PSH-15-0093

*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: November 10, 2015 )
_________________________________________ ) Case No.: PSH-15-0093
Issued: February 17, 2016
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Administrative Judge Decision
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Steven L. Fine, Administrative Judge:
This Decision concerns the eligibility of XXX X. XXX (hereinafter referred to as “the Individual”)
for access authorization under the Department of Energy’s (DOE) regulations set forth at 10 C.F.R.
Part 710, Subpart A, entitled, “Criteria and Procedures for Determining Eligibility for Access to
Classified Matter or Special Nuclear Material.”1 For the reasons set forth below, after carefully
considering the record before me in light of the relevant regulations and the Adjudicative
Guidelines, I conclude that the Individual’s request for a security clearance should be denied.2
I. BACKGROUND
During an initial background investigation of the Individual, a Local Security Office (LSO)
obtained information that raised security concerns. In order to address those concerns, the LSO
conducted a Personnel Security Interviews (PSI) of the Individual on July 9, 2015. Because the
PSI did not resolve these concerns, the LSO began the present administrative review proceeding
by issuing a Notification Letter to the Individual informing him that he was entitled to a hearing
before an Administrative Judge in order to resolve the substantial doubt regarding his eligibility
for a security clearance. See 10 C.F.R. § 710.21. The Individual requested a hearing and the LSO
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 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.doe.gov/OHA.
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forwarded the Individual’s request to the OHA. The Director of OHA appointed me as the
Administrative Judge in this matter on January 16, 2016.
At the hearing I convened pursuant to 10 C.F.R. § 710.25(e) and (g), I took testimony from the
Individual. See Transcript of Hearing, Case No. PSH-15-0093 (hereinafter cited as “Tr.”). The
LSO submitted nine exhibits, marked as Exhibits 1 through 9. The Individual submitted two
exhibits, marked as Exhibits A and B.
II. THE NOTIFICATION LETTER AND THE ASSOCIATED SECURITY CONCERNS
As indicated above, the Notification Letter informed the Individual that information in the
possession of the DOE created a substantial doubt concerning his eligibility for a security
clearance. That information pertains to paragraph (l)3 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).
To justify its reliance on Criterion L, the LSO alleged that the Internal Revenue Service (IRS) had
filed tax liens against the Individual in 2010 and 2013, totaling $157,873.09, and a state
government had filed a tax lien against him for $15,400.46. In addition, the LSO found that the
Individual failed to file a federal tax return or pay his federal taxes for tax years 1978 through
1992, and 2002, failed to file his state tax returns or pay state taxes for tax years 1989 through
1992, had a tax lien of $42,150.18, placed against him for unpaid federal taxes from tax years
2007, 2008, and 2009, and that the Individual admitted that, during the period starting in 1972 and
continuing until 2004, he had falsely claimed on his tax withholding forms that he was married,
when he was actually single, and claimed ten deductions when he had no actual dependents.
The Individual’s pattern of financial irresponsibility, dishonesty, failure to observe rules and
regulations, as alleged, adequately justifies the LSO’s invocation of Criterion L, and raises
significant security concerns. The Adjudicative Guidelines state in pertinent part:
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. An
individual who is financially overextended is at risk of having to engage in illegal
acts to generate funds . . . . Conditions that could raise a security concern and may
be disqualifying include: (a) inability or unwillingness to satisfy debts; (b) . . . the
absence of any evidence of willingness or intent to pay the debt or establish a
realistic plan to pay the debt; (c) a history of not meeting financial obligations; . . .
3 Criterion L refers to information indicating that the Individual has “engaged 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. Such conduct or circumstances include, but are
not limited to, criminal behavior, a pattern of financial irresponsibility, conflicting allegiances, or violation of any
commitment or promise upon which DOE previously relied to favorably resolve an issue of access authorization
eligibility.” 10 C.F.R. § 710.8(l).
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(d) deceptive or illegal financial practices such as . . . income tax evasion, . . . ; and
(g) failure to file annual Federal, state, or local income tax returns as required or
the fraudulent filing of the same.
Revised Adjudicative Guidelines for Determining Eligibility for Access to Classified Information,
issued on December 29, 2005, (Adjudicative Guidelines) at ¶¶ 18, 19.
The Administrative Guidelines further provide: “Conduct involving questionable judgment, lack
of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions
about an individual's reliability, trustworthiness and ability to protect classified information.”
