1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) --------------------- ) ISCR Case No. 15-00257 ) Applicant for Security Clearance ) Appearances For Government: Tara R. Karoian, Esquire, Department Counsel For Applicant: Pro se ______________ Decision ______________ MARSHALL, Jr., Arthur E., Administrative Judge: Statement of the Case On July 10, 2015, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F (Financial Considerations).1 In an August 5, 2015, answer to the SOR, Applicant responded to the allegations with comments. He also requested a determination based on the written record. On August 28, 2015, the Government issued a File of Relevant Material (FORM) with seven attachments (“Items”). Applicant timely responded to the FORM. The case was assigned to me on October 28, 2015. Based on my review of the case file and submissions, I find Applicant mitigated financial considerations security concerns. Findings of Fact Applicant is a 42-year-old husband and father of two children, whose wife is unable to work as an in-home daycare provider due to medical issues. Applicant is a site lead who has worked for the same defense contractor since 2010. He earned a high 1 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 on September 1, 2006. 2 school diploma in 1992, then served honorably in the United States military from 1992 through 1996. He also served as an active reservist in the military from 2002 through 2010, when he was converted to inactive status due to funding cuts. Applicant wrote that he acquired delinquent debt as the result of his military service conversion and a reduction in work pay; unspecified expenses related to both of his daughters, a recent high school graduate and a college student, unexpectedly becoming pregnant, ceasing their schooling, and returning home; approximately $1,900 spent toward his wife’s spinal surgery; about $2,700 for expenses related to the 2012 passing of his mother, and at least $1,200 spent for his father’s 2015 funeral. Around the same time in 2015, he received a notable salary raise at work that enabled him to start addressing his finances in earnest, which he proceeded to commence that Spring. At issue in the SOR are 15 delinquent accounts representing approximately $15,300.2 Applicant admits all allegations except for the obligation noted at 1.d for $654, which the facts indicate is a duplicate of the debt at 1.c. In his response to the SOR, Applicant referenced repayment plans and his intentions to investigate debts of which he previously had no knowledge. No supporting documentary evidence reflecting such plans, payments, or efforts to dispute or investigate accounts, however, were appended. Applicant did, however, provide documentary evidence that he requested loan assistance from his mortgagor, the debtor noted at SOR allegation 1.a with a past-due balance of $3,625 on a total loan of $96,015, which resulted in an offer for a loan modification in June 2015. While he attached a copy of the acceptance letter addressed to the lender on June 29, 2015, dated before the June 30, 2015, deadline, there is no evidence of mailing and no indication as to the amount of the loan offer or its terms. After receiving the FORM, Applicant forwarded documentation related to most of the obligations reflected in the SOR allegations. Regarding the loan noted at SOR allegation 1.a, he submitted a substantially completed loan modification package, poised for submission on the date of his FORM Response. Regarding the debt noted at SOR allegation 1.b, for a charged-off auto loan in the approximate amount of $6,416, Applicant provided documentary evidence that he received an offer to settle the debt for $2,603. Under the offered terms, it was to be paid in nine payments over nine months. Applicant provided evidence of two payments toward the debt of $289.23 each, from August 2015 and September 2015, respectively. Applicant noted that he has not yet resolved the medical debts noted at SOR allegation 1.c, 1.d, or 1.e. He wrote that he spoke with an unidentified representative of the collection agent, but provided no documentary expression of their discussion. Regarding SOR allegation 1.f, for a $648 collection balance, Applicant provided evidence that he accepted and satisfied the debt upon his receipt of an offer to settle the balance for $648.49. As for allegation 1.g, another collection effort for $648, 2 It is noted that the medical accounts noted at SOR allegations 1.c and 1.d, each for $654 with account numbers 3903600 and 390360, respectively, appear to be duplicates. 3 Applicant provided documentary evidence of an offer to settle the debt for $570.53, with evidence he has made two of the contemplated payments, amounting to $266.24. He expected to have the balance satisfied by October 2015. SOR allegation 1.h, for a $565 collection effort, was made subject to a settlement of about $460, with the first two payments, for $100 and $52.22, respectively, paid. It should be satisfied by March 2016. The several allegations reflected at SOR 1.i-1.o are additional medical debts. As noted above with the other medical accounts, Applicant wrote that he made contact with the creditors, but that no repayment arrangements have yet been made. He hopes to repay these and the other medical debts, amounting to about $2,800, after he satisfies his other obligations. He expects to have this completed in 2016. There is no evidence as to whether Applicant has received financial counseling, nor is there evidence regarding a recent pay raise. However, his submitted evidence indicates that he has been capable of successfully