Case No. VSO-0108, 26 DOE ¶ 82,764 (H.O. Wieker Dec. 3, 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.

December 3, 1996

DEPARTMENT OF ENERGY

OFFICE OF HEARINGS AND APPEALS

Hearing Officer's Opinion

Name of Case: Personnel Security Hearing

Date of Filing: August 12, 1996

Case Number: VSO-0108

This Opinion concerns the eligibility of XXXXXXXXXXXXXXXXXXXXXXXX (hereinafter "the individual") for an access authorization. The regulations governing the individual's eligibility are set forth at 10 C.F.R. Part 710, "Criteria and Procedures for Determining Eligibility for Access to Classified Matter or Special Nuclear Material." This opinion will consider whether, based on the testimony and other evidence presented in this proceeding, the individual is eligible for access authorization.

I. Procedural Background

This administrative review proceeding was commenced by the issuance of a Notification Letter to the individual on June 12, 1996. The Notification Letter stated that information in the possession of the Department of Energy (DOE) office responsible for determining the individual's eligibility for access authorization (the DOE office) created a substantial doubt concerning that eligibility. The Notification Letter stated that the information indicated a pattern of financial irresponsibility, a security concern under 10 C.F.R. § 710.8(l) (Criterion L). In addition, the Notification Letter stated that the information indicated that the individual deliberately provided false information to the DOE on various DOE forms and in the Personnel Security Interview (PSI), a security concern under 10 C.F.R. § 710.8(f) (Criterion F).

On July 3, 1996, the individual requested a hearing. The DOE office forwarded the request to the Office of Hearings and Appeals (OHA). On August 14, 1996, I was appointed the Hearing Officer in this matter. I advised the individual, in a September 3, 1996 letter and during the pre-hearing conference, that she had the burden of providing evidence to mitigate the security concerns specified in the Notification Letter. In accordance with 10 C.F.R. § 710.25(e) and (g), a hearing was held. The Hearing Transcript will be cited as "Hr. Tr. at ___."

Three witnesses testified at the hearing. Two witnesses were called by the DOE office. The first was a DOE security specialist. The second was a personnel security official. The individual testified on her own behalf.

II. Standard of Review

Administrative review is authorized when the existence of derogatory information leaves unresolved questions about an individual's eligibility for access authorization. A hearing is "for the purpose of affording the individual an opportunity of supporting his eligibility for access authorization." 10 C.F.R. § 710.21(b)(6).

In an administrative review proceeding, the burden is on the individual to come forward with testimony or evidence to convince the Hearing Officer that 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). This standard is designed to protect the national interest and, therefore, differs from the standard applicable to a criminal case in which the burden is on the government.

A decision concerning eligibility for access authorization is based on a consideration of all relevant information. The regulations provide:

The 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 considering an individual's eligibility for access authorization, DOE officials are required to take into account

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 the 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; the likelihood of continuation or recurrence; and other relevant and material factors.

10 C.F.R. § 710.7(c). Thus, the regulations provide for a full consideration of any mitigating circumstances that an individual might present.

III. Substantive Regulatory Criteria At Issue

The Notification Letter cites derogatory information under two regulatory criteria: Criterion L and Criterion F.

Derogatory information under Criterion L is information that indicates that the individual has:

Engaged in any unusual conduct or is subject to any circumstances which tend to show that the individual is not honest, reliable, or trustworthy; or which furnishes reason to believe that the individual may be subject to pressure, coercion, exploitation, or duress which may cause the individual to act contrary to the best interests of the national security. Such conduct or circumstances include, but are not limited to, criminal behavior, a pattern of financial irresponsibility, or violation of any commitment or promise upon which the DOE previously relied to favorably resolve an issue of access authorization eligibility.

10 C.F.R. § 710.8(l).

Derogatory information under Criterion F is information that indicates that the individual has

Deliberately misrepresented, falsified, or omitted significant information from a Personnel Security Questionnaire, a Questionnaire for Sensitive Positions, a personnel qualifications statement, a personnel security interview, written or oral statements made in response to official inquiry on a matter that is relevant to a determination regarding eligibility for DOE access authorization, or proceedings conducted pursuant to § 710.20 through § 710.31.

