1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 14-04693 ) Applicant for Security Clearance ) Appearances For Government: Pamela Benson, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ LOUGHRAN, Edward W., Administrative Judge: Applicant did not mitigate the personal conduct and financial considerations security concerns. Eligibility for access to classified information is denied. Statement of the Case On January 9, 2015, the Department of Defense (DOD) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guidelines E (personal conduct) and F (financial considerations). The action was taken under Executive Order (EO) 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 the DOD on September 1, 2006. Applicant responded to the SOR on February 24, 2016, and elected to have the case decided on the written record in lieu of a hearing. The Government’s written case was submitted on April 20, 2016. A complete copy of the file of relevant material (FORM) was provided to Applicant, who was afforded an opportunity to file objections and submit material to refute, extenuate, or mitigate the security concerns. Applicant 2 responded with a letter and attached documents, which I have marked as Applicant’s Exhibits (AE) 1, and 1(A) through 1(C). The case was assigned to me on February 6, 2017. The Government exhibits included in the FORM, AE 1, and 1(A) through 1(C) are admitted in evidence without objection. Findings of Fact Applicant is a 46-year-old scientist employed in the defense industry. He earned a bachelor’s degree in 1994, a master’s degree in 1999, and a juris doctor degree in 2003. The most recent information available indicated that he was divorced but living with a woman. He has two minor children.1 Applicant fell behind on his child support and other debts, which he attributed to a job change in 2012. A credit report from May 2013 listed a number of delinquent debts, including a $9,233 federal tax lien; a child-support obligation that was $13,622 past due; six past-due student loans; a mortgage loan that was $24,502 past due; a $62,735 past- due debt to the U.S. Government; and a few miscellaneous small debts.2 The tax lien was filed against Applicant in October 2012 (SOR ¶ 1.b). Applicant admitted owing the IRS. He stated that he had a payment agreement with the IRS, but he missed a few payments, which voided the agreement. He stated that he notified the IRS that he had unexpected car repairs and an elderly mother with health problems. He submitted an installment agreement from May 2016, in which he agreed to pay $80 a month towards the total of $4,739 owed for tax years 2010 and 2012.3 The May 2013 credit report listed Applicant’s child-support obligation as $13,622 past due with a $15,126 balance (SOR ¶ 1.a). Applicant’s child support is being garnished from his pay, with a portion going to the arrearages. An August 2014 Equifax credit report listed the child-support obligation as $5,488 past due with a $6,992 balance. The child-support obligation is not listed on the April 2016 Equifax credit report. Applicant submitted documentation that he has continued paying the child support through garnishment. The arrearages appear to have been satisfied.4 Applicant worked for a government agency from 2005 to 2011. He worked overseas for a period and received additional pay allowances. Upon his return to the 1 Items 2, 6. 2 Items 1, 3, 6. The SOR did not allege the student loans and mortgage loans as concerns under the financial considerations guideline. Any matter that was not alleged in the SOR will not be used for disqualification purposes. It may be considered when looking at Applicant’s overall financial situation, when assessing his credibility, in the application of mitigating conditions, and in the whole-person analysis. Under the personal conduct guideline, the SOR alleged that he did not list delinquent debts, including the student loans and mortgage loan, on his Questionnaire for National Security Positions (SF 86). Those debts will also be used for that purpose. 3 Items 1, 3-5; AE 1, 1(A). The SOR alleged the tax lien, which was filed in 2012. The tax liability for 2012 was not alleged in the SOR. 4 Items 1, 3-6; AE 1, 1(B). 3 United States, some additional pay allowances were stopped, but he continued to receive danger pay. Applicant stated that he addressed his pay on numerous occasions with the human resources department, but the additional pay continued. He stated that it was not until after he left the agency that he was notified that he owed for the danger pay, which apparently was about $60,000 (SOR ¶¶ 1.c and 1.d). Applicant requested a waiver from the agency, which was denied. He has sought additional relief from his senators and congressman. He stated, without documentation, that he paid $6,000 towards the debt.5 Applicant denied owing the three small debts alleged in SOR ¶¶ 1.e through 1.g. Those debts are not on his most-recent credit reports or not substantial enough to raise security concerns. The past-due mortgage loan was for a rental property. The property was lost to foreclosure with no evidence of a deficiency balance. The student loans continued to accrue interest with Applicant paying less than the required monthly