1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [REDACTED] ) ISCR Case No. 16-00644 ) Applicant for Security Clearance ) Appearances For Government: Chris Morin, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ MARINE, Gina L., Administrative Judge: This case involves security concerns raised under Guideline F for financial considerations. Eligibility for access to classified information is denied. Statement of the Case Applicant submitted a security clearance application on September 16, 2014. On June 10, 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 DOD on September 1, 2006. Applicant answered the SOR on July 12, 2016, and requested a decision on the record without a hearing. Department Counsel submitted the Government’s written case on July 26, 2016 and sent a complete copy of the file of relevant material (FORM) to Applicant, who was given an opportunity to file objections and submit material to refute, 2 extenuate, or mitigate the Government’s evidence. He received the FORM on August 8, 2016, and submitted his response on October 19, 20161, to which the Government did not object. The case was assigned to me on January 5, 2017. Findings of Fact2 Applicant is 44 years old and has been married to his second wife since 2010. He divorced his first wife (to whom he was married for over 15 years) in 2008. He has two children from his first marriage, ages 21 and 23, and two stepchildren from his second marriage, ages 18 and 20. Applicant joined in the Army in 1990 and served on active duty full time until 1996 when he left to attend college. He received his commission in 1999 and returned to active duty full time in 2000. He was a major at retirement.3 After his Army retirement, Applicant became employed full time with a defense contractor. He earns an annual salary of $70,000 and also receives monthly Army retirement pay and monthly VA disability pay. Applicant pays tuition, room, and board for three children who are attending college. His other regular expenses include rent, utilities, and three vehicle payments. Applicant did not provide any further details about his income or expenses. Applicant’s lender foreclosed on his home in 2012 after he was unable to continue making his mortgage loan payments for reasons beyond his control. He denied owing a deficiency balance on this home (SOR ¶ 1.a) based on information obtained from the lender of his VA home loan.4 The Government did not present sufficient evidence to the contrary.5 There is no mortgage debt as alleged in SOR ¶ 1.a. Applicant opened a credit-card account in 1999. The creditor closed the account in 2011 and reported it as charged off in the amount of $16,612 (SOR ¶ 1.b). Applicant claimed that he paid this account in full. He provided a 2016 letter6 from the creditor acknowledging they may have erroneously reported the account but, contrary to Applicant’s assertion, it did not corroborate his claim that he paid the account in full nor does it unequivocally state that he is no longer liable. This debt remains unresolved. 1 Applicant included three attachments with his FORM response, which I have marked as AX 1 through 3. 2 I extracted these facts from Applicant’s FORM response, SOR answer (Item 2), and security clearance application (Item 3), unless otherwise indicated by a parenthetical citation to another item in the record. 3 The record does not reference when Applicant retired from the Army or the characterization of his service. 4 I considered that Applicant answered “I admit” to the allegations contained in SOR 1.a. However, I construe his denial of any deficiency balance in his FORM response as an amendment of that admission. 5 In its FORM, the Government referenced Items 2, 4, and 5 in support of the deficiency balance alleged in SOR ¶ 1.a. However, there is no such fact in any of those items. 6 AX 1 3 Applicant opened another credit-card account in 1999. It was closed in 2009, and the original creditor charged off the account. Another creditor purchased the debt and placed the account for collection in the amount of $14,678 (SOR ¶ 1.c). Applicant stopped paying on this account when he realized that his ex-wife continued to make purchases after their divorce. He admitted that he owes this debt, but has been unsuccessful in his attempts to resolve it. This debt remains unresolved. Applicant opened a credit-card account in 1996. It was closed in 2009, and the creditor charged it off in the amount of $5,471 (SOR ¶ 1.d). Without providing any corroborating documentation, Applicant claimed that he is paying the creditor $150 per month to resolve this account. This debt remains unresolved. Applicant opened a credit-card account in 2009. It was closed in 2013, and the creditor charged off the account in the amount of $3,673 (SOR ¶ 1.e). He admitted that he owes this debt, but has been unsuccessful in his attempts to resolve it. This debt remains unresolved. Applicant opened a credit-card account in 1994. It was closed in 2009, and the creditor charged off the account in the amount of $2,643 (SOR ¶ 1.f). Applicant stopped paying on this account when he realized that his ex-wife continued to make purchases after their divorce. He admitted that he owes this debt, but has been unsuccessful in his attempts to resolve it. This debt remains unresolved. Applicant opened a credit-card account in 1995. It was closed in 2014, and the creditor charged off the account in the amount of $1,065 (SOR ¶ 1.g). He admitted that he owes this debt. Without providing any corroborating documentation, he said that he paid it off in full in October 2016. This debt remains unresolved. Applicant opened another credit-card account in 1994. It was closed in 2009, and the creditor charged off the account in the amount of $1,035 (SOR ¶ 1.h). He admitted that he owes this debt, but has been unsuccessful in his attempts to resolve it. This debt remains resolved. Applicant opened a credit-card account in 2015. It was closed in 2016, and the creditor charged off the account in the amount of $795 (SOR ¶ 1.i). He admitted that he owes this debt and he paid it.7 This debt has been resolved. Applicant owes $645 for a loan account that the creditor placed for collection (SOR ¶ 1.j).8 Without providing any corroborating documentation, Applicant denied owing this debt on the basis that he has no knowledge of it. He also claimed that he was unsuccessful in his attempt to contact the creditor. On this basis, he intends to dispute the account with the credit bureau agencies. This debt remains unresolved. 