Case No. VSO-0237, 27 DOE ¶ 82,791 (H.O. Woods February 4, 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.

February 4, 1999

DEPARTMENT OF ENERGY

OFFICE OF HEARINGS AND APPEALS

Hearing Officer's Opinion

Name of Case: Personnel Security Hearing

Date of Filing: September 30, 1998

Case Number: VSO-0237

This Opinion concerns the eligibility of XXXXX (hereinafter "the Individual") for continued 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's suspended access authorization should be restored. For the reasons detailed below, it is my opinion that the Individual's access authorization should not be restored.

I. BACKGROUND

In a June 1998 letter, the Manager of a Department of Energy (DOE) Operations Office informed the Individual that his access authorization was suspended pending resolution of substantial doubts concerning the Individual's financial situation and his honesty. On September 8, 1998, the Director of the Operations Office Security and Management Division issued a Notification Letter to the Individual, stating that the DOE was in possession of derogatory information that created a substantial doubt concerning his continued eligibility for his access authorization.

Specifically, the Notification Letter indicates that the DOE's concerns are based in part on the Individual's admission that, despite filing for bankruptcy in May of 1995, he continues to owe substantial overdue debts to a number of creditors, has been the subject of several judgments by creditors, and in 1997 has had a number of insufficient funds checks issued on his checking account. The Notification Letter sets forth in detail the judgments and other delinquencies forming the basis for the DOE's concerns. The Notification Letter further indicates that these concerns fall within the regulatory provision set forth at 10 C.F.R. § 710.8(l) [Criterion (l)]. Criterion (l) concerns information that an individual engaged in unusual conduct or is subject to any 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. Such conduct or circumstances include a pattern of financial irresponsibility.

The Notification Letter also charges the Individual with making statements that raise concerns relating to 10 C.F.R. § 710.8(f) [Criterion (f)]. Criterion (f) concerns information that an Individual has deliberately misrepresented, falsified, or omitted significant information from a security questionnaire, a qualifications statement, or from a personnel security interview (PSI). In this regard, the Notification Letter finds that during personnel security interviews conducted in September 1996 (the 1996 PSI) and March 1998 (the 1998 PSI), the Individual made conflicting and contradictory statements concerning certain aspects of his financial situation.

The DOE also informed the Individual that he was entitled to a hearing before a Hearing Officer in order to respond to the information contained in the Notification Letter. On September 8, 1998, the Individual requested a hearing. The Individual's request for a hearing was forwarded by the DOE to the Office of Hearings and Appeals (OHA). On October 1, 1998, I was appointed the Hearing Officer. In accordance with 10 C.F.R. § 710.25(e) and (g), I convened a hearing in this matter (the Hearing).

At the Hearing, the Individual was assisted by his union representative and testified on his own behalf. He also presented the testimony of four witnesses, his church counselor, his supervisor, a co-worker, and a police officer who is a family friend. The DOE Counsel presented the testimony of the DOE security specialist who had conducted the 1996 and 1998 PSIs (the Security Specialist) and the testimony of the Individual's wife.

II. THE REGULATORY STANDARD APPLIED IN THIS OPINION

The Hearing Officer's role in this proceeding is to evaluate the information presented by the DOE and the Individual, and to render an opinion based on that evidence. 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. See 10 C.F.R. § 710.7(a).

The standard in this proceeding places the burden of proof on the Individual. It is important to bear in mind that a DOE administrative review proceeding under this Part is not a criminal matter in which the government has the burden of proving a defendant guilty beyond a reasonable doubt. It is designed to protect national security interests. The 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). The individual must come forward at the hearing with evidence to convince the DOE 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. §710.27(d). Personnel Security Review (Case No. VSA-0087), 26 DOE ¶ 83,001 (1996); Personnel Security Hearing (Case No. VSO-0061), 25 DOE ¶ 82,791 (1996),aff'd, Personnel Security Review (VSA-0061), 25 DOE ¶ 83,015 (1996). The individual therefore is afforded a full opportunity to present evidence supporting his eligibility for an access authorization. The regulations at Part 710 are drafted so as to permit the introduction of a very broad range of evidence at personnel security hearings. Even appropriate hearsay evidence may be admitted. 10 C.F.R. § 710.26(h). Thus, by regulation and through our own case law, an individual is afforded the utmost latitude in the presentation of evidence to mitigate security concerns.

