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Exclusive: U.S. Air Force sees no wrongdoing by Booz Allen in Snowden matter

The U.S. Air Force said it sees no evidence that a defense contractor that employed Edward Snowden is responsible for his disclosure of classified U.S. information, a finding that allows the company to continue doing business with the Pentagon. (KELO.KELQ)
The U.S. Air Force said it sees no evidence that a defense contractor that employed Edward Snowden is responsible for his disclosure of classified U.S. information, a finding that allows the company to continue doing business with the Pentagon. (KELO.KELQ)

By Andrea Shalal-Esa

WASHINGTON (Reuters) - The U.S. Air Force said it sees no evidence that a defense contractor that employed Edward Snowden is responsible for his disclosure of classified U.S. information, a finding that allows the company to continue doing business with the Pentagon.

Snowden, who is wanted in the United States on espionage charges, revealed details of secret government surveillance programs. He is believed to be holed up in the transit area at a Moscow airport, where he arrived on June 23 from Hong Kong.

The Air Force said Booz Allen Hamilton, also known as BAH, notified it about the Snowden case as required under an administrative agreement signed after another ethics lapse in 2012.

"At this time ... there is no evidence that at the time of Mr. Snowden's misconduct, BAH knew or should have known, approved, or acquiesced in Snowden's misconduct," an Air Force official told Reuters.

"There is no evidence that the Snowden matter constitutes a reoccurrence of the practices that led to the Air Force proposing BAH for debarment," the official said. "To date, the Air Force ... is satisfied with BAH's efforts to improve it ethics and compliance programs, and its internal controls."

Booz Allen Hamilton generated $5.76 billion in revenues, mainly through government work, in the year ended March 31, a drop of just under 2 percent from the year earlier. This is the first government agency to clear Booz Allen's handling of the Snowden case.

James Fisher, spokesman for Booz Allen, said the company had complied fully with its agreement with the Air Force, which requires notification of any further ethics incidents.

"Edward Snowden's actions were shocking and represented a grave violation of Booz Allen's code of conduct and core values. As a result, he was immediately dismissed by the firm," Fisher said. He said the company could not comment further due to the ongoing investigation of Snowden.

In 2012, the Air Force proposed banning the San Antonio office of Booz Allen and several current and former employees from bidding for new government work after an incident in which a new employee hired from the Air Force shared sensitive data about a pending government procurement.

The company was taken off the government's "excluded parties list" in April 2012, allowing it to compete again for Air Force contracts, after it signed a sweeping administrative agreement which will be in effect for three years.

In the 12-page agreement, the company acknowledged that the incident had revealed "ethical deficiencies and questionable business practices that may be systemic in nature" and outlined a series of measures aimed at shoring up its compliance.

Any further ethics violations could allow the Air Force to invalidate the agreement and ban Booz Allen from further government contracts, but such action appears unlikely, Air Force officials said.

The Air Force said it had suspended Snowden from contracting with the federal government, or from receiving other federal financial benefits, on June 11.

On Capitol Hill, lawmakers have called into question the vetting done by another private contractor, USIS, that allowed Snowden to receive top-secret clearance and secure a systems administrator job with Booz Allen, where he worked out of a National Security Agency facility in Hawaii.

Snowden has said he joined Booz Allen in March to gain access to certain confidential government documents. Prior to that, he had done NSA work as an employee of Dell.

Booz Allen is due to submit its latest quarterly report on ethics controls to the Air Force this month, the Air Force official said.

The Air Force continues to monitor the company's handling of the Snowden matter, which is being investigated by the FBI.

(Additional reporting by Phil Stewart; Editing by Marilyn W. Thompson and Stacey Joyce)

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