Snowden’s vetting agency tied to fraud, listed dead man as client

A big story that received little attention on Monday was a report by Bloomberg News that the contractor that performed the background check on Edward Snowden has repeatedly faced charges of fraud and submitting false reports to the federal government, even claiming that they had vetted a man who had been dead for a decade.

As federal officials and lawmakers scrutinize the vetting process, they are learning that contractor-screeners are engaging in illegal activities as they approve government job applicants

for security clearances.

Virginia-based USIS, a firm that conducts about half of the background checks on federal employees, vetted Snowden and has also been at the center of federal probes.

“The process for granting security clearances across the federal government is broken,” Sen.  Ron Johnson of Wisconsin, the top Republican on a Senate panel overseeing government contracting, told Bloomberg.

Some 20 background investigators have pleaded guilty or have been convicted of falsifying reports since 2006, according to the Bloomberg story. Half of them worked for companies such as Altegrity Inc., which performed the background check on Snowden, the infamous national-security contractor who leaked classified information to the press.

Bloomberg is reporting that those 20 cases may represent a fraction of the fabrications in a government vetting process with little oversight, according to lawmakers and U.S. watchdog officials.

Passing a “government” background check is a requirement before an employee or contractor can be granted a security clearance to access classified information. But the background checks are outsourced, conducted by contract workers, not the government. The process has been under increasing scrutiny since Snowden, a former NSA contractor who had worked for Virginia-based Booz Allen Hamilton , leaked secret documents and then fled the country.

USIS, the government’s No. 1 provider of such work with $253 million in contract awards this year, is under investigation by an inspector general who has said there may have been shortcomings in the company’s vetting of Snowden.

It appears that the age-old problems associated with privatization and government contractors – emphasizing volume over quality, and cutting corners to boost profits – is a recurring problem even with a basic service such as providing security clearances.

Among the 10 background-check workers employed by contractors who have been convicted or pleaded guilty to falsifying records since 2006, eight of them had worked for USIS, according to the inspector general for the U.S. Office of Personnel Management. The personnel agency is responsible for about 90 percent of the government’s background checks.

In one case, a USIS screener admitted submitting 1,600 falsified reports to the government regarding security clearances she had granted.

In another case, Bloomberg reports, a 25-year-old contract worker conducting background checks for the feds pleaded guilty in August 2009 to falsifying one out of every three credit checks she performed during an 18-month period.

Demonstrating just how widespread the problem is, investigators also discovered that the screener who vetted the guilty woman and initially gave her a security clearance so she could be hired also had been found guilty of fabrications in the past and was convicted of fraud.

Patrick McFarland, inspector general for the personnel office, told a Senate committee recently that his office lacks the funds needed to conduct thorough probes.

There may be “considerably more” botched background investigations, McFarland told the senators. “I don’t believe that we’ve caught it all by any stretch.”