Case No. VSO-0241, 27 DOE ¶ 82,794 (H.O. Lipton February 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.

February 26, 1999

DEPARTMENT OF ENERGY

OFFICE OF HEARINGS AND APPEALS

Hearing Officer's Opinion

Name of Case: Personnel Security Hearing

Date of Filing: October 6, 1998

Case Number: VSO-0241

This Opinion concerns the eligibility of XXXXX (hereinafter the individual) to hold an access authorization.(1) 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 testimony and other evidence presented in this proceeding, the individual's suspended access authorization should be restored. As discussed below, I find that the individual has not met his burden to bring forward sufficient evidence to show that his access authorization should be restored.

I. BACKGROUND

This administrative review proceeding began with the issuance of a Notification Letter, informing the individual that information in the possession of the DOE created substantial doubt pertaining to his eligibility for an access authorization. In accordance with 10 C.F.R. § 710.21, the Notification Letter included a detailed statement of the derogatory information.

The area of concern identified in the Notification Letter involves information that the individual has demonstrated a pattern of unreliability and financial irresponsibility. This behavior is

subject to the provisions of 10 C.F.R. § 710.8(l) (hereinafter Criterion L). (2) According to the Notification Letter, the individual declared bankruptcy twice in eight years, in 1990 and 1998. The letter asserted further that rather than paying for government travel expenses charged on his government-issued travel charge card, the individual used money received as reimbursement for the travel expenses to pay for personal items, such as gasoline and groceries. This practice contributed to an outstanding balance on this credit card of $7,194, which was included in the 1998 bankruptcy. The letter also indicates that the individual charged to his government credit card restaurant meals for his family and a personal hotel stay in his home town.

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

At the hearing, the individual testified on his own behalf. He also presented the testimony of his mother, of his supervisor, and of a secretary who worked in his division. The DOE Counsel presented the testimony of a security specialist.

II. Standard of Review

The Hearing Officer’s role in this proceeding is to evaluate the information presented by the DOE Office 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).

A DOE administrative review proceeding under 10 C.F.R. Part 710 is not like a criminal case, in which the burden is on the government to prove the defendant guilty beyond a reasonable doubt. In this type of case, we use a different standard, which is designed to protect national security interests. A hearing is "for the purpose of affording the individual an opportunity of supporting his eligibility for access authorization." 10 C.F.R. § 710.21(b)(6). The burden is on the individual to 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).

This standard implies that there is a strong presumption against the granting or restoring of an access authorization. See Dep’t of Navy v. Egan, 484 U.S. 518, 531 (1988) ("clearly consistent with the national interest" standard for the granting of access authorizations 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)(strong presumption against the issuance of a security clearance). Consequently, it is necessary and appropriate to place the burden of persuasion on the individual in cases involving national security issues. Personnel Security Hearing (Case No. VSO-0002), 24 DOE ¶ 82,752 at 85,511 (1995).

III. Analysis

The individual in this case is a DOE employee who travels considerably in connection with his job. While on travel status, he earns a significant amount of overtime pay, which on an annual basis is often equal to his regular salary. (3) To pay for expenses associated with his government travel he has in the past used a government-issued credit card. There is no dispute here with respect to the DOE's assertion that the individual used his government credit card to charge personal expenses, used government reimbursement monies to pay personal expenses, rather than pay government travel expenses and declared bankruptcy in 1990 and 1998. (4) Given these facts, I find that the DOE office properly invoked Criterion L in suspending the individual’s access authorization. However, I am to consider evidence that mitigates the Criterion L security concern. See 10 C.F.R. § 710.7(c). At the hearing, the individual brought forward evidence for the purpose of mitigating the concern. (5)

A. Use of the Credit Card for Personal Matters

The individual states that he knew it was improper to use the government-issued credit card for purposes not related to government travel. Transcript of Personnel Security Hearing (hereinafter Tr.) at 120. Nevertheless, he admitted that he used that card on 12 occasions to purchase restaurant meals for himself and his family in his home town. Tr. at 119. See also Transcript of Personnel Security Interview (hereinafter PSI Tr.) at 66. In addition, he admittedly spent three or four nights in a motel in his home town, which he charged on the card. Tr. at 104; PSI Tr. at 41, 43. This stay was also not related to government business. The individual explained that he had to charge those meals because he had no money to feed his family. In connection with the motel stay, he testified that he had an argument with his wife, and in order to keep his temper under control, he decided to leave home and stay in a motel. He testified that he was intent upon leaving the situation “so that it did not explode.” Tr. at 112. Since he allegedly had no cash or personal credit available to pay for the meals and the motel stay, he contends that he needed to use the government card.