This is not an easy evidentiary burden for the individual to sustain. The regulatory standard implies that there is a presumption against granting or restoring a security clearance. See Department of Navy v. Egan, 484 U.S. 518, 531 (1988) ("clearly consistent with the national interest" standard for the granting of security clearances indicates "that security determinations should err, if they must, on the side of denials"); Dorfmont v. Brown, 913 F.2d 1399, 1403 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991) (strong presumption against the issuance of a security clearance). Accordingly, the individual in these cases must present testimony and/or other evidence which, taken together, is sufficient to persuade the Hearing Officer that restoring access authorization is clearly consistent with the national interest. Personnel Security Hearing (Case No. VSO-0002), 24 DOE ¶ 82,752 (1995); Personnel Security Hearing (Case No. VSO- 0038), 25 DOE ¶ 82,769 (1995) (individual failed to meet his burden of coming forward with evidence to show that he was rehabilitated and reformed from alcohol dependence).

Accordingly, in rendering my opinion in this case, I must consider whether the Individual has presented mitigating factors which resolve the DOE's security concerns. 10 C.F.R. §710.7(c); §710.27(a). Among the factors I am to consider 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; the likelihood of continuation or recurrence; and other relevant and material factors. 10 C.F.R. § 710.7(c).

III. CRITERION (l) CONCERNS

A. FINDINGS OF FACT

The facts in this case essentially are not in dispute. The Individual is employed by a contractor of the DOE. According to the testimony of the Security Specialist, her office became aware that the Individual had filed for bankruptcy in 1994 and had a vehicle repossessed in 1990. The Security Specialist then conducted the 1996 PSI to investigate the possibility of a pattern of financial irresponsibility on the part of the Individual. Transcript of December 1998 Hearing (hereinafter Tr.) at 11.

During that interview, the Individual and the Security Specialist discussed the Individual's financial status. The Security Specialist testified that she attempted in the interview to get additional, detailed information in order to understand "... how he came to those [financial] problems, what he [was] doing about it, and if he had any intentions or plan for resolution of those problems. There were several different items that came up during that interview that were of some concern." Tr. at 12. She described the result of that interview as follows:

After the first interview in September 1996 there were still some variables. . . . I didn't have his bankruptcy paperwork. So it was difficult for me to understand exactly which accounts may have been included in the bankruptcy. . . . [The Individual] seemed to have a pattern in the past of . . . financial irresponsibility, but at the time of the interview he also indicated that there were some changes in his circumstances which led to that situation and some changes in his situation which would allow him to try to get back on track after the interview and get his finances in order.

Tr. at 15. According to the Security Specialist, the Individual explained that he and his wife had resolved some past problems in communicating about finances and had agreed on the need to pay off their debts. He also stated that he was determined to limit his family's spending to necessities until these debts were paid, and would identify any debts that were not included in the bankruptcy so that he could begin to pay them off one by one.

The Security Specialist stated that about sixteen months later, in January 1998, she reviewed an update of the Individual's credit report to see what progress he had made in paying off his debts. She testified that at that time she found that the Individual had not supplied updated information to the credit bureau concerning accounts that were discharged in the 1995 bankruptcy or settled subsequent to the bankruptcy. In addition, there appeared to be three new unpaid collection accounts and three new outstanding judgments against the Individual. Accordingly, a second PSI was conducted with the Individual in 1998 in order to get additional detailed information concerning his financial situation. Tr. at 19-20. See also Credit Bureau Report for Individual dated January 27, 1998, DOE Exhibit 10.

The Security Specialist testified that at the 1998 PSI, the Individual made a number of statements concerning his financial situation that appeared to indicate continuing financial difficulties and mismanagement. At the Hearing, she summarized these statements as follows:

he had not gone to the credit bureau to try to resolve those previous accounts that may have been included in the bankruptcy that we discussed. He was still having difficulties with daily expenses such as he had fallen behind again on his mortgage, and that resulted in some additional financial problems for him. He was behind on property taxes at the time of the March, '98, interview, as he had been previously. . . .

He indicated that he was paying some amounts on sort of a periodic basis to some of his collection accounts and had not really provided a resolution to those accounts -- or at least not based on positive information that he could give me in the interview. . . .

[He] did not have very much accurate information to try to explain what happened with his finances and -- to try to explain if any resolution was made. He could tell me that he thinks some payments were made on some occasions every two or three months to certain agencies, but even he was not clear on exactly what was going on with his household finances . . . .

He mentioned two . . . debts that he could absolutely account for and said that he had paid, but he was not able to provide anything else that he had paid or resolved since [our previous interview]. He in fact had gotten into more debt. . . .

Tr. at 22-23. The Security Specialist also stated that at the 1998 PSI, the Individual indicated that he had not resolved his inability to discuss financial issues with his wife.

