1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 14-04567 ) Applicant for Security Clearance ) Appearances For Government: Andrea Corrales Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ HEINY, Claude R., Administrative Judge: Applicant contests the Department of Defense’s (DoD) intent to deny his eligibility for a security clearance to work in the defense industry. He had 11 collection accounts that totaled more than $28,000. Applicant has mitigated the financial considerations security concerns. Clearance is granted. History of the Case On October 31, 2014, acting under the relevant Executive Order and DoD Directive,1 the DoD issued a Statement of Reasons (SOR) detailing financial considerations security concerns. DoD adjudicators could not find that it was clearly consistent with the national interest to grant or continue Applicant’s security clearance. On February 23, 2015, DOHA received Applicant’s SOR answer and his request for a hearing. On September 30, 2015, I was assigned the case. On October 30, 2015, the Defense Office of Hearings and Appeals (DOHA) issued a Notice of Hearing for a hearing to be convened on November 19, 2015. 1 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 At the hearing, Government’s Exhibits (Ex.) 1 through 4 were admitted without objection. Applicant testified, as did two other witnesses on his behalf, and provided 12 documents, Ex. A through J, which were admitted without objection. The record was kept open to allow Applicant to present additional documents. In November 2015, two additional documents were received and admitted without objection as Ex. K and L. On December 3, 2015, DOHA received the hearing transcript (Tr.). Findings of Fact In Applicant’s answer (Answer) to the SOR, he admitted owing three student loan obligations totaling approximately $37,700. He asserted he had made arrangements with two of the creditors and was making monthly payments on another delinquent obligation. He denied owing the remaining obligations and stated they had been removed from his credit report. I incorporate Applicant’s admissions as facts. After a thorough review of the pleadings, exhibits, and submissions, I make the following additional findings of fact. Applicant is a 32-year-old network data communication analyst who has worked for a defense contractor since January 2012, and he seeks to retain his security clearance. (Ex. 1, Tr. 17, Tr. 24) His annual salary is approximately $50,000. (Tr. 24) He is not married and has no children. (Ex. 1, Tr. 15) On Applicant’s March 18, 2014 Electronic Questionnaires for Investigations Processing (e-QIP) he listed 13 delinquent accounts. These accounts include ten of the SOR delinquent debts. (Ex. 1) The only SOR debt not listed in the e-QIP was a $205 telephone bill (SOR 1.k). When he completed his April 2014 Personal Subject Interview (PSI), Applicant indicated he was making $375 monthly payments on the debt listed in SOR 1.b ($4,063, which, at the time, was $7,639). (Ex. 1, 4) Applicant asserts his financial problems began when he was attending college. (Ex. 4) From September 2002 through November 2004, he attended a technical school and received an associate’s degree. (Ex. 1, Tr. 26) From January 2005 through June 2008 (estimated) and from August 2007 (estimated) to May 2009, he also attended a college and a university. (Ex. 1) While attending school, he was working full time and, at times, he worked part time. He was also supporting his parents. (Ex. 4) In 2007, his employer’s practice, a medical clinic, started having financial problems2, which resulted in Applicant being paid less. (Tr. 36) His income decreased, but not his expenses. Applicant paid the cable television collection account (SOR 1.c, $263), but does not know why it still appeared on an earlier credit report. (Ex. A, Tr. 31) The debt does not appear on his most recent credit reports. (Ex. K, Ex. L, Tr. 31) He disputed the telephone service debt listed in SOR 1.k ($205) and the balance owed is shown as zero. (Ex. B) He owes zero on the debt listed in SOR 1.d ($656). (Ex. D) He satisfied the debt listed in SOR 1.f ($7,639). (Ex. D, Tr. 32) The collection firm collecting on the debts listed in SOR 1.g ($4,173), SOR 1.h ($5,037), SOR 1.i ($1,829) and SOR 1.j 2 The doctor was later jailed for Medicare fraud. (Tr. 36) 3 ($1,682) has closed the accounts and is no longer seeking collection on the four accounts. (Ex. E, F, G, H, Tr. 33, 34) The collection agency instructed the three major credit reporting agencies to delete these accounts from Applicant’s credit file. (Ex. E, F, G, H) Applicant paid the settlement agreement offered by the collection agency. (Tr. 42) Applicant’s April 2014 credit report lists two separate accounts with the creditor listed for the SOR 1.a ($1,339) debt. (Ex. 2) However, he had only one account with this credit card service. (Tr. 39) One is listed as “paid as agreed” and the other as a collection account. His July 2014 credit report lists one account with the creditor and indicates $1,339 is past due. (Ex. 3) One of Applicant’s November 2015 credit reports indicates an account with the same debt as paid, closed, never late. (Ex. L) His other November 2015 credit report lists the account as “paid as agreed.” (Ex. K) Neither of his most recent credit reports lists a delinquent debt with this creditor. Applicant credibly asserts any debt owed this creditor has been paid. (Tr. 30) Applicant’s April 2015 credit report lists a charged-off credit card debt not listed as a debt of concern in the SOR. The account was his parent’s credit card account, but he was an authorized user on the card. (Tr. 41) He contacted the credit card company, but the company had sold the account. Applicant has been unable to track down the current holder of the debt. (Tr. 41) Applicant is making monthly payments on the debt listed in SOR 1.b ($4,063). As of November 30, 2015, he had made six monthly payments of $406 each. (Ex. K, L, Tr. 30) He is also making monthly payments on the debt listed in SOR 1.e ($1,216). As of November 30, 2015, he had made four monthly payments of $157 each. (Ex. L) Applicant lives with his parents. His 2005 car is paid for and he is current on his credit cards, which he is using to re-establish his credit. (Tr. 28, 29, 44) He has approximately $13,000 in his 401(k) retirement plan. (Tr. 44) His net monthly remainder (monthly income less expenses and debt payment) is $800 to $1000. (Tr. 47) He has received counseling to help him understand financial matters. (Tr. 52) He has maintained contact with his creditors. 