PSH-16-0084

*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 XXXXX X’s.
United States Department of Energy
Office of Hearings and Appeals
In the Matter of Personnel Security Hearing )
)
Filing Date: November 3, 2016 ) Case No.: PSH-16-0084
)
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Issued: January 13, 2017
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Administrative Judge Decision
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William M. Schwartz, Administrative Judge:
This Decision concerns the eligibility of XXXXXXX XXXXXXX XXXXXX (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 discussed below, after carefully considering the record before me in light
of the relevant regulations and 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), I have
determined that the individual’s access authorization should be restored.
I. Background
The individual works for a DOE contractor in a position that requires that he hold a DOE
security clearance. A hospitalization in 2012 left him with a significant number of debts that
remained unpaid as recently as July 2016. Although he had committed to contacting and paying
his creditors during an interview in April 2013, he admitted during another interview conducted
in July 2016 that he had not done so, despite having sufficient resources to pay at least some of
the debts.
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 October 3, 2016, the local security office (LSO) sent a letter (Notification Letter) to the
individual advising him that it had reliable information concerning his inability or unwillingness
to satisfy debts that created a substantial doubt regarding his eligibility to hold a security
clearance. In the 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(l) (hereinafter referred to as Criterion L).2
Upon receipt of the Notification Letter, the individual exercised his right under the Part 710
regulations to request an administrative review hearing, and I was appointed the Administrative
Judge in the case. At the hearing, the individual presented the testimony of one witness, his
wife, and he testified on his own behalf. There were no witnesses for the LSO, but it submitted
eight numbered exhibits into the record. The individual submitted one exhibit, which I labeled
as Exhibit A. The exhibits will be cited in this Decision as “Ex.” followed by the appropriate
numeric or letter designation. The hearing transcript in the case will be cited as “Tr.” followed
by the relevant page number.
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 at the hearing with evidence to convince the DOE that
granting or continuing 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). Hence, an individual is afforded the utmost latitude in
the presentation of evidence to mitigate the security concerns at issue.
2 Criterion L concerns information that indicates 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, . . . a pattern of financial irresponsibility ….” 10 C.F.R. § 710.8(l).
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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 Criterion L as the basis for administrative review of the
individual’s eligibility for security clearance. 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 may raise questions about an
individual’s reliability, trustworthiness, and ability to protect classified information.
Adjudicative Guidelines at Guideline F, ¶ 18.
The LSO’s security concerns under Criterion L arose when it obtained information that the
individual had outstanding debts dating back to 2012. The LSO also learned that, during an
Office of Personnel Management interview conducted in April 2013, he had provided assurance
that he would contact his creditors to arrange to pay those debts. As of July 2016, when he
participated in a DOE Personnel Security Interview (PSI), however, he had neither contacted the
creditors nor paid any of the debts. Moreover, the LSO asserts that at the PSI, the individual
estimated that he had $1000 a month available to repay those debts but had failed to do so.
Ex. 1.
I find that there is ample information in the Notification Letter to support the LSO’s reliance on
Criterion L. The individual incurred debts for medical services during a long hospitalization and
recovery period in 2012 and, as of the date of the Notification Letter, had not repaid his creditors.
His failure to satisfy his old debts after committing to do so and while apparently having funds
available to at least reduce the size of his debt demonstrates that he has been financially
irresponsible. This behavior clearly raises questions about his self-control, lack of judgment, and
possibly his willingness to follow rules and regulations, which in turn could affect his ability to
protect classified information.
IV. Findings of Fact
The individual started working at the DOE facility in April 2012. Ex. 8 at 29. Earlier that year,
he was hospitalized for 42 days. After he left the hospital, he received a bill for about $800,000.
Although unemployed at the time of his hospitalization, he was covered by health insurance
provided by his union. When he was interviewed in April 2013, he believed that he was
personally responsible for his 20% copayment, or $160,000. He later learned that his insurance
would pay 100% of all costs above $15,000, which greatly reduced his liability. Tr. at 9-12.
Two months later, however, he was laid off, and remained in that status for all but four of the
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next 18 months. His wife was laid off as well, in August 2013, and has not returned to the work
force due to disability. Id. at 14, 17-18; Ex. A. The individual acknowledges that, at the
April 2013 interview, he committed to contacting the medical service providers to whom he
owed money and paying those bills. He explained at the hearing, however, that once he and his
wife were both laid off, he felt it was pointless to contact his creditors as he then had no way to
offer even partial payments to them. In addition, his wife had applied for Social Security
Disability (SSD) benefits, retroactive to 2013, and they intended to pay the medical bills when
she received a lump-sum payment for the retroactive period. Tr. at 29-30, 33, 36. Although they
were repeatedly assured that that payment was soon to arrive, it has never arrived. Id. at 13, 18,
20.
Despite the long periods of unemployment, the individual and his wife have kept abreast of their
living expenses, falling behind only in their inability to pay the outstanding medical bills that
arose during his hospitalization, along with some accumulated credit card debt. Id. at 13.
