- The problems with the 1997 privatization of the Office
of Federal Investigations (OFI), which ultimately became U.S. Investigations
Services (USIS), now owned by The Carlyle Group, were known to members
of Congress, according to a former OFI official. A number of employees
of OFI, which was part of the Office of Personnel Management (OPM) before
privatization, refused to accept the terms of the Employee Stock Ownership
Plan (ESOP). The late Democratic Senator Paul Simon of Illinois was particularly
opposed to the privatization of OFI.
- After OFI became USIS, the timeliness and quality of
the security background checks conducted on Federal employees quickly deteriorated
according to former OFI employees. They saw USIS being turned into a cash
laundering operation whereby a few officials at the top became instant
millionaires. Insiders also report that USIS "branched" into
other operations never before conducted by OFI/OPM. These other operations
were the focus of Col. Ted Westhusing's investigation when he was "suicided"
- It is also noteworthy that USIS assumed control of a
converted limestone mine in Boyers, Pennsylvania. The mine, built during
the Cold War to safeguard files in the event of a nuclear conflict, contains
millions of government files, including those held by the federal Employee
Service and Records Center. That means that The Carlyle Group now has access
to sensitive personnel files on millions of current and past government
employees as well as contractors who have applied for security clearances.