PSH-16-0020

*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: March 22, 2016 )
) Case No.: PSH-16-0020
__________________________________________)
Issued: June 30, 2016
__________________________
Administrative Judge Decision
__________________________
Wade M. Boswell, Administrative Judge:
This Decision concerns the eligibility of XXXXXXXXXXXXX (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 and, as a holder of DOE access authorization, he is subject to
periodic security reinvestigations. In conjunction with a security reinvestigation, the
individual completed a Questionnaire for National Security Positions (QNSP) in November
2014, on which his disclosure of adverse financial information was limited to a single
delinquent debt. See Exhibit 9. However, during the security reinvestigation, the Local
Security Office (LSO) received information regarding additional collection and charge-off
debt, delinquent taxes, and a bankruptcy filing. See Exhibit 3. During the pendency of the
security reinvestigation, the individual’s wages were garnished for unpaid state taxes. See
Exhibit 6.
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.
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As a result of this information, the LSO conducted personnel security interviews (PSI) with
the individual in both July 2015 and November 2015. See Exhibits 11 and 12.
The PSIs did not resolve the security concerns arising from the individual’s financial
matters and, on February 11, 2016, 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 two potentially
disqualifying criteria set forth in the security regulations at 10 C.F.R. § 710.8, subsections
(f) and (l) (hereinafter referred to as Criterion F and Criterion L, respectively).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 the testimony of two
witnesses, including that of himself. The LSO introduced 14 numbered exhibits into the
record; the individual tendered one lettered exhibit (Exhibit A). 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).
2 See Section III below.
3 OHA decisions are available on the OHA website at www.energy.gov/oha/office-hearings-and-appeals. A
decision may be accessed by entering the case number in the search engine at www.energy.gov/oha/security-
cases.
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An individual must come forward with evidence to convince the DOE that granting or
restoring his or her 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 or her
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.
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 two criteria as the bases for suspending the individual’s
security clearance: Criterion F and Criterion L. Criterion F refers to information that a
person has “deliberately misrepresented, falsified, or omitted significant information from
a Personnel Security Questionnaire, a Questionnaire for Sensitive National Security
Positions, a personnel qualifications statements, a personnel security interview, written or
oral statements made in response to official inquiry on a matter that is relevant to a
determination regarding eligibility for DOE access authorization or [Part 710
administrative review] proceedings….” 10 C.F.R. § 710.8(f). 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. Any failure to provide truthful and candid answers
during the security clearance process is of particular concern. See Guideline E 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). With respect to Criterion F,
the LSO alleges (1) omissions by the individual on the QNSP of adverse financial
information that was required to be disclosed and (2) failure by the individual to disclose
that his wages had been garnished for delinquent state taxes during a security interview
with the U.S. Office of Personnel Management (OPM). Ex. 1 at 3-4.
Criterion L concerns information that an individual has engaged in conduct “which tends
to show that the individual is not honest, reliable, or trustworthy….” 10 C.F.R. § 710.8(l).
As noted in the preceding paragraph, conduct reflecting questionable judgment, lack of
candor, dishonesty, or unwillingness to comply with rules and regulations raises questions
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about an “individual’s reliability, trustworthiness and ability to protect classified
information.” Adjudicative Guidelines at Guidelines E and F. With respect to Criterion L,
the LSO alleges, inter alia, that the individual: (1) has six collection accounts, two charge-
off accounts, and two delinquent accounts, aggregating $9,650; (2) acknowledged being
five months delinquent on his mortgage; (3) admitted his wages had been garnished by
state tax authorities and has had other tax delinquencies; and (4) had twice filed for
bankruptcy protection. Ex. 1 at 4-6.
In light of the information available to the LSO, the LSO properly invoked Criterion F and
Criterion L.
IV. Findings of Fact and 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)4 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.
As a preliminary matter, I note that the individual’s testimony endorsed the accuracy of
most of the facts set forth in the Notification Letter. In those instances where the individual
contested matters set forth in the Notification Letter, I have carefully considered the totality
of the individual’s testimony, the entirety of the written record, and the arguments
presented by both the individual and the LSO in my evaluation and in reaching the findings
of fact set forth below.
A. Administrative Judge Evaluation of the Evidence and Findings of Fact:
Criterion F Security Concerns
Security concerns arise under Criterion F when an individual deliberately omits significant
information from a QNSP or during an interview which is part of the access authorization
eligibility process. See 10 C.F.R. § 710.8(f). With respect to the individual, the LSO alleges
five occurrences5 under Criterion F, one relating to the individual’s failure to disclose the
4 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.
5 The Notification Letter contains six basis statements with respect to Criterion F; however, two of them
relate to the individual’s failure to disclose his filing of a petition for Chapter 13 bankruptcy in October 2008.
See Ex. 1 at 3.
