DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 09-03397 ) ) Applicant for Security Clearance ) Appearances For Government: Tovah Minster, Esq., Department Counsel For Applicant: Darwyn L. Easley, Esq. ______________ Decision ______________ RICCIARDELLO, Carol G., Administrative Judge: Applicant failed to mitigate the Government’s security concerns under Guideline F, Financial Considerations and Guideline E, Personal Conduct. Applicant’s eligibility for a security clearance is denied. On October 13, 2010, the Defense Office of Hearings and Appeals (DOHA) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guidelines F and E. The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective within the Department of Defense on September 1, 2006. Applicant answered the SOR on November 1, 2010, and requested a hearing before an administrative judge. The case was assigned to me on December 14, 2010. DOHA issued a Notice of Hearing on January 14, 2011. I convened the hearing as scheduled on February 8, 2011. The Government offered Exhibits (GE) 1 through 10. 1 2 Applicant did not object and they were admitted into evidence. Applicant testified on his own behalf. He offered Exhibits (AE) A through C, which were admitted into evidence without objections. The record was held open until February 18, 2011, to allow Applicant to submit additional documents. Applicant submitted additional documents which were marked as AE D through K, and admitted into evidence without objection, and the record closed.1 DOHA received the hearing transcript (Tr.) on February 11, 2011. Findings of Fact Applicant admitted SOR allegations ¶¶ 1.a, 1.d, 1.e, 2.a(1), 2.b, and 2.c. He denied the remaining allegations. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact. Applicant is 53 years old. He is twice married. He has two grown daughters. He has worked for his present employer since June 2008. He has held a Top Secret security clearance since 1998.2 Applicant admitted that he did not have a sufficient amount of money withheld for federal income taxes from his paycheck beginning in 1998, which resulted in him owing federal income taxes. When the taxes became due, he stated, “A lot of times, I would try to make a—arrangement to get on a payment plan, and sometimes, I would just send a couple of checks, two or three checks, and that would take care of it.”3 This happened for tax years 1998 through 2008.4 He admitted he became accustomed to having extra money. He owes a $27,000 federal income tax lien that was filed in 2005 (SOR ¶ 1.a). He had two other tax liens that were filed in July 2002 and July 2000. They have been satisfied. It is unknown what tax years they pertained to. Applicant stated that in 2009, because his security clearance was in jeopardy, he realized he needed to address his past tax debts and the 2005 tax lien. He admitted he was aware he was required to pay his income taxes and each year he failed to pay the amount owed.5 In December 2009, Applicant contacted a company to help him resolve his tax lien. He stated he paid the company $3,500 to help him settle his IRS debt. He provided a copy of the agreement and proof that he made a $500 payment to the company.6 He stated the total tax debt was reduced to $12,000. However, the documents he provided do not show that the Internal Revenue Service (IRS) agreed to settle his tax debt for a 1 Hearing Exhibit I is Department Counsel’s response to the additional documents. 2 Tr. 11, 23-25. 3 Tr. 27. 4 AE H. This document from the Internal Revenue Service shows Applicant owes back taxes for tax years 1999 through 2008. It appears that he has satisfied the tax debt for 1999. The other years remain unpaid. 5 Tr. 25-31, 64-78; GE 7, 8, 9. 6 Answer to SOR. 3 lesser amount. Applicant entered into an installment agreement with the IRS in April 2010. He started a payment plan with the IRS in July 2010 to pay $300 a month until the full tax debt for tax years 1999 through 2008 is paid in full. This includes penalties and interest. Applicant provided documents to show he made payments from July 2010 to November 2010. No proof of payment documents were provided for December 2010 and January 2011.7 The debt in SOR ¶ 1.b ($1,150) pertains to an insurance claim for a vehicle accident that occurred in 2003. Applicant stated he believed that this amount was paid by his insurance company. He stated he received a letter from his insurance company in 2005 telling him the debt was paid. He stated that he also received another letter after 2005 advising him he still owed the balance. He was unsure how long ago he received the letter. Applicant did not provide documents to substantiate the debt is paid or resolved8 The debt in SOR ¶ 1.c ($211) is for a credit card Applicant obtained approximately a year ago. He stated he would preload money on it. He loaded $300 on the card and used it, but stated he did not use more than the balance. He then received a statement advising him that he owed $211. He went to the creditor to address the problem and he paid the debt. He provided a document showing that the original creditor closed the account and the account was sold. It is unclear if this account is now held by another creditor. However, I find