1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) REDACTED ) ISCR Case No. 11-03244 ) Applicant for Security Clearance ) Appearances For Government: Eric Borgstrom, Esq., Department Counsel For Applicant: James L. DelSordo, Esq. ______________ Decision ______________ MENDEZ, Francisco, Administrative Judge: Applicant failed to mitigate the security concerns arising from his troubled finances, past illegal drug use, and falsification of his security clearance applications. He accumulated over $100,000 in debt and, although he recently filed for bankruptcy to resolve his past-due debts, it is too soon to declare that his financial situation is under control. He used marijuana on multiple occasions between 1991 and 2008. Even though nearly five years have passed since he last used marijuana, Applicant’s promise not to use illegal drugs in the future is unconvincing because he deliberately lied about his past drug use on two separate security clearance applications and used illegal drugs while holding a security clearance. Clearance is denied. Statement of the Case On August 29, 2012, the Department of Defense (DoD), in accordance with DoD Directive 5220.6, as amended (Directive), issued Applicant a Statement of Reasons (SOR), alleging security concerns under Guideline F (Financial Considerations), 2 Guideline H (Drug Involvement), and Guideline E (Personal Conduct).1 On September 20, 2012, Applicant answered the SOR and requested a hearing (Answer). On November 29, 2012, Department Counsel indicated the Government was ready to proceed with a hearing. The case was originally assigned to another judge, but Applicant’s counsel had a conflict on the proposed hearing date of January 14, 2013. The case was continued, and was then re-assigned to me on January 23, 2013. After coordinating with the parties, I scheduled the hearing for March 6, 2013. At hearing, Government Exhibits (Gx.) 1 through 18 and Applicant’s Exhibits (Ax.) A through E were admitted into evidence without objection. Department Counsel also submitted a demonstrative aid, Hearing Exhibit (Hx.) I, which notes each of the debts alleged in the SOR and their purported status. Applicant called two witnesses and testified. He requested additional time to submit a letter from a witness who was unable to attend the hearing. Without objection, I granted said request for additional time. Applicant timely submitted a letter from said witness, which was marked Ax. F and admitted into evidence without objection. DOHA received the hearing transcript (Tr.) on March 14, 2013, and the record closed on March 26, 2013. Findings of Fact Applicant is 42 years old, single, with no children. He earned an engineering degree in 1994 and shortly thereafter started working as a federal contractor. He is currently a program manager, which requires him to access sensitive information to assist the U.S. military. Since 2009, his yearly gross income has been over $100,000.2 Applicant’s financial problems date back to 2006, when he took out a home equity loan of approximately $50,000 “to pay down debts, and catch up on bills.”3 His financial situation worsened the following year when the homeowners association passed an assessment that nearly doubled his condo fees. He spoke to an attorney in 2008, who advised him to file for bankruptcy. Applicant rejected this advice and, instead, retained a mortgage modification firm that counseled him to stop paying his mortgage to improve his prospects of securing a favorable loan modification. Applicant last paid the mortgage on his home in 2010. He was unable to secure a modification and his home went to foreclosure.4 For the past eighteen months, he has been attempting to short sale the property to cure the deficiency owed.5 He owes $195,000 1 The file copy of the SOR is undated, but Applicant stated in his Answer that the SOR was issued on August 29, 2012. 2 Tr. at 36-39, 73-74; Gx. 1; Gx. 14 at 34, Statement of Financial Affairs. 3 Tr. at 100. 4 Tr. at 46-50, 58-67, 98-100; Gx. 1; Gx. 3. 5 Gx. 3 – 4. 3 on his primary mortgage and an additional $50,000 on the equity loan from 2006.6 He moved out of his condo in 2011 and moved into an apartment, paying $450 more per month than his monthly mortgage payment on his condo.7 (SOR ¶ 1.h)8 Applicant also owes over $46,000 for seven non-mortgage related debts. He owes $12,863 for three judgments issued against him in 2008, 2011, and 2012, for nonpayment of his condo association fees. (SOR ¶¶ 1.c - 1.e). He has four delinquent credit card accounts, totaling $33,630. He consolidated the debts in 2010 and made an agreement with the creditors to satisfy the debts through monthly payments, which he made for seven months before unilaterally halting the payments. A creditor for one of his delinquent credit card accounts secured a judgment against him in 2011.9 (SOR ¶¶ 1.b, 1.f, 1.g, and 1.i). Applicant filed a Chapter 13 bankruptcy petition in April 2012, but it