1 DEPARTMENT OF DEFENSE DEFENSE OFFICE OF HEARINGS AND APPEALS In the matter of: ) ) ) ISCR Case No. 16-02707 ) ) Applicant for Security Clearance ) Appearances For Government: Jeff A. Nagel, Department Counsel For Applicant: Pro se June 19, 2017 ______________ Decision ______________ LOKEY ANDERSON, Darlene D, Administrative Judge: Statement of the Case On February 19, 2015, Applicant submitted a security clearance application (e- QIP). On October 29, 2016, the Department of Defense issued a Statement of Reasons (SOR) to Applicant detailing security concerns under Guideline F, Financial Considerations and Guideline E, Personal Conduct. The action was taken under Executive Order (EO) 10865, Safeguarding Classified Information within Industry (February 20, 1960), as amended; Department of Defense Directive 5220.6, Defense Industrial Personnel Security Clearance Review Program (January 2, 1992), as amended (Directive); and the adjudicative guidelines (AG) effective June 8, 2007. Applicant answered the SOR on November 11, 2016 (Answer), and requested a hearing before an administrative judge. In his Answer, he admitted all of the allegations with some explanations. The case was assigned to me on January 17, 2017. The Defense Office of Hearings and Appeals (DOHA) issued a notice of hearing on March 7, 2017, scheduling the hearing for April 11, 2017. The hearing was convened as scheduled. The Government offered Exhibits (GXs) 1 through 5, which were admitted 2 without objection. The record remained open until close of business on April 21, 2017, to allow Applicant to submit additional documentation. Applicant offered four Post- Hearing exhibits which were admitted without objection. He also testified on his own behalf. DOHA received the transcript of the hearing (TR) on April 26, 2017. Findings of Fact Applicant is 34 years old. He is divorced with two children. He has two years of college, equivalent to an Associate’s degree. He is employed with a defense contractor as a Control Materials Handler. He is seeking to obtain a security clearance in connection with his employment. Guideline F - Financial Considerations The Government alleged that Applicant is ineligible for a clearance because he made financial decisions that indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which raise questions about his reliability, trustworthiness and ability to protect classified information. The SOR identified four debts totaling approximately $32,000. These debts include two delinquent credit card accounts, a delinquent telephone account, and a Federal tax lien. Credit Reports dated February 26, 2015; August 10, 2016; December 28, 2016; and April 7, 2017, confirm this indebtedness. (Applicant’s Exhibits 2, 3, 4, and 5.) Applicant served in the U.S. Army from July 2001 to September 2008, including two tours in Iraq. He served in the Army Reserves from September 2008 to June 2009. During his eight year military career, he received a number of awards and commendations for his service. Among his accolades are the Army Commendation medal, Army Achievement Medal, the Meritorious Service Medal, two Good Conduct Medals, and two Iraqi Campaign Medals. Applicant did not hold a security clearance during his military service. (Applicant’s Post-Hearing Exhibit 2.) When Applicant left the Army, he went to work for a defense contractor in Iraq for a year and a half. He attributes his present past-due indebtedness to his overseas assignment as a civilian employee. During this period, Applicant was earning in the low six figures and was not taxed. He states that his income tax returns were not completed on the correct forms. 1(a) A Federal tax lien was filed against him for tax year 2014 in the amount of $29,583. The tax lien remains owing. Applicant has not yet filed his income tax returns for tax years 2015 and 2016. He also claims that he did not save any money during his overseas assignment. (Tr. pp. 27-30.) Applicant is indebted to four creditors that he has not yet resolved. Two delinquent credit card debts, 1(b) and 1(c), one in the amount of $533 and the other in the amount of $2,043 remain owing. Applicant used both of these credit cards during his divorce. (Tr. pp. 31-33.) 3 1(d) A delinquent telephone bill in the amount of $333 remain owing. (Tr. p. 33.) Applicant currently earns about $1,196 every two weeks. He states that he is merely surviving on this. Although his regular monthly expenses are current, he does not have discretionary funds available to pay his delinquent debts. He is currently applying to go into the Army Reserves in order to earn extra money to resolve his past due indebtedness. (Tr. pp. 35-37.) Guideline E Personal Conduct The Government alleges that Applicant is ineligible for clearance because he has exhibited conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful and candid answers during the security clearance process or any other failure to cooperate with the security clearance process. Applicant completed an Electronic Questionnaire for Investigations Processing (e-QIP), dated February 19, 2015. (Government Exhibit 1.) Section 26, asked the following series of questions. Have you failed to file or pay Federal, state or other taxes when required by law or ordinance? Have you had bills or debts turned over to a collection agency? Have you had any account or credit card suspended, charged off or cancelled for failing to pay as agreed? Have you been