PSH-22-0096

*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: June 3, 2022 ) Case No.: PSH-22-0096
)
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Issued: September 26, 2022
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Administrative Judge Decision
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Richard A. Cronin, Jr., Administrative Judge:
This Decision concerns the eligibility of XXXXXXXXXXXX (the Individual) to obtain an access
authorization under the United States Department of Energy’s (DOE) regulations, set forth at 10
C.F.R. Part 710, “Procedures for Determining Eligibility for Access to Classified Matter and
Special Nuclear Material.”1 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 be granted.
I. BACKGROUND
The Individual is employed at a DOE facility, and it was requested that he be granted a security
clearance. During its investigation of the Individual, the Local Security Office (LSO) discovered
that the Individual had charged-off or in-collection accounts totaling over $200,000 and failed to
file federal and state income taxes for the years 2016, 2017 and 2018. Exhibit (Ex.) 1; Ex. 3; Ex.
4. The LSO then issued a Letter of Interrogatory (LOI) to the Individual seeking additional
information regarding these matters. Id. In November 2021, the Individual responded to the LOI,
providing a detailed accounting of these debts and his intention to resolve the outstanding debts.
Ex. 8 at 89–105. The Individual also confirmed that he had not filed or paid federal or state income
taxes for the years 2016-2018. Ex. 8 at 97-100. However, the Individual asserted in his response
that he did not owe taxes during those years. Id.
1 The regulations define access authorization 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).
This Decision will refer to such authorization as access authorization or security clearance.
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The LSO subsequently issued the Individual a letter in which it notified him that it possessed
reliable information that created substantial doubt regarding his eligibility to hold a security
clearance. In a Summary of Security Concerns (SSC) attached to the letter, the LSO explained that
the derogatory information described above raised security concerns under Guideline F (Financial
Considerations). Ex. 1.
The Individual exercised his right to request an administrative review hearing pursuant to
10 C.F.R. Part 710. Ex. 2. The Director of the Office of Hearings and Appeals (OHA) appointed
me as the Administrative Judge in this matter, and I subsequently conducted an administrative
hearing. The LSO submitted ten exhibits (Ex. 1–10) and the Individual submitted seven exhibits
(Ex. A–G). The Individual testified on his own behalf and presented the testimony of one other
witness, his mother. Hearing Transcript (Tr.) at 11-20. The LSO submitted 10 exhibits but did not
call any witnesses. Id. at 3.
II. THE NOTIFICATION LETTER AND THE ASSOCIATED SECURITY CONCERNS
The LSO cited Guideline F (Financial Considerations) as the basis for its determination that the
Individual was ineligible for access authorization. Ex. 2 at 10–12. Guideline F provides that
“[f]ailure 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 or sensitive information.” Adjudicative Guidelines at ¶ 18. “An individual who is
financially overextended is at greater risk of having to engage in illegal or otherwise questionable
acts to generate funds.” Id. The SSC cited the Individual’s extensive charged-off and collection
accounts and his failure to file tax returns to the Internal Revenue Service (IRS) and his state tax
authority for tax years 2016-2018. Ex. 1 at 1–2. These allegations justify the LSO’s invocation of
Guideline F. Adjudicative Guidelines at ¶ 19(a), (c).
III. REGULATORY STANDARDS
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
Dep’t 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 to permit the introduction of a very broad range of evidence at
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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.
IV. FINDINGS OF FACT
As referenced above, the Individual is employed by a DOE facility. During the preliminary
investigation regarding a request that the Individual be given a security clearance, the LSO found
that the Individual had in-collection or charged-off credit accounts totaling $225,738. Ex. 1; Ex.
5; Ex. 6. Specifically, 17 of the past due collection accounts, totaling $200,200, arose from various
student loans the Individual borrowed to earn his Bachelor’s and Master’s Degrees from for-profit
colleges. Ex. 1. Seven of the collection accounts, totaling $12,444, were from various credit cards
and two unpaid bills. Two delinquent credit accounts had been charged off by the original debt
holder totaling $13,094 ($9,043 for a repossessed car and $4,051 for a credit card debt). Ex.1; Ex.
