1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-00637 ) Applicant for Security Clearance ) Appearances For Government: Charles Hale, Esq., Department Counsel For Applicant: Pro se ___________ Decision ___________ RIVERA, Juan J., Administrative Judge: Applicant’s finances were adversely affected by circumstances beyond his control. He has established a track record of debt payment and resolution. He understands that he is required to demonstrate financial responsibility to be eligible for a clearance. Financial considerations security concerns are mitigated. He also mitigated the personal conduct security concerns. Access to classified information is granted. History of the Case Applicant submitted a security clearance application (SCA) on April 2, 2015. After reviewing it and the information gathered during a background investigation, the Department of Defense (DOD) was unable to make an affirmative decision to grant Applicant eligibility for a clearance. On September 1, 2016, the DOD issued Applicant a Statement of Reasons (SOR) alleging security concerns under Guideline F (financial considerations) and Guideline E (personal conduct).1 Applicant answered the SOR on September 9, 2016 (Answer), and requested a hearing before an administrative judge from the Defense Office of Hearings and Appeals (DOHA). 1 The DOD acted 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 (Directive) (January 2, 1992), as amended; and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), implemented by the DOD on September 1, 2006. 2 The case was assigned to me on October 26, 2016. DOHA issued a notice of hearing on October 27, 2016, scheduling the hearing for November 1, 2016. Applicant’s hearing was held as scheduled. Government exhibits (GE) 1 through 7, and Applicant’s exhibits (AE) 1 through 14 were admitted into evidence without objection (AE 13 and 14 were submitted post-hearing). On November 9, 2016, DOHA received the transcript of the hearing. Procedural Issues Applicant requested an expedited hearing on October 24, 2016, and the hearing was scheduled for November 1, 2016. (Hearing Exhibit (HE) 1) At the hearing, he stated that he had sufficient time to prepare for his hearing and was ready to proceed. He affirmatively waived his right to 15 days advance notice of his hearing. (Tr. 12-13) Findings of Fact Applicant denied the three allegations under SOR ¶ 1, admitted the three factual allegations under SOR ¶ 2, and provided some explanations and evidence in extenuation and mitigation. His admissions are incorporated herein as findings of fact. After a thorough review of the record evidence, and having observed Applicant’s demeanor while testifying, I make the following additional findings of fact: Applicant was born in Pakistan, immigrated to the United States at age 13 in 1980, and became a naturalized U.S. citizen in 1985. He graduated from a U.S. high school in 1984, received a bachelor’s degree in 1991, and earned a master’s degree in 1993. Applicant was married in 1993, and divorced in 2009. He has four children of his marriage, ages 21, 19, 18, and 15. Applicant is a 49-year-old entrepreneur who has been working as a consultant for several federal contractors in support of government agencies since 2000. He claimed that his company revenue was over a million dollars in 2015, and his gross salary was $84,000. He testified that his income fluctuates based on the pending contracts between $10,000 and $15,000 a month. Applicant explained that before 2007, he and his wife owned three properties in another state and two in his state of residence. After his divorce, the out-of-state properties were awarded by the court to his ex-wife. He transferred the property deeds to her, and she failed to transfer the mortgages to her name only. Eventually, she sold the three properties. Applicant retained the two properties in his state of residence. He lost one property when he failed to make some payments, and has retained the second property which also has an equity line of credit on it. After his divorce, the court ordered Applicant to assume responsibility for all marital debts. Applicant submitted his SCA in 2015. In response to Section 22 (Police Record), he disclosed that in 2009 he was charged with a felony offense for spying on his then wife. In response to Section 25 (Investigations and Clearance Record), he disclosed that around 2009-2010, he was granted a clearance while working for a contractor in support 3 of a federal agency. The agency revoked his clearance in 2011-2012 when he failed to answer financial interrogatories. In response to Section 26 (Financial Record), Applicant also disclosed that during the last seven years he had financial problems related to his divorce and periods of unemployment and underemployment. The subsequent background investigation confirmed Applicant’s disclosures and revealed the three debts alleged in the SOR, and that Applicant was involved in numerous domestic disturbances between 2006 and 2009, was charged with a felony offense in 2009, and that he assaulted a man in 2008. Applicant’s credit reports and his SOR and hearing admissions established the debts in the SOR and the personal conduct