1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ------------------------- ) ISCR Case No. 12-02149 ) Applicant for Security Clearance ) Appearances For Government: Melvin A. Howry, Esquire, Department Counsel For Applicant: Pro se April 16, 2014 ______________ DECISION ______________ ROSS, Wilford H., Administrative Judge: Applicant submitted his most recent Electronic Questionnaire for Investigations Processing (e-QIP), on September 16, 2011. (Government Exhibit 3.) On October 1, 2013, the Department of Defense issued a Statement of Reasons (SOR) detailing the security concerns under Guidelines F (Financial Considerations) and E (Personal Conduct) concerning Applicant. The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective within the Department of Defense on September 1, 2006. Applicant answered the SOR in writing on October 18, 2013, and requested a hearing before an administrative judge. Department Counsel was prepared to proceed on December 4, 2013. This case was assigned to me on December 19, 2013. The Defense Office of Hearings and Appeals (DOHA) issued an initial notice of hearing on January 13, 2014. The hearing was held on February 11, and February 27, 2014. The Government offered Government Exhibits 1 through 10, which were admitted without objection. Applicant submitted Applicant Exhibits A through CC, which were admitted There are no Exhibits I or O. (February 11, 2014 transcript at 28.)1 All further citations will be to the February 27, 2014 transcript.2 2 without objection, and testified on his own behalf. Applicant asked that the record1 remain open for the receipt of additional documents. DOHA received the transcript of the final hearing (Tr.) on March 10, 2014. Applicant timely submitted Applicant Exhibits2 DD through OO, which were all admitted without objection. The record closed as scheduled. Based upon a review of the pleadings, exhibits, and testimony, eligibility for access to classified information is denied. Findings of Fact Applicant is 33, has an associate of science degree, and is married with two children. He is employed by a defense contractor, and seeks to retain a security clearance in connection with his employment. Paragraph 1 (Guideline F, Financial Considerations) The Government alleges in this paragraph that Applicant is ineligible for clearance because he is financially overextended and therefore potentially unreliable, untrustworthy, or at risk of having to engage in illegal acts to generate funds. Applicant admitted all the allegations in the SOR under this paragraph. Those admissions are findings of fact. He also submitted additional information to support his request for a security clearance. The SOR lists 24 delinquent debts, totaling approximately $48,076. The existence and amount of most of these debts is supported by credit reports provided by the Government dated March 10, 2009; October 5, 2011; March 4, 2013; June 24, 2013; and February 4, 2014. (Government Exhibits 2, 4, 6, 8, and 10.) Applicant also provided credit reports concerning many of these debts dated June 27, 2013; December 31, 2013; and January 6, 2014. (Applicant Exhibits G, H, J, K, L M, N, P, Q, and W.) According to Applicant, his current financial difficulties began when he left the Marine Corps in 2009, after ten years service. (Government Exhibit 7 at 13.) In addition, some of the debts were incurred by his wife during a time they were separated and contemplating a divorce. (Tr. 76-79.) Finally, Applicant works when his company has a contract. Accordingly, he has had a series of layoffs since starting with his employer in 2009. These layoffs amount to a total period of ten months during that time. (Tr. 96-97.) The current status of the SOR-listed debts is as follows: 1.a. Applicant admits that he is indebted to a collection agency for an educational loan in the amount of $5,471. According to Applicant this debt should have been resolved by the Department of Veteran’s Affairs (VA), since he was attending school under the GI Bill. Applicant believes the debt is paid, but he cannot get the Applicant and his wife did not have a formal separation agreement during this period.3 3 school or the VA to tell him the current status. (Tr. 24-34, 105.) Applicant filed a dispute with the credit reporting services in 2013, which resulted in the school’s account being deleted in a report dated June 27, 2013. (Applicant Exhibit F.) However, another report from the same credit reporting service, dated the same day, shows that the account from the collection agency was unchanged. (Applicant Exhibit W at 10. See also Applicant Exhibit AA at 1-3.) Based on the current state of the record, this debt is not resolved. 1.b. Applicant admits that he was indebted to a creditor for a utility debt in the amount of approximately $164. Applicant paid this debt in February 2014. (Tr. 34-38, 105; Applicant Exhibit EE.) This debt is resolved. 1.c. Applicant admits that he was indebted to a creditor for a debt in the amount of approximately $440. Applicant paid this debt in March 2014. (Tr. 40-41, 106; Applicant Exhibit DD.) This debt is resolved. 