PSH-11-0039

* The original of this document contains information which is subject to withholding from
disclosure under 5 U.S.C. 552. Such material has been deleted from this copy and replaced with
XXXXXX’s.
United States Department of Energy
Office of Hearings and Appeals
In the matter of Personnel Security Hearing )
)
Filing Date: October 18, 2011 ) Case No.: PSH-11-0039
)
____________________________________)
Issued: March 27, 2012
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Hearing Officer Decision
______________________
Steven J. Goering, Hearing Officer:
This Decision concerns the eligibility of xxxxxxxxxxxxxx (hereinafter referred to as “the
individual”) for access authorization under the regulations set forth at 10 C.F.R. Part 710, entitled
“Criteria and Procedures for Determining Eligibility for Access to Classified Matter or Special
Nuclear Material.”1 For the reasons set forth below, I conclude that the DOE should not restore the
individual’s access authorization at this time.2
I. BACKGROUND
The individual is an employee of a DOE contractor and holds a suspended access authorization. On
September 8, 2011, the individual notified the DOE that the Internal Revenue Service (IRS) began
garnishing his wages in August 2011, due to his failure to file a 2006 federal tax return. Exhibit 7.
A Local Security Office (LSO) summoned the individual for an interview (PSI) with a personnel
security specialist on September 28, 2011. Exhibit 7. After the PSI, the LSO determined that
derogatory information existed that cast into doubt the individual’s eligibility for access
authorization. The LSO informed the individual of this determination in a letter that set forth the
DOE’s security concerns and the reasons for those concerns. Letter from LSO to Individual
(November 1, 2011) (Notification Letter); Exhibit 1 (Summary of Security Concerns). The
1 An access authorization is an administrative determination that an individual is eligible for access to classified
matter or special nuclear material. 10 C.F.R. § 710.5. Such authorization will be referred to in this Decision as access
authorization or a security clearance.
2 Decisions issued by the Office of Hearings and Appeals (OHA) are available on the OHA website located at
http://www.oha.doe.gov. The text of a cited decision may be accessed by entering the case number of the decision in the
search engine located at http://www.oha.doe.gov/search.htm.
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Notification Letter also informed the individual that he was entitled to a hearing before a hearing
officer in order to resolve the substantial doubt concerning his eligibility for an access authorization.
The individual requested a hearing in this matter. The LSO forwarded this request to OHA, and I
was appointed the hearing officer. The DOE introduced eleven exhibits into the record of this
proceeding. The individual introduced six exhibits, and presented the testimony of one witness, in
addition to his own testimony.
II. DEROGATORY INFORMATION AND THE
ASSOCIATED SECURITY CONCERNS
The Notification Letter cited information pertaining to paragraph (l) of the criteria for eligibility for
access to classified matter or special nuclear material set forth at 10 C.F.R. § 710.8. Exhibit 1.3
Under this criterion, the LSO cited (1) the individual’s delinquency on accounts in collection
totaling $6,226; (2) his delinquency on property taxes, for tax years 2008 through 2010, totaling
$2,127; (3) his debt to a bank of approximately $1,200 for writing bad checks; and (4) his failure to
file a federal income tax return for 2006 and the resulting garnishment of his wages, beginning in
August 2011, for estimated taxes due of $11,266. Exhibit 1. On December 6, 2011, the individual
filed a response stating that he was not disputing any of the allegations. Exhibit 2.
The above information adequately justifies the DOE’s invocation of criterion (l), and raises
significant security concerns. The failure or inability to live within one's means, satisfy debts, and
meet financial obligations, including the failure to file tax returns as required, may indicate poor
self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can
raise questions about an individual's reliability, trustworthiness and ability to protect classified
information. See Revised Adjudicative Guidelines for Determining Eligibility for Access to
Classified Information (Adjudicative Guidelines), The White House (December 19, 2005), Guideline
F (Adjudicative Guidelines). Further, an individual who is financially overextended is at risk of
having to engage in illegal acts to generate funds. Id.
