1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) [REDACTED] ) ISCR Case No. 16-01470 ) Applicant for Security Clearance ) Appearances For Government: Jeff A. Nagel, Esq., Department Counsel For Applicant: Pro se ______________ Decision ______________ MARINE, Gina L., Administrative Judge: This case involves security concerns raised under Guideline F (Financial Considerations). Eligibility for access to classified information is denied. Statement of the Case Applicant submitted a security clearance application (SCA) on November 1, 2015. On June 27, 2016, the Department of Defense Consolidated Adjudications Facility (DOD CAF) sent him a Statement of Reasons (SOR) alleging security concerns under Guideline F. The DOD CAF acted 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 (AG) implemented by the DOD on September 1, 2006. Applicant answered the SOR on July 13, 2016, and requested a decision on the record without a hearing. Department Counsel submitted the Government’s written case on August 17, 2016. On August 18, 2016, a complete copy of the file of relevant material (FORM) was sent to Applicant (including documents identified as Items 1 through 5), who was given an opportunity to file objections and submit material to refute, extenuate, or mitigate the Government’s evidence. He received the FORM on August 2 25, 2016, and did not respond. Item 1 contains the pleadings in the case. Items 2 through 5 are admitted into evidence. The case was assigned to me on May 18, 2017. Findings of Fact1 Applicant is 60 years old and has been married for 39 years. He has one adult daughter. He has been employed full time by a defense contractor since 2011 following two years of unemployment. He was self-employed with his wife from 1975 until 2009, when they closed down the business due to the recession. During his period of unemployment, Applicant received unemployment compensation.2 The SOR alleges four debts totaling $30,059, which are corroborated by Applicant’s credit reports.3 In his SOR Answer, Applicant admitted the allegations in SOR ¶¶ 1.a, 1.b, and 1.d. He denied the allegation in SOR ¶ 1.c on the basis that he paid it. He attributes these debts to his two-year period of unemployment, which was a first for him. Prior to that, he was employed steadily for over 40 years and always paid his obligations in a timely manner. A creditor was granted a $2,912 court judgment in 2011 against Applicant for money owed for scale-weighing equipment (SOR ¶ 1.a).4 In his July 2016 SOR answer, Applicant expressed an intent to pay it “as soon as it is financially possible” despite an earlier dispute of the debt. He claimed that the agreement underlying the debt did not bear his signature. This debt remains unresolved. Applicant opened a credit-card account in 2001, with a credit limit of $18,700. When he and his wife were unemployed, they used this card to pay bills and living expenses. The account became delinquent in 2010. The creditor charged off the account in the amount of $20,301 (SOR ¶ 1.b).5 This debt remains unresolved. A medical creditor placed Applicant’s account in collection in the amount of $315 (SOR ¶ 1.c).6 Applicant claims that he paid this debt in June 2016. However, he did not provide any corroborating documentation. Therefore, this debt remains unresolved. 1 I extracted these facts from Applicant’s answer to the SOR (Item 1) and the SCA (Item 2), unless otherwise indicated by citation to another item in the record. 2 See also Item 3. Because Applicant did not respond to the FORM and affirmatively waive any objection to Item 3, I will consider only those facts in Item 3 that are not adverse to the Applicant unless they are contained in other evidence or based upon Applicant’s admissions in his answer. 3 Items 4 and 5. 4 Items 4 and 5. 5 Items 4 and 5. 6 Items 4 and 5. 3 Applicant opened a credit-card account in 1995 with a credit limit of $6,000 for use as a business account to pay for business expenses. The account became delinquent when he and his wife were unemployed. The creditor charged off the account in the amount of $6,531 (SOR ¶ 1.b).7 This debt remains unresolved. With respect to the debts alleged in SOR ¶¶ 1.a and 1.b, Applicant stated during his January 2016 subject interview that he would not pay them, but then decided as of his June 2016 subject interview to pay them in order to get them off of his credit report.8 In his SOR answer, Applicant did not express any intent to pay the debts alleged in SOR ¶¶ 1.b. or 1.d. Instead, he implied that he did not intend to pay them since “it was [his creditors’] decision to charge off the account rather than wait and make some kind of deal.” As of 2009, Applicant incurred approximately in delinquent taxes owed to the Internal Revenue Service, which he resolved in 2015. In July 2015, Applicant opened a $65,000 home equity line of credit with a balance of $65,263 as of August 2016. In July 2016, he financed a $16,772 automobile. He pays both accounts as agreed.9 In his SOR answer, Applicant averred that he and his wife live a modest lifestyle in a 1200 square foot home that is 40 years old. They take care of his elderly mother and have not taken a vacation in 10 years. He loves his country and would do anything to defend it. The record contains no evidence that Applicant has either sought or received any credit counseling. In the FORM, Department Counsel advised Applicant that he failed to provide any documentary evidence of mitigating facts or establish that he acted reasonably and responsibly to address his delinquent debt. Applicant did not respond to the FORM. Policies “[N]o one has a ‘right’ to a security clearance.”10 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.”11 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.”12 7 Item 4. 