Case No. VSA-0241 (OHA June 25, 1999)

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* 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 XXXXXXX’s.

June 25, 1999

DEPARTMENT OF ENERGY

OFFICE OF HEARINGS AND APPEALS

Opinion of the Director

Name of Case:Personnel Security Review

Date of Filing:April 5, 1999

Case Number: VSA-0241

On April 5, 1999, XXXXXXXXXXX (hereinafter the individual) filed a Request for Review of a Hearing Officer’s Opinion concerning his eligibility to retain a Department of Energy (DOE) access authorization under the regulations set forth at 10 C.F.R. Part 710, entitled “Criteria and Procedures for Determining Eligibility for Access to Classified Matter or Special Nuclear Material.” The DOE office having responsibility for the individual’s place of employment suspended the individual’s access authorization pursuant to the provisions of Part 710. Pursuant to the individual’s request, an Office of Hearings and Appeals Hearing Officer convened a hearing. Subsequently, on February 26, 1999, the Hearing Officer issued an Opinion recommending that the Director of the DOE’s Office of Security Affairs not restore the individual’s access authorization. Personnel Security Hearing (VSO-241), 27 DOE ¶ 82,794 (1999) (February 26 Opinion). The individual filed his Request for Review of the Hearing Officer’s opinion pursuant to 10 C.F.R. § 710.28. On April 15, 1999, the individual filed a Statement of Issues that he asked me to consider in my review. Finally, on May 4, 1999, the Director of the DOE’s Office of Safeguards and Security notified me that his Office would not file a response to the Statement of Issues. Accordingly, I closed the administrative record on May 4, 1999, and will now consider the individual’s Statement of Issues.

I. Background

The facts leading to the suspension of the individual’s security clearance fall into the category of unreliability and financial irresponsibility, which is derogatory information as described at 10 C.F.R. § 710.8(l) (hereinafter Criterion L). According to a letter informing the individual of these concerns and outlining the details of the allegations concerning Criterion L (the Notification Letter), the individual declared bankruptcy twice in eight years, in 1990 and 1998. The Notification Letter asserted further that rather than paying for government travel expenses charged on his government- issued travel charge card, the individual used money received as reimbursement for the travel expenses to pay for personal items, such as gasoline and groceries. This practice contributed to an outstanding balance on this credit card of $7,194, which was included in the 1998 bankruptcy. The Notification Letter also indicated that the individual charged to his government credit card restaurant meals for his family and a personal motel stay.

Upon learning of the Criterion L security concern, the DOE office suspended the individual’s access authorization. The DOE office followed this access authorization suspension with its issuance to the individual of the Notification Letter. Pursuant to the Part 710 regulations cited in the Notification Letter, the individual requested a hearing before an Office of Hearings and Appeals Hearing Officer. Following her appointment, the Hearing Officer convened the requested hearing. On February 26, 1999, the Hearing Officer issued her opinion recommending that the DOE’s Office of Security Affairs not restore the individual’s access authorization.

II. The Hearing Officer’s Opinion and Testimony at the Hearing

A. Use of the Credit Card for Personal Matters

Based on the individual's use of a government-issued credit card to charge personal expenses, use of government reimbursement monies to pay personal expenses rather than to pay government travel expenses, and declaration of bankruptcy in 1990 and 1998, the Hearing Officer found that the DOE office properly invoked Criterion L in suspending the individual’s access authorization. The individual stated that he knew it was improper to use the government-issued credit card for purposes not related to government travel; nevertheless, he admitted that he used that card on 12 occasions to purchase restaurant meals for himself and his family in his hometown. Transcript of Personnel Security Hearing (hereinafter Tr.) at 119-120; see also Transcript of Personnel Security Interview (hereinafter PSI Tr.) at 66. The individual explained that he had to charge those meals because he had no money to feed his family. In addition, he admittedly used the card to charge for three or four nights in a motel in his hometown. Tr. at 104; PSI Tr. at 41, 43. This stay was also not related to government business: the individual testified that he had an argument with his wife, and in order to keep his temper under control, he decided to leave home and stay in a motel. He testified that he was intent upon leaving the situation “so that it did not explode.” Tr. at 112. Since he allegedly had no cash or personal credit available to pay for the meals and the motel stay, he contended that he needed to use the government card.

The Hearing Officer found that these explanations did not mitigate the security concern. Specifically, she found that the individual's motives did not justify departure from adherence to established rules enacted specifically to regulate the very conduct in which he engaged. Needing additional funds for the ordinary expenses related to supporting one's family did not constitute an acceptable basis for disregarding those rules.