He indicated that finances were a stress to his marriage and that his wife had always been responsible for handling the finances and that even though he feels he can handle them better he did not want to discuss finances with her or take over the finances himself because he didn't know how to approach her on that issue, was afraid he would hurt her feelings if he indicated she couldn't handle finances correctly.

Tr. at 23-24.

As a result of the information supplied at the 1998 PSI, the DOE suspended the Individual's access authorization and, three months later, issued the Notification Letter, which lists forty-four separate items indicating possible financial irresponsibility that are drawn from the Individual's PSI testimony, his credit history and other information supplied by him to the DOE.

In his response to the Notification Letter, the Individual responded separately to each item. DOE Exhibit 1. In general, he accepted the Notification Letter's finding that he has had a number of financial judgments brought against him since his bankruptcy and still owes a number of overdue debts. However, he contended that he fully cooperated with the DOE's investigation of his financial affairs, and that he is making a slow but steady progress at putting his financial affairs in order and paying off his overdue debts. He also argued that the investigation of his finances was inappropriate and had no bearing on his qualification to hold a DOE access authorization. See Individual's Response to Notification Letter at Item 44 (DOE Exhibit 1).

Prior to the convening of the Hearing, I repeatedly advised the Individual to submit updated information concerning his financial situation. These requests were memorialized in my November 17, 1998 letter to the parties.

[A]t a minimum, [the Individual] should submit a statement of his current financial position in advance of the hearing. In this statement, [the Individual] should identify all of his family's current outstanding debts, and the current monthly payments that need to be made on these debts. He also should list his family's current monthly expenses and income, in order to support the feasibility of the family's payment schedule.

November 17, 1998 Letter to the parties at 2. Nevertheless, the Individual chose not to submit any additional, financial material in advance of the Hearing. However, a few days before the hearing, the DOE Counsel submitted, as DOE Exhibit 23, a copy of a recent credit report for the Individual, current to November 10, 1998 (the "current credit report"). This document and the Individual's testimony at the Hearing serve as the basis for my evaluation of the Individual's present financial situation. The Individual, his wife, and his other witnesses also presented information concerning the measures he is taking to remedy his financial situation and concerning his general reliability and trustworthiness. The relevant details of the current credit report and testimony are discussed in my analysis below.

B. ANALYSIS

There is a very serious security concern associated with an employee who has engaged in conduct showing a pattern of financial irresponsibility. See Personnel Security Hearing (Case No. VSO-0073), 25 DOE ¶ 82,794 (1996). I find that such a pattern exists in the present case, where it is undisputed that the Individual has accrued, over a number of years, extensive debts that he has not paid in a timely fashion.(1) The Individual's record of financial judgments against him and unpaid debts convinces me that a security concern exists regarding his reliability and trustworthiness, and the possibility that he may be subject to coercion, pressure or bribery resulting from these debts. The Individual must present mitigating evidence and testimony sufficient to resolve this concern, or his DOE access authorization cannot be restored.

After reviewing the record I find that the Individual has not demonstrated that he has resolved his financial problems. Moreover, he has not instituted a budget or taken other serious steps aimed at resolving these problems in the future. Although the testimony at the Hearing indicates that the Individual and his wife intend to work together to manage their finances, there is insufficient evidence of their cooperation in the recent past to allow me to conclude that they are likely to be successful in managing their finances together. Finally, there are indications throughout the record of this proceeding that the Individual lacks a strong commitment to resolve his financial problems. Although he acknowledges that he has been irresponsible in managing his finances in the past, he expresses little regret concerning this mismanagement, except to the extent that it may adversely affect his future employment.

At the hearing, the Individual acknowledged that he and his wife had been irresponsible in managing their finances.

Well, you've got it right in your -- in part of your [Notification Letter]. It's just irresponsibility, maybe trying to get in -- I wouldn't say over my head. It ended up that way. Good intentions don't mean nothing I found out. We just kept going deeper in the hole and not taking care of these immediate bills like we should have.

Tr. at 48. He states that the suspension of his clearance in June 1998 "woke me and my wife up drastically" about the need to better manage their finances. Tr. at 65. Prior to that time, the Individual says that he "didn't have a clear idea of exactly how money was being spent on our budget or things that were getting paid" because his wife was primarily responsible for managing the family's finances. Tr. at 52. The Individual acknowledges that he and his wife have had difficulty in discussing their financial problems, so he tended to avoid the topic.

My wife has had several surgeries since we've been married. The last surgery that she had was a real stressful one. So it was hard to put anything on her shoulders and say, look, this isn't being handled right. So it was quite stressful on my part to speak with her about it. We speak a little but not a lot. Every time it's brought up tempers would flare a little bit I guess. You know, it wasn't worth . . . losing a family over.

