Case No. VSO-0132, 26 DOE ¶ 82,780 (H.O. Cronin June 10, 1997)

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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 10, 1997

DEPARTMENT OF ENERGY

OFFICE OF HEARINGS AND APPEALS

Hearing Officer's Opinion

Name of Case:Personnel Security Hearing

Date of Filing:January 31, 1997

Case Number: VSO-0132

This opinion concerns the eligibility of XXXXXXXXX ("the individual") for continued access authorization under the regulations set forth at 10 C.F.R. Part 710, "Criteria and Procedures for Determining Eligibility for Access to Classified Matter or Special Nuclear Material.(1)The individual's access authorization was suspended by a local security office of the Department of Energy (the DOE Office). In this Opinion, I will consider whether, based on the record before me, the individual's access authorization should be restored.

I. Procedural Background

Over a number of years, the DOE Office received allegedly unfavorable information regarding the individual's financial affairs. Recently, the DOE Office determined that the individual's financial history constituted derogatory information indicating that the individual engaged in unusual conduct or is subject to circumstances that tend to show that he may not be honest, reliable or trustworthy or that furnishes reason to believe that he may be subject to coercion, exploitation, or duress, that may cause him to act contrary to the best interest of national security. See 10 C.F.R. § 710.8(l) (Criterion L). Consequently, the DOE Office requested from the Director of the Office of Safeguards and Security the authority to conduct an administrative review proceeding.

The administrative review proceeding began with the issuance of a Notification Letter. See 10 C.F.R. § 710.21. That letter informed the individual that information in the possession of the DOE created a substantial doubt concerning his eligibility for access authorization. In accordance with 10 C.F.R.

§ 710.21, the Notification Letter included a statement describing the derogatory information. The Notification Letter also stated that the individual was entitled to a hearing before a Hearing Officer in order to resolve the substantial doubt regarding his eligibility for access authorization. The individual sent a request for a hearing to the DOE Office. The DOE Office forwarded the individual's request for a hearing to the DOE's Office of Hearings and Appeals. On February 3, 1997, I was appointed the Hearing Officer in this matter.

In accordance with 10 C.F.R. § 710.25(e) & (g), a hearing was convened. (2) At the hearing, the only witness was the individual who testified on his own behalf. DOE Counsel submitted twelve exhibits into the record of the present case. The individual did not submit any exhibits.

II. Findings of Fact

The facts in this case, as outlined in the Notification Letter are essentially undisputed. (3) Hearing Transcript at 13, 16, 26-27 (hereinafter Tr.). My findings are based upon the information stated in the Notification Letter, the submitted Exhibits and the testimony presented at the hearing.

In a 1984 Personnel Security Interview ('84 PSI), the individual admitted having been "contacted" by local police in 1981 for writing a check without sufficient funds. DOE Exhibit 12 at 3. At the '84 PSI the individual also admitted that he had three past due credit accounts for consumer items and that his automobile had been repossessed. Id. at 6. The individual further informed DOE at the '84 PSI that his indebtedness totalled $1,500 and that these past due accounts had resulted from his lack of employment for a major part of the prior two years. Id. The individual asserted at the 84' PSI that he would pay these debts when he was financially able. Id.

Subsequently, in a 1991 Personnel Security Interview ('91 PSI), DOE informed the individual that it had information indicating that the individual had been arrested on three occasions in 1986 for writing checks without sufficient funds to cover them. DOE Exhibit 11 at 10-11. Two of the arrests resulted in the individual paying fines. Id. Further, the DOE informed the individual that its records indicated that during the period 1986 through 1987, three firms obtained judgments against the individual. Id. at 12-14. DOE's records also indicated that during the period from 1985 through April 1988, the individual's pay had been garnished at least four times by various creditors. Id. at 12-13. At the '91 PSI, the individual stated that he had filed for bankruptcy in 1990. Id. at 19. Pursuant to this bankruptcy, the individual had approximately $20,000 in debt discharged. Id. at 21. The individual stated during the '91 PSI that his financial problems were due to his unemployment prior to obtaining his position in 1984 and "some bad financial deals" involving automobiles as well as the expenses of supporting his family of five. Id. at 19. The individual admitted at the '91 PSI that he had not handled his financial matters in a responsible manner in the past, but asserted that he could pay all of his current debts. Id. at 25.