Adjudicative Guidelines at ¶ 15. Conditions that could raise a security concern and may be
disqualifying also include: “credible adverse information that is not explicitly covered under any
other guideline and may not be sufficient by itself for an adverse determination, but which, when
combined with all available information supports a whole-person assessment of questionable
judgment, untrustworthiness, unreliability, lack of candor, unwillingness to comply with rules and
regulations, or other characteristics indicating that the person may not properly safeguard protected
information.” Adjudicative Guidelines at ¶ 16(d).
The Adjudicative Guidelines are not inflexible rules of law. Instead, recognizing the complexities
of human nature, Administrative Judges apply the guidelines in conjunction with the information
available in the adjudicative process. The Administrative Judge’s overarching adjudicative goal
is a fair, impartial, and commonsense decision.
III. REGULATORY STANDARDS
The Administrative Judge's role in this proceeding is to evaluate the evidence presented by the
agency and the Individual, and to render a decision based on that evidence. See 10 C.F.R.
§ 710.27(a). The regulations state that “[t]he decision as to access authorization is a
comprehensive, common sense judgment, made after consideration of all the relevant information,
favorable and unfavorable, as to whether the granting of access authorization would not endanger
the common defense and security and would be clearly consistent with the national interest.” 10
C.F.R. § 710.7(a). In rendering this opinion, I have considered the following factors: the nature,
extent, and seriousness of the conduct; the circumstances surrounding the conduct, including
knowledgeable participation; the frequency and recency of the conduct; the Individual's age and
maturity at the time of the conduct; the voluntariness of the Individual's 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. See 10 C.F.R. §§ 710.7(c),
710.27(a). The discussion below reflects my application of these factors to the testimony and
exhibits presented by both sides in this case.
IV. FINDINGS OF FACT
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On June 23, 2015, the LSO obtained a credit report for the Individual. Ex 6 at 1. That credit report
revealed that the IRS had filed tax liens against the Individual in 2010 and 2013, totaling
$157,873.09. Ex. 6 at 5-6. The credit report further indicated that these liens had been released in
2011 and 2015. Ex. 6 at 5-6.
On July 9, 2015, the LSO conducted a PSI of the Individual. During this PSI, the Individual
admitted that he did not file federal tax returns or pay his federal taxes for tax years 1978 through
1992, and 2008 through 2013. Ex. 8 at 60, 80-90. The Individual further admitted that he had
falsely claimed on his tax withholding forms that he was married, when he was actually single,
and claimed ten deductions on his tax withholding forms when he had no dependents in order to
“save money” since 1977. Ex. 8 at 72-73. The Individual also repeatedly stated that he did not
pay his taxes because he believes that the tax system is unfair, and asserted that his failure to pay
his taxes was justified. Ex. 8 at 89, 93-94, 112, 127-128. The Individual stated that he did not
start paying his back taxes until “I settled down here, and got married, and then this clearance thing
came up” approximately seven years ago. Ex. 8 at 90, 95. The Individual admitted that he had
engaged in an illegal act: income tax evasion, by failing to file and pay his taxes, and that he was
aware that failing to pay taxes was against the law. Ex. 8 at 98, 112. The Individual reported that
the IRS had taken him to court for nonpayment of taxes in the middle to late 1980s. Ex. 8 at 108.
At a result of these court proceedings, he was placed on supervised probation for a four-year
period, and required to make regular payments to the IRS. Ex. 8 at 109. The Individual reported
that he now claims zero deductions in order to catch up on his tax obligations. Ex. 8 at 114. The
Individual claimed that his 2014 Federal taxes had been filed correctly. Ex. 8 at 96. The Individual
further stated that he intends to pay his taxes in the future. Ex. 8 at 98, 113, 128. The Individual
stated that some of his tax debts had been resolved by the passage of the statute of limitations. Ex.
8 at 106. However, the Individual admitted that his only motivation for resolving his tax issues
was to obtain a security clearance so he could keep his job. Ex. 8 at 143-144.
V. ANALYSIS
The Individual attempted to resolve or mitigate the security concerns about his financial responsibility,
judgment, reliability, and trustworthiness raised by the information set forth in the summary of security
concerns by submitting copies of a letter from the IRS confirming that the Individual had entered into
an installment payment agreement with the IRS (Ex. A), and a bank statement showing that two
payments of $1,000 each had been made from his checking account to the IRS (Ex. B).
