1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 14-04045 ) Applicant for Security Clearance ) Appearances For Government Julie R. Mendez, Esq., Department Counsel For Applicant: Pro se __________ Decision __________ DUFFY, James F., Administrative Judge: Applicant failed to mitigate the security concerns under Guideline F (financial considerations). Clearance is denied. Statement of the Case On January 21, 2013, Applicant submitted an Electronic Questionnaire for Investigations Processing (e-QIP). Based on a review of Applicant’s e-QIP and the ensuing investigation, Department of Defense (DOD) adjudicators issued Applicant a Statement of Reasons (SOR) on October 17, 2014, pursuant to Executive Order 10865, Safeguarding Classified Information Within Industry, dated February 20, 1960, as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program, dated January 2, 1992, as amended (Directive); and the adjudicative guidelines (AG) implemented on September 1, 2006. The SOR alleged security concerns under the financial considerations guideline. On December 30, 2014, Applicant answered the SOR and elected to have his case decided on the written record in lieu of a hearing. On March 18, 2015, Department 2 Counsel prepared a File of Relevant Material (FORM) that contained documents marked as Items 1 through 5. On April 28, 2015, Applicant received a copy of the FORM and was given 30 days from its receipt to submit objections and supply additional information. Applicant did not submit a response to the FORM. The case was assigned to me on August 12, 2015. Findings of Fact Applicant is a 45-year-old employee of a defense contractor. He has been working for that contractor since February 2000. He graduated from high school in June 1987. He reported no military service. He has never been married, but lives with a cohabitant. He has two children, ages 6 and 16. He has held a security clearance for about 15 years.1 The SOR alleged that Applicant had 12 delinquent debts totaling $62,580 (SOR ¶¶ 1.a-1.l). In his Answer to the SOR, Applicant admitted all of the allegations with the exception of SOR ¶ 1.i ($2,363 debt). His admissions are incorporated as findings of fact. A credit report (Item 3) established the debt in SOR ¶ 1.i.2 Applicant attributed his financial problems to an irresponsible girlfriend and to making poor financial decisions. However, he provided scant information about those circumstances. He also indicated that he had a serious medical condition that caused him to miss work for three months.3 SOR ¶¶ 1.a through 1.c are past-due tax debts totaling about $11,226. Applicant claimed that he has a repayment plan for those past-due taxes, but provided no proof of the plan or the associated payments. SOR ¶ 1.d is a $21,532 delinquent second mortgage on a foreclosed home. No evidence was presented to establish the mortgage debt was being resolved. SOR ¶¶ 1.e through 1.l are consumer debts, totaling $29,822. In his Answer to the SOR, Applicant indicated that he was unable to pay the consumer debts.4 Applicant has worked for a fire department and in security positions for 28 years. He indicated that he never had any disciplinary problems. He did not provide a monthly budget or evidence that he received financial counseling. It is unknown whether he has any discretionary income remaining each month after payment of his expenses.5 1 Items 1, 2. 2 Item 1. 3 Item 1. 4 Items 1-5. 5 Items 1-5. 3 Policies The President of the United States has the authority to control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information. Department of the Navy v. Egan, 484 U.S. 518, 527 (1988). The President has authorized the Secretary of Defense to grant eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information Within Industry § 2 (Feb. 20, 1960), as amended. The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security, emphasizing that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These AGs 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 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, in reaching a decision. The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk that the 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 “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. See also Executive Order 12968 (Aug. 2, 1995), Section 3. Thus, a clearance decision is merely an indication that the applicant has or has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed and an applicant’s security suitability. See ISCR Case No. 95-0611 at 2 (App. Bd. May 2, 1996). 4 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.” 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 clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b). Analysis Guideline F, Financial Considerations The security concern under this guideline is set out in AG ¶ 18: Failure or inability to live within one’s means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. Applicant’s admissions and the record evidence established two disqualifying conditions in AG ¶ 19: (a) inability or unwillingness to satisfy debts; and (c) a history of not meeting financial obligations. Four 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 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; and 5 (d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts. None of the mitigating conditions are fully established. His delinquent debts are ongoing. While Applicant encountered recent medical problems that caused him to miss work for three months, he failed to present sufficient evidence to establish that his financial problems were incurred due to conditions beyond his control and that he acted responsibly under the circumstances. From the record evidence, I am unable to find that Applicant’s financial problems are being resolved and are unlikely to recur. No evidence was presented that he received financial counseling. His financial problems continue to cast doubt on his current reliability, trustworthiness, and good judgment. Whole-Person Concept In the adjudication process, an administrative judge must carefully weigh a number of variables known as the whole-person concept. Available information about the applicant as well as the factors listed in AG ¶ 2(a) should be considered in reaching a determination. In this case, I gave due consideration to the information about Applicant in the record and concluded the favorable information does not outweigh the security concerns at issue. Applicant failed to meet his burden of persuasion. His financial problems create doubts about his current eligibility to access classified information. Following the Egan decision and the “clearly consistent with the national interest” standard, doubts about granting Applicant’s eligibility for a security clearance must be resolved in favor of national security. Formal Findings Formal findings as required by Section E3.1.25 of Enclosure 3 of the Directive are: Paragraph 1, Guideline F: Against Applicant Subparagraphs 1.a – 1.l: Against Applicant Decision In light of all 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. Clearance is denied. ________________ James F. Duffy Administrative Judge