People familiar with the situation said the alleged wrongdoing was so egregious a federal watchdog indicated he plans to recommend the Office of Personnel Management, which oversees most background checks, sever ties with USIS unless the company can show it is performing responsibly, The Washington Post reported Thursday.
The Post said it isn't known if USIS did anything improper when it conducted a 2011 background check on Snowden, the 30-year-old National Security Agency contractor who leaked documents about the NSA's cellphone and Internet monitoring programs. He gained access to those documents after he was cleared to work at NSA contractor Booz Allen Hamilton.
The OPM inspector general, working with the Justice Department, is looking into whether the Falls Church, Va., company failed to meet a contractual obligation that it would review all background checks it performed on behalf of government agencies, the people knowledgeable about the situation told the Post.
From 2008 through 2011, USIS allegedly skipped a second review in its background check process in as much as 50 percent of the cases, but relayed to federal officials the second reviews had been performed, the Post said.
The shortcut made it seem USIS was more efficient and may have triggered incentive awards for the company, the people briefed on the matter said. Investigators briefing lawmakers on the allegations said the strategy may have come from senior executives.
Ray Howell, USIS corporate communications director, declined to comment Thursday.
In a statement last week, USIS said it has been subpoenaed by the OPM inspector general in January 2012.
"USIS complied with that subpoena and has cooperated fully with the government's civil investigative efforts," the statement said. The company did not comment on the Snowden case.
Last week, Patrick E. McFarland, inspector general of OPM, expressed concern about Snowden's background check.
"We do believe that there may be some problems," he said.
A statement by the inspector general's office said it has 47 open investigations into alleged wrongdoing by individuals in the background-checks industry.