1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ADP Case No. 15-08365 ) Applicant for Public Trust Position ) Appearances For Government: Caroline E. Heintzelman, Esq., Department Counsel For Applicant: Pro se __________ Decision __________ HARVEY, Mark, Administrative Judge: Applicant’s statement of reasons (SOR) alleges eight delinquent debts totaling $19,479. In 2011, she paid the student loan debt for $17,875, and one SOR debt is a duplication of another SOR debt. She has six SOR debts totaling $1,463 to resolve. Despite her limited means, she has made sufficient progress resolving her delinquent SOR debts. Financial considerations trustworthiness concerns are mitigated, and eligibility to occupy a public trust position is granted. Statement of the Case On June 23, 2015, Applicant signed an Electronic Questionnaire for National Security Position (SF 86). (Government Exhibit (GE) 1) On April 25, 2016, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued an SOR to Applicant, under DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (Directive), dated January 2, 1992, as amended, and modified; DOD Regulation 5200.2-R, Personnel Security Program, dated January 1987, as amended (Regulation); and the Adjudicative Guidelines for Determining Eligibility for Access to Classified Information (AG), which became effective on September 1, 2006. The SOR alleges trustworthiness concerns under Guideline F (financial considerations). (Hearing Exhibit (HE) 2) The SOR detailed reasons why the DOD CAF was unable to find that it is clearly consistent with the interests of national security to 2 grant or continue Applicant’s eligibility to occupy a public trust position, which entails access to sensitive information. (HE 2) The DOD CAF recommended referral to an administrative judge to determine whether such access to sensitive information should be granted, continued, denied, or revoked. (HE 2) On August 9, 2016, Applicant responded to the SOR allegations. (HE 3) On October 5, 2016, Department Counsel indicated she was ready to proceed. On November 1, 2016, the case was assigned to me. On November 18, 2016, the Defense Office of Hearings and Appeals issued a hearing notice setting the hearing for December 7, 2016. (HE 1) The hearing was held as scheduled. Applicant waived her right to 15 days of notice of the date, time, and location of her hearing. (Tr. 15-16) At the hearing, the Government provided 4 exhibits; Applicant offered 11 exhibits; and all exhibits were admitted into evidence without objection. (Tr. 18-23; GE 1-4; Applicant Exhibits (AE) A-K) On December 15, 2016, I received a transcript of the hearing (Tr.). I held the record open until February 8, 2017; however, no post-hearing evidence was received. (Tr. 39) Findings of Fact1 Applicant denied the allegations in SOR ¶¶ 1.a and 1.b, and she said she needed to validate the other SOR debts. (HE 2) Her admissions are incorporated herein as findings of fact. After a complete and thorough review of the evidence of record, I make the following findings of fact. Applicant is a 51-year-old employee of a DOD contractor, who works in inventory management. (Tr. 10) She has been employed in inventory management by her current employer from 2010 to 2012 and since May 2015. (Tr. 10, 26) In 1983, Applicant graduated from high school. (Tr. 6) Applicant attended college from 1983 to 1989, and she majored in communications with a multitude of sub-majors. (Tr. 7) She did not receive a degree. (Tr. 7) She has never served in the military. (Tr. 7) In 1986, Applicant married, and in 1993, she divorced. (Tr. 7) In 2002, she married, and in 2006, she divorced. (Tr. 7-8) Her children are ages 25, 28, and 30. (Tr. 8) Financial Considerations In the last ten years, Applicant has had several periods of unemployment ranging from two to eight months. (Tr. 26) Her finances were harmed by her surgery in 2005 and her divorce in 2006. (Tr. 27) In 2008 or 2009, she received a $400,000 settlement from her husband to resolve her divorce. (Tr. 28) She used the divorce settlement to pay her debts, to pay some of her children’s debts, to help her autistic child, to help a friend who had a traumatic brain injury, and to purchase a vehicle. (Tr. 28, 37-38) Applicant’s current annual salary is $39,000. (Tr. 23) She uses a budget, and she has received some financial counseling or advice. (Tr. 24) At the end of the month, after 1The facts in this decision do not specifically describe employment, names of witnesses, names of other groups, or locations in order to protect Applicant and her family’s privacy. The cited sources contain more specific information. 