DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 15-04640 ) ) Applicant for Security Clearance ) Appearances For Government: Aubrey De Angelis, Department Counsel For Applicant: Pro se October 19, 2016 ______________ Decision ______________ LOKEY ANDERSON, Darlene D., Administrative Judge: The Applicant submitted his Electronic Questionnaire for Investigations Processing (e-QIPs) November 12, 2014. (Government Exhibit 1.) On January 29, 2016, the Department of Defense (DoD), pursuant to Executive Order 10865 and Department of Defense Directive 5220.6 (Directive), dated January 2, 1992, (as amended), issued a Statement of Reasons (SOR) to the Applicant, which detailed reasons why the DOD could not make the preliminary affirmative finding under the Directive that it is clearly consistent with the national interest to grant or continue a security clearance for the Applicant and recommended referral to an Administrative Judge to determine whether clearance should be denied or revoked. Applicant responded to the SOR on February 29, 2016, and he requested a hearing before a Defense Office of Hearings and Appeals Administrative Judge. This case was assigned to this Administrative Judge on April 19, 2016. A notice of hearing was issued on May 3, 2016, scheduling the hearing for June 2, 2016. At the hearing the Government presented five exhibits, referred to as Government Exhibits 1 through 5, which were admitted without objection. The Applicant presented five exhibits, referred to as Applicant’s Exhibits A through E, which were admitted without objection. He also testified on his own behalf. The official transcript (Tr.) was received on June 10, 2016. Based upon a review of the pleadings, exhibits, and testimony, eligibility for access to classified information is denied. FINDINGS OF FACT Applicant is 36 years old, has been married twice, and has two children and a step-child. He has a high school diploma and one year of college. He is currently employed as an Electronic Maintenance Technician 3 with a defense contractor and is seeking to obtain a security clearance in connection with this employment. The Government opposes Applicant's request for a security clearance, on the basis of allegations set forth in the Statement of Reasons (SOR). The following findings of fact are entered as to each paragraph and guideline in the SOR: Paragraph 1 (Guideline F - Financial Considerations) The Government alleges that Applicant is ineligible for clearance because he is financially overextended and at risk of having to engage in illegal acts to generate funds. There are five delinquent debts set forth in the SOR. Applicant admitted each of the allegations set forth in the SOR under this guideline. Credit reports of the Applicant dated November 18, 2014; January 11, 2016; and April 7, 2016; which include all three credit reporting agencies, reflect that he is indebted to each of the creditors set forth in the SOR in an amount totaling in excess of $44,000. (Government Exhibits 2, 3 and 4.) Applicant has been working for his current employer for sixteen years. He has been a model employee, with no disciplinary issues or security violations. Applicant explained that his financial difficulties began when he separated from his first wife in 2007. He moved out and rented a room from a friend. His wife stayed in the house with the children. In April 2009, they filed for divorce, and it was final in December 2009. As they were trying to establish lives separate from the marriage, it became apparent that neither of them could afford the mortgage payment on the house. The cost involved in trying to maintain two households and the children’s necessities became impossible. Applicant fell behind on the mortgage payments. His wife tried to obtain a loan modification in order to stay in the house, but was not successful. The idea of selling the property was discussed, but with the housing market collapsing, the value of his property was worth much less than what he owed. The lender was not interested in a short sale. He and his ex-wife decided it best to allow the house to be foreclosed upon in 2010. Applicant testified that he only became aware of the fact that he had other delinquent debts during his security clearance background investigation. His moves, phone number, and address changes prevented him from getting notices from creditors. There is also some evidence in the record that suggests that Applicant and his wife went on vacation when they could have used the money to pay bills. 2 The following debts became delinquent and owing: 1.a. A delinquent mortgage account owed to a bank was charged off in the approximate amount of $40,713. This was the second mortgage on the house that was foreclosed upon. A home equity loan that Applicant took out in 2006 to do repairs on the house, to pay off his car, and other bills. Applicant has been unable to afford to make the payments. This debt is still reporting delinquent on his credit report. (Tr. p. 31, and Government Exhibit 3.) Applicant has never received an IRS Form 1099-C. He is waiting for the debt to fall off of his credit report. (Tr. p. 49.) 