The Hearing Officer also had a concern that in a time of family stress, the individual's reaction was to resort to a solution that violated the rules, rather than one that did not involve improper use of the credit card. The Hearing Officer believed that when the individual used his government credit card for personal expenses, he did not appear to reflect seriously upon what other appropriate options might exist and that this gave rise to a further concern about the individual's overall reliability and trustworthiness in adverse circumstances.

The Hearing Officer found that since the individual’s access authorization had been suspended for only a few months prior to the hearing and he had not recently been assigned to any duties requiring travel, the individual had not shown that he was able to maintain a sufficient and stable bank account to draw on. Thus, the Hearing Officer could not assess whether his proposal to pay for his travel expenses with his own funds, rather than use a government credit card, was practicable. Moreover,

the Hearing Officer believed that the individual's statement of his intentions to use his own funds while on government travel did not resolve the concern related to the individual's repeated improper personal use of the card, since the individual had developed a pattern of using the card whenever he found himself in a difficult situation.

B. Bankruptcy

The individual offered three explanations for the financial downturn that led to his 1998 bankruptcy. First, he provided financial assistance to his mother after his father died. Second, for a period of time, he did not receive his accustomed overtime pay. Third, he contended that his government travel credit card was charged with approximately $11,900 in unauthorized expenses, which he unwittingly attempted to pay in full. The Hearing Officer did not find that these explanations mitigated the security concerns associated with his declaration of bankruptcy.

In support of his contention that his government credit card account was charged with some debts that he did not incur or authorize, the individual submitted government travel vouchers and DOE time and attendance sheets, showing that some charges made in his hometown with his government credit card were made on dates that he was out of town on travel. He also referred to these vouchers and attendance records to support his claim that some out-of-town charges were made while he was at home. He further alleged that he did not take some cash advances that were attributed to his government credit card. Individual's Exhibit 4(a). The total amount of the allegedly improper charges was approximately $11,900. The individual argued that had he not been attempting to pay his full government credit card bill, including the unauthorized charges, and had he instead paid his personal credit card bills and other debts, he might not have been forced into bankruptcy. Tr. at 91.

The Hearing Officer found that the individual himself may not have charged the relevant items noted on the monthly government credit card statement. However, the Hearing Officer did not believe that the individual was not in any way involved in authorizing or allowing the charges to be made. Since the individual did not come forward with information to corroborate his position that the charges were fraudulent, the Hearing Officer found the individual's explanation insufficient.

Similarly, the individual stated that some Automatic Teller Machine (ATM) withdrawals were made from banks in his hometown while he was out of town. The Hearing Officer also found this argument lacking any support. Specifically, she stated that there is no evidence for the individual’s basic premise that ATM withdrawals could have been made without using an ATM card. She did not find credible the position advanced here that ATM withdrawals were made without the use of the card and without the individual’s knowledge or consent.

The Hearing Officer also did not find credible the individual’s contention that he did not notice the supposedly unauthorized charges when they appeared on his monthly statements. The Hearing Officer could not believe that the individual failed to review his monthly credit card statements, notice the allegedly improper charges and register the appropriate complaints with the credit card company.

Further, in a Personnel Security Interview, the individual stated that prior to becoming delinquent on the credit card in 1998, he “always kept track with [American Express], I always called American Express to find what my balance was.” PSI Tr. at 36. Based on his assertion that he generally monitored his credit card bills, the Hearing Officer did not accept that he suddenly was unaware of large unfamiliar expenses charged to his account.

As a further matter, there was testimony by the secretary for the individual’s section that the individual on several occasions complained to her that he was being billed for charges made by another DOE employee with the identical surname. Tr. at 66. Given this testimony, the Hearing Officer believed that the individual was already especially vigilant about his credit card bills. Thus, the Hearing Officer simply did not believe that the individual paid no attention to his credit card statements, and was totally ignorant of the thousands of dollars of unauthorized charges. The Hearing Officer believed that the individual's behavior suggested a lack of responsibility and reliability about financial matters and that this constituted a further concern under Criterion L.

In summary, the Hearing Officer found that the individual did not bring forward information to persuade her that legitimate financial hardship caused his bankruptcy. She also could not find that the individual demonstrated a new pattern of financial responsibility that mitigated the serious concerns associated with his financial behavior. Since the individual declared bankruptcy only eight months before the hearing, the Hearing Officer found that there was not a sufficient period of time for her to conclude that the individual had shown a sustained, responsible financial pattern from which she could determine that recurrence of his past behavior is unlikely.

