1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [Redacted] ) ISCR Case No. 10-06274 ) Applicant for Security Clearance ) Appearances For Government: Braden M. Murphy, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ FOREMAN, LeRoy F., Administrative Judge: This case involves security concerns raised under Guidelines F (Financial Considerations) and E (Personal Conduct). Eligibility for access to classified information is denied. Statement of the Case Applicant submitted a security clearance application (SCA) on February 18, 2010. On March 11, 2011, the Defense Office of Hearings and Appeals (DOHA) sent him a Statement of Reasons (SOR) detailing the basis for its preliminary decision to deny his application, citing security concerns under Guidelines F and E. DOHA acted 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) implemented by the Department of Defense on September 1, 2006. Applicant received the SOR on March 15, 2011; answered it on March 21, 2011; and requested a hearing before an administrative judge. DOHA received the request on 2 March 24, 2011. Department Counsel was ready to proceed on May 2, 2011, and the case was assigned to me on May 5, 2011. DOHA issued a notice of hearing on May 6, 2011, scheduling the hearing for May 26, 2011. I convened the hearing as scheduled. Government Exhibits (GX) 1 through 6 were admitted without objection. Applicant testified and submitted Applicant’s Exhibits (AX) A through R, which were admitted without objection. I kept the record open until June 10, 2011, to enable Applicant to submit additional information. He timely submitted AX S through DD, which were admitted without objection. Department Counsel’s comments regarding AX S through DD are attached to the record as Hearing Exhibit I. DOHA received the transcript (Tr.) on June 6, 2011. Findings of Fact In his answer to the SOR, Applicant admitted the allegations in SOR ¶¶ 1.a-1.d, 1.f-1.m, 1.o, and 1.s-1.u. He denied SOR ¶¶ 1.e, 1.n, and 1.p-1.r. He did not admit or deny SOR ¶ 1.v. He denied the allegations in SOR ¶¶ 2.a-2.d. His admissions in his answer and at the hearing are incorporated in my findings of fact. Applicant is a 28-year-old network administrator employed by a federal contractor since October 2008. He graduated from high school in June 2001, attended a technical college from July 2001 to October 2002, and received an associate’s degree in network information systems. (Tr. 69.) He worked as a part-time intern in a government office while attending the technical college. (Tr. 72.) He worked for another federal contractor as a computer specialist from May 2001 to October 2008. Applicant has never married and never lived apart from his parents. (Tr. 45-46.) His mother began having medical problems in 2002 and is unable to work outside the home. His father, a mail carrier, was injured in 2002 and again in 2007. Each time, his father was unable to work and had insufficient sick leave accrued to cover his absences. (Tr. 47, 59, 76.) Applicant helped pay his parents’ rent and living expenses during his father’s two periods of disability, and he fell behind on his own obligations because he had insufficient income to cover his parents’ obligations as well as his own. (Tr. 43, 65.) Applicant has a three-year-old son. The child’s mother initially had custody and Applicant was obligated to pay child support of $360 per month, which was collected by garnishment of his pay. (GX 3 at 5-6.) He gained custody of his son in July 2010, and he is no longer paying child support. (Tr. 44.) He represented himself at the custody hearing. (Tr. 127.) He received a refund of about $2,000 in child support payments, which he used to pay bills and take care of household expenses. (Tr. 126.) The SOR alleges 22 delinquent debts totaling about $29,670. The table below summarizes the evidence regarding the delinquent debts alleged in the SOR. 3 SOR Debt Amount Answer to SOR Status Evidence 1.a Judgment (credit card) $1,270 Admit Making $25 payments GX 4, 5, 6; AX J, X 1.b Credit card (charged off) $2,397 Admit Making $25 payments GX 4; AX E, G 1.c Credit card (charged off) $1,014 Admit Making $25 payments GX 4; AX C 1.d Collection $848 Admit Settlement offer received; no payments GX 4; AX K 1.e Collection $848 Deny Duplicate of 1.d GX 4 1.f Collection $939 Admit Unresolved GX 4 1.g Collection $575 Admit Making $25 payments GX 4; AX H, T, V, Y 1.h Credit card (collection) $765 Admit Settlement offer received; no payments GX 4; AX W 1.i Medical (collection) $402 Admit Making $25 payments GX 4; AX O, Z 1.j Newspaper (collection) $499 Admit Making $25 payments GX 4; AX Q, Z 1.k Credit card (collection) $666 Admit Settled GX 4; AX B, D, S 1.l Student loan (collection) $13,491 Admit Unresolved GX 4 at 2 1.m Credit card (charged off) $2,694 Admit Unresolved GX 2 1.n Student loan (collection) $632 Deny Unresolved GX 2 1.o Satellite TV (collection) $248 Admit Settlement offer received; no payments GX 2; AX A; Tr. 81-84 1.p Student loan $370 Deny Debt transferred to 1.l GX 2 at 8; GX 4 at 2-3 1.q Student loan $260 Deny Debt transferred to 1.l GX 2 at 8; GX 4 at 2-3 1.r Bank overdraft (collection) $686 Deny Payment agreement made; no payments GX 2; AX I; Tr. 86 1.s Credit card (charged off) $541 Admit Making $25 payments GX 2; AX F, U 1.t Medical (collection) $100 Admit Unresolved GX 2 1.u Medical (collection) $110 Admit Unresolved GX 2 1.v Car insurance (collection) $315 No response Unresolved GX 2 4 Applicant’s mother describes him as