Case No. VSO-0347, 28 DOE ¶ 82,758 (H.O. Goering August 30, 2000)

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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.

August 30, 2000

DEPARTMENT OF ENERGY

OFFICE OF HEARINGS AND APPEALS

Hearing Officer's Opinion

Name of Case: Personnel Security Hearing

Date of Filing: March 17, 2000

Case Number: VSO-347

This Opinion concerns the eligibility of XXXXX (the individual) to hold an access authorization(1) under the regulations set forth at 10 C.F.R. Part 710, entitled ACriteria and Procedures for Determining Eligibility for Access to Classified Matter or Special Nuclear Material.@ The individual's access authorization was suspended by the Manager of a Department of Energy (DOE) Operations Office pursuant to the provisions of Part 710. Based on the record before me, I am of the opinion that the individual's access authorization should not be restored.

I. Background

The individual is an employee at a DOE facility and has held a security clearance since 1990. Because of security concerns raised by, among other things, information that the individual had filed for Chapter 7 bankruptcy in 1996, been convicted of “Theft by Check” in 1997, and made unauthorized charges on a government credit card in 1999, the DOE conducted four Personnel Security Interviews (PSIs) with the individual in 1999. DOE Tab 1, Exhibits 1-4. Since the security concerns remained unresolved after the PSIs, the Operations Office ultimately determined that the derogatory information concerning the individual created a substantial doubt about his eligibility for an access authorization, and that the doubt could not be resolved in a manner favorable to the individual. Accordingly, the Operations Office suspended the individual's access authorization, and obtained authority from the Director of the Office of Safeguards and Security to initiate an administrative review proceeding.

The administrative review proceeding in this case began with the issuance of a Notification Letter to the individual. See DOE Tab 2, Exhibit 4; 10 C.F.R. § 710.21. That letter informed the individual that information in the possession of the DOE created a substantial doubt concerning his eligibility for access authorization. The Notification Letter included a statement of that derogatory information and informed the individual that he was entitled to a hearing before a Hearing Officer in order to resolve the substantial doubt regarding his eligibility for access authorization. The individual requested a hearing, and the Operations Office forwarded the individual's request to the Office of Hearings and Appeals (OHA). The Director of OHA appointed me as the Hearing Officer in this matter. Pursuant to 10 C.F.R. § 710.25(e) and (g), a hearing was convened.

II. Analysis

The DOE cited in its Notification Letter to the individual the following factual allegations as derogatory information under Criterion L:

(1) The individual misused his government-issued Visa card by charging nearly $8,000 to the card in expenses not related to official government business;

(2) The individual was arrested in March 1997 on a charge of Theft by Check, to which he pled guilty, served 90 days probation, and was fined;

(3) The individual filed for Chapter 7 bankruptcy in May 1996;

(4) The individual has not repaid $1,590 charged to a previous government credit card;

(5) The individual withheld information from his supervisor regarding misuse of his government credit card, and as a result his employer suspended him for a week without pay;

(6) The individual is delinquent in his repayment of students loans (dating from 1985 and 1990) in the amount of $12,443.65, and the loans have been referred to a collection agency due to non-payment;

(7) The individual made promises to the DOE on several occasions in 1999 that he would satisfy two other accounts totaling $975, but these accounts have not been satisfied;

(8) The individual claimed during a May 1999 PSI that he made a $1,101 payment to Nations Bank, but no payment has been made;

(9) A July 1999 credit report lists a collection account for the amount of $106 due to a hospital.

The individual does not dispute the first three allegations listed above. He does not dispute the fourth allegation, that he did not pay the balance on his previous government credit card, but notes that this debt was discharged in his Chapter 7 bankruptcy. The individual does not deny that his employer suspended him without pay for one week, but contends that he did not withhold any information from his supervisor regarding his misuse of the government credit card. The individual admits that he defaulted on student loan accounts in 1997 and 1998. See Individual’s Exhibit 1. Regarding the two accounts that the individual said he would address in 1999, the individual has confirmed that one of these debts was discharged in his Chapter 7 bankruptcy. He further states that he mailed a $75 check in April 1999 as partial payment on the other debt, though his account was never credited for the payment. With respect to his claim in his May 1999 PSI that he had made a payment of $1,101 to Nations Bank, the individual similarly claims that he mailed a check for this amount in April 1999 and does not know why that payment was not credited to his account. Tr. at 176. He also notes, contrary to the allegation in the Notification Letter, that regular payments were made to the Nations Bank account beginning in December 1999. Individual’s Post-Hearing Statement at 3. Finally, in March 2000, after the issuance of the Notification Letter, the individual satisfied the $106 hospital debt. Individual’s Post-Hearing Statement at 4-5. While agreeing that the debt has been satisfied, the DOE notes that this account had been in collection status since late 1998. Proposed Findings of Fact at 6.

