Phalen’s resume depicts him as natural for the gig. He joined the CIA in 1981 and left 30 years later as director of security. During that period, he also had stops of about three years each at the FBI and the National Reconnaissance Office.
“Personnel security has been in my blood,” said Phalen, 65, a Fairfax County, Va., resident, by telephone. He takes office Thursday. “The reality is it’s in my DNA. My dad spent 30 years at CIA, also at the office of security. He retired about 10 days before I came on board in 1981. . . . I think I learned a lot along the way.”
He’ll need that knowledge to corral a system that has taken some sharp blows in recent years.
Much of the criticism focused on USIS, a Falls Church, Va., contractor hired by the Office of Personnel Management (OPM) for the bulk of the government’s background clearance investigations. The company’s reputation faltered with the revelation that USIS had probed Edward Snowden, whose National Security Agency leaks led to Pulitzer Prize-winning articles in The Washington Post and the Guardian. USIS also did the background check on contractor Aaron Alexis, who killed 12 people at the Washington Navy Yard three years ago this month.
OPM canceled its contract with USIS following a lawsuit, initiated by a former company employee and later joined by the Justice Department. It said the firm dumped, or failed to do complete reviews in 665,000 investigations.
At the time, the company said the allegations were “contrary to our values” and blamed “a small group of individuals.” The lawsuit was settled. The company’s troubles with OPM led to bankruptcy.
“What this new bureau needs is transparency and accountability from top to bottom and someone with the management expertise to create a new organization that can help transform the dysfunctional and outdated background investigation process into one that works effectively to better secure our nation’s secrets and strengthen our national security,” said Sen. Claire McCaskill (D-Mo.). “I hope the agency’s pick is up to that challenge.”
McCaskill and Sen. Jon Tester (D-Mont.) have pestered OPM with questions about the new bureau, warning in an August letter that without basic agency structures, it will end up on the Government Accountability Office’s high-risk list “due to delays and backlogs in the security clearance process.” OPM told the senators the new bureau will have a staff of 8,500, almost two-thirds of them contractors.
While getting rid of USIS was a good move, it also increased the background investigations backlog, estimated at 500,000, enough to fill FedExField more than six times.
“We have seen an increase in the backlog. There are timeliness standards, and for the last number of quarters we have not met them,” said acting OPM Director Beth Cobert, in her usual straightforward manner. “That is an issue we are actively working to address using a variety of approaches.” That includes a recent increase in the number of contractors supporting field investigations, from two to four, and the hiring of 400 federal investigators.
“We’ll continue further expansion of the federal investigative field force this coming year,” she said, adding that “the quality of the investigation . . . is absolutely fundamental.” The background investigation process, she acknowledged, “needs modernization . . . a significant amount of work. . . . We need systems for the cybersecurity environment we face in 2016 and going forward.”
Phalen said addressing the backlog — “the elephant in the room” — will be among his first duties. “It is critical to start working on that.”
The backlog and “gaps in the security clearance background investigation process” are among the “tough questions” Tester said he wants to ask Phalen.
“Given the shortfalls we’ve seen in OPM’s background investigation process, it is critical that Mr. Phalen and the new Bureau prioritize national security above all else,” Tester said by email. “There is a lot at stake with the new Bureau — not only the safety of America’s secrets but also American lives. This job needs to be done correctly out of the gate, and anything less will be unacceptable.”