U.S. Joins Whistle-Blower Suit Over Background Probes

The U.S. joined a whistle-blower lawsuit against the firm whose background checks helped National Security Agency leaker Edward Snowden and Washington Navy Yard shooter Aaron Alexis get security clearances.

United States Investigations Services LLC is accused in the complaint in federal court in Montgomery, Alabama, of failing to perform quality control reviews in connection with its background investigations for the U.S. Office of Personnel Management.

From January 2010 through January 2011, Falls Church, Virginia-based USIS used proprietary software to automatically release to OPM incomplete background investigations, according to the complaint.

“We will not tolerate shortcuts taken by companies we have entrusted with vetting individuals to be given access to our country’s sensitive and secret information,” Stuart Delery, the head of the Justice Department’s civil division, said in a statement.

Blake Percival, a former USIS employee, filed his whistle-blower suit under seal in 2011. The case was filed under the federal False Claims Act, which lets citizens sue on behalf of the government and share in any recovery.

Percival’s suit was unsealed yesterday with the Justice Department’s decision to join the case. The Justice Department has until Jan. 22 to file its own complaint, according to the order unsealing the case.

Snowden, Alexis

The whistle-blower case doesn’t involve the background investigations of either Snowden or Alexis, according to a Justice Department official who wasn’t authorized to speak publicly on the case.

The lawsuit involves only whether USIS conducted a quality review of each completed background investigation as it was required to do under its contract with OPM, the official said.

USIS allegedly hid the shortcutting practice, which it called “dumping,” from OPM and improperly billed the agency for background investigations the company knew were not performed to contract specifications, according to the complaint.

New Leadership

“The behavior by a small number of employees alleged in the complaint is completely inconsistent with our company values, culture and tradition of outstanding service to our government customers,” Brandy Bergman, a spokeswoman for USIS, said in an e-mailed statement. “We have put in place new leadership, enhanced oversight procedures, and improved protocols that have been shared with OPM. We have been cooperating, and will continue to cooperate, with the government’s investigation into these allegations.”

Employees described in Percival’s complaint as spearheading dumping are no longer with the company, Bergman said in a telephone interview.

During a June congressional hearing on background checks, which are required for security clearances, Senator Claire McCaskill, a Missouri Democrat, said USIS was under criminal investigation by the OPM inspector general in connection with “systemic failure to adequately conduct investigations.”

USIS in 2011 conducted a background check tied to a security clearance renewal on Snowden, who held a top-secret clearance and leaked classified documents on U.S. surveillance programs.

Navy Yard

Navy Yard shooter Aaron Alexis, 34, obtained a secret-level clearance from the Navy in March 2008 after being investigated by USIS the previous year. His clearance 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.

Aaron killed 12 people and died in a shootout with police at the Navy Yard on Sept. 16.

OPM reviewed the 2007 USIS background investigation for Alexis, and “believes that the file was complete and in compliance with all investigative standards,” Merton Miller, OPM’s associate director for federal investigative services, said after the shootings.

The whistle-blower suit alleges that from January 2010 to January 2011, a USIS official engaged in dumping throughout the company’s U.S. operations.

Company investigators performed “incomplete and inaccurate investigations, and USIS knowingly submitted cases to OPM for payment that they knew had not been reviewed by a USIS reviewer as required by the contract,” Percival said in his complaint.

Percival Terminated

Percival, a director of fieldwork services, was terminated in June 2011 because he refused to dump, according to his complaint.

His suit doesn’t seek a specific sum in damages. It requests triple the amount of damages sustained by the U.S. plus a civil penalty of $5,000 to $10,000 for each violation of the False Claims Act.

“The dumpings described herein (i.e. the submitted false claims) for the period January 2010 through January 2011, alone, constitute multimillion-dollar payments by the United States government to USIS,” according to the suit.

No company does more U.S. government background checks for clearances than USIS, which was awarded $253 million by OPM last year. The company performed 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 McCaskill’s office.

USIS, a unit of Falls Church, Virginia-based Altegrity Inc., owned by Providence Equity Partners LLC, has at least 40 federal contracts for work related to investigations, 14 of which are scheduled to expire by Oct. 1, 2014, according to federal procurement data compiled by Bloomberg.

The company performs background checks and other investigative work for the Federal Bureau of Investigation, U.S. Immigration and Customs Enforcement and the Department of Agriculture, among other agencies.

The case is U.S. ex rel Blake Percival v. U.S. Investigations Services LLC, 11-cv-527, U.S. District Court, Middle District of Alabama.

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