PSH-14-0057

*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 21, 2014 )
) Case No.: PSH-14-0057
__________________________________________)
Issued : September 10, 2014
__________________________
Administrative Judge Decision
__________________________
Wade M. Boswell, Administrative Judge:
This Decision concerns the eligibility of XXXXXXXXXXXXXXXXXXXX (hereinafter
referred to as “the individual”) to hold an access authorization1 under the Department of
Energy’s (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.” As fully discussed below, after carefully considering the
record before me in light of the relevant regulations and Adjudicative Guidelines, I have
determined that the individual’s access authorization should not be restored at this time.
I. Background
The individual is employed by a DOE contractor in a position that requires him to hold
DOE access authorization. As a holder of access authorization, the individual is subject to
periodic reinvestigations to determine his continued eligibility to maintain access
authorization. During the most recent reinvestigation of the individual, information was
received with respect to several collection accounts and the individual’s failure to file and
pay his federal and state income taxes. See Exhibit 3. Upon receipt of this information,
the Local Security Office (LSO) conducted a personnel security interview (PSI) with the
individual on February 25, 2014 (PSI). See Exhibit 7.
1 Access authorization is defined as “an administrative determination that an individual is eligible for
access to classified matter or is eligible for access to, or control over, special nuclear material.” 10 C.F.R.
§ 710.5(a). Such authorization will be referred to variously in this Decision as access authorization or
security clearance.
2
On April 11, 2014, the LSO advised the individual in a letter (Notification Letter) that it
possessed reliable information that created substantial doubt regarding his 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 disqualifying
criterion set forth in the security regulations at 10 C.F.R. § 710.8, subsection (l)
(hereinafter referred to as Criterion L).2 See Exhibit 1.
Upon his receipt of the Notification Letter, the individual exercised his right under the
Part 710 regulations by requesting an administrative review hearing. See Exhibit 2. The
Director of the Office of Hearings and Appeals (OHA) appointed me the Administrative
Judge in the case and, subsequently, I conducted an administrative hearing in the matter.
At the hearing, the LSO presented no witnesses; the individual presented testimony of
one witness, himself. The LSO introduced seven numbered exhibits into the record; the
individual tendered eight lettered exhibits (Exhibits A-H). The exhibits will be cited in
this Decision as “Ex.” followed by the appropriate numeric or alphabetic designation.
The hearing transcript in the case will be cited as “Tr.” followed by the relevant page
number.3
II. Regulatory Standard
A. Individual’s Burden
A DOE administrative review proceeding under Part 710 is not a criminal matter, where
the government has the burden of proving the defendant guilty beyond a reasonable
doubt. Rather, the standard in this proceeding places the burden on the individual because
it is designed to protect national security interests. This is not an easy burden for the
individual to sustain. The regulatory standard implies that there is a presumption against
granting or restoring a security clearance. See Department of Navy v. Egan, 484 U.S.
518, 531 (1988) (“clearly consistent with the national interest” standard for granting
security clearances indicates “that security determinations should err, if they must, on the
side of denials”); Dorfmont v. Brown, 913 F.2d 1399, 1403 (9th Cir. 1990), cert. denied,
499 U.S. 905 (1991) (strong presumption against the issuance of a security clearance).
The individual must come forward with evidence to convince the DOE that granting his
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 individual is
afforded a full opportunity to present evidence supporting his eligibility for an access
authorization. The Part 710 regulations are drafted so as to permit the introduction of a
very broad range of evidence at personnel security hearings. Even appropriate hearsay
evidence may be admitted. 10 C.F.R. § 710.26(h). Thus, an individual is afforded the
utmost latitude in the presentation of evidence to mitigate the security concerns at issue.
2
See Section III below.
3 OHA decisions are available on the OHA website at www.oha.doe.gov. A decision may be accessed by
entering the case number in the search engine at www.oha.gov/search.htm.
3
B. Basis for the Administrative Judge’s Decision
In personnel security cases arising under Part 710, it is my role as the Administrative
Judge to issue a Decision that reflects my comprehensive, common-sense judgment,
made after consideration of all the relevant evidence, favorable and unfavorable, as to
whether the granting or continuation of a person’s access authorization will not endanger
the common defense and security and is clearly consistent with the national interest. 10
C.F.R. § 710.7(a). I am instructed by the regulations to resolve any doubt as to a person’s
access authorization eligibility in favor of the national security. Id.
III. The Notification Letter and the Security Concerns at Issue
As previously noted, the LSO cited one criterion as the basis for suspending the
individual’s security clearance, Criterion L. To support its allegations, the LSO notes (1)
the individual having four collection accounts totaling $1,268 and (2) the individual
acknowledging during the PSI that he is aware of his obligation to file income taxes but
admitting that he had not filed his federal or state income taxes for the tax year 2012.
See Ex. 1. An individual’s failure or inability to live within his means, satisfy his debts
and to meet his financial obligations raises a security concern under Criterion L because
his actions 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 Guideline F
of the 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). Moreover, a
person who is financially overextended is at risk of having to engage in illegal acts to
generate funds. Id.
In light of the information available to the LSO, the LSO properly invoked Criterion L.