Applicant paid the original creditor in January 2011 what he was told he owed and the debt is resolved.9 The debt in SOR ¶ 1.d ($790) is a telephone account. Applicant stated the debt was for telephone services at a place he lived when he was married to his first wife. After he moved out of the residence, his ex-wife continued to use the service, and she did not pay the bills. Applicant contacted the creditor and resolved the debt through a payment plan. The debt is paid.10 The debt in SOR ¶ 1.e ($5,000) is for the deficiency owed on a car loan after the car was repossessed. Applicant purchased the vehicle in 2006. He later lost his job and was unemployed for a period of time, and could not make the car payments. He contacted the creditor, who agreed to suspend his payments for a period of time and extend the payment schedule. After the period of suspension was over, Applicant still could not make the car payments, so he returned the car to the creditor. He was offered a $5,000 settlement, but could not pay it. He then offered to pay $2,500, but the creditor 7 Tr.27-31; AE F, G, H; The SOR alleges a 2005 federal tax lien. Additional tax debts that were not specifically alleged in the SOR will not be used for disqualifying purposes. They will be used in assessing Applicant’s overall financial situation and credibility, in the application of mitigating conditions, and in analyzing the “whole person.” 8 Tr. 31-34, 78-79. 9 Tr. 34-36; 79-83, 106-108; AE A, K. 10 Tr. 36-37; AE C. 4 would not accept it. The vehicle was sold and Applicant stated he thought he had to pay only the deficiency. He believed he made three payments of $150 to the creditor in early 2010 and then stopped. He stated he recently contacted the creditor and they agreed that he could send them $500. He told them he could give them $250 immediately, and the rest two weeks later. After his hearing he sent them $500 on February 14, 2011. The agreement calls for him to make consistent monthly payments of $150.11 Applicant completed his security clearance application (SCA) on October 8, 2008. Section 22 asked him if any of the following had happened to him in the past seven years: fired from a job; quit a job after being told you would be fired; left a job by mutual agreement following allegations of misconduct; left a job by mutual agreement following allegations of unsatisfactory performance; left a job for other reasons under unfavorable circumstances. Applicant answered “no.” Applicant was terminated for cause from Company A in approximately December 2007.12 He explained he had a verbal altercation with a project manager. He testified as follows: After I said that, the lead guy, which was like a supervisor for us, he asked me to go into the hallway, and when he came back to talk to me, I looked [at] the expression of his face like, “hey, you messed up.” After that, I came to work the next day, went into the locker room and it was just a strange feeling. It was just a strange feeling, and I’m trying to make sense of this, but later on, I walked back out to my vehicle, waiting for someone to come to show, and eventually, he came, I saw my supervisor, the lead guy, and he said, “Hey, you’re not welcome here no more.” That was it. He said, “Man, when you opened your mouth yesterday you made it bad. How come you didn’t allow me to talk for you,” and that was it. He asked me that I turn my badge in. I said, “sure.” I said, ‘the badge is in the office”, and that was it.13 Applicant further stated that he left the company and never returned. He stated he never received anything in writing. He stated he did not list this information on his SCA because he did not think he was terminated. He stated it never crossed his mind when he was completing the SCA. He said he did not think he was terminated because no one called him into an office and said: “[Applicant], your service is no longer needed or you did this, or you said this, and we won’t tolerate that. Turn in your badge.”14 He stated he did not believe he was terminated because “It wasn’t done in a professional manner. It wasn’t done by a supervisor. It was done by a lead person, basically, an employee.”15 He then stated the person who talked to him “was acting as a supervisor” 11 Tr. 37-44, 83-90; AE C, I, J. 12 GE 5. 13 Tr. 49. 14 Tr. 50. 15 Tr. 45-52. 5 but he was “more like, well, a lead person, and he just told me what was going on, and I put two and two together and left the premises.”16 Applicant did not explain why he did not list on his SCA that he left the job under adverse circumstances. Applicant stated his omission was not deliberate. Applicant was interviewed by an Office of Personnel Management (OPM) investigator on November 10, 2008. The summary of his interview stated: By oversight [Applicant] listed the incorrect dates for his employment with [Company A]. * * * [He reported that from 1/2008 to 6/2008 he worked for [Company A] as an unarmed security officer. * * * All other information regarding [Applicant’s] employments [are] correct on the case papers. * * * [Applicant] reported that he has never been fired from any of his jobs. Applicant confirmed that when he was interviewed by an OPM investigator on November 10, 2008, they reviewed