was dismissed in July 2012 because he did not include a current certificate of financial counseling.10 (SOR ¶ 1.a) He re-filed in August 2012, with an updated financial counseling certificate and listed approximately $350,000 in liabilities.11 In Schedule J of his bankruptcy petition, Applicant asserted that he had $327 a month in disposable income. This is far less than the $952 in monthly disposable income he claimed just a month earlier in his DoD interrogatory response.12 Applicant submitted, with his bankruptcy petition, a statement regarding his current monthly income. This statement is used to determine the amount of time he would be required to repay his debts through bankruptcy. He asserted, under penalty of perjury, that his monthly gross wages were less than $3,600 per month and, based on said amount, was entitled to a repayment term of only three years.13 He previously disclosed in his DoD interrogatory responses and in his Schedule I that his monthly gross income was about $9,000 per month, which would have required him to repay his debts through bankruptcy for five years.14 He submitted amended Schedules I and J, 6 Gx. 14 at 25, Schedule D; Answer. Applicant’s foreclosure and delinquent mortgage were not alleged, and are only being considered in assessing Applicant’s mitigation case. 7 Tr. at 59-60, 102. 8 The delinquent debt for the home equity loan is alleged twice in the SOR, under ¶¶ 1.h and 1.j. Thus, ¶ 1.j is decided in Applicant’s favor. 9 Answer; Tr. at 58-67, 88-89; Gx. 3; Gx. 16 – 18. See also Gx. 6 – 8. 10 Answer; Gx. 9 – 11. 11 Gx. 14; Tr. at 50-53. 12 Compare, Gx. 14 at 32, with, Gx. 4, Personal Financial Statement (PFS). See also Tr. at 68-69. 13 Gx. 14 at 5-12. 14 Gx. 3, PFS; Gx. 4, PFS; Gx. 14 at 31. See also Gx. 14 at 6 (Per this form, Applicant’s true gross income would require him to repay his debts through bankruptcy for five years). 4 and an amended statement regarding his currently monthly income with the bankruptcy court in November 2012.15 Neither party submitted these revised bankruptcy documents. Applicant testified that he had been paying per the terms of his proposed Chapter 13 bankruptcy plan since September 2012, and submitted proof of payments.16 In January and February 2013, the bankruptcy trustee filed motions to dismiss Applicant’s bankruptcy for “failure to make plan payments.”17 No evidence was submitted as to the resolution of the trustee’s motion to dismiss. As of the close of the record, Applicant’s bankruptcy was awaiting a confirmation hearing.18 Applicant used marijuana from about 1991 to 2008. He used on approximately 12 occasions, including after being granted a security clearance in 2000. He testified that when he was initially granted a security clearance he was unaware that use of marijuana on one’s own personal time was prohibited.19 He knew it was illegal, but he “didn’t think there was anything wrong with it.”20 (SOR ¶¶ 2.a, 2.d) Applicant was arrested in 2006 for possession of marijuana and drug paraphernalia. He admits the marijuana and drug paraphernalia found in the car was his, and he was found guilty. He was sentenced to a drug diversion program and, per the terms of the sentence, was required to submit to two examinations by a licensed physician to determine whether he was drug dependent.21 He complied with the terms of the sentence, including an examination by a licensed physician who provided a favorable diagnosis that he was “free from drug abuse and not drug dependent.”22 (SOR ¶¶ 2.c)23 After completion of the drug diversion program, he used marijuana on at least one more occasion.24 15 Gx. 13 at 3. 16 Tr.at 42-43, 50-53; Ax. E. 17 Gx. 13 at 5. 18 Tr.at 42; Gx. 13 at 5 (confirmation hearing scheduled for April 2, 2013); Ax. E. 19 Tr.at 53-57, 69-73, 82-83; Gx. 3. 20 Tr.at 82-83. 21 Tr.at 53-57, 71-73, 97; Gx. 5. 22 Gx. 3. 23 The SOR alleges in ¶ 2.b that Applicant purchased marijuana on multiple occasions. However, the only evidence of such a purchase was prior to his criminal arrest, which is alleged in ¶ 2.c. Therefore, ¶ 2.b is decided in Applicant’s favor. 24 Tr.at 70, 82-83. 5 Applicant’s employer introduced its current “no drug use policy” a “couple of years” after he started at the company in 1994.25 He testified that he does not intend to use illegal drugs in the future, and is willing to sign a statement memorializing such intent, with automatic revocation of his clearance if he were to use again.26 Applicant did not disclose his marijuana use on his initial security clearance application (SCA) in 2000. He answered “no” to the question that asked whether he had used any illegal drugs, to include marijuana, in the past seven years.27 He denies falsifying his answer regarding his past drug use. He explained that he thought the question only required an affirmative response if he were a frequent drug user.28 Applicant’s denial and explanation for omitting his past drug use was not credible. In 