PSH-14-0025

*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-14-0025
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Issued: July 1, 2014
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Administrative Judge Decision
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Robert B. Palmer, Administrative Judge:
This Decision concerns the eligibility of XXXXXXXXXXXXX (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 individual’s
security clearance should be restored. 2
I. BACKGROUND
The individual is employed by a Department of Energy (DOE) contractor, and was granted a
security clearance in connection with that employment. During a background investigation of the
individual, the local security office (LSO) obtained information that raised security concerns. To
1An 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
also be referred to in this Decision as a security clearance.
2 Decisions issued by the Office of Hearings and Appeals (OHA) are available on the OHA
website located at http://www.oha.doe.gov . The text of a cited decision may be accessed by
entering the case number of the decision in the search engine located at
http://www.oha.doe.gov/search.htm.
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address those concerns, the LSO summoned the individual for an interview with a personnel
security specialist in October 2013. After this Personnel Security Interview (PSI) failed to
resolve the concerns, the LSO determined that derogatory information existed that cast into
doubt the individual’s eligibility for access authorization. It informed the individual of this
determination in a letter that set forth the DOE’s security concerns and the reasons for those
concerns. I will hereinafter refer to this letter as the Notification Letter. The Notification Letter
also informed the individual that he was entitled to a hearing before an Administrative Judge in
order to resolve the substantial doubt concerning his eligibility for access authorization.
The individual requested a hearing on this matter. The LSO forwarded this request to the Office
of Hearings and Appeals, and I was appointed the Administrative Judge. The DOE introduced 13
exhibits into the record of this proceeding. The individual introduced 37 exhibits and presented
the testimony of his accountant, in addition to testifying on his own behalf.
II. THE NOTIFICATION LETTER AND THE DOE’S SECURITY CONCERNS
As indicated above, the LSO concluded in the Notification Letter that derogatory information
exists that creates a substantial doubt as to the individual’s eligibility to hold a security clearance.
That information pertains to paragraph (l) of the criteria for eligibility for access to classified
matter or special nuclear material set forth at 10 C.F.R. § 710.8.
Criterion (l) refers to information indicating that the individual has engaged in unusual conduct
or is subject to circumstances which tend to show that he is not honest, reliable or trustworthy; or
which furnishes reason to believe that he may be subject to pressure, coercion, exploitation or
duress which may cause him to act contrary to the best interests of national security. Such
conduct includes, but is not limited to, a pattern of financial irresponsibility. The Notification
Letter refers to two separate concerns under this criterion: that the individual has not been
financially responsible, and that he omitted significant information about his financial difficulties
from a 2013 Questionnaire for National Security Positions (QNSP). Regarding the individual’s
finances, the Notification Letter alleges that he:
 Owes $52,975.05 in unpaid federal taxes for the years 2007, 2009 and 2012;
 Owes $3,016 in unpaid state taxes for the years 2007, 2009, 2010 and 2012;
 Has had three foreclosures for past due amounts totaling $72,199;
 Has two unpaid collection accounts totaling $4,444 in unpaid debt;
 Admitted during the October 2013 PSI that he has been financially irresponsible; and
 Failed to pay his state and/or federal taxes for the years 2007, 2009, 2010 and 2012,
despite having been advised of the DOE’s security concerns concerning financial
irresponsibility during PSIs conducted in 2007 and 2009.
The Notification Letter further alleges that during his October 2013 PSI, the individual admitted
that he failed to disclose the following information on his 2013 QNSP:
 That a court judgment in favor of a local bank had been entered against him in 2008;
 That his wages were garnished in 2008 to satisfy this judgment;
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 That the Internal Revenue Service (IRS) placed a lien on his property in 2011 for failure
to pay his 2007 federal taxes; and
 That he had four collection accounts.
These circumstances adequately justify the DOE’s invocation of criterion (l), and raise
significant security concerns. Conduct involving lack of candor or dishonesty can raise questions
about an individual’s reliability, trustworthiness and ability to protect classified information.