negotiating with his creditors effectively and either devising or agreeing workable repayment schedules. Policies When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are used in evaluating an applicant’s eligibility for access to classified information. These guidelines are not inflexible rules of law. Instead, 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.” All available, reliable information about the person should be considered 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, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel and has the ultimate burden of persuasion to obtain a favorable security decision.” A person who seeks access to classified information enters into a fiduciary relationship with the Government predicated upon trust and confidence. Decisions 4 include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard 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 Under Guideline F, AG ¶ 18 sets forth that the security concern under this guideline is that 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 engaging in illegal acts to generate funds. The Government introduced evidence showing Applicant acquired over $15,000 in delinquent debt, invoking two financial considerations disqualifying conditions: AG ¶ 19(a) inability or unwillingness to satisfy debts; and AG ¶ 19(c) a history of not meeting financial obligations. Five conditions could mitigate these finance-related security concerns: 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. 5 Applicant’s financial distress was precipitated by his conversion from active duty reserve service to inactive duty status due to budgetary cuts, and to a reduction in salary at work. Unanticipated expenses soon arose when both his daughters unexpectedly became pregnant and returned home, when his wife needed spinal surgery to address a condition that had prevented her from working, and when expenses related to the funerals for both his parents arose. The military conversion and reduction in pay occurred in the early 2010s, followed in quick succession by the pregnancies, the surgery, and the funerals between 2012 and 2015. At a minimum, the surgical expenses and funeral expenses, alone, amounted to about $6,000, not including expenses related to his daughters’ lost tuition, housing costs, and medical expenses. Although there is no documentary evidence indicating Applicant has received financial counseling and he has not indicated that he disputes any of the accounts at issue except for the duplicate entry at SOR allegation 1.d, there is evidence that his recent pay raise has significantly helped him make progress on his debts. His documentation shows that he has addressed all the accounts at issue in the SOR, except for the medical debts noted at 1.c,1.e, and 1.i-1.o, representing about $2,800 in delinquent debt.3 To his credit, he has initiated contact with his medical creditors and expects to start paying them when his current repayment plans are completed, which should be soon forthcoming. AG ¶ 20(a), AG ¶ 20(c), and AG ¶ 20(d) apply. AG ¶ 20(b) only applies in part because there is insufficient information as to how Applicant contemporaneously handled his acquisition of debt between 2012 and 2015. 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 relevant circumstances. The administrative judge should consider the adjudicative process factors listed at AG ¶ 2(a). Under AG ¶ 2(c) sets forth the need to utilize a whole-person evaluation. I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I incorporated my comments under the guideline at issue in my whole-person analysis. Applicant is 42-year-old husband and father of two children, whose wife has back issues that, despite surgery, have prevented her from working. He has reliably been employed for the same employer since 2010, following high school graduation and many years of honorable active duty and reserve military service. Applicant acquired delinquent debt as the result of his conversion from active to inactive reserve military service, a pay reduction, expenses related to his daughters’ pregnancies, his wife’s spinal surgery, and funeral-related expenses for both his parents. In sum, he acquired about $15,000 in delinquent debt between about 2012 and early 2015. 3 This excludes the duplicate entry shown at SOR allegation 1.d. 6 In 2015, Applicant received a significant pay raise. With the income, he was able to start addressing his delinquent debt, an effort he apparently commenced before receiving the July 2015 SOR. To date, he has addressed all non-medical accounts, debts amounting to over $12,000 of the approximately $15,000 at issue. His documentary evidence shows that he has modified his home loan, settled some accounts, negotiated repayment plans, and made notable progress in making payments on his repayment plans. He has made contact with his remaining creditors, each related to medical accounts, and articulated a plan to address his remaining accounts when he finishes his current repayment schedules. He expected to have those completed by early 2016, a reasonable goal given the balances and payments at issue. With his plan for addressing his delinquent debts successfully implemented and notable progress demonstrated, I find that financial considerations security concerns are 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: FOR APPLICANT Subparagraphs 1.a-1.o: For Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant Applicant a security clearance. Eligibility for access to classified information is granted. _____________________________ Arthur E. Marshall, Jr. Administrative Judge