5; Ex.6. Tr. at 61, 64.
The Individual was current on his expenses and debts when he began work in 2012 as college
instructor for another for-profit college and was seeking a Doctor of Philosophy degree. Tr. at 31,
45. While working as an instructor, the federal government closed the for-profit college he worked
in 2015 for improper business practices, none of which he was involved with. Tr. at 31-32. Four
or five months later, the Individual obtained a position at another for-profit college at a lower rate
of pay and was employed for less than full time. Tr. at 31, 41. Approximately a year later, in 2016
or 2017, the federal government stripped the school of accreditation for federal student loans and
the Individual again lost his job. Tr. at 32-34.
The Individual started to experience financial difficulties after losing his second instructor position
in 2016-2017. Tr. at 37. His financial difficulties became increasingly more difficult, and he began
to fall behind on more and more accounts. Tr. at 37. During this period of unemployment, the
Individual did sporadic contractor work and drove for two different ride-sharing employers. Tr. at
39. Eventually, in 2017, the Individual gained part-time work at another for-profit college at a
lower hourly rate than his prior two positions and for fewer guaranteed hours of employment. Tr.
at 40-41. After a year, the Individual was again dismissed from employment because this for-profit
college eliminated the department in which he was an instructor. Tr. at 40.
Because of his joblessness, the Individual fell behind on all his accounts and his car was
repossessed. Tr. at 41-42. The Individual eventually had to move in with his sister and sleep on
her couch. Tr. at 43. He also fell behind on his student loans which originally totaled approximately
$80,000 but eventually increased to approximately $200,000 due to interest. Tr. at 46.
Eventually, the Individual was able to find employment with a contractor at a DOE facility in
2018. Tr. at 40. In 2019, the Individual was hired by another contractor at a significantly greater
rate of full-time pay at $51 per hour. Tr. at 72-74. However, despite having significantly more
income for the past three years, the Individual did not begin to resolve his finances until the
background investigation for his security clearance had commenced. Tr. at 75. When asked why
it had taken so long the Individual testified that at the time, he really didn’t understand how credit
worked and that he received no calls or notices from creditors. Tr. at 75. When he reviewed his
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credit report, he did not understand closed accounts that seemingly were not listed on the report as
adding to his total indebtedness were still considered debts. Tr, at 75; see Ex. E.
The Individual’s mother confirmed that the Individual managed to support himself while employed
at the for-profit colleges, despite relatively low wages. Tr. at 13. While employed, the Individual
did not live beyond his means. Tr. at 14, 17. She helped the Individual by making a car payment
so the Individual could work. Tr. at 14. She also discussed with the Individual his financial
problems. She believed that his failure to pay bills resulted from the Individual not having any
income. Tr. at 14. She also reported that during his periods of unemployment the Individual
resorted to sleeping on a couch or in a basement of various family members. Tr. at 14-15. At one
point the Individual had to ask his mother for food since he had not eaten in two days. Tr. at 14-
15. The Individual’s mother corroborated the Individual’s account of why he had become
unemployed and confirmed that it was not due to any misconduct. Tr. at 16-17.
The Individual sought to remedy his student loan debts a few months prior to the hearing. Tr. at
78. By contacting the federal program responsible for student loans, he was able to have his
numerous student loans consolidated into one loan of $195,831 with a payment of $870 per month.
Tr. at 78; Ex. A; Ex. B. With this consolidation, his student loans are no longer in collection and
are in a forbearance status with payments beginning at the end of September 2022. Ex. B, E.
For the non-student loan debts in collection, the Individual has submitted evidence that he has
payment plans addressing two of the accounts and has made payments pursuant to the plan. Ex. C;
Ex. D. He has also recently begun to pay another delinquent credit card account on a payment plan.