Tr. at 54-55. In her testimony, the Individual's wife agreed that it had been emotionally difficult for her to communicate with the Individual about finances in the past (Tr. at 90-91), but that they now communicate about finances "every day" (Tr. at 92) and have agreed on a joint approach for paying bills and prioritizing debts.

DOE Counsel: So what is your current plan to resolve the financial issues that you're facing?

Individual's wife: Well, our current plan is just to continue doing the best we can with the bills that we have now, paying them exactly what we can pay them. Sometimes it's five dollars a month, you know. Sometimes it can be twenty. It just depends.

Tr. at 93. The Individual also states that he and his wife have closed their checking account in order to eliminate the risk of writing overdrafts.(2) They now pay their creditors with cashier's checks or, in the case of their mortgage and car payments, by direct deposit of his paycheck. Tr. at 53.

It appears from the testimony of the Individual and his wife that in the last several months they have taken some positive steps to address some of the root causes of their financial problems. They assert that they are now discussing their finances on a daily basis, are sharing financial information fully, and have eliminated the risk of overdrafts. However, as discussed further below, this new cooperation has not yet resulted in a significant mitigation of their financial problems. The Individual's wages remain subject to garnishment and they have not been able to reach agreement with their creditors (including the Internal Revenue Service) on a set schedule for the repayment of their outstanding debts. Accordingly, the DOE's concern regarding the Individual's financial irresponsibility has not yet been resolved.

As noted above, the Individual currently estimates his total overdue debt at between $35,000 and $40,000. Tr. at 74-75. At the Hearing, the Individual testified that his mortgage payments are current, as are the payments on his van and his payments for home utilities. He stated that his home mortgage and his van payments are taken directly from his paycheck. Tr. at 63, 74. In addition, his wages are subject to a sizable garnishment of $296 per biweekly pay period, leaving him only $163 per pay period for meeting his family's other expenses and paying off other creditors.(3) According to the Individual, this level of wage garnishment is scheduled to continue for some time. Tr. at 75. As a result of these garnishments, the Individual states that he is unable to construct an overall financial management plan to pay off his creditors and avoid future judgments.

Individual: . . . I know what I would like to do after the garnishment is over, but I can't do it right now.

DOE Counsel: What would that be?

Individual: Increase -- larger payments to them. . . . If I could consolidate all my debt, I would pay it all off. I can't do that. All I can do is tell them that -- whoever my creditors are -- what I can afford to give, and whether or not that's acceptable to them, that's the best that I can do. If I had a budget to give you and say here you go, this is what it looks like, that would be great. It's just too hard to set a budget with what I'm doing right now.

Tr. at 69. The Individual states he is unable to borrow money to pay off his creditors (Tr. at 59), and that he lacks the financial resources to consolidate his debts at this time. He states that he has heard about and would like to contact a debt consolidation service (hereinafter the "DCS"), that would negotiate a payment schedule with all of his creditors.

DOE Counsel: Explain again what your current plan is to resolve your financial situation, decrease your debts?

Individual: Well, if and only if I can get the credit bureau to stop this garnishment, then I will contact this [DCS] to see if they will be able to help me out in that direction. If not, I'll just have to keep telling people that as the bills come in this is what I can give you. If they accept it, then they'll accept it. . . .

DOE Counsel: Why do you need to stop the garnishment in order to pursue this [DCS]? Is that what they told you?

Individual: No, I have a hundred and sixty-three dollars [in bi-weekly take home pay after the garnishment]. Try and pay your heating, your lights, your food, and your utilities off a hundred sixty-three dollars every paycheck plus get with [the DCS] and be able to give them money out of that. It's virtually impossible to feed my family and to take care of -- and to keep my power on.

Tr. at 60. Accordingly, at this time, the Individual states that he is unable to do anything to resolve his outstanding debts, other than to make small payments to his creditors as he is able.

as the bills come in, I'll keep in contact with them and give them the smaller payments that I can.

