1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-01532 ) Applicant for Security Clearance ) Appearances For Government: Chris Morin, Esq., Department Counsel For Applicant: Pro se ___________ Decision ___________ HARVEY, Mark, Administrative Judge: Applicant did not make sufficient progress resolving the debts alleged in his statement of reasons (SOR). From July 2015 to October 2016, after obtaining his current employment, he paid $412 to address his SOR debts, excluding his child support debt. He has fallen further behind on his child support debt. Financial considerations security concerns are not mitigated. Eligibility for access to classified information is denied. Statement of the Case On October 22, 2015, Applicant completed and signed an Electronic Questionnaire for National Security Positions (e-QIP) (SF 86). (Item 3) On June 8, 2016, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued Applicant an SOR pursuant to Executive Order (Exec. Or.) 10865, Safeguarding Classified Information Within Industry, dated February 20, 1960, as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended; and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), which became effective on September 1, 2006. The SOR set forth security concerns arising under the financial considerations guideline. (Item 1) On July 28, 2016, Applicant provided a response to the SOR, and he requested a decision without a hearing. On August 12, 2016, Department Counsel completed the File of Relevant Material (FORM). On August 29, 2016, Applicant received the FORM. On 2 October 4, 2016, Applicant responded to the FORM. On October 31, 2016, Department Counsel indicated he had no objection to the FORM response. On December 22, 2016, the case was assigned to me. The Government’s case consisted of four exhibits. (Items 1-4) Findings of Fact1 In Applicant’s SOR response, he admitted the debts in SOR ¶¶ 1.a through 1.k. (Item 2) He also provided extenuating and mitigating information. Applicant’s admissions are accepted as findings of fact. Applicant is 30-year-old tactics instructor. (Item 3) He began his current employment in July 2015, and his annual salary is $42,000. (SOR response) In 2004, he graduated from high school. (Item 3) He has attended several training courses and some college. (Item 3) He served in the Marine Corps from 2004 to 2012, and he received an honorable discharge. In August 2015, he joined the Army Reserve. (Item 3) From August 2005 to February 2006, Applicant was deployed to Afghanistan. (Item 3) In 2006, he married, and in 2010, he divorced. (Item 3) In his SCA, he did not indicate he had any children. There is no Office of Personnel Management personal subject interview in the file. Applicant evidently has at least one child, as he has a child support responsibility. (SOR ¶ 1.d) Financial Considerations Applicant indicates his financial problems began when he was divorced. (FORM response) In 2012, he left active duty as a sergeant (E-5) and his annual pay was reduced by about $17,500. (FORM response) After leaving active duty, he attended college and held part-time employment. (FORM response) He was unemployed from November 2014 to March 2015. (Item 3) In his October 22, 2015 SCA, Applicant disclosed a mortgage foreclosure in May 2015, for $117,000. (Item 3)2 1Some details have been excluded to protect Applicant’s right to privacy. Specific information is available in the cited exhibits. 2Applicant’s SOR does not allege that he had a mortgage foreclosure in May 2015, for $117,000. In ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006), the Appeal Board listed five circumstances in which conduct not alleged in an SOR may be considered stating: (a) to assess an applicant’s credibility; (b) to evaluate an applicant’s evidence of extenuation, mitigation, or changed circumstances; (c) to consider whether an applicant has demonstrated successful rehabilitation; (d) to decide whether a particular provision of the Adjudicative Guidelines is applicable; or (e) to provide evidence for whole person analysis under Directive Section 6.3. Id. (citing ISCR Case No. 02-07218 at 3 (App. Bd. Mar. 15, 2004); ISCR Case No. 00-0633 at 3 (App. Bd. Oct. 24, 2003)). See also ISCR Case No. 12-09719 at 3 (App. Bd. April 6, 2016) (citing ISCR Case No. 14- 00151 at 3, n. 1 (App. Bd. Sept. 12, 2014); ISCR Case No. 03-20327 at 4 (App. Bd. Oct. 26, 2006)). This allegation will not be considered because there is insufficient factual development in the record to know that happened with this large debt. 3 Applicant’s history of delinquent debt is documented in his credit reports, SOR response, and FORM response.3 The SOR alleged 11 delinquent debts totaling $23,673. The status of his SOR debts is as follows: SOR ¶ 1.a is a collection account debt for $8,403. Applicant said the issue began in August 2014, and pertained to a motorcycle. (Item 3) In his October 22, 2015 SCA, he said he left a message for the creditor. (Item 3) In October 