10 C.F.R. § 710.8(f).

IV. Factual Background

The facts leading to the security concerns expressed in the Notification Letter are not in dispute. The facts concern indebtedness and financial delinquencies, as well as inaccurate statements on DOE forms and during the PSI. The transcript of the PSI will be cited as "PSI Tr. at __."

A. Indebtedness and Delinquencies

The individual and her husband did not make timely payment of their federal income taxes for the years 1986, 1987, 1992, 1993, and 1994. The Internal Revenue Service (IRS) obtained judgments for the years 1986 and 1987, and filed a tax lien for the years 1992 and 1993. As of February 1996, the individual and her husband still owed the IRS approximately $20,000 for the years 1992 through 1994.

The individual, or the individual and her husband, had seven judgments entered against them during the period 1990 through 1994. These judgments concerned indebtedness for consumer purchases, medical expenses, and a delinquent line of credit. The individual did not satisfy these judgments. Instead, the debts were discharged in a 1994 bankruptcy proceeding, discussed below.

In 1990, the individual was convicted of a misdemeanor for writing a bad check. The individual recalls two occasions, one about ten years ago, the other about three years ago, in which she wrote bad checks. PSI Tr. at 87.

The individual has been delinquent on other obligations. The individual repeatedly failed to make timely payment of her car insurance premiums, which resulted in repeated lapses of her car insurance. PSI Tr. at 35, 79-85. At the time of the PSI, the individual was delinquent on a car loan. Id. at 35.

The individual or the individual and her husband sought relief in bankruptcy court on three occasions: in 1985, 1994, and 1995. PSI Tr. at 56-60.<1> The 1985 and 1994 proceedings were Chapter 7 proceedings in which non-secured debt was discharged; the 1995 proceeding was a Chapter 13 proceeding, which required the individual and her husband to make payments to the court. The individual and her husband withdrew from the Chapter 13 proceeding, citing the required payments as being too high.

During the ten year period in which the foregoing events occurred, the individual, or the individual and her husband, incurred expenses which included the following. Shortly before or after the 1985 bankruptcy, the individual and her husband took out a second mortgage loan to finance the construction of a $20,000 backyard swimming pool. PSI Tr. at 72-73. In October 1994, one month before filing for bankruptcy, the individual financed the purchase of a new car. Id. at 14, 46.

B. Inaccurate Statements in DOE Forms and During the PSI

The individual provided inaccurate information in two Applications for Federal Employment (SF171s), a Questionnaire for Sensitive Positions (SF86), and a PSI. In all but one instance, the inaccurate information related to the facts set forth above.

1. IRS Delinquencies

The individual stated on her June 1994 SF171 and her November 1994 SF86 that she did not have any delinquent federal debts. Question 44 of the June 1994 SF171 asked:

Are you delinquent on any Federal debt? (Include delinquencies arising from Federal taxes, loans, overpayment of benefits, and other debts to the U.S. Government plus defaults on Federally guaranteed or insured loans such as student and home mortgage loans.)

Question 27b of the November 1994 SF86 asked:

Are you now over 180 days delinquent on any loan or financial obligation? Include loans or obligations funded or guaranteed by the Federal Government. ...

The individual answered "no" to the above questions, despite the fact that, at the time, the individual was delinquent in the payment of her taxes for the years 1992 and 1993.

2. Tax Liens and Judgments

The individual also failed to disclose on her November 1994 SF86 the tax liens and judgments entered against her. Question 27a asked:

In the last five years have you or a company over which you exercised some control, filed for bankruptcy, been ordered bankrupt, been subject to a tax lien, or had legal judgment rendered against you for a debt? If you answered "Yes" provide date of initial action and other information requested below.

The individual answered "Yes," listed the 1994 bankruptcy but failed to list the tax liens and judgments.

3. Misdemeanor Conviction

The individual stated on her June 1992 and June 1994 SF171s and her November 1994 SF86 that she had not been convicted of any crime. Question 42 of the June 1992 and June 1994 SF171s asked:

During the last 10 years have you forfeited collateral, been convicted, been imprisoned, been on probation, or been on parole? ...

