Case No. VSO-0069, 25 DOE ¶ 82,795 (H. O. Lazarus Mar. 15, 1996)
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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 XXXXX's.
DEPARTMENT OF ENERGY
OFFICE OF HEARINGS AND APPEALS
Hearing Officer's Opinion
Case Name: Personnel Security Hearing
Date of Filing: November 7, 1995
Case Number: VSO-0069
This Opinion considers the continued eligibility of XXXXX (hereinafter referred to as "the individual") to hold a level "L" 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." As explained below, it is my opinion that the individual's access authorization should be restored.
I. STATEMENT OF THE CASE
On October 11, 1995, the Department of Energy's XXXXX Office (DOE/XXXXX) issued a Notification Letter to the individual which charged that she had engaged in unusual conduct or was subject to circumstances that tend to show that she is not honest, reliable or trustworthy within the meaning of 10 C.F.R. § 710.8(l) (Criterion L). In support of this charge, the Notification Letter states, inter alia, that the individual had not filed Federal and state tax returns for the years 1992 through 1994.
The individual requested a Hearing regarding her access authorization on October 30, 1995. A Hearing was held before the undersigned Hearing Officer on XXXXXXXXXXXXXXXX.
At the Hearing, DOE/XXXXX presented the testimony of a security specialist, XXXXXXXXXXXXXXXXXXXX. The individual, who was represented by counsel, testified on her own behalf and presented no other witnesses.
II. FINDINGS OF FACT
There are no substantial disputes concerning the material facts in this case. The individual admits that she failed to file Federal and state tax returns for the years 1992-1994 until shortly before the Hearing. DOE/XXXXX does not dispute that the tax returns which were filed before the Hearing indicate that the individual lost money as a result of her involvement with XXXXXXXXXXXXXXXXXX and that the Federal and state governments owed the individual tax refunds. Nor does DOE/XXXXX dispute the individual's version of the circumstances surrounding the failure to file these tax returns on time.
A. Background
Until her security clearance was suspended, the individual had been employed by XXXXXXXXXXXX in the XXXXX years. The individual had served as a secretary to thirteen engineers. Transcript of January 24, 1996 Hearing at 60 ("Transcript"). There is no evidence of any significant problems with the individual's performance at work. Transcript at 61. The individual raised two children by herself and is now caring for an elderly uncle who has been debilitated by a stroke. Transcript at 58-59. In addition to her employment as a secretary, the individual also sold, and continues to sell, XXXXXXXXXXXXXXXXXX. Transcript at 62.
B. The Investigation by DOE/XXXXX
The investigation which led to the suspension of the individual's security clearance was precipitated by the individual's arrest for disorderly conduct and resisting arrest on February 12, 1995. This arrest occurred in connection with an incident involving the alleged beating of the individual's son by the police.<1>
The day after her arrest, the individual reported the incident to DOE/XXXXX. Transcript at 31 and 65. In response to the individual's report of her arrest, DOE/XXXXX requested that the United States Office of Personnel Management conduct a field investigation of the individual. Transcript at 16. The field investigation report indicated that there were conflicting versions of the circumstances surrounding the individual's arrest and that the individual also had some credit card delinquencies. Transcript at 17.<2>
Personal Security Interviews (PSIs) with the individual were conducted on June 1, 1995 and September 6, 1995. During these PSIs, the individual admitted that she had not filed her state and Federal taxes for 1992, 1993 and 1994. Transcript at 17-18 and 23. During the June 1, 1995 PSI, the individual stated that she was planning on filing her state taxes "within the next couple of months." DOE Exhibit 1 at 20.
On October 11, 1995, DOE/XXXXX issued a Notification Letter to the individual which charged that she had engaged in unusual conduct or was subject to circumstances that tend to show that she is not honest, reliable or trustworthy within the meaning of 10 C.F.R. § 710.8(l) (Criterion L). In support of this charge, the Notification Letter states that the individual admitted that she (1) had not filed Federal and state tax returns for the years 1992 through 1994; and (2) had not reported revenue from the sale of XXXXXXXXXXXXXXXXXXto the Federal and state governments for the years 1992 through 1994.
C. The Circumstances Surrounding the Individual's Failure to File Timely Tax Returns
The individual explained her failure to file her tax returns in a timely fashion by stating that she had sold XXXXXXXXXXXXXXXXXX during this period and was a poor record-keeper. Transcript at 79. She indicated that she had problems collecting and organizing the financial information and needed help to complete the tax forms. Transcript at 93. The individual further indicated that she had been unable to contact the person who had previously assisted her with the preparation of her tax returns. DOE Exhibit 1 at 20. At the time that the tax returns were due, the individual believed that she did not owe the government any money. Transcript at 37, 80.