IV. Findings of Fact
The individual does not contest the accuracy of the allegations set forth in the
Notification Letter at the time of its issuance. Ex. 2. During the hearing, the individual
focused on the progress that he has made in resolving his financial difficulties since his
receipt of the Notification Letter and the solidity of his family’s financial plan moving
forward.
Collection Debt. Two of the collection accounts identified in the Notification Letter were
listed as being owed to debt factoring companies and, at the time of the hearing, the
individual was uncertain as to the original source of that debt.4 Ex. 1; Tr. at 33 – 40.
Those debts appeared to have had the same original amount and it was discussed at the
hearing that both accounts might relate to a single debt. Ex. 4 at 5, 7; Tr. at 52 – 53, 65.
4 The individual credibly testified that, following receipt of the Notification Letter, he attempted to resolve
one of these debts but, upon contacting the factoring companies listed in the Notification Letter, he was
informed by each of those companies that it could locate no record of the debt. Tr. at 33, 34, 39.
4
Subsequent to the hearing, the individual ascertained that both accounts related to a single
debt, which he then settled in full. Ex. F.
The two other debts identified in the Notification Letter (one with a medical facility and
one with a municipal waste agency) were both paid in full by the individual prior to the
hearing. Ex. C; Ex. G; Tr. at 41 – 43. Anticipated fees payable to the municipal waste
agency through the end of the calendar were prepaid by the individual when he paid his
arrearages. Id. at 30, 43.
The LSO has presented no information on any other financial accounts of the individual
as being delinquent or in collections. The individual credibly testified that he believes
that no such accounts exist.5 Id. at 53.
Income Taxes. For the calendar years 2005 through 2012, the individual filed his federal
and state income tax returns late, usually one to three years following the deadline for
filing such returns.6 Id. at 24. He and his wife have consistently owed money on their
delinquently filed taxes, which they have paid by withdrawing money from a retirement
account which the individual established during a prior employment. Id. at 14, 22 – 24.
Following the PSI, the individual filed his federal and state tax returns for 2012 although
they were filed approximately one year late. Ex. 2; Tr. at 11 –12. The individual’s 2013
federal and state tax returns were filed on time. Id. at 13, 25. He has entered into tax
payment plans with both the federal and state tax authorities for his unpaid taxes for 2012
and 2013, the only years for which he had outstanding tax debt. Ex. A; Tr. at 11, 26, 30.
The individual commenced payments pursuant to those tax payment plans in June 2014;
all payments due under those plans have been paid on time. Ex. B; Ex. D.
The individual has adjusted his tax withholdings to increase the amount being withheld
from his pay for taxes. As a result, he expects to eliminate or substantially reduce the
amount of taxes due when submitting his tax returns in the future. Tr. at 16, 18, 49 – 50.
The individual submitted a budget showing his household income and expenses,
including the increased tax withholdings and their payments under their tax payment
plans with the federal and state tax authorities. Based on that budget, the individual and
his wife have an $800 monthly surplus after paying their monthly expenses and
liabilities.7 Ex. H.
5 The individual submitted a credit report as a post-hearing submission; however, that report was not
subject to examination at the hearing and I have given it limited weight in my findings of fact. See Ex. E.
6 The individual’s tax problems predate this period, beginning around 1997 – 1998. Additionally, the PSI
reflects that the individual acknowledged in a letter of interrogatory dated March 31, 2004, that he had not
filed his federal or state income taxes for 2001 and 2002. Ex. 7 at 68 – 69; Tr. at 31 – 33.
7 The budget appears to contain an arithmetic error in summing the individual’s and his wife’s incomes. In
reaching my findings, I have corrected the total of the household income relying on the accuracy of the
itemized incomes which are consistent with the earnings statements accompanying the budget. See Ex. H.
5
V. Analysis
I have thoroughly considered the record of this proceeding, including the submissions
tendered in this case and the testimony of the witnesses presented at the hearing. In
resolving the question of the individual’s eligibility for access authorization, I have been
guided by the applicable factors prescribed in 10 C.F.R. § 710.7(c)8 and the Adjudicative
Guidelines. After due deliberation, I have determined that the individual’s access
authorization should not be restored at this time. I cannot find that restoring the
individual’s DOE security clearance will not endanger the common defense and security
and is clearly consistent with the national interest. 10 C.F.R. § 710.27(a). The specific
findings that I make in support of this decision are discussed below.
A. Mitigating Evidence
Although the individual was unable to identify two of the four collection accounts listed
in the Notification Letter, he did not contest the accuracy of the facts alleged in the
Notification Letter. Rather, the individual focused on the progress he and his wife have
made in resolving their financial situation and their ability to meet all of their financial
obligations in the future.
With respect to the two collection accounts that the individual was unable to identify, he
retained a legal consultant to establish the accuracy of the amounts due. Tr. at 35 – 36,
39 – 40. Although that process was in progress at the time of the hearing, the individual
was able to establish subsequent to the hearing that those accounts related to a single debt
and, upon identifying the appropriate entity to pay, the individual satisfied the debt in
full. Ex. F.