1.b. A delinquent medical bill owed to a hospital that was placed for collection in the approximate amount of $581 remains owing. Applicant states that this was a medical bill for his son’s elbow injury. Applicant indicates that he set up a payment arrangement with automatic payment deductions from his bank account that started in February 2016. (Tr. p. 33.) He pays $75 monthly to resolve the debt. (Applicant’s Exhibit A.) 1.c. A delinquent credit card debt owed to a creditor that was placed for collection in the approximate amount of $2,607 remains owing. Applicant states that he opened the account in 2005 and last made a payment on the account in September 2008. In October 2011, a court judgment was entered against him, and the amount owed increased to $3,558.89. (Applicant’s Exhibit B.) In December 2011, Applicant’s wages were garnished by the creditor in the amount of $500 monthly, until the debt was completely satisfied in October 2013. (Tr. p . 41.) 1.d. A delinquent medical debt owed to a creditor that was placed for collection in the approximate amount of $442 remains owing. Applicant states that as of May 31, 2016, the balance has increased to $2,506.68. He has made two payment of $100 each. (Applicant’s Exhibit C.) He has not made any further payments because the collection agency is demanding payment in full. (Tr. p. 44.) Applicant does not have the money to pay the debt. 1.e. A delinquent mortgage account owed to a bank for the purchase of his house was foreclosed upon. Applicant believes that the sale of the house in foreclosure satisfied the debt. He has not been contacted by the creditor, and the debt is no longer reflected as owing on his credit report. In the divorce agreement, the parties agreed to share the family obligations incurred during the marriage. Applicant currently earns about $62,000 annually. He is remarried, and his new wife earns about $28,000 annually. They are in the process of purchasing a house owed by his in-laws. Applicant’s current regular monthly financial obligations include child support payments of $900; a mortgage payment of $650; utilities of $400; a car payment of $550; $500 for gas; insurance of $150; cell phones bills of $180; and $500 to $600 on food. Applicant admits that his finances are tight at the end of the month. He has about $500 in savings, and no retirement account. 3 Letters of recommendation submitted on behalf of Applicant from professional associates and friends indicate that he is well thought of and characterized as a leader, who is dependable, responsible, honest, courteous, and knowledgeable in his field. His hard work and integrity are obvious. He consistently displays professionalism and is considered a great asset to the company. (Applicant’s Exhibit E.) Applicant received several Certificates of Achievement and a letter for appreciation from the commanding officer, in recognition of his ongoing commitment to outstanding job performance. (Applicant’s Exhibit D.) POLICIES Enclosure 2 of the Directive sets forth adjudication policies divided into "Disqualifying Factors" and "Mitigating Factors." The following Disqualifying Factors and Mitigating Factors are found to be applicable in this case: Guideline F (Financial Considerations) 18. The Concern. 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. Conditions that could raise a security concern: 19.(a) inability or unwillingness to satisfy debts; and 19.(c) a history of not meeting financial obligations. Condition that could mitigate security concerns: 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. In addition, as set forth in Enclosure 2 of the Directive at pages 18-19, in evaluating the relevance of an individual’s conduct, the Administrative Judge should consider the following general factors: a. The nature, extent, and seriousness of the conduct and surrounding circumstances; 4 b. The circumstances surrounding the conduct, to include knowledgeable participation; c. The frequency and recency of the conduct; d. The individual’s age and maturity at the time of the conduct; e. The extent to which participation is voluntary; f. The presence or absence of rehabilitation and other permanent behavioral changes; g. The motivation for the conduct; h. The potential for pressure, coercion, exploitation or duress; and i. The likelihood of continuation or recurrence. The eligibility criteria established in the DoD Directive identify personal characteristics and conduct, which are reasonably related to the ultimate question, posed in Section 2 of Executive Order 10865, of whether it is “clearly consistent with the national interest” to grant an Applicant’s request for access to classified information. The DoD Directive states, “The adjudicative process is an examination of a sufficient period of a person’s life to make an affirmative determination that the person is an acceptable security risk. Eligibility for access to classified information is predicated upon the individual meeting these personnel security guidelines. The adjudicative process is the careful weighing of a number of variables known as the whole-person concept. Available, reliable information about the person, past and present, favorable and unfavorable should be considered in reaching a determination.” The Administrative Judge can draw only those inferences or conclusions that have reasonable and logical basis in the evidence of record. The Judge cannot draw inferences or conclusions based on evidence, which is speculative or conjectural in nature. Finally, as emphasized by President Eisenhower in Executive Order 10865, “Any determination under this order . . . 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.” CONCLUSIONS In the defense industry, the security of classified industrial secrets is entrusted to civilian workers who must be counted upon to safeguard such sensitive information twenty-four hours per day, seven days per week. The Government is therefore appropriately concerned when available information indicates that an Applicant for clearance may be involved in instances of financial irresponsibility, which demonstrates poor judgment or unreliability. 5 It is the Government’s responsibility to present substantial evidence to support the finding of a nexus, or rational connection, between the Applicant’s conduct and the holding of a security clearance. If such a case has been established, the burden then shifts to the Applicant to go forward with evidence in rebuttal, explanation or mitigation, which is sufficient to overcome or outweigh the Government’s case. The Applicant bears the ultimate burden of persuasion in proving that it is clearly consistent with the national interest to grant him or her a security clearance. In this case the Government has met its initial burden of proving that the Applicant has been financially irresponsible (Guideline F). This evidence indicates poor judgment, unreliability and untrustworthiness on the part of the Applicant. Because of the scope and nature of the Applicant's conduct, I conclude there is a nexus or connection with his security clearance eligibility. The evidence shows that Applicant experienced a period of financial hardship in 2007 when he and his first wife separated. The cost of maintaining two households became too expensive. However, there is also evidence that Applicant had other priorities besides paying his bills. He spent money on a vacation when he could have used it to pay bills. Applicant claims that he was unable to afford to continue making his mortgage payments on his house, and he allowed it to be foreclosed upon in 2010. Since then, not much has changed. The second mortgage on the house, and the largest debt of the five, remains owing, as Applicant cannot afford to pay it. He is waiting for it to fall off of his credit report. In regard to his other creditors, one was paid through garnishment, he is making payments on two others, and one remains owing because he cannot afford to pay it in full. Applicant’s history of excessive indebtedness, without sufficient mitigation, demonstrates a pattern of unreliability. Applicant’s financial situation is tight, even without addressing his delinquent debts. Furthermore, there is little to nothing in the record to show that he has made a good-faith effort to resolve his debts. Without more, Applicant has failed to establish that he is financially responsible. Under the particular circumstances of this case, Applicant has not met his burden of proving that he is worthy of a security clearance. His circumstances have precluded him from showing financial responsibility, and he has not demonstrated the eligibility requirements for access to classified information. His history of excessive indebtedness does not demonstrate that he can properly handle he financial affairs. All but two of the delinquent debts listed in the SOR remain owing. Assuming that he demonstrates a history and pattern of financial responsibility, including the fact that he has not acquired any new debt that he is unable to pay, he may be eligible for a security clearance sometime in the future. However, he is not eligible now. Considering all of the evidence, Applicant has not introduced persuasive evidence in rebuttal, explanation or mitigation that is sufficient to overcome the Government's case. Under Guideline F (Financial Considerations), Disqualifying Conditions 19.(a) inability or unwillingness to satisfy debts; and 19.(c) a history of not meeting financial 6 obligations, apply. It can be argued that Mitigating Condition 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 applies. However, this mitigating condition is not controlling. Applicant has simply been unable to pay his debts. He could benefit from some intense financial counseling. In this case, none of the mitigating conditions are applicable. Accordingly, I find against the Applicant under Guideline F (Financial Considerations). I have also considered the “whole-person concept” in evaluating Applicant’s eligibility for access to classified information. Under the particular facts of this case, the totality of the conduct set forth above, when viewed under all of the guidelines as a whole, supports a whole-person assessment of poor judgement, untrustworthiness, unreliability, a lack of candor, an unwillingness to comply with rules and regulations, and/or other characteristics indicating that the person may not properly safeguard classified information. I have considered all of the evidence presented. It does not mitigate the negative effects of his history of financial indebtedness and the effects that it can have on his ability to safeguard classified information. On balance, it is concluded that Applicant has not overcome the Government's case opposing his request for a security clearance. Accordingly, the evidence supports a finding against Applicant as to the factual and conclusionary allegations expressed in Paragraph 1 of the SOR. FORMAL FINDINGS Formal findings For or Against the Applicant on the allegations in the SOR, as required by Paragraph 25 of Enclosure 3 of the Directive are: Paragraph 1: Against the Applicant. Subpara. 1.a. Against the Applicant. Subpara. 1.b For the Applicant. Subpara. 1.c. For the Applicant. Subpara. 1.d. Against the Applicant. Subpara. 1.e Against the Applicant. 7 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 or continue a security clearance for the Applicant. Darlene Lokey Anderson Administrative Judge 8