PSH-12-0071

* 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: June 6, 2012 )
) Case No.: PSH-12-0071
__________________________________________)
Issued: October 22, 2012
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Hearing Officer Decision
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Steven L. Fine, Hearing Officer:
This Decision concerns the eligibility of XXX XXXXXXX (hereinafter referred to as "the
Individual") to maintain a security clearance 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.” For the reasons set forth below, I conclude that the Individual’s
security clearance should not be restored.
I. BACKGROUND
In 2008, the DOE granted the Individual a security clearance after he resolved derogatory
information concerning his three extramarital affairs, and provided assurances that a civil lawsuit
that was pending against him at the time was frivolous and devoid of merit.
In early 2012, the Individual informed a Local Security Office (LSO) that criminal charges had
been filed against him for “Computer Crime and Grand Theft.” DOE Exhibit 2 at 24-25. The
LSO conducted a Personnel Security Interview (PSI) of the Individual on March 14, 2012, to
discuss these charges. At that time, the Individual revealed that a trial had been conducted in the
civil lawsuit and that a jury had awarded a $2.1 million judgment against him and two other
defendants, for Breach of Fiduciary Duty, violation of a state Trade Secrets Act, and Civil
Conspiracy.
Unable to resolve the security concerns relating to the civil lawsuit judgment or the criminal
charges, the LSO initiated administrative review proceedings by issuing a letter (Notification
Letter) advising the Individual that it possessed reliable information that created a substantial
doubt regarding his eligibility to hold a security clearance. In the Notification Letter, the LSO
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set forth the derogatory information at issue and advised that the derogatory information fell
within the purview of potentially disqualifying criteria set forth in the security regulations at
10 C.F.R. § 710.8, subsection (l).1
The Notification Letter informed the Individual that he was entitled to a Hearing before a
Hearing Officer in order to resolve the substantial doubt regarding his eligibility for access
authorization. The Individual requested a Hearing, and the LSO forwarded his request to the
Office of Hearings and Appeals (OHA). The Director of OHA appointed me as the Hearing
Officer in this matter on June 11, 2012.
At the Hearing I convened pursuant to 10 C.F.R. § 710.25(e) and (g), I took testimony from the
Individual, four colleagues, his supervisor, his clergyperson, and a DOE Personnel Security
Specialist. See Transcript of Hearing, Case No. PSH-12-0071 (hereinafter cited as “Tr.”). The
LSO submitted six exhibits, marked as DOE Exhibits 1 through 6, and the Individual submitted
17 exhibits, marked as Individual’s Exhibits 1 through 17.
II. STANDARD OF REVIEW
The Hearing Officer's role in this proceeding is to evaluate the evidence presented by the agency
and the Individual and to render a decision based on that evidence. See 10 C.F.R. § 710.27(a).
The regulations state that “[t]he decision as to access authorization is a comprehensive,
common-sense judgment, made after consideration of all relevant information, favorable or
unfavorable, as to whether the granting or continuation of access authorization will not endanger
the common defense and security and is clearly consistent with the national interest.” 10 C.F.R.
§ 710.7(a). I have considered the following factors in rendering this decision: the nature, extent,
and seriousness of the conduct; the circumstances surrounding the conduct, including
knowledgeable participation; the frequency and recency of the conduct; the Individual's age and
maturity at the time of the conduct; the voluntariness of the Individual's participation; the
absence or presence of rehabilitation or reformation and other pertinent behavioral changes; the
motivation for the conduct; the potential for pressure, coercion, exploitation, or duress; the
likelihood of continuation or recurrence; and other relevant and material factors. See 10 C.F.R.
§§ 710.7(c), 710.27(a). The discussion below reflects my application of these factors to the
testimony and exhibits presented by both sides in this case.
1 Specifically, the Notification Letter alleges that the Individual has:
Engaged 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. Such conduct or
circumstances include, but are not limited to, criminal behavior, a pattern of financial
irresponsibility, conflicting allegiances, or violation of any commitment or promise upon which
DOE previously relied to favorably resolve an issue of access authorization eligibility.
10 C.F. R. § 710.8(l)
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III. FINDINGS OF FACT
The facts in this case are complicated. Where appropriate, I rely on findings rendered in judicial
proceedings as the foundation for my findings of fact.
