There are many issues with the way the government conducts security background checks for federal employees and contractors — including questions about Edward Snowden’s background investigation.

Snowden, the former CIA employee and National Security Agency contractor, has admitted supplying classified information to The Washington Post and the Guardian news organization in Britain. That information concerns the massive collection of telephonic and electronic data of Americans and others.

However disturbing those programs might be, it is also troubling to learn about long-standing problems with background checks revealed at a Senate hearing Thursday — particularly problems related to someone who has exposed classified information. It was a joint hearing of two Homeland Security and Governmental Affairs subcommittees — the subcommittee on the efficiency and effectiveness of federal programs and the federal workforce and the subcommittee on financial and contracting oversight.

Patrick E. McFarland, inspector general for the Office of Personnel Management (OPM), told the hearing “we do believe there may be some problems” with the reinvestigation of Snowden in 2011.

“We cannot speak to Mr. Snowden specifically,” Susan L. Ruge, an associate counsel to the inspector general, said after the hearing. “However, periodic reinvestigations are standard practice in the U.S. government.”

USIS is a private company based in Falls Church that has done, under contract to OPM, a large portion of the background inquiries, including Snowden’s reinvestigation. USIS, itself, is under investigation.

Michelle B. Schmitz, OPM’s assistant inspector general for investigations, told the hearing that USIS has been under investigation since late 2011 in a “complicated contract fraud case.” Inspector general officials provided no details about that investigation.

“USIS has never been informed that it is under criminal investigation,” a company statement said. It acknowledged getting a subpoena for records from the inspector general’s office in January 2012. “USIS complied with that subpoena and has cooperated fully with the government’s civil investigative efforts.”

A statement from the office of Sen. Claire McCaskill (D-Mo.), however, said the company “is under active criminal investigation.” The inspector general’s office refused to say whether the USIS investigation is criminal or civil.

Referring to Snowden’s classified disclosures, Sen. Jon Tester (D-Mont.), chairman of the subcommittee on efficiency and effectiveness of federal programs, said “recent events have forced us all to take a closer look at ... who has access to our nation’s most sensitive data.”

McCaskill, chairwoman of the other subcommittee, was skeptical about the use of so many contractors doing background checks. USIS, she said, gets $45 million a year for administrative support “to do office work,” plus “several hundred million dollars a year to do background checks.” It takes 999 people to do the office work; only 35 are federal employees.

“Why are we paying contractors instead of hiring people?” McCaskill wanted to know.

An OPM official said contractors cost less but acknowledged that the agency had no cost-benefit analysis.

“I’m tired of this assumption being made that contractors are cheaper” when some studies show they are more expensive, McCaskill said.

Sometimes, the investigators need to be investigated.

Since 2006, 18 investigators and record searchers have been criminally convicted, according to the inspector general.

“One of the most flagrant criminal violations that we encounter is the falsification of background investigation reports,” McFarland said in testimony submitted for the hearing. “We refer to these as ‘fabrication cases.’ ”

In fabrication cases, “background investigators, either federal employees or contractors, report interviews that never occurred, record answers to questions that were never asked and document records checks that were never conducted,” McFarland explained.

“For example, a record searcher fabricated 1,600 credit checks that she never actually completed. Ironically, her own background investigation had been falsified by a background investigator convicted in a different fabrication case.”

Not long before the hearing started, McFarland and Ronald C. Machen Jr., the U.S. attorney for the District of Columbia, announced the guilty plea of Ramon S. Davila, of Frederiksted, St. Croix, U.S. Virgin Islands. Davila, a former OPM contract investigator, submitted bogus information about a background investigation. “In fact, he had not conducted the interviews or obtained the records of interest,” according to a Justice Department news release.

While the number of criminal convictions isn’t large compared to the number of employees and contractors who hold security clearances (4.5 million), the issue of missing documentation is a bigger problem. At one point, almost all Department of Defense (DOD) background reports lacked needed information.

“Executive branch agency efforts to improve the personnel security process have emphasized timeliness but not quality,” said a Government Accountability Office (GAO) report prepared for the hearing. “In May 2009, GAO reported that with respect to initial top secret clearances adjudicated in July 2008, documentation was incomplete for most of OPM investigative reports. GAO independently estimated that 87 percent of about 3,500 investigative reports that DOD adjudicators used to make clearance decisions were missing required documentation.”

Another problem is the lack of consistent, government-wide standards for background checks.

GAO said that last year the director of national intelligence had not provided agencies “clearly defined policies and procedures to consistently determine if a civilian position requires a security clearance.” Without better guidance, “executive branch agencies will continue to risk making security clearance determinations that are inconsistent or at improper levels,” GAO added.

The Office of the Director of National Intelligence did not respond to a request for comment.

Testimony at the hearing made it clear that problems with clearances are no small matter.

“Given the increasing number of folks with access to that information, we have a real problem on our hands if we can’t get this right,” Tester said.

“There is no margin for error.”

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