oversight

Background Investigations: Program Deficiencies May Lead DEA to Relinquish Its Authority to OPM

Published by the Government Accountability Office on 1999-09-07.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to Congressional Requesters




September 1999
                 BACKGROUND
                 INVESTIGATIONS
                 Program Deficiencies
                 May Lead DEA to
                 Relinquish Its
                 Authority to OPM




GAO/GGD-99-173
United States General Accounting Office                                                         General Government Division
Washington, D.C. 20548




                                    B-283410
                                    September 7, 1999

                                    The Honorable Frank R. Wolf
                                    House of Representatives

                                    The Honorable Charles S. Robb
                                    United States Senate

                                    To become federal employees, work for federal contractors, or gain access
                                    to federally restricted information and areas, individuals commonly
                                    undergo personnel background investigations to determine their suitability
                                    for employment or access to classified national security information. The
                                    Office of Personnel Management (OPM) is responsible for ensuring that
                                    background investigations are adequately conducted. OPM can delegate
                                    authority to agencies to perform background investigations, as it did for
                                    the Drug Enforcement Administration (DEA), a component of the
                                    Department of Justice (DOJ). However, as of July 1999, DEA was
                                    considering relinquishing background investigation authority to OPM,
                                    except for the authority to investigate the backgrounds of applicants for
                                    DEA Special Agent positions.

                                    As you requested, this report describes the circumstances that led DEA to
                                    consider relinquishing its authority to conduct personnel background
                                    investigations. It also assesses whether OPM acted in an independent and
                                    objective manner in choosing to review DEA and its background
                                    investigations. This latter objective came about because OPM would be
                                    contractually obligated to use its own contractor to do DEA’s background
                                    investigations if DEA relinquished authority. This contracting firm was
                                    established in 1996, when OPM privatized much of its background
                                                             1
                                    investigation function. Most of the firm’s employees were former OPM
                                    employees.

                                    A series of evaluations in the 1990s critical of DEA’s background
RESULTS IN BRIEF                    investigations and personnel security program caused DEA to consider
                                    relinquishing its background investigation authority. The findings of OPM’s
                                    assessments over much of the 1990s, an assessment by DOJ in 1998, and its
                                    own assessment in 1999 triggered DEA’s consideration of this issue. DEA’s

                                    1
                                     The U. S. Investigations Services, Inc. (USIS) was created when the OPM function was privatized.
                                    Under OPM’s contract with USIS, OPM must order all of its requirements for background investigation
                                    services from USIS during the term of the contract. This contract is for a term of 36 months plus two
                                    12-month options for a total contract term of 60 months.




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relinquishment of investigation authority would be consequential because,
although the numbers varied by year, DEA and its contractor performed an
estimated 5,600 background investigations in 1998.

During the late 1990s, OPM reviewed a sample of 265 background
investigation reports prepared by DEA and its contractors and determined
that all but 1 investigation was deficient in meeting the investigative
requirements that DEA had agreed to follow. The deficiencies included, for
example, a failure to conduct searches related to foreign travel and
searches of law enforcement records. In addition, in 1992 and again in
1998, OPM reviewed DEA’s personnel security program. It identified
numerous deficiencies in 1992 that persisted in 1998.

DOJ audited DEA’s personnel security program in 1997 and found
deficiencies similar to what OPM had found in 1992 and again in 1998.
Based on the DOJ audit and the recurring findings of OPM, DOJ’s Assistant
Attorney General for Administration told the DEA Administrator in
October 1998 that he (the Assistant Attorney General) believed that DEA
should relinquish all of its background investigation authority to OPM.

In early 1999, DEA conducted its own examination of the personnel
security program, focusing on background investigations, and concluded
that DEA was not able to capably perform or oversee background
investigations. This lack of capability allowed security clearances to be
granted, regardless of whether the related background investigations were
adequate.

Budget concerns also led DEA to consider relinquishing its background
investigation authority. DEA had allowed contract investigators to perform
background investigations, even though the investigators had not gone
through required background investigations because DEA did not have
funds to finance such investigations.

