1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ----------------------1 ) ADP Case No. 12-02352 ) Applicant for Public Trust Position ) Appearances For Government: Fahryn Hoffman, Esq., Department Counsel For Applicant: Pro se __________ Decision __________ Harvey, Mark, Administrative Judge: Applicant’s statement of reasons (SOR) alleges 28 delinquent debts or accounts, totaling $19,751. The only debt that was paid was through the Internal Revenue Service intercepting her tax refund. She has a history of delinquent debt and did not make sufficient progress resolving her delinquent SOR debts. Financial considerations concerns are not mitigated. Her eligibility to occupy a public trust position is denied. Statement of the Case On November 2, 2011, Applicant completed her Electronic Questionnaires for Investigations Processing (e-QIP) version of an application for a public trust position (SF 86). (GE 1) On August 13, 2013, the Department of Defense (DOD) issued an SOR to Applicant (hearing exhibit (HE) 2), pursuant to DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended, and modified; Department of Defense (DoD) Regulation 5200.2-R, Personnel Security Program, dated Jan. 1987, as amended (Regulation); and the adjudicative guidelines (AG) promulgated by the President on December 29, 2005. 1 After Applicant’s divorce became final in December 2013, she reverted to her maiden name. 2 The SOR alleges trustworthiness concerns under Guideline F (financial considerations). (HE 2) The SOR detailed reasons why DOD could not make the preliminary affirmative finding under the Regulation that it is clearly consistent with the national interest to grant or continue Applicant’s eligibility to occupy a public trust position, which entails access to sensitive information. (HE 2) DOD recommended referral to an administrative judge to determine whether such access to sensitive information should be granted, continued, denied, or revoked. On October 3, 2013, Applicant responded to the SOR allegations. (HE 3) On November 18, 2013, Department Counsel indicated she was ready to proceed. On November 21, 2013, the case was assigned to me. On December 19, 2013, the Defense Office of Hearings and Appeals (DOHA) issued a hearing notice setting the hearing for January 9, 2014. (HE 1) The hearing was held as scheduled using video teleconference. (HE 1) At the hearing, Department Counsel offered four exhibits (GE 1-4) (Transcript (Tr.) 17-18), and Applicant did not offer any exhibits at her hearing. (Tr. 12) There were no objections, and I admitted GE 1-4. (Tr. 18) Additionally, I admitted the SOR, response to the SOR, and hearing notice. (HE 1-3) On January 17, 2013, I received the transcript. I held the record open until January 30, 2014. (Tr. 52, 79) On January 30, 2014, Applicant provided five additional documents, and on February 3, 2014, Department Counsel provided Applicant’s documents to me. (AE A-E) They were admitted without objection. Findings of Fact2 Applicant’s SOR response admitted responsibility for the SOR debts in ¶¶ 1.c- 1.g, 1.i, 1.q, and 1.u, and she denied responsibility for the other SOR debts. She did not provide any corroborating or supporting documentation. Applicant’s admissions are accepted as findings of fact. Applicant is a 25-year-old employee of a defense contractor, who has worked as a “floater” in a medical distribution operations center for 27 months. (Tr. 6-7, 20; GE 1) In 2006, she graduated from high school. (Tr. 6) She has not attended college. (Tr. 6-7) She has never served in the military. (Tr. 24) Applicant was married in July 2008 and divorced in December 2013. (Tr. 5, 21) Her son is four years old. (Tr. 21) She and her former spouse have joint custody, and she does not pay or receive any child support payments. (Tr. 21) Her former spouse earns substantially less than Applicant. (Tr. 23-24) Her divorce allocated student loan debts to her former husband and two other debts to Applicant. (Tr. 22; AE C, D) Applicant’s history of delinquent debt is documented in her credit reports, her December 22, 2011 Office of Personnel Management (OPM) personal subject interview 2Some details have been excluded in order to protect Applicant’s right to privacy. Specific information is available in the cited exhibits. 