allegations. The status of his SOR debts is as follows: SOR ¶ 1.a ($64,212) Applicant admitted this was his credit card debt. He denied the SOR allegation because it alleged over $17,000 more than what he owed. Applicant explained that during his separation and divorce period, he was unable to work overseas or work overtime because he had shared custody of his children. He used his credit card to pay for his living expenses, debts, and his and his ex-wife’s legal fees, which he estimated were $330,000. (Tr. 50) He also accrued medical expenses that he could not pay because of his financial situation and because he had no medical insurance. Additionally, the 2012 federal government sequestration caused him to lose several contracts. For some time, he did not have any income and could not make even the minimum payments on his debts. He exhausted all of his savings, and used his credit cards to pay his living expenses. When asked why it had taken him so long to start paying the debt alleged in SOR ¶ 1.a, Applicant explained that at the time of his separation, he had about 11 large accounts for which he was responsible. After the divorce, the court made him responsible for all marital debts, in addition to his child support and alimony responsibilities. He explained that he did not have the financial means to pay all debts at the same time. Applicant’s documentary evidence shows that he has paid many debts and has been making payments on the account alleged in SOR ¶ 1.a, and other debts not alleged in the SOR. Applicant also retained the services of a law firm to help him dispute duplicate accounts, and those accounts he believes are not his responsibility. SOR ¶ 1.b ($1,028) Applicant admitted this was his credit card debt. He presented documentary evidence showing that this debt was paid in December 2014. (AE 2) SOR ¶ 1.c (charged-off medical debt of unspecified amount) Applicant admitted he incurred medical expenses that he was unable to pay because of his financial situation and lack of medical insurance. He presented documentary evidence showing that this debt was paid in December 2014. (AE 3, 4) Applicant admitted that in 2009, he was charged with a class 6 felony. (SOR ¶ 2.a) The charge alleged he installed and used a spyware computer program that allowed him to record keystrokes on his then wife’s computer. Applicant credibly explained that while married he and his wife agreed to install the spyware program on their children’s computer to monitor their Internet use. During the contested divorce, his ex-wife brought up the 4 charge to gain leverage against him. Applicant submitted documentation showing that the charge was dismissed during the criminal case preliminary hearing. The court later expunged his record. (AE 11, 12) Concerning the allegations in SOR ¶¶ 2.b and 2.c, Applicant admitted that between 2006 and 2009, he and his wife were involved in numerous domestic disturbances for which she continuously called the police to their residence. He averred that she was dating another man, and she continuously tried to create excuses to justify their divorce. He also admitted that in 2008, he assaulted his then wife’s paramour. Applicant explained that this was a very difficult time in his life, and sometimes he was moved by his emotions and did not exercise good judgment. Applicant noted that he never had any similar problems before his separation and divorce period; he was never charged for the incidents alleged in SOR ¶¶ 2.b and 2.c; and after his divorce was finalized in 2009, he has not been involved in any incidents of concern with law enforcement. Applicant’s testimony was candid and forthcoming. He attributed his financial problems to his divorce, and some periods of underemployment and unemployment. However, he took responsibility for his financial problems and even though he is still making payments on some of his debts, his financial problems are under control. Applicant’s monthly take home pay appears sufficient to pay his living expenses and debts. Applicant noted that he has been managing his financial situation and has reduced the magnitude of his debt. He believes he has gained control of his finances and plans to pay all his creditors. Applicant credibly testified that the security clearance process opened his eyes to the possibility of him losing his job and the importance of being financially responsible. Applicant promised to continue resolving all his financial obligations. Applicant understands that he is required to demonstrate financial responsibility to be eligible for a security clearance. Applicant submitted numerous reference letters attesting that he is a devoted father, trusted friend, knowledgeable and dedicated professional, and a productive and dependable worker. Additionally, since 2013 he has supported numerous charities and educational institutions as a volunteer, tutor, and financial contributor. Policies Eligibility for access to classified information may be granted “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). 