DOJ Says Company That Vetted Snowden Faked 665,000 Background Checks

from the well-of-course dept

Mon, Jan 27th 2014 9:48am — Mike Masnick

When we last checked in on USIS, the contracting firm which large parts of the federal government and the intelligence community used to conduct background checks on employees (including Ed Snowden), we noted that it had been caught falsifying reports and claiming to have interviewed dead people. At the time, we noted at least one USIS employee had been accused of submitting 1,600 falsified credit reports. But, apparently, the story goes much, much deeper. The DOJ is now accusing USIS of faking background checks on 665,000 federal employees.

Not only that, but the practice of scamming the government seems to have been the official policy of the organization, clearly described in various emails. Basically, USIS was paid based on each completed background check, and realized it was a lot more profitable to "complete" them by not doing most of the actual work (pricey!) and just take the money (profits!).

Beginning in at least March 2008 and continuing through at least September 2012, USIS management devised and executed a scheme to deliberately circumvent contractually required quality reviews of completed background investigations in order to increase the company’s revenues and profits. Specifically, USIS devised a practice referred to internally as “dumping” or “flushing,” which involved releasing cases to OPM and representing them as complete when, in fact, not all ROIs comprising those cases had received a quality review as required by the Fieldwork Contracts.

USIS engaged in the practice of dumping in order to meet budgeted goals and, therefore, increase its revenues and profits. Given that USIS was paid by OPM for each completed case, the more cases USIS completed each month the more money it received from OPM. USIS’s dumping practices also enabled the company to receive annual performance incentive payments that it would not otherwise have been entitled to receive absent the dumping

Oh, and it became so profitable, they set up a computer program to help them defraud the government and not complete background checks. No joke.

Initially, USIS would dump cases manually. Soon after the dumping started, however, USIS began using a software program called Blue Zone to assist in the dumping practices. Through Blue Zone, USIS was able to identify a large number of background investigations, quickly make an electronic “Review Complete” notation indicating that the ROIs at issue had gone through the review process even if they had not, and then automatically release all of those ROIs to OPM with the “Review Complete” notation attached. By using Blue Zone, USIS was able to substantially increase the number of background investigations that could be dumped in a short time period.

You have to hand it to them. Not only did they figure out how to scam the government, they sure as hell did it efficiently. That's the American spirit at work!

In fact, it appears this became a key part of how USIS worked. Originally, it would only "dump" unfinished cases at the end of each day if it was behind schedule. But, later it realized it could get paid more by dumping these cases repeatedly during the day. No need to build up a queue, just dump... and get paid.

The DOJ also has emails showing that senior management was well aware this was going on and even participated or encouraged the activity.

Internal USIS documents confirm that USIS Senior Management was aware of and directed the dumping practices. For example, in one undated internal document, a USIS employee discussing the dumping practices stated: “They will dump cases when word comes from above, such as from [the President of Investigative Service Division] and [the President/CEO]. In the past, [the President of Investigative Service Division] and [the President/CEO] have told us to clear out our shelves in order to hit revenue. When this is done they will dump all [priority code] 6. If [the President of Investigative Service Division] and [the President/CEO] tell them they need to clear out more then they will dump [priority code] 5’s.... Last July through September we were dumping all [priority code] 4, 5, and 6’s per [the President of Investigative Service Division] and [the President/CEO].”

Another email chain dated September 16 and 17, 2010 involving USIS’s Vice President of Field Operations and its President of Investigative Service Division, among others, discussed the need to dump cases to meet revenue goals. The Vice President of Field Operations referenced USIS’s revenue situation as “[w]e all own this baby, and right now we are holding one ugly baby.” The USIS Workload Leader in Western Pennsylvania forwarded that email to the Director of National Quality Assurance and the Quality Control Manager in Western Pennsylvania and responded: “The only two things we can do in review to get them out faster is to (a) hire or (b) dump.... I don’t know if there’s any other levers left to flip other than dumping everything we know is bad. Just a side note, the more MSPC [Master Scheduling Production Control] rams through, the more the field will transmit sub-standards, and the more [the number of cases needing secondary review] will go up. 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...”