A. Financial Difficulties

There is no dispute that the individual’s past has been marked by periods of financial difficulties. This fact on its face raises a security concern, since a person under financial strain is unusually susceptible to “pressure, coercion, exploitation, or duress which may cause him to act contrary to the best interests of the national security.” See Personnel Security Review, 26 DOE ¶ 83,019 at 86,620 (1990). The individual, however, contends that the DOE ignores the circumstances that led to his difficulties, and does not give him credit for the progress he has made in addressing his financial obligations.

Regarding the circumstances underlying his financial troubles, the individual made the following statements at the hearing and in a post-hearing submission.

While a clearance holder in financial distress, whatever the cause of the distress, presents a security risk, the factual context presented by the individual is helpful in gauging the probability of similar circumstances causing financial problems in the future. However, I disagree with the individual that his financial problems can be attributed exclusively to circumstances beyond his control. Helping people in need and tending to trust people are admirable character traits, arguably more admirable when a person puts himself at financial risk to do so. But a clearance holder cannot afford to put himself at such risk, for this in turn presents a risk to the national security. Thus, though the individual could not necessarily have predicted the negative outcome of his actions of generosity and trust, a clearance holder with sound judgment would know the risks, and avoid them.

There is also no question that the individual’s financial position is less precarious than it was a few years ago, and for this he deserves credit. But resolving debts does not necessarily resolve the doubts that are raised by financial difficulties. Rather than seeing only the individual’s current financial status, I must make a predictive assessment, and even financial problems that have since been resolved can raise legitimate concerns for the future. See Personnel Security Hearing, 26 DOE ¶ 82,780 at 85,711 (1997) (payment of debts does not in itself definitively establish that an individual will conduct his financial affairs responsibly in the future).

In addition, I find in the individual’s statements what appears to be a certain detachment from financial reality when it comes to describing his recent behavior. For example, in February 1999, the individual used a cash advance from a credit card he obtained in November 1998 to purchase a car, because the one he was then driving was “unreliable.” Individual’s Post-Hearing Statement at 7-8. According to the individual, he “wasn’t able to get . . . a new car on the finance. So I had to . . . use the credit card for that . . . .” DOE Tab 5, Exhibit 2 at 36. In questioning one of his witnesses at the hearing, he stated, “if you had a vehicle that had to get you thirty miles, and you had no other choice but to get another vehicle that you would be . . . able to justify to yourself and not have any payments, would buying a car using a cash advance be justified?” Tr. at 154.

To characterize purchasing a car with a credit card as an option that would “not have any payments” is odd. Confirming that this was not just a slip of the tongue, the individual in his post-hearing submission states, “I used my personal credit card to purchase a used Honda. I now had no car payment, whatsoever.” Individual’s Post-Hearing Statement at 9. And in June 1999, “I still had no car payment; . . .” Id. at 8. Of course, purchasing a car with a credit card might avoid, at least temporarily, making mandatory monthly payments, but in reality merely postpones the inevitable obligation to pay off the debt. Apparently not recognizing this reality, the individual claimed at the hearing, as part of his explanation of how his financial obligations have eased, that in November 1999, “I didn’t have a car payment.” Tr. at 67. In fact, by that time, the individual had received an October 20, 1999 credit card statement informing him that while he had recently made two payments on the card, “OUR RECORDS SHOW YOUR ACCOUNT IS PAST DUE AND YOUR BALANCE EXCEEDS APPROVED CREDIT LIMITS.” DOE Tab 1, Exhibit 2. This statement showed a balance of over $10,000 that was accruing interest at a rate of 17.65% per annum. Id.