Tr. at 80. He states that the garnishment also has kept him from paying a federal tax delinquency of $3,000 to the Internal Revenue Service (IRS). He and his wife had established a payment plan with the IRS to pay off this deficiency at the rate of $50 a month, but in 1998 they notified the IRS that due to the wage garnishment, they are unable to make those payments. Tr. at 68. The issue remains unresolved at this time. Tr. at 69. Finally, the Individual states that he and his wife have rejected consumer counseling as too expensive. (4)

Previous opinions issued by OHA Hearing Officers have held that once there is a pattern of financial irresponsibility, the individual must demonstrate a sustained, new pattern of financial responsibility sufficient to demonstrate that a recurrence of the past pattern is unlikely. See, e.g., Personnel Security Hearing (Case No. VSO-0108), 26 DOE ¶ 82,764 at 85,699 (1996). It is clear from the record cited above that the Individual remains in precarious financial condition and has not yet resolved the pattern of financial over indebtedness and delinquency that serve as the basis for the DOE's financial irresponsibility concerns. His current overdue debt totals almost $40,000, and his wages are subject to substantial garnishment by some of his creditors. The Individual states that he cannot attempt to consolidate his outstanding debts while his wages are being garnished. Tr. at 55-56. His other creditors, including the IRS, are paid only small amounts (no more than $20)(5) on a monthly basis. As none of these other creditors have agreed to accept small monthly payments on their overdue accounts, it is possible that they also may seek judgments against the Individual. Under these circumstances, I find that the Individual has not mitigated the security concerns arising from the DOE's findings. Compare Personnel Security Decision (Case No. VSO-0153), 26 DOE ¶ 82,795 at 85,820 (1997) (individual found to have mitigated financial irresponsibility concerns with showings that he had established a new pattern of responsible spending, would complete the cure of his financial delinquencies within the next month, and had shown that he now has sufficient income to meet all of his financial obligations).

At the Hearing, the Individual also argued that his financial problems should not be the basis for denying him a security clearance. He believes that his loyalty to the government and his record of honesty and diligence in the workplace should override the concern raised by his financial situation.

To me it's preposterous for someone to think that I could be coerced because of my financial situation when you don't even know me. A credit report doesn't tell anybody anything except how you control money. It doesn't make you a dishonest person. It doesn't make you want to sell your country out. . . .

I think my coworkers and the friends that I brought in here today could testify to that fact like they did, that I wouldn't do anything wrong.

Tr. at 130. At the Hearing, his supervisor, a co-worker, and a police officer who is a family friend all testified that they considered the Individual to be honest and hardworking.

I find that the Individual's financial irresponsibility raises serious security concerns that are not mitigated by testimony of the Individual and his friends concerning his overall honesty and loyalty. As the regulatory language of Criterion (l) indicates, a person with financial difficulties is more likely than a person without such difficulties to be susceptible to outside offers of money for classified information, as a result of the pressures created by the person's financial situation or because of a desire to maintain a lifestyle that the person cannot afford. In addition, the tendency of a person with financial problems to conceal them from friends and co-workers makes such a person more susceptible to pressure, coercion or offers of money from those seeking classified information. Finally, a person who exhibits irresponsibility and lack of concern with regard to his or her personal financial obligations is at greater risk of exhibiting such behavior with regard to the safeguarding of classified materials. Someone who is willing to ignore financial difficulties, especially continuing financial difficulties, may be willing to overlook some of the rules and regulations regarding classified information and materials.

There is ample evidence in the record to indicate that the Individual is in serious financial difficulty. In addition, he has not taken his financial commitments seriously in the past, and from this I conclude that he is not reliable or trustworthy. I therefore find that he is at increased risk to be susceptible to pressure and coercion from those seeking classified information, and that this increased risk constitutes a serious security concern. See Personnel Security Hearing (Case No. VSO-0108), 26 DOE ¶ 82,764 at 85,599 (1996).

Finally, the Individual's testimony and demeanor at the Hearing lead me to believe that he has not made a responsible effort to treat seriously and respond to the DOE's concern regarding his financial situation. At the Hearing, the DOE Counsel expressed concern that the Individual has taken little or no action to correct his financial situation despite the repeated warnings and advice given to him by DOE security personnel.

The Department is very concerned about [the Individual's] failure to take actions to try to correct the situation, and it appears that he has undertaken a cavalier attitude towards this whole process and the seriousness of the nature of this matter. He hasn't identified a clear path to resolve the issues. He has not aggressively sought serious financial counseling.

Tr. at 128. At the Hearing, the Individual admitted that he did not seriously believe that he could lose his access authorization as a result of his financial problems.

I didn't feel that -- I honestly didn't feel that [my security clearance] would be pulled over my financial situation. It just seemed ludicrous if there [had] been a background check done on me during that time I was under investigation [for my access authorization] that the government would have really considered me a risk.

Tr. at 71. In an exchange with the DOE counsel, he expressed surprise and indignation that the DOE had suspended his access authorization over this matter.

