1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-01430 ) Applicant for Security Clearance ) Appearances For Government: Erin Thompson, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ Curry, Marc E., Administrative Judge: Although Applicant has recently begun taking steps to address her delinquent finances, it is too soon to conclude, given the amount of delinquent debt, that she has mitigated the financial considerations security concerns. Clearance is denied. Statement of the Case On August 15, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) issued a Statement of Reasons (SOR) to Applicant, detailing the security concerns under Guideline F, financial considerations, and explaining why it was unable to find it clearly consistent with the national interest to grant security clearance eligibility for her. The DOD CAF took the action 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 for Determining Eligibility for Access to Classified Information (AG) effective within the DOD on September 1, 2006. On September 29, 2016, Applicant answered the SOR allegations and requested a hearing, whereupon the case was assigned to me on December 6, 2016. On February 1, 2 2017, DOHA issued a notice of hearing, scheduling Applicant’s case for March 6, 2017. The hearing was held as scheduled. I received five Government exhibits (GE 1 – GE 5), and two Applicant’s exhibits (AE A and B). At the close of the hearing, I left the record open, at Applicant’s request, to allow her to submit additional exhibits. Within the time allotted, she submitted six exhibits that I incorporated into the record as AE C through AE H. The transcript (Tr.) was received on March 10, 2017. Findings of Fact Applicant is a 48-year-old single woman with three adult children, ranging in age from 21 to 30. She was married previously from 1992 to 1998. She has a high school education and has been working for a defense contractor as a technical analyst since 2014. She is highly respected on the job. According to her supervisor, she “executed all assignments as directed with exemplary performance.” (AE A) A coworker characterizes her as “organized, prepared, and thorough in everything that she is involved with.” (AE B) Since approximately 2010, Applicant has incurred approximately $24,000 of delinquent debt, including $1,644 in delinquent income taxes from her 2013 federal income tax return (SOR subparagraph 1.k). Applicant began struggling financially after she separated from her live-in fiancée. After relocating, she was unable to make timely bill payments. Moreover, her financial struggles were compounded by her children, all drug addicts, who frequently stole from her. (Tr. 21) In addition, she was financially strained from making bail payments for her middle son who was frequently in and out of jail. Applicant has experienced financial struggles in the past. Specifically, her ex- husband “had champagne tastes for a beer budget.” (Tr. 15) Consequently, they had unmanageable debt when they divorced, prompting her to file for Chapter 7 bankruptcy relief in 2000. Applicant satisfied the debt alleged in SOR subparagraph 1.a, totaling $79. (AE F) She contacted the creditor of the debt alleged in subparagraph 1.b (a satellite television provider) and negotiated a bill reduction, from $737, as alleged in the SOR, to $258. (AE E) She satisfied it approximately a week after the hearing. (AE E) Applicant satisfied subparagraph 1.c, totaling $185, as duplicated in subparagraph 1.h, approximately one week after the hearing. (AE H) Applicant has not contacted the creditors alleged in subparagraphs 1.d and 1.e, yet. She is attempting to ascertain the current holder of the debt alleged in subparagraph 1.f. The debt alleged in SOR subparagraph 1.g is a delinquent cell phone account totaling $886. Applicant settled this account for $443 and paid it approximately a week after the hearing. (AE H) She contends that she has entered a settlement agreement with the creditor of the debt alleged in subparagraph 1.i, but has not provided any substantiating evidence. Her attempts at resolving the telephone bill, totaling $1,024, as alleged in subparagraph 1.j, have been unsuccessful, as the creditor could not locate the old account. (AE H) 3 Applicant incurred her federal income tax delinquency, as alleged in subparagraph 1.k, in 2013 after she miscalculated the income tax consequences of borrowing money from her 401k account. (Tr. 25) She intends to pay this delinquency with her anticipated refund from tax year 2016. In sum, Applicant has satisfied approximately $1,000 of delinquent debt, and has about $22,500 of outstanding delinquent debt. After the hearing, Applicant scheduled an appointment with a credit counselor. (AE D) After she provides proof of income, a list of monthly living expenses, and copies of her credit card statements, the counselor will draft a repayment plan. (AE D) Applicant earns $42,000 per year. Recently, she began a part-time job, which pays her $7,000 per year. Policies The U.S. Supreme Court has recognized the substantial discretion the Executive Branch has in regulating access to information pertaining to national security, emphasizing that “no one has a ‘right’ to a security clearance.” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). When evaluating an applicant’s suitability for a security clearance, the administrative judge must consider the adjudicative guidelines. In addition to brief introductory explanations for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are required to be considered 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 overall adjudicative goal is a fair, impartial, and commonsense decision. According to AG ¶ 2(c), 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 access to classified information will be resolved in favor of 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. 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 to obtain 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 4 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. Section 7 of Executive Order 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). Under the whole-person concept, the administrative judge must consider the totality of an applicant’s conduct and all relevant circumstances in light of the nine adjudicative process factors in AG ¶ 2(a).1 Analysis Guideline F, Financial Considerations The security concerns about financial considerations are set forth 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. Applicant’s recurrent financial problems trigger the application of disqualifying conditions AG ¶ 19(a), “inability or unwillingness to satisfy debts,” and AG ¶ 19(c), “a history of not meeting financial obligations.” The following mitigating conditions are potentially applicable: 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, or a death, divorce or separation), and the individual acted responsibly under the circumstances; 1 The factors under AG ¶ 2(a) are as follows: (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. 5 AG ¶ 20(c), the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control; and AG ¶ 20(d), the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts. Applicant’s financial problems in the 1990s related to her marriage to a spendthrift husband who incurred debt in both of their names that they were unable to satisfy. After their divorce, Applicant filed for Chapter 7 bankruptcy protection. The recurrence of Applicant’s financial problems in 2010 began when she and her fiancée ended their relationship, and they were exacerbated by her children, who frequently stole money from her to support their drug addictions. Applicant satisfied the delinquent debts alleged in subparagraphs 1.a through 1.c, and 1.g, totaling approximately $1,100. I resolve these allegations in her favor. The satisfaction of these debts, considered together with the cause of her financial problems triggers the application of AG ¶ 20(b) and 20(d). The amount of debt that Applicant has satisfied is marginal in comparison to the amount that remains outstanding. Moreover, she just scheduled a meeting with a credit counselor after the hearing. Most importantly, one of her outstanding debts is a three-year old federal income tax delinquency in excess of $1,500. Absent any supporting evidence, her promise to pay the delinquency with her refund from tax year 2016 is merely speculative. Applicant’s efforts at initiating the payment of her delinquent debts is commendable given the personal adversity that she has had to overcome over the years. However, incurring delinquent income taxes poses a security risk that is more serious than incurring commercial delinquencies, as it indicates that Applicant may “have a problem abiding by well-established rules and regulations.” (ISCR Case No. 15-01031 (June 15, 2016) at 4) Under these circumstances, AG ¶ 20(c) is inapplicable. Whole-Person Concept Applicant’s delinquent debt resulted from circumstances beyond her control. Although she has taken steps to resolve her financial problems, she did not begin this process until recently, and currently, she has satisfied less than $1,200 of the $22,500 that is outstanding. Moreover, the nature and seriousness of the outstanding debt is significant, as part of it consists of a federal income tax delinquency. Under these circumstances, it is too soon to conclude that Applicant has mitigated the financial considerations security concerns. The awarding of a security clearance is not a once in a lifetime occurrence, but is based on applying the factors, both disqualifying and mitigating, as set forth in the Directive, to the evidence presented. Under Applicant’s current circumstances, a clearance is not recommended, but should she be afforded an opportunity to reapply for a security 6 clearance in the future, she may well demonstrate persuasive evidence of her security worthiness. 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.c: For Applicant Subparagraphs 1.d – 1.f: Against Applicant Subparagraphs 1.g – 1.h: For Applicant Subparagraphs 1.i – 1.l: 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. _____________________ Marc E. Curry Administrative Judge