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 must be considered in evaluating 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, 4 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 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. 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 safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation of 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 of 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 Adjudicative Guideline (AG) ¶ 18 articulates the security concerns relating to financial problems: 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. Additionally, an individual who is financially irresponsible may also be irresponsible, unconcerned, negligent, or careless in properly handling and 5 safeguarding classified information. Behaving responsibly or 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 repay debts under agreed upon terms. Absent evidence of strong extenuating or mitigating circumstances, an applicant with a history of serious or recurring financial difficulties is in a position of risk that is inconsistent with holding a security clearance. An applicant is not required to be debt free, but is required to manage his finances to meet his financial obligations. Applicant had 11 collection accounts and a charged-off account, which totaled approximately $28,000. Disqualifying Conditions AG ¶ 19(a), “inability or unwillingness to satisfy debts” and AG ¶ 19(c), “a history of not meeting financial obligations” apply. Five Financial Considerations 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 began to experience financial problems when he was attending college and taking care of his parents. He is currently making monthly payments on two debts (SOR 1.b, $4,063 and SOR 1.e, $1,216). He reached a settlement agreement and paid off the debts listed in SOR 1.g ($4,173), SOR 1.h ($5,037), SOR 1.i ($1,829), and SOR 1.j ($1.682). He also paid the debts in SOR 1.b ($4,063), SOR 1.c ($263), SOR 1.d ($656), and SOR 1.f ($7,639). He disputes two debts: a telephone service debt (SOR 1.k, $205), which shows a zero balance on his credit report and the credit card debt 6 (SOR 1.a, $1,339) is not listed on his most recent credit report. An account with the same creditor lists a zero balance. Under AG ¶ 20(a), the debt in SOR 1.a occurred under unusual conditions unlikely to recur and does not cast doubt on Applicant’s current reliability, trustworthiness, or good judgment. Applicant was attending school and taking care of his parents. His job at the medical clinic ended, through no fault of his own. His loss of employment is a condition beyond his control that resulted in his financial problems. Since obtaining his current job, he has kept in touch with his creditor and is making monthly payments on his debts. This shows reasonable action on his part. AG ¶ 20(a) and AG & 20(b) apply. Applicant was an authorized user of the card on a charged-off, non-SOR debt. He contacted the original creditor, but has been unable to locate the current holder of the obligation. Based on Applicant’s past conduct in addressing his delinquent debts, once the holder of the obligation is located it is likely he will enter into a repayment agreement to address the debt. Under AG & 20(c) and & 20(d), as previously stated, Applicant has reached a settlement agreement with the holder of four delinquent collection obligations and paid the settlement amount. He paid additional delinquent obligations and two other SOR debts have a zero balance. Having honored the repayment agreements on other debts, he is likely to continue making his monthly payments on his current repayment agreement. AG & 20(c) and & 20(d) apply. Applicant has established a track record of debt payment, and financial considerations security concerns are mitigated. 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 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. 7 I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. Applicant has experienced financial problems while in school and taking care of his parents. His current job provides him sufficient funds to address his obligations. Since obtaining his current job, he has contacted his creditors, arranged repayment agreements, and complied with the terms of those agreements. He is not living beyond his means. He has a 2005 vehicle and is current on his obligations. His payment history indicates he will continue making timely, monthly payments on his debts until the obligations are paid. The issue is not simply whether all his debts are paid—it is whether his financial circumstances raise concerns about his fitness to hold a security clearance. See AG & 2(a)(1). Overall, the record evidence leaves me without questions and doubts about Applicant’s eligibility and suitability for a security clearance. 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, Financial Considerations: FOR APPLICANT Subparagraphs 1.a through 1.k: 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. ______________________ CLAUDE R. HEINY II Administrative Judge