7 AX 2 8 Item 5 at p. 3 4 Applicant opened an electric-utility account in 2009 and closed it in 2011. The creditor sent the account to collections in the amount of $318 (SOR ¶ 1.k). In his SOR answer, Applicant claimed that he paid the account in full at the time he closed it. In his FORM response, he clarified that he forfeited a deposit in order to cover the outstanding balance. Nevertheless, Applicant claimed that, sometime after he received the FORM, he paid the debt again since he was unable to prove prior payment. Applicant provided a 2016 statement from the creditor9 but, contrary to his assertion, it does not corroborate his claim that he paid the account in full nor does it unequivocally state that he is no longer liable. This debt remains unresolved. Applicant attributes the SOR debt to his 2008 divorce, at which time he assumed all credit-card debt of that marriage.10 In his eQIP, Applicant admitted that he failed to pay that credit-card debt because it included charges made by his ex-wife after the divorce for which he claimed no responsibility. There is no information in the record as to the amount of credit-card debt attributable to the marriage versus said post-divorce charges. In his eQIP, Applicant did not express any intent to pay his reported credit-card debt, but rather considered it “charged off.” He also did not express any intent to pay the unresolved debt to which he admitted in his SOR. However, in his FORM response, Applicant finally expressed an intent to pay certain debt as noted above. Applicant has not received credit counseling. In the FORM, Department Counsel advised him that he had not provided substantial evidence or sufficient documentary proof to support mitigation. Applicant did attach certain documentary evidence to his SOR answer and to his FORM response. However, it is insufficient to support mitigation. 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. 9 AX 3 10 Item 3 at p. 33 5 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, 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 SOR alleges a mortgage loan deficiency balance of $79,000 (SOR 1.a), credit- card debt of approximately $45,407 (SOR ¶¶ 1.b through 1.i.), a $645 delinquent loan account (SOR ¶ 1.j), and a $318 electric bill (SOR ¶ 1.k). The Government did not meet its prima facie burden as to SOR ¶ 1.a. Applicant paid one debt (SOR ¶ 1.i), but the others (SOR ¶¶ 1.b. through 1.h. and 1.j through 1.k.) remain unresolved. 6 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, corroborated by his credit bureau reports, 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 security concerns raised in the SOR may be mitigated by any of the following potentially applicable factors: 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 7 basis of the dispute or provides evidence of actions to resolve the issue. AG ¶ 20(a) is not established. Applicant’s numerous delinquent debts remain unresolved and have persisted in years following his divorce. AG ¶ 20(b) is not fully established. Applicant’s divorce was a circumstance beyond his control. However, Applicant has failed to meet his burden to show that he acted responsibly in light of those circumstances. AG ¶ 20(c) is not established. Applicant has not received financial counseling and the majority of his SOR debt remains unresolved over eight years after his divorce. There are no clear indications that Applicant’s financial problems are under control. AG ¶ 20(d) is not established. I credit Applicant with paying one of his debts (SOR ¶ 1.i). However, because his claims are unsubstantiated by sufficient evidence, I am neither able to conclude that he resolved the debts alleged in SOR ¶¶ 1.b or 1.g, nor that he has made payments towards the debt alleged in SOR ¶ 1d. Moreover, there is insufficient evidence that Applicant attempted to resolve his known delinquent debt during the period between his divorce and his receipt of the SOR. AG ¶ 20(e) is not established. Although Applicant claimed that he has no knowledge of either the creditor or any debt that he owes to the creditor for the debt alleged in SOR ¶ 1.j, he failed to provide sufficient evidence that he has taken action to dispute the debt with the credit bureau agencies. 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 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. 8 I have incorporated my comments under Guideline F in my whole-person analysis, and I have considered the factors AG ¶ 2(a). Because Applicant requested a determination on the record without a hearing, I had no opportunity to evaluate his credibility and sincerity based on demeanor. See ISCR Case No. 01-12350 at 3-4 (App. Bd. Jul. 23, 2003). 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 not mitigated the security concerns raised by his financial indebtedness. Accordingly, I conclude that he has not carried his burden of showing that it is clearly consistent with the national interest to grant him eligibility for access to classified information. Formal Findings I make the following formal findings on the allegations in the SOR ¶: Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT Subparagraph 1.a: For Applicant Subparagraph 1.b – 1.h: Against Applicant Subparagraph 1.i For Applicant Subparagraph 1.j – 1k: Against Applicant Conclusion I conclude that it is not clearly consistent with the national interest to grant Applicant eligibility for access to classified information. Clearance is denied. Gina L. Marine Administrative Judge