These excuses do not mitigate the security concern. The DOE's security concern here relates to the willingness of a holder of an access authorization to abide by rules and regulations. If the holder of the access authorization cannot demonstrate that he can be trusted to conform to the requirements of rules that he has agreed to follow, it raises doubts about whether he will comply with regulations and rules governing access to classified material. Personnel Security Hearing, 25 DOE ¶ 82,791 (1996). The individual's motives in this case do not justify departure from adherence to established rules enacted specifically to regulate the very conduct in which he engaged. Needing additional funds for the ordinary expenses related to supporting one's family does not constitute an acceptable basis for disregarding those rules. See Personnel Security Hearing, 26 DOE ¶ 82,780 (1997), aff'd Personnel Security Review, 26 DOE ¶ 83,019 (1997); Personnel Security Review, 26 DOE ¶ 83,010 (1996).

I also have a concern that in a time of family stress, the individual's reaction was to resort to a solution that violated the rules, rather than one that did not involve improper use of the credit card. For example, with respect to the hotel stay, the individual did not, at the time of the event, appear to reflect seriously upon what other appropriate options might exist. He testified, “I did not stop to think of could I go here, could I go there, could I do this....” Tr. at 112. His response to the marital argument gives rise to a further concern about the individual's overall reliability and trustworthiness in adverse circumstances.

To mitigate the concern arising from improper use of the government travel card in the future, the individual has stated that he has given up his use of that card. PSI Tr. at 51-52; Tr. at 109, 141. He intends to use his own funds while on government travel, and then file for reimbursement. He proposes the use of a debit card. Tr. at 109.

In my view, this proposal does not mitigate the security concern. Since the individual’s access authorization has been suspended for the past few months, he has not recently been assigned to any duties requiring travel. He has not shown that he is able to maintain a sufficient and stable bank account that he will be able to draw on, and that will always be available to fund his government travel requirements. I therefore cannot even begin to assess whether his proposal to pay for his travel expenses with his own funds, rather than use a government credit card, is practicable.

Moreover, this statement of his intentions does not resolve the current concern related to improper use of the card. I see here a repeated use of the credit card for personal reasons. As I stated above, the individual admittedly used the card at least 12 times over a period of approximately eight months to pay for restaurant meals for his family. (6) He spent three or four (successive) nights in a motel for personal reasons, and used the card as payment. PSI Tr. at 41, 43. Thus, the improper use of the card was not a single, isolated incident, but rather a pattern that the individual adopted when he found himself in a difficult situation. At this relatively early stage, when the individual has not yet demonstrated a sustained stable financial pattern, I do not view the assertion that he will not use the government-issued credit card in the future as sufficient evidence to mitigate the overall security concerns arising from this pattern of violation of established rules.

B. Bankruptcy

As noted above, the DOE has a Criterion L concern involving the individual's filing for bankruptcy twice in an eight-year period. The DOE recognizes that bankruptcy is a legal means for resolution of financial problems. When reviewing the access authorization of an individual that has filed for bankruptcy, the DOE's interest is in how that individual reached the point at which it became necessary for his debts to be discharged. The DOE's concern is whether there is a legitimate financial hardship, or whether the bankruptcy resulted from irresponsible behavior. Thus, filing for bankruptcy may not necessarily allay security concerns about an individual's trustworthiness and reliability, if an employee has engaged in financial behavior that is irresponsible. Personnel Security Hearing, 25 DOE ¶ 82,805 (1996).

The individual offers three explanations for the financial downturn that led to the 1998 bankruptcy. (7) First, he provided financial assistance to his mother after his father died. Second, for a period of time, he did not receive his accustomed overtime pay. Third, he contends that his government travel credit card was charged with approximately $11,900 in unauthorized expenses, which he unwittingly attempted to pay in full. As discussed below, I do not find that these explanations mitigate the security concerns associated with his declaration of bankruptcy.

1. Lack of Overtime Pay and Financial Assistance to Parent

As the individual explains it, during the week of Christmas of 1996, he encountered a slow period for out-of-town trips, and thus he was able to earn no overtime pay. Then, in January 1997, he underwent a week of psychological and physical testing. During this time he was unable to travel and earn overtime pay. In March 1997, his father died and the individual began to help his mother pay some of her bills. In that same month he failed a quarterly physical fitness test and therefore could not undertake any government travel. He purportedly lost access to overtime pay until June 1997, when he passed the test. He claims that, under these circumstances, lacking his normal overtime pay, he was unable to make his credit card payments, and began to fall very far behind in his debt payment. He states that he never recovered from the events of 1997, and ultimately declared bankruptcy in 1998. Tr. at 79-83.