After the June 1, 1995 PSI, the individual took steps to organize her financial records so that she could file her past due returns. Transcript at 92-93. In October of 1995, the individual took her financial records to a person who she retained to assist with the preparation of her tax returns. Transcript at 91-92. The individual filed all of her past due tax returns shortly before the Hearing. Transcript at 97.
On these returns, the individual reported that she lost money on her XXXXXXXXXXXXXXXXXX business for the years 1992 through 1994. Both the state and Federal government owed the individual money for each of the years in question. Transcript at 83-85; Defendant's Exhibits 5A, 6, 7.
Neither the state nor the Federal government has filed criminal charges against the individual in connection with her failure to file tax returns in accordance with the legal deadlines. Indeed, the individual testified that the only communication concerning her overdue tax returns that she received from the Internal Revenue Service was a preprinted pamphlet indicating that it was still not too late for her to file these returns. Transcript at 83.
During the Hearing, the individual indicted that she was in the process of preparing her tax returns for 1995 and that those returns will be filed before they are due. Transcript at 86. The individual stated that she is strongly motivated to file the 1995 tax returns on time because the past three years "put me through hell." Transcript at 86. The individual also indicated that as a result of preparing her tax returns for the years 1992 through 1994, she has learned how to compile the necessary financial information. Transcript at 86. The individual also testified that she would either stop selling XXXXXXXXXXXXXXXXXX so that she would "not have to go through this again" or retain a bookkeeper to assist her with her record-keeping. Transcript at 98. Based on this testimony and the individual's demeanor at the Hearing, I find that the individual is sincere in her regret and her desire to comply with the tax laws in the future.
The individual further testified that she had no problem securing classified documents at work. During the XXXXX that the individual was employed by XXXXX, she was cited for only a few minor security infractions. Transcript at 62. The last citation for a security infraction was more than ten years ago. Transcript at 100. The individual stated that her supervisors had never complained about her ability to secure such documents. The individual distinguished the classified documents at work from the XXXXXXXX records on the grounds that the XXXXXXXX records are less important than classified documents. Transcript at 99-100.
DOE/XXXXX did not contest that the individual had no problems securing classified documents at work. Further, DOE/XXXXX admitted that the prior minor security infractions for which the individual had been cited were not relevant to the revocation of the individual's security clearance. Transcript at 103.
III. ANALYSIS
A. The Legal Standard
The regulations state that "[t]he decision as to access authorization is a comprehensive, common-sense judgment, made after consideration of all the relevant information, favorable or unfavorable, as to whether the granting of access authorization would not endanger the common defense and security and would be clearly consistent with the national interest." 10 C.F.R. § 710.7(a). In order to restore the individual's security clearance, I must find that restoring this access authorization "would not endanger the common defense and security and would be clearly consistent with the national interest." 10 C.F.R. § 710.27(d).
In making a determination in this case, I will consider the relevant factors and circumstances connected with the individual's conduct. These factors, which are set forth at 10 C.F.R. § 710.7(c), include "the nature, extent, and seriousness of the conduct; the circumstances surrounding the conduct, to include knowledgeable participation; the frequency and recency of the conduct; the age and maturity of the individual at the time of the conduct; the voluntariness of participation; the absence or presence of rehabilitation or reformation and other pertinent behavioral changes; the motivation for the conduct; the potential for pressure, coercion, exploitation, or duress; [and] the likelihood of continuation or recurrence ...."
B. The Individual's Clearance Should be Restored
I have examined the evidence in light of the requirements of Part 710 and assessed the credibility and demeanor of the witnesses who gave testimony at the Hearing. After this examination, I am recommending that the individual's security clearance be restored.
The failure to file timely state and Federal tax returns is a very serious matter. See Personnel Security Hearing, VSO-0048, 25 DOE ¶ 82,776 at 85,677 (1995) (appeal pending); Personnel Security Hearing, VSO-0061, 25 DOE ¶ _____ (February 13, 1996). Any potentially criminal conduct raises serious security concerns because the willingness to follow laws and regulations is a strong indication of the trustworthiness of the individual. In order to determine whether a clearance should be revoked, the circumstances surrounding the alleged criminal conduct must be examined very carefully.
In this case, I find that the circumstances surrounding the late filing of these tax returns do not require that the individual's clearance be revoked. I make this finding based on the individual's demeanor at the Hearing and the circumstances of this case. The individual is honest. She voluntarily disclosed to DOE/XXXXX that she had been arrested and did not seek to hide that she had not filed her state and Federal tax returns. The individual's failure to file the tax returns on time was not motivated by personal gain as both the state and the Federal government owed her money. The individual's explanation of the reasons that she was late filing these returns is also credible. She did not exaggerate or blame others. She simply indicated that she was overwhelmed by the records which were generated by her XXXXXXXXXXXXXXXXXX business.