There's also an email in which a "Workload Leader" tells the top "quality" assurance execs:

"Shelves are as clean as they could get. Flushed everything like a dead goldfish."

Oh, and another:

"t'is Flushy McFlushershon at his merry hijinks again!! **leprechaun dance**...I'm not tired..."

So, remember, folks, when Senator Dianne Feinstein insists the NSA would never abuse your privacy because they're professional, just realize that many of those "professionals" might not have actually gone through a background check, because it was taking away profits from a private contractor to actually do its job.

USIS Complaint (PDF)USIS Complaint (Text)

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Filed Under: background checks, doj
Companies: usis

56 Comments

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That One Guy (profile), 27 Jan 2014 @ 8:18am

So...
'Extensive oversight', huh? /s

It was so widespread in the company they were cracking jokes about it, and the government only now finds out about it? Sounds like they owe Snowden for yet another thing, as I doubt this would have been uncovered if his actions hadn't caused them to more closely examine the various programs, though I'm sure they'll instead just get even angrier at him, since by NSA cheerleader logic the problem 'didn't exist' when people didn't know about it.

And of course the big question is, 'Now what?'

The company has been caught falsifying background checks, background checks on people that were then hired into sensitive, secure government positions, positions that have access to classified, valuable, or otherwise sensitive documentation/information, and assuming the government doesn't just try and brush it under the rug(which I fully expect them to do), that means they're going to have to pay, again, to have all those people checked again(though hopefully by another company this time), so what penalty is the company going to face?

Personally I expect there to be a decent amount of noise without substance, a good amount of fake outrage, and maybe a few lower ranked employees thrown under the bus as examples, while all the higher ups remain untouched, or perhaps 'resign'(with huge bonuses of course), without a single one of them facing charges for their actions, because once you're rich enough, and/or have the right connections, the law just doesn't apply to you anymore in this(and several other) country.
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Ninja (profile), 27 Jan 2014 @ 8:36am

Add it to the ocean of reasons why bulk collection of data should not be allowed....
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silverscarcat (profile), 27 Jan 2014 @ 9:42am

I'm sure they are professional.
After all, there's professional hitmen and professional criminals, so, I'm pretty sure that the people working for the NSA are the very definition of Professional.

Professional what, on the other hand, I don't know.
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Violynne (profile), 27 Jan 2014 @ 9:51am

Finally! The final step has been discovered!

1. Make background check to government.
2. Lie to government. (formerly ???)
3. Profit!

And it only took this long for government to figure it out.

I don't know what's worse, really.
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Geno0wl (profile), 27 Jan 2014 @ 9:55am

Not to purposefully make this political but...

isn't stuff like this exactly what Libertarians say WOULDN'T happen in a pure and free economy?
If we didn't have any centralized group controlling things, problems like this would be even more wide spread with maybe little chance of catching them.
People are greedy assholes who will suck at the overly large teet of the government. Because they can get away with it.
I still stand by the statement that the inherent size of "our" government isn't inherently the problem. The problem comes from the complete lack of accountability at basically every level.
Act like this is a big news story(which is very well should be) but in a week this will be replaced with Biber getting prole, the next Zimmerman, or the Super Bowl. There is no accountability because we the people as a whole don't ask for it.
That is the biggest shame of them all.
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Anonymous Coward, 27 Jan 2014 @ 9:59am

The US Gov is all about letting corporations "maximize profits" off it's citizens, but the second it happens to them, suddenly it's a "bad" thing.

I find it ironic that the USIS executives, had all the contents of their emails recorded. Didn't the US Gov said they only look at "metadata", not the "contents" of communications?

More lies!
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Internet Zen Master (profile), 27 Jan 2014 @ 10:00am

Regardless of what you think of Snowden
It can't be denied that his decision to blow the whistle on the NSA uncovered more and more corruption, feels like a rather pleasant side effect for something that's "jeopardized national security".

At the very least, now the NSA will (hopefully) be getting new employees that deserve their security clearances in the future (Granted, from a government standpoint, they should just drop all contracting work from the intelligence community altogether and keep everything in-house, but that's not likely to happen any time soon).

Of course, this assumes the DOJ is actually going to go after the US IS and it's execs, and not let them slip away unharmed like they've done so far with the scumbags over in Wall Street.