As of July 1999, subsequent to its examination of the personnel security
program, DEA was considering relinquishing its authority for background
investigations to OPM, except for the authority to investigate backgrounds
of applicants for DEA Special Agent positions. DEA believed that it would
be unwise to separate the background investigation from the overall
applicant selection process by having them conducted by an independent
entity not familiar with DEA’s unique requirements for Special Agents.
Special Agents had historically conducted the background investigations
of applicants and would continue to do so, according to DEA.




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             OPM appeared to us to have been objective and independent in choosing
             to review DEA’s personnel security program and background
             investigations. We assessed whether OPM acted objectively and
             independently by examining OPM’s responsibilities for the security
             program and background investigations and by examining whether OPM
             treated other agencies differently from DEA. Under an executive order and
             an agreement with DEA, OPM was required to review the security program
             and background investigations. Given DEA’s history of deficient
             background investigations, we believe OPM had a responsibility to review
             the investigations often. OPM reviewed most other agencies that currently
             possessed delegated authority with roughly the same frequency as DEA.
             OPM was comparably critical in its assessment of other agencies’
             background investigations, as it was of DEA’s.

             Rather than raising a question regarding OPM’s independence and
             objectivity, the evidence raises the question of why OPM did not act to
             rescind DEA’s delegated authority. According to an OPM official, OPM had
             made commitments at the time it privatized its investigation function that
             it would not rescind delegations of authority in order to give new business
             to the privatized company. The official said OPM had been sensitive to
             these commitments. We have not evaluated OPM’s explanation of this
             situation. However, at your request we are separately reviewing related
             issues concerning OPM’s oversight function regarding background
             investigations.

             Except for summer employees and some contractors, the scope of DEA
Background   background investigations was designed to assess whether individuals met
             the requirements to receive a “top-secret” clearance. DEA used the results
             of these background investigations to (1) help determine whether
             individuals were suitable for employment and (2) provide a basis for
             granting a security clearance. Employees with top-secret clearances can
             have access to information classified up to and including the top-secret
             level. The unauthorized disclosure of classified information can cause
             irreparable damage to the national interest and loss of human life.

             Unless otherwise provided by law, the investigation of a person entering or
             employed by the federal government in the competitive service, or by
             career appointment in the Senior Executive Service, is the responsibility of
                  2
             OPM. Agencies may request delegated authority from OPM to conduct or
             contract out investigations of their own employees and applicants.

             2
              The competitive service includes (1) all civilian positions in the executive branch of the federal
             government not specifically excepted from civil service laws, and not in the Senior Executive Service,




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DEA obtained this authority from OPM in the early 1980s. The two
agencies executed a Memorandum of Understanding and Agreement,
which transferred authority to DEA and set forth the general requirements
that DEA must follow. The memorandum has been renewed periodically,
but the most recent one expired in September 1998. Nevertheless, OPM
and DEA have continued to follow it, according to officials from both
agencies.

The Memorandum of Understanding and Agreement between OPM and
DEA required DEA to follow the background investigation standards used
by OPM. These standards held that background investigations, needed to
provide employees a top-secret clearance, must meet investigation
requirements established by Executive Order 12968, “Access to Classified
Information.” This executive order directed the President’s Security Policy
Board to develop a common set of investigative standards to be used by
executive agencies for determining eligibility for access to classified
information. The President approved the standards that the Board
developed in March 1997.

DEA’s background investigations were part of its personnel security
program. DEA’s Office of Security Programs was responsible for operating
the program and, in connection with that responsibility, was to provide
policy guidance and management of background investigations. This office
was responsible for ensuring that appropriate investigations were
completed on applicants and employees as well as providing security
adjudication services for DEA. As part of these adjudication services, this
office used the results of background investigations to determine whether
individuals were suitable for employment and whether a security clearance
should be granted. In addition to DEA, OPM and DOJ both had
responsibility for overseeing the program and DEA’s background
investigations.

