Bankrupt Security Firm Tapped Former Joint Chiefs Chairman

As US Investigations Services was working to hang on to hundreds of millions of dollars in federal contracts, the security screening firm called on a former chairman of the Joint Chiefs of Staff, Michael G. Mullen, for help.

Exactly what a former top military adviser to two U.S. presidents was doing at the beleaguered company has not been revealed. US Investigations is the firm that vetted Edward Snowden for work at the National Security Agency and Washington Navy Yard gunman Aaron Alexis for his federal contract work. Last year, it was hit with a massive cyberattack that exposed the personnel files of 25,000 Department of Homeland Security employees to hackers.

If the company was hauling out the heavy artillery to try to save its taxpayer-funded business, the effort failed. Now bankrupt, US Investigations, or USIS, won’t say when the retired admiral was hired.  It won’t say what he did. And it won’t say what it paid Adm. Mullen, who is identified as a company “insider” in court documents. Adm. Mullen did not respond to questions.

To be fair, it should be noted that the dissolving company isn’t telling what it paid any of its top-ranking executives. Neither is parent Altegrity nor the other businesses involved in the corporate group’s chapter 11 case. The companies redacted pay and other details on required bankruptcy reports without explanation or a court order permitting the secrecy.

Sources familiar with the situation say Adm. Mullen came on the scene in August 2014, “months after the cyberattack was discovered and revealed to the government.” It was a critical time for USIS, which had discovered the cyberattack about two months before.

On Aug. 1, the government signaled it would continue the contracts that made USIS the chief vetter of applicants for security-sensitive federal government work. But five days later, the feds issued a stop-work order, the beginning of the end of contracts that funneled $304 million in taxpayer dollars to US Investigations in the year ended June 30, 2014.

USIS wouldn’t say whether it tapped Adm. Mullen before or after it knew its business was in trouble.

By the end of September, the federal government contracts and the retired admiral were gone from US Investigations. The loss of the government work was “entirely unforeseen,” an Altegrity executive said in court filings.

By the close of 2014, Adm. Mullen was a senior adviser to Providence Equity Partners, the private equity firm that owns Altegrity and its businesses, including US Investigations. A Harvard Business School-trained manager, he serves on the boards of General Motors Co. and Sprint Corp. and speaks on global affairs and military policy in forums as varied as Comedy Central’s Colbert Report and The Wall Street Journal.

But he didn’t want to talk about US Investigations, which has a few pieces of work to complete before being liquidated in bankruptcy. Other Altegrity businesses that cater to the private sector will survive, if Altegrity’s turnaround plan pans out. Investigations firm Kroll provides due-diligence advisory services, data recovery and risk mitigation. HireRight conducts employment background screening.

Creditors can only guess how much Altegrity paid its leaders unless the Department of Justice steps in and objects to the unusual level of secrecy. Part of the price of getting court protection from creditors is disclosure of items like insider pay.

A study of some 250 major chapter 11 cases by the Journal a few years back found a handful of major companies hid their insider pay data from the public, usually without a court order. The practice stopped after the Office of the U.S. Trustee, an arm of the Justice Department, began questioning it in court. A spokeswoman for the U.S. Trustee’s office declined comment on US Investigations’ redactions.

Write to Peg Brickley at [email protected]