The Individual: . . . The government out here at the Site doesn't really do anything. I mean there's all sorts of talk about how they're going to do this and do that, but the government doesn't follow through with anything. But they did this time. I called their bluff and they got me. I'm not trying to sound arrogant about it or anything like that, but I got the raw end of the deal.

DOE Counsel: Can you explain what you mean you called their bluff?

The Individual: Well, I mean I wasn't trying to hide anything. It's just -- maybe that's a bad figure of speech. I did what I could when the people were knocking on my door, but I let the other ones go. June [1998] they took my clearance away. They -- I guess if you consider it kind of a chess game, they had the final move.

Tr. at 70. The Individual clearly acknowledges that he did not expect the DOE to follow through after the 1996 PSI and inquire further into whether he was making progress with his financial problems. Although he states that he continued to ignore unpaid creditors, he complains that he got "the raw end of the deal" when the DOE finally suspended his access authorization as a result of his financial irresponsibility. These statements reinforce the factual evidence in this proceeding that he has consistently ignored the DOE's expressed concerns and has refused to address his financial problems in a fully responsible manner. In light of these statements and his conduct, I cannot conclude that he is reliable and trustworthy, and that he may not in future be subject to pressure and coercion as a result of his irresponsible financial dealings. See Personnel Security Hearing (Case No. VSO-0048), 25 DOE ¶ 82,776 (1995).

I therefore find that the Individual has not mitigated the DOE's security concerns with respect to Criterion (l).

IV. CRITERION (f) CONCERNS

A. FINDINGS OF FACT

As noted above, Criterion (f) concerns information that an individual has deliberately misrepresented, falsified, or omitted significant information from a security questionnaire, a qualifications statement, or from a personnel security interview (PSI). In this regard, the Notification Letter alleges that in the 1996 PSI and the 1998 PSI, the Individual made conflicting and contradictory statements concerning certain aspects of his financial situation. The misrepresentation (or omission) by an individual of relevant information in response to questions at a PSI raises serious doubts about whether that individual should be entrusted with the responsibility for safeguarding classified materials. At the Hearing, the Security Specialist discussed why DOE believed that these conflicting responses raised a serious concern.

In the 1996 interview -- based on some of the information that I learned in the 1998 interview, I had some concerns that [the Individual] was falsely representing his circumstances in 1996 in order to try to convince me as a representative of the Department of Energy that he is not a risk. From his information as far as his resolutions of the problem at the time after the 1998 interview, I came to question whether or not he was sincere about them or whether or not he was just telling me what he felt would help to get him out of the situation where he could lose his clearance.

Tr. at 26. Specifically, she concluded that the Individual's statements at the 1996 PSI that (i) he was using his wife's child support payment from her first husband to pay off a family loan, (ii) he and his wife communicated regularly about finances, and (iii) he paid mostly cash for items and kept track of family checks, were made in order to convince the DOE that he was acting responsibly with respect to his finances. At the 1998 PSI, she states that it became clear to her that these assurances had misrepresented crucial aspects of his financial situation, which had worsened in the intervening period. Tr. at 23.

B. ANALYSIS

As an initial matter, I note that the Criterion (f) concerns presented in the Notification Letter deal with statements made by the Individual concerning particular aspects of his family's management of their financial problems. As the following exchange from the 1996 PSI makes clear, the Individual made no attempt at that time to cover up the serious nature of his family's financial management problems.

Individual: . . . I've had so many garnishments that it's . . . - I don't like them. . . . But it seems to me like that is the only way . . . to actually get . . . some of these accounts taken away, I mean get them over and done with.

Security Specialist: . . . Now who keeps the budget in the house? Who does the finances?

Individual: . . . (Sigh) Supposedly my wife.

Security Specialist: Okay, and so she has since you were married?

Individual: Pretty much. I took the check book away from her for six months once and things rolled okay, but, you know, she'd get mad because . . . "I need to go out and get this" or something like [that] and I said "well, fine, take it but log your checks," and everything like that.

Security Specialist: Do you have a budget?

Individual: We don't have a squat right now. There -- there's nothing to budget. We have no money right now.

1996 PSI Transcript at 13-14. At the 1998 PSI, the Individual was also candid concerning his family's serious financial problems. As discussed below, I find that the instances of apparently conflicting statements identified in the Notification Letter appear to result from changes over time in the financial activities and family life of the Individual and his wife between 1996 and 1998. When examined along with other answers provided by the Individual during these PSIs, I find that they do not constitute misrepresentations by the Individual of significant information at these PSIs.

