US contractor that vetted Snowden is probed by watchdog

Washington: A company that conducted a 2011 background investigation into Edward Snowden, the source of recent leaks about US secret surveillance programmes, is itself under investigation, it was revealed at a congressional hearing on Thursday.

Patrick McFarland, the inspector general for the US Office of Personnel Management, said his office is probing USIS, a Falls Church, Virginia-based company that specializes in providing information and security services to government agencies.

McFarland told the homeland security subcommittee hearing that there are concerns that USIS may not have carried out its background check into Snowden in an appropriate or thorough matter. "Yes, we do believe that there - there may be some problems," McFarland told the hearing.

Senator Claire McCaskill described the probe as a criminal investigation into allegations that USIS systemically failed to adequately conduct investigations under its contract.

A USIS spokesman did not immediately respond to a request for comment.

Snowden, who is believed to be hiding in Hong Kong, has been under intense scrutiny since he went public in a video released by Britain's Guardian newspaper on June 9 as the source of documents revealing the US government's vast surveillance of phone and Internet activity.

Snowden, a contractor formerly employed by Booz Allen Hamilton, worked at a National Security Agency facility in Hawaii. He had a Top Secret/Sensitive Compartmented Information level clearance.

Senators at the hearing on Thursday said they were concerned about whether people receiving Top Secret level clearances are being properly vetted, and said there does not appear to be sufficient oversight of the work, which is largely outsourced.

"It is a reminder that background investigations can have real consequences for our national security," McCaskill said of Snowden's leaks. McCaskill chairs the contracting oversight subcommittee of the Senate's Homeland Security Committee.

USIS supports the Office of Personnel Management (OPM) by managing and overseeing background investigations, an arrangement that McCaskill said appears to put USIS in a position of oversight for its own work. She added that the company received $200 million last year from OPM.

Merton Miller, an official in OPM's Federal Investigative Services unit, said USIS conducts 45 percent of the overall contract workload for government background investigations.

Security investigations for federal employees used to be conducted mainly by a large staff of full-time investigators who were civil servants at the OPM.

In 1996, the investigative functions of OPM were privatized and the resulting company, USIS, was awarded a contract with OPM to conduct background investigations for security clearances on employees of more than 95 federal agencies.

On its website, USIS says it presently has 100 federal contracts.

USIS is owned by a larger investigative company called Altegrity, which in turn is principally owned by private equity firm Providence Equity Partners.