DEA Special Agents did the initial background investigations on applicants
for DEA Special Agent positions, which was DEA’s core occupation. DEA
usually contracted out for initial background investigations for other
employees, including Intelligence Research Specialists, Diversion
Investigators, Chemists, and Contractors, and the periodic reinvestigation
for all employees, including Special Agents. An executive order required
agencies to renew employees’ security clearances periodically, and the


and (2) all positions in the legislative and judicial branches of the federal government and in the
government of the District of Columbia made subject to the civil service laws by statute.




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                background investigations that were made for these renewals were
                referred to as reinvestigations.

                In fiscal year 1998, an estimated 5,583 background investigations were
                conducted of DEA applicants and employees. Of that number, about 3,401
                were initial background investigations and another 2,182 were
                reinvestigations. Most of the investigations (about 74 percent) and all of
                the reinvestigations in 1998 were done by one contractor. However, DEA
                Special Agents conducted the background investigations of persons who
                applied for Special Agent positions, which accounted for about 26 percent
                of all initial background investigations.

                Based on investigative standards implementing Executive Order 12968, a
                typical background investigation for a top-secret clearance would include
                major investigative components such as

              • proof of birth and citizenship for subjects and their immediate family
                members;
              • a search of investigative files and other records held by federal agencies,
                including the FBI and CIA (referred to as a national agency check);
              • financial review, including a credit bureau check;
              • review of state and local law enforcement and court records (referred to
                as a local agency check);
              • verification of recent education;
              • record checks and personal testimony at places of employment;
              • interviews of references including coworkers, employers, friends,
                educators, neighbors, and other individuals such as an ex-spouse; and
              • a personal interview with the applicant.

                To identify and describe the circumstances that led DEA to consider
Scope and       relinquishing its delegated authority to conduct personnel background
Methodology     investigations, we interviewed cognizant officials of DEA, DOJ, and OPM.
                We obtained and reviewed the Memorandum of Understanding and
                Agreement between DEA and OPM regarding this authority. We obtained
                and reviewed all appraisals of DEA’s personnel security program and/or
                the quality of background investigations done by OPM and DOJ since 1992,
                when DEA was first appraised by OPM as a separate DOJ component. We
                did not review individual background investigations or DEA’s personnel
                security program. We also did not determine whether any employee who
                received a security clearance based on a deficient background
                investigation would have been denied clearance if the investigation had
                been performed according to required standards.




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                            We obtained and reviewed an internal DEA assessment of its personnel
                            security program. We also obtained and reviewed relevant correspondence
                            between DEA, DOJ, and OPM related to DEA’s security program and its
                            background investigations.

                            To assess whether OPM acted in an independent and objective manner in
                            choosing to review DEA’s background investigations and security
                            program, we applied three criteria posed in the following questions:

                          • What was OPM’s responsibility for reviewing background investigations
                            performed by DEA and/or its contractors?
                          • Did the frequency of OPM’s reviews seem reasonable given the state of
                            DEA’s background investigations and program?
                          • Was the frequency of OPM’s oversight activities at other agencies with
                            delegated authority similar or dissimilar to the frequency of OPM’s
                            oversight at DEA?

                            For this second objective, we reviewed Executive Order 10450, “Security
                            Requirements for Government Employment,” which among other things
                            specified OPM’s responsibilities for reviewing federal agencies’ personnel
                            security programs. We also identified all agencies, in addition to DEA, that
                            had received delegated authority from OPM to perform background
                            investigations. We compared OPM’s oversight activities—the frequency of
                            reviews and the results—to OPM’s oversight activities at DEA.

                            We requested comments on a draft of this report from the Attorney
                            General of the United States on behalf of DOJ and DEA. We also requested
                            comments from the Director, OPM. OPM’s comments are discussed near
                            the end of this letter and are reprinted in appendix I. DOJ orally provided
                            technical and clarifying comments, which we incorporated into this report.
                            We did our work in Washington, D.C., from May through July 1999 in
                            accordance with generally accepted government auditing standards.

