PSH-20-0028

*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: January 16, 2020 ) Case No.: PSH-20-0028
)
__________________________________________)
Issued: August 26, 2020
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Administrative Judge Decision
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Katie Quintana, Administrative Judge:
This Decision concerns the eligibility of XXXXX (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 National
Security Adjudicative Guidelines for Determining Eligibility for Access to Classified Information
or Eligibility to Hold a Sensitive Position (June 8, 2017) (Adjudicative Guidelines), I conclude that
the Individual’s access authorization should not be granted.
I. Background
The Individual is employed by a DOE contractor in a position that requires him to hold a security
clearance. As part of the investigation for his security clearance, the Individual completed a
Questionnaire for National Security Positions (QNSP) in October 2017. Ex 7. In response to the
financial questions, the Individual indicated that he had failed to file or pay his Federal and state
taxes for the 2012-2016 tax years. Id. at 52-53. Subsequently, the Local Security Office (LSO)
asked him to complete a Letter of Interrogatory (LOI). See Ex. 1. Due to unresolved security
concerns, the LSO informed the Individual, in a Notification Letter dated April 30, 2019
(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 raised security concerns under Guideline F (Financial
Considerations). Ex. 1.
Upon receipt of the Notification Letter, the Individual exercised his right under the Part 710
regulations by requesting an administrative review hearing. Ex. 2. The Director of the Office of
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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Hearings and Appeals (OHA) appointed me the Administrative Judge in the case, and I
subsequently conducted an administrative hearing in the matter. At the hearing, the DOE Counsel
submitted eight numbered exhibits (Exhibits 1–8) into the record. The Individual tendered 22
exhibits (Exhibits A–V) and testified on his own behalf. The exhibits will be cited in this Decision
as “Ex.” followed by the appropriate alphabetical or numeric designation. The hearing transcript in
the case will be cited as “Tr.” followed by the relevant page number.
II. Regulatory Standard
A DOE administrative review proceeding under Part 710 requires me, as the Administrative Judge,
to issue a Decision that reflects my comprehensive, common-sense judgment, made after
consideration of all of 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). 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 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). 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.
III. Notification Letter and Associated Concerns
As previously mentioned, the Notification Letter included a statement of derogatory information
that raised concerns about the Individual’s eligibility for access authorization. The information in
the letter specifically cited Guideline F of the Adjudicative Guidelines. Guideline F addresses one’s
“[f]ailure to live within one's means, satisfy debts, and meet financial obligations.” Guideline F
at ¶ 18. It is well established that 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. Id. Among the conditions set forth in
this guideline that could raise a disqualifying security concern are the inability to satisfy debts and
an unwillingness to satisfy debts regardless of the ability to do so. Guideline F at ¶ 19(a), (b).
Additionally, the failure to file Federal or state income tax returns, or the failure to pay Federal or
state income tax returns, may also serve as disqualifying conditions. Id. at ¶ 19(f).
In citing Guideline F, the LSO relied upon the Individual’s admissions in the QNSP and the LOI
that he had not filed: (1) his personal state taxes for the 2012 tax year, (2) his personal Federal or
state taxes for the 2013-2016 tax years; and (3) his Federal or state business income taxes for the
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2013-2017 tax years. Ex. 1. The LSO further alleged that the Individual owed approximately
$25,000 to the Internal Revenue Service (IRS), resulting from his business income taxes for the
2012 tax year, and that he had taken no action to make arrangements to pay the debt. Id. Lastly, the
LSO asserted that the Individual had three outstanding collections accounts totaling approximately
$1,200. Id.
IV. Findings of Fact
I have carefully considered the totality of the record in reaching the findings of fact set forth below.
At the hearing, the Individual testified on his own behalf and presented the testimony of his father.
A. Taxes
The Individual testified that, in 2012, he started his own business and was fully aware of his
obligation to file taxes. Tr. at 36. Contrary to the allegations in the Summary of Security Concerns,
the Individual explained that he filed his taxes for the 2012 tax year in 2013. Id. at 39; Ex. S.
However, he noted that, after filing, he owed both Federal and state income tax. Tr. at 39. Although
he established a payment plan with the state and paid off that tax obligation, he did not make any
payments toward the approximately $8,000 he owed in Federal taxes. Id. at 39- 40. The Individual
estimated that, as a result of this unpaid tax bill, he currently owes approximately $28,000,
attributing $23,000 to penalties and interest.2 Id. at 39-40. The Individual explained that although
he did receive notices from the IRS, he did not have a “good reason” for failing to pay the 2012
taxes. Id. at 41.
In the subsequent tax years, 2013-2016, the Individual testified that he failed to file his taxes
because he “just thought [he] had time,” and it was something that could wait.3 Id. at 42-44. He
indicated that he did not attempt to find help with his taxes because he was “just too busy.” Id. at
43. In spite of making a profit of $467,602 in 2015, the Individual stated that he decided not to file
his taxes due to his expenses. Id. at 44. He noted that he was focused on “trying to make money,”
and he felt that he could “deal with [taxes] later.” Id. at 46.
In 2017, after the Individual began working for his current employer, he decided that he needed to
reach out for help with his taxes because many of his coworkers were encouraging him resolve any
personal issues prior to applying for a security clearance. Id. 47, 54. The Individual stated that he
located a tax company to resolve his tax problems; however, he felt that the company’s services
were too expensive, and he decided, instead, to begin saving his money. Id. at 47. The Individual
noted that he subsequently completed his QNSP in October 2017. Id. at 54.