In 1992, the individual was named in two complaints for writing two checks to different firms without sufficient funds to cover the checks. Notification Letter at 2-3. The individual made restitution for the amount of the checks and paid fines and court costs. Id. Also in 1992, another firm filed a complaint against the individual for writing a check without sufficient funds to cover payment. Id. A summary of a 1993 Personnel Security Interview ('93 PSI Summary) reported that also in 1992, the individual was arrested on two outstanding arrest warrants for issuing bad checks. DOE Exhibit 10 at 1. (4) After his arrest, the individual subsequently made restitution and paid court costs and fines. Id. The '93 PSI Summary also reported that the individual stated that his problems with the bad checks in 1992 were due to his failure to balance his checkbook and not being "a good bookkeeper." Id. The individual further asserted that he would take measures to ensure that all checks would be backed by sufficient funds. Id. As recorded in the '93 PSI Summary, the individual also stated that he had experienced some financial problems due to his being out of work for six months for knee surgery and that he had two delinquent debts, a debt to a utility and a debt to an individual from whom he had purchased an automobile. Id. In a February 1993 Personal Financial Statement, the individual acknowledged that he had three delinquent credit accounts: (1) to a management company for rent in the amount of $1,500; (2) to an automobile dealership for $2,600; and (3) to a finance company for $18,000. Notification Letter at 3.

DOE conducted another Personnel Security Interview with the individual in 1995 ('95 PSI). In the '95 PSI the individual admitted that as of the time of the interview he had outstanding checks with insufficient funds. DOE Exhibit 9 at 13. The individual also admitted that he had a number of past due accounts (ranging from $200 to $300) that had been referred to collection firms as well as a past due account to a management company for rent in the amount of $1,800. Id. at 5, 8-12. The individual again admitted that he had not handled his finances in a responsible manner. Id. at 15. However, the individual also stated that he had been in litigation with his employer and that pursuant to that litigation he was expecting a settlement check. Id. at 13. The individual asserted that with this money he expected to be able to take care of all his outstanding credit accounts referenced in his current credit report, except for the amount owed on his automobile. Id. at 6, 13.

The individual subsequently received approximately $15,000 pursuant to a litigation settlement with his employer. DOE Exhibit 8 at 4. However, while the individual paid off two of his past due accounts with the settlement monies, the individual did not pay off all of his past due accounts. Id. at 3, 5. (5)The individual paid $1,900 in unexpected automobile repair expenses as well as paying some family member's debts. Id. at 4. In addition, the individual also made various purchases unrelated to his debts. Tr. at 19. After another Personnel Security Interview conducted in 1996, the DOE requested, and the individual agreed to submit, a statement detailing his current financial status and how the $15,000 settlement had been spent. DOE Exhibit 8 at 8.

The individual submitted a Financial Statement dated February 1996. In that statement, the individual listed 14 debts ranging from $150 to $2,200 but did not indicate the disposition of the $15,000 settlement. Notification Letter at 6. Pursuant to a March 1996 DOE Letter of Interrogatory, the DOE asked the individual about the status of a $2,200 management company debt as well as a number of his past due accounts about which the DOE had also inquired in the '95 PSI. Id. at 6-7. The individual stated in his written response to the Letter of Interrogatory, that one of the past due accounts had been paid and that he was trying to reach agreement on a payment plan for a number of the past due accounts. Id. Later in 1996, the individual was charged with theft in connection with a rental furniture account in which he disputed the amount owed. DOE Exhibit 7. As a result of this charge, the individual was ordered by the court to be placed on probation until he paid the debt. Id. The individual subsequently paid this debt. Tr. at 22.