hardworking, dedicated, determined, and honest. (Tr. 43; AX DD.) She testified that the delinquent account alleged in SOR ¶ 1.j and another delinquent account not alleged in the SOR were incurred when she made purchases and Applicant signed the purchase receipts. (Tr. 44, 56-57.) Applicant has never sought or received financial counseling. He admitted at the hearing that counseling might be helpful. (Tr. 113.) As of the date of the hearing, he had no money in his savings and checking accounts. He testified that he lives paycheck to paycheck. (Tr. 122-23.) Applicant indicated on his SCA that he received a security clearance in May 2002, and he stated at the hearing that he had a clearance. (GX 1 at 35; Tr. 13.) He testified that while working as an intern he “had to fill out a bunch of pages of clearance” regarding his “background information and everything.” (Tr. 73.) However, he later testified that he never previously executed a document like his most recent SCA. (Tr. 115).) Department Counsel was unable to produce a previous security clearance application. (Tr. 74.) When Applicant submitted his SCA in February 2010, he answered “No” to question 26g, asking if during the last seven years he had bills or debts turned over to a collection agency; question 26h, asking if during the last seven years he had any account or credit card suspended, charged off, or cancelled for failing to pay as agreed; question 26m, asking if during the last seven years he had been more than 180 days delinquent on any debts; and question 26n, asking if he was currently more than 90 days delinquent on any debts. He did not disclose any of the collection actions, charged-off debts, or delinquent accounts reflected in his credit reports. Applicant also answered “no” to question 26e, asking if he had a judgment entered against him in the last seven years, and question 26k, asking if his pay was garnished in the last seven years. The judgment alleged in SOR ¶ 1.a was filed in April 2010, after he had submitted his application. However, he did not disclose that his pay was garnished for child support payments. His answer regarding garnishments is not alleged in the SOR. Applicant made numerous mistakes on his security clearance application regarding the dates of employment, periods of unemployment, locations of employment, and his son’s date of birth. In a security interview in March 2010, he denied intentionally falsifying his application. (GX 3.) In his answer to the SOR and at the hearing, Applicant stated that he did not intend to answer the financial questions falsely, but that he did not understand the questions. Regarding question 26g (debts turned over to collection agencies), Applicant admitted that he and his mother began receiving letters from collection agencies about unpaid debts in 2003 or 2004, but he did not answer “yes” to question 26g because he was “going through a lot” at the time and everything was “confusing a lot” during that time. (Tr. 120.) He testified that, even though he was receiving letters from collection 5 agencies, he did not know that his delinquent debts had been turned over to the collection agencies. (Tr. 117-18.) He told a security investigator that he reviewed his credit report in early 2009, but that credit report is not in the record. (GX 3 at 6.) Thus, I cannot determine if it reflected that collection agencies had taken over the debts alleged in the SOR. His mother testified that he negotiated with his creditors, but she did not state whether he negotiated with the original creditors or the collection agencies. (Tr. 55.) Regarding Applicant’s negative answer to question 26h (accounts charged off, suspended, or cancelled), Applicant’s credit report dated March 3, 2010, approximately two weeks after he submitted his security clearance application, reflected several charged off or cancelled accounts. (GX 2 at 6, 14, 15.) However, there is no evidence that those accounts were reflected on his earlier credit reports or that he knew from other sources that the accounts had been charged off or cancelled. Regarding Applicant’s negative answer to questions 26m (debts delinquent more than 120 days in last seven years) and 26n (debts currently delinquent more than 90 days), he told a security investigator in March 2010 that he did not know what “delinquent” meant. (GX 3 at 13). He made the same claim at the hearing. (Tr. 130-31.) Applicant has received numerous certificates of appreciation for his outstanding information technology support. (AX AA.) His performance appraisal for October 2008 to October 2009 rated him as “exceeding expectations” in most performance categories. (AX BB.) His performance appraisal for the most recent rating period resulted in a five percent “merit increase” in pay. (AX CC.) Policies “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to “control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable. 6 The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. 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 about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993). Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005). An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b). Analysis Guideline F, Financial Considerations The SOR alleges 22 delinquent debts. The security concern under this guideline 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 7 overextended is at risk of having to engage in illegal acts to generate funds. The evidence indicates that the debt alleged in SOR ¶ 1.e is the same debt as alleged in SOR ¶ 1.d. It also indicates that the debts alleged in SOR ¶¶ 1.p and 1.q are included in the debt alleged in SOR ¶ 1.l. When the same conduct is alleged twice in the SOR under the same guideline, one of the duplicative allegations should be resolved in Applicant=s favor. See ISCR Case No. 03-04704 (App. Bd. Sep. 21, 2005) at 3 (same debt alleged twice). Thus, I will resolve SOR ¶¶ 1.e, 1.p, and 1.q in Applicant’s favor. Applicant admitted the debts alleged in SOR ¶¶ 1.a-1.d, 1.f-1.m, 1.o, and 1.s-1.u, and his admissions are corroborated by his credit reports, admitted as GX 2 and 4. The evidence is sufficient to establish two disqualifying conditions under this guideline: AG ¶ 19(a) (“inability or unwillingness to satisfy debts”) and AG ¶ 19(a) (“inability or unwillingness to satisfy debts”). Thus, the burden shifted to Applicant to rebut, explain, extenuate, or mitigate the facts. Security concerns based on financial problems can be mitigated by showing that “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.” AG ¶ 20(a). This mitigating condition is not established because Applicant’s delinquent debts are numerous, ongoing, and did not occur under circumstances making recurrence unlikely. Security concerns under this guideline also can be mitigated by showing that “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.” AG ¶ 20(b). The medical problems of Applicant’s parents and the financial difficulties arising from them were circumstances beyond Applicant’s control. While he had no legal obligation to financially assist his parents, his decision to assist them was compassionate and reasonable. However, the evidence indicates that he spent money and incurred debts without serious consideration of his limited income. Some of the debts were incurred for nonessential services such as newspaper subscriptions (SOR ¶ 1.j) and satellite TV service (SOR ¶ 1.o). To his credit, he has acted responsibly regarding some of the debts, negotiating settlement agreements and making small payments. He settled the credit card debt alleged in SOR ¶ 1.k. I conclude that this mitigating condition is established for the debts alleged in SOR ¶¶ 1.a, 1.b, 1.c, 1.g, 1.j, 1.k, and 1.s, but not for the remaining debts alleged in the SOR. Security concerns under this guideline also can be mitigated by showing that “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.” AG ¶ 20(c). This mitigating condition is not established because Applicant has not sought or received financial counseling. 8 Security concerns under this guideline also can be mitigated by showing that “the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.” AG ¶ 20(d). Good faith means acting in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation. ISCR Case No. 99-0201, 1999 WL 1442346 at *4 (App. Bd. Oct. 12, 1999). “A security clearance adjudication is not a proceeding aimed at collecting an applicant’s personal debts. Rather, a security clearance adjudication is a proceeding aimed at evaluating an applicant’s judgment, reliability, and trustworthiness in order to make a decision about an applicant’s security eligibility.” ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010.) An applicant is not required, as a matter of law, to establish resolution of every debt alleged in the SOR. An applicant need only establish a plan to resolve financial problems and take significant actions to implement the plan. There is no requirement that an applicant make payments on all delinquent debts simultaneously, nor is there a requirement that the debts alleged in the SOR be paid first. See ISCR Case No. 07- 06482 at 2-3 (App. Bd. May 21, 2008). I conclude that AG ¶ 20(d) is partially established, because Applicant has settled the debt alleged in SOR ¶ 1.k, and has been making payments on the debts alleged in SOR ¶¶ 1.a, 1.b, 1.c, 1.g, 1.j, and 1.s. He has negotiated a payment agreement for the debt alleged in SOR ¶ 1.r and received settlement offers for the debts alleged in SOR ¶¶ 1.d, 1.h, and 1.o, but he has not made any payments on these four debts and does not appear to have sufficient income to make any payments on them. I conclude that AG ¶ 20(d) is established for the debts alleged in SOR ¶¶ 1.a, 1.b, 1.c, 1.g, 1.j, 1.k, and 1.s, but not for the remaining debts alleged in the SOR. Security concerns under this guideline also can be mitigated by showing “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.” AG ¶ 20(e). This mitigating condition is established for the duplicate debts alleged in SOR ¶ 1.e, 1.p, and 1.q. Applicant denied the debts alleged in SOR ¶ 1.n and 1.r, but he has not provided documentation of the basis for disputing SOR ¶ 1.n. He has negotiated a payment agreement for the debt alleged in SOR ¶ 1.r, apparently abandoning his dispute. Thus, I conclude that AG ¶ 20(e) is not established for the debts alleged in SOR ¶¶ 1.n and 1.r. Guideline E, Personal Conduct The SOR alleges that Applicant falsified his SCA by falsely answering “no” to question 26g on his security clearance application, asking if he had any bills or debts turned over to a collection agency (SOR ¶ 2.a); question 26h, asking if he had any accounts or credit cards suspended, charged off, or cancelled (SOR ¶ 2.b); question 26m, asking if he had been more than 180 days delinquent on any debts in the last seven years (SOR ¶ 2.c); and question 26n, asking if he was currently more than 90 9 days delinquent on any debt (SOR ¶ 2.d). The concern under this guideline is set out in AG ¶ 15: 