1.d. Applicant admits that he is indebted to a creditor for a utility debt in the amount of approximately $556. Applicant had not paid this bill as of the time the record closed. (Tr. 38-39, 106.) This debt is not resolved. 1.e. Applicant admits that he was indebted to a telephone company for a debt in the amount of $1,220. Applicant stated that he made a payment arrangement with this creditor to resolve this debt by paying $50 a month, and that he had made one payment. He submitted no documentary evidence from his bank or the creditor showing such a payment had been made. (Tr. 45-48, 106; Applicant Exhibits U, and KK.) Based on all of the available evidence, this debt is not resolved. 1.f. Applicant admits that he is indebted to a creditor for an automobile debt in the amount of approximately $13,878. He made a payment arrangement with this creditor to pay $175 a week to resolve this debt. As of the date of the hearing he had made one payment. (Tr. 48-51, 107; Applicant Exhibits Z, and KK.) This debt is being resolved, albeit only recently. 1.g. Applicant admits that he was indebted to a creditor for a cable bill in the amount of $579. This debt was paid in full in February 2014. (Tr. 51-52, 107; Applicant Exhibits C, W at 3, and X.) This debt is resolved. 1.h. Applicant admits that he was indebted to a creditor for a medical debt in the amount of approximately $156. Applicant maintains that this delinquent medical bill was incurred by his wife during a period when they were separated and living in separate states. Applicant’s wife wrote a letter stating, “I don’t see any reason he3 should be held accountable for any of my medical bills.” (Applicant Exhibit FF.) Applicant filed a dispute with the credit reporting services about this debt, and it was deleted in January 2014. (Tr. 52-53; 107; Applicant Exhibits D, and FF.) This debt has been resolved. 4 1.i. Applicant admits that he was indebted to a creditor for a telephone debt in the amount of approximately $448. The original creditor is his current telephone company. Applicant paid this delinquent debt and is current with his payments on the account. He filed a dispute with the credit reporting services about this debt, and it was deleted in June 2013. (Tr. 53-55, 107; Applicant Exhibits W at 3, and EE.) This debt is resolved. 1.j. Applicant admits that he is indebted to a creditor for a debt in the amount of $43. Applicant stated that he paid this debt by means of Western Union several years ago. He contacted Western Union to attempt to get proof of payment. (Tr. 55-60, 107.) He attempted to contact this creditor without success, stating, “Every number that I have looked up on the internet, every number I’ve tried to call, they are non-existent [sic] or I get this number is not in service or no longer available. I’ve tried to call them repeatedly.” (Tr. 57.) He believes that they are out of business. (See Applicant Exhibits II, and LL.) Applicant has made a good-faith attempt to resolve this debt. 1.k. Applicant admits that he is indebted to a creditor for a medical debt in the amount of $295. He again stated that many of the medical bills involved his wife, and most of them were during the time when they were separated. (Tr. 60-61, 107.) Applicant disputed this debt, but after investigation it remained on his June 2013 credit report, provided by Applicant. The report also shows that this hospital is located in the county and state where Applicant lived alone. (Applicant Exhibit W at 9.) This debt is not resolved. 1.l. Applicant admits that he was indebted to a creditor for a past-due debt in the amount of $265. Applicant stated that he paid this debt. He filed a dispute with the credit reporting services, and the creditor was deleted from his report in January 2014. (Tr. 61-64,108; Applicant Exhibit D.) This debt is resolved. 1.m. Applicant admits that he was indebted to a creditor for an insurance debt in the amount of $69. Applicant states that he paid this debt. He filed a dispute with the credit reporting services, and the creditor was deleted from his report in June 2013. (Tr. 64-65, 108; Applicant Exhibit F.) This debt is resolved. 1.n. Applicant admits the he is indebted to a creditor for a past-due debt concerning an apartment he rented in the amount of $2,100. Applicant testified that he has attempted unsuccessfully to resolve this debt. The apartment complex will not accept payment, and the collection agency they send him to has no record of his account, which Applicant has confirmed in writing from the agency. (Tr. 65-69, 108; Applicant Exhibits MM, and NN.) This debt is in dispute. 1.o. Applicant admits that he was indebted to a creditor for a past-due debt in the amount of $3,000. He submitted evidence that he has paid this debt in full. (Tr. 69- 71, 108; Applicant Exhibits B, and N.) This debt is resolved. A credit report provided by Applicant, dated June 27, 2013, indicates that there nine accounts with this4 collection agency, with a total indebtedness of $3,665. (Applicant Exhibit W .) 5 1.p. Applicant admits that he was indebted to a creditor for an automobile debt in the amount of $15,286. Applicant made a payment arrangement with this creditor and paid this debt in full. (Tr. 71-74, 108; Government Exhibit 4 at 9.) This debt is resolved. 