3 she pays her debts, she has a remainder of about $200. (Tr. 24) She has savings of about $30,000 received from her divorce settlement. (Tr. 25) Applicant disclosed that an April 24, 2015 notice that her pay was being garnished to pay a $10,000 debt owed to a non-SOR creditor;2 however, after she changed employment, the notice was not sent to her new employer. (Tr. 20; AE A) She did not pay the debt. (Tr. 20) She said she intended to contact the creditor to “see what we can work out.” (Tr. 20) She did not know why she owed $10,000, and she observed that she needed to “focus on” this debt. (Tr. 33) This debt does not appear on her credit reports. On February 17, 2016, Applicant received notice of an offset of her pay for $788 to collect a state tax debt for 2014. (AE J) She has not paid her 2014 state tax debt. (Tr. 32) She has filed her state and federal tax returns for the last five years, and the only year she owes taxes is $788 for tax year 2014 to her state of residence. (Tr. 32-33) She intends to pay her $788 state tax debt. (Tr. 32-33) She said she would provide proof of payment after her hearing. (Tr. 38) SOR ¶ 1.b alleges a student loan debt for $17,875 and the high credit on account was $15,746. (GE 4 at 4) Applicant made $185 monthly payments for several months; she became unemployed; and she stopped making payments. (Tr. 28) On March 2, 2011, Applicant settled the debt with a payment of $19,900. (Tr. 29; AE H; AE I) She provided a copy of the cashier’s check used to pay this debt. (AE H) She used money from her divorce settlement to pay this debt. (Tr. 29) Applicant’s August 1, 2015 TransUnion, Experian, and Equifax combined credit report indicates Applicant had a student loan with a high credit of $15,745, and the status is “settlement accepted on this account.” The balance owed is listed as zero. (GE 4 at 4) Applicant’s April 6, 2016 Equifax credit report does not include any delinquent student loans. (GE 3) Applicant June 13, 2016 TransUnion credit report includes a delinquent student loan debt for debt for $17,875 and the high credit on account was $15,746. (AE K) I conclude the debt in SOR ¶ 1.b was paid and resolved on March 2, 2011, and the negative financial entry in her June 13, 2016 credit report is an erroneous entry. 2Applicant’s SOR does not allege: (1) she received notice of a possible $10,000 garnishment in 2015 and (2) she has a state tax debt for $788 for tax year 2014. 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)). These two debts will not be considered except for the five purposes listed above. 4 SOR ¶ 1.a alleges a judgment for $418. SOR ¶¶ 1.c and 1.e allege two collection debts for $443 and $158 being collected by the same company. SOR ¶¶ 1.d and 1.h allege two medical-collection debts for $205 and $97 that are being collected by the same company. SOR ¶¶ 1.f and 1.g allege two telecommunications-collection debts for $142 and $141 originating from the same telecommunications company. I agree with Applicant that these two debts are duplications of each other. In November 2016, Applicant wrote the creditors and disputed her responsibility for the debts. (Tr. 29-30, 38; AE C-AE G) Applicant has no recollection of owing the debts in SOR ¶¶ 1.a and 1.c through 1.g. (Tr. 30) She intends to continue to dispute the SOR debts, and in the event that she receives debt validation, she will pay the debts. (Tr. 33-34) Applicant gave three reasons to explain why she had not been more proactive in investigating and resolving her delinquent accounts as follows: (1) she was not sure whether she would have employment after January 2017 because her employer was competing for a government contract; (2) her employer’s facility security clearance is in jeopardy; and (3) she was overwhelmed by her financial issues. (Tr. 31-32) Her promise to continue to diligently investigate her debts and resolve the debts that are validated is accepted as credible. 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 [public trust position].” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). The Government’s authority to restrict access to classified information applies similarly in the protection of sensitive, unclassified information. As Commander in Chief, the President has the authority to control access to information bearing on national security or other sensitive information and to determine whether an individual is sufficiently trustworthy to have access to such information. See Id. at 527. Positions designated as ADP I and ADP II are classified as “sensitive positions.” Regulation ¶¶ C3.1.2.1.1.7, C3.1.2.2, and C3.1.2.1.2.3. “The standard that must be met for . . . assignment to sensitive duties is that, based on all available information, the person’s loyalty, reliability, and trustworthiness are such that . . . assigning the person to sensitive duties is clearly consistent with the interests of national security.” Regulation ¶ C6.1.1.1. Department of Defense contractor personnel are afforded the right to the procedures contained in the Directive before any final unfavorable access determination may be made. See Regulation ¶ C8.2.1. When evaluating an applicant’s suitability for a public trust position, an administrative judge must consider the disqualifying and mitigating conditions in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of 5 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. A person who seeks access to sensitive 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 sensitive information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard sensitive information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of sensitive information. Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant which may disqualify the applicant from being eligible for access to sensitive information. 