over 120 days delinquent on any debts not previous entered? Applicant answered, “No” to each of the questions. His answers were not truthful. He deliberately failed to disclose the delinquent accounts set forth in the above guideline. Applicant stated that he applied for his security clearance in connection with his application to join the Army Reserves. He answered “NO” to each of the questions at issue in order to get it done as quickly as possible, and to shorten the process of entering the Army Reserves. (Tr. p. 40.) Applicant must have sufficient integrity to understand the importance of the security clearance application, and to do the right thing even when no one is looking. This conduct is unacceptable and shows poor judgment, unreliability and immaturity. There is no reasonable excuse for this misconduct. Letters of recommendation from both Applicant’s current and previous supervisors indicate that Applicant is one of the most productive, efficient, and hardest working employees in the company. His technical expertise, dedication and character have promoted a healthy work environment, and overall improved the success of the department. His leadership qualities have proved to be monumental in the overall success of the entire organization. He is highly regarded and recommended for a security clearance. (Applicant’s Post-Hearing Exhibits 3 and 4.) 4 Policies 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 for each guideline, the adjudicative guidelines list potentially disqualifying conditions and mitigating conditions, which are to be 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, administrative judges apply the guidelines 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 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 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. 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, the 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.” The applicant has the ultimate burden of persuasion to obtain a favorable clearance 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 the 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 adverse 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). 5 Analysis Guideline F - Financial Considerations The security concern for Financial Considerations 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. 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 risk of having to engage in illegal acts 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. The guideline notes several conditions that could raise security concerns under AG ¶ 19. Three are potentially applicable in this case: (a) inability or unwillingness 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 accumulated a significant amount of delinquent debt. His actions demonstrated both a history of not addressing his debt and an inability to do so. The evidence is sufficient to raise the above disqualifying conditions. There are no mitigating conditions under the Financial Considerations that are applicable here. The evidence shows that Applicant has several past-due debts and a substantial Federal tax lien that remains owing. He has done absolutely nothing to resolve this indebtedness. It does cast doubt on his current reliability, trustworthiness, or good judgment. Guideline E, Personal Conduct The security concern relating to the guideline for Personal Conduct is set out in AG ¶ 15: Conduct involving questionable judgment, lack of candor, dishonesty, or unwillingness to comply with rules and regulations can raise questions about an individual’s reliability, trustworthiness and ability to protect classified information. Of special interest is any failure to provide truthful 6 and candid answers during the security clearance process or any other failure to cooperate with the security clearance process. AG ¶ 16 describes conditions that could raise a security concern and may be disqualifying. The following disqualifying conditions are potentially applicable: (a) A deliberate omission, concealment, or falsification of relevant facts from any personnel security questionnaire, personal history statement, or similar form used to conduct investigations, determine employment qualifications, award benefits or status, determine security clearance eligibility or trustworthiness, or award fiduciary responsibilities. AG ¶ 17 provides conditions that could mitigate security concerns. There are no mitigating conditions that apply. The falsifications made by Applicant were deliberate. He answered the questions carelessly and without concern for the truth. He submitted the application when applying for the Army reserves. He knew or should have known the importance of disclosing accuracy on the security clearance application. As noted earlier, Applicant has failed to mitigate the Personal Conduct concern. 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 relevant facts and circumstances surrounding this case. I conclude Applicant has not mitigated Financial Considerations and Personal Conduct security concerns. 7 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.~d.: Against Applicant Paragraph 2, Guideline E: AGAINST APPLICANT Subparagraphs 2.a: 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 or continue Applicant’s eligibility for a security clearance. Eligibility for access to classified information is denied. ________________________ Darlene Lokey Anderson Administrative Judge