PSH-14-0098

United States Department of Energy
Office of Hearings and Appeals
In the Matter of Personnel Security Hearing )
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Filing Date: March 18, 2013 ) Case No.: PSH-14-0098
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Issued: February 26, 2015
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Decision and Order
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Robert B. Palmer, Administrative Judge:
This Decision concerns the eligibility of XXXXXXXXX (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 not be restored at this time. 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 2013 routine
re-investigation of his ex-wife, the local security office (LSO) obtained information about
the individual’s finances that raised security concerns. The LSO conducted an
investigation into his finances, and as a part of that investigation, it summoned the
individual for an interview with a personnel security specialist. After this Personnel
Security Interview (PSI) failed to adequately address these concerns, the LSO determined
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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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 nine exhibits into the record of this proceeding. The individual introduced
three exhibits and testified at the hearing, as did his girlfriend.
II. THE NOTIFICATION LETTER AND THE DOE’S SECURITY CONCERNS
As indicated above, the Notification Letter included a statement of derogatory
information that created a substantial doubt as to the individual’s eligibility to hold a
clearance. This 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) defines as derogatory 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 or circumstances include, but are
not limited to, a pattern of financial irresponsibility. As support for its invocation of this
criterion, the Letter alleges that the individual has $5,538 in delinquent debt, including:
 8 collection accounts totaling $1,525;
 One charged-off account for $993; and
 $3,000 in unpaid federal taxes and $20 in unpaid state taxes.
The Letter also cites statements made by the individual during his May 2014 PSI
indicating that he did not file federal or state income taxes during the years 2009 through
2013.
The individual generally does not dispute these allegations, and they adequately justify
the DOE’s invocation of criterion (l). They also raise significant security concerns.
Failure to file tax returns or 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. Also, an individual who is
financially overextended is at risk of having to engage in illegal acts to generate funds.
See Revised Adjudicative Guidelines for Determining Eligibility for Access to Classified
Information, The White House (December 19, 2005), Guideline F.
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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
A. Mitigating Evidence
At the hearing, the individual attempted to demonstrate, through his testimony and that of
his girlfriend, that his financial difficulties were due largely to his ex-wife’s behavior,
that his tax returns will soon be filed and his delinquent debts paid, and that he is a
reliable person who exercises good judgment and can be trusted to adequately safeguard
classified information.
The individual testified that it was his ex-wife’s responsibility to work with their CPA to
file the tax returns during their marriage, and that he operated on the assumption that she
had done so for the years in question. He stated that, in addition to their employment with
the DOE contractor, he and his wife had a home-based business that occupied most of his
time, and that he wasn’t engaged with what was going on with his taxes. Hearing
transcript (Tr.) at 10. He said that he didn’t find out that she and the CPA had not filed
the tax returns until her five year re-investigation occurred in 2013, and he does not know
why they weren’t filed. Tr. at 13-14. They got divorced in 2014. Tr. at 14.
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The divorce decree, dated June 19, 2014, provides that the individual and his wife are to
file the returns as “married filing jointly,” that the unfiled returns are to be filed by a
second CPA, and that the individual and his wife are to provide the second CPA with all
of the documents necessary to file the returns. Individual’s Exhibit (Ind. Ex.) A. On
January 6, 2015, the second CPA sent an e-mail to the individual in which he stated that
he could no longer act on the individual’s and on his ex-wife’s behalf because he had
taken a position with an employer that did not permit him to perform outside work. Ind.
Ex. B.
The individual testified that the second CPA could not file the returns because he did not
receive certain information from the ex-wife before he quit working for them, and that
therefore the federal and state returns for the years 2009-2013 had not yet been filed. Tr.
at 17. According to the individual, he attempted to do the returns in 2013 when he
discovered that they had not been filed, but was unable to do so because of his ex-wife’s
lack of cooperation. Tr. at 31. The individual further indicated that he did not know what
his federal tax liability was, and that the $3,000 dollar figure set forth in the Notification
Letter was an estimated debt provided by the Internal Revenue Service (IRS) in a letter to
the couple received in 2011. Tr. at 19, 44-45. Nevertheless, the individual testified that he
intends to resolve his tax issues. Tr. at 22. He explained that his ex-wife has provided
some information, and that she was due to provide more on the day after the hearing. Id.
He also indicated that he had taken steps to obtain permission from the court that granted
his divorce to file the returns himself. Tr. at 23. He testified that he intends to have his
taxes filed by the end of the month. Tr. at 32.
