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Justice Department: Firm that vetted Snowden, Navy Yard shooter cheated government

- The Washington Times - Thursday, January 23, 2014

Even as the federal government’s largest contractor for background-security checks was bilking taxpayers out of millions of dollars, it was getting big performance bonuses from the agency overseeing its work, the Justice Department said in a new court filing this week.

Contractor USIS received $11.7 million in performance awards from the Office of Personnel Management from 2008 to 2010, the Justice Department disclosed in a civil complaint against the company.

The department accuses USIS of cheating the government out of millions of dollars by claiming it completed about 650,000 background investigations — 40 percent of its workload — that actually remained unfinished.
The Justice Department said USIS officials referred to the practice of filing incomplete investigations as “flushing” or “dumping.”

“USIS engaged in the practice of dumping in order to meet budgeted goals and, therefore, increase its revenue and profits,” Justice Department attorneys James Dubois and Melissa Handrigan wrote in the complaint.
The dumping occurred at the company’s western Pennsylvania facility, the government charged.

The Falls Church-based USIS performs the bulk of background checks for federal agencies. It drew scrutiny for its work in the cases of Navy Yard shooter Aaron Alexis and National Security Agency leaker Edward Snowden, though neither figured into the government’s civil-fraud charges.

USIS spokesman Patrick Scanlan said the allegations related to “a small group of individuals over a specific time period” and were “inconsistent with the strong service record we have earned since our inception in 1996.”

Mr. Scanlan said the company has cooperated with the Justice Department, appointed new leadership and enhanced oversight procedures.

“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,” he said.

OPM’s newly named director, Katherine Archuleta, called the case “an egregious violation of public trust” and said the agency was conducting its own reviews while cooperating with the Justice Department.

“It is important to reiterate that all of the cases went through subsequent quality reviews after they were ‘dumped’ by USIS and before they went to the agency for adjudication,” she said. “In addition to removing USIS employees from the contract, OPM has already implemented a number of reforms to our contracting oversight and operations to strengthen the process.”

The complaint, filed in Alabama in a federal whistleblower lawsuit, charges that USIS “received millions of dollars that it otherwise would not have received.”

Sen. Claire McCaskill, chairwoman of a Senate subcommittee that has been looking into how the government vets contractors and employees, said Thursday that the company’s “stunning failures” already have been well-documented.

“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,” said the Missouri Democrat, who has introduced legislation to beef up government background-check procedures.

The Justice Department complaint also revealed how USIS received big bonuses in addition to the regular payments for each background check it conducted.

The company earned nearly $6 million in bonuses during 2010 alone. OPM based the payouts on factors that included timeliness, quality and program management, according to the complaint.

“The decision to award a bonus, and the amount of that bonus, was entirely within the discretion of OPM,” Justice Department lawyers wrote.

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