PSH-14-0046

*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: May 5, 2014 ) Case No. PSH-14-0046
)
_________________________________________ )
Issued: July 25, 2014
__________________________
Administrative Judge Decision
__________________________
William M. Schwartz, Administrative Judge:
This Decision concerns the eligibility of XXXXXXXXXXXXXX (“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 DOE should not grant access authorization to this
individual at this time.
I. BACKGROUND
The individual is a DOE contractor employee who has applied for DOE access authorization. In
December 2013, the Local Security Office (LSO) conducted a Personnel Security Interview
(PSI) with the Individual in order to discuss certain information gathered in the course of
reviewing her application. In March 2014, the LSO sent a letter (Notification Letter) to the
individual advising her that it possessed reliable information that created substantial doubt
regarding her eligibility to hold a security clearance. In an attachment to the Notification Letter,
the LSO explained that the derogatory information fell within the purview of one potentially
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.
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disqualifying criterion set forth in the security regulations at 10 C.F.R. § 710.8, subsection (l)
(Criterion L).2 See DOE Ex. 1 (Summary of Security Concerns). The Notification Letter also
informed the individual that she was entitled to a hearing before an Administrative Judge in
order to resolve the security concerns. Id.
The individual requested a hearing on this matter. DOE Ex. 2. The LSO forwarded her request
to the Office of Hearings and Appeals, and I was appointed the Administrative Judge. At the
hearing, the individual represented herself and offered her own testimony. The DOE counsel
presented no witnesses, and tendered 11 numbered exhibits into the record.
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.
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”).
2 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).
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III. DEROGATORY INFORMATION AND ASSOCIATED SECURITY CONCERNS
As stated above, the LSO issued a Notification Letter informing the individual that the DOE
possessed derogatory information that raises doubts under Criterion L regarding her eligibility to
hold a DOE access authorization. DOE Ex. 1. As the sole basis in support of its Criterion L
concern, the LSO cited the individual’s purported failure to file her Federal and state income tax
returns for tax years 2008 through 2012. Id.
It is well-settled that 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 at ¶ 18. Among the behaviors that may give rise to security concerns related to an
individual’s financial irresponsibility is a “failure to file annual Federal, state, or local income
tax returns . . . .” Id. at ¶ 19(g). In light of the information cited, which indicated that the
individual did not file required Federal and state income tax returns for a period of five years, I
find that the LSO properly invoked Criterion L.
IV. FINDINGS OF FACT
For 15 years of marriage, the individual did not work outside of her home. Ex. 10 (Transcript of
December 6, 2013, PSI) at 146. The individual and her husband received a discharge in
bankruptcy in 2008, which eliminated virtually all of their debt except for her student loans.
Exhibit (Ex.) 7 (Discharge of Debtor); Transcript of Hearing (Tr.) at 21-22. In September 2009,
she separated from her husband and was later divorced. Tr. at 21. In 2009 and 2010, she had
only cash income, as her sole source of income was tips. Id. at 15. In 2011, she began working
in her current position, for which she receives a conventional paycheck and also receives
appropriate tax forms, such as the W-2, annually. Id. at 34.
At the hearing, the individual testified that she and her husband did in fact file a tax return with
the Internal Revenue Service (IRS) for the tax year 2008. Although she did not know that fact
when she was interviewed by the LSO, she learned about it in a telephone conversation with an
IRS staff member while she was preparing for this hearing. Id. at 10.3 The individual admits
that she has not filed any tax returns with either the IRS or her state taxation authority for the tax
years 2009, 2010, 2011, or 2012. Id. at 17-19. She has, however, filed her tax returns for 2013,
with the assistance of the commercial tax preparation service that she and her husband employed
during their marriage. Id. at 20, 25-26.
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
3 Because the individual was awaiting written verification from the IRS regarding this fact, I left the record open,
until the date I received the hearing transcript, to accept a copy of any correspondence on this matter. Id. at 49. I
have received no submission from the individual.
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the documentary evidence. For the reasons set forth below, I cannot conclude that granting the
DOE access authorization to the individual “will not endanger the common defense and security,
and is clearly consistent with national interest.” 10 C.F.R. § 710.7(a).
A. The Individual’s Mitigating Evidence
With one exception, the individual did not dispute the facts cited in the Notification Letter. At
the hearing, she testified that, contrary to the statement in the Notification Letter, she and her
husband did file a tax return for 2008, though she could not recall whether they had done so at
the time of her PSI. Ex. 10 at 134. She is awaiting written confirmation from the IRS that they
did in fact file a return for 2008.
The individual admits that she has not filed tax returns for the years 2009 through 2012. She
testified that she believed her annual income was around $10,000 in 2009 and 2010, and may
have earned less than the minimum filing threshold. Tr. at 20, 36. The greatest difficulty she
faces in filing tax returns for these years is the lack of documentation; because she earned only
tips, she did not receive annual income information from her employers. She has attempted to
obtain records of her cash income from her employers, but reported that they keep no such
records beyond one year. Id. at 16. She also asked her bank for records of account deposits for
those years, but they were insufficiently detailed to provide her with the data she needed.
