Case No. VSO-0227, 27 DOE ¶ 82,798 (H.O. Schwartz March 26, 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.

March 26, 1999

DEPARTMENT OF ENERGY

OFFICE OF HEARINGS AND APPEALS

Hearing Officer’s Opinion

Case Name: Personnel Security Hearing

Date of Filing:August 4, 1998

Case Number: VSO-0227

This Opinion concerns the eligibility of XXXXXXXXXXXXXXX (hereinafter "the individual") to retain his 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."(1)

I. Background

The individual is an employee of the Department of Energy. As a condition of his employment, the DOE requires that the individual maintain access authorization. Over the course of the individual's long employment, the local DOE Security office (DOE Security) has monitored the individual's financial condition through periodic reviews of credit reports and personnel security interviews (PSIs). On the basis of a recent PSI and other information that came to its attention, DOE Security determined that derogatory information concerning his financial irresponsibility existed that created questions regarding the individual’s continued eligibility for access authorization. Accordingly, a DOE official suspended the individual’s access authorization.

On July 1, 1998, the DOE official informed the individual of the suspension of his access authorization in a letter that set forth in detail DOE Security’s concerns. That letter was amended on September 15, 1998. I will hereinafter refer to the amended letter as the Notification Letter. In accordance with 10 C.F.R. § 710.21, the Notification Letter included a statement of derogatory information which, in this case, was information described in 10 C.F.R. § 710.8(l). The Notification Letter also informed the individual that he was entitled to a hearing before a Hearing Officer to resolve the substantial doubt regarding his continued eligibility for access authorization.

The individual responded to the July 1 letter by requesting a hearing. A DOE official forwarded the individual’s request to the Office of Hearings and Appeals (OHA). Upon receiving the individual’s request, the Director of the OHA appointed me the Hearing Officer in this matter. Since the documentation supporting the charges listed in the Notification Letter was vast and confusing, the Director of the OHA allowed an extension of the hearing date beyond the regulatory deadline to provide additional time for the individual to prepare his case. In accordance with 10 C.F.R. § 710.25(f), I conducted a prehearing telephone conference with the parties and convened the hearing fourteen days later. DOE Security called as its witness a personnel security specialist, who testified regarding DOE Security’s concerns regarding the individual. The individual testified on his own behalf and presented three former supervisors as additional witnesses at the hearing. All these witnesses testified regarding the individual’s job duties and reliability. At the request of both parties, I granted the individual two months beyond the hearing date in which to gather additional documentation, and permitted the filing of post-hearing submissions at the end of that period.

II. Statement of Derogatory Information

As indicated above, the Notification Letter issued to the individual included a statement of derogatory information in the possession of the DOE that created a substantial doubt as to the individual’s continued eligibility to hold access authorization. On the basis of that derogatory information, the DOE official believed that the individual "has engaged in unusual conduct or is subject to circumstances which tend to show that he is not honest, reliable, or trustworthy; or which furnishes reason to believe that he may be subject to pressure, coercion, exploitation, or duress which may cause him to act contrary to the best interests of the national security." See 10 C.F.R. § 710.8(l) (Criterion L). Specifically, the Notification Letter stated that, based on information the DOE obtained from several PSIs conducted with the individual between 1984 and 1998, credit reports covering the same period, and other letters and forms of notification, (1) the individual acknowledged the existence of numerous delinquent accounts and, owing to their vast number, his inability to provide complete information concerning the status of those accounts; (2) the value of the individual's unpaid accounts and judgments against him is roughly $80,000; (3) three houses that he owned were foreclosed upon; (4) his wages have been subject to garnishment by at least four creditors; (5) his automobile was repossessed; (6) he failed to keep two government-issued credit card accounts current even though he received reimbursement payments from the DOE for government travel; and (7) he violated DOE regulations by renting a car for his personal use, using DOE credentials and presenting a canceled DOE travel order.

III. Analysis

The criteria for determining eligibility for access authorization set forth at Part 710 dictate that a Hearing Officer must undertake a careful review of all of the relevant facts and circumstances and make a “common-sense judgment . . . after consideration of all the relevant information.” 10 C.F.R. § 710.7(a). I must consider all information, favorable or unfavorable, that has a bearing on the question of whether restoring the individual’s access authorization would compromise national security concerns. Id. Specifically, the regulations compel me to consider the nature, extent, and seriousness of the individual’s conduct; the circumstances surrounding his conduct; 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 individual’s potential for being susceptible to pressure, coercion, exploitation, or duress; the likelihood of continuation or recurrence of the conduct; and any other relevant and material factors. 10 C.F.R. § 710.7(c). Although it is impossible to predict with absolute certainty an individual’s future behavior, as the Hearing Officer, I am directed to make a predictive assessment. Finally, I note that it is incumbent upon the individual to demonstrate that restoring his 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). After careful consideration of these factors and all the evidence in the record in this proceeding, I find that the individual has not made this showing. I must therefore recommend that the DOE not restore the individual’s access authorization.

