PSH-14-0016

*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: February 27, 2014 ) Case No.: PSH-14-0016
)
____________________________________)
Issued: May 23, 2014
______________________
Administrative Judge Decision
______________________
Richard A. Cronin, Jr., Administrative Judge:
This Decision concerns the eligibility of XXXXXXXXX (hereinafter referred to as “the
Individual”) to hold an 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 Department of
Energy (DOE) should not restore the Individual’s access authorization.
I. BACKGROUND
The Individual is a contractor employee at a DOE facility and possessed a security clearance.
Exhibit (Ex.) 3 at 1. Pursuant to a regularly scheduled reinvestigation, the Individual completed a
Questionnaire for National Security Positions (QNSP) form. Ex. 11. In her QNSP, the Individual
reported that she had not filed or paid her state income tax for the year 2006. Ex. 11 at 28; see
Ex. 14 at 13-20, 22-23, 27-30. Consequently, the Local Security Office (LSO) conducted a
personnel security interview (PSI) with the Individual in November 2013 (November 2013, PSI).
Ex. 14. Because the November 2013, PSI failed to resolve the security concerns raised by the
Individual’s admission that she failed to pay her 2006 state income tax or file a 2006 state
income tax return and failed to resolve other negative financial information disclosed during the
investigation, the LSO suspended the Individual’s security clearance. Ex. 1. In January 2014, the
Individual received a detailed notification letter (Notification Letter) from the LSO outlining 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 an
access authorization or a security clearance.
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specific derogatory information, described under 10 C.F.R. § 710.8 (l), upon which it relied upon
in making the decision to suspend the Individual’s security clearance. 2 Ex. 1.
The Notification Letter also informed the Individual that she was entitled to a hearing before an
Administrative Judge3 to present evidence to resolve these doubts. The Individual requested a
hearing in this matter. The LSO forwarded this request to OHA and the OHA Director assigned
me as the Administrative Judge in this matter. The DOE introduced 16 exhibits (Exs. 1-16) into
the record of this proceeding. The Individual introduced six exhibits (Exs. A-F) and testified on
her own behalf at the hearing.
II. FACTUAL FINDINGS AND THE
ASSOCIATED SECURITY CONCERNS
The Part 710 regulations require that I “make specific findings based upon the record as to the
validity of each of the allegations” in the Notification Letter. 10 C.F.R. § 710.27(c). In this case, the
Notification Letter cites Criterion L of the criteria for eligibility for access to classified matter or
special nuclear material set forth at 10 C.F.R. § 710.8. Ex. 1. With one exception, the Individual
does not dispute the factual accuracy of the Criterion L derogatory information described in the
Notification Letter. I set forth my factual findings below.
In 1994, the Individual filed for Chapter 13 bankruptcy. Exs. 8-10; Ex. 13.
In 2013, the Individual revealed in her QNSP that she had failed to pay state income tax in 2006.
Ex. 11. During the November 2013, PSI, the Individual stated that she had been contacted
several times by a collection agency for back state income tax for the year 2006. Ex. 14 at 13-14.
The Individual went on to state that, in light of this, she believed that she must have failed to file
her state income tax for the year 2006. Ex. 14 at 14. At the time of the November 2013, PSI, the
Individual had not taken any steps to resolve the delinquent 2006 back income taxes. Ex. 14 at
20-23.
During the November 2013, PSI, the Individual admitted that, in February 2011, her home in
another city was foreclosed by a financial institution after she stopped making payments on the
mortgage in April or May 2010. Ex. 14 at 45-48, 53-54. The Individual also admitted that she
had two charged off credit card accounts totaling approximately $8,000. Ex. 14 at 35-37, 43; Ex.
7; Ex. 11 at 31. Additionally, the Individual admitted that she was delinquent on four credit cards
2 Criterion L refers to information indicating 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. § 710.8(l).
3 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).
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totaling approximately $13,000 and that she had failed to contact the credit card companies
regarding the debts. Ex. 14 at 38-42; Ex. 7; Ex. 6.
