FAA’s Federal Air Marshal program expanded the Sky Marshal program, which was established as part of the Customs Service in the 1970s to deter hijackings to and from Cuba. Shortly after TWA Flight 847 was hijacked in Athens, Greece, in June 1985, then President Ronald Reagan called for an expansion of the Sky Marshal program. On August 8, 1985, the Congress enacted the International Security and Development Cooperation Act, which established the statutory basis for the program within DOT, which further delegated the responsibility to FAA. Since then, the Federal Air Marshal program has provided specially trained, armed teams of civil aviation security specialists for deployment worldwide on antihijacking missions. As a result of the events of September 11, 2001, the President and the Congress decided to rapidly expand the Service. On September 17, 2001, FAA began to develop a plan to recruit federal air marshals in unprecedented numbers. Accordingly, FAA designed a process and put together a team of specialists, incorporating resources from its Human Resource Management, Aviation Medical, Civil Aviation Security, and Federal Air Marshal Training organizations to implement the recruitment process. The process was designed to ensure that each air marshal candidate met the medical entry standards, passed DOT’s drug-testing program, and was preliminarily judged suitable to obtain a top-secret clearance, which is required for permanent employment with the Service. As part of the assessment, each candidate was required to participate in a security interview with an investigator from FAA, OPM, or the U.S. Investigative Services (an OPM contractor), as well as interviews with representatives of FAA’s Office of Human Resource Management and the Service. In October 2001, FAA implemented this recruitment process, and the Deputy Secretary of Transportation also set July 1, 2002, as the deadline for recruiting, hiring, and training enough federal air marshals to provide coverage on flights that posed high security risks. In November 2001, after the Aviation and Transportation Security Act was passed, TSA assumed FAA’s responsibilities for aviation security and supported FAA’s recruitment effort through July 2002. Between October 2001 and July 2002, TSA received nearly 200,000 applications for federal air marshal positions. Thousands of applicants were assessed for employment, and TSA, through OPM, initiated full background investigations for top-secret clearances. Other federal agencies also made law enforcement officers available to augment the Service until TSA could hire, train, and deploy the first few classes of new air marshals. See appendix II for a demographic profile of the Service’s expanded workforce. With expansion, the Service’s annual budget grew from $4.4 million for fiscal year 2001 to $545 million for fiscal year 2003. Currently, the Service operates a headquarters office in Virginia, 21 field offices, and a specialized air marshal training and human resource facility in Atlantic City, New Jersey. Basic law enforcement training takes place at the Federal Law Enforcement Training Center in Artesia, New Mexico. See appendix III for a map of these facilities and appendix IV for a time line of the major organizational events affecting the Service since September 11, 2001. DHS brings together some 23 federal agencies comprising over 100 organizations, including the Federal Air Marshal Service, in what the department describes as the most significant transformation of the U.S. government since the merger in 1947 of the various branches of the armed forces into the Department of Defense. DHS is divided into five directorates, one of which, Border and Transportation Security, includes both TSA and ICE. Among other organizations, ICE includes a portion of the former Immigration and Naturalization Service, now called the Bureau of Citizenship and Immigration Services; the U.S. Customs Service now called Customs and Border Protection; and, as of November 2, 2003, the Federal Air Marshal Service. To expedite the deployment of thousands of air marshals, the Service obtained preliminary background checks and provided abbreviated training before deploying air marshal candidates on flights. As a result, the Service was able to meet the Deputy Secretary’s deployment deadline and carry out its mission. To deploy its expanded workforce as quickly as possible between October 2001 and June 2002, the Service followed the same expedited background check procedures that federal agencies have used since 1995, when Executive Order 12968 authorized the temporary use of interim security clearances. Under these procedures, candidates who require security clearances and pass preliminary background checks may, within about 24 hours, obtain interim security clearances that allow them to work until their full background checks have been completed and they obtain their final clearances. A preliminary background check consists of an interview with a security specialist; a review of an applicant’s responses to a standard questionnaire for national security positions; a criminal history check, based on fingerprints and a review of biographical data from National Crime Information Center files; and credit reports. An interim security clearance may be revoked at any time if unfavorable information is identified during an investigation. Between