(1) STATEMENTS CONCERNING USE OF CHILD SUPPORT PAYMENTS

At the 1996 PSI, the Individual states that his mother-in-law had asked for repayment of a $10,000 loan that he had received from her

and well . . . we give her the child support check. It doesn't seem right, where it's not my money and I feel bad about that but, each of the kids . . . have their own little allowance type thing.

1996 PSI Transcript at 68. At the 1998 PSI, he discussed the child support payments in the following exchange:

Individual: That's not my money. That's the kids' money; the two kids . . . and that goes into an account for them. I have no right to touch that or add that to a bill. . . .

Security Specialist: When we last had an interview, I thought you told me that you were using the money to pay your mother-in-law.

Individual: I have used money for that before but . . . I don't use it all, I don't touch it. I don't . . . twenty dollars out of it, maybe, but I have not . . . I don't use the money. . . . .

Security Specialist: So the child support money is not part of the household budget?

Individual: No, not very often, I should say; let me put it that way. . . . And I know every once in a while . . . my wife is in the past . . . is asked . . . for, uh . . . has taken a hundred and thirty-five dollars of that . . . or a hundred and fifty dollars of that . . . and uh . . . buying a little bit of groceries or whatever with that.

1998 PSI Transcript at 56-57. In his response to the Notification Letter, the Individual explained that at the time of the 1996 PSI, he and his wife were giving the child support payment to his mother-in-law as repayment on the $10,000 loan, but they were no longer doing this at the time of the 1998 PSI. He stated that they now put some of this money into an account for the children "when we can. It is just a little embarrassing to say that we use it for other things on occasion." He repeated this explanation at the Hearing. Tr. at 77.

I accept the Individual's explanation of the divergent statements that he made in 1996 and 1998 concerning the use of the child support payments. His initial statement in 1998, motivated by his belief in how the child support payments should be allocated, leaves the misimpression that none of the child support payments are used to pay household expenses. However, my concern on this point is sufficiently mitigated by the clarifications that the Individual provided in his subsequent remarks, and by the realization that the linking of a particular source of family income to particular expenditures is naturally a somewhat speculative undertaking. I therefore conclude that neither the 1996 nor the 1998 statements quoted above amount to a misrepresentation of information to the DOE.

(2) STATEMENTS ABOUT WHETHER THE INDIVIDUAL AND HIS WIFE DISCUSS FINANCES

At the 1996 PSI, the Individual responded to questions about discussing financial matters with his wife:

Security Specialist: . . . [N]ow are finances something that you and your wife talk about . . . [?]

Individual: . . . oh, there are - there are constant -- we're - we're talking, discussing them, everything.

Security Specialist: Okay. So you are both aware of your finances. . .

Individual: all of them . . . It's gotten to the point, you know, where we discuss them, it's just very stressful at home because of it. I mean, you know, our marriage is very stable but it's, you know, between the kids and the finances, where we're trying to do the best we can.

1996 PSI Transcript at 46. At the 1998 PSI, he stated as follows:

Individual: . . . I just kind of . . . I don't . . . I try not to bring up the money subject to her . . . and . . . I'm trying to handle as much as I can on my own. I know she handles quite . . . ninety percent of it . . . but I can't rock the boat with her right now . . .

Security Specialist: I think you mentioned previously that . . . financial issues have been an issue in your marriage before.

Individual: They have. But within the last four months, things have just really been . . . one of those things, so I don't want to rock the boat with her. . . .

1998 PSI Transcript at 17. In his Response to the Notification Letter, the Individual explained that at the time of the 1996 PSI

[M]y wife and I were in communication. But in 1997, my wife seemed to not want to discuss anything concerning our finances. I believe it was due to the surgery she had in the Spring. So I decided not to bring it up to her again. I explained this to [the Security Specialist] during the interview.

At the Hearing, he repeated his explanation that changes in his relationship with his wife between 1996 and 1998 led to the divergent responses made in the PSIs.

I went from I thought having a real good marriage to having a real stressful marriage, lot of changes in her life, a lot of changes in mine. I'm thankful to have her.

Tr. at 78. Based on these explanations, I find that the Individual's 1996 PSI testimony quoted above does not rise to the level of a misrepresentation. The Individual indicated at that interview that he was "aware" of all of the family finances and discussed them with his wife. While it is understandable for the Security Specialist to conclude from these statements that he and his wife were jointly managing their finances, the Individual's 1998 statement that his wife has always paid the bills and managed the family checking account does not directly contradict his previous statement. He honestly appears to have believed at the time of the 1996 PSI that he was more aware of his family's financial situation than he actually was. He did acknowledge, both in 1996 and 1998, that financial discussions were a source of stress in his family. In light of these circumstances, I do not believe that the cited language raises a Criterion (f) concern.

