The U.S. Investigations Services Inc. (USIS) that conducted the background check for the National Security Agency (NSA) before it hired former contractor Edward Snowden, has been accused of committing fraud. The federal government says it found out that the USIS submitted around 665,000 incomplete investigations between 2008 and 2012 to rake in roughly $12 million in bonuses atop meeting its revenue goals.
The USIS is the biggest background investigation firm hired by the government, handling roughly 45 percent of the background checks, to make sure its new hires are safe to be given clearances to buildings and programs deemed classified. The operation of USIS, overseen by the Office of Personnel Management, involves checks done for federal agencies such as the Defense Department, Homeland Security, Justice Department, Treasury Department, and over 100 other agencies.
The company based in Falls Church, Virginia, started doing background checks for the federal government in 1996. The OPM pays the USIS between $95 and $2,500 for the background checks depending on the requirements. This has become common practice for the government since the task was privatized in the same year to cut government expenditures. However, after the 9/11 terrorist attack, the demand for checks and clearances went up to as much as 5 million in 2012.
On Wednesday, the Justice Department joined an existing whistle-blower case against USIS in the U.S. District Court in Montgomery, Alabama. The original lawsuit was filed by former USIS employee Blaker Percival in 2011 for alleged shortcuts taken by the company in completing background checks for the government.
"The United States brings this civil action to recover treble damages and penalties under the False Claims Act, 31 U.S.C. §§ 3729-33 (FCA), and to recover damages and other monetary relief for breach of contract. This action arises from false statements and claims that Defendant U.S. Investigations Services, Inc. (USIS) knowingly presented to, or caused to be presented to, the United States and the United States Office of Personnel Management (OPM) related to background investigations that were not reviewed in accordance with the requirements of the parties' contracts, in violation of the FCA and the common law," the complaint read.
Under the False Claims Act, if proven guilty, the USIS owes the government treble damages as will be determined by court plus penalties of as much as $11,000 per violation. That is just for the false statement part of the case. Additional damages will have to be paid for its breach of contract.
Dump it like a goldfish or an ugly baby
According to the court filings, the USIS management was aware and is responsible for the dumping of incomplete background investigations. Starting as early as 2008, the chief financial officer of the company was the one who made the call with regard to the number of cases that should be dumped to meet revenue goals. The number of cases to be dumped are then relayed through the chain of management and operations until the dump is executed.
"The only two things we can do in review to get them out faster is to (a) hire or (b) dump....Come EOM [End of Month], if they're going to tell us to just dump all those cases anyways without a proper review, which [sic] will only make that ugly baby even uglier...," an email of USIS' director of national quality assurance read in the court filings.
Another email addressed to the quality control manager and director of national quality assurance from the workload leader of USIS further revealed the scheme: "Shelves are as clean as they could get. Flushed everything like a dead goldfish."
Aside from dumping background investigations manually, the company also made use of a software called BlueZone that marked files as completed reviews and even made dumping easier.
"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. 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. 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 said in a statement. The motto of the company is "Ensuring a safer future today."
Calls for Accountability
However, the U.S. Government is not convinced and the government agencies are aghast with the actions of USIS. They are determined to convict those responsible for the committed fraud and breach of contract.
"We will not tolerate shortcuts taken by companies that we have entrusted with vetting individuals to be given access to our country's sensitive and secret information. The Justice Department will take action against those who charge the taxpayers for services they failed to provide, especially when their non-performance could place our country's security at risk," said assistant attorney general Stuart Delery of the Civil Division of the Justice Department.
The OPM (Office of Personnel Management) also wants to bring the culprits to justice.
"As recent events have shown, it is vital for the safety and security of Americans to have these background investigations performed in a thorough and accurate manner. We can accept no less. Those responsible for any malfeasance that compromises the integrity of the background investigations process must be held accountable," said OPM inspector General Patric McFarland.
According to Bloomberg Businessweek, USIS secured a $253 million worth of work with the OPM for the fiscal year 2012.
USIS is also the company that investigated the background of defense contractor Aaron Alexis, who was involved in a shooting spree, killing 12 individuals, at the Navy Yard in Washington in September.