III. Analysis

The DOE 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). Among the factors I have considered in rendering this Opinion concerning the individual's eligibility for access authorization are the following: the nature, extent, and seriousness of his conduct; the circumstances surrounding the conduct, including knowledgeable participation; the frequency and recency of the conduct; his age and maturity at the time of the conduct; the voluntariness of his participation; the absence or presence of rehabilitation or reformation and other pertinent behavioral changes; the motivation for his conduct, the potential for pressure, coercion, exploitation, or duress; and the likelihood of continuation or recurrence. See 10 C.F.R. §§ 710.7(c), 710.27(a).

The facts in the present case clearly indicate that the individual has shown a pattern of financial irresponsibility since at least 1984. The individual's conduct regarding his financial affairs is marked by his writing numerous bad checks without sufficient funds and his failure to cover various bad checks absent arrest and threat of subsequent incarceration. In addition, the individual has had a significant number of credit accounts that have been ultimately referred to collection agencies for non- payment. While the record indicates that the individual's pre-1984 unemployment and his six month absence from work in 1992 could account for a portion of the total amount of his debt, I believe that most of the individual's problems stem from a failure to act responsibly regarding his debts and financial affairs. The individual's writing of checks without sufficient funds indicates a lack of responsibility with regard to financial affairs that is not mitigated by periods of decreased income. The individual's failure to act responsibly is illustrated by his recent failure to pay with the $15,000 settlement some of the numerous small dollar amount accounts ($200-$300) that had been referred to collection agencies and about which DOE had inquired in the '95 PSI. The individual instead chose to pay various family members' debts and make other expenditures. See Tr. at 19. In two PSIs and at the hearing, the individual has recognized that in the past he has not handled his financial affairs responsibly. DOE Ex. 11 at 25; DOE Ex. 9 at 15; Tr. at 10. In sum, the record before me indicates that the individual has shown significant financial irresponsibility.

In light of the facts of this case, I find that DOE appropriately invoked Criterion L in this case. The individual's repeated failures to honor financial commitments indicate that he exhibits suspect honesty, trustworthiness and reliability. Indeed, information indicating an individual's financial irresponsibility is listed as an example of derogatory information under Criterion L. See 10 C.F.R. § 710.8(l). The individual's behavior implicates important security concerns. The individual's writing of bad checks and failure to honor them indicates that the individual has exhibited a lack of honesty in his financial dealings. This lack of honesty raises concern as to whether the individual can be trusted to follow security regulations. Additionally, financial irresponsibility increases the possibility that an individual could be coerced or influenced by offers of money. See Personnel Security Hearing (Case No. VSO- 0108), 26 DOE ¶ 82,764 at 85,599 (1996). Financial irresponsibility raises a serious doubt about an individual's ability to handle classified material and follow security regulations. Personnel Security Review (Case No. VSA-0048), 25 DOE ¶ 83,010 at 86,545 (1996).

In mitigation of the derogatory information described above, the individual asserts that he is a fundamentally changed person and has reformed his behavior regarding his finances. The individual testified at the hearing that approximately six months prior to the hearing he undertook a self- examination of his life and decided that he would make fundamental changes in the way he was living his life. Tr. at 10. Pursuant to that decision, the individual began to counsel and minister to individuals at a local jail and eventually began to conduct Bible studies at that facility. Id. As further evidence that he has changed and is more responsible regarding his finances, the individual testified that he has recently obtained employment at a second job and that he is now working 70 hours a week at his two jobs. Tr. at 13. The individual further testified that all of his debts are now current with the exception of one car payment and that he and his wife have come together to resolve his debt problems. Id. at 18, 20. With the extra income from his second job, the individual believes within six months or a year he will resolve all of his debts. Id. at 18. In addition, the individual has attended some pastoral

counselling sessions. Id. at 23. Consequently, because the individual believes that he has changed and is fundamentally different from the person described by the record of this case, his clearance should be restored.

