Tax Dollars Drained: The Underground Bureaucracy

Senator Rob Portman

Co-sponsor of the Security Clearance Oversight and Reform Enhancement Act, Senator Rob Portman believes that reforms will not only create a more efficient and effective clearance process, but one that will save taxpayer dollars.

Washington, D.C. – U.S. Senator Rob Portman (R-Ohio) today released the following statement in a monthly series highlighting Washington's wasteful spending during a time of record debt:

This month's example of government waste may surprise you. When a federal employee retires, you would think the processing of the retirement benefits is performed electronically in some office in Washington, D.C.

But actually, retirements are processed in Boyers, Pennsylvania almost entirely by hand by 600 federal employees in an abandoned mine 230 feet underground – at a cost of $56 million annually.  This same facility houses the processing of background investigations for security clearances. This labor and paperwork intensive system has led to rising costs, now over $1 billion annually. Quality issues are also a concern, particularly 660,000 investigations in recent years that, according to an Inspector General and the Department of Justice, lacked proper quality review and resulted in the granting of security clearances to the likes of Aaron Alexis, the Navy Yard shooter.


"We call our monthly examples of waste, 'Your Tax Dollars Down the Drain,' but never once thought we would talk about an underground operation," said Portman. "They say that sunlight is the best disinfectant to wasteful spending, and that may actually be the case here. At a time of record debt, it's irresponsible to have such an inefficient and costly process in place for federal workers. Just last week, I sent a member of my staff to visit the Boyers facility to get a firsthand look at how we can improve processes and technology to decrease costs, while also improving quality and timeliness – putting taxpayers' hard-earned dollars to better use."

The inefficient retirement system was recently investigated by the Washington Post. In 1960, the federal government was looking for an enormous place to store and process tens of thousands of files, and settled on an abandoned underground limestone mine in rural Pennsylvania. Here, federal employees, surrounded by 28,000 filing cabinets spread across multiple caverns, process 100,000 annual federal retirements by hand. And they do it in a mine so far under the ground that any warm food must be delivered because an open flame in a cavernous hole 230 feet underground could be catastrophic.

As technology has allowed families to shop and invest online, and new supercomputers can perform millions of complex calculations in seconds, the mine now takes 61 days to process a retirement claim file by hand. This is actually an improvement: Over the previous 35 years, the average processing time had ballooned from 61 to 156 days, before the recent hiring of 200 more workers finally restored processing times to their 1970s heyday.

Processing files by hand is also expensive. In the past five years, the cost has jumped 32 percent to $108 per retirement file (or surely more when files get misplaced in the mine, which happens too frequently).

A federal official described the entire operation as "very successful" to the Washington Post.

Actually, the federal government has spent $106 million on multiple initiatives to bring even quasi-modern technology to the retirement paperwork process – and failed every time. The last attempt, completed in 2008, resulted in a computerized system that reportedly made errors on 82 percent of test cases. It was scrapped.

Some say that Washington should be in control of more of the economy because government planners are more efficient than the disorderly private sector. In reality, we've seen that government can barely run a health exchange website, and now cannot even process federal retirements by computer.

In an effort to modernize this system, speed up retirement processing, reduce the error rate, and save taxpayer funds, Portman, Ranking Member of the Homeland Security and Governmental Affairs Committee, Subcommittee on Federal Programs and the Federal Workforce, joined several of his colleagues on a letter to the Director of the Office of Personnel Management requesting a detailed plan to improve the retirement processing system.  Last year, Senator Portman also joined Senator Jon Tester (D-MT), in co-sponsoring the Security Clearance Oversight and Reform Enhancement Act, which gave the Office of Personnel Management Inspector General necessary resources to conduct oversight of the background investigation process done at the same facility.  This provision was signed into law by the President on February 12, 2014.  Senator Portman also introduced an amendment to the FY2014 National Defense Authorization, which was later included in the bill signed into law, that called for a holistic examination of security clearance processes, both by the executive branch and the Government Accountability Office, in order to modernize the antiquated and costly process. 

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Security Clearance