WASHINGTON – Lawmakers are calling for more oversight of the vetting process allowing individuals to access classified information and criticizing the federal government’s lack of standards and lax supervision of security clearances.
In the wake of the NSA scandal in which former National Security Agency contractor Edward Snowden leaked numerous documents about American surveillance operations around the world, two Senate panels held a joint hearing last week to look into the role of private companies in the U.S. intelligence community.
Sen. Jon Tester (D-Mont.), chairman of the Governmental Affairs subcommittee, said that in light of recent events it is essential to determine whether programs carried out by the government in the name of national security “balance our security and our essential liberties.”
“It’s also incumbent upon us to raise critical questions about how our government is vetting the individuals, whether they’re federal employees or contractors who have access to our nation’s most sensitive data,” Tester said.
A January report from the director of National Intelligence showed nearly five million people hold United States security clearances. Personnel security clearances allow government and contractor staff to gain access to the nation’s most sensitive data. They are broken into confidential, secret, and top-secret classifications based on the sensitivity of the information a person is allowed to view. Roughl 1.4 million of these individuals hold a top-secret security clearance, granting them access to information that may cause exceptional damage to U.S. national security if disclosed without authorization.
The Office of Personnel Management‘s (OPM) Federal Investigative Services division conducts over 90 percent of the investigations, including all background investigations for civilians and contractors.
Conducting and managing background investigations costs the federal government over $1 billion per year, up nearly 80 percent since 2005, according to a 2012 report by the Government Accountability Office (GAO). Most of the money goes to private companies hired by the government to conduct investigations for OPM. Private-sector contractors conduct approximately 75 percent of all investigations.
But one company in particular has acquired two-thirds of the contracts to conduct background investigative fieldwork for government agencies. About 65 percent of all background investigations on behalf of the federal government are conducted by US Investigations Services (USIS), a private company established in 1996 as a result of the privatization of the investigative branch of OPM.
According to a report by the Congressional Research Office, USIS was created as part of Vice President Al Gore’s “reinvention program,” which entailed a sizable downsizing of the civil service to make the government work with fewer staff and less funds. At OPM, the security and investigations unit of the agency was the ideal target for the program because of its reduced workload after the end of the Cold War and fewer new hires throughout the federal government at the time. After its creation in 1996, OPM awarded the company a non-competitive, multi-year contract. Others firms have won contracts to perform checks for the federal government, but none of them as lucrative as those obtained by USIS.
The OPM paid USIS more than $200 million last year for its work, said chairman of the subcommittee on Financial and Contracting Oversight Sen. Claire McCaskill (D-Mo.). According to data compiled by Bloomberg, the company received $253 million to conduct background check investigations under a contract with the OPM in fiscal year 2012.
“We received information regarding how the government plans, conducts, oversees, and pays for background investigations. This information portrays a government agency where there is fraud, limited accountability, and no respect for taxpayer dollars,” McCaskill said.
After the Sept. 11 attacks, the surge in demand for staff with security clearances exhausted the government’s ability to conduct background checks. A large backlog of applications led to some having to wait for months, or, in some cases, more than a year, to obtain the security clearance necessary to work for the newly classified jobs. In light of these problems, Congress passed the Intelligence Reform and Terrorism Prevention Act in 2004 to improve the clearance process and decrease the waiting period. FIS was able to meet the law’s requirements for timeliness, in part by increasing the size of its staff.
McCaskill said that USIS has been under investigation for allegations that it has failed to “adequately conduct investigations under its contract.” Patrick McFarland, the inspector general for the U.S. Office of Personnel Management, told lawmakers that his office is probing USIS, but declined to reveal the reason of the probe.
In a statement on Thursday, USIS said it “has never been informed that it is under criminal investigation. In January 2012, USIS received a subpoena for records from the OPM’s Office of the Inspector General. USIS complied with that subpoena and has cooperated fully with the government’s civil investigative efforts.”
McFarland warned that there is an “alarmingly insufficient level of oversight” of OPM’s Federal Investigative Service.
“The lack of independent verification of the organization that conducts these important background investigations is a clear threat to national security,” McFarland said.
The OPM uses a $1 billion revolving fund to finance background investigations. Federal agencies reimburse OPM through this fund for the investigations each agency needs for both its employees and its contractors. McFarland said that OPM has denied his office’s request to audit the revolving door funds. He also explained that his office lacks resources to monitor spending because it could not use resources from the fund to audit it.
“For several years, OPM has taken the position that oversight is not considered an administrative cost, and thus our office has been denied access to the revolving fund,” McFarland said.
McCaskill said she was worried that there appears to be a pattern of falsified background checks. She noted how at least 18 investigators – 11 federal employees and seven contractors – handling the checks have been convicted of falsifying investigations since 2007. McFarland added that his office is currently investigating dozens of cases in which investigators allegedly falsified security clearance reports. Sen. Rob Portman (R-Ohio) noted that a review by the GAO in 2009 found that of 3,500 security-clearance reviews, almost nine in 10 lacked documentation. Of those, nearly a quarter were still approved.
The Snowden case adds to concerns about falsified background checks. Last week, Reuters reported that Booz Allen Hamilton hired Snowden despite finding possible inconsistencies in his resume.
When asked whether USIS’s investigation into Snowden’s background may not have been conducted in an appropriate manner, McFarland said there “may have been some problems” with Snowden’s background check.
No recent proposals to clamp down on the security clearance process have yet surfaced, but some lawmakers have voiced their willingness to stop any future leaks of classified information.
“We may need legislation to limit or prevent certain contractors from handling highly classified and technical data,” Sen. Bill Nelson (D-Fla.) wrote in a letter to Dianne Feinstein, chairman of the Senate Intelligence panel. “I believe there should also be a committee investigation to determine how private contractors screen, hire and monitor employees who need top secret clearances from the government to handle highly-classified information.”