1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ------------------------------- ) ISCR Case No. 16-00397 ) ) Applicant for Security Clearance ) Appearances For Government: Caroline E. Heintzelman, Esquire, Department Counsel For Applicant: Pro se ______________ Decision ______________ HOWE, Philip S., Administrative Judge: On August 27, 2015, Applicant submitted his Electronic Questionnaire for Investigations Processing (e-QIP). On June 13, 2016, the Department of Defense Consolidated Adjudications Facility (DODCAF) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F (Financial Considerations). The action was taken under Executive Order 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective within the Department of Defense on September 1, 2006. Applicant answered the SOR in writing on July 13, 2016, and requested a hearing before an administrative judge. Defense Office of Hearings and Appeals (DOHA) received the request on July 22, 2016. Department Counsel was prepared to proceed on August 30, 2016, and I received the case assignment on September 19, 2016. DOHA issued a Notice of Hearing on January 31, 2017, and I convened the hearing as scheduled on February 21, 2017. The Government offered Exhibits 1 through 7, which were received 2 without objection. Applicant testified and submitted Exhibits A through C, without objection. DOHA received the transcript of the hearing (Tr.) on February 28, 2017. I granted Applicant’s request to keep the record open until March 15, 2017, to submit additional matters. On March 14, 2017, he submitted Exhibits D to J, without objection. The record closed on March 15, 2017. Based upon a review of the pleadings, exhibits, and testimony, eligibility for access to classified information is denied. Procedural and Evidentiary Rulings Motion to Amend SOR Department Counsel moved to amend the SOR by striking the term “2013” from Subparagraph 1.t and inserting the year “2014.” Applicant had no objection and I granted the motion to amend the SOR. (Tr. 7, 8) Findings of Fact In his Answer to the SOR Applicant admitted all the factual allegations in Paragraph 1 of the SOR, with explanations. He also provided additional information to support his request for eligibility for a security clearance. Applicant is 42 years old. He works for a defense contractor and has since September 2013. He has seven years and nine months of active military service. Applicant submitted the agreement from July 2015 for his future position with his employer, which is a promotion, with a salary increase of about $10,000. Applicant earns $103,000. His wife found a new job recently and earns about $30,000 gross income annually. Their current monthly expenses are paid on time. Applicant is married and has one child and a stepchild, but he does not have any child from his present marriage. (Tr. 16-18, 31; Exhibits 1-4, 6, 7, B, C) Applicant has 20 delinquent debts totaling $57,178, including two Federal income taxes due for 2013 and 2014 (Subparagraphs 1.s and 1.t). He has a Chapter 7 bankruptcy filed in May 2013 to discharge $111,989.83 of debts (Subparagraph 1.a). The bankruptcy discharge was in September 2013. He also had a lien on his house for $22,000 in retroactive unpaid child support. The lien was removed when the house was sold in short sale and no money from the sale was available to pay the lien (Subparagraph 1.v). Applicant has paid all the child support arrearages and is current on his child support. The $1,467 monthly payment is automatically deducted from his paycheck and paid to the state agency for transmittal to the mother of his child. (Tr. 19-43; Exhibits 2-5, 7, A, D-J) Applicant has 15 Federal student loans unpaid (Subparagraphs 1.b to 1.p). They total $46,124 in the SOR. They date from his college attendance starting about 2003. Applicant submitted a loan rehabilitation agreement for $59,723.17 dated March 2, 2017. The $150 monthly payment is to be paid starting in March 2017. He submitted proof of the March 2017 payment, and the payment plan for each succeeding month. He is paying 3 a private student loan he obtained with his father as the co-signer for $40,000. (Tr. 19, 20; Exhibits 2-5, 7, H, I) Applicant owes a gas utility for a November 2015 bill of $106 (Subparagraph 1.q). He thinks he paid it but is not certain. The account is shown on the February 16, 2017 credit report admitted as an exhibit. The debt remains unpaid. (Tr. 24, 36; Exhibits 2-5, 7) Applicant owes an apartment manager for a delinquent account in the amount of $2,498 from 2013. He moved from an apartment in another state and did not make the lease payments for the remaining term from December 2013 when his wife and her son moved to their new home with him (Subparagraph 1.r). This debt is unresolved. (Tr. 24, 25; Exhibits 2-5, 7) Applicant owes Federal income taxes to the Internal Revenue Service (IRS) for the tax years 2013 and 2014 (Subparagraphs 1.s and 1.t). Applicant submitted exhibits showing his 2013 tax debt is paid. He submitted a copy of his 2016 Federal income tax form and a document showing his refund from that year of $2,697 being applied to his 2014 tax debt. When the balance owed is stated by the IRS, Applicant states he will enter an installment payment agreement to pay the balance owed. He does not have an installment payment plan now. The 2013 tax debt is resolved but not the 2014 tax debt. Applicant testified he filed the tax returns on time but could not pay the money owed. He claims he took an exemption for his child when the mother of the child was scheduled to take it for that year. He incurred additional tax liability for that mistake. (Tr. 21, 23, 28, 43; Exhibits 6, E, F) Applicant filed Chapter 7 bankruptcy when he could not pay his debts based on his income, the child support payments required, and the high living costs in the state in which he lived at the time. He was paying his debts until his child support and child support arrearages consumed most of his disposable income. The bankruptcy rid him of about $54,000 in debt. (Tr. 36-40; Exhibits 1-7) Applicant repaid the $750 owed for his misuse of his employer’s corporate travel card. He was counseled on its proper use in May 2011 (Subparagraph 1.u). That debt is resolved. The fact remains that he misused the company credit card. (Tr. 25; Exhibits 2- 5, 7) Policies When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines (AG). In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are useful 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 4 factors listed in the adjudicative process (AG ¶ 2(a)). 