaron Alexis slipped through the cracks. The vetting process has also been included in an inquiry by law enforcement agencies into Alexis’s activities before his deadly rampage this week.
No company does more U.S. government background checks for clearances than USIS, which was awarded $253 million by the Office of Personnel Management last year. The company did about two-thirds of background investigations done by contractors, and more than half of all those performed by the U.S. personnel office, according to Senator Claire McCaskill’s office.
“What’s emerging is a pattern of failure on the part of this company, and a failure of this entire system, that risks nothing less than our national security and the lives of Americans,” McCaskill, a Missouri Democrat, said in a statement. “We clearly need a top-to-bottom overhaul of how we vet those who have access to our country’s secrets and to our secure facilities.”
Alexis, 34, obtained a secret-level clearance from the Navy in March 2008 that would have enabled him to get the access card he used to get on the base. After leaving the Navy in January 2011, Alexis kept the clearance even with three arrests, a history of mental illness and a record of military misconduct. His clearance was good for 10 years and wasn’t subject to reinvestigation, according to a defense official who wasn’t authorized to speak publicly and asked not to be identified.
Security specialists say USIS, a unit of Falls Church, Virginia-based Altegrity Inc., owned by Providence Equity Partners LLC, is a beneficiary of a system where the number of people with security clearances surged to almost 5 million as of last year. Investigators are overworked and underpaid, security specialists say, and the government has become increasingly reliant on outside contractors to do background checks.
USIS did Aaron Alexis’s background investigation in 2007, Ray Howell, a USIS spokesman, said yesterday in an e-mail. “Today we were informed that in 2007, USIS conducted a background check of Aaron Alexis” for the U.S. Office of Personnel Management, Howell said.
Just the day before, Howell said that USIS hadn’t vetted Alexis, who killed 12 people at the Navy Yard on Sept. 16 and then died in a shootout with police. The company can’t comment further because it’s prohibited contractually from retaining information gathered during its background checks for the personnel office, he said.
Merton Miller, associate director for federal investigative services at the Office of Personnel Management, said that the agency “has reviewed the 2007 background investigation file for Aaron Alexis, and the agency believes that the file was complete and in compliance with all investigative standards.”
Once an investigation is complete, Miller said, it is submitted to the “adjudicating agency” -- in this case, the Defense Department -- for review. The personnel office’s involvement with Alexis’s security clearance ended when it submitted the case to the Defense Department.
The Pentagon “did not ask OPM for any additional investigative actions after it received the completed background investigation,” Miller said.
Senator Rob Portman, an Ohio Republican, said there is “inadequate oversight of the background check process” that must be fixed through legislation.
“If this doesn’t make it even more clear that this has to be fixed, I don’t know what will,” he said in a statement.
Patrick McFarland, inspector general of the personnel office, has said there may have been shortcomings in USIS’s vetting of Snowden, a former Booz Allen Hamilton Holding Corp. employee who worked for the National Security Agency.
Snowden, who leaked information about U.S. electronic surveillance programs, faces federal charges of theft and espionage and is in Russia under temporary asylum.
Federal authorities are looking into the security-check process as part of a broader investigation into Alexis’s activities, said a law enforcement official, who would only speak on condition of anonymity.
“In light of recent events, we plan to step up our efforts to investigate and prosecute the individuals and companies who risk our security by cutting corners and falsifying information in background checks,” Matthew Jones, a spokesman for U.S. Attorney Ronald Machen in Washington, said in a statement.
During a June congressional hearing on background checks, which are required for security clearances, McCaskill said USIS was under criminal investigation.
Susan Ruge, associate counsel to the Office of Personnel Management inspector general, yesterday declined to answer questions about whether her office was conducting a criminal investigation of USIS.
There’s no simple answer for who’s at fault for letting Alexis and Snowden slip through, according to Mark Amtower, who runs a government-contract consulting firm in Clarksville, Maryland. That the two passed the vetting process may be tied to the number of investigations that USIS handles, Amtower said.
“You may say these checks should be more thorough,” he said in an interview, asking who would pay the added cost of tougher investigations as U.S. agencies look for spending cuts.
Federal clearances and background checks by the personnel office cost taxpayers about $1 billion last year, an expense that’s expected to rise to $1.2 billion by 2014, according to McCaskill’s office.
The surge in clearances has led “invariably to corners being cut and contractors performing poorly,” said Neil Gordon, an investigator at the Washington-based Project on Government Oversight.
Coupled with Snowden’s vetting, the Alexis case “is definitely going to hurt their reputation,” Gordon said of USIS. The contractor competes with CACI International Inc. and KeyPoint Government Solutions Inc., a unit of Veritas Capital, a New York-based private equity firm.
USIS has gained market share since news broke about Snowden’s leaks, according to data compiled by Brian Friel, a Bloomberg Industries analyst. USIS won 75 percent of background-investigation contract orders from the personnel office since June, compared with CACI’s 19 percent and KeyPoint’s 6 percent.
Friel said it’s been a “reversal of fortune” for USIS, which had been losing share since 2007.
USIS’s prominence as a background-check contractor is due to its origin as the Federal Investigations Division of Office of Personnel Management. The unit, originally known as U.S. Investigations Services Inc., was privatized in 1996 as part of then-Vice President Al Gore’s effort to “reinvent” government by reducing the size of the civil service, according to a 2011 report by the Congressional Research Service.
Contracting out security reviews was designed to save the government money and secure new work for about 700 investigators who would no longer be needed because of a declining clearance workload due to the end of the Cold War. Instead, demand for security clearances would surge after the Sept. 11, 2001 terrorist attacks.
USIS was given a non-competitive, three-year contract for investigative work with the government personnel office and granted free access to federal computer databases that weren’t available to other firms.
The Carlyle Group LP, a Washington-based private equity firm, and New York-based Welsh, Carson, Anderson & Stowe LP invested in USIS. They agreed in 2007 to sell USIS to Providence, Rhode Island-based Providence Equity Partners for about $1.5 billion.
At least ten background-check workers employed by contractors who have been convicted or pleaded guilty to falsifying records since 2006, according to the personnel office’s inspector general. Eight of them worked for USIS.
To contact the editor responsible for this story: Stephanie Stoughton at email@example.com