The individual did not seek to violate the law. The failure to file was a result of the individual's inability to organize her financial records and complete her tax forms. These circumstances indicate that the individual had not been motivated by an intention to challenge or defy Federal or state law. See Personnel Security Hearing, VSO-0061, 25 DOE ¶ _____ (1996) (Intentional failure to file tax returns.)
Moreover, the individual is reliable and trustworthy at work and in her private life. She had worked for XXXXXXXXXXXX in the XXXXXXXXXXXXXXX Division for 27 years. There is no evidence of any significant problems with her work performance. The uncontested testimony at the Hearing indicates that she has no problems securing classified documents at work. She has raised two children by herself and is presently caring for an elderly uncle who has been debilitated by a stroke.
Further, it appears that the individual is rehabilitated or reformed. The individual has filed her overdue tax returns. See DISCR OSD Case No. 94-0180 (June 28, 1994) (Applicant for security clearance who filed all overdue Federal and state tax returns held to have rectified his criminal conduct.) Moreover, the individual is preparing her tax returns for 1995 and has indicated that these returns will be filed on time. The individual intends either to stop selling XXXXXXXXXXXXXXXXXX or to obtain a bookkeeper to insure that she is able to file her tax returns on time in the future. There is no indication that the conduct will be repeated. As such, this case is distinguishable from our previous cases. See Personnel Security Hearing, VSO-0048, 25 DOE ¶ 82,776 at 85,677 (1995) (appeal pending) (No attempt made to file delinquent returns or mitigate financial irresponsibility); Personnel Security Hearing, VSO-0061, 25 DOE ¶ _____ (1996) (No evidence of rehabilitation or reformation and the IRS was required to pursue enforcement action for delinquent taxes).
DOE/XXXXX contends that the individual is not rehabilitated because she waited until after her clearance was suspended to file these tax returns. Given the circumstances of this case, this argument is not persuasive. Here, the individual did not fail to file her tax returns on time because of a desire for personal gain or an intent to defy the law. Rather, the individual was late filing her tax returns because she had problems organizing her personal business records and completing the forms. The fact that the individual did not overcome these problems until after her clearance was suspended simply implies that it took the individual a long time to gain control over the situation.
IV. CONCLUSION
In view of the criteria set forth in 10 C.F.R. Part 710, I find that restoring the individual's access authorization would not endanger the common defense and security and would be consistent with the national interest. In failing to file her tax returns on time, the individual was not motivated by personal gain or an intention to challenge the normal operation of the tax laws. Rather, her late filing was due to her inability to organize her personal business records and complete the required forms without assistance. Further, she has taken steps to ensure that her tax returns are filed timely in the future. Based on these circumstances and her demeanor at the Hearing, I find that the individual sincerely regretted her past behavior and strongly desires to comply with the tax laws in the future.
As such, I find that the individual is reformed and will try not to repeat this conduct. These factors indicate that the restoration of the individual's clearance would not pose an unacceptable risk to the national security. It is therefore my opinion that the individual's level "L" access authorization should be restored.
The regulations governing this proceeding provide that either the DOE's Office of Security Affairs or the individual may file a request for review of this Opinion. 10 C.F.R. § 710.28(a). The request must be filed within thirty calendar days of receipt of this Opinion. Within fifteen calendar days of filing such a request, the requesting party must file a statement specifying the issues upon which it seeks review. The other party may file a response to the statement of issues. It must do so within twenty calendar days of receipt of the statement of issues.
All submissions must be filed with the Director, Office of Hearings and Appeals, 1000 Independence Avenue, S.W., Washington, D.C. 20585-0107. In addition, a party must send a copy of each of its submissions to the other party.
Linda Lazarus
Hearing Officer
Office of Hearings and Appeals
Date: March 15, 1996
<1> The criminal charges are still pending and the individual has commenced a civil action against the police department for violation of constitutional rights and police brutality arising out of the same incident. Transcript at 74.
At the Hearing, the individual contended that her clearance was suspended because of the arrest and not because of the failure to file tax returns. She further contended that the allegations concerning her failure to file tax returns were merely a pretext. Transcript at 67-68. Because I recommend that the individual's clearance be reinstated, it is not necessary to address these contentions.
<2> At the Hearing, Mr. XXXXXXXXX testified that the individual's financial situation did not demonstrate a pattern of financial irresponsibility and that the circumstances surrounding the arrest probably do not warrant the suspension of her security clearance. Transcript at 23 and 52. These matters were not included in the Notification Letter.