2010, on his current SCA, Applicant was again asked whether he had used any illegal drugs, to include marijuana, in the past seven years. He was also asked whether he had ever used illegal drugs, to include marijuana, while possessing a security clearance. He answered “yes” to both questions, but only listed a one-time use of marijuana related to his drug arrest.29 He denies he falsified his answers regarding his past drug use. He claims that he did not consider his infrequent drug use to require a fuller explanation, because he believed the questions were inquiring about heavy drug users.30 Also, he testified that his marijuana use “were pretty insignificant events.”31 At hearing, Applicant admitted that part of the reason he answered the drug questions on his current SCA in the affirmative was because he suspected his drug arrest would be uncovered by the Government, when it did a criminal background check.32 He also testified that, while filling out his 2010 SCA, he inquired with his facility security officer (FSO) about whether his one-time drug use would jeopardize his clearance. He did not reveal the full extent of his illegal drug involvement to his FSO.33 Applicant’s denial and explanation for omitting the full extent of his past marijuana use on his 2010 SCA was not credible. 25 Tr.at 94-97. 26 Tr.at 56. 27 Gx. 2. 28 Tr. at 54-55, 74-76, 90, Answer. 29 Gx. 3 at 29-31. 30 Tr. at 54-55, 77-82, Answer. 31 Tr. at 80. 32 Tr. at 79 (“Q: . . . Did you only list the one where you had been arrested, because you knew they could pull it up on your background check? . . . A: I see where you are going with that, and that could be partially true.”) 33 Tr. at 84-85. 6 Applicant’s witnesses speak favorably as to his loyalty, integrity, and work ethic. The witnesses who testified at the hearing had not read the SOR and were not aware of the Government’s concerns. Those who provided letters did not indicate they were aware of the concerns at issue.34 Policies “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). Individual applicants are only eligible for access to classified information “only upon a finding that it is clearly consistent with the national interest” to authorize such access. Executive Oder (E.O.) 10865, Safeguarding Classified Information within Industry, § 2 (Feb. 20, 1960), as amended. When evaluating an applicant’s eligibility, an administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations, the guidelines list potentially disqualifying and mitigating conditions. The guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies the guidelines in a common sense manner, considering all available and reliable information, in arriving at a fair and impartial decision. The Government must present evidence to establish controverted facts alleged in the SOR. Directive ¶ E3.1.14. On the other hand, an applicant is responsible for presenting “witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by the applicant or proven by Department Counsel.” Directive ¶ E3.1.15. An applicant has the ultimate burden of persuasion to establish their eligibility. In resolving the ultimate question regarding an applicant’s eligibility, an administrative judge must resolve “[a]ny doubt concerning personnel being considered for access to classified information . . . in favor of national security.” AG ¶ 2(b). Moreover, “security clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531. 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. The 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 an 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. 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.” E.O. 10865 § 7. Thus, a decision to deny a security clearance amounts to a finding that an 34 Tr. at 20-37; Ax. A; Ax. F. 7 applicant, at the time the decision was rendered, did not meet the strict guidelines established for determining eligibility for access to classified information. Analysis Guideline F, Financial Considerations The security concern relating to financial problems is articulated at 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. This concern is broader than the possibility that an applicant might knowingly compromise classified information in order to raise money in satisfaction of his or her debts.35 The concern also encompasses financial irresponsibility, which may indicate that an applicant would also be irresponsible, unconcerned, negligent, or careless in handling and safeguarding classified information. Applicant’s long history of not paying his financial obligations, which has led some of his creditors to seek judgments, directly implicates the above concern. It also establishes disqualifying conditions listed at AG ¶¶ 19(a), “inability or unwillingness to satisfy debts,” and 19(b), “a history of not meeting financial obligations.” An individual’s past or current indebtedness is not the end of the analysis, because “[a] security clearance adjudication is not a proceeding aimed at collecting an applicant’s debts. Rather, it is a proceeding aimed at evaluating an applicant’s judgment, reliability, and trustworthiness.”36 Accordingly, Applicant may mitigate the concern by establishing one or more of the conditions listed under AG ¶ 20. The relevant mitigating conditions are: (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; 35 ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). See also ISCR Case No. 10-00925 at 2 (App. Bd. June 26, 2012). 