2016, Applicant said he called the collection agent; he left a couple of messages; and he did not receive a response. He also sent an email on October 3, 2016, to the collection agent asking for information. On October 4 and 5, 2016, he attempted to contact the company, and he promised to make payment arrangements of $50 a month. SOR ¶ 1.b is a charged-off bank debt for $511. On July 26, 2016, the creditor indicated the debt was settled for $303 on March 5, 2013. SOR ¶ 1.c is a charged-off bank debt for $4,163. The debt resulted from attorney fees, and the debt began in May 2012. (Item 3) In his October 22, 2015 SCA, he said he would “start making payments in [the] near future.” (Item 3) On October 3, 2016, the creditor wrote Applicant indicating a $50 monthly payment was sufficient for a payment plan, and the first payment was due on October 24, 2016. SOR ¶ 1.d is a delinquent child support debt for $2,299. In his October 22, 2015 SCA, he said his child support was $1,700 delinquent and he was “making frequent payments more than amount needed to pay child support to catch up delinquent, paying $780.00 a month instead of $710.” (Item 3) Applicant provided evidence of the following payments: September 2015 ($780); October 2015 ($780); November 2015 ($780); December 2015 ($780); March 2016 ($521); April 2016 ($760); June 2016 ($1,081); August 2016 ($380); and September 2016 ($507). Applicant did not explain the status of his child support debt; however, it appears from September 2015 to September 2016, Applicant missed four child support payments, and his child support delinquency is increasing. SOR ¶ 1.e is a telecommunications collection account debt for $86. On July 12, 2016, Applicant paid this debt. SOR ¶ 1.f is a collection account for a debt owed to a power company for $354. On October 4, 2016, Applicant paid $122 towards this debt, and he said he intends to continue making payments to the creditor. SOR ¶ 1.g is a collection account for a debt for $88. The creditor wrote on August 30, 2016, Applicant paid the debt of $88. 3Unless indicated otherwise, the source for the facts about Applicant’s SOR debts is his FORM response. 4 SOR ¶ 1.h alleges a collection account for a credit card for $627. Applicant set up a payment plan with monthly payments of $64 starting on October 24, 2016. SOR ¶ 1.i is a telecommunications collection account for $424. When Applicant changed telecommunications accounts, the new telecommunications company was supposed to pay his final bill on the old account. Applicant is waiting for the new telecommunications company to pay this debt. SOR ¶ 1.j is an student loan collection account for $6,540. Applicant set up a payment plan with monthly payments of $100 starting on October 24, 2016. SOR ¶ 1.k is an insurance collection account for $120. On October 4, 2016, Applicant paid this debt, and the account has a zero balance. In sum, Applicant mitigated the following SOR debts: 1.b ($511 paid in 2013); 1.e ($86 paid in 2016); 1.f (made first $122 payment towards debt in 2016); 1.g ($88 paid in 2016); and 1.k ($120 paid in 2016). Not including his child support payments, in the past 18 months, he paid $416 to address his delinquent SOR debts. He did not provide enough information about his history of paying child support to mitigate that debt. There is no evidence that Applicant received financial counseling. There is no evidence that he violated security rules, abused alcohol, or used illegal drugs. The file lacks supporting documentary evidence that Applicant paid, arranged to pay, settled, compromised, or otherwise resolved any of the delinquent SOR accounts exceeding $600. Applicant did not provide a budget or personal financial statement. The record lacks corroborating or substantiating documentation and detailed explanations of the causes for his financial problems and other mitigating information. The FORM noted that Applicant had 30 days from the receipt of the FORM “in which to submit a documentary response setting forth objections, rebuttal, extenuation, mitigation, or explanation, as appropriate. If you do not file any objections or submit any additional information . . . your case will be assigned to an Administrative Judge for a determination based solely” on the evidence set forth in this FORM. (FORM at 2) Policies The U.S. Supreme Court has recognized the substantial discretion of the Executive Branch in regulating access to information pertaining to national security emphasizing, “no 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 applicant’s 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, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. 5 Eligibility for a security clearance is predicated upon the applicant meeting the criteria contained in the adjudicative guidelines. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, these guidelines are applied 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, 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 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 “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 10865 § 7. Thus, nothing in this decision should be construed to suggest that it is based, in whole or in part, on any express or implied determination about applicant’s allegiance, loyalty, or patriotism. It 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. 95-0611 at 2 (App. Bd. May 2, 1996). 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 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). The burden of disproving a mitigating condition never shifts to the Government. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b). 6 Analysis Financial Considerations AG ¶ 18 articulates the security concern for 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. The Appeal Board explained the scope and rationale for the financial considerations security concern as follows: This concern is broader than the possibility that an applicant might knowingly compromise classified information in order to raise money in satisfaction of his or her debts. Rather, it requires a Judge to examine the totality of an applicant’s financial history and circumstances. The Judge must consider pertinent evidence regarding the applicant’s self-control, judgment, and other qualities essential to protecting the national secrets as well as the vulnerabilities inherent in the circumstances. The Directive presumes a nexus between proven conduct under any of the Guidelines and an applicant’s security eligibility. ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012) (citation omitted). AG ¶ 19 provides two disqualifying conditions that could raise a security concern and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts;” and “(c) a history of not meeting financial obligations.” Applicant’s history of delinquent debt is documented in his credit reports and SOR response. 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; 7 (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;4 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. The Appeal Board concisely explained Applicant’s responsibility for proving the applicability of mitigating conditions as follows: Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong presumption against the grant or maintenance of a security clearance. See Dorfmont v. Brown, 913 F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991). After the Government presents evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in security clearance decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to classified information will be resolved in favor of the national security.” Directive, Enclosure 2 ¶ 2(b). ISCR Case No. 10-04641 at 4 (App. Bd. Sept. 24, 2013). Applicant’s stated efforts to resolve his delinquent debt do not warrant full application of any mitigating conditions to all of his SOR debts. Applicant did not provide enough details about what he did to address his SOR debts. He did not describe receipt of financial counseling. 4The Appeal Board has previously explained what constitutes a “good faith” effort to repay overdue creditors or otherwise resolve debts: In order to qualify for application of [the “good faith” mitigating condition], an applicant must present evidence showing either a good-faith effort to repay overdue creditors or some other good-faith action aimed at resolving the applicant’s debts. The Directive does not define the term “good-faith.” However, the Board has indicated that the concept of good-faith “requires a showing that a person acts in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation.” Accordingly, an applicant must do more than merely show that he or she relied on a legally available option (such as bankruptcy) in order to claim the benefit of [the “good faith” mitigating condition]. (internal citation and footnote omitted) ISCR Case No. 02-30304 at 3 (App. Bd. Apr. 20, 2004) (quoting ISCR Case No. 99-9020 at 5-6 (App. Bd. June 4, 2001)). 8 After crediting Applicant with mitigating SOR ¶ 1.b, 1.e, 1.f, 1.g, and 1.k, six unresolved SOR debts totaling $22,514 remain to be addressed. Applicant did not provide sufficient documentation relating to these six SOR debts: (1) proof of payments, such as checking account statements, photocopies of checks, or a letter from the creditor proving that he paid or made any payments to the creditors; (2) correspondence to or from most of the six SOR creditors to establish maintenance of contact with creditors;5 (3) credible debt disputes indicating he did not believe he was responsible for the debts and why he held such a belief; (4) more evidence of attempts to negotiate payment plans, such as settlement offers or agreements to show that he was attempting to resolve these debts; or (5) other evidence of progress or resolution of his six SOR debts without any payments. Applicant failed to establish mitigation under AG ¶ 20(e) for any other SOR debts because he did not provide documented proof to