1 - DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-01359 ) Applicant for Security Clearance ) Appearances For Government: Mary Margaret Foreman, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ KILMARTIN, Robert J., Administrative Judge: Applicant did not mitigate the security concerns under Guideline F, financial considerations. Applicant’s eligibility for access to classified information is denied. Statement of the Case On June 24, 2016, the Department of Defense (DOD) issued Applicant a Statement of Reasons (SOR) detailing security concerns under Guideline F, financial considerations. Applicant timely answered the SOR and elected to have his case decided on the written record. Department Counsel submitted the Government’s file of relevant material (FORM) on August 25, 2016. Applicant received the FORM on September 1, 2016, and had 30 days to file objections and submit material in refutation, extenuation, or mitigation. Applicant did not object to the Government’s evidence, and he provided no response to the FORM. The Government’s evidence, identified as Items 1 through 8, is admitted into evidence without objection. The case was assigned to me on June 26, 2017. 2 Findings of Fact1 Applicant is 46 years old. He obtained a bachelor’s degree in May 2001. Applicant has been employed as a cyber-security analyst by a federal contractor since August 2015. Previously, he was employed as a store manager for a major retailer. Applicant enlisted in the U.S. Air Force in 1989 and served until 1998. Then, he served a year in the Air National Guard from 1998 to 1999, and in the Army from 2001 until his retirement in 2012. All of his service was honorable. Applicant reports having a previous security clearance in the service. He has been married since 1991, and has three adult children. Applicant reported a period of unemployment from May 2014 to July 2014 during his transition after retiring from military service. Applicant reported delinquent debts in section 26 of his Security Clearance Application (SCA),2 including payments that he was making to a phone company, for cell phones that he could no longer afford after retirement. He also disclosed that his wife filed for Chapter 13 bankruptcy protection in 2011. She made payments of $1,100 per month to the Trustee from February 2011 until approximately March 2014 when she lost her employment and missed several payments. That bankruptcy case was dismissed in 2014 due to failure to make payments as required. In his Answer to the SOR, Applicant admitted three (¶¶ 1.a, 1.b, and 1.c) of the eight delinquent debts alleged in the SOR totaling $27,595. He attached a four-page letter to his Answer, dated July 11, 2016. In it, he explained that after he retired from the service, he was relying on a federal contractor job that never materialized because the putative employer lost the contract. Thus, he was unemployed for three months and felt constrained to eventually take a lower paying job. That is when he started having financial problems. However, the bankruptcy betrays earlier financial problems and delinquent debts that they acquired while he was still on active duty. At the end of his letter, Applicant stated “I anticipate bringing all my outstanding accounts current by September 2016.” Yet, he has produced no documents or evidence to prove that he has resolved the majority of his delinquent debts alleged in the SOR. In his Answer, Applicant stated that he is making monthly payments to settle the debts alleged in SOR ¶¶ 1.a, 1.b, and 1.c. He stated specific amounts of these putative monthly payments and that he expected to clear all three debts in the next 24 months. He has produced no bank statements, payment plans, cancelled checks, debits, or other documentary evidence to show that he is making the claimed payments. These debts are not resolved. Applicant also attached a combined credit bureau report (CBR) dated July 9, 2016, to supposedly bolster his claim that the alleged delinquent debts in SOR ¶¶ 1.e to 1.h are closed because he apparently disputed the amounts and corrected amounts have been listed on the recent CBR showing zero balances. 1 Unless stated otherwise, the source of the information in this section is Applicant’s May 28, 2014 Security Clearance Application (SCA). (Item 3) 2 Item 3. 3 Moreover, Applicant attached a “removed collections” page that indicates his cell phone and cable television collection accounts were recently removed from his CBR. Yet, there is no indication why they were removed. The attached CBR does reflect that the collection account in SOR ¶ 1.d was paid-off and the amount past due is zero. That debt is resolved. In his Answer, Applicant stated that the delinquent debts alleged in SOR ¶¶ 1.g and 1.h (bank issued credit cards) were settled previously and notes that both accounts reflect a zero balance on the credit report submitted with his Answer. That report indicates that these accounts are still in a collection status, and were transferred or sold. Therefore, it is impossible to determine how or whether the underlying delinquent debts were resolved. Applicant has produced no documentation to demonstrate that he compromised or settled these delinquent debts as opposed to simply outlasting the creditors until they stopped trying to collect on these delinquencies. Policies This action was taken under Executive Order (EO) 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 promulgated in Security Executive Agent Directive 4 (SEAD 4), effective within the DOD on June 8, 2017.3 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, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are 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, 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 adjudicative process is an examination of a sufficient period and a careful weighing of a number of variables of an individual’s life to make an affirmative determination that the individual is an acceptable security risk. This is 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 3 Although I have decided this case under the adjudicative guidelines (AG) effective June 8, 2017, I also considered the case under the former AG effective on September 1, 2006, and my decision would be the same under either AG. 4 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, an “applicant is responsible for presenting witnesses and other evidence to rebut, explain, extenuate, or mitigate facts admitted by applicant or proven by Department Counsel, and has the ultimate burden of persuasion as to obtaining a favorable security 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 that an 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 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 relating to 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 abuse, 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. 5 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. AG ¶ 19 provides conditions that could raise security concerns. The following apply here: (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’s delinquent debts alleged in the SOR are confirmed by his credit reports, his answers to the SOR, and his clearance interview of March 2014. The Government produced substantial evidence to support the disqualifying conditions in AG ¶¶ 19(a), 19(b) and 19(c), thereby shifting the burden to Applicant to produce evidence to rebut, explain, extenuate, or mitigate the facts.4 Applicant has not met that burden. Only one of the delinquent debts, in SOR ¶ 1.d, has been addressed. The guideline also includes conditions that could mitigate security concerns arising from financial difficulties. The following mitigating conditions under AG ¶ 20 are potentially applicable: (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 . . ., 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 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 4 Directive ¶ E3.1.15. See ISCR Case No. 02-31154 at 5 (App. Bd. Sep 22, 2005) (An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government). 6 (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 endured a short period of unemployment following his 22 years of honorable service in the military. Also, his wife lost her job, resulting in her inability to make payments to the Chapter 13 bankruptcy trustee. Arguably, these conditions were beyond his control. However, it is evident from the bankruptcy case that Applicant’s (and his wife’s) delinquent debts accrued before he retired from active duty. They have been longstanding. He has produced no documentation in response to the FORM. He has not demonstrated that he acted responsibly under the circumstances. Applicant has the burden to provide sufficient evidence to show that his financial problems are under control, and that his debts were incurred under circumstances making them unlikely to recur. The mitigating conditions enumerated above do not apply, except with respect to SOR ¶ 1.d. 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 the 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 the 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. Most importantly, Applicant has not met his burden of production of documentary evidence to mitigate the security concerns. Applicant’s finances remain a security concern. There is insufficient evidence to conclude that Applicant’s financial problems are under control. He has not met his burden of persuasion. The record evidence leaves me with serious questions and 7 doubts as to Applicant’s suitability for a security clearance. For all these reasons, I conclude Applicant has not mitigated the security concerns arising under Guideline F, financial considerations. 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 to 1.c: Against Applicant Subparagraph 1.d: For Applicant Subparagraphs 1.e to 1.h: Against Applicant Conclusion In light of all of the circumstances presented by the record in this case, it is not clearly consistent with the interests of national security to grant Applicant a security clearance. Eligibility for access to classified information is denied. ________________________ Robert J. Kilmartin Administrative Judge