After considering the record before me, I nevertheless believe that, despite the individual's assertions, there is still too great a risk that the individual could return to his pattern of financial irresponsibility. A return to this pattern of conduct would directly implicate the security concerns discussed above. While I believe that the individual has made some promising efforts to reform his conduct with regard to his finances, I cannot find with sufficient certainty that the individual has reformed his behavior such that I could recommend that his clearance be restored. The individual's effort to pay off all his delinquent accounts is not complete as of this time and remains somewhat in doubt given his relatively recent failure to pay off various debts with the $15,000 settlement check and his prior unfulfilled assurances to DOE. Further, even if the individual had managed to pay all of his current debts, that in itself would not definitively establish that the individual will conduct his financial affairs responsibly in the future. Assuming that the individual has acted in a financially responsible manner for the past six months, that period is not long enough to assure me that he has sufficiently reformed his conduct in regard to his future financial affairs, especially given the relatively long standing (at least 12 year) nature of the individual's financial problems. In addition, I do not believe that the individual's pastoral counselling sessions provide sufficient assurance that he has reformed his conduct regarding financial affairs, given that the counselling is on an as-needed basis and not part of a regular counselling program. See Tr. at 23. Despite the individual's encouraging efforts to reform his financial behavior, I am not sufficiently convinced of his reformation to recommend that his clearance be restored.

IV. Conclusion

In the above findings of fact and analysis, I have found that there is significant derogatory information in the possession of the DOE Office to provide a sufficient basis for invoking 10 C.F.R. § 710.8(l) and that the individual has failed to mitigate the serious security concerns raised by that derogatory information. In view of the record before me, I am unable to find 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, it is my opinion that the individual's access authorization should not be restored.

Either 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. 10 C.F.R. § 710.28(a). Any such request must be filed with the Director, Office of Hearings and Appeals, 1000 Independence Ave., S.W., Washington, D.C. 20585-0107, and served on the other party. The party seeking review of the Opinion must file a statement identifying the issues on which he or she wishes the OHA Director to focus. This statement must be filed within 15 calendar days after the party files the request for review. The party seeking review must serve a copy of the statement on the other party, who may file a response within 20 days of receipt of the statement. 10 C.F.R. § 710.28(b).

Richard A. Cronin, Jr.

Hearing Officer

Office of Hearings and Appeals

Date: June 10, 1997

(1)"An access authorization is an administrative determination that an individual is eligible for access to classified matter or special nuclear material. 10 C.F.R. § 710.5. Such authorization will be referred to variously in this Opinion as access authorization or clearance.

(2)Prior to the hearing, I held a pre-hearing telephone conference with the DOE Counsel and the individual as required by 10 C.F.R § 710.25(f).

(3)At the hearing, the individual asserted that the Notification Letter contained a discrepancy as to the exact date that he was arrested in 1981 for writing a bad check. Tr. at 15. Additionally, the individual testified that one loan mentioned in the Notification Letter of approximately $5,900 had been discharged in bankruptcy and that the Notification Letter did not indicate that fact. Tr. at 16. The individual did not challenge the accuracy of any other information detailed in the Notification Letter or offer any evidence disputing the accuracy of any of the DOE's Exhibits. Tr. at 13, 15-16, 26-27. The exact date of the 1981 arrest is immaterial to my opinion and I need not make a finding on that issue. With regard to the individual's assertion concerning the discharge of the $5,900 loan, DOE Counsel did not dispute this assertion and there is no other evidence in the record specifically pertaining to that loan. Consequently, for the purposes of this opinion, I will assume that the loan was discharged in the individual's 1990 bankruptcy.

(4)The '93 PSI Summary indicates that the individual stated that one of the arrest warrants involved a check that the individual had previously paid. DOE Exhibit 10 at 1. Since DOE Counsel has not disputed the individual's assertion and I can find no other information in the record, I will conclude that the individual had in fact covered one of the outstanding checks that was the basis of one of the arrest warrants.

(5)At the hearing the individual implied that the Notification Letter failed to indicate that he had paid two of his debts with the $15,000 settlement. Tr. at 14. However, the Notification Letter does acknowledge this fact and I have included this fact in my findings.