As the Zen Master says, "We'll see."
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Michael, 27 Jan 2014 @ 10:01am

but the practice of scamming the government seems to have been the official policy of the organization, clearly described in various emails

You would think that the organization collecting all communication via email and telephone would have checked these out BEFORE selecting them as a contractor.
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Michael, 27 Jan 2014 @ 10:06am

The DOJ is now accusing USIS of faking background checks on 665,000 federal employees.

I don't really want to defend a company that has been lying to the DOJ about a program they were running that was illegal, unscrupulously hidden from them, and not in the best interest of the people of the United States, but didn't the DOJ sort-of say that this kind of behavior was ok when they did the same thing to Congress?

Pot -> Kettle...
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Trevor, 27 Jan 2014 @ 10:06am

Hehe
Does anyone else see the irony here?

The government hires USIS to perform background checks on its employees. The USIS sends emails about not doing it's job, and it's only AFTER the Snowden leaks that the NSA finds out.

now the DOJ miraculously has emails incriminating the USIS. Interesting.

It's not that they didn't have enough information, it's that they didn't connect the dots. Again. (the NSA presumably had all of USIS's emails the whole time!)

Dang, Snowden is helping more people than he could have ever realized, INCLUDING the NSA!
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Anonymous Coward, 27 Jan 2014 @ 10:19am

They were looking for Snowden's background check I bet and the only way to they can try to prove him to be a bad person was to recheck his background , It'll come out that he was on the flushy list so they can try to curtail his professionalism.
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That Anonymous Coward (profile), 27 Jan 2014 @ 10:20am

Oooh oooh oooh I want to get in on this one early.
Bets on the company and individuals facing less charges and time then that guy who taught people to "pass" lie detector tests?
Betcha the company will skate, as they have enough money to confuse the case and DoJ could lose... so they will be adverse to bringing it forward.
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BentFranklin (profile), 27 Jan 2014 @ 10:21am

Re:
"The problem comes from the complete lack of accountability at basically every level."

There is no accountability because the people who should do the oversight don't do it and then they defend the people they should have been overseeing because to admit they were scammed is to admit they didn't do their job.

I'm talking to you Dianne Feinstein and Mike Rogers!
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DannyB (profile), 27 Jan 2014 @ 10:24am

An obvious and easy way to prevent this
There is a simple way to prevent this from happening again.

Next time you are looking for a contractor to do background checks to vet people, first hire a contractor to vet the contractors you propose to hire.

Then you could take that to the next level. A contractor to vet a contractor to vet a contractor to vet people. Etc.

It helps eat up unspent budgets. It helps create jobs. It does things in the correct bureaucratic way. What's not to like?
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Magical Mimi, 27 Jan 2014 @ 10:24am

I guess this is why the government needs to keep tabs on just what the people they pay to do stuff are doing

Then again, odds are if they tried to do that, they'd just hire some outside company to do it, and the company would just claim they're doing it while actually just pocketing the money.

So maybe they could hire USIS to keep an eye on USIS to make sure that USIS is doing the job they're being paid to do?
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Michael, 27 Jan 2014 @ 10:27am

Re:
There is someone at the DOJ right now deciding if they should move forward on a case against the company that failed to find the skeletons in their closet when they started working at the DOJ.
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Seegras (profile), 27 Jan 2014 @ 10:27am

Re:
And why wouldn't it happen in a free economy? I don't see any hindrance there, except of course, that the government decided to outsource something it shouldn't have in the first place, and which it could only outsource because the lax privacy laws allowed it.

If private data about citizens is kept private, a company can't just "do background checks", because it won't get any. So the government has to do it itself. Which it should do anyway, because this is about clearances to secrets.

Which brings me to another point: classifying is completely broken. If you need 2 million people with "secret" clearances (and those people need them, lest they can't do their jobs), there is something seriously wrong with what _the people_ allow the government to "classify".

Overclassification is the enemy. The solution is to be transparent, and if you're embarrassed about blatantly fostering the agenda of the MPAA via your consulates, then don't friggin do it!
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DannyB (profile), 27 Jan 2014 @ 10:30am

Maybe certain jobs should NEVER be done by contractors?
It sounds like outsourcing gone amok.

