PSH-14-0001

*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: January 2, 2014 ) Case No. PSH-14-0001
)
_________________________________________ )
Issued: May 29, 2014
__________________________
Administrative Judge Decision
__________________________
Diane DeMoura, Administrative Judge:
This Decision concerns the eligibility of XXXXXXXXXXXX (“the Individual”) to hold an
access authorization under the Department of Energy (DOE) regulations set forth at 10 C.F.R.
Part 710, Subpart A, entitled “General Criteria and Procedures for Determining Eligibility for
Access to Classified Matter or Special Nuclear Material.”1 For the reasons detailed below, after
carefully considering the record before me in light of the applicable regulations and the
Adjudicative Guidelines, I find that the Individual’s suspended DOE access authorization should
not be restored at this time.
I. BACKGROUND
1 Access authorization, also known as a security clearance, is an administrative determination that an individual is
eligible for access to classified matter or special nuclear material. 10 C.F.R. § 710.5.
- 2 -
The Individual is a DOE contractor employee who participated in the DOE’s Human Reliability
Program (HRP),2 and currently holds a suspended DOE access authorization. DOE Exhibit
(“Ex.”) 3. As a holder of a DOE access authorization and participant in the HRP, the Individual
routinely completed Questionnaires for National Security Positions (QNSPs), most recently in
January 2013. DOE Ex. 18. In addition, the Local Security Office (LSO) conducted Personnel
Security Interviews (PSIs) with the Individual in July 2011 (DOE Ex. 22), August 2011 (DOE
Ex. 21), August 2012 (DOE Ex. 20), and July 2013 (DOE Ex. 19) in order to discuss concerns
related to the Individual’s finances. In November 2013, the LSO informed the Individual that
there existed derogatory information that raised security concerns under 10 C.F.R. §§ 710.8 (f)
and (l) (Criteria F and L, respectively).3 See DOE Ex. 1 (Summary of Security Concerns). The
Notification Letter also informed the Individual that he was entitled to a hearing before an
Administrative Judge4 in order to resolve the security concerns. Id.
The Individual requested a hearing on this matter. DOE Ex. 2. The LSO forwarded his request
to the Office of Hearings and Appeals, and I was appointed the Administrative Judge. At the
hearing, the Individual, represented by counsel, testified on his own behalf and offered the
testimony of three witnesses: his co-worker, his second-line supervisor, and his manager. In
addition, the Individual submitted five exhibits into the record (Indiv. Exs. A-E).5 The DOE
counsel presented no witnesses, and tendered twenty-four exhibits (DOE Exs. 1-24). See
Transcript of Hearing, Case No. PSH-14-0001 (hereinafter cited as “Tr.”).
II. REGULATORY STANDARD
The regulations governing the Individual’s eligibility for access authorization are set forth at
10 C.F.R. Part 710, “Criteria and Procedures for Determining Eligibility for Access to Classified
Matter or Special Nuclear Material.” The regulations identify certain types of derogatory
information that may raise a question concerning an individual’s access authorization eligibility.
2 The Human Reliability Program is a security and safety reliability program designed to ensure that individuals who
occupy positions affording access to certain materials, nuclear explosive devices, facilities, and programs, meet the
highest standards of reliability and physical and mental suitability. See 10 C.F.R. § 712.1.
3 Criterion F pertains to deliberate false statements or misrepresentations by an individual during the course of an
official inquiry regarding the individual’s eligibility for access authorization, including responses during personnel
security interviews or on security questionnaires. Such statements raise serious doubts regarding an individual’s
honesty, reliability, and trustworthiness. 10 C.F.R § 710.8(f). Criterion L concerns conduct tending to show that the
Individual was “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).
4 Effective October 1, 2013, the titles of attorneys in the Office of Hearings and Appeals (OHA) changed from
Hearing Officer to Administrative Judge. See 78 Fed. Reg. 52389 (August 23, 2013). The title change was
undertaken to bring OHA Hearing Officers in line with the title used at other federal agencies for officials
performing identical or similar adjudicatory work. See Personnel Security Hearing, Case No. PSH-13-0114 at 1 n.1
(2014).
