1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) -------------------- ) ISCR Case No. 15-05395 ) Applicant for Security Clearance ) Appearances For Government: Robert J. Kilmartin, Esquire, Department Counsel For Applicant: Pro se ______________ Decision ______________ MARSHALL, Jr., Arthur E., Administrative Judge: Statement of the Case On March 11, 2016, the Department of Defense (DOD) Consolidated Adjudications Facility (CAF) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F (Financial Considerations).1 In an April 28, 2016, response to the SOR, Applicant admitted all allegations with explanations, and requested a determination based on the written record. On June 27, 2016, the Government issued a File of Relevant Material (FORM) with five attachments (“Items”). Applicant did not respond to the FORM within the time allotted. I was assigned the case on May 19, 2017. Based on my review of the case file, I find Applicant mitigated financial considerations security concerns. Findings of Fact Applicant is a 38-year-old senior data base analyst who has worked for the same company since October 2007. He has been continuously employed since at least August 2002. He maintained a part-time job from approximately 2011 through 2013 to 1 The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; DOD Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective within the DOD on September 1, 2006. 2 supplement his income. He has earned a high school diploma. He attended a college from 1996 until 1997. Between 2005 and 2006, he was enrolled in an on-line post- secondary educational program. During these times, he sought and received student loans. Applicant has maintained the same residence since 2004. He married in 2004. The couple has two children, born in 2005 and 2007, respectively. Applicant’s student loans were originally in forbearance, then they were in repayment status until 2014. By that time, fluctuations in household income had made him unable to meet his monthly obligations and maintain his family of four. These fluctuations were caused, in part, due to his wife’s erratic salary over the course of a few years and the unexpected need to replace a family car that had become unrepairable.2 While he was able to meet all other monthly obligations and contain the acquisition of debt, he became behind on his student loans and mortgage. Applicant started working with his creditors before the SOR was issued. Today, the family is living within its means. Applicant has been, and remains committed to, the payment of his debts. At issue in the May 2016 SOR are the following delinquent debts: 1.a – Educational loan - $3,788 charged off. Repayment renegotiated; repayment poised to commence. Applicant contacted this lender to set up a repayment plan. Under the plan negotiated, the balance owed was reduced to $3,396.99; the address for submitted payments was changed; and he was set to start repayments in May 2016, two months after the SOR was issued. 1.b – Mortgage account - $3,414 delinquency. Account current and in timely repayment. Applicant negotiated a repayment plan and timely paid $1,024 over 13 months, thus avoiding foreclosure and rehabilitating the loan. After this stage of repayment was completed and he was current with his payments for over a year, Applicant resumed the lower, originally established payment schedule. Applicant submitted documentary evidence of timely repayments over the past 12 months. (FORM, Item 2, SOR Response attachment, statement dated March 23, 2016 (1 page)) The account is now reflected as current. 1.c – Educational loan - $9,872 past due 120 days or more. Consolidated. This loan was consolidated into the National Direct Student Loan Data System (NSLDS) and paid at an indeterminate time before April 2016. The NSLDS statement submitted by Applicant only reflects small balances owed for other loans and grants. There is no indication of a balance owed on this particular loan. (FORM, Item 2, SOR Response attachment, statement dated April 11, 2016 (27 pages)) 1.d – 1.e – Educational loans - $4,253 and $2,712, respectively, past due 120 days or more. Account current and in timely repayment. Applicant was initially unaware that he was in repayment on these debts as they were previously consolidated with another servicer. He provided documentary evidence reflecting that he is in repayment on these 2 Applicant’s wife assumed a more stable position in 2015. (FORM, Item 3 at 3) 3 debts. (FORM, Item 2, SOR Response attachment, statement dated April 15, 2016 (2 pages)) 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 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, these guidelines are applied in conjunction with the factors listed in the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), the entire process is a conscientious scrutiny of a number of variables known as the “whole-person concept.” The administrative judge must consider all available, reliable information about the person in making a decision. The protection of the national security is the paramount consideration. AG ¶ 2(b) requires that “[a]ny doubt concerning personnel being considered for access to classified information will be resolved in favor of national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical, and based on the evidence contained in the record. Under Directive ¶ E3.1.14, the Government must present evidence to establish controverted facts alleged in the SOR. Under Directive ¶ E3.1.15, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel and 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. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to safeguard classified information. Section 7 of Executive Order 10865 provides that decisions shall be “in terms of the national interest and shall in no sense be a determination 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). Analysis Under Guideline F, AG ¶ 18 sets forth that the security concern under this guideline is that failure or inability to live within one’s means, satisfy debts, and meet financial 4 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 engaging in illegal acts to generate funds. Here, the Government introduced credible evidence showing Applicant’s considerable delinquent debt related to student loans and a mortgage. This is sufficient to invoke two of the financial considerations disqualifying conditions: AG ¶ 19(a) inability or unwillingness to satisfy debts; and AG ¶ 19(c) a history of not meeting financial obligations. Five conditions could mitigate these finance-related security concerns: 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 basis of the dispute or provides evidence of actions to resolve the issue. The debts at issue are multiple in number and were not the result of unusual circumstances. They were due, in part, to unpredictable fluctuations in Applicant’s wife’s income and the need to replace the family’s suddenly unservicable automobile in the months or few years preceding 2014. To help meet the challenges posed by these monetary obstacles, Applicant took a part-time job from 2011 until at least 2013. He began addressing these obligations between the time his wife acquired more stable employment and the issuance of the 2016 SOR. These facts are sufficient to give rise to AG ¶ 20(b). 5 Although there is no documentary evidence indicating Applicant has received financial counseling, there is documentary evidence he began addressing most, if not all, of the delinquent debts at issue before the issuance of the March 2016 SOR. Those efforts have thus far resulted in a negotiated repayment plan poised for implementation (1.a), and documented evidence showing he is in repayment on others (1.b, 1.d-1.e). One debt (1.c) was shown through documentation to have been consolidated with similar student loan disbursements, and no outstanding balance is reflected. However, even if further payment on this single delinquent debt is still warranted, Applicant is now living within his means and has the commitment to honor any remaining balances. Regardless, his actions to date demonstrate his good-faith efforts to address his delinquent debts, and there are clear indications that his financial issues are being resolved. Consequently, AG ¶ 20(c) - (d) apply. 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 adjudicative process factors listed at AG ¶ 2(a). Under AG ¶ 2(c) sets forth the need to utilize a whole-person evaluation. I considered the potentially disqualifying and mitigating conditions in light of all the facts and circumstances surrounding this case. I incorporated my comments under the guideline at issue in my whole-person analysis. Applicant is a married, 38-year-old senior data base analyst who has maintained the same position since October 2007. He has a high school diploma. He completed about one year of college and one year of an on-line post-secondary, educational program, for which he received student aid. When faced with financial issues arising from his wife’s fluctuating and irregular income flow, he took a part-time job from approximately 2011 through 2013 to supplement the family coffers. By the time the SOR was issued, Applicant had already begun communicating with his lenders regarding his past-due accounts. He has been in regular payment status now on his mortgage for over a year. One of his student loans is poised for implementation of a repayment plan, while it appears the rest are either in repayment or paid. While the issue of whether one of the consolidated student loans has actually been paid remains vague, Applicant’s commitment to honor all of his obligations and his track record to date persuade me that he will continue his efforts to address all debts while living within his means. Based on the information and documentation provided, I find Applicant mitigated Financial Considerations security concerns. 6 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-1.e: For Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is clearly consistent with the national interest to grant Applicant a security clearance. Eligibility for access to classified information is granted. _____________________________ Arthur E. Marshall, Jr. Administrative Judge