3 (PSI), June 8, 2013 responses to DOHA interrogatories, her SOR response, and her hearing record. Her OPM PSI, responses to DOHA interrogatories, and her SOR response provided specific notice to her of the debts causing security concern and provided her ample opportunity to document her efforts to resolve her delinquent debts. The debts in SOR ¶¶ 1.a ($166), 1.b ($109), 1.z ($201), and 1aa ($166) were owed to a grocery store where Applicant was employed for several months in 2006 and 2007. (Tr. 24-26) Applicant said her boyfriend stole and forged her checks. (Tr. 26) She told the police and her bank about the theft. (Tr. 26-28) She complained to the police in 2009 or 2010; however, she does not have a police report or documentation from the bank showing she disputed her responsibility for the four debts. (Tr. 27-28) She has not taken any actions in the last two years to resolve the four debts. (Tr. 29) The debts in SOR ¶¶ 1.c ($37), 1.d ($113), 1.e ($170), 1.f ($168), 1.g ($71), and 1.i ($57) are Applicant’s medical debts. (Tr. 29-30, 32; SOR response) She “assumed” the divorce court ordered her former spouse to pay them; however, she was unsure about whether or not her assumption was correct. (Tr. 30) She intends to pay these six debts. (Tr. 30) Applicant was the account holder for the cellular telephone debt in SOR ¶ 1.h ($619), and she accepted responsibility for paying it. (Tr. 31) She did not describe any efforts to resolve this debt. The debts in SOR ¶¶ 1.j ($154), 1.k ($90), 1.l ($64), 1.m ($64), 1.n ($55), 1.o ($100), and 1.p ($75) were from checks written to a grocery store in February to April 2008. (Tr. 32-33) Applicant said her boyfriend stole and forged the checks. (Tr. 32) She was unsure about which forged checks were reported to the police. (Tr. 33) She has not attempted to try to pay the checks in the last two years. (Tr. 33) The debt in SOR ¶ 1.q ($229) is from Applicant’s cable account. (Tr. 34) On December 22, 2011, she told an OPM investigator that she intended to pay it with her tax refund; however, she used the funds to purchase a vehicle. (Tr. 34) The debt in SOR ¶ 1.r ($101) is from a returned check written to an oil company. (Tr. 34) She did not recognize the debt and believed it might have resulted from a check stolen by her boyfriend. (Tr. 35) She did not attempt to contact the creditor that received the check to determine their validity, and the check is not paid. (Tr. 35) Applicant did not recognize the credit card debt in SOR ¶ 1.s ($437) for an account opened in January 2008 or the collection debt in SOR ¶ 1.t ($450). (Tr. 36-37) She did not describe any actions to resolve these two debts. Applicant voluntarily surrendered her vehicle, resulting in the debt in SOR ¶ 1.u ($12,610). (Tr. 37) Applicant purchased the vehicle in May 2007, lost her employment in November 2007, and returned the vehicle about six months after purchasing it. (Tr. 39- 40) She was not employed when she purchased the vehicle, as she was living on Social Security disability. (Tr. 39) She was able to purchase the vehicle because her 4 grandmother co-signed on the contract. (Tr. 39) She did not describe any actions to resolve this debt. (Tr. 41) Appellant went to court to challenge a judgment for the medical debt in SOR ¶ 1.v ($203). (Tr. 41) She believed her medical insurance should have paid the debt; however, she was unsure if it was her debt or her former husband’s debt. (Tr. 41-42) She did not prove documentation showing resolution of the judgment. (Tr. 42-43) The debt in SOR ¶ 1.w ($2,721) resulted from a Social Security overpayment. (Tr. 43) Applicant said the debt was paid off in 2013. (Tr. 43-44) The SOR indicates the debt was in the “Treasury Offset Program,” which intercepts tax refunds to pay federal debts. Applicant said her tax refunds were used to make the final payments on the debt. (Tr. 44) The Social Security debt was paid in April 2013. (AE B) Applicant did not recall the bank debt in SOR ¶ 1.x ($342). (Tr. 46) She accepted responsibility for the department store credit card debt in SOR ¶ 1.y ($112). (Tr. 47) She recognized the pizza establishment in SOR ¶ 1.bb ($67); however, she could not recall owing the creditor. (Tr. 47) She did not describe any actions to resolve these three debts. (Tr. 46-47) Applicant’s personal financial statement (PFS) showed the following monthly amounts: gross salary $2,027; net income $1,440; expenses $1,569; debts $0; and net remainder negative $129. (GE 4 at 6) Her gross salary subsequently increased to $2,069; her net income increased to $1,750; however, she recently purchased a new vehicle. (Tr. 48-50) Her largest monthly expenses are her rent payment ($625) and her utilities ($372). (Tr. 21; GE 4 at 6) Her taxes are current. (Tr. 45) Applicant planned to pay off the delinquent debts on the SOR that were her responsibility. (Tr. 47) Non-SOR Allegations3 When Applicant was 14 years old, she was diagnosed as having a borderline personality disorder. (Tr. 58) She attempted suicide and suffered from depression. (Tr. 