PSH-24-0057

*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: February 1, 2024 ) Case No.: PSH-24-0057
)
_________________________________________ )
Issued: May 9, 2024
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Administrative Judge Decision
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Brenda B. Balzon, Administrative Judge:
This Decision concerns the eligibility of XXXXXXXXXXX (the Individual) to hold 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 not be restored.
I. BACKGROUND
A DOE contractor employs the Individual in a position that requires him to hold a security
clearance. In January 2023, the Individual self-reported to the Local Security Office (LSO) in an
incident report (IR) that he was over 120 days delinquent on five separate accounts that had been
charged-off. Exhibit (Ex.) 6 at 31–32.2 On May 22, 2023, the LSO obtained a credit report file for
the Individual (2023 Credit Report). Ex. 10. The 2023 Credit Report revealed four total charge-off
accounts, including one totaling $219 which the Individual was required to disclose but omitted
from the IR.3 Ex. 10 at 63. The 2023 Credit Report indicated that the Individual’s delinquent debts
totaled $63,586. 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.”
2 The exhibits submitted by the DOE were Bates numbered in the upper right corner of each page. This Decision will
refer to the Bates numbering when citing to exhibits submitted by DOE.
3 Two of the delinquent debts identified by the Individual in the 2023 IR were not found on the 2023 Credit Report.
See Ex. 10.
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Subsequently, the LSO issued the Individual a Letter of Interrogatory (LOI), which the Individual
completed in June 2023. Ex. 9. In the June 2023, LOI, the Individual explained the circumstances
surrounding his delinquencies, including the fact that he omitted an additional delinquent account
in the IR. Id. at 52–59. He also reported that he had not filed his state and federal tax returns for
2020, 2021, and 2022. Id. at 57. The Individual further reported that gambling contributed to his
financial hardship. Id. at 56.
In August 2023, the Individual completed a second LOI. Ex. 8. In the August 2023, LOI, the
Individual reported that he had not yet filed his state or federal tax returns for 2020, 2021, or 2022,
but he was currently working with a certified public accountant (CPA). Id. at 37–39. The Individual
also reported that, once businesses started to re-open during the COVID-19 pandemic, he would
gamble at casinos “weekly.” Id. at 40–44. In September 2023, the Individual completed an LOI
Addendum. Ex. 7. In the September 2023, LOI Addendum, the Individual reported that his
gambling activity approximately took place between May 2021, and October 2022. Id. at 34.
Due to the unresolved security concerns stemming from the Individual’s disclosures in the June
2023, LOI, August 2023, LOI, and September 2023, LOI Addendum, the LSO informed the
Individual in a Notification Letter that it possessed reliable information that created substantial
doubt regarding the Individual’s eligibility to hold a security clearance. Ex. 1 at 7–8. In an
attachment to the letter, entitled Summary of Security Concerns (SSC), the LSO explained that the
derogatory information raised security concerns under Guideline F of the Adjudicative Guidelines.
Id. at 5–6.
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 review
hearing. The LSO submitted eleven numbered exhibits (Exs. 1–11) into the record and did not call
any witnesses at the hearing. The Individual submitted 14 lettered exhibits (Exs. A–N) into the
record and presented the testimony of two witnesses, including himself. See Transcript of Hearing,
Case No. PSH-24-0057 (hereinafter cited as “Tr.”).
II. NOTIFICATION LETTER AND THE ASSOCIATED SECURITY CONCERNS
As indicated above, the Notification Letter informed the Individual that information in the
possession of the DOE created substantial doubt concerning his eligibility for a security clearance.