5 The AG list disqualifying and mitigating conditions for evaluating a person’s suitability for access to classified information. Any one disqualifying or mitigating condition is not, by itself, conclusive. However, the AG should be followed where a case can be measured against them, as they represent policy guidance governing access to classified information. Each decision must reflect a fair, impartial, and commonsense consideration of the whole person and the factors listed in AG ¶ 2(a). All available, reliable information about the person, past and present, favorable and unfavorable, must be considered. Security clearance decisions resolve whether it is clearly consistent with the national interest to grant or continue an applicant’s security clearance. The Government must prove, by substantial evidence, controverted facts alleged in the SOR. If it does, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. The applicant bears the heavy burden of demonstrating that it is clearly consistent with the national interest to grant or continue his or her security clearance. Persons with access to classified information enter into a fiduciary relationship with the Government based on trust and confidence. Thus, the Government has a compelling interest in ensuring each applicant possesses the requisite judgment, reliability, and trustworthiness of those who must protect national interest as their own. The “clearly consistent with the national interest” standard compels resolution of any reasonable doubt about an applicant’s suitability for access in favor of the Government. “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; AG ¶ 2(b). Clearance decisions are not a determination of the loyalty of the applicant concerned. They are merely an indication that the applicant has or has not met the strict guidelines the Government has established for issuing a clearance. Analysis Guideline F, Financial Considerations Under Guideline F, the security concern 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 having to engage in illegal acts to generate funds. (AG ¶ 18) This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information. Applicant’s history of financial problems is documented in his credit reports, SOR response, and hearing record. AG ¶ 19 provides two disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability or 6 unwillingness to satisfy debts;” and “(c) a history of not meeting financial obligations.” The Government established the disqualifying conditions in AG ¶¶ 19(a) and 19(c) requiring additional inquiry about the possible applicability of mitigating conditions. Five 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; (d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts; and (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. Applicant’s finances were adversely affected by circumstances beyond his control, including his contentious divorce, and periods of unemployment and underemployment. His documentary evidence established that he resolved two of the three delinquent accounts alleged in the SOR (before receipt of the SOR), and that he has been making consistent payments on the remaining account. I also find that Applicant worked diligently to pay many other accounts that were not alleged in the SOR. He maintained contact with his creditors and resolved or is paying his debts. He credibly promised to resolve the remaining debt in the near future. Based on Applicant’s actions addressing and paying his debts, and his credible and sincere promise to timely pay his debts, future delinquent debt is unlikely to recur and does not cast doubt on his current reliability, trustworthiness, or good judgment. I find there are clear indications that his financial problem is being resolved and is under control. His payments of debts not alleged in the SOR showed good faith. He has sufficient income to keep his debts in current status and to continue making progress paying his remaining debts. His efforts are sufficient to fully mitigate financial considerations security concerns. 7 Guideline E, Personal Conduct AG ¶ 15 articulates the security concern for personal conduct: Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process. Applicant was charged with installing and using spyware software to collect computer keystrokes from his wife’s computer. He admitted that he assaulted his wife’s paramour in 2008, and that between 2006 and 2009, he was involved in multiple domestic disturbance incidents that resulted in the police being called to his residence. Applicant’s questionable behavior triggers the applicability of the following disqualifying conditions under AG ¶ 16: (c) credible adverse information in several adjudicative issue areas that is not sufficient for an adverse determination under any other single guideline, but which, when considered as a whole, supports a whole-person assessment of questionable judgment, untrustworthiness, unreliability, lack of candor; and (e) personal conduct, or concealment of information about one's conduct, that creates a vulnerability to exploitation, manipulation, or duress, such as (1) engaging in activities which, if known, may affect the person's personal, professional, or community standing. AG ¶ 17 lists three conditions that could potentially mitigate the personal conduct security concerns: (c) the offense is so minor, or so