PSH-13-0031

* 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: March 8, 2013 ) Case No.: PSH-13-0031
)
___________________________________ )
Issued: June 10, 2013
______________________
Hearing Officer Decision
______________________
Steven J. Goering, Hearing Officer:
This Decision concerns the eligibility of XXXXXXXX (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. A Local
Security Office (LSO) summoned the individual for an interview (PSI) with a personnel security
specialist on January 17, 2013, Exhibit 8, in order to address issues raised by information that his wages
were being garnished to satisfy a federal income tax debt. See Exhibit 3. 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. Exhibit 1. The 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.
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.energy.gov/oha.
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The individual requested a hearing in this matter. The LSO forwarded this request to OHA, and the OHA
Director appointed me the Hearing Officer in this case. The DOE introduced ten exhibits into the record
of this proceeding. The individual introduced eight exhibits,3 and presented the testimony of four
witnesses in addition to his own testimony.
II. 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 not endanger the
common defense and be clearly consistent with the national interest. 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 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).
III. NOTIFICATION LETTER AND ASSOCIATED SECURITY CONCERNS
The Notification Letter cited derogatory information within the purview of 10 C.F.R. § 710.8, subsection
(l) (hereinafter referred to as Criterion L). Exhibit 1.4 To support this criterion, the LSO cited the
following: (1) the individual’s admission in his January 2013 PSI that his wages were being garnished in
the amount of $150 weekly to satisfy a federal income tax debt of approximately $11,000, and that he
owed approximately $3,600 in back state income taxes; (2) his failure to file a 2010 state income tax
return; (3) collection accounts totaling $15,443, a charged-off account of $1,242, and a 60-day
delinquency in payments on a vehicle; (4) his failure to resolve past due accounts despite his intentions
expressed in a 2010 PSI; and (5) his statement in the January 2013 PSI that that he did not feel that he
was living within his means and that he was overextended financially. Exhibit 1.
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
3 The individual introduced Exhibits A through G at the hearing in this matter, and submitted additional
documents after the hearing that I have labeled, collectively, Exhibit H.
4 Criterion 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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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, The White
House (December 19, 2005) [hereinafter Adjudicative Guidelines] at ¶ 18. Further, an individual who is
financially overextended is at risk of having to engage in illegal acts to generate funds. Id.
IV. FINDINGS OF FACT AND ANALYSIS
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, I cannot find that the individual has sufficiently resolved the concerns
raised by his federal and state income tax delinquencies, nor has he established a pattern of financial
responsibility that would resolve the concerns raised by his past financial irresponsibility.
A. Federal and State Income Tax Obligations
At the hearing, the individual submitted a letter from the Internal Revenue Service stating that it had
accepted the individual’s offer for an installment agreement covering taxes owed for 2008, 2010, and
2011. Exhibit F. The agreement requires monthly payments of $300.5 Subsequent to the hearing, the
individual submitted a copy of two installment agreements with a state revenue authority, covering a
balance of $8,832.08, and requiring payments totaling $150 per month, to be made through January
2018. Exhibit H.
That the individual has entered into these installment agreements is certainly a step in the right direction,
as he now has in place a plan to address his delinquent income tax liability. Adjudicative Guidelines at ¶
20(d). Whether the individual will follow through and honor his commitment to pay his past and
ongoing tax obligations is another matter.
In making this finding, I considered that the LSO had already raised the issue of income taxes with the
individual during an October 2010 PSI, clearly putting him on notice that this was an issue of concern to
the DOE. Exhibit 9 at 45-49. At that time, the individual stated that he did not know how much he owed
to the IRS, but that he was sending payments to the agency. Id. at 47. That the individual still, nearly
three years later, owed back income taxes for 2008 indicates that he did not take his obligation seriously
enough to address until the issue was brought to his attention again in the January 2013 PSI, after which
he entered into his February 2013 installment agreement with the IRS. Going forward, this raises
legitimate concerns as to whether, once the pressure of DOE’s current scrutiny has abated, he can be
relied upon to fulfill his obligations under his installment agreements with either the federal or state
government.