                            As of July 1999, DEA was considering whether to relinquish its personnel-
DEA Was Considering         security background investigation authority to OPM. It had been brought
Relinquishing Its           to this point by the deficiencies found by OPM over much of the decade
Background                  and because of an assessment DOJ made in 1997. DOJ initiated discussions
                            with DEA in late 1998 about relinquishing its authority. Partially in
Investigation Authority     response to this initiative, DEA conducted an assessment and concluded
                            that it lacked the expertise and resources to capably perform or oversee all
                            of its background investigations.




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OPM Continually Found         Through a Memorandum of Understanding and Agreement with OPM, DEA
                              was required to forward all background investigation reports to OPM when
Background Investigations     they were completed. OPM was required to review samples of reports to
Deficient                     determine whether investigative requirements called for by the agreement
                              were met. In addition to reviewing completed investigation reports, OPM
                              was required to assess DEA’s overall personnel security program under
                              which background investigations were conducted.

                              OPM’s reviews of background investigation reports submitted by DEA
                              continually found the investigations deficient. Between 1996 and 1998,
                              OPM reviewed a total of 265 background investigations conducted by DEA
                                                   3
                              and its contractors. OPM found all but one investigation deficient (i. e., all
                              but one failed to fully comply with OPM investigative requirements, which
                              DEA agreed to follow).

                              Some of these background investigations contained a single deficiency
                              while others contained more than one deficiency. There was no readily
                              available tabulation of the deficiencies for all 264 investigations found
                              deficient and the nature of those deficiencies. However, some information
                              was available. The 49 DEA investigative reports that OPM found deficient
                              in 1998 contained 221 deficiencies. Six reports contained one deficiency,
                              and the remaining 43 reports contained multiple deficiencies. The types of
                              deficiencies OPM identified include

                            • not determining the nature and extent of contact between a personal
                              source and the subject of the investigation;
                            • gaps in coverage of the verification, through personal sources, of all of the
                              subject’s major activities, unemployment, and means of support;
                            • lack of or inadequate follow-up of issues admitted during the personal
                              interview or disclosed on the Questionnaire for National Security
                              Positions;
                            • failure to search Central Intelligence Agency files related to subject’s
                              foreign-born status or foreign travel;
                            • failure to provide information from public sources that was complete, such
                              as bankruptcies, financial matters, and divorce;
                            • neglecting to supply verification of subject’s citizenship through
                              Immigration and Naturalization Service searches; and
                            • failure to obtain appropriate verification of an individual’s name, date of
                              birth, and place of birth through state and local bureaus of vital statistics.
                              3
                               The 265 reports were randomly selected, according to an OPM official, but were not representative of
                              all DEA background investigations. DEA did not send all completed reports to OPM. Of the 265 reports,
                              OPM reviewed 145 in 1996, 70 in 1997, and 50 in 1998. DEA did not have data on the number of
                              investigations conducted in 1996 and 1997.




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  Generally, there is no standard for stating how serious a deficiency might
  be or what type is the most serious, because the deficiencies generally are
  errors of omission, such as failing to check a law enforcement record.
  Ultimately, a deficiency’s seriousness depends on what type of activity
  might have been found if the appropriate search had been conducted or if
  a particular investigative technique had been used. Also, a seemingly less
  serious deficiency may provide an investigative lead that uncovers activity
  that might compromise the nation’s security interest.

  OPM returned the reports that it found deficient to DEA for further work
  and correction. However, in 1998, when OPM followed up on the deficient
  reports that it identified in 1996 and 1997, OPM generally found that DEA
  had not corrected the deficiencies. OPM also found that even though the
  background investigations were deficient, DEA still granted security
  clearances.

