1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [REDACTED] ) ISCR Case No. 16-00066 ) Applicant for Security Clearance ) Appearances For Government: Tovah Minster, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ HESS, Stephanie C., Administrative Judge: This case involves security concerns raised under Guideline F (Financial Considerations). Due to circumstances largely beyond her control, primarily a period of uncompensated disability, Applicant experienced financial difficulties, but mitigated the concern by acting responsibly under the circumstances. Eligibility for access to classified information is granted. Statement of the Case Applicant submitted a security clearance application (e-QIP) on June 1, 2015. On May 18, 2016, the Department of Defense (DOD) sent her a Statement of Reasons (SOR), alleging security concerns under Guideline F. The DOD acted under Executive Order (E.O.) 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 implemented by DOD on September 1, 2006. This case was adjudicated under the AG implemented on September 1, 2006. The DOD implemented amended adjudicative guidelines (AG) on June 8, 2017, while this 2 decision was pending. The applicable AG in this case is Guideline F (Financial Considerations.) This decision will be decided based on the amended AG effective June 8, 2017. The outcome of this case would have been the same if decided based on the former AG. Applicant answered the SOR on June 10, 2016, and requested a decision on the record without a hearing. Department Counsel submitted the Government’s written case on July 26, 2016. On July 28, 2016, a complete copy of the file of relevant material (FORM,) which included Government Exhibits (GX) 1 through 5, was sent to Applicant, who was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. She received the FORM on August 1, 2016. The Defense Office of Hearings and Appeals (DOHA) received her Response on August 8, 2016. The case was assigned to me on May 3, 2017. Findings of Fact The SOR alleges nine delinquent debts totaling $20,293. In her Answer, Applicant admits two of the debts, and denies four of the debts. The debts are reflected in Applicant’s credit bureau reports (CBRs) from May 2016 and June 2015. (GX 4; GX 5.) Her admissions in her Answer are incorporated in my findings of fact. Applicant is a 48-year-old defense industry employee since at least 2005, working for her current employer since June 2015. She and her current husband married in 2003, and have a 15-year-old son. Applicant has two adult children from a previous marriage. She has held a security clearance since 2008. (GX 2; GX 3.) Applicant began experiencing financial difficulties in about 2006. She suffered an illness and was unable to work from May to August 2006. Due to a problem with the paperwork, she did not receive disability payments, and fell behind on many of her financial obligations. (GX 3; GX 2.) Applicant began her efforts to pay her delinquent debts in 2014, when her financial circumstances became more stable. In early 2016, she engaged a free credit-monitoring company to contest the validity of the accounts listed on her CBR, and to regularly monitor its accuracy. Between January and July 2016, 16 derogatory entries, several of which were duplicates, were removed from Applicant’s CBR. These entries include the debts alleged in SOR ¶¶ 1.a, 1.c, 1.d, and 1.g through 1.i. (Response.) Applicant denies the $858 credit-card debt alleged in SOR ¶ 1.a, asserting that it is the underlying debt of the $1,262 collection-account debt alleged in SOR ¶ 1.c, which she admits. This assertion is supported by her June 2015 CBR (GX 5.) Although there is no evidence that Applicant paid SOR ¶ 1.c, it was removed from her CBR in February 2016. (Response.) Applicant admitted, without explanation, the $15,670 collection-account debt alleged in SOR ¶ 1.d. The last activity on this account was February 2009. (GX 5.) She previously stated that she did not recognize the debt, and there is no record evidence that identifies the original creditor or the nature of the debt. (GX 2; GX 4; GX 5.) The debt last 3 appeared on the June 2015 CBR, and was actively removed by the credit-monitoring company in February 2016. Although there is no record evidence that Applicant paid this debt, it is no longer in collection status. (GX 3; Response.) Applicant paid the $1,017 judgment (SOR ¶ 1.b), the $446 credit-card debt (SOR ¶ 1.e), and the $474 credit-card debt (SOR ¶ 1.g.) She denied the $278 pharmacy debt (SOR ¶ 1.f), the $223 collection-account debt (SOR ¶ 1.h), and the $66 medical debt (SOR ¶ 1.i.) These were removed from her CBR in 2016. (Response.) Applicant lives within her means and has not incurred any significant delinquent debt since 2009. (GX 5; Response.) She is current on her student loan payments, and other ongoing financial obligations. She paid two unalleged collection accounts and a medical debt, originally totaling about $1,155, between May 2014 and January 2015. (GX 4; Response.) Applicant stated in her Response that although she had past financial issues, she has “made a conscious effort to satisfy all debts and meet all financial obligations.” Policies “[N]o one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). As Commander in Chief, the President has the authority to “control access to information bearing on national security and to determine whether an individual is sufficiently trustworthy to have access to such information.” Id. at 527. The President has authorized the Secretary of Defense or his designee to grant applicants eligibility for access to classified information “only upon a finding that it is clearly consistent with the national interest to do so.” Exec. Or. 10865, Safeguarding Classified Information within Industry § 2 (Feb. 20, 1960), as amended. Eligibility for a security clearance is predicated upon the applicant’s meeting the criteria contained in the AG. These guidelines are not inflexible rules of law. Instead, recognizing the complexities of human behavior, an administrative judge applies these guidelines in conjunction with an evaluation of the whole person. An administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. An administrative judge must consider all available and reliable information about the person, past and present, favorable and unfavorable. The Government reposes a high degree of trust and confidence in persons with access to classified information. This relationship transcends normal duty hours and endures throughout off-duty hours. Decisions include, by necessity, consideration of the possible risk that the applicant may deliberately or inadvertently fail to safeguard classified information. Such decisions entail a certain degree of legally permissible extrapolation about potential, rather than actual, risk of compromise of classified information. Clearance decisions must be made “in terms of the national interest and shall in no sense be a determination as to the loyalty of the applicant concerned.” See Exec. Or. 4 10865 § 7. Thus, a decision to deny a security clearance is merely an indication the applicant has not met the strict guidelines the President and the Secretary of Defense have established for issuing a clearance. Initially, the Government must establish, by substantial evidence, conditions in the personal or professional history of the applicant that may disqualify the applicant from being eligible for access to classified information. The Government has the burden of establishing controverted facts alleged in the SOR. See Egan, 484 U.S. at 531. “Substantial evidence” is “more than a scintilla but less than a preponderance.” See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability. See ISCR Case No. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993). Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts. Directive ¶ E3.1.15. An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government. See ISCR Case No. 02- 31154 at 5 (App. Bd. Sep. 22, 2005). An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.” ISCR Case No. 01- 20700 at 3 (App. Bd. Dec. 19, 2002). “[S]ecurity clearance determinations should err, if they must, on the side of denials.” Egan, 484 U.S. at 531; see AG ¶ 2(b). Analysis Guideline F, Financial Considerations The concern under this guideline 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. This concern is broader than the possibility that an individual might knowingly compromise classified information in order to raise money. It encompasses concerns about an individual’s self-control, judgment, and other qualities essential to protecting classified information. An individual who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information. See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 5 The record evidence establishes that SOR ¶¶ 1.a and 1.c are the same debt. Therefore, I have not considered the debt alleged in SOR ¶ 1.a when evaluating Applicant’s financial status. When the same conduct is alleged twice in the SOR under the same guideline, one of the duplicative allegations should be resolved in Applicant=s favor. See ISCR Case No. 03-04704 (App. Bd. Sep. 21, 2005) at 3 (same debt alleged twice). The record evidence establishes two disqualifying conditions under this guideline: AG ¶ 19(a) (“inability to satisfy debts”) and AG ¶ 19(c) (“a history of not meeting financial obligations”). The following mitigating conditions under this guideline are potentially applicable: 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, a death, divorce or separation, clear victimization by predatory lending practices, or identity theft), and the individual acted responsibly under the circumstances; AG ¶ 20(d): individual initiated and is adhering to 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. Applicant’s past financial problems arose in 2006, and were attributable to matters largely beyond her control. Specifically, her unpaid three-month illness-related disability. This lack of income had a significant impact on her ability to maintain her finances. Applicant acted responsibly by beginning to pay her delinquent debts in 2014. She paid three of her SOR debts totaling $1,937, including a $1,262 judgment. She further demonstrated her financial responsibility by maintaining her ongoing financial obligations including her student loan payments, and not incurring any significant delinquent debt since 2009. She also repaid three unalleged debts totaling $1,155 between 2014 and 2015. She engaged a credit-monitoring company which had 16 derogatory entries, including five of the eight SOR debts, removed from her CBR. The removed debts are uncollectable and are therefore, not a source of vulnerability. Applicant acted in good faith by paying or otherwise resolving each of the SOR debts. “Good faith” means acting in a way that shows reasonableness, prudence, honesty, and adherence to duty or obligation. ISCR Case No. 99-0201, 1999 WL 1442346 6 at *4 (App. Bd. Oct. 12, 1999). A security clearance adjudication is an evaluation of an individual’s judgment, reliability, and trustworthiness. It is not a debt-collection procedure. ISCR Case No. 09-02160 (App. Bd. Jun. 21, 2010.) A person is not required to establish resolution of every debt alleged in the SOR. He or she need only establish a plan to resolve financial problems and take significant actions to implement the plan. The adjudicative guidelines do not require that an individual make payments on all delinquent debts simultaneously, nor do they require that the debts alleged in the SOR be paid first. See ISCR Case No. 07-06482 at 2-3 (App. Bd. May 21, 2008). Applicant did not merely wait for her debts to drop off her CBR. Rather, she took affirmative action in 2014 to begin paying her debts as soon as she was financially stable. In 2016, she engaged a credit-monitoring company to contest the validity of the accounts listed on her CBR. Between these two courses of action, she resolved all of the SOR debts. The circumstances under which Applicant incurred delinquent debt occurred between 2006 and 2009, are unlikely to recur, and do not cast doubt on her current security worthiness. Although Applicant experienced past financial issues, she paid or otherwise resolved all of her delinquent debts, has not incurred any recent delinquent debt, and lives within her means. AG ¶¶ 20(a), 20(d), 20(d), and 20(e) apply. Whole-Person Concept 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. In applying the whole- person concept, an 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. An 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. 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 I have also considered the following: Applicant has been employed in the defense industry since 2005, and has held a security clearance since 2008. She maintains her student loans and other financial obligations and has resolved her delinquent debts. Such actions are indicative of an 7 individual who is reliable and trustworthy and who exercises good judgment. I am confident that Applicant will continue her efforts to maintain financial stability. After weighing the disqualifying and mitigating conditions under Guideline F, and evaluating all the evidence in the context of the whole person, I conclude Applicant has mitigated the security concerns raised by her delinquent debts. Accordingly, I conclude she has carried her burden of showing that it is clearly consistent with the national interest to grant her eligibility for access to classified information. Formal Findings As required by section E3.1.25 of Enclosure 3 of the Directive, I make the following formal findings on the allegations in the SOR: Paragraph 1, Guideline F (Financial Considerations): FOR APPLICANT Subparagraphs 1.a – 1.i: For Applicant. Conclusion I conclude that it is clearly consistent with the national interest to continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is granted. Stephanie C. Hess Administrative Judge