October 2001 and July 2002, thousands of candidates were assessed for employment, and TSA, through OPM, initiated full background investigations for top-secret clearances. According to TSA management, the majority of the candidates passed the preliminary background checks and obtained interim security clearances that allowed them to work while their full background checks were being completed. Less than a quarter of the candidates did not pass the preliminary checks because of bankruptcy, bad credit, or other problems. TSA placed these candidates on a “pending/ready” list and did not allow them to work as air marshals, but it pursued full background investigations for them because many of the issues identified during preliminary background checks are minor and are favorably resolved during full background investigations. Full background checks for thousands of candidates identified a small number as unsuitable. In June 2003, the Service placed 80 air marshal candidates on administrative leave while TSA resolved issues that surfaced during full background investigations. By August 2003, 47 of these candidates had received their top-secret clearances and have since been returned to flight status. Of the 33 remaining candidates, 19 have been denied clearances, and the Service is taking steps to terminate their employment; 4 have been approved for, but have not yet received, top- secret clearances; 7 have resigned; and the remaining 3 are awaiting TSA’s approval of their top-secret clearances. The Service said it has continued to identify some candidates as unsuitable, and as of October 2003, 14 air marshals were on administrative leave because of issues that surfaced during full background checks. When definitive information for each of these cases is obtained, the Service said, the air marshal would be returned to flight status or steps would be taken to terminate the air marshal’s employment. During our review, we found that the background investigations used to grant top-secret clearances for air marshals were not being expedited as requested. According to TSA, an expedited background investigation costs $3,195 and should be completed within 75 days, whereas a regular background check costs $2,700 and should be completed within 120 days. Consequently, for every 1,000 background investigations, the Service paid a premium of about $495,000. TSA paid the expedited fees to OPM up front, as required, but as of July 2003, about 23 percent of the air marshals were still operating under interim security clearances. Some candidates had been awaiting final clearances for up to a year. The Service told us in April 2003 that it had, on numerous occasions, raised concerns about the delays in processing final security clearances but had met with little success. Additionally, the Service said that its efforts to reclaim the difference in cost were unsuccessful. DHS said that TSA’s Credentialing Office had taken steps since June 2003 to ensure that every active air marshal was operating under a top-secret clearance; and as of October 2003, about 3 percent of the active air marshals were operating under interim security clearances. According to OPM, the primary reason for these clearance-processing delays is that the agency has received an unprecedented number of requests for background investigations governmentwide since September 2001. For fiscal year 2002, OPM’s data indicated that the average processing time for 75-day expedited background checks was 96 days. OPM said that the expedited requests received higher-priority processing than the regular (120-day) background checks, resulting in faster turnaround for services related to the expedited requests. OPM added that its contractor charges premiums for expedited requests because the costs for these requests are higher. Consequently, according to OPM, no price adjustments are made when overall deadlines are missed. While the Service is not responsible for the delays in completing air marshals’ full background investigations, we found that it could have provided OPM with information for scheduling the investigations more efficiently. As candidates applied for positions between October 2001 and June 2002 and their preliminary background checks were completed, the Service offered conditional employment to some of the candidates and, as discussed, placed others on a “pending/ready” list. However, the Service did not make this information available to OPM. As a result, some potential employees received their top-secret clearances ahead of other candidates who were being trained or deployed on flights. We brought this issue to the attention of the Service in March 2003; and in May, the Service sent OPM a list of candidates and asked OPM to give highest priority to investigations of those who were already deployed on flights. In addition, the Service has asked OPM to schedule the investigations for senior managers first and then to schedule investigations for other applicants on a first-in, first-out basis. On May 28, 2003, the Service also detailed a liaison from its Office of Field Operations to assist TSA’s Office of Security in setting priorities for reviewing and adjudicating the backlog of background investigations. To deploy the requisite number of air marshals by the Deputy Secretary’s July 2002 deadline, the Service revised and abbreviated its training program.