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. The relevant disqualifying condition is “deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire . . . .” AG ¶ 16(a). When a falsification allegation is controverted, as in this case, the Government has the burden of proving it. A misstatement or omission, standing alone, does not prove falsification. An administrative judge must consider the record evidence as a whole to determine an applicant’s state of mind at the time of the omission. See ISCR Case No. 03-09483 at 4 (App. Bd. Nov. 17, 2004). Applicant made many careless mistakes in his security clearance application, suggesting that he did not fully appreciate the importance of providing accurate information. He answered all the financial questions in the negative, knowing that he was deeply in debt. He previously received a clearance in May 2002 and, even though the format of the application may have changed, he knew that his financial problems were a concern. He has never lived away from his parents and is financially inexperienced, but he was able to negotiate payment agreements for several of his delinquent debts. His performance appraisals and numerous commendations indicate that he is intelligent. He was savvy enough to represent himself in a child-custody proceeding. The evidence does not establish that he intentionally falsified his answers question 26g (debts turned over to collection agencies) and question 26h (accounts charged off, suspended, or cancelled), but he has offered no plausible and credible explanation for his negative responses to questions 26k (garnishments), 26m (debts more than 120 days delinquent in the last seven years) and 26n (debts currently more than 90 days delinquent). The SOR does not allege that Applicant falsified his answer to the question about garnishments. Conduct not alleged in the SOR may be considered to assess an applicant=s credibility; to decide whether a particular adjudicative guideline is applicable; to evaluate evidence of extenuation, mitigation, or changed circumstances; to consider whether an applicant has demonstrated successful rehabilitation; or as part of a whole- person analysis. ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006) (citations omitted). I have considered Applicant’s false answer to question 26g for these limited purposes. Based on all the evidence, I conclude that Applicant falsely answered questions 26m and 26n and intentionally concealed his delinquent debts. Thus, I conclude that AG ¶ 16(a) is established. 10 Security concerns raised by intentional omissions from a security clearance application may be mitigated if “the individual made prompt, good-faith efforts to correct the omission, concealment, or falsification before being confronted with the facts.” AG ¶ 17(a). This mitigating condition is not established because Applicant made no attempt to correct his omissions until he was confronted with the facts by a security investigator. Security concerns raised by personal conduct may be mitigated if “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.” AG ¶ 17(c). This mitigating condition is not established because Applicant’s falsifications undermined the integrity of the security clearance process, they are recent, they did not occur under unique circumstances, and they cast doubt on his reliability and trustworthiness. Whole-Person Concept Under the whole-person concept, an administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all relevant circumstances. An 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 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 was only about 21 years old when his parents fell into financial difficulty. He has never lived away from his parents and he has limited financial experience. He has held a security clearance for several years and has performed his duties well, as reflected in his performance appraisals. On the other hand, he is hopelessly in debt and has no clear plan to resolve his financial problems. His lack of candor on his security clearance application and his implausible explanations for his lack of candor raise serious security concerns that are not mitigated. 11 After weighing the disqualifying and mitigating conditions under Guidelines F and E, and evaluating all the evidence in the context of the whole person, I conclude Applicant has not mitigated the security concerns based on financial considerations and personal conduct. Accordingly, I conclude he has not carried his burden of showing that it is clearly consistent with the national interest to continue his eligibility for access to classified information. Formal Findings I make the following formal findings on the allegations in the SOR: Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT Subparagraphs 1.a-1.c: For Applicant Subparagraph 1.d: Against Applicant Subparagraph 1.e: For Applicant Subparagraph 1.f: Against Applicant Subparagraph 1.g: For Applicant Subparagraph 1.h: Against Applicant Subparagraphs 1.i-1.k: For Applicant Subparagraphs 1.l-1.o: Against Applicant Subparagraphs 1.p-1.q: For Applicant Subparagraph 1.r: Against Applicant Subparagraph 1.s: For Applicant Subparagraphs 1.t-1.v: Against Applicant Paragraph 2, Guideline E (Personal Conduct): AGAINST APPLICANT Subparagraphs 2.a-2.b: For Applicant Subparagraphs 2.c-2.d: Against Applicant Conclusion I conclude that it is not clearly consistent with the national interest to continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied. LeRoy F. Foreman Administrative Judge