The private company responsible for vetting Edward Snowden for a security clearance is under criminal investigation for systemic failure to adequately conduct background checks.
US Senator Claire McCaskill announced at a Senate hearing on Thursday that USIS, a government contractor, conducted a background check for Snowden in 2011.
The 29-year-old systems administrator's clearance gave him access to classified documents he later leaked to the media, revealing secret surveillance by the National Security Agency.
"We are limited in what we can say about this investigation because it is an ongoing criminal matter, but it is a reminder that background investigations can have real consequences for our national security," McCaskill said. "Federal agencies, like the Defence Department, rely on these background investigations to make assessments of whether people should be trusted with our nation's most sensitive information. It appears that this trust has been broken."
USIS is the largest commercial provider of background investigations to the federal government. The company said in a statement that USIS had never been informed that it is under criminal investigation, although it did receive a subpoena for records from the inspector general of the Office of Personnel Management in January last year.
"USIS complied with that subpoena and has co-operated fully with the government's civil investigative efforts," the statement said. The company declined to comment on whether it had conducted a background check on Snowden.
Inspector General Patrick McFarland confirmed during the hearing of a Senate Homeland Security subcommittee that an investigation is under way.
He added that "we believe there may be some problems" with Snowden's background check, but declined to comment further. About 75 per cent of all background investigations on behalf of the federal government are conducted by contractors, and USIS performs 65 per cent of those investigations, McCaskill said. The Office of Personnel Management paid the company more than US$200 million last year for its work, she said.
McCaskill and other lawmakers at the hearing grilled federal officials about how the government screens employees and contractors who have access to some of the country's most sensitive information.
"How in the world does a contractor - a contractor who had been on the job for three months - get his hands on information detailing a highly classified government programme that he subsequently shares with a foreign media outlet?" asked Senator Jon Tester.
Nearly 5 million people have been granted security clearances by the US government and 1.4 million have top secret clearances, Tester said. McFarland, the inspector general, said he has been alarmed for years about the lack of oversight of the Office of Personnel Management's Federal Investigative Services programme.
It uses both contractors and federal workers to conduct 90 per cent of all background checks for the US government.
He requested more funding so that his investigators can perform regular audits.
McFarland testified that since 2007, at least 18 investigators have been convicted of fabricating background checks, casting doubt on hundreds of security clearances.
In those cases, the background investigators reported interviews that never occurred, recorded answers to questions that were never asked and documented records checks that were never conducted, he said.
One contractor faked 1,600 credit checks. As it turned out, her own background investigation had been faked by a background investigator in a separate case.