In his post-hearing submission the individual asserts, “Currently, I have no car payment and only two bills which are [student loans and the] MBNA credit card bill, $254/month, which is manageable. . . . For clarity, use of my credit card removed a car note.” Individual’s Post-Hearing Statement at 9. The only way I can make sense of these statements taken as a whole is to conclude that the individual believes it is more financially advantageous to incur unsecured, higher-interest debt than to purchase a car by means of a secured note, when in fact the unsecured debt is much more expensive over time, and is “advantageous” only in that the debtor can miss payments on the debt without having his car repossessed. Rather than reassuring me of the individual’s improved financial status, in my opinion his statements reflect a short-sighted approach to finances that does not demonstrate financial responsibility.

Another example of the individual’s detachment from his financial behavior is his use of a government-credit card for personal expenditures. It is not a mark of financial responsibility that the individual incurred nearly $8,000 in additional debt during a two-month period (incidentally the same period when he purchased a car with his personal credit card). The individual states, “I utilized the government credit card, which was the wrong thing to do, incurred debt, to assist in re-certification to retain my part-time employment, . . .” Individual’s Post-Hearing Statement at 9. His characterization simply chooses to ignore, however, that he spent substantial amounts of this money on items I find hard to believe were in any way related to his re-certification, including over $300 in music stores, $76 on what appears to be a Broadway show, and a $300 cash advance, and apparently all of this on just one Friday in Manhattan. DOE Tab 6, Exhibit 11; DOE Tab 5, Exhibit 3 at 63-66. It hardly seems responsible for a person in the individual’s financial situation to spend in this way money he did not have. And yet, as I discuss below, more troubling than what this behavior says about the individual’s financial irresponsibility is how the use of a government credit card reflects on his honesty, reliability and trustworthiness.

B. Behavior Reflecting on Honesty, Reliability and Trustworthiness

Clearly, the individual’s use of a government credit card for non-business purposes raises serious questions about his honesty and trustworthiness. Any misuse of a government credit card would be cause for concern. In this case, the repeated use of the card by the individual, particularly when seen in the temporal context described below, is especially troubling in that it reflects extremely poor judgment, and thus ultimately casts doubt on his reliability.

Before the individual began working for the DOE in 1995, the DOE found that the individual had “problems managing his finances,” based upon his credit report at that time. DOE Tab 1, Exhibit 10. Prior to granting the individual a clearance, the DOE sent a letter of inquiry to the individual, and after evaluating the individual’s response, concluded that the “[f]inancial issues were mitigated . . . .” DOE Tab 1, Exhibit 9. Nonetheless, the individual was surely on notice from this point forward that his handling of finances were a potential source of concern to the DOE.

In September 1998, the individual revealed in response to a Questionnaire for National Security Position (QNSP) that he had filed for Chapter 7 bankruptcy in 1996. DOE Tab 3, Exhibit 2. Based on this new information, a DOE Personnel Security Specialist (PSS) conducted a PSI with the individual on February 10, 2000, in which the following exchange occurred:

[individual]: Um, no. Um, I guess, to, to, the question I do have is, um, how serious is it that my clearance is in jeopardy?

[PSS]: Okay. Like I mention, I think it’s, the accounts that we’ve addressed here today, okay. I think that you’ve given your intent that you’re gonna look into these accounts or do whatever is necessary to rectify ‘em. Uh, and then, you know, we’ll see what kind of progress you make and, you know, it’s gonna be incumbent upon you to make sure that that happens.

[individual]: Uh-huh.

[PSS]: Okay. Uh, that way –

[individual]: So I guess right now –

[PSS]: -- it can, it can, you know, that way your report, you know, can be in a better condition and, you know, things, you know, DOE won’t have to call you in again to address finances. Okay?

[individual]: Uh-huh.

[PSS]: Because it is a concern to DOE, you know, if you can’t keep your finances in order then, you know, they have a concern with that.

[individual]: So do I need to worry about losing my clearance?

[PSS]: You know, it’s not something that I can determine.

[individual]: Uh-huh.

[PSS]: All I do is take the information, I write up and make a recommendation. And then it goes . . . higher and a determination is made there. Okay?

[individual]: So based on the data that you’ve seen, what, what is your recommendation?

[PSS]: You know what, at this time I, you know, without, I, I’m not even gonna be able to make a recommendation yet . . . .