Question 23e of the November 1994 SF86 asked:

In the last 5 years, have you been arrested for, charged with, or convicted of any offense(s) not listed in response to a, b, c, or d above? (Leave out traffic fines of less than $100.)

During the PSI, the individual was asked if she had ever been arrested or charged for passing bad checks. PSI Tr. 86, 87. The individual answered "No" to the foregoing questions, despite the existence of the 1990 misdemeanor conviction for writing a bad check. Id.

4. Educational Achievement

Finally, the individual stated in Item 28 of her June 1994 SF171 and Item 10 of her November 1994 SF86 that she had received an associate of arts degree. In her PSI, she stated that she believed that she had a degree, but was not sure. PSI Tr. at 9-11, 89. The investigation revealed that the college in question has no record of her attendance and did not hold classes during the period of claimed attendance.

V. Analysis

A. Criterion L Concerns

1. Derogatory Information

Security concerns under Criterion L relate to whether an individual has engaged in unusual conduct which tends to show he "is not honest, reliable or trustworthy" or that he "may be subject to pressure, coercion, exploitation, or duress" which may cause the individual to act contrary to the national interest. Criterion L specifies that such conduct includes "a pattern of financial irresponsibility," 10 C.F.R. § 710.8(l), which is therefore a very serious security concern, see, e.g., Personnel Security Hearing, VSO-0081, 25 DOE ¶ 82,805 at 85,853 (1996).

As discussed above, the individual has not disputed the existence of the indebtedness and delinquencies cited in the Notification Letter. These problems are not trivial ones, they span 10 years and, therefore, they indicate "a pattern of financial irresponsibility" under Criterion L.

Given the undisputed nature of the derogatory information, there are two ways in which the individual can attempt to mitigate the security concerns. The first is by providing evidence of additional facts to establish that her past behavior was not financially irresponsible. The second is by providing evidence of rehabilitation.

2. Whether Mitigating Circumstances Exist

a. The individual's assertions

With respect to the past ten years, the individual asserts that she was financially responsible, except perhaps with respect to the purchase of the swimming pool and some other smaller expenditures for clothing and travel. PSI Tr. at 71-77; Request for Hearing at 1. The individual views her failure to meet her financial obligations as matters largely beyond her control. PSI Tr. at 71- 77; Request for Hearing at 1. The individual states that when she and her husband bought their house in the early 1980's, they relied on her husband's $60,000 a year income, one-half of which was overtime. PSI at 17, 51. She states that by 1989 his overtime was reduced. Id. at 52-53. She further states that his ability to work overtime and her ability to work full-time were adversely affected in 1994 as the result of a medical problem that she had. Id. at 55-56. The individual states that, as a result of these factors, she and her husband could not meet their expenses, which included first and second mortgage payments, the expense of her house and pool, expenses resulting from a large family, and medical expenses. Id. at 53. Finally, she claims that she did not write bad checks intentionally. Id. at 86-88.

With respect to the future, the individual asserts that she has taken steps to improve her financial situation. Hr. Tr. at 70-71; 75-76. The individual states that she and her husband are now renting a house for an amount significantly less than their prior mortgage payments. She further states that they are paying their rent and utility bills in a timely fashion and have not incurred any new debt, other than a 1996 car loan.

b. The individual's demeanor during her testimony

The individual's demeanor during her testimony did not persuade me that she believed that she was providing a true and complete picture of her past and present financial situation. See Hr. Tr. at 69-77. Instead, my impression was that the individual did not necessarily believe that her assertions presented a true and complete picture of her past and present financial situation. Although it is difficult to identify the aspects of her demeanor that contributed to that impression, they include her facial expression and voice. As a result of my overall impression of her demeanor, I cannot make an affirmative finding that the individual believed that her testimony presented a true and complete picture of her past and present financial situation.

c. The individual's failure to provide corroboration

Almost all of the individual's factual assertions with respect to her past and present financial situation are uncorroborated,<2> despite the fact that I advised her on two occasions prior to the hearing that it was her obligation to provide corroboration. See Personnel Security Review, VSA-0087, 26 DOE ¶ 83,001 (1996) (uncorroborated assertions generally not accepted as facts). Accordingly, these unsupported assertions cannot be accepted.