III. REGULATORY STANDARDS
The criteria for determining eligibility for security clearances set forth at 10 C.F.R. Part 710 dictate
that in these proceedings, a hearing officer must undertake a careful review of all of the relevant
facts and circumstances, and make a “common-sense judgment . . . after consideration of all relevant
information.” 10 C.F.R. § 710.7(a). I must therefore consider all information, favorable and
unfavorable, that has a bearing on the question of whether restoring the individual’s security
clearance would compromise national security concerns. Specifically, the regulations compel me to
consider the nature, extent, and seriousness of the individual’s conduct; the circumstances
surrounding the conduct; the frequency and recency of the conduct; the age and maturity of the
individual at the time of the conduct; the absence or presence of rehabilitation or reformation and
3 Paragraph (l) defines as derogatory information that an individual has “[e]ngaged in any unusual conduct or is
subject to any circumstances which tend to show that the individual is not honest, reliable, or trustworthy; or which
furnishes reason to believe that the individual may be subject to pressure, coercion, exploitation, or duress which may
cause the individual to act contrary to the best interests of the national security.” 10 C.F.R. § 708.8(l).
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other pertinent behavioral changes; the likelihood of continuation or recurrence of the conduct; and
any other relevant and material factors. 10 C.F.R. § 710.7(c).
A DOE administrative proceeding under 10 C.F.R. Part 710 is “for the purpose of affording the
individual an opportunity of supporting his eligibility for access authorization.”
10 C.F.R. § 710.21(b)(6). Once the DOE has made a showing of derogatory information raising
security concerns, the burden is on the individual to produce evidence sufficient to convince the
DOE that granting or restoring access authorization “will not endanger the common defense and
security and will be clearly consistent with the national interest.” 10 C.F.R. § 710.27(d). The
regulations further instruct me to resolve any doubts concerning the individual’s eligibility for
access authorization in favor of the national security. 10 C.F.R. § 710.7(a).
IV. ANALYSIS
As noted above, the individual has not disputed the allegations set forth in the Notification Letter.
Exhibit 2. He has, however, offered some evidence of progress toward resolving the concerns raised
by the allegations. Nonetheless, as discussed below, there are still outstanding financial issues that
the individual has not addressed, and circumstances that contributed to his difficulties appear likely
to continue into the future. Thus, I do not find that the concerns in this case have been sufficiently
resolved such that the individual’s clearance should be restored.
First, regarding his $1,200 debt to a bank related to bad checks, the individual testified that he had
reached an oral agreement with the bank to pay $50 per month toward this debt, with the balance to
be paid in full upon his receipt of an expected tax refund. Hearing Transcript (Tr.) at 21; see
Guideline F at ¶ 20 (d) (concern can be mitigated where individual makes “good-faith effort to repay
overdue creditors or otherwise resolve debts”). In addition, the individual submitted proof of
payment of his past due 2008 property taxes. Exhibit F.
Regarding his federal income tax obligations, the individual testified that he filed his 2006 tax return
in early February 2012. Tr. at 24. He stated that he attempted to get confirmation of receipt of his
return by the IRS, but was told that this would not be possible for four to five weeks. Id. at 25. He
did, however, provide a copy of the completed return, prepared by a commercial firm, and showing
that he would be due a refund of $2,648 for tax year 2006. Exhibit A.4 It would, therefore, appear
that the individual has, albeit belatedly, satisfied his obligation to file federal income tax returns.
See Exhibits B, D, and E (IRS records showing receipt of tax returns for 2005, 2007, and 2008,
respectively).
Unfortunately, however, the individual still has yet to address the remainder of his outstanding debt.
He testified that, as of the hearing, he had taken no action toward paying off the $6,226 he owes on
delinquent accounts in collection. Tr. at 20. Moreover, while he has paid his past due 2008 property
taxes, he has yet to pay those due for tax years 2009 and 2010, which together total $1,593,
exclusive of penalties and fees, which proved to be substantial when he paid his tax for 2008.
Exhibit F ($523 in penalties and fees added to tax bill of $534 for 2008).
4 The individual’s testified that, because of the lateness of his filing, he will not receive this refund. Tr. at 47-48;
see 26 U.S.C. § 6511(a) (2010) (“Claim for credit or refund of an overpayment of any tax imposed by this title which is
required to be paid by means of a stamp shall be filed by the taxpayer within 3 years from the time the tax was paid.”).
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Of additional concern is that the individual has no apparent plan for paying off these debts, nor any
idea how long it will take to do so. Tr. at 39 (“I have to take it one step at a time, one account at a
time and try to get it resolved. It is not going to be one day longer than what I want it to be or what
it can feasibly be.”). I offered the individual an opportunity to submit, after the hearing, a list of his
monthly income and normal expenses, “just to give the DOE an idea of how you are set in terms of
dealing with the day-to-day expenses.” Tr. at 57. The individual, however, did not provide this
information, thus making it difficult for me to make even a rough assessment of his future financial
stability.