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 suitability for a public trust position. 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 or her access to sensitive information].” 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). The protection of national security and sensitive records is paramount. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for access to [sensitive] information will be resolved in favor of national security.” Analysis Financial Considerations AG ¶ 18 articulates the trustworthiness 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 [sensitive] information. An individual who is financially 6 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 trustworthiness 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 [eligibility for a public trust position]. ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012) (citation omitted). AG ¶ 19 provides two disqualifying conditions that raise a trustworthiness concern and may be disqualifying in this case: “(a) inability or unwillingness to satisfy debts;” and “(c) a history of not meeting financial obligations.” In ISCR Case No. 08-12184 at 7 (App. Bd. Jan. 7, 2010), the Appeal Board explained the evidentiary weight to be given to credit reports: It is well-settled that adverse information from a credit report can normally meet the substantial evidence standard and the government’s obligations under [Directive] ¶ E3.1.14 for pertinent allegations. At that point, the burden shifts to applicant to establish either that [he or] she is not responsible for the debt or that matters in mitigation apply. (internal citation omitted). Applicant’s history of delinquent debt is documented in her credit reports. Her credit reports document eight delinquent SOR debts totaling $19,479. 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;3 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 eligibility [for a public trust position], there is a strong presumption against the grant or maintenance of a [public trust position]. 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 [trustworthiness] concerns, the burden shifts to the applicant to rebut or mitigate those concerns. See Directive ¶ E3.1.15. The standard applicable in [public trust position] decisions is that articulated in Egan, supra. “Any doubt concerning personnel being considered for access to [sensitive] 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). AG ¶¶ 20(a) to 20(d) are applicable. Seven circumstances caused damage to Applicant’s finances: (1) her surgery in 2005; (2) her divorce in 2006; (3) her children’s debts; (4) her child’s autism; (5) her friend’s traumatic brain injury; (6) underemployment; and (7) multiple periods of unemployment over the last eight years. All of these are circumstances beyond her control except for her decisions to assist others with their financial problems. It is also noted that in 2008 or 2009, she received a $400,000 settlement from her divorce, which allowed her to pay most of her debts. 3The 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 Applicant paid over 90 percent of her SOR debt in 2011 when she paid her student loan. About $1,500 in SOR debt is in the process of being verified. Once the debts are verified, Applicant promised to pay them. In addition to the SOR debts, Applicant has a delinquent $788 state tax debt. and she may have a $10,000 debt that led to an attempted garnishment in 2015. In ISCR Case No. 08-06567 at 3 (App. Bd. Oct. 29, 2009), the Appeal Board addressed a situation where an applicant, who had been sporadically unemployed and lacked the ability to pay his creditors, noting that “it will be a long time at best before he has paid” all of his creditors. The applicant was living on unemployment compensation at the time of his hearing. The Appeal Board explained that such a circumstance was not necessarily a bar to having access to classified or sensitive information stating: However, the Board has previously noted that an applicant is not required to be debt-free nor to develop a plan for paying off all debts immediately or simultaneously. All that is required is that an applicant act responsibly given his [or her] circumstances and develop a reasonable plan for repayment, accompanied by “concomitant conduct,” that is, actions which evidence a serious intent to effectuate the plan. See ISCR Case No. 07- 06482 at 3 (App. Bd. May 21, 2008). ISCR Case No. 08-06567 at 3 (App. Bd. Oct. 29, 2009). The applicant in ISCR Case No. 08-06567 used his limited resources to (1) resolve some of his debts; (2) had a repayment plan for the remaining debts; and (3) took “reasonable actions to effectuate that plan.” Id. The Appeal Board remanded the Administrative Judge’s decision because it did not “articulate a satisfactory explanation for his conclusions,” emphasizing the Administrative Judge did “not explain[] what he believes that applicant could or should have done under the circumstances that he has not already done to rectify his poor financial condition, or why the approach taken by applicant was not ‘responsible’ in light of his limited circumstances.” Id. Applicant