36 ISCR Case No. 07-08049 at 5 (App. Bd. Jul. 22, 2008). See also ISCR Case No. 09-07916 at 3 (App. Bd. May 9, 2011). 8 (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 and provides documented proof to substantiate the basis of the dispute. None of the mitigating conditions apply. Applicant has only recently started to address his long-standing debts and the bankruptcy was still pending a confirmation hearing at the close of the record.37 He has been gainfully employed since 1994 and, has earned a six-figure salary since at least 2009. His financial trouble was not related to matters beyond his control. Rather, he was unable to meet his financial obligations starting in 2006 and decided to incur further debt in an attempt to cure his financial trouble. He was then unable or unwilling to pay the obligations he had freely entered into and his creditors were forced to seek judgments to force him to pay. Even after courts entered judgments against him, Applicant choose not to pay his creditors. He is now trying to resolve his debts through bankruptcy, which would generally be considered at least a belated, good-faith effort to repay overdue creditors. However, Applicant’s filing of an apparently deceptive income statement with the bankruptcy court to presumably secure a shorter commitment period undercuts the evidence he submitted of his efforts resolve his past-due debts.38 Furthermore, although Applicant has received financial counseling and made some payments through his Chapter 13 bankruptcy, his recent history of not following through on debt repayments agreed to with his creditors leaves me to question his reliability in repaying his debts going forward. Therefore, Applicant’s history of failing to honor his financial commitments continues to raise doubts about his reliability, trustworthiness, and good judgment.39 37 See e.g., ISCR Case No. 10-08308 (App. Bd. Nov. 3, 2011) (denial sustained because Applicant’s recent bankruptcy filing was still pending and, thus, did not mitigate the Guideline F concerns). 38 Although this apparently deceptive bankruptcy filing was not alleged in the SOR, I have considered it in assessing Applicant’s case in mitigation and his credibility. ISCR Case No. 11-05365 (App. Bd. May 1, 2012); ISCR Case No. 07-16653 at 2-3 (App. Bd. May 1, 2012). 39 Even if Applicant’s bankruptcy filing was not done with disingenuous design, he failed to mitigate the financial considerations security concerns for all the other reasons noted above. 9 Guideline H, Drug Involvement The security concern for illegal drug involvement is set forth at AG ¶ 24: Use of an illegal drug or misuse of a prescription drug can raise questions about an individual's reliability and trustworthiness, both because it may impair judgment and because it raises questions about a person's ability or willingness to comply with laws, rules, and regulations. Applicant’s use of marijuana from about 1991 to 2008, including while possessing a security clearance, raises this concern and establishes the following disqualifying conditions under AG ¶ 25: (a) any drug abuse; and (g) any illegal drug use after being granted a security clearance. AG ¶ 26 sets forth a number of conditions that could mitigate the drug involvement concern. The relevant mitigating conditions are: (a) the behavior happened so long ago, was so infrequent, or happened under such circumstances that it is unlikely to recur or does not cast doubt on the individual's current reliability, trustworthiness, or good judgment; and (b) a demonstrated intent not to abuse any drugs in the future, such as: (1) disassociation from drug-using associates and contacts; (2) changing or avoiding the environment where drugs were used; (3) an appropriate period of abstinence; (4) a signed statement of intent with automatic revocation of clearance for any violation. Applicant’s use of marijuana was infrequent and his last use occurred five years ago. However, he failed to meet his burden to demonstrate that he will not use illegal drugs in the future. He continued to use marijuana contrary to his employer’s drug policy and after going through a court-mandated drug diversion program. Moreover, it was clear from his testimony and demeanor that he still does not appreciate the significant security concerns posed by his illicit drug use. Under such circumstances, Applicant’s promise not to use illegal drugs in the future is unconvincing