8 Item 3. 9 Item 5. 10 Department of the Navy v. Egan, 484 U.S. 518, 528 (1988). 11 Egan at 527. 12 EO 10865 § 2. 4 Eligibility for a security clearance is predicated upon the applicant 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.”13 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.14 “Substantial evidence” is “more than a scintilla but less than a preponderance.”15 The guidelines presume a nexus or rational connection between proven conduct under any of the criteria listed therein and an applicant’s security suitability.16 Once the Government establishes a disqualifying condition by substantial evidence, the burden shifts to the applicant to rebut, explain, extenuate, or mitigate the facts.17 An applicant has the burden of proving a mitigating condition, and the burden of disproving it never shifts to the Government.18 13 EO 10865 § 7. 14 See Egan, 484 U.S. at 531. 15 See v. Washington Metro. Area Transit Auth., 36 F.3d 375, 380 (4th Cir. 1994). 16 See ISCR Case No. 92-1106 at 3, 1993 WL 545051 at *3 (App. Bd. Oct. 7, 1993). 17 Directive ¶ E3.1.15. 18 See ISCR Case No. 02-31154 at 5 (App. Bd. Sep. 22, 2005). 5 An applicant “has the ultimate burden of demonstrating that it is clearly consistent with the national interest to grant or continue his security clearance.”19 “[S]ecurity clearance determinations should err, if they must, on the side of denials.”20 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 a person might knowingly compromise classified information to raise money. It encompasses concerns about a person’s self-control, judgment, and other qualities essential to protecting classified information. A person who is financially irresponsible may also be irresponsible, unconcerned, or negligent in handling and safeguarding classified information.21 Applicant’s admissions, corroborated by his credit bureau reports, establish two disqualifying conditions under this guideline: AG ¶ 19(a) (“inability or unwillingness to satisfy debts”) and AG ¶ 19(c) (“a history of not meeting financial obligations”). The security concerns raised in the SOR may be mitigated by any of the following potentially applicable factors: 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, or a death, divorce or separation), and the individual acted responsibly under the circumstances; 19 ISCR Case No. 01-20700 at 3 (App. Bd. Dec. 19, 2002). 20 Egan, 484 U.S. at 531; See also AG ¶ 2(b). 21 See ISCR Case No. 11-05365 at 3 (App. Bd. May 1, 2012). 6 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; AG ¶ 20(d): the individual initiated 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. AG ¶ 20(a) is not established. Applicant’s numerous delinquent debts remain unresolved and have persisted in the six years since he regained full-time employment. AG ¶ 20(b) is not established. Applicant’s unemployment after he closed his business due to the recession was a circumstance beyond his control. However, Applicant has failed to meet his burden to show that he acted responsibly in light of those circumstances. AG ¶ 20(c) is not established. Applicant has not received any financial counseling and his debts remain unresolved. Therefore, I cannot conclude that his financial problems are under control. AG ¶ 20(d) is not established. Because his claim was unsubstantiated by corroborating documentary evidence, I cannot conclude that Applicant paid the debt alleged in SOR ¶ 1.b. AG ¶ 20(e) is not established. Applicant initially disputed the debt alleged in SOR ¶ 1.a. However, in his SOR answer, Applicant admitted that he owed the debt and promised to pay it. 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(a): (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 7 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, and I have considered the factors AG ¶ 2(a). 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 not mitigated the security concerns raised by his financial indebtedness. Accordingly, he has not carried his burden of showing that it is clearly consistent with the national interest to grant him eligibility for access to classified information. Formal Findings I make the following formal findings on the allegations in the SOR: Paragraph 1, Guideline F (Financial Considerations): AGAINST APPLICANT Subparagraphs 1.a – 1.d: Against Applicant Conclusion I conclude that it is not clearly consistent with the national interest to grant Applicant eligibility for access to classified information. Clearance is denied. Gina L. Marine Administrative Judge