1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-00692 ) ) Applicant for Security Clearance ) Appearances For Government: Jeff A. Nagel, Esq., Department Counsel For Applicant: Pro se May 16, 2017 ____________ Decision ______________ LOKEY ANDERSON, Darlene D., Administrative Judge: Statement of the Case On June 4, 2016, the Defense Office of Hearings and Appeals (DOHA) issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, Financial Considerations. The action was taken under Executive Order (EO) 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 for cases after September 1, 2006. Applicant answered the SOR on July 1, 2016, and requested a hearing before an administrative judge. The case was assigned to me on September 12, 2016. DOHA issued a notice of hearing on November 9, 2016, and the hearing was convened as scheduled on January 17, 2017. The Government offered five exhibits, referred to as Government Exhibits 1 through 5, which were admitted without objection. The Applicant offered two exhibits, referred to as Applicant’s Exhibits A and B, which were admitted without objection. Applicant also testified on his own behalf. The record remained open 2 until close of business on January 24, 2017, to allow the Applicant to submit additional supporting documentation. Applicant submitted one Post-Hearing Exhibit, referred to as Applicant’s Post-Hearing Exhibit A, which was admitted without objection. DOHA received the transcript of the hearing (Tr.) on January 26, 2017. Findings of Fact Applicant is 39 years old, and married with one-step daughter and three sons. He has a Bachelor’s degree in Organizational Management. He holds the positon of Hardware Engineer for a defense contractor. He seeks to obtain a security clearance in connection with his employment in the defense industry. Paragraph 1 Guideline F – Financial Considerations The Government alleges that the Applicant is ineligible for clearance because he is financially overextended and at risk of having to engage in illegal acts to generate funds. The SOR alleges that Applicant is indebted to two creditors in the total approximate amount of $27,000. In his Answer, Applicant denied each debt because he has been making payments to resolve the debts. Credit reports of the Applicant September 2, 2015; and September 7, 2016; reflect that each of these debts were owing. (Government Exhibits 3 and 4.) Applicant served in the United States Army for four years from 1996 to 2000. He held a security clearance without incident during his military career. When he was honorably discharged, he held the rank of Sergeant E-5. While in the military he received a number of awards and commendations, including an Army Commendation Medal, two Army Achievement Medals, Good Conduct Medals, an NCO Ribbon, a NATO Ribbon, and an Armed Forces Expeditionary Ribbon. Applicant began working for his current employer in August 2015. Applicant testified that he began to have financial problems in the spring of 2009. He injured his shoulder and was out of work for three and a half months on disability. (Tr. p. 29.) While on disability, Applicant received only 60 percent of his pay. To complicate matters, his step-daughter’s father sued and prevailed against the Applicant and his wife for reverse child support. Instead of Applicant and his wife receiving $300 from him, they had to pay him $300 monthly. (Tr. p. 31.) Applicant fell behind on his bills, and stopped paying his credit cards. He sought out advice through a Debt Consolidation Program, with the hopes that they would negotiate a settlement agreement, but they did nothing to help. Applicant tried to work with the creditors by explaining his situation to them but did not get assistance. 1.a. Applicant became indebted to a bank for a credit card that was charged off in the approximate amount of $16,775. Applicant testified that he opened the credit card in 2006 to use for wedding expenses, which totaled about $20,000. He made payments on it until he could no longer afford to do so. In September 2016, he started making payments toward the debt again and has been consistent with the payments since then. 3 He has reduced the amount owed to about $10,000. (Tr. p. 34.) His payments started at $100 per paycheck. He then reduced it to $50 per paycheck. He explained that his wife is currently working as a lunch aide, but does not make enough money to maintain the payments that high. He is now paying $50 per paycheck. It is his intent to continue making payments toward the debt to get it completely paid off. (Tr. p. 35.) 1.b. Applicant also became indebted to a military bank for a credit card that was placed for collection in the approximate amount of $10,750. Applicant stated that he opened this credit card in 2000, after leaving the military, to use for living expenses and emergencies. He returned to making payments on the debt and has been doing so for the past three years. (Tr. p. 36.) During a period in 2015, Applicant was laid off from work and thought he might have to move to obtain employment. He withdrew between $15,000 and $18,000 from his 401k to use for moving expenses. Applicant ended up being rehired, and so he used the money to pay off other delinquent debts and to purchase a car for his wife. In 2010, Applicant’s pregnant wife fell down the stairs and injured herself. She has been out of full-time work since then. Applicant now earns $72,000 a year. He has no other delinquent debts. All of his monthly expenses are paid on time. He expects to have some tax liability for 2015, for the early withdrawal from his 401k, and is working with a filing service to assist him with this. (Tr. pp. 38-39.) Applicant’s wife has recently finished school to be a medical technician and plans to find a full-time job soon. Applicant also works part-time as a janitor at their church, and referee. As a janitor he brings home about $350 monthly. As a referee, he earns between $200 and $250 weekly during the basketball season. (Tr. p. 51.) A letter of recommendation submitted on behalf of the Applicant from the facility security officer indicate that she believes Applicant to be very trustworthy, honest and forthcoming about all issues relevant to his position. He is considered a valuable asset to the operation and is recommended for a security clearance. (Applicant’s Post- Hearing Exhibit A.) A letter from Applicant’s wife confirms that he has been a good husband and father to her daughter. He is reasonable, reliable and responsible. He is recommended for a security clearance. (Applicant’s Post-Hearing Exhibit A.) Applicant has received a certificate and a monetary achievement award from his employer for outstanding work performance. (Applicant’s Post-Hearing Exhibit A.) 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 4 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.” 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, 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 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 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). 5 Analysis Guideline F, Financial Considerations The security concern for Financial Considerations is set out in AG ¶ 18, as follows: 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 concern under AG ¶ 19. Two are potentially applicable in this case: (a) inability or unwillingness to satisfy debts; and (c) a history of not meeting financial obligations. Applicant was unable to pay his debts and became delinquently indebted. The evidence is sufficient to raise the above disqualifying conditions. Four Financial Considerations 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; (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; and (d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts. In 2009, Applicant was injured and on disability when his financial problems began. At that time, he encountered a child support order brought by his wife’s previous 6 husband that he had not expected and obviously could not afford. He was even laid off from work for a short time. Unable to pay his debts, he looked to a debt consolidation program for help and tried to negotiate with the creditors himself, but was unsuccessful in either case. Since getting back to work and stabilizing his finances, he is making regular monthly payments to both of the creditors listed in the SOR, and has acted reasonably and responsibly under the circumstances. In addition to his full-time job, he has taken on two part-time jobs to help resolve his debt sooner. He has significantly reduced his debt over the years and continues to work on doing so. There are indications that the problem is resolved and under control, and there has been a good faith effort to resolve his debts. The Financial Considerations concern has been 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 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 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 now on the correct financial path. His wife plans to get back to work which will further improve the family finances. Overall, the record evidence leaves me without questions or doubts as to Applicant’s eligibility and suitability for a security clearance. For all these reasons, I conclude Applicant has mitigated the Financial Considerations security concerns. 7 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 Subparagraph 1.a.: For Applicant Subparagraph 1.b.: 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 eligibility for a security clearance. Eligibility for access to classified information is granted. ________________________ Darlene Lokey Anderson Administrative Judge