How about outsourcing the military to contractors? I mean all of it.

Get rid of the children in congress and hire contractors to do their jobs. (And let them tele-commute from China to save costs)

Contract out the job of president?
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Anonymous Coward, 27 Jan 2014 @ 10:32am

/s
sounds legit
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Anonymous Coward, 27 Jan 2014 @ 10:43am

So that is how they won the bid.... being the lowest but with no varification they actually did the required work.

There is aways a reason why someone is the lowest bid.
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Anonymous Coward, 27 Jan 2014 @ 10:44am

Re: Hehe
I was thinking something along those same lines. How exactly did they get the "internal USIS documents"? Did they simply ask them for them or did they just have someone steal them? So taking internal documents that show impropriety from an entity and then releasing them to expose that impropriety is okay when the entity is someone else but when someone takes their documents to prove their impropriety, then they get pissed and want him murdered for it. Pot & Kettle.
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Roland, 27 Jan 2014 @ 10:47am

Great!
I think this means 665,000 analysts and the like will have to sit in a room and not do intelligence work until they can be granted legitimate clearances. That is bound to slow down the surveillance state, at least for a while. The alternative is for the bureaucracy to admit these clearances really don't mean anything anyway.
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Anonymous Coward, 27 Jan 2014 @ 10:49am

WTF?
NSA never heard of the old saying "Trust, but verify?"
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Capt ICE Enforcer, 27 Jan 2014 @ 10:53am

Great
So why does the NSA outsource their employee background check when they say they know everything about everyone for years.
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mr. sim (profile), 27 Jan 2014 @ 10:58am

too bad this won't spur lawmakers to close loopholes in the law allowing corporations to be severely punished when they do this kind of thing.
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Anonymous Coward, 27 Jan 2014 @ 11:22am

Still working for the NSA?
It seems like the NSA owes Snowden a consulting fee, at least.
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ltlw0lf (profile), 27 Jan 2014 @ 11:24am

Re: WTF?
NSA never heard of the old saying "Trust, but verify?"

Sadly, the NSA has nothing to do with this, other than having one known contractor who was vetted by USIS (as well as the Navy Yards shooter.)

USIS was a contractor for the U.S. Office of Personnel Management (OPM), which performs background checks required for security clearances for *ALL* Federal employees (including those who work at the NSA.) [Source NBC Article linked to above.]
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Jay (profile), 27 Jan 2014 @ 11:31am

Re: Re:
Okay, but who parts them to look the other way? That's the part that's missing...
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Anonymous Coward, 27 Jan 2014 @ 11:33am

And that is why when you say that your military costs billions, we just laugh.
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ltlw0lf (profile), 27 Jan 2014 @ 11:36am

Re: Re: Hehe
I was thinking something along those same lines. How exactly did they get the "internal USIS documents"?

I suspect, based on my very limited experience here, the DoJ discovered a bunch of questionable background investigations and decided to subpoena the company for any internal documents relating to the process of performing background checks. The company, instead of pulling a Enron (shredding the documents,) decided it was in their best interest to come clean and cooperate (especially, since, they say that all of the employees involved have been fired or no longer work for the company.) It is entirely possible that someone within the company blew the whistle, but not necessarily so (the article doesn't say whether the whistle was blown or whether it was a result of a subpoena.)

So taking internal documents that show impropriety from an entity and then releasing them to expose that impropriety is okay when the entity is someone else but when someone takes their documents to prove their impropriety, then they get pissed and want him murdered for it.

I see where you are coming from, but at least in this place it can be that they didn't actually release them, but they were attached to a subpoena which is public records as part of a court case. The civil lawsuit was already filed against the USIS by the DoJ in Alabama, and except in certain cases, most lawsuits and their associated documentation are available to the public.
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Jay (profile), 27 Jan 2014 @ 11:37am

Re: Re: Re:
Parts = pay

Gah! Spellcheck!
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ltlw0lf (profile), 27 Jan 2014 @ 11:38am

Re: Re: Re: Hehe
the article doesn't say whether the whistle was blown or whether it was a result of a subpoena.