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state tax garnishment of his wages during the security interview with an OPM investigator
and the remaining relating to the individual’s failure to disclose required adverse financial
information on his QNSP. Ex. 1 at 3-4. Failure to fulfill legal and financial obligations
raises legitimate questions about a person’s willingness and ability to comply with rules
and procedures and raises questions about a person’s reliability, trustworthiness and ability
to protect classified information. As such, this information is significant in granting or
continuing an individual’s access authorization.
Garnishment and State Tax Matters. The individual certified on his QNSP in November
2014 that in the prior seven years he had not failed to file or pay his federal or state taxes
as required by law. At the time of this certification, he had filed his required state tax returns
without fully paying his state tax obligations for 2010, 2011 and 2012; however, he had
negotiated a payment plan with his state tax authorities to pay those taxes and his payments
were current under that payment plan. Tr. at 26-28, 30. He testified at the hearing that he
had believed that, since he was current on his tax payment plan, he was current on his state
taxes and had paid his required taxes. Id. at 30-33. While I find that his conclusion with
respect to the disclosure required on his QNSP is incorrect, I found his testimony credible
as to his understanding of the question and, for this reason, I find that his omission was not
deliberate.
Subsequent to his certification of the QNSP, the individual became delinquent on his state
tax payment plan and his wages were garnished in March 2015. Ex. 6 at 3-4. The individual
did not report this garnishment to the OPM investigator during a security interview that
was conducted three months later. The individual agrees that he did not discuss this
information with the investigator; however, he testified that he was not asked any questions
during the interview that related to the garnishment. Tr. at 19-21. Although the LSO refers
to the OPM investigation during the PSI and in the Notification Letter, no report of
investigation was submitted into the record of the case. The LSO did, however, submit into
the record an incident report describing the garnishment of the individual’s wages which
states that the individual self-reported the garnishment. See Ex. 6 at 2. In light of the
individual self-reporting the garnishment approximately two months prior to his interview
with the OPM investigator, the individual did not attempt to withhold this information from
the DOE and, therefore, I conclude that his failure to discuss it during the security interview
with OPM was not a deliberate attempt to mislead the DOE on this matter.
Based on the foregoing, I find that the individual has sufficiently resolved the Criterion F
security concerns with respect to his state tax matters.
Charge-Off Accounts. The LSO alleges that the individual improperly omitted two charge-
off accounts in his response to a question on the QNSP which specifically asked whether
he had had any accounts that had been charged off within the prior seven years. Ex. 1 at 4.
The individual acknowledges the two debts referenced in the Notification Letter; however,
he testified that they had been discharged in Chapter 7 bankruptcy proceedings in 2005.
Tr. at 37-38, 40-45. The credit report relied upon by the LSO to evidence these accounts
states that each of those debts were “bankruptcy dismissed.” Ex. 4 at 3. A discharge of a
debt in bankruptcy liquidates the debt and, therefore, the individual’s liability for these
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debts was extinguished in 2005.6 Since these debts were discharged in bankruptcy nine
years prior to the individual’s certification of his QNSP, they were not required to be
disclosed by the question cited by the LSO and, therefore, no Criterion F security concern
arises from such omission.
Chapter 13 Bankruptcy Petition. The LSO alleges that the individual improperly omitted a
Chapter 13 bankruptcy filing in his response to a question on the QNSP which specifically
asked whether he had filed a petition under any chapter of the bankruptcy code in the prior
seven years. The individual acknowledges that he had filed a petition under Chapter 13 in
2008, approximately six years prior to his certification of his QNSP. Tr. at 22-23. The
individual testified that the Chapter 13 bankruptcy petition was prompted by increases in
his home mortgage payments (caused by escalation of interest rates); however, when the
bankruptcy court calculated the payment plan for restructuring his debt, he realized that he
could not afford the required payments and discontinued the bankruptcy petition. Id. He
testified that he believed that, since he had voluntarily discontinued the bankruptcy
proceeding, the bankruptcy petition did not need to be disclosed on the QNSP. Id. at 23,
25-26. While I find that the individual’s conclusion with respect to the disclosure required
on his QNSP is incorrect, I found his testimony credible as to his understanding of the
question. The individual’s Chapter 13 bankruptcy petition had also been discussed during
a PSI conducted in 2010. Ex. 1 at 3; Ex. 13 at 6-9, 71; Tr. at 24-25. Since this was
information had been previously discussed with the LSO, it reinforces the individual’s
contention that he was not trying to deliberately withhold adverse financial information
from the DOE. For these reasons, I conclude that the individual did not deliberately omit
his Chapter 13 bankruptcy petition when he certified his QNSP and, therefore, that the
individual has sufficiently resolved Criterion F security concerns arising from such
omission.