together each question on the SCA. Applicant’s explanations for failing to disclose his past employment history are not credible. I find he intentionally failed to disclose on his SCA that he was terminated or released from Company A under adverse conditions. He later had an opportunity to explain and disclose his employment history to the OPM investigator and he continued to be deceptive.17 Applicant worked for a company from January 2008 to June 2008. He was told by a friend there was an opportunity for a better job. He stated he gave his employer two weeks notice that he would be leaving their employment. He stated he failed to report to work the last two days, but did go in to retrieve his paycheck. He stated he was chastised by the branch manager and told he would not find another job. He did not believe he was terminated and stated that he did not receive anything in writing from the company. He did not list this information on his SCA. I find there is insufficient evidence to conclude that Applicant was involuntarily terminated because he had already submitted his notice of resignation.18 16 Tr. 52. 17 Tr. 108-111; GE 4. 18 Tr. 53-57 6 Section 28 of the SCA asked Applicant about his financial delinquencies. It asked: “In the last seven years have you been over 180 days delinquent on any debt(s)?” It also asked: “Are you currently over 90 days delinquent on any debt(s)?” Applicant answered “no” to both questions and failed to disclose his past delinquencies. The summary of Applicant’s OPM interview states as follows: [Applicant] reported he does not know anything about any tax lien that he might have. [Applicant] reported that he is not aware of any judgments that might exist against him. [Applicant] reported that in 12/2005 he paid back some back taxes he had. He reported that he made monthly payments until it was paid off. He could not provide any other information about this.19 He stated at his hearing: Applicant: [A]t the time when I was filling out the form, the paperwork, I wasn’t even thinking about the taxes that’s been in my life for the past couple years, several years, I wasn’t even thinking about that. I’m thinking about the credit card bill, maybe a gym bill, stuff like that, and I put down “no.” And I had no idea about the taxes.20 Applicant’s attorney: You did know about the tax debt? Applicant’s response: Yes. Applicant’s attorney: Was it your intention to disclose the tax debt? Applicant’s response: Yes, it was. Applicant stated that he disclosed his employment issues and delinquent debts to the Government.21 When asked by Department Counsel when he disclosed them, he responded he could not recall when. He believed he provided some paperwork to his company.22 He admitted the OPM investigator asked him about his prior employment, but stated he did not believe he was terminated, but did concur he was asked to leave. He admitted he did not disclose that information to the investigator.23 He admitted he 19 GE 4. 20 Tr. 58. 21 Tr. 60. 22 Tr. 60-61. 23 Tr. 62-63. 7 was asked by the investigator about delinquent debts over 180 days and he told the investigator he did not have any.24 He was asked what years he was referring to when he stated he had paid some back taxes in December 2005. He could not recall. He admitted he had been in debt to the IRS prior to the 2005 tax lien.25 Applicant stated he did not have the money to pay his annual federal income taxes. Each year when the taxes became due he did not pay them. He did not address the tax problem until 2009. I find he was aware of his tax debts and intentionally failed to disclose his financial delinquencies. Policies When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are used in evaluating an applicant’s eligibility for access to classified information. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), the entire process is a conscientious scrutiny of a number of variables known as the “whole-person concept.” The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision. The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel and has the ultimate burden of persuasion to obtain a favorable security decision.” A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The 24 Tr. 64. 25 Id. 8 Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of potential, rather than actual, risk of compromise of classified information. Section 7 of Executive Order 10865 provides that decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information). Analysis Guideline F, Financial Considerations The security concern for Financial Considerations is set out in AG & 18: Failure or inability to live within one=s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual=s reliability, trustworthiness and ability to protect classified information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. The guideline notes several conditions that could raise security concerns. I have considered all of the disqualifying conditions under AG & 19, and the following are potentially applicable: (a) inability or unwillingness to satisfy debts; and (c) a history of not meeting financial obligations. Applicant has three delinquent debts totaling approximately $33,000 that are unpaid or unresolved. I find