Justice Department says USIS submitted 665,000 incomplete background checks

Lawmakers said Thursday that new details emerging from the Justice Department’s civil case against a leading company that conducts security background checks for the federal government may speed legislation designed to clean up the once-burgeoning contracting business.

This week, the Justice Department filed a new complaint in a whistleblowers’ lawsuit it joined in October against USIS, a company that conducts background checks for nearly half of potential U.S. government hires.

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The filing accuses the Falls Church, Va., firm of taking shortcuts in about 40 percent of the cases it handled — at least 665,000 in total — and, in the process, qualifying for nearly $12 million in performance bonuses from the federal government. Yet USIS officials told the government that all the necessary reviews had been done.

“Flushed everything like a dead goldfish,” one USIS manager wrote in one of several e-mails cited in the court filing about how cases were being sped along to meet revenue targets.

Sen. Claire McCaskill (D-Mo.), who co-sponsored legislation aimed at reforming the security clearance process, issued a statement Thursday critical of the “stunning failures of this company — and the resulting threats to our national security.”

McCaskill, a member of the Homeland Security and Government Affairs Committee, has introduced legislation with Sen. Jon Tester (D-Mont.) that would improve oversight of the security-clearance process, providing more funds for auditing and investigating contractors. A version of the legislation has passed the House, and a final vote is pending in the Senate.

On Wednesday, the Justice Department said in the complaint that USIS knowingly conducted flawed investigations of individuals seeking security clearances.

“Beginning in at least March 2008 and continuing through at least September 2012, USIS management devised and executed a scheme to deliberately circumvent contractually required quality reviews of completed background investigations in order to increase the company’s revenues and profits,” the Justice Department said in a filing Wednesday in U.S. District Court in Alabama.

The background reviews were incomplete because they had not undergone a promised “quality review,” the government said.

USIS said in a statement that the allegations did not fit the company’s record or approach.

“The alleged conduct referenced in the civil complaint is contrary to our values and commitment to exceptional service,” the company said. “These allegations relate to a small group of individuals over a specific time period and are inconsistent with the strong service record we have earned since our inception in 1996.”

In response to the allegations, which surfaced last year, “we appointed a new leadership team, enhanced oversight procedures, and improved control protocols,” the statement continued. “From the outset, we have fully cooperated with the government’s investigation and remain focused on delivering the highest quality service.”

USIS found itself in the spotlight after it acknowledged that it had conducted background checks for former National Security Agency contractor Edward Snowden, whose decision to leak thousands of classified government documents last year revealed the extent of surveillance by U.S. intelligence agencies. USIS also vetted government contractor Aaron Alexis, who shot and killed 12 people at the Washington Navy Yard last fall.

Congressional staffers said they were not aware of any finding of specific wrongdoing in USIS’s vetting of Snowden. But congressional staffers said a classified inquiry conducted by the Office of the National Counterintelligence Executive may have revealed flaws in the background check. A spokesman for that agency declined to comment.

Congressional and executive branch inquiries have not found evidence that USIS violated government standards when it vetted Alexis. An Office of Personnel Management official said last year that it had found no red flags.

“OPM 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,” said Merton W. Miller, OPM associate director for federal investigative services.

Still, USIS has drawn continued interest from lawmakers and the Justice Department. In addition to facing the civil lawsuit, the company is under criminal investigation over whether it misled officials about the thoroughness of its work, according to federal officials.

A number of former USIS employees have been charged with falsifying records in individual cases. A USIS spokesman declined to comment on the Justice Department’s criminal inquiry Thursday; previously, the company denied knowledge of a criminal probe.

The federal government gave USIS nearly $2.4 million in bonuses in fiscal 2008, $3.5 million in 2009 and $5.8 million in 2010 as a reward for good performance, the Justice Department complaint says.

Several additional messages included in the complaint suggest that USIS chose to dump or flush the files so that it could meet internal revenue goals. In one case, a USIS “Workload Leader” in Pennsylvania wrote to a company quality assurance and control manager about the pressure to increase the number of clearances.

“The only two things we can do in review to get them out faster is to (a) hire or (b) dump,” he wrote.

If the OPM had known about the shortcuts, it would not have deemed “USIS’s performance acceptable,” the complaint says.

The lawsuit that the government is joining was originally filed by Blake Percival, a former director of field work services at USIS. He sued the company in 2011 under the whistleblower provisions of the False Claims Act, accusing the company of rushing cases through the system and hiding the practice from the OPM.

The Washington Post reported that the Justice Department had joined Percival’s suit in October. Wednesday night’s filing was first reported by the Wall Street Journal.

Alice Crites and Madga Jean-Louis contributed to this report.

 
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