1.q. Applicant admits that he is indebted to a creditor for a past-due payday loan in the amount of $591. Applicant stated that he paid this debt off several years ago. A credit report provided by the Applicant dated January 6, 2014, continues to show this as an active collection account. However, this creditor was deleted from another credit report dated June 27, 2013. (Tr. 74-75, 108; Applicant Exhibits N, and W.) This debt is not resolved, but is in dispute. 1.r. Applicant admits that he is indebted to a creditor for five medical accounts in the amount of $2,117. Applicant indicated that these debts involved his wife during4 the time they were separated and that he does not have any responsibility for them. The debts appear to involve a hospital in the locality in which Applicant currently lives, and credit report entries also indicate that they are joint responsibility debts with his wife. He filed a dispute about these debts. One of the credit reporting services deleted these accounts, while the other processed the dispute and elected to not change the entries. (Tr. 75-79, 82, 109; Applicant Exhibits F at 2, FF, and W at 11-15.) These debts are not resolved. 1.s. Applicant admits that he is indebted to a creditor for a medical debt in the amount of $438. Once again, Applicant states that this debt involves his wife and should not be his responsibility. This debt appears to involve a medical group in the locality in which Applicant currently lives. He filed a dispute about this debt. One of the credit reporting services deleted this account. A second processed the dispute and elected to not change the entry. (Tr. 83-86, 109; Applicant Exhibits D at 1, FF, and W at 7.) This debt is not resolved. 1.t. Applicant admits that he is indebted to a creditor for a past-due debt in the amount of $265. Applicant maintained that he has paid this debt. He filed a dispute about this debt. After processing his dispute, three credit reports filed by him indicate that the credit line remains. (Tr. 86-87, 109; Applicant Exhibits F, Q, and W at 10.) This debt is not resolved. 1.u. Applicant admits that he was indebted to a city for unpaid traffic tickets in the amount of $506. He paid this debt in full. (Tr. 87, 109; Applicant Exhibit A.) This debt is resolved. 1.v. Applicant admits that he was indebted to an insurance company in the amount of $128. He paid this debt in full. (Tr. 87-88, 109; Applicant Exhibit Z.) This debt is resolved. 6 1.w. Applicant admits that he was indebted to a creditor on a medical account in the amount of $31. Applicant stated that he paid this debt. He filed a dispute and one of the credit reporting services indicated that they were deleting the item from his credit report on June 27, 2013. (Tr. 88-89, 109; Applicant Exhibit F.) Based on all available information, this debt is resolved. 1.x. Applicant admits that he was indebted to a creditor on a medical account in the amount of $30. Applicant stated that he paid this debt. The existence of this debt is only shown in a report provided to Applicant by a credit repair company he retained. None of the credit reports in the record show this debt. (Tr. 89-90, 109; Government Exhibit 7 at 19-29.) Based on all available information, this debt has not been proven. 1.y. This allegation will be discussed under Paragraph 2, below. Paragraph 2 (Guideline E, Personal Conduct) The Government alleges in this paragraph that Applicant is ineligible for clearance because he engaged in conduct, which involves questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations. Applicant admits that he used his company credit card four times between 2010 and 2012 to pay for personal expenses. Such conduct was in violation of company policy, for which he was repeatedly counseled verbally and in writing. Applicant confirmed at least twice that he understood the company’s policy, which was, “Absolutely no personal use of company credit card; regardless of personal payments.” (Government Exhibit 5 at 4.) According to Applicant only one of these incidents was intentional, the others occurred either due to his own negligence, or that of his wife. Applicant intentionally decided not to receive a company credit card at his current employment. (Tr. 90-94; Government Exhibit 5; Applicant Exhibit CC.) Mitigation Applicant submitted documents showing he had a successful enlistment in the Marine Corps. (Applicant Exhibits V and X.) A former manager of Applicant’s wrote a letter on his behalf. The manager is a retired captain in the Navy. The writer states about Applicant, “There is nothing in his character that would impact his ability to hold a clearance at any level.” (Applicant Exhibit CC.) Policies Security clearance decisions are not made in a vacuum. When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and 7 mitigating conditions, which are to be used as appropriate in evaluating an applicant’s eligibility for access to classified information. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied in conjunction with the factors listed in AG ¶ 2 describing the adjudicative process. The administrative judge’s over-arching adjudicative goal is a fair, impartial and commonsense decision. According to AG ¶ 2(c), the entire process is a conscientious scrutiny of a number of variables known as the “whole-person concept.” The administrative judge must consider all available, reliable information about the person, past and present, favorable and unfavorable, in making a decision. In addition, the administrative judge may also rely on his or her own common sense, as well as knowledge of the law, human nature, and the ways of the world, in making a reasoned decision. The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that, “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, “The 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, and has the ultimate burden of persuasion as to obtaining a favorable clearance decision.” A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. This relationship transcends normal duty hours and endures throughout off-duty hours. The Government reposes a high degree of trust and confidence in individuals to whom it grants access to classified information. Security clearance decisions include, by necessity, consideration of the possible risk that the applicant may deliberately or inadvertently fail to protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of classified information. Finally, as emphasized in Section 7 of Executive Order 10865, “Any determination under this order adverse to an applicant shall be a determination in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information). 8 Analysis Paragraph 1 (Guideline F, Financial Considerations) The security concern relating to the guideline for Financial Considerations is set out in AG & 18: Failure or inability to live within one=s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual=s reliability, trustworthiness and ability to protect classified information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. The guideline notes several conditions that could raise security concerns. Under AG & 19(a), an Ainability or unwillingness to satisfy debts@ is potentially disqualifying. Similarly under AG & 19(c), Aa history of not meeting financial obligations@ may raise security concerns. Applicant had over $48,000 in debt, which has been due and owing for several years. The evidence is sufficient to raise these potentially disqualifying conditions. The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. Under AG ¶ 20(a), the disqualifying condition may be mitigated where Athe 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) states that the disqualifying conditions may be mitigated where “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.” Also, AG ¶ 20(d) states it can be mitigating where, “the individual has initiated a good-faith effort to repay overdue creditors or otherwise resolve debts.” Finally, AG ¶ 20(e) states it can be mitigating where “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 difficulties have been in existence since at least 2009. In 2013 he began to take action to resolve these debts. He did this by paying some of these debts off. Others he resolved by means of filing disputes with the credit reporting agencies. The following debts, totaling $37,123, are found to be resolved, or successfully disputed, by the Applicant: 1.b, 1.c, 1.f, 1.g, 1.h, 1.i, 1.j, 1.l, 1.m, 1.n, 1.o, 1.p, 1.u, 1.v, 1.w, and 1.x. On the other hand, as described above, his disputes have not been accepted by all of the agencies on all the debts. Those particular debts remain unresolved (1.k, 1.q, 1.r, 1.s, and 1.t). In addition, several other debts had not been paid or resolved for Subparagraph 1.y will be discussed under Paragraph 2, below.5 9 various reasons as of the time the record closed (1.a, 1.d, and 1.e). Accordingly, Applicant continues to owe at least $10,953 in unresolved indebtedness. It is obvious that Applicant has worked hard over the past year to resolve his past-due indebtedness, and much of it has been resolved. After considering all the evidence, he still has more to do to show that he is trustworthy and reliable. What became clear during the hearing is that Applicant still does not have a good grasp of his true financial situation. For example, he repeatedly argued that none of the medical bills were his responsibility because they were incurred by his wife when they were separated and she was living in another state. However, credit reports supplied by him showed that the medical creditors were located in the state where he currently lives with his family. In conclusion, looking at Applicant’s entire financial situation at the present time, the evidence does not support a finding that “there are clear indications that the problem is being resolved or is under control,” as is required by AG ¶ 20(c). Paragraph 1 is found against Applicant.5 Paragraph 2 (Guideline E, Personal Conduct) The Government alleges in this paragraph that Applicant is ineligible for clearance because he has engaged in prohibited conduct, which tends to show poor