Screeners Profit From Fed Take-Over

It's costing the government much more to screen air travelers than it cost the airlines because some of the private companies that hire the screeners have raised their rates — one nearly doubling them, says a government report.

The Transportation Department's inspector general also found cases where the companies billed the government for absent employees and work that was never completed. And it found lax oversight by government officials.

Rep. John Mica, the Republican chairman of the House aviation subcommittee, said higher pay is understandable but charging for services not performed is not.

"We cannot tolerate fraudulent billing," Mica said. "We'll have to track it down and conduct our proper oversight."

Before Sept. 11, private companies had contracts with airlines to screen passengers and their carry-on bags. After the terrorist attacks, Congress created the Transportation Security Administration, which was ordered to take over the contracts, worth $1.6 billion, and hire a federal work force to assume passenger screening duties in more than 400 airports by Nov. 19.

According to Alexis Stefani, the Transportation Department's assistant inspector general for auditing, the companies raised their rates for labor and overhead when the government started paying the bills in February. One company nearly doubled its overhead rate to $28 an hour and raised employee pay from $10 to $14.

The inspector general's staff visited six unidentified contractors at two undisclosed airports and found no government supervision while contractor employees arrived late, left early and signed in as though they worked an entire shift. "We saw virtually no onsite monitoring of screener contractors by TSA employees," the report said.

A separate review by the TSA discovered "internal controls were not followed, contractors billed TSA for employees who were on vacation, and TSA was overcharged for services not performed," the inspector general said in the report issued earlier this month.

Kenneth Quinn, an attorney representing several screening companies, said the higher costs are justified. He said security screeners were vastly underpaid before Sept. 11 because of pressure from the airlines to reduce costs.

Now, he said, "you need to make sure you're paying people adequately so they don't bolt knowing that they'll be out of a job" when the federal work force is in place.

Quinn also said the government appears to be doing a good job of supervising the companies and their screeners. "From my vantage point, the TSA has provided fairly active oversight," said Quinn, who cited a confidentiality agreement in declining to identify his clients.

The TSA did not return repeated calls seeking comment.

The government was supposed to negotiate prices and terms with the screening contractors after taking over the contracts six months ago, but hasn't done so yet, the inspector general said. The TSA instead awarded "letter contracts" to the companies, which don't spell out detailed terms.

The agency is in the midst of hiring about 30,000 screeners. As of Aug. 20, screeners who work for the federal government were on the job in 37 of the 424 airports that will have federal workers.

Many of the privately employed screeners are getting jobs as federal screeners, earning between $23,600 and $35,400 a year plus health insurance, retirement benefits and paid leave. As private-sector screeners they generally earned about $10,000 a year, and often received no benefits.

Some, though, can't meet the government's higher standards: They must be U.S. citizens with a high school diploma

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