Starting in January 2015, the individual returned to work from his layoff and has been employed
steadily since that time. Ex. A. At his July 2016 PSI, the interviewer questioned the individual
about his income and expenses and calculated that he had roughly $1000 per month of income
available to pay off his medical debts but had not yet taken any steps to do so. Ex. 8 at 34. The
individual stated that his wife handled their finances, that he was unsure of his estimates of their
expenses, and that he did not believe they in fact had $1000 per month of disposable income. Id.
at 30, 32-34. In October 2016, when requesting this hearing, the individual submitted an
income-and-expenses statement that he compiled with his wife that indicated that their available
surplus was in fact $287 per month, not $1000. Ex. 2; Tr. at 15, 20, 24.
About two weeks before the PSI, the individual and his wife learned that her disability claim had
been denied. At that time, they decided that, despite reassurances from their lawyer, they could
no longer rely on the eventual receipt of a lump sum disability payment to resolve the
outstanding medical and credit card debts. They filed an application to refinance their home. Tr.
at 18-20; Ex. 8 at 44 (application pending). The application was approved, and the individual
used a portion of the proceeds to repay all the outstanding medical and credit card debts. The
LSO has stipulated that the copies of the payment checks that the individual provided in
Exhibit 2 constitute satisfactory evidence of the payment of those debts. Tr. at 6, 8. An
additional benefit of the refinancing is that the individual’s monthly mortgage payment was
reduced by roughly $100 per month. Id. at 13-14, 21-22. The individual’s wife testified that,
since the refinancing, their available surplus monthly income has increased from the $287
calculated in their income-and expenses statement, because their mortgage payment is now lower
and because they no longer need to make monthly payments on their credit card balances. Id.
at 21.
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) and the Adjudicative Guidelines. After due
deliberation, I have determined that the individual’s DOE security clearance should be restored.
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I 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 an initial observation, I note that the record contains no evidence of the individual living
extravagantly at any time, either during periods of unemployment or now, when his work and
income are steady. His debts arose from a hospitalization followed by protracted periods of
unemployment, during which he and his wife managed to meet their monthly expenses, with
some accumulation of credit card debt, but were unable to attend to the medical debts.
I find that the individual’s financial difficulties occurred under circumstances that are unlikely to
recur and do not cast doubt on the individual’s current reliability, trustworthiness, or good
judgment. Adjudicative Guidelines at Guideline F, ¶ 20(a). Their underlying causes were the
individual’s hospitalization and layoffs, both situations that lay beyond his control. Id. at
¶ 20(b). The individual testified that they have always made ends meet when at least one of
them has had work. Tr. at 36. The record supports that assertion. He and his wife live frugally,
have no outstanding debts other than their mortgage, and have locked away their credit cards, to
be used only in an emergency. Id. at 25-27. When faced with the reality that a favorable ruling
on the wife’s disability claim is not imminent and may never occur, they employed sound
judgment when they resolved their financial issues by refinancing. The individual also testified
that the likelihood of future layoffs at his work location is relatively low due to the long-range
nature of its funding. Id. at 22. These are clear indications that the individual’s financial
difficulties are being resolved and are under control. Id. at ¶ 20(c). Finally, the individual has
engaged in good-faith efforts to repay overdue creditors, and has done so. Id. at ¶ 20(d). I find
that he has taken responsibility for his past debts and taken steps to prevent accumulation of debt
in the future.
I also find that the individual has addressed LSO’s remaining concerns about his inability or
unwillingness to pay debts. In response to its contention that he failed to contact creditors and
arrange to pay them as he had stated in his April 2013 interview, he explained at the hearing that
both he and wife were laid off soon after that interview, had no money to pay creditors, and
believed the debts would be resolved as soon as they received a lump sum disability payment,
which they were assured would come soon. Under these circumstances, the individual’s
inaction, while not demonstrating the best judgment, is understandable. More important, once he
realized that the anticipated lump sum distribution was not forthcoming, he and his wife took
steps to pay the outstanding debts, by refinancing. Similarly, the individual testified at the
hearing concerning his failure to pay creditors despite a steady income flow starting in January
2015 and an available monthly surplus of $1000 per month. First, he described how they
recalculated their available surplus more accurately to be $287 per month prior to refinancing.
Moreover, as stated above, they had been assured that a lump sum payment would arrive “soon”;
when it finally became clear it was not likely to materialize in the near future, they took charge
of the matter themselves and refinanced their home, which enabled them to resolve all
outstanding debts. Again, I find that his initial action is understandable under these
circumstances, and is overshadowed by the proactive steps he took to meet his financial
obligations. I therefore find that the individual’s behavior, and the record’s reflection of the
individual’s whole person, adequately resolve this concern under Criterion L.
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VI. Conclusion
Upon consideration of the entire record in this case, I find that there was evidence that raised
doubts regarding the individual’s eligibility for a security clearance under Criterion L of the Part
710 regulations. I also find that the individual has presented sufficient information to fully
resolve those concerns. Therefore, I conclude that restoring the individual’s DOE 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). Accordingly, I find that the DOE should restore the
individual’s DOE access authorization.
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: January 13, 2017