1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [Redacted] ) ISCR Case No. 15-08845 ) Applicant for Security Clearance ) Appearances For Government: Nicole A. Smith, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ FOREMAN, LeRoy F., Administrative Judge: This case involves security concerns raised under Guideline F (Financial Considerations). Eligibility for access to classified information is granted. Statement of the Case Applicant submitted a security clearance application (SCA) on April 15, 2015. On June 15, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F. The DOD CAF acted under Executive Order (Exec. Or.) 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) implemented by the DOD on September 1, 2006. The adjudicative guidelines are codified in 32 C.F.R. § 154, Appendix H (2006), and they replace the guidelines in Enclosure 2 to the Directive. Applicant answered the SOR on July 8, 2016, and requested a hearing before an administrative judge. Department Counsel was ready to proceed on August 1, 2016, 2 and the case was assigned to me on September 7, 2016. On September 9, 2016, the Defense Office of Hearings and Appeals (DOHA) notified Applicant that the hearing was scheduled for September 27, 2016. I convened the hearing as scheduled. Government Exhibits (GX) 1, 3, and 4 were admitted in evidence without objection. GX 2, an unauthenticated summary of Applicant’s interview by a security investigator, was not admitted because Applicant declined to waive the authentication requirement of Directive ¶ E3.1.20. (Tr. 24.) Applicant testified but did not present the testimony of any other witnesses or submit any documentary evidence. I kept the record open until October 12, 2016, to enable him to submit documentary evidence. He timely submitted AX A through J, which were admitted without objection. DOHA received the transcript (Tr.) on October 6, 2016. Findings of Fact1 In his answer to the SOR, Applicant admitted the allegations in SOR ¶¶ 1.a and 1.c-1.f. He denied SOR ¶ 1.b. His admissions in his answer and at the hearing are incorporated in my findings of fact. Applicant is a 32-year-old computer security engineer employed by a defense contractor since September 2015. He served on active duty in the U.S. Air Force from July 2002 to February 2013. He was medically discharged because of a serious back injury, and he received an honorable discharge. (Tr. 51-52.) He was unemployed from February 2013 to September 2013, worked as a security analyst in the private sector until June 2014, and was unemployed from June 2014 until April 2015, when he was hired by another defense contractor. He left his job with this defense contractor to accept a better position with another employer, but when he reported for work he was informed that the company had hired someone else from within the company. He had a three-month period of unemployment before he began his current job. (Tr. 33.) He received a security clearance while in the Air Force, and he currently holds a clearance. (Tr. 9.) Applicant married in December 2002. He and his wife have two children, ages 10 and 8. He has been enrolled in an online university since December 2014 but has not received a degree. When Applicant submitted his most recent SCA, he disclosed several delinquent debts that he attributed to his periods of unemployment. The SOR alleges six delinquent debts that are reflected in his credit bureau reports (CBRs) from May 2015 (GX 4) and December 2015 (GX 3). The evidence concerning his delinquent debts is summarized below. SOR ¶ 1.a: delinquent car loan charged off for $12,613. This debt was incurred during the summer of 2014, when Applicant was traveling cross-country to look 1 Applicant’s personal information is extracted from his security clearance application (GX 1) unless otherwise indicated by a parenthetical citation to the record. 3 for employment in a less expensive location. The vehicle broke down, and he was informed that it would cost about $1,700 to repair it and would take a week to obtain the parts and install them. He was unable to afford the repairs or temporary lodging expense while the car was being repaired. (Tr. 47-48.) He surrendered the vehicle to the lender, a nation-wide financial institution, thereby incurring the deficiency alleged in the SOR. He testified that he tried to contact the lender, but all of his telephone calls led him to automated answering systems with no human contact. The lender contacted him in June 2016, and they made a payment agreement to settle the debt for less than the full amount. (Tr. 36-38.) Applicant testified that he made a $1,300 payment on July 1, 2016. His agreement called for subsequent payments of $1,250 in July, August, and September, after which the debt would be satisfied. (Answer to SOR; Tr. 36-37.) His bank records for 2016 reflect two transfers of $600 in June; one transfer of $445 in June; two transfers of $1,200 in July; one transfer of $150 in July; and transfers of $500 and $600 in September 2016. (AX H at 2, 3, 5, and 6; AX I at 2; AX J at 5 and 8.) SOR ¶ 1.b: credit card account charged off for $4,065. In his answer to the SOR, Applicant denied this debt, stating that it was his wife’s debt. His May 2015 CBR reflects that he was an authorized user on this account and not liable for the debt. (GX 4 at 10.) His wife is making regular payments on the debt. (AX A through J, last page of each exhibit.) SOR ¶ 1.c: bank loan charged off for $148. This debt was paid in full on June 24, 2016. (Answer to SOR; AX H at 3.) SOR ¶ 1.d: cable service account referred for collection of $135. This debt was incurred when Applicant overlooked the final payment after moving out of an apartment. He paid this debt in full in June 2016. (Tr. 42-43; AX H at 3.) SOR ¶ 1.e: claim for apartment damage referred for collection of $937. Applicant denied causing any damage. He asked the apartment manager to provide proof of the damage, but received no response. When he received the SOR, he decided to settle the debt, and he settled it for less than the claimed amount. (June 2015 CBR at 2, attached to Answer to SOR; Tr. 44.) SOR ¶ 1.f: credit card account charged off for $8,700. Applicant testified that he fell behind on the payments of this debt due to unemployment. The creditor contacted him, and they reached an agreement that Applicant would make an initial payment of about $1,500 and then make payments of $500 per month until the debt is paid. (Tr. 45.) Applicant’s bank statements reflect a payment of $1,966 in November 2015; payments of $233 and $1,100 in January 2016; and monthly $500 payments from February through August 2016. (AX A through J, last page of each exhibit.) Applicant’s current net pay per month is between $7,500 and $8,000. His wife is also employed, but the record does not reflect her income. He estimates that his net monthly remainder after paying all living expenses is about $2,000 (Tr. 34.) 