1    DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [REDACTED] ) ISCR Case No. 16-01151 ) Applicant for Security Clearance ) Appearances For Government: Braden M. Murphy, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ HESS, Stephanie C., Administrative Judge: Applicant experienced financial difficulties due to circumstances largely beyond her control, but mitigated the concern by acting responsibly. Eligibility for access to classified information is granted. Statement of the Case Applicant submitted a security clearance application (e-QIP) on June 29, 2015. On July 12, 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 (Exec. Or.) 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 (AG) implemented by DOD on September 1, 2006. Applicant submitted her Answer to the SOR on July 16, 2016, and requested a hearing before an administrative judge. Department Counsel was ready to proceed on September 21, 2016, and the case was assigned to me on December 19, 2016. On December 21, 2016, the Defense Office of Hearings and Appeals (DOHA) notified   2    Applicant that the hearing was scheduled for January 13, 2017. I convened the hearing as scheduled. Government Exhibits (GX) 1 through 4 were admitted into evidence without objection. Applicant testified and Applicant’s Exhibits (AX) A through L were admitted without objection. DOHA received the transcript (Tr.) on January 24, 2017. This case was adjudicated under the AG implemented on September 1, 2006. The DOD implemented the amended AG on June 8, 2017, while this decision was pending. 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. Findings of Fact Applicant is a 49-year-old executive assistant currently employed by a defense contractor since January 2015. She completed one year of college. She divorced in 1998 and has a 19-year-old son who currently resides with his father. She previously held a position of trust, however this is her first application for a security clearance. (GX 1; Tr. 29-33.) Under Guideline F, the SOR alleges 16 delinquent debts totaling approximately $24,230, and a 1997 chapter 7 bankruptcy. The delinquent debts consist of: four judgments totaling $11,752; four medical accounts totaling $3,808; an $868 delinquent vehicle loan; and various consumer debts. In her Answer, Applicant admits the bankruptcy and three of the debts, and denies the remaining debts asserting that she paid, is paying, or has disputed eight of the debts. Her admissions are incorporated in my findings of fact. The delinquent debts are reflected in Applicant’s credit bureau reports (CBR) from March 2016 and July 2015. (GX 3; GX 4.) Applicant began experiencing financial difficulties while married, as a result of her husband’s excessive and irresponsible spending. He incurred substantial jointly-held debt in his and Applicant’s names, which led to the 1997 Chapter 7 bankruptcy and their 1998 divorce. Following the divorce, Applicant moved back to her home state as a single parent, where she was unemployed for several months. In 2000, she began working for a defense contractor. She struggled financially, but was assisted and advised by her mother. When her mother passed away in 2005, Applicant lost her emotional and financial support. She moved to a more expensive area to be closer to her sister, who agreed to provide after-school-care for Applicant’s son. However, the after-school-care did not work out, and the increased cost-of-living and childcare expenses created even greater financial strain. In April 2013, she was laid off from her defense contracting job. (Tr. 33- 34.) In July 2013, Applicant incurred the expenses of moving to her current state of residence, drawn by a lower cost-of-living, subsidized after-school-care, and some family. She was unemployed from April until November 2013, which further strained her limited finances. She took the first job offered to her, at a reduced income, and was underemployed from November 2013 until January 2015, when she began working for her current employer. It then took Applicant about six months to reach financial stability.   3    (Tr. 34-37.) Applicant was a single parent for over 17 years, until about January 2016, when her son moved in with his father. Although Applicant pays monthly child support of $402, on which she is current, her overall monthly expenses are significantly lower. (Tr. 28; Tr. 49.) Applicant is current on her previously $868 past-due vehicle loan (SOR ¶ 1.b), which will be paid off in March 2018. (AX A; Tr. 38-39.) She paid the seven debts alleged in SOR ¶¶ 1.c, 1.f, 1.i, 1.k, 1.o, 1.p and 1.q, totaling $9,797. (AX C; AX D; AX F; AX H; AX I; AX J; AX L; Answer; Tr. 36-46.) She has been repaying the $4,250 judgment (SOR ¶ 1.n) through automatic $100 monthly payments since January 2015. (Tr. 43-45; AX G.) She successfully disputed the $1,607 debt alleged in SOR ¶ 1.e, and it has been removed from her credit report. (AX B.) She disputed the $1,726 debt (SOR ¶ 1.d) with the credit reporting agencies. (Tr. 54.) She contacted the creditors of the $569 debt alleged in SOR ¶ 1.g and the $521 debt for her son’s medical treatment alleged in SOR ¶ 1.h, and is awaiting documentation from the creditors to verify the accounts and arrange repayment. (Tr. 54-55; Tr. 51.) The $202 medical debt (SOR ¶ 1.j) is owed by her husband for her son’s medical treatment. Applicant contacted the hospital and the collection agency and provided her husband’s insurance and contact information. (Answer; Tr. 27.) Applicant does not recognize the $2,275 judgment owed to a collection agency alleged in SOR ¶ 1.m and it remains unresolved. She disputes the $2,415 judgment owed to an apartment complex, stating that she followed the requisite protocol before moving out, the apartment complex retained her security deposit, and she was never contacted about owing any additional monies. (Tr. 41-43.) She will attempt to resolve this debt. (Tr. 56.) Applicant has not incurred any recent delinquent debt, and lives within her means. (GX Tr. 47-50.) Her 2016 mid-year employment review shows that Applicant is an exemplary employee, and her 2015 review rated her a Performance Category 5 – Significantly Exceeds Expectations. (AX K.) She accepts responsibility for her past financial issues, and will repay the debts for which she is responsible. (Tr. 53; Tr. 59.) She was candid, sincere, and credible while testifying. 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   4    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. 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).   5    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). Applicant’s testimony, corroborated by 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”). However, a person can mitigate concerns about his ability to handle and safeguard classified information raised by his financial circumstances by establishing one or more of the mitigating conditions listed under the guideline. The relevant mitigating conditions in this case are: 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(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;   6    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 financial difficulties arose from circumstances largely beyond her control. Specifically, her former husband’s reckless spending habits caused significant joint-debt, resulting in bankruptcy and their divorce. Applicant was a single parent for nearly 17 years. Between April 2013 and January 2015, she was unemployed for four months, during which time she relocated, and was underemployed for thirteen months. Beginning in January 2015, she acted responsibly and in good faith by starting a repayment plan for the $4,250 judgment, bringing her vehicle loan current, paying seven SOR debts, disputing two debts, contacting three of her five remaining creditors. These actions resolved ten of the sixteen SOR debts, totaling $18,248, or more than 75% of the SOR debt. She lives within her means and has not incurred any recent delinquent debt. “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 at *4 (App. Bd. Oct. 12, 1999). A security clearance adjudication is an evaluation of a person’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 a person 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). The circumstances which led to Applicant’s indebtedness are unlikely to recur, and do not cast doubt on her current reliability, trustworthiness, or good judgment. AG ¶¶ 20(a) through 20(e) apply. Overall, she has addressed her debts in a responsible manner, and will continue to do so. Although her financial record is not perfect, she has implemented a reasonable plan to resolve her financial issues within her means. 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):   7    (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 was a single parent for almost 17 years. She has made extensive progress on implementing her plan to resolve her delinquent debts. She has received positive performance evaluations from her employer, and previously held a position of trust. 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.q: For Applicant Conclusion I conclude that it is clearly consistent with the national interest to grant Applicant’s eligibility for a security clearance. Eligibility for access to classified information is granted. Stephanie C. Hess Administrative Judge