Tr. at 48-49. Regarding the remaining four non-student loan delinquent accounts for credit cards,
cable TV equipment, and delinquent rent, the Individual is researching how to contact the creditors
to arrange a repayment plan. See Tr. at 42, 58 and 60. As for the two charged-off accounts, the
Individual has not contacted the account holder for his repossessed automobile nor has he recently
contacted the charged-off credit card account holder.2 Tr. at 62, 65.
The Individual testified that he has a computer spreadsheet listing his payments on several of his
debts. Tr. at 97. He does not believe he needs a formal budget since his current expenses are “well
underneath” his monthly take-home pay. Tr. at 97. As of the date of the hearing, the Individual is
current with all his “regular bills” and an examination of his credit reports reveals that he has a
“100 percent payment rate.” Tr. at 64-65. The Individual also testified that after his student loan
consolidation, none of his student loan accounts are listed as delinquent. Tr. at 66. The Individual
currently earns take-home pay of $4,600 monthly. Tr. at 98. After accounting for the student loan
repayment plan into which he has entered, his two loan repayment plans and his household bills,
the Individual has approximately $1,200 a month remaining. Tr. at 99-100.3 Tr. at 97. The
Individual then tries to set aside $600 to $1,000 per month in his savings. Tr.at 100. The Individual
2 The Individual stated that, in 2016, when he began experiencing difficulties in paying this credit card, he initially
contacted the credit card account holder who refused to accept any type of payment plan. Tr. at 65.
3 The Individual later testified that he had approximately $2,000 per month remaining. Tr. at 99.
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asserted in his testimony that he does not live beyond his means and is careful not to try to resolve
too much debt in a manner that would put him in financial distress. Tr. at 97-99.
Regarding the SSC’s allegation that he failed to file state and federal taxes for the years 2016
through 2018, the Individual asserted that he had filed both federal and state tax returns for all the
23 years prior to 2016.4 Tr. at 69. He stated that he “probably” did not owe any additional taxes
regarding his recently-filed 2016 through 2018 tax returns since he believed that, in his experience,
he had only owed taxes in one tax year ever, 2015. Tr. at 24. The Individual asserted that when he
lost his job at the first for-profit college when it was closed, he asked tax officials for an extension
because he had difficulty getting a W-2 from the college. Tr. at 68. He was unaware that he could
obtain the form from the IRS. Tr. at 68. Because he believed that he did not owe taxes to the state
or federal government and because of the stress of his financial situation, he neglected to file tax
returns. Tr. at 68. He stated that he now realizes the importance of filing his tax returns promptly
even if he owes no additional taxes. Tr. at 68.
V. ANALYSIS
Regarding the security concerns raised under Guideline F, the Individual has made significant
advances in paying his numerous outstanding debts. Guideline F lists seven conditions that could
mitigate a concern raised by financial irregularities:
(a) 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;
(b) The conditions that resulted in the financial problem were largely beyond the
person’s control (e.g., loss of employment, a business downturn, unexpected
medical emergency, a death, divorce or separation, clear victimization by predatory
lending practices, or identity theft), and the individual acted responsibly under the
circumstances;
(c) The individual has received or is receiving financial counseling for the problem
from a legitimate and credible source, such as a non-profit credit counseling
service, and there are clear indications that the problem is being resolved or is under
control;
(d) The individual initiated and is adhering to a good-faith effort to repay overdue
creditors or otherwise resolve debts;
(e) The individual has a reasonable basis to dispute the legitimacy of the past-due
debt which is the cause of the problem and provides documented proof to
substantiate the basis of the dispute or provides evidence of actions to resolve the
issue;
4 The Individual stated he had been late filing his 2019 tax returns but had promptly filed his 2020 tax returns. Tr. 69-
70.
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(f) The affluence resulted from a legal source of income; and
(g) The individual has made arrangements with the appropriate tax authority to file
or pay the amount owed and is in compliance with those arrangements.
Adjudicative Guidelines at ¶ 20(a)—(g).
