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Firm accused of fudging background checks

Jan. 23, 2014 - 06:00AM   |  
By SEAN REILLY   |   Comments
Computer Hackers Gather For Annual CCC Congress
A company that the government hired to perform background checks stands accused of falsifying hundreds of thousands of them. (Patrick Lux / Getty Images)

USIS, the government’s largest supplier of security clearance background investigations, cut corners on hundreds of thousands of such checks, the Justice Department alleges in a newly filed civil complaint.

From March 2008 through September 2012, the Virginia-based firm sent the results of at least 665,000 investigations to the Office of Personnel Management that had not undergone contractually required quality reviews, according to the complaint, filed Wednesday in federal district court in Alabama. That figure represented about 40 percent of the total number of investigations conducted by USIS during that time.

The practice, known within the firm as “dumping,” was geared to boost revenue and help USIS win performance bonuses that totaled almost $12 million from fiscal 2008 through 2010. Had OPM known what was going on, it would not have deemed USIS’s performance acceptable, the complaint states. The suit seeks damages to be decided at trial, plus at least $5,500 for each fraudulent claim.

In a written response, USIS — formerly known as U.S. Investigations Services—said that the accusations related to a small group of individuals and ran contrary “to our values and commitment to exceptional service.” Since first learning of the alleged misconduct almost two years ago, the company had named a new leadership team and beefed up oversight procedures, the statement said, adding that USIS has fully cooperated with the government probe and remains “focused on delivering the highest quality service under our OPM contract.”

OPM has made no decision on debarring USIS pending ongoing investigations, according to a spokesman. The agency has already strengthened contractor oversight and is conducting added reviews to reassure the public “that they can have confidence in the integrity of our program,” Director Katherine Archuleta said in a statement. Cases dumped by USIS later got quality reviews before decisions were made on granting clearances, she said.

USIS, is the largest of three contractors that do background checks for OPM. The Justice Department complaint comes three months after it joined a whistleblower lawsuit filed by Blake Percival, a former USIS director of fieldwork services. In the suit, Percival charged that the firm defrauded the government by forwarding cases to OPM that had either not undergone a contractually required review or “had not been investigated at all.”

Dumping aimed to maximize revenue because USIS is paid about $1,900 for every investigative report turned in to OPM before the next-to-last day of the month and just 75 percent of that amount thereafter, Percival alleged. When Percival refused to order his employees to continue dumping, he was fired in June 2011, according to his suit.

USIS has also come under scrutiny because it did the background checks both for Edward Snowden, the former National Security Agency contractor who has furnished details of highly classified program to the media and Aaron Alexis, a former Navy reservist who gunned down a dozen people at the Washington Navy Yard last September before being killed by police. In the latter case, OPM has said that it believes that the check on Alexis was complete and fully complied with investigative standards.

The background investigations that were dumped covered most agencies including the Defense Department, Defense Intelligence Agency, Justice Department and Department of Homeland Security, according to the DOJ complaint. USIS management was well aware of the practice, emails cited in the complaint indicate.

“Shelves as clean as they could get,” one supervisor said in an April 2010 email. “Flushed everything like a dead goldfish.”

The firm also sought to conceal the alleged misconduct from OPM, such as by stopping all dumping when auditors were on the scene. An OPM spokesman had no immediate comment Thursday when asked whether the agency is considering any action in light of the Justice Department complaint.

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