Moreover, 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, The White House (December 19,
2005), Guidelines E and F.
III. REGULATORY STANDARDS
The criteria for determining eligibility for security clearances set forth at 10 C.F.R. Part 710
dictate 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 or unfavorable, that has a bearing on the question of whether granting or
restoring 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).
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). See
Personnel Security Hearing, Case No. VSO-0013, 24 DOE ¶ 82,752 at 85,511 (1995) (affirmed
by OSA, 1996), and cases cited therein. 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 attempted to establish, through his testimony and that of his
accountant, that his financial problems were caused by factors that were largely beyond his
control, that he has successfully addressed the financial issues cited in the Notification Letter,
and that his omissions from the 2013 QNSP were inadvertent and do not reflect accurately on his
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honesty and trustworthiness. For the reasons that follow, I find that the individual has sufficiently
mitigated the DOE’s security concerns under criterion (l).
A. The Individual’s Finances
As an initial matter, I find that, despite his somewhat equivocal admission of financial
irresponsibility during the 2013 PSI, the individual’s difficulties have primarily been caused by
factors that were largely beyond his control. 3 At the hearing, the individual testified that his wife
had a “nervous breakdown” in November 2003, and was hospitalized for approximately 11 days.
When she was released from the hospital, she was put on disability, and then fired in 2004.
Hearing Transcript (Tr.) at 81-82; Individual’s Exhibit (Ind. Ex.) 32. The individual’s accountant
testified that she was diagnosed with bi-polar disorder and was not allowed to go back to work.
After her long-term disability expired, she started receiving Social Security disability. In all, the
accountant continued, the wife’s illness resulted in a loss of approximately $30,000 in annual
income, the difference between her salary before her termination and her current income from
Social Security. Tr. at 82.
The individual further testified that he and his wife separated in 2006 for almost two years.
During this separation, unbeknownst to the individual, she withdrew large amounts of money
from her retirement account without having taxes withheld and “ran up credit cards to survive
on.” Id. at 86-87. The individual later withdrew money from his retirement account, with taxes
withheld, to pay bills that his wife had incurred during their separation. This resulted in a large
amount of taxable income for the couple, at a time when their income was severely diminished
due to the wife’s disability, and their expenses were elevated due to the wife’s spending and the
maintenance of two households. The individual’s tax problems began at this time. Id. at 85-86.
The record in this matter is devoid of any evidence of extravagant or irresponsible spending by
the individual. Instead, it supports my finding that the individual’s financial problems were
caused primarily by his wife’s illness and her resulting loss of income, their separation, and
questionable financial decisions made by his wife during that separation, which were likely
caused, at least in part, by her mental condition. See Adjudicative Guideline F, ¶ 20 (b) (that the
conditions that resulted in the financial problem were largely beyond the person’s control (e.g.
loss of employment, unexpected medical emergency, divorce or separation), and the individual
acted responsibly under the circumstances, is a potentially mitigating condition).
The record further indicates that the individual has made substantial progress in resolving his
financial issues. As an initial matter, the individual has satisfied his state tax indebtedness. Tr. at
14; Ind. Ex. 13. Regarding his federal taxes, the individual’s accountant testified that, as a result
of discussions with the IRS, the individual submitted a check for $26,500 as a settlement of his
federal tax indebtedness. Although the amount remitted was suggested by the IRS, the
accountant testified that a formal decision as to whether that amount would be satisfactory would
not be made until August of 2014. Tr. at 17; Ind. Exs. 14, 23, 24, 33. The accountant testified
3 When asked by the analyst “Do you think that you’ve been irresponsible at all in the last few
years . . . regarding your finances,” the individual replied, “Um, um, probably in some sense.”
DOE Exhibit (DOE Ex.) 11 at 171.
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that if that amount is accepted by the IRS, it will resolve all of the individual’s remaining federal
tax problems. Tr. at 36.