At the hearing, the personnel security specialist expressed the DOE's concerns that the individual's financial problems could "cause him to act contrary to the best interest of national security." Transcript of Hearing (Tr.) at 19. Although she readily admitted that DOE Security had no knowledge that the individual had to date acted in any way that compromised the national security, she stated that the potential was present, and that recent actions and decisions had increased the DOE's concerns. Tr. at 18-19. The personnel security specialist also explained that DOE Security had been concerned about the individual's financial problems for many years, Tr. at 20, but it considered those concerns mitigated because the bulk of the individual's debts were incurred due to his wife's chronic illnesses, and were therefore beyond his control. Tr. at 23-24, 27. For example, in 1992, DOE Security wrote that the individual's circumstances were different from "the cases in which gross financial irresponsibility and dishonesty are present." Tr. at 84. At that time, however, DOE Security also emphasized to the individual that the issue would become serious if there were ever evidence of irresponsibility or dishonesty. Tr. at 85.

DOE Security's lenient position with respect to the individual's financial problems changed in 1998. In January 1998, the individual used his DOE credentials and canceled travel orders to rent a car for personal use, in order to attend his grandfather's funeral. Because his government-issued credit card had been revoked for failure to make timely payments, he was obliged to pay the rental charges in cash, and upon returning the car, he did not have sufficient cash with which to pay them. Instead of surrendering the car to avoid additional charges, he kept it, all the while trying to secure funds to pay the bill. Ultimately, the rental company brought the matter to the DOE's attention, and he returned the car without payment of the charges, which by then had mounted to nearly $3000, and paid the bill at a later time. This event raised new concerns for DOE Security about the individual's eligibility for access authorization, not only because had he again exercised poor judgment and unreliability in meeting his financial obligations, but also because he had acted dishonestly by misleading the rental agent into believing that he was renting the car for government purposes. Tr. at 31-46, 71.

A. Unreliability

Two concerns surround an individual who is burdened with substantial debt, and both relate to his reliability and trustworthiness. First, as the personnel security specialist testified, the strain of chronic debt could cause this individual "to act contrary to the best interest of national security," Tr. at 19, by yielding to bribery, for example, and exchanging classified information or materials for cash that would relieve financial burden. In addition, the individual has demonstrated his unreliability through a documented history of unkept promises, procrastination, and poor judgment. We have found in other similar situations that a pattern of financial irresponsibility raises a very serious security concern. See, e.g., Personnel Security Hearing, Case No. VSO- 0081, 25 DOE ¶ 82,805 at 85,853 (1996); Personnel Security Hearing, Case No. VSO- 0073, 25 DOE ¶ 82,794 at 85,799 (1996). Although he has articulately presented explanations for his actions, I find that those explanations are not convincing and do not mitigate the security concerns sufficiently to permit me to render an opinion in his favor.

The individual has stated on many occasions that he intends to repay all his debts. For example, he contended that he would pay the outstanding balance on his government- issued Diners Club account, which was closed for non-payment prior to August 1996. See 9/12/96 PSI at 16-18. There is no evidence in the record that payment has been made on that or many other accounts, though some accounts have been settled. Further, the individual has frequently failed to provide DOE Security with information it requested. Tr. at 88. He committed to seeking bankruptcy protection at the time of the hearing, Tr. at 273, but still had not filed at the time of his post-hearing submission more than two months later. He procrastinated in seeking better health insurance coverage, even after it was abundantly clear that his then-current coverage did not provide the protection his family needed. Tr. at 94. (At the time of the hearing, he was again considering changing his insurer. Tr. at 261.) Each of these circumstances involved serious concerns for the security of his employment or his family, yet none was handled with the alacrity that good judgment would demand.