I am not persuaded by these assertions. The record indicates that prior to the bankruptcy, the individual provided his mother with approximately $50 to $100 per month for about 12 months. Tr. at 37-38. This amount does not appear to be large enough to cause the bankruptcy. Moreover, there was only a three-month period during which he had no access to overtime and was also assisting his mother. Tr. at 79-82. The individual’s explanation of these events is therefore unconvincing.

The individual also testified that Christmas time is not normally a travel period for him. Tr. at 77-78. Further, during January of each year he undergoes psychological and physical testing and does no traveling. Therefore, he is aware of the fact that there will be no overtime pay during these times. Moreover, the individual regularly undergoes two weeks of tactical training during the first quarter of the year. Tr. at 80. No travel is possible during that time. Consequently, he is accustomed to receiving no overtime pay for several weeks during the first quarter of each year. In fact, he testified that he took steps to prepare financially for this yearly occurrence. Tr. at 78-79. According to the individual, at other times during this period of 1997 there were simply no travel assignments. Referring to the sporadic nature of overtime and job-related travel, he admitted, “one day it’s feast, the next it’s famine.” PSI Tr. at 16.

In sum, the financial hardships alleged here amount to the following. The individual gave his mother about $100 per month for several months. He was without overtime pay for about six months, but this includes normally “dry periods” that were anticipated by the individual. Since the individual seems to have expected some periods in the year when he would not receive overtime, I am not persuaded that the absence of travel time he refers to caused him to declare bankruptcy. I am aware that he was unexpectedly not able to travel and earn overtime for a three-month period, due to failing the physical examination. Nevertheless, all in all, he has not persuaded me that these events, even when taken together, were so severe as to result in bankruptcy. (8)

2. Unauthorized Credit Card Charges

The individual further claims that his government credit card account was charged with some debts that he did not incur or authorize. He alleges that these charges must have been made by someone else. Tr. at 89. In support of this contention, he has submitted government travel vouchers and DOE time and attendance sheets, showing that some charges made in his home town with his government credit card were made on dates that he was out of town on travel. He also refers to these vouchers and attendance records to support his claim that some out-of-town charges were made while he was at home. He further alleges that he did not take some cash advances that were attributed to his government credit card. Individual's Exh. 4(a). The total amount of the allegedly improper charges is approximately $11,900. The individual’s position is that had he not been attempting to pay his full government credit card bill, including the unauthorized charges, and had he instead paid his personal credit card bills and other debts, he might not have been forced into bankruptcy. Tr. at 91. (9)

The travel vouchers and DOE time sheets confirm charges for hotels and restaurants in sites far away from the individual's actual location. I am therefore inclined to believe that the individual himself may not have charged the relevant items noted on the monthly government credit card statement. (10)

However, the individual has not convinced me that he was not in any way involved in authorizing or allowing the charges to be made. As an initial matter, as indicated above, in these administrative review cases, it is the burden of an individual seeking to restore his access authorization to mitigate security concerns expressed by a DOE security office. Merely presenting a plausible exculpatory explanation for the concerns is not sufficient. See Personnel Security Review (VSA-0126), 26 DOE ¶ 83,018 (1997); Personnel Security Review (VSA-0051), 25 DOE ¶ 83,012 (1996). In the present case, the individual claims that in instances in which he was not at the site where government credit card charges were made, the charges must be fraudulent. While this is a conceivable explanation, it is not the only possible explanation. For example, the individual could have allowed family and friends to use the card in his home town, even while he was on official travel. The individual has come forward with no information to corroborate his position that the charges were fraudulent.

Similarly, the individual states that some Automatic Teller Machine (ATM) withdrawals were made from banks in his home town while he was out of town. The individual claims that since these withdrawals could be made without his presence, “it is sufficient to support that all of the suspected ?misuse’ [of] ATM withdrawals could have been and were made by someone other than [the individual].” Submission dated February 2, 1999.

This argument is also without any support. There is no evidence for the individual’s basic premise that ATM withdrawals could have been made without using an ATM card. I do not find credible the position advanced here that ATM withdrawals were made without the use of the card and without the individual’s knowledge or consent. In sum, I find that the individual has failed to offer sufficient support for contention that there were unauthorized charges posted to his government credit card account.

