PSH-22-0034

*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: December 17, 2021 ) Case No.: PSH-22-0034
)
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Issued: April 5, 2022
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Administrative Judge Decision
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This Decision concerns the eligibility of XXXXX 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 restored.
I. Background
The Individual is employed by a DOE contractor in a position that requires him to hold a security
clearance. As part of a reinvestigation for his security clearance, the Individual completed a
Questionnaire for National Security Positions (QNSP) in January 2021. Ex 6. In response to the
QNSP’s financial questions, the Individual indicated that he had failed to file his Federal tax returns
since 2011. Id. at 52. Subsequently, the Local Security Office (LSO) asked him to complete a Letter
of Interrogatory (LOI), in which he explained that he had since filed his tax returns for the 2011-
2013 tax years, but he had not yet filed his tax returns for the 2014-2019 tax years. Ex. 5. Due to
unresolved security concerns arising from his failure to file Federal tax returns, the LSO informed
the Individual, in an August 2021 Notification Letter (Notification Letter), that the Individual’s
security clearance was suspended. In the letter, the LSO asserted 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) of the Adjudicative Guidelines. Ex.
1.
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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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
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 seven numbered exhibits (Exhibits 1-7) into the record. The Individual did not tender
any exhibits, but he 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 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)
(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 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 letter asserted
that the derogatory information fell under 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 is the failure
to file Federal or state income tax returns. Id. at ¶ 19(f). In citing Guideline F, the LSO stated that
the Individual had failed to file his Federal tax returns for the 2014-2019 tax years. Ex. 1.
IV. Findings of Fact
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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. He stated that he retained the services of
a tax accountant approximately six months to a year prior to receiving the August 2021 Notification
Letter, and although he has been working with the tax accountant, as of the date of the hearing, he
had yet to file his 2014-2021 tax returns.2 Tr. at 14-15, 19. The Individual claimed that he filed an
extension with the Federal tax authority, but he stated that did not have any documentation
regarding any such extension.3 Id. at 14-15. The Individual indicated that he did not know if he was
entitled to a refund or owed any money for any of the outstanding tax years. Id. at 15.
The Individual stated that he stopped filing his taxes because he “just got behind because [he]
love[s] real estate investing,” but he needs “somebody that can hold [him] accountable for keeping
track of [his] spending.” Id. at 19. He testified that it is his intention to file all his outstanding taxes
and pay any outstanding tax debt. Id. at 17-18. The Individual noted that, at this time, he is “trying
[his] best to get all [his] information together,” and he believes that he is “basically 80 to 90 percent
done” with gathering all the appropriate information. Id. at 18.
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 Guideline F security concerns. 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). Therefore, I have
determined that the Individual’s security clearance should not be restored. The specific findings
that I make in support of this decision are discussed below.
As discussed above, failure to meet financial obligations can raise security concerns as 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, demonstrating that arrangements have been made with the appropriate tax authorities
to file the taxes may mitigate the security concerns. See id. at ¶ 20 (g).
Here, the Individual has begun to take the first steps to mitigate the security concerns related to his
tax situation. He has retained the services of a tax accountant and begun gathering his
documentation; however, at this time the Individual has yet to file his tax returns for the 2014-2021
2 The Individual testified that his tax accountant explained that he cannot file his 2021 Federal tax return until his
outstanding tax returns have been successfully filed. Tr. at 15.
3 It is unclear from the Individual’s testimony which tax year(s) the extension was related. Tr. at 14-15.
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tax years. 4 Furthermore, he has not adequately demonstrated that he has made any arrangements
with the Federal tax authority regarding his outstanding tax returns. As such, I cannot, at this time,
find that the Individual has mitigated the Guideline F security concerns.
VI. Conclusion
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 the
security concerns associated with Guideline F. Accordingly, I have determined that the Individual’s
access authorization should not be restored.
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 I note that as of the date of this decision, the Individual’s 2021 taxes are not yet late; however, I include them in his
outstanding tax returns as the Individual testified that he is unable to file his 2021 tax return until his other outstanding
taxes have been successfully filed. See Tr. at 15.