The Notification Letter listed only two additional collection accounts and those were
satisfied prior to the hearing. Ex. C; Ex. G.
With respect to income taxes, the individual testified that he has never attempted to avoid
his tax obligations. Tr. at 24. The Notification Letter cited only the individual’s failure to
file his 2012 federal and state tax returns. He has subsequently filed his 2012 tax returns,
although delinquently. Ex. 2; Tr. at 11 – 12. His 2013 tax returns were filed in a timely
manner. Id. at 13, 25. His tax debt with respect to earlier years has been paid in full and
he has entered into tax payment agreements with respect to his outstanding 2012 and
2013 taxes. Ex. A; Tr. at 11, 26, 30. He testified that he had the financial ability to pay
his outstanding tax debt for 2012 and 2013, in full; however, he decided it was more
financially prudent to retain those funds to provide for financial security for his family in
the event that his present employment does not continue. Id. at 26 – 28. Moving forward,
8 Those factors include the following: 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 at the time of the conduct, the voluntariness of his 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.
6
the individual has increased his tax withholdings to reduce or eliminate the need to make
tax payments when he files his tax returns. Id. at 16, 18, 49 – 50, 62.
The individual and his wife have reduced their expenses so that their present income is
$800 per month in excess of their present expenses, including their increased tax
withholdings and their tax payment plans. Ex. H; Tr. at 17, 57 – 58. The individual
believes that this will allow him to meet his financial obligations on a current basis going
forward.
B. Administrative Judge Evaluation of Evidence
The individual’s documented progress on his finances is laudable: he has paid or resolved
all of his outstanding collections debt, he has filed all of his income tax returns and he is
current on his tax payment agreements with the federal and state tax authorities for the
two years for which he has outstanding tax obligations. Ex. A; Ex. B; Ex. C; Ex. D;
Ex. F; Ex. G. Additionally, he has presented a budget illustrating his family’s ability to
meet their financial needs and obligations in the future. Ex. H. This significant progress
and planning, for which the individual is to be commended, must be analyzed within the
context of the individual’s total financial situation.
The individual does not contest that he had collections debt at the commencement of the
administrative review process. Ex. 2. The existence of such debt reflects that the
individual has been either unable or unwilling to pay his debts in a timely manner and
demonstrates financial irresponsibility, which is a disqualifying security concern under
Criterion L. See Adjudicative Guidelines, Guideline F ¶ 19(a).
While the Notification Letter only cited tax concerns with respect to the individual’s
failure to file his 2012 federal and state tax returns, I cannot ignore the record which
reflects that the individual was delinquent in filing his tax returns in 2001, 2002, and
2005 through 2012, tending to file one to three years late. Ex. 7 at 68 – 69; Tr. at 24,
31 – 33. That the individual’s tax withholdings were insufficient to satisfy his tax
liabilities upon filing his income tax returns and that he has withdrawn funds from a
retirement account in order to pay those taxes (delinquently) since at least 2005
demonstrates that the individual has been consistently living beyond his means. Id. at 14,
22 – 24. All of these factors are disqualifying under Criterion L. See Adjudicative
Guidelines, Guideline F ¶ 19(c), ¶ 19(e), ¶ 19(g). Even though the individual has entered
into tax payment plans with the federal and state taxing authorities for 2012 and 2013,
those plans do not negate that he still has outstanding tax obligations for those years upon
which he commenced payments only in June 2014. See Ex A; Ex. B; Ex. D.
The concern is whether this pattern of financial irresponsibility will recur. 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. PSH-13-0046 (2013); Personnel Security Hearing, Case No.
PSH-12-0103 (2012); Personnel Security Hearing, Case No. PSH-11-0015 (2011);
7
Personnel Security Hearing, Case No. TSO-1078 (2011); Personnel Security Hearing,
Case No. TSO-1048 (2011); Personnel Security Hearing, Case No. TSO-0878 (2010);
Personnel Security Hearing, Case No. TSO-0746 (2009). As of the date of the hearing,
the individual was still resolving his collections debt (although he subsequently
succeeded in doing so), had made only his initial monthly payments on two years of
delinquent taxes and had increased his tax withholdings only three weeks earlier. Ex. B;
Ex. D: Ex. F; Ex. G; Tr. at 18. While his actions in resolving his collections debt, filing
his taxes and commencing payments on his delinquent taxes demonstrate resolve in
correcting a sustained pattern of financial irresponsibility, the individual has not yet
demonstrated a pattern of financial responsibility. Indeed, as of the date of the hearing,
the individual had not yet resolved certain of the financial irregularities cited in the
Notification Letter. Cf. Adjudicative Guidelines, Guideline F ¶ 20(a) (mitigation possible
if the behavior happened so long ago, was so infrequent or occurred under such
circumstances that it is unlikely to recur).
Based on the foregoing, I find that the individual has not mitigated the security concerns
associated with Criterion L.
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 associated with Criterion L. 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 at this time.
The parties may seek review of this Decision by an Appeal Panel under the regulations
set forth at 10 C.F.R. § 710.28.
Wade M. Boswell
Administrative Judge
Office of Hearings and Appeals
Date: September 10, 2014