USIS (company)

US Investigation Services
Industry	Financial
Founded	1996
Headquarters	Fairfax County, Virginia , U.S.

Last updated September 26, 2023

USIS (US Investigation Services) was a US corporation that provided security-based information and service solutions to both government and corporate customers, in the United States and abroad. Its corporate headquarters were in Falls Church, Virginia, in Greater Washington, D.C.^[1] Training took place in Boyers, Pennsylvania. USIS was a part of Altegrity Inc., a company headquartered in the Falls Church area that was owned by Providence Equity Partners.^[2]

History

USIS was founded in 1996 after the investigative branch, Federal Investigative Service, of the United States Office of Personnel Management (OPM) was privatized. Its creation was due to an effort of Vice President of the United States Al Gore to reduce the size of the civil service. Originally known as US Investigations Services Inc.,^[2] it was at first an employee-owned company.

The Carlyle Group invested in USIS and in 2003, Welsh, Carson, Anderson & Stowe also committed capital to them. In 2007, Carlyle announced that it would sell USIS to Providence Equity Partners, a private equity firm, for US$1.5 billion.^[3]

In the fiscal year 2012, USIS received $253 million for the contract work of the OPM, 67% of the OPM's contract spending for the fiscal year.^[2]

Background checks

Aaron Alexis background check

In 2007, an OPM contract investigator employed by USIS conducted the field work for the OPM-FIS background investigation^[4] on Aaron Alexis, who fatally shot 12 people and injured three others in a mass shooting at the headquarters of the Naval Sea Systems Command (NAVSEA) inside the Washington Navy Yard in southeast Washington, D.C. on Monday, September 16, 2013.^[5]

Edward Snowden investigation

In 2011, OPM contract investigators employed by USIS conducted the field work for the OPM security clearance re-investigation on Edward Snowden, who leaked classified documents beginning on June 5, 2013.^[6]

On June 18, 2013, the Subcommittee on Efficiency and Effectiveness of Federal Programs and the Federal Workforce and the Subcommittee on Financial and Contracting Oversight, both of the U.S. Senate Homeland Security and Governmental Affairs Committee, held a joint hearing.^[7] Michelle B. Schmitz, the OPM assistant inspector general for investigations, testified that USIS had been under investigation since late 2011, stating that it involves a "complicated contract fraud case."^[7] Patrick McFarland, the OPM inspector general, did not reveal the reason for the investigation of USIS, and said when asked about Snowden's security clearance re-investigation, "We do believe there may be some problems."^[6]

USIS response to accusations regarding Alexis and Snowden

In a September 8, 2014, media release, the company insisted that, despite being "the target of inaccurate and misleading public allegations," USIS is a responsible government contractor. It labeled as myth reports that USIS botched its field work for OPM background investigations on Aaron Alexis and Edward Snowden, calling the claim "absolutely false." The company asserted that "OPM confirmed in sworn testimony before Congress on February 11, 2014 that the investigative file compiled by USIS on Aaron Alexis 'was complete and in compliance with all investigative standards.'" USIS also said it followed all OPM-mandated procedures and protocols in its background investigation of Edward Snowden. ^[8]

The company further clarified that it "does not grant security clearances and plays no role in making those determinations." The decision to grant or renew a clearance, said USIS, "is the sole responsibility of the federal government agency that requested the background investigation."^[9] However, the OPM hired USIS to perform not only background checks but also secondary reviews of those checks to ensure that no one who shouldn't have access to state secrets was overlooked by mistake. While USIS did have staff to review these background investigations and to ensure they met government investigative standards, the federal government and the OPM was still responsible for the adjudication in granting of security clearances.^[1]

Fraud investigation and charges

In June 2013, the office of Senator Claire McCaskill stated that USIS was "under active criminal investigation".^[7] A statement from USIS stated that it was unaware that it was under criminal investigation.^[7] It added that "USIS complied with that subpoena and has cooperated fully with the government's civil investigative efforts".^[10] USIS, as the government's No. 1 provider of background checks for the United States, earned $253 million in awards this year alone.^[11]

