The United States has awarded a contract to guard the U.S. embassy in Moscow to a company with KGB ties, The New York Times reports.

The State Department awarded the $2.8 million contract to Elite Security Holdings, a company co-founded by retired Russian general Viktor Budanov.

A State Department official told the Times that the company has been properly "vetted" and will only carry out security tasks previously handled by local guards hired by the embassy.

The firm will operate at the Moscow embassy, as well as U.S. consulates in three other Russian cities. U.S. Marines will still guard the grounds and high security locations of the outposts.

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Budanov, 82, previously led Soviet counterintelligence as the head of the KGB, where he oversaw now-Russian President Vladimir Putin when he was a young intelligence officer.

The former espionage agent worked against Western intelligence agencies during the early years of the Russian Federation under former President Boris Yeltsin.

The U.S. issued the contract to Elite Security after Putin's order that the U.S. embassy reduce its permanent staff to 455. Elite Security was found to be the only company with proper licensing for all four cities, despite efforts to contract American companies for the job.

The move to hire the Russian firm, which could be susceptible to state security influence, comes amid growing concerns over Moscow-backed efforts to undermine American elections.