The federal government is seeking billions of dollars in penalties and damages from the company that did the background check on National Security Agency leaker Edward Snowden.
In a 25-page complaint, the Justice Department said that U.S. Investigations Services, the largest of several firms that have government contracts to investigate current and prospective federal employees, lied about 665,000 checks it conducted between March 2008 and September 2012.
USIS devised an elaborate scheme in which the Falls Church, Va.-based company told the government it had completed probes of people whose backgrounds, in fact, had not been thoroughly vetted, according to the complaint, which was filed Wednesday in a federal district court in Alabama as part of an ongoing civil lawsuit against the firm.
USIS set production quotas – monthly, quarterly and annual targets – and then used a process of “dumping” or “fishing” to submit incomplete background reports in order to meet the quotas, the Justice Department said. The firm used a software system called Blue Zone to help run the fraudulent reports, according to the complaint. It said the U.S. government’s Office of Personnel Management relied on the reports to pay USIS.
“Due to its fraudulent conduct, USIS received millions of dollars that it otherwise would not have received had OPM been aware that the background investigations had not gone through the quality-review process required by the fieldwork contracts,” the Justice Department said in the complaint.
The OPM oversees employment background checks and investigations for security clearances granted to federal employees. It does some of its own probes but hires USIS and other firms to do most of them.
USIS received more than $2 billion from the OPM to conduct security checks in the 4 1/2-year period covered by the Justice Department brief, according to usaspending.gov, a government website that compiles federal contracting data.
Ellen Davis, a USIS spokeswoman, said in a statement that the alleged fraudulent behavior was limited to “a small group of individuals” and runs contrary to the company’s “values and commitment to exceptional service.”
While the government doesn’t say that USIS submitted a phony security check on Snowden, that check was purportedly completed in 2011 during the period covered by the Justice Department brief.
The 665,000 allegedly phony background checks represented 40 percent of all such checks conducted by USIS in that time period for the federal government, which means the chances are two in five that Snowden was not thoroughly vetted while working as a computer security contractor for the NSA.
The government also hired USIS to do the security check on Aaron Alexis, another contract employee, who shot and killed 12 people Sept. 16 at the Washington Navy Yard.
Snowden pirated huge caches of classified digital data from the NSA and leaked them to news organizations before fleeing the country for Hong Kong last May. He now lives in Moscow.
The Snowden leaks revealed that the NSA swept up phone and Internet records of Americans and foreigners, among them leaders of other countries. President Barack Obama promised last week to reform the NSA surveillance program, which was designed to combat terrorism, but he provided few specifics.
Sen. Claire McCaskill, a Missouri Democrat who chairs a key Senate subcommittee on contracting oversight, said she and Sen. Jon Tester, a Montana Democrat, are pushing legislation to tighten OPM control of the firms it hires to conduct background checks.
“By now, the stunning failures of this company (USIS) and the resulting threats to our national security are well-documented,” McCaskill said. “But we can’t wait for the next disaster before tackling something as serious as lapses in protecting our nation’s secrets and our secure facilities.”
The McCaskill bill has passed the Senate, and the House of Representatives has approved a similar measure. They must be merged into unified legislation, passed again by both chambers and signed by the president in order to become law.
USIS executives joked about defrauding the government, according to internal company emails obtained by the Justice Department and contained in its brief.
“We all own this baby, and right now this is one ugly baby,” the firm’s vice president of field operations wrote in one email, according to the Justice Department.
Greg Gordon, Michael Doyle and James Asher contributed
By James Rosen
McClatchy Washington Bureau