The LSO cited Guideline F (Financial Considerations) of the Adjudicative Guidelines as the basis
for suspending the Individual’s security clearance. Ex. 1. It is well established that “[f]ailure 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.” Adjudicative Guidelines at ¶ 18. Among the conditions set forth under Guideline F
that could raise a disqualifying security concern is the failure to file federal or state income tax
returns or to pay federal or state income tax as required. Id. at ¶ 19(f). In citing Guideline F, the
LSO relied upon the Individual’s admissions that he failed to file his federal and state income tax
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returns for 2020, 2021, and 2022. Ex. 1 at 5. The LSO also cited the Individual’s four unpaid
charge-off accounts totaling $63,586. Id. The LSO further cited the Individual’s admissions that,
between May 2021, and October 2022, gambling contributed to his financial difficulties, he
gambled with funds allocated for bills, and gambling added to his marital issues as he concealed
losses from his wife. Id. at 5–6. The cited information justifies the LSO’s invocation of Guideline
F.
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
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. Id. § 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 noted above, although the Individual self-reported several delinquent accounts in the IR, the
2023 Credit Report revealed an additional delinquent debt. Ex. 10 at 63. In the June 2023, LOI,
the Individual asserted that he did not intentionally omit the additional delinquent account, but
because there were “many accounts overdue,” he “may have left [it] out by accident.” Ex. 9 at 57.
The Individual indicated that the stress and financial burden occurred as a result of building a
home, including the price increase of materials during the COVID-19 pandemic, caused the
delinquencies. Id. at 55. He stated that once his wife obtained a job, he planned on refinancing his
loans and consolidating the debt.4 Id. at 55. The Individual also reported that the stress caused by
the “price increases, the lock down of covid, and [his] wife taking a break from work” caused him
4 The Individual indicated that his wife was employed as a nurse and “worked through covid,” although it is unclear
what date exactly the Individual considers to be “through covid.” Ex. 9 at 55. Because his wife developed extreme
fatigue during this time, the Individual explained, she was currently “taking a break so she could re[-]enter the
workforce.” Id.
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to gamble as a “short-term escape.” Id. at 56. The Individual stated that his gambling contributed
to his financial hardship, and he went “more to the casino” once businesses started to re-open
during the pandemic. Id. Regarding his failure to file his federal or state personal income tax
returns for 2020, 2021, and 2022, the Individual stated that he “did not know how to proceed with
[his] tax situation” because he and his wife had been “fighting and arguing over money,” and he
“wasn’t sure if [they] were going to stay together.” Id. at 57. The Individual indicated that he had
since contacted a CPA and intended to resolve his tax issues. Id.
In the August 2023, LOI, the Individual reported that he was currently working with a CPA and
was “in the process” of filing his state and federal personal income tax returns for 2020, 2021, and
2022. Ex. 8 at 37. He indicated that he believed he owed money for his federal taxes, but he was
unsure of the exact amount. Id. at 40. He also reported that he was not currently gambling, but he
last gambled “approximately [two] months ago.” Id. at 41–42. The Individual indicated that he
previously gambled weekly at various casinos, often spending between $100 and $1,000 per visit.
Id. at 41. The Individual stated that because he was “locked down at a time when [he and his wife]
were having marital issues,” the casino provided a “place to be alone and way from the house.” Id.
at 40. He also reported that he “concealed some losses from his [wife],” and his gambling habit
“[a]dded to [his] marital issues.” Id. at 43. In the September 2023, LOI Addendum, the Individual
reported that his gambling “pattern changed” when he started building his house in May 2021, and
“continued [un]til closing on the home [in] October 2022 or shortly thereafter.” Id. at 34.
At the hearing, the Individual’s colleague (Colleague) at a second job that is not affiliated with
DOE, testified that he has worked with the Individual for approximately four years. Tr. at 10–11.
The Colleague stated that he maintains daily contact with the Individual, and although they do not
socialize outside of work, he considers the Individual to be a “good friend.” Id. at 11–12. The
Colleague testified that the Individual informed him of his “challenges,” and he is helping to
mentor the Individual and “provide him a good, positive outlook.” Id. at 13. The Colleague
explained that he helped the Individual “set. . .goals” and articulated what “type of. . . activity” the
Individual would need to “remedy his personal financial decisions.” Id. at 19–20. He specified that
he advised the Individual how to improve in his trade so he could reach his stated financial goals.