Between 2000 and 2007, the Individual worked as a member of Employer A’s management
team. Employer A experienced a change in ownership, and the Individual found himself
working for Employer A’s new owner (Owner A) with whom he had a strained relationship. Tr.
at 115. A firm from a neighboring state, Employer B, sought to open a new facility in Employer
A’s state and compete with Employer A. On August 3, 2007, the Individual, along with two
other management level employees of Employer A (Manager #1 and Manager #2) met with
Employer B’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO), and began
discussions which ultimately resulted in their accepting offers of employment with Employer B.
DOE Exhibit 6 at 9; Individual’s Exhibit 1 at 3-4. The Individual terminated his employment at
Employer A on September 21, 2007, and then began working for Employer B. DOE Exhibit 6 at
3.
The External Hard Drive
One to two weeks before he left Employer A, the Individual backed up the contents of a laptop
computer (the Laptop), owned by Employer A, onto a portable external hard drive that he had
purchased. DOE Exhibit 2 at 8-9, 16-17; Tr. at 117. At approximately the same time, Manager
#1 also copied the contents of his Employer A-owned computer to another external hard drive.2
In his court testimony, the Individual admitted that he knew that the external hard drive
contained Employer A’s information, including quality manuals, vendor information, customer
information, when he took it.3 DOE Exhibit 3 at 248, 264. However, the Individual denied
knowing whether the information he took was confidential or proprietary. Id. at 248-249.
When he left Employer A to work at Employer B, the Individual brought the external hard drive
home. DOE Exhibit 2 at 15; Tr. at 117. After the civil suit was filed against the Individual,
Manager #1, and Employer B, Employer B’s Human Resource Department informed the
Individual and Manager #1 that the external hard drives were subject to a discovery request filed
by the plaintiff, Employer A, and directed them to turn the external hard drives over to legal
counsel representing the three defendants. Individual’s Exhibit 1 at 5. The Individual provided
the legal counsel with the external hard drive. DOE Exhibit 3 at 267, Tr. at 117, 128-131.
2 At the civil trial, Manager #1 testified that he had informed the Individual of his intention to download the
information on the hard drive of the computer issued to him by Employer A to an external hard drive. DOE Exhibit
2 at 13. The Individual testified, at the civil trial, that he recalled hearing Manager #1’s testimony that they had
discussed downloading information from Employer A’s computers, before Manager #1 downloaded information
from Employer A’s computer to an external hard drive. The Individual, however, did not recall that conversation.
DOE Exhibit 3 at 243-244. The jury’s finding that he was part of a civil conspiracy was apparently based upon this
conversation. DOE Exhibit 2 at 13.
3 The trial court described the information copied to the external hard drives as: “(1) [Employer A’s] customer lists;
(2) [Employer A’s] jobs; (3) information regarding how [Employer A] estimates and prices its jobs, including
[Employer A’s] costs and mark-up; (4) [Employer A’s] vendors; (5) [Employer A’s] Quality Assurance Program;
and (6) customers and customer contact information.” Individual’s Exhibit 1 at 5.
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The August 20, 2012, Email
On August 20, 2007, while he was employed by Employer A, the Individual wrote an email to
Employer B’s CEO, which he also circulated to Manager #1, Manager #2, and Employer B’s
CFO. DOE Exhibit 2 at 18. In this email, the Individual states, in pertinent part:
Attached is a brief listing of personnel and salaries from the [XXX] Department.
My hopes would be to aquire [sic] each of these individuals as soon as the
decision is made to move ahead. I am in complete agreement with [Manager #2]
and [Manager #1] in respect to making this happen as quickly and smoothly as
possible for all parties involved. I look forward to our next meeting and
discussions. I have also begun some searching for a possible location and will
update you with what we find.
Individual’s Exhibit 3 at 1. The Individual did not provide specific names of employees, but
instead, provided position descriptions, salary ranges, and skill descriptions, that mirrored
employees at Employer A. Id. at 2. During his testimony before the trial court during the civil
action, the Individual admitted that the email list described specific employees of Employer A
that he sought to hire at Employer B. DOE Exhibit 3 at 275-280. At the Hearing however, the
Individual described this list as a “wish list” of positions he wished to create once he joined
Employer B, rather than a list of specific individuals that he sought to hire, and testified that
these salary ranges came from his experience at Employer A and from his research at
“Salary.com.” Tr. at 142.