In reviewing the applicability of the first mitigating factor (Mitigating Factor A) to the present
case, I have reviewed the facts and circumstances leading to the Individual’s financial difficulties.5
The Individual’s circumstances leading to his financial difficulties are unusual. The Individual lost
three positions within a short time frame through no fault of his own. The Individual is now
employed in a position with a higher salary than he received in his prior positions, and is current
on all his bills. Because I find that the highly unusual circumstance leading to his indebtedness is
very unlikely to reoccur and as such does not cast doubt on the individual’s current reliability,
trustworthiness, or good judgment, I find that Mitigating Factor A applies to this case.
Mitigating Factor B is not applicable in this case, since, although I find that the Individual lived
within his financial means before being terminated and could do little to resolve his debt while
jobless, he did not act in a prompt manner to try to resolve his financial delinquencies until some
three years after his employment at the DOE facility.
Mitigating Factors C, E and F are not applicable in the present case. Other than discussions with
his mother about his financial problems, there is no evidence in the record that the Individual has
received financial counseling. Nor has the Individual indicated that he has challenged the
legitimacy of the student loan debt or any of the other debts that are in collection status. Further,
the financial concern does not arise from unexplained affluence.
As for Mitigating Factor D, the Individual has submitted evidence that he is currently on payment
plans regard three of the non-student loan collection accounts and has agreed to a repayment plan
regarding his student loans. Tr. at 49-51, 55. Further, he had demonstrated that he is making the
required payments, and his current level of income will allow him to continue making the payments
without difficulty. Thus, I find that the Individual’s testimony and his submitted exhibits have
provided adequate evidence that the Individual has initiated good faith efforts to resolve his
indebtedness and is adhering to his repayment plans. Although the Individual has not yet located
the creditors associated with some of his delinquent accounts, those creditors represent only a
small percentage of his overall debt, and I find credible his testimony that he is actively seeking to
locate them. Consequently, I find that Mitigating Factor D is applicable in this case.
Regarding Mitigating Factor G, the Individual testified credibly that he has submitted all his
delinquent tax returns. Further, there is no evidence in the record that the Individual currently owes
federal or state taxes. I therefore find that Mitigating Factor G applies in this case.
As discussed above, I find that a number of the Guideline F mitigating factors apply in the present
case. The testimony indicates that the Individual was successfully managing his finances until a
5 In discussing these factors, I will identify them by their letter designator in Paragraph 20 of the Adjudicatory
Guidelines.
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series of events beyond his control severely impacted the Individual’s ability to earn a living.
Compounding this situation was the fact at the time he was a student who had financed his
education through student loans. The extent of his devasting financial state after his job loss was
illustrated by the fact he became for a while functionally homeless. The Individual’s mother
testimony supports the Individual’s account of his financial situation before finding a job at the
DOE facility. Evidence in the record shows that the Individual has been able to refinance his
substantial student loan debt, which constitutes a significant portion of his total debt, into a
repayment plan with manageable a monthly payment that he can afford. A recent credit report
indicates that he has refinanced and is current regarding his student loan debt of approximately
$195,000 of his now total overall debt of $207,116. Ex. E at 1 (August 2022 credit report). I also
found the Individual’s testimony credible as to his effort to reach out to his creditors. As such, I
find that the Individual has resolved the Guideline F security concerns raised by the SCC.
VI. CONCLUSION
In the above analysis, I found that there was sufficient derogatory information in the possession of
DOE to raise security concerns under Guideline F of the Adjudicative Guidelines. 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
find that the Individual has brought forth sufficient evidence to resolve the security concerns under
Guideline F. Accordingly, the Individual has sufficiently demonstrated that granting his security
clearance would not endanger the common defense and would be clearly consistent with the
national interest. Therefore, I have determined that the Individual should be granted access
authorization. This Decision may be appealed in accordance with the procedures set forth at 10
C.F.R. § 710.28.
Richard A. Cronin, Jr.
Administrative Judge
Office of Hearings and Appeals