and none of the mitigating conditions apply. Applicant’s past drug use remains a concern. Guideline E, Personal Conduct The personal conduct security concern is set forth at AG ¶ 15: Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions 10 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. Applicant’s failure to disclose his past drug use on his 2000 and 2010 security clearance applications raises this concern. It also raises the applicability of the disqualifying condition listed at AG ¶ 16(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.” The omission of material, adverse information standing alone is not enough to establish that an individual intentionally falsified his or her SCA. Instead, an administrative judge must examine the facts and circumstances surrounding the omission to determine an individual’s true intent.40 After considering the evidence and having an opportunity to observe Applicant’s demeanor at hearing, I find that he intentionally falsified his 2000 and 2010 security clearance applications when he failed to disclose the full extent of his past drug use. His explanation for failing to disclose the information, that he did not believe an accurate response was required because he was not a frequent drug user, which he believed was the true purpose of the questions at issue, is merely an after-the-fact attempt to justify his falsifications. Furthermore, individual applicants are not free to simply disregard clear and unambiguous questions in a security clearance merely because a truthful response would reveal information that they feel does not pose a concern. Additionally, Applicant revealed his true intent when discussing the omission of his full drug history in response to relevant questions on his current SCA. He falsely claimed that he only used on one occasion. He only revealed this one-time use because he strongly suspected that his drug arrest would be uncovered during the ensuing background investigation and only after checking with his FSO to assure himself such limited disclosure would not jeopardize his clearance. It is telling that he did not reveal the full extent of his past drug use to his FSO. He did finally reveal his past drug use to the Government, but only after being questioned about his past drug involvement. Such belated disclosure does not amount to a prompt, good-faith effort to correct his prior falsifications, especially in light of his continued denials that he did not falsify his applications. AG ¶ 16(a) applies. AG ¶ 17 sets forth several conditions that could potentially mitigate the personal conduct concern. I have considered all the mitigating conditions and find that none apply. Applicant’s falsification of his security clearance applications remains a concern. 40 See generally ISCR Case No. 02-12586 (App. Bd. Jan. 25, 2005); ISCR Case No. 02-15935 (Appl. Bd. Oct. 15, 2003). 11 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 an applicant’s conduct and all the relevant circumstances. An administrative judge should consider the nine factors listed at AG ¶ 2(a).41 Applicant has served this country as a federal contractor since 1994. His duty performance and his handling of sensitive information have never been questioned. However, these favorable whole-person factors do not mitigate the significant security concerns raised by his finances, past drug use, and deliberate falsification of his security clearance applications.42 After weighing the disqualifying and mitigating conditions, and evaluating all the evidence in the context of the whole person, I conclude Applicant did not meet his burden to mitigate the security concerns at issue. Overall, the record evidence leaves me with significant doubts about Applicant’s continued eligibility for access to classified information. Formal Findings I make the following formal findings regarding the allegations in the SOR: Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT Subparagraphs 1.a – 1.i: Against Applicant Subparagraph 1.j: For Applicant Paragraph 2, Guideline H (Drug Involvement): AGAINST APPLICANT Subparagraph 2.a: Against Applicant Subparagraph 2.b: For Applicant Subparagraphs 2.c – 2.d: Against Applicant Paragraph 3, Guideline E (Personal Conduct): AGAINST APPLICANT Subparagraphs 3.a – 3.c: Against Applicant 41 The non-exhaustive list of adjudicative factors are: (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. 42 ISCR Case No. 11-02087 at 3 (App. Bd. Mar. 20, 2012) (“Even years of safeguarding national security information may not be sufficient to mitigate a history of ongoing, significant delinquent debt” or other issues of concern). 12 Conclusion In light of the record evidence and for the foregoing reasons, it is not clearly consistent with the national interest to grant Applicant continued access to classified information. Applicant’s request for a security clearance is denied. ____________________ Francisco Mendez Administrative Judge