payments. The April 2016 credit report lists four student loans totaling $84,201, each of which was listed as $4,975 past due. The past-due amounts and total balances were substantially higher than previous credit reports. The comment section for each loan added: “Account in forbearance 180 Days past due.”6 Credit reports indicate that Applicant had car loans or leases with the high credit on the three accounts listed as about $65,000 in 2009; $36,000 in 2011; and $28,000 in 2014. The first and last accounts appear to be loans. The second appears to be a lease. All of the accounts have been paid on time. The first and second accounts were paid and closed.7 Applicant received financial counseling as part of the foreclosure process. He stated that he has “worked assiduously to manage [his] finances appropriately.” He stated that he was working strenuously to repay his obligations, and that he took a second job to do so. The April 2016 credit report lists two recently charged-off credit card accounts of $2,494 and $929 that became delinquent in 2015.8 Applicant submitted a Questionnaire for National Security Positions (SF 86) in April 2013. He answered “No” to all the financial questions under Section 26, including the following: In the past seven (7) years, you have been delinquent on alimony or child support payments. In the past seven (7) years, you had a lien placed against your property for failing to pay taxes or other debts. bills or debts turned over to a 5 Items 1, 3-6; AE 1, 1(C). 6 Items 1. 7 Items 3-5. 8 Items 3-5. 4 collection agency? (Include financial obligations for which you were the sole debtor, as well as those for which you were a cosigner or guarantor). You are currently delinquent on any Federal debt? (Include financial obligations for which you were the sole debtor, as well as those for which you were a cosignor or guarantor). In the past seven (7) years, you had bills or debts turned over to a collection agency? (Include financial obligations for which you were the sole debtor, as well as those for which you were a cosignor or guarantor). In the past seven (7) years, you have been over 120 days delinquent on any debt not previously entered? (Include financial obligations for which you were the sole debtor, as well as those for which you were a cosignor or guarantor). You are currently over 120 days delinquent on any debt? (Include financial obligations for which you were the sole debtor, as well as those for which you were a cosignor or guarantor).9 Applicant was interviewed for his background investigation in March 2014. When asked about his finances and specific debts, he stated that the tax lien may have been related to sales tax on a new car. He stated that he paid the sales taxes, but the car dealer may have done something shady. He stated that he was current on his child support. He stated that he was paying the student loans an amount that was less than the amount due. He discussed his foreclosed rental property and the debt to the U.S. Government for the overpayment. He stated that he filed complaints with the agency, congressmen and senators about being overpaid.10 Applicant denied intentionally falsifying the SF 86.11 He may not have known that a tax lien was filed against him, and he may have had legitimate reasons for failing to list other debts. However, he knew he had unpaid taxes, and he knew that he had not paid his mortgage loan in more than a year. I am convinced by substantial evidence12 that Applicant was aware that he had those delinquent debts before the SF 86 was issued, and that he intentionally falsified the SF 86 when he failed to report them. 9 Item 2. 10 Items 6. 11 Items 1; AE 1. 12 Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion in light of all the contrary evidence in the same record.” ISCR Case No. 10-09035 at 5 (App. Bd. Jun. 13, 2014) (citing Directive ¶¶ E3.1.14; E3.1.32.1). “This is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent [a Judge’s] finding from being supported by substantial evidence.” Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966). “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); ISCR Case No. 04-07187 at 5 (App. Bd. Nov. 17, 2006). 5 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 are to be used 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, administrative judges apply the guidelines 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, 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.” 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 the 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 EO 10865 provides that adverse decisions shall be “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See also EO 12968, Section 3.1(b) (listing multiple prerequisites for access to classified or sensitive information). 