1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-01682 ) ) Applicant for Security Clearance ) Appearances For Government: Andrew Henderson, Esq., Department Counsel For Applicant: Pro se May 24, 2017 ______________ Decision ______________ CEFOLA, Richard A., Administrative Judge: Statement of the Case On May 11, 2015, Applicant submitted a security clearance application (e-QIP). On August 5, 2016, the Department of Defense 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 September 1, 2006. Applicant answered the SOR on August 23, 2016 (Answer), and requested a hearing before an administrative judge. The case was assigned to me on November 21, 2016. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on January 24, 2017, scheduling the hearing for February 22, 2017. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 6, which were admitted without objection. Applicant offered Exhibit (AppX) A, which was admitted 2 without objection. I left the record open for the submission of additional documentation from Applicant. He offered AppXs B and C in a timely fashion, which were admitted without objection. Applicant testified on his own behalf. The record was closed on April 16, 2017. DOHA received the transcript of the hearing (TR) on March 1, 2017. Findings of Fact Applicant is 28 years old. He has been employed with a Government contractor since April of 2015. (GX1 at pages 5 and 11.) He has held a security clearance since 2010. (GX 1 at pages 11~13, and 33.) He is not married and has no children. (TR at page 14 lines 13~16.) The Government alleged that Applicant is ineligible for a clearance because he made financial decisions that indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which raise questions about his reliability, trustworthiness and ability to protect classified information. The SOR identified ten debts totaling approximately $12,161. Applicant denied allegations 1.e. and 1.h. of the SOR, averring that these two debts have either been “settled” or “paid.” (Answer) Guideline F - Financial Considerations Applicant attributes his admitted past-due indebtedness to two periods of unemployment “around 2011/2012.” (TR at page 18 lines 4~9, and at page 20 lines 6~9.) 1.a. It is alleged that Applicant is indebted to Creditor A for a past-due debt totaling about $5,520. This debt has been paid, as evidenced by documentation from Creditor A and from Applicant. (TR at page 15 line 8 to page 16 line 22, and AppX A at pages 1 and 2.) 1.b. It is alleged that Applicant is indebted to Creditor B for a past-due debt totaling about $1,089. This debt has been “satisfied in full,” as evidenced by documentation from Creditor B. (TR at page 16 line 23 to page 17 line 14, and AppX A at page 3.) 1.c. and 1.d. It is alleged that Applicant is indebted to Creditor C for two past- due debts totaling about $560. These debts have been “PAID IN FULL,” as evidenced by documentation from Creditor C. (TR at page 17 lines 15~25, and AppX A at pages 4 and 5.) 1.e. It is alleged that Applicant is indebted to Creditor E for a past-due debt totaling about $1,491. This debt has been “closed with a $0 balance,” as evidenced by documentation from Creditor E. (TR at page 19 line 1 to page 21 line 3, and AppX B.) 1.f. It is alleged that Applicant is indebted to Creditor F for a past-due debt totaling about $341. Applicant is “not too sure” about this debt and has been unable to 3 contact the alleged creditor. (TR at page 21 line 4 to page 22 line 25.) As this alleged past-due debt does not appear on the Government’s three most recent credit reports, accessed in April 2016, in October 2016, and in February of 2017, I find that this alleged debt has been satisfied. (GXs 4~6.) 1.g. It is alleged that Applicant is indebted to Creditor G for a past-due debt totaling about $2,457. This debt has been “SETTLED IN FULL,” as evidenced by documentation from Creditor G. (TR at page 23 line 1 to page 24 line 6, and AppX C.) 1.h. It is alleged that Applicant is indebted to Creditor H for a past-due debt totaling about $440. Applicant denies this debt averring it “HAS BEEN PAID.” (TR at page 24 line 7 to page 25 line 2, and Answer at page 2.) As this debt is noted as a “PAID COLLECTION” on the Government’s April 2016 credit report, I find that this alleged debt has been satisfied. (GX 4 at page 2.) 1.i. It is alleged that Applicant is indebted to Creditor I for a past-due debt totaling about $167. Applicant has been unable to contact the alleged creditor. (TR at page 25 lines 3~15.) As this alleged past-due debt does not appear on the Government’s three most recent credit reports, accessed in April 2016, in October 2016, and in February of 2017, I find that this alleged debt has been satisfied. (GXs 4~6.) 1.j. It is alleged that Applicant is indebted to Creditor J for a past-due debt totaling about $96. Applicant has also been unable to contact the alleged creditor. (TR at page 25 lines 16~25.) As this alleged past-due debt does not appear on the Government’s three most recent credit reports, accessed in April 2016, in October 2016, and in February of 2017, I find that this alleged debt has been satisfied. (GXs 4~6.) 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 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 AG ¶ 2(a) describing 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 the national security.” In reaching this 4 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, 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 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 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). 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. Two are potentially applicable in this case: (a) inability or unwillingness to satisfy debts; and (c) a history of not meeting financial obligations. 5 Applicant accumulated a significant amount of delinquent debt. His actions demonstrated both a history of not addressing his debt and an inability to do so. The evidence is sufficient to raise the above disqualifying conditions. Two Financial Considerations mitigating conditions under AG ¶ 20 are potentially applicable: (b) the conditions that resulted in the financial problem were largely beyond the person’s control (e.g. loss of employment . . . ), and the individual acted responsibly under the circumstances ; and (d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts. The evidence shows that Applicant’s behavior occurred under such circumstances, loss of employment, that it is unlikely to recur and does not cast doubt on his current reliability, trustworthiness, or good judgment. AG ¶¶ 20(b), and 20(d) provide mitigation. 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 relevant facts and circumstances surrounding this case. After being unemployed twice within a brief period of time, Applicant has now addressed all of his alleged past-due debts. This is evidenced by the Government’s most recent credit reports. For all these reasons, I conclude Applicant has mitigated the 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 Subparagraph 1.a.~1.j.: 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 or continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is granted. ________________________ Richard A. Cefola Administrative Judge