Collection Accounts. On the QNSP, the individual disclosed one account in response to a
question as to whether he had had any bills or debts turned over to a collection agency
within the prior seven years and certified that he had no other such accounts. Ex. 9 at 38-
40, 42. The LSO alleges that the individual improperly omitted five other collection
accounts from his QNSP. Ex. 1 at 5-6. At the time that he completed his QNSP, the
individual testified that: he did not have all of his financial information available to him;
his employer had changed its procedure for employees who were completing their security
questionnaires and required that the questionnaires be completed using computers in a
common area; employees were given a minimal amount of time to complete the
questionnaires; and employees were no longer given the questionnaires to complete in a
way that allowed them to research their answers to the questions. Tr. at 33-34, 39-40.
Additionally, the individual had moved and he didn’t have access to all of his records. Id.
at 25, 40. Notwithstanding the foregoing, the individual testified that when he completed
the QNSP with respect to the existence of collection accounts, he was aware that he had
collection accounts responsive to the question which he did not list (because he lacked
6 At the hearing, DOE counsel concurred that no current liability exists with respect to the two accounts
discharged as a result of the individual’s 2005 bankruptcy proceedings and that this discharge occurred more
than seven years prior to the individual’s certification of his QNSP. Id. at 58-60.
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access to the relevant information with respect to the names of creditors and the amounts)
and he independently decided to limit his QNSP response to the one account that he could
remember; it was his intention to discuss the other collection accounts when he had his
security interview. Id. at 34, 36. While I am sympathetic to the context in which the
individual completed his QNSP and his expressed intent to subsequently supplement his
QNSP response, at the hearing he acknowledged that he was aware of additional
information that was required to be disclosed on the QNSP and, notwithstanding, made the
decision to certify the QNSP containing inaccurate information. As noted above, adverse
financial information about an individual can be significant information with respect to a
person’s eligibility to hold access authorization and, here, the individual knowingly omitted
information from a QNSP that he certified as true, complete and correct. Ex. 9 at 42. See
10 C.F.R. § 710.8(f).
Based on the foregoing, I find that the individual has not resolved the Criterion F security
concerns arising from the omission of collection accounts from his QNSP.
B. Administrative Judge Evaluation of Evidence and Findings of Fact:
Criterion L Security Concerns
The individual has had financial problems for many years. As discussed above, he filed for
bankruptcy protection under Chapter 7 in 2005 and under Chapter 13 in 2008. In addition
to the two PSIs which were conducted with the individual in 2015 on his finances, the LSO
conducted PSIs with the individual in 2006 and 2010 which focused on financial matters.
See Exhibits 13 and 14. In the Notification Letter, the LSO alleged that the individual had
ten outstanding delinquent accounts and had demonstrated financial irresponsibility in
other matters. Ex. 1 at 4-5.
Outstanding Delinquent Financial Accounts. The Notification Letter alleges that the
individual has outstanding six collection accounts (aggregating $1,767), two charge-off
accounts (aggregating $7,124), and two accounts delinquent for 30 days (aggregating
$759).
The two charge-off accounts aggregate $7,124 and represent the greatest portion of alleged
outstanding delinquent debt. These accounts were discharged as a result of the individual’s
Chapter 7 bankruptcy proceedings in 2005 and, therefore, are not outstanding. Ex. 4 at 3;
Tr. at 55-56, 58. The individual has no legal liability with respect to these accounts and any
Criterion L security concerns based upon these accounts being outstanding is resolved.7
7 As a separate basis for the Criterion L security concerns, the LSO alleged that the individual was financially
irresponsible because he failed to contact one of these lenders and pay the debt after promising to do so during
a PSI in 2010. Ex. 1 at 5. However, during the PSIs, the individual had explained to the personnel security
specialist that the debt had been discharged through bankruptcy and the personnel security specialist would
not acknowledge the sufficiency of a bankruptcy court decree. Ex. 11; Ex. 13; Tr. at 82. No Criterion L
security concern arises from those circumstances. At the hearing, DOE counsel concurred that no current
liability exists with respect to the two accounts discharged as a result of the individual’s 2005 bankruptcy
proceedings. Id. at 58-60.
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The individual testified that the two 30-day delinquent accounts are presently current.
According to the individual, the delinquencies resulted when he was unable to work due to
an automobile accident and that he had credit disability insurance that covered payments
on those accounts during his disability. Id. at 56-57. I left the record open for eight days
following the hearing so that the individual could submit corroborating documentation with
respect to this credit disability insurance and/or the current status of these accounts; no
information was submitted. Id. at 57, 61, 93-96. Based upon the record, the individual has
not resolved the Criterion L security concerns arising from these delinquencies.