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,
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 issued on December 29, 2005, by the Assistant to the
President for National Security Affairs, The White House (Adjudicative Guidelines), Guideline
F. Given the Individual’s admission in her QNSP that she had failed to pay her state income tax
for 2006 and her admission in the November 2013, PSI regarding her foreclosed home and her
charged off and delinquent credit accounts, I find that the LSO had sufficient grounds to invoke
Criterion L.
III. REGULATORY STANDARDS
The criteria for determining eligibility for security clearances set forth at 10 C.F.R. Part 710
dictates that, in these proceedings, an Administrative Judge 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 granting
the Individual a 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 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). In considering these factors, the Administrative Judge also consults the Adjudicative
Guidelines that set forth a more comprehensive listing of relevant factors.
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
At the hearing, the Individual asserted that, contrary to her statements in the QNSP and in the
November 2013, PSI, she had, in fact, filed a return and paid her 2006 state income tax. The
Individual testified that, in April 2011, when she moved to her current residence from another state,
she received a letter from a collection agency informing her that she owed approximately $3000 in
past due income taxes for 2006. Tr. at 52-53. The Individual, by her own admission, procrastinated in
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following up on this debt until April 2012. Tr. at 54. However, after contacting a state office and
being given a telephone number in order to make an inquiry, she again failed follow up on this debt.
Tr. at 54-55. After the November 2013, PSI, while searching for another document, the Individual
discovered her 2006 state tax return and other documents indicating that she had filed the return and
paid the assessed tax in a timely manner. Tr. at 55. The Individual has submitted into the record a
copy of her 2006 state tax return as well as other documents indicating that she had timely filed and
paid her 2006 state income tax. See Exs. A- D; Ex. F. Given the documentary evidence submitted by
the Individual, I find that she has resolved the Criterion L security concern raised by her alleged
failure to file and pay her 2006 state income tax.
The remaining Criterion L derogatory information relates to the Individual’s history of delinquent
and charged off debts and the Individual’s foreclosed residence. The Individual testified that she had
purchased a house in August 2008 when she was working for a DOE facility in another state. Tr. at
19-20. In January 2010, the Individual was informed that the DOE facility was winding down and
that she needed to find a position at another DOE facility. During this time, the housing market
experienced a severe downturn in her residential area. As a result, the Individual began to experience
financial difficulties because the credit limits on her credit cards were lowered and her minimum
payments suddenly increased. The Individual contacted her mortgage holder to see if she could
restructure her mortgage. Tr. at 20-21. The mortgage holder informed her that she was not eligible
for any type of assistance unless she was behind in her mortgage payments. Tr. at 21. Consequently,
in April or May 2010, the Individual stopped making mortgage payments on the residence. Tr. at 23-
24. In October 2010, the Individual moved to her current state of residence and to her current
position at the DOE facility. Tr. at 24. When the Individual moved to her current position, she
received relocation services from her employer to sell the residence. Tr. at 23. The relocation service
arranged a short sale of the residence for approximately $150,000.4 Tr. at 75. However, the mortgage
holder refused to affirm the transaction unless the Individual signed a personal promissory note for
$25,000. Tr. at 76. Because the Individual refused to sign the promissory note, the mortgage holder
foreclosed upon the residence. Tr. at 76-77. The Individual testified that she does not have any
financial liability resulting from the foreclosure. Tr. at 77.
The Individual testified that she has settled the two charged off credit card accounts referenced in the
Notification Letter. Tr. at 32. See Ex. E. However, when shown a recent credit report obtained a few
days before the hearing, the Individual did not recognize another delinquent credit card account for
$358 which did not appear in an earlier credit report submitted as an exhibit (Ex. 7) in this case.5 Tr.
at 34; Ex. 16. The Individual has not been contacted by the credit card company with regard to that
account. Tr. at 34-35. The Individual testified that with regard to most of her delinquent credit
accounts she usually waits for the debt holder to contact her before she takes action to resolve the
debt. Tr. at 35-36. However, with regard to one of the delinquent credit card accounts, she contacted
the account holder in 2010 but was unable to settle the account. Tr. at 44-45. At the hearing, the
Individual affirmed most of the delinquent credit card accounts shown on the recent credit report. Tr.
at 44-47. Based upon the most recent credit report, the Individual believes that she now owes
approximately $22,000 in delinquent accounts. Tr. at 87.