  In addition to its periodic review of investigations, OPM also reviewed
  DEA’s overall personnel security program in 1992 and again 6 years later in
  1998. OPM found numerous deficiencies in 1992, and it found that DEA
  still had not corrected most of those deficiencies in 1998. The OPM
  findings include the following:

• The reinvestigation program did not effectively identify employees who
  were subject to routine reinvestigations. At DEA, employees were required
  to have their security clearances renewed every 5 years. Many employees
  in “Critical Sensitive/Top-Secret” positions were overdue for
  reinvestigation.
• DEA’s Planning and Inspection Manual provisions were insufficient
  because they did not include pertinent OPM and DOJ regulatory
  guidelines. The manual, among other deficiencies, failed to incorporate
  administrative due process guidelines for applicants, employees, and
  contract employees to appeal the denial or revocation of a security
  clearance.
• Physical security safeguards for the storage and protection of investigative
  files were insufficient.
• Personnel security adjudicators whose job was to decide who would be
  granted security clearances needed additional training and oversight.
• DEA’s Background Investigation Handbook did not include mandatory
  OPM investigative requirements.
• DEA did not forward copies of all its completed background investigations
  to OPM, as required by the conditions of its delegated authority.




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DOJ Requested That DEA       In addition to OPM reviews, DEA’s security program was subject to
                             compliance reviews by DOJ, which was responsible for the development,
Consider Relinquishing Its   supervision, and administration of security programs within the
Delegated Authority          department. In 1997, DOJ audited the DEA program and reported the
                             results to DEA. Based on the results of this review and OPM’s reviews,
                             DOJ initiated discussions with DEA in 1998 on relinquishing its
                             background investigation authority to OPM.

                             DOJ’s audit identified deficiencies that were similar to those that OPM
                             identified in its review of DEA’s security program in 1992. OPM also found
                             the same sort of deficiencies in 1998 after the DOJ audit. The DOJ findings
                             identified issues and deficiencies in (1) periodic reinvestigations; (2)
                             background investigations; (3) due process procedures; (4) resources for
                             monitoring, tracking, and controlling the investigation process; (5)
                             adjudication (process for deciding whether security clearances should be
                             granted); and (6) staff competence. DOJ referred to its findings as critical
                             security issues and deficiencies.

                             In October 1998, the Assistant Attorney General for Administration wrote
                             to the DEA Administrator expressing his belief that DEA’s investigative
                             function should be relinquished to OPM but said as well that he would like
                             to hear the DEA Administrator’s comments. The memorandum was based
                             on the DOJ audit and on the recurring findings of OPM.

                             In that memorandum, DOJ’s Assistant Attorney General also expressed
                             concern with what DOJ saw as DEA’s inability to maintain an effective
                             overall personnel security program. This inability came about, the
                             memorandum stated, because resources were consumed in doing certain
                             functions—checking federal records and performing quality control—that
                             OPM performed when doing background investigations for other agencies.
                             OPM checked the files of various federal agencies, such as the
                             investigative and criminal history files of the FBI, by computer. Unlike
                             OPM, DEA lacked the extensive computer links to federal files and did
                             many file checks manually. Checking federal files were referred to as
                             National Agency Checks in background investigations.

DEA Conducted a Self-        In the Spring of 1999, DEA assessed its personnel security program,
                             concentrating on background investigations. This assessment, according to
Assessment and Concluded     DEA officials, was done in response to the Assistant Attorney General for
It Lacked Expertise and      Administration’s October memorandum, subsequent meetings with DOJ
Resources                    officials, and DEA’s own awareness of the condition of its personnel
                             security program. The assessment covered areas such as the (1) results of
                             reviews performed by OPM and DOJ, (2) requirements of the



                             Page 9                             GAO/GGD-99-173 DEA Background Investigations
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  Memorandum of Understanding and Agreement with OPM, (3) efforts to
  correct deficiencies with the security program and background
  investigations, (4) contract with the company that currently did
  background investigations for DEA, and (5) other management issues
  related to background investigations.

  Although its assessment noted efforts to resolve concerns raised by OPM
  and DOJ, DEA identified several issues that led to the conclusion that it
  did not have the capability to effectively perform or oversee background
  investigations. It also concluded that some security clearances were
  granted based on deficient background investigations. As of July 1999,
  DEA was considering whether to relinquish its background investigation
  authority to OPM.

  Following are some of the issues that the assessment identified, which led
  to DEA’s conclusion that it had not effectively performed or overseen
  background investigations.

