Background Investigations: Program Deficiencies May Lead DEA to
Relinquish Its Authority to OPM (Letter Report, 09/07/1999,
GAO/GGD-99-173).

Pursuant to a congressional request, GAO provided information on
background investigations conducted by the Drug Enforcement
Administration (DEA), focusing on: (1) the circumstances that led DEA to
consider relinquishing its authority to conduct personnel background
investigations; and (2) whether the Office of Personnel Management (OPM)
acted in an independent and objective manner in choosing to review DEA
and its background investigations.

GAO noted that: (1) a series of evaluations in the 1990s critical of
DEA's background investigations and personnel security program caused
DEA to consider relinquishing its background investigation authority;
(2) the findings of OPM's assessments over much of the 1990s, an
assessment by the Department of Justice (DOJ) in 1998, and its own
assessment in 1999 triggered DEA's consideration of this issue; (3)
DEA's relinquishment of investigation authority would be consequential
because DEA and its contractor performed an estimated 5,600 background
investigations in 1998; (4) 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;
(5) DOJ audited DEA's personnel security program in 1997 and found
deficiencies similar to what OPM had found in 1992 and again in 1998;
(6) based on the DOJ audit and the recurring finds of OPM, DOJ's
Assistant Attorney General for Administration told the DEA Administrator
in October 1998 that he believed that DEA should relinquish all of its
background investigation authority to OPM; (7) 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; (8) this
lack of capability allowed security clearances to be granted, regardless
of whether the related background investigations were adequate; (9) 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; (10) 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; (11) 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; and (12) OPM appeared to have
been objective and independent in choosing to review DEA's personnel
security program and background investigations.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-99-173
     TITLE:  Background Investigations: Program Deficiencies May Lead
	     DEA to Relinquish Its Authority to OPM
      DATE:  09/07/1999
   SUBJECT:  Federal employees
	     Personnel management
	     Human resources utilization
	     Security clearances
	     Interagency relations
	     Personnel recruiting
	     Internal controls

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    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 investigation function.1 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 1The 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. Page 1
    GAO/GGD-99-173 DEA Background Investigations B-283410
    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. Page 2                              GAO/GGD-99-
    173 DEA Background Investigations B-283410 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 OPM.2 Agencies may
    request delegated authority from OPM to conduct or contract out
    investigations of their own employees and applicants. 2The
    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, Page 3
    GAO/GGD-99-173 DEA Background Investigations B-283410 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. Page 4
    GAO/GGD-99-173 DEA Background Investigations B-283410 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. Page 5
    GAO/GGD-99-173 DEA Background Investigations B-283410 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 and because of
    an assessment DOJ made in 1997. DOJ initiated discussions
    Background                      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. Page 6
    GAO/GGD-99-173 DEA Background Investigations B-283410 Through a
    Memorandum of Understanding and Agreement with OPM, DEA OPM
    Continually Found          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
    and its contractors.3 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. 3The 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. Page 7
    GAO/GGD-99-173 DEA Background Investigations B-283410 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. Page 8
    GAO/GGD-99-173 DEA Background Investigations B-283410 In addition
    to OPM reviews, DEA's security program was subject to DOJ
    Requested That DEA           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. In the Spring of 1999,
    DEA assessed its personnel security program, DEA Conducted a Self-
    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 B-283410 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 Page 10
    GAO/GGD-99-173 DEA Background Investigations B-283410 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. Page 11
    GAO/GGD-99-173 DEA Background Investigations B-283410 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. If DEA were to
    relinquish its background investigation authority to OPM,
    Objective and         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. Page 12
    GAO/GGD-99-173 DEA Background Investigations B-283410 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 1 Letter 18 Appendix I
    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 Ordering Information The
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