DOE Tab 5, Exhibit 4 at 46-47. From this conversation, it appears to have been clear to the individual that he was at least in danger of losing his security clearance, and that the fate of his clearance would hinge in large part on how well he could keep his “finances in order.” Astonishingly, it was shortly after this PSI that the individual proceeded to incur nearly $8,000 in personal expenses on a government credit card, including spending on items noted above that can hardly be described as necessities. Moreover, just two months before the PSI, the DOE sent the individual a memorandum inquiring about four cash advances taken on his government credit card in October 1998, and offering him the opportunity to either provide the Travel Authorization number associated with the charges or to promise that future use of the card “will be restricted to expenses associated with official travel.” DOE Tab 2, Exhibit 19. The individual chose the latter option, explicitly promising in November 1998 that future use of the credit card would be restricted to official business. Yet, less than three months later he began making numerous non-official charges to his government credit card. Clearly, if the individual cannot behave appropriately when he clearly should know that he is “under the microscope,” it is that much more difficult to trust that he will follow pertinent laws, rules, and regulations when he is under less scrutiny.

The individual readily admits that his use of the government credit card was wrong. See, e.g., Tr. at 65. At the same time, the individual points to circumstances that he apparently believes mitigate the concern arising from his behavior. In his post-hearing submission, the individual states, “I began using the government credit card, February 1999, and thought I would be able to transfer the balance to my own personal card. However, my limit increase did not come through.” Individual’s Post-Hearing Statement at 8. As quoted above, the individual also stated that he used the credit card “to assist in re-certification to retain my part time employment, . . .” Id. at 9. However, the purpose of a government credit card is not to provide short-term personal loans to employees to assist in payment of certain expenses. Rather than mitigating the serious concern raised by the individual’s actions, the individual’s statements instead raise the concern that he does not fully understand the inherent impropriety of his abuse of the government credit card.

Finally, at least one recent occurrence raises significant questions about the individual’s honesty. In response to inquiries from the DOE in April 1999, the individual provided to the DOE a copy of three checks he states he wrote and mailed to three different creditors on three separate days. DOE Tab 6, Exhibit 12. However, none of the three creditors received the checks, and the individual states that none of the checks came back through his bank for payment. Tr. at 176. The individual states that two of the creditors changed locations, and that this could explain why they did not receive the checks. Tr. at 180.

I frankly find it difficult to believe that the individual ever sent these checks. The individual testified under oath at the hearing that he mailed each check the same day it was written. Because each check was written on a different day, if the individual is to be believed, he sent each check out separately. As discussed at the hearing, it is certainly possible for one check to get lost in the mail. But it truly strains credulity to the breaking point to believe that three checks, sent on three different days to different destinations, would all get lost. The individual’s explanation that two of the creditors moved makes his testimony little if any more believable. For one creditor to lose a check is possible, though I would think that a creditor in the midst of a move would take great pains to make sure its stream of receipts is uninterrupted. But for two or three different creditors to all lose checks, coincidentally each check sent by the same individual, is literally incredible.

III. Conclusion

As set forth above, I find that the record in this case raises a number of security concerns. First, though the individual has apparently made progress in improving his financial situation, the record nonetheless paints a pattern of financial difficulties and recent irresponsible behavior. Contrary to the individual’s assertions, I do not agree that his financial struggles have been entirely due to circumstances beyond his control. Thus, I find that the individual is at an increased risk of future financial troubles, making him susceptible to “pressure, coercion, exploitation, or duress which may cause him to act contrary to the best interests of the national security.” Second, the individual’s repeated use of a government issued credit card and his dishonesty in responding to inquiries from the DOE raise serious concerns about the individual’s honesty, reliability, and trustworthiness. After reviewing all the evidence in the record, I cannot conclude that restoring the individual's access authorization would not endanger the common defense and security and would be clearly consistent with the national interest. It is therefore my opinion that the individual's access authorization should not be restored. 10 C.F.R. § 710.27(a).

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's Opinion within 30 calendar days of receipt of the Opinion. Any such request must be filed with the Director, Office of Hearings and Appeals, 1000 Independence Ave., S.W., Washington, D.C. 20585-0107, and served on the 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. 10 C.F.R. § 710.28(b). The address to which submissions must be sent for purposes of serving them on the Office of Security Affairs is as follows:

Director

Office of Safeguards and Security, NN-51

Office of Security Affairs

U.S. Department of Energy

19901 Germantown Road

Germantown, MD 20874-1290

Steven J. Goering

Staff Attorney

Office of Hearings and Appeals

Date:

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