Finally, there are circumstances in this case that both mitigate and exacerbate the concerns in this
case going forward. The individual testified at the hearing that his wife has suffered from various
medical problems since the mid-1990s, and that most of his outstanding debts are due to unpaid
medical bills. Tr. at 40-41. I note here that the Adjudicative Guidelines state that concerns related
to finances can be mitigated where “conditions that resulted in the financial problem were largely
beyond the person's control . . . .” Guideline F at ¶ 20 (b). The LSO, aware of the individual’s debts
in March 2011, noted these circumstances and this provision of the guidelines in deciding to grant
the individual’s application for a clearance. Exhibit 5 (case evaluation sheet).5
These circumstances do, in fact, partially mitigate the security concern in this case, at least to the
extent that the absence of such circumstances would indicate that financial problems were more
likely to have resulted from poor self-control, bad judgment, or a simple unwillingness to satisfy
financial obligations. Thus, here, the individual’s financial troubles may be less reflective of his
general reliability, trustworthiness and ability to protect classified information.
There is, nonetheless, as noted above, a separate concern noted in the Adjudicative Guidelines, that
“[a]n individual who is financially overextended is at risk of having to engage in illegal acts to
generate funds.” Guideline F at ¶ 18. Such a concern exists independent of the circumstances
leading to an individual’s financial distress. That this concern is more than just theoretical is
demonstrated by the fact that the individual engaged in an illegal act by not timely filing his 2006
federal income tax return, citing the fact that he “just didn’t have the money” to pay the cost of
preparation of his return. Tr. at 29.6
Looking forward, then, the question comes back to an assessment of the individual’s likely future
financial situation. And in this case, there is really no basis for me to conclude that the individual
will not face similar financial problems in the future. Aside from the lack of any plan or budget by
the individual, there might be cause for hope if his wife’s medical issues were behind her. However,
those problems, unfortunately, appear to be chronic in nature. See Tr. at 15-16 (individual’s
testimony detailing wife’s struggle with degenerative arthritis and Lupus, and noting that she was
scheduled for surgery to remove her thyroid the week following the hearing).
5 The individual’s report in September 2011 that the IRS was garnishing his wages triggered a reevaluation by
the LSO, resulting in the suspension of the individual’s clearance. See Exhibits 3 and 4 (September 2001 case evaluation
sheets).
6 This reasoning, in addition to clearly not excusing a violation of law, is puzzling given the fact that the amount
of his anticipated 2006 refund, $2,648, would have easily covered the cost of preparation, which the individual stated was
“ between three and five hundred dollars.” Id.
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In prior cases involving financial issues, Hearing Officers have held that “[o]nce an individual has
demonstrated a pattern of financial irresponsibility, he or she must demonstrate a new, sustained
pattern of financial responsibility for a period of time that is sufficient to demonstrate that a
recurrence of the past pattern is unlikely.” See, e.g., Personnel Security Hearing, Case No. TSO-
1078 (2011); Personnel Security Hearing, Case No. TSO-0878 (2010); Personnel Security Hearing,
Case No. TSO-0746 (2009). Similarly in this case, even to the extent that the individual’s financial
problems may not be due to irresponsibility, I find that he would need to show a sustained pattern of
financial stability for a period of time that is sufficient to demonstrate that a recurrence of the past
pattern is unlikely. As the individual clearly has not made such a showing, I cannot find that his
clearance should be restored at this time.
V. CONCLUSION
In the above analysis, I have found that there was sufficient derogatory information in the possession
of the DOE that raises serious security concerns under Criterion L. After considering all the relevant
information, favorable and unfavorable, in a comprehensive common-sense manner, including
weighing all the testimony and other evidence presented at the hearing, I have found that the
individual has not brought forth sufficient evidence to mitigate the security concerns at issue. I
therefore cannot find that restoring the individual’s access authorization will not endanger the
common defense and is clearly consistent with the national interest. Accordingly, I have determined
that the individual’s access authorization should not be restored. The parties may seek review of this
Decision by an Appeal Panel under the regulations set forth at 10 C.F.R. § 710.28.
Steven J. Goering
Hearing Officer
Office of Hearings and Appeals
Date: March 27, 2012