The U.S. Securities and Exchange Commission did not properly vet as many as 70 contractors with possible criminal records, including one man who later assaulted his girlfriend in a lobby at SEC headquarters, the agency's internal watchdog has found.

A summary of the inspector general's findings was publicly released last fall in a semiannual 2012 report to Congress. A full redacted copy of the investigative report was obtained by Reuters last week through a Freedom of Information Act request.

The report faulted the SEC for providing a preclearance waiver to the unnamed enforcement division contactor that granted him full access to the building and information technology systems for several years.

Preclearance waivers are sometimes issued to contractors to allow them to start working before a full background check is completed.

The document did not include details about the contractor's criminal record.

It also found that 40 to 70 other contractors at the SEC may also have had criminal pasts, but the SEC did not take the proper steps to weigh all of the facts about their backgrounds to make sure they could work for the agency and did not pose a security threat.

It was not clear from the report whether any of those contractors actually did have criminal backgrounds, and whether they involved minor offenses and misdemeanors or serious felony convictions.

SEC spokesman John Nester said the agency has implemented numerous changes since the report was completed, from installing additional physical security barriers to putting the SEC's security staff in charge of criminal background checks instead of human resources.

A criminal background does not necessarily disqualify a person from federal service. Federal guidelines call for several factors to be weighed, including the seriousness of the conduct, how long ago it occurred, and the age of the person at the time the conduct occurred.

The other contractors who also had preclearance waivers were all screened and met the proper guidelines, Nester added.

"The issues have been resolved to the (Office of the Inspector General's) satisfaction," Nester said.

The inspector general also noted that the enforcement contractor highlighted in the report was removed from federal service.

Republican Senator Charles Grassley of Iowa said the watchdog report sheds light on an area of the SEC that Congress should oversee more closely.

"The SEC controls sensitive information that it has to secure from convicted criminals and non-employees walking in off the street," Charles Grassley said in a statement to Reuters.

INTERNAL COMPLAINT

The allegations about the enforcement contractor came to light last year, after David Weber, a former top investigator in the inspector general's office, launched a probe into whether the SEC's security personnel had mishandled the matter and failed to report it to law enforcement.

The SEC suspended and later fired Weber after employees complained he wanted to arm himself and other staff in the inspector general's office.

He filed a lawsuit alleging he had been fired for blowing the whistle on misconduct he had uncovered. Weber reached a $580,000 settlement with the SEC in June.

In his lawsuit, he discusses the issues with the contractor and the flaws in the SEC's hiring and vetting process.

"Despite this criminal background, the contractor had been permitted to work with the SEC's most sensitive enforcement data as an enforcement forensic IT contractor for years," Weber said.

The watchdog's report redacts the name of the contractor and the details of his criminal record, though Weber's lawsuit says he was on an early parole release from a 10-year prison sentence for drug distribution.

The report says that on January 11, 2012, at 8:41 p.m., the contractor gave his girlfriend improper access to the building by swiping his card to let her inside without registering her as a guest.

A few hours later, a security camera caught the contractor and his girlfriend engaging in a pushing fight until she broke away and ducked under a turnstile, setting off an alarm, the report said.

(Reporting by Sarah N. Lynch; Editing by Karey Van Hall and Richard Chang)