I also do not find credible the individual’s contention that he did not notice the supposedly unauthorized charges when they appeared on his monthly statements. The individual claims that the unauthorized charges took place over the period September 1997 through April 1998. This is a significant period of time. I am not persuaded by the apparent contention here that during this eight-month period, the individual did not notice that his government credit card bills were consistently much greater than the travel reimbursements that he was receiving. I cannot believe that the individual failed to review his monthly credit card statements, notice the allegedly improper charges and register the appropriate complaints with the credit card company.

The allegedly unauthorized charges were for significant amounts. For example, in April 1998, there were charges of approximately $1,300 attributed to this individual's government credit card account. DOE Exh. 1. The individual claims that he did not travel during the time that the charges were made. Individual's Exh. 4 (a), (b) and (c). I do not find credible the individual's position that he did not notice these charges of $1,300. (11)

Further, in a Personnel Security Interview, the individual stated that prior to becoming delinquent on the credit card in 1998, he “always kept track with [American Express], I always called American Express to find what my balance was.” PSI Tr. at 36. Based on his assertion that he generally monitored his credit card bills, I cannot accept that he suddenly was unaware of large unfamiliar expenses charged to his account. (12)

As a further matter, there was testimony by the secretary for the individual’s section that the individual on several occasions complained to her that he was being billed for charges made by another DOE employee with the identical surname. Tr. at 66. Thus, I believe that the individual was already especially vigilant about his credit card bills. I am simply not convinced by his position that he paid no attention to his credit card statements, and was totally ignorant of the thousands of dollars of unauthorized charges. In fact, the individual has given no plausible explanation for failing to notice the unauthorized charges. See Tr. at 132-33.

Moreover, even if I were to accept the contention here that some of the credit card charges were improperly attributed to the individual and that he was unaware of them, this argument does not mitigate the security concerns. The individual’s allegation that he failed to review his monthly statements for a significant period and to detect the improper charges, in and of itself creates a security concern. It suggests to me a lack of responsibility and reliability about financial matters. This constitutes a further concern under Criterion L.

As is evident from the discussion above, I find that the individual has not brought forward information that persuades me that his bankruptcy was caused by legitimate financial hardship.

I also cannot find that the individual has demonstrated a new pattern of financial responsibility that mitigates the serious concerns associated with his financial behavior here. The individual declared bankruptcy approximately eight months before the hearing. This is not a sufficient period of time for me to conclude that the individual has shown a sustained, responsible financial pattern from which I could determine that recurrence of the past behavior is unlikely. Personnel Security Review, 26 DOE ¶ 83,019 (1997).

Moreover, the individual has not brought forward any significant evidence demonstrating that he will be able to manage his finances in the future. He has asserted that “there will be no more credit cards, period.” PSI Tr. at 51-52. See also Tr. at 109, 141. I am not convinced by his stated intention to maintain a sensible budget and to avoid the use of credit cards in the future. Indeed, the individual indicated at the hearing that he has recently acquired a new credit card, which is charged with the amount of $300. This credit card is being used solely to finance a set of instructional video tapes on the subject of managing personal finances. Tr. at 109.

I am troubled by the fact that so soon after declaring bankruptcy and stating that he would no longer use credit cards, the individual has once again turned to the use of credit. I see an unfortunate resumption here of the individual's previous pattern of making purchases through credit, rather than finding solutions that do not involve credit. For instance, in this case, the individual might have sought free financial counseling through the DOE's Employee Assistance Program or other consumer credit counseling programs. See Tr. at 47. There are free and modestly priced community-based programs through which persons experiencing financial difficulties can receive counseling on how to manage personal finances. The individual did not pursue that course of action. Tr. at 125.

As further evidence of financial responsibility, the individual states that he intends to repay the bankruptcy debts. Submission dated February 2, 1999. There is some evidence that the individual is continuing to make car payments on two vehicles. Indiv. Exh. 5. He has also indicated his intent to continue payments on some other household items. It appears that the vehicles and other items would have been repossessed as part of his bankruptcy proceeding, had he not agreed to continue making payments. DOE Exh. 3. I do not believe that this stated intention of repayment in and of itself constitutes significant evidence of financial responsibility through debt repayment. At this point, it only indicates that in exchange for keeping the personal property in question, he is willing to continue to make monthly payments. He has not shown repayment of debts that do not involve retention of personal items.

I cannot find that the individual has demonstrated financial responsibility merely through assertions of the intention to repay the debts discussed above. All in all, I find that the individual has not shown that he has achieved financial stability or demonstrated responsibility with respect to his personal finances.

C. Improper Use of Travel Reimbursement Monies

The Notification Letter indicates that the individual improperly used funds that were remitted to him as reimbursement for government-related travel expenses. This is based in part on the fact that, as stated above, at the time of the bankruptcy, there was an unpaid balance of approximately $7,000 charged to the credit card.