With respect to the collection accounts, the individual testified that these accounts
continued to be outstanding. Id. at 46, 50. Although he questioned the validity of two of
these accounts, he presented no evidence of any efforts to resolve any disputes with those
two creditors. Id. at 53-55. The individual disclosed only one collection account on his
QNSP and, on his QNSP, he represented that that account would be paid in full by the
following month; however, as of the hearing 18 months later, the account continued to be
unresolved. Ex. 9 at 39; Tr. at 46, 50. While the individual testified that family health and
emergencies resulted in his financial problems, he presented no evidence to substantiate
that these delinquencies were caused by those circumstances or that he had acted
financially responsibly under the circumstances. Id. at 47-50, 52. Cf. Adjudicative
Guidelines at Guideline F, ¶ 20(b). Based on the foregoing, the individual has not resolved
the Criterion L security concerns arising from his collection accounts.
Mortgage Delinquency. During the PSI, the individual stated that the mortgage on his home
was five months delinquent. At the hearing, the individual testified that he and his mortgage
lender had entered into a court supervised agreement, pursuant to which he was making
“catch-up” payments through the end of 2016, that he was current on those payments, and
that his arrears would be resolved by the end of 2016. Tr. at 62-63, 65. I left the record
open for eight days following the hearing so that the individual could submit corroborating
documentation with respect to the agreement with his mortgage lender and the current
status of the account; no information was submitted. Id. at 67-68, 93-96.
Tax Debt. The individual’s wages were garnished by state tax authorities after he defaulted
on a payment plan respecting his 2010, 2011 and 2012 state taxes.8 As a result of the
garnishment, those taxes have now been satisfied. Id. at 69-70. The individual testified that
those state tax delinquencies resulted from his wife’s gambling income that had not been
declared. Id. at 26-28. Such gambling income was also not declared in their federal income
taxes and, as of the hearing, the individual appears not to have filed amended federal tax
returns for the relevant years and was anticipating entering into a tax payment plan with
the federal tax authorities. Id. at 28-30, 89-92. Here, the individual has not only outstanding
federal tax debt, but has not commenced payment on such debt. Id. The individual
acknowledged during his testimony that he was aware that his wife had had gambling
income that was not being declared at the time the income tax returns were initially filed
and that he was aware of the requirement to declare that income. Id. at 27, 91-92. Filing of
8 In addition to the tax issues with respect to unreported gambling income for 2010-2012, the individual
previously had delinquent federal and state tax debt for 2008, aggregating nearly $9,000. Tr. at 78.
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tax returns under these circumstances constitutes a knowing violation of the tax laws and
creates further concerns with respect to the individual’s honesty, reliability, and
trustworthiness. See 10 C.F.R. § 710.8(l).
Current Financial Situation. The individual disputed the LSO’s contention that he is not
currently living within his means. Tr. at 78. I left the record open for eight days following
the hearing so that the individual could submit a current financial plan or budget detailing
his current income and expenses; no information was submitted. Id. at 74-78, 93-96.
Financial Irresponsibility. The individual filed bankruptcy petitions in 2005 and 2008;
however, he continues to have outstanding delinquent debt, including at least six collection
accounts. While the individual cited medical emergencies and health issues for himself and
family members, as well as other family circumstances, these do not explain the
individual’s long history of financial delinquencies, nor were these situations correlated to
the individual’s current financial defaults. The individual’s testimony also displayed a lack
of understanding of his financial matters and his explanations for specific financial
problems shifted during his testimony. See Id. 66, 71, 80-82. The foregoing evidences a
clear pattern of financial irresponsibility by the individual.
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-11-0015 (2011); 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). Here, the individual has not rectified his financial difficulties
so any period of reformation has not begun to run. See Personnel Security Hearing, Case
No. PSH-12-0075 (2012).
The individual resolved delinquent tax debt to his state government for 2008, 2010, 2011,
and 2012 and to the federal government in 2008; however, he continues to have
unquantified federal tax debt for at least 2010, 2011, and 2012. The tax debt for the three
more recent years resulted from failure to declare his wife’s gambling income, which the
individual was aware was not being declared when the tax returns were filed. This
evidences not only financial irresponsibility but knowing disregard of tax laws and
regulations. The disregard of laws, rules and regulations raises grave concerns with respect
to a person’s ability and willingness to comply with security rules and regulations and to
protect classified information. See Adjudicative Guidelines at Guideline E, ¶ 15. This is
recent conduct, for which no mitigation has been offered.
Based on the foregoing, I find that the individual has not resolved the security concerns
associated with Criterion L arising from his delinquent and collection accounts, his tax
matters, and his pattern of financial irresponsibility.
V. Conclusion
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In the above analysis, I have found that the individual has sufficiently resolved certain of
the matters alleged with respect to Criterion F and Criterion L. Notwithstanding the
foregoing, other derogatory information in the possession of the DOE raises serious
security concerns under Criterion F and 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 resolve all of the
security concerns associated with Criterion F and Criterion L. 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: June 30, 2016