1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-01075 ) ) Applicant for Security Clearance ) Appearances For Government: Adrienne Driskill, Esq., Department Counsel For Applicant: Pro se June 16, 2017 ______________ Decision ______________ GOLDSTEIN, Jennifer I., Administrative Judge: Applicant is alleged to be delinquent on 15 debts, in a total exceeding $38,000. He is making payments on one debt, but the rest remain unresolved. Applicant failed to introduce documentation to show that his history of financial delinquencies does not cast doubt on his current judgment. Eligibility for access to classified information is denied. Statement of the Case On July 30, 2016, in accordance with DoD Directive 5220.6, as amended (Directive), the Department of Defense issued Applicant a Statement of Reasons (SOR) alleging facts that raise security concerns under Guideline F. The SOR further informed Applicant that, based on information available to the government, DoD adjudicators could not make the preliminary affirmative finding it is clearly consistent with the national interest to grant or continue Applicant’s security clearance. Applicant answered the SOR on November 8, 2016, and requested a hearing before an administrative judge. (Answer.) The case was assigned to me on December 2 19, 2016. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on December 20, 2016, scheduling the hearing for February 10, 2017. The hearing was convened as scheduled. The Government offered Exhibits (GE) 1 through 4, which were admitted without objection. Applicant testified on his own behalf. Applicant presented two documents, which I marked and admitted without objection as Applicant’s Exhibits (AE) A and B. The record was left open until March 10, 2017, for receipt of additional documentation. On February 13, 2017, the Government presented an additional exhibit, marked GE 5. I emailed Applicant on February 15, 2017, and requested he notify me of any objections to GE 5. He did not respond directly to that email, but did submit an email dated March 9, 2017, containing a narrative statement. His narrative statement was marked as AE C. Department Counsel had no objections to AE C. Both GE 5 and AE C are admitted. DOHA received the transcript of the hearing (Tr.) on February 23, 2017. Procedural Issue On December 10, 2016, the Security Executive Agent issued Directive 4 (SEAD- 4), establishing a “single, common adjudicative criteria for all covered individuals who require initial or continued eligibility for access to classified information or eligibility to hold a sensitive position.”1 The National Security Adjudicative Guidelines (hereinafter “adjudicative guidelines” or “AG”), which are found at Appendix A to SEAD-4, are to be used in all security clearance determinations made on or after June 8, 2017.2 In light of this explicit direction and absent lawful authority to the contrary, I have applied the new adjudicative guidelines.3 ISCR Case No. 02-00305 at 3 (App. Bd. Feb. 12, 2003) (security clearance decisions must be based on current DoD policy and standards).4 Findings of Fact Applicant admitted to the allegations in SOR ¶¶ 1.b through 1.o. He failed to admit or deny SOR allegation ¶ 1.a, and as a result, it will be treated as a denial. After a thorough and careful review of the pleadings, exhibits, and testimony, I make the following findings of fact. Applicant is a 40-year-old employee of a defense contractor. He has been employed with the defense contractor for two years. He served in the Marine Corps for 15 years and achieved the rank of staff sergeant. He held a security clearance for eight years in connection with his service in the Marine Corps. He was honorably discharged. 1 SEAD-4, ¶ B, Purpose. 2 SEAD-4, ¶ C, Applicability. 3 Nonetheless, I have considered the previous version of the adjudicative guidelines and my ultimate decision in this case would have been the same. 4 See also ISCR Case No. 07-00029 at 3 (App. Bd. Dec. 7, 2007) (when the guidelines were last revised, the Board stated the following, “Quasi-judicial adjudications must be made within the bounds of applicable law and agency policy, not without regard to them.”) 3 He is married to his second wife, and has a total of eight children: three from his first marriage, one from his second marriage, and four step children. (Tr. 26-38.) Applicant is alleged to be delinquent on 15 debts, in a total exceeding $38,000. The debts are documented in credit reports dated September 2015; June 2016, and February 2017. Records reflect that Applicant was not well informed regarding the details of his finances prior to 2015, because