PSH-12-0101

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disclosure under 5 U.S.C. ' 552. Such material has been deleted from this copy and replaced
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United States Department of Energy
Office of Hearings and Appeals
In the Matter of Personnel Security Hearing )
)
Filing Date: July 31, 2012 ) Case No. PSH-12-0101
)
____________________________________)
Issued: November 21, 2012
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Hearing Officer Decision
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Kimberly Jenkins-Chapman, Hearing Officer:
This Decision concerns the eligibility of xxxxxxxxxxxxx (hereinafter referred to as Athe
individual@) to hold an access authorization 1/ under the Department of Energy=s (DOE)
regulations set forth at 10 C.F.R. Part 710, Subpart A, entitled, AGeneral Criteria and Procedures
for Determining Eligibility for Access to Classified Matter or Special Nuclear Material.@ As
discussed below, after carefully considering the record before me in light of the relevant
regulations, I have determined that the individual=s access authorization should not be restored at
this time.
I. Background
The individual is employed by a DOE contractor in a position that requires him to hold a DOE
security clearance. Beginning in July 2011, the Local Security Office (LSO) became aware
that the individual had been experiencing financial difficulties for more than a decade. Between
August 2011 through March 2012, the individual responded to a number of Letters of
Interrogatories (LOIs) from the LSO regarding his finances. DOE Exh. 4-13.
1/Access authorization is defined as an administrative determination that an individual is eligible for access to
classified matter or is eligible for access to, or control over, special nuclear material. 10 C.F.R. ' 710.5(a). Such
authorization will be referred to variously in this Decision as access authorization or security clearance.
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In June 2012, the LSO sent a letter (Notification Letter) advising the individual that it possessed
reliable information that created substantial doubt regarding his eligibility to hold an access
authorization. In an attachment to the Notification Letter, the LSO explained that the
derogatory information fell within the purview of one potentially disqualifying criterion set forth
in the security regulations at 10 C.F.R. ' 710.8, subsection (l) (hereinafter referred to as
Criterion L). 1/
Upon receipt of the Notification Letter, the individual filed a request for a hearing. The LSO
transmitted the individual=s hearing request to the Office of Hearings and Appeals (OHA), and
the OHA Director appointed me as the Hearing Officer in this case. At the hearing that I
convened, the individual presented the testimony of two witnesses, his supervisor and his wife.
He also testified on his own behalf. The DOE counsel did not present any witnesses. The
DOE and the individual submitted a number of written exhibits prior to the hearing.
II. Regulatory Standard
A. Individual=s Burden
A DOE administrative review proceeding under Part 710 is not a criminal matter, where the
government has the burden of proving the defendant guilty beyond a reasonable doubt. Rather,
the standard in this proceeding places the burden on the individual because it is designed to
protect national security interests. This is not an easy burden for the individual to sustain. The
regulatory standard implies that there is a presumption against granting or restoring a security
clearance. See Department of Navy v. Egan, 484 U.S. 518, 531 (1988) (Aclearly consistent with
the national interest@ standard for granting security clearances indicates Athat security
determinations should err, if they must, on the side of denial@); Dorfmont v. Brown, 913 F.2d
1399, 1403 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991) (strong presumption against the
issuance of a security clearance).
The individual must come forward at the hearing with evidence to convince the DOE that
restoring his access authorization Awill not endanger the common defense and security and will
be clearly consistent with the national interest.@ 10 C.F.R. ' 710.27(d). The individual is
afforded a full opportunity to present evidence supporting his eligibility for an access
authorization. The Part 710 regulations are drafted so as to permit the introduction of a very
broad range of evidence at personnel security hearings. Even appropriate hearsay evidence may
be admitted. 10 C.F.R. ' 710.26(h). Hence, an individual is afforded the utmost latitude in the
presentation of evidence to mitigate the security concerns at issue.
2/ Criterion L relates, in relevant part, to information that a person has A[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. ' 710.8 (l).
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B. Basis for the Hearing Officer=s Decision
In personnel security cases arising under Part 710, it is my role as the Hearing Officer to issue a
Decision that reflects my comprehensive, common-sense judgment, made after consideration of
all the relevant evidence, favorable and unfavorable, as to whether the granting or continuation
of a person=s 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 am instructed by the
regulations to resolve any doubt as to a person=s access authorization in favor of the national
security. Id.