• DEA had historically failed to capably perform or oversee its background
  investigations.
• DEA found that the majority of people working in its personnel security
  unit had not been adequately trained regarding the laws, regulations,
  executive orders, policies, and technical practices central to initiating, and
  performing and overseeing background investigations, as well as providing
  personnel security adjudicative services to DEA.
• DEA had not ensured, as required by the conditions of its delegated
  authority, that each investigator performing investigations under its
  delegation had been screened by an investigation that met no less than
  OPM’s top-secret clearance requirements. DEA did not comply with this
  requirement for its current contractor because DEA did not have funds to
  finance such investigations.
• DEA had not developed or implemented an integrity follow-up program to
  monitor contract investigators, as required under its delegated authority.
  DEA concluded that under current circumstances without relief that OPM
  would provide, it was likely that DEA would remain in violation of the
  integrity follow-up program requirement.
• DEA personnel performed National Agency Checks, a requirement of each
  background investigation. DEA’s costs for performing these checks was
  associated with DEA’s need to conduct many of these checks manually. In
  its self-assessment, DEA stated that OPM, however, had sophisticated
  computer facilities that permitted it to conduct required National Agency
  Checks through direct-access computer links with all the relevant




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  agencies. DEA concluded that it saw no advantage to duplicate a capability
  that already existed in OPM.
• DEA bears ultimate responsibility for ensuring that background
  investigations performed under its delegation from OPM conform to
  mandated investigative criteria. DEA had been heavily criticized for its
  performance in this regard. DEA concluded that OPM has a fully qualified
  and experienced quality-control staff and that it was not reasonable for
  DEA to continue to attempt to duplicate this capability.

  As of July 1999, DEA had not made a final decision on relinquishing its
  background investigation authority. From what DEA officials told us, it
  was considering retaining the authority to investigate individuals who
  apply for DEA Special Agent positions but relinquishing the authority to do
  all other background investigations, including periodic reinvestigations of
  Special Agents. In his October 1998 memorandum, the Assistant Attorney
  General for Administration said that he believed that DEA should
  relinquish all authority, including the authority to investigate the
  backgrounds of Special Agent applicants.

  According to DEA, relinquishing all other background investigation
  authority would allow DEA to redirect resources into the investigative
  process for Special Agent applicants. The redirected resources would go
  into increased training, policy guidance, and oversight. DEA said it
  believed that it would be unwise to segregate the background investigation
  from the overall Special Agent applicant selection process by having them
  conducted by an independent entity not familiar with DEA’s unique
  requirements for Special Agents. Special Agents did the background
  investigations of applicants and would continue to do these investigations
  if that authority was retained, according to DEA.

  DEA would not be the first agency to relinquish background investigation
  authority to OPM. According to an OPM official, five agencies have done
  so: (1) the Federal Emergency Management Agency in 1991, (2) the
  Department of Commerce in 1994, (3) the National Aeronautics and Space
  Administration Office of Inspector General in 1994, (5) the U.S. Soldiers
  and Airmens Home in 1994, and (5) the Department of Education Office of
  Inspector General in 1998.




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                     As previously mentioned, OPM had a sole-source contract with USIS, a
OPM Appeared to      firm that OPM was instrumental in creating, to do all background
Have Acted in an     investigations except those done by agencies under delegation agreements.
Objective and        If DEA were to relinquish its background investigation authority to OPM,
                     the contract between OPM and USIS would require OPM to order this
Independent Manner   investigative work from USIS until the contract expired. Because of the
                     relationship between OPM and USIS, we reviewed whether OPM acted in
                     an objective and independent manner in choosing to review DEA’s
                     background investigation reports and personnel security program. To
                     gauge whether OPM acted objectively and independently, we considered
                     OPM’s responsibilities towards the security program and the program’s
                     background investigations and whether OPM’s treatment of DEA differed
                     from its treatment of other agencies. OPM appeared to have acted in an
                     objective and independent manner.