Further, I am not convinced that the individual takes his legal obligation to pay taxes sufficiently
seriously, given both his past behavior and statements made in his January 2013 PSI. When asked why
he did not resolve his 2008 tax issues after the October 2010 PSI, the individual speculated that he could
have forgotten about it, and noted that “it's been a little rough, you know, trying to, uh, send my kids to
5 From the documents in the record, it is not clear how much the individual currently owes in delinquent federal
income taxes, nor how long it will take the individual to pay off the entire federal income tax debt. It is reasonable,
however, to assume that, as of January 2013, the balance was somewhere between the $11,000 the individual admitted
owing in his January 2013 PSI, Exhibit 8 at 31, and $16,210, the amount of the writ of garnishment issued to the
individual. See Exhibit 3.
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college and my two younger daughters in high school, you know, and they're bo -- two of 'em in sports
and, you know, it's been, it's been hard.” Exhibit 8 at 17. Later in the PSI, discussing the fact that he
owed federal income taxes for three prior years, he acknowledged that he knew he owed money to the
government, but that he was trying to “borrow some to try to take care of that debt. And, uh, like me and,
um, millions of people in the United States I can't afford to do some things with raising their own family,
you know.” Id. at 21.
In addition, my concern regarding whether the individual will properly prioritize his legal obligations is
amplified by the fact that I am not convinced that the individual will be sufficiently responsible to be able
to live within his means in the future, an issue discussed in more detail below.
B. Financial Responsibility
As with the payment arrangements made regarding his delinquent income taxes, the individual has taken
the step of consolidating what appears to be approximately 80 to 90 percent of his outstanding debt
through an agreement with a debt settlement company. Exhibit A. Under this agreement, the individual
is to make monthly payments of $272 for 42 months. Again, this is a positive step, in that it provides a
simplified plan for resolving a large portion of the individual’s outstanding debt. Adjudicative Guidelines
at ¶ 20(d).
However, even assuming the individual’s willingness to meet the obligations of this new agreement,
along with those of his installment agreements to pay his back taxes, there are reasons for prudent
skepticism until such time that the individual can demonstrate that he is able to do so. According to an
April 2010 credit report, the individual’s delinquent debt at that time totaled between $11,000 and
$12,000. Exhibit 5. By the time of the individual’s January 2013 credit report, his delinquencies had
risen to $17,000. Exhibit 4. In the interim, the individual’s wife earned a salary of $57,000 per year, and
then $82,000 in the last five months before she lost her job in 2012. Tr. at 59. The individual’s wife
testified at the May 2013 hearing in this matter that she had found a new job, in which she had been
working for five weeks. Tr. at 42. However, her new salary is $32,000, id. at 57, significantly less than
her previous salary.
Given that the individual was not able to live within his means with his previously higher household
income, it is difficult to have confidence that he will be able to do so now. I note here that a large portion
of the individual’s outstanding debt is in the form of past due medical bills, and that some of these
expenses were due to circumstances beyond his control. Tr. at 30-31; 66-67; see Adjudicative Guidelines
at ¶ 20(b). However, this fact only partly mitigates the concern raised by individual’s delinquent debts,
which were also the product of clearly discretionary spending beyond his means.
Thus, despite not paying their medical bills, and with a substantially higher income that he currently has,
the individual and his wife were, according to his wife’s testimony, not able to spend less than their
income such that they could accumulate savings. Tr. at 61. The individual’s wife attributed this to an
unexpected need for household repairs, but also to new construction on the home, a discretionary
expense. Id. at 61-62; see also id. at 68 (testimony of individual that he “should have waited on adding
onto our home and concentrated more on our debts, our bills, before trying to add onto our home”).
Thus, the individual and his wife have a difficult task ahead of them. They now will be required to make
payments totaling $722 a month toward their back taxes and other outstanding debt, over and above the
normal expenses they faced from 2010 to 2013. And they will need to do so despite a precipitous drop of
at least $25,000 in yearly gross household income, due to the individual’s wife’s lower salary.
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In prior cases involving financial considerations, 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).
Here, a plan is in place that will allow the individual to resolve the debts that were, at least in part, due to
irresponsible spending and a failure to prioritize legal obligations. I cannot find, however, that the
individual has yet established a sustained pattern of financial responsibility sufficient to resolve the
concerns raised in this case. Thus, at this point in time, there remain significant doubts as to whether the
individual will act responsibly in the future and, as noted above, the regulations governing this
proceeding 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).
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: June 10, 2013