Id. at 20–21, 28–29. The Colleague noted that he was not aware whether the Individual had any
difficulties paying bills or taxes. Id. at 15–16. He also stated that he is advising the Individual on
how to prioritize personal and outstanding bills.5 Id. at 29–31. When asked whether he could name
a specific debt that he helped the Individual identify and pay, the Colleague stated that he could
not. Id. at 32–33.
5 The Colleague explained a financial technique called the “snowball effect” which he indicated that, in his view, was
“taking money that you’ve earned and reinvesting it into other profitable ventures that are going to continue to grow
and accumulate finances for you to have available for reinvestment, and then utilizing the growing finances to put
yourself in a better position . . . .” Tr. at 30.
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The Individual testified that he had recently filed his federal and state taxes for years 2020 through
2022.6 Id. at 36, 40, 65–66. The Individual stated that because of his marital issues, he was unsure
whether he should file his tax returns together with his wife, or separately. Id. at 38, 67–68. The
Individual testified that although his accountant advised him at the time that he “need[ed] to
address [his tax returns]” and recommended that he file the tax returns jointly with his wife, he did
not want to “burden her with [his debt]” by filing jointly. Id. at 68–71. He acknowledged that he
“should have done a better job,” but at the time, he “froze” under the pressure. Id. at 38. Following
the submission of his 2020, 2021, and 2022 federal tax returns, the Individual had outstanding
balances of $9,581.11, $7,421.30, and $10,572.63, respectively. Regarding the Individual’s state
taxes, Individual did not owe money to his state tax authority for the years 2020 through 2022, but
instead, was issued a refund. Ex. N.
Although the Individual acknowledged his failure to file his taxes in the June, August, and
September 2023 LOIs, he testified that several of his tax returns were not filed until just weeks
before the hearing because he was “at the mercy of when [his CPA] had time to do it,” and the
holiday season in December 2023, caused delays. Tr. at 45–46. He stated that the filing of his taxes
“could have been done sooner,” but asserted that he was actively working on the issue, including
“exchanging texts” and submitting documents to his CPA. Id. at 46.
The Individual testified that he has not made any outstanding tax debt payments or contacted the
IRS to establish a payment plan. Id. at 48–49. The Individual also stated that he is not currently
able to pay upwards of $20,000 to satisfy the total amount owed. Id. at 41. He explained that his
wife had not been employed for a year and a half due to foot surgery and had just returned to work
two weeks prior to the hearing. Id. at 41–42. The Individual testified that, in addition to his wife’s
new income, he has a plan to pay his tax debt, which includes “business plans” with his Colleague
on “many ventures.” Id. at 42. He stated that he recently received a $10,000 commission check for
his services, which he plans to use to satisfy a 401k loan of approximately the same amount, then
obtain “a new 401k loan” for approximately $40,000-45,0000 to pay off his taxes. Id. at 48, 61.
The Individual further explained that his Colleague told him that he made a “great investment in
[his] home,” and he should “use [that] asset to [his] advantage,” which the Individual indicated he
planned to do by taking out a home equity loan to start a business. Id. at 53. The Individual stated
that he is currently working two jobs to address his debts. Id. at 47.
Regarding his charge-off accounts, the Individual testified that the debts totaling $48,586 and
$13,908 were both for vehicle loans. Id. at 50, 60. He stated that he is still in possession of both
vehicles. Id. at 51, 60. For the $923 charge-off account, the Individual indicated this was for a
credit card. Id. at 51. For the account totaling $219, the Individual could not recall what this was
for, but stated that it could have been a “payday loan.” Id. He asserted that he could not recall how
old these loans were, but believed they could have been from 2022. Id. The Individual testified
6 The Individual’s testimony is supported by his submission of a statement from his CPA, which indicated that the
CPA filed income taxes on behalf of the Individual for years 2020 through 2022, copies of his Electronic Filing
History, and an IRS Transcript for each of those years. Ex. B; Ex. C; Ex. D; Ex. E; Ex. J; Ex. K; Ex. L. The Individual
also submitted screenshots from his State Taxation and Revenue Department website to demonstrate that he filed his
state tax returns for years 2020 through 2022. Ex. B; Ex. C; Ex. D; Ex. E; Ex. N.
