1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ADP Case No. 15-08846 ) Applicant for Public Trust Position ) Appearances For Government: Andrea Corrales, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ COACHER, Robert E., Administrative Judge: Applicant has not mitigated the financial considerations trustworthiness concerns. Eligibility for access to sensitive information is denied. Statement of the Case On June 17, 2016, the Department of Defense (DOD) issued Applicant a Statement of Reasons (SOR) detailing trustworthiness concerns under Guideline F, financial considerations. DOD acted under Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG).1 Applicant answered (Ans.) the SOR on August 15, 2016, and requested a hearing before an administrative judge. The case was assigned to me on October 7, 2016. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing 1 I decided this case using the AG implemented by DOD on June 8, 2017. However, I also considered this case under the old AG implemented on September 1, 2006, and my conclusions are the same using either set of AG. 2 on January 17, 2017, and the hearing was convened as scheduled on February 24, 2017. The Government offered exhibits (GE) 1 through 3, which were admitted into evidence without objection. The Government’s exhibit list was marked as hearing exhibit (HE) I. Applicant testified, but did not offer any documentary evidence. DOHA received the hearing transcript (Tr.) on March 2, 2017. Procedural Rulings Department Counsel moved to amend the caption of the SOR to reflect that this case is properly styled as a trustworthiness determination, rather than a security clearance determination. The motion was granted. Department Counsel also moved to amend SOR ¶ 1.b to conform to the proof that Applicant failed to file his state income tax returns for tax years 2010-2015. Department Counsel also moved to add SOR ¶ 1.m, alleging Applicant failed to file his federal tax returns for tax years 2010-2015, as developed by the evidence. Applicant did not object to these substantive amendments and Department Counsel’s motion was granted. The SOR was so amended.2 Findings of Fact Applicant admitted all the SOR allegations. His admissions are incorporated as findings of fact. After a review of the pleadings and evidence, I make the following additional findings of fact. Applicant is a 36-year-old employee of a federal contractor. He has worked for this employer since 2015. He is a high school graduate and has completed two years of college. He is married, but he is currently separated from his wife. He has four children. His wages are garnished, in the amount of approximately $500 monthly, to pay child support for two children. He served on active duty in the Army from 1999 to 2003. He was deployed to Iraq during this time. He was honorably discharged from the Army and later enlisted in the National Guard where he served from 2010 to 2013. He was honorably discharged from the National Guard. He has a service-connected disability for which he receives a 10% disability rating from the VA.3 The SOR alleges Applicant: is delinquent on state taxes for years 2010 and 2014 in the respective amounts of $609 and $500 (SOR ¶¶ 1.a and 1.c); failed to timely file his 2010-2015 federal and state income tax returns (SOR ¶¶ 1.b and 1.m); has two charged-off accounts and seven collection accounts totaling approximately $23,707, which remain unpaid (SOR ¶¶ 1.d - 1.l). The largest of the collection accounts is for a delinquent student loan account in the amount of $21,000. The allegations are supported by admissions in his trustworthiness application, credit reports from June 2015 and September 2016, and admissions in his SOR answer.4 2 Tr. at 10-11, 24-25. 3 Tr. at 5, 15-16, 19; GE 1. 4 GE 1-3; Ans. 3 Applicant attributed his financial problems to not having enough funds available once he paid his monthly child support. Also, his estranged wife indicated she would file their tax returns, but apparently did not do so. Applicant first learned about the problem with his taxes when he went through his background investigation for his current job. His state tax liability has not been paid and he has not filed any of the delinquent federal or state tax returns to date. He had an appointment with the IRS on March 3, 2017, but no information is available from that meeting. His federal and state tax issues remain unresolved.5 Applicant’s student loan debt related back to when he first attended college in approximately 2004. He used the GI Bill to fund his schooling then, but because he did not complete the course work, he was required to pay back the amount he was given for college. He became delinquent on those payments and in 2015 attempted to rehabilitate his student loan. He made the required minimal $6 monthly payment for about five to six months, but when he missed a payment by having insufficient funds in his account he was dropped from the program and his loan remains delinquent. He has not made any further payments on his student loan or any other of the SOR debts. All remain unresolved.6 Applicant has not sought financial counseling and he does not have a budget. His monthly take home pay is approximately $1,000 with his expenses totaling about $700 monthly. At the time of the hearing, he had between $2 and $100 in his checking account.7 Policies When evaluating an applicant’s suitability for a public trust position, the administrative judge must consider the disqualifying and mitigating conditions in the AG. 