Justice Department sues security clearance firm

The Justice Department is suing the security clearance firm USIS for fraud, alleging that the contractor submitted more than 660,000 faulty or poorly reviewed background checks over four years.

According to the complaint, USIS obtained almost $12 million in federal bonuses between 2008 and 2012, in part on the basis of background checks that its contracting agency, the Office of Personnel Management, presumed were being done according to established procedure. The complaint, filed in U.S. District Court in Alabama and first reported by the Wall Street Journal, alleges that the company wrote software designed to "dump" incomplete investigations on OPM.

The court documents also spotlight the joking tone on the part of company officials in memos allegedly discussing their plans to furnish incomplete background checks to OPM. In filing the lawsuit, the Justice Department is backing claims made in a whistleblower lawsuit filed by a former USIS executive.

Among the background checks performed by USIS were those on intelligence community contractor Edward Snowden and Navy Yard shooter Aaron Alexis. The complaint does not indicate whether the checks on Snowden or Alexis were part of improperly performed investigations.

Sen. Claire McCaskill (D-Mo.) revealed that USIS was under investigation in June 2013 during a Senate hearing convened in part to spotlight a gap in the ability of OPM’s inspector general to tap into the agency's revolving fund to conduct audit investigations. The House recently passed legislation to make the fund available to the Office of the Inspector General.

"Since first learning of these allegations nearly two years ago, we have acted decisively to reinforce our processes and management to ensure the quality of our work and adherence to OPM requirements,” a USIS spokesman said in a statement. “We appointed a new leadership team, enhanced oversight procedures, and improved control protocols. From the outset, we have fully cooperated with the government’s investigation and remain focused on delivering the highest quality service under our OPM contracts.”

USIS, which employs 6,000 people, was established after the privatization of the investigations arm of OPM in 1996. Federal contracts make up about 90 percent of the company's business. The firm has received upwards of $4 billion in federal contracts over the last 10 years, according to the Wall Street Journal.

That lucrative market could be constrained if the recommendations of the President's Review Group on Intelligence and Communications Technologies are followed. The group, convened to issue recommendations about government surveillance programs and information security in the wake of disclosures based on documents leaked by Snowden, recommends sweeping changes to the security clearance policy. The panel advised that security clearance probes be conducted by government agents or a private-sector non-profit corporation modeled on federally funded research and development centers like the MITRE Corporation and the RAND Corporation. USIS is a subsidiary of Altegrity, a privately held for-profit firm controlled by the private equity company Providence Equity Partners.

"We believe that the current security clearance personnel vetting practices of most federal departments and agencies are expensive and time consuming, and they may not reliably detect the potential for abuse in a timely manner," the group wrote.