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that for all four charge-off accounts, he had not yet contacted the account holders to determine his
current status. Id. at 55. The Individual stated that he planned to contact his creditors and attempt
to settle his outstanding debts once he had “cash in [his] bank account.” Id. at 49–50. As noted
above, the Individual testified that he planned on “reinvest[ing]” money from his potential
$40,000-45,000 401k loan or home equity loan to satisfy his debts. Id. at 53, 61–62.
The Individual submitted a monthly budget, in which he indicated that he and his wife have an
estimated pre-tax monthly income of $13,518. Ex. M. The Individual estimated that $6,000 of their
monthly income would go towards monthly bills, including $1,000 allotted for “minimum debt
payments.” Id.
Regarding his gambling, the Individual testified that he was going through a “rough time” in his
marriage during the COVID-19 pandemic, and he needed a “place to get away to be alone.” Tr. at
56. The Individual stated that he suffers from Attention Deficit/Hyperactivity Disorder (ADHD)
and anxiety, so “being home, anxious” during the COVID-19 pandemic caused an extreme amount
of stress. Id. The Individual explained that he turned to the “unhealthy environment of needing to
be alone” by gambling, and he is “not proud of it.” Id. The Individual testified that gambling is no
longer an issue as he currently seeks counseling to help manage his anxiety.7 Id. at 56–57, 74, 80.
The Individual stated that he last saw his therapist a month before the hearing and currently has
another appointment scheduled for either April or May 2024. Id. at 74.
The Individual indicated that he still goes to the casino “every once and awhile” to use his “free
play” credit, including as recently as the day before the hearing. Id. at 58, 72. The Individual
explained that when he was gambling, casinos would reward him with a “certain amount of
money” to play for free with, and this is what he currently uses to gamble with. Id. at 72–73. The
Individual testified that other than the dollar it takes to activate each free play, he does not spend
any of his own money at the casino. Id. at 73.
V. ANALYSIS
Conditions that could mitigate a security concern under Guideline F include:
(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 judgment;
(b) the conditions that resulted in the financial problem were largely beyond the
person’s control . . . and the individual acted responsibly under the circumstances;
7 Although a DOE-consultant psychologist (DOE Psychologist) did not testify at the hearing, in DOE’s December
2023, Case Evaluation, it was noted that a DOE Psychologist determined that it was “likely that [the Individual]
experienced increased symptoms [of Generalized Anxiety Disorder and ADHD] during a period of extreme
psychosocial stress, which likely influenced his engagement in maladaptive gambling at the time,” but “his symptoms
have been well managed since” October 2022. Ex. 3 at 18. The DOE Psychologist determined that the Individual was
in sustained remission for Gambling Disorder, Episodic. Id.
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(c) the individual has received or is receiving financial counseling for the problem from
a legitimate and credible source . . . ; 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;
(f) the affluence resulted from a legal source of income;
(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.
As an initial matter, it does not appear that the Individual’s gambling is currently impairing him.
The Individual testified that he used gambling as an escape from his stress, depression, and marital
issues, but he has since addressed these problems through therapy. The Individual explained that
when he does gamble, he exclusively uses his “free play” rewards, not his own money (other than
the dollar it costs to activate the rewards).
Nevertheless, the circumstances surrounding the Individual’s debts do not remove the doubt cast
on his reliability, trustworthiness, and judgment. First, the Individual’s failure to file his federal
and state income taxes continued until as recently as tax-year 2022, and his delinquent debt
obligations remain outstanding. Therefore, his behavior cannot be said to have occurred so long
ago. Also, very little time has passed since the Individual took significant action to mitigate the
security concerns, as he did not choose to file his 2021 through 2022 federal tax returns until March
2024, just weeks before the hearing. Further, the Individual has taken no action to resolve his
delinquent debts since reporting the charge-off accounts in January 2023, nor has he contacted the
IRS regarding a payment plan for his tax debt. The Individual has stated only that he “plans” to
contact the account holders to negotiate a settlement once he has more money. Second, the
Individual’s behavior was frequent because he failed to file federal and state taxes for three
consecutive years and waited to file the majority of the past-due returns until just weeks before the
hearing.