6 Analysis Guideline F, Financial Considerations The security concern for financial considerations 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. The guideline notes several conditions that could raise security concerns under AG ¶ 19. The following are potentially applicable in this case: (a) inability or unwillingness to satisfy debts; and (c) a history of not meeting financial obligations. Applicant has delinquent debts that he is unable or unwilling to pay. The evidence is sufficient to raise AG ¶¶ 19(a) and 19(c) as disqualifying conditions. Applicant denied owing the three small debts alleged in SOR ¶¶ 1.e through 1.g. Those debts are not on his most-recent credit reports or not substantial enough to raise security concerns. SOR ¶¶ 1.e through 1.g are mitigated and concluded for Applicant. Conditions that could mitigate financial considerations security concerns are provided under AG ¶ 20. The following 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 7 (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 child support is being garnished from his pay. The arrearages appear to have been satisfied. SOR ¶ 1.a is mitigated. Applicant submitted a May 2016 installment agreement with the IRS, in which he agreed to pay $80 a month towards the total of $4,739 owed for tax years 2010 and 2012. His student loans were in forbearance, but will have to be paid at some point. He requested a waiver from the agency for the $60,000 overpayment, but it was denied. His appeals to congressmen and senators have not provided any relief. He stated, without documentation, that he paid $6,000 towards the debt. The Appeal Board has held that “it is reasonable for a Judge to expect applicants to present documentation about the satisfaction of specific debts.” See ISCR Case No. 09-07091 at 2 (App. Bd. Aug 11, 2010) (quoting ISCR Case No. 04-10671 at 3 (App. Bd. May 1, 2006)). He has been making large car loan or lease payments since 2009, but he still owed $4,739 to the IRS for tax years 2010 and 2012, and he has two new delinquent credit card debts. He stated that he was working strenuously to repay his obligations, and that he took a second job to do so. Intentions to pay off debts in the future are not a substitute for a track record of debt repayment or other responsible approaches. See ISCR Case No. 11-14570 at 3 (App. Bd. Oct. 23, 2013) (quoting ISCR Case No. 08-08440 at 2 (App. Bd. Sep. 11, 2009)). I am unable to find that Applicant acted responsibly under the circumstances or that he made a good-faith effort to pay his debts. His financial issues are recent and ongoing. They continue to cast doubt on his current reliability, trustworthiness, and good judgment. AG ¶¶ 20(a) and 20(d) are not applicable. AG ¶ 20(b) is partially applicable. The first section of AG ¶ 20(c) (financial counseling) is applicable; the second section (clear indications that the problem is being resolved or is under control) is not applicable. I find that financial considerations concerns remain despite the presence of some mitigation. Guideline E, Personal Conduct The security concern for personal conduct is set out in AG ¶ 15, as follows: 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. 8 AG ¶ 16 describes conditions that could raise a security concern and may be disqualifying. The following disqualifying condition is potentially applicable: (a) deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities. Applicant intentionally falsified his SF 86 when he failed to report his unpaid taxes and delinquent mortgage loan. AG ¶ 16(a) is applicable. AG ¶ 17 provides conditions that could mitigate security concerns. The following are potentially applicable: (a) the individual made prompt, good-faith efforts to correct the omission, concealment, or falsification before being confronted with the facts; (b) the refusal or failure to cooperate, omission, or concealment was caused or significantly contributed to by improper or inadequate advice of authorized personnel or legal counsel advising or instructing the individual specifically concerning the security clearance process. Upon being made aware of the requirement to cooperate or provide the information, the individual cooperated fully and truthfully; (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 intentionally provided false information on the SF 86. When he was interviewed for his background investigation in April 2014, he discussed his mortgage loan, but he never told the investigator that he had unpaid federal taxes. There are no applicable mitigating conditions. 9 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. I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I have incorporated my comments under Guidelines E and F in my whole-person analysis. Applicant has unresolved financial problems, and he intentionally provided false information about his finances on his SF 86. Overall, the record evidence leaves me with questions and doubts about Applicant’s eligibility and suitability for a security clearance. I conclude Applicant did not mitigate the personal conduct and financial considerations security concerns. 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: For Applicant Subparagraphs 1.b-1.d: Against Applicant Subparagraphs 1.e-1.g: For Applicant Paragraph 2, Guideline E: Against Applicant Subparagraphs 2.a-2.b: Against Applicant 10 Conclusion In light of all of the circumstances in this case, it is not clearly consistent with the national interest to grant Applicant eligibility for a security clearance. Eligibility for access to classified information is denied. ________________________ Edward W. Loughran Administrative Judge