The Non-Disclosure Agreement
The State Court with jurisdiction over the civil lawsuit at issue in the present decision (the State
Court) held, in deciding interlocutory motions, that the Individual “had a nondisclosure
agreement with [Employer A] whereby he promised not to disclose [Employer A’s] confidential
information to any person, and that he would surrender to [Employer A] ‘all papers and records
of any kind’ related to the business and affairs of [Employer A] or any of [Employer A’s]
customers upon termination of his employment.” Individual’s Exhibit 1 at 2-3. However, the
State Court further found that this non-disclosure agreement was not enforceable under the
applicable state law. Individual’s Exhibit 1 at 13.
The State Court held a civil trial in December 2011, in which a jury found in favor of Employer
A and assessed damages of 2.1 million dollars against the Individual, Manager #1, and Employer
B. DOE Exhibit 2 at 4; DOE Exhibit 4 at 19. The jury found the Individual liable for Breach of
a State Trade Secrets Act, Civil Conspiracy, and Breach of Fiduciary Duty. DOE Exhibit 2 at 5.
During his March 14, 2012, PSI, the Individual reported that criminal charges had been filed
against him for “Computer Crime and Grand Theft.” DOE Exhibit 2 at 24-25. The Individual
claimed that he did not know that his actions might be illegal and expressed his intent to contest
the criminal charges. Id. at 32-34. Nevertheless, the Individual stated that he still thought that
copying the information on the laptop and taking that information when he went to work for a
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competitor was “very wise.”4 Id. at 14. The Individual denied that he had taken the information
for the benefit of Employer B, or in order to harm Employer A. Id. at 14, 45. The criminal
charges were eventually dismissed, without prejudice. Tr. at 146-147, 166-167.
IV. DEROGATORY INFORMATION AND SECURITY CONCERNS
The record shows that the Individual, violated his previous employer’s rules and regulations, by
copying the contents of his employer’s hard drive, which included proprietary and confidential
information, to his own external hard drive.5 These actions demonstrate that the Individual
misappropriated that information. The record also shows that a civil court has found that, while
he was employed by Employer A, the Individual supplied Employer B with proprietary and
confidential information meant to facilitate Employer B’s hiring away of key employees from
Employer A.
“Untrustworthy or unreliable behavior to include breach of client confidentiality, release of
proprietary information, unauthorized release of sensitive corporate or other government
protected information” are among those “Conditions that could raise a security concern and may
be disqualifying.” Revised Adjudicative Guidelines for Determining Eligibility for Access to
Classified Information, issued on December 29, 2005, by the Assistant to the President for
National Security Affairs, The White House (Adjudicative Guidelines) Guideline E at ¶ 15,
¶16(d)(1). Moreover, the facts cited above show that the Individual has engaged in conduct
involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with
rules and regulations, which raise questions concerning the Individual’s reliability,
trustworthiness and ability to protect classified information. Adjudicative Guideline E at ¶ 15.
Noncompliance with rules, procedures, guidelines or regulations pertaining to information
technology systems may raise security concerns about an individual's reliability and
trustworthiness, calling into question the willingness or ability to properly protect sensitive
systems, networks, and information. Information Technology Systems include all related
computer hardware, software, firmware, and data used for the communication, transmission,
processing, manipulation, storage, or protection of information. Adjudicative Guideline M at
¶ 39. Guideline M further provides that “introduction, removal, or duplication of hardware,
firmware, software, or media to or from any information technology system without
authorization, when prohibited by rules, procedures, guidelines or regulations” are among those
“Conditions that could raise a security concern and may be disqualifying.” Adjudicative
Guideline M at ¶ 40(f).
4 At the Hearing the Individual testified: “Having hindsight now and seeing how it can be perceived and the
perception, I would do things differently of course. And especially with my knowledge of how the DOE looks at
these kind of things and how it can be perceived as almost criminal. I mean, I was charged criminally for this stuff.
I definitely would do it differently.” Tr. at 139.
5 Under the circumstances of the present case, I find that the alleged security concerns arising from the Individual’s
three extra-marital affairs do not raise significant security concerns. The Individual has testified that these affairs
occurred during a period in which he and his wife had planned to divorce and he thought that his marriage was
ending. Tr. at 175-176. Moreover, his wife is now aware of these three affairs, he is therefore not at risk for
extortion or coercion as a result of these affairs. Tr. at 148-149.
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V. ANALYSIS
The Individual, attempting to establish mitigation of the security concerns raised by derogatory
information discussed above, has raised a number of arguments. After careful consideration of
each of these arguments and the record, I find that the Individual has not sufficiently mitigated
the security concerns raised under Guidelines E or M, or Criterion L.
