SAN FRANCISCO INTERNATIONAL AIRPORT / Screening tests were sabotaged / Security workers were warned when undercover agent arrived

SCISSORS03_018_MJM.jpg A TSA (Transportation Security Administration) baggage screener takes a close look at passenger carry-ons at the domestic United security checkpoint at SFO. Federal security has decided not to confiscate scissors from air travelers before they get on the plane. The TSA says it has more-pressing security concerns than scissors, which turn up in one-fourth of the bags, particularly now that cockpit doors are reinforced. Event in San Francisco, CA Photo by Michael Maloney / The Chronicle MANDATORY CREDIT FOR PHOTOG AND SF CHRONICLE/ -MAGS OUT less SCISSORS03_018_MJM.jpg A TSA (Transportation Security Administration) baggage screener takes a close look at passenger carry-ons at the domestic United security checkpoint at SFO. Federal security has decided ... more Photo: Michael Maloney Photo: Michael Maloney Image 1 of / 1 Caption Close SAN FRANCISCO INTERNATIONAL AIRPORT / Screening tests were sabotaged / Security workers were warned when undercover agent arrived 1 / 1 Back to Gallery

Federal transportation officials and a private security firm at San Francisco International Airport worked together to undermine a federal investigation of passenger screening at security checkpoints, according to a report released Thursday by the U.S. Department of Homeland Security.

For 16 months ending last year, Transportation Security Administration employees tipped off screeners from Covenant Aviation Security that undercover agents were on their way to the airport's checkpoints to test whether the screeners were properly inspecting passengers and their carry-on luggage, the report said.

Despite the charges, the private security firm was rehired two weeks ago with a $314 million, four-year contract at the airport to screen passengers and checked bags. Employees of the firm and the security agency were disciplined as a result of the investigation but none lost their jobs.

"Covert security testing at SFO was compromised," says a 24-page report signed by Homeland Security Inspector General Richard L. Skinner. The report also found that at least one security breach was not reported to Transportation Security Administration headquarters. In that incident, TSA officials failed to report a security breach, when a screener did not sufficiently examine a passenger at a checkpoint. The inspector general's auditors also found that TSA officials at the airport became aware in January 2005 that they had not properly reported to headquarters some of the prohibited items that were being confiscated by their screeners -- namely box cutters and knives with blades of 3 inches or longer.

Federal officials say the TSA's internal affairs unit and the inspector general's office routinely examine the security of U.S. airports by sending undercover testers through passenger security checkpoints at U.S. airports -- with false identification, contraband or suspicious behavior.

From August 2003 until May 2004, TSA officials and Covenant managers at the airport "notified screening personnel in advance when a tester was approaching a checkpoint and provided their descriptions," the report states.

Officials in the airport's screening control center tracked the undercover testers with surveillance cameras and on foot, the report said, and "broadcast descriptions and locations of testers to the checkpoints to assist supervisors in identifying testers and to facilitate passing the covert penetration tests."

According to the report, the practice of notifying SFO passenger screeners in advance of covert testers stopped in May 2004, when a Covenant employee in the airport's screening control center refused to provide the descriptions and locations of testers and urged Covenant's management to intervene.

However, the report said, TSA and Covenant officials continued until January 2005 to notify Covenant personnel in SFO's screening control center "of the start of covert security testing and directed them to notify checkpoint-screening supervisors that covert security testing was beginning."

After the inspector general's undercover tests in January 2005, TSA officials established a new protocol that prohibits anyone in the airport's screening control center to notify checkpoint screening supervisors that covert testing has begun.

"We've got some new internal mechanisms with Covenant so it won't happen again, and we have full confidence in Covenant," TSA spokesman Nico Melendez said. "At no time was the security of the airport in jeopardy."

According to the report, TSA officials denied instructing Covenant personnel to tip off screeners about the location of testers or their methodologies. However, Covenant employees provided evidence that the order to tip off screeners came from an unnamed TSA manager at the airport.

Phone calls to Covenant's officers and managers in Illinois and San Francisco were not returned.

Tamara Faulkner, a spokeswoman for the Homeland Security Department's inspector general, declined to elaborate on the audit. "The reports stands by itself," she said.

She said the office was contacted by TSA's internal affairs unit in February 2005 to investigate the matter. She said auditors pursued the case from May to October last year.