(3) STATEMENTS ABOUT THE USE OF CASH AND CHECKS

In his 1996 PSI, the Individual stated the following regarding his methods for paying bills:

You know, we've got the kids' school clothes; we paid for them all in cash just to make sure we don't get an error. We try and pay pretty much everything in cash right now and, the checks, if we have to use them, but we try to make sure that there's money in there at all times and if there . . . isn't, we find the money to get in there. Usually . . . we don't write out a bad check and say "well, I gotta find some money." If it looks like -- we call the bank every day and check our, uh, account just to see where it is and if it's getting "oh oh" this could happen, then we try and get some money somewhere. . . . But we make sure that there's something in there now to cover these things that need to go out.

1996 PSI Transcript at 68-69. In the Notification Letter's Statement of Charges, the DOE states that information taken from the Individual's 1998 PSI is in direct conflict with his 1996 statements:

In your PSI in 1998, you stated that there were an unknown number of non-sufficient funds checks written on your account in 1997. You did not know how many because you did not write them and did not know they were returned until you got a call from a creditor or collection agency. You stated you closed your checking account in December of 1997 to ensure that no other checks bounced. Your judgment with Checks Plus, for nearly $1,000, is due to non- sufficient funds checks.

Notification Letter's Statement of Charges, section I, paragraph 3. In his Response to the Notification Letter, the Individual acknowledges that the items enumerated by the DOE are "a true statement. I believe my wife and me were extremely irresponsible in the way we handled our checking account." At the Hearing, the Individual offered the following explanation for the conflicting statements he made in his PSIs:

Individual: I did pay for things in cash, and she paid for things with checks. And maybe partly it could have been my fault for -- because I go to the bank, take money out. She'd write checks off it too. . . .

Hearing Officer: . . . In 1996, when you were discussing paying pretty much in cash for items, were you aware that your wife was using checks at that time, or did it come to your knowledge that she was writing checks at a later time?

Individual: . . . I knew that she was writing checks. I just didn't know that they were in the -- as many as they were.

Hearing Officer: . . . You weren't aware at that time of the problem of bouncing checks coming back with insufficient funds?

Individual: Not to the extent that I received. I knew I was picking up some little ones, and I mentioned it to her. She said she would take care of it.

Tr. at 79. Based on all of these statements, it is my conclusion that the Individual did not intend to deceive the DOE when he discussed his use of cash payments and checks at the 1996 PSI. Clearly, he described his family's bill paying methods in the most positive light that he could. He went from a presumably factual statement that they had paid cash for school clothes to a generalization that they tried to pay cash whenever they could. However, his 1996 PSI description is not factually inconsistent with his later explanation that he made cash withdrawals from their bank account to pay bills while his wife generally wrote checks. It also appears that events occurring in his marriage subsequent to the 1996 PSI caused most communication between the Individual and his wife concerning finances to break down, and most of the insufficient funds checks appear to have been written by his wife in 1997.

Based on the foregoing, I find that the Individual did not provide false or misleading information to the DOE concerning his financial affairs at his 1996 PSI or his 1998 PSI of the type that would indicate a security concern under Criterion (f).

V. CONCLUSION

As indicated above, I have concluded that the Individual has resolved the security concerns under 10 C.F.R. § 710.8(f) relating to the allegations of false or misleading testimony at his PSIs. However, the Individual has not resolved the security concerns under 10 C.F.R. § 710.8(l) relating to financial irresponsibility. In view of the record before me, I am not persuaded 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, I find that the Individual's access authorization should not be restored.

The regulations set forth at 10 C.F.R. Section 710.28(a) provide that the Office of Security Affairs or the Individual may file a request for review of this Hearing Officer Opinion within 30 calendar days of receipt of the Opinion. 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. 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.

Kent S. Woods

Hearing Officer

Office of Hearings and Appeals

Date: February 4, 1999

(1)As of the hearing date, the Individual estimated his total overdue debt (his total debt minus his home mortgage debt and remaining car payments, neither of which are overdue) at between $35,000 and $40,000. Tr. at 74-75.

(2)The Individual's wife acknowledges that she maintained the family checking account "very irresponsibly. I was not a good balancer of my checking." Tr. at 87.

(3)He also testified that his wife contributes approximately $400 per month to the family income from a part time job.

(4)The Individual and his wife met with a church counselor concerning their financial problems, but in his testimony the church counselor indicated that he is not "any kind of financial expert." He stated that his advice was limited to sharing knowledge he has acquired from supporting his own large family on a tight budget. Tr. at 105.

(5)Tr. at 49.