3. Conclusions Regarding Criterion L

As indicated by the discussion above, the individual has failed to meet her burden to mitigate the Criterion L security concerns. Excessive indebtedness and financial delinquencies recurring over a ten year period indicate "a pattern of financial irresponsibility."

The individual has failed to demonstrate that the excessive indebtedness and delinquencies are attributable to a factor other than irresponsibility. The individual's demeanor during her testimony leaves me concerned as to whether the individual truly believes that she has provided a complete picture of the situation that led to the indebtedness and delinquencies. This concern is reinforced by the conflicting nature of some of the individual's assertions.<3> Finally, the individual's failure to corroborate her assertions precludes an acceptance in this case of the assertions as facts. The record supports a conclusion that the individual chose to incur excessive indebtedness and delinquencies in order to maintain a certain standard of living. This behavior raises a concern about the individual's sense of responsibility and, therefore, is a serious security concern. See, e.g., Personnel Security Review, VSA-0048, 25 DOE ¶ 86,545 (1996) (individual's benevolence to family members at the expense of fulfilling financial obligations found to be irresponsible); Personnel Security Hearing, VSO-0093, 26 DOE ¶ 82,757 (1996) (individual's lack of judgment in one area raises serious security concern about judgment in security matters).

As also indicated above, the individual has failed to establish that she is rehabilitated. The individual has expressed the general view that she and her husband had little or no control over, and hence no responsibility for, the indebtedness and delinquencies spanning ten years. See PSI at 71-72. Similarly, the individual's assertions concerning her current financial situation do not warrant a conclusion that the pattern will not continue. As indicated above, based on my observation of the individual during the hearing, I am not prepared to conclude that she believed that her testimony was truthful and complete. In any event, the individual has not provided corroborating information, which itself precludes acceptance in this case of the assertions. Finally, the asserted facts, even if supported, would be insufficient to establish complete rehabilitation in this case, i.e., that a recurrence of the past pattern of financial irresponsibility is unlikely. See Personnel Security Review, VSA- 0048, 25 DOE ¶ 83,010, at 86,546 (1996) (incomplete evidence concerning current financial situation inadequate to mitigate the concerns arising from 13 year period of irresponsibility).

Based on the foregoing, it is clear that the individual has not mitigated the Criterion L concerns articulated by the DOE office. As a DOE security official testified, these unresolved concerns are very serious:

... What we have is a pattern over a number of years of excessive indebtedness, continuing financial delinquencies, and demonstrated financial irresponsibility in meeting obligations that raises a serious question in our minds in terms of a person's judgment in handling matters before her, as well as honesty and reliability in dealing with those matters.

And that leaves a serious question as to whether she can be from that standpoint trusted to protect classified information.

At the same time, a person who has excessive indebtedness and has demonstrated financial irresponsibility can be placed in a position where they could be influenced in order to obtain money that they need or pressured in some way to act contrary against the United States' interest.

Hr. Tr. at 62. As a result of the individual's failure to resolve the foregoing Criterion L concerns, I cannot conclude that the grant of 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).

B. Criterion F Concerns

1. Derogatory Information

Security concerns under Criterion F relate to whether an individual has been truthful in disclosures relevant to his eligibility for access authorization. Evidence of lack of trustworthiness raises serious doubts about whether an individual should be entrusted with responsibility for safeguarding classified materials. See, e.g., Personnel Security Hearing, VSO-0041, 25 DOE ¶ 82,775 at 85,672 (1995), aff'd, ¶ 83,005 (1996) (failure to disclose judgments and financial delinquencies found to be security concerns which precluded access authorization).

As discussed above, the individual has not disputed the inaccuracies in her June 1992 and June 1994 SF171s', the November 1994 SF86, and the PSI. Thus, the undisputed facts raise a very serious security concern.

