Privatization of Government Security Clearances Linked to Booz Allen Hiring of Snowden and USIS Investigation Shortcuts

166 impressive, its operating margin on these contracts had doubled. As it turned out, it did not achieve these profits by increasing its core internal staff. In 2008, it had 22,000 employees on its internal staff, and in 2013, it had roughly the same number on its internal staff. What it expanded was the number of outside contractors it employed. It added in these five years, by one Wall Street analyst’s calculation, some 8,000 new external workers. They were employed as system administrators, infrastructure analysts, computer security specialists and other “geek squad” jobs at the NSA and other government agencies. Their main qualification was their prior secrecy clearances (which saved Booz Allen the expense of vetting them and also the loss income while waiting many months for a clearance.) Snowden therefore was highly-desirable from an economic point of view for Booz Allen. Even though he had no prior experience as an infrastructure analyst, and he had been detected being untruthful about his degree in computer sciences, he not only had a SCI secrecy clearance, but he was willing to take a cut in pay. In keeping with the Booz Allen business plan, such a recruit would provide another cog in its profit machine. Not only had the NSA outsourced much of its computer operations 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 outsourcing investigating the backgrounds of millions of government applicants for jobs. The task had been previously been performed by FBI but it was assumed that a profit-making business could do it faster and more efficiently. The private company named United States Investigative Services (USIS) was purchased in 2007 for $1.5 billion by Providence Equity Partners, a rapidly-expanding investment firm founded only four years earlier by graduates of 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 previously government service. But such outsourcing had drawbacks. For one thing, unlike the FBI, USIS lacked the investigative clout to gain entry to other the CIA and other government agencies. For example, when it did the background check on Snowden in 2011, it could not get access to his CIA file. As will be recalled, there was a "derog” in his file that might have set off alarm bells. But because of its lack of access to the CIA, USIS did not learn about the derogatory reports in Snowden’s CIA file. Nor did it learn that he had been threatened by an internal investigation of his alleged computer tampering in 2009. The FBI, with its long standing liaisons with the CIA, might have learned this about Snowden if it had done his background check. To be sure, the profit calculus might have worked better if it had been coupled with adequate oversight. But without such oversight, it proved to be a barrier to extended investigations of applicants. As it turned out, USIS closed cases and cleared applicants without completing an adequate investigation. According to a US government suit filed in 2014, USIS had prematurely closed over 665,000 investigations in order to get more quickly paid for them. Since the more cases it completes each month, the more money it receives from the government, the law suit HOUSE_OVERSIGHT_020318