5 The hearing transcript identifies several additional exhibits that the Individual stated he would submit following
the hearing (Indiv. Exs. F-H and A-1) in order to clarify or corroborate certain assertions he made throughout the
hearing. However, the Individual did not submit any additional documents as of this date.
- 3 -
10 C.F.R. § 710.10(a). Once a security concern is raised, the individual has the burden of
bringing forward sufficient evidence to resolve the concern.
In determining whether an individual has resolved a security concern, the Administrative Judge
considers relevant factors, including “the nature, extent, and seriousness of the conduct; the
circumstances surrounding the conduct, to include knowledgeable participation; the frequency
and recency of the conduct; the age and maturity of the individual at the time of the conduct; the
voluntariness of 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,” and the impact of the foregoing on the relevant security concerns. 10 C.F.R.
§ 710.7(c). In considering these factors, the Administrative Judge also consults adjudicative
guidelines that set forth a more comprehensive listing of relevant factors and considerations. See
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).
Ultimately, the decision concerning eligibility is “a comprehensive, common-sense judgment
made after consideration of all relevant information, favorable and unfavorable . . . .” 10 C.F.R.
§ 710.7(a). In order to reach a decision favorable to the individual, the Administrative Judge
must find that “the grant or restoration of access authorization to the individual will not endanger
the common defense and security and is clearly consistent with the national interest.” 10 C.F.R.
§ 710.27(a). “Any doubt as to an individual’s access authorization eligibility shall be resolved in
favor of the national security.” Id. See generally Dep’t of the Navy v. Egan, 484 U.S. 518, 531
(1988) (the “clearly consistent with the interests of national security” test indicates that “security
clearance determinations should err, if they must, on the side of denials”).
III. DEROGATORY INFORMATION AND ASSOCIATED SECURITY CONCERNS
As stated above, the LSO issued a Notification Letter informing the Individual that the DOE
possessed certain derogatory information which raised doubts regarding his eligibility to hold
DOE access authorization. According to the Notification Letter, this information raises security
concerns under Criteria F and L of the Part 710 regulations. DOE Ex. 1. To support its Criterion
F concerns, the LSO alleged that the Individual indicated on his January 2013 QNSP and during
the July 2013 PSI that he filed his 2011 federal income taxes, but the Internal Revenue Service
(IRS) records did not reflect that the Individual had filed a return for the 2011 tax year. Id. In
addition, as a basis for its Criterion L concerns, the LSO alleged that the Individual: (1) failed to
file his 2011 federal income taxes; (2) had delinquent federal tax debt totaling approximately
$23,500, collection accounts totaling approximately $69,300, charged-off debts totaling
approximately $77,300, outstanding judgments totaling approximately $59,700, and additional
debts totaling approximately $1,050; and (3) failed to settle or make payment arrangements for
his delinquent accounts, despite his past assurances to the DOE that he would contact his
creditors and make efforts to resolve his debts. Id.
Regarding the Individual’s statement on the January 2013 QNSP and July 2013 PSI that he filed
his 2011 federal income taxes, it is well-settled that lack of candor or dishonesty may raise
- 4 -
security concerns, particularly if such conduct occurs during a background investigation in
connection with an individual’s security clearance. See Id., Guideline E, ¶ 15 (“Conduct
involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with
rules and regulations can raise questions about an individual’s reliability, trustworthiness and
ability to protect classified information. Of special interest is any failure to provide truthful and
candid answers during the security clearance process . . . .”). The deliberate falsification of
information on a QNSP and false statements made during security interviews are examples of
conduct which would give rise to such a concern. Id., Guideline E, ¶ 16(a). Given the inaccurate
information that the Individual provided during the security clearance process regarding his 2011
taxes, the LSO properly invoked Criterion F.