The individual has also provided significant mitigating evidence regarding the three foreclosures
and the two collection accounts alleged in the Notification Letter. One of the “foreclosures”
concerned a mortgage held by bank number one on the individual’s residence. The individual’s
accountant testified that that mortgage has been modified, that the past-due amount and interest
have been included in the new mortgage, and that the individual is up to date on these payments.
Tr. at 42, Ind. Ex. 30. The other two foreclosures referenced in the Notification Letter actually
relate to a single mortgage, one held by bank number two on the individual’s previous residence
and later sold to bank number three. Tr. at 70-72. Bank number three received a full price offer
for the property and the individual’s liability has been extinguished. Ind. Ex. 37. Regarding the
two collection accounts, the individual testified that he reached a settlement with the first
creditor and paid that account off, Tr. at 56-58; Ind. Ex. 30, and that his attempts to contact the
second creditor, to whom he owed $75, were unsuccessful. Tr. at 59.
I have also examined information concerning the individual’s and his wife’s current monthly
income and expenses. That information indicates a positive monthly cash flow of between two
and three hundred dollars per month. Ind. Exs. 36 and 37.
The individual obtained the funds to pay his back taxes and other debts through an unsecured
loan for $35,000 from a friend of the family. Tr. at 37. The promissory note for that loan (Ind.
Ex. 25) calls for monthly payments of $500, with a balloon payment due at the end of five years.
The individual testified that his daughter and her husband are making the monthly payments
“until everything is caught up,” Tr. at 39, and the individual’s accountant testified that the
balloon payment will be made with funds obtained from the sale of a house that the individual’s
wife inherited from her mother, that is currently tied up in probate court. Tr. at 91.
B. The Individual’s Omissions From His 2013 QNSP
Finally, the individual discussed his omission of significant information from his 2013 QNSP,
and the circumstances under which he completed that form. He testified that he completed the
form at his worksite, in the midst of repeated interruptions during which he would have to leave
the immediate area of his computer to perform his duties. The two questions that the individual
answered incorrectly in section 26, “Financial Record,” consisted of lists of financially adverse
events, and the individual was supposed to indicate whether any of those events had happened to
him. In his rush to complete the form, the individual testified, he inadvertently answered “No” to
both questions, when he should have answered “Yes” because several of the specified events had
happened to him within the previous seven years. Tr. at 78-79.
Given the totality of the circumstances, I find that the individual’s omission of relevant
information from his 2013 QNSP was inadvertent. As an initial matter, I found the individual to
be open, honest and candid during the hearing about his financial difficulties. I further note that
the omissions were an isolated event, as there is no indication in the record that there have been
similar omissions during the individual’s 20+ years as a DOE clearance holder. Also, since at
least three of the four items omitted were previously disclosed to the DOE by the individual, I
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find it unlikely that he was attempting to deceive the agency by omitting them from his 2013
QNSP. Finally, I find that the circumstances under which the individual completed the QNSP
could easily have contributed to his two inaccurate answers. Hurried and distracted by constant
interruptions, the individual could readily have missed items included in the lists contained in the
two questions that should have triggered “Yes” responses.
V. CONCLUSION
For the reasons set forth above, I find that the individual has adequately addressed the DOE’s
concerns under criterion (l) regarding his finances and his honesty. The individual established at
the hearing that his difficulties were primarily caused by his wife’s illness, their separation, and
questionable financial decisions she made during this separation, and that he has made
substantial progress in extricating himself from those difficulties. The individual further
convinced me that the omissions from his 2013 QNSP were inadvertent, and did not represent an
attempt to mislead the DOE. Consequently, he has demonstrated that restoring his access
authorization would not endanger the common defense and would be clearly consistent with the
national interest. Accordingly, I find that the DOE should restore the individual’s security
clearance. Review of this decision by an Appeal Panel is available under the procedures set forth
at 10 C.F.R. § 710.28.
Robert B. Palmer
Administrative Judge
Office of Hearings and Appeals
Date: July 1, 2014