his wife managed their finances when he was deployed. He learned of many of the delinquencies during his subject interview in October 2015. He promised to resolve his delinquencies at that time. (GE 2; GE 3; GE 4; GE 5.) Applicant attributes his debts to circumstances beyond his control. His son is disabled. Applicant’s wife had to stop working for two and a half years to care for their son. He and his wife maintain separate residences, because his job is in an area with a higher cost of living. However, his two youngest children recently moved in with him. Applicant also recently sustained a financial setback after his wife’s vehicle was vandalized and set on fire. (GE 2; AE C; Tr. 22-24.) Applicant presented a letter, dated April 8, 2017, from a credit repair service that indicates he retained the service “to audit and verify the status of the information within his credit reports.” He hired the credit repair service in October 2016, and pays them $99 monthly. The April 8, 2017 letter did not identify which debts the service was verifying. Applicant testified that the credit repair service disputed the debts identified in SOR ¶¶ 1.b (for $446); 1.f (for $258); 1.j (for $1,224); and 1.o (for $134) on his behalf because they were “old debt.” (Tr. 40-41.) Applicant’s credit report dated February 13, 2017, reflects Applicant disputed the debts alleged in SOR ¶¶ 1.a (for $1,508); 1.d (for $216); 1.j (for $1,223); 1.k (for $6,680); and 1.l (for $5,740). However, they remain on Applicant’s credit report as delinquent or charged-off accounts after his dispute. SOR ¶¶ 1.a, 1.b, 1.d, 1.f, 1.j, 1.k, 1.l, and 1.o remain unresolved. (GE 5; AE A; Tr. 64-65.) Applicant claimed to have resolved the medical debts in SOR ¶¶ 1.e, 1.h, and 1.i. in the amounts of $171, $257, and $172, respectively. (Tr. 41.) Applicant failed to introduce documentation to support his claim that these debts are resolved. His February 13, 2017 credit report reflects SOR ¶ 1.e is unresolved. (GE 5.) The debts alleged in SOR ¶¶ 1.h and 1.i are not listed on the February 13, 2017 credit report, but do appear on his June 21, 2016 credit report. (GE 4.) None of Applicant’s medical debts have been documented as resolved. Applicant claimed to be making payments on the debts alleged in SOR ¶¶ 1.a (for $1,508); 1.k (for $6,680); and 1.m (for $14,175). As previously noted, SOR ¶ 1.a is listed as unpaid on his February 13, 2017 credit report. He failed to produce evidence that he is satisfying that debt. Similarly, the debt in 1.k is listed on his February 13, 2017 credit report with a growing balance of $7,317. Applicant failed to meet his burden to show he is resolving these two debts. However, Applicant’s past-due balance on the debt identified in SOR ¶ 1.m, has been reduced to $921. Applicant is resolving that debt. (GE 5.) 4 Applicant has not made payments on the debts alleged in SOR ¶¶ 1.c, 1.g, or 1.n. He testified he is “still working” with the creditor in ¶ 1.c to arrange payments for that $1,672 debt. (Tr. 19.) He testified he was not satisfied with the performance of the law firm to whom he owes the $380 alleged in ¶ 1.g, and is “still in the process of trying to fix that.” (Tr. 20.) He explained that his wife was taking care of the $5,000 debt alleged in SOR ¶ 1.n, and he needed to get information from her about it. (Tr. 22.) None of these debts are resolved. Applicant’s pay is being garnished until his child support payments to his ex-wife are satisfied. (Tr. 48-49.) His February 13, 2017 credit report identifies an additional delinquent debt for an unpaid utility bill in the amount of $258. (GE 5.) Applicant testified he no longer has credit cards. He claims he does not make purchases that he cannot pay off. (Tr. 59.) His credit repair service sends him emails about budgeting. (Tr. 65.) He intends to resolve all of his debts and maintain a budget. (AE C.) Applicant received the Navy and Marine Corps Achievement Medal; the Presidential Unit Citation-Navy; four Navy Unit Commendations; five Marine Corps Good Conduct Medals; and the National Defense Service Medal, among his many citations and decorations. (AE B.) Policies When evaluating an applicant’s suitability for national security eligibility, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines (AG) list potentially disqualifying conditions and mitigating conditions, which are to be used in evaluating an applicant’s national security eligibility. 