Oops...missed that part. From the article:

The civil lawsuit was filed by the Justice Department under the False Claims Act. The department adopted claims previously made under seal by Blake Percival, identified as the director of Fieldwork Services at USIS between 2001 and 2011. The suit accuses the company of filing false claims, making false statements and breach of contract.

Percival originally filed a whistleblower lawsuit in 2011 alleging that the Northern Virginia-based firm expedited checks in bulk using the �Blue Zone� software on checks that were never actually performed, according to the DOJ complaint.

So yes, a whistleblower was involved.
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Anonymous Coward, 27 Jan 2014 @ 11:56am

i dont believe it! a company in the Governments employ doing something illegal? whatever next?
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krolork (profile), 27 Jan 2014 @ 12:29pm

We need a revolution.
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ofb2632 (profile), 27 Jan 2014 @ 12:38pm

Stop picking on those misunderstood People!!
Why even complain when you know its all a big mistake and USIS really didn't mean to do anything illegal. I'm SURE all of the millions they made in the process went to the poor and charities. You cannot convince me that USIS are not complete angels. I'm sure they are in the running for a new and improved Govt. contract that will make them even richer!
Don't worry about sending them to jail because when they finally respond to the public, it will be to say 'i am deeply sorry for taking your taxpayer money and buying this new house'. If they don't keep a straight face, i'm sure its because they heard a good joke just moments before, and not because they think the Govt is a joke and the taxpayers deserve to be ripped off.
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Chris ODonnell (profile), 27 Jan 2014 @ 12:38pm

I live in the DC area and have sat through security interviews for my neighbors countless times. The quality really varies. We've had actual FBI agents show up at the door. However, usually it's a contractor, probably USIS. The "investigators" are young kids, likely in their first job out of college. They roll through their list of questions, barely listening to the answers, just trying to check off the interview as done so they can move on to the next one.

It's no way to run a security organization.
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FM Hilton, 27 Jan 2014 @ 1:03pm

Next?
So we're given the information that the USIS was performing fraudulent background checks, and billing for it.

Of course we won't go into the number of people they passed as being 'clean' and who are actually convicted criminals..no, that would be too uncomfortable to think about.

Your tax dollars at work!
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Anonymous Coward, 27 Jan 2014 @ 1:24pm

Im sorry, but, who does the data involved in background checks belong too again

Like it or not, you cant have just a lil bit of freedom or a lil bit of security, between the two, its one or the other, both have benefits, both have cons, with freedom, you may lose security in the scale we have today, with security you may lose freedom in the scale we had in the past
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John Pettitt (profile), 27 Jan 2014 @ 1:34pm

You'd think the NSA would know this.
NSA collects emails -> there are emails detailing fraud on the NSA -> the NSA doesn't notice.
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ECA (profile), 27 Jan 2014 @ 1:45pm

Anyone know?
HOW you verify that a background check has been DONE??
CALL the references..On a random selection of those people hired..

WHO would depends on 1 company to DO ITS JOB?
But we have fired so many people that WERE doing jobs, in the gov(all the lower peons) that there is no one to DO THE JOBS..
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Coyne Tibbets (profile), 27 Jan 2014 @ 1:47pm

Big Implications
When do we suppose the government will start prosecuting those 665,000 people for espionage? They've all seen secrets without proper authority.
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Trevor, 27 Jan 2014 @ 1:58pm

Re: Re: Re: Re: Hehe
That just makes it so much better.

The only reason the NSA found out was because of whistleblowers.

AWESOME
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Anonymous Coward, 27 Jan 2014 @ 3:10pm

Re: Great!
It doesn't say all those people are working at the NSA. They could be military contractors, FBI agents, ATF agents, Department of Homeland Security people...
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ltlw0lf (profile), 27 Jan 2014 @ 4:54pm

Re: Re: Re: Re: Re: Hehe
The only reason the NSA found out was because of whistleblowers.

The only way the DoJ found out was because of whistleblowers. Again, the NSA has nothing to do with this story other than they had a contractor who was reviewed by USIS and then allegedly blew the whistle on NSA (we all know he did, the allegedly is clearly here for legal reasons.)