Moreover, the Hearing Officer found that the individual had not brought forward any significant evidence demonstrating that he would be able to manage his finances in the future. The Hearing Officer did not believe the individual's stated intention to maintain a sensible budget and to avoid the use of credit cards in the future. In fact, the Hearing Officer stated that the individual indicated at the hearing that he had recently acquired a new credit card, charged with the amount of $300. He stated that this credit card was being used solely to finance a set of instructional video tapes on the subject of managing personal finances. Tr. at 109. The Hearing Officer stated that she was troubled that so soon after declaring bankruptcy and stating that he would no longer use credit cards, the individual had once again turned to the use of credit. She found an unfortunate resumption of the individual's previous pattern of making purchases through credit, rather than finding solutions that do not involve credit.

As further evidence of financial responsibility, the individual stated that he intended to repay the bankruptcy debts. There was also some evidence that the individual continued to make car payments on two vehicles. Individual's Exhibit 5. He also indicated his intent to continue payments on some other household items. However, since the Hearing Officer determined that the vehicles and other items would have been repossessed as part of his bankruptcy proceeding had he not agreed to continue making payments, she did not believe that the individual's stated intention of repayment in and of itself constituted significant evidence of financial responsibility through debt repayment. All in all, the Hearing Officer determined that the individual had not shown that he had achieved financial stability or demonstrated responsibility with respect to his personal finances.

C. Improper Use of Travel Reimbursement Monies

The Notification Letter indicated that the individual improperly used funds remitted to him as reimbursement for government-related travel expenses. This allegation was based in part on the fact that at the time of the bankruptcy, there was an unpaid balance of approximately $7,000 charged to the credit card. The individual admittedly used travel reimbursement money to pay for personal expenses. PSI Tr. at 50, 53. The individual explained that on some occasions he paid the credit card expenses with his own funds and then reimbursed himself with the government monies. Tr. at 75- 76; PSI Tr. at 60-62. Based on the sizable unpaid credit card bill, the Hearing Officer believed that the individual did not use either the reimbursement funds or his own funds to pay the credit card bill. She found that this disregard for the debt indicated financial irresponsibility and constituted a security concern.

In summary, the Hearing Officer found significant derogatory information in the possession of the DOE that raised serious concerns under Criterion L as to the eligibility of the individual for access authorization. In addition, since the Hearing Officer found that the individual failed to bring forth sufficient evidence to mitigate these security concerns, she determined that she was unable to conclude that restoring the individual's access authorization would not endanger the common defense and security and would be clearly consistent with the national interest. Accordingly, the Hearing Officer recommended that the DOE not restore the individual’s access authorization.

III. Analysis

A. Standard of Review

Part 710 provides that if, after considering all the factors in light of the relevant criteria, the OHA Director is of the opinion that it will not endanger the common defense and security and will be clearly consistent with the national interest to grant or continue access authorization to an individual, he shall render an opinion favorable to the individual; otherwise, he shall render an opinion adverse to the individual. 10 C.F.R. § 710.28(d). As discussed below, after reviewing the record in this case, I cannot conclude that restoring the access authorization of the individual would be clearly consistent with the national interest.

Generally, I will not set aside findings of fact made by a hearing officer in these types of cases unless they are clearly erroneous. See Personnel Security Review (Case No. VSA-0049), 25 DOE ¶ 83,002 at 86,512 (1995). In rendering findings of fact, a hearing officer considers the demeanor and credibility of witnesses, and the appropriate weight given to their testimony and other evidence. Therefore, I will not ordinarily supplant my judgment for that of a hearing officer in such matters.

B. The Individual’s Statement of Issues

In his Statement of Issues, the individual argues that the Hearing Officer erred when she found that he had not sufficiently mitigated the DOE’s security concerns in this case. In particular, he challenges many of the Hearing Officer's factual findings because he believes that the Hearing Officer overlooked or did not seriously consider many facts. Throughout the individual's statement of issues, he merely disagrees with the Hearing Officer's conclusions, but has not provided any convincing evidence to support his position. For the reasons presented below, I find that the individual has not demonstrated that the Hearing Officer’s findings are erroneous.

1. Use of the Credit Card for Personal Matters

The individual admits using his government credit card for personal use, but only under extenuating circumstances. I believe the Hearing Officer carefully considered all of the individual's alleged extenuating circumstances in making her findings on the individual's personal use of a government credit card. With regard to the individual's short term move to a motel and use of his government credit card to pay for this stay, the Hearing Officer was clearly aware that the individual moved to the motel because of a volatile situation at home. Moreover, she was also concerned that the individual admitted that he "did not stop to think . . . could I" use the government credit card for this motel stay. Id. This statement further called into question the individual's reliability and trustworthiness when faced with adverse circumstances. Given that the Hearing Officer included these factually detailed circumstances in her opinion, I find that the Hearing Officer carefully reviewed the individual's alleged extenuating circumstances in his personal use of a government credit card.