much time has passed, or the behavior is so infrequent, or it happened under such unique circumstances that it is unlikely to recur and does not cast doubt on the individual's reliability, trustworthiness, or good judgment; (d) the individual has acknowledged the behavior and obtained counseling to change the behavior or taken other positive steps to alleviate the stressors, circumstances, or factors that caused untrustworthy, unreliable, or other inappropriate behavior, and such behavior is unlikely to recur; and (e) the individual has taken positive steps to reduce or eliminate vulnerability to exploitation, manipulation, or duress. Applicant disclosed his financial problems and the felony charge in his 2015 SCA. He credibly testified that he and his then wife agreed to use the spyware software on their 8 children’s computer to monitor their Internet use. The charge was dismissed by a judge during the criminal case preliminary hearing, and the court expunged his record. Applicant expressed remorse for his behavior during the divorce process. He explained that this was a very difficult time in his life, and sometimes he was moved by his emotions and did not exercise good judgment. There is no evidence to show Applicant had any law enforcement problems before his separation and divorce period, or after his divorce. He has not been involved in any incidents of concern with law enforcement since 2009. Applicant’s disclosure of his past questionable behavior demonstrates an acknowledgment of his mistakes. It also shows his intent to comply with the law, rules, and regulations. By disclosing the information, Applicant reduced his vulnerability to exploitation, manipulation, and duress. Moreover, it shows Applicant’s current maturity, judgment, and desire to be truthful, reliable, and honest. Considering the totality of the circumstances, I find that Applicant has acknowledged his mistakes. His misconduct occurred during a limited period; it happened under circumstances that are unlikely to recur; and it does not cast doubt on his current reliability, trustworthiness, or good judgment. For the above reasons, I find that AG ¶ 17 ¶¶ (c), (d), and (e) apply and the personal conduct security concerns are mitigated. Whole-Person Concept I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case, and under the whole-person concept. AG ¶ 2(c). I have incorporated my comments under Guidelines F and E in my whole-person analysis. Some of the factors in AG ¶ 2(a) were addressed under Guideline F, but some warrant additional comment. Applicant is a 49-year-old entrepreneur and employee of several federal contractors. He showed current financial responsibility by contacting creditors and making payment arrangements to resolve his delinquent debts. He still has one SOR debt to resolve. Applicant’s finances were adversely affected by circumstances beyond his control. He promised to pay or resolve the remaining unpaid SOR debt. He understands that he is required to demonstrate financial responsibility to retain his security clearance and ultimately his job. The Appeal Board has addressed a key element in the whole-person analysis in financial cases stating: [T]he concept of meaningful track record necessarily includes evidence of actual debt reduction through payment of debts. However, an applicant is not required, as a matter of law, to establish that he has paid off each and every debt listed in the SOR. All that is required is that an applicant demonstrate that he has . . . established a plan to resolve his financial problems and taken significant actions to implement that plan. The Judge 9 can reasonably consider the entirety of an applicant’s financial situation and his actions in evaluating the extent to which that applicant’s plan for the reduction of his outstanding indebtedness is credible and realistic. See Directive ¶ E2.2(a) (Available, reliable information about the person, past and present, favorable and unfavorable, should be considered in reaching a determination.) There is no requirement that a plan provide for payments on all outstanding debts simultaneously. Rather, a reasonable plan (and concomitant conduct) may provide for the payment of such debts one at a time. Likewise, there is no requirement that the first debts actually paid in furtherance of a reasonable debt plan be the ones listed in the SOR. ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008) (internal citations and quotation marks omitted). Applicant has established a “meaningful track record” of debt re-payment, and I am confident he will maintain his financial responsibility. Financial considerations security concerns are mitigated. Applicant also mitigated the personal conduct security concerns. His past behavior does not cast doubt on his current reliability, trustworthiness, or good judgment. 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.c: For Applicant Paragraph 2, Guideline E: FOR APPLICANT Subparagraphs 2.a - 2.c: For Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is clearly consistent with national security to continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is granted. _________________________ JUAN J. RIVERA Administrative Judge