In November 2019, after becoming aware that the DOE had concerns with regard to his tax
situation, the Individual contacted a second tax resolution company. Id. at 48. Four days prior to
the hearing on this matter, the Individual retained the company’s services. Ex. N. The Individual
2 These are the figures as represented by the Individual.
3
The Individual testified that, although the LSO alleged that he admitted that he had not filed his Federal or state
business tax for the 2017 tax year, he terminated his business operations in 2016 and did not have any business income
during the 2017 tax year. Tr. at 24-26.
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testified that all of his outstanding tax returns, both Federal and state, had been filed, and he was
working with the tax resolution company to establish a “temporary payment program” with the
IRS. Tr. at 14, 33; Ex A-M, S. The Individual clarified that the “temporary payment plan” would
consist of a voluntary submission of monthly payments, in the amount of $100-$200, to the IRS,
in the hopes that those payments would help him in negotiating with the IRS. Tr. at 33-34, 58. He
indicated that he hoped that he could negotiate the tax balance with the IRS to a “considerably
lower” amount. Id. at 70. The Individual testified that, at the time of the hearing, his outstanding
Federal tax debt was approximately $180,000. Id. at 55. With regard to his outstanding state tax
debt, the Individual stated that he knew he owed money for outstanding state taxes, and although
he was unsure as to the exact amount owed, he knew it was at least $21,000. Id. at 56-57.
B. Collection Accounts
With regard to the three outstanding collections account, totaling approximately $1,200, the
Individual testified that all three accounts had been paid in full. Tr. at 31-33. The Individual
additionally submitted communications from each of the creditors showing that the accounts did
not have a balance. Ex. P-R. The Individual clarified that he believes that notices from these
creditors were lost in the mail when he moved; however, upon seeing them listed in the Summary
of Security Concerns, he “took care of them right away.” Tr. at 62. The Individual additionally
explained that he is taking action to “build up” his credit by opening credit cards and then quickly
paying off the debt. Id. at 61.
V. Analysis
I have thoroughly considered the record of this proceeding, including the submissions tendered in
this case and the testimony 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 has not sufficiently mitigated the security concerns, noted by the LSO, with
regard to Guideline F. I cannot find that granting 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). Therefore, I have determined that the Individual’s security clearance should
not be granted. The specific findings that I make in support of this decision are discussed below.
As discussed above, failure to satisfy debts and meet financial obligations can raise security
concerns with regard to an individual’s trustworthiness and reliability. Guideline F at ¶ 18. An
individual may be able to mitigate the security concerns by demonstrating that the behavior
happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely
to recur and does not cast doubt on the individual’s current reliability, trustworthiness, or good
judgment. Id. at ¶ 20(a). Additionally, an individual may be able to mitigate the security concerns
if he has resolved his debts, is receiving financial counseling, or has made arrangements with the
appropriate tax authorities to file or pay the taxes and is in compliance with that arrangement. See
id. at ¶ 20 (c) (d), (g).
Here, the Individual has begun to take steps to mitigate the security concerns related to his financial
situation. He has resolved all three of his outstanding collection accounts; he is working on
establishing and improving his credit; he has filed all of his overdue tax returns, and has hired a tax
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resolution service to help him resolve his tax debt. It also appears that he has hired a financial
counselor to establish a budget for him.4 The Individual believes that he is “showing persistence
[and] a pattern of taking care of things.” Tr. at 66. The actions taken by the Individual to improve
his financial situation are indeed admirable, but I cannot find that they are sufficient, at this time,
to mitigate the Guideline F security concerns.
Although the Individual has filed all of his overdue tax returns, he did not take significant action
to rectify the situation until he became aware that the DOE had a security concern regarding his
finances, even after receiving warnings from his coworkers approximately two years prior. See
Guideline F ¶ 19(b). I note that the Individual has now filed all of his outstanding tax returns;
however, as of the date of the hearing, he has yet to make any payment to the IRS or state tax
authority toward his approximately $200,000 overdue tax bills. Contra id. at ¶ 20(g). Finally, the
Individual did not obtain the services of the tax resolution company until four days prior to the
hearing, and did not seek out financial counseling until after the hearing had concluded. Contra id.
at ¶ 20(a).
The Individual has begun to take the first steps in resolving the security concerns at issue; however,
he has admitted to a history of failing to file or pay his taxes and has not yet demonstrated that he
can consistently and reliably file and pay them. Id. For the foregoing reasons, I cannot find that
the Individual has mitigated the DOE’s security concerns under Guideline F.
VI. Conclusion
After considering all of the relevant information, favorable and unfavorable, in a comprehensive,
common-sense manner, including weighing all of the testimony and other evidence presented at
the hearing, I have found that the Individual has not brought forth sufficient evidence to resolve
the security concerns associated with Guideline F. Accordingly, I have determined that the
Individual’s access authorization should not be granted.
The parties may seek review of this Decision by an Appeal Panel under the regulations set forth at
10 C.F.R. § 710.28.
Katie Quintana
Administrative Judge
Office of Hearings and Appeals
4 The budget was submitted after the hearing, but within the established deadline; however, as such, I was unable to
inquire about the details of the financial counseling service the Individual employed in creating this budget. Ex. V.