1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ---------------------------------- ) ISCR Case No. 11-02971 ) Applicant for Security Clearance ) Appearances For Government: Daniel F. Crowley, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ LEONARD, Michael H., Administrative Judge: Applicant contests the Defense Department’s intent to deny or revoke his eligibility for a security clearance to work in the defense industry. The evidence shows Applicant has a history of financial problems or difficulties that are currently unresolved. Applicant failed to present sufficient evidence to overcome the security concerns. For the reasons discussed below, this case is decided against Applicant. This case is adjudicated under Executive Order 10865, Safeguarding Classified Information within Industry,1 signed by President Eisenhower on February 20, 1960, as amended, as well as DoD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program , dated January 2, 1992, as amended (Directive). In addition, the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), effective within the Defense Department on September 1, 2006, apply here. The AG were published in the Federal Register and codified in 32 C.F.R. § 154, Appendix H (2006). The AG replace the guidelines in Enclosure 2 to the Directive. Directive, Enclosure 3, ¶ E3.1.7. 2 The file of relevant material consists of Department Counsel’s written brief and supporting documents, some3 of which may be identified as exhibits in this decision. Exhibit 4. 4 2 Statement of the Case Acting under the relevant Executive Order and DoD Directive, on July 5, 2011,1 the Defense Office of Hearings and Appeals (DOHA) issued a statement of reasons (SOR) explaining it was unable to find that it was clearly consistent with the national interest to grant Applicant access to classified information. The SOR is similar to a complaint, and it detailed the reasons for the action under the security guideline known as Guideline F for financial considerations. Applicant timely answered the SOR. Neither Applicant nor Department Counsel requested a hearing, and so, the case will be decided on the written record.2 On October 5, 2011, Department Counsel submitted a written case consisting of all relevant and material information that could be adduced at a hearing. This so-called3 file of relevant material (FORM) was mailed to Applicant and received by him on October 18, 2011. He then had a 30-day period to reply, setting forth objections, rebuttal, extenuation, mitigation, or explanation. He did not reply. The case was assigned to me on January 19, 2011. Findings of Fact The SOR alleged 23 delinquent accounts ranging in amounts from $51 to $2,897 for a total of about $14,564. In Applicant’s four-page reply to the SOR (Answer), he admitted 12 debts and denied 11 debts. He also provided brief explanations for his admissions or denials. His admissions are accepted and adopted and incorporated herein as findings of fact. In addition, the following findings of fact are supported by substantial evidence. Applicant is a 46-year-old employee of a federal contractor. He has worked as a sheet-metal mechanic for a company engaged in defense contracting since August 2009. According to his security clearance application, he has been continuously employed as a sheet-metal mechanic for several companies since at least 2003. His4 application reports no periods of unemployment. Exhibits 5 and 7. 5 Department of Navy v. Egan, 484 U.S. 518, 528 (1988) (“it should be obvious that no one has a ‘right’ to a6 security clearance”); Duane v. Department of Defense, 275 F.3d 988, 994 (10 Cir. 2002) (no right to ath security clearance). 484 U.S. at 531.7 Directive, ¶ 3.2. 8 Directive, ¶ 3.2. 9 ISCR Case No. 02-18663 (App. Bd. Mar. 23, 2004).10 Directive, Enclosure 3, ¶ E3.1.14.11 Directive, Enclosure 3, ¶ E3.1.15.12 3 The 23 delinquent accounts in the SOR are collection or charged-off accounts, and they are established by Applicant’s admissions or the credit reports or both.5 Concerning his denials in his Answer, he claims that those accounts are not his and that he is not responsible for the delinquency. Aside from his written denials, he did not present any documentary evidence (e.g., account statements, financial records, correspondence, settlement offers, credit reports, etc.) showing he has paid, settled, reduced the balance owed, disputed, or otherwise resolved any of the accounts. And he did not present documentary evidence rebutting, contradicting, or otherwise invalidating the information in the credit reports relied on by Department Counsel. Law and Policies It is well-established law that no one has a right to a security clearance. As6 noted by the Supreme Court in Department of Navy v. Egan, “the clearly consistent standard indicates that security clearance determinations should err, if they must, on the side of denials.” Under Egan, Executive Order 10865, and the Directive, any doubt7 about whether an applicant should be allowed access to classified information will be resolved in favor of protecting national security. A favorable clearance decision establishes eligibility of an applicant to be granted a security clearance for access to confidential, secret, or top-secret information. An8 unfavorable decision (1) denies any application, (2) revokes any existing security clearance, and (3) prevents access to classified information at any level. 9 There is no presumption in favor of granting, renewing, or continuing eligibility for access to classified information. The Government has the burden of presenting10 evidence to establish facts alleged in the SOR that have been controverted. An11 applicant is responsible for presenting evidence to refute, explain, extenuate, or mitigate facts that have been admitted or proven. In addition, an applicant has the ultimate12 Directive, Enclosure 3, ¶ E3.1.15.13 Egan, 484 U.S. at 531. 