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 AG ¶ 2 describing the adjudicative process. The administrative judge’s overarching adjudicative goal is a fair, impartial, and commonsense decision. The entire process is a conscientious scrutiny of applicable guidelines in the context 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 evidence contained in the record. I have not drawn inferences based on mere speculation or conjecture. 5 Directive ¶ E3.1.14, requires the Government to 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 applying for national security eligibility seeks to enter 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 national security eligibility. 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 or sensitive information. Finally, as emphasized in Section 7 of Executive Order 10865, “[a]ny determination under this order adverse to an applicant shall be a determination 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 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 security concern insofar as it may result from criminal activity, including espionage. 6 The guideline notes several conditions that could raise security concerns under AG ¶ 19. Three are potentially applicable in this case: (a) inability to satisfy debts; (b) unwillingness to satisfy debts regardless of the ability to do so; and (c) a history of not meeting financial obligations. Applicant was alleged to be delinquent on 15 debts, in a total exceeding $38,000. He documented he is making payments on only one of those debts. He has been aware of his debts since at least 2015, but has taken little action to resolve them. The evidence is sufficient to raise these disqualifying conditions. AG ¶ 20 provides conditions that could mitigate security concerns. I considered all of the mitigating conditions under AG ¶ 20 including: (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; (d) the individual initiated and is adhering to a good-faith effort to repay overdue creditors or otherwise resolve debts; and (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 financial problems are ongoing. He has been aware of his delinquencies since 2015, but failed to follow through on his promise to address his delinquent accounts. He has not demonstrated that future financial problems are unlikely. Mitigation under AG ¶ 20(a) has not been established. 7 Applicant attributed his recent delinquencies to his son’s disability, his wife’s unemployment, maintaining two residences, and the vandalism of his wife’s vehicle. These are circumstances beyond his control. However, he failed to establish that he acted reasonably or responsibly with respect to his debts. As previously noted, he has known of his debts since 2015, yet he has yet to document he has taken action on 14 of his delinquent accounts. He has not demonstrated that he addressed these debts in a responsible or timely manner. Full mitigation under AG ¶ 20(b) has not been established. Applicant did not document that he received financial counseling from a legitimate and credible source. Further, there are no clear indications that his financial problems are being resolved or are under control. Mitigation under AG ¶¶ 20(c) or (d) has not been established. Applicant contested the delinquencies in SOR ¶¶ 1.a, 1.b, 1.d, 1.f, 1.j, 1.k, 1.l, and 1.o with the credit reporting agencies, because they were “old debt[s].” The age of his delinquencies may legally bar collections and reporting from a credit report, but do not demonstrate a reasonable basis to dispute the legitimacy of the past-due debt. Applicant failed to provide documented proof to substantiate the basis of any dispute with his creditors or provide evidence of actions he has taken to resolve the issues. Mitigation under AG ¶ 20(e) was not 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 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 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 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 those guidelines, but some warrant additional comment. 8 Applicant served honorably in the Marine Corps. He successfully held a security clearance for eight years. However, he has yet to address the majority of his financial delinquencies. 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 failed to mitigate the Financial Considerations security concerns. Formal Findings Formal findings for or against Applicant on the allegations set forth in the SOR, as required by ¶ E3.1.25 of the Directive, are: Paragraph 1, Guideline F: AGAINST APPLICANT Subparagraph 1.a: Against 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: For Applicant Subparagraph 1.n: Against Applicant Subparagraph 1.o: 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. ________________________ Jennifer I. Goldstein Administrative Judge