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(a), 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 national security eligibility will be resolved in favor of the national security.” In reaching this decision, I have drawn only those conclusions that are reasonable, logical and based on the 5 Tr. at 22-23, 27-28; GE 1. 6 Tr. at 32-35, 50-54; GE 1-2. 7 Tr. at 40, 44, 46-47. 4 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 applicant or proven by Department Counsel.” The applicant has the ultimate burden of persuasion as to obtaining a favorable trustworthiness decision. A person who seeks access to sensitive 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 sensitive information. Decisions include, by necessity, consideration of the possible risk the applicant may deliberately or inadvertently fail to protect or safeguard sensitive information. Such decisions entail a certain degree of legally permissible extrapolation as to potential, rather than actual, risk of compromise of sensitive information. Analysis Guideline F, Financial Considerations AG & 18 expresses the trustworthiness concern for financial considerations: Failure 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 or sensitive information. Financial distress can also be caused or exacerbated by, and thus can be a possible indicator of, other issues of personnel security concern such as excessive gambling, mental health conditions, substance misuse, or alcohol abuse or dependence. An individual who is financially overextended is at greater risk of having to engage in illegal or otherwise questionable acts to generate funds. Affluence that cannot be explained by known sources of income is also a trustworthiness concern insofar as it may result from criminal activity, including espionage. The guideline notes several conditions that could raise trustworthiness concerns. I have considered all of them under AG & 19 and the following potentially apply: (a) inability to satisfy debts; (b) unwillingness to satisfy debts regardless of the ability to do so; (c) a history of not meeting financial obligations; and 5 (f) failure to file or fraudulently filing annual Federal, state, or local income tax returns or failure to pay annual Federal, state, or local income tax as required. Applicant has delinquent debts that remain unpaid and unresolved. He failed to file his federal and state income tax returns for years 2010-2105, and he has delinquent state tax liability for tax years 2010 and 2014. I find all disqualifying conditions are raised. The guideline also includes conditions that could mitigate trustworthiness concerns arising from financial difficulties. I have considered all of the mitigating conditions under AG ¶ 20 and the following potentially apply: (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, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances; (c) the individual has received or is receiving financial counseling for the problem from a legitimate and credible source, such as a non-profit credit counseling service, and there are clear indications that the problem is being resolved or is under control; and (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts. Applicant’s debts are recent, multiple, and cast doubt on his reliability, trustworthiness, and good judgment. His state tax debt remains outstanding with no clear plan to pay it. His 2010-2015 federal and state tax returns remain unfiled. AG ¶ 20(a) is not applicable. Applicant failed to present evidence showing that his financial situation was caused by conditions beyond his control. AG ¶ 20(b) does not apply. There is no evidence of financial counselling. Given the unpaid status of his state tax debt and his unfiled federal and state tax returns, as well as his remaining unpaid collection and charged-off accounts, there are not clear indications that Applicant’s financial problems are under control. Although he attempted to rehabilitate his delinquent student loan account, ultimately he was unsuccessful and evidence of good- faith efforts to pay or resolve his debts is lacking. AG ¶ 20(c) and ¶ 20(d) do not apply. 6 Whole-Person Concept Under the whole-person concept, the administrative judge must evaluate an applicant’s eligibility for access to sensitive information 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(d): (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 access to sensitive information must be an overall commonsense assessment 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. I have incorporated my comments under Guideline F in my whole-person analysis. Some of the factors in AG ¶ 2(d) were addressed under that guideline, but some warrant additional comment. I considered the circumstances by which Applicant became indebted. I also considered his military service, including his time deployed to a war zone and his VA- rated disability. However, Applicant has taken no action to resolve his tax issues. He has not established a meaningful track record of financial responsibility, which causes me to question his ability to resolve his debts. Overall, the record evidence leaves me with questions and doubts about Applicant’s eligibility and suitability for access to sensitive information. For all these reasons, I conclude Applicant has not mitigated the financial considerations trustworthiness 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 Subparagraphs: 1.a – 1.m: Against Applicant 7 Conclusion In light of all of the circumstances, it is not clearly consistent with national security to grant Applicant eligibility for access to sensitive information. Eligibility for access to sensitive information is denied. ________________________ Robert E. Coacher Administrative Judge