At the hearing, the individual proposed the use of his own funds, through the use of a debit card, to pay for his government travel. Tr. at 109. However, the Hearing Officer found that the individual was unable to maintain a stable and sufficient bank account necessary for the use of his own funds. February 26 Opinion at 85,776. The individual argues in his appeal that if he was able to resume traveling on government business, he would have the overtime pay necessary to create a "solid bank account" to pay for all of his government travel.

Simply because the individual believes that if he were traveling, he would have the overtime pay necessary to create a "solid bank account" does not change the Hearing Officer's primary concern: that the individual has not demonstrated the ability to maintain a stable bank account over a sufficient length of time. Merely having the financial wherewithal to create a "solid bank account" is not the only factor to be considered in predicting whether the individual can avoid credit problems in the future. In this case, the individual has not shown in any way that he is capable of maintaining sufficient financial resources to allow him to use his own personal funds for government travel

2. Bankruptcies

The individual believes the Hearing Officer did not consider many facts in making her findings regarding his latest bankruptcy. He acknowledges that he filed for bankruptcy twice in an eight-year period, but states that these are "perfectly legal" acts. Furthermore, he contends that almost all those in his profession rely heavily on overtime and that recruits are told in training that almost two-thirds of their annual income will be overtime pay. In support of this contention, the individual relied on a report submitted at the hearing.

The individual states that bankruptcies are "perfectly legal" acts with the implication that the Hearing Officer penalized him for having declared bankruptcy. This contention misses its target. The Hearing Officer never stated that filing for bankruptcy was illegal, and she did not penalize the individual for simply filing for bankruptcy. Instead, the Hearing Officer's analysis of the individual's overall financial situation focused on more telling facts in the individual's life. What the Hearing Officer considered, and in great detail, was whether the individual brought forward persuasive evidence showing that a legitimate financial hardship caused his two bankruptcies. February 26 Opinion at 85,776. She concluded that he had not. Instead, she noted the apparent causal relationship between the individual's behavior and his resultant bankruptcies. She also stated that the individual's lack of overtime pay, and his financial assistance to a parent, including a time that the individual could not travel due to a failed physical exam, were not "so severe as to result in bankruptcy." February 26 Opinion at 85,777.

Now the individual contends that he provided even more financial assistance to his mother than his mother's testimony indicated. See Tr. at 37-41; February 26 Opinion at 85,777. However, he has not provided any proof of his contention in the form of receipts, canceled checks or a monthly accounting. Without any evidence to support his revised estimate or even a total amount of money that he provides his mother, I have no basis upon which I would disturb the Hearing Officer's findings with respect to the level of financial hardship he was experiencing.

I have also carefully reviewed the report the individual relies on in his appeal. It states that those in his profession rely on overtime pay to improve their economic condition. I find that it confirms this general contention. However, this fact alone does not prove that the individual's lack of overtime pay caused his bankruptcy, especially since this report was already a part of the record before the Hearing Officer. The individual has not presented any evidence that the Hearing Officer did not already fully consider in making her decision. In fact, in making her findings, the Hearing Officer noted that the individual anticipated "dry periods" without overtime pay during the six months he was actually without overtime pay. February 26 Opinion at 85,777. Ultimately, the Hearing Officer did not believe the individual's explanations for his second bankruptcy. I believe the Hearing Officer's opinion reflects the fact that she observed the demeanor and credibility of the witnesses and reviewed the available evidence. Her finding was not that the individual was not experiencing financial difficulties, but that the individual failed to plan for and adapt adequately to his changed financial circumstances.

I have carefully reviewed the documents the individual submitted concerning the ATM withdrawals. The DOE time sheets and charge card receipts show that there are instances where ATM withdrawals occurred in locations far away from the individual's actual location. The individual seems to believe that this information actually helps his case. To me it shows that possible irregularities were occurring on his account, and that he was negligent in monitoring his own finances in not calling for an investigation sooner. There is testimony in the record that the individual believed that he had been mistakenly charged for items that he should not have been charged for. Tr. at 66. The response of a reasonably prudent individual to these circumstances would have been to take immediate action. I am not at all convinced by the individual's attempt in this request for review to shift responsibilities for his own financial irresponsibility to other, unnamed persons. Unauthorized use of his own ATM card, if it occurred, was primarily his problem, not the Department of Energy's problem.