III. Findings of Fact
The individual does not dispute that he has experienced financial difficulties dating back to
2000. On July 19, 2011, the individual=s employer notified the LSO that the individual=s wages
were being garnished by the IRS to satisfy a debt relating to the individual=s tax liability for the
2007 tax year. DOE Exh.1. The amount due as noted by the IRS was $30,699.59. Id. In
response to a LOI in August 2011, the individual asserted that his wife, who was self-employed
at the time, had not paid her quarterly taxes and that he incorrectly believed that she had set up a
payment plan with the IRS. Id. He further revealed that he and his wife owed about $80,000
for tax years 2007, 2008, 2009 and 2010 (the years his wife had her own business) and that he
anticipated filing a Chapter 13 Bankruptcy. Id. The individual acknowledged that because his
wife Ahas always taken care of the bills,@ he did not pay close attention to what was paid. Id.
On September 14, 2011, the individual provided additional information to the LSO revealing that
he received a Notice of Federal Tax Lien on August 30, 2011. He also provided a copy of his
IRS payment history from January 2007 to November 2009 showing no payments since
November 26, 2009, a copy of his 1040 A for the 2010 tax year that listed a tax amount due of
$13,732 and a letter from the IRS dated June 11, 2010, rejecting the individual=s installment
agreement because he refused to comply the requirement to make estimated tax payments. The
individual acknowledged that these tax issues arose as a result of his wife=s business and not
making quarterly tax payments.
In addition, the individual provided the LSO with a Personal Financial Statement (PFS)
indicating a net monthly income of $6,548 and a net monthly remainder of negative $1,471. Id.
In his response to a March 2012 LOI, the individual further acknowledged that he and his wife
Awere living paycheck to paycheck.@ He indicated that there were various events that led to his
financial issues, including spending a great deal of money on dining out and entertainment. Id.
Finally, on October 21, 2011, the individual filed a Chapter 13 Bankruptcy Petition. Id.
IV. Analysis
I have thoroughly considered the record in this proceeding, including the submissions tendered
in this case and the testimony of the witnesses presented at the hearing. In resolving the
question of the individual=s eligibility for access authorization, I have been guided by the
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applicable factors prescribed in 10 C.F.R. ' 710.7(c). 1/ After due deliberation, I have
determined that the individual=s access authorization should not be restored. I cannot find that
restoring the individual=s access authorization would not endanger the common defense and
security and would be clearly consistent with the national interest. 10 C.F.R. ' 710.27(a). The
specific findings that I make in support of this decision are discussed below.
A. Derogatory Information and Associated Security Concerns
As previously noted, the LSO cites one potentially disqualifying criterion as the basis for
suspending the individual=s security clearance, Criterion L.
To support its reliance on Criterion L, the LSO states that the individual has established a pattern
of financial irresponsibility and has demonstrated an unwillingness or inability to satisfy his
debts. The LSO cites the individual=s wage garnishment, tax liens, as well as a number of
instances of financially irresponsible behavior. The individual=s failure or inability to live
within his means, to satisfy his debts and to meet his financial obligations, raises a security
concern under Criterion L, because his actions may indicate poor self-control, lack of judgment,
or unwillingness to abide by rules and regulations, all which also call into question the
individual=s reliability, trustworthiness and ability to protect classified information. See
Guideline F of the 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).
B. Mitigating Evidence
During the hearing, the individual acknowledged his pattern of financial irresponsibility and
failure to meet his financial obligations. He testified that although family financial decisions
were made jointly by him and his wife, he was negligent in not following up with delinquencies.
Transcript of Hearing (Tr.) at 89. He also admitted that although he was aware of several tax
liens brought against him prior to 2007, which he eventually paid, he did not change his poor
financial habits or his approach to spending. Id. at 88 and 91. The individual admitted that he
and his wife had a practice of holding off on paying their taxes until they became due, but that in
2007 they did not have the money to pay taxes at the end of the year. Id. at 111. He testified
that he pulled money from both investment and retirement accounts to attempt to pay bills and
taxes.
He acknowledged that around 2010, his annual income was between $75,000 and $80,000 and
his wife=s annual income, prior to 2010, was around $100,000. Id. at 104. However, despite
3/ Those factors include the following: the nature, extent, and seriousness of the conduct, the
circumstances surrounding her conduct, to include knowledgeable participation, the frequency and
recency of her conduct, the age and maturity at the time of the conduct, the voluntariness of her
participation, the absence or presence of rehabilitation or reformation and other pertinent behavioral
changes, the motivation for her conduct, the potential for pressure, coercion, exploitation, or duress, the
likelihood of continuation or recurrence, and other relevant and material factors.
