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USIS CEO Refuses to Answer Questions from Congress - Cummings Asks Issa for Transcribed Interview

Jun 30, 2014
Press Release

Washington, DC—Today, Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, sent a letter to Chairman Darrell Issa requesting that the Committee conduct a transcribed interview of Sterling Phillips, the CEO of U.S. Investigations Services, Inc. (USIS), a corporation that conducts more background checks than any other contractor for the federal government.

According to the Department of Justice, top USIS management devised a scheme of “dumping” incomplete background investigation reports – at least 665,000 – to the Office of Personnel Management without performing quality reviews required by its contracts. The Department filed suit against USIS for violating the False Claims Act and seeking more than $1 billion on behalf of taxpayers.

Cummings requested a transcribed interview due to the USIS CEO's repeated refusal to answer questions, both at a Committee hearing earlier this year where he testified and in response to follow-up questions sent by Issa on behalf of Cummings.

“USIS’s refusal to answer Committee questions is unacceptable, and it contradicts the oath Mr. Phillips took at the outset of the hearing to tell the entire truth about the role of his company in an alleged conspiracy to perpetrate a multi-year, billion-dollar fraud against the U.S. taxpayers,” Cummings wrote.

At the hearing, Cummings released a staff report revealing that after Providence Equity Partners purchased USIS in 2007 for $1.5 billion, the company adopted an aggressive new compensation plan to speed up its background investigations work. Cummings pressed Phillips for answers about USIS bonus policies during the period of alleged fraud, which included more than $1 million in bonuses to the former CEO.

Phillips confirmed that the bonuses were determined by Altegrity, a holding company that was formed by Providence Equity Partners, but he did not disclose the identity of any members of Altegrity's Board of Directors or officials from Providence Equity Partners.

In response to a letter from the Committee, Phillips' attorney responded via e-mail that "The company does not anticipate making a further response.”

Cummings wrote to Issa: “There have been numerous instances over the past several years when you have approved transcribed interviews of witnesses who you believed were not cooperating with the Committee’s investigations.  This case should be no different.” 

Click here to read a copy of the full letter.

Click here to read a copy of the Democratic staff report.

113th Congress