His lack of good judgment in a number of situations clearly supports DOE Security's determination that he is unreliable under Criterion L. For example, after having his home foreclosed upon for failure to make monthly mortgage payments, the individual bought a second and then a third home, and each was foreclosed upon for the same reason. Tr. at 96. In addition, he did not surrender the rental car as soon as he returned from his trip, though he knew that the rental charges would continue to mount. Tr. at 112. In fact, he never specifically asked how to stop the charges from mounting. Tr. at 294. It is my opinion that his perseverance in purchasing and then losing homes, as well as his lack of diligence in seeking a reasonable solution with the car rental agency, demonstrate a lack of sound judgment.

I also find that the individual demonstrated poor judgment on several other occasions. He used funds the DOE issued to him for the purpose of reimbursing his travel expenses to pay off other bills, rather than for their intended purpose. This activity resulted in a total of roughly $10,000 in unpaid credit card accounts and the cancellation of two government-issued credit cards. (2) Most relevant is that over a period of at least fifteen years, the individual permitted himself to accumulate at least $78,000 of debt. Tr. at 9. He did not seek any intervention or assistance until the DOE required that he obtain credit counseling, and even then he rejected the credit counselor's plan. Exhibit 36 (Letters from individual to personnel security specialist, 6/5/98 and 6/13/98). The individual's exercise of poor judgment in handling these financial matters raises serious doubts in my mind about whether he can exercise the good judgment and reliability necessary to maintain access authorization.

At the hearing and in post-hearing submissions, the individual forcefully argued that he has mitigated DOE Security's concerns regarding his unreliability and the likelihood that he would breach national security in exchange for payment. He pointed out on several occasions that even though he has been in financial straits for many years, he has never compromised the national security, e.g., Tr. at 90, 175, and contended that to do so would place his family and himself at risk. Tr. at 164, 231, 234. As for not returning the rental car even though he was short on cash, the individual explained that the rental agent did not offer him that option, and the individual believed it might have been a criminal act to surrender the car at that time. Tr. at 111- 112. In addition, at the hearing he testified about serious management issues in his program, and intimated that he has been treated as a scapegoat for the crisis. As a result, he feels he has been treated differently from other, higher-ranking workers in his program who have committed similar transgressions. Tr. at 168-173, 232-233. Finally, in his post-hearing submissions, he produced a letter from an attorney whom he has retained to begin a bankruptcy proceeding on his behalf. Individual's Exhibit 1, attached to February 12, 1999 Letter to Hearing Officer and DOE Counsel.

I do not agree with the individual that the absence of evidence that he has ever compromised the national security in the past should mitigate the DOE's current concerns. If I were to accept the individual's argument, DOE would never revoke access authorization from individuals it considered to be security risks until after they compromised the national security. This is clearly unacceptable. The issue in these proceedings is whether the individual is an acceptable risk given his behavior.

Nor do I find that the individual's misconceptions about surrendering the rental car, his alleged stature as organizational scapegoat, or the evidence of his intent to file for bankruptcy mitigate the DOE's concerns. I have stated my opinion regarding the rental car incident above. With respect to the claim that his program is treating him unfairly, the individual produced excerpts from a report that supported his assertion that his program is suffering from a number of management problems at this time. He contended that personnel actions are taken in an arbitrary and unfair manner, and that he has been treated unfairly, because others who have, for example, abused credit card privileges have suffered less severe retribution for their actions. See, e.g., Tr. at 170-173. Even if his contentions are correct, my responsibility in this proceeding is to form an opinion regarding whether sufficient facts have been presented to establish that restoring the individual's access authorization is clearly in the interest of national security. That the behavior of others may also raise such concerns does not mitigate the concern in this case. Similarly, the proposed filing for bankruptcy does not mitigate the DOE's concerns. Although bankruptcy may serve the individual very well by eliminating his current debts and permitting him to make a fresh financial start in life, it does not mitigate the concern that arises from how the debts arose in the first place and, more important, how they were managed or mismanaged. A bankruptcy filing will not address how the individual manages new debts in the future. See Personnel Security Hearing, Case No. VSO-0081, 25 DOE ¶ 82,805 at 85,855 (1996); Personnel Security Hearing, Case No. VSO-0041, 25 DOE ¶ 82,775 (1995).