As to the cited security concerns pertaining to the Individual’s delinquent debts and purported
pattern of financial irresponsibility, the failure or inability to live within one’s means, satisfy
debts, and meet financial obligations “may indicate poor self-control, lack of judgment, or
unwillingness to abide by rules and regulations,” which, in turn, may call into question an
individual’s reliability, trustworthiness and ability to protect classified information. Adjudicative
Guidelines, Guideline F, ¶¶ 18, 19. Given the facts in this case, there was ample information in
the record that raised valid security concerns. Therefore, I find that the LSO properly invoked
Criterion L.
IV. FINDINGS OF FACT
A. The Individual’s Finances and Related Information
The Individual has worked for a DOE contractor since 2002. Tr. at 48. Between 2007 and 2010,
he was also involved in several side businesses. Tr. at 48-52; DOE Ex 22 at 8, 60. Sometime in
2007, after his first business failed due to outside competition, the Individual started another
business in partnership with a long-time friend. Tr. at 49, 138. Because of the Individual’s full-
time work schedule, he entrusted the day-to-day operations of the business to his partner. Tr. at
50, 141. In 2009, the Individual learned that the partner had failed to pay the business’ bills and
taxes for the past two years, and was allegedly siphoning money from their joint business into
another of the partner’s ventures. Tr. at 51-52, 138. Ultimately, they sold the business, used the
money from the sale to pay overdue rent, and “the rest went to the IRS.” Tr. at 141. Although
they dissolved the partnership, the Individual remained liable for half of the defunct business’
debts, including delinquent taxes. DOE Ex. 22 at 58-65, Tr. at 51-53.
Over the next several years, the Individual’s debts continued to accrue, as set forth in the
Notification Letter. DOE Ex. 1. While the record is unclear as to the specific origin of each of
the debts, the Individual attributed most of them to his failed side businesses. See, e.g., DOE Ex.
19 at 74, 122, 211-212; DOE Ex. 22 at 8-11. The Individual made various attempts to resolve
his outstanding debts by contacting creditors and making numerous settlement offers, but his
efforts were largely unsuccessful. Id. at 72-200. In October 2013, the Individual recognized that
he did not have the means to resolve his outstanding debt and decided to file for Chapter 7
bankruptcy. DOE Ex. 12. With the exception of his federal tax debt, all of the Individual’s
outstanding debts were included in the filing. Id.; Tr. at 78-93. The bankruptcy court granted
- 5 -
the Individual a discharge of his debts in January 2014. Indiv. Ex. A.6 The Individual’s federal
tax debt remains unresolved. DOE Ex. 13.
B. The Individual’s 2011 Federal Income Taxes
In April 2012, the Individual timely filed with the IRS a request for an extension of time in
which to submit his personal income tax return for the 2011 tax year. DOE Ex. 13. Therefore,
his 2011 tax return was due in October 2012. Id. The Individual filed the return in February
2014, two days before the hearing in this case. Indiv. Exs. C - E.
IV. ANALYSIS
In making a determination regarding the Individual’s eligibility for DOE access authorization, I
have thoroughly considered the record in this proceeding, including the hearing testimony and
the documentary evidence. For the reasons set forth below, I am unable to conclude at this time
that restoring the Individual’s suspended DOE access authorization “will not endanger the
common defense and security, and is clearly consistent with national interest.” 10 C.F.R.
§ 710.7(a).
A. Criterion F - Alleged Falsification or Misrepresentation of Information
The Individual does not dispute that he represented that he had filed his 2011 federal income tax
return when he, in fact, had not done so. However, he maintains that his statements to that effect
were not a deliberate attempt to falsify or misrepresent information to the DOE. The Individual
asserted that he was unaware that he neglected to file his 2011federal income tax return until
October 2013, when his bankruptcy attorney discovered the matter while preparing his
bankruptcy filing. Tr. at 122.
As indicated above, deliberate omissions, concealments, or falsifications of information call into
question an individual’s honesty, reliability, and trustworthiness, and raise security concerns.
