1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [Name redacted] ) ISCR Case No. 14-06314 ) ) Applicant for Security Clearance ) Appearances For Government: Daniel F. Crowley, Esquire, Department Counsel For Applicant: Pro se ______________ Decision ______________ HOGAN, Erin C., Administrative Judge: On April 9, 2015, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, Financial Considerations. The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective within the DOD after September 1, 2006. On April 22, 2015, Applicant answered the SOR and requested a decision on the record. Department Counsel issued a File of Relevant Material (FORM) on November 19, 2015. Applicant received the FORM on December 3, 2015. Applicant had 30 days to submit a response to the FORM. He did not submit a response to the FORM. On February 26, 2016, the FORM was forwarded to the Hearing Office and assigned to me on March 24, 2016. Based upon a review of the pleadings, exhibits, and testimony, eligibility for access to classified information is denied. 2 Rulings on Evidence Items 5 and 6 of the FORM are portions of the Report of Investigation (ROI) from the background investigation of Applicant. They are summaries of Applicant’s Personal Subject Interviews conducted as part of his background investigation on September 16, 2013, and April 30, 2014. They are both unsworn and unauthenticated. DOD Directive 5220.6, Enclosure 3, ¶ E3.1.20 states, “An ROI may be received with an authenticating witness provided it is otherwise admissible under the Federal Rules of Evidence.” (see ISCR Case No. 11-13999 (App. Bd., February 3, 2014)). Although Applicant, who is representing himself, has not raised the issue via an objection, I am raising it sua sponte because Items 5 and 6 are not properly authenticated. While Department Counsel mentions the authentication requirement of ¶ E3.1.20 of the Directive in Footnote 1 of the FORM without directly citing it, I cannot conclude Applicant expressly waived this rule because he did not submit a response to the FORM. Waiver means “the voluntary relinquishment or abandonment – express or implied – of a legal right or advantage; the party alleged to have waived a right must have had both knowledge of the existing right and the intention of forgoing it.” Black’s Law Dictionary, 1717 (Bryan A. Garner, editor-in-chief, 9th ed., West 2009). In accordance with the Directive, Enclosure 3, ¶ E3.1.20, Items 5 and 6 are not admissible and will not be considered in this decision. Findings of Fact In his response to the SOR, Applicant admitted the SOR allegations. (Item 1) Applicant is an employee of a DOD contractor seeking to maintain his security clearance. He has worked for his current employer since March 2009. His highest level of education is a Master’s Degree. He divorced in October 2010 and has one son. (Item 2) On August 26, 2013, Applicant submitted an Electronic Questionnaire for Investigation Processing (e-QIP). In response to Section 26 – Delinquency Involving Routine Accounts, Applicant listed several delinquent accounts. (Item 2, section 26) A subsequent background investigation revealed the following delinquent accounts which are alleged in the SOR: a $38,178 delinquent student loan account that was placed for collection in December 2012 (SOR ¶ 1.a: Item 3; Item 7 at 2); an automobile account that was charged off in the amount of $8,942 in November 2011 (SOR ¶ 1.b: Item 4 at 3; Item 7 at 2); a delinquent medical account in the amount of $845 placed for collection in July 2013 (SOR ¶ 1.c: Item 7 at 2); and a $421 television account placed for collection in September 2013 (SOR ¶ 1.d: Item 7 at 2). Additional delinquent accounts include: a $45 gas bill placed for collection in September 2012 (SOR ¶ 1.e: Item 4 at 12; Item 7 at 2); a $10 electric utility bill placed for collection in January 2010 (SOR ¶ 1.f: Item 4 at 4; Item 7 at 10); an $855 credit card account that was placed for collection in March 2009 (SOR ¶ 1.g: Item 4 at 4); a $775 3 cell phone account placed for collection in May 2013 (SOR ¶ 1.h: Item 4 at 12); and a $118 pest control account that was placed for collection in June 2012 (SOR ¶ 1.i: Item 4 at 12). In his response to the SOR, Applicant states that he is currently working with the creditor in SOR ¶ 1.b to pay off the debt. He claims that the debts alleged in SOR ¶¶ 1.e, and 1.f were paid off several years ago. He claims the debt alleged in SOR ¶ 1.g was a corporate credit card and his former employer should have paid off the balance (Item 1). This debt no longer appears on Applicant’s credit report, dated November 2014. SOR ¶ 1.g is found for Applicant. Regarding the remaining debts, Applicant did not provide any additional documentation to corroborate his assertions, such as receipts, bank records, payment agreements, proof of making payments towards a payment plan, and evidence of formal disputes. He also did not exercise the opportunity to submit additional documents in his response to the FORM. Policies 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 mitigating conditions, which must be considered when determining 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 the adjudicative process. The administrative judge’s overarching 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. The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny 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. 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 applicant or proven by Department Counsel. . . .” The applicant has the ultimate burden of persuasion as to obtaining a favorable security decision. 4 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. Decisions include, by necessity, consideration of the possible risk 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. Section 7 of Executive Order 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.