The individual has admittedly used travel reimbursement money to pay for personal expenses. PSI Tr. at 50, 53. The individual explains that on some occasions he paid the credit card expenses with his own funds and then reimbursed himself with the government monies. Tr. at 75-76; PSI Tr. at 60-62. In principle, I see no serious security concern with that practice. The security concern here is the ultimate failure to pay off the credit card balance in full, not the particular way in which the individual managed the reimbursement funds. Based on the sizable unpaid credit card bill, I believe that the individual did not use either the reimbursement funds or his own funds to pay that bill. This disregard for the debt indicates financial irresponsibility and does constitute a security concern.

I recognize that the individual now maintains that the sizable credit card balance is due to the unauthorized charges, for which he claims he did not receive reimbursement, and which he allegedly attempted to pay off. He contends that he simply could not keep up with the payments due on all of these charges. Submission dated February 2, 1999. However, as I stated above, he has not persuaded me that he was unaware of the charges, or that they were in fact unauthorized. He has also not shown the level of payments on the travel card that he was making, and established that he was in fact attempting to pay off the allegedly unauthorized charges. Thus, the individual has failed to mitigate the security concerns associated with his failure to pay the travel card bills.

V. CONCLUSION

In the above analysis I have found that there is significant derogatory information in the possession of the DOE which raises serious concerns under Criterion L as to the eligibility of this individual for access authorization. I have also found that the individual has failed to bring forth sufficient evidence to mitigate the security concern. I am therefore 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.

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 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 with 20 days of receipt of the statement.

Virginia A. Lipton

Hearing Officer

Office of Hearings and Appeals

Date: February 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)Derogatory information covered by Criterion L includes information that an individual has “[e]ngaged in any unusual conduct or is subject to any circumstances which tend to show that the individual is not honest, reliable , or trustworthy; or which furnishes reasons to believe that the individual may be subject to pressure, coercion, exploitation, or duress which may cause the individual to act contrary to the best interests of the national security. Such conduct or circumstances include. . . a pattern of financial irresponsibility . . . .”

(3)For example, the individual stated that in 1997, he earned about $33,000 in overtime pay. Transcript of Personnel Security Hearing at 72.

(4)The 1998 bankruptcy filing indicates that the individual had approximately $77,000 of unpaid debts.

(5)The individual also submitted a written statement giving explanations of his actions as part of his attempt to mitigate the concern. Submission dated October 2, 1998. These explanations were expanded upon at the hearing.

(6)DOE Exhibits 1 and 2 indicate that there were approximately 35 restaurant charges posted to the individual’s government credit card account in his home town. The individual admits to only 12 personal uses and claims that the others were fraudulent. As discussed below, I find no support for that assertion, and I am not convinced that all of the other charges were in fact unauthorized by him, as he contends.

(7)With respect to the earlier bankruptcy, the individual states that in 1990, shortly after leaving the military, he was forced to file for bankruptcy, due to the fact that his income decreased by about 30 percent, but his expenses increased. Submission dated October 2, 1998.

(8)At the hearing, the individual introduced into evidence a report prepared by the DOE , indicating that employees holding the same position as the individual tend to rely on significant amounts of overtime pay. Tr. at 13; Individual’s Exh. 1. Even if this is true, as discussed below, I am not convinced that the report mitigates the security concerns expressed about the individual.

(9)This evidence regarding improper charges was first raised and introduced at the hearing. Thus, there was no real opportunity for me or the DOE counsel to review the material, assess whether it supports the individual’s claims, evaluate its relevance and prepare to examine the individual at the hearing on this issue. See Tr. at 93-94, 96, 126, 132, 136. The DOE counsel and the individual’s attorney filed post- hearing submissions setting forth their conclusions as to the legal significance of the new material. Nevertheless, the individual was not subjected to meaningful examination or cross examination on this evidence. This certainly reduces the weight I can give to the conclusions he asks me to draw regarding this evidence.

(10)There are some charges made on weekend days, when it was possible for the individual to have traveled from home to the cities in which the charges are posted.

(11)The attorney for the individual argued that they did not become aware of any of the unauthorized charges until shortly before the hearing. Tr. at 89, 94. This was more than six months after the $1,300 charges were assessed.

(12)Referring to his government travel account, the individual did indicate that “somewhere along the line” he “lost track of it.” PSI Tr. at 37. He did not explain exactly when or why. This vague statement does not persuade me that he actually did fail to keep track of this account.