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.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical and based on the evidence contained in the record. Likewise, I have avoided drawing inferences grounded on mere speculation or conjecture. 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 the applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable clearance 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 protect or safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of 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 Guideline F, Financial Considerations The security concern relating to the guideline 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 5 protect classified information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. The guideline at AG ¶ 19 contains nine disqualifying conditions that could raise security concerns. Three conditions are applicable to the facts found in this case: (a) inability or unwillingness to satisfy debts; (c) a history of not meeting financial obligations; and (g) failure to file annual Federal, state, or local income tax returns as required or the fraudulent filing of the same; Applicant accumulated $46,124 in delinquent student loan debt from 2003 to the present time that remains unpaid. He has an unresolved tax debt from 2014 and an unresolved debt for a broken lease. He had child support arrearages. Applicant has 22 delinquent debts listed in the SOR. The evidence raises all of the above security concerns, thereby shifting the burden to Applicant to rebut, extenuate, or mitigate those concerns. The guideline in AG ¶ 20 contains six conditions that could mitigate security concerns arising from financial difficulties. No mitigating conditions are established: (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; (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; and (f) the affluence resulted from a legal source of income. 6 Applicant continues to owe his government funded student loans while paying the private student loan he obtained with his father as cosigner. Applicant entered into a recent student loan rehabilitation agreement where he agreed to pay $150 monthly. He has made only one payment to date and this plan’s long-term viability is not established. Applicant owes 2014 Federal income taxes. The money he has paid to date on his 2013 and 2014 taxes were taken from his refunds from subsequent years taxes, meaning he has not paid them on his own initiative. His actions show Applicant cannot follow instructions and comply with required tax filings and payments. Applicant owes an apartment landlord for unpaid rent on a property that he moved out of in 2013. His actions show he cannot comply with contractual obligations and that he does not swift action to pay his lawful financial obligations. Applicant’s child-support payments take funds he could have used to pay his debts, but his failure to make timely child support payments caused that predicament. The child support payments are deducted automatically and sent to the mother of his child. Applicant also misused a company credit card for his own purposes, demonstrating he could not comply with rules about the use of such a business credit card. Applicant has no plan to repay the unresolved debts in an orderly manner within a reasonable amount of time. He ignored the child support, income taxes, and student loan debts for an extended period of time. He only began paying these debts when he was compelled to as a result of formal actions taken by respective agencies. These financial conditions have existed for some years and his Chapter 7 bankruptcy in 2013 could not relieve him of the obligation to pay his substantial student loans. None of the mitigating conditions are established. 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 an 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. 7 AG ¶ 2(c) requires each case must be judged on its own merits. 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. Applicant has had ample opportunity before the hearing to make payment arrangements on his debts. His own actions caused all of his financial problems and his lack of ability to manage his money during the past decade to resolve these debts leaves him in his present situation. Applicant has not made substantial changes and his present unresolved loans will continue for some years to come. His failure to properly file and pay his income taxes is also of a security concern. Overall, the record evidence leaves me with questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant did not mitigate the security concerns arising from his financial considerations. Formal Findings Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of Enclosure 3 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraph 1.a: For Applicant Subparagraph 1.b: Against Applicant Subparagraph 1.c: Against Applicant Subparagraph 1.d: Against Applicant Subparagraph 1.e: Against Applicant Subparagraph 1.f: Against Applicant Subparagraph 1.g: Against Applicant Subparagraph 1.h: Against Applicant Subparagraph 1.i: Against Applicant Subparagraph 1.j: Against Applicant Subparagraph 1.k: Against Applicant Subparagraph 1.l: Against Applicant Subparagraph 1.m: Against Applicant Subparagraph 1.n: Against Applicant Subparagraph 1.o: Against Applicant Subparagraph 1.p: Against Applicant Subparagraph 1.q: Against Applicant Subparagraph 1.r: Against Applicant Subparagraph 1.s: For Applicant Subparagraph 1.t: Against Applicant Subparagraph 1.u: Against Applicant 8 Subparagraph 1.v: Against 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 Applicant eligibility for a security clearance. Eligibility for access to classified information is denied. _________________ PHILIP S. HOWE Administrative Judge