58-59) Eventually she was diagnosed with bipolar disorder, and she suffered from that disability for many years. (Tr. 59) 3In ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006), the Appeal Board listed five circumstances in which conduct not alleged in an SOR may be considered stating: (a) to assess an applicant’s credibility; (b) to evaluate an applicant’s evidence of extenuation, mitigation, or changed circumstances; (c) to consider whether an applicant has demonstrated successful rehabilitation; (d) to decide whether a particular provision of the Adjudicative Guidelines is applicable; or (e) to provide evidence for whole person analysis under Directive Section 6.3. Id. (citing ISCR Case No. 02-07218 at 3 (App. Bd. Mar. 15, 2004); ISCR Case No. 00-0633 at 3 (App. Bd. Oct. 24, 2003)). 5 In 2010, Applicant met with a therapist for her depression about every two weeks for at least a year. (Tr. 60) On November 2, 2011, Applicant completed her SF 86, and answered “No” to the following question in Section 21: In the last seven (7) years, have you consulted with a health care professional regarding an emotional or mental health condition or were you hospitalized for such a condition? Answer “No” if the counseling was for any of the following reasons and was not court-ordered: • strictly marital, family, grief not related to violence by your; or • strictly related to adjustments from service in a military combat environment. (GE 1) Applicant conceded that she should have answered, “Yes.” (Tr. 63) She explained it was an unintentional error and not a deliberate attempt to conceal her mental health treatment. (Tr. 67) She believed that her mental health treatment was related to grief and family abuse she received as a child, was not based on violence, and was not court-ordered therapy. (Tr. 68-69)4 In August 2013, Applicant attempted suicide by overdosing on her medication, and she was hospitalized for two or three weeks. (Tr. 46, 59, 63) She attended outpatient therapy on a daily basis for six weeks after her hospitalization. (Tr. 64) She believed her memory was affected by the medication. (Tr. 46, 59) She is seeing a therapist; however, she has not seen the therapist for several months. (Tr. 59-60) She takes her prescribed medication. (Tr. 66) Her current diagnosis is depression and bipolar disorder. (Tr. 66) Policies The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security and has emphasized, “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). The Government’s authority to restrict access to classified information applies similarly in the protection of sensitive, unclassified information. As Commander in Chief, the President has the authority to control access to information bearing on national security or other sensitive information and to 4Department Counsel moved to amend the SOR to add allegations under Guidelines E and I. (Tr. 69-76) Applicant objected to the amendments. (Tr. 73, 76) Her disclosure of her misdemeanor arrest for larceny in 2008 on her SF 86 is an indication that she was not trying to conceal derogatory information from security officials. (GE 1, Section 22) Applicant’s erroneous failure to disclose her mental health treatment on her SF 86 was based on mistake and not on an intentional attempt to deceive security officials. I sustained Applicant’s objections to amendment of the SOR because Applicant has not had adequate notice and a full opportunity to collect and present evidence of mitigation regarding these allegations. I noted at the hearing that I would consider the information under the whole-person concept. (Tr. 77) See note 2, supra. Ultimately I decided to give very little negative weight in the whole-person concept to information about her mental health disability. Moreover, Information about her illness provides some mitigation as it is a circumstance beyond her control that affected her finances. 6 determine whether an individual is sufficiently trustworthy to have access to such information. See Id. at 527. Positions designated as ADP I and ADP II are classified as “sensitive positions.” Regulation ¶¶ C3.1.2.1.1.7 and C3.1.2.1.2.3. “The standard that must be met for . . . assignment to sensitive duties is that, based on all available information, the person’s loyalty, reliability, and trustworthiness are such that . . . assigning the person to sensitive duties is clearly consistent with the interests of national security.” Regulation ¶ C6.1.1.1. Department of Defense contractor personnel are afforded the right to the procedures contained in the Directive before any final unfavorable access determination may be made. See Regulation ¶ C8.2.1. When evaluating an applicant’s suitability for a public trust position, an administrative judge must consider the disqualifying and mitigating conditions in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied 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. A person who seeks access to sensitive 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 Government reposes a high degree of trust and confidence in individuals to whom it grants access to sensitive information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard sensitive information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of sensitive information. Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant which may disqualify the applicant from being eligible for access to sensitive information. 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 and trustworthiness suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996). 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 ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his or her security clearance [or access to sensitive information].” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity 7 clearance [or trustworthiness] determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b). The protection of the national security and sensitive records is of paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for access to [sensitive] information will be resolved in favor of national security.” Section 7 of Executive Order (EO) 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.” Analysis Financial Considerations AG ¶ 18 articulates the trustworthiness concern relating to financial problems: 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 [sensitive] information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. AG ¶ 19 provides two disqualifying conditions that could raise a trustworthiness concern and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts;” and “(c) a history of not meeting financial obligations.” In ISCR Case No. 08- 12184 at 7 (App. Bd. Jan. 7, 2010), the Appeal Board explained: It is well-settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the burden shifts to applicant to establish either that [he or] she is not responsible for the debt or that matters in mitigation apply. (internal citation omitted). Applicant’s history of delinquent debt is documented in her credit reports, her OPM PSI, her responses to DOHA interrogatories, her SOR response, and her hearing record. Applicant’s SOR alleges 28 delinquent debts or accounts, totaling $19,751. Her largest debt has been delinquent since late 2007. The Government established the disqualifying conditions in AG ¶¶ 19(a) and 19(c), requiring additional inquiry about the possible applicability of mitigating conditions. Five mitigating conditions under AG ¶ 20 are potentially applicable: (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 8 doubt on the individual’s current reliability, trustworthiness, or good judgment; (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;5 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’s financial conduct does not warrant full application of any mitigating conditions to all SOR debts. I have credited Applicant with mitigating the Social Security overpayment debt in SOR ¶ 1.w ($2,721) because her debt was paid through the “Treasury Offset Program,” as the IRS intercepted her income tax refunds.6 She did not provide any documentation that she reported the theft of checks to her bank or the police. She did not claim to have made any payments to any of the SOR creditors. Applicant fell behind on her debts because of medical problems (including her mental health issues), medical expenses, unemployment, low-paying employment, and divorce. She did not describe receipt of any financial counseling. She showed some 5The Appeal Board has previously explained what constitutes a “good faith” effort to repay overdue creditors or otherwise resolve debts: In order to qualify for application of [the “good faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term “good-faith.” However, the Board has indicated that the concept of good-faith “requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy) in order to claim the benefit of [the “good faith” mitigating condition]. (internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 6See ISCR Case No. 08-06059 at 6 (App. Bd. Sept. 21, 2009) (indicating involuntary payment of debts through garnishment is not necessarily mitigating). 