Adjudicative Guidelines, Guideline E, ¶ 16(a). Having reviewed the entire record, including the
Individual’s explanation regarding his inaccurate statements and the testimony from other
witnesses about the Individual’s general honesty and character, I find it unlikely that the
Individual deliberately attempted to deceive the Agency. See, e.g., Tr. at 13-14, 26, 30-31, 38-
39. My finding in this regard is supported by the general candor and honesty that the Individual
has exhibited throughout the security clearance process, including his forthrightness in
discussing the sensitive subject of his finances. See DOE Exs. 18 - 22. The Individual’s
misstatements may have resulted from a faulty memory, confusion, or even carelessness. In any
6 I note that while the Individual represents that the January 2014 bankruptcy discharge included all of the debts that
were listed in the October 2013 filing, there is no documentation in the record substantiating that assertion. The
Individual submitted the first page of the bankruptcy court’s discharge order as an exhibit. There was some question
at the hearing regarding whether certain debts had been discharged. The Individual did not submit any additional
documentation clarifying the status of those debts. See Tr. at 91, 97-98, 157.
- 6 -
event, they lack the requisite element of deliberateness to call into question the Individual’s
honesty, reliability, and trustworthiness. Therefore, I find that to the extent that the Individual’s
inaccurate statements with respect to his 2011 federal income taxes on his January 2013 QNSP
and during the July 2013 PSI raised security concerns under Criterion F, those concerns have
been adequately mitigated.
B. Criterion L - Purported Pattern of Financial Irresponsibility
The Individual did not dispute that the information regarding his delinquent finances and related
matters raised security concerns under Criterion L. Rather, he attempted to establish at the
hearing that those concerns have been fully mitigated.
Regarding the Individual’s 2011 federal income taxes, the Individual maintained that his failure
to file the tax return was an inadvertent error on his part, and he attributed the lapse to a
protracted medical issue with which he struggled in early 2012 that impacted his ability to keep
up with routine matters. Tr. at 136. To support this assertion, the Individual submitted a letter
from his physician detailing the seriousness of the medical condition. Indiv. Ex. B. However,
somewhat surprisingly, the letter contradicts the Individual’s testimony, in that it indicates that
the Individual’s medical issues arose in 2011, impacting his ability to complete his 2010 taxes.
Id. The Individual testified that his physician simply cited inaccurate dates in his letter. Tr. at
56. He added that he would supplement the record with additional documentation in order to
clarify the dates. Tr. at 157. Yet, the Individual submitted no additional documents.
Consequently, in light of the discrepant information in the record, which the Individual himself
provided and did not correct despite his opportunity to do so, I am unable to accord much weight
to the Individual’s explanation for his failure to file his 2011 taxes.
As to the concerns raised by his delinquent debts, the Individual maintained that he has since
resolved any related security concerns because, other than his federal tax debts, his delinquent
debts were discharged in bankruptcy.7 Tr. at 77-79. The Individual intends to now focus on
resolving his outstanding tax issues. Tr. at 110-11. To that end, because he does not currently
know the specific amount that he owes the IRS, he has requested a summary of his current tax
debt so that he can being making arrangements for the repayment of the debt. Tr. at 126-29.
Finally, the Individual testified that he keeps a budget of his living expenses that he intends to
follow in order to allow him to pay his bills. Tr. at 143. He acknowledged, however, that at
present his budget involves “minimal” income and is sufficient for his basic expenses. Id.
According to the Individual, his ability to address his debts hinges on the restoration of his
suspended security clearance, and the related potential overtime income. Tr. at 144. He has not
accounted for the alternative outcome, and does not have a contingency plan in place. Id.
In considering whether the Individual has mitigated the Criterion L concerns regarding his
purported pattern of financial irresponsibility, I note as an initial matter that filing for bankruptcy
is a legal means of resolving debt and does not, per se, raise security concerns. Rather, it is the
underlying causes of the indebtedness which may raise concerns. See generally Adjudicative
7 As noted above, the record is unclear as to whether every debt listed in the Individual’s October 2013 bankruptcy
filing was, in fact, discharged by the bankruptcy court’s January 2014 order. See n.6, supra.
