A company linked to an alleged UVF leader earned more than £300,000 from police building work, the PSNI has confirmed.
Richard Jameson's family firm earned the cash for unspecified contracts, the police confirmed in correspondence with the father of a teenager killed by UVF members.
But PSNI Deputy Chief Constable Paul Leighton said there is no evidence that Jameson "circumvented our vetting procedure" and his family have repeatedly denied that he was involved with the UVF.
Mr Leighton said there was no information held by the PSNI that would "by or in itself" preclude Jameson's company from being awarded contracts. And he said the PSNI may continue to use the company if they successfully tender for a contract.
"Our vetting of civilians is undertaken within a framework agreed with the Northern Ireland Office," Mr Leighton said.
"An identical process is followed in each case irrespective of the individual concern."
Jameson, a 46-year-old father of three, was shot dead by the LVF on January 10, 2000.
His murder turned a dispute between the LVF and UVF into a full-blown feud that claimed the lives of teenagers David McIlwaine and Andrew Robb less than a month later.
David's father, Paul McIlwaine, wrote to the PSNI with British Irish Rights Watch, a human rights organisation, to ask about contracts awarded to Richard Jameson and another man alleged to be a UVF leader. Mr Leighton wrote back confirming that contracts worth £320,000 were awarded to the family firm on unspecified dates.
After his death, security sources alleged that Richard Jameson was the UVF commander in Mid Ulster. His family said he had been killed because he opposed LVF drug dealing in the area.
It was also reported that Jameson had been working in Ballykinlar Army base days before his death.
The firm acknowledged carrying out work for the security forces after another brother, David, lost a leg in a 1991 IRA bomb attack. Bobby Jameson, the managing director of the company, said his brother David had been targeted because of the company's work for the security forces.
Richard Jameson's murder was linked to a dispute in a Portadown social club on New Year's Day 2000, involving LVF prisoners who were out on Christmas leave. He was shot nine days later.
According to court hearings, David McIlwaine and Andrew Robb were murdered on a night out after Robb made disparaging comments about Richard Jameson.
The teenagers' throats were cut and they were stabbed repeatedly by a remote lane outside Tandragee, Co Armagh.
Paul McIlwaine has asked Policing Board members to raise the matter with the Chief Constable at their next meeting.
"I'm not bashing anybody, but I think the police's vetting procedures are inadequate and unacceptable," he said.
Jane Winter, director of British Irish Rights Watch, said: "We were very surprised indeed to find that people who are alleged to be well known paramilitary leaders have been able to pass paramilitary vetting procedures and secure government contracts from the likes of the police."