[Congressional Record Volume 142, Number 11 (Friday, January 26, 1996)]
[Senate]
[Pages S498-S499]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SIMON:
  S. 1532. A bill to provide for the continuing operation of the Office 
of Federal Investigations of the Office of Personnel Management, and 
for other purposes; to the Committee on Governmental Affairs.


     THE OFFICE OF FEDERAL INVESTIGATIONS PRIVATIZATION ACT OF 1996

 Mr. SIMON. Mr. President, 1 year ago, as part of the National 
Performance Review, the administration announced that the Office of 
Personnel Management [OPM] would privatize its investigative branch, 
the Office of Federal Investigations [OFI]. The Treasury and Postal 
Service conference report directs OPM not to implement a reduction in 
force before March 31, 1996, in order to allow the GAO to conduct a 
cost-benefit analysis. OPM is prepared to initiate an employee stock 
ownership plan [ESOP], which would have a sole source contract with OPM 
for the first 2 to 3 years, after which contracts would be offered to 
private firms. I am very concerned that privatization is 

[[Page S499]]
not the best approach in this important area.
  Today I offer legislation that would prevent immediate privatization 
of this extremely important Government function. For over 40 years, the 
OFI has been responsible for conducting background investigations for 
potential employees of various agencies within the Federal Government, 
including the Department of Energy, the Department of Justice, and the 
Treasury Department. Overall, OFI conducts about 40 percent of all 
Federal background investigations for positions ranging from 
bureaucratic responsibilities to high-ranking positions requiring 
substantial security clearances. In my view, shifting this 
responsibility to the private sector raises a host of extremely 
important questions which must be addressed before the decision to 
privatize is made.
  First, we must ensure that our national security is not in any way 
jeopardized by a move to privatization. Currently, OFI does background 
checks on individuals that will ultimately have access to top secret 
information, including weapons systems and nuclear energy data. We need 
to ask ourselves if this is the type of information that we want a 
private investigator to have access to. If the answer is ``yes,'' 
certainly we need to carefully review the safeguards needed to ensure 
that our national interests remain secure.
  The ability of private firms to maintain the privacy of sensitive 
records is another area that needs to be looked at closely. A private 
contractor would potentially have the ability to amass large quantities 
of information on Government employees. Although OPM has suggested that 
they would have the ability to keep records private, I have not heard 
specific measures that could be taken to guarantee this. Serious study 
must be given to what measures can and should be taken to protect 
privacy.
  We must also ensure that quality investigations will continue to be 
conducted. The Federal Government currently uses private investigators 
for a very small fraction of background checks. The only experience 
with private investigators on a large scale produced numerous 
investigations that were not up to standard, or, even in a fraction of 
cases, were falsified. This must not happen again. What safeguards can 
and should OPM put in place to ensure that quality is maintained? We 
must be certain that quality can be maintained before we make the 
decision to privatize.
  It is also important to ask ourselves if private investigators will 
be able to provide the best available information to Government 
agencies. Will they have difficulty obtaining vital information from 
law enforcement officials? In a preliminary study, the General 
Accounting Office [GAO] determined that law enforcement officials may 
be reluctant to give out sensitive information to private 
investigators. This issue deserves further study.
  I have asked the GAO, as part of their ongoing cost-benefit analysis, 
to address my concerns and report their findings to me before the end 
of January, 1996. In addition, I sent a letter to a number of Federal 
agencies asking for their input on the effect of privatization. In 
response to my inquiry, I was told that privatization could cause 
disruptions to operations and that the quality of investigations could 
suffer. I urge my colleagues to think carefully about the negative 
impact that may be created by privatization.
  My comments are not meant to imply that private contractors cannot 
perform top quality investigations while also ensuring privacy and 
protecting our national security. It is certainly conceivable that they 
could. However, before this decision is made, we must be sure that 
adequate study of the potential impact has been conducted.
  The legislation I offer today would prevent privatization from 
occurring for 2 years, during which time OFI would be prohibited from 
reducing its number of full-time employees. In addition, the bill would 
require OPM and the GAO to issue a comprehensive report detailing the 
likely effect of privatization on all of the issues that I have 
addressed.
  I urge my colleagues to support this legislation. While I certainly 
support the goals of the Clinton administration's National Performance 
Review, and applaud efforts to eliminate Government waste, Federal 
investigators employed by the government have served all of us 
extremely well, and we should proceed with great caution before 
changing this role.
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