Third, the Individual’s behavior did not occur under such circumstances that it is unlikely to recur.
The Individual testified that his plan for obtaining the necessary funds to satisfy his debts includes
taking out additional loans, with the possibility of also using these funds to start a business with
his Colleague.8 Based on the Individual’s stated plan of going further into debt to satisfy his current
8 In the June 2023, LOI, the Individual also indicated that he planned to resolve his debts with a “home refinance
[loan] now that [his] house construction [was] complete.” Ex. 9 at 53.
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debts, I cannot conclude that the Individual’s behavior 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. Therefore, I find that the Individual has not mitigated the security concerns
under factor ¶ 20(a).
Regarding factor ¶ 20(b), although the circumstances that led to the Individual’s financial
difficulties, such as the increased price of materials for his house during the COVID-19 pandemic,
may have been unforeseen, it cannot be said that the Individual acted responsibly under the
circumstances. For example, the Individual stated that he talked to his accountant during the years
he failed to file his taxes, and his accountant advised him to file at the time. Although the Individual
testified that his marital issues caused uncertainty with respect to his filing status, it was not
reasonable for him to ignore his accountant’s advice regarding this issue. Moreover, the Individual
admitted that he gambled as a “short-term escape” from stress associated with his financial issues.
While he demonstrated at the hearing that his gambling is not currently impairing him, I cannot
find that he acted responsibly under the circumstances when he gambled weekly at various casinos,
often spending between $100 and $1,000 per visit, during the time he was incurring additional
home building costs. And in any event, the Individual has failed to take any action to resolve his
outstanding debts prior to the hearing. Therefore, I find the Individual has not mitigated the
security concerns under factor ¶ 20(b).
Regarding factor ¶ 20(c), although the Individual’s Colleague testified that he has been providing
the Individual with financial counseling since December 2023, it is evident that the extent of the
Colleague’s advice generally relates to how the Individual can meet a certain financial goal. The
Colleague acknowledged that he has not helped the Individual resolve any specific debt, and he
was not aware whether the Individual had any problems satisfying his bills or taxes. Further, there
is no indication that the Individual’s financial problems are under control as he has failed to take
any action to resolve his outstanding debts as of the date of the hearing. Therefore, I find the
Individual has not mitigated the security concerns under factor ¶ 20(c).
Regarding factor ¶ 20(d), while the Individual testified that he intends to resolve his delinquent
debt, he has not presented any evidence that he initiated and is adhering to good-faith efforts to
repay his outstanding creditors. In fact, he acknowledged that as of the date of the hearing, he has
not reached out to any of his creditors despite self-reporting several of his delinquent debts in
January 2023. Therefore, I find that mitigating factor ¶ 20(d) is not applicable to this case.
I find that mitigating factor ¶ 20(e) is not applicable to this case because the Individual has not
indicated that he disputes the legitimacy of any past-due debt. I find that mitigating factor ¶ 20(f)
is not applicable to this case because the security concerns raised by the LSO do not involve
unexplained affluence.
Regarding factor ¶ 20(g), although the Individual has successfully filed his outstanding tax returns,
he has not yet started to repay his tax debt or establish a payment arrangement with the IRS.
Therefore, I find that mitigating factor ¶ 20(g) is not applicable to this case.
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Accordingly, for the reasons cited above, I find that the Individual has not mitigated the Guideline
F security concerns raised by the LSO.
VI. CONCLUSION
In the above analysis, I found that there was sufficient derogatory information in the possession of
the DOE that raised security concerns under Guideline F of the Adjudicative Guidelines. After
considering all of 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 not brought forth sufficient evidence to resolve the security
concerns set forth in the Summary of Security Concerns. Accordingly, I have determined that the
Individual’s access authorization should not be restored.
This Decision may be appealed in accordance with the procedures set forth at 10 C.F.R. § 710.28.
Brenda B. Balzon
Administrative Judge
Office of Hearings and Appeals