Government Contractors Conducting Investigations: A New Normal?

By Dan Portnov

Here in DC, government contractors are everywhere and vital to keeping nearly all federal agencies running. Absent an Edward Snowden-level scandal, the integration of contractors and their day-to-day work in government offices largely goes unnoticed (and underappreciated).

Snowden-sized bumps in the road notwithstanding, the slow creep of outsourcing, contracting and privatization of government functions has been a predictable result of recent Republican administrations. For example, background investigations of federal employees have been privatized – routinely outsourced to private contractors – since 1996.

Recently, however, the roles of private contractors in regulatory, civil and criminal investigations have grown. Contractors, some on location with the government agencies they serve, have taken on an increased role in conducting investigations as well as making key contacts and decisions throughout the investigation’s course.

We have seen this happening in our practice, but sense it may be a trend. This post is not so much to inform but to see if any of our fellow defense attorneys have had their own experiences involving investigations with “financial investigators,” “auditors,” “consultants,” or any other titles that private contractors may use.

Digging into the world of DOJ professional services contracts does not yield much clarity. The earliest reference found to outsourcing investigative functions by DOJ was the DOJ Asset Forfeiture Program’s (AFP) use of Forfeiture Support Associates (FSA) since 2004.[1] Anecdotally, the relationships between federal agencies and private contractor investigators goes back even further.

Per the 2015 renewal of the AFP/FSA contract, the “primary purpose of this contract is to support for [sic] law enforcement related investigations” and FSA personnel may be used within the contract’s scope of work by any DOJ component, including the FBI, Drug Enforcement Administration and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The categories of work provided by contractors include: “clerical, records examiners, data analysts, cashiers, drivers/messengers, legal clerks, paralegals/legal assistants, law clerks, property custodians, procurement technicians, training technicians, civil investigators, and supervisors for the various functions.”

Other federal agencies also use the investigative services of contractors: the FDA’s Office of Criminal Investigations, the IRS’ Criminal Investigations and Homeland Security each engage investigators to support investigations that may result in criminal charges.

Contractors who assist in investigations must have the requisite clearance, as a primary matter. Chances are, this person worked previously in an audit or investigative capacity at a federal agency and is familiar with how regulatory and criminal investigations work. Behind the scenes, contractors work to review and analyze data, prepare reports and provide subject matter expertise on complicated investigations for dozens of federal agencies.

So what, if anything, is the concern with using contractors to perform visible roles in civil and criminal investigations?

I can think of a major one: the hesitation in negotiating investigative scope, timing and cooperation with someone whose e-mail address ends with a “.com” instead of “.gov,” especially if no government lawyer is present. It is unclear just what authority a contractor has to bind the government to a concession or deadline in a criminal investigation.  Just as disconcerting is the potential that a lawyer may be invited to discuss facts and legal positions with a potential fact witness, yet who is not ostensibly guided by official agency policy, like say, the FBI Domestic Investigations and Operations Guide (DIOG). Further, the relationship between contractor and agency is akin to service provider and customer, potentially creating different incentives and performance metrics from special agents and investigators.

None of the US Attorneys’ Manual, the FDA-OCI Manual, or IRS Criminal Investigations Manual address the use or role of government contractors in investigations (I checked, dear reader, to spare you the agony of having to). Additionally, the Scope of Work or individual task orders for contracts awarded to companies like FSA are deliberately broad or silent on the use of contractor personnel on the front lines of investigations.

In our experience, the presence of a government contractor as the lead investigator and government contact in lieu of an agent or AUSA has raised questions and led to (initially) awkward and stilted conversations. Thus, I will end this post with an open invitation to comment: has anyone had an experience with a government contractor leading an investigation and any resulting takeaway that they can share?

Disclaimer: we have had several investigations where government contractors have taken on roles traditionally performed by agents or AUSAs. Though unexpected, we have not had any reason to doubt the professionalism of any individual with whom we have dealt.

[1] Admittedly, my “digging” was limited – client work takes precedence.

This entry was posted in Criminal Investigation, DOJ policy and practice. Bookmark the permalink.

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