What does it mean when a private investigator with homeland security is doing a background investigation?
It is routine. Any application for employment with the federal government will trigger this. They (private contractors) conduct most of the background checks because they have a contract with the federal government. Even after the initial clearance, they will do one every five years. They are not under any kind of watch, because they would not be coming and talking to you, if this were the case. Background can also occur for other routine purposes, such as application for naturalization. If you do not know them just say so. Do not speculate, the neighbor either works for the feds or is in the process of getting hired. Talking to neighbors is usually the last step.