MOSCOW (AP) — The U.S. State Department said Wednesday it has duly screened a Russian private security firm contracted to help guard the U.S. Embassy in Moscow amid reports that it was founded by a former KGB spy.

The State Department said Wednesday it had "vetted the company and the name of each individual identified or associated with Elite Security with relevant national and local agencies." A U.S. state procurement website indicated that September's contract was worth $2.8 million.

The State Department's statement follows a report in the Russian business daily Kommersant, which said Elite Security was founded by ex-KGB spy Viktor Budanov and is currently run by his son.

Kommersant said Budanov was a one-time boss of Vladimir Putin in East Germany when the Russian president served as a KGB officer there in the 1980s. Budanov also worked with British double agent Kim Philby in Moscow in the 1970s, helping provide his security.

In a 2007 interview, Budanov described his work with the KGB, saying he focused on counterintelligence and providing security for Russian diplomatic missions. Among other things, he emphasized his personal role in exposing Oleg Gordiyevsky, a KGB officer posted to the Soviet Embassy in London who worked for British intelligence.

Budanov started working for the KGB in 1966 and retired from duty in 1992 with the rank of general months after the collapse of the Soviet Union.

The signing of the contract with Elite Security follows Russia's decision in July to cap the number of American embassy and consular personnel at 455, which meant cutting 755 of its staff, most of them local hires, a move that came amid spiraling U.S.-Russia tensions.

"After Russia's unjustified decision to reduce the staff of the mission, including our local security service, we were forced to look for alternative ways to protect our facilities and personnel," the State Department said.

It said that its Diplomatic Security Service and U.S. Marines help provide "flexible and effective security" at U.S. diplomatic missions in addition to contracted guard services.

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Matthew Lee in Washington contributed to this report.