Id. She only recently learned that the IRS might accept an estimate of her income to permit her
to file returns. Id. at 37.
As for the tax years 2011 and 2012, the individual received the necessary documentation for
filing her tax returns, and admits that she should have done so. Id. at 19, 38. She feels, however,
that she lacks the necessary skills to file her taxes, and is hesitant to use a tax preparation service
because of the cost. Id. at 14, 19, 34. She attempted to complete her 2012 Federal tax return, but
did not file it because she felt she was unable to fill it out correctly. Id. at 18-19; Ex. 9 (2012
Form 1040). She hesitated to talk with the tax authorities about her filing issues, because she
was nervous about the amount she might owe. Ex. 10 at 133. She has recently, however,
inquired about installment plans for paying her 2011 and 2012 taxes. Tr. at 24. In contrast, she
filed her tax returns for 2013, using a commercial tax preparation service. Id. at 25.
Finally, the individual testified that her taxes are the only debts on which she is delinquent, and
the Notification Letter, focusing only on her failure to file tax returns, mirrors that fact. She
explained that after her divorce, she fell into debt in her efforts to support her children and
herself without any contribution from her ex-husband. Id. at 22. She admitted that she paid less
attention to her bills than she should have due to the stress of the divorce and her struggles at the
time to make ends meet. Id. at 23. She has since taken care of her bills, and is current with her
student loan. Id. at 24, 28.
B. Administrative Judge’s Evaluation of Evidence
The individual has clearly faced trying circumstances in recent years. Her divorce left her as the
sole supporter of her household, and she had difficulty making ends meet. She also had to face
responsibilities that she had once shared with her husband, such as paying bills and filing taxes.
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Since she has begun earning a steady salary, she has worked diligently to pay her outstanding
debts. For that reason, the sole security concern of the LSO in this case is the individual’s failure
to file tax returns.
Among the factors that may serve to mitigate security concerns raised by an individual’s failure
to file tax returns financial problems is 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.” Adjudicative
Guidelines, Guideline F at ¶ 20(a). Although the individual did file her tax returns for the most
recent year, 2013, she has not yet filed for a number of earlier years. Even if I accept the
individual’s assertion that she did in fact file a Federal tax return for 2008, and I have no reason
to question her credibility, the fact remains that she has not filed tax returns for four recent years.
I understand that filing returns for 2009 and 2010 will not be a simple process, because she lacks
documentation supporting her income, but the individual has made little progress toward
resolving that concern. Moreover, she has not filed for 2011 and 2012, years for which she
admits she has the necessary documentation. She states she has discussed installment plans with
the IRS and her state for those years. She has not, however, committed to filing returns for those
years, whether for fear of tax liability, or lack of expertise, or lack of money to obtain help from
a filing service. Until she does so, I cannot find that her behavior happened so long ago, or so
infrequently, or under circumstances that are unlikely to recur or do not cast doubt on her
judgment.
Nor can I find other conditions that might mitigate the LSO’s concern with respect to the
individual’s failure to file her tax returns. Although her financial hardship arose as the result of a
divorce, and she has acted responsibly in resolving other outstanding debts, I cannot find that she
has taken sufficient action with regard to filing her taxes. Adjudicative Guidelines, Guideline F
at ¶ 20(b). She has been earning a steady salary since 2011, and though that income has enabled
her to satisfy her debts, she has not yet made inroads into the area of the LSO’s concern. Nor
does the record reflect that she had received counseling for the problem or that there are clear
indications that the problem is being resolved or under control. Adjudicative Guidelines,
Guideline F at ¶ 20(c).
In this case, upon consideration of the entire record of this proceeding, including the hearing
testimony and documentary evidence submitted by the parties, I find that the individual has not
presented sufficient evidence to fully resolve the Criterion L concern cited in the Notification
Letter. In a number of recent cases, Administrative Judges found individuals eligible for access
authorization despite their failure to file tax returns for two recent years. In each case, however,
the individual had not only recognized the need to file, as the individual has done here, but has
also filed the overdue returns before the hearing took place. See, e.g., Personnel Security
Hearing, Case No. PSH-14-0018 (2014). Despite the individual’s best intentions, however, she
has not yet taken sufficient steps to convince me that the security concerns associated with
failing to pay her income taxes have been mitigated. I cannot find that four years of unfiled tax
returns is a small lapse in otherwise good judgment, is unlikely to recur in the future, and does
not cast doubt on her current reliability.
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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 Criterion 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 not presented sufficient
information to fully resolve the Criterion L concern. Therefore, I cannot conclude that granting a
security clearance to the individual “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 grant DOE access authorization to the individual 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.
William M. Schwartz
Administrative Judge
Office of Hearings and Appeals
Date: July 25, 2014