In his testimony at the hearing, the Individual admitted that he had failed to pay his federal taxes from
1978 to 1992, and in 2002, which resulted with the IRS placing tax liens totaling $115,722.91 against
him. Tr. at 11. The Individual further admitted that the IRS placed tax liens against him totaling
$42,150 for tax years 2007, 2008, and 2009. Tr. at 12. The Individual stated that he had failed to file
or pay taxes for those years because he “just wanted to keep my money.” Tr. at 12. He further
explained that he had attended meetings of an anti-tax group that had convinced him that the income
tax was unconstitutional, and that “the government is like taking more than they should” while “the
worker is the one that’s paying for everything.” Tr. at 13. The Individual testified that he thought he
would avoid the eventual consequences of his tax evasion because he didn’t expect he would “live this
long.” Tr. at 14. The Individual testified that he “had to go to court” in the late 1980’s and was placed
on probation because of his tax evasion. Tr. at 15. He was required to make regular payments to the
IRS as a condition of his probation, but he stopped making these payments as soon as his probation
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was concluded. Tr. at 15-16. The Individual admitted that he was not filing or paying his federal taxes
even when he was on probation. Tr. at 17.
The Individual testified that he had resolved most of his outstanding debt to the IRS through his
payments and the tolling of some of the debts by the statute of limitations. Tr. at 19-20, 29. The
Individual testified that he had sent his return for tax year 2013 to the IRS, but that the IRS claimed
they had not received it. Tr. at 19. The Individual, however, did not know how much he currently
owes the IRS. Tr. at 21, 37. The Individual stated that he filed his tax return for tax year 2013 in 2015.
Tr. at 21. He further admitted that he didn’t file his return for tax year 2014, when he “should have
filed.” Tr. at 22. The Individual admitted that he claimed ten deductions on his federal tax withholding
forms and claimed he was married for many years when he was single and had no dependents. Tr. at
23. The Individual testified that he stopped claiming ten deductions about four years ago when he was
confronted by his employer. Tr. at 27, 33. The Individual admitted that if his employer had not
confronted him, he would probably still be claiming ten deductions. Tr. at 33. The Individual testified
that he is now working with the IRS to resolve his tax issues, and expected to have them resolved this
year. Tr. at 24, 36. The Individual testified that he entered into a payment plan with the IRS, about
six months ago, in which he has $1000 a month deducted from his checking account. Tr. at 28, 38.
The Individual testified that at one point, the IRS had garnished his wages for nine to ten months. Tr.
at 30.
The Individual has obviously exhibited a profound lack of judgment, lack of trustworthiness,
unwillingness to comply with laws, and unreliability, when he chose to evade his tax
responsibilities for a considerable period of time. This profound lack of judgment and
trustworthiness, and unreliability has been magnified by the Individual’s lack of remorse, his
inability or unwillingness to acknowledge the his previous errors in judgment, and his attempts to
rationalize his actions, that have continued throughout this proceeding and were exhibited in his
hearing testimony. His previous behaviors and failure to acknowledge has past errors in judgment
cast doubt on the Individual's current reliability, trustworthiness, and good judgment. Guideline
F at ¶ 20(a). Accordingly, I find that the Individual has not resolved the security concerns, raised
under Criterion L by his repeated and intentional failure to meet his tax obligations.
For the reasons stated above, I find that the Individual has not provided sufficient mitigation to
resolve the security concerns raised by his outstanding tax debts and evasion of tax
responsibilities.4
VI. CONCLUSION
For the reasons set forth above, I conclude that the LSO properly invoked Criterion L. After
considering all the evidence, both favorable and unfavorable, in a common sense manner, I find
that Individual has not sufficiently mitigated all of the Criterion L security concerns. Accordingly,
the Individual has not demonstrated that granting his request for a security clearance would not
endanger the common defense and would be clearly consistent with the national interest.
Therefore, the Individual should be not granted a security clearance at this time. The Individual
4 The Adjudicative Guidelines set forth a number of conditions that could mitigate security concerns arising from an
individual’s tax evasion. See Adjudicative Guideline F at ¶ 20. However, none of these conditions are present in the
instant case.
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may seek review of this Decision by an Appeal Panel under the procedures set forth at 10 C.F.R.
§ 710.28.
Steven L. Fine
Administrative Judge
Office of Hearings and Appeals
Date: February 17, 2016