there is sufficient evidence to raise these disqualifying conditions. The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. I have considered the following mitigating conditions under AG ¶ 20: (a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual=s current reliability, trustworthiness, or good judgment; 9 (b) the conditions that resulted in the financial problem were largely beyond the person=s control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation), and the individual acted responsibly under the circumstances; (c) the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control; (d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts; and (e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue. Applicant resolved two of his delinquent debts. He has a $27,000 tax lien from 2005. He admitted he repeatedly failed to withhold from his pay sufficient federal income taxes and then he would be unable to pay his taxes each year they became due. His actions continued until 2008. He has an installment agreement with the IRS to pay $300 for his past taxes. He did not begin to address the debt until his security clearance was in jeopardy. He has an agreement to make payments to resolve the debt in SOR ¶ 1.e. He did not take action to address this debt until right before his hearing. He disputes he owes the debt in SOR ¶ 1.b, but failed to provide documents to support his position. I find that AG ¶ 20(a) is not established because Applicant’s delinquent debts are ongoing, and not the result of circumstances making them unlikely to recur. His actions in repeatedly failing to pay his federal income taxes cast doubt on his current reliability, trustworthiness and good judgment. Applicant stated that he had a period of unemployment and could not make the payments on his car. The car was repossessed. It appears one period of unemployment was when he was terminated for cause by his employer. He may have experienced short periods of unemployment when he was working as a contractor and the contract would terminate. However, it is difficult to determine how often and when they occurred because Applicant did not list any periods of unemployment on his SCA. His short periods of unemployment were beyond his control. For full application of AG ¶ 20(b) Applicant must have acted responsibly under the circumstances. Applicant made a few small payments on his car debt and then did not do anything until shortly before his hearing. He has been employed steadily since 2008. Applicant failed to have money withheld for his federal income taxes, which was within his control. Applicant did not address his financial problems until his security clearance became an issue. I find AG ¶ 20(b) only partially applies. Applicant did not provide evidence that he has received financial counseling. There is some evidence to support that he is paying his IRS tax debt. However, he did 10 not provide documentation that he has made the $300 payments for the past two months. He recently negotiated a settlement for the car repossession debt, made an initial payment, but has not yet established a track record of payments. Therefore, I find AG ¶ 20(c) partially applies. Under the circumstances, I find Applicant did not make good-faith efforts to resolve his debts. It was not until Applicant became concerned about his security clearance that he began to address his unpaid tax lien and the repossession debt. He has paid two small delinquent debts. He did not provide evidence to support his position that his insurance company resolved the debt in SOR ¶ 1.b. I find AG ¶¶ 20(d) and 20(e) do not apply. Guideline E, Personal Conduct AG ¶ 15 expresses the security concern pertaining to personal conduct; Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual's reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process. AG ¶ 16 describes conditions that could raise a security concern and may be disqualifying. I have specifically considered: (a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities; and (e) personal conduct, or concealment of information about one’s conduct, that creates a vulnerability to exploitation, manipulation, or duress, such as (1) engaging activities which, if known, may affect the person’s personal, professional, or community standing. Applicant deliberately failed to disclose relevant facts on his October 2008 SCA. He intentionally failed to disclose he was terminated for cause from a job. He intentionally failed to disclose he had financial delinquencies more than 90 days overdue and more than 180 days delinquent. I find the above disqualifying conditions apply to Applicant’s personal conduct. The guideline also includes conditions that could mitigate security concerns arising from personal conduct. I have considered the following mitigating conditions under AG ¶ 17: 11 (a) the individual made prompt, good-faith efforts to correct the omission, concealment, or falsification before being confronted with the facts; (b) the refusal or failure to cooperate, omission, or concealment was caused or significantly contributed to by improper or inadequate advice of authorized personnel or legal counsel advising or instructing the individual specifically concerning the