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information). Analysis 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 disqualifying conditions that could raise security concerns. I find AG &19(a) (an inability or unwillingness to satisfy debts) and AG &19(c) (a history of not meeting financial obligations) apply to Applicant’s case. Applicant encountered financial problems beginning with his divorce in 2010. The SOR alleges nine delinquent accounts with a total balance of approximately $50,189. These debts are unresolved. Both AG &19(a) and AG &19(c) apply. An individual who is financially irresponsible may also be irresponsible, unconcerned, or careless in his obligations to protect classified information. Behaving irresponsibly in one aspect of life provides an indication of how a person may behave in other aspects of life. A person’s relationship with his creditors is a private matter until evidence is uncovered demonstrating an inability or unwillingness to pay debts under agreed terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant with a history of serious or recurring financial difficulties is in a situation of risk inconsistent with the holding of a security clearance. An applicant is not required to be 5 debt free, but is required to manage his finances in such a way as to meet his financial obligations. The Government’s substantial evidence and Applicant’s admissions raise security concerns under Guideline F. The burden shifted to Applicant to produce evidence to rebut, explain, extenuate, or mitigate the security concerns. (Directive ¶ E3.1.15) An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. (See ISCR Case No. 02-31154 at 5 (App. Bd. Sept. 22, 2005)) The guideline also includes examples of conditions that could mitigate security concerns arising from financial difficulties. The following mitigating conditions potentially apply: AG & 20(a) (the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual’s current reliability, trustworthiness, or good judgment); AG & 20(b) (the conditions that resulted in the financial problem were largely beyond the person=s control (e.g., loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation), and the individual acted responsibly under the circumstances); AG ¶ 20(c) (the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control); AG & 20(d) (the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts); and AG & 20(e) (the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue). AG & 20(a) does not apply. Applicant incurred the delinquent accounts alleged in the SOR between 2010 to 2014. While Applicant admits each debt, he did not provide evidence to show what steps he has taken towards resolving the debts. Aside from the corporate credit card debt alleged in SOR ¶ 1.g, which is no longer on his credit report, the other debts alleged in the SOR remain unresolved. Applicant’s financial issues are ongoing. AG & 20(b) partially applies, because Applicant’s financial problems were partially the result of his divorce in 2010. However, Applicant continued to incur 6 delinquent accounts for several years after his divorce. For this reason, this mitigating condition is given less weight. AG & 20(c) does not apply because Applicant did not attend financial counseling. His delinquent accounts remain unresolved. His financial situation remains uncertain. AG & 20(d) does not apply, because Applicant did not demonstrate that he made a good-faith effort to resolve his delinquent accounts. Aside from saying that certain debts are paid or are being paid, Applicant needed to provide proof that he was, in fact, resolving his debts. Proof of payment such as receipts, bank statements, or a printout of a payment plan history are among the documents Applicant could have provided to show that he was attempting to resolve his delinquent accounts. Applicant did not provide additional evidence and did not demonstrate that he was making a good-faith effort to resolve his delinquent accounts. AG & 20(e) does not apply. Applicant claims he paid off the debts alleged in SOR ¶¶ 1.e and 1.f. He did not provide receipts or proof that the debts were paid. If these two debts were paid in full, Applicant could have disputed these entries with the credit reporting agencies. Applicant provided no indication that he attempted to dispute these debts with the credit reporting agencies or with the creditor directly. AG ¶ 20(e) does not apply. 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 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 security clearance must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. In requesting an administrative determination, Applicant chose to rely on the written record. However, he failed to submit sufficient information or evidence to supplement the record with relevant and material facts that would mitigate financial considerations security concerns. Applicant admits the debts, but has not taken action 7 towards attempting to resolve these accounts, such as entering into a repayment agreement with each creditor. Applicant did not mitigate the concerns arising from financial considerations. The determination of an individual’s eligibility for a security clearance is not a once in a lifetime occurrence, but is based on applying the factors, both disqualifying and mitigating to the evidence presented. Under Applicant’s current circumstances, the granting of a security clearance is not warranted. In the future, if Applicant takes proactive steps towards resolving his delinquent accounts and establishes a track record of repayment, he may demonstrate persuasive evidence of his security worthiness. I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I considered Applicant’s seven years of service with his employer. In the future, he may be able to demonstrate a track record of resolving his financial obligations. It is too soon to make that conclusion at this point. The security concerns raised under financial considerations are not mitigated. 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 – 1.f, 1.h – 1.i: Against Applicant Subparagraph 1.g: 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. _________________ ERIN C. HOGAN Administrative Judge