2. Whether Mitigating Circumstances Exist

a. The individual's assertions

The individual asserts that these inaccuracies in official documents resulted from lack of care and confusion, reliance on the advice of her personnel officer, or mistake. Thus, the individual asserts that the inaccuracies were not deliberate and, therefore, not a concern under Criterion F.

b. The individual's demeanor during her testimony

As indicated above, my observation of the individual's demeanor during the hearing left a doubt in my mind concerning whether the individual believed that her testimony was truthful. Accordingly, I cannot make an affirmative finding that the individual believed the truth of the matters to which she testified.

c. The individual's failure to provide corroboration

Despite my advice that she needed to provide corroboration of her testimony on this issue, the individual failed to do so. For example, the individual failed to provide a statement from, or the testimony of, the personnel officer who allegedly advised her that her judgments did not need to be disclosed on her SF86. Accordingly, the individual's assertions that her mistakes were not deliberate cannot be accepted as facts.

3. Conclusions Regarding Criterion F

The individual has failed to demonstrate that the cited inaccuracies were unintentional. The inaccuracies at issue concern significant legal matters (IRS delinquencies, liens and court judgments, and a misdemeanor conviction), and educational attainment. Given the nature and extent of the inaccuracies, it would be difficult to conclude that they were not deliberate. See, e.g., Personnel Security Hearing, VSO-0041, 25 DOE ¶ 82,775 at 85,672 (1995) (number of inaccuracies indicates pattern of misrepresentation). Certainly, the individual failed to convince me that the inaccuracies were unintentional. See Hr. Tr. at 71-72. I was not convinced at the hearing that she believed the truth of her testimony, and she has failed to provide corroborating information.

Based on the foregoing, the individual has not resolved the security concern under Criterion F. As a DOE security official testified, the security concern at issue is serious:

... [S]he has -- in matters dealing with the government, she has provided false information on more than one occasion. It's not simply one time.

And therefore, she meets the parameters of the criteria we have as far as falsifying significant information on an application or a personnel security questionnaire.

An so therefore, that raises a real question in terms of her honesty in our ability to trust her with protecting classified information based on the conduct that has been demonstrated previously.

At the same time, if she's willing to provide false information on an official government document and certify that the information she provided is true, information that relates to debts, that raises a question, really in our mind a very serious one as to whether she could be pressured or influenced to act contrary ... to the national security in order to hide something and not have it exposed.

Hr. Tr. at 63-64. As a result of the individual's failure to resolve the foregoing Criterion F concerns, I cannot conclude that the grant of 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).

VI. Conclusion

I conclude that the individual has not mitigated the security concerns identified by the DOE office under 10 C.F.R. § 710.8(f) and (l). In view of the record before me, I am not persuaded that granting the individual access authorization "will not endanger the common defense and security and will be clearly consistent with the national interest." Accordingly, I do not recommend that the individual be granted access authorization.

The regulations set forth at 10 C.F.R. § 710.28(a) provide that the Office of Security Affairs or the individual may file a request for review of the Hearing Officer's Opinion within 30 calendar days of receipt of the Opinion. Any such request must be filed with the Director, Office of Hearings and Appeals, Washington, D.C. 20585-0107, and served on the other party. If either party elects to seek review of the Opinion, that party must file a statement identifying the issues on which it wishes the OHA Director to focus. This statement must be filed within 15 calendar days after the party files its request for review. The party seeking review must serve a copy of its statement on the other party, who may file a response within 20 days of receipt of the statement.

Thomas L. Wieker

Hearing Officer

Office of Hearings and Appeals

Date: December 3, 1996

<1>In addition, the individual's husband had sought bankruptcy protection just prior to their marriage. PSI Tr. at 57.

<2>The only corroborating material submitted by the individual were copies of (i) the 1994 Chapter 7 bankruptcy court records, in support of her assertion that the seven judgments cited in the Notification Letter had been discharged and (ii) a receipt of service for one of the court actions, showing her son's name as the recipient, in support of her assertion that she did not know about the action.

<3>For example, during the PSI, the individual described their purchase of the swimming pool as "extravagant," PSI Tr. at 73, and "irresponsible, because we really couldn't afford it at the time," id. at 75. This characterization is consistent with the fact that the purchase of the pool occurred within a year or so of the 1985 bankruptcy. Yet, in her request for a hearing, the individual rejected that characterization and said that they "had plenty of money when the pool was put in." Request for Hearing at 1.