Further, I note on the basis of the present record that the individual may well have authorized others to use his card and benefited from the results. To dispel doubts like these, the individual should have come forward with more evidence, not just speculation. Like the Hearing Officer, I find that there is simply not enough evidence for me to believe that the individual did not have some knowledge of these ATM charges.

In response to another of the Hearing Officer's findings, the individual states that he did not "keep a close eye" on which charges on his credit card statement were actually his charges and which were not his. The individual’s testimony at the hearing allowed the Hearing Officer to see that the individual was likely aware of allegedly unauthorized charges totaling $1,300 and that the individual should have noticed these large unfamiliar charges to his account. The individual has not provided any evidence that would lead me to find credible his position that he failed to notice these significant charges simply because he did not "keep a close eye" on them. The charges in this case involved unreliability and financial irresponsibility, and the individual's argument that he was inattentive is no help to him at all in attempting to rebut those charges.

The individual also states that it should not matter that he pursued bankruptcy through a bankruptcy lawyer and not through the DOE's Employer Assistance Program. He states that the DOE's Employer Assistance Program was only able to offer him help in filing a Chapter 13 bankruptcy petition when his "only recourse" was to file a Chapter 7 bankruptcy.

The individual misunderstands the Hearing Officer's findings. The Hearing Officer did not state that the individual's decision to use a bankruptcy lawyer affected her decision on the issue of the individual's alleged financial irresponsibility. The Hearing Officer only mentioned the DOE's Employer Assistance Program as an example of a free financial counseling service that the individual might have availed himself of soon after declaring bankruptcy rather than what he actually chose to do: acquire a new credit card and charge $300 to finance a set of instructional video tapes on the subject of managing personal finances. It bothered the Hearing Officer that the individual resumed his previous pattern of making purchases through credit rather than finding solutions that do not involve credit. I believe this was a logical concern regarding the individual's behavior. Accordingly, I find that the Hearing Officer did not hold the fact that he chose to pursue bankruptcy through a bankruptcy lawyer against the individual in her decision.

The Hearing Officer carefully considered whether the individual had shown the ability to manage his finances since his bankruptcy. She found that the individual had not shown, through his assertions of his intent to repay his debts or his actions since his bankruptcy declaration, that he had demonstrated financial responsibility. Since the individual has not presented any additional evidence on this matter, I find that the individual has not demonstrated the ability to repay his debts.

3. Other Issues

The individual states that at the close of the hearing, "it was decided that closing statements and any further rebuttals would be heard via a conference call between all concerned parties." He contends that the conference call never took place and that his lawyer mailed in his closing statements. Finally, the individual states that he has "something to contribute to the safety and security and the common defense of this nation" and that he is no more of a security risk than others.

In carefully reviewing these allegations and the record before me, I find that the individual is confused about the "closing statements" he alleges the Hearing Officer dictated at the hearing would be made via a conference call. The hearing transcript indicates that the Hearing Officer never discussed on the record the issue of allowing post hearing "closing statements" by teleconference. If she had, that would have been highly unusual. Even if the individual could show that the hearing officer had stated that she would conduct a teleconference for closing statements, the individual has not shown how mailing the closing statements has in any way prejudiced his case. Those statements have been carefully considered at each level of review.

IV. Conclusion

The individual contends that he is no more of a security risk than others. However, the individual has not convinced me that this is the case. As stated above, I will not ordinarily supplant my judgment for that of a hearing officer in rendering findings of fact when the hearing officer has considered the demeanor and credibility of witnesses, and determined the appropriate weight to be given their testimony and other evidence. Nor has the individual convinced me with his arguments in his request for review that any error in fact or law occurred. After considering all of the facts in the record, I cannot conclude that allowing the individual continued access authorization will not endanger the common defense and security and that it will be clearly consistent with the national interest.

The regulations specify that within 30 days of receipt of this opinion, the Director, Office of Security Affairs, will make a final determination regarding restoration of the individual's access authorization based upon a complete review of the record. 10 C.F.R. § 710.28(e). The Director, Office of Security Affairs, shall through the Director, Office of Safeguards and Security, inform the individual in writing of the final determination, and provide a copy of the present opinion. The Director of the Office of Security Affairs should provide copies of the correspondence to the Director, Office of Hearings and Appeals; the Manager of the DOE office; DOE counsel; and any other interested party. In the event of an adverse determination, the correspondence shall indicate findings by the Director, Office of Security Affairs, with respect to each allegation contained in the Notification Letter. 10 C.F.R. § 710.28(f).

George B. Breznay

Director

Office of Hearings and Appeals

Date: June 25, 1999