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 As a part of a sweeping overhaul, the Obama administration said it
will establish a National Background Investigations Bureau. It will
replace the Office of Personnel Management’s (OPM) Federal
Investigative Services (FIS), which currently conducts each year
more than 2 million background investigations for scores of federal
agencies.
The move, a stiff rebuke for FIS and OPM, comes after last year's
disclosure that a hack of OPM computers exposed the names,
addresses, Social Security numbers and other sensitive information
of roughly 22 million current and former federal employees and
contractors, as well as applicants for federal jobs and individuals
listed on background check forms.
Unlike FIS, the new agency's information systems will be handled by
the Defense Department, making it even more central to Washington's
effort to bolster its cyber defenses against constant intrusion
attempts by hackers and foreign nationals.
 The White House gave no timeline for implementing the changes, but
said some would begin this year. It will seek $95 million more in
its upcoming fiscal 2017 budget for information technology
development, according to a White House fact sheet.
A transition team will develop a plan to migrate existing functions
from FIS while continuing to provide investigative services, the
U.S. Director of National Intelligence James Clapper wrote in a blog
on the OPM website.
'NOT THERE YET'
Officials have privately blamed the OPM data breach on China, though
security researchers and officials have said there is no evidence
Beijing has maliciously used the data trove.
The hack prompted several congressional committees to investigate
whether OPM was negligent in its cyber security practices. OPM
Director Katherine Archuleta resigned last July as the government
intensified a broad push to improve cyber defenses and modernize
systems.
“Clearly we're not there yet," Admiral Mike Rogers, head of the
National Security Agency, said at a cyber security event in
Washington this week when asked about U.S. preparedness against
hacks. The damage done by cyber attacks, he added, “is going to get
worse before it gets better.”
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OPM has had a large backlog of security clearance files. This has
prompted it to rely on outside contractors for assistance. One of
these is Keypoint Government Solutions, which took over the bulk of
federal background checks after a competitor, USIS, was hacked.
Keypoint, which is owned by Veritas Capital, later suffered a breach
of its own networks.
No comment was immediately available from Keypoint or CACI
International Inc <CACI.N>, another contractor involved in
background checks. USIS filed for bankruptcy protection last year.
Brian Kaveney, who heads the security clearance practice at the
Armstrong Teasdale law firm, said the new agency was expected to
take over the 8,800 investigators who now work for FIS, including
2,300 government workers and 6,500 contractors.
The Defense Department and OPM did not respond when asked if the
government will still rely on support from contractors.
Representative Jason Chaffetz, the Republican chairman of a House of
Representatives panel that has been looking into the issue, said
Friday's announcement fell short.
"Protecting this information should be a core competency of OPM,"
Chaffetz said in a statement. "Today's announcement seems aimed only
at solving a perception problem rather than tackling the reforms
needed to fix a broken security clearance process.”
(Additional reporting by Mark Hosenball and Andrea Shalal; editing
by Kevin Drawbaugh, Susan Heavey and Alan Crosby)
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