- 7 -
Guidelines, Guideline F; see also Personnel Security Decision, OHA Case No. PSH-12-0135
(2013). Thus, the mere fact that an individual is successful in obtaining a discharge of debts
through bankruptcy is not, without more, sufficient to fully resolve any security concerns which
have arisen from the financial problems which led to the bankruptcy filing.
Among the factors that may serve to mitigate security concerns raised by an individual’s
financial problems are that “the behavior happened so long ago, was so infrequent, or happened
under such circumstances that it is unlikely to recur or does not cast doubt on the individual’s
current reliability, trustworthiness, or good judgment,” “the conditions that resulted in the
financial problem were largely beyond the person’s control … and the individual acted
responsibly under the circumstances,” “the [individual] has received or is receiving counseling
for the problem and/or there are clear indications that the problem is being resolved or is under
control,” and “the individual initiated a good-faith effort to repay overdue creditors or otherwise
resolve debts[.]” Adjudicative Guidelines, Guideline F, ¶ 20.
In this case, I must first note that several of the Individual’s assertions or explanations remain
uncorroborated in the record. This is true despite the fact that the Individual had ample
opportunity to submit supporting information at the outset of this proceeding, or to supplement
the record after the hearing, yet did not do so. Nonetheless, even assuming arguendo that the
Individual’s assertions are true, upon consideration of the record in this case, I am unable to
conclude that the Individual has resolved the Criterion L regarding his pattern of financial
irresponsibility.
While it is possible that the Individual’s financial problems were caused by factors outside his
control, such as business downturns or medical emergencies, and he has attempted to resolve his
debts in the ensuing years, he is currently in the very early stages of righting his finances. The
Individual is likely in a better financial position now than he was in prior to the discharge of his
debts in bankruptcy, but he did not offer any evidence at the hearing regarding the specifics of
his current finances, such as an itemization of his current household expenses and income. In
addition, the Individual’s grasp of his path forward seemed nebulous at best. The Individual
stated that he has a budget, but offered little in the way of details. Tr. at 143. Nonetheless, it
appeared from his testimony that his current household income is barely enough to cover his
routine expenses at this time. See Tr. at 143-44. Consequently, should he be faced with an
unexpected or emergency expense, any progress he has begun to make in righting his finances
could easily be reversed.
In prior cases involving financial irresponsibility, we 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 Personnel Security Hearing, Case No. TSO-1078
(2011); Personnel Security Hearing, Case No. TSO-0878 (2010); Personnel Security Hearing,
Case No. TSO-0732 (2009); see also Adjudicative Guidelines, Guideline F, ¶ 20. In this case,
while it appears that the vast majority of the Individual’s old debts have been discharged through
bankruptcy, I am unable to find that his financial situation is currently stable such that his
financial difficulties are in the past and unlikely to recur and, therefore, do not cast doubt on his
current reliability, trustworthiness, or good judgment. Therefore, I cannot conclude at this time
- 8 -
that the security concerns cited under Criterion L regarding the Individual’s pattern of financial
irresponsibility have been fully resolved.
V. CONCLUSION
In the above analysis, I found that there was reliable information that raised substantial doubts
regarding the Individual’s eligibility for a security clearance under Criteria F and L of the Part
710 regulations. After considering all of the relevant information, favorable and unfavorable, in
a comprehensive, common-sense manner, including weighing all of the testimony and other
evidence presented at the hearing, I find that the Individual has resolved the Criterion F
concerns. However, I have also concluded that the Individual has not presented sufficient
information to resolve the security concerns cited under Criterion L. Therefore, I cannot
conclude that restoring the Individual’s suspended DOE access authorization “will not endanger
the common defense and security is clearly consistent with the national interest.” 10 C.F.R.
§ 710.7(a). Accordingly, I find that the DOE should not restore the Individual’s suspended DOE
access authorization at this time.
The parties may seek review of this Decision by an Appeal Panel, under the regulation set forth
at 10 C.F.R. § 710.28.
Diane DeMoura
Administrative Judge
Office of Hearings and Appeals
Date: May 29, 2014