January 22, 2016

White House to create new (old) agency to conduct background checks

What follows the release from today is something that will not be mentioned in the news, the fact that this was done to correct a failure of privatization. I know this because I was there.

http://www.reuters.com/article/us-usa-cybersecurity-whitehouse-idUSKCN0V022F

White House turns to Pentagon in major background checks overhaul

The U.S. government will set up a new agency to do background checks on employees and contractors, the White House said on Friday, after a massive breach of U.S. government files exposed the personal data of millions of people last year.

As a part of a sweeping overhaul, the Obama administration said it will establish a National Background Investigations Bureau. It will replace the Office of Personnel Management’s (OPM) Federal Investigative Services (FIS), which currently conducts investigations for over 100 Federal agencies.

The move, a stiff rebuke for FIS and OPM, comes after last year's disclosure that a hack of OPM computers exposed the names, addresses, Social Security numbers and other sensitive information of roughly 22 million current and former federal employees and contractors, as well as applicants for federal jobs and individuals listed on background check forms.

What was not mentioned in the article is that prior to 1996 there was a federal agency that conducted all background checks for the USOPM. The investigative arm of the OPM (Office of Personnel Management) was privatized in 1996 and turned into a private government contractor named USIS (US Investigations Service) http://www.gao.gov/assets/90/85833.pdf This private company was given all of the contracts that it used to service as part of the federal government. I worked for this company and let me tell you, we made money. In 2000, the Carlyle Group bought a controlling chunk of USIS and let me tell you, we made even more money. http://www.rense.com/general69/carl.htm

USIS was sold to another group in 2007 and ultimately started losing government contracts for background checks to other contractors. Then we started hearing about people with security clearances who should never should have gotten them when USIS was exposed after taking shortcuts on investigations. Charges were filed against USIS and they were suspected of passing as many as 665,000 flawed investigations background checks between March 2008 and September 2012, which was about 40 percent of total submissions http://www.reuters.com/article/us-usa-usis-idUSBREA0M0BD20140123 (I knew of these going back to my time there and that was one of the reasons I left the company. It was no longer about security, but about how many reports could be produced and how much profit could be turned) http://thehill.com/policy/national-security/251549-background-check-company-that-screened-snowden-to-forfeit-30-million

So here is another shining example of the failure of privatization. A lot of people made a lot of money off of this filed venture. I've already spent the relatively little bit I made when I cashed out, so you can't have it back.