                     OPM was required to review DEA’s personnel security program and
                     background investigations. This requirement was contained in the
                     Memorandum of Understanding and Agreement between OPM and DEA,
                     which provided that OPM would monitor the agreement as part of its
                     security program appraisal process. In addition, Executive Order 10450,
                     “Security Requirements for Government Employment,” required OPM to
                     make a continuing study of the order’s implementation. The purpose of
                     this continuing study is to determine whether deficiencies exist in security
                     programs that could harm the national interest and weaken national
                     security.

                     As already noted, OPM repeatedly found deficiencies in both the security
                     program and the background investigations, which DEA usually did not
                     correct, and DEA concluded that it could not capably perform or oversee
                     background investigations. Given DEA’s history of noncompliance, we
                     believe that it was reasonable for OPM to do reviews of DEA’s
                     investigations.

                     The frequency with which OPM reviewed DEA’s investigation program
                     appeared to be generally in line with the frequency with which OPM
                     reviewed other agencies. In addition to DEA, three other agencies—the
                     U.S. Marshals Service, the Small Business Administration, and the U.S.
                     Customs Service—possessed authority delegated from OPM to conduct
                     background investigations in fiscal year 1999. OPM reviewed the security
                     program of the U.S. Marshals Service in 1989 and 1999 (in progress as of
                     July 1999), the Customs Service in 1989 and 1994, and the Small Business
                     Administration in 1983 and 1992. In comparison, it reviewed the DEA
                     program in 1992 and followed up in 1998.



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             OPM reviewed a sample of the background investigation reports of the
             U.S. Marshals Service and the Small Business Administration from July
             1996 through April 1999, as it did for DEA. According to an OPM official,
             OPM did not routinely review the background investigation reports of the
             U.S. Customs Service because the Memorandum of Understanding and
             Agreement delegating the investigative authority to Customs did not
             include this requirement. However, one OPM review of 89 Customs
             investigations, completed in 1993, found 46 percent to be deficient.

             OPM was critical in its assessment of other agencies, as it was with DEA.
             For the aggregate samples of background investigation reports that OPM
             reviewed from July 1996 through April 1999, the rate of deficiency for the
             Small Business Administration was 75 percent. It was 93 percent for those
             from the U.S. Marshals Service. In comparison, the rate of deficiency for
             background investigation reports from DEA, which DEA and two
             contractors prepared over several years (1996 to 1999), was 98 percent.
             OPM computed these percentages by dividing the total number of reports
             it reviewed into the number it found deficient.

             Rather than raising a question regarding DEA’s independence and
             objectivity in choosing to review background investigations performed by
             DEA and its contractors, the evidence raises the question of why OPM did
             not act to rescind DEA’s delegated authority. According to OPM, the
             Administration announced in late 1994 that OPM’s Investigative Unit was
             to be privatized. The privatization occurred in July 1996. During that
             period, two private investigative firms sued OPM. According to OPM, these
             firms believed that OPM was going to take work away from them to
             support its privatized contractor. The suits were settled when OPM agreed,
             among other things, that it would not rescind delegations of authority,
             such as the DEA delegation, except for unsatisfactory performance. Also
             during this period, a former director of OPM testified before Congress on
             its privatization plans and emphasized that OPM did not intend to rescind
             any delegated authorities in order to give new business to the privatized
             company. According to OPM, the agency has been sensitive to these
             commitments as well as to the potential perceptions of OPM’s motivation
             for rescinding any such delegation.

             We have not evaluated OPM’s explanation of this situation. However, at
             your request we are separately reviewing related issues concerning OPM’s
             oversight function regarding background investigations.

             DEA had a long history of deficiencies in its personnel security program,
Conclusion   including background investigations done by both contractor and agency



             Page 13                           GAO/GGD-99-173 DEA Background Investigations
                      B-283410




                      employees that did not meet federal standards. Federal agency security
                      programs are aimed at protecting national security interests and are
                      predicated on thoroughly reviewing the backgrounds of federal job
                      applicants and employees to ensure their suitability for employment and/or
                      access to national security information.