9 good faith when she admitted responsibility for some of her SOR debts in her SOR response and at her hearing. Applicant has not taken reasonable actions to resolve 27 of 28 delinquent debts or accounts, totaling $17,030. She has nine unresolved SOR debts that are less than $100, and most are for returned checks. The circumstances beyond her control were significant; however, she did not adequately explain why she had not made any payments to 27 of her SOR creditors. She did not provide documentation proving that she maintained contact with her SOR creditors, and she did not provide any documentation showing her attempts to negotiate payment plans with her SOR creditors.7 There is insufficient evidence that her financial problem is being resolved and is under control. She did not establish her financial responsibility. Whole-Person Concept Under the whole-person concept, the administrative judge must evaluate an Applicant’s eligibility for a public trust position by considering the totality of the Applicant’s 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 public trust position must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under those guidelines, but some warrant additional comment. There are some facts supporting mitigation of trustworthiness concerns under the whole-person concept; however, they are insufficient to fully mitigate trustworthiness concerns. Applicant is a 25-year-old employee of a defense contractor, who has worked as a “floater” in a medical distribution operations center for 27 months. In 2006, she graduated from high school. She married in July 2008 and divorced in December 2013. 7“Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep debts current. 10 She has a four-year-old son. She does not pay or receive child support payments. Some circumstances beyond her control, such as insufficient income, brief periods of unemployment, underemployment, divorce, medical problems, including her mental health issues, and medical expenses adversely affected her financial circumstances. She has made some progress towards mitigation of financial considerations concerns by resolving the Social Security overpayment debt in SOR ¶ 1.w ($2,721). There is no evidence of violations of her public trust position or disloyalty. The evidence against approval of Applicant’s clearance is more substantial at this time. Applicant has not taken reasonable actions to resolve 27 of 28 delinquent debts or accounts, totaling $17,030. She has nine unresolved SOR debts that are less than $100, and most are for returned checks. She failed to prove that she could not have made greater progress resolving and documenting resolution of her SOR debts. Several debts resulted from either Applicant or her former boyfriend writing checks with insufficient funds in her account. If she wrote the bad checks, she should have made restitution to the victim-creditors. If her former boyfriend wrote the bad checks, her responsible course of action was to report the fraud to the police, her bank, and the creditors. She should have provided copies of the police reports to the creditor-victims, the banks, the credit reporting companies, and to DOHA. She was unsure about her responsibility for several of the SOR debts. She failed to contact several SOR creditors about the status of her debts. Applicant’s long-term mental health issues raise an additional concern that medical problems may have affected her finances and may affect her future ability to pay her creditors and maintain her financial responsibility. However, her mental health issues are not sufficiently developed to assess their impact on her finances. Even if there were no evidence of her mental health issues, the objective fact remains that her “[f]ailure or inability to live within [her] 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 [her] reliability, trustworthiness, and ability to protect [sensitive] information,” and I would still deny her access to classified information. See AG ¶ 18. I have carefully applied the law, as set forth in Department of Navy v. Egan, 484 U.S. 518 (1988), Exec. Or. 12968, the Directive, the Regulation, the AGs, and other cited references to the facts and circumstances in the context of the whole person. I conclude more documented progress addressing her debts is necessary before she will be eligible to occupy a public trust position. 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 Subparagraphs 1.a to 1.v: Against Applicant 11 Subparagraph 1.w: For Applicant Subparagraphs 1.x to 1.bb: Against Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is not clearly consistent with national interest to grant Applicant eligibility for a public trust position. Eligibility for access to sensitive information is denied. _________________________ MARK HARVEY Administrative Judge