First, the Individual argues that he copied the information at issue because he was afraid that
Owner A would accuse him of deleting files. I am convinced that the Individual’s motivation for
copying the contents of Employer A’s laptop’s hard drive onto his external hard drive was self-
protection. There is no evidence in the record showing that the Individual intended to provide
Employer B with the information he uploaded into his external hard drive. Nor is there any
evidence in the record that Employer B accessed or otherwise used the information in the
external hard drive. While both factors provide some mitigation of the severity of the security
concerns raised by the Individual’s actions, the Individual’s decision to copy the contents of the
laptop onto his personal external hard drive nevertheless demonstrated a serious deficiency of
judgment, reliability, and loyalty.
Second, the Individual argues that there is no evidence in the record that Employer B has
accessed or used any of the information stored on the hard drive. Regardless, the Individual
should not have misappropriated the information stored on the hard drive.
Third, the Individual argues that the State Court found that the non-disclosure agreement that the
Individual signed was unenforceable. However, the fact that the non-disclosure agreement was
not enforceable under law does not fully mitigate the security concerns raised by the Individual’s
decision to violate a written commitment that he made to his employer. See Adjudicative
Guidelines ¶ 16(f).
Fourth, the Individual now claims that none of the information on the hard drive was confidential
or proprietary. This claim is contradicted by the findings of the State Court, as well as the
Individual’s own description of the contents of the external hard drive, as discussed above in the
Findings of Fact section.
Fifth, the Individual notes that the State Court jury verdict is under appeal, and contends that this
Appeal is likely to succeed because “there are serious questions about whether [Employer A] can
sustain its damage theory on appeal.” Tr. at 308. I am unwilling and unable to speculate about
the eventual outcome of this appeal.
Sixth, the Individual notes that a number of people have testified to his good character and
honesty. While this testimony is a positive factor, it alone cannot mitigate the security concerns
discussed at length above.
Seventh, I find that the Individual’s claims that he had no intent to harm Employer A are not
fully credible in light of the Individual’s comments concerning Owner A. During his PSIs and
his testimony at the Hearing, he made a number of strong allegations about Owner A (including
accusing Owner A of blackmailing two former owners and insinuating that Owner A was under
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investigation by the Federal Bureau of Investigation). Tr. at 121-125. More importantly, even if
I were to find the Individual’s contention that he did not intend to harm Employer A credible, it
would not provide any mitigation of the security concerns at issue.
Finally, the Individual correctly notes that five years have passed since the behaviors which
raised the security concerns at issue occurred. He claims that he is now a better, changed person.
I am not convinced. During the present proceeding, the Individual has consistently failed to
acknowledge the magnitude of his lapses in judgment or express regret for his actions, other than
to admit that they have caused him inconvenience. For example, when the Individual was first
asked by the LSO to discuss and explain the civil law suit, he assured the interviewer that the suit
was frivolous. As recently as the March 14, 2012, PSI, he described his decision to download
the contents of Employer A’s laptop computer to his external hard drive as “very wise.” DOE
Exhibit 2 at 14. Throughout this proceeding, he attempted to shift the blame for his actions onto
Owner A, without recognizing that any of his own actions were highly improper.
As for his provision of confidential or proprietary information concerning employee salaries and
qualifications to Employer B, in the August 20, 2007, email, the Individual asserts: (1) the
information he provided was not proprietary or confidential, and (2) he was not attempting to
provide information about specific individuals in order to allow them to be hired away from
Employer A by Employer B, but rather was estimating the expected costs for Employer B to
expand its Quality Assurance program by adding additional employees with specific
qualifications. However, the Individual’s civil trial testimony and the plain language of the
email itself both contradict these assertions.
Based on all the foregoing, I find that the security concerns under Criterion L raised by the
Individual’s personal conduct remain unresolved.
V. CONCLUSION
For the reasons set forth above, after carefully considering the evidence before me, I find that the
Individual has not resolved the security concerns raised under Criterion L. Therefore, the
Individual has not demonstrated that restoring his security clearance would not endanger the
common defense and would be clearly consistent with the national interest. Accordingly, I find
that the Individual’s security clearance should not be restored. The Individual may seek review
of this Decision by an Appeal Panel under the procedures set forth at 10 C.F.R. Part 710.28.
Steven L. Fine
Hearing Officer
Office of Hearings and Appeals
Date: October 22, 2012