                      Given DEA’s difficulties in ensuring the quality of its personnel
                      background investigations and its conclusion that it is not able to capably
                      perform or oversee background investigations, its consideration of
                      relinquishing its delegated authority is not unreasonable. Nor do OPM’s
                      periodic appraisals of DEA background investigations for adherence to
                      prescribed standards appear unreasonable. OPM has a mandated
                      responsibility to oversee agency security programs, including background
                      investigations, and appeared not to have treated DEA significantly
                      differently, in terms of oversight from other agencies with delegated
                      authority.

                      We received written comments on a draft of this report from the Director
Agency Comments and   of OPM and oral comments on August 17, 1999, from the Director, Audit
our Evaluation        Liaison Office, DOJ. The OPM Director said that she was pleased that we
                      concluded that OPM was objective and independent in its oversight of the
                      DEA personnel security program. Regarding the report’s statement that the
                      evidence raises a question of why OPM did not rescind DEA’s delegated
                      authority, the Director said that OPM had worked with DEA over several
                      years to help it correct deficiencies that OPM had identified and that
                      several factors mitigated against the rescission of DEA’s authority. In
                      addition to the factors cited on page 13 of this report, OPM said that it
                      continued to work with DEA and DOJ to resolve the continuing personnel
                      security problems and that OPM had let a reasonable amount of time
                      elapse for DOJ, which is responsible for all of the department’s security
                      programs, to take the necessary action. In October 1998, DOJ advised DEA
                      to relinquish its authority. OPM’s complete comments are reprinted in
                      appendix I.

                      The DOJ Audit Liaison Director orally provided technical and clarifying
                      comments, which we incorporated into this report. The Audit Liaison
                      Director said that DOJ had no other comments.

                      We are sending copies of this report to Senators Daniel K. Akaka, Robert
                      C. Byrd, Ben Nighthorse Campbell, Thad Cochran, Susan M. Collins, Byron
                      L. Dorgan, Richard J. Durbin, Judd Gregg, Orrin G. Hatch, Ernest F.
                      Hollings, Patrick J. Leahy, Carl Levin, Joseph I. Lieberman, Charles E.
                      Schumer, Ted Stevens, Fred Thompson, Strom Thurmond, and George V.



                      Page 14                            GAO/GGD-99-173 DEA Background Investigations
B-283410




Voinovich and Representatives Dan Burton, John Conyers, Jr., Elijah
Cummings, Jim Kolbe, Steny H. Hoyer, Henry J. Hyde, Bill McCollum, John
L. Mica, Patsy T. Mink, David Obey, Harold Rogers, Joe Scarborough,
Robert C. Scott, Jose E. Serrano, Henry A. Waxman, and C. W. Bill Young
in their capacities as Chair or Ranking Minority Members of Senate and
House Committees and Subcommittees. We will also send copies to the
Honorable Janet Reno, Attorney General of the United States, Department
of Justice; The Honorable Janice R. Lachance, Director, Office of
Personnel Management; and Mr. Donnie R. Marshall, Acting Administrator,
Drug Enforcement Administration, Department of Justice and other
interested parties. We will make copies of this report available to others on
request.

If you have any questions regarding this report, please contact me or
Richard W. Caradine at (202) 512- 8676. Key contributors to this
assignment were John Ripper and Anthony Assia.



Michael Brostek
Associate Director, Federal Management
   and Workforce Issues




Page 15                            GAO/GGD-99-173 DEA Background Investigations
Contents



Letter                                                                                           1


Appendix I                                                                                      18

Comments From the
Office of Personnel
Management




                      Abbreviations

                      DEA         Drug Enforcement Administration
                      DOJ         Department of Justice
                      OPM         Office of Personnel Management




                      Page 16                          GAO/GGD-99-173 DEA Background Investigations
Page 17   GAO/GGD-99-173 DEA Background Investigations
Appendix I

Comments From the Office of Personnel
Management




              Page 18      GAO/GGD-99-173 DEA Background Investigations
Appendix I
Comments From the Office of Personnel Management




Page 19                               GAO/GGD-99-173 DEA Background Investigations
Page 20   GAO/GGD-99-173 DEA Background Investigations
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