4 The Individual purchased the house for $250,000. Tr. at 77.
5 The DOE Counsel submitted this recent credit report during the hearing and, for the purposes of this Decision, I
have marked it as Exhibit 16.
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The Individual testified that she receives periodic payments for being a member of a Native
American tribe and uses these payments to resolve outstanding accounts. Tr. at 44-45, 47-48. The
Individual also testified that she has visited a community financial assistance program to seek advice
regarding her financial options and has taken several on-line classes regarding personal finance
offered by a university. Tr. at 71-72.
The Individual, like many others homebuyers, was caught in the housing price bubble in which a
number of homeowners’ mortgage debts became greater than the deflated price of their houses. As
such, the fact that she had such a mortgage does not necessarily raise a question about the
Individual’s judgment. See Adjudicative Guidelines, ¶ 20(b) (“the conditions that resulted in the
financial problem were largely beyond the person's control (e.g. loss of employment, a business
downturn, unexpected medical emergency, or a death, divorce or separation), and the individual
acted responsibly under the circumstances). However, it is of concern that, in an attempt to get
relief from her mortgage problem, she deliberately chose not to make payments on her residence
despite the fact that she had been successfully making her mortgage payments. This demonstrates an
unwillingness to honor a debt and reflects poor judgment.
As for the Individual’s delinquent credit cards, the Individual has made a promising start by
resolving the two charged off credit card accounts. However, the Individual has not made any recent
attempts to resolve any of the remaining delinquent accounts. Further, the Individual admits that her
current method of dealing with creditors is similar to the method she described in a June 1995 Letter
of Interrogatory she submitted to the LSO.6 Tr. at 62-63. In examining the Adjudicative Guidelines
criteria for mitigation of financial instability, I find that none of these factors apply in the regarding
the Individual’s current delinquent debts. See Adjudicative Guidelines, Guideline F, ¶ 20 (mitigating
factors). Further, in prior cases involving financial irresponsibility, Administrative Judges 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-01078 (2011); Personnel Security Hearing, Case No. PSH-11-0033 (2011). The
Individual has been attempting to learn more about personal finance and settle some of the charged
off and delinquent accounts, in part, by using her tribal payments. Nonetheless, the Individual also
admitted that this plan might not be practical since she is currently on leave from her position and not
being paid. Tr. at 47. Given the facts before me, I cannot find, as of the date of the hearing, that the
Individual has yet adopted a proactive, responsible approach to resolve all of her delinquent accounts
or has demonstrated an extended period of financial responsibility. Consequently, I cannot find that
all of the Criterion L derogatory information listed in the Notification Letter has been mitigated.
V. CONCLUSION
For the reasons set forth above, I conclude that the Individual has not mitigated all of the DOE’s
security concerns under Criterion L. Therefore, the Individual has not demonstrated that
6 When asked in the 1995 Letter of Interrogatory as to what efforts she made to work with her creditors or a
consumer credit counselling agency prior to filing for her 1994 bankruptcy, the Individual responded “I tried
contacting creditors directly to work out the situations. I would pay one creditor all I could and as much of what they
asked of me one month while holding out on the others. This was a continuous, rotating cycle that wasn't getting me
very far ahead in the game. And of course they were not pleased. When the creditors started to all demand more
money and more often, I contacted a credit counselling agency. For reasons I do not recall now, this did not appear
to be a course I could take. . . .” Ex. 10 at 1.
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restoring her access authorization would not endanger the common defense and would be clearly
consistent with the national interest. Accordingly, I find that the DOE should not restore the
Individual’s access authorization. Review of this decision by an Appeal Panel is available under
the procedures set forth at 10 C.F.R. § 710.28.
Richard A. Cronin, Jr.
Administrative Judge
Office of Hearings and Appeals
Date: May 23, 2014