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their incomes, their extravagant lifestyle did not allow them to have enough money to pay their
bills and taxes. The individual testified that, at one point, he and his wife spent $1,000 a month
dining out. He admitted that they were Alazy.@ Id. He further testified that he and his wife no
longer had the tax write-offs they had in the past, which also contributed to their tax
delinquencies. He reiterated that he led a lifestyle he could not afford anymore, explaining that
he opened second and third mortgages to consolidate credit cards and to pay taxes.
During the hearing, the individual acknowledged that his Chapter 13 Bankruptcy Petition was
dismissed because he and his wife failed to adhere to the terms of the Chapter 13 payment plan.
DOE Exh. 17. Specifically, he testified that as of July 24, 2012, he was approximately three
months ($12,242) behind in bankruptcy payments. The individual explained that when the
Chapter 13 payments were calculated, his wife was working a lot of overtime and when the
payments became due his wife was no longer working the overtime and thus they were making
substantially less money. Id. at 135. The individual testified that going forward he and his wife
plan to live within their means and are now on the Aright track@ financially, stating that he no
longer has as many expenses. He did, however, acknowledge that he and his wife are still
slightly behind on mortgage payments and that his current tax liability is about $60,000. The
individual testified that he and his wife are also planning to file for a Chapter 7 or Chapter 13
bankruptcy. Id. at 134. He stated that he would rather file a Chapter 13 bankruptcy so that all
debt, not just tax delinquencies, get addressed. Id. at 131.
C. Hearing Officer Evaluation of Evidence
In considering the evidence before me, I looked to the Adjudicative Guidelines. First, because
the individual=s financial problems happened recently and repeatedly, I cannot mitigate the
individual=s financial issues under Guideline F at & 20 (a), i.e. the behavior happened so long
ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does
not cast doubt on the individual=s current reliability, trustworthiness, or good judgment.
Second, I cannot mitigate the security concerns at issue here under Guideline F at & 20(b)
because the conditions that resulted in the individual=s financial problems were not largely
beyond his control. While the individual asserted during the hearing that his wife=s business
contributed to their tax issues, he admitted that they were also living a lifestyle beyond their
means and were negligent in the handling of their finances.
Third, while the individual stated that he is using a new accountant and has retained a
bankruptcy attorney, I cannot find for purposes of Guideline F at & 20(c) that there are clear
indications that the individual=s financial problem is under control. As of the date of the
hearing, the individual has not yet re-filed for Chapter 13 Bankruptcy. Moreover, because he
previously failed to adhere to the payment plan established in his first Chapter 13 Bankruptcy, I
have no confidence that he will be able to maintain whatever Chapter 13 payments might be
established in any new bankruptcy filing. I also cannot find that the individual has made a
good-faith effort to repay overdue creditors or otherwise resolve debt. Finally, the individual
does not have a reasonable basis to dispute the legitimacy of the past-due debt which is the cause
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of the problem. Therefore, I am unable to mitigate the security concerns at issue under
Guideline F at & 20(d) and (e).
Although, it is a positive factor that the individual has begun to address his financial problems, in
prior cases involving financial irresponsibility, Hearing Officers have held that A[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 Personnel Security Hearing,
Case No. PSH-11-0015 (2011); Personnel Security Hearing, Case No. TSO-1078 (2011);
Personnel Security Hearing, Case No. TSO-1048 (2011); Personnel Security Hearing, Case No.
TSO-0878 (2010); Personnel Security Hearing, Case No. TSO-0746 (2009). Here, it is simply
too early for me to find that the individual has demonstrated a sustained pattern of financial
responsibility for a significant period of time relative to his lengthy past period of financial
irresponsibility. Although the individual maintains that he has adjusted his lifestyle and is now
living within his means, he only recently began to address his financial issues. While he claims
he will be filing another bankruptcy petition, he still owes $60,000 in back taxes and has other
outstanding debt. The individual=s period of reformation has not yet begun. Based on the
foregoing, I find that the individual has not yet mitigated the security concerns associated with
Criterion L.
VI. Conclusion
In the above analysis, I have found that there was sufficient derogatory information in
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 find that the individual has not brought forth convincing
evidence to mitigate the security concerns associated with Criterion L. I therefore
cannot find that restoring the individual=s access authorization would not endanger the
common defense and security and would be consistent with the national interest.
Accordingly, I find 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.
Kimberly Jenkins-Chapman
Hearing Officer
Office of Hearings and Appeals
Date: November 21, 1012