judgment, unreliability, or untrustworthiness on the part of Applicant. Applicant’s conduct in repeatedly misusing his company issued credit card for personal use comes under the ambit of this Guideline. The following Disqualifying Factors have been considered under AG ¶ 16: (d) credible adverse information that is not explicitly covered under any other guideline and may not be sufficient by itself for an adverse determination, but which, when combined with all available information supports a whole-person assessment of questionable judgment, untrustworthiness, unreliability, . . . unwillingness to comply with rules and regulations, or other characteristics indicating that the person may not properly safeguard protected information. This includes but is not limited to consideration of: (3) a pattern of dishonesty or rule violations; (4) evidence of significant misuse of Government or other employer’s time or resources; and (f) violation of a written or recorded commitment made by the individual to the employer as a condition of employment. 10 The following Mitigating Conditions under AG ¶ 17 may also have application to this case: (c) the offense is so minor, or so much time has passed, or the behavior is so infrequent, or it happened under such unique circumstances that it is unlikely to recur and does not cast doubt on the individual’s reliability, trustworthiness, or good judgment; and (d) the individual has acknowledged the behavior and obtained counseling to change the behavior or taken other positive steps to alleviate the stressors, circumstances, or factors that caused untrustworthy, unreliable, or other inappropriate behavior, and such behavior is unlikely to recur. Applicant engaged in extremely poor decision making by repeatedly using his corporate credit card for personal use. Even assuming that the last time was his wife’s fault, the fact remains that he did it three other times, after being warned in writing that such action was not allowed, and could result in termination. Applicant has elected not to have a corporate credit card in his current job, thereby avoiding any recurrence of the problem. He credibly testified that he is concerned enough about this conduct that he will not engage in it again. It is obvious that he has learned his lesson and, accordingly, subparagraph 1.y and this paragraph are found for Applicant. Whole-Person Concept Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a security clearance by considering the totality of the applicant’s conduct and all the relevant circumstances. 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. The administrative judge must 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. I considered the potentially disqualifying and mitigating conditions in light of all the relevant facts and circumstances surrounding this case. The discussion under Guidelines F and E, above, applies here as well. Applicant has had financial problems for several years, which have not been completely resolved. He has a history of not 11 paying his extensive debts, and it is too soon, even with his recent payments, to show that he is now trustworthy and reliable. Applicant’s conduct with regards to his finances was not mitigated. As stated, he mitigated the security concerns of his personal conduct with regards to misuse of his company credit card. Under AG ¶ 2(a)(3), his conduct is recent and continuing. I cannot find that there have been permanent behavioral changes under AG ¶ 2(a)(6). Accordingly, I also cannot find that there is little to no potential for pressure, coercion, exploitation, or duress (AG ¶ 2(a)(8)); or that there is little to no likelihood of continuation or recurrence (AG ¶ 2(a)(9)). Overall, the record evidence leaves me with questions and doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant has not mitigated the security concerns arising from his financial history and situation. Accordingly, the evidence supports denying his request for a security clearance. Formal Findings Formal findings for or against Applicant on the allegations set forth in the SOR, as required by section E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraph 1.a: Against Applicant Subparagraph 1.b: For Applicant Subparagraph 1.c: For Applicant Subparagraph 1.d: Against Applicant Subparagraph 1.e: Against Applicant Subparagraph 1.f: For Applicant Subparagraph 1.g: For Applicant Subparagraph 1.h: For Applicant Subparagraph 1.i: For Applicant Subparagraph 1.j: For Applicant Subparagraph 1.k: Against Applicant Subparagraph 1.l : For Applicant Subparagraph 1.m: For Applicant Subparagraph 1.n : For Applicant Subparagraph 1.o: For Applicant Subparagraph 1.p: For Applicant Subparagraph 1.q: Against Applicant Subparagraph 1.r : Against Applicant Subparagraph 1.s: Against Applicant Subparagraph 1.t : Against Applicant Subparagraph 1.u: For Applicant Subparagraph 1.v: For Applicant 12 Subparagraph 1.w: For Applicant Subparagraph 1.x : For Applicant Subparagraph 1.y: For Applicant Paragraph 2, Guideline E: FOR APPLICANT Subparagraph 2.a.: For Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied. WILFORD H. ROSS Administrative Judge