Finally, while I take notice that the individual has made a good faith effort to meet many of his financial obligations, particularly since this proceeding began, I cannot find that this entirely mitigates the DOE's concern regarding his financial condition. In the first place, DOE Security based its concern in part on the fact that the individual had so many outstanding debts that neither he nor the DOE could identify them sufficiently to determine the status of each individual debt. His attempts to disentangle the complicated web of old debts, many of which had been written off and many of which involved defunct creditors, did not occur in earnest until after he requested the hearing. And despite his very recent efforts to clear his delinquent accounts, the sum of his outstanding debts is still considerable. Moreover, though I find it commendable that he has admitted that he had made some poor choices in the past, Tr. at 94 (scrimping on health insurance), 103 (being pressured into purchasing a car), 151 (feeling the obligation to attend a family funeral even though it required renting a car under false pretenses), he still maintains that his choices in other situations were not ill-advised at the time. Tr. at 96 (purchasing three houses consecutively, all of which were foreclosed upon), 112 (not surrendering the rental car immediately). Rather than mitigating the DOE's concerns about his unreliability, the individual's explanations for those actions reflect his poor insight into his prior decisions. Taken together, the individual's actions in this regard do not mitigate the DOE's concern that he has been unreliable in managing his financial affairs.

B. Dishonesty

Even more disturbing to me is the dishonest aspect of the individual's recent car rental episode. He contends that he needed to rent a car in January 1998 in order to attend his grandfather's funeral, and in doing so, he never attempted to deceive anybody during the rental transaction. Tr. at 108, 128, 135. Although the individual denies that he ever intended to deceive the rental agent as to the personal purpose of his trip, it is my opinion that he did in fact intentionally deceive. He presented travel papers and DOE credentials in order to be able to rent the car without a major credit card, which as noted above had been canceled for non-payment. Tr. at 106. He did not, however, attempt to clarify any logical misapprehension the rental agent might have had, and apparently did have (3), that the car was to be used for government business purposes. Instead, he testified that

I wasn't very talkative, and there may have been a multitude of reasons for that. But I simply went in to try and achieve the objective that I thought I wanted to do at that time, and that's what I attempted to do. But I did not try and lead someone away from this particular premise or lead them to this premise or anything like that.

Tr. at 128. He later stated that he never specifically informed the rental agent that he intended to use the car for leisure purposes. Tr. at 293. It is clear to me that through his taciturnity, he intended to mislead the rental agent for his own purposes. What troubles me further is that the individual does not seem to grasp the seriousness of the deception. See, e.g., Tr. at 120 (individual compares his situation to hypothetical one he considers beyond reproach), 124 (surmises that stiff penalty meted out to him stems from supervisor's personal philosophy rather than egregiousness of his behavior). I view his behavior with respect to the car rental as an abuse of the DOE's trust in an employee, compounded by deception at the outset and followed upon by poor judgment in the handling of the ensuing charges. (4)

This incident alone supports DOE Security's expressed concerns under Criterion L. When placed within a context of years of neglect, irresponsibility and poor judgment calls concerning personal debt management, the individual's behavior demonstrates that he is not honest, reliable or trustworthy pursuant to Criterion L.

IV. Conclusion

Based on the record in this proceeding, I conclude that the individual has failed to show that restoring his access authorization would not endanger the common defense and security and would not be clearly consistent with the national interest. I find that the individual has not sufficiently mitigated the concerns regarding his honesty, reliability and trustworthiness. Accordingly, I recommend that DOE Security not restore the individual’s 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. A party must file this request with the Director, Office of Hearings and Appeals, 1000 Independence Ave., S.W., Washington, D.C. 20585-0107, and serve 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. The party seeking review must file this statement within 15 calendar days after it files its request for review. The party seeking review must also serve a copy of its 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).

William M. Schwartz

Hearing Officer

Office of Hearings and Appeals

Date: March 26, 1999

(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.

(2)Moreover, the personnel security specialist testified that the individual's withdrawal of funds from his retirement account to pay off the car rental bill and one of the delinquent credit card accounts elevates the risk that he will be subject to bribery, for now he has seriously drawn down what appeared to her to be his sole resource for emergency expenses. Tr. at 62.

(3)The rental agency contacted the DOE about payment when the rental charges were not paid. DOE Exhibit 39.

(4)In an effort to mitigate his dishonesty, the individual elicited testimony from the personnel security specialist that he has always been straightforward in his dealings with DOE Security. Tr. at 87. However, there is also evidence that he failed to provide information to DOE Security in a timely manner, even though he was aware of its concerns. Tr. at 88. In any event, the DOE regulations governing eligibility for access authorization require an individual's complete cooperation with DOE Security. 10 C.F.R. § 710.6(a). His cooperation, to whatever extent he may argue, is not sufficient to mitigate the serious security concerns in this case.