substantiate the existence, basis, or the result of any debt disputes. There is insufficient evidence about why Applicant was unable to make greater progress resolving his SOR debts. There is insufficient assurance that his financial problems are being resolved, are under control, and will not recur in the future. Under all the circumstances, he failed to establish that 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 the 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. I have incorporated my 5“Even if Applicant’s financial difficulties initially arose, in whole or in part, due to circumstances outside his [or her] control, the Judge could still consider whether Applicant has since acted in a reasonable manner when dealing with those financial difficulties.” ISCR Case No. 05-11366 at 4 n.9 (App. Bd. Jan. 12, 2007) (citing ISCR Case No. 99-0462 at 4 (App. Bd. May 25, 2000); ISCR Case No. 99-0012 at 4 (App. Bd. Dec. 1, 1999); ISCR Case No. 03-13096 at 4 (App. Bd. Nov. 29, 2005)). A component is whether he or she maintained contact with creditors and attempted to negotiate partial payments to keep debts current. 9 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 is 30-year-old tactics instructor. He began his current employment in July 2015, and his annual salary is $42,000. In 2004, he graduated from high school. He has attended some training courses and some college. He served in the Marine Corps from 2004 to 2012, and he received an honorable discharge. In August 2015, he joined the Army reserve. From August 2005 to February 2006, Applicant was deployed to Afghanistan. Applicant has a history of financial problems beginning in 2012 when he left active duty and his pay decreased and because of his divorce in 2010. After leaving active duty, he had financial problems because of underemployment and unemployment. He mitigated the following SOR debts: 1.b ($511 paid in 2013); 1.e ($86 paid in 2016); 1.f (made first $122 payment towards debt in 2016); 1.g ($88 paid in 2016); and 1.k ($120 paid in 2016). Not including his child support payments, in the past 15 months, he paid $416 to address his delinquent SOR debts, and he fell further behind on his child support debt. He provided insufficient corroborating or substantiating documentary evidence of payments and established payment plans to five of the six non-mitigated SOR debts creditors.6 He did not provide sufficient documentation showing his attempts to resolve five of the six SOR debts in good faith. His actions show lack of financial responsibility and judgment and raises unmitigated questions about Applicant’s reliability, trustworthiness, and ability to protect classified information. See AG ¶ 18. More information about inability to pay debts, financial history, or documented financial progress is necessary to mitigate security concerns. It is well settled that once a concern arises regarding an applicant’s security clearance eligibility, there is a strong presumption against the grant or renewal of a security clearance. See Dorfmont, 913 F. 2d at 1401. Unmitigated financial considerations concerns lead me to conclude that grant of a security clearance to Applicant is not warranted at this time. This decision should not be construed as a determination that Applicant cannot or will not attain the state of reform necessary for award of a security clearance in the future. With more effort towards documented resolution of his past-due debts, and a track record of behavior consistent with his obligations, he may well be able to demonstrate persuasive evidence of his security clearance worthiness. I have carefully applied the law, as set forth in Egan, Exec. Or. 10865, the Directive, and the AGs, to the facts and circumstances in the context of the whole person. I conclude that financial consideration concerns are not mitigated, and it is not clearly consistent with the national interest to grant Applicant security clearance eligibility at this time. Financial considerations concerns are not mitigated. 6Applicant is not credited with establishing a payment plan to resolve the debt in SOR ¶ 1.c for $4,163. On October 3, 2016, the creditor wrote Applicant indicating a $50 monthly payment was sufficient for a payment plan, and the first payment was due on October 24, 2016. However, he does not have a track record of making payments under this payment plan as there is no evidence that he made the first or any subsequent payments under the plan. 10 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: AGAINST APPLICANT Subparagraph 1.a: Against Applicant Subparagraph 1.b: For Applicant Subparagraphs 1.c and 1.d: Against Applicant Subparagraphs 1.e, 1.f, and 1.g: For Applicant Subparagraphs 1.h, 1.i, and 1.j: Against Applicant Subparagraph 1.k: For Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the national interest to grant or reinstate Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied. _________________________ MARK HARVEY Administrative Judge