CG Carlyle Group Inc

Booz Allen Hamilton Holding Corp. said Thursday it had launched an external review of its security and staffing processes in the wake of its second major personnel scandal in three years.

The government services and defense specialist said it had hired former Federal Bureau of Investigation Director Robert Mueller to conduct the review.

The Justice Department in August charged Harold Thomas Martin with stealing top-secret documents and unlawfully taking government property. Mr. Martin worked for Booz Allen at the time and was fired by the company that same month.

Mr. Martin's lawyers declined to comment.

A judge last week ordered Mr. Martin remain in custody awaiting trial, though his lawyers indicated they would appeal, saying that Mr. Martin was a "compulsive hoarder" rather than a traitor. They argued the government had no legal basis to keep him incarcerated, and said he posed no flight risk. An appeal of the judge's ruling is set to be heard Friday in Baltimore.

Booz Allen also used to employ Edward Snowden, and later conducted an internal review after he leaked details of secretive government programs.

"We fired Harold Martin as soon as we learned of his arrest, and we have been fully cooperating with the FBI's investigation and reviewing this matter," said Craig Veith, vice president external relations at Booz Allen, in a statement.

He said the external review would encompass the company's security, personnel and management processes and practices.

Booz Allen has tried to distance itself from Mr. Snowden and stressed it has improved internal controls, but the company and the National Security Agency have faced fresh questions about how such breaches could happen twice in three years.

The company, which reports quarterly earnings next week, is one of an elite group of contractors that provides analysts and systems support to the NSA, the Pentagon and other U.S. intelligence bodies. In recent years, contractors have pursued more technical and profitable work in fields such as cybersecurity.

The company derives the bulk of its $5.4 billion in revenue in its last fiscal year from defense and intelligence agencies, and more than two-thirds of its 22,500 employees have security clearances.

Write to Doug Cameron at doug.cameron@wsj.com

(END) Dow Jones Newswires

October 27, 2016 19:15 ET (23:15 GMT)

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