The individual then discussed his delinquent debts. Unlike his tax situation, he testified
that he was aware of these debts, and that he had enough money to pay them all off until
approximately two weeks ago. At that time, he explained, their two cars, a used BMW
and a used Infiniti, were going to be repossessed because his ex-wife had failed to make
the payments on her car for three months. Because the two loans were linked, the
individual said that he had to get another loan to pay off the debt on both cars in order to
“save” his vehicle. He currently owes $7,442 on the Infiniti and approximately $17,000
on the BMW. Tr. at 32-33.
Three of the collection accounts mentioned in the Notification Letter are for unpaid
speeding tickets that the individual received while driving on an Indian reservation. The
individual testified that he did not pay the tickets because he was erroneously told by a
tribal court judge that he did not have to pay the tickets and that they would not go on his
credit report. Tr. at 33-34. He has not paid these debts because he “was going to pay
everything in full all at once,” but “that money that I was going to use had to go to get my
cars back . . . .” Tr. at 35. Three other collection accounts were for medical expenses that
his ex-wife incurred and that she was supposed to pay. Id. The two remaining collection
accounts, for unpaid phone bills and insurance, were also debts that his ex-wife was
supposed to pay in part or in full. Id. The individual testified that he had “no idea” what
the charged off account for $993 was for. Tr. at 37.
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Finally, he claimed that he would be able to pay all of his delinquent debts when he
moved in with his girlfriend in “about a month-and-a-half to two months.” Tr. at 36. He
would be able to do so because of the girlfriend’s assistance in paying day-to-day living
costs, and because the individual’s father, who used to work for a collection company,
would be negotiating on the individual’s behalf with his creditors to resolve the
individual’s indebtedness. Id.
The individual’s girlfriend also testified. She confirmed that the two of them were
planning on moving in together, and she described their relationship as being “very
stable.” Tr. at 49, 51. The girlfriend further stated that she believed that the two of them
could pay off the individual’s debts without becoming financially crippled, and that the
individual was a reliable and trustworthy person who exhibited good judgment. Tr. at 52,
54.
B. Administrative Judge’s Determination
As indicated in the testimony described above, the individual’s primary explanation for
his financial predicament is his ex-wife’s failure to satisfy her obligations, and their
subsequent separation and divorce. Although the individual did submit evidence that he
and his ex-wife are divorced, there is no supporting evidence in the record for the
individual’s assertions that his ex-wife was largely or entirely to blame for their failure to
file the tax returns in question or for the delinquent debts set forth in the Notification
Letter. However, even if the individual’s statements in this regard were true, I would
continue to have serious questions about his judgment and reliability. Although the
individual testified that he was not aware that the tax returns for 2009-2013 had not been
filed until his ex-wife’s routine re-investigation in 2013, the record indicates that he was
aware in 2011 of the $3,000 estimated debt owed to the IRS for back taxes. Tr. at 45.
There is no evidence in the record indicating that he inquired of his ex-wife as to the
reason for the debt in 2011, or that he took any actions or made any inquiries whatsoever
as to the status of the debt between 2011 and 2013. If, in fact, the individual was ignorant
of his tax situation until 2013, as he claims, that ignorance appears to have been willful.
Regardless of how the marital duties were apportioned between the individual and his ex-
wife, it was the responsibility of both of them to ensure that their returns were filed
promptly and accurately. The individual’s complete and total abdication of this
responsibility was a demonstration of poor judgment.
The individual has also failed to act responsibly with respect to some of his delinquent
debts. Even if his unsupported testimony that he was told by a tribal court judge that he
did not have to pay his speeding tickets and they would not go on his credit report was
accurate, he became aware of these delinquent debts no later than May 2014. DOE Ex. 9
at 20. Nevertheless, he has apparently made no effort to pay these debts or to contact his
creditor about these debts. He did testify that all of these debts would have been repaid
had he not had to refinance his and his ex-wife’s two vehicles just before the hearing to
keep them from being repossessed. However, this does not explain his failure to address
these debts in the months leading up to that refinancing.
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There is also an unacceptable amount of uncertainty regarding the individual’s plan to
satisfy his debts. That plan is contingent upon the individual moving in with his girlfriend
at some point in the future. Although both testified that they plan to do so, and the
girlfriend testified that their relationship is sound, that could change either before they
begin cohabitating or at any time thereafter. The individual’s current budget shows a
positive cash flow of $20 per month, without making payments on any of his delinquent
debt. Ind. Ex. C. Given the current state of the individual’s finances, I do not believe that
he could satisfy his debts and meet all of his other financial commitments without
substantial assistance from his girlfriend. That assistance will likely never occur should
their relationship change. Significant security concerns remain regarding the individual’s
failure to file income tax returns and regarding his finances.
V. CONCLUSION
For the reasons set forth above, I find that the individual has not adequately addressed the
DOE’s concerns under criterion (l). Consequently, he has failed to convince me 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 not
restore the individual’s security clearance at this time. 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: February 26, 2015