That and also clearing the Navy Yards shooter, who was clearly having mental issues, and the dozen or so Federal employees with financial conflicts such as not paying their taxes for a number of years.
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Anonymous Coward, 27 Jan 2014 @ 4:57pm

Some national security this provides. For all I know the government is filled with spies but because background checks were never actually done ...
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devonavar (profile), 27 Jan 2014 @ 6:33pm

Response to: Anonymous Coward on Jan 27th, 2014 @ 4:57pm
That was my first thought as well. It's a near certainty I'd say.
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Anonymous Coward, 27 Jan 2014 @ 10:04pm

Re:
Private collectors failing to collect sufficient data on secret en masse data collectors...

...spying into both public & encrypted comms

.....of as many dangerous crims as harmless grannies.

Hell it's no surprise lines got (perhaps inextricably) crossed.
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Anonymous Coward, 27 Jan 2014 @ 10:24pm

Re: Re:
Gen0wl is pointing to the issue of leaving competitive markets to fight over government contracts.

In the case of background checks for the NSA, the USIS might have been the most efficient & cost effective player -- but primarily because they were half-arsing the job & nobody audited, noticed, reported, cared enough, put their neck out.

Over-classification? Over-simplification. What if the NSA had exactly 2 buckets (announcements Vs secrets) and only 2 employees are doing all the classifying -- now, do you care that you still don't get to know the size of the bucket labelled Secrets, nor how those 2 folks do their secretive job? Do you care whether or not your government gets to peer at the secrets "sometimes" (we wont say exactly when) without first obtaining a warrant? Do you care that some secrets are classified as forever-secrets? Whether we can or cant announce examples of how "secret keeping" has safe lives?

When we blend public-surveillance with targeted-surveillance, then the deep-dark secrets become less concerning than the deeper-darker secrecy surrounding the the necessary gagging and self-serving psychology of employees within NSA, FBI, other US government departments (and their "partners" like USIS) etc etc etc.
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Anonymous Coward, 27 Jan 2014 @ 10:28pm

Re:
Knowing the contents of such emails neednt = spying.

Private firms keep all emails in case there's a law suit, they might need to reveal (to a court) who know what when.
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Anonymous Coward, 27 Jan 2014 @ 10:32pm

Re:
At that point in time they were clean.

The article says efficiencies (read: corruption) crept in.

Due to corporate greed.

I think I saw this movie before, circa 2008, or it was a dream because I don't recall the ending where the greed-is-good characters get their comeuppance.

Zzzzzz...
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Anonymous Coward, 28 Jan 2014 @ 1:57am

You sure you got the name right?
Sounds more like ISIS https://www.youtube.com/watch?v=iUC6ttHEdF4
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btrussell (profile), 28 Jan 2014 @ 2:15am

Re: An obvious and easy way to prevent this
Or you could do it yourself, but then you would have to take responsibility and today's governments are all about passing the buck and avoiding any and all responsibility.
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Pragmatic, 28 Jan 2014 @ 6:12am

Re:
Thank you, Geno0wl. This is why I often get into arguments with them. In the purest, biggest-L sense, they are basically anti-communist. Since they are doing the polar opposite of communism without actually thinking it through, they make the same intellectual failures as any ideologue makes, which is to assume that everyone on their team, if they stick to "the plan," can't go wrong.

This means that evidence of ideological purity is conflated with moral purity followed by frantic denial and squeals of indignation when human nature makes itself clear, i.e. if a situation can be abused, it will be.

For this reason I am skeptical that any one ideology can, by itself, when "properly" put into practice, save us. Life just doesn't work that way.
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jsf (profile), 28 Jan 2014 @ 7:20am

Profit Above All
This is what you get when you outsource the running of the government to for profit companies. Of course those companies are going to put profit before anything else. It is their entire reason for existing.

Sure government is bureaucratic and slow, but for some things, like background checks and security clearances, that is exactly what you want. The old school, cold war era security agency guy must either be cringing or spinning in their graves.
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@blamer, 29 Jan 2014 @ 4:18pm

Re: Response to: Anonymous Coward on Jan 27th, 2014 @ 4:57pm
National security,
Internal checks-and-balances,
Wholesale surrendered,
To contractor cheques and bank balances.
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Sunhawk (profile), 30 Jan 2014 @ 12:26pm

Re:
Feels like one of those old spy vs. spy comics...
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