made significant progress on her SOR debts when she paid her student loan debt. She understands what she must do to establish and maintain her financial responsibility.4 She is investigating and verifying her responsibility for the SOR debts. She volunteered that she had two additional debts not listed on the SOR or in her credit reports: a $788 state tax debt; and a possible $10,000 debt that resulted in a garnishment notice in 2015. She took reasonable actions to resolve as much of her debts as was possible based on her limited income. She acknowledged that she needs to continue to persevere in her debt resolution. There are clear indications her financial problem is being resolved and is under control. Her efforts are sufficient to mitigate financial considerations trustworthiness concerns. 4The Appeal Board has indicated that promises to pay off delinquent debts in the future are not a substitute for a track record of paying debts in a timely manner and otherwise acting in a financially responsible manner. ISCR Case No. 07-13041 at 4 (App. Bd. Sept. 19, 2008) (citing ISCR Case No. 99- 0012 at 3 (App. Bd. Dec. 1, 1999)). 9 Whole-Person Concept Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for a public trust position 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. The ultimate determination of whether to grant eligibility for a public trust position must be an overall commonsense judgment based upon careful consideration of the guidelines and the whole-person concept. AG ¶ 2(c). I have incorporated my comments under Guideline F 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 51-year-old employee of a contractor, who works in inventory management. She has been employed in inventory management by her current employer from 2010 to 2012 and since May 2015. Applicant attended college from 1983 to 1989, and she majored in communications with a multitude of sub-majors. She did not receive a degree. In 1986, Applicant married, and in 1993, she divorced. In 2002, she married, and in 2006, she divorced. Her children are ages 25, 28, and 30. In 2008 or 2009, she received a $400,000 settlement from her divorce. Applicant’s SOR alleges eight delinquent debts totaling $19,479. In 2011, she paid her student loan debt for $17,875, and one SOR debt is a duplication of another SOR debt. She has six SOR debts totaling $1,463 to resolve. She is seeking verification of the validity of six SOR debts, and she promised to pay them if they are validated. Seven circumstances partially or fully beyond her control adversely affected her finances. Particularly important were her unemployment, underemployment, and family illnesses. The Appeal Board has addressed a key element in the whole-person analysis in financial cases stating: In evaluating Guideline F cases, the Board has previously noted that the 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 can reasonably consider the entirety of an applicant’s financial situation 10 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 understands what she needs to do to establish and maintain her financial responsibility. She took reasonable actions under her particular financial circumstances to address her delinquent debts. Her overall history shows a “meaningful track record” of debt repayment. I am confident she will continue her establishment and maintenance of her financial responsibility.5 I have carefully applied the law, as set forth in Egan, the Directive, the Regulation, and the AGs, to the facts and circumstances in the context of the whole person. Financial considerations trustworthiness concerns are mitigated, and her eligibility for a public trust position is granted. 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 through 1.h: For Applicant 5Of course, the Government may re-validate Applicant’s financial status at any time through credit reports, investigation, and interrogatories. Approval of access to sensitive information now does not bar the Government from subsequently revoking it, if warranted. “The Government has the right to reconsider [trustworthiness] significance of past conduct or circumstances in light of more recent conduct having negative [trustworthiness] significance.” ISCR Case No. 10-06943 at 4 (App. Bd. Feb. 17, 2012). An administrative judge does not have “authority to grant an interim, conditional, or probationary clearance.” ISCR Case No. 10-06943 at 4 (App. Bd. Feb. 17, 2012) (citing ISCR Case No. 10-03646 at 2 (App. Bd. Dec. 28, 2011)). See also ISCR Case No. 04-03907 at 2 (App. Bd. Sep. 18, 2006) (stating, “The Board has no authority to grant [a]pplicant a conditional or probationary [public trust position] to allow her the opportunity to have a [public trust position] while she works on her financial problems.”). This footnote does not imply that this Applicant’s public trust position is conditional. 11 Conclusion In light of all of the circumstances presented by the record in this case, it is clearly consistent with the interests of national security to grant Applicant eligibility for a public trust position. Eligibility for access to sensitive information is granted. _________________________ Mark Harvey Administrative Judge