WASHINGTON – Though the Homeland Security Department has not terminated a high-ranking department official accused of resume fraud, sources say she’s been denied the security clearance she needs to perform her job.

Laura Callahan, the department’s deputy chief information officer, was placed on paid leave in June while officials investigate her academic credentials. The advanced degrees she lists on her resume are from a diploma mill.

Callahan’s assistant, Jim Shepard, says she is still out on leave and has not been fired.

However, sources say she was denied secret clearance and is appealing the decision. Callahan’s lawyer did not return phone calls.

Sources familiar with the case say investigators are also trying to determine when Callahan, a former Clinton official, paid for the phony degrees to see if she back-dated information on her resume and application. She says she got bachelors, masters and doctorate degrees from Hamilton University – a converted motel with three employees in Evanston, Wyo. – in 1993, 1995 and 2000, respectively.

But she didn’t mention the Hamilton degrees in March 2000, when she testified in the probe of the Project X e-mail scandal as a White House official. Under oath, she said only that she was “a graduate of Thomas Edison State College in Trenton, N.J.”

Her 1992 associates degree from Thomas Edison is not listed on her official bio, which cites her Ph.D. nine times.

DHS hired Callahan in March from the Labor Department where she held a similar job. She was issued a secret clearance pending a more thorough background investigation.

“That is where the info about the degrees came to light,” said one source.

Office of Personnel Management rules list termination of employment among penalties for falsifying academic credentials.

DHS officials did not return phone calls.

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