security clearance process. Upon being made aware of the requirement to cooperate or provide the information, the individual cooperated fully and truthfully; (c) the offense is so minor, or so much time has passed, or the behavior is so infrequent, or it happened under such unique circumstances that it is unlikely to recur and does not cast doubt on the individual’s reliability, trustworthiness, or good judgment; (d) the individual has acknowledged the behavior and obtained counseling to change the behavior or taken other positive steps to alleviate the stressors, circumstances, or factors that caused untrustworthy, unreliable, or other inappropriate behavior, and such behavior is unlikely to recur; and (e) the individual has taken positive steps to reduce or eliminate vulnerability to exploitation, manipulation, or duress. There is no evidence that Applicant made prompt, good-faith efforts to correct his omissions. To the contrary, he admitted that when he was interviewed by an OPM investigator, they reviewed each question, and he told the investigator that he had owed some taxes in the past, but did not any longer. This was false, as he was aware he had failed to pay his taxes for many years, up to and including 2008, and they remained unpaid. He was aware his car was voluntarily repossessed when he could no longer afford the payments, and that he owed the deficiency amount on the car loan. He failed to list he had delinquent debts on his SCA. He was also aware he left a job under adverse circumstances when he was terminated for cause. His explanations were not credible. His omissions are not minor nor did they occur under unique circumstances. I find his omissions cast doubt on his reliability, trustworthiness, and good judgment. There is no evidence he received improper advice during the security clearance process. Therefore, I find AG ¶¶ 17(a), 17(b), and 17(c) do not apply. There is insufficient evidence to apply AG ¶¶ 17(d) or 17(e). Applicant has not acknowledged his behavior or obtained counseling, nor has he provided evidence to conclude his behavior is unlikely to recur. I find that the is insufficient evidence to conclude Applicant intentionally failed to disclose the circumstances regarding his employment, when he had already submitted his resignation and failed to report for his last two days of work. Whole-Person Concept Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s 12 conduct and all the relevant circumstances. The administrative judge should consider the nine adjudicative process factors listed at AG ¶ 2(a): (1) the nature, extent, and seriousness of the conduct; (2) the circumstances surrounding the conduct, to include knowledgeable participation; (3) the frequency and recency of the conduct; (4) the individual’s age and maturity at the time of the conduct; (5) the extent to which participation is voluntary; (6) the presence or absence of rehabilitation and other permanent behavioral changes; (7) the motivation for the conduct; (8) the potential for pressure, coercion, exploitation, or duress; and (9) the likelihood of continuation or recurrence. Under AG ¶ 2(c), the ultimate determination of whether to grant eligibility for a security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my comments under Guidelines F and E in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under those guidelines, but some warrant additional comment. Applicant has held a security clearance for many years without incident. He was aware he was not paying his federal income taxes for many years and did not begin to address the issue until his security clearance was in jeopardy. He intentionally failed to disclose his tax lien and other delinquent debts on his SCA. He also intentionally failed to disclose he was terminated from his employment under adverse circumstances. Applicant recently began to make payments on his federal tax lien. He recently addressed the car repossession debt. He paid two small debts, but he failed to provide evidence he has resolved the insurance debt. Applicant has not yet established a consistent track record of financial stability. Applicant repeatedly failed to provide truthful answers on his SCA. He has failed to meet his burden of persuasion. Overall, the record evidence leaves me with questions and doubts about Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant failed to mitigate the security concerns arising under the guidelines for Financial Considerations and Personal Conduct. Formal Findings Formal findings for or against Applicant on the allegations set forth in the SOR, as required by section E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraph 1.a: Against Applicant Subparagraph 1.b: Against Applicant Subparagraph 1.c: For Applicant Subparagraph 1.d: For Applicant 13 Subparagraph 1.e: Against Applicant Paragraph 2, Guideline E: AGAINST APPLICANT Subparagraph 2.a(1): Against Applicant Subparagraph 2.a(2): For Applicant Subparagraph 2.b: Against Applicant Subparagraph 2.c: Against Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant Applicant a security clearance. Eligibility for access to classified information is denied. _____________________________ Carol G. Ricciardello Administrative Judge