14 ISCR Case No. 01-20700 (App. Bd. Dec. 19, 2002) (citations omitted).15 Executive Order 10865, § 7.16 AG ¶¶ 18, 19, and 20 (setting forth the security concern and the disqualifying and mitigating conditions). 17 ISCR Case No. 95-0611 (App. Bd. May 2, 1996) (It is well settled that “the security suitability of an applicant18 is placed into question when that applicant is shown to have a history of excessive indebtedness or recurring financial difficulties.”) (citation omitted); and see ISCR Case No. 07-09966 (App. Bd. Jun. 25, 2008) (In security clearance cases, “the federal government is entitled to consider the facts and circumstances surrounding an applicant’s conduct in incurring and failing to satisfy the debt in a timely manner.”) (citation omitted). AG ¶ 18. 19 4 burden of persuasion to obtain a favorable clearance decision. In Egan, the Supreme13 Court stated that the burden of proof is less than a preponderance of the evidence.14 The DOHA Appeal Board has followed the Court’s reasoning, and a judge’s findings of fact are reviewed under the substantial-evidence standard.15 The AG set forth the relevant standards to consider when evaluating a person’s security clearance eligibility, including disqualifying conditions and mitigating conditions for each guideline. In addition, each clearance decision must be a commonsense decision based upon consideration of the relevant and material information, the pertinent criteria and adjudication factors, and the whole-person concept. The Government must be able to have a high degree of trust and confidence in those persons to whom it grants access to classified information. The decision to deny a person a security clearance is not a determination of an applicant’s loyalty. Instead, it16 is a determination that an applicant has not met the strict guidelines the President has established for granting eligibility for access. Analysis Under Guideline F for financial considerations, the suitability of an applicant17 may be questioned or put into doubt when that applicant has a history of excessive indebtedness or financial problems or difficulties. The overall concern under Guideline18 F is: 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. 19 AG ¶ 19(a). 20 AG ¶ 19(c). 21 AG ¶ 20(a)–(f). 22 ISCR Case No. 99-0201 (App. Bd. Oct. 12, 1999) (“[T]he concept of ‘good faith’ requires a showing that a23 person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation. Such standards are consistent with the level of conduct that must be expected of persons granted a security clearance.”) (citations omitted); ISCR Case No. 02-30304 (App. Bd. Apr. 20, 2004) (relying on a legally available option, such as Chapter 7 bankruptcy, is not a good-faith effort) (citations omitted); ISCR Case No. 99-9020 (App. Bd. Jun. 4, 2001) (relying on the running of a statute of limitations to avoid paying a debt is not a good-faith effort). 5 Similarly, an individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information within the defense industry. The evidence here supports a conclusion that Applicant has a history of financial problems or difficulties. The multiple delinquent accounts raise security concerns because they indicate inability or unwillingness to satisfy debts and a history of not20 meeting financial obligations within the meaning of Guideline F. The facts are sufficient21 to establish these two disqualifying conditions. There are six mitigating conditions to consider under Guideline F. Any of the22 following may mitigate security concerns: 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; AG ¶ 20(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; AG ¶ 20(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; AG ¶ 20(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts;23 AG ¶ 20(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 AG ¶ 2(a)(1)–(9).24 6 documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue; or AG ¶ 20(f) the affluence resulted from a legal source of income. I have considered all the mitigating conditions, and none, individually or in combination, are sufficient to overcome and mitigate the security concerns. The evidence supports a conclusion that Applicant’s financial house is in disrepair. What is missing here is a documented effort showing that he has made progress in resolving his multiple delinquent accounts. In other words, he has not (1) articulated a comprehensive approach for addressing his multiple delinquent accounts; (2) reasonably documented actions taken in furtherance of that approach; and (3) demonstrated a not insubstantial reduction in indebtedness and an improvement to his financial situation. His statements that he has contacted creditors, made payment arrangements, or intends to make payments in the future are insufficient evidence in mitigation. It is too soon to tell if or when Applicant will put his financial house in good order. To conclude, the evidence of Applicant’s financial ongoing problems justifies current doubts about his judgment, reliability, and trustworthiness. Following Egan and the clearly-consistent standard, I resolve these doubts in favor of protecting national security. In reaching this conclusion, I gave due consideration to the whole-person concept. Nevertheless, Applicant did not meet his ultimate burden of persuasion to24 obtain a favorable clearance decision. Formal Findings The formal findings on the SOR allegations are as follows: Paragraph 1, Guideline F: Against Applicant Subparagraphs 1.a–1.w: Against Applicant Conclusion In light of the record as a whole, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied. Michael H. Leonard Administrative Judge