On January 23, 2014, the U.S. Department of Justice filed fraud charges against USIS.^[12] The suit was originally filed by a long time USIS employee, whistleblower Blake Percival. The suit, United States of America, ex rel Blake Percival vs USIS alleges that 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 reports of investigation of completed background investigations in order to increase the company's revenues and profits. USIS responded that the faulty checks "relate to a small group of individuals over a specific time period."^[13] In August 2015, Altegrity agreed to forgo $30 million in payments the U.S. government owed to USIS in order to settle the case with the Department of Justice.^[1]

Cyber attack

On July 7, 2014, the company said it was hit by a cyber attack prompting the US government to suspend its work with the firm. Multiple experts including USIS Lead Information Security Engineer John Nolan who have examined the hack "believe it has all the markings of a state-sponsored attack," but did not detail possible suspects.^[14]^[15] The investigation revealed that the hackers broke into USIS by pivoting from an SAP system managed by a third party.^[16]^[17]

OPM drops USIS

On September 9, 2014, the OPM confirmed it would not renew any of its contracts with USIS upon their expiration at month's end. USIS said it was "deeply disappointed with OPM's decision," which affects 3,000 employees handling a caseload that averaged about 21,000 background investigations a month for total fees of $320 million during the last fiscal year.^[18]

Bankruptcy

In early 2015, USIS's parent company, Altegrity (also known as Corporate Risk Holdings) filed for bankruptcy.^[1]

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References

1 2 3 4 Davenport, Christian (December 18, 2015). "The whistleblower who exposed U.S.'s flawed security clearance system finally gets his reward". The Washington Post . Retrieved June 4, 2016.
1 2 3 Taborek, Nick (June 24, 2013). "Al Gore Reinventions Helped Create USIS's Outsourced Clearances". Bloomberg Businessweek . Archived from the original on October 26, 2013.
↑ Adler, Neil (May 11, 2007). "Private equity firm to buy USIS for $1.5B". Washington Business Journal . Retrieved July 2, 2013.
↑ Zakaria, Tabassum (September 20, 2013). "Same firm checked background of Navy Yard shooter, Snowden". Yahoo! News . Reuters . Retrieved December 9, 2014.
↑ Valery, Chantal (September 19, 2013). "Washington gunman 'hunted' his victims: FBI". Yahoo! News . Agence France-Presse. Archived from the original on September 21, 2013. Retrieved September 16, 2019.
1 2 Waterman, Shaun (June 21, 2013). "NSA leaker Ed Snowden's clearance had 'problems'; firm that vetted him under investigation". The Washington Times . Retrieved September 20, 2014.
1 2 3 4 Davidson, Joe (June 20, 2013). "Firm that did background check on Snowden is under investigation". The Washington Post . Retrieved July 2, 2013.
↑ "Usis is a Responsible Government Contractor". Archived from the original on September 9, 2014.
↑ "USIS IS A RESPONSIBLE GOVERNMENT CONTRACTOR". USIS.com (Press release). US Investigations Services, LLC (USIS). September 8, 2014. Archived from the original on September 9, 2014. Retrieved September 16, 2019.
↑ Lardner, Richard; Kimberley, Dozier (June 20, 2013). "Watchdog faults background check of NSA leaker". Yahoo! News . Associated Press . Retrieved July 2, 2013.
↑ Strohm, Chris; Taborek, Nick (July 8, 2013). "Dead Among Those Interviewed in Faulty Background Checks". Bloomberg.com . Retrieved December 9, 2014.
↑ Prasad, Sakthi (January 23, 2014). "U.S. brings fraud charges against firm that vetted Snowden". Reuters. Retrieved October 29, 2020.
↑ Hamburger, Tom; Wilgoren, Debbi (January 23, 2014). "Justice Department says USIS submitted 665,000 incomplete background checks". The Washington Post . Retrieved January 23, 2014.
↑ Hattem, Julian. "Major DHS contractor hit by cyberattack". The Hill . Retrieved December 9, 2014.
↑ "Homeland Security Contractor Breached". The Daily Beast . Retrieved December 9, 2014.
↑ "First Example Of SAP Breach Surfaces". Dark Reading. Retrieved May 22, 2017.
↑ "CHINESE ATTACK ON USIS EXPLOITING SAP VULNERABILITY" (PDF).
↑ Davenport, Christian (September 9, 2014). "USIS contracts for federal background security checks won't be renewed". The Washington Post . Retrieved September 9, 2014.