4 Policies “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President 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.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicants 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 § 2. Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available and reliable information about the person, past and present, favorable and unfavorable. 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 about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” Exec. Or. 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant 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 therein and an applicant’s security suitability. See ISCR Case No. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993). 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 burden of proving a mitigating condition, 5 and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005). An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). “[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 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. This concern is broader than the possibility that a person might knowingly compromise classified information to raise money. It encompasses concerns about a person’s self-control, judgment, and other qualities essential to protecting classified information. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). Applicant’s admissions, his testimony at the hearing, and the documentary evidence submitted at the hearing establish two disqualifying conditions under this guideline: AG ¶ 19(a) (“inability or unwillingness to satisfy debts”) and AG ¶ 19(c) (“a history of not meeting financial obligations”). The following mitigating conditions under this guideline are potentially applicable: 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; 6 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) is not established. Applicant’s debts are numerous, recent, and were not incurred under circumstances making them unlikely to recur. AG ¶ 20(b) is partially established. Applicant encountered several conditions beyond his control: his medical discharge from the Air Force, several periods of unemployment, and an unexpected and expensive car breakdown. He attempted to contact the lender for his car loan, without success. However, when the lender contacted him in June 2016, he responded positively and has taken substantial steps to resolve the debt in SOR ¶ 1.a. He took no action to resolve the debts in SOR ¶¶ 1.c-1.f until he received the SOR and realized that his security clearance was in jeopardy. AG ¶ 20(c) is partially established. Applicant has not received financial counseling, but his financial problems are under control. AG ¶ 20(d) is not fully established. This mitigating condition requires a showing of good faith. Good faith means acting in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation. ISCR Case No. 99-0201, 1999 WL 1442346 at *4 (App. Bd. Oct. 12, 1999). Evidence of past irresponsibility is not mitigated by payment of debts only under pressure of qualifying for a security clearance. Applicant attempted to contact the creditor in SOR ¶ 1.a shortly after the repossession, but he took no action to resolve his other debts until he received the SOR. On the other hand, the SOR appears to have been a wake-up call, and he has now taken significant action to resolve all the debts for which he is liable. He resolved the debt in SOR ¶ 1.d even though he thought it was questionable. He is not liable for the debt in SOR ¶ 1.b, which is his wife’s individual account, because he is only an authorized user. AG ¶ 20(e) is applicable to the debt in SOR ¶ 1.b. He disputed it on the ground that it was not his debt, and his CBRs supported his challenge. Applicant initially disputed the debt in SOR ¶ 1.e, but he abandoned his dispute and resolved it. Whole-Person Concept 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 7 consideration of the guidelines and the whole-person concept. In applying the whole- person concept, an 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. An 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. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under that guideline, but some warrant additional comment. Applicant was candid and sincere at the hearing. He served honorably in the Air Force for more than ten years and held a security clearance during his service. He had multiple periods of unemployment after his Air Force career was ended by a serious back injury. A security clearance adjudication is an evaluation of an individual’s judgment, reliability, and trustworthiness. It is not a debt-collection procedure. ISCR Case No. 09- 02160 (App. Bd. Jun. 21, 2010.) Applicant was candid about his financial problems when he submitted his SCA, but he did not take them seriously until he received the SOR. He now realizes his obligation to keep his finances in order. He has resolved or is resolving all his delinquent debts. I am satisfied that his financial problems will not recur.2 After weighing the disqualifying and mitigating conditions under Guideline F, and evaluating all the evidence in the context of the whole person, I conclude Applicant has mitigated the security concerns raised by his delinquent debts. Accordingly, I conclude he has carried his burden of showing that it is clearly consistent with the national interest to continue his eligibility for access to classified information. 2 Administrative judges do not have authority to grant conditional clearances. ISCR Case No. 99-0901, 2000 WL 288429 at *3 (App. Bd. Mar.1, 2000). However, the Government has the right to reconsider the Applicant’s eligibility for access to classified information if incidents of financial irresponsibility recur. See ISCR Case No. 10-06943 at 4 (App. Bd. Feb. 17, 2012). 8 Formal Findings I make the following formal findings on the allegations in the SOR: Paragraph 1, Guideline F (Financial Considerations): FOR APPLICANT Subparagraphs 1.a-1.f: For Applicant Conclusion I conclude that it is clearly consistent with the national interest to continue Applicant’s eligibility for access to classified information. Clearance is granted. LeRoy F. Foreman Administrative Judge