HOUSE_OVERSIGHT_019704.jpg
1.71 MB
Extraction Summary
3
People
11
Organizations
0
Locations
5
Events
2
Relationships
3
Quotes
Document Information
Type:
Book excerpt / government exhibit
File Size:
1.71 MB
Summary
This document is page 216 from the book 'How America Lost Its Secrets' by Edward Jay Epstein (indicated by the filename and content). It details the privatization of U.S. government background checks initiated by the Clinton administration in 1996. The text criticizes the private firm USIS (owned by Providence Equity Partners) for failing to access CIA records during Edward Snowden's 2011 background check and for fraudulently 'flushing' over 665,000 incomplete investigations to maximize profit, leading to a 2014 lawsuit.
People (3)
| Name | Role | Context |
|---|---|---|
| Al Gore | Vice President |
Backed the idea to privatize background checks to reduce the size of the federal government.
|
| Edward Snowden | Subject of background check |
Referred to as 'Snowden'; underwent a background check in 2011 where USIS failed to access his CIA file.
|
| Edward Jay Epstein | Author |
Inferred from filename 'Epst' and book title 'How America Lost Its Secrets'. Note: This document appears to be writte...
|
Organizations (11)
| Name | Type | Context |
|---|---|---|
| Clinton Administration |
Privatized background checks in 1996.
|
|
| FBI |
Previously performed background checks; lacked access issues that private companies faced.
|
|
| U.S. Investigations Services (USIS) |
Private company that took over background checks; accused of flushing cases.
|
|
| Providence Equity Partners |
Purchased USIS in 2007 for $1.5 billion.
|
|
| Duke University |
Alma mater of founders of Providence Equity Partners.
|
|
| Brown University |
Alma mater of founders of Providence Equity Partners.
|
|
| Harvard Business School |
Alma mater of founders of Providence Equity Partners.
|
|
| Booz Allen |
Compared to USIS as being backed by hedge funds/investment firms.
|
|
| CIA |
Held a file on Snowden that USIS could not access.
|
|
| NSA |
Mentioned as the agency information specialists were entering.
|
|
| House Oversight Committee |
Inferred from Bates stamp 'HOUSE_OVERSIGHT'.
|
Timeline (5 events)
1996
Clinton administration privatized background checks for government employees.
USA
2014
U.S. government suit filed against USIS regarding 665,000 prematurely closed investigations.
USA
U.S. Government
USIS
Relationships (2)
The idea, backed by Vice President Al Gore, was to reduce the size of the federal government by outsourcing...
USIS was purchased in 2007... by Providence Equity Partners
Full Extracted Text
Complete text extracted from the document (2,514 characters)
216 | HOW AMERICA LOST ITS SECRETS
tions to private companies, but the Clinton administration in 1996
had privatized background checks for government employees
requiring security clearances. The idea, backed by Vice President
Al Gore, was to reduce the size of the federal government by out-
sourcing investigating the backgrounds of millions of government
applicants for jobs. The task had previously been performed by the
FBI, but it was assumed that a profit-making business could do it
faster and more efficiently. The private company named U.S. Inves-
tigations Services was purchased in 2007 for $1.5 billion by Provi-
dence Equity Partners, a rapidly expanding investment firm founded
in 1989 by graduates of Duke, Brown University, and the Harvard
Business School. So like Booz Allen, USIS was backed by a hedge
fund determined to make money by systematically cutting the cost
of a service previously carried out by the government.
had privatized background checks for government employees
requiring security clearances. The idea, backed by Vice President
Al Gore, was to reduce the size of the federal government by out-
sourcing investigating the backgrounds of millions of government
applicants for jobs. The task had previously been performed by the
FBI, but it was assumed that a profit-making business could do it
faster and more efficiently. The private company named U.S. Inves-
tigations Services was purchased in 2007 for $1.5 billion by Provi-
dence Equity Partners, a rapidly expanding investment firm founded
in 1989 by graduates of Duke, Brown University, and the Harvard
Business School. So like Booz Allen, USIS was backed by a hedge
fund determined to make money by systematically cutting the cost
of a service previously carried out by the government.
But such outsourcing had drawbacks. For one thing, unlike the
FBI, USIS lacked the investigative clout to gain entry to certain gov-
ernment agencies. A Congressional review found that the privacy
act permits disclosure of government agency records to the private
firm if they are part of a "routine use of the records," but intelligence
agencies did not consider all such requests to be "routine. For exam-
ple, when it did the background check on Snowden in 2011, it could
not get access to his CIA file. The "derog" in his file might have set
off alarm bells, as might the fear that he had been threatened by an
internal investigation over his alleged computer tampering in 2009.
The FBI might have learned this about Snowden if it had done his
background check.
FBI, USIS lacked the investigative clout to gain entry to certain gov-
ernment agencies. A Congressional review found that the privacy
act permits disclosure of government agency records to the private
firm if they are part of a "routine use of the records," but intelligence
agencies did not consider all such requests to be "routine. For exam-
ple, when it did the background check on Snowden in 2011, it could
not get access to his CIA file. The "derog" in his file might have set
off alarm bells, as might the fear that he had been threatened by an
internal investigation over his alleged computer tampering in 2009.
The FBI might have learned this about Snowden if it had done his
background check.
The lack of adequate oversight was another problem. USIS closed
cases and cleared applicants without completing an adequate inves-
tigation. According to a U.S. government suit filed in 2014, USIS
had prematurely closed over 665,000 investigations in order to get
paid for them more quickly. Because the more cases it completed
each month, the more money it received from the government, the
lawsuit alleged that USIS employees often "flushed" or ended cases
before completing a full investigation to meet corporate-imposed
quotas for getting bonuses. One employee, in an e-mail cited in the
government's complaint, said they "flushed everything like a dead
goldfish." As a result, some information specialists entering the NSA
cases and cleared applicants without completing an adequate inves-
tigation. According to a U.S. government suit filed in 2014, USIS
had prematurely closed over 665,000 investigations in order to get
paid for them more quickly. Because the more cases it completed
each month, the more money it received from the government, the
lawsuit alleged that USIS employees often "flushed" or ended cases
before completing a full investigation to meet corporate-imposed
quotas for getting bonuses. One employee, in an e-mail cited in the
government